The House met at 10 a.m.
STATEMENTS BY THE MINISTRY
MUNICIPAL FINANCIAL REPORTS
Hon. Mr. McKeough: Mr. Speaker, I am tabling with the Clerk today, the Ontario Municipal Employees Retirement Board’s 15th Annual Report, 1976.
In accordance with the new rules of the Legislature I am obliged to make a statement when statutory reports are unable to be made within six months of the end of the reporting period. I have a number of reports upon which to comment.
First, the Public Officers Report: This is one report that seems to have eluded most of us. As I understand it, this report has never been made to the Legislature since the Act was brought into force by the Consolidated Statutes of Canada, circa 1859. It is my intention to see if we can relieve the statute books of the Act either in whole or in part.
Secondly, under The Municipal Act there is a requirement for two annual returns: one from the municipal clerk, the other from the municipal treasurer.
As the clerk’s report would duplicate the figures found in the treasurer’s report, I also intend to see if we can’t expunge this requirement from the legislation. In many ways the Municipal Directory, which all members receive, provides a more useful collection of information than suggested by this old report.
However, the treasurer’s report required by section 223 of The Municipal Act is still a useful document, and we are taking steps, with the aid of municipal treasurers and the Institute of Chartered Accountants of Ontario, to improve the municipal financial reporting to the public. Among the topics receiving special attention are: Attempts to make municipal financial statements more meaningful and more interesting; and ensuring that municipalities are not required to commit an excessive amount of resources to supplying financial data to the province and to the federal government.
An important avenue for municipal reporting to the public is through this Legislature. In past years, reporting by this means has been confined to tabling of a bulky compendium of municipal financial statistics. This year, my ministry plans instead to produce a study of the significant trends in local government finance. This will allow members and the general public to be aware of the relevant factors behind the statistics hitherto tabled without explanation. The detailed statistics will be publicly available on request.
Another aspect of municipal financial reporting which needs improvement is the speed with which reports are prepared. In previous years, filing of municipal financial reports with the Ministry of Treasury has been such that tabling of a summary of these reports in the Legislature has not been possible until about 18 months after the end of the period to which they refer. The study of municipalities’ financial results for 1975 is currently being finalized and should be tabled in the House at the beginning of the next session. I regret that this is somewhat later than in previous years, due to later filing of reports by municipalities and to my ministry’s follow-up program to upgrade reporting quality.
I anticipate a significant improvement in timing for future years. The study of 1976 financial performance of municipalities should be available no later than the end of this year.
Mr. Lewis: Mr. Speaker, on a point of order.
Mr. Speaker: Point of order?
Mr. Lewis: Yes, if I may, Mr. Speaker -- I’m sorry, I would have liked to do this at the outset. Just as you announced on the opening day of the Legislature, Mr. Speaker, that the member for High Park-Swansea (Mr. Ziemba) had been committed to jail, so I wish to inform you, sir, as you know, that he has been released from jail and will shortly be taking his seat this morning in the Legislature.
Hon. Mr. Snow: Mr. Speaker, in accordance with the new rules, statutory reports are required to be tabled within six months of the close of the reporting period. Accordingly, today I am depositing with the Clerk copies of the 1976 annual report of the Ontario Northland Transportation Commission for the year ending December 31, 1976, and also copies are being delivered to each member through the legislative post office and to the press gallery.
In addition, Mr. Speaker, I would like to advise the Legislature that the report of the Ontario Telephone Services Commission, also due, will be delayed for approximately one month. The reason for the delay is that the statistical information contained in the report comes from the official annual reports of the independent telephone companies in the province. We did not receive the last of these independent telephone company reports until some time in the month of June; accordingly we were unable to have the final report ready for tabling today. It may be ready before the close of this session; if not I’ll table it on the opening of the next session.
Hon. Mr. Norton: Mr. Speaker, as indicated on Monday of this week I would like now to report to the House on the activities of the children’s services division over the past three months and also on its plans for the future.
As indicated on April 4 by the Provincial Secretary for Social Development (Mrs. Birch) and I, the intention in establishing the new division of my ministry was to provide more integrated services for children with special needs in this province. This is to be accomplished through two major processes: The integration of services at the provincial level and the co-ordination at the local level.
The first of these processes was officially begun on Monday when I introduced a bill to permit transfer of some services to the Ministry of Community and Social Services. The services which can be transferred at this time are those which are sufficiently discrete that funding and responsibility can be shifted now without disturbing program integrity. These programs are identified in the appendix to my remarks, which will be circulated to all members of the Legislature.
At this time I would like to table information on the contents of an order in council which has been passed to create a new vote in the children’s services division to effect the transfer by July 1. Vote 2084, for children’s services, will contain the following items: Program administration, $2,215,900; child welfare and health services, $194,052,300; and detention and correctional services, $32,271,100. In addition are administrative programs within vote 2081 of the Ministry of Community and Social Services for $1,111,300. The estimated total expenditure of $234,650,600 comes almost entirely as transfers from existing programs in the ministries affected.
In addition to establishing a new vote, the order in council provides for the transfer of responsibility to the Minister of Community and Social Services of The Children’s Mental Health Centres Act, The Children’s Mental Hospitals Act, The Training Schools Act and the relevant sections of The Provincial Courts Act.
As I previously indicated there remain, however, programs such as those for the mentally retarded and child and adolescent units which are part of large hospitals, which cannot so easily be transferred without risking serious discontinuity in the provision of care. Here, the manner of transfer is critical.
We are currently exploring the device of contractual relationship with some of these programs, hoping that this arrangement will permit sufficient influence to be exercised by the division as funder, while allowing the programs to retain operating responsibility, and with it their identity as hospitals. This is in line with our intention to integrate, not homogenize.
We expect that by mid-fall we will have concluded these explorations and will have secured the funding, and with it effective control of the remaining programs in the originally identified list.
In addition, there remains a group of services for which there appears to be equally persuasive arguments for and against transfer and which must therefore await further detailed consideration. These include crippled children’s centres and programs, some children’s psychiatric units in general and special hospitals, and homes for special care. There may be additional programs as well not yet identified by us.
Although preoccupied with planning for the transfer and subsequent administration of a large, non-uniform assortment of programs, division staff have spent considerable effort in consulting throughout the province. My associate deputy minister, Judge Thomson, has met with community and service groups and local municipal officials in all parts of Ontario, and in so doing has been able, I believe, to take the provincial pulse on the issues related to reorganization of children’s services.
He has been advised everywhere to proceed, but with caution. He has confirmed our suspicion that there is much regional variance in existing services, in needs and in problems, and concluded that uniform approaches or solutions will not do. Although there appears to be a consensus that we are on the right track, there is much anxiety lest the baby be thrown out with the bath water. Many have also expressed the concern that scarce funds not be expended on structural change to the exclusion of services.
It must be said at this point that mere transfer is not integration, and far short of rationalization. Planning and effective management are not possible without reliable information and the capacity to evaluate and monitor service. Therefore, one of the preconditions of progress towards our objectives is a sound information system. Work in this area is well under way.
We are collecting and evaluating existing standards of child care and service across all the division’s programs and will develop and establish a system of province-wide standards. Such a step is necessary to permit equitable distribution of services, evaluation and costing.
We will take steps to ensure equitable distribution of resources throughout the province and a more balanced spectrum of service in each community as soon as the inventory of existing services now under way is complete.
We recognize that the most effective service delivery system for children is one which is run or co-ordinated locally. The second major process, to which I earlier alluded, is that which will result in the maximum responsibility and control resting in the hands of local committees, which are knowledgeable and sensitive to the needs of children and families in their areas. This is perhaps the most challenging aspect of the implementation.
It is clear to me, with the benefit of the three-month review we have undertaken, that the decentralization process must be launched cautiously, albeit optimistically. Such a project has been undertaken in other jurisdictions on both sides of the Atlantic but not to this date with resounding success. We must, therefore, be prepared to make mistakes and to learn from them quickly. We propose, therefore, following a period of active public consultation on the subject of the functions and composition of local children’s committees, to initiate the first phase of decentralization by establishing several such bodies in different areas of the province.
Mr. Sargent: Time; 15 minutes on a statement.
Hon. W. Newman: It’s so rare you are here, you should listen.
Hon. Mr. Davis: Are you in a hurry to get home?
Hon. Mr. Norton: These will act as an advance scouting party in unfamiliar territory. Meanwhile, rationalization of service delivery with an increasing regional emphasis will proceed throughout the province. This will involve upgrading of service in some areas, the introduction of a placement booking system which will offer up-to-date assistance in identifying the vacancies to improve access to service and the publication of a comprehensive service directory.
We have directed our attention to the need for legislative change in order to improve safeguards against inappropriate exercise of authority and to increase accountability throughout the system. Although ultimately we intend to propose an omnibus bill, we will not use gradual implementation as an excuse to avoid needed legislative change in the short run.
This approach will inevitably leave unsatisfied those who had hoped for immediate implementation of all phases. I believe, however, that we have already accomplished the first stage and we must genuinely consider the issues with communities and services throughout Ontario before further implementation. I am convinced that if we do not, there could be much unnecessary antagonism and conflict. If so, it would be the children who would suffer. This project is a bit like overhauling a ship while at sea with a full complement of passengers.
I expect that early in 1978, we will be able to extract from our consultation, several models or approaches to local service co-ordination which combine the necessary ingredients of effective regional planning and priority setting, accountability for service, equity and responsiveness to client needs, and sufficient overall control to do away with the excessive autonomy of programs which has been a significant ingredient in the problems we are all familiar with.
Beginning April 1, 1978, we intend to establish the first such committees, perhaps one in the north and others in differing areas in the south --
Mr. Foulds: Why perhaps?
Hon. Mr. Norton: -- and to support and monitor their progress closely. Once set up, these committees will become part of the service system in their areas by directing their attention to the difficult-to-serve-and-place children on whose behalf they will be able to intervene and fund special programs. At this stage, the committees will function in an advisory capacity but it is expected by the second year of their operation they will begin reviewing all budgets for children’s services in their areas and increasingly take on overall planning and priority-setting functions.
By the time these original committees are ready to assume full responsibility for service delivery in their areas, we will have learned enough to have begun the process of establishing such committees throughout the province. It is implicit in the plan which I have outlined that we are taking a somewhat open-ended, developmental approach and intend to engage in ongoing discussion with the committees and the areas they serve as we converge on a local service system plan. I intend to report at regular intervals to this House and will be grateful for the critical and constructive attention which all members may give to this challenging undertaking.
Mr. Speaker: Just before we call the next order of business, I’d like to introduce to the House a distinguished visitor this morning.
The Hon. Jean-Maurice Simard, Chairman of Treasury Board of the province of New Brunswick, is with us and is seated in the Speaker’s gallery. He’s here as a guest of the Chairman of Management Board (Mr. Auld).
Mr. S. Smith: I have a question of the Attorney General. In view of the continuing crisis with regard to unemployment, particularly in the construction industry and especially in Toronto, can the minister explain why he has not intervened in the decision of the Ontario Municipal Board to adjourn its hearings at least for the whole month of July, and could he explain to us why he has not moved to expedite these hearings and to get Toronto’s construction workers working as quickly as possible?
Hon. Mr. McMurtry: Mr. Speaker, first, I have no power to intervene; second, we encouraged the Ontario Municipal Board to proceed as diligently as they can, and that’s really the extent of my mandate in that regard.
Mr. S. Smith: By way of supplementary, given the unemployment rate running around 24 per cent among Toronto’s construction workers, and the OMB hearings holding up about 5,000 jobs, and keeping in mind the recommendations of the rather expensive report which said that the OMB powers ought to be diminished, why would the Attorney General not act to intervene in some way to either approve the plan and allow the jobs to proceed immediately; or take some other action to firmly get it entrenched in the mind of the OMB that they’re not to stand in the way of necessary construction jobs in the way that they’re presently doing, dilly-dallying at this rather leisurely pace?
Hon. Mr. McMurtry: I’ve nothing to add, Mr. Speaker, to what I’ve said before.
Mr. Speaker: The member for Scarborough West has a supplementary.
Mr. Lewis: Is the Attorney General willing to write a letter directly to the chairman of the OMB to express his displeasure, and that of the government, with the unseemly and unnecessary delay in this matter? Perhaps that might provoke him.
Hon. Mr. McMurtry: Mr. Speaker, as I think this was indicated in the Legislature earlier in the spring, both the Treasurer (Mr. McKeough) and I have communicated with the chairman of the Ontario Municipal Board expressing our wishes that the matter be proceeded with as expeditiously as possible. We’ve made our position very clear to him and I think any other so-called interference, as suggested by the Leader of the Opposition, would be improper.
Mr. Mancini: It is help, it is not interfering.
Mr. S. Smith: I have a question of the Premier, Mr. Speaker. The Premier is undoubtedly aware of the report of the commission on economic coercion and discrimination regarding the Arab boycott. He has spoken earlier on this matter. Could the Premier tell this House whether he intends to bring forward legislation, not by a private member but as a government, to take the tough measures he promised would be taken in the event that the federal measures are insufficient to deal with the anti-Israel boycott?
Hon. Mr. Davis: Mr. Speaker, I don’t think I described my measures in any way, whether tough or not. We are assessing this very carefully. We have obtained legislation that exists in certain states of the union. I made a statement then, and I have not been reluctant to repeat it since, that while we, as a government, will take no part in terms of differences of opinion between two countries or groups of countries, when it comes to the secondary and tertiary effects of policies that relate to those other jurisdictions that have impact upon citizens of this province, then of course we have that concern.
We are pursuing it. It is a complex matter. It is one, obviously, that would be better dealt with and more properly dealt with by the government of Canada. I said that at the time and I repeat it now because I believe that to be fundamentally correct. However, Mr. Speaker, the matter is under consideration by the government.
Mr. S. Smith: By way of a supplementary, since the Premier was widely quoted as saying that Ontario is prepared to take measures on its own if the federal government does not move swiftly and strongly in this matter, and since the Premier mentioned at that time, that under the Ontario Human Rights Code it might be possible to take action against companies that comply with the boycott, and given the fact that state action in the United States frequently was responsible for eventual federal action, why is he now backing off on what was a commitment to the people of this province to come forward with as much provincial legislation as possible to supplement what seems to be inadequate on the federal scene?
Hon. Mr. Davis: Mr. Speaker, unlike the Leader of the Opposition, I like to think things through properly first before we have specific action. If he would learn that he would better serve his own party.
Mr. Nixon: You made your announcement in Israel. It is called grandstanding on an international issue. You will do anything for a handful of votes.
Mr. S. Smith: I have a supplementary of the Premier, Mr. Speaker.
Mr. Speaker: One final supplementary.
Mr. S. Smith: Why doesn’t the Premier think things through before he makes his announcements in Israel and in Ontario? Why doesn’t he think them through first and make his announcements later?
Hon. Mr. Davis: I can assure the hon. Leader of the Opposition, when I restated my views here in the city of Toronto on a particular evening --
Mr. Sargent: You couldn’t get hold of the think-tank, that’s why.
Hon. Mr. Davis: -- they were very well thought through. I would also say to the Leader of the Opposition that any legislative action, which he perhaps doesn’t totally understand yet -- that’s kind of obvious in the last couple of days -- that we think those things through very carefully before we present them to the House. I guess he wouldn’t realize that.
Mr. S. Smith: You said it; insults are no substitute for action.
Mr. Nixon: You make a great statement in Israel and come home and do nothing.
Mr. Lewis: A question of the Minister of Community and Social Services, unrelated to his statement for the moment: Has the minister a comment to make publicly about the number of stories that appeared in the last 24 or 48 hours dealing with an alleged black market in the area of adoption, and the apparent corroboration from individuals well placed in the field -- if not corroboration the expression of anxiety that such a black market might well exist, by people who are also well placed?
An hon. member: Here’s the member for High Park-Swansea (Mr. Ziemba).
Mr. Foulds: You know, we would have applauded if it was a Tory.
Hon. Mr. Norton: Thank you, Mr. Speaker. I thought it was rather unusual that I might elicit applause before I had had an opportunity to respond.
The issue that is raised by the hon. member is obviously something that concerns us very deeply. In the last couple of days since it first came to my attention through the newspaper stories, I have had an opportunity to consult with my staff.
I admit there has been suspicion of the existence of such activities, but it is very difficult to take action for the simple reason that very often, as was indicated in the story in the newspaper, the persons who had apparently received first-hand information, and alleged that they had been approached, as you describe it by a well-placed person, with an offer to market children in this manner, frequently are reluctant to come forward with the specific information so that we can take action.
There is no question that it is an offence, and if persons such as the individual quoted in the newspaper story would please bring that information to our attention and be prepared to follow up in such a way that we could prosecute or further investigate, we would be very happy to do it and we would be pleased to refer that information to the proper authorities for prosecution. All that I think I can say at this point is that we will continue to do whatever we can by way of watching and monitoring that situation to see if there is any further indication of such activity.
I would plead with anyone in the public or in this Legislature who may have any specific information which might lead us to taking successful action against any persons engaged in that kind of activity, then I would welcome that kind of co-operation.
Mr. Makarchuk: Will you guarantee they will stay out of jail?
Mr. Lewis: Just by way of supplementary: Is the minister prepared, within some branch or arm of his ministry, to initiate an investigation, since these rumours are intermittent and the suspicions as he describes them are regular? Is there a way of our attempting to track it down, since it is surely one of the most offensive acts which can be engaged in? Is he prepared to do that?
Hon. Mr. Norton: I am prepared and in fact intend to discuss the situation with the Attorney General and the Solicitor General (Mr. MacBeth). At this point we do not have an investigative capacity, in that sense, within our ministry, but we intend to explore ways in which we and those ministries who do, might co-operate in order to further pursue this matter. I have also asked my staff to review the legislative authority that exists to see if there is any way our position might be strengthened through legislative change. However, regardless of the legislative change, unless we can bring forward evidence, or have persons with a personal knowledge of the situation come forward with evidence, it makes it very difficult for us to successfully pursue the matter. But I will explore the possibility of further investigation with the other ministers.
MACKENZIE VALLEY PIPELINE
Mr. Lewis: A question for the Minister of Energy: Could he explain or did he forget that his ministry made a submission to the Berger inquiry in which the proposition of the building of the Mackenzie Valley pipeline was supported; that Arctic Gas has a publication, which his ministry has never denied or repudiated, listing the province of Ontario as the only government in Canada explicitly in support of the Mackenzie Valley pipeline? And in the document, Ontario’s Energy Future, which the minister tabled in April 1977, conclusion 18 read, “Construction of transportation facilities that will connect the gas resources of the Mackenzie Delta to the industrial markets of southern Canada.” Can he explain how all of that does not add up to a policy commitment in favour of the Mackenzie Valley pipeline, and is he prepared now to re-evaluate that commitment?
Mr. Sargent: That’s not a fair question. He wouldn’t know that.
Mr. S. Smith: He has no information.
Hon. J. A. Taylor: I am very happy that the member has done some further research. First of all, as I said yesterday, our concern in the report which he referred to --
Mr. Breaugh: You have a hard time with yesterday’s answers, don’t you?
Hon. J. A. Taylor: -- was to ensure that some transportation system be put in place to provide for gas delivery to Ontario --
Mr. Lewis: From the Mackenzie Delta.
Hon. J. A. Taylor: From that area, the frontier area --
Mr. Lewis: The Mackenzie Valley is what we are talking about.
Hon. J. A. Taylor: All right, the Mackenzie Delta. That’s true; we also have the eastern Arctic that we are concerned about.
Mr. Lewis: No, but from the Mackenzie Valley --
Hon. J. A. Taylor: All right, let’s talk about the Mackenzie Valley then. The member may not realize that when we talk about gas, Ontario uses --
Mr. Reid: A lot of it.
An hon. member: Also hot air.
Hon. J. A. Taylor: -- the member is talking about natural gas. Ontario uses about one-half of the total Canadian consumption --
Mr. Sargent: When does your book come out?
Hon. J. A. Taylor: -- of natural gas, and about 50 or 60 per cent of that natural gas consumed in Ontario is to keep our industry operating. The member may not be concerned about jobs --
Mr. Martel: That isn’t the question at all.
Hon. J. A. Taylor: -- but that’s what that gas is for. We think it’s important to ensure that there is a continuous supply of natural gas to Ontario -- obviously the member doesn’t agree with that.
Mr. Wildman: Do you have a policy?
Mr. Speaker: Order, please, the hon. minister has the floor.
Hon. J. A. Taylor: What was pointed out in that report was the need for a transportation system. A number of routes have been proposed --
Mr. Lewis: You say the Mackenzie Delta.
Hon. J. A. Taylor: We mentioned the Mackenzie Delta, which is a geographical area. I don’t know whether the member for Scarborough West has been there or not, but it’s a part of Canadian geography. It’s not a gas pipeline.
Mr. Sargent: How did you get there?
Mr. Cassidy: Oh, my goodness.
Hon. J. A. Taylor: There have been a number of proposals that were put forward in terms of the transportation system.
Mr. Cassidy: You are preposterous.
Hon. J. A. Taylor: As a matter of fact, there were hearings in that regard, conducted before the National Energy Board. As the member may or may not know, its decision will be coming down on July 4. That deals with the mechanics. The Berger report concentrated on the environmental and social matters, which he may or may not appreciate.
Mr. Lewis: Oh no, I hadn’t realized that.
Hon. J. A. Taylor: I’m telling the member now that that’s what it did. I thought he may be deficient in some respects in regard to the information.
Mr. Lewis: Thank you very much.
Mr. Swart: Do you think you should intervene, Bill?
Hon. J. A. Taylor: What Ontario did, as I mentioned yesterday, was to make representations to the Berger commission when it visited this community. After the northern hearings, Mr. Justice Berger got permission to travel Canada to hold hearings.
Mr. Lewis: No, I didn’t know that.
Hon. J. A. Taylor: Well, I’m telling the member, in case he didn’t know. I wouldn’t confess my ignorance the way he is doing this morning.
Mr. Lewis: I have to; when faced by you, I have to confess my ignorance.
Mr. Speaker: Order, please.
Mr. Sargent: Saved by the bell.
Mr. Speaker: Order, please. First of all it was almost impossible to hear the question, which I didn’t get clearly, but also the answer, with all the interjections. Is there further answer to this, and could we have fewer interjections? Order, please. Was that the finish of that answer?
Hon. J. A. Taylor: Just to reiterate --
Mr. Breithaupt: Gong him.
Hon. J. A. Taylor: Mr. Speaker, the question was asked about Ontario backing a particular pipeline. I wish to repeat what I said yesterday, that Ontario has not backed a particular pipeline -- neither a syndicate, a consortium, a company, nor a route. What we are concerned about is the securing of a supply of gas to the people of this province and to the industry of this province. And that should be clear from that report.
Mr. Lewis: I have a supplementary which, like the original question, the minister could have answered much more quickly.
Does he not recognize that his constant harping on the Mackenzie Valley natural gas is precisely the kind of incentive which the federal government wants, to put that pipeline through, providing natural gas to our industries and consumers in Ontario far more expensively than tapping the known reserves that are now available in Alberta, which would lower costs, create more jobs and be much more useful to Ontario. Why doesn’t he take that stand?
Mr. Breaugh: Don’t write his speeches for him, Bette. His are much better.
Hon. J. A. Taylor: The Leader of the Opposition and the leader of the third party have been speaking about the Mackenzie Valley pipeline. Don’t accuse me or my ministry or this government of harping about the Mackenzie Valley pipeline --
Mr. Lewis: That’s right.
Hon. J. A. Taylor: -- because it’s those members who have been making an issue of it and claiming that higher prices are being advocated in order to finance that pipeline.
Mr. Martel: You’re in the wrong business. You should be a comedian.
Hon. J. A. Taylor: It’s they and their parties who have been doing that and it is absolutely false.
Mr. Lewis: That is why prices are going up.
Hon. J. A. Taylor: Maybe they should get the facts and inform the public properly.
Mr. Speaker: Order, please. This will be the final supplementary on this, because we’ve spent quite a bit of time on it.
Mr. Reed: Thank you, Mr. Speaker. Could the minister tell us why he will not simply declare his ministry’s policy on this issue? He’s been skirting the issue for two days. His predecessor supported construction of the pipeline. He is now changing around to talk about a transportation system.
Mr. Speaker: Order, please. I think the question has been asked.
Mr. Reed: Why doesn’t he declare himself?
Hon. J. A. Taylor: Very, very simply, Mr. Speaker, and the member should know this -- there are two hearings. One was the Berger hearing, which dealt with the environmental and social matters. The second is the hearings before the National Energy Board in connection with the technology and the physical construction and routing of a pipeline. Until those hearings were completed and the reports out, I don’t think this government or anyone was in a position to assess and determine what is the appropriate pipeline. In other words, get the facts first.
Mr. Peterson: Are you saying you have no position?
Mr. Nixon: I’d like to put a question to the Premier. Can he make a statement to the House giving us information about the special inquiry that he must have ordered personally into certain contractual arrangements made by Ontario Hydro on two of their construction sites, including the Bruce Peninsula and, I believe, Madawaska? The information that is available to us was reported in the Toronto press the first week of June.
Hon. Mr. Davis: Mr. Speaker, I cannot. There is an order related to the matter before the courts to which this question refers, which order prohibits any discussion or publication of material and I intend to abide by that order.
Mr. Nixon: Supplementary: Knowing that we do not want in any way to infringe on the prerogative of the courts, will the Premier indicate whether or not an order in council was established giving some responsibility to former judge Campbell Grant to investigate these matters and was the matter supposed to be secret; and if not, why was the Premier so outraged when it was brought to public notice by the Globe and Mail?
Hon. Mr. Davis: Mr. Speaker, I really can’t recall in the 47 years that I have known myself as well as I do -- and some days I’m not sure how well -- that I have been outraged. My recollection was that I did take exception --
Mr. Nixon: Umbrage, umbrage.
Hon. Mr. Davis: Well, I can take umbrage, I can disagree, I don’t personally have to be outraged in the process.
Mr. Nixon: Is the Premier implying that this matter is of no importance?
Hon. Mr. Davis: No, Mr. Speaker, I’m not implying this matter is of no importance.
Mr. Nixon: Well, will he give us an answer?
Hon. Mr. Davis: I am saying that there is an order issued by the court, which I intend to respect.
Mr. Nixon: On a point of order, since the Premier has raised a matter of such importance, I wonder if he would --
Hon. Mr. Davis: I didn’t raise it, you did.
Mr. Nixon: Excuse me, Mr. Speaker, if I may clarify my response to the interjection that this is a matter which, it is said, cannot be discussed in the House. Certainly that is a matter of special importance and sensitivity. Mr. Speaker, I wonder if you would use your good offices to see that the orders of the court are placed before the House so that we might have your guidance as to whether or not this matter, which involves Ontario Hydro and a decision by the Premier to order a secret inquiry, can or cannot be discussed in this House.
Mr. Speaker: Not being familiar with the subject of the hon. member’s comment --
Mr. Lewis: You are the only one who isn’t.
Mr. Speaker: -- I will look into it and see if that is proper or if it is not proper.
Mr. Speaker: Order, please. We had better get off this subject. The member for Bellwoods.
Mr. Speaker: Order, please.
Mr. Cassidy: Supplementary, Mr. Speaker.
Mr. Speaker: Order, please. Everything has been declared sub judice as I understand it.
Mr. Lewis: It has not.
Mr. Speaker: Order, please. If a question can’t be answered there is not much point in pursuing it.
Mr. Lewis: He hasn’t answered the question.
Mr. Cassidy: Supplementary, Mr. Speaker.
Mr. Speaker: Just a moment. You may ask your supplementary. This will be a final supplementary on this matter.
Some hon. members: Oh, no.
Mr. Sargent: How can you rule that?
Mr. Speaker: Order, please. The hon. member should be the last one to ask.
Mr. Speaker: Order, please. Will the hon. member please be seated. Order. It has been indicated that there is no answer to the original question.
Mr. Sargent: How do you know until you have heard the question?
Mr. Makarchuk: That is a pretty logical statement.
Mr. Speaker: It has been indicated that an answer is not possible to the subject under question.
Mr. S. Smith: Supplementary to that answer.
Mr. Speaker: There can’t very well be a supplementary question to a non-answer. Order, please. I am willing to hear the supplementary. If an answer is possible it will be given, I am sure. If it is not possible then it can’t be given. We will have one supplementary from the member for Ottawa Centre first of all, and we will rule on that.
Mr. Cassidy: Thank you, Mr. Speaker. Can the Premier please say under what authority -- he didn’t answer this question before -- former justice Campbell Grant was asked to make this inquiry? Can he also say why, when allegations of activity that might be in contravention of the law were being made, no reference was made to the OPP, but the political route was taken for having this kind of an inquiry?
Hon. Mr. McMurtry: Political route? That is nonsense.
Mrs. Campbell: How do you know?
Hon. Mr. McMurtry: Are you saying you join in that insult to Hon. Mr. Grant?
Hon. Mr. Davis: Mr. Speaker, I don’t intend -- because this is an important matter -- to comment on an accusation of that kind about a former justice of the Supreme Court of this province. I just won’t share that sort of insult with the member for Ottawa Centre.
Hon. Mr. Davis: Mr. Speaker, I just restate what I said to the former Leader of the Opposition -- that there is a court order. I intend to respect that court order, and I cannot and will not comment on matters that are presently before the court and that are the subject of a court order requiring non-disclosure or discussion.
Mr. Speaker: Order, please. Next question. The hon. member for Bellwoods with a new question.
Mr. Cassidy: The court order doesn’t extend to who ordered the Grant inquiry.
Mr. Speaker: Order, please. The Speaker has called for the next question from the member for Bellwoods.
Mr. Lewis: On a point of order. I am not very happy with the Speaker’s ruling. I would like to make a point of order. I am not inclined to pursue things that are in the court. I just want to know why it is sub judice or why the Speaker cannot allow the Premier to respond to the question of who ordered an inquiry which this government entertained, and why? That has nothing to do with the court.
Hon. Mr. Davis: This is right. It has been made very clear. I said in the press I asked Hon. Mr. Campbell Grant to do this investigation.
Mr. Sargent: How much are you going to pay him?
Hon. Mr. Davis: It may come as a great shock to members across the House but the Premier of this province does have that right.
Mr. Nixon: And he has the responsibility --
Mr. Speaker: Just one moment, please. The hon. Leader of the Opposition has a comment or a question of me.
Mr. S. Smith: Supplementary to that.
Mr. Speaker: Well, you may place it and we will see whether it should be answered or not.
Mr. S. Smith: Thank you very much, Mr. Speaker. In view of the answer that the Premier himself ordered the inquiry, I want to ask the Premier under what authority he asked the judge to do this; and furthermore, whether there were funds voted for this inquiry? If so, how much and by what authority?
Hon. Mr. Davis: Mr. Speaker, I don’t want to be provocative. I will try to help the Leader of the Opposition as much as I can. The Premier of the province does not need any statutory authority to ask for something to be looked into or investigated. I did it on my initiative.
Mr. S. Smith: You do need authority for the money.
Mr. Speaker: Order, please. The hon. member for Bellwoods with the next question.
Mr. McClellan: I have a question of the Minister of Community and Social Services with respect to his statement. Do I understand correctly the statement of the minister with respect to the implementation sequence for local children’s services committees, that the gist of what he said was that we will not see full implementation of local children’s services committees across the province until 1982, some five years hence?
Hon. Mr. Norton: I don’t recall that date being included in my statement. I did indicate the implementation of children’s services by the local authority in the area would begin on April 1, 1978.
Subsequent to that, after establishing a series of initial projects across the province and gaining experience from the implementation and the operation of those during the first year in a variety of local settings, including the north and certain areas in the south with different local government structures in those areas, for example, we would then be in a position to expand beyond that.
I would urge the member to try to see the wisdom and the realism in that approach. There has been an attempt in other jurisdictions to take similar steps in terms of the decentralization of the delivery of children’s services. To date, the experience in other jurisdictions has not been very successful. In one jurisdiction where they have been engaged in the process for a number of years now -- one of the American jurisdictions -- they have only recently arrived at a point which is approximately where we are now in terms of our first phase of implementation.
In the implementation at the local level one has to bear in mind the delicacy and the potential difficulties that exist there in terms of the question of the structures of the local committees, the question of the roles of those who are engaged in the delivery of service vis-à-vis those who are at the receiving end of the services, the importance that whatever models we implement at the first stage of that implementation be carefully developed through consultation and then very carefully implemented and monitored so that we can be sure we don’t meet with the kind of frustration that other jurisdictions have.
I am very optimistic because I think we have some of the most able staff in this whole country who are working on this and who are very much aware of the sensitivities of the communities across this province. To forge ahead too quickly could be the most negative of all approaches.
Mr. McClellan: By way of supplementary, given that I am simply trying to understand the time table, may I ask the minister if I am correct as follows: That he will establish pilots in 1978 which will begin budget review in 1980, which will be ready to assume full responsibility in 1981 and, if I understand correctly, which is my question, he is not prepared to implement across the province local children’s services committees until the pilots have assumed their full responsibility, which according to his table is 1981. So are we looking then at 1982, which is my question, for implementation, which is five years away?
Hon. Mr. Norton: I can’t find the specific spot to check the accuracy of the member’s quotation. My recollection was that after one year of experience with the local committees we would proceed then with the implementation --
Mr. McClellan: At full responsibility?
Hon. Mr. Norton: -- on a broader basis across the province.
Mr. McClellan: You still don’t know.
Mrs. Campbell: Supplementary: Could the minister explain to this House what he contemplates as the membership of the local committees? Are they to be confined, at least in the early stages, to the mechanics of the situation, including the funding, rather than to the very much more pressing matter of the accountability to the community?
Hon. Mr. Norton: Mr. Speaker, on the first part of that question, the composition of the local committees, if the member checks the accompanying documents with the implementation plan, for example --
Mrs. Campbell: I am trying to find it.
Hon. Mr. Norton: -- there is a section in that which sets out in considerable detail the types of questions that we have yet to answer, in consultation with the people across this province, before there is a final determination of the composition of those committees. In fact, on page four of the implementation plan -- and I think that the hon. member can recognize that those are questions that it is essential to answer before we make any final determination on the composition -- there are a variety of positions.
If one speaks with some people involved in local government they would see it primarily as simply a committee of the local council. That is a totally unacceptable position to many of the people who are engaged in the delivery of services across this province and others who have been participating in the consultation process. So obviously there has to be some further consideration to that and a resolution of those differences of opinion if we are going to arrive at the position where we have the co-operation of the people from all of the agencies and from local government as well.
Initially, in the involvement of the local committees in the planning process at the local level they will obviously be involved in the aspect of financial planning and budgeting for the area. That will be one of their earlier involvements. They will also become involved in the question of setting of priorities and the establishment of those priorities for their communities and the planning of children’s services to meet the needs of their local communities. It will not be exclusively, by any means, a financial function that they fulfil.
Mr. Mancini: You are getting as bad as Taylor.
Mrs. Campbell: Supplementary --
Mr. Speaker: We have spent close to 10 minutes on this particular question. I know it’s important, but I think we should come back to it later if we have time, because we’re cutting out the opportunity for other members to ask questions. The hon. Solicitor General has the answers to questions asked previously.
SHOOTING AT BRACEBRIDGE
Hon. Mr. MacBeth: Mr. Speaker, I understand in my absence on Tuesday the member for York Centre (Mr. Stong) directed a number of questions to the Premier concerning the armed robbery of the residence of the member for Simcoe East (Mr. G. E. Smith) and the subsequent police action.
I have been advised by the commissioner of the Ontario Provincial Police that at 11:30 a.m. on June 27, Mrs. Smith returned home and was confronted with an intruder armed with a sawed-off shotgun. The man robbed her of approximately $155 in cash and a quantity of jewellery. Mrs. Smith’s car was also stolen. During the robbery the culprit terrorized Mrs. Smith by telling her that he was desperate and had nothing to lose. At one point he threatened to shoot her grandchildren when they returned if she did not obey his demands.
An investigation was conducted by the Orillia police department and the OPP, and as a result a description of the stolen car was broadcast over the OPP radio network in which the man was described as armed and dangerous.
At about 1:30 p.m. provincial constable M. J. Murdoch observed the wanted car travelling north on Highway 11 south of Gravenhurst. Murdoch pursued the car and, over a distance of seven miles, several attempts were made by well-marked OPP vehicles to bring the stolen car to a stop. Three black-and-white cruisers and one motorcycle were involved. At one point a motorcycle officer pulled up on the left side of the car and was forced by the driver into the lanes of oncoming traffic. When one stationary car attempted to stop the stolen vehicle at the intersection of Highway 11 and Reay Road the driver turned west on Reay Road and continued a distance of approximately one mile when the vehicle ran off the road and struck a tree. No shots were fired by any police personnel during the pursuit of the vehicle.
At the time the vehicle struck the tree, it was being pursued by two OPP cruisers driven by provincial constables B. C. Kruger and M. J. Murdoch. At this point, the driver jumped out of the car and pointed a loaded sawed-off shotgun at Constable Murdoch. Constable Kruger told the man to, “Hold it”; but he continued to advance, pointing the shotgun at Murdoch. Both officers believed that their lives were in danger and fired four shots from their .3 service revolvers, fatally wounding him.
The deceased has been identified as James William McGrath, age 52, of no fixed address. He escaped from Joyceville Penitentiary on May 28, 1977. He has a lengthy criminal record involving crimes of violence, including armed robbery and charges of possession of firearms.
OPP officers were dressed in prescribed police uniforms. Constables Kruger and Murdoch received extensive firearm training. In all cases where OPP officers are involved in the apprehension of armed and dangerous persons, every effort is made to effect arrest without violence. In this instance and from the information that is available at this time, I am satisfied the action taken by our officers was justified.
A thorough and extensive investigation is presently being conducted by CIB inspector Tom Lennon and by regional coroner Dr. F. F. Archdekin of Bracebridge. An inquest is planned for the week of July 11 in Bracebridge. Because of the pending inquest, it would be inappropriate for me to discuss the case in greater detail at this time.
If I just might go on to a matter of fire safety which was also raised when I was away, I have a five-page answer and I might propose to hold it. There was urgency involved at the time of the question. I only returned from Ottawa just last night, and I would propose to hold it for the first of the week and give it as a statement, if that is agreeable. Otherwise, I can give it as an answer today, sir.
Mr. Speaker: Agreed.
LOSS OF DOCTORS
Mr. Conway: A question of the Minister of Health: I wonder if the ministry has any data to support or repudiate the recent reports that in recent months there has been a sharp increase in the number of Ontario doctors leaving for the United States?
Hon. Mr. Timbrell: No.
Mr. Conway: Considering that this statement has been made, not only by the Ontario Medical Association but supported this week by the registrar of the College of Physicians and Surgeons, I wonder if the minister would undertake a dialogue with that particular agency to determine what, if anything, can be done. One of the reasons given for the sharp increase is government relations in this province.
Hon. Mr. Timbrell: This is a subject which has been a matter of discussion between me and the members of the College and the OMA. It was a subject of discussion as well at the most recent meeting of Ministers of Health in Ottawa just a week ago today. I will be pursuing it further with the college because I think there are some things we could be doing to address some of the difficulties, although I may say that Ontario, and Canada in fact, faces a situation currently and looking ahead over the next decade of a surplus of physicians. I think we’re going to have to do everything possible to bring our needs for physicians into line with the realities of what we can afford and of the services required.
Mr. Conway: Supplementary: Having regard to the surplus question, would the minister support or deny a claim made in a recent report that, because of a lack of specialists at Humber Memorial Hospital here in Toronto, there has been a temporary shutdown of one ward at that hospital?
Hon. Mr. Timbrell: That must be a report that went just to that member. I’ve not heard it, Mr. Speaker.
Mr. Speaker: Final supplementary on this.
Mr. B. Newman: While arriving at an answer to this question, would the minister look into the Essex county situation because, from the understanding I have from Dr. Stanley Oleksiuk, it is a very grave situation and large numbers are actually leaving the country and going into the United States?
Hon. Mr. Timbrell: I met with Dr. Oleksiuk and representatives of the Essex County Medical Society within the last two weeks, and there again the question did arise. But I think the hon. member has to realize, first of all, while it’s true that some doctors are leaving the province of Ontario, leaving Canada for that matter, for a variety of reasons, including much higher salaries, lower income tax rates and other factors in the United States, we are at the same time experiencing in Canada as a whole an ever-increasing number of physicians. We have something like about a one and a half to two per cent increase in the number of physicians per year; even though we’ve taken steps in Canada to limit the number of doctors coming into the country from outside of Canada, we still are turning out a fair number of graduates. It’s to that area, as well as the question of migration to Ontario, that I think we’re going to have to address more attention in the years to come.
I may add just one thing. It was confirmed to me at a recent meeting that within the next two years the province to the east of us will put virtually all of its doctors on salary. I think it’s fair to assume that we will have a significant influx of specialists in particular, but doctors in general, to this province because of that.
Mr. Speaker: One final supplementary on this.
Mr. Martel: In view of the fact that doctors in the Sudbury region some weeks ago had an all-day study session apparently because of the bad relationship between the ministry and the OMA, is there not some way in which this growing mistrust between doctors and government can be healed so that we don’t have these frequent walkouts?
Hon. B. Stephenson: Not as long as you are around, no.
Hon. Mr. Timbrell: I find it very intriguing that this question comes from that corner of the House --
Mr. Martel: I was the one who said they should have the right to go on strike.
Hon. Mr. Timbrell: -- given all the efforts that the member’s party has conducted in recent times to discredit the medical profession in this province.
Mr. Martel: They didn’t go on strike against us, they went on strike against you. Don’t be such a dummy.
Hon. Mr. Timbrell: I think they were talking about politicians, Mr. Speaker.
Mr. Lewis: The minister is lucky he has legislative immunity for making statements like that. He wouldn’t dare say those things outside. He wouldn’t dare say it outside.
Hon. Mr. Timbrell: I’ve said it outside.
Mr. Speaker: Will the hon. minister please continue with the answer?
Hon. Mr. Timbrell: I told the member’s colleague, the member for Parkdale (Mr. Dukszta), on several occasions that in my opinion the NDP was trying in the most recent electoral contest to dance into power on the corpse of the medical profession of the province.
Mr. Lewis: As a matter of fact, we are the only party the doctors trust in this province, as it happens.
Hon. Mr. Davis: We got a lot of votes from the doctors.
Mr. Lewis: It is true. I can count each and every one of them.
Mr. Speaker: Will the hon. minister continue the answer to the question?
Mr. Lewis: I hope that got on to Hansard. I hope Hansard has that interjection.
Hon. Mr. Timbrell: How much time have we got?
Hon. Mr. Rhodes: Stay healthy, Martel.
Hon. Mr. Timbrell: Mr. Speaker, in recent months, the member should know, and if he doesn’t know I’ll tell him, we have established with the OMA a joint committee between the medical association and the Ministry of Health to look at the whole question of health spending as it relates to the provision of medical services. I’m hopeful that out of that process and out of the regular liaison which there is between the OMA and the college with me as Minister of Health and my senior officials, that we can start to address some of those concerns.
Let me say further that I think one of the concerns is that unrealistic expectation on the part of some practitioners that somehow we’re going to turn back the clock to the days prior to universal medicare. Any practitioner who thinks that the clock can be turned back is really living in a fantasy land.
Mr. Martel: That is not it at all.
Mr. Lewis: You forced them into OHIP.
Mr. di Santo: I have a question of the Attorney General. Since, on the advice of the Solicitor General and the law enforcement officers, he expressed opposition to a public inquiry into organized crime, and in view of the fact that the publicity of the CBC programs and the media reports have deeply perturbed the ethnic communities involved, the vast majority of whom have nothing to do with organized crime and have contributed much and are contributing to our society, could he tell the House what would be the circumstance that would make him decide that a public inquiry is necessary?
Hon. Mr. McMurtry: Mr. Speaker, it’s impossible for me at this time to speculate as to what those circumstances might be. It may be of interest to the hon. member, and to other members, that the federal and provincial Attorneys General met for the past two days in Ottawa. At that time, the discussion of the wisdom or usefulness of a public inquiry into organized crime was discussed at some length. It was almost the unanimous view of all Attorneys General, the federal Attorney General and the provincial Attorneys General, that such an inquiry would serve no useful purpose in their respective provinces, with the exception of Quebec, of course, which has had a fairly extensive probe mandate which closes at the end of July.
The position of the Attorney General in Quebec is that they see both positive and negative aspects of their inquiry. They wish to have some time to assess its value to determine whether or not they would wish to continue such an inquiry.
The Attorney General for British Columbia said that they were still reviewing the feasibility of such an inquiry but had no immediate plans for one.
So, I think the position of the Solicitor General and myself, so far as recommending any judicial inquiry, is to continue to monitor this situation closely. If at some date in the future -- without predicting what those circumstances could be -- it would appear to be in the public interest to have such an inquiry, then an inquiry would be held.
I remind the member that the senior representatives of the major police departments in Ontario recently stated, unequivocally, that such an inquiry would serve no useful purpose and, indeed, could interfere adversely with on-going investigations. There are also some 60 to 70 individuals who have been charged, whose cases are presently before the courts, who are suspected of organized crime involvement; and there is a concern that any public inquiry would interfere unfairly with the conduct of those trials.
At the present time, the view of our senior police officers -- a view with which the Solicitor General and I concur -- is that the most effective way to proceed is to continue to investigate -- and the province supplied the OPP with some additional resources very recently with respect to the investigation of organized crime -- and to prosecute these people in the courts.
I should say before conclusion, Mr. Speaker, that I share the member’s concern in relation to the fact that some minority groups have been singled out as being active in this area. I agree with him that those individuals in no way reflect the overall communities which are certainly as law-abiding as any other community in the province.
Mr. di Santo: Supplementary: I appreciate the answer of the Attorney General, but in view of the existing uncertainty which has been dragging on since 1972 when his predecessor made a similar statement, would he make a detailed public statement in order to clear minority groups that have been singled out to prevent innocent reputations from being smeared and racism being unleashed?
Hon. Mr. McMurtry: I can make a statement to the Legislature, but I thought that I had already made it quite clear. I think the member is undoubtedly concerned with the Canadian Italian community in particular and I will say very categorically that that community is every bit as law-abiding as any other community in the Canadian fabric. If anyone attempts to draw inferences to the contrary by reason of the fact that certain people have been given a high profile, then I just say that those inferences are totally groundless.
Mr. Reid: Would the Attorney General agree that the amount of organized crime in the province of Ontario has increased drastically in the last few years? Can he indicate to the House whether it is a matter of the present laws as they exist, which are mostly under the federal jurisdiction, or whether it’s the problem with the backlog in the courts or the competence of the police in this matter that has allowed organized crime to grow to the extent it has in Ontario in the last few years?
Hon. Mr. McMurtry: I don’t agree that organized crime has increased drastically in the last few years in Ontario. I don’t agree with that at all. I can tell the member that the police resources that have been allocated to this problem have increased dramatically and, as a result, they are much better able to cope with the problem now than they were 10 years ago. But there’s no evidence to indicate that it has increased drastically. Insofar as many figures were identified in Ontario in the CBC program, the identity of these individuals and their suspected activities have been known for many years in this province.
With respect to dealing with it, I have instructed my ministry to establish perhaps a more co-ordinated effort with respect to prosecuting any cases that have any possible characteristic or dimension of organized crime and have urged them to press for early trial dates. This is being done. The fact that a number of arrests have been made in recent months -- and we are optimistic about the results of most of these cases -- indicates some support for the police position that the situation is handled more effectively through the traditional methods of adequate investigation and forceful prosecution.
At the same time, I should remind members of the Legislature that in providing this traditional approach we also provide certain traditional safeguards that cannot be provided in public inquiries when evidence is introduced, as the hon. member well knows, on the basis sometimes of the most idle rumour and gossip and where people’s reputations, often unfairly, are damaged beyond repair. I think every member of the Legislature should be concerned with the importance of maintaining these traditional safeguards.
Mr. Peterson: Supplementary.
Mr. Speaker: No, I think we should get on with another question. I will call on the hon. member for Durham West with a question.
Mr. Peterson: Mr. Speaker, in fairness, that is the wrong order.
Hon. W. Newman: You haven’t even got a question.
Mr. Speaker: Order, please. It’s been very strongly indicated on many occasions, and quite properly so, that one of the reasons for extending the question period to an hour is to give more people an opportunity to ask questions. When there is a lot of time taken on the questions and their supplementaries, it defeats the purpose of that. We can come back to that question, if there is time. I call on the hon. member for Durham West at this time.
Mr. Peterson: On a point of order.
Mr. Speaker: No; there is no point of order, this is wasting time. It is a very important question
Mr. Peterson: Of course it’s an important question.
Mr. Speaker: -- there’s no question about that. Will the hon. member take his seat, please.
Mr. S. Smith: We haven’t had an answer at all.
Mr. Speaker: It is your question period. If you want to take it all up on one question, then you have spoiled the purpose of extending the question period. I have said we will come back to it if there is time, if you wish. It is an important subject. We will call on the hon. member for Durham West.
Mr. Peterson: Every time you use your judgement, you are wrong.
NORTH PICKERING PROJECT
Mr. Ashe: I have a question from the hon. Minister of Housing. As the minister knows, there are significant amounts of land in and around the town of Pickering that have been covered under various ministers’ zoning orders, amended from time to time, for approximately five years. I am just wondering whether the minister has any indication when these ministerial orders might be lifted --
Mr. Cunningham: Where have we heard that before?
Mr. Breithaupt: Yes, he knows that.
Mr. Riddell: Slip down to the estimates.
Mr. Ashe: -- or under what conditions he sees them being lifted?
Mr. Sargent: Tell him he ran for the wrong party.
Hon. Mr. Rhodes: First of all, the zoning orders are remaining in place, as we indicated we would leave them there, until such time as the federal-provincial transportation study was completed. I understand that report should be due some time in July.
Secondly, there is a method by which persons can apply to the minister to have zoning orders amended for specific uses in the area. Some have so applied and have been entertained.
The third reason I have some concern about lifting those zoning orders at this present time is because of the fact that we do have legislation now in the federal House, in the form of Bill C-41, in which the federal Minister of Transport has indicated that if a provincial government or a municipal government does not have land use controls on land around airports then they would assume that responsibility within the terms of their legislation. I would prefer that any control of that land in that particular area remain in the hands of the province or local municipalities and not at the federal level.
Mr. Ashe: Supplementary: Can we have a commitment from the minister that once the joint federal-provincial study is completed and has been tabled he will press other ministries involved to make a disposition of whether an airport will proceed or not, and hence the minister’s zoning order can be lifted?
Mr. Lewis: What?
Mr. Cassidy: Is that your government’s policy?
Hon. Mr. Rhodes: Mr. Speaker, I don’t think that I could make that commitment.
Mr. Sargent: That woke him up.
Hon. Mr. Rhodes: However, I think it’s fair to say that there’s every possibility that considerable reconsideration may take place in that area as it relates to the airport. I don’t want to speak on behalf of my colleague, the Minister of Transportation and Communications (Mr. Snow), but one of the very prominent members of the People or Planes group is now an advocate of building the airport out there, namely the former member for Durham West.
Mr. Cassidy: If you learn nothing you forget nothing, do you?
Mr. Speaker: The hon. member for Rainy River.
Mr. Reid: Thank you, Mr. Speaker. I have a question for the Premier in regard --
Mr. Lewis: On a point of order, what exactly was the minister suggesting? That Charles Godfrey is now in favour of building the Pickering airport?
Mr. Nixon: People and Planes.
Mr. Lewis: I’m sorry. Is that what he was saying?
Hon. Mr. Rhodes: Mr. Speaker, what I was saying is that during a certain 31-day period the former member of Durham West was quoted, I believe quite accurately, as stating that if it was a matter of jobs he would be in favour of the airport being built in that particular area.
Mr. Lewis: Come on.
Hon. W. Newman: That’s why he’s not here today, because you can’t have it both ways.
Mr. Lewis: Boy, oh, boy. You couldn’t slander him in his presence so you’ll slander him in his absence. That is nonsense.
Hon. W. Newman: You just can’t have it both ways.
Mr. Lewis: In fact, I will undo my tie and speak to you.
Mr. Speaker: Order, please.
Hon. W. Newman: Read it in the newspapers.
Mr. Nixon: Bash him, Bill.
Mr. Lewis: That is ridiculous. The whole thing is preposterous. You are too much.
Hon. W. Newman: It hurts, doesn’t it?
Mr. Martel: Have you got over the smear tactics yet? You reached an all-time low.
Mr. Mancini: No problem, no problem.
Mr. Speaker: Order, please. It’s been quite a day. The hon. member for Rainy River with a question.
Mr. Reid: I have a question for the Premier related to a letter I sent him last week in regard to The Election Act. Will the government bring in amendments to The Election Act this fall in order to allow people who wish to vote in a provincial election the widest possible scope in getting proxy votes in the election, whatever reason they have for being away from home on polling day, and including people in hospitals and so on?
Also, if I may add, allowing people in urban polls to be vouched for if they’re left off the voters list?
Hon. Mr. Davis: Mr. Speaker, this is not a unique occasion. The hon. member has made other constructive suggestions in correspondence to me on other occasions; on one or two occasions.
Mr. Reid: I have lots of instructions.
Hon. Mr. Davis: As to the suggestions that were contained with respect to possible amendments to The Election Act, I will say that I’ve had a preliminary discussion with the one gentleman who probably knows most about the Act, of anyone that I know at least, and I do contemplate the possibility of amendments to The Election Act.
Mr. S. Smith: What did the Minister without Portfolio (Mr. Henderson) say?
Hon. Mr. Davis: We are contemplating, of course, having both the DROs and the poll clerks from the majority party. I mean we are considering that sort of thing.
Mr. Reid: That was not my suggestion.
Hon. Mr. Davis: Oh, that wasn’t one of your suggestions?
Mr. Conway: Well, you are finished then.
Hon. Mr. Davis: No, we really aren’t contemplating that. But there are two or three other matters that I don’t believe the hon. member raised that I hope we will have a chance to consider here as well. One of them, very frankly -- and I hope I won’t be misunderstood as I have not made up my mind and I have had no discussion with my colleagues -- does relate to the length of time of the election. I guess it is just because I felt on about the 34th day --
Mr. Reid: A week is long enough.
Hon. Mr. Davis: -- 30 days would be long enough. I have discussed this, I know, with the former Leader of the Opposition (Mr. Lewis). I think we reached an agreement, just on a personal basis, that perhaps campaigns were a shade longer than they needed to be.
Mr. Reid: Another week and we’d have had you.
Hon. Mr. Davis: Oh no, another week and they would have found you out; and who knows, it might have been a much smaller group. However, to answer it very briefly, yes, we are contemplating changes, and some of those which the hon. member mentioned in his letter.
Mr. Riddell: The fact of the matter is we conked you out.
Hon. Mr. Bernier: You lost a seat, you know. Didn’t anybody tell you that?
Mr. Speaker: The oral question period has expired.
GRANT INQUIRY ON HYDRO
Mr. Nixon: On a point of order, Mr. Speaker: In reference to the point of order I raised during the question period, I don’t know if you made it clear whether or not you would look into the matter of sub judice as it applies to the matter that was raised in the question period, so that we would know what areas surrounding the decision taken by the Premier to call a special inquiry would be a subject for the question period in the future. I would appreciate your advice in that regard.
Mr. Speaker: Petitions.
Hon. Mr. Timbrell: In accordance with the revised House rules requiring statutory reports to be tabled within six months of the close of the reporting period, I wish to inform the House that the 1976 annual report of the Ontario Cancer Institute is being tabled today.
However, some delay is anticipated in presenting to the House three other statutory reports for 1976 which are due at the end of June. They are the 1976 annual reports of the Ontario Cancer Treatment and Research Foundation, the Health Disciplines Board and the Denture Therapists’ Appeal Board.
I understand that the 1976 financial statement of the Ontario Cancer Treatment and Research Foundation is being audited by the Provincial Auditor, and that the report of the Health Disciplines Board and the Denture Therapists’ Appeal Board are with the printer.
Mr. Speaker: Motions.
Introduction of bills.
BUSINESS OF THE HOUSE
Hon. Mr. Welch: Mr. Speaker, just before calling the order of the day, the rules provide for some indication on Thursday as to the order of business for the following week. Suffice it to say at this point that we will proceed with legislation and estimates as we have agreed.
I would like to draw the attention, particularly of the private members, to the balloting which will go on in this chamber on Monday next at 11 a.m. The private members who wish to take advantage of provisional order 30 will be here, hopefully with their ballots, and we will establish the order of precedence for the consideration of private members’ bills starting in the fall. I am advised there are a number of private members who have not picked up their ballot. If they would like to check this out they may do so at the Clerk’s table. We will be here for that exciting draw on the American holiday, July 4 sharp at 11.
Mr. Cassidy: Will it be televised?
ORDERS OF THE DAY
SUCCESSION DUTY AMENDMENT ACT
Hon. Mr. McKeough moved second reading of Bill 7 an Act to amend The Succession Duty Act.
Mr. Peterson: Very briefly this is a bill to change certain provisions of The Succession Duty to increase the amount of estate that is not eligible for duty in the circumstances to simplify certain procedures. I just want an opportunity to say a few things that we feel about this.
There was certainly some speculation some years ago when the capital gains tax was brought in that the province may be vacating the field of succession duties. Certainly that was one of the views that has been expressed by several people and in fact the succession duty field has been vacated by certain other provinces.
On the other hand, there are, we feel, valid reasons for maintaining some kind of succession duty level in this province, all the while being sensitive to the fact that we are competing with other jurisdictions, and the competition is getting very tough, to create the proper kind of investment climate. I think this is something that probably should concern the Premier (Mr. Davis) and the Treasurer (Mr. McKeough). With the number of high taxes we have, as although granted our income tax is near the lowest, we are making this a decreasingly attractive province for people to live in today with our very high taxes in various areas.
I think any government is always in competition for highly skilled people and skilled workers for industry. Industries have many options when they decide where they are going to locate in this country today. Certain other provinces, namely Alberta, make it very attractive for industry to go there and are arranging for lots of assistance and creating a very attractive atmosphere for people to go there.
Hon. Mr. Davis: And Saskatchewan.
Mr. Peterson: And now Saskatchewan and British Columbia. I think one has to be very sensitive to this, and I think in fairness the Treasurer is trying to create the proper kind of atmosphere that will keep people here. I think when one looks at the numbers, we are in danger of losing, by way of slow erosion, some of the very solid manufacturing base we have here in this province. This is one of the things that concerns me, and that is one of the reasons we support an increase in the exemption and in the size of the estate for succession duties.
Another point I would like to make: Succession duty in many respects is a dead tax. It just taxes the total amount of wealth, not the increment, nor is there relief for a decrease in the amount of wealth, but just on the actual amount. It in fact is a tax on wealth. Again we are going to have to be very sensitive that we don’t drive people out of our jurisdiction with a tax of estate over $300,000.
Granted there are a very limited number of estates that are eligible for succession duties, but we are seeing a decline in the amount of revenue generated from succession duties. We are projecting less next year than we projected this year and the last couple of years. We are seeing, possibly -- I can’t prove this, but we must be very sensitive towards people of means, people who are prepared to invest in a province, perhaps leaving because it jeopardizes their own position.
That’s a very serious worry to us. My personal approach, Mr. Speaker, is to favour those people who stay here and invest. I think we should be very sensitive about punishing people who invest. I don’t have any hesitation personally about punishing the over-consumer, using the tax system to tax consumption; but when people are staying, when people are investing in this province -- and Lord knows we desperately need investment here, the demand for capital is going to be phenomenal over the next 10, 20 and 30 years, for transportation systems, for energy systems and all of that kind of thing -- I think that we may want to be looking at ways to work the personal tax structure in order to keep that investment here, keep it rolling over, keep it creating jobs and keep it creating profits.
That is one of the problems that we run into with the succession duty tax; that people will go. We’ve seen an instance of that with these phenomenal wealth taxes in England where they virtually destroyed all estates. They’ve substantially disrupted the nature of investment and of business and of accumulated wealth.
On the other hand it is not our view in the Liberal Party that we should be encouraging the accumulation of great amounts of non-productive wealth, because we don’t feel that’s in the interests of any society. But as long as it is productive, as long as it is turning over and as long as it is creating jobs, then we feel we have to be sensitive to those amounts of capital. There are lots of ways to escape these wealth taxes now, in family farms and family businesses and that kind of thing, but there are becoming so many loopholes to it that it’s probably not as meaningful as it used to be.
With those provisos I would just say to the Treasurer that we support this bill. We think it keeps pace with inflation, roughly, and it’s probably necessary to do that. Frankly, an estate of $300,000 is not a large estate in many respects given the fact that if the people aren’t encouraged to save and provide for their own old age or whatever, they’ll end up on the public payroll and end up a burden on society. Certainly our philosophy of taxation should be to encourage people to save, to provide for themselves and to guarantee their own economic futures as best we can, rather than having everyone’s economic future depend on the state because we are now realizing the costs of that. That’s why we have no hesitation whatever in supporting the Treasurer on this particular bill and in looking for that magic balance between the two competing forces that I was talking about. We feel that the figure of $300,000 is as reasonable in the circumstances as we can possibly come up with and that is why we support this bill.
Ms. Bryden: This bill appears to be a considerable rewrite from Bill 42, which was introduced with the budget April 18, which makes one wonder if the government really knew what it was doing when it brought in its budget bills and then had to rewrite the whole thing two months later. The particular part that has been rewritten the most is the question of giving a credit for capital gains taxes as a result of deemed realization on death, which is a very knotty problem. Obviously the government received representations from a good many people who knew something about succession duties and has apparently decided to rewrite it.
As a matter of fact, the whole Succession Duty Act is long overdue for rewriting. I think it started in 1892 and there was a major revision in 1939. Since then it’s been strictly picking and poking at it. It is considered about the worst piece of legislation in the field in Canada. We did have an advisory committee set up by the government in 1973 to look at our succession duty statutes. That committee’s recommendation said: “The committee urges the immediate repeal of The Succession Duty Act and the simultaneous enactment of a modern amplified death tax.” The government is still turning a deaf ear to that and leaving us with legislation which requires a great deal of legal advice and assistance and takes up a great deal of time.
This particular amendment does a number of things. First of all, it raises the duty free threshold for estates from $250,000 to $300,000. Second, it eliminates from the additional rate of duty any individual inheritance of $300,000 or less in the preferred and collateral groups. Third it provides that in the case of the capital gains tax arising from deemed disposition at death of the assets that have capital gains, the charges for this under The Income Tax Act may be fully credited against succession duties payable rather than, as in the past, deducted from the aggregate value of the estate at the election of the executor.
For a great many people this is a very significant additional benefit in that for some people it could completely eliminate duty. If they had a large amount of capital gains tax payable at death, it could wipe out the duty payable on their estate.
Fourth, it provides for some administrative simplification, releasing certain classes of property without ministerial sanction. The minister is given power to prescribe by regulation the persons or classes of persons who may benefit from this and the classes and kinds of transactions which may benefit from this.
Fifth, it replaces an archaic form called the affidavit of value and relationship by a simplified return.
Sixth, it provides for retroactive regulations to implement the above new powers given to the minister. This is a very questionable type of legislation, to empower people to put into effect retroactive regulations. It also provides for a retroactive effective date, back to April 20, 1977, so that at least the people who died since 1977 were not affected by that two-month hiatus in the life of this province when business ground to a standstill due to an unnecessary election. However, once again I question whether it is good legislative practice to put into effect retroactive effective dates.
As a matter of fact, the Minister of Revenue sent out a rather cheery memo to people just the day the election was called saying not to worry, we’re going to introduce all these bills as soon as we get back in -- she didn’t put it quite in those words -- they will all be introduced when the new government is formed and you can expect that the exemptions that are to be allowed in the bills will go ahead.
We intend to oppose this bill for several reasons, outside of the fact that I think it is a very bad substitute for a new Succession Duty Act. Basically, we believe that the taxation of wealth is basic to a progressive tax system and the transfer of wealth between generations is an appropriate place for the state to take a share of the wealth. I’m not suggesting they should take all of it, but I am suggesting that this is an appropriate stage at which the state should share.
Mr. Nixon: That is good of you.
Ms. Bryden: Because, otherwise, we do not really believe in equality of opportunity. Everybody comes into this world with nothing and they go out with considerable, but the new generation should not have head starts over other people.
Mr. Nixon: Are you going to take yours with you?
Mr. Gaunt: You come in with nothing and go out with nothing.
Ms. Bryden: However, this does not mean that we do not recognize that there must be special provision for widows, for spouses, for dependants who are left when the deceased passes on. We have always said this, that there must be fair and generous provision for spouses and for dependants.
Second, we have always said that the family home, for the middle and lower income classes certainly, the reasonably priced family home, should be protected from succession duties. Third, we have said there must be special provision to prevent the breakup of family businesses and family farms because we know that succession duties can cause problems in this field.
I was going to quote from our party policy on this just to clarify the issue, because I understand there were some misrepresentations made about our position on succession duties in the election.
This is the New Democratic tax program, printed in our party program which was published in 1970, and it has not been changed since then on this particular issue. It says, “To avoid hardship, instalment payment of duties over a period of years will be permitted and special arrangements will be available to prevent breakup of family businesses and family farms, including payment of duties in ways other than by cash.”
With regard to the protection of the family home, we’re all aware of how house prices have escalated rapidly, and what appeared to be a reasonable exemption from estate tax a few years ago, no longer protects the family home in certain of our major urban centres. It seems to me it’s time that we perhaps put some sort of an automatic escalation on to the exemption level at which estate tax or succession duties apply. It may have to vary, depending on the average house sales in different areas, but this business of having to bring in an amendment every year or two to raise the level is really inefficient and people don’t know where they stand when they’re planning for their future.
When we get to exemptions of the size of $300,000, we are not just protecting the average family home; we are protecting some very well-off people. It seems to me that estates of that size should be contributing a considerable amount to the Treasury, particularly when the Treasurer seems to have such a hard time finding enough revenue to cover his expenditures. With a $1.5-billion deficit, to be reducing the take from succession duties at this time seems to be the wrong direction.
The Treasurer seems to be favouring the well-to-do at the expense of the rest of the taxpayers who have to make up the difference or who have to pay the heavy interest rates that we’re all paying for that $1.5- billion deficit of last year, especially when one considers that some of the rather excessive exemptions are going to people who are very remotely related to the deceased or perhaps not related at all.
I think the minister’s approach is out of whack. He is not producing a tax on wealth. He is producing a tax that is only a token and really is contrary to the principle of ensuring equality of opportunity and the need to break up concentrations of wealth. There is no doubt that wealth is concentrating in this country, and the lack of a proper federal estate tax is another cause, but at least the province should be doing its part to prevent the concentrations of wealth, because after all we know that wealth is power, and in our society we want power to be spread widely.
For those who think that succession duties should be abolished, as our friends to my right appear to think -- I’m glad they’re to my right now -- I would like to draw their attention to the Smith committee, which studied the Ontario tax system very thoroughly and reported in 1966. It looked at succession duties in great depth and came to this conclusion:
“To the extent that the income tax ignores capacity to pay as represented by ownership of capital assets, the whole revenue system departs from the principle of ability to pay. Taxes based on wealth can mitigate this deficiency and increase the general equity of the tax system.”
There are many other writers on taxes who have corroborated that view.
Despite these conclusions, the Ontario government remains in the field but has been steadily eroding the base by repeatedly raising the exemptions beyond what is a reasonable level. As a result, the revenue yield has dropped from a high of $88 million in 1973-74 to an estimated $56 million in the present fiscal year. Succession duties and estate tax payments from the federal government amounted to 3.8 per cent of our total revenue in 1964-1965. They now amount to less than half of one per cent of our total provincial revenue.
I will concede that some of the revenue loss is due to improvement in the equity of the succession duty system in this province. With all this tinkering year by year, they are bound to do some good things. But it seems to me the principle should be that you decide that a certain percentage of estates should come back to the province and, if in the interests of equity you reduce the succession duties on one class of estate, you should recoup that revenue by increasing the rates on the estates with more ability to pay so that you maintain a reasonable contribution from succession duties to provincial revenues.
One of the problems I would like the minister to do something about is the absolute absence of any statistics of a published nature on our succession duty collections. We have no figures that show the number of estates, the income classes into which they fall and the amount paid by the estates in the various income classes. The sort of statistics that are published for income tax collections are missing for the estate tax, which is one reason so few people are able to criticize it adequately or even are aware of what it brings in.
Turning now to this new policy to let capital gains taxes paid on death as a result of deemed realization be a credit against succession duties otherwise payable, formerly such taxes had been allowed only as a debt on the estate. But, as we know, the difference between that and a credit is that the credit comes back 100 per cent to the taxpayer. When it’s a debt on the estate it affects the value of the estate, but then the dutiable rate is applied and a certain percentage is collected.
I would like to quote one person’s opinion, Professor John Bossons of the University of Toronto’s policy analysis section, who has looked into succession duties in great depth. On the question of whether a capital gains tax is a suitable substitute for an estate tax, his conclusion is: “Substitution of a capital gains tax for an estate tax can hardly be rationalized on the grounds that it is an efficient way of promoting saving. To put it differently, if an incentive to counteract the negative effects on saving of a capital gains tax were desired, one would have to take considerable pains to come up with an incentive that would be as ineffective as the elimination of the tax on estates.”
He also says about the effect on risk-taking investments and encouraging savings:
“While an income tax reduces income currently available for investment and reduces the rate of return on such investment, particularly when it includes a deemed realization on capital gains at death, an estate tax in effect merely makes one particular type of consumption more expensive, namely, the giving of bequests. It thus reduces the value of any return from an investment only if that return is given away as a taxable bequest. Moreover because a tax on bequests does not occur until death, it is heavily discounted.” So Mr. Bossons concludes that it is not a very efficient way of encouraging capital investment to provide a credit of this sort or to consider that a deemed realization tax on capital gains is a substitute for succession duties. This whole question was examined in great detail by the Langford Advisory Committee on Succession Duties in Ontario in 1973. They admitted that it was a very difficult question as to how to deal with this problem. Because there is a problem, I will concede that, of a sort of “double whammy” on some estates. The problem is that -- say you had an estate with $1 million worth of shares in it, which you bought for $100,000 in 1972. At death, you would pay $270,000 approximately -- this is based on certain assumptions -- in capital gains tax on that $900,000 capital gain. You would pay approximately $200,000 succession duties on your estate after you deducted that cost. But if you are allowed to take a tax credit, instead of paying $470,000 between the two taxes, which seems like quite a lot out of $1 million, you would get tax credit for the entire amount of your capital gains tax, because it is more than your succession duty tax. Therefore you end up paying only $270,000 capital gains tax, in the form of income tax, when you die, but you pay no succession duty tax in that example.
If you had sold those shares six months before you died, you would still have paid the same $270,000 in capital gains tax, but you would also have paid succession duties on whatever assets were left in your estate at that date. So assuming you hadn’t become a pauper, you would be considerably worse off. So it is a concession, and it’s a concession that varies in its incidence greatly, depending on what you have in your estate and how many of your assets are capable of generating capital gains or losses.
The Langford commission, 1973, did a sample run of estates and found that at least half the assets in most of the Ontario estates that it was examining were not capable of generating capital gains or losses. Therefore a credit of this sort would apply only to half of the estates and again in varying degrees. The Langford commission looked at four possible alternatives to solve this “double whammy” problem, and they found them all flawed. One of them would be to change the federal income tax act; but they didn’t feel that Ontario could do that -- although that might have been the best solution. They thought you could increase the exemption under The Ontario Succession Duty Act so that there wouldn’t be as big a double whammy, or you could change the rates for the same reason.
But then, of course, when you do that you are affecting all the other estates that don’t particularly suffer from this problem. So they reluctantly did recommend a credit, mainly because there wasn’t any other available remedy they could see. They noted that it is a non-neutral approach, it results in a lock-in effect. You tend to hang on to your assets until you die, and that’s not necessarily considered good for the economy, that sort of lock-in effect. They noted that it would benefit those who used tax shelters during their lifetime, tax shelters which were put in place with the understanding that the deferred taxes will be paid ultimately on death because it lets them off the death taxes, and therefore, in effect, they never pay back the deferred taxes.
Mr. Speaker, what we are being asked to buy is a credit system that is highly questionable, that will probably benefit only a very limited number of very well-off people, and will be discriminatory against others. That is another reason we decided not to support this bill. We think there probably are better ways of revising our Succession Duty Act to get more equity into it, and at the same time to consider relief for people who are severely hit by particular provisions.
Outside of that -- plus my objection to the retroactive regulation principle, and the retroactive date principle which are other reasons why we are opposing it -- those are my principal objections to it, Mr. Speaker.
Mr. Acting Speaker: Is there any further discussion on second reading? The hon. member for Ottawa Centre.
Mr. Cassidy: Thank you, Mr. Speaker. I want to support the comments of the member for Beaches-Woodbine and make a few comments of my own about this particular bill.
The bill represents a further abandonment of any effective tax on wealth in Ontario and that’s why we’re opposing it. The level of exemptions below which estates are tax free is being raised to $300,000, where it was formerly $250,000. But it’s worth remembering that prior to 1975 the exemption limit on estates was $150,000. The Treasurer, who has preached incessantly about what a great restrainer he is in this particular area, has what can only be described as a peculiar form of blindness.
We know the situation that Ontario is in, or that the provinces have been putting themselves into, it is the Liberal government in Ottawa which has, to some extent, created difficulties with the succession duty and has made it more difficult for provinces to levy a tax which we consider a perfectly legitimate tax on wealth.
If the Treasurer will forgive a bit of ideology on my part -- he knows he’s going to get it anyway -- the fact is that there are many loopholes and means by which people have benefitted in the tax system while they are living. It does make sense that there is an inter-generational tax on death in order to catch up with some of those things that are permitted during the lifetime of somebody who’s piling up an estate.
It’s just a reasonable part of an overall tax system. If you don’t get it at one point you should be able to have a crack at it later. If the Treasurer believes that we should have a wealth tax instead, then let him say so. But he has this ideological commitment to saying that there should be no tax at death. I’ve always thought the best taxpayer was a dead taxpayer, because he can’t fight back. But the government seems to believe otherwise. It thinks there should be far more compassion shown for people when they die -- in the money they leave behind -- than for people while they are living.
It’s particularly objectionable to see this kind of tax expenditure by the government taking place when it has dragged its feet in so many other ways, and used the call of restraint in order to justify it.
I’ve talked about the distortion of priorities represented by the fact that in a year when grants to municipalities, as the Treasurer said last night, are up by 12 per cent or something less than that, when the spending on government programs in many cases is below nine per cent of an increase, when the new Minister of Community and Social Services, the bleeding heart radical from Kingston, came in and very quickly found himself pared down by the cabinet and was able to give only an eight per cent increase in social assistance benefits for people who are handicapped, disabled or legitimately in need --
Mr. Acting Speaker: Order, please. Would the hon. member return to the principle of this particular bill.
Mr. Cassidy: Yes, Mr. Speaker. I’m seeking to put in perspective the undue generosity which is being shown to the estates of dead people, compared with the way that this government deals with living people in the province at this time.
Mr. Makarchuk: That’s important.
Mr. Cassidy: When the Minister of Labour (B. Stephenson) has clearly been stared down by the right wingers in cabinet when she tried to get --
Mr. Acting Speaker: Order, please. I would ask you to come back to the principle of the bill.
Mr. Cassidy: This is the principle of the bill, Mr. Speaker.
Mr. Acting Speaker: This Chair does not agree. Will you return to the principle of the bill?
Mr. Cassidy: By all means, Mr. Speaker. I accept your authority in these matters.
Mr. Breithaupt: This is leadership, you know.
Hon. Mr. Handleman: The campaign is on.
Mr. Cassidy: When the government fails to move in all of those areas -- I was going to mention the minimum wage but I won’t mention any more in view of what you say -- but then turns around and gives a 100 per cent increase in the exemption level on estate duties, well, that’s pretty ridiculous, it really is pretty ridiculous. This is a tax expenditure which should be contrasted with other areas where the government chose not to expend taxpayers’ money. It gave substantial benefit to dead taxpayers of great wealth and of great means.
I want to go back for a second to the budget that was given in 1975 by the present Treasurer. At that time he made pretty clear what was going to happen. The $150,000 allowance was increased to $250,000, The basic exemption for gift tax was raised from $2,000 to $5,000 and the overall exemption for gift tax was raised from $ 10,000 to $25,000.
With the most recent changes -- we will come to these later I guess -- the gift tax side, which is the loophole to avoid succession duty while you are living, has been increased in two years by fivefold from $2,000 to $10,000 a year for each individual and from $10,000 to $50,000 overall. That is another loophole created in order to permit people to avoid a legitimate tax on wealth at death, and we are very upset about it.
What is also worth recalling is -- like the curate’s egg, not everything that the Treasurer does is all bad -- in that particular budget of two years ago there was for the first time recognition of the particular problems of small family businesses and of the family farm. The forgiveness period on estate duty for family farms had been 25 years -- a period which was unduly long. A couple of unexpected deaths between generations and we could find a grandson owning a farm and very seriously encumbered with estate duty liabilities which should not have been put on to that particular family farm situation. The period was reduced to 10 years, a length of time which we feel and felt at the time was unrealistic. The Treasurer knows this. I am not sure whether he made any speeches about this during the course of the campaign, but he might have reminded his leader that the New Democratic Party supported that special treatment for the family farm in giving farmers who were passing a farm from one generation to another the right to work off succession duty liabilities by simply keeping the farm in the family for a period of 10 years.
Hon. Mr. McKeough: Bully for you.
Mr. Cassidy: Okay. He might have said that during the course of the campaign.
Hon. Mr. McKeough: I am sure we did.
Mr. Cassidy: They certainly did not. The government representatives certainly did not. The Premier in particular went up and down the province misrepresenting the position of the NDP on the question of succession duty as it applied to farmers, and that was just all of a piece with the kind of campaign that the Conservative Party ran through the province on every issue.
I have one speech which the Premier gave. This was in St. Catharines to a PC nomination meeting. It is significant I think that that was one riding he couldn’t keep his hands on. He said that in order to protect the farming community and advance the preservation of agricultural farm land -- how they do wrap themselves in great principles -- there were specific measures to assist farmers. He talks about the small family farmer, and then he says: “We think, in response to the need to preserve the family farm, that it is fair to have raised the exemption for succession duties to $300,000 to take into account increased equity and increased value for farm lands and to encourage farmers to pass on those lands to their children.”
He went on to say: “The NDP on the one hand talks about preserving agricultural land and on the other hand says Ontario could be collecting an extra $100 million in succession duties if it weren’t so committed to giving further privileges to people with wealth when they die.” He called that an inconsistency in the NDP’s approach. The fact is that we had been utterly consistent when it comes to our approach to succession duties on farmers and it is the government which has been misleading and misrepresenting the position before the agricultural community of the province.
The increase in succession duties which is put here is a concession to the urban rich, to people the Treasurer and his party hope will continue to support the Conservative Party. It is not a concession to farmers because farmers are already protected. If they are legitimately in the business of farming, they are already protected because of the 10-year rule that allows them to work off all liabilities to succession duty whether their farm is worth $100,000, $300,000 or $1 million when they die.
We support that particular exemption. We do not support the misrepresentations made by the Treasurer and by the Premier. I think it is a real derogation in this Legislature for that kind of statement to be made.
If you read this year’s budget, Mr. Speaker, you can see the kind of line that the Treasurer is putting. God knows, he is inconsistent when he puts this position forward. He talks about the difficulty, because of Alberta getting out of the succession duty field because of their oil revenues, and mentions the fact that BC and Saskatchewan, the two neighbouring provinces, have been compelled to get out of the succession duty field.
Hon. Mr. McKeough: Not compelled.
Mr. Cassidy: They certainly have.
Hon. Mr. McKeough: Nobody ever compels the socialists.
Mr. Cassidy: It’s worth noting, though, that the major estates in Saskatchewan are family farms and -- we’ve said it; the NDP government of Saskatchewan says it as well -- it is legitimate for family farms to have an exemption from succession duty. That’s provided under the present law, and that is effectively what is being done with Saskatchewan’s move. But when they are right on the border with Alberta, when it’s only a 10-mile move for some people who might come under that temptation to move to Alberta, they are under a very difficult situation.
Hon. Mr. McKeough: You don’t know what you are talking about.
Mr. Cassidy: If Ontario had taken the position, however, of Allan Blakeney, the Premier of Saskatchewan, not only would we be preserving our succession duties in this province, we would be going back to the federal government and saying, “Look, you created an impossible situation for the provinces by backing out of the estate duty field seven or eight years ago. You created the possibility of jurisdictions competing against each, and that is precisely what is happening right now.”
Then the Treasurer and the Premier of Ontario would be sitting down at federal-provincial conferences, putting the heat on Pierre Trudeau and Donald MacDonald and the other people in the federal government, to ensure that by agreement we got a federal succession duty which could be distributed to the provinces in which that duty was collected. That was the approach of Saskatchewan when it took the uncomfortable step of getting out of succession duties, and it seems to me that Ontario should be taking that view as well. However, that’s not the position of this Treasurer; his view is that wealth should be exempt from taxes, whereas he has no compunction about taxing the little guy who is earning $10,000, $12,000 or $15,000 a year.
He says in the budget: “As a further move towards concentrating the burden of death taxes on large estates” -- that’s as euphemistic a statement as I have ever heard, because what he really means is alleviating the burden of death taxes -- “and to allow for the upward valuation in assets which occurs over time,” he proposes that the basic level for duty be increased from $250,000 to $300,000 effective on or after April 20, 1977.
It’s certainly interesting that it took a charter for Ontario for the government to make any kind of a promise about providing some protection for our senior citizens who are trying to hang on to their homes against the upward rise in costs. The property tax credit for senior citizens has not been changed for three years. There certainly has been no accommodation to the upward valuation of the cost of living when it comes to senior citizens on very limited incomes. There certainly has been nothing comparable to a $50,000 increase to compensate for the upward valuation of the cost of living in the guaranteed income scheme or the GAINS plan that the province of Ontario provides for people who are handicapped and for our aged.
When it comes to a situation about money passing to a relatively distant relative or to a relative who has already had time to establish him or herself and get their own income and their own career and their own position in life, the government says we’ve got to give these people an exemption which will give them an extra income of anywhere between $2,000 or $3,000 and as much as about $5,000 a year extra. But that is far more than this government ever saw fit to provide for people who receive the guaranteed income, who have no independent sources of capital and whose contribution to society is only recognized in the fact that they get the pension and a small amount of additional money from the Ontario government.
Not only that, but the government clearly says it wants to get out of succession duty entirely. It has taken the first step, as has been described by the member for Beaches-Woodbine, by eliminating what the government calls double taxation when it comes to deemed disposition on death for the purposes of the capital gains tax at the federal level.
We now have the anomalous position where, if an individual decides to liquidate his or her estate in their 70th year and put all the money into interest-bearing bonds or something like that, they will pay the capital gains tax and then pay succession duty on the entire amount of the estate if they happen to die a year or two later. Should they unfortunately die prior to making that arrangement, however, their beneficiaries will get much more favourable tax treatment than if they had lived. Now that is surely a very inconsistent kind of position.
I guess what the Treasurer is saying when he says that he’s going to phase out succession duties when the capital gains tax comes in is that he doesn’t see any other way of piling up estate except through capital gains. There is certainly an inclination there to indicate on his part that there is no legitimate way for people to pile up an estate and that the only way they seem to be able to do it is through illegitimate capital gains. I don’t know what he’s saying, but certainly we disagree with that particular approach as it is being put forward by the Treasurer.
I want to point out as well that all of the protestations of what an awful tax this is really are misleading. The Premier of Ontario wrapped himself up in the plight of widows and orphans who might be affected if the succession duty changes were not put forward, or who might be affected by policies of the New Democratic Party. The fact is that you can have an estate of $1 million, of $2 million, or of $10 million, Mr. Speaker, and if it’s given to a spouse, every penny of that estate is exempt from succession duties. There is, and there has been for the past five or six years, I think, no tax on transfers to spouses, no succession duty at all.
In other words, a $1-million estate, and that isn’t poverty, given to a wife doesn’t attract a nickel worth of tax. I’m taking that figure of a $1-million estate deliberately because if you get down to estates of $300,000 or $400,000 the amounts of tax are paltry and insignificant, no matter to whom the money is going. I think I checked it out that if you have a $500,000 estate, which is going to an adult son or daughter, that the net rate of tax is something like six or seven per cent overall on that particular estate.
If you get a $1-million estate and it goes to an adult child, the tax is $225,000. In other words, $780,000 or thereabouts can go. The tax rate is 22 per cent and that is a tax rate which is rather lower than the tax which is paid by an income earner, earning about $12,000 or $13,000 a year. This is on a $1-million estate.
Mr. Breithaupt: Income tax has already been paid on that as you have gone along.
Mr. Cassidy: That may not be. We don’t know where the money came from.
Mr. Breithaupt: Well, it didn’t grow on trees.
Mr. Cassidy: The point is that this is a wealth tax, it is a legitimate tax and the rate of tax is a very low tax. This is not on close relatives. This is on people who have been on their own for five, 10 or 20 years and, out of the blue, this money comes along. If it is a small business or a family farm special treatment is given, and we support it. If the money goes to a nephew, a niece, a grandnephew, a grandniece or some other collateral relative on a $1-million estate, the tax is all of $330,000, a 33 per cent rate, somewhat equivalent to the tax rate which is now charged on people earning $17,000 or $18,000 a year in this province. It is only if the estate goes to a complete stranger that the tax rates begin to be particularly substantial or important.
Not only that, but anybody who has $1 million in the kitty or tied up in assets or in a business or whatever or in stocks and bonds down on Bay Street clearly has access to high paid advice on how he can transfer that money between generations and attract the most limited amount of tax possible. There are many lawyers in this city who are making very substantial incomes providing exactly that kind of advice. I would have thought that maybe their incomes might even fall a bit because the loopholes have been made so big in this particular bill that you can drive a cart and four horses through them with no difficulty at all.
If somebody has a $1-million estate or anticipates a $1-million estate, then over the course of 13 or 14 years of prudent tax planning, without having to go into any kind of impossible dodges he can transfer every nickel of taxable estate out of his hands and into the hands of beneficiaries and there won’t be any tax levied at all. That’s how wide open the situation is now.
Mr. Breithaupt: All they have to do is live that long.
Hon. Mr. McKeough: And trust their relatives.
Mr. Cassidy: That’s how wide open the situation is right now, Mr. Speaker.
Hon. Mr. McKeough: It’s amazing how many don’t.
Mr. Cassidy: That’s true. Some don’t and that’s life. Mr. Speaker, I want to say in concluding -- and I say this to the Liberal Party, to the Liberal House leader and to the Liberal finance critic -- that there is a section in this bill which I think is very dangerous, and which I believe that the official opposition should carefully consider and that I hope they will agree with us not to permit to go forward. That’s section 5 of the bill. I think I’d better try and find a copy of the bill and read it into the record. This is the section of the bill which authorizes retroactive regulations to be made by the Lieutenant Governor in Council; in other words, by the cabinet.
In my opinion, the right to make retroactive --
Mr. Breithaupt: Section 6.
Mr. Cassidy: Section 6. Can a copy of that be sent down to me, please?
That effectively takes any control out of the Legislature’s hands entirely. As I understand that particular section, the government will be given power to make regulations which could benefit one or two specific beneficiaries. Therefore, Mr. Speaker, I’m suggesting that the government may be open to doing political favours at enormous cost to the Treasury and enormous cost to the integrity of public life in the province.
The explanatory note to section 6 says as follows:
“Section 6 -- subsection 1. This amendment adds to the regulation-making power of the Lieutenant Governor in Council those things prescribed by the Act to be done by regulation.” No problem there. “Provision is made for the form and manner of calculation to determine the credit against succession duty and the manner of election provided for in section 7a.” That’s the relief from the so-called double taxation. We don’t agree with it, but all the same it’s legitimate that that regulation power be added. “The regulations, if they so provide, will have retroactive effect. The provisions of section 6 are subject to passage of section 2 of this bill.”
Section 6(3) is even more explicit, and I draw that to the attention of the Liberal representatives in the House: “A regulation, if it so provides, is effective with reference to a period before it was filed.”
That, I think, is a very objectionable clause, Mr. Speaker. As I read it, that means that a regulation could be introduced and passed by the Lieutenant Governor in Council retroactive, not just to April 20, 1977, but retroactive to --
Hon. Mr. McKeough: That isn’t the intent.
Mr. Cassidy: I hope that the minister will speak to it. If the intent is to simply -- that isn’t the intent? Will the minister agree that he will adjust the amendment in that way?
Hon. Mr. McKeough: Yes.
Mr. Cassidy: Yes. In that case, I don’t need to go on. If it is the intent that the Treasurer will tend to this then that is acceptable to us, but I would be very unhappy about the fact that this business of retroactive regulations has crept into several bills which are under the Treasurer’s name or related to his budget and we will oppose it at every occasion. I thank the minister for his assurance, however, and will look forward to the bill to go into committee so that that change, if no other, can be made to it.
If I can repeat, Mr. Speaker, the Treasurer is opposed to any kind of a tax on wealth. We believe that a tax on wealth through the form of succession duty is a legitimate way of raising revenues in addition to taxes on current incomes and on profits. We believe that it’s wrong to have retired from this field, to have failed to exercise leadership, to have failed to put pressure on the federal government to bring back a succession duty which is uniform across Canada. We think that Ontario is the poorer, not only in dollar terms but also in terms of the equity of our tax system, because of the fact that people who are quarter-millionaires or demi-millionaires, or who have estates much larger than that, bear paltry amounts of tax, which are ever decreasing thanks to the Treasurer, while ordinary working people are being driven to the wall by the combination of income tax, sales tax, property taxes, and all of the other taxes that they have to pay.
Mr. Deputy Speaker: Are there any other members who wish to speak to Bill 7? If not, the hon. Treasurer.
Hon. Mr. McKeough: Mr. Speaker, very briefly, in respect to the remarks of the member for London Centre, speaking generally, I would simply say that it is our view, on this side of the House, that a tax on wealth in the form of succession duties still has a place and a role to play in a balanced tax system. We attempt to achieve that. We cannot, however, be unmindful of the competitive nature of a provincial tax system from province to province, and for that matter with respect to states in the union.
Mr. Cassidy: You are very sensitive to Michigan and New York, aren’t you?
Hon. Mr. McKeough: I think that in terms of a balanced system this tax, for the time being at any rate, has a place to play. How long we will be able to maintain that position -- for the reasons which were described by the member for London Centre -- is I suppose something which is debatable. I’m not surprised by the comments of either the member for Beaches-Woodbine or the member for Ottawa Centre. If I, as Treasurer, were opposed to any tax on wealth, and he has just indicated that I am, then I would do the obvious thing. I would do what Saskatchewan did and repeal succession duties. We have not done that in this province. The hon. member is talking sheer nonsense. He also talked sheer nonsense in his budget address, which he is still trying to squirm his way out of. He said, at that time, and I quote, in essence: “A party such as yours could get another $100 million out of succession duties, that’s how you would finance some of your reforms.”
I simply put on the record that if you take the succession duties of 1970, escalate them forward without any changes, you would come to about $150 million. Every reform that has been made in the succession duty area since 1970 has caused revenues. Every one of those reforms total, roughly on an escalated basis, about $100 million. You would undo every reform that has been done since we started in 1970 or 1971 reforming the succession duty legislation. Either that or you would, I suppose, leave the present Act in place and triple the rates. We reject that out of hand.
I think, at some point, the hon. member, instead of talking nonsense, should detail just how he would get another $100 million. Just where would it come from in the succession duty area? His bleatings about family farms are just a little bit hard to take. Does he know what a family farm is worth in this province? Has he any idea what he is talking about? How much support, by the way, did he get from farmers on June 9? That’s an interesting speculation.
I’m getting worked up, Mr. Speaker. I thank the members for their comments on this bill. I make it very clear that section 6 of the bill is there to allow -- and we are making a significant change, obviously -- for credit against the capital gains tax. The forms are being worked out. There was a change, obviously, from the previous bill. I’m not sure that the language is 100 per cent perfect even now, and that’s why we have allowed the Minister of Revenue the discretion which is there in section 6. But, certainly, the intention of subsection 3 is only retroactive to April 20, which was when the whole bill came forward. If the members wish, we can put that amendment in.
Mr. Deputy Speaker: Is it the pleasure of the House that the motion for second reading carry?
Mr. Cassidy: No.
Mr. Deputy Speaker: All those in favour of the bill will please say “aye”.
All those opposed will please say “nay”.
In my opinion the “ayes” have it.
Motion agreed to.
Hon. Mr. McKeough: Mr. Speaker, the 6th order.
Mr. Cassidy: Mr. Speaker, what are you ordering the bill for, please?
Hon. Mr. McKeough: I’m sorry; committee of the whole.
ONTARIO UNCONDITIONAL GRANTS AMENDMENT ACT
House in committee on Bill 6, An Act to amend The Ontario Unconditional Grants Act, 1975.
Mr. Acting Chairman: Are there any comments, questions or amendments with respect to section 1? Are there any comments or questions with respect to any other sections of the bill? If so, which section?
Mr. Cassidy: I think we may have been responsible for putting the bill into committee. We have had some consultations among ourselves though, and decided that the points we wish to make on the bill were made during the second reading debate; so we have no comments on the other sections of the bill.
Mr. Acting Chairman: Are there any other comments with respect to any section in Bill 6? If not, shall the bill be reported?
Bill 6 reported.
SUCCESSION DUTY AMENDMENT ACT
House in committee on Bill 7, An Act to amend The Succession Duty Act.
Mr. Acting Chairman: Are there any questions or comments with respect to any sections in Bill 7? If so, which sections?
Mr. Cassidy: Mr. Chairman, I don’t think it’s necessary --
Mr. Acting Chairman: On section 1?
Mr. Cassidy: Yes, on section 1 then. I don’t think it’s necessary to comment on specific sections. We voted against the bill as a whole. However, we would like an amendment to be made to section 6(3) which was referred to just now and I hope that the Treasurer can prepare it. If not, I will be happy to.
Hon. Mr. McKeough: Someone is drafting something for me now. If you will just wait one second. I am going to move an amendment then, Mr. Chairman, to section 6.
Sections 1 to 5, inclusive, agreed to.
Mr. Cassidy: While the Treasurer is receiving that, I wonder if he could explain the marginal note to section 6(1). It says in the third sentence: “The regulations if they so provide will have retroactive effect.” I don’t believe that’s true of regulations generally unless there is a specific provision to allow them to be retroactive. Am I correct in understanding, or in hoping, that the marginal note is in error when it refers in those terms to section 6 (1)?
Hon. Mr. McKeough: I assume that means only if it is authorized by this bill and by this section. The regulation can have a retroactive -- I am not a lawyer -- a regulation can have a retroactive effect if it is authorized by this bill. The suggested wording is that section 6(3) of the bill be deleted and the following subsection substituted therefor:
“A regulation made under subsection 2 or 3 may be made retroactively to a date not earlier than the 20th day of April, 1977.” Does that meet with your approval?
Mr. Acting Chairman: Any discussion?
Mr. Cassidy: Yes, Mr. Chairman, I am confused by that. “A regulation made under subsection 2 or 3” -- I presume subsections 2 and 3 of section 6 of the bill.
Hon. Mr. McKeough: Yes.
Mr. Cassidy: But subsection 3 that is referred to is in subsection 3. I think you have got the numbering wrong there. Maybe you mean a regulation made under subsections 1 or 2.
Hon. Mr. McKeough: No. It’s subsections 2 and 3 of the Act.
Mr. Cassidy: Could that be changed to say that, please?
Hon. Mr. McKeough: Yes.
Mr. Chairman: Is it agreed to include those words to read: “subsection 2 or 3 of the Act”? Any further comments?
Mr. Cassidy: I believe that’s acceptable to us. I’m sorry I can’t have a look at it, but I realize --
Hon. Mr. McKeough: My lawyers think it’s clear as it is. Does this make it unclear? Perhaps we might pass it this way and legislative counsel, when they look at it, may do something.
Mr. Cassidy: I think they have the right to make minor amendments of that kind. That’s fine.
Section 6, as amended, agreed to.
Sections 7 to 10, inclusive, agreed to.
One section 6:
Bill 7, as amended, reported.
On motion by Hon. Mr. McKeough, the committee of the whole House reported one bill with amendment and one bill without amendment.
The following bills were given third reading on motion:
Bill 5, An Act to amend The Income Tax Act.
Bill 8, An Act to authorize the Raising of Money on the Credit of the Consolidated Revenue Fund.
Bill 9, An Act respecting the Registration of Venture Investment Corporations.
TOBACCO TAX AMENDMENT ACT
Hon. Mr. McKeough moved third reading of Bill 10, An Act to amend The Tobacco Tax Act.
Mr. Cassidy: I want to make a couple of comments on the third reading of this bill, Mr. Speaker. My comments will be very brief.
I don’t want to go back too much into the principle of this bill. I just want to point out, though, as Hansard doesn’t record everything that happens in this House, that a very curious unspoken drama took place in the Legislature last night just before 10:30. These are the things that don’t normally get into Hansard; they are what people do or don’t do, and I thought the facts should be put on the record.
You will recall, Mr. Speaker, that during the course of the debate last night, the leader of the official opposition reiterated points that had been made during the course of the election campaign and reiterated his party’s commitment that no tax in the province should be increased by more than eight per cent, by more than the anti-inflation guideline. He was severely attacked, and I don’t want to go into that particular principle or debate again.
What is significant and was not recorded in Hansard is this: Despite repeated urgings by this party and by the government party, the Liberal Party refused to call a vote and were not prepared to stand up for their principles even to the point of dividing the House on The Tobacco Tax Act.
We had determined that as far as we were concerned this was a matter for the Liberals. If they wanted a vote that was up to them. We’ve indicated all along that we supported The Tobacco Tax Act. In fact, I’ve even suggested on a personal basis -- not a party position -- that maybe we should consider having an even greater increase in the tobacco tax. But the Liberal Party which had made this thing one of their three major campaign issues three days after we come back into the Legislature was not prepared to stand on their principles.
Mr. Deputy Speaker: Order.
Mr. Breithaupt: It had nothing to do with the bill. We were just trying to save you some time.
Mr. Deputy Speaker: Order, please.
Mr. Breithaupt: It had nothing to do with the bill. Hire a hall if you want to make a speech like that.
Mr. Deputy Speaker: Would the member for Ottawa Centre resume his seat? I felt that the hon. member for Ottawa Centre wished to refer to the bill before the House. At the moment I feel he is not stating any points particular to this bill. If he has anything further regarding the bill, I’d be glad to accept those comments.
Mr. Breithaupt: It’s just a point of view.
Mr. Cassidy: I am talking about the principle of the bill and I’m talking about the failure of the Liberal Party to stand on their principles.
Mr. S. Smith: Come on! You are making a bigger fool of yourself every day.
Mr. Nixon: Come on now.
Mr. Cassidy: It’s interesting that they did not take the step of sending the bill into committee either, in order to put an amendment on the committee stage about the specific tax and bring about what they felt was a reasonable level of tax.
Mr. Deputy Speaker: Order, please.
Mr. Cassidy: Those are the points I wanted to make, Mr. Speaker. Thank you for your attention.
Mr. Deputy Speaker: Order.
Mr. Cassidy: Why does the Liberal leader now sit?
Mr. S. Smith: Because it has nothing to do with the third reading of the bill.
Mr. Deputy Speaker: The Treasurer.
Hon. Mr. McKeough: On third reading of this bill, I would simply say that the member for Ottawa Centre was completely out of order. He repeated most of what I said last night and I was completely out of order last night.
Motion agreed to.
THIRD READINGS (CONTINUED)
Bill 6, An Act to amend The Ontario Unconditional Grants Act, 1975.
Bill 7, An Act to amend The Succession Duty Act.
ONTARIO YOUTH EMPLOYMENT ACT
Mr. Jones, on behalf of Hon. Mr. McKeough, moved second reading of Bill 11, An Act to provide Employment Opportunities for Youth in Ontario.
Mr. Speaker: Do you have any opening statement?
Mr. Jones: Yes, my opening statement will be brief. I don’t think we need remind the House of the background that brought about this bill and the program thereof. It was contained as part of several programs that the government initiated in its budget and outlined therein the nature of the program. Given the urgency which has been discussed and confirmed, I think it’s safe to say by all the parties in the House, the program has been going forward and with considerable success.
In short, for those members who may not have been here during the throne debate and during budget debate where it was touched upon, I would simply explain that it was an inducement for both the business community and the farming community of a $1 subsidy grant per hour for new jobs created for young people. As the Treasurer (Mr. McKeough) reported in his update of a couple of days ago to the House, we have somewhere in the order of 10,000 and better applications approved, creating some two jobs per application. We have tried to keep the administrative cost of the program to a minimum, working in concert with Manpower offices across the province. Young people are being found working in a whole host of programs, gaining very vital work experience, and training, disciplines, skills and contacts. We are very happy at this stage that the program has been well received by all sectors of employment in all parts of the province. We look forward to answering any questions members of the House may have at this time.
Mr. Peterson: I am happy to speak on this. We will support it, obviously. It is in place now and it has been stumbling along. Any other move at this point would be decidedly irresponsible. That is not to say by any stretch of the imagination that we would have created this kind of a program. We think in many respects it is a very superficial one. During the campaign, my leader talked at great length about the kind of programs we think are needed in this particular province, particularly at this time.
Mr. Cassidy: And they were pretty superficial too.
Mr. Cunningham: And you are an expert on that.
Mr. Peterson: You listen and you will learn something. We are very concerned about the numbers of young people coming onto the job market. The prospects are some 200,000 a year, approximately, over the next several years. These kind of short-term, make-work projects, in our judgement at least, don’t necessarily go to the fundamental problems or go to the root of the problems.
The only way out of the kinds of problems we are into today is a fundamental reassessment of the private sector’s role, and in particular the small business role and the small farmer and what they are doing in the economy. That is the area in which we would have put all our major emphasis and the major funds that have been allotted for job creation and work programs.
In May of this year there were some 134,000 unemployed young people between 15 and 24; that is about 12.9 per cent. Between 15 and 19, there were 57,000 unemployed, or 13.7 per cent. It is a very high number.
We understand the temptation that any government has in a crisis period -- and this is a crisis period -- to immediately go out and create some short-term job creation program and buy them off quickly; to do it with public works or to do it with an Experience ’77 program.
I am not criticizing all of those things. I am just saying they are an easy temptation to get problems off your back quickly. To a large measure some of the programs were ill-conceived. I understand my colleague from Huron-Bruce (Mr. Gaunt) will have an amendment to assist the program as it currently sits.
This program, as it is presently conceived, opens itself to abuse. There is no question all of us as individual members of Parliament are aware of specific examples of abuse of this program already. It opens itself to cheating. It opens itself to the situation where a farmer needs help and the farm across the road needs help. One will hire the other’s son and vice versa, and then they will go back and work for the other person. To the tune of some $40 a week or whatever they will get some kind of bonus for that kind of thing.
It also only affects, by definition, new jobs. That is a very difficult one to determine. That opens it again for a great amount of abuse in these kinds of situations. Frankly it doesn’t take care of some real problems where there are recurring kinds of jobs, since we had to operate under the haste the Treasurer did in these circumstances. Perhaps he had no other alternative than to draft this kind of a program, which as I said, we are going to support; but there is no question that it lays itself open for abuse.
The other problems, which we are aware of as individual members of Parliament here, concern cases where people who have permanent jobs, have been laid off and are being replaced by these temporary students. I don’t know how widespread that is. I know it is not in the Act, but I am saying these kinds of things, in our collective judgement and the judgement of some individual members of our caucus, are going on and we are not very happy about that.
I’m not saying that goes to the root of the bill. I’m not saying that it’s grounds for scrapping it. As a temporary, make-work, get-them-off-our-back program, it’s not bad. But in all of the jobs the government is talking about this year, all of the jobs they are talking about in terms of students -- some 45,000 -- all of them are temporary, 16-week, buy-them-off, get-rid-of-them-in-short-term programs. What we are going to end up with in the fall, when most of these jobs are finished, and next summer, on a recurring basis, is having to go back into the same kinds of programs perpetually. We really don’t think it’s the answer for a sensitive government, for a government that is committed to free enterprise as presumably they are across the street -- because I can assure you we are here.
It is the private sector that needs assistance. I can tell you this, you can cure unemployment tomorrow; just hire everybody onto the public payroll.
An hon. member: They could even hire you, Mike.
Mr. Peterson: But that isn’t the answer to the question. The answer is to stimulate the private sector.
To that end, my leader laid out a very comprehensive series of proposals during the campaign. We still think they are sound. We think they bear up to the scrutiny of time, and we think they are still operative. I must say we are very happy --
Mr. Cassidy: It’s bad enough that he believes that, David, but it’s worse if you do.
Mr. Peterson: -- with the reaction we had to those proposals during the campaign; not only from small businessmen, from farmers, but from observers of the scene saying this is the kind of program that we need. We know of lots of cases where a small businessman, with a little assistance, could hire somebody, not for 16 weeks but on a permanent basis. We know of lots of situations that are marginal, that can go one way or the other right now, that with a little help could start to assist on a highly decentralized basis, this serious unemployment problem that we are facing in this province. I say with some regret our prospects --
Mr. Cassidy: Why don’t you name a few of those situations?
Mr. Peterson: -- for the future look almost as grim as they are today.
Mr. McClellan: Elucidate.
Mr. Peterson: We don’t see any immediate relief for that kind of thing.
Do you chaps to my left here have a point?
Mr. S. Smith: On the top of their heads, they do.
Mr. Cassidy: Why don’t you elucidate, be specific?
An hon. member: How about $4 an hour?
Mr. Peterson: I just want to say that on one of the concerns we have, my colleague from Huron-Bruce will have an amendment dealing with how long the employer has to be in business previous to hiring someone under this program.
It is our belief, as a caucus, that there are some very worthwhile new ventures coming along, new farming operations, new business operations, that could use a hand in the short run. There is no reason we shouldn’t be able to use this program to assist more recent businesses than those that have just been here for a year, in spite of all the definitional problems. Let me assure you had it been our prerogative, we would have taken a very much different approach, no question about that. And we will continue to fight for that; we will continue to fight for long-term stability in the private sector, we will continue to fight for long-term job creation. We will use all of our policies, all of our tax policies, all of our manpower strategies and everything, to make sure that these jobs created are not just on a temporary, 16-week basis.
To me that is the principal mistake in philosophy that the government has made. Having got us into this situation as a temporary measure, we will support it. Anything else in my judgement at this particular time would be irresponsible. But let us not think that the very serious problems of unemployment, among young people particularly but among all sectors, are solved with these kinds of programs. If you see the figures go down a little bit in June, July, let that not give you any solace, don’t think the problem has been solved. We will be back at it in September and October and next May and next June. The thinking is far more superficial than a government should provide, with your kind of resources and your kind of people, to assist in the development of programs.
With those few words, Mr. Speaker, I will sit down and say that we will pass the bill with the amendment that my colleague will be introducing. Thank you.
Mr. Charlton: I have a few short comments to make about this bill on youth employment. We find ourselves very disappointed that this is the only bill the government has presented that purports to deal directly with the employment problem. It’s also rather questionable whether this bill does deal directly with the problem or not.
As the hon. member suggested, the temporary nature of the jobs created by the bill is not a satisfactory solution. But I think the problems and the loopholes in this bill go a little further than that. There is a distant possibility that this bill can create problems with permanent positions, jobs which have been temporarily vacated, whether through layoff or retirement or whatever the case. It may create a situation where these positions are not filled now, taking away the prospect of someone, unemployed for some period, having the immediate chance of a permanent job.
The temporary nature and approach of this bill also means that in cases where an employer had intended to create additional jobs for the summer period, that employer may use public funds which this government could be using in other areas to stimulate additional employment. That leaves a serious question about the effect of the bill.
As already mentioned, members have already heard stories about those people, mostly in the unorganized and minimum wage sector, who have been laid off, who have been replaced by students and youth -- at a subsidy, under the prospects of this bill -- and who have been told to come back at the end of September.
We understand the bill doesn’t intend that this should happen, but as I understand it the applications for grants under this bill do not very clearly lay out the requirements or detail the past employment record of that particular employer, whether he has or hasn’t laid off workers. It simply asks for a statement that he hasn’t. This in itself is going to set up a problem and a headache in trying to follow up complaints to the government to clearly determine whether violations have occurred.
It is also very questionable whether or not any of these temporary jobs created by this bill will become permanent. There have been all kinds of figures thrown around since the bill was first raised in the spring session -- anywhere from 25 per cent to 75 per cent. I have serious questions in my mind that any of these jobs will become permanent.
This bill does not deal effectively with the question of unemployment and employment. It doesn’t provide a permanent approach or a clear economic approach to the unemployment problem. It’s very clearly a stop-gap measure.
We wish very sincerely that the government, especially after the election and the electorate’s view, obviously, that the policies of the government were not wholly acceptable, had taken some greater initiative to provide some new employment programs in the province of Ontario, and we seriously feel that although this bill will probably create some jobs for a short term in the province it really avoids the issue of jobs.
Mr. Speaker: Does any other hon. member wish to speak to this bill? The hon. member for Fort William.
Mr. Peterson: Your first maiden speech.
Mr. Hennessy: The member for Hamilton Mountain mentioned that he’s not satisfied with the program put forward by the government and I think that, in all due respect, it’s creating needed jobs and it’s a lot better than what his party has recommended. They have recommended nothing, just a lot of criticism, which is very astute for them. They seem to be very aware that if you criticize, you may make some mileage. I think the concern of the youth is the concern of the members of this House, and I think it’s a worthwhile program. At least it’s a start. It goes in some direction. It’s a possibility that these people who are working part-time may be full-time employees in a while if they prove their ability at the place they are working. I, as a member of this government, support it 100 per cent.
Mr. Speaker: Do any other members wish to speak?
Mr. Peterson: They will rest much easier knowing they have your support.
Mr. Speaker: The member for Huron-Bruce.
Mr. Gaunt: Mr. Speaker, may I make a few brief comments with respect to the bill. I think in general terms my colleague from London Centre has put the case for our party with respect to Bill 11.
Insofar as a few of the details are concerned, we have had from constituents and others some complaints with respect to the matter of a business having to be in business for a period of a year before the business qualifies under the terms of this legislation. I see the point, I see the rationale, I know what the ministry is trying to do; they’re trying to avoid any business being set up solely for the purpose of taking advantage of the program, and I think the move to curb any abuses in that respect is commendable. I simply say to my friend from Mississauga North that if that were the case then I would certainly support him wholeheartedly. I think if a business is in business prior to the announcement of the program, then obviously the business is a legitimate one. The business being set up in the absence of any knowledge of this program should indicate to all and sundry that it wasn’t being set up to take advantage of any provisions under the terms of this legislation.
That being the case, I suggest to my friend that if the business were in business a month prior to the announcement of this program, it should qualify under the provisions of the program. Put another way, it simply means that if the business were operating on March 19, it should qualify.
I’m going to move an amendment to that effect when we come to committee of the whole House and I would appreciate it if the parliamentary assistant would give that matter some thought. I know what he’s trying to do and I know what the ministry is trying to do in curbing the abuses, but I simply put to the parliamentary assistant that if the business were going by March 19, and going on the basis that they had no knowledge of this program at all, I would suggest that it is a legitimate business and it wasn’t set up in any way, shape or form to take advantage of this particular program.
I put that point to the parliamentary assistant and I hope that he will give it some thought in the interim between now and next Monday.
Mr. Speaker: Will there be any other hon. members wishing to speak to this bill before the parliamentary assistant replies?
Mr. Cooke: Yes.
Mr. Speaker: Would the hon. member care to move the adjournment of the debate?
Mr. Cooke moved the adjournment of the debate.
Motion agreed to.
Hon. Mr. Welch: Mr. Speaker, before moving the adjournment of the House -- and I should have mentioned this at another point in our proceedings today -- there’s been an arrangement whereby we would call order number 23 on Monday in order to accommodate the Minister of Consumer and Commercial Relations (Mr. Handleman), who has to attend a conference. So first thing on Monday we’ll call 23 to get that out of the way, then we’ll go back and finish the debate on this item, Bill 11, and then carry on with the bill standing in the name of the Minister of Revenue (Mrs. Scrivener).
On motion by Hon. Mr. Welch, the House adjourned at 1 p.m.