Journal des débats 1983-févr-07 | Assemblée législative de l'Ontario

Mr. Speaker: Before proceeding with oral questions, I think it would be appropriate to point out to all honourable members the provisions of standing order 27(e), pertaining to the putting of oral questions. I quote directly from the standing order:

"In putting an oral question, no argument or opinion is to be offered nor any facts stated, except so far as may be necessary to explain the same and in answering any such question, the member is not to debate the matter to which it refers."

I ask all honourable members to please take note of that, and I ask for their co-operation.

Mr. Nixon: Why would you raise that at this time?

Mr. Speaker: I thought it might be appropriate.

ORAL QUESTIONS

STATUS OF RENTAL BUILDINGS

Mr. Peterson: Mr. Speaker, I have a question for the Minister of Consumer and Commercial Relations in regard to the status of Kilderkin and Maysfield residential buildings, which were not part of the Cadillac Fairview deal or of the big flip and, therefore, as I understand it, not part of the interim receivership order obtained last week.

When I asked the minister about this matter last Thursday, he said:

"With respect to other buildings that may be operated by Kilderkin or by Maysfield Property Management Inc., as and if information evolves or develops which allows the government, through the registrar, in whatever role he may play, to exercise options available to it, whether or not they are exactly like this, only the facts can direct.

"In the meantime, tenants should continue to pay rents as they ordinarily have until either someone with a mortgage exercises an option, as someone in Ottawa has done, or some other court order or other contractual arrangement is made clear to the tenants."

Given that in a large number of cases Seaway or Greymac is the mortgagee in question, and given that the government is currently running these operations, can the minister indicate clearly whether Kilderkin or Maysfield Property Management has been in default on any mortgage loan owing to Seaway or Greymac, apart from the Cadillac Fairview deal? If so, what action has been taken by the ministry in this regard?

Further, what is the financial state generally of Kilderkin and Maysfield with respect to their ability to meet their current obligations?

Hon. Mr. Elgie: Mr. Speaker, I do not have the precise information with me with respect to the status of other mortgages. I assume that would be made available to me when Touche Ross, acting on behalf of the registrar, presents me with the information in a final form.

With respect to Kilderkin and Maysfield, the only information I can provide is information that was tabled before this House with the Woods Gordon report. In that report, and to the best of my recollection in the Touche Ross interim report, there was no satisfactory evidence in the records of the trust companies as to the ability of Kilderkin to meet its obligations.

Mr. Peterson: The confusion does not help a number of tenants. Let me give the minister an example. At 746 Fanshawe Park Road, London, tenants have been paying their rent cheques to Kilderkin. They received a notice on January 28, 1983, in which it was asked they begin paying their cheques either to Carfrae Estates or Key Property Management.

Certain tenants made inquiries at that point. The confusion deepened. They were told by the superintendent, "Maybe you shouldn't pay your rent to anybody until this mess is cleaned up." More recently, over the weekend, there was a notice on the door saying: "Hang on to your cheques. There will be more news at the beginning of the week."

I am asking the minister whether he can investigate these situations and come forward in this Legislature with a clear statement about the rights and obligations of tenants in this situation. I suspect there are many more buildings than the one I just asked about. Surely he must have some information. Is he prepared to share it with these people who have absolutely no idea what to do?

Hon. Mr. Elgie: I have no problem in acknowledging there may be some difficult situations facing tenants. All I can reiterate is that the registrar acting on behalf of the three trust companies, on the basis of information available to him, has applied and has received all interim receiver in relation to the Cadillac Fairview buildings.

Others, holding indentures or other documents such as a mortgage on the property, have certain rights they can exercise to require payment of rents.

All I can tell the honourable member is that, when the government feels there is evidence of appropriate circumstances to justify consideration of measures it will do so. I can understand it would be of assistance to allay some of the concerns of the tenants. In the meantime, tenants will have to carry on paying rent as they ordinarily have in the absence of good and satisfactory evidence that they should pay it elsewhere.

Mr. Rae: Mr. Speaker, I take it that what the minister is saying is any mortgage holder on any of the other 10,000 units is entitled to take whatever private action he is entitled to take and, basically, all the tenants in those buildings are going to have to be left to the mysteries and miracles of the marketplace to determine who their landlord really is and to whom they should pay their rents. Does the minister really believe in this day and age that is a satisfactory solution for 10,000 tenants?

Hon. Mr. Elgie: Mr. Speaker, I have never indicated that the government, along with all members of this Legislature, does not accept some of the legitimate concerns that tenants have about this issue. Although the member may look on it as a mystery of free enterprise, all I am saying is I look on it as the judicial system under which we operate and the rights of people under it in terms of their mortgages and other documents. I think the member really believes and understands that himself in spite of the fact I know he has to say these things. I can only repeat what I have said to the Leader of the Opposition.

Mr. Peterson: Surely the minister must have some information with respect to the financial status of Kilderkin and Maysfield in regard to the capacity to meet their mortgage payments. Do they have the ability to bank or do they not? Who is responsible for the deposits they have collected? Who is to pay the interest to the tenants on those deposits, because they are in control of a large sum of money in a trustee relationship with those depositors?

There are a number of questions as to who is responsible for those deposits and who is going to pay the interest on them. Surely the question about the financial status of Kilderkin and Maysfield, which bears directly on the rights of tenants, is not beyond the minister's responsibility to know about and to answer in this House.

2:10 p.m.

Hon. Mr. Elgie: It is not a matter of avoiding answering anything in this House; it is a matter of accepting legal responsibilities that may flow to the government as a result of information it receives which leads it to certain conclusions. When that occurs, the government will consider what steps might be taken. In the meantime, I can only reiterate what I have said before. Again, with respect to Kilderkin and Maysfield, I do not have any final detailed financial information about those companies; I do know there is an interim receiver-manager currently at Maysfield with respect to the Cadillac properties.

RESTRAINT ON DOCTORS' FEES

Mr. Peterson: Mr. Speaker, I have a question for the Premier as regards the doctors' participation in Bill 179, the restraint bill. The Premier said on September 21 that he would "deal with the medical profession." On September 28, the Treasurer said, "I sincerely hope that there is an understanding on the physicians' side of how important it is for them to be seen in helping in this plan." On September 29, as I understand it, the Premier met with the Ontario Medical Association; on October 15 in this House, he said he did not make any special requests of the doctors.

May I ask this question, so he can bring us up to date? Is the Premier dealing with the doctors? Has he made any special requests of the doctors? Can he tell us about the status of any negotiations he is having with them with regard to their participation?

Hon. Mr. Davis: Mr. Speaker, I am in the process of having a further meeting with the Ontario Medical Association. I am not sure whether the date has been set.

Mr. Peterson: Can the Premier tell us when he will be having that meeting? What are going to be his requests of the OMA? Does he anticipate co-operation by the members of the medical profession; and if they are not prepared to co-operate voluntarily, what is the Premier's position?

Hon. Mr. Davis: I very rarely do anything in anticipation. I will not prejudge exactly what may transpire and, in that I am not prepared to do that, I am not prepared to get into hypothetical discussions on matters that may or may not emerge from that meeting.

I may know the date of the meeting later this week and if I do, I will be delighted to share it with the honourable member.

Mr. McClellan: Mr. Speaker, since it is patently obvious to everybody the doctors have told the Premier and his Minister of Health (Mr. Grossman) to get stuffed, does he plan to take another look at the Ontario health insurance plan premiums and perhaps even consider rolling back the quite outrageous premium hikes that took place just prior to the passage of Bill 179?

Hon. Mr. Davis: Mr. Speaker, I do not want to be in the position of either defending or being critical of the Ontario Medical Association at this moment. That is not my approach.

I do have to disclose to the House, just in case somebody believes the rhetoric used by the member for Bellwoods, that the Minister of Health and I received no such instruction from the Ontario Medical Association. People may have said that to the honourable member on many occasions, and probably with justification, but certainly that has not been my lot in dealing with that very important profession.

I will relate to the member that in my discussions with the medical association, they were very quick to seize on the position of the New Democratic Party, which they read to me on two or three occasions, I think from a speech delivered by the member's leader in Goderich if memory serves me correctly, where in one paragraph of that speech he said, "A deal is a deal and we would not interfere whatsoever." That is a very brief summary of the position of the New Democratic Party; I know the member does not like to be reminded of it, but I just tell him that sentence did emerge in some of our discussions.

Ms. Copps: Mr. Speaker, does the first minister not realize that in refusing to bring the doctors under the wage restraint program, he is applying a double standard for all and sundry in Ontario and that if he really wants the public to support the six and five program it should be applied to the medical profession as well as to other people who are taking from the public purse?

Hon. Mr. Davis: Mr. Speaker, I would never want to correct the terminology of the honourable member; she is very experienced in these matters. I guess the medical profession could be described as "taking from the public purse." There are some members of the medical profession who might say they are earning their living; they happen to be part of an insurance scheme in which the insurance payments come from the people of Ontario. I think there is a distinction between "taking from the public trough" and being part of an insurance scheme in which they are participants, some of them without total enthusiasm. I know the member is aware of that and does not agree with it.

It also came to light during those discussions that the Liberal Party of Ontario regards doctors as being more or less salaried public servants. That party does not really consider the medical profession to be a group of self-employed professionals and has difficulty in observing that not-too-subtle distinction.

Mr. Peterson: Mr. Speaker, I think the Premier knows full well that is not our position. He is putting policy suggestions into the mouth of this party. I do not think --

Mr. McClellan: Is this our daily point of privilege?

Mr. Speaker: Order, please. I ask the Leader of the Opposition to resume his seat.

Interjections.

Mr. Speaker: Order.

SECURITY TRUST CO.

Mr. Rae: Mr. Speaker, my question is to the Minister of Consumer and Commercial Relations. It concerns the statement he issued late Friday with respect to Security Trust Co.

The minister indicated that he ordered an independent appraisal of the properties at 777 and 787 Jane Street some time ago which determined that the Dresdner Bank of Canada first mortgage and the Security Trust second mortgage each falls -- I presume the statement really means both fall -- within 75 per cent of the value of the real property.

I believe the appraisal carries the date February 4, 1983. Can the minister tell us when the appraisal was ordered, when it was carried out and by whom it was carried out? Is the minister prepared to make that appraisal public?

As the minister will appreciate, on the face of it there appears to be something of a contradiction between the definition and concept of value that the ministry is putting forward in this statement and the concept of value put forward both in the House and in committee with respect to Cadillac Fairview.

I remind the minister that on January 28, 1983, in the committee, Mr. Macdonald said, among many other things, "The real estate value is the value that property will get in the market when it is re-exposed." This property on Jane Street was re-exposed on November 22, 1982. How can the market value as determined on November 22, 1982, be so different from the appraised value -- $600,000 at least; we do not know what the final appraisal value is -- as indicated some eight weeks later?

Hon. Mr. Elgie: Mr. Speaker, I know this has been a very exciting weekend for the honourable member. I want to join with others in congratulating him on an event in which he had a very brief part at the very beginning. His wife should really receive the congratulations. I know he would want to do that himself if I were not doing it.

Hon. Mr. Walker: The child may be a Conservative.

Hon. Mr. Elgie: One never knows; they change so often politically in that family.

I remind the member that in addition to the remark he quoted from the statement I made, I also said: "The company has an excess borrowing base at the present time and could seek new guaranteed funds if it wished to do so. The company has liquid funds in excess of the requirements under the act. Security Trust is a small company that, as a business policy, does not accept deposits from the public but raises funds by selling guaranteed investment certificates."

I have had that position with respect to that company confirmed again this morning by the registrar.

2:20 p.m.

The registrar, in line with his duties, retained an independent appraiser to evaluate the properties. I believe that was during the second or third week in January. He received a verbal report some time last week and did receive a written report, either today or Friday, confirming it and confirming that the two mortgages the member has referred to, the Dresdner Bank mortgage and the Security Trust mortgage, if my recollection fails me not from a half an hour ago or so, were approximately 58 per cent of the value in terms of the Loan and Trust Corporations Act, and that the appraisal was carried out along the lines of the view we have, and I am sure he has, with respect to value.

I can understand the member has some concerns and some agitation about it all. I can particularly understand those concerns when I recall the words of the young lion on January 20 -- that is the member I am talking about --

Hon. Mr. Walker: A lion?

Hon. Mr. Elgie: The tiger is you. Oh, you are the tiger, he is the lion.

Hon. Mr. Baetz: A lion puff.

Hon. Mr. Elgie: That is right; he is the puff lion and you are the puff.

Let me say this, and I say this not as a criticism, because I agreed with the member totally when he said this on January 20, 1983. This should be something he should remember, having said over the weekend that his is a party interested in policy and people, not in scandalmongering.

He said: "It would be true to say that if any one of the minister's officials, or indeed he or anyone else, made a public statement saying such and such a company was under investigation, that would have an immediate consequence on the confidence any depositor would have in that corporation. If the minister were wrong, if there were no problem, then the minister would be not only being very unfair to the company but obviously also opening himself to the very real legal action that the company would certainly be entitled to take."

My advice to the member is to take his own advice.

Mr. Rae: I do intend to take my own advice. I do not intend to take the implications of what the minister has been trying to say.

I simply say to the minister, there are times when unless questions are raised, we in the opposition are not doing our job. There are certain questions that have to be raised with respect to this company and other companies. I repeat what I say: unless we raise these questions, we are not doing our job.

I am sure the minister will be aware the financial statement of the company issued in November 1980 indicated three things.

First of all, the company, being owned by High City Holdings, which as the minister will know is the owner of virtually all the shares of this company, says: "During the year, the company purchased 37 mortgages from its parent and another related party at market value. In addition, the company entered into an agreement to purchase, from its parent company, an equity interest in real estate."

There is an additional section -- Section 9: Compliance with the Loan and Trust Corporations Act -- which contains two statements.

"The company's investment in real estate of $200,000 is in excess of its capacity for direct investment in real estate. The company's board of directors did not approve the purchase of the equity interest in real estate referred to in note 8, as required by the purchase agreement. Under the agreement, the parent company will repay the investment without interest or deduction by February 23, 1981."

The statement goes on to say: "At November 30, 1980, the company has invested in excess of 15 per cent of its capital and reserves as defined by the Loan and Trust Corporations Act. The company has agreed with the Ontario registrar of loan and trust corporations that it be permitted to correct its position in respect of these investments."

The licence of this company, as the minister well knows, was for 1982, at least starting in June, on a three-month renewal basis. As of December, as the minister also will know, that three-month basis was shifted to a one-month basis. Why was the licence switched from a three-month basis to a one-month basis?

If the situation where the company was no longer in compliance with the Loan and Trust Corporations Act was true in November 1980, and I gather the minister is saying it is not true as of February 4, 1983, can he inform the House when this was no longer the case and why the company was and is today working simply on a month-to-month basis?

Hon. Mr. Elgie: Rightly or wrongly -- I know the member will appreciate this is a very difficult area both for the government and for the public as well as for the opposition, and I ask the member to try not to be critical -- let me say very clearly it is terribly easy to destroy confidence in institutions in a country and very difficult to build confidence. I am in the job of building confidence, and I hope the leader of the third party is not in the job of trying to tear it down.

Now, let us get back to principles, because that is what I read over the weekend the leader of the third party is interested in: principles and policies. He said the first principle was to be careful not to say that a company was in trouble for fear of the consequences both to the depositor and to the individual making the statement. The member will recall that when he made that statement, I responded to him. I congratulated him and said he had spoken quite honestly about some of the difficulties registrars must have. Without talking about any specific case, he spoke about a variety of things.

I went on and said: "That is one of the problems the registrars have, but they also have the situation where they are right: there is something wrong but they feel it can be corrected if it is not made public at that moment, because at the very moment it is made public there is a problem; there is a run and the whole thing is over." Often we find public disclosure of correctable bad administration can be just as fatal as incorrect allegations of wrongdoing; which is what the leader of the third party expressed concern about.

I do not say any of these are easy judgements. They are all very difficult judgements. Surely the member must acknowledge at least they are decisions and problems that individuals involved in regulating institutions, whatever they be, have to carry as a burden. Certainly the review we are carrying out will help us to evaluate just how effective we have been in walking that line and doing the right things. That still holds true today.

I do not intend to go through a month-by-month review of the registrar's role vis-à-vis certain companies and why there were certain things. With respect to the last licence the member referred to, from the end of December to the end of January, the issue there was appraisals and that has been cleared up now.

Mr. Rae: Greymac Trust was on a month-to- month basis from June 30, 1982. Perhaps if the public had known that, they might have been warned and would have known what to do. Seaway Trust was on a month-to-month basis from January 1982, and on a three-month licence from September 30, 1981. Looking at the balance, one of the things one has to weigh in the balance is the protection of the public and depositors. Perhaps that is why some of these things have to be made public.

Mr. Speaker: Question, please.

Mr. Rae: My question to the minister is this. Since 1978, the following directors have resigned from the company: Simmons, Handleman, Senator Neiman, Mr. Wilson, Robert Macaulay, Jeff Lyons and, as of February 2, 1983, Mr. Sarpkaya, who the minister will know was the senior vice-president and the secretary-treasurer of the company for some years.

As a result, the following people are still the directors: Mr. Fischtein, Mr. Konopny and Mr. Sherman, who the minister will know are also the three directors who are listed on the only forms available, the only information available to us from the Ministry of Consumer and Commercial Relations, from High City Holdings.

Can the minister tell me what correspondence or communications took place between any of these directors and the ministry and any of the officials in the ministry with respect to the management of this company?

Is the minister saying it took from November 30, 1980, until the beginning of 1983 for this company to comply with all the requirements of the Loan and Trust Corporations Act? Does the minister not think that is a fairly long time for the company not to be in compliance? He still has not given us an explanation why the company was on a month-to-month basis and not on a three-month, six-month, yearly or permanent basis. I remind him a great many companies in Ontario are on a permanent basis.

2:30 p.m.

Hon. Mr. Elgie: I have some appreciation of the interest the member has in finding out a number of things, but I have certain obligations to live up to.

Let me correct a couple of things. The member mispronounced the name of the Honourable J. Neiman. It is the Honourable Joan Neiman -- I do not want to suggest what party she is from -- class of 1954, Osgoode Hall, and she is the wife of Clemens Neiman. If we are trying to run out a list of names that have some significance for the member, let us all join in the fray.

The member commented on the availability of information about directors. Ordinarily, information about resignations is filed on an annual basis and had not been considered a public document. I changed that in December and withdrew the exemption under the Corporations Information Act. We now require that any director resigning must advise the registrar within l0 days and the document is public. From now on, there will be total public availability of any information about who has resigned and who has not.

As to why they resigned, I suspect that is something personal and the member may wish to phone somebody if he has not already done that. I do not follow his personal life so I would not know who he phones, particularly at tender moments like the moments he was involved in over the weekend. I do not have any idea why they resigned. To the best of my knowledge, I have no knowledge of any objection, for example under section 193, being filed by any of the directors, but I would have to have the record specifically reviewed as to that. I have not been advised of anything as of this time.

CLOSURE OF CHRYSLER PLANT

Mr. Rae: Mr. Speaker, my question is for the Premier. It concerns the situation at Chrysler and the discussions we understand are about to take place between the federal government and that company with respect to its obligations under the auto pact and its obligations with respect to investment in Canada. Chrysler has announced it is closing the spring plant, is cancelling the diesel engine plant, is cancelling the research and development centre, is planning to phase out car production in Canada and is planning to maintain the T115 wagon in Ontario.

On January 17, 1983, the Minister of Industry and Trade (Mr. Walker), instead of indicating his disapproval of or disagreement with what Chrysler was doing, simply indicated that he was aware of what it was doing and he was planning to inform the employees and so on. He said he was aware it was happening and felt the closure of the spring plant had been in the works for some time.

Can the Premier tell us what his attitude is with respect to the closure of the spring plant when we know that Mr. Lumley has indicated he does not believe Chrysler can unilaterally close its spring plant and cancel the diesel plant at the same time? Is that the view of the government of Ontario as well, or is it the view of the government that what Chrysler has announced is entirely in keeping with its obligations under the auto pact and is entirely all right with the government?

Hon. Mr. Davis: Mr. Speaker, there are really three issues. We should be careful not to confuse them. There is the distinction as to Chrysler's obligations under the auto pact as we know it. There are obligations that would flow from agreements entered into with the government of Canada for certain loan guarantees. There is our view as a government as to what it is doing at present. I do not have the figures in front of me as to whether the closing of the spring plant will alter the dollars significantly in terms of the auto pact. With respect, that is a separate issue and should be dealt with separately.

What we are faced with at the moment is a decision by Chrysler in relation to the spring plant where, and I am going only by memory, Chrysler gave a commitment to the government of Canada that in exchange for the loan guarantees the spring plant would remain open. I am not 100 per cent sure of that but that is my best recollection.

The diesel plant is a related but somewhat separate issue in that it came along after the original loan guarantees from the government of Canada. That negotiation started some months later, not really too many months ago. Ontario gave an indication of its support for the proposed arrangement with Chrysler and Massey-Ferguson -- really probably Perkins -- in the expectation that the diesel plant would be a world resource for this size of diesel engine. We were all excited by it and very optimistic.

As for Ontario, nothing was ever formalized other than our degree of participation. That was related to the commitment given by Chrysler on the research facility. We had not advanced any money on that and were not obliged to advance any until Chrysler itself was ready to move ahead with it.

I wish the minister were here. If he were, he might amplify my remarks. It is fair to state that Chrysler does not have any legal obligation to the province at this moment because it has given no indication it wants to draw down on that guarantee for the research facility. I cannot comment as to what extent they may be abrogating any arrangements they have with the government of Canada.

If the member is asking me for my personal point of view, I am obviously disappointed they are proposing to close down the spring plant and I am disappointed the diesel facility is not moving ahead. This decision was made only recently. As late as last September or October, all the signals were that we were going to proceed.

Chrysler's decision was occasioned by the stabilization, or even reduction, of oil prices. Due to certain purchasing trends that began to emerge, the potential for diesel at this time was not what was expected in September. I could not explain the market variations in what I think is a relatively short period. So we are disappointed the diesel plant is not proceeding. However, to be honest with the member, I cannot argue that Chrysler is in default of any agreement with Ontario because that came after our initial discussions.

Certainly I am disappointed there is not some passenger car production in this province. I took it upon myself to become somewhat involved in another matter and some of the Windsor members will be critical of me for this but I did it anyway. I tried to encourage Chrysler to give serious consideration to moving the rear-wheel drive production to the American Motors plant in Brampton rather than have it go to St. Louis.

I met the head of Chrysler in the United States during my winter break for this reason. I hope it was not totally parochial; I felt it would be better in Brampton than in St. Louis. The Windsor members will say: "Better in Windsor than in Brampton." Anyway I took it upon myself to meet with Mr. lacocca to explore this with him and he was not unsympathetic. However it is a pragmatic problem. He pointed out that their marketing people have estimated the market for the rear-wheel drive to be roughly 120,000 units in 1983. I hope members will not ask me to explain this estimate. In any event, the capacity of American Motors at Brampton, even if one stretched it, would be only about 80,000 units in the course of a calendar year.

So the decision was made not to move ahead with the arrangement in Brampton, which would have had a three-year production. It was regrettable because American Motors, in advance of the agreement being made -- and they had gone a fair way down the road -- had indicated to the work force in Brampton they would be laid off and they were not in the position to say why. Now that the arrangement is not going through, the work force in Brampton have been notified they will not be getting laid off; the Eagle, the Concord and perhaps one other vehicle will be there.

So if the member is asking me if I am disappointed as to the direction Chrysler is taking with respect to the spring plant and diesel plant, the answer is yes. If he is asking me if they are in breach of the auto pact as a result of this, knowing what their production will be in terms of the van and in terms of the total number of employees in Canada, vis-à-vis Michigan and other states of the union, I think any objective analysis would indicate we have not been on the short end with respect to numbers of employees. I cannot tell the member the mathematics.

2:40 p.m.

Mr. Rae: What I really wanted to get from the Premier, and I am not sure if it was buried in that response, is simply an indication from the government of Ontario as to what its attitude is to the unilateral actions announced by Chrysler. Surely the Premier will appreciate that in the series of negotiations which resulted in the various guarantees there was a process of give and take in which Chrysler committed itself to doing certain things in exchange for certain guarantees from the government of Ontario and the government of Canada. Now Chrysler is indicating it is in a sense withdrawing certain aspects from the package.

My question to the Premier is very simply this: If. for example, the Minister of Industry and Trade believes he can take credit for and co-announce the diesel plant in Windsor, and if the government proceeds to take credit for certain things that have been done, does the Premier not think the government of Ontario has a responsibility to say more than "Oh well," or "I'm disappointed," or "I'm concerned," when these things are cancelled? Does the Premier not think the government has an obligation to express its views directly to Chrysler and to be involved in the negotiations with Chrysler that are going to guarantee and produce more jobs in Canada?

Hon. Mr. Davis: I think we have to draw a distinction again. The Minister of Industry and Trade is now here and can correct me if I am wrong, and I could be wrong. My recollection is that because of the changes that have taken place, any obligations that Chrysler had to us in any legal sense or as part of any loan guarantees just do not exist. I think I am right in this observation and that their obligation, to the extent it is there, is with the government of Canada.

I can express my disappointment about the diesel plant; I have done so both publicly and to the people at Chrysler. But if Chrysler has determined not to move ahead with a diesel plant it is very difficult for government, whether it is the government of Canada or us, to say, "Chrysler, you have to produce these diesels." They have made a decision not to.

With respect to the other plant, which I gather was a part of their negotiations with the government of Canada, I have expressed publicly -- I think I did, certainly, to the Windsor press -- that we were concerned, disappointed and worried about the closing of that plant. But this government, because we are not party to that agreement as I recall it, is not in a position to say to Chrysler Canada, "You cannot close that plant." We do not have the levers. They are not after us for some consideration, for some capital facility or what have you.

If the member wants me to say even more clearly that we are disappointed, I know these views have been communicated to Mr. Lumley. Certainly they have been communicated by the minister and we have stated it here in the House.

But unless I have missed something, and the minister can correct me if I am wrong, I do not believe this government is in a position to dictate to or demand from Chrysler certain things, because we are not a part of a loan guarantee at this moment.

Mr. Sweeney: Mr. Speaker, was it not the contention that the American government's contribution to the loan guarantee and the grants was contingent upon the Canadian government's participation and that the Canadian government's participation was contingent upon some form of participation from Ontario?

The only point I am trying to make is, if this linkage was essential for Chrysler literally to survive, then is there not a relation between what Ontario expected to happen and its participation, even though the participation ultimately was not picked up? Is there not some responsibility on the part of Chrysler to participate in the employment of people in Ontario when we go through that chain linkage?

Hon. Mr. Davis: Mr. Speaker, the honourable member's memory is relatively accurate. There is no question that at the time Chrysler US was negotiating with the US Congress, and that is where it finally was set to rest, we had communications from the government of this country, and quite frankly directly from the then Minister of State for Trade. I think he was the one who called me personally about getting Canada some provincial involvement. The history of this was fairly obvious in that the state of Michigan had given a commitment -- I forget the amount of money involved -- in order to show its participation along with the government of the US.

The member will recall that the federal minister was very much a part of those complex negotiations and, in terms of the taxpayers of this province, did extremely well. While we were supportive of the loan guarantee of the government of Canada, as I recall our commitment was related to a particular facility. I think the amount of money to be expended was in the neighbourhood of $20 million -- I may be wrong in that -- and the Ontario participation was to be $10 million.

Mr. Sweeney: It was all part of the package.

Hon. Mr. Davis: It was and it was not. That was our specific request and that was what Chrysler Canada committed itself to doing. Chrysler Canada has latterly decided not to move ahead with that research facility. There is no question that some of the discussions related to the possibility of the diesel plant did relate to a part of that commitment and we were prepared to negotiate that but if the member were to ask Chrysler, both US and Canada they would say they have announced the closing of this one facility. I think there are somewhere in the neighbourhood of 350 employees involved and the company is relatively confident that the majority of those people will retain work in Chrysler.

Mr. Rae: By bumping through the system.

Hon. Mr. Davis: I am just telling the member the point the company is making. In terms of any commitment to Canada, while some may be nervous that it is a single product, the company is very optimistic about that product and that the actual employment generated by the van -- and do not ask me to describe the van -- will be such that it will more than offset the number of people involved in the trim plant or any other activity.

If the member wants me to restate this to the members from Windsor I have no hesitation. We are disappointed in the attitude of Chrysler with respect to the trim facility. We are disappointed, obviously, that the diesel plant is not going ahead. But I cannot tell the member for York South something that is not factually correct, that we have some lever whereby we can force Chrysler not to close the plant. That is not part of any understanding we have with Chrysler, because we are no longer on the line for any financial commitment or guarantee.

Mr. Rae: On January 17, 1983, the minister said, in responding to questions about the closure: "It has been inevitable that the closure would occur. It has been known for the last year, and today it has taken effect." The Premier also knows that the 350 employees whose jobs are being protected are only being protected by bumping through the system and there will be 350 fewer jobs as a result of the closure of the spring plant. The Premier knows that is how the system works.

Mr. Lumley has stated: "We are not giving up on the spring plant and the diesel engine plant. Chrysler is going to have to negotiate its way out of the agreement." That has been the attitude of the federal government. Why has the attitude of the provincial government been something less than that? Why has the provincial government not been on the line as well, saying that Chrysler is going to have to negotiate its way out of the agreement and that Chrysler is going to have to provide jobs for the jobs lost in the spring plant and the diesel plant?

Hon. Mr. Davis: The member knows far more about negotiations than I do. He has many members around him who are very experienced in this field. How successful they have been is open for debate. It is quite proper for Mr. Lumley to make these observations, because he is a party to the negotiations. Quite frankly, I have not had Mr. Lumley say to me, "Mr. Premier, will you join with me in meeting with Chrysler to say we do not want it to close the spring plant?" He may have been trying to reach me, but I do not think he has.

The government of Canada probably is in a position to exert some influence on Chrysler Canada. Other than some general observations by myself, some words of encouragement or exhortation, we do not have any legal levers to deal with Chrysler Canada at this moment. I have to point this out to the member. If Mr. Lumley calls me immediately and asks, "Will you join us for these discussions?" I will be delighted to do so and I will relate to him and the people at Chrysler what I related to Mr. lacocca when I was trying to prevail upon him to move the rear-wheel-drive production to Brampton.

CASE OF ADY GANDOUR

Mr. Breithaupt: Mr. Speaker, I have a question of the Attorney General in reference to the case of Ady Gandour that I raised with him 10 days ago. I quote the last paragraph of the reasons for judgement of Judge E. G. Hachborn in the case: "Two questions have come to my mind during the course of this case. One is why a charge of assault causing bodily harm was laid against Ady Gandour. The second is why the prosecution was carried on by the crown to its termination," at which time the case was then dismissed. There was an acquittal and, of course, that acquittal was upheld even on a further appeal.

2:50 p.m.

Is the Attorney General now able to answer the two questions that Judge E. G. Hachborn raised? Is he able to comment on the other matter I raised with him concerning the consideration of compensation for legal fees?

Hon. Mr. McMurtry: Mr. Speaker, I am not sure what additional information may have been obtained by my office. I was not in Toronto last week, so I have not had an opportunity to obtain the answers to these important questions, but I certainly will endeavour to do so as soon as possible.

METRO TORONTO BILL

Mr. Grande: Mr. Speaker, my question is for the Minister of Education. What was her response to the concerns raised by the parents about the effects of Bill 127 on school programs? What changes does she intend to make to the bill to meet those deep concerns? The minister will recall that the parents met with her last week some time.

Hon. Miss Stephenson: Mr. Speaker, our most careful and critical assessment of all potential impacts of Bill 127 leads to the firm conclusion that it should not have any effect whatever on the delivery of programs anywhere within Metropolitan Toronto.

Mr. Grande: Am I to understand from her answer that the minister thinks Bill 127 will have no negative effects on special education programs or on English-as-a-second-language programs and that it will not cause small community schools to close down or class size to increase? If the minister says this, can she provide us with her evidence that suggests this will be the case?

Second, is the minister aware that the evidence from Donald Timmins, the superintendent of finance of her favourite board of education, the Metropolitan Toronto School Board, is that the projections for 1983 are that provincial support to the Metro school board will be somewhere between 13.5 per cent and 12.5 per cent? The other day my leader asked her a question in which he noted that provincial support was 15 per cent.

Is she trying to tell us that Bill 127 will have no effect while at the same time she is reducing the grants to the metropolitan school board, thereby cutting the kinds of programs I was referring to and leaving no doubt whatsoever that these programs will be cut, if not through Bill 127 then through a lowering of grants from her government?

Hon. Miss Stephenson: I am sure Mr. Timmins has looked at the increased assessment level within Metropolitan Toronto and made some projections. However, he cannot make accurate projections at this point because the final information is not completed for delivery to school boards, and therefore this is purely conjecture on his part.

The answer to the list of questions the member asked first is that I do not believe it will have any effect on those important programs that relate specifically to special education, French-as-a-second-language, English-as-a-second-language or inner-city programs. it may require all boards to re-examine more carefully whatever policies they have in place regarding the establishment or maintenance of schools with very small enrolments, but that does not necessarily mean they are going to have to be closed. They may, indeed, find some alternative way in which to use the buildings appropriately.

Mr. Bradley: Mr. Speaker, subsequent to her meeting with the Workgroup of Metro Parents the minister was quoted in news reports as saying that perhaps as a result of this meeting certain changes might be made to the bill. This was a news report that came forward.

Is the minister prepared to make any changes at all in this bill, not just in the areas the previous question asked about, to satisfy those who are opponents? Or is she prepared to withdraw the bill, now that she has listened to these parents and the other objectors, and start again the consultative process that is necessary to bring about a useful and satisfactory solution to any of the problems she perceives in Metropolitan Toronto?

Hon. Miss Stephenson: Mr. Speaker, first, there was a very broad consultative process, in which the honourable member played some part, which went on for a number of weeks in September. In addition, I do not believe any one of those members of the press to whom I was talking would have relayed what the member said they relayed, because I did not, in fact, say there was a possibility that there would be amendments.

What I said was that I did not know which amendments I could make which would meet the specific requirements or perceptions of that group of people we met with that afternoon -- and I really do not know, except for the suggestion made by the member that the bill be totally withdrawn.

I would like to remind the member a relatively large number of people are in strong support of this bill, including a very interesting individual with whom I had the privilege of having an unsolicited meeting on Friday afternoon last. I am referring to Senator Goldenberg, who did the examination of Metropolitan Toronto in 1965 and made proposals related to the governance of education, about which he says the principles of Bill 127 are right in line. Therefore, he is supportive of the bill.

Mr. Bradley: The minister should have consulted with the member for Eglinton (Mr. McMurty) and the member for St. Andrew-St. Patrick (Mr. Grossman) before consulting with Senator Goldenberg on this matter.

JOB CREATION

Mr. Bradley: Mr. Speaker, I want to ask a different question of the Minister of Industry and Trade, as the chief economic minister left in the House this afternoon.

In view of the Statistics Canada report from last Friday that the St. Catharines-Niagara area has recorded the highest rate of unemployment in all of Canada at this time, 21.7 per cent, and in view of the fact that companies such as Inter-City Manufacturing and Pyramid Place in St. Catharines and in Niagara Falls have announced they are closing their doors, which has become a common occurrence, what specific immediate action is the minister recommending to his fellow members of cabinet to alleviate the financial burden on those who are already unemployed and to create new meaningful jobs for those who have been seeking them?

Also, would he consider in that examination, an investigation of the use of West German steel on Highway 406, a highway which, oddly enough, eventually hooks up the Queen Elizabeth Way from St. Catharines to the steel production centre of Welland?

Hon. Mr. Walker: Mr. Speaker, all of us were disappointed by the intention of ICG Manufacturing to consolidate in Winnipeg. That is basically the problem. They have a number of factories in Canada and there is an intention to consolidate their furnace facility operation in Winnipeg, which is very disappointing. However, companies do have the right to make business decisions and this is a business decision they have made.

The member for Brock (Mr. Welch) has been in touch with me directly and we have been discussing how we might redeem the situation. It is rather difficult to try to do something for nothing, or to draw blood from a stone. The difficulty here is that the home-building industry has slowed down dramatically and until that comes back up, this kind of industry would not normally pick up.

I have indicated we are prepared to put in there an outside consultant whom we would engage to assess the situation from the point of view of how employees of the firm might be accommodated, whether or not there is an alternative to the proposal and to do a rather speedy assessment as to whether some approach might occur which would keep that factory going or allow it to be regenerated in a new stance. I am cognizant of the fact that while one thing closes down, there are periodically things that pick up.

3 p.m.

The member probably appreciates the news today that Juergen Philipp is going to open and operate a fruit processing facility in St. Catharines that will cover some 50 new employees. Sometimes there is a balancing effect that occurs and I think we have to keep in mind the balancing result here.

With respect to the West German steel, I would certainly be interested in having some discussions about that. This is the first time I have been made aware of that.

Mr. Cunningham: Mr. Speaker, the member for St. Catharines (Mr. Bradley) has made reference to the high level of unemployment in the Niagara Peninsula. The minister will be aware as well that the rate in Hamilton now exceeds 16 per cent.

In view of the fact we are on the verge of starting the new Burlington Skyway twinning process, will the minister take it upon himself to discuss the entire issue of the provision of steel for our highways with the Minister of Transportation and Communications (Mr. Snow)? In the Burlington Skyway project, which will require a great deal of steel whether it is a steel project or uses concrete-reinforced steel, will he ensure we are not in a situation where we would require German or any other foreign steel in this instance?

Hon. Mr. Walker: Mr. Speaker, I would be terribly surprised if anything other than Canadian steel were to be used in the Burlington Skyway twinning.

CLOSURE OF AMERICAN CAN MILL

Mr. Stokes: Mr. Speaker, I have a question for the Minister of Natural Resources. Is the minister aware that American Can Canada has served notice of termination of employment to the 800 workers of American Can in Marathon, which means the town will close down unless a buyer is found in the immediate future?

Is the minister aware of any negotiations with his ministry, the Ministry of the Environment or the Ministry of Industry and Trade that would facilitate finding a new buyer for that mill? Preferably it would be a Canadian buyer like E. B. Eddy, which has negotiated in the past. There should be an effort made to save the 800 jobs in the mill and in the woodlands, and to save that entire community in northern Ontario.

Hon. Mr. Pope: Mr. Speaker, I have been aware for some weeks of discussions going on between American Can and prospective purchasers of the operation. I am not at liberty to name the latter.

I am surprised American Can would issue notice of termination to the employees in that important northern Ontario community. It was my understanding there were at least two viable proposals to purchase the assets of that operation that were being seriously considered by American Can and by government officials at both the provincial and federal level.

I believe it was a realistic expectation that, within the next couple of months, one of those prospective purchasers would finalize its arrangements with American Can, carry on the operation and carry on the commitment to modernize and expand the operation in that community. Therefore, I regret that American Can would see fit to issue those termination notices at this time.

Many ministries of the provincial government have attempted to explain our requirements and to try to accommodate any timetables for expansion to satisfy the requirements of various government ministries for that operation. We had some confidence arrangements could be made that would allow that industry to continue to operate.

I can only reiterate I am very surprised and disappointed at the tactics of American Can in serving those notices at this time. I can assure the honourable member that regardless of the outcome of negotiations between American Can and prospective purchasers we see the provincial government as having a role, through its licensing provisions, in protecting employment in that community. We will live up to our obligations to those workers and to that community.

REPORT

STANDING COMMITTEE ON ADMINISTRATION OF JUSTICE

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

Your committee recommends that Bill Pr10, An Act respecting the City of North York be not reported.

Motion agreed to.

ORDERS OF THE DAY

House in committee of supply.

ESTIMATES, OFFICE OF THE LIEUTENANT GOVERNOR

On vote 101, office of the Lieutenant Governor program:

Hon. Mr. Davis: Mr. Chairman, I just have a very brief observation. It is the custom for the Premier to express appreciation on behalf of the government to the Lieutenant Governor and the people in his office for the very excellent way in which they have discharged their responsibilities.

It has been my pleasure, as I am sure it has been the pleasure of many members opposite, to be with the Lieutenant Governor in many of his visits around the province. He has travelled extensively, visited with many groups and attended many functions. He has worked at it very effectively.

I would like to put on record the government's appreciation for what he, the members of his office and the members of his family are doing in this most important area of responsibility.

Mr. Chairman: Before we continue with the official Leader of the Opposition, I am wondering if I might ask all honourable members if they might keep their conversations quieter please.

Mr. Peterson: Mr. Chairman, I join with the Premier in expressing my personal admiration and respect for the Lieutenant Governor. In my view, he represents this province very well and represents Her Majesty here in this province so well.

I have had the opportunity to be in his presence on many occasions. I never cease to be amazed at not only his grace and his charm but the fact he has so much energy for everyone, be it a young hockey player or senior citizen. He has the same charm, the same energy, for everyone, regardless of their walk of life.

He is a man with a great sense of humour and he certainly -- and I am sure he does -- gives the appearance of very much enjoying his job. He brings that sense of grace, that sense of charm, to everyone he is with. I am a great fan of the Lieutenant Governor, as are my colleagues, who I know all share my view of the superior performance he has shown --

Mr. Nixon: On this and all else.

Mr. Peterson: -- on this matter and all other matters, as my colleague says.

I can only say it was one of the very fine appointments, maybe the best appointment I can think of, ever made in this province, at least in recent times.

I am one of those who joins the Premier in expressing our gratitude to the Lieutenant Governor for the able and gracious way he represents Her Majesty.

Mr Chairman: Order please. Why are we having so much difficulty trying to get quiet? It is under the galleries.

Mr. McClellan: It is the government's advisors who are being unruly.

Mr. Chairman: Yes, I agree.

Mr. Nixon: Just incredible.

Mr. McClellan: Is the chairman ready?

Mr. Chairman: I am ready, but is anybody else?

Mr. McClellan: I just want to say that this is the one and only set of estimates where neither opposition party has a single, negative thing to say -- nary a single criticism, not a single discouraging word. All we have, as has been said -- and there are no howevers, buts or qualifications -- is gratitude for a job very well done and an opportunity to honour a very dedicated public servant.

3:10 p.m.

Mr. Riddell: Very briefly, Mr. Chairman, I would like to say that, quite apart from the policy of this government, the Lieutenant Governor does give some consideration to rural Ontario. I say this knowing that he is going to be coming to Exeter tomorrow to participate in the Exeter Lions annual sportsmen's dinner.

We are indeed honoured to have the Lieutenant Governor, and I am going to have the pleasant opportunity of taking him around and showing him some of good old Huron county tomorrow afternoon and then on to the sportsmen's dinner tomorrow night. I do want to give credit to the Lieutenant Governor for getting out into rural Ontario, which is something this government does not do enough of.

Mr. Stokes: Mr. Chairman, I can attest personally to the sentiments that have been expressed by members who have spoken before me. I had the privilege of taking the Lieutenant Governor on a four-day tour of a part of my riding last September, where His Honour had an opportunity to visit 32 schools and more than 4,000 students and to meet all the civic representatives. It is an occasion that is looked forward to by my constituents at least once every four years.

In addition to His Honour John Aird I had his predecessor Her Honour Pauline McGibbon and, indeed, His Honour Ross Macdonald many years ago. It is something that is looked forward to with a great deal of interest and enthusiasm. I can certainly attest to the excellent way in which the incumbent and his two predecessors have represented Her Majesty any time they have had the opportunity to visit northern Ontario. It is something that should be encouraged by all members, from whatever side of the House. It pays great dividends in appreciation not only by adults but more particularly by students. They are reminded that while it is not a perfect system we do have the best system anywhere in the world, to my knowledge.

I think we all need reminding from time to time of His Honour, the office he holds and his duties as a representative of Her Majesty. I think the incumbent does an excellent job. I know he is coming up some time next year to visit an area of the province that has never seen a Queen's representative since the treaties were signed well in excess of 100 years ago.

I would just like to add my voice to those of members who have already spoken saying how worthwhile is the expenditure we make for the functioning of the office of the Lieutenant Governor. I think we could even increase that emolument so he could get around even more than he does at the present time.

Hon. Mr. Davis: In brief reply, Mr. Chairman, as the member for Bellwoods (Mr. McClellan) has said, this is one item where we have over the years had a high degree of unanimity, although we did get into a discussion one or two years about places to live and so on.

Mr. Martel: We still should.

Hon. Mr. Davis: Well, say so.

Mr. Nixon: You want to raise that now; I do not think that has changed.

Hon. Mr. Davis: No, I understand that. I have been with His Honour, for instance, at the christening of a vessel named after him and saw him being transported onto the bridge of that vessel. I am not sure "grace" is the word I would have used at that function.

Mr. Peterson: Just compared to you, I was saying.

Hon. Mr. Davis: I had as much trouble getting up on the bridge as he did.

The honourable member was quite right -- it was an excellent appointment. Since I have been in this House, and even before, we have had a succession of excellent Lieutenant Governor's going right back to and including the uncle of the member for Kitchener (Mr. Breithaupt), Louis Breithaupt. We have had excellent Queen's representatives. I know the member did not mean to single out the present one to preclude the others and that he included them as well in what he was saying.

Mr. Peterson: The Premier is absolutely right. I would include them all. If he would check Hansard he will see I said, "in recent times," and I was comparing that appointment to --

Hon. Mr. Davis: Recent times for some of us.

Mr. Peterson: By way of recent times, I was comparing that appointment with some of the Premier's appointments. That was the only difference. I want Hansard to understand exactly what I was saving.

Mr. Martel: Mr. Chairman, I want to take up the Premier's challenge. I was one of those who sat on the select committee that recommended we purchase a real residence for the Lieutenant Governor, keeping a space for him in this building to sign official papers and so on. Other than that, we should have an official residence for the Lieutenant Governor. I suggest the Premier might look at the building down the street which lies vacant. It needs remodelling but it is just a stone's throw --

Interjection.

Mr. Martel: The artist's house on Wellesley. I believe it was Paul Kane's house. That might be an appropriate place to remodel and make into a proper place for the Lieutenant Governor. At the same time, it might free up some accommodation in the building for other things legislators might need. I ask the government to consider that, if one visits other provinces, there are official residences for the Lieutenant Governor. Several years ago, at the Commonwealth Parliamentary Association meeting in British Columbia, we went to the Lieutenant Governor's home. It was a beautiful place.

Hon. Mr. Davis: It's a little more than a home.

Mr. Martel: It was a palatial suite but I did not want to use those words. I said it was a home and a place to entertain. It makes a lot more sense to do that, having it near enough to the Legislature with adequate parking. I remind the Premier there was unanimous agreement of the select committee that made that recommendation. I encourage the government to review that policy.

Mr. Nixon: Mr. Chairman, I see the Premier nodding. He was encouraging the House leader of the New Democratic Party to give him the advice just proffered. It may be the member for Sudbury East is looking to the future and his own service to the community.

Mr. Rae: Give us a story, Robert.

Hon. Mr. Davis: You might stand a chance.

Mr. Nixon: Knowing his penchant for that sort of lifestyle, he would probably be able to give the government all the specifications for the home he has in mind.

Just in case anybody was taking that proposal seriously. I believe all of us in this House have the highest regard for the office and, in this instance as in our history, the highest regard for the individual who holds the office. However I certainly do not feel it is necessary the taxpayers be asked to provide the sort of accommodation and residence the honourable gentleman is talking about.

We are well served. The last thing we need is to encourage the august individual who either now or in the future holds the office of Lieutenant Governor to hang around entertaining the elite of the metropolitan area and serving meals to the members of the government and its hangers-on. We should encourage him in every way, as we have been, to move out across the province and demonstrate, as he does so well, his important representation not only of Her Majesty but of the government of the nation.

Hon. Mr. McMurtry: Would it make a difference if the incumbent was not a lawyer?

Mr. Nixon: We have not had a lawyer for quite a while for which the minister should thank God and certain others.

Hon. Mr. Wells: Mr. Chairman, I am pleased to see the degree of consistency shown by the House leader for the Liberal Party. I received a book for Christmas called Lost Toronto which I enjoyed very much. I had never before appreciated the fine structure that rested at Chorley Park. It was a structure that was cast aside by the government of the party my friend represents. Of course that is something he never would be able to do today if he were Premier. All of us, in our own constituencies and in this province, are saving all those things that represent past Ontario and past Canada.

Mr. Nixon: -- that was a political boondoggle from the start, a waste of a million bucks.

3:20 p.m.

Hon. Mr. Wells: Chorley Park was a very dignified historic building, which could have served Ontario very well into the future.

Mr. Nixon: Move into Casa Loma if you feel that way, Tom.

Hon. Mr. Wells: Be that as it may, it was cast aside by the government in 1934 to prove some little point which I am not sure was ever proved.

Mr. Nixon: It is something that you people do not know anything about, and that is cutting the cost of government.

Hon. Mr. Wells: No; the people of Ontario have had to suffer ever since in that their Lieutenant Governor has not had the kind of residence that was represented by Chorley Park or the former residence. We have all seen it on the walls downstairs in some of those fine pictures of past Toronto.

While I am only speaking as a person from Metro Toronto and Ontario, I hope that at some time my friend's comments about a residence will be looked at. I am sure now is not the time --

Mr. Nixon: It is in the same category as a jet for the Premier.

Hon. Mr. Wells: -- but a very good case can be made for this kind of facility. I think it is a tragedy that a former government of this province did away with what was a very fine residence.

Having said that, I also want to add my commendation to the present Lieutenant Governor. He, his wife and his family have entered into their roles with great gusto and have represented their very high position as a representative of the Queen with great dignity in this province. I would like to commend him and his family.

Vote 101 agreed to.

Hon. Mr. Davis: Mr. Chairman, I wonder if we can consider both these next items at the same time the way we have in the past -- the office of the Premier and the cabinet office. They are easier to deal with in that way. I have a two-hour leadoff statement, which I have decided not to make.

Mr. Breaugh: Such a shame. The Premier should read it.

ESTIMATES, OFFICE OF THE PREMIER AND CABINET OFFICE

On vote 201, office of the Premier program; and vote 301, cabinet office program:

Mr. Chairman: Are there any comments?

Mr. Peterson: I am very happy to discuss this as a mélange. There are a number of issues that I would like to discuss with the Premier. In the absence of his making an opening statement justifying his existence for the past year, I will attempt through a series of questions to extract from him responses to certain questions and concerns that I have.

It is not my intention to make a long speech just to put forward my point of view. It is not often we have an opportunity for a full discussion in this House between the three leaders. What I am hoping to do in the course of our discussion is to learn a little more of the secrets that lurk behind that fine mind opposite. I hope to find out the real intentions of the government in a number of areas because we have so many mixed signals. The leader of the New Democratic Party (Mr. Rae) may or may not have some of the same concerns I have and we may want to discuss it by a topic area.

My concerns are about regulatory reform -- the whole question of the trust companies and how it deteriorated into the state it is in today. I am concerned about legislative and governmental reform, the reform of this House, the reform of this chamber to make it more effective.

I am concerned about budget reform. I do not think any of us can afford to forget what transpired last spring. I felt it was a very bad budget, created by an archaic method that did not prove to serve the people of this province very well. I am one of those who have put forward some serious proposals with respect to budgetary reform.

I am also concerned about the whole question of our economy and what we have to do. That is still the biggest issue in this province and will continue to be.

The Premier has on occasion taken it upon himself to give me political advice, and it is always very welcome, but he knows and I know and the leader of the New Democratic Party knows that the biggest issue now, two years from now and three years from now is the economy of this province. Each of us has made various suggestions on how to get it moving again.

I am one of those who are very concerned about the structural damage that has been wreaked upon this economy. I am an optimist, and I am one of those who want to build for the future. I do not think we can go about blindly saying everything is fine and hoping the problems are going to go away. I believe the damage we have suffered goes deep into the fabric of Ontario.

It is not going to serve us very well in the future to try to pretend those things do not exist. It will not serve us well to practise what has been known in the past as the politics of anaesthesia, saying all one needs is an optimistic mind and a good heart and everything will solve itself. That is not the reality. Many of the jobs we have lost will never come back, at least in their traditional forms.

Our responsibility is to identify those new opportunities for the future. We must use the best of government and private enterprise, of management and labour -- all of the instruments and institutions we have in our society -- to forge a consensus. We have a responsibility to find some common ground so there will be far fewer losers and far more winners in the future in this province than there appear to be at the present time.

We have been on an economic drift in this province and it is not just a function of the last year and a half or two years. It has been going on for some time. The signals were apparent as early as 1973 when the oil embargo came and the energy crisis had such serious effects on our province. Thoughtful people looking ahead could see that our traditional sources of wealth were going to be seriously assaulted, yet we chose not to address those things in a meaningful way. I want to talk about that question, which is still the biggest one.

Another problem I want to talk about over the next few hours, as we have a chance to discuss it, is Ontario's role in Confederation. There were the remarks of the Attorney General (Mr. McMurtry), as well as the Minister of Intergovernmental Affairs (Mr. Wells) -- some were made in French and some were made in English. There is also the Premier's views of his responsibilities. In my opinion he is the second most important political figure in this country. The Premier of Ontario still runs the biggest and richest province, which is still the cornerstone of Confederation, and his views still carry a great deal of weight across this country.

In the course of the day I would like to discuss all those issues and to get the Premier's response. This may or may not conform with the views of the leader of the NDP.

Mr. Rae: Three minutes.

Mr. Peterson: I am very happy to let the leader of the New Democratic Party give his agenda, and perhaps we can work together and make it more efficient for all.

Mr. Chairman: Is that the course we are going to take? Are we going to get into a big argument, now that you have the floor --

Mr. Rae: No, I do not think so; I do not work that way, Mr. Chairman.

There is one area the leader of the Liberal Party did not mention which I think we could start out with if he consents. It relates to the constitutional problem, but it has to do with the area of native rights. This is yet another area where we have had a slight difference of emphasis from the Attorney General. It was in certain correspondence he had with the federal Minister of Justice during the time the constitutional debate was ongoing.

The question of native rights and the future of the aboriginal people in the Canadian Constitution is going to be the subject of the next first ministers' conference very soon. Consequently I think we might usefully spend some time on these matters, perhaps beginning on the constitutional question and then moving from there if my friend and the Premier are in agreement.

Certainly we are not in any sense downplaying other problems in respect of the economy. We do not wish to downplay the need for the government of Ontario to focus on what it can do rather than on what it cannot do, which seems to have been the focus of many of the replies the Premier has given us in the question period during the past few days.

3:30 p.m.

We would all be interested in this House in having a sense from the Premier as to what the position of the government of Ontario is going to be with respect to the legal and constitutional rights and position of our native people, not only in Ontario but also across the country, in terms of the constitutional discussions that will be taking place next month.

Perhaps we could start with that and move on to the very interesting debate that has been taking place between the Minister of Intergovernmental Affairs and the Attorney General with regard to the question of a possible veto in respect of certain constitutional matters and the position of the Premier in that regard. Then we could move on to discuss some of the other areas which we are concerned about and which we will be raising.

May I suggest that we start with the Constitution?

Mr. Chairman: The suggestion has been put forward that we concentrate discussion on the Constitution. Does the Premier have any comments?

Hon. Mr. Davis: Mr. Chairman, perhaps the easiest way would be to lead off, if that would be helpful, and then perhaps the two opposition leaders would like to comment.

Let us deal with the most current matter, which is the question of the first ministers' meeting on native rights. I cannot be as helpful to the members of the House at this point as I would like to be; I hope to be before the meeting in March, but I will just outline the process.

The officials and ministers met a few days ago, and I understand from the Attorney General they will be meeting again in an effort to develop an agenda.

My personal point of view is that the issues are so fundamental and complex that I hope all of us -- I do not mean members of this House, but other first ministers -- do not build up a degree of expectation as to what we can accomplish in two days on a matter as important and as difficult as this.

We here have been following the process of consultation with representatives of the native people, including the status, non-status and the Métis. I believe I am being objective when I say that our last meeting, which I attended personally, was by and large very constructive and that there was a fair measure of support for a process. We did not get into determining where everybody stood on each individual issue.

What makes it rather complicated for the Premier of any province -- and I find this somewhat inhibiting -- is the fact that a number of our native people are also part of national organizations, which the members opposite will know have taken certain positions that may or may not be the positions of the local bands or representatives of the native people within Ontario. Whether one can distill from our own representatives what would be an approach they would support in terms of this province, which on some issues might be in a contradictory position with the national organizations, quite frankly, I cannot tell the members of the House at this point.

I have assured the native people we will meet with them again before the first ministers' meeting -- that will be after the meeting of ministers -- at which time we hope to have an idea of the tentative agenda and what progress may or may not be made. Again, I express a personal point of view as it relates to the first ministers' meeting that it is fundamental to me, at least, that out of that the very least we should try to achieve is some recognition of an ongoing process.

I do not want to be less than optimistic about how much we can achieve, but I believe it is totally erroneous to say we can solve many of these issues in that two-day time frame. I think it not only is beyond our capacity but also probably would be unwise, because in this process it is important that the native people feel not only that they are a part of it but also that there has been a measure of consultation and exchange of points of view before any definitive decision is made.

I think a provincial Premier finds himself in a somewhat more difficult position -- although I have to say the native people from this province have been more than prepared to sit down and discuss -- in that there are some points of view expressed on subjects on which it may be the discussion should be primarily between the native people and the government of Canada alone, because that is their traditional relationship and it may be that is the way it should go. I have reservations about that. It would certainly make it easier from any province's standpoint, but I think that on balance -- and this is what I have said to our own native people -- it is better if the provinces play a very real part in that process. As I say, I have not spelled this out in any definitive way.

I think it is fair to state, going back over the history of this, that Ontario -- and we were not alone; do not misunderstand me -- did insist on it at the last first ministers' meeting where we reached the accord that culminated in the passage of our new Constitution. The statement contained in that imposes an obligation upon all of us to meet with the native people to discuss constitutional change and their rights, and a lot of the initiative, if I can phrase it that way, for finding a solution originated from Ontario.

I wish I could say more about what may or may not happen, but I am in the position where there are a lot of participants, not only from our sister provinces but also from the government of Canada, from the native people and from the Inuit. I am not able to say today exactly what items will be on the agenda and what point of view Ontario will be expressing. I say to the Attorney General and to those who have been working diligently on this in the past few weeks, I hope we may be in a position to take some of the time of the House to chat about it, and certainly to review it if the meeting takes place while the House is not in session.

I do feel I am not in a position to share a lot with the members, because it really has not been set out yet. I can only say the ministers have been working on it very diligently, but is a rather complex set of issues. We do not have the agenda yet; so I cannot tell the members much more than that. I am just dealing with the question of general constitutional matters.

Perhaps I can give the members my impressions, I hope in two or three minutes, after I hear from the members opposite their views on this question of native rights and constitutional reform.

Mr. Peterson: Mr. Chairman, I want to follow up on that very briefly, and then I will listen with great interest to the member for Lake Nipigon (Mr. Stokes), because I know how intimately he has been involved in these issues.

I was not particularly filled with optimism after hearing the Premier's remarks. I recognize the complexity and difficulty of these issues, but I suspect the same speech could have been made 50, 75 or 100 years ago in this province. Certainly the sense I have had in meetings with a number of the community leaders and from native groups is that they share that same sense of frustration. Even getting proper status at the bargaining table today, in 1983, still is a very major problem for our native Canadians.

I do not want to oversimplify this issue, because we all have members who are intimately involved with the entire question, but one of the suggestions from this party over some period of time -- and my colleague the member for Brant-Oxford-Norfolk (Mr. Nixon), the former leader, will confirm this, because he has a hand in his own riding and he has wrestled with it too -- was to employ the good grace and goodwill of various members of this House in a committee that would be of assistance to the Premier and the minister responsible, who I gather is still the Provincial Secretary for Resources Development (Mr. Henderson).

As the members know, there was some feeling when that appointment was made that there might not be the sympathy for solving these issues that perhaps there should have been, knowing the feelings over the years of people such as the Premier and the Attorney General, who genuinely want at least to start a process that is going to be meaningful. Perhaps this is going to be ongoing for some period of years, and I respect that, but I have a little bit of difficulty in that I do not have the sense at this point that there is anything more than the same old approach. I do not have the sense that we are even moving in a meaningful way or that we have serious mechanisms in place for moving towards a serious discussion that would bring mutual respect, not just tokenism or antagonism, towards the ongoing solution of some of these admittedly difficult problems.

3:40 p.m.

I have the sense that, even going into the constitutional meeting, the Premier may run the risk of developing hostility before the fact because of the lack of meaningful consultation that will prevent anything of substance happening at those meetings. Every provincial Premier has the same problems, by and large, as does this Premier and the federal government.

Hon. Mr. Davis: Not in Newfoundland.

Mr. Peterson: Not in Newfoundland and not in Prince Edward Island.

Hon. Mr. Davis: It applies in PEI as well.

Mr. Peterson: Prince Edward Island? Well, I am sorry; I did not know that. But they have the same problems in varying degrees, at least. It is one of those areas where I think the Premier -- I was going to say of the most important province, but that may sound a little chauvinistic; at least of the biggest and the richest province -- has the capacity to lead on this particular issue.

I hope some time between now and the meeting, the Premier, who has now seized a personal responsibility for going into those meetings with some meaningful kind of resolution or at least mechanism, will have some specific policy announcements about how he intends to involve the native people in the resolution of some of these problems.

If the Premier wants support or advice on a non-partisan basis, then I can think of no better device in a situation like this than using the judgement of the member for Lake Nipigon, who could sit me on his knee and teach me many things about this whole question, and I would gratefully learn; and there are a lot of other members in this House in all three parties.

Hon. Mr. Davis: I would suggest you sit on a chair.

Mr. Peterson: I might squash him a little bit, but I respect his knowledge in these areas as well as that of my colleague the member for Rainy River (Mr. T. P. Reid) and a variety of others who know these problems so much more intimately and firsthand than we from the south do.

I put that suggestion to the Premier. I think it is something that could be mobilized very quickly. He would have the benefit of that, and I do not think there is the slightest bit of risk of political embarrassment in that kind of approach. In fact, it would take a difficult issue and make it simpler for him to resolve over the next few years.

Maybe we should even contemplate a standing committee on native rights here in this Legislature that would be a check and would be of assistance to the Premier in making sure there is a fair hearing for the native people who, whether or not he believes it or whether or not he thinks they are right in having this opinion, do feel genuinely aggrieved not only by the substance of what has gone on over the past hundreds of years but also by the process, in which they felt they have not had a meaningful place.

On Friday I was in London, Ontario, when they opened the Museum of Indian Archaeology. I was very proud that this centre was opened in London. The Premier should be very proud to know that the director of public relations is the wife of the Minister of Industry and Trade (Mr. Walker). She did a marvellous job of involving all parts of the community in a historical look at 11,000 years of culture in southwestern Ontario. It is a marvellous collection of Wilf Jury's artefacts, which he collected over the years from all around southwestern Ontario, as well as those of a lot of other people who are participating in it. It is getting wide public support. It has been very well handled, and I am proud to have that important and unique institution in London.

I think the Premier can build on the goodwill that this kind of institution fosters and the good work that is being done by some of the most remarkable people I have met. In my brief tenure as leader of this party I have had an opportunity to meet with a number of chiefs right across this province. I admit the deficiency in my personal knowledge and understanding of these issues. I am trying to learn, and I think I am a little more knowledgeable than I was a year ago.

I am very impressed with the quality of leadership, to a man, to a woman. The new young chiefs, I think, have been responsible in every regard. I do not expect we would agree on every single matter, but I am very impressed by the quality of the people leading the native rights movement today. If the Premier gives them a fair chance to participate in the process. I think he will see results in working towards a resolution of some of these historic and deep grievances that will please him very much.

Mr. Stokes: Mr. Chairman, I am pleased to have this opportunity to speak on native rights and how they can ultimately be enshrined in our Constitution. I realize they are much too complex to have been included in the signing that took place almost a year ago. We do have now an excellent opportunity, with the meeting of first ministers in Ottawa in the middle of March, to begin that process.

I want to recall for the Premier the initiatives that were taken by the federal government in 1970 or 1971, when the Honourable Jean Chrétien was the Minister of Indian Affairs and Northern Development and Robert Andras was his parliamentary secretary. I believe they were on the verge of coming to grips with a lot of the contemporary problems facing governments at the federal and provincial level and were coming to terms with a major change in the Indian Act which in large measure should have gone a long way to solving a lot of the problems we are still wrestling with to this very day.

Something happened to that process in Ottawa, because I think the Honourable Jean Chrétien was getting too close to a solution. I am told by people who are close to the scene in Ottawa that it was the bureaucrats within the Department of Indian Affairs and Northern Development who were the chief obstacle to solving a lot of those problems.

The thrust Mr. Chrétien took at that time was that there would be a very dramatic change in the Indian Act whereby those services normally provided by that department in Ottawa would have been farmed out to other levels of government that are much more competent to deliver a specific service to the native people than the Department of Indian Affairs and Northern Development.

One example is in the field of education. As the Minister of Education (Miss Stephenson) knows, the academic achievement of most native people in a reserve setting is grade 8. That is about as far as most of them go, certainly in the remote communities. When they attempt to integrate into the Ontario school system in communities such as Kenora, Sault Ste. Marie, Sioux Lookout and Geraldton, they find themselves about two years behind. The cultural shock and the fact they do not have a good grounding do not bode well in trying to integrate and get into the mainstream of things after eight grades in a reserve setting.

That was the kind of thing Mr. Chrétien was attempting to do, to transfer the responsibility for the delivery of an educational experience to natives wherever they live in Ontario using the criteria we use in our system. There were a good many areas where Mr. Chrétien saw there was a need to transfer those responsibilities to a jurisdiction that was much more competent and capable of providing that service. There was to be a transfer of funds from the federal government to the province to take care of the provision of that service.

We all know that did not happen. As a result, if we look at the dropout rate even today of students coming from a northern reserve and trying to integrate into the Ontario school system, only about four out of every 10 students reach grade 12. That is clearly not an acceptable standard.

If we talk to native people or people who have made a study of those problems, we know the key to any success in bringing our native people into the mainstream socially and economically is education. We have failed.

There is a subcommittee of the standing committee on native affairs in Ottawa travelling around the country. They were in northwestern Ontario very recently. They are thinking about an Indian government, which would mean that instead of spending hundreds of millions of dollars every year to administer those programs on behalf of native people, if we cut out that bureaucratic level and say, "If it is fair and equitable to put a billion dollars into a variety of programs, why not turn that over to responsible Indian governments so they can establish their own priorities on the basis of their own knowledge of what is required in a reserve setting and let them make their own mistakes?"

3:50 p.m.

God knows we have been making mistakes on their behalf through our paternalism for far too long. Given the comments made by the Leader of the Opposition (Mr. Peterson) a few moments ago, there are a good many clever, well-meaning, sincere and dedicated Indian leaders. There are a few bad ones, but by and large the quality of leadership is excellent. Whether it is the Ontario Native Women's Association, the Ontario Métis Association or the treaty and status Indians, we have some excellent leaders. I know the Premier has met with a good many of them.

I read something in a paper this morning that shows how the bureaucracy falls down at the federal level. A Hercules transport was sent off, I believe from Winnipeg, within the past few weeks with a brand-new, shiny pumper fire truck, with all kinds of chrome and attachments. I think it had everything on it except the siren.

They airlifted that into a northern community in Manitoba at considerable expense. I am sure the members know what it takes to fly a Hercules and what it costs to buy a brand-new pumper these days.

They landed it on the reserve in a setting where there are no roads. There are 200 people living there. It is a small community on the edge of a lake where there is no road structure. There is a path where people can walk from their dwellings to the church or the little store, but there are no roads.

Mr. Nixon: Just a great big airport.

Mr. Stokes: There is just an airstrip at the lake to land this thing. It is sitting there. They are saying: "What are we going to do with it? If it gets really hot in the summer, we can spray the kids and cool them off. We can have fun with this high-falutin fire engine. There are no roads to get around the community for the very thing the pumper was designed to do.

Hon. Mr. Davis: No ministry of the government here would ever do that.

Mr. Stokes: It just shows how money can be wasted to no good.

The reason I want to get involved is that I believe we have a job to do right here in Ontario. As to the fishery agreement that was signed recently between five native groups and our Minister of Natural Resources (Mr. Pope), we have still to bring the feds on stream because of some technical problem they deem is unconstitutional. It is all right with the feds to transfer the responsibility for managing a resource to another level of government, but it is not constitutional in their eyes to transfer that responsibility from the province to the native people.

If we look at the fine print in the agreement, the government of this province has not abdicated its responsibility because the final judgement with regard to the management of the resource still rests with the Ministry of Natural Resources.

On conservation enforcement, we are giving some of that responsibility to 20 conservation officers. I think the concept in principle is an excellent one for reasons we all accept; but the process sure left a lot to be desired, because there are a lot of people out there who have the misconception that we as a Legislature, the government and the Minister of Natural Resources as a minister of the crown have completely abdicated our responsibility for the management, the husbanding and the conservation of a resource. We know that is not the case, but that is the perception.

Let me read a letter I received just today. How fortuitous the Premier should have his estimates before us and we are talking about constitutional matters.

"Dear Sir:

"The Indians today are getting away with murder. They feel it is their land. Really, who are the ones working hard to build this land up? They pay no taxes but are allowed to work in our mills and earn the same wage." We know that is wrong, but that is the perception. "Do you think this is fair? Now they want all of the fishing rights. What next?

"A person tries to bring up their children not to be prejudiced. It is darn hard the way things keep popping up. I was brought up to be proud to be a Canadian, but I am wishing now I was an Indian. This way we would not have to plan for the future. Everything would be there on a silver platter."

I am not going to reveal her name, but that is the public perception of the way we handle native people.

Here is another one. I will not go into great detail, but it deals specifically with the so-called tripartite agreement. There is so much misunderstanding. People believe, and I have had letters to this effect, that the signing of that agreement will allow native persons, regardless of where they live in the province, just to go out and literally dynamite any lake in the province; and we have 250,000 lakes. I am assured by the Minister of Natural Resources that this agreement covers between 40 and 50 lakes where native people traditionally have had the right to fish for food; but that is lost.

Then we get columns in the Toronto Sun saying it is hard to be a white man in the province, saying there is reverse apartheid. These are all things that fan this misconception of what the Minister of Natural Resources and this government are attempting to do, and we sit idly by and say: Events will all unfold as they should. All will be clear in the fullness of time."

That is not good enough. I happened to attend a meeting over in the Whitney Block not too long ago at which for the first time representatives from all the municipalities in northwestern Ontario were there with a large dossier of resolutions they wanted to bring to the attention of the cabinet committee on resources development.

They had heard just two days before of this so-called fishing agreement. They did not want to talk about the things they had been worried about for a year. They felt so strongly about this fishing agreement, I know two of those people tried to see the Premier in his office. They were not successful, although he has since met with them. I hope the Premier has cooled things out and tried to explain it to them.

When I get letters like this dealing with misrepresentation and a real fear that we are just giving away the store, it is an indication to me, and I hope it is an indication to the Premier, that we have to be much more open and forthcoming with information so that we do not fan the fears people have whenever there is a change.

I appreciate why the Premier is doing it, and I support what he is doing, but does the process ever leave a lot to be desired. If we are going to fill the role I hope our first minister is going to fill on behalf of all the native people in the province at the first ministers' meeting on March 15, first we must improve our ability to communicate to the 8.5 million people in the province what we are attempting to do.

This is the first time we have ever come so close to the Premier having something in his hands that he can take over and say, "This is what we are doing to break down the barriers between our first citizens and all the other people in the province." It would have been a feather in his cap had he been able to do that.

The way in which it has been handled has left so much to be desired. I tried to emphasize this during the concurrence debate on the estimates of the Provincial Secretary for Resources Development, but the minister really did not understand what I was attempting to say. I hope the Premier does.

4 p.m.

If we cannot convince the people in Ontario that it is something worth while doing, how will we, at this first ministers' conference, convince the 25 million people in Canada that we appreciate what the problems are and that we as a province of 8.5 million are dedicated to living up to those contractual agreements, the treaties on aboriginal rights, some of which were signed well over 100 years ago? How will we convince them that we are also dedicated to bringing those rights into the 1980s, saying, "This is how we are prepared to share the responsibility for the management, husbanding and conservation of resources"? If we cannot do that with what we are attempting to do with regard to 40 or 50 lakes out of 250,000 in Ontario, how will the Premier he believable when bespeaks on behalf of 8.5 million people?

I applaud the minister for what he is attempting to do, but the process leaves a lot to be desired. I hope the Premier will impress this not only upon the Provincial Secretary for Resources Development but upon all the other ministers who have some responsibility for native affairs.

I wish the Premier the best of luck in Ottawa, but we have some work to do here before we are able to convince the rest of Canada that Ontario can make a meaningful and substantial contribution towards settling this problem that has been with us for well over 100 years. This may be the last opportunity we will have to rectify that.

I have every confidence that we can make a major contribution, but we must start at home to allay all the fears people have about what it is the Premier is attempting to do. I know what he is attempting to do, but we must leave no stone unturned in our efforts to get everybody in Ontario on side. We have to be believable here before we can be believable there.

Mr. Nixon: Mr. Chairman, the Indians in Canada, particularly in Ontario, do not really believe they have much to do with the first minister of Ontario in a significant way. Going back into our history, all their treaties were with the government of Canada or the representative of His/Her Majesty.

The only time the Indians are aware of provincial jurisdiction is when we allow mercury to pollute their fisheries, as we did in the Grassy Narrows-Whitedog area; when we have somehow exerted a land title over lands which they as Indians believe they still own and have never given up, as in the instance of the large area around Timagami, including Maple Mountain; when we allow acid rain to pollute the lakes they have hunted around and fished in from the beginning of time and they find that has dried up; when we apply special procedures that we call sales tax which interfere with the movement of cigarettes on to the Indian reserves: or when we try to put our high-tension hydro lines across their lands. In one instance, chairman George Gathercole of Ontario Hydro was ushered off the Six Nations reserve in a very unceremonious way when he thought he would simply go there and show the Indians where the new power lines were going.

I think the Indians are somewhat amazed that the first minister of Ontario is one of the principals in a conference scheduled for the next few weeks in which their constitutional future will be settled. Historically, the Premier of Ontario and the other Premiers have had nothing to do with this at all, except in a very negative way whereby provincial initiatives have messed up something the Indians thought was their right since the beginning of time.

I should also have listed that the provincial game and fish laws are another clear instance where the Indians have had to deal with the governments of the provinces. Under our evolving Constitution, the provinces have now consolidated their rights to the natural resources and the title to the crown lands through Her Majesty in right of the province of Ontario. So the Indians have to deal with us in those areas.

For example, the instance of the question to the titles of those lands around Timiskaming have been before the courts for quite a while and, according to the source of most of the good information I get recently, Peter Gzowski, that is approaching a decision by the courts. We figure that if the rights are given to the Indians the Attorney General will appeal it to the Supreme Court and if the rights are given to Ontario the Indians will appeal.

That is why I feel a little pessimistic when the Premier gets up in his opening statement and with all of the goodwill he is capable of, which is a good deal indeed, indicates that he does not think all of the problems will be solved in two days. We know as far as he is concerned none of the problems will even be scratched in two days. If somebody in Ottawa -- and this is their responsibility -- puts out a package which calls for Ontario and the other provinces to say, "Yes, I guess that is all right except for this little bit," something might be accomplished, but there is obviously no provincial initiative and I suppose we would be unrealistic if we even expected it.

However, when it comes to the land claims in the province, we have almost total responsibility in that regard and we have done nothing but establish the usual legal technicalities and barriers which have simply postponed these decisions. For 200 years the immigrant Indians have been here; and others, of course, from time unmeasurable. It seems to me that somebody is eventually going to have to come to grips with these problems, the headland-to-headland issues, as far as Indian lands are concerned, and say: "Okay, we are not going to give this up. The policy of the government is we are not going to give it up;" or on the other hand, "We are going to give it up, but we are going to turn these over to the jurisdiction of the Indian bands with the government that is established under the Indian Act, or whatever its successor is."

When Pierre Trudeau, our great Prime Minister, highly regarded by everyone around the world, first came into office, one of the things he said right off the bat when the Indians approached him wanting certain reforms, was: "I am prepared to repeal the Indian Act. As a matter of fact, I would do it with alacrity and enthusiasm." I think I am quoting him exactly. That immediately, of course, put the ball in the Indians' court; and there was never more of a flurry than at that time on the part of the Indians to decide what, exactly, they wanted, other than to say that the status quo was inadequate.

But of course they rejected it, since that would have meant the integration of the Indian community with the rest of us and they certainly did not want that, because they have very special advantages over everybody else in the community, having to do with education, the provision of health services and many other things. There is substantial assistance paid for by the government of Canada in that regard.

I do believe that the Indian Act is out of date and passé. One of the things the first minister of Ontario could do when he sits down is to support the Indians in their contention that they are a community different from the others and there is really no reason why they cannot run their own show -- and I do mean establish their own game and fish laws, establish their own responsibilities in education, the provision of health care and running their own community; I would not call it a municipality because it is not even like a municipality -- without the supervision or even the sometimes condescending direction of the officials either at the provincial level -- and we very rarely do that -- or at the federal level. Let them run their own show.

Many of the Indian communities, certainly the largest one in southwestern Ontario in Brant county, the Six Nations, have proved their local government is as good as or better than any municipal government around. They have been financially well supported by the government of Canada and to some extent by the government of Ontario. There is no reason why they simply cannot run their own affairs. They see themselves not as a part of Ontario at all, but historically as an ally of the crown in Canada.

We should not just put that away as some sort of a weird and crazy idea, because it is not. That is the way they see themselves and there is no reason in the world why we should say: "Oh, no. We do not want to offend you by calling you a municipality like the others, but in essence you are just another township or another group of townships." Far from it.

Mr. Stokes: They see themselves as a nation.

4:10 p.m.

Mr. Nixon: That is correct. They are called the community of the Six Nations. They are not just an Indian band in our area, and the same is true in the north. I am sure in some areas this is not practicable. Some of us who have been around here a long time under other regimes have had an opportunity to go up there sort of in an official capacity and meet with the Indians in their own council houses.

Some of the long-time members around here will recall going to Trout Lake in the constituency of the member for Lake Nipigon. The Indians were very hospitable. They had sleeping bags for us and we slept in the school house. We ran foot races at midnight because it was close to the summer solstice and it was possible to do that. As a matter of fact, some people were running races all night as I recall. I will not pursue that further.

We had a chance to talk to those people. They took us to where the government of Ontario in its largess had provided the money and the wherewithal to build small cabins in this new Indian community. We were quite surprised and even aghast that these buildings were in a sad state of disrepair, with broken windows and some of the siding taken off them, obviously to be used for fire and for heat.

The Indians pointed out the designs were not practical in that area. It was almost like delivering a fire truck to a community without roads. The Indians had used their own homes they had built themselves, which were properly constructed to withstand the problems in that far north part of our province.

I really believe there may be a mistake in the conception that the first ministers can sit down and settle the Indian problems. As I understand our Constitution, the responsibility is with the government of Canada. As provinces we have certain peripheral things we must deal with, but for those people to sit down and solve those problems is simply not going to happen unless one Premier, and it could be the Premier of Ontario, is prepared to take some initiatives, for example, on women's rights in the Indian community. I do not recall anybody on the government side expressing a strong and definite view on those matters.

The Chairman is no doubt aware an Indian band member may marry a non-Indian woman and bring her on to the reserve, but if a woman band member marries a non-Indian male and brings him on the reserve they are both escorted out in most areas. On the face of it, it is seen by people who are not involved in the community and therefore probably not eligible to make a proper judgement, to be completely unfair. Indian males and even females have argued the other side of that to me, saying their traditions are different from ours. But it seems to me that contention should be settled by somebody who is in a position to do so.

Mr. Cassidy: Have you raised that with your friends in Ottawa?

Mr. Nixon: Our game and fish laws are just as troublesome. We tend to say, "We know when you should fish and when you should not," and the Indians say: "Our treaties say we can fish here as long as the wind blows and the grass grows. What are you going to do about that?" This has been hanging fire for many years. It has gone to court many times.

As to the land claims in the Timiskaming area, we ought to be in a position such as the government of Quebec was. It was forced by economic circumstances when it wanted to develop the Baie James hydro project. The government worked out a deal with the Indians. The Indians now feel it was not adequate, but at the time it was considered a real landmark across Canada. The American government has settled the land claims in Alaska and distributed the money associated with it. It has to be done some time.

If somebody at the other end has been barracking about women's rights on Indian reserves, I have gone clearly on record that my understanding of individual rights is that women should have exactly the same rights as men. I would say so here and to them, and have done so. I believe the Premier himself could do something about that.

There are many other things we want to talk about, but I have the feeling the Premier with his usual goodwill is sort of prepared to go along with this. However, we are going have many Indian rights conferences that will go into the next century unless somebody takes a stand on these things and tries to establish a position with our new Constitution that will provide the framework my leader was talking about which will permit decisions that benefit the Indians. That is what we are talking about this afternoon.

Mr. Laughren: Mr. Chairman, I want to say a few words to the Premier about the Indian fishing agreement. As the northern member and this party's critic for natural resources, I naturally get my share of correspondence, phone calls and even remarks in my constituency about the agreement. I felt from the beginning it was a remarkable agreement in that, as far as I know, it is the very first time the native people in Ontario have ever recognized anyone else's jurisdiction over their right to fish. That is a considerable compromise on the part of our native people.

Consequently, when I respond to the letters, phone calls and remarks on the Street and in my constituency office, I have tried to put that case. it would help a lot if the Premier, rather than leaving his Minister of Natural Resources out to dry on this issue, would get involved in it. I am sure the Premier knows there are members of this Legislature who are not happy or comfortable with this agreement, and some have been very outspoken.

Unless the Premier gets himself involved, puts the considerable prestige and persuasion of his office behind the agreement and talks about it not just in northern Ontario but all across the province, we will continue to have the kinds of comments and correspondence that my colleague the member for Lake Nipigon read into the record.

I feel very strongly that any kind of agreement made with the native people is going to precipitate a backlash almost by definition. We know that and, consequently, it makes it all the more important that it be handled with some sensitivity. I believe, as the member for Lake Nipigon does, the Minister of Natural Resources did the right thing in signing the agreement and we are in support of the agreement. We have tried to be as unequivocal as we can be, but it makes it very difficult for members of the Legislature to defend an agreement that we do not see the government itself defending with the kind of vigour we think it should exercise. That bothers us to some degree.

I believe one of the Liberal speakers referred to the need for a standing committee on native affairs in the province. Perhaps that is the way in which all members of this Legislature could be involved in a issue like this. For example, if there had been a committee of this House in session which discussed the agreement it would have been very difficult for many members of any of the parties to speak out against the agreement after there had been agreement within that particular committee.

Now it is a no man's land out there and individual members can speak out against the agreement with apparent impunity. We think that is fundamentally wrong. I reiterate that it is time the Premier himself entered the fray because the Minister of Natural Resources is simply not going to be able to carry the day all by himself.

We have been trying to encourage the minister to hold more public meetings, particularly in northern Ontario, to sort out the misconceptions. I understand the minister has put together a consultative process now, after the fact.

I will not repeat what the member for Lake Nipigon said but, my goodness, the minister could not have developed a worse scenario than the one that took place over the signing of that agreement. I cannot believe the Minister of Natural Resources, the Premier, and perhaps the Attorney General as well, given their very solid contacts and friendships with the Northern Ontario Tourist Outfitters Association, the Northwestern Ontario Municipal Association and the northwestern Ontario chambers of commerce, were not able to call together a press conference with representatives of those organizations when the agreement was signed.

I find it reprehensible and it makes me wonder to what extent the Minister of Natural Resources, despite his good intentions in this agreement, has the support of the Premier and the cabinet. I hope he does, but we need more evidence of support to be shown for the minister and for his attempt to get this agreement.

4:20 p.m.

I do not understand why the federal government is holding off on co-signing the agreement. Perhaps it is nervous about northwestern Ontario. I spoke to one of the Liberal MPs from northwestern Ontario about two weeks ago at an electoral boundaries commission hearing in Sudbury. He was appalled at the comments he was getting. He was very much in support of the agreement. I hope he is able to convince the federal minister, Mr. Munro, that the agreement should be signed, because it is not appropriate to have the province and the native peoples' organizations sign while the federal government stands off to one side watching all the heat develop out there. That is not appropriate.

I hope the Leader of the Opposition might have a quiet word with Mr. Munro. It is my understanding the Leader of the Opposition supports the agreement, and that should be made perfectly clear so there can be agreement among all three parties in this Legislature, along with the federal government, that the agreement is a valid one and should be signed by all three parties.

Mr. Rae: Mr. Chairman, I want to turn the attention of the Premier specifically to the conference that is taking place in March. Since he does not know what is going to be on the agenda or what the subject of discussion is going to be, it is very difficult for us to know. I would like to indicate to him the exact nature of our concerns. Perhaps I can flesh them out a bit for the Premier.

He will recall that when the Supreme Court of Canada issued its decision in September 1981, there was a conference of first ministers to discuss a new constitutional compromise. I know the Premier will be aware that, as a result of that meeting, the famous 11th-hour session that took place which produced the compromise, section 33 of the original resolution that had been approved by Parliament was dropped. That, of course, gave rise to tremendous concerns, not only in our party and among many individuals, but particularly in the native community.

The Premier will also be aware, I am sure, of the correspondence that took place between the Attorney General and the Minister of Justice in May 1981, in which the Attorney General expressed some very real concerns he had -- and one can only assume he was speaking on behalf of the government of Ontario since it was an official letter -- with respect to the entrenchment of native rights. I do not want to read that letter into the record, but it caused me a great deal of concern because the letter was written, and not made public, at the same time as the Premier himself was indicating that he was fully on board and fully on side with respect to the resolution that was before Parliament and, indeed, before the Supreme Court at that time.

It indicated that, in private discussions at least and in private correspondence between the Attorney General and the Minister of Justice, the Attorney General was expressing what I may describe in one characterization as a very traditional and conservative approach to the problems of native rights, instead of looking upon the entrenchment of native rights as a great opportunity for recognizing their unique legal status within the Canadian Constitution, their unique position, not quite sovereignty in the full sense, not quite separate status in any sense, but a unique position with regard to their historical status as the original people of Canada.

I was deeply concerned that this letter failed to recognize at any point that the notion of native people having certain historical rights would have a cost to them, would have an impact on provinces, would have an impact on the administration of provincial life within the constitutional headings, as it would have in limiting the ability of the federal government to legislate with respect to native people.

The best and clearest way I can express my concerns to the Premier is simply to ask him to answer this question in the course of his answers to a number of questions. Is the letter that the Attorney General sent on May 7, 1981, still the position of the government of Ontario with respect to the entrenchment of native rights in the Canadian Constitution? That is the first and very basic question I would like an answer to.

In the light of the fact that the agenda for the discussion in March still seems to be so loose -- and I must say that as a citizen this deeply concerns me if we are in fact going to move inwards a resolution of some of these questions and problems I wonder if the Premier can indicate in which forum he plans to discuss the position of the government of Ontario. I want to put the Premier on notice that if the position of the government of Ontario is going to be the same position that was expressed by the Attorney General on May 7, 1981, I as a member of this Legislature and as a citizen of the province want to have a chance to object to that position, and I think all of us would like to have a right and an ability to convey our views on the positions we would like to see the Ontario government taking.

I was disturbed when I learned that Ontario was not one of those provinces that raised any concerns whatsoever about the dropping of the native rights clause when the Premiers reached their historic compromise. If I am wrong on that, the Premier can correct the record, but that is certainly the public impression that has been left.

Unless the Premier of Ontario takes a leading role in convincing the other provinces of the importance of the notion of entrenchment and of the notion of the recognition of the historic rights of our native people, it will not happen. Every government in this country is looking for an excuse and a reason not to recognize native rights because they cause certain disturbances in the traditional patterns and ways of governing in this country, traditional ways of governing that, in my view and in the view of many people, have caused real hardship and disadvantage to the native people of this province and of Canada.

The Premier knows the depth of opposition of certain provincial Premiers to recognizing aboriginal rights. He knows them because some of them have been expressed by his own Attorney General: the Attorney General saying that if we recognize aboriginal rights in the Constitution it will mean the native people will claim the right to all of Ottawa and all of Ottawa will have to be dispossessed; and he raised all sorts of various other horrors, which he paraded before Mr. Chrétien as being the result of the positions that might be taken by the resolution, section 33.

So without for a moment wanting to take away from the importance of the questions with respect to the native fishing agreement and the other suggestions with respect to setting up a native affairs committee in this Legislature, I want to focus the Premier's attention on the question of the constitutional conference coming up in March. We expect Ontario to play a leadership role and we are concerned that this might not be possible in view of the kind of position that was expressed by the Attorney General in May 1981.

I do believe this is a time for real leadership, this is a time when Ontario can play a positive role in attempting to convince some other jurisdictions that admitting these rights is not the end of the world, as it has been portrayed in some Conservative circles. I would like to indicate to the Premier that unless some sign of good faith is shown by the conference in March, the relationship between native people and the rest of Canada, which was damaged when the premiers abandoned section 33, will deteriorate even further.

The Premier has expressed the love he has for this country on a number of occasions, but that love must manifest itself in works and not simply in matters of faith alone.

4:30 p.m.

He is the leader of this province and who knows -- one hears rumours of various sorts -- he perhaps aspires to, I will not say greater, but different heights. As such the Premier has an obligation with respect to the native people not only of Ontario but of Canada. He must demonstrate that he understands some progress must be made in March. If progress is not made, there will be a great deal of demoralization, unhappiness and deterioration of feeling among the native people with regard to the leadership of this country, both provincial and federal.

I do not think it is an exaggeration to say that progress at this meeting concrete, specific progress -- is really important. I hope Ontario will be pressing for real wording changes and a genuine recognition on the part of all governments that the historic next step in terms of the Constitution of Canada is the recognition of the historic and very real community rights of our native people.

Hon. Mr. Davis: Mr. Chairman, I will reply as briefly as possible to some of the thoughts that have been raised. Three or four issues have emerged in this discussion. I will try to deal with one or two observations made by the member for Brant-Oxford-Norfolk (Mr. Nixon). He was able to point out what I was endeavouring to say in my reply to his leader.

We are talking about constitutional matters, but some matters relating to the native people in this province do not relate to the Constitution nor to what is going to be emerging during the March discussions.

Those are part of an ongoing process. I think I observed before he did that part of the problem for all Premiers. I have, perhaps, been more fortunate than some in that our provincial native people have not said to us, "We do not want you involved." They have been ready to assist in the preparation of our thoughts and presentations to the first ministers' meeting. But the member from Brant-Oxford-Norfolk is quite correct that in matters of the law and some of the traditions the relationship has been between the native people and the government of Canada. We all have to understand that.

I was encouraged by the observations of the member for Lake Nipigon and the member for Nickel Belt (Mr. Laughren) in support of the initiatives taken by the Minister of Natural Resources. I am interested in finding them in support of government policy and of assisting us to explain it. That is not always the way. One of the difficulties we always have in sensitive issues of this nature is the problem of perception as distinct from reality.

I have met with a number of people who have a genuine and I am sure sincere concern with respect to this agreement. We met for a considerable period of time not too many days ago. I undertook on that occasion to assure them -- incidentally, I think they accepted this -- that in preparation of the regulations and the greater understanding of how the agreement would function, they would be a part of that process. The member for Lake Nipigon is correct that it is a problem of people understanding what the agreement really means. There is a degree of concern out there that I think can be resolved if there is an understanding.

From the government's perspective I appreciate the contribution that has been made. I sense from what the member for Nickel Belt said that the opposition is also in support of the principle of the agreement. One can always quarrel with the way the t's are crossed or the i's are dotted but it is a responsibility to bring people along and get them to understand it.

I think the newspapers reflected the tenor of the meeting with some accuracy. Some of them said to me, "Will you withdraw the agreement?" It was as simple as that. The simple answer to that would have been yes. Of course I did not give them that commitment but I did give them a commitment to have them involved in the process so there would be this understanding.

As the member for Nipigon has pointed out so properly, the ultimate responsibility still lies with the cabinet of this province in terms of the regulations and the orders in council that must be passed.

Dealing with the concerns raised by the member for York South (Mr. Rae), I think I am right in my recollections because I was there. I do not pretend to remember everything, but I hope he does not feel the Premiers -- well I just speak for myself -- lightly cast aside the section on aboriginal rights that had been there. That is not factually correct.

I will not portray the views of my fellow Premiers. I can only say that Ontario reacted to what we perceived at that moment to be the attitude of the native people. Once again, I have great difficulty in meetings of this kind knowing who speaks for whom. There were several communications from the native people who were not content with the wording -- I forget what it was; it does not matter. Several were not content and wanted to be more involved in determining exactly what the wording of the sections should be. So it was not done because we could not achieve agreement at the 11th hour.

It was not adopted by everybody because we were not comfortable with the reaction we had from the native people. We did not want them to feel we were imposing some wording on them that was not satisfactory. Who needed that sort of problem? So we agreed we would put in the Constitution the reference there requiring the first ministers to meet within that stated period of time.

The member for York South had some involvement when he was a member of the House of Commons. I like the way he described it: it was not moving up or down; he looks upon this as a different occupation here at Queen's Park. It is not coming from the major leagues to the minor leagues at all. It is just a different occupation. I find that very intriguing.

Mr. Kerrio: He got a bit of a surprise, I think.

Hon. Mr. Davis: What does the member mean, he got a bit of a surprise?

Mr. Laughren: Does that discourage you in your future plans?

Hon. Mr. Davis: I have never adopted the major league-minor league syndrome. I have always found this House was a test of all my talents, unlike some others. I want to make that abundantly clear.

While I think of it, because others have, congratulations on the events of the weekend. When he has three more, maybe he will be up to some of the rest of us.

Mr. Rae: Talk with my wife a little bit.

Hon. Mr. Davis: He does not have any. When his wife has three more. The Minister of Education (Miss Stephenson) will be delighted as well. It helps resolve part of the problems of declining enrolment.

Mr. Peterson: The member for Kitchener-Wilmot (Mr. Sweeney) is ahead of both of you put together.

Hon. Mr. Davis: Yes he is. He is not even close to the member for Renfrew South (Mr. Yakabuski). The member for Renfrew North (Mr. Conway) is not in the ball game at all.

I would just assure the member that Ontario will play a constructive role. He should not ask me to define it to him at this moment. He will not get me involved in being critical of or commenting on the position of other provincial Premiers. I have never indulged in that practice here in the House, but I think I know what my responsibilities are and I will endeavour to discharge them appropriately.

This province showed some initiative in getting as front and centre as we have. The matter is there and the governments of this country have to deal with it. I will have no hesitation sharing with the member in advance anything I can in the matter of positions we intend to adopt as a provincial government at the meeting, but I cannot give him that commitment now because I do not know when the ministers, the officials and the native people involved in this will have the definitive agenda in front of us.

I do not want to be pessimistic about it. I just do not want to build up any unreasonable degree of expectation, because it is complex. It is emotional and sensitive. The minimum from my standpoint is an understanding that we cannot go there and say it is so tough we cannot deal with it. As a minimum we have to emerge with a recognized process that the native people understand and respect and in which they are prepared to play a role to bring to some conclusion.

Members should not ask me how long that will take. That is the minimum. I hope we can get beyond that, but I am not going to raise any unrealistic expectations until we know exactly what the agenda is and what the attitude of our sister governments will be.

4:40 p.m.

Perhaps there are some other things the members opposite wanted me to comment on. I may have missed them. I would just like to deal with -- I think the Leader of the Opposition raised this -- the statements made by the Attorney General on where we stand. One of the things I have always found in these constitutional discussions is that there are press reports, people make speeches and so on --

Mr. Chairman: The member for York South has a point of order.

Mr. Rae: Mr. Chairman, I am sure it was an unintentional omission but the Premier did not reply to my question. I am sure he is familiar with the letter of May 7, 1981, in which several concerns were expressed by the Attorney General with respect to the concept of entrenchment itself. I wonder if the Premier would say if that still represents the position of the government.

Hon. Mr. Davis: Mr. Chairman, I was just trying to find out if the Attorney General is in the neighbourhood, because I think he would have appreciated five or ten minutes. But once the Attorney General gets started it might have been 15 or 20.

Mr. Rae: I wonder where he learned that from.

Hon. Mr. Davis: In that he is younger than I am, I guess he may have learned it from others. I am sure he would have been delighted to do that, because he has already explained this to some members of the House in public discussion.

I can assure the member that the position of the province, my position, is really no different. We have not altered our point of view as it relates to the initial wording of the resolution that was section -- whatever number it was; it does not make any difference. That is still the basic philosophy or principle on which we are operating.

Mr. Peterson: Mr. Chairman, the agenda is being distorted a little. I do not want to cut off what I consider to be a very worthwhile discussion but in the interests of time -- I gather we are just going to 10:30 tonight and there are a number of very important issues I would like to --

Hon. Mr. Wells: No, to 10 o'clock.

Mr. Peterson: We are not going to 10:30 tonight?

Mr. Chairman: No, 10 o'clock.

Mr. Peterson: Well, until 10 o'clock.

It is interesting to hear the banter between the leader of the New Democratic Party and the Premier with respect to the Premier's possible ambitions with respect to another, no better but equally fine, Legislature. It may or may not reside in this country but it is in this province but does not necessarily have jurisdiction over this province. Do members understand what I am saying?

Interjections.

Mr. Peterson: Mr. Chairman, would that not make me a great Premier?

I have great respect for the Premier's abilities, but if his ambition is to be Leader of the Opposition, there are far better odds on him doing that staying right here in this House.

However, I want to read something that is very disturbing. I want to get back to the constitutional matter of the non-native rights issue. However, this has just come to my attention and I regard it as symbolic of something in this province that is very disturbing. The letter says:

"Attached is an advance copy of the news release regarding an announcement made to Kapuskasing employees today at 4:30." Are members aware of the Kimberly-Clark press release? I am going to read it to them in case they do not have it:

"Kimberly-Clark of Canada Ltd. announced that it will close its Kapuskasing consumer products mill on April 22, 1983." I will not go into the details but it looks like 107 employees being laid off in the mill as well as 20 maintenance employees from the other firms. That is another 127 permanent jobs. Counting the ripple effect it translates into another 200 or 300 jobs.

Mr. Martel: Maybe the Premier should give the company another grant.

Mr. Peterson: I am sorry I have not had a chance to do the research on this, but the member for Sudbury East (Mr. Martel) would know about the grant Kimberly-Clark received under the $100 million pulp and paper program of a year or two ago.

Mr. Chairman: Before we get into this, are we finished with one aspect of the Constitution?

Mr. Peterson: I guess all of us have taken certain liberties. I originally started and my friend from the New Democratic Party changed the agenda a little bit, which is fine by me. However I beg your indulgence to turn back to what I think --and I am sure my friend thinks -- is the single most important issue in this province today. I could recite a long litany of statistics which are disturbing when they are laid out starkly in front of one. Comparing the unemployment rate in this province with that of a year ago: Last year, 375,000 unemployed --

Mr. Rae: Mr. Chairman, on a point of order: I wonder if my friend would indicate if this means we are not going to hear the Premier's views on the question of the position of Quebec with respect to the division of opinion which appears to exist. Does that mean he does not want to hear that discussion?

Mr. Peterson: Mr. Chairman, I said we would come back to that discussion.

Mr. Rae: All right. When?

Mr. Peterson: I am not setting an agenda. I am trying to be as conciliatory as I can possibly be.

Mr. Chairman: I started by asking for some direction in terms of the approach and everyone said, "Everyone will get along fine," and here we are not getting along fine.

Mr. Peterson: I started off laying out my outline in general. Then the Leader of the New Democratic Party laid out his views and it shifted on to his thing. I do not think the Chairman found any major objection from here. We have discussed that matter for an hour and 15 minutes. Now I would like to discuss the economy and I think that is my right, having the leadoff.

Hon. Mr. Davis: Mr. Chairman, I would like to act as a sort of conciliator between these two gentlemen. The member started out with regulatory reform, trust companies, moved to the Constitution and then to the economy. I think that happens to be correct.

Mr. Peterson: If the Premier will recall, I gave the things I would like to talk about today. We started off with one. With the Chairman's permission, I would like to talk about the economy for a while and we can resume these other matters later today.

I want to put this whole discussion in context. The Premier has been bombarded with facts. I am sure he knows them as well as anyone else. No one has been insulated from the terrible problem we are facing in this province.

As I said, unemployment was up in January from 375,000 a year ago to 564,000. The unemployment rate was up from 8.4 per cent to 12.7 per cent. If one includes those with part-time work who desire full-time work, or those people who have given up searching for work -- and there were something like 29,000 last month -- the composite unemployment number is close to 673,000. In real terms that is a 15 per cent unemployment rate.

I recognize there is a lot of discussion about what method to use and how to determine how many people are really unemployed in this province. A number of people think we should include unemployment weeks. If one uses that indicator, we have gone from 4,425,000 unemployment weeks in January 1982 to 10 million in January 1983. That is an increase of 134 per cent. That takes into account not only unemployment but the length of unemployment as opposed to just the number of people who are unemployed at the time.

The figures are absolutely staggering. In my own town of London -- presumably one of the great, rich, wealthy communities in this province, in this country; or in this world for that matter -- the situation I face on a daily basis is staggering, numbing and demoralizing to someone like myself and others in a constituency capacity. One faces a litany of human problems day after day that is depressing.

Person after person comes to me asking if I can help find a job. They will do anything, sweep floors, take part-time work, work in a restaurant, anything. They say, "Please help me out." In my own community, there have been a number of volunteer responses. We have a co-ordination committee trying to organize the various volunteer agencies. On Tuesday last the nuns of St. Joseph's opened a hospitality centre. In the old days one would have called it a soup kitchen. After four or five days in operation they are now feeding 100 regular people.

On Friday I sent people there from my constituency office who did not have enough to eat. Some of those people have assets. Some even own their own homes, but they are now being threatened by Union Gas and the public utilities commission that their heat, light and water will be cut off. They can see absolutely no hope whatsoever. We have a human tragedy and a human dilemma such as I have never personally experienced in my life.

I have heard my father talk about these things when he was in the prairies in the 1930s. I am sure there are some honourable members here, perhaps the member for Carleton-Grenville (Mr. Sterling) and the member for York Mills (Miss Stephenson), who experienced these things personally. My father was part of the great "on to Ottawa" strike in the 1930s when he was an unemployed young man on the prairies.

Mr. Nixon: A child of the Depression.

Mr. Peterson: I am embarrassed to tell members he was also a signatory to the Regina Manifesto, but he subsequently progressed from that to become a Grit.

Mr. Nixon: A millionaire Grit.

Mr. Peterson: These are problems which I suspect most of my generation never thought we would face -- seeing the diminution of hope, the diminution of any chance the people have for their children.

People come to me day after day and say the biggest single issue in this province is the prospect of jobs for young people. I know people with educated children who cannot find any work for them. We run the risk of all the attendant social problems thereto. We see the explosion in enrolment in the schools. One class in London, Ontario, which went back on Monday after the first semester, had something like 80 people in the class and did not have sufficient capacity for them. These students showed up from nowhere. All of these disruptions in the system are the result of the present massive unemployment.

I do not have to impress the figures upon the Premier because he knows them. I think he understands them and presumably is very worried about them. I would like to persuade the Premier of the urgency of the situation. I would like to convince him that he has a major and important role in solving not only the short-term problems but the long-term problems as well. I put those in separate categories.

It should be done on the same basis as that on which the volunteer services in London are responding on an emergency basis -- co-ordinating and making sure there is no duplication of service, making sure we have the right number of beds for itinerants and for others who have no place to sleep and making sure they also have enough to eat. We have to respond with the same kind of urgency in the short run.

One thing that bothers me has been the Premier's very slow reaction to this entire problem. There were discussions last fall with all the first ministers, and he was convinced of the urgency of the problem. All were very meaningful discussions. According to the Treasurer (Mr. F. S. Miller), "Everybody got along well; there was a high degree of unanimity and we are seeing a new federal-provincial spirit of co-operation." We are not fighting with anybody any more, maybe because all the first ministers are between elections; I have no idea. In any event, there was this wonderful new sense that we have a problem and we are going to do something about it, but I have yet to see what I consider a meaningful response.

The Premier is going to say: "Oh, he wants to increase the deficit. We all know Peterson, he wants it both ways" and all of that kind of stuff. He is going to give me a response that he is very good at, and I understand that; but this problem is far more serious than even he knows.

I do not know if it has hit his family. It has not hit my family but it has my married-in family. I have seen young people who cannot find work, and these are educated and bright young kids, I am not saying we can hire them all tomorrow, but in my view there are a number of meaningful things the government could do tomorrow which would go some way towards solving these problems at least in the short run. I will keep the long-term problems aside from that for a minute,

I believe the situation is critical enough to require a major short-term emergency response. The only question is, what should be that response? Should it he doing make-work programs like painting park benches? Should it be putting young people in forestry camps? What should it be? Should we hire them all in the civil service? I do not think we can afford to do that. I agree with the Premier: I do not think we could solve unemployment tomorrow by quadrupling the civil service rolls in this province and not have any money six months from now.

But I do believe the major priority for the government should be in the building area. At the same time we have this massive unemployment, there is a housing crisis in Toronto and in some other communities which is putting other and unbelievable pressures on the expense side of the family budget so that people are almost incapable of coping.

A determined government could set aside a large amount of money -- I have suggested $150 million, which in today's budgetary terms is not a substantial amount of money. Yes, it is a lot of money. It could do a lot of good if deployed carefully. The government should develop immediately an intensive, high-priority program to build rental housing.

The Premier is respected throughout the civil service and can make things happen like no other person in this province. If he said: "That is my priority, and I want it done tomorrow. I want the people in place, and I want the programs in place to get it done tomorrow," I believe there could be a response. I know of no better way to provide the jobs, the economic ripple effect, the spinoffs, that would serve our province and our country better.

It would achieve a number of social aims at the same time -- addressing the housing problem as well as the unemployment problem. A variety of methods could be used -- the Premier could take his choice. He can tell me their programs have been wonderful, that they have taken 5,000 people out of rental units and put them in homes, but that is not nearly an adequate response. The government has to have a much broader program than that.

Our calculations are in rough terms -- and the Premier can disagree with me if he likes but for roughly $10,000 per unit they could create 15,000 units in a variety of places across this province. Some could be co-op, some rent-geared-to-income public housing -- there could be a variety of mixes depending on the needs. I would rather see it done by the private sector, using incentives to get the private sector moving in these areas. I would like to see the Premier address those problems with that sense of urgency.

I note now the Treasurer says we may have a budget in April. If one looks at all the statements the Premier and the Treasurer have made since last fall when we came back, he can see the deepening crisis. At various times we were optimistic and at various times pessimistic. The Treasurer's last budgetary projections were obviously very wrong in the circumstances but let us be charitable for a minute and say that everybody else was wrong too.

There were a number of other people who felt the recession was going to deepen, who felt it was not going to come back easily. My prediction is that even if there is a cyclical upturn we are not going to come back very quickly in this province. There is lots of slack capacity. There are lots of jobs, like those at Kimberly-Clark, that will never ever come back -- at least to the best of my knowledge. If the Premier can find a place I would be delighted to find that.

We have to address that in a little different way than we address the short-term problem we have. I believe a program of building that is simple, that is neat, that uses the devices the Premier has in his available bureaucracy, could make a meaningful impact in the very short run. That is the kind of response I am looking for.

I know the government is parcelling out some programs through the various communities but I do not think it will have the lasting effect the Premier really wants. I think after the programs, whatever they are, are over, he will not see the kind of results that are really as important as they should be to this province.

Frankly I cannot understand the reluctance to move or the slowness in moving. I know that anything is difficult today and I do not expect miracles overnight. However I do expect a plan, I do expect a sense of urgency, and I do expect that the Premier and the Treasurer would develop an economic plan that they could move on quickly with some tangible results.

I have seen the Board of Industrial Leadership and Development program. I suggest, Mr. Chairman, we discuss short-term programs and then we can move into another discussion about the long-term programs, about BILD, its response and its results over the last two years and what we would suggest as an alternative.

When we criticize BILD, and we do, it is not because we do not believe in long-term structure reform. There are certain parts of BILD I am attracted to. Even though I could quibble with some of the details, I am a fan of the high-technology centres and always have been. I would have put them in conjunction with the universities. I would have had a very high manpower training component in those. I would have tried to breathe some new life into those universities, which are having difficulties at present. I would have been open to new kinds of uses for those facilities, which are undergoing a battering at present, principally through under-funding.

5 p.m.

The Premier can agree or disagree with me, but that is what I would have done. I do believe we need those long-term investments in research and development, principally in trained young people who are going to be the engine of creativity in the process of technological change in this province; so I do support that.

I do not think that having a dock in Cambridge or a liquor warehouse in Oshawa is part of an industrial strategy. The Premier may want to disagree with me on that. I am the first one to give him political credit for the Board of Industrial Leadership and Development program, but I think it was just such a superficial response. He runs the risk of trivializing what I consider the single most important problem in our province today: the need to develop a consensus among various groups in society to work towards some common goals, the most important one being increased productivity and increased competitiveness.

That requires some meaningful thought from labour and management and from a lot of groups that historically have an entrenched adversarial nature, that get their strength from disagreeing with others rather than working together. I believe it is going to require major education on behalf of all areas of leadership in this province; I do not exclude any. In the absence of anyone else stepping forward, the political leaders are probably the ones who are going to have to step forward and take the leadership in forging that consensus and getting people together.

I can be much more specific on this, because it is something that concerns me a great deal, but it is not my intention to monopolize this entire debate today. We are here to hear what the Premier has to say, and I want to hear his thoughts on the urgency of the entire matter. I am here to ask him what his short-term response will be and to hear his analysis of his long-term programs as well as his long-term response.

Mr. Rae: Mr. Chairman, I wonder whether the Premier could turn his mind to the exchanges we have been having in the House for some time about housing.

Dealing with the answers the Premier gives us is a little bit like reading tea leaves or the entrails of whatever it is that is left behind. He can correct me if I am wrong, but I detected in the Premier's responses on Thursday and Friday a willingness to move ahead particularly in the housing field, which I think we all agree is an area where there is real undercapacity on the employment and industrial sides and at the same time a very real shortage for a great many people, particularly with respect to social housing.

The approach I hear in all his answers is that there are so many things Ontario cannot do. Just to repeat: I ask the Premier to try to focus his attention, because personally I find it is sometimes a useful step to take when confronted by a series of problems that seem unsurmountable, to look in a very immediate sense at what can be done, at the steps that can be taken and at what Ontario could do if it had the willingness to do this.

The Deputy Chairman: Just to understand the process: I thought the member for York South might be on the same subject the Leader of the Opposition was on.

Mr. Rae: Mr. Chairman, with great respect. I believe I am; we are both talking about jobs. I believe the Premier is capable of responding to the Leader of the Opposition, who gave his own discourse on the subject. I want to ask a question in an attempt to get a response from the Premier with respect to one area, housing, and social housing in particular.

I want to ask the Premier whether the government intends to take or to announce any measures before the budget in April; and if not, why not, given the severity and the immediacy of the problem? I simply ask the Premier to respond perhaps more specifically than he was able to do in the confines of question period; I know his answers have to be confined to 20 or 30 minutes a shot during that time.

I wonder whether he can specifically focus on the question of housing as an immediate example of what we can do as a province that has not been done with respect to social housing. What remains to be done to house those people who are now living in very difficult circumstances and under difficult conditions? Can he do something to get construction workers back to work across the province? I wonder whether he can focus his attention on that issue.

Hon. Mr. Davis: Mr. Chairman, I thought I had focused on that rather well on Thursday, Friday or whenever. I will try to deal with the issues raised by both members opposite.

Without getting into a lengthy defence of the Board of Industrial Leadership and Development program, I must say I was encouraged to hear the Leader of the Opposition indicate that he was supportive of some aspects of it. I do not expect him to support all of it, except I remind all members that the BILD program was introduced at a time when we were not facing the same economic situation as we face today.

I tried to draw the distinction between the basic thrust of the BILD program, which is for longer-term economic growth, and the present economic situation which we face. I think it is fair to state that part of the solution that has been proposed to me by the leaders of the two opposition parties is that in the short term a partial solution would be in the housing field.

I am not going to remind the House of the number of initiatives that have already been taken. The Leader of the Opposition indicated they may not have substance in the longer term and they are perhaps not that meaningful. I only say that the people who are participating in those programs, with municipalities and others, think they are meaningful in terms of the economics of it.

I am not going to argue how important it is in adding to the economic or social capital of the province. I think that is a matter that is not subject to this discussion.

The Leader of the Opposition suggested he would like to see this done through the private sector. The leader of the New Democratic Party would like to see housing initiatives with greater focus on socially assisted housing in which, quite obviously, he looks to government to provide both the incentives, the initiatives and probably the actual physical construction in some form or other. I think that is perhaps the philosophical difference, and it is not that relevant.

Mr. Rae: Some of it is nonprofit, and some of it is co-operative housing.

Hon. Mr. Davis: That is right. I want to remind the Leader of the Opposition that we have had programs. We have just finished a very successful program. We finished a program of the very nature he has suggested in terms of rental accommodation which I think put some 15,000 units on stream in Ontario, many of which are now coming to finality.

Some of those units are in my own community. There are some in Metropolitan Toronto; unfortunately there are very few in the city of Toronto per se. There are many in Ottawa, and many in other communities. There are some 15,000 units, which is not insignificant in the total housing stock in Ontario.

Of course, the Treasurer initiated a more recent program in terms of home ownership with the basic thrust, once again, of moving people out of rental accommodation.

What I find intriguing from the Leader of the Opposition -- and I say this in a very kindly fashion here late this afternoon, because this was not the first time -- is that I can recall when we had other incentives for housing, and his observations then were not quite that enthusiastic or quite that charitable. However, I will not go back to those. I am thinking of what the Treasurer would say if he were here amongst us. I will report to him that the Leader of the Opposition feels this now is an excellent initiative.

I cannot comment on the $10,000 per unit; it would vary from community to community. There is a certain question of equity in terms of those who will be entitled to seek out that rental accommodation in that the taxpaying public generally has contributed whatever per unit.

Mr. Peterson: It's no different from a homeowner's grant.

Hon. Mr. Davis: I am just saying there is that question of equity. We have had the program. It was $6,000 or 8,000 per unit. It just came to a conclusion not too many months ago. So, philosophically, one can adjust to that.

We have always argued, and I am encouraged that both leaders of the opposition agree with us, that the housing industry has a great spinoff in terms of the economy generally. If a person is moving into a new apartment, the chances are broadloom may go on the floor, there may be a new refrigerator or a new stove, furniture, the whole thing. So the members will get no argument from me in terms of the impact of the housing program. I just would not want any of us to lose sight of the fact that we have had one. We have had two, and they have been successful. I think what the opposition members are saying is that they would like these successful programs to be continued.

5:10 p.m.

The leader of the New Democratic Party has become very specific and says to me, "Can this happen before the next budget?" The answer to that is yes, it could happen. Whether it will, whether that will be the direction, whether that will be the priority of the Treasurer, obviously I cannot commit the government today. I do not really think he expected me to.

I do appreciate the very constructive and thoughtful suggestions emanating from the two members opposite, and I shall ponder them very carefully.

I just want to say to the Leader of the Opposition, and I know he will take this as said, I do not think he really senses the government is not totally aware of the present economic situation. Perhaps many of us see even more constituents on a broader basis than he does in terms of the difficulties.

The only point I want to make, and it is not my innate or traditional optimism, is that without minimizing the problems by any stretch of the imagination, without getting into a comparison of what is happening here with a lot of other jurisdictions in the western world where one could make some comparisons, I just hope the Leader of the Opposition does not become too pessimistic or too negative about both the shorter and the long-term economic prospects.

I do not think we are talking about massive restructuring, incidentally, now that I have launched into the longer term. We are talking about certain structural changes. I say to the Leader of the Opposition there is no reason he would be aware of some of the discussions that have been going on in terms of quality of the work place and in terms of increasing productivity.

I have to say, and I may be criticized for this, that in my discussions and meetings with both management and labour, there has been a growing desire to share more in terms of resolving and finding solutions. Sure, we read about the confrontations. That is one of the problems. We always read about the differences. When people sit down and make something happen together, chances are that does not hit the headlines, but there have been examples of this, and I think there will be more.

I remain totally optimistic about the economic future of this province. I am not going to say we are going to get back to the growth periods of some time in the 1960s or early 1970s, and yet one might reflect and wonder whether in terms of the long-term quality of that growth, things perhaps did not happen a little too rapidly in terms of our long-term economic stability. I cannot answer that. A lot focuses on the energy change. There is no question that had some very real impact.

I just want to assure the members opposite that while we do not always communicate everything that ministers or the government are thinking about -- I think that is fair to state -- none the less, if they are concerned about our awareness, they should not be. We are. If they are concerned that we are not acting with the degree of urgency that they feel we should, that is a criticism I understand, although I do not happen to agree with it.

If they worry as to whether we are looking two, three, five years down the road, they should not, because we are. The real test and real challenge will be to see what the government does produce, whether it is next week, a month from now or two months from now.

As I have been here now for nearly 12 years in this capacity, I can be somewhat reflective. As one assesses that year after year, crisis after crisis, urgency after urgency, the government has reacted rather well not with perfection but, in relative terms, pretty well. I expect that will continue to be the process.

I know that will not answer the member's specific question as to how much for housing, whether there will be a program announced this week or next, but I take the suggestion very seriously, as I have the Leader of the Opposition's, because housing happens to have been a priority which this government has always pursued and will continue to pursue.

Mr. Peterson: Mr. Chairman, we could sit here and probably not accomplish very much. I know the Premier's views on a number of these things, and I know he is not going to tell us anything he does not want to tell us, but I want to reflect on just a couple of points that he has made, a couple of points where we disagree fundamentally.

First, the Premier constantly compares us to the disadvantaged northeastern states such as Ohio and Michigan. He says we are doing relatively better than they are. I do not think his sights are high enough. That is not good enough for me, and I do not think that should satisfy the Premier.

In the next campaign, if I go around saying things like this, the Premier will accuse me of being Mr. Negative and it may or may not stick. The Premier will also accuse the leader of the third party of being Mr. Negative. It is a catchy trick. I have been learning a little about politics, particularly in the past year. That does not give me the impression the Premier is facing squarely some of the very real problems in this province. His sights are too low.

Hon. Mr. Davis: You don't know where my sights are.

Mr. Peterson: The Premier's sights are Ohio, Michigan or Detroit.

Hon. Mr. Davis: I never mentioned Ohio.

Mr. Peterson: The Premier carefully does not give us any targets. He does not tell us how many jobs he is going to create in case he is wrong. He goes by the old maxim, "Always aim so low that no matter how you do, you will never be disappointed." He never is disappointed and hence he is a chronic optimist.

I am not trying to be antagonistic, although I am prepared to be. I am trying to tell him I do not think his sights are high enough. I have not seen what I would consider a concentrated, definitive, thoughtful view from the government about the natural potential Ontario has, recognizing there are going to be major structural changes and how we are going to get around that.

The automotive industry is a perfect example. There are studies from his own government saying that even if the automotive industry comes back to full health, it will employ 30 to 40 per cent fewer people. I think one has a choice. When one goes to Windsor, one can say: "Too bad about everything here, fellows. We know you are all unemployed, but boy, as soon as the American consumer starts buying, and you know it all depends on the United States, everything will be just fine. Let us be optimistic because we have a great future here. We have a lot of nice people in Ontario and we can do it."

On the other hand, one can say what I say to them: "From the best estimates we have, 30 per cent of you will probably never go back to work. The automotive industry is changing fundamentally. Massive amounts of capital expenditure are going in there. The way you live is going to change fundamentally. My responsibility as a public policy-maker is, first, not to deceive you about your prospects and, second, to work with you on the prospects we do have."

When we look at the new industries of the future, surely one of our primary responsibilities is the retraining function. The workers know in their hearts they are not going back. Nobody wants bad news in that sense. Nobody wants to be confronted with some of these realities. The Premier's job is to confront them and tell them about those realities. My job is also to confront them with those realities. That is not to say I believe those are negative and we have to be pessimistic about them. I am only pessimistic about not facing up to the future. I am only pessimistic when people kid themselves or are not intellectually honest about what is really in front of them.

The Premier's view of the future may honestly disagree with mine, that is fair enough but if we just wrap it up in pretty packaging and try to assuage people's fears in the short run, I do not think we are serving them, ourselves or our children well. What it says is we are not organizing the engines of wealth creation we do have.

The Premier has a lot of levers. The genius for him and his government is to try to sort out what he does have in his possession, the levers he does control, and try to co-ordinate them with the federal government. I understand the Premier gets nasty with those people, particularly at election time, and that is fair enough. But he does have a great number of levers under his control and to me the genius is going to be to isolate that and use the full power of government to control some of those areas.

Education is probably the single biggest key to economic recovery. For the first time in our history, there has been a net exodus from this province of 60,000 or 100,000 people over the past couple of years. I believe in the free mobility of people in this country, I am not saying they should not be able to leave, but it surely speaks to the Premier about some of the prospects that people see who do not have the same sense of optimism about Ontario that he has, or it tells him he has not sufficiently inculcated that sense of optimism in them.

5:20 p.m.

Perhaps he is making a start through his technology centres and, as I said, it is better to light one candle than to curse the darkness. But I do not yet see a sense of urgency about the problems -- maybe he does not believe there is a problem, but I believe there is -- and a sufficient mobilization of the devices, the levers he does control, to build the new kind of industrial future.

I could be much more specific; I have been in the past and I will continue to be in the future, but I just want to impress two things upon the Premier. He should get his sights up. I do not think he should be comparing himself just to Michigan, Ohio or wherever else. I think we can do better than that. We have a lot more resources than they do in many ways. We have a lot more God-given gifts than they do. As the leader of this province, as the first minister, he has to get his sights up; and when he gets his sights up, he can take other people with him along a new path.

That is the point I want to leave with him. We have been looking backward far more than we have been looking forward. Too much intellectual energy is spent defending what has gone on for the last 38 or 40 years under this administration when in fact a lot of the bad habits this government has acquired are going to have to be shed in order to make any progress in the future.

I leave that with the Premier. He gives me personal advice on occasion, so l will give him a little personal advice. He should get his sights up. He should take people with him. He has a lot of power. He is the second most important politician in this country. If he sets some targets, if he sets some goals, if he mobilizes the machinery of government to move forward, then I suspect he can probably leave a better mark in history than the one he is currently going to leave, because I think his epitaph is going to read, in spite of his great political success, "This man presided over the economic decline of Ontario." It is isolated almost exclusively in the period of his jurisdiction in the 1970s and early 1980s.

I would rather see him have a nice epitaph. I would rather his epitaph read, "When he was Leader of the Opposition in Ontario, he at least was trying near the end." Would that not be nicer? I do not mean to be political, but I think his sights are too low, I think his comparisons are too low and I think he should be looking forward far more than he is.

Hon. Mr. Davis: Mr. Chairman, I will speak very briefly. I do not know whether the Leader of the Opposition knows where my sights are, but that is irrelevant.

I am intrigued. I know where his sights are, and I know how he hopes to accomplish it. Can I just point out, though, some very obvious contradictions in what the Leader of the Opposition has said. I know he used to join in these debates with the Treasurer, and I have never taken that much time in my own estimates to get into economic issues, but I am delighted to do so because that is where he feels most comfortable, even though I have been listening, really, to some firm suggestions as to the longer-term economic future of this province.

I have read the member's speeches; I really have. I have listened to his observations. They have been less than definitive. He may say my sights are too low, but at least I have some. He has not yet focused, other than in general platitudes and observations.

I sit here and listen to his critic, as I listened to his predecessor. I will give him one example: the Urban Transportation Development Corp. It is Canadian technology, accepted now in the world community, and his party has not had either the charity or the good sense to get up and say this is Canadian technology, a breakthrough and something of which Ontarians should be rather proud.

I have set my sights with respect to transit. I have yet to hear from his party. The member for Wentworth North (Mr. Cunningham) -- he should know this -- great statesman that he is, in the midst of an election campaign communicated with the mayor of Vancouver to urge him not to buy the Ontario system.

I know politics. I would like to think I have had some measure of success, but I do not like to think I put partisan political interests ahead of the general economic wellbeing of this province. It is fine today to say the government's sights are not high enough, or mine are not. First of all, the member does not know where they are, and I am not going to delineate them for him on this occasion.

Mr. Peterson: Where are they?

Hon. Mr. Davis: Oh no, I am not going to tell you, I do not intend to tell you; but I think you have to recognize certain realities. It is great to talk about the future. The Leader of the Opposition can go to Windsor, Brampton, Oakville or London and say: "There is not going to be much future left in the auto sector. You people are not going to have the same jobs." No one is arguing that in the next number of years the same number of people are going to be required to produce the same number of units.

Part of my defence of the auto sector really relates to the penetration of the import market. People are still going to be buying cars. What I am trying to find is a vehicle, a method, some understanding that those cars should be produced here. That is why I do not accept some -- I have not had a chance to talk to Walter Gordon, but I would disagree with some of the assumptions contained in that study paper, and incidentally I am supported by a number of people in the industry. They say to me: "It is not a question of lack of productivity or the fact that our sights are not high enough. It is the fact that we have not recognized we are talking a certain lifestyle issue when it comes to the importation of vehicles."

I am a great believer in, shall we say, freer trade, but I think the Leader of the Opposition must understand from his unlimited experience in the business field that we are not fighting a battle here on totally equitable ground. It is fine to say to our auto workers, "You should take less so we can be more productive or your job will disappear;" and continue to have imports, at the same time as managers, lawyers and doctors are experiencing the same, shall we say, relative level of economic return. The fact is, if one uses Japan as an example, Japanese lawyers, doctors and politicians all earn less on a percentage basis than we do here, Yet we expect to be able to isolate the United Auto Workers or what have you.

I say to the Leader of the Opposition I am not here to defend the UAW, but that happens to be a part of the issue. It is not just a question of straight productivity. To a certain extent it is a lifestyle or quality of life issue. We have, in North America, established a certain lifestyle so that we cannot, in the short run or even in the longer term, compete totally with a different society. That is really what the member is talking about.

I am not comparing us to Ohio, Michigan and all the rest of it. Sure, I do on occasion. I did when somebody asked me about university grants, because that is sort of our economic competition. But we have to be realistic. We should not fool ourselves with talk about the long term and all the structural changes and what we should be doing without giving real effort as well to an existing industry, like the auto sector, when people are going to continue to buy cars as surely as we are chatting here in the House at this moment. The only pitch I make is that I want those cars built in North America. That should be the direction of our policy, what we are attempting to achieve.

I do not want to go to American Motors tomorrow and say: "I have to be realistic. I have to level with you. You are all going to be out of work in two or three years because people are going to be buying their cars from offshore." That is not my approach, and I caution the member now, that will not be my approach. I will continue to try to fight for either investment by people from offshore and production here, or some method whereby our producers have an even chance in terms of the domestic market.

I also want to give my own personal point of view as to how certain things should change. I have listened to the Leader of the Opposition's speeches and I have been with people whom the Leader of the Opposition and I have both known for a number of years. I must confess the member comes to the early part of the Young Presidents Organization meetings when I am invited to pass on my views to that very distinguished group of people once or twice a year. He is very polite. He does not stay for my remarks, but he is at least there to say hello as I arrive. I do not blame him for not staying.

I want to make this point to him. He talked to me about the housing industry just a few moments ago, saying his preference would be that it be dealt with through the private sector. I know the member is a great private sector supporter. He almost puts it on a pedestal. If that is the case, then I think he should be saying some of these things to the private sector, not just to the government.

Why are we in some difficulty in the auto sector? I will tell him. I can be pretty evenhanded on this in terms of trying to sort out not only how the problem was created but why we are not moving away from it fast enough and why we have not found solutions. It was not government that created problems in the auto sector, with respect. It was not the UAW. It was not management alone. It was a lack of recognition that technology was changing. It was being changed by the private sector in other countries. There was a lack of awareness that consumer demand was altering as fast as it was, that energy problems were upon us. It took the private sector here two or three years to adjust.

5:30 p.m.

Why have they bothered to put the lights on at this hour of the afternoon? I am taking too long, but he has asked me what I think, so I am telling him.

In very simplistic terms, while government has some responsibility and must provide some leadership, there is no way we are going to resolve the longer-term issues without the very real involvement and creative capacity of the private sector. Take the high-tech centres. He does acknowledge those are good. Certainly, members of the Liberal Party acknowledge they are good because they have been at all of them so far.

He asks why they are not in the university community. I will tell him one reason. It is because these centres will be serving a number of institutions. One of the rationales for Cambridge could have been one mile this way or two miles that way -- the rationale in terms of Ottawa was very simple -- because we can draw upon McMaster, Waterloo; and let me not neglect Laurier, my son would be upset, he would be shocked. We can draw upon a group of institutions that are close: Conestoga College; Sheridan is not that far away. There one has the many disciplines available for this centre. That is one of the very logical and rational reasons.

I would have been reluctant -- some of my friends in the academic world will be upset by this -- to have had these centres located physically and what would appear to be under the jurisdiction of a university. The universities have a very real role to play in this, but it is practical research, application and marketing of this research where the universities have not had a degree of expertise over the years. This is fundamental to the success of these institutions. That is why they are not physically on campus at Western or McMaster or wherever.

We want the universities involved. They are involved. They are very supportive, but we want them to know these are rather distinct, freestanding institutions that can think for themselves and create things. I do not say that to be provocative. It is a realistic approach to take. I do not know whether I have answered the member's questions or not, but I know the other member has some observations to make.

Mr. Rae: Mr. Chairman, the trouble with the kind of sunset and sunrise alternative that has been posed by the leader of the Liberal Party is that there is a heck of a long time between the sunset and the sunrise. One is talking about people's lives here. I do not think it is the height of responsibility to go into a centre like Windsor and tell people there is no future for a great many of them in the auto industry. The challenge is to build on the strengths of this province and the strengths of industries that are there.

Look at the industrial strategies that have worked in Japan and West Germany and have been successful in some of the European communities. They have been based on strength, on the economic strength of a province. They have been based on a sense that one does not just invent industries from whole cloth; one does not suddenly invent thousands of jobs from the mind of the beholder. One builds on the strengths that are there and on industries that have grown up, the talents that have been built and the capital that has been invested.

It would be a ludicrous strategy for this province to abandon in any way, shape or form, as somehow unimportant, an industry like the auto industry which has been at the foundation of the Ontario economy, certainly since the Second World War and even prior to that time. There is a very real difference --

Mr. Kerrio: What are you talking about? Retraining the people?

Mr. Rae: The member has had his chance. He can listen. He has been interrupting for about three months now. Perhaps he can just listen for a second.

Mr. Kerrio: What are you talking about?

Mr. Rae: You have been talking from your seat for three months. Perhaps you could just listen for just a moment. Just listen. Stop squawking and listen for a moment. Give me a chance to speak --

Mr. Kerrio: If you cannot stand the heat, get out of the kitchen.

Mr. Rae: I can take whatever heat, noise and there will no light; it will be just heat, noise and malarkey that comes from the member for Niagara Falls. I can assure you, it does not bother me in the slightest. The only difficulty is that it makes it a little harder to get one's point across when one is continually interrupted with goose calls from the member for Niagara Falls.

Mr. Kerrio: If that bothers you, you should sit down.

Mr. Rae: I do not intend to sit down and I do not intend to stop talking either.

I simply want to say to the Premier that the disturbing feature, in listening to the responses we get in question period when we get to the approaches we have taken to the auto industry, for example, is the kind of approach we had from the Minister for Industry and Trade (Mr. Walker). When faced with the very real prospect of the loss of hundreds of jobs in Chrysler as a result of the closure of the spring plant and when faced with the very real difficulties that are going to result from their decision with respect to the diesel plant, one gets the sense from the minister that this is simply what I call the miracle of the marketplace working itself out.

Yesterday he knew about this problem and, of course, as he said in the House in the middle of January: "The closure of the spring plant was inevitable. It was something that was happening." One gets the sense from this government of impotence when faced with a variety of corporate decisions of one kind or another, the sense of impotence -- if I might put it in an institutional sense -- when I listen to responses from the Premier and others saying: "Well, there is not really very much we can do about these closures. It is not possible for us to move on these closures. It is not possible for us to do any more."

The Premier should understand there are a lot of people in this province who are looking to a more activist approach from the government with respect to this pattern which is taking place. If I may say to the Premier, when looking at what has happened and is happening to the auto industry, I am delighted that he finally came on board when he started to talk about increasing the value of Canadian content in terms of imports and encouraging Japanese investment --

Hon. Miss Stephenson: He has been saying that since long before you ever thought of it.

Interjection.

Mr. Rae: Let the Premier calm down. He has said lots of things which might have made me want to interrupt.

Hon. Mr. Davis: But you have come latterly on board.

Mr. Rae: No; let him look at the record of those parties which were raising concerns about the extent of the import problem and the problem of Canadian content, both as it affects the auto pact and as it affects the Japanese imports, and he will find that he was a little slow and eventually started coming on board and putting pressure --

Hon. Miss Stephenson: You may be talking about the federal level.

Mr. Rae: The Minister of Education will have her chance whenever we get to discuss Bill 127. We do not know when that will be. We hear different stories on different days and I can understand why she is so agitated. Perhaps she has just had a conversation with the Minister of Health (Mr. Grossman) or the Attorney General (Mr. McMurtry) about the problem. I do not know why she is so agitated. Perhaps it is the degree of her agitation.

Hon. Miss Stephenson: No, I'm not agitated at all except you have to be factual. That's all.

Mr. Rae: I always try to be factual. She should do the same.

Hon. Miss Stephenson: I do; I also succeed.

Mr. Rae: She also succeeds: congratulations, a good product of the Ontario university system.

I would simply say to the Premier that, yes, we want a sense of strategy from this government; and yes, we want a sense not of building a series of centres with very little funding behind them. The reality is that of the money and the investment, some of it has to be public investment. There will be private investment as well, but there has to be public investment. It may go well beyond -- and I think the Premier understands this -- the kind of Conservative truisms which have been stated from time to time, the preoccupation with the size of the deficit, for example, which has so alarmed the Treasurer and which has so alarmed the members in the Liberal Party, and which in my view has prevented this government from taking the kinds of steps which had to be taken.

I am interested, for example, in discussions on the deficit now. For the last month, all the business leaders have been going to Ottawa and saying: "You have to have a bigger deficit. The deficit has to be even larger." Apparently $17 billion or $25 billion is not quite enough.

I would simply say to the Premier that if he is going to have a sense of strategy it has to be based on the jobs which are there and it has to be based on the strengths and the resources which are there. I know my friend the member for Sudbury East (Mr. Martel) and my friend the member for Nickel Belt (Mr. Laughren) were both talking very directly about the kinds of jobs that could be produced in Sudbury today if the government had a strategy that was more interventionist and more prepared to do some investing on behalf of the people of this province in the future of the province.

But I say it has to be built on existing strengths and has to be built on industries which have a real track record of success in this province. I say to the Premier, unless that is done, it is all very well to carry out his hosannas to the private sector about the need for the private sector to become involved, I do not think he will find very many people in this House who would disagree, the real disagreement is exactly what is the track record of the private sector unless the government leads. The hard reality of this last quarter of the 20th century is that unless government provides the leadership in this province it is not going to happen. The evidence it is going to happen simply is not there.

5:40 p.m.

We look at the sectors where jobs are frankly disappearing or, to use the Premier's euphemism, where jobs are not being performed. Whatever language he chooses to use, the fact remains jobs are being threatened in certain basic industries. We have to look at ways in which government can make sure that when the economy is working back to full capacity we will not have the significant unemployment problems we have today. I suggest without that sense of strategy and leadership from the government, it is not going to happen.

I regard the Board of Industrial Leadership and Development program as a political admission on behalf of the government that something has to be done. I regard it as too much of a cosmetic exercise. But if the dollars could be put there, if the investment could be put there and the real partnership created, I think we would be well on the road to providing opportunities for our young people. Perhaps the Premier will understand why today, of all days, I am concerned about that, perhaps more obviously than on some other occasions. We would be well on the road to providing them with the sense that the 21st century is going to belong to them and is going to provide them with the opportunities they deserve.

Mr. Nixon: Mr. Chairman, I want to raise briefly with the Premier a matter that perhaps only he can correct. It has to do with the approval by cabinet of the decisions taken by the joint hearing board on the proposals for the location to bring power from the Bruce generating station down to southwestern Ontario. I will deal with it only briefly, but I can assure the Premier this has the potential to be just as controversial as the location of the first line out of Bruce down to Milton, the famous Georgetown -- I forget what they call it, it is so famous; we will call it Georgetown-Milton.

The Premier is aware how extra hearings had to be ordered. There was a lengthy delay and even now there is substantial dissatisfaction. Without going into all the history, we know Bruce A is in full operation barring some small problems they are having with leaking tubes, that Bruce B is -- the Premier is smiling because he knows all about that.

Mr. Peterson: He has the same problem.

Hon. Mr. Davis: I saw your leader smiling.

Mr. Nixon: That is all right. It is going to help this because this is a rather dry issue.

Mr. Peterson: In a man his age it is understandable.

Mr. Nixon: Obviously, as Bruce B comes on line, involving the commitment of hundreds of millions of dollars, billions of dollars, it is obvious the power has to come out to the general grid. The usefulness of the proposals is what I want to discuss briefly.

About a year ago the newly constituted joint hearing board, involving a combination of the Ontario Municipal Board and the environmental approvals board -- or whatever one wants to call that one -- held lengthy hearings in Stratford because the proposal from Ontario Hydro was to bring a new high voltage line from the Bruce Peninsula down to the London area.

If one thinks of the geography there one can understand why the hearings were held in the Stratford area. That would be convenient for most of the people concerned, it being normally expected that those lines would be built, if not on a regular ruler line, at least generally from Bruce to southwestern Ontario.

At that time, proposals were made by a special group of interested farmers from the Huron and Bruce area, and supported by others from Middlesex and even as far over as Waterloo, in which the special committee called the Foodland-Hydro Committee, chaired by a well-known farmer in the area, Mr. McQuail -- is he a constituent of the member for Huron-Middlesex?

Mr. Riddell: Murray Elston.

Mr. Nixon: He is a constituent of the member for Huron-Bruce (Mr. Elston). He is well known in the area. He undertook to speak for the farmers, and spoke clearly, that those valuable farm lands should not be interfered with by 500-kilovolt lines.

Mr. Rae: One of ours, was it not?

Mr. Nixon: As a matter of fact, he is a policy adviser for the New Democratic Party. He was an immigrant from the United States some years ago. He has a lot of qualifications that make him capable of being very effective in trying to persuade this hearing group that the line to bring electricity from Bruce down to London should not go anywhere near the line as the crow would fly from Bruce to London.

The thing that tipped the balance was that after the Foodland Ontario submissions were before the hearing committee, the new Deputy Minister of Agriculture and Food, Duncan Allan, undertook, in making a place for himself in the history of the province, to lecture Ontario Hydro and particularly the hearing board. He said the Ministry of Agriculture and Food was not going to sit still and let them interfere with our scarce class 1 and class 2 land, some of the best land anywhere in the world, in Grey and Bruce counties and down into Huron.

It was on that basis the hearing board decided that instead of bringing the electricity from the Bruce peninsula down to London through those counties they would use an alternative that was much recommended and discussed at the time the original lines were built through Bradley- Georgetown. In their wisdom they recommended the electricity be taken east from the Bruce peninsula directly across to Essa, our junction near Barrie on Highway 400. From there it would come down relatively close to Highway 400 to Milton and then be distributed into southwestern Ontario through lines that would run through the farming lands in Brant, Oxford and Norfolk.

The Premier can understand why I am concerned at this. My ox is being substantially gored and it is necessary that I bring this to his attention. I will do that as quickly as I can. Please do not, however, think that this is just a line-fence issue, Mr. Chairman. I would suggest that if the actual approval were established along this line and construction were to start, the Premier would find there would be the same sort of significant objections coming from the populace affected as he experienced in the Bradley-Georgetown situation.

Most sensible people would have been able to see about where the line would go -- that is, from the Bruce down to London. If a few doglegs were to be made in order to avoid a pond where some geese are going to land or any other significant thing, then of course we would support that, we would think that would be essential; but to abandon that route entirely and to put the lines way around to the other side of the province seems to be something that should concern the Premier.

The people concerned in the line from Bruce to Essa were really not aware of what was happening. There was just one very small advertisement put in the newspapers that the hearings were even being held. Why should they think it would concern them?

It was the same with some residents in my area, particularly in Norfolk county in the fruit, vegetable and tobacco land. This is some of the best land anywhere; of course members have heard that line before but in this instance it happens to be true. Why would they go up there to protest about the possibility of a new hydro line going through their area when its main purpose is to bring electricity from Bruce down to London and southwestern Ontario? Of course there is also the possible crossing into Michigan, if we ever get into the situation where we can sell some of this very expensive and at present embarrassing oversupply of electricity.

To complicate matters, the Foodland Ontario committee made a proposal to the hearing officers that they might as well bring the lines along the alignment of Highway 401 from Milton down to London. There must have been confusion in the minds of somebody that these towers were going to straddle the highway. Obviously there is not enough land in the right of way to have the towers come alongside the highway unless they move into the farm lands along that area, purchase a new right of way and put the lines along there.

The fact that it runs more or less on the same alignment as the highway appears to me to be a very insignificant advantage, one that I really cannot feature. Officials at the county level and representing the farmers in my area, the area of the member for Oxford (Mr. Treleaven) and certain other areas, launched an appeal with cabinet, asking how they could possibly approve an alignment along Highway 401 when it was not even the subject of the discussions at the lengthy hearings held at Stratford?

It was not one of the proposals from Hydro, and the citizens concerned had no opportunity even to object in the mildest form that such a proposal should take place. The status now is that the joint hearing board, in a general review of these possibilities, has accepted the proposal of Hydro designated M3. I will not bother enlightening you on the significance of the number and the letter, Mr. Chairman, maybe you are aware of it; but they wanted to amend it to include a line along 401.

5:50 p.m.

I want to explain what has happened as clearly as I can because of what I consider the unnecessarily powerful influence of some individuals. I refer particularly to the new Deputy Minister of Agriculture and Food in asserting what he considered to be the best utilization of farm land in the area.

The recommendation from Ontario Hydro known as M1 to bring power from the Bruce down to southwestern Ontario was rejected, even though the chairman of the hearing board accepted it as the most logical and coherent proposal. The other members of the hearing board overrode him in their decision, however, and approved a line from the Bruce over to Barrie down to Milton. From there it would be divided perhaps as much as three ways: one along 401, another line down to Middleport, also in my constituency which has one of the largest transforming stations anywhere -- and another that would go from Nanticoke over to London.

There is so much to be said about this. Here is Nanticoke, the largest coal-fired generator in the world, and the main pressure to bring this power down from the Bruce plant was so that we would not have to use Nanticoke. Then the government would not have to fulfil its promise to put in scrubbers. In other words, they would fulfil their promise to clean up the acid-air environment, which is in negotiation with the United States. This would not be done by putting in the scrubbers that were promised but by saying, "We are going to turn the key off on that machine and stop shovelling coal. We will stop using the largest coal-fired electric generating capacity in the world because it is already out of date and obsolete."

The whole thing is compounded by the fact that we do not need the power in southwestern Ontario. The rate of growth has plummeted from the seven per cent of 15 years ago right down to about one to two per cent, which means that we do not need it at all. We do not need it for export, because the Americans cannot be persuaded to buy the power even at cut rate. I expect and hope this will change in the future, we certainly hope it will.

To make a decision right now on the basis of the facts I have tried to put before the members very briefly flies in the face of common sense and common justice. What can we possibly tell our people in the agricultural areas I represent which are already affected by many Hydro lines? On our farm there are seven of these high-tension towers and we know what it is like. For the government to reject an appeal on the basis that was put forward by the Oxford Federation of Agriculture and others simply does not make any sense, except for this: on the basis of being stung in the problems they experienced in the Bradley-Georgetown line they want to get an approval so it will not be postponed again and again, as was their previous experience.

This is the only chance I have to put this matter to the Premier directly and hope for a response from him that surely he can see a certain basic injustice and incoherence in this approach. Surely there is some way a further review can take place. I am well aware that additional hearings will be taking place as to the more exact location of these lines, but right now there is an approval -- I should have the correct name for the approval; it is in fairly general terms but still specifically approving the roundabout access to southwestern Ontario from the Bruce Peninsula.

I do not want to be offensive to my colleagues in the area who have strongly argued the other side, and I can understand why they would, but somebody has to make the final decision on this and if the final decision is based on what appears to be emerging from this discussion, I repeat that it is unfair, unjust, extraordinarily expensive and completely incoherent.

Mr. Chairman: Would the Premier like to respond?

Hon. Mr. Davis: I thought perhaps the member referred to might like to present the other point of view so I can sit here and listen and once again be the final court of appeal. I have heard similar observations from not just his colleague on the front bench but others who were constituents of his as to how the great logic was to take it over -- it has to follow the 400 route down and then across, that is the argument they have used for some years.

I am not going to get myself caught on this by saying in any professional way or from great knowledge what is the best route. I would only ask the member opposite to understand the process, and also not to make any apologies for Ontario Hydro in this, the route that has now been recommended by the hearing board --

Mr. Nixon: It has been accepted; and accepted by the cabinet.

Hon. Mr. Davis: All I am saying is that I do not think this was necessarily the route most enthusiastically supported, certainly initially, by Ontario Hydro. I may be wrong. I hear about appeals to cabinet on occasion and how we should not interfere or if we have, why have we, etc. The members will all recall these.

So we set up a process and as a result it --obviously the line has to go somewhere. Some people did not want it in their area; the member's people do not want it in theirs --

Mr. Nixon: They have not even had a chance to express their views on it.

Hon. Mr. Davis: I am going to check into that for the honourable member because I understand there was some opportunity to present their views. I could be wrong, but I understand there was.

So the cabinet is faced with this very difficult problem. There is a hearing board that has been constituted -- it was known by all members of the House -- where we hope objective decisions are made. The decision or recommendation comes to cabinet, and then we get a group of people who, for very understandable reasons, say they do not agree with it so they launch an appeal.

If the cabinet had agreed with that appeal we would have had to face a similar question from the member's colleague -- and I understand that -- saying, "Why did you reject, theoretically and we hope substantially, the objective advice from the hearing board." That is the problem we have.

The honourable member can tell me how that is reconciled. As sure as I am sitting here, if we had accepted the appeal, in language even stronger than the member's, the member for Huron-Middlesex (Mr. Riddell), in a voice

Mr. Nixon: The Premier has the alternative in his mind, does he?

Hon. Mr. Davis: I know the problem; believe me, I am aware of it.

Mr. Nixon: The Premier knows the problem? The Premier has the problem.

Hon. Mr. Davis: I fully understand it, but I also know we would have had a problem if the decision had been something else. He shouts louder than the member for Brant-Oxford-Norfolk. I want to assure him that is not the reason, but that is what we have to face.

Mr. Chairman: The member for Huron- Middlesex, do you want to start off and be interrupted at six, or shall we just leave the chair and start at eight o'clock fresh?

Mr. Riddell: There are two matters I want to bring to the attention of the Premier hoping that he will get involved. It is going to take a little time to talk about these issues so I would be pleased to continue.

The House recessed at 5:58 p.m.

7 février 1983