Official Records for 22 June 1981

  • Hansard Transcripts

ORAL QUESTIONS

ASTRA/RE-MOR

HOUSING PRICES

WELCOME TO MRS. MCDONOUGH

HOUSING PRICES

PARAMEDIC SERVICES

COURT DELAYS

CHILDREN’S MENTAL HEALTH SERVICES

UREA-FORMALDEHYDE FOAM INSULATION

VISITS BY MINISTERS

HOUSING LOAN PROGRAM

ORDERS OF THE DAY

INTEREST RATES

BUSINESS OF THE HOUSE

NOTICE OF DISSATISFACTION


The House met at 2:01 p.m.

Prayers.

ORAL QUESTIONS

Mr. Smith: Mr. Speaker, I will ask the first question of my good friend the Minister of Consumer and Commercial Relations (Mr. Walker), who has just come into the House.

Mr. Nixon: He should have known better.

Mr. Smith: I was in Kingston on the weekend. The Minister of the Environment (Mr. Norton) notes that. The Conservative members at various levels of government in Kingston are known there as Flora and fauna. I am not sure what that says for the Minister of the Environment, but we had a wonderful time. It is a beautiful city indeed.

Interjections.

Mr. Cassidy: On a point of privilege, Mr. Speaker, since you were seeking to catch my eye: I intended to send this to the Leader of the Opposition before, but in view of the gulf that has opened up between him and the rest of his party, and the fact that I have been accused of writing his speeches, I would like to send him a copy of a membership application to the New Democratic Party. He would be welcome --

Interjections.

Mr. Cassidy: Mr. Speaker, in addition, I would tell him that the rate for unemployed is only $3.

Mr. Smith: One can understand why the member for Ottawa Centre would have looked into that rate.

Interjections.

Mr. Smith: I am very grateful for this membership application, and I certainly want to assure you, Mr. Speaker, that I can understand the sensitivity of the New Democrats, who have so little terrain left that any sense that anybody is moving in on what terrain they have is very frightening to them. But I will take this as an honour and a privilege, and I will put it with many other mementoes of my political life. I will remind myself of one --

Mr. Cassidy: As the member sits in his study reflecting on his dutiful past.

Mr. Smith: I was disappointed to learn, however, Mr. Speaker, that there are no Messiahs in that group. I would have thought that somewhere in the NDP caucus there would be somebody capable of leading the party to something better than it has already achieved, and I was so sorry to hear that there are no Messiahs there.

Mr. Speaker: Mr. Smith, you have a question of the minister?

ASTRA/RE-MOR

Mr. Smith: Yes, Mr. Speaker, I certainly have a question of the minister. The minister will recall that on Thursday I presented him with a letter which warned his ministry back in July 1979 that Astra Trust was acting as a front for Re-Mor long before either Astra or Re-Mor collapsed in the spring of 1980. We have been looking through the transcripts of the justice committee, and it seems that everybody who had been intimately involved in monitoring the Montemurro problem since the summer of 1978 said he learned of Re-Mor and what it was doing only in early 1980.

I would like to ask specifically, has the minister taken time to check since Thursday as to what happened? Did Mr. Roach, who received this letter, speak to any living soul about the letter he received? Did he talk to anybody in the ministry, any superior, anybody in the Ontario Securities Commission? I ask the minister to remember, when he answers this question, that during the time after that letter arrived, the Montemurro companies were probably the biggest problem his ministry had. Everybody had been red-flagged to watch out for those particular companies. To whom did Mr. Roach speak when he received that letter?

Hon. Mr. Walker: Mr. Speaker, Mr. Roach apparently received this letter some time after it was written on July 23. Coincidentally, I am told the letter actually arrived the very day he received the telephone call. It is my understanding that Mr. Roach spoke to the director, Mr. Harry Terhune, and basically conveyed the information there.

I do remind the honourable member that we received from the lawyer who had sent the letter, Mr. McGlynn, coincident with the time the letter was received, a telephone call that basically said nothing was to be done. Indeed, I have now circulated a memo to file, which I do not have in front of me at the moment, that was done by the individual who received the call. The memo to file indicates very emphatically, and I am sure the member has a copy of that memo by now, that we were to do nothing -- “we” being the Ministry of Consumer and Commercial Relations -- in respect of the file, or in respect of the complaints that were laid.

Of course, as the member appreciates, the essence of the letter was basically that some people did not receive what they had planned to be receiving, or information they were supposed to get. So the memo to file was that nothing was to be done, but that particular file was to be kept open until such time as our ministry received from Mr. McGlynn a letter stating he had received his money back.

In fact, a few days later a letter was received from Mr. McGlynn which indicated that the moneys had been paid in full and therefore the matter was, in essence, from reading the memo before, resolved. I would point to paragraph four of the memo which says: “McGlynn asked this office not to act on his complaint but to keep the file open until he sends a written confirmation from him to confirm that his client has received his funds in full and is satisfied.” That was agreed to by the person who received the call.

Within a matter of days, the letter came in from Mr. McGlynn, dated July 31. The memo was dated July 27 and involved the call made that day. This letter, dated July 31, was written to the Ministry of Consumer and Commercial Relations. It said: “Dear Mr. Roach,” Mr. Roach being the chief examiner; “Re: Astra Trust Company.” Incidentally, they are talking about the federally incorporated Astra Trust Company through which, of course, 98 per cent of all the funds were funnelled before being dealt with in the Re-Mor matter.

It said: “Further to my letter of July 23, 1979, in connection with an investment made by Sheila and Henry Ramsey with Astra Trust Company, I would confirm that the Ramseys’ investment with Astra has been returned to them in full with interest to the 27th day of July, 1979.”

As I said, when read in conjunction with the memo to file written by the person who received the call -- “McGlynn asked this office not to act on his complaint but to keep the file open until he sends a written confirmation from him to confirm that his client had received his funds in full and is satisfied” -- in the light of that, I think it was obvious what would be done.

2:10 p.m.

The member should remember that this was the first indication there was anything untoward. The ministry receives something in the range of several thousand letters of complaint in a year. The fact one would be sent, then basically withdrawn by the lawyer and the ministry told not to act upon it, tells one exactly what was done by the ministry.

Mr. Smith: Given that the standing committee on administration of justice was told plainly by Mr. H. S. Bray that the ministry did not know about Re-Mor until well into the end of January 1980, and given that the minister has now said Mr. H. R. Terhune, a very senior official indeed -- the assistant registrar, I believe, of the trust companies division -- was given this letter and told about it -- a detailed letter, not by a crank -- on the subject that was of paramount interest to the ministry at the time, stating that trust company or mortgage company had been operating in this particular case, could the minister answer two questions?

First, what right did Mr. Bray have to say the ministry had not heard of the Re-Mor situation in 1979 when this letter had in fact been received and discussed with Mr. Terhune? Second, does it strike the minister as even conceivable, let alone reasonable, that such a detailed letter into the operation of this front that Astra was providing for Re-Mor should simply go totally ignored, based merely on the fact that, when threatened with such a letter, Mr. Montemurro and his friends coughed up the money to that investor?

Hon. Mr. Walker: There are a couple of things to keep in mind. One is that the Re-Mor spoken of in this letter was certainly a different company from the Re-Mor Investment Company Limited that was originally incorporated some six or eight months earlier in 1979. The Re-Mor investment company here was a division of a totally separate company of Via Mare investments.

That should be kept in mind, plus the fact that Mr. Bray, I assume, was speaking for the benefit of the Ontario Securities Commission, of which he is the vice-chairman. Whether he would arrogate unto himself the right to speak entirely for the ministry is a question that is open to consideration. Probably in the light of what had been received, that would not be an accurate statement.

Given that the ministry had received this correspondence -- and the member should remember it was not at all unusual for trust companies to be acting as mortgage brokers -- and given the fact a complaint was received and basically we were told not to act on the letter, I think it was reasonable under the circumstances for the individuals involved not to continue action.

As one reads all this in the context of the whole affair, of course one looks back on it, and hindsight would tell one it should have been a trigger. Given that we receive thousands of letters a year in that one division alone, it would not seem unreasonable at all that in one of them we should be told: “Do not act on this one letter, but keep the file open until we get our money back. We will let you know when we get our money back. After we get the money back, do not act any further on it.”

Mr. Cassidy: Supplementary, Mr. Speaker: The minister is saying the policy at the time in the Ministry of Consumer and Commercial Relations was that, no matter what the seriousness of allegations made by somebody who felt he was getting a raw deal from a corporation licensed by the ministry, it did not matter as long as that individual’s complaint was satisfied by means of repayment of the funds that had been invested.

Is that what the minister is saying, and is he not therefore opening the door to a situation where anybody who is conducting a shady enterprise can avoid investigation by this government or by his ministry as long as he pays off the complainant and gets the complainant off his back? If that is the case, how does he defend that kind of shortsighted policy when there were so many other people who were potentially at risk?

Hon. Mr. Walker: Mr. Speaker, I would have to say there are a number of things I could answer in response to the last question, and I intend to make a statement in that regard in which I think the member will be most interested. Perhaps when the House sits -- if it sits -- Wednesday or Thursday, I will have some opportunity at that time to explain fully what this ministry has done in that regard.

The other aspect is that I think the leader of the New Democratic Party is again confusing the companies, because there was not a concern about the Re-Mor Mortgage Investment Company. It was not limited. It was not that which was being complained about. It was basically a different type of Re-Mor Investment Management, which was part of Via Mare, a different form of company. There is no question that they ultimately became amalgamated, but at that point historically, it would be very difficult, to draw any connections between them.

Mr. Smith: Supplementary, Mr. Speaker: Since the minister has said that in hindsight the matter should have been looked at at the time, even though he understands why it was not, I would hope the minister would agree that there were an awful lot of instances of this kind. Now it is Roach and Terhune who should have done something which they did not do and previously it was Weinstein.

Does the minister not recognize that at some point the public will want to know why there were so many people there who should have done things and did not, or whether there was influence brought to bear on some of these individuals, and if they acted reasonably in the circumstances or not? The public needs to learn that and needs more than the minister’s assurance, surely.

Since he wants to make a big thing about Re-Mor Investment Management Corporation being different from Re-Mor Investment Management, a division of Via Mare Ventures -- he said he was briefed on this matter, and yet he is laying a smokescreen down -- does the minister not know that Re-Mor, a division of Via Mare Ventures, was a mortgage brokerage operation and the prototype for the Re-Mor Investment Management Corporation? Does the minister know that Re-Mor, a division of Via Mare, collected $2 million from investors on mortgage agreements, and these were later assumed by Re-Mor Investment Management Corporation in late 1979?

The point is that Astra fronted for Re-Mor, a division of Via Mare, and then fronted for Re-Mor, a management corporation -- a separate corporate entity perhaps, but it was the same money, the same investors. The ministry still states it did not learn of Re-Mor and the way in which Astra was fronting until 1980; yet a warning letter was ignored in 1979.

Will the minister finally permit the public to find out what happened within the ministry, and either continue the justice committee hearings in a decent manner or have a royal commission so the questions and allegations can finally, once and for all, be settled properly?

Hon. Mr. Walker: I think the member is very clearly spelling out some of the arguments that we are presenting to the federal government in respect of the Astra Trust Company, the federally licensed and federally incorporated business that was, it would appear, fronting directly for this particular operation and, of course, what ultimately became the mortgage brokerage company. Consequently we are continuing these arguments with the federal government. We think there is a significant amount of responsibility involved in the whole matter as it relates to their dealing with Astra Trust.

Ninety-eight per cent of the money went through Astra Trust. Ninety-eight per cent of the money was funnelled through Astra Trust, and woven throughout it was what appeared to be a very fraudulent matter. The one thing that is very important here is that the government cannot guarantee against fraud. That is one thing to keep in mind.

With respect to the letter itself, in essence, this letter from Bowlby Luchak, and Mr. McGlynn directly, was basically a letter saying that some people did not get what they thought they were getting, which is quite common in terms of the kinds of complaints that we receive in our ministry. There appeared to be a communication problem. Indeed, Mr. McGlynn, the writer of this letter, before withdrawing his action, sent along correspondence that showed there had been a fair amount of letter writing back and forth between the principals involved. It appeared, in many respects, that there was a communication problem -- a communication problem which was resolved.

2:20 p.m.

HOUSING PRICES

Mr. Smith: Mr. Speaker, I have a question to the Minister of Housing. I would have preferred to have asked the Treasurer (Mr. F. S. Miller) but in his absence I will direct the question to the Minister of Housing.

I am sure he has now had sufficient time to reflect on what housing costs are today and the impact of the record high interest rates and what the average family income is in Ontario. Given that he has had enough time to go over these figures, can he tell us what forms of assistance the government might contemplate in order to enable the average Ontario family to purchase a home and thereby have a real stake in society and some protection against inflation as inflation continues? What program will the government contemplate to help people purchase a home, however modest the home might be?

Hon. Mr. Bennett: Mr. Speaker, I think just a week or so ago the Treasurer very clearly answered a similar question from the leader of the Liberal Party and a supplementary from the leader of the third party. He said that at this point he does not contemplate recommending to his cabinet colleagues any program in relation to subsidizing interest rates. That seems likely to be the most complicated part of the house purchasing program today.

Mr. Smith: The minister must surely know seven other provinces do have programs to assist first-home buyers. There is no ideological problem in the mind of this government, since only a few years ago it brought in assistance for first-home buyers in addition to the home ownership made easy program, the Ontario housing action program, and so on. Given these points, why would the minister feel that at this time, when average working families are simply unable to protect themselves against inflation, actions which were reasonable a few years ago should not be taken now? This government has helped with first-home buyer grants in the past. Why would it not do so now when inflation is eroding the possibilities of a decent life in the future for so many of our working people and their families?

Hon. Mr. Bennett: Mr. Speaker, my ministry continues to do some assessments of programs that might possibly be introduced into this province, but we do go back and reflect upon some of the programs in the past. The first-time home buyer grant did not receive very wide acceptance by the member’s party, if I may say so. It was criticized and ridiculed throughout its existence

Mr. T. P. Reid: It was the timing of the thing.

Interjections.

Mr. Speaker: Order. Order.

Hon. Mr. Bennett: There was some realistic criticism of the home ownership program, and not only because of its timing. Some people made use of it who should not have. I think one or two of them were rather close to home with the federal Liberal Party, if I recall correctly.

Mr. Nixon: You’re not going to like this, but --

Hon. Mr. Bennett: No interruptions please.

AHOP was a program which helped to bring a great number of units on stream and this government piggybacked it with the federal government. It received a lot of criticism and also brought a lot of people into a position of not being as realistic about what their long-term financial commitments were going to be to home ownership.

We continue to review programs. I am not about to recommend to the Treasurer nor to the Premier (Mr. Davis) any program at this time, even though I understand what some of our sister provinces are doing. Some of them have been able to do it on a very limited basis. They have zeroed in on first-time ownership, first-time construction, construction with materials of which the biggest percentage is those made in that particular province -- I am referring to British Columbia in respect to its wood.

At this time I have not proposed a program, even though the ministry at the moment continues to review it for some possibility of something in the future.

Mr. Cassidy: Supplementary, Mr. Speaker: Is there any point at which the government will be prepared to move? Or is the government saying that no matter how high the price of housing rises in Metropolitan Toronto and the rest of the province, no matter how high the interest rates rise, no matter how high the monthly carrying costs go, this government, secure in its majority, will do nothing for the average families in Ontario? Why are they not prepared to recognize the problems that average families are having in Ontario today?

Hon. Mr. Bennett: Mr. Speaker, as long as we start by recognizing that the question has three very distinct parts, we recognize -- and I trust this afternoon I will have an opportunity of speaking further on this -- that interest rates have continued to escalate, and that, I think we will all agree, is not a provincial responsibility. It is not; unless I have an argument coming from the official opposition party or the third party, I can tell you, Mr. Speaker, interest rates are not the responsibility of this province.

In relationship to the cost of housing, and I trust the leader of the third party will go back and do a little bit of research if he is going to talk about the cost of housing in most communities in this province, it has not kept pace with inflation. I have said, time and time again, that if one wants to look at the housing market as being only that in the downtown Toronto area, then obviously it is out of all proportion or all realism. But when we move out a way from this metropolitan area and multiple listing services --

Mr. Cassidy: Where, Scarborough?

Hon. Mr. Bennett: -- indeed, our ministry, Canada Mortgage and Housing Corporation, and so on, will show very clearly that the cost of housing in many areas --

Interjection.

Hon. Mr. Bennett: -- and I say to the member for London Centre (Mr. Peterson) that the increase in the cost of housing in the London area in particular has been nowhere close to the cost of inflation or the inflationary factors we have experienced over the last five or six years. Housing today in that area costs slightly less on a dollar basis than it was five years ago. That is also true of other communities in Ontario.

Mr. Epp: Supplementary, Mr. Speaker: About a week ago the minister on the same subject said, and I quote: “I have said very clearly to my government, I have suggested to the Chairman of Management Board (Mr. McCague), the Premier and the Treasurer that if we are about to start interfering with interest rates, I trust we are talking not only about new units but also about people renewing mortgages, who could come to us with the same song and dance that they are having difficulty, and understandably so.”

I wonder whether the minister would clarify what he means by “the same song and dance”? Is he saying these people who are having difficulty in trying to purchase homes are just making the same song and dance, that he is not taking it very seriously and therefore not recommending cabinet do anything about the whole matter?

Hon. Mr. Bennett: Mr. Speaker, at the time I was referring to the question of whether the government was going to enter into any kind of a program to subsidize interest rates -- and I underline again, if the government is to enter into such a program -- whether it should be at this level or the federal level. I trust it is going to be looking at trying to comfort or cushion the interest rates that will be experienced, not only by people buying new units in the marketplace today, but indeed by those who might be buying a resale home.

I do not believe we should be trying to deal exclusively with one sector of the purchasing power or the purchasing area of housing. There are a number of young couples who are buying homes that have been on the market and that maybe have been resold once or twice before. Even though it is their first-time purchase, I think if we are looking at comforting or cushioning the interest rates, we will have to do it on a very broad scale and not singularly to the housing industry.

WELCOME TO MRS. MCDONOUGH

Mr. Speaker: I would inform all the members of the House and ask them to join with me in welcoming a special guest in the Speaker’s gallery, Mrs. Alexa McDonough, who is the leader of the Nova Scotia New Democratic Party.

Mr. Cassidy: Mr. Speaker, my friend Mrs. McDonough is also --

Mr. T. P. Reid: I’ll make you an even trade -- you for him.

Mr. Cassidy: My friend Mrs. McDonough is also the first woman to be the leader of a political party in any province in Canada.

While we are on the subject of the triumphs of socialism, I hope all members will feel as strongly as I do in welcoming the news from France about the majority that has been gained by the Socialist Party in the chamber there.

2:30 p.m.

HOUSING PRICES

Mr. Cassidy: Mr. Speaker, I have a new question for the Minister of Housing. Since the minister seems to wash his hands of the situation in central Toronto, I would like to ask the minister if he is aware that in Scarborough, according to Royal Trust’s surveys which have been going on for some time, the price of an average three-bedroom bungalow without a recreation room, without a fireplace, without appliances -- simply a three-bedroom bungalow of about 1,200 square feet, the kind that many workers at General Motors used to be able to afford many years ago -- has gone in one year from a price of $84,000 to $120,000.

The cost of owning that bungalow has risen to the point where a year ago it needed a family income of $37,000 and today it needs a family income of $69,100 to pay for the interest, to pay for the taxes and to pay for the cost of ownership. Given the fact it now costs $69,000 in income to afford a very average bungalow in Scarborough, would the minister not agree it has now become impossible for families on average incomes to have a home of their own anywhere in Metropolitan Toronto?

Hon. Mr. Bennett: No, Mr. Speaker.

Mr. Cassidy: Would the minister say what the family should do if it wants to buy that bungalow in Scarborough, given the fact it would have to pay $20,730 a year for the taxes, the principal and the interest at today’s mortgage rates -- not counting the cost of heat, not counting the cost of utilities, and not counting the fact the owners also have to eat, look after the kids, pay for the car and that kind of thing? How is a Metropolitan Toronto family on an average family income, which runs just under $30,000, going to get by if it has to spend two thirds of its income to have that very average bungalow in Scarborough? What advice can the minister give to them?

Hon. Mr. Bennett: First of all, Mr. Speaker, I have said many times in this House, and I repeat today, not everyone is going to be able to buy the dream home that she or he started out to look for. Let us be realistic.

Mr. Martel: Dream home? Twelve hundred square feet?

Mr. Speaker: Order.

Hon. Mr. Bennett: I have said before and I repeat again that sometimes reality has to take over. It is fine for the lame duck leader of the third party to stand here this afternoon and start giving me all this stuff about what it would take in average incomes. He is talking about a particular bungalow in Scarborough. I say very clearly, if that particular individual wishes to buy, he or she will find a unit within the price range that his or her income will accommodate. There are units and I suggested to --

Mr. Martel: In Inuvik?

Hon. Mr. Bennett: No. Maybe that is where the member for Sudbury East should look for one. I suggested very clearly a week ago in this House that if members followed the Toronto Star, which for a long time only showed us the disaster-situation units that were rising far beyond realistic limits, they would see in the last week or 10 days it has been showing units in an average price range of $39,000 to $40,000. While all the units Ontario Housing Corporation or Ontario Land Corporation might own are not in Scarborough, we do have a number of units. I gave the leader of the third party and his research people a list of units that we do have available, and available for sale at a reasonable price.

Mr. Ruprecht: Mr. Speaker, as you know, Scarborough is certainly part of Metropolitan Toronto, but last week the minister said he would tell us the figures of how many units were fully approved under the Ontario construction loan program. Is he going to continue to sit on his hands like the Minister of Health (Mr. Timbrell) or will he give us an assurance that he is going to come up with the figures that he has promised this House? He indicated he would provide these figures and we are still waiting for him to keep his promise, just as his government will keep its promise. Could the minister please stand up now and give us the figures of how many units have been fully approved?

Hon. Mr. Bennett: First of all, Mr. Speaker, it is not a legitimate supplementary question, but if the member for Parkdale would check with the Clerk, and maybe with his research people, he would find that we answered Notice Paper questions 128 and 129 of the member for Etobicoke (Mr. Philip) on Friday.

Mr. Cassidy: Mr. Speaker, the minister keeps on saying if people cannot afford to live in central Toronto they should go to Scarborough; now he is saying if they cannot afford to live in Scarborough they should go somewhere else. Does the minister really maintain that a house with a one-car garage, with three bedrooms, no fireplace, no recreation room and no appliances is a dream home? The price of that ordinary three-bedroom bungalow has risen in the last year by 48 per cent in Bramalea to $105,000, by 44 per cent in Etobicoke to $130,000, by 51 per cent in Richmond Hill -- that is on the outskirts -- to $115,000, by 55 per cent to $137,000 in Thornhill.

What does the minister suggest families should do if they simply want to have the ordinary kind of bungalow their parents were able to afford on the salary of a skilled worker at General Motors or at the American Motors plant in Brampton?

Hon. Mr. Bennett: I suppose if I wanted to be selective I could show the member homes in any community in the price range of $100,000, $120,000, $130,000 and even much higher. But let me suggest very positively that in most of the area municipalities around Toronto there is a wide range of unit prices in this community.

The member is trying to take the fact that he is reading about some bungalow in Scarborough that now has gone up X dollars. I suggest to the third party leader that he could well read some of the newspapers published here in Toronto and in some communities surrounding Toronto and he would find there is a wide difference in the prices of available units.

He should go to Scarborough. I am sure he would find some that are below the $70,000 figure. Some weeks ago I gave to this House -- and I know the members of the other parties and their research offices have it -- the multiple listing service figures which show clearly what the sales program has been over the last month; they even break it down to the last two weeks. If I recall my figures correctly, 70 per cent of the price ranges at which they are selling units in this community are below $80,000.

Mr. Ruston: Mr. Speaker, I have a question for the Attorney General.

Mr. Cassidy: On a point of order, Mr. Speaker: I have a second question by the rules of the House, unless there has been some change.

Mr. Speaker: Go ahead, Mr. Cassidy.

Mr. Cassidy: I have a new question for the --

Mr. Mancini: Be on the ball. You were asleep at the switch.

Mr. Cassidy: I think Mr. Ruston is running for leader.

Interjections.

Mr. Speaker: Order.

PARAMEDIC SERVICES

Mr. Cassidy: Mr. Speaker, I have a new question for the Minister of Health. Can the minister report what steps the ministry intends to take to implement the promise made back in January that there would be action to implement a paramedic service in Ontario; that there would be, among other things, the appointment of a co-ordinator for a group that would study implementation and then move to implementation, particularly in view of the fact that in the Ottawa-Carleton area we have been waiting for months now in total frustration to get the paramedic service off the ground?

Hon. Mr. Timbrell: Mr. Speaker, in my statement to the Bolton Volunteer Ambulance Service on January 17, I outlined the fact that we would be reorganizing the emergency ambulance services of the ministry and that, once that was done, we would proceed towards the establishment of a paramedic program.

I hope we will be in a position to announce the name of the individual who will be the new emergency services co-ordinator within the next week or 10 days. The interviews have been completed and a decision taken as to the individual to whom the position will be offered. I believe he has accepted. Once details have been --

Mr. Martel: Who? Stuart Smith?

Hon. Mr. Timbrell: Pardon? Who did you say?

Mr. Martel: Stuart.

Hon. Mr. Timbrell: Good heavens, no.

Mr. Speaker: Just answer the question.

Hon. Mr. Timbrell: We will announce that. In addition, last week a group went to take a firsthand look at some of the emergency systems in a number of western cities in Canada and the United States, to examine the various types of so-called paramedic services.

The honourable member will realize paramedic is a term that is widely used but, wherever it is used, it tends to mean different things to different people, because the extent of the medical acts that so-called paramedics are allowed to carry out in various jurisdictions varies widely. In many jurisdictions, people who are called paramedics cannot legally do as many things as our own emergency medical care attendants can already do in Ontario.

2:40 p.m.

The purpose of that trip, which involved a representative of the Emergency Nurses’ Association of Ontario, Dr. Rowat, the head of emergency services at Toronto General Hospital, and members of my ministry staff, was to examine those models and to begin work on specific plans for developing the paramedic curriculum and the implementation of a plan in this province. This is going to take some time; it is not going to happen overnight.

Mr. Cassidy: Since the ministry has taken five months without even announcing the appointment of a co-ordinator to put this program into force, since the minister refers to taking time -- it presumably will be another eight months or a year before community college courses for paramedic training can actually begin -- and since we are therefore looking at a lengthy delay in a needed public service that has a proven capacity to save lives, is the minister at least prepared to move forward with the people in Ottawa-Carleton who have a fully developed plan and are ready to roll provided there is funding and with similar groups elsewhere in the province where there are local groups prepared, able and ready to go now, prepared to move ahead of the rather snail’s pace that has been demonstrated by the ministry?

Hon. Mr. Timbrell: That may be the opinion of the honourable member, but I submit that very soon after my speech in Bolton in the middle of January we did advertise and we interviewed an extensive number of professional people over a period of time to narrow it down to the individual to whom the position has been offered.

I had hoped to be part of the group that went west last week so I would have a personal impression of the various models. We looked at the models in Vancouver, Seattle, Sacramento, San Francisco and Los Angeles, which covers a variety of types of so-called paramedic services. I might add that was over the space of four days. It was not a typical junket, I emphasize.

As I understand it, courses for community colleges are basically locked in by about January or February of each year; so it is highly unlikely that anything will be done in the community college courses until the 1982 academic year. In the meantime, there are a number -- I cannot recall the exact number -- of prototype or experimental advance life-support systems in the province. They will continue as they are while work continues to develop a proper curriculum.

We must also deal with the College of Physicians and Surgeons of Ontario and likely with the College of Nurses of Ontario in the process of developing this curriculum and probably legislation to back up the additional responsibilities which the personnel will have in the system. I wish I could say it could be done overnight. It cannot. If we want to do it right, we have to take the time to make sure we do it right.

Ms. Copps: Supplementary, Mr. Speaker: When is the minister going to respond to families like my own who have members suffering permanent brain damage and/or death because this government has stood still too long on the issue of paramedic services?

Hon. Mr. Timbrell: Mr. Speaker, I point out to the honourable member that, unlike most other Canadian provinces, we have had standards for our ambulance personnel going back to 1975. Most provinces not only do not have provincial standards but also --

Ms. Copps: What about in Seattle?

Hon. Mr. Timbrell: The great strength in the Seattle system -- and this was pointed out in this House before the member arrived here -- is that a very high percentage of the adult population of that city has taken training in and has maintained skills in cardiopulmonary resuscitation.

Ms. Copps: Why isn’t this being done in Ontario?

Hon. Mr. Timbrell: If the member will look around, she will find that a great deal is being done in Ontario with respect to CPR.

Ms. Copps: What do you tell the families of those victims --

Hon. Mr. Timbrell: The member would probably learn a lot more if she would listen for an answer after she asks a question.

Ms. Copps: I have been waiting five weeks for an answer and have seen nothing yet.

Hon. Mr. Timbrell: All the medical advice I have had to date indicates that in cases such as the one to which the member is directly related, it is the first four minutes that are most critical. That has to do with whether members of the family have taken the initiative to get certified in cardio-pulmonary resuscitation and whether there are people around who can assist while the ambulance -- whatever the level of qualifications of the attendants in the system -- is on its way there. The first four minutes are by far the most critical in cases of sudden heart attack, stroke and the like.

Ms. Copps: On a point of privilege, Mr. Speaker: The minister referred to my personal situation, with which he is familiar. As a matter of fact, in that situation qualified medical help was available on the scene immediately. The reason the member of my family has permanent brain damage is that there is at present no facility in this province to train paramedics to do the job they are trained to do in other countries, which saves lives and allows healthy people to carry on.

Hon. Mr. Timbrell: The member apparently feels that way; I do not know whether the facts support it. That is apparently the way the member feels, and I am not about to get into that kind of debate with her. It is her conclusion.

Mr. Cassidy: Is the minister prepared to endorse the pilot program for paramedics that now is operating in Oshawa? And is the ministry now prepared to fund the proposals made in Ottawa that would put three ambulances with paramedics on to the streets of Ottawa prepared to respond in many cases within that four-minute period he spoke of, and to start saving lives now rather than delaying it for the year and a half or two years suggested by the minister?

Hon. Mr. Timbrell: I argue that the ambulance system we have developed in this province, particularly since 1975 with the introduction of the emergency medical care attendants’ qualifications, the courses to back that up in our community college system, the standardized ambulance vehicles and equipment and training across the province, have already gone a very long way towards saving lives and reducing morbidity and mortality in the province.

It may well be that as we move forward in the development of the paramedic program it will be appropriate to look at some of these other proposals over and above the ones that are already being supported.

I emphasize to the member again that one of the fundamental things that has to be decided with respect to the advanced life-support systems for the whole of the province is what procedures these people will legally be entitled to carry out. We must work that out with the College of Physicians and Surgeons of Ontario and probably with the College of Nurses of Ontario in order that they will be on a proper legal footing to deal with the public.

COURT DELAYS

Mr. Ruston: Mr. Speaker, I have a question for the Attorney General. Is the minister aware of the long periods that people charged in provincial courts in Windsor have to wait for their cases to be heard? Does he not feel that justice delayed is justice denied?

Hon. Mr. McMurtry: Mr. Speaker, I have heard nothing officially from anybody practising in the Windsor area, either from the crown’s office or from defence counsel, complaining about undue delays. I did see a newspaper report to that effect.

As the honourable member knows, one of the provincial court’s criminal judges is not sitting at the moment, and I have no doubt that has added to the problem. If there were any critical situation requiring my attention, I am sure the chief judge of the provincial court would have alerted me.

Mr. Ruston: Does the minister not feel that to have court cases delayed up to 18 months after an incident takes place makes it very difficult to find witnesses and for people to remember the circumstances? Does it not cost more for legal fees and legal aid for these long delays? I understand that in some provinces the maximum waiting period is about three months in most cases.

Hon. Mr. McMurtry: Obviously an 18-month delay is unsatisfactory. There could be any number of reasons for the delay. If the member would like to draw the specific case to my attention, I would be happy to inquire into it to ascertain why there is such a delay and get back to him.

2:50 p.m.

Mr. Stokes: Supplementary, Mr. Speaker: While the Attorney General is looking at the situation in Windsor, will he look into the situation where they are actually having to hold court in hotel rooms in the city of Thunder Bay because of the lack of courtroom space in that city?

Hon. Mr. McMurtry: Yes, Mr. Speaker.

CHILDREN’S MENTAL HEALTH SERVICES

Mr. R. F. Johnston: Mr. Speaker, I have a question of the Minister of Community and Social Services.

Is the province of Ontario, in the view of the minister, capable of providing adequate care to emotionally disturbed juveniles in this province? Does he have a double standard for northern children as compared with southern children and for French-speaking children versus English-speaking children? If not, how does he explain that there are no group homes for French-speaking children north of Sudbury in this province? How does he rationalize the fact that as many as 30 severely emotionally disturbed children have been cared for in the Maison Rouyn-Noranda in Quebec and are not taken care of in Ontario?

Hon. Mr. Drea: Mr. Speaker, I hope you will note there are five or six questions in there.

First of all, there is one standard. Second, there is no difference between the standard in northern Ontario, eastern Ontario or southern Ontario. I have recognized the lack of services in the French language in the children’s mental health field. Last Thursday in Ottawa I announced that there would be a children’s mental health group home operated by a Franco-Ontarian social agency in conjunction with the community. That is just the beginning.

Mr. McClellan: A beginning. Your government promised this three years ago.

Mr. Speaker: Order.

Hon. Mr. Drea: My dear friend, I do not know what promises were given three years ago, but the particular residence we are talking about for the Franco-Ontarians will be in place by January 1982.

I must admit that when coming into the ministry -- and it was my understanding the figure was 24 who were being treated in Quebec -- I found that very inequitable. As I said, I have already begun to ensure that the French-language services for young people, in conjunction with the Franco-Ontarian community and its resources, wherever they are, will be in place.

Mr. R. F. Johnston: The promise, as the member for Bellwoods (Mr. McClellan) said, had been made three years ago. I do not see how the minister can get up and excuse the fact that we have to have children treated in Quebec who are citizens of Ontario. Will he not agree that the problem is not just that of French-speaking children in northern Ontario? Does he agree with the accusation by a member of the children’s aid society in Thunder Bay who said of the 10 of 13 placements in southern Ontario of kids from northwestern Ontario, that they would be much better served if there were group homes available in Thunder Bay to handle those children?

Hon. Mr. Drea: I do not know what remarks were made by whom in northwestern Ontario, but I suggest to the member that in terms of children’s mental health programs my predecessor worked very hard and very long to expand those into northern Ontario.

Mr. McClellan: Well, he made a lot of promises.

Mr. Speaker: Order.

Hon. Mr. Drea: I say to the member for Bellwoods, all he ever does in here is whine or complain. That is all I have ever heard from him since 1975.

Mr. Speaker: Order. The minister will address himself to the main question, please.

Hon. Mr. Drea: Mr. Speaker, I am attempting to. The member for Bellwoods says “promises.” I put the thing on line 60 days or so after I was appointed minister. Let him go promise something else.

The question of mental health services for juveniles in this province is one the ministry is working on. There shortly will be expansion and provision of additional services.

Mr. Martel: There is more smoke than change in that ministry.

Hon. Mr. Drea: Mr. Speaker, the suggestion is made there is more smoke or something than there is change. There has been a lot of change, and the services are being provided -- the services will be expanded. I emphasize there is no discrepancy in the priorities between any region of the province. We are going into the areas that have demonstrated the greatest need; we are meeting those needs on a priority basis, and we will expand our services as the needs require.

Mr. Boudria: Supplementary, Mr. Speaker: I wonder if the minister has yet received a letter I sent him last week on francophone services in his ministry. Is the minister aware of the problem and does he have an answer for it?

Hon. Mr. Drea: Mr. Speaker, maybe I should deal with this; it is not quite a supplementary on this topic, but it is general enough and this is a good opportunity.

There was a ministry publication called For Your Benefit which was advertised as being available in the two official languages. Unfortunately, because of a scheduling problem and some difficulties in the translation -- I know the member will understand how people get into some difficulties with the translation service -- the publication is somewhat delayed. It will be available in a relatively short time. When the original schedule was put out, it was intended that the pamphlet would be available simultaneously in the two official languages, but it was one of those things that happens.

In addition, we already have two information pieces similar to those: Who is Eligible for Social Assistance, and How to Appeal. In a more general way, these touch upon the subjects in For Your Benefit, and they are each available in both official languages.

UREA-FORMALDEHYDE FOAM INSULATION

Mr. Robinson: Mr. Speaker, I have a question for the Minister of Health.

The federal government has finally announced its response to the urea-formaldehyde foam insulation problem, and that response is limited to the testing of 2,000 homes in all of Canada. That will not do much to alleviate the concerns of the many thousands of home owners in Ontario alone who have installed the product.

Can the Minister of Health please report to the House on how his ministry will react to the recent announcements of the federal government regarding urea-formaldehyde foam insulation?

Hon. Mr. Timbrell: Mr. Speaker, I know the honourable member has been concerned about this problem since it first arose.

Mr. Philip: Isn’t it nice that somebody over there cares about the problem?

Mr. Speaker: Order.

Hon. Mr. Timbrell: Further to what I had to say in this House about 10 days ago, we did get all of the details, finally, of the proposed response of the federal government.

There were basically two things we were seeking in that response. The first was that there should be a testing program that would be available to all those who had the product installed and wanted their homes tested to be sure there is not a health hazard.

Second, we wanted the federal government to establish a compensation program to assist those whose homes ultimately would be found to be in need of some sort of retrofit.

This latter point was recommended by their expert medical advisory committee. The compensation would apply whether it was a simple matter of sealing baseboards, electrical fixtures, door jambs and whatever else needed sealing to keep the fumes in the walls, or more drastic and more expensive work.

The proposed response of the federal government is, in our view, not sufficient. They are talking about doing 2,000 homes in the whole of the country, plus 400 additional homes that have not got urea-formaldehyde foam insulation as a control group.

My deputy minister, at my direction, was in touch with the Deputy Minister of National Health and Welfare and then with the Deputy Minister of Consumer and Corporate Affairs in Ottawa, because they have turned it all over to that department from the Department of National Health and Welfare.

3 p.m.

We have indicated to them our willingness and our desire to tag on to their testing program so the same laboratories would be used and the same standards applied in order that any home owner in this province who wanted to have his home tested could do so through this program. They have indicated to us their appreciation that we are prepared to do that, and discussions are continuing. Once the details of that have been finalized, I will of course announce them.

In the meantime, the health units are continuing to carry out what testing they can with Draeger tubes and are keeping further lists for further tests in the future.

The second point has to do with the question of compensation. There, I am very disappointed. I think we should all be disappointed in the response of the federal government. It has indicated that, at this point at least, it is not prepared to establish a program of low-interest loans or grants or whatever to assist in those cases where a retrofit eventually would be required. In that regard, we will be supporting the efforts of consumers in the province and will be making further representations on their behalf to the federal government. We hope we will get it to reverse that position.

With regard to the testing, we will be tagging on to their program -- at least, that is the proposal we have made to them -- so that the standards, equipment and methods will be uniform throughout the province and anybody who wants it done can have it done.

Mr. Swart: Mr. Speaker, I must say it is nice to have the minister answer one week late after he promised to give us this information early last week.

Recognizing, and even he must recognize this, the tremendous concern among the people and the tremendous number of instances of real health problems that people in this province are having, recognizing the inadequacy of the federal government’s action and his responsibility under the Public Health Act as Minister of Health, and recognizing that this matter is going to be discussed this afternoon by the standing committee on social development, will he assure this House that he will in no way block an investigation if the social development committee determines it should do an investigation and hold public hearings this summer, as I am very anxious it should?

Hon. Mr. Timbrell: Mr. Speaker, the responsibilities of the provincial government, any provincial government, relate to matters of public health and that then leads to testing.

Our position from the beginning to the federal government was: “Look, we do not have the people or the machines available to do it ourselves. We are prepared to back you up.” Its program is apparently going to make use of private laboratories. It is going to contract with them. The contracts, of course, would specify the methods and the standards to be employed. We said, “Fine.”

Following on my earliest offer to them, we said, “We are prepared to tag on to your program to assure the universal availability of this test to those who have had the product installed.” That is the extent of the provincial responsibility. If what the member is proposing is something that would get into federal responsibilities in either the Department of National Health and Welfare or the Department of Consumer and Corporate Affairs, it may well be --

Mr. Cassidy: Pass the buck and keep the promise.

Hon. Mr. Timbrell: No, it is not a question of passing the buck. We have certain responsibilities, and we are going to make sure we carry them out. But if the member is proposing something that in effect looks at the responsibilities of federal and national organizations, I submit that is not work for a committee of this Legislature.

Mr. Nixon: Supplementary, Mr. Speaker: If the minister is offering to all the residents of Ontario who have this urea-formaldehyde foam insulation that they can have their residences tested as an add-on to the federal announcement of the cross-country selective tests, does he not agree that should have been made as a statement to this House rather than just as an answer to a question, since it is going to be of such importance to all the people concerned?

How is he going to make a proper communication to those people who are intensely interested in this? They certainly want more help. At least it is an important step that they are going to have their residences properly and scientifically tested.

Hon. Mr. Timbrell: Mr. Speaker, I acknowledged in my answer to the question from the member for Scarborough-Ellesmere (Mr. Robinson) that there is more to be worked out. I am answering his question.

Mr. Nixon: This is the first positive thing you have said.

Hon. Mr. Timbrell: With respect, I do not think it is. I think we have taken a very strong leadership position in getting a national program.

Mr. Nixon: You are the author of it.

Hon. Mr. Timbrell: Listen, let me tell the member that in my view, if Ontario and one or two other provinces had not taken a strong position I do not think the federal government would have done anything more than it did on April 3. The fact that we kept pressure on them resulted in a national program, as deficient as it may be.

In answer to a question from a concerned member, yes, there is certainly more to be worked out. But the principle, I think, is important, in answer to his question. Once we have the details worked out with the Department of Consumer and Corporate Affairs and whoever else the federal government wants us to deal with, we will be announcing them.

VISITS BY MINISTERS

Mr. Kerrio: On a point of privilege, Mr. Speaker: This week three ministers are coming to Niagara Falls and area, and Fonthill -- the Minister of Community and Social Services (Mr. Drea), the Minister of Health (Mr. Timbrell) and the Minister of industry and Tourism (Mr. Grossman). They have all decided to come about three o’clock in the afternoon. My personal privilege is, I think, in a sense being abrogated simply because my responsibility is here, and yet I should attend those three functions that are very important to the people of Niagara. In future, I wonder if they would do it in such a way that the local member could attend.

Mr. Speaker: That is not a point of personal privilege.

HOUSING LOAN PROGRAM

Mr. Ruprecht: On a point of privilege, Mr. Speaker: The Minister of Housing (Mr. Bennett) got up about 10 minutes ago and assured this House that the answer to my question -- about how many units were fully approved under the Ontario rental construction loan program in the Metro area -- had been provided to this House on Friday. I have been checking and I find this is a classic case of this government misleading this House and the people of Ontario.

Interjections.

Mr. Speaker: Order.

Mr. Ruprecht: That is correct. Look at this, the minister is telling us the answer is in this sheet of paper.

Interjections.

Mr. Ruprecht: No, it really is not.

Mr. Speaker: Order, order.

Mr. Ruprecht: No, Mr. Speaker --

Mr. Speaker: That is not a point of personal privilege. Will you please resume your seat? Order, order.

Mr. Ruprecht: On a point of privilege, Mr. Speaker --

Mr. Speaker: Is it the same point?

Mr. Ruprecht: It is the same point. This is totally misleading --

Mr. Speaker: You did not have a point of privilege.

An hon. member: Is he not entitled to be heard?

Mr. Speaker: He is entitled to establish a point of personal privilege, and I am not going to enter into a debate.

ORDERS OF THE DAY

INTEREST RATES

Mr. Smith: Mr. Speaker, I rise at this time to move a motion that we realize is not going to pass because of the majority held by the government, but which we believe is a motion that should by rights pass on its merits.

Mr. Smith moved motion 18 under standing order 63(a): “That the Legislative Assembly, noting the failure of the government’s budget to provide immediate and effective relief from the high interest rates now burdening mortgaged home owners, farmers and small businessmen in Ontario, declares it has no confidence in this government.”

Mr. Speaker: Do you have a seconder?

Mr. Smith: It will be seconded by the member for Brant-Oxford-Norfolk (Mr. Nixon), who is interested to learn that.

3:10 p.m.

Mr. Speaker, in speaking to this motion, I should draw your attention, first of all, to the fact that the wording of this motion is absolutely identical to the wording of a similar motion which we presented last time the interest rates moved so high; a motion which at that time was voted against by the New Democratic Party in exchange for a promise of a study. That study was then duly delivered -- some months late, I might add -- and was a study which contained nothing of substance and a study which served only to keep the NDP alive for a few extra months and, frankly, resulted in the majority victory of this government which now afflicts the people of Ontario.

Mr. Nixon: The collapse of the NDP started with that vote.

Mr. Smith: The NDP hoped at that time that by voting with the government they would avoid the inevitable. Had they gone to the people at that time, the NDP would have still done badly, but there would have been a Liberal government instead of a Conservative government.

Mr. Eaton: Quit dreaming.

Mr. Speaker: Order, order.

Mr. Smith: All that, I am afraid, is past history.

Mr. Brandt: That’s right.

Mr. Smith: These are the first words I have heard from the member for Sarnia. He is very excited, I know, to be part of a majority government. I know it gives him just so much to do, so many influential decisions to make.

However, the fact is that with the high interest rate policy being pursued in the United States of America, a policy which has overflowed into the Dominion of Canada, there are a number of very serious things happening in Ontario today and they are matters which are not just a question of bleeding hearts or a question of certain people in difficulty and having a tough time. I wish this Conservative government, a government which understands the role of competition, of free enterprise, of small business, of the farming community, a government which professes by ideology to understand the nature of the middle class in our society, would understand the impact these high interest rates are having over and above individual cases of hardship.

In particular, I draw the attention of the government House leader (Mr. Wells) and the Deputy Premier (Mr. Welch) -- who are the ranking persons still here for this debate in the absence of the Treasurer (Mr. F. S. Miller) and the Premier (Mr. Davis) -- and I ask them to consider the impact of high interest rates on the small business community of Ontario, and not to talk in terms of the hardship of any given small businessman and not to talk in terms of the pain and the suffering of the families of those whose businesses are going under. That is not what we are talking about.

We are talking about the fact that as interest rates go higher and higher, the large businesses that can withstand that situation, the businesses that are able either to pass on the extra cost in the cost of the product or to raise money by other means such as floating shares on the market, those businesses can indeed withstand a time of high interest no matter how long that goes on; but the ordinary small businesses are simply unable to withstand the high interest.

What happens to them is that the small businesses are forced to sell out to the large businesses or else simply go under, to close their doors or to go bankrupt. There has been a concentration of power every time we have had high interest rates, a concentration of power whereby the large companies are able, either directly or indirectly, to take over the market share that was previously held by a number of small companies. I would say, because I know, that the members opposite -- the ministers who are here to do me the courtesy of listening to this argument -- share with me the view that Ontario is best served when a multiplicity of privately owned companies are able to compete in the marketplace.

I ask the government to consider that if we do not help small business we are, ipso facto, at the very same time guaranteeing a further concentration of power in the hands of the large businesses. We are obliged to do something to help the small business community, because when we get to rates of 18, 20, 23, and 24 per cent which people have to pay to finance their inventories, only the large companies can sustain that. Many of them pay tax at a 50 per cent rate, and so the effective rate of interest for them is half of whatever the rate happens to be. The small businesses, however, generally have to pay the full shot and they usually are not in a position to withstand that for very long.

So unless the government wants to see the backbone of our small towns and small villages disappear, namely, the small farms and the small businesses that keep these small towns going, unless the government wants to see a further erosion of small-town Ontario, the Ontario which over the years has been the strength, the guiding force in many ways -- and let us be honest, politically it is an area the government knows very well; it has tried to be in tune with the feelings and the values of those areas and it understands them -- does the government understand as well, even as Conservatives, that as the small businesses and small farms of Ontario are eroded and their market share taken over by the large companies and the large agribusinesses, it is not doing a service even to the very people with whom it professes to be philosophically in tune?

We have an obligation, therefore, not just to rant and rave about the federal policy of high interest rates, because the government knows as well as I that, whether there is a little room for movement federally or not, it is not an awful lot of room, and that by and large it is Ronald Reagan who dictates the interest rates which most of us in Canada end up paying. Instead of just saying how it is not the Ontario government’s fault and instead of washing its hands of high interest rates, does the government not recognize that the great province of Ontario must come to the assistance of small businesses and small farms to maintain the very value system we feel is important to our way of life here?

I ask the government to consider also the matter of home owners; those who would like to be home owners and those who are now home owners. I ask it to consider particularly the fact that working people in Ontario, average families, simply cannot now afford, even if they save for, let us say six, seven or 10 years of work, to purchase a home in most parts of urban Ontario. I ask the government to recognize what that really means, what that bodes for the future.

Will the government just consider what will happen as inflation progresses -- and most people say it will progress. The government knows what the alternatives to continuing inflation are: either the money supply will be cut down so tightly that we will have a depression -- and I suspect most of us would not want that; or else ultimately inflation will be allowed to continue, supposedly under a little more control -- although frankly I doubt that will happen; continued inflation seems the likely scenario. The other alternative is heavy government control, currency controls, interest controls, profit controls and price controls; and I suspect that as Conservatives they are not wild about that idea. But those are the only alternatives we have.

So if we assume that we are not going to have a depression and that government control is not going to be the answer, then the government must surely accept that we are going to have continuing inflation for a few years yet. If we have continuing inflation the government must surely recognize that the only protection most people can possibly hope for is to have their own homes. They cannot buy gold; they cannot get into the speculative commodity market; they are not likely to buy paintings or antiques. Their own homes are likely to be the one hedge against inflation they might have. Poverty in old age is almost always a condition of people who did not own a home. That is not to say that those who do own a home are necessarily rich, but generally they are not in the dire straits of poverty as faced by those who have never owned a home.

3:20 p.m.

In case there is any misinterpretation of comments I made the other day, I have never suggested that the individual home should come under heavier taxation than it now receives.

Hon. Mr. McMurtry: The member gave us that impression.

Mr. Smith: I wish to correct it if that is the case. If that impression was created, I simply take this opportunity to correct it.

Surely the ministers opposite must recognize that with every passing year of inflation those who have assets are protected to some extent against inflation; imperfectly, but to some extent. On the other hand, those who do not have assets are being robbed by inflation with every passing day. Inflation is a means by which money is transferred from the pockets of those without assets to the pockets of those with assets. It is a transfer of wealth.

Therefore, we have to consider that the main source of protection for most citizens, the one they can aspire to with some sense of reasonableness, is their own home. Perhaps it will be a modest home -- we are not speaking of dream homes as the Minister of Housing (Mr. Bennett) says. We as legislators are obligated not just to say, “High interest rates are not our fault so tough luck.” We are obligated to say that high interest rates are now a barrier to working people, to average families, preventing them from home ownership, which is their main stake in an economy.

There is a second stake some people have and that is in their pension fund. Sometimes people have large pension funds that can invest themselves in assets and grow with inflation. However, the government knows that half the citizens of Ontario do not have that protection. The government knows that.

Even though we are all looking forward to sitting together on a select committee on pensions, and even with the best intentions the government may have -- we do not know about them, but they may have them -- to reform the system, home ownership probably remains the one real hope for working people, for average families, in Ontario.

It is no longer a hope in most of Europe, as we know. They went the other route. They said rental accommodation was good enough. They have large government involvement in other aspects of the economy to try to control inflation and so on.

Mr. Jones: I hope you will speak to the member for Renfrew North. He doesn’t --

Mr. Smith: The member for Mississauga North is concerned about the wishes of the member for Renfrew North (Mr. Conway). I am sure he will be very thankful for the fact that the member is solicitous for his wishes and his welfare. I would think the member would be better off being solicitous for the welfare of the average citizens, the average working people, in his riding, some of the people who are now in no position to afford to purchase a home.

I heard all the Mississauga members speak when interest rates went up the last time. They gave some assurance that the government was going to watch it carefully and assist people if necessary. I remember when there was a sort of uprising in Mississauga North among a number of people, and some of the surveys there. That is politics.

I wish to appeal to the better instincts of some of the more intelligent people here. Three of the more intelligent ministers are in the House and I ask them to consider that if --

Mr. Nixon: Oh, I don’t know.

Mr. Smith: I think they are. Referring to them as three of the more intelligent members is still very faint praise indeed. It is very faint praise, but it is better than nothing I presume.

Mr. T. P. Reid: Higher intelligence than the ones in the second row behind them, but not by much.

Mr. Smith: The government has an obligation to use the power it has to guarantee that we do not arrive at a time in Ontario when average families, after seven or eight years of work, cannot aspire to home ownership. I want the government to understand that under the present circumstances, with the present interest rates, it has the obligation and the wherewithal to assist people in the field of home ownership, to assist small businesses and the farm sector.

It may say it does not have the money, but if the government wants to be honest it would have to admit it did not need to give away $270 million in sales tax rebates on furniture, appliances and vans. If one picks up a newspaper one sees even the furniture dealers are saying it is a pain in the neck and not really helping them. Appliance dealers say they have not sold any more appliances. The van dealers are concerned because they thought they were going to sell a lot. They went out and bought a lot of inventory. Now they cannot sell it. They are going to be mad at those guys.

The government has money to use. I realize it prefers to use it for election-time giveaways, but I appeal to whatever noble instincts may still be there among a bunch of successful, if rather cynical, politicians. I say to them they have money available. The paper companies did not need the hundreds of millions of dollars given to them. They would have reformed and refurbished their companies anyway. The government knows there is money available. It was found for every sort of government advertising, for every sort of gimmick. Even the Treasurer admitted there is $100 million he could look at for agriculture.

I ask them to consider the seriousness of the threat to Ontario’s middle class. I ask them to consider the seriousness of the threat to the small business base which has always been the vitality and the viability of the smaller towns of this province. I ask them to consider the threat made by high interest. It is not a matter of considering sob stories or the unfortunate plight of Mr. or Mrs. X. I know they are not prone to accept sob stories. They are sad, but unfortunately they do not usually take an interest in them.

I ask them to take an interest in the very things they profess to believe in -- the small business sector, the independent family farm, the ability of people to have a stake in their society and not to feel alienated or to feel as though they are somehow of a different class from the rest of society.

I ask the government to recognize high interest rates are today a tremendous threat to the fabric of Ontario society. Continuing inflation means the rates will continue high. Even if they temporarily go down a little, they will come back up again with renewed vigour. I ask the government, therefore, to move.

Unfortunately, they have not moved until now. Unfortunately, they cynically went around Ontario during election time talking about how, “Davis can do it,” and, “Help keep the promise.” Yet at this hour of need, the average citizen is facing a greater burden than ever imaginable where rates of interest are being charged that this government itself used to regard as usury, as criminal.

We talked a little while ago of the discounting practice of people who were expecting income tax rebates. People would go to a lending institution and on a discount they would get money ahead of the time the cheque arrived. This government then said an interest rate of about 20 per cent was criminal and brought in legislation to prevent such interest rates being charged. I tell them people are now having to pay this, home owners are having to pay it, those who want to be home owners will have to pay it, small business people are having to pay it. It is having a distorting effect on our economy.

The government cannot stop high interest rates. I cannot stop them. Frankly, even the federal government has a pretty limited area in which it can move. They can go down a little but not a hell of a lot because the Americans own this economy. Under those circumstances, we do not have the freedom to pursue an independent monetary policy to any extent, unless we want to bring in currency controls. I doubt the government would want to do that.

Instead of saying it is not the government’s fault it should have acted. I say with the deepest sincerity I am capable of showing in this House -- and I really mean this -- the government does not deserve to be office if it cannot come to the aid of the very elements of Ontario society it professes to believe in.

We have no confidence in this government. The funny thing is, by the support the New Democratic Party gave to this very motion, worded as it was a year ago, instead of defeating the government it unfortunately ended up having little effect last year. Furthermore, indirectly I suppose, the NDP by keeping the government in power long enough arranged for this majority government to be elected. However, I presume the NDP has seen the light and will now support a motion of this kind, whereas last year its members voted against it. I presume they will be prepared to admit that they voted against it last time simply in craven cowardice and, now it is safe, they will come out and vote with us on this motion.

3:30 p.m.

I say this to you, Mr. Speaker, we have no confidence in the government. The people of Ontario have learned the mistake they made, and that was the reality of March 19. It was the biggest hoax ever perpetrated on the people of this province. That is the reality they know; that is the reality they will remember three and four years from now. We have no confidence in this government and the sooner it goes the better for one and all.

Mr. Cassidy: Mr. Speaker, I want to join this debate. As the member for Hamilton West predicted, yes, we are going to support this motion, because we do not have any confidence in the government in terms of its ability to handle the problems of interest rates, and the effect that interest rate increases have been having on home owners, on small businessmen and farmers across the province. In fact, week after week we have been raising the question of what is happening with home owners. I have to say that the sudden interest of the Liberal opposition is rather unexpected in view of the fact that week after week they have been ignoring the question. In fact, the last time prior to today that the Leader of the Opposition even raised a question about interest rates was on May 8.

Mr. Smith: I made the same motion a year ago, same words, comma for comma, period for period, and you voted against it.

Mr. Cassidy: Mr. Speaker, the leader of the Liberal Party is gnashing his teeth because a year ago at this time he was hoping to ride to power on the coat tails of Pierre Trudeau. I recall when the election was called the first place the Leader of the Opposition went was to call on Trudeau and the Liberal caucus up in Ottawa to ask for their help in the election campaign. There was nothing then about a dispute over the Liberal Party’s interest rate policies. There was nothing then of a suggestion that the Liberal Party’s policies in Canada were wrong in terms of interest rates in Ontario. There was no admonitory finger waved at Pierre Trudeau or Mr. MacEachen and the rest of them, saying, “Look, if you fellows do not do something about interest rates, we do not want your help in the election campaign.” Oh, no, it was, “Yes sir, no sir.” It was, “John Munro, come and help. We need your help to elect the member for Hamilton Centre (Ms. Copps). We want her, please help us.” There was no talk about interest rates at that time, but “We want Jim Fleming’s help. We want Bob Kaplan’s help.”

But now the election is over the tune has changed. The Leader of the Opposition goes slamming away at the Conservatives, as he has every right to do, without realizing the fault has to be shared equally between the Tories in Ontario and the Liberals in Canada. They are equally to blame for the problems we are having in the small business sector, in the housing sector and in the farming sector today.

Interjections.

The Deputy Speaker: Order, please.

Mr. Cassidy: If the Liberals really meant what they said then, the Leader of the Opposition would have gotten on a plane a month ago and he would have taken a short visit up to Ottawa. He would have gone publicly to Pierre Trudeau and he would have said, “As far as I am concerned, the Liberal Party of Ontario cannot and will not support the members of this party who used to be our colleagues in Ottawa until there is a sensible interest rate policy in Canada.” But did that come forward? There was not a word. In fact, the Liberals in Ontario have studiously stayed away from interest rate questions as much as possible over the course of the session, because they were embarrassed by the actions of their federal colleagues until this time.

What is happening right now is this. It is transparent. About two weeks ago the member for Hamilton West and the boys, maybe even the boys and girls, got together and said: “My leadership is on the line. I have this convention coming up. I have to do something that looks good. What is going to be the issue?” I do not know what came up. Was it consumer protection? They have never done anything about that. Was it co-op housing? That is not their issue. Was it resources? The Liberal Party is as much in the pocket of big companies like Incos are the Conservatives. There are not very many areas where the Liberals are any different from the Conservatives at all.

The honourable member said: “We had better do something about interest rates. Let us put a no-confidence motion. Let us have this debate and let us have it just before the convention so I can look good.”

He forgot that when New Democrats were trying to get a continuation of the no-confidence motion we had put in this Legislature a month ago, his colleague the member for Brant-Oxford-Norfolk (Mr. Nixon), acting on behalf of the Liberals, was so obstructive it was impossible to have the debate continue. We could not see how it was possible to have the debate in time for the convention; so we are having it today.

What has happened over the weekend is that the honourable member has been presenting himself as the new champion of the left.

Ms. Copps: What happened over the weekend is that the NDP censured their leader. They censured him because he did not have the guts to carry out their policies during the election.

The Deputy Speaker: Ms. Copps, please.

Mr. Cassidy: The Leader of the Opposition has abandoned that time-trusted red hue of the Liberals to paint himself in a kind of west-end-of-Hamilton parlour pink and is trying to appeal to a left-wing constituency. I want to assure him that he and the Ontario Liberal Party are never going to succeed in the leftward direction that was painted on the weekend.

Left-wing parties around the world have always advanced the rights of workers. I cannot see any worker in this province accepting the hypocrisy of a Liberal leader who says teachers should not have collective bargaining rights and should not have the right to strike, but then says he is on the side of the workers when it comes to trying to get them homes of their own.

I remember this great champion of the left in 1977 and in 1978. Who voted with the government in the time of the minority to abandon the land speculation tax? It was the Liberal Party here in this House. Who is now saying there should be a speculation tax on those antiques, the stamps and the condominiums and all those other things? It is the leader of the Liberal Party. Which side is he on, 1978 policy or 1981?

This will be a bit ad hominem, but the man elected treasurer of the Liberal Party of Ontario over the weekend was a good friend of mine, Ian Kimmerly. He was a candidate for the Liberals in 1977 in the great riding of Ottawa Centre. Mr. Kimmerly, when he is not working on behalf of the Liberal Party, makes his living by selling stamps to serious collectors. Serious collectors are those who collect stamps because of the speculative gain they expect to get from them, among other reasons. Does the member intend to tax Mr. Kimmerly’s customers? I do not know. All the same --

Mr. Smith: I didn’t say we should make it illegal. It is known as capital gains.

Mr. Cassidy: Is he going to finance his entire housing policy on the basis of Ian Kimmerly’s customers?

I also remember that during the 1977 election campaign this champion of the left went around the province, pulled his pockets out of his pants and said to the taxpayers: “Not a nickel more. No more taxes. We have too much government. We have to move to the right.” That was the slogan back in those days. Now he has decided he wants to move somewhere to the left.

What is really happening is this: Over the course of the summer the member has decided to declare war on the remaining part of the leadership of the Liberal Party of Ontario. He was on CKFM today saying, “The Liberal caucus is more conservative than the party.” He also said Liberal members across the province were more reform-minded than the people whom Liberals actually elect to the Legislature.

What he was saying was: “Give me a mandate, and in six months after the convention next March, I will have the member for Niagara Falls (Mr. Kerrio) advocating a speculation tax of 150 per cent on every capital gain in Ontario. Six months after the leadership campaign next March we are going to have the people’s republic of Ontario, and it is going to be endorsed by people the likes of the member for Huron-Middlesex (Mr. Riddell), the member for Essex North (Mr. Ruston) and -- ”

Mr. Smith: The leader of the NDP has never shown such interest in me. Members of the third party must be really worried; we have them absolutely in a panic.

3:40 p.m.

Mr. Cassidy: It was quite a spectacle. They had guards in front of every door. The reporters were not even allowed into the chamber, the holy of holies, where the election post mortem took place.

I point out to the leader of the Liberal Party that the New Democrats had no such fears. We opened our doors wide to anybody who wanted to come in and see as we reviewed the results of the election campaign, even though those results were rather disappointing.

Interjections.

The Deputy Speaker: Mr. Cassidy, I am hesitant to call the members to order. You are being slightly provocative.

Mr. Cassidy: Mr. Speaker, I think the leader of the Liberal Party is being a bit provocative as well in suggesting that he wants to apply for membership in the New Democratic Party. We have never seen any support from him before. Why was it that for so many years when we were the second party, and even after we became the third party, his party was never prepared to support us when we put forward no-confidence motions?

Mr. Smith: For 18 months you were the second party, my friend.

Mr. Cassidy: As I recall, there were about 10 or 11 occasions when we had the chance to bring this government down and to bring socialism in our time to Ontario by having an election.

Ms. Copps: What happened to all your policies in the last election? They all went down the tubes.

Mr. Cassidy: The Liberal Party of Ontario held back. They were not prepared to take the heat. They held back like a bunch of shrinking violets. Now they try to blame the NDP for simply trying to spare the electorate, who would have two elections in a row and frankly were a bit weary of constantly going to the polls.

Ms. Copps: You spared the electorate your own policies.

The Deputy Speaker: I want to remind members that interjections are allowed under standing orders, but a running commentary is not allowed.

Mr. Cassidy: I do want to bring your attention, Mr. Speaker, to the fact that not only has the leader of the Liberal Party declared war on his caucus, but also he has declared war on the staff of the Liberal Party. What did he say here now?

Mr. Bradley: I am getting Saturday’s Globe and Mail to see what Donald MacDonald said.

Mr. Cassidy: That is okay. He said: “I was let down by those put in a position of responsibility. Organizers did not organize.” The myth-making is under way. “Stuart Smith will run for the leadership of the Liberal Party next March on the basis of a grass-roots appeal to rank and file Liberals. He will do so on the basis that they were betrayed in the election by the strategists who had the ‘We’re number 10’ campaign; that they were betrayed in the elections back in 1979 and 1980 and the early part of 1981 by organizers who failed to organize; that they were betrayed by a caucus that was out of synch or out of step with the people of Ontario and that only Dr. Smith has the true answers for the Liberal Party and for the province of Ontario.”

[Applause.]

Mr. Cassidy: Be it noted that the member for Hamilton Centre (Ms. Copps), the member for Prescott-Russell (Mr. Boudria) and the member for Yorkview (Mr. Spensieri) applauded, that the member for St. Catharines (Mr. Bradley) applauded and the member for Renfrew North (Mr. Conway) clapped his hands together very weakly. The other members all sat on their hands.

Just a bit of professional advice: I have never professed to be a psychiatrist -- I have always been a journalist and observed these things -- but when you go into a situation and you systematically say that the voters were out of step, the caucus was out of step, the candidates were out of step, the organizers were out of step, the strategists were out of step, that is called megalomania and that, I believe, is what has now seized the leader of the Liberal Party in this new leftism.

I want to talk a bit about the issue I raised in the House today, and I see that the Minister of Housing (Mr. Bennett) is still here. I say to the Minister of Housing that, even on the salary he may get after the pay raise at the end of this week, he would not be in a position at today’s interest rates, if he were going fresh into the market, to buy that modest bungalow in Scarborough; nor could he afford to buy it in Etobicoke, in Thornhill or in the centre of Toronto. If he came to a four-bedroom executive house with a family room, he might as well forget it, or if he came to the kind of house in which he is now living on Poplar Plains Road in Toronto, he might as well forget that as well, because that kind of housing is clearly out of reach.

The kind of housing that the Minister of Housing can live in is not of great concern to the vast number of the people of Ontario. For them, what is of concern is the kind of housing that they can afford to live in. For them, what is of concern is the fact that the price of housing has been climbing steadily out of reach and never faster than over the course of the last year. I pointed out in the House today, as I have pointed out again and again in the last two and a half months, just how rapidly those prices and the cost of ownership has been escalating.

The average price of a home in the Metro Toronto area, including the region of York, the region of Durham and the region of Peel is now more than $100,000, exclusive of condominiums. It is a bit less if one includes condominium town houses, but it is still up in the 90s or thereabouts. That means it is quite out of reach for the average family with the average family income in Metropolitan Toronto, which was $27,800 last year and will have risen to about $30,000 this year.

I just ask the members of the House and the government to tell us why the devil we should have confidence in them when they say the only housing that is going to be available here is going to be housing that for people with average income will cost them two thirds of their pretax income to afford.

Here are the figures: In June 1981, the average cost of that bungalow in Scarborough -- and those bungalows are modest, believe me -- was $120,000. If we assume 10 per cent down, the mortgage is $108,000. If people can afford to save 20 or 30 per cent of the down payment, more power to them, but it is pretty tough at today’s rents and today’s cost of living. If we assume 10 per cent down and a mortgage of $108,000, the principal and interest at 18.5 per cent will cost $1,623 a month, which is $19,480 a year. Taxes will add $1,200 to that; plus there is heating, maintenance and those kinds of things I have not reckoned in. Altogether, that amounts to $1,727 a month, or $20,730 a year.

The hospital workers, with their recent increase, have an average income of about $14,500 a year, and that is all. In other words, a hospital worker takes home two thirds of what it costs to afford a bungalow in the borough of Scarborough.

Over the course of last year the cost of having that house in Scarborough has risen by $9,500. If members want to reckon it, what has happened is that the cost of ownership has escalated for this modest home by 85 per cent in Etobicoke since 1980; by the same amount, about 84 per cent, in Scarborough since 1980; and in Mississauga, where the increase has been a bit less, it has escalated by about 40 or 41 per cent. Believe me, the incomes of people have not escalated by that much.

I opened my paper on the weekend, and in the Toronto Star they had a picture of the kind of house that the Minister of Housing says people should be moving into if they cannot afford that house in Scarborough. It was an extremely modest two-bedroom house on a tiny lot up in the area of Christie and St. Clair, a working class district. It was nothing special; it had no renovations, no cedar decks, no swimming pool, and no big backyard. There was nothing at all special about that house. It sold -- because that is what the market is like -- at $68,000. That means the cost of owning that house, if one had a 10 per cent down payment and paid for a mortgage at today’s interest rates, would be on the order of about $9,000 a year. That is for a house that plainly is not adequate for any family with more than two children, or even two children of the opposite sex.

3:50 p.m.

The minister may want to get up in this House and say: “That’s okay. A family of six could live there. You put a couple of kids in the dining room and a couple of kids in the living room, one in the kitchen, one child in the extra bedroom, and the parents can have a room to themselves. That is the way people used to live in the Depression; that is the way people used to live in the slums of Cabbagetown.”

But, by God, I thought we had come to the point here in Ontario in the 1980s where people could have decent living accommodation, which means having at least three bedrooms for the average family so that everybody can have a bedroom of his own or, if there are two kids of the same sex, they can share. Surely that is the minimum we can ask for now, and not those kinds of slum conditions.

Is that what the member for Ottawa South (Mr. Bennett) expects to live in? Would he be prepared to live in those kinds of conditions? Would he want to have a flat over a store down on Queen Street in Toronto as his lifelong accommodation? Is that what he is recommending?

People live in those conditions. The people who live in those conditions are saving because they would like to move out of those conditions. In many cases they are able to, or have been in the past; but now the route by which one can get out of those kinds of conditions and have a decent house of one’s own is blocked. It is blocked when one needs an average income of $70,000 or more to be able to afford the average home.

The minister must surely be wide awake enough to know that there are no houses selling for less than $40,000 that are adequate to house a family. We went through this when the minister said there were 400 houses selling for less than $40,000 through the Ontario Mortgage Corporation and then had to admit that his figures were wrong, that many of the houses selling for less than $40,000 had only one or two bedrooms and that a number of those that he thought were selling for less than $45,000 were selling for $45,000 or more and were as far distant as Oshawa or beyond.

It is no good saying there is cheap housing up in Pembroke if the people who need the housing are here in Metropolitan Toronto. It is no good saying there is cheap housing in Barrie if people are going to have to pay $1.75 a gallon today for their gasoline and if next year or the year after they will face gasoline costs that rival what people in western Europe now have to pay for their gasoline, because they will not be able to afford to commute.

It is no use saying that people should live 50 miles away from their work if at the same time the Minister of Transportation and Communications (Mr. Snow) is desperately trying to get people to live closer to their work because we have a limited supply of fossil fuels in the ground which cannot be replaced and certainly should not be squandered on needless commuting. It is no use saying they should live 50 miles away just because this government cannot solve the problems of interest rates and ensure that people can have homes of their own right near where they happen to work.

It is time this government had an interest rate policy. It is time this government had a housing policy dedicated to the principle that New Democrats have fought for as long as our party has existed, which is that decent housing at affordable cost should be the right of every family in Ontario.

That is not a commitment we discovered in Kingston over the weekend of June 20, 1981. It has been a principle of our party so long as the NDP has existed. It is a principle that CCFers fought for since our party was founded back in the 1930s. It is a principle that democratic socialists have fought for the world over so long as democratic socialism has been a viable political force anywhere in the free world. It seems to me that it is about time we had a government that said, too, that decent housing at affordable cost would be a right for every family in Ontario.

When I say every family I include the people who are driving school buses up in the Parry Sound area and may be earning only $4 or $5 an hour; I include the refugee families who come to our country from Chile or Vietnam and who may have two or three people working but who have to work at the minimum wage or just above it to try to get a stake together and who now find that $75,000 or $80,000 is the minimum cost of a house on a transit line -- because they cannot afford a car either -- and I think those people have a right to have a home of their own as well.

I include those young families, the young men and women who grow up in communities like Windsor, Oshawa and Ottawa, whose parents were able to buy a bungalow for maybe $12,000 or $14,000 many years ago in the days when interest rates or mortgage rates were limited to a maximum of six per cent; that was as recently as 1962 or 1963. But it was a Liberal government in Canada which since 1963 has systematically removed those controls that used to provide long-term mortgages at prices many people could afford for the kinds of bungalows that today are selling for $100,000 or more in areas like Metropolitan Toronto.

The sons and daughters of the people who bought those bungalows in Scarborough 20 years ago are now grown up and wondering what is going to happen to them because they cannot get those interest rates. They cannot get the kind of access that used to be available to their parents.

They are now living in high-rises in Scarborough, on Prince of Wales Drive in my riding and in other parts of similar areas across the province. From their high-rise balconies, if they can afford the rent, they can look down on their parents’ homes or on bungalows of the kind their parents could afford and which they cannot.

They look to this government. They look to the Minister of Housing (Mr. Bennett) and they wonder when he talks about that bungalow being a dream home which they should not be able to have. They wonder when they hear talk about the new realities of March 19.

They wonder when the minister talks about the song and dance of people whose mortgage rates are going up. They wonder when the minister tries to blame the victims. With people now being compelled to leave their assisted home ownership program homes because of the rising interest rates, he lays the blame on those people themselves rather than on the lack of an adequate social housing policy by both Liberals and Conservatives.

While we intend to support this no-confidence motion because we have no confidence in the housing policies of the Conservative government, I want to make it clear that, in voting against the government on this issue, we certainly have no more confidence in the interest rates and housing policies of Paul Cosgrove, Pierre Trudeau, Allan MacEachen, Herb Gray, John Munro, Jim Fleming, Bob Kaplan and all those other federal Liberals any more than we have confidence in whatever policy the provincial Liberal Party of Ontario happens to have dreamed up this week.

Mr. Jones: Mr. Speaker, I am happy to participate in this debate on the no-confidence motion, recognizing at the outset that, while the opposition has never had much confidence in government or firm leadership, the people of Ontario as recently as March 19 demonstrated again and renewed their commitment to these key elements in the economic growth of this province.

Mr. Smith: I’m leaving if this is the best they can do. Could they not find a minister to support the government?

Mr. Jones: As the Leader of the Opposition departs, his main contributions at the early stage may well tie in with what is mentioned in all the papers, some of which the leader of the third party was just reading and commenting on, that he is shifting to the left.

He sure is, and it seems he is picking up some of the habits of members of the third party who always pretend that only they have concern for the people of this province on social matters, on matters of interest rates and other things affecting people in my riding and other ridings like it across this province.

He was caught up taking little shots at the hard-working member for Sarnia (Mr. Brandt), a member who serves in added capacities as well as in this Legislature. He serves as parliamentary assistant to the Minister of Labour (Mr. Elgie) and has every concern for the working people of this province.

I intend to spend some time speaking about the strength of our government’s direction of the economy and the effectiveness of our budgetary approach. What I want to do is tackle head on some of the nonsense which we on the government side have had to listen to over the course of the budget debate and indeed through the interim supply debate.

I recall the comments of the member for Ottawa East (Mr. Roy) the other evening -- I believe it was June 15 -- when he had some harsh comments for us over here when he was speaking about our deficit position.

He said: “Can you imagine the gall of comparing this administration with Leslie Frost’s? ... As far as I know, during the days of Leslie Frost there was never a deficit. To compare the two administrations is close to being sacrilegious.” Sacrilege or not, the first thing that Leslie Frost did upon becoming Premier was to draft a blueprint for economic growth that did involve a budgetary deficit.

Mr. Bradley: Are you bragging about that?

Mr. Jones: Yes, I am.

4 p.m.

Some years later, the last budget he introduced also contained a deficit, this time over four times larger. Between those years, Mr. Frost incurred budgetary increases as high as 16.8 per cent. Why did he do that? As a report of the Ontario Economic Council explained:

“In the 13 years prior to 1957, nearly two thirds of the province’s capital projects had been financed out of current revenue, but the province’s capital program had recently been so large that an increasing proportion of it had to be financed by borrowing. To the Ontario government and municipalities fell the responsibility of providing those essential services of education, highways, roads, hospitals and water and sewage works, without which urban development could not occur nor industry flourish. On them, in addition, devolved a major part of the task of maintaining an economic environment friendly to industrial expansion and creation of new employment opportunities.”

I hope that will serve as a helpful reminder of history to the member for Ottawa East when he refers to a former Premier such as Mr. Frost. I also hope it will not be lost on the member for London Centre (Mr. Peterson), the official critic for the Liberal Party. I am sure he sees himself as a self-styled expert on the economy. Last year, in talking about the Ontario Economic Council, the member for London Centre said, “I think a lot of their studies are a waste.”

Any study is only a waste if someone does not read it. With all respect to the Treasury critic for the Liberal Party, I think he would do well to learn a little bit about the province’s economic history and certainly to help his colleague at the other end of the front row.

As the Premier (Mr. Davis) observed in January of this year: “The strong performance of our economy in the past has been our greatest social achievement. It has created opportunities for the disadvantaged to advance, for families to educate their children and for the average worker to gain the security of home ownership and to have an adequate pension. It has enabled government to obtain the funds for fruitful initiatives ranging from health care to scientific exploration.”

It is astonishing that the Liberal Party has even called us here to argue the merits of our economic policy. It is a supreme irony while the federal Liberal Party runs a $14-billion deficit, while it virtually destroys through neglect any serious commitment to research and development in this country, while it delayed the introduction of a revised Bank Act for more than three years, while it swells the size of public service beyond reason and while it frightens foreign investment from this country; it creates high interest rates through all these things.

A moment ago, the Leader of the Opposition said it was not within his power nor within the power of this government, but there were things the federal government could do. As we debate his resolution today and look for programs to subsidize, we are talking about subsidizing the inflation created by our Liberal brothers in Ottawa.

On May 25, the member for London Centre talked about the unnecessary expenditures that could have been cut from this budget. He pulled out his shoebox and found an item here and there he did not like. He is the man who would singlehandedly balance Ontario’s budget, the fellow who says he knows where the bottom line on any page is located. I have searched Hansard, scrupulously looking for some reduction in government spending that would occur under that inspired wishful thinking of the Liberal Treasury critic, but it is not there. Like so much Liberal economic policy, it remains invisible to all but the most diehard of Liberals.

Hon. Mr. Ashe: Left-wing Liberals.

Mr. Jones: They could be left or right, one never knows; there are two brands.

None the less, a few details were mentioned. Anyone who talks as long as the member for London Centre does on occasion is bound to have said something, such as how he would deal with it. One of the comments that jumps out is the question of sales tax cuts which the member claimed were “election inspired,” in his words.

Far from being a cynical election ploy, as that member suggests, the temporary reduction in the retail sales tax did cause a surge of buying by consumers and business. I know the leader of the official opposition in his resolution disclaimed that it had any effect -- let alone any large effect -- but the facts speak for themselves. The temporary reduction of retail sales tax did cause a surge of buying by consumers and businesses. Retail trade in Ontario accelerated 17.8 per cent in the July-December 1975 period and nearly doubled the rate of the first half of the year. For the year as a whole, the rate of retail sales in Ontario outperformed the rest of Canada by almost two full percentage points. Yet this is the type of initiative that the economic visionaries of the Liberal Party would put at the top of their list for elimination.

The member for London Centre also talked about getting rid of white elephants. I gather that is his term for the sale of land through the Ontario Mortgage Corporation. That does not take into account the shifting composition of Ontario’s capital investments. That offered us capacity to increase investments related to economic development while holding overall capital spending in check. Over the period of 1976-77 and 1979-80, capital investment -- he can check this -- the member should know that capital investment related to the economy and the environment increased by 47 per cent despite an overall increase in capital investment of only 7.5 per cent.

The member for London Centre indicated that Liberal economic policy calls for a reduction in advertising, for example, which is another of his few suggestions of what we might do or where we might look for cutting of spending. Despite the relatively small saving that we could capture by that route, it certainly strikes one as being a foolish notion. I wonder if the would-be Treasurer has talked to his friends in agriculture and some of his members representing agricultural constituencies about eliminating that. I wonder if he has spoken to the member for Huron-Middlesex (Mr. Riddell) or others about eliminating the Foodland Ontario campaign or whether he is talking -- and I am sure he is not -- about doing away with our poison control program aimed at children. That is not a waste of public funds. As one looks at these proposals, they are the only things I see the member being specific about in his remarks on the budget debate and on interim supply.

The same Treasury critic also complained about the cost of debt servicing. Funded debt stood at around 18.1 per cent of personal income in the 1972-73 period. It has actually declined to around 17.1 per cent for the current fiscal year. In 1945 -- seeing that others were talking about history here not long ago -- it required 21.6 per cent of provincial government revenues to meet the cost of debt servicing. Today that number is down to about 9.6 per cent.

4:10 p.m.

Since becoming the parliamentary assistant to the Treasurer (Mr. F. S. Miller), who was the architect and the drafter of this budget, I have had an opportunity to become familiar with some statistics of the economic performance. I would like to share some of them, because we certainly have had some distortions in the debate leading up to, and even in the course of, this resolution put by the Leader of the Opposition.

We have heard about the poor state of capital investment in this province. In 1980, though, business investment in Ontario increased by 18.8 per cent. Investment in the manufacturing section went up to 34.5 per cent of an increase. For 1981 intentions call for a further increase of 17.1 per cent in business investment. So we are forecasting real growth this year of 2.4 per cent and the creation of 106,000 new jobs, with a corresponding drop in the unemployment rate to 6.6 per cent from the current rate of 6.9 per cent.

Mr. T. P. Reid: We will believe that when we see it too.

Mr. Jones: We have had it over the last five years, where we averaged 100,000 new jobs. If the member will listen a second, he will hear another interesting and very current statistic that shows how it is on time. As a matter of fact, Mr. Speaker, I can share with you in the case of current statistics the actual figures for the month of May. The Ontario unemployment rate in May was 6.2 per cent, down a substantial 1.5 points from a year earlier. Total employment increased a remarkable 179,000 from its level a year earlier. The actual number of unemployed declined by 60,000 from the May 1980 level. These numbers are early indications that directions undertaken by the Treasurer in the November 1980 mini-budget, and followed through in the 1981 budget, will sustain this province’s economic growth.

Mr. MacDonald: That is statistical indigestion.

Mr. Jones: The member can tell. There is the direction. It is coming on. As the Treasurer himself stated in his budget, it is a realistic one which takes into account the many priorities this province must address in the economic environment in which we must operate. It reinforces the fiscal responsibility for which this province is well known. It will ensure the continuation of Ontario’s envied status as a place in which to work and live. That is in contrast to the continual downer -- while not minimizing the problems we have in our economy -- we heard through the election campaign and ever since this House reconvened. We hear the same echo of the election about our tenth place and all that has been part of that dialogue.

We heard from the member for Renfrew North (Mr. Conway), who is here. He had some harsh words for the government the other night on, I believe, interim supply. It is not normally his custom, but there was almost a meanness of spirit about it. It was no doubt temporary, and it might have been induced by the trials of the electoral process. I am not sure. But it caused him to call Ontario’s Board of Industrial Leadership and Development program a bribe. He talked about setting one member from one riding against another member and so forth. He made a petty accusation that does him and his party very little credit, I would think.

Moreover, if the Sunday Sun is accurate in its reporting of the private meetings of the Liberal convention delegates this weekend, then the Liberal leader now acknowledges the futility of that economic negativism that the people of Ontario really do not find palatable. They would rather we, as their representatives, get on with a more positive outlook and do the job, rather than concentrating only on the negative over and over again. But perhaps the member, an otherwise honest and generous man, will come to understand our continuing need in this province to direct a highly sophisticated and diversified economy by means of a selective and integrated investment strategy with an adequate time horizon.

This is exactly what the BILD program promises the people of Ontario, and we certainly intend to keep that promise. Part of the promise involves the offering of incentives to the private sector where important gains are possible. While the Liberal Party may object to the grants we offered Ford in the past, we believe in a continued partnership of business and government to create jobs and expand the economy.

That is why the BILD program will be offering incentives to growers, to assist them in expanding their crop production. Ontario has the largest, most diversified agricultural sector in Canada, while still having untapped capacity to expand current exports.

Because of the province’s strategic location and its efficient farming sector, an entire new high technology industry based on agricultural commodities is possible over this next decade. So the BILD initiatives in the areas of food processing, storage facilities and the crop production incentives I mentioned will help ensure accelerated growth in this sector.

The member for London Centre, in his capacity as the official critic of the Liberal Party, which put the resolution today, has dismissed the BILD program as -- I think he said it was vague, and he says that in many cases it was ill conceived. Is it ill conceived to prepare Ontario for the transition to an economic system in the 1980s based increasingly on electrical power and nuclear technology? That is what BILD does.

Mr. T. P. Reid: Mr. Speaker, on a point of order: I have listened to the member with a great deal of patience, if not always interest. He is, first of all, not speaking to the motion of no confidence on the Order Paper, motion 18. He seems to be under the misapprehension that this is the budget debate and this is the motion put by our financial critic in regard to the budget.

I would bring his attention to the fact that it is actually a motion of no confidence put by the leader of the Liberal Party. Would he please address himself to the matter of interest rates rather than regurgitating a budget speech he has obviously given already.

Mr. Jones: Mr. Speaker, I resent the member’s suggestion that this is a speech I have already given. I do not know how this could be when I am talking about the discussion and speculation in the newspapers about the leadership of the Liberal Party.

The way the resolution he refers to reads, motion 18, as presented under standing order 63, “the failure of the government’s budget to provide immediate” and soon, it is the failure of the budget that has brought the Leader of the Opposition in here to lecture this party about small business, to criticize the budget of 1981 that was brought in by our Treasurer -- who knows something about small business, believe it or not.

When the Liberal Party speaks to us about standing up for small business, having concern about high interest rates -- that is the point I am making --

Interjections.

Mr. Speaker: Order.

Mr. Jones: It is so ironic that members of the Liberal Party would come in here and condemn us and take up our time with this motion of no confidence when it is a Liberal government in Ottawa that created all the problems. It is the one that caused inflation, fueled it and fueled it, and has something like a $14 billion deficit. Yet they presume to lecture this government that sits on a program of constraint and restraint, while still providing high quality service to the people.

Ms. Copps: What high quality service? What service?

Mr. Jones: That is what we are talking about. The Liberal Party seems to be off track, not only in this debate but in all matters to do with the budget. Here they are bringing a resolution of no confidence based on it, and they wonder why we point out things they obviously missed in the budget. Even their official critic of the Treasury seems somehow or other to propose that they bring down this government and replace it with his own party. We have to wonder whether he read the thing at all.

4:20 p.m.

Our job is to prepare Ontario for the transition to the new economic realities of a new decade. Of course, we are doing that, and that serves the people of Ontario in a variety of ways, whether in regard to secure pensions in the future or higher interest rates -- a problem that really does belong in Ottawa, to be sure. We are doing our part at this level in this province, and we are doing so very well with a well coordinated program as outlined in that budget, which happens to have as one of its main themes a program called the Board of Industrial Leadership and Development.

It is astonishing when they dismiss our BILD program. They may not like it over there that we talk about their Liberal Treasury critic, but he is the spokesman for their party and he is the one who rises in this House and dismisses something as basic and as complex, and as well received, incidentally, by the people of Ontario, as our BILD program. These were his words --

Ms. Copps: The member says he has a basic and a complex program.

The Acting Speaker (Mr. Cousens): Order.

Mr. Jones: Will the member for Hamilton Centre just listen for a half a second? These are the words from over there: “The Ontario Liberal Party has been calling for a comprehensive, co-ordinated industrial strategy in this province, and we believe a strategy must be developed and a set of objectives delineated.” Now the member for London Centre is back, and they say we should not talk about him or his proposals under the budget. But he must be the only person in Ontario not to recognize that at the best he is reinventing the wheel when he puts this into the debate --

Ms. Copps: Getting back to basics means something that people can understand. Like the ad valorem tax it is --

The Acting Speaker: Order. Mr. Jones has the floor.

Mr. Jones: The BILD program focuses on four key objectives: jobs, diminished inflation -- and if that has not got something to do with interest rates and the ability to buy homes at all earning levels then I do not know what has -- trade and productivity. BILD has identified six major themes as priorities for cohesive and comprehensive economic development. They are electricity, transportation, resources, technology, people and their communities. So it consolidates and co-ordinates the government’s total economic development effort, it will provide a focus for economic liaison with the federal government and with other concerned interests and it will ensure maximum participation and support for Ontario’s development initiatives.

So the sound and progressive management of the provincial economy under Leslie Frost is something even Liberals today applaud. I suggest that in the decades to come there will be Liberals of today who will look back at the current period of economic leadership, at what today remains a little obscure because of partisan considerations, and will recognize that there are some parallels between the programs of a man called Frost and those we are seeing brought in for this era and for the coming decade, programs that will give leadership that will help the people of Ontario to continue to benefit under the kind of government they have received from Conservatives in this province and will continue to receive as we go into this new era of the 1980s.

Mr. T. P. Reid: Mr. Speaker, I was quite interested to hear the parliamentary assistant’s comments in regard to interest rates. It is interesting that in fact he hardly dealt with the no-confidence issue at all, and the very basic fact that what this is all about simply is that there are people out there in Ontario society today who are suffering from the impact of high interest rates, that they are liable to lose their homes, that they are liable to lose their farms and they are liable to lose their small businesses, because among other people who will not act on this -- and I do not absolve the federal government -- they, as the government of Ontario, the cabinet minister who is with us this afternoon, the Minister of Education (Miss Stephenson) and her colleagues, are refusing to do anything about this.

I tried to rise this afternoon during the question period to ask the Minister of Housing (Mr. Bennett), who responded to questions from this side about the high interest rates and the dream, as he called it, of owning a home, if he was prepared to do anything at this time. My question was: How many people have to lose their homes before the minister does something about it?

I am not talking about the people who have built or bought a $500,000 home or who, in the last mad scramble, bought houses at the current interest rate. I am talking about those people who bought a home when the interest rates were 12 and 13 per cent and logically could have believed they could afford to keep up those payments given a moderate level of inflation and they could handle those carrying charges. Nobody foresaw the interest rates. I suppose we would all be multimillionaires if we ever dreamed interest rates would go this high in this period of time. But they did and these people are suffering -- home owners, small businessmen, farmers.

I have farmers in my riding who are going out of business or, in fact, cannot get into business. Let us deal only with those who were affected by the high interest rates through no fault of their own, and yet there is nothing being done or even suggested by the government to help them out.

I am not one of those who feels that everybody should be helped out in every conceivable way and under every conceivable circumstance, but the vast majority of these people of Ontario who are suffering from these high interest rates, particularly in these three categories, are suffering through no fault of their own. If it is not their fault, then whose is it? Who has a vested interest in inflation? Who has, and has had for some time, the levers of fiscal policy to do something about inflation in this province? The people sitting opposite.

Again, I do not absolve the federal government, but this government has to share the blame for the high deficits that are continuing under this Treasurer (Mr. F. S. Miller), who has no idea. He should have stuck with Santa’s Village, with all respect.

Hon. Miss Stephenson: You should stick with the reindeer, because that’s what --

Mr. Peterson: That is all Santa’s Village is, one scruffy reindeer in a cage.

Mr. T. P. Reid: The reality is -- a word that will perhaps get somebody’s attention over there -- that every government in Canada, including this one, has a stake in inflation and therefore is not prepared to do anything about it, because as inflation continues, government revenues go up and they can afford all the waste and mismanagement that the people opposite have and which we see day after day.

Mr. Jones: No, that’s wrong. The Treasurer explained that to you. You intentionally want to visit that on the people.

Mr. T. P. Reid: Certainly they have a stake in inflation. The most obvious example of that stake in inflation is the ad valorem tax on gasoline. The Treasurer in his openness sometimes admits that in fact the government is going to gain every time the price of gasoline goes up for whatever reason. But for him to also say at the same time that is anti-inflationary just does not make sense. Anybody knows that if one increases the price of something, whether one calls that cost push or demand pull, that is inflationary. What does that mean?

Mr. Grande: Speak to the interest rates.

Mr. T. P. Reid: My friend from the Socialist party yells, “Talk about interest rates.” They are obviously economic ignoramuses and always have been, because the high government expenditures add to inflation. The more demands that governments at all levels put on the economy, the more --

Mr. Philip: Your promises were more expensive than ours in the last election.

4:30 p.m.

Mr. T. P. Reid: We were talking about creating wealth. The NDP talked about doing nothing but spending it.

Mr. Philip: What about all those giveaway programs?

The Acting Speaker: Order.

Mr. T. P. Reid: What programs?

Mr. Philip: All your giveaways, all your promises.

Mr. T. P. Reid: If we could outpromise the NDP, we must have been doing a good job.

Interjections.

Mr. T. P. Reid: The point is, Mr. Speaker, my friend the member for Oakwood (Mr. Grande) sees no relationship between government expenditures, or even private expenditures, the rate of inflation and the high interest rates. One does not have to be very bright and one does not have to read the papers very often --

Interjection.

Mr. T. P. Reid: The member for York Mills (Miss Stephenson) does not see any relationship?

Hon. Miss Stephenson: You said somebody did not see any relationship.

Mr. T. P. Reid: The member for Oakwood, yes.

Hon. Miss Stephenson: I understand.

Mr. T. P. Reid: Does the government understand? Why then does it continue with its inflationary policies, its ad valorem tax, increasing the rate of inflation, and therefore requiring, at least in the federal wisdom or Mr. MacEachen’s wisdom, a high interest rate to dampen demand on various commodities, to maintain our dollar at some kind of a reasonable exchange rate, and presumably to attract investment funds, both short term and long term, into Canada? That is what is going on; and I agree, and I will say it again, the federal government is just as guilty as the Ontario government in adding to and fuelling inflation, because it does not suffer from it. It can always increase taxes, but as inflation goes up obviously it gets a bigger share of the pie with which it can pay for all its programs.

Do not tell me this government is not part and parcel of the problem of inflation in Canada today. It is part and parcel of that inflation, because it is adding to it. It has a responsibility and we as a chamber have a responsibility to protect as much as we can the people who are directly affected by inflation, which leads to the present high interest rates. People needing protection include, for instance, senior citizens; it is always the people on fixed incomes who suffer most from inflation.

This government and the parliamentary assistant cannot sit there and tell me this current budget deals in any meaningful way with inflation. The parliamentary assistant cannot sit there and tell me the fact that we still have over 85,000 civil servants in Ontario is in any way dealing with inflation.

Hon. Mr. Bennett: How many?

Mr. T. P. Reid: Over 85,000, according to the government’s own figures.

Mr. Jones: Five thousand less.

Mr. T. P. Reid: Five thousand less since their last bulletin?

I have been the chairman of the public accounts committee for a number of years and we always hear from across that side: “What would you do? How would you cut the government deficit? What programs would you cut back on?” We have already heard reference to $600 million and the former Treasurer, John White, who had a dream in the back of his limousine about buying all this land in Ontario. I am sure the present Treasurer would love to have that $600 million today. I am sure the Minister of Housing would love to have that money. Then he would not be so embarrassed to get up here day after day and say, “There is really nothing I can do because the resources are not there.”

A little thing like the matter of St. Mary’s Health Centre is something that really annoys me, quite frankly. The government and the civil servants within the Ministry of Health, particularly Dr. Suttie and Mr. Berry, were not concerned about the moneys that were being paid to St. Mary’s Health Centre. That was just a drop in the bucket, and they were not concerned. It is interesting as a sidelight that an all-party committee took very great issue and exception to the way Dr. Suttie and Mr. Berry responded to the public accounts committee. I raise that for a particular reason, because there is a lot of waste and inefficiency in this government. It has always frustrated me, as a meopposition, that the public does not seem to know that, or perhaps because the press does not care about it and never bothers to make an issue of it.

If the government wants to know where it can save money, it might look at those people who are efficient and inefficient in government. It might look at the minutes of the standing committee on public accounts over the last couple of years, at the remarks about some of the civil servants and how they are not performing, but are getting performance bonuses anyway because they happen to be there.

I do not mean to malign all the people in the Ontario public service. We have some of the best in the world. But we also have some who are costing the taxpayers money, which itself leads to inflation and the concomitant result of ultimately higher interest rates at some point down the line.

The government might look at those items. In some manner, it might cut back from 85,000 civil servants. It might weed out the ones who are not performing. We might cut the budget somewhat, and in our way we might help to bring down the level of inflation.

Obviously, we know this no-confidence motion is not going to pass. The reality of March 19 is that there are more of them than there are of us. But we are doing this at a time that probably can be referred to as the dying days of this Legislature to try to underline our concern, not just as opposition members but also as individuals representing constituencies where people are coming to us on an individual and day-to-day basis, saying: “I can’t keep on farming. My son can’t go into farming. I am going to lose my house because I have been temporarily or maybe permanently laid off.”

I have small businessmen who cannot stand a 19.07 per cent prime rate or bank rate, which means they cannot even get it at those prices. Sometimes we all think they are making a lot of money, but usually they are operating on the margin.

As an individual, I am standing here trying to impress upon the parliamentary assistant and anybody else who cares to listen that this is not just something coming from the opposition as such, but that we are dealing with real problems.

My fear is that, when we are adjourned, we are not going to have any programs in place for any of the people in these sectors. We are going to be off for the summer. There is not going to be any pressure on the government, which is still feeling the effects of March 19. We are not going to deal with these problems in a realistic way.

I say to the parliamentary assistant, he himself must have people coming to him and saying, “I have these problems.” Surely it is not outside the power of the 70 or so people on those benches and the 85,000 civil servants the government has to back it up to come up with some program that does not necessarily have to be a 100 per cent subsidy to everybody but at least will deal with those real hardship cases where people might lose their businesses, their farms and their houses.

Mr. Philip: Mr. Speaker, I rise in support of the no-confidence motion before the House. As NDP Housing critic and as an MPP for a riding that has experienced a significant increase in housing prices and interest rates, and as an MPP who has seen the suffering on the faces of the people coming into my office not knowing what to do and asking me to negotiate for sign-backs with mortgage companies, I cannot help but identify with the motion.

4:40 p.m.

A significant number of those who already own their own homes either have experienced or soon will experience serious affordability problems. According to Canada Mortgage and Housing Corporation estimates, 200,000 mortgages will come up for renewal this year in Ontario. Of these, 135,000 were negotiated or renegotiated in 1976, when interest rates were an average of 11.78 per cent and 25,000 were purchased at 10.6 per cent in 1978. With the present bank interest rate now up, the burden of mortgage payments will prove too heavy for many home owners who will either have to sell or default on their mortgages. We see this happening on a regular basis.

Monthly payments for principal and interest alone will increase by more than 50 per cent. Monthly payments on a $50,000 mortgage at 11.75 per cent are $507.23. On the same mortgage today, worked out at about 18 per cent, monthly payments are $733.19. Thus, the annual increase in mortgage payments is more than $2,700. Clearly, we must conclude that a housing affordability problem exists and is becoming more acute for a significant number of our constituents.

In November 1980, it cost $916 a month to keep up the monthly payments -- that is, for principal, interest and taxes -- on an average-priced home selling for $77,275 in Metropolitan Toronto. That was assuming a 10 per cent down payment. To carry the principal, interest and taxes on such a home a household required, at the very least, an annual income of $36,600. The median household income in Metropolitan Toronto is just over $27,000, and the average industrial wage is just over $17,000.

By April 1981, the average price had jumped by $10,360 or 13 per cent. This average includes all types of dwellings; town houses, condominiums, single-family dwellings and so forth. When only single-family homes are included, the average cost of a house in Metropolitan Toronto was already more than $100,000 as of April of this year.

Mortgage interest rates rose from 14 per cent to 18 per cent in the same period and there is little indication that the crisis is subsiding, although it has fluctuated by part of a percentage point in the last few weeks.

The result was that last November a family required an income of $36,600 to afford the average-priced home. By April, the income required was more than $50,000.

To put it bluntly, last November an MPP could no longer afford an average-priced home in Metro, Last month, a cabinet minister had only $3,000 more income annually than the minimum income required to afford the average-priced home in Metropolitan Toronto.

The problem of housing affordability is not just a matter of interest rates, as indicated in this motion. It is also a problem of excessive speculation in the marketplace. In this regard this motion is clearly silent. It is little wonder that this is the case, for many members will recall that it was the Liberal Party in the last House that voted with the Conservatives for the removal of speculation tax.

We, in this party, do not believe in piecemeal resolutions or piecemeal answers. Therefore, in this session I introduced a resolution in the Legislature that calls upon the government of Ontario to take immediate steps to provide more affordable housing. The resolution would introduce a speculation tax to take away speculative profits in housing, establish a legislative committee to deal with the inflow of foreign capital in Ontario’s housing market and commit the government to the production of more affordable housing. The text of the resolution is as follows:

“That, in the opinion of this House, the government of Ontario should take immediate steps to develop programs and introduce legislation designed to alleviate the current housing crisis evidenced by the rapidly increasing price of houses and diminishing stock of decent, affordable houses in Ontario and that, in particular, the government should:

“1. introduce a housing speculation tax in the assembly to tax away the speculative profits made by persons who buy and sell housing and land (for the purpose of making easy profits in a speculative market), but that includes a specific exemption for home owners selling residences they occupy and for long-term investors who provide affordable rental accommodation;

“2. sponsor the establishment of a select committee of the assembly to inquire into and assess the impact of the flow of foreign speculative capital in the province’s housing market; and

“3. establish effective housing programs to produce and upgrade the stock of decent, affordable housing in Ontario.”

Royal Trust has released the results of its latest house price survey. Here is how prices have moved up on house number one, which they describe as a fairly modest house. It is a detached, three-bedroom bungalow constructed partially of brick with wood, aluminium or stucco. It is five to eight years old and has one and a half bathrooms, a one-car garage, a full basement but no recreation room, fireplace or appliances. It is a fairly modest house.

Taking that type of house, we see that in June 1980 one could purchase that in Bramalea for about $71,000. By June 1981 that same house was $105,000. In my own area of Etobicoke, we are talking about $91,000 in June 1980 and $130,500 in June 1981.

I see the member for Mississauga North (Mr. Jones), who feels everything in this budget is right. In Mississauga, that kind of house was a little less expensive. It was $78,000 in June 1980 but rose to $100,000 in June 1981. I could go through all of it -- Richmond Hill, Thornhill, Toronto centre and so forth. Toronto centre is obviously more expensive.

What do these increases mean in terms of affordability? Let us consider the increase in carrying costs on the three-bedroom house in the cheapest Metro and district locations; that is, Etobicoke, Scarborough and Mississauga. If we assume the mortgage interest was 13 per cent in June 1980 and is 18.5 per cent in June 1981, and if we take the taxes as reported in the Royal Trust survey and a 25-year term with a 10 per cent down payment, then we come up with some interesting figures on what it costs to live in any of those jurisdictions.

I will not deal with them all, but I want to point out areas I have been closely connected with, Etobicoke and Mississauga. In Etobicoke, the price in 1980 would be roughly $91,000, with a mortgage of $81,900. There would be a yearly tax of $1,300. One would end up with a carrying cost on that average house of $12,135 per year or $1,011 a month. When one projects that into June 1981 with present prices, one is talking about a home that is now $130,500, with a carrying cost of $22,490 a year or $1,874 a month.

The yearly income to carry that Etobicoke home would have been $40,450 in June 1980, but in June 1981 it would be $74,967. I could do similar figures and show similar results for other areas, such as Mississauga. To take the Mississauga example, to carry that we are talking about a yearly income of $34,290 in 1980, compared with $58,223 in June 1981.

It is obvious the increases make affordable housing unaffordable. They make it impossible for the average family to get into the housing market now in this city or the surrounding areas -- even in Mississauga.

4:50 p.m.

I find it interesting that the provincial Liberal Party is the one that is introducing this motion. Perhaps they should speak to their kissing cousins in Ottawa. The Liberals’ slavish opting for the United States monetary policy has had an increasingly adverse effect on all sectors of the Canadian economy. The impact has been most obvious on housing, since the scale of borrowing necessary for most purchases makes the rate of interest charged, and hence the cash payment necessary to amortize the mortgage, several times larger than the original purchase price.

The high interest rate clearly has also had an effect on the construction of rental accommodation. That is a factor that has been ignored by Paul Cosgrove, the Minister of Public Works and the minister responsible for Canada Mortgage and Housing Corporation, when he called for the removal of rent review as the way of stimulating the construction of rental accommodation. Mr. Cosgrove does not understand it is interest rates that are at the root of the problem. He was not able to understand that in a debate I had with him on The Shulman File only a few months ago. Instead, he would rather blame it on rent review. Indeed, he was one of the great lobbyists for the removal of rent review.

If the Liberal Party in this province wants to talk to somebody about the problem of high interest rates and the problem of affordable housing, perhaps it should start off by speaking to Mr. Cosgrove, who clearly does not understand what is going on and does not want to take responsibility for it.

The government has attempted to stimulate rental construction with a subsidy program. But one must question whether it has been successful in doing so.

I see the Minister of Housing (Mr. Bennett) is here. He was good enough to respond to inquiries I placed on the Order Paper a couple of weeks ago -- questions 128 and 129. The Liberal Housing critic still does not understand that the Minister of Housing responded to that question. He keeps asking the same question over and over again.

My questions were very simple. Question 128 said: “Will the ministry list each application approved under the Ontario rental construction loan program? Will the ministry provide in its response the name of the developer, the exact location of the development, the municipality, the number of units by apartment size (one-bedroom, two-bedroom, three-bedroom) and the date on which the construction must commence under the terms of the program?”

The second question, 129, was: “Will the ministry list all its developments approved but not constructed under the Ontario rental construction loan program?”

Those questions were tabled on June 8. The reply came forth on Friday, June 19. I will not go through all the details of the reply. The Minister of Housing, when he has an opportunity to speak, may like to do so.

I see approval has been given for a total of 14,408 units. In acknowledging that, however, we must at the same time recognize that some town house developments are included in the totals approved, as well as a couple of residential/commercial projects. The vast majority are, I acknowledge, apartments.

Since the Ontario Mortgage Corporation, which administers the program, reports that 18,484 units are being proposed for the subsidy to June 9, there are some 4,000 units still under consideration or already rejected.

It is striking that only 2,237 units have been committed by OMC. That is a mere 15.5 per cent of the units approved as meeting the program criteria. They have also been given firm loan assurance, which is withheld until mortgage financing, building permission and so forth has been secured. Since it is presumably in this latter stage that the developers have been running into problems because of high mortgage interest rates and carrying costs for the bridge financing, we can anticipate that some of the projects that were approved will not be able to satisfy the requirements for the commitment of funds. Indeed, 34 projects that have been approved for a total of 4,375 units have now gone beyond the stipulated 90-day waiting period in which approval remains valid and during which information must be provided to meet the requirements respecting committed funds.

There are other members who wish to speak on this motion. I wish to take time with the minister at some future date to deal with more of the specifics of those questions and answers. I think it is fairly clear the government has failed to provide any relief or take any responsibility for the increasing interest rates. It is also clear that rising interest rates, which are the responsibility of both the federal and provincial governments, have had an adverse effect on the home owner who is increasingly unable to afford to own a home. They are having a serious affect on the rental accommodation market.

The person who wants to rent and the person who wants to buy have been very seriously affected by the negligence and incompetence of both this government and the federal Liberal government. I have no alternative but to vote for this motion.

Hon. Mr. Bennett: Mr. Speaker, I am pleased to have an opportunity as Minister of Housing to make a few comments in relation to the no-confidence motion, which obviously we will not support.

It has been interesting to sit here this afternoon and listen to the member for Rainy River (Mr. T. P. Reid), for example. He started out by accusing the member for Mississauga North (Mr. Jones) of getting away from the motion and talking about the budget rather than this motion of no confidence. Then he went into the area himself and talked about the budget, the budget criteria, how it came about and how it affected our society. He then --

Mr. Stokes: He is consistent in his inconsistency.

Hon. Mr. Bennett: I suppose the honourable member is right in that assessment, as he was when he was the Speaker. He was often right in his assessment of how things went around here.

Mr. Cooke: His assessment is right of your performance too.

Hon. Mr. Bennett: At least I am in a position where he can make an assessment. The member’s performance has been nil so far; so no one has yet had an opportunity of making an assessment.

I will speak to the item, Mr. Speaker. I listened to the member for Rainy River saying this government, along with the federal government, was in a deficit budget position and that we were contributing to inflation as a result of that. I recall he accused this government and the federal government of exactly that. He no more than finished saying that than he immediately started to tell us how we should enlarge the spending program of government in this province.

I realize the simplest thing to do when one is in opposition is constantly to accuse the government of not expanding, developing and increasing the programs of expenditure. It is very simple. I sit through estimates and I hear the same thing, but I seldom hear anyone in the opposition indicate to the government realistic areas where they would have meaningful application to the overall expenditure of government, meaningful application to decreases in expenditure. I listen and I observe exactly what is being said.

We heard this afternoon about the availability and the affordability of housing both from an ownership position and a rental position. We have heard for many weeks now that we should discuss a thing known as averages. The member from Etobicoke (Mr. Philip) mentioned it again today: the average price of a home.

I have said before in this House, and I repeat again, that I am not sure what the word “average” has to do with the housing market we are contending with in this province. It has little to do with it because, if he takes the very same listings and reviews them category by category, he will find that, in the upper price ranges of real estate transactions over the last year, there have been more and more in the very high price range of better than $175,000 per unit. When one throws that into the hopper and says, “Now we are going to average out,” it really brings little realistic values to the discussion.

5 p.m.

Mr. Philip: How many houses at $50,000?

Hon. Mr. Bennett: I said in this House before and I repeat it for the member for Etobicoke (Mr. Philip) -- and I sat quietly while he preached his sermon from the mount; so if he will just give me the opportunity, I will try to take about the same amount of time as he did -- when we get into averages, I want to use the thing that is most practical in life and that we seem to relate to in every age group, and that is automobiles.

If one takes an Oldsmobile, a Chrysler New Yorker and we add into that a Rolls-Royce, a Volkswagen and so on, and go down the line with some very exotic cars and find out what the average is, it has no more application in cars than it does in housing, not one bit.

We are dealing with the value or the price range of homes that are available. Obviously, if one has read the multiple listing service listings and a great number of other things Royal Trust and the Guaranty Trust and others have put out in their brochures, one will find very specifically categorized the value of the homes that were sold and how many there were in a particular price range, not by averaging, but specific price ranges.

I say that in this community there is an availability of housing. I would be less than realistic if I believed that everyone of an average income, as the leader of the third party has already said, could afford to buy in the downtown Toronto area.

On the other hand, I want to assure this House, and indeed this province, that not all of the policies, not all of the price ranges, start and stop with Metropolitan Toronto, or the downtown area of this community. Let us move out and away from Metro Toronto -- and I am sure that the member for Etobicoke, the member for Rainy River and others have looked at the situation we have in the marketplace in Ontario today.

If we look at housing prices and where they have gone from and to, over the last five years, while the average inflation from 1976 to 1980 was roughly nine per cent per annum, housing prices in the following communities averaged the following increases over that very same period of time --

Mr. Breaugh: Oh, now you are using averages.

Hon. Mr. Bennett: I am using averages in relationship to price increases.

Mr. Breaugh: I see. Now they are legitimized, let’s hear them.

Hon. Mr. Bennett: Well, I can become specific on the individual properties, as the member knows, but the fact is that we have the overall price increases that we have experienced in those communities.

In Hamilton, it went up five per cent over that same period of time. I am talking about the average increase over a five-year period, rather than trying to be specific in 1976 to 1978, because obviously the increase in any one year could not have been very substantially more than five per cent or the average would have been more.

Hamilton was five per cent; Kitchener was seven per cent; London was six per cent. I mentioned to the member for London Centre (Mr. Peterson) about the average increase in his community over the last few years. The average in Oshawa was three per cent, and I am sure the member for Oshawa (Mr. Breaugh) can attest to what has happened in his community because of an oversupply of units in certain areas.

Ottawa was up four per cent; Sudbury was up five per cent and Toronto, excluding the downtown core area, had an increase of six per cent.

As I say, that is taken across the board on the various price levels of units that we have been dealing with.

Again, let me come back to the subject that is most important today, the interest rates we are experiencing in Canada as far as mortgages are concerned. I suppose we could also talk about the interest rates that Canadians are experiencing on their personal savings accounts in banks which have also escalated at the same time as mortgage rates and other interest charges have moved along the way. But those are not to be discussed; we are only going to discuss the fact of interest on housing.

I do not think there is anyone in this province -- banker, politician or consumer -- who really enjoys seeing the interest rate rise to the position it has in the real estate market of Ontario at this time, 18.5 per cent and 19 per cent. But if we talk about deficit budgeting and then we talk about the government getting involved in some way to cushion interest rates, I only have to say that it is inflation chasing inflation, because that happens to be very clearly part of the inflationary spiral that will take place if governments federally and provincially try to subsidize, support or cushion the interest factor.

If I correctly read the motion today, not only does it relate to mortgages but also it goes considerably further afield into the farms and the business and small business communities.

Frankly, I have not suggested to our government, nor do I intend to, that we should get into an overall general subsidy of interest rates at this time in relation to mortgages. I do agree with the member for Rainy River that governments at the federal and provincial level have a responsibility to curb their deficit spending and to tailor their program. Some day, I suppose, realism will come about for those purchasing homes. I say that as criticism of government, because I did listen to the assisted home ownership program discussion by the leader of the new Liberal Party in Toronto today. He mentioned that AHOP was a great program that the federal and provincial government got involved in back seven, eight, nine years ago. It was a great program, I do not think anybody will deny that, save and except that the shock waves set in upon the first renewal of the mortgage.

People had been protected against the high interest rate of the day, had been offered an incentive by the federal and provincial governments to write down the interest rate by 1.5 per cent or two per cent, and then upon renewal, of course, the interest rate was about double what they originally took the AHOP home for. Some of those people, unfortunately, and we have read about them in the newspapers, have had to walk away from their units, because it is not within their financial capabilities to continue to carry them. I suppose if reality had been used in the first place, in some cases it might have been obvious five years ago that they were not capable of carrying those particular units, but because of government incentives and grants they were encouraged to get into that area.

I want to compliment -- and seldom do I do it but today I think it is appropriate -- the federal Minister of Public Works, Mr. Cosgrove, because I think he indicated clearly back on March 23 that there will be some difficulties for a very small group of people in AHOP homes where the gross debt service on their homes will exceed 30 per cent. He has offered a new program for this year to allow up to an additional $1,500 to help those individuals retain ownership of their property. He says there will be some 3,000 across all of Canada, which will be about a $1.3 million expense to the federal government. I compliment him in trying to afford those 3,000 families the opportunity of staying in their particular units.

Let me talk for a moment about the default rate in personal real estate in Ontario today. Very few financial institutions and mortgage insurance companies want to get quoted in that particular area -- I am not quite sure why -- but they give some information without naming their particular firms. We understand, according to those documents, that less than one per cent of the units up for renewal have actually come back in a default position. Indeed, I am told that the mortgage companies -- again I think through a certain degree of understanding, a certain opportunity to meet with provincial and federal ministers -- that are in the renewal business at the moment, where they are renewing a client, are offering mortgages at something between a quarter and a half of one per cent less than the market position at the moment. So it is easy for us to sit and be critical of the private sector, but in this particular case the private sector, in a great number of instances, happens to be lending out the money of some rather senior people in this province, who have deposited with the trust companies and mortgage companies and are anticipating a good return equal to what everybody else is getting in the marketplace.

Ms. Copps: Like the people in Astra Trust.

Hon. Mr. Bennett: I am not discussing Astra Trust this afternoon. I realize the member for Hamilton Centre has trouble keeping track of the subject at hand, but I will try to.

Let me go back just for a moment to what the member for Etobicoke was saying about what has caused some of the problems we are experiencing in housing. Certainly, we have had a very hot market in a lot of communities. I cannot altogether trace the origin of it. But in a relatively short period of time it took off and a lot of people got into it -- I say to the member for Etobicoke -- on a speculative basis.

But I do not buy the fact that this government should get involved in trying to bring into being something known as speculation tax, because our federal friends designed that many years ago, when it was known as capital gains. One is required to live in a unit for X number of days before one can claim it as the principal residence and avoid paying capital gains on a resale. Most of the people I understood to be trying to do some speculation, I have to say, were not in the single-family owner-occupied home; it was more in Bloor Street or in the Queen’s Park Place condominium we have over here at Wellesley and Bay Street. They were in that speculation market, which really did not touch anywhere close to the average income earner in any way, shape or form. But I do agree it is well to have a capital gains tax to try to curb, if possible, some of that heavy speculation.

5:10 p.m.

Let me go back to another point that was raised about an area which Mr. Cosgrove has already taken some recognition of, and we will. We keep analysing what portion of the 200,000 mortgages will be renewed in the current year -- out of approximately 1.3 million mortgages in existence in Ontario, about 200,000 to 230,000 will be renewed in the current year. We know that if interest rates were 15 per cent, about nine per cent of those people would spend better than 30 per cent of their gross income to maintain their residences, and their gross debt service charge would be in excess of 30 per cent.

At 17 per cent, it goes to 22,000, which is 10 per cent; and at 19 per cent it rises to 25,000, which is 11 per cent. I suppose if there is an area where governments have to zero in and have a very specific study and review and try to find some way, not singularly -- I think the private sector has a responsibility to participate with government as well -- that is the area in which our chances of finding some solutions federally and provincially must rest, not on a very general and overall position.

Let me touch on the rental situation because it was talked about as part of the overall program we are dealing with today. We have recognized in this province -- the federal government has not -- that there will be a shortcoming in rental accommodation, and we did move to try to find a program somewhat along the same line as the old assisted rental program that was federally and provincially participated in for about four or five years and brought a fair number of units on stream over a relatively short period of time. It was a good program because it had to be or it would not have had the participation in the industry that it had, not only in this province but across Canada.

A year ago, when I started talking to Mr. Cosgrove about trying to find something that would replace ARP, I met with a closed-door attitude. First of all, he said there was not a shortage of rental accommodation and I could not prove there was; and then he said it was not logical that we should move into this area as long as there was rent control or rent review, as the private sector would do it on its own regardless, because they would get their just rewards in the appreciated value of the units they would build.

Time went by and development organizations such as the Housing and Urban Development Association of Canada, the Urban Development Institute and the Canadian Institute of Public Real Estate Companies all came in to have discussions with us -- and they had them with the federal government as well -- to indicate the downside position they were experiencing in trying to build rental accommodation. After many months of discussion, with the help of the Ontario Mortgage Corporation and the mortgage insurance companies, the mortgage companies and the developers themselves, the organizations and people in the private sector who deal with the construction of units, met with the minister and we reviewed the matter at great length and came to the opinion -- and I say to the member for Etobicoke and the members for Metropolitan Toronto in particular -- that this likely was the most hard-hit area for rental accommodation in a middle and lower income factor.

So we brought in the Ontario rental construction loan program. Some would say it could have been greater. Any program from government could be greater, I am sure. The thing we are challenged with is a responsibility in trying to provide the units at the least possible cost to the taxpayers and the least detrimental position to the budget and long-term financing of this province.

I recall many hours of discussion with Mr. Shiff, who has been quoted in this House by members of all parties. I discussed with him what it would take to get his developments under way. I talked to the others, as I have already indicated. Canada Mortgage and Housing Corporation was consulted because it had to be involved in some way, shape or form when we designed these programs, because the insurance portion would likely fall to it over time.

In the original instance we offered $4,200 per unit, principal and interest free, repayable over a period of the last 15 years of the mortgage. It was based on the fact that we would be involved in the opening rents in the middle and lower income group, that we would have 15 per cent of the units that would be provided for rent supplement. We thought the program was worth while, and it must have been because we started out with 10,000 units and within a relatively short period of time better than 10,000 had been applied for, and we expanded the program to go to 15,000 units.

Over the next period of time, as the members all know, interest rates started to rise rather quickly. I say to the member for Etobicoke that when they started doing all of their cost factors in building these units and their cash flow positions on particular units, they started to find that as the interest rate climbed the cash flow position and the deficit factor increased substantially to the point where even the mortgage insurance companies were becoming somewhat concerned about their ability to offer an insurance program.

Over the last few weeks we have continued to meet with the organizations and we have now arrived at an agreement that I think will enable all 15,000 units to go under construction. I cannot say that they are all going to start tomorrow by any stretch of the imagination, because I am in the position --

Mr. Philip: Not one in Metro has started. How long does it take?

Hon. Mr. Bennett: Will the member for Etobicoke just sit and be patient? We listen to him as patiently as possible.

Mr. Laughren: The minister should not preach to us; he should just get on with it. He is part of the problem. He should just get on with it and stop sermonizing. We do not need him to tell us that.

Hon. Mr. Bennett: The lecture by the member for Nickel Belt does not add a great deal in the House this afternoon either.

Mr. Laughren: Mr. Speaker, I have not been lecturing.

Hon. Mr. Bennett: That is just what he was doing.

The Deputy Speaker: Bearing on this debate, Mr. Minister.

Hon. Mr. Bennett: I was saying we had looked at the program. We will be enhancing the program to the development industry and to those owners and so on who will develop rental accommodation across Ontario. The new program will give to the development $6,000, principal and interest free, along the same lines as we had developed it originally. Indeed, we will move the rental supplement program from 15 to 20 per cent. The interest rate is calculated on an interest rate factor of 18.5 per cent --

Mr. Philip: That only shows that the minister’s program was a failure in the first place.

Hon. Mr. Bennett: No, it does not. The member for Etobicoke would be the greatest giveaway artist. He would pay little or no heed to anything that goes on or to any advice given to him by the financial institutions. He would just go about it in his own interesting way. We were very strongly advised on why we should do the original program, and we did it. Four or five months ago no one would ever have predicted that interest rates would rise from 14.75 per cent to something close to 19 per cent at this time. No one would have predicted it, and the member opposite should not tell me he was the genius who would have predicted it, because he would not have.

Mr. Philip: No, I read the Financial Post.

Hon. Mr. Bennett: The Financial Post was taking a flyer at it, and they admit that they were not positive in any way, any more than any of the other financial institutions were.

I think our program today will afford an opportunity to get all 15,000 units under construction in the various parts of Ontario. While some developers were holding back because of the problems they were experiencing with interest rates -- as I openly admitted in this House some time ago -- I have been given assurance by those who have made applications that with the new program they can get them under development very quickly.

I want to say “under development” because I do not have the control as the minister, and the member for Etobicoke will know that, to secure site plan approval and building permits. That is something that still has to come through the municipalities; that is their freedom and their right. As soon as those are given I trust the units will find their way on to the market in a relatively short period of time.

The marketplace at the moment is not the most buoyant one by any stretch of the imagination. I have talked to the development industry in the last few days --

Mr. Laughren: You must be proud of it.

Hon. Mr. Bennett: The member for Nickel Belt says, “You must be proud of it.” I would suggest to him very strongly that it is a system over which this government has very little control. Indeed, I might even go so far --

Mr. MacDonald: Why does the minister support it so much?

Hon. Mr. Bennett: The member for York South knows very well that interest rates do not start and stop at the Legislative Assembly of Ontario. If he does not know that then I suggest he listen to the Treasurer (Mr. F. S. Miller) a little more closely. Indeed, he says it is our economic situation.

I suppose that if we had full control over the setting of rates it would be a rather interesting country of 10 provinces all going off in their own direction in the financial area of setting rates. I said earlier that there is no one in this House, no one in the industry and no one among the consumers who really enjoys high interest rates, but it is something we are experiencing.

Some rationalizations have been made this afternoon as to why the interest rate happens to be where it is. Some of the rationalization, I suppose, is absolutely correct, because, if the Canadian interest rate were less than it is now and less than the American rate, we would find an outflow of cash that would have even further detrimental effects on trying to provide financial support for industries, for home buyers, for the mortgage industry and so on.

5:20 p.m.

I said in my opening remarks that in the building industry at the moment things have cooled considerably. I talked to Bramalea Construction today and they gave me a rather interesting statistic. In the last two-week period, from a substantial development firm in our province, sales have cooled to the point they are virtually nil. As a result of a number of units being on the market and a number of people having surplus funds and wanting to put them into mortgage funding, that might have some impact from the private sector. It might show some decrease in the interest we will be experiencing in the mortgage world over the next period of time.

Mr. Laughren: The Speaker is laughing at you. Not even he believes you.

Hon. Mr. Bennett: No, he is laughing at you, I am sure.

In conclusion, my ministry has continued to review and analyse programs, to meet with the private sector and to meet with government at the federal level in hopes that we can try to stabilize the market position.

I sit in the minister’s chair and I hear people from the political world telling me we should not interfere or distort the private market. I listen to the private sector telling me government interferes too greatly on occasion. I take a lot of it to heart. I sincerely believe that government has interfered. Perhaps some of the problems we have experienced in high interest rates -- which are a shock to people -- have been a result of some of the government programs, federally and provincially, that have not been as well thought out as they might have been.

At this time when deficits are high and when we are all experiencing some increase in income, both personally and in the general economy of this province, one of the realities we will have to live with is the higher interest rates we are paying for money. This is true not only for individuals but for corporations, unions and pension funds. I suppose if one looks down the road in relationship to those, there are some substantial benefits that flow back to their members as a result of the interest rates we are experiencing.

Mr. Ruston: Mr. Speaker, we did not have arrangements made for the time so I wonder if the member for York South (Mr. MacDonald) could make his speech and we will take the balance of the time, if that is all right. Is that agreeable?

Hon. Mr. Bennett: If that is the arrangement to be made, then the balance of time between now and 5:50 p.m. should be divided three ways. We each have had two speakers and if the two opposition parties are going to divide the time there should be some left for the government as well.

Mr. Cooke: You have taken your time.

Hon. Mr. Bennett: Mr. Speaker, I would like you to check the record as to who spoke for what period of time so it may be recorded for the House.

The Deputy Speaker: The member for Essex North has withdrawn his proposal. We will continue with the rotation.

Mr. Stokes: It is not the responsibility of the chair to allocate time. That is the responsibility of the House leaders.

Hon. Mr. Bennett: I don’t disagree with you. That is the deal he was offering.

Mr. McGuigan: We are not going through with that deal, Mr. Speaker, so I would appreciate the opportunity to carry on for my party.

I am pleased to take part in this motion of no confidence. Most of my remarks will be addressed to the agricultural problems we have in Ontario at the present time. Our agricultural critic is not here today -- and we have to keep the food going.

Where are we in this economic situation? Other members have touched on it. We are following the policies of Milton Friedman in the United States. These policies are being followed in the United States, in the British Isles and to a lesser extent in Canada. Professor Friedman says, casting all other economic theories aside, whether it is cost push or demand pull or whatever, it is simply the money supply. The economy is regulated by the amount of money that is made available.

But where do we get the $200 billion required to put into energy systems, into pipelines, wells and the systems for extracting energy from the Arctic areas? Where do we get the $60 billion to $80 billion needed in the automotive industry to transform it so it can compete with and stave off the efforts of the Europeans and the Japanese?

He says: “Do not worry about the Japanese, just buy their cars. Do not try to make any cars in this country. Buy the Japanese cars.” What do we then do with all those auto workers? What happens to them? We certainly cannot employ them all in agriculture, forests or mines. Those industries are becoming mechanized. Those proposals may be great in theory but they have a lot of practical problems.

We are facing the same problems in our agricultural industry because it too has become highly capital intensive. To create a job on a farm today takes between $300,000 and $400,000. I am talking mainly about the owner, because most of our workers are owner-operators. In industry that figure varies from one industry to another. Perhaps a median figure would be $50,000 to create a job.

One can see the terrible time farmers are now having trying to cope with interest rates which in some cases run as high as 22 per cent. People listened to a report put out by this government in 1969 called the Challenge of Abundance: The Report of a Special Committee on Farm Income in Ontario. It has been the public policy of this province ever since to reduce the number of farmers, to try to get rid of those excess people. They said: “There are too many people in agriculture. We do not have jobs for all these people so we will get rid of some of them.” We have gotten rid of about half of them over the last 20 years.

The opposite side to that is it is enlarging the farm which is becoming more mechanized and more capital intensive. These people fell for it after listening to the advisory people from the government, to the bankers and to the Ontario Minister of Agriculture and Food making speeches around the province telling us what great and wonderful opportunities we had.

They bought their neighbour’s farm. They put up new intensive hog operations. They went into poultry production or whatever. They took on debts at six, seven, eight or nine per cent interest. Now they find themselves up against demand notes of 20 per cent to 25 per cent.

The banker comes to a farm and makes a deal. In many cases he offers, “Sign a mortgage with us and we will give you the money.” The farmer signs the mortgage but the banker does not give the money. They send the bailiff out in a day or two to take the farm away. It is happening mainly in the livestock industry among the hog and cattle producers. Cattle producers have not made any money for 60 months. The hog producers have not made any money for 34 months.

With every animal he sells, he sells a piece of his farm. Some of his equity is going with that animal. We finally got the present Minister of Agriculture and Food (Mr. Henderson) very reluctantly -- he only put his toe in the water -- to say, “We should go to supply management in the hog system.”

I am not convinced we should go to supply management because it has some drawbacks. We would have to cut our production by 17 per cent just to remain where we are. Seventeen per cent of our hogs go to the United States; a few go to Japan. To make some shortage in the market to raise the prices, we would have to cut production another 10 or 15 per cent. We are talking of cutting production up to 30 per cent, which would mean all sorts of problems with empty barns and the cost of those empty barns.

People in agriculture today are looking down the road. They hear all this talk about the supply management system coming in for hogs and they think, “I have to stay with it to get my quota.” There are a few other people who have other sources of income, perhaps even farm income because some other part of their enterprise is making money. They look down the road and say, “Quotas are coming and, therefore, I should increase my production.” When I asked the Minister of Agriculture and Food about making a statement and laying down the basis on which we would decide who gets a quota and how much, so these people who should go out of production and those people who are planning production should not go ahead with it, he gave me a lecture on the evils of supply management.

5:30 p.m.

I was not suggesting to him that we go into supply management. I was suggesting there were a lot of people in the industry looking to that, and the very man who had made a statement that he thought supply management was the answer came across with arguments that I thought were telling me about the evils of supply management.

We look at the cash crop farming in Ontario. These people are not in as bad shape as the livestock people.

Mr. Ruston: Yet.

Mr. McGuigan: Yet. That is the answer. When I was travelling from farm to farm during the election, I was in the farm yard of an older farmer. He had a very modest operation. He had just bought a new grain drill. It was not a large one. I can picture it in my mind now. It was about a 13 tube grain drill, or perhaps even a 15 tube, but that is a very modest piece of equipment. About 20 years ago one would buy it for about $300 to $400. He had just bought this brand new grain drill for $6,000.

It was interesting to note that pulling the grain drill was a 30-year-old tractor. He was not an extravagant farmer. He was operating with very modest equipment, but he did need a good grain drill to get the seed in the ground and the fertilizer placed properly to have a good crop. That very modest grain drill cost him $6,000 and that is the type of thing facing the grain people.

As an aside to this motion of no confidence, the government has not heard very much from the grain people but if they took a trip through the counties of Kent and Essex right now they would see the disaster we have on our hands in the way of excess moisture. There are fields that are absolutely flooded. There was water standing on those fields today. Some of them have been planted for the second and third time. I would say they would have to be planted a fourth time if they have a crop at all.

They are going to start hearing from some of these people. They have been very modest in their demands, but any of the members who were at the meeting of the Ontario Federation of Agriculture a couple of weeks ago at the Constellation Hotel would know that these farmers have been pretty docile as far as taking militant action, but if members listen to those people cry their hearts out and tell their stories they will know there are problems brewing out there in the country.

I have read newspaper accounts of people who are saying they are going to defend their farms with their lives when and if a bailiff comes. I would not want to give them any encouragement in taking such action. We must maintain the integrity of our system. If we borrow money we are supposed to pay it back. Nevertheless, it is an indication of the frustration and feelings that these people have at how let down they feel by governments.

I acknowledge it is not all the fault of this provincial government. These high interest rate policies are set in Ottawa, Washington, in London, England, and throughout the financial world. Nevertheless, this province owes something to the people who have given it so much in the way of food, in the way of saving and in the say of social values. These people see these social values going down the drain as their communities are disrupted.

I say to the Minister of Agriculture and Food and to the Treasurer (Mr. F. S. Miller) --

Mr. McKessock: Where are they?

Mr. Ruston: They are not here today.

Mr. Jones: They are working.

Mr. McGuigan: They will read it in Hansard.

Mr. Ruston: Let the record show they are not here.

Mr. McGuigan: I say to the people who extract a good deal of money from agriculture that they extract between $300 million and $400 million from the tobacco industry, which is one of our highly taxed industries, and yet the total budget for the Ministry of Agriculture and Food is only $191 million.

The minister takes a great deal of pride in pointing out that about half of that $191 million goes back in direct payments to agriculture. It does, but I point out that a good deal of that money should never have been taxed in the first place. The government now has acknowledged the money that comes from tax rebate should not have been taken in the first place. In the budget they are proposing that the tax assessment should be taken off farm land and buildings and that all the taxes be placed on the house. So the money that comes back is money that should not have been taxed in the first place.

I do not have a figure on it, but a lot of money comes back from the agricultural experimental stations. Gone is the day when such activity would involve feeding four steers in a pen as an experiment. Today one would feed 100, and those 100 animals might cost $400 apiece. When they are sold, they return $700 to $800 apiece, and that money goes back into consolidated revenue. It does not go back into the treasury of the experimental station to be used for other purposes. I wish to know how many millions of dollars go back to the Treasurer. That figure of $191 million is a good deal less than that final figure.

To outline how difficult a problem this is for farmers today, I think most members realize the average return in North America for the equity in farm land in good times is about five per cent. Of course, there are farmers who beat that, and there are others who get much less than that. But if one takes five per cent as an average and looks at the people who are paying 22 per cent interest on their money, he can see that if they have a debt a shade over 25 per cent they are working for absolutely nothing. There is nothing there for themselves, for their wives, for their families, for the future. All of that money is going to paying off the cost of interest.

Any farmer today who has a debt load greater than 25 per cent of his equity -- and there are many in that boat and getting to be more -- as he gets farther and farther behind as he goes farther and farther down the road, is in a situation where it is impossible to catch up.

Other speakers want to get on; so I am going to close. But this government owes a debt to the people who have raised agricultural labour productivity higher than any other sector in our economy. Over the last number of years, labour productivity in farming has gone up by four to 4.5 per cent a year. Other industries have gone up, at best, by 2.5 per cent. If one traces it back, he will find there are years when there was no increase in productivity. We have had a steady productivity increase of around four per cent in agriculture.

Today, when we are in trouble in this industry, we need a little return on the investment this industry has made in the province. I hope the Treasurer will act swiftly and do something with the promise he has of $50 million to $100 million.

I take great pleasure in joining with those other members of this House -- and I hope from all sides of the House -- in showing that this government does not have, and does not deserve, the confidence of the people, and especially the farmers, of the province.

Mr. MacDonald: Mr. Speaker, the longer this debate goes on, the more I am puzzled. The Liberal Party brings in a want of confidence motion which presumably is a serious challenge to the government. Two thirds of their members have not been around most of the afternoon -- it is near voting time; they are coming in now -- the second speaker gets up and chastises the first speaker from the government side about not dealing with interest rates, which was the specific point of the resolution, and the speaker from the Liberal Party who has just sat down, at best, had remarks that were peripherally related to the whole interest rate problem.

5:40 p.m.

I am going to take the advice of the member for Rainy River (Mr. T. P. Reid) and speak directly to the motion. I think it is a motion that is worthy of support even if the Liberals, by their actions rather than by their words, do not.

Let me begin with the Minister of Housing (Mr. Bennett), who by mistake is on this side of the House for a moment. This afternoon he made a comment, and I want to start with it. He said: “The responsibility for escalating interest rates rests not with this government. The Liberal Party in Ottawa created all the problems.” Okay, marginally I might argue with him, but for purposes of this debate he is dead right:

Ottawa created the problems. But it is the responsibility of a provincial government to cushion the impact where it hits hardest, and that is where this government has failed totally and, therefore, this vote on the no-confidence motion is justified.

Let me take the specifics, if I may, of farm policy. I thought the member for Kent-Elgin (Mr. McGuigan), who has just sat down, was going to steal all of my comments this afternoon, but he did not steal them. In his best philosopher’s fashion he wandered around a half a dozen topics and did not get to the specifics. Let us get to the specifics.

A year ago, this government professed that they were concerned about interest rates. What did they do? They allocated $25 million to subsidize interest rates to at least cushion them as far as the farmers were concerned. Let me say that $25 million is a peanut operation in terms of what is needed. Quebec, with half as many farmers, has spent $69 million in this past year to subsidize interest rates. It is a peanut operation in which this government has indulged.

It shows cynicism and colossal effrontery that they should allocate $25 million as they are heading towards an election when they are seeking farm votes and then, as soon as the reality of March 19 became acknowledged, they cancelled the program when only $5 million of the $25 million had been spent; they wiped out the $20 million that had not yet been spent. It was inadequate to meet the need, but at least it would have been a gesture that they had integrity in their policy. At least it would have been a gesture that they were willing to live up to the promise. But they wiped out the promise right after the election was over.

Let me move to something that is related, though not directly, to interest rates. I agree with members on the other side of the House when they contend that interest rates are not the whole problem. There are other aspects and policies that should be related to it.

Let me come to the second one in the government’s program. Away back in 1975, as this government became aware of the fact that everybody was concerned about the problems of young farmers being able to move into the industry, they decided they would assist young farmers. They were not going to give them a grant; they were just going to guarantee a loan so that if they needed the money they could go to the bank and it would be guaranteed and they would be able to get it from that Scrooge on the other side of the table, the bank manager.

The government introduced what was known as the Ontario young farmers’ credit program, which was to guarantee loans up to $25 million. That was in 1975. Now it is 1981, six years have gone by and how many loans have been guaranteed? Eight million dollars. The program is ineffective. I do not know why it is not effective, because I know there are young farmers out there who need the money. But something in the administration of the program or its promotion or something is not effective, because in six years they have lent only $8 million of the $25 million which they said they were going to guarantee.

Let me move to a third area. If they want to help farmers and if they want to argue, as the Treasurer (Mr. F. S. Miller) does and as the Minister of Agriculture and Food (Mr. Henderson) does, that interest rates are not the whole problem -- agreed, they are not the whole problem -- then what they want is a comprehensive agricultural program that is going to give the farmers the kind of backup that the basic industry, the primary industry in this province is entitled to. But they are not doing it. They have brought in a budget this year with $191 million for the 77,000 farmers in Ontario. To give some idea of how inadequate it is, take a look at Quebec, which has 43,000 farmers and a budget of $342 million. So Quebec, with half as many farmers, has a budget that is twice as big as we have here.

Mr. Rotenberg: How much comes from the feds?

Mr. MacDonald: Never mind how much comes from the feds. Look, the member talks about the legitimacy of the equalization programs. If Quebec gets that money from Ottawa because of its standards and the operation of equalization, then he should not go after Quebec in his fundamentally subterranean anti-French-Canadian and anti-Quebec approach. Let him go after Manitoba, which is getting money from the federal government that comes from Ontario. Let him go after Nova Scotia, with its Tory government, which is getting money that is coming from Ontario. He should not just go after Quebec --

Mr. Speaker: Mr. MacDonald, will you direct your remarks to the motion, please?

Mr. MacDonald: All right, Mr. Speaker --

Mr. Speaker: Speak to me.

Mr. MacDonald: I will try to avoid the interjections, but those interjections are so hoary and well worn that I thought it was time somebody answered them, because that is the answer one always gets from the other side of the House.

If the government had continued to spend at least the money it allocated before the election, at least it would have cushioned something of the impact of interest rates. If the government had an effective guaranteed loan program so that in eight years something more had been made available than one third of what it had guaranteed in 1975, then it might be worthy of confidence. If the government had an agricultural policy in which it was going to provide adequate amounts to sustain the industry along the lines that all other provinces were doing, then it would be worthy of confidence. But the government is not willing to do those things.

The most shocking aspect of it all is that the farmers and the people on behalf of the farmers have been coming to this government and pleading with them for three or four months. The Ontario Federation of Agriculture, as I pointed out, came in with a program that was effective, practical, prioritized -- everything the government wanted -- and yet after three or four months they got no action at all, not even a response to those specific proposals.

When the farmers a thousand strong, men and women, came into a hotel meeting in the Constellation a week or so ago, what did the Premier (Mr. Davis) do? He came down to lecture them: “Give us some practical proposals.” He had had them for two months. What did the Minister of Agriculture and Food do? He came in and said nothing. He just escalated his war with Ottawa with regard to stabilization programs. What did the Treasurer do? He came in and teased them: “I think we should have an answer to this problem,” said he, “in two or three weeks.”

Interjections.

Mr. Stokes: Mr. Speaker, I wonder if you could remind the cabinet that they meet on Wednesday, not on Monday afternoon.

Mr. Speaker: Order.

Mr. MacDonald: A few days afterward, when the press was badgering him, asking “What do you mean by your answer?” at that stage he said, “There is $50 million to $100 million available.”

How can this government claim that the farmers should have any confidence in them with that kind of record? Why should we not support a resolution, even though the Liberals are not very enthusiastic about voting no confidence in the government?

Mr. Speaker: Mr. MacDonald, I direct your attention to the clock.

5:55 p.m.

The House divided on Mr. Smith’s motion, which was negatived on the following vote:

Ayes

Boudria, Bradley, Breaugh, Breithaupt, Bryden, Cassidy, Charlton, Conway, Cooke, Copps, Cunningham, Di Santo, Edighoffer, Epp, Grande, Haggerty, Johnston, R. F., Kerrio, Laughren, MacDonald, Mackenzie, Mancini, Martel, McClellan, McGuigan, McKessock, Miller, G. I., Newman, Nixon, O’Neil, Peterson, Philip, Reid, T. P., Renwick, Ruston, Samis, Smith, Spensieri, Stokes, Van Horne, Wrye.

Nays

Andrewes, Ashe, Baetz, Barlow, Bennett, Bernier, Birch, Brandt, Cousens, Cureatz, Davis, Dean, Drea, Eaton, Elgie, Eves, Fish, Gillies, Gordon, Gregory, Grossman, Harris, Henderson, Hennessy, Hodgson, Johnson, J. M., Jones, Kells, Kennedy, Kerr, Kolyn, Lane, Leluk;

MacQuarrie, McCaffrey, McCague, McLean, McMurtry, McNeil, Miller, F. S., Mitchell, Norton, Piché, Pollock, Ramsay, Robinson, Rotenberg, Runciman, Scrivener, Sheppard, Shymko, Snow, Stephenson, B. M., Sterling, Stevenson, K. R., Taylor, G. W., Taylor, J. A., Timbrell, Treleaven, Walker, Watson, Welch, Wells, Williams, Wiseman, Yakabuski.

Ayes 41; nays 66.

BUSINESS OF THE HOUSE

Hon. Mr. Wells: Mr. Speaker, during the business statement last week I indicated we would add to it this week as things have been decided. It has now been decided the House will meet on Wednesday afternoon and consider legislation. On Thursday afternoon legislation will be considered rather than private members’ hour. We will follow roughly the order of legislation that was announced for this week.

NOTICE OF DISSATISFACTION

Mr. Speaker: Pursuant to standing order 28, the member for Parkdale (Mr. Ruprecht) has given notice of his dissatisfaction with the answer to his question given by the Minister of Housing (Mr. Bennett) concerning units approved under the Ontario rental construction loan program in Metropolitan Toronto. This matter will be debated at 10:30 p.m. on Tuesday, June 23, 1981.

The House recessed at 6:01 p.m.

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