L100 - Mon 9 Feb 1987 / Lun 9 fév 1987
CANADA-FRANCE FISHING AGREEMENT
NATIVE FISHING AGREEMENT
TABLING OF INFORMATION
REDIRECTION OF QUESTIONS
IMMIGRANT WOMEN'S CENTRE
SELF-GOVERNMENT FOR NATIVE PEOPLE
SOUTH AFRICAN INVESTMENTS
OCCUPATIONAL HEALTH AND SAFETY
SALE OF LANDS
FAMILY COURT JUDGES
OCCUPATIONAL HEALTH AND SAFETY
REPORTS BY COMMITTEES
STANDING COMMITTEE ON GENERAL GOVERNMENT
STANDING COMMITTEE ON SOCIAL DEVELOPMENT
INTRODUCTION OF BILLS
ARCHITECTS AMENDMENT ACT
RESIDENTIAL RENT REGULATION AMENDMENT ACT
EQUALITY RIGHTS STATUTE LAW AMENDMENT AMENDMENT ACT
ORDERS OF THE DAY
MINING TAX AMENDMENT ACT
MINING TAX AMENDMENT ACT
The House met at 1:34 p.m.
CANADA-FRANCE FISHING AGREEMENT
Mr. Barlow: On Saturday afternoon, I attended a rally at the Cambridge Newfoundland Club and received this petition, which I have with me today. It is being forwarded to the government of Canada by Leave Our Fish Alone. LOFA is a group of former maritimers who support Premier Brian Peckford's position on the interim fishing agreement Ottawa signed with France. The petition reads:
"Whereas the federal Conservative government has unilaterally granted France permission to fish within Newfoundland's and Canada's territorial boundaries without consultation or agreement from the Newfoundland government; and
"Whereas this decision will result in economic hardship and high unemployment to Newfoundland fishermen and undermine Canada's sovereignty;
"Be it resolved that we, the undersigned, oppose this decision that threatens the livelihood of all maritime fishermen and we demand an immediate reversal of this agreement with France, and further, to enter into negotiations with the Newfoundland government for a mutual resolvement of this problem."
I would like the Premier (Mr. Peterson) to be aware of LOFA's sentiments, carrying them to the provincial Premiers' meeting tonight. I believe our federal government negotiated what it thought was the best deal for both Newfoundland and Canada, but we must send a clear message that the provinces must be consulted on issues as vital as fishing for cod is to Newfoundland.
NATIVE FISHING AGREEMENT
Mr. Wildman: As the discussion of the possible ramifications of the negotiation of an Indian fishing agreement continues in the northwest, I would like to read into the record part of a quote from William Auld, an 18th-century Hudson's Bay factor, when he was writing back to the company in London asking for better treatment of the Indian people. Mr. Auld said:
"At the judgement seat of heaven...your honours as well as ourselves must deliver in the accounts of our government. There, distinctions of colour cease and it will avail but little if we transgress the rights of our coppered Indians to satiate rapacious tradesmen of a fairer hue."
I would hope that all members of this House take those words into account in determining how they react to some of the comments that have been made about the possible effects of an Indian fishing agreement on the relationship between the Indian people and the white people of northern Ontario.
It is important that we recognize the rights of our Indian brothers and that we negotiate fair and equitable comanagement of our natural resources so that we have proper conservation of fish and game throughout the north and across Ontario.
TABLING OF INFORMATION
Mr. McLean: I have in my hand two responses from two ministries from which I have requested information. One is from the Ministry of Transportation and Communications and the other is from Management Board of Cabinet.
Last May, I requested the Minister of Transportation and Communications (Mr. Fulton) to provide me with the names of the members and their staff who have cars assigned to them, plus the names and positions held by the other staff who have the use of government vehicles. Recently, I received a report that this would not be available to me until the end of the month, February 27, 1987, to be exact -- eight and a half months to dig out the list of vehicles that the government operates and who operates them.
Last May, I asked the Premier (Mr. Peterson) to provide an accounting of the taxpayers' costs for the cabinet meetings that had been held in Windsor, Kingston and Niagara-on-the-Lake last year. I did receive a partial answer last June and was promised the balance by mid-July 1986. Recently, I learned it would not be provided to me until January 21, 1987. I have still not received anything.
I cannot believe that information such as I have been requesting is not readily available on the Legislature's computers or otherwise. It could be provided quite easily. I believe the information is probably easily available, but that for some reason someone is trying to hide it. What happened to the promises by the Premier of an open and free exchange of information in this government?
Mrs. Grier: Later today, I will be presenting a petition signed by more than 1,000 employees of Goodyear Canada whose plant on Lake Shore Boulevard in my riding will close on May 31, 1987.
Members will recall that this House thought the announcement of the closure of Goodyear was important enough to justify an emergency debate last November. Since that time, the government has taken no action either to implement legislation that will protect workers who face similar shutdowns or to assist the workers of Goodyear.
The petition I intend to present today is specifically concerned with Bill 170, An Act to revise the Pension Benefits Act. The petition requests the government to pass Bill 170 quickly. What many of the petitioners did not realize when they signed the petition was that one section of Bill 170, which greatly affects their situation, is section 75 and section 75 is not retroactive. It is therefore imperative for the wellbeing of these longtime Goodyear employees that the bill be passed prior to May 31, 1987, or that section 75 be made retroactive.
We in the New Democratic Party will do our part to ensure swift consideration of this legislation in committee during the coming recess. We will be moving amendments that will make the bill a true reform of the Pension Benefits Act. We call on the government to support these amendments and to make sure the legislation is given third reading early in April. The workers of this province have been waiting a long time for pension reform. For the workers at Goodyear, time is running out.
Mr. Offer: I would like to inform the House that over the weekend the Mariasin family emigrated to this province and this country from the Soviet Union. Lea Mariasin is a 61-year-old woman who is currently ailing from cancer. Her husband, Alexander, is 62 years of age and her daughter, Faina, is 33. They arrived in this country on Friday after being refused this privilege for 13 years. Lea Mariasin is currently undergoing cancer treatment at the Toronto General Hospital. The family comes from Riga, Latvia, where Mr. Mariasin was a Second World War veteran and had been thought of by the Soviet government as being the holder of certain secrets.
There have been efforts by so many people, not only in this province but indeed throughout this country, who have implored the Soviet Union to take the action to allow the release of the Mariasin family and to allow Lea Mariasin the treatment she so desperately requires. I would like to commend all and everyone who has had a part in those efforts. For that, we should be very proud.
Mr. Shymko: I would like to address a matter of urgent and pressing need in relation to the future of the Runnymede Hospital for chronic care in my riding. It is well known that the present facility, which was a former public school building, is at the top of the list as one of the worst possible sites for a hospital in Canada. It is a true miracle that the board of directors and the staff of the hospital have managed to maintain the level of operation and care over the past number of years in spite of these terrible conditions.
In the light of the joint agreement recently signed by the Runnymede Hospital and Northwestern General Hospital dated January 30, a copy of which was sent to the Minister of Health (Mr. Elston), I would like to urge the minister and the government to meet with the board of directors of the Runnymede Hospital prior to making any decision on its future and to discuss the proposed relocation to the Northwestern site.
As the minister knows, the board agreed, after thorough consideration of many alternatives and suggestions since 1968, that the only option it would support was relocation and expansion as an autonomous hospital, as previously submitted and outlined in the joint proposal with Northwestern General. I am pleased that the minister assured me last week in the House that no arbitrary decision will be made by him prior to meeting with the board and deciding the future of the Runnymede Hospital. The board has taken serious exception upon hearing that the hospital could be relocated to the West Park site by a ministry directive with no prior meeting and discussions.
Mr. Warner: I raise the frustrating case of Angela Browne, a disabled student who has been attempting to mount the barriers that have been placed by this government preventing her from receiving student assistance so that she may attend Brock University. In particular, there is a line here from a letter from the government indicating that she and her mother and a third party have to reveal to the government the nature of the disagreement between her and her mother before they will consider giving her money. It is an inappropriate way to assist students and I think she deserves better treatment.
Mr. Rae: Mr. Speaker, I wonder if I could have the unanimous consent of the House to pay tribute to Davidson Dunton, who passed away over the weekend.
Mr. Rae: Ontario lost one of its most distinguished citizens on Saturday, though I am sure he would not have wanted to be considered simply a citizen of Ontario but, indeed, a citizen of Canada and the world.
Davidson Dunton had a remarkable public career. He worked for a number of newspapers before the Second World War. He was the director of the Wartime Information Board during the Second World War. He went on to become the head of the Canadian Broadcasting Corp. and, indeed, presided over the advancement of the CBC into the world of television. In 1958 he became the president of Carleton University and presided over the expansion of that great university. In 1963 he was named the co-chairman of the Royal Commission on Bilingualism and Biculturalism. He also was head of the Ontario Press Council and, I am sure, came into contact with a great many members in all the jobs and extraordinary work he did.
I think it can be said that he paved the way for a broader recognition in Canada of the importance of our bilingual and bicultural heritage. He was a constant, I think it would be fair to say friendly, critic both of the media and of politicians with respect to their public obligation. He was a very outstanding educator, and he continued on, after his retirement as president of the university, to serve first as the director of the Institute of Canadian Studies and subsequently as a fellow.
I have described something of the public life of Davidson Dunton, but I cannot rise in my place and not say something of the man himself. I must confess that I speak with some real personal emotion. Davey Dunton was my godfather. He was one of my family's closest friends and he lived his life in a house across the street from where I grew up. He was a remarkably kind, thoughtful, warm and inspiring individual.
He was a man who combined tremendous gentleness with a great deal of courage and insight into the affairs and life of this country. He was a deeply committed Canadian who knew, cared about and loved Canadian art, Canadian artists, Canadian writers and Canadian life. He was deeply committed as well to the quality of our public life.
He was an extraordinary man, and it is in that sense that I wanted to pay tribute to him this afternoon.
Hon. Mr. Sorbara: If I may, on behalf of the government and the people of Ontario, I simply want to echo the words, sentiments and views expressed by the member for York South (Mr. Rae). Ontario and Canada, as he said, have suffered a great, great loss. Davidson Dunton contributed greatly to the fabric of life not only in Ontario but also right across this country.
I might point out that Mr. Dunton was president of Carleton University from 1958 until 1972. In fact, although he was the fourth president and without lessening the contributions of the presidents who preceded him, he is in many ways considered to be the father of Carleton University. When he took office as president in 1958, Carleton University was made up of one building in downtown Ottawa and had a faculty of under 100 members. By the time he finished his work of really creating a truly outstanding institution, Carleton University was located, with its multifaculty and multidisciplinary facilities, in suburban Ottawa with a faculty of some 620 and had become one of the truly outstanding institutions in the province.
I have been asked by the current president of Carleton University to express publicly in the House their great sorrow.
I have one interesting note to point out. Notwithstanding that Mr. Dunton studied in many institutions around the world, he never received a university degree, although he received several honorary degrees. Those honours were most appropriate. I understand he used to kid everyone about the fact he had never actually graduated from a university.
He has done great service to this country. One great historian said that nations are formed by the remembrance of great deeds done together. Mr. Dunton is one of those individuals who have helped us along with those great deeds.
Mr. McFadden: In observing the death of Davidson Dunton today, we mourn the passing of a remarkable Canadian. He was a newsman, a distinguished public servant, an educator, a respected university administrator and a royal commissioner, just to name a number of the notable roles he played in Canadian society. He served as chairman of the board of governors of the CBC, made an outstanding contribution to education in eastern Ontario as president of Carleton University, was co-chairman of the Royal Commission on Bilingualism and Biculturalism and, latterly, served as the first chairman of the Ontario Press Council.
To have held any one of these positions would be, for most people, a great achievement of an entire lifetime. To have held all these positions was a very rare achievement indeed. He served with distinction in these roles as well as in various other activities during his very long and very full life.
We mourn the passing of this great Canadian. We can, however, be thankful for his life and for the contribution he made to the betterment of our society.
Mr. Speaker: When Hansard is printed, I will, on behalf of the House, forward a copy of your words of sympathy to the family of the late Mr. Dunton.
Hon. Mr. Scott: I wonder if I could ask for the unanimous consent of the House to make a statement about legislative counsel.
Mr. Speaker: Is there unanimous consent?
Hon. Mr. Scott: I wish to advise the members of the House with very considerable regret that our senior legislative counsel, Arthur Stone, has chosen to take his retirement from the public service on April 1, before we meet again. All members will be delighted to hear he will take with him into his well-deserved retirement his Queen's Counsel patent.
All members of the House, new and old, have come to know and appreciate the talents of Art Stone as a drafter of legislation, but many of us perhaps do not know much about his background and some of his other abilities. I would like to touch briefly on some of them. Art Stone was born in Renfrew county, a county that has made significant contribution to the House as it is, into a family of Scots ancestry and tradition. He took up the bagpipes at an early age. When his family moved to Toronto when he was a young boy, he started a pipe band at Lawrence Park Collegiate Institute.
It was as a piper that he entered the army in the Second World War, though he was only 20 years old. He received an officer's commission during that service and went overseas to take part in the D-Day invasion of Normandy. He was wounded in action but rejoined his battalion for the crossing of the Rhine.
After the war, he returned home to study law and to marry his wife, now of 36 years, whom I will introduce shortly and who is here today in the Speaker's gallery, as she has been on many other legislative occasions. The Stones have raised four children and have three grandchildren.
At some point, no doubt when he had leisure time -- it is hard to believe he ever had any -- Art Stone took up painting, like a distinguished occupant of the office I have the honour to hold. I hear Art Stone is considerably better at it than his excellency the honourable Roy McMurtry and painted for a number of years with the late Arthur Shilling.
Mr. Ashe: Is that a Liberal point of view?
Hon. Mr. Scott: No. It is an entirely artistic point of view.
Art practiced law in St. Catharines for four years before joining the staff of legislative counsel, which consisted then of only three lawyers, in 1955. After serving as registrar of regulations, he succeeded to the office of senior legislative counsel in 1976. In his 31 years as a professional drafter of statutes, Art Stone has achieved a reputation across Canada and internationally as a master of his craft. He is known for his ability to assemble a complex set of ideas into a clear, logical legislative framework of provisions that are expressed lucidly and elegantly, or at least as lucidly and elegantly as the policy decision permits.
He is also known for his talent in assembling around him a skilled group of professionals, who make our legislative counsel's office the envy of the rest of Canada. A modest man, a retiring man, who has never received the credit that is his due for the works he has created, Arthur has presided over great changes in the writing of our laws. He moved us from the letter press, when he came in, to the computer. He initiated translation of key acts into the French language, established an elegant way of drafting, using nonsexist language, and paved the way for introduction of bilingual bills as required.
Some of his best-known products include the Human Rights Code, the Health Disciplines Act, the Health Insurance Act, the Family Law Reform Act, the Succession Law Reform Act and the Courts of Justice Act. Nationally, he is known as the leader of the Uniform Law Conference of Canada, many of whose recent projects bear his fine hand.
Arthur understands and appreciates the legislative process better than most and has always shown a great deal of respect for the members of this House and the process of debate in the House and in committee. Members of all parties have come to rely on his wisdom, judgement and experience in all matters concerning the making and writing of our laws. I know from my colleague the Treasurer (Mr. Nixon) that this extends to opposition members as well as government members.
We will all miss Arthur Stone. We salute him and his achievements as he is about to take his retirement. We wish him and Mrs. Stone many happy and healthy years of recreational pastimes, such as painting and so on, and the company of his family and friends.
I would ask Mrs. Stone, who is, as usual, in that gallery, and Mr. Stone, who is, as usual, slightly behind the Speaker's chair, to stand and acknowledge the appreciation of the House.
Mr. Andrewes: I rise to speak on behalf of our party, to associate myself with the comments of the Attorney General (Mr. Scott) with respect to the retirement of Mr. Stone and with some of the comments the Attorney General has made with respect to Mr. Stone's background.
I make these remarks as one member of this assembly who is not a member of the legal fraternity, and this perhaps make the remarks somewhat more objectively in terms of my view of the importance of legislative counsel. I notice, as well, that a number of the rest of the staff of legislative counsel's office are in the members' gallery. I think that is indicative of the stage our legislative cycle has reached, in which we must be fairly near the end of the session.
Lest my geography with respect to the assembly suggest there might be some bias, in that Mr. Stone and the counsel of the legislative counsel's office both reside in the Whitney Block, as well as myself, I want to assure members that my comments are unbiased and not premeditated by any means.
Members, particularly private members, often find themselves proceeding with some haste to enshrine in legislation the righteous indignation that they have realized and found necessary to express. They fail to realize often that this righteous indignation does take the form of a law, or may take the form of a law which finds its way, for better or for worse for posterity, often before the scrutiny of the courts, whose interpretation of that law can vary from its original intent, so it is necessary that these preparations be complete.
Mr. Stone is an excellent example of the sort of patient and pleasant approach the legislative counsel's office, in my experience, has taken with members, a patient and pleasant approach that is tempered by the need often to be firm.
Arthur Stone, of course, has been performing his silent heroics here in the Legislative Assembly through the intricate detail of what we see as our laws. In saying thank you to Mr. Stone, I want to indicate that here is a man who has approached his job with dignity and responsibility. This perhaps comes about as a result of having spent the early part of his career in St. Catharines, which is a well-known bastion of esteemed and competent legal practitioners.
Mr. Stone has provided us with an excellent example, and certainly an excellent example for his successor. We wish him well, good health and happiness as he takes his leave to pursue whatever, and no doubt pursue it with increasing excellence.
Mr. McClellan: On behalf of my colleagues in the New Democratic Party, I want to echo the sentiments expressed by the previous two speakers and to add our own sincere best wishes to Mr. and Mrs. Stone as they enter a life of retirement.
The Attorney General -- I guess of necessity, because he has not experienced the joys of opposition as yet, I am sure those joys will come to him soon enough -- did not speak about the particular role Arthur Stone has played to back-bench members of the assembly. I want to dwell on that for just a moment.
Mr. Stone has established a professional service that enjoys the absolute trust and confidence of all members of the assembly, whether they are in government, on the Treasury benches or on the back benches. I can say of Mr. Stone and of the staff in his office, as can be said, quite frankly, of relatively few other institutions in the public service, that members from all parties and from all sides of the House, front bench and back bench, have been able to approach his office with an absolute assurance of integrity, of professional competence and of absolute respect for confidence and confidentiality. There has never been the slightest shade of a whisper of anything other than absolute trust in the services offered by Mr. Stone. I say, on behalf of all of those who have served in opposition, a particular thanks for that accomplishment.
I am sure his successor will ensure and maintain the same standards of nonpartisanship and trust that we have come to take for granted. We say again to Mr. Stone, "Thank you for your years of service and best wishes for health and happiness in your years of retirement."
REDIRECTION OF QUESTIONS
Mr. Speaker: This may be the appropriate time for me to refer to what took place in this House last Thursday. During last Thursday's question period, confusion seemed to have arisen as to our practice with regard to the right of ministers to refer or redirect questions to other ministers who, in their view, are in a better position to provide answers to the questions asked.
In the first instance, a question was asked by the Leader of the Opposition (Mr. Grossman) of the Premier (Mr. Peterson), who gave an answer. When the Leader of the Opposition asked a supplementary question of the Premier, he chose to redirect it to the Minister of Community and Social Services (Mr. Sweeney). This was objected to, and I agreed to check our practice.
Having done so, it appears to me very clear that redirecting a supplementary question is an accepted practice in this chamber and it seems to me to be well within the bounds of the logic which guides our question period. The right to redirect belongs to the minister and not to the questioner. This has been borne out in reviewing Speaker Turner's rulings from 1981 to 1984.
In the second instance, the member for Scarborough West (Mr. R. F. Johnston) asked a question of the Premier, who redirected it to the Minister of Community and Social Services. After the minister's response, the member for Scarborough West attempted to direct his supplementary to the Premier. When that was not allowed by the chair, points of order arose.
Again, I must say that our practice is very clear, in that a supplementary can be asked only of the minister who has just answered, because supplementary questions always flow from the nature of the answer given. Furthermore, if standing order 29(f) has any application in this context, it would tend to confirm our practice in that the right to redirect belongs to the minister and not to the member asking the question.
I hope that clarifies it for members of the assembly.
IMMIGRANT WOMEN'S CENTRE
Ms. Fish: I have a question this afternoon of the minister responsible for women's issues. The minister will be aware that in about a month the Immigrant Women's Centre will be forced to close the door on its mobile health van as a result of inadequate funding. Can he tell us today why this government has refused since last spring their request to fund the mobile van?
Hon. Mr. Scott: I cannot respond to that, but I will look into it and be in touch with the House or the member very promptly.
Ms. Fish: I hope the minister's memory would be refreshed rather quickly, since he was prepared to engage in this discussion at estimates, notably to the fact that the officials of the Ontario women's directorate have been attempting to prevail upon the Minister of Health (Mr. Elston) to provide funding for this centre. The minister has now indicated that he will not fund the centre but is demanding that its representatives come forward to a meeting tomorrow.
If this government will fund the centre, will the minister tell us that today? If this government will not, will he tell us why it is necessary to have a meeting?
Hon. Mr. Scott: The member refers to a meeting that will be held with the Minister of Health. I will be glad to look into the matter and report to her and to the House.
Ms. Fish: I am amazed that the minister responsible for women's issues, who made much vaunted announcements last spring about services to immigrant and minority women, and noted particularly some of the health initiatives to immigrant and minority women, has failed to inform himself in this matter and is failing to provide adequate information to the House.
The request is for $50,000. With the $919 million in windfall revenue the Treasurer (Mr. Nixon), who sits to his immediate right has received this year, can the minister tell us again why he continues to refuse to fund the van?
Hon. Mr. Scott: If the member was really interested in the answer to the question, she would have given me notice 15 or 20 minutes ago and I would have had the answer for her.
SELF-GOVERNMENT FOR NATIVE PEOPLE
Mr. Sterling: I would like to ask a question of the Attorney General and minister responsible for native affairs. Will the Attorney General --
Mr. Sterling: We cannot keep that bench over there quiet either.
Will the Attorney General explain to the Legislative Assembly the position his government will be taking in the upcoming constitutional conference on aboriginal rights with regard to self-government for our native people?
Hon. Mr. Scott: On Thursday or Friday last, I had occasion, with the honourable the Leader of the Opposition (Mr. Grossman) and the honourable the leader of the third party, to attend the Aboriginal Summit and to describe the position the government of Ontario will be taking and has taken in the matter of self-government for aboriginal people.
I made the point in the presence of the Leader of the Opposition, and he accepted it, that it is the policy, essentially a bipartisan policy that all parties in this Legislature have adhered to, and particularly, our policy is founded on the policy of the late government headed by the former Premier, the member for Muskoka (Mr. F. S. Miller).
The policy, essentially, is this: the contest for a constitutional amendment is between an amendment which acknowledges what is called an inherent right to self-government and an amendment which recognizes a constitutionally guaranteed right to self-government as negotiated in agreements.
The native people of Canada, or at least one organization representing them, favour the first. No government in Canada has supported the first. The first allows entrenchment and permits the courts, if there are no agreements, to decide what the institutions of self-government will be. The second permits the aboriginal associations and the governments of Canada to negotiate the forms of self-government.
Virtually every government in Canada, including this one, supports the second proposition. My point to the aboriginal association is that it is critical to get the support of seven governments and the federal government before any amendment can be obtained.
Mr. Shymko: I want to clarify that this party and this side support inherent rights, not the contingent position of the minister.
I would like to ask the minister: in the light of last week's Aboriginal Summit, which I attended with the leader of our party, can the minister explain the insulting, patronizing arrogance of a statement he made, namely, saying to the aboriginal people, "You may have to accept half a loaf or nothing at the first ministers' conference"? Short of using Marie Antoinette's famous putdown, "Let them eat cake," can he explain that?
Hon. Mr. Scott: The honourable member either does not know what he is talking about or is separating himself from his party. Inherent right, as the native people understand that, was opposed by Premier Davis; was opposed by the former Premier, the member for Muskoka; is opposed by every leader in Canada, with the possible exception of Premier Pawley, who is in doubt on the issue; and was opposed as recently as last Thursday or Friday by the Leader of the Opposition, who said he adhered to the position of the Miller government and favoured, as we do, an entrenched constitutional amendment respecting self-government, to be negotiated in agreements following the constitutional amendments.
I take it that the member is alone in his party, as there was no applause for his question, and that the balance of the party proposes to support the view of the Miller government, which has been substantially adopted by this government.
My point about taking half a loaf was simply this: we are one month away from this last constitutional conference under the Constitution. There is no government that favours the constitutional amendment advanced by the Assembly of First Nations. In order to get any constitutional amendment, you have to have the support of the federal government and seven provincial governments. I said to the AFN, "If you persist in seeking an entrenched inherent right, there is a real risk you will not be able to obtain the adherence of enough governments in the month that remains."
I therefore encouraged them -- I did not dictate; they are masters in their own house in this sense -- to look again at the issue, so that a constitutional amendment protecting self-government could be obtained.
Mr. Shymko: The minister continually distorts facts and tries to speak on behalf of this party. The Miller government's position was that we would not sign any amendment or any agreement unless --
Mr. Speaker: Order.
Mr. Shymko: I want to clarify my supplementary.
Mr. Speaker: Do you have a supplementary?
Mr. Shymko: I have my final supplementary. The position of the former Premier, the member for Muskoka, at the last first ministers' conference was the following: we would not accept any amendment or any entrenchment of rights that would be opposed by the aboriginal peoples of Ontario. That was our position, and our position is inherent rights.
The minister has not answered my question about taking half a loaf or nothing, which is a patronizing insult. Why has he not to this day met with the representative of the aboriginal peoples of Ontario? He may not meet with us, but not meeting with them is unacceptable and deplorable as far as we are concerned.
Hon. Mr. Scott: That is a lot of rhetoric. I have met with the native people at four ministers' conferences, I have met with them last Friday, I have met with them privately in my office on a number of occasions and I have met with them in the cabinet committee for native affairs. I have also made arrangements to meet with them again between today and the next ministers' conference in about a month. So I have met with them and will continue to do so.
The member is quite wrong if he says his party has traditionally supported inherent rights as a constitutional amendment. The former Premier, the member for Muskoka, never did that. I would be interested to see whether, in fact, that is the position of the Conservative opposition, because my friend the honourable Leader of the Opposition, who was notably silent, took exactly the opposite position at the Aboriginal Summit last week.
The member for High Park-Swansea does not know what he is talking about on that issue.
SOUTH AFRICAN INVESTMENTS
Mr. Rae: I have a question to the Premier about South Africa. I wonder whether he can explain why in the legislation that was tabled on Thursday by the Attorney General (Mr. Scott) the option followed was the weakest possible option with respect to the issue of pension fund investment.
The Premier will be aware that last August the officials from the government of Ontario who were on, for example, the so-called HOOPP fund, the hospitals of Ontario pension plan fund, abstained on the critical question of divestment within a year when requested to take that position by the trade unions that were also represented on the investment committee.
Can the Premier explain why we still have only a voluntary divestment policy from the province with respect to public funds, with respect to public pension plans? If the government is so committed to doing something about South Africa, why did it choose the weakest possible action even as described in the wording of its own cabinet document?
Hon. Mr. Peterson: I will refer that matter to the Attorney General.
Hon. Mr. Scott: I would not concede that the action the government proposes in its bill is the weakest of the various options. The reality is that the trustees of a pension fund who wish to make a statement about the South African government and its policies are now effectively precluded from doing so because economic considerations are all that can be taken into account in deciding to divest. We want to give them the opportunity to make that statement freely by divesting.
On the other hand, we do not think it right to compel them to divest because to do so would mean that thousands, perhaps dozens of thousands, of pensioners would have their pensions reduced by the decision to divest, which almost invariably costs money --
Hon. Mr. Scott: Before he says it is nonsense, if the honourable member would look at New Jersey and California, where divestment is compulsory, he would find that millions and millions are lost on account of divestment, and that is considering only transfer fees. Do not look at the value of the shares; look only at transfer fees. That cost, of course, comes directly out of the pension that is paid to the beneficiary under the pension trust. What we tried to do in Ontario was to select a middle course that permitted this action to be taken by a free board of trustees but did not compel it unnecessarily on pension beneficiaries.
Mr. Rae: The Attorney General knows perfectly well that in a defined-benefit plan, there is no way that would take place. For him to suggest that is thoroughly irresponsible and amounts to the worst kind of scaremongering. It is a tactic and an argument that was never contained in the cabinet document that made the recommendations or contained the various options that could have been made by cabinet. I am quite astounded that the Attorney General would choose to use that kind of scaremongering tactic when he knows it is thoroughly irresponsible. He must know that.
Mr. Speaker: The question is?
Mr. Rae: I would like to ask a supplementary of the Premier, who I would have thought would have been interested in this subject, or if he is not prepared to answer the question, of the Attorney General. I do not know whether the Attorney General now has carriage of this issue as well as all the other issues.
When the cabinet was presented with three options regarding Massey-Ferguson, to divest the holdings in Varity -- that is to say, Massey-Ferguson -- to support the Taskforce on the Churches and Corporate Responsibility and vote in favour of divestment of South African holdings, or to take no action, can the Attorney General explain why the cabinet recommendation was to take no action and do nothing with respect to Massey-Ferguson and the question of divestment?
Hon. Mr. Scott: In my respectful view, the honourable member is not accurate. Not all pension plans and pension benefits are defined-benefit plans. The point I make is that if you have compulsory divestment, as you do in New Jersey and California, for example, experience shows that compulsory divestment leads to very substantial loss to the pension trust if you consider only the cost of the divestment act itself. It was our determination as a government that while that cost might be borne, it should be borne when a decision had been made by the trustees to act, supported, in so far as it could be obtained, by the consent of the beneficiaries of the trust, and that this loss should not be imposed on the trustees or the beneficiaries by a government that simply sought to make a moral statement at the expense of somebody else.
Mr. Rae: I did not hear an answer to my second question. Obviously, the Attorney General does not have an answer to that question so he chose to answer something I did not ask. It is not a tactic he invented but it is one of which he is a fine practitioner.
I would like to ask the Attorney General this, since again he seems to be the minister with carriage on this issue, one in which the Premier has apparently abandoned interest: with respect to government procurement, a number of options were presented in the cabinet document of September. Can the Attorney General explain why the provincial government is still doing less than the federal government with respect to procurement? There are still fewer guidelines laid down. In fact, we can say there is still no policy in Ontario with respect to doing business with companies that have majority shareholders or shares in South Africa. Why is there still no official government of Ontario policy with respect to procurement?
Hon. Mr. Scott: There is such a policy; it was announced in the statement I read on first reading. It is true that one part of our policy, looked at in isolation, may be perceived to be a middle course or not the strongest possible stand, taken by itself, but I challenge the leader of the third party with this: when you take the package of policies that this government has selected to deal with South Africa, there is no government in Canada that has shown more aggressive leadership on that subject than the government of Ontario under this Premier.
Mr. Speaker: New question, the member for York South.
Mr. Rae: Not everyone applauded that statement. All I can say is that it is a load of hooey. It is just not true.
Mr. Gillies: Make him withdraw "hooey."
Hon. Mr. Scott: Look it up in Roget's Thesaurus.
Mr. Gillies: Bruno Gerussi wouldn't say that.
Mr. Speaker: Order. The member for York South has a question to which minister?
OCCUPATIONAL HEALTH AND SAFETY
Mr. Rae: Speaking of hooey, I have a question of the Minister of Labour.
The latest report of the Advisory Council on Occupational Health and Occupational Safety -- which the minister suppressed for a great many months and which was finally released very quietly last week -- had some very devastating things to say about the operation of health and safety committees across the province. For example, it pointed out that in those work places that do have health and safety committees, 78 per cent do not comply with the act.
It went on to point out that in small places with fewer than 20 workers, where designated substances -- that is to say poisons -- are present, the percentage of work places with health and safety committees was only 66 per cent. In other words, one out of three of those work places does not even have a health and safety committee.
Given this and other facts that I will go into in my supplementaries, can the minister explain the very arrogant and dismissive view this government has taken of the private member's bill of my colleague the member for Sudbury East (Mr. Martel) and tell us why, if he really believes in the work of a minority parliament, he would not give this bill the kind of priority it deserves and see that it gets passed by the Legislature?
Hon. Mr. Wrye: First of all, I would not for one moment agree with the honourable gentleman that the advisory council's report was suppressed; it was made available to the Legislature just as soon as it was ready. I understand it was a little bit late and I apologize for that, but it was certainly made available. Indeed, a draft copy of some of the report's key material, which the member asked about, was made available to the member for Sudbury East months before the report was tabled.
I believe the legislation the honourable gentleman refers to is important inasmuch as it maintains the high level of public interest and heightens public interest in the whole area of occupational health and safety. Certainly, this government has not backed away from that very important and crucial issue.
However, I have some major differences, and the government has major differences, with what I would call the unnecessarily adversarial and sometimes confrontational approach taken in the tone of that legislation. We believe just as firmly as the leader of the third party in the critical importance of the health and safety committees and it is here that we believe the nature of the health and safety committees as proposed by the member for Sudbury East leaves something to be desired.
Mr. Rae: I can only say that if anything leaves something to be desired, it is the minister, his performance and indeed the lack of action on this critical issue of health and safety in the work place. That is what leaves something to be desired.
This report states, "The data suggest very strongly that ministry inspectors have more regular contacts with management members of joint health and safety committees than with worker members." That is the kind of approach the minister prefers. He describes as confrontational or adversarial anybody who would suggest something to the contrary.
Would the minister care to compare that quotation with this one from the now notorious McKenzie-Laskin report, which states, "There is evidence that the inspector's consultative role has a positive impact on committee activity and it should be supported"?
We are presented here with two different views of what is going on out there: a cosy-cosy, chummy-chummy relationship between management and the inspectorate in terms of health and safety, which is again confirmed by the advisory council's report; and McKenzie-Laskin, who think that is hunky-dory. Which view does the minister take?
Hon. Mr. Wrye: Let me say very clearly this government believes that at the appropriate time there can be a very useful consultative role for the inspectorate in terms of working with the committee, not just with management, not just with labour, but with the committee working jointly and not separately on dealing with the issues of health and safety in the work place.
I am sure the leader of the third party well knows my concern with the approach taken by the member for Sudbury East is that we are simply tipping the scale from the position the member for York South (Mr. Rae) has so often criticized as being unnecessarily tipped towards management, to a position where it is just as clearly tipped in the direction of labour.
It seems to me that in Bill 149 there is no kind of approach that would ask for or indeed demand that management play the full and necessary role it must play if we are going to have enhanced health and safety in the work place.
Mr. Rae: It is perfectly obvious to everybody in this House that the minister's cabinet colleagues and practically his entire caucus voted with their feet on Thursday. They were either not here or some of them were even standing in their place in supporting the legislation. They left the minister out to dry, which is exactly where he belongs.
The report, issued again fairly surreptitiously by the ministry last week, stated that unless real changes are made with respect to increasing the amount of communication and responsibility in the system, the joint health and safety committees can lead, "not to self-regulation, but rather self-deception."
Those are not the words of my colleague the member for Sudbury East and those are not my words. Those are the words of this report of the advisory council. Can the minister tell us why he and his cabinet colleagues refuse to do justice to the bill brought in by my colleague the member for Sudbury East when it is the only piece of legislation before this House that deals with the critical question of giving workers some control over the substances to which they are exposed and some access to the kind of power and influence they deserve? It is their health and safety at stake, not the minister's or anybody else's.
Hon. Mr. Wrye: The honourable member will be pleased and delighted to hear that the government has been working for some time now, and very intensively, on a package of amendments to the Occupational Health and Safety Act. I do mean a package. The act has been in place for some eight or nine years now and, for a number of months, we have been intensively reviewing the Occupational Health and Safety Act and necessary amendments thereto.
We have held discussions with a large number of business organizations, with a large number of individual labour unions and, of course, on a number of occasions, with the Ontario Federation of Labour. It seems to us that we should not be stampeded into bringing in those changes until we can --
Mr. Mackenzie: Oh, come off it.
Hon. Mr. Wrye: My friend the member for Hamilton East (Mr. Mackenzie), who would never worry about talking to any business organizations, scoffs at that.
We will bring in those legislative changes if and when we have completed our consultation and we are comfortable that we have addressed all the important measures that need to be addressed in the act.
Mr. Rae: On a point of order, Mr. Speaker: I feel the minister has said something that I have to deal with in terms of a letter I have just received. I have just received a note from Mr. Martel's staff indicating: "Mr. Wrye did not release any information to Elie. We received the report in a brown envelope. The only questions the minister has answered were those on the order paper, which --"
Mr. Speaker: Order. New question.
SALE OF LANDS
Mr. Partington: I have a question for the Minister of Municipal Affairs with regard to the now infamous Vaughan land sale. Given that Vaughan council this evening will be considering the servicing of the land that sparked the recent Ontario Provincial Police raids of the offices and homes of two Vaughan councillors, can the minister tell this House what advice he has provided to Vaughan council with respect to dealing with this matter tonight?
Hon. Mr. Grandmaître: I answered that question in the House last week, as did the Premier (Mr. Peterson). The land deal is still under investigation, as are some municipal staff and councillors in the Vaughan area. Until I receive a final report from the OPP, I cannot comment on the issue.
Mr. Partington: Once again, the minister was sitting on his back when the situation called for him to act. He sat on his hands until ratepayers in the town of Vaughan had to call in the OPP anti-racket squad and York Regional Police's intelligence squad. If the two councillors under investigation participate in the discussion of the land transaction at council tonight, will the minister provide financial support to the Vaughan ratepayers, so they might bring charges against the two councillors under the provisions of the Municipal Conflict of Interest Act?
Hon. Mr. Grandmaître: I do not know what the honourable member is referring to. I do not think he knows what he is talking about. He is fishing. He is driving a boat in a fishbowl. I remind the member and this House that until the final report from my ministry is completed and the OPP has finalized its investigation, I cannot comment.
Mr. Allen: I have a question of the Minister of Colleges and Universities. Two weeks ago the art program and art history department at McMaster University were threatened with closure, which was very narrowly averted. I spoke with the chairman of another department a little later. He said, "I supported the art department, but I know where the cuts are going to come -- probably in my department."
Last week the Ontario College of Art announced it was cutting 16 courses and, late in the week, I discovered that the writing labs at Scarborough College are being severely and drastically curtailed.
The minister recently told us that "funding for universities had turned a corner," to use his words. He also used the word "renewal" with respect to his new financing levels. If those words were appropriate for the minister to use, why are we continuing to see such a parade of cutbacks in the university and post-secondary system?
Hon. Mr. Sorbara: My friend seems to suggest that as a result of the increments in funding we have provided -- I should say will be providing, because that funding does not begin to be put into place until April 1 -- there shall never again be a program cut, removed or reshaped in our universities and colleges. That simply is not the case.
If my friend is suggesting that every time a program is threatened, it is appropriate to come to this House and plead with the minister not to cut it, our universities and colleges will simply carry on with every single program and not be able to be responsive to new priorities. There must be priorities set within both our universities and colleges. Sometimes that means certain programs have to be either cut back or done away with altogether. That is the organic process of growth within our institutions.
Mr. Allen: The minister knows that in spite of his explanation and that while there are adjustments needed, a much reduced and restrained system is not looking at this time at cutting whole departments simply because it is making internal adjustments. In fact, it is cutting them because resources are still constrained.
If the minister is not prepared to provide adequate money to run the system, will he not at least, as he indicated in his answer, provide the moneys in sufficient time that the universities, Ryerson Polytechnical Institute and the college of art can do their forward planning efficiently and over a sufficient period of time, more than a single year, which constrains them so badly in efficient delivery of the work they have to do?
Hon. Mr. Sorbara: That was precisely the premise upon which our announcement of last November 4 was made; that is, we were intending to increase substantially the basic funding levels for universities so that they would have a new plateau from which to begin.
My friend mentions the Ontario College of Art. If my friend read the entire report from the Ontario College of Art, he would know that the problems the president of the college noted were an historic problem of 10 years of cutbacks within the system, which resulted in some program terminations this year. He should also bring to the attention of the House the remarks of the president, who said this government has made valiant efforts to turn that situation around.
I have never said we have done everything that needs to be done, but we are on an entirely different course under our administration.
Mr. Brandt: I have a question of the Minister of Industry, Trade and Technology. He will be aware that when it was originally announced, the Premier's high-tech fund was to have had a budget of some $100 million annually over 10 years, for a total of $1 billion. The minister is also aware that on an annualized basis, that is about a $50-million increase each year over the budget allocated for that same activity by the previous government.
The minister might also be aware that as a result of some budget adjustments that have now been undertaken by the Treasurer (Mr. Nixon), even the $100 million has now been reduced to far below the $50 million that was allocated by the previous government and is now down to some $15 million for the high-tech fund for this year.
Would the minister share with this House how that $15 million is supposed to narrow the gap in technology between Ontario and other competitive jurisdictions like Japan and West Germany?
Hon. Mr. O'Neil: I do not believe that the member, who was the minister previously to our forming the government, would want us to proceed with a high-tech fund unless we had everything in place so that we could proceed in an orderly way. Over 400 letters have come in inquiring about the high-tech fund, and we are reviewing all of those letters.
Mr. Brandt: If I may borrow a phrase from my friend the leader of the third party, that is a load of hooey. I have to say that the high-tech fund requires more than just splashy news releases and fancy announcements by the government. The minister's $1-billion fund is quickly becoming a $1-billion bust, let me tell him. That is exactly what is happening.
When can we expect some benefit from this fund, which now seems to be mired in total inactivity on the part of his government?
Hon. Mr. O'Neil: I might refer back to the Board of Industrial Leadership and Development fund, which the previous government initiated. I think it took over two years before funds started to flow under BILD.
Let me tell the member that the BILD board and the members on it are very high-profile people, people very interested in technology, and they are working very hard. We will proceed, but we will proceed when we are ready.
Mr. Reville: My question is for the Minister of Housing. Later this afternoon I will be introducing a bill. The bill is designed to come to the rescue of thousands of tenants whom the minister has left in the lurch. These are the tenants who are being required to pay up to 30 per cent in rent increases over the next nine months because the minister has left them unprotected in his legislation. Is the minister prepared to embrace our notion of fairness and my bill?
Hon. Mr. Curling: I am trying to understand the honourable member's question. He is asking me to endorse a bill when I do not know what the contents are about. As long as it is progressive -- pardon the word -- in a way that will protect all tenants, of course I will give him support in that, but I do not know the contents of the bill.
Bill 51, which we brought in, brought all tenants under rent review, and that in itself is a very progressive bill.
Mr. Reville: The minister has had the bill in his possession since Friday. I gave it to his press secretary on Friday and I have spoken today with his executive assistant. The bill is indeed progressive, and the minister has indicated he will support a progressive bill. What it does simply --
Mr. Speaker, please be patient. I am about to tell the minister something important.
Mr. Speaker: It sounds more like a member's statement to me. You do have a supplementary?
Mr. Reville: Will the minister support a bill that means that anybody who is required to pay a rent increase in 1987 pays the guideline first until rent review decides, like every other tenant?
Hon. Mr. Curling: Let me say that the honourable member -- again, I have always mentioned this in the House -- is a very dedicated individual in regard to protecting tenants' rights.
The member is referring to section 73 of Bill 51, which addresses the concern of tenants who were not protected in the past, in the post-1975 buildings, who got increases over and above the guideline, who had to give 90 days' notice before 1986, and they were given, in some respects, above the 5.2 per cent guideline because they did not know what guideline would be in place.
All increases above the guideline must be justified before the board. The situation the honourable member is mentioning now is a one-time transitional situation that will not come about and that will be resolved after March 2. All the hearings will be heard by then.
Mr. Reville: Come on; that is not so.
Mr. Speaker: Order. Interjections are out of order.
Mr. Partington: My question is to the Minister of Municipal Affairs. Given that the Treasurer (Mr. Nixon) has extracted from the people of Ontario an additional $1 billion in taxes this year, which equates with an increase of almost 16 per cent in tax revenues, can the minister explain to this House why he was able to obtain only a 4.9 per cent increase in transfer payments for the local taxpayer in Ontario's municipalities?
Hon. Mr. Grandmaître: The member is misinforming the House.
Hon. Mr. Grandmaître: I did not say he was misleading, but he is using --
Mr. Speaker: You did not say he was deliberately misinforming?
Hon. Mr. Grandmaître: Never.
Mr. Speaker: I think we should be very careful with our language.
Hon. Mr. Grandmaître: I wanted to tell the member that it was not 4.9 per cent but up to six per cent in northern Ontario and five per cent in eastern Ontario. What the Treasurer tried to do was to provide low-growth municipalities or areas, such as northern and eastern Ontario, with more dollars. This is the first time in about 11 years the provincial government has recognized the need for more dollars to municipal governments, and this is the first time in, I think, 10 years that the transfer payments were higher than the inflation rate.
I think we have been generous, and we intend to do more not only for northern and eastern Ontario, but for 839 municipalities in this province.
Mr. Partington: The minister must also be careful with figures. The region of Waterloo got two per cent. The average is 4.9 per cent. How can the minister justify placing an additional financial burden on the local property taxpayers of this province when the Liberal government is holding back its $1-billion election slush fund from municipalities and when it is reducing the percentage of funds it is transferring to local school boards?
Hon. Mr. Grandmaître: As I said, we have done a lot with very little money. Imagine what we will be doing in the years to come.
Mr. Wildman: I have a question for the Minister of the Environment. On January 13, in answer to a question from me, the minister indicated that in the near future he would be announcing a decision with regard to designation of the proposed Magpie River project near Wawa. On further pressing, the minister indicated that "in the near future" might mean by the end of January. Can the minister tell us now what decision he has made with regard to designation of that project and end the uncertainty that is facing the community of Wawa in this regard?
Hon. Mr. Bradley: The member is right in identifying this as a matter of some interest to the people of Wawa and that district. I have indeed received representations from a variety of people on the subject, including a couple of steelworkers' locals, which have requested that I not designate this proposal under the Environmental Assessment Act, and of course, it is a private sector proposal. In fairness, there have been other people, particularly those who are interested in the tourist end of things, who have made representations from the opposite side.
The member will be aware, as I know he is intimately aware, the proponent in this case has moved generally along the same process as one would in proceeding under the Environmental Assessment Act. This has been helpful. It has provided an opportunity for us to see how the system can work and to determine if, in the final analysis, there is a need for specific designation under the act.
I know the impatience of the member. I think he is justified in expressing that impatience to the House and to the people in his area, and I hope to have an answer quite soon for him on this matter.
Mr. Wildman: That is just not good enough. We have had a number of questions raised in this House, and the minister says, "In the near future; soon."
Mr. Ashe: In the fullness of time.
Mr. Wildman: No, he has never come up with "the fullness of time." I do not think he believes in it.
I wonder if the minister could explain that the reason he has not been able to make a decision has less to do with the different positions taken by people in Wawa than it has to do with the different positions taken by his cabinet colleagues, namely, the Minister of Energy (Mr. Kerrio) and the Minister of Tourism and Recreation (Mr. Eakins). Will the minister explain when he intends, not "soon," but when he intends to make this decision? Will he give us some indication now so that when I attend the meeting tomorrow night in Wawa, I will be able to tell the people who are interested, and vitally interested, in this project when we can expect a decision -- not what might happen but when?
Hon. M r. Bradley: In answer to the member's question, particularly the first part of the question, the division that exists, the divided point of view, is far greater in the community itself and in that specific area certainly than it is over here.
I like to have input from a variety of sources. I can assure the member I have had input from a variety of sources on the other side of the House who have expressed points of view on this and from people one might not expect to hold certain opinions on these items as far as the community itself is concerned.
We want to take into account all the viewpoints that have been expressed before we come forward with a decision, but I want to reiterate to the member that I hope to have a decision in the near future.
FAMILY COURT JUDGES
Mr. Rowe: I have a question for the Attorney General, General Scott. Can the Attorney General tell the members of this House how many family court judges he has appointed since June 1985?
Hon. Mr. Scott: My answer to Lieutenant Rowe is that I think I have appointed two, but I am not quite certain. I will have to inquire.
Mr. Rowe: I want to tell the Attorney General that his failure to carry out his responsibilities as the chief law officer of the crown has resulted in a tremendous backlog in the family court in Barrie. Given that the citizens of the province are entitled to a speedy trial under the law, can the minister tell me when he plans to appoint a new judge to the court in Barrie?
Hon. Mr. Scott: First of all, it is important to note that I have filled every vacancy there is in the Barrie area. The retirement of His Honour Judge Morton from the family court there, much regretted, led to his replacement with Judge Gammel, who came from Owen Sound and is now assigned to Barrie. There is a backlog in Barrie, but there is no numerical justification so far for expanding the court at Barrie, which is what the member requests.
However, I am going to Barrie tomorrow to speak to the bar. I intend to get their views on the matter. There is a natural desire to have the court expanded, but we are proposing not to make expansions beyond the normal complement of the court until the Zuber commission inquiry report is at hand.
OCCUPATIONAL HEALTH AND SAFETY
Mr. Mackenzie: I have a question of the Minister of Labour. I know the minister is fond of saying he does not want to rush into any matters that might affect workers, but can I ask him where the application of the steering committee of the Hamilton region of the occupational health and safety committee, headed up by Local 1005 of the Hamilton and District Labour Council and supported by the Ontario Federation of Labour, for a workers' health and safety clinic in the Hamilton area now stands?
We made the application with detailed information, as the minister is well aware, on July 5, 1985. There have been numerous inquiries since. Is it his responsibility or is it that of the Minister of Health (Mr. Elston) -- we seem to get different answers -- and can he give us some idea when we can expect some answers on the funding of this clinic?
Hon. Mr. Wrye: I believe the honourable member asked the question of the Minister of Health when I was away with my recent surgery. I noted the question at the time and checked on my return. Discussions, I believe, were still under way at that point between officials of the Ministry of Health and the Ministry of Labour.
Mr. Mackenzie: I wonder whether the minister can tell us clearly who is responsible. Because of the difficulties, the president of Local 1005 contacted the minister's office at the end of August, almost six months ago, and was told a meeting would be arranged immediately or very quickly between the ministry and the Ministry of Health. Until three weeks ago, they had heard back nothing in spite of that commitment by one of the minister's senior staff. Can the minister tell us who is responsible and when we are going to hear some answers on this clinic?
Hon. Mr. Wrye: I am aware of this. It is a very important matter to the community and to Local 1005. As I said to the honourable gentleman, there have been discussions between the two ministries on a number of occasions. I am aware of the concern of Mr. Silenzi in this matter. I will certainly give an undertaking to the honourable gentleman to look into it personally and report back to him and to ensure that if Mr. Silenzi has not been brought up to date on the latest changes, he is brought up to date immediately.
Mr. Gillies: I have a question for the Minister of Labour. The minister was quoted recently as saying that it was his intention in the near future to improve the law and regulations surrounding domestics in this province but that this would be pending the report of the minister's Task Force on Hours of Work and Overtime. I wonder whether the minister can tell the House when he anticipates that report coming in.
Hon. Mr. Wrye: The Donner task force has been working very hard, I believe for the last year, since its appointment. The last word I heard was that they expect to report some time this spring; I believe it will be the earlier part of the spring, in April or very early May. I should add while I am on my feet that when last we spoke with Mr. Donner, they had completed their hearings. They had had hearings throughout the province. They had heard from a large number of business and labour groups. This task force, which as the honourable gentleman will know is made up of Mr. Donner plus two business representatives and two trade union representatives, is likely to come forward with a report that will represent a consensus approach and I find that very encouraging.
Mr. Gillies: Will the minister confirm to the House that he recently extended the mandate of the task force from this month, February, through to September? In view of this, can the minister assure the House that before the end of the next session we will see a package of reforms for domestics in this province and that we will not see them drifting off into September, October, or in fact into next year.
Hon. Mr. Wrye: I want to clarify for the honourable gentleman that the task force itself requested of the ministry that its mandate be expanded somewhat and that it do additional work that originally it had not intended to do in its general look at hours of work and overtime. We felt the work of the task force had been very comprehensive thus far. We felt that if we were reviewing all aspects, even these additional aspects which move into certain areas that are unregulated or lack specific regulation as of yet, this group, with the kind of breadth of knowledge it had, was certainly the right group to undertake this proposal.
The honourable gentleman leaves the impression that there will be no report from Mr. Donner and his group until September. That is wrong; that impression is incorrect. I expect Mr. Donner and his group to report on what I might call phase 1, which is the original mandate they had, this spring. Mr. Donner and his group intend to give us a further report on an additional mandate they have requested --
Mr. McClellan: Phase 1; that is real reform. I cannot tell you how fantastic that is.
Mr. Rae: What phase are you in?
Hon. Mr. Wrye: Perhaps that is not important to --
Mr. Speaker: Order. Interjections are out of order and should not be responded to.
M. Pouliot: J'aurais une question pour le ministre de l'Energie.
The minister will be aware that with the recent 5.2 per cent increase in Hydro rates in northern Ontario -- I am talking here about an average -- the rural rate for small communities in the north is now some 15 per cent higher than the city rate. The northern rate is 20 per cent higher than the southern Ontario rate. People in northern Ontario are paying anywhere from 20 per cent to 35 per cent more for electricity than people in the sister provinces of Manitoba and Quebec. It is truly a deterrent to progress. It is getting very difficult to survive. What are the minister's plans to lessen the impact of the high cost of electricity in northern Ontario?
Hon. Mr. Kerrio: A couple of comments have to be made relating to the question about the rates in Manitoba and Quebec. When we talk about rates across Canada, it is a given that, because of their great increments of hydraulic power, their rates are cheaper in Quebec and Manitoba than in Ontario. Taking that as a given, it has been of course the long-standing position of governments to be able to deliver power across Ontario in as equitable a way as possible. The fact is, this government has now taken into account the situation in northern Ontario. We are going to have a northern committee examining power rates in northern Ontario. A number of implications have to be examined before we can take the kind of initiative I feel confident is of concern to the member.
Mr. Pouliot: Given the fact we are over capacity -- we have more energy than is needed at present -- this kind of answer is nothing short of a monumental fraud on the people of the north. What specific plans does the minister have to use Ontario Hydro as a tool of economic development in northern Ontario?
Hon. Mr. Kerrio: When we talk about the generation of power in this province, it is not a matter of having the kind of capacity -- I think today's capacity charts show that we have available to us approximately 1,500 megawatts. In fact, we are taking power from Manitoba and Quebec at a rate of about 2,000 megawatts, and are trading about the same which is going out in the southern areas; so there is not available at all times the kind of capacity the member speaks of.
The other thing is that the generating capacity within Ontario -- taking into account that generally one third is nuclear, one third is thermal and one third is hydraulic -- cannot easily be channelled in a way that there is not a big increase in costs. The fact is there have been arguments for many moons about how we are going to feed those plants.
Mr. Pouliot: What are your plans?
Hon. Mr. Kerrio: The plans are that in keeping with our northern initiatives -- the member can belittle what this government is doing, but there has been a great deal done for northern Ontario that has never been done before -- we intend to include the use of electric power as a resource tool for northern Ontario.
Mr. Sterling: I have a question for the Minister of the Environment. According to the Department of National Health and Welfare, radon gas seeping into homes built in uranium-rich areas causes five per cent of the lung cancer deaths in Canada per year. They estimate there are 8,000 homes where the radon level is above a safe level. Is the minister aware of the extent of this problem, and what is he doing to assist Ontarians in detecting the presence of this dangerous gas in their homes?
Hon. Mr. Bradley: I think the member raises an issue which has received some attention on an international basis as well as here, particularly lately. We work in conjunction, for instance, with the Ministry of Labour, and particularly with the Ministry of Health, in attempting to evaluate the degree of risk that individuals may have from even background amounts, as they are referred to, of radon gas.
In addition, we work with federal authorities, through the Department of National Health and Welfare and Environment Canada, to ensure that where there are any problems of significant magnitude, they are addressed in an appropriate fashion. One area where we see it is not so much in normal homes, but in the Elliot Lake area where there is uranium mining. Radon tends to be a problem there. That is why we have an interministerial committee that deals with matters of that kind.
I am pleased the member has raised this issue. I will be pleased to get further information for him subsequent to this.
Mr. Sterling: Perhaps I can add some information. The minister may be aware that the Ottawa-Carleton area tends to show especially high readings of radon gas since it sits on a uranium-rich rock formation. A Canadian company, Thomson and Nielsen Electronics Ltd. of Kanata, has developed a radon sniffer designed specifically for house monitoring. These units cost about $2,000 each and are too expensive for an individual to buy to do his own test. Would the minister consider immediately supplying a radon sniffer to each municipality, so each municipality could work together with its own people to test for this very dangerous gas?
Hon. Mr. Bradley: My staff probably have this, but perhaps the member would provide me with the name of the specific company involved.
I certainly agree with him it would be extremely difficult for individuals to purchase something at a cost of $2,000, but there seems to be some sense, particularly in the municipalities where it is anticipated there would be a problem with radon gas, that we should have those municipalities do some testing in co-operation with our ministry or the Ministry of Health or the Ministry of Labour.
The member identifies an area and he knows that is somewhat of a natural background. We expect it in places such as Elliot Lake and Blind River where there have been uranium finds. As the member appropriately points out, however, there are other areas that have these background levels. If he would provide me with all the details, the name, address, postal code and telephone number of the company, I will be happy to look into it.
Mrs. Grier: As I indicated in statements at the outset of today's sitting, I have a petition signed by 1,000 employees of Goodyear Canada Inc., which reads as follows:
"To the Honourable the Lieutenant Governor and the Legislative Assembly of Ontario:
"We, the undersigned, beg leave to petition the parliament of Ontario as follows:
"We are proposing that Bill 170, now at its second reading, be given immediate passage, as the impact of the provisions in this bill will provide important pension benefits to our families."
Mr. Speaker: I found it very difficult to hear what was contained in that petition.
REPORTS BY COMMITTEES
STANDING COMMITTEE ON GENERAL GOVERNMENT
Mr. McCague from the standing committee on general government reported the following resolutions:
That supply in the following amounts and to defray the expenses of the Ministry of Natural Resources be granted to Her Majesty for the fiscal year ending March 31, 1987:
Ministry administration program, $47,709,400; lands and waters program, $107,345,700; outdoor recreation program, $68,071,600; resource products program, $145,722,300; resource experience program, $5,266,400.
That supply in the following supplementary amounts and to defray the expenses of the Ministry of Natural Resources be granted to Her Majesty for the fiscal year ending March 31, 1987:
Lands and waters program, $12,000,000; lands and waters program, $7,760,000; outdoor recreation program, $7,100,000; resource products program, $6,200,000; resource products program, $3,000,000.
Mr. Speaker: There are many private conversations taking place. They may be necessary, but it is very difficult to hear anything else.
STANDING COMMITTEE ON SOCIAL DEVELOPMENT
Mr. R. F. Johnston from the standing committee on social development reported the following resolutions:
That supply in the following amounts and to defray the expenses of the Ministry of Education be granted to Her Majesty for the fiscal year ending March 31, 1987:
Ministry administration program, $34,050,400; education program, $2,111,681,000; services to education program, $1,555,300;
And that supply in the following supplementary amounts and to defray the expenses of the Ministry of Education be granted to Her Majesty for the fiscal year ending March 31, 1987:
Education program, $2,300,000; education program, $181,785,000.
INTRODUCTION OF BILLS
ARCHITECTS AMENDMENT ACT
Hon. Mr. Scott moved first reading of Bill 197, An Act to amend the Architects Act.
Motion agreed to.
Hon. Mr. Scott: Very briefly, the purpose of this bill is to deal with the fact that under the present Architects Act every member of the profession has to have insurance. It is not possible for many members of the profession to obtain insurance because insurers are unwilling to insure those who are young, those in individual practices or those who lack experience.
As a result, the architects have come forward with a scheme of self-insurance which they have asked us to permit them to implement in view of the insurance requirements that the act stipulates. As the alternative is to either disentitle a significant proportion of the architects in the province from practicing their profession or to ensure that they practice without any insurance whatever, I am happy to recommend to the assembly this solution to a current practical problem.
RESIDENTIAL RENT REGULATION AMENDMENT ACT
Mr. Reville moved first reading of Bill 198, An Act to amend the Residential Rent Regulation Act.
Motion agreed to.
Mr. Reville: This is a very simple bill that has one operative clause that is very progressive. It ensures that every tenant who gets a rent increase notice in 1987 is treated the same in that the tenant pays the guideline until the rent review system generates a different number.
EQUALITY RIGHTS STATUTE LAW AMENDMENT AMENDMENT ACT
Hon. Mr. Scott moved first reading of Bill 199, An Act to amend the Equality Rights Statute Law Amendment Act.
Motion agreed to.
Hon. Mr. Scott: Last December, as part of Bill 7, an amendment to the Mental Health Act was passed. The implementation date, however, was deferred until April 1 of this year. The deferred amendment removed the authority of a psychiatric review board to order psychiatric treatment when a competent involuntary patient had refused consent or when the nearest relative of an incompetent involuntary patient had refused.
Today I am introducing an amendment to extend the implementation date of the deferred amendment from April 1, 1987, to June 1, 1987. This extension is now necessary because more time is required for a full debate on Bill 190, the bill to restore review board authority, which has been introduced by my colleague the Minister of Health (Mr. Elston).
I ask for the support and co-operation of all members in ensuring the speedy passage of this amendment.
ORDERS OF THE DAY
MINING TAX AMENDMENT ACT
Hon. Mr. Nixon moved second reading of Bill 189, An Act to amend the Mining Tax Act.
Hon. Mr. Nixon: This bill contains amendments to implement the mining tax reform proposals outlined in the budget of October 24, 1985. The amendments will simplify the mining tax system and streamline the administrative provisions of the act.
To achieve simplification, the bill contains the following reform elements. It replaces the present multiple rate tax bracket structure with a single tax rate of 20 per cent applicable to all profit levels in excess of a basic level of exemption. It doubles the basic profit exemption level from $250,000 to $500,000 and thus reduces the tax burden for most mining operators. It establishes the operator, rather than the mine, as the fundamental unit of liability for tax. Mining profits from an operator's interest in one or more joint ventures or partnerships will be taxable.
It simplifies and clarifies the computation of taxable mining profits under the act by providing computational rules end definitions as necessary. Duplication and inconsistencies between the act and the regulations will be eliminated. It adds certainty to the computation of the tax and administration of the act by removing certain discretionary powers of the mine assessor. As a result, taxable mining profits will be objectively determined by rules within the act instead of appraisals by the mine assessor.
To streamline the act, the administrative provisions of the Corporations Tax Act will be adopted for matters related to assessment, objections and appeals, collections, sanctions and powers pertaining to investigation. Specifically, this will be done by issuing initial assessments of operator returns at the time the returns are received, rather than after completion of audits; increasing the time frame for issuing reassessments from four years to six years from the date of initial assessment; increasing the time period for objecting to an assessment from 30 days to 180 days from the date of assessment -- an objection will be valid despite nonpayment of the assessment -- applying garnishment and other common procedures, where appropriate, to collect unpaid tax; and removing broad automatic lien provisions presently contained in the act.
As stated in the budget of October 24, 1985, this reform legislation is to take effect for the taxation years ending after March 31, 1986, and reflects the consultative input and general support of the mining industry. In that connection, I want to express my personal thanks to T. Patrick Reid, who is the administrator of the Ontario Mining Association and has given of his valuable time from his very heavy schedule to see that the officials of the Ministry of Revenue and the Treasury were kept informed of the views of the mining community.
Naturally, we would take his recommendations with many others. We feel the consultative process, which has been a bit longer than I had hoped and expected, has been complete enough to gather the support of all the thoughtful and interested members, not only from northern Ontario but also across the province, where revenues from this resource are so important.
While we look on this, of course, as a revenue bill, we also realize that the industry has to have a competitive stance vis-à-vis other provincial and state jurisdictions. We want to be sure, at the same time, that the crown in the right of Ontario is receiving its proper share of profits from the development of our mining resources.
We feel we have achieved a very nice balance in this connection, although not even I am prepared to say that this is perfection. It is quite possible that in the months and years that lie ahead there will be amendments that will improve the situation even further. In the years gone by, we have seen the revenues from our mining resources gradually reduced as world prices tumbled, and competition with other developments more readily brought into a state of production has changed our competitive stance.
I am glad to reports, particularly with the improvement in the world price of gold, that this and certain other aspects of mining, but mostly gold mining, have been tremendously productive and continue to be so. It is in this connection that we look forward to at least maintaining our revenues from mining and hopefully improving them as the development of our mining resources goes forward with the support of the members of this House and the government of the province.
Mr. Foulds: I have two questions for the minister. First, in his statement he indicates that he hopes to maintain the revenues from the mining industry --
Hon. Mr. Nixon: An increase.
Mr. Foulds: An increase: is that because the production at Hemlo is going to be substantially more and therefore very rich rather than because of the tax measures the Treasurer has taken, which, in my view, lower the revenue he would otherwise get?
Second, he indicated that he had consulted widely with people other than the Ontario Mining Association and its executive director, Patrick Reid, about this tax and where it should go. Can he tell me what other consultations with what groups and what their input was in developing the legislation?
Hon. Mr. Nixon: The amendments are designed to be revenue neutral, so that if the revenue increases it is because of increased mining activity.
The consultation has resulted in briefs from a variety of sources. Off the top of my head, I can think of a couple of investment houses that have prepared briefs that were submitted to me and, I would say, probably six or eight specifically well-drafted and considered briefs from organizations that deal with the mining community but are not the mining community -- mostly investment houses and banks. I believe also the accountants gave me the benefit of their views.
Mr. McCague: With regard to the amendments of the Treasurer and Minister of Revenue, in general we will be supporting the bill, but we will be introducing certain amendments as we get into consideration in committee of the whole.
The Treasurer has said that this has been quite a long time coming. I guess that goes back into the years, but I presume he was referring to a long time coming since his budget.
We have all talked to Mr. Reid in the past few weeks. He must have got up the speed on it very quickly because, according to my colleague the member for Kenora (Mr. Bernier), he was moving very slowly on it as late as three weeks ago.
I understand the dilemma the Minister of Revenue may have, because I find it difficult to understand the bill in totality. Especially being a member from the southern part of Ontario, I am not as familiar as some with the whole mining picture.
I note the Treasurer takes quite a bit of comfort from the fact the exemption is being doubled from what it was previously. I understand the Ontario Mining Association supports the bill in principle, although it points out that, unfortunately, there are some who will have extra burdens because of this bill. When the Treasurer makes his remarks later, I would like to know who will be affected. I am not sure of that.
I presume the bill is well-conceived; I am not so sure all his tax measures as they apply to mining were well-conceived. I refer him to the tax on the gold coins. I wonder what the relevant sales of the gold coin are now that the Americans have introduced the golden eagle coin and it is being sold here. He might comment on that particular subject.
The mining association will point out to the Treasurer that over the past five years it has paid about $236 million in mining tax. They are disturbed not only about that amount of money but also about the increase in the cost of doing business. The Workers' Compensation Board in that same period has increased by 66 per cent; unemployment insurance benefits by 178 per cent; Canada pension plan by 79 per cent; hydro -- the Treasurer has a little control over this one -- by 58 per cent and natural gas by 78 per cent.
With those increases and the amount of money they are paying, the Treasurer can understand they would have some concern about this 20 per cent raise. As I understand it, it is the highest rate in Canada. I would have hoped -- and I will later introduce an amendment to reflect this -- the Treasurer would have at least put the mining companies in Ontario in a competitive position.
With the $500,000 exemption, it may be that some companies will not be paying more than would be the case in other provinces. However, I understand -- and if I am wrong, I will be corrected -- that we will be the highest if this bill passes. I hope the Treasurer would consider an amendment which would bring that down to reflect the realities in other provinces.
As I said, we will have amendments to this bill. I think the Treasurer is well aware of the areas, subsection 3(1) of the bill dealing with subsection 3(1) of the Mining Tax Act. We will introduce those at a later time, along with some changes to clause 3(7)(f) of the Mining Tax Act. I would like to thank the staff of the Ministry of Revenue for agreeing to draft those amendments when it looked as if we were going to be dealing with this bill earlier last week. Time was very short and notice was almost nil.
Perhaps the Treasurer will at some point answer the couple of questions I brought forward. Again, I indicate we will be supporting it. The mining association is quite anxious that this proceed, but it does point out that some companies will be affected adversely.
Hon. Mr. Nixon: It might be appropriate if I just answer a couple of the questions or comments made by the honourable member. He refers to the sale of gold coins, and he is correct that the sale has gone down. There are those who might be subjective enough to say that is because the retail sales tax of seven per cent was applied. It probably was correct. However, we should not associate that with a decrease in the sale of gold. Whatever amount of gold we can produce in our mines -- and that amount is growing very rapidly -- is sold at the fluctuating world price and right now, thank God, it is at a substantial profit.
The fact that the sales tax was placed on the gold coins, I still say, was the appropriate thing to do. It has nothing whatsoever to do with the utilization of Ontario's gold, which has a ready market throughout the world.
Mr. Harris: I am delighted to support the comments of my colleague the member for Dufferin-Simcoe (Mr. McCague). I think he was quite correct in pointing out -- and I do not think he did imply the sale of gold was down with the imposition of the sales tax -- that the sale of the Maple Leaf gold coin is down. It was pointed out to the Treasurer at the time, when he insisted and stubbornly went through with this proposal that affected our industry in Ontario.
Hon. Mr. Nixon: It was supported by the House.
Mr. Harris: It was not supported by this party, with the greatest respect.
What bothered us most at that time -- and time has now proven us to have been correct -- was that it was not a significant amount of revenue. I do not think it was the Treasurer's penchant for greedy revenue-grabbing, which is well known in many other areas, that prompted the attack. What really bothered us was that we are kowtowing to South Africa. The impetus and direction for that tax was because South Africa was objecting. When South Africa, of all countries, starts to dictate our taxation policies here in Ontario, that is cause for concern. That was one of the major concerns I had and one of the major concerns I expressed at that time.
Mr. Foulds: I have a question for the previous main speaker, the member for Dufferin-Simcoe. Does he feel that the taxation policy, as it affects the mining industry, actually encourages or discourages either exploration or the mining of the resource? The reason I ask that question is simply this: it seems to me that one has to explore and mine for a resource where that resource is. The determining factor is the geology of the province, not a marginal increase or decrease in taxation. Therefore, the purpose of taxation in this case should be revenue or economic rent from a resource that basically belongs to all the people of the province. I wonder if the member can comment on that.
The Deputy Speaker: You have a two-minute right of reply.
Mr. McCague: In fairness, I raised the issue of the gold coin in terms of this: that all the Treasurer's budget initiatives were not well conceived. That is a little different. I was not talking about the effect on sales. As we all know, the proportion of Canadian or Ontario gold sold in the world has gone down as a percentage and the only way the mines have been able to keep competitive is with great amounts of money spent on all kinds of improvements: technology, robotics, etc. They have kept competitive in that respect.
I know the point the member for Port Arthur (Mr. Foulds)is attempting to raise. Certainly, one has to explore where one knows there are deposits. I do not think there would be much use in doing it in Brant-Oxford-Norfolk, or in Dufferin-Simcoe either. However, any sums of money that are spent in exploration, improved efficiency and environmental controls are to the benefit of all of us, and I believe that if that money were left with them they would do just that sort of thing. I think there are lots of things for them to do with their money.
As members know, our leader has recommended no mining tax. That would be a great incentive to an industry that, even though it is doing quite well compared to 1982, is still having a great deal of trouble in the world scene.
Mr. Foulds: I rise to speak on second reading of this bill and I do so with a sense of some anger and frustration. Let me say, first of all, what I am not angry and frustrated about. I am not angry or frustrated about the briefings I received from Treasury officials. Considering the time we had available to us, on Friday the Ministry of Revenue people and today the Treasury people have given me and our party as complete information as possible. It may not be adequate in terms of some of the philosophical concerns I have about the bill, but I do not fault them for their efforts in trying to get us information and getting it to us in order to be ready for the debate today.
However, I do not think the House itself, the government or the people of Ontario understand the importance of a bill such as this, because it is a bill that deals not merely with housekeeping, not merely with streamlining procedures, not merely with making a more efficient collection possible, but with a number of fundamental tax questions.
When we in my party consider a tax bill, we ask two questions right off the bat. First, is the tax change or the tax bill itself fair? Second, what effect will such a bill have on general revenues; that is, the revenues to the province and to the people of the province? When we vote in favour of a taxation bill, the answer to the first question must be yes; that is, it must be fair. The answer to the second question is that the tax bill or tax change must not or should not adversely affect the revenues unless there is a good reason.
There is a third consideration we undertake when a tax bill is related to the resource industries. That third question is, does the tax or the tax change constitute a fair, economic rent to the people of Ontario, who are the owners of the resource?
Those are, in my view, the three touchstones which anybody considering a taxation matter must consider. I am afraid, although they have tried valiantly, that the fears I have raised with regard to this bill have not been allayed by the Treasurer's opening statement or by the briefings we received. That is why this party plans to vote against the bill on second reading and to vote against certain clauses in the bill.
Let us be fair at the outset. Some of the things that are accomplished by this bill are not all bad. We in this party applaud the changes that make the assessment, and especially the collection of taxes, fairer and more predictable. We agree with the shifting of the responsibility for collection from the Ministry of Natural Resources to the Ministry of Revenue.
It has been said that this bill, the system of taxation, is archaic; it was introduced in 1907 and had not been substantially changed until the days of John White, as Treasurer, in the early 1970s. That may be so and I understand that, but there are progressive ways in which one could increase the efficiency and the administration of the tax and still keep the one essential element that I saw as progressive in the old mining tax, and that is the graded scale, the percentage scale.
One of the things that disturbs us about this tax is that he has instituted a flat tax for what is generally thought of as a progressive tax regime, a graded tax scale dependent on profits. I know that this makes it administratively easier and that there are the arguments that we have closed off the loopholes they were able to claim previously, but surely if he were interested in developing this, he would have closed off the loopholes and maintained the graduated taxation level. I will get to the reasons for that in a few moments.
Second, I want the Treasurer to know that we agree with the introduction of the policy of the flow-through shares in the mining sector that is supported by the Association of Mining Municipalities of Ontario. I believe the provisions of the bill are such that there cannot be a double claim, that the claimant is identified and it can be restrice ted to the one claimant so that the individual investor or the operator can claim, but not both. We see no reason to doubt the judgement in this particular case.
However, I want to outline what I think is the most serious flaw in the Treasurer's position when it comes to mining and resource taxation and tax reform in the mining sector generally. It may not be within the particular scope of this bill but we are talking about the principle of mining tax and how and what it is used for. The Treasurer himself is very familiar with the problems of mining municipalities. Recently in this House, he made an announcement in which the government was giving a grant to the municipalities surrounding the gold fields at Hemlo.
An hon. member: Half an announcement.
Mr. Foulds: "Half an announcement," says my friend the member for Lake Nipigon (Mr. Pouliot), who knows that more intimately than I.
I put to the Treasurer that if this bill is being sold as tax reform, what we should do is get into tax reform in the mining sector, not merely in this bill but also in a series of areas and steps. As the Treasurer knows, and we use this as the most current and best example, the municipalities at Marathon, White River and Manitouwadge are not allowed any municipal taxation arising from the business done at Hemlo, but this is necessary because of the subsequent costs the municipalities face because of that development.
In other words, I believe it is time the minister who is both Treasurer and Minister of Revenue found a way so that those municipalities could tax the properties of the mining companies. Further, I believe it is important that they be allowed to tax the underground workings of a mine. The reason for that is simply to make it fair, because a mine is basically a factory below the ground and factories themselves have to pay taxes on a whole host of equipment and processes. It seems to me that the mining industry should face the same rules.
It also seems to me that there is an opportunity for the Treasurer to find a way to incorporate what are basically unorganized territories into the organization of the municipalities. In my view, we have to do it this way to get a fair taxation system because, if the municipalities are simply dependent on grants from the public Treasury, what that means is that the Treasury of the province is substituting to the municipalities revenue that is not being collected by anybody either at the municipal level or at the provincial level. In other words, the provincial level is not collecting municipal taxes from the mines or their underground workers, and I for one believe it is about time that we started looking at that in a serious way.
If I can just draw a parallel to another resource industry, we do not exempt the pulp and paper companies -- the Marathon pulp mill, for example -- from municipal taxation. It pays its full shot of industrial municipal taxation in that municipality, and it pays it not merely on the land and the property; because its building is above ground, it pays it at a fairly heavy rate. All I am asking for is a system for the mining industry that is parallel to that of the other resource industry, the pulp and paper industry.
I want to say that this is not entirely the fault of the current Treasurer. I know this whole problem of municipal taxation has been avoided by every single previous Treasurer in my tenure in this House, from Mr. White on down to the current leader of the Conservative Party.
Hon. Mr. Nixon: Were you here when Mr. White introduced the last Mining Tax Act?
Mr. Foulds: Yes; 1973, was it not? Later on in the remarks I get to a comment about the age of the Treasurer, the age of certain taxation laws and so on.
I think, therefore, there has been an enormous failure on the part of this Treasurer and the current ministry to address the problems of taxation and fairness in taxation for the mining municipalities of this province. The reason I raise this is that the Treasurer himself talks very frequently about reforming the taxation system, and I believe his intentions are genuine. I believe he genuinely prefers, like Tommy Douglas -- and it may be the only thing they have in common -- to get the money from where it is: those who can afford to pay. I think that is his philosophic framework.
However, he has introduced amendments to the Assessment Act twice and he is now introducing amendments to the Mining Tax Act, and he has not taken steps to deal with this particular problem of taxation for mining municipalities. I very much fear, therefore, that he will be constantly dealing in piecemeal, patchwork taxation measures that do not deal with or solve the problem.
I think it is also fair to say that, aside from the problem of the mining municipalities, in the current situation the determining factor on whether the mining industry is good in base metals, good in gold or good in whatever your commodity is, has relatively little to do with the taxation regime in a province.
As I indicated in my question to the member for Dufferin-Simcoe, I believe there are two determining factors in whether the mining industry is going or not. One is the international price of a commodity, and over that, we have relatively little control. There are some things we can do to tinker with it, but basically that is the one determining factor. The other is geology. You are not going to go exploring for gold in geological formations where gold has never appeared. You are not going to go exploring for gold, silver or zinc in the wheat fields of Saskatchewan.
The argument that our tax regime has to be the same as all the other provinces has some dubious quality about it. My information, brief though it is, is that when it comes to mining, the taxation system in British Columbia is substantially different from that of either Ontario or Quebec. Ontario's and Quebec's are pretty parallel, but British Columbia's is substantially different. Geologically, those are the three provinces that are competing for the same kind of mining business.
The one area that is bright in the mining sector is the Hemlo area. The production at Hemlo is going to be enormous and the revenues from Hemlo are going to be enormous. Hemlo is simply the richest gold field in the world, not in Canada, not in North America, but in the world. The production costs are in some cases about $100 an ounce and the selling price is about $354 right now, give or take whatever the latest fluctuation is. It could be as high as $400. That means the companies involved in the Hemlo gold fields are making about $300 an ounce.
The Deputy Speaker: I might remind members that they should not make comments, especially when they are out o f their seats.
Mr. Foulds: The member would be a worthy addition indeed to the front benches.
One of the things that troubles me about this bill is that in my estimation, it will mean there are forgone revenues from Hemlo. Under the old scale where we were taxing at 15 per cent, 20 per cent, 25 per cent or 30 per cent, Hemlo would be paying at the high end of the scale. Because the government has introduced a flat tax, they will be paying at 20 per cent. They will be paying much less than they would have under the old regime. We are forgoing one heck of a lot of revenue, not from the marginal mines but from the richest gold field in the world.
That gets me to another point. This bill appears to increase taxation on the marginal mines or operators. I know there is an argument that we are now moving to operator instead of mine, and because the exemption has been lifted, it is revenue neutral, which is a very nice phrase. It seems to me if you have an operator of four or five marginal mines, say in the Timmins area or northeastern Ontario, he will be paying more taxes, and the structure of the bill is such that his rate would go up from 15 per cent to 20 per cent.
The little guy or the marginal operator will be paying more taxes and the rich guy at Hemlo will be paying less. That seems to be administratively easy and convenient, but simply nuts when it comes to a fair taxation scheme. In my estimation, we will be forgoing revenues of approximately $20 million to $30 million. We may even be losing that amount in absolute terms. I know there is a blip on the increase of the mining tax because of the increased efficiency of the collection, but the other day in a briefing that our caucus had, Inco officials indicated that the mining industry paid, on average, about $50 million a year in mining taxes. That does not seem to me to be a heck of a lot, actually, but it is $50 million a year.
The best estimate I have heard is that this bill will get us about $25 million. All of that cannot be due to a downturn in the mining economy because the mining economy this year, last year and the previous year has been about the same. Nickel is a mess, but nickel was a mess last year. It would appear to me that the minister is forgoing revenues because he has changed to the flat scale and he is forgoing some revenue because he has changed from the mine to the operator.
I am not sure of this, but it could very well be that changing to the operator allows the mining sector a large hiding place in which to buy into and acquire unprofitable companies to use as tax dodges. The interesting thing to me is that, in the whole paper-chase economy that a lot of people have talked about, we have seen people gobbling up each other in the retail sector and in the manufacturing sector, but we have not seen that happen in the resource sector. It would appear to me that the changes that are coming in in this bill may very well start that phenomenon in the mining sector.
I think that is a bad thing, because if we are going to have investment, we should have the investments into new production, not into acquiring existing production. I have not heard any arguments put forward that this taxation measure actually encourages new production.
Before giving away a possible $20 million, $25 million or $30 million in forgone revenues, I would ask as Treasurer -- and I would certainly ask as a Treasury critic -- to whom I was giving it away and why. I would ask, do our taxes have to be the same as Quebec and British Columbia? Even if they are not, should they not be designed to benefit the people of Ontario?
I think there has been a tax giveaway here. Several weeks ago, I asked the Treasurer a question in relation to insurance companies that did not pay corporate income tax. I subsequently found out that they were so ill informed that they actually were paying income tax when they did not think they were.
Hon. Mr. Nixon: They pay a premium tax as well.
Mr. Foulds: They pay premium tax.
That is not unfair, because a single mother with two kids who pays personal income tax also pays Ontario health insurance plan premiums, which is a tax, and sales tax, which is a tax. There are all kinds of double taxation for the individual, for which there are no exemptions, claims and loopholes that the corporations are allowed. I am just a little tired of hearing corporations argue that they get double taxation and not looking at all of the sectors, such as individuals who pay double taxation.
We managed to do a little bit of research with regard to the production costs of Noranda, Teck-Corona and Lac Minerals at Hemlo. We also took the current estimated reserves in the Hemlo field. As the Treasurer knows, as the years progress, the estimated reserves in a mine tend to stay the same even though they have mined out, because they can see that much more ore down the road. We estimated that even if the cost of production of gold per ounce is $200 -- not the $100 that it is in some of the richer places but $200 per ounce on average -- and the net income is around $400 per ounce, we would be losing from the Hemlo fields alone somewhere around $500 million in revenue from this bill alone over the life of that mine. That does not seem to be a good thing.
If the Treasurer is so committed to getting this bill through the House because of his commitments to T. Patrick Reid and the Ontario Mining Association and others, and because it was part of his fall budget of 1985, and if he is so committed to making sure that it is in place and retroactive -- about which I have some other concerns and will get into when we get to clause-by-clause -- I ask him to consider seriously three things immediately for his coming budget in the spring with regard to this taxation.
One, in terms of the flat tax, I urge him to take a serious look at doing all the other reforms in this bill but reintroducing the graduated scale. Two, if his officials find that too difficult and the administration too difficult, he should look seriously at raising that flat tax rate from 20 per cent to about 22 per cent. Three, as a third option, because of the richness of Hemlo, I also ask him to consider very seriously taking a look at the possibility of devising a special five per cent public-smelter royalty on the production of gold bars that are site-specific to the richness of that mine. I estimate that if there were a five per cent public-smelter royalty on the gold bars produced from Hemlo ore, it would yield approximately $3 million annually once full production is reached.
I am asking the minister to do what we do in other taxation areas: look at where the revenue is justified and at those who can afford to pay. The marginal producers in northeastern Ontario cannot afford to pay a five per cent special smelter royalty, but the producers at Hemlo sure can. It may be something that both Treasury and Revenue could look at productively.
I would like to speak much longer on this bill, but I will wind up in the next 10 or 15 minutes. I want to say a couple of things.
Mr. Barlow: Do not rush.
Mr. Foulds: I do not intend to rush. This happens to be a fairly serious taxation matter. It disturbs me that we deal with taxation matters in a relatively ill-informed manner in this House. I do not say that in any pejorative sense; it is just the case. We deal with taxation matters that fundamentally affect our economy, and we deal with taxation matters that affect the revenue and therefore the wellbeing of the province in not a very productive and creative way. I am hoping that when I am gone from this place and even while I am in this place, the standing committee on finance and economic affairs will actually do some work along those lines.
I know members are busy with many other things, their own commitments to their own ridings, their own issues and the other committees, but when I see a bill of this importance in this Legislature it does sadden me somewhat that I look around and see very few of my colleagues prepared to give attention to this matter, very few having had the time to consider the matter carefully and, in a sense, our rushing through the bill. I do not intend to filibuster it; I do not intend to block its advance. I do intend to vote against it.
When I take a look at the people who made representations to the Treasurer, and he indicated them in response to my question, I see the vested interests -- and I do not use the word pejoratively either: the banking establishment, the mining establishment and the investment houses, what David Lewis called the corporate welfare bums. They may not be bums in every case but they are taking advantage of every tax break and every tax measure that they can get, and any advice that they can give will be advice that benefits them. As he more aptly said, they unfortunately speak with louder voices than the ordinary man and woman in our society.
When we pass a tax bill like this, I worry that we have apparently not had the representations of the mining municipalities of the province. We have not had the representations of the municipal councils of those mining municipalities that are or could be affected by the bill. We have not had representations from the United Steelworkers or any of the other labour organizations that may represent the miners in the industry.
I consider tax bills very important and the matter that they raise very important. I consider that the one element of even a mixed economy like ours where we could introduce fairness into taxation, into economic matters or into revenue, is taxation matters. We do not often do it and we are not doing it particularly with this bill, as far as I can see.
I have a couple of other suggestions that I would like to make with regard to the mining sector. If the House will bear with me for a moment, I will find my series of notes on that particular question.
As we all know, when it comes to mining taxation, one of the things that we all have to keep in mind and very seldom do, even though it is a cliché and a truism, is that the day the mine opens is also the first day in the death of that mine. In the case of the Sudbury basin we have been very lucky because that find has been not merely rich but extensive. We have been mining it for more than 60 years; it is still being mined and mined productively. The problem in the Sudbury basin and with nickel is not the ore body itself but the price of the international commodity.
The small mines -- and the history of Ontario's north is littered with them -- come and go fairly quickly. Shebandowan closed down after about 15 years. Depending on the market, it may reopen; it is a very rich vein -- it may be the richest vein in Canada -- but the economics are such, because of transportation and because of the smallness of it, that at this point it is not economic or profitable to mine in Inco's terms.
Gold mines have opened -- we have had boom and bust -- and closed. It would appear that Hemlo is rich. Everyone is happy about it. Everyone is overjoyed about it. But even there we can see that somewhere down the road it will no longer exist. From the historical evidence and from the evidence of this bill, it seems to me that mining will continue to be a boom-and-bust industry in our province. That means that mining, aside from the jobs that it provides, results in few long-term benefits for the northern economy.
This government is going to have to act as the agent of the people. If the government wants to bring the northern economy from a hinterland resource economy to a mature economy by acting as the agent of the people, it is going to have to have the courage of direct investment. It is going to have to have the courage to control capital and its investments and primarily, when it comes to taxation as a matter of policy, it is going to have to get a fair economic rent from its nonrenewable resources and it is going to have to use the money it gets from its nonrenewable resources to diversify northern Ontario's economy.
The people of northern Ontario, and today I am talking particularly about the people of mining communities, have invested their life savings, their spirit, their talent and their sweat in their homes and in their communities. They are entitled to more protection, more co-operation and more leadership than they have received from their governments in the past. They are entitled to it in the future and they are entitled to it at the present time.
It is fair to say that the major corporations, both in mining and other resource sectors, make their decisions not based on the welfare of the communities involved but on their shareholders. That is their job. That is the job of a corporation. All I am arguing is that there has to be a balance to that, and the only balance we can see for that in our present society is government. I am urging the Treasurer to pass on to his friend the Premier (Mr. Peterson), who is also the Minister of Northern Development and Mines, that they bring about two steps:
1. They genuinely do, in spite of all the Treasurer's reservations, develop the northern Ontario diversification fund. I will get back to that in a moment.
Hon. Mr. Nixon: Where did they get that name from?
Mr. Foulds: I gave it to it. If the Treasurer wants to call it the northern Ontario tomorrow fund, if he wants to call it the northern Ontario heritage fund or if he wants to call it the Harry Nixon memorial diversification for the north fund, I will accept it. Whatever name, I do not mind, but I think it is really important that that be based at least partially on the taxation of the resources; not a surtax, but a proportion of the taxes that are obtained from the natural resources of the area.
One of the things that worry me about this bill is that if we use the taxation from the resource industries as part of the base for our northern Ontario tomorrow development diversification fund, the base will be diminished, and therefore the percentage funnelled into the development heritage fund will be lessened.
2. Because the Treasurer is a very powerful man within the cabinet -- he shakes his head negatively but in fact he is, and I am sure he has the ear of the Premier in many matters -- I urge him and his colleagues to ensure that when it comes to resource-based communities, they accept a recommendation that not only was put forward by this party but also is used in many other parts of the world and was recommended by the Advisory Committee on Resource Dependent Communities in Northern Ontario, commonly known as the Rosehart report, that there be an agreement signed between the major employer, the trade union, the community and the provincial government about the planning of the industry and the growth and diversification of that community; not merely a social contract, but a more binding document than that.
The reason that would be an important and useful tool is that it would give all parties that are involved access to the information that is necessary to plan for employment. It would not only help the employers in getting the manpower -- I suppose I should say "personpower" -- for their operations, but it would also give the people who are involved an idea of where the development in their community is going. It would give them and the municipal politicians an idea of what their tax base is, not only now but also in the foreseeable future. There is no reason in the world we cannot do that in this day and age.
The tax we have before us has some merit. It does, it appears to me, improve the collection and the administration, but it does not deserve our support. It appears to give away $25 million to the industry, which we do not give to single moms with two kids who pay income tax. It appears to be unfair, in that it does away with the graduated scale, and it gets no more benefit in terms of job creation, exploration incentive or revenue for the people of the province. Therefore, I find myself opposed to the bill.
Hon. Mr. Nixon: I would like to say briefly that the honourable member's contribution to the debate, as usual, is stimulating and useful. I regret he has indicated that he and his colleagues will not be able to support the bill in principle.
I think he is being overly enthusiastic when he thinks the bill should solve the problems involved with assessment, municipal boundaries and general northern development. We might as well face the fact that this is essentially a revenue bill. In my opening comments on second reading, I acknowledged that and said that at the same time, we did not want it to be such a high-pressure revenue bill that the mining industry would be sapped of any incentives that are gradually returning as new finds are made and prices stop depreciating. I am not sure even that is true, as nickel and base-metal prices continue to sag.
The complaints that have come from the honourable member that we should be dealing with the concepts of the underground factory and providing adequate municipal support for Manitouwadge, White River and Marathon are interesting, but I cannot deal with them in this bill. Even the concept he ended up with, that there ought to be an agreement or an understanding among the developers, the government, labour unions and all others involved as to the future of the development of a significant find, what is the economic rent and what sort of support will be given on a social basis, is interesting but beyond the scope of this bill.
I return, however, to the instructions the officials were given by me on a policy matter; that is, that it be designed to be revenue-neutral. What is revenue-neutral when the discussions are evolving may not in fact be by the time it is passed, but the honourable member points out that these bills are always subject to amendment.
Mr. Foulds: I want to get angry. The Treasurer says it is not within the scope of this bill to solve the problems that I raise. When is it? How long do we have to wait for legislation to meet the problems that I raise? That is part of the Treasurer's responsibility. This is a budget bill. It is a year and a half late, but it is a budget bill. Even within the terms of the bill itself, it does not meet the expectations that one has a legitimate right to expect.
If it is to be revenue-neutral, and the picture has changed by the time he brings the bill in and it is no longer revenue-neutral, it seems to me one should bloody well withdraw it.
Not only is the bill not revenue-neutral but it also, in my view, encourages the big guys. If we want more exploration -- even Hemlo, which is now owned by the big guys, was not discovered by the big guys; it was discovered by medium and small guys -- there is nothing in this bill that encourages the medium and small guys.
I find the Treasurer's comments, although well intentioned, are basically off base. He has failed in his responsibilities as Treasurer in terms of his budgetary responsibilities, and he has failed with regard to this particular bill.
Mr. Bernier: I rise to participate in the debate on the amendments to the Mining Tax Act. As I sat here listening to the various members give forth with their great knowledge and great experience in this particular field, I could not help but think of the late James Renwick of the New Democratic Party and his ability to expound at great length about the Mining Tax Act and the implications it would have. He did it very eloquently. I doubt if there is a member in the House who is as able and as capable as the late Jim Renwick was to deal with these very complicated tax acts that we have before us today, and the Treasurer has admitted that.
He has admitted that, because, on the one hand, he said it would be a slight increase and then, on the other, he said it would be revenue-neutral. It is a little confusing, and I think it is confusing in some of our minds too. We are not tax experts, but we do have some feeling with respect to any increase to the mining tax.
I think the Treasurer will agree with me that the 20 per cent flat tax is an arbitrary figure. He could take it out of the air; there is no question about that. As my colleague has pointed out, it is the highest flat tax in Canada to date. I hope that in the course of the examination of this bill, he will accept the amendment of this party that would put us on a little better keel with the rest of the provinces in Canada.
I want to point out to the Treasurer, particularly as it relates to exploration, that exploration is where it all begins. We would not have a Hemlo, a Detour Lake or any of those mines in northern Ontario. When we think that there are something like 10,000 ore discoveries, or discoveries of some mineral indication, that 1,000 are re-examined as a potential and that possibly one out of 10,000 may come into the development stage, there is a tremendous amount of risk and gamble, and it starts at the exploration stage.
There has to be that incentive to which the Treasurer alluded to for a brief moment. There has to be that incentive because one spends so much time and effort that, at the end of the rainbow, one has to know that if one strikes it rich, one strikes it rich. That is the gamble and that is what we should always protect. It has been there for years, and I think it should be increased, because if you do not have that entrepreneurial spirit, that exploration desire, we will not get the mines that we have and should have in northern Ontario.
I am one of those who strongly believe there are many more yet to be discovered. We have seen Detour Lake; we have seen Hemlo. I think there is much more up there that can be discovered; so I say to the Treasurer to use everything in his power to encourage those prospectors and those mining companies, and the amendments my colleague will introduce will move in that direction and give the exploration people the little incentive that is really needed in the mining field.
The Treasurer touched on a couple of points with respect to gold mining. I would point out to him that in base metals I think he understands where we are coming from; we are at an all-time low. But I want to point out to him that we are active in the mining business in northern Ontario because of new techniques and new mining methods. Make no bones about it: When you look at the number of nickel producers in the world today compared to the number 20 or 30 years ago, it is astonishing what has happened out there, the competitiveness. The monopoly we had for so long is gone; there is just no question about it. But I think the Canadian mining industry is to be complimented for its moves in new, modern, mining technology, although it does reduce the amount of employment -- there is no question about that -- as we have seen happen in the Sudbury basin.
But I want to get on to the new mining technology and new mining methods. I would hope the Treasurer would assure us that in this bill, the assistance given by the mining companies today to those social amenities in communities like Marathon, Manitouwadge, Balmertown or Red Lake, where the mining company actually contributes to a curling rink, to a community hall, to other public recreational facilities, will be exempt. I think there is something in the bill which allows that to be exempt from taxation and as a write-off. It was a problem a few years ago. We tried to get the Treasurer of the day to make a few changes. I think the member for Muskoka (Mr. F. S. Miller) was the Treasurer at the time. I hope he will address that.
I want to follow up on the point that my colleague the member for Port Arthur made with respect to the assistance to the communities and point out what we are seeing across northern Ontario. I look at Ignace today; we tried some years ago to extend the municipal boundaries some 50 miles up the Pickle Lake road, for the township of Ignace to pick up the mining facilities at Mattabi.
The Ontario Municipal Board in its wisdom -- to which I objected strenuously and with which I disagreed -- did not allow Ignace to reach out and grab Mattabi Mines for taxes. We were in office at the time, and I expressed my displeasure with that particular decision. Nevertheless, it was made, but I think it is wrong. Mattabi, although there was a small ore body, had been operating there for 10 or 12 years. They see the end coming in the next two years or year and a half, where there would be no mining done at all in the Mattabi area.
It will leave Ignace, of course, dependent on forestry and tourism, as it was for so many years. I will admit that the mining company is being very responsible as a corporation by looking after the homes in Mattabi for a period of time. Nevertheless, I think that mine should have contributed much more than it did to the town of Ignace, which was its dormitory; its people worked there. When the company came around with a grant for the recreational facilities, there was a big media conference, all kinds of hype that Mattabi was donating $75,000 to the new recreation centre in Ignace. Then in the last breath it said, "Over a three-year period." Big deal: $25,000 a year for three years.
It is that kind of thing that has really caused the problem in northern Ontario. The municipalities in my opinion -- I think the member for Port Arthur has expressed it very well -- have not really got their share. I know the Treasurer has said already that this bill does not touch the municipal boundaries or the revenues they will get back, but let us look at the towns of Red Lake, Cochenour and Balmertown. In the last 50 years, over $500 million has come out of that mining camp in direct taxes to this province -- $500 million -- and last week we had the chairman of the Red Lake separate school board here on bended knee looking for $1-million-odd to build a new separate school in Red Lake.
It is hard to balance that when there is so much revenue coming to southern Ontario from the resources of northern Ontario and they have to come here cap in hand and beg for the basics of a modern community, the very simple basics. It is tough to explain to the people back home when they see all those taxation dollars flowing out of their area into what they think is southern Ontario and not coming back in a fair share.
I hope the Treasurer will look at that aspect. We have seen what happened at Ignace, Marathon, Manitouwadge and Hemlo, and what happened at Pickle Lake with respect to the Umex mine. All these communities had to be assisted directly, with no direct revenue and no real benefit -- nothing they could point to, to show that they have a modern community with all the amenities that are taken for granted in southern Ontario -- and there is a mine there that is spewing out millions of taxation dollars to the province as a whole.
I hope the minister will give careful consideration and support to the amendments my colleague will be introducing later today. I think they go in the right direction. They will assist the mining industry one step further, because we are in a very competitive world with regard to minerals. While we have to go in this direction, I think the route my leader has suggested -- that maybe the time has come to wipe out mining taxes totally and give a real boost to northern Ontario -- is one that should be examined very carefully by the Revenue people, because as the Treasurer admits, it is not a big revenue-bearing item and it would be an incentive for more exploration and more development of the mineral industry in northern Ontario.
Mr. Pouliot: The member for Kenora (Mr. Bernier) is so right. I remember very vividly, as if it were yesterday, when I was the reeve of our small township in Manitouwadge, that time and time again, after being granted the pleasure of an audience, I had the opportunity to go literally cap in hand to the member for Kenora, who was then a minister, to ask him that justice be done for the people of the north when we were faced with all that wealth. It is not a problem that arose yesterday. In fairness to the Treasurer, he has inherited a can of worms and a distortion of the highest order. It has been plaguing the north for years.
Take the situation of Hemlo; starting in the spring, Lac Minerals alone will receive $1 million per day. That is one of three mines; the largest, mind you, but one of three mines. In terms of essential services -- sewers and water, playgrounds, recreational facilities -- not five cents will go back to the municipality.
I have yet to meet one person so far who has not agreed that it is an injustice and that it should be rectified. The Treasurer, not with this present legislation but certainly when he passes or proposes the present amendments, has to keep in mind that we are not going to come back year after year cap in hand to ask for what is justly ours. Somewhere along the line a philosophy, an approach, a style that is different from what we have been experiencing, will become the order of the day so that the people of the north will finally stop begging and get some of the money that is theirs in the first place.
Hon. Mr. Nixon: I am going to make a comment about the speech of the member for Kenora. He points out correctly that the rate proposed here at 20 per cent, the flat rate, is the highest in Canada. He should also remember that our base has been substantially adjusted. We are very pleased to exempt the first half-million dollars of mining profit, which means that the small or beginning operators will have a chance to get established and put some money in the bank for payments and expansion before we hit them with the 20 per cent tax.
It is interesting that the spokesman for the Progressive Conservative opposition indicated that we are attempting to extract too much money from the mining economy, while the New Democratic Party believes that natural resources should be nationalized. They are shaking their heads. The last thing I want to do is stimulate a philosophical debate, but I have heard a lot of NDP and even CCF speeches here, and one of their basic tenets is nationalization of natural resources. I am delighted and interested -- not so delighted -- to see the major spokesmen from the north shake their heads, renounce that and reject it out of hand.
While the official opposition thinks we are taking too much money, the New Democratic opposition says we are not taking enough. I say to you, Mr. Speaker -- and I have a feeling you would agree with me if you could speak -- the Liberals have it just about right.
Mr. Foulds: In response to the member for Kenora's speech and the stimulating comments that have intervened, let me hasten to point out that one can hardly enter into a philosophical discussion in a two-minute time limit. However, let me make a number of points.
We in this party do believe in public ownership in a number of areas. We see nothing wrong with that in certain circumstances. For example, public ownership has worked remarkably effectively in one mining sector in Saskatchewan, the potash industry. It worked effectively in the pulp and paper industry in British Columbia. The government there was able to keep a pulp and paper mill in Ocean Falls and that whole town and its infrastructure going for a number of years at a marginal profit -- a profit nevertheless -- whereas the private sector would have abandoned that town and its jobs 15 years previously.
Let me point out that we do not back away from public ownership. We do not see it as a panacea for all areas at all times, but it has a legitimate place in a mixed economy.
Number two -- one can say a remarkable amount in two minutes -- I remember the member for Kenora pointing out the problems of Ignace, particularly because that mine was so far away from the community. Rightly, there was a planning decision made not to establish a new community. That is a problem this government will have to wrestle with. In this one instance, I agree with the member for Kenora. I regret that his government was not able to solve it. We have to make the mines part of the municipality that has to provide services for the people who work those mines.
Mr. Bernier: I appreciate the Treasurer's generosity in moving to the 20 per cent flat tax and decreasing the base level to $250,000. It is a step in the right direction. To be a little more magnanimous, the Treasurer should reduce that to 18 per cent, which would make it a major step forward.
I want to remind the member for Lake Nipigon (Mr. Pouliot) that he has a very short memory. I recall vividly his visits to my office when I was a member of the government and I recall assisting that community with a number of new and exciting projects we brought in right across northern Ontario.
An hon. member: The airport.
Mr. Bernier: The airport, the roads and a number of issues that are still there today.
I remind the member for Lake Nipigon that his problems really began about two years ago when the new administration took over. Albeit they had the Hemlo development on their doorstep, the problems of Manitouwadge and Marathon have not been answered to my satisfaction by this administration. I hope they will be.
I have a brief comment with respect to the Treasurer's off-the-cuff remark about a northern heritage fund.
Hon. Mr. Nixon: I have not mentioned it.
Mr. Bernier: Well, it has been in our press across northern Ontario that he whispered to somebody in the press gallery that this is what may be in the budget or that he is thinking about it.
I remind and alert the Treasurer to the fact that if that is in the back of his mind -- and I have said it publicly because I know my socialist friends have been pushing this for a number of years and I think there may be a need now that we have so many single-industry communities -- and we set up a northern Ontario heritage fund, let us not make the mistake of taxing the companies in the resource industries in northern Ontario for that heritage fund because it is going to put them right out of the competitiveness that they require with respect to world requirements.
Mr. Harris: I will not speak very long, but I do want to make a few comments and indicate that my two colleagues the member for Dufferin-Simcoe and the member for Kenora have outlined some of our party's concerns.
I want to say a couple of things. One, we have before us a bill that is retroactive to the year-end of 1986. Presumably, it is retroactive to 1985 for a large part of a company's operating time. I think that is abominable, if that is a fair word to use. The mining industry has been hanging for this period of time, waiting for this legislation to come forward.
Quite frankly, the bill is a little disappointing. It is not a significant change. It is a little bit of fiddling here and there. While I believe it is supportable on the whole, with a number of amendments that our party will be proposing, I am sure it is very disappointing to many people that this bill has been some two years in the making and then comes forward and has to be made retroactive for that length of time.
It has also left mining companies in the lurch because they look at other experiences and other commitments that have been made by this government -- in election campaigns, in written agreements with others, in verbal pronouncements, in speeches from the throne and what not -- and they see that it does not live up to all the commitments and promises it makes.
There has been a good deal of uncertainty for that time among those in the mining community as to what rules they have been operating under, essentially and -- let us face it -- for at least a year and certainly in some cases beyond a year, depending on when their year ends. I wanted to indicate, first, that the position they have been put in and the amount of time for what ought not to have been a difficult bill to be drafted and brought forward is disgraceful.
Certainly, it would not have been difficult to draft if Mr. Stone had been asked to draft it. I am quite certain that he could have knocked this off in an afternoon. What really has been lacking has been direction from the minister and the government in basic policy decisions, and what has come forward after that two-year delay is disappointing.
The Treasurer indicated that this bill is revenue-neutral or was intended to be revenue-neutral. With various fluctuations, I suppose it could be a little one way or the other, but I want to talk briefly about his premise that it be revenue-neutral. In effect, that means we are going from a graduated tax of 15 per cent to 30 per cent, graduated as revenue increases. The companies that would have been in that 20 to 30 per cent -- four or five of them, the biggies -- will in fact pay less. They will be reduced, should they have been in the very fortunate position of paying that amount of tax. We do not have many of those companies in Ontario.
Many small mining companies will in fact pay more, because they will go from 15 per cent, or whatever the graduation is, to 20 per cent. If it is revenue-neutral and the biggies are going to pay less, then obviously there is a huge number of smaller companies that will have to pay more. Otherwise, it is not revenue-neutral. That bothers me a bit.
Of course, that can be easily corrected by a simple amendment that would allow those small companies that are struggling to try to eke out a meagre profit to have the benefit of the lesser rate of 15 per cent. Our party will be moving an amendment to allow that, so the tax will start at 15 per cent, for the sake of most of the companies in Ontario, which we surely should be helping and which surely need help, and is capped at whatever the final figure ends up to be.
After we speak and move the amendments and speak to them, albeit the Treasurer may not agree with us, I am hopeful the New Democratic Party, when it is all said and done, will agree there are many advantages in these very difficult and competitive times for mining in Ontario not to pay any taxes at all. Obviously, if that amendment carries, we will not have to move the 15 per cent amendment up to 20 per cent. However, should that amendment lose, we will also be looking, at the very minimum, at not putting Ontario mining companies at a competitive disadvantage with our neighbours. At the very most, if we are coming in with a flat tax, we should be looking at 18 per cent, as I understand it is in Quebec.
Therefore, we will have a series of amendments, depending on our level of success in convincing members of this Legislature that in this case, for the small amount of dollars we are talking about in the Treasurer's overall scheme of things at this period in our history, no tax at all would be appropriate.
I indicated that I hope the New Democratic Party might consider support for those types of amendments. I say that because many of these mines, in fact most of them, are in northern Ontario. Northern Ontario, as the members know, has not participated in the booming economic activity that southern Ontario has enjoyed over these past two or three years.
Mr. Haggerty: Not all of southern Ontario. The member should not leave it as all of southern Ontario; there are other areas that are hurt as well.
Mr. Harris: Well, support our amendment. We have no difficulty with those areas of southern Ontario that are having difficulty participating in the recovery. If they had an effective member, he would speak up and say so, and maybe something would get done. Perhaps that is part of their problem.
Let me say, northern Ontario has not benefited from this economic recovery. We are looking at forestry and mining and those related industries as our main hope for meaningful jobs. The member for Cochrane North (Mr. Fontaine), I know, is touting across the north that we should set our sights differently in northern Ontario than in southern Ontario. I read press clippings from the member for Cochrane North, which said:
"Forget the $25- or $30-an-hour jobs which are available in southern Ontario and in the heart of manufacturing, forget the wages you used to get in the mining sector, forget the good-paying jobs in the forestry sector and start setting your sights on $6- and $7-an-hour jobs. That should be good enough for northern Ontario."
It is not good enough for northern Ontario. It is a disgrace to have a member of the government, purportedly representing the government albeit not in a ministerial capacity any more, touring the north and telling the workers of northern Ontario, "Forget the good-paying jobs in northern Ontario; set your sights at $6 or $7 an hour."
I say that because I think this is an opportunity to help encourage more mining activity in northern Ontario, to help encourage more exploration and to send a signal that says: "Yes, you have problems in the north. Yes, we are really not sure what the heck we can do about them."
As far as diversified industry is concerned, it is very difficult to go to a company and say: "No, you cannot locate your plant in Niagara Falls, Toronto or Mississauga. Sorry, bud. In fact, if you want to do business with Ontario, you have to go to Wawa, Sault Ste. Marie or Sudbury." We know the government cannot do that. However, we can provide incentives. We can be persuasive, and all governments do that.
Here is a resource that is sitting there in northern Ontario. Through this bill, we are perpetuating a problem that is growing and has grown in the last two or three years, and that is the competitiveness of our northern mines versus those in other jurisdictions.
We have an opportunity through this to provide meaningful, good-paying jobs in northern Ontario. The government seems to be insensitive to really helping the north other than through pronouncements, statements and glorious packages of information it sends out, but nothing in the way of action. That is why I say to my colleagues in the New Democratic Party that this is an opportunity not to give more money to the mining companies but to give more money to the employees; to have more employees involved in the mining sector; to have them in a position where they can go to the mining companies and negotiate for more employees; to maintain job security and to get a bigger piece of the pie. If the government grabs a piece of the pie, there is nothing left for the employees.
I believe the proposals we are putting forward make sense for the workers and the people who live in northern Ontario. I would be delighted if all members supported the amendments we put forward. If I can convince one or the other, I will continue to do so.
As has been indicated by others, and I share in that view, our party will support the bill. We will be voting for this bill in principle on second reading. We think there are many aspects of it that do tidy up a number of areas, and we are pleased to support those. We will be placing amendments and fighting vigorously, not on behalf of the mining companies but on behalf of jobs in northern Ontario; not jobs that pay $6 and $7 an hour, but meaningful jobs for our people in the north.
Hon. Mr. Nixon: I will respond briefly. I think the criticisms that have come from both sides of the House about the time frame of this bill deserve some response.
The information and assistance that I got from people in the mining industry, after the government changed and when we were leading up to our first budget, were very definitely that under the jurisdiction of the previous government, the Mining Act and its administration had fallen into a situation where it was unsatisfactory. Because of my responsible position in government, I use those words rather than the ones that come to mind, as I think back to what I would have said if I were in opposition. It was a mess; probably I can leave it at that. The mining people, and I think they were supported by unions and others, felt the administration was bad and the tax rates were not supportive of the kind of development in the north that the mines had expected would take place.
It seemed to be a relatively easy thing for me to indicate to those people that we would give serious consideration in the first budget to announcing that we were going to undertake the kinds of changes, not that they were specifically dictating -- far from it -- but that they expected in an improvement of the administration -- I appreciate the fact the member for Port Arthur has acknowledged there is every indication that improvement is at least possible -- and also that the rates would be adjusted so they would be simpler for entrepreneurs and investors to understand, and also to recognize the fact that in this business, and I am prepared to say at least as much as in any other, a person who takes the chance on mining exploration and development has to see the prospect of a reasonable profit. What is reasonable is going to be debated in here for a long time.
I simply say that, in our view, those people who are making the investments must surely have something that is going to compensate them for the chance and also for the investment of their own dollars. We believe this bill does that, and it has been entered into after a good deal of consultation.
I certainly thought an appropriate bill would be brought forward a year ago. The consultations went on, as it was adjusted this way and that, and I am not proud of the fact that we got ourselves into lengthy discussions with many variously informed people in the matter as we tried to bring forward a bill that would accomplish my aim, as expressed in the budget, of improving the administration, making the law understandable and providing what we considered to be an incentive for the mining community while still maintaining revenue neutrality.
I am not for a moment saying this is perfect, but I can assure the honourable members that a good deal of work and consultation has gone into it. I think it is appropriate, and I am very glad that at least the official opposition has indicated its support in principle. We will look forward to the amendments which, in the view of some members of the House, might improve it, as we go forward.
We think the bill is properly drawn and meets the goals we, as the government, project for the northern development of our mining resources. I sincerely ask the honourable members to give us their support in principle, and later in the particulars of the bill.
The House divided on Mr. Nixon's motion for second reading of Bill 189, which was agreed to on the following vote:
Ashe, Barlow, Bernier, Bradley, Brandt, Callahan, Cordiano, Davis, Eakins, Eves, Ferraro, Fulton, Gillies, Grandmaître, Gregory, Guindon, Haggerty, Harris, Hennessy, Jackson, Keyes, Knight, Lane, Lupusella, Marland, McCague, McFadden, McGuigan, McKessock, McLean, McNeil, Miller, G. I., Mitchell, Munro, Newman, Nixon, Offer, O'Neil, Partington, Peterson, Poirier, Pollock, Polsinelli, Ramsay, Reycraft, Scott, Smith, D. W., Smith, E. J., Sorbara, Sterling, Stevenson, K. R., Turner, Van Horne, Ward, Wrye.
Allen, Breaugh, Bryden, Charlton, Foulds, Gigantes, Grande, Grier, Johnston, R. F., Laughren, Mackenzie, Martel, McClellan, Philip, Pouliot, Rae, Reville, Swart, Warner, Wildman.
Ayes 55; nays 20.
Bill ordered for committee of the whole House.
House in committee of the whole.
MINING TAX AMENDMENT ACT
Consideration of Bill 189, an Act to amend the Mining Tax Act.
The Acting Chairman (Mr. Barlow): Are there questions, comments or amendments to this bill?
Mr. McCague: We have amendments to section 3.
Mr. Foulds: I have no amendments but I have a comment on section 1.
Mr. McCague: Does the government have any amendments?
Hon. Mr. Nixon: No, it does not.
The Acting Chairman: No amendments from the government; you feel it is good the way it is.
Mr. Foulds: I have a very brief comment on section 1. I know this is the definitions section, but it is the definitions in a bill that make it the piece of legislation it is. I am pleased the definitions section indicates that the ministry is the Ministry of Revenue and that the bill will be under the jurisdiction of that ministry rather than under the Ministry of Northern Affairs and Mines, which previously it was temporarily, and the Ministry of Natural Resources prior to that.
The other comment I would like to make at this stage is that this bill has enormous implications in terms of revenue. Given ideal circumstances -- not the circumstances under which we see ourselves at present -- it is the kind of bill that in the future I hope the Treasurer (Mr. Nixon) will introduce early enough so that when it gets to clause-by-clause stage, it can actually go to a committee such as the standing committee on finance and economic affairs for three solid days of hearings with his officials and with interested parties.
Hon. Mr. Nixon: It is not an unreasonable suggestion.
Sections 1 and 2 agreed to.
On section 3:
The Deputy Chairman: Mr. McCague moves that subsection 3(1) of the Mining Tax Act, as set out in subsection 3(1) of Bill 189, be amended by striking out "20 per cent" in the second line and inserting in lieu thereof "one dollar."
Mr. McCague: As I indicated to the Minister of Revenue (Mr. Nixon) earlier, I believe the ideal situation would be to drop the mining tax and to allow the companies to use those funds for exploration, new technology, and in general, for the creation of jobs.
The Treasurer -- I keep referring to him as the Treasurer but he has so many hats I am not sure which one he is wearing today -- mentioned in his preamble when we had second reading of this bill that he was going to bring the bill and the regulations into line. I am not sure why the regulations would dictate that he should bring the bill into line with them. I would have thought it was the reverse, but as I understand it, that is what was said.
I think the incentives that could be created in the north by the elimination of this tax would go a long way towards assisting the government with the dilemma it finds itself in with jobs and with initiatives in the north. The minister and his cabinet colleagues have been visiting the north quite often, no doubt looking for support, but by the same token, looking for ways to stimulate business in the north. This is one thing they could do right from Queen's Park to stimulate all kinds of activity in the north. Therefore, we put our amendment for the elimination of the tax, all but for $1.
Mr. Foulds: We find ourselves opposed to the Tory amendment. I think the reasons were clearly outlined in my speech on second reading, even though we did not then have this particular amendment before us. At present, we feel there is not enough revenue in the piece of legislation before us and certainly not in the amendment the Tory party has put forward.
It is not merely a principle of socialists, but also one we in British Commonwealth countries inherited from England, that royalties and taxation of resources is a legitimate activity of government because the resources of a country or a province belong to all the people. I would have thought the Tory party, in particular, would have realized that the old legislation gave the crown the right to this taxation and that the crown -- originally Queen Elizabeth I -- was representative of all the people. Therefore, we feel we cannot support the Treasurer's bill or the Tory amendment on this section in terms of principle, in terms of the historical development or the legitimate revenue the people of the province should be getting from a resource that is theirs and which is being exploited and exhausted.
Mr. Harris: I rise to speak in favour of this amendment. I understand the government. It is in a particular phase of its career when, from the perch on which it perceives itself to be, it does not want to do anything significant to rock the boat. I understand why it does not want to help the north in this way.
I say to the New Democratic Party, and I made the arguments on second reading, that I do not think the traditional dogma that government should tax the bejabers out of every resource because it belongs to it is necessarily the right way to go at this time in our history. On the basis of traditional positions, the NDP members would support massive taxation on the companies because of the resources, which I think would lead to a very uncompetitive position for our mining companies, to a loss of jobs and to a further blow to northern Ontario at this time in its history. Whatever economic activity was maintained, they would then support the government collecting that money and reinvesting it in the north; I am sure they would support that.
When government gets involved in taking money away through taxation, that costs X dollars. Then one sets up a great council and superfund and advisers and ministries to figure out how to spend the money. We will have all these programs that will be spending on a political basis instead of on a true economic basis in the way they should; at least, it is subject to that interpretation.
What always bothers me is something I have never been able to put my finger on because it varies with various taxes and programs of delivery. When we take something out of the economy, I do not know whether 25 cents gets back; sometimes I think nothing gets back, or sometimes it may be more than 25 cents. I have used the argument and I have not been challenged on it sufficiently with enough data saying I am wrong, so I will use it again. By the time you invest the cost of collecting it, sorting out how you are going to spend it and then deliver the program, the north gets back about 25 cents for every buck taxed out of it in this way.
Here is a situation at this time where the money should be left with the mining companies for exploration, to maintain competitiveness, to improve the environment for mining activities, to hire more employees and to keep wages competitive. Traditionally, when mining companies have had money, they have spent money. The unions are in a much better bargaining position when there is something there to bargain for. I understand where the New Democratic Party is coming from and I do not totally disagree with what it says about this being a provincial resource from which the province should benefit, but I say that northern Ontario should benefit from it: it is a northern Ontario resource.
Right now, northern Ontario is facing very difficult times. It could benefit from what we know is an established industry providing many jobs in the north if the government would for a period of time quit grabbing what little money there is in the situation northern Ontario is in. I argue this is a logical amendment for every member from northern Ontario to support, and surely for the New Democratic Party as well as for the government to support, if it is interested in seeing money stay in the north, with more economic activity, more jobs and better wages.
I urge the Treasurer, and the members of his party who are sitting in their offices doing other work while watching this debate as I speak at this very moment, to listen to what I think is a very logical and rational argument for putting 100 cents of a dollar back to work in northern Ontario for this period of time in our history, by supporting the amendment that has been put forward by my colleague the member for Dufferin-Simcoe (Mr. McCague).
Mr. McCague: Initially, I asked the Treasurer about the companies that would be hit by this tax. I wonder whether he can tell us the ones that will be adversely affected by this scheme he has laid out for us.
Hon. Mr. Nixon: Does anybody else want to comment on this? Obviously, we can speak as we want.
I do not have a list of the companies and what the impacts will be but I am informed that with the depletion allowance -- is that what it is called? -- and the exemption being raised to $500,000, if anybody gets a break, the base metal mines will, and that the high profit gold mines will be paying an additional amount. At least the balance breaks that way. I do not have a list of the impact company by company, and I am not prepared to prepare it and give it to the member. It is not that it is secret but the tax returns are not public documents and I cannot really make them that way. But as the member knows, we do report our revenues, most recently in the Ontario Finances that was tabled last week.
As to the mining profits tax, the budget plan that was established when the tax was administered under the Ministry of Natural Resources and then the Ministry of Northern Affairs and Mines, was listed at an expected $55 million. Actually, we now expect to collect $85 million, not so much because of any changes in this but because of the administrative turmoil associated with assessments not established or sent out, assessments not followed up and disagreements with corporations that go back a number of years. It is not always appropriate to single out individuals, but Larry Leonard, assistant deputy minister, who now is at the table before me on my right and who may be known to some members, undertook to follow up on some of those and through judicious discussions with the people who were subject to old assessments was able to find an additional $30 million which is reported in Ontario Finances.
It would be nice if we could say it was because of the expanded operations of the mining community, and obviously there is additional buoyancy in the gold fields, but the additional revenue really came from stepping up our administrative process. I do not know whether the member for Nipissing (Mr. Harris), who for a brief period shared the responsibilities of this as he was shuffled from post to post during his career on the Treasury benches -- perhaps it was his commitment to the concept he has described that no money should be taken out of the mining profits tax and that it should be reduced to a dollar for a reassessment.
We do not believe that. Of course, if the mining people had their druthers, they would prefer to pay no tax or even to get subsidies if we were prepared to do that. But most reasonable people, including the hard-headed mining entrepreneurs and business people, many of whom have been in the business for many years, understand that they should be paying their fair share of the taxes and that the development of the north, while we do not earmark the taxes, should be an appropriate call on those sorts of funds.
So we really feel that we cannot accept the amendment. We think it is reasonable for us as a government to maintain the revenues from the mining profit tax. We hope that administration will return more money to the Treasury but will also be seen to be judicious, fair and equitable by the people who are assessed and who have to pay the claims, and that the people who are interested in the rights of the crown in Ontario will feel also that we are not giving away the resources but that we are in fact suitably stimulating the mining industry in a way that will provide jobs and revenue for the Treasury of this great province.
Mr. Foulds: I just want a very simple explanation from the Treasurer. Can he explain to me how this section allows him to gain more revenue from the high-profit mines at Hemlo, as he just claimed?
Hon. Mr. Nixon: I think it is appropriate to say that the base metal mines get a better break, if you might call it that, because of the processing allowance, which is not payable on the same basis in the gold mining operation; so that offsets to some extent the fact that they are going to be paying a 20 per cent rate, then a higher rate. In fact, the average rate payable in the graded rates that we are hoping to abandon was something like 15 per cent, so we feel that this adjustment is going to improve the revenue to some extent, but giving a greater exemption at the low end will balance that out.
So if I said that the gold mines are going to pay less, I meant that the base metals would pay a lesser amount on the basis that they have a processing allowance that is somewhat more generous than that granted to the gold operations. That is on the basis of being a farmer from Brant county.
Mr. Foulds: What the minister is giving, then, is the relative state between base metals and gold, for example, rather than in absolute terms.
Hon. Mr. Nixon: Yes.
Mr. McCague: As a farmer from a different part of the province, I hope the Minister of Revenue can tell us something. I understand that the base metals will pay less, likely; the gold mines will pay more. I was not asking for a list of each mine and what tax it would pay. What I would like to know is whether there is any other grouping into which those that will pay more fall. Could the minister be a little more definitive as to those that are going to be hit by this, other than the large gold mines?
Hon. Mr. Nixon: I am not aware of that. My officials cannot give me a suggested answer. There may be some other officials here who may send me a note in that regard, but frankly, until I receive additional information, the answer is no, I cannot provide that information.
Mr. McCague: The information I have is that the Ontario Mining Association are prepared to accept this legislation at its value, but unfortunately, as they put it, there will be some who will be adversely affected by this legislation. I hope that is factual, and I was just looking for an answer to those who would be adversely affected.
Hon. Mr. Nixon: If there were not some adjustments in the taxes payable, assuming one could freeze the whole mining industry in amber while one examined it, then there would be no point in changing the legislation. Obviously, some companies will pay more under the new legislation and some will pay less. I do not know what the categories would be and I do not know what companies they would be. I am sorry I cannot be more forthcoming.
The Deputy Chairman: Shall Mr. McCague's motion carry?
All those in favour will please say "aye."
All those opposed will please say "nay."
In my opinion the nays have it.
The Deputy Chairman: Mr. McCague moves that subsection 3(1) of the Mining Tax Act, as set out in subsection 3(1) of Bill 189, be amended by striking out "20 per cent" in the second line and inserting in lieu thereof "18 per cent."
Mr. McCague: I am disappointed that the Minister of Revenue was not able to accept the first amendment. This one is much the same, except that it moves from $1 to 18 per cent.
The reason for this amendment is to prevent Ontario being in the position of the big tax grabber of all the provinces of Canada. As I understand it, the rate in Quebec is 18 per cent and the rate in other provinces is somewhat lower than this. I would be very pleased if the Treasurer could see his way clear to accepting this amendment.
We have talked about the things the Treasurer is searching to do for the north: the great sums of money that are being spent to do studies upon studies, the great sums of money that it takes to fly the ex-Minister of Northern Development and Mines around the north and a lot of expenditures that are being incurred by the government.
We just think that if he were to leave this two per cent in the north, it would create a good number of jobs, it might avoid layoffs and it might even make the Minister of Revenue look good in the north. I know how hard he is striving to do just that.
Mr. Foulds: We will not be supporting this amendment, because it does not leave any money in the north.
Hon. Mr. Nixon: We cannot accept the amendment. The argument about our being comparable to Quebec certainly makes some sense until one looks at the other aspects of our mining tax base. I have already referred to the $500,000 exemption and certain other allowances that the experts, who are independent on these matters, have indicated will balance it out just about as closely as one can get.
We feel we have a policy that does stimulate the operations in the north more effectively by exempting the first $500,000 and having certain allowances that benefit the base metals. In order to make up for that, the other two per cent is logical and justifiable.
The honourable member said something about flying around in the north. I should just leave this alone, but in 1984-85, the Ministry of Natural Resources planes were used 1,636 hours on government business; in 1986-87, there were used 1,286 hours; in 1984-85, there were 651 hours of chartered flying, and in 1986-87 there were 283 hours of chartered flying. Maybe we are not getting around the north enough and maybe we ought to be stimulating that.
Somebody handed me that, and I have been waiting to use it, so there you are. Maybe we will have a lengthy discussion on this, but to tell the truth, there is no party in this House that has a corner on wanting to have programs that give people in the north an opportunity. Everybody has been in opposition, where you tend to amplify that; and in government you see that really much more must be done for the north. The Premier (Mr. Peterson) and my other colleagues in the government have been making a variety of announcements. I wish they were more effective. I wish in the long run that we could bring out additional programs, and who knows? We may be able to do that. But we have moved almost 1,200 jobs from the Toronto area into northern Ontario. That does not stimulate the whole economy, but it is an indication that we are trying to do these things.
When it comes to stimulation of the mining operation, we feel this is a fair and equitable change. It is supported by the mining association. We have the Ontario mineral exploration program, which is generally accepted as reasonably generous. It is a 25 per cent grant in the case of individuals and a 25 per cent credit in the case of corporations, which, together with the federal programs, really has worked reasonably well to stimulate the north.
Those programs are essentially the ones we inherited. We think they are reasonably well set up, but we would hope to improve them and make them more effective if we could. But while there is lots of politics in this, I do not think there is any thought that there is anybody in this House who does not feel that the stimulation of economic enterprise, particularly mining enterprise, is worth while. We have extracted a lot of money, as well as resources, from the north. We have to recognize that and see that our policy is reflected as well. We do not want to accept the amendment.
Mr. Harris: I am sorry I did not get on ahead of the Treasurer, because it is more difficult for him to change his mind now that he has stated he does not want to accept it, but I will try anyway.
Let me also say that the Treasurer indicated that 1,200 jobs have been moved to northern Ontario. There has not been a single government job moved to northern Ontario. There has been an announcement that they will move to northern Ontario, and we support that. I may be a little off topic, but the Treasurer has used that as a rationale for why he should not accept this tax, so I think it is fair that I comment on it.
With modern communications, those kinds of moves make some sense in 1986-87. As well, with the tremendous recovery in southern Ontario and the exact opposite happening in northern Ontario, it is one way that government can share the wealth a little bit, and we are very supportive of that.
But I am always intrigued when the Treasurer and members of this government make an announcement. Then they go around and say, "The fact is that we have moved 1,200 jobs." That is not true, and in fact, many of the statements that have been made by this government -- this Premier and this Treasurer included -- do not ever become fact.
The mines staff in the Ministry of Northern Development and Mines, I understand, in spite of the fact the announcement was made with great fanfare a year ago and it would all be done within two years, are now being told to be ready to go in four years, so who knows what northern Ontario will be like in four years if that follows the same pattern? I want to tell him I have more confidence, not in many areas but in this area, that the Minister of Correctional Services (Mr. Keyes) will be able to get some staff in North Bay in a little shorter period than five years, which it appears it may take to get those jobs into Sudbury on the basis of what we hear.
Hon. Mr. Nixon: Is North Bay on that list?
Mr. Harris: It is now, and the Treasurer should not make a comment like that, because the people are already very, very suspicious of promises made by him, by his Premier and by his government.
This move to 18 per cent will come very close, with the other moves in the bill, to doing away with any companies being faced adversely by having to pay more, because we have not been able to zero in precisely on the companies. The Treasurer quite correctly says, "I cannot give you tax information." I am a little disappointed that, knowing this bill was going to be debated today and in fact thinking it would be last week, he did not have a few more answers regarding the groupings of companies that pay more.
The move to 18 per cent would probably come close to solving that problem. If the Treasurer accepts this amendment, my colleague may not have to move the third amendment that guarantees that nobody pays more, because the net benefit of at least being competitive with Quebec and with other jurisdictions makes a lot of sense.
It is peanuts as far as revenue to the Treasurer goes. I have known the Treasurer in some cases to be a reasonable man. I hope he will not stick to some silly principle as a reason for not supporting the amendment; that that is what the government said and he cannot change his mind. I would like him to look seriously at this amendment as making some sense and being of benefit in making this bill a little more meaningful to the mining companies and the workers from northern Ontario.
Mr. McCague: The Treasurer knows that what we are proposing -- while it may not work out to be exactly these figures -- is that $8.5 million more be left in the north for purposes that I think could be at least encouraged by the Minister of Revenue. The member for Port Arthur said his party is opposed to the amendment because it will not do anything for the north. That may be. I think it is worth the experiment or worth a try.
In the last few years, I have had the pleasure of visiting quite a few of the northern mining towns. While the New Democratic Party can say that all the money is taken out of the north and none is left there, I found a very good atmosphere and feeling between the people who worked in the mines and the company executives who were interested in doing something for that town, district or whatever they happened to be in.
I know it is a very traumatic experience for anybody in those areas when a mine closes down completely. I have visited a couple of places where there is nothing now, nobody lives there, and I find that very disturbing. If the Treasurer, as Minister of Revenue, is prepared to leave a little more money in the north, probably with some discussion with the companies as to how that might be used, that is one of the kinds of northern incentives he might well want to promote.
I am glad I gave the Treasurer the opportunity to put that little bit of information he had on that little piece of paper on the record. Those are interesting figures. I wonder if he took into account the fact that it is the best year for a long time in terms of forest fires. His figures may be tainted a bit or smoked up a bit by those facts.
The Deputy Chairman: All those in favour of Mr. McCague's amendment will please say "aye."
All those opposed will please say "nay."
In my opinion the nays have it.
The Deputy Chairman: Mr. McCague moves that:
(a) subsection 3(1) of the Mining Tax Act, as set out in subsection 3(1) of Bill 189, be amended to read as follows;
"3(1) Every operator is liable for and shall pay a tax on the profit determined under subsection (5) for the taxation year from all mines in which the operator has an interest equal to the aggregate of,
"(a) 15 per cent of the amount by which the lesser of the profit and $1 million exceeds the lesser of,
"(i) the proportion of $250,000 that the number of days in the taxation year is of 365, and
"(ii) the aggregate of amounts determined under subsection (3) in respect of each mine in which the operator has an interest; and
"(b) 18 per cent of the amount by which the profit exceeds $1 million;" and
(b) subsection 3(2) of the Mining Tax Act, as set out in subsection 3(1) of Bill 189, be amended by striking out "$500,000" in the fourth line and inserting in lieu thereof "$250,000;" and
(c) clause 3(3)(a) of the Mining Tax Act, as set out in subsection 3(1) of Bill 189, be amended by striking out "$500,000" and inserting in lieu thereof "$250,000;" and
(d) subsection 3(4) of the Mining Tax Act, as set out in subsection 3(1) of Bill 189, be amended by striking out "$500,000" in the fourth line and inserting in lieu thereof "$250,000."
Mr. Harris: The amendment that was placed was fairly lengthy. Let me say a few brief words and ask the Treasurer for some comments and then we will not worry about it too much. The attempt of what we wish to do with this is to maintain the good parts of what the Treasurer is proposing, i.e., I believe the threshold has been raised from $250,000 to $500,000. We drafted this amendment fairly quickly and I think there is an old number in there that I am not exactly sure is the intent of what we wish to propose. If we had some signal of its acceptability by anybody in this House other than those in our party, we would draft it accordingly. What we would like to propose is that there be a 15 per cent threshold, but of course based on the $500,000 and not on the $250,000. This would guarantee that nobody would be adversely affected by the flat 20 per cent; in fact, there would be a phase-in of 15 per cent to 20 per cent.
Before we bog ourselves down in the details of how to draft that amendment, I might ask whether the principle is acceptable to the Treasurer or to my esteemed colleague the member for Port Arthur (Mr. Foulds).
Hon. Mr. Nixon: The honourable member is asking for some indication. As Minister of Revenue, I am quite satisfied that what amounts to an agreement we have reached with the people involved in the business should not be seriously interfered with. We have simplified the process and have come up with a formula that they find more useful and in fact stimulating. The member is suggesting they build on our decision to exempt the first $500,000, which stimulates small operations, and then build in further improvements from the standpoint of the people paying the revenue; that is not acceptable. Naturally, we will accept the decision of the House on this, but we highly recommend that the formula we have put forward be maintained.
The member for Port Arthur is very concerned that some of the more profitable, new operations are escaping the kind of revenue that ought to be payable. It is not really within my competence to explain this as fully and effectively as I should, but because of a variety of procedures that have been established, there has been an average rate of 15 per cent. Many of the gold mines have been paying at that marginal rate rather than the 30 per cent that is in the act.
It is possible that if we kept the old act and applied it in a slightly more businesslike way, we would be receiving more than the 20 per cent that this act envisages, but we feel it is a well-understood administrative practice, re-established under the Ministry of Revenue, that a flat rate of 20 per cent will be applied. We think, and the projections are, that those productive, highly profitable mines will be paying at a rate higher than they would under the process we are leaving behind.
I know the honourable member is saying, "I would like to understand and believe what you are is saying," but my arguments are not as conclusive as I would like. The explanations that have come from the people who deal with this on a day-to-day basis have not fully penetrated so that I can pass them on to the member. I simply pass on that aspect of goodwill and the fact that I do believe this simplification, with the deep bow to the small new operators with the exemption of the $500,000, is going to be stimulative, reasonably productive of revenue and fair. It is not set in stone.
Mr. McCague: As the Minister of Revenue and I discussed earlier today, we in the opposition asked for the minister's assistance in drafting some amendments last week when it appeared we would have to deal with this bill in very short order. I believe we erred on this one. I am not blaming the ministry; I am not taking any blame for it ourselves. The aim was not to lower the amount on which tax would apply.
Since the minister has refused to accept any reasonable amendments such as we have put forward up until this point, we will be happy to withdraw this amendment.
The Acting Chairman (Mr. Barlow): The amendment has been withdrawn. Are there any further amendments?
Mr. McCague moves that clause 3(7)(f) of the Mining Tax Act, as set out in subsection 3(1) of Bill 189, be amended by striking out "person" in the third line and inserting in lieu thereof "operator."
Hon. Mr. Nixon: We have given quite careful consideration to that, because the Ontario Mining Association people have indicated they would like to do that. However, it involves the utilization of the federal pass-through program in a way which was not envisaged by Revenue officials here in Ontario.
We feel we have a substantial program involving the Ontario mineral exploration program, plus certain other stimulative federal and provincial programs, which have worked very well in the mining community in the north. We feel passing the right to this tax relief on to the mining corporations themselves would not be justified in the terms we are looking at, and we are not prepared to accept or support the amendment.
Mr. McCague: I am not as knowledgeable in this as the minister; at least, I do not have the staff to explain to me the pitfalls that might be involved in the changing of the word "person" to "operator." In consultation with mining companies, it was pointed out on several occasions that "operator" was a better word than "person," and it was understood that there might be a duplication on either side. I am not sure whether the duplication comes with "person" or "operator," but if it is "operator," as our amendment suggests, it is clearly stated that the companies do not want to take advantage of any such situation and, in fact, that the problem may arise with the word "person" rather than the word "operator." I know I have thoroughly confused the minister.
Hon. Mr. Nixon: It is not just a matter of which is the correct word or, as we say in South Dumfries, le mot juste. We believe it does have quite a substantial impact on revenues, and we are advised that it is not acceptable, unless of course the House decides otherwise.
If the debate is going to continue, obviously we should adjourn.
Mr. Harris: I would like to ask one quick question. I wonder if the minister knows whether, like the Quebec legislation -- I think I understand what is happening by exchanging these words -- it allows the corporation to get the tax benefit from doing work perhaps on others' properties or claims. Is my understanding correct in that?
Hon. Mr. Nixon: Yes. I cannot say precisely what is the Quebec approach to this; ours is not identical, but we do feel that the position we are taking is competitive.
Mr. McCague: On the basis of that, I think we are prepared to take the minister's word for it and proceed.
The Acting Chairman: Proceed with the vote? Are you withdrawing the amendment?
Mr. McCague: Proceed.
The Acting Chairman: All those in favour of the amendment to clause 3(7)(f) will please say "aye."
All those opposed will please say "nay."
In my opinion the nays have it.
Section 3 agreed to.
Sections 4 to 25, inclusive, agreed to.
Bill ordered to be reported.
The House adjourned at 6:03 p.m.