Legislative Assembly of Ontario

SOCIAL CONTRACT ACT / LOI DE 1993 SUR LE CONTRAT SOCIAL

---

Report continued from volume A.

1710

SOCIAL CONTRACT ACT / LOI DE 1993 SUR LE CONTRAT SOCIAL

Continuation of debate on the motion for second reading of Bill 48, An Act to encourage negotiated settlements in the public sector to preserve jobs and services while managing reductions in expenditures and to provide for certain matters related to the Government's expenditure reduction program / Loi visant à favoriser la négociation d'accords dans le secteur public de façon à protéger les emplois et les services tout en réduisant les dépenses et traitant de certaines questions relatives au programme de réduction des dépenses du gouvernement.

Mr W. Donald Cousens (Markham): I feel compelled to participate in this debate on Bill 48, and it's a very significant piece of legislation. It's unfortunate that we've reached the point in the province of Ontario where we're dealing with so many large problems and such a short time to deal with them.

Now that the government has recognized the nature of the crisis that we're in and is dealing with it in the way it is, I have to go on record in explaining our position as a party and concur with the statement made earlier by the member for Etobicoke West, that as painful as it is, the nature of this legislation is such that our caucus will consider and will vote in favour on the second reading of this bill, but without tying ourselves to what we're going to do on third reading by virtue of the recommendations and amendments that we have to make to the bill.

Inasmuch as second reading debate is something where we're dealing with the intentions of the bill and that it can change significantly and to a degree that can satisfy our concerns by the time we get to third reading, there may well be a number of amendments that are accepted by the government that we would present in committee of the whole or in any other forum that is allowed, and at that time we would be able to look at our position for third reading.

So I want to make it very clear that our caucus is not pleased with many, many aspects of this bill and in offering our support to the bill, we are being very reluctant and very careful in that we are not in any way trying to construe by that support that we are totally supportive of all the initiatives that the bill includes or all the initiatives that Mr Rae and his government have been pursuing over the last several months in the social contract discussions.

I'd like to go back just in part, because when the government brought forward its proposal, there were really three parts to it. The first part was the expenditure control plan, wherein the government was trying to cut from the $17-billion proposed deficit some $2.4 billion. A series of cuts were being suggested by the government, many of them painful and many of them wrong, yet the government, in coming forward with at least an effort to cut back government spending, as painful as it is, throughout the system and as painful as it is for some of the programs -- I know the agricultural community is reeling at the fact that two of the agricultural colleges are being removed -- It cuts across the service levels of the province and yet there has to be enough fat within such a large budget that we should be able to find $2.4 billion. So we're on record as supporting the effort by the government to reduce the spending of government by that amount.

When the government also announced the beginning of the social contract talks, as the spokesperson for our party I also said we would support the intentions behind the social contract discussions, with the hope that those discussions could lead to some kind of mutually beneficial arrangement in which the government would find another $2 billion.

I made it very clear as well at that time that this is really one step forward. If the government is able to find over $4 billion through these processes, that is indeed a significant step forward from a government which, since it's been in office, has been so busy spending money.

I also made it very clear -- and I think this has been lost by many people -- that when you consider that the government's three-pronged approach to its deficit and spending has to do with the first two I just mentioned, the expenditure control plan and the social contract, and the third part is the increases in taxes, I want to make it emphatically clear that our leader, Mr Harris, the member for Nipissing, and our caucus are 100% united in fighting this government on its excessive $2-billion tax increases. There is just nothing that can hold back our sense of anger and frustration at the government's efforts to increase the size of its coffers at the expense of everybody in this province.

It's the most offensive budget since we've seen Bob Nixon in power. There isn't any doubt that this government is now at the point where it's driven people to the tax wall. We're seeing an increase in the underground economy at every level, where people are now trying to do what they can to escape paying provincial sales tax and GST. You're seeing bootlegging, booze coming in from the States. Manufacturing places in the States are now in the process of manufacturing spirits and importing them across the border in bottles, using all the symbols on them that would make them look as if they were Canadian-made products and sold through one of the distribution outlets in Ontario.

The underground economy is thriving in this province, and one of the reasons it's thriving is that people can no longer afford to pay the high level of tax. In order to escape that tax you're finding the barter system in place, where one person will provide a service to another without there being any kind of receipt or paperwork. You're seeing so many businesses that are offering services where, if you pay cash in that case, then you get a reduced amount, and more than just the amount that would have the provincial sales tax and the GST. It's a reduced amount far in excess of that, because it's obvious that the people are not going to be putting those costs on their tax form.

But this government doesn't understand the balance that has to take place with an economy that's going to be strong and vibrant. What this government has done is now raise the level of taxes to such a high level that we're one of the highest-taxed jurisdictions in North America, if not the world. That, in itself, is an offence of great order inasmuch as it's now discouraging outside investors from coming into our province, it's discouraging people from creating more jobs and it's taking money out of the marketplace to create those jobs. The fact is that for every $40,000 in additional taxes, it is the loss of one more job in the marketplace. It means you as a government have lost some 50,000 jobs through this $2-billion tax hike.

The economy was beginning to come back. Through the budget that this government has brought in, the economy has been set back to some degree.

Our purpose today in dealing with the government's financial affairs is to deal in particular with the social contract, which is what the subject of Bill 48 is all about.

Just before I comment further on that, the rudeness of the government offends me greatly. In fact, our caucus a few weeks ago raised a furore in this House when we brought to the attention of the Speaker and the government that only two days had been spent on budget debate. We've spent longer on the Sunday shopping debate, we've spent longer on other issues and yet only two days on the most significant subject that faces the province of Ontario.

1720

There are only a few members from our caucus who have had an opportunity to speak on the budget speech. It's a traditional speech. In the past there's always been, in my recollection for the 12 years that I've been in this House, at least five days spent in debating the budget. It allows people from all sections of the House to put on the record concerns they have with regard to the economy of the province and the government's spending patterns. That has not happened. In this House, the government House leader assured us, our House leader and our leader that there would indeed be more time for a budget debate. That has not happened.

I draw that to the attention of the Speaker, who has no control over what the government's going to do, but it is all part and parcel of our having rights in opposition to be able to debate, hopefully intelligently, the issues that are before the House. What the government is now doing is tabling legislation, tabling its matters sometimes outside the House, but when it does, it's not giving us an opportunity to reflect on it publicly and openly.

Now we're into a situation where the province's economy is in tatters. There isn't anyone, I hope, who doesn't understand how grave the problem is in this province today. We're living beyond our means. When you have deficits that are projected as large as they are -- it wasn't that long ago that a $10-billion deficit was seen to be grossly high, absolutely enough to cause people to say, "How can you ever spend beyond your means like that?" Yet the Bob Rae government brought in a deficit of over $10 billion and also a tax increase a couple of years ago. Now, again, it's as if they've reached another state of understanding things. They say: "Oh, well, we're going to have a $17-billion deficit all in one fell swoop. We've got to do something to cut back." But they're also increasing the taxes at the same time.

I just have to say that the government's brought on a large part of the problem itself. In their first year of government, Mr Rae and his socialists felt they could spend their way out of the recession, and they couldn't. Some people may have forgotten, but the salary line on all the public service in the province of Ontario during the 1990-91 year -- that's the 1990-91 fiscal year -- the cost of salaries in the whole public service in Ontario went up by 16%. It was an over 16% increase on the salary line, in part because of the pay equity legislation the Liberals had brought in before them, but also in part because of the 6% and 7% increases through salary agreements that were being brought in by the government at the time. Very, very generous settlements were being offered, far in excess of inflation, and that exacerbated the already very serious problem of spending beyond our means.

The fact that senior public servants received increases in their personal wage package, benefits and so on, in excess of 16% during that first fiscal year of the Bob Rae government is another example of a government that had no understanding of the costs of running this. It seemed to them as if it was a bottomless well in which there was going to be more and more money to pay for ongoing programs and services and people and everything else. So what was perpetuated during that period of time is something of the Liberal philosophy of tax and spend. You tax it and then you spend it right back. But there wasn't any sense of putting the moneys away for another day.

Now we're at the point where we're looking at a very important piece of legislation, very divisive for the New Democrats. There are a number of their members already on public record who are going to oppose this bill. After this weekend, when the New Democratic council meets, maybe even more members of the New Democratic caucus will be having second thoughts on whether or not they will support Bill 48.

If they withdraw that support, the support of the government could be reduced to such a level that without the support of our party this bill may not pass. What I am saying is that our party will support, at least on second reading, what happens with the bill. What we do on third reading we are holding in reserve, depending on the consideration that is given by this government on our amendments that we're going to be putting forward.

I think I should mention this, because many people may not realize that if this bill fails, if it does not pass in the House, it is not a confidence motion that would cause the government to fall. My understanding is that should the government fail to pass Bill 48, for whatever reason, it would mean that the social contract legislation would not proceed but that the government does not fall at that time.

There are only special bills in which it's declared as a confidence motion. If Mr Rae or his cabinet, Mr Laughren or another spokesperson, were to say that this is a confidence bill, in that case this would become all the more important. It is important legislation, but the government will not necessarily fall should the legislation not pass.

Notwithstanding that, the New Democratic Party's failed social contract process has now spawned a complex and confusing bill in which the government offers the public sector and the public workers the worst of all options in an effort to salvage its deficit-reduction scheme. The NDP social contract act will deliver short-term pain but will make it more difficult to achieve permanent reductions in the size and cost of the public sector.

There are a number of elements in the bill: The job security clause under which every worker affected by the abolition of their position would have priority for another job with the same public sector employer or with employers in the same industry or within the same region. It also has a $300-million, three-year fund to top up laid-off workers' UI benefits to 95% of their take-home pay for a one-year period or to be used to extend their notice periods. It also includes labour participation on a capital partnership board. It includes a deferment of all wage and merit increases until April 1, 1996, some three years from now.

It also has worker involvement in eliminating waste, with half the savings to be applied to the reduction target for the sector where the saving was realized or where waste was eliminated, and the other half can be retained by the employer. It's a system also of unpaid leaves of absence administered to protect services. It also has an exemption for employees making less than $30,000 a year. A number of those elements I will expand upon in greater detail.

What I really see this bill doing is providing the government with a stick, thinly disguised as a carrot, and a bigger stick in the form of a legislated wage freeze, and a bigger stick in the form of unpaid leave and layoffs to use in its effort to reduce some $2 billion a year in each of the next three years from the broader public service compensation costs.

The bill goes on to cut transfer payments as of July 1, 1993, and sets August 1, 1993, some six weeks from the date of the introduction of the bill, as the deadline for sector and local negotiations in which parties are to negotiate cost savings equal to the reductions in the transfer payment for their respective sectors, a very, very short time frame in which they're expecting an awful lot to happen; a worrisome, short time frame.

What happens then is that those who are able to come to a satisfactory conclusion in that time who are non-union members are able to protect themselves. If they are non-union and they do not have a settlement by August 1, then they are going to be treated differently than union members within the broader public service.

There are more elements within the bill. I have a copy of the bill and I've gone through it. It takes a lot of reading. As the public knows, when lawyers get to work to put an act together, they try to cover everything they possibly can. I often chuckle when I think of it. In Canada we have four times the number of lawyers they have in Japan, and I'm sure most of them are working around Queen's Park half the time to try to make things a little bit more complicated for us who are not lawyers. Anyway, it just guarantees their continuing existence and their continuing work over the next three years, when there will be other forms of cutbacks.

1730

May I just say, as I've gone through the bill, it's got a lot of words in it that are surprisingly different from what you'd normally have in very strong legislation. At the very preamble in the bill, it says, "In order to achieve significant savings in public sector expenditures in a fair and equitable manner." Boy oh boy, I venture to say that anyone who is operating with the kind of stick-or-carrot approach the government has and using its power as it is and doing the things it is within the bill -- to say that this is fairness and equity is a definition that's only being applied by the government.

For anyone else to believe the words that are being presented by the government when it says, "Oh, we're being fair and equitable," just stop and ask some questions. Don't believe all that the government is saying in its press relations program, because the government goes on, and in the whole preamble it starts saying there's going to be "Job security including redeployment and training and adjustment for employees."

Job security, I hope, for some, but there's going to be job insecurity for many, because what's going to happen as they pass-through from the province, when the province ceases to pay the unconditional grants to municipalities, school boards, hospitals and all the other sectors that are involved, there are going to be ways in which those jurisdictions have to find the money. If they don't find the money -- if they can't, never mind if they don't -- through days off alone or in a review of their own programs, there will be layoffs. There will be layoffs across the broader public sector in the province of Ontario. That's why so much of the bill has to do with the $300-million adjustment fund to help those people who are laid off, those people who are going to have their unemployment benefits pumped up to a level of 95% of their salary for up to a year after they are laid off.

So for the government to say you're going to have job security is not very accurate in describing the kind of insecurity that the people in the public service are going through now. They're tremendously insecure. In fact, one of the real benefits for people who in the past have worked in the public sector is that they've had that sense that they do a good job, and as one who has dealt over a longer period of time than some, I suppose, with the public sector at the municipal and school and at every level, I have largely been impressed by the quality of service, by the dedication they put in.

I know those exceptions stand out, where someone says, "Oh, they just go and read a book," and there are other things. Yes, I know there needs to be more efficiency and I know we can downsize the broader public service; I know we can bring that about. But to come along in the bill and say job security is there is a myth, and in fact does not reflect what is going to happen as this bill is implemented.

The empty words in this bill in the preamble, that there is "encouragement of efficiency and productivity savings in the public sector," I will touch upon that later in some of the amendments that our caucus is bringing forward, but you can't just say "encouragement of efficiency." There has to be protection for the public employees who are coming forward with suggestions. There still hasn't been any whistle-blower legislation brought forward by this government, even though it promised to in its first speech from the throne.

I don't know whether there's a ruling that's been made by the federal government on this yet, but I've never thought it possible in the past that anyone could add to the unemployment fund to give people an extra bonus in addition to unemployment insurance unless you get a special ruling from the federal government to make that possible. I don't know whether the government has that approval yet, whether it is within the law for it to say it is going to supplement unemployment insurance to 95% of one's salary if in fact the federal government says, "No, you can't." So this bill may be fraught with problems just on that element alone.

There are a number of parts of the bill that I would like to just touch on before I go into some of the other points I'm going to raise. First of all, the powers of the minister: The powers of the minister are unreal. It gives tremendous flexibility to the Minister of Finance to do whatever is decided to be in his best interests, and those best interests may not be in the best interests of the province, inasmuch as so much will reside upon him.

This goes into part IV, subsection 11(3): "The minister shall not designate a plan as the sectoral framework unless, in the opinion of the minister, the plan meets the following criteria." Then it starts outlining the criteria of those who will be included in the sector, and these are the kind of weasel words in the legislation: If "there is sufficient support for the plan," in other words, the plan the unions are discussing with their membership, if he says, "Oh, well, there's sufficient support there," what's sufficient? Is it over 50% or is it over 5% or is it because he knows a few people there and he wants to have a success story to say that government's succeeding in its proposals? He then can arbitrarily, unilaterally decide yes, there's sufficient support there.

It's almost like Mr Rae when he answered the questions of our leader in the House today. It's as if we're dumb and he's smart. Everything is going to be residing in the mind of the minister rather than in the form of some tribunal or some group independent of the socialist philosophy that is so much a part of this government.

The test on the power of the minister to see that this bill is implemented fairly across all the sector is very subjective, subjective on the part of the minister. Who knows what guidelines and what criteria he will be using at that time?

It goes on to say that if it meets the criteria, if "the plan contains appropriate" -- "appropriate," that's the word -- "appropriate provisions to minimize job losses in the sector," and then again it uses that magic word, "provisions respecting the redeployment of employees in the sector who are released from employment."

That's what's happening. We're moving so quickly on this panic program the Rae government has presented that a tremendous amount of freedom will lie in the hands of that Minister of Finance to play his game.

I am concerned as well with how the plan has certain effects -- and this comes into the same section under the framework for the plan -- on those who are earning less than $30,000 a year. What it says is that there is no limit to the amount of overtime they can claim. So if you're making $30,000 a year and a municipality is saying, "Look, we've had so many people off with another section of the bill, their 12 days off, that we can give you overtime," there could well be another whole series of expenditures for all the people who are having to work overtime under the $30,000 bracket because their limit of $30,000 doesn't include overtime pay. Therefore, municipal councils that want to do an end run on the legislation could say, "In order to satisfy what we have to do, you're under $30,000; we're going to give you overtime to solve the problem for us so that we can keep certain services going."

It goes on to explain the powers and then there's one caveat clause: "Subsection (3) does not apply to a plan if, in the opinion of the minister, special circumstances apply and it is desirable to designate the plan as a sectoral framework." So the minister again has more freedom to do anything he wants to do. It's quite amazing, the powers that fall in his hands.

There's one other section, and I'm surprised the unionists in the New Democratic Party are supporting section 22, where it says, "The provisions of a non-bargaining unit plan prevail over any provision in any other act or the regulations thereunder that relates to holidays, vacations, hours...." It just says the total power that is now given to the government in Bill 48 breaks all the other laws. This now becomes the law as it affects negotiations and agreements with people. I would suggest that anyone who has any kind of agreement as an employee within the public sector come back and really understand what Mr Rae's government is trying to do to them by breaking all historic agreements that have existed before.

1740

I also suggest that anyone who is a non-union member of any bargaining unit understand that your rights are different from union members. That's always been so, but I just want you to know that this government has said, "A non-bargaining unit employee has no right to grieve under the Public Service Act or any other act in respect of actions taken by his or her employer in accordance with a non-bargaining unit plan." Again, their rights as individuals are taken away.

It's probably under those particular sections that the unions are going to take this to the courts, so the bill, if passed, could well end up in the courts and be found to be against the Constitution of Canada, because it's taking away the rights of individuals. That becomes another whole issue, and again, the lawyers will prosper on that one.

I want to touch on the bill itself, because you have to read it to believe it, that in fact a socialist government is bringing it forward.

When they're talking about where there's no agreement or plan, it really gets complicated. This part does not apply to "employees who work full time and who earn less than $30,000 annually, excluding overtime pay, or employees who work part-time if their full-time equivalent earnings would be less than $30,000 annually." In other words, you could be working part-time right up to $30,000 and then go and get some extra money out of them as well. So there are all kinds of exclusion clauses within the bill that cause people, I think, some concern when they start looking at it.

The other thing is that we'll have to look at the catch-up at the end of the bill, on March 31, 1996, when everything's over, according to this bill, and some other government will be in power. I'd be willing to make a very safe bet with anyone who wants it that this government won't be around in 1996. I'm not usually a gambling person, but anyone who wants to take a bet on that -- I'm not sure whether it will be the Conservatives in power, I hope it is, but it sure won't be the New Democrats.

What happens is that at the end of this bill, of the time of its implementation, we start getting all the kick-ins of all the pent-up costs that have accumulated during that period of time.

What will happen is that those employees who are too valuable to the job -- I'm coming to a section in the bill where it describes who they are, a person who performs critical functions, section 26. People who perform critical functions, who can't take the 12 mandatory days off that their employer wants them to take off, can accumulate those 12 days off to the end of the three years and then apply for compensation for them. Then you're going to have a bump at the end of the three years from those who have gone ahead and had to do something during this period of time. In other words, this is going to provide a small valley in the meantime, but in the long term we're going to be back where we were.

The government has to understand what we all learned after Pierre Elliott Trudeau brought in wage and price controls. Talk to the economists, talk to the people who remember the 1970s and they will tell you that immediately after they were over, there was a catch-up that immediately started to take place.

This bill will force catch-up to start being the curse of 1996, because at that time everyone who has had some kind of suffering, a lot of suffering between now and then, will say: "It's time to catch up. We've got a pent-up demand for more money. We are owed more." The negotiations are going to be terrible. They were at the end of the wage and price controls of Pierre Elliott Trudeau; they will be on the wage control package of the Ontario government known as Bill 48.

It goes on all through the bill. It isn't just in one clause where the powers are given to the minister, "The minister may make necessary adjustments to the periods set out." Again, all kinds of opportunity for the minister to massage the bill and make the changes he wants.

I'm concerned as well with subsection 25(4) of the bill. If people want to know where the money is coming from for the $300 million or $500 million that's going to be in the compensation fund, this is the section that I think helps get the government its money. This is the area where they're going to have it. Maybe the New Democrats -- no, I'm not going to say how many of them have read the bill. It doesn't really matter. The fact is that Bob Rae and Floyd Laughren, the Premier and the Minister of Finance, are proceeding with it anyway.

What you'd better understand is that any employee who is forced to take time off because of the 12 days will continue to pay for his pension for those days, while they're off, and so will the employer, so there isn't any full stop to the cost of all the employee benefits. The pension part continues to go in the big pot, which could well amount to $500 million over the next three years, and the government may well be funding its special fund for employment loss.

I just quote, "...an employer's or employee's obligation to contribute to a pension plan and an employee's entitlement under a pension plan are not affected by any reduction in earnings that results from the employee taking unpaid leaves of absence under," from another section of the bill. So there it is. Again, they've got their bases covered.

I want to understand and I don't think we will till we get to committee, but there's another subsection here, "If an employee performs critical functions as prescribed by regulation and the employer is unable" to do the job for whatever reason, they may be required to take special leave. I want to know, and I will need to know by the government, who it would define as those who would perform critical functions. You see, it leaves so much room for individual decisions and judgements to be made by the government that it's open to question as to what that will be.

All kinds of things that happen -- I am concerned at the accumulation that goes on with this bill because those persons who perform critical functions could be a fireperson, could be a policeperson, could be a chief administrative officer in a jurisdiction, could be the person who keeps the waterworks going so that people can have running water in their homes. Any of those people who cannot, for reasons of the critical function they're performing, may carry forward those 12 days off to future years, including after March 31, 1996. Wow, there it is. Back to the future is where that one goes.

Other parts of the bill: The bill will give unbelievable powers to cabinet. It goes down to clause (m), so how many that is -- all the definitions, all the regulations, all the powers of the government. This Legislature is going to give to Mr Laughren, the Treasurer, the Minister of Finance, unbelievable powers under section 41 of the bill. So there it is.

It's a bill that has an intention to save $2 billion. That's the intention I support. The way the government is going about it is what creates incredible concerns to my leader, Mr Harris, and our caucus. We have suggested a number of amendments and I will be bringing them forward in detail as we discuss this bill in committee.

First of all, the government should institute a three-year hiring freeze, which has the potential, over a period of three years, of reducing the number of public servants by over 50,000 people, and by the end of that period of time, our reckoning is that it will be saving over $2 billion a year by the third year.

I realize that part of the problem is that it doesn't have the short-term quick fix that is part and parcel of the New Democrats' approach in this bill, but it has a long-term implication that will cause the government to reorganize and restructure itself.

I'm honorary chairman of the York Technology Association, a high-technology group of companies, and I'm seeing corporations, the very large computer companies, over the last number of years having to do business differently, where they've downsized. We use these terms so nicely, it's almost as if, when you're dealing with death, you don't say that someone died; you say they passed away.

We've developed these soft terms to make it sound as if you're being nice. Death is death and layoffs are layoffs. Losing your job is a serious problem and the whole problem of forced downsizing is just another way of saying layoffs, and it's problems and hurt to those people who lose their jobs.

1750

Our presentation says, "Let's try to do" -- and it's going to be hard to do it. I really appreciated the way that my leader today tried to say there's nothing easy about our approach either. We're not trying to be simplistic in saying what we are. But we're saying that if we, through attrition, allow the government to become smaller, then over a period of time there will have to be a restructuring and reorganization of departments and services within government, because there'll be tradeoffs going on, knowing that you can't come along, unless it's a very essential service -- and some of those will have to be filled. But there will have to be a downsizing and reorganizing of government that begins to make the government more efficient with fewer people.

That is what has happened in the private sector over the last number of years. A significant amount is happening with fewer people, because with fewer people through attrition, you're able to, hopefully, keep a level of service up. People will work harder, people will do more, people will have to be more flexible. You're talking, as Drucker talks, about the post-capitalist society. New guidelines and rules will come into force. People will not have some of the freedoms and luxuries they've had before, because there'll be more pressure on the public service.

I have seen that pressure in the private sector, where the private sector, over the last number of years, has been under a heavy load to do more with less. One of our sincere requests of the government is to look at having a hiring freeze. That becomes one of the issues.

The other thing is a public sector freeze. We've said this for ages. It goes back into a very excellent document that our caucus put together. In 1991, the Ontario caucus put together A Blueprint for Economic Renewal and Prosperity in Ontario. One of the key issues that we had within this document, going back a couple of years ago, has to do with expenditure controls to cut and redirect government spending. We go into these whole issues where we want to control the costs of government. We've been saying it. We believe it. We know it can happen.

I know that in my first few years in the Legislature -- Mr Davis was still Premier at the time -- there was a tremendous effort to bring the size of government down through attrition. Painful as it was, it was happening, because during the four-year period I was here, approximately 7,000 fewer jobs were available in the province of Ontario. Slowly but surely -- through attrition, not through job loss -- the government service was being fine-tuned, forced to do more.

I'm saying in this one that there be a sector wage freeze and that all sectors have an immediate freeze on the anniversary of all contracts and may it continue for a three-year period from that date, so that at some point everyone in their contract with the province of Ontario will have a wage freeze for three years.

The third thing we would do -- and I brought this in the House back a few weeks ago and asked the Minister of Finance to look at it -- is whistle-blower provisions to protect public servants who report fraud, waste or other abuses. Those who report some fraud or some problem in the Legislature would be protected and would not lose their jobs, would not be punished. There would be legislation to protect those people who have a chance to help improve government.

The government promised in the first speech from the throne that there would be whistle-blower legislation. It has not come. I know for a fact that there are public servants who are reluctant to come forward with their suggestions for fear of reprisals against them.

The fourth point that we would do is stop the year-end burnoff. Our critic for Housing, the member for Mississauga South, and the leader have found in Ministry of Housing directives a directive that went out from a senior official in the Ministry of Housing advising the Housing offices across the province to spend their money before year-end. That's the kind of thing I just can't believe is still being countenanced and supported. The government has not stopped that logic, even within its own government. It has to stop it. Each ministry, each department, every unit should be finding ways of saving money for the year-end.

Another suggestion which is unique to the New Democrats, but not to us, is that there be performance bonuses for public servants based on efficiencies and productivity gains, similar to the private sector agreements, such as those involving the Canadian Auto Workers union, so that there are ways in which people who are serving the public can benefit from positive good suggestions of things they can do to make it a better place.

And then, this is one of those simple things, but that there be an establishment of an expenditure review committee to identify non-productive government programs and to prioritize existing programs. It's a program review, and it allows, for those areas in which there are continuing costs, continuing spending, that there is a way in which a forum is reviewing them and causing them to be re-investigated. It's in such a way that you have sunset clauses. We don't have enough sunset clauses. Everything the government introduces just seems to go on and on and on.

We're saying there has to be a time when everything is brought into a review and you say, "Do I continue to want to spend this money?"

People do it in their own homes. We're forced into it, because all of us, at least my friends and myself -- I'm making less money this year than I did last year and the year before. In fact I'm going back into my own home and my own lifestyle and reviewing our spending patterns as a family so that we're able to continue to do the important things and we're then able to identify those things that may not be as important that we're able to save some dollars on. That is all part of what government has to do, that there be an expenditure review committee that allows government to have a real review of what its costs are.

I've gone through the bill, and there are a number of things that are sincerely problematic for me on it. Some I've touched on, but I have them now in order and I have 10 points that I wanted to raise that are problems to this bill.

The first is, understand, ladies and gentlemen of the House and of the province of Ontario, by the province bringing into this bill -- one key ingredient is that people over $30,000 a year may be required to take 12 days off. So for the next three years, those over $30,000 a year with 12 days off means that there's close to a 5% saving in the salary line, which is the number the government's looking for in the social contract negotiations. If you're able to save 5% through the 900,000- plus public servants, 5% of their salaries will amount to the $2 billion.

And what happens at the end of the three years? Everyone's back where they were before. We're right back where we started from. So to have days off as a way of finding the 5% is a short-term solution. It's a panic-driven solution. It's a solution that gives us the problem three years from now.

Why can't Mr Rae and his ilk understand that it isn't a long-term solution he's coming up with? Come forward with something that has a long-term strategy to it, rather than what they're proposing with this. By deferring the problem to three years from now, you're leaving it for someone else to deal with, because that is going to be the consequence of saying, "You got 12 days off this year, 12 next, 12 -- " Then it all starts back and we're nowhere better off then than we are today. Plus on top of that you're going to have the pent-up demand for more money, more return, more everything. So I'm saying the first problem to this bill is you're deferring the problem of today to three years from now.

The second one is, this government is deferring the problem of looking at the bigger issues. The government is not having a program review. They have not begun a program review of any of the things. They are not having a review of the major crown corporations. They are not looking at privatization. I mean, how many times have they sold the SkyDome? I'm not sure. What they have to do is start saying: "What are we really going to do to get some money here? How can we approach the larger issue in a responsible way, without selling off all our assets either?"

1800

What I want to see them do, if you have a bigger view, is see how you can bring some of the entrepreneurial spirit into the way government is run.

There was a presentation today by the mayor of Pickering. The member for Durham West wasn't at most of the presentation, but it was by PACT, Pickering Ajax Citizens Together, and the mayor and others from Pickering, who were saying how upset they are with the Interim Waste Authority and its failure to come up with a proposal that's reasonable and responsible for a landfill site in Durham; they're really upset by it.

To my surprise -- well, not really, but to my joy -- they're saying, "Why doesn't the government look at the private sector to try to help the government solve the problem of garbage?" That was one of the key points they were trying to make, because they are saying the present Interim Waste Authority is costing some $27 million already. It's going to cost more because of the approach they're taking, lots, lots more, because it turns out that the sites they're identifying -- I'm getting off on a tangent -- are so bad. The sites they're choosing in Markham and Vaughan are on aquifers and on sand, and it's going to require a double- size liner. The clay alone could cost in the order of $130 million.

But there's no review. Once the government passed Bill 143 and brought in that legislation, no review, no consideration, no answer to our questions about the cost of the thing. They've made political decisions rather than technical decisions, so we were saying, look at the bigger issue.

Look at the bigger issue, and when you're looking at Bill 48, the big issue here is to know the whole cost of the whole project, and if there are ways of saving money, find them. They're my dollars, the taxpayers' dollars, and we don't want you to come along and say, "Because we made that decision two years ago, it's okay for ever and ever." It isn't. Everything we do should be up for review and consideration and rethinking. Take the big picture.

The third point, and I've touched on it earlier, is the unusual authority of the minister in this bill. I just don't trust him. I don't trust giving all this power to Pink Floyd, or Pink Slip Floyd or whatever we call the honourable Treasurer.

The Acting Speaker (Mr Noble Villeneuve): Please refer to the honourable member by his riding or his title within the government.

Mr Cousens: I didn't know you were listening, Mr Speaker, but now I see you are, and I shouldn't really refer to our Treasurer in that way.

I want to quote Robert Sheppard, in the Globe and Mail on June 16, because it's not just me thinking this. Mr Sheppard often has some good thoughts to share, and this has to do with the unusual authority of the minister.

"If the bill becomes law, Bob Rae's government will become chief, judge and lord high executioner of all matters pertaining to wages and benefits in the broad public sector (a group containing nearly one million people) for at least three years."

The big Pooh-Bah is going to be the honourable Treasurer. So one person, set up in a way that no one else has ever been, with such unprecedented powers, becomes judge, jury, referee and executioner; that's what he is. And if you want to allow him to have such unbelievable, unprecedented control, then I say: "No, don't give it to him. Restrict him; control him; put some ties and controls around him."

So get ready. We will be bringing a few amendments in that regard, because part of what can happen is that the Treasurer, by having such unbelievable control, can do whatever he wants. He can invoke provisions or he can revoke them. It can be a love-in with the unions. When you know how the NDP has been traditionally supported by at least the union heads -- not necessarily by the union members; I'm very pleased to say that I have found quite a large number of people who are members of the different unions who have supported our party and I hope will continue to. What will happen is that Mr Laughren, in this love-in that could take place, could have spitting one moment and scratching their back the next, and I'm just concerned that he won't know when to spit and when to scratch. So rather than allow him to have all that power, let's make sure we restrict him a little so there is a sense that the NDP isn't going to give it all away.

There it is. I think there's a serious problem with this bill. It's flawed by giving such unprecedented control to one person. It's a dictatorship already in the province. It's a one-party government. Ever since Bob Rae came to the province of Ontario, we have seen what it's like. He says one thing before he's elected and another thing after he's elected. So with this bill, who knows what they're going to do after the bill is passed? I can't trust them. One day they say they're opposed to Sunday shopping, then they're in favour of it. One day they're opposed to casinos, now they're in favour. One day they're opposed to auto insurance and now -- who's going to trust these politicians called NDP? I don't.

The other thing that worries me is the catch-up. It's really a problem for municipalities on the whole business of just getting caught up with what this bill is all about. They're halfway through the year. They've done their budgets and they've put out their tax bills. How are they going to accomplish all that has to be done within such a short time frame? That is a problem. It's not just the municipalities, it's every part of the public sector: school boards, hospitals, Hydro, I don't care who it is. They have such a problem to try to deal with in this next period of time.

My fifth point concern about this bill is, how many people are going to be laid off? I'd like the Treasurer to answer that question. Municipalities will have to make decisions about: Are they going to have rollbacks in salary or are they going to have layoffs? How are they going to access the fund to help with those layoffs? Will Metro be able to access the fund? Will all the different groups be able to access it? Will it be enough to help them do it?

The fact is that there are going to be layoffs with this government approach. That is not our approach. The approach presented by Mr Harris and the Conservative caucus, unlike the Liberals who don't have an approach, is to say, "Let there be a wage freeze for three years and let there be a hiring freeze for three years, and in that way we can begin to see something." We're going to see layoffs, and when people are laid off they have a year's protection, but what happens after that year?

I have friends who have lost their jobs for a number of reasons; the private sector has been devastated over the last number of years. We just saw how one of the major companies in Canada -- is able to do it in a softer way, but another 1,000 people are being laid off, largely affecting my riding. They will have some programs to help move people who have a number of years' service; none the less, they're young, vibrant, good people ready to work, yet the likelihood of finding a job is very, very small.

So how many are going to be laid off? Does the government have any idea? I don't think they do. I don't think I do. I don't know, but I want to ask the question and I'd like to see if the government could give us some answers.

My sixth point of concern about this bill is that there is no equity for municipalities that have been doing their job. I look at my municipality, and I'm especially proud to represent the riding of Markham; it's a great community and they're wonderful people. What we've seen in the last number of years is a municipal council, especially last year, that went to work and tried to reduce its spending and become more efficient. They downsized the number of people working for the municipality; they had a 2.5% decrease in their spending last year. In fact, when they did their budget this year, they reduced their budget again by another 8.5%, so they're spending less in 1993 than they did in 1991. It's hard to do, because so much of that has to do with salaries, people and services, yet they have downsized. They have downsized over the last number of years and have been responsible in trying to trim their costs.

Other municipalities haven't done as well. In Toronto last year, there was a 4.5% increase in its budget and they gave an increase to salaries. Why would Toronto and Markham be treated the same way? If my community has been downsizing over the last number of years and has trimmed off the fat, why doesn't the government, when they're developing their equations for what's going to be cut back, have some sense to say, "You know, we should look over the last three years as to what's been happening in those communities," and have a way of rolling in the savings that those communities have had over those two or three years and then take it into the future, so you're not just saying, "As of today; it doesn't matter what you did yesterday; it doesn't matter about anything else"?

Have some sense of looking at the big picture, and when you see that picture, you'll say, "Well, then there's a way of balancing it off," and those communities that have been responsible and worked towards a reduced budget and reduced costs will not be punished the same as those that may have some more fat.

1810

The member from Mississauga was talking earlier, and his municipality has, I have been told, a surplus, a budget reserve of over $300 million. Now, there are municipalities with that kind of reserve -- I know our community doesn't -- but yet we're all being treated in the same way on this one. AMO, the Association of Municipalities of Ontario, has said to look at the average over five years, to go back two years and do a three-four, have an averaging out. That way we're going to be able to have a more fair and equitable way of dealing with all municipalities.

My seventh point: If there is no sectoral agreement, and if the minister, using all his special powers, still doesn't see a sectoral agreement appear, I'm wondering what the regulations are going to be. I really have such a great deal of uncertainty as to the effect that's going to cause. Already we know that everybody has faced a huge tax increase this year. Now we know that there's going to be a huge reduction in spending ability for almost one million people in Ontario, because they'll have at least a 5.4% cut in their salary, so 11% of their dollars are not going to be available for other kinds of spending.

What I'm saying is that this government hasn't looked at other options to see just what can be done to find the moneys rather than cause the tremendous turmoil and hardship that is coming out of this bill.

I'm not just sure what my eighth point is. All of the issues for those people who are under $30,000, the fact that their overtime isn't covered in the bill, so they could be making up -- who knows? How much overtime do some people get? Could they make $5,000, $10,000, $15,000, $20,000 in overtime? I know some employees make well over $18,000 or $20,000 in overtime. That could be putting them up to $50,000, and yet overtime is not considered in this perspective, which maybe it should be.

Then what I'm concerned about is that some of the municipalities might try to do an end run around the government by using these people under the $30,000 factor for a lot of overtime and that way do an end run around the agreements. In my community in Markham, of the 600 staff, some 500 of them are making over the $30,000 a year, that level, so there are going to be 100 of them at $30,000 or under. They could be doing double duty over the next period of time, when a number of others will be required to take time off.

My ninth point is the catch-up when this three-year period is over. I've mentioned already that after the wage and price controls of Pierre Elliott Trudeau, there was a catch-up time which was extremely costly to all of Canada.

My tenth point, which I've mentioned as well, is that this legislation may be unconstitutional. If it is unconstitutional, what a waste of time for all of us. But that is something that we're used to doing around here.

I'd like to, if I could, comment on some of the presentation I heard from the Liberals over the last period of time. The Liberals are really very quick to pass judgement on everyone else, but don't accept the fact that they are coauthors of the problem that we have today. Don't underestimate the legacy of problems created by David Peterson and his government on the Bob Rae government.

People are very quick to forget the very wonderful days of the 1980s, when things were prospering and business was booming. It was a great time, because there was money to spare and everything; it was tax and spend. Those were the days when Bob Nixon was able to come in with the largest budget, up until the one that we've just had, the largest tax increases of any government in the history of the province of Ontario. Yet the Liberals refuse to accept the responsibility that they should for the record that they left and for the policies they created that are in part creating the legacy of the problems that the New Democrats are fighting today.

There isn't any doubt that the business community and the public at large were frustrated with the business and fiscal approach that the Liberals perpetrated on Canada during that period of time. From what I've seen over this last period, and having been there watching the new Liberal leader at her different press conferences, the Liberals are opposed to the three parts of the government program. They're opposed to the expenditure control program, and they've got, I think, some legitimate concerns about the expenditure control, but they're opposed to the expenditure cutbacks. There's $2.4 billion they're opposed to.

They're opposed, and they're voting, have come out on record that they are opposed to the social contract. The Liberal leader said yesterday: "The chaos surrounding the failed social contract negotiation is the result of Bob Rae's gross mismanagement, and this is a crisis of his making. Bob Rae has failed to recognize the seriousness of the financial situation."

I say that the Liberal leader has failed to also accept her responsibility as a member of the Peterson cabinet that raised so many of those taxes and created so many of the problems that we're into today, and I want to spend some time on that, because what they're so good at is criticizing all the issues. They're criticizing the expenditure control plan, they're criticizing the social contract, they're criticizing the tax, all three efforts that the government's proceeding with, yet they haven't offered a foolish anything at all as another option; nothing. They say, "Open the contracts, do a little talking, a little thinking," but the Liberals are sucking and blowing at the same time when it comes to everything they're talking about. They have lost the sense of history as to what they have done to this province. I want to remind you --

Interjections.

Mr Cousens: Hey, I woke up the Liberals. I woke them up. They're listening. Well, I don't care if you listen or not, the people out there in the province of Ontario are the ones --

Mr Steven Offer (Mississauga North): How are you voting?

Mr Cousens: I'm voting for it, on second reading. Mr Steven W. Mahoney (Mississauga West): And if they don't accept your amendments --

Mr Cousens: If my amendments and our amendments aren't received in the spirit in which they're offered --

Mr Mahoney: You're starting to sound like a Liberal yourself.

Mr Cousens: Well, at least I'm saying something and I'm putting it on the ground. I've got a stake in the ground. I'm prepared to fight for something. I think the people of Ontario are sick of the kinds of politics you guys have, because it's as if you can oppose everything and win everyone's vote. You've got to stand up for something. If you think you can be all things to all people, walk up and down both sides of the same street at the same time, people are sick of it. They don't want that kind of politics, and in fact, as painful as it is for me to support Bob Rae on anything -- you don't know how much it hurts to want to help him right now -- I'm prepared to come along and do what I believe is right, and so is our leader and so is our caucus, if it's right for Ontario. If we're in a crisis, as we believe we are, then we'd better --

Mr Anthony Perruzza (Downsview): Are you going to support this?

Mr Cousens: I just said I am.

Interjections.

The Acting Speaker: Order, please. Interjections are out of order. Members will have the opportunity of participating. The member for Markham has the floor.

Mr Cousens: It's hard to control these animals, I know. Having sat in the chair for three years myself, I know how difficult it is. It doesn't stop me from making the point that the kind of politics that this province is going through isn't the kind of politics that we should have.

What happens is that the leader of the Liberal Party stands up and says, "We are going to do this," and then the whole group of them vote as one. With the New Democrats, you've got them starting to think for a change and you've got three or four or five or six breaking ranks, but the Liberals, how can you come into the House and say, "We're going to oppose everything"?

You're opposed to the budget, you're opposed to the expenditure cutbacks and you're opposed to the social contract. In other words, you don't have any options at all except oppose, and that's just a way of trying to win people's votes without saying what you stand for, because you can always side with people saying, "I disagree with this, I disagree with that," and then not come forward and do something about it.

1820

It's one thing to have all your sacred cows, but sometimes you have to give up some to save the herd, and that's the problem with you guys. They are trying to have all things sacred, and there are times when you have to come along and do a very difficult balancing act to find a way of dealing with the bigger issue. As painful as it is, you have to come along and say: "What is the other option? What happens if Ontario continues in the plight that it is now? Can we afford to have such a high cost of bureaucracy and civil service? Is there any way in which we, as legislators, can find a way out of this problem? Are we able to contribute some amendments and solutions?"

That is the position of our caucus. As difficult as it is to support Bob Rae, we are prepared to stand up here and say that the intention of the social contract is in the right way. You've got problems with it, Bobby boy, but we're prepared to help you find a way out of it so that you can get more balance to it. I wish it had program review; I wish it had many things, but you can't just come along and constantly criticize without providing some kind of other alternative or option.

That's what the Liberals have done and consistently done. They have consistently just tried to tear everything down. I think there are times in government where this party system, as I see it now, isn't working. If we see something that's right for the House -- the member for Mississauga West brought in a motion about young people buying lottery tickets. That was a time when the House came together and said, "We all agree," and the government put it through.

We've got to have more consensus on more issues so that the reasoned arguments that come forward are not just going to be decided by one or two people in caucus but by all of us in this House. Maybe the US system does have something to offer, because in Congress and in the Senate people can break party ranks more often and the government doesn't necessarily fall. This government won't fall if this bill isn't passed. The government will carry on. It is not a confidence vote on the government. It is not a confidence --

Mr Offer: Yes, it is.

Mr Cousens: You're wrong on that, Steven. It is not a confidence vote, by our understanding. If Mr Rae makes it a confidence vote, then it does become a confidence vote, but to my understanding it is not.

The Liberals have come along -- and they forget that when they ran in the last election they were promising such a -- I think it was going to be more than a balanced budget that year. The Liberals were talking about a $23-million surplus in the summer of 1991. Then when the new government took over, much to the surprise of David Peterson and his company, they found that there was a $3-billion deficit. What an arithmetic error that one was, yet that is in fact the way in which the Liberals had their mathematics. It's a convenient form of mathematics that allows them to do what they want, when they want, how they want for votes. That's really where, when you start looking at them and you look at some of the things that John Bulloch has said from the Canadian Federation of Independent Business people, the Peterson government was the most anti-business government he'd every dealt with.

I have to say, when you start looking at it, the people in Ontario don't have long memories for the things of the past, but I think we need to look at something of the Liberal record, and I want to just put into the record a few of those golden quotes that have to do with what the Liberals said and did and the effect that it had on the public back a few years ago.

This all ties in to the fact that the problems that Mr Rae has today are not totally of his own making. As I've said earlier in this presentation, he has himself to blame for tremendous parts of the increase in costs of government. He hasn't stopped spending with the social agenda. But let's just look at a couple of quotes that go back to 1988, as it pertains to Treasurer Bob Nixon.

This is Lorrie Goldstein on April 21, from the Toronto Sun, when he says: "Bob Nixon yesterday ploughed taxpayers into the ground and then stuck it to them with a gilt-edged pitchfork...But this budget also employs the oldest political trick in the book. It sticks it to the taxpayer in the first year of a majority government in the belief that the public has a short memory. A year ago, when the Liberals had only 51 seats and a minority government, Nixon said in his pre-election budget that 'fiscal responsibility' meant no new taxes." Yes, before he was elected, remember when he was just in that marginal state, the election was coming up, he said, "No new taxes." I remember it well.

Then he goes on in this article back then, "Yesterday, with the economy still strong and the social needs precisely the same, Nixon argued 'fiscal responsibility' demanded the biggest tax grab in Ontario history," and that's what happened.

When the Liberals took power, they brought in 33 taxes during their five years in government -- 33 taxes -- and we then moved out of the competition scale where we were ahead of Japan, Germany and other countries, where we were one of the lead provinces in Canada. But under the Liberal regime, under David Peterson and the present Liberal leader, our costs went up and up.

The Hamilton Spectator, talking on the same budget in 1988, said: "So much for David Peterson's honeymoon with Ontario voters. His high-spending Liberals said nothing about higher taxes en route to an all-too-easy majority election win last September. But the political joyride lost a lot of steam yesterday as the government made everybody pay now that it's firmly in power...The tax increases announced yesterday, and the prospect of even more if spending continues as it has, are as strong an incentive for constructive change as anything." So as soon as he came in, the Spectator was quick to say, "Hey, they're at it with us."

The Ontario Chamber of Commerce had something to say about the Liberals. The Liberals, you see can't suck and blow. They can't fool us. The people aren't so stupid. During their tenure they raised taxes. They did it their own way and now they come along in opposition, they're mean-minded, mean-spirited, with nothing to offer except a whole1992 bunch of garbage words, weasel words that mean nothing. So when you come along and look at the chamber of commerce in their pre-budget submission back in 1990, they said, "The Ontario government, through its" --

Interjections.

Mr Cousens: Can you control them a bit, Mr Speaker? I know they're going to be upset to have this stuff put in the record.

The Acting Speaker: I want to remind all members that the member for Markham has the floor and all members will have an opportunity to participate in questions and/or comments. If indeed they wish to participate in the debate, all they have to do is be recognized by the Chair. The member for Markham.

Hon Bob Mackenzie (Minister of Labour): Let them suffer in silence.

Mr Cousens: I haven't heard the Minister of Labour ever say anything I agreed with till now, and his comment was valid. He said, "Let them suffer in silence," and that would be a delight.

The Ontario Chamber of Commerce, in a pre-budget submission in 1990 -- and this had to do with David Peterson again, Bob Nixon and company said: "The Ontario government, through its actions and activities, has been a major part of the inflationary pressures that have led to the current economic slowdown. Having created the problem, this government must be part of the solution."

That's a statement of fact, because during that period of time when the government was raising the cost of doing business and losing sense, as much as Monte Kwinter would try as the Minister of Industry, Trade and Technology to get some kind of support and services for the private sector, he couldn't because he wasn't as powerful as Bob Nixon and the others in that caucus.

The Toronto Star, when it was commenting on Premier Peterson -- I want to just give you this quote because it tells you something else about the Liberals -- said, "When Premier David Peterson was campaigning for re-election in 1987, he told Ontario motorists: 'We have"' -- and this is a Liberal. Remember how he said this? So many of the New Democrats weren't around when this was said. David Peterson said: "'We have a very specific plan to lower insurance costs.'

"At the same time" -- and I'm quoting from the Toronto Star -- "he dismissed the opposition New Democrats' promise of rate reductions through a public insurance plan as 'wishes and theories.'

"Peterson's plan turned out to be the Ontario Automobile Insurance Board, which has the power to set premiums. But through this board, it seems that Peterson has cornered the market on 'wishes and theories' in an attempt to soothe public fears about rate increases....Peterson's plan for lower insurance rates looks more like a sham, as Conservative leader Andy Brandt says."

1830

That was another one of those classic examples where the Liberals said they had a plan, a plan for lower insurance rates, but we found out the plan actually gave us higher insurance rates. No wonder the Liberals are embarrassed by their own automobile insurance plan. They offer a plan, they promise a plan and the rates go up. That's what Liberal mathematics is all about.

I want to quote from the St Catharines Standard; it's nice to move around the province as other people were also reflecting about the Liberal legacy of the 1980s. "Through his budget Nixon is forcing taxpayers to cut their own expenditures while at the same time the government shows not the slightest willingness to control its own spending habits."

There wasn't a single moment during Peterson's reign when they cut back on spending. What examples there were: the trips to Italy, to Europe, to the Far East. There was more travelling going on, as they made up for lost time, to see the world at the expense of the taxpayers. There was an uncontrolled spending spree in the province during the 1980s. Times were good, but the life was being taxed out of us by the Liberals at that time. We cut back on our costs while the Liberals just allowed this whole, big government to expand and grow and become something even larger than it should have been.

I'm going to the Financial Times for a quote in 1989, commenting on Mr Nixon, the Treasurer at that time.

"When Treasurer Bob Nixon tabled his recent budget, business groups denounced the Peterson government in terms normally reserved for the socialistic hordes of the New Democratic Party. John Bulloch, president of the Canadian Federation of Independent Business, blasted the Peterson regime as the most anti-business government he has dealt with in 20 years.

"...Peterson may dismiss business discontent over any of these issues as unwarranted....But the cumulative impression is that of an anti-business agenda."

The seeds of the destruction that are now part and parcel of the legacy of the New Democrats were planted by the Liberals, who are really socialists in another colour. What they began was this whole undermining of the confidence in the economy and in business. In fact, that was the beginning of business saying, "Do I really want to establish my business in Ontario or should I be moving elsewhere?"

Looking at government waste, there are classic examples that go back to 1990 when the Liberals were in power. I want to quote from the Sarnia Observer, again moving across the province:

"The way in which the money," the more than $300,000 spent by Peterson and members of his cabinet on a week-long European junket, "was spent does indicate a problem of attitude in which it appears there is very little concern about how long and hard we have to work to pay for the lavish comings and goings of our elected élite."

Remember that one, 300 grand spent in 1990 by David Peterson and his cabinet as they trooped through Europe, government waste at its best? That's one of the reasons you don't hear them commenting on government waste right now.

Our caucus is very much on the record that it's opposed, during this time of restraint, to travel outside the province of Ontario. We will do our best to control that kind of spending. Certainly Mr Peterson's government and those who travelled with him thought they were having a fun time -- and they did -- at our expense.

I quoted earlier from Robert Sheppard of the Globe and Mail, but, again talking about government waste, on March 28, 1990, he said:

"In Ontario, Premier David Peterson probably holds the Canadian record for advisory bodies: In the first two years of office, heading a minority government, he appointed no fewer than 51 task forces on one subject or another. He has since set up two high-profile Premier's advisory councils for technology and health care. Intellectually active, these councils generated substantial fees to various consultants, but little in the way of new legislation or even government policy."

Can you believe it? This place continues to have task forces; we've got one now on education. They're going all the time, and they bring in outsiders. Why not use the Legislature? Why not use elected members? Why not use the people we have in our caucus? My compatriots, the member from Oakville and others, are willing to serve on committees and come forward as all-party groups with recommendations and get on with it. We're elected to serve, we're elected to think, we're elected to lead, yet David Peterson -- talk about waste -- was really one of the arch perpetrators of waste himself.

Interjections.

Mr Cousens: It's a feeding frenzy for you, guys; I just want you to know.

I want to give another quote. The Hamilton Spectator, in May 1989, said:

"The taxes, however, need not have been so high. The government could have done more to cut its soaring administration costs. The rent review system, for example, now costs as much as $40 million annually to administer, and up to 9,000 civil servants have been hired in the last three years.

"The merry-go-round won't begin to slow down until people who favour better spending control -- and their numbers will almost certainly rise after this year's tax trauma...."

The fact is, I remember that back in 1985, the cost of rent control was about $8 million. It's well over $50 million now, a lot of it in adminis-trivia that this government sponsors.

Look at this:

"Mr Nixon obviously reckoned that Ontario taxpayers would be impressed by headlines talking about a balanced budget. Lost in the fine print will be the two major reasons why the budget fell into the black: an economic boom that continuously produced revenues far in excess of provincial estimates, and big tax increases in post-election Ontario budgets."

How true that was. It was boom times in the 1980s -- how much we wish it was now -- yet the government just bled us like mad.

The Hamilton Spectator in 1988 -- this is a little out of sequence -- talks about Ontario taxpayers paying so much more.

I go on. Back in 1990, a quote here on the Grit budgets, how many times the Liberals picked our pockets. "These guys want to grab another majority from us before the economy turns sour for everyone." That's what happened. They thought they'd be opportunists back then, called the election, and to their surprise, fell out of office.

I wanted to put that on for a little bit of fun. I know they don't like it, but the fact is, the Liberals haven't really come to grips with the legacy they created for the new government in Ontario. They created so much of the problem through their spending, through their taxes, through their lack of controls even then, and now all they can do is criticize everything. If they only came forward with some suggestions, some ways to improve the scene, then they would bear some listening to or some respect, but the Liberals think there are more votes to be gained by just damning and condemning and criticizing, and not for a moment coming forward with constructive suggestions.

That in itself is cause for concern by the people in Ontario. The Liberals really are bankrupt of ideas, bankrupt of suggestions. Their only way of dealing with things is to just roar and shout and complain. They don't accept any of the justice of their being in opposition, having been in power, because Ontario saw through them.

There's one final point I want to touch on. I am going to be short of time -- I don't think there's much chance the Legislature will extend my time, because I would like to say more -- but some of these points we will be able to raise.

1840

The Canadian Federation of Independent Business has done a number of studies on the differential between salaries in the public sector and the private sector, and I have a few quotes here which I would like to put into the record. What they've done is a survey in a number of cities across Canada to study the wage gaps between people who serve in the public sector and the private sector. The comparisons that were made were on a strictly apples-to-apples basis, using only full-time public and private sector employees with the same occupations working within each city or region.

"It has become clear that the systems and procedures that determine public sector pay and benefit levels, while very beneficial to employees, leave taxpayers and other employers with very little say, even though they ultimately pay the bills."

What's happened is that the federal and provincial -- and I don't want to get into the federal, because that's not my problem. But the wage differential at the provincial level versus the private sector, in Toronto, public sector employees get 11.2% more than private sector; in North Bay, public sector employees get 15.6% more than the private sector, and in Thunder Bay, 17% more.

So the data really say that in the province of Ontario we have to look at the whole public sector and see if we can find some money within that sector to somehow even the playing field between the public and private sectors, find some money within that. If it's through pay freeze and salary freeze, let's try to do it that way. We at least are beginning that process with this debate.

The Speaker (Hon David Warner): I thank the honourable member for Markham for his presentation and invite any questions and/or comments.

Seeing none, is there further debate? I recognize the honourable member for Scarborough West.

Hon Anne Swarbrick (Minister of Culture, Tourism and Recreation): I come out of a long and proud history within the union movement in the province of Ontario. I also come out of a very long and proud history as a public sector worker for the federal government. It's the fact that this government is comprised of members who come from those kinds of histories and the kind of history in community action groups that in fact what we're presenting before this Legislature is a mechanism that we believe shows very much how we both value and respect the role that unions have played in our society and the important role that unions still continue to play in our society, both in protecting the interests of working people as well as in working for the social justice that all of us wish to benefit from in this province.

I believe that this legislation and the mechanisms that we've been following also are geared to try very much to show the respect that this government holds for the public employees who work for us. I know certainly as a minister of this government the kind of respect I have, and that's shared by my colleagues, for the tremendous, hard work that the competent people who provide the services to people all throughout this province are proud to work to provide. It's that kind of tradition in fact that has empowered this government to work so ambitiously on so many things, not only in terms of various kinds of social justice legislation but also in terms of endless numbers of job creation and job protection programs.

One of the things that we believe is necessary if this government is going to be able to achieve the protection of jobs and services is that we in fact work to protect the value of working people's taxpaying dollars as well. We believe that one of the mechanisms needed to be able to do that is to help us to prevent the interest on the public debt from becoming the most expensive program that this provincial government provides, because if it does, we believe that most expensive program of servicing the interest on the public debt in fact would simply be a program of income redistribution from working people who are the taxpayers of this province to the wealthy people who hold the bonds where we have to borrow the money from.

Passing that money up in redistribution to the people who hold the bonds this province has to borrow is simply a mechanism for sending money out of this economy. When we talk of the concern of taking money out of this economy, that's exactly what that does, and also sends the money out of Canada, since there is just not enough money to be borrowed within this country, within this province, to service the debt at the level to which it's growing.

The approach we're taking to try to save the taxpaying dollar is one that is also geared very much to trying to protect jobs and protect public services that all of us receive at the high quality that they are provided by the public service of Ontario.

There are many reasons why we're acting the way we are. Those reasons are based on respect, those reasons are based on common sense and economic sense, to try to ensure that we avoid the slashing of jobs, to try to ensure that we avoid simply legislating the rollbacks that we know the other parties in this House would do if they were in office during this difficult fiscal period.

It's for that reason that we have worked very hard as a government to try to negotiate with our public sector unions the programs in a revolutionary kind of way that would in fact protect those services, protect those jobs, while introducing revolutionary new kinds of programs in negotiation with the public sector unions. We attempted to do that at one master table. I believe that a main reason for not being able to do that was a number of structural problems that existed that prevented us from doing that at a master table.

It's for that reason we've developed legislation that is not simply slashing legislation, it's not simply rolling-back legislation. In fact it's legislation that attempts to establish a framework to allow those negotiations to continue on a sectoral and local basis, hoping that without those structural problems we can sit down with our partners the unions, our partners the people who work with us, the public sector employees, to try to come to agreements in a negotiated fashion.

Coming from the union movement as I do, I know very well that the kinds of things we've been trying to negotiate in these negotiations are in fact the kinds of things that, where unions in our society have been able to negotiate them, they have only been able to negotiate them after strikes of many months, up to 18 months, when they've done so. I think, for instance, of the Canadian Auto Workers, who have proudly gone out and fought for their workers through lengthy strikes to get what they call SUB plans, or supplementary unemployment benefits, to protect members who are laid off.

In this case, our government has been interested in attempting, and is still interested in attempting, to negotiate job security funds, effectively those SUB plans, that would allow workers to have up to one year of full pay should they end up being laid off. In fact, we're working very hard to minimize any kind of layoffs, but should people be laid off, they would be guaranteed to have up to one year's full pay while being able to take advantage of tremendous job retraining programs that we're negotiating to develop, while also receiving the benefits of redeployment programs that again we believe would become a tremendous model for other employers in this society.

We're also interested, through establishing this framework, to try to encourage the negotiation of the joint trusteeship of pension plans, again something I know I fought for in the union movement and I know unions in fact have every good reason to want to try to achieve.

We're also trying very much to encourage the kind of joint partnerships that would allow, for instance, joint union-management teams to try to identify further waste that can be eliminated beyond what this government has already been able, with our public sector employees, to do. The concept behind those joint committees would be that any kind of further waste that can be identified and eliminated, the value of that would be put 50% towards further reducing the target we're trying to find through the social contract negotiations, that target of $2 billion, and 50% towards further enhancing the retraining programs we want to negotiate with the unions.

These are the kinds of things this legislation is trying to provide, the framework to help empower people, the partners at the negotiating table, on a sectoral and local basis to be able to negotiate. We have designed into this legislation both carrots and sticks on both sides, not just on unions but also on the employers, to try to help facilitate a negotiated process.

The carrots include that if employers participate in negotiating reasonable settlements that are acceptable to the unions, they would be able to deal with a lower target as being the target in those negotiations for savings. Where unions succeed in negotiating those contracts with their employers, they would be able to access further job security funds to help make sure in fact that we can move from a six months' rate of full pay to that one year rate of full pay I spoke of, while they're able to access redeployment programs, while they're able to access retraining programs that we're negotiating together.

1850

In terms of the fail-safe provisions of this legislation referred to, I want to make it very clear that this government worked very hard to ensure that fail-safe does not provide just a stick to encourage the unions to negotiate settlements, but also a stick to encourage the employers to want to negotiate a settlement as well, namely, the fact that if there aren't jointly negotiated, agreed settlements arrived at by August 1, the employers would be bound to a sectoral redeployment program that they may not wish, either, to have imposed upon them rather than negotiating it.

I should also make it clear that, again in support of trying to help even the playing field between unions and employers, we are intent on developing regulations empowered under this legislation to ensure that employers must be open and must disclose information to the union partners at the negotiating tables, to try to ensure that unions have the benefit of the full information needed that employers have at their disposal, to arrive at fair negotiated settlements throughout this process before August 1.

Consistent with this government's policy of constantly working to protect the vulnerable in our society, we have made it clear that we're exempting employees who earn less than $30,000 per year from the provisions of the social contract negotiations in terms of having to face losing any benefits, freezes, layoffs etc.

I should point out that even in the one area of the possible imposition, if negotiated agreements aren't arrived at, of the possibility of employees having to face up to 12 days per year without pay or layoffs for that period of time, the point there is very clearly to allow that to happen only to prevent permanent layoffs, an effort that we're making to try to ensure that we protect the jobs of public sector workers and the services that the people of Ontario badly need and expect to have continued.

In closing, I'd like to point out once again that in the kind of things this government is interested in negotiating, the kinds of things this government is encouraging to be established to be the role models in our society for other employers to look to, where they're facing the kind of fiscal crunch that we have been facing, we're attempting to ensure that those things are arrived at as models for negotiating without strikes, in spite of the fact that those unions that so far in our society have managed to achieve those kinds of precedent-setting collective agreement provisions have only been able to do them through strikes.

I want to say that I am so hopeful, tremendously hopeful, that this framework that we're offering through this legislation in this House, this framework of legislation that we're designing and putting before this House, will be one that truly is able to help encourage employers facilitate unions to arrive at effective collective agreements and the protection of their members' jobs and of all of our services.

Mr Gary Carr (Oakville South): I have a couple of questions for the member that she may answer. In her speech, she talked about how they wanted to protect jobs in the public sector, and if you will remember, going back to your first budget, that's exactly what we said when you were trying to spend your way out of the recession -- we said the only way to protect the jobs was to reduce spending then, and that the longer we waited, the more the cuts had to come.

At that time, we were criticized for saying that you need to cut back spending. That's the same rationale that we used in this Legislature when we were fighting the first budget and we were told, "No, we're fighting the recession, not the deficit."

It wasn't even as if it was something new. We all knew that the federal government was facing the same problem. So it wasn't as if it was a new problem. They were already bankrupt and in a position of having to cut. I say to my friend the member opposite that it the same rationale we used on the first budget, saying you have to protect jobs and it has to be done now by not giving big increases. That is exactly why we said that going back to the first budget.

The other thing that we talk about is the 95% of your salary for one year. It's interesting that one of the big concerns of this government wasn't how to protect the jobs; it was, "When we know we're going to have people laid off, how are we going to give them enough money so that they can live?" I honestly, truly, really think that most of the people out there are more concerned about keeping their jobs, not in negotiating a 95% pay situation if they lose their jobs. I know she mentioned the auto workers, but I really think that the major thrust should have been keeping jobs.

Also, finally, if I have a little bit of time, you talked about retraining. The problem is, as we've said all along, and we agree in downscaling the public sector, that you have to be upscaling the private sector and retraining so they can come into the private sector where the jobs are being created, and that isn't happening.

I would ask a couple of those questions to the member, and I appreciate the fact that she's tried to enlighten the House. I look forward to adding some more comments when I speak.

Mrs Barbara Sullivan (Halton Centre): I want to say that I was surprised at the content of much of the remarks of the member for Scarborough West, whom we know has had a distinguished career in a leadership position in the union movement, and I believe her when she says that she has enormous respect for people who work in the public service.

I think I want to echo, in commenting on her remarks, a response that was made to me by one of her colleagues when I said, "What would the response of the New Democratic members have been had this been Liberal legislation?" and the answer was, "There would be blood on the floor."

The kinds of issues that the member for Scarborough West has included in her remarks are a justification of ill-conceived and unworkable legislation that really belie her history in the union movement and the leadership position that she held. I feel cheated that the member did not raise some of the issues that are on the table now with those who are bargaining for public sector workers themselves. We forget, when the argument is universally accepted that the public service is the big, evil sector here, that the public service includes people who care for people in our nursing homes, orderlies in our hospitals, people who take our garbage to the dump and others who are not simply paper shufflers in government bureaucracy.

I would have liked to have heard more from the member from Scarborough West about who is in fact standing up in this place for those who do the work of government and who deliver public services.

Mr Randy R. Hope (Chatham-Kent): First of all, I'd like to thank the member from Scarborough for her comments because she does reflect -- I remember that many times we were out in front of this Legislature for the simple fact. They question why we were out in front of this Legislature. Because the Liberals wouldn't open the doors and allow us inside. They made major, drastic changes without even consulting with the labour movement, and those ideas we had they thought were very draconian.

But I must say that the ones that we did --

Mr Offer: Which ones? Name one.

Mr Hope: "Name one," he says: Bill 162; Bill 208; let's deal with the tire tax; let's keep adding them up.

Interjections.

Mr Hope: Keep adding them up, because the Liberals are sitting there asking where would we be? First of all, if the Liberals were in government, even if the Tories were in government, there would have been no consultation. It would have been exactly nail the coffin shut to every worker. They would have never dreamed about a supplementary benefit program. They would have never dreamed about a training program. We couldn't even get them to put money in for proper training programs. They had their own ideas and they kept with their own ideas.

I think what is very important is that we had all sectors at the table, which would never have been accomplished through the Liberal government, because I know many a time we have sat out in front of this Legislature, put ideas put forward and not even been listened to on many of those ideas.

There is no comparator between what we are doing today and what the Liberals did and the Tories did in the past, because what we're trying to do is that we're trying to work with our partners. I know they have a hard time understanding what partners are all about because there was only one partner in the past, and that was dealing with a lot of the corporate people who had their own agenda, and they had to watch them, the Liberals and Tories, because they had to watch out for their financial contributions at election time.

I think it's important that what we were trying to do was to bring all sectors together, employers and employees and government, which is a major accomplishment that has never been accomplished before. I've seen it time and time again that workers were trying to get access to the doors of this place and were never, ever, able to get that.

The Speaker: I recognize the member for Scarborough West for up to two minutes for her reply.

1900

Hon Ms Swarbrick: First, to the member for Oakville South, I'd like to point out that when I sat on the legislative finance committee this last winter, banks, traditional financial institutions, appeared before us and many of them said that the whole reason that this recession has gone on as long as it did, which even they had no idea it would, was because not only of the fact that it was your normal, cyclical recession; it's gone on as long as it did because of the policies that the member from Oakville South's federal party has implemented: the policies of free trade, the goods and services tax, the high dollar, the high interest rates, the cuts of $5 billion a year to the Ontario budget; those are the kinds of reasons why this government is being forced to be in the situation it's in today.

In terms of the member for Halton Centre's comments, I point out that if the Liberals were in government today they'd be making no effort to go through all the negotiations we're trying to go through with the public sector unions. They'd be making no effort to offer things like joint trusteeship of pension plans, the job security funds, the joint waste management committees; there'd be none of that kind of respect of the unions representing public sector employees.

When she refers to the concerns for the care givers in long-term care, this government is putting 685 million new dollars into long-term care to make sure that those people are there to help provide those services to people in need. This government is the one that's working to take care of people at the lower-income levels through pay equity, through employment equity, through labour relations reform, including CECBA reform. There's no end to the other things we're doing to try to protect workers at those levels.

I want to close by pointing out that the Liberals were in power in the record-breaking, revenue-increasing times in this province in this century. In the mid-1980s, in spite of the fact that they had the beauty of taking in incredible reams of increasing revenues -- they increased taxes so many times. If they had only -- and I often think it's criminal -- saved in good times for the bad times, we wouldn't be in this situation today.

The Speaker: The member's time has expired. The honourable member for Mississauga North.

Mr Offer: I'm very pleased to take part in this debate. I'd rather that the bill, as drafted, were not before the Legislature, because I think it's a bad piece of legislation and for that I am opposed to the legislation. In the time permitted in this debate, I hope to go through some of the reasons why I stand opposed to the legislation.

Before I get into that, you can't help but respond to some of the comments that are made in the Legislature. There was a comment made dealing with the hearings on Bill 162, which was changes to the Workers' Compensation Act, and on Bill 208, occupational health and safety. I think the record will show that there were extensive public hearings undertaken, sponsored and supported by the then Liberal government; that it was and has always been the position of the Liberal government, when proposing legislation, recognizing that there will be those who are opposed to it, that they do have a right to be heard, either through their representative in this chamber or, indeed, through public hearings. In fact, I think the record will show that there were extensive public hearings which travelled throughout the province. I'll not say anything further on that point, but to just set the record straight.

I would dare say, Mr Speaker, if you would check your records, that the present NDP government has invoked time allocation -- also known, for want of a better word, as closure -- on legislation and pieces of legislation in this chamber more than any other government in the history of the province. I think it will show that the NDP government has, time and time again, closed off debate on important pieces of legislation, has stopped duly elected members of all three parties from speaking their thoughts, their opinions, their minds, and taking to this floor the comments and concerns of their constituents, and have been stopped by the government, number one, through its rule changes, which have, in my opinion, institutionalized time allocation, and secondly, through the unending use of that rule. I believe that is something that this present government will never, ever be able to defend, because it strikes at the very heart of why we are here.

We are here to speak on pieces of legislation; we are here to bring the concerns of our constituents to this Legislature; we are here to make certain that, where public policy dictates, we move pieces of legislation to the committee hearing process for public hearing and for those committees to travel throughout the province. I believe in and am proud of the record of the previous Liberal government in doing that with a number of pieces of legislation.

I am extremely dissatisfied with and critical of the current NDP government, which has closed this chamber like no other government before. I say that just at the outset, and I recognize that it doesn't speak to the legislation at hand, but I was quite upset with the comments made by some of the NDP members, thinking that people do not have memories, thinking that there aren't recorded transcripts of the goings-on of this Legislature and thinking that they can put over on the public something which just isn't borne out in fact. I will every time, being given the opportunity, remind those who are watching of that fact, because they are not just my constituents but indeed they are all of our constituents, and that is our responsibility and obligation.

As I said, I am opposed to Bill 48. I am opposed because, though I support restraint, I do support it in a responsible fashion, and Bill 48 is characterized by chaos, incompetence and mismanagement. In the time permitted, I hope to underscore a few of those areas.

The government feels and states that they are in some sort of a fiscal morass that is not unique to this government but indeed to all governments, and I will disagree. I think that if we take a look back to the first NDP budget of 1990, we will see the germ, the seed of Bill 48, because it was in their first budget that they made the errors that Bill 48 is responsive to.

There was no other jurisdiction -- and I do not speak of party affiliation; I speak federally and provincially across this country -- that sought in 1990 in its budget to try to buy its way out. By that point in time, governments across this country recognized that we were not just in a cyclical recession; we were in something much deeper. Whatever you wish to call it, a restructuring, a reorganization, it was something other than the normal, cyclical recession, and all governments save the NDP government in Ontario recognized that, recognized that you could not spend your way out.

This government did not. They threw caution to the wind. I believe they did not listen to the advice of, most likely, many treasury officials, who would have recognized this, and they said, "We are going to spend, spend, spend." Bill 48 is reactive to that. Bill 48 is as if it were an eraser and it is trying to rub out the 1990 NDP budget, and it's going to try to do that on the backs of people throughout this province, people who should not have to deal with the ramifications of what this bill is going to do.

1910

Just before I get into some of the aspects, I am aware that just one year ago, almost to the day, we were talking about another piece of legislation, Bill 40. Do we not always recall that, changes to the Ontario Labour Relations Act? I think we have to put this debate into that context.

July 6, 1992, almost a year ago, it was stated by the Minister of Labour in his opening comments on Bill 40: "The need for labour and management to work together in the spirit of cooperation, involvement and trust is greater now than at any time in Ontario's history." This flies in the face of the principle of Bill 48. Bill 48 does not create cooperation. It does not engender trust.

The minister went on and said, "These amendments" -- and he speaks in these terms to the amendments on Bill 40 -- "are designed to promote real exchange between labour and management on any and all workplace issues." The principle underlying Bill 48 seeks to stop exchange between labour and management on workplace issues. The minister went on to say that these measures will "promote the smooth operation of the collective bargaining process and...offer protection for the jobs of workers involved in labour disputes." Bill 48 does not promote the smooth operation of the collective bargaining process. Bill 48 strips away the collective bargaining process.

These are just some of the quotes in Hansard from the Minister of Labour one year ago, talking about the need for cooperation, the need to protect workers' rights, the need to smooth the collective bargaining process.

A year later, in Bill 48, we have what is called a fail-safe provision. What is a fail-safe provision? A fail-safe provision under Bill 48 is that if no local agreement is reached, the fail-safe provisions are triggered, and these measures are that compensation of employees is frozen from June 14, 1993, to March 31, 1996; that during the three-year period, merit increases, cost-of-living or other advancement on pay scales and other compensation increases are also frozen at the 1993 level. If these above measures will not allow the employer to meet its reduction target, the employer may require employees to take unpaid leaves of absence of up to 12 days per year.

I speak not to the substance of those provisions but to the principle of a fail-safe provision, because it isn't a fail-safe, it is a guillotine. The NDP government is telling the workers in this province to put their collective heads under the guillotine. They will be sharpening the blades until August 1, saying: "I think you can arrive at an agreement. I think that we can smooth out the collective bargaining process. We don't want to pull the trigger, but Bill 48 will allow us to." That, to me, in principle is something extremely objectionable in terms of the collective bargaining process that has been given to workers in this province.

It is not a fail-safe measure at all, it is a guillotine motion, and from the time we debate this bill until the time that guillotine is triggered is nothing less than the sharpening of the blade.

The workers in this province have every right to be concerned and worried. We and I support restraint, but I also support respect, respect for people, because there are real people out there who are worried about what this NDP government is going to do. Real people out there with real families are concerned about when they trigger that guillotine, and real people are concerned with how sharp that blade is, because they know that no matter how sharp the blade is, when it's triggered, it's going to cause damage.

I cannot believe that anyone in this Legislature can support a piece of legislation which so clearly flies in the face of the freedom to bargain freely, and in this respect, I underline, we support restraint, but so do the workers, so does the public sector. They have come forward with their solution, with their ideas. Is that not collective bargaining? Why is the government so adamant to turn its back on those groups?

Why is the government so committed not to listen to what people have to say about real solutions to the mess that the NDP government put this province in when it introduced the budget of 1990, which flew in the face of every other government of whatever political stripe in terms of a recession and restructuring?

The people in this province are going to be suffering for that incompetence. The people in this province are going to be suffering from the chaos that has been created by the government. The people in this province, whether they be public sector workers or not, are going to suffer from the inconsistency of the government in terms of its principles. I guess when a government is inconsistent in its principles, it means that it has no principles. One can only conclude that when I read from Hansard the statements made by the Minister of Labour on July 6, 1992, and what I read is the substance of what Bill 48 calls for.

I am concerned about this bill because I do support restraint, and I do not believe that this bill is truly reflective of the need for restraint.

I turn to page 16 of the act, section 26, where it talks about special leave. I know that there are many who are watching this debate on TV, there are many people --

Hon Elmer Buchanan (Minister of Agriculture and Food): I hope not.

Mr Offer: The Minister of Agriculture and Food casts disparaging remarks, but the fact of the matter is that there are hundreds of thousands of people who are concerned with the actions you are going to support and your government is going to take. They are concerned in terms of themselves, they are concerned as to how it will affect their families, they are concerned in terms of the level of service that municipalities are going to be able to provide, and they want this debate to proceed fully so that those who are so interested have an opportunity to hear all members who wish to take part.

I speak to the special leave aspect. It says, and I want to be clear that I am just paraphrasing the sections, and I expect that I will be doing so accurately: "If employees perform critical functions and the employer is unable, without impairing those functions, to meet its expenditure reduction target by utilizing unpaid leaves of absence...the employer may require those employees to take special leaves."

The section goes on to say, "The compensating days off shall be paid days off, taken on mutually convenient dates," and this is the point: They "may be carried forward." These dates may be carried forward to future years, including years after March 31, 1996.

1920

It is clear from this legislation that those unpaid leaves are not lost; they are deferred. March 31, 1996, there is going to be a ball of debt rolling back to this Legislature. There is no question Bill 48 prescribes that; Bill 48 dictates that. It says that you are going to take this debt off your books for the next three years, but it is not going to vanish. It is just going to be outside the Legislature; it's just going to be outside and off the treasury books. But don't worry, it's there, and it is coming back.

The question we have to ask is: Is that how you support restraint, by deferring to another time and, I dare say, to another government? Is that how you deal with the real problems that your government has created? You are dealing with them on the backs of many people and families in this province, and you have not come to grips with the impact and the ramifications as to what this bill means to real people in this province.

In that area I want to talk about, in the short while that I have left, the impact that it's going to have on municipalities. Municipalities have already had their budgets set. I, as the member for Mississauga North, reside in the city of Mississauga. I have received my interim tax bill. I know that the city of Mississauga, under Mayor Hazel McCallion, has been involved in matters such as this for many, many years; that the city of Mississauga has made certain that its finances are well taken care of; that it is a pay-as-you-go type of municipality.

The people in the city of Mississauga are the beneficiaries of the mayor's vision, as well as members of council. They have cut their budget this year. They have sent out their tax bill. Let's remember, in passing, that the city of Mississauga reduced its portion of the taxes; that the city of Mississauga's tax portion for residents is lower this year than it was last year. That is a testament to the mayor and to the council and, of course, nothing to the provincial government. But they have done that. They have cut their expenditures to the bone. They, I believe, are representative of many municipalities around this province who also have taken a hard look; who have already cut their budget; who have in fact already instituted a freeze on pay; who have already told their workers that there will be unpaid leave. Now this bill says that, "Notwithstanding that which you have done, you have to do it again."

It's sort of like saying, "The car is out of gas, but we're expecting you to take a little bit more from the tank." I don't believe that the government, in terms of the way and the timing of this legislation, has recognized, firstly, that municipalities, far from following the provincial government in this area, have led the way and that they have already set their budgets, that they have already taken many measures to make certain that they can maintain the services to the people in their areas and do so in a fiscally responsible manner.

This bill, far from encompassing restraint, indeed causes confusion, because it is now throwing all of the municipalities, lower and upper tier, meaning the cities and the regions, into a state of chaos. They have been doing their work and the provincial government has not.

The provincial government still is not able to understand that you don't and can't get any gas from an empty tank. They still have not yet acknowledged that the budget which they introduced in this province in the year of 1990 is the cause of Bill 48. They are the ones to blame, and they are seeking to lay that blame on the backs of workers across this province and beyond. "Beyond": I mean not just the workers but to people who require services in their municipalities, in their hospitals, schools, colleges and universities. We will all suffer from your mismanagement.

As I read the bill, I am shocked by the amount of information that isn't here. I am shocked at the amount of information that is left to regulation. Many of those who are watching on their legislative channel will recognize that when things are left to regulation, they are not subject to discussion in this Legislature. They are not subject to public hearings. They are not subject to the scrutiny of the citizens of this province. They are at the whim of the minister. They are indeed laws that will be made by the stroke of a pen, and it does not matter how it will impact on real people in this province; this Legislature is shut out from indeed taking part in any of that debate. I think that is shocking. I think that it is something which this government has again not yet come to grips with and I believe it is something which this government must stand fully accountable for.

I speak about the collective bargaining approach and, in principle, how I am so firmly against this. I think there are members in this Legislature who are part and were part of the standing committee on resources development. The resources committee was charged with the responsibility of looking after changes to the Labour Relations Act, Bill 40, and I alluded to that earlier on. I think they will recognize many of the statements which they made. They will remember the statements which they made. They will also remember the statements made by members of the opposition. We were, and I was, in opposition to that bill and am still and I believe that that bill flew in the face of workers' rights in terms of being able to organize in a free and open and democratic manner, and always will have that position.

But notwithstanding that, there were members of that resources committee who heard day in and day out, no matter what their position was on the bill, the importance of the collective bargaining approach. They heard how that is something that must always be protected. Once you erode that, you can never, ever get it back. You just can't restore that type of relationship to the way it was, because Bill 48 will have always been introduced.

I am hopeful that there will be members in the Conservative Party and in the NDP who will take a look at the provisions of Bill 48 and remember some of the discussion around the importance of smooth collective bargaining, the importance of respecting the interests of management and labour and will come to say, "Bill 48 doesn't respect those principles,and on that basis it should be opposed." I am hopeful there will be members in this Legislature who will think about the people who are going to be affected by Bill 48, the men and women and their families, not just the public sector workers, but also including them, the people who rely on services in a variety of areas.

And yes, we have to take a look at how we can responsibly restrain spending, and it can be done. The sadness of all of this is that there have been options put on the table, ways in which these things can be addressed, ways in which they can be addressed in an upfront, responsible manner, responsive to the needs and the concerns of many people, responsive to the needs of the general public, and encompassing and respecting the principles of collective bargaining.

Bill 48 fails, fails and fails. For those members, especially those who took part in the debate on Bill 40, you must ask yourselves how is it that you could have made a speech on Bill 40, changes to the Labour Relations Act, and support Bill 48. You cannot do that.

Hon Mr Buchanan: Are you supporting Bill 40 now?

Mr Offer: The Minister of Agriculture and Food says, "Is this the Bill 40 debate?"

1930

Hon Mr Buchanan: Are you supporting Bill 40 now?

Mr Offer: Mr Minister, in a strange way it sort of is, because the principles in Bill 40 dealt with --

Hon Gilles Pouliot (Minister of Transportation): You are so confused, Steve. I think you are just lying.

Mr Offer: Sorry?

Hon Mr Pouliot: Mr Speaker, I think the member just lies there and says nothing that is relevant.

The Speaker: The Minister of Transportation knows better. Would he withdraw the unparliamentary remark, please.

Hon Mr Pouliot: Mr Speaker, with respect, I was provoked. All I did mention, sir, and I beg your understanding, but the member just lies there and says nothing relevant, sir. I did not impute motives. I did not hint that the member is economical with the truth or tends to shy away from it. It's an expression, Mr Speaker, not to impute motive in the least. I thank you, sir, for your consideration.

The Speaker: The honourable member.

Mr Offer: The honourable Minister of Transportation has a reputation of being, at the very best, vague, and his final comments just underscore that. If the minister had listened, I said that in the time period there have been significant proposals as to how restraint can be achieved, proposals brought forward by workers in this province. The problem is that the NDP government, and the Minister of Transportation are unwilling to listen. Rather, they would like to make the 1990 budgetary mistake that the government introduced on the backs of all people in this province. Bill 48 is in principle wrong. Bill 48 is in substance misleading. Bill 48, without question, hurts people in this province --

The Deputy Speaker (Mr Gilles E. Morin): Thank you. Your time has expired.

Mr Offer: -- and it is one which I am firmly opposed to.

Mr Carr: I am pleased to enter the debate and to add a few thoughts on this bill. I must say that, going back to the discussions on this topic, members of the government side might not believe this, but I honestly, truly think all members had hoped that the initial discussions would have been successful, although I guess I was a little bit suspect.

I had the opportunity to spend, I guess it was April 23, on Global TV with my friend from Scarborough-Agincourt and Mr Sid Ryan. I asked Sid at that time: "You know you're getting the cuts now. What would you rather have, cuts in pay or layoff of workers?" He told me at that time: "We're not going to make that decision. The government is, because we've got half the members who want cuts in salary and half who want layoffs. That is going to be a government decision."

While we wished you success in the initial talks, we're not too surprised with the results. The whole process after that quite frankly was a bit of a circus and a bit botched.

But I'm not going to talk too much about whose fault it is. I want to talk very briefly about why we need to do some things, because, let's face it, this isn't a problem that we're just facing here in the province of Ontario. The federal government is bankrupt. I look at the articles down in the United States. The headlines in one of the magazines say: "Why Are People Down on Clinton? The President Isn't Setting Priorities or Cutting Spending Enough," and "His Disapproval Rating Is Up At 71%." I think that was even a worse rating than you guys had across from the other side, this government when it came in. It isn't a problem that we're facing.

I want to quickly talk a little bit about why we're in the circumstances we are in, because I don't think you can talk about cutting spending unless you realize where we are at. For this, I will refer to the government's budget. I am, I guess, in a sense talking on their behalf for the need for restraint. As many of the members know, I sat on the standing committee on finance and economic affairs and spent a great deal of time encouraging them to cut spending and not to increase taxes. I put together the minority report, which hopefully, if I have a little time, I'll talk about.

I want to explain why we're in the situation we're in and needing to cut, and I will refer to the budget on page 96. If you look at the total debt per capita, about 10 years ago it was about $3,300 provincially for every man, woman and child in this province. It is now $7,600. So basically we have doubled it in about 10 years. Quite frankly, that's why we're in the circumstances that we are in today.

The circumstances that we are facing now are laid out very clearly. In 1984, we spent about $23 billion. This year, we'll hit about $43 billion over the next little while. So frankly, as we sit here, we are facing a serious problem. What I did over the last little while, in our minority report, is put together some of the ideas about what we should be doing, and I want to talk very briefly because I don't think anybody has talked about where we're at.

I put together about a 700-page article on this particular piece of legislation. I was saying to my friend across the aisle there a moment ago that I spent last night thoroughly reading the legislation. I think the people on the other side heard me talk about what is happening in this province. They aren't too surprised to hear me say that we need to cut spending. I'm not going to spend a great deal of time in looking at some of the other areas because I want to discuss this bill.

In our minority report, we've talked about quite a few areas where spending should be cut -- non-profit housing, social assistance -- but I want to get specific on this bill.

On the NDP's plan to legislate the public sector wage concession, one of the problems I've got is that it's short term. What I've talked about all along is that we need to scale back the level of government to the 1985 level, but one of the concerns I've got is that at the end of this we're really not going to scale back the amount too much. I believe Ontarians want a permanent, structural reduction in the size and cost of government.

Instead, I believe they're getting a short-term fix, which only defers a lot of the fundamental reforms that must happen if we are to salvage our economy. At the end of three years, the government may be the same size; it may be lower. As I said to my friend opposite, I really, honestly, truly believe that with some of the mechanisms in there, we are going to get some sectoral agreements as a result of what's happening.

Among some of the things that we've talked about doing specifically -- because there's the whole broader issue of where we could have got $2 billion and where we should be cutting, in our minority report -- but some of the things I think we could do specifically with this bill is start by -- and I will lay out some of the things that we should be doing.

Number one, we should have a three-year hiring freeze, which has the potential to reduce the annual cost of the public sector by over $2 billion. We need to scale back the number of employees we have, through attrition. We need to have, as we've talked about many times, a wage freeze and, as you know, we talked about this going back to the first budget. We said that if you continue to spend, all you're going to do is push it off into the next few years and it's going to be more difficult. Quite frankly, during that period of time, going way back to the election, both the NDP and the Liberals laughed at us.

I can say to the public and to the members opposite that no one is laughing now. I-told-you-so's really don't help too much, but if you'd listened during that period of time when you were increasing the amount of civil servants, when you took the total salary and increased it by about 13.5%, the increases were 5.9%, the rest of the provinces -- so it wasn't a political issue. Other provinces were setting wage caps, salary freezes, two years ago. We said you should be doing that and you laughed at us, and now nobody is laughing with the result of what's happened.

I hope that some of the spirit of some of the things we're hoping to do in terms of some of the amendments will be listened to, because I think that if there's one thing that's clear during that period of the first budget, we tried everything to get you to agree. We tried everything including trying to shut this place down and no, you were right: We were going to spend our way out of it. I hope one lesson has been learned: that members of the opposition, particularly in our party, want to offer some constructive solutions.

We talk about whistle-blowing provisions to protect public servants who report fraud, waste or abuses from the workplace, while we can get some of these substantial savings coming through.

We talk about provisions to discourage government departments from spending their entire budgets within the fiscal year or eliminating what is referred to as the year-end burnoffs, otherwise they would face rollbacks.

We talk about performance bonuses for the public service based on efficiencies and productivity schemes, and this isn't new. If you go to Oakville at the Ford Motor Co out there, the Canadian Auto Workers have had a lot of these provisions as well.

1940

They talk about empowering unions, yet we really truly need to get the people on the front lines, who know where the cuts should be made and know where the waste is. I need only refer you to a typical example of that. I got a call about a month ago from a lady who works in the Halton region. She's single with two kids, and she said she used to make more money when she was on social assistance with all the benefits than she makes now. She said: "I see so much waste, so much abuse, so much fraud. Mr Carr, you tell me why I shouldn't just quit and go back on social assistance."

It isn't just us and the front-line workers saying that. In that particular case, the auditor said we're looking at about a $600-million fraud and mismanagement in the social assistance system.

If we're going to truly get some of the cuts that are necessary, we need to empower the people who are on the front lines. They're the ones who know if there's any abuse in the system; they've been through it and they see the people coming in daily. So one of the things we've talked about is performance bonuses for public sector employees based on efficiency and productivity gains.

We also talked about the establishment, as we did in our minority report, of an expenditure review committee. We're talking a great deal, having public hearings across this province on the Fair Tax Commission, but nobody is looking at the spending side. Quite frankly, until you solve the spending problem, there will never, ever be any opportunity for tax relief. We've said continually that the problem we have in this province isn't a revenue problem but a spending problem, and we've offered a number of solutions.

We believe that if you listen to some of the ideas and the amendments we are proposing, basically those six points encompassed in the amendments we are moving, we honestly, truly believe you would have a better chance at scaling down the size of the public sector.

Over the next little while, as we look at this particular piece of legislation, there are some major faults with it. I don't think there is anybody in the province saying we shouldn't cut back. Ultimately, the people are going to make a choice between this piece of legislation -- and I think you will get some sectoral agreements. Some of the provisions in there, the 20% reductions in transfers, the transfer cuts, will allow a lot of employers to say: "Look, this is the amount, and if by August 1 there is no agreement in place, this is what it will mean to you. There will be no enhancement provisions for job layoffs." I really believe that both sides may come together as a result of this legislation.

I think it's been an entirely cumbersome process. We could much more easily have cut out a lot of programs like the non-profit housing and the social assistance and got $2 billion, rather than this whole process we put together. Hopefully, if time permits, I will get into some of the broader solutions.

It's tough as a politician to make cuts. Everybody says, "Make the cuts." Everybody makes the cuts. I know it's the same at the municipal level: Everybody's hitting you, "Don't increase taxes," but as soon as you make the cuts it's very difficult, because everybody believes there's waste in another department or another ministry, that their ministry is running efficiently.

I talked today with one of my municipalities -- actually it wasn't one of my municipalities but an adjacent one -- with a friend who's a local councillor, and he said, "We're already efficient in my municipality." If you talk to the 360-odd ones, they all believe they're efficient. He said, "We're being penalized, because our cuts are in our areas when we're already to the bone and efficient." Well, I don't think too many municipalities out there are saying they are not. He was worried about some of the cuts to his municipality, his $2 million. He said, "We shouldn't get that because we're already cut back, we're already efficient." I said: "Well, what are we supposed to do? Take your word for it and cut another municipality $2 million because you say you're efficient?" It has to be broad-based, it has to be across the board, and essentially that's what's happened.

It's going to make it difficult because, as we all know, over the last little while most municipalities have already attempted to cut, and when we get into school boards, we're in a real tough situation because so much of theirs is tied to salaries.

There are two trains of thought in speaking to trustees and municipal people. There are some municipalities that say: "Give us the power to do the cuts. We want to do it. Stay out of the road and let us do it. Just cut the transfers -- we know you have a problem -- but let us do it." There are others I've talked to in the municipalities, trustees and different people who say, "No, if you're going to cut the transfers, you have to give us the authority to be able to reduce salaries or to lay off people, because if we don't, we'll never get the savings."

There's a bit of a combination. Quite frankly, I think that's why this legislation seems so cumbersome and so confusing. I must admit that when it came in, until I read it over last night, I felt the same way. But there are some good points in there. I know we laughed at some of the fail-safe mechanisms, but when we look at some of them, there are some incentives to both sides.

Over the last little while, we have talked about what we would do. Mike Harris, going back to June 14, talked about the provisions we'll be looking for. I think the member for Markham has included that in some of his discussion, so I won't go through it. We've outlined six points which I believe will be helpful to the government, and if there are any amendments that we can get put to this bill I think they may be helpful.

Initially, when this government was empowered two years ago and we gave them suggestions, I truly believed they thought, "We know what we're doing, so no way; we're going to proceed." But I want to tell you, during the February hearings when Mr Laughren, the Finance minister, came in, there was absolute terror in his eyes because he knew what we were facing in this province. Two years ago it was, "We know what we're going to do." I honestly, truly believe that maybe some of the amendments will come through; they're given in the spirit of cooperation. Maybe two years ago they wouldn't listen, but -- I say this in all modesty -- maybe because our record has been pretty good at predicting what will happen if you don't, we may have some credibility with you; and also because now you're in a crunch where you're looking for some assistance, although I suspect there was plenty of assistance around the bargaining table during the last period of time.

This touches on everything, this particular bill. If you look at section 45 -- I was talking very briefly to my colleague -- it outlines everything, including what will happen with MPPs' salaries. It says in there that the provisions will allow the Minister of Finance to cut MPP salaries. We haven't had an increase since I was elected in 1990 and I firmly believe we should not during these periods of restraint; I was one of the ones that fought. But I was interested to note that according to section 45 on page 23, I apparently am now employed by the Minister of Finance; he is deemed to be my employer. I always thought the people I work for were the fine people of Oakville South and southeast Burlington.

Interjections.

Mr Carr: I guess we have some debate on whether we should call an election. I certainly hope one will come very soon.

But I truly believe there are a couple of principles we should adhere to in here over the next little while.

One of the ideas we've talked about is that there shouldn't have been any tax increases in the last budget.

We talked about how we would help in terms of the cutbacks, the $4 billion that needed to come out; we told you $2 billion worth of savings. I want to talk to about what some of those amounts are.

We talked about where we see some of the problems. We talked about a moratorium on government housing. Our best-guess estimate on that -- I think they're pretty accurate, having looked at the estimates -- is that we could save about $450 million if we put a moratorium on non-profit housing in the province of Ontario today. Many people don't realize that not only are we building them but the subsidies for them will be about $1.2 billion over the next few years. The auditor's report said that the cost is about two and a half times -- absolutely, if you read the auditor's report, an overwhelming condemnation of non-profit housing in the province of Ontario. I firmly believe that at a time when we're looking at cutting nurses' salaries, doctors' salaries, teachers' salaries, we should not proceed with that non-profit housing at a cost of about $450 million a year, and ultimately costing us more because the subsidies carry on long after the program has died.

We've talked continually about the crackdown on health card fraud, and there are various figures. Some of the people in the unions themselves talk about $700 million, the auditor talked about $20 million, and somewhere in between I guess is the amount. It's probably not as high as $700 million, but surely at a time when we're talking about rolling back salaries of teachers and nurses and laying off people, we have to take a serious look at that.

We have been for well over a year now talking about that particular program. As recently as a month ago, probably even less than that, my colleague from Simcoe West stood up and again talked about the fraud, where we have a health card of somebody who's been dead three years. The problem with these health cards is that once you've got the cards, anybody can access them. For all we know, Americans in Buffalo could be coming across and using our health care system at a time when we're saying to doctors and nurses, "Sorry, we're going to cut back your salary," and where, as we heard yesterday, we may be potentially closing hospitals. We now have the Minister of Health with the ability to ration health care with some of the provisions that were in. So what we're saying is that if there's a potential for fraud, it should be stopped.

1950

We also talked about the better management of the social assistance program. Again, it wasn't us who talked about the fraud. The fraud that is in there over the last little while could be upwards of $600 million. The auditor says about 10%. I honestly, truly believe it's higher and I would give some of the members opposite who are talking about that some of the things that we would do with social assistance. I say to the Yorkview brother, one of the View Brothers, this is what we would do. Some of the provisions are similar to what you started. We would act on the SARC recommendation to link social assistance to employment by using welfare dollars to finance subsidies to employers hiring social assistance recipients. So it's the best of both worlds: Half the cost is paid by employers, half by the government, but people are then getting some training so that they have some future, rather than having people who have basically been unemployed.

We talked about immediate steps to determine why the recovery rate on outstanding welfare is only 3%. I will read a headline from my local paper, if I can find it here. I believe I have it in here. It says, "Fraud Buster Saves Halton $72,000." They hired a welfare investigator. He has prosecuted 17 people. He saved Halton region $72,000. But, my friends, the fact of the matter is that Halton only pays 20% of it. I won't name the chap's name. It and his salary were in the paper, which he's probably not too pleased about. But the chap, whom everybody knows, "was hired by Halton last June to chase down perpetrators of welfare fraud." This is in the Burlington Spectator, Thursday, May 27. "He has found $485,000 in overpayments by the province and the regional government, according to the report that he has tabled before council." So it is public knowledge and his name is Peter Foulds. I guess everybody knows how much he makes now. Halton's share was $72,000, more than twice his $35,000 salary.

People are saying there is fraud and abuse in the system. The ironic thing is that when I sat on the standing committee on finance and economic affairs, we had people come in there -- as you know, about 30% of the people who are on social assistance are there through no fault of their own. Whether they're disabled or whatever, they can't work. They were complaining because they don't have enough money to survive because we have too much of the abuse.

So that's just a little bit of an indication. If you read the auditor's report, it will tell you very clearly it's $600 million or about 10%. But there's a specific example, in a paper in my region of Halton, of where some of the waste and abuse are. So while we're talking about rolling back teachers' salaries and nurses' salaries and doctors and all the municipal employees, I think a lot of them would say, "I would be prepared to take a hit if I don't pick up the paper and see welfare fraud at a cost of" -- let's round it off -- "$480,000." That's getting up close to half a million dollars in fraud.

Mr David Turnbull (York Mills): Half a billion.

Mr Carr: No, it's million. One man found almost half a million dollars. The ironic thing is that the 17 prosecutions where there was fraud -- so we're not just talking about an error where somebody put an extra zero; there was fraud. They prosecuted it.

Mr Perruzza: So tell us, what would you do?

Mr Carr: This gets around to people and I honestly, truly believe that will stop some of the indications.

My friend asked, "What would you do?" We would adopt a law similar to Quebec's. So this isn't a law that we've dreamed up. Quebec has a law to beef up the authority of welfare review officers to conduct welfare fraud inquiries. I talked about the Halton region. In Quebec, officials have a 75% success ratio. Mr Foulds has been successful in Halton, but in Quebec they have a 75% success ratio. It's already been tried; it isn't something new. You don't have to believe Gary Carr that this is what needs to be done. It's being done in Quebec with a 75% success rate in recovering welfare fraud in the 5,000 cases they reviewed.

Now, obviously, just similar to Mr Foulds, what they do is they look at it and they talk to the front-line workers who tell them there may be some abuse. This man just doesn't go and pick out files. They talk to the front-line workers because they're the ones who give out the cheques, who know where the abuse is. In Quebec, they have a 75% success rate in the 5,000 cases that they looked at with Bill 38.

Interjections.

Mr Carr: My friends opposite, who I'm trying to give some suggestions to, are heckling and carrying on as if this is a terrible thing that we should be catching fraud. I say to the members opposite, the teachers, the doctors, the nurses that you're going to cut back would be willing to do it if they didn't believe that you were wasting in other areas. My goodness, you've got to realize that at the same time you're doing this you can't continue to allow these things to go on. As long as they read headlines that read "$480,000 In Abuse In The Halton Region," how are you going to get anybody to buy in to this tough piece of legislation?

So I say to my friends, I was going to continue on with some of the other things we would do, but obviously by the heckling they aren't too concerned about what really happens. If they're interested in reading it, they can take a look at our minority report. In fact, it was our minority report before the auditor that was done for the member for Burlington South that went into even more detail of where some of the abuses were.

When I started off I said I had some positive thoughts, and by the heckling it seems like the other side isn't interested in looking at it. I could talk about the 16- and 17-year-olds, and when we told you that you shouldn't get these kids involved in the welfare, you said, "Oh, no, we've got to do it." That's what increased it.

The scary part about the whole situation with the welfare is that when you look at a graph of where it went, even during the 1980s, and for my friends who haven't read the report, you don't even need to actually read it because there's a graph, and if you were to take a look at it, the welfare case loads during the 1980s, when we had a boom period, when we had the highest economic growth of any of the industrialized countries with the exception of Japan, you would have thought the welfare case load would have gone down. It did not; it actually went up.

For my friends, because there are a couple that are interested, who want to take a look at it, this is a list of the welfare case loads and how they went up during the 1980s. They skyrocketed when you went in government, obviously because of the recession, but even during the 1980s they were climbing up, when we had major economic growth. One of the reasons was because we made it easier and easier, fewer controls in place, and I suspect one of the reasons is because we had so much money we didn't need to have the Peter Fouldses of the world come in and discover money because we just produced more. Well, now we have to stop it, and we have to look at these areas. I've given a couple; there are some other areas that we talk about. We talk about the whole expenditure review and how the finances should be put in place.

But let me say right now very clearly that we all realize we're in trouble. Our economy right now is being battered by high taxation, high government spending, high unemployment and low productivity. Our social structures now are stretched to the limit because of the soaring costs in health, education and welfare. The ironic thing is that the more money we put into these things, the worse they get. I said to my constituency office the other day that we pump more money into all these programs, we get more calls. WCB is broke. In the education system we have 30% of the kids dropping out; 30% are functionally illiterate. We pump more into health care; we have more people on waiting lists.

So, quite frankly, to the members of the opposite side, we are never, ever going to be able to control government spending unless we take a hard look at the spending. That's why in your own area we have offered some productive solutions, because we're saying to the people out there, "If we're expecting you to make cuts, if we're expecting you to have pay freezes and rollbacks, you have to be prepared to do it with your government." Over the last little while, I quite frankly don't think that has been done.

So we have offered about six amendments. We talk about a three-year hiring freeze. We honestly, truly believe, as we called it at the time, in the fourth option, that we can reduce compensation by $2 billion in the third year with a reduction rather than the situation we're in now, when we're cutting it out right up front. The way to do it is similar to what would happen in a business practice. If we were to have, through attritions, where somebody leaves they had to be replaced by somebody else being more productive, then I honestly, truly believe it would be much easier than having what we're going to have here, which is bang, a whole bunch out of the system, a lot of chaos. I say to the members opposite, you know who they're going to call when the government agencies break down: It is as it is now, the MPP's office.

If it had been done through attrition in the whole broader sector, we could have had an office, when somebody was about to leave because they moved on, they retired, they had another job, they won the lottery, whatever, the people in that department would say: "Joe, Fred, Terri, Cindy is leaving now. We're not going to be able to replace her. How are we going to be more efficient in order to do it?"

This is what has had to happen in the private sector. It's not new. I say to my friends opposite -- actually, I guess Randy has left -- but the Canadian Auto Workers have had to do this for years. That's how they've got efficient in it.

2000

So it isn't something we've designed in conjunction with the employers. This is what should be done. This is what should be done in terms of the capacity of the government to do it. What we're looking at, rather than some of the quick, knee-jerk reaction, is saying: "If this is what you're going to do in terms of the legislation, could you at least look at some of these other things while we go along? Could we at least look at our own spending in social assistance, in non-profit housing? Could you at least look at scaling down in terms of the Ontario public sector like the Canadian Auto Workers, like Ford has had to do, like General Motors has had to do?"

Because, as you know, in this province today we produce more cars than we did five years ago with fewer people. Quite frankly, it isn't any dramatic management technique that was in there that allowed it. It was because the people on the front lines who were empowered to do the job the way it had been done for 100 years were changed because somebody said, "Why are we doing that?" That needs to happen in the public sector. I don't think it's happening.

Interjections.

Mr Carr: Some of my friends opposite are yelling that it is. I honestly, truly believe it is not. So we are now in a financial crisis where we are basically bankrupt.

Interjections.

Mr Chris Stockwell (Etobicoke West): Hey, hey, I can't hear him. Be quiet.

Mr Carr: I appreciate the enthusiasm with which my words are greeted on the other side. But all along, for the last two years, we have been constructive. We've attempted to throw a lot of proposals out. We don't expect them all to be listened to because we understand that, for various reasons, you will not. But certainly, over the last two years, as the Premier has said himself, we have credibility because we have offered constructive solutions.

We all came to this House not just to complain and to yell about the government. That would be very easy to do, quite frankly. As my friend from Etobicoke West has often said, criticizing you people is sort of like being the best hockey player in Somalia: It's doesn't take too much. But we want to be constructive. We honestly, truly want to help you, and I hope that the spirit in which these amendments were offered will be the one that will take you to look at them.

I hope it will. I think the Premier believes that. I know the Treasurer believes that. That's why we're offering them. Quite frankly, even if you don't listen, you're going to keep getting them for the next two years because we are trying to put in place a plan which will allow us, when we form the government in 1995, to finally get this government back on track. Quite frankly, as my time runs down, it won't come soon enough. We absolutely, positively have to get our spending under control. We don't believe you're going to do it, but we're going to keep offering solutions. Hopefully the other side's going to start to listen one of these days.

Mr Cousens: I just want to go on record. I think that when you have the kind of presentation that we've just heard, it's the kind of balanced, intelligent statement that shows a tremendous amount of reflection. I think it's hard in politics today. There are so many people who are looking for people to just be so strong-minded and have so many opinions. But rather to search out in a thoughtful, meaningful, caring way the best solution is really where Mr Carr is coming from. Having listened to him during the last period, you go away the wiser.

I think what I'd like to ask the member is, do you feel, with the government proceeding down the way it is, that it is causing considerable confusion within your own communities as far as the municipal level, the teacher level and others, and whether or not they're going to be able to help accommodate the solution through the sectoral agreements that the government is looking for?

We're talking about a negotiation that is extremely difficult. If we're able to see some kind of negotiation where people can come out of this with everybody winning, then you're in a position to have seen progress that we have not seen in Ontario under the leadership of this government. I have sensed, in fact, the very strong frustration that because things haven't proceeded more quickly, it's getting worse. I'll ask the member to comment.

Mr Perruzza: Just to touch on a couple of points that the former Speaker and my Conservative colleague in this House tried to make earlier, with respect, I quite often get offended when members opposite stand up and pontificate about their ability to crystal-ball gaze. In fact, the member alluded to his prediction abilities when he stood up. I've never heard him distance himself from the kinds of things that his Conservative buddies have done in Ottawa. I never heard him, quite frankly, stand up and distance himself from, for example, the introduction of the GST when the federal Conservative government introduced this massive tax, ripped tens of billions of dollars out of the economy, all to be applied towards the debt.

The point that I try to make in speaking to that is, quite often the Conservative Party -- it does this more than anyone else, quite frankly -- stands up and tries to explain and describe the kind of responsible fiscal manager it is, but if the truth be known, that party left this province with a debt of around $40 billion, and the Conservative Party federally, quite frankly, took a debt of $200 billion and something and doubled it. If that's good fiscal management, then I don't know what it is they're talking about.

Mr Robert V. Callahan (Brampton South): I listened very attentively to the member for Oakville South, and I find it absolutely incredible that the Conservative Party, which I am sure is hearing the same things that I'm hearing in my riding, and every member is -- that this government has to be defeated in some way, shape or form; that we shouldn't support anything it's bringing forward, particularly this type of legislation -- and the member for Oakville South and the rest of the Conservative Party are saying they're supporting this. What they're supporting is a time bomb.

My leader went through the legislation with the Premier yesterday about the fact that we're going to pay for this down the line three years from now in terms of having to supply days for people who have accumulated them over the period of time while they were off on this holiday that the NDP wants to present. Who's going to pay for the cost of those people who are going to take their place while they're off on these accumulated days?

I find it absolutely incredible that the tax fighters, who have said to the people of Ontario that they are going to fight taxes and fight expenditures and so on, are prepared to support this type of legislation the way they have. It seems to me that maybe some sort of a coalition has been worked out between the NDP and the Conservatives. Perhaps the Conservatives feel that this is not an appropriate time to fight the NDP.

I hear the people in my riding, and I'm sure others in their own ridings hear, "When can we get rid of that government?" The unfortunate thing about it is these people don't realize that they're around till 1995. So I say to the Conservative Party, you're playing right into their hands. You're about to support a bill that will in fact make you, as tax fighters, look more like wimp fighters. I suggest you get off your butts, look at the bill, understand how it is and decide to do the proper thing on this occasion.

Mr David Tilson (Dufferin-Peel): I'd like to congratulate the member for Oakville South in expressing our party's view as to where we believe this province should go to solve some of the great expenditure problems and cost problems that we have.

It is always interesting hearing the member from Brampton South as to what his thoughts are as to where our party is going. At least we have an alternative. The member for Oakville South has put forward an alternative.

All of this financial mess started with the Liberal government. We all made those remarks. We all remember back to the Peterson years and how this province became more taxed than any other jurisdiction, and we watched how this government spent and spent and spent. Of course, then we turned to the New Democratic Party, which started talking about what it's going to do. Remember back on August 19? There was some funny document called An Agenda for People.

Mr Stockwell: No.

Mr Tilson: Yes, and what the Premier there said is, "I started this campaign by saying our party would not be presenting an endless catalogue of promises to the people of Ontario, and today I'm putting before the electorate An Agenda for People." In fact, he eventually suggests that Ontario should lead a tax revolt.

2010

Mr Stockwell: A tax revolt?

Mr Tilson: A tax revolt. Well, we've seen what this tax revolt is. We've seen this tremendous budget that's come forward that this province has never seen. I don't know why anybody would ever want to live in this province with the terrible taxes we have.

I'll tell you what they're doing now, and there's no question we do applaud them on one thing. We acknowledge that there's too much government. We do applaud them with that, but the fact of the matter is that they haven't a clue as to how to go about doing it.

The member for Oakville South has been most clear as to where we're going. In fact, when you listen to the New Democratic Party, which said, "Our platform for this election represents a new beginning for Ontario, an agenda for people that begins the work of making our tax system fair," well, I'll tell you, it's the most unfair system that we've ever seen in this country.

The Deputy Speaker: The member for Oakville South, you have two minutes.

Mr Carr: The member for Markham talked about frustration. I guess the frustration comes from having presented some alternatives and having the other side just immediately dismiss them.

The member for Yorkview talked about being offended. I tell you what offends me. He talks about crystal ball gazing. We call it planning, we call it vision, not crystal ball gazing. Of course, that member wouldn't know, not having been able to take a look at anything in terms of planning or management style.

He talks about the GST. This is the same member who, with a $2-billion tax increase from his Treasurer, sat there about five rows over, five rows back, and said nothing. Where were you when the Minister of Finance brought $2 billion of taxation in? You were silent. You can talk about somebody else. The men in the front row, both of them, are the ones you should be talking about. You should be embarrassed with your record over the tax increases. And, quite frankly, you talk about deficit? We had to count on your hands billions, because you couldn't count up to 10 unless we told you how to do it without your fingers.

For this member to talk about deficits when you've run up the most outrageous deficit over the last little while, you've said nothing to the Treasurer, you've said nothing to the Premier, and you should be embarrassed.

Finally, to the Liberals, the people who say, "Don't increase taxes, don't increase deficits, don't increase spending," you, my friend from Brampton, were there when David Peterson taxed, spent and borrowed like there was no tomorrow. You sat there four rows over, four rows back. You said nothing. You should be disgusted and ashamed. At least we're standing up and offering alternatives. You said nothing for those years.

I'm sick and tired of members in this Legislature who won't stand up to the government. I'll tell you right now, you've got a member who will because I'm elected by the people of Oakville South. That's who I stand up for -- not David Peterson, not Floyd Laughren, not Bob Rae -- the people of Oakville South. Every time you step out of line, you're going to hear from me.

Hon Brad Ward (Minister without Portfolio in Finance): I would like to add my thoughts to this debate --

Mr Callahan: That should be brief. Thirty seconds, Brad, or what?

Hon Mr Ward: -- this enlightening debate, the energetic debate following the member from Brampton. I'd like to say that I may not take up my full half hour because I like to be clear and concise in my statements and then sit down. I'll express my views as well as I can and I hope that the House will give me the respect that I show them when they express their views during debate.

I'd like to look at the bigger picture here rather than focus simply on Bill 48 and the social contract, although I will turn to that later on in my presentation. I think we all know that we've gone through the worst recession since the 1930s in the province of Ontario, that we've lost over 320,000 jobs over the last two and a half years since the recession started to take hold in late 1989 and 1990, and that we suffered three quarters of all the job losses in Canada in that period. As a government, we made a decision shortly after our election to battle the recession to the best of our ability.

We realize that you can't spend your way out of the recession, but there are things you can do to cushion the economic blows that working people are facing. We tried to do those things. I would hate to think how bad it would have been if we had not maintained our commitment to capital projects and improving our transportation links and providing short-term work for people. I would hate to think how bad it would have been if we had not provided our initiatives in affordable housing, which the members opposite criticize, providing affordable housing for the people of Ontario and, again, creating short-term work for our skilled trades, much-needed work during the great recession of 1990-92.

We ran deficits. We ran record deficits: $10 billion, first budget and second budget, but I'm not defensive about that, because I think during tough economic times, it's important for governments to try to stimulate the economy as much as it can when the private sector is unwilling or unable to. At the same time, as a government, we always said that when recovery would begin to take hold, we would deal with those deficits. And recovery has taken hold. The province of Ontario has created around 100,000 jobs over the last six to eight months.

Mr Tilson: Things have never been so good. Boy, these are good times. What a party. Ring out the good times.

The Deputy Speaker: Order.

Hon Mr Ward: It's a fragile recovery. I know the opposition doesn't like to hear this, but it's a recovery none the less. It's export driven; it's not consumer driven. Economic indicators, fragile and bumpy as it is, are still showing positive economic growth.

Mr Stockwell: I can't stand the prosperity.

Mr Tilson: This is wonderful.

The Deputy Speaker: Order. I would ask the members please to remain calm. The member for Brantford has the floor. You had your turn; it's his turn.

Hon Mr Ward: As a government, we made a very tough decision. We said that when recovery is going to take hold, we will deal with the deficit. If we had done nothing, we would have been facing a $17-billion deficit for this fiscal year. We said, "No, during recovery we have to get the deficits on a downward trend so eventually you can have an operating surplus," and that's what we did with the budget that we brought out. We brought the deficit into a downward trend, so that by the year 1998, we should have an operating surplus. But to do that, we had to make tough decisions. We had to make decisions that we think the people of Ontario were looking for, the leadership that was necessary.

Mr Stockwell: On a point of order, Mr Speaker: If the junior Minister of Finance is going to drop these pearls of wisdom, I think there should be a quorum to hear them.

The Deputy Speaker: Table, would you please check if there is a quorum.

Acting Table Clerk (Ms Lisa Freedman): A quorum is not present, Speaker.

The Speaker ordered the bells rung.

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

Hon Mr Ward: We made some tough decisions with the budget. We said we wanted to have a fair and balanced approach to battling the recession, to sustain the fragile recovery. To do that, we took three steps: We increased taxes, yes; we cut expenditures, yes, $4 billion --

Interjections.

The Deputy Speaker: Order. Please take your seats. If you want a conversation, do it outside the House, please.

Hon Mr Ward: For the first time since 1942, program expenditure reduction occurred in the province of Ontario in cost. And yes, the third component was the social contract with our broader public sector partners, 950,000. We took this fair and balanced approach because we felt it was important for all sectors and individuals to contribute to getting the deficit down.

The taxes that we increased we think were as fair as possible. We could have increased the sales tax if we wanted to, but we didn't. We broadened it, but we didn't increase it. We increased the income tax by three points because income tax is the fairest tax system we have in the province of Ontario. It's not perfect, it can be made better, but it is the fairest tax we have because it's based on ability to pay.

We said the upper 10% income earners in the province of Ontario, because they have a little bit more ability to pay, should make a bigger contribution, and we increased the surtax on them. We said corporations that are making a profit, that may not be paying income tax, should, and a corporate minimum tax will be brought in in January 1994.

On the expenditure side, we tried to ensure that the most vulnerable were protected as we made our expenditure reductions, and we did that to the best of our ability, and we went to our broader sector partners and we said, "Sit down with us in a fair and open fashion, negotiate with us, help us find creative solutions to reducing the wage compensation that is in the public sector."

2020

Although some people look at the sectoral negotiations that took place as a failure, I don't, because there were some good ideas expressed at the table, some creative solutions that should be examined in greater detail, and although as it proceeded, near the end the coalition of the unions found it necessary to walk out, I'm confident that come August 1 you're going to see some sectoral agreements, some local agreements between employers-employees-our government that will find solutions, that will prevent layoffs and service cuts in the province of Ontario. We did this in a fair and balanced approach, as I said, to the best of our ability.

And, sure, people don't like tax increases, no one does, but if they're fair, if they go to effective and efficient services and people see the downward trend in the deficit, it's my opinion that although they may be a little bit mad now, in the long term they're going to say, "Okay, we can live with that." And the expenditure reductions, as long as the most vulnerable are protected, the people of Ontario are going to say: "Okay, we can live with maybe a little bit longer lineup in certain areas. Maybe we didn't really need that one service. Maybe it was a good idea to rationalize some of the bureaucracies."

When we look at the social contract, Bill 48 and the fail-safe items, I look at it and I say, what other government in Canada, when they're dealing with their public sector, would say, "Yes, we recognize that there are hardships on the working poor, people making less than $30,000, and we're going to exempt them"? What other government would say, "We may have an opportunity to take advantage of some surpluses in the pension without infringing on the entitlement of people who want that pension as they retire, make creative use of that money to prevent even more layoffs or provide a greater retirement incentive"? What other government would take job security in a serious fashion and set up a fund, $300 million over three years, to top up public sector workers who unfortunately may be forced into a surplus situation, a layoff? What other government would say there should be a redeployment list by region so that if there is a layoff in one hospital and there's an opening, for whatever reason, in another hospital, they should be considered for that job? I can't think of any other government that would have that much consideration for their employees. Other governments wouldn't care about their workers; they would simply lay them off. "Good luck." Throw them to the wolves.

It's because of these aspects of the social contract that I am so confident that we're going to sit down at the tables, locally, sectorally, reach consensus, agreements, and come August 1, we're going to reach our target of $2 billion in reduction without the undue hardship that may be experienced in other provinces.

With that, as I said, I would be as clear and concise as I can. I brought the broader picture into perspective here, I hope, looking at where we've been over the last two and a half years battling the recession, why we had to make the tough decisions we did with this budget, the three components, a fair and balanced approach and our sincere effort to work with the employees and employers in the broader public sector to help us work together to find creative solutions.

Mr Callahan: I was enthralled by the speech from the member for Brantford. It's interesting, he sort of plays this almost to violins, but I really don't think you got the message across to those people that you're going to short-circuit, whose jobs you could have saved by doing a number of things. If your Minister of Finance had not had Keynesian economics, where he wanted to spend his way out by giving large increases to them to begin with, we wouldn't be in this pickle.

In addition to that, if you bothered to collect any of the debts that are outstanding in this province, $125 million I saw in public accounts through the auditor that have not been collected on family benefits that are either paid through fraud or mistakes, instead of having it done through some wacko collection agency you've got in your government that can only collect 10% of that account, and in fact it costs 20% to keep that ministry or whatever they are in place to collect the 10%, so in fact you're 20% below the line; if you in fact believed that there was any possibility that the private sector could help you out and didn't have this all-encompassing view that the government, this ideological thing that the NDP has that the public sector can do everything and the private sector is a bunch of junk, and if you didn't have this belief that the way to do it is to tax, tax, tax, tax -- Well, I have to tell the member from Brantford that I don't know where you've been. You certainly haven't been around this House to hear some of the comments that have been made, you certainly have not been listening to your constituents and you are certainly deserting every principle that the NDP, as I remember it since 1985, ever stood for. So I have to tell you that if you think this is such a marvellous act, I hope you read it, I hope you've discussed it with your constituents and I hope you understand the implications of it, because it's a time bomb that's ticking, and it's going to tick for the people of Ontario. Three years from today, the debt will be even worse. When we take over government in this province, it will be a disaster.

The Acting Speaker (Mr Dennis Drainville): Further questions and/or comments. The honourable member for York Mills.

Mr Turnbull: I just want to point out some of the absolute inaccuracies of what the member for Brantford has been speaking about. I turn to page 86 of your budget. Since you're the junior Minister of Finance, I presume you would have one with you. You talked in your speech about program expenditures being down for the first time since the 1940s. That's absolutely inaccurate, and, as Winston Churchill said, it's a terminological inexactitude, because, according to your own budget, there is $805 million that you've taken off-book, and in addition to that there's $600 million that you're going to get school boards to borrow because they have some borrowing capacity.

The reality is that this government is suddenly beginning to wake up to some of the fiscal realities, due to the fact that the bond agencies are simply saying, "Fellas, we may not be able to roll over your debt when it comes due," because the reality is that an awful lot of the bonds that were issued by this government earlier this year have not been taken up. They are in the treasuries of those organizations which distribute it for you. Unless they can move it, they will not roll over any more debt. So don't come with that kind of nonsense.

Also, don't come with the nonsense that you have a corner on compassion for workers, because it was under the Conservative government in this province that the best labour legislation in North America was passed, and I've talked to union leaders who have told me that, and you know that if you are telling the truth.

Start telling the people what really is the case: You've taken $1.4 billion out of the equation, and that's extra spending. You have not reduced your spending. It is absolutely untrue.

2030

Hon Mr Mackenzie: I do hope to have an opportunity to speak on this bill, and intend to, before we finish the debate. The only comment I want to make here this evening, and I want to make it as clear as I can, is simply that a fairness exists in this House, and I'll accept all of my responsibilities for my days, including in opposition. I want to say that short presentation just made by my colleague the member for Brantford was one of the more reasoned and thoughtful presentations made in this House. It obviously came from the heart, with some belief.

Mr Turnbull: It's a great shame it wasn't true.

The Acting Speaker: Order.

Hon Mr Mackenzie: I don't think there was any doubt about that and I am prepared to say that I accept the statements. I think they are true and I don't think that's the argument that should be made.

Mr Turnbull: Read the budget. It's inescapable.

The Acting Speaker: Order.

Hon Mr Mackenzie: There's real arrogance and ignorance in this House. What we had was a very reasoned approach that came from the heart, that clearly indicated somebody who had thought this out, a very difficult situation. I'm surprised there's anybody in this House who cannot recognize that kind of accuracy and commitment on the part of my colleague from Brantford.

Mr Stockwell: The difficulty I have when I hear the junior minister of Finance is exactly the points he's trying to put across as accurate statements. If this budget is your budget and it's your defensible budget, then so be it. I'm not one to tell you how to write a budget, because I doubt you'd listen anyway. The point I'm making is this: Those statements you made are fundamentally inaccurate. I don't care whether the Minister of Labour wants to stand up and continue the pretence that these are accurate statements.

If you want to say that for every dollar you increased the budget you cut four, go ahead and say it, but it's not true. The fact of the matter is that what you cut -- I'll prove it to you -- was spending you were thinking of making, spending you were planning to make. You had never made it; it was never made in any year. You were planning to make that expenditure, and then you said, "Okay, no, we won't," so you're classifying that as a cut. That's not a cut; that's just spending you didn't make last year and you didn't make this year.

The other point you must deal with is that you did move $800 million off-book and you did move $600 million to Education. That's $1.4 billion. When you add up total to total, you spent more. I will say this: You didn't spend a lot more, but you did spend more. You didn't spend as much as you did in previous years, but you did spend more.

If this budget is defensible, I challenge the government to defend it. But don't fabricate the numbers. They're simply not there. I make one last appeal, both to the Treasurer and to the junior minister. You do yourselves no service, no service at all, by pretending you made cuts that you didn't make and that you didn't move stuff off-book that you did, because any grade schooler can see through that argument.

The Acting Speaker: The honourable member for Brantford has two minutes to make a response.

Hon Mr Ward: For the people opposite who say we didn't make any cuts, it's too bad they weren't with us that weekend at the Metropolitan Toronto Convention Centre when we went through the most gruelling weekend to find $2.4 billion in cuts that we knew were going to have an impact on the people of Ontario. It was very difficult.

I get sick and tired of people saying this government's lost its way in representing the working people, because what other government in North America has come in with an employee wage protection fund? You talk to the American health care workers with access to that fund when their employer simply walked away. What other government in North America has brought in as progressive labour legislation as the Minister of Labour has and raised the minimum wage to one of the highest in North America for the working poor? We have not lost our way. We are marching in the right direction: fiscal responsibility in a caring and compassionate way that this government must proceed with and will proceed with over the next two years.

Mrs Sullivan: As I start my remarks on the social contract legislation, I want to regret that time is limited. I understand that government members are speaking less than the full 30 minutes they are allowed. But I feel that this is significantly important legislation that takes the province down a very different path than it has embarked upon in the past, and I want to address three areas in particular, one of them being the concept of a social contract itself, how we got into this position; secondly, the impact of this particular legislation and the companion legislation from the Ministry of Health on our health care services and delivery. I want to speak in a limited way but to bring the concerns of my own local community to the floor. Then I would like to conclude with a discussion of an approach to change in expectations of government in the province.

In reviewing the whole concept of social contract discussions, I think one of the most interesting and full discussions of social contract itself was presented by Mr Solomon Barkin in the Journal of Economic Issues in June 1977, and I commend that article to you. He talks about a social contract as being the most far-reaching new instrument in industrial relations, a term borrowed from the British and involving comprehensive wages and income agreements and Labour Party-trade union centre agreements on public economic and social policy. He says there is a parallel in seven other European countries -- Austria, Belgium, Denmark, Finland, the Netherlands, Norway and Sweden -- and goes on to talk about the development of social contract approaches in Italy and in other European countries.

I commend that article to anyone who is looking at the entire social contract issue, because it spelled out for me several things: the difference in the economies and in the structure of our workplace; the difference in our union-management relations and the entire working arrangement between unions and management in Ontario; the different ratios of unionized workers in those countries where a social contract has been put into place. Those issues are important to bring to the table here, because basically what's happened is that we have a government which latterly, and indeed too late, recognized that it had led the province into difficult economic circumstances and attempted to integrate an approach from another jurisdiction that it had not completely thought out. I think that is a singular part of the problem that we are facing today in the context of this legislation.

The next step in terms of bringing the concept of a social contract to Canada occurred in Manitoba and, lo and behold, one of the singular leadership individuals who was involved in the early 1980s in Manitoba was Michael Decter, who happened to be very much involved in the social contract negotiations here, and as you know, sat at the head of the table for the government.

I refer you to an article by Dian Cohen and Kristin Shannon, both of whom are very interesting commentators on public policy; indeed, Kristin Shannon is a person whose work I personally know and respect. They wrote, in chapter 13 of a book called The Next Canadian Economy, in 1984, about the experiments in restraint involving the public sector in two provinces: British Columbia and Manitoba.

In the early 1980s British Columbia adopted a win-lose model, a confrontation route. Indeed, that was adopted and the ultimate effect of that was ongoing distrust and difficulties between the government and the labour movement within the public sector. That continued right up until the present. Only recently did British Columbia attempt to move into a new facet and form of bargaining. Indeed, that entire approach, which was one of the bases on which this experiment was based, failed. It failed before this government began to move in this direction. Surely the model should have been looked at.

I want to talk about the Manitoba model, because the problems there were very interesting problems, quite similar to those here: booming public expenditures, a restrained economy and revenues that were in decline. But I should point out to you that the Manitoba social contract involved very simple negotiations for a very limited amount of money with very limited impact on the public sector. The Manitoba negotiations that Michael Decter was involved in, as he was then, as secretary to cabinet and clerk of the executive council, called for voluntary reductions of a total of $10 million. That amounted to about $600 per person and the Manitoba government employees union was the single union. There was only one union involved in those discussions.

2040

Unfortunately, what this government has done -- and I believe that in its selection of Michael Decter as the head of the government negotiations, it believed that Ontario was Manitoba writ large, or someone, perhaps Mr Decter himself, convinced the government that Ontario was Manitoba writ large. People who look around this province know that our province is far more complex, and that the relationships in our labour negotiations and in our collective agreements are far broader and far more demanding.

There is a leadership of labour culture that means that within the labour movement itself, a strong supportive role is required of union leadership and that cannot be shown in a giving-in mode. The government did not understand either the psychology or the complex nature of labour relations here when it adopted a model that was used in a far simpler situation in Manitoba, and in a situation where the goals were significantly different than they were in Ontario.

The other issue I want to bring to the table with respect to the Manitoba negotiations is the very question of goals. In Manitoba, the goals were expressed fully and clearly to the public sector and to the public. First of all, the government of the day wanted labour settlements that would not worsen the structural deficit, and it wanted to free money to reduce unemployment. Those issues have not been put on the table here with any clarity.

Unfortunately, we are in a situation now where there is clear chaos, where there is clear antipathy and anger with respect to the approach that government has taken, both from the employer side and from the employee side, and I feel that is singularly distressing in terms of the issues this province faces with respect to change over the next period of time.

If I can, I'd just like to read a portion of an editorial from the Windsor Star, which talks about some of the issues of the confusion surrounding the development of the social contract in Ontario. This is an editorial that appeared on June 16 and says:

"If you understand the terms of the NDP's social contract, congratulations. That puts you head and shoulders above most public sector union leaders, their 950,000 members and the pundits attempting to sort through this mess.

"Trying to figure out just what Premier Bob Rae has in mind is like trying to explain the origins of the universe. We know he wants to trim $2 billion from the public payroll and we know he introduced legislation this week that will freeze wages for three years if civil servants won't agree to negotiate the cuts themselves. The legislation is retroactive to June 14 and runs until March 31, 1996.

"But nobody from the government side seems to be doing a very good job of explaining just what that means. Should union leaders assume, for instance, that any collective agreements signed, sealed and delivered before this week stand and all wage freezes are based on that existing contract, or will Rae abrogate more than 8,000 collective agreements and start from scratch? The only thing clear is that not all the unions are willing to go back to the table and that virtually guarantees another failure.

"The exasperation felt by the public service is now being shared by the private sector but for entirely different reasons. With transfer payments to municipalities, hospitals and school boards scheduled to be cut July 1, and with taxpayers facing record provincial tax increases from then until the end of the year, they expect the government to step in and do something.

"Instead, Rae has put the onus on local leaders to come up with a game plan, enticing them to the table by promising to lower the cutback ante if they can just come up with a deal. At the same time, he's threatened to punish unions that won't bargain by denying them access to a $300-million job security fund. That isn't negotiation; that is blackmail, and it's mighty poor leadership any way you look at it.

"Public sector costs have to be cut. On this much we agree. What we can't abide is a Premier who prolongs the agony and animosity when he should have imposed immediate wage freezes after talks failed. It was his job and he didn't do it."

I think that is quite a succinct picture of what the public issues are associated with the aftermath of the failed social contract talks, and I commend again to you that article because it reflects the kinds of reports that we are hearing and seeing from every place in the province.

I bring your attention to an article from today's Hamilton Spectator quoting Brian McCormick, president of the Niagara district council of CUPE, who spent yesterday, it says, trying to find out how contracts will be reopened and whether non-unionized government workers face the same cutbacks. He wants to know how much his employer has to cut from its budget.

The Spectator quotes Mr McCormick: "I am not alone in my confusion. We're waiting to hear exactly what does this mean. I have a lot of questions."

That kind of chaos and that kind of confusion is extant through not only the union sector but through the employer sector as well. The employer sector has not yet received its targets in all of the areas, and those targets may well change from those which were on the table at the social contract talks at the Royal York, because in fact the base for bargaining has changed, given that the figures for the low wage cutoff are now $5,000 per person different than those which were on the table at the social contract talks.

I want to move to an area that I think was a warning that was presented when the government presented its first paper. On April 5, the Premier said, "If we can't achieve a new social contract that adjusts our public sector compensation costs, the alternatives are sobering: yet higher taxes and deeper expenditure cuts." That's what we've got, and as we look at what the principles were that were put on the table at that time, I think we should look and see what the government has brought to the table now and what the effect of that will be.

One of the issues which the government indicates is a principle for the social contract talks is a protection of public sector jobs, and the issue of job security is one that has been addressed by several members in discussing the bill that's before us. I want to talk to you about some of the decisions that have been faced, by example, in the public sector, not just this year but in the past, and in fact to look at hospital services and how over a period of several years there has been significant downsizing of beds and of the days in hospital for persons across the province.

There has been improvement and we, along with the Minister of Health and her former colleague and the Minister of Health before that, commend the hospitals for the very serious downsizing and restructuring exercise they have been going through from 1987 to 1993. In 1987, the days in hospital per 1,000 population were 1,117; today they are 840.

The impact of that kind of a change has been significant in terms of the workers in the hospitals, in terms of the restructuring, the redeployment in terms of employment. In my community, there are many people who have been displaced from services in hospitals who have had no place else to go, because we have not seen an increase in community-based services that will take those highly trained individuals.

2050

Hon Floyd Laughren (Minister of Finance): That's not quite true.

Mrs Sullivan: In my community it's certainly true, and in most communities in Ontario. I defy the Treasurer to prove differently.

Those positions are not in place. Indeed, as we look at the expenditure cuts that are proposed by the government, we see in the long-term care area, where the former Minister of Health indicated there would be a substantial redeployment of hospital personnel, a cut of $1 billion, with no indication of how that money will be redeployed, what terms are going to be placed on the long-term care sector, what stealing will be done from public health services and so on.

It's in your expenditure cuts, Treasurer, and I refer you to them.

Hon Mr Laughren: Your language is unfortunate.

Mrs Sullivan: My language is appropriate to the issue. For those who are at home and cannot understand what's happening here, the Treasurer is seated immediately in front of me and to my right and perhaps does not understand some of the issues that are associated here.

Mr Stockwell: Hey, listen, Barbara, a few years ago he would have been to your left.

Mrs Sullivan: I'm told that a few years ago he would have been to my left.

The issue of the targets per sector of the social contract legislation is interesting, because if you look at the numbers of employees in the health care sector, you will see that in hospitals there are now 164,800 employees. That includes everyone from nurses to orderlies to cleaning staff to administrators. Through OHIP there are payments to physicians, to health services organizations, to commercial laboratories. There are payments, through the drug benefit plan, to pharmacies and oxygen suppliers, and, through the assistive devices program, to those people who provide aids to people who are disabled.

In emergency health there are 5,300 employees. In long-term care 25,000 staff in nursing homes will be affected by this legislation, 18,000 staff in homes for the aged, 11,000 staff in home care and 5,200 in community support services. In community health care there are close to 10,000 people who will be affected. There will be people affected in other sectors as well.

I think that any one of the organizations and the unions involved would say that the workers, as well as management in virtually every one of those areas, have over the past four years evidenced a willingness to restructure and to enter into that restructuring situation.

But I think that when we look, by example, at the hospital sector and do some calculations, we can see the kind of difficulties that sector will face. The cutoff that the government has agreed to with respect to no effect on employees is a $30,000 income level. In hospitals that means that 54% of the workers will not be affected by this social contract legislation. What that also means, however, because the target that is being provided to hospitals is $253 million, is that the 75,000 remaining workers must take the hit of the $253 million. The effect of that hit is $3,300 per person in a hospital setting.

Some hospitals have gone through a restructuring that has placed as much downsizing as the community can take at this time. There are no adequate home care alternatives. There are inadequate community-based alternatives to hospital care. Hospitals have, as I've indicated, decreased in-hospital days significantly over the past four years and are now moving to 70% of their case load being handled through day surgery, and that is something to be applauded. None the less, how are those other workers going to be able to take the hit on them that is now being demanded by government when they have already been asked to take an additional cut for hospitals of $160 million? Of that, $50 million will come from the Ministry of Health base, $10 million from eliminating the hospital incentive fund and a $100-million reduction in one-time funding. In total, through the expenditure cuts and the social contract cuts, hospitals are being asked to take a 9% cut in their operating expenditures, amounting to $1.6 billion this year -- very difficult, and every community in Ontario is going to be asking if our medicare promises will be maintained when that kind of impact is felt on only one sector, in only one portion of the health care sector.

The OMA also, the physicians in our province, have enormous concerns, and I think members of this House will be aware of those concerns, as they were presented very publicly in the past few days.

But I wanted to indicate to you, and I applaud, the working relationship that the OMA had through the joint management committee whereby $980 million worth of cost savings had been achieved through the framework agreement which was signed two years ago. That framework agreement was one that I indeed had some reservations about when it came into effect, but in fact it appears to have been working.

One of the issues that I want to put on the table is that with the cuts that have been put forward in expenditure controls, one of the most important new vehicles for analysing and predicting change, the Institute for Clinical Evaluative Sciences, ICES, which works under the auspices of the OMA joint management committee and has more than 50 projects under way, may well be in jeopardy.

The work of that institute is singularly important, it seems to me, for long-term planning. The first major report is due in September that will identify practice patterns of physicians across the province. That will be a report that physicians themselves will want to review and where expert advice should be brought to the table to in fact learn how appropriately to restructure health services delivery and medical care delivery.

Unfortunately, what we have seen, and I want to move quickly because I see my time is running out, is the Minister of Health's companion legislation to the social contract bill, which is indeed draconian, and I suggest that this bill to implement the government's expenditure control plan in the health care field breaches two aspects of the Canada Health Act: the accessibility provisions, which require that reasonable compensation be provided through negotiated agreements, and the universality provisions, which require that people have equivalent access to health care services in whatever area of the province.

My view is that medicare is now being torn apart and torn asunder in Ontario with the provisions of this bill, and the sections of the bill, and I refer every member of the House to them, because frankly if you care about medicare, you should be looking this up, are subsections 7(a), (b), (c) and (d). Please look at those. Medicare is going out the window with those sections.

The second issue is that as a result of this bill, the government will have the right to unilaterally reduce payments, reduce services, tell patients the number of times they may receive services, where they may receive services and what services they may receive, whether or not there is any relationship to the need for those services from a health care point of view. That is not what medicare was set up to do. Medicare was set up to be a protection and to ensure that there was adequate, clear, open, even, equitable access to medical and hospital services, and this bill destroys that.

But furthermore, the bill, in assuming and in ensuring that the Minister of Health has the unilateral authority to make these changes, means that people may in fact not receive the treatment they need unless they pay for it extra. What we are going to need to know is if with this bill the Minister of Health intends what the legislation will in fact result in: a two-tier medical system where, when the Minister of Health says the government will no longer pay, people will have to pay out of their own pockets. The question is, what happens to the poor and the weak and the vulnerable when they can't pay?

This legislation is a clear breach of the Canada Health Act. It destroys medicare. I can't imagine being more upset about any other piece of legislation than I am about that one, and I hope that every member of this government will look at that piece of legislation and say no, this cannot happen.

2100

In the few minutes I have left, I want to turn to my own municipality and talk about the kinds of cuts and the approaches that have been taken there.

In Halton, the list we have received from the Ministry of Municipal Affairs indicates that some $6,147,541 will be cut from the regional and municipal governments. We do not yet have targets that have been set for cuts in other areas. I suggest, by example, that the impact on GO train services, on integrated transportation services, on our own hospitals and on other public services that are delivered in the community, including library services, are yet unknown.

At the municipal level, people are certainly going to be affected, whether it's in the provision of parks and recreation services this summer or bylaw enforcement or waste management or in public health services, and those issues are very clear already. Sheridan College, located in my riding, will face cuts in its administration and other budgets, and students already know that many of them will not have access to post-secondary education this fall as a result of these issues.

The difficulty, I think, with the approach the government has taken is that there has been an impossibility of planning in an appropriate, analytical way to downsize, restructure, reorganize and redeploy government services. I think there would be less animosity, less confusion and less chaos if the government had taken a modicum of time to do that preparation.

I have a document from the Ontario Hospital Association that I want to refer to, although given limited time to address the issue. It describes the restructuring process that the OHA went through as it had to deal with change within the hospitals across Ontario. They developed a plan and they talked about how people should be retrained, the retraining programs that should be available, how they should be redeployed and how the easement from one job into another should be made. They also made the point that to put into effect that kind of very important, vital program was a process of more than two years. I refer you to that document. It's included in the OHA proposals on the social contract agreements which went to the social contract tables. It's one that I think is valuable, and the Health minister and indeed the Finance minister should also have a look at the time lines that such a process of change takes.

As I conclude, I want to underline that in my view we should not be afraid of change in our society and we should not be afraid of change in the way government services are delivered. Unfortunately, what we should be afraid of and what we should be fearful of is change when adequate planning and analysis have not been put into place before the change takes place.

I suggest to you that if ICES is threatened, that is a clear signal that this government is going to continue to expect to implement unilateral actions without the appropriate planning in the health care sector, and I submit that will be, as well, a signal of its approach in any other area.

Mr Carr: I appreciate the opportunity to share a few thoughts on the member's speech. She went through quite a few of the circumstances of what we're facing in the health care field. I know the time is short because we only have a half an hour, and when you spend the time it takes to criticize the government, you can go well over a half-hour. But, hopefully, in the debate we're also going to get some of the solutions, what we should be doing.

I know my friend Mr Wessenger, the member for Simcoe Centre, has spent a great deal of time going around this province on health care. I suspect he got a great deal of criticism about what we're doing but not too many solutions.

It's interesting to note that the Minister of Health is here. Once she took over that portfolio, it probably took a few short weeks until the pot bubbled over. The former minister had it contained, there weren't too many crises, and the new minister immediately gets over there and the pot starts bubbling over. She's not in there more than about four weeks, and all of a sudden we've got talk about a two-tier health care system, that you're only going to be able to go if you have a kid with an earache. It was almost like what happened in the Environment field during that period of time. I don't know whether she just happens to be at the wrong place at the right time or vice versa, but she seems to get right in there.

I hope what will happen over the next little while is that some of the people who have some ideas in the health care system, rather than going on for a tremendous time about the problems, will enlighten us on some of the solutions, because that's the old politics. Anybody can stand up here and criticize. What we need are some solutions. I hope members on the other side, some of whom weren't here during my speech, will take it in that spirit and I hope all members will reflect. We've got a crisis, but we need to have solutions. We don't need more criticism. Quite frankly, we can get that from anybody.

Hon Ruth Grier (Minister of Health): I'd like to comment briefly, because I appreciated the remarks of the member for Halton Centre. I'd like to pick up on the fact that as she ended, she said we all recognize that there is a need for change. I'm glad to hear her say that, because there are times in this House when one gets the impression from the members opposite that they believe that everything was just fine in the health care system five years, 10 years ago, and that therefore we should not change anything. I think the member for Halton Centre was acknowledging that in fact over the past decade there have been numerous reports, analyses, committees, that have said it is necessary to reform our health care system.

She also spoke about the need to reform it in the context of a plan, and that is precisely what this government, from the beginning of its term, set out to do and is accomplishing. For the first time now, we have in this province a comprehensive vision of the kind of health care system we want to build. We have set out the goals that will take us towards that health care system.

What we have always lacked in this province are the tools to manage the health care system or in fact even to create a system which one then tries to manage, and that's what we're doing. Nobody before has ever had an agreement with the OMA, and regrettably, the agreement that was signed is one that gives us very slow time frames in which to change the system and manage it.

As a result of the fiscal constraints that this government is facing, we are working more quickly than I suspect we would have done were it not for this crisis, but we are not doing anything different from what we have recognized for many years needs to be done, that we've done very effectively with the hospital system and that we have to do with the system as a whole if we are to protect and preserve our cherished health care system.

Mr Stockwell: That speech may well have been given by Frank Miller maybe 10 years ago.

Hon Mrs Grier: Before or after he cut a hospital unilaterally?

Mr Stockwell: Oh, here we go with the minister talking about cutting hospitals. Only yesterday did you make the announcement that you yourself were going to make hospital cuts in Metropolitan Toronto. Don't shake your head. That's what you said. You're contemplating cuts in hospitals in Metropolitan Toronto, between one and 10.

When this party was in power in 1982, trying to take these apparent necessary steps, why was your party, in opposition, fighting it every step of the way? Why? Because when they were on this side of the House, they had no responsibility to the taxpayers, no responsibility for what they said, and they took no responsibility for the finances of this province.

Pardon me, Madam Minister, for standing up here and listening to what you say and reminding you of your checkered history when it comes to cost reductions, fiscal responsibility and hospital closings.

I myself no longer want to hear dissertations or lectures from this minister about fiscal responsibility and hospital closings, knowing your party's checkered past when any government tried to rein in costs on any program for any service in this province, because you opposed them every step of the way. In fact, every policy you undertook in opposition decried any government for not spending enough on everything. Pardon me, I'm as cynical as the population, because what you said is not what you're doing.

2110

Mr Cousens: It's as if the Liberals can come into the House and forget history. They're revisionists of the first order, because when you look at where they stood when they were in power, they had a tax-and-spend policy and they just plowed ahead in spite of all the warnings that the government and the people were not ready for the continued high spending habits of David Peterson and Bob Nixon. The highest budget ever in the province of Ontario before Floyd Laughren was the one brought in by Mr Nixon, and there were the 33 taxes that were brought in by the Liberals. The whole history of the Liberal Party in Ontario is one where, when they were in power, they did something quite different from now what their members would say they'd do when they were in opposition.

I just wish there was some kind of way in which we could cause the Liberal members to remember what it is they were a part of when they were in power. I realize the honourable member wasn't in cabinet at the time, so therefore wasn't totally responsible. The cabinet would come along and report what it was going to do and then like trained seals they would just clap and then support it. That's very much what's happening within a good part of the New Democratic caucus. Fortunately, there are a few people there who are waking up and breaking ranks and thinking for themselves.

But the true problem now in our province is that the Liberals have not come forward with any concrete resolutions or suggestions. They are standing up by themselves and just criticizing. They're not even prepared to give some credit where credit is due. It's so much easier just to keep slamming and criticizing and trying to tear down.

I believe we've got real problems to get this government to shape up and revise the legislation so that it's going to be something that is really going to meet the high intentions that it has talked of, but in the meantime, every person that's part and parcel of this Legislature has to contribute to the solution rather than the problem.

The Acting Speaker: The honourable member for Halton Centre has two minutes to make a response.

Mrs Sullivan: I want particularly to respond to the comments of the Minister of Health, because I think her remarks place a context that I was trying to bring forward in this debate.

She talked about a plan and the tools. I was addressing many of those issues. What concerns me, however, is that this government also talks about partnerships and its partners. I am very concerned that what it looks for and is demanding now is silent partners.

She talked about a plan that's in place, and indeed there is a framework that is a continuation of a framework for health care development that began, I think, to be implemented, not only by the last government but in certain instances by the government before that. However, I am deeply concerned that this plan is jeopardized by some of the actions that have been taken that are unilateral, that are arbitrary, that have taken place in the context of no consultation.

I am deeply concerned that ICES, as I have mentioned, and the work of ICES may be jeopardized by the antipathy and the antagonism and the unilateral decision-making of the government with respect to the OMA agreement and the expenditure controls, and the discussion and policy included in the bill.

The restructuring of our hospitals community: The minister made an announcement yesterday that involved the district health council, and that I applaud, because more than the Ministry of Health and bureaucrats are going to be at that table. I think that is a valid approach and it's one that should be emulated.

The decisions must not be made in isolation, however. They must not be made in an arbitrary fashion and that's what everyone in the health care sector is now objecting to.

The Acting Speaker: I would say to the honourable members that in regard to the two minutes that they have to make comments or questions --

Interjections.

The Acting Speaker: Order, please. I would say to the honourable members that in regard to the comments and questions period that we have after debate is given, focus should be placed upon the person who made the remarks in that half-hour preceding. Too often, what ends up happening is debate in the two minutes that are used by the honourable members. That's not the purpose of having this time. That's why it's called "questions and comments."

Further debate? The member for Dufferin-Peel.

Mr Tilson: This is the order for second reading of Bill 48, which I'd like to read to the members and those who are watching these proceedings. I'll read the title. It's called, "An Act to encourage negotiated settlements in the public sector to preserve jobs and services while managing reductions in expenditures and to provide for certain matters related to the Government's expenditure reduction program."

I think that when all of us listen to our constituents, no matter what political stripe we're of, all our constituents are saying that there is too much government, too much of everything. Do we need all the municipal government, provincial government, school board government, hydro government, federal government and all the many commissions and crown corporations we have that simply control our lives and give us all kinds of regulations, most of which we don't understand? The answer to that is no, we don't.

Having said that, I think we should applaud the government for at least making an effort to reverse that process. We, contrary to the Liberals -- because it's very easy. I found when I first came to this place, and still now, that the easiest thing in the world is to criticize. It's a piece of cake to criticize this government and it's a piece of cake to criticize this legislation. The Liberals are doing it, the last speaker did it, we do it and I think in your own caucus you're probably doing it yourselves.

The trick is to put forward an alternative, and that's what a proper opposition party should do, not only to provide criticism but to provide constructive criticism and an alternative plan. It has been reiterated as to what our plan is in the Progressive Conservative Party. It's been reiterated by several of our members and I will be doing that in the half-hour that I'm allowed to give the presentation.

Certainly, when you read the title alone, "An Act to encourage negotiated settlements," that isn't what the union leaders are saying. They're saying it's absolute blackmail. It's rather amazing for a party, the New Democratic Party, which in the past has been connected to the union movement -- many of you have been heads of various union groups -- and it's an astounding process. I don't even know what the words "social contract" mean, at least what your definition of "social contract" means. Obviously, I assume the word came from a French philosopher, but I somehow doubt that what you say is a social contract and what Mr Rousseau said was a social contract are the same thing, because what you're doing is that you're breaching the contracts of your various supporters.

Hard negotiating has been done through the unions and the business people to reach agreements for various benefits and various wage agreements, and yet you're going to say: "Sorry; we made a mistake. We gave you too much. We're out of control. We're going to have to open up the agreements or we're going to encourage you to a negotiated settlement and encourage you through the strong arm of the minister, the strong, dictatorial arm of the minister that's spelled out in such sections as section 11 and other sections of this bill." It's a dictatorial power which doesn't become the members of the New Democratic Party.

I feel sorry for you when you go on your weekend convention or your weekend session near Kingston. I wish you a lot of luck, because I cannot believe that the members of your party are going to support the views you're putting forward in this bill. It simply doesn't make sense from your own philosophy, and these are words from a Tory. I wish you well when you go to Kingston or Gananoque or wherever you're going to explain what you're doing with respect to this bill.

2120

I gather it said that if a couple of unions agree and they negotiate and the others don't, the Treasurer's going to say, "Sorry, I'm going to enforce a sector decision, notwithstanding that a couple of unions within that sector may have agreed to negotiate, open up an already negotiated contract." How preposterous. This is called a social contract. It simply baffles me that your principles are saying that you're going to open up contracts and roll back wages that have already been agreed to.

As I said initially, I support you. I support the members of the government in trying to cut back on government spending, government bureaucracy. You should be congratulated. But I don't think there's anyone who agrees with the methods you're following. You can pick up all kinds of editorials that compare public service wages and public service benefits to those in the private sector. I just pick one at random, the Financial Post, May 1993, which talks about Ontario taking the wrong course. This is mainly an editorial that deals with the taxes, but I'll tell you, it does get into the whole manner of public service wages and it supports, really, the philosophy that you're doing. You've got more support than you know out there, notwithstanding what's going to happen to you this weekend. It's just that you're going about it the wrong way.

Essentially, what this bill is going to do is it's going to give public sector workers and their employers until August 1 to cut the amazing amount of $2 billion from the provincial payroll, $2 billion from contracts that have already been negotiated, hard negotiations in good faith. You're going to breach the faith of your own members. You're going to breach your contacts. That's your definition of social contract. If you don't do that, the Treasurer's going to come across with a heavy hammer and he's going to tell you what you do. He's going to freeze wages and he's going to let employers impose something called 12 unpaid days off a year for each worker -- "wage pauses" or something similar. This is with people who have already got a contract. These measures would be retroactive to June 14 and would remain in place until March 31, 1996.

It's been predicted by the member for Markham, who is sitting here with us tonight, and I agree, that the $2 billion in savings is going to come back and haunt whatever government is sitting in this place, whatever government is running this place, in 1996. I really doubt it's going to be you. But whoever it is is going to have to pay the piper in 1996, so we all should be budgeting as to what's going to happen at that particular time, because the whole issue's going to flare up again. We're either going to have to extend the social contract or let public wages again go berserk.

I have indicated that a responsible opposition party should criticize the government. I believe we're doing that. As well, I think a responsible opposition government should provide an alternative. Our leader, Mr Harris, has indicated six points which he believes would be much superior to what this government is putting forward. He is suggesting that there be a series of amendments to this legislation. I hope that this test being put forward by our leader will be considered by your caucus -- I'm speaking of the New Democratic caucus -- when you meet in Gananoque this weekend.

I'm going to read those to you. I know that it has been said in the House, but I'd like to make it clear exactly what our alternative plan is.

First, Mr Harris is recommending a three-year hiring freeze, which has the potential to reduce the annual cost of the public sector compensation by over $2 billion in the third year.

As proposed, a second amendment would be there would be a public sector wage freeze that would commence on the anniversary date of all contracts and continue for a three-year period from that date. Don't break contracts. Don't break the hard-working contracts that many of you have probably been involved with in negotiating. Don't break those contracts. Mr Harris says to wait until the anniversary date of those contracts and then continue for a three-year period from that date. Be fair, be equitable.

You've got all these wonderful principles that you're coming out with: pay equity, employment equity. You're claiming that you're trying to be a fair party. You are not being fair to the public workers of this province. They've negotiated in good faith and you've broken their deal.

The third proposal that Mr Harris is putting forward would be whistle-blower provisions, which would protect public servants who report fraud, waste and other abuses from workplace retribution, while netting substantial additional savings.

One of the things that we hear in opposition of course is, "Don't make us lose jobs, don't cut back our wages, there's all kinds of other things that could be done," and various members in both the Liberal caucus and the Conservative caucus have given you all kinds of examples as to where there could be cost savings. Many of those are being made at the suggestions of civil servants, the very civil servants who assist us in running this place. Yet those civil servants fear retribution by this government, particularly in the stages of the social contract and the heavy, dictatorial arm of the Treasurer.

So Mr Harris says, let's have whistle-blower provisions to protect public servants who report fraud, waste and other abuses from workplace retribution while netting substantial additional savings. We hire these civil servants, we have the best civil service in this land and we should treat them fairly, not like you're proposing.

Fourthly, Mr Harris has suggested that there be provisions to discourage government departments from spending their entire budgets within the fiscal year, eliminating year-end burnoff, or face rollbacks.

That's been a philosophy that has existed in every government. Yes, it existed in Conservative governments, it existed in the Liberal government and now it's existing in your government, and there must be ways -- in other words, each ministry has a certain budget. That's the way the system goes. You've got to spend it because if you don't spend it you won't get it next year, and on and on. Every government seems to think like that, whether it be a municipal government, a school board government, a provincial government, and a federal government. All governments in this land think like that. So certainly we should encourage that type of provision to discourage government departments from spending their entire budgets. They don't need to do that. Budgets are guides and in many cases a higher figure is put in, but they find out they don't need it. Yet we find unbelievable government waste because of this on frivolous matters that we don't need.

Fifthly, Mr Harris is suggesting performance bonuses for public servants based on efficiencies and productive gains, similar to private sector agreements such as those involving the Canadian Auto Workers union. That's the way the system works. Someone does a good job, they should be paid accordingly, not automatic raises. In every government system we have you have these little grids, whether it be in the teachers, whether it be in the municipal area or whether it be in this area, provincial and federal. You automatically get it. It doesn't matter with respect to your capabilities.

What a strange system. If private enterprise did that many of them would have gone bankrupt a long time ago, and many of them are going bankrupt, not for that sort of practice but for other ways, and they've operated more efficiently than the government. One of the major flaws of public service, whether it be in education, whether it be in municipal or whether it be the various levels, including hospitals, is that you get these automatic raises, whereas in fact there should be performance bonuses for public servants based on efficiencies and productive gains.

2130

Finally, Mr Harris has suggested that there be the establishment of an expenditure review committee to identify non-productive government programs and prioritize existing programs, and I will say that whether we're looking at health cards, whether we're looking at the construction of Workers' Compensation Board buildings or whether we're looking at non-profit housing, the whole housing philosophy, these philosophies of this government have got completely out of control.

I have spent considerable time as one of the members of the standing committee on public accounts, and of course in that committee you do see more of waste than perhaps you do in other committees. There are other members in this House who are present here tonight who have sat on that committee as long as I, and they've noticed it as well.

I can tell you that this proposal of Mr Harris is a good one because there is unbelievable waste. Are we going to take the attitude we can't do anything about it? You can do things about it, and Mr Harris has put forward a constructive proposal.

I will say that our party has been very critical of the Liberal Party. Speaker after speaker stands up and criticizes it, and certainly, sure, the last speaker talked about the criticism with respect to the health services. That got the Minister of Health all upset and there was a banter back and forth there. But the fact of the matter is, our health services are not going to be as good as they were because of this contract, the services that are not going to be provided.

The critic for the Liberal Party did an excellent job in expressing the concerns of the health system and where we're going, and I'm not going to do that. But my criticism of her -- and I'm not going to pick on her, I'm going to pick on all members of the Liberal Party: They don't have an alternative. I don't hear one constructive alternative to the criticisms they are putting forward. We can all make these criticisms, but we must be able to put forward constructive alternatives, and they're not happening.

This legislation, of course, the history of it, we think it's moved along fairly quickly. The legislation has been introduced just recently and a copy of the bill, of course, was just recently made available. There hasn't been a great deal of time to follow the process properly. It's a process that appeared to start in the latter weeks of March and finally collapsed with the union leaders walking out and singing "Solidarity Forever" on June 3, at which time, with less than 24 hours to go from the line in the water, all 28 members of the public sector union coalition rejected the government's final offer.

Now, of course, as a result of that, a bill has been introduced called "an act to encourage negotiated settlements." It's not the negotiations that I think the union movement is used to in this province or in this country, or anywhere in the world. What a strange way to encourage settlements in the public sector, or indeed any sector. I don't wonder that there are people in this caucus who are threatening -- it must be very uneasy for you, because you have followed this movement more closely than I. You've been involved in it.

One of the ministers has resigned her post. I don't know what she's going to do with the voting, whether she's going to show up in the House to vote. We hear of other people indicating they're going to vote against it and all kinds of exciting rumours, and I wish you well in your deliberations. I can just simply tell you that you're making wrong decisions and you should reconsider and you should listen to your members this weekend.

Certainly as well as locking up wages for the next three years, the provincial legislation which was tabled, I believe, on Monday would stop all merit increases, all cost-of-living increases and all pay hikes resulting from moving up a seniority grid.

A couple of interesting things there, of course, and I'd like to refer to section 11. One of the subsections, subsection 11(3)3 said, "The plan will not adversely affect employees in the sector who work full time and who earn less than $30,000 annually," and that's been the spin that's been put on by the Treasurer and the Premier and other members of the New Democratic caucus, who say, "It won't affect people who make under $30,000."

But the section then goes on, because it qualifies that. That amount excludes overtime pay "or employees who work part-time if their full-time equivalent earnings would be less than $30,000 annually, excluding overtime pay."

So there's no limit. The limit that's been suggested of $30,000 is fallacious. There's no limit. It's a farce and it's going after all kinds of people. It's going after us all. The Treasurer is now telling us that as elected officials, we don't work for the people of this province, we work for him. He's the one who's going to tell us. He alone is going to tell the people of this province what members of this Legislature should be paid, who haven't received a raise in three years.

I believe, of course, that we should all be treated the same. Whether it be members of the Legislature, whether it be members on council, whether it be members who dig ditches, whether it be people who work in the health sector, we should all be treated the same, and that's been the problem. This paragraph in section 11, of course, purports to say, "Well, it won't include people who earn less than $30,000," except that excludes overtime pay for "employees who work part-time if their full-time equivalent earnings would be less than $30,000 annually, excluding overtime pay."

Of course, the whole issue of section 11 -- it is a rather remarkable section. It gives amazing powers to the Treasurer of this province, powers that we as legislators should be very, very concerned with. Why should one man have all this power? The section says that, "The minister may designate, as a sectoral framework, a plan that relates to a sector," and subsection 11(3) says, "The minister shall not designate a plan as a sectoral framework unless" -- and then the words are said -- "in the opinion of the minister...."

In the opinion of the minister, in his opinion alone, he's going to decide the terms of the social contract that will be legislated on us all, all of us who are public servants of this province. The Minister of Finance is going to make that decision; not we as legislators, the minister alone, "unless...the plan meets the following criteria."

The first one is a rather subjective test. It says, There must be "sufficient support for the plan, based on negotiations leading to the development of the plan, for the plan to form the basis for local agreements in the sector." Of course, that's in the opinion of the minister. He's the one who's going to decide. It's not going to be a committee or a commission; it's going to be him. He's going to bang his heavy arm on the table and decide what the public workers of this province are going to receive.

He says, "The plan includes provisions that will assist employers in the sector in achieving the expenditure reduction target established by the minister for the sector." Then paragraph 3, which I have just referred to, and paragraph 4 in subsection (3) says, "The plan contains appropriate provisions to minimize job losses in the sector, appropriate provisions respecting the redeployment of employees in the sector" -- this is amazing stuff and it's going to be at his sole discretion -- "who are released from employment or who receive notice that they will be released from employment, and appropriate provisions relating to employee training and adjustment programs."

The most amazing subsection in this section 11 is subsection (4). "Subsection (3) does not apply to a plan if" -- and again these wonderful words: "in the opinion of the minister." It's in his absolute discretion, paragraph 3. That's the one about it not applying to people under $30,000, excluding overtime pay. "Subsection (3) does not apply to a plan if, in the opinion of the minister, special circumstances apply and it is desirable to designate the plan as a sectoral framework."

What funny words. I don't even know what it means. I have no idea what it means and I challenge the members of this government to tell me what that means. It could mean anything. It certainly gives unbelievable dictatorial powers to the Treasurer. We know that, because it's in his sole discretion, but we don't even know how his discretion is going to be exercised. We have no idea how it's going to be exercised.

2140

Then I'd like to give a couple of inequities that have been quoted in the press. We really haven't had time to properly analyse this bill. Most of us have read the bill, I hope; most of us have read the bill and we've had some analysis. There's been a bit of comment in the press, but we really haven't had a great deal of time, and that troubles me.

The Toronto Star, June 16, commented on problems with respect to pensions and wages, and I'm going to read from that. As I'm reading, I'd like you to think of these new pieces of legislation such as pay equity, how we're unfair to certain people, mainly women. I'd like you to think about that bill and a few other pieces of legislation: employment equity, where we're unfair to certain people and these pieces of legislation are going to correct that at great expense, at great expense to the people of this province and at great expense to the public servants, who not only are going to have their wages frozen but, I predict, there will be unbelievable job losses.

For example, "Particularly burdened are the people just entering a public service job and those on the verge of retirement." In other words, the people at the opposite ends of employment.

"For example, a high school teacher fresh out of college and starting work for the Metropolitan Toronto Board of Education would earn about $31,000 in September. That's the starting rate.

"In the third year, that teacher would normally be earning $35,000, after climbing the seniority grid outlined in the union's collective agreement.

"But under the new act, the teacher would still be on the first rung of the seniority ladder, representing a loss of $4,000 in the third year alone."

Lots of people love to take shots at teachers. They say they're overpaid. Some of them are, some of them aren't. We have some excellent teachers in this province, but there's no question that this is not fair, because all these teachers have contracts and you're going to open them up. You're going to open them up and say: "The Treasurer's going to tell you what you're supposed to get."

The article goes on: "People on the verge of retirement are also being targeted for increased pain.

"A high school teacher's pension level is calculated according to his or her top five years of earnings. Usually, the best five years are a person's last -- that's when they're at the top of the seniority scale and get maximum benefit from whatever wage gains are won in contract bargaining."

This article was written by Leslie Papp of the Toronto Star, but the comparison's been made in several newspapers around the province.

"With wage gains frozen for the next three years, 58- or 59-year-old teachers are finding that pay for their last five years won't be as high as might be expected. Worst of all, that translates into reduced pension income -- a loss they'll feel for years to come."

Again, this party, this New Democratic Party, boasts of how it's going to make this province a more equitable place. They have talked about employment equity, they've talked about pay equity, the theories behind which may or may not be good things, and those should be debated at another time. The fact of the matter is that the teachers alone are being treated unfairly, the new teachers and the teachers who are on the verge of retirement. Notwithstanding whether or not you want to take any shots at the teaching community, just remember that you're creating inequities that you shouldn't be.

The article goes on: "Employees must learn to adjust their expectations, says one of the government's social contract negotiators. There won't be a rollback in anyone's pension income, he said" -- well, that's a relief to many people, although I'll tell you, with the provisions in this bill I don't trust it; that's what someone has said, but I'm very suspicious of the unbelievable powers that the Treasurer has, and anything's possible -- "adding that expecting more, due to wage hikes, 'is kind of like counting your chickens before they hatch.'

"Union leaders say they could live with a straightforward wage freeze. 'But this legislation goes far beyond that,' says Liz Barkley, head of the 46,000-member Ontario Secondary School Teachers' Federation.

"There hasn't been legislation like this in the history of pay freezes in Canada."

This by a New Democratic government. You should be ashamed of yourselves. I'm quoting Liz Barkley, but there are all kinds of union leaders who are going to be down in Gananoque and they're going to be saying some wonderful things to you which you should listen to.

I'm continuing with this article, and it's typical of many articles that have been written recently.

"What pains labour is that existing, hard-won collective agreements must be pried open to remove gains like progression up a seniority ladder."

That's my concern. We're breaking contracts, a social contract that breaks contracts, and that's a terrible thing.

Mr Callahan: I would like to address the issue stated by the member who was previously speaking, the member for Halton-Peel, I think it is.

The dictatorial powers in this act -- and I hope the members of the government have read it, because it is truly the most undemocratic piece of legislation I've ever seen in my life.

Mr Cousens: He's not talking about the speech.

Mr Callahan: I certainly am. He was talking about the dictatorial powers. If you refer to section 47 of the act, I suggest to you, the powers are invested in the Minister of Finance, the Minister of Finance can delegate to somebody else, that person can delegate to somebody else -- you could in fact have the most menial person down the line calling the shots on the employees of this great province.

I'll tell you something. If I were representing any one of them, or if in fact I were one of those employees, I'd be scared out of my mind, because the powers here are not democratic. They're not going to withstand any constitutional challenge, and you're really wasting your time passing it. In fact, all you're doing is that you're going to incur a very large legal bill for some lawyer who is going to take it on a challenge. In the meantime, we'll be left in the dark as to exactly what this bill means and we'll be still in a total situation of chaos.

I suggest to the Conservative Party that as long as this government is in power, this entire province is in chaos. Let's get on with the day. Let's get this government out of here. That's what I'm told. That's what I'm asked by every person who meets me on the street: "How do you get rid of this government?" That's the watchword. There isn't a person in this province who has anything good to say about your government. They want an election.

If the Minister of Finance can't handle the government and the Premier of the day can't handle the government, let's call an election. Give somebody else a chance to do it. Get out of power. If you can't handle it, get out of the kitchen.

Mr Stockwell: I'd like to make a question or comment, but before I do, I think I'd like a quorum.

The Acting Speaker: Is there a quorum present, please?

Clerk Assistant and Clerk of Committees (Ms Deborah Deller): A quorum is not present, Speaker.

The Acting Speaker ordered the bells rung.

The Acting Speaker: A quorum now is present. Questions or comments?

2150

Mr Stockwell: I think the social contract is something that needs to be debated. I also think a quorum should be present when we're debating something as important as this.

I will comment on the member for Dufferin-Peel's latest comments about the social contract. He has obviously given this much thought.

There is some concern out there with respect to the public service unions, concern that I think is probably reasonably founded. This government has in fact betrayed, I think -- no, I don't think that; they have in fact betrayed people on a number of occasions since their election. They are asking that the social contract be put in place with a certain degree of trust, a trust with their partners from the hospital boards, the schools, the municipalities and right through the whole process.

The problem is that very few people who are your partners, very few people in the private or public sectors, trust you any more, regardless of what you say. You've broken practically every tenet that you campaigned on. You have no belief -- there's no credibility attached to your statements.

Mr Rae can stand up here today and talk about deficits and billions of dollars. Where was this created from? It was created from this government's previous two years of fiscal mismanagement. It's like I said today; it's like he's been visited by three ghosts two months ago -- fiscal past, fiscal present and fiscal future -- and all of a sudden he's been converted. He's converted into a right-wing capitalist, reserve-oriented person who I think is shocking not only to the unions but to his own cabinet and caucus.

I look across the floor and I'm absolutely astounded that people like Bob Mackenzie and Frances Lankin can be supporting this kind of legislation. How can they be supporting this kind of legislation? These are the kinds of things they spent their lives building up. These collective agreements they've spent their lives negotiating for. If any government were in fact trying to put this in place if they were in opposition, you'd be peeling them from the ceilings of Queen's Park. I'm very disappointed.

The Acting Speaker (Mr Noble Villeneuve): Further questions and/or comments. The honourable member for Markham.

Mr Cousens: When the member for Dufferin-Peel speaks, he always brings something to the table that this House should stop and listen to. I listened very carefully to what the member said and I just want to thank him for representing the people of his riding as well as he does.

I think it's very, very difficult to take the kind of position he was presenting this evening, difficult because, on the one hand, like the Liberals, you'd be inclined to disagree with everything the New Democrats are doing. That would be the very easy thing to do because there's been so much they've done that's just been wrong for the province. Bill 40 is something that, when our party is in power, we will revoke and we will democratize the unions. When we take power, there's going to be a great deal to do to try to unscramble this egg that has been so shattered and changed around by this government.

Notwithstanding the contempt one can feel for what the New Democrats have been doing: their spending spree, their social spending, the way they're expanding their ministries. When Bob Rae says he's going to reduce the number of ministries it adds up to more than there were before. When you start learning about the number of staff in the Ministry of Education and Training now -- apparently there are 40 people within that ministry's staff. So on the one hand they're saying, "We're going to cut back," but on the other they're just continuing to add and add and add. They don't know the arithmetic of what it takes to run a good business because most of them have never run a business.

I wanted to just take a moment and compliment the member for Dufferin-Peel for the kind of leadership position he's presenting, the carefully reasoned arguments, which -- as difficult as it might be to accept the fact that the NDP's intentions are right, it's only correct and responsible opposition to find the good things and where possible find a way in which you are able to support it. Not to do so would be --

The Acting Speaker: Thank you.

Mr Cousens: Not to do so is the kind of thing --

The Acting Speaker: I want to thank the honourable member for Markham. We can accommodate one final participant, the honourable member for York Mills.

Mr Turnbull: As usual, my friend the member for Dufferin-Peel has brought a cogent aspect to this debate. He has read the bill thoroughly and, as he says so well, they doesn't know what it means. I suspect that the Minister of Labour doesn't know what it means either because, quite clearly, the Minister of Labour has been fighting against this kind of legislation all of his life, and now suddenly, at this late stage, he has forgotten about what he's been saying over the years. I suppose amnesia has set in. He doesn't mind the fact that they're stripping the rights of the workers. What a strange legacy this minister is going to leave. He's going to leave office, when they're finally kicked out at the end of this session, with nothing better to show than this bill that strips the rights of workers, which nobody can even understand fully, because there are so many things that are open-ended and they won't answer the questions.

When we talk to them about problems we have, they have no answers, they have no responses; they've only got rhetoric. We have asked legitimate questions. We've pointed out that a lot of the numbers they're using are simply incorrect, they're a flight of fantasy, yet what do they respond with? More rhetoric, no facts, no understanding of what their own bill is. If they cannot write a piece of legislation that is better than this, they should resign right now, call an election and let the people of Ontario pass judgement on this government and this Minister of Labour as to what they think of what he is doing, for stripping the rights of workers of Ontario.

The Acting Speaker: The honourable member for Dufferin-Peel has two minutes in response.

Mr Tilson: I'd like to thank all of the four members who spoke, the members for Markham, Etobicoke West, Brampton South and York Mills, on adding to my comments.

I guess I'd like to summarize that we do encourage restraint, we do encourage the effort that's being made by this government with respect to this bill, because we do have too much government in this province, too much government in this country, municipalities, school boards etc.

The problem is there is no long-term restructuring or downsizing. That's one of the major criticisms that we in the Progressive Conservative Party have with respect to this government. It's a temporary fix, and then we're going to have to pay for it. We're going to have to pay for it in 1996, whoever's in. It may be you but somehow I doubt it. I'll tell you, it's going to be a very difficult time, because we're postponing a problem for three years. So I would suggest that the government go away and again think it out with respect to the issue of restructuring or downsizing.

I think the more difficult issue is the fact that in the middle of agreements, in the middle of contracts, the definition of "social contract" is to break existing contracts. Mike Harris suggests and our Progressive Conservative Party suggests that if you're going to do anything with respect to public service employees, that should be done on the anniversary of the agreement, not during the agreement. Again I emphasize, you people should be ashamed if you're going to support that principle, because I know it's a principle that none of you have supported either in this place or prior to coming to this place.

Mr Cousens: They've never had principles.

Mr Tilson: They've got some principles, and that's one principle that they're breaking and it's one of the main principles that they're breaking. You're going to have an awful time explaining it to your supporters.

Mr Perruzza: Thank you for this opportunity to be able to participate in this social contract legislation debate.

The Liberal member for Brampton South asked a probing question just a few short minutes ago and said quite flatly that nobody understands what the social contract is all about. Well, I'll try to explain to him and to some others in this House what the social contract is all about.

The social contract in fact reduces the public payroll by $2 billion. That means anyone who works for government, anyone who works for municipalities, anyone who works for school boards, anyone who works for any agency, board and commission of the government would contribute, and collectively that large group of people would contribute in salaries, in payments, $2 billion to the social contract so the government spends less money.

2200

Quite contrary to what some of my Liberal friends and some of my Conservative friends have said as well, I see the social contract as simply one more step in getting the financial house of the provincial government in order.

I'd just like to go back a little bit. As you will know, Mr Speaker, in 1990, when the New Democratic Party took office in this province, we were promised, essentially, by the then Liberal government, the Peterson Liberal government, that we would find at fiscal year-end -- that is on March 31, 1991 -- a $39-million surplus. But what we in fact found was a financial mess. Things were so chaotic that according to the auditor -- the auditor, not us, because many of our friends will disagree on this particular --

The Acting Speaker: Order, please. On a point of order, the member for Brampton South.

Mr Callahan: Mr Speaker, the member is being very eloquent but totally inaccurate. I would suggest that it is totally inappropriate to mislead the House in terms of saying those things --

The Acting Speaker: Order. This particular type of language is not acceptable. Would the honourable member please reconsider.

Mr Callahan: I will reconsider. They're prevaricating, Mr Speaker.

The Acting Speaker: This is not acceptable either. The member for Brampton South knows that.

Mr Callahan: Mr Speaker, how do I put it? I will withdraw anything that's offensive because as an honourable member --

The Acting Speaker: Please. Thank you. You've withdrawn.

Mr Callahan: But how do you tell him that he's wrong?

The Acting Speaker: Thank you. You've withdrawn. The honourable member for Downsview.

Mr Perruzza: The reason I pointed to the auditor's conclusion is because I expected and suspected that my Liberal friends -- while they were telling everyone that there would be a surplus, there was a deficit. The Provincial Auditor attests to the fact that there was a $3-billion deficit when we took office, when we finally were able to wrestle the keys of office from our Liberal friends.

There was a massive slide in this province. As you will know, we were in the middle and confronting one of the worst recessions in the history of Ontario, certainly in my lifetime. So if you're a New Democrat, what do you do? Ask yourself the question, what do you do in the face of such bad times, in the face of such a massive slide?

We don't have to go through the litany, through all the programs that essentially brought the downfall, brought the recession. We don't have to go through the high interest rate policy of the Conservatives, the free trade policy of the Conservatives, the tax-and-spend policies of the former Liberals here in the province of Ontario. We don't have to go through that. Suffice it to say, and every Ontarian knows, that we were entering one of the worst recessions of our time.

I'll tell you what a New Democrat does in the face of all that. What a New Democrat does is to fight like heck to preserve essential services. You fight like heck to preserve essential services: to preserve medicare, to preserve education services, to preserve social services, to preserve community services. These are the kinds of things that are essential and fundamental and have come to be desired and wanted by every member of our constituencies. That's what a New Democrat does and that's precisely the road we embarked on; that's precisely what we did.

You will recall that health care under our Liberal friends was increasing at a double-digit rate of inflation year after year, 9%, 10, 11%, 12%, year after year. In fact, if you looked at health care, pretty soon it would occupy almost 50% of the entire provincial budget. We wrestled that monster to the ground, and you will know that this year we have one of the lowest increases in health care spending of any time of any government. That's quite an achievement in itself.

You will also know that during the heyday of the Liberals in Ontario -- I guess one of the other fundamental ills that we faced during this massive slide in the economy, during this time when we recorded enormous unemployment levels which we as New Democrats quite frankly can't tolerate -- we have been, from day one, investing major capital dollars in job creation. I think our good friends across the way will attest to the fact that the Jobs Ontario Training fund has done just that, has created jobs. The Jobs Ontario Capital fund: Just today I was in Cobourg opening a new OPP detachment, a major capital investment which will create jobs. That's part of a much bigger fund of a total of $3.3 billion. That's what we've been doing.

I have to tell you that the other ill that we faced, as you and every Ontarian will know, is that in the heyday of the Liberals hydro rates increased to the tune of double digits year after year. My Liberal and Conservative friends will tell you that if this trend had been allowed to continue, this trend would have rendered Ontario business uncompetitive. It would have been a direct deterrent to capital investment in this province.

Along with these major cost-saving measures -- bringing Ontario Hydro to a more reasonable level, bringing health care spending to a far more reasonable level -- we have also this year delayered government programs to the tune of $4 billion. That means that Ontarians will be paying $4 billion less for, in many cases, redundant programs, programs which had essentially outlived their usefulness.

If you're a New Democrat in tough times, what do you do? I'll tell you what you do.

(1) You do the kinds of things that will preserve key essential services that every Ontarian has come to rely on.

(2) You invest in job creation programs. That's precisely what this government has done, invested in job creation programs.

(3) You do the kinds of things that render Ontario competitive. You downsize and you reduce the costs of hydro, for example.

Along with all that, you do the social contract, because when you look at the reality of Ontario and when you look at what has happened in the private sector, when you look at the job losses, when you look at what people out there in the private sector are working for today, it bears no relation to what they were working for two, three and four years ago. I know, and I will tell you, that in my own community of Downsview bricklayers who were earning $21, $22 or $23 an hour back in 1988-89, today, if they are lucky to find work, if they are lucky to have work, and many of whom work on government-funded projects -- housing projects, and as I stated earlier, OPP detachment projects, direct investments that this government is making in improving infrastructure -- you will find that in most cases they are working for $10, $11, $12 and $13 an hour. That's an incredible cut in pay.

It's a hard thing for a New Democrat to sit here and say, "Gee, we've got to share the pain." We're going to have to cut across the board and share the pain. It would be wonderful not only to be able to stand here and say, "Not only should we protect public service wages," because that would be a wonderful thing, but to say: "We should keep the public service where it is. Let's bring everybody else out there in line with what the public service is getting." I'd be for that. I'm sure that every other New Democrat would be for that. I'm sure that every Conservative --

Hon Mr Pouliot: That's going too far. Mr Turnbull wouldn't.

Mr Perruzza: Well, maybe not every Conservative would be for that, and maybe not every Liberal would be for that either, but I'm sure you would find a few who would certainly be for that. We could probably put together enough of a coalition here to ensure that happens. But that's not what is happening in the real world out there. There's no question it's a difficult thing to say to government workers, "We're going to have to reduce the government payroll by $2 billion." It's a difficult thing, there's no question about it. Many people in this place, certainly many New Democrats in this place, will agree to that fact. But I believe that's essential for the eventual prosperity of this province, because there's no question that we can't live beyond our means.

2210

We all know that you can't simply go to taxes all the time. You can't do the kind of thing the Liberals did when they were in office in good times. They needed more money; they went to more taxes. They were getting more money because of good times; they went to more taxes. We don't believe you can do that, because there's a limit.

What do you do to protect and preserve essential services? You wrestle down how much you can spend without greatly impacting services at street level, where people use the most.

I'm not going to speak for much longer, but I want to allude to a comment the member for Brampton South made earlier. In pompous Conservative style, he stood in his place lambasting us for having the courage to tackle the problems of today, today, not leaving them till tomorrow but tackling them today.

Yes, in the middle of all of those problems, we're even dealing with the problem of the Dome debt. We all know the debt the Liberals saddled us with. We're trying to grapple with that problem as well.

I want to go back to a comment my Conservative colleague made but a few moments ago in his pompous Conservative style. He stood in his place -- you and I witnessed him together -- and he yelled across the floor, "In 1995, we're gonna to be there and we're gonna to do this and we're gonna do that." But you know what? He may very well be here in 1995 in government. I don't know. I know that as New Democrats we're going to fight like heck to keep him out because we know what he will do and what they would do to the social fabric of this province.

That's going to be up to the people of the province of Ontario, and the people of the province of Ontario may in fact give him an opportunity. But if that sad day should befall the province of Ontario, we will not hand over to them the keys that they handed over to us, we will not hand over to them the mess they handed over to us; we will hand them over a financial house in order in the government of Ontario.

Mr Gerry Phillips (Scarborough-Agincourt): I think the viewers can probably realize why we're in such a mess when they hear such a confused, almost unintelligible argument on the bill.

What has happened is that the government -- you can remember two years ago, this was a government that was going to spend its way out of the recession -- ran up a deficit that was unbelievable, $10 billion.

Everyone told them they were wrong. The Conservative Party, our party, everyone told them they were wrong. You got this province into one heck of a mess and now everyone in this province is going to pay the price to try and get out of the mess.

I'll tell you what you're going to leave the province. The member said he's going to leave the province with the finances in order. What you're going to leave the province is the worst employment record we've ever seen in this province. It is a disgrace. I will say it to all of us: I don't know how the New Democratic caucus can live with this chart, unemployment rate at 14% in 1993 in this province, never getting below 12%. It is an absolute disgrace, and why? Because the NDP government, led by Bob Rae, has mismanaged the economy.

They'll say it's free trade and all those things, but when you came into government, Ontario had the lowest unemployment rate in the country. Now you will find that Manitoba, Saskatchewan, Alberta and British Columbia all have dramatically lower rates. No one has ever seen a record like this, where we have gone from 6% unemployment to 14% unemployment, and then the government has the nerve to say that its plans are going to lead to 13% unemployment by 1995. I say to all of us, we can't live with that and you should be ashamed of yourselves.

Mr Tilson: The member for Downsview has given us a lot of answers this evening, but I think the member for Scarborough-Agincourt has put his finger on a question that many of us are asking, many of us in the opposition, many of the media, and many of the unions are asking the same question. We know you're opening contracts, we know you're rolling back wages, we know you're not having any long-term downsizing or restructuring. We know you've broken your word; in other words, that you've broken contracts, opened up contracts, contracts that have been negotiated in good faith.

We know all of that, and as I said in my comments, I think the most dastardly of all the things your government is doing is that you're breaking your word. You entered into contracts in good faith. All the many contracts in the civil service unions and the public sectors, whether it be school boards; every last one of them was negotiated and bargained in good faith by both sides, and the Treasurer is unilaterally breaking his word and simply, instead of waiting till the anniversary date, he's starting in the middle of those contracts and just ripping them up in his dictatorial fashion.

The question I have for the member is a question that the member from Agincourt started on, and that has to do with section 7, which is a very general section. It says, "The minister shall establish expenditure reduction targets for sectors and for employers." I don't know what that means.

You have a lot of answers in your comments. I'd like you to tell me what that means. I think the real unknown of this legislation is, how many people will be laid off? How many people in the civil service, to reach the targets that are set forth by section 7 and many of the other sections, how many employees are going to lose their jobs; not just have their wages frozen but lose their jobs?

Mr Gilles Bisson (Cochrane South): I'd just like to comment on the speech of the member for Downsview with regard to the social contract.

The member touched one of the points that really is quite telling with regard to what's happening today in Ontario 1993, and that is basically how we find ourselves in the situation we're in right now. The member pointed out quite clearly that where we are right now is because of what's happened in the economy, that the government is having to adjust expenditures in order to keep in touch with what's happening in the economy around us.

But what's also important is what the member signalled, which is that one of the difficulties you have dealing with an issue like this is that a lot of people could take advantage of the situation politically, and I think we're seeing a little bit of that happening on the part of the opposition and, quite frankly, sometimes on the part of the media.

With regard to not really getting people to the table in terms of understanding what the problem is, I would urge members of the opposition and others to, yes, have a real debate about this, and yes, talk about the issues, but try to stay away from some of the strong rhetoric we hear out there that ends up scaring people away from the table and at the same time scares people about their jobs.

I've been talking to people in my community, both within unions and within management. I know that the Liberal leader, Mrs McLeod, sent a fax to all the communities almost across Ontario, because I know the city of Timmins got one today, and the document talked about some quite erroneous facts in regard to the social contract. I'll bring those into the House next week and I'll talk about that in a little more detail. I know of another fax that went out by the Leader of the Opposition to other people within municipalities the same way.

I think we need to stick to the facts. We need to understand that we are where we are now because of a number of reasons: yes, because of free trade, yes, because of the world economy, yes, because of mechanization in the workplace. It is a jobless problem that we have, and with fewer people out there working, governments have less revenue, and when you have less revenue, you have to be able to adjust your spending. I think the member spoke on that quite eloquently and I would urge all members to try to take the same tack.

2220

The Acting Speaker: We can accommodate one final participant. The member from Brampton South.

Mr Callahan: I listened very intently, and it's obvious that the member who spoke first was not talking about the legislation; he was talking about the social contract. There's no question that we all recognize that the expenditures in this province have got to the point where the public has to be rescued, but I challenge you to read the legislation. This legislation in fact takes the power out of all of your hands. It puts it in the hands of one person, the Minister of Finance, and the Minister of Finance doesn't even have to do it; he can delegate it to anybody he likes. Even the cabinet doesn't have control over this. The Minister of Finance is the guy in the cat seat, and if you people are going to simply give to the Minister of Finance the entire rights to do this, well, then, why don't all you guys go home and we'll save the money on your legislative emoluments, if that's the kind of stuff you're prepared to do?

In addition to that, there's an act in Ontario called the Statutory Powers Procedure Act. That makes certain that everything is done fairly. That is eliminated from this bill. I urge anybody who's got eyes to read and any intelligence to look at this act and recognize the fact that this is giving dictatorial powers to the Minister of Finance. You people are all unnecessary. He can do what he likes, when he likes, how he likes and wherever he likes. The cabinet can do whatever it likes. Now, if you're prepared to give that kind of power over the workers of this province, then I'm not prepared to participate in that type of a conspiracy, and that's precisely what it is. Every one of you people who purport to be New Democrats who are looking after the affairs of the people and the workers of this province, you're letting them down. You're collecting your money under false pretences. You don't deserve to sit in this House. Get your people and look at a bill that's fair, that's going to deal with these people fairly or try to negotiate with them fairly. Don't try to shove some type of doctrine down their throat.

The Acting Speaker: The honourable member for Downsview has two minutes in response.

Mr Perruzza: Quite frankly, I didn't expect much more from the opposition because, back in 1990, I guess, before the provincial election, they must have had some foresight. They must have. They must have known and seen that the Conservative GST was on its way, free trade was on its way. So they decided to call an election two years too early, because they knew what the unemployment picture was going to look like later that year. They must have had some sense of what the financial picture was going to look like later that year. Otherwise, they wouldn't have called an election two years early.

So, to respond very directly to the member from Scarborough-Agincourt when he stands up and he filibusters about unemployment, I don't accept the unemployment levels the way they are and I don't think that any New Democrat on this side of the House accepts where unemployment is. That's precisely why we have made major, major efforts to redirect major capital resources to job creation. In fact, if he reads the budget document, he will find that in the last year alone we created over 95,000 jobs. Is that enough? No, it's not enough, because during the first little while of free trade and during the first little while of the GST, we lost close to 400,000 jobs. So certainly it's not enough, and unemployment isn't coming down enough, but we're doing our best. We're doing our darnedest to ensure that employment gets right up there. They will know that the Jobs Ontario Training fund, for example, has employed close to 25,000 people. Is it enough? No. We're going to do more and we're going to do better. You just watch and learn.

The Acting Speaker: On a point of order, the member for Etobicoke West.

Mr Stockwell: I would like to move unanimous consent to allow the member for Downsview to speak again.

The Acting Speaker: Do we have unanimous consent?

Mr Joseph Cordiano (Lawrence): No, no, no, Mr Speaker.

The Acting Speaker: No. We don't have unanimous consent for the member for Downsview.

On a point of order, the member for Halton Centre.

Mrs Sullivan: Before my colleague begins to speak, in my remarks I used a figure with respect to the expenditure cutback plan for long-term care, public health service and so on that was incorrect. I want to correct the record and indicate to the House that the figure that I should have used was $100 million, which are included in the expenditure cutback plan.

The Acting Speaker: I wish to thank the honourable member for correcting the record. The honourable member for Lawrence.

Mr Cordiano: I did not wish to grant unanimous consent for a continuation of that Gettysburg Address because we still are in what I would consider prime time and that would certainly be more embarrassing for all of us and I wanted to cut it off right there.

Let me start off, and I will try not to be inflammatory, as much as this debate is pointed and there are polarized positions. But let me try and go back to the reasons why -- and I think it's very, very important to understand how and why we have arrived at the point we now find ourselves. It's important because, quite frankly, there's a misunderstanding and a misconception at least in two parties of this House and, as I understand it, the Tories on second reading are supportive of this legislation.

I would say to them that there's luckily an opportunity for you to vote against this legislation on third reading and I think after you examine this bill as closely as we have in our party, you will find it unsupportable, that in the end I am sure that if the Tories realize what they're dealing with, will not support this legislation, because I can't believe that the third party, the Conservative Party, in the end would support what amounts to a series of initiatives which, by implication, would have them support the entire government's fiscal policy, including its tax increase in its latest budget proposal, because as a result of their mismanagement of the fiscal reins in this province we now find ourselves in this particular position of difficulty. It is precisely because they have mismanaged and precisely because after almost three years of governance we've arrived at this crucial and critical point in the history of our province.

Many speakers on that side of the House, the government side, have commented on budgetary initiatives and what they thought they had to do three years ago, and the previous speaker elaborated on this. I will not go into much detail on that, but he talked about the very difficult crisis that this government found itself in, facing a difficult recession, which I believe we still are in in this province. The signs of recovery simply aren't there to indicate to me that we are coming out of that deep recession. Perhaps we have some form of recovery in certain sectors of the economy, but certainly we don't feel that with job creation.

The member for Scarborough-Agincourt, our critic for Finance, has pointed out repeatedly and my leader has pointed out that job creation simply is not taking place in the economy, that there's no confidence in the ability of this government not only to create jobs but to allow for an economic climate which is self-sustaining, and job creation becomes a natural consequence of that.

That's the important point, that initially this government undertook a huge expenditure program to take us out of a recession which was happening worldwide and that in fact it spent to the tune of a $10-billion deficit when many people had been critical of that, had forewarned them, had advised them that they were leading down a terrible and destructive path, that in the end it would lead to this deficit wall, that we would reach the saturation point. Many people warned them of that. We told them that; the Conservatives told them that; other observers told them that. It took three years, three budgets, for them to finally realize the error of their ways.

2230

I say that because it's important to understand that if you believed initially that you could fight this recession, this deep restructuring of the economy, by spending your way out of it to stimulate the economy, you misunderstood the signals, you misunderstood the nature of this recession. You misunderstood in a management way what the deepening of the crisis really meant to this province, that in fact restructuring was taking place in the economy. Instead of understanding that, this government spent in traditional ways, or attempted to. It increased expenditures at an enormous rate.

Let me just highlight some of those expenditures this government undertook back in those days, which we pointed out were terrible errors. We repeatedly suggested to the government that it would lead to these problems. They negotiated a 14% raise in salaries in 1991 for OPSEU, costing the taxpayers over half a billion dollars annually. They negotiated increases in doctors' fees totalling $512 million over three years. They failed to implement a strategic cost reduction at that time. If they understood that the economy overall needed to be restructured, then they would have understood that government itself needed to be restructured and, as a result, throwing money at the problem simply wouldn't do.

I've heard it said this evening that the Liberals spent during the good years and that additional taxes were raised. That's true; we did spend additional funds. We did raise additional revenues, for very good reasons. The economy was booming, we had unparalleled growth rates, the best five years in the history of this province's economy. The growth rates were at some years approaching 7% and 8%. Of course we could spend at the rates we were talking about. The capital infrastructure of this province was seriously underfunded for many previous years. We had a serious recession in 1981, 1982, 1983, those three years, and we had a serious underfunding of the capital in this province. As a result of that, there needed to be additional expenditures in a variety of areas to maintain a high level of services. There was no question about that, absolutely.

But I say to the members opposite, that was done in very good economic times and we followed a philosophy that said you pay as you go. I remind members that we --

Mr Perruzza: No, you tax as you go; that's what you did.

The Speaker: Order. The member for Downsview.

Mr Cordiano: We taxed, but we paid as we went. We did not run up a $10-billion deficit. I remind the member opposite that in fact we had a surplus and, yes, it was a real surplus. That $400 million went to paying down the accumulated debt of this province. I remind the member as well that $32 billion of accumulated debt -- your debt in one year, $10 billion, amounted to approximately 25% of the total accumulated debt that this province had seen up to that point in time. We're not talking about a small amount of money; we're talking about a huge amount of money. We're talking about a fundamental change in the finances of this province. So I say to the member, it's important to understand that.

Let me get to the whole question of the social contract and why in the end that process was flawed.

Mr Tilson: A point of order, Mr Speaker: The member from Lawrence is making some wonderful comments and I think we need a quorum to hear those comments.

The Speaker: Would the table count to determine if there's a quorum.

Clerk Assistant and Clerk of Journals (Mr Alex D. McFedries): A quorum is not present, Speaker.

The Speaker ordered the bells rung.

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

The Speaker: I recognize once again the honourable member for Lawrence.

Mr Cordiano: As I was saying, and I believe I left off at this point, I was going to discuss the social contract process. I understand what this government attempted to do after two years, after failing to realize the gravity of the enormous crisis that this province was facing fiscally. Of course, it finally dawned on the Premier. He must have been visited, as someone put it earlier today, I think it was the member for Etobicoke West, by three ghosts who impressed upon him the need for fiscal restraint.

It is precisely because of the complete change, complete turnaround, complete turnabout, 180-degree change, which I must say this government has undertaken in a variety of areas -- but with regard to fiscal policy and fiscal management there had been a consistency throughout the last several years of overspending and overtaxing in a very difficult period of economic crisis. To suddenly put on the brakes of a machine that had been rolling along in a time when very little else was going on in the economy causes enormous damage to the economy.

It's precisely because of that, precisely because this came to a sudden stop, with a shocking effect on all sectors of the economy, that it is truly a psychologically shocking impact that we're talking about here. We're talking about almost one out of every four workers being affected by this process in the province of Ontario. We're talking about enormous spinoff from that. What we're saying is that the inconsistency, in and of itself, has a dramatic negative impact on the economy. You have to realize that.

Apart from that, it's the confusing, convoluted signals that are sent out by this government that have the economy going in one direction. You've got to remember the juggernaut that's created by the additional spending that was undertaken by this government in the previous three budgets. It creates a steamroller effect. There is no doubt about that.

Once, then, this government undertakes to bring that to a complete and sudden halt and realizes that restraint is the order of the day and that, politically, it's the only way to salvage itself and that international financiers are demanding that the government use restraint and bring its fiscal house in order, once that's done, once you put on the brakes, you have an incredible skid and you have an incredible shock on the economy.

The social contract did just that. Apart from that, it said to the workers who were affected, it said to all of the 950,000 people, "We are doing an about-face, a 180-degree turnaround," after three years of unprecedented increases, as I've pointed out, in settlements that exceeded anybody's imagination in terms of the difficult times that we were facing, increases that were quite embarrassing given the difficult economic circumstances. Literally, what this government is doing is, it's undoing everything that it attempted to do in its first two years. It is peeling it right back. One has to understand the gravity of that, the consequence of that, of what you will have unleashed.

2240

Of course, no one could follow that kind of management. No one could follow that senseless, directionless effort on the part of the government when it tells workers, "We are now going to sit down in an enlightened fashion and deal with the workers of this province in a way which would see to it that there's fairness and equity, and that management would sit down with labour and discuss how to effect the restructuring process," three years, certainly, after the private sector had commenced this, three years after everyone told them that it was unwise to continue to spend at the levels that had been undertaken.

It's precisely because of this that how could anyone have expected that the social contract process would have worked? You simply didn't understand that workers could not sit down in such a short period of time. Labour, the people involved who were your partners, and all concerned who were at the table, simply could not understand, couldn't believe the horror of what they were witnessing. I can appreciate that, because you gave them so much in the beginning. You gave away the store, and suddenly, unbeknownst to them, you were going to take it all back and then some.

If that's the new style of labour-management relations, is it any wonder that people were scratching their heads and were really exasperated at the process? Is it any wonder that it failed? Is it any wonder that in such a short period of time, this government attempted to do what I thought was an impossible task?

Applause.

The Speaker: Order.

Mr Cordiano: Now that we have a new attendant for members of the House, I would say that the Minister of Transportation can bring water for other members of the House. He's found his new vocation and he looks very well at what he's doing right now. I would commend members to tip him adequately, because it certainly commends what he is doing.

Let me get back to the item at hand. I would say that we are now dealing with a very difficult, confusing, chaotic situation, as my colleagues have repeatedly pointed out to the government. It is difficult at best to understand the consequences of what has been undertaken, and once again there is a guillotine hanging over the heads of people who are attempting to deal with what this government has unleashed in Bill 48, the attempt to peel back $2 billion in wage expenditures.

It's important to realize that in view of the legislation, as has been pointed out, there are two critical areas with this legislation that are important to realize.

For employees who have special leave provisions who perform critical functions, the days that will be considered leave days that will not be made up will be given back to those employees after a three-year period. That's very important, because we do not understand the true implications of that. We do not understand the cost implications of that, which in the future could end up costing a succeeding government enormous amounts of money and will have the opposite effect of having restructured the government and expenditures on the wage side.

In the end, we could have a built up, pent up demand that is unleashed at the end of those three years, and I say that is not acceptable. That is a short-term solution which attempts to deal with the crisis in a panicky and hasty way.

That's one good fundamental reason why you should oppose this bill: It does not view restructuring on a long-term basis. It does not say to the people who are dealing with this, who are the partners of this government, and the employees, "Let's deal with this in a logical, rational fashion and sit down over a period of time which would give due consideration, due process for the lengthy, complex, related issues that are involved."

At the end of the day, I predict, and I think others of my colleagues would agree with this, that we will inevitably see numerous layoffs. In order to effect this much in savings, the $2 billion, you will see a significant number of job losses. In my opinion, there is very little hope that the restructuring and reorganization that the government talks about, and the fairness and equity that it lauds in its bill will result in a rational reduction in expenditures without job losses. I don't believe that for a moment. I think that's the kind of power this government is unleashing, apart from the other areas that have been criticized.

One of the other important matters that has been raised by other members deals with the powers that are granted to the Minister of Finance to deal in a dictatorial fashion with this item, again giving the guillotine to this process, to these agreements which will be undertaken by the partners of this government. If they're not enacted and if the targets are not met, then the minister will act by decree, and the minister is given enormous powers to do that in this legislation. It is a serious, fundamental restructuring of management-labour relations.

The Premier stands up in this House, and previously on many occasions has stood in this House, and has said, "There needs to be a new day in this province for labour-management relations." In the discussions around Bill 40, there were references to the need for the restructuring of relationships between management and labour. During those discussions and that debate, this government, many speakers and commentators on the side of the government, talked about management-labour relations needing a new way of doing business, that the relationship wasn't working in this province and that it was essential that Bill 40 be passed because management-labour relations needed to be reorganized and reordered, and there was a new priority that was required.

If this is what this government meant by that, then I'm sorry, but I'm confused. Certainly many, many people out there agree with that, that this government has no idea. It sends out mixed signals. It contradicts itself. It sets off in one direction and then goes back and says: "No, we made a mistake. It costs us too much money. We're going to reverse all of that."

That's no way to manage an economy. That has catastrophic effects on the economy. It is a convoluted, distorted way to manage the economy. That's not real governance.

That's why I say to the members opposite that this is a matter of confidence, and I would say to the third party that this is a matter of confidence. This is a $2-billion reduction of expenditure. It is surely equal to any budgetary initiative. Surely to goodness, talking about a $2-billion reduction in expenditures is tantamount to any tax bill, is equal to the level or the degree of importance of any tax matter or budgetary item.

I say to the members opposite and to the third party, if they're listening, that this is a matter of confidence. I have yet to see any matter that could be dealt with that is of this gravity that would be denied to be a matter of utmost importance to this province.

I cannot understand how the government would refuse the people of this province a larger say in how we restructure a very important aspect of our economy, the 25%-30% of the people of this province who are employed, the 950,000 people -- think about that; that's almost 25%, one out of every four workers of this province -- who are affected by this.

2250

Furthermore, the untold damage that's unleashed to the economy is incredible. I would say to the third party as well that by implication you are supporting the fiscal policies of this government by supporting this initiative.

I would say to the members of the government party that if this were truly an effort at restraint that was long-term, that was rational, a real attempt to undertake restraint, to undertake on a priority basis what needed to be done to exact the kinds of changes in the wage bill that we're talking about, that is something that simply cannot be done in two months; there is simply no way you can undertake this kind of reordering, reprioritizing of management, the efforts you're undertaking here.

To do that in a short period of time is precisely a big error that you are administering, a big blow to the economy. It's an incredible situation that you would attempt to reorganize, restructure, downsize, delayer it -- call it whatever you like -- to do that and to give the semblance of having sat down with people on a rational basis, to do it in this fashion in as swift a period of time as we're dealing with. Is it any wonder that these talks failed? Is it any wonder that we find ourselves this day dealing with this matter in this way, in a draconian fashion? Obviously, at the end of the day this government has to enact that kind of legislation, because it simply did not understand the consequences of the efforts that were unleashed.

If, as I say, it was a serious attempt at restructuring the government -- I know the Tories will say that's exactly what they've called for, that it could be enacted through amendments I believe they're going to bring forward, that they're talking about restructuring the government. I don't believe this bill can be improved in that way. I don't believe the government will go along with those amendments, and I have not seen those amendments in much detail.

I know in principle we all support restraint, but we're not talking about a reordering or restructuring of government here; we're talking about an immediate hit, something that has enormous impact on the economy in a negative way. It can only worsen the unemployment situation, and that's certainly going to be true. At the end of the day we're going to see additional layoffs, and I don't believe we could not have accomplished these savings without having to sacrifice as many people as will be sacrificed. There will be job losses. That's inevitable because of the way in which you've undertaken this, and that's really the point of all this, that we oppose this because it creates further chaos, it creates confusion out there. This process is flawed right from the beginning and at the end of the day will cause further layoffs, will cause further damage to the economy as a whole.

If you told us we were going to undertake restructuring, using whatever management techniques are available today -- and there are obviously numerous examples in the private sector that have been undertaken -- that could be worked out over a decent period of time; let's not put a number on it, but certainly not this short span of time we're talking about. One day the Premier woke up, probably saw the news program on New Zealand or got calls from bankers in New York, or whatever -- God knows whatever else: was visited by three ghosts, as the member for Etobicoke West suggested -- and decided that we're on a restraint kick and that this needed to be done in this fashion.

"We'll bring in a guillotine now because those talks failed," and he thought: "How am I going to handle this and get people on side? I've got to give them the illusion that they can go along with this process and realize some of these savings by giving them the semblance of having been involved in a rational process" which attempts not to lose the numbers of jobs that we're going to see as a result of this mismanagement.

That's really what we're talking about at the end of the day here: Couldn't this have been done in a more rational way, given that over a period of time, more sensibly, we could have produced the result the government was looking for? I haven't even had time to go into the kinds of suggestions we've made eliminating the expenditures that this government has undertake. I note I have one minute left, but very briefly, on the non-profit housing initiatives this government has undertaken, the auditor, and I think someone mentioned this in an earlier speech, has suggested that there is enormous waste, somewhere upwards of $200 million, not to mention that we disagree at this time with the undertakings of this government in the whole non-profit housing sector.

There are numerous other examples we've put forward that my leader has suggested to this government, ways in which to save huge and significant dollars and to seriously avoid layoffs, because that's the worst thing that could happen at this time. That certainly will not build additional confidence in the economy. To have more people laid off is the last thing we should expect from this government, from any government as a matter of fact.

If that's what happens, if that's the end result of this undertaking, then I would say to these members, you ought to be ashamed to present yourselves at the next election. That's going to hang over your heads. I feel for you, because I'm afraid you won't be able to hang your head with any kind of decency.

Mr Tilson: I'd like to comment very briefly on the member for Lawrence's remarks. I've been listening very carefully to many of the Liberal speakers who stood up. They've been giving some very legitimate criticisms of the way this government is operating. The member for Lawrence made some legitimate criticisms, but the big difficulty that I and the members of my party, the Progressive Conservative Party have -- and I'm sure I hear heckles from the NDP -- is that we don't hear any alternatives. We don't hear any plans as to what they'd do if they were in government to correct the philosophy of too much government. As usual, there has been no time spent describing the Liberal alternatives. There's no time spent because there aren't any. The Liberals do not have an alternative.

The member for Lawrence did spend some time commenting on my leader's alternatives, the three-year hiring and wage freeze and the public sector wage freeze etc, but the only criticism he seemed to have towards that plan by the Conservatives is that the NDP government will not support it. There was no criticism; there was no stating that it will not work. We believe it will work. We would encourage the government to support our amendments. After this weekend, I'm sure they will be taking a long, hard look at the amendments that are being proposed by our leader.

I look forward to more debate with the Liberal Party. Perhaps as the debate goes on they will be able to find some sort of alternative to solve this problem that has been created not only by their government but more particularly by the government of the New Democratic Party.

Mr Perruzza: Just to respond very briefly to the Liberal member from Lawrence, he said a couple of things during his discourse that I can't understand. As I sat here, I could see how glossy-eyed he was for the gravy days of the 1980s. I'd like to rephrase his words. He used the phrase, "You pay as you go." Well, we all know what the Liberals did: Sure, they paid as they went; they also taxed along the way, each and every step of the way. They essentially took provincial expenditures, in 1985 around $26 billion or $27 billion, to $43 billion and $44 billion by the time they were voted out of office, before they were given their pink slips.

2300

Having said that, I'd like to focus on another point that was raised by the member. He talks about more job losses, about losing more jobs. He's missed the point. I would urge him to pick up the bill and read it again because he's missed the point. The whole point to the social contract exercise is to sit down with each and every one of the employer groups and work out a system, a scheme, whereby you minimize job losses or you virtually lose none. I urge the Liberal member from Lawrence to look at the bill very closely. He will find that there's even specific wording that essentially guarantees jobs and preserves jobs. I would urge him to have another look at that again, because that's completely fallacious and completely untrue.

Mr Gregory S. Sorbara (York Centre): I had an opportunity to go home for a couple of hours for dinner before coming back for this evening debate. A dear old friend of mine came over to visit for about an hour or so. Inevitably, the topic of the social contract came up.

His comment in referring to Bob Rae -- I'm sorry to use strong language -- was, "That poor son of a" -- and you can fill in the blanks. He said to me, "He has violated every principle that he stood for in opposition. He has offended just about every community and group in the province from doctors to teachers to nurses to environmentalists," and the list went on. Then he said to me: "But what he's doing here in this so-called social contract of his is waging war against the one million people who provide all of the public services that we have in Ontario. I hope you can do everything you can to stop it."

He said to me that the bill is among the most arbitrary and most offensive pieces of anti-worker legislation that he had ever seen and that he just couldn't believe it, given the traditional support that the New Democrats had received from and given to working people, and somehow something must have gone wrong in the Premier's head for him actually to be proposing to do this.

My friend from Lawrence pointed out, and I think eloquently, that the ultimate tragedy is that the bill itself will not achieve the ends it sets for itself and is reason enough to make sure that when the debate is over this House has the will and the capacity to defeat it.

The Speaker: The member for Chatham-Kent.

Mr Hope: As I listen to the member from Lawrence, I know well he always tries to put his points across, because I've seen him work his way through committee. I would only say to the member from Lawrence that I've been diligently waiting for the Liberal leader and I have never heard those 18 points that are going to try to fix this problem. I've heard a lot of criticism come from the Liberals, and that's what oppositions are supposed to do, but I must honestly stand here and say I still wait for the day when I hear the Liberal leader say she didn't have in 20 minutes enough time to put 18 points across. I never heard one. I'm hoping maybe in the two minutes that are allotted to you in the time of response you might tell us one of the 18 points your Liberal leader is trying to put across.

I must also exercise, as I listen to your opening remarks about paying as you go -- yes, you're right, you did pay as you go, and you did do a good job at it. You did tax. You did increase the provincial retail tax by one point; you raised it up to 8%. You also offloaded a lot to municipalities during the good economic times when prosperity was there in some of our communities.

You say, "Pay as you go." I'm hoping that you're not taking the words of your leader and saying to a lot of communities where some of the expenditure control plans have been put in place and have been effected that, if you're making promises, "Vote for us and we'll give you what you want." Because I've listened to the debates and question period very closely, and I've heard the Tories put proposals across -- but their ideology just doesn't meet ours -- but I have still not to this day heard what the Liberals' is.

Because if you're telling me that you have an agenda and you have an idea and in the next election -- all I've seen is the idea come out of your leader that she promises people things through AgriCorp, which was one of the prime examples, "Vote for Liberals and accountability." That's not accountability in the way that you're talking today about bringing your control plans in place.

Please, at least try to tell us one of the 18 points that the Liberals have or an agenda that they have.

The Speaker: The member for Lawrence has up to two points for his reply.

Mr Cordiano: I listened with interest to various of the comments. I just wanted to say to my colleague from the Tory party that in fact I had a brief look at the proposals they have advanced and I would say that some of those initiatives -- it's not as though those initiatives won't work in some fashion or to some degree, but the question is a $2-billion cut. Wage freezes are being enacted under this legislation. Wage freezes are part of it. Allowing for attrition to do the job alone simply isn't going to work.

The whole point of my analysis is that if we're going to restructure and reorganize government, then you simply can't do it with an across-the-board kind of cut, because that has serious implications for service delivery and it has serious implications for the level of people who are working at various programs etc on down the line. We have to do this with strategic thinking in mind. What I was saying simply was that you have to order priorities. People and the number of jobs, the number of employees in certain programs, the number of employees with respect to various agencies, boards and commissions: Those are all questions that have to be taken into consideration. An across-the-board cut enforcing this on every transfer partner means that you're not taking priorities into consideration. That's precisely why this thing leads to chaos, and it will inevitably lead to job losses, because in certain areas you should have greater cuts than others and there's no consideration given to that kind of restructuring and reorganizing. That's the point.

Mr Ted Arnott (Wellington): I'm very pleased to rise at 11:05 pm to speak to Bill 48, An Act to encourage negotiated settlements in the public sector to preserve jobs and services while managing reductions in expenditures and to provide for certain matters related to the Government's expenditure reduction program. It's a nice fuzzy title. I don't know who dreamed it up.

This bill is the social contract. It's the fruition of a process that was initiated in April of this year and collapsed June 3 and forced the government to pursue the legislative option to achieve its target of $2 billion of cuts in compensation reductions across the broader public sector.

On June 7 the Premier, in a statement in the House, said that enabling legislation would be introduced to provide for the implementation of the key provisions of the government's final social contract proposals. These proposals are as follows: a job security clause, under which every worker affected by the abolition of a position would have a priority for another job with the same public sector employer or with employers in the same industry or within the same region; a $300-million three-year fund to top up laid-off workers' UI benefits to 95% of their take-home pay for one year or to be used to extend notice periods; labour participation on a capital partnership board; deferment of all wage and merit increases until April 1, 1996; worker involvement in eliminating waste, with half the savings to be applied to the reduction target for the sector where the saving was realized or waste eliminated and the other half to be retained by the employer; a system of unpaid leaves of absence administered to protect service delivery and to accommodate individual worker preferences; and an exemption for employees making less than $30,000 a year.

The statement that the Minister of Finance put forward in this House on June 14 outlined the main provisions of the bill and it was tabled at that time.

The government has indicated that the purpose of the bill is to save $2 billion a year for the next three years through reduced compensation costs to the Ontario public service and the broader public sector. The Minister of Finance has broken down targets for each sector in the broader public sector, and if you add them all up, it comes to $2 billion. The Finance minister has acknowledged the legislation will interfere with collective bargaining processes, but his quote was, "Our government finds any prospect of overriding collective agreements painful and difficult, but our pain and difficulty are nothing compared to what the alternative would be for this province" if nothing was done.

The bill will cut transfer payments as of July 1, 1993, and sets August 1, 1993, six weeks from the date of the actual introduction of the bill, as the deadline for sectoral and local negotiations at which the parties are to negotiate cost savings equal to the reductions in the transfer payments for their respective sectors.

There is an incentive put forward to employers and employees to negotiate sectoral frameworks and local agreements. The bill provides that in the case where such agreements are negotiated, the employer will benefit from a lower expenditure reduction target -- that's essentially the target in the government's final proposal -- and the employees will gain access to the job security fund, which essentially is the topping up of the unemployment insurance benefit. The fund is $300 million. It's a three-year fund which will be used to top off the laid-off employees' benefits, as I said, to a maximum of 95% of take-home pay or pay for retraining and redeployment initiatives.

To take advantage of these incentives, it is not sufficient for employers and bargaining agents to agree on a sectoral framework on cost reductions. The sectoral frameworks must in turn be backed up by local agreement between employers and bargaining agents at the local level. These local agreements must be consistent with the sectoral framework, and in the case of non-unionized workplaces or employees, the employer and the employee must develop a plan consistent with the objectives of the broader social contract.

2310

All agreements and all plans must be consistent with a set of criteria to be established in the bill, which includes provisions to achieve targeted reductions, and there is an exemption, as I said, for employees who receive less than $30,000 annually.

This bill also gives a great deal of discretionary power to the Minister of Finance. He may designate agreements until August 1, 1993, and there's a 10-day grace period, if it's required, under special circumstances. But it gives him discretionary power with respect to the designation of sectoral agreements or "frameworks," as they are called within the bill.

The bill does not set any objective measure of support for a framework within a sector that must be met in order for a plan to be designated as a sectoral framework. Instead, the bill provides that a plan can be designated if, in the opinion of the minister, there is sufficient support for the plan, based on negotiations leading to the development for the plan, to serve as the basis for local agreements.

The bill gives the minister access to a "special circumstances" clause which would allow the government to waive even the subjective sufficient-support test in any case where, in its opinion, it is desirable to designate a plan.

Under the bill, the Minister of Finance sets the targets, establishes the criteria for the designation of frameworks and agreements, and is allowed to decide whether those same criteria should be applied. This gives the government tremendous political latitude, and it will allow great flexibility in its effort to avoid the use of its fail-safe provisions.

That's a great deal of information about this bill, and there's still more. This bill is extremely complex, complicated legislation, as we know. I would submit to you that since this bill has been introduced not even a week ago, very few people in Ontario fully understand its implications. The member for Oakville South did a good job of explaining this bill to the House.

Mr Carr: Up all night reading it last night.

Mr Arnott: Up all night reading it last night and we're up all night here debating it. But it's a very difficult bill for people to understand at this point in time.

In the course of this debate we've heard the suggestion that this bill denies workers' rights. It denies collective bargaining rights that have been hard won over the years. We've heard that this bill strips contracts that have been signed, sealed and have been in effect for some time. We've heard that this gives almost dictatorial power to the Minister of Finance, the Treasurer. We've heard all of those things.

But we also know that this bill is motivated by the fiscal situation that the province faces, that the government faces right now. They're taking steps, in their opinion, to control the expenditures of the government, and this is an important piece of legislation. I would argue that it is in fact important enough to be regarded by the Premier, by the cabinet, as a confidence motion, because it is of that degree of importance and magnitude.

We've heard the Liberal Party in the course of this debate put forward its particular view. They are clearly opposed to this bill. They are saying that for many different reasons and in many different ways they are clearly opposed to this bill. But I want to go into some historical context.

The Liberal Party in Ontario was out of power for 42 years, from 1943 to 1985, and at that time, in 1985, the Liberal Party ascended to power with the help of the New Democrats. An accord was signed and a list of legislation was devised and developed, negotiated between the two parties, and they came to an agreement whereby, in return for the NDP's support in the House for two years, certain legislation would be passed that the NDP really dictated to the Liberals. I know some of the Liberals perhaps philosophically supported some of the initiatives they brought forward, but they were to some degree held to ransom by the New Democrats, who, yes, had an agenda that they wanted to put forward. Then, of course, in 1987 the Liberals won a landslide majority government and the New Democrats were the third party, with 19 seats.

As it turned out, over those five years that the Liberals were in power, from 1985 to 1990, on average -- now, they'll correct me if I'm mistaken when they get their opportunity, but I believe that on average their spending increased approximately 10% every single year, and over those years they also hired an additional, at least, 10,000 civil servants.

The Liberals have argued that those were the boom times and people demanded services and they were responding to the demands that they heard in the community, but the reality and the absolute facts are there. That spending was undertaken. Now, they say they paid as they went and so on, but the reality is they set up a structure of government and a size of government that was unsustainable unless the economy was booming the way it was in the late 1980s, and they know that.

They know that they set up a structure of government that was totally unsustainable. They are the party of big government, and it's not surprising that when any restraint initiative is put forward by the provincial government now, they oppose it in its specific terms. They continue to claim that they support restraint in principle, but they have not supported it in practice on any significant initiative that has been brought forward by the New Democrats.

Now I'd like to talk about the historical context with respect to the NDP government. Of course, the New Democrats, and the CCF before them, have always seen themselves as a party of the left, a party of social democracy. From our perspective, they wanted to bring in arrangements that would change the power relationships within our society, and we've seen that since they've come to power. They've always stood for an expansion of social programs, and no matter how you cut it, those programs have been very, very expensive. The New Democrats would argue that those programs were necessary, that they were good at the time, that they continue to be good, but the reality is they have always stood for an expansion of government.

When they were actually holding the balance of power when the Conservatives were in power, from the years 1975 to 1981, they were in a position where they put forward an agenda. It wasn't in a formalized accord agreement, but the reality is, at that time the Conservative government did in fact bring in rent controls. The biggest mistake at that time was there was not a sunset clause attached to them, because at the time you could make an argument they may have been required, but certainly now they are not required. But at that time they were very, very influential in terms of the policies that have been brought forward by the various governments that they have worked with while in opposition.

But when they came to power in 1990, the statement was made -- and it will ring from the rafters of this place as long as this building is here -- they said they were going to spend their way out of the recession. They brought in staggering increases in spending, and in fact the total compensation package to the public sector went up 16% that very first year. Spending declined on some specific ministries --

Mr Callahan: That was their Achilles' heel. That started the ball rolling.

Mr Arnott: No, that total amount expended on the broader public sector salaries, wages, benefits, went up 16%. The spending declined in some ministries, but in other ministries it soared, and we know what ministries. The government has their right, they have their own priorities, but certainly when they talk about cutbacks in certain ministries, many of the ministries' budgets have exploded. I'm thinking of Housing, for example.

Then later we saw them change gears. Gradually they started to continue to cut spending on a greater and greater level. Then on April 23 of this year we heard about the expenditure control plan, which was a significant series of expenditure reductions. It was difficult for the government, because I know that in the past, for so many years, they found it very, very difficult to finally come to grips with the fact that government had to shrink somewhat. But they brought this in. It took a good deal of courage to do it, but they did it anyway.

2320

Then on the budget of this year -- the date was May 19 -- we heard the Treasurer start off by talking about the difficult situation, economically, that the province faced. On page 3 of his actual budget address, and I'm quoting from him, I remember him very clearly standing there in his place, and this struck me very much when I was --

Mr Carr: How could you tell he was standing?

Mr Arnott: I could tell he was standing because he was standing.

This struck me when he said: "Excluding sovereign countries, Ontario has become the largest borrower in the world. On average we borrow more than $1 billion a month. We spend more on interest costs than we spend on our schools. About two thirds of our new borrowing comes from outside Canada -- which means that most of the interest we pay on this borrowing goes to foreign bankers, investors and economies.

"Simply to let the debt increase each year at an accelerating pace would be irresponsible. Consumers would know that more and more of their incomes would be taxed away to pay the cost of public debt interest -- not just this year, but long into the future. Businesses looking for a good place to invest would be discouraged from locating here. All of us who rely on our health care system and other public services would know that, sooner or later, there would simply not be enough money to maintain those services. More and more of our tax dollars would go to pay government bondholders in New York, Zurich, Tokyo and elsewhere instead of being invested here in Ontario -- in Ontario services and Ontario jobs."

He continues on, but to me that was the most striking part of the entire budget because it demonstrated that the Treasurer had finally seen the light. I submit to you that if this statement had been included in the 1991 budget, in the first budget, and if that first budget had reflected the reality -- we in the Conservative Party knew we were entering into this situation and we told you at the time -- we would not even be talking about a social contract today. It wouldn't even be an issue.

My own position on fiscal matters I believe has been very clear from day one, and I've not deviated from the course that I talked of in my very first speech in this Legislature, my maiden speech. I said:

"We in Wellington understand the economic value of hard work and the social value of personal responsibility. From this understanding stems a serious concern when our government refuses to live within its means, when our government grows until it begins to inhibit overall economic growth and when even excessive taxation does not prevent the expansion of our government debt."

I continued along this approach and those in our caucus have put that forward. We've continued to try and get the government to see the simple common sense of a government living within its means and the benefit over the short term and the long term of that approach to governing.

Early this year, I was most concerned about the statement the Premier made when he was asked what his New Year goals were. I believe the words he said were that his greatest goal for the New Year was the defeat of the federal government. I was so incensed, I fired off one of the nastiest letters I've ever written to any public official, because I was just so angry. I said to the Premier that he's got to start showing some leadership, that he's no longer the Leader of the Opposition and that it's important he start taking his responsibilities very seriously.

I'm glad I wrote this letter because I know others were putting that view forward to him as well, and I think in some small way he came to his senses at some point early this year. He realized he did have to start showing leadership and that it wasn't good enough to blame all his problems on everybody else. He has one opportunity here to be Premier of this province, and he wasn't going to destroy the province over the course of his watch.

I had the opportunity to inform my constituents of some of the views that I held and some of the things that I thought were going to come forward into the House in this spring session. I talked about the provincial debt and I said that it's very important, that if the government had taken a more conservative approach to its finances three years ago, we could have been approaching a balanced budget instead of going through this process that we are.

I see the Minister of Transportation chuckling, but there are many other provinces in this country, including New Brunswick, that have taken the small-c conservative and frugal fiscal approach to their finances for the last four or five years, and actually in New Brunswick they expect to have a balanced operating budget next year.

At that time, we were hearing that there was a possibility of a $17-billion deficit, and the Premier was starting to talk about massive cuts to the provincial civil service and the broader public sector, including salary cuts and major layoffs. It was a shock to a lot of people that this Premier, the New Democratic Party Premier, Bob Rae, would be talking in those terms. At that time, I called upon the government to show leadership, and I said it was important that any reductions that had to be done, be done fairly, and that it was important that we show leadership on this issue. If belts had to be tightened, we had to start tightening our belts here first.

I'm not happy about this bill. There's no member in this House who is happy about the fact that this bill has to come forward. No one is happy with discussions of layoffs, rollbacks, cutbacks, contract stripping. I don't know any member who takes any pleasure in this debate or this bill or this discussion, but the principle of this bill is important, the principle and the symbolism of this bill. It's an important bill which demonstrates the government's intent to attempt to get its finances under control. I believe this.

I believe it's very difficult for the New Democrats to do this. They have always stood for certain rights of workers and so on and they're taking steps now that must be very, very difficult for them, but I think it demonstrates to me that if the New Democratic Party government is taking these steps, we are in a serious fiscal crisis or we're approaching it very closely. I think it's very important that we communicate to the people of Ontario in a frank way and in an honest way that we have to live within our means. It's important to our long-term survival economically.

I have close friends and family who may be affected by this legislation. We all know our own salaries in this House may be affected. When I talk to friends and family whose salaries may be affected, whose jobs may be affected by this legislation, I tell them: "It's not the value of the work you do that we're talking about. The value of the work you do is very important to us and it's reflected in your salary. It's not that; it's the ability of our society and our economy to collectively pay everyone who works in the public sector."

That's really the issue. We've set up a structure, and you can point fingers at who may have done it, but really the reality is that in the late 1980s, a structure of government was set up that we could not sustain and now cannot afford.

I have to look at this bill in the context of the people of Wellington. That's my most important responsibility. I look at this bill and the people of Wellington and I know some may support it and some would want me to vote against it. It's a difficult decision for me to make, because I've listened closely to the debate and I recognize the points that have been made. I recognize that many of the points on both sides of the issue are very legitimate, but I have to look at this bill in terms of the short-term and the medium-term and the long-term impact on the people in Wellington.

I know from the Treasurer's own projections that if the course of spending that had been entered into up until the point of maybe the end of 1992, the calendar year of 1992 -- the Treasurer indicated that if no reversal of that direction was taken, the net debt of Ontario would quickly explode to $120 billion by 1996, and the public debt interest we pay today, which is about 13 cents of every dollar the government takes in, might explode to double overnight. If the public debt interest percentage went from 13 cents to 25 cents, you would see a significant cut in government programs.

We have to keep that in mind. We have to think in those terms, 1996-97. We all know what compound interest can do. If you've got money in your pocket, if you've got money in your bank account, your money will grow very quickly, but if it's money you owe and compound interest is working against you, it can explode and literally strangle you.

Our party has put forward, we feel, a very constructive approach to this bill since April, since the government started to indicate that it had to take this course. We've tried to provide them with constructive alternatives, and I believe we've been as helpful as we possibly can be. I know when you see the exchange in the House between our leader, the member for Nipissing, and the Premier, you can see the mutual respect that is there in terms of the cooperation that we're trying to put forward.

This is a marked, significant difference from the approach the Liberal Party has taken, which is the old politics: Just try to hammer the government and hope to pick up whatever political gain might be there after you knock it down. We think it's more important than that. The future of the province is more important. We've got to work with the government. We've got to extend our hand to help them if we can.

2330

Our leader, the member for Nipissing, has put forward a number of specific suggestions that we would like to see reflected in this legislation in terms of amendments. I think it's very important that the government give careful consideration to these six conditions:

(1) A three-year hiring freeze which would have the potential to reduce the annual cost of the public sector compensation by over $2 billion in the third year;

(2) A public sector wage freeze that would commence on the anniversary date of all contracts and continue for a three-year period from that date, so that you wouldn't be, in the middle of a contract, changing the terms that were agreed upon earlier;

(3) Whistle-blower provisions to protect public servants -- this is something the government's talked about for, I think, their whole mandate and nothing really has come forward -- who report fraud, waste or other abuses from workplace retribution, while netting substantial additional savings.

That's a very, very important one. I think that would save a lot of money if it was in fact brought in.

(4) Provisions to discourage government departments from spending their entire budgets within the fiscal year; eliminating year-end burnoff or face rollbacks.

That's very important, too, because I think the culture of the public service over the years has been it's important to spend all the money you've been allocated or you're going to lose it. I think we've got to change that culture. We've got to change it so there's more of an accountability ethic, so that public servants realize it's the taxpayer's money they're spending, it's their neighbour's money they're spending and it's their own money they're spending.

(5) Performance bonuses for public servants, based on the efficiencies and productivity gained, similar to private sector agreements we see so often in industrial plants, where if someone comes up with a good idea that will save money in the workplace or promote efficiency, they'll be rewarded. And so you'll have a lot of good ideas coming forward.

(6) Establishment of an expenditure review committee to identify non-productive government programs and to prioritize existing programs.

That is sort of the flip side to the Fair Tax Commission. This is something I have been calling for for a long time. It's very important that the government spend some of its time, a lot of its resources, in looking at the way it's spending money, instead of just spending all its time and resources in trying to dream up new ways to take money out of people's pockets, whether it be casino gambling or whatever. That's very, very important.

I think this bill is going to continue to be debated over the next half an hour and probably into next week as well, so I know that many members will have an opportunity over the weekend to hear from their constituents what they think of this bill. I would challenge all members of this House to give consideration to what I've said tonight, and I thank you very much.

Hon Brian A. Charlton (Chair of the Management Board of Cabinet and Government House Leader): The member for Wellington's comments tonight have been, I think, thoughtful and helpful in some respects in terms of creating some thinking on all sides.

But there were a couple of problems with his comments that I'd like to focus back for him. He started out his comments with some assumptions about how the two and a half years of this government started out and he made some specific comments about how we started out by, for example -- and I think he used the figure -- raising the compensation costs by some 13%. If the member is going to base some of his conclusions on assumptions like that, then he needs to fully understand those assumptions.

In the late 1970s, for example, the Davis administration started a process of privatizing a number of services like the food services in Correctional Services. For a very few short years we actually had savings as a result of those privatizations because there were minimum wages being paid and so on. As contracts now come due, we discover, for example, though, that we're now paying about 160% of what we could provide those services for ourselves. So when contracts run out, we're taking dollars that are being spent anyway to provide services that have to be there and, in fact, making them permanent jobs in the civil service, but providing the service more cheaply.

There were also thousands of unclassified contracts that both the former Conservative administration and the Liberal administration continued to use, thousands of people who'd been working 15, 16 and 17 years in unclassified contracts, which this government has said to the ministries that they shall, when they've demonstrated that kind of need for the work, make classified positions and bring those dollars into the salary and wage line in their budgets so they aren't hidden, so they're up front where the public can see them. There was not a 13% increase in compensation costs if you look at the reality of the work that was being done up front and hidden.

Mr Bisson: I just want to comment shortly on some of the points the member's made. First of all, I appreciate the constructive nature that he took in debate. I think the member tried to come to this assembly and to put forward some points about how he feels and how his caucus feels some of this should be done.

I want to point out that some of the things he talked about, the six points the Conservative caucus brought forward, are a little bit of what could be found within the social contract if the unions wanted to come to the table and talk about these things.

But I want to talk about one of them because it's a little bit difficult to deal with it, and that's the second point he raised on freezing contracts, basically freezing salaries for three years after contracts come due. I think most members in this assembly would recognize there is a real, inherent problem with that particular proposal. Let me try to explain it this way: If we try to do that, we know already there are some collective agreements that were negotiated last year that were two-year deals, and in some cases three, that basically came out to a freeze already for a couple of years. What you would end up doing is not only asking people to take a three-year wage freeze; you would end up at actually four and, in some cases, five years as a freeze if you tried to do it at the end of the extension, as the end of the contracts come due.

It is, I think, probably an option that most of us on this side of the House were very prepared to take a look at, but we also recognize there are real, inherent difficulties with that. The flip side of it is, what happens in the event that there is a bargaining unit that doesn't have a collective agreement and has to take a three-year wage freeze now, and then you have another bargaining unit somewhere down the road that's getting 1%, 2% or 3% as a wage increase for the next year or two? It would be unfair. Some workers would be getting a raise while other workers would be taking a freeze. I think what you have to do, just on a fairness aspect of this thing, is turn around and have a date, and it is an arbitrary date, and say, "Everything is frozen from this point on," and collective agreements come back open after that; they just run their course afterwards.

So I appreciate the debate, but I think you recognize there are some difficulties in what you proposed.

Mr Callahan: I don't think there's any question that all members of the Legislature realize that there has to be some attempt made to try to get us out of the fiscal problem we're in. But I guess my major concern is, I look at the act and the preamble to it says, "In order to achieve significant savings in public sector expenditures in a fair and equitable manner," and yet when I look at the provisions of the act it doesn't provide for a tribunal. In fact, it eliminates, from the entire procedure, protection provided under the Statutory Powers Procedure Act, which in effect means that if the minister by his or her own direction, in this case the Minister of Finance, decides to do something, there is no appeal; that's it.

If that is in fact meeting the preamble, which is to achieve significant savings in public sector expenditures in a fair and equitable way, then I really find it difficult to accept, because when you give absolute power to a single person, that absolute power means that people do not have an equitable and fair way of dealing with things. That is the total antithesis of collective bargaining. I don't know whether the members in the government understand that. I would urge you to read the bill, because in fact the bill flies right in the face of the whole principle of collective bargaining. There is no collective bargaining. It's a one-sided agreement. It's like the employer telling the employee, "This is what the deal will be," or vice versa.

I always thought that New Democrats believed in collective bargaining. Well, this bill is not collective bargaining. This bill, in fact, is so one-sided, is so dictatorial, that it's absolutely frightening that it would be brought in by any party outside of the Soviet Union, quite frankly.

2340

Mr Carr: I was struck by something the member said in his maiden speech, and I want to read it again -- I'm close enough that I was able to grab a copy -- and say exactly what he said, and I wish the members during that period back in December 3, 1990, had listened. He said: "We in Wellington understand the economic value of hard work and the social value of personal responsibility. From this understanding stems a serious concern when our government refuses to live within its means" -- remember, he said this in 1990 -- "when our government grows until it begins to inhibit overall economic growth." Remember, this is a new member who came in, in September 1990, and in December that year he was telling you then that we can't continue on with the tax, spend and borrow approach. He goes on to say, "when even excessive taxation does not prevent the expansion of our government."

From the time this young member came in, from the beginning, in his first speech, he told you people across the floor, "Don't continue to tax, spend and borrow like there's no tomorrow." A young individual who came in as a rookie MPP knew more about what needed to be done than the Treasurer and the Premier of this province. You didn't listen to him then, and now, as a direct result of that, you're paying the price. He told you in his first speech what you should be doing, but, oh no, you had all the answers. You were going to spend your way out of it. This young member came in and told you what needed to be done. If you had listened to us then, you wouldn't be in the problems you're in today. You continually disregarded what the opposition was saying. You made the bed you're lying in today. If you'd listened to us, you wouldn't be facing the problem you have today. All I can say is that in the next election, I hope we get a lot more young, bright members like the member for Wellington.

The Speaker: The member for Wellington has up to two minutes for his reply.

Mr Arnott: Thank you to the member for Oakville South for his kind remarks, and I want to thank the members who responded to my speech at this late hour. To the government House leader, I appreciate his indulgence. He was listening to most of my speech, and I appreciate that. The member for Cochrane South, though, I don't think was listening to my speech. The member for Brampton North I don't think was listening to my speech either, but that's okay.

Mr Perruzza: The economy's failing. It doesn't make sense.

The Speaker: The member for Downsview, please come to order.

Mr Arnott: When I talk to people in our riding of Wellington, the people who aren't in favour of the social contract, the ones who are opposed to it, I ask them, "Why are you opposed to it?" Their concern is that if they have to send in 5% of their income to this government, they don't have confidence that this money is going to be frugally managed. We have seen over the last three years now a number of specific programs and instances where the government, in spite of the fact that it claims to be trying to enter into a period of restraint, is entering into expenditures on highly questionable programs.

I think of junior kindergarten. I remember the Minister of Community and Social Services over there, when he was Minister of Education, persisted in insisting that every school board had to have junior kindergarten. Some school boards don't want it and the people don't want it. They don't want to pay for it and it's not necessary.

I think of the non-profit housing program, well over $1 billion a year, a very questionable program. If you looked at alternatives to let the free market do the job, you wouldn't be needing to spend $1 billion.

I look at the welfare bill that has gone through the roof. Even though unemployment has stabilized, the cost of welfare continues to go through the roof.

I look at the hundreds of millions of dollars that have been spent on putting the private sector day care operators out of business.

This is one of the reasons that people are concerned. They're not prepared to send in their 5% cheque to this government if they don't have some confidence that the money is going to be used frugally.

The Speaker: Is there further debate? I recognize the honourable member for Essex-Kent.

Applause.

Mr Pat Hayes (Essex-Kent): Thank you. I certainly appreciate the support from my colleagues. That's what being here in politics is all about. It's about people working together to help the people who are most in need. That's what this government is all about.

There's been a lot of comment from the other side, from the Conservatives and from the Liberals, talking about the members in this New Democratic Party with a labour background and how they're so surprised at some of the things we are doing and why we're doing them. Mr Speaker, I just want to say to you and to the members of this House that, yes, I am a member of the CAW and very proud of it. I'm very proud to be a member of the labour movement.

Interjection: He was a member.

Mr Hayes: I still am a member, thank you. I have come from a labour background. My father was a very strong member of the labour movement and he was also a CCFer and a New Democrat.

Interjection: How strong was he?

Mr Hayes: Very, very strong. If it weren't for the labour movement, I would not have been involved in politics, because the labour movement taught me about things like social justice, helping people in need, helping people to get decent housing, helping people to get decent pay, helping people to get decent working conditions, health and safety, cleaning up the environment. What they taught me was that when you work in the labour movement, you not only work for that specific group within your workplace; you go out into your community and you get involved in other issues to help other people that don't have the support that is needed.

Mr Turnbull: On a point of order, Mr Speaker: Quite apparently, the member from Essex-Kent hasn't read this bill. I'll undertake to read it to him.

The Speaker: The member does not have a point of order.

Mr Hayes: I just thought I'd follow the lead of the member over there who never does speak to the subject at hand.

Anyhow, as I said before, one of the things they have taught me is to think about other people and try to help other people, and that's why I got into politics in the first place. When I was in the labour movement, prior to getting elected, I fought, along with my brothers and sisters, such things as the GST, high interest rates, free trade, the inflated dollar, all those things. These are some of the things that have brought us to where we are today.

I know the members from the other side of the House don't like to hear that, but those are really the facts, because what has certainly affected this economy and has hurt Ontario more than any other province is because of the industrial sector Ontario has, and that's the sector that was hurt the most by the free trade.

Of course we also have the Liberal Party, which doesn't know the difference between a debt and a surplus. I think we can recall that. One of the members was out here this afternoon speaking to people, telling them that the Liberals left this government with a surplus.

Interjection: What did he get? He got booed.

Mr Hayes: I think he got booed by talking that way.

I had three pre-budget meetings in my riding. The message I received from the people in my riding, and they were public meetings well advertised, was that we have to cut spending, cut the debt in this province, but also maintain --

Mr Phillips: How about jobs?

Mr Hayes: Yes, maintain jobs and essential services. That is exactly what this government has done, because this government is committed to the key social and economic programs: capital and infrastructure, housing, Jobs Ontario initiatives and adequate levels of social assistance.

One of the things we have done with the social contract is that this government has tried very hard to achieve a broadly based negotiated agreement consistent with the principles of a social contract. It is unfortunate that we were not able to come to a successful agreement, but we are confident that the sectoral and local negotiations will generate successful agreements. The incentives are clear: reduced savings targets for employers and employees, better security for workers and access to the job security fund.

2350

Really, what Bill 48, actually the purpose of the bill -- I think all the members have probably read it, but just for the record:

"The purposes of this act are as follows:

"1. To encourage employers, bargaining agents and employees to achieve savings through agreements at the sectoral and local levels primarily through adjustments in compensation arrangements.

"2. To maximize the preservation of public sector jobs and services through improvements in productivity, including the elimination of waste and inefficiency.

"3. To provide for expenditure reduction for a three-year period and to provide criteria and mechanisms for achieving the reductions.

"4. To provide for a job security fund."

To get back to one of the things I was talking about earlier, the CAW -- I know there are other unions -- for example, in private industry, I think Kimberly-Clark and Abitibi and Algoma Steel are some of the areas where the labour movement actually got together with the corporations and they did take reductions in some of their wages. They did that to save jobs.

With the CAW and the UAW prior to that -- we do have plants in this province right now -- had it not been for the workers and the leaders in the labour movement and the corporations getting together and actually looking at concessions and changing work standards and classifications and things of that nature, there are corporations in this province that would not be here.

There's a great reason for that. It's because the CAW and other labour movements across this country -- not just the CAW; I mention that because that's where I was -- think of the economy. They're very concerned about the economy. They have fought very hard to boost this economy. They have taken steps where they have actually been able to improve efficiency and improve productivity and things of that nature just to keep the corporations going. The main reason for that is to protect jobs.

I'm just thinking about where the New Democrats really differ from the Liberals and the Conservatives, which is that the programs we have put into place since we've come into office have been long-term plans, not the kind of ad hoc programs that the Liberals have always had. Ad hoc programs were the Liberal way of life. In other words, if there's a problem, let's just throw some money at it and maybe good luck next year.

We don't operate that way. The other thing is we're being criticized from the Conservatives on some of the things that we're doing. I'd just like to tell the workers in this province -- I think they're already aware of it -- if the Tories were in power today, they would not even be thinking about negotiating; they would just drop the hammer on the workers. They wouldn't even talk to the workers or the employers. That's where we'd be.

Just a message for the people out in the public is that this government has introduced a lot of good legislation for workers in this province and for the people who are most in need: the minorities; the women; people who are on social assistance, programs to get them off of those --

Hon Mr Pouliot: The less fortunate.

Mr Hayes: The less fortunate, that's correct. Just to remind members of the House and the public: programs like pay equity, which others didn't have the nerve to do; employment equity, another area for minorities and women; and the disabled; the Ontario Labour Relations Act, Bill 40 -- that's the one where we were going to scare all of the businesses out of this province.

It's the rhetoric from the Liberals and from the Conservatives that has done more harm to this economy, with their scare tactics and their doom and gloom. I would suggest to them that they should start talking a little bit more positively about Ontario, what a great place to live and what a great workforce we have.

I'm just going to mention a few of these: the employee ownership legislation; increase in the minimum wage, which they were certainly afraid to do; the environmental bill of rights; the Advocacy Act, all of these kinds of things. But also the one thing that I would --

Interjections.

The Speaker: Order. The member for Essex-Kent has the floor.

Mr Hayes: Thank you, Mr Speaker.

Mr Daniel Waters (Muskoka-Georgian Bay): We are just trying to help you get through.

Mr Hayes: Oh, I can do with that.

These are only a few of the great things that this government has done, and the thing is that I want the public to know and I want the workers in this province to know, not only in the public sector but also in the private sector, that some of these programs that I spoke about here this evening, the members over there, the Liberals and the Tories -- and I want the people to know this -- have publicly said that they would throw some of these programs right out. Those programs are there to protect workers and to help people who are most in need, and those people over there are going to throw them out.

I can't understand that. They get up in the House and say this is a terrible thing that we're doing, and yet the good legislation that we're implementing, what are they going to do with it? They're going to throw it out. They think they're going to throw it out.

But one of the things I know I have learned, and I've learned it from the labour movement, is that there are some things that you know you don't like to do, you might not want to do, but you know you have to take a stand because there are things that we have to do. We know that we have to do this because if we don't do something, we do know that our largest program in this province would be paying the interest on the debt in this province. I think we have to start all working together to start looking at the future and trying to save the future for our children and for our grandchildren. I don't think we should be thinking just about today.

We know that we had been left in somewhat of a mess when we got here in 1990, but I think that we are working at it and we are doing very well. I can tell you one thing: Wherever I go in my riding, I still have friends of mine -- not necessarily New Democrats; Liberals and Conservatives -- who come to me and say: "We know that it's not your fault, and you guys are doing all right. It's the Tory economics, the Mr Wilson and Mulroney economics, that have certainly got you into this mess, and that Liberal government certainly didn't help you out very much." I'm being told, "I wish that somebody would tell those Liberals what the difference is between a surplus and a debt," and we're still looking for that. Now, they may explain that some day.

Am I wrapped up? That's it. Thank you very much. Like I said, we know what we have to do. I think that we have the fortitude to do it, and we're doing it, certainly, with the people who are most in need, to try to keep our social programs, our health care system and our education system going and hope that we can build them stronger in the future.

The Speaker: A good place to break your remarks. BUSINESS OF THE HOUSE

Hon Brian A. Charlton (Government House Leader): Pursuant to standing order 55, I'd like to announce that on the afternoon of Monday, June 21, we will continue with the adjourned second reading consideration of Bill 48, the Social Contract Act.

The House business for Monday evening and for the remainder of the week is still under discussion with the opposition parties.

On the morning of Thursday, June 24, during the time reserved for private members' public business, we will consider ballot item number 17, second reading of Bill 45, standing in the name of Mr Murphy, and ballot item number 18, second reading of Bill 46, standing in the name of Mr Jordan.

The Speaker (Hon David Warner): It being 12 of the clock, this House stands adjourned until 1:30 of the clock Monday next.

The House adjourned at 2400.