Journal des débats 1982-déc-20 | Assemblée législative de l'Ontario

Mr. Laughren: Mr. Speaker, on a point of privilege: I would have hoped that the Minister of Natural Resources (Mr. Pope) would have been in his seat when I raised this matter. However I draw it to your attention because I believe that our privileges are being abused under the standing orders of this assembly in that the Ministry of Natural Resources promised to provide answers to five questions by December 17.

I know, Mr. Speaker -- and I know that you know -- the questions are acutely embarrassing to the minister, but surely that is no reason for him to avoid answering those questions according to the deadline of the standing orders.

Mr. Speaker: I call the member to order. That is not a point of privilege, as you know full well. However I am sure the honourable minister or his staff will take note of your request and abide by it.

Mr. Laughren: I am sorry. Was that not a point of order, at least?

Mr. Speaker: Order, please. No, there is nothing out of order.

Mr. Martel: You have to answer by a certain time, according to the rules.

Mr. Speaker: Perhaps if the honourable member would raise the topic at the appropriate time with the appropriate person he would get the appropriate answer.

ORAL QUESTIONS

Mr. Peterson: Since the Treasurer just walked in, I gather he is finished showing his new car to everybody. I trust he had a nice time, I trust everybody is impressed with his conspicuous consumption on the matter and I trust he will enjoy his new car. Could he say if the taxpayers are buying it or is he personally buying it?

Mr. Speaker: The Treasurer?

Hon. F. S. Miller: I am.

Mr. Peterson: That's a refreshing milestone for this government, Mr. Speaker. They are paying for their own cars. I think we owe the Treasurer great commendation for that.

Mr. Speaker: Was that your first question?

HOUSING PROGRAMS

Mr. Peterson: Mr. Speaker, I have a question for the Treasurer. The Treasurer will be aware, no doubt, that on January 29, 1981, his colleague the Minister of Municipal Affairs and Housing (Mr. Bennett) announced a program of interest-free loans to stimulate rental housing construction. A major reason for the program at that time was the low vacancy rates in many cities across this province. Perhaps more important were the employment benefits from such a program.

He will be aware, I am sure, that at the time the 1981 program was announced the vacancy rates in most cities in the province were indeed higher than they are today. In Hamilton, for example, it was 1.3 per cent for private rental units; it is now 0.6 per cent. In Oshawa it has gone from 2.4 per cent to 0.5 per cent. In Ottawa it has gone from 3.5 per cent to 0.2 per cent, in Thunder Bay from 0.1 per cent to 0.6 per cent, in Brantford from 4.4 per cent vacancy to 1.9 per cent and in Sarnia from 8.2 per cent to 1.4 per cent. At the same time unemployment has skyrocketed in every municipality in this province, increasing in total from 6.5 per cent to 12.4 per cent -- virtually 564,000 people are out of work.

Given the trends in both vacancy rates and unemployment, and given his comments about his meeting in Ottawa last week, would the Treasurer not agree the economy needs stimulation at this time and that there is no more efficient way to stimulate than by encouraging the building of rental housing? And would he not agree we need a massive program now to encourage the building of rental housing in this province?

Hon. F. S. Miller: Mr. Speaker, I would not agree when the Leader of the Opposition says we should stimulate rental housing specifically, but I do agree we should stimulate housing in general; there will be needs on both sides. I pointed out to him the other day -- I think it was Friday morning -- that we have been quite successful in stimulating purchases of houses this year, and that had a secondary effect of making more units available in the rental market.

That is the route we have chosen to take at present. However there are, as my colleague the Minister of Municipal Affairs and Housing will tell him, a good number of programs in the federal and provincial fields. Some of them overlap and some make people like him and me a bit confused because we are not up to date on every one of them.

I for one would like to see a degree of rationality, and I am sure my colleague supports that, I hope he would support that. I hope we would see a degree of co-operation between the federal and the provincial governments over the next few months as it relates to the housing market in general.

Mr. Peterson: Mr. Speaker, I think we are all in favour of co-operation, but surely even with the programs he heralds, the building of homes in this province, we still have record low vacancy rates. We have a crisis on our hands in vacancy rates, and at the same time we have massive unemployment. I am sure the Treasurer would agree that in spite of the programs he talks about every day the results are not nearly what he or I would want.

Would he not agree we could, probably as efficiently as any other way possible, create jobs through encouraging the building of rental housing? I suggest, for example, that through the expenditure of about $150 million we could build 15,000 units and provide 26,000 person-years of employment in this province.

2:10 p.m.

That 26,000 person-years of employment is more than double the total created by the government's more costly $171 million short-term job creation program introduced in the May budget, and it is about 70 per cent more than the employment expected to be generated by the $150 million in new job creation funds committed last month.

To this end, would the Treasurer not agree we could take the emphasis off short-term, make-work projects and build something that would be worth while, with lasting benefits for this province if he put his major emphasis on the building of rental housing? Surely the economics of that, which I presume he is aware of, would make much more sense than what he is doing.

Hon. F. S. Miller: I feel my colleague the Minister of Municipal Affairs and Housing is in a better position to answer some of the specifics. I am amazed, after listening to the member talk about rental housing for the past few months, that anyone is left in this province with enough confidence to build after hearing him.

Mr. Rae: Mr. Speaker, I do not like to see the buck passed between the Minister of Municipal Affairs and Housing and the Treasurer on these questions. I would like to get an answer to the simple question I asked the Minister of Municipal Affairs and Housing last week. I asked it again on Friday and I am going to ask it of the Treasurer today.

Money for two programs announced by the Minister of Municipal Affairs and Housing has not been allocated by the Treasurer. Can he please tell us when he plans to allocate that money and why has it not been done up until now?

Hon. F. S. Miller: Mr. Speaker, my answer the other day is still the answer I give today. I will have to wait until the allocations are made. The minister of the day will make the announcement.

Mr. Peterson: As Treasurer, he presumably still controls the purse strings in this province, although that may be uncertain. At least he is empowered to speak with his federal colleagues on behalf of the members of the government. Does he believe there are items of higher priority than the building of rental housing in this province?

Recognizing the economic spinoff effect of building rental housing, realizing that he can pyramid that money in conjunction with the private sector, and recognizing that it will not build without that help, why would the Treasurer not take that upon himself now, and not in his next budget in March, April, May or June, to build and meet two of the most urgent social crises we have in this province right now?

Hon. F. S. Miller: Mr. Speaker, I will redirect that to my colleague the Minister of Municipal Affairs and Housing.

Hon. Mr. Bennett: Mr. Speaker, I have said in this House on several occasions that this government in 1981 had the Ontario rental construction loan program and it stimulated the building of something like 16,700 units across the province. I thought it was an effective and positive program both for employment and for the provision of housing both in the rental supply program and in the rent-geared-to-income program.

This government and this ministry were fully appreciative of the fact there was a rental shortage in Ontario in 1982. We were proposing to continue with the rental construction loan program. Indeed, back in the time of Mr. Cosgrove we had discussed with the federal government its participation to make the program more effective and to stimulate the field of supply.

That goes back to January of the current year. At that time we were invited very nicely by the federal government to remove ourselves from the rental supply program in Ontario. The federal government was not prepared to participate with us but it was going to bring on stream -- and it did -- the Canada rental supply program. It was calling for proposals by the development industry for that, not only in this province but across Canada.

It indicated to us at that time it was going to supply 10,000 new units in the economy of Ontario under the rental supply program via CRSP. At this moment I doubt very much if it will surpass 6,000 in Ontario. I have not been able to get an up-to-date figure from it other than that back about 60 days ago some 3,700 odd units had been taken up in Ontario. It was then trying to indicate it would likely achieve 10,000 but it had nothing to verify that position.

I want to make it clear to the Liberal leader that the federal government took the responsibility in 1982 to stimulate the rental program. We went the other direction in this province by bringing in the renter-buy program to try to stimulate people to buy their own homes and to move out of rental accommodation into that ownership. Some 11,500 units have already moved as a result of the renter-buy program, 50 per cent of them as a result of moving from rental positions into ownership. That was our participation with the federal government in trying to free up a number of rental units as well as to supply new units in the marketplace.

Mr. Peterson: Mr. Speaker, I have a question for the Minister of Consumer and Commercial Relations (Mr. Elgie). I am prepared to hold it, or perhaps he is having coffee in the back room. Is he within earshot?

Hon. Mr. Davis: I will find out. The member could try a third question.

Mr. Peterson: It is a very important question as we come down to the end of the session. I would like to have an opportunity to discuss it with the minister. If he will be here shortly, I will put it down. May I put it down for a moment, Mr. Speaker?

Mr. Speaker: Is that agreeable with the New Democratic Party? The member for York South.

SHELTER ALLOWANCES

Mr. Rae: My question is to the Minister of Community and Social Services, It concerns some of the answers he gave on Friday with respect to the report on wife battering from the standing committee on social development.

My understanding from the answer the minister gave on Friday is that he has rejected the recommendations from the committee that there be special legislation dealing with the whole problem of wife battering. I understand he also has rejected the recommendation with respect to block funding. Can the minister confirm it is true that he and his ministry have rejected those proposals?

Can he also tell us how he is responding to recommendations that his ministry should establish a 24-hour, toll-free multilingual counselling line for battered women? How does he feel about the recommendation that shelters should be established for francophone immigrants and native women by initiating cross-cultural training for their staff and by hiring bilingual workers?

Hon. Mr. Drea: Mr. Speaker, if the leader had paid attention on Friday, I think he would have had an idea. In the first place, I said very specifically on Friday, "no." Second, I said very specifically two days before, "no," In fact, some weeks before, when one of his members asked the same question about block funding, the answer was "no."

As to the other matters, I pointed out Friday we had sent a letter to all municipal welfare departments asking them how they would handle this type of case. I indicated on Friday the answers to that would be back before March 31, 1983. Based on that response, we will take a look at the items in the report as they bear on very specialized groups -- particularly the language problem, the immigrant problem, the francophone question and, especially in the north, the native population. I thought I made that quite clear on Friday and earlier.

Mr. Rae: I wonder how the minister can persist in his refusal to listen to the work of a completely nonpartisan and all-party committee with respect to this matter. I think particularly of a survey conducted by his own ministry. As I understand it, hostel operators were asked to express any concerns they had that they felt were relevant to the administration, operating or funding of their hostel.

Of 21 who were surveyed, 16 operators felt that funding was inadequate and that more revenue was required to cover basic operational costs, to hire more staff, to facilitate better service and to adequately reflect the totality of services which were already being offered. They also had concerns about the limit on the permitted length of stay and the lack of community resources, such as affordable housing and day care.

How can he persist in the refusal to have legislation which covers all these problems and which deals with these problems as a whole when a survey conducted by his own ministry finds that the operators of hostels feel these things have to be done?

Hon. Mr. Drea: That survey very simply asked people what their problems were. It was turned over to the committee and has never really been looked at in terms of what might be done in a particular community or what innovations might be brought in. It was put there purely for the information of the committee.

2:20 p.m.

While I am on my feet, and since I may be the only one who has read this report, may I read something on page 27 that may help the leader of the third party before he asks me another question? It reads:

"...the victim of wife abuse may feel compelled to leave her home, her belongings, and sometimes her children. The inequitable nature of this decision raises the question: 'Why is the husband not removed so that the victim and her children may remain in the house?' As discussed earlier, the police are very reluctant to lay charges. (The London Police Force is an exception.) Even when charges are laid, the accused need not be arrested and placed in custody. Peace bonds, restraining orders and orders for exclusive possession of the family home all require court proceedings. Meanwhile, the batterer is free to live in the house."

I suggest the honourable leader read that one before he accuses me of not reading the report.

Mr. Peterson: Mr. Speaker, it appears the minister's whole approach to this matter is just to get tough with the batterer. Presumably that would involve the compliance of the police.

The minister is aware of the recommendation in the committee report with respect to assisting women to lay informations. He is aware of the Ontario Status of Women Council report which also says the victim should be allowed to lay an information with the investigating police officer.

Why is it the Solicitor General (Mr. G. W. Taylor) would not issue those instructions to the police? Why is it he, through the agency of the police, is not being particularly co-operative in that way? In fact the response to that recommendation of the Ontario Status of Women Council was to say the laying of an information with an investigating officer is not legally feasible, when most authorities believe it is and would go a long way towards solving this problem. Why are the minister and the Solicitor General talking out of different sides of their collective mouths?

Hon. Mr. Drea: Mr. Speaker, I draw the attention of the Leader of the Opposition to the fact that the Attorney General (Mr. McMurtry) of the province has directed the crown attorneys to do precisely that.

Mr. Peterson: The police, not the crown attorneys. It is the police I am talking about.

Hon. Mr. Drea: The police get their advice from the crown attorney. I would have thought the member, a solicitor, would know that, without a nonsolicitor like myself pointing it out.

To clarify the record, I am not confining anything I am doing or have been doing to getting tough with the batterer. I think that is very essential. We have put out directives. I am particularly concerned about the women in the smaller communities. We have moved to raise the per diem. We have facilitated the coming on stream of a number of new houses in conjunction with the federal government, which has been very co-operative.

There are other items in this report which I guess people have not noticed, unfortunately -- acquainting professionals and an awareness campaign. I have pointed out that each one of my area offices right across the province has money to sponsor the kind of workshop and seminar that is hinted at in this report over the winter. We have been doing a rather large number of things while the committee was pondering the matter.

Since the committee was fair enough to share various draft reports through the media with me, we have been proceeding right along.

Mr. Rae: Mr. Speaker, the minister read into the record the first paragraph on page 27, under the heading, "Need for shelter." I ask him to read the second paragraph, because it emphasizes the importance of providing for these transitional shelters. It says:

"A transition home can meet the victim's immediate need for safety. This need might be satisfied by other accommodation; however, many victims are financially dependent on their husbands and cannot afford alternative housing. The shelter allows the woman to re-establish herself with her children and then apply for some kind of public assistance, if she is unable to find work."

Would the minister comment on the fact that in Kapuskasing, for example, the closest interval house until January will be in Sault Ste. Marie, which is an eight-hour drive? Can he also comment on the fact that a new house is being opened in Kapuskasing with nine rooms on January 15, and the funding is as follows: the federal winter works program is $34,000, the children's aid society is providing for one salary and the day care initiative grant is providing for $7,000.

No capital funding is coming from the Ministry of Community and Social Services. I would like to ask the minister how he can justify a group in Kapuskasing having to go hither and yon and having to rely on various benefactors in order to provide for a nine-room home? Why does the Ministry of Community and Social Services not take on that responsibility and guarantee funding so people are not constantly wondering whether there is going to be a centre next month or the month after?

Hon. Mr. Drea: Mr. Speaker, first of all if the honourable member had listened to me on Friday, I pointed out the problem with transporting people rather long distances. I do not condone it at all. That is why in each and every part of the province that directive went out as to how they would provide locally so that no one would have to be moved hither and yon.

Second, with respect to the second paragraph, I could have read that just as well. No government has put more of the interval houses on stream than this one, and the member knows it.

With respect to the funding, it is my view that setting up legislation to guarantee funding is an extremely dubious proposition. No provincial statute I know of guarantees capital funding to any class or kind, and that includes the public school system.

The thing the member has left out is that from day one on which the north Cochrane welfare board in the case in Kapuskasing will be paying, there will be 50 per cent reimbursement from the federal government, 30 per cent from the province -- 80 per cent from the two levels -- and 20 per cent from themselves under the hostel agreement. It is our view that our role starts once the particular house is established.

In my own riding there is a new house coming on stream in January. Canada Mortgage and Housing Corp. provided the funds for acquisition and for renovations. The day the Emily Stowe House starts this ministry and Metropolitan Toronto will be paying the operating costs.

ENVIRONMENTAL ASSESSMENT ADVISORY COMMITTEE

Mr. Rae: Mr. Speaker, my second question is for the Premier. It concerns environmental assessment and the exceptions to the Environmental Assessment Act.

The Premier will be aware of a considerable controversy that has arisen as a result of the statement he made on December 7 to the Conservation Council of Ontario with respect to the environmental assessment advisory committee. It was significantly at variance, to put it politely, with a commitment that was made in writing by the Minister of the Environment (Mr. Norton) to the same conservation council, and I am sure the Premier is aware of this very real difference. He stated that the environmental assessment advisory committee would hear only those requests that were submitted to it by the government with respect to exemptions whereas the minister made it clear he was referring to any person being allowed to refer a matter to this committee.

I wonder if the Premier can tell us why the commitment made by the Minister of the Environment was broken, and exactly when and under what terms this committee will be working when it is established.

2:30 p.m.

Hon. Mr. Davis: Mr. Speaker, perhaps there is some modest degree of misunderstanding. I assume the leader of the New Democratic Party is referring to some notes that were provided for me at the council's anniversary luncheon. The reality, and I am only going by memory, is that I totally ignored the notes, as I do on occasion. I think he will find I did not say what he suggested I said to the council.

I am not being critical of that in any way. It is just that in reality I did not say what he suggested I said. I did say we were going to move ahead with the appointment. I said that it was our responsibility to make the appointments and that we would be in touch with the council in relation to the membership. I did not say some of the things the honourable member has quoted me as saying.

Mr. Rae: The Premier will know that the notes for his speech were widely distributed and that they somehow, miraculously, made their way to my office. From what I can tell, it was a public text, which was widely distributed. If the Premier is saying that is not what he said, then he is reneging on something the minister said in this House the other day. The minister said it was the new policy of the government.

Let me ask the Premier quite simply to state, in as few words as is humanly possible for the Premier, the policy of the government with respect to this environmental assessment advisory committee. Will that committee be hearing requests to consider exemptions and nonexemptions from any person, or will it be responding only to requests from the government? It is a relatively simple question. Can the Premier please give us an answer?

Hon. Mr. Davis: It is not so simple to expect me to respond to that in short order. I recall that visit very well, because I have known many members of the council for some years. The president emeritus used to be the planning director in what used to be Toronto township, Max Bacon, a very good friend --

Mr. Peterson: Who else is on it? Tell us who else.

Hon. Mr. Davis: Mrs. MacMillan was there. Mrs. MacMillan and I had a little fun with the member for Halton-Burlington (Mr. J. A. Reed), because I indicated to the council how we were continuing to support the escarpment and that the member for Halton-Burlington might do the conservation council a great service by going back to his caucus and persuading two or three members of the Liberal caucus who were unalterably opposed to the escarpment. I was doing my best to interject a degree of --

Mr. Speaker: Will the Premier address the question, please?

Hon. Mr. Davis: This is very important to my presentation, because it was not included in the text. I do not know whether the text said to check against delivery. Did it say that on the front? The member has the text there. He knows whether it says to check against delivery.

Mr. Rae: I have an excerpt from it.

Hon. Mr. Davis: Oh, I see. Is that an executive summary? Anyway, I did not deliver it.

Mr. Foulds: Send us over the delivery as well.

Hon. Mr. Davis: I was just going to tell the House all the things I said to the council. I pointed out, and the former president of the council made a very good presentation himself, the need to make sure that the process did not inhibit the necessity to make decisions. We got into a discussion on how input should be made, etc. I said the ultimate responsibility had to be that of government; we wanted input, etc., but we had to have some way of coming to a conclusion. Whatever the minister conveyed to the member as to government policy I certainly would not dispute.

Mr. Elston: Mr. Speaker, we were advised by the Minister of the Environment, when this question was last asked, that it would be impossible to give notice of all the environmental assessment applications to the committee in any event. Can the Premier tell the House how the citizens of Ontario are to determine whether the government uses this committee in any way at all, since there is no way of telling which sorts of environmental assessment projects will be referred to them? Can he tell us that today?

Hon. Mr. Davis: Mr. Speaker, I can give my own view on it, but I think that would be a more appropriate question to address to the Minister of the Environment.

Mr. Rae: This is a serious matter in its own way. I am sure the Premier will appreciate that there is a widespread feeling in the province that this government, by executive fiat, is in effect repealing the Environmental Assessment Act because of the number of exemptions that have been granted and the fact that, by cabinet order, the whole purpose and the whole purview of the act are being completely ignored by the government.

In that regard, I want to ask the Premier whether he can give us his unqualified assurance today that there will be no permanent exemption granted to the Ministry of Natural Resources with respect to the crown lands that are under its jurisdiction, a problem that the Premier will know has to be determined right away. Can he give us that assurance that there will be no permanent exemption given to the Ministry of Natural Resources?

Hon. Mr. Davis: I think the member is attempting to oversimplify the issue. I do not think he really expects me to give an unqualified commitment on a matter that is so complex.

I should point out to the member -- because in his preamble he suggested the government was trying to erode the act -- one point I did make to the conservation council, which I think they understood and agreed with. I said very simply to them, and they applauded me vigorously, that while we may have some differing points of view on these issues some days, in terms of the record of accomplishment in this province in the field of the environment there is not a province in Canada or a state in the union that has done as much in terms of conservation as has Ontario, whether it is water quality, air quality or conservation authorities -- you name it, we have done it.

Mr. Laughren: On a point of order, Mr. Speaker: Ordinarily I would not interrupt the proceedings at this time with a point of order, but it does relate somewhat to what has been going on between my leader and the Premier.

Earlier this fall, the Minister of Natural Resources (Mr. Pope) had some questions put to him on the Order Paper. According to standing order 81(d), "The minister shall answer such written questions within 14 days unless he indicates that he needs more time." More time was indicated; at that time the minister assumed the House would be adjourning on December 17 and indicated that was when the response would be ready.

The response still is not ready, and it is now December 20. Obviously the standing orders are being ignored in this case, because this is December 20. The reason I raise it now is that it has to do with some of the conditions that were put to the Ministry of Natural Resources when it was granted its continuing exemption to the Environmental Assessment Act back in March 1982.

I ask you, Mr. Speaker, to tell me how it is that the minister can flout the standing orders in such a way?

Mr. Speaker: I thought I had answered that earlier; but you are quite right, the standing order does provide for that. However, the standing order does not provide, nor is there any provision in the standing orders to provide the Speaker with any punitive power to force any minister to answer a question. The best I can do is what I did before, bring it to his attention and let him know of your concern -- which you have already done -- that the question has not been answered and you are still expecting an answer in compliance with the standing orders. Undoubtedly the minister and his staff have heard this and will react very quickly to your request.

MORTGAGE PRACTICES

Mr. Peterson: Mr. Speaker, I have a question for the Minister of Consumer and Commercial Relations, who will be aware that almost daily in the past two or three months, we have had a discussion of the various trust companies and other companies involved in the so-called Cadillac Fairview, Greymac, Kilderkin, numbered companies series of transactions.

The minister now has appointed the Morrison inquiry to look into Seaway Trust, Greymac Trust, Crown Trust and Greymac Mortgage, and subsequently, at least in our judgement, widened it to look at not just that series of transactions but all the transactions of those various companies over a long period of time.

I want to ask the minister why it has taken him between six months and two years to look into some of these transactions we have brought to his attention. He is aware that it is the responsibility of his ministry to look into these transactions on a yearly basis. Why has he responded to some of these questionable transactions only some two years after the fact?

2:40 p.m.

Hon. Mr. Elgie: Mr. Speaker, let me again reiterate that we have not widened the terms of the Morrison inquiry from the day its terms of reference were signed. Whether the Morrison inquiry will be able to ascertain all the facts the government and the opposition feel are necessary as a result of that inquiry will be something we will have to weigh and evaluate. I have indicated from the start that both I and the government are keeping our options open with respect to a need to broaden that inquiry.

With respect to the second part of the question, having to do with the role of the registrar: he reviews the functioning of trust companies; however, I submit that the kinds of transactions we are seeing now are largely those that have been occurring during the past year. That does not mean we will not find sporadic events that may have occurred at an earlier time, but the registrar and the government have been responding appropriately to situations -- and I do not want to call them anything other than that -- with respect to the practices of a series of companies that, by and large, have been practices that have arisen during the past few months.

Mr. Peterson: The minister is aware that some of the transactions we have brought to his attention are almost two years old. He is also aware that the registrar is required to file an annual report on these companies. Moreover, he has the power to secure an appraisal of properties for which mortgages have been advanced.

Prior to the Cadillac Fairview-Greymac deal, had the registrar alerted the minister with respect to any concerns he had about the companies now subject to the Morrison inquiry? Had he conducted an inspection of the books of these companies or did he request an appraisal of any of their assets?

Hon. Mr. Elgie: From time to time, the registrar and the deputy discuss a great number of matters with me. I cannot recall exactly whether any of them were related to those particular companies, nor do I have information at my fingertips as to whether the registrar in his role has periodically asked for appraisals or any other material. However, I can assure the member that I have the greatest confidence in the registrar.

In my view, the kinds of transactions which we are seeing and about which we all have some concern are, by and large, ones that have been taking place in the past few months.

Mr. Peterson: To repeat: that is not the case, as the minister is aware from what we have pointed out to him in the past.

Will the minister not agree that there is some concern over the capacity of the regulators in his ministry, given some of the other problems we have experienced with loan and trust companies in this province over the past little while? In fact, the minister's regulators should have been more scrupulous in looking into every single detail of some of these transactions. In fact, some of these companies sent signals to the minister up to two years ago that he should have been looking very closely at their books. Indeed, Mr. Morrison's inquiry may be too late to tell the minister all the things he should have learned a year to two years ago.

Hon. Mr. Elgie: All I can add is that it is still my belief that the transactions the member is referring to are, by and large, those that have occurred in the past few months. That does not mean there will not be sporadic transactions that will appear on the record.

Let me just confirm the fact that the registrar takes his obligations very seriously. The member knows that is so, coming as he does from London, where one trust company was merged with another as a result of some investigations he had been carrying out in relation to that trust company. The member is well aware of the facts and of the interest and concern the registrar has about the role of trust companies and the fiduciary responsibilities that rest upon them in their dealings with the public.

DRESSER CANADA

Hon. Mr. Ramsay: Mr. Speaker, on November 2, 1982, the member for Sudbury East (Mr. Martel) raised the matter of Dresser Canada. He questioned why the ministry failed to enforce the act and prosecute the employer for failure to provide the joint health and safety committee with the required notice of accidents.

The honourable member implied that the ministry failed to take action when it first became aware of the problem. In fact, the ministry issued an order to the company to correct the matter the first time the inspector became aware of it. I am pleased to note that the employer now provides these notices to the joint committee. As the company has complied with the order and amended its practice, the ministry does not propose to initiate a prosecution.

The member also commented on the state of employer and worker relations at the company. There have been health and safety problems at this company, and the ministry has taken special steps to work with the employer, the workers and their representatives in addressing these health and safety matters. I am advised that this has resulted in a more positive approach to occupational health and safety at the company. I am hopeful that further advances can be made.

The final question raised concerns and allegations of intimidation of workers by the employer. Three cases were used as illustrations, and my officials have investigated them. In one instance, they advise me the workers who had been dealt with unjustly had exercised their rights under section 24 of the act. The matter was settled to the workers' satisfaction prior to the arbitration case being heard.

In the second instance, the company realized that it acted unjustly and contrary to the law when it sent a worker home for refusing to work in an unsafe condition. The worker has been compensated for his lost time. The third case of refusal to work was resolved internally and without ministry involvement.

I have a detailed summary totalling several pages of all the points that were raised and the ensuing events. I will send it over to the member for Sudbury East, the member for Hamilton East (Mr. Mackenzie) and the critic for the Liberal Party.

Mr. Martel: Mr. Speaker, with respect to the intimidation, it took the involvement of the ministry and the trade union movement to get those conditions altered. Does the minister not realize that if there is no union involved, there is no way, even financially, that workers can take this matter unto themselves to get the situation rectified?

When there is intimidation, which is a clear violation, does the minister not believe it is absolutely essential for industry to know that the ministry is going to use section 24 and lay charges so that people understand they have the right to refuse unsafe conditions? Otherwise, they will not make use of that section of the act and the act then becomes useless.

Hon. Mr. Ramsay: As I indicated a moment ago, I have just sent a detailed report to the member which I think addresses the matters he has raised. If he has any questions after he has read that report, perhaps he can talk to me personally.

INDIAN BAND AGREEMENT

Mr. T. P. Reid: Mr. Speaker, I have a question for the Provincial Secretary for Resources Development with regard to an agreement that I understand he and the Minister of Natural Resources (Mr. Pope) signed with some of the Indian bands and organizations on Friday. I am shocked that neither the minister nor the secretary made a statement in the House regarding this signed agreement.

Can the provincial secretary explain what was in the agreement? Can he table background studies and the work that went into it? Can he explain how it is going to affect the people who live in northern Ontario? Can he explain why the federal government, which I understand was supposed to be a signatory to this agreement, backed out virtually at the last minute?

Can he further explain why no one in the province, except the two parties, the government and the Indian bands, knew anything about this matter until Claire Hoy's column in the Toronto Sun on Thursday?

2:50 p.m.

Hon. Mr. Henderson: Mr. Speaker, the Minister of Natural Resources and the Provincial Secretary for Resources Development did go to Ottawa last Friday. We met with the five native organizations. The federal ministers Mr. Munro and Mr. De Bané were there.

There was an agreement that we would sign the agreement that had been worked out over several months. Our Minister of Natural Resources was the individual who was in the negotiations for Ontario.

To go into detail and to explain the overall situation, the document has 22 pages. There are 10 articles in the document. It makes harvest fishing for the native people a possibility. It is going to remove a great deal of the conflict that has existed between the conservation officers and the native people in Ontario.

Only the government of Canada can tell the member why it did not sign. It sent our Minister of Natural Resources a telegram last Thursday. This was not sprung on it overnight; it had known about it for several weeks, and it had been party to the negotiations. I am going to let the Minister of Natural Resources explain what happened at some of those negotiations.

Our Minister of Natural Resources got a telegram last Thursday from the government of Canada pointing out that possibly we were overstepping our authority as a province in signing this agreement. When our Minister of Natural Resources suggested to the federal ministers who were there that they point out to him where he was acting beyond his power, no one was able to answer his question.

There were some red faces in the government of Canada. One minister asked whether any of his legal people, the people who put the telegram together, were there and it was surprising that there was none there. With all the staff and all the resources they had, there was nobody there who could answer why he put that in the telegram.

Mr. Speaker, if it is your wish that we go through this 10-article agreement part by part, I ask for your consent to have the Minister of Natural Resources adding some comments to my remarks.

Mr. T. P. Reid: I will ask that the agreement be tabled. I can say that the people in northern Ontario are shocked about this. I know it has caused quite a division in the cabinet, amongst other things, but maybe I can redirect to the Minister of Natural Resources and ask him how he justifies doing this at this time. How can he justify the secrecy that surrounded this, given its impact on everyone who lives in northern Ontario?

Does he not believe that, in regard to all his public protestations about public input into the strategic land use plan and his Royal Commission on the Northern Environment, he is making a mockery and a farce of them? The people in northern Ontario feel betrayed by him and the Conservative cabinet for a decision that they know nothing about in terms of the zoning of lakes in northern Ontario after all this public input on strategic land use planning.

Hon. Mr. Pope: Mr. Speaker, it is not true that no one was aware negotiations were taking place. It is not true that no one was aware of the contents of the negotiations during the course of them.

I indicated at a forum which members of the New Democratic Party attended last week that in August some of the interest groups had been advised by me directly and personally that a process of negotiations was taking place to settle the dispute between the Indian people and the governments of Ontario and Canada with respect to fishing rights. We had indications in this House on two different occasions that negotiations were taking place.

Mr. T. P. Reid: You were not talking about zoning.

Hon. Mr. Pope: If the honourable member will check Hansard, he will see that there were negotiations taking place in the context of Moraviantown and a number of other issues with respect to fishing rights.

The Northern Ontario Tourist Outfitters Association was advised in August, as was the Ontario Federation of Anglers and Hunters, that it was taking place. It was the subject matter of negotiations at the NOTOA annual convention in Thunder Bay. Four to five weeks ago, they were briefed for half an hour by myself as to the principles involved. Their help was solicited with respect to the possible zoning problems. They provided maps to the Ministry of Natural Resources, which have been helpful to us in terms of the West Patricia area.

The Indian chiefs did get together and make a zoning submission on the West Patricia area, and we had a response on behalf of the government of Ontario that took into account the concerns of the northern Ontario tourist outfitters. So it is not true that there was no discussion or input before or during the negotiations.

The federal government, which was a party to these negotiations since it agreed to enter into them last December and which was supposed to have its staff and its ministry attending all the meetings, was aware at all times of the contents and principles of the negotiations and of the proposed agreement.

The day before the signing of the proposed agreement, the Liberal government in Ottawa sends me a telex saying that what I was doing was against the Constitution and contrary to my delegated authority. The same federal government knew when it entered into these negotiations that they would have an impact on constitutional aboriginal matters. They knew that and nevertheless they wanted on an interim basis to resolve the conflicts between the federal government, the provincial government and the Indian representatives.

Not one representative of the federal government could tell me to my face what was unconstitutional with what we were agreeing on and why they had not brought it up earlier -- not one of them. The fact of the matter is that at a press conference later, Mr. Munro volunteered the information that perhaps there was some problem with subdelegation with respect to zones.

It is funny how an Ontario agreement with respect to Indian fishing rights is unconstitutional when the same zoning principles have been used in the James Bay settlement agreement with Quebec and that was perfectly constitutional. It is funny how a government that wants to delegate powers to a province and the province that receives the powers delegated to it cannot agree to change the conditions of that delegation.

Their excuses were phoney excuses. They were phoney because they were not ready; they had not done their homework and they were not ready to sign that agreement. As the Provincial Secretary for Resources Development was saying, they were embarrassed and they ended up agreeing that they would have detailed negotiations within 14 days to reach amicable agreement. But they were aware all the way through the piece of what the principles were. I will file the agreement for the House.

I want to turn to the principles and whether something is changing or something is new, whether something underhanded is going on for the people in northern Ontario. First of all, this is a province-wide agreement; it is not a northwestern Ontario agreement or a northern Ontario agreement but a province-wide agreement. It has as much impact in my part of the province as it does in the honourable member's. It has as much impact upon the Provincial Secretary for Resources Development as it does for the member.

I submit that the principles of the agreement do not remove ultimate control and authority from the federal government or the provincial government. If the member traces through the clauses, he will see this as true, because the band can pass bylaws only for its reserve lands. Any application of regulations on waters adjacent to reserve lands has to be by provincial and federal regulation. The band can only make submissions to us, which we must approve and put into regulation; so there is no delegation of authority.

The independent biologist and umpire's decisions are appealable solely to one source, the provincial cabinet. We are not giving away control from that point of view. An independent biologist already has been used to settle quota problems for commercial fishermen. It was used last year in eastern Lake Ontario to set the whitefish quota; we went to an independent biologist to settle our differences. The umpire system is already in place in the game and fish appeal board. They already decide differences between commercial fishermen and us with respect to matters of quota and conditions on licence.

All these matters already exist. The procedures already existed, and all we were doing was trying to adapt them. They are the very legitimate problems that the native people have had throughout Ontario.

Mr. Speaker: Order, please.

Hon. Mr. Pope: This is my last sentence.

Mr. Speaker: Last sentence?

Hon. Mr. Pope: Last sentence.

Mr. Speaker: All right.

Hon. Mr. Pope: The only alternative to signing this agreement is continued court proceedings and battles on constitutional, legal and administrative bases until the constitutional matters are resolved. That could take 10 years. In the meantime, we have instances like Moraviantown. In the meantime, we have the tensions and the misunderstandings on what has already been recognized in 1979 by this government as a right; that is, the right of Indian people to harvest fish for food for personal consumption. The only alternative is a --

Mr. Speaker: That is a very long sentence.

3 p.m.

Mr. Laughren: Mr. Speaker, this is a terribly important issue and I agree with much of what the minister has just said. Is he not concerned about the ground swell of hostility that has occurred, particularly in northwestern Ontario, since that agreement was signed? Can he tell us what he intends to do about that? How is he going to cool things off in northwestern Ontario? How is he going to communicate to the people in the northwest, including the municipal organizations, the principles involved in this agreement so that we do not have continuing rancour between the native people and the rest of Ontario?

Hon. Mr. Pope: Mr. Speaker, I think the native representatives who were there on Friday spoke the same way about explaining the agreement in detail so that this hostility would not be felt. It is true that we met with the Northwestern Ontario Municipal Association on Thursday morning, which had a lot of concern about the agreement and about the minister who negotiated it. However, after a half-hour explanation of the principles of the agreement they started to understand it a little better.

Mr. T. P. Reid: They thought you weren't going to sign it.

Hon. Mr. Pope: On what basis?

Mr. Speaker: Never mind the interjections please.

Mr. T. P. Reid: They came back with the idea that you were not signing it.

Hon. Mr. Pope: On what basis, I do not know. To answer the member's question, the potential of the agreement is worrisome to a couple of groups. The Ontario Federation of Anglers and Hunters has generally supported it, although having some concerns. The potential is worrisome to some people. It is the implementation that is going to be the test. I have already indicated to the Northern Ontario Tourist Outfitters Association, the Ontario Federation of Anglers and Hunters and their municipal representatives, that they would all be involved in consultation before any specific zoning decisions are made and before any of the detailed implementation regulations are passed.

Mr. Di Santo: Mr. Speaker, I would like to ask whether you think some time should be added to question period in view of the fact that we as back-benchers have asked only one question and the last question took the minister more than 15 minutes to answer.

Mr. Speaker: I was told, and honourable members agreed, that this was a very important matter to those members in northern Ontario and I accepted that at face value. I have no power to extend question period. That is a matter for all members to agree on.

Mr. T. P. Reid: Can I speak on that?

Mr. Speaker: No, because it is not a point of order.

Mr. Di Santo: Mr. Speaker, I would like to remind you that you have the power to add time to question period and run the question period.

USE OF DOWNSVIEW LAND

Mr. Di Santo: Mr. Speaker, I have a question for the Minister of Municipal Affairs and Housing. Can the minister tell the House what use his ministry may have for the land that the Ministry of Transportation and Communications has used for the driver examination centre at Highway 401 and Keele Street, in view of attempts by local residents and people in the municipality of North York up to this time to know what will happen to that land?

Hon. Mr. Bennett: Mr. Speaker, in conjunction with the request of that municipality, others and, indeed, many members in this House, to try to get on with providing more rental and ownership accommodation in the Metropolitan Toronto area, at the moment we are exploring the possibilities -- and I want to emphasize the words "exploring the possibilities" -- of finding some way of transferring that land from the Ministry of Transportation and Communications to the Ministry of Municipal Affairs and Housing for the potential purpose of some type of construction to afford people the opportunity of living in this particular area, either in rental or ownership accommodation.

We looked at the land in question because of its proximity to transportation networks and so on in the metropolitan area. I make no apologies that we are trying to explore the use of all the lands we own as a provincial government through our authorities, or by municipalities or other agencies of the public service to try to develop them for residential purposes, whether it be -- and again I want to emphasize this -- rental or ownership purposes.

Mr. Di Santo: Can I ask the minister to clarify it for us, because at this point nobody understands what is happening? In view of the fact that the land does not belong to MTC, as the Minister of Transportation and Communications (Mr. Snow) said last week, but to the Minister of Government Services (Mr. Wiseman) and in view of the fact that the Minister of Municipal Affairs and Housing told me in a letter of November 17 that he is having talks with the mayor of North York and the mayor said he never had any formal talks with the minister; and in view of the fact that the ratepayers' association wrote to the ministry and was unable to get an answer, will the minister tell the House if he is going to have any consultation with the municipality of North York and with the ratepayers' association? Will these be public meetings, so that the designation of that land will be accepted by the residents who have an interest?

Hon. Mr. Bennett: I am rather surprised at whatever remarks have been made by the mayor, because he was in my office not that many weeks ago. It was following the municipal election when I raised the question with him. For a long period prior to that, the staff of my ministry had been talking to the senior people in North York on the potential of using this land for residential development.

If that land is to be transferred and if we are to try to meet the demand, the requests and the constant badgering in this House of meeting supply, even by the member's leader, it will take, as I said last Friday, a concerted effort by this government and its ministries, an understanding and appreciation by the municipalities and, indeed, the municipalities will have to have the appreciation and the understanding of the residents of their particular municipality. If we happen to take over the land for housing purposes, we would go through the same process of requiring zoning changes to accommodate the type of construction as any other person owning that land.

I want to emphasize again to this House -- and I said it in the estimates, I have repeated it here and repeated it outside in speeches I have made -- that the only way we are going to be successful in trying to satisfy some portion of those in the rental field and in the ownership field is by utilizing lands that are owned by the public purse, either federally, provincially or municipally, and in a way which will serve the market best.

It can only be done, and I have said this very clearly and distinctly, providing there is a full appreciation by the citizens in the various jurisdictions and in the various municipalities of this province. It will not be successfully carried out by the Minister of Municipal Affairs and Housing nor by the municipality; it will be by an understanding and an appreciation by the citizens of this province for the needs of others in the community.

REPORTS

STANDING COMMITTEE ON PUBLIC ACCOUNTS

Mr. T. P. Reid from the standing committee on public accounts presented the committee's report and moved its adoption.

Mr. T. P. Reid: Mr. Speaker, I hope that the assembly will have an opportunity to debate the report of the standing committee on public accounts some time in the spring. I would just like to bring to your attention, sir, that there was a dissenting opinion in this year's report of the three-party committee put in by the New Democrats and the Liberals on the committee. This is the first time this has happened in some time, something that I am not overly happy about, but it indicates some of the problems that arise these days. In any case, I look forward to debating the report and I am sure everyone will find it is required Christmas reading.

On motion by Mr. T. P. Reid, the debate was adjourned.

STANDING COMMITTEE ON ADMINISTRATION OF JUSTICE

Mr. Treleaven from the standing committee on administration of justice presented the following resolutions:

That supply in the following amounts and to defray the expenses of the Ministry of the Attorney General be granted to Her Majesty for the fiscal year ending March 31, 1983:

Law officer of the crown program, $4,932,500; administrative services program, $49,505,000; guardian and trustee services program, $9,092,000; crown legal services program, $25,631,000; legislative counsel services program, $2,084,000; courts administration program, $113,633,000; administrative tribunals program, $13,367,000.

3:10 p.m.

That supply in the following supplementary amount and to defray the expenses of the Ministry of the Attorney General be granted to Her Majesty for the fiscal year ending March 31, 1983:

Law officer of the crown program, $1,000,000.

Mr. Treleaven from the standing committee on administration of justice presented the following report and moved its adoption:

Your committee begs to report the following bill without amendment:

Bill 188, An Act to amend the Assessment Act.

Motion agreed to.

Ordered for third reading.

MOTIONS

COMMITTEE SUBSTITUTIONS

Hon. Mr. Wells moved that Mr. Renwick and Mr. Swart be substituted for Mr. Mackenzie and Mr. Cooke on the standing committee on administration of justice.

Motion agreed to.

Hon. Mr. Wells moved that Mr. Cooke be substituted for Mr. Mackenzie on the select committee on the Ombudsman.

Motion agreed to.

ANSWERS TO QUESTIONS ON NOTICE PAPER AND RESPONSE TO PETITION

Hon. Mr. Wells: Mr. Speaker, I would like to table the answers to questions 283, 284, 288, 289, 290, 291, 293, 301, 312, 502, 503, 504, 505, 548, 593 to 600, 601 to 608, 647 and 681, all of these standing on the Notice Paper, and also the response to a petition presented to the Legislature, sessional paper 283.

Mr. Laughren: On a point of order, Mr. Speaker: Could the House leader tell me where the answers are to questions 652 through 656?

Hon. Mr. Wells: I will be happy to look into that, Mr. Speaker.

Mr. Foulds: On a point of order, Mr. Speaker: I would also like to call the government House leader's attention to the fact that question 535 standing on the Order Paper in my name has not been answered since October 12. It was indicated in the interim answer that the information would be available November 29. We have had a full three weeks since that time.

Mr. Speaker: Before the orders of the day, do we have the consent of the House to revert to petitions?

Agreed to.

PETITION

MUNICIPALITY OF METROPOLITAN TORONTO AMENDMENT BILL

Mr. Bradley: Mr. Speaker, I have some petitions to introduce to the House this afternoon. This petition is addressed to the Lieutenant Governor and the Legislative Assembly of Ontario requesting the honourable members to seek the withdrawal of Bill 127. These have been received at the Ontario Teachers' Federation office. There are 3,411 signatures on the forms I have here today, bringing the total number of signatures to 23,536 on this piece of legislation. I present this to the House. It reads:

"We request the honourable members to seek the withdrawal of Bill 127, An Act to amend the Municipality of Metropolitan Toronto Act."

ORDERS OF THE DAY

House in committee of supply.

ESTIMATES, MINISTRY OF TREASURY AND ECONOMICS

Hon. F. S. Miller: Mr. Chairman, you will understand that since the opposition critics have been so kind as to agree to a reduction in the times from 11 hours to five hours, the fact that my introductory statement is four hours and 50 minutes should not particularly bother them.

The truth is that I really do appreciate the co-operation of both parties and, since I have had opportunity in the last few months to discuss in committee and other places a good many aspects of my ministry's policies, I am going to be here simply to respond to legitimate questions and points of view.

Mr. T. P. Reid: On a point of order, Mr. Chairman: Does that mean we have to restrict ourselves to legitimate questions?

The Acting Chairman (Mr. Dean): Yes, no illegitimacy, please.

Mr. T. P. Reid: Mr. Chairman, I do not intend to be lengthy in my opening comments. I was hoping that the Treasurer, as I know he has on other occasions in the last few days, would tell us about the presumed job creation program that is going to be on a shared basis between the federal government and the Ontario government. There is a lot of concern in all of our communities about the fact that many of these do not seem to be about to take place in what might be called the reasonably near future.

Given the fact that the unemployment statistics have been increasing month by month, the fact that the Treasurer and his colleagues have known about these problems, the fact that the projections over the rest of the winter months are quite grim, and that even the most optimistic have said that while the economy may improve somewhat, they do not expect employment to improve, I would have hoped that the Treasurer would have had more to say today on exactly what he thought was going to happen, where the money was going to be put into these programs and when we could actually see people being taken off either the unemployment rolls or off the welfare rolls and put into some jobs.

Speaking of all of that, while we are doing the Treasurer's estimates --

Interjections.

Mr. T. P. Reid: This is difficult enough without that. For years, the Treasurer of the day, whether this one or one of his predecessors, have been taking credit for all the jobs they have created in the province. We find in the last budget, on page 7, that the Treasurer was putting $171 million into short-term job creation programs to provide something like 31,000 temporary jobs. His predecessors were a little more grandiose. They had a bigger vision than this Treasurer. They used to count them in the hundreds of thousands and millions and billions.

I would like to know from the Treasurer who, if anybody, in his ministry, which is being paid for out of the grateful taxpayers' pockets, is really able to track any of those and say, "We put this money into these kinds of projects and this is what the payoff was." I would like to know if any surveys were done in that regard so that we could give some credence and credibility to these figures that are tossed out so grandly every once in a while by the Treasurer or the Premier (Mr. Davis).

I hope when the Treasurer is responding after the opposition critics' opening remarks, he might deal with some kind of time table and tell us where the jobs are going to be created in Ontario so that we can give some glimmer of hope to those people who are in very dire economic circumstances at the moment.

3:20 p.m.

We have been over a great deal of the matters that fall under these particular estimates, estimates that are going to be spending $2,535,339,500 this year. We realize a lot of that is in regard to the Board of Industrial Leadership and Development program in particular and interest on the provincial debt.

One of the matters I want to discuss briefly with the Treasurer, and I have asked him a number of questions on this over the past two months, is related to productivity. I recall my first question to the Treasurer was, "What are you going to do about productivity, given the fact that Canada's and Ontario's productivity is among the worst in the world?"

I have the headline from the Globe and Mail of about three weeks ago, "Canada is Worst in Productivity, OECD Maintains." I have a whole file here which indicates that productivity in Ontario is abysmal to say the least. I have asked the Treasurer questions. His first response was, "It all has to do with investment, and if we do not have a good climate for investment we will not have the investment and the new money for new machinery; therefore, we will not have any productivity."

I asked him another question last week and he started off on a rather lengthy lecture about what he viewed productivity as, and it certainly showed a better grasp than his first answer did, but he never did get around to saying what exactly the provincial government was going to do about productivity. I would like to hear, during these estimates, exactly what the Treasurer thinks productivity is, how he would define it and what he thinks should be done to improve productivity in Ontario's economy.

I have an article here entitled, "Productivity is the Problem," written by David Crane, economics editor of the Toronto Star. He is talking about a speech given by Jim Brown of Woods Gordon, a management consulting firm. Mr. Brown spoke about poor performance. The article says: "The underlying problem in Canada's economy is our poor productivity performance.

"We do not use our resources, people and their skills, machinery and money, research and innovation, effectively enough. We have poor labour-management relations and too many strikes. We have government rules that discourage competition. Our businessmen are timid about foreign markets. We neglect research and innovation. We do a bad job of developing skilled people. The quality of management in business and government is inadequate."

Mr. Brown goes on to say, and I find this very interesting: "We certainly are not getting the leadership we should from our politicians and industrialists. They seem to be doing everything they can to steer away from the central issue: productivity. We are all experiencing the growing spectre of unemployment but no one is identifying the real cause: competitive weakness in the marketplace." That is what bothers me.

The Treasurer and those people opposite are sitting there, as are our federal friends in Ottawa, expecting that all we have to do is wait for the tip of the upturn in the business cycle and everything will be fine again, everybody will be back to work and we can settle back into the way it was in the late 1960s and early 1970s. It is not going to happen. We have been told time and again, and the minister has the studies from his own ministry, about the structural problems in the Ontario economy.

He has heard ad nauseam about the 40,000 permanent jobs that are lost and are being lost in the auto industry, in the mining and forest industry in northern Ontario and in other sectors of the economy, and yet neither the federal government nor this government here in particular seems to be dealing with that. In all the literature I have read about productivity, that is what it comes down to. The basis of productivity is competition, and if productivity is poor we will not be able to compete, we will not have any markets and there will be continued high unemployment.

The article goes on to say: "Provincial politicians are also to blame, as Brown stresses. We see a stagnation in growth over several years and a downturn trend in productivity in Ontario, the heart of industrial Canada. Yet no provincial minister in a position to attack the central problem appears to be interested in providing vocal and visible leadership."

To whom was he referring there? Who is the number one economic minister in the government of Ontario? For those who are listening so intently, it happens to be the Treasurer. Where has his vocal leadership been coming from? Never mind doing anything in particular, but where has he been leading the parade on this very vital issue?

The article continues: "Productivity, in fact, is the key to a better standard of living. If the country is able to get more production out of the same resources, then it can pay wage increases and invest in better facilities without having to raise prices and cause inflation. Unfortunately, Canada's record is one of the worst in the industrial world, according to the OECD." I quoted some figures to the minister some time ago. Of 12 western democratic nations, including Japan, I believe we were 11th in the productivity parade.

These are not matters that have just occurred. I also recall saying to the Treasurer some time ago that I understood from a very well-informed source that in 1975, I believe, the Premier seriously considered, to the point of approaching people, setting up a productivity board in Ontario. What rules and procedures it would follow, I have no idea. The Premier realized seven years ago this was one of our fundamental problems. He seemed to he prepared at least to get an advisory council together but that idea, along with so many others, was never developed, perhaps because the voters felt there was too much government interference in the economy.

I say to the Treasurer I think that is an idea whose time might have come. I refer him to an article written some time ago in the Globe and Mail in relation to a speech Brian Mulroney gave to some industrial group regarding productivity. He laid out four or five specific areas we could deal with to improve productivity in Canada. He was speaking about Canada, but because we are the industrial heartland, it is so much more important to us here. He suggested a council composed of government, labour and business that might have the power to provide tax credits to those who showed improved productivity, to keep good economic statistics to show those who were not, and to do something about improving labour relations and so on.

Yet we have not heard anything from this Treasurer, or anybody over there, about the long-term solutions to Ontario's economy or even any admission that there are long-term problems. According to them, the problems are simply short term. We are at the bottom of the recession or depression, depending on what one calls it, and when the world economies start buying again, Canada and Ontario will automatically take their rightful places in the world and full employment, however defined, will bloom once again.

3:30 p.m.

I wonder what the Treasurer would consider to be full employment in Ontario. Going back through a number of budgets given by various Treasurers, I noticed they keep using a different set of figures as to what constitutes full employment or what we might consider acceptable unemployment in Ontario. The last time it was done I think the figure was about 4.5 per cent, if I am correct. I wonder what the Treasurer's views would be on that.

In any case, I suppose I could keep reading into the record headlines that I think are frightening: "Record on Labour Costs Second Only to US," showing that our costs in labour may well not be out of line. The article says it found "Canada's productivity record to be abysmal. In fact its record was the worst of all the countries, a point that is made in a number of economic studies and reports."

My file here is obviously not complete, but if the Treasurer is lacking some of this information, I would be glad to send it over to him. It includes an article on a productivity poll that was done by the Canadian Manufacturers' Association, which is not a body that I entirely, or usually, agree with. It was interesting their survey indicated that the man or woman in the street was well aware of what productivity meant and what it meant to his or her future as well. I will just quote from this item:

"A survey done by the Canadian Manufacturers' Association reveals that ordinary Canadians associate better productivity with reducing unemployment, inflation and interest rates and with increasing exports and the standard of living. 'The survey shows,' says the CMA, 'that Canadians are well ahead of our major institutions in their recognition of the problems of productivity.''

A major institution in this context, I would submit, is the government of Ontario. I went through the budget and there is nothing at all in there about productivity. It amazes me that it is a matter which the Treasurer has not dealt with at all. He can use whatever definitions he wants but I hope he would in some serious way suggest what he is doing to improve productivity in Ontario. Would he not consider talking to his colleagues in the cabinet, particularly the Minister of Labour (Mr. Ramsay) and the Minister of Industry and Trade (Mr. Walker) and say, "We have to do something about this problem. Let us call labour and management together, all of us, and do something about this very serious problem"?

It is interesting that those countries which have been very successful relative to Canada and Ontario have had some kind of direction that has come to a large extent from the government, but in co-operation with labour and management. I am sure the Treasurer is tired of having the examples of Japan and West Germany thrown at him, but it seems to me there are some excellent lessons to be learned there. Obviously, we cannot transplant everything that goes on somewhere else, but surely there are some ideas that would be applicable to the Ontario economic scene.

Mr. Chairman, I hope to initiate some dialogue with the Treasurer on the productivity aspect. As well, I hope he will discuss with members the timetable and the number of jobs that are going to be created and where and how, so that we can have some, albeit a very tiny measure, of Christmas cheer to take back to our respective constituencies.

The Deputy Chairman: I call on the member for Windsor-Riverside.

Hon. F. S. Miller: Well, Mr. Chairman --

The Deputy Chairman: Excuse me, I think the Treasurer would like to respond.

Hon. F. S. Miller: Mr. Chairman, I would be glad to answer my friends and will be guided by them as to whether the speakers wish me to respond.

Mr. Cooke: Wait until I finish.

Hon. F. S. Miller: I am quite happy to.

The Deputy Chairman: We have been allowing both and then you respond to them.

Hon. F. S. Miller: Fine.

Mr. Cooke: I do not want to maintain the tension; I would rather get this over with. It is hard enough to psych oneself up three or four days before Christmas to talk about the Treasury estimates after going through three months on Bill 179.

Under the Treasury estimates, I want to make a few comments about the state of Ontario's economy. I would begin by reminding members it was only seven months ago that the Treasurer brought in his budget. One statement in it goes as follows: Because of these factors and actions, the Ontario economy should strengthen during the balance of the year. Employment by year-end should reach 125,000 over current levels. Real growth in the gross provincial product in the second half of 1982 should be four per cent on an annual basis."

Here is another excerpt: "The Ontario government strongly believes that policies for job creation must be an urgent priority." Finally: "Although the Ontario economy has been experiencing a cyclical downturn, the prospects over the next 12 months are more promising. Later this year, a recovery is expected to begin."

In March of this year, unemployment in Ontario was 7.7 per cent or 346,000 people. In April, it had gone up two-tenths of a per cent to 7.9 per cent or 357,000 people. In May, the month in which the budget was brought in, it went to 8.3 per cent or 376,000 people. In June it was up to nine per cent or 407,000 people; in July, 10 per cent or 460,000 people; in August, 10.8 per cent or 489,000 people; in September, 11.1 per cent or 504,000 people; in October, 11.7 per cent. In November, 12.4 per cent or 564,000 people were unemployed in Ontario.

The unemployment statistics supplied by Statistics Canada show about 728,000 people are unemployed in our province. It is an increase of 244,000 if one takes the base figure -- 244,000 people in just over a year. Youth unemployment is 198,000 or 18.6 per cent. Ottawa has 9.3 per cent unemployment, Sudbury has 28.5 per cent, Oshawa 16.5 per cent, Toronto 162,000 people or 9.2 per cent. My own home town has 15.1 per cent; Thunder Bay has 16 per cent. In just seven months the economy of this province, which is supposed to be only in a cyclical downturn according to the budget in May of this year, has entered what can only be described as a very deep recession if not a depression.

We are now seeing the ramifications of that. I would suggest the budget that was brought down in May of this year was completely off base. It completely misjudged how difficult the economic situation was in this province. It should have been replaced as soon as this government came to its senses and understood how deep the recession was.

The ramifications are that welfare case loads have increased dramatically across this province. The statistics we have, supplied I believe by the Ministry of Community and Social Services, show that in October of this year Waterloo's welfare statistics were up 56 per cent to 3,496. Sudbury was up 52 per cent to 2,500 cases. Thunder Bay was up to 689 or a 42 per cent increase. Oshawa was 1,907, up 42 per cent. Metropolitan Toronto had 29,908 general welfare cases, up 38 per cent. Windsor was up 27 per cent and Cornwall was up 27 per cent.

It just goes to show how deep the recession is and how it is now affecting welfare case loads as people are coming off or running out of unemployment benefits. That has very significant ramifications for the property-tax base and the property taxes that will be set over the next number of months.

In my own city, we can see the recession has gotten so bad that no longer are the majority of people applying for welfare in the auto sector, which is the prime employer in our area. In March of this year, 807 nonautomobile sector people applied and qualified for welfare, whereas in that month only 40 were from the automobile industry. That is a trend that has continued all along this year.

3:40 p.m.

Our welfare budget has gone from $5.2 million in 1979 to in excess of $15 million in 1982. That is a 300 per cent increase in just three years.

The plant closure statistics are another indication of the depth of the recession in this province. In October 1981, in the category of reduced operations, there were 1,817 reduced operations. In that same category up to October 1982 there were 5,388 or an increase of 196.5 per cent. Partial closures had actually decreased a bit and in the category of total closures it went from 399 to 563, for an increase of 41.1 per cent. For just January to October of this year, reduced operations were 26,404 which is an increase of 218 per cent. The same types of statistics follow through on the partial closures and the total closures.

With all this data, plus the human misery which is really the bottom line for the economic depression that exists in this province, we get a response from the Treasurer that we need to have confidence in our economy: when consumer confidence comes about the economy will recover. In my opinion, confidence will not be re-established in this province by blind faith in the private sector. It is going to take government initiative. It is going to take leadership from Ontario and from the federal government as well.

There was a Premiers' conference earlier this year, and we heard our Premier comment: "During the past year, we as provincial Premiers have shared a common frustration with the serious lack of leadership demonstrated by our federal government in shaping a national economic recovery." We in opposition also share a common frustration with this government's lack of leadership on the provincial front of establishing and leading us to an economic revival in Ontario.

In interest rates, one of the areas that is key to a recovery, the Treasurer has had more positions than even the provincial Liberals have had on the interest rate question.

As for youth unemployment, the Premier proposed this solution at one of the conferences: "The federal government should increase incentives for the creation of jobs for young people." Whatever that means. There were no specifics, no strategy, just a motherhood statement that we need more jobs for young people. Of course we need more jobs, but how do we go about doing that and what is this government prepared to do to create jobs for young people?

In the auto sector, the Premier has said: "The Canadian government should act with great determination to ensure that Canadian interests are recognized in any settlement of current international trade disputes in auto, steel and agricultural products. A national automotive parts program should be established to enable the auto parts industry to restructure in order to meet the competition of building components for future generations of autos."

What is this government's position on content legislation? Perhaps the Treasurer would put that on the record today. Do they believe the federal government should introduce content legislation that would apply to the Japanese and to the North American market as well?

What is the provincial role in restructuring the auto parts sector? Surely the province that has well over 90 per cent of the auto parts sector has a role to play in restructuring that sector of our economy.

Is the response of this government to the crisis that has existed in the auto sector since late 1978 the establishment of the Ontario Centre for Automotive Parts Technology that was announced several times? Is that the entire response? The auto parts tech centre is fine, but what about the capital that is going to be needed for the Canadian auto parts firms, in order to allow them to take advantage of the new technology we are now aware of and to some degree have access to. It seems this government's response to the economic crisis has simply been Bill 179, which is not an economic strategy by any stretch of the imagination. Bill 179 is a political response to the deep economic crisis that exists.

Job creation programs announced by this government in the last few weeks amount to $150 million until March 1983 and $50 million over the next few months. How is that $50 million going to be used? Maybe the Treasurer can be specific today as to how many jobs that will create over the next few months, how it will be allocated and what projects he is looking at, so we know exactly what we are talking about with that program.

After this government introduced its nine and five program, it waited for a federal lead instead of taking leadership. With the unemployment rate increasing, as it has over the last number of months in such a dramatic way, I do not understand why this government has not played more of a leadership role. Why did it have to wait for the federal government so we did not get a program announced until the beginning of December, which will not create jobs when we need them in the winter when things will be at their worst for 1982-83? Why does it always look to the federal government for leadership?

I would suggest the reason this government does that is because in Ontario the focus is on the federal government. It knows it can escape the political ramifications of nonaction by heaping blame on the federal government.

I read the Treasurer's comments at the finance ministers' meetings last week where he spent the first page or page and a half heaping praise on Mr. Lalonde. I gather the polls the provincial government has taken show it must demonstrate co-operation with the federal government and that is what is required right now. That is why it is trying to demonstrate this co-operation.

I would like to see the government take a more independent role. Sure there is need for co-operation, but there is also a need for this provincial government to take a lead role when the federal government does not act, to quit trying to perpetrate fraud on the people of this province and to indicate to them how deep and difficult is the recession we are now in. We should not try to minimize the difficulty that exists now and we have to respond in kind. That $50 million over the next few months is not a response at all. It is an insult to those who understand how difficult and serious the problems are.

There does not seem to be any recognition by this government of the longer term problems as well. We cannot allow the recession or depression we are now in the midst of ever to occur again in the province. We must begin now to recognize what is causing the problem, what the structural problems are and then take steps to correct those structural problems. Then we would not be so reliant on the American economy and export markets in the future and when there is a world-wide recession we could to some degree -- we can never do it totally -- protect ourselves against the world-wide and particularly the American depression that exists.

Now and in the past the emphasis on growth in Ontario has been on foreign investment. There is a political problem for those parties and individuals that believe foreign investment is one of the deep-seated problems in the economy. If a branch plant wants to locate in Windsor it is very difficult for me to say I do not want that plant and I do not want the jobs.

The Treasurer knows how to play that game because he does it well. When a branch plant is going to locate he says, "Are you telling us you do not want the jobs?" Of course we want the jobs. but we also want a strategy in the key sectors of our province that recognizes foreign dominance and the branch plant nature of our economy cannot be allowed to continue. We have to develop a strategy of self-reliance.

The reality is foreign investment and control can be related to plant shutdowns. The select committee on plant shutdowns and employee adjustment that was established before the last election came to that conclusion. Foreign control relates to the loss of job creation potential, the lack of research and development and the low level of management, skilled trades and marketing positions within our economy.

3:50 p.m.

Our reliance on branch plants and multinationals has inhibited growth in Ontario's economy in many sectors. The 1975 report of the Ontario select committee on economic and cultural nationalism said, and I quote:

"The most important effects of foreign direct investment and foreign ownership related to their cumulative structural impact on the economy. Branch plants of multinationals located here wanted entry to the Canadian market. But the result is that the economic interests of Ontario and of the subsidiary in Ontario are often different and they do not meet the requirements or the objectives of the people of this province."

The result, according to the Gray report in the early 1970s, was less production for the Canadian market, less opportunity for innovation and entrepreneurship, fewer export sales, fewer supporting services, less training of Canadian personnel in various skills, less specialized product development aimed at Canadian needs or tastes and less spillover economic activity. In many cases, our reliance on branch plants has resulted in the underdevelopment of Canadian industry, even where our market is adequate. Branch plants result in centralized control by the parent company. Branch plants import component parts and they prohibit exports. The bottom line is that we have job loss. The Statistics Canada study that was carried out in 1978 confirmed those statistics and confirmed the findings of the Gray report.

No matter how efficient the independent Canadian supplier might be, his price can never compete with the internal costing procedures of multinational firms. The result is we have significant trade deficits in important sectors of our economy. In the automobile sector, with the exception of this year -- which I am sure the Treasurer would agree is unique and does not reflect any changes in the structure of the auto sector in Ontario -- we happen to have a surplus. This is only the third year since the auto pact was signed that we have had a surplus. But the structural problems still exist when one looks at the huge deficit that exists even this year in the auto parts sector.

We have incredible deficits in the machinery sector where there are also incredible opportunities to create tens of thousands of jobs. I was amazed when I read reports out of our research department a couple of years ago saying we have more than a $250 million deficit just in nuts and bolts in Canada and $360 million in 1979 in mining machinery.

We were once self-reliant in food processing, but after the multinationals took over the food processing sector during the 1960s and 1970s we became net importers of food. We now import tomato paste, canned peaches, frozen strawberries -- all things we can grow and process in Ontario. The solution to the problem for this government has been: "We will bribe the multinationals. We will give $6 million to Heinz and ask them to produce more tomato paste." It seems to me that, instead of bribing Heinz with $6 million, the approach this government should have taken would have been to say, "Either you produce it, or we will go into a co-op with the farmers and we will produce it ourselves in a Canadian-owned firm."

At the same time as we import all these goods we are exporting thousands of jobs. This government's neglect of the real structural problems has led to today's crisis. No one and no one region has been exempt from the depression that exists. Rather than dealing with the real crisis this government attempts, as I have said before, to con the people by introducing Bill 179.

Even the government's own caucus members who sat on the plant shutdowns committee realize the problem. In its draft report the committee recognized that foreign ownership was one of the principal causes of the large number of plant closures in this province. In fact we had one representative from the Ministry of Industry and Tourism who indicated that between now and the end of the 1980s, I believe it was, at least 1,300 more branch plants were to close because of the ownership problem within our economy.

Foreign control has also been responsible for our having to follow the American interest rate policy. Interest rates have been responsible for the very significant crisis that exists in our economy and the collapse of consumer confidence.

We must in the short term recognize that there is an unemployment crisis. I believe that inflation is not the number one problem but that unemployment is. I think we must recognize this fact with programs and not just with rhetoric. The $50 million this government has allocated over the next few months for jobs is totally inadequate. The 38,000 jobs they talk about over the next number of months are equally inadequate. We should be looking at a program that takes advantage of the demands that exist in our economy.

For example, we know there is a problem in the housing sector. We know there are literally thousands of people who need affordable housing. The grant idea or the interest-free loan idea that simply assists people who can already afford homes does not meet the requirement of providing housing for people who need it. But a program such as we have suggested, $150 million in the co-op and nonprofit sector, would create at least 15,000 units and would create 33,000 jobs. We would be attacking at that time two problems: the housing crisis with affordable housing, as well as unemployment; and the spinoff, of course -- jobs in the furniture sector and in the carpet and appliance industries -- would be additional benefits.

With respect to energy conservation, literally thousands of jobs can be created if the government is serious about getting into the conservation area. This government has a program on conservation, but it is an inadequate program. There is no follow-up to the program, and it has not worked the way the government led us to believe it would. Again, jobs in energy conservation have two advantages.

Massive amounts of money simply have to be put into public works in our municipalities for roads, sewers, the upgrading of buildings and needed public buildings. That is simply a program that has to be instituted; but again, not with $50 million. It has to be a program that will create tens upon tens of thousands of jobs to get this province moving, to stimulate the economy and to develop the consumer confidence this Treasurer talks about.

We should take advantage of school boards, colleges, universities and hospitals and develop the kinds of building programs that are necessary to meet those social needs and job creation needs. We have proposed to this government time and time again the concept of a community adjustment program, which would assist the communities that have been hardest hit by the depression that exists. I suggest to the Treasurer a community adjustment program is needed today more than it was a year ago when we first suggested it.

In the long term we have to take a look at key sectors of our economy and develop and build on the base that already exists. In the auto parts sector, sure, we have an auto parts tech centre, but we have to get the capital to the Canadian-owned auto parts firms so they can revamp and take advantage of the new technology that exists in our country now.

In food processing we need direct assistance to Canadian firms and co-ops in a program of import replacement and therefore creation of jobs. That program must have less reliance on the multinational firms than this government is contemplating right now.

The machinery sector is an area where thousands of jobs could be created by a government that had the will to do so. Mining machinery, forestry machinery, pollution abatement machinery and industrial machinery are all areas where we have huge trade deficits.

In the area of inflation, this government must attack the areas where inflation is occurring. The government could take positive steps. For example, the government could introduce legislation to outlaw extra billing by doctors. It could put on a freeze or apply the five per cent to Union Gas and Consumers' Gas and the other home heating fuel companies in this province. The same goes for Ontario Hydro. The province should roll back. It should not have instituted its 17 per cent increase of Ontario hospital insurance plan premiums on October 1.

4 p.m.

If the government were serious about controlling prices, we would not get the stonewalling we get from the Minister of Consumer and Commercial Relations (Mr. Elgie) about the difference between leaded and unleaded gasoline prices in Ontario. I noted that a small article appeared in the Globe and Mail on Saturday showing that the Manitoba government was not afraid to investigate this problem, as well as the unfair prices that are charged in northern Manitoba, whereas this government says that is not within the provincial jurisdiction.

Further, if this government were serious about inflation, it would roll back the sales tax increases that were instituted in the May budget of this year. I want to know from the Treasurer to what he attributes the decline in sales tax revenue. Does he really believe that the increases or the expansion of coverage have had absolutely no effect on consumer confidence or consumer spending in Ontario? I do not believe the Treasurer believes that increases or expansion did not have some serious effect on expenditures of consumers in this province.

I suggest further that the Treasurer should set up a committee within the ministry to review seriously all tax expenditures within this province; it should find out and publish exactly how much money we are losing through revenues because of tax expenditures. Let us balance the gains we make in jobs and the revenue the government loses.

I am not opposed to tax expenditures if they are working, but there has been no proof provided to this Legislature. There is no tabling on an annual basis of exactly what kinds of moneys we are talking about in terms of tax expenditures. Let us have a cost-benefit analysis as to what is happening with them. If they are working, let us keep them. If they are not working, let us eliminate them. If a company is going to take advantage of the tax expenditures, why can we not take a look at signing performance guarantees as they do in some of the western European countries?

We believe there should be a surtax placed on individuals with a taxable income of $40,000 or more. This would produce approximately $290 million. If that revenue were combined with, for example, some curtailment of Hydro expansion, a re-examination of the uranium contracts, elimination of the Trillium Exploration Corp., along with a serious cutback in provincial government advertising, and if we ploughed that money back into job creation, we might be able to convince the people of this province that Ontario was serious about creating jobs.

In summary, it seems to me that the approach this government has taken is that we cannot do anything on our own and that it is up to the federal government: it is a national problem; it is an international problem. Both the Premier and the Treasurer throw their hands in the air and say there is nothing they can do. They say to the opposition parties that we are the doomsayers. It seems to me we have taken a positive approach to this economic crisis. We have pointed to the problems. We have also pointed to what we believe are some of the solutions.

We believe there is a positive and significant role that the provincial government can take to get us out of the recession or depression. Instead of throwing their hands in the air, the Treasurer and government members should take advantage of the significant opportunities that exist within this province. In the machinery sector or in the auto sector, thousands of jobs could be created by a government that has the will to create those jobs.

It would be more than delightful to see the provincial government bring in a budget early in the new year that took a serious look and took serious action to create those jobs both in the short term and in the long term. Instead of playing the political game of blaming the feds and looking to the feds for leadership, it should show a little leadership of its own and develop a long-term strategy as well as a short-term strategy to get Ontario moving again.

Hon. F. S. Miller: Mr. Chairman, first, let me congratulate both my critics, because I think we have had a more traditional and useful discussion on the merits or lack of merits of our government programs. Their duty, which is obviously visible today, is to tell us where our shortcomings are. I do not find anything to criticize in that at all. It is proper in our system of government for us to be told just how things can be improved: indeed, any government that totally closes its ears or its minds to the suggestions made by opposition parties in good faith is not doing its duty.

We cannot always agree, because in some cases we differ very fundamentally on what we believe are the routes to success or solutions. Those are the very bases we use when we stand up in political campaigns to differentiate ourselves: to say this party believes in this, and that party believes in that. As I have pointed out many times, it is always easier to say, "If we were there, things would be better," than to do it when you are there. That is true.

Because of the confidentiality of the session we had in Ottawa last week, I cannot quote specifically what the Minister of Finance for Manitoba said in one of the sessions, but it was diametrically opposed to the point of view coming from the NDP benches here. I could not help but chuckle and say, "Would you please call the leader of the New Democratic Party in Ontario and tell him what you just said here?" He just chuckled and said, "It is his business to do what he has to in his job, and it is my business to do what I have to in my job."

That points up the big difference. Very often it seems hard to differentiate governments in power one from another. It is sometimes hard to differentiate a Conservative government in Manitoba from a socialist government in Manitoba, or a Conservative government in Saskatchewan from a previous socialist government, once they are in power. In opposition, they are able to paint their differences starkly and realistically, but once in office, they have some difficulty being quite as radical as they said they would be when the opportunity arose.

Last week's meeting -- the Liberal critic talked about the federal meeting -- I thought was a useful one. A lot of people said, when I came back: "What did you decide upon? What did you agree to do?" The answer is that not a great deal was agreed to at the meeting in terms of specifics. If you asked me what hard news came out of the meeting, what agreed-upon programs came out of the meeting, I would be hard pressed to define much.

I have been to many of those meetings now, and not just as minister of finance for Ontario, or whatever the name happens to be in a given province. I have been to a number of them as Minister of Health, as Minister of Natural Resources and even, before that, as the assistant to the Minister of Health; and I have observed the changing scene.

The NDP critic has made a good deal of the fact that we appear to blame the federal government a lot, or to say it is somebody else's role or somebody else's responsibility. In a complex country like Canada, where the divisions of responsibility are not clear, it has always been the province's wont to blame federal governments and the federal government's wont to blame provinces or outside forces or both.

What made me an optimist after last Thursday's meeting was that, for a change, we said we would not do that. Of all the things that happened that day, that may be seen a year hence as the most important single element. It is not quantified in an accord or a program or anything else. It did not mean that we are happy with federal Liberals or whatever. It simply meant that, in the interests of a nation, in the interests of the 1.5 million people in Canada who are without work, that we should not be exacerbating the problems by fighting internally, but rather simply saying: "We will do our best collectively and independently to solve those problems. We will agree to talk together a lot more before we try to solve problems individually. We will do our best to see that our efforts, be they in budgets or direct programs. reinforce each other, knowing all the while that in a country as vast as Canada we cannot expect the problems or the programs of British Columbia to be those of Newfoundland, nor can we expect Alberta to worry much about the output of cars in Ontario."

4:10 p.m.

One of the points I brought up, and I am sure the members have heard us talk about it many times, is that as a nation, Canada has more internal trade barriers than the European Economic Community. I find that a frustration each time I go to a meeting with my 11 friends, because I represent one of the provinces that would benefit most from the reduction of those barriers.

It is something like the traditional free trade stance of the United States which existed until the last couple of years. They are still espousing free trade but they are certainly not acting that way any more as they become more and more protectionist.

For many years, I have heard my friends in the other provinces talk about the Canadian market, all the while making sure there was no Canadian market. They would do their best to find ways of stopping the flow of goods, services, people, money, the right to purchase land and a whole bunch of other items that they would just put in the way of making this a working country.

With only 25 million people spread across the space we have, we are rather foolish to be concentrating on those rivalries when we have so much to gain by working together.

Again, I sensed that perhaps some of that was disappearing last week. Perhaps the severity and length of duration of the present recession finally has sunk into the minds and souls of those people who represent all of us. I am not the least bit anxious to fix blame, but I am trying to find a proper part for my government in the overall revitalization of the economy.

A lot of fun is made of my comments that we need to improve confidence. I do not mean that in an airy-fairy way, saying "I think it is going to be better; therefore, it shall be and therefore you should believe it shall be."

Mr. Laughren: That is what you have said for years in your budget speeches.

Hon. F. S. Miller: I have not been too far off most years.

Mr. Laughren: Nonsense. Your figures have always been wrong and deliberately so, I suspect.

Hon. F. S. Miller: My friend keeps saying that. I am not about to be aroused by that kind of chatter today.

Mr. Laughren: I am not interested in arousing you.

Hon. F. S. Miller: I am so glad he is not. At my age, no.

My friend the member for Rainy River (Mr. T. P. Reid) --

Mr. T. P. Reid: Who got married.

Mr. Breaugh: I think he lost his train of thought there.

Hon. F. S. Miller: What was it they called it? A switch? A derail? My friend the member for Rainy River was talking about a definition of productivity. He asked me to try to define it. He said I had given him two answers over a number of months; the first one was not very good, the second was a little better. As I recall, that is the sum total of his comments.

Productivity is not a simple, one-dimensional issue. The unit cost of production in our country might be the variable that is easiest to measure. The easiest way to determine whether we are improving or going the other way is to see how those unit costs are moving versus those of other major competitors. The United States used to be our major competitor. It is still our major market and major source of imports, but our real competitors are in other parts of the world.

Unit costs, I suggest, are influenced by our labour rates and by the value of our dollar; or our exchange rate, in other words. They are also influenced by the willingness to reinvest in more modern plant and equipment: the acquisition of robots, for example, and the use of computerized design and manufacturing techniques, all of which are coming along.

One of the roles government can play in making productivity improve is to have a tax regime for corporations that either gives a bonus for reinvestment -- and the investment tax credit has been used by the federal government as well as by us -- or leads the small company in particular into contact with more modern technology and helps in the application of that technology.

To me, technology transfer is far more important in today's Canadian environment than is pure research and development. There has been a lot of talk about research and development; it is a buzzword. Everybody wants to do a lot of research or else wants a lot of it done here. I am not so sure how much the Japanese practise pure research, but they sure were tremendous appliers of known technology.

Mr. T. P. Reid: If you don't do your own research you will lose the brain power.

Hon. F. S. Miller: I think we are redirecting. I am not in any way belittling research or saying it should not be done. As a matter of fact, under the Board of Industrial Leadership and Development document, which many members opposite have found some cause to criticize, I hope members will understand that we tackled both research and applied technology in different ways. The IDEA Corp., which is now just nicely coming along, was there to --

Mr. T. P. Reid: I read their annual report. It kept me up for hours.

Hon. F. S. Miller: It does not take very much to keep my friend up for hours. I have been out with him.

Mr. Haggerty: There was nothing in it.

Mr. T. P. Reid: It was all of two pages.

Hon. F. S. Miller: Knowing the rate at which my friend reads, that would be a whole evening of reading for him.

Mr. T. P. Reid: We will have a bigger report next year, it said.

Hon. F. S. Miller: We will have, I can assure my friend of that, because I have been sitting with the chairman and the president as they have come before the BILD committee of late and shown us the progress they are making.

But let us forget about its immediate first-year progress. Let us bear in mind it is a concept that required a fair amount of time to change from simply an abstract idea into a working plan. That has pretty well been done, and I think the member will see as time goes on that we will be emphasizing the co-ordination of university research and industry's needs. We will be co-ordinating to some degree the research done around Ontario. We will have a much better awareness of who can do what in that field, both in the factory and in the academic areas.

Let us not get hung up on saying that new research is our major need. I suggest that the productivity the member talked about -- I am still on the issue of productivity -- can be dramatically improved in Canada, without our doing one bit more research, by emphasizing and investing in the equipment that we know improves productivity.

There is a great deal of understandable fear when we talk about robotization in the factory about what this will do to jobs. I do not know how one says any improvement in productivity should be put to one side because it eliminates jobs. If we go right back to the cotton jenny, which was perhaps one of the first major improvements, probably more dramatic and traumatic --

Mr. T. P. Reid: I saw you out with her once.

Hon. F. S. Miller: Yes, that was gin. The cotton gin was related to the cotton jenny.

Mr. Foulds: Your jokes are no better than your economics.

Hon. F. S. Miller: I can only respond to the level that comes from the other side.

Mr. Laughren: Really, I would have thought you could rise above it.

4:20 p.m.

Hon. F. S. Miller: I am trying to keep this on a reasonably placid, thoughtful basis. The member can recall the reaction in society when the industrial revolution started and everyone was assured there would be no jobs left in society. As time has gone by, not only have we had fewer and fewer people as a percentage of our total population required to do the basics of life, such as feed us, but we have had higher and higher standards of living all the while through the application of improved productivity techniques, no matter how radical they may have seemed in their day.

The road towards a better of quality life, if it is measured in terms of gadgets and dollars earned, is still through the application of known, existing productivity-improving technology. That is why the tech centres are so critical to the future success of Ontario; and those tech centres are not out to reinvent the wheel, but to bring the person who needs a wheel into contact with the knowledge that a wheel exists.

Mr. Cooke: They were out to re-elect the Tories.

Hon. F. S. Miller: No, I do not think my friend will find that we have played up that side at all, although no politician worth his salt is going to do things that do not help him get re-elected.

Mr. Cooke: That is why the auto technology centre was promised to Windsor, Durham and all the rest.

Hon. F. S. Miller: It happens, though, if one looks at this party's record over the 39 going on 78 years it has been in power, that it has had a penchant for doing things that were in the interest of people, and therefore were good politics, and therefore re-elected their people. It is as simple as that. No one likes to admit that.

I am still talking to the member for Rainy River about productivity improvements. In that area we did quite a bit in the pulp and paper industry. My colleague is keenly aware of that. He may recall the criticisms of three or four years ago when we were putting that program into place.

The major criticism I recall hearing was that we were helping an industry that was too well off, that was making too much and that was too busy. We are not hearing too much of that today. We are hearing about dramatic drops in the output of pulp and paper mills in the north and of Marathon possibly being up for sale or closing. We have seen the CIP mill at Hawkesbury close. We have seen --

Mr. Haggerty: How about Ontario Paper at Thorold?

Mr. Chairman: Ignore the interjection.

Hon. F. S. Miller: The member for Erie is normally so placid and well mannered that to hear an interjection from that direction brought an expression of total shock to my face in disbelief.

Mr. Haggerty: I just wanted to make a comment.

Mr. Laughren: You have aroused him.

Hon. F. S. Miller: I only took that man's advice once I went to a movie he recommended, and it was not all it was cracked up to be. It was Boxcar Bertha or something like that. If he had been a minister, I would never have trusted him after that, because he directed the whole Ontario Municipal Board select committee into a movie that was a grade C -- well, it was better than a sleeping pill, let me put it that way.

Mr. Haggerty: Tell us what happened in Sudbury.

Mr. T. P. Reid: It must be Christmas.

Hon. F. S. Miller: Well, it is better than some things we could say. Nothing happened in Sudbury.

I argue that in the overall area of productivity improvement, one of my major concerns remains the confrontation between labour and management. What causes that to appear to be more tense in Canada than it is in the United States or in other countries I do not know. Observers of the scene say it is more tense. This is neither a pro-labour nor pro-management comment, but certainly the road to better productivity has a great deal to do with the mutual trust or at least respect those two groups have for each other and their willingness, allowing for their mandates, to understand their common goals and purposes and to work towards them. We have a great deal to do in this country to make sure that is improved, and that is another major governmental responsibility, as it is to the other two parties.

I also suggest that productivity is greatly affected by the skill of management. The Japanese, to whom the member referred briefly, have shown an amazing skill in terms of applying manufacturing techniques. I do quite a bit of reading on weekends, and I was reading recently an article analysing the Japanese scene and explaining how they have done so well. One was a matter of government policy and the other was a matter of management of corporations. I will deal with both.

The productivity increases were, they said, very much a function of the bright young engineers in Japanese industry being put on the production lines to improve techniques of manufacturing rather than on the design or financial side. They said that we in North America tend to de-emphasize the importance of production engineering as opposed to other forms of engineering. As an engineer, I tend to agree with that.

The second aspect is how they protect a home market while they are developing a particular competence in a particular sector. One could look at television or automobiles, both of which are past history at the moment. There was a time when the Japanese could not compete in the world auto markets. There was a time when they could not compete in the television markets. While they could not do that, they totally protected the home market from the countries that did it well by techniques they had developed to a degree of expertise that makes my head spin when I see them.

Mr. Haggerty: Higher tariffs have been very successful.

Hon. F. S. Miller: Not just tariffs: the nontariff barriers are more important. In any event, they protected the market by a whole range of techniques. They developed a relatively large home market. They honed down their quality of product and their ability to cut costs until they knew the costs of that product were competitive with the world markets. They then opened the barriers to the home market and penetrated the other markets of the world, undercutting them.

The Americans always have been much more idealistic free traders than that and have seldom tried to protect their home markets in the process. I think they have paid the price for so doing.

My colleague the critic from the New Democratic Party talked at great length about my budget forecasts and their accuracy, and I have heard another member alluding to that from the seats. Let me say, categorically, that no matter what the member for Nickel Belt (Mr. Laughren) may believe, I have never had a forecast that I did not believe at the time was accurate.

I read an interview with Sylvia Ostry a month or so ago in which she was asked about economic forecasts. She said the big mistake we make is to assume that they have a high degree of accuracy when, in fact, it is not a business known for its accuracy at all.

I suppose there has never been a time when it was more difficult to determine what will happen. I wish I could tell members that I know my present forecasts of a mild growth through 1983 and a slightly better growth in 1984 will happen. We believe they will, and that is where confidence comes in: we believe they will.

When we went round the table last week at the finance ministers' meeting, it was not just Ontario that believed it would get better. Canada believed it would, and the other nine provinces, as far as I can recall -- and I will say almost without exception in case there were some -- felt the same thing. They really felt that improvements would be modest but real.

This year I was wrong; I have said that before. One of the things that intrigue me -- and I can understand why politicians seldom admit they are wrong -- is that it makes a headline at once to admit you are wrong.

Mr. Laughren: Not only that, but it would be a full-time job.

Mr. Foulds: Perhaps you could make a career out of it.

Hon. F. S. Miller: Well, I go on the assumption that if I am right more than half the time things are not that bad.

Mr. Cooke: Let's start counting.

Mr. T. P. Reid: I missed your 50 per cent of being right.

4:30 p.m.

Hon. F. S. Miller: This is a bad year for economic forecasts and economic forecasters. We have seen inflation come down dramatically over the year. There are those who would argue that inflation rates will continue to come down. We have seen interest rates follow them.

The real interest rate charge is still too high. To some degree it is a function of that lack of confidence or lack of sureness of what was going to happen. When I was a young man about the age of the member for Windsor-Riverside (Mr. Cooke), there was one rate at the bank. There was a six per cent rate and that was it.

It went on and on for years; six per cent. We then moved to the changes in the Bank Act and the changes in world economics and we have seen rapidly fluctuating rates. I wonder if the time has not come for the weekly auction of Treasury bills, which will go on anyway, to be the determinant of the interest rate.

It is like the weekly figure everyone has to wait for to tell one whether the economy is going in the right direction. We tend to put all kinds of emphasis on something that many weeks is only a technical measure of the manipulations of the central bank. In no way is it a free market determination of what the rate should be. Anyone who has studied that knows most weeks the Bank of Canada is in total control of the outcome.

I am not saying it should not be, but to pretend that it is a free market determination is, to me, a hoax. The government of Canada is responsible for fiscal and monetary policy. In my opinion, the government of Canada should not pretend that it is not in charge of that market when it is. The government of Canada should make a decision that stability in interest rates is more important right now than anything else, that the declines or fluctuations in it should be dampened. The trend line should be honoured, but we should not be playing games with that rate quite as much as we are with that rate. The value of the --

Interjection.

Hon. F. S. Miller: We have seen the Bank of Canada in the last few weeks and the Secretary of the Treasury or whatever he is called in the United States go off M-1. That does not bother me at all. The first question I ask an economist is: "What did M-1 mean and why was it so great? What makes you think M-1 should be telling us what the state of the market is? You have M-1, M-2, M-3, B, C, D, E and F, or whatever you want to have. They are all forms of keeping investment -- "

Mr. T. P. Reid: Do you believe Milton Friedman?

Hon. F. S. Miller: Milton Friedman is the closest thing to an understandable economist I have run into in the nongovernment world. I hastily added the last letters.

Mr. T. P. Reid: Nobody agrees with him.

Hon. F. S. Miller: I did.

In any case, they have suddenly discovered M-1 is not a good measure. It is not the variable they thought was a useful determinant of the quantity of money around. They tried to find other ways of coming to a control. I would argue they are looking at the work force. They are looking at a bunch of factors. I think we are going to see that politicians will need to have a gradual reduction of interest rates to get us to the point where the consumer takes over.

This is where we often differ with the New Democratic Party. No matter what government can do with its various programs of public works or work creation, the member is quite right when he says all we do is hire a small part of the number of people who are out of work. The rest of them are not going to be at work until such time as we are able to restimulate consumer buying. That is the question of confidence.

One can look at the tax regimes needed to do that. The member touched upon sales taxes and how much one could cut spending through sales tax changes. I am reasonably satisfied that sales tax cuts on specific items such as automobiles have worked when we wanted them to.

Mr. Laughren: I had a call from a dealer the other day. He wants to see you.

Hon. F. S. Miller: A lot of them do. It is funny, but this year there has been little pressure on us to do that. I think most of them have adjusted their inventories and markets to conditions. A year or so ago they had not.

I would say though, in my humble opinion and in the opinion of most finance ministers, it was not a time for personal income tax cuts. The reason we say that is the big problem out there in the marketplace is the savings rate at the present time. The savings rate, obviously, is for people who have surplus cash. They are the people who also have the higher rates of taxation and, therefore, reducing their income tax rate further at this moment is not going to stimulate spending if they are not spending the money they currently could spend.

Mr. Cooke: Reduce it for the people at the bottom.

Hon. F. S. Miller: I understand that for the people at the bottom every available dollar will get spent. I accept that, because many of the people at the bottom are not paying significant amounts of personal income tax anyway. One has to look at other techniques for them.

I firmly believe that the last five quarters of recession and the rapid variations in things like the interest rate and the inflation rate have really shaken a generation of people who have not seen that happen before. It has shaken their confidence. That, added to the present job insecurity, has had a snowball effect and has caused those who could have purchased goods to stop purchasing and, of course, created unemployment for those who are on the borderline anyway. So there has been a double-edged effect.

We all have a major task ahead of us to convince the ones with savings who are weathering the storm to believe there is cause to make some of the decisions to purchase things they need to buy now. That is one of the issues we discussed at some length, and it was unanimously agreed in Ottawa among the finance ministers that only a consumer-led recovery could solve the problem. I stress a consumer-led recovery. That does not mean we are in any way ducking government's role in stimulating the consumer-led recovery; just that that was the solution.

My colleague asked about the $50 million we are spending in the next three months, where it would go and so on. I simply say to him that has been totally allocated, I am told, by the ministers who received it. I understand they are issuing specific announcements on specific projects and these will be accomplished within the time frame. The other $200 million from the federal-provincial Canada-Ontario employment development program will be somewhat slower in coming out because, as I understand it, the municipalities have not yet received their forms. We expect that the municipalities, in this case, instead of getting an allocation of dollars to spend, will apply for works and ask for money to cover them. It is the reverse of the Ontario scheme.

Members will recall last spring we made an allocation of money and said, "You may have this if you can put up your share." This is going to be passive in the sense that we are asking municipalities and all those groups which are eligible to say, "We would like to do this specific project and we request approval." I think it is important that people understand that.

The member talked about capital. I am never quite sure what his beliefs are about the creation of capital. I have a better idea about the redistribution of capital. I suspect we differ more on the redistribution than on the creation. I would like to point out that capital is not dollars. The bank prints the dollars. The member knows that. Capital is something all of us create that is added to the stock of this country at the end of each working day and that entitles the bank to issue dollars to cover it so that we have not, in effect, inflated the value of those dollars, or inflated the numbers of dollars relative to the capital of the country.

That gets into the question the member and I differ pretty widely about, that is, the importance of foreign investment in the country to create goods in this country. In a question period not too long ago, the member and I had a discussion about this. I tried to point out, for example, we are buying mining machinery at the present time in large quantities, and if a foreign company wants to come into Canada, put up the capital to put a Canadian branch plant in and start either assembling or building the components or whatever, but in effect adding value in Canada, are we richer or poorer at the end of the year if they send their dividend home. That is where it all hinges: on the return of a dividend to a parent company. I say we are richer --

Mr. Laughren: What if we had made it ourselves? We would be richer still.

4:40 p.m.

Hon. F. S. Miller: Just a second now. The ideal is for Canadians to own the companies; I do not think we disagree on that. The question is, how we get there with our own assets? How do we encourage people to do it? How do we create the wealth for Canadians eventually to become the owners of Canadian assets? But the branch plant that functions in this country hires people who otherwise would not have jobs, usually buys materials in this country, usually replaces the import of a product and sometimes even exports that product, and in return it sends a dividend out, all being well, to the parent company.

I would say that if you measured the size of the dividend against the value of the imports it replaces, the cost-benefit ratio is huge; the wealth generated in the country and very often earned at another place far exceeds the moneys it sends out to the owners of the company if, as and when the company's assets justify the payment of a dividend. We tend to forget that, and that is one of the biggest reasons for encouraging foreign investment: not just the jobs but the impact it has on the overall wealth of the country.

The honourable member talked about energy. I would only say that I disagree with him. I think our Ministry of Energy has been exceptionally active in its residential energy advisory program, its Big Energy Saving Team program, its off-oil program, its insulation programs and soon. I would say we have done a great deal. In fact, one of the reasons Hydro's energy forecasts of oil consumption are dropping is the success of the energy conservation programs.

All in all, I thank the two leadoff speakers for the opposition parties for good comments. I have been listening to them and I do not reject everything they said. I cannot begin to say that things are happy or well off in the province, but I sincerely believe they are getting better and that we have responsibly managed the affairs of the province.

On vote 901, ministry administration program:

Mr. T. P. Reid: Mr. Chairman, to speed things along, maybe we could take any item under vote 901 and then go to 902.

Mr. Chairman: I was hoping we could do that.

Mr. McClellan: If I could just speak to that --

Mr. Chairman: Is this in clarification?

Mr. McClellan: Mr. Chairman, I thought we had an understanding on the part of all three parties that we would have, as the phrase is, a wide-ranging debate that would take place under the aegis of the first vote, and then when we had finished the time we would pass everything.

Hon. F. S. Miller: That was my understanding.

Mr. Chairman: Would that be okay? Remember, you are the critics.

Mr. Bradley: Mr. Chairman, I am glad we are having a free-ranging debate. It allows that flexibility, because I wanted to discuss with the Treasurer a couple of aspects of his ministry that are so very important.

As the Ministry of Education critic for the official opposition, I am extremely concerned about the amount of money that will be transferred to municipalities in the form of funds for boards of education. As a former municipal politician, and one who keeps in close liaison with at least the city council if not the regional council, I am extremely concerned about the amount of money this body will have available to it over the next year. I am concerned because if you think of the specific area I reside in -- that is, the Niagara Peninsula -- you will recognize that the latest figures show that we have a 19.1 per cent unemployment rate.

While I recognize that a small part of that can be attributed to the fluctuations in the automotive industry as they relate to temporary layoffs, there are a number of people who have been unemployed for several months, and we have reached a relative figure of 19.1 per cent, a figure that concerns a lot of people who would heretofore have said, 'It is just a temporary thing, and when the economy bounces back in a short time we will be in good shape."

I am concerned about the transfers to municipalities because, as I raised in a question period and others have done so as well, welfare payments in particular municipalities -- I am thinking of the regional municipality of Niagara -- are going to increase tremendously this winter. I believe we are over 5,000 payments now in the Niagara Peninsula from the social services department of the regional municipality of Niagara. That means there is a greater burden going to be placed on the local taxpayer.

One of the solutions is to tax the people in that community at a higher rate to pay for those who are suffering from unemployment or require welfare services. Unfortunately, this involves taxing a community already in a somewhat depressed state, looking at the Niagara Peninsula as a whole.

This is why I think it is essential, and I am sure this argument could be made across a good deal of Ontario, that the Treasurer give an undertaking to allow municipalities to have something above what the Minister of Municipal Affairs and Housing (Mr. Bennett) indicated at the annual meeting of the Association of Municipalities of Ontario. First of all, he said they would be lucky to get anything. After the hissing died down, he said they would be getting something, but not very much.

Subsequently, I asked the minister in the House about the percentage increase municipalities could expect. I asked him to give an undertaking to the House at that time that he would provide something above the five per cent or less that many had been suggesting.

While I recognize, because of the program his government has implemented, that municipalities' requirements in terms of funds for salaries and compensation will be less than they would have been otherwise, they have many other commitments they must fulfil. For the last few years they have been cutting many of the services they used to consider essential. Let me point out one example, as opposed to going through several examples, so the Treasurer will see what I am talking about.

There is the pollution abatement equipment. It is now contemplated that municipalities are going to be required to install tertiary treatment to remove phosphates from the sewage as it goes into the various waterways in the province. That is an additional cost to those municipalities, over and above what they might have been able to budget for, and over and above what could have been contemplated in the five per cent or less increase to which the minister has alluded.

If I think of his transfers to boards of education, I would say it would be extremely difficult for boards of education to receive anything less than about an 8.5 per cent increase in the amount of money that would be given to those boards by the province without having to raise taxes substantially at the local level, or without having to cut services even more drastically.

Although we have seen a trend where the percentage of the cost of education assumed by the province on a province-wide basis is down from about 60 per cent to about 51 per cent or less, there are still a number of people on those benches, and many of them in the cabinet, who have faith in the education system and are concerned enough about the importance of education that they would want to see an avoidance of the cutbacks in that area.

If the minister was to implement transfer payments at five per cent or less for both municipalities and boards of education, he is going to force hardship on the local taxpayer or he is going to force some pretty important services to be cut back.

The minister would be aware that when the Minister of Education (Miss Stephenson) introduced, with the approval of this House, Bill 82 for special education in this province, the great concern of the local boards of education and of all those interested in education was the cost and how that cost would be assumed. The Minister of Education assured us, and she said she had spoken to the Treasurer about this, that there would be sufficient funds available for special education or the implementation of Bill 82.

Yet if we had the kind of transfer payments I feel the Treasurer is talking about -- that is, five per cent or less for the boards of education -- then I think we are not going to be able to implement the provisions of Bill 82 in any meaningful manner without cutting back in other areas. That is precisely the thing that trustees have feared. That is precisely the thing that teachers have feared. That is precisely the thing that many parents who are interested in the system have feared.

I recognize the minister's own transfer payments from the federal government are not what he would like them to be. I know the demands on his ministry for funds from people at the lower level of government -- that is, the municipalities -- are great, but I would implore him, particularly in this year of difficulty, and without criticizing him on one hand or the other, to provide more funds to the municipalities and boards of education. Implicit in that is the fact that his deficit is not going to come down. It might even increase marginally.

4:50 p.m.

It is unfair for us to say, on one hand, that we want his deficit brought way down quickly, and, on the other, that we want expenditures continued or increased in certain other areas. I want to be fair to the Treasurer and say I do not think he is going to incur a lot of heavy criticism from almost anybody in Ontario for allowing his deficit to stay where it is, or to creep up a bit, to meet the emergency needs that face us this winter because of unemployment.

I welcome the opportunity to speak about transfer payments, and I do not want to pretend the Treasurer has an easy job in difficult economic times. I am going to say his government has been the author of some of its own problems, but I also want to be fair enough to say there are federal and international considerations that affect our economy as well.

Therefore, I recognize that he is in a pinch for funds, as far as getting the revenues is concerned, and he is in a pinch as far as trying to meet all the obligations that various ministries want to have met and also the obligations that municipalities and boards of education have to have met. It is essential that he provides the necessary funding for the municipalities so they are not in a position of laying people off or of cutting back on projects that could help to increase employment at a time when we need employment increased.

I would also like to see -- and I know he is working somewhat towards this -- very close liaison with the municipalities in terms of the kind of job creation projects we are going to have this winter. Like every other member of this House, I am concerned about having these implemented as soon as possible to alleviate the burdens that exist at the local level. We have a lot of people in our part of the province who are now long-term unemployed people. The Treasurer will recognize that at one time when we talked about the Golden Horseshoe we talked about that area from Oshawa right around to Niagara-on-the-Lake. I want to indicate to members of the House that we are no longer the Golden Horseshoe in terms of employment opportunities.

We need the kind of special assistance that senior levels of government have the financial capability to provide. No longer can we say we are going to be the generators of these funds, although naturally a lot of the taxes in this province come from the Golden Horseshoe. Certainly at the Niagara Peninsula end we are experiencing a lot of difficulty. Whether it is in St. Catharines, Welland, Fort Erie, Port Colborne or the rural areas, we are having it tough in the peninsula.

I will touch on the federal industry and labour adjustment program, for instance, which I recognize deals with longer-term chronic unemployment situations. There are many in the peninsula who would like to qualify, as I believe Brantford and certain other areas have, for that kind of funding. I would like to think we could qualify for special provincial funding too.

The member for Scarborough West (Mr. R. F. Johnston) has sent a letter around to municipalities saying it would be a good idea if the province would pay for the welfare costs for anybody who was added to the welfare lists after September 1: in other words, anybody in excess of the numbers that existed on September 1, 1982. That is certainly an enviable goal. I suspect, from what I have heard from the Treasurer, he is not prepared to meet that obligation from provincial funds.

That is why I have suggested, in the context of wanting to help those areas that are most in need, he might give consideration to the province assuming a greater percentage of the cost of welfare and social services when a municipality hits a threshold level. If it was, Heaven forbid, 14 per cent -- if I had said that five years ago people would have said there would be a revolution, because we thought eight per cent or nine per cent was a high unemployment rate then -- but let us say the peninsula or Windsor or Sudbury or some other area were to hit 14 or 15 per cent, might you, instead of 30 per cent of the cost of welfare -- I think the feds provide 50 and you provide 30 -- assume 35 per cent and the municipality 15 per cent, or something of that nature?

It gives you the opportunity to say, "We cannot afford a blanket program" -- which I know you would want to say in your present circumstances -- "but we are prepared to help those municipalities which are hardest hit." I hope you will give some favourable consideration to that, and to assisting those municipalities in other ways when they hit that kind of threshold.

I will very briefly mention the boards of education, once again, being hard hit in those areas that cannot generate funds, right across the province. I heard the minister talk about competition in his remarks; how other countries have braced themselves for competition and how we have to do so as well. Surely the very best education for as many people as possible within our system is essential so that we can compete.

In my view it is a good investment on the part of the Ontario government to place a lot of funds in training and retraining or in other forms of education which are perhaps less job-oriented but nevertheless are still useful to our citizenry. The minister has the chance to provide that funding. I hope he would not cut back for those two reasons: first, because it is essential for a good educational system; and second, to avoid layoffs, even in that sector, which are going to reflect badly on the Ontario economy.

I guess each of us, if we wanted to make a speech in the House, could go on for a couple of hours on many of the measures we think are essential, but we are in your estimates and have an agreement to keep things relatively short.

Speaking of short, I think the member for Nickel Belt is anxious to get a few words in. I know his area of the province has been particularly hard hit and has some specific problems that may have to be addressed by the specific measures he and others in the House have mentioned.

I ask the minister to give my suggestion some consideration: that we not treat the Golden Horseshoe, or at least our end of the Golden Horseshoe, as golden any more but as something that is more or less tarnished. We could use some funds from the Treasurer to shine up that image once again.

Hon. F. S. Miller: Mr. Chairman, when you look at Ontario in total, you have to realize there are parts of the province, such as the part I represent, which at the very best of times have seldom known the level of development some of the rest of you think of as being pretty bad in your worst times. That is why your area has been called the Golden Horseshoe. It has seen a good deal of development across the years, a development that many of us envy. Summing up, now that we are in a downturn, those parts of the province that never had it so good are not having it so bad. You see them as tending to weather the storm simply because they never reached the manufacturing peaks of employment in the halcyon days.

It is interesting that Ontario, of which just a year ago everyone in the Canadian scene was making great fun and saying, "Look at how the other provinces are outpacing Ontario", is not looking bad. Provinces that a year ago said, "We would not want to be compared to Ontario and hitch our star to equalization payments," are now saying, "Maybe we could live with a formula that has Ontario in it because Ontario again has weathered the storm."

Look around your home town. How many Alberta plates have you seen reappearing on the streets of St. Catharines? I am seeing them on the streets of Bracebridge.

Mr. Haggerty: I see quite a few by Sutton Place.

Hon. F. S. Miller: Yes. People are coming back to Ontario now, saying, "It is not such a bad place at all." The basic diversification of the Ontario economy is one of its strengths.

We are in one of those rare periods when, for example, both lumber and paper are down at the same time. Even in that industry, usually one is up and one is down. Once in a while both are up and they have a really top-grade year. This is one of those years when both are down. The lumber side is starting to come back a wee bit, but the pulp and paper side has not yet. I am only saying those things because we have to keep them in perspective.

5 p.m.

Before I go on, I missed an answer to the member for Windsor-Riverside when he was saying something about sales tax and what it has done to Ontario sales. I will just read a little quote here:

"On average, total retail sales in Ontario during the period from May to September outperformed all other provinces except Nova Scotia. Total retail sales in Ontario in 1982," according to the Conference Board of Canada, are forecast to increase five per cent compared to 4.1 per cent for Quebec, four per cent for British Columbia, 4.1 per cent for Nova Scotia and 3.4 per cent for Alberta."

I put that on the record because people who wished us to take sales tax action tend to imply we have a worse record than the other provinces.

I am going to state a policy which is mine; it may not be my government's. I will find that out later. You talked a lot about the importance of transferring more money, either for education or for municipal purposes, to the municipalities and the school boards. We have been paying about half the cost of education and something less than half the cost of municipal government through the grant system. We pay almost 100 per cent of the cost of health care in the hospitals of the province. Certainly we are the only governmental source of money.

I would argue that governments that spend should be the governments that collect and that should be true for the federal, provincial and municipal levels, We have a province that varies widely in wealth, just as we have a country of greatly varying wealth and tax-paying capacity, and we have seen the province enter into the role of subsidizing, or helping through transfers, the spending on certain kinds of things like education, This is done on the assumption, quite properly, that if there had not been provincial help many young people in Ontario from the less privileged parts of the province would never have had a school board willing to spend at a level comparable to that of the wealthier areas.

We are seeing that raised all over again. It is part of Bill 127, something you do not favour. I do not understand Bill 127 half as well as you do, but one of the factors there was to see that the whole Metro area had some semblance of equality to it.

As the ceilings have come off educational spending, simply because they were hard to enforce, we have seen a great vying by school boards for spending, and the greater the share of provincial spending the easier it is for them to do that.

My problem is I am kind of like the ham in the sandwich these days. The federal government cuts back on transfers to me for programs it initiates, like health care, and then manages to wash its hands of it while at the same time the demands go up.

Mr. T. P. Reid: As you have done to the municipalities since the so-called Edmonton commitment.

Hon. F. S. Miller: There is a big difference between the municipalities and federal-provincial relations. Municipalities are the creations of the provincial government and the rules are set here. The provinces are governments in their own right, created under our Constitution and we tend to forget that.

Basically, you talked about winter works and said that you hoped some money would be spent on education. I do not know that the figures have ever come out, but of the $50 million to be spent in the next three months, $23 million will be spent in the field of education, almost half of it. That will all be on works that are related to improving conditions.

You talked also about the investment in education. I have to agree with you. You know I am an ex-teacher too. I am not a qualified one. As somebody would say, I am not a qualified Minister of Economics --

Mr. T. P. Reid: I understand you had one year's experience 10 times.

Hon. F. S. Miller: Yes. After five years of full-time teaching and probably eight years of part-time teaching at least I am familiar with the other side -- from the classroom and from the students' point of view.

Countries that do not invest in education will never make much progress. The question is whether that investment, almost in quotation marks, is being made wisely or whether the asset is being wasted in forms of teaching that do not produce people entering the work force with saleable skills.

I guess the changes made by the Minister of Education a month or so ago were in a direction that said: "Let us become more practical or let us become more demanding."

Mr. Bradley: It implements the Liberal platform, which I applaud.

Hon. F. S. Miller: In any case, as an old teacher, I would say exactly what you just did. I applaud her for it, and I think most people in Ontario applaud her for it. You can blame governments for varying from that kind of policy back in the 1960s or whenever. The fact is that is what young people and teachers were demanding.

Teachers were saying: "Get off this practical bent. You have lost sight totally of the value of education. Education is there to increase appreciation of the world for the educated person, not to make money, not to earn a living." That was pretty easy to say when there was no end to the rainbow, when there was no end to the growth.

But the moment you are into a problem and people with BAs cannot get jobs or whatever we suddenly start to hear, even from the students themselves, "What right did you have to let me waste my years in university on a course where I had no chance of getting a job?"

You venture the comment, "A few years back, if I tried to say to you, 'Really, you should be considering taking a course of study that might lead to a job,' you would say, 'It's none of your business what I take. That is my right.'"

That is the way it is in a democracy. I am not about to change it. I am simply saying we tend to forget we go through those cycles; and we did. When things were easy, freedom prevailed. Now that they are not so easy, we are seeing some returns to directed, mission-oriented if you want to call it that, education that is truly an investment in this country's future. I have no trouble with that.

It is always going to be one of my tasks, as Treasurer, along with the cabinet, to maintain a fair level of support for education. To the educator it will never be enough; to the taxpayers it is always too much. It is still the same taxpayer who pays it within the province; I think we have to remember that.

We are simply saying the province has perhaps a wider tax base and more inflation-resistant sources of money and so has some obligations in the process to be a partner, particularly when it sets any of the rules of the game, as the feds do with us in health care.

Mr. Laughren: Before I launch into my copious magnus --

Hon. F. S. Miller: Into your what?

Mr. Laughren: Engineers do not understand phrases like that.

Hon. F. S. Miller: If it was a disease I'd know it well.

Mr. Laughren: It is a communicable disease.

I wanted to commend the member for St. Catharines (Mr. Bradley) and to wish him well. I am glad to see he has recovered from whatever affliction it was that prevented him from attending and voting on third reading of Bill 179 last week. I am very pleased the member has recovered from that affliction.

Mr. McClellan: It was a spinal condition, I believe.

Mr. Laughren: Yes, it was a spinal condition. I am pleased to learn it was not terminal. I say that in all good cheer and in keeping with the season.

I am always fascinated by the Treasurer's meanderings, but before I get into them may I suggest that he make a commitment that his deputy will get to Chapleau for Christmas this year since he was prevented from getting there for the big celebration this past summer by haranguing and talking at length on the sales tax bill, which we debated back in June and early July.

Mr. McClellan: That sounds like a punishment.

Mr. Laughren: No, it is not a punishment; you have a good time.

In speaking to the Treasurer's estimates, I sometimes criticize him for his projections in his figures, because --

5:10 p.m.

Mr. Haggerty: We missed you that night. Where were you?

Mr. Laughren: What night?

Mr. Bradley: Did you miss that vote on Friday?

Mr. Laughren: No. The Liberal Party is spaced out today. I do not know what is going on.

It has always bothered me that the Treasurer invariably uses figures in his budget that are more optimistic than most of the forecasting organizations, such as the Ontario Economic Council, the Economic Council of Canada or the Conference Board of Canada. Whenever he makes his projections and we criticize him and ask him how he arrived at those figures, he says: "I happen to have more faith and confidence in Ontario than you do, that is where I got those figures."

That is basically what he is saying and he is invariably proven wrong, whether it is job projections or job creation projections or growth in the provincial product. The Treasurer's figures are invariably too high. I know he thinks it serves him well to be optimistic and to see the world through, if I might use the phrase, rose-tinted glasses. However it is not fair to be phoney in making projections and to mislead people that way, because people do pay some attention to the Treasurer and his projections. I hope he has learned his lesson in the last year or two: that it simply does not pay to do that.

We criticize the Treasurer for being too optimistic, wildly optimistic, but the leading proponent of seeing the world through rose-tinted glasses is the Minister of Northern Affairs (Mr. Bernier). His favourite expression -- the most creative expression I have ever heard him use -- is, "You guys are full of gloom and doom." That is the beginning and the end of the critique of the Minister of Northern Affairs when we say the Treasurer's figures are not realistic.

I can recall, for example, we talked at great length of the need for an import replacement program in Ontario and this Treasurer pooh-poohed our suggestions over the last four to five years. I can remember us talking at great length about the auto pact and how it needed to be renegotiated and how we were being had by the Big Three. The Treasurer was not moved by our arguments at all, whether we talked about research and development or the high-technology aspect of the jobs that were here as opposed to being in the United States, or of where the new investment came that was put into the auto industry in Ontario. It came from Ontario. It did not come from south of the border.

Now, of course, the Treasurer is finding it a little bit different. He is saying we have to replace all those imports. My goodness, if I heard him correctly today, he made an anti-free-trade speech this afternoon. If I heard him correctly, he said: "No, we have to protect the infant industries; we have to do that." Whenever we have argued with him he took the opposite position. The former Treasurer always used to argue for freer trade. Now suddenly the Treasurer understands we do not live in a world of equals. That seems to be dawning on him, whereas in the past he has always said, "Oh no, don't bother me with that nonsense."

We have talked about diversifying in the Sudbury basin, for example, and about further processing of our minerals. This Treasurer was the Minister of Natural Resources and could have done a great deal to protect Sudbury from what is happening up there right now. This Treasurer had a lot of output; there was a lot of potential and this Treasurer could have taken a lot of action, whether it was exemptions to the Mining Act or bringing in a mining machinery complex that would actually produce mining machinery.

What is in place in Sudbury now is not going to produce mining machinery, and was never intended to produce mining machinery. The one operation that was supposed to produce mining machinery has been put in mothballs, the operation, I believe, between Inco and Noranda and the federal and provincial governments.

Nothing is happening now. They have decided the economic times are not appropriate to proceed. When will the economic times be appropriate? When mining is booming, and it takes five years to get the plant in operation? Is that when he is saying the economic times will be appropriate? I am not at all impressed. We have had major layoffs and shutdowns in the Sudbury area within the last six months and the response of this government has been a series of make-work projects. If we laid all the make-work projects in the Sudbury basin end to end we would have one big make-work project but nothing that would be of lasting significance to the Sudbury community.

One of the projects scheduled by the Minister of Transportation and Communications (Mr. Snow) was what is known as the northwest bypass. Guess what happened? The Minister of Northern Affairs jumped on his big white horse, rode into town and cancelled the project -- or at least put it on hold. He said, "Ah well, you know, we have to reassess our priorities." In a community like Sudbury he reassesses the priorities on building a bypass.

It could easily have been guaranteed in the awarding of the contract that local labour would be used in the building of that project. For the minister to argue that maybe there are other projects that would be more labour intensive or that would employ more people in the short run is a lot of nonsense. The Minister of Northern Affairs got into trouble two or three years ago when he put the project back a year; now he is putting it on hold again.

Talk about breaking a commitment to a community. Not only did the government not come up with any significant long-term projects but it cancelled the one that was already promised and committed. The Minister of Transportation and Communications was ready to roll and the Minister of Northern Affairs decided he needed to reassess his priorities. That is the kind of commitment we have seen from this government since the layoffs and shutdowns hit last year.

I do not know what the Treasurer said today. As I say, I think he is against free trade. I think he wants the Treasury bill auction to proceed without any interference by the federal government or the Bank of Canada at all. I think that is what he wants.

Mr. Kennedy: Are you for tree trade?

Mr. Laughren: No, this is what the Treasurer said. I am not for free trade.

But the Treasurer is flirting with these ideas as though he is working them out at our expense in his own mind. Does he really believe the Bank of Canada should stay out of the Treasury bill auction on Thursdays or does he not? He will not say. He implies that maybe it should, but he will not deal with the whole question of what happens if the interest rate drops significantly on Thursday. He does not deal with what that does to the value of the Canadian dollar and what it does to the price of imports. It shows he does not even know what he is thinking. If he knew what he was about he would tell us what his position was in that regard. He will not tell us. He does not know.

I think I heard him say today that he is all for foreign investment, that foreign investment is what Ontario needs. Then he set up this specious argument that it is better to have foreign investment than no investment. That is half an argument. What he did not address, of course, is whether we are better to have Canadian investment or foreign investment.

Mr. Kennedy: Take both.

Mr. Laughren: He did not use that. He did not make that one of the alternatives. It was just foreign investment or no investment. That is not the kind of argument we are prepared to buy in the Ontario Legislature. I suppose it goes down well across Ontario in his speaking engagements to Conservative riding associations, but it will not sell here.

It would not be right if I did not explain what we tried to do when the problems hit the Sudbury area. My colleague the member for Sudbury East (Mr. Martel) and I came up with an eight-point program which we thought would stimulate the Sudbury basin in the long term. There would be some short-run benefits, but primarily it would be long-term benefits if the program was implemented.

We divided our proposals into two parts. The first was based on using the resources that are there now and the second on developing new opportunities so we would not be forever dependent on the nickel resource. The first thing we decided was, why not have a nickel institute. It was recommended by this government in its nickel policy report in 1977. It was recommended but never acted upon. Nobody seems to know why but it simply has not been implemented.

Second, more resource upgrading should occur in the Sudbury area. That includes refining. Dealing with the section 104 exemptions that Falconbridge now enjoys, which allow it to ship every blessed ounce of its ore to Norway for refining, do they really think that is right? We think that product should be fabricated beyond the stage it is fabricated now. There was a call for a mini steel mill in that same nickel policy report in 1977 which could have created up to 700 jobs. The government has done absolutely nothing in that regard yet either.

5:20 p.m.

We believe there should be a crown corporation, or even a joint venture corporation with the private sector, to build mining machinery in Sudbury. What do we get? We get a resources machinery development centre that has no intention of ever building one piece of machinery. It is a marketing operation. That is fine; it is hard to say, "You do not need a marketing operation." What we need is an operation that will actually build mining machinery, but it is not coming despite the massive imports. It is fine for the Treasurer to make all his nice noises about replacing imports, but when the opportunity comes for him to do something where there is an obvious need, he is found wanting.

The third area that is still tied to the resource base in Sudbury is the pollution abatement program, particularly in the Inco operations. The smelter needs to be reduced so that we can reduce the sulphur dioxide emissions. What better time to have put in the pollution abatement equipment than during a long shutdown? But, of course, absolutely nothing has happened. It is silly to argue that Inco cannot afford it. Inco could not afford it back in 1975 when they were making $200 million or $300 million a year. They will never be able to afford it in their terms; so either the emissions are lowered and enforced by government dictate or it will never be done and it will never happen.

The tax write-off on pollution abatement equipment runs to about 55 per cent; so whatever is spent on pollution abatement equipment costs the company less than half that. I would be prepared to support a loan to the company to get on with the business of reducing emissions and let them pay us back as time goes on. Nobody is saying they have to find instant cash right now. We know they have a cash-flow problem.

The fourth area under using the nickel resources would be to establish a fertilizer plant in the Sudbury basin to use the sulphur from the emissions, or at least to prevent the sulphur from being emitted and using it with the phosphate deposits up in Cargill township, near Kapuskasing. There are also phosphate deposits up near Chapleau, although I believe they are not big enough to support a major operation; but if the facility were there, certainly those deposits could be used as well.

Those were the areas utilizing the existing resource. Among new opportunities that we thought would have allowed the government to show a real commitment to the community, was one to launch an intensive energy conservation program to create jobs through energy conservation, particularly in the residential area. It would have created a lot of jobs, saved a lot of energy and been very useful during this winter. Do not forget that we made these proposals a couple of months ago, but absolutely nothing has happened in that regard.

Second, we felt there was an enormous opportunity in Sudbury to reduce the loss of agricultural land and the loss of food processing jobs in the Sudbury basin. There is a much greater potential for agriculture and food processing in the Sudbury basin than most people are prepared to admit. There is some very good agricultural land in the basin. The best agricultural land in northern Ontario is class 2; there is no such thing as class 1 agricultural land in the north because of the climatic factor. There is class 2 land in the Sudbury basin; it is very good farm land. We are losing farm land and we are losing food processing jobs in the Sudbury area. There is no need for that. There is an enormous potential there.

Third, there needs to be a health care product import replacement program. The government has already announced a program designed to look into reducing health care product imports, and we are saying that Sudbury should have a major role to play in that. There are about $800 million worth of imports a year at present, and we think Sudbury could be a major player, but so far absolutely nothing has been done by this government.

Fourth, there should be an institutional import replacement program to manufacture products that are used in many of our government institutions. The Liberal member for Prescott-Russell (Mr. Boudria) last spring made a very good presentation in this chamber; I believe it was during one private members' hour. He demonstrated that a large number of products this government buys from outside this country are actually produced here or could be produced here. The government has taken no action on that either.

Those were some of the things we thought should be done. We sent a copy of our proposals to the various ministers, including this one. We thought this was a very serious proposal, one that should not have frightened anyone off in an ideological sense. We did not even say in the proposal, "One of our demands is that you must nationalize Inco or Falconbridge." We knew they would use that as an argument for ignoring everything else in it; so we deliberately did not put that in it. We said: "These are proposals you should be able to live with. Indeed, many of these proposals, if not most of them, have already been proposed by your own people -- experts in the government."

Despite that, this is the response we got from the Premier, who I saw skulking under the gallery a few minutes ago:

"Dear Floyd and Elie:

"This will acknowledge your letter of October 5, and the enclosed copy of your brief 'A Challenge to Sudbury.' The government shares your concern about the situation in Sudbury and is studying proposals and initiatives designed to alleviate the difficulties arising from the current economic climate.

"Thank you for bringing your views to my personal attention.

"Yours sincerely."

That is not a serious response to a serious document, to a serious attempt to do something about the problems in the Sudbury basin. I was quite offended by that kind of response. If the Premier had said the Treasurer would be responding at length or that the Minister of Industry and Trade would be responding in detail, fine; I could have accepted that the Premier did not see that as his particular mandate. But I found it unacceptable and outrageous that not a single minister of the crown responded in a serious way.

Inco itself responded in a very responsible, thoughtful and serious way. They obviously put a lot of thought and effort into the response. I did not agree with a lot of what they said, but that was not the point either. They regarded the document as serious, they commended us for the thought and work we had put into it and they commented on virtually all the suggestions that affected their operations, and we appreciated that very much. But the government gave us this token response. I think we as members have a right to expect more -- and not just us, but the Sudbury community as a whole. We are very unhappy with that.

I mentioned earlier that the Minister of Northern Affairs not only had not done very much but also had actually put a major project on hold.

When we got into the estimates of the Ministry of Industry and Trade, I thought that would be a good place to talk to the minister about some of our suggestions. The minister in his leadoff during the estimates said the following:

"Being competitive also demands that we make better use of our natural resources by adding value to them through upgrading into semi-finished and finished products. Value-added economic growth is essential to long-term wealth creation."

I was sitting there looking at the copy of his statement and listening to him, and I wrote the following words down beside the statement in his opening remarks. I put: "deceptive, misleading, dishonest, cynical." That was my immediate reaction to the Minister of Industry and Trade's comments.

Imagine making a statement like that about the need to upgrade our resources when in Sudbury there have been exemptions to section 104 which requires that minerals be processed in Sudbury. This government provides permanent exemptions to Falconbridge year after year, then the Minister of Industry and Trade comes in and makes a statement like that. Do members blame me for writing down in the margin: "deceptive, misleading, dishonest, cynical"?

5:30 p.m.

I would have had much more respect for the Minister of Industry and Trade if he had stood up and said, "Look, we are not going to do it; we have never done it and we have no intention of doing it," rather than making a statement that misleads people into thinking the government really does have a policy for upgrading resources when there is no such policy at all. For the government to pretend there is, is simply outrageous.

It is not only the Minister of Industry and Trade and the Treasurer who have given us the back of their hands. The Minister of Labour had a little role to play too. I do not know whether the Treasurer knows it, but a manpower adjustment committee was established. Traditionally, the federal government paid 50 per cent of the cost of this committee; Inco agreed to pay 40 per cent and the province, 10 per cent. The Minister of Labour then backed out and what was going to be a commitment of $20,000 suddenly became a commitment of $2,000, or only one per cent of the total budget. That is some commitment to the Sudbury community. I would be interested to know whether the Treasurer is even aware that happened, because to cut back on a manpower adjustment committee is simply outrageous.

I do not want to go on much longer. I like to be short in my speeches. But I want to draw one thing to the Treasurer's attention.

Earlier I talked about using sulphur for the creation of new wealth and to make new products. I picked up the Globe and Mail of November 23, 1982, and saw an article headlined "Sulphur Sales Little Known, but Lucrative." The article stated:

"An industry study shows sulphur is the unheralded but lucrative byproduct of western Canada's natural gas production, but supplies could be depleted by the end of the decade ... About half of the world demand is used in making fertilizer, with the rest going into chemical production, construction materials and petroleum product manufacturing. But western Canadian production has been declining steadily for the past 10 years, forcing marketers to draw on inventory.

"The world sulphur price was stable through most of the century -- $21 (US) a metric ton in 1900 and $25 in 1970. But by the end of the 1970s, demand had propelled the price to $110. And it has stayed high despite the recession, because of a disruption in supplies from Poland and the Persian Gulf."

That is an example of the potential out there. But it takes initiative and some kind of entrepreneurial spirit on the part of someone to do something about it. One would think that this government, with its great belief in the entrepreneurial spirit, would see that there is potential there. One would think that they would say, "If the private sector is not going to do it, we will do it."

I have not asked the minister in one single case this afternoon to step in and muscle aside the private sector or to take away anything that they are doing and to compete against them, fairly or unfairly. I have not asked him to do that once. What I have said is, "There is a vacuum there and he has a responsibility to fill it." He has a responsibility to move in and do something about obvious vacuums in the economy; that is what I am saying. When there is a community like Sudbury with so many gaps, why does the government not move in and do something about it?

I am not asking the government to push anybody aside. There is nobody there to push aside in these suggestions. The Treasurer cannot use the argument, "No, we believe in free enterprise and the private sector knows best." The private sector bloody well does not know best or it would have done it by now. Those are obvious needs in the community and the government is ignoring them.

I suggest to the Treasurer that I am not being unfair in my criticism that nothing substantial in the long-term sense has been done in the Sudbury basin by the government of the community itself. True, the region has established what they call task forces -- I believe eight or nine of them -- under the direction of the regional chairman, to look into all the different sectors. That is fine. Let them do that. But in the meantime, the Treasurer and his government is using those as an excuse for doing nothing. That is what I find offensive. They are saying: "No, we cannot do anything. Those regional task forces are at work."

The Deputy Minister of Northern Affairs is representing the Ontario government working with those task forces. He is the same deputy minister whose minister put a major project on hold. You know that old expression about putting Colonel Sanders in charge of the chicken coop. The Treasurer should not be allowed to use those well-meaning task forces as an excuse for inaction on the part of the government. That is simply not appropriate. I urge the Treasurer to think about what is going on in that community.

We are not prepared to write off those 4,500 jobs in Sudbury. We do not think there is any need to. We think there are obvious needs in the community that could be met and that the government has an obligation to do something about it. I am not saying that every point in our document A Challenge to Sudbury has to be acted on by this government, but I would feel a lot better if I thought the government had treated the document in a serious way, such as the way Inco treated it, for example. We have seen no evidence of that.

For those reasons, I am very disappointed in the response of this government.

Hon. F. S. Miller: Mr. Chairman, the member for Nickel Belt and I have exchanged points of view frequently when he was my critic, and it seems to me he moves with me from ministry to ministry. I thought he did Natural Resources at one time, did he not? He was always there.

Mr. Laughren: Yes.

Hon. F. S. Miller: He and I agreed after all these speeches on only one thing: short speeches are best.

Mr. Laughren: I just made a short one.

Hon. F. S. Miller: He and I both have --

Mr. Haggerty: Something in common.

Hon. F. S. Miller: Both of us have exactly the same attributes that way.

Mr. Boudria: I think both of you are socialists.

Hon. F. S. Miller: Yes, true.

I accept the fact that he is deeply concerned about his problems in the Sudbury basin and that he puts forward his suggestions about state intervention from a firm and unshakeable belief. I can only say that we have been working hard to find some solutions for Sudbury. There is no easy one. I wish it had the same immediate chance of recovery when the economy comes around that Windsor had, but it is not as likely in Sudbury as it is in our manufacturing cities. I am afraid we both share that fear.

I also suggest, funnily enough, that part of the reason for that is that people have practised exactly the beliefs the member espoused; that is, that some companies should produce products, regardless of profit or loss or market conditions, just to maintain employment. He has seen that happen in Cuba. He is seeing that happen in Russian-controlled areas. He knows that is plaguing the market, which is already tremendously depressed: $1.545 US per pound for nickel against the $3.02 that it should be.

Mr. Laughren: I do not recall demanding that.

Hon. F. S. Miller: No, I did not say that. I am simply saying that believing in a socialized system, where the state is the owner of a company, and the member's party has officially espoused that, usually requires the state to produce. I heard Mr. Patterson being quoted from Thunder Bay as saying that there should be some kind of guaranteed output of nickel from the Sudbury basin and that Ontario, in some form or other, whether it be shares or future dividends or whatever, should take some equity in the company to do so.

I can only say that where that is practised, as it is now being done in pulp and paper in the Scandinavian countries and as it is now being done with nickel in Cuba, it results in a total dislocation of the rest of the market forces: the commodity prices system breaks down. The sufferers are those in countries such as ours -- and indeed they are not limited to countries such as ours: I went behind the east-west curtain not long ago to Yugoslavia, where their metals industry was in disarray because of the predatory pricing of some of their own partners, and they simply could not justify production in that country.

I cannot give any more specific answers to my friend. I do take his points seriously. We have debated them many times. I wish I had more to add at this point, but I do not.

5:40 p.m.

Mr. Haggerty: Mr. Chairman, I was not going to get into the debate, but the minister suggested something to me about a trip out west with a select committee dealing with the question of whether we should drop the Ontario Municipal Board. I believe we were in Winnipeg at the time, and for some unknown reason the bottom fell out of that committee and we did not meet the people we were supposed to meet out there.

We had an afternoon to kill, so I saw the movie Boxcar Bertha, but I thought perhaps the Treasurer did not get the same views or the same consensus from it that I did. He talked about productivity, and I thought that movie, if anything, did hit on productivity. It was the struggle of the unions, the working class, the people who were working on the railroads to get a fair shake from the industry. In other words, they wanted decent wages for the productivity they were giving, for the labour they were providing to the industry.

Hon. F. S. Miller: I don't recall your selling it to me on that basis.

Mr. Haggerty: Oh, I thought it was good. There is no doubt about it, there was quite a bit of violence in it, but it was a good movie. It told the story of the struggle of the working class, the people working for the unions, trying to establish a union so they could get a fair shake from the industry. If we look at the Regina Manifesto of 1935, I suppose we can be thankful today that we have unemployment insurance or, following the example of the uprising at that time we would probably have the same thing here in Ontario.

The minister talked about productivity and expressed his viewpoint. He spoke about Japan and how they have overcome their problems. I discussed Japan in the House a number of years ago and I noted the co-operation among industry, government and the working people, that they all have a stake in the economy and some say in it. But here in Canada we do not seem to have that co-operation from government, industry and the working people or the unions to have some input on the direction the country should be going.

The Treasurer talked about taxes and the concessions given to the pulp and paper industry in Ontario. The member for St. Catharines raised a valid point that you should be able to provide assistance in different communities under the same terms.

It is rather odd that the Department of Regional Economic Expansion program, for example, came into the Niagara region but it went to only one industry, and that was the Ontario paper industry in Thorold. They received substantial funding and grants to assist them in modernizing their plants so that they increased their productivity with less manpower. Of course, that means that while the government is moving in this direction to encourage new technology and research in this area, it is going to improve productivity.

That brings us to the point of former Treasurer Darcy McKeough as it related to the forecasting of the ministry on job opportunities, the way the economy is going to go and what benefits there are going to be to the persons employed in industry and working for the government. Back in 1972-73 we had a recession, and one way the Treasurer overcame high unemployment at that time was to come up with a figure of 5.6 per cent. He moved the well-established benchmark of three per cent for totally unemployed persons, persons for whom you will find nothing in this society and who will remain on the unemployment rolls year after year.

The Treasurer talked about the technology that is there, the research that is being done and the robots that are going to be used in industry, which will even take a number of skilled jobs. We see it in the automobile industry already, where they are tooling up. That is where Japan has the edge on us today, because they have moved into this area.

The question comes up: what are we going to do if we go into this area of new technology where machines replace the human element on the assembly line? It means we are going to have to move from perhaps 5.6 per cent to 10 per cent, to say these people are going to be permanently unemployed. That is how it is going to end up if we move into this area. What are we going to do with these masses of people who will never be able to get back into the working field? With new technology and electronic devices coming on to the market today, the jobs will not be there.

This is an area this government and the federal government have failed to look at. I believe unions have brought to the attention of governments that they are going to have to do something to create or guarantee or secure jobs in this area. I suggest the government should be making some economic models to find out, and it should be honest with the people and tell them the jobs are not there.

This morning I attended a meeting with manpower services in Port Colborne along with some mayors, heads of the municipality and some of the regional councillors. The figures that were thrown out to us there through the questions being asked concerned the unemployment rate in the Erie riding, particularly in Port Colborne where Inco shut down. I believe the company may be calling back a number of employees some time in February, but it has been shut down for six or seven months. It is the same thing in the Sudbury basin. Unemployment from October to November increased 13.2 per cent.

Going back a year, since the same period last year, unemployment has increased 120.8 per cent. That is in Port Colborne. I do not know what the true figures are in Fort Erie, but I would say they are just as bad in that area where Horton CBI Ltd. has shut down almost completely. Fleet Industries is just hinging there right now. Even the $1-million grant that was to be provided to the company to set up 400 new jobs never came about during the last provincial election. I suggest there is a serious problem there.

There is this quick-fix program that the federal government, along with the province, is involved in; that is, the new employment and expansion development program. I call it a quick-fix program, because I do not think anything is really going to be resolved by it. During our discussions this morning, it became clear that municipalities are not even aware of what part they are going play in it. The question is, where are they going to get the funding without increasing local municipal taxes? They are at the limit of their taxation right now, as is the provincial government.

There is going to have to be more dialogue on this NEED program. What jobs are we looking at? How permanent are they? I think one criterion is that the job has to last a minimum of three months to 12 months. I suggest where the crisis is now, these jobs should be there. There has been enough discussion between the federal and provincial governments since last August or early September on how they were going to move in this area. They are almost pulling the same stunt as is being pulled on the American side. They are talking about it, but that is about all. The jobs are just not materializing. I think it is going to take until April to get these jobs programmed.

On Friday, I attended a sod turning in Ridgeway in the construction of a new senior citizens' building there at a cost of $1.2 million. It has been six years on the drawing board, trying to get government to move in this area with some assistance. If it had not been for the Lions Club in Ridgeway, it would never have got this far. The sod turning took place on Saturday. The contractor was there. He has the footings in, and he said, "That is as far as we are going to go, because it would cost us too much to continue on the construction in the winter months."

I suggested to him that perhaps he should be looking at the NEED program which might provide some funding. The cost of putting up the plastic windbreaks and adding heat to the project may encourage the contractor to continue for four months instead of waiting until next spring to get on with the job. In that way, there would be 40 or 50 jobs and the spinoff to the suppliers in the area. That certainly would create jobs.

5:50 p.m.

I do not know if this program is going to give any assistance in this area or not, but there are many areas and costs involved in the winter projects that will probably be held up in limbo because of the municipalities being without sufficient funding. I hope I am wrong in my projections or forecasts and that there will be some jobs, but I hesitate to say there will be under the criteria that are set up. I suggest to the Treasurer he should have been on this program long ago, knowing full well he was going to have to come forward with some quick-fix program for unemployment in the area and across Ontario.

I listened to the minister in his response to the member for Rainy River. He talked about industry and upgrading and modernizing in the industry. One of the problems they found in the United States, and they are in the same fix we are here, is that the Japanese seem to have cornered the market in the automobile industry.

They have also cornered the market in the area of machinery. I visit some of the industries in the riding of Erie. There are a number of new computer machines, the numerical-control machines that are computer-programmed for engine lathes and boring mills. There are milling machines and drilling presses, but those machines are not manufactured here in Canada. Some are manufactured in the United States and others are manufactured offshore in Japan and western Europe.

I think one of the faults I can be critical of is the tax rebate that was given to industries in the past. The government would come out with a program and say, "If you buy or purchase such equipment to modernize your plant, that will give you certain tax concessions on that production machinery, such as reducing or removing the sales tax." Assistance was given to them in that area, but that did not bring new jobs.

It did not bring new jobs because when one has plant shutdowns or the recession we are in today, some of that equipment, as I understand it, has been removed from Canada or Ontario and gone back to the United States. In some cases, the machines are even located in Mexico to help improve the automobile industry there.

I am even a little concerned about the recent settlement of the employees with Chrysler. There may be a side effect that will cause some problems here in Ontario in that some of the equipment in the industry will be pulling out of here and going back to the United States and cars will be produced in the United States to get around some difficulties they may have here in Canada in the auto trade pact and with the negotiating difficulties. There should perhaps have been a ministry watchdog in this area to see that this machinery did not leave Ontario. I understand it has.

From my experience working in the paper industry and looking at the new equipment that is being installed today to modernize some of the plants, for the past 20 years that equipment, the new machines, was all manufactured in the United States. I think the coating and colouring machines were produced and manufactured in Holyoke, Massachusetts. They are quite a machine. The coating machines, such as the gloss coater, were all produced over there and manufactured in the United States.

I do not know what is taking place now with the papermaking machines, but I can only assume some have been purchased offshore in Sweden, Norway and other places. Perhaps they are further advanced in the pulp and paper industry in the area of papermaking machines. I do not know if the Treasurer has done any study in this area as to the machines being built here in Canada. Even parts of them should be built here in Canada.

There has been some discussion about the manufacturing of mining equipment. Perhaps the minister is not aware, but there is an industry in the town of Fort Erie and part of it is in Niagara Falls. They call it Unit Rig and Equipment Co. (Canada) Ltd. They build huge mining equipment for open pit mining and in some cases the huge diesel-electric machines required in the mines and pits. They are made in Fort Erie.

But much of that equipment is exported. I do not think too much of it stays here in Canada. I understand they have a large export and are very successful in that area. So there is an industry that does manufacture heavy mining equipment here. It is Unit Rig in Fort Erie and Niagara Falls. Perhaps my colleague the member for Nickel Belt and some in the ministry are not aware of that. I suggest that is an area we should be looking at.

The Treasurer talked about the matter of the Canadian dollar. Years ago, if the Canadian dollar was lower than the American dollar we would have all kinds of investment over here. The forecasting from that side over there and from the ministry has been wrong, because we have not seen the investment. They have definitely been wrong in the forecasting in this particular area -- that it was going to create industry and capital was going to come in. It has not come about, even at 20 per cent. The only way the Americans invest money here is when they come into Fort Erie to buy cheap Canadian gas at 40 cents on the American dollar.

Interjection.

Mr. Haggerty: We have a few moments to go here. Oh, the gas? I do not know if it is finished or not, but it is there.

I look at the minister's estimates, and the budget he introduced last spring with some tax increases that related to income tax in the last two years. There were benefits, and I think the government saw this, there were certain benefits to them through high inflation. They certainly did generate additional revenue.

One area through inflation was higher incomes. One of the problems is we have a cost-of-living allowance formula built into many contracts, even among the civil servants. As long as the inflation rate remained high and the COLA formula was there, that meant higher income and higher taxes generated by the government, so they were not too concerned about the high inflation rate.

They mentioned interest rates. There are certain individuals in our Canadian society who really generated additional income, and in the long run I suppose on the high interest rates people who had savings generated perhaps 18 per cent return on their money, 17 per cent or 15 per cent; in the long run it meant higher taxes for the government when the pink slips came out at the end of the year.

In one sense, they encouraged inflationary practices. They are the ones responsible for it. I do not think it was the working people who were encouraged in this area to keep it that high.

I am concerned about unemployment, in the area of Fort Erie particularly but in other areas in Ontario. I suggest to the minister there is one area where I think we are looking for long-term employment, long years of manpower that is required. I think of the polar gas line, if the minister is listening to me.

I understand through the Ministry of Revenue and the Treasury they have already provided about $16.5 million in assisting in research in this particular area of bringing the polar gas down from the Arctic islands into Ontario and then perhaps to the east coast. I think this is a good program, if the government would get off its good intentions and move in this area.

I think of the steel mill in Welland, Page-Hersey, that is currently working about four weeks and then is shut down for two weeks. It is a good thing the government has come out with the work sharing program or there would be more people on the unemployment rolls, more than the 500,000 or so in Ontario that are unemployed.

I suggest that if the government wants to get into a good program it should get on with the federal government and construct that pipeline. Just think of the number of jobs that would be created in the steel industry; the number of jobs in Welland producing the 56-inch or 48-inch pipe in that plant down there. Think of the number of man-hours that would be applied to the construction of laying it in its place in the field from the Arctic islands to down here. Eventually, you will have to get into this area because the federal government, with all the handouts to the oil industry now, is putting it in the wrong area. They found the gas up there. They have to find a way of getting it down here.

If the Treasurer wants to create permanent jobs instead of the quick-fix jobs they are talking about, the government should be applying its initiative now jointly with the federal government and all the provinces. Eventually, they are going to have to have it. We can be self-sufficient in energy, if he takes this route now.

It being six o'clock, Mr. Chairman, I throw this out to the minister so that he will consider that proposal.

The House recessed at 6 p.m.

20 décembre 1982