Ontario—1961

DR. PHIMISTER: Our guest of honour today, the Honourable Leslie M. Frost, Premier of the Province of Ontario, has played a singular and unique part in the development of this province. Perhaps our guest is not unique in that his paternal grandfather took up land near Orillia in the year of Confederation, 1867. Other men's grandfathers have done the same. Nor is he unique in that he served his country overseas in the First World War, although he was wounded by a sniper's bullet in 1918 and spent seventeen months in various military hospitals. Nor could I say that Mr. Frost is unique in that he set up a law practice following graduation from Osgoode Hall.

Mr. Frost's singular contribution began when he entered the legislature in 1937 to become the financial critic on the opposition benches. Later, when he became a cabinet minister in 1943, and finally, when he became Premier in 1949, Mr. Frost undertook his singular role as leader of governments which have directed the extraordinary growth of this province since the Second World War.

Some indication of that growth my be recognized when it is remembered that the ordinary expenditure and capital disbursements in Ontario in the year 1937 totalled about one hundred million dollars. This year's comparable figure is over eleven hundred million dollars. In 1937 the population was more than three and one-half million. Today it is more than six million. That is to say that, while the population has not doubled, the demands for services and other factors have caused the budget to be more than eleven times larger in 1962 than in 1937. This is something for today's financial critics to contemplate.

Perhaps part of the political success which Mr. Frost has enjoyed has sprung from his sensitivity to those around him. He has an abiding interest in the history of the pioneer settlers of this province. He is active in the affairs of his home town of Lindsay despite the trend to move to larger urban areas, which is typical of the last decades. He has introduced legislation which aims to provide the same rights and privileges for all classes and peoples. For example, he has introduced legislation giving Indians, the first proprietors of this province, the same voting and other privileges as later arrivals demand for themselves.

Today we salute one who has served his country notably in war and in peace, one whose record will illumine the pages of the history of this province for many years to come, and one whose example of public service will be a guide to the generations that follow.

Gentlemen, I present the Honourable Leslie M. Frost, Premier of the Province of Ontario, who will speak on the subject "Ontario-1961."

MR. FROST: My service in government now goes back over eighteen years, to 1943. In this time, I have served in overlapping periods over twelve years in the Treasurership coupled with the Ministry of Mines and over twelve years in the Premiership. Over that period of time I have had contacts, sometimes very close contacts, with the federal government and all of the provincial governments in Canada. In those first days, Mr. King was Prime Minister of Canada. The prime minister of Nova Scotia was Stirling MacMillan; Prince Edward Island, Walter Jones; New Brunswick, John McNair; Quebec, Adelard Godbout; Ontario, of course, George Drew; Manitoba, Stuart Carson; Saskatchewan, William Patterson; Alberta, Ernest Manning had just succeeded William Aberhart; British Columbia, Jonh Hart. Newfoundland had not come into government heads, ministers of finance and treasurers, and very many other ministers. About all of this I could reminisce endlessly, but I think in the main that these associations are as yet too contemporary.

As I look back over these years the most dramatic and vivid impression I have is the greatly altered situation within and without our country. From my standpoint I can best illustrate this by the economic and social changes which have occurred in Ontario. In this period, our population has risen from 3.9 million to 61/4 million; 3/a of a million workers have been added to our work force. Our living standards have increased by 50%, while the product of industry has been doubled. Our elementary and secondary school enrolment has risen from 625,000 to nearly 11/2 million today. Our university population has tripled, and our university family has grown from four to twelve. Highway traffic and development has been spectacular. Our highways are incomparably better than in most jurisdictions in America.

In looking back, one of the outstanding impressions is that government has become tremendously big business. This is true of all the western democracies. Here, in our province, the Premiership has become a tough, exacting executive job, with countless public appearances and speeches and the opening of public works and buildings thrown in for good measure. The days of twenty years ago were placid compared with the exactions of business today. Then the Treasury Board existed in name only. Today its work has become enormous. The emanations of government add to this picture. The gross income of various Commissions is over $800 million dollars a year. Ontario Hydro has a revenue income of about $230 million a year; the Ontario Hospital Services Commission, which came into being 21/2 years ago, has an operating income of about $296 million this year. Then there are the Workmen's Compensation Board, Ontario Food Terminal, Ontario Stock Yards, the Ontario Northland Railway, the Liquor Control Board and others. All of these involve matters of policy and direction. This growth all adds up to the fact that Ontario and Canada need your services. The problems of Ontario in this day require and deserve your very best. I have had Confederation. During all of this time, I have dealt with business men and others say that, despite their personal wishes, they felt it necessary to forego public service because of the possibility of conflict of interest. These men are among those most highly qualified. Service in the Legislature or on one of the Commissions or with a Municipality involves an enormous sacrifice. Still, if we in the western democracies are to stand up to competition elsewhere, then we must have in governments and serving governments the very best in business, labour and science. I can say, after almost a lifetime in various public services, that it is rewarding in satisfaction. I can say to young men, in words reminiscent of long ago, "your country needs you," and you cannot, in all conscience, pass these challenges by. I have mentioned boards and commissions. I may say that, with all of the drawbacks which we must guard against, as witnessed by the findings of the Gordon, Mackintosh, Magone enquiry on Government Organization in Ontario, they are a very necessary part of government. They offer to us, in a now highly competitive world, not only the possibility of obtaining the services of leaders in business, industry, labour, science, agriculture and learning but, as well, the benefits of industrial organization and methods which simply do not form part of the traditional scheme of parliamentary government and civil service.

Each year, indeed almost each day, brings about its own set of problems. Indeed in a broad sense, because of a changing world and a rapidly growing and developing country, nothing is ever settled. In a broad sense we must never be satisfied. We have constantly to search for betterment. There is a vast difference between government today and that of twenty years ago.

The period which I mention has witnessed some very startling changes indeed. I have mentioned the growth of our school population-which for years was static at around about 600,000. By the mid 60's it will be 1,800,000, thus presenting to our province its greatest single challenge. Education costs in my first budget totalled a little over $13 million. Today, eighteen years after, they are something of the order of $250 million; our universities alone require three times as much as the entire cost of education eighteen years ago. The cost of education is so huge that the first full year's revenue from the 3 % sales tax will only pay about half of the Province's bill, which will continue to rise. To meet education and health costs, the province simply has to have the $150 million provided by the sales tax, whether the mode of raising it is changed or not. What are the facts? We have a huge land area with a small population. The utmost of every man and woman is required. A Grade 10 or 2nd Form education is no longer adequate. We have to train our young people to live in a new world and age, with all of its requirements. Material resources cannot be developed without human resources. Education, therefore, is one of the fundamentals which we must meet even if we have to pull in our belts in many other things-if our way of life is to stand up to Communism. The treatment of this matter, which was fairly simple a score of years ago, has now become an enormous problem.

We have witnessed a tremendous change in the power picture. Some twenty years ago there were those who still spoke of unneeded power. By the late 40's and early 50's it appeared that our growth and development was going to be seriously affected by limitations of power resources. Indeed, the expiration of the Quebec power contracts in 1970 looked awesome. This situation has been entirely changed because of a five-fold increase in electric power capacity and by bringing natural gas from Western Canada. Time does not permit me to tell of the intricacies of the negotiations which commenced about ten years ago but which had their root in the power shortages of the late 40's. Today Western Canada is adding to our power potential, and our homes and industry are being serviced by this commodity. In my opinion this fact, which as yet has not been properly assessed, will be rated as a great contribution to Canadian independence. I am glad to have been associated with the accomplishment of the use of Canadian gas and oil for Canadian purposes.

The other great change in the power situation, of course, is nuclear energy. Within a short time, some 300,000 h.p. of energy will be going into our power grid from nuclear sources. This has been brought about by a federal-provincial partnership involving Atomic Energy of Canada Limited and Ontario Hydro linked with Canadian General Electric. It would do your hearts good to see the work being done in the Peterborough plant of the Canadian General Electric in applying uranium with its power potential to the ways of peace and to the betterment of people and their way of life. Here is one of the largest and bestequipped commercial nuclear development centres in America. This is one of many projects which are evidence of Canadian engineering skill and achievement and that helps to create the climate for future expansion.

In Ontario the expansion of manufacturing and processing industries is the major need of the future. On expansion and productivity everything depends and, at present, these are worrying problems. There is general agreement as to the cause. The resurgence of production in Europe and Japan, aided by favourable exchange rates, has greatly increased competition at home and abroad. Added to this are the more discretionary buying habits of our own people, the intensified use of labour-saving machinery, the rise of Canadian production costs and the rather sluggish rate of growth of the United States. All of these have operated in one way or another to effect a slackening in production and, therefore, an increase of unemployment. I am delighted at the news of trade missions to all parts of the world, and the indications that the Canadian people are adapting themselves to changing world conditions. This is of vital interest to us here in Ontario.

In some world markets we have done exceptionally well. A drawback, however, is that this trade improvement has occurred in capital-intensive rather than labour-intensive industries. Our productivity has increased because of the installation of modern labour-saving machinery. Prodigious quantities of consumer goods have become available. The sellers' market, which existed after the middle 40's, has been converted by expanded capacities and production into a buyers' market. As a result, the rise in physical output has not absorbed the full growth in the work force.

Our policy of the last fifteen years has been based on economic expansion and development. It is on this that we have soundly premised our 50% rise in living standards. I say now that the emphasis in the future has to be on economic expansion and development. One of my lieutenants has said that you cannot separate freedom from economics. I would add that you cannot separate the standard of living from economics. To put it bluntly, if we are to provide for increased human betterment, we have to work for it.

There are bright signs on the horizon. There has been a considerable acceleration of Ontario's economic activity since the beginning of the year. Economic indicators are going up. We are at the peak of industrial production. Fifty thousand more workers now have jobs in Ontario than a year ago, while unemployment is down to the lowest level in the last two years. The maintenance of a high rate of growth is, however, a continuing task, as 1971 will see Ontario's labour force increased by about 600,000 workers. Our success will depend partly on understanding what our problems are and the alternative means of action that are open to us. I am convinced that there is no single or simple solution. The approach has to be many sided.

We are going to have to intensively plan and ever look forward. In this respect we have taken positive steps. The Advisory Committee on Economic Development, consisting of men of wide experience in business, labour and government, has been created. The business and labour side of this Committee is chaired by Mr. O.D. Vaughan; the technical, government side by Mr. George Gathercole. This is the outcome of our studies of the work of the Productivity Council in the United Kingdom which we made last spring and which we have very much included in the programme now tentatively in operation.

The economic blueprint for the future will I think, include some of the following considerations.

1. We must evolve better trading relations with our American friends. We are their best customers and should be treated as such. The present balance of payments situation, whereby we fiance imports from the United States by. importing capital and selling more to other countries than they sell to us, cannot be maintained indefinitely. I think this must be recognized in our Canadian-United States relationships. The solution is not the task of governments alone. The role of businessmen is of supreme importance. On one hand, we should recognize the importance of our business relations with our American neighbours. They have made an impressive contribution to our industrial development. On the other hand, the people next door must recognize the common-sense and wisdom of arrangements that will enable Canada to meet its obligations by buying more from us. Every argument is in favour of this course.

2. We must take full advantage of the developments in Europe. We must be concerned over the advantages and disadvantages which may arise from the entry of Britain into the European Economic Community. Of course, we should bargain and negotiate to secure the most favourable terms and conditions. On the other hand, we must remember that we are living in a new world. We shall have to cushion the economy as far as possible against adverse impacts, and, as well, step out and make those adjustments which are essential if we are to reap what are no doubt the longterm advantages of such integration. Trade blocs are going to be more than just a passing phase. I suggest that it might be well for you to read Clarence Streit's book of the 1940's Union Now. The Atlantic community is now right in focus. There are very interesting possibilities in world trade for alert business and industry which is prepared to assess our situation accurately and take full advantage of the opportunities.

3. There is the problem of obtaining lower unit costs through specialization. In days of talk of an expanded common market, we are faced with the immediate problem of a limited market. While the assurance that the public interest is adequately protected by preventing restrictive trade practices is necessary, we should make perfectly sure that combines legislation should not discriminate against industry simply on the basis of size. Industry is going to have to dovetail operations to achieve greater specialization and, therefore, lower unit costs. In Canada and the United States, we follow the Theodore Roosevelt "big stick" policy of 1904. While we are doing this, other competing countries are actively engaged in expanding government-fostered combines to compete in our own markets. In this highly competitive world, the plain fact is that an excessive number of firms tend to cause the fractioning of the market with higher costs of production and no doubt higher consumer prices. This is not an easy problem to solve. What I have said is, I know, controversial, but it is a problem in the world of 1961 that we have to face up to.

4. We have taken steps, particularly in the area of secondary education and its vocational emanations, to provide for the higher adaptability of workers required by the swift changes occurring in industrial processes. We must devote greater attention to education and research. Business and industry can make a significant contribution to the optimum development of our resources by undertaking surveys of what their needs for technical skills will be over the coming years. One of the problems of mass education, which is costing astronomic millions of dollars, is the danger of indiscriminately providing technical and trade courses for the development of skills for which the future may find little need.

5. As a great industrial province, we have to be aware of pricing ourselves out of world markets. Price stability and cost of living are, of course, of great importance in our country. Moreover, very much of our standard of living and our way of life depends upon our export possibilities. If our costs rise, we may easily lose competitive advantage and our production and employment are arrested. I have not time to elaborate on this beyond saying that studies of the United Kingdom Productivity Council indicate the extent to which they are concerned with this problem overseas. The Productivity Council idea is very largely premised on the idea of management and labour examining together the problems of production and sale which are fundamentally essential to the position of both. The Council in Canada, headed by Mr. George De Young, perhaps can provide the method by which management-labour relations can be examined in the light of present conditions. There must be understanding and reasonableness on both sides and also the development of down-to-earth responsibility: Again, looking back over the last eighteen years, our advances in human betterment have been premised fundamentally on a substantial rise in real income per capita, resulting from our increased productivity. By all odds, this is the key to the future. We must expand and develop our heritage, which really is without limit. We must recognize that the fruits of our progress must be earned by hard work, development and expansion. You will observe that I have said nothing so far about tariffs to limit the inroads on our domestic market by foreign manufacturers. Demands for increased protection are, in some cases, not without justification. However, a flexible policy is required based on the recognition that, as one of the highest per capita trading areas in the world, Canada and Ontario need exports above everything else.

In conclusion, may I say that it is necessary here in Ontario and in Canada to face the future with confidence and optimism. With such an attitude, oft-times problems are solved overnight. Canadians should cultivate the science and art of human relations. This is a field in which we can play a useful part and help to make up in influence what we lack in population. Please remember that the answer to the atomic bomb is in human personality and that indescribable thing called common sense. There are very many ways in which we can contribute to the promotion of economic development by cultivating the art and science of human relations.

This country, of which Ontario is such a vital part, is wonderfully blessed. We have the ingredients for a rich and rewarding future, provided we have drive, enthusiasm, courage and imagination. The great lesson of the last fifteen or twenty years is that we can do things and that our country is only in the beginnings of its possibility. Our objective in the years ahead must be to surpass anything we have done. Strong and waywardly blow the winds of change. With the adaptability which I believe stands out in Canadians, we can anticipate, formulate and implement policies which will not only cushion their effects, but take advantage of the trade winds and other favourable winds. Despite contrary assessments made of my various campaigns, I have never "run on my record." I only regarded "record' as a step in the road of progress. Each year brings its own set of problems. Today's problems are different from those of a dozen years ago, and tomorrow's will be quite different from those of today. I am confident, however, that we here in Ontario, in common with all Canadians, will respond to the challenges ahead with the same ingenuity, enterprise and courage which our people have shown throughout our history.

THANKS OF THE MEETING were expressed by Mr. Morgan Reid, President, The Canadian Club of Toronto.