Journal des débats 1986-janv-09 | Assemblée législative de l'Ontario

Mr. Speaker: I would ask all members of the assembly to join me in welcoming an outstanding athlete in Ontario, Ben Johnson, who has been chosen Ontario's amateur athlete of 1985.

I have a ministerial statement on my list but do not see the minister.

RECESS OF HOUSE

Mr. Timbrell: On a point of order, Mr. Speaker: In the hope that this will not become a regular occurrence, I would like to suggest that today would be a good occasion to adjourn the House for five or 10 minutes until the minister in question is here in his place, prepared to deal with the business of the province.

Hon. Mr. Nixon: The suggestion made by the honourable House leader is not without merit. In my lengthy career in this House, and you may remember, Mr. Speaker, there was a time when the bells used to ring well past two o'clock, to 2:15 and 2:20. It was agreed on all sides that the business would start right at two.

I agree that it should, and I will admonish my colleagues, particularly those who are prepared to make statements, that they should be here. We will attempt to do that in the future. If they are not here by now, then it is up to you, sir.

Mr. Speaker: As I stated on a previous occasion, I do not believe it is in order for the Speaker to recess the Legislature except upon grave disorder.

Hon. Mr. Nixon: Mr. Speaker, it may be that you have an indication there is a statement to be made. I do not have one. I suggest --

Mr. Timbrell: We did.

Hon. Mr. Nixon: The member has the advantage over me, but I suggest we go past that order of business and go directly to oral questions. My colleagues and I are ready; however, I am now receiving mad signals from under the gallery that there is someone here prepared to do his thing.

Hon. Mr. Kwinter: Copies are being distributed right now.

Mr. Speaker: Please proceed, Minister.

STATEMENT BY THE MINISTRY

INSURANCE RATES

Hon. Mr. Kwinter: I would like to take this opportunity to address the House about the current problems in the insurance industry, most specifically those affecting both the cost and availability of commercial liability insurance for business and public institutions in Ontario.

This is a complex problem which demands careful and considered thought and action. We must avoid the temptation to seek a quick fix that may in the long run damage an industry that forms a significant part of our economic system and ultimately jeopardize the consumer's interest.

Insurance is an international system and, as such, the problems we are facing today in Ontario are problems of an international scope. The current situation with property and casualty insurance is part of a worldwide cycle in the insurance industry as markets adjust to claims and investment experience. The impact has been most severely felt in the industrialized sectors of Europe, the United States and Canada.

Property and casualty insurance in this country is generally offered by primary insurers, who, in turn, rely on backup reinsurance to do business. The existence of reasonably-priced reinsurance is a major key to a sound insurance market.

If a Canadian primary insurer cannot cover off a significant portion of its risk through reinsurance, then that company's ability to underwrite risks is severely curtailed. This is what is meant by the problem of reduced capacity. Price aside, insurance firms are sometimes refusing to underwrite even their old customers because they simply cannot cover off the risk through reinsurance.

Disturbing reports are now flowing in from around the world. We read of American underwriters swarming the streets of London, England, searching for reinsurance but failing to find the capacity they are seeking. In fact, market observers are saying this is proving to be one of the most gruelling reinsurance renewal seasons ever seen in London.

As in other highly industrialized jurisdictions, we are experiencing a scarcity of capacity in commercial and public liability insurance. The American insurance industry has been raising rates or refusing to write liability coverage for county and municipal governments and professional and business people in a wide range of occupations. The insurance industry in the United States blames the situation on rapidly rising court-ordered liability judgements and an industry price war in the early 1980s that they contend lowered rates to an unprofitable level.

It is equally important to mention that other provinces in this country are also experiencing problems. As has already been reported, the Insurance Corp. of British Columbia, faced with continuing losses, sold its general insurance business to a private Ontario company at a loss of $5.3 million. As well, the Manitoba Public Insurance Corp. had a loss of $4.8 million in its general insurance division in 1984.

Similarly, the Saskatchewan Government Insurance, the only other provincially operated general insurance business, estimated that its division lost $3.8 million in 1984. It is very clear that this is a problem affecting all governments in Canada, including the federal government.

The causes of both the cost and capacity problems are many but they can be summarized into four basic categories: excessive price competition, as seen in the rate-cutting wars of the early 1980s; low interest rates, which have reduced insurance industry investment revenues; higher claims and court settlements, and overly specialized underwriting, as occurred in the recent case of United Canada Insurance, which dealt exclusively in the commercial trucking area.

2:10 p.m.

This government is committed to protecting policyholders. Last month, I told the Legislature that my ministry was responding to the serious problem by meeting with primary insurers, reinsurers, the Insurance Bureau of Canada, the Facility Association of Ontario, the Ontario Trucking Association and the Ontario Motor Coach Association.

As a result of our efforts, the Facility Association has agreed to make insurance available to all commercial vehicles. Moreover, the association will provide increased coverage for long-haul carriers and buses to allow them to continue to do business in the United States.

While discussions were continuing with the reinsurance industry regarding its future intentions, my ministry and other ministries of this government held a series of consultations with potentially affected client groups. These included meetings with representatives of the Ontario Hospital Association, children's aid societies, the Ontario Association for the Mentally Retarded, the Ontario Association of Homes for the Aged, the Ontario Association of Children's Mental Health Centres, the Ontario Association of Children's and Youth Institutions, the Ontario Association of Family Service Agencies and the Private Home Day Care Association of Ontario.

This government has met with treasurers of regional municipalities. We have also scheduled meetings next week with representatives of the Metropolitan Toronto Board of Education and the Association of Municipalities of Ontario.

On November 26, I met in Ottawa with the Honourable Barbara McDougall, the federal Minister of State for Finance, to discuss the insurance situation, express my concerns and determine what the federal government plans to do. In this connection, my superintendent of insurance has maintained constant contact with his federal counterpart.

Cabinet has approved the creation of a general insurance compensation plan to protect policyholders in future insurance company insolvencies. This compensation plan is a first step to provide long-term stability in the general insurance industry.

As I advised the House earlier, we have co-ordinated the actions of all involved ministries in this regard through the formation of an interministry committee. This committee is identifying insurance problems affecting other ministries' client groups.

As a result of these efforts, we have made some progress. However, the situation has been made more critical by the year-end decision of the reinsurance industry to limit its participation in underwriting Canadian reinsurance needs. Further action by this government is clearly needed.

I have instructed the interministry committee to tackle immediate problems relating to insurance availability as they arise. To facilitate this action program, I am announcing today the creation of a special information telephone line service through the office of the superintendent of insurance to provide information and advice to business and nonprofit organizations experiencing difficulty in obtaining liability insurance.

This action program may address in part the immediate crisis, but we must also confront the long-range and cyclical nature of this problem. I am therefore announcing the creation of a task force to provide, within three months, recommendations relating to the problems of cost, capacity and availability in the property and casualty insurance industry in Ontario. I have instructed that the task force have private sector participation. I am pleased to announce that David Slater, former chairman of the Economic Council of Canada, has accepted the government's invitation to chair this task force.

The task force will have at its disposal the full resources of the office of the Ontario superintendent of insurance, the interministry committee and other assistance as may be deemed necessary. The task force will draw on previous reports and studies such as the reports of the select committee on company law in the late 1970s, the recent report of the Ontario Task Force on Financial Institutions, the federal green paper and the report of the Blenkarn committee. The terms of reference will be broad and will cover cost and capacity problems in Ontario property and casualty insurance markets.

I have made copies of the full terms of reference available to members of the Legislature and the media. I have instructed the task force to comment on matters it concludes should be dealt with immediately.

With respect to other initiatives, the government has met with representatives of the farm mutual insurance companies of Ontario, and as a result we are considering making amendments to the Ontario Insurance Act relating to farm mutuals, which should have the effect of increasing the capacity of the Ontario insurance market.

In the meantime, the Ontario government continues to support the proposal for the creation of a Canadian insurance exchange. The successful startup of an exchange would result in an increased Canadian underwriting capacity and, one hopes, a substantial home-grown reinsurance industry.

These are some measures the government is taking right now. Over the long haul, the cyclical nature of the industry will likely be a key component in the normalization of insurance affordability and availability.

Despite the international dimension of the problem facing us, as I have indicated today, this government is not prepared to stand aside while this crisis threatens some elements of our economic and social system. There is no doubt that we are going through a difficult time. In the long run, we believe the situation will improve and stability will return. In the meantime, we as a government are acting to provide ways of protecting Ontario from the present situation and from its recurrence in the future.

I am sure the members of this House are anxious to discuss these matters, and for that reason I welcome the opportunity, after question period, to elaborate on this government's initiatives.

ORAL QUESTIONS

INSURANCE RATES

Mr. Grossman: I have a question for the Minister of Consumer and Commercial Relations. The minister and the industry have been aware for six months, at the very least, of the problem about which the minister has just spoken. Indeed, it was raised on the record with his colleague the Minister of Municipal Affairs (Mr. Grandmaître) by the Association of Municipalities of Ontario in August. Now he has decided, after six months of literally doing nothing, to appoint a task force that will take a minimum of a further three months before anything happens.

In the meantime, the minister may be aware that, as the opposition predicted on Tuesday last, the Wellington County Board of Education has ordered its schools to halt all athletic programs because it has been unable to secure proper liability insurance coverage. Indeed, the gymnasiums in Wellington county are closed today. Because of an injury-to-participants exclusion in its policy, the ban includes instructional as well as competitive sports; no gym classes.

Can the minister tell us what advice the Wellington county school board will get if it calls his hotline?

Hon. Mr. Kwinter: The Wellington County Board of Education has already got its advice. My officials were in touch with Mr. Chamberlain of the Wellington county board earlier today.

In fact, the press report is not quite accurate. They have received an offer of insurance which they are considering. They are not happy with it because they feel the terms are rather vague and the exclusions are not precise enough for them to know where their liability is. They are looking at a reciprocal pool plan. They are looking at accepting the offer that has been made. They are also looking at other potential sources of insurance.

Pending that examination, the school board made a conscious decision to hold off any athletic endeavours until it comes to that resolution, as they hope to do at the beginning of the week. Mr. Chamberlain has been in touch with us, we have counselled him as to what we feel his options are, and they are going to make a decision based on that determination.

Mr. Grossman: It is quite clear that the minister is taking the position that all that was required was contact with the ministry and with some insurance companies. However, the Ministry of Consumer and Commercial Relations and the government are responsible for the fact that gymnasiums are closed today, since the minister could have done one or two months ago what he did under pressure today, because this problem did not suddenly crop up on January 1.

I say to the minister and to the member for that area on the government side of the House that those gymnasiums are closed today because the government of Ontario sat and did nothing until the gymnasiums were closed. I am going to call the Guelph Mercury and tell them that before the day is out.

Mr. Speaker: Order. Would you place your question?

Mr. Timbrell: The minister should have spent less time counting the Mercedes limousines and more time working on this.

Mr. Grossman: May I ask the minister why --

Hon. Mr. Bradley: Now I know where those 19 delegates went.

2:20 p.m.

Mr. Grossman: A commission was set up by the previous government to look into insurance limits and the reparation system generally. It was reviewing these kinds of matters, but not all of them. Why was that commission terminated by the new government on July 4?

Hon. Mr. Kwinter: The Leader of the Opposition has alluded to several things. I think I should tell him this government has not sat on its hands and done nothing. We have been meeting for months with the various client groups and advising them about the potential problems.

We have made a decision. I think this is something everyone in this House should realize. This government is not in the insurance business. Up until December 31, we counselled and cautioned all of the various client groups that there were potential problems, but until we knew the reinsurers were not going to be providing reinsurance --

Mr. Grossman: They knew about it months ago.

Hon. Mr. Kwinter: They did not know. They had been counselled about potential problems.

Mr. Grossman: They had the insurance bureau telling them over there months ago.

Mr. Speaker: Order.

Hon. Mr. Kwinter: Once that had been determined, we have been acting on and resolving these problems.

Mr. Rae: The minister says they have counselled and solved problems. He has people going to London and everywhere, but let us bring him back home to Guelph. Today there are schools that are not offering physical education programs for the simple reason that the insurance companies have told them they will not offer them insurance for certain kinds of programs. That is happening today -- not in London, England, not somewhere off in Paris nor on the markets in Zurich, but right here in Ontario in our school system.

What assurance can the minister give the parents of students in Guelph that tomorrow their kids will be able to play in a schoolyard without being hauled off into a classroom because there are no programs being offered by the board of education?

Hon. Mr. Kwinter: The assurance I can give the people in Guelph is that their school board has made a conscious decision to evaluate its options. It does have options.

Mr. Rae: No, it has not.

Hon. Mr. Kwinter: It actually has three options that Mr. Chamberlain expressed to me it was considering. School board members have made a conscious decision that until they decide which option they are going to choose, they do not want to have those activities taking place. They are meeting on Monday to make a determination about which option they are going to choose. There is no question that they have options. They just have not determined which one they are going to follow.

Mr. Ferraro: First, may I say to the Leader of the Opposition that if he is going to call my home-town newspaper, he had better not call collect.

Can the Minister of Consumer and Commercial Relations confirm to me today a fact I learned in a conversation with the superintendent of finance, Mr. Chamberlain, this morning, namely, that one of the options as well is that insurance is being offered through a local broker in town, not necessarily the broker they are dealing with now, but insurance is available?

Hon. Mr. Kwinter: This is exactly the point I was making. They have options, but they have not made a determination about which one they are going to accept.

Mr. Grossman: We are delighted that the honourable member got involved this morning on this issue.

Many of these same questions were dealt with in papers tabled at the meeting of the Association of Municipalities of Ontario in August. In view of the fact that his own statement talks about this being the worst reinsurance season ever experienced in London, how can the minister now take the position that he only found out about the reinsurance problem this week?

It was raised at AMO with the minister's colleague present.

Mr. Speaker: Order. The question has been asked.

Hon. Mr. Kwinter: The potential problem was raised at the AMO meeting and it was suggested that they be aware of the problem and that they look into potential new sources. As of today, there are relatively few school boards that do not have insurance.

Mr. Davis: There are some that do not have any.

Hon. Mr. Kwinter: No; there are relatively few that did not get the insurance they wanted. Some of them are not happy with the insurance that was offered to them and have decided to look at this reciprocal pool, at self-insurance and at other methods.

In the meantime, every indication was given to them. They were made aware of the problems and they are addressing them. As we identify problems we are doing as we did with the Wellington County Board of Education, namely, advising them and telling them what are their alternatives, and they are resolving their problems.

Mr. Grossman: The minister is advising them to do something about it; he is doing nothing about it.

I want to ask the minister another question. Hospitals across this province are experiencing exorbitant increases, up to 1,500 per cent, in the cost of general and liability insurance this year. They have to finance these additional costs by allowing their deficits to grow significantly, by cutting services or by cutting plans for new and badly needed equipment. Those are the only options they face.

Is the minister aware that the greatest increase in liability premiums at any hospital in Ontario is at St. Joseph's Hospital in London in the home riding of the Premier (Mr. Peterson). The liability portion of its insurance premium has increased by 15 times from $72,000 to $1.2 million. What advice will the minister's hotline give St. Joseph's Hospital with regard to this increase in its liability?

Hon. Mr. Kwinter: The hospitals of the province are still able to purchase liability insurance, albeit at a much higher rate. The Ontario Hospital Association is reviewing the options available to reduce the cost. It is working with both the Ministry of Health and with the insurance industry to see whether it can come up with a resolution. The Ministry of Health is prepared to look at any of the problems and any of the financial hardships that are caused by these increased premiums and to provide assistance, if required.

Mr. Grossman: Let us be specific. In the case of St. Joseph's Hospital in London, its liability insurance has gone up from $72,000 to $1.2 million; in other words, that is an increase of more than $1 million. The hospital cannot wait three months and it cannot wait until it calls the Minister of Consumer and Commercial Relations to see whether it is going to get some relief or some advice. It has to take some steps now to increase its deficit, to cut programs, to reduce operations or to stop buying new equipment. There are no other options.

Mr. Speaker: Question.

Mr. Grossman: This is my question to the minister. Given that the government did nothing about this circumstance for six months, is the government prepared to indicate to the hospitals that it will make sure the increased cost of that liability insurance is borne by the government of Ontario?

2:30 p.m.

Hon. Mr. Kwinter: In my answer to the previous question of the Leader of the Opposition, I said that in true financial hardship the government would be prepared to look at the additional costs provided by the additional premiums for liability insurance.

Mr. Grossman: For three or four days now the minister has taken the position that municipalities, school boards and hospitals are all out there on their own to search around for the insurance coverage they can get. If they have a major incident, if the court rules against them and they have to pay out large awards, or if their premiums are too high, then they may come, one at a time, to the government of Ontario and say, "Monte, I have a big problem here."

Is the minister's position, therefore, in regard to the Hospital for Sick Children, whose liability insurance is up by 267 per cent, Peterborough Civic Hospital up by 291 per cent, Toronto East General and Orthopaedic Hospital up by 700 per cent and Laurentian Hospital in Sudbury up by 214 per cent, that some of them will get relief from the government of Ontario and some will not?

Hon. Mr. Kwinter: I am saying that if a hospital is experiencing a true financial hardship as a result of its insurance premiums, we will take a look at that and provide whatever assistance is required.

Mr. Rae: I want to ask the minister a question arising out of his statement today. It has to do with his rather bizarre description of the problem. Apparently, the problem is low interest rates, which are obviously devastating for the economy, and excessive price competition, which produced the rate-cutting wars of the early 1980s.

When we start having price competition in the insurance industry, we know just how serious this crisis is. It is devastating. If the economic system of which the minister has become such an apologist actually produces price competition which results in a reduction of rates, then we truly have a crisis in the insurance industry and it obviously requires a government task force such as the one that has been established.

The minister says the objectives of the task force must have the result of creating increased market stability, policyholder protection and a climate of economic opportunity for insurance companies in Ontario. Why is there no mention in his terms of reference for the task force of ensuring a fair deal and affordable insurance at rates that may go down, if that is what price competition produces? Why is there no mention of that in his report?

Hon. Mr. Kwinter: If I can give the honourable member a very brief lesson in economics -- I will try to use words of one syllable so he understands -- the insurance industry derives revenue from two sources, one of which is premiums and the other is investment income. When investment income is high, there is an incentive and a compulsion on behalf of the insurance companies to try to get as many premiums as they can get in to invest because they make more money on the investments than they do on the other end.

As a result of that, during the 1980s there was a reduction and premiums were being charged that were unreasonably low based on the risk, but they were able to do it because they were making a great deal of money on investing those premiums. Now that the investment rate has gone down, they do not make that money and they have to make the money on the premiums. What is happening is there is an increasingly large jump in the premium rate to get in that revenue. That is how it works and it is the reason for that particular statement.

As to the question of why there is no mention of affordable insurance, that is in the framework and in the terms of reference of the task force. We would certainly like to be able to provide as low a premium as possible, but it has to be a responsible premium; it has to be a premium that provides enough income so the claims can be paid. That is where we have the problem and that is where we have companies failing.

Mr. Rae: I am sure we all feel enormously enlightened. The minister would perhaps like to give me a lecture. Perhaps he can explain in his next lecture in economics 100 why the miracle of the marketplace works in such a way that drivers in British Columbia have been told to expect premium decreases averaging about 6.5 per cent in 1986, and why in Manitoba it is expected that rates will be reduced again by two per cent this year. Those are both provinces that have public auto insurance, which the minister has made a point of disparaging in his remarks today and on other occasions.

I wonder whether the minister's economics are sufficiently broad and explanatory, if he can come back from London and Zurich for a moment, to explain why Manitoba and BC can have a reduction but here in Ontario, drivers have been getting stiffed by 15 and 20 per cent a year in the last two years.

Hon. Mr. Kwinter: For the edification of the leader of the third party, I will be delighted to carry on his lesson in economics. Ontario's experience in underwriting is that the risk rate in Ontario is twice as high as that in any other jurisdiction in Canada. We have a higher standard of living; we have far more expensive cars; we have a far larger number of drivers. As a result, the claim experience in Ontario is considerably higher than that in any other jurisdiction in Canada. That has a direct effect on the insurance rates.

Mr. Grossman: It is quite clear that we should be wary of lessons from the Minister of Consumer and Commercial Relations. His lesson on the wine industry cost that industry about $30 million or $40 million this year, so we thank him for his lesson.

Mr. Speaker: I do not think that is a supplementary.

Mr. Grossman: The insurance companies have a habit of reviewing their rates, as they responsibly should, with the superintendent of insurance. I notice the superintendent of insurance is heading this review, this task force. Can the minister tell me whether the superintendent of insurance has indicated to him and/or to the industry that he believes the current rates are justifiable?

Hon. Mr. Kwinter: The Leader of the Opposition is wrong on two points: (1) The superintendent of insurance is not heading the inquiry; David Slater is. (2) The superintendent of insurance does not set rates for the insurance industry, other --

Mr. Grossman: I did not say he set them. He has seen the rates, though.

Mr. Speaker: Order.

Hon. Mr. Kwinter: He has jurisdiction only over the Facility Association. He may see them, but he does not have any jurisdiction over them. The only jurisdiction he has is over the Facility Association.

Mr. Rae: I do not think the minister answered the question. I may have missed it in the degree of learning the minister possesses, which no one else in the House apparently has. If he has some special fount of wisdom that can explain these things, it would be better for all of us mere mortals on this side of the House to hear exactly what they are. I am sure that in his own uniquely humble way he will be willing to share this information with us.

Can the minister explain why, for example, rates in Sudbury are significantly higher than those in Winnipeg or Regina? Can he further explain why there have actually been decreases in Manitoba and in other provinces in the past two years, some of them ordered by the Saskatchewan Public Utilities Review Commission, which supervises insurance in that province, for example? Can he explain why drivers in many communities in Ontario, in Sudbury, for example --

Mr. Speaker: Order.

Mr. Rae: I ask the minister to compare the population in that city --

Mr. Speaker: Order. The question has been asked.

2:40 p.m.

Hon. Mr. Kwinter: The setting of insurance rates is done by the industry on the basis of claim histories, the sort of history it has had in paying out on claims. It costs more to service drivers in northern Ontario as far as adjusters and everything else are concerned and, as a result, there is a higher cost.

In Ontario, because of its greater numbers and higher standard of living, if one has a claim against a loss of work, the insurance companies pay out higher rates. It just costs more to get insurance in Ontario. That is the reason. It is a fact of the marketplace.

Mr. Rae: The insurance association has nothing to worry about; it has a representative right here on the floor of the House.

Mr. Speaker: New question.

Mr. Rae: With respect to the task force, can the minister tell us what is the policy of the government? He has asked the task force to look at a whole range of issues. He has told it to look at a number of different things in a very disparate approach: increased market stability, policyholder protection and a climate of economic opportunity for insurance companies in Ontario.

Can the minister tell us why the government has not issued a direction to the task force to come forward with a plan that will ensure that drivers in Ontario will be able to drive at rates that are competitive with those in provinces that have public insurance? Why not give the direction for government insurance in a field that has worked so well and effectively in other provinces?

Hon. Mr. Kwinter: The task force has been given a very broad mandate to look at all aspects of the insurance industry. Included in that mandate will be an opportunity to look at no-fault insurance and government insurance. We are prepared to look at any possible solution to bring a rational solution to the problems of the consumers of Ontario. We are not excluding anything.

We welcome the honourable member's participation. If he has some ideas, we will be delighted to receive them.

Mr. Rae: I have heard that speech before. If government insurance is an option the minister is seriously looking at, can he explain how that is compatible with the climate of economic opportunity for insurance companies in Ontario that he has set out as one of his objectives?

Hon. Mr. Kwinter: It is financially impossible for the government to carry every single range of insurance in Ontario. There is just not enough money available. That means we have to set up a climate that will allow the reinsurers to bring some money to bear on the problem. That does not mean we have to do it across the board. We will look at areas on a selective basis, and if it makes sense in auto insurance to look at no-fault insurance or government insurance, we will do it. In the meantime, we have given this task force the broadest mandate possible and we have not ruled out anything.

Mr. Grossman: I want to give the minister one more opportunity to answer one question today. Does the superintendent of insurance think these rates are justified? Does the minister agree with him?

Hon. Mr. Kwinter: I do not know what the superintendent of insurance thinks of the rates.

Interjections.

Mr. Speaker: Order. Final supplementary, the member --

Mr. Grossman: Mr. Speaker, on a point of order: We asked the minister a very simple question. He began to respond and there was a not unusual degree of noise in this chamber. Mr. Speaker, I want to put this to you. When the minister is not able to answer a question, if members of this House, including his own members, can raise enough racket and you then say there will not be an answer but you turn to another question, then it is preventing the opposition from getting answers to properly asked questions.

Mr. Speaker: I suppose I could make many comments following these matters on a supposed point of order. We have already spent more than 30 minutes and we have not completed the first four questions. When a minister is supposedly trying to reply -- whether he responds is not my responsibility -- if the members are not willing to listen, and in particular if they rise and shout from their seats, I feel it is my responsibility to make sure that many more members have the --

Interjections.

Mr. Speaker: Order. In question period, I believe it is the responsibility of the Speaker to try to get as many questions placed and answers received as possible. We are still on the fourth question, and I am going to call on the member for Port Arthur (Mr. Foulds) for the final supplementary.

Mr. Grossman: Mr. Speaker, if I might, I want to make this point to you. The question --

An hon. member: Are you challenging the Speaker's ruling?

Interjections.

Mr. Speaker: Order. You do not have the right to challenge my ruling in question period.

Mr. Grossman: I want a one-word answer from the minister.

Mr. Speaker: Order.

Mr. Grossman: We are in an insurance crisis in this province and we want an answer.

Mr. Speaker: Order. Will the member take his seat?

Mr. Timbrell: Mr. Speaker, on a point of order --

Mr. Speaker: Order. What is the point of order and under which standing order?

Mr. Timbrell: Mr. Speaker, you may not have noticed, but the Leader of the Opposition did challenge your ruling, and I suggest the question be put.

Mr. Speaker: As I believe I said, during question period in matters pertaining to questions and answers, the ruling of the Speaker cannot be challenged.

Mr. McClellan: Mr. Speaker, may I rise on a point of order?

Mr. Speaker: On that point?

Mr. McClellan: On a related point. I think it will serve us all well if we all just stop, sit back, allow the minister to answer the supplementary question, get on with question period and set the matter aside.

Mr. Speaker: I appreciate the thoughts and the concern of the member. However, I have called for the final supplementary from the member for Port Arthur.

Mr. Foulds: Perhaps the Minister of Consumer and Commercial Relations will answer the previous question. Will he also tell us one step he has taken to protect the consumer, whether the consumer be an individual seeking auto insurance, a school board or a municipality? What steps will be taken to protect the consumer?

Hon. Mr. Kwinter: I assume that is two questions. The first question, from the Leader of the Opposition, was, "Does the superintendent of insurance look at the rates?"

Mr. Grossman: No. Does he think they are justified?

Hon. Mr. Kwinter: Does he think they are justified? Obviously, the rates that are set in the marketplace are the rates that are set; it is not a matter of whether one justifies them. It is not his role to decide whether they should be justified. He has only one responsibility and that is to approve the rates of the Facility Association.

I do not know whether he thinks they are justified. It is as simple as that. The marketplace dictates what the rates are. I think they are high, and I would like to see them much lower. Unfortunately, there is nothing we can do about it, other than to get into the insurance business, and we are not prepared to do that at this moment.

2:50 p.m.

To get back to the member for Port Arthur's question, we in this ministry and in this government have done many things to help the people in the insurance industry.

Mr. Foulds: In the industry, but not the consumers.

Hon. Mr. Kwinter: No. I am talking about people who have to relate to the industry -- anyone who has to get insurance. We have helped greenhouse operators and other institutions that have come to us with problems, and we are continuing to do it. Where the truckers could not get insurance, we helped them to get insurance. We got the Facility Association to increase its level to $5 million so the truckers could have interstate transportation. We have looked at various and sundry problems and have resolved them, and we are continuing to do so.

Mr. Brandt: l have a question for the Minister of Consumer and Commercial Relations. I was surprised to hear the minister indicate in response to my leader that the conference held in Ottawa by the Association of Municipalities of Ontario resulted in a discussion about the potential of a problem that was emerging in the liability insurance field.

Since more than six months have passed since that conference and there have been a number of newspaper articles as well as discussions directly with the minister's staff and others about the critical extent of this problem, can the minister indicate why it has taken him until now to give even the weak response he gave in his statement to the House today?

Hon. Mr. Kwinter: In the time we have been addressing the insurance problem, we have been meeting with the industry, the insurers, the reinsurers, all the people who have been affected, and we have been working with them to resolve their problems. There is no question that many of them have been resolved. There are some that have not been resolved and some that will continue not to be resolved. As they are addressed, we will help people with their problems.

In the meantime, there is no short fix, and if there is, it is going to have to be done on an individual basis as problems are identified. If someone comes to us and says, "We have absolutely no other alternative," we are going to have to help them, and we are prepared to do that.

On the other hand, we have to have some stability. With reference to my learned friend the leader of the third party, the reason we mentioned all these other jurisdictions was so we would not give the impression that this is peculiar to Ontario. It is not something that happened in the past two months. It is a worldwide problem, and we can only address it within that framework.

In the meantime, we are trying to ameliorate as best we can the difficulties some of these people are having. The purpose of the task force is to try to see whether some things can be done to create a healthier climate in the insurance industry in Ontario or whether there are things we can do in the way of reciprocal insurance plans, a pooling of resources and so on.

Mr. Speaker: Order.

Mr. Brandt: With the greatest of respect, I have to say that the response of the government is far too little and far too late. The reality is that the minister knew six months ago and was fully advised by his colleagues that this was going to be an impending crisis that cried out for action then, not now with the response we have had.

By way of a question, let me point out that the city of Scarborough has a premium increase of 137 per cent, the township of East Williams has an increase of 300 per cent and my own community of Sarnia has an increase of about 200 per cent. !s the minister suggesting that, by fixing this in the short term, these 200 and 300 per cent increases and, as my leader suggested, one of 1,500 per cent in the case of a particular hospital in London, are satisfactory?

Mr. Speaker: The question, please.

Mr. Brandt: Is that what the minister suggests as a solution to the problem we are facing today in Ontario?

Hon. Mr. Kwinter: I do not quite understand the question. Is the honourable member saying I am suggesting the increased premium is a solution to the problem?

Mr. Brandt: Let me place a supplementary to my supplementary. Is the minister suggesting the problem is being resolved as a result of 200 and 300 per cent increases and that is satisfactory as far as the ministry is concerned, or is the minister prepared in some way to subsidize or assist these communities?

Hon. Mr. Kwinter: That is what I thought the question was. We are saying the problem facing the insurance industry today is a twofold one of availability and affordability. A big problem we have is that some people claim they cannot get insurance at any price. We have found very little of that, if any, but there are people who say insurance may be available but it is not affordable, so it is not available.

The second problem is affordability. This government cannot suddenly decide to subsidize every institution in this province that thinks its insurance premiums are too high. There is not enough money in this government to do that. We have to look at the basic problem and how we can reduce its impact in some way. We will have to address severe hardship cases on an individual basis.

EQUAL PAY FOR WORK OF EQUAL VALUE

Ms. Gigantes: My question is to the Attorney General, the minister responsible for women's issues. November 19 was the date he released the green paper on pay equity, dealing with proposals for equal pay for work of equal value in the private sector. I wonder whether he will share with this House his plans and the government's preparedness for the public consultation he promised at that time.

Hon. Mr. Scott: I thank the honourable member for the question. We are working out the timetable for the consultation process. I hope to make an announcement next week.

Ms. Gigantes: Is the minister willing to give us a deadline for the returns from this consultation, and will he consider putting forward draft legislation now so the focus of the public consultation will be meaningful?

Hon. Mr. Scott: I am confident, as the comments from the public I have received indicate I should be, that the green paper will provide a meaningful document upon which the consultation will take place.

The consultation timetable, involving visits to various Ontario communities, has been worked out. It is not possible to determine when the consultation will end, because we do not know to what extent there will be a demand for it. As I indicated to the member for Don Mills (Mr. Timbrell) in response to a question some weeks ago, we intend to see to it that the process is full and complete. I hope the process will be completed by mid-spring.

INSURANCE RATES

Mr. Runciman: I have a question for the Minister of Consumer and Commercial Relations based on his earlier statement, which is not too exciting, to say the least. The most revealing thing we have heard this afternoon is the leader of the third party confessing he is a mere mortal. He has been unwilling to do that up to this point.

Mr. Speaker: Is that your question?

Mr. Runciman: My leader posed a question to the minister earlier which he declined to answer. In March 1985, the former government appointed a joint government-industry-consumer committee to look at a number of questions threatening the solvency of smaller insurers and leading to an affordability-viability crisis for compulsory auto insurance.

That committee was established in March by the previous government and has been in limbo since July 4; it has not held a meeting. If the minister is as interested in this issue and is as on top of it as he says he is today, will he tell us why that committee has been hanging there since July 4?

Hon. Mr. Kwinter: I do not know, but I will be very happy to find out and get back to the honourable member.

Mr. Runciman: That is a startling revelation. The committee was established in March and met on a number of occasions to deal with this very important issue. I do not know how I can ask a supplementary on this, other than by asking what the minister is doing over there.

3 p.m.

NORTHERN DEVELOPMENT

Mr. Pouliot: I have a question for the Premier. The Premier may be aware of the report on northern Ontario released by the standing committee on procedural affairs and agencies, boards and commissions. It is an amazing document. It tells us something that northerners have known for years: primarily that past governments have been more than somewhat insensitive to the needs of native Canadians and that the bureaucrats and, yes, I will say mandarins who are asked to design programs for the north are out of touch, do not understand the north and do not understand northerners.

What specific steps will the Premier (Mr. Peterson) give this House to assure us that this situation, which is nothing short of a travesty, will be remedied?

Hon. Mr. Peterson: I did not quite understand. Is the member talking about native Canadians or about everyone in northern Ontario?

Mr. Pouliot: I am talking about both.

Hon. Mr. Peterson: He is talking about everyone in northern Ontario, but specifically the problem of native Canadians.

Mr. Pouliot: Not only native Canadians. I am talking about the lack of co-ordination in designing policies, the lack of understanding of the north and the lack of representation by pretty well every ministry that northern Ontarians have to deal with.

Hon. Mr. Peterson: That is a very large question. I think I have some sense of the frustration of the people of northern Ontario that gives rise to this kind of question. I can assure my honourable colleague he is not alone.

The first thing we did when we assumed office was to put someone in charge of the northern affairs responsibility who cares passionately about the north, who is a child of the north and who understands very much the problems of northern Ontario.

There is a variety of areas that need help. The member will be aware, I am sure, of the sensitivity of this government to northern Ontario. I know he has been personally involved and consulted a lot. We value his help and that of every member here. There is no question that there have been long-standing problems in the past and, if one looks ahead, a number of very serious problems we will have to face as well.

We have made some moves to try to equalize social opportunities and social service benefits there. The member will recall that, with the help of some of the thoughtful people in this House, we have moved ahead on Ontario health insurance plan benefits for people in northern Ontario to assist in travel and a variety of other things.

I am not sure I am being helpful. Perhaps the member has a specific question he would like to ask me, but I can assure him this government is committed and is sensitive to the needs of the people of northern Ontario.

Mr. Pouliot: I am glad the Premier is willing to do at least something for the north, but what we need is more than a conversion on the road to Minaki. The south has benefited from the resources of the north for a number of years. The fact remains that the Premier refuses to give a commitment that top civil servants and bureaucrats will visit the north more often and that more offices will be opened across northern Ontario to provide essential services that people have been wanting for years.

Hon. Mr. Peterson: I know the member raises the conversion on the road to Minaki in jest, but there is a serious note to this. I share his views, I am sure, about Minaki Lodge. Look at the tragedy that $50 million was spent on that, and now the members of this House all agree it should never have been done. There is the chief architect right there. The member knows and I know what $50 million could have done for people in northern Ontario. To squander those precious resources in the name of an individual's ego, I agree with the member, is a tragedy. I am going to turn the floor over to --

Mr. Speaker: Order.

Mr. Bernier: On a point of order, Mr. Speaker --

Mr. Speaker: Under what standing order?

Mr. Bernier: My privilege has been jeopardized. The Premier had no right to refer to the Minaki issue in answer to this question, and he is totally wrong --

Mr. Speaker: Order. I distinctly heard the member for Kenora (Mr. Bernier) state that the Premier misled this House. Will he withdraw?

Mr. Bernier: With all due respect, let me explain. The Premier referred to it as a $50-million expenditure; it was a $23-million expenditure.

Mr. Speaker: Order. Will you withdraw? The member withdraws.

INSURANCE RATES

Mr. Barlow: I have a question for the Minister of Consumer and Commercial Relations with regard to insurance. He might be surprised, it is really not a new subject for today.

I would like to switch gears a little bit. We have been talking a lot about the public sector, hospitals and so forth. There are several major tourist attractions in and around the riding of Cambridge whose operators are more than a little concerned about the future of their businesses in view of the exorbitant costs of liability insurance and the increases this year. Just as a couple of examples, the African Lion Safari is facing an increase of about 525 per cent and Pioneer Sports World --

Mr. Speaker: Therefore, my question is.

Mr. Barlow: I am still in the preamble. I am framing the question.

Pioneer Sports World's water slide is facing an increase of about 415 per cent for half the coverage it had last year. The list goes on.

Can the minister please assure these people in the attractions industry that they will not be forced out of business because of these skyrocketing prices?

Hon. Mr. Kwinter: I cannot assure the member of that because I do not know what the other implications of their financial operations are. I can say that the purpose of this information hotline or source is to counsel people who are having problems to see if we can work out those problems for them.

Mr. Barlow: The minister is probably aware that, at this very hour, Attractions Ontario is holding a meeting out at the Skyline Hotel. The main topic on its agenda today is insurance. Is the minister prepared to respond to its concerns when it comes to him after its meeting today?

Hon. Mr. Kwinter: I will be pleased to respond to anybody's concerns in any industry and any public sector facility. If they have a problem, that is what we want to hear about and we will try to help them out.

WATER QUALITY

Mrs. Grier: I have a question for the Minister of the Environment. Last November, I introduced Bill 62, the Ontario Safe Drinking Water Act. At that time, the minister said his staff was working on a drinking-water strategy.

It has been generally acknowledged that activated carbon treatment is effective in removing chemicals from drinking water. We find that last September, the mayor of Toronto asked the minister to conduct a pilot project to evaluate the effectiveness of advanced treatment technology in Metro. Can the minister please tell the House why he has not yet responded to that request?

Hon. Mr. Bradley: The honourable member will be aware that such a pilot project is currently under way in Niagara Falls. It is evaluating the effectiveness of activated carbon as a potential for removing certain substances from the water. That is an ongoing project at this time.

Ordinarily when one undertakes these projects, one undertakes them at a facility which, first, is not a massive facility. I would call it mid-sized rather than a smaller facility. The member will also be aware that there were some problems identified at Niagara Falls and it seemed appropriate for the former minister to select that facility, partly on that basis.

We have to look at the results of that. If the results prove there is a need for the use of this method of water filtration in other municipalities in Ontario, if there is a proved need out there that must be met and this research points to the fact it can be effective, then we will be prepared to entertain it at that time.

I could elaborate, but I think the Speaker wants me to sit down.

3:10 p.m.

Mrs. Grier: I am not aware that the project in Niagara is ongoing. My information is that it has not yet begun. In his letter, Mayor Eggleton pointed out that the Niagara project was quite different from the conditions that exist in Metropolitan Toronto, and that it was important to have a pilot project in Metropolitan Toronto.

Do I take it from the minister's reply he does not agree that the evaluation of advanced treatment technology in Metropolitan Toronto is necessary?

Hon. Mr. Bradley: I do not think the member can assume that I do not consider it necessary. As I indicated, I am very interested in seeing the results of the effort that is being made at Niagara Falls, which she tells me has not advanced as far as we would have liked it to at this point. That could well be applied to Metropolitan Toronto.

I know the member would also want to see the funds devoted to environmental concerns used in the most effective manner. If we discover there are substances that can be removed through this method, and that these substances are present in great quantities in waters that affect Metropolitan Toronto and the city of Toronto, it might well be that we would be prepared to implement that methodology at that time. At this time, I cannot give a guarantee that would be the case. Of course, I am always considering these matters on an ongoing basis.

Ms. Fish: My difficulty is that the minister seems to suggest there is an unproved component of the technology and that we do not yet know whether it is effective. Why then are we using that technology on an emergency basis across the province, where known carcinogens and known causes of birth defects are determined in raw water as it passes through the treatment plant before it comes into drinking water supplies?

Hon. Mr. Bradley: That question should be directed to the member for Sarnia (Mr. Brandt) rather than to me, but I will be happy to answer it.

As the member will know as a former Minister of the Environment, it is generally recognized that this method is reputed to be quite successful in removing certain substances. The testing that is taking place at Niagara Falls is to determine how many substances and whether it has any effect on the synergistic or cocktail effect of several substances together found in a water stream that goes into a filtration plant.

The testing is to see how effective it is. We know it is partially effective and is utilized in certain parts of the world. However, we want to know how effective it is and whether there may be even more effective ways of dealing with these waters. We have used it in emergency situations because of its known effectiveness to a certain extent. Can it be even more effective? That is what our pilot project will tell us.

INSURANCE RATES

Mr. Gregory: I have a question for the Minister of Consumer and Commercial Relations. It has to do with the insurance crisis affecting the transportation industry in Ontario.

Can the minister indicate what negotiations he has had in recent weeks with the Ontario Trucking Association and the 100 to 150 member companies facing bankruptcy? What alternatives can the minister recommend to these trucking companies that are unable to secure liability coverage and others that are facing increases of six to seven times the original premium cost for less coverage?

Hon. Mr. Kwinter: The trucking industry is a very specialized example in that there are really only three companies covering it and the biggest of them has gone bankrupt. The members will probably know that there have been negotiations for some time and the trucking industry is trying to buy United Canada Insurance Co. My information is that they will know in the next couple of days whether they have bought it and whether, if they do get it, that will solve their problem.

Mr. Gregory: That being the case, can the minister recommend alternatives to the carriers that are required to have unlimited liability as a result of the spills bill, which is his bill, when such coverage is not available in the market? Will the minister give us the telephone number of his so-called hotline so they can at least call him if they cannot get the coverage?

Hon. Mr. Kwinter: The spills bill legislation is covered by a separate pool of insurance and that has been subscribed to and has been looked after. As far as other insurance is concerned, the Facility Association is available. It will insure any truck driver, albeit at a higher premium than he could get normally in the marketplace, and it will also insure him for rates that will allow him to travel in the United States.

FUTURES PROGRAM

Mr. Warner: I have a question for the Minister of Skills Development regarding the Futures program or, perhaps more aptly, the back-to-the-future program, since we understand from the folks who are working with the program that nothing has changed in 10 years.

Will the minister acknowledge that there are certain difficulties with the program: in particular, restrictions that have been placed on community-based youth employment counselling centres; rigid rules on the length of placement, the wages and the age group; the shift that has taken place away from the community-based youth employment centre to the community college, and the particularly unfair restrictions placed on those who are working with the street kids?

Hon. Mr. Sorbara: There is not much time available to answer such a broad and sweeping question. Are there defects in the program? To tell the honourable member the truth, this program has design features that are remarkable and innovative beyond those of any other program ever mounted by this government or by any other government in Canada.

Let us take the example of youth employment counselling centres, which previously were restricted to a certain volume of their so-called business, one of the predecessors to Futures. That is no longer the case. It used to be 20 per cent. It is now broader than that, and a figure is worked out with each youth employment counselling centre on the basis of its needs.

Let us use the example of the level of assistance. The level of assistance under a number of the previous programs was $100 a week. Under this program it is the minimum wage. As the minimum wage rises, the wage of the participant in Futures rises. We could go through every element, but I do not think it is appropriate to do that during question period.

PETITIONS

ROMAN CATHOLIC SECONDARY SCHOOLS

Mr. Wildman: I have a petition signed by approximately 100 residents of the ridings of Algoma and Algoma-Manitoulin. It is addressed to the Honourable the Lieutenant Governor and the Legislative Assembly of Ontario, and in particular to the Premier of Ontario, the Honourable David Peterson, and it requests that this government preserve public education.

Mr. Pierce: It is my pleasure to present approximately 50 petition cards on behalf of some very concerned citizens of the district of Rainy River in respect to education.

Mr. Pouliot: I have a petition signed by 62 residents of the riding of Lake Nipigon. They are urging that the government of Ontario take steps to preserve public education.

Mr. Philip: I have a petition from several hundred people in the riding of Etobicoke and the city of Etobicoke:

"Whereas Bill 30 extending public funding to Catholic high schools up to and including grade 13 has now passed second reading in the Legislature, we petition that this legislation to fund the complete separate school system be implemented without delay and that it be applied as of September 1, 1985."

VISITOR

Hon. Mr. Nixon: On a point of order, Mr. Speaker: I want to bring to your attention that an outstanding citizen of Ontario, Jack Masters, the mayor of Thunder Bay, is under your gallery and we would like to welcome him.

3:20 p.m.

REPORTS

STANDING COMMITTEE ON REGULATIONS AND PRIVATE BILLS

Mr. Callahan from the standing committee on regulations and private bills presented the following report and moved its adoption:

Your committee begs to report the following bill without amendment:

Bill Pr17, An Act respecting Children's Oncology Care of Ontario Inc.

The committee would recommend that the fees less the actual cost of printing be remitted for Bill Pr17.

Motion agreed to.

STANDING COMMITTEE ON PROCEDURAL AFFAIRS AND AGENCIES, BOARDS AND COMMISSIONS

Mr. Breaugh from the standing committee on procedural affairs and agencies, boards and commissions presented the following report on the matter of privilege relating to the action taken by the Canadian Imperial Bank of Commerce against the member for Riverdale (Mr. Reville) and moved its adoption.

Mr. Breaugh: This matter has been before the committee for some time. We had a difficult time coming to a conclusion, but we did manage to do so.

We have tabled the report today which, in effect, says that in the --

Mr. Speaker: Order. I am sorry to interrupt the member but there are quite a few private conversations going on that are not really very private. Could the members keep the noise level down, please?

Mr. Breaugh: The committee's report, which was finalized this morning, holds that basically three matters should be considered by the House.

1. A breach of privilege in the traditional sense did not occur.

2. The actions of the bank were ill-advised, unbusinesslike and unacceptable under the circumstances.

3. The whole matter of parliamentary privilege needs to be reviewed by a committee of the Legislature. The committee seeks the permission of the House to do that.

This was a difficult issue for the members of the committee to deal with. It was one of the few occasions when we have provided a dissenting opinion. The vote in the committee was six members holding that there was no breach of privilege and four members holding that there was a breach of privilege.

It is difficult to make a decision because when one looks at precedents, one is looking at parliaments, for the most part, of an entirely different time and era.

We are most anxious to proceed with the debate in the Legislature where we may have, as part of the matter, an opportunity for members to raise what they think should be the rules of privilege, how they might be applied, how they do apply, how they have traditionally applied and how they might be changed.

We feel there is a great deal of rather important work that ought to be done on this, and the committee is anxious to undertake that. I look forward to participating a little further when we have an opportunity to debate this.

On motion by Mr. Breaugh, the debate was adjourned.

MOTIONS

COMMITTEE SUBSTITUTIONS

Hon. Mr. Nixon moved that the following substitutions be made on the standing and select committees: on the select committee on the environment, Mr. Reycraft for Mr. Haggerty; on the select committee on health, Mr. D. W .Smith for Mr. Reycraft; on the standing committee on general government, Ms. E. J. Smith for Mr. Poirier; on the standing committee on public accounts, Mr. Ferraro for Mr. Polsinelli; on the standing committee on resources development, Mr. Mancini for Mr. Ferraro; on the standing committee on social development, Mr. Henderson for Mr. Epp, and for consideration of Bill 30, Mr. Epp for Mr. Henderson.

Motion agreed to.

COMMITTEE SITTING

Hon. Mr. Nixon moved that the standing committee on social development be authorized to meet on the morning of Wednesday, January 15.

Motion agreed to.

REFERRAL OF BILL 1

Hon. Mr. Nixon moved that the order for third reading of Bill 1, An Act to revise the Family Law Reform Act be discharged and the bill be referred to the committee of the whole House.

Hon. Mr. Nixon: Before the motion is carried, I would like to say that by special arrangement we expect to have the bill before the House this evening. The critics in the opposition parties have agreed to this. The Attorney General (Mr. Scott) is very glad to participate in this debate.

Motion agreed to.

INTRODUCTION OF BILL

FOREIGN ARBITRAL AWARDS ACT

Hon. Mr. Scott moved, seconded by Hon. Mr. Nixon, first reading of Bill 98, An Act to implement the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

Motion agreed to.

Hon. Mr. Scott: Today I am happy to introduce this bill, which will have important implications for both large and small businesses in Ontario, especially businesses that do work as importers or exporters. The act I have introduced will make effective arbitration clauses in international business contracts.

The act is intended to implement in Ontario the United Nations convention on the recognition and enforcement of awards, once Canada accedes to the convention. Implementing the convention will provide on a reciprocal basis a simple and fast way of enforcing foreign arbitral awards in Ontario, and provincial businesses will have reciprocal rights in other states that are parties to the convention. The federal government accedes to the convention formally when the provinces have agreed, as they all have in principle, that acts will be passed in each provincial Legislature.

The importance of the bill is that the business community tells us it has lost international contracts because those contracts cannot be enforced in Canada and in Ontario under the convention. We are delighted, in the interests of the Ontario business community, to take this step to see that does not happen any more in a broad sphere.

ORDERS OF THE DAY

MOTION TO SET ASIDE ORDINARY BUSINESS

Mr. Timbrell moved, seconded by Mr. Runciman, that pursuant to standing order 34(a), the ordinary business of the House be set aside to debate a matter of urgent public importance, that being the acute situation facing school boards, municipalities, hospitals, other public bodies, consumers and the insurance industry with regard to the provision of comprehensive, affordable insurance coverage.

Mr. Speaker: The notice of motion was received in time, at 11:50 a.m., and complies with standing order 34 regarding the notice requirement. I will listen to the honourable member for up to five minutes, as well as to representatives from the other parties.

Hon. Mr. Nixon: Unless there is an objection, could we dispense with the five minutes?

Mr. Timbrell: If the government House leader is prepared to indicate agreement to proceed with the debate, I will certainly stand down my five minutes of remarks so the debate may commence and afford to my colleagues and other members of the House that much more time to debate this very urgent problem.

Hon. Mr. Nixon: I interjected that perhaps we could do this, if there was agreement on all sides, because I often find that the five minutes spent arguing whether we should do it contains all the arguments that are going to be put forward later in the debate. I think it is better to start the debate, if there is general agreement, and there is on this side.

Mr. Foulds: Agreed.

Mr. Speaker: In that case, I shall put the question, shall the debate proceed?

Motion agreed to.

3:30 p.m.

INSURANCE RATES

Mr. Speaker: Each honourable member has up to 10 minutes.

Mr. Brandt: This matter we have agreed to debate this afternoon is a matter of urgent public interest and one on which I look forward to hearing some of the views of all members of the House. It is quite clearly going to impact very directly and negatively on the budgets and financial arrangements of our various institutions across this province. For that reason, I think it is a matter we should be discussing in this House.

I listened very carefully to the statement in the House today by the Minister of Consumer and Commercial Relations (Mr. Kwinter), and I say with some regret that I do not see him in the House now, either to participate in the debate or listen to the comments we are making in connection with the crisis we are now experiencing in the insurance industry.

However, I would like to say, from the comments I heard on the part of the minister, it appears he has an understanding of what has brought about this crisis, namely, a very severe problem relating to the reinsurance market and the availability of funds in that market and also some of the recent court settlements that have resulted in very substantial payouts on the part of municipalities and others.

The one cited most frequently is the case heard in Brampton, where the settlement, because of an unfortunate incident that affected a young gentleman in that community, resulted in a payout of about $6.3 million. That payout, along with some other situations that have developed, mainly as a result of a public more aggressive relative to getting settlements for what are perceived to be problems created by municipalities, hospitals or others, a public more aggressive in pursuing its rights, has resulted in a very substantial impact on the insurance industry as a result of the settlements the courts have been making.

Those settlements have found their way through the whole issue of premiums to the extent that now not only public institutions, such as hospitals, municipalities and educational institutions -- school boards and so forth -- but also the private sector are being affected very negatively as a result of the trend we see developing very quickly in the whole insurance field, with increases of 100 to 1,000 per cent being the order of the day rather than an unusual circumstance.

I suggest one of the reasons we felt it necessary to have this emergency debate today was that the response of the government has been far too little and too late for the very critical situation in which we find ourselves at present. The government has known about this problem at least since the time of the Association of Municipalities of Ontario conference in August 1985. Fully six months or more have passed since the issue was very clearly identified and very articulately debated at the AMO conference. Every indication was given at that time that a number of things were going to happen. One was that premiums would rise to an unconscionable level. Then there were indications that premiums would be increasing to the extent of 200 or 300 per cent.

In addition to that, many municipalities put forward the view at that time that there was a very strong likelihood they would not be able to get any kind of insurance coverage whatsoever unless they paid an absolutely exorbitant increase well beyond the capacity of either the municipalities or their taxpayers to pay. Therefore, I put on the record for the attention of the government the fact that this particular issue has been around for a long time and some response was demanded on the part of the municipalities and other public institutions that was not forthcoming.

The minister indicated in his statement today, almost in a mea culpa kind of attitude, that the problem was worldwide and had developed in the reinsurance markets in London, Europe and the United States. I do not disagree with that. There is a very serious problem with respect to the availability of capital to cover the reinsurance needs, not only of Ontario and Canada but also the rest of the world. However, that is not the only problem.

There are responses the government could make other than to say it is going to establish a hotline, for which no answers are available at the other end, or that it is going to hold a further series of meetings. If meetings should have been held at all, they should have been held in the summer of 1985 when the problem was first identified.

I should not even give the government the opportunity to indicate that it was first identified at that time. There were indicators perhaps even a year prior to then that a problem was starting to emerge in that industry and sector that would impact very critically on this province, so that action should have been taken far earlier.

When I suggest meetings could have been held back in August or September, it is with the hope that those meetings would have resulted in some solutions for the municipalities. One of these solutions, and not an easy one because I am not aware of any quick fix in this circumstance, could well have been an agreement on the part of the government to provide at least some relief to our institutions.

In that broad category, I include boards of education, municipalities and all the institutions that come under the aegis of the province. The government could have indicated at least some willingness to participate in the huge increase in premiums that was going to affect these institutions.

There was no indication by the government other than what we heard today that, in some kind of ad hoc approach, it will help in some cases and perhaps not in others. However, there is no uniform program or indication by the government that it is prepared to table in this House a program that will respond to the very real needs of municipalities, hospitals, school boards and others.

There is a real need for the government to respond immediately with regard to some fixing-up of the problem by way of suggesting that it is willing to participate financially in the crisis of increased payments. It can come up with a reasonable and realistic formula, as it has done with many other programs, that municipalities and others could participate in that would help to cushion the immediate blow.

In the longer term, perhaps the government could explore, through a committee mechanism or whatever, the possibilities of some capping of the awards that have been brought down by the courts. Some of the awards are totally unrealistic.

Mr. Haggerty: Is the member suggesting government-run insurance? That is what he wants, but he will not come out and say it.

Mr. Brandt: No one on this side of the House has called for government-run insurance. What we have talked about is the government carrying out its responsibilities to regulate the insurance market and to make certain that the consumers, taxpayers and institutions of this province are dealt with fairly.

That is what we are asking the government to do. We are asking that it be a watchdog and participate where necessary to make sure the game is played fairly. There is no reason these increases are necessary in Ontario. There are other ways to control the issue and the problem to the extent that insurance is more affordable for our municipalities and others.

I would like to see a more immediate response on the part of the government. I would like it to recognize the critical nature of the problem and to recognize that increases that in some instances are as much as 1,000 per cent are simply unrealistic and unreasonable in terms of affordability on the part of our institutions.

3:40 p.m.

Some action is being cried out for. There is an immediacy to the problem that means it has to be looked at by the minister today. That is why almost the entire question period this afternoon was dedicated to the issue of the insurance industry and the problems that our institutions in particular, but also the private sector, are having at present with respect to insurance.

I see that my time has expired, and I want to sum up by asking the minister again to give his immediate attention to this problem, because it requires that kind of government attention now.

Mr. Timbrell: On a point of order, Mr. Speaker: May I draw to your attention that there is not a quorum in the House at this time.

The Deputy Speaker: Apparently there is a quorum. There are 20 members present.

Mr. Rae: I will try to put a slightly different focus on my remarks than were put on the ones that have been given about the crisis from which we are suffering. I do not think it is a crisis simply of insurance companies or only of institutions. In a curious way I am glad this has happened the way it has, because it allows us to focus our attention much more intensely on what the real problem is.

I am glad the minister is here, because I hope he will pass on what I have to say. I certainly intend to talk directly to Mr. Slater about it, because he was the chairman of the Economic Council of Canada when I was Finance critic. If I may say so, he was far more interested in my economic views than the minister was, and we had many good exchanges on the question of what was going on in the economy. I certainly will discuss these issues with Mr. Slater on behalf of our party.

There are, in a sense, two problems. The task force has been given the task of looking at one of them, but it has not been given the task of looking at the other. I want to relate directly what the other problem is.

The member for Sarnia (Mr. Brandt) has spoken very clearly on the crisis facing the institutions, of which we are all aware. Many individuals have been made aware of it through headlines in the press and through a number of other means. Many people are also aware, because they pay car insurance premiums, that we as consumers in this province are suffering from a very dramatic increase in rates, which is not a worldwide increase; it is not shared in Manitoba, in Saskatchewan or in British Columbia. Therefore, with respect to the car industry, the minister's comments about the worldwide nature of this crisis are completely off base.

Rather, I want to focus on another point, and that is that the world of private insurance today as it affects the individual is a crap shoot; it is a process of roulette. It is not a process in which the individual can say, "I know I am covered and, whatever happens, I know I will be adequately compensated if, God forbid, I should have some kind of accident."

The ordinary working person today is covered by workers' compensation if he or she has an accident on the job. That was established in 1915. We abolished the domination of the world of tort, of private lawyers and of private lawsuits for a very simple reason. Far too many people were getting injured on the job who could not claim compensation under the private rules of tort; so we abolished the private rules of tort as it affects workers' compensation.

However, lawyers, the insurance industry, the world of tort and the world of private wrongs and private rights have remained the rule that has held sway in all the rest of the field of accident compensation. If one is injured while driving a car or while working in one's house, or if one suffers from some other disability or disease, one is not covered by workers' compensation or by a general insurance plan. One is left to one's own resources in the private world of the wonders of tort law, of responsibility, of negligence, of having to prove in a court of law that someone else has been negligent, and if that person has been, he or she has to take responsibility for paying for the disability.

There is a crisis today which the minister has referred to as worldwide. I take issue with him to some degree on that score. There is another problem which I am sorry he did not ask the task force to look at. That problem is that literally every ordinary person in this province is underinsured, underprotected and undercompensated in 99 cases out of 100, when it comes to an injury or accident that affects his or her ability to earn an income.

These issues are not original to me today in the sense that this is not the first time we have spoken about them in this House. My colleague the member for Nickel Belt (Mr. Laughren) has been instrumental in talking about universal sickness and accident insurance and he continues to do so.

Professor Weiler, in his report Protecting the Worker from Disability: Challenges for the Eighties, has some very tough paragraphs and compelling arguments with respect to universal insurance. Professor Belobaba, in Products Liability and Personal Injury Compensation in Canada: Towards Integration and Rationalization, a report produced in 1983 for the Department of Consumer and Corporate Affairs, has again made an overwhelming case for universal sickness and accident insurance.

The evidence is that only about 45 per cent of people who are injured in a motor vehicle accident collect any money at all through a tort claim, which means more than half the people who are injured in a car accident do not, either because they cannot establish that somebody else was at fault, do not have the patience to go through the two or three years it takes to sue, do not have the money, or the vagaries of the system simply do not produce somebody who is in a position to pay.

As for the degree of the problem we are facing today, the reason I have described the system as a crap shoot is that there is something very wrong with a system of liability insurance that can provide a benefit or payment of literally millions of dollars in isolated instances and in tens of thousands of other cases provide absolutely no insurance whatsoever.

There is a rational answer to this. I do not honestly believe this is how it would be described by our opponents, who say this is simply yet another example of socialist ideology in action. It is much more a question of common sense. What do we want insurance for? We do not want insurance to provide a windfall to anybody; we want it to ensure in the case of individual accidents, whether they take place in a hospital or someplace else, that anybody affected is somehow made whole as far as possible and given the economic compensation that will provide for loss of income and for pain and suffering.

3:50 p.m.

That is not the case now. I do not think the private insurance industry today is capable of providing that kind of system. The evidence is overwhelming that in Ontario we have not been well served by the industry. What we are experiencing today is very eloquent evidence of that.

I believe very strongly it is difficult for the minister to maintain that what has happened is a result of the gnomes in the reinsurance industry somehow -- out of the blue; without any warning, as it were -- coming down and making life miserable for distinguished Canadian institutions that are publicly oriented. What we are seeing is the irrationality of the present system, a system that does not work and needs to be changed. I sincerely hope the commission the minister has established will be able to make the changes.

Hon. Mr. Conway: I am pleased to have the opportunity to speak briefly this afternoon to the motion standing in the name of the member for Don Mills (Mr. Timbrell). I have read it very carefully and note that the honourable member's motion draws our attention to a situation he describes as urgent and acute.

Mr. Timbrell: The member for Renfrew North (Mr. Conway) has finally frozen the clock.

Hon. Mr. Conway: That would concern me to a very great degree, but I see it has come unstuck at the suggestion of the member for Don Mills.

Mr. Timbrell: Just like the member.

Hon. Mr. Conway: I hope I have not come unstuck.

Mr. Timbrell: I have been wondering.

The Deputy Speaker: Order.

Hon. Mr. Conway: I hope I get some credit from my friend the member for Don Mills for trying to behave in a different style from what he might have been traditionally accustomed to in this place.

I note the motion standing in the name of the member for Don Mills does not go on to address possible remedies. I know this is a thoughtful and constructive opposition that has had a long experience in government. I am sure before this afternoon's debate has concluded that the members of the official opposition will expand upon the sparse language of the motion and indicate whether they favour any particular remedy.

My colleague the Minister of the Environment (Mr. Bradley) was at some pains this afternoon to point out, through a very extensive question period on the subject, that it was hard to know whether the official opposition was tending in the direction of public insurance, not only in the liability field but elsewhere as well. Before the afternoon is out, we might have the benefit of the views of the official opposition.

I think it is fair to say, as I look across at my friend the member for Port Arthur (Mr. Foulds), that we know precisely where the third party stands on this matter.

Mr. Rae: And on everything else.

Hon. Mr. Conway: I will not hold the leader of the third party to his aside.

It is true, as has been commented on by a number of members, that a difficulty has developed in recent weeks in this connection. I want to say on my own behalf and on behalf of the government that we feel very strongly that the Minister of Consumer and Commercial Relations has taken appropriate and positive steps to deal with the situation. He is to be congratulated on his efforts in this connection.

I know my friend the member for Port Arthur, being the thoughtful and deliberate fellow he is, will agree with me when I say there are no easy solutions to some of these rather complex situations. I know the member for Port Arthur wants to agree with that. I see him not nodding, but smiling at what --

Mr. Foulds: Laughing in derision. This is not a speech the member for Renfrew North should be making.

The Deputy Speaker: Order.

Hon. Mr. Conway: The Minister of Consumer and Commercial Relations has taken steps to deal with the situation. As he indicated this afternoon, he has outlined a strategy that deals with both the short-term resolution and the long-term resolution.

Much has been said in this House about the difficulty school boards find themselves in, and in the motion itself there is a reference to that. I thought it would be useful for me this afternoon to indicate to the House what the present situation is with respect to the school boards in Ontario.

As of this moment, all the school boards but one in the province have liability coverage. The one school board that does not have liability coverage is a northern board. Interestingly enough, the Moose Factory board was under the impression until late in 1985 that it would have a renewal without any great difficulty, and we expect the situation at Moose Factory to be resolved shortly.

As of this moment, to the best of our information, and I consider our information to be quite reliable, all but that one school board have coverage. It is true that in many cases the circumstances of the coverage and its renewal are rather different from previous situations. In some cases, the premiums are higher; there is no doubting that. As was indicated earlier today by a number of honourable members, it is also true that there are or may be situations in which the new coverage carries with it exclusions that have not been there in the past.

We in the Ministry of Education do not deny this. We do not deny that the circumstances of liability insurance have changed in recent times, and we are trying to the best of our ability to address the new and expected reality. In the past number of weeks, the Ministry of Education has been working closely with school business officials across Ontario. I know my friends in the opposition will be happy to know that over the Christmas break a meeting was convened to see what the situation was and what the options might be.

Mr. Gordon: Marvellous.

Hon. Mr. Conway: The member for Sudbury (Mr. Gordon) says he is not interested -- he probably is -- but there is growing interest among school boards and their business officials in exploring the possibility of a reciprocal or co-operative arrangement. More than 30 boards have expressed real interest in that prospect.

The ministry has indicated its willingness and desire to co-operate with school boards right across Ontario to facilitate that kind of arrangement, should it be desired by the school community. We see that as a real option, one in which a number of boards have expressed a great deal of interest.

We must recognize, as I am sure all honourable members do, that working out such an alternative as a reciprocal or co-operative arrangement is going to take some time. It is a new departure for that community and it is going to take some effort, commitment and planning, should it be decided upon as a course of action.

I want all members of the assembly to know that this ministry and this government have not been idle or unwilling to work with the community. In my case, as Minister of Education, I have been working quite closely with school boards from Alexandria to Atikokan to see what their situation is and what their view is about what changes or alternatives, if any, might be made or offered. That is the way this government chooses to operate, and I feel very comfortable with that consultative mode.

Mr. Foulds: The minister is not exuding comfort.

Hon. Mr. Conway: I hope I am, but I want to indicate to the House that these are complex and at times difficult matters. I do not want to be trite or casual --

Mr. Foulds: It never stopped the minister before.

Hon. Mr. Conway: The member for Port Arthur takes me on to thin ice. I will leave my history to the historians.

Mr. Reville: Take out some insurance.

4 p.m.

Hon. Mr. Conway: I can tell the member for Riverdale (Mr. Reville) that the story of my auto insurance is not a happy one, and I would not want to share it with any of the members. However, I would be prepared under pressure to tell them that my rates are not among the lower rates in this assembly or in this province.

Mr. Grande: When the minister hits 35, they will drop.

Hon. Mr. Conway: I did not know the Highway Traffic Act allows us to have 35 demerit points.

I conclude by indicating that in this government and in the Ministry of Education we take our responsibilities very seriously. We are working carefully and continuously with the Ontario Association of School Business Officials, which has been very helpful in sharing information with us and will continue to do so. Another meeting with the OASBO is planned very shortly. We have been looking very carefully, with that group, at the co-operative alternative and we will continue to do so.

In conclusion, the Minister of Consumer and Commercial Relations is to be commended for the very careful and deliberative way he has gone forward in a very difficult time with a very complex subject.

Mr. Runciman: I have a few brief comments. I will not speak as our party's critic for the ministry, but simply to try to touch on a number of concerns in my home town of Brockville where, as with all municipalities across the province, it is experiencing problems not necessarily in obtaining -- it is not a question of availability -- but in affordability with respect to acquiring adequate insurance.

In Brockville, the liability insurance rate has jumped a whopping 172 per cent. It has had indications that the rate will climb even higher when the policy is renewed later this year.

Mr. Foulds: Is that the municipality?

Mr. Runciman: That is the municipality, yes. The insurance broker who is handling it for the city, through Royal Insurance Canada, has indicated, venturing a guess, there will be at least a 50 per cent increase in June. It was mentioned that some municipalities are experiencing 200 per cent to 300 per cent increases.

In smaller communities that do not have the tax base to deal with those kinds of significant increases and with the problems of those additional costs to local taxpayers and the additional burden they are going to have to shoulder, the concern is whether they are going to have the capability to do so.

In the case of Brockville, it is also going to have an impact on a variety of functions. The municipality is going to have to take a look at the functions that are going on, and I expect this would apply to other municipalities as well. If a service club, for example, is having a function in the city and wants to have a beer garden, the municipality will have to look very closely at allowing that sort of fund-raising activity to continue because of the liability implication.

The two Brockville hospitals, the Brockville General Hospital and the St. Vincent de Paul Hospital, are experiencing considerable problems. At the General Hospital, the cost of liability insurance has skyrocketed 360 per cent for the yearly package of protection. That sum has gone from $15,000 to $55,000. That is only for malpractice liability. It does not include the cost of fire, theft and other insurance it must carry. At St. Vincent de Paul Hospital, the premium for malpractice liability has increased by 325 per cent to about $30,000 this past year. The future does not look very bright.

The administrator for the General Hospital indicates the major problem the hospitals face is that almost no company wants to insure them for malpractice because of hefty awards handed out in lawsuits. Again, he has indicated the hospital can shop around, but it cannot carry anything less than comprehensive coverage because a successful suit against an insufficiently insured hospital could be in the millions of dollars and be a deadly financial blow.

A number of things that were raised during question period today could be re-emphasized. My leader asked the minister whether he had queried the superintendent of insurance about his view of whether those rates were appropriate; too low, too high or just right. The minister indicated he had not approached the superintendent about that and had not requested his views on this subject.

It might be helpful to take a look at the situation in Quebec, for the superintendent in Quebec did make a public statement about the appropriateness of rates in that province. He found them to be quite appropriate and justified, I might indicate. That did help to a significant degree, I understand, to quell a lot of the concern out there about the increase in rates.

We know that the rate increases during the past number of years have not really been all that high. Perhaps it is the fault of the industry that it had not adequately foreseen some of the problems that were going to occur in the years approaching and did not adequately reflect what it should have been doing to prepare for them in the rates that have applied in the province in the past.

The Minister of Education (Mr. Conway) was indicating that the government had not been idle in this area. We on this side have some doubts about that statement.

I mentioned earlier today, and the minister may want to comment on it if he has an opportunity later on in the debate, the committee that had been established by the previous government. Although its mandate certainly was not as wide-ranging as that of the task force he announced today, it was dealing with aspects of the industry that are of concern, aspects that, as I mentioned, are threatening the solvency of smaller insurers and leading to an affordability and viability crisis for the compulsory auto insurance system.

We talked to the superintendent or to someone in his office this afternoon just before question period and he indicated that the committee had held its first meeting some time in March, and that on July 4 it had been adjourned and was effectively in a state of limbo.

This committee had a limited mandate, but there were areas of concern. When the Minister of Education indicates that the government has been vigilant, not idle, his lack of awareness in respect to this committee has to raise some concern. These problems were flagged many months ago. The information sheet I was given indicated that as of March, reinsurers had already acted to restrict their obligation to primary insurers: "We are now fully exposed to unexpected claims awards arising from judicial reinterpretation of policy wording."

The problem was identified many months ago and we had a committee dealing with certain aspects of it. It has been allowed to sit there idle since July 4, 1985. One really has to wonder how vigilant and how concerned the present government has been.

From our perspective, we believe that the government has really started to take a close look at the situation in the last little while only because of the snowballing impact that the problems in the industry are having on all aspects of business, public school systems, hospital systems and what have you in this province. It is quickly growing into crisis proportions, and now the minister comes to the House and says: "Yes, we are going to act on this. We are going to establish a task force. We are going to look at it." That was a response he made today to many questions: "We are going to look at it. Yes, we will look at it."

4:10 p.m.

For six or seven months this government -- obviously, it is a new government and it has to have an opportunity to become familiar with the responsibilities that fall upon its shoulders -- has had more than an adequate time and it simply has not acted in an adequate and responsible manner in respect to the concerns that are out there in the province today. They are acting late in respect to this announcement. The fact that committee has been allowed to sit idle for months indicates that quite clearly.

I had better avoid specifics with respect to personalities, but we have to think, from this party's perspective through this debate, this indicates quite clearly how strongly we feel about the problem that has been allowed to grow because of the inaction of the present government. We can assure the minister and other members of the government that we will continue to monitor the situation and their actions and keep on top of them on behalf of the consumers of this province.

Mr. Foulds: I rise to speak in this emergency debate and indicate we in this party feel very strongly that the insurance business, particularly with regard to automobile and liability insurance, is in a crisis in the province.

The minister in his statement, lengthy though it is, actually uses the word "crisis." He admits there is a crisis. That seems to me automatically to indicate that some direct and immediate action should be taken. What we have, in effect, is a statement that tries to give the minister three months of breathing time while he and his government figure out what they can do to protect the consumer.

That is going to be extremely difficult for the minister because he also wants to protect the marketplace and the insurance industry. He is going to have to take the bullet between his teeth and bite it. He is not going to be able to protect all of those people in the same old way.

There is a crisis and the present system has not been able to meet it. The crisis is on us now and what the minister has shown is that he is a captive of the insurance industry and the shambles that is his ministry, and that his ministry is unable and unwilling to protect the consumer.

That has been true of that ministry since its creation at the beginning of the 1970s and, unless this minister and the government show more strength than they have in this regard, it will not be a protector of the consumer, it will be a defender of the commercial interests.

I believe it is extremely important that the minister puts the protection of the consumer at the forefront of his thinking. It does not matter to me whether the consumer is a large agency such as a municipality, a school board or a children's aid society, or an individual. Those consumers are not being protected at present.

What has happened is that this crisis is in one sense suddenly upon us. School boards, children's aid societies and municipalities made the assumption they would be able to renew their liability insurance at reasonable rates. What appears to have happened is that, suddenly, over December and the Christmas holidays in particular, they got the word from their broker, after the broker had sent the policy in to the head office of the insuring company, that it came back saying either lower limits and a much higher premium, or clauses such as those encountered by the Wellington school board, which were so vague it did not want to leave itself open to a liability it might experience.

That cannot be allowed to happen. We cannot have children going to school and being denied the legitimate curriculum programs designed by the Ministry of Education because the insurance industry cannot meet its obligations. That is what has happened. The insurance industry has not been able to meet its obligations in the marketplace in the current circumstances. It has not been able to provide insurance at a reasonable rate to municipalities, school boards and children's aid societies.

The second crisis is the crisis in the automobile insurance area. It amazes me that the minister says it is a worldwide crisis. I admit there are some elements of that in it, but it seems strange to me that it is a worldwide crisis Manitoba, Saskatchewan and British Columbia do not seem to be experiencing.

I failed to notice that my own liability insurance on my home and the liability portion of my automobile insurance went down during the price wars in the early 1980s that the minister talks about. I did not notice any decrease in my premiums and my wife did not notice any decrease in our premiums. I fail to understand how the minister can defend that system when we are facing increases of 15 to 25 per cent on average when we already pay the highest prices in Canada.

The minister can say it is a function of Ontario being a more dangerous place to drive. I do not believe that. I believe our highways are just as good as those in any other province in Canada. I believe our drivers are just as safety-conscious as those in any other province in Canada. We were one of the first provinces in Canada, if not the first, to bring in seatbelts.

I fail to understand that it is a function or result of high population when northern Ontarians in the sparsely populated north pay higher rates than southern Ontarians. I fail to understand why, for communities of comparable size in northern and southern Ontario, northern Ontario communities pay more. There is a heck of a lot the insurance industry has to answer for and it has not done so.

Calling for public auto insurance is not a wild-eyed, left-wing, socialist scheme.

Mr. Breaugh: Bud Gregory was doing that this afternoon.

Mr. Foulds: The member for Mississauga East (Mr. Gregory) got dangerously close to calling for that.

Not only that; that well-known, socialist-backing newspaper, the Toronto Sun, said in an editorial on January 6: "Ontario drivers have just been issued a staggering challenge. They're being told: Go ahead, operate a car -- if you can find the money...The average safe driver, age 30, will pay for insurance what, not so long ago, was the price of a decent used car." It ends its editorial by saying, "It's a situation that must be changed in the name of justice and common sense."

4:20 p.m.

Mr. Breaugh: Amen.

Mr. Foulds: I say, as does my colleague the member for Oshawa (Mr. Breaugh) and as do the auto workers who read the Sun and work in the plant, "Amen to that." It is common sense and justice. I suggest to the minister that we have some modest solution, at least to the crisis in the automobile insurance industry, and that is public auto insurance and no-fault insurance.

It makes common sense and justice. It is instructive to note that after these schemes, ideas and plans were brought in in Manitoba, Saskatchewan and British Columbia, all under enlightened New Democratic Party governments, the Tories did not repeal them in Saskatchewan, the Social Credit did not repeal them and the Liberals have not repealed them.

Mr. Reville: They would not dare. There were no Liberal governments.

Mr. Foulds: There were no Liberal governments, which is why they could not repeal them. Now we have a Liberal government. Let it for once show a little initiative on behalf of the consumer in Ontario that is not in the accord or in its ideology and bring in no-fault public auto insurance. The people of Ontario would thank it.

Hon. Mr. Fulton: I do not know who scheduled the order of speakers, but clearly I am here to act as a change of pace from my honourable friend opposite. I have heard a number of concerns expressed with the issue before us today. I have not heard too many solutions proposed.

Mr. Foulds: Come on. I have just proposed two.

Hon. Mr. Fulton: I have heard one possible solution, and I know my colleague the minister will be considering that, as I think he indicated.

I appreciate the opportunity to make a few comments, given the nature and the urgency of the debate on this issue. I am very mindful of the concerns raised by my colleague the Minister of Consumer and Commercial Relations. As Minister of Transportation and Communications, I have had a particular interest in the issue, and as a former member of a municipal council, I have had a concern with it for some time. It is not really a new issue; it is not unlike a similar crisis I believe we went through around 1978.

I went to Washington last November to discuss matters related to the transportation industry. The very first issue raised by various representatives of the industry was the rapid escalation of insurance premiums, particularly in relation to liability coverage.

On that basis and on the basis of other personal experience, I want to acknowledge that the problems addressed by my colleague are of international concern and very much on the minds of the automotive and trucking industry and related industries. That is certainly so in the United States, if some members cannot believe it is an international or worldwide crisis. It is critical in North America as it affects the transportation industry.

Throughout the summer and fall, l met with a number of my client groups, the people I represent here in cabinet and in the House. On each occasion, whether it was the Ontario Motor Coach Association, the Ontario Trucking Association, the Great Lakes shippers, the log haulers from northern Ontario, the Ontario Urban Transit Association or those components I am directly responsible for, such as GO Transit or, indirectly, the Toronto Transit Commission, they expressed growing concern.

Last October I addressed the annual meeting of the Ontario Motor Coach Association on two occasions. At that time, on behalf of my colleague the Minister of Consumer and Commercial Relations, I raised our concerns about the growing insurance premium problem that was affecting the bus industry, particularly the smaller operators who in some cases, it is suggested, may not be able to continue to operate.

My friend the member for Cambridge (Mr. Barlow) will recall I spoke to the Ontario Trucking Association some time last fall and raised with its members the same concerns and listened to their concerns, as I did with the Ontario Motor Coach Association.

Earlier this afternoon during question period, a member raised the fact that the city of Scarborough, my home city, was hit with a 137 per cent increase in its liability insurance. That is true, but I would like to point out, reflecting on my earlier comment, that this is not a new issue that has been brought before this minister. That increase to the city of Scarborough and other municipalities was made known to them in the fall of 1984, some time before this government took over. That increase took effect in May 1985 in conjunction with the city budget; so that is not new with this government.

The rising costs of insurance affect, as I indicated, some of the carriers for which I am directly responsible. For instance, the insurance premium of the GO bus system is rising by approximately 120 per cent for 10 per cent less coverage this year. In addition, the deductible portion of the coverage is rising from $50,000 to $1 million. This is most ironic, given that the largest claim ever lodged against the GO Transit system is in the range of $150,000. The increase to the GO train system is less dramatic but for far less coverage. The deductible portion, again, rises from $1 million to $5 million in a system where the largest claim ever was a mere $8,000.

This story is the same for many of the other 71 municipal transit authorities, the taxi industry and truckers, to say nothing of the increased levels of insurance premiums we and others as drivers and home owners are facing across this province.

I am very pleased to see the comprehensive actions outlined by my colleague today. It is a recognition on the part of the minister that there is a situation that needs to be very clearly addressed and focused upon by all the players in the industry and all members of this House. I applaud his initiative in attempting to resolve this issue, which will likely continue to be before us for some time. It is not something controlled on any given street or in one building in Toronto or in the province. I am especially pleased he has established the task force, as he indicated some time ago he would do. The recommendations will come back to us within the next three months, as I understand it.

On behalf of the client group I represent, we will be closely monitoring the progress of this task force as it affects this ministry and the driving and consuming public of Ontario. Where necessary, to the greatest extent possible, I will be representing to the minister and his staff the GO interests for which I am responsible. In the process, the industry, the public and drivers across this province will have a receptive and responsible government listening to their concerns and, as indicated by my colleague's action, a government prepared to act.

Mr. Gordon: What disturbs me most about this whole issue is that it is not something that was not known about for some months. The minister has not been as fast on his feet as he could have been, given the many warnings that came from people in the industry and municipalities, such as those in the Association of Municipalities of Ontario and in the hospital field, who could see the tremendous increases coming down the track in liability insurance.

It is ironic that, just at the moment when oil prices are tumbling and the consumer is beginning to see a light at the end of the tunnel, when it looks as if the fires of inflation are going to abate to a certain degree, we now find we are into this crisis over insurance.

I will speak about Sudbury, to give an example of what people are facing. This will save the minister having to ask his staff to do that kind of research in my region. The cost of liability insurance for the regional municipality of Sudbury in 1985 was $90,000. In 1986 it is $191,000. Overall, insurance premiums have risen by 75 per cent and claims payouts will be 300 per cent more because the deductibles have been raised substantially.

4:30 p.m.

To look at some of the hospitals -- for example, Laurentian Hospital -- its liability insurance for the year ending June 30, 1985, was $21,000; for the year ending June 30, 1986, it is $66,000, a 214 per cent increase overall in hospital insurance premiums.

Let us take another institution, one that has played a very important role in the recreational history of Sudbury, the Sudbury Curling Club Ltd. Interestingly enough, some years ago when we were having all the problems with arena roofs throughout Ontario, it was found that the Sudbury Curling Club had to replace its roof. As a result, it spent a great deal of money, almost $100,000, replacing the roof. It hired one of the consulting engineering firms that was recommended by the province as being adequate when it came to the standards it followed. Yet this same curling club came to me just last year with a very disturbing report that the Ministry of Labour had gone in and said the new roof did not meet the standards the consulting firm had built into the drawings and, as a result, the roof had to be replaced.

After a great deal of lobbying, Wintario has agreed to provide half the sum of money that is going to be required. This is a curling club that has a board of directors. These people are citizens in the community and they are very worried about whether they can raise enough money to replace the roof, even after the Wintario contribution, because they have to put up the rest of the money by raising it from the citizens of Sudbury.

It is interesting, too, that on Monday a group of senior citizens came to see me in my constituency office. They are an organization of about 400 and they were wondering whether the government had some program at the present time that they could plug into and get money from so they could perhaps make a contribution to the Sudbury Curling Club. They are thankful for having this club there because they can meet and curl there.

As members know, in the Sudbury region we have a great number of retirees as a result of the things that have gone on within the nickel industry. They do not have another place to go. Yet this curling club is just hanging there by its fingernails, barely holding on. It has found that its liability insurance is going up. In 1985 it paid $3,500 and in 1986 it is going to pay $5,100.

Municipalities, school boards and hospitals have a source of funds they can go to. While they are in dire straits, and this is going to create great difficulties for our taxpayers, we also have to remember there are a lot of small institutions out there, people who are just holding on. These increases are going to put some of these clubs and organizations right under.

This is a very serious problem, and that is why I have to say that while the minister has seen fit to set up this task force and is going to examine the problem and so forth, it is not something we can wait and wait on, because organizations that perform very important services for the people in this province are going to disappear.

I think there are some things the minister can move on right now. I would like to suggest that he look very seriously at a provincially administered liability fund that would collect premiums directly from municipalities, hospitals, school boards, etc. This would be a publicly administered pool arrangement, so it would be cost-efficient. It would not have the profit motive worked into it; so it would be structured in such a way as to be quite effective in its delivery of services.

My other suggestion is that the minister get in touch almost immediately, as of today, with his federal counterpart and begin working right here in Ontario on [he kind of legislation or amendments necessary to put a cap on the liability that institutions or municipalities in the province would be liable for in the event of an accident. It is quite true that part of the problem we are facing today comes from the kinds of judgements being made in the courts. They show every indication of getting way out of hand and we have to respond. We cannot just wait and say that the courts are doing it. We are the lawmakers. The type of situation we are in has reached crisis proportions very quickly. The minister would be showing a great deal of common sense and leadership by moving quickly on this matter.

Having been a politician for some years, I realize that dealing with matters in haste can sometimes create certain political pitfalls, but there is the impact to be considered of this crisis on the people of Ontario -- not just the big people but the little people -- and the impact it is going to have, for example, on insurance premiums for people with automobiles. People who drive automobiles have different incomes. Everybody does not make the same amount of money and people need their automobiles to travel to and from their work place.

There is a pressing need at this time to move as expeditiously as possible but in a sound and thoughtful way. I urge the minister to move expeditiously on this matter and not get caught in the old syndrome of saying he will establish a committee and then take time to get the committee going.

The Acting Speaker (Mr. Morin): Your time is up.

Mr. Gordon: In that case, I urge the minister to act as quickly as he can.

Mr. Reville: I am delighted to follow my colleagues the members for York South (Mr. Rae) and Port Arthur in speaking in the interests of justice and common sense. I am also delighted to be able to follow my colleague the member for Sudbury, who seems to have noted, at least in the case of municipalities, that the marketplace has failed. Perhaps it is instructive that in Sudbury the deductible the municipality has been required to accept by its insurance agent has increased by 250 per cent. That must be of serious concern to the officials and politicians in that municipality.

4:40 p.m.

We have discussed this matter at some length this week. I hasten to point out to my old friend the Minister of Consumer and Commercial Relations that I do not feel he would willingly put anybody in jeopardy. He is not that kind of person. I do not believe he is responsible for the development of the crisis, but I do believe he must react much more appropriately to it than by saying we will have a phone line so one can call up and be counselled out of jumping in front of a moving train because of one's problem with getting insurance. That will not do, and the minister is aware of it.

One small example of the kind of dilemma municipal officials are in is illustrated by that of the Metro group. Last year, the five members were able to get a package that included excess coverage up to $100 million for a $400,000 premium with a $50,000 deductible. Although they were unable to get a firm offer from an underwriter, they were talking in terms of $1.5 million in self-insurance and $1 million in excess coverage for $400,000. The increase is very hard to calculate because of the vast increase in the deductible, but it is clearly several thousand per cent.

Although the resources of the major municipalities may be large with respect to their budget lines, I do not think they can willingly accept that kind of increase. It makes one worry a great deal about small municipalities. Town councillors must be sitting around wondering whether they should lock the doors to their arenas in case there is a catastrophic loss. Of course, locking the door to an arena means the citizens of that area are deprived of a service they need. Clearly, that is not in the interests of people in the province.

The crisis, while very grave, is an opportunity for us to think about what it is we are trying to do as a society. It seems to me we are trying to devise a method to protect people from economic insecurity. I suggest, as I did in the House earlier this week, this is a real opportunity for us to go even further than public auto insurance, all the way to a universal program whereby everybody is protected from economic loss and we remove ourselves from the kind of ransom in which we are held by the tort lawyers and insurance companies.

It strikes me there are hundreds of inefficiencies built into the system we have now, which is a kind of crazy-quilt system, and we are reaping the whirlwind at the moment because the marketplace cannot meet the need for coverage, sometimes at any price but certainly not at an affordable one.

One is very concerned, probably not in the case of a municipality but more likely in the case of individuals and small businesses, that they will not have any insurance at all. One worries that the owner of a motor vehicle will not be able to afford the premium for insurance. He will get a renewal notice in the mail with the little pink card attached that says he has insurance, but he will not pay the premium. Then, if a loss is incurred, there is a real problem.

We have not heard too much about the situation of the owners of taverns, but very soon after the election in May, I got a call from a tavern owner in the riding of the Attorney General (Mr. Scott). Because the boundaries are close, he called me. His insurance was increased by 500 per cent and the coverage was lower. It makes one worry that insurance policies might be let lapse and that the victim of an unfortunate accident would have no coverage at all.

It seems to me there is an affordable, sensible, workable alternative. All we have to do is stop worrying about the how and where of disability and concentrate on the fact of disability and how to protect and compensate people for having suffered that disability. There is a lot of opinion that supports such a scheme. Surely we do not have to wait until a crisis develops in another area of insurance, beyond the seven or eight areas we already have, to realize it makes good sense and it is good government to look very seriously at implementing a universal scheme.

The minister has already had the benefit of that advice. I also shared some advice with his seatmate who is not there at the moment, the Minister of Municipal Affairs (Mr. Grandmaître), about some things that might be done immediately with respect to the municipal problem. Clearly, one of the things that ministry should look at is a risk management program for any municipality that does not currently have one. It would not be an expensive program, but it would be efficacious and might reduce the losses currently being sustained.

The emergency debate is appropriate at this time because I believe it is an emergency, but I also believe it is an opportunity to change gears here, very significantly, and to look seriously and quickly at a universal scheme.

Mr. Epp: I am pleased to participate in this important debate. As members have indicated, it is an important subject to the people of this province and this country. It is a problem that is not only localized in this country but is also worldwide. It is a complex problem for which we should not try to find a quick fix.

There are those people who, as soon as they see a problem in society, say automatically: "Let the government take over. Let the government resolve the problem for us by passing legislation and everything will be fine."

We know what happened in society and in this province when the government decided to resolve a lot of problems quickly by taking over parts of an industry. We know what happened when it tried to buy an oil company and ended up losing almost $1 billion. We know what happened in northern Ontario when it ended up spending $50 million to recapture a $500,000 investment in a company with respect to Minaki Lodge.

We have all kinds of other examples where people have suggested the government should get involved. I am not one of those who feels government is a bottomless pit and can spend a lot of money immediately to resolve a problem.

It is my feeling and that of my colleagues that the minister has dealt with this problem in a very rational and responsible way. He has tried to acquaint himself with this problem. This situation has developed over the past three or four years, and he has been in this position for only the past six months to try to acquaint himself with the problem. He did not know, for instance, that some of the insurance companies would immediately withdraw insurance coverage from some of the areas.

The member for Port Arthur indicated earlier that the minister was a captive of the insurance industry. I am sure that is not the case. He is very cognizant of the interests of the consumers in this province, and I reject totally that he is a captive of anyone except himself. He knows what he wants and has to do; that is, to carry out the responsibilities as he has been asked to do by the Premier (Mr. Peterson) and by the electors of his constituency. He has been asked to serve the people of this province. I am sure that is exactly what he is trying to do.

It has been suggested he is a captive of the ministry. That is totally false. No minister in this government is the captive of any ministry. That may have been the case in the past, although I doubt it; but if it has been, those who suggest that are living in the past and not in the present.

4:50 p.m.

I come from a constituency that is very much concerned with the insurance industry, and particularly the life insurance industry. In the city of Waterloo alone, we have the head offices of six insurance companies as well as a lot of brokers and so forth who make a good living in that industry.

The situation needs a re-evaluation; it needs an examination. To ask a task force to look into the whole problem of insurance over three months shows a real concern for the matter and for trying to come to grips with a very complex issue. Therefore, I take this opportunity to compliment the Minister of Consumer and Commercial Relations on trying to come to grips with a problem that has been there a number of years but has come to the fore in the past few weeks.

Mrs. Marland: I regret having to rise to speak in this emergency debate. Had the minister been fulfilling his responsibilities, this whole subject would not have needed an emergency debate in the House today. It would not have reached the degree of emergency that is before the people of this province today.

In the city of Mississauga yesterday, there was a meeting of its general committee of council, which is made up of all the members of council and the mayor. They were subjected to having an emergency debate because of the situation that faces the city of Mississauga. As a result of the meeting yesterday, they are sending a resolution of the council to the Premier and to the Minister of Consumer and Commercial Relations, along with a whole list of requests they wish to have addressed immediately.

It is pointed out by the people in Mississauga, who are familiar with the involvement of the minister and the Association of Municipalities of Ontario, that the minister knew about this problem in August. At that time, AMO passed a motion asking the provincial government to establish an insurance industry panel to explore immediately and to determine expeditiously what solutions could be applied. That was in August. I cannot emphasize that enough.

Therefore, it is interesting to sit here this afternoon and hear the members of the government stand up and congratulate their minister for his actions today. They are congratulating him on his good judgement, which I find tremendously interesting. It takes a lot of good judgement to wait for perhaps five months to do what? To set up a task force for another further three months.

The implications of the situation today around this province have been well described by some of the previous speakers.

I would like to suggest that this government would do better to commit its time and energy to critically important issues such as this one rather than to the almost flippantly insulting issue of the revocation of Queen's counsel appointments. In terms of this government's responsibility to the people of the province, where on its scale of importance does revocation of Queen's counsel appointments rank versus the subject we are dealing with today?

The implications for all the amateur sports organizations in this province are very grave. I spoke this morning to Bill Moir, who is the president of the Clarkson-Sheridan Soccer Club. He tells me that because the city of Mississauga has not been able to obtain its comprehensive umbrella liability policy to protect groups such as his, the soccer group has been notified that it will no longer be covered as of January 31. This club is just an example. Like many other groups, it will have to cancel its programs. Currently, it has an indoor winter soccer program; obviously, after the expiration of the insurance policy, that will have to be cancelled if coverage cannot be obtained.

For the interest of all members of the House, but I guess particularly the members of the government who may not be aware if they have not faced this aspect of what is being excluded in risks from insurance policies, I wish to point out that the city of Mississauga made its normal submission for insurance coverage this year and the exclusion list includes things such as errors and omissions. That is very interesting because there is not a member of any municipal, provincial or federal government who does not at some time rest with the comfort of knowing that errors-and-omissions insurance exists.

Also, the risk coverage for pollution has been eliminated from the coverage for Mississauga and associated and affiliated groups. They are all volunteer community groups on which this province is built and on which it thrives with respect to the recreational activities which are the most important aspect to the survival of the good health of the people of Ontario. People work, but they must also recreate. If we have the volunteers in those community groups at risk because there is no liability insurance for them in any of their activities, then who is going to be responsible for any kind of involvement with either young people or adults in programs where the liability might fall back on those volunteers themselves?

I say to the other member for the city, the member for Mississauga North (Mr. Offer), who is sitting on the government side of the House, he should think about the fact that many festivals would have to be cancelled which have become an inherent part of life in that city, such as arts and cultural events and parades, including the Santa Claus parade. All those things individually do not sound terribly important, but if we put them all together and realize the impact they will have on society throughout our province, there are very grave implications.

I listened with great interest to the member for Scarborough East (Mr. Fulton). He stood up a few moments ago and said he does not hear any solutions being proposed from this side of the House. He congratulated his minister for the things the minister announced today, which incidentally were announced today only because of the pressure brought to bear on him by this party. With great respect, I most humbly suggest the solutions are not the responsibility of the opposition parties in this House; they are the responsibility of the government of the day, and the member for Scarborough East is a member of that government.

5 p.m.

Since the member is not sure about solutions, I will give him one. The simplest solution, and a no-cost one, would be that the government instruct the superintendent of insurance, who has the authority, to call the government and the industry to the table immediately to work out a solution to this problem. The government must act now, not wait a further three months until after the task force reports. The crisis is not three months hence; the crisis is today.

Mr. Hayes: Many of the previous speakers spoke about the Ontario motorists, businesses, hospitals and municipalities. I, as the critic for Transportation and Communications for our party, will touch on the specific industry of transportation and how this drastic increase in insurance is affecting it.

I have some specific cases I want the minister to be aware of. Unlike the Minister of Transportation and Communications (Mr. Fulton), I have also met with the Ontario Trucking Association, the Ontario Motor Coach Association and individual transportation firms. I will just note some of the comments by various businesses made by phone, by letter and also during a meeting.

One particular business has 30 vehicles -- highway coaches, school buses and vans. Last year its insurance premium was $30,000; when it renewed in May, it went up to $100,000. Here is a company which has taken three highway coaches off the road because of the cost of insurance.

Here is another one in my riding, a family business in operation for more than 36 years. It operates approximately 25 heavy trucks. Its insurance went up by 30 per cent last year. When it tried to insure this year, it could find only three carriers in Ontario who would insure a whole fleet. One of those insurers would insure the fleet only if it could also insure all its property and assets. I call that blackmail by some of these insurance companies. This is a corporation, operating for more than 36 years, which may go out of business as a result of the high increase in insurance.

Here is another one. The company has 67 school buses, highway coaches and cars. Last year it paid $5,300 per month for insurance; at the end of September, it received notice that its insurance would go up to $16,000 a month. It is paying at the moment but it feels it may not be able to continue to pay and will have to go out of business.

Here is another one. It operates 190 vehicles -- school buses, coaches, cars and trucks. The insurance premium on November 1, 1984, was $232,000 a year; on November 1, 1985, it was $606,000.

One of the problems we are not looking at is that a lot of the trucks and buses are going to be taken off the road because the operators cannot afford the insurance. We are always talking about jobs. Jobs are always seen to be an issue. They are an issue, especially for the New Democratic Party -- creating jobs and saving the jobs we do have. When these vehicles are taken off the road, it will be not only jobs we are losing, it will also be necessary service, another concern.

I want to be brief. I am hoping the minister has also been contacted with similar kinds of circumstances to the ones I have brought up here today. If what is happening in just this one sector is not justification for this province to bring in public insurance, I do not know what is.

Mr. Offer: I am pleased to join in this debate with respect to concerns revolving around the insurance industry. I would respectfully suggest it is absolutely necessary to recognize two initial and essential points.

1. The insurance industry has been a significant part of our society throughout history. It has been significant not only economically, significant to investment for a myriad of financial services, but also in a more social sense. By that I mean a sense of assurance, the security the fact of insurance gives many, is not only a sense of business protection but also of a personal nature. We must ask whether the significant role the insurance industry has played historically shall remain at the level it has.

2. It is necessary to recognize the insurance industry is closely and inextricably bound up with the international community. Not to admit and recognize that the concerns of today are running throughout many countries is to do a disservice to this debate. We must recognize these concerns are not unique to Ontario.

According to an English reinsurance underwriter and broker, reinsurance capacity is shrinking by up to 40 per cent for aviation casualty programs and 10 to 30 per cent for property programs because of the difficulty London reinsurers are having finding retrocessional coverage.

In the United States, leaders of that nation's urban bus systems say they are having growing difficulty obtaining affordable liability insurance. As a result, some systems may have to shut down and others will be forced by huge rate increases to reduce services, raise fees or operate without insurance.

In Boston, a broad range of businesses and professions, many municipalities and some states are having trouble buying the liability policies that are vital to the stability of their operations and financial wellbeing.

It is indicated that in Illinois a growing number of time-honoured recreational institutions, roller rinks, bowling alleys, amusement parks and go-kart tracks, have become victims of a very modern business problem: They cannot buy insurance and in some cases they do not have the option of operating without it.

I do not mean to say we should be any less concerned due to the mere fact this is an issue of scope which transgresses not only the borders of Ontario but also of Canada, but I do mean to say we should not be blind to this worldwide problem.

5:10 p.m.

I suggest the questions emanating from this topic of insurance seem to devolve into two major categories, affordability and availability. With respect to the aspect of affordability, certain factors seem to be evident:

(a) We are experiencing the fallout of the excessive price competition of the early 1980s. This does not mean price competition is negative. However, when the competition is excessive, we must recognize that certain correcting forces will eventually take hold. That does not mean one must accept the result, but it does mean that to ignore this fact is to blind oneself to the cause of so many concerns.

(b) Recognition of the effects of low interest rates and the prospect of the continuation of those interest rates at such levels: We must recognize that the prevailing rate of interest throughout the marketplace affects the return on investment accruing to insurance companies, culminating in an impact on premiums. This does not mean that lower interest rates are negative, but it does mean that to blind ourselves to this factor is to do a disservice to those concerned.

(c) There is the emergence not only of higher claims and court settlements, but also an increase in persons available to make such claims.

Pertaining to the availability of insurance, it is interesting to note that implied in that phrase is the availability of traditional forms of insurance obtained through traditional means. We cannot ignore the fact that many affected groups are establishing reciprocal insurance agreements meeting the need. For instance, this is an evolving situation. As the members know, many municipalities are in the process or are exploring the possibility of setting up their own reciprocal insurance exchanges; essentially a form of mutual self-insurance. Maybe it is not the traditional form, but it is done in a way they feel is necessary at this time.

The member for Mississauga South (Mrs. Marland) alluded to me in her speech. It is interesting to note that if she were concerned about what is happening in that fair city, she would have noted that the soccer association, with six soccer clubs throughout Mississauga, is currently obtaining insurance to maintain its season this year. As late as this afternoon, it has been in contact with a number of insurance agents and has received information that insurance is available. However, to be fair, that insurance may carry a rate that may prove to be excessive. That is not to say they are not expressing the need and endeavouring to find a method to maintain that season.

Mrs. Marland: We have spoken to the same people, but I have spoken to them since the member spoke to them.

Mr. Offer: I would like to indicate to the member for Mississauga South that I had a telephone discussion with one of the presidents not more than 12 minutes ago.

The Minister of Consumer and Commercial Relations and this government are sensitive to the concerns of those affected and are aware of the causes. I am encouraged by the action of the minister in attempting not only to meet head-on the causes of this international problem but also to provide immediate access to the public through the creation, as we now know, of a special information telephone-line service through the office of the superintendent of insurance to provide information and advice expeditiously and effectively to business and nonprofit organizations that are experiencing difficulty in obtaining such liability insurance.

I compliment the minister in approaching directly the concerns of those affected, in coming to grips with this worldwide problem in a sensitive, forthright, and sensible manner.

Mr. Barlow: I am very pleased to join in this debate and add a few comments on the concerns that have been expressed to me in very recent days and weeks. I would like to bring to the attention of the House some of the feelings of constituents and of the Ontario business community at this time as escalating insurance becomes an increasing concern to them.

Small businesses, restaurants, various tourists attractions, trucking companies, all these institutions and businesses, as well as public schools, separate schools, municipalities and so forth, are having the very same problem because of escalating, skyrocketing insurance.

As I mentioned in the prelude to my question to the minister this afternoon, the main item on the agenda of the Attractions Ontario meeting being held today is that of insurance. This underscores the importance and urgency of the situation when the threat is such that operations throughout Ontario are forced to close. At the very least, it is going to mean a substantial amount being added to the price of admission for many of these attractions.

Despite excellent management practices and, in most cases, very low claim ratios, small businesses throughout the province are suddenly finding themselves smacked with unreasonably high insurance premiums, if they can get insurance at all. There is little choice. They must either pass on the added expense to their customers and risk losing their business or perhaps even pack in the business, resulting in a loss of jobs in the province.

In this day and age, people simply cannot operate without insurance. To try to operate without insurance might mean not only the end of their business if someone were to be hurt and the company sued, but also the end of their own and their family's personal resources and security. Insurance was designed to offer protection to businesses and to assure the owners they would not face ruination because of some accident or unforeseen incident, but it has become such a monster that it could now destroy those very businesses.

We have had several speakers on all sides of the House speaking sincerely on this very matter with equal concern. Our friends on the left have proposed their usual solution; that is, to nationalize the insurance business.

Mr. Breaugh: That was the member for Mississauga East.

Mr. Barlow: Was it? No. I was sitting right behind him. He never got to that point at all. The speakers for the government across the way have been defending the minister. Generally speaking, the minister has been doing a very good job on most subjects, but I think he has been a little bit asleep at the switch on this one.

Interjections.

Mr. Barlow: The members on my left have to defend him; we do not.

The previous speaker, the member for Mississauga North, was telling us it is a worldwide situation. So what? It may very well be. We are concerned about what is going on in Ontario right here and now.

In the minister's statement this afternoon, I was pleased to see he has been talking to the farm mutuals about extending their jurisdiction so they may also participate in the general insurance market. I was talking to one of the officials of a company in the Cambridge area and he told me this has been under discussion with the minister. Perhaps it will broaden the competition without the government getting into the act.

5:20 p.m.

I hope the task force will address what seem to be some of the main concerns. From what I hear and read in the press, some of the court settlements seem to be at the root of this whole thing, not only here in this jurisdiction but also in the United States and elsewhere. The prime example that everybody is pointing out nowadays is the Brampton case, in which a judge awarded a $6.3-million settlement, or whatever it was, for an injury on a dirt-bike trail. I hope there is some way the minister can consult with the Attorney General and look at this one problem. It is serious.

I would like to get back to the business community. That is now my area of responsibility within this party as the small business critic. I have talked to businesses in many different industries in the past few days.

I do not see any of the members from the Kitchener-Waterloo area here at the present time, but just today I spoke to the owner of the Charcoal Steak House, quite a famous steak house in our area. It happens to be in the riding of Kitchener. The liability insurance on the restaurant has gone from $1,300 last year to $6,500 this year. The president of the company says it is a big organization and it can handle it, but if a smaller organization had similar increases, it could very well be detrimental to that business. That is a 400 per cent increase. The mind boggles at those kinds of dollars and percentages of increase.

I was talking with the owner of a local rental place that rents tools, has propane outlets, lawnmowers, lawn rollers and snowblowers for this time of year. He recently renewed his fire and theft insurance. There was no problem. There was a small, reasonable increase, and the owner was willing to accept that.

However, when it came to liability insurance, he could not get it. Actually, he can get it in that he has a binder -- I think this is a term that is used in the industry -- carrying him through until the end of January. Beyond that, he just does not know what he is going to do. The owner tells me the claims have been minimal. He has had a few minor claims over the years, nothing that he probably would not normally have handled out of his own pocket if he did not have the insurance.

Pioneer Sports World, just north of Highway 401 on Highway 8, has a huge water slide. This is the point I was trying to bring out in my supplementary. Last year it had $1 million in insurance, and that cost $3,200. This year all it could get was $500,000 worth, half the insurance coverage, for $16,500. From $3,200 to $16,500 is an increase of 415 per cent. However, when one has only half the coverage, then doubles the 415 per cent, maybe it is an increase of 830 per cent. It is an awful increase, anyway. This is just for 1985. They do not know whether they are going to have any coverage for 1986.

Mr. Grande: What does the member think should be done?

Mr. Barlow: It has to be done by the government, and quickly: Consult with the insurance industry and get it on side.

The other solution I suggested was to look at the court settlements and talk to the officials in the Attorney General's office to find some way of decreasing them. That is where the problem lies. Nationalizing everything is not going to prove a thing, and the member for Oakwood (Mr. Grande) knows it. However, it is the theme those guys like to run on.

There are a couple of other examples I would like point out. One is African Lion Safari. It is a great tourist attraction. It was very fortunate to be able to get insurance coverage at all. Incidentally, the carrier they normally deal with sent them a bill, and they sent the cheque in to pay the insurance. The cheque was returned uncashed with the response: "We cannot afford to insure you for that price. You are now going to pay 525 per cent more." If they wanted insurance at all, they had to carry it at that price.

I heard on the radio as I was travelling along the highway on Tuesday afternoon that a local Ontario bus company was paying $5,500 per month for its insurance; then it was increased to $17,000 per month. That is more than triple, and it is only until the end of March. The company is not sure whether it is going to be able to get insurance at the end of March.

The list goes on and on in all sectors. The trucking industry is very near and dear to my heart. I am not going to cite the examples there; they have all been cited today. It is something very serious and it is the minister's responsibility to meet with these people and help them solve their problems.

Mr. Mackenzie: The current crisis we have in the availability of insurance, whether for municipalities or individuals in auto insurance costs, affords us a rare opportunity to look once again at an alternative that many members of this House do not accept. I refer, without question, to public insurance.

It gives us an opportunity to take a look at it to see whether it is a viable option. An awful lot of people in Ontario who might not have been willing to consider it a very short time ago would be willing to consider it today. If the industry is hurting as badly as it tells us it is hurting -- and a lot of it is based on projections or worry, largely as a result of the Brampton judgement -- it should be happy to let us take a serious look at the option of public auto insurance.

We have to take a look at the motivation for public ownership and find out whether it makes sense. A major principle in public ownership is the social necessity of compulsory minimum insurance. If private insurance is allowed to market compulsory basic coverage, then the motorists, as well as others in other fields of insurance, are forced to contribute to the profit of the companies. It seems inappropriate for motorists and municipalities to be forced to contribute to the profit of a private company in a matter of social necessity. Is this issue a matter of social necessity? I submit it is.

With the establishment of a compulsory market, it also seems inappropriate that insurance should be provided at anything other than the lowest possible cost to consumers. A government insurance enterprise, particularly in the automobile area, is expected to produce economies of scale in administration and delivery costs that will permit operation at lower premium rates than other systems.

Furthermore, the principle of compulsory insurance requires that coverage be readily available to all consumers, to all motorists, on an equitable basis. If conditions in the private market for insurance restrict the availability of coverage at a reasonable cost to certain people, then the principle of universal coverage may have to be met through public intervention.

Aside from the question of how to market best and administer compulsory insurance, a number of further socio-political aims contribute to the motivation for public ownership. For example, public ownership is suggested as a means to ensure the insurance carrier, because of the high political profile and head-office presence in a province, will be more sensitive to the needs and the interests of the consumers in that province.

There is also an opportunity for that province to utilize surplus funds in the interests of the people of Ontario. That opportunity does not necessarily always exist when pools operate that are available only to the insurance companies.

We have a problem. I am sure most of the members' are getting the calls I am getting from people who have seen increases in their insurance. If I can, I would like to use one example that came to my attention only three days ago. This example involves a new staff member of mine, working with me both here in Toronto and in my constituency office.

5:30 p.m.

This young woman drives what she is able to afford -- a 1970 Firebird, which is in rather good condition for a 1970 car that has seen a lot of miles. It is a two-door, eight-cylinder car. She has liability coverage in Ontario right now of $1 million, but absolutely no deductible or collision coverage. She has been paying $187 for six months or $374 for a year. She got a notice exactly three days ago that her insurance will now be $355 for six months or $710 for a year. She is a driver over the age of 25, has had no accidents and makes limited use of the car. She does not use it for driving to work to Toronto. She takes the bus or the GO train when she has to come to Toronto.

I had a difficult time accepting that kind of jump and I told her to do some checking for me. We called the Manitoba Public Insurance Corp. I was interested in the minister's comments about there being double the danger in Ontario. I do not know what the difference is between Winnipeg and Hamilton, but I suspect that doubling would be high.

We found that if she lived in Winnipeg and had the same 1970 Firebird, for $1 million worth of liability plus $200 deductible, which she does not have here for her current increased cost of $710, it would cost her $145 per year. That was quoted to us at noon today by the public insurance office in Winnipeg, Manitoba. For $1 million liability and $200 deductible on a 1970, 2-door, eight-cylinder Firebird with limited use and used only for pleasure, it costs $145 in Winnipeg and $710 in Hamilton with the increase that has just gone through. If I accept the minister's figures that there is a doubling of the risk, and I suspect that between Winnipeg and Hamilton it is nowhere near that, somebody is being ripped off with that increase.

Calls are coming in about the auto insurance industry. Obviously, there is concern with respect to municipalities, school boards, etc. This is why I read a little about the reasons for the occasional motivation to take a look at the whole public auto insurance field. We are making a mistake if we do not take this opportunity to have a serious look at public automobile insurance as the best and cheapest way to have coverage and to keep control of and use of those dollars in our own hands. I hope we in this House are willing to investigate that direction.

Mr. J. M. Johnson: I would like to make a few comments in this emergency debate pertaining to the availability of liability insurance. I would like to make reference to my leader's comments earlier this afternoon in his first question to the Minister of Consumer and Commercial Relations pertaining to the Wellington County Board of Education and the necessity for the board to close its gymnasiums.

Wellington county just went through an 11-week teachers' strike with 51 lost school days. People were just back in school on Monday; then on Thursday the gyms were closed. It is most frustrating and aggravating. Parents and students are appalled that this has had to happen.

While I certainly cannot blame the minister for being responsible for this situation, it has been pointed out by my leader and members of our party that it is a situation that was going to come about at some school at some point, and it has happened in my county of Wellington. I received calls today from parents who wonder what in the world is happening to Wellington county and the education system. After so many weeks of sitting and waiting by the students for the schools to open, the schools open and then the gyms are closed because the school board cannot afford or cannot buy insurance.

I understand that insurance is available, but if it is not affordable, is it really available? That is a question the board will have to make, as the minister indicated, but it also creates a real dilemma for them because they operate with government funds. If there is nothing he as the minister can do, or the government can do to help them in their need to obtain that necessary insurance, then it should be looking at some way of being able to help finance them with their increased costs.

I was talking to one of my township clerks yesterday in a small township called Arthur. Only about 2,000 people live in it. They have a sanitary landfill site that serves neighbouring municipalities such as Mount Forest, the village of Arthur and the township of West Luther.

They have operated the site for many years. As a matter of fact, when I was on the local council some 12 or 15 years ago, I was instrumental in being partially responsible for setting up the site. There was absolutely no problem until last year when, through the underwriters, Frank Cowan, the pollution liability insurance annual premium was $800. This year the company has refused to reinsure at any price. The council was able to contact a firm in Toronto. It has not been able to set the policy in place yet, but it is my understanding it was quoted a premium of between $25,000 and $30,000. It went from $800 to $30,000 for the same amount of insurance.

My good friend and colleague the member for Elgin (Mr. McNeil) helped me work out the increase and the percentage. It came to 3,500 per cent, give or take a few points, which is a fairly dramatic increase. That will impact on the four municipalities I mentioned. While the amount does not appear to be all that much, the percentage increase is tremendous.

I also discussed the problem with the municipality of Shelburne. It had a substantial increase, which amounted to about 80 per cent on its municipal insurance. I thought I had the figures here. I apparently have misplaced them, but it was in the vicinity of an 80 per cent increase. The town of Caledon had a substantial increase last year that amounted to about 50 per cent or 60 per cent. It has not been quoted its figure for this coming year, but it feels it will be in a similar proportion.

This has to impact drastically on the budgets of any of these municipalities faced with these costs.

I noticed on the information sheet that in the case of the Hospital for Sick Children, where I had occasion to bring my granddaughter within the last year, its insurance last year was $300,000, but this year it will be $1.1 million, or an increase of 267 per cent.

There is no point in going over the many increases because they have been well stated today. The minister is certainly aware of them. However, as a member of this Legislature, I would like to implore him to use his good offices in whatever way possible to see whether something can be done by his ministry and the government to alleviate the problems these municipalities, boards and hospitals are having with this dramatic increase in liability insurance.

5:40 p.m.

I understand there are some real horror stories in the education field in Toronto. I have heard stories of boards being able to comply with the Education Act through mechanisms I would not consider totally ethical. It is my understanding that some boards are obtaining $1 million worth of insurance, with certain stipulations, which does not give them very much coverage. I understand they have to accept a very nominal amount. They are paying for something they are not receiving, simply to comply with the Education Act. This is a situation we should check into.

I would like to close by suggesting that we in this assembly do have a responsibility to protect our citizens through the boards and municipalities and to do what we can to see whether there is some way we can alleviate the very serious concerns that have triggered off this emergency debate today.

Mr. Breaugh: I want to participate for a little while this afternoon. I think this is a classic situation. My mother used to call this kind of activity "dithering," which is an old-fashioned word. It means one knows there is a problem and it upsets one a little bit but one is not prepared to do anything about it.

It seems that is pretty close to the mark as to what the ministry has been doing in response to a crisis that a whole lot of people knew about. They have known about it since the landmark case last year. All through the spring, summer and fall, the municipalities, their officials and people who work for boards of health, boards of education, virtually all public agencies, knew there was going to be a real crisis at some point in attempting to get liability insurance.

I am sure we could write off a new government and a new minister by saying they have not had the chance to explore the issue fully over the years. However, we cannot excuse the officials of the ministry who have been aware and who have been participants at all the meetings, seminars and formal conventions. They have been observers and participants in discussions around what everyone knew would be a real crisis in attempting to get liability insurance. In all that time, nothing has happened.

I watched the minister today try to explain we could have a task force, we could explore, we could look at a lot of possibilities. I hate to be the one to break the news to him that the exploration process has gone on in Ontario for almost a full year, probably by the same people who are going to do the task force work. This Legislature has had a select committee on company law looking at all these problems for the better part of a decade. There is not a rock out there that has not been overturned. There is not one thought that has not been explored. This is not new ground; this is very old ground.

In terms of a response from hospitals, for example, most members who have been to a dinner, a business meeting or a social function where somebody from a hospital board was present have had their ears filled with the problems about getting insurance. Everyone knew this difficulty was not a long way away on the horizon, but was reality.

The cruel part is that today the curriculum in schools is being set by insurance companies. That is insane. How that was allowed to happen is a classic story of how governments can foul up things by not taking any action, and by not taking any action, cause major problems.

I have listened to the debate in question period over the past few days where discussions are going on about whether it is feasible for a school board to self-insure. The obvious answer is that a large school board with a large budget in theory could self-insure, but a smaller school board does not even have the theoretical whim to do that; it would be distorting the truth immensely to say it could be self-insured.

The obvious answers are the ones that have been talked about by the Association of Municipalities of Ontario, by all the municipal organizations, by the school boards and by the hospitals. It is probably quite practical to say they could pool their funds and self-insure on a larger scale. They have been talking about how to do that for some time.

It is not an outrageous notion to suggest that all these public agencies could pay their premiums into a central fund, which might be able to provide some kind of self-insurance. That is not a wild, hare-brained scheme by a long shot. It has been talked about by some very right-wing administrative people who see that as a very practical solution to a problem they knew was coming on. The tragedy is that this was not done during the summer and fall discussion period. If it had been, the government could have moved very smoothly from a period where they were covered previously by private insurance plans to one where they now are going to be covered by some publicly administered insurance plan.

It is not a difficult concept. It is certainly not a new concept. It is not an outrageous concept at all; it is one that would have been immensely practical. For example, if all these agencies were to pay into a central fund the same amount of money they paid last year for liability insurance, we would have something that is close to the mark of being a self-insurance scheme, a pooled scheme, or whatever name one wanted to put on it. It is not that complicated, and it does not require a task force. All these administrators have talked about this concept over the summer and fall; the tragedy is that no action was taken.

There is another part of it that deserves a little mention here. We generally assume outfits such as insurance companies are very wise indeed; so it is quite amazing why they chose to escalate their rates so sharply at a time in the history of Canada when public automobile insurance, as an example, has rates that are declining. One can say they have actuarial tables and experiences and all that, but we all know that is baloney.

One would have to be pretty dumb to say that in places such as Winnipeg, the traffic conditions, the driving conditions or the conditions of the drivers, the vehicles or anything else are substantially different from what they are here in Metropolitan Toronto. They are not, and we all know that.

We all know also that at a time when publicly operated automobile insurance schemes are able to take their rates down, the free market, so to speak -- the private sector -- ought to be able at least to compete with those publicly funded auto schemes. They can, but they choose not to.

In my book, whether or not one is an advocate of public automobile insurance, as the member for Mississauga East seemed to be this afternoon, one has to put on the record that this government is going to have to respond to the interesting question, "Why are these rates skyrocketing in Ontario and going down, or at least staying steady, in Manitoba and Saskatchewan and even among the Socreds in British Columbia?"

It cannot be a right-wing/left-wing concept. If the Socreds in BC can live with public auto insurance, this government can too. This government cannot possibly be more right-wing than that government in BC. Can it? I do not believe it is ideologically possible. The government would have to go through some contortions here to say it is prepared to be more to the right than Bill Bennett and his group. I do not think that is possible.

I believe members of this government are going to sit down and dither some more, and that is a shame. If they are practising politicians in Ontario, as I have been, they must have been to a dinner with somebody from a hospital board who bent their ear about the hospitals' premiums and what they are going to have to pay for liability insurance. They must have had, at some time in the past eight months, some contact with a municipal councillor who told them the exact same thing. They must have stumbled across a trustee or two somewhere.

The members of this government cannot be defending the concept that, as of today, an insurance company decides what will happen in Wellington county schools. That is indefensible. What the government is doing is slowly but surely backing itself into a corner, and it will have to respond much more quickly than what I heard the minister say today. The government cannot fumble around much longer. Enough people have met on the matter and offered advice and practical alternatives that the government cannot pretend they are not there sitting on its plate.

It is a time when the government cannot fake it any more. The government cannot pretend we need another decade of a select committee on company law. It cannot pretend we need another task force of the same people who discussed it for the better part of a year. The government does have to make some kind of decision.

I am going to predict that the very same minister who announced today, "We want to talk about it some more," is going to come back in here very shortly and make some kind of decision. I hope he does that sooner rather than later, because I believe it is a tragedy that all our hospitals, school boards and municipalities are being held to ransom by the insurance companies. It is to their everlasting shame and discredit that they chose to do it that way, and it is to the minister's shame and discredit that he did not take some action during the fall to ward off this ridiculous situation.

5:50 p.m.

Hon. Mr. Kwinter: I would like to start by saying how pleased I am by the participation in this debate. I can tell members that the attitude, the mood and the concern that have been expressed in the debate are a far cry from the political rhetoric that has been going on during question period. Without exception, members have made what I think are very useful contributions, and I am delighted to hear these things.

I would like to address various points that were made. One thing that should be taken into account is that we are starting to talk about apples and oranges, for my friends in the third party, in that auto insurance is one problem and liability insurance in the broad spectrum we are dealing with is another.

Mr. Breaugh: We know that.

Hon. Mr. Kwinter: We agree with that. I am saying that the philosophical-political bent as to whether government should be in the insurance business is a basic decision that has to be made, and it is not a decision I am addressing in this emergency debate. It is something this task force will look at. If it recommends that and if it says that is the solution, I can assure members that my colleagues and I will look at it and address it.

However, I do not think it is something we should address in this emergency debate, and although I welcome the members' comments and think a lot of the comments have a lot of merit, there are some other areas where it is not quite the same. When we look at the public insurance schemes in other provinces, we do not know to what extent they are being subsidized by the government because of the philosophical decisions they have made and whether they are backing them up with dollars.

Mr. Foulds: Manitoba's is not subsidized.

Mr. Breaugh: The minister is classing us with Bennett? Come on.

Hon. Mr. Kwinter: I am saying I would like to separate that out and restrict my comments to the subject of general liability insurance and the lack thereof at an affordable rate.

I know some members deride the fact that we talk about a worldwide situation, but one cannot deal with the insurance industry unless one deals with it on a worldwide basis. Insurance is a basic matter of economics that is considered to be one of the four pillars; we have securities, banking, loan and trust companies and the insurance industry. It is a matter of economics, and there is no way we can legislate companies to lose money.

I admit that insurance companies make money; they make a great deal of money. However, they make it in very selected areas. Unfortunately, the areas they are selecting are not in the liability field. Last year alone, six companies went bankrupt in this country. We have a situation in which my cabinet colleagues and I approved yesterday an insurance compensation fund to protect consumers to a level of $200,000, because with the Northumberland General Insurance Co. failure, we had people who were caught and had a loss they could not get compensated for. They are out not only their premiums but also the compensation for their loss. We have addressed that, and we hope it will bring some stability to that portion of the market.

A couple of other things were mentioned. My friends in the official opposition stated they had a committee in effect, asked why it had been disbanded and was not functioning and said it had the potential to resolve all these problems. I stated in question period that I had no idea what the committee was because I had not heard of it.

Upon inquiring since then, I have found that the deputy minister does not know of such a committee and that no one else seems to know of it. The superintendent of insurance said, "Yes, I think there was a committee formed by Dr. Elgie whose sole mandate was to see whether the $200,000 minimum limit of public liability should be increased to $300,000." That was its sole mandate. It met once and never met again. It certainly was not a committee that was struck to look into the wide-ranging area of insurance.

We identified some time ago that there was a potential problem in the insurance industry. It is a potential problem. When we identified this, we apprised all our constituent jurisdictions that would be affected -- municipalities, school boards, hospitals, all these people -- that there was beginning to be a crunch in the liability market and that they had better be prepared for it and make suitable accommodation.

Some members opposite felt we should have solved the problem. The only way that problem could have been solved would have been for us to say: "We are going into the liability insurance business for everybody. Anybody who wants to get liability insurance, come to see your friendly provincial government and we will cover you." With respect, there is not enough money in this province to do that. This crunch is not unique to Ontario. We do not have any capacity in the market. That means there are not enough people in the reinsurance business who are prepared to put money into this market.

All one has to do is look at it from a very practical point of view. I am sure all the members are quite practical. If a municipality goes to an insurance broker and says, "I would like to place some insurance, and I am prepared to pay you a premium of $500,000 or $1 million," the broker calculates immediately: "I work on a percentage, on a commission. That will be worth $50,000 or $75,000" -- or whatever rate one is working on -- "so I am going to grab this business." If members think there is an insurance broker who is happy about going back to his client and saying, "I cannot place this insurance for you because nobody will take it," I can tell them brokers are not exactly thrilled with that prospect.

Like it or not, we are the victim of what is happening worldwide. When there is a Bhopal, it affects Ontario. It is unfortunate, but it does. It affects the insurance market because there is only so much money out there. In Canada, we do not have a home-grown reinsurance market. It is unfortunate, and it is one of the things we hope to address with our task force. We are hoping to set up a Canadian exchange so we can put together a major pool that will be made in Canada for Canada and will allow us to bring some stability to the market.

At present, most of the money coming into Canada for reinsurance comes from offshore. if that money does not come, then one's friendly neighbourhood broker cannot place the business. If he cannot place the business, he says: "I am sorry. I would love to do business with you, but I do not have anybody who will take it." There is no way we can legislate to say, "You must take that business because, whether or not you lose money, you have an obligation to do it." It is not an easy solution.

We have to get to the position -- and I am delighted to hear the comments of some of the members in the debate -- where we can take some of these premiums, put them into a pool and try to bring some stability.

Let me give an example of what happened in New York and tell members how this can work. We talk about a crisis; it is a crisis everywhere. A study by the New York Department of Transportation showed that in the 12 months ended August 1, 1985, coach lines in the state had paid $6.6 million in premiums while insurers paid out only $800,000 in claims and became liable for only $3.5 million in lawsuits. They paid out $800,000, and they had contingent liabilities that might happen, depending on the results of the court cases, to be a maximum of $3.5 million, but the coach lines paid out $6.6 million.

In another case, a group of 321 school bus operators paid out $7.7 million in premiums for insurance in a comparable 12-month period and their insurer paid out only $2.5 million.

There has been a very big spread. We are looking at various municipalities now and saying: "Let us take a look at your claim record. If there is a great disparity, we can pool that money. Let us see" --

The Deputy Speaker: Order. Time has expired.

BUSINESS OF THE HOUSE

Mr. McGuigan: In the absence of the House leader, l would like to indicate the business of the House for the remainder of this week and next.

Tonight there will be second reading and committee of the whole House, if required, on Bill 11, the Change of Name Act; Bill 12, the Children's Law Reform Amendment Act, and Bill 13, the Vital Statistics Amendment Act.

Tomorrow, Friday, January 10, there will be the estimates of the Ministry of Northern Development and Mines.

On Monday, January 13, we will have second reading of Bill 54, the Ontario Drug Benefit Act, and Bill 55, the Prescription Drug Cost Regulation Act. If time permits and if required, we will consider legislation of the Attorney General (Mr. Scott) not completed tonight. Any votes necessary will be stacked to 10:15 p.m.

On Tuesday, January 14, afternoon and evening, we will have second reading and committee of the whole House, if needed, and committee of the whole of Bill 1 , the Family Law Act; Bill 95, the Science North Act, and Bill 97, the Amusement Devices Act. If time permits, there will be second reading of Bill 94 on extra billing, Bill 65 on first contracts and Bill 34 on freedom of information.

On Wednesday, the usual three committees may sit.

On Thursday, January 16, in the afternoon, we will have private members' public business standing in the names of the member for Scarborough Centre (Mr. Davis) and the member for Dovercourt (Mr. Lupusella). In the evening, we will have debate on the report of the standing committee on resources development concerning the Workers' Compensation Board.

On Friday, January 17, we will continue legislation not completed on Tuesday.

The House recessed at 6:02 p.m.

9 janvier 1986