31e législature, 1re session

L069 - Mon 5 Dec 1977 / Lun 5 déc 1977

The House met at 2 p.m.




Hon. Mr. Bennett: Mr. Speaker, I would like to review the present position of Ontario as it relates to the possible supply of pipe and supplies for the new gas line from Alaska and ultimately from Prudhoe Bay. The proposal submitted by Foothills Gas Pipeline Limited is one that has been accepted by Canada and the US and the terms and conditions are still being negotiated at the present time. As part of its original proposal, Foothills Gas Pipeline company suggested the use of a 48-inch diameter pipe with a wall thickness of 0.54 inch. Apparently, from their point of view, this size and type of pipe was preferred as it appears to present the fewest number of problems in installation. Pipe manufacturers in Canada, including Stelco, have the capacity and technology to supply this type of pipe.

As negotiations proceed between the US and Canada, the question has now been raised as to whether this size and pressure will have sufficient capacity to take care of the ultimate needs of the market. At present, two possible solutions are being discussed.

The first is to maintain the 48-inch diameter and increase the pressure, while the second is to increase the diameter to 54 inches and maintain the low pressure. The wall thickness of the steel for the high-pressure 48-inch pipe would have to be increased to three-quarter inch while the 54-inch low-pressure pipe will continue to use half-inch thick steel.

In Canada, Stelco has worked for some years on the metallurgical and rolling requirements of the steel plate needed for the three-quarter inch thick wall pipe and has developed this capability.

The second proposal, that of the 54-inch diameter low-pressure pipe, will evidently create no problems for Canadian manufacturers. Apparently Foothills Gas Pipeline would prefer this alternative if some change is to be made from its original plans to use low-pressure 48-inch pipe, since the problems of installation would not radically change.

At this point, let me outline the position of Stelco in this matter. I quote from the statement given to me by Mr. J. D. Allen, president of Stelco:

“Stelco is capable of producing pipe that will meet all of the specifications that are currently being explored for the proposed Alaska Highway pipeline. The company’s Stelform pipe mill in Welland is one of the most modern facilities of its type in the world and is capable of providing pipe in diameters ranging from 36 inches to 60 inches and with wall thickness of up to 1.125 inches.

“The three types of pipe currently being considered for the Alaska Highway line are: 48-inch, 0.54-inch thickness; 48-inch, 0.72-inch thickness; and 54-inch, 0.54-inch thickness. Stelco is therefore in a position to follow through on its offer to Foothills of 1.1 million tons of pipe over a three-year period for the projected line, irrespective of which of these three sizes is finally chosen. In addition, the company also has additional pipemaking facilities in Welland and in Camrose, Alberta, to permit it to supply pipe for the feeder and ancillary lines to the main pipeline.”

The whole matter of pipe specifications is now the subject of active negotiation between the US and Canada. It is my understanding from the Hon. Mr. Horner that the final Canadian decision rests with the National Energy Board. At the same time, senior officials of Foothills Gas Pipeline Limited have stated that the bulk of the procurement of supplies and equipment will come from Canadian sources, provided they are competitive and are capable of meeting the supply requirements.

Mr. Horner has assured me that the full interest of Ontario and Canadian manufacturers of the pipe and other supplies will be recognized. Because of past performance and participation as suppliers to gas pipeline construction projects in Canada, I would expect these companies will obtain their fair share of this market.

This project and other major contracts have been monitored by the committee within Mr. Horner’s department known as the Industrial Benefits Committee for Natural Resource Developments, on which our province and my ministry has direct representation.

It is in the interest of all concerned that a decision on the final pipe specifications be made as soon as possible so that construction can get under way by its original target date of 1979 and have a direct relation to the economy at this time.

I hope the review that I have made clears up some of the misunderstandings.

Mr. Lewis: It doesn’t, really. That did not answer the question at all.

Mr. Nixon: It makes a nice statement to send out to anybody who might be critical.

Mr. Makarchuk: Are you going to check to see who is going to build the compressors?



Mr. S. Smith: I’ll ask a question of the Minister of Energy. Is the minister now familiar with the evidence regarding uranium prices that was discussed in the hearings in the United States which make it very clear that Ontario Hydro was in fact a victim of this cartel arrangement? Can he now answer the question which I put to him some time ago, as to how much above world cartel price Hydro had to pay in order to obtain that uranium from Gulf Minerals, and what the impact has been in terms of the additional cost to be borne by energy consumers?

Hon. J. A. Taylor: I can give the Leader of the Opposition precisely the same information as I tried to give him some time ago in connection with the uranium pricing.

Mr. Nixon: Yes. That is you don’t know.

Mr. Peterson: Just answer the question.

Hon. J. A. Taylor: But the member creates some mythology and then starts to attack it and create another public impression. What he read in the newspapers was some documentation that apparently was given in evidence in regard to a lawsuit -- I believe in Santa Fe, New Mexico -- and I don’t accept a newspaper report on a particular piece of evidence as the be-all and end-all in connection with whether or not there was a cartel and the impact, if there was any, on uranium prices that Ontario Hydro had to pay.

Mr. McEwen: Let’s hear it from you.

Hon. J. A. Taylor: The Gulf Minerals contract -- and Gulf was mentioned -- was tabled by me in this House. It’s there. I would hope the Leader of the Opposition has taken that contract and has given it the study and the examination that he should. If he has, he will see that the delivery dates are for 1980. He will also see that the price under that contract, when delivered, will probably be about one-half of the going world price for uranium.

Mr. Breithaupt: By then?

Hon. J. A. Taylor: So the best information I have about the impact of a cartel on Hydro buying is that the world forces, the world market price, overtook any cartel price, so that was what was manifested in terms of the dealings with Ontario Hydro.

Mr. S. Smith: Supplementary: Accepting the fact that uranium prices by now are beyond the control of the cartel -- but in 1974 the story was different -- can the minister confirm whether or not he has discussed with Hydro the evidence that was presented in Santa Fe, New Mexico, which said that when Canadian producers learned that other cartel participants had temporarily dropped out of the market the Canadians jacked up the price by almost 50 per cent above levels set by the cartel, and that Ontario Hydro was the second organization in line to buy uranium under the higher pricing structure?

Normally, Mr. Speaker, I would certainly not believe anything said by a Conservative critic in Ottawa, but in this instance I think Mr. Sinclair Stevens has some credibility.

Hon. Mr. Davis: Is that a question or a statement?

Mr. S. Smith: The question was did the minister discuss with Hydro that particular matter?

Hon. J. A. Taylor: I’m sure Mr. Stevens would like support for his position regardless from whence it may come, and that’s fine if the member wants to join that particular position. But the fact remains --

An hon. member: Stevens was wrong.

Hon. J. A. Taylor: -- that in terms of the evidence he cannot, surely, accept the evidence of one party without accepting the evidence from the other party when he’s going to adjudicate on a matter. What the Leader of the Opposition did, was to take a newspaper report of a particular piece of evidence, some documentation, and adopted that as the factual situation. I’m not prepared to do that

Furthermore, as to whether or not I discussed this with Hydro, I can assure the Leader of the Opposition that I’ve been very mindful of the price of uranium for --

Mr. Peterson: The question is, did they speak to you?

Hon. J. A. Taylor: -- a number of reasons, unrelated, I may say, to the Gulf Mineral contract. Before that issue broke in this country I was pursuing the question of the cartel price and the impact that might have on pricing of uranium in Canada. Those discussions have involved, of course, the fuel purchasing people in Ontario Hydro, as well as other persons knowledgeable in the area.


Mr. S. Smith: I’ll ask a question of the Minster of Health, Mr. Speaker. Can the Minister of Health inform the House regarding the use of search and seize warrants by police forces to obtain entire medical and hospital files from public hospitals or provincial hospitals within the province of Ontario? Is he familiar with the existence of this practice and can he tell us how frequently this practice has been carried on since, let us say, 1970, and what the circumstances were?

Hon. Mr. Timbrell: That would require some considerable background investigation by my staff but if the hon. member wants it, I’ll see that it’s done. That’s an extensive period of time, of course, and we are dealing with many, many thousands of records in the approximately 250 public hospitals in the province.

Mr. S. Smith: By way of supplementary, can the minister inform the public of Ontario through this Legislature as to whether he is, first of all, familiar with the process whereby a police force can come and take any medical record it pleases out of a public hospital? Can he give us even some rough indication of whether he knows of incidents where this has occurred and whether he can tell us the kinds of documentation which they have been forced to provide the justices of the peace when obtaining such search and seize warrants? How specific does the information have to be?

Hon. Mr. Timbrell: There are many instances where this can and does happen, where there are search warrants granted to a police force to go into a hospital -- or to OHIP, for that matter. If the hon. member can be more specific, I can give him some case histories. Would he be interested in that? I could give him some indication of what’s been going on. This is certainly an area that Mr. Justice Krever will be looking at as part of his overall review of the confidentiality of such records.


Mr. S. Smith: By way of final supplementary, Mr. Speaker, the concern has to be that there be sufficiently specific demands made for information so as not in any way to invade confidentiality in an unwarranted manner. I am asking the minister whether he can give us some idea of the frequency of the occurrence and some idea of the specific nature of the information given to the justices of the peace when issuing these warrants. If he will seek to get this information for us I will await his answer at a future date.

Hon. Mr. Timbrell: Yes, but again if the member wants me to go back to 1970 it may take some time to pull it all together. But I will be glad to do that.

Mr. Lewis: If I may have one supplementary on that, Mr. Speaker. So far as the minister is aware, have warrants issued for the purpose of requisitioning such records, as I guess the legislation clearly allows, always been in pursuit of criminal proceedings? Or has there been any other reason adduced for the record?

Hon. Mr. Timbrell: Offhand, I am not sure, Mr. Speaker. A court order is a court order and once it is produced the administration don’t question it -- once it is a duly executed document and it is turned over.

Mr. Deans: May I ask a supplementary, related to the question that was asked by the Leader of the Opposition? Am I to understand that the information that I sought some two weeks ago and asked again about last week will not be produced because of the inquiry that has now been ordered? Will that information somehow be funnelled through the inquiry?

Hon. Mr. Timbrell: No. The answer to the member’s question is being prepared. It has taken some time, of course, because he referred to two specific years and we are having to review all the files for those years. I would hope to get the answer to him as soon as possible, but my staff have said it will take several weeks to do it properly.

Mr. Deans: Several weeks?

Mr. Lewis: How can it take that long? Only those files which were seized were talked about -- only those files that were removed. Sorry, Mr. Speaker.


Mr. Lewis: A question of the Premier: Two or three weeks ago I asked him about whether he might approach Falconbridge over new rumours that appear to be rife in the Sudbury basin about yet another layoff prospect. Did the Premier speak with the company? Can he report to the House?

Hon. Mr. Davis: Mr. Speaker, there is some information being prepared. I doubt I can have it here for this question period, but I will have it for the hon. member tomorrow.

Mr. Lewis: May I ask the Premier if he knew that Falconbridge had called in the union executive to meet with them on Thursday of this week and that there is exceeding anxiety about that particular meeting? Is it possible for the Premier to be able to tell us whether this is a meeting of reassurance or a meeting regarding a further layoff? Has the company checked with the government?

Hon. Mr. Davis: Mr. Speaker, I would prefer not to speculate on what the meeting may be about on Thursday. I will give the hon. member as much of the information that is available to me as I can, and I will endeavour to do that tomorrow.

Mr. Lewis: I will leave it for the moment.


Mr. Lewis: Mr. Speaker, may I come to the Minister of Labour? I take it because she is here she is in sufficient voice to answer questions.

May I ask the minister about this amazing piece of scientific data from the United States -- I asked the Minister of the Environment (Mr. Kerr) about it last week -- indicating that at one-tenth the level of acceptable, so-culled, threshold radiation to which workers in Canada and the United States are subject, a major study would appear to show a very significant increase in the number of cancer deaths due to low-level radiation? Is it likely that we can then change, for purposes of incorporation, the level permitted in our new occupational health bill?

Hon. B. Stephenson: Mr. Speaker, I would have to respond to the question by stating at the present time I do not have a copy of the study. It is, to my knowledge, not available generally because we have been attempting to get a copy of it. The newspaper report about the study stated specifically that two of the researchers who were involved were concerned that perhaps the report of the study was being suppressed and that it was difficult to get the information contained therein.

They did indeed express their concern that at levels -- and I don’t recall the actual figures that were stated -- considerably lower than those we usually construe to be reasonably normal levels of radiation for workers and for other individuals, there was an increase in the development of metaplastic disease. We are attempting right now to get the total study so we can examine it as carefully as it needs to be examined to do precisely the kinds of things which the hon. leader of the third party is suggesting.

Mr. Lewis: Supplementary: Perhaps the minister could keep us informed about getting the study. The study alleges that up to 40 per cent of the 670 deaths found from cancer were induced by low-level radiation at one-tenth of the levels we permit. Is it possible for members of the ministry staff to go directly down to see Dr. Thomas Mancuso in Pittsburgh and to review the evidence there with him, since this has tremendous implications for Eldorado, for nuclear plants and for any refining facility anywhere in the province of Ontario?

Hon. B. Stephenson: I would have to say again it is my understanding that at least two of the authors of the study allege this is so. I do not know whether the study does. That is precisely why we are trying to get the documentation in order to examine it carefully and to study its implications so that we can make the proper approaches.

Mr. Lewis: Can I ask the minister for a report to the House?

Hon. B. Stephenson: Yes.


Hon. B. Stephenson: Mr. Speaker, there were two questions asked of the Premier on Friday in my absence related to the layoffs at the Ford plant, one by the hon. Leader of the Opposition and the second by the hon. member for Hamilton East (Mr. Mackenzie). I have some information which has been collected directly from those responsible within the Ford plant, which I think does answer the questions which were put. The Leader of the Opposition asked whether the company had been in compliance with the Employment Standards Act, whether proper notice had been given and whether it was for reasons of production problems rather than lack of demand that the layoffs were requested.

It is my understanding that in the earlier part of 1977 the officials of Ford decided the maximum potential output of their assembly plant at Oakville could be increased rather dramatically if they were to produce two lines of vehicles on the same production line. So they began a program of producing both automobiles and Econoline vans.

It was projected at the time they drew up the proposal that they could be producing something in the order of 53 vehicles per hour. They began that process after hiring an extra 625 staff members at the end of July 1977. They discovered, as a result of problems on that production line, that actually their capacity was somewhat less than 53, and that what they could produce was about 48 units per hour. As a result of that change in the capacity of output there are approximately 300 workers who are at the present time superfluous in the production.

I am informed that there is no reduction in the market demand for the vehicles; that the layoff was caused specifically by the facility limitation rather than anything else, that 325 employees hired in July are still being employed and that the company requires all of the vehicles which can be produced during the overtime which has been worked.

I am informed there are two 10-hour shifts at the Ford plant. Apparently, that line is not the kind which can be run on a 24-hour basis and, therefore, it is necessary to have 10-hour shifts, and that the staff are on the line working an average of 48 hours per week. Overtime work is done with the agreement of the members of the staff or the employees, not against their will at all, but under the terms of the agreement which the company has with the UAW. I am further informed there are no staff employees in either repair, maintenance or on the line who have been working as much as 60 hours a week.

Mr. Deans: Would the minister discuss the matter further with employees’ representatives to determine whether or not the last statement she made about the concurrence of the union and the employees and the working of the 48-hour week is correct, given that the contract, as I understand it, says quite clearly that workers cannot be required to work in excess of 40 hours while others are on permanent or long-term layoff?

Hon. B. Stephenson: Mr. Speaker, I should be happy to do that. There is one important detail which I neglected to mention and that is the answer to the question posed by the hon. Leader of the Opposition about whether the Employment Standards Act has been complied with. It was complied with, totally, Mr. Speaker.

As I said, all of these individuals are of fewer than six months’ experience with the company and the company did comply totally with the Employment Standards Act.

In answer to the question posed by the hon. member for Wentworth, I shall be pleased to talk to the leadership of the union. But I am informed that, indeed, the overtime that has been worked was a result of the agreement between the employees and the management. I am not aware of that specific clause within that contract. But I shall check.

Mr. S. Smith: Supplementary with regard to the notice: Could the minister perhaps correct me on this. Is it not necessary, Mr. Speaker, for notice required to terminate the employment of 50 or more employees in any period of four weeks or less to be given according to certain regulations? And is the regulation not that a person employed for less than three months shall not be entitled to notice under subsection 2 of section 40? This is regulation 251 of the Employment Standards Act.

Is it not a fact that it is only if you have been employed for three months or less that you don’t have to have this appropriate notice?

Hon. B. Stephenson: Mr. Speaker, it depends as well on the total number of individuals employed within the plant and the percentage of those individuals to be laid off. And, as a matter of fact, the percentage of individuals to be laid off at the Ford plant is slightly less than six per cent of the total number of people employed, not 10 per cent.

Mr. Lewis: A very cute way of getting around the Act.

Mr. Speaker: A final supplementary.

Mr. Deans: Isn’t it time we got to the heart of the problem? Isn’t it time that the government came to grips with the difficulties of having certain employees working overtime while others are being laid off, and to set out a clear and definite policy in the province of Ontario during this period of high unemployment with plant closings occurring every day and layoffs happening everywhere in the province? There should not be overtime being worked while people are being laid off.

Hon. B. Stephenson: Mr. Speaker, that is most certainly an interesting suggestion which we have considered in various areas. But I am informed very clearly by those in charge of the production line at the Ford plant that it would not matter whether the employees were working overtime or not. They could not employ extra people because the facility is such that it precludes the hiring of extra people to produce those vehicles on that line. The capacity of the line is the problem and it was obviously a mistake in estimating the capability of that facility to employ that number of people.

Mr. Mackenzie: A final supplementary, Mr. Speaker: I am wondering if, in talking to the union members, the minister would ascertain how many of the total number of the 6,000 employees in the Ford Oakville plant are working the 48 hours and how many are working in excess of 48 hours?

Hon. B. Stephenson: Mr. Speaker, it is my understanding that the total employment at the Oakville assembly plant is approximately 4,000 employees, not 6,000 employees. And I will be very happy to try to find out the percentage working overtime.


Mrs. Campbell: My question is to the Minister of Community and Social Services. In view of the fact that an unnamed newspaper reporter has discovered a one-inch-thick file kept on all media contacts with the Ministry of Community and Social Services, would the minister tell us if such a file is kept on all contacts with opposition parties and their staff and would he make it freely available to us as it was to the reporter by his acting director of information?

Hon. Mr. Norton: Mr. Speaker, if I heard the hon. member correctly, she said a one-inch-thick file. My impression is that it may be substantially thicker than that.

Mrs. Campbell: I thought it would be.

Hon. Mr. Norton: I am not sure whether this is a practice that is unique within my ministry or not.

Mr. Warner: Every ministry.

Mr. Lewis: I got their approval.

Hon. Mr. Norton: But it is a practice which was introduced some time ago, as I understand it, by the communications branch so they might be in a position to know when there were contacts from the media with the ministry which would require follow-up on their part. I would be happy to give the honourable member a copy of the form. I may even have one here with me today which I can send across to her. It indicates that there is a portion to be checked off so that the communications branch knows when further follow-up of information is requested by the contact person in the media. There is nothing subversive about the practice.

Mr. Lewis: Oh, yes there is.

Hon. Mr. Norton: One might well ask why a communications branch of a ministry would not ask for that kind of information so that it could be on top of the requests that are coming in and be prepared to provide the necessary follow-up. I think the impression that might have been created in the news story is really quite inaccurate in so far as it’s suggested that there was any reason other than --

Mr. Conway: Is it another perversion of the truth?

Hon. Mr. Norton: Well, it is, but I won’t use that expression.

Mr. Speaker: In the interest of saving time, the question was: Will you make them available?

Hon. Mr. Norton: Well, I think the hon. member asked if there were any files on opposition contacts and would I make those available. To my knowledge, there are none on opposition contacts.

Mr. Lewis: Well, why not? What’s wrong with our people?

Mr. Reid: Are they not as important as reporters?

Hon. Mr. Norton: If it will make the hon. member more happy with the situation, I can ask the communications people in the ministry if they’d like to consider it.

Mrs. Campbell: Supplementary, Mr. Speaker -- and this is not my supplementary question, but it strikes me as being rather strange that almost everything that the press reports about this ministry is in error. Couldn’t the minister clean up that act?

Mr. Speaker: Is that your question?

Mrs. Campbell: No, I said it wasn’t, Mr. Speaker.

Has the minister then not made a new mandate for his communications branch to prepare files on all information from possibly critical sources? If so, does this minister consider this requirement to be in accordance with the branch’s purpose to “provide accurate, complete and helpful information on the services of the ministry,” as cited in the minister’s estimates briefing material?

Hon. Mr. Norton: If the hon. member is aware of situations in which the communications branch of my ministry has not been co-operative in providing her information --

Mrs. Campbell: Exactly.

Hon. Mr. Norton: I presume that’s what she’s referring to, in being critical of sources of information. I would like her to let me know, because certainly it’s not common that we receive that criticism. I know we have received it from the hon. member before. If there’s anything I can do to facilitate the flow of information to her, I’d be happy to do it.

I’ve forgotten what the first part of her supplementary was. I know I wanted to respond to it at the time, but I will take a look.

Mrs. Campbell: Mr. Speaker, I would like the opportunity of refreshing the minister’s mind. I asked him if there was a new mandate from him to his communications branch to prepare files on all information from possibly critical sources, and if this does not, in effect, breach the stated objectives of that branch?

Hon. Mr. Norton: Mr. Speaker, I don’t think that requires any new mandate. As far as I am concerned, that is the mandate of my communications branch at the present time.


Mr. Deans: Mr. Speaker, I have a question for the Minister of Labour: Will the Minister of Labour review the circumstances surrounding the injury which occurred to a young man at Harleck Industries in Caledonia, in which he injured his hand rather severely and could well have lost it in an industrial accident, and review the whole incident in the light of a statement made by --

Mr. Speaker: There’s far too much noise in the chamber. Will you keep your private conversations down please?

Mr. Deans: Thank you.

Would the minister review it, in the light of a statement made by Charles Peirson, who was on the Haldimand regional council, that the Ministry of Labour had been informed three years ago and had again been informed in February 1977 of the unsafe working conditions at that plant? It appears that even at the time of the accident there still had been unsafe working conditions in the plant end that young man may well be permanently disabled as a result of the Ministry of Labour not having enforced the labour standards properly.

Hon. B. Stephenson: Mr. Speaker, although I would find it very difficult to believe that if instructions or directions had been issued they had not been followed up by the ministry staff, I shall most certainly investigate it and report to this House.


Mr. Wiseman: Mr. Speaker, I have a question of the Treasurer. Is the Treasurer or his staff giving serious consideration to treating eastern Ontario the same as northern Ontario regarding fees for car licence plates --

Mr. Breithaupt: I thought that was all done in caucus.

Mr. Wiseman: -- in view of the fact that gasoline in eastern Ontario, and particularly in Lanark, is as high as any place I’ve travelled to in the north with the exception of Hearst?

Mr. Breithaupt: That is what the election was all about.

Mr. Riddell: Gasoline’s cheaper in the north than it is in the south.

Mr. S. Smith: We need a Minister of Eastern Affairs.

Mr. Speaker: Will the members from southern Ontario please be quiet?

Hon. Mr. McKeough: I’m a little surprised the Speaker didn’t rule this question out of order. But inasmuch as he didn’t I would have to say to my friend who has asked whether we are giving this matter consideration that the answer is no.

Mr. Conway: That is the Tory way of thinking. Give eastern Ontario no consideration. You have nothing new today, Darcy.

Hon. Mr. McKeough: The decision of the government with respect to motor vehicle licence fees in the north was not taken simply in respect of gasoline prices --

Mr. Nixon: You were buying votes.

Hon. Mr. McKeough: The hon. member knows nothing about the north.

Mr. Nixon: But they didn’t stay bought.


Hon. Mr. McKeough: Do you know anything over there about northern Ontario? Do you know anything at all?

Mr. Speaker: Just ignore the interjections. The question was by the member for Lanark.

Mr. Eakins: Tell us about Parry Sound.

Mr. S. Smith: The Treasurer is from north Chatham.

Mr. Speaker: Order, please. The original question was by the member for Lanark and the minister is getting a supplementary from the hon. member for Renfrew South.

Mr. Yakabuski: Mr. Speaker, I have a supplementary: In view of the fact that the wage rates in the areas of Timmins, the Sudbury basin -- and we’re taking into consideration the layoffs too -- are far, far higher than those paid in eastern Ontario -- with the exception of some of the federal civil servants or, perhaps --

Mr. Nixon: They should build another Hydro dam in your back yard.

Mr. Speaker: What does that have to do with the original question? Would the member try to enlighten us, please?

Mr. Yakabuski: -- the people who work for AECL in Deep River, the wage rates in eastern Ontario are below those of Timmins and Sudbury. In view of that, I think that the hon. Treasurer should give serious consideration to the request.

Mr. Speaker: That’s not a question, that’s an opinion.

Hon. Mr. McKeough: Mr. Speaker, you’re quite correct. That was not a question, it was an opinion. But I detected at the end a hit of an uplift and the points made by both of my friends are good.

Mr. Nixon: There are just you and Lorne in western Ontario. Lorne is doing a better job than you are.

Hon. Mr. McKeough: You haven’t got anybody from eastern Ontario either, have you? You really haven’t. Of all the bankrupt parties you’re it.


Hon. Mr. McKeough: Of all the bankrupt parties they take the cake right over there.


Mr. Breithaupt: How many are from the north?

Hon. Mr. McKeough: I’ll tell you, there are a lot more from southwestern Ontario after the member for Hamilton West came into the campaign than there were before.

Mr. Speaker: Does the Treasurer have an answer?

Hon. Mr. McKeough: Yes, Mr. Speaker. The question was will I take this into consideration --

Mr. Reid: The answer is no.

Hon. Mr. McKeough: -- and I certainly will.

Mr. Eakins: Mr. Speaker, I’m sure the people of Haliburton will appreciate any reconsideration from the Treasurer. I’m sure they are on par with Parry Sound.

Mr. Nixon: He will arrange to send out cheques before the next election.


Mr. Eakins: I have a question of the Minister of Culture and Recreation. In view of the ministry’s continued funding of some $80,000 to the Ogoki wilderness lodge and the minister’s comments that he is generally pleased with the project -- and we too would like to see it get underway -- would he explain why a management study is being conducted into the project’s operation and which firm has been hired to do it?

Hon. Mr. Welch: I am very glad the member asked that question. I have the answer here some place.

Mr. Conway: Did the minister bring the Minaki file by mistake?

Hon. Mr. Welch: The White Water Wilderness Lodge, which is the correct name of the development, is one whose background of construction the Minister of Agriculture and Food (Mr. W. Newman) has explained. The Indian community secretariat has provided some funds to assist in the startup costs with respect to the operation and has retained, I think, Dunwoody and Company to do a management study for the very obvious reasons that we wanted some advice on the basis of their review as to how we could be helpful in assisting the native people in that location with respect to the assumption of management responsibilities there.

Mr. Kerrio: Is he an uncle to the director?

Mr. Eakins: Supplementary: Is the objective of the study to explore the project’s contribution to tourism or is it confined to the business management of the lodge? Will the minister table the terms of reference?

Hon. Mr. Welch: It’s the latter; it’s the business of management. I will be very glad to take a look at the specific terms of reference we gave to the consulting firm and advise the member after I have reviewed them as to whether all of this information can be tabled at this time.


Mr. Mackenzie: To the Minister of Labour: I am wondering if the Minister of Labour could tell us what kind of advance notice she’s had of the unfortunate notice that went out this morning to employees of Shepherd Boats Limited in both Smithville and Niagara-on-the-Lake, where I understand the entire plant is being shut down and the entire force, including office and management, is being let go by February 5, and whether she has anything to report to the House on the situation in that plant.

Hon. B. Stephenson: We were informed by telephone this morning that those facilities would be closed by March 6, not February 5. That complies with the Employment Standards Act as 16 weeks’ notice has been given.

Mr. Mackenzie: Supplementary: In fact, 80 per cent will be gone by February 5. There are a few staying until March 6. Inasmuch as the expertise is there and since this is another company recently taken over by Whittaker Corporation in the States, I am wondering whether or not the minister would be prepared to help or offer assistance to keep the operation going with the employees in that particular plant?

Hon. B. Stephenson: The Ministry of Labour has been involved in a number of situations in attempts to keep plants open by helping the Ministry of Industry and Tourism search for alternative employers and other mechanisms which might be utilized. We would most certainly be interested in fulfilling that role.


Mr. Reed: My question is for the Minister of Energy. Based on last week’s statement by the minister calling for a meaningful consultation between federal and provincial governments concerning their respective roles in energy policy-making, is the minister now prepared to make a statement of government policy in this area, especially as it concerns the federally-proposed nuclear control hoard?

Mr. Bolan: He doesn’t know that.

Hon. J. A. Taylor: I would have to ask the member for Halton-Burlington to really specify his concern.

Mr Peterson: Take it as notice.

Hon. J. A. Taylor: I would be delighted to explain the concerns I have had as Minister of Energy in connection with the ongoing relationship with the federal government and our involvement in energy matters. I don’t know that that’s appropriate in terms of an answer to a question at this time. It would take some time. I would be delighted to discuss it. If the member could particularize the specific concern he has, then I would be delighted to answer that.


Mr. Reed: By way of supplementary: The question was simply is the minister now prepared, since he has called for meaningful consultation and knows that the areas of responsibility have certain grey aspects to them and need to be delineated -- I believe that’s what he means, that’s the way I interpret what he has said -- is he now prepared to formulate and make a public statement concerning what he considers to be provincial responsibility?

By way of explanation, one of the concerns, of course, is the whole nuclear question as it relates to the Environmental Assessment Act. We would like a statement as to whether the provincial government is going to put this totally in the hands of the federal government and simply negate the Environmental Assessment Act in Ontario; or does the minister consider it provincial jurisdiction and provincial responsibility?

Hon. J. A. Taylor: If the matter pertains to jurisdiction under the new nuclear control Act, which was introduced in the House of Commons last week I believe, I will be happy to make a statement on that. I have been in touch with Ottawa; our respective staffs have been involved in terms of the contents of that particular piece of legislation and I have expressed some of my concerns to the federal minister.

There are many areas in which I think it is important to get involved in terms of cooperative or collaborative planning because of the mixed jurisdiction. As the member knows, in energy matters the basic resources are provincial. We fried to make this clear -- and I think we did -- at the federal-provincial energy ministers’ conference last week.

I feel that there is, hopefully, a growing recognition that that impacts in many ways. The hon. member has mentioned the whole question of nuclear power and the expansion of that in terms of heavy water plants, which are basically chemical operations. One also gets into the whole field of management of nuclear fuel, whether it’s storage, disposal or reprocessing. Those are all areas where I may say I have my views in connection with what our respective roles and responsibilities are.

If we get into programs such as the CHIP program on installation, as I indicated last week it is a matter of taking into consideration what provincial involvement should be, not only in terms of eligibility but in terms of administration of that program. As I mentioned last week, I think it should be adaptable in terms of varying geography within the different regions in Ontario.

Mr. Speaker: Perhaps the hon. minister could write the member a letter.

Hon. J. A. Taylor: There are a whole gamut of areas on which I would be happy to make public statements if members so wish.

Mr. S. Smith: I have a supplementary. It really takes a brave person --


Mr. S. Smith: It just happens to be a vital issue; unfortunately, it’s vital. Can I ask the minister a question?

Mr. Speaker: If it draws a short answer.

Mr. S. Smith: Would the minister consider making a public statement simply saying that the nuclear control board, now proposed federally, ought to be a federal-provincial one? Does he not recognize that that board is going to hold hearings into each nuclear waste situation, and then the province will be in the position of either duplicating those hearings or simply abrogating an area of provincial responsibility to the feds? Why doesn’t he demand that it be a federal-provincial nuclear control board?

Hon. J. A. Taylor: Again I would be happy to make public statements on these various issues and direct an answer to the question.

Mr. Bolan: Demand it.


Mr. Wildman: In the absence of the Minister of Natural Resources (Mr. F. S. Miller), I would like to direct a question to the Provincial Secretary for Resources Development in his role with regard to native rights. I would ask him if he could report to the House on the results of the meeting between Natural Resources officials and the Union of Ontario Indians on Thursday last regarding hunting and fishing rights; the preparation of guidelines for native hunting rights and the administration of the federal Fisheries Act by the province?

Hon. Mr. Brunelle: Mr. Speaker, at that same time the staff of Natural Resources was meeting with the staff of Treaty No. 9; Mr. Rickard and some of the chiefs met with the Minister of Natural Resources and myself in my office. I did not attend the meeting of the staff; I’d be pleased to try to get a report and to get in touch with the hon. member.

Mr. Wildman: Supplementary: I’d just like to clarify that I’m discussing the Union of Ontario Indians rather than Treaty No. 9. I would appreciate it, if the minister is going to provide us with the information, if he could indicate whether or not the province has approached the federal government to try to bring about amendments to the federal Fisheries Act?

Hon. Mr. Brunelle: I would be pleased to include that.


Mr. G. Taylor: A question to the Minister of Correctional Services: In view of the fact that there was more than abnormal activity in the recreational period at the Barrie jail this past weekend, would the minister consider closing that jail now that it is in excess of 100 years of age?

Hon. Mr. Drea: No, Mr. Speaker. The Barrie jail, while it is old can be made to serve the area for a few more years. What the hon. member is talking about occurred last Wednesday night. For reasons best known to an inmate, a fire was started in number one corridor of the Barrie jail. Subsequently, because it couldn’t be determined as to just which inmate had started the fire, cigarettes, matches and other inflammables were removed from everyone in that corridor until the pyromaniac could be detected.

On Thursday night, in a peculiar manner, the inmates of corridors two, three and four served us with demands about corridor one. The “peculiar manner” was that they ripped out toilets, they ripped out basins, they destroyed television sets, they ripped out radio speakers and they smashed the windows.

Mr. Reid: They were trying to tell you something.

Hon. Mr. Drea: Mr. Speaker, one of the arguments that has been brought forward about the Barrie jail is that it is overcrowded. On the particular evening, it was overcrowded by just one person. I point out that the dormitory section and the female section were not involved in the damage, which was around $10,000.

As a short-term relief to the Barrie jail -- which incidentally not only has to serve Simcoe county but also holds prisoners from the upper end of Dufferin county, particularly the Collingwood area because it is easier for the police to transport people there than farther south -- we are investigating the possibilities and the potential of a portable type of institution being developed in the United States --

Mr. Bolan: That’s a chain gang.

Hon. Mr. Drea: -- which can be erected in one of the exercise yards not now in use.

The Ministry of Government Services has been advised that we consider expansion -- which, to be quite accurate about it, is the construction of a new jail for Simcoe county -- to be the number one priority of the ministry. I’m sure that if my friend the hon. Minister of Government Services (Mr. McCague) can find the capital, that work will commence in the near future.

Mr. Breithaupt: I’m sure he can find it for Dufferin-Simcoe.

Hon. Mr. Drea: No, I closed his jail.


Mr. McGuigan: My question is to the Minister of Health. Is the minister aware of, and is he investigating, allegations in the London Free Press this morning, in which it is alleged that certain elderly people are being cared for in an unlicensed home and that their friends and doctor have been denied visiting privileges? The address of this home is RR 2, Chatham.

Hon. Mr. Timbrell: Yes, Mr. Speaker, I’m aware of it. I understand that the police investigated and decided -- if the reports I have had are accurate -- that there are insufficient grounds to continue the investigation; but there is some additional information to come to me, and when I have that I’ll report back.


Mr. Makarchuk: I have a question for the Minister of Education. Could the minister indicate what reply he is going to give to the residence counsellors of the W. Ross Macdonald School, who wrote to him stating that because of cutbacks certain programs have been eliminated, and also that a dangerous situation exists in that school?

Hon. Mr. Wells: I will be glad, Mr. Speaker, to give my friend a copy of the letter which I wrote to them. I believe I signed it a week or so ago.

Mr. Makarchuk: Supplementary, Mr. Speaker: Is the minister aware of the fact that at the recent fire drill that was held in the school the staff, because of the cutbacks, was unable to get the students out?

Hon. Mr. Wells: No, Mr. Speaker, I am not aware of that, and I would think :that if it had been a serious problem it would have been drawn to my attention. I think it is quite fair to say that in the process of trimming our budget, as of course we are doing, and as we expect a lot of other people in this province to do in order to bring spending within the constraint limits that we have, there have to be some tough decisions made; but there will be no decisions made or actions taken that would jeopardize the safety, health or well-being of students in any of our schools.

Mr. Makarchuk: Supplementary: From the tone of the response, “There are none so blind as them that won’t see.” However, the staff have indicated to the minister -- or the management of the school at least was aware of the fact -- that during the drill they were unable to evacuate the school -- and this was a practice drill -- because of lack of staff. What I want to know is, what does the minister intend to do about it?

Hon. Mr. Wells: The first thing I intend to do, Mr. Speaker, is to verify the facts the hon. member has brought to my attention. Then I will make a report back to him.


Mr. O’Neil: Mr. Speaker, I have a question of the Minister of the Environment. I wonder if the minister could bring us up to date on the radon gas problem in the Bancroft area?

Hon. Mr. Kerr: Mr. Speaker, the situation in Bancroft is somewhat similar to Elliot Lake where there is radiation or a radon problem in some of the homes.

Mr. Martel: The Ministry of Housing gave them the go ahead to build.

Hon. Mr. Kerr: It also exists, I believe, in some new houses. We are meeting with Housing people, as well as the federal government which represents some of the mortgage people, with the idea of taking corrective measures in those homes to see if they are safe to stay in.

A form of ventilation can solve the problem, at least temporarily. There is a question of monitoring to see that the levels remain low, in the event that people stay in their homes. This is a study that is going on between my ministry and the Ministry of Housing, as well as our resource development committee so that some plan of action can be undertaken.

Mr. O’Neil: A supplementary, Mr. Speaker: I wonder if the minister could tell the Legislature whether building permits have been restricted or the issuing of building permits has been stopped in the village of Bancroft because of this study; and if so when they may be resumed?

Hon. Mr. Kerr: Yes, I understand building permits have been stopped in respect of new housing in that area where there are suspected high radon readings.

Mr. O’Neil: A final part to my question: Could the minister tell us when this study will be finished so that people will be able to obtain building permits if they are on safe land?

Hon. Mr. Kerr: I believe it will be sometime about the middle of January; there may be a hearing there.


Mr. Warner: Mr. Speaker, I have a question of the Minister of Health. Does the minister believe that the residents of a nursing home should fight it out with the mice for occupancy, or that residents should suffer the indignity of lining up in an open corridor for examination by a podiatrist? When will the minister correct the above situations which exist at St. Raphael’s Nursing Home in Scarborough?

Hon. Mr. Timbrell: Mr. Speaker, I have a four-page report on St. Raphael, which I asked for about 10 days ago when I first got word in my office that there was a problem. If the member would like I can read the entire report into the record; or I can send it to him as an indication --

An hon. member: Why doesn’t the minister table it?

Hon. Mr. Timbrell: -- of the action that has been taken. Inspectors have commented on a number of areas, about six in total. Corrective action is underway in a number of these areas, including explanations of the problems with the podiatrist and with mice and so forth; that is already underway. I’ll send it to the member.

[3: 00]

Mr. Warner: Supplementary, Mr. Speaker: I would like to know, first of all, if that is an inspector’s report; and if so will the minister table it? If the minister is ready to table it, then perhaps he will table the inspection reports which apply to other nursing homes which I and my colleagues have raised in the past. Further, how many more horror stories must I and my colleagues bring to the minister before he agrees to have a full inquiry into the nursing homes in Ontario?

Hon. Mr. Timbrell: As I told the member in estimates committee I will send, to any member concerned about any particular nursing home, copies of memoranda sent to me by the staff as a result of any inquiry. I will send the member a copy of this memorandum, which details the extent of the investigation and what has been done about it.


Mr. McKessock: I have a question of the Minister of Agriculture and Food. In view of the fact there are a lot of dairy farmers who still can’t get on the dairy herd improvement plan -- the reason being that the Minister of Agriculture and Fond won’t supply sufficient supervisors to run that plan -- could the minister give me an estimate of the approximate time at which this program might be able to continue and take up the slack for those farmers who still can’t get on the plan?

Hon. W. Newman: The dairy herd improvement program has worked extremely well in the province of Ontario. We discussed this in estimates. I don’t know how many farmers the member has in his particular area who are not on the dairy herd improvement program and would like to be on it, but as he knows we have to have certain numbers of farmers on a program before we can put a field man into it.

We are expanding; we are taking on a few more than there were before, because of the constraints. If the member has any particular problem involving a small number of farmers -- there may be one or two or three -- then there’s going to be a problem, but if he has around 30 farmers who want to come on the dairy herd improvement program he should let us know.

Mr. McKessock: Supplementary: I have about 30 who would like to get on. Is the minister saying that if I present him with 30 names a supervisor will be made available?

Hon. W. Newman: I’m saying that if the member will send me a list of the 30, we will be glad to look into it and see what we can do to accommodate them.


Mr. Bounsall: A question of the Minister of Colleges and Universities, Mr. Speaker: Since the rumours have been rather widespread for a few weeks now that power linemen will finally be certified in the province of Ontario, when might we expect that confirmation from the minister?

In that same connection, there has been the odd rumour -- not as widespread as the fact that there will be certification -- that the Ministry of Colleges and Universities will be taking over the Hydro training facilities to accommodate that certification; is this correct?

Hon. Mr. Parrott: May I confirm that we will be having a program of voluntary certification of linemen. There are a good number of details yet to be worked out on how that will occur. We will need, first of all, an advisory committee and I can tell the member today there will be 10 on that advisory committee; which only serves to illustrate my point that there are many details to work out. We will solicit, and hopefully receive very soon, nominees from various component parts of the industry for those positions.

Once we have all of the details in place, a regulation will be put through under our ministry and it will become operative. However, until those things are done, other than to confirm that it will occur I obviously can’t give all of the details until they are in place.

Mr. Bounsall: Supplementary: To return to the second part of the question, is one of the considerations for this program that the Ministry of Colleges and Universities will take over and operate the heretofore Hydro-owned training facilities?

Hon. Mr. Parrott: Yes; I’m sorry I didn’t answer that part of the question, Mr. Speaker. I would not like to use the words “take over.” I think that is overstating the case, but there is no doubt that we will be working with their training school.

There will be some modifications; though I suspect not too many because we feel that much of what has gone on in that school is very valuable and we are not about to throw it all out.

There will be a new arrangement, if you will, with respect to funding; and that is part of the apprenticeship program, as the member knows, we have been supporting very heavily and consistently. So there will be new funding arrangements, yes; but to throw out all of the good parts of that program I think would be a mistake, we hope to work with them and improve it.


Mr. S. Smith: A question of the Attorney General: I may just be a little bit suspicious by nature, but in the letter from the RCMP it says, “Finally, at no time has the force in Ontario sought or obtained medical files from OHIP, nor has it used such medical files for the purposes of blackmail or disruption.”

Given that earlier in the paragraph they refer to “confidential OHIP records” rather than “medical files,” and given that there is a distinction between enrolment files and claim files and various other things and medical files, can the Attorney General assure us that the RCMP has used no OHIP data whatsoever, or any kind -- not just OHIP medical files, but no data of any kind for purposes of blackmail or disruption?

Hon. Mr. McMurtry: Mr. Speaker, that is the assurance I have been given by the RCMP.

Mr. S. Smith: Which one? What I just said or what you said?

Hon. Mr. McMurtry: What the member said.

Mr. S. Smith: No data of any kind?

Hon. Mr. McMurtry: That no data from OHIP has been used for any such purpose.

Mr. Speaker, while I am on my feet, I feel constrained to suggest that I was hoping I might be asked a question through which I could somehow incorporate the name “Stravinsky” in the answer. Those members who have read that very fine article in the Globe and Mail this morning by Mr. Mosher will note that the member for Lakeshore was commenting upon the fact he had never heard the name “Stravinsky” in the Legislature. I just thought I would rectify this regrettable situation.

Mr. Speaker: The time for oral questions has expired.

Mr. Lewis: Stravinsky fiddles while this place burns.

Hon. B. Stephenson: Stravinsky never fiddled.


Mr. Peterson: It has come to my attention, Mr. Speaker, that CBC news on more than one occasion over the weekend had a news story about the hon. Minister of Health, and my picture was shown.

An hon. member: They were trying to dress it up a bit.

Hon. Mr. Grossman: Don’t knock it; you will never come closer.

Mr. Peterson: I find this deplorable. In fairness, I do wish him luck and hope it assists him with his leadership campaign, but I would ask that the hon. member send a new picture to CBC and inform them.

Hon. B. Stephenson: It didn’t do you much good.

Hon. Mr. Timbrell: Speaking to the point of order, privilege or whatever; I did, this morning, instruct my staff to contact the CBC, not to mention the CRTC, to register a complaint in that regard.


Mr. Kerrio: Mr. Speaker, I rise on a matter of personal privilege as well.

I did not think I should have to bring this matter to the Speaker’s attention, but now it has happened that about four times he has introduced me as the member for St. Catharines. I thought by way of one of the pages I might send this picture over to him, and probably the visual evidence might remind him where I stem from.

Hon. Mr. Rhodes: Is that the Buffalo sewer?

Mr. Speaker: I would like the hon. member for Niagara Falls to know that it is appreciated.



Hon. Mr. Welch moved that the estimates of the Provincial Secretary for Resources Development be withdrawn from the standing resources development committee and referred to the standing general government committee for consideration not to exceed five hours.

Motion agreed to.

Hon. Mr. Welch: By way of further notice, the standing committee on general government will take those estimates into consideration on Thursday afternoon of this week.


Mr. Wildman moved first reading of Bill 117, An Act to amend the Landlord and Tenant Act.

Motion agreed to,

Mr. Wildman: Mr. Speaker, the purpose of the bill is to provide a remedy to a person who has bought or leased a mobile home, which may or may not be situated in a mobile home park, and is unable to conclude a tenancy agreement with the person who owns the mobile home park. A landlord in these circumstances cannot arbitrarily or unreasonably refuse to make or renew a tenancy agreement, and where a question arises in respect to such a refusal, an application may be made to the county or district court for determination of the matter.


Mr. Wildman moved first reading of Bill 118, An Act to amend the Condominium Act.

Motion agreed to.

Hon. Mr. McKeough: You bring all this stuff in at the end of the session so we don’t have proper time to consider it.

An hon. member: And he said it with a straight face.

Hon. Mr. McKeough: No respect for the Legislature.

Mr. Conway: What about our licence plates, Darcy? Would you like a bill for that?

Hon. Mr. McKeough: They’re included.

Mr. Wildman: Mr. Speaker, for the information of members, this particular bill was introduced in the last session prior to the election and there has been plenty of time to consider it.

The bill amends the Condominium Act to enable mobile home parks to be registered as condominium projects. The bill also clarifies the existing law by stating that a designated unit can consist of vacant land. This bill thereby provides for flexibility in the development of mobile home condominium projects, by enabling a developer to choose between designating a mobile home park as a unit in itself, or alternatively designating a vacant lot as a unit upon which a mobile home may be placed.


Hon. Mr. Welch: Mr. Speaker, before the orders of the day, I wish to table the answer to question 48 standing on the Notice Paper.


House in committee of supply.


On vote 1402, commercial standards program; item 1, securities:

Mr. Chairman: Are there any comments on item 1 of vote 1402? The hon. member for Hamilton Centre.

Mr. Davison: Mr. Chairman, when we left off on Friday morning --

Mr. Chairman: Order, please. The minister said he had a comment regarding this vote. With the member’s permission?

Hon. Mr. Grossman: Just before we begin today, Mr. Chairman, I wanted to correct some information given by me on Friday afternoon to the member for Scarborough-Ellesmere (Mr. Warner). It was a question the member asked me at that time with regard to the aluminum inquiry. At the time I stated that to the best of my knowledge -- it was information that we tried to get to accommodate him as the discussion went on -- I reported that to the best of our knowledge Hydro was attending the aluminum wiring inquiry on a part-time basis and had not been cross-examining witnesses. I indicated at that time I didn’t know whether they had asked for the right to cross-examine or not, and if they had whether it had been granted.


Further inquiries we made Friday afternoon in order to get full and complete information for the member indicated that that information was incorrect.

Mr. Crane, the solicitor of the law firm of Coutts, Crane and Ingram had been attending all the inquiries on behalf of Ontario Hydro. The inquiry had accorded to him the right to cross-examine witnesses and he has been doing so since he was accorded that right.

I apologize for the information given at that time. In fairness, however, I know members who were here on Friday will be aware that the member for Scarborough-Ellesmere was still talking on the first vote in my estimates and had not waited until the appropriate point, the vote under which the aluminum inquiry properly comes up. Had we waited to provide any sort of answer until the proper vote, then we would have been able to have this information, as indeed I have it this afternoon; but in our haste to accommodate the member with information so that he could rest assured over the weekend we provided that other information.

Mr. Lewis: You are your father’s son.

Hon. Mr. Grossman: Thank you, sir.

Mr. Lewis: Boy, oh boy, I’m telling you, this nepotism corrupts on all fronts.

Hon. Mr. Grossman: It’s a great thing. You’ve done well by it, too.

Henceforth, perhaps we won’t be so anxious to accommodate the members, but we will continue to do the best we can under the circumstances.

I might also add, while I am on my feet, that the member for Rainy River (Mr. Reid) the member for the Liberal Labour Party, asked for some information with regard to a full list of promoters and underwriters of junior exploration companies. He suggested he had had some difficulties getting that information. I’m happy to report that that difficulty need no longer continue. I have that complete list for him, and should he return to the House this afternoon I shall send it over.

Hon. Mr. McKeough: He’s gone north.

Hon. Mr. Grossman: Should he not, I will send it over to the member for Renfrew North (Mr. Conway), who has been attending these estimates regularly, and he can forward it to him.

Mr. Davison: Thank you, Mr. Chairman; and our thanks to the minister for the corrections on the information involving the aluminum wiring inquiry.

Mr. Conway: Just pretend he is the Ombudsman.

Mr. Davison: In the absence of my colleague from Scarborough-Ellesmere, I could, perhaps, also remind the minister that it was not too much earlier in the debate we were suggesting that we should actually wait, not only for the proper vote under the estimates but until the commission had submitted its report and was in fact a fait accompli before we raised any questions with the minister in regards to what was happening at the inquiry.

When I left off on Friday afternoon, I was preparing to raise with the minister a question on Inco’s involvement and the Ontario Securities Commission’s involvement in the recent problems in the Sudbury basin. I’m sure the minister will recall my statements and those of other Sudbury-area members of the House in regards to the effect that the layoffs have had in relation to commitments that had been made by employees at Inco who were being laid off. We heard example after example of an employee who had gone to a mortgage company, or had gone to a loan company or bank and tried to get a loan. The people at the lending institutions said: “We’ve heard rumours of something happening at Inco and we’ll call the company before we give you a loan.” They then proceeded to call the company and the company said:

“Don’t worry, that person is working here and there’s no problem.” The person then made the commitment on a mortgage, car loan or whatever other consumer loan it was, only to find out a few weeks later he was going to be laid off.

We all share concern on this aspect, with a lesser or greater degree of feeling, but that’s not really what I wanted to raise with you; what I wanted to raise with you are comments that have come to my attention in regards to the reasons that Inco has given to the union and to people in the Sudbury basin as to why it was involved in that kind of duplicity with the workers. They have said that one of the reasons they were unable to tell the union about their future plans and the fact that these people to whom they had given a clean bill of health were going to be laid off, was that it would have contravened Ontario Securities Commission and US Securities and Exchange Commission regulations if they had disclosed that information privately.

I understand we have to have fairly strict regulation over securities trading. We don’t want to get into a situation where certain investors have inside information and are able to make a killing on the market. On the other hand, even more damaging is the kind of thing we saw in the Sudbury basin just recently. I would like to know the minister’s feelings on what he thinks of this reasoning on behalf of Inco, that they couldn’t tell the truth because they would contravene the regulations of the Ontario Securities Commission. Where does the minister draw the line between human decency in terms of corporate actions and playing, when it’s to their advantage, by the rules of the Ontario Securities Commission?

Mr. Conway: Quite literally an epic challenge.

Mr. Davison: Does the minister have a response or should I continue?

Mr. Reed: Mr. Chairman, point of order? I just wonder: Is the minister intending to reply to each of the speakers, or is he going to wait until each one has had their say?

Mr. Chairman: Generally, during the estimates, the minister replies to each member on the question.

Mr. Conway: I think he would like another question.

Hon. Mr. Grossman: It wouldn’t be accurate for me to report to the member that we have investigated that particular explanation given by INCO, except to the extent there appears to have been no inconsistency in terms of that answer. They appear to have complied in all cases with the time of disclosure policy of the TSE and OSC. In simple terms, we have no particular policy, I am informed, which may prohibit disclosure of the type of information which the member thinks may have been more helpful. Just so the record’s clear from some of the overtones of what you have said -- and it may not be clear -- in the case of Inco there is no evidence of any insider trading having gone on whatsoever in the circumstances. Other than that, I really can’t help the member very much.

Mr. Davison: I would like some help; and I am sure that people in Sudbury, and other people who might find themselves in similar situations, would like some help from the minister. It’s a fairly simple point. Inco has raised the Ontario Securities Commission as a major reason for their being unable to come clean with the workers. Therefore the workers were put in a situation where they now have huge debts and no jobs. I think that, in terms of human decency, is at the least an inappropriate action on the part of Inco.

I am not suggesting there was any insider trading. I am suggesting, probably, the opposite; that to meet the requirements of not allowing the possibility of insider trading what Inco did was shaft its own employees. If, as the minister seems to be indicating, Inco was acting to conform with the regulations of the Ontario Securities Commission, then what is he prepared to do to make sure that in future we don’t have any more cases of this?

We have seen Inco workers go out and get credit. The company assures the lender that in fact this person does have a job, that the loan will in fact be a good risk. Then a couple of weeks later, the company turns around and lays the person off. Now that’s the thing for which I am trying to find the solution. I would appreciate, and I am sure other people in the province would appreciate, some assistance from the minister.

Hon. Mr. Grossman: I want to reaffirm essentially what I said before. There is nothing in OSC policy which would prohibit them from making any sort of disclosure to any of the lending institutions that were calling. They may have made some other value judgement on their own with regard to what they wanted to say and when. My point is that this is just not a securities matter. There is nothing in the Securities Commission policy which put them under that sort of prohibition; it was a decision they made on their own. You can criticize Inco, perhaps quite properly; it is just not a Securities Commission matter.

Mr. Davison: I want to conclude this matter fairly quickly. The point is that Inco has said, “We didn’t tell you because we are prohibited from telling you that information privately under the regulations of the Ontario Securities Commission and the US Securities and Exchange Commission.” If you are suggesting that’s not true, that there are no such prohibitions in the Ontario Securities Commission regulations; then Inco is guilty, quite bluntly, of not being truthful with the credit institutions in Sudbury, its workers or the union.

If that is true and it has come to your attention, as it has come to your attention today, then could you not perhaps have a chat with Inco, clear up the matter and get it on the public record; so we don’t have companies pulling similar tricks with their workers, so that other workers won’t find themselves in the position of those people in the Sudbury basin who are now out of work but have huge debts hanging over their heads? Could you not do something that would stop this problem in the future?

Hon. Mr. Grossman: Again, in the absence of any particulars you can provide me which would, for example, say that Inco was using the OSG or its policies as a prohibition against releasing, or having released, some specific information at an earlier stage, I can only report to you the understanding from the Securities Commission that there appears to be nothing in their policies which would have prevented Inco from having made earlier disclosure than in fact they did.

Mr. Davison: If the minister or his staff took the trouble to read the Financial Post, October 29, 1977, they would find a story written by a Donald Rumball entitled “Union wants stockpiling,” which talks about some of the other solutions to the problem at Inco. There is a reference to Inco’s explaining to the union the situation with the Ontario Securities Commission.

I wonder if the minister could have his staff look up that article and then confirm or deny that Inco did that; because if Inco did this, as the article clearly states, it has done something which is morally quite reprehensible. If it is a problem we can stop from happening in the future simply by the minister making sure that companies are aware of this, it would perhaps behove the minister to do so.

I also wanted to draw to the minister’s attention an interesting article in the Globe and Mail of November 15, 1977, in which the following two paragraphs arise:

“New mining development projects in Ontario have all but dried up in the past 14 months as a result of the restrictive junior mine financing policies of the Ontario Securities Commission, it was charged at an informal meeting of OSC spokesmen and developers. J. P. Sheridan, a Toronto-based promoter and president of Shield Development Company Limited, noted that the only sizable underwritings in that period were by four companies undertaking ventures in foreign countries.”

I just wanted to draw that to the minister’s attention so he can inform his colleagues in his party that it is not simply the threat of socialist government in Ontario that’s harming the mining industry, but rather the effect, perhaps, of policies of his government.

The other point I would like the minister to clear up for me, and it’s beyond me how we should deal with it, is the whole matter of these letters I get -- as I assume other members of the House do -- from Malartic Hygrade Gold Mines. Frankly, Mr. Minister, I am quite worried about them. They raise what appear to me, as a layman, schooled neither in law nor securities, to be rather strong charges as to the workings of the Ontario Securities Commission. There is talk of people making false statements under oath and of resignations. There is talk of the commission placing an embargo on the company; charges of the commission practising a policy of censorship, making it illegal to trade in these shares; and accusations about members and former members of the commission and about ministers of the Crown.


It strikes me as a fairly serious matter with fairly serious charges, the substance of which I can make no judgement on from the material I get. I understand the minister has responded to the letters of the president of the company, J. S. Belton. Since the letters, and therefore the charges themselves, receive substantial coverage, at least among members and perhaps among the general public, I wonder if the minister might take the time during estimates, or if not simply take the time to submit letters to myself or other members of the House to let us know where the ministry stands on the issue and what response the minister has made to these charges by this corporation.

Hon. Mr. Grossman: First, dealing with the first subject raised by the member, policy 302, junior mining and so on, was discussed here the other night in some detail, Just to repeat, I think we’ve exchanged some thoughts with the member for Rainy River on some of the problems involved in the industry. Now that we have removed the threat of a socialist government in this province, it gives ns time to concentrate on some of the other problems that are of an inhibiting nature. Having got the major one out of the way, perhaps we’ll have some time for the others.

Mr. Lawlor: We are just gathering strength.

Hon. Mr. Grossman: Quite seriously, as we talked about the others, I must say The Securities Commission, as we see it, has received all sorts of input, and has taken very great care to receive input, not only from government generally but Natural Resources specifically, as well as from the prospectors, the people who are dealing with it on a frontline basis. It’s kind of a new policy, and that input is coming in. We’re fairly satisfied there is nothing in the rules which is having an overly restrictive effect upon the potential for developing the industry further.

I know the member will understand that the Securities Commission’s mandate is protection of the small investor; we don’t see that that is in any way in total opposition to a policy to encourage the type of mining development the member refers to. We think the Securities Commission has currently a pretty workable policy, which is not in itself restricting that development, but it’s continually under review.

With regard to Malartic, again we discussed this the other night, we went through this in some detail. I might say that Malartic, from our close analysis and re-analysis of the situation, was treated exactly the same as any other company in the same circumstance. Over a period of the past 10 years or so, under the policy that’s been in effect since that time, this is the only person who has taken such severe objection to the policies of the commission. There are dozens or perhaps hundreds of others who have been dealt with exactly the same. We do have a tenacious person here who is bitterly objecting to his treatment.

I want to confirm that everything I have seen, and that we have reviewed in the ministry with the commission, indicates they were treated no differently to anyone else in the same situation. They were treated under the same rules, regulations, policies and laws as everyone else. It does cause some concern when someone continues to write in, being very objectionable with regard to some of the people, some of the very good civil servants we have in the Securities Commission. That causes me some concern.

We have continued to review each communication as it arrives on our desk -- on all of our desks in the Assembly -- and we find nothing in this to amount to a substantiated objection or valid criticism with regard to any of the members of my very competent staff at the Securities Commission Each has been reviewed as it came in. The ministry cannot report to you at this time -- and, I might add, in the matter of Malartic not in the foreseeable future -- that any of the activities of its staff over the last few years has justifiably been the subject of the type of criticisms made by this one person affected by the commission’s consistent handling of his matter.

In simple terms, we have looked into the complaints. We find our staff is completely cleared; nothing in here can be substantiated, nothing, we feel, is justified. We have refuted it. The member may differ with us. I would report to the member that if he differs with the conclusions we have reached, he’d be faced with a fight by me, because we have looked into it and we are quite prepared to stand with our staff on that matter.

Mr. Davison: Far be it from me, Mr. Minister, to differ from you, nor of course to be put off by the possibility of a fight. As I said, I am in no position whatsoever to make any comment on the substance of the material. I just know nothing about it.

I appreciate the minister’s comments, but it might be more useful, in future when such letters receive such wide distribution as these did among members of the House -- I am assuming actually that correspondence has gone to every member of the Assembly -- that the minister consider making some sort of comment, perhaps by way of letter to the members of the Assembly, so that we may know the position of his ministry, rather than each member having to write on his own to get an individual response. When something so contentious as this arises, which arises so frequently, might we have from you a statement or a letter to help us?

I suspect estimates are a terribly inappropriate place to deal with this kind of thing anyway. My questions were not so much meant to be seen as supporting the charges of the company, but rather to get on public record, for the first time as far as I know, some response from the ministry. I appreciate very much the minister’s comments.

Finally, I would like a commitment, if I could get one from the minister, to look further into the matter of the Inco situation, to at least have his staff look up that article and perhaps at least inform Inco that there are no such prohibitions, so that if every corporation of size in the province doesn’t understand it, at least Inco understands and in the future won’t raise this as a defence for what seems daily to become a less and less defensible position on the part of the company.

Hon. Mr. Grossman: With regard to Inco, I do want to make the situation clear. The Securities Commission -- indeed all of my boards, commissions and agencies -- would be pretty busy if they communicated with every company that blames government or a particular agency for its failure to do something, or for its problems. For one thing, I would have my aluminum inquiry people pretty busy writing letters.

If you want to address the matter, or if one of the Inco people affected wants to speak with the commission on a specific, that would be fine; and you may also want to communicate with me. In fairness, I just do not want to get into a position where a precedent is established so that every time there is some criticism raised, or someone is saying it’s the ministry’s fault, we are going to start to reply. I would be a constant communicator with the editorial department of the Globe and Mail, for example. I just don’t want to get into that practice. My statement this afternoon in the House is free and open.

Finally, I will have the Securities Commission look at that article again. They inform me that they have, in fact, seen the article, but they will look at it again for me.

With regard to Malartic Hygrade again, the length and extent to which a complainant is prepared to be obnoxious about his complaints, or come to the border of libel, is not going to be a militating factor in getting me to send out communications to all members of this Assembly updating them on the latest 15 or 16 page letter we have received. I just don’t think that would be an appropriate use of the manpower in this ministry. Nor do I think that is the type of thing which will discourage people from going high-profile on complaints they have on the off chance that, maybe, they can stir up enough unrest in this Assembly, and enough disruption of my staff in continually replying to 15-page letters, as they arrive weekly or daily whatever the case may be, in order to assist their case.

We are prepared to stand on the record of the Securities Commission and the judgement they made in the Malartic Hygrade case, and any others of a similar nature.

To add to that, the Ombudsman now is dealing with this matter. Knowing the supreme confidence this House has in his administration and his efficacy, as indeed I have in his ability to make judgements in any event, I know the House will rest satisfied that the matter being with the Ombudsman members can hear back from the Ombudsman with regard to any of the specific complaints. I am concerned that the extent to which the particular letter writer here is prepared to be totally obnoxious in what he says should not be a militating factor, operating as a catalyst to get us to respond to these lengthy letters.

Malartic Hygrade did have the right to appeal to the courts from the decisions taken by the Securities Commission and chose not to do so. That may be of some interest to the member.

Mr. Reed: I am rising in the absence of our Consumer and Commercial Relations critic, who has experienced a death in the family and is unable to be here.

I would like to say a few words about the Securities Commission, since it involves an industry that has substantially declined in Ontario over the last few years. There are some areas that tend to blame, at least in part, the existence of the Securities Commission for their inability to fund mining ventures; however I understand that just recently, if my memory serves me correctly, you have indeed been cognizant of this problem of the junior investments and the Securities Commission has done something tangible in that regard. I wonder if the minister would be able to explain to the House just how the Securities Commission is treating the junior mining companies at present.

We all realize the importance of the Ontario Securities Commission; there is not one of us who wants to return to the days of the carpet-bagger, or what have you; but I do feel that a lot of our problems with OSC, and with venture capital and so on, are rooted in an attitude toward investment which tends to want to make investment in junior mining stock something of a secure venture.


It has been pointed out that the risk associated with investment in small stocks is very high, but at the same time it is considered to be a thousand times better on a mathematical or an actuarial basis than investment in Wintario. So I suppose it is all a matter of attitude whether we take a flyer on a moose pasture or whether we really feel that we are investing in something which is or should be solid. However, I do think that there is a reasonable line of understanding which has got to be followed. I often wonder whether we need a new attitude on the part of government, in order to encourage a new attitude on the part of potential investors in the mining industry in Ontario, because, Mr. Minister, we are indeed in a good deal of trouble. If the way things have been going in recent years continues, not only will the mining industry dry up in terms of employment, but what tends to happen is that the expertise in the back-up industries will go elsewhere in the world. That’s what they’re doing at the present time.

I’m sure the minister is aware that Canada, and specifically Toronto, has historically been the hub of geophysical research and mining exploration and that most of the advanced expertise regarding these new techniques for locating anomalies in the world, has been located right here in Ontario. However, because our own mining ministry has been so sluggish there has been quite a migration elsewhere in terms of personnel and brain power. There is money available for this kind of junior mining investment, Mr. Minister. It’s here in Ontario. I would like to know if, indeed the minister has relaxed his position on these matters in order to encourage more of this investment and in what way?

Hon. Mr. Grossman: As we were discussing the other night when the subject of policy 302 first came up, and quite legitimately so, the role of the commission doesn’t change from good times to bad times. It is always there to provide protection to the person who is going to invest in securities of whatever nature, and in doing so, to make sure that those people involved in the industry are not inhibited unnecessarily -- unnecessarily, I stress -- by whatever rules are developed.

Policy 302 was conceived and written after extensive public involvement. Everyone from the Ministry of Natural Resources right through to everyone in the industry bad ample opportunity, and did avail themselves of the opportunity, to have input into that policy. Even after it was brought in, in April 1976 I think it was, it has continued to be under continuous review.

I know the member will acknowledge that having come in in April 1976, policy 302 -- which is the subject matter of all this discussion -- could hardly have been said to have kicked off the downturn. It all started long before April 1976. I would be concerned to ensure at all times that none of our policies are so restrictive as to inhibit the bringing to life of that industry.

I think also some discussion may be appropriate in these estimates as to whether the role of the Securities Commission should be reviewed. I’m not suggesting that it should be, but I think you may want to address yourselves to the question of whether the Securities Commission -- which after all is there with a mandate to protect the person who’s buying the security or thinking about buying the security -- whether it should change to one of concern about stimulating growth in the securities field and in mining, if that might be appropriate from time to time.

It would seem to me that a good argument could be developed that it ought to remain with other sources. For example in the case of mines, it could remain with Natural Resources to look after mining policy and see that the appropriate conditions are there, be they tax or other conditions, which would encourage the exploration of mines. Then it would remain in the Ministry of Consumer and Commercial Relations to ensure that in the raising of capital for that development out there, there is protection for the small investor, particularly as he or she chooses to invest in that property that’s being developed as a result of whatever policies government may have, be they tax concessions or whatever.

Again, that is not currently the commission’s mandate. It is not a mandate to stimulate or encourage, but rather to provide protection without operating as a damper unnecessarily, unless it is a particular case where we may have to make a bit of a tradeoff. But, hopefully, the object of the exercise really should be to make sure there is no fraud occurring in the marketplace rather than ensuring no one is going to lose money. Of course, people are always going to lose money out there. We can’t ensure they’re not. That’s not what the commission is supposed to do. We’re supposed to make sure there are no frauds, no misleading information and that sort of thing.

It would seem to me full disclosure should not be an inhibition to the raising of capital in any way whatsoever. That’s the main thrust of all these policies, to ensure there’s full disclosure out there, there is nothing hidden and the information is truthful. Having said all that, I want to add there is no question of the state of the industry at the present time. I do, however, want to be fairly specific in saying I don’t think the industry is suddenly going to revitalize if the Securities Commission, all its rules, regulations and policies disappeared tomorrow morning. It just is not. I think it’s fair to say the policies of the commission should not unduly inhibit the bringing to life of the industry when the industry comes to life.

You may be interested in this. I was just informed that public financing in Ontario is currently at the rate of $4 billion per annum with junior mining having between $5 million and $6 million. So that sheds a bit of a perspective there so you should know the size of the problem when you are concerned about it.

Currently there is a study going on through the Ministry of Natural Resources. They funded a study. The figure, I think, is $60,000. It was done by some very reputable people in the industry. It’s called Natural Resources Incorporated. As a matter of fact, I had a chat with them just recently and they’re studying the whole problem to which the member referred. I think that study will be in some time next year. Yes, I’m right, in February or March of next year.

That will tell us a lot more about the problems that the industry is facing. Indeed if they have any comments with regard to 302 or any other policy of the Securities Commission, I want to assure the member we’ll be the first ones to look at it very carefully -- if my colleague, the Minister of Natural Resources (Mr. Bernier), hasn’t called me by that time to let me know. We’ll be dealing with those recommendations if, in fact, they have any comments on the OSC policy. We’ll make sure those recommendations are looked at and dealt with expeditiously.

Mr. Reed: Does OSC still comment on the viability of a particular property, as to whether in their opinion a particular mining property is a sound operation from the point of view of the amount of ore that is supposed to be in the ground, or may or may not be in the ground? At one time OSC did I know and it came under a great deal of criticism.

Hon. Mr. Grossman: Yes, that’s true. As a result of that criticism a system of ad hoc independent bodies was set up. Those decisions are now made by these ad hoc committees comprised of one of each of the following: A representative of the Prospectors and Developers Association, who chairs the committee; a representative of the professional mining engineers and a representative of the Ministry of Natural Resources. That independent three-member committee now does the Job formerly done by my Securities Commission.

Mr. Lawlor: I have two or three matters, Mr. Chairman. I would like to comment on the Malartic situation.

When I read this letter some time ago, I did question in my mind under precisely what kind of an authority Mr. Bray was operating. Is it within the ambit of his office to issue instructions to the Broker-Dealers Association rather than, for instance, if he feels there’s anything deeply wrong, to suspend trading or to do those things which are more directly under his control and which commendably on the occasions in question he does do? He seemed to proceed somewhat differently on this particular occasion. I would like to have some assurances on that head.

Hon. Mr. Grossman: So that you will know and identify the source and authenticity of my answer I want to tell you Mr. Bray assures me that the allegations you have made are false.

Mr. Lawlor: I don’t know what allegations I have made so far. I am getting around to allegations.

Mr. Reid: He is getting around to that.

Mr. Lawlor: I just asked a question whether the gentleman was acting within the scope of his powers under the Act.

Hon. Mr. Grossman: I was anticipating your supplementary. The answer to the first is yes.

Mr. Lawlor: Since it’s in the hands of the Ombudsman and since he reports to a committee on which I now sit, I shall abide its coming up.

What is the experience with the Securities Commission with respect to various types of tax shelter vehicles? Are there quite a number of approaches to his department or office in this regard? To his knowledge, are the practices under MVRBs and with respect to motion pictures and what not, in order to set up the kinds of trusts and other devices that have been used, fairly widespread? This is kind of difficult for him to answer, but is there any feeling in the department that a fair amount of this escapes their scrutiny?

Hon. Mr. Grossman: The interests that the member refers to are generally speaking securities, and the registration and prospectus requirements of the Act do apply to them. In fact the Securities Commission did anticipate there were some which were getting by and were not being caught. As a result, one week ago Friday, I am informed, a notice to the profession that is your profession and my profession and the others’, if any -- was published. As a result, some calls have come into the commission inquiring whether something or some particular enterprises do or do not fall within the Act. Those that do are being dealt with at the present time.

Mr. Lawlor: Have there been any points raised in the past as to the definition of securities as applicable to some of these fairly devious schemes, et cetera, which, if tested in the court, very well might fall outside the range of the definition? Have there been any challenges, in other words?


Hon. Mr. Grossman: I have before me and I’ll read it for the benefit of the member, “Notes with regard to a Supreme Court decision; Pacific Coast Coin Exchange matter.” This decision, released November 16, 1977, is an important decision, in terms of the securities legislation.

“By a majority of eight to one the court held that remedial legislation, such as the Securities Act, must be construed broadly and must be read in the context of the economic realities to which it is addressed. The Supreme Court was of the opinion that the legislation was not aimed solely at schemes that were actually fraudulent, but rather that it related to arrangements that did not permit customers to know exactly the value of the investment they were making.

“The court stated that it was clearly legislative policy to replace the harshness of caveat emptor in security-related transactions and that courts should seek to attain that goal, even if tests carefully formulated in prior cases proved ineffective and must continually be broadened in scope. The court stated: ‘It is the policy and not the subsequently formulated judicial tests that is decisive.’”

There was a dissenting judgement, not surprisingly Chief Justice Laski, who declined to enlarge the scope of statutory control in undefined areas. But the majority of the court clearly was of the expansionist nature, and I suppose, as an example of a live and developing legislative interpretation.

Mr. Lawlor: Was that judgement directed to commodities futures trading particularly under the Corn Exchanges, or was it restricted not to futures trading but extant trading?

Hon. Mr. Grossman: Not commodities per se. The full decision will be published in the December OSC bulletin, which the member will be getting.

Mr. Lawlor: We have had before us for quite a while a brand-new Securities Act, which I take it the minister is letting lie fallow in order to receive pertinent comments about it. I heard him say in this House the other day that he intended to bring that, together with two other pieces of legislation, here forward in the spring. Therefore, I don’t think we should on this particular occasion dwell too greatly on securities. We will have plenty of opportunity to scapple that when the time comes, and when there is somebody in the House who knows something about securities happens to be here, namely my colleague, Mr. Renwick.

But leaving little things aside -- I mean mere knowledge -- and I do want to mention Stravinsky while I am on my feet, although I don’t find him particularly pertinent to this debate. What provisions are you making with respect to the select committee on corporation law report touching takeovers, mergers and amalgamations? Have you made specific reference in your new legislation about corporations escaping criminal liability for their actions simply as the result of amalgamation? Has that been adequately provided for? That’s really two questions: What’s embodied in this new legislation arising out of the committee report; and the second one, having to do with the criminal liability.

Hon. Mr. Grossman: The report of the select committee was fully dealt with by the ministry when preparing the Securities Act, 1977, as it appears in Bill 30 on the order paper. I’m informed, although I obviously was not on that select committee, most of those matters dealt with by the select committee show up in the legislation -- some that haven’t been dealt with in other ways, with the exception of the private agreement provisions which you may recall from my statement in the House are under some review at the present time.

Once again, I’ll read you from my statement exactly what is under review: First, the closed system of registration and prospectus exemptions; second, the rules regarding the regulation of mutual funds; third, whether some modified version of the present private agreement exemption found in the takeover bid part of Bill 30 should be restored to the bill. We’re looking at those again, specifically, with the new chairman of the committee. We’ll deal with it as a package -- what’s in there now plus the review of the private agreement provisions of Bill 30, those recommendations of the select committee.

With regard to the amalgamation loophole referred to in the second part of your question, I’m informed that the courts have, in fact, closed the amalgamation loophole in a decision known as Black and Decker, the same people, I guess, re Black and Decker, Supreme Court of Canada. Perhaps I could arrange to have a copy of that decision sent over to the member.

Mr. Lawlor: I would very much like to see it. Wasn’t it also closed by the federal Corporations Act at a subsequent date to our report?

Hon. Mr. Grossman: I can’t tell you offhand, I’m sorry. I can’t tell you offhand. I don’t know. We’ll try to get that for you.

Mr. Lawlor: My feeling was that it was, that the feds covered the ground.

Hon. Mr. Grossman: Might have.

Mr. Lawlor: Okay.

Mr. Williams: Mr. Minister, I’ve been listening with interest to the discussion revolving around the specific Malartic situation. Reference has been made to ongoing correspondence I guess all members of the Legislature receive from the specific individual geologist who is continually critical of certain individuals and the commission as a whole.

I’m not going to dwell on those points. A number of the members in the Legislature have already raised questions with you and you have responded accordingly. I’d rather come back to the points being made in a more general fashion by the member for Halton-Burlington when he was talking about the general concern of one segment of the mining industry in particular, the junior mining companies as they’re so-called.

I must say, Mr. Minister, over a period of time I have had on more than one occasion discussions in various settings with people whose livelihood is dependent on the mining industry. They have been critical of the commission as being a quasi-legislative body that has been somewhat inhibiting in permitting them to develop to their full potential as mining corporations because of what they have alluded to as being overly stringent requirements, overly stringent procedures, overly stringent demands as to the amount of material that has to be filed with regard to qualifying to even get registered to offer securities to the public at large.

I hasten to say that unfortunately, all too often in these situations, they’ve been more passing discussions than discussions in detail, so I’m unable to cite chapter and verse to you the specific instances of alleged abuse of the over-bureaucracy, if you will, that they experience in this situation.

So I can’t give you specific examples. But as I say, on more than one occasion in speaking with people in entirely unrelated settings basically the same criticisms arise. It causes a certain amount of disquiet in my own mind as to whether there is some justification for reassessing the rules and regulations under which we govern the mining industry, which of course does have to be properly controlled to protect the investor public.

At the same time, it would be unfortunate if the rules and regulations as they have been promulgated and are in force were so restrictive as to inhibit a sector of our economy that I think is being lost sight of as being still a very large contributing factor to the economy of this province.

I think the large percentage of the population which lives in the southern climes of our province, representing 90 per cent of our population, has tended in recent years to lose sight of just how important a continuing factor the mining industry is to our economy, and the fact that a good 25 per cent to 30 per cent of our whole economy is very much dependent upon the well-being of our mining industries.

Mr. Reid: A lot of jobs in southern Ontario depend on it.

Mr. Williams: Indirectly very much so; indirectly a lot of jobs can be dependent upon the well-being of the mining industry. It is because of these concerns expressed to me that I ask you several questions, Mr. Minister.

Before I come to those, I just want to add one further rider. In each of these recent discussions the individuals I have spoken to, individually or collectively have acknowledged that part of their problems are the general economic conditions confronting the mining industry on a world-wide basis. The second reason for their current plight they state to be the mining tax legislation, primarily at the federal level but aggravated by that at the provincial level. While recognizing these as being two factors that seem to be giving theft industry concern, they specifically point out the over-zealous activities or controls of the commission as being a third very definite factor making it more difficult than necessary to let their industry reach its full capacity.

I think you almost invited in your comments that perhaps the time had come for a general review to be made of how an already generally effective commission could be made more efficient, to not only serve the general investing public but perhaps to, at the same time, make it less difficult for the mining industry to flourish in this province.

Mr. Lawlor: You keep on reading Mr. Honsberger’s letters, I’m sure.

Mr. Williams: I haven’t seen Mr. Honsberger’s correspondence for three or four months now as a matter of fact.

Mr. Lawlor: He’s been neglecting you.

Mr. Ziemba: Get you back on the list.

Mr. Williams: I did point out, as a matter of fact, that I was making reference to conversations with persons other than that particular correspondent who, I think, other members of the House have made more than enough reference to this afternoon already.


What I ask, Mr. Minister, after those long introductory remarks is: When was the last time that an overall review of the commission was made, other than burning down the procedures under 302? An overall review of a far-ranging nature would give us some insight into just how effective the commission has been in all quarters, not just as far as the share-purchasing public is concerned. And how does the Ontario Securities Commission procedures, guidelines and regulations compare with those of our sister provinces? I am not totally conversant with the comparisons that exist.

What essentially is the difference between our commission and the US securities commission in their dealings with the mining industry and in particular, the junior mining sector of the mining industry? I am not aware of these same types of concerns being expressed by people in this industry when dealing with these other commissions in these other jurisdictions. Is there a basically uniform system that prevails in these other neighbouring jurisdictions or do we have something different that makes it just that much more difficult to do business in Ontario as compared to the other jurisdictions? If so, is it done with justification or are we being too restrictive in the controls we impose in what we consider to be the interests of the public a large?

Perhaps, Mr. Minister, you would choose to comment on those matters before I raise further questions.

Mr. Lawlor: We are gentle as compared to SEC.

Hon. Mr. Grossman: First, the Securities Commission has not undergone a specific review of the nature spoken of by the member but rather a continuous review from within with regard to its procedures and when it gets to a specific policy development such as 302 referred to earlier. It is noteworthy that the commission has had an opportunity to be self-renewed in the sense that it has had a new chairman rather regularly over the past period of time. This will occur once again on January I when Mr. James Baillie, a very active and experienced Toronto securities lawyer, comes on board for several years as the new chairman. We look forward to Mr. Baillie looking at the procedures, as indeed his predecessor did, and affecting some changes in order to make sure that it continues to be a living and responsive body. Mr. Baillie, I might add, is a practising lawyer from downtown Toronto and will be in a position to bring to the commission, some of the perspective referred to by the member. Mr. Baillie has dealt with the commission for many years as an outsider and would understand some of the bureaucracy, if in fact there is any, to which the member refers. I am looking forward very much to receiving Mr. Baillie’s input and seeing what recommendations he may have with regard to changes in procedure.

With regard to the ongoing review, I should refer once again to the Natural Resources Incorporated study that is going on which will be reporting in February. It is a good example of how the Securities Commission has an opportunity to have its policies assessed from time to time. This one is being funded by the Ministry of Natural Resources and I look forward to seeing what they may say about the procedures of the Securities Commission.

The member asked some specific questions with regard to other jurisdictions. Our Act in Ontario is generally followed as the model for all of Canada. I am told that as a result the policies throughout Canada are basically uniform. They do follow our model and indeed several provinces are awaiting our new Act to make decisions as to where they are going. They have been following the progress of our new Act closely.

With regard to the Securities Exchange Commission in the United States, I am informed that the OSC is substantially less bureaucratic than the SEC. When stacked up against the other Canadian jurisdictions we are the same, our Act being the model substantially. With regard to the American experience the SEC rules are generally thought to be more restrictive and more bureaucratic.

I do want to assure the member that the OSC continually reviews its procedures, it has an eye on what is happening out there in the marketplace. It is particularly concerned with any suggestion that the commission may be restricting new development unnecessarily, or throwing up unnecessary bureaucracy. I can understand people in the industry reporting that complaint to him. It is not unique to the securities field. I can take him through many sections of my ministry and, he would see someone, or some group, in almost every industry is saying there is too much bureaucracy. Sometimes, however, they find they have specifics in telling us where some of the filings are not needed.

It may be the case, from time to time, that there is too much bureaucracy. I am the first one to be sensitive to that sort of allegation. As a result, I will be looking very much forward to Mr. Baillie coming on board so that he can begin to look at it and bring his perspective to the commission. I can assure the member that if there are any parts of the system and the filings and the registrations required by the Securities Commission that are not appropriate, or they are not serving a function any longer, they will be changed as quickly as possible.

Mr. Young: I am sure that the minister is aware that every member of this House is extremely anxious to see that money invested in the development of our mineral resources in Ontario is used for that purpose.

I am encouraged by his point of view. We all remember the days when it looked as if about 90 per cent of the money invested in junior mines went into the pockets of the promoters, rather than into the hole in the ground. I hope that day is past, so that people who are investing in the future of Canada in good faith are actually investing in the developing of this kind of thing.

I would like to turn the minister’s attention from the juniors this afternoon, to the seniors. As he knows, and as we are all aware, there are certain very large industrial empires in Canada, centred in large measure here and in Montreal, where a great deal of economic power is brought together and centred in these groups. I can use one as an illustration, where companies like Dominion Stores, Hollinger Mines Limited, Massey-Ferguson, Standard Broadcast, Crown Trust, Domtar and all their satellites are gathered together under the Argus empire. The control of these various companies is vested, to a large measure, in the Argus Corporation.

All these companies and all their satellites and all their ramifications are on the stock exchange and the investor has a chance there to see what their assets are, what their prospects are. So he openly invests in what he considers to be his future and the future of those companies and he is hoping that he is playing a part, not only in his own enrichment, but the enrichment of a nation.

But above and beyond that, in the case of Argus, for example, you have a company called Ravelston Corporation, which has over 60 per cent of the shares of Argus Corporation. The Ravelston Corporation is controlled -- owned actually -- by half a dozen of the most powerful and the most wealthy people in Canada. Peter Newman, in a footnote in his book The Canadian Establishment writes: “The Ravelston partners have first call on each other’s stock so that no outsider can get in. The no-raiding provision extends even beyond the grave. When another generation of owners comes along, should any combination of partners want to sell their Ravelston shares at a premium (because the prize at stake would be control of Argus), then the other partners are guaranteed an equally high price for their holdings.”

Could the minister tell the House what supervision there is for a corporation such as Ravelston, and, of course, the power group have the same sort of top-flight control in Gelco Enterprises. There may be others across the country.

Where I quarrel with this and where I want to know about it is that in the ordinary corporation, up as far as Argus, the shares are there to be bought and sold. We take our chances. But in Ravelston you have half a dozen rich, powerful men, who not only control that corporation but they control the whole economic process down through the subsidiary chain. They have a great deal to say about the value of shares; about the trading practices; about the kind of income which can be transferred from one company to another; and about whether one company shall do the hulk of business this year and another. And then, of course, they can determine what assets of this chain come up into Ravelston for distribution at that point among the very closed group.

This private club can make these decisions about the public companies, and yet the public has nothing to say. They can’t even get in and buy the shares of that corporation.

I wonder what control there is over an entity such as this one, where the whole structure of the economic life beneath it is at least affected. and affected very, very strongly?

Hon. Mr. Grossman: I think I followed the member’s remarks. In fact, I even read the book. Really, what he’s outlined for us is certainly not unique to the company in question, Ravelston is it? Or Argus or whatever. It’s a not-unheard of situation for a small group of people in fact, either directly or through another company, a private company -- I think Ravelston is a private company -- to own a large block of shares in a public company. Indeed they may own a small block of shares in a public company but that small block may be a controlling block in a large company. They exercise whatever power they may have, obviously, through the equity, the capital they’ve purchased in the company.

That, I would think, is a matter of public record. Disclosure is certainly the keynote of our legislation here in the province. The small shareholder knows who controls a company and the extent of that control. It’s there. A small shareholder may choose to buy or may choose not to buy on the basis of the control or potential control exercised by that handful of people. I don’t know what specifically the member is suggesting we ought to do. Is he suggesting we break up small control blocks or whatever?

You’ll note that in the new Securities Act some attention is paid to takeover bids where small shareholders are sometimes left behind. It’s precisely for that reason some new securities legislation is going to be introduced again and this time passed in the spring to deal with that specific problem. But I would think subject to that takeover situation, the small shareholder either does or should know the rules of the game when he gets into it. It’s a fact of life that there are some large, powerful corporations in a position to acquire control of companies -- hopefully for the better, sometimes for the worse.

If the member has some specific suggestions as to the violation he may suggest is occurring, or could occur, and what he would recommend, I’d be pleased to hear it.

Mr. Young: Mr. Chairman, I have no specific suggestions to make here except this. The small shareholder can’t get in here. There is no share on the market he can buy. But the power of this small group is almost infinite as far as the whole chain of public companies is concerned.


I can understand a family company such as Eaton’s, where the outsider, perhaps, has no right to have any great interest. But if I’m shareholder in one of the smaller companies -- say Dominion Stores, Domtar, or Massey -- and I know that at the top of the pyramid there is a group which can guarantee a very large proportion of what is made by the companies can be brought up into that final treasure -- and there is absolute certainty that they can bring massive amounts up there for distribution among themselves; that’s where their wealth primarily comes -- then I am concerned there be some public record of what they’re doing to the public companies in the chain down along the way.

Surely there is a right among the shareholders of these other companies to know how much of their assets are being siphoned off, and whether there is an undue amount going into the top echelon for distribution among the wealthy and the powerful, who hold a closed corporation at that point. It should somewhere be a matter of public record as to how much of those assets is being drawn up, and how much is being distributed to the people who hold the control.

Hon. Mr. Grossman: If the member will think about what Mr. Newman is writing, if that’s what he’s referring to, he’ll get this picture. If there is siphoning, whether it’s a company with one siphonor and a thousand siphonees, or the reverse, it’s an offence. There should be no siphoning, small amounts or not. There is no such thing as un undue amount of siphoning; either there is siphoning or there is not. However, the member is using siphoning in a pejorative context, and has some hint of fraud or misappropriation. Therefore there is no such thing as an undue amount. If it is going on it’s going on.

Mr. Young: It is an exercise of economic power, that’s it.

Hon. Mr. Grossman: It’s not unique to the company he’s talking about. For example, he’s talking about a situation where a small handful of people are controlling a company way up the line. The purchaser of a share of -- the example he gave was Dominion Stores -- doesn’t know how much money is being siphoned out of his interest up to the small powerful group.

Let’s establish a couple of things. First, the small powerful group he refers to is, in fact, a unit, an individual. It happens to be a private corporation. It’s the same as you, your colleagues, my colleagues, or anyone having their own private company. It’s no different in that sense that if the Eaton family happened to be there; it’s a private company.

This is a private company which happens to be a vehicle through which some very powerful, and maybe not so powerful people, have chosen to invest their money. That private company has made decisions. It could decide to buy land, it could decide to buy an airline. In this case it apparently decided to buy some shares in a publicly-owned company.

There’s no secret about that. There is not the slightest secret that company R, or whatever it is, has made a decision to purchase so many thousand shares. Whether it’s one person buying all those shares or a company comprised of fewer than 50 really should be academic to the purchaser of the share in Dominion Stores. It is one unit which has a certain amount of power through the shares of the other company, the public company. The number of shares in the control it exercises is not a function of the number of people in the private company.

There is nothing secret about the private company. The member or anyone else buying shares would have no right to buy into the Eaton family. If it were the Eaton family holding that share, there is no access to the Eaton family; the Ravelston company or whatever it is is a private company, and there is no access to it. So, in terms of the company up top, surely it is the amount of control it buys with its money and not the access of someone to its shares that is the relevant consideration.

It seems to be the relevant consideration is where the shares are in the publicly owned, publicly-held company that the member may want to buy a share in. If the member has 100 shares in that company, what he wants to know when he makes that decision are, it seems to me, many things, two of which we can talk about. First, who owns what shares in the company? And what’s the extent of their control?

That’s a matter of public record. It’s academic whether you end up discovering the controlling interest is owned by a private company in which you can’t buy shares or whether the controlling interest is owned by Patrick Lawlor, QC, who has a lot of money and in whom you can’t buy shares. What’s important is that you know who they are and the extent of that person or company’s control. What are they doing with that control? If they are siphoning money, as the member puts it, then it doesn’t matter whether it’s the private company, Ravelston or Patrick Lawlor, QC. they shouldn’t be siphoning money.

What that unit with this large body of stock can do is only take money in accordance with their pro rata interest in the company, whatever the dividend is per share. They are going to get a heck of a lot more money because they have put in a heck of a lot more money and purchased that much more interest in the company, but per share, they shouldn’t he taking any more than the shareholder with one share or 100 shares. It’s obviously on a dividend per share basis.

If there is anything amounting to benefits because one is an insider and there is improper insider trading then it doesn’t matter if it’s Lawlor, QC, or the Eaton Company or Ravelston Corporation. If they are using the information they have, if they are using the private control they have of that small amount of the stock which gives them effective, powerful control, to the detriment of the small shareholder, then it always has been and always will be, a violation under the Act.

The new takeover provisions for insider bids and issuer bids in the OSC rules as they are now are to assure greater fairness for minority shareholders, as are some of the proposed changes to the Securities Act. Those are all in place to protect the minority shareholders against the sheer size and power, more the value of control of a company, rather than what that control block is doing on a day-to-day basis. If the control block is stealing from the minority shareholders on a day-to-day basis, siphoning to use the member’s word, that always has been a violation. Our attention is being turned now to whether there’s a great amount of inequity in a situation in which your 100 shares, trading at the same value on the stock exchange as Lawlor, QC’s 5,000 shares, should be treated differently in a takeover situation. Are Lawlor’s 5,000 shares worth more simply because they amount to control?

I suppose to a purchaser they are worth more. Whether that is tantamount to an inequity to you who bought your shares figuring they were worth the same as each of Lawlor’s 5,000 individually, is a matter for some debate and concern -- hence some of the new policies of the OSC and the consideration that’s going into the new Act. I hope we have covered all the permutations and combinations for you.

Mr. Young: I gather then from what the minister said, Mr. Chairman, the Ravelston Corporation is actually listed with the Securities Commission. Its shareholders are known. Its assets, the figures, are there for inspection.

Hon. Mr. Grossman: Just to clarify it, we don’t know anything about Ravelston Corporation. The details of who owns what in that company are not known any more than we would know the names, addresses, phone numbers and relative holdings of each of the Eaton brothers. But the interest of Ravelston Corporation as a shareholder and the numbers of shares are of course on the share register of the company, a matter of public record.

All the financial dealings of the publicly-held company are a matter of public record. The purchaser of shares could have his stockbroker go in and find out who is really running this company.

That’s the question you want to know: Who is running the company and how have they been running it? That should be disclosed through the dividend record, the financial records and the statements on file. That is all open, so in that sense it’s as legitimate a question as a large company may ask about each of the individual shareholders. I suppose from time to time they do find out because they want to know whether the company that buys small control blocks may be subject to losing control because of some identifiable small shareholders who may want to band together.

I think it is relevant for the member to be aware that all the information on a public company, including who holds what shares, is available on public files at the Securities Commission’s new premises at 10 Wellesley Street. You come in, look, and find out the extent of the control and who has it. With regard to Ravelston Corporation or whatever, I suppose you do a corporate search across the street and find out who the shareholders of that company are, if you found Ravelston on file as holding shares.

Mr. Lawlor: Just one further question on securities. There is a move in North America, and I would like to know how much in Ontario, for public companies to pick up their own shares and to convert back to private corporations because their stock market quotations are undervalued. The directors consider if they reconvert to a private corporation they are closer to the true market situation touching stocks, should they subsequently desire to sell.

Is that a phenomenon that is occurring, and to what extent does it affect Ontario? Does it come through the securities people in the process?

Hon. Mr. Grossman: Yes, it is a concern. In September 1977 policy number 337 was adopted by the commission. It deals with the problem of issuer bids and sets out disclosure rules on repurchase by issuers of their own securities, including, where appropriate, independent valuation of the issue as a going concern.

There is also a policy statement, I am informed, on takeover bids as related to this, which has just been put out in the last two weeks. Yes, it is a phenomenon that is occurring here and some policy statements have been developed to deal with it.

Mr. Lawlor: You say it is a problem. What I am asking, too, is to what degree it is a problem? Are there quite a number of these conversions taking place? Have you any numbers on it? Do you consider it a retrograde step?

Hon. Mr. Grossman: There were about a dozen last year.

Mr. Williams: Just an isolated question, moving away from the mining industry as such and coming to the item dealing with registration of scholarship fund dealers. I notice the number of dealers in this specialized field is very limited. I recall a few years ago this was a type of investment that was very much in vogue and there was a great rash of activity in this area. I think this must have been about 10 years ago. Frankly, I just don’t know what the current status is with regard to the sale of this type of security or investment, or whether there has been a complete demise of this type of investment available to the public or what happened. But I know it was a very popular commodity at one period of time. Gould you enlighten me, if not the other members of the Legislature, on that point?

Hon. Mr. Grossman: It’s not so popular any more. There are to our knowledge two scholarship funds at most. There’s one operating in Quebec only and one operating across Canada. So there are only two. There were three at most at any one time. In Ontario, at least, they are not particularly popular.


Mr. Williams: Are they active at this time, Mr. Minister?

Hon. Mr. Grossman: Just one, Canadian Scholarship Foundation.

Mr. Williams: How broad are the activities of this particular fund? What is the extent of the investment made in the fund to this point? Do you have any information on that?

Hon. Mr. Grossman: It’s operating across Canada; we don’t have any figures with regard to how many dollars are being invested in Ontario.

Mr. Makarchuk: Do you at any time go and see that there is an agreement in existence between the people who sell the fund and the trust company that stores the money and pays the interest, to see that the people who purchase the fund are getting a fair break? In other words there may be agreements in effect; the trust company may be collecting eight, nine, 10 or 12 per cent on the fund and returning four or five per cent to the fund. Does your department at any time look into these agreements and find out what relationship exists and what payments are made into the fund? Also, is a proper audit ever done of the fund to see that all the money is actually turned over?

Hon. Mr. Grossman: We receive a proper audit every year, in conjunction with a prospectus filing which must be filed annually with the commission. I’m informed the agreements are examined as well.

Mr. Makarchuk: It is sold at times. The reason I know something about it is that I was involved in this years ago -- through a fairly high pressure operation. Is whether the consumer is getting a fair break on these funds a matter of concern to you? Do you investigate them?

Mr. Lawlor: So, he finally said it.

Mr. Makarchuk: I started one of them.

Hon. Mr. Grossman: There is no question about it; we do not get into value or quality judgements with regard to the practice. With securities, mining stocks and so on, some are subject to high pressure sales and some aren’t. I think the members would have complaints if we made those value judgements. Indeed, we’d be talking about who assesses the legitimacy of a mining property and making sure that we’re not just arbitrarily sitting up in our office saying, “This isn’t good enough.” All we can do is make sure that there are proper audits, prospectuses are filed, and there is full and complete disclosure.

I don’t think the member would suggest we pass a value judgement as a policy, other than making sure that it’s watched carefully, restricting the sales and watching the charges involved.

Mr. Makarchuk: I feel there is a difference between mining stock and this, because it operates on a non-profit basis, has a board of governors that represents universities, or represents itself as being associated with some institution. When people are buying or enrolling in the fund, they may somehow get the impression they’re actually getting a fair break. The understanding is that $100, or whatever the rate is, of their initial investment is going to go for the administrative and selling costs, and the balance is turned over to them. It goes into the fund which will eventually be split and doled out to all those who will be going to universities or community colleges or whatever.

Where there is an element of concern is whether the interest arrangement between the trust company and the sellers of the fund, and the interest that’s being paid into the fund, into the pool, is really a fair and reasonable interest. I think it could be deceptive to some people. They’ll look at the fact that there is this board of governors from universities, and that it is a non-profit foundation, so they would be tempted to think it’s up and up and on the level. However, there are areas in it that I think are, or could be, slightly shady. I shouldn’t say that they are but that they could be.

Hon. Mr. Grossman: National policy No. 15: Conditions precedent to acceptance of scholarship for educational plan prospectuses. It sets out 16 different conditions before a prospectus will be acceptable for filing. Number seven deals with one of the points the member has raised: “The entrance fees charged, including the commissions of the distributor and its salesmen, must not exceed $200 per plan. The first $100 paid under the plan may be applied against this fee and the balance may be deducted at a maximum rate of 50 per cent of each of the further contributions.” That’s the condition applying to the charging of fees.

The member will understand that through the annual filing of the prospectuses, the foundation, which in all cases is non-profit making, the sales organizations, fees and expenses are shown thereon and gives the Securities Commission some element of control -- because they are disclosed yearly in a prospectus filing. Frankly I haven’t got the in-depth knowledge or experience that the member has. Some of the questions he has raised gives me cause for rumination. I’ll have a look at it if you want to supply me with some more details.

Mr. Makarchuk: Could you have your people ruminate on the interest being paid from the trust company into the fund and is eventually paid out to the various people, and see if it really is a fair interest rate for the money that is going in there? The reason I am asking is that I think the initial fund, the first one, was started by an American example. The second one was the one that I started myself in Canada a few years ago.

Hon. Mr. Grossman: Aha, now I’m suspicious. We’ll check into that one specifically I can assure you. That’s probably out of business. I am informed by my staff that they do watch it and are satisfied in each instance that they get the best rate available from the lending institution. But I’ll look into it myself.

Mr. Williams: Coming back to the comment made by the member for Brantford where he suggested that there could be some shady goings on: Is that just in his own mind or is there some substance to that that might be borne out? Could the minister indicate whether in fact the commission has ever received any complaints from anyone who has had any dealings with the fund, from a purchaser or a potential purchaser, as to some apparent abuse of the plan that has been presented to them? Has there been any evidence of abuse of this type of investment program?

Hon. Mr. Grossman: No. Not even the one started by the member for Brantford.

Mr. Young: Coming back to the issue raised by the member for Lakeshore, I would like to ask the minister whether any investigation has taken place about the effect of this process on the investors that are left outside when the company has bought in a control, or whatever it needs, of the shares of its own company, and then become a private company? A lot of people are left holding those shares, which then have no market and may become very low valued shares. Has any investigation been undertaken to see what happens to those minority shareholders at that point?

Hon. Mr. Grossman: It is something that is under careful study right now by the Securities Commission dealing with that specific point raised by the member. You’ll recall my earlier remarks that where necessary there is an evaluation required of the shares in question. During 1977, in view of the 10 or 12 going private situations we face, it is clear there is a definite need for full disclosure of all the relevant facts.

From all of that, in light of the experience, it is clear there are circumstances where, by virtue of what we were talking about a moment ago, just the sheer value of the control block versus what is left after the purchase, there still remains some sort of problem. Hence the Securities Commission is, as I say, dealing with it at this precise time.

Mr. Young: Do you have the results of the study that is going on then?

Hon. Mr. Grossman: Yes.

Mr. Young: We will have it before too long then.

Mr. Davison: In regard to the point raised by my colleague from Brantford about the scholarship trusts, I take it these are classified as securities in terms of section 1(f) of the Business Practices Act and, therefore, do not fall under the terms and obligations that we find in the Business Practices Act. Is that correct?

Hon. Mr. Grossman: I will get that answer for you shortly. I cannot tell you right now.

Mr. Davison: The answer may come after we have left the securities portion. I would ask the minister, if that is so, if he might address himself to a comparison between the protection provided the consumer in this sense with the securities regulations, as opposed to the rather strong protection coverage provided to the consumer by the Business Practices Act.

If it is true that it does not fall under the Business Practices Act, as I suspect is the case, I wonder if the minister could take it upon himself to examine the possibility of not bringing those under the Business Practices Act but rather extending the provisions of the Business Practices Act to the securities regulations involved so that consumers in this field get the same kind of protection that they do in other fields, regardless of the difficulties involved in setting up changes in those regulations.

Hon. Mr. Grossman: I would think, particularly when the whole process is finally reviewed and studied and some changes are made, if required, the consumer would be protected through the Securities Commission route and be given, as the member acknowledged, more protection than under the BPA, if in fact, it is included under the BPA. I don’t see the gap in consumer protection. The more severe and better consumer protection surely in this field is already available under the securities route rather than the BPA.

Mr. Davison: That remains to be seen as we do not as yet have a determination of which they are under.

Hon. Mr. Grossman: My solicitors have informed me that the member is right. It does not come within the definition of the BPA, but surely he would agree that all we have been talking about in the last little while is what is deemed to be overly restrictive provisions and rules set out by the Securities Commission, and that the Securities Commission may have gone too far in requiring too much filing, too much information and too many prospectuses, so much that it may be inhibiting some operations.

If the member is suggesting that the Securities Commission does not provide enough consumer protection, he will be the first contributor to this debate today to be making that suggestion. I think he would probably be the first person ever to have suggested that the BPA-type of approach would provide more protection than the filing of prospectuses, continuous policy revisions and all the powers wielded by the Securities Commission provide.

Mr. Davison: With the greatest respect, we are going to address ourselves to the Business Practices Act in a couple of votes. The point I am making is that there is a substantial difference between the manner in which the securities legislation and this kind of legislation works. One works supposedly before the fact and one works, apparently, after the fact, if either works as it should work.


The real basis of the question I was asking was which does it fall under? We have to see whether or not all of the regulations we have at the beginning of the process, as it appears we now have under the securities program, are as effective as they might be. We also have to see what recourses are available at the other end after the consumer discovers that in spite of all of the protection at the front end, he may or may not still have been ripped off.

I raise that question actually, without knowing which it was under. I hope the minister understands that. But I am quite correct, I suspect, in my analysis of the protection at each end of the process.

Hon. Mr. Grossman: Other than to say that securities obviously, operates before the fact in requiring all sorts of filings subject to all sorts of rules, regulations, recall and all of those provisions, it would be before the fact. In this particular circumstance, I’m sure he would agree, now having ascertained what it comes under, it’s a pretty effective forum for this particular problem.

I have no apologies, as the member might find out when we get to business practices, for the approach currently taken under the BPA and the legislation that we’ll be dealing with at that time, the things that the BPA is supposed to cover, and the abuses it is supposed to stop. That sort of legislation, we think, is appropriate for those goods and services covered in with the BPA.

Obviously, we’ve made other determinations with regard to securities and some other fields where we feel we have to go the prospective route. But in each case we think the right decision has been made for the potential consumer abuse involved.

Item 1 agreed to.

On item 2, pension plans:

Mr. Davison: In regards to the board and/or committee that’s established under this section of the ministry, I wonder if the minister might tell us, not necessarily the makeup of the entire board, but whether or not there are as representatives on the board any working people, any people with experience as the major consumers, if we can call them that, in the pension world?

The other thing: One of the themes that will keep popping up through the estimates, not only in the business practices discussion but in pretty well every section of the ministry, is the question of consumer faith or consumer credibility as far as the ministry is concerned. I had a case come to my attention -- and I’d like to give the minister the file number with the Pension Commission of Ontario. If he has any questions about what happened, he can look them up. The file number is C-7820. It’s a curious case that’s gone on for some long time. It involved a number of communications between my constituent and myself, my constituent and the Ministry of Labour, myself and the Pension Commission, the employer, the people who run the pension and a lot of cross-communications. The file has correspondingly been built up to a rather substantial size.

There’s one element of it all that puzzled me -- more than bothered me -- and led to a shattering of my constituent’s faith in the Pension Commission. I suspect it is the kind of thing you see hurting the credibility of the ministry in other areas of the ministry. I don’t know if it was an error in style on the part of the commission or if it was an error in substance. I realize the minister won’t be able to answer the question now but could perhaps inform himself of this situation later.

What happened at one point was the constituent wrote a letter to the Pension Commission in April 1977 and in June the commission responded to him. He’d raised four points in regard to his pension and the problems he was having with his pension. The Pension Commission wrote to the consulting actuary firm that was doing the work on the particular pension.

Mr. Deputy Chairman: Will the member please speak a little louder or speak into his mike because we’re having a little trouble hearing.

Mr. Davison: I’m sorry, I’m having a little trouble speaking.

Mr. Conway: Speak up, boy, speak up.

Mr. Davison: I’ll try. The commission then wrote to my constituent in response to the four points he had raised. In a three-sentence letter, it said they referred the question to the company running the pension and the letter from that company addressed itself to one, or one and a half, or possibly two points my constituent had raised in the letter that contained four points. This was sent back to my constituent by the commission.

After he had fought the issue out over a number of months with the company, he approached the Pension Commission, explained it all, raised his four points and the Pension Commission turned around and wrote to the company. It got a response from the company without any further explanation and that response was the very same one the constituent had been getting in greater or lesser detail over the past couple of months.

I don’t know whether that was a substantial error or whether it was just an error in style but the effect it had was to completely destroy the constituent’s faith in the Pension Commission. He felt they had sided with the employer and the pension company.

I wonder if the minister, over the next few weeks could look into that particular case as an example of why people in Ontario lose faith in the ministry’s programs, not particularly with the Pension Commission because there are other examples I’ll raise later in the debates concerning constituents of mine. I’d hope he’ll look into that and make himself aware of that.

Hon. Mr. Grossman: What’s the file number again?

Mr. Davison: The file number is C-7820. Perhaps while you’re on your feet you’ll address some remarks to representation on the board or committee that’s struck under this file.

Hon. Mr. Grossman: The answer is, yes, I’ll look into that particular case. I would caution the member, although he hasn’t taken my advice so far, he ought to be dealing with specific cases on a more confidential basis. It’s his decision. I would hope that before he suggests the public’s confidence in the commission is entirely shattered, which is a little unfair, although he’s more than free to report as he did later in his remarks that this particular person’s confidence is shattered, that he get details to show a recurring pattern.

I think it is only fair to the people who put in long hours on the Pension Commission to be pretty careful about suggesting anything is an overall practice, unless he’s got evidence that it’s an overall practice, or to say the public has no confidence in my ministry generally. That’s the member’s opinion, he can say that, but when it comes down to specifics such as saying that this is an example of why the public has no confidence in the commission, I would urge the member to be a little more restrained in his comments and deal with a specific, if indeed, he wants to deal with a specific, on the floor of the House.

In any event, we’ll look at C-7820 for you and not reply in the House but rather, we’ll send you a detailed letter with the rundown of what happened there.

The members of the board are: Ms. Donna Haley, chairman and a lawyer. Mr. Rudd, vice-chairman and general manager of London Life; he’s an actuary. Mr. Laurence Coward is an actuary. Mr. Gordon Milling, research director, the United Steelworkers’. Paul Kates, insurance agent. William Saunderson, who is in investments. Mr. Priestner, vice-president of Finance, Westinghouse. Mr. Peter Kennedy, who is an insurance broker and just as I am speaking Mr. Coward has resigned; he’s being replaced by Mr. M. D. R. Brown and I don’t know what his background is.

Oh, he is an actuary as well, I am informed.

Mr. Conway: Get a handle on that ministry, Larry.

Hon. Mr. Grossman: Well, he’s resigning.

Mr. Davison: I might suggest to the minister that it might be a better idea if such boards had a bit more consumer representation. I don’t think it has to be a 50-50 deal, or that we have to have radical change, but perhaps one or maybe two more of what in this field would pass for consumers should be represented on the board. Because those are the people who are most personally affected. I am sure they would be able to provide to the board or committee a badly needed other perspective.

Hon. Mr. Grossman: I don’t think it’s badly needed. I reject the suggestion that the pension committee is not responsive to any suggestions and the problems. What can I tell you? I want to say that throughout my term in the ministry where there are appointments called for to commissions, we will in every case, as in the case of my predecessor, make sure that there is good consumer representation, however one defines consumer representation, on each particular board and commission.

When you go through the estimates you will find pretty good consumer representation on a lot of the boards, agencies and commissions in the ministry. This happens to be one in which the very complexity of the things they deal with requires more than just plucking your average consumer off the street and saying: “Hey, would you like to spend a day every two weeks” -- which I am told is about what it is -- “about a day every two weeks dealing with the really very technical matters?” We have three actuaries on here; that’s not an accident obviously. It’s just not that easy to identify what would be, to use the member’s words, a consumer voice on the commission.

However, I can assure you that in the matter of this commission and the others we will be watching that very carefully to see that there is adequate, sufficient and useful -- which is a problem in something as complex as this -- consumer representation on the board. Having said that, I want to explicitly reaffirm that I don’t identify this as one of those commissions that is suffering a problem in terms of its responsiveness or its understanding of what the pension “consumer” is demanding or needs at present. I think they have done a fine job.

Mr. Davison: I think the minister has recognized the principle and concern that I am voicing, and I trust he shares it. I don’t see anything too wrong with plucking a couple of average people off the street to sit on a board like this. If we had a bit more common sense, in terms of street sense, on some of these commissions and boards we set up, we wouldn’t get some of the perspectives that we do get from some of these boards, committees, commissions and whatever government sets up. I understand the minister shares my concern and understands the concern and does, as I do, share respect for the capacities, understanding and capabilities of average people that we might pluck off the street.

Hon. Mr. Grossman: I appreciate your comments and agree with the sentiment you have expressed. I know that there will be someone in the riding of St. Andrew-St. Patrick who can provide that consumer input to the board.

Mr. Williams: Dealing with the composition of the board and the individual members, unless there has been a recent amendment to the Pension Benefits Act, I understand that the Act provides for a minimum of five and maximum of nine members. I notice that we have a complement of eight members at present. I was wondering if you normally maintain a full complement of members, as provided for in the legislation, or whether eight has been the traditional number. If you have not utilized the maximum numbers permitted by the Act, why not?

Hon. Mr. Grossman: The practice has been that it is a three-year term with rotating membership. It has always been eight, for neither obscure nor obvious reason; it has just always been eight. It’s something we will certainly look at, particularly in view of the remarks made earlier about the need for plucking someone off the streets.

Mr. Lawlor: The area of pension funds has been mentioned in the past, I believe I think it is worthy of being brought forward again on this occasion. After all, this is the only occasion.

You’re sitting on a hot potato -- let me put it catastrophically. One of these days one of those pension plans is going to blow up. It is going to be a major one, and there is going to be a horrendous squawk about the whole thing. I think you should be thoroughly alerted before it happens.

It’s a question of the funding of the plans. It has become more and more a matter of notoriety and I suspect, on the Pension Commission fear, that inflationary pressures being what they are and the moneys flowing into the funds in such a way as not to be commensurate, not being fully funded, the fund will prove bankrupt.

I would like to know to what extent this is being canvassed. Three or four studies on pension matters, one of them I think from the Economic Council of Ontario -- not of Canada, of Ontario -- have recently crossed my desk. I have a special place I put all this pension stuff. I don’t always have time to read it, that is one of my regrets. But it is an area of very great and consuming interest, particularly taken in the context of my remark that the position of danger has now been reached. I suspect that in the next five years many of these plans will fold. I think you have to pre-empt that possibility by moving in more assertively than your predecessor. You have hardly had time yet.

As an aside, you are more prickly and defensive about this grab-bag constituency of yours, this particular department, than more roly-poly previous ministers have been. You nurse it like a mother hen, as far as I can see sitting over here. You find any type of blandishment or criticism not only unwarranted, but practically a criminal offence.

Mr. Conway: I tell you Ms. Beardsley’s scared.

Mr. Lawlor: My friend’s remarks with respect to the Pension Commission failing in this regard brought an unwarranted response. Without stepping on my colleague’s toes too much I want to say in passing that they do a good job. Whenever I write to the Pension Commission they send back adequate information to satisfy my constituent, and they do it quite promptly. So, on the basis of my personal experience I want to give them credit in this particular area.

What has the minister to say about this whole funding problem?

Hon. Mr. Grossman: To confirm the member’s concern, and to assure him it is one shared by all of us in the ministry, while I haven’t had time to set the whole thing straight in my couple of months in office, it is however, something that was drawn to my attention early on and something about which I could immediately appreciate the seriousness.

The royal commission on pensions which was established by the government, as you know, to deal in part with this problem, will be reporting to us as early as possible because of the seriousness of the problem. I’m told report number two, a funding status report, is coming down from the Pension Commission in May and will deal specifically with the problem.

Because I do share and understand the member’s concern in this field, I can assure him when it does come down in May, notwithstanding the heavy work load we have on for next year we absolutely will be putting it on the front burner and dealing with it as a priority. So we will indeed be aggressive when we have the badly needed input from the very good royal commission to set the matter straight as early as possible next year.

I don’t underestimate, by the way, the task ahead even after we get the report of the royal commission. But we’ll be terribly aggressive with it.

Mr. Lawlor: You don’t want another Atlantic Acceptance.

Hon. Mr. Grossman: No, I don’t. We’re doing everything we can and will do everything we can as soon as we get the report. I might say I am referred to the new section 4(a) of the regulations which provides more flexibility in funding of pension plans and helps those plans which are affected by inflation, but at the same time maintains the safeguards of the funding requirements.

I might say all of this concern has resulted in the Pension Commission studying even more carefully and rigorously the documents that must be filed with them from time to time, as the member knows. Again, I can only assure him of our awareness of the problem and that we’ll be terribly aggressive after the royal commission report comes in.

Finally, I can’t sit down without commenting I’m glad the member was able to locate at least some of the communications on pensions he filed on his desk. I’ve heard about his legendary desk. May I say he may find me defensive about the staff. Indeed, I’ve found in my short time in the ministry we have very excellent staff and yes, I will be rather defensive about my staff. If he recalls what I said to his colleague -- and the member for Lakeshore in fact bore out my remarks -- that in the course of these discussions and any other discussions we might have, I would urge upon members of the Assembly, to mention specifics which I would be glad to take up with staff. I would be terribly meticulous in following up any specific criticisms of staff to make sure those criticisms -- if warranted -- are corrected immediately.

My comment was only that where there is one specific instance I think it rather incumbent upon a member of the Assembly not to jump from a specific problem, an identifiable one -- he was kind enough to identify it so we could follow it -- to a presumption that the entire Pension Commission is not responsive or that the public has no confidence in it. If there is a pattern or if he has any evidence it is a pattern, he may argue that case and then make the statement there appears to be a general problem and the public generally has no confidence.

I think these were some of the remarks with regard to another part of my ministry the member for Scarborough-Ellesmere (Mr. Warner) was trying to make the other day on another matter. That’s a different situation. My caution was only with regard to jumping from a specific to a general condemnation for whatever purposes he may have. I just don’t think it does any justice to the particular board in question. I just urge the specifics on the members.

Mr. Williams: Supplementary, if I might.

Mr. Conway: Cross the floor, John. You will get a lot more attention.

Mr. Reid: Please don’t.

Mr. Williams: The member for Lakeshore has made reference to, or suggested, one of these days one or more of these pension funds is going to blow up, as he says. I presume he’s alluding to the fact that perhaps they’ll find themselves, because of the way in which they are structured” financially insolvent all of a sudden, and unable to meet the payments to the participants in the plan. I don’t know if that’s what he was alluding to. I presume he was.

Mr. Lawlor: That was a presumption you may presume.

Mr. Williams: Pursuing that point for a moment, the Act gives power to the commission to reject any pension plan that doesn’t qualify for registration, which is obvious. It also clearly provides the right to cancel any existing pension plan certificates of registration, issued in respect of pension plans, where it appears that a particular pension plan no longer is able to meet the test for solvency, or otherwise qualify under the Act

What has the experience been of the commission, with regard to it having to exercise those powers under the Act in recent times, if at all?

Mr. Conway: Answer carefully, now.

Hon. Mr. Grossman: I always do. In essence, my people have had to threaten to deregister certain plans but have never had to go through with that threat. They have never had to deregister. The threat seems to have done the job and got things back on line.

Mr. Williams: How frequently does the threat have to be applied?

Mr. Mackenzie: Once is too often.

Hon. Mr. Grossman: Infrequently.

Mr. Peterson: What are the criteria you are using, when your ministry is looking at these private pension plans, as tests of solvency? I am profoundly concerned about this issue. I heard the remarks of the hon. member for Lakeshore over the box and I ran up here, because I think I agree with everything he said. I would say it is far more serious than even he has indicated.

Mr. Lawlor: Well, I said it was catastrophic.

Hon. Mr. Grossman: If he has a better word, I would like to hear it.

Mr. Peterson: This is a very serious catastrophe though. This isn’t an ordinary catastrophe. We have ordinary catastrophes every day in this House, but this is a very serious catastrophe. And I want to know what your plans would be if a private plan went under or a private company couldn’t come through on their pension plan. What would you do?

Hon. Mr. Grossman: I am relieved that the member ran up so quickly to get into this debate about which he is so concerned. I want to assure him, so he will be able to test these assumptions, that as they come in the annual actuarial reports are reviewed by my people with regard to the methods used. Secondly, the assumptions behind the actuarial assumptions used in preparing those statements --

Mr. Peterson: Do you insist on an annual actuarial review?

Hon. Mr. Grossman: Tri-annually.

Mr. Peterson: I am sorry?

Hon. Mr. Grossman: Tri-annual, that means three, Dick. Third, my people carefully check out the valuations used for evaluating the assets shown on those statements.

The member can check the regulations which show the tests of solvency used by my people. They are in the regulations. In the event the plan is insolvent my people would take steps to wind up the plan and see that those employees with full accrued benefits do get whatever interests are available to the extent the plan is funded. There is no magic to it. We would just come in and make sure that those employees who had full accrued rights got what was in the pot.

Mr. Peterson: Are you telling me the beneficiary under the pension would have no more rights to funds or security of income than what is the sum total of that fund? Is that what you are telling me?

Hon. Mr. Grossman: Basically, yes.

Mr. Peterson: The other thing I want to ask you, are you happy with a review every three years? An actuarial review?

Hon. Mr. Grossman: It seems to be working pretty well up until the present time and my people do have the right under legislation to request filing more often if they have any reason to believe it would be appropriate. It is done on occasion.

Mr. Peterson: What is your view on the public plans, teachers’ superannuation, superannuation in the public service plan?

Hon. Mr. Grossman: What about it?

Mr. Peterson: Do you think those should be reviewed every three years or every year? Has your department got an opinion on that?

Mr. Lawlor: You better leave us alone. That is the only thing that keeps the government alive.

Hon. Mr. Grossman: I am sorry, that is not a subject of the Pension Commission. Those plans are not properly subject to this program.

Mr. Peterson: But in fairness, I think it very intimately relates. I do not think the time has passed when you can dissociate private and public plans. One of the things we are finding is that public plans are setting the pace for private plans. The private plans are being increasingly obliged to compete, and although I understand it is not exactly under your bailiwick, I am interested if you have any reactions.

Hon. Mr. Grossman: When the minister responsible responds -- I think it is the Treasurer (Mr. McKeough) who brings that matter to cabinet -- I will surely engage in a dialogue at that particular time on the subject. But it is just not properly the subject matter of this vote in my estimates; I am sorry, it just isn’t.

Mr. Peterson: You are a very capable young minister and you know more than is just encompassed by your own particular ministry, I would assume. I am trying to engage in a dialogue on a subject of great concern. I just want to know if you have any reactions to it.

Hon. Mr. Grossman: I can only tell you that the day-to-day administration of the private plans is the subject matter of this vote, not the public plans. The fact that it is a matter of great public concern is something I share, and indeed commented on at committee stage long before you raised it here today. I am talking about a year or a year and a half ago. It is a matter of great public concern and an important, serious problem, but that does not mean it is appropriate to discuss it, either in my estimates or under this vote, I am sorry. I can give you lots of other matters which are.

Mr. Peterson: What are the issues, then, pertaining to your own ministry that you feel will have some kind of resolution as a function of the performance of the royal commission into pensions; what are you looking for?

Hon. Mr. Grossman: I take it the member is asking for the terms of reference of the royal commission on pensions. Is that another way to ask your question?

Mr. Peterson: That royal commission obviously takes in more ministries than just your own. It is dealing with private and public sector plans, the whole financing thereof; as well as indexing and various other issues. I assume that since you have decided today to respond only to areas in the private sector, I am interested in knowing what kind of questions you see being resolved by that commission? Has your ministry made any submission to that royal commission?

Hon. Mr. Grossman: I know the member will recall that Ms. Donna Haley, who is the chairman of our Pension Commission, also happens to be the chairman of the royal commission on pensions. I know you’ve just forgotten that, but if you think about it, you’ll remember that she may be able to provide more than all the input required from our ministry into the royal commission on pensions. That is precisely why she is performing that role for us; so all the input necessary is there.

Mr. Peterson: You’re saying that the chief commissioner of the inquiry is going to take your position to that royal commission, is that what you’re saying?

Hon. Mr. Grossman: Obviously --

Mr. Peterson: That’s like appointing Roy McMurtry to look into the Ontario Provincial Police.

Mr. Chairman: Order, please; I recognize the minister.

Hon. Mr. Grossman: Also, to confirm -- after you repeated the question -- to confirm what I think your question was -- what are the terms of reference of the royal commission on the status of pensions? -- I’ll read them to you.

One, study the impact on the economy of different systems of financing retirement pension plans --

Mr. Peterson: On a point of order, Mr. Chairman --

Mr. Chairman: Order.

Mr. Peterson: -- I am concerned about --

Mr. Chairman: Order.

Mr. Lewis: Well he said on a point of order, Mr. Chairman.

Mr. Chairman: A point of order? What’s your point of order?

Mr. Peterson: I had a point of order, but I forgot it, Mr. Chairman.

However, I want to know from the minister since obviously this affects more than his ministry, and we’ve established that the minister is not prepared to discuss those issues that come under the Ministry of Treasury, what I want is to have the minister itemize for me the concerns that he has. He has already said that his ministry will not be putting a fixed, formal position to this royal commission. I want to know what, in the minister’s mind, in his judgement, are the kinds of issues that are going to be resolved.

Mr. Conway: That did it.

Hon. Mr. Grossman: I can’t do any better than suggest to the member that the concerns of the government at large, certainly my ministry, but the concerns of the government at large are reflected, obviously, in the terms of reference of the royal commission on pensions. I couldn’t be more definitive than to refer the member to the terms of reference of the royal commission on pensions. The member asked me what the concerns of my ministry are; obviously we appointed the royal commission to deal with the concerns of our ministry.

I’m not trying to be evasive. I couldn’t draw up a more complete list than is contained in the terms of reference which says to the royal commission: Here are our concerns, and enumerates them. We invite them to consider them and bring them back to our ministry. I know the member will understand that the process involves them dealing with our concerns, reporting back to us on certain recommendations, and at that stage debate will occur on the floor of the Assembly; but those are our concerns, they are contained in the terms of reference.

Mr. Peterson: I guess I was just looking for some revelation, some glimmering of understanding of the subject from you, and I haven’t seen that yet.

The scope and the nature of this problem is probably, to put it in context and to quote the chairman of the Ontario Economic Council, is probably more serious than the energy question in terms of the financial impact on this community, and indeed the entire country. I would like to see more attention, I’d like to see more concern about this in the press. I’d like to see more attention applied to it by the ministries, this minister’s as well as the Treasurer’s. We have to discuss the Treasurer’s problems at another time, I fully respect that fact, but I would suggest that the minister should consider very seriously his ministry making an official representation to this commission. I don’t think it’s good enough that the minister has appointed an insider to run this commission, or to be chief inquiry officer. The minister should have some very strong views on the subject, because the whole area of security of retirement income is one that’s going to impact very seriously.

I respectfully submit to the minister that if a major private pension plan went bankrupt -- which is not impossible, there are certainly a considerable number in the United States that are in very serious trouble -- the minister would have to very seriously consider getting involved to protect those members of the fund, particularly since the minister is charged with jurisdiction over the solvency thereof. As we’re getting more pressure for indexing, earlier retirement benefits and that kind of thing, I think you should be developing a strategy of your own. I would like to see you with an independent position that you could take to this public inquiry, because they’re going to have substantially more pressure on them than just the ones you could bring to bear.

Hon. Mr. Grossman: With respect, I know the member wants to express, and has expressed, his very great concern over the situation we find ourselves in with private pension plans.

The member for Lakeshore brought it up and pointed out, in his words, the catastrophic nature of the problem. I confirmed the government’s agreement with the nature and seriousness of the problem. The member succeeded in confirming his concern about the problem.

I can only tell you the government -- and I want to be partisan about it -- long before these concerns were expressed by the member opposite, appointed the royal commission and asked that it report at the earliest possible date on this very complex problem.

As well, rather than going outside and getting someone who would have to have Donna Haley, one of our resident experts, in as a witness to talk about the problems being experienced in the field and the experience of our Pension Commission; instead, Donna Haley, who has been dealing with it on a day-to-day basis in our ministry -- no more knowledgeable person, other than perhaps Mr. Bentley of the Pension Commission could be in that position -- is there performing that function. The appointment of an insider -- I’m not sure in which context the member was using that word will make the work go more swiftly and provide a route for all the knowledge and expertise of my ministry to flow into the effort at solution of that particular problem.

The member should appreciate that the Pension Commission is in my ministry, as are a lot of other things. That doesn’t mean input from this ministry any more than the Ministries of Energy or Northern Affairs or Natural Resources, is going to be of any more special concern or enlightenment than the information I can glean from, learn from and deal with through the Pension Commission.

The member thinks it will be instructive for me to sit down with the Pension Commission -- the very people, one of whom at least is looking after and heading up the royal commission on pensions and deal with the problems; get involvement, expertise, policy advice and direction, take it through cabinet, follow the ordinary governmental route so as to emphasize, for political purposes, the concern I may have as a minister; and then go back there and make a submission to the commission. I suggest to you that is a perfect Catch-22 situation.

We set up a royal commission to deal with the concerns and make certain recommendations on the basis of every bit of expertise we can possibly provide for that commission, including our own staff and people. When they come back, reporting on the concerns we express and acknowledge, at that stage you will see all the leadership possible, not only by me but by those ministers who are more directly responsible for public pensions in this province.

I don’t want to leave any impression that we do not understand the seriousness or complexity of the problem, or have failed to express our concern about the problem. Our concern speaks for itself. It is right there on the record. We’ve expressed it, and we’re not going to get into a political manoeuvring game so we will look like we’re concerned.

I’m quite prepared to let the record stand for itself; our concern is there. We’re not going to juggle around and make it look like we’re jumping ahead of the game; we’re not going to jump ahead. It’s there; it’s happening. We understand the nature and seriousness of the problem, and we’ll be in a position to deal with it come the middle or end of next year.

It’s at that stage the member can stand up and show us his intimate knowledge of pensions and make his contribution to the process. I can assure the member that we’ll listen to what he says, as we will the member for Lakeshore and any other members of the Assembly who have a valid and important concern in the area of pensions. I think he’ll be in a better position to comment on it, as will all members of the Assembly, when the royal commission comes back with its expertise and is able to cover in complete detail all the fields of pension concern that you’ve expressed.


Mr. B. Newman: I wanted to raise the issue of pensions, also, Mr. Chairman. May I, at the outset, say that I discussed this several years ago with Mr. Bentley, and I found him extremely co-operative. He replied to everything I asked of him.

I was just wondering if the Pension Commission looks into private pension funds when it comes into labour negotiations. Quite often you will find that pensions are part of the negotiating process and the end result is that pensions may be negotiated to a little greater degree than there are assets in the corporation.

The reason I bring this up is Auto Specialties, back in the city of Windsor, did provide fairly decent pensions to their employees. In the process of negotiations the pensions were substantially increased, but as soon as the pensions were increased, or some period of time after the increase in pensions, Auto Specialties folded up. The retired employees of that company had their pensions reduced from about $150 to approximately $50; they received approximately one-third. Is there some protection so that a similar type of experience does not happen to others in the process of negotiating salary and pension increases?

Hon. Mr. Grossman: The law requires that any pension plan which has been the subject matter of negotiation be filed immediately thereafter with the Pension Commission, which then looks at the cost increase, and all the appropriate actuarial figures and assumptions, to make sure that it will still be a viable fund after the renegotiation, subject to all the criteria I referred to earlier. Specifically the answer to your question is yes. Immediately after that renegotiation there must be a filing with the commission and the commission then must satisfy itself as to the continued long-term viability of the fund.

Mr. B. Newman: Then the reason the experience was not favourable in the case of Auto Specialties is that there was no such program available or this wasn’t done in their instance; is that right?

Hon. Mr. Grossman: In simple terms, the answer is yes, you are right.

Mr. B. Newman: Can an industrial employee retire after 30 years? You will notice that in the auto industry they have the program “30 and out;” and also “35 and out.” I can recall at one time being told that they could not have this “30 and out” because of some federal legislation.

Hon. Mr. Grossman: If the plan so provides, they can now. The information you had, I am told, was correct; but it has been changed, now they can.

Mr. B. Newman: So they can negotiate, actually, any age providing the plan is actuarially sound; or is the minimum limited to 30 years and out?

Hon. Mr. Grossman: Presently it is 30 and out with the Department of National Revenue.

Mr. Williams: I want to pursue a matter I was discussing with you earlier, pointing out the powers the commission had either to reject a pension plan proposal or cancel an existing certificate for a pension plan. I had asked you to what extent this has been a problem with the commission and you had indicated that it appeared gentle persuasion had been sufficient to resolve any of these problems. I am wondering if you could perhaps add a greater degree of finality to the point by indicating to me whether in fact in the past 24-month period any formal notices of objection have been filed under section 26 of the Act dealing with these two matters.

If so, could you identify the nature of the objections filed and the disposition of same? Upon answering that, I then have a new question I would like to go to. Perhaps I will pose that to you now before I relinquish my spot here in the speaking order. The question is with regard to the general content of the material in this vote. It is noted, of course, the major part of the responsibility of the commission is to deal under the inter-provincial and federal-provincial working agreements as regards portability and other features of plans in other jurisdictions.

I presume the other provinces all have their own comparative legislation -- at least public pension plans which have portable features and are the subject matter of these interprovincial relations; but if that is the case, why is it then, a number of the provinces are noticeably missing from the list of provincial statutes that are part of the inter-provincial working agreements on pension plans? I notice in particular there is no reference to the province of British Columbia and three of the Maritime provinces. Nova Scotia appears to be the exception, coming into the plan in the immediate future according to the vote notes we have before us. Perhaps you could enlighten us on that observation, Mr. Minister.

Hon. Mr. Grossman: The answer to the first part of your question is we haven’t in the last 24 months needed to utilize the section of the Act to which you are referring. The answer to the second part of your question is some of the other provinces just aren’t as enlightened as we are in this and other jurisdictions with regard to pensions, and they haven’t legislated in the portability to which you are referring.

Mr. Williams: Do those provinces in fact have pension benefits legislation in existence, but lack the portability features that would justify an interprovincial agreement?

Hon. Mr. Grossman: No legislation.

Mr. Williams: Does that relate to the provinces I named to you as being excluded from the list of Acts mentioned?

Hon. Mr. Grossman: That’s correct; it does.

Mr. G. Taylor: Mr. Minister, are the investment restrictions on benefit plans working? Can we give assurance they will be funded to the best of the restrictions on the benefit?

Hon. Mr. Grossman: Generally speaking, yes, subject to some of the concerns we expressed earlier. So far the criterion seems to be working fairly well. The provisions in the Act, the supervision, and review conducted by the Pension Commission, seem to have done the job and seem to be working reasonably well at the present time.

Mr. G. Taylor: Mr. Minister, again on the subject of pensions, when the Haley committee comes in, will you be looking at those reports to make sure the pension plans your ministry administers will be sound in accordance with the recommendations of that committee?

Hon. Mr. Grossman: My staff comments we will have no choice; but of course we will be doing that in the context of what I said earlier. The House can be assured I will be dealing with the report coming in May very expeditiously. It will be our summer activity in the ministry, although it is going to be a difficult problem even after the report comes in.

I suspect there will be no easy solutions, but at least the report will contain the very best solutions and alternatives available, I am convinced, anywhere. Yes, we will he digging into it very expeditiously over the summer period, presuming the report arrives in May, and I am told it will.

Mr. G. Taylor: Mr. Minister, in the estimates book you comment that one of your objectives is to improve the quality and administration of pension plans. When you are looking at the quality of pension plans, does that mean their funding or their service to the people they are intended to serve?

I have many civil servants in the Penetanguishene area who are continually complaining about their pensions, saying they do not suit the needs of the people at this present time in light of the increase in the cost of living. Many of them are ex-civil servants. Naturally when the pension increases a percentage rate based on their best five years, or whatever the condition is on their pension- ability, it does not go up in comparison to the present pay rate on the same job, which has had enormous increases in pay in the last few years. Those people retired some years back of course, but the point is the same job is being carried out today by a person who retires at pension rates based on today’s salaries. Will your ministry be looking into the quality of the pension plan as it applies to people who are ex-civil servants in the Penetanguishene area?

Hon. Mr. Grossman: I would like to be able to say that we could but our mandate is to make sure the funds are alive, well and kicking; that they are properly funded and in existence when it comes time to pay the money to the various beneficiaries.

The problem the member outlines is of course a problem that’s a common one. It’s common throughout industry, and in some places in government. It is, however, a concern of the Pension Commission only to make sure that the funds are there when the time comes to meet those liabilities to pay the funds out, and that the pension funds are administered well. As conditions change, indeed as the benefits go up in some cases, it presents precisely the problem referred to by the member for Windsor-Walkerville (Mr. B. Newman), in terms of increasing the benefits without making sure the funding is there. When that occurs, we of course play a role to make sure that at least there’ll be a fund there to pay the increased benefits.

Mr. Peterson: What is your reaction, the Pension Commission’s reaction to indexed plans? Do you have any sort of feeling one way or the other?

Hon. Mr. Grossman: We’re concerned that they be funded, and funded at least on a pay-as-you-go basis, for retired people too.

Mr. Peterson: You don’t have this position, fully-funded versus pay-as-you-go? Pay-as- you-go assumes that the company’s going to be around forever. Is that what you’re telling me?

Hon. Mr. Grossman: The commission policy is that all pensions must be pre-funded, except for those which are required for escalated benefits for already retired persons, which are pay-as-you-go.

Mr. Peterson: You used the word “pre-funded.” Is that the same as fully-funded?

Hon. Mr. Grossman: No.

Mr. Peterson: Just explain that to me.

Hon. Mr. Grossman: Pre-funded would require that there must be a cash flow sufficient to amortize that liability over 15 years, no more, that would be pre-funded.

Mr. Peterson: The perpetual operation of that company? That assumes that company, or whoever, is going to be in existence for another 15 years. If they go under it doesn’t necessarily mean that the fund will be financially viable. Are you making any moves towards a fully-funded kind of proposition for private plans?

Hon. Mr. Grossman: Yes, that’s what we’re aiming for. It’s pretty tough to do, as was pointed out.

Mr. Peterson: That philosophy doesn’t necessarily square with the public plan -- for example teachers’ superannuation, in which the contribution is now something like 21 per cent, one-fifth of the total salary cost. How do you justify those two widely divergent views?

Hon. Mr. Grossman: The answer is yes, there is a difference there. Some plans are funded in the fashion we’ve just talked about. The teachers’ superannuation fund follows the same principle.

Item 2 agreed to.

The House recessed at 6 p.m.