Friday, 4 December 1992

Metro Toronto Reassessment Statute Law Amendment Act, 1992, Bill 94

North Hill District Home Owners' Association

Tim Kennish, president

John Greey, director

ABC Residents' Association

E.J. Montgomery, president

Charles Crawford, director and treasurer

Multiple Dwelling Standards Association

Ib Amonsen, director

Upper Yonge Village Business Association

Michele Kesten, member

Klaas Vangraft

Joseph Tseng

Ontario Hydro

Douglas Smith, acting vice-president, procurement and power system planning

Sam Roberts, assessment and taxation administrator, corporate real estate division

Upper Yonge Village Business Association

Fotini Yaroshuk, member

Kay Gardner

Rob Maxwell

Michael Walker

Anne Johnston; Olivia Chow

Ila Bossons; Dennis Fotinos

Brian Ineson

Michael Colle

Scott Cavalier

Antonio Lopes

Joan King; Paul Sutherland

Paul Christie

Peter Tabuns

Steve Ellis

John Adams

Wanda A. Liczyk


*Chair / Président: Beer, Charles (York North/-Nord L)

Vice-Chair / Vice-Président: Daigeler, Hans (Nepean L)

Drainville, Dennis (Victoria-Haliburton ND)

Fawcett, Joan M. (Northumberland L)

Martin, Tony (Sault Ste Marie ND)

Mathyssen, Irene (Middlesex ND)

O'Neill, Yvonne (Ottawa-Rideau L)

*Owens, Stephen (Scarborough Centre ND)

White, Drummond (Durham Centre ND)

Wilson, Gary (Kingston and The Islands/Kingston et Les Îles ND)

Wilson, Jim (Simcoe West/-Ouest PC)

Witmer, Elizabeth (Waterloo North/-Nord PC)

*In attendance / présents

Substitutions present / Membres remplaçants présents:

Elston, Murray J. (Bruce L) for Mrs Fawcett

Frankford, Robert (Scarborough East/-Est ND) for Mr Gary Wilson

Mammoliti, George (Yorkview ND) for Mrs Mathyssen

Mills, Gordon (Durham East/-Est ND) for Mr Martin

Perruzza, Anthony (Downsview ND) for Mr White

Poole, Dianne (Eglinton L) for Mrs O'Neill

Rizzo, Tony (Oakwood ND) for Mr Drainville

Stockwell, Chris (Etobicoke West/-Ouest PC) for Mr Jim Wilson

Swarbrick, Anne (Scarborough West/-Ouest ND) for Mrs Mathyssen

Turnbull, David (York Mills PC) for Mrs Witmer

Clerk / Greffier: Arnott, Douglas

Staff / Personnel:

Drummond, Alison, research officer, Legislative Research Service

Richmond, Jerry, research officer, Legislative Research Service

The committee met at 0942 in room 151.


Consideration of Bill 94, An Act to amend certain Acts to implement the interim reassessment plan of Metropolitan Toronto on a property class by property class basis and to permit all municipalities to provide for the pass through to tenants of tax decreases resulting from reassessment and to make incidental amendments related to financing in The Municipality of Metropolitan Toronto / Loi modifiant certaines lois afin de mettre en oeuvre le programme provisoire de nouvelles évaluations de la communauté urbaine de Toronto à partir de chaque catégorie de biens, de permettre à toutes les municipalités de prévoir que les locataires profitent des réductions d'impôt occasionnées par les nouvelles évaluations et d'apporter des modifications corrélatives reliées au financement dans la municipalité de la communauté urbaine de Toronto.

The Chair (Mr Charles Beer): I'd like to call this session of the standing committee on social development to order. We're meeting again to review Bill 94, the Metropolitan Toronto Reassessment Statute Law Amendment Act, 1992.


The Chair: Our first witnesses today are from the North Hill District Home Owners' Association. I'd like to ask them to come forward to the table, and if you would be kind enough to introduce yourselves. If you feel like a glass of cold water, feel free. We welcome you here. As I think I mentioned at the outset, the House has been sitting till midnight this week, so if we look a little bleary-eyed, it doesn't affect our attention or interest in terms of what you're about to say. Please go ahead with your presentation.

Mr Tim Kennish: Thank you, Mr Chairman. My name is Tim Kennish. I'm the president of the North Hill District Home Owners' Association. My colleague John Greey, also a member and a member of the board of directors, and the past president of the association are here today. We appreciate this opportunity to make known to you our views on the question of implementing the market value assessment proposal that has been approved by the municipality of Metropolitan Toronto.

Briefly stated, our association, which has been watching this situation for some time, is very much opposed to its implementation, for reasons I wish to explain. We are asking or urging your committee to recommend against its implementation and not to vote in favour of this legislation supporting it.

Briefly, a bit about our association: We're a residents' association with over 400 members. The area we represent is primarily a residential area in the part of the city that's sometimes called lower Forest Hill. The area is bounded on the south by St Clair, on the west by Spadina, on the north by Chaplin Crescent and a little bit of Eglinton Avenue and then Avenue Road on the east side.

If market value assessment is implemented on the basis that's been proposed, the home owners in our area will experience some of the highest tax increases of any residential properties in the city. We have attached to our written submission some -- I won't say representative -- examples of tax increases that would be effective if the MVA is put into effect.

Just to focus on the first page, for 18 Dunloe Road, which happens to be the same street I live on, the tax increase is $10,000 from the present almost $8,000, which is a 132% increase. Mr Greey lives on Dunvegan Road. I notice here that one unhappy home owner at 56 Dunvegan Road currently pays just under $10,000 in tax. The proposed tax would be just under $25,000 and the increase of over $15,000 represents a 173% increase. And there are other cases. I'm not saying these are completely representative. These tend to be the more egregious cases, but on average residents of our area are looking at upwards of 65% increases.

Market value assessment is justified or supported on the basis of a need to move to a fairer basis of taxation -- I would like to comment further on that later -- but even if it could be justified on that basis, the timing of its implementation at this time, in our view, is particularly inappropriate, given the severity of the current recession.

We continue to read daily about business and individual bankruptcies and financial problems of significant proportion, that real estate values are eroded beyond any expectation. While I recognize the business case -- the situation of business owners is much more severe than the residential owners -- nevertheless it is going to be a real problem for residential owners in the city to cope with absolute tax increases of, on my property, $6,000. It's not a time when people have the money to pay these kinds of property tax increases, even if the system is deferred for five years.

I don't think there is anything inherently fair about market value assessment. If the underlying rationale is that municipal taxpayers ought to be assessed on the basis of their ability to pay -- and I question whether that's an appropriate approach -- and that market value is a proxy for ability to pay, then I think that's a flawed logic, because many of the people -- particularly in our area; we have long-term residents -- live on fixed incomes and really do not have any capacity to handle additional expense. Other people, a lot of people you would know too, have declining incomes, so where are they going to come up with the money? There will be forced sales, there will be hardship.

If the values that are being used represented realistic, real-worth values, there still would not be an ability to access that value for the purpose of funding the tax payments. People's investment value in their real estate is not really accessible. You can't take a mortgage out to pay your taxes; it's a self-defeating proposition. In talking to people about the values in our area that are used as the basis for the 1988 assessment, they appear to be anywhere from a third to a half higher than current experienced sales.


Market value is an uncertain standard to apply, involving difficult judgements. The fact that 1988 has been chosen -- which happened to be the zenith in land values in our area and the city generally, in the residential boom -- just epitomizes the problems associated with using that as a basis for taxation. It's a certainty that if market value assessment is proceeded with, given the large absolute tax increases, I fully expect the courts are going to be clogged with a lot of litigation on the part of people such as myself contesting their municipal tax assessments.

It seems to me that there's no necessary correlation between market values, even if they were relevant and realistic, and taxation for municipal purposes. Market value assessment is not a technique for matching up funding with the cost of providing municipal services. Comparing the city of Toronto, which is a much more densely populated or developed area, with the outlying suburban areas, there are much higher costs of providing similar services to properties in outlying areas which are assessed on a lower basis.

In addition, much of the city's municipal infrastructure has been been amortized by virtue of the fact that it's been in place for a long time, whereas the outlying areas have more recently established service structures and are still paying for those. In terms of costs, I think there isn't support for a market value assessment approach.

The next comment I'd like to refer to is the fact that the city is currently funding, on a population basis, a disproportionate portion of the Metro Toronto budget and is making a net contribution to education in Metro of $300 million, which it pays to other school boards outside its boundaries.

We recognize that the present scheme of municipal tax is not without its imperfections; nevertheless, I think that between market value assessment and what we have today, what we have today more closely approximates funding against the costs of providing the services that people use.

An additional point is the fact that market value assessment will reduce land values by a factor which reflects the increased tax cost. That isn't adjusted for in the system, as I see it. The values that are being used for tax purposes don't take account of the fact that, while there's been erosion from 1988, there's going to be further erosion because these properties are subject to this higher level of tax. If you're looking at buying a property and you can see, say, 10 years of increased taxes, you're going to pay the present value of that tax difference over a 10-year period.

One other point I'd like to make is that it has been suggested that the market value assessment be deferred for implementation until not before 1998, subject to some increases capped at 10% going through earlier, but if properties were sold or ownership changed in the meantime, perhaps not limited to sales situations, the whole of the increased market value would become assessable for tax purposes. That immediately creates a further diminution in value for those particular property owners.

I note that in Bill 94, clause 241.14(4)(f) specifically seems to contemplate that you could accelerate the capturing of that higher level of assessment before the rest of the program goes into effect.

Finally, the comment I would like to make is that one recognizes that in Metro council, the political geography was such that it was a foregone conclusion that market value assessment would be given the go-ahead there. The representatives of those areas which, under market value assessment, will be getting tax reductions outnumbered those representatives who would be paying increased tax bills. The outcome was, as I say, foregone. That doesn't make it right. You're not similarly constrained by those political realities. I think you have the opportunity, and then the obligation, to do the right thing.

We would like to conclude by urging you once again to recommend against implementation of market value assessment. Before closing, I would ask Mr Greey if he wishes to add anything to what I've said.

Mr John Greey: I have very little I would like to add except this: One of the arguments put forward is that as house values have been raised by inflation, the amount of money being collected by the municipalities, so-called, would remain the same; the mill rate would be adjusted. What is being really unfair -- I think we've probably noticed it more in Forest Hill -- that, while our house values have been increasing by way of just pure inflation -- the 1980s inflationary period -- we've had another secondary effect that has ballooned Forest Hill in particular.

They have had some unusual demands on the value of their houses, I guess being a very desirable district. This ballooned up on a temporary basis. Many of these house values today are considerably less than the peak of what they were. Picking a particular year to use for market value makes no adjustment for any smoothing effect for these changing house values. I think this part having been overlooked has made this, probably, very unfair.

You don't mind having a change in value perhaps, but when you stick with one particular period which happens to be a peak, rather than over a longer period of time -- that was the only comment I wanted to make. I think that's the main flaw in this whole market value assessment process.

The Chair: Thank you very much for your presentation. We have time for three questions, one each of Ms Poole, Mr Owens and Mr Turnbull.

Ms Dianne Poole (Eglinton): Thank you very much for your presentation today. You've come to us representing a somewhat different area than most of the people we've heard from so far from the city of Toronto, in that the majority of residents in the city of Toronto have extremely tiny frontages and very small lots. You represent an area where actually the houses are bigger and the lots are bigger.

You've pointed out two very important things. You've pointed out some -- what appear to be -- glaring errors in the assessment methodology. For instance, I see at 16 Dunloe Road, their proposed tax is $38,000 and at 18 Dunloe Road, right beside that, it's $18,000 as a proposed tax. There seems to me to be something very strange with figures like that. That's the first point. The second is: I'm looking at the amount of these proposed taxes. They vary: $24,000, $38,000, $33,000, $19,000, $26,000. They're quite substantive taxes.

My submission would be that a house, say in Scarborough, Etobicoke or one of the suburbs, that was the same lot size and size of unit as yours, would be paying substantially lower taxes under this proposed scheme. Do you have any comparisons that you have done in your association with the suburban homes to see how a comparable house in size and area would have been assessed?

Mr Kennish: I'm afraid we don't, other than a general understanding. A typical property in our area, John, would be, say, 120 feet by 60 feet. That's quite common on our street. There are certainly bigger property sizes. A typical current tax figure is about $5,000 on that size of property.


Mr Greey: Closer to 50 by 150 is our average lot size, roughly.

Mr Kennish: And typically going up by almost 100%. I know my property is going up 90%. I don't know specifically what the comparable information is for similar-sized properties in Scarborough.

Ms Poole: It would actually be quite interesting to do that type of comparison, because, like I say, most of the examples brought to us are typical of the rest of the city of Toronto and parts of North York, where the lot size is quite small and the house size is very small, so we're just judging on those types of examples. But I suspect if we carried that forward to the somewhat larger houses, like yours, that we would find again that under this plan in the suburban areas they would be paying substantially less tax than your new proposed --

Mr Kennish: That's my understanding.

The Chair: Mr Owens.

Mr Stephen Owens (Scarborough Centre): Mr Chair, I'll yield my time to Anne Swarbrick.

Ms Anne Swarbrick (Scarborough West): Thank you, Mr Owens. I know we all tend in issues really of any nature to end up looking from our own perspective at them.

With regard to the paragraph you have on page 2, referring to your understanding that currently the city with 29% of Metro Toronto's population is funding 42% of its budget, just sticking to that for a moment, I'm wondering if you've thought of the perspective of the amount of provincial tax dollars and municipal tax dollars and federal tax dollars that goes into supporting the proportion of cultural facilities that exist in the city of Toronto that don't exist in the rest of the suburbs. I'm thinking, for example, of O'Keefe, Roy Thomson Hall, the CNE, the Royal Ontario Museum, the Art Gallery of Ontario, Ontario Place, whether you've ever thought of things from that perspective; and secondly, from the perspective of the amount of those tax dollars that comes from the commercial and industrial sector and what proportion of it in fact exists in the city of Toronto compared to other areas. So, for instance, the number of workers from the suburbs who come in to work within the city of Toronto and help to create that tax wealth of the 42% of the base, have you ever thought of the balance from those perspectives?

Mr Kennish: Yes. I think that's very relevant. I think that a number -- just to go to your first point -- of the institutions you referred to, like the Royal Ontario Museum and various other facilities, are really institutions of our whole sort of municipality in the area, and people in Oakville and surrounding areas, as well as people right in the city, make extensive use of those amenities. So I think that while they are located within the city and are more directly accessible by us, I think they're used generally by the population at large and I don't know that members of the city necessarily disproportionately use it.

In terms of assessment, I honestly don't know whether industrial assessment -- certainly there's a lot of commercial, but I don't know how it would line up with counterpart industrial and commercial assessment in outlying areas. Certainly there are lots of both in each of the areas.

Ms Swarbrick: Are there not a lot of suburban workers who come down to give of their labour within the city of Toronto?

Mr Kennish: Yes, sure. I have many colleagues who live outside the city, live outside Metro as well, and work downtown.

Ms Swarbrick: I just think sometimes we need to help try and put ourselves in the eyes of each other and see the other perspectives too.

Mr Greey: We're also seeing, though, because of the costs, that a lot of downtown businesses are now moving to the suburbs where the costs are less.

Ms Swarbrick: Sorry?

Mr Greey: We're seeing some of the downtown businesses beginning to move to the suburbs where their costs are less.

Ms Swarbrick: So over time that balance of figures may change, but at this point, I just want to point out that I think the figures being your way are partly because of how the traffic flows right now.

Mr David Turnbull (York Mills): I think one of the things that troubles me about market value is the fact that what appears to be happening is that the municipality is taxing unrealized capital gains.

I represent York Mills, which has within it the Bridle Path, much reviled by the NDP, and the assessments are very similar to yours. It automatically assumes that all the homes are exceedingly valuable, and in fact there are surrounding areas with quite modest homes.

I notice here that the current tax on 46 Forest Hill Road is $3,941. I would suspect that under any scheme, they would be paying substantially more taxes. I think we all acknowledge that your area and the area I represent will end up paying more taxes and I think we readily accept that.

The problem is where you have unusual inflationary trends which drive values up disproportionately in our areas to others', only to come crashing down and then being taxed on that bubble year. Could you tell me, would it be correct to say that in your area the values of some houses may have dropped by as much as 50%?

Mr Kennish: Certainly I've heard from members of our association who have said that. What we did was we went and collected information with regard to all of the properties in our area, and there are about 1,000 homes. We distributed this information to all home owners so that they saw their assessed value on the 1988 basis, the proposed tax, present tax and so on.

I've had a number of people come back and say, "I see my house is assessed at $1.2 million and the house next door is comparable in size and amenities and it was on the market for a year and it eventually sold for $600,000." These are significant-sized houses, but the difference between what the 1988 assessment values are and what realistically can be commanded in the real estate market is, as I've suggested, a third to a half. That is what I'm hearing from people, and we're not trying to exaggerate the degree of deviance.

Mr Turnbull: What I've observed is that it was an incredibly sloppy assessment when you compare actual sales in 1988 with assessment. We had several examples last night where buildings had been assessed at three times what they sold for in 1988.

I would just ask you the last question.

Mr Kennish: A lot of people don't have this information and were quite surprised to see their assessed values.

Mr Turnbull: I think you should do a complete study of your area and you should compare it with actual sales. I would urge you -- it appears that the government is determined to push this through -- do not make the mistake of not appealing the assessment, because unfortunately this scheme only allows you to appeal the 1988 assessment, which in virtually all cases will make no difference to the taxes you will pay because you're capped at the 10% increase. But unless we bring out what a sloppy assessment this was, we're never going to be able to have any justice done.

Mr Greey: I don't know whether these stopgap measures of capping and so forth are really the ultimate answer. I still think you have to look very strongly at a smoothing process. Maybe you take market values over a longer period of time, maybe a value every four years -- and I believe they have some valuations going back for periods prior to 1988. Maybe you take five or six of those four-year valuations and average them, and then every four years you add one and drop one. Something's got to be done to iron out these little ballooning periods, as you've run into exactly the same thing in your area that we're running into in ours.

The Chair: I'm sorry, we've run out of time. Just before you go, there's one really quite extraordinary increase. They're all high, but 46 Forest Hill Road has a 396.4% increase. Would you have the detail on any of these in terms of size and what they are?


Mr Kennish: You mean lot dimensions and so on?

The Chair: Yes, bedrooms and whatever.

Mr Kennish: And assessed values? We do. I could provide that.

The Chair: If you have any of that, it would be interesting. I think when we see some of these things it sort of makes it a little more real. But that one stands out even from among the others.

Mr Kennish: Sure. We can get that information. Should I send it to Mr Arnott?

The Chair: Yes, that would be fine.

Mr Turnbull: Mr Chairman, may I just suggest that as much as possible, you should provide details of all of these, not just that one, so that you have an idea of the lot frontage, the number of bedrooms perhaps and the size of the home.

The Chair: That would be helpful. Thank you very much once again for coming this morning before the committee.

Is Mr Joseph Virgilo here? I don't see Mr Virgilo.


The Chair: Could I then call the ABC Residents' Association, if you would be good enough to come forward to the table. Welcome to the committee this morning. Please introduce yourselves and go ahead with your presentation.

Mrs E. J. Montgomery: Thank you very much. We too appreciate the opportunity to address this committee. I'm E. J. Montgomery, president of the ABC Residents' Association. This is Charles Crawford, also a member of our board.

Our area covers from the tracks to the north down to Bloor Street, between Avenue Road and Yonge. We're typical of many of the smaller areas and we encompass a broad range of housing. We have social and affordable housing, homes for seniors, and many rental places are available. We have town houses, semidetached houses, condos and single-family houses that range from very small and modest to larger family homes, and also very many historical houses and buildings that go back to the early 1800s.

We also have a lot of public buildings that are historical in nature, such as the churches, schools and libraries, and then we have all the other things that neighbourhoods have -- firehalls, ambulances, office buildings large and small -- and we have chain food stores, large department stores and many small, independent businesses.

The combination of these employ many hundreds, indeed maybe thousands of people from across Metro and also a lot of people who live and work in the ABC area. These are all within walking distance in our neighbourhood, and that's a very efficient way of living.

Our reaction to this proposed assessment plan is anger. We're very angry at this sort of careless and cavalier attempt that has been made to push this thing through. We're dumfounded by the inaccurate assessments based on the inflated prices of 1988, and we feel they are completely lacking in credibility.

We do support, and have supported for many years, the need for fair and meaningful tax reform in Metropolitan Toronto, but not on this basis. We can't support this in its original form, its adjusted form and its tinkered form.

In the 1970s the city of Toronto could see what was happening to many large cities around the lakes, like Buffalo and Detroit and cities of that sort. They were decaying with urban rot. The city had a vision that it could achieve a livable downtown, a diverse economy, stable neighbourhoods, active retail streets, safe city streets, good schools and convenient and well-used transit.

With that in mind, bylaws were passed to stimulate intensification as a desirable economic goal, and bylaws were passed to protect and preserve the urban residential way of life, bringing safety and vitality back to the inner-city. People believed this. They believed in this new and innovative policy of bringing people back into the city, and they came.

They came to areas like Cabbagetown, Yorkdale, Yorkville, Riverdale, the Danforth and the Beaches. These areas, in many instances, had become somewhat rundown. These people came back and they made them into attractive, well-maintained, stable and safe neighbourhoods, adding a great deal to the livability of our city.

Much of this was made possible by average people in average jobs earning average incomes. They not only invested their money but they invested a hugh amount of their own time and what's called "sweat equity" to upgrade these properties and make them attractive and nice, and therefore the city of Toronto avoided collapse from within.

We ask you not to underestimate the value of the contribution made by the inner-city residential areas to the safety of city streets and to the prevention of crime. We ask you not to underestimate the value of a vital urban core to the economic and social health of the city of Toronto and the surrounding areas, indeed possibly to the province of Ontario.

This plan opposes and is counterproductive to the urban intensification policies of the city of Toronto and indeed Metro's own intensification plan. Whole districts, not just our district, will lose the goals achieved by more than 20 years of effective and successful planning. Our concern is that if this is passed in any form, the next five years will cause irreversible damage in our areas. We would rather not hear the death knell sounded.

The provincial government, if you proceed with this approval -- well, it's just a bad idea, and we strongly urge you to take the time, indeed to make the time, to look at alternate proposals. Don't rubber-stamp this MVA proposal simply to promote the principle of autonomy for local governments. This issue and the results of this issue are too important to Toronto, to Metro Toronto, to the greater Toronto area and indeed to the province. Don't pass the buck and abdicate the responsibility with which you've been entrusted. We urgently request that you defer any decision in this vital matter until all the current and long-term impact studies have been completed and given thoughtful deliberation. We feel that then and only then should any change be made in the existing legislation. Chuck?

Mr Charles Crawford: I thought in my part of the submission I would focus on what we believe to be the long-term effects of market value assessment. We believe that it's a regressive method of taxing -- market value, that is. It's felt most strongly by middle- and lower-income residents and businesses and it will cause that part of the population of our neighbourhood to move out.

I've looked at a few handbooks on assessment and some studies of the effects of assessment. Most of them, I will admit, are from the States. Incidentally, on the basis of the errors of assessment, there's one study in Boston that shows that they are typically 20% to 40% off. That is, when you go back and look at a mass assessment, by professional, honest, well-trained assessors, when people go back and look at individual ones, it's typical that they're 20% to 40% in error. That's assuming that you take market value as a reasonable assessment.

We don't take it necessarily as a reasonable way of doing it, because its expected and intended effect is in fact to lessen the so-called economic evil of unused and underdeveloped land and it encourages the development of properties to their highest and best economic use. In other words, a property owner who cannot afford the tax should develop his property, increase his income, pay the tax or move. That's the intended effect of this policy and that's what it's designed to do, and we believe that's what it will do in our neighbourhood.

I think this attitude is based to a certain extent on misinformation about who we are living in Toronto. We're somehow seen as white-painters who have taken advantage of low taxes and so-called low prices to move into neighbourhoods and take advantage of huge increases in value. But in a sense, by definition, the speculators have left. They've cashed in and moved out. We are not the speculators.

Many people who have come in and greatly improved their properties have already seen their assessments go up under the old system. There was reassessing going on. Some of it was appealed, but many people did not appeal their assessments. Many of our neighbours, in fact, are not having very large tax increases. But people who have been there for 20 or 30 years and have merely maintained their homes are getting very large increases, and typically they have the lower incomes.

I'm basing this on observations on my own street. I live on MacPherson Avenue, but I believe, from talking to friends in the Annex and in Parkdale, that similar things -- and I suppose you've gotten testimony about similar things -- are happening in other areas of the city. By North American standards, Toronto is a safe city, and we believe that part of its success is because of the diverse population -- namely, us -- that lives in the downtown area.


Our association has worked hard. We worked very hard on the official plan in the 1970s, the old plan we're under. We worked very hard on Cityplan and we're trying to make contributions to the Metro official plan. We've been lobbying for zoning policies which encourage housing suitable for families with children, assisted housing, and for levels of commercial development; that is, small commercial development that functions with our neighbourhood. We believe that Metro's proposed tax reform just flies in the face of all those policies and all its own policies.

We realize that the suburban residents pay high taxes, but we believe that those taxes are high because of market value assessment. They're already living under market value assessment and they're already seeing the effects.

Your own Fair Tax Commission recognizes that the problem of high taxes is the number and variety of services that are funded out of property taxes and that property taxes should in fact be based on a fair and consistent method of valuation, such as lot size, floor area, the use of the property or, most important of all, the cost of the services. We've always supported that kind of tax reform.

Just to close our submission, we reiterate that ABC is opposed to the Metro Toronto reassessment statute law amendment. We've worked hard to maintain our neighbourhoods and we believe that the proposal threatens those neighbourhoods. We've presented facts here and we and others have presented facts to Metro council. We believe that a majority of Metro council has not looked at these things seriously.

We urge you to delay any decision on this bill until the long-term effects can be carefully studied. We believe we won't get another chance for fair tax reform and we have to do it right this time.

The Chair: Thank you very much for your submission. We'll begin questions.

Ms Poole: Thank you very much for your presentation today. I think you've made a very compelling case for trying to keep our city of Toronto livable.

In the closing part of the first section of your presentation, you urge the provincial government to think carefully before proceeding and not to rubber-stamp this MVA proposal. I was one of the opposition members who pushed very hard to have these hearings. I did that because I truly believed that if the government heard the message from the people of Toronto, it would to have to react.

Today, some five days later and many, many late hours later, I wish I could give you more hope. But it was very clear from what one of the NDP members on the committee last night said that these hearings are all a waste of time. He said that they just held them because the opposition asked for them, no other reason, and that it would set a dangerous precedent to tinker with Metro's plan.

I find myself far more discouraged today than when I started a week ago and I can't give you a lot of hope. Your member, Zanana Akande, refused to show up for the vote, as did Rosario Marchese, as did Gary Malkowski from York East. They were the three backbenchers who had indicated that they were against market value. Four city of Toronto cabinet ministers in the NDP government -- Frances Lankin, Elaine Ziemba, Marilyn Churley and Tony Silipo --

The Chair: Do you have a question there, Ms Poole?

Ms Poole: Very shortly -- all voted in favour of Metro's plan and voted with the government. All 60 members of the NDP who voted, voted in favour on second reading.

Quite frankly, normally I say to people, "Come to our hearings and make your views known."

Mr Gordon Mills (Durham East): Is there a question there somewhere?

The Chair: Order, please. Ms Poole, please continue and put your question.

Ms Poole: As valid and as important as your presentation was in opening up the eyes of this committee, I'm afraid too many eyes on the other side are shut. I hope you did not waste your time here today and I thank you for coming.

Mr Turnbull: It has been suggested by some of the people who wish MVA -- and I'm certainly not one of them -- that the reason the inner cores of the cities of Toronto and North York are so badly hit in this assessment is because of their proximity to the subway station. It would seem to me, based upon a lot of the assessments I have seen, that if we were to get a taxi to wherever we went every day, we'd still be paying less than the kind of penalty we're paying because we live relatively central to the subway system.

My question to you is, do you feel that the extra amenities which are represented by the subway and perhaps a somewhat better transportation system in any way offset the kinds of increases in taxation that you're going to shoulder relative to some of the suburbs that are often using them?

Mrs Montgomery: Certainly, there is a convenience in being next to the subway and any main transit line, and our area has much of that, but we also have the traffic and the noise and the ambulance stations and the police stations and all the other things that go along a subway line. I would think in that my particular instance, I would certainly never spend the amount of dollars in transportation other than on the subway in the area.

Mr Crawford: I would say that the subway station that we are at -- which is unfortunately called Rosedale, which I guess politically isn't very good for us -- certainly is a convenience for us. But as someone in the neighbourhood who doesn't use it as much -- I walk to the Metro Y when I go there. I don't take the subway. When I walk I notice that there are a great number of people walking. My daughter-in-law, when she's in town with her family, north of Eglinton, walks to Queen Street when she works, and there are a great number of people walking on Yonge Street.

In fact, many of the residents do not use the subway that much. Since the cutbacks, we're discouraged from using it because once rush hour is over, the trains are very infrequent, and during rush hour we are not the ones who are on those trains. Those trains are not for our convenience. We don't see the rush hour trains as being for our convenience, and I would say the same of the amenities downtown. We like them. That's one of the reasons we're living down there. But if I lived in Oakville, I would still go down and use them.

Mr Turnbull: An overwhelming number of the presentations we've had are people speaking against MVA. I've never sat in any hearings which have been so unbalanced in terms of so many of the presentations being on one side of the picture. But almost everybody who has come forward has been saying they don't want MVA but they do want property tax reform, because they acknowledge that the present system is inequitable. Could you comment on that?

Mr Crawford: Yes, we do think it's inequitable. We have not done the studies. I didn't want to participate in a battle, saying that someone in Scarborough should be paying more than I pay. It's a silly battle to get into, so we have not done those studies. But then again, we don't have a lot of resources to do studies. When I look at the way it is done, presently it's not very logical, so I wouldn't doubt that it's inequitable and it certainly should be changed.

Again, in looking at the literature, it's clear that many of the people who claim to be using market value assessment in fact aren't using it. They classify properties into five, six, seven classes, and each class pays a different percentage of a so-called valuation. Yet in this same study in Boston there were properties built in the teens that they have not reassessed since 1946, and they do that as a matter of policy.

Mr Turnbull: Another concern I have with this scheme is that it does nothing to address the historic imbalance between the amount that tenants pay in apartment buildings, and residences. Tenants are paying on the basis of 8% of their assessed value, and residences at 2.2%. The government had an opportunity to redress this and it's absolutely ignoring that, despite the request of Metro to do something about it.

Mr Crawford: I would agree.


Ms Swarbrick: There are a few things in what's just been said that I could respond to, but I think the main thing I'd like to say is that you have presented to us a very thoughtful presentation. There certainly are a few things people from the suburbs would point out differently. If Joyce Trimmer were here she would, for instance, argue that your arguments mean that people in Scarborough will continue to pay more taxes than -- etc.

I think the main point I'd like to make, because I do agree with a lot of these points you're making, is that in response to what my colleague the member for Eglinton has pointed out, representatives like Tony Silipo, Marilyn Churley, Frances Lankin, Zanana Akande, Rosario Marchese and the others that she has listed have clearly stood up in our caucus and in cabinet I believe too -- I know that -- and argued very strenuously the points you've put before us, and more.

Mr Turnbull: They voted for it.

Ms Swarbrick: Excuse me, I have the floor. They have argued very strenuously the points you've put forward and more. Unfortunately for them, in terms of this particular aspect of this legislation, they lost within the democracy that exists within a caucus on this issue. They've so far lost the battle here, but I'd suggest to you that they will have won the war.

I really believe that over this next assessment period, the extensive work that needs to be done to totally revamp the kind of property tax system that's existed in this province for decades and which requires some serious work by this province to look at -- there is the whole issue of education refinancing, the social and economic impact, the property tax system, the whole issue of what's happening right now in terms of the disentanglement of provincial and municipal services and the financing of it. All of those areas and more have to be looked at together, and take some time. I just want to point out to you that I think those members in the long term will prove to have won the war on your behalf.

Mrs Montgomery: It's very interesting that they have argued on our behalf, but I also find it very interesting that they didn't vote on our behalf. They are to be our representatives and we feel they have not done that.

Ms Swarbrick: Yes. I think it is important to recognize, not only within our party, but just the way the system works in every government of this country and within every party in this country, that there is a certain aspect of the democracy that has to exist within the caucus as well for a government to be a government. I know we could sit and have an argument about it, but I just want you to know that I think there are healthy reasons for that process to exist and in time your representatives will have won the case for you.

Mrs Montgomery: I just hope the next five years and the changes made in the next five years don't destroy downtown Toronto, because that would be a terrible shame, not only for us who live in the neighbourhood, but for the entire area and indeed the province, because it's a well-thought-of city worldwide.

The Chair: I'm afraid our time has run out, but I thank you very much for coming before the committee this morning.


The Chair: Is Mr Joseph Tseng here? If not, I call the Multiple Dwelling Standards Association. If the representative from the Multiple Dwelling Standards Association is here, please come forward. If you would be good enough to introduce yourself for Hansard, please go ahead when you're ready.

Mr Ib Amonsen: My name is Ib Amonsen. I am a resident of the city of Toronto at 1920 Bloor Street West. I speak on behalf of myself and as a member of the board of directors of the Multiple Dwelling Standards Association, which is one of the largest and oldest apartment owners' organizations we have in Ontario.

I will follow the Assessment Act; things like that I will refer to, just to prepare you on it.

The proposed section 63 market value real estate taxation system for Metropolitan Toronto only increases the huge inequity already existing for tenants of apartment buildings with seven or more units. There are several city of Toronto studies backing this up. One was under the auspices of Jack Layton.

The changes in real estate taxes, when the temporary caps are removed, will cause such apartments to be taxed about five times higher than single-family houses, condominium apartments and non-profit and private co-op apartments, an increase from the present rate which is 3.9 times higher than for the single-family house class, according to the Ministry of Revenue, making units in apartment buildings of seven or more suites the highest taxed real estate in all of Metropolitan Toronto.

To insist that such class 2 properties, under the proposed section 63 system, continue to pay 13.9% of the total real estate taxes generated in Metropolitan Toronto will force the average tenant in about 310,000 apartment units to pay an extra $1,290 per year in rent. For many, it could make the difference between going or not going to the food banks.

An apartment building faced with a 17% tax increase based on the 1984 assessments is now facing an increase of 123%. It's the same for all apartment buildings. They're all under the same rent control and the same yearly permitted increase, and still it went from 17% to 123%. A neighbour's property faces an increase of 169%. Such increases are likely caused, at least in part, by the apartment building class assessment base having been greatly reduced by the Ontario Supreme Court decision released September 6, 1984.

I'd like to bring this to your attention, and really consider this thing, because this is a very serious part of this: The court ruling transferred condominium and co-op apartments from the apartment real estate tax class 2 to the single-family house real estate class 0, a reduction of about 25% in the assessment base for the apartment building tax class and an increase of 20% in the single-family house tax class. Ironically, it seems to correspond to a 25% increase in real estate taxes for apartment buildings in relation to their market value in 1988 and a 20% decrease in real estate taxes for single-family houses in relation to their market value.

Metropolitan Toronto's section 63 real estate tax proposal does not address this massive assessment transfer between the taxation classes 2 and 0, which on top of the already existing inequities, results in a yearly additional taxation of about $400 million in real estate taxes, which tenants ultimately end up paying in higher rents even though their income is probably, on average, only one quarter that of home owners.

On page 2, I am referring to what is in the Assessment Act in 1990. It says here in the minutes of the Metropolitan Toronto council on October 29, 1992, that it unanimously approved, as part of the market value assessment debate, the following motion by Councillor Shea, who happens to be my councillor, "The provincial government be requested to redress the current assessment that perpetuates inequities between home owners and tenants." I worked for 14 years to get that motion approved. The vote was taken and you have all the names there. It was unanimous.

Subsection 63(3) of the Assessment Act reads, "Where the minister considers that, within any class or classes of real property in a municipality" etc. But where it really gets important is that the minister "direct that such changes be made in the assessment to be contained in the assessment roll next to be returned in that municipality as will, in his opinion, eliminate or reduce inequalities in the assessment of any class or classes of real property." It says "if so requested by a resolution of the council of such municipality." Now, the legislation says the local council has to request the minister to make the changes, and it did so.

Further, it says:

"(a) prescribing standards and procedures to be used for the purpose of equalizing and making equitable the assessments of all real property belonging to the same class in the municipality;

"(b) prescribing the classes of real property into which the real property in the municipality shall be divided for the purpose of this subsection."


On page 3, it says Metropolitan Toronto council, through its motion, complied with the Assessment Act. My question is, are the minister and the provincial government going to comply with this request "that such changes be made in the assessment to be contained in the assessment roll next to be returned" -- that is to say, the immediate assessment roll, to the municipality of Metropolitan Toronto? Speedy correction of this gross inequity is of the utmost importance to tenants. It is strictly in the hands now of the Ontario provincial government.

The province of Manitoba, I am led to believe, had the same problems about a year ago and directed all municipalities in Manitoba to amalgamate, over a 10-year period, all residential real estate tax classes into one class, which in my opinion is the only fair and democratic way to deal with this issue.

In Metro Toronto there is no similar real estate tax class for the commercial real estate, class 3. There is no distinction between the Yorkdale Shopping Centre, the Toronto-Dominion Centre, the local corner store or a small two-storey office building. But three different classes exist for residential properties, where the taxation for class 2 properties is now nearly four times the taxation of class 0 and is proposed to increase now to nearly five times.

I want to present to you examples of this classification mess. For example, an owner-occupied high-rise condominium apartment is taxed one quarter the amount of a similar tenant-occupied condominium apartment in the same building if leased by the management. The same applies to a low-end-of-market-rent apartment in a non-profit co-op apartment building; the ones rented out to private individuals under rent geared to income. In a similar low-end-of-market-rent apartment in a Cityhome apartment building next door they had to pay four times the taxes.

An apartment in a duplex and a similar apartment in a neighbouring seven-suite apartment building are in the same situation, with four times higher taxation for the seven-suite-or-larger building.

With a rented row house in a seven-unit row house development and a similar rented row house in a seven-unit row house apartment complex -- identical units, same location -- you find the same idiotic thing. As a matter of fact, that was the situation that originally started the court case to the Supreme Court, over condominiums that came out of a similar row house complex in Ottawa.

My neighbour's medium-sized, 72-year-old one-bedroom apartment suite -- and it's no hell, I can tell you -- is proposed to be taxed $3,830 a year, which is close to five months' rent, and that's practically the same taxation as the $385,000 home of the chairman of Metro, Mr Alan Tonks. If it was taxed properly, the tenant in this case would probably save about $2,400 a year, about $50 a week rent. We're not talking small amounts here.

My second major concern is the peculiar 1988 provincial assessment of smaller low-rise apartment buildings. I want to refer you back to what I said earlier about the Assessment Act. When assessing single-family homes, the assessment was supposed to be based on their market value in 1988, so eventually the real estate taxes for a $220,000 home, which was pretty well average in 1988, would be the same anywhere in Metropolitan Toronto. For apartment buildings I was at least given the impression that the assessment was based on the gross rental income, which can easily be confirmed through the rent registry. The rents reflect the vicinity, if you're close to the subway or far away from it and so forth. They have been regulated for years and the apartment preservation act prevents their conversion to co-op apartments or other uses, so the 1988 rents reflect the income-producing ability of any apartment building.

Then why is the 1988 assessment, for example, for 1920 Bloor Street West based on 12 times the gross income? This happens to be my building. Only five or six doors away from me, 1942 Bloor Street West is 10.8 times the gross income; 1950 Bloor Street West, 10.6 times. I'm going to go a little further down the street to 2555, another small apartment building: 9.3 times the gross income.

I look across High Park, and when there are no leaves on the trees I can practically see the building at 83 Indian Road, 9.5 times the gross income, and another building, as the crow flies, at Claude and the Queensway, 200 yards away from 83 Indian Road, 8.6 times the gross income. My God, where were the assessors? What's the principle? The generating ability for paying the taxes is the same for every one of those buildings.

This is not just my neighbourhood. I have a similar situation in the St Clair-Spadina-Bathurst area; within very short distances they vary from 8 times the gross income to 12 times the gross income. I have even heard examples of 7.6 times the gross income being used.

I'm led to believe that the Fair Tax Commission is recommending that all residential properties should be treated equally for real estate taxation purposes. I'm wondering if the minister is going to address this Assessment Act issue so that all those things are raised. I can tell you that tenants certainly are looking for a speedy redress, and I would like to know when the government will move on this issue.

The Chair: Thank you very much for your presentation. We'll begin with Mr Mills.

Mr Mills: Thank you, sir, for coming here this morning. I think your concerns about equity are very legitimate, but having said that, we have a problem here that has been ongoing for about 40 years. What I suppose I'm going to say to you is that if we had one residential class right now, it would result in an increase of 29% on every single-family home and a decrease of 65% in taxes on residential properties of seven units or more.

So what I'm suggesting is that this interim plan allows the government, over the next five years, to come up with a tax reform, fair reform, and to put that to Metro at the end. I don't believe this issue is about the fairness of the MVA. I think it's a different issue. It's about an interim plan to allow time to come to grips with this during the five years and then to address all the inequities and concerns you have, which are very legitimate.

Mr Amonsen: I can only refer back to the Supreme Court decision. Things should have been redressed with respect to what happened with that Supreme Court decision. I think this would have been the appropriate time to do it, and not delay it. It's obvious, without any question, that that had lots to do with the inequities we have now. I certainly think it should be redressed as soon as possible. It might help on the welfare roll if some of the tenants had $50 more in their pockets every week. Under the circumstances we have now, when we consider that the average house owner probably makes four times the income of the average tenant, I think it's a thing we cannot wait.

Mr Mills: To put 40 years right like that is very difficult.

Mr Amonsen: I'm well aware of all that. But our problem particularly got activated in 1984.

Ms Poole: Thank you for your presentation today. You and I have had many conversations over the last five or six years about this issue, and I've written letters in my newsletters about it as well. It definitely is great cause for concern.

One of the things that concerns me during these hearings was that this issue was brought up earlier in the week by various representatives, some landlords and some tenants. They asked questions such as: "Is the government going to answer Metro's request? Are you going to look into the equalization and bring it in?" The minister made a very brief appearance at the committee Tuesday night, and because we weren't allowed to ask him any questions, I asked permission of Andrew Stewart if I could pass the question on to him.

When I asked the question, "Are you going to bring in this greater equity for tenants?" his answer was: "It's Metro's plan. Go back and ask Metro." The Minister of Municipal Affairs, who has carriage of this legislation, did not comprehend that, first of all, it was a provincial responsibility and, second, that the Minister of Revenue would have to amend the Assessment Act under section 63, which I think they now call section 58, in order to effect this.

I found it not only surprising but quite appalling that he had so little understanding, so I'm not sure you're going to get that relief you're looking for.


One thing you may get some help on, though, is your situation about the temporary caps being removed. Obviously, this affects all residential property, whether they be single-family or multiresidential apartment buildings. One thing you've brought to our committee that is new is your calculations that temporary caps removed will cause such apartments to be taxed about five times higher rather than the 3.9 they are currently.

I am going to be proposing an amendment next week when we go into clause-by-clause to retain those protective caps on properties at the time of sale. I cannot guarantee that amendment will pass. It is up to the government, which has the majority, but I will guarantee that the amendment will be placed. On the one hand, I can't offer you hope about the equalization, but on the other, we have a very small chance, if this government will listen and protect tenants by making sure that cap stays on.

Mr Turnbull: You bring two very important points before us, the first being the request by Metropolitan Toronto to correct this historic imbalance between multiresidential and single-family housing. But the other thing I want to make sure I bring out for this committee, because I just did a quick calculation while I was reading through your thing, is with respect to the income approach, where they've got a range from 12 times gross income to 8.6 times gross income.

If we could possibly get any of the NDP to listen to what I'm saying, they might learn something. There isn't any attention being paid. Hello? Would any of the NDP like to listen to this?

If you take $100,000 gross income of an apartment building -- once again, they're not listening -- and you take it at 8.6 times the gross income, you arrive at a value of $860,000. If you take that same $100,000 gross income and you take it at 10.6 times gross income, then it would be an indicated value of $1,060,000. The same income at 12 times gross income is $1,200,000. In other words, 40% more, and that will translate itself into 40% more taxes, even though they're already paying on the basis of 8% as opposed to 2.2%. Could you comment on that?

Mr Amonsen: I can only say it's horrendous. I don't know how my neighbour can survive when you have to pay five months' rent in real estate taxes. There's nothing left. If you have the slightest bit of mortgage on it, then I don't know how he'll do it, to be honest with you. If they put that 169% increase through, he's finished.

Mr Turnbull: If this government seriously had a shred of interest in the tenants, it would be prepared to do something about it. They have the opportunity to fix it now, and they're ignoring it.

Mr Amonsen: The Assessment Act says they are supposed to do it. It's contrary to the assessment law.

Mr Turnbull: Indeed, at the top of page 3 of your submission, you say Metropolitan Toronto council "complied with the Assessment Act. My question is, are the minister and the provincial government going to comply with this request `that such changes be made in the assessment to be contained in the assessment roll next to be returned.'" I haven't heard one answer.

Mr Amonsen: "Next to be returned" are very important words.

Mr Turnbull: Perhaps, in view of the fact that you've asked a direct question of the government, I will ask the parliamentary assistant if he would maybe respond to the question you've asked.

The Chair: The parliamentary assistant did ask if he could respond, so I'll turn it over to the parliamentary assistant.

Mr Mills: Ms Poole stated in her comments that the Minister of Municipal Affairs didn't know that the province needed to change the Assessment Act, and that's not true. Metro, if it wishes, can do it. It has chosen to turn it back to the government, but Metro, if it wants to, can do it. They have the techniques there.

Mr Turnbull: They can change the Assessment Act? That's just not true. That's simply not true.

The Chair: Order.

Mr Mills: It says here, "No change to the Assessment Act is required for Metro to deal with this issue." No change is necessary.

Mr Turnbull: You're saying two different things. You're saying that Metro can change the Assessment Act. They can't.

Mr Mills: No, I'm not saying that.

Mr Turnbull: Well, you did say that.

Mr Mills: Don't get so edgy.

The Chair: Order, please.

Mr Turnbull: That's not edgy. I'm simply pointing out what you said.

The Chair: Order, please. Let Mr Mills just state what --

Mr Mills: Metro could have requested that all residential property classes be combined. No change to the Assessment Act would have been required. But Metro did not request this modification. They had the power to do that, but they didn't ask for it.

Mr Turnbull: Excuse me.

The Chair: Mr Turnbull?

Mr Turnbull: For your enlightenment, let me just clarify it for the parliamentary assistant. Metro council proposed that "the provincial government be requested to redress the current assessment that perpetuates inequities between home owners and tenants." That's what Metro requested.

The Chair: Mr Turnbull, can I just make sure Hansard knows you're quoting from the presentation?

Mr Turnbull: That is directly the request by Metropolitan Toronto to the provincial government.

Mr Mills: They're just passing the buck, basically, but they did have that authority here.

Mr Turnbull: Since they've passed it, in your words, are you going to do something about it?

Mr Mills: I'm not going to comment on that.

Ms Swarbrick: Do something about which government put a law in in the first place, you mean?

Mr Turnbull: No, we didn't put that in.

The Chair: I think there's clearly an issue here which is part of the debates. I think the question has been placed. I want to thank you very much for your presentation. You have raised a number of questions, and one in particular which will, I'm sure, continue in debate. Thank you again for coming.

Ms Poole: Mr Chairman, on a point of order: I am quite concerned, because the parliamentary assistant has just placed information before this committee that I am convinced is completely erroneous. In order to amend the Assessment Act, which dictates what classifications are -- that section used to be 63 of the Assessment Act and that's what everybody still calls it but it's now section 58 of the Assessment Act -- that would have to be amended if they were going to change classifications. What Mr Mills is saying is that this is Metro's responsibility. I would like the parliamentary assistant to explain what he means by that, because quite frankly his comments are quite contradictory and we cannot understand where he's coming from.

The Chair: Would you like to place that as a question to which we could get a more specific answer, in the way we did in the letter from Mr Cooke?

Ms Poole: No, Mr Chair, I would like Mr Mills to answer that right now.

The Chair: Well, I will ask him to reply.

Mr Mills: We are prepared to table a written answer to that question later today.

Ms Poole: But Mr Mills, there may be people who are watching this right now who will not watch these proceedings later today and will not know what the answer is. You have already indicated that you had a response to the question. You have given a partial response and we would really like clarification of what you meant. Or are you saying that you don't know what you were talking about and therefore have to have the ministry officials bail you out later?

The Chair: Ms Poole, you've asked the question and the parliamentary assistant has said he is going to table a written response. We'll just have to move on from there.

Ms Poole: So he doesn't know what he was talking about?

The Chair: We'll get a written response later, and when that comes, we can share it with those who are viewing.

Again, I'd like to thank you very much for being with us.

Mr Amonsen: We said you'd need a legal opinion.



The Chair: Is Mr Barry de Zwann here, if I've pronounced that correctly? If not, perhaps the representatives from the Upper Yonge Village Business Association would be good enough to come forward. I'm sorry: the representative.

Ms Michele Kesten: I was hoping others would come, but this is our busiest time.

The Chair: I know sometimes when you come into a committee the first time we look all terribly mean and ornery, and we really are just nice, warm, fuzzy people and we're delighted that you could come this morning and that you'll share your thoughts with us, so please have a glass of water and just relax.

Ms Kesten: First of all, it is very scary. We're not business people; we're not independent business people; we're not used to making depositions. It's the first time I've been here.

The Chair: We thank you for coming and I think, frankly, in these hearings we want you to come forward.

Ms Kesten: I have an apology to make. This is our busiest time and we don't have a typed-up presentation to make.

The Chair: Not everyone does.

Ms Kesten: Oh, good. I just want to make sure you have a copy of the figures.

The Chair: Could you just identify yourself for Hansard.

Ms Kesten: My name is Michele Kesten. I'm the owner of a store called the Casual Way in the Upper Yonge Village. The Upper Yonge Village is on Yonge Street north of Eglinton, between Broadway and Lytton, south of Lawrence. My friends north of Lawrence agree with what we are going to say, I'm sure, and I was hoping they would be here, too, but it is our busiest time.

Can I just make sure you have the one typewritten copy I have? It's facts and figures.

The Chair: Yes.

Ms Kesten: Great. If you'll excuse me, I'll read this.

The business community of the Upper Yonge Village is opposed to Metro Toronto's changes to the real estate and business taxes. We do believe in a fair tax system, but the proposed MVA system is unfair.

We are frustrated by the planned implementation and appalled by the irresponsible process by which these proposals have been handled by Metro council. We urge the provincial government to reject these proposals and suggest that you ask Metro Toronto to find a more realistic tax system.

MVA is not a fair realty tax system by itself. It doesn't take into account the use or efficiency of services or the quality of the units. Older parts of Metro have already paid for the building and implementation of services needed for growth and are now being asked to pay again for new urban growth and for suburban sprawl. We feel that market value, using only one year's assessment, isn't viable in the turbulent real estate market of Toronto. Not all property values rise and fall proportionately here.

There are also great concerns with the assessment itself. It seems that location has played too great an importance in evaluation. However, the assessment guidelines are not available. We have no way of judging whether these guidelines are viable or not. Where is the accountability for these assessments? We all can rhyme off so many inconsistencies that we really have to suspect them.

In another matter, we question why commercial properties are taxed at a higher rate than residential properties.

I'd like to address the implementation now. The 10%, 10%, 5% compromise for business payment of MVA doesn't really cover up for the fact that MVA stinks. It really means that some of us will be able to get through another year, perhaps. However, I don't expect my business to increase by the 20% needed to pay a 10% increase and we'd be totally overjoyed if any one of our businesses saw an increase in business able to pay a 25% increase in three years' time.

If this comes on top of the 5% expected increase in Metro taxes, this really means 15%, 15%, 10% increase, and we can't expect a 40% increase in business in three years. For us to pay a 40% increase, we have to do over 80% increase in business; 40% to pay for the goods and another 40% extra to pay these taxes. That's not counting on the fact that we have to hire extra people to do this increased business, or we have to do it by advertising or some other means, all of which costs money.

Some people may say: "Oh, good. You're getting a great deal. You're only having to pay a 10% increase." That's wonderful compared to 100%, but it's not wonderful if we don't have it, and we don't.

If you can't collect this increase from businesses -- if we close -- then you're up the creek because the residents will have to pay the difference in order for Metro to run its business.

There has been great bitterness and divisiveness in Metro Toronto. We are hearing of tax strikes, and there are many people in the Upper Yonge Village who are organizing this and who are in favour of it. We have the proposal of the city of Toronto to leave Metro, and I think really what the province has to do is ask why. I don't think it's completely or in part due to the fact that we have to pay an increase in an unfair tax system. I think the main reason the tax strike talk and leaving Metro is going on is because of complete frustration with the way Metro council has handled this whole issue.

There was no time for the public to even get the proposed facts on MVA. Our association received our proposed tax changes, which went from 100% to 400% increases, only two weeks before management committee met. That was mainly because one of us had met with Anne Johnston and she had warned us ahead of time that we should be watching out for this.

Our association isn't even a year old. Had this happened a year ago, there would have been nobody in our area to contact to notify us. In two weeks, people, many of whom might have been taking a little bit of time off, had to scramble and try to figure out exactly what was going on. You're all used to this but this isn't our business. It took us a long time. Within two weeks we had to talk to Metro and we had to dress up in silly costumes and stop traffic to make people even realize what was going on.

Even two days before full council met, we received pages of North York businesses that were going to be receiving an increase of over 100% in their realty taxes. We started phoning some of these people and they were shocked. North York business people and North York residents expected their taxes to go down, and all along Yonge Street there were many that were going up. This was two days before Metro voted on it, so these people had no way of giving any input into the process.

We don't understand why there was such a rush, at the expense of fairness, to implement these changes by January 1, 1993. I guess this is the time now to look at this sheet I gave you. We held an emergency meeting when we found out what was happening and managed to collect -- did you want me?

Ms Poole: After you finish your presentation.

Ms Kesten: We just asked a few questions and managed to get the following information. Of the 51 people who handed in this information, the average tax increase was 202%. The anticipated business closures were 64.7%, and this included a couple that was going to relocate out of Metro.

One of the questions was, "How will you try to pay for these taxes if you don't close?" We added up the number of people who were closing, the number of employees they had and the number of job positions lost if MVA was brought in, and that was 119 out of the original workforce of 395. This doesn't count the employers or the business owners who are without a business if they close.

We just wanted a general idea, and this isn't a wonderful research piece, but it gives an idea. We assumed that each employee was earning $20,000 a year. We took the income tax deductions, the CPP contributions by employees and employers, the unemployment insurance, the health tax, all the various taxes that are taken, and we found out that the loss to the three levels of government just from the tax loss from the unemployed people was $767,431. We figured out what the people who would be unemployed would collect in unemployment insurance. They would be paid over $1 million.

All told, the number of job positions that would be lost by closures in our little survey of 50 people would have amounted to, once you figure out all the other losses to the government, $2 million that the three levels of government would have lost to do their business. This would have to come from residents.


Even assuming that this isn't totally, 100% accurate, it still gives an indication of the problem. We have over 200 businesses in the area. If a quarter of the businesses could conceivably cost the government $2 million, then multiply it by four. That's $8 million. There are at least 15 business communities that I can think of that are being hit by this, and that adds up to a lot of dollars.

This survey is not scientific, but I think it gives a good indication. By the way, this isn't scaremongering. The last thing a business person wants to do is to tell anybody they're considering closing or that they're not going to be able to hang on. The bank immediately starts getting nervous; our suppliers get nervous. Nobody willingly writes down their name and says they're going to do it, and all the people wrote their names down. So this is a pretty serious thing.

The reason I give you this survey is just to show you the lack of information that Metro council had to decide to bring in this severe tax measure. This just indicates the shortfall in government money to do its business; this doesn't account for all the other economic benefits that businesses give.

This is, I agree, the original 100% increase that was to have been paid January 1; it's not the 10%, 10% and 5%. However, it gives an indication that something is wrong and somebody wasn't doing their job, or business just isn't understood.

The proposals would have been and still are equally disastrous to the nature of Metro Toronto. Without viable businesses in the centre of Metro, it is a concern that we would have a concrete jungle in the centre of Metro, that we would have people running from the suburbs, taking the highways of Yonge Street and Bay Street down to O'Keefe Centre and to Bay Street offices and we wouldn't have the lovely city that we're all so proud of.

Yet again I have to ask, where were the economic and social impact studies done? Why is Chairman Tonks talking on the radio about doing them now that we have the five years of 10%, 10% and 5%? I think that's disgraceful, that he should have waited so long to even think about such a thing. We had a very short time line, for what reason I don't understand. It seems more time was spent on consideration of trolley buses than on this new tax system which would change the economic and social fabric of Toronto.

Instead, we had a series of three all-night meetings, mad scramblings and last-minute adjustments in Metro Hall that resulted in no one being satisfied and the idea of tax strikes being a very feasible idea. We feel Metro Toronto deserves better government than we received. For a new tax system to be introduced, we deserve the facts and we deserve time to evaluate them. We expect our representatives to give proper consideration, to do necessary economic and social impact studies. We have to condemn Metro council's irresponsible behaviour and hope the province will not rubber-stamp this mess.

I haven't given you specifics, but if you have anything --

The Chair: There are a number of questions. Thank you very much. I have Mr Mills, Mr Turnbull and Ms Poole.

Mr Mills: I would just like to correct for the record item one, some relevant facts. Of course, the 202% average tax increase is not correct; it's 25% spread over three years, based on the 1992 assessment.

Ms Poole: You said that in your speech.

Ms Kesten: Yes.

Mr Mills: I'm just getting it on the record. Pardon me. I have the floor.

The Chair: Order, please.

Mr Mills: I'm getting a little bit fed up with this.

The Chair: Order, please. We're here to listen to the witnesses. Mr Mills, if you could conclude your comments.

Mr Mills: That's it, but I appreciate having the floor when I get the floor and not having interruptions, Mr Chair.

Mr Turnbull: Well, you did that to us before.

The Chair: Order, please.

Ms Kesten: I did mention that.

Mr Mills: I realize that.

Ms Kesten: The reason I brought these forward was to show you the frustration that the business community feels, the distrust we have with the way this was brought in. I don't understand how this could have even been brought in in the first place. That's why I brought this forward, to show you the fear that we have. But even if this goes through five years from now, I don't think we're going to do all that wonderfully in five years' time that we'll be able to handle this either, and pay 100% increase.

The other problem I have to tell you is that we were expected to pay this on January 1, four months away. Our business plans go until -- well, they're a year in advance -- June. I had already ordered merchandise, and to be hit all of a sudden -- I was off easy, my realty and business taxes doubled, so all of a sudden I had to find an extra $15,000 to pay if this had gone through. As it is, it's going to be hard, but I just brought this forward to indicate the problem of the lack of economic impact study.

Mr Turnbull: I'll just give you a little bit of my background. I was not in politics before the last election. I hadn't dreamt of being in politics, quite frankly. My wife runs a small retail store and I know the problems you have in these very difficult times.

When I was sitting at home -- before I was in politics -- reading the newspaper, I used to often see, during the 1988 boom, Bob Rae absolutely railing in the House about speculation and how awful this was. The amazing thing is that this property tax is based on the speculative boom of 1988 to the extent that a tenant in a shop had absolutely no way of cashing in on the speculative boom in real estate because they were the tenant. It's absolutely ludicrous.

The value of shops in those days was not based on the income flow because it didn't make any sense -- the prices that were being paid. Now you're locking in a system based upon the speculation that Bob Rae said was so awful that you had no way of capitalizing on and in fact that --

Mr Anthony Perruzza (Downsview): You guys invented this.

The Chair: Order, please.

Mr Turnbull: The landlords who didn't get any --

The Chair: We are here to listen to the witnesses and the questions. Order, please. Mr Turnbull, sorry. I just want to be very clear: As the Chair, I will not tolerate interruptions. We're here to listen to the witness and to questions. Mr Turnbull has the floor. Thank you.

Mr Perruzza: Mr Chairman, on a point of order.

The Chair: Let's just continue. You'll have an opportunity to speak later.

Mr Perruzza: On a point of order, Mr Chairman.

The Chair: Briefly.

Mr Perruzza: Mr Chairman, when you get on the record information that is inconsistent and incorrect --

The Chair: That is not a point of order. We will have opportunities to debate the issues, Mr Mammoliti, but this morning --

Mr Perruzza: But they set up the system.

The Chair: Mr Mammoliti, this morning we're here to deal with the witnesses.

Mr Turnbull: We have had a series of stupid interjections, and you'll get used to it as you watch this.

To the extent that the landlords who didn't sell their properties during 1988 -- they could have cashed in on it, but they didn't. They were in for the long haul. They weren't speculators, to the extent that employees didn't gain from that speculation and to the extent that employers who were tenants didn't get any benefit from it, and the NDP were saying how awful the speculation was.

You're now locking in a system based on 1988 speculation which has no relevance to the turnover you can do in the shop, and also your business taxes are based upon that. Does it not seem incredible that we have a government prepared to press ahead with this, notwithstanding that the Fair Tax Commission is about to report and say it doesn't like Metro's MVA plan?

Ms Kesten: I don't want to get into politics here; I'm just trying to give the situation as I see it. You mentioned the Fair Tax Commission. This was another thing that peeved us very much, that Metro council seemed to bamboozle this thing through before the Metro tax commission on property and realty tax gave its report. They knew it was coming; they still rushed it.

It does irk me that there was speculation. How it affects me is that in our area we had an unusual situation. Just before the assessment was done, our rents increased immensely. Sporting Life moved in. Everybody thought Sporting Life was going to bring tons of business to the area. The rents more than doubled in a very short period of time.


At the same time this was happening, I suspect that the Bay Street buildings were losing their value. They had already seen the recession, perhaps, and they were losing value, and then along comes the assessment. Well, certain buildings were already feeling the recession, so their value wasn't as great. We were in a very unusual situation because there was very high optimism in the area. Of course, the optimism was a little bit too high and things didn't materialize as everybody had expected, and rents started to decrease drastically after the assessment was done.

Here we are on Yonge Street facing a high assessment. Since the assessment was done only in one year's time, it isn't a fair assessment because it doesn't really give the highs and lows. I've heard the argument that values are falling proportionately all over Metro. I don't think that's true, just from my own experience.

Mr Turnbull: That's perfectly correct. As a real estate broker, I can confirm that the increase and decrease was uneven across the city, particularly in rents on Yonge Street, Avenue Road, Bayview areas.

Ms Kesten: Not to mention the fact that I think the assessments can't quite -- I just don't agree with the assessments, so that's why I was fearing that the assessments. Even if we do take an assessment to take one year, I can't see it here in Metro.

Mr Turnbull: Would I be correct in thinking that there were many tenants who were locked into long-term leases at much lower rates who, if they had had to pay the rent of 1988, in fact wouldn't have been able to continue?

Ms Kesten: You can see that happening. A lot of businesses in our area had 25-year leases at way below market value. As soon as their leases were up they were out, and there's been a high turnover of businesses in our area.

Mr Turnbull: Yes. Thank you very much.

The Chair: Just before turning to Ms Poole, I apologize, Mr Perruzza. I identified you as Mr Mammoliti and I apologize to him as well. I don't know whether it's sitting till midnight all week and getting blurry-eyed or what.

Mr Perruzza: That's all right. I just wanted Mr Mammoliti to get on the record.

The Chair: In any event the Chair, having recovered his senses, turns the questioning over to Ms Poole.

Ms Poole: First of all, Michele, welcome to the committee. I was very much hoping that the Upper Yonge Village Business Association would present, because if members of this committee had walked up that stretch of Yonge Street, they might not be quite so cavalier about these numbers.

In store after store, newspapers were spread across the front windows so all you could see was a big sign that said, "Current taxes $4,600, proposed taxes $16,900," and literally there were 200%, 400%, 600%, 800% increases. It was astonishing and this 65% figure is the tip of the iceberg.

Even though these figures were questioned, because there is a 25% cap, the information --

Ms Kesten: For the first three years, which is very scary to us all.

Ms Poole: Plus any normal increases that Metro passes on, and you're being very generous by presupposing that the school board and Metro council could limit their increases to 5%. That would be nothing short of a miracle if past performance is any guide.

So you're looking at a 40% to 50% increase over the next three years. There are 41,000 businesses across Metro that will face the full 25% increase protection of the cap plus the others. Of that, 41% are in the city of Toronto, and I suspect an enormous proportion of those businesses are in our area.

My question for you is, with this 40% to 50% increase over the next three years, will the vast majority of those 65% of businesses that said they will go out of business still go out of business and will we still lose those jobs?

Ms Kesten: Oh, dear. Unfortunately, and I say this, I don't think the businesses really realize what effect this will have on them. I think they are so overjoyed by this false 10% increase and the fact that they'll last another year that I don't think they realize what's happening.

I hate to say it but I know what's going on in our area. I know that when we had a meeting -- we wanted to form an association -- we had decided on a certain membership fee, and the two bankers who were there said we had to cut it in half, that they knew what was going on. So I'm not privy to people's financial situations, but I have an idea and, yes, I think this is very close to relevant still, quite frankly.

It's very hard for us as business people to make our problems known. We're all independent. We have two offices in the whole 200 buildings. We have back rooms. We work at secondhand desks and we're surrounded by merchandise. We don't have the facilities to make known our problems to the various government areas. We work six or seven days a week and we're working a good 10 hours a day and taking work home. It's very, very difficult to come up here and talk. It takes days to make presentations, days that we don't have, and I think this has been a problem I see, because I see the frustration with the tax revolt.

The reason I'm here -- you know, everybody said: "Why bother? You've got so much work to do, why bother?" It's taken me days to prepare this and I don't even have a typewritten thing and everybody said, "Why bother?" I happen not to agree with the people who are doing the tax revolt, mainly because there's another step before we make our frustration known. That is to educate the various levels of government on the problems businesses have, and we haven't done a very good job. This whole thing that comes out that we're expected to do a 100% increase in our taxes in January gave an indication, and that's really why I'm here. As business people, we just don't have time to do all this stuff. We don't have the facilities.

But just to answer your question, I think there's going to be a huge turnover. Even since this has all begun, we've seen four businesses -- five businesses, I've just heard -- go out of business in the last couple of months. I am fearful of what's going to happen after Christmas. I see cutbacks all over. Once you start cutting back on service to your customers by staff or you cut back on advertising, all those things, that means you're going to cut back on your ability to do business. I've seen it all up and down the area.

Ms Poole: Your presentation has been excellent and I hope you feel it's been worth your time. It certainly has been from our perspective.

Ms Kesten: I just hope that politics won't get mixed up in this, but I'm fearful --

Ms Poole: It always does.

Ms Kesten: From all parties.

The Chair: We thank you very much for coming in. You were mentioning about informing people of issues and problems, and that's the way it happens, so we need people such as yourself to come forward. Thank you again.

Ms Kesten: I'll tell you, it's hard to do. Thank you.

The Chair: I'd just like to note for those who are going to be presenting that there was some confusion around the time when one presenter would be here. I'll just read out the order we have through to lunch so people can know where they will be. Our next witness will be Mr Klaas Vangraft, then Mr Joseph Tseng, Ontario Hydro, and Bob McMullen.


The Chair: Would Mr Vangraft be good enough to come forward? Thank you very much. If you would be good enough to introduce yourself for Hansard, then please proceed. You have 10 minutes, and I would just mention that you may use all of the 10 minutes in your presentation or, if you want to leave a bit of time for questioning, that's fine too.

Mr Klaas Vangraft: My name is Klaas Vangraft and I just appear as a private citizen and home owner in the downtown Toronto area. I will not take 10 minutes probably. I've just written down some very quick thoughts, as I didn't have much notice ahead of time to appear before you. I will just read my note summation here to you.

Dear committee members and Mr Chairman, I appear before you out of concern about the effects of the proposed market value assessment taxation plans which Metro Toronto is asking this government to ratify before the January 1, 1993, deadline.

It may be best if I illustrate the effects that MVA will have on my family's situation. In 1966 we purchased our current dwelling place, not for speculative reasons, but as a decent residence for our young family. The fact that we still reside here attests to the fact that we like the location and the home.

The purchase price at that time was $38,500. Property taxes seemed manageable and have increased over the years to a current rate of $3,339 per year. The house is now assessed at a market value of $1.096 million, and by the original Metro proposal our taxes would increase to $10,210 per annum, an increase of approximately $7,000 per year. I am partly retired, and at my age and in my profession it is highly unlikely that my income would suddenly increase by the proposed Metro increase of $7,000 per year.


Many people in my area are retired and will face extreme financial pressure if MVA is introduced, some to the point of having to move to cheaper accommodations. This would have devastating effects on the fabric of our neighbourhood, which many have chosen for its ambience for decades.

I must protest at this point the extreme haste in which this process is taking place. The hearings in front of the Metro committee were a devastation to the many presenting briefs. In my case, the opportunity to speak was afforded at 3:45 am, by which time many people had left and the committee seemed, to put it politely, disinterested.

The watered-down version of full MVA will not cure the financial dilemma Metro finds itself in and will lead to major disruption of the downtown area. Many of us are still baffled by the methods used to assess our properties and would welcome information on this process so that we may have a feeling of confidence in the many levels of bureaucracy that govern us.

I'm stating my Toronto realty tax assessment number in case you wish to verify my statement. The lot size has remained the same, 75 by 50 feet. The house has not changed other than modest updating of wiring, plumbing etc since 1966.

I close by opposing strongly the proposed MVA method of taxation. Many of us are not speculators and wish to live in an environment where public services are rendered at a fair cost and in an efficient manner by our municipalities, not at a cost based on some hypothetical market value that may change from year to year and from economic cycle to economic cycle.

Neither the economic climate nor the financial state of many citizens and businesses can stand this method of taxation, and I therefore urge you to decline the request from Metro to legalize this way of increasing its revenue. I thank you for the opportunity to vent my concerns.

Ms Poole: Mr Vangraft, thank you very much for your presentation today. I think you well illustrated something that not too many presentations have brought out to date, and that's that at the time a lot of people in the city of Toronto bought their homes, they were fairly modestly priced. People bought according to their income and according to what they could afford for mortgage payments and taxes.

However, over the last 20 to 30 years, particularly the last 20 years, the real estate market has gone berserk in Metro, and particularly in the city of Toronto. You stated the instance of a $38,000 home now going to a market price of over $1 million, which is fine if you're going to sell it, but you want to live there and you illustrate the problem I have in my own area.

On my street, in Banff Road, there are primarily senior citizens who reside there. In fact when my husband and I bought the house in 1975, we were the only people on the entire street who had children. I moved there at the time my son was born. Most of those seniors are still there. Their income level has not increased. In fact it's gone down substantially since they first bought the home.

Many of them were born in the home, that's how long they've been there, since the early 1900s, and they simply -- my husband and I are fine. We're both professionals, we both have a good income, we don't have a problem. But this plan is not based on income. It is a supposed wealth tax, but it presupposes that people who bought their houses 20 and 30 and 40 years ago are wealthy. I just would like you to comment on that, because I think it's a real problem with this proposal.

Mr Vangraft: Yes, I agree, and in my area particularly some of the houses in the boom were bought by speculators and even torn down and monster homes built up, and of course they go for a sizeable amount of money, which affects the people around them tremendously, especially in my case. I have a house across the road where they bought the property, razed the house, built a monster home and it's on the market for $2.25 million, and I have no say in that. My income hasn't changed. In fact it's probably, as you say, gone down.

I'm prepared to pay fair taxes on my property. I think most people who make presentations here are. It's just the sudden jump and the fact that it's based on 1988 prices and the fact that many of us do not plan to sell our homes in any shape or form. In fact the valuation of my home is outrageous. The size of the property is 75 by 50 feet and it seems to me a tremendous amount of taxes and increase.

I grant you that Metro has watered it down after all the hearings in order to probably get some form of this passed, but I do want to state the fact that this method of assessing is totally erroneous and unfair to the majority of citizens.

The Chair: I'm sorry. I'm going to have to move on to Ms Swarbrick and I'm going to allow Mr Perruzza a short question, having wrongly identified him and feeling still very guilty about that.

Ms Poole: Call me somebody else too.

The Chair: So Ms Swarbrick and Mr Perruzza, and if our questions could be short and direct.

Ms Swarbrick: Thank you, Mr Vangraft. I think you show very clearly why Metro did feel that it clearly had to limit the residential increases to 5%. I think you also show very clearly not only why my government is not in favour of going to the full MVA and plans to do serious studies between now and the next assessment period. I think you also show very clearly what I have long thought, including in my past lives before getting elected in 1990, the real flaw with the impact of speculation on the cost of land in Metro. I think that's something I'd like to see our government address further as well, between now and the next assessment period, because certainly what you pointed out is ludicrous. So thank you.

Mr Perruzza: Just to point something out, and ask a very, very brief question. I think everyone on all sides of the House would agree with you that our current property tax system is unfair in the way we do it. But we are on a market value system now, without the new stuff that's coming from Metro, so that people can technically, under the current system, appeal their taxes.

There's a mechanism in the legislation now based on value essentially. You can go argue now before the Assessment Review Board to have your taxes lowered to the same rate as your neighbours, if you're paying a higher rate. Technically, you could do it on a neighbourhood-by-neighbourhood basis if people organized. In fact you could do it across municipalities, technically now, if people went out and hired the lawyers and were educated enough, so that what would happen is there would be a net tax loss to Metro.

There's a net tax loss to Metro now ranging between $90 million and $100 million per year. But if people undertook this task next year en masse, Metro would lose hundreds of millions of dollars, if not billions of dollars, in next year's taxes, which would have to be made up through huge mill rate increases. You would be cranked up not 5% and 5% the following year, but you'd be cranked up to what you should be at in terms of our current system.

We didn't introduce this system. This system has been around since the early days of Confederation and even before and subsequently amended and changed by the former Conservatives. The Liberals really didn't touch it all that much, although they initiated the debate on market value. It's something that's been going on for the last 25 years. So there's that problem that's built into the system now, which needs to be corrected if we are to pursue any reform whatsoever.

In my view, some short-term pain will have to be felt by many of the citizens and residents in Metro in order to achieve long-term gain. I just wanted to know if you were aware of that, that people could actually appeal their taxes now.

Mr Vangraft: It would probably be advantageous if the citizens were informed of their new assessments formally. I had to dig at city hall to get the information I have here. For a taxation system that proposes to be introduced by January 1, it seems to me very undemocratic to have something imposed from on high, no formal notification of assessment. I never saw anybody around my house assessing my house, quite frankly, so how they established the figures, I haven't a clue.

Mr Perruzza: The Ministry of Revenue in fact brought in assessors from all over the province within the last two years to do precisely that, to re-evaluate the 1.5 million or 1.6 million properties across Metro. So they did do that.

Mr Vangraft: I still think that more information would be extremely helpful to everybody concerned.

The Chair: Thank you very much for having come before the committee this morning.

Ms Poole: Mr Chair, might I ask a question of clarification from the parliamentary assistant? Is it still the government's intention to allow Metro to go to full market value on homes at the point of sale?

Mr Mills: At the moment, there hasn't been any change in that policy, but that may well be some sort of consideration.



The Chair: Mr Joseph Tseng, please. Would you be good enough to introduce yourself for Hansard and then please go ahead with your presentation.

Mr Joseph Tseng: Good morning, Mr Chairman, members of the social development committee. I want to apologize for getting signals crossed.

The Chair: It's quite all right.

Mr Tseng: I'm the president of Goldhawk Community Association, Scarborough, and also a member of SHAFT. I've been campaigning for market value reassessment for the past seven years. I think there can be no fairer method of property taxes than market value assessment, because market value takes into consideration all of the factors, like square footage, accessibility and rental income.

During the MVA process, there was so much misinformation used by Toronto politicians. They turned a lot of Toronto residents into cannon fodder. A lot of intimidation tactics were deployed by those against MVA to the MVA supporters.

We do have a market value assessment system right now, but it's an outdated one. Who is the guy who put us in such a mess? The Metro politicians, because they have never wanted to take a proactive approach to update assessment during the past 35 years. Assessment values have not been kept current, which caused some old homes and commercials to have their assessments frozen as far back as 1940. I understand that some of the older homes have a 1920 market value. Newer properties have been assessed at the market value when they were built.

Now the Toronto politicians have to protect their own political interests, and they think their residents and businesses should not have to pay a fair share of the property tax. A lot of the owners have been getting market value for their property and rent, but they don't want market value assessment for their property taxes.

I am one of the 300,000 residential home owners in Metro who are supposed to benefit from the watered-down MVA proposal. Canada has always taken extraordinary steps to ensure equal treatment for its citizens, but I have not seen this from some members of Metro council. Do they care about fairness and equity? I hope your committee and your colleagues will show more sensitivity on fairness and equity.

It is time for politicians to realize the inequities in the current tax system. MVR is supposed to address it, making the system more fair and equitable. I've gone over the resolution in front of you. It will not make the system more fair and equitable. Some home owners who have been enjoying a tax holiday will continue to do so.

Do not interpret the silence from the 300,000 home owners as a lack of resolve for a wise, fair and equitable property tax system. Perhaps, knowing the burden of unfair taxation which they have carried for many years, they are reluctant for others to have to go through the pain. Nevertheless, their compassion should not slow down the change. Fair is fair.

It is time for everybody to contribute their fair share of property tax. I urge you to adopt the resolution from Metro. It is something positive and it does show a token commitment to a fair and equitable property tax system.

The proposal will provide time for the businesses which are supposed to get a huge increase to become more competitive via different avenues, like sizing, improved internal efficiency, mindset etc. This proposal will not correct the existing unfair business competition which existed for the businesses in the suburbs and the new buildings in Toronto.

Another question is, do we need centralization of all the commercial and business in downtown Toronto? Decentralization is the way to go, and we are talking about telecommunications.

Another problem is the vicinity clause of the current provincial appeal in the Assessment Act. I live in Scarborough. I've tried avenues during the past few years to appeal my property tax. With the vicinity clause, it doesn't apply to both of us.

I need you, ladies and gentlemen, to show some leadership in this issue. The Premier wrote to the vice-president of the SHAFT association during the summer that the province will pass whatever Metro has adopted. If you don't adopt the resolution, you are forcing a lot of angry taxpayers to a tax revolt. Thank you for giving me the opportunity to appear in front of you.

The Chair: Thank you very much. I would just ask members to do their questions in a short form so we can get through; we're a bit rushed for time.

Mr Perruzza: I'd like to thank the representative here this morning. I wasn't going to ask any questions, because I agreed with 99.9% of the comments he made. Just on the appeal provision: In the act and the Assessment Review Board, I agree with you that the members of the boards don't have sweeping powers to interpret the appeals in the way I think you and I would like to see them. You understand that the courts do have that ability and that authority. If entire neighbourhoods actually challenged some of the provisions in the act, their chances for success would be very good in the courts. Do you think people across Metro are educated enough now to be able to organize around those lines and actually take some of the other parts of Metro to court and seek that kind of justice?

Mr Tseng: I think they've tried to appeal the whole community before.

Mr Perruzza: In the courts or before the Assessment Review Board?

Mr Tseng: The assessment board.

Mr Perruzza: But you understand that the courts and the Assessment Review Board are two separate things. While the Assessment Review Board has a very limited scope in which to award its decisions, the courts are substantially different.

Mr Tseng: I think our councillor, Bas Balkissoon, did appeal it to the court also.

Mr Perruzza: And what happened there?

Mr Tseng: The court rejected it.

Mr Perruzza: They appealed it on a community-wide basis?

Mr Tseng: On his own house assessment.

Mr Perruzza: Just one individual. Now I understand.

The Chair: Thank you very much for coming before the committee this morning. We appreciate it.

Mr Tseng: Thanks a lot.



The Chair: I now call the representatives from Ontario Hydro, if they would be good enough to come forward. Please take your time to get organized. When you are, would you be good enough to introduce everyone for the purposes of Hansard. Welcome to the committee.

Mr Douglas Smith: Thank you. My name is Douglas Smith. I am acting vice-president of procurement and power system planning at Ontario Hydro. The gentlemen with me are Mike Sheehan and Sam Roberts. They are from the corporate real estate division of Ontario Hydro.

I'd like to thank the committee for giving us the opportunity to present our brief. It is very important to the customers of Ontario Hydro. We have prepared a formal brief, which runs to approximately 10 pages, which I believe is available to you. I propose to summarize the highlights of that brief and try to be short since you're running behind schedule. I would urge you to read our brief later to clarify any issues that I raise, and because I am just summarizing I may miss some key points.

To put our submission in context, I'd first like to say that Ontario Hydro does not object to the principles associated with reassessment and we do not object to paying a fair share of taxes in Metropolitan Toronto. However, we do oppose the specific plan that is proposed by Metro with respect to the impact of taxation on our transmission corridors.

As proposed, we have been advised by the Minister of Revenue that we face a potential increase in taxation of $60 million in 1993. We believe that either Metro Toronto or the government, before passing Bill 94, should examine this issue, and if there's no indication by Metropolitan Toronto that it is prepared to address our concerns, Bill 94 should be amended, and we have a proposal on that. As I go through my presentation, you will see that we feel that the change needs to be acted upon very quickly, because we will be assessed in January for this higher rate of taxation.

The second item I would like to put a perspective on is to explain how Ontario Hydro is taxed. We are exempt from municipal and school property taxes, as are federal and provincial bodies. However, recognizing that we have properties in various municipalities around the province, we pay grants in lieu of taxes to those municipalities. I don't really need to refer to the difference between grants in lieu and property taxes any further than that, except to make the distinction that we are technically not subject to municipal and school property taxes. Other than that, essentially they operate the same way, and I'll explain.

We pay grants in lieu on our own rights of way, which essentially means transmission corridors, our administrative buildings, our generating stations, transformation buildings and any other owned lands that we have. In addition, we're assessed a business tax at a rate of 60% of our payments in lieu for realty tax. I'd like to point out that you've had submissions this week from the railways, and they are not subject to business tax. The second point I'd make about this is that we make payments to municipalities at the full commercial mill rate, including the school portion. Provincial bodies do not make payments on the school portion.

The key focus of my presentation today is on the effect of the taxation system on our rights of way. Basically, there are small impacts on the taxation issues for our other properties, but 99% of the $60-million estimate we have presented is due to the taxation on our rights of way. We believe that implementation of the Metro Toronto plan, as submitted, is not getting through to the principles of fairness and equity, particularly as it affects the customers of Ontario Hydro. Throughout my discussion, I'd like to stress that we're talking about our customers, because Ontario Hydro in fact is there to serve the customers of this province.

There are three issues with this program as it stands. The first is that the assessment method will continue to be based on the value of abutting properties. If you're not familiar with that, our rights of way in fact are taxed by looking at the value of the properties on either side of the right of way. There has been no reassessment of the value of our lands.

On top of that, Metro plans on introducing taxation on these lands for Ontario Hydro properties and the railway properties without any cap and with no phase-in. We believe this is inequitable to the customers of Ontario Hydro, because the abutting properties which are going to be used for the basis of determining our taxation will in fact receive capping and phase-in. The end result is that we will be paying taxes that are multiples of the rates of tax of the abutting properties by virtue of the fact that no capping is provided.

The final point I would make is, in spite of numerous statements by various government bodies that we are not going to full market value assessment, the plan as submitted, and the way it treats Ontario Hydro corridor lands, is in fact going to full market value assessment immediately.

What are the impacts on Hydro's customers? The first one relates to customer bills. We've been advised that the increase in cost could be $60 million. This is a 400% increase in the payments that we've been making to date.

You're all aware that customers in Ontario are not very happy with our rates these days, and in these economic times they have a right to feel that way. We are taking strong measures to try to reduce our costs and have announced that for 1993 alone we will be cutting our costs associated with operations and maintenance by $115 million. We expect to follow that up by a further $100-million cut in 1994. We've also announced that we will cut capital spending for the future by $7 billion, and we're looking at further cuts.

The $60-million increase in grants in lieu, or taxes, cannot be offset by further cuts, certainly not easily. If it can be offset, it can only be done on a temporary basis. In essence, the $60 million will get locked into our cost base for ever. Inevitably, this will impact on customer bills.

There's a further problem. We cannot isolate the costs of this item and charge them to the customers in the area that is affected. In other words, we can't take the $60 million which is due to the reassessment in Metro and direct it back to the municipalities that buy electricity from Ontario Hydro in the Toronto region. The impact will be spread across the entire province, from Kenora to Cornwall.

It will affect our industrial customers, and some of our customers are very large. I'm advised that one of our largest customers is also one of the largest customers of CN Rail. All of this impact occurs with a windfall revenue gain for Metropolitan Toronto, a $60-million increase in revenues at the expense of the customers of the rest of the province.

The final key impact I would like to raise is the impact on tenants who utilize our lands. We have for many years recognized that tying up these lands and not allowing them to be utilized for anything else is not appropriate. In some cases, we make land available free for park facilities etc, but we also rent parts of our land to a number of different businesses.

I believe there are 163 different businesses that currently rent land on our rights of way, including the TTC, GO Transit, various parking authorities in the city of Toronto, George Brown College and others. This tax increase will of necessity be passed along to those customers. Their rates will go up, and they will inevitably then pass them on to their customers. I see that the list I've made tends to be related to public services, so the costs of those public services are going to go up.

I hope my brief review has highlighted our major concerns with the Metro plan. We have heard comments by Metro officials that give us a strong feeling that they will not address our concerns about capping and phase-in at all. In fact their public statements say it's a provincial problem associated with the assessment methodology of the lands. We think it's both of those problems.


We believe that we are ready for a tax increase in January if some change is not made to the Metro plan. Basically, we have two proposals to make to this committee. The first is that unless Metro provides appropriate assurances that in fact it will cap the rate of increase of taxation on Ontario Hydro rights of way, this committee should amend Bill 94 to introduce capping and phase-in provisions for Hydro rights of way in the same manner as the current plan is for commercial properties.

Our long-term proposal is that the provincial government initiate a study in conjunction with the representatives of various agencies and affected parties to look at the way right-of-way lands are assessed, both ours and the railway's. We believe the input of the Fair Tax Commission should be considered in this regard and that this should take place immediately.

I'll conclude. I'd like to stress that we do not object to paying a fair share of our taxes, but we do not believe the Metro plan, as currently constituted, is fair to our customers, particularly those customers outside of Toronto. We do believe that the enactment of the recommendations we have submitted would in fact allow Metro to get on with its plan while being fair to the customers of Ontario Hydro. Those are our submissions.

The Chair: Thank you very much, both for your oral presentation and the longer one which you've left with the committee and also for your recommendations. We have some questions. We'll begin with Mr Elston.

Mr Murray J. Elston (Bruce): I have an interesting connection with Hydro because there is an MVA in Bruce county at the moment in which of course the local folks would like to be assured they had the same sort of fairness in terms of the dealings there as is obviously being considered in this context. I know some of the discussions that have occurred in the county. I also know about some of the issues around cost cutting and the issue of pass-through.

What I am concerned about in this relation is whether or not you've received any assurances at all from your acting chair, who is also Deputy Minister of Energy, that there are some discussions inside government to ensure that the effect of this tax increase, or prospective tax increase, will be dealt with fairly from the provincial interest and whether or not you've received any instructions or directions in that regard from Mr Davies.

Mr Smith: I think Mr Davies is carefully walking the line between his role as an acting chair and a deputy minister. So I have not received any advice from Mr Davies as to any government intentions on this bill.

Mr Elston: Yet this is a prospective increase in the cost to Hydro which is parallel that of the transfer of $65 million or at least almost equal to the $65 million that went to the northern heritage fund with respect to Elliot Lake. It also represents about half the cost of the settlement that went into the Kapuskasing matter.

As acting chair, this has a very huge potential, and in fact will affect the customers and perhaps affect the potential of rehab and maintenance work which has to be scheduled for some of the plants in which I have a direct interest. I want to declare that very up front here. These extra costs are going to get passed on and in fact probably drain away from maintenance activities, or potentially can drain away from the maintenance activities, that this corporation has to undertake to ensure low-cost power.

I think, from my point of view, it has to be made clear that is a significant effect on the institution, Hydro, and its mandate to produce power at cost, and in these very tough competitive times is maybe more devastating than any of the people who have considered this issue so far have considered at all.

I guess I have to ask the question now. I don't want to ask you to agree with that, because that would put you in an unfair position, but what effect, if any, do you foresee the $60-million potential cost having on the operations, both in terms of maintenance and rehab of physical plant and of continuing maintenance of your power cost production figures?

Mr Smith: It would be a complicated process. I think I tried to say that we obviously, because of the competitive situation and the size of our recent rate increases, will be compelled to try and buffer the impact of this cost change now in rates. However, it will get built in eventually because it is a new cost. Our challenge would be to try and keep costs under control while not having any critical services affected. But in the end we have two choices: We'll either have to cut the costs, which would make some impact on programs we currently have, or we'll have to pass the costs along in rates.

Mr Turnbull: Do you have any estimate as to what kind of increase to industry the cost of power would be as a result of this?

Mr Smith: In terms of a rate increase --

Mr Turnbull: Expressed maybe as a percentage.

Mr Smith: Yes, that's what I was going to do. The problem is that our revenue base is so large that it sounds trivial when you express it as a percentage. It's in the neighbourhood of 1%; somewhat under 1% plus tax.

Mr Turnbull: Do I understand you correctly that would be 1% spread right across the province?

Mr Smith: Yes, that's correct.

Mr Turnbull: I believe one of the great problems that we're having today is that while we used to enjoy a significant advantage in power costs to attract industry, we now have crept up to not having that same advantage today, so 1% is a significant increase.

Mr Smith: Yes, it's significant, particularly to customers where electricity is a large part of their bill, which is the industrial sector.

Mr Turnbull: Right, quite so. In respect to services, I know that with respect to the rail rights of way, they don't really receive any municipal services. In fact the example of the accident in Mississauga was that the cost of fire service and police service was actually charged back to the railway. Do you, for your rights of way, receive any municipal services at all?

Mr Smith: I would say virtually none, but I could defer to my expert.

Mr Sam Roberts: That's a good answer. Practically no service is required for our right-of-way properties.

Mr Turnbull: Notwithstanding the fact that you're getting no services, you are paying based upon the average of the adjacent property values.

Mr Smith: That's correct.

Mr Turnbull: Okay. There was something I didn't quite understand in your presentation. I thought you said that the increases do not reflect from actual reassessment.

Mr Smith: Yes. I guess my point is that the right-of-way lands of Ontario Hydro have never been assessed for market value.

Mr Turnbull: I see.

Mr Smith: The assumption is that it relates somehow to the value of the properties next to it. So while in fact all the properties in Metro have been reassessed in order to go to the new plan, our rights of way have not been assessed at all and never have been, yet we will see, particularly without capping, an increase of four or five times the tax rate.


Mr Turnbull: Up until 1990 there was a special category that the rail rights of way were put into. That was cancelled. Did you have any such category? You've always been subject to this adjacent land --

Mr Smith: Since 1952, I believe.

Mr Roberts: Yes.

Mr Turnbull: Since the present assessment systems came in. Okay. Thank you very much.

The Chair: Thank you once again for your presentation. We appreciate you coming this morning.

Ms Poole: Mr Chair, just before the witnesses go, I had a point of clarification of a technical matter. I was just looking at section 241.14 of Bill 94, which is, I believe, the section that would have to be amended to address your problem, and it says, "`excluded unit' means a unit which is vacant land, a railway right of way or a pipeline or a unit in respect of which an area municipality is eligible to receive a payment in lieu of taxes."

When they talk about rights of way, they specifically say a railway right of way, so I presume your problem would be in reference to the unit in respect of which an area municipality is eligible to receive a payment in lieu of taxes. Is that correct?

Mr Roberts: Yes.

Mr Smith: That's correct.

Ms Poole: Then would this not only be the transportation corridors you talked about in the rights of way, but also, for instance, the Hydro building down on University?

Mr Smith: Yes.

Mr Roberts: Yes.

Ms Poole: So all Hydro properties would not be subject to the cap?

Mr Roberts: Exactly.

Mr Smith: That's correct.

Ms Poole: Okay. So you would need that whole thing eliminated in order to get your relief?

Mr Smith: Yes.

Ms Poole: Okay. Thank you.

The Chair: Thank you for that clarification and, again, thank you for coming before the committee.

Mr Smith: Thank you.

The Chair: Let me first ask, is Bob McMullen here?


The Chair: We have one last witness here who was to have been part of the Upper Yonge Village presentation and I'm going to allow her to come forward and add her remarks, if she would do so and if she would be good enough to introduce herself.

Mrs Fotini Yaroshuk: Yes.

The Chair: This will be the last presentation before the lunch break.

Mrs Yaroshuk: Thank you. My name is Fotini Yaroshuk. I'm a merchant at Yonge and Eglinton. I have no notes to address you. I'd like to speak to you from the heart.

I'm not your average retailer. I occupy 1,200 square feet at Yonge and Eglinton. I'm not a retailer who walks into my store in the morning and open the doors for customers to come in. I work at night. I promote my business. I do fashion shows for fund-raisers. I do my own buying. I do my own shipping. I do my own supervision and management and I cannot cope with a 10% increase. It's impossible, physically and financially. I used to have four people working for me, plus myself. Now I'm down to one person and myself.

Is it possible for you to take care of my people joining the already long lineup of unemployment and welfare or is it best to scrap this 10% and go back to your desks and reassess this market value assessment more responsibly? I don't object to paying the tax. I'm a law-abiding citizen, but I want a fair tax at a fair time.

Prior to this, we woke up one morning faced with the news that we'll have a 400% increase in taxes. When we broke the news to the rest of the community, as Dianne pointed out, we papered up our windows. We would get calls from Bloor Street, from the Danforth and they said: "Poor you, we're sorry for you that you are faced with this tax increase. It does not affect us." People were misinformed. Your group of people tried to push this tax so fast and so quickly, there was no notice given to anyone. That is unfair. That is not democracy.

I listened to the gentleman previously speaking from Scarborough. He says this is fair and he thinks they are paying too much in taxes. Well, this is not true. I live in Scarborough. I have a beautiful home on the ravine by the lake and I pay $3,000 taxes a year. Now the same quality of home in the city will be paying $10,600. I've done my research.

I lease a building on Yonge Street from where I run my business. That particular building was bought in 1986 for $735,000. It was assessed in 1988 for $1.4 million. Where's the justice? Where's the value in today's market? There is an apartment on the second floor of the building that is unfinished and has been assessed $6,000 a year in taxes. If I were to lease that unfinished apartment, I would only bring in $6,000 in rent, if I were lucky. Where is the fairness? Where is the justice?

I also have a business in Scarborough where I pay taxes of $1,800 a year, and with the new system it's going to go down to $1,200. In Toronto my taxes are going to go from $4,000 a year to $12,000, and my Scarborough store brings me more money than my Yonge and Eglinton store. That's where the problem comes. People feel that if you retail in the city, you are picking money off the streets. I'm telling you, it's a tough go. It's not easy.

I do find this totally unfair. I'd like to see people to go back to their desks and do a fair study and run it as a business, not as a hobby boutique. You cannot run this tax system the way it is. I used to have a staff of 16 two years ago. Now I'm down to a staff of eight. If this goes through, I'm not going to be a tax collector for anybody. I'm going to close my stores. It doesn't pay for me to work so many hours a day to have to pay the taxes in these tough economic times, and if I'm lucky.

My conclusion to this matter is that we're law-abiding citizens. We're hardworking. We do not object to a tax -- don't get us wrong -- but we'd like you to go back and do a precise, fair study and give us a fair tax at a fair time. This is an unfair tax at unfair times.

The Chair: Thank you. I think there's just one question, if I might. Mr Owens.

Mr Owens: It's okay.

The Chair: Thank you very much. Oh, I'm sorry. Ms Poole. Could we just keep it brief? We are running quite a bit behind.

Ms Poole: I'll keep it very brief.

Thank you for coming. You raised a point which has not been raised yet in the hearings. I'm getting a lot of calls in my office from people who have businesses in the area who say: "We live in the suburbs and I'm getting a decrease in my taxes in the suburbs," a decrease of $50 or $100. "I'm not unfairly taxed out there, but this tax on my city business is going to put me out of business. Please keep your decrease but don't give us this increase." I think you've really illustrated that very well, so thank you.

Mrs Yaroshuk: Thank you.

Mr Turnbull: Excuse me. Just one question. I think you raise a very, very important point, the fact that the apartment above your store will be paying more taxes than your house in Scarborough on a ravine. Could you possibly send a letter to this committee just documenting that? That would be very useful to us.

Mrs Yaroshuk: Not only can I send you a letter; I can take pictures to show that the apartment is unfinished. I wanted that apartment for an office. I was hoping my business would increase. I was hoping I'll employ more people and get them off your rolls for paying unemployment insurance, but I haven't had the money. So not only can I send you a letter; I can send you pictures to see how disastrous it is.

I'd like to know what criteria the assessor used to evaluate that property so highly. It's beyond perception. What you've done, people who are supporting this, is fantasy. It's not reality. You have to live on another planet to come here and propose these taxes. To wake up and see an increase in my Yonge Street store in taxes to $43,000 -- impossible.

Mr Turnbull: Thank you.

Mrs Yaroshuk: Fair tax. I want to pay a tax. I want to employ more people. I want fair tax, fair time. I'd like to see this scrapped. Go back to your desks and reassess it.

Mr Turnbull: Thank you very much.

Mrs Yaroshuk: I thank you.

The Chair: Thank you for your submission. If I could just say to the members of the committee, it is 12:20. We are scheduled to begin at 1 o'clock. I will make an executive decision that we'll begin again at 1:15. I just think it's important for people to have a bit of a break. So if we could, try to be back here at 1:15 sharp, because we do have a full afternoon.

The committee stands adjourned until 1:15.

The committee recessed at 1220.


The committee resumed at 1323.


The Chair: I call the afternoon session of the standing committee on social development to order. We're meeting to discuss Bill 94, the Metropolitan Toronto Reassessment Statute Law Amendment Act, 1992. This afternoon we have a number of witnesses from the various councils. We're pleased to have as the first witness Kay Gardner. Welcome to the committee. Have some water.

Ms Kay Gardner: Yes. As a matter of fact, I have a sore throat, so if I take a breath and swallow some water once in a while, I hope you'll be patient with me.

The Chair: Fine. We have a copy of your submission, so please go ahead. I would just remind you that if you would like to have some questions, leave a little bit of time at the end.

Ms Gardner: I've made a few minor changes in the copy that you have, but I'm sure it will be more or less the same.

Mr Chairman and members of the committee, I'm here today to make an 11th-hour appeal to your good sense and your high regard for the future of the city of Toronto. I'm here to urge your committee to advise the government to reverse its position and to abandon Bill 94.

I appeal to the government, through your committee, to kill Metro's outrageous MVA tax scheme before it rips the very heart out of the city of Toronto, the economic force of the Metro community.

I am here to appeal to you on behalf of the 5,000 tenants in my ward who, if Bill 94 is enacted, will be forced to pay rent increases they cannot afford to pay, rent increases that cannot be justified on any grounds whatsoever.

I am here to appeal to you on behalf of the almost 9,000 home owners in my ward who, for no good reason at all, will be forced to pay tax increases they cannot afford and for which they will get nothing in return -- nothing at all.

I am here to appeal to you on behalf of the 950 merchants in my ward who will be forced to pay even greater MVA tax increases than home owners and tenants; again, tax increases that will be unfair, unnecessary and unjustified. Already struggling to survive the recession, many of these small businesses will be forced into bankruptcy. Not only the owners, but their employees too, will lose their livelihoods.

No one, not even Mr Mazankowski, can collect taxes from people who have no income. Let us remember that it is ordinary people who are going to pay the price of MVA. It is they who will pay the $46-million tax increase to be imposed upon Toronto.

Here is a note I received from one of my elderly constituents: "I have lived in this house for 50 years almost and I'm 95 years old. It is my hope that I may spend the future years here. Should there be a new property tax plan, it would force me to give up my house." This man is among those who will pay the full 10% MVA tax increase on top of the mill rate increase that is inevitable.

Now, of course, Metro keeps telling us that this is not a tax increase, just a tax shift. I'm sure my elderly constituent will be relieved to know that his tax increase is not really a tax increase but only a tax shift. This reminds me of Mackenzie King who, were he the Metro chairman today, would undoubtedly say, "A tax increase if necessary, but not necessarily a tax increase."

Of course, it is not only the elderly home owners who will suffer hardship but many, many others.

A word about tenants: They are the hidden taxpayers. Even some tenants are not aware that they pay the property tax, because it is hidden in their rent. They do not even receive a yearly assessment notice. Few of them could tell you how much they pay in taxes. Indeed, tenants pay taxes at a far higher rate than do owners of single-family homes. The taxes on a rental apartment are paid at a rate that is 250% higher than the rate of a single-family home.

The present government has always posed as the tenants' best friend, but if it endorses Metro's plan it will impose rent increases on 117,000 tenants in Metropolitan Toronto. Remember, these MVA tax increases of as much as 10% will be on top of the usual mill rate increases and on top of the 4.9% automatic rent increase facing every tenant in 1993 -- increase on increase on increase.

No wonder an elderly woman who lives in my ward, who has seen rent skyrocket from $675 a month to $1,200 a month over seven years, has said to me: "I have lived too long. How can I go on paying and paying higher and higher rents? I am at my wit's end."

Home owners and tenants have been betrayed by Metro. For years, Metro constantly assured them they would pay no MVA tax increase for the first five years. They were also told that those entitled to the MVA decreases could get them in full from the very beginning. That promise has been broken too and the decreases to home owners and tenants are to be cut in half. But the sun will stand still, hell will freeze over and the Maple Leafs will win five Stanley Cups before a single tenant will see a penny of the rent reduction due to him or her.

Does the government not realize that by endorsing Metro's tax plan, it is actually increasing the cost of shelter for both home owners and tenants in the midst of a housing crisis and a recession?

A word or two about small business: How is it that any responsible politician could impose an extra 25% tax increase on small businesses at this time when so many are closing their doors? I really don't understand that.

A woman, who with her husband operates a mom-and-pop store on Eglinton Avenue West in my ward where I shop every Saturday, recently said to me: "Kay, we are just barely getting by. We work long hours, six days a week and make what amounts to just one living wage. If MVA goes through, we'll eventually have to close the door."

It is wicked to risk people's jobs in times like these, absolutely wicked.


I appeal to the committee to realize that there is a crisis in the making, a crisis that the government can and should stop in its tracks. I appeal to you, Mr Chairman, on behalf of thousands of home owners and tenants and merchants that I represent, to advise Premier Rae to consider the human consequences of Metro's unfair scheme, to realize the hardship it'll impose on home owners and tenants and on those who own small businesses. We cannot do this to the people we represent, people who are already frightened to death by the consequences of this recession.

The Chair: Thank you very much, Councillor Gardner. We'll move right to questioning.

Mr George Mammoliti (Yorkview): Very dramatic as usual, Ms Gardner, and I want to thank you for coming down, and more specifically thank you for talking about the tenants. That's the line of questioning I want to take the opportunity to ask you about. In terms of tenants and tenant increases, you mentioned that 117 --

Ms Gardner: Yes, 117,000 in Metropolitan Toronto.

Mr Mammoliti: You didn't mention, however, that 200,000 of the 350,000 units in Metro will receive a decrease. That's something you neglected to mention in terms of rental units. The other thing is, you know that recently the government passed some provisions that would protect tenants from further increases. Landlords, after applying, can only increase rent 3% at a maximum. I'm sure that after all this is over, some landlords will decide to apply for extraordinary costs. But even if they do, in your opinion, how much of those rents will be increased and by how much?

Ms Gardner: I'm glad you asked me that question, because you suggest that I neglected to mention the number who will get a decrease. I have discussed this with our economic committee at city hall about tenant decreases and I'm told that it would cost Metro $6 million to put in a system to offer decreases to the tenants, which neither government is willing to pick up at the moment. So it just looks like the tenants will get the short stick all the time.

I have been a tenant for 31 years and I have worked as a tenant organizer for 17 years. I have never seen one tenant yet get a decrease from any government or any landlord, so I'm waiting. I still have a few years left in my life. I'm still waiting and hopeful that I will see this miracle happen.

Mr Mammoliti: Is my time finished?

The Chair: You can have a short supplementary.

Mr Mammoliti: My supplementary would be that we share the same concerns and I hope it doesn't take five Stanley Cups before tenants receive a decrease. I'm hoping that our government will be the government that will determine that. I'll be a little disappointed if we're not. I'll be quite honest with you.

Ms Gardner: I'm afraid you'll be disappointed for a long time.

Mr Mammoliti: I guess the supplementary then is, give me an average in terms of, if landlords decide to take advantage of the extraordinary cost provision in the legislation, what would be the average increase for those 117,000 tenants? What's the average increase for them, in your opinion? I broke it down, and my average is 1%.

Ms Gardner: A landlord is allowed to charge 4.9% for 1993. He can also ask for an additional 3% on top of that for renovations and extraordinary costs. Depending on what the taxes were for 1992, he could possibly get another 2% on top of that. I don't really know.

Mr Mammoliti: No, not in my opinion.

Ms Gardner: Well, that's only your opinion.

The Chair: If I might, we have a difference of opinion here, and because of time I'm going to have to move on to Ms Poole.

Ms Poole: Welcome to our committee, Kay. I'd like to follow up on the question about whether tenants will be protected under Bill 94. One of the claims made by the government during the Rent Control Act was that it was going to put in a provision so rent decreases could automatically be passed through to tenants if there was a reassessment. Well, lo and behold, what Bill 94 does is delete section 113 of the Rent Control Act and put in a new section.

This comes back to the problem you were talking about with the battle between Metro and the province as to who's going to pay for it. This NDP government that says it protects tenants has put in a section which says, "the council may file a resolution with the [rent] registrar requesting a decrease in the maximum rent in the affected rental units"; in other words, it would automatically happen and the registrar would notify the tenants. But this is the catch: "However, a resolution may not be filed by the municipal council until an agreement has been entered into with the province." Then you look to see what you have to do to enter into this agreement, and it says that the municipality has to make an agreement with the province as to the costs that will be paid by the municipality.

What is happening is that this NDP government, which claims to protect tenants, is now saying to Metro: "You pay for it. You pay the $6 million, or we're not going to allow the automatic decreases to tenants." Is that your understanding of this situation?

Ms Gardner: That's my understanding. That's what I've been told, yes.

Ms Poole: I concur. I think that's absolutely despicable, to slide that in and then imply that they are going to help tenants.

Ms Gardner: Yes. That seems correct.

Mr Chris Stockwell (Etobicoke West): Over the years, having sat on council with Councillor Gardner, I learned long ago, through speeches and questions, that we have a fundamental disagreement on market value assessment. Likely, it's better if I simply say thank you for coming and I appreciate your comments.

Ms Gardner: Thank you very much. Nice to see you again.

The Chair: I hope that last exchange is indicative of the harmony which will reign in the committee this afternoon. Thank you very much for coming this afternoon.

Ms Gardner: Thank you, Mr Chairman.


The Chair: I call our next witness, Mr Rob Maxwell. Welcome to the committee. We have your submission, Mr Maxwell, if the clerk will pass it out. Please go ahead.

Mr Rob Maxwell: I have to say I never thought I would see Chris Stockwell mellowing.

My comments will be quite brief. Thank you for having me here today. I think you have probably heard most of the arguments that can possibly be made both in favour and against this proposal, so I'll try not to repeat them. What I want to talk about specifically is my own particular constituency and why the people, the residents and businesses, are so very strongly opposed to market value assessment in my ward.

I represent ward 11, which is in the west end of the city of Toronto. My ward overlaps with parts of the provincial ridings of Dovercourt and High Park. The west end of the city has traditionally been an immigrant settlement area, and my ward is no different from other west end wards in that respect. My constituency is home to a large number of new Canadians. Most of them make their living in jobs in the construction, manufacturing and service sectors. Although the median income in my ward is substantially lower than the rest of the city and Metro, there is a higher than average rate of home ownership.

We also have in my ward what I believe to be a very unique balance of residential, commercial and industrial uses, and while each of these areas is suffering in the current recession, they are hanging in, and I hope will be still in place when the recession ends.

One example is the American-Standard plant. It's located in my ward, at the corner of Dupont Street and Lansdowne Avenue. It employs several hundred people, many of whom live in the neighbourhood. Recently, the company decided to relocate its distribution facilities from Etobicoke back into the city. Its neighbouring plant, which manufactures electrical lighting equipment, has also recently expanded its operations, and just to the south of there, the Rowntree Mackintosh plant reversed a decision it had made a couple of years back to move to Belleville, I believe it was, and instead has reinvested significant amounts of capital in its existing plant.


My ward is also home to six business improvement areas that I believe many of you are familiar with, and that's more than any other ward in Toronto. The merchants who run these small and medium-sized businesses provide both goods and services and a wide range of employment opportunities for people in Toronto. They work long hours and are traditionally very independent-minded. For them to come together as part of a protest movement is quite extraordinary, but that is exactly what has happened on this issue. What was once a relatively quiet group of people has closed down several main streets in Toronto over the past few months and has become a very potent political force that has to be dealt with.

These main streets where the merchants do business are a very fundamental feature of the success of Toronto as a city. They are places where people meet, eat and drink, shop, exchange information and all the other things that cities are about. They are very vital lifelines which connect one part of the city to the next. In a sense they're canaries in a coalmine in urban life: They act as an indicator of how things are going both socially and economically in cities, and as our main streets go, so go the neighbourhoods that surround them.

You cannot make significant changes which upset that balance that exists between those three uses -- residential, industrial and commercial -- in communities such as mine without affecting each of the other parts of the equation. Despite the fact that we have been able to convince Metro to amend its original plan so that commercial increases will be capped, this MVA scheme will do very serious damage to the commercial side of the urban triangle.

As our Mayor Rowlands explained to you earlier this week, thousands of small businesses in Metro will experience approximately a 30% tax increase by January 1994, 10% in each of the two years because of market value assessment and about 5% per year in mill rate hikes. In fact, the increase will be felt by those businesses within about a seven-month period, because the 1993 MVA increases will not be put into effect until the final tax bills go out in May.

I'd like to urge members of this committee, and I would invite you, to come to my ward to see neighbourhoods like the Bloor-Lansdowne area, which has been subjected to enormous problems in the past few years. We are at risk of experiencing the kind of urban blight that plagues so many other North American cities. That would have been inconceivable not too many years ago, but today it's a very real threat.

I'd like to close by making two comments. The first is that the city of Toronto feels the same way about this MVA proposal as the province feels about being left out of the federal government's recent capital spending announcements. If you can try to understand the city of Toronto's reaction to this issue from that mindset, I think that would give you some insight into the issue.

It's unfortunate there are no government members here.

Mr Stockwell: Gord Mills is.

Mr Maxwell: Oh, my apologies. I thought they were all lined up on that side.

The second comment is that the argument that the province has to keep its hands off Metro's scheme is simply an untenable position. If you carried the minister's argument to its logical conclusion, you would have to abolish the OMB, you would have included municipalities in recent constitutional debates and I think ultimately you would have to respect the city of Toronto's request to be allowed to secede from Metro. The fact of the matter is that the provincial government has both the right and the responsibility to review Metro's request and to amend it as it sees fit, and I hope you will do so.

The Chair: Thank you very much. I'm almost tempted by the idea of abolishing the OMB. No, I shouldn't say that. I'm impartial and in the chair. Ms Poole.

Ms Poole: If my very own Metro councillor wasn't sitting in the room, I might say something about abolishing Metro, but I don't want to say that in front of my friend.

Mr Maxwell: If I can clarify, I wasn't arguing that we should do any of those things. I'm merely saying that if you extend the logic that is presented by the government on this matter --

The Chair: The Chair's tongue got caught in his cheek. I apologize for that.

Ms Poole: Actually, that is the point I want to address. The government has said it does not have a responsibility in this regard, that it automatically has to give Metro the enabling legislation. It's a very Pontius Pilate attitude: "I'm going to wash my hands of it."

It would seem to me, to carry your analogy a step further, that if the provincial government truly believes that municipalities should have this type of autonomy, when the city of Toronto made a request that the Toronto Atmospheric Fund bill be passed and passed quickly -- and all this bill would do is allow the city of Toronto to set up a fund and a joint venture with private companies to do environmental initiatives having to do with the atmosphere; a very laudable aim -- then instead of putting roadblocks in the way, the provincial government should have said: "Yes, the city of Toronto is an autonomous municipality, a municipality of 635,000 people. We respect your right to make your own decisions. Therefore, you've asked for this legislation; it's yours."

Is that your understanding of how it should work under the new rules of the game, if these are the new rules of the game?

Mr Maxwell: Yes. The point I was trying to make is that you either have to adopt a hands-off attitude and say you're going to respect all the decisions and requests of municipalities, or you don't. The act permits the provincial government to adopt requests for what used to be section 63 updates; I think it's section 64 now.

Ms Poole: Section 58. Just so you know -- this is very important; you don't want to mistake this -- apparently, I've been told, the new section 63 is full market value, which really confuses everybody.

Mr Maxwell: The point being, however, that the municipality makes the request, and the government then has an option, the government has a choice. As you said, they can't wash their hands and say, "We're not involved in this decision." They very clearly are.

Metro's proposal is unlike any reassessment proposal that has ever been put before any government in this province. I don't have the bill before me, but it's very many pages of legislative amendments that are being required to be made.

Ms Poole: There are two other short questions.

The Chair: Did you say one other short question?

Ms Poole: I'm sure I did. If you want me to say one other short question --

The Chair: It might have two parts.

Ms Poole: My other short question with potentially as many as two parts: You've made a couple of statements in your brief and in your remarks right now. One is that you have called this throughout an MVA proposal. Yet the minister and the parliamentary assistant have said very clearly -- and in fact it's on Hansard, the words of the parliamentary assistant -- "This is not an MVA plan." I just wondered if you'd explain that and also -- see what you did, Mr Chair? I forgot my part 2. I guess that's my question until I think of part 2.

Mr Maxwell: You can think of part 2 while I'm trying to respond to part 1. Run it by me again; sorry, I'm trying to think of my answer to the question.

Ms Poole: Both the minister and the parliamentary assistant are saying this is not an MVA plan.

Mr Maxwell: Yes, okay. The request is being dealt with under the Assessment Act, as I understand it. It's been difficult in some ways to deal with this from, in a sense, an opposition viewpoint, because certain members of Metro council call this a market value assessment plan; others call it an interim assessment plan. It's whatever the speaker at the time chooses to characterize it as. But I think legislatively it is being treated and dealt with under the provisions of the Assessment Act. That's my understanding of how it is being dealt with.

And clearly the data that are being used to implement this, even if we are not going to full MVA in certain classes of property -- although we are going to full MVA in one -- are MVA data, a 1988 update that was conducted by the Ministry of Revenue.

Ms Poole: So it is an MVA plan. The other part of my one question was that you made the comment that they're giving Metro power for a plan that is unlike anything else that's ever been done in the province. The government is arguing to the contrary, and the minister's been quoted on numerous occasions as saying, "We're just giving Metro the same power every other municipality has." Could you comment on that?

Mr Maxwell: Well, that's not my understanding, Ms Poole. My understanding is that in virtually every other municipality that has requested some kind of market value assessment update, it has been straightforward, under either the old section 63 or the old section 70, or whatever the section numbers are.

There have been a couple of very minor exceptions, one being Ottawa-Carleton. I understand there were some very minor changes allowed. But to do a reassessment of this nature where you have one category being allowed to go to 100% market value and other categories going to various other levels of market value assessment has, in my understanding, not been done in this province before.


Mr Mills: Mr Maxwell, thank you very much for coming here this afternoon. On behalf of the government members, I extend that feeling.

You've identified the problem of a tax shift on tenants, on owners of singles and on small business. In tax reforms, there are going to be shifts to correct historical unfairness. To me, that begs the question, in your opinion, of who should bear the burden of the shifts.

Mr Maxwell: I think that begs the fundamental question. You used the term "fair." I think we have to try to define what fair taxation is. This government has, to the very loud applause of many of us, established a Fair Tax Commission to answer questions like that. It is our understanding that the report of the Property Tax Working Group of the Fair Tax Commission is about to be released. I think it would not have been unreasonable to defer a decision on Metro's proposal and review it in the context of what your government's Fair Tax Commission is going to come forward with.

My understanding is that Metro in fact asked for comment from the Fair Tax Commission on its proposal. The Fair Tax Commission was very critical of the kinds of proposals that Metro was to do, among them having varying caps on different categories of property.

Two things: If Metro has asked the question, I think it has to listen to the answer to the question it asked, and if the government has established a commission to deal with the very issues that have been dealt with in the past week in this room, it is incumbent on it to listen to the advice the commission will be bringing forward.

The timing is such that there would not be any need to delay the implementation of Metro's plan should it be judged, at the end of the day, to be a sound plan. In fact Metro's plan will not hit the streets -- if I can use that expression, as I made in comments in my notes -- until May, although it needs to be passed as of January 1. For tax bill purposes, at least in the city of Toronto, people will not feel it until the final tax bill. We cannot do the kinds of things we have to do with our computer systems etc to have the system up and running.

I think that affords us an opportunity to have some discussion of the broader issue of what is a fair tax. One thing that just about anyone can agree with is that property taxes are not particularly fair taxes, and I think we have to challenge the wisdom of basing municipal revenues primarily on property taxation.

Mr Stockwell: Obviously, I think you're not correct. That's no big secret.

Mr Maxwell: Not politically correct?

Mr Stockwell: No, you're politically correct. I'm sure you're politically correct.

But it begs the question, as you suggested to the question from Mr Mills: You've had 40-odd years to come up with a different system. At times in the mid-1980s I've been on council when we've begged you for that different system so we may analyse that different system. I sat on councils with the previous witness -- and not necessarily yourself but certainly other members from the city of Toronto; in fact you work for some of them -- and I begged them to come forward with a different system. It has just never taken place.

It seems to the constituents I represent that this "Let's wait for the Fair Tax Commission" is just another in a long line of deferrals for the sake of deferral. The question I put to you is, if the Fair Tax Commission comes out and says, "Yes, there's a lot of options, but the fairest process is market value assessment," is that going to change one vote of one person on your council?

Mr Maxwell: I can tell you about one vote on council and that's my vote. I think that basing taxation on the value of property is fundamentally wrong, particularly in a large urban market like Toronto's, like Metro's, and for a number of other reasons. But I think that there are many other ways of doing it.

You said that you asked when you were on Metro council for an alternative and it is not correct for you to say that there was not an alternative presented. The city of Toronto, along with the city of North York, spent a great deal of time roughing out the idea, and it was not, I will admit, a detailed plan, but roughing out the idea of what we called a unit assessment system.

Mr Stockwell: It wasn't supported by one of the authors. North York council in fact turned it down.

Mr Maxwell: It depends on which council you're talking about. At one time --

Mr Stockwell: The most recent council.

Mr Maxwell: Yes, the council of the day did support it, though, when the idea was proposed.

Mr Stockwell: Okay. Quickly --

Mr Maxwell: However, if I can, I'm not pretending for a moment that the unit assessment system is a definitive system. The city of Toronto requested the government of the day to provide us with data and with information that we could have used to flesh the idea out and we were not provided it.

Mr Stockwell: Quickly, one last one. Predominantly the Fair Tax Commission is made up of left-wing, social-leaning --

Mr Maxwell: Politically correct.

Mr Stockwell: -- politically correct people, yes.

Mr Maxwell: I don't know that. That's your opinion.

Mr Stockwell: No, I sat through it.

Mr Maxwell: I don't know who the members --

Mr Stockwell: I think even the most jaundiced of you would agree that they'd be less than right-wingers. Let's put it that way.

What if we get this report back and they say, "Look, we've looked at this and we've examined it six ways from Sunday," like the minimum capital corporate tax, and that was the plank of this government. They campaigned on it. Suddenly the Fair Tax Commission reported back and said: "Gee, you know all those years we've been saying these corporate bigwigs have been ripping us off? Well, it ain't true." What if they come back and say, "Gee, we looked at it and we can't find a better system"?

Can I then assume from that, since this is what the city of Toronto seems to be hanging its hat on now, waiting for the Fair Tax Commission to come back, that we can move forward and go ahead with this reassessment plan? Because I get the distinct impression that it's just another reason so we can defer this, so we can maintain the status quo.

Mr Maxwell: No. With respect, Mr Stockwell, that's not correct. It's certainly not my position. Other members of council would have to speak for themselves. I do not like the current assessment system in Toronto. I at one point in my life spent many, many weeks at the Assessment Review Board when the then Conservative government was attempting to implement what we called market value by the back door, which was assessors driving around town and if you had new windows put on your house your assessment went up 200%. So, no, I'm not happy with the status quo.

I've not argued that we would abide by any decision of the Fair Tax Commission. I'm saying that the Fair Tax Commission has been put together with a mandate to come forward with advice to the government and the government owes it to itself and to the people of the province to listen to the advice of the commission that it has established. We can't stop --

The Chair: I'm sorry, Mr Maxwell, I'm afraid we're really caught for time this afternoon with a long list of questioners. I think your position is clear and we appreciate your coming before the committee this afternoon.


The Chair: I call on the next witness, Michael Walker, please. Welcome to the committee, Mr Walker.

Mr Michael Walker: Thank you very much.

The Chair: Please go ahead when you're ready.

Mr Walker: Before I start, I'd like to invite you all -- Mr Stockwell and Mr Elston -- I'd like to invite all of you to a rally that the city's holding up here on market value assessment next Wednesday. You're all invited to come out to it. Let me give you a flyer.

Mr Stockwell: Thanks a lot, Michael.

Mr Walker: It's at high noon.

Mr Stockwell: I'll do my best.

Mr Walker: Mr Chair and members of the committee, it's an absolute truth to the already overburdened Canadian taxpayer that all politicians are cut from the identical cloth because every politician at every level of government emits exactly the same heartfelt cry of "Jobs, jobs and jobs," while actually doing nothing but tax more, tax more and tax more.

Why is it that every government elected by we the people can never grasp what really has to be done, and that is spend less, spend less and spend less? It doesn't take even a primary school education to know that if you spend more than you earn, you'll end up buried in debt. So it is with this mendacious conjuring trick called market value assessment.

Let's cut straight to the heart of the matter. Who is it good for, who is it bad for and what's the point? The first answer: It's a terrific idea for a bumbling, overgrown dinosaur of a Metro government, munching its lustful way across what it sees as a property and tax-rich Toronto. The second answer: It's an insane and reprehensible scheme to squeeze millions of additional tax dollars from small businesses, home owners and tenants who are desperately struggling to survive the most devastating economic depression since the 1930s. The third answer: The point is, nobody seems to know what the point is.


In the next couple of minutes, I'll attempt to bring it all down to a singular, sharp focus. No one needs to lecture an inept and befuddled provincial government on the terrifying effects of pie-in-the-sky social engineering, but if the groaning taxpayers could speak directly to Premier Rae, they would vigorously agree that he who pays the piper calls the tune. If those same taxpayers could reach out to touch the cloaks of the despotic political dinosaurs at Metro government, then their grim-faced message would be, "We know your names, we know your faces, and on election day, we know where you live."

As to the final question, what's behind all this market value assessment lunacy, I can only tell you what I have learned since 1986 when I, along with Councillor Kay Gardner, led the fight against it here in the city of Toronto.

Yes, Toronto is the jewel in the Metro government crown, providing $60 billion a year of economic muscle which guarantees the solid foundations of our entire Metro lifestyle. Yes, the nearly 700,000 population of Toronto delivers hundreds of millions in tax dollars which are spread all over Metro to pay everybody else's school costs, as one example. And yes, I am not the only one who thinks Metro government is completely out of its mind with this proposed market value assessment tax heist.

Jane Jacobs, the most revered and respected urban planner in North America, who chose, by the way, to live in Toronto, calls market value assessment a "nutty idea." She also describes the Metro bureaucrats who came up with the scheme as "incompetent, ignorant and foolish." She could easily have included their political masters in that absolutely accurate definition as well.

Even Canada's national newspaper, the Globe and Mail, portrays market value assessment as "dumb and destructive," and equally, both as mad and irresponsible "as was the Spadina Expressway scheme of the 1970s."

The challenge I throw to the NDP government of Ontario is this: Are those the attributes you wish to have alongside your names in the history books when they describe the direction of urban government in the Ontario of the 1990s? I would think not and I would hope not. Thank you very much.

The Chair: Thank you very much, Mr Walker, for your presentation. A quick reflective thought from Mr Stockwell.

Mr Stockwell: I don't mind hearing deputations that are reasonable and factually sound. I think Kay Gardner, the previous deputant, was fairminded and she offered her opinion. I say the same about Mr Maxwell. This belongs in the garbage. It's based on unfactual documentation. I can fully understand why Mr Walker takes this position, but to pass this off as a deputation is insulting to both his constituents and the people of the province of Ontario.

Mr Walker: I don't agree with you at all.

Mr Stockwell: I'm not surprised.

Mr Walker: You've blindsided the issue, and it's that blindsidedness and that lack of response which Jane Jacobs summed up.

Mr Stockwell: Despotic, sir. That's beneath even you, and not much is beneath you.

Mr Walker: That's my opinion.

The Chair: Order, please. We have a difference of opinion here and I think we just accept that. Ms Poole, did you have a short question?

Ms Poole: Now for a friendly question. Mr Walker, you've been fighting against market value for many years and you're very aware of the facts behind this. Yesterday, we had a presenter from Scarborough who held up the city of Toronto's full-page ads and called them lies; for instance, the one on tenants that said 117,000 tenants would get hit with increases because of market value.

Mr Walker: Yes.

Ms Poole: My experience with the city of Toronto is that the information it has provided has always been truthful and accurate. I'm not talking just about this particular thing, but I'm talking about whatever I've asked them for. Have you received complaints that these ads are misleading? For instance, can you set the record straight on the one on tenants?

Mr Walker: The record is that the city, after demanding it through the freedom of information act because it was refused by Metro, is the only municipality that got all the facts. It's difficult to make decisions without the facts. The other municipalities in Metro were making decisions without the facts and denying it to their Metro councillors. We do have the facts, we analysed them and they speak for themselves.

Over 117,000 tenants will be getting increases up to 10%: 5% and 5% in the next two years. The landlords will be getting it and they have the vehicle for passing it on to the tenants now. Over 74,000 of those tenants will be getting increases to the full 10%. Some of those have remaining increases over and above that, but there's a cap.

I say to you that those are the facts. They stand for themselves. They're the provincial government tapes that they provided to Metro, which Metro stonewalled over for over six weeks to the city of Toronto.


Mr Walker: Well, we were going to go to court if we had to. I stand by them 100%.

The Chair: Thank you very much for coming, for your presentation and for answering questions.


The Chair: I now call on Anne Johnston, please.

Ms Anne Johnston: I've brought Councillor Olivia Chow with me.

The Chair: Fine.

Ms Johnston: I'm going to speak, and we're both available then for questions. I'll do it as fast as I can.

The Chair: Double double.

Ms Johnston: Good.

Interjection: And trouble.

Ms Johnston: We thought we could cover at least the NDP and the Liberals and Chris Stockwell.

Twenty years ago today, I was elected by a wave of public opinion to what became known as the reform council, because Torontonians did not like the way the city of Toronto was being run by city and Metro officials.

One of the big issues of the day was the Spadina Expressway. I was delighted when the Premier of the province stepped in and stopped it. I'm here today, 20 years later, to beseech you to intervene once again and stop MVA, which will have a far more devastating impact on my city than any of the old ogres of 20 years ago.

Never in my 20 years as a politician have I encountered such an outcry. In both of the public meetings that were held at Metro, people stayed up all night for their chance to speak. The humiliation they must have felt as they related their circumstances had to be experienced in order to appreciate how damaging this plan would be for the city of Toronto.

During and following these meetings, the plan changed considerably. In fact, it seemed to change weekly if not daily in response to the outcry from small businesses, the arts community, United Way agencies and other groups that were particularly damaged by the initial proposal. But it also changed as a result of numerous oversights and errors on the part of Metro staff, who in trying to meet the rigid deadlines for passage of the proposal, did not adequately verify their work.

What is truly incredible about this proposal is the haste with which it was advanced, and I might say, the haste with which you're considering it. In the space of less than two months after the tax impact of the assessment data had been compiled by staff, the final resolution was passed by council.

It might surprise you, but Metro Toronto has no idea what the MVA impact would be on our agencies, boards and commissions and the various departments under its jurisdiction. We're only now finding out that the impact on the beleaguered TTC would be an additional cost of $2.5 million. Staff elsewhere have not yet been asked to report out to council on the impact Metro-wide.


No economic impact study was done. In fact, the chairman and the CAO were completely taken by surprise by the fact that under this proposal small businesses would, in many cases, be hit by property tax increases in excess of 400%.

In my ward alone -- the two wards you've just heard from, wards 15 and 16 for the city -- over 2,000 business properties would be assessed with a tax increase, over half of which would be in excess of 100%. A survey of 351 stores on Yonge Street between Eglinton and Lawrence indicated that 40% of the existing jobs would be lost and over one third of the stores would be likely to close.

Metro made no attempt to inform people about what was happening to them except, I suspect, big business, whose previous concerns miraculously disappeared. This sudden change of fortune was characterized as the "big lie" last September by Chairman Tonks. But if it wasn't big business, then who wants to bear the change in tax burden?

I was shocked when I realized what the impact would be on small retail businesses. I met almost daily with business people who normally don't get involved and showed them the proposed tax rolls. I did not have to whip up their opposition; it was spontaneous combustion. Normally busy, working people were goaded into civil disobedience. The result was the demonstrations on Yonge Street, Eglinton, Bayview and elsewhere. Through their store windows, they informed the residential taxpayers about what was happening. They also were shocked.

The resulting caps of 10%, 10% and 5% on commercial increases are no more acceptable than the initial devastating blow. This is a slow death rather than a quick one. Coupled with the inevitable annual increases in the mill rate, the accelerated loss of assessment base due to store closures and the hidden costs of MVA in increased transit, hydro and parking costs, the new proposal is as destructive to retail merchants as the old one.

Mayor Trimmer, in her remarks, talked of the pending tax revolt among her Scarborough residents. On Tuesday, you heard from the Business Survivors Association, a recently organized group that has its origins in my ward. It would appear that the tax revolt is inevitable no matter what happens, a testament to the disastrous manner in which this issue has been handled by the MVA proponents.

I don't think the province should feel shy or coy about intervening in Metro Toronto affairs on this issue. The fact is that you do it all the time. Under the Municipal Act you have the authority to go in and take over from a municipality that's not operating effectively.

You mustn't lose sight of the fact that the city of Toronto is the heart of Metro and that Metro is the hub of the provincial economy. What's bad for the city of Toronto will have repercussions throughout the province. In my view, especially considering the NDP -- and I'm sad to see that so few of its members are here -- campaigned against MVA in the last election, the government has a moral obligation to intervene. You intervened in the preservation of the Toronto Islands community and you were right. You intervened in our solid waste management plan. We will see who was right, but the precedent is clear.

Market value assessment is a provincial responsibility. Metro's hands were tied in designing a fair taxation system because of the guidelines for market value assessment dictated by the province. It was repeatedly thrown in our faces that the legislation does not offer a unit value option and therefore that option was not explored more fully. Furthermore, the province did directly intervene in 1989 by requiring Metro to use 1988 as the base year for reassessment rather than 1984. Try explaining that little change to disaffected ratepayers.

Mr Cooke is reluctant to call this a market value plan. Make no mistake about it: The proponents of MVA want full MVA and see this as a step in that direction.

In Chairman Tonks's remarks to you on Monday, he indicated, "Metropolitan Toronto has proceeded very carefully to inch towards the implementation of a market based system." Mayor Trimmer very clearly stated she would "prefer to see market value in one fell swoop." Inching or swooping, they're going towards market value.

The proposal before you may not be a pure MVA system, but the time-of-sale provision for residential properties with one or two units would take this property class to full MVA at an alarming rate. It's also full MVA for vacant land, rail rights of ways, hydro corridors and properties paying grants in lieu of taxes.

The provision dealing with time of sale is particularly unfair given the base year of 1988 on which the proposed taxes are based. Proponents of MVA argue that the base year is irrelevant since taxes are based on relative, not absolute assessed values. This would be true if all properties went up and down according to the market at the same time. In this case, the evidence clearly shows otherwise.

I conducted a study of just under 100 properties which sold in the month of October in the cities of Etobicoke, Scarborough and Toronto and compared the resale value of the homes to their listed market value assessments. I'd like you to correct the brief here. It says all of the properties sold between -- it should say $150,000 to $300,000. That's an error.

My research, which is appended, shows that in the city of Toronto, and particularly my ward of North Toronto, the average property has declined some 34% when compared to its listed 1988 market value. In contrast, in the city of Etobicoke, properties only decreased by 13% and in the city of Scarborough by only 7%. I think they're in your ward; they're listed as addresses, Chris.

It would be grossly unfair to make a new home owner pay taxes using full market value based on the inflationary and speculative realty prices of 1988. At the very least, I would urge you to support an amendment not to allow Metro to pass a bylaw imposing the time-of-sale provision.

The plan before you today does not represent a compromise solution to property tax reform. It's a watered-down, half-baked scheme put forward by proponents to make it easier for them to implement. Every member of council representing a city of Toronto ward as well as those representing wards on the periphery of the city voted against the plan and every amendment that created it. The plan, in its current form, is no more acceptable now than it was in its initial form.

Mr Cooke has also now conceded that the plan makes a mockery of the assessment appeals process and effectively takes away the right to appeal one's property tax assessment.

Furthermore, the plan flies in the face of the strategic goals, planning objectives of Metro council as well as the GTA initiatives. I probably cannot quote. Am I getting close to my time? I have a few more minutes.

The Chair: Keep storming along.

Ms Johnston: Keep storming along. Shaping Growth in the GTA -- it's your coordinating committee -- says:

"Municipal taxation is an important lever at the disposal of municipalities. At the very least, municipal taxation must be made to be consistent with compact urban form, if not proactively supportive of it. At present, industrial and commercial property taxes in inner areas are high compared with peripheral areas. This has been an important form of force in peripherilization" -- a nice new word there -- "and the growth of low density, land consumptive development. Taxation policy must be supportive of compact urban form."

Likewise, Metro's draft official plan, The Livable Metropolis, at page 10 states:

"It is the policy of council:

"To support GTA initiatives that discourage the expansion of the urban envelope and thereby encourage the effective use of lands already committed to urban development; and

"To encourage future development to take place in an intensified urban form and at increasing densities."

I raise these concerns because it seems clear to those of us from the city of Toronto that one of the major problems associated with MVA is that it encourages urban sprawl at the expense of more dense developments. From the attached appendix, you can see that the city of Toronto has a population density of nearly three times that of the cities of Scarborough or Etobicoke. Toronto houses some 6,000 people per square kilometre compared to 2,300 and 2,500 persons respectively. At the very least, the planning implications of going to market value should have been reviewed.

It's also becoming increasingly clearer that one of the big losers in the MVA proposal before you are our agencies controlled by federal and provincial governments, and I won't quote all of that. It's written down and I think you've heard from most of them.

A property taxation must be easy to understand and it must be fair. Clearly, this mishmash of a plan is not easy to understand, but is it fair? Is it fair that 27% of the population pays 42% of Metro's property tax? Is it fair that the city of Toronto generates $315 million more in education dollars than it uses and must, under your rules, turn it over to support the other school boards? Is it fair that a city of Toronto retail store pays five and six times more property tax than a store of equal size in the city of Scarborough? It is fair that a downtown property with no driveway, a small backyard and a narrow property line pays so much more than a house twice the size in the suburbs?

The answer clearly to me seems to be no.


Let me leave you with the image that Jonathan Swift developed in Gulliver's Travels, a masterly satire of politics facing Whigs and Tories in England -- Britain, actually:

In the land called Laputa, Gulliver comes across rulers who live on an island that floats above their country. From that island, they promulgate laws and dispense justice based on rational principles, reasoned hypotheses, all of which are based on the science of the day -- probably a computer today. Unfortunately, they never come down off the island to see what the impact of their laws have been.

What Gulliver finds is a country in chaos. For instance, houses built in accordance with the building code keep falling down. The people subsequently revolt and cut off the power that sustains the island. It falls.

It's just not that difficult. As Gulliver says, "Providence never intended to make the management of public affairs a mystery, to be comprehended by only a few persons of sublime genius, of which there are seldom more than three born in an age."

Before it's too late, I urge you to defeat Bill 94.

The Chair: We should perhaps consider inviting Jonathan Swift before the committee.

Ms Johnston: Yes, we need him.

The Chair: That was an extensive brief. We have limited time, but if I could ask the members of the committee: one sharp question, and we'll start with sharp Mr Owens.

Mr Owens: Based on the deputations that I've listened to over the past week, including yours today, Ms Johnston, I find two things passing strange: first, that Mr Walker, the previous presenter, would have the nerve to make comments around an inept and befuddled government based on the kinds of antics that have taken place around this particular issue; and secondly, based on the concerns that have been raised especially about the railway rights of way, my question to you and to your Metro councillor colleagues is, how the hell did this bill get out of council? How did it end up here with the kinds of problems that have been so clearly articulated by the presenters?

Ms Johnston: With respect to Mr Walker, I make no apologies for Mr Walker. I find his comments intemperate myself. Second, it's my impression that when we were listening to deputations, people sometimes went in with their minds made up. They were perceived to be listening but they weren't hearing. I don't know how they could have done it because it was most affecting.

I certainly learned a tremendous amount -- I'm sure all of you will say the same thing -- about the problems that we couldn't even conceptualize, you know, the car companies, Mills and Hadwin, which I know you've heard from, the little businesses. I had meetings with people early in the morning and it was like going to a funeral. I don't think the people in Scarborough and Etobicoke experienced that. I don't think they went out and met with people.

Mr Owens: Representing a Scarborough riding, my question is, how do we put the genie back in the bottle now that it's out? It doesn't matter what happens now, whether it's defeated, passed or -- the problem is now fully and firmly out in the public. It doesn't matter whether you live in Scarborough or in the city of Toronto; there is now a cognition --

Ms Johnston: Jane Jacobs warned us about that, saying, "Stop before you can't stop"; Tonks said, "It's too late to stop," but Patrick -- and I can't remember his name, the leader of the tax coalition in Scarborough -- I think has learned a lot over these last couple of months listening to the point of view being expressed by the city.

Ms Olivia Chow: I think you should reserve that question for Scott Cavalier, who of course you would know, who represents one of the --

Ms Johnston: He's coming.

Ms Chow: Yes, he's coming at 2:45 -- because he has been working with a lot of residents and pushing Metro. I think your question is best addressed to him because we tried our best to say that this is an incoherent and absurd plan.

The Chair: Ms Poole and Mr Stockwell.

Ms Poole: I have a question for Olivia. After Mr Maxwell's presentation I went out in the hallway to talk to him for a few minutes. He was talking to me about the fact that he was one of the New Democrats who fought to have a policy put in place at the convention against market value in 1984 and he expressed to me how very disappointed he was. Olivia, as a New Democrat, are you disappointed in the provincial government for not intervening and stopping MVA?

Ms Chow: Actually, I've worked very hard in two NDP provincial councils to make sure that the party policy against MVA remains in the books, and as a result it is still there. It is very clear what the party stand is on this whole issue.

Yes, I am disappointed. The Tories, through Bill Davis, intervened on the Spadina Expressway; the Liberals, through David Peterson, intervened on Harbourfront and declared the provincial interest; and I think if Bob Rae understands and feels the importance of protecting the vitality of the core of the city, he should intervene a lot more.

The other thing too is that this plan, unfortunately, is really inconsistent. I'm sure you've heard it many times, but one of the ways is that right now, if you sell a commercial building or industrial building, there's no immediate complete increase, whereas if you sell the home, there's a complete increase.

Who sells these days? The ones who have to sell, really, are the ones who either have no money or have no choice. Who are those people? Those are the people who are the ones who have lost their job, who either have exhausted their unemployment insurance or may not be able to get their unemployment insurance and may not be able to have welfare because they do have an asset, and these are the people who worked really hard for many years to save up enough money to have this house.

Now, when this person tries to sell and the family tries to sell the home, they're going to be in serious trouble because there's a lien on the property. They probably most likely would get a very small percentage of what the house is really worth, and it's really jeopardized their future. That includes young kids who may be orphans, or it could be that the house may be in trust, and when this person reaches 18, for example, and has to get the house back, again, the house loses part of the value.

There are all types of things in there I'm sure you've heard in the last few days that are inconsistent.

The Chair: If I could --

Ms Chow: I hope if there is one thing -- then I'm finished -- that can be changed, it is this sale-of-home clause. That needs to be really tightened up. It would only cost Metro $6 million and Metro has the money in the MVA envelope to change it, so if there's one recommendation from your committee, it should be that one.

Ms Poole: All you have to do is get the NDP to support my amendment.

Mr Stockwell: I always like to ask questions of previous constituents, Councillor Johnston.

Ms Johnston: Am I your previous constituent?

Mr Stockwell: I remember you telling me -- Shaver or something. You used to tell me you lived down there.

Ms Johnston: No, no, Goswell Road.

Mr Stockwell: Same thing; it's very close. Anyway, the question I have is, I'm not wholeheartedly in favour of your document, as you well know, but there is one concern I have in the rail lands. I think there's probably a decent argument to be made about assessing them at the same rate as the abutting owners where you could have rail lands neighbouring an office complex, for that matter, and their assessment would be similar. Was this debated much at council? It seems that this has truly fallen through the cracks, because it's now under the category of "other."

Ms Johnston: This is yet another thing, yes. That's right.

Mr Stockwell: I'm not real sure what "other" means.

Ms Johnston: Nobody knows what "other" means. We keep finding out by disaster. It's legislation by disaster. It truly is, because this did not come up during the debate. I think it was after it was passed by council that the railway lands got worried and intervened, so I can't answer your question.

Mr Stockwell: It's $46 million that's involved or something like that.

Ms Johnston: Yes, I watched your deputation on it.

Mr Stockwell: The only one other point I could make is, the rail lands have the opportunity to go back three years and forward seven if they want to write off these dollars, whereas the constituent home owner or renter can't do the same thing. I suppose that's one selling point with respect to allowing it to go through there.

The last question point I have is, you're suggesting the city of Toronto shifts dollars out for education purposes. So does Etobicoke.

Ms Johnston: I know that, yes.

Mr Stockwell: Etobicoke has been shifting dollars out for a lot of years. I'm not saying it's fair or unfair; I understand, because you have a burgeoning east end in Scarborough that needs schools built and in Etobicoke we have schools that are closed. It's an understandable argument, and that's the way Metro in fact was supposed to work when it was set up.

Ms Johnston: But you'll remember, Chris, when we debated this in 1989 at Metro, the mayor of Scarborough couldn't answer the question about how much Scarborough received in subsidies in education dollars.

Mr Stockwell: No, but I think she can now.

Ms Johnston: Yes, she's learned a lot in a couple of years. But it was appalling that it took her that long.

Mr Stockwell: Haven't we all?

Ms Johnston: Yes, I guess we all do as we get older.

Mr Stockwell: Thank you. It was well presented.

The Acting Chair (Mr Murray J. Elston): Thank you very much for your deputation. Thanks, Anne; always very instructive.



The Acting Chair: We can move on to Ms Bossons, who is, I think, also joined by Mr Fotinos, if you would come forward.

If you could identify yourselves for the record and then present, I just note for everyone that we are running about half an hour behind. We have to apologize to those people who I know also have busy schedules, but we'll try to move right along.

Ms Ila Bossons: I'll try to speak fast. I'm Metro Councillor Bossons and I represent the Metro ward just north, on the north side of Bloor. Olivia Chow represents the ward in which we're sitting at the moment. I'm here as a clear opponent of the Metro plan, indeed of the entire concept of basing taxes on the market value of a property.

I'd like to quote two things to you. About a month ago an official of the Revenue ministry, whom you know quite well, I think, Mr Mike O'Dowd, said to me, "No municipality in Ontario has attempted issues of this magnitude." I think he's right.

The other one is one that has been quoted an awful lot, and that was Mr Cooke, who said that "a duly elected council has reached a decision after considerable debate and compromise, and the province must respect that this is the responsibility of local council." In other words, Mr Cooke said they made a decision; we must not interfere.

I would argue that rather than washing its hands of Metro's decision, the province has an obligation to interfere with Metro. The province is inextricably enmeshed with Metro, and an unwise decision by Metro will have a negative effect on the province. You can't help that.

Metro's is the largest attempt at changing our municipal tax system. Our yearly tax revenue is $4.3 billion. Wouldn't you wish you had those? After having heard a lot of deputations, you should keep just one single fact in mind: That plan is being put to you by Metro, it has been voted on by Metro without a single attempt at studying its impact on the economy. That should send up all sorts of red flags in this Legislature for all three parties. You should understand that no amount of debate and compromise on the floor of Metro council, or even on the floor of this House, can substitute for hard, economic analysis. Politicians can't wish economics on to the table. Other people have to do that.

You've been asked by many people to exert caution, and you've got very little to lose and everything to gain by being a concerned partner in Metro's economy. You can achieve this by stopping Bill 94 right now and getting on with serious analysis instead of the acrimonious debate I hear here in this room and elsewhere.

You can do it simply by referring Metro's plan to just about the only agency that's capable of analysing it -- that is, the Fair Tax Commission, which is going to come out with a very hard-hitting report on Metro's taxation system and it will make tough recommendations on what can be done about it. Metro, frankly, does not have the capability of studying its own plan because it involves nearly the entire Ontario economy. It is not a little plan. There are no impact studies, no statistics, no understanding.

As a member of Metro council and a member of its task force on assessment reform, which is a very serious misnomer because no assessments were reformed, I can assure you that in the short years leading to the plan's original approval in 1989 and reapproval in early 1990, Metro council did not carry out any economic analysis of any Metro economic facts or assessment figures. It was a theoretical analysis which you and I could have also done. The conclusion was that all wealth should be taxed. I do agree with that, and I believe you do. In fact, analysis of this magnitude simply cannot be done by Toronto.

What's worse, because there are so few numbers, is we now hear the most meaningless figures bandied about, including by many members of the committee. The most amusing question tends to be the one which has been asked by Mr Mammoliti quite frequently. He very earnestly says: "Well, with 58% of taxpayers getting a decrease and 42% getting an increase, isn't that a wonderful plan? Why should we not support it?" That's meaningless. What increases? Who gets them? What's going to happen as a result of these increases? Two average figures are just nonsense, and you learn that in Economics or Statistics 100. To say the least, those statements are based on ignorance.

Until it is crystal clear that 1988 market value-based taxation will not apply to the Metro market, the owners of commercial properties will find their property values grossly depressed. What buyer in his right mind would offer much for a building that has a 300% tax increase overhanging it? In this respect, let me just quote a few numbers.

Most of you are not from Metro. Most of you would find it inconceivable that a 16-foot, semidetached frame building in 1988 would have been valued by a provincial assessor as worth $1 million with a tax of $10,000 in one part of the city just up the street from here, whereas if you'd taken that building and plunked it down in Scarborough somewhere it would have been worth $200,000 and would have paid $2,000. Who among you can even imagine those numbers to apply to their own home town? Probably none.

What service garage can you think of which now pays $16,000 in property tax plus $5,000 in business tax? What would your future business plans be if you were told that the 1988 market value tax would be $135,000 -- from $16,000 to $135,000 -- and your business tax would go from $5,000 to $40,000? Do you think anyone would buy your property simply on the say-so of the Municipal Affairs minister that this government would not allow full market value to be implemented? I think not. Would you trust the next 1994 Metro council or the next government not to listen once again to those who see immediate tax cuts from market value and who will push even harder for it?

The loss of equity in Toronto has been much higher than in the suburbs because here values were inflated grossly and have plummeted more steeply. The street demonstrations and the threats of civil disobedience by formerly law-abiding small business people have sent a message clear across the country, and even beyond our border, that Metro is a capricious and unfriendly place to do business in and that the Metro plan will make it seriously capricious and unfriendly.

By approving Bill 94, you'll only deepen this uncertainty and continue to stymie commercial activity. I don't think we can afford that. Don't for a moment delude yourselves that the Metro plan is a Metro affair only. If you damage small business in Metro, you damage small business and the economy all across Ontario. We are all part and parcel of the same economic ship, which is in pretty troubled waters at the moment.

I would remind you that the survival of the provincial economy doesn't hinge on resources or the auto industry. They're closing down. They're not selling. They can't compete with Indonesia or other countries. It will hinge on innovation, on competitive small businesses which have always been the most important job creators. There are very few large businesses in this province. It's the small businesses that have made and are making this country. Most of them are centred in the city. Cities are incubators of entrepreneurship, as Jane Jacobs has said, and this plan will help nip it.

The plan would also take away equity from home owners. I know Canadians always want to be like their American cousins. Don't believe for a moment that we're immune to what's happened in American cities. Jane Jacobs, the sociologist who is a world expert on the economy of cities, has already seen these trends in Toronto. If we knew how to fix them, we would have long eradicated street prostitution, drug dealing, violence and the homeless from Metro neighbourhoods. We can't fix them. They're here and there are more of these incidents every day. It's beginning. That's why it's called urban rot, and Professor Jacobs has clearly predicted that there'll be more boarded-up stores and more people leaving the city. It's too bad that we're aping the Americans 40 years after the Americans made all these mistakes because they applied precisely this kind of tax system.

A recession is not the time to approve a plan which, in 25 months from now, will have implemented 25% tax increases on a majority of Toronto's small businesses and which will have implemented up to 10% tax increases on nearly a majority of home owners in the city of Toronto.

You've heard Canadian National Railways, you've heard CP and you've heard from their union. A remark of the union person sticks with me. He said: "Look at the real world out there. We're fighting for our lives." The job losses that CN predicted are going to be reflected all through the economy. One single tailor, one single architect, one single shop person gone, that's three jobs. Every one of those will add to the misery that's out in our streets.

Organizations, non-profit organizations, the arts are going to be taxed just like small business. Their tax increases will amount to tens and to hundreds of thousands of dollars. Are you going to give them extra grants so they can survive? We sure can't. We haven't got the money.

One brief by the arts community that was given when they thought they would get full increases -- it's now down to 25% of current -- said, "You're wiping out the arts." The arts are hanging on by their teeth. This city attracts about $1 billion worth of tourism, and the arts are a very major reason for getting those tourists coming here.

May I remind you also that hotels all around us are either struggling or closing down. This is not the time to add even a 1% tax increase. This plan will add 25% tax increases to a majority of small businesses in the city of Toronto and significant increases all across Metro.

At every turn, you have a direct interest, or should have it. Endorsing Metro's plan without understanding what it means is not just being truly stupid; it's destructive. I can assure you that my constituents will hold the province responsible.


The plan is clearly market value based, and Councillor Johnston has spoken about that. It looks like market value, it smells like market value, and it reaps revenue like market value. Do you really believe that after the interim period, come January 1998, the province and Metro will undo these firmly set increases and undo at the same time the hundreds of thousands of tax decreases that meanwhile have also been given based on 1988? Do you really think you can wash your hands of this plan? I can assure you that the electorate of Toronto, for one, will not let the province off the hook. It is not just a threat which is made to the NDP and the government; it is a threat that I want all the MPPs in this House to hear.

To say, as did Mr Cooke and other MPPs, that they will study Metro's plan after it has been implemented is disingenuous. The Globe and Mail remarked on that, that Mr Cooke's horse discreetly seems to follow his cart, and my constituents are angry that you as a senior government should move with such haste to endorse this plan.

In my opinion, you have an obligation to interfere. You should not have a fear of interfering. You are Metro's major and intimate funding partner. In 1992, you gave Metro no less than $1.4 billion towards its operating grants. Our operating budget is $3.2 billion.

The province has historically provided three quarters of all of our major capital projects. That's hundreds of millions of dollars. You set a myriad of standards which dictate our funding decisions literally day by day, whether it's on a simple traffic signal, setting TTC fares or the rules of providing day care or running Metro's homes for the aged.

Your hand is in everything, and instead of feeling that you should not keep your hand there, I say you should put it more in there because, in my opinion -- and I sit at Metro council -- Metro often doesn't know what it's doing. My constituents want you to keep a sharp eye on their hard-earned dollars.

To say, as Mr Cooke has said, that Metro's a duly elected council and its decisions should be sacrosanct to you is also to say that you should give Metro council $7 billion worth of transit funding. We've been duly elected. I've been elected with 68% of the votes. If my decision stands for "Fork over the $7 billion or the $9 billion," clearly you're not going to shy away from interfering in that particular issue. You haven't got the money. You haven't got the money either to pick up the mess after this tax plan is implemented.

You will have to make decisions in the next few years -- it can't be put off much longer -- on infrastructure spending in the Metro area. You will have to interfere. You cannot wash your hands of Metro's tax proposals or any other plans. You've got to look beyond the quick argument that "My constituents will get a tax decrease." Wonderful. I hope that at least this senior government takes a somewhat broader look at matters and looks beyond that and practises wise stewardship.

My constituents want tax reform, particularly because education funding is so rotten. Councillor Johnston referred to the exports. One out of every three tax dollars spent or provided by Toronto taxpayers is exported to other municipalities whose trustees we have never met, whose trustees we have not voted for and whose trustees don't owe us the time of day or, indeed, any accountability for this $316 million.

By exporting that money, by the way, it means that the taxes in Scarborough are kept 27% lower than they should be, East York keeps its taxes 30% lower and the city of York gets 48% of its property taxes paid by someone else. Most of that comes from Toronto. That's the perversion of the Metro concept. It's not a red herring, as Mayor Trimmer said to you. It cries out for reform.

The city has asked you not to approve Bill 94. You have every right to demand a cautious, analytical approach to Metro's plan. You have everything to gain and nothing to lose from referring the plan to the Fair Tax Commission. I urge you not to vote for a third time for Bill 94 and do just that, hold off and ask that finally someone understand the effects of this plan on the Metro and Ontario economy.

The Chair: Thank you very much. Mr Fotinos, did you wish to add a comment?

Mr Dennis Fotinos: Yes, Mr Chairman, thank you. I won't take up too much of your time. We appreciate Councillor Bossons's allowing me to add my two cents in.

I wanted to address just two points. One is the social impact. I represent the ward of Davenport, which has quite a few areas that have infamy attached to them. One in particular is Bloor and Lansdowne, often called the McDonald's drive-thru of drug dealing. I want to address very briefly what the impact of market value assessment will be on the businesses at Bloor and Lansdowne.

Even with the protection measures instituted, I'll give you a sample case of a business paying $6,000. Even with the 10% protection factor factored in, including the corresponding increase in business taxes, you're looking at a potential increase of around $900. Although that $900 may not equate to bankruptcy, and I'm not going to stand here and tell you that that's what it will do, in the long run it will create an unfair tax burden.

In the short term what does that do? In the short term the $900 or $1,000 of tax that will be added on to the tax burden -- because you've got the mill rate increase as well in that $900 -- means that $900 that would have been spent in the business improvement area to better the area of Lansdowne and Bloor by providing measures to alleviate the negative repercussions of drug dealing and prostitution in the area won't be spent. That businessperson will have to put that money into this extra increased burden.

The social impact means that the problems of prostitution, drug dealing and the other ancillary crimes that result will continue to be unchecked and the businesses that are barely surviving in that area will have one more impediment in their way of success.

Finally, I just want to address really briefly the alternatives. In hearing a lot of the deputants and the questions that came forward, I heard the question come out, "What alternative do you have?" That question has been put to the city of Toronto and to Mayor Rowlands. I submit to you that there are two alternatives available to the province at this point. One alternative is in substance and the other alternative is in process.

The alternative in substance flies contrary to what we on Metro council were told by our chief administrative officer and what we were told by our bureaucrats at Metro. We were told that frankly property taxes can't reflect a person's ability to pay. They are like the user fees we charge at Metro for different services we provide.

I contested that point and I submit to you that we have to contest that point. As government, we have to submit innovative ideas to people. While it isn't up to us to sit down and say, "These are the numbers we attach to them," I think it is up to us as representatives of the people to tell our experts, our economists and our bureaucrats that in fact they have to come forward with a system which reflects a person's ability to pay, which reflects the size, location and market value, which reflects the usage of a home, whether it's a single-family dwelling or whether it's used for profit, give them that direction and tell them, "Come back with a proposal that reflects these ideas." I believe all three parties espouse those concepts that deal with fairness, the person's ability to pay and the other aspects I have outlined.

Finally, if that's not adopted and we can't go that route and we don't want to deal with an alternative in terms of substance, then I think there is an alternative which I hope this NDP government espouses, and that's in process. I hope that at least the NDP government allows a free vote in the House and allows members of this House to vote according to what their constituents truly want them to do in the House. At the very least, I suspect that if it's allowed to go to a free vote we will have a much better representation of what the true interests are of the taxpayers in this municipality and the province.

I won't harp on a lot of the other details that Councillor Bossons talked about because you've already heard them many times over. I sincerely hope that at least you'll consider the inequities that will be created in terms of the point-of-sale provision.


The government has come out and said, "Basically, we don't agree with that," but by sending it back to Metro, I think what you're doing here is trying to -- not you personally, but the minister is trying to hoodwink, if I may, the people. He knows full well that the votes at Metro are going to be 21 to 13 against removing that point-of-sale provision, so sending it back to Metro is not the solution. To pretend that's a magnanimous solution that the government doesn't agree with is not the right way to go.

If the government does not agree with the point-of-sale provision, then remove it right now and put the protection on the home owners when they sell their properties so that we can elect a new Metro council, hopefully in the next municipal election, that's going to turn this thing all over and give the kind of tax system to the people that they deserve.

The Chair: Thank you very much. I regret that we have passed over our time for questions. I know there would be some but you've provided a great deal of thoughtful comment and we thank you both for coming before the committee.

Ms Poole: Mr Chair, just a point of clarification: The witness asked about the point-of-sale provision and whether the province would put on a protective cap or retain the protective cap. I just wanted to tell Mr Fotinos that I asked the parliamentary assistant that today. He's free to correct me if I'm not paraphrasing him properly. My understanding is that they haven't reconsidered at this particular point in time but that may change, so I will be putting forward an amendment, and the government apparently has not completely ruled out that it would accept that amendment.


The Chair: I call Mr Brian Ineson. Welcome to the committee and please go ahead when you're ready.

Mr Brian Ineson: Thank you, Mr Chair and honourable members of the committee. I'm a councillor in the city of Etobicoke, the north end of Etobicoke up in the Rexdale area. I'm also actually a teacher and teach mathematics and still manage to keep a class or two.

Actually, I've done some work on what the taxpayers are paying here in Etobicoke and treated it sort of as an annuity, so I had my grade 12 business math class work through that. Mr Silipo will be happy to know that. Mind you, these are all students who are pre-transition years and pre-destreaming. But they did manage to work through that, and my finite math class did it as an independent study unit.

Mr Tony Rizzo (Oakwood): Are they basic, general or --

Mr Ineson: The finite math, of course, are advanced and the business are general.

The Chair: I sense we'd better stick with market value. We could be in trouble.

Mr Ineson: I'm coming in; that's okay. I'm glad to hear the word "fairness," because man, that's all we want in Etobicoke, fairness. Etobicoke, by the way, is that part of Metro on the other side of the Humber. It didn't fall off. It's still there.

I'm probably going to be giving a different presentation than you've heard from some of the ones I've been in on here anyway, but they're great to listen to; it gets you excited.

Just to give you one example, ward 10, which I live in, represented in this book on market value 12,000 tax addresses: 11,500, about 96%, get a decrease under MVA. In Etobicoke we have 100,000 tax accounts and 75,000 would see them reduced under MVA. That would be if we could get MVA totally in.

I'm forced to ask you to support this form of MVA which we have coming in, although to me it's a halfway MVA. It's kind of like this grade B horror movie, Son of MVA or something like that. But to do anything else would mean that my residents wouldn't get at least part of a break this coming year.

Basically, the residents we represent in Etobicoke are sick and tired of supporting taxpayers in other parts of Metro. It's basically just subsidizing taxpayers. We've heard the city of Toronto is being subsidized by residents and we heard this word "fairness." This isn't fair and just.

I want to talk just briefly here. If we look at it, the lifetime cost to a resident in Etobicoke who, right now, perhaps, is paying $600 too much on his tax bill, if we take -- Mr Stockwell, did you say --

Mr Stockwell: It's $600 I get.

Mr Ineson: Okay, $600. Now, if we assume you bought your house in 1973 and you being -- we'll put it that there are three classes of investors: the really astute ones who managed to put their money in the Templeton Growth Fund -- 18%, 35-year track record --

Mr Stockwell: That's not me.

Mr Ineson: Ten per cent, maybe more, conservative; 7% if you just kind of left it in your bank account.

The Chair: Try not to let Mr Stockwell --

Mr Stockwell: I apologize.

Mr Ineson: Lifetime cost: I'm assuming we take MVA up till now which you've paid -- you're paying $600 too much if you bought your house 20 years ago. I did an average resident. I have a whole thing of figures which fax to you later on. Back in 1973, if you bought your house then, you're already paying about $140 too much. I just took the tax rates and worked them backwards.

Now, given MVA is halfway in -- I don't know how we're ever going to get it all the way in. It took 20 years to get it halfway in. I'm going to assume it will take another 20 to get the other half in. So now you're still paying probably an extra $600 for the rest of -- what would happen in this formula is another $300 too much for the rest of your years.

It comes to your cost when you retire at age 65, if you're about 45 now: $75,000 at 7%; $160,000 at 10%; it's up over a million, about $1.8 million, if you've got it in that Templeton Growth Fund. We in Etobicoke just want to know how much we are supposed to be subsidizing residents in other parts of Toronto. What's our lifetime bill going to be for subsidizing? The residents in Etobicoke, when I look at the ones around my ward, are not super-rich people. We're talking of little three-bedroom houses.

We got the papers from the last couple of days: big headlines, two-inch headlines here: Welfare Fraud; Welfare Ripoff. All three papers; all three Toronto dailies. We've got a nice picture of Mayor Rowlands here crying poor for Toronto, too, at the same time. These two things can go together, because in essence our present property tax system, as we've been experiencing it without MVA, is nothing short of government-sanctioned, in fact, government-mandated welfare fraud.

Basically, welfare fraud would be when you're giving money to someone, you're forcing someone to pay the money someone else is getting and they really shouldn't be getting it. This is what's been happening in Toronto. I don't know, was it the NDP that coined the phrase "corporate welfare bums"? I would say the city of Toronto is nothing less than municipal welfare bums, if we're going to do it that way, because in essence what it is doing is it has conned everybody into thinking this money it has been -- if you take the extra money it has been getting over its lifetime, it shouldn't have a tax bill for the next 20 years. As far as talking about the education tax in Etobicoke is concerned, we have a negative education subsidy. We give away more than we get.

Talking about downtown here, all this infrastructure that's down here -- and Toronto wants to leave Metro -- the infrastructure's all been paid for. My residents have been paying for a subway that we live miles from. We don't have it running through our backyard. So one way of looking at it is that if they want to leave, if they want to take this structure, give them all the -- the reason they've got all this tax base is because of all the structure. Maybe we should just plow under the 401, plow under the QEW, let them come into Toronto by boat and see how they do then.

This present property tax, like I say, is just more or less a form of welfare for the city of Toronto. In Etobicoke, in Rexdale, our heartland in north Etobicoke, it's almost empty. In fact, with one of the councillors, Councillor Elizabeth Brown up there, her nine-year-old son suggested changing the name of the city to CB Commercial. He said, "But that's the sign that's on every second building, mom, `CB Commercial' and `For sale,' `For Lease' or `For Rent.'"


We're not talking about the businesses leaving; they've left; they're gone. To give a simple example of one business that Etobicoke could have, I've got an acquaintance who has a business in Toronto here, a small, little publicity business with three or four employees. I said, "What's happening to your tax bill?" He said, "It's going from $4,000 to $16,000." I said: "What if you absolutely had to pay that? What would you do?" He said, "We'd probably fold up, move and operate out of our basement in Etobicoke until we found cheaper accommodation nearby." To me that means what Etobicoke is doing is paying residents to locate elsewhere.

Correct me if I'm wrong, but I thought bonusing was wrong. Bonusing is when we give people tax breaks to locate in certain areas. This form of property tax system we've had all these years is nothing short of bonusing. In fact, it's worse than bonusing. At least in bonusing you cough up the money yourself to give the business a tax break. What is happening here is that Etobicoke is being forced to cough up the money to give to the businesses to locate in Toronto.

You can look at how high their tax bills are going up, but the thing is that a lot of those businesses perhaps would be located in other municipalities like Etobicoke. We've lost our businesses. They just can't afford to support it any longer. For over 20 years businesses and homes in Toronto have been given a tax holiday, and now we have to pick up the tab. They're going to have to pick up the tab.

With respect to Etobicoke, this past year we paid $70 million too much in tax, if we go by the MVA figures. Even with this half-baked MVA, it's still going to be in excess of $50 million. That's a lot of money. We could sure use that. Those empty businesses: We could do a little more than put up light switches on the post and tell them to flick the lights out after they leave. We might be able to generate something in that city. That's $70 million of the $600 million in taxes that are collected in Etobicoke. That's the part that counts in Metro, the education and everything.

What I'm asking you to do, if you had the power, is I'd say force Metro to put in MVA all the way. Forget about this halfway stuff.

I don't want to go through this shemozzle we've gone through for the last couple of months three more years from now when we try to get the other 50% in, but at least don't stop this. We need to at least get some break.

The average resident, over his lifetime, can't afford to give $100,000 or $200,000 or $500,000 of his money. Like I say, conservatively, it's a hundred grand over a lifetime in extra taxes, assuming that these people could have invested this money in something like registered retirement savings plans.

I have just a couple of other points.

The Chair: There are a few who might ask questions. I'm just concerned about time.

Mr Ineson: One or two more quick points: I know you have to look at the whole picture, but you have to take a look at places like Etobicoke where the business needs us. We're fighting like crazy to attract and keep them. We need every break we can get. Mississauga: When we get farther out from Toronto -- I believe the education portion of the tax is what does us in. In essence, we're getting hit every which way. The money we give in taxes to Metro and to this province is being used to subsidize areas outside our borough, our municipality and our city. I'm just asking that you pass this thing.

I'll answer any questions I can.

The Chair: If I can, one question from each caucus, but please, if you can, keep the question tight.

Mr Ineson: I'll try and keep the answer tight.

Mr Mammoliti: Thank you for coming out. I must commend you for coming down. We're not getting that many individuals coming from Etobicoke or North York or Scarborough who are in favour of this. In my particular riding, I've asked individuals to come out and talk about why they're in favour of it. The obvious reasons are a decrease and a fairer system than what we have now. But the bulk of the reason for North York, in my particular area, is that they can't speak English. A lot of them just can't speak English and can't come down. I commend you for coming down and representing your community.

Over the last little while, the questions I've asked in terms of the people who want it stopped are: "What about Etobicoke? What about North York? What about Scarborough? Do you think it's fair that they continue paying the taxes they are paying currently?" The answer we've been getting consistently from those people is: "They knew what the taxes were when they bought their house. It's their fault." What do you respond in terms of those comments? How would you respond to them?

Mr Ineson: You're talking about these recent ones maybe, these bigger homes; they knew what the taxes were when they bought their houses. Is that what you mean?

Mr Mammoliti: I'm talking about the individuals from Toronto who want this thing stopped. Their response to the argument that people in the suburbs are paying too much is that it's too bad; they've moved out there, they've dug their graves, now let them deal with it. Basically, that's what they're saying. What's your response to them when they say that?

Mr Ineson: I would say all we want is a fair system. I think the way our society operates is fair, and I don't see why someone in Etobicoke should be shelling out this past year $1,500 to give somebody in Toronto -- actually, one of our staff members has a house in Toronto up for sale. I noticed it was selling for $270,000, and the taxes were $1,100. My own assistant looked and said, "My house is smaller than that, and I pay $3,000 in Etobicoke." This is not fair.

The Chair: Ms Poole and Mr Stockwell.

Ms Poole: I think we could safely say the one thing that everybody who has come here to appear and every member on this committee can agree upon is the fact that people are feeling very taxed out, very tax stressed and that everybody feels that he is paying too much. You were putting forward the position of the city of Etobicoke, which is the same as Toronto's position of exporting tax dollars to other municipalities.

I don't know if you were here a bit earlier during Ila Bossons's presentation, but she made the same argument from the other side of the coin, which is that city of Toronto taxpayers contribute $160 million to Scarborough alone every year for its schools and that we keep Scarborough tax bills artificially lower by 24% through that mechanism. Etobicoke is doing the same thing, and North York is also an exporter of moneys. So those three municipalities are subsidizing Scarborough, York and East York.

All I ask is that you consider that there are two sides to the issue. A lot of people in Toronto have much smaller homes. Not everybody; we have some larger areas, but many of our homes are very small. We don't complain about it, we love them, but we would see a much larger house for the same taxes under market value in Scarborough or Etobicoke. That's just the other side of the coin.

Mr Ineson: I have just a quick comment on that. The way I would approach this is that the reason you've got so much tax in Toronto is because you've got a lot of business here. You've got all kinds of infrastructure.

Ms Poole: Not any more; we've got the same problem you do.

Mr Ineson: You should check out Etobicoke. You've got infrastructure, and you've got subways that residents on the environs have paid for that you reap the biggest benefit of. You've got highways coming through, that mainly just use up our prime land, basically to funnel people into Toronto. I think it's only fair and just that Toronto would pay that, because it has that infrastructure to attract that business that's been paid for by everybody. In essence, when Toronto said it wanted to leave, it could leave, but it's going to leave part of the commercial assessment behind. It's not all theirs; they didn't pay for it. We paid for it.

Ms Poole: But when the business taxes for the city of Toronto are among the highest in North America, if not the highest -- there's a debate whether we're ahead of Manhattan now. We're in the same position you are, that's what I'm saying.

Mr Ineson: If yours are high, what are ours?

Ms Poole: We're losing business to Pickering, to the suburbs.

The Chair: On that agreement, Mr Stockwell.

Mr Stockwell: Oh, we've got an agreement.

Ms Poole: A tenuous agreement.

Mr Stockwell: A tenuous agreement, but an agreement none the less. I just want to make a couple of points. I represent a different part of Etobicoke, but I know your part; I represented it for six years as a controller in Etobicoke. In Etobicoke we tend to have a bit of difficulty because we have that burgeoning metropolis west of us known as Mississauga. As the mayor always says, "The Mississauga hordes cross the river."


In Etobicoke we get no education funding from the provincial government. We get a reduced board of health budget. We transfer our payments out to the other municipalities just like the city of Toronto to Scarborough, York and East York. Under MVA it's clear we're overtaxed, overtaxed significantly in some cases. Is it any wonder why you can't keep business in Etobicoke, which is the number one concern, when our taxes are X and if you cross the river into that burgeoning west end known as Mississauga, you pay half -- no doubt about it -- to cross the road? I just want to make that point. I want to ask if you've seen it.

Other than market value assessment and maybe some greater grants from the provincial government, what is it you're going to do in Etobicoke to maintain or attract industry when it can cross the road and pay half the municipal taxes, in some cases amounting to hundreds of thousands of dollars a year?

Mr Ineson: Look at Campbell Soup under MVA: $600,000 down or something.

Mr Stockwell: A reduction of $600,000 at Campbell Soup alone.

Mr Ineson: They can't budget for that. Basically, what's been happening is nothing short of bonusing. It's bonusing. It's giving tax breaks to companies to locate elsewhere, and we have to pay it. Our taxpayers have to pay it. We could use some help. Like I said, the education subsidies given outside, the difference is mainly the education portion when you get farther away.

The Chair: Thank you very much for coming to the committee this afternoon, Mr Ineson.

Mr Ineson: Thank you for having me.


The Chair: The next witness is Mr Michael Colle, if you would come forward, please.

Ms Poole: While Mr Colle is coming to be seated, I just had some important information passed to me from city officials. The city of Toronto has 20% of the population but pays 29% of all taxes raised from the residential property section in Metro. I thought it might be interesting to have those statistics on the record.

The Chair: Mr Colle, we welcome you to the committee. We have a copy of your submission. Please, go ahead.

Mr Michael Colle: Thank you, Mr Chair and members of the committee. I'm not here to bash the city of Toronto. I'm not here to bash the members of Metro who, unlike myself, voted for the plan. I'm here to offer a couple of maybe divergent viewpoints and to let the members of the committee know that it's just not a matter of the city of Toronto versus the suburbs. There are also areas in North York, East York and York, and representatives from those areas, like myself, who voted against the latest Metro proposal. I know the deputations I've heard so far seem to pit it as Toronto versus the others, but there are some areas outside of Toronto, like my own, that have been adversely affected.

I think some of us have a bit of a different perspective. I live on the border between Toronto and York. Also, my area borders North York. I think being parochial in this case doesn't really help because as far as many people in my area are concerned, the health of North York or the health of the city of Toronto will impact on the vitality and the health of the area I represent in York. So it doesn't do any of us any good to bash Toronto, especially when Toronto gives $64 million a year to the Board of Education for the City of York to operate. Therefore, it's really counterproductive to sort of bite the hand that feeds you. I think a lot of people in York are very cognizant of the fact that we rely on other municipalities for our own economic and residential vitality.

In the past a lot of us in York waited for the MVA to come through in York as sort of a Messiah that would save us from the highest mill rate in Metro and also some of the highest assessment in Metro. We anticipated the coming of MVA. In 1984, in fact, I was on a task force at Metro that visited all the municipalities. We studied it and heard from deputations right across Metro. At that time the proposal was one that I thought was acceptable, and I voted in favour of the 1984 proposal. But there's a couple of very important differences that have come about since 1984.

First of all, the latest Metro proposal is based on 1988 values. No matter how you try and explain 1988 values to the average citizen, it doesn't compute. It was a blip, something that didn't make sense, had no continuity to it, and as a result of choosing 1988, the tax proposal of Metro gets to be something very few people can either understand or accept. No matter how you try and explain why you selected 1988, it's almost impossible for the general public to accept the selection of that year.

What I'd like to also mention is that whether or not it was intentional, the latest Metro proposal in effect taxes to a greater level the most intensified areas of Metro. I've included a chart I think Councillor Anne Johnston included. If you look at the population per square kilometre, you'll see that the areas of Metro, whether they be in mine, in York or in the city of Toronto, with the highest population densities are the ones that get hit the hardest by the new Metro proposal. The ones that have less intensification, less density, seem to be benefiting by it. I'm not saying that's intentional or whatever, but that is the direct result of the proposal.

The fallout from that is that there are many of us who have made a commitment to stay in the downtown core. That commitment was made by us over the last 20 years, and they were either from groups of immigrants who came into the downtown core or yuppies who came a little later, but we made a commitment to renovate, rehabilitate, rebuild our homes and stay in the downtown core, put up with rundown schools, put up with parks that are nonexistent, put up with a lot of the social problems. If you look at some of the hostels, the care facilities we have to absorb, and we do it so willingly, in fact if you look at the number of care facilities in the city of Toronto, you'll see that the city of Toronto has more care facilities like group homes than any other municipality. We were willing to put up with that and, again, absorb it within our community and invest our own money into renovating and restoring our homes.

This MVA proposal is really a further entrenchment of a very outdated and antiquated approach to taxation -- that is, that when you do restore an older home or building, you renovate, rehabilitate it, you automatically trigger a tax reassessment. In other words, you have to pay for building supplies, you have to pay for people who come in and work on your home or building, and you pay provincial sales tax and other taxes on that, excise taxes, and then on top of that, besides the regular mill rate increases, your building permit triggers another tax assessment, which invariably triggers another tax increase. So you get punished for committing yourself to rehabilitating and restoring older neighbourhoods.

I say to you that if the provincial government or the Metro government or the federal government had paid for the rehabilitation and renovation of downtown Metro over the last 30 years, it would have cost them maybe to the tune of $50 million to $60 billion. But that was done in spite of the governments, in spite of the municipal, provincial and federal governments which penalize and have penalized the immigrants who've come in and restored the downtown core.

This latest MVA proposal further accentuates that inequity of penalizing people who invest and stay in the downtown core. In fact it becomes almost a reward for people who have packed up their bags and gone to Woodbridge or Thornhill. They have left us behind and said, "I can't put up with the crime and I can't put up with fixing up my home any more," so they have left. We've remained behind, and in the past we have done so, again, without any assistance. This is what I'm afraid is the worst fallout of the latest proposal, that it's going to penalize people who have made that commitment.

I would say that there are a couple of modifications -- and I'm fairly realistic. I realize that the people at Metro have worked hard to try and come up with a solution, and I've heard people talk about unit value and poll taxes. I mean, that is all a pipe dream. Every pamphlet you get at the door for the last 20 years: "We're going to have true tax reform. We're going to eliminate welfare. We're going to eliminate education." Those are pipedreams. We're all going to be old and greyer by the time those pipedreams come true.


I'm saying we have something before us that Metro has put before us. There are some small modifications that one can make to at least make them more equitable. The three simple things I'm asking for are that, first, you look at using 1984 as the base year, because the province changed the base year already from 1984 to 1988. So change it back to 1984, because we're told always that it's revenue-neutral. Second, if you sell your home, you shouldn't have to pass on the new assessment to the present owner until reassessment comes in. Third, if you renovate, improve your home, there should be a moratorium of 25 years on your new assessment if you invest in your home and rehabilitate it.

I think if you incorporate those three provisions into the Metro plan, it goes a long way in terms of addressing some of these long-term inequities that the latest Metro proposal further aggravates. That's essentially what I have to say.

The Chair: Just before going to questions, just for my own information, because I'm not in Metro, where exactly is your area?

Mr Colle: St Clair and Bathurst, west to the Caledonia area, north to Eglinton, Briar Hill. So we're surrounded by the city of Toronto and North York.

The Chair: Right. Thank you. Mr Rizzo.

Mr Rizzo: Mr Colle, you just said that you voted for market value assessment in 1989. You changed your mind and voted against in 1992. You tried to explain why, but that's not been very clear to me. Can you try to do it again, if you would, please?

Mr Colle: The clearest thing is that at that time we were given two guarantees. We were told that this was an interim step towards true property tax reform. It seems now that the chances of true property tax reform, coupled with this proposal, are even more remote than ever. Second, in 1984 the majority of my residents, 74%, were to get a decrease. With the 1988 values, it's just almost the reverse. We're now 56% or so who would get an increase. Therefore, it just totally turned around the impact to being a negative impact, rather than the positive one we thought we would get.

Mr Rizzo: In other words, you didn't vote for or against because you believed in one type of reform rather than another. You voted for when you thought that the majority of the people in your area were going to benefit. Now you vote against because the majority of people are not going to benefit; they're going to be penalized.

Mr Colle: Yes. Plus the fact is that I think the 1988 choice is an aberration, that you cannot base any tax on property on that year. The selection of that year makes the whole thing really unacceptable. Those two combinations mean that it's certainly not acceptable to me nor, I think, to the majority of the people I represent.

Mr Perruzza: On a point of order, Mr Chairman: Just for the record, one, it was the Liberals who selected the year and, two, 1984 assessments were never done. They were mean averages. So the figures for 1984 weren't actual, real assessments, because they never paid to have it done. They just returned a bunch of numbers. Okay? For the record, Mr Chairman.

Mr Colle: I guess the only thing about that is that in looking at the assessments for 1988, you would think that they were also done either by Braille or by some kind of ad hoc fashion too. They're both inconsistent.

Mr Mammoliti: What did you mean by "Braille"?

Mr Colle: People that didn't go to the homes and see them.

The Chair: Order, please. Ms Poole has the floor.

Ms Poole: Just before I go to my question, I would point out to Mr Perruzza that at the time 1984 was deemed to be too outdated since everywhere in the province that the Ministry of Revenue had okayed a reassessment, they had done it on the most recent available data within the last four years. By the time this plan came --

Mr Perruzza: There were 1982 figures translated --

The Chair: Order, please. Mr Perruzza, we can state our opinions. This is not the House in debate.

Ms Poole: I'm not talking --

The Chair: Order, please. It is questions to the witness, please. We will carry on the debate at another time.

Ms Poole: Not to make it into a debate, and I actually was not saying what Mr Perruzza thought I was saying. What I was saying was that across the province -- not throughout Metro, but across the province -- they had used the most recent year when they reassessed in other municipalities.

The Chair: And our question is?

Ms Poole: The question I had for you flowed actually from what Mr Rizzo asked. You did change your vote this time around. I think the case illustrates the volatility of market value assessment as a method of property tax reform, that you have a set of winners and losers at one time, and then the next time they change, so you have a new set of winners and losers.

There have been a number of councillors who have changed their vote. I think Maria Augimeri went back and forth several times. Joe Pantalone changed his vote and now voted against it. But the one person, I believe, who voted against it using 1984 values and who actually maintained her vote against it using 1988 values, even though using 1988 values her constituents would have benefited, I believe -- and you can correct me if I'm wrong -- was Marie Labatte from North York.

Interjection: She was always against MVA.

Ms Poole: She was always against MVA. That's right. But I believe her situation changed, that her constituents actually benefited when the figures changed, yet she stuck to her position. The point I'm making is that the volatility in many cases produced changes in votes, except in this one instance, and it shows how very volatile this particular plan is.

Do you think, first of all, that the government would go back to 1984? When the same bureaucrats in the Ministry of Revenue said 1984 was too stale-dated to use three years ago, do you think they'll go back to 1984?

Secondly, while I really appreciate your efforts to be constructive, your proposal still means that it would be a market value based plan, which we've already seen is very volatile. Do you think that is not a consideration?

Mr Colle: Okay, Ms Poole, there are three points, I guess. The first point in terms of volatility is that we were constantly told by the experts that the year you chose was irrelevant; you could choose any year and the increases would be fairly uniform. That proved to be false really. The next time around, it could be your ward or your constituency, the area that you represent, that could be hit by the volatility.

There is volatility in the Toronto market. I think the average increase across Metro is 135% in property values from 1984 to 1988, but my area and a couple of others went up in about the 160% range. So it could happen anywhere the next time around. Then we'll see where the people from Scarborough will vote or people from North York will vote, if their area all of a sudden is hit by the volatility.

The other point that you made in terms of the staleness: If you look at the 1984 value, you'll see that it's almost a lot closer to reality than the 1988 value is. We may never see those 1988 values again. Ask some people who have some properties and ask them if they can sell them for the assessed value. It's a joke.

Ms Poole: That's very true, but I --

The Chair: I'm sorry, but I'm going to have to intervene here. I'm afraid we're in a real time bind. So I want to thank you very much for coming, and we really appreciate your brief and your comments.



The Chair: I now call Scott Cavalier. Welcome to the committee.

Mr Scott Cavalier: Thank you, Mr Chairman.

The Chair: I don't know if there's any water left there, but feel free to have some.

Mr Cavalier: I think we'll be okay. I'm fine, thanks.

The Chair: Etobicoke is willing to pour.

Mr Cavalier: I appreciate that.

Mr Perruzza: Mr Chairman, just to clear up the record as well. Mrs Poole --

The Chair: Can we maybe do that later?

Mr Perruzza: But it's important, I think.

The Chair: We're here to hear the witnesses. We'll have plenty of time to --

Mr Perruzza: But there was something she said that was incorrect.

The Chair: With respect, there are lots of times when people feel other people have said things that are incorrect, but we've got to move on here. We're falling behind. Mr Cavalier, you have the --

Mr Perruzza: You're going to allow Hansard to be printed with misinformation.

The Chair: Okay, please. Mr Cavalier.

Mr Cavalier: Thank you, Mr Chairman, ladies and gentlemen of the committee. I appreciate the opportunity to come here and speak to you, politician to politician. I guess today's the day when you're going to see a lot of this.

The committee is no doubt familiar with the details of the plan, so I'd like to take this opportunity to focus my remarks on five areas that have come under criticism throughout the course of your hearings.

Those five areas are (1) a tax revolt; (2) vacant lands; (3) hotels and tenants; (4) Toronto is different; (5) ungodly haste. I'd just like to run through these issues. I'll be prepared to expand upon them during questions, but very quickly.

On the issue of tax revolt: Tax revolts occur, as we've seen over history, due to two reasons, either because they believe the taxation is unfair or the taxation is too high. No matter what happens today or in the near future with this bill that's before you, there is likely to be a tax revolt in Metropolitan Toronto. It's only a question of which group it is that will be revolting.

If this plan does go through, we've already had threats from people who see themselves adversely impacted by market value and therefore having to pay more in taxes. You've got two different groups: one that is not prepared to pay its taxes at all and another that's not prepared to pay the increase, and actually a third variation on that theme is the group of people who believe they've been paying their unfair share for far too long and because they don't get their full decrease they're not going to pay their taxes either.

If the plan doesn't go through, ladies and gentlemen, the Pandora's box is already open, and those who believe they're entitled to some relief and don't receive any, we've already had dire warnings of those consequences as well.

Surely the obligation of all levels of government that spend tax dollars and tax taxpayers to garner that money is to ensure that each category of taxpayers pays according to the same rules. Today there are 38 different sets of rules in existence.

The second issue, vacant land: Assessments of these lands are the responsibility of the provincial Legislature and are not within the jurisdiction of Metropolitan Toronto, and I refer specifically to the fact that they're assessed at the same rate as adjacent lands, which has come under criticism from the railways. The segregation of this grouping of vacant land category was a political decision, and it was one that was taken in 1989 and not a new introduction in this most recent implementation plan.

As I see it, those vacant lands categories really have three types of properties within them: corridors -- rail, hydro, pipelines; the railway lands --


Mr Cavalier: It's nice to know Councillor Johnston's here; I don't even have to turn around -- and municipal parking lots. That's fundamentally how those three categories shake down. Let me just touch on those three categories for a moment.

The corridors: If you, here in this committee, believe they shouldn't be assessed in the fashion that is being proposed, you must change your rules. These are the rules of the Ministry of Revenue in the assessment division. The decision not to cap these lands was a political decision taken by Metro council. I'd like to remind you all, because some of the criticism that this particular section has been receiving suggests that Metro Toronto is attempting to make itself rich on the backs of the railways, Hydro, the pipeline companies and things of that sort. I just want to take a moment to remind you that this reassessment process truly is revenue-neutral. Neither Metro nor any of the area municipalities or the school boards will raise one additional cent. If we're going to sting the taxpayer, we do it through our budgetary process and then it's divvied up. All we're talking about now is how it's divvied up.

Going on to the railway lands, we've seen great criticism that this increase in taxes is now jeopardizing the development of the railway lands. As a Metro councillor, I'm not going to take the rap for the fact that these railway lands may not be developed. The city of Toronto and the railway have been in long and drawn-out debates for a long time. The reality is that far more important than the rate of taxation are the vacancy rates, and with the vacancy rates we've got in the commercial sector within Metropolitan Toronto, there's 15 to 20 years currently built that can be absorbed. You're not going to see them building those commercial properties. The industrial and retail sectors are in a similar situation throughout Metropolitan Toronto.

The only area where you're not seeing tremendous vacancies within Metropolitan Toronto is in the residential sector. If financing is not available for the railways to go ahead and build that portion of the development, that is the key concern, not what they're paying. Frankly, as a disincentive to allowing those lands to remain, an increase in taxation may very well prove to be most helpful.

Thirdly, on municipal parking lots, that section is currently under review. I am asking this committee, and subsequently the Legislature, to let us deal with that particular problem. I believe we can do it internally and I would ask you not to attempt to correct it at this time through this legislation. I think we can do it. There are a number of options available to us and they are currently under examination.

Touching on the third issue, hotels and tenants -- and this is just briefly -- the central issue for these groups is the rules that are within the provincial Legislature's bounds, not ours. Metro council is on record as requesting the province to examine and improve the method of assessments for both these categories. Those have been referred, as I understand it, to the Fair Tax Commission. I haven't had an opportunity to check out how they've dealt with it.

On issue four, that Toronto is different, this topic's been further fueled by its threat to secede, but it's based on a suggestion that the city of Toronto is suffering the lion's share of this depression, both economically and emotionally. I would suggest that perhaps they should make that case to the city of St Catharines today. Nevertheless, sticking to Metro, let me assure you that there are significant vacancies in built commercial and retail space all across Metropolitan Toronto. One telling fact is the breakdown by area municipality of our unprecedented welfare case load of 107,500 cases, and still growing, I might add.

The late-breaking bulletin that Ms Poole introduced, I would contend, is not completely accurate. The city of Toronto has a population of 27.9% of the total Metropolitan Toronto population by the 1991 census. They currently have 35.5% of the welfare case load within their area offices. Scarborough, which has 23.1% of the population, currently has 24% of the welfare case load. I would remind you that Scarborough used to have, consistently for the last 20 years, the lowest rate of unemployment by municipality in this country. We now have 24% of Metro's unprecedented welfare case load.

Let me just throw in a third fact. East York, the smallest municipality within Metropolitan Toronto by population, has the highest rate of welfare cases per 100 population, at 8.2. It's a little difficult to equate that for every 100 population they have 8.2 cases. One case is not one person. One case could be a mother, father and 10 children, and I don't have figures that can break that out, but there are 8.2 cases per 100 population in the borough of East York.

All of us across Metro are in this economic mess together. Just while we're talking about the city of Toronto, it's important to understand that 49% of the commercial sector in the city of Toronto is entitled to a reduction under this plan.


On the fifth issue, ungodly haste, over the last 23 years Metro has been grappling with trying to come forward with assessment. There have been 13 attempts made to this point in time. While this plan was developed over a seven-week period, at least the figures were first announced September 8 and we dealt with this issue on October 28. The time restraints placed upon Metro council were ones imposed by provincial timetables, not Metro-created timetables.

In conclusion, I wish to be frank. The basic rules that create the framework for this plan are currently provincial policy, and have not only been defended but advocated by each of the parties represented around this table here when those parties were in government. This plan was arrived at and supported by a clear majority of Metro councillors from all political persuasions. No issue has been more publicly debated in the past four years since the direct election of Metropolitan Toronto council.

The debate, often emotional and sometimes irrational, nevertheless was undertaken by a democratically elected and responsible level of government. This legislation before you will allow Metro to put in place a fair and workable compromise to put us on the road to full equity in our taxation base. Please approve this legislation. Don't second-guess us. Don't participate in a hypocrisy that demands municipalities must decide on reassessment and then turns it down because you as the province wish to exercise control.

Allow me to finish with an analogy. This issue is a tar baby. It's fine to look at it from a distance, but if you handle it, touch that creature, it's going to stick to you. This Legislature has more than enough issues on its plate. You don't need this one and you don't need to undergo the duress that many of us have through this process. Without mentioning names, one member of Metro council had to wear body armour for close to a month. Many of the councillors' children were under constant surveillance because of threats to kidnap them. I can tell you from personal experience that the lives of my wife and child were threatened directly to my face in front of witnesses.

I guess the last point I would like to make is that we're starting to watch the tyranny of the irrational. A member of your body, the Minister of Labour, yesterday experienced a fire-bombing of his constituency office. Thank God there was no loss of lives in the process, but as one politician to another, don't get into this. I wouldn't wish this on my worst enemy, let alone my friends, particularly in elected life.

The Chair: Thank you very much for your presentation and we'll go right to questions. I have Mr Owens, Mr Stockwell, Ms Poole. Again, perhaps I could just ask the members if we could keep our questions tight because we are in a bit of a time problem.

Mr Owens: Mr Cavalier, I'd like to thank you for your presentation. As we represent reasonably similar areas in Scarborough, I've had a number of calls from constituents requesting that I support the bill. Just a couple of questions: I'm a little bit confused about your thinking, and it's not only your thinking, but in terms of how the railway right of way section is revenue-neutral.

Mr Cavalier: The overall amount of money we take in remains the same. The rules of assessment by the Assessment Act detail that those right-of-way corridors be assessed according to properties adjacent to them. Frankly, what we are seeing, in my opinion, is the catch-up of 38 years of no reassessment in this process, and that's seeing the kind of impact.

Given the circumstances, we've made a political decision. I suggest that when the railways, Ontario Hydro or the pipelines, which are all involved in these kinds of corridors, when approached by the private sector, if they choose to lease land to the private sector, will charge market rates, and the zoning process then will have to be undertaken, depending upon the particular use. I believe there are some avenues for them to recover increased costs.

Mr Owens: We've had witnesses from CP Rail and from the Canadian transportation union that have indicated that there will --

Mr Cavalier: I'm sorry, I'm having difficulty hearing you.

Mr Owens: There's a lot of noise in this room, Mr Chair. I can hardly hear myself think.

The Chair: Yes.

Mr Owens: I'm not sure if it's the microphone or the volume.

The Chair: It has been harder to hear from that side.

Mr Owens: In terms of the deputations we've received from CP Rail and the national transportation union, it's their view that if the province allows this bill to proceed as is, with the railway right-of-way specifically not addressed, that there's going to be catastrophic job loss. Did they make that kind of representation to Metro council and what was the response from council?

Mr Cavalier: No. Actually, if I may make a personal comment, the railways or the pipeline companies have never had any difficulty finding me or my office when they've had problems. They did not make presentations to either the management committee, which I sit on, or Metro council at that time. As I said during my remarks, the isolation of this group of properties was not a development that took place between September 8 and October 28. It was actually adopted during the 1989 implementation plan. I can only assume that -- I won't impute motivation on that.

Mr Stockwell: Give me an example of the hypocrisy that you referred to in your statement.

Mr Cavalier: Specifically, I'm concerned about levels of government attempting to undertake a variety of deeds at arm's length, and yes, it's happening to each provincial government, coming from the federal government, and we've seen it happen from the provincial government to the municipal governments. That's one of the forms of hypocrisy.

Let me give you an example of the other one I find very difficult to understand in this process. When the school trustees in my community of Scarborough brought in 64% pay increases to themselves as an added item under "other business" at the end of their council meeting and the public found out about it, they appealed to the provincial government to intercede. The response was, "This is a democratic, duly elected government that is responsible at re-election time to come forward and we will not intercede."

While I respect that position -- I may not agree with it but I respect that position -- I have difficulties now, having been assigned the responsibility by the provincial government to make a determination on our reassessment, having gone through four years of public debate -- you know full well; we were shoulder to shoulder in 1989 on this issue -- having gone through four years of the most highly debated single issue in Metropolitan Toronto, that we now are confronted with the situation where there are suggestions that the government is not prepared to legislate everything we've asked for, and there are suggestions being made that perhaps this whole package should be opened up and the Legislature should be making modifications in the process.

I just have difficulty with that. Does that suggest I'm not democratically elected or responsible in a regular cycle of elections? I just don't know what message this sends forward. I think it's hypocritical.


The Chair: Mr Stockwell, does that --

Mr Stockwell: Yes, that's great.

The Chair: Ms Poole, a final question.

Mr Cavalier: I'd gladly respond to your question, but --

The Chair: No, it's Ms Poole.

Ms Poole: I'm going to make five one-line statements and you may choose to respond to any or all of them. The railway rights of way --

Mr Cavalier: Mr Chairman, I'm not sure --

The Chair: I'm sorry, I missed the question because --

Mr Cavalier: It's not a question.

Ms Poole: It will be.

Mr Cavalier: It's a series of comments that I may respond to or not.

Mr Stockwell: It'll end with, "Don't you agree?"

The Chair: Ms Poole, can those be short?

Ms Poole: I said they would be one line each. With regard to the railway rights of way, you said it is the province that must change the rules, which I agree with. However, I would ask you to comment on the fact that it was Metro that did not offer the railway rights of way a cap, which it did for other properties.

Mr Cavalier: Okay, if I may respond, I clearly stated that was a political --

The Chair: If they're going to be a series, can we get them out so that then you can respond to all of them?

Mr Cavalier: Okay. That just means that I'm going to have to write them down now.

The Chair: Ms Poole's going to go very --

Ms Poole: I'm going to go very quickly. Secondly, the railways told us, and certainly the last-minute events of the Metro council decision would lead us to believe it was correct, that they did not even know until after the fact, at the very last minute, that they were not going to be subject to the cap on the railway rights of way.

Thirdly, you've asked, for parking lots, let us deal with it. I would be happy to let you deal with it if there was some sort of guarantee that it would be dealt with. And that's the problem; you're asking us to pass legislation and trust that it somehow will be dealt with.

Fourthly, you mentioned about it being revenue neutral, which is quite true, and complaints that Metro was making itself rich. The complaints I heard were more in the line that you have allowed a shift between classes, which was not supposed to be one of the rules of the game of the reassessment.

Finally, you mentioned 49% of businesses in the city of Toronto were entitled to reduction. I would put it to you that the vast majority of those were very large businesses and the small businesses got hammered out of existence.

Mr Cavalier: Very quickly, let me see if I can respond. Railway lands, no caps: I did say in my statement that it was a political decision to not provide caps for those lands, and, as a politician, I will stand by that decision. Let me assure you that if I had my choice, if I could pick the implementation plan for reassessment in Metropolitan Toronto, this would not be my choice.

But I will tell you, a collective group, that's 20 out of 34 members, came together around this plan believing that fundamentally we could move towards fairness. They would take the political heat, if there was political heat, but they were prepared to go out and collectively sell this program because the greater good was being served. I don't apologize for doing that. That's a political decision. I'm a politician. I've been elected for 10 years now to make these decisions and that doesn't frighten me.

Saying that this is a last-minute process, I thought I had addressed this by suggesting earlier that this separation out, if you will, of these lands was not a creation of this round; it was done in the 1989 implementation plan. We heard nothing at that point and still heard nothing in the process.

I would simply suggest to you, though, if it was the responsibility of governments to seek out everyone impacted by potential changes that would impact their taxes, then I would have to suggest that perhaps you revoke the commercial concentration tax here at the province because there was never any consultation that was undertaken, either by those who were taxed or by those who were having their taxing power scooped in the process.

Ms Poole: The NDP is going to revoke --

Mr Cavalier: Allowing --


The Chair: Order, please. Mr Cavalier has the floor.

Mr Cavalier: I'm sorry, I have --

Ms Poole: That's deflecting the issue.

Mr Cavalier: No, that's not deflecting the issue. You made a statement. You asked me to comment and I'm responding.

The Chair: I'm sorry, we're going to have to move quickly here.

Mr Cavalier: Parking lots, and you are concerned about -- when I say, "Don't open up the legislation, let us deal with it internally," I suppose it's a question of trust. I can tell you that we have responded to the time frames and the rules that have been established by this House and its predecessors and we've always met them, and often the rules have changed from this House while we were attempting to do that.

I can only suggest to you, in a matter of trust -- I mean, I can't give you any assurance, but I can show you a track record Metro council and individuals within that council have undertaken. We've always produced and we've produced on time when that's not always been what we've received reciprocally.

The question of a shift between classes: That's an interesting perspective. We have significantly changed the shift between classes, but that was not a rule that was set down. The shift between classes was not a rule that was set down either by the previous government or this one. The rule that was set down was: "You pay for your protection plan internally. Don't expect a grant from the provincial government, as provincial governments in the past have done, to allow municipalities to implement." Other municipalities have received those grants. We were told that we must do it internally, and frankly this goes a considerable distance to eliminating those shifts between classes, to the tune of $170 million that was being shifted from the commercial sector to the residential sector to allow the zero cap on residential under the old plan. That is reduced to $20 million in the whole process and hopefully will be eliminated after this.

Finally, 49% of the commercial properties -- that's a fact. You can detail which 49% versus the 51%. I would suggest to you that 49% of the commercial properties are getting a reduction, and it's your assessment system that has determined where that goes.

The Chair: Thank you. As Mr Antonio Lopes comes forward for his presentation and as you get ready to leave, Mr Turnbull has a point of clarification.

Mr Turnbull: No, a very quick question just to confirm. You voted on a motion by Councillor Shea that the provincial government be requested to redress the current assessment that perpetuates inequities between home owners and tenants. The government hasn't done anything about this. Do I take it that you still want them to do something about this?

Mr Cavalier: That was the most recent. Yes, indeed I did vote for that. I've introduced those motions in council myself during the 1989 process and subsequent to our 1989 process, which I not only introduced but voted in favour of as well. The last piece of information I received was that those motions were going to the Fair Tax Commission and that there would be a response. I understand the Fair Tax Commission has reported. I will confess I have not had an opportunity to pick up a copy of that final report because I have been involved in other matters, so I don't know.

The Chair: It's not public yet.

Mr Turnbull: They're stalling the report until this legislation is passed.

The Chair: I'm sorry, we'll have to end there. Thank you very much for your presentation.



The Chair: I apologize, Mr Lopes, from the Metropolitan Separate School Board. If I could, to members, we are at 4 o'clock and we are behind. We're going to have to have questions with one and not multiples or we're going to be here until the wee hours of the night. I'm afraid I'm going to have to be a little more brutal about whether in fact in some cases we will even be able to have questions.

Mr Mills: Hear, hear.

The Chair: I apologize, but we've been trying, I think, to deal fairly with everyone and there have been some interesting lines of questioning and some people from different parts of the area we haven't heard from, but I just wish to underline that if we're to get out of here before 6 o'clock, we are going to need to adhere to a tighter schedule.

With that, Mr Lopes, welcome to the committee.

Mr Antonio Lopes: Merci. Bonjour, Monsieur le Président et tous les membres du comité. Merci pour la chance de venir ici aujourd'hui présenter la position de la majorité des personnes de la cité de Toronto, et aussi même plus spécialement, le système d'éducation catholique à Metro Toronto.

In my rusty French, I'd like to say a few words thanking you, Mr Chair and members of this committee, for an opportunity to present this case before you --

The Chair: Vous êtes le bienvenu.

Mr Lopes: -- merci -- because I do represent a bilingual board that is the largest one in the country, with an annual budget of $720 million. I am the past chairman of the budget committee and the current vice-chairman, and I had a startling revelation as recent as November 5, 1992, that was presented on market value assessment as a report to the budget committee. As a result, I'd like to bring the information before you.

First of all -- and I don't want to belabour what my colleagues have said prior to me -- I'm here to discuss the position against MVA as a result of the presentation that was made to the budget committee of the Metropolitan Separate School Board. I also am here as a representative trustee of wards 11 and 12 of the city of Toronto. I have serious concerns for my members, many of whom are blue-collar workers who are going to be hit very hard in their residential tax bases these days, especially as a result of the MVA possibly coming into place.

On the second option, which is the discussion of how this MVA will affect the separate school board, I ask you to note I'd like to discuss the comments for all the members here who don't have the report before them. I'd like to go through the report, discussing and presenting the report as is, prepared by my staff. Any specific details I will have to try to answer to the best of my ability, considering I do not have an auditing or accounting background.

The MSSB received the report from the Metro treasury financial services on October 6, 1992, showing the current assessment and proposed assessment, based on the factored 1988 market value assessment for the public and separate school boards and for their supporters. What you may note as your assessment, if you have the copy in front of you, is that we as the separate school board will see a decrease of $27 million of tax assessment -- that's $27,479,672 of tax assessment decrease -- whereas the Metro public, that is, encompassing all the Metro public boards, will see an increase of almost $122 million in tax assessment.

This is definitely a serious effect, and it will have serious effects on the Catholic school board, which currently is underfunded. We've had funding awareness programs all year round to present our problems, and we are currently in negotiations with the Fair Tax Commission to discuss possible changes in the funding system that currently we avail ourselves of.

Across Metro, we have that 56.5% of all property taxpayers would get a decrease. This hits us substantially. If you take a look down the list, 76.8% of the units in Scarborough would receive a decrease; 72.4% in Etobicoke would receive a decrease; North York, 63.3%; East York, 59% of the units would receive a decrease as a result of MVA; in York, 55.4% and in Toronto you would actually have an increase to 66.6%.

(1) It affects my ratepayers, especially those who are living in the area, who are mainly blue-collar workers who can't afford it, especially in the current recession.

(2) It affects the concerns that we have as a separate school board in terms of the overall revenue. I'll explain this further as we go on.

First of all, there will be no change in the relative differential between the residential and commercial mill rates, and as a result, the residential mill rate will retain the same 85% of the commercial mill rate. It is proposed that the Metro Toronto public school board and the Metropolitan Separate School Board will each set mill rates to cover their requirements as a proposal of this MVA change. Currently, the MSSB sets mill rates; the public school boards levy a dollar requisition, which translates into separate mill rates for public school purposes in each municipality.

One of the problems is that the date for submitting approved mill rates -- and this is really affecting our school board -- to area municipalities is recommended to be March 31 to allow for the increase in activity pertaining to the recommended phase-in process of capping. This would cause serious concern.

First of all, this would require the MSSB to set its mill rate on or before March 31 of each year, rather than the current practice of at the end of April. We've tried to meet the demands or the problems concerning ratepayers, concerning funding inequitability. We've attempted, by going out at the end of January and beginning of February, to respond to the concerns of our growing needs and the needs of the ratepayers of the separate school board.

This would only delay the process and effectively decrease the time we have to prepare the statements for the mill rates for the current year, which we so heavily depend on as a granting or money-earning, revenue-generating situation.

The current practice of the MSSB in requisitioning funds for municipalities will not change. Any method of capping or adjusting taxes for a phase-in period will be done at the municipal level and thus will be transparent to the MSSB.

With over 80% of the reassessment program completed in Ontario, no problems were brought to the attention of the ministries of Revenue or Education concerning the school board's share of assessment under reassessment. We also consulted with separate boards in the greater Metro area, which are all on reassessment, and were told that they had no knowledge of being adversely affected. But we are. They actually are being advantaged as a result of this reassessment.

Having analysed the report from the Metro treasury department, the financial services end of it, this is not the case in Metro. Because of the unique situation in Metro, several different factors were used with different classes of property, which resulted in a $94.4-million assessment increase over the current assessment.

Let me point something out. I've often heard -- and correct me if I'm wrong -- in the press that this will tend to maintain equity within our system. This will allow for disparaging results in various cities in terms of the amount that is paid out to be equilibrated across the board. In fact, this MVA will increase the assessment by $94.4 million. That's a 1% increase. It might not seem much to you, but it will seem quite a lot and substantial to those in need, especially those who can't afford to pay the increase in the MVA as a result of 1988 assessment value.

There are two major concerns for the MSSB. Our residential assessment under the proposed assessment has decreased by $47 million compared to the current assessment. Furthermore, this decrease results in a downward spiral adjustment to our pooling factor since pooling is based on our share of residential assessment. This report does not separate pooling assessment from total assessment. Therefore, the exact shortfall cannot be calculated. Our commercial assessment under the proposed assessment would increase by $19.6 million, resulting in an overall decrease to our MSSB of $27.4 million in assessment generated.

Based on the 1992 mill rates, our loss in residential revenue would be $11,253,210, and based on the 1992 mill rates, our gain in commercial revenue will be $5,520,928, for a total revenue loss of $5,732,282. Adjusting for grant increases which we will receive as a result of losses, the net loss would still be $1,454,854.

I want to give you sort of an analysis of the situation which is a little easier to understand. The reason we are in the Fair Tax Commission is to equalize, to maintain the school boards in Toronto as comparatively equal. However, that's not the case. We are there to try to increase the current amount of money we receive of the corporate tax base. We received approximately 9.5% of the corporate tax base here in Toronto, yet we have about 30% of the kids. This is not equitable. As a result, the Fair Tax Commission hopes to achieve equity.

We're questioning that at this point in time, but the problem exists at the MVA's coming in in January. We are concerned because this MVA will affect us, almost adulterate our position. As a result, if the corporate tax base increases, we will not receive that much money in an increase. But the residential tax, which our board so heavily depends upon, will be adversely affected. We need the ministry to look at this, if nothing more, and see how we will be affected and how the ministry will provide grants in order to stabilize our situation.

This means, first of all, that to generate the same tax revenue on proposed assessment, the MSSB as a unit, as a whole, would have to increase the mill rate by approximately 0.5 mills. It's 50 cents on every $5,000 assessment. It's a serious problem when our ratepayers who are generating revenue for us are seeing us increase our mill rates or having to as a result of MVA, yet the public boards, which are in a windfall, will be able to decrease theirs. I think there are ratepayers, 80% of whom are ratepayers to our board, who may choose to pay instead to the public board. That will effectively cause the demise of the MSSB financially.

The Ministry of Education calculates pooling factors for school boards. However, the amount of assessment-revenue loss is not known. What is known is that our percentage of residential assessment to the total residential assessment based on the proposed assessment values would decrease, from 20.5% to 19.39%, or a 1.17% differential. Therefore, a loss of revenue from pooling assessment would seem evident; that is, of course, based on the 1991 pooled assessment, the revenue loss net of grant would be approximately $150,000.


The report indicates a more advantageous position for the MTSB; that is, the Metropolitan Toronto School Board, the public boards as a whole in Metro Toronto. Their proposed residential assessment would increase by $119.8 million compared to the current assessment and their proposed commercial assessment would increase by $2.1 million. In effect, whereas we are decreasing our residential and yet slightly increasing our commercial, the MTSB is increasing its commercial and residential. So we are losing out, in essence. The MTSB is in a negative grant position and it has been for a while. Therefore, this would result in an approximate overall revenue of $34 million on average to the MTSB over our loss of $1.5 million to the separate school board.

To produce the same revenue base on a proposed assessment, they would, as I stated before, be able to decrease their mill rate by 2.3. That's $2.30 on every $5,000 assessment generated. That's effectively a large amount of money when you look at the overall system, and ratepayers, 80% of whom support our system, could take that as an indication to move from our system to theirs.

In Metro under the proposed assessment, the public school residential assessment increases by 2.9% and the separate school residential assessment decreases by 4.4%. As I said earlier, we are going to be seriously affected as a result of this, because we depend heavily not only on grants from governments, from your provincial government, but also on funding from our ratepayers and especially residential funding as a result of the inequity of commercial funding. We hope the Fair Tax Commission will be able to deal with this. Obviously, it won't by the time the MVA is to be implemented. As a result, I'm here before you today to demonstrate this disparity among the school boards.

I'd like to summarize -- and I won't take as long as my counterparts who have spoken earlier -- by saying that there is a recommendation requiring the setting of mill rates on or before March 31 of each year. This date would be difficult to achieve in view of the timing of the provincial grant regulation. Setting a mill rate, as a result, prior to the release of the current grant regulation could result in difficulties in budget preparation for the MSSB, especially for my committee, of which I'm currently vice-chairman.

Second of all, the implementation of the proposed assessment based on the factored 1988 market value in Metro for taxation year 1993 could result in a minimum revenue loss to the MSSB of approximately $1,454,000. That is based on the 1992 mill rates. As a result, in addition, based on the 1991 pooled assessment, a loss of approximately $150,000 in pooling would occur.

The MTSB revenue could increase by $34 million. To generate the same revenue, as stated earlier, would require us to increase our mill rates by 0.5 mills, whereas the MTSB would be able to decrease theirs by 2.3.

Our recommendations emanating from the committee in November, as chairman of that committee at the time, were that we advise the Ministry of Education of the possibility and the viability of this situation -- of the possible loss of funds, shall I say -- as a result of the 1988 market value assessment. Moreover, we sent letters to Mr Rae and to members of other organizations and legislative committees to understand that the MSSB will be adversely affected.

I am here before you today not only to speak on behalf of the ratepayers of the city of Toronto, wards 11 and 12 -- I'm sure of the majority of ratepayers -- mais pour toutes les personnes qui sont dans la cité de Toronto, en même temps que le système catholique qui est à Toronto. Il y a beaucoup de problèmes. Nous tenons à faire quelque chose pour les personnes qui sont catholiques and who are ratepayers in the city of Toronto.

Thank you, Mr Chairman. I will accept, obviously, cordially, any questions.

The Chair: Thank you. That's a very full brief and I regret that we aren't going to be able to have any questions, but you have provided a great deal of material and I know there's one Education critic sitting around this table who will undoubtedly want to raise some questions about what you have said.

Mr Perruzza: Mr Chairman, on a point of order: I think it's very important to get this on the record. Is he here in an official capacity via a board motion representing the board, or is he here as a trustee for the city of Toronto?

The Chair: Okay, I'll accept that --

Mr Perruzza: Please. You didn't read that into the record.

Mr Lopes: Right. I'll read this into the record. I am here as an official trustee of wards 11 and 12 of the city of Toronto and have discussed with the director of education that I will be presenting this to this committee. I am not here --

Mr Perruzza: As a trustee, but not as an official representative.

Mr Lopes: As a trustee, not as an official, no, because we have -- as a board motion, we have submitted this information to the members of Parliament and it would be redundant for me to do so.

The Chair: Thank you very much for your submission.


The Chair: I call Joan King and Paul Sutherland, who are making a joint presentation. Welcome, both, to the table. You've been very good. I know you've been sitting there for a long time and I apologize that we're an hour late. Please go ahead.

Ms Poole: Mr Chair --

The Chair: Very briefly; we really have a time problem.

Ms Poole: Could I ask the parliamentary assistant if we could have --

The Chair: Could we do that at the end of the submissions?

Ms Poole: Perhaps we could have something in writing about the previous presentation and whether this is the dilemma and how it might be resolved.

Mr Mills: I've taken note of the concerns expressed by that gentleman and the ministry will provide some written comments on that on Monday.

Ms Poole: Thank you.

The Chair: Please go ahead.

Ms Joan King: I'll start. I represent Seneca Heights at Metro council. The boundaries, so you'll know where we are: from Bayview Avenue over to Victoria Park, the 401 up to Steeles. It comprises two North York wards, wards 13 and 14, and Paul Sutherland with me is our North York councillor from ward 14.

To give you some indication of what this package means to the residents in our area, in terms of taxes going up, 13% of the residential properties will go up, 40% of the commercial will go up, and 18% of the industrial will go up. Of course, 87% would come down in their taxes, residentially, 60% of the commercial would come down and 82% of the industrial come down. So I think you will probably figure out which side of this issue we're on.

I just thought I would try to discuss a few myths and misconceptions that I believe have come up throughout this debate. The first one is that market value assessment is something new that Metropolitan Toronto is forcing on the citizens. That's just not true. The 1940 market values are what we have today. Our taxes are based on market value. I really relate to 1940 since I was born in 1941. Let me tell you that things have changed. I'm now a grandmother. Things have really changed and if you don't address that, if you don't keep it up to date, then you get into trouble.

I think one of the members asked, what is the impact? Just think, if you had a property and your taxes were $1,000 or if you had a property and your taxes were $5,000, and each year some government put them up 10%. For one that's $100, for the other it's $500 and then that gets compounded and compounded. So then the longer you leave it -- that's a lesson we've learned -- the worse the problem becomes.

Another myth is that the home owners in the city of Toronto will be forced to move to the suburbs where the taxes are cheaper. I ought to tell you a couple of personal stories. My tax is $6,500 plus a little for my bungalow, three bedrooms on the ground floor and two in the basement.

My son, a young doctor studying to become a surgeon, decides he's in Toronto city for a while and he's going to buy a house. He goes to Cabbagetown. The first house he looked at three weeks ago, on the market for $239,000, and the taxes, folks, are $649, period; that's it. So I asked him, "Well, that's a fluke." In Cabbagetown where he has looked in the last three weeks, they range between $1,000 and $2,000. I thought, "I've got to get the figures for sure," so I looked them up today just to give you an example.


A house at 138 Seaton Street's market value according to the 1988 assessment was $314,000. They are paying $1,300 in tax. If we were to go full way, they would be going up to $2,900, but we haven't said that. They're going to go up 10% in two years. They would be paying $1,430.

In our ward, the backyard is Highway 404. At 23 Baroness Crescent, with the 404 for their backyard, their house is valued at $314,000. They are paying $4,000. They would go down to $2,900, but no, we were not going to do all that. By the time we're finished this, they'll be paying $3,400. So at one house they'll be paying $1,400, the other $3,400. Do you really think they're going to run from Seaton Street up to North York?

Commercial property, restaurants: There's one at King and John, which I visit frequently because it's right next to Metro hall, Marcel's Bistro: They're paying $11,000, and with a 25% increase, they'll be paying $13,000. Up in our community, Consumers Road and Victoria Park, George's: He pays $18,000, and when we're all finished, he's going to come down to $16,000. Let me tell you, the guy down there at King and John has the Royal Alex, the symphony, Metro hall, the SkyDome. At noon hour and at night it's full. Up at Consumers Road and Victoria Park it's not full.

Another myth: It costs much more to service the suburban properties. I mean, they're huge properties; it really costs a lot to service them. Of that tax dollar, 75% is going into education and social services. The water and sewage are on a separate rate. So we're talking about maybe the TTC service? On Bayview Avenue, in rush hour, one bus every 20 minutes; that's the service. I think we have to be realistic about it. It really doesn't cost much more to put a road up in the suburbs than it does downtown.

Another myth: Market value reassessment's going to cause suburban sprawl. Quite the reverse. Those properties on Yonge Street that have been reassessed and have a significant increase are going to have to address it. Instead of from Eglinton down to Davisville on Yonge Street having one little store with maybe one flat on top of it, those are going to have to change. We should intensify; that's where we should be having our population growth. And yes, they should have three or four apartments on top. That's what will happen, because the property values are going to insist that kind of intensification happens.

You all know old Willowdale, close to Yonge Street: huge properties with little houses. That can't last any more. We need to have in that area the kind of town house development that should be there.

If you really want to be concerned about urban sprawl, look at how you manage to grant the education in York region and Durham and Peel. That's where the big costs are, and they're getting super grants and Metro isn't.

There's another myth that Metro council didn't listen to the public. We sure did listen. We listened very carefully and we heard the concerns and we responded. What we came up with was a package that said, "We're going to phase in, and we're really going to keep that increase under control, 10% for residential, 25% for commercial and industrial." That was a real response.

We also said, "We'll try to keep it within the classes." That's why we can't deal with the railway lands. In that class there is nothing that's coming down, so there's nothing to help remediate the increases. We did shift, and maybe we shouldn't have. To protect the residential, we did shift $20 million out of commercial to help the residential. But it's an interim reassessment plan. We are anticipating some good reforms coming out of the provincial government. We hope they will, but we know it takes a lot of time.

Please look at the paper I've put in front of you carefully. People are not happy with what we've got. Look at it. In the city of Toronto in 1987, properties with a total value of $149,000 were under appeal. Six years later in the city of Toronto, $2 billion in property value is under appeal this year. Across Metro this year, $4 billion in property value is under appeal: 29,000 units. Within the city of Toronto itself, there's a backlog. Your assessment office has not been able to process them. There's a backlog of 14,000 in the city. I asked the treasurers of each city, how much money are we going to lose this year from appeals? Their answer to me was $67.5 million. That just goes back on, in that inequitable system we already have.

But please keep these figures in your mind. We cannot postpone this. We cannot delay it. We have to take that step forward, because your assessment office can't deal with the appeals. They cannot justify figures based on 1940 values. They have to have them updated. That's the one thing that will happen: They will be updated. Then, any appeals will have to be really specific as to whether that was right in 1988, not 1940, which they can't defend.

I urge you to put it on our backs. We accepted it; we did it. Just let it finish. Continue to look at your reforms; get those reforms in place. But in the meantime, this is the first step, and it's a step in the right direction.

Mr Paul Sutherland: Mr Chairman and members of the committee, I'll be very quick. Councillor King was kind enough to let me tag along with her time, so I want to use just a small part of it.

I brought forward a motion to North York council a few months ago to reverse its previous decision in opposition to MVA and support market value assessment. I was pleased that Metro council did adopt this plan. It was a very courageous step, and it's a good one. Perhaps it didn't go as far as what we'd like to see in North York and Scarborough, because we feel we should have been even further towards real market value than the compromise.

Certainly I've been impressed with the No Way MVA campaign. If we had adopted pure market value assessment, I can understand why they'd want to be here looking for a compromise. But it's an incredible compromise that's been reached here, where there have been amazing benefits given to those who would have been most seriously impacted by the negative aspects of this. Quite frankly, I think their position now is blown way out of proportion.

We've had the same situation in North York. There are people in the city who are going to be going up under MVA, and there are small businesses along Yonge Street that are going to be hit by MVA. In fact, there's one restaurant very close to city hall where we are whose taxes are going to go from $5,000 a year to $25,000 a year if it were fully implemented. Of course, they were in a panic about the $20,000 property and business tax increase.

However, two and a half miles along to the east of them on Sheppard, there's a business there -- Councillor King just referred to another very similar restaurant -- which has lower prices for its meals because of its location and which is already paying $25,000 a year in property and business taxes. You have to remember that there are people and businesses out there not only paying their fair share but considerably more than their fair share.

This restaurant is paying $5,000 a year. Let's say we gave them the full impact. What we're talking about is a salary or half a salary or a third of a salary, depending on the type of business it is, and look where they're located. The city's constructing a performing arts centre across the street that's going to bring $100 million in benefits to that area. You have to remember that when you're located downtown, near the Pantages Theatre and different places, businesses there are benefiting from those locations and therefore they can usually get higher prices for their food and they are usually busier than other restaurants. And those other restaurants and small businesses are already paying those kinds of taxes.

Under this plan, that $5,000 rate will go up by $1,250 over three years. That is not a dramatic increase, nor will it put anybody out of business; that in itself will not put it out of business. The previous government's change in health tax raised the taxes for that same business considerably more than that. It would have been probably in the $5,000- to $7,000-a-year range. This is not the tax that's going to put them out of business. It's simply not fair for small businesses and those who are paying considerably less tax than anybody else in a comparable property to complain about this compromise. There's no merit in it, no basis in it.


There's an argument that it's the wrong kind of system. I've heard the argument at council. It was full of people opposed. There is an argument that we should have a different kind of system. By all means, explore it and look into it, but adopt this, because this moves you at least somewhere fairer than where we've been. And when you're moving on a process of fairness, if you want to bring in something over time -- after all, the assessment aspect has been with the province for over four decades now. But before you took it over, Metro was moving it up regularly every four years. You have it, you've let it go that long, and now here's Metro coming back, saying, "Look, we are going to solve the problem." So I don't think you should tamper with it. They've done an incredible process to get that going.

I want to point out something else too. There's been a lot of talk about the recession and the impact that has on small business and that this is the wrong time. It's true that the recession's there and it's impacting on everybody, including the businesses that are already paying higher than their fair share of taxes or even their fair share of tax.

I know of many businesses right now -- I can tell you of one in particular that just got a 10-year lease from a landlord with four years free; a 10-year lease, four years free. What that means is that their cost of doing business has dramatically dropped because their rent has dramatically dropped. If their taxes go up, which is at the maximum 25% over a five-year period towards a market value assessment, many businesses have already achieved substantial reductions in their rental costs from the landlord because of the economy itself. So I turn the argument around that this is probably the best time to implement the compromise plan Metro's brought in.

I'll leave it at that. I would encourage you to support what's there and not to interfere with what Metro's done, because it is a very, very good plan and one that was very difficult to work out.

The Chair: Thank you very much for your presentation. Again, I regret that we don't have time for questions, but there was a lot of meat in there and we'll look at that carefully. Thank you very much.


The Chair: I'm now going to call Mr Paul Christie. On your schedule it says John Adams, but there's evidently been a skilful trade, so Mr Christie is coming, I don't know, on waivers or for future consideration or something. Mr Christie, welcome to the committee, if you'd please go ahead and make your submission.

Mr Paul Christie: Thank you, Mr Chairman. I'm here, I suppose, in a similar role to many of my colleagues from Metro council, particularly from the city of Toronto, where the impact of the proposition that's before you is greatest.

I would hope that the members of the social development committee and the Legislature, for that matter, keep their eyes on the ball in term of what's important in the current context, the current economic context in particular.

It strikes me that what this community requires at this point in time, as do all communities, is a significant effort at economic development. It astounds me that the Legislature would be giving consideration to an outrageous proposition as this put forward by Metropolitan Toronto which really acts to the significant detriment of my constituents, particularly commercial constituents, in terms of their ongoing viability.

I represent a number of strip commercial business improvement areas, some of them that I suppose many of you would know, the Beach in particular, where by virtue of the proposed increases, virtually everyone will experience a 25% increase in their commercial property taxes over the next three years as well as their businesses taxes.

Notwithstanding the comments of the previous speakers, who said it's not this tax that going to put them out of business -- that it may have been the health tax or it may have been the GST or it may have been the PST or it may have been a whole range of taxation measures, it may have been the recession itself or a number of consequences of actions beyond their immediate control -- the fact of the matter is that all these things compound one another and at some point something is going to put them out of business, whether it was the 5% in 1995, the 10% in 1994 or the 10% in 1993.

Mr Perruzza: The GST.

Mr Christie: Absolutely, no question. I agree with you. All those things compound, and this is another compounded tax, another 25% that you're taking out of the pocket or, for that matter, Metropolitan Toronto is taking out of the pocket of the small businessman.

In Metropolitan Toronto, or the city of Toronto more particularly, when you take the money from the commercial sector in large measure and pass it on to residential constituents, you're not going to have offsets in terms of economic development. The individual job that this 25% increase in tax represents to a small businessman in my ward is not going to be replaced when you give 5% or 10% to a residential constituent in one of the other area municipalities. I think that's inescapable. I hope you would recognize that there is a very significant detriment to economic development through this initiative.

The other thing that's happening is that there is a very punitive burden being assessed on people for whom the opportunity to address it by way of increased revenue is frankly impossible. I'd like to refer to a number of organizations throughout Metropolitan Toronto, all of which have increases in excess of 25% and by virtue of that will have 25% tax increases over the next three years.

The Black Creek Community Health Centre would have a 47.25% increase, if full market value were to be instituted; the Kids Say No Drugs Organization in North York, 113% increase; Epilepsy Ontario, 53.96%; the North York Crisis Pregnancy Centre, 237% increase; the Ontario Humane Society, 175%; East Metro Youth Services, 39.9%; the Canadian Cancer Society in Scarborough, 928%; the Canadian Macedonian senior citizens centre in the borough of East York, 59.6%; Junior Achievement of Canada, 344%; the Lakeshore Immigrant Aid Centre, 68.49%; the Friends and Advocates Centre in the city of Etobicoke, 32.9%; the Navy League of Canada in York, 180% increase; the Eritrean Canadian Association, 46%; the Boy Scouts of Canada in the city of York, 68%; Tools for Peace Inc, 123%; the National Ballet of Canada, 176%; the Academy of Canadian Cinema, 425% -- and the list goes on and on.

I know it's trying to listen to all the names, but the fact of the matter is that all these people will be receiving increases in the magnitude of 25%. All of them are recipients of grants from Metropolitan Toronto. I sense that most of them would be recipients of grants from the province of Ontario. By virtue of this initiative, there is no offset short of coming to us and to you for money to make up these taxes. I don't think any of us, in rationalizing what we do each day, would be proud to say that we're proposing to increase the taxes of Kids Say No to Drugs in North York.

I hope, Mr Chairman, that the members of your committee would not only give consideration to amending Metropolitan Toronto's proposition in a way that protects people who have no protection for themselves, but would keep their eye on the ball in terms of economic development, because that's the game we're playing. The game today is not scoring a touchdown for our constituents in terms of reducing their residential property tax, because the fact of the matter is that if we continue to add punitive burdens to the commercial sector, those residential taxpayers are going to pick up the slack and the consequence for them is going to be much greater than if we had a balanced system, a system that reflected some basis of user pay.

I know that previous representations before your committee have considered alternative forms of tax and I really hope that when you address this it is a matter of economic development, what's in the continued interest, not the parochial political interest of people who want to assure their re-election by giving a 10% reduction to their residential property taxpayers.

With that, I close my remarks. I thank you for the opportunity to be before you. Unfortunately, I don't have a written submission at this point, although I will make it available to Mr Arnott prior to the close of the committee's procedures.

The Chair: That's fine. Of course this will go into Hansard as well, so we'll have those remarks. Thank you very much. Again, I just regret that because of the time we have to move on.

Mr Christie: I understand. Thank you.



The Chair: I call now Peter Tabuns. Welcome to the committee and please go ahead.

Mr Peter Tabuns: I want to begin by saying that I understand from personal experience the fatigue that sets in after listening to hours and hours of deputations, so you have my sympathy.

I'm sure that you've heard many eloquent presentations on the benefits and losses that arise from the imposition of market value assessment and I imagine that a number of you have probably gone through market value assessment in your own communities. Some of you may be facing a second round of reassessments later this decade. You're certainly aware, then, of the wrenching impact MVA can have on a community.

The city of Toronto has been a symbol of prosperity in this province for a long time and I don't think that it's going to generate much sympathy in the rest of Ontario, particularly from the areas that have already gone to MVA. So I'm going to speak to you today not to ask for any sympathy for the city of Toronto but to present the case for your interest in blocking market value assessment or for extending the proposed caps to all classes of property.

Simply put, the imposition of MVA, even of this interim plan, will have repercussions throughout the GTA and perhaps throughout the province. In light of Metro's failure to carry out a full economic analysis of the impact of this move, we are heading into risky territory. Essentially, you will be asked to make a decision that throws the dice for the economy of this region and this province. Canada hasn't done well recently with dice-throwing.

There's no question that the direct impact on residents of the city of Toronto will be greater than on other people in the region. However, people who work in Toronto come from all over the GTA. Every morning and every evening, buses and cars on our roads and trains on our rail corridors are loaded with people who make their living in Toronto. These are the people who bring wages and salaries home to Oakville, Hamilton, Oshawa, Whitby, Newmarket, Mississauga and elsewhere that help fuel those local economies. The devastation or undermining of the Toronto economy will not be some remote event for the people of the GTA who work in Toronto; it will be a direct hit on their wallets and on the economies of the people who may not consider Toronto home but who do consider it their workplace.

The first point that I want to note will be the impact on the potential development in Toronto's railway lands. I gather that you've heard presentations on this in the past. As our mayor has said, development on 90 acres of downtown Toronto will be imperilled by this action.

The demand that would otherwise exist for steel made in Hamilton, for instance, for aggregate, for paving material, will all be put into jeopardy. Direct jobs that would be generated in this region for construction workers and for manufacturers will be at risk.

There's no need to remind you of the employment problems that face our workforce in this region. Action to reduce employment and to reduce demand in this area will not be well received. Your responsibility to provide economic opportunity for your constituents will not be well served by taking action that will jeopardize this development.

The film industry in Ontario is centred in Toronto. This industry, according to our economic development division, brings hundreds of millions of dollars a year into this region. Currently, the industry is operating at capacity and, like other regional industries, employs many people from outside Toronto.

Toronto's film studios have been successful in attracting American productions for a number of reasons, not the least of which is that there's been a concerted effort by the actors' union, by the technicians and by the studios themselves to freeze prices, to be able to guarantee Hollywood producers a flat line for a number of years. They've been successful at doing this, and over the past few years obviously their efforts have paid off in terms of good business. However, we're just about to see very significant tax increases for the studios on Eastern Avenue in Toronto that provide the backbone for film production in this city. This is where film crews go after they've done their location shots in the areas around Metro; they come back to those studios.

The question we have to ask ourselves is, will those studios survive? Will they be able to pass on the costs without driving away foreign filmmakers? Will people throughout the GTA who depend on the film industry suffer increased unemployment if the studios become uneconomic and no longer function as a magnet to pull new business into the region? Nobody knows. As I've said before, no economic study was done on the impact of the plan. Once again, we are gambling with the economy and jobs of this region.

Throughout Ontario, businesses and residents are reeling from the effect of high electricity rates. Governments and businesses are looking at rates that are making Ontario uncompetitive in comparison with surrounding jurisdictions. Surely we're all concerned that hydro rates not be raised unnecessarily.

Unfortunately, the imposition of MVA on Hydro properties will further burden the utility and the ratepayers not only in Toronto but across the province.

Earlier in November I saw a preliminary report indicating that the extra $60 million a year that Hydro will be paying could result in increases estimated at 50 cents per household per month across Ontario for residents -- not a lot per household, that's quite true, but no calculations have been done to show what the impact will be on businesses and on industry.

In supporting MVA, MPPs will be voting for higher hydro rates for their constituents at a time when their constituents have made it very clear that they want a break on these increases.

Earlier this week, our mayor reported to you that the increase in taxes for the railway corridors, $13 million, could drive up fares for GO Transit riders by $240 per year per rider.

There are a number of possible outcomes to this particular development. On the one hand, GO Transit could swallow the increase and not pass it on to passengers. The question would then be, who picks up the tab? Will it result in layoffs at GO to balance the books? Will it mean pressure on the provincial treasury to put more money into the operation to cover this debt? Thus, everyone in Ontario gets to further contribute to financing mass transit in Metro Toronto. I don't think that's a popular idea outside of Metro. Job loss, pressure to increase the deficit, higher taxes for the rest of Ontario: These are not pleasant alternatives.

On the other hand, the increase could be passed directly to commuters from around the GTA who travel into Toronto every day. What will they say about their provincial politicians who allowed a bill to go through that drives up the cost of their getting to work? For many commuters, this may be the deciding factor in switching to auto transportation. It wouldn't take many riders to switch to make our already heavily travelled roads into something more like parking lots and to make mass transit even less economical.

The essential points I want to make are these:

One, the imposition of MVA in Metro Toronto will mean a transfer of funds not only from Toronto but from the GTA and the rest of Ontario to the suburban areas of Metro Toronto and, as councillor John Adams will outline later today, also to some of the biggest corporations in Metro.

Secondly, MVA will undermine employment for the hundreds of thousands of people in the GTA who depend directly on the businesses in the city of Toronto for their livelihood.

Thirdly, taxpayers outside Toronto who care very little about whether or not Toronto gets hit with a big tax increase will care about the spillover effect on their hydro rates, their rail fares and their jobs.

Lastly, we don't yet know all the impacts of MVA on the regional and provincial economies. Every day some new impact of the tax is identified. A decision to proceed with the plan is a gamble with our economy at a time when people want certainty and relief from the difficulties they're facing.

I urge you to stop the plan. If you're not able to or not willing to stop it, I urge you to impose the caps that have been proposed on all classes of property so that you can mitigate the impact of this plan on your voters.

The Chair: Thank you very much for your full presentation, and again I regret that time is of the essence at this point.

Mr Tabuns: I understand.

The Chair: We appreciate your coming here today.



The Chair: I now call on Steve Ellis. For the others in the room, we'll have Steve Ellis and then John Adams and then Wanda Liczyk. We again appreciate the fact that you've all hung in. Mr Ellis, if you would, please go ahead.

Mr Steve Ellis: Mr Chairman and committee members, I happen to live in and represent an area of Toronto. I'm on Toronto city council with ward 9 in the city of Toronto. This is a little plot in Metropolitan Toronto that by and large is indicative of many areas in this city. A large portion of the residents of ward 9 are working-class people. They've worked long and hard to pay for their homes. The businesses within ward 9 are small ma-and-pa operations for the most part, with some small industries and some bigger commercial enterprises, but we're not talking about major, blockbuster bank towers like downtown. This is just a typical neighbourhood that I'm sure you people represent in your home ridings.

It has been suggested here and elsewhere that the residents and business owners in the city of Toronto are not paying their fair share within Metropolitan Toronto. The solution to this problem, some say, is to determine the fair value of homes within Metropolitan Toronto and then determine municipal taxes based on these figures. With that in mind, provincial officials set out to find those figures and, somehow or other, they came up with this collection of figures. This is for ward 9 in the city of Toronto. Somehow or another, these figures are supposed to represent the value of homes in my area. Some are accurate and many are not accurate, but that is what our assessment is going to be based on.

Some of these figures are so far from reality that I'm surprised that this book, the Metropolitan Toronto run for the whole city of Toronto, isn't up for a Governor General's award for fiction, because quite simply they've missed the mark on many properties. Unfortunately, that will have to be the reality for the next number of years while people try to appeal their assessments.

Generally speaking, the residents in my ward face more or less the same problems that the people throughout the city of Toronto face. Unlike the suburbs, with their more-than-generous house lot sizes, the houses in my part of the city in particular suffer from a chronic parking shortage. The smaller Toronto lots in my area do not allow for large driveways. They don't allow for a lot of parking. They don't allow for a lot of activity that many people in Scarborough, North York, Etobicoke and indeed Oshawa and perhaps Sudbury and other places are able to enjoy on their larger lots.

My own home, for instance, has a 15.5-foot frontage on an older street. I have a post stamp front yard and a post stamp backyard. The argument goes that a home the size I have on a 15-foot lot doesn't draw the same amount of services that someone's house on a 45-foot lot would have. But I'm not here to reiterate; I'm sure a lot of other people have already made that point.

This time that's allotted to me is a short amount. I could go further into detail with the stresses that we face living in an inner-city and an urban setting. But the point that I'm trying to make here, and that many other people before me I'm sure have tried to make, is that the city of Toronto within Metropolitan Toronto has been paying more than its fair share of taxes for a number of years.

The people of Toronto may take credit for providing a lot of the tax funds that built most of the infrastructure of some of our Metropolitan Toronto partners. Indeed, in 1953, when Metropolitan Toronto was formed, large areas of what is now Scarborough, Etobicoke and North York were farmers' fields. Where did the money come from to pay for their schools, sewers and streets? It came out of the good old city of Toronto.

I get a little bit irritated when I keep hearing from the burbs that the city of Toronto has been ripping off Scarborough or Etobicoke for years and years, when the fact of the matter is that if it wasn't for the city of Toronto we'd still have fields there.

Mr Perruzza: That's called history.

Mr Ellis: That's reality, factual reality. Some would say it's better off having fields there.

In any event, Gordon Mills, the parliamentary assistant to the Minister of Municipal Affairs, David Cooke, stated unequivocally less than a week ago: "Metro will not end up with full MVA by default. Nor can Metro move to full MVA by itself." By implementation of this plan without amending the point-of-sale provision, this will lead to full MVA for a large number of homes throughout my area and other parts of the city. Quite frankly, the minister and the minister's parliamentary assistant can't have it both ways, to quote the honourable Dianne Poole. It appears that this is what this government's trying to do, have it both ways, and you just can't have it that way.

Another historical note: The honourable member Mr Perruzza said, "That's history." Not a lot of people know this, but the work of bank robbers helped to spur on the drive to bring Metro into being in the first place. Apparently the Boyd gang and other gangs back some years ago, some ingenious thieves, would rob a bank in East York and then would use the getaway route to get them into Toronto or what was Scarborough. They would cross jurisdictions and it would cause difficulties for the little police forces, so there was terrible confusion. That was one of the rationales for maybe its being better to have a Metropolitan Toronto police force to police the whole area.

It's interesting enough, but this same formation of Metro which was, by this bank robbery -- it's quite ironic that now this new-sanctioned tax robbery committed against Toronto by Metropolitan Toronto may lead to the breakup of the Metropolitan union. I find that quite ironic. Indeed, many of us feel overgoverned and many feel that Metropolitan Toronto has long outlived its usefulness and it's time perhaps to look at disentanglement and look at other areas to deal with this massive problem.

I would respectively submit and seek that this government show some leadership and invoke true tax reform in Metropolitan Toronto and not this abomination that's just a disguised form of market value assessment.

Thank you very much.

The Chair: Thank you very much, Mr Ellis. As one who remembers the Boyd gang as a kid, it's good to see those historical references. Thank you.

Mr Ellis: Thank you for the courtesy here. I've had much warmer receptions at Metro hall, and I thank you all for your decorum here. I did feel the oppression of Metro hall --

The Chair: Thank you very much.


The Chair: John Adams, please.

Mr John Adams: I thank you for the opportunity to address the committee. I'd like to say that I am a member of Canada's tiniest minority group, someone who was born and raised in Toronto who is still living and working here and proud of it.

A year ago I was elected to serve on Toronto city council. I've been thinking about the best use of the 15 minutes available to me, and I am going to do it this way: first, to provide a context by pointing to an interview with Premier Rae, which is a front-page story in today's Toronto Star; second, to use, with the assistance of the media services of the Legislature, a videotape recording of comments made by another proud Torontonian and noted author and urbanologist, Jane Jacobs, who is travelling overseas at this time and therefore cannot be here, and who is also one of my own constituents; third, to offer reasons why the province should not act merely as a rubber stamp, perhaps the most expensive rubber stamp in the history of Ontario, and should consider instead the Metro MVA plan on its merits or lack thereof; finally, to identify the really big winners under the Metro council/Ontario Ministry of Revenue version of MVA.

First, today's Star reports as front-page headlines that Premier Rae is "Facing Tough Choices" and "Taxes to Rise, Rae Warns." The story quotes the Premier saying, "You have to make sure that the taxes you introduce don't slow the economy down and don't discourage investment and don't discourage economic activity." I agree with Mr Rae on the principle that taxes and tax policies are very important to the economy.

Now let's hear from Jane Jacobs, who is the author of Economy of Cities, Cities and The Wealth of Nations, and The Death and Life of Great American Cities. This videotape was taken in the Queen's Park media studio at a news conference held approximately two weeks ago by a new and growing non-profit organization called Save our City: Stop Market Value Assessment, of which I am a founding director.

Now for Jane Jacobs.


[Video presentation]

Mr Adams: I have a couple of other points to make, but I just want to mention that at this news conference Colin Vaughan, a political reporter well known to everyone in this room, asked a rather interesting question about the fact of these public hearings starting, and he stated an intention of Minister Cooke to have it over and done with in a couple of weeks and the law would be in effect before the end of this calendar year. Mr Vaughan said: "What are we going to do? What are these people at this news conference proposing to do?"

I'm filling in about 30 seconds while the media technical people in the studio are doing a fast-forward to the moment where Jane responds. If I have my visual cue signals right, I think we can now roll that answer to Mr Vaughan's question.

[Video presentation]

Mr Adams: Thank you in the media studio.

I thought you would all want to --


Mr Adams: That's right. The other thing I want to say very briefly is some additional reasons why the Ontario government and the Legislature, this committee, should not rubber-stamp the Metro interim market value scheme. I think through these hearings this committee and ministry officials and Metro officials are learning about some of the surprises and unanticipated consequences of the half-baked Metro scheme cooked up as a last-minute political compromise. We are all discovering more negative implications almost daily.

Let me tell you about another one. This concerns the full MVA tax hit proposed when a family buys or sells a single-family home or a duplex. Metro says it will provide one exception for point of sale if the sale results from the death of the owner or spouse of the owner. This is a decent, humanitarian intention.

But what about the implications when there is a marital breakdown and the family assets are, under our law, to be divided equally? What are the implications when the matrimonial home is to be sold as part of an equal division of the family assets in the case of a divorce or a separation? The full MVA tax hit will reduce the value of such a home, and both the man and the woman, and any dependent children, will be the poorer for it.


My final point, if time permits, Mr Chair, is that we've heard a lot earlier on. I got sick and tired of just hearing about losers under Metro MVA and I frankly smelled a rat. So I asked the computer people at the city of Toronto to run the tape in a different way, once we finally got the tape. I said, "Give me the list of the winners." I have in my hand, by area municipality, the list of those people and organizations who stand to gain more than $25,000 by way of tax decreases upon full implementation of Metro's MVA.

I'd just like to say the biggest winners are not the residents of certain suburbs who have been led to believe they can expect tax decreases of $500 a year or more. This computer printout shows that the single biggest winner is located in downtown Toronto at 290 Yonge Street, where the T. Eaton Co expects a 44% tax decrease, albeit a tax decrease under full implementation, or a $4.2-million decrease on one piece of real estate, and the Eaton phenomenon is true in Scarborough, it's true in Etobicoke, it's true in North York. The Yorkdale shopping plaza in the good city of North York is owned by a real estate developer known as Trilea Centres Ltd, which is, I understand, a joint venture of Trizec and Bramalea companies.

The Trilea offices at Yorkdale pay this year, according to the Metro tape, approximately $388,900 in property taxes. Under the MVA scheme, if fully implemented -- granted, based on the Ontario Ministry of Revenue methods and statistics -- these Trilea offices will pay only, are you ready, $18; from $388,000 to $18 a year according to the Metro-Ministry of Revenue tapes, on those offices, their corporate and their mall management offices.

What is really going on, with all due respect, under the Metro council-Ministry of Revenue interim MVA scheme?

The Chair: Thank you very much for your presentation and also for the tape of the interview. I now call our last witness for the day --

Mr Stockwell: There are no questions?

The Chair: No, I'm sorry. We're really --

Mr Stockwell: Not even a brief one?

The Chair: Many have asked and if we get started, I'm afraid we're in trouble.


The Chair: Mr Adams I'm sure will be around.

Mr Stockwell: I just want to ask the councillor if he's read Jane Jacobs's book and subscribes to all her planning theories, because I have a few that I'd be happy to put forward.

The Chair: I'll let you two discuss that later, but I must call our next witness.

Mr Adams: I agree with her on this point 100%.

Mr Stockwell: There are a whole bunch I'm sure you don't agree with.


The Chair: If Wanda Liczyk could please come forward, and please correct me if I did not pronounce your name properly.

Ms Wanda A. Liczyk: It's Wanda Liczyk.

The Chair: I'm sorry.

Ms Liczyk: Nobody ever gets it right at North York; they just call me Wanda.

The Chair: At this late hour, that made me almost think of a film, but I won't get into that. I want to thank you for coming. I know you've been waiting patiently because we are running a bit late, but we do appreciate the fact that you took the time to come down and make your presentation. Please go ahead.

Ms Liczyk: Mr Chairman and members of the committee, my name is Wanda Liczyk. I'm the commissioner of finance and treasurer for the city of North York, which is the second largest city in the Metropolitan Toronto area that's going to be affected by market value. I'm here basically out of a sense of frustration and I'm looking for this committee to seek some fairness and put some certainty into the bill and to eliminate some bureaucracy.

I have a written brief that I had faxed to the clerk a couple of days ago, which I believe is either being distributed or will be so. I'm not going to go and read every single line of the brief; I just want to sort of highlight for you what some of our main concerns are.

There was a task force that was set up almost two years ago of all the area treasurers to study implementation of market value assessment. For the last six to eight months we've been asking Metro staff and provincial staff for draft copies of the legislation so that we could have a chance to read through it and make some comments because the area municipalities are the ones who are actually doing the tax billing and collecting. Basically, we know all there is to know about sending out that rotten little tax bill that everybody loves.

We did not receive a draft of the legislation until Tuesday, November 10, and we were given 24 hours to make comments on this legislation, which at that time was 45 pages long. Unfortunately, that was not enough time, I believe, to really give this bill a lot of due consideration, because it will be affecting quite substantially how we're going to be doing business in the next five years.

I am a resident of the city of North York. My taxes go down $100 and the city of North York is actually in support of market value, so my comments are not in any way to give support to the bill, but I'm simply just addressing some administrative issues. My comments are primarily related to some financial issues that are going to affect the area municipalities if the legislation goes through as it is before you. I'd like to focus my comments on three areas: payments of taxes, payments in lieu and payments of these abatements and surcharges.

On the first item, payment of taxes, what I would urge the committee to consider is changing some words in certain sections of the bill either to allow negotiation of the levy due date setting process between Metro and the area municipalities or else to firm up in the legislation what the current arrangement is. Up until 1989 the area municipalities worked under a different scenario of payment dates. In 1990 Metro council unilaterally changed the way we were remitting taxes to Metro and at that time put forward a bylaw that was actually saying we had to give them 100% of their money 10 days after our due date, regardless of whether we had collected 100% of their share or not. They had further in that bylaw suggested that the next year be moved to five days and then to one day after the due date. In the spirit of compromise, I guess, we had arrived at informally a 10-days-after-the-due-date scenario. So I'm asking this committee either to put some wording in to allow negotiation of those due dates or else to put in the legislation the current practice of 10 days after the due date.

I must remind you that we don't collect all the money before we're remitting it to Metro and the school boards. We're giving them 100% before we collect it. I can tell you right now the city of North York has about $67 million in realty taxes outstanding, and that's just 1992 taxes outstanding. But Metro and the school boards have gotten 100% of their money, so we're the finance company in the whole process.

The other issue on payment is things called payments in lieu of taxes. Instead of taxes we're getting grant money from the province and from the federal government. The market value assessment plan that's in this bill provides that we have to share those payments with Metro and the school boards. The wording in the bill requires us to pay 25% at the end of March, 25% at the end of June etc.

Again, I must bring to the attention of the committee that those payments are not received in any regular format at all. They kind of come as they come. The bill that's before you is actually saying that we must pay again to Metro and the school boards before the area municipalities have even received the funds. I am asking that perhaps the wording be changed, that the area municipalities remit those funds to Metro and the school boards on a monthly basis as we receive the money from those different bodies. We're not allowed to charge penalty and interest to the province and the federal government for not paying those things on time, so it's unlike the tax situation.

There is a section in the bill that provides that there may be an alternative schedule set, but there's no requirement that Metro negotiate with us what that payment schedule may be. I'm asking the indulgence of the committee to make it on a cash-as-received basis.

The other issue is on payments of surcharges and abatements. I'm sure you are familiar with the bill; it's going to require the area municipalities to transfer money between the area municipalities. The bill before you states that the metropolitan corporation "may" pass bylaws to ensure that that follows the same as the due dates that we're paying them their tax money.

I would ask that the committee consider changing one word, from "may" to "shall," because it would be an onerous financial burden on the area municipalities again to send money to Metro and to the other municipalities before we've even collected it. Those are my comments dealing with the payment schemes embodied in the bill, and I hope you look favourably upon those comments.


My last couple of comments deal with eliminating some bureaucracy that's in the bill. I hope you will carefully consider my comments on these.

In the area of tax appeals that result from a taxpayer saying there's an error in how the area municipalities calculated the bill under market value assessment, there is a requirement in there that within 30 days the area municipality send back a refund to the taxpayer. While I can appreciate the intent of that, the reality is that's not possible to do. There's a 21-day appeal period after a notice of decision has been made and therefore we have to wait those 21 days before we even start doing any work on processing the appeal. So I would ask that the phrase, "within 30 days," be struck from the bill. I can assure you that the area municipalities put their best efforts forward in trying to process those appeals as quickly as possible.

My final comment deals with the fact that the bill provides that we're supposed to send a copy of a notice of hearing and a notice of decision to the Metropolitan corporation. The way area municipalities deal with appeals now, we only are notifying the assessment commissioner, the clerk of the area municipality, the appellant. To be delivering notices to the Metropolitan corporation on notices of decision and notices of hearing, I think, is quite an onerous bureaucratic process that could be eliminated very easily from this bill. So I would ask that the phrase "and the Metropolitan corporation" be deleted from two of the clauses in the bill.

That basically summarizes my comments. I apologize for taking time so late on a Friday afternoon, but I strongly urge you to consider it because we felt, as area municipalities, very left out of the process of coming with clauses of this bill, and yet we were working very diligently with Metro staff and with provincial staff. Up to that point, it seemed the legislation was just sort of put together without our being involved.

The Chair: Thank you very much, because you have provided us with some very specific recommendations regarding the actual legislation. I think the members will use that. The parliamentary assistant had one clarification. I think he called it a quiet clarification.

Mr Mills: A quiet clarification, not to get anyone excited.

I appreciate your comments. I'd just like to refer to where you were asked to provide comments and concerns on Wednesday, November 11. It's my information that our staff were only instructed to prepare the legislation and they couldn't do it until Metro had adopted the bylaw. So that was the delay there.

Secondly, I'd like to say that the provisions with respect to instalment and payments are not different from the current act. These provisions were discussed with the area treasurers and general agreement among all those folks was obtained to do that.

Ms Liczyk: On the matter of legislation, I have attended all the meetings we've had on the task force to study implementation and we've been asking for six months to see copies of draft legislation. What surprised me when I got a copy of the draft was that a lot of it could have been put before us months ago. The detailed final specifics of the plan Metro council adopted only constitute something that's going be put into the regulations anyway. There's an awful lot in here that I think we could have worked on with Metro and the province if we'd been given the chance to; it was just a timing issue. I was very supportive of the entire process and felt very frustrated that we weren't included in it.

With respect to the 10-day scenario, we had gone to court. I guess you're aware of the fact that the area municipalities in Metro went to court over the payment dates. We had struck agreement that we would go with the 10 days after the due date for the term of this council, but we don't have any certainty as to what's going to happen after that. I guess we're looking for this bill to put some certainty in our lives because of the way budgets are having to be struck, and we're all under pressure to have 0% increases. It's very onerous for us not to have some certainty in our lives.

Mr Turnbull: Just a technical question, if I could ask it.

The Chair: Another quiet point of clarification?

Mr Turnbull: Yes. Tell me something: It has been asserted that one council cannot bind the next. Can you give me some clarification on that?

Ms Liczyk: I'm not a solicitor, but I believe that to be true.

Mr Turnbull: In other words, the implication of that, if it is true, would be that any assurances of caps could be removed by the next council.

Ms Liczyk: Yes, they could be, and that's I guess what we're concerned with.

Ms Poole: I have a request to make of the parliamentary assistant. By the time we begin clause-by-clause, whenever that is, I would like a document which would outline each of these issues raised by the financial -- what's your title?

Ms Liczyk: Commissioner of finance and treasurer.

Ms Poole: Commissioner of finance and treasurer for North York. If they are going to be adopted as amendments, I think the rationale right here has been set out, but if they are going to be rejected, I would like a fairly comprehensive explanation of why they would not be accepted as amendments. If we could have that by the beginning of clause-by-clause, the opposition can then make the decision whether it will choose to take up any of the amendments the government does not.

Mr Mills: I think, in fairness, we haven't had time to study this yet, but we will table a response.

Ms Poole: You're going to have to work Sunday, you know.

The Chair: Thank you very much for your presentation.

Ms Liczyk: Thank you.

The Chair: Just before the committee breaks after a long day and looking forward to a long weekend, can I review the hours and where we are meeting, just to make sure we're all on the same wavelength? Tomorrow we'll begin at 10 o'clock in the Ontario Room of the Macdonald Block.

Mr Mills: Superior Room, you told me.

The Chair: The Ontario Room.

Mr Mills: Oh, that's changed?

The Chair: I don't know. I was just told the Ontario Room of the Macdonald Block. So that's 10 until 12 and then 1 until 5.

Mr Turnbull: Are the television cameras laid on for the hearings tomorrow?

The Chair: No. In the other rooms there isn't television. This is the only room. On Sunday we will be back here. Tomorrow afternoon will be 1 to 5, also in the Ontario Room in the Macdonald Block, so we'll be over there tomorrow and here Sunday 1 to 5, and then Monday at 9:30 we start again.

Mr Turnbull: Perhaps it should be pointed out for the people who have been following this on television that they would be able to get a copy of Hansard from tomorrow.

The Chair: Yes, there will be full Hansard for the hearings tomorrow and those can be provided to anyone who is viewing and would like to read the Hansard.

With that, I want to thank everyone for their patience, particularly with the Chair. We now stand adjourned until 10 o'clock tomorrow morning in the Ontario Room of the Macdonald Block.

The committee adjourned at 1728.