37th Parliament, 1st Session

L015B - Mon 22 Nov 1999 / Lun 22 nov 1999

ORDERS OF THE DAY

MORE TAX CUTS FOR JOBS, GROWTH AND PROSPERITY ACT, 1999 / LOI DE 1999 RÉDUISANT DE NOUVEAU LES IMPÔTS POUR STIMULER L'EMPLOI, LA CROISSANCE ET LA PROSPÉRITÉ


The House met at 1847.

ORDERS OF THE DAY

MORE TAX CUTS FOR JOBS, GROWTH AND PROSPERITY ACT, 1999 / LOI DE 1999 RÉDUISANT DE NOUVEAU LES IMPÔTS POUR STIMULER L'EMPLOI, LA CROISSANCE ET LA PROSPÉRITÉ

Mr Skarica, on behalf of Mr Eves, moved second reading of the following bill:

Bill 14, An Act to implement the 1999 Budget and to make other amendments to various Acts in order to foster an environment for jobs, growth and prosperity in Ontario / Projet de loi 14, Loi visant à mettre en oeuvre le budget de 1999 et à apporter d'autres modifications à diverses lois en vue de favoriser un climat propice à l'emploi, à la croissance et à la prospérité en Ontario.

Mr Toni Skarica (Wentworth-Burlington): I would like to advise the House that I will be sharing my time with the member for Halton, the member for Dufferin-Peel-Wellington-Grey and also the member for London-Fanshawe.

I'm pleased to lead off the debate today on the More Tax Cuts for Jobs, Growth and Prosperity Act. If this bill is passed, Ontario taxpayers will be keeping more of their hard-earned money. The bill is a significant step towards our program to cut taxes and create jobs, but it's only a step. The job is not yet finished. Hard-working Ontarians will still pay too much tax. We will continue to work to reduce taxes and to pressure the federal government to do the same.

The More Tax Cuts for Jobs, Growth and Prosperity Act, if passed, will provide the legislative framework for many of the tax cuts announced in the 1999 budget, including the 20% reduction in the personal income tax rate committed to in that budget.

Ontarians have benefited from the first 5% reduction of this planned 20% rate reduction since July 1, 1999, when deductions from paycheques were reduced in anticipation of this legislation. It comes on top of the 30% income tax rate cut already received by Ontario families over the past three years.

Other tax-cutting commitments which would be enacted by this bill include extending the land transfer tax refund for first-time new home buyers and increasing the maximum amount of the refund to $2,000 from $1,725, making it easier for families to buy their first home; making the retail sales tax rebate on building materials for farmers permanent to assist farmers in maintaining their properties and to promote economic development in small communities; and enhancing the capital tax exemption for small businesses, encouraging investment that helps to create jobs.

Employment in Ontario has recently climbed sharply by 4,600 jobs in October, following growth of 28,800 jobs in September. This is added to the 540,000 jobs created in our first term. Since 1995, 615,000 jobs have been created in Ontario, accounting for virtually half of all the new jobs in Canada. In October, Ontario's unemployment rate fell to 6% from 6.4% in September, reaching its lowest rate since June 1990, basically the lowest in a decade.

The debate is over-but we're still here-tax cuts create jobs. It is this government's intention to ensure Ontario taxpayers see more of both in the years ahead.

As you will recall, this government was elected in 1995 on a platform that indicated a number of commitments, but one of our main commitments was to cut income tax rates by 30%. At that time it was approximately 58% of the federal rate and was either the highest or one of the highest in the provinces.

I remember when I campaigned back in 1995 and told people we were going to cut the income tax rate by 30%, people just didn't believe it. A lot of people said, "That's nice, that you're promising that, but I just don't believe you're going to do that." I showed them studies I had, that in fact when you cut income taxes, when they're very high and you cut income tax rates, what happens is a number of things. You get an economic stimulus. You get more tax revenue, not less.

People still didn't believe that but they were happy with some of the welfare reforms we were suggesting in the Common Sense Revolution, and a number of other initiatives. I had a number of voters tell me: "I'm going to vote for you. I'm hopeful that you guys will do what you say on welfare, that you're going to cut welfare rates, that you're going to introduce work for welfare, but we don't believe you on the income tax rate cuts." I remember I told a number of them, "No, it makes sense and we are going to do it and if we don't do it, I'll make sure I'll do whatever I have to do to make sure the government does do it." I didn't have to do anything.

As you know, in the last term there were a few times I did say a few things against the government, but on the campaign promises set out in the Common Sense Revolution, the government said what it was going to do and did what it said it was going to do and implemented the reforms as set out in the Common Sense Revolution, one of the main ones being the income tax cut.

At that time, when we started to do those tax cuts, you will recall that there was opposition to the income tax rate cuts. In fact not only did we cut the income tax rate by 30% but we introduced 69 other tax rate cuts on the basis that our economy was struggling, that we were falling behind the rest of the world in productivity and that we needed to cut taxes to stimulate growth.

We weren't the only ones at that time in 1995 to recognize that high taxes were killing prosperity and were killing the potential for job growth.

Lyn McLeod, for example, who was the leader of the Liberals at the time, stated in April 1994: "Ontario's rising tax burden is cited by business as the province's number one job killers. ... The link between higher taxes and unemployment is clear."

The Ontario Liberal Party red book, 1995, at page 8 stated this: "Rising taxes also kill jobs. Paying higher taxes than their competitors is the last thing Ontario businesses can afford. As for Ontario families, many can't afford the taxes they're paying right now."

So there was a consensus, in my opinion, among the public-in fact even the Liberals were saying at that time-that taxes were too high, that they were preventing job growth, which makes it very interesting as to why, then, when we introduced a 30% income tax cut, when we introduced the other 69 tax cuts-and there are 30 more coming in this budget bill-the Liberals voted against each and every one of those 69 tax cuts and each and every one of those income tax rate cuts, even though they recognized that taxes were too high in this province, they were too high in this country and that we were killing prosperity as a result.

The mantra of the opposition parties in the Legislature, and many of the members are here and they will remember, was that this income tax rate, well, it's nice to cut taxes for people but what you're doing is paying for it, basically to help out the rich, by preying on the poor; what you're doing is cutting government programs for the poor. You're borrowing money. We've heard it since the election and during the election: You're borrowing money to pay for the income tax cut.

But surprise, surprise, the fact of the matter is that after each and every tax cut, both the 69 directed targeted tax cuts and the 30% income tax rate cut, government revenues didn't go down; they went up, just like the studies that I had at the time of the election and was showing the people. So in fact the income tax rate cut did not require us to borrow a nickel. The income tax rate cut and the other 69 tax cuts did not force us or mandate us to raid programs that benefited the poor to pay for it. Not only was it self-funding, but we gained more revenues. Why did we gain more revenues? For the simple reason that the economy was stimulated. It was then worthwhile for people to invest in Ontario, because they knew that when they invested their money it wasn't all going to be paid out in taxes to the government.

So the net impact of it was that 540,000 jobs were created during our first term and, as indicated in my preamble, we've cut taxes even further. What has happened? Again, we've created a massive number of new jobs, to the point now where we have 615,000 new jobs in our tenure. While that has been happening, with all these new jobs, obviously people on welfare now have some opportunity that they didn't have before.

So 400,000 people came off welfare, and that of course benefited the government in that we didn't have to pay to keep those people on welfare, and at the same time those people now had jobs and were paying taxes.

With the investment that was happening, with the jobs that were created, what simply happened was that there were more taxpayers, there was more prosperity and government revenues went up. It's pretty simple economics, and it makes you wonder why people fought it in the first place.

It's not an accident. The Financial Post on April 2, 1996, had this prediction, and it's interesting to note that this prediction was at a time when the opposition, the Liberals, the NDP and virtually most of the press were saying: "You cut taxes. That's a reckless thing to do. That means government revenues will go down." I remember the Liberal backbenchers saying: "That's going to cost $5 billion a year. You have to borrow $20 billion to pay for this tax cut." Well, they were off by $11 billion a year, because now we're up $6 billion more, and that's each and every year.

In any event, the Financial Post indicated on April 2, 1996, that they predicted the tax cut would be a good thing and that we would not lose revenues. "Claims by Ontario Premier, Mike Harris, that revenue lost through cuts in provincial personal income tax will be recouped by increased economic activity may not be as far-fetched as some of his government's opponents claim."

The opposition said: "Yes, it is far-fetched. It's going to cost you $5 billion a year." At that time, the Financial Post, the studies we had in our party and our campaign commitments indicated that no, this would not bankrupt the province, that in fact it would stimulate economic growth, and we predicted 725,000 jobs would be created over five years.

Some people laughed at us. They said: "You're not going to create 725,000 jobs. That has never happened in Ontario before. That's not possible." Well, here we are four and a half years later at 615,000 jobs, and it looks like, with the continued growth we're having, we need about three months of growth like we've had in October and we'll be at 725,000 jobs. We're doing it-the impossible, according to the opposition.

1900

What this government did, basically, was we did our homework. We did research on what was happening in other jurisdictions, we moved boldly to cut the income tax rate, to restrain government revenue in areas except for education and health, and what has happened is an economic boom.

You don't have to take my word for it. It's interesting to note the Toronto Star, which has been critical of us from time to time in the past and has been supportive of the Liberals. On Wednesday, November 10, 1999, this headline appeared: "Economy Booms for First Time in Decades"-there's the headline in the Toronto Star-and it is booming. It's interesting to note that there are some arguments, "It's the low Canadian dollar," "Ontario has just been lucky," and those types of excuses. But when you look at what has happened in Ontario, we've had the highest rate of job growth in all of Canada. With about 35% of the population, we've had half the jobs that were created. We've had more job growth than the rest of Canada. In fact, we're creating jobs at a rate higher than in the United States. For example, in 1998, we created over 200,000 jobs, the most job creation in any province in the history of this country. In any event, our job growth rate was higher than the United States. It was higher than our competing jurisdictions in the states surrounding the Great Lakes. In fact, we had the highest job rate growth in the G7. That can't be a coincidence.

We've done that with some very substantial burdens. We have the highest federal income tax burden in 40 years. The federal government, as a percentage of GDP, is now taxing about 18% of GDP, the highest in 40 years. They just don't get it, which I find just amazing. How could they not get the fact that if you cut taxes, that doesn't mean you're going to lose revenue? In fact, the truth of the matter is that if you cut taxes when they're high, unreasonably high, and they sure are in our country-they're the highest in G7.

Judith Andrew, from the Canadian Federation of Independent Business, told me recently that property taxes in Ontario are the highest in the G7 nations. So that's pretty tough, to attract investment when you've got the highest federal income tax and the highest property taxes in the G7. What has been our saving grace now is that we have the lowest provincial income tax rate in the country. Sometimes Alberta cuts their taxes so they are a bit lower than ours, and then we cut ours. We're basically in competition with Alberta for the lowest taxes in Canada.

When you look at who the two most prosperous provinces in Canada are, who are they? The answer is simple: Ontario, number one, and Alberta, number two, the two provinces that are in a tax-cutting race right now.

Hon Frank Klees (Minister without Portfolio): Both of them have Tory governments.

Mr Skarica: Yes, both of them have Tory governments. Both of them have a commitment to balance their budget, which is now happening in Ontario. One of the comments we've heard from the Liberals is, "You've been the last or the second-last province to balance the budget." We're not the last. BC is out there with that economic disaster with the NDP government.

But we started out worse than everybody else. No one else had the $11-billion or $12-billion deficit that we started out with. No one else was in debt to the tune, when we took over, of $90 billion. We had a lot further to go and, contrary to what the opposition says, we weren't prepared to cut health care and we weren't prepared to cut education, so we had to have a plan: Cut taxes, stimulate economic growth, create jobs, reduce welfare, increase government revenue and basically hold the line on government expenses. We've done all that. What has been the result? We've got the strongest job creation growth, as I've indicated, in the western world.

I'll just read some statistics here that were released on November 8, 1999, a couple of weeks ago. Our GDP rose 1.2% in the second quarter of 1999. That's an annual rate of 5%. The economists, when they saw our budget, with the 30 tax cuts in addition to the 69 and the 30% tax cut and the 20% tax cut on income tax to come, and now we're finally dealing with the property taxes-keep in mind, Judith Andrew, the president of the Canadian Federation of Independent Business, indicated to me and to us that 80% to 90% of her businesses indicate that their primary concern is high property taxes; it's a job killer. So now we're addressing that issue as well, by moving into reducing property taxes by 20%.

Let's look at the impact of our approach and our plan to cut taxes. Our GDP rose at an annual rate of 5%, 1.2% in the second quarter. All the economists, when they saw what we were doing with our tax cuts-30 more in this budget-predicted 3.7%. That was on top of the 200,000 jobs and the tremendous economic growth that we had last year. They figured 3.7% is about the best you could do. The fact of the matter is that we've done way better than that: 5% economic growth, again, leading the country, and we're creating jobs at a startling rate. Ontario employment climbed by 43,600 in October. Add that to 28,000 jobs gained in September, and again, there was another income tax rate cut in July. I would suggest that's not a coincidence. We're the province that's doing the most aggressive tax-cutting campaign; we're the province that has had the most tax cuts in the last four and a half years. When this budget is passed, we'll have had 99 of them.

What's also significant about this legislation is that, yet again, it confirms that we're a government that when we make a commitment, when we say what we're going to do, we do it. This bill is basically a confirmation and a continuation of the commitments that we made in the Blueprint. It's interesting that in the last campaign nobody suggested to me: "You guys aren't going to do what you say in the Blueprint. You're not going to cut taxes like you say in the Blueprint." Nobody said that. They didn't say that because they saw what we did with the Common Sense Revolution. We made a commitment; we gave our word that we were going to do certain things, and we did them. We brought integrity back to politics. Our word meant something.

We weren't like those federal Liberals, who got elected in 1993 and said, "We're going to get rid of the GST," and we're still waiting. In fact, what's the federal Liberal approach right now, when people complain about high taxes? The Prime Minister, Jean Chrétien, says, "I know taxes are high, but if you don't like it, leave the country." What arrogance. What kind of an attitude is that? And this is at a time when the federal Liberals are taxing this country at a rate that is higher than anyone else in the western world. We're at 18% of GDP for federal taxes. Everyone knows, and it's been proven by the Ontario experience, that high taxes kill jobs. If you want to create jobs and you want to create economic stimulus, the answer is really simple: You cut taxes, especially when they are at historic highs, and that's what they are federally. They just won't do it, even though they know it's going to create jobs. Look at us. We've cut taxes in an aggressive way that's unprecedented in Canadian history and we've got job growth at a rate that's the highest in Canadian history.

Finally, I would just like to make one other point. It's essential for the provinces and the federal government to continue to cut taxes, because there are other jurisdictions-the United States in particular, which is our main competitor and our main export destination-which are about to engage in a massive tax-cutting campaign. So are places like Ireland and England. If we don't cut taxes, we're going to be more uncompetitive than ever, with them as well. So we have no choice if we want to remain competitive, if we want to maintain our standard of living and if we want to keep our people at home.

That's another thing the Prime Minister says: "There is no brain drain. People aren't leaving the country for higher-paying jobs." When I campaigned I heard that all the time from places like Wescam in Flamborough and other high-technology places like Nortel, which told me: "We can't attract people. We're losing people to the United States because they pay so much more than we do and the income tax rate is so much less." In some of the states, New York, for example, people's net income after taxes is about 50% higher than it is in Canada.

To conclude, it's an honour to be here debating this bill. It's yet again another part of our aggressive campaign to cut taxes and create jobs and prosperity. At the same time, it is consistent with our Common Sense Revolution and Blueprint commitments, that when we say we're going to do something, we do it.

1910

Mr Ted Chudleigh (Halton): It's a pleasure to stand in the House this evening to talk about the More Tax Cuts for Jobs, Growth and Prosperity Act. What a wonderful ring that has: "more tax cuts." People in Ontario are beginning to expect to have more tax cuts as time goes by, and this government will continue to deliver that.

In 1995 we had a vision for this province-a vision that this province could be healthier, could be richer, and that the people of Ontario could be better off than they were at that time. We espoused that vision in the Common Sense Revolution in 1995 and we fulfilled those promises in that document. Along came 1999, and we printed a second vision called the Blueprint. That vision was what we saw for this province over the course of our next term of office.

Our party has a very strong vision, unlike some of the other parties that occupy this House, I see that in the Toronto Sun of yesterday the member for York South-Weston was quoted and he said: "What is bad about us is that we don't stand for very much. We have got to start defining positions.... We need to be bolder, more innovative, and reach across the cross-section of people that make up this province." This was from the Liberal Party of Ontario.

"`We are not putting forward a vision of where this province should be going in the future,' said Cordiano, adding Liberal support is dwindling among its core supporters." It's sad for a political party to admit that.

We learned long ago that if you have a vision for this province and you adopt a policy that will espouse that vision, the people of this province will support you. Part of our vision was to come up with a 20% tax cut over the next term of our office, and that tax cut has already started to be implemented with a 5% cut in personal income tax rates on July 1, 1999.

No less a body than the International Monetary Fund, the IMF, agrees with the way that Ontario has approached the economy in this province. They believe that tax cuts create jobs, jobs and more jobs, 43,000 new jobs, as my neighbour from Wentworth pointed out in October-43,615 new jobs since we were first elected in 1995-the fastest growth.

Interjection.

Mr Chudleigh: The member for Ottawa West-Nepean agrees that jobs are what governments should be all about. The best social program in the world is a job. People of Ontario deserve those jobs.

The IMF goes on to point out that it "has urged the Liberal government in Ottawa to concentrate its looming surplus on debt reduction and tax cuts, and to resist pressures to crank up spending"-good advice from the International Monetary Fund.

Second, they continue to recommend:

"The IMF-which regularly reviews all member countries-also urged the government to cut deeper into unemployment insurance, saying higher regional benefits discourage unemployed workers from moving to find a job."

I had the opportunity in my younger years-I won't go into saying just how long ago that was-to go to school in the United States, at Michigan State University. That was the team that won their football game on Sunday: 28-35, I think it was. It was a good game too. While there, I met a lot of Americans and I had six roommates. We still visit. They were all males in those days; all my roommates were males. We still get together every two years. Their families are spread across the country. Their unemployment insurance payments don't encourage them to stay in one locale. It's not unusual for the family to have the parents living in Arizona, he's living in Akron, Ohio, and he has sons and daughters in Chicago, St Louis and New York. It's a tremendous thing to bring a country together when a single family lives and visits each other across that country. It's a welding, a uniting of a country. It's something that Canada could well learn from.

The IMF goes on to talk about the economic realities we have in Canada today. We have a solid economy, we have low inflation, we have low interest rates, we have declining debt-to-GDP ratios and we have the lowest unemployment record in decades.

The federal government is coming up with what they estimate to be a $95-billion surplus over the next five years. I have heard economists suggest that that is a very low figure, that is a very low estimate of what surplus might be. I've heard that it might be as high as $135 billion. My goodness, what this country could do with those kinds of tax cuts over the next five years. We would be the richest nation on the face of the earth, with a booming economy that would never look back.

I would encourage the federal government to listen to the International Monetary Fund and to take their advice to heart. I point out for the members that Canada still has the highest tax rate in the G7 even with our 30% tax cut in personal income taxes in Ontario, along with 98 other tax cuts-99 tax cuts in all. What an amazing record for a government: 99 tax cuts in just four years.

Mr Garry J. Guzzo (Ottawa West-Nepean): And Allan Rock wants to defeat it. Is he still on that kick?

Mr Chudleigh: Poor Mr Rock. He just doesn't understand. He's a Liberal. I'm afraid he's just not quite up to the job.

Also included in the More Tax Cuts for Jobs, Growth and Prosperity Act is the land transfer tax, which is a refund to a buyer who is buying a home for the first time. I have three children: Jacquelyn, Raeanne and Eric, and each of them has purchased a new home. I know how much that land tax was a factor in their deciding to buy the house. So often you save for that first down payment and then you find out you've got an additional $2,000 to pay in land transfer tax. That land transfer tax refund for first-time homeowners is a very big thing. Extending that rebate is very important, especially in rural Ontario, where the cost of housing is slightly less than it is here in the GTA and where people might have the opportunity to purchase a home even faster because that tax rebate is there.

We've also made permanent the retail sales tax rebate on building materials for farmers. This has had a tremendous boom in rural Ontario. To give you an idea of what kind of magnitude this retail sales tax rebate might have on a farmer, if he were building a one-acre greenhouse, for instance, that would amount to about $30,000 that he wouldn't have to find the financing for and he wouldn't have to maintain that capital cost through his output. It has created a tremendous boom especially in the Leamington area, in the Niagara area, where greenhouse production is dominant in this province.

It's interesting that so much of our greenhouse production is exported south of the border. It started with potted mums many years ago, where we were exporting potted mums to the States in huge quantities: 10,000, 20,000, 50,000 potted mums per week during the winter were going into the States, and that number has continued to grow. It has always impressed me that here we are in what is seen to be a cold country and we're exporting a greenhouse product to a warm country, for instance Florida or Arizona, where you could grow these under shade cloth and export them into the New England states, but that wasn't happening. Ontario ingenuity from the farm community was building greenhouses, heating those greenhouses, producing what was without exception one of the finest products available in the marketplace in North American and exporting that product to the south in a very profitable way.

Following on the heels of those exports, we got into the bedding plant and transplant business. When I first started in the food processing business, we were importing tomato transplants, tens of millions of them a year, from the Georgia area. Today every one of those transplants is produced in a greenhouse right here in Ontario, along with the vast majority of, in fact I think almost all, bedding plants that go into the home market. They're all produced in greenhouses and that greenhouse production will be enhanced with the continuation or the making permanent of the sales tax rebate on building materials.

1920

That rebate is also going to be available for use on heritage buildings until December 31, 2000, up to a maximum of $3,000 per heritage building, another extremely important aspect of our countryside. All too often you go through the countryside and you see the marvellous banked barns that were built around the turn of the century, up until the early part of the 1950s, when most barns were no longer constructed in that fashion. These monstrous banked barns are disappearing from the Ontario countryside and the Ontario landscape, and it's a shame to see these things go. They no longer fit into the mechanized aspect of agriculture but they are a marvellous piece of our heritage. If a few dollars will assist in maintaining some of these heritage buildings for the future, I'm pleased to see it happen.

The companies in Ontario through the Canadian Federation of Independent Business have done surveys which have talked about the things that affect their businesses the most. One of those things is the burden of taxes. In the survey that they conducted in July 1991, the number one item was the total tax burden on businesses in Ontario: 81.8%, almost 82%, of the companies responding said that the total tax burden was the one thing they wanted to see lifted off their shoulders or reduced that would have the greatest effect on their ability to continue in business, to grow in business, hire more people and enter into more prosperity.

That prosperity has been improving in Halton. I'm pleased to say that a number of companies-Gordon Foods, which has located in my riding since the election, is continuing to grow and prosper. Axis Logistics has more than doubled their warehouse space and increased their business phenomenally since the election. Matthews steel, which located in about 1996, I think, in Halton, has been growing and expanding ever since. Co-Steel, which is a metal recycling facility, has been growing by leaps and bounds. I don't know what the percentage is; I'm sure the percentage increase they've experienced is into four figures. It's just a huge growth, and it goes on and on. SKD, an automotive manufacturing plant, has increased its floor space three times and has increased its sales five times since 1995. Karmax, when I was first elected, had fewer than 600 employees, and they are employers of well over 1,100 to date.

I'm pleased to have had this time tonight to talk about the More Tax Cuts for Jobs, Growth and Prosperity Act. That is what is going to give Ontario a vision for the future: more jobs, more growth and more prosperity.

Mr Frank Mazzilli (London-Fanshawe): It's a pleasure and a privilege to rise and speak on the More Tax Cuts for Jobs, Growth and Prosperity Act.

Before I get into that, I think it's important to go back to pre-1990, when high taxes under a Liberal government created an economy that created high unemployment. What we saw during that time was that the further taxes went up, it was directly proportional to government income going down. When that happened, health care was in jeopardy, our education system was in jeopardy. Not only that, but the deficit went up and continued to go up. Certainly all of the evidence at that time was of an economy that was not serving anybody.

Just to relate that to my riding, several subdivisions had started during that time: one was Bonaventure; another one was Summerside; another, Trafalgar Woods. Although these lots were there, there were no homes and there was no construction, and people were without jobs through no fault of their own because of a government that had let them down.

To the credit of the leader of the third party, they inherited an economy that had been run into the ground by the Liberal government prior to that. They did their best, but somehow at the end of the day that direction had started.

In 1995, Premier Harris was elected with the promise to reduce taxes by 30%, and that he did, sir. The reason he had to do it was because he had some very difficult decisions to make: the high deficit, declining health care, the declining education system. By reducing taxes, not only by 30%, government revenue went up by $6 billion, again evidence that the further the tax rate is reduced, it's directly proportional to government income going up. I suppose we can call it the new math. It's a math that only the Conservative governments in this country have adopted and have chosen to follow.

After that, in those three subdivisions that I talked about in my riding-Bonaventure, Trafalgar Woods, Summerside-guess what? Homes started sprouting all over the place as friends that I went to school with at Clarke Road high school starting building homes, raising families. Not only that, but their parents remained in some of the older homes. Pre-1990, many were forced to sell their homes and were unable to be around their children and grandchildren, again because they had been let down by a Liberal government that did not care for their future.

It's a pleasure to further continue in the direction of the first mandate where we will further reduce taxes by another 20%, thereby creating more jobs in our riding. More people will be able to hold on to their homes and more homes will be built. I certainly look forward to the further jobs that we will create through this tax cut.

Mr David Tilson (Dufferin-Peel-Wellington-Grey): I too would like to address the House with respect to Bill 14, the short title of which is the More Tax Cuts for Jobs, Growth and Prosperity Act. The long title is An Act to implement the 1999 Budget and to make other amendments to various Acts in order to foster an environment for jobs, growth and prosperity in Ontario.

Those two titles say essentially the same thing: to create a climate and an opportunity to expand the economy of this province, to provide more jobs, to provide more funding for our social services, for the poor in this province. We intend to create the climate that will do all of those things.

You ask yourself, how do you create that climate? How do you encourage new businesses within this province, small businesses to start up? How do you encourage businesses from outside the province, whether it be from other provinces or other countries, to come and invest here, or from the United States to come and invest here? How do you create that climate which will certainly create more jobs, more revenue, and hence more funding for many of the social problems that we have in this province?

I firmly believe, as do all the members on this side at least, that the answer to that is tax cuts. We're convinced that that is the answer, and we've been trying to persuade the federal government to change their philosophy. Recently, Minister Eves, the finance minister, met with the federal officials and has stated clearly that the federal government still doesn't understand. They don't understand that tax cuts create jobs and economic growth. The statement that was just recently made by the federal Liberal government in Ottawa clearly exemplifies the difference between the Ontario approach and the federal approach.

1930

Now that the federal government has said, and the member from Halton-you know, different figures are being thrown around. The figure that I have and that came from our Minister of Finance-what he was led to believe-was that the federal government has revealed that they are looking at a surplus of $100.5 billion. That's a lot of money. Then on top of that there's another surplus flying around. There's the surplus of the employment insurance fund, which is expected in the year 2000 to be $30 billion. Mr Martin has said they are only going to reduce the premiums by 15 cents when their very own actuary said, "Reduce it by 55 cents." That $30-billion surplus is well in excess of the $10 billion needed to run the program, and they've got a $30-billion surplus. I'm not even talking about the surplus that the federal government has.

Clearly, the federal government cannot assume that a budget surplus means they can now spend. That appears to be what they're saying. There have been little leaks-talk about leaks, as the opposition talks about-about how they're going to spend all this money on new programs, which I'm not so sure is the answer. They are ignoring taxpayers' calls from all across this province to lower the tax burden.

Members before me-the member from Hamilton-Wentworth, I believe, and Halton and others from our side-have given examples. All across this country there have been cries, there have been pleas, from people from all parties, including the federal Liberal Party. There are people in the Liberal Party who have pleaded for a reduction in taxes. Why? Because why would you invest in a country or in a province which has high taxes when you can go just down south and the taxes aren't as high? Why would you do that? To remain competitive, we must reduce our taxes.

We promised in the Blueprint, which the member from Halton-Wentworth has showed the House, that under our government all existing government programs would be reviewed and would be justified for cost, necessity and efficiency. We believe the federal Liberal government should do exactly the same thing.

All of this comes to the bill, Bill 14, which is a budget bill. There's nothing new in this bill. We said we were going to do these things, and now we're going to do them, assuming that this passes. Anyone who sat through the budget knows exactly what's in it, because that's what this does. With the time allowed for me, I only intend to talk about a couple of things, if I have time.

One is part XIII dealing with the land transfer tax credits to new home buyers, the extension of that and the increasing of the amount. I think there's a penalty provision that was recommended by the Provincial Auditor in the 1998 annual report. We're implementing Mr Peters's recommendation on that.

Part XX deals with farming, some of the credits with respect to tax that are being given to the farmers of this province.

If I have time, I will deal with those things.

There were a couple of press releases which came out, just to emphasize how I hope the members of the opposition, and particularly the federal Liberal government-what's good for the country is good for Ontario, and what's good for Ontario is good for Canada. It's a philosophy of cutting taxes that hopefully the members of the opposition will agree on.

The leader of the third party is here, and he has raised some questions about that. The members of the Liberal Party have expressed-well, I'm not too sure what the Liberal Party is saying, quite frankly. But it was interesting. There were a couple of press releases out just recently, over the weekend. There was one from Sault Ste Marie, from Ottawa and a few other places. I'm only going to refer to one of them; that's out of the Southam newspapers. It has to do with some comments that were made by the International Monetary Fund. I believe the member for Halton briefly referred to that. The International Monetary Fund is pushing the federal government to cut taxes over spending. They are urged by the International Monetary Fund to abandon this 50-50 approach which the Ottawa people have been pushing forward.

Mr Howard Hampton (Kenora-Rainy River): David, tell us something that's new and surprising.

Mr Tilson: I'm glad you know all about this, member of the third party, and I hope it finally reaches you. I'm saying it over and over, yes. What I'm saying is nothing that you haven't heard before, but for some unearthly reason the members of the third party, particularly you, don't get it. You don't understand it. You don't understand basic economy. You showed that when you were in power from 1990 to 1995. Your party and your government were an absolute disaster. You proved you couldn't do it. So don't come along to me and say, "Tell us something new." We're going to tell you this because you obviously don't get it.

I don't want to put the leader of the third party to sleep-

An emergency alarm sounded.

The Acting Speaker (Mr Michael A. Brown): Please continue.

Mr Tilson: Something happened. As the lights dim in this place, I'll try to see the press release which came from the Sault Star.

"The International Monetary Fund is pushing the Chrétien government to abandon its 50-50 formula for divvying up future surpluses and instead devote the lion's share to debt and tax reduction ....

"The report released Friday by Finance Minister Paul Martin argued that cutting the debt and taxes would be more beneficial economically in the long run than increasing spending on health and education.

"`Debt reduction and income tax reform should be the top priorities in allocating the prospective fiscal surpluses,' it said in its annual financial and economic assessment of Canada.

"`While some additional moderate spending initiatives in the areas of education and health care would be useful, debt reduction and reform of income taxation are likely to produce more significant long-term benefits for the economy.'"

That is what this bill is all about, creating "more significant long-term benefits for the economy," not the short-term business that the leader of the third party and members of the Liberal Party have been espousing. We're not saying that. We want a strong economy to deal with the problems we've had.

The press release from the Sault Star goes on:

"Fears that the Liberals"-and this is the federal Liberals, of course-"were embarking on a massive spending spree were heightened by the recent leak of finance department projections of $47 billion in spending priorities over the coming five years.

"Martin, in releasing the report, made no reference to the International Monetary Fund's call for faster tax and debt reduction or its criticism of new EI spending plans."

He didn't even refer to this report, which further "urged the Chrétien government to speed up its pace of debt reduction, not only devoting the $3 billion a year contingency reserve to paying off debt but also any extra revenue that comes from stronger than forecast economic growth.

"Because of the uncertainties of the future costs of supporting an aging population"-and that's important when we talk about the long-term aspects of this: the ability to pay taxes, the needs. Our population is getting older. So if we're talking about lower taxes creating more revenue and we've got an aging population, what's wrong with reducing taxes for that aging population? What's wrong with that?

The Sault Star's final comment is, "Because of the uncertainties of the future costs of supporting an aging population, the IMF said now would be a good time to get the debt down faster to be better prepared to be able to cover those costs. Debt charges remain the single largest federal expenditure, eating up 27 cents of every dollar of federal revenue.

"The IMF also said Ottawa still has lots of scope for tax cuts."

1940

That's what the International Monetary Fund has said. I hope that all members of this House, all of the opposition members specifically, will encourage the federal government to get into this philosophy which is catching on all across the world.

I did mention that I was going to briefly talk about the land transfer tax amendments, which is in part XIII of Bill 14, which extends the credits and also increases the credits. The new section which is being added to the act authorizes the Minister of Finance to impose a penalty if a taxpayer fails to pay tax due to fraud or a wilful default. The penalty is to be "the greater of $500 and 25%" of the unpaid taxes attributable to fraud or wilful default.

This came out of comments that were made by the Provincial Auditor, who requested exactly what Minister Eves has put forward. I obviously don't have time to get into that. The Provincial Auditor, starting at page 88 of the 1998 auditor's report, gives an excellent summary of the land transfer tax program, what it does, what it's done in the past, how it's paid. Then it goes on to make some recommendations with respect to fraud.

The recommendation was: "The ministry should consider introducing additional penalties to defer tax evasion through neglect, carelessness, wilful default or fraud. In addition, in order to encourage the timely payment of taxes when due, all applicable penalties should be routinely assessed." That was recommended by the auditor and that's what this Bill 14 is doing.

Interjection.

Mr Tilson: I'd like to welcome the member for St Catharines to the House and look forward to his comments in the future.

I'm a great believer in how the housing market goes is how the economy goes. If you have a good process for building new homes around the province, it's going to provide jobs for the people building the homes, plus all the spinoffs that go on. I think we should do what we can to encourage the construction of new homes. So we are extending that another year with respect to first-time buyers. As well, we're increasing the maximum refund. We hope this will help families to buy their first home and to support job creation in the housing industry.

There are statistics from the ministry that say that for every new home constructed, at least two and a half years of full-time work are created and each resale contributes to about $17,000 in economic spinoffs, or approximately 0.5 person-years of full-time employment. In other words, new home construction creates greater economic activity than resales. Of course, it will not apply to resales; it will apply to the construction of new homes because the aim of Bill 14 is to create an economy which will create more jobs and will in turn improve the long-term effects of the economy of this province.

The maximum land transfer tax refund is being increased to $2,000. Again, the purpose of that is to continue to help families buy their first home and to support job creation and the housing industry. So it's twofold: Make it more affordable for new people wanting to buy homes and, in turn, create improvements to the housing industry and the construction industry.

To further assist first-time home buyers with the purchase of their newly constructed home and to benefit those who purchase homes valued at more than $200,000: The maximum refund of $1,725 under the current program amounts to the land transfer tax paid on a home valued at $200,000. The proposed maximum refund of $2,000, which it has been increased to, amounts to the land transfer tax on a home valued at $227,500. There will be material in our constituency offices, if this legislation is passed-and I sure hope it will be-that will explain to those new home buyers what the qualifications are to apply for that refund which is being extended.

Those essentially are my comments with respect to this legislation. I just want to close by giving you some of the details, some facts that show how I believe that what we've done in this province for improving the economy has gone great strides from where we were in 1995.

In the month of October, Ontario employment climbed by 43,600. Ontario's unemployment rate fell sharply, from 6.4% to 6%, in October. This is the lowest level since June 1990. Full-time employment was up 33,000. Part-time employment rose 11,000. In October, youth employment rose 5,400. The youth unemployment rate fell from 13.2% to 12.7% in October. Since the throne speech that was given back in September 1995, employment in Ontario has increased by 615,000 net new jobs. Since the first instalment of Ontario's personal income tax cut in July 1996, Ontario has gained 553,000 net new jobs. Since the June 1995 election, Ontario has gained 610,000 net new jobs. Nationally, employment was up by 80,000 in October. The national jobless rate fell from 7.5% to 7.2%.

Tax cuts are working. Pass Bill 14.

The Acting Speaker: Questions and comments?

Mr James J. Bradley (St Catharines): What has happened, of course, is that this government, as the Dominion Bond Rating Service would say-a bastion of conservatism if there ever was one-was losing $5 billion a year in potential revenue that it could have had. That's why it has never balanced its budget since it's been in power.

What I would like to know is how on earth we're going to get more money for ophthalmologists in St Catharines if indeed you're going to give the money away in more tax cuts. I've been getting calls from right across the province from people who are saying, "What the heck is going on with ophthalmologists?" I have to explain to them that we have only 12 or 13 ophthalmologists in St Catharines. Some of them are not working full-time. For a variety of reasons, they cannot be full-timers. We need 14, even by the very restrictive regulations of the Ministry of Health of Ontario.

They hatched a great plan. They said: "Never mind, we'll still give tax cuts. We'll just send those elderly people down the QEW." It's an awful place to drive, along the QEW. I have to drive it; I know what it's like. Today, I noticed the Gardiner Expressway was shut going both ways. That often happens on the QEW now. "We're going to send elderly and sick patients way down the road to Hamilton." Then I asked some of the people from Hamilton: "What about your ophthalmologists? You've got 20 for your general area." They said: "They're already too busy. You have to wait several weeks to get an appointment with an ophthalmologist in Hamilton." So not only is it an imposition for people in the Niagara region, but I can also tell you that it's going to cause havoc in Hamilton. Is there a solution, at least in the short term? There is. That solution is to raise the cap for ophthalmologists in the Niagara region. Then people would appropriately get good eye care, because we have, on a per capita basis in the Niagara region, the most elderly population in all of Ontario.

But you people are busy giving away the money to the rich. The richest people in the province benefit the most from the tax break. Meanwhile, people are suffering with their health care in Niagara. I say that should be our priority.

1950

Mr John Hastings (Etobicoke North): I'll try to get this discussion back on track a little. The member for St Catharines always goes off and talks about ophthalmologists. Perhaps they aren't working after June because of the cap, but the real issue is getting this Ontario economy moving again.

I would like to relate a very brief story about a gentleman in my riding who was out of work in 1995 and came to me. We managed to get him some help in computer training. Out of that, he got a job in 1996-97 working in a factory that makes women's purses, one of the key areas of the Ontario economy. Perhaps it doesn't have all glitz and glamour of high technology, but he was relating to me the other day, when I was helping his father over an insurance policy, that they have hired another 30 people in addition to what they had in 1996-97, which was about 32. That's 30 more success stories. When you look at some of those people in terms of where they were coming from, they had been out of work for a long time.

Interjection.

The member of the New Democratic Party says, "What's new?" We have some good news for him as well. That is that his Saskatchewan brethren, the NDP, a group that have resisted, like the federal glibs, for so long bringing about any kind of meaningful tax reduction, have recommended-believe it-an aggressive tax reduction strategy for Saskatchewan over the next five years. Even there they are learning. If we could only get our federal brethren to believe wholeheartedly in tax reduction. I was at a meeting the other night where my federal counterpart said that the international tax rates federally are a little out of kilter and therefore we have a competitiveness problem. We sure do, and that's why we're moving so fast in Ontario.

Mr Bruce Crozier (Essex): I'm pleased to rise, for a couple of minutes at least, to speak to the comments of the government members. They've done very well to carry the message they've been given to carry. The only thing is, last Friday, when I was back in my riding, I met with a number of interested groups in Essex county when it comes to our health care system. The government would lead us to believe that they, through their effort of tax cutting, have created one of the greatest health care systems one could ever have.

Let me tell you, I don't know whether the members across meet with different individuals in their constituencies than I do, but it certainly isn't part of this budget that I can see to make the situation any better when it comes to long-term care in some of our facilities, when it comes to at least a direction in which they're going with long-term care to relate to the level of care that is given in nursing homes. In fact, the audit is done on these nursing homes; they come in and determine the level of care of the individuals in that nursing home and then the auditors go away saying, "We have no idea what the ministry is going to do with this, because there are no policies, there's no direction, there's nothing in place so that you can get some idea of how our assessment of the needs in this particular long-term-care facility is going to be handled."

On the surface, they tell us it's a great management scheme they have in place, but it's what happens underneath the water, it's how the duck's feet are moving. Are they moving at all, or are they going in reverse? That's something we hope to find in this budget.

Mr Hampton: Since I've heard the government members go on and on, I think it's only fair to comment on some of the things they've had to say. Some of the government members somehow believe that they have the mantra of tax reduction. I want them to know that in fact if you add up all of the different fee increases by this government that affect modest- and lower-income and middle-income families-tuition fee increases, prescription medicine copayment fee increases, motor vehicle registration fee increases, fishing licence fee regulations, hunting licence fee increases-it far surpasses anything that middle- and modest- and lower-income families have had by way of a reduction in the income tax. The people who've benefited from the reduction in the income tax have overwhelmingly been people who have very high incomes. That's been your real tax strategy. You increase taxes on lower-, modest- and middle-income families; you cut taxes on people who are already the most well-off. That's what it boils down to.

You know what? NDP governments have reduced taxes but they've done it after they balanced their budgets. Saskatchewan balanced their budget five years ago and, after paying down some of the debt that was left to them, they are now in a position where they can reduce taxes. But I want you to note, the taxes that they're going to reduce overwhelmingly will impact on lower-, modest- and middle-income families, not the highest-income families.

Finally, you want to take credit for the American economic boom which has resulted in us selling more cars, more trucks, more aircraft, more pulp and paper, more lumber than ever before into that market. Please, be a little more modest than that. The American boom has helped us much more than any tax scheme of yours.

The Acting Speaker: Response?

Mr Tilson: I'd like to briefly comment, if I have the time, on all of the comments made. The member for-

Mr Hampton: We were generous.

Mr Tilson: I'll do my best. You're last; I may not reach you.

The member for St Catharines got into his usual speech. One of the comments he did talk about was the bond-rating process, and that may or may not be a fair comment. The only issue is, the economy of this province had become so terrible, almost on the edge of bankruptcy. It's not easy to turn around a province that has a deficit of $11.3 billion. Everyone has seen how difficult it is to modernize our government. It's not easy to do that, so naturally it's going to take some time.

I'd like to thank the member for Etobicoke North. He asked the question how we're going to get the economy moving again. I believe we have already got the economy moving again, which I think he said, with our economic policies.

The member from Essex talked about social problems. It's a typical Liberal comment, of course. You spend money first and then you devise policies. You spend money you don't have. That's what the Liberals have done. That's how they started us in this mess that we're in.

I've saved for last, of course-

Interjection.

Mr Tilson: I've only got 23 seconds.

The member for Kenora-Rainy River, the leader of the third party, started talking. If you make over $80,000, he wanted to tax the heck out of those people. That was his pitch-tax, tax, tax-and he hasn't changed.

The Acting Speaker: Further debate?

Mr Gerry Phillips (Scarborough-Agincourt): I'm pleased to join the debate on Bill 14 and to inform the House that I'll be sharing my time with the members for St Catharines, Prince Edward-Hastings and Essex.

This is quite a comprehensive bill, as the public may or may not be aware. It's well over 100 pages long, almost an omnibus bill.

I'd like to begin with a few of the elements within the bill. The first part of the bill deals with ambulances and some of the government members said, "We did what we said we would do." Let me remind you, what you've done and what this bill does is to download, dump ambulance services onto property taxes. Some of the members who were here in the previous government a few years ago would remember that Mike Harris appointed his own hand-selected group of people to look at what services should be funded off property taxes and what services should be funded off provincial revenues. That was headed up by someone called David Crombie. There were 14, all picked by Mike Harris personally. They said, "Don't do this." I carry this around with me. This was the panel's recommendation. In terms of dumping or downloading ambulance services on to property taxes, the panel said this: "The panel strongly opposes such a move. We are unanimous in this view." The entire panel said, "Don't do it." But when you get this bill, the very first thing that's in it, part I, is the Ambulance Act, and it is downloading ambulance costs on to property taxes.

2000

Surely if there is one thing that should be, to use the jargon, seamless, it should be our health care system. When an individual, perhaps at home, needs to come to the hospital for day care, for day surgery, for a clinic, surely we shouldn't be funding that off property taxes. That's what Mike Harris's own group said, "Don't do it." But Mike Harris decided to do it, and, temporarily, we were told today in a briefing, 50% of the costs will be handled by the province. But that's only temporary. That can be lifted with the stroke of a pen, and it will be.

When members say, "We did what we said we would do," I say to the people of Ontario, do you really want the quality of your health care system depending on the level of property taxes available in the area you live in? Will there be one health care system for those who live in tax-assessment-rich areas and another for those who live in tax-assessment-poor areas? Surely that doesn't make any sense for a health care system. But that's literally the first part of the bill.

The second thing the government members said was, "We're doing what we said we would do." I remember very clearly-this is the old Common Sense Revolution. I carry it around. This is on the sale of assets, where the government is selling off public assets. Here's what the government said at the time: "The money we make from such asset sales will not go into the government accounts. Every penny will go directly to pay down the $80-billion provincial debt."

The only thing that has changed here is that it used to be $80 billion, before Mike Harris came in; it's now $122 billion. What used to be $80 billion is $122 billion. What happened was that Harris sold the 407, got $1.6 billion, and in order to spend it the way he wants to spend it, he has now got to change the law. That's what we're doing. That's another part of this bill that the public should be aware of.

You thought we would be using the sale of assets to pay down this horrendous debt, $80 billion when he wrote the plan, $121 billion now, if you look at the budget, after four years of Mike Harris. He said it was $80 billion when he wrote this plan; it's now $121 billion. He is now saying: "I've changed my mind. When we sell off the assets of the province, we won't use that any longer to pay down the debt. We will use it to pay for the groceries. We will use it to pay for the day-to-day operations." It is a substantial change.

The reason I focus on this is because we now see municipalities planning to do essentially the same thing, saying, "Listen, we're going to sell off our assets, and we'll use it to pay for our day-to-day operations." The reason I raise this so strongly is because the government members said, "We're doing what we said we would do." What you promised was that when we sell off the assets, we would use it to reduce the debt. It's not happening.

I might add that I continue to remind members because I'm afraid the government will use the 407 model as the model for selling off our assets. I think the users of the 407 have been so badly treated by the government of Ontario. Here's what happened to them. The government built that road for about $1.6 billion and sold it to the private sector for $3.2 billion. They "made a profit" of $1.6 billion, put it in the budget, and now they're changing the law so they can spend it. But how did they sell it off for that amount? They told whoever bought it, "We'll sell it to you for 99 years." I can remember standing here in the Legislature debating the bill and the government members guaranteeing us they wouldn't sell it for more than 30 years. They sold it off for 99 years. They told the buyer: "Listen, this is a guaranteed money-maker for you. As a matter of fact, we will guarantee you can take the tolls up every year for 15 years at inflation plus 2%. Furthermore, if anybody doesn't pay the tolls to you, they won't be able to renew their licence." That's the second part of this bill that the public should be aware of: that we are in this bill, rather than reducing debt, permitting the government to use these funds for operations.

I want to also talk about a comment the government members made about the way the government spends the taxpayers' money. One of the members mentioned in their platform, "Under our government, all existing programs are reviewed and must be justified for cost, necessity and efficiency." Well, as it turns out of course, less than a week ago our Provincial Auditor issued their annual report. The public I think understand that the Provincial Auditor is someone who is hired on the taxpayers' behalf to act as an independent watchdog on government spending. That office has a budget of $7.5 million, and its role is to be independent, to look out for the taxpayers' interests and to provide an objective, unbiased analysis of how the government is doing on spending the taxpayers' hard-earned money. It's well worth a read. This may sound like typical opposition rhetoric, but I think anyone who would read the four reports that have now been produced on the Harris government-the 1996 report was the first year, the 1997, the 1998, and this is the 1999. This really is a report card on the first four years of the Harris government.

Here's what the auditor said. The auditor was asked, "You've now seen them in action for more than four years"-the Harris government."From your perspective, do you think that under this government our tax dollars and the services provided by the government are being provided more efficiently and more effectively?" What did the auditor say? "Well, as my report points out, they really aren't."

In other words, after four years, when Premier Harris has promised that the government would operate more efficiently and more effectively, the independent auditor, who has the responsibility for giving us an unbiased, objective view on it, says that's not the case.

He goes on. He says that the improvements aren't very noticeable at all. As a matter of fact, the accountability has to be there for the spending of the public funds and it's just not in place. Later on he says, and I think this is quite strong language for an auditor or for anyone looking at the government books, "Clearly, the taxpayer is taken for a ride and necessary follow-up almost dies for lack of attention."

The auditor went on to point out that in the family services operation there are almost 200,000 young people who are not being dealt with properly. The payments are in arrears from the deadbeat dads, and that's up dramatically. He points out that on outsourcing, and the auditor was very strong on this point, the government outsourced, for example, road maintenance, and it looks like it cost more money, not less money. Actually, the government then went out and spent our taxpayers' dollars hiring two more auditors, who proved the point for the Provincial Auditor.

Don't take my word for it. I would encourage the public to get a copy of the auditor's report and reach your own conclusions on how well Premier Harris is managing your finances.

Mr Gilles Bisson (Timmins-James Bay): Terribly.

Mr Phillips: "Terribly," as my colleague said. It is throughout the report. One thing he's particularly concerned about, I might add, is that it is young people, vulnerable young people, who are being particularly hard hit.

2010

I wanted to also talk a little bit-because much of the talk has been around the finances and the effects of the tax cut. Trying to be as objective as one can be, if you look at the government's own budget, what do they attribute the growth in the economy to? What is the single most important reason the economy is growing, not according to the opposition, but according to the government? It is exports. The government points out in its budget document that in 1989 about 27% of Ontario's gross domestic product was exports. In 1998, nine years later, it's almost 50%. In 1998 it was 48.9%. I dare say this year it's well over 50%.

It's important, when we are trying to assess why the economy has been growing, what has been driving the economy-let's just accept at face value the government's own analysis, that it is exports. My point on the tax cut has always been this: The last time a Conservative government balanced the budget was 1969. That's not me speaking. I went to the legislative library and asked the question, "When was the last time there was a balanced budget in Ontario?" This is the research officer and this is their independent analysis of it. In 1989-90, as the auditor said, there was a surplus. The last time a Conservative government balanced the budget was in 1969-70. I urge you to look at that.

What has happened is, when Mike Harris became Premier, the federal government and the other provinces had a deficit of $50 billion; that's the annual deficit they were running. Last year, the federal government and the other provinces ran a surplus of about $6 billion. It went from a $50-billion deficit to a $6-billion surplus. We in Ontario continue to run deficits.

When I talk to my business friends, they say, "He has certainly balanced the budget." He still has not balanced the budget. "Yes, but he has reduced the debt." Are you kidding me? When Premier Harris became the Premier, the debt of the province of Ontario was $88 billion. These are their own numbers. It's now $121 billion, although a portion of that is Hydro. The real number is probably about $112 billion. The debt of the province is up almost 25%, and still not a balanced budget. When I say we've had to borrow the money for the tax cut, I believe that. The government always puts in its budgets the estimate of how much revenue they're losing as a result of tax cuts. They themselves have said it's roughly $5 billion a year in forgone revenue.

It's important, when we debate tax cuts-and I appreciate that Harris won an election. He got elected; he won. I will say to the people of Ontario, look at what has happened to the debt of the province of Ontario. My colleague mentioned the credit rating. Mike Harris has now gone four and a half years and the credit rating of the province has not changed a bit. Under the NDP government, it was downgraded three times. It was AAA in 1990; it was downgraded to what's called AA-; three downgrades. I remember when Mike Harris was on this side of the House, he used to taunt Premier Rae about the credit rating. We're now four and a half years into Mike Harris's regime and the credit rating has not changed a bit; it's still the same as it was under Premier Rae.

Simply look at the facts when you are judging whether this has been the right policy. Firstly I'd say, recognize what has driven Ontario's economy. It's exports. By the way, it's extremely important all of us understand that. There's no place in the world now that relies as much on exports as Ontario does: 90% to the US, and well over half that is auto. I say, thank goodness for the US. It has been the engine driving Ontario's economy. As all of us know, it's always uneasy to rely that much on one customer, if you will, the US, in the case of an economic downturn. As I say, when we're debating the merits of the tax cut, it's important to recognize that.

This bill also has a number of other extremely important elements in it. I do want to say that there are changes made to the Ontario Securities Commission and the Toronto Stock Exchange that I believe are important and will strengthen the securities commission. Again I say that we now rely heavily on the securities commission to monitor our financial markets, and I think that will be a useful tool.

There's also probably about 40 pages in here of more changes to our property tax bill. It's property tax bill number 8. For those of us who follow the property tax debate, this is the eighth in the last 24 months, I believe-the eighth attempt to get the property tax situation fixed. It's got some fairly heavy-handed tools in here. It orders municipalities to give the province their financial by-laws. It gives the government a very heavy hand in dealing with municipalities. It also continues to try and put Band-Aids on the property tax bills. In fact, it goes back two years now for trying to fix problems created by previous bills. It was retroactive-

Mr Bill Murdoch (Bruce-Grey): Is it right yet?

Mr Phillips: My colleague says, "Is it right yet?" It probably isn't. If you were betting, it's still not right. As the problems created by this come out, I don't have any doubt we'll be dealing with another property tax bill in the very near future.

Mr Murdoch: What would you do, Gerry?

Mr Phillips: My colleagues always say, what would we do? What we would do is put-

Mr Bradley: I would let him speak.

Mr Phillips: He'll get an opportunity to speak later.

I would say that the first thing you would be wise to do would be to focus and spend some time on managing the province well. I go back to what the auditor said, and that is that in his judgment-

Mr Bradley: They're going to fire the auditor.

Mr Phillips: They may try to fire the auditor, because he's telling it like it is.

Mr Rick Bartolucci (Sudbury): The truth.

Mr Phillips: Like the truth. And he says, when asked, "Are things getting any better," "Well, as my report points out, they really aren't."

The member says, what would I do? The first thing I would do if I were the government, I'd say, "Let's try and manage things around here." What did the government try and do? They got mad at the auditor. What the auditor said was: "If you don't like the message, you attack the messenger. I have a message they clearly don't like, and I will stick by it."

The government doesn't like to hear that it's mismanaging things. The Minister of Finance today I think was quite forthcoming in saying that it looked to him like several of the ministries were not doing their job.

By the way, the auditor was very clear. He said, "In 1995, I made recommendations to the government, but they didn't follow through and therefore we're making the same recommendations again." This is in an area where we're spending hard-earned taxpayers' dollars-$800 million of it. The auditor, four years ago, told them what to do and they didn't follow through on it.

I guess Premier Harris finds it very convenient to be out attacking squeegee kids, and I understand his polling suggests that the squeegee kids are good to attack. But I would say to the public, would he not be advised to spend just as much time on managing the $60 billion that the government's spending as we are on trying to get after the 200 squeegee kids? You can get after the squeegee kids, but I say he would be far better spending his time fixing these problems.

So I'm pleased to begin the debate on what's really an omnibus bill, and look forward to future debate.

2020

Mr Bradley: No wonder the member for Scarborough-Agincourt has so much credibility. He's familiar with all the facts and figures associated with the government. Any independent-minded person, objective person, can't help but be impressed by the intervention that is made by the member for Scarborough-Agincourt, the Liberal critic in the field of finance and economic affairs.

The one thing that he doesn't have, the one factor he didn't mention, of course, was that the government has now implemented 675 new tax increases in the form of user fees in the province. Now, I'm looking for more of them. I haven't had a chance this week to look for more of them, but there are all kinds of them out there. Who do they impact? Do they impact the people who have the cocktails at the Albany Club, the exclusive Tory outpost in Toronto? No, they do not. But they impact upon people of modest means in this province.

I notice the downloading taking place again. I was at a meeting where there were a lot of people from the Downtown Association in St Catharines. On the seventh version of the property tax bill it had been changed again and the province implemented a formula that did not allow these individuals to get the kind of reduction through assessment that they were deserving of. They were angry. Of course, they were turning their guns-and I say that only figuratively-at the municipal government. I had to explain to them that Mike Harris and his band of merry Tories had downloaded an additional $18 million in services and the financial responsibility for those services to the local level.

Now, I see this bill deals with the ambulance services. It's just absolutely foolish to know that ambulance services, a form of health care, would be on the local property tax. It will probably be in some areas farmed out to privatization, because they're lining up at the border now, Rural/Metro and other major companies in the US which charge fantastic amounts of money to ride in their ambulances and for the care that's in those ambulances. They're lining up at the border wanting to come over here to take part in what Ontario is doing.

They're also selling off assets. If you listen to the right wing, whether it's in this House or on municipal councils, they want to sell everything; they want to have a fire sale. Why? They want to have an immediate tax reduction or they want to have some grandiose project that they think is going to be good for their particular community and they want to sell off all these assets. The latest asset is Hydro. Some of them actually want to sell off the power generation or the power distribution in their area and give that to the private sector, who will gouge the people of the community. Others are saying, "Let's keep it but let's make a huge profit on it so that we don't have to charge as much in other taxes."

Of course, once again that comes down hardest on those who are least able to pay, when in fact it should be a public service. It should be at cost to the people in a particular area. Not everybody can have a Cadillac, not everybody can live in a mansion, not everybody can go on six trips to Barbados per year, but we can provide basic services for people. That's the role of government. This government is diminishing that role.

Governments should not be intervening in all areas of our lives, but public services are useful in a certain number of areas and are something that makes us different from the United States. I know that if you're rich in the States that's a great place to be, because you can get even richer. But take a look and contrast our country with the United States in terms of the difference between the very rich and the very poor and you'll see that the very poor in the United States, people of modest means, do not do well at all.

I also noticed that the assets were supposed to be sold off to pay down the debt. I used to listen to the chamber of commerce and the Rotary Club and the taxpayers' federation and so on tell me, "We've got to pay down the debt," and now I don't hear that any more. Now: "Let's get those tax cuts in there. Let's put more money in the pockets of the richest people in the province so they can give more to the Conservative Party." It used to be that people said the debt is a problem. I agree; the debt's a problem. Let's pay down some of that debt and let's reinvest in good services.

Look, you've already cut your taxes in the first term. I don't think people are going to go back and take those taxes back now. That's in the past. I don't think you can live going back in the past that way. But look into the future. Your health care services are deteriorating. One thing we can be proud of in this province over the years-Conservative government, Liberal government, NDP government-was that we had a strong and vibrant public health care system. That is deteriorating, and it's most unfortunate. In our area, some of the hospitals are incurring deficits because of obligations entirely outside their control. How are they going to meet those deficits? They're going to cut services further. If you have anybody in the hospital, you darned well better have someone from the family there to look after them because, I'll tell you, it's not a pleasant experience. I think people want first-rate health care and are prepared to pay for it through their tax dollars, and not through privatization, which means the wealthiest people in the province can buy the best doctors and the best services and equipment available, while the rest of the population simply has to put up with what's left. Not that system, but a system where there's a public investment in health care so we can return to a condition where we have one of the finest health care systems in the world. When I talk to people other than real right wing Tories, who say, "Give me the tax cuts," they say, "Please invest in good and necessary public services such as health care."

As I mentioned earlier, in St Catharines some specialists, such as the ophthalmologists, simply cannot serve all the people in the area and are now going to be capped and we're going to have people in this province going without the appropriate eye care they need.

I think you make a mistake in going further with them. You've done it already. You can take credit for that, if that's what you want to take credit for. But when you're looking into the future, particularly if there's a downturn in the economy, you're simply not going to have the revenue to deal with the many obligations you might have at that time.

Disadvantaged people in this province are really behind the eight ball. I listen to this government-and I'm a pretty forgiving person, in terms of what offences may have been committed in the past, and I'm not trying to be nasty. But when I hear people in this government get up from to time-there was a question by the member for Stoney Creek today, when he got up in the House and wanted to bash students. He said student debts are frauds, to do with OSAP. Then I heard somebody else get up and lob a question about fraud to do with welfare, and the Premier suggested that somehow everybody on welfare has a cottage. Well, the only cottages I'm are aware of are the Tories', who have wonderful big cottages. But I shouldn't even say that.

Interjections.

Mr Bradley: Be that as it may, I heard members on the government side say: "Look, if somebody defrauds the Ontario Student Assistance Program, they should not get a cheque from the government of Ontario any more. And if somebody defrauds the welfare system, they should not get a cheque from the government any more." But apparently it's all right to defraud the income tax system in the province. If you commit income tax fraud, you still get a government cheque; in fact, you might even keep a seat in the cabinet. I think that's unfair. Either do it for everybody or nobody. I wouldn't even be talking about this in the House if it weren't for listening to people on the other side condemn people who are at the bottom of the ladder, while they ignore certain other offences which I think are equally deserving of some interest and consideration by the government. So disadvantaged people have not done exceedingly well.

Interjections.

Mr Bradley: Well, your own figures show that it's costing you $5 billion a year in lost revenue, because you implemented the tax cuts you already have. The Dominion Bond Rating Service-the member for Etobicoke North, who knows these things, knows that is no bastion of socialism; that is a hard-core, hard-nosed, right-wing organization which objectively evaluates debt and so on-said this government is forgoing approximately $5 billion a year in revenue. That's why you have never balanced the budget. You bring in a budget balancing bill now, after you haven't balanced the budget for the past four years.

The credit rating, my friend from Pembroke would say, "We used to listen to the government get up in this House years ago and talk about the AAA credit rating in this province." Well, I haven't seen an AAA credit rating around this province in a long time. In fact the last time we had a AAA rating from all the rating agencies was when the Liberal government was in power. Now, with the Mike Harris government in power, it's well downgraded.

2030

Something interesting is happening to public services. The right wing does this to public services: They try to discredit them to such an extent and bring about a situation where there is a lack of confidence in public services that people accept a radical solution that they wouldn't normally accept. Let me give you an example. I don't know who took this poll today; it's probably rigged wording because most polls, one way or the other, tend to be answered in a certain way depending on the question asked. They've discredited the public health care system so much that now, when you say to some people, "Would you pay more independently out of your own pocket for health care?" in desperation some will say yes.

They should know there is another option. The government can invest tax dollars in a health care system. We need not have a system where the amount of money in someone's wallet, the amount of assets a person has, the value of those assets and the amount of money somebody has in a bank account shall determine what kind of health care he receives in this province. We never in this country want to get into that situation. If there's one thing I would stand for in this House, that I would fight for to the very end, it would be for a publicly funded health care system, and a high-quality health care system at that.

What you now see is people accepting privatization of certain services who never would have done so before. Discredit the public education system enough, for instance, and people will start to talk about privatization of universities. You know who will benefit from that. The wealthy kids will be able to go there, and other people won't be able to go there. Just today I listened to some university presidents applaud wildly at the prospect of getting more revenue when you deregulate tuition in certain areas. I can tell you what happens there. The wealthiest people will not be affected by that. They will still get into those schools of business, law, medicine or whatever it happens to be, and so will the brightest students who can win scholarships. But other good students out there simply will not have that access. We'll have a two-tier health care system and a two-tier education system if you people keep moving in the direction you're moving at the present time.

I look at this bill and say that what you're going to do by withdrawing more revenue from this government is diminish services more. There was a bad accident today on the highway, most unfortunate. I'm sure every one of us in this Assembly felt very badly hearing the story of the accident on Highway 417. If you cut back services on those highways-and some of the rural members particularly know this-if you don't get the service we used to get from the Ministry of Transportation in terms of cleaning, salting and sanding those highways, you have an awfully dangerous situation. The main roads tend to be looked after.

Don't go back to that system. The auditor, in his report and in his interview on Focus Ontario, said, "Don't just do privatization because ideologically it's something the government should stand for. Do as the Davis administration used to do. Yes, they were Conservative; yes, they were cautious in many ways. But they were very practical, and they didn't implement that if they didn't have to.

I notice today that the Canadian Taxpayers Federation approves of the bill brought forward by Dalton McGuinty, which would control government advertising, because this government spent $100 million on government advertising. The issue wasn't how much they spent. The issue was essentially the nature of it, and it was purely partisan political advertising for the political party that already had money flowing out of its war chest.

Those are a few comments I'd like to offer on this bill.

Mr Ernie Parsons (Prince Edward-Hastings): The bill before us is An Act to implement the 1999 Budget and to make other amendments to various Acts in order to foster an environment for jobs, growth and prosperity in Ontario-quite a mouthful. I spoke earlier today about the irony I found in some of the titles, but I have grasped that repetition is not a cardinal sin in this House. I suggest it could also be phrased a bill to enact more health cuts, more education cuts, more user fees. I think that would be truth in advertising.

Each evening I like to sit at the computer on the Internet and read newspapers, predominantly from the US but from a variety of areas. It gives me a chance to get a little different perspective on what's going on in the world. What I have noticed in the US is stories repeatedly referring to shortages of employees and shortages of workers, and a substantial number of ads looking for employees for good jobs. I contrast that with the ads in Ontario, where far too many are for minimum-wage jobs.

I challenge this government to produce for me the proof of all these jobs they've created. I would like to know how many hours a week each of these jobs are, and I'd like to know what the average pay for them is, because I believe, based on my experience, talking to people in my riding, that these are part-time jobs and, by and large, minimum-wage jobs.

I think it's wonderful that the economy in Ontario is doing as well as it is, but I would remind everyone that we're really talking the greater Toronto area when we're talking about how well the economy is doing.

We owe a debt of gratitude to the US. The exports are the engine driving this province. It has been mentioned previously that 49% of our gross national product is exports, predominantly to the US. They're doing well, but strangely they haven't had tax cuts. They've kept the taxes up and they've kept the services up, and the economy is doing well. Here in Ontario, we have had tax cuts and we're saying our economy is doing well, but in fact it's tied to the US. I think we can produce the evidence that says that the healthy American economy, with no tax cuts, is what's driving us well.

However, let's think about that argument about tax cuts. We've seen a series of them over the last four years. I like tax cuts, but I also know, from talking to people, what the real human impact is of these cuts. I've talked to people waiting to get into hospitals. I've talked to people who have sat on stretchers for days in the hospital. I've talked to students who can't afford post-secondary education. I've talked to farmers who have seen their ag offices close all over their areas. I've talked to small business that hasn't seen the benefits from this government.

The question that needs to be asked is, if tax cuts are the right approach, when is enough? When is the right amount of cut to the appropriate goal? When do we reach the target? I think about Ottawa, and I am somewhat dismayed in this House at how much time, particularly from the other side, is devoted to telling us what's wrong historically and what's wrong with the government in Ottawa, rather than looking to the future. I don't think any of us got elected to debate what happened four and eight years ago. We got elected to debate and decide what will happen four years from now.

The government in Ottawa has a surplus. They haven't cut taxes and they have a surplus, but that's wrong. Somehow it's wrong because they have surplus, and yet here in Ontario we've cut taxes and we have an increasing deficit, but that's right. It's OK to have an increasing deficit. I don't think that's right. I can understand at times why the city of Toronto is idly considering separating from Ontario. They don't want to separate from Canada, but they want to separate from Ontario. They realize that the prosperity that has come to Ontario has come to them because of the auto trade.

We're making the cuts, the debt has continued to rise, and we call them savings. We have still quite a number of children at home. We could reduce the amount of money we're spending on groceries for them. That would be wrong, but we could reduce it. Not only could we reduce the money we're spending on groceries, we could call it savings. We have found savings by not buying groceries this week. That's morally wrong. It's not the right cut. There are hungry people in this province far out of proportion to four years ago.

I have seen with my own eyes in the school systems in my riding schools that never, ever had to feed children breakfast. Now I see over 30 schools in my public board in Prince Edward-Hastings providing breakfast clubs for students who are coming to school hungry. That should tear at everyone's conscience, that we have, in our wonderful Ontario, hungry children, not coming early for a social aspect, coming early so they can have breakfast and realizing that in many cases they won't have lunch. But at least the community, at no cost to the taxpayer, has got one meal into them.

2040

We heard earlier from the member for Halton how the US unemployment system works, where it encourages people to move all over the country to get a job. When I talked to people in Prince Edward-Hastings, what they said to me was that they wanted their children to be able to graduate from school and find employment in our Ontario, in their community. We can look at the bottom line for dollars, but we also need to look at the human aspect of our province.

The wonderful relationship that existed for centuries in Ontario of grandparents, parents and grandchildren being together as a family unit is being torn apart by our economy. The wonderful supports that existed for families to support not just their children but to provide support to their parents have changed when our young people have to go not necessarily to other parts of Ontario but perhaps to other parts of Canada or to the US. Quality of life needs to be a measurable factor in there as much as providing a tax cut to the extremely well to do.

It is ironic, in a sense, that as we're losing the family support system, as our family units move all over the area, the government itself has cut so many of the institutional supports. Seniors are having difficulty accessing home care or are limited in the number of hours of home care, with no relative near to make up that difference and to make up that support.

I watch some of the decisions that are going to be enacted by this bill with the Ontario Realty Corp, and I look at the things we're selling as a government in Ontario. There is an expression we have around home that says you will never buy something as cheap as something you already own, and we're going to sell property to pay the grocery bill. It's not going to go to paying down the debt. We're taking property we own and we will sell it to pay the day-to-day bills. That works as long as we have things to sell, but it will force the province to a point where we're selling things that we really value.

I watch industry take a building and sell it and lease it back. Generally that's an omen that there's a major cash-flow problem there. I believe when we're selling Highway 407 to corporations, some of which operate from outside of our country and we're shipping money out, we are selling our assets to pay the day-to-day grocery bill, and it will catch up to us.

I can understand the member for Wentworth-Burlington's concern about Ontario having the highest property taxes. I think the actions of this government over the last four years have done much to cause that. The balanced budget bill that we looked at earlier today has the potential to cause even more downloading on to the municipalities, and they can't fight back. They're vulnerable, they're an easy target and they have no weapons to fight back. When a service is dumped on them, they have no choice but to accept it. To me, it becomes a moral issue when we do that without consultation and simply force them to pick up this extra cost.

It's easy to blame a lot of other targets for that, and we can probably drag in the blame on the federal government for that. That seems to be the standard defence here in the House; or we blame municipalities for putting their taxes up. But when you get outside the greater Toronto area and you ask municipalities to have the quality of their ambulance service tied to the value of their property, tied to the local economy, as factories close, the business taxes go down and there is a net loss to that area. So whether you get an ambulance or not will depend on how well industry is doing in your area. That has to be wrong.

We've seen so many promises made that have not been kept. There was a commitment to not close hospitals, and maybe there are some hospitals that should have been closed, but there was a commitment to not close hospitals.

There was a commitment to have smaller classes. We saw a lot of the public's dollars go out to say that the classes will be smaller, they will average 25 or they will average 22.

Interjections.

The Deputy Speaker (Mr Bert Johnson): Order.

Mr Parsons: But before these wonderful changes came into line, classes in grades 1 and 2 were capped at 20.

The Deputy Speaker: There's too much interjecting. I want to be able to hear the speaker. If you have something you'd like to say, if you'd just leave the room and say it and then come back in. We would like to have you here, but we need to have the attention that he deserves given to the speaker. I recognize the member for Prince Edward-Hastings.

Interjection.

The Deputy Speaker: I'll not warn the member from Grey-Bruce again.

Mr Parsons: Before the education reforms came into place, grades 1 and 2 were capped at 20-not 20 average, but 20. Because of the wonderful changes, now it's an average of 25. The very vital early years, grade 1 and grade 2, have in fact seen increases.

But the issue that the government side doesn't want to talk about is debt. Debt is the issue. The borrowing that has taken place by this government has been done to provide services for all of us of my age group, and I know my children will be forced to pay back that debt. I enjoy the advantages; they're stuck with the debt. That is morally wrong. The issue for us to address is: We've had the services; we pay back the debt. I would prefer to hear a lot more emphasis on debt rather than tax cuts.

The Deputy Speaker: Further debate?

Mr Crozier: I'm pleased to add to the comments of my colleagues from Scarborough-Agincourt, St Catharines and Prince Edward-Hastings on the debate on Bill 14, a budget bill that has some 175 pages. I think those viewers who may be watching this evening would be interested to know that rather than just a bill that says how much money we're going to take in and how much we're going to spend, this bill actually amends 22 acts. I really wonder what effect some of the amendments are going to have on government spending.

I've heard a lot from the government tonight about what is in this bill, how great the bill is, what it's going to do, what it's going to mean to all of us in a positive way. I'd like to tell you tonight a couple of things that aren't in this bill, and that's why I won't be able to support it.

I'm pleased to be able to speak to the bill on its first night of debate because I'm willing to suggest that debate will be limited on this bill before we're finished, as the government has done on so many other bills. In a nice way they call that limiting debate, whereas some may call it closure. Some may call it an instance where the government doesn't want to hear any more about the downside of their bill. Anyway, I'm pleased to speak on this bill tonight.

Something I don't think we'll find in the budget, and this budget bill supports that, is any funding for the Highway 3 bypass, where there's been carnage over the last couple of years. I doubt that there is anything in this budget bill or in the budget that will provide for the four-laning of the bypass.

I'm not even sure there's money in this bill and the budget for any improvements in the highway bypass. As a matter of fact, our folks back home might wonder when the improvements that are being worked on now will ever get done. I'm shocked that it seems we're going to be well into the new millennium before that highway extension is finished. The contract was let 365 days ago. The work started in earnest 187 days ago and the contractor has worked on it for 99 days. It will be no wonder that we'll not find anything new in this for the Highway 3 bypass, because I'm not quite sure when it's ever going to be finished. I kidded some local Conservatives after the election in the ridings of Essex South and Chatham-Kent Essex, and Windsor for that matter, that the bypass just might still be a gravel road had they known how it was going to turn out in our end of the country.

2050

I don't think there's anything in this budget bill of significance that's going to help with the carnage there has been on Highway 401 through the Chatham-Kent and the Essex-Windsor areas. I'm not confident that there's anything in this bill that's going to improve the safety of that highway; that is, perhaps, going to three-lane that highway the way it should be; that's going to provide a centre barrier the way it should be. I certainly hope there is something in the budget bill, but then again, we are two thirds or perhaps a little more than 50% of the way through the year and the budget is being presented now. We're going to have another budget next spring, so I can always hope there might be something in next spring's budget.

I'm concerned, as is the Windsor-Essex Catholic District School Board and the Greater Essex County District School Board, that there isn't anything in here for special education funding, in particular the intensive support amount, more commonly known as ISA grants.

The Windsor-Essex Catholic District School Board even now is going to be about $2 million short. The Greater Essex County District School Board is going to be about $2.5 million short. I don't think there's anything in this budget bill that's going to alleviate the needs of the special education students in the greater Windsor-Essex county area.

It says in the letter from the Greater Essex County District School Board, "We received 100% approval at the time that the reviews were made and the needs of special education students were looked at earlier this year." Windsor-Essex has a high incidence of children with special needs and they've provided charts to that effect.

It also says, "The full implementation of the Essex County District School Board special education plan is underway in spite of incredible challenges and shortfall in funding for special education." I don't see any hope in this budget bill for the hope that those parents and children have. That's why I won't have any problem with voting against the bill.

The Windsor-Essex Catholic School Board says they are "greatly concerned over the fact that funding for students with special needs has been frozen at the 1998-99 level." They go on to say, and I don't think there's anything in this budget bill or the supporting budget papers, that there's no funding for students who register in the board from section 19 schools-those are institutional or correctional schools-from preschool, or in fact from other countries. The intensive support amount dollars do not cover the salary and benefits of an educational assistant. Transportation is not covered.

In fact, the administration to prepare the ISA funding has been overlooked by the ministry. I'm told that the shortfall in Ontario for special education funding, and in particular the ISA grants, is going to be about $100 million. You know what's kind of coincidental? We're told that it costs $100 million in paperwork to put in to the government to be assessed as to whether these children need the kind of care that's being proposed-$100 million dollars on paperwork. I think when we get to the red tape bill, that may be one of the places where we can do some good.

I don't see that there's going to be anything in this budget, any hope at all, for parents and children when it comes to special education when boards have yet to receive the information from the review team. When the review team looked over this $100 million worth of forms, they still haven't heard from them whether they're actually going to get the funding that they initially asked for.

There's no money in this budget when it comes to special education kids for field trips, for co-op, for work programs, work experience, nothing for transportation. That translates into little hope in this great budget bill that we've been debating tonight.

There are funding cuts to the maintenance budget that prohibit renovations for students with physical challenges. As I've said, the administrative costs alone aren't considered in the budget. Funding doesn't cover the entire costs of the people who are going to work in the program, for goodness sakes, and parents must pay for medical reports and records that are submitted in support of their child's needs.

Then what happens, as we know with our health care system the way it is today, is that it takes some time to get those medical reports. It takes some time to get appointments because of a lack of doctors. You know what happens? If they're delayed because of the medical system, they don't get the medical report in time and, oops, no funding. That child is just left out in nowhere land, and it's no fault of theirs and it's no fault of the parents.

I don't have much faith or hope in this budget, because I don't see any funding in it for newly identified students or for students' changing needs. What if their assessment needs change? What if their needs grow greater during the year? There is nothing in this budget for that.

I hear a lot about jobs. I hear a lot about tax cuts. How's a tax cut going to help a young child in school today when they can't get the educational support, they can't get the intensive support they need? That just causes greater concern in the classroom itself. If the student is fortunate enough to get in there, if the student is fortunate enough to have some care but not what the student needs, then it disrupts the rest of the class. It's not the student's fault, it's not the teacher's fault, it's not the parents' fault, it's not the board's fault; it's the Minister of Education's fault. They won't provide the funding. I don't see anything in this budget that's going to give them any hope for that.

There isn't anything in here for students who need educational assistance for safety reasons alone. Those students who may not quite qualify but who have behavioural or learning deficits, there's no hope in this budget for them.

I received a letter today that would just make you wonder what's happening in our education system. This letter reads, in part-and the Minister of Education will either have received the letter or will soon-"The current dilemma is that far more children qualified for funding than the ministry anticipated and consequently many children are going without support."

It goes on to point out that this constituent's child does have the support of an educational assistant, but there's a child in the classroom who doesn't, and the educational assistant for one child has to take time to go and assist another, and that simply compounds the problem.

I'm going to conclude by just suggesting that the government members stand and talk about all the good things in the budget that they see, all the hope in the budget that they see, but I do wish they would take some time-

Interjection.

Mr Crozier: You know, member from Kitchener, a job doesn't mean a damn thing to a child in a classroom who doesn't have the assistance they need.

The Deputy Speaker: Comments or questions?

Mr Mazzilli: On a point of order, Mr Speaker: Would you please ask the member to withdraw his comment. "Damn" is not proper language for the House, in my view, and I leave it in your hands.

The Deputy Speaker: If the member from Essex wishes to make a correction on that, I'll give him the opportunity; if not, I would like to recognize the member from Timmins-James Bay.

2100

Mr Bisson: The member from Essex raised at the very end a point that is interesting, which is that the government is always very good at pointing out what it does and tries to take full credit for it but is very-

Interjections.

Mr Bisson: Must be my magnetic personality.

The Deputy Speaker: That's enough. Order. I was at a reception a little earlier tonight-

Interjection: Tell me more.

The Deputy Speaker: I'm going to-and a member from the riding of Cochrane, and this fellow raises sheep, was suggesting that some of us in here need correcting. I'm suggesting to you that it's not in our rules to interject. Now, if you would take that little story, mull it over for just a minute, if you like, and if you don't, you can either leave now or when I name you.

In the meantime, the member for Timmins-James Bay has one minute and 48 seconds for his comments and questions if he'd like to take it.

Mr Bisson: Mr Speaker, I don't think I can follow that act.

The Deputy Speaker: The Chair recognizes the member for Bruce-Grey.

Mr Murdoch: Tonight, for the last 40 to 50 or 60 minutes, we've listened to the Liberals go on and on about how doomsday is here. You would think we were back in the 18th century the way they're going on and on about nothing being right, everything is so bad. There are some good speakers over there, but they have no idea how to help things out. All they can do is complain and complain and complain more. Everything is bad.

They talk about the tax credits. Well, the economy is booming right now. That certainly helped, but they can't seem to understand that. The member from Prince Edward county, you'd think the end of the world was coming. He went on about how bad it is. Maybe it was when you lost the election, maybe it was bad that night, but fellas, the election is over. Let's get on with it. Let's try to work some of these things out.

You seem to go on, it's doom and gloom, nothing is working out. You know, the education system has been turned around; it's starting to work well. The health system had to be turned around after we had 10 lost years with you guys looking after the ship. Then you got married to the NDP. When you did that, things went pretty bad. We had the bedwetters' accord between the two of you over there, and look what happened. All you could do was spend money, and every time you do happen to come up with an idea, it's spending more money. Whose money are you spending? The taxpayers' money is whose money you're spending. You would think that you would come up with something that would actually help things out rather than just spending more money and putting us in debt.

You even have the gall to say that you want to curb the debt and things like that, but you don't care about the debt. All you care about over there is saying: "Let's spend more money. Let's just keep everybody happy out there. Nothing else can happen. We just want to go on." Remember, folks, the people out there told you after the last election what they thought of your ways.

The Deputy Speaker: I'd like to suggest that, whether we use French or English, which are both allowed in this House, they both have a lot of words. I don't think we're literary bankrupts here, that we have to use words that some people might find offensive. Let me suggest that you explore those words which will allow you to express yourself without offending somebody else.

I would like to recognize the member from Brant.

Mr Dave Levac (Brant): I want to make a couple of comments about my friend from Essex, to supplement some of those at first hand. Unfortunately, I had to experience some of the problems that were created by the ISA grant changes. Just to make sure that people understand what we had to go through, we probably ended up having to use staff time that was insurmountable in terms of making that up for the classroom teacher, for the special-ed teacher, for the secretary's time, for the principal's time and for the students' time and the parents' time. Parents were often sent off on wonderful journeys to try to find all this support material.

The difference between the previous year and this present year that we had to go through was the fact that the bar was raised in terms of the qualifiers. The descriptors of what those children had to be in order to get that assistance were raised and changed to a point where very few of those students who actually needed help got it because those descriptors were changed. The bar was raised so high that those students who got that assistance the previous year got dropped off. That meant those students got no assistance whatsoever back into that classroom, so that classroom teacher had to be very much more attentive to those individual students, taking away time from the regular stream of the student.

To say that the educational system was improved by more money into the ISA grants is not true in terms of the amount of money that actually got spent to SEPPA; it got changed over to the SEPPA grant. In other words the freeze that got applied-and the minister implied very clearly that the freeze was asked for by all of the boards across the province. If she was listening carefully to what the superintendents across the province were saying, they weren't saying, "Freeze us," they were saying, "We want to get a handle on this ISA grant because you've changed the definitions and we've got to have more students covered."

Is it a matter of spending more money? Absolutely it's a matter of spending more money. If you ask the people of the province of Ontario who have special-needs children, they will pay more in taxes for their children to get that help.

Mr Jerry J. Ouellette (Oshawa): When you're standing at the gates of General Motors and talking with the people who come off the line-we were talking about Bill 14. The position of the third party certainly brought a lot of concern to the individuals on the line about the direction they were heading in. One of the biggest questions when the tax cuts first came round was, "How much did it mean to me?" The calls and the people on the line, it was all the same: They were concerned and they were very supportive of the changes that were coming through.

It'd like to make a couple of comments on the various members who spoke tonight; first of all, the member from Essex. He spoke about the changes that came in and brought the entire debate down to dollars and cents. It appeared, as the member from Grey-Bruce mentioned, that the only concern was that we needed more funds and that the only way you can resolve the situation is by giving it more money. That's how we got into that problem in the first place.

The member from Prince Edward-Hastings mentioned that the deficit was increasing. Quite the contrary. The deficit has gone from $11.3 billion to $2.6 billion. I just needed to make that very clear.

Not only that, there were a couple of members who spoke-the member from St Catharines spoke about not everyone owning a Cadillac or having the ability to do six trips to Barbados or owning season tickets to the Sabres. But there are a lot of opportunities people have out there that they can use this tax credit for.

In the remaining time I have I'd like to point out something that both the member from St Catharines and the member from Scarborough-Agincourt brought forward. In this, the top of the page reads as follows: "Our Proposal for Change ... Eliminate Overlap and Duplication." In regard to ambulance services, which was mentioned on a couple of occasions this evening, "We believe that merging ambulance with our local fire services will provide our communities with a faster, more effective emergency care system." What does that say? That says they're asking for the ambulance service.

I might add that the individuals who put their name to this were Frank Faubert, Doug Holyday, Frances Nunziata, Barbara Hall, and of course Mel Lastman.

2110

The Deputy Speaker: The member for Essex has two minutes to respond.

Mr Crozier: Obviously my excitement disturbed somebody over there. The member from London-Fanshawe seemed to be concerned about the language I finished with. What he didn't seem to be concerned about was the language I used for the 12 or 14 minutes I was talking, and that was special education needs. Yes, if it does mean more funding, I guess that's the answer.

The Ministry of Education set the priorities. They set the level at which these students are going to be reviewed. The parents don't, the teachers don't, the children don't. I am just saying that if there are children out there in our schools in need, you don't let them down.

We have no idea what the stress is at home in a family which has children with special needs, let alone what the stress is when they send them off to school. We don't know what the stress is in a family at home when there's no funding for them at school. There are some children who are not in school today because they don't have the assistance they need. You can't send them to school. It's dangerous for them to be at school. They need that kind of help and, yes, it costs money. That's what this whole bill is about-money. It's whether you want to give a tax cut to the rich or you want to help out those whom you've assessed have a need. That's what it's all about. It's money and it's need and, in some cases, it's greed.

The Deputy Speaker: Further debate.

Mr Bisson: I get an opportunity to comment on this act in regard to a number of changes the government is making in regard to this bill.

I've got to come to one point in all of this. One of the beauties of a bill such as this is it gives us an opportunity to comment on a number of initiatives put forward by the government and I want to start, in no particular order, with one that I think is rather interesting. You remember that back in the last Parliament, Mike Harris, when he moved forward with his privatization initiatives, said that all the money that is utilized and is made by the provincial government when it comes to the privatization of assets would basically go to paying down the debt. In fact back then there was a quote by Mike Harris, who said in the Common Sense Revolution: "The money we make from such asset sales will not go into the government accounts. Every penny will go directly to pay down the $80-billion provincial debt."

Never mind that the debt has moved from $80 billion to over $126 billion since this government took office. What I find rather interesting is the pledge Mike Harris made. The pledge he made was quite concrete. It said, "Every penny"-that's every sou, as we say in French-"will go directly to pay down the $80-billion provincial debt." If you take a look at the legislation that's being put forward by the government, there's a section under the Financial Administration Act that says Mike Harris is breaking his promise to the people of Ontario and he's-

Interjections.

Mr Bisson: You got me; not bad.

Mike Harris is saying to the people of Ontario-actually, you didn't get me; I did have it out. Good thing my colleagues across the way did that. I didn't realize my-

Interjection.

Mr Bisson: Thank you. Just for that, I should get off this topic.

As I said, in the Common Sense Revolution Mike Harris said, "Every penny will go directly to pay down the $80-billion provincial debt." If you take a look at the amendments made to the Financial Administration Act, it says a number of things and, under one section of the act, that the dollars that are got by the provincial government by selling assets such as the 407, which we sold last spring, or any other provincial asset the provincial government owns, the costs of creating or preserving this asset could be deemed as money that the provincial government would use and put into general revenue.

Let's just take that one step and let's, for example, say the government was to sell, oh, I don't know, a provincial government building such as the Roberta Bondar Building in Sault Ste Marie. You would know, Mr Speaker, that in the fine community of Sault Ste Marie it is rumoured fairly directly that the government wants to look at the possibility of privatizing that provincial government building, the Roberta Bondar Building.

Let's say the government paid, and I'm just going to use a figure, $20 million to build that building. The provincial government by way of that clause can say, "It cost us $20 million to build it, so if we sell it we want our $20 million back, and if the sale of the building is now $30 million because of inflation, and we spent a whole bunch of money to get the building up to snuff and to do the kind of renovations we did to it over the years, therefore, $30-million sale; back to general revenue, $30 million." I see a pretty wide loophole in this legislation.

If you take a look, there's another section that says the amount allocated by cabinet for projects that are designated as priority projects. That means basically anything under general revenue. It means that if the provincial government decides, as a priority, that they want to spend money, let's say, on government advertising-we know that prior to the last election, the provincial government spent millions and millions of dollars on government advertising-the government could say: "Rather than trying to show the advertising as spending under general government revenue in the first year, we can sell off assets and use the money from the assets sales in order to pay for our advertising. Wouldn't we look clever," would say the Conservative government, because they wouldn't have to account for it in that fiscal year under general revenue. They'd be able to show it in the off year under the sale of provincial assets.

The legislation is laughable when it comes to the promise that was made by the Harris government that said they were going to spend every dollar they raised by way of privatization to paying down the debt. The reality is, the legislation gives the provincial government the ability to do absolutely anything it deems.

I'm going to come back to a point I made earlier this afternoon. You've got to remember and you've got to put into context what this government has done. We find ourselves now in the budget year 1999-2000, where the provincial government is still running a fairly significant deficit. You ought to say to yourself, "Why is it, if we're in a so-called economic rebound, that the provincial government of Ontario still has a large deficit in this sixth year in which the economy has actually been climbing?" It started climbing about 1993-94.

You have to say it's clearly because of one decision. The Harris government decided early on that it was going to give a tax cut. For most people in the general public, a tax cut is probably a good idea. If you come to most people on the street and you say, "Do you want a tax cut?" "By Lord, yeah, I want a tax cut. Give it to me. I'll take all the money I can back off my paycheque so I can go out and do whatever I've got to do."

But there's been a cost associated to that tax cut. The cost has come in a couple of ways. First of all, when it comes to the deficit, the provincial government has had to borrow each and every year in order to pay for the tax cut. Every dollar that the government has given back by way of tax cuts to the general population and the business sector of Ontario, the government has had to go out and borrow in order to finance that tax cut. If the government hadn't done that, we would have been in a position about three years ago of being able to balance the budget.

It's interesting to note that Ontario is one of the last provincial jurisdictions that haven't balanced their yearly budgets. Saskatchewan was the first to do so. Most every other province, other than the province of Quebec, which is scheduled to do it this year, has balanced its budget, other than Ontario. I find it somewhat ironic that a government which ran on the issue of balancing the budget find themselves now in their second term, in the sixth year of office, not having balanced the budget.

Hon Janet Ecker (Minister of Education): Sixth year?

Mr Bisson: Or five years, 1995 to year 2000; you're about to go into your sixth year. The point is that the government has yet to balance the budget. I think it comes back down to a very simple reason. The government unwisely chose to try to deal with expenditure control at the same time it was trying to give a tax cut.

If it had been my choice as a New Democrat, I would rather have seen the government move the way that we were trying to move, which is trying to deal with individual expenses of ministries and programs, and once you find yourself in the position of having balanced your budget and having a surplus, then trying to deal with the tax cut. In fact, that's what the NDP government in Saskatchewan did. I would suspect that's what the NDP government in Manitoba will do once it balances the budget that they were left with by the Filmon government that has left them, as it turns out, with a deficit of some $200 million or $300 million, even though the Filmon government said they had balanced the budget.

The other thing that happened in regard to the tax cut that we've had to pay for is that the government has had to go out and try to find ways of making up the money they have had to find in order to finance their tax scheme. I see the Minister of Education is here tonight, along with a number of other ministers. It's not all her doing, because there were other ministers of education before her, but we have seen programs in education, health care, social services and others that, quite frankly, have been severely reduced by way of funding formulas and various other items that they've had to do in order to try to find ways of paying for the tax cut.

I come back to what was said earlier by a few other members in the House. This is fine and dandy when we look at the tax cut, but go talk to the parents or the children who are in need of special-needs education in this province and ask them if the tax cut was really worth it. I was in Moosonee not more than two weeks ago meeting with first parents and then teachers of children who are in special-needs education in Moosonee, as I did in other communities across my riding. It has always been a problem. The reality is that it would be wrong for me to stand as a member of the opposition, a member of the New Democratic Party, to say that at some time in the past in Ontario, special-needs education was perfect, because it never was. Each government, over the years, tried to do more and more to respond to a very severe need to provide educational services and supports for kids with special needs in our school system. But there was always a hope, up until a few years ago, that governments were moving in the right direction, that governments were trying to find solutions to very tough situations and problems within the school system.

2120

Over the last five years, I would argue, there has basically been no hope. Things have actually gone in the opposite direction. The funding formula has put us in a position where we have less and less money to deal with special-needs education.

I am glad the Minister of Education is here tonight, because I want to say to her that when I met with the people from Moosonee and Moose Factory, it's quite appalling what is happening to education on the James Bay coast in provincial schools, aside from what's happened at schools like Delores Echum in Moose Factory, which is a federally funded school. But in public schools like Bishop Belleau school and others, basically we're seeing 60% of kids going without the basic needs of education because of what's going on in those communities, and the funding is not responding to the actual need. They are saying there are a number of issues. I'm told by parents and by people in the education system that you have a number of kids who are basically special-needs, at a higher percentage than you would see in other communities on the James Bay coast, who are not receiving the kind of special-needs education they need to get.

There are also a whole lot of cultural and language issues that have to be overcome. The first language in those communities is not English or French; it's Cree. By the time they hit the school system, they are having to try to deal with learning a second language, which is English, and their language skills are normally two to three years behind what they are for other children in communities such as Timmins or Toronto or Windsor or whatever. So teachers in there trying to teach according to the new curriculum in grade 1, grade 2, grade 3, grade 4 etc are really at a loss to deal with what these kids have to deal with because of the language barriers they have to overcome, not to talk about the social issues that go on as well. All of this is exacerbated by the issue that's happening with the new funding formulas within the province.

So I say to the Minister of Education, we can stand up here and try to say that we're doing a good job and everything is fine in Ontario, but I would invite the Minister of Education to come to communities such as Attawapiskat, Fort Albany, Kashechewan, Moosonee, Moose Factory, and to go talk to those kids. You'll find that, if anything, we have to redouble our efforts in order to deal with providing the kinds of supports and the kinds of funding-and I say the word "funding" deliberately-that are needed in order to meet the needs of those kids.

I look around communities, and I look at the issues of housing. L'autre jour, samedi, j'étais dans la communauté d'Opasatika, où j'ai eu la chance de rencontrer le trésorier-greffier de cette communauté, M. Dorval. J'ai eu aussi l'occasion de rencontrer d'autres citoyens de la communauté qui sont, comme on le dit, de l'âge d'or et qui disent, « Écoutez, nous aimerions être capables de bâtir des appartements à but non lucratif dans notre communauté. » Ils sont d'un âge où ils ne veulent pas rester dans leur résidence. Ils ont des maisons de trois ou quatre chambres à coucher. Ils disent, « J'aimerais être capable d'aller dans un appartement », comme le monde dans les communautés de Toronto ou Timmins ou Kapuskasing ou autres. Mais dans la communauté d'Opasatika, ils n'ont pas ce choix, parce qu'il n'y a pas de bâtiments à but non lucratif qui sont construits jusqu'à date.

La communauté, avec ses citoyens, essaie de trouver une résolution à ce problème en regardant au gouvernement provincial, parce qu'on sait que le gouvernement fédéral a transféré, le 17 novembre de cette année, toutes les responsabilités pour le logement aux provinces. Il tombe sur les épaules de la province de répondre à tous les besoins de logement dans la province. Le gouvernement fédéral a abandonné cette responsabilité.

On voit dans la communauté d'Opasatika, juste au nord de Kapuskasing, que cette communauté aimerait être capable de construire quelques logements afin de répondre aux besoins des citoyens de cette communauté qui sont dans leur retraite et qui cherchent à se trouver un appartement, pas une grande maison, pour entretenir leurs besoins, une place à vivre dans les années à venir. Mais cette communauté n'a pas la capacité pour aller rechercher l'argent nécessaire, parce que le gouvernement provincial de Mike Harris a dit, en 1995, qu'ils n'étaient pas pour financer, d'aucune manière, les maisons à but non lucratif ou les appartements à but non lucratif dans les communautés de l'Ontario. Or, on regarde cette communauté, et ses citoyens n'ont pas l'habilité de faire comme d'autres personnes dans d'autres communautés partout en Ontario, ce que tout le monde prend pour acquis.

On se demande pourquoi. C'est très simple. Le gouvernement de Mike Harris a dit, « On va donner une réduction d'impôt. » Ben, oui, c'est bon. Mais on a besoin de payer un coût. Dans ce cas le coût, pour le monde d'Opasatika, c'est qu'il est bien difficile d'aller rechercher l'argent nécessaire pour mettre en place les appartements à but non lucratif.

I look up on the James Bay coast; it's the same story. I look at communities like Kashechewan. I would challenge any member of this assembly-the leader of my party, Mr Howard Hampton, represents a riding similar to mine in regard to the number of native communities within our ridings-to go up and take a look at the conditions in most of the aboriginal communities in the northern part of the province. Mr Speaker, I know if you came you would be enraged with what the federal government has not done in those communities.

We take for granted we've got our nice houses, we've got our white picket fences, our children each have their own bedrooms, cable television in every room, and in some cases, where the families can afford it, private telephones for their kids. Go to Kashechewan, go to Attawapiskat or Peawanuck and find out if those kinds of conditions exist. You're lucky to get a telephone in some of those communities, because of the poor telephone service; hydro rates are out of this world because it's diesel-generated; there's no power grid up there; there's no transportation per se; there's no railway; there's no road. There's no way to get anything in, other than flying it in, in the winter, or bringing it in by barge during the summer, so the cost of everything is much more expensive.

More important, the very basic needs-on the issue of housing, the federal government dropped the ball 30 years ago. And you know what? They didn't even know they lost the ball, because they never went up there to take a look at what's going on. If you go into communities like Kashechewan and take a look at the condition of housing, you have literally 10, 15, 20 people living in one building. Never mind children having one room to themselves so they can retreat and do their studies and find their own space and develop as young individuals. You have two and three families having to live in the same house, not by choice, but because there is no other place for them to live, and the federal government has allowed this to happen for a number of years.

They're looking at their provincial government and saying, "What about us?" What about looking at housing programs in response to the needs of the aboriginal people living on the James Bay coast, or the people in northwestern Ontario? I think there's an opportunity for the provincial government to do something. We know the federal government has transferred housing over to the province, and if we are going to do anything when it comes to housing-we need to start taking a look at what's happened up on the James Bay coast and what's happened in other native communities across the province. We need to wake up at one point, because if it is woken up for us, I'll tell you, it's not going to be a pretty sight.

Mr Speaker, I notice it's almost 9:30 of the clock. The rest of this time will be shared by the finance critic for our party, Mr Dave Christopherson, the next time the House comes back into session.

The Deputy Speaker: It being almost 9:30, this House stands adjourned until 1:30 tomorrow.

The House adjourned at 2128.