Legislative Assembly of Ontario

The House met at 2 o’clock, p.m.

Prayers.

Mr. Speaker: I would ask the members of the House to welcome with me the Hon. C. A. Southwell, who is Deputy Prime Minister of St. Kitts, Nevis and Anguilla. He is visiting in Toronto to discuss, with travel agents and carriers, prospects for increased tourist flow to that Commonwealth Caribbean state.

He also met earlier with the Minister of Industry and Tourism (Mr. Bennett). Mr. Southwell’s present position as Deputy Prime Minister includes the portfolios of Minister of Finance, Trade, Industry, Development and Tourism. Accompanying Mr. Southwell is Dr. Lionel Thomas, commissioner of the Eastern Caribbean Commission. Our honoured guests are seated in my gallery.

Mr. V. M. Singer (Downsview): Mr. Speaker, I have the privilege of introducing to you and to the House, 50 students from grade 10 at Madonna High School, I believe in the gallery up here behind me, with Mrs. Murphy. Madonna High School is one of the fine educational institutions in the riding of Downsview.

Mr. D. M. Deacon (York Centre): Mr. Speaker, I have the privilege of introducing the students from Thornlea Secondary School, Thornhill, in the riding of York Centre, with Mr. R. K. Smith. I would be pleased to have you welcome them.

Mr. I. Deans (Wentworth): Mr. Speaker, I have the privilege of introducing to the Legislature 12 new Canadians who are currently involved in studies at Mohawk College of Applied Arts and Technology, at the Saltfleet campus, and they are in the gallery.

Mr. T. P. Reid (Rainy River): Mr. Speaker, if I may, before we get into the orders of the day, and I am not sure of the protocol on this, I would like to state, and have the concurrence of the House in saying and stating as plainly and bluntly as we can, that we condemn the cowardly action of the Arab state that was involved in the action that we are all aware of in the last day in regard to the students who were massacred by those guerrillas. I would hope that the House would join in, or make a statement, condemning that action.

Mr. S. Lewis (Scarborough West): Mr. Speaker, perhaps at some point the government on behalf of the House can appropriately say something to the terrorist incident that occurred.

Hon. A. Grossman (Provincial Secretary for Resources Development): It is being prepared.

Mr. Lewis: Mr. Speaker, may I rise on a point of personal privilege before the orders of the day? In today’s Toronto Star on page 2 there is a story headlined, “Stephen Lewis distorted facts, two oilmen claim.” I categorically deny that, Mr. Speaker, and very briefly would like to explain.

Yesterday at 10 a.m., here in the NDP caucus office at Queen’s Park, two corporate lambs, two sweet savage innocents from Imperial Oil’s executive sanctum, met with myself and others of the NDP caucus for more than one hour.

Mr. J. R. Breithaupt (Kitchener): Don’t cry wolf!

Mr. Lewis: The members for York South (Mr. MacDonald), Thunder Bay (Mr. Stokes), Port Arthur (Mr. Foulds), Nickel Belt (Mr. Laughren) and Wentworth were all in attendance, as well as three of our research staff.

What ensued is perhaps a mixture of the curious and the surreal but it is easily authenticated. As a matter of fact, with our accustomed dexterity, the NDP held this meeting behind closed doors while leaving the transom open. The paparazzi of the fourth estate clustered outside in their multitudes, clawed the very walls to catch the sounds of battle, which I judge wasn’t too difficult.

I therefore feel, on the firmest possible ground, the gentle wizards of Imperial asserted the following:

1. That there was a sizable amount of misunderstanding which flowed from the conference of first ministers last March, and that the Premier (Mr. Davis) in particular was clearly confused, a situation on which they were not able to comment since they were not at the bargaining table.

2. That perhaps, therefore, they were meeting with the wrong politician and should be meeting with the Premier; we encouraged that suggestion.

3. That the effective net gain for Imperial Oil of the increase to $6.50 a barrel, after royalties, taxes and inflationary costs were subtracted, would be an additional 60 cents per barrel.

Mr. L. C. Henderson (Lambton): The member is out of order.

Mr. Lewis: I don’t think so. I am just putting the record straight -- and I won’t be long.

Mr. Singer: He is not putting the record straight. He is making a speech.

Mr. Henderson: Tell it to the paper.

Mr. Lewis: To continue:

4. That, yes, they were admittedly doing all right in every aspect from return on investment to absorbing the costs of exploration based on the old per-barrel price --

Mr. Singer: He is making a speech.

Mr. Lewis: -- that the additional 60 cents was a useful hedge against changes in the future --

Mr. Henderson: He is out of order.

Mr. Lewis: -- and that, yes, Imperial Oil might not suffer unduly were it to impose less than the full 9.2-cent-per-gallon increase, but it might drive the marginal oil companies out of business -- and neither Imperial nor we would surely wish to see that happen.

Mr. Singer: Can he make a speech on a point of privilege?

Mr. Lewis: Mr. Speaker, in response, we told Imperial Oil in no uncertain terms that while we appreciated their coming and that the exchange was useful, there was no meeting of minds because we were worlds apart; that, frankly, we thought the clear 60 cents they were getting was incredible, and we asked them categorically to limit the increase to seven cents maximum --

Mr. Singer: This is not a point of privilege.

Mr. Lewis: -- that their profit figures and return on investment, which we quoted and they accepted, were clearly illegitimate; and, finally, that I was going to speak to the media specifically about what we had discussed. I did so, and I reported faithfully then as I have reported faithfully now.

Mr. Speaker, if this offends, I recall that the other day the Leader of the Opposition (Mr. R. F. Nixon) raised a matter coming from a weekly newspaper, based on a letter from another member, and simply put the facts straight --

Mr. Singer: The member is abusing the rules.

Mr. Lewis: I don’t think I am.

Mr. Singer: Sure he is.

Mr. Lewis: If I may, I will just conclude.

Mr. Singer: He is abusing the rules.

Mr. Lewis: Mr. Speaker, although it almost defies belief, Imperial Oil ventured into our offices obviously convinced that if they set out the facts of corporate self-interest, we would accept the implications; but they misjudged their quarry.

Mr. Singer: Why doesn’t the hon. member write a book about it?

Mr. Lewis: Mr. Speaker, I believe that the facts as I have put them to you are exactly what occurred, and I simply wanted to have them on the record of this House.

Interjections by hon. members.

Mr. Speaker: I must say to the hon. members of the House, and to the hon. member for Scarborough West, that in my opinion it was not really a point of privilege, beyond the first one or two statements, which I believe might have been construed as a point of privilege -- to be properly reported in the press. That might have been made as a personal statement. However, I do feel that perhaps it was extended a little too far and I am in the position that out of courtesy and respect to the member I didn’t want to stop him from making his remarks. I must extend the same courtesy to the leaders of the other parties if this is to be the rule in this House. I do rely upon the leaders of the parties to use their own good judgement in the application of the rules as they see them, and I would ask all the hon. members to please abide by these rules in the future.

Mr. M. Shulman (High Park): One rule for the leaders and another for the backbenchers.

Mr. Lewis: Mr. Speaker, it is very rare -- I can’t remember the last occasion -- when I rise on a point of personal privilege of this kind. I am sorry if it was over-extended. I thought, judging from precedent, that it was legitimate; I accept your admonition.

Mr. Speaker: I would like to say further that I do try to exercise my own good judgement in these cases. The hon. leader of the New Democratic Party, the member for Scarborough West, does not abuse the rules in that respect; very seldom does he so do. I was quite satisfied to let him continue although it was a little too lengthy.

Mr. Singer: Are we all just allowed one bite or two bites?

Mr. Speaker: Statements by the ministry.

MEDIC-ALERT MONTH

Hon. F. S. Miller (Minister of Health): Mr. Speaker, sitting in the galleries today is Mr. William D. Robson, campaign chairman of the Medic-Alert campaign of the Life Underwriters’ Association. He is here because the Canadian Medic-Alert Foundation has designated this month of May as Medic-Alert Month in Ontario. I would like to take a minute of the House’s time to pay tribute to the valuable work the foundation is doing.

As most members will be aware -- some of them, possibly, from first-hand knowledge -- the Medic-Alert Foundation issues identification bracelets to people with medical conditions requiring special treatment in the event of emergency.

If any individual is involved in an accident or sustains an injury rendering it impossible for him to tell of his condition, without this identifying bracelet he might become seriously ill or die. The Canadian Medic-Alert Foundation maintains an around-the-clock emergency service to deal with these critical situations, with instant communication with physicians and other authorized health personnel.

Mr. Speaker, a typical episode occurred very recently in Toronto. A man collapsed on the subway. The needle marks on his arm at first gave the impression of a typical OD case -- an instance of narcotic overdose. The routine action would have been for an ambulance to take him to a hospital where he might have died before his hard-to-identify ailment -- for which he had to take regular injections -- was identified.

His life was almost certainly saved by his Medic-Alert bracelet. He was one of the 50,000 people in Ontario who depend on Medic-Alert for informed immediate help in case of emergency.

The Medic-Alert Foundation is a non-profit organization. It has been providing its services in Canada for some 20 years and since 1967 has been conducted as a voluntary service by the Life Underwriters’ Association.

As Minister of Health for Ontario and on behalf of the Ontario government I would like to endorse the contribution to health care in the province made by the Medic-Alert Foundation.

DENTURE THERAPISTS

Hon. Mr. Miller: Mr. Speaker, later today I shall introduce a bill to expand the role of denture therapists. In proposing these changes the government has addressed two basic issues.

The first and perhaps most important is the need to safeguard the health of the public through the licensing of qualified denture therapy practitioners. The government is determined that only those people who are qualified should be permitted to practise. It is with this in mind that standards have been set and arrangements made for examinations.

The second issue is the degree to which a licensed denture therapist should be permitted independent practice without supervision of a dentist.

Mr. R. F. Nixon (Leader of the Opposition): The government has really settled on that, has it?

Hon. Mr. Miller: In brief, the changes being introduced today specify how a person wishing to become a licensed denture therapist must qualify. They also permit a licensed and qualified dental therapist to practise without a dentist’s supervision but only in a mouth where no teeth remain in the upper or lower jaw or in both.

Denture therapists will not be allowed to make partial plates without supervision. Responsibility for that supervision will remain with the dentists.

Interjections by hon. members.

Hon. Mr. Miller: That’s what the member’s bill said.

Interjections by hon. members.

Hon. Mr. Miller: No, it is not; not by any means. It is our intention to see that this is strictly enforced and that a violation of this practice will bear major consequences.

Mr. M. Cassidy (Ottawa Centre): This is the most toothless piece of legislation we have seen.

Hon. Mr. Miller: That’s a well-chosen terminology.

Mr. Speaker, there may be some who will be quick to call this a victory of the denturists over the dentists.

Interjections by hon. members.

Hon. Mr. Miller: I would like to disabuse them of this thinking.

Interjections by hon. members.

Hon. Mr. Miller: Denturists, in order to practise as denture therapists, will need to show that they are qualified.

Mr. Lewis: I should hope so.

Hon. Mr. Miller: At the present time, there are a number of people who have qualified under the Denture Therapists Act, 1972. These denture therapists will be eligible to apply to practise independently once the new bill is proclaimed. At such time, provisional approval will be granted on the condition that his or her qualifications are upgraded.

The mechanism and the details of this upgrading are, at this moment, being worked out by officials of my ministry. It is my intention that dental practitioners shall provide input in establishing the required standards.

Those practitioners who feel they are qualified will be given an opportunity under the same conditions to pass the same examination undertaken by the present denture therapists. Once having passed this examination, and once the new bill is proclaimed, they also will be eligible for provisional licensing.

All future denture therapy applicants will be required to complete a course in denture therapy at a community college, or have equivalent qualifications.

I do not think anyone questions the need to protect the health of the people of this province through qualified and licensed practitioners. Nevertheless, in the heat of the debate over whether denture therapists should be permitted to practise independently, and whether or not dentists could provide a low-cost denture service, the importance of this need has been overlooked.

In our re-appraisal of the way in which denture therapy should be offered, we examined the use of the so-called oral certificate of health, and we came to the conclusion, as we did a year ago, that introduction of an oral-bill-of-health clause would not be appropriate.

Experience elsewhere has shown that the oral-bill-of-health procedure is impracticable. Dentists are reluctant to issue the certificate because of its implication of eventual responsibility. In practice, it was found that the requirement was almost impossible to enforce.

We consequently determined that denture therapists should be allowed, under certain limited conditions, to practise independent of a dentist’s supervision, provided the therapist is properly qualified. We also determined that the self-disciplinary and regulatory standards accepted by other reputable disciplines must be the goal of the new independent practitioner.

In this regard a governing board of denture therapy will be established which will include three representatives of the public and six qualified denture therapists. An appeals board will also be set up, composed of independent public representatives appointed by the Lieutenant Governor in Council. This is similar to the structure for other health disciplines as set out in the Health Disciplines Act now before the House.

I should caution everyone that, although the public had opted for this approach, there are a number of difficulties inherent in it for making low-cost dentures available across the province.

Past performance indicates that most independent practitioners are established only in localities where there is a sufficiently large population to give them a chance to do a big volume of business.

There are going to be a number of areas across the province where the independent practitioner may not be able to operate profitably. I cannot resist saying that this was one of the major advantages of the former plan under which the dental profession guaranteed that the service would have been available in all parts of the province.

Mr. Cassidy: Nobody ever knew it was there.

Hon. Mr. Miller: Mr. Speaker, I cannot conclude without paying a tribute to the dentists of Ontario. More than 600 dentists, right across the province, agreed to participate in the low-cost denture programme with little prospect of gain. I consider it unfair that their motives were questioned.

I am confident that, though they would have preferred other arrangements, the dentists will nonetheless support the principle of the bill to be introduced today.

This bill, Mr. Speaker, meets public demand. The issue has been the outcome of much emotion and debate. My responsibility is to see that the public’s health is ensured and that the cost of health service is reasonable. There are various ways of achieving these objectives. Each has some attractive elements.

I believe that the Denture Therapists Act to be introduced today accommodates a number of points of view and yet serves to achieve the objectives I have set to carry out my responsibilities. I look forward to the approval of the House during the course of the debate.

Mr. Speaker: Oral questions. The hon. Leader of the Opposition.

DENTURE THERAPISTS

Mr. R. F. Nixon: I’d like to ask the Minister of Health if the charges brought against the denturists acting under the old Act will be dropped without further action.

Hon. Mr. Miller: Mr. Speaker, at all times the matter of charges lay under other jurisdictions. I believe the question should be referred to the Attorney General (Mr. Welch).

Mr. R. F. Nixon: He’s hardly ever here.

Mr. Lewis: A supplementary, if I may, Mr. Speaker: Can I ask the Minister of Health, does he know what proportion of total present denture practice is constituted by the fitting of full dentures as distinct from partial dentures? And will denture therapists under this Act be able to fit partial dentures with the supervision of a dentist?

Hon. Mr. Miller: The answer to the latter part is yes, they will. There will be two qualifications for denture therapy. One will permit them to make partial dentures under the supervision of a dentist.

To answer the former part, I really couldn’t give the member the percentages of the business.

Mr. Speaker: The hon. Leader of the Opposition.

GASOLINE PRICES

Mr. R. F. Nixon: I’d like to ask the Minister of Energy for clarification on two points that have certainly been in the fore in the last few days.

The first is about, let’s say, the level of inadequate information that was available to him and the premier and the delegation from Ontario and, to be fair, to the other delegations to the first ministers’ conference in March, which came back to the various provincial capitals announcing that for those jurisdictions west of the Ottawa line an increase of seven cents with a very small deviation from that predicted was going to be the price increase. In other words, I want clarification on just what the level of information was, granting that if there was misinformation or lack of it, it was shared by all jurisdictions.

As for the second area of clarification, the minister has indicated that he does not want to say anything further on government policy as far as the gasoline price is concerned until he knows for sure at what level the gasoline price will be. It appears that an increase of no less than 10 cents per gallon and as much as 14 cents per gallon was introduced by at least three of the five major companies. Does he wish to wait further for some levelling-out feature which may occur, possibly due to the law of supply and demand, or can he state that the government is considering certain policies or that it is going to leave it alone?

Hon. W. D. McKeough (Minister of Energy): Mr. Speaker, in reply to the first part of the question, I think the Premier and I -- and I could be wrong about this -- after the meeting at the end of March, indicated that an increase to $6.50 would probably mean a price increase at the wholesale level, not necessarily at the pump, would translate into an increase of about 7.5 cents. I don’t think we ever said as little as seven cents.

Mr. R. F. Nixon: If I may, on at point of order, a quote from the Premier’s statement which was handed out Thursday, March 28, said: “The effect of the agreement will probably result in an increase of approximately seven cents a gallon for gasoline and heating oil.”

Hon. Mr. McKeough: Well, I’d forgotten that.

Mr. Cassidy: He forgot! That’s an $80 million lapse of memory.

Hon. Mr. McKeough: In reply to the question asked by the Leader of the Opposition, among the 11 gentlemen who gathered to discuss this at Sussex Dr., I think it’s fair to say that probably only two of them were conversant with the terms “wellhead prices” and “citygate prices,” and there is certainly a difference.

Mr. Deans: Why?

Mr. Lewis: How does one walk into a meeting like that without knowledge?

Mr. R. F. Nixon: The minister is not saying who were the two who were not ignorant.

Hon. Mr. McKeough: No, I would say the Premier of Alberta and the Premier of Saskatchewan knew.

Mr. Lewis: But why does one walk in that way to a meeting?

Hon. Mr. McKeough: I don’t think that the other first minister knew the difference between the two terms.

Mr. Lewis: That’s incredible.

Mr. Deans: The government signed the contract.

Interjections by hon. members.

Hon. Mr. McKeough: When that settled down, that accounted for a difference of 20 cents, which therefore translates into the 8.2 cents, which was subsequently approved by the government of Canada. If the Premier -- I had forgotten -- said seven cents, the 20 cents doesn’t make that much difference. It makes a difference of half a cent.

Mr. Lewis: No, it doesn’t; it makes about seven-tenths.

Hon. Mr. McKeough: We wrote the statement about 7.5 but it was not a precise calculation in Ottawa.

Mr. Lewis: Obviously.

Hon. Mr. McKeough: We had reasonable calculations for $6 oil and we had calculations for $7, $8 and $10 oil. We did not have calculations with us for $6.50 oil. The translation into price per gallon is not necessarily always consistent, but it does work out to 8.2. There was the confusion about the 20 cents.

Mr. E. W. Martel (Sudbury East): They have fired people for less than that.

Mr. Cassidy: The minister is juggling with millions there.

Hon. Mr. McKeough: The second part of the question was concerning any change in the policy of the government.

I would say simply the answer is no.

Mr. R. F. Nixon: Supplementary? The minister then was quoted as saying that he was not going to make any announcement until he knew for sure what the increase at the pumps was going to be. Is there any reason to believe that there is going to be any change from the prices put up on the pumps yesterday showing a variation in the increase from 10 cents to 14 cents per gallon?

Hon. Mr. McKeough: I wanted to see what would happen at the retail level, and obviously that may not be known for some weeks.

Mr. R. F. Nixon: For further clarification, is it fair to say that about $440 million of the increase expected to be paid by the consumers in this province will, in fact, travel to the producing provinces, largely Alberta, and there go into the consolidated revenue fund or special capital fund for the use of those provinces in expanding their own fuel resources?

Hon. Mr. McKeough: The figure is much larger than that. As I recall the figure, the increase to $6.50 will produce to Alberta --

Mr. Lewis: Nearly $1 billion.

Mr. R. F. Nixon: No, but how much from Ontario?

Hon. Mr. McKeough: -- nearly $1 billion, and on their royalty scheme would produce about $500 million for the producing companies and about $1 billion for the Province of Alberta.

We had no way of knowing that breakdown at the time and, of course, that breakdown could change tomorrow, depending on the level of royalty which is imposed. As it worked out, it was split roughly two-thirds to one-third between the government of Alberta and the consolidated revenue fund and the producing companies.

The question the Leader of the Opposition asked was what it cost Ontario. It is an increase of over $500 million in our gasoline and heating oil bills --

Mr. Lewis: That’s right.

Hon. Mr. McKeough: -- less a credit which eastern Ontario gets because it is still purchasing offshore.

Mr. D. C. MacDonald (York South): I have a supplementary question, Mr. Speaker.

Does the minister not feel that in view of such an extent of misinformation, lack of information and confusion, even among the first ministers of this land, that the case is now conclusively proven for the need for an independent body to investigate what the facts are instead of accepting only the self-serving information that the industry gives out?

Hon. Mr. McKeough: I don’t think that follows. I think that the hon. member is confusing two issues completely. The fact is that the first ministers of this country are not entirely skilled in the parlance of the trade.

Mr. Lewis: Oh, come on!

Interjections by hon. members.

Hon. Mr. McKeough: As the hon. Leader of the Opposition is well aware, that was a closed meeting at Sussex Dr.

Interjections by hon. members.

Mr. R. F. Nixon: The minister took officials with him.

Mr. Lewis: Was the minister in Ottawa at the time?

Hon. Mr. McKeough: We were in Ottawa at the time, yes.

Mr. Lewis: The minister was at the end of a phone presumably.

Hon. Mr. McKeough: I think the hon. member is calling into question, quite frankly --

An hon. member: The minister is wallowing in his ignorance.

Hon. Mr. McKeough: I don’t expect the Premiers of this country to understand. I’d ask the Leader of the Opposition does he know the difference between --

Interjections by hon. members.

Mr. Speaker: Order.

Interjections by hon. members.

Hon. Mr. McKeough: I’m delighted to know that what we seem to be worried about is the 20 cents and not the $6.50.

Interjections by hon. members.

Mr. Speaker: Order. The hon. Leader of the Opposition.

Mr. R. F. Nixon: I want to follow up on what the hon. member for York South has said, because I had a similar supplementary. Surely the minister would serve the community well if he did not say it was unnecessary to have further investigation. If he does not feel that he would like to get a group of so-called independent experts, why could not a select committee of this Legislature be established with all of the powers of subpoena to bring before them the experts from Imperial Oil, idiots though they may be --

Mr. Lewis: We have an Energy Board in this province.

Mr. R. F. Nixon: -- so that we can discover what these pricing and profit practices are in this province? Surely the minister would be well served in this connection.

Mr. Lewis: No, do it through the Energy Board.

Mr. Singer: Supplementary, Mr. Speaker.

Mr. Speaker: Does the hon. minister wish to answer that supplementary?

Hon. Mr. McKeough: Mr. Speaker, the government’s policy has been stated in this matter a number of times.

Interjections by hon. members.

Mr. Speaker: The hon. member for York South.

Mr. MacDonald: Mr. Speaker, I have a point of clarification that I wanted to seek. It seems to be significant in the last week that both the Minister of Energy and the Premier have repeatedly said that they are not willing to move now, but perhaps ultimately, in terms of intervening in this area. What are they doing? Are they playing politics to intervene when they deem to be the appropriate stage in the federal campaign? Who is going to protect the consumers in the meantime since Ottawa is obviously not?

Hon. Mr. McKeough: I would say this, Mr. Speaker, if, as and when this government decides to intervene it will do so when it is ready and not when suggested by the member for York South; that is for sure.

Mr. MacDonald: It is always too late.

Interjections by hon. members.

Mr. Speaker: The member for Downsview.

Mr. Lewis: Who governs Ontario, Imperial Oil or the Tories?

Mr. Speaker: Order.

Interjections by hon. members.

Hon. J. White (Treasurer and Minister of Intergovernmental Affairs): Not the NDP.

Mr. Lewis: Imperial Oil or the Tories. Who governs Ontario?

Mr. Speaker: Order. The member for Downsview on a supplementary.

Mr. Singer: I am trying, Mr. Speaker. The minister having said on television last night, “At this point in time [I think that was the exact phrase he used] we are not prepared to do anything”, could he tell us what criteria would have to exist to change the point of time and bring forth action from the government?

Hon. Mr. McKeough: The increases announced yesterday, Mr. Speaker, practically completely fleshed out the agreement reached by the first ministers at the end of March.

Mr. Deans: Even though they didn’t know what they were talking about?

Mr. Lewis: They didn’t know what they were agreeing to.

Hon. Mr. McKeough: The increases announced yesterday by some companies amounted to 9.2 cents, of which 8.2 cents relates to the increase in the price of crude from $4 to $6.50 wellhead price. That’s 8.2 cents; 0.6 cents of the increase relates to the fact that the federal sales tax rises as the wholesale price goes up; 0.4 cents, the Minister of Energy, Mines and Resources and the government of Canada feel, is justified on the basis of increasing costs. That translates into a total increase of 9.2 cents of which 0.4 cents was not covered in the first minister’s agreement. I don’t think at this point that is reason to move in and challenge the whole agreement.

Mr. Singer: What has to happen before the government does move in? How serious does it have to get? What will change the point of time?

Mr. MacDonald: What about the 60 cents for the net new profit?

Hon. Mr. McKeough: I have to say this, Mr. Speaker; I wonder where the member was when the $6.50 was agreed to? He is fiddling around over 20 cents.

Interjections by hon. members.

Mr. Speaker: Order.

Mr. Lewis: We asked it the next day.

Mr. Singer: If the minister would come into the House and listen to the odd speech -- I would ask the minister if he has yet --

Mr. Speaker: Order. That is not a point of order.

Mr. Singer: -- read my speech?

Mr. Speaker: Order, please.

Interjections by hon. members.

Mr. Lewis: In fact, he dealt with it in his budget speech.

Interjections by hon. members.

Mr. Speaker: Order. There have been seven supplementaries; this will be the last one.

Mr. Deans: Thank you, Mr. Speaker. Since the first minister obviously was not properly apprised of all the information he ought to have had to come to a decision, will the Ontario government suggest there should be renegotiation of the $6.50 since it is now obvious that the people of Ontario are going to be paying considerably more than they were told they were going to pay at the time the agreement was reached; and the reason for it is because the first minister was not aware of all of the circumstances and facts surrounding the agreement?

Mr. Breithaupt: Incompetence again.

Hon. Mr. McKeough: I have to say this --

Mr. Lewis: Well, say it.

Hon. Mr. McKeough: -- the first minister of Saskatchewan was there and he was aware and he might have been honest enough to say a few things at that meeting.

Interjections by hon. members.

Mr. Lewis: He said so. He knew what it meant.

Mr. Speaker: Order.

Interjections by hon. members.

Mr. Lewis: He knew what was said.

Interjections by hon. members.

Mr. Lewis: We were the province which was conned in that game. We didn’t know where we stood but the others did and it is coming from our pockets.

Interjections by hon. members.

Hon. Mr. McKeough: Mr. Speaker, let’s put this on the record.

Mr. Lewis: All right, let’s.

Interjections by hon. members.

Hon. Mr. McKeough: The price would have been $6 except for the obduracy of the Premier of Saskatchewan. That goes to show --

Interjections by hon. members.

Mr. Speaker: Order.

Mr. Deans: Why was the government not negotiating for Ontario?

Mr. Lewis: If the Premier of Ontario had known what he was doing it would be only seven cents at the pumps today.

An hon. member: Too bad Ontario wasn’t represented.

Interjections by hon. members.

Mr. Speaker: Order.

Mr. Lewis: The Premier of Ontario acquiesced. He didn’t understand a word of what was going on and Saskatchewan was fighting for its people.

Interjections by hon. members.

Mr. Speaker: Order.

Mr. Lewis: Blakeney was fighting for the people of Saskatchewan. Where was our Premier? Where was our Minister of Energy? Where were Ontario’s experts during this conference?

Interjections by hon. members.

Mr. Speaker: Order.

Hon. Mr. McKeough: Mr. Speaker, I am going to say this finally --

Mr. Breithaupt: Why did he have Allan Lawrence ask the question?

Mr. Lewis: How come every other province is cushioning the blow except Ontario?

Interjections by hon. members.

Hon. Mr. McKeough: Mr. Speaker, I will say this, finally. When our Premier is at a meeting representing Ontario we are represented and Canada is represented.

Mr. Lewis: He doesn’t know what goes on. He gets seduced, that is what happens. That is why there is no oil in Ontario.

Interjections by hon. members.

Mr. Singer: So much for incompetence; so much for their defence. The Premier didn’t understand but that’s fine.

Interjections by hon. members.

Mr. Martel: That is how much he knew of what was going on.

Mr. Cassidy: That is the Arnprior dam all over again.

Mr. Speaker: Order, please. The hon. Leader of the Opposition with a new question.

Mr. Lewis: The barefoot boy from Saskatchewan took him to the cleaners.

Mr. Speaker: Order, please.

Hon. Mr. McKeough: That barefoot boy in Saskatchewan is going to bring this country down and that’s what the member would do. He’s a destroyer.

Mr. Lewis: A very sophisticated politician.

Interjections by hon. members.

Mr. Lewis: On a point of privilege --

Hon. Mr. White: Socialist ripoff.

Mr. Lewis: -- I couldn’t hear what I was called.

An hon. member: It was the member’s imagination.

Mr. Martel: The Tories are embarrassed because Billy the Kid let them down.

Mr. Lewis: On a point of privilege I didn’t hear what I was called.

Mr. Speaker: Neither did I.

Mr. Lewis: Neither did you? I want to hear it because I want to know whether or not it should be withdrawn.

Mr. R. F. Nixon: The member was called to dinner.

Mr. Lewis: No.

Mr. Speaker: Order, please. I think the debate on this topic should be now terminated. The hon. Leader of the Opposition.

Mr. Lewis: Mr. Speaker, I’d like to know what was hurled across the floor.

Mr. Speaker: I heard nothing that was unparliamentary.

Mr. Lewis: I think I was called a radical.

Interjections by hon. members.

Mr. Lewis: There are some shocks I can’t absorb.

Mr. Singer: He is seldom out of order.

Mr. R. F. Nixon: Are we sure that point is settled?

Mr. MacDonald: They are being conned, those members.

Mr. R. F. Nixon: All right, now that the shouting --

Mr. Deans: The representatives of Ontario’s consuming public.

Mr. Lewis: The bush league.

Mr. Speaker: Order, please. Order!

Mr. R. F. Nixon: Now that that’s settled, I’d like to ask the Treasurer --

Mr. MacDonald: Settled?

Mr. R. F. Nixon: It must be because all the desks have been hammered and all the lungs have been exercised.

Interjections by hon. members.

Mr. Speaker: The Leader of the Opposition will please proceed.

Mr. R. F. Nixon: I’d like to ask the Treasurer since he has stated publicly that he could not approve a decrease in the gasoline tax because of our present budgetary situation -- we already have a very large deficit -- would he consider a five-cent-a-gallon decrease which would be applicable from now for the next 11 months until the federal-provincial agreement is renegotiated --

Interjection by an hon. member.

Mr. R. F. Nixon: -- if we could find the $135 million necessary for this purpose by a surtax on the corporate revenues of the petroleum corporations doing business in this province whose levels of income have been repeatedly brought to the attention of the House and have been growing very rapidly indeed?

Mr. Cassidy: Has the member talked about this with Pierre Trudeau?

Hon. Mr. White: Mr. Speaker, our gasoline tax remained unchanged in the budget put before the House on April 9.

Mr. Singer: Perhaps the minister could give the Premier a crash course in finance.

Hon. Mr. White: Those holding a contrary view will express it in the budget debate no doubt. I have had occasion in the House in the last few weeks to explain the reason the gasoline tax remained unchanged. I really think it would be entirely appropriate if the federal government, which got us into this trouble, were to remove its tax on gasoline.

Interjections by hon. members.

Mr. R. F. Nixon: A supplementary: whether or not certain actions would be appropriate by the federal government, we here in this Legislature find ourselves being compared with jurisdictions to the west of us -- all the provinces to the west of us -- and some to the east which are taking specific actions with powers that lie directly within their jurisdiction -- except for Ontario.

Mr. Singer: Right.

Mr. Deans: Who gave them the money?

Mr. R. F. Nixon: Would the Treasurer not agree that, since the Minister of Energy has stated explicitly that power should not be given to the Energy Board to roll back prices and the Premier has indicated that there are only certain specific areas in which the province can act legally, it boils down to an action which could be recommended by the Treasurer for a reduction on a short-term basis, at least until the federal-provincial agreement is renegotiated 11 months from now? What is unreasonable about that? Nothing is unreasonable about it.

Hon. Mr. White: As members know, the prices elsewhere are being stabilized by using federal subsidies, most of which are paid for by Ontario.

Mr. Deans: And negotiated by individual provinces.

Mr. R. F. Nixon: This is the richest province --

Hon. Mr. White: I would welcome a federal initiative to put subsidies behind the prices here in Ontario. Perhaps the member could suggest that to his Liberal friends who are so outspoken on every occasion.

Mr. R. F. Nixon: A supplementary, Mr. Speaker: Might I ask the Treasurer if, during the next couple of weeks until he devotes himself full-time to that campaign, we couldn’t discuss these issues on a sane and rational basis, based on the powers which undoubtedly we have here, specifically the reduction of the tax on gasoline. Now why can’t we do that? That is what we are elected for.

Interjections by hon. members.

Hon. Mr. Grossman: How would the Leader of the Opposition know that it would be passed on to the consumer?

Mr. Singer: They got to the minister last night.

Hon. Mr. McKeough: No, not me.

Hon. Mr. White: Well Mr. Speaker, to paraphrase the Leader of the Opposition --

Mr. Singer: What is the government going to say at the next conference? Is the Treasurer going to be able to brief the Premier before he sends him to the next conference?

Hon. Mr. White: To paraphrase the Leader of the Opposition: they certainly may discuss it on a sane and rational basis; whether they can or not I have very great misgivings.

Mr. R. F. Nixon: There is no point in pursuing this. Go ahead, go ahead.

Mr. Lewis: Mr. Speaker, supplementary if I may: Since the Province of Ontario obviously didn’t realize back in March that the oil companies would be receiving a clear net profit of 60 cents a barrel more with the increase; and since the government has taken a stand, which I don’t understand, of refusing to give the Ontario Energy Board the authority to contain the price or roll it back, what about using the Treasurer’s tax credit system throughout the remainder of the fiscal year to stabilize the effective increase at that which the Premier thought he agreed upon, namely seven cents a gallon, whether it rises to 10, 12 or 14 at the pumps; so that Ontario will at least rescue some dignity and some equity, if no competence, from what has happened?

Mr. Cassidy: What about using the tax credit for that?

Mr. MacDonald: He has to think about that.

Mr. Speaker: No further response?

Interjections by hon. members.

Mr. Deans: What is the matter, has the Treasurer run out of gas?

Mr. Lewis: Mr. Speaker, the Treasurer is a man who thinks in terms of tax credits. Is that not the fairest way of dealing with it in fact?

Mr. Singer: Is the Treasurer going to brief the Premier and tell him what he said?

Mr. Lewis: I didn’t abuse the Treasurer; I would like an answer.

Interjections by hon. members.

Hon. Mr. White: Mr. Speaker, the budget is in front of the House. Any recommendations, suggestions or amendments may be made as the budget is debated.

Mr. Reid: Oh, that is a copout.

Interjection by an hon. member.

Mr. Speaker: Does the hon. Leader of the Opposition have further questions?

BRANTFORD JAIL BREAK

Mr. R. F. Nixon: I would like to ask the Minister of Correctional Services if he will table in the House the report of his departmental officials pertaining to the escape of a prisoner from Brantford jail on April 21? Can the minister assure the House there was no negligence as a part of that escape; or inadequacy of facilities?

Hon. R. T. Potter (Minister of Correctional Services): I would be pleased to, Mr. Speaker.

Mr. R. F. Nixon: To table it?

Hon. Mr. Potter: Yes.

Mr. R. F. Nixon: No more questions, Mr. Speaker.

Mr. Speaker: The hon. member for Scarborough West.

MARKUP OF STORED OIL PRODUCTS

Mr. Lewis: Could I ask just two quick questions of the Minister of Energy? That is all I will ask, Mr. Speaker, not even terribly controversial.

May I ask the Minister of Energy: Has the minister had reports, as I have had, of a number of gasoline storage areas in the hands of the major multinationals in the Metro Toronto area, indeed in the southern Ontario area, where the fences were closed, as it were, yesterday, and gasoline in the millions of gallons was re-marked up in price; although it had been stored many months ago, even before the Premiers’ renegotiated agreement? Would the minister perhaps look into this, since it surely amounts to the kind of double ticketing we have on supermarket shelves, taking from the consumer far more than was originally anticipated some time back?

Hon. Mr. McKeough: Mr. Speaker, no, I have had no such reports.

I would just say this: I would be glad to have a look at it, but it must be remembered that the refineries have been paying at the level of $6.50 since April 1. Forty-five days was determined to be an average period of time in the pipeline and at the refinery. It may well be there is oil which is being sold today which was purchased six months ago. By the same token, I am quite sure that prior to May 15 there were probably refined oil products sold on which the new price had been paid. An average date was picked, and 45 days was determined to be it. From my knowledge I would think that is about right.

Mr. Lewis: Well even if the 45 days is right, if there were products that date back, and if they were in storage for six months, if they want to pay it on April 1 to May 15, fair enough; but how do they have the right to increase prices on stored products of six months ago, based on the original wellhead price of $3.80 or $4 a barrel?

Hon. Mr. McKeough: They didn’t raise the price, of course, if the member listened to what I have said. They may well have paid a higher price, and probably did, between April 1 and May 15. They may well have paid the higher price and not received it. On the average it should balance out.

Mr. MacDonald: Again the minister doesn’t know.

Mr. Lewis: But the minister doesn’t know. He didn’t bother monitoring, I take it.

Hon. Mr. McKeough: The 45 days was determined by the government of Canada to be an appropriate average time; and from our knowledge I would agree.

Mr. Lewis: Well they were long before --

Hon. Mr. McKeough: But no, we are not going to go around chasing every barrel of oil to see when it was bought and sold, or every gallon.

Mr. Lewis: The government is not going to go around to protect any consumers in Ontario.

Mr. Singer: Is this minister going to brief the Premier?

Mr. R. Haggerty (Welland South): Supplementary, Mr. Speaker.

Mr. Speaker: Yes.

Mr. Haggerty: Thank you. Can the minister recall a speech he gave to the Empire Club in Toronto on Nov. 22, 1973? He said: “I think it’s reasonable to insist that the petroleum industry establish the indexation of gas prices to those of a mix of oils, so that they do not do violence to the provisions of Canada’s anti-combines regulations.” Will he move in that direction now?

Hon. Mr. McKeough: The member is talking about two different things. What we were talking about in that speech was indexing natural gas prices to the price of petroleum, which had been proposed by one of the oil companies and which is not yet in effect; nor do I expect that it will be in just that form.

ROUTE OF PETROLEUM PIPELINE

Mr. Lewis: A question, if I may -- perhaps, actually, I should put it to the Provincial Secretary for Resources Development -- did he know when the government made its decision on the pipeline running through southern Ontario that the expert consultants hired by Interprovincial Pipeline to indicate minimum soil damage for the farmers, had in fact flown over the route and that their expert testimony consisted of their observations from the air; and would that not have influenced the minister?

Mr. Breithaupt: Like flying over Maple Mountain.

Hon. Mr. Grossman: Well Mr. Speaker, I wasn’t aware of that, but in any case that wouldn’t have any bearing on the situation now. That is all being aired.

Mr. MacDonald: Aired is right.

Mr. Singer: The minister doesn’t make any decision anyway.

Hon. Mr. Grossman: We are sure, Mr. Speaker, that the matter will not be resolved by the federal government unless they agree to the provisions which we have laid down in our presentation, which I am sure they will. They have to look after all the environmental concerns and all the other concerns which have been expressed before the National Energy Board. So whether he did it by air or whether he didn’t do it at all, it won’t make any difference in the final analysis. The facts will come out and the protection will be there as far as the Province of Ontario is concerned.

Mr. Lewis: By way of supplementary: How is it that in all matters relating to energy, whether it’s monitoring what the oil companies have or the prices that are set at the wellhead or what we pay at the pump or this matter of the southern pipeline, how is it that ministers of this government are all so poorly briefed when the decisions are made?

Hon. Mr. Grossman: Mr. Speaker, the very fact that somebody may have gone up in an airplane and made his investigation by plane --

Mr. Singer: One just can’t trust anyone.

Hon. Mr. Grossman: -- and the fact I don’t know about it or anyone else doesn’t know about it, I don’t think is a matter of somebody being ignorant about the subject. We are making sure on the concerns this government has for its people, for agriculture, for the ecology, for environment generally, and all the other protections we have spoken about in this House. So long as we make sure that those things are attended to, we are doing our job; and we will make sure that’s exactly what will be done.

Mr. Cassidy: The government didn’t do that from the beginning. The oil industry says jump, and the government jumps.

Mr. Speaker: I have several ministers who have answers to questions.

Interjections by hon. members.

Mr. MacDonald: That was a fuddle-duddle comment.

Mr. Speaker: The hon. provincial Secretary for Resources Development.

ECOLOGICAL IMPACT OF NUCLEAR POWER FACILITIES

Hon. Mr. Grossman: Mr. Speaker, I have a response to a question asked the other day by the hon. member for Sarnia (Mr. Bullbrook). He asked the following: “Could you advise what studies were undertaken, as a result of your policy direction, by the Ministry of the Environment into the ecological impact of the development of nuclear power facilities on Lake Huron; and if none, why not?”

Mr. Speaker, the government, through its various ministries and other agencies, has been conducting environmental studies on that part of Lake Huron off the site of their Bruce nuclear power development since the early 1960s. For the past six years more intensive water quality and biological studies have also been conducted. Ontario Hydro has undertaken extensive environmental studies with respect to the ecological impact on Lake Huron of the liquid effluents from the Bruce development. Air dispersion studies have also been conducted by Hydro.

After a series of public meetings, Ontario Hydro’s preliminary proposal for Bruce generating station B and Bruce heavy water plants B, C and D were made available to the public last February. I have been advised that the final report from Ontario Hydro will be before the resources development committee in the near future.

A member of the Resources Development secretariat is chairman of the interministerial committee on the Bruce heavy water plant. Since the establishment of the cabinet committee on resources development in 1972, these studies have been reviewed and coordinated by the committee.

Mr. Speaker: The hon. Minister of Health has the answers to questions asked previously.

FREE PRESCRIPTION DRUG PROGRAMME

Hon. Mr. Miller: Mr. Speaker, on May 13 the hon. member for Scarborough West asked me some questions regarding the drug programme, with a specific reference to a figure he quoted of some 10,000 people.

I would like to point out that the criteria for the eligibility for these drug benefits are based on the individual’s eligibility for assistance through either the Ministry of Revenue’s guaranteed annual income system, or the Ministry of Community and Social Services’ provincial or municipal assistance programme.

Therefore, if the 10,000 people the hon. member is talking about are those 10,000 people identified on page 2 of the Ontario budget, 1974, I can state that they are eligible for the drug benefits because they have been identified as being eligible for inclusion in the GAINS programme.

Mr. Lewis: Thank you.

Mr. Speaker: The hon. Minister of the Environment has the answer to a question asked previously.

EMPLOYMENT OF DEAF STUDENTS IN TIMMINS SWEEP PROJECTS

Hon. W. Newman (Minister of the Environment): Mr. Speaker, on Thursday last, the hon. member for Cochrane South (Mr. Ferrier) asked me a question concerning the employment of handicapped students for the SWEEP programme in the Timmins area.

I have checked into this particular case and found that the students to which the hon. member refers made application to the Ministry of Natural Resources for employment with the local conservation authority in the area. I believe Mr. Speaker, my colleague, the hon. Minister of Natural Resources (Mr. Bernier), would be pleased to advise the hon. member of the status of their applications.

I would like to take the opportunity at this time to inform the hon. members of the House that it is our policy to employ handicapped students in the SWEEP programme wherever possible, and in fact we have a paraplegic student and a legally blind student engaged in this summer’s programme with my ministry.

Mr. Speaker: The Minister of Health has the answer to another question.

LEAD INTOXICATION

Hon. Mr. Miller: Yes, Mr. Speaker. This is in response to another question directed to me a few days ago by the hon. member for Scarborough West, regarding the obtaining of information respecting cases of lead contamination or increased lead absorption.

I would like to inform him and the members of the Legislature that I have asked my staff to collect this information from practising physicians and from general hospitals. This will be accomplished by physicians reporting this diagnosis on the OHIP card. Hospitals submit to us discharge diagnoses, and these documents will allow us to collect the information. The information will be forwarded to our community health protection branch for assessment and follow-up.

Mr. Speaker: The hon. member for St. George.

SOUTH ST. JAMES TOWN

Mrs. M. Campbell (St. George): Mr. Speaker, my question is of the Minister of Housing. Has the government of Ontario been involved in the negotiations between the city of Toronto and the Meridian Building Group, concerning the development of the South St. James Town area -- and has the minister investigated or discussed with officials involved in the negotiations the reason why the city’s proposal to Meridian specifically provides that none of the low-cost housing units would be operated by Ontario Housing Corp.

Hon. S. B. Handleman (Minister of Housing): Mr. Speaker, the answer to the first part of the question is that neither I nor, to the best of my knowledge, any of my officials have been involved in these negotiations; therefore the rest of the question is redundant.

Mr. Campbell: The minister doesn’t care why.

Mr. Speaker: The hon. member for High Park.

ALLEGED BRUTALITY AT BROCKVILLE PSYCHIATRIC HOSPITAL

Mr. Shulman: A question of the Minister of Health, Mr. Speaker: Can the minister report to the House on the meeting which was held at 10:30 this morning in the Brockville Psychiatric Hospital and which was ordered by a senior medical consultant from his ministry in order to look into allegations by the staff that patients had been beaten in the hospital?

Hon. Mr. Miller: I can’t speak on the meeting, Mr. Speaker, but I have certain information about the allegations, in the same sense that some ex-staff members -- I believe they were registered nursing assistants -- had alleged that some brutality had occurred. We have made provision to set up a board of inquiry to look into the matter. There will, I think be four representatives of the public on this board.

The staff at the hospital claim the charges are not accurate. However, we made an offer even to the local paper to permit a representative to be present during the sittings as an indication of our willingness to look into the matter, and see whether the charges were or were not in fact true.

Mr. Speaker: The hon. member for Downsview.

RENT LEVELS

Mr. Singer: Mr. Speaker, I have a question of the Minister of Housing. In view of the very serious effect that inflation has had, particularly on tenants in Ontario Housing, has the minister any immediate plans either to freeze the rentals or to initiate a new system of rent formulas, so that those people who have a less than equal share of the income available in the province will be able to reasonably feed and clothe themselves and their families and maintain their dignity?

Hon. Mr. Handleman: Mr. Speaker, at a meeting with Mr. Basford a few weeks ago I suggested a joint review of rent-geared-to-income scales, and Mr. Basford was very cool to the idea. I don’t believe we can do it unilaterally, although we are studying the question at the present time.

Mr. Singer: Mr. Speaker, by way of supplementary, even though the minister may be waiting for something from Ottawa, is it not possible immediately to freeze the rental scales at their present level, as was done a few years ago, while the thought of a readjustment goes on? Does the minister not realize how urgent this situation is in Ontario Housing developments around the whole of the province and how much these people need help?

Hon. Mr. Handleman: Mr. Speaker, I am somewhat puzzled by the hon. member’s statement, because just a few weeks ago he was quoted in the press as saying rent-geared-to-income is exactly that, and as income goes up a portion of the increased income should be devoted to shelter.

Mr. Lewis: That’s right.

Mr. Deans: Perhaps the percentage is a little high.

Hon. Mr. Handleman: That is what the hon. member stated at that time, and I agree with that philosophy.

Mr. Deans: Perhaps the percentage is a little high.

Mr. Singer: Is that the minister’s excuse for non-action, his weird interpretation of something he thinks I said?

Mr. Speaker: The hon. member for Ottawa Centre.

Mr. Cassidy: A supplementary, Mr. Speaker: In view of the fact that many families earning the same amount as people living in Ontario Housing are in the private market, and having to pay much higher rentals, is the government intending to bring in a rent supplement scheme in order to protect low-income families who don’t have the benefit of rent-geared-to-income housing?

Hon. Mr. Handleman: Mr. Speaker, my sympathies are more with the people who are renting in the private sector because they do not have any government programmes to assist them at this time. Our approach to it, of course, is to expedite and accelerate rent-geared-to-income programmes.

Mr. Cassidy: A further supplementary, Mr. Speaker: How many families now in private housing will benefit from OHC and rent supplement programmes this year, and how does that relate to the overall need?

Hon. Mr. Handleman: Mr. Speaker, that is somewhat similar to a question that was asked the other day by the hon. member’s leader, and I promised him I would have an answer. Within a few days I hope to be able to table a comprehensive statement of all the programmes and policies of this ministry so that they can be seen in the full context of our entire housing programme.

Mr. Cassidy: In other words, the government is doing nothing about families in private housing.

Mr. Speaker: The hon. member for Sudbury is next.

INDEXING OF PENSIONS

Mr. M. C. Germa (Sudbury): Mr. Speaker, a question of the provincial Treasurer: Now that the government of British Columbia has introduced legislation that would tie teachers’ superannuation, public service superannuation, college pensions and municipal superannuation to the consumer price index, will the government of Ontario consider such a move?

Hon. Mr. White: Government policy will be made known in due course.

Mr. Speaker: The hon. member for Kitchener.

ELECTRONIC SURVEILLANCE IN DETENTION CENTRES

Mr. Breithaupt: Mr. Speaker, a question of the Solicitor General with respect to a matter of public safety: Has the Solicitor General made any plans to review the situation in Kingston, where the use of closed-circuit television in some of the detention areas has proven to be a very useful means of deterring possible suicides or personal injuries that might result? If so, can the minister advise us if consideration is being given to some kind of a programme that might provide those facilities in all detention centres?

Hon. G. A. Kerr (Solicitor General): Mr. Speaker, as far as our own institutions are concerned, that would be the concern of the Minister of Correctional Services. However, this is something that has been discussed as a result of some recent suicides in some of our institutions east of Toronto; it was also recommended a few years ago. Certain civil libertarian groups seem to object to the idea on the basis that there would be some infringement of the privacy of the inmate. However, because of recent tragic events, it is possible there will be a change in the policy of using this type of closed-circuit television for the protection of the inmates themselves. As I say, it is a rather controversial item from the point of view of privacy.

Hon. Mr. Grossman: They had to take them out of some of the institutions.

Hon. Mr. Kerr: That’s right. They did have some of them in before.

Hon. Mr. Grossman: And they had to take them out.

Mr. Speaker: The hon. member for Nickel Belt.

FINANCIAL ASSISTANCE FOR UNORGANIZED COMMUNITIES

Mr. F. Laughren (Nickel Belt): Mr. Speaker, a question of the Treasurer: Will the Treasurer assure the Legislature that there will be legislation introduced this session dealing with the problems of the unorganized communities and the right for them to apply for funds through their democratically elected citizens’ committees?

Hon. Mr. White: There is legislation in preparation dealing with this matter. I certainly would like to see it come forward during the spring part of the session. Failing that, it will be some time later in the year.

Mr. Laughren: A supplementary, Mr. Speaker: Would the Treasurer explain why, despite assurances in the Throne Speech that there would be consultation with those communities before the legislation was drafted, there has been none to date?

Hon. Mr. White: There certainly has been lots of consultation, which is one reason why it hasn’t been introduced to the House. Now, whether there has been consultation with the communities the member has talked to I can’t say.

Mr. Laughren: A final supplementary, if I might: Surely the Treasurer has by now received petitions from about 15 unorganized communities in northeastern Ontario indicating their displeasure at the fact that there has been no consultation?

Mr. J. E. Stokes (Thunder Bay): Not in my riding.

Mr. Laughren: I would like to know who the Treasurer has been consulting with.

Hon. Mr. White: We’ve had lots of input from a variety of ministries; I cannot list them offhand.

Mr. Deacon: Why doesn’t the Treasurer go to the people?

Hon. Mr. White: We are fully prepared to discuss this matter with anybody and everybody. It takes a long time to do that; that’s the cost one pays and I think, as a matter of fact, it would be well worth while. But we can’t have it both ways. We can’t be pressed to bring in a bill the day after tomorrow and consult everyone who has some interest in it. So I trust the House will be patient with me if we don’t get it in until toward the end of the year.

Mr. Speaker: The hon. member for York Centre.

EXPANSION OF SEWAGE TREATMENT PLANTS

Mr. Deacon: I have a question of the Minister of the Environment. In view of the perfection in London, Ont., of a treatment system which, according to the tests of his own department, removes phosphates and nitrates and other impurities and raises the water quality of effluent from sewage treatment plants well above that of normal streams, will the minister remove the prohibition of expansion of upstream treatment plants that he has in the area north of Toronto, provided that the new system of effluent treatment is installed?

Hon. W. Newman: Is the member talking about London, Ont., or London, England?

Mr. Deacon: London, Ont.

Hon. W. Newman: London, Ont.

Interjections by hon. members.

Mr. Deans: Yes, he is familiar with it.

Hon. W. Newman: Yes, we are looking at all the new technology on upstream plants right at the present time. As the member knows, yesterday we finished hearings on the York-Pickering major trunk sewer line and we are also negotiating with the various regional municipalities involved on this matter.

Mr. Deacon: A supplementary: In view of the fact that the York scheme is a $140 million colossus which will certainly change the whole potential development to the north of Toronto and greatly reduce the flexibility that would otherwise be possible by use of upstream plants; and in view of the fact that his ministry has approved it on a conditional basis and that now it has been proven that this new system will work, will the minister now review the present programmes of treatment and approve new modifications to these plants?

Hon. W. Newman: Of course, we are looking at new technology all the time but we will not sacrifice our streams and rivers for the expediency of certain matters. We want to look at these. We are prepared to talk to the municipalities involved and we have been talking with them.

Mr. Deacon: A further supplementary: In view of the fact that we are not asking him to sacrifice quality, we are just asking the ministry to look into the new ways that are available and stop standing --

Mr. Deans: Will the minister say he will look into it, for goodness sake?

Mr. Deacon: -- back in the 18th century in its methods.

Hon. W. Newman: Pardon me, Mr. Speaker. Let me tell you this. We are looking into new technologies all the time and we are up with the times. The member just gets off in his dream world and he lives there. Why doesn’t he face reality?

Mr. Speaker: The time for oral questions has now expired.

Petitions.

Presenting reports.

Mr. Taylor from the standing private bills committee, presented the committee’s final report which was read as follows and adopted:

Your committee begs to report the following bill with certain amendments:

Bill Pr20, An Act respecting the City of Toronto.

Mr. Speaker: Motions.

Hon. Mr. Winkler moves that when the House adjourns tomorrow it stands adjourned until Tuesday next, May 21.

Motion agreed to.

Mr. Speaker: Introduction of bills.

LOAN ACT

Hon. Mr. White moves first reading of bill intituled, An Act to authorize the raising of money on the credit of the Consolidated Revenue Fund.

Motion agreed to; first reading of the bill.

Hon. Mr. White: Mr. Speaker, this bill authorizes the Lieutenant Governor in Council to borrow up to $800 million on the credit of the consolidated revenue fund.

The Ontario Loan Act, 1973, authorized loans up to $900 million and I expect this amount will be used by Sept. 30 of this year. In the 12 months thereafter we anticipate that we will be receiving a total of $800 million from such sources as the Canada Pension Plan, the federal-provincial winter works capital projects fund and CMHC.

I will be taking this bill through the legislative process.

DENTURE THERAPISTS ACT

Hon. Mr. Miller moves first reading of bill intituled, the Denture Therapists Act, 1974.

Motion agreed to; first reading of the bill.

DENTISTRY ACT

Hon. Mr. Miller moves first reading of bill intituled, An Act to amend the Dentistry Act.

Motion agreed to; first reading of the bill.

Hon. Mr. Miller: Mr. Speaker, that particular bill removes the requirement for the dentists to provide a low-cost denture service.

Mr. R. F. Ruston (Essex-Kent): The minister changed his mind!

ANSWER TO WRITTEN QUESTION

Hon. E. A. Winkler (Chairman, Management Board of Cabinet): I would like to table the answer to question No. 14 standing on the order paper. [See Appendix page 2210.]

Mr. Speaker: Orders of the day.

Clerk of the House: The second order, House in committee of the whole.

LAND SPECULATION TAX ACT (CONTINUED)

House in committee on Bill 25, An Act to impose a Tax on Land in respect of certain Transactions affecting the Control or Ownership of Land.

Mr. Chairman: Bill 25. We were on section 2, subsection 1, I believe.

Mr. V. M. Singer (Downsview): Mr. Chairman, I’m sorry that I was unfortunately unable to join in the discussion on Tuesday evening last when the debate on section 2, subsection (1) started, but I am advised by my colleagues that the minister’s pipeline into the federal thinking involved a communication with a gentleman named Al Lawrence, who we all know, who got up in the House and asked the wrong minister a question about the effect of the Act, and when the minister said he would really have to know what Al Lawrence was talking about before he gave him an answer, the minister immediately came to the conclusion that that was the penultimate view of the people who handle taxes and business expenses in Ottawa.

I say that this indicates once again the minister’s naivete in matters of taxation, and that the minister really should not be able to come before this House without having done his homework much better than he has done it up till now. Even though this bill has been before this House since April 9 and it is now May 16, we still have no idea, we have no definitive opinion, we have no expert opinion, as to whether or not the 50 per cent tax being purported to be levied, or asked to be levied, by subsection (2), section 1 of this bill, will or will not be allowed as a business expense.

Surely it brings up to the height of idiocy in this Legislature when a minister comes before us and says: “Give me power to levy a tax. I don’t know whether its effect is going to be confiscatory. I don’t know whether it’s going to put the rates up as high as 112 per cent, or maybe it will bring it within those percentages shown in the pretty little diagrams that were attached as appendices to the Treasurer’s (Mr. White) budget statement.”

I say to you, Mr. Chairman, and to the members of the House -- and hopefully there are a few attentive ears on the government side -- that this is just no way to try and arrange the fiscal affairs of this province.

If it is government policy that speculations be taxed at a rate of 112 per cent, then let the minister be brave enough to say so. If in fact he is meaning to dry up all of the exchanges of land, for whatever reason, then that’s the way to do it. If that’s government policy we could understand that and we could debate that on its merits, and we could see whether or not that kind of policy would be approved by the House.

If, on the other hand, as would appear from the Treasurer’s statement and as might appear from the somewhat confusing and contradictory statements put forward by this minister, the tax should be, at its highest limit, perhaps a total of 86 per cent, then it should say so unequivocally.

I don’t understand, Mr. Chairman -- and I have puzzled about this since this bill came in -- I really don’t understand why and how the minister can come before us without having cleared up this very important point; or at least without having as his advisers, under the gallery, one or two of the noted and outstanding tax lawyers who carry on practice in the Province of Ontario and who could give him their best opinion as to what the real effect of this tax is going to be. At least that would be advisory and at least it would be helpful to the members of this House.

I wonder, in the absence of such expert legal opinion -- and certainly from reading this Act I am less than enthused about the legal advice the minister is getting in the drafting of this bill -- and in the absence of a presentation by the minister of this kind of expert legal opinion, whether perhaps it has been sought and the kind of opinion that was forthcoming was not of suitable form or of suitable import or of appropriate clarity that the minister is prepared to bring that kind of an opinion before the House.

If he wasn’t content with bringing before us good legal opinion on a taxation matter, a matter of the most serious importance, from known taxation experts in the Province of Ontario in the legal field, why couldn’t the minister have among his advisers representatives of one or two of the leading chartered accountancy firms in this province? Certainly we have practising in the city of Toronto, and probably elsewhere in Toronto, some of the leading chartered accountants who know taxation problems, who know taxation statutes and who could very easily, if consulted, bring forth an opinion to bolster whatever opinion the minister might have. But that isn’t being done either.

All the minister does is get up and make a series of non sequitur excuses, one after the other; and the one on Tuesday night, I gather, was just a doozer. To suggest to the House, to suggest to the people of Ontario, that because a fellow named Al Lawrence got up in the House of Commons and asked a question of the wrong minister -- and the minister didn’t give him an answer -- that is the penultimate way in which this taxation is going to be dealt with, is the height of idiocy.

Mr. Chairman, that is not good enough. Therefore, in an effort again -- I had hoped, because of our earlier debates, the minister would be moved to bring forward some kind of an amendment on his own. He promised to consider it. I understand that on Tuesday night the minister advised the House that the matter had been considered and either there was difficulty in drafting it or the ultimate conclusion was there was no necessity for any such amendment. I just don’t see how I can support this bill until this kind of very serious problem, which goes to the real root of the bill, is cleared up.

Mr. Singer moves that subsection (1) of section 2 of Bill 25 be amended by adding at the end thereof the following words:

“Providing that in the event the government of Canada will not allow this tax as a deductible business expense, this tax will abate to the extent necessary to deem such an allowance as having been allowed.”

Mr. Singer: I am no taxation draftsman of any skill or status whatsoever and this is an effort I put before the House in order to focus attention on the question. If the minister doesn’t like the wording, if his taxation experts don’t feel it is appropriate, that is fine.

I am putting it here, Mr. Chairman, with all the sincerity at my command, because I don’t see how, in good conscience, we can foist upon the people of Ontario a tax the incidence of which we don’t know and which the minister is unable to tell us. The minister is even unable to bring before us any expert opinions on it and say: “This is the best advice we have. This is the advice and it comes from noted taxation lawyers, noted chartered accountants who say such-and-such is probably going to be the case.”

Mr. Chairman, the last couple of words aren’t there on the amendment but I will give them to you in a moment. You can have it without the last two words; if you will give it back to me I will enter them.

Mr. Chairman: The member for Lakeshore.

Mr. P. D. Lawlor (Lakeshore): Mr. Chairman, I had anticipated that under the head of this section, which is the taxing section of the bill, something along the lines just suggested by the member would be brought forward. It was my anticipation that you would probably place a clause saying that in certain contingencies the tax would be only 10 per cent or 15 per cent or possibly 25 per cent, and that you would spell those out. The way in which the present amendment is worded seems to me to be completely palatable in this regard.

It is not your intent, I take it, right from the word go, as spelled out in your budget statement, which was quite explicit under this head as to where you felt this tax would fall. The actual wording is a little ambiguous, a little treacherous, as contained in the budget statement. It says:

“It will impose an additional 50 per cent tax on the increase of value realized from the sale of designated land. Over and above this tax, normal personal and corporate income taxes will apply.”

Well, that’s kind of putting the cart before the horse. But I would have taken, by any reasonable wording of that, that what is being suggested by the hon. member for Downsview is precisely what the Treasurer had in mind. The minister is privy to the secret thoughts of the Treasurer as to how he carries out the intent; and it is the ministers’ sworn obligation to be so privy in the presentation of the bill before this House.

In that regard, I suspect what you’re going to do is say you’re not prepared to do that at all, that if you subsequently find out at some date in July, after this election is over and with the new Parliament in session in Ottawa, that they turn thumbs down upon a deduction of this kind -- and there is a real possibility of that, it seems to me, because of the way the winds are blowing in Ottawa.

They are not recognizing specially designed, and to some extent self-serving, provincial budgetary proposals that cut into the federal tax position. They are becoming, as is their past wont, very jealous of these prerogatives of theirs in this regard. And with some reason too, because the federal tax structure could be subverted by ongoing moves of one kind or another made by provincial Treasurers seeking deductions, exemptions and various forms of privileges under the tax system.

Since that may not come to pass, at that stage of the game what you would do is simply come before this House and amend your legislation, saying you will only charge a half of the 50 per cent as is set forth in subsection (1) of section 2, since you feel it’s going to hit too hard. Isn’t that really what’s behind all this and what’s in your mind with respect to these matters?

You can save yourself a good deal of trouble and a good deal of donnybrook in the course of the debate, both now and as it will be then, because there will be mud on your face at that particular stage. Your ineptitude will become fully apparent. I don’t blame you for trying to hide it under a bushel at the present moment -- not your light but your darkness -- to keep things quiet and smooth while you try to get this legislation through.

When you stand up on this type of issue, you speak with a forked tongue. That’s understandable on the part of the government. Lord knows you’re embarrassed enough by the clause on the legislation. Such an intricacy of nonsense we’ve gone through. I think you will agree with me that we’ve never been pilloried to this extent by any piece of legislation that’s ever come before this House.

I understand a former Attorney General had a little difficulty with a similarly badly worked document --

Mr. J. R. Breithaupt (Kitchener): Bill 99, I recall.

Mr. Lawlor: -- but this beats all peradventures of doubt. This is the last word in egocentricity and in invalid wording, in terms of a statute. If that’s what is behind it, let’s get it out in the open now. If you feel you can accept the amendment as proposed by the hon. member for Downsview, that will save us all a great deal of fret.

Mr. Chairman: Perhaps I might just complete the amendment. The mover indicated there were a couple of words missing at the end of his motion as passed along to me. We now have them. The words are, “as having been allowed.” So the last part of that motion will read: “This tax will abate to the extent necessary to deem such an allowance as having been allowed.”

The hon. member for Kitchener.

Mr. Breithaupt: Mr. Chairman, there are some comments I think should be made with respect to the amendment that has been put by the hon. member for Downsview.

I was called at my office in Kitchener this morning by a solicitor who said that the Canadian Tax Reporter recently reported a certain case in British Columbia. Apparently the federal court has made a ruling in that case that allowances akin to the one we are discussing today are not to be considered as deductible expenses. I have not seen that case, Mr. Chairman, but I trust that the minister and his advisers have looked into the matter as to the deductibility of this tax.

If the legal colleague of mine who called me is correct, then it would appear that an amendment to this extent, as proposed by the member for Downsview, would be most worthwhile. The minister had commented earlier that it was his intention to have that result, that is to say the result proposed by the member for Downsview, so that there would be clearly a commitment by the government of Ontario that this kind of tax which we are discussing in Bill 25 would not be confiscatory.

Can the minister advise me if he is aware of this case and decision in British Columbia; and is it the way it was reported to me, that is to say that these expenses are not considered a deductible item?

Hon. A. K. Meen (Minister of Revenue): Mr. Chairman, I am not aware of that case. We would have to look at that, but we must also look at the basic law as it has been applied. I repeat, if the hon. members had listened on Tuesday night what I said was we have no intention of imposing a tax which in the end result becomes confiscatory.

Mr. Lawlor: Well, let’s drop the whole thing.

Hon. Mr. Meen: If as we extract the 50 per cent speculation tax from transaction to transaction, and eventually when the taxpayer files an income tax return in 1975 for his fiscal year 1974, it should be determined at that or at some later date that this tax, coupled with the federal tax assessed when one takes into account any court actions that might result from that, should turn out to be confiscatory, then would be the time to take appropriate steps to see that the taxpayer was not injured. If we were to adopt this kind of amendment proposed by the member for Downsview at this time, as I think I reasonably clearly expressed on Tuesday night -- he was watching the hockey game I take it, and that’s why he wasn’t around here to hear the explanation --

Mr. Breithaupt: No, he was at the dinner for the provincial solicitors as a matter of fact.

Hon. Mr. Meen: In any event, if he had read what I had to say in Hansard, he would see that I explained on the best legal advice we have that it would be the height of folly to include this kind of provision in the legislation, however attractive it may sound. The member for Downsview can’t take credit for that amendment. That amendment was suggested by the member for Ottawa Centre (Mr. Cassidy), the colleague of the member for Lakeshore. That was the kind of suggestion he put to me last week. I said that it had something to commend it, and it was on that note, I think, that we closed. I also explained to the members, when we convened on this particular subject, that it would not be wise and we would be inviting the courts, under those circumstances, to make such a ruling.

As it stands, we would be in the strongest possible position. I don’t think any members here would want to deprive the provincial Treasury of the full amount recoverable in this way. We didn’t set about to recover additional moneys, inasmuch as we were setting about to reduce speculative interest in land. But I think as a secondary issue, if moneys are to be derived out of speculation, then all the people of this province should share in those moneys.

On the best legal advice I can obtain, and hon. members opposite have conceded that at least I do have access to legal advice, it would be unwise to put in such a provision.

I see the member for Downsview has now returned. I would simply observe to him that we do have good legal advice on this point. We think that we are in a strong position, enhanced by no such provision in the Act to which a judge might look in trying to determine whether, in the mind of the Legislature, there was any thought that this might be in a secondary position to the federal income tax position. We are in a stronger position if we leave out any such provision.

In any event, on the basis of practice to date we are in a strong position, with this being a charge against a particular transaction and unrelated to the taxable income of the taxpayer at the end of his fiscal year, to consider that this is a properly deductible item relatable to a transaction during his fiscal year and not relatable to his income per se. Therefore, although as I have said I have some sympathy for this feeling, certainly we won’t let our taxpayers face a confiscatory tax, but it would be most unwise indeed to incorporate this amendment into the bill at this time.

Mr. Singer: Mr. Chairman, if the minister says that he has competent legal advice, I wonder whence it comes. Does it come from the people who have been advising him up to date? Because I must say with great respect to those people who drafted the Act that they did a bad job, they did a very poor job. It may be that they were under too much pressure, they didn’t get their instructions far enough in advance or for whatever other reason.

If there is such legal advice, surely the minister should be able to table it for us so we could see who signs it and whose opinion it is?

In addition, in a matter of this serious importance, would the minister not be able to reasonably quickly get an opinion from a gentleman such as Stuart Thom or Wolfe Goodman, or any one of a half dozen others, even a fellow named John Robarts has set himself up in a firm that specializes in giving taxing opinions. Perhaps the Robarts firm could be asked; and perhaps Mr. Stikeman, who is somewhat known in this country as an expert on taxation, would be prepared to affix his signature to an opinion.

These opinions would all be nothing more than opinions, but it certainly would impress me much more; it certainly would impress my colleagues much more; it certainly would impress the member for Lakeshore much more, if we had written opinions from people who are known to be competent within the taxation field. In the absence of those then we have to be very dubious about the effect of this.

It isn’t enough for the day for the minister just to say, “Trust me, our intentions are not to be confiscatory; and if there is something wrong then we will change it later.” Of all the kinds of statutes that we have to deal with, surely there can’t be a more precise form of statute than a taxation statute. If there is doubt -- and I suggest, Mr. Chairman, there is great doubt -- about the incidence of this taxation and its real effect and an absence of the kind of opinions I have been talking about, how can we go along and pass this statute in good conscience?

In addition to legal opinions I suggested there was another kind of an opinion. Surely, Clarkson, Gordon or Peat, Marwick could be asked to put one of their senior partners onto this tax and provide for us an opinion signed by Peat, Marwick or signed by Clarkson, Gordon saying that in their opinion such and such is the case. That would have a very substantial weight with the members of the Legislature. Certainly it would have with me.

But the minister does none of those things. All he does is say: “I have good advice and we think we are right.” Well I don’t think you are right, and you have brought no supporting evidence at all. In a matter that is as grave and as serious and as important as this, I just don’t see how we can support the minister.

Mr. Chairman: The member for Kitchener.

Mr. Breithaupt: Mr. Chairman, I think the comments made by the member for Downsview are worthy of further elucidation. It is clear, of course, that the minister has received certain information, at least from members of his own staff, that has led him to the position he has taken in the reply he made to my earlier remarks this afternoon, but we have not seen the details of that opinion, nor have we had any confirmation that the opinion has come from elsewhere than his own ministry.

We are dealing with a most substantial piece of legislation, and as the member for Lakeshore has said, it is section 2 that really is the one that deals in depth with this whole matter. This is where the whole problem comes to the fore -- section 2, which sets out of course the fact of the items being taxed and the manner in which they would be taxed. We have asked, Mr. Chairman --

Mr. Singer: Mr. Chairman, on a point of order, I don’t think there is a quorum.

Clerk of the House: Mr. Chairman, there are 17 members present.

Mr. Chairman: I would remind the House that there are two other committees sitting besides this one at the present time.

Mr. Singer: Surely you can find more than five --

Mr. Chairman ordered that the bells be rung for four minutes.

Clerk of the House: Mr. Chairman, I see a quorum.

Mr. Chairman: The hon. member for Kitchener.

Mr. Breithaupt: Mr. Chairman, when I was speaking earlier on the point raised by the member for Downsview, I had commented that the minister, of course, has no doubt had the benefit of some opinions from members of his staff. What we have not had is a commitment from the minister that goes beyond his own immediate supporters, those on his staff. We have asked whether there have been opinions from the law officers of the Crown. We have asked whether there were opinions from outside solicitors, such as the gentleman referred to by my colleague from Downsview, who are knowledgeable and expert in the matters of taxation. We had also asked whether there were opinions from chartered accountant firms, and two of those were mentioned this afternoon. We have asked, as well, whether there have been clear opinions, or any effective commitment, from the federal authorities with respect to their views of the situation.

Now, Mr. Chairman, we have proceeded in the debate on this bill for some 10 hours or so, and we are now dealing with section 2. Surely during that time, and indeed in the time since the budget on April 9, the minister has had the opportunity to obtain these various outside opinions, commitments, attitudes, call them what you will.

The minister apparently says that on the legal advice available to him he is satisfied the bill will do what he wants it to do, but the minister is not prepared, apparently, to give us the benefit of these opinions, to advise us as well what sources have been included in reaching, or helping him to reach, the opinion he has reached. What we have asked for on this side of the House, Mr. Chairman, is a clear delineation of the various opinions that have come to the minister. The minister has chosen not to provide those to us, and certainly in the absence of those opinions we cannot support this section as it is.

It is our view that the amendment raised by the member for Downsview is a valid one and one that is necessary in the absence of further information from the government benches. As a result, Mr. Chairman, it will be our intention to divide the House on the amendment raised by the member for Downsview.

Mr. Chairman: Do you want to speak on this, Mr. Minister?

Hon. Mr. Meen: Mr. Chairman, there are one or two points that have been raised by the members since I spoke last. We have, within our ministry, discussed this at length with the law officers of the Crown generally, and in an informal way beyond that.

Mr. M. Cassidy (Ottawa Centre): With whom?

Hon. Mr. Meen: The opinion is not completely unanimous but it is very strongly in favour of our position. As we assess it, it seems to fall well on our side. I’m not going to say whether we’ve consulted Mr. Stikeman or Mr. Robarts or Mr. Wolfe Goodman; and even if I had consulted them and had their written opinions, I would decline to table them. That would be quite improper. We have already, in other cases --

Mr. Cassidy: Why have you introduced the names into the debate if you are not going to say whether you consulted them or not?

Hon. Mr. Meen: One of the hon. members has referred to an opinion by Peat, Marwick, to which I made reference the other day too.

Mr. Singer: I’m sorry, I can’t hear the minister.

Hon. Mr. Meen: One of the members -- I think it was the member for Kitchener -- was asking me if I was familiar with the recently reported case from British Columbia. I wasn’t then. I have since had an opportunity to be apprised of that situation and I’m advised that’s the case of First Pioneer Petroleum and the Minister of National Revenue, which turned on a question of whether the provincial tax on income, the provincial income tax payable by that company, was a deductible item before computation of the federal corporate income tax. Clearly, they’re both taxes on income and they’re both calculated in essentially the same fashion on the measure of their profits over the fiscal year, and of course the court had little difficulty in saying: “No, the provincial tax is not deductible before you compute the amount of your federal income tax.” So, it’s clearly not the same situation at all.

Mr. Singer: Oh it’s not clear at all, not at all.

Hon. Mr. Meen: It’s quite inappropriate and quite distinguishable from the circumstances as they pertain here, where we’re taxing land with respect to a particular transaction and the difference in the sale price over the acquisition price. I don’t think that case is at all appropriate to this case. I’ve indicated already that we cannot, on my best legal advice, have any such provision as that proposed by the member for Downsview in the bill and I must, therefore, resist the amendment.

Mr. Singer: Did the minister say he had an opinion from Peat, Marwick? It got a little noisy here and I didn’t hear it.

Hon. Mr. Meen: It’s getting noisy over here too. Would you say that again?

Mr. Singer: I said did the minister say that he had received an opinion from Peat, Marwick?

Hon. Mr. Meen: No. I said that earlier in the debate -- the hon. member for Downsview may not have been here at that time -- one of the members of the House, in fact I believe it was the member for Ottawa Centre, quoted a part of a circular letter issued by Peat, Marwick. That was about the --

Mr. Lawlor: No, that was the member for Riverdale (Mr. Renwick).

Hon. Mr. Meen: Riverdale, yes -- about the middle of April when he had had a first run at the bill only.

Mr. Singer: Right. And what was the minister’s conclusion? He didn’t accept Peat, Marwick’s suggestion?

Hon. Mr. Meen: Peat, Marwick’s letter -- and I don’t have the circular letter -- simply indicated not that it would be an unallowable deduction under the federal Income Tax Act but that they had some measure of misgiving as to its allowability. It was a very qualified type of doubt they cast. By no means did they say that in their opinion it was not a deductible item. In fact if you look at all the current rules it would be deductible.

Mr. Singer: Mr. Chairman, this is where we get into our real difficulty. I grant that what Peat, Marwick said was not that definitive but it cast doubt. I am not prepared to accept the glib analysis that the minister has just given about the British Columbia case, because it seems to me that the courts are not going to look either at the title of his bill or at the Hansard debates.

The minister’s repeated statement that this is not a tax on income does not necessarily make it not a tax on income. The court is going to examine the full implication of the statute and the court is going to come to its own conclusion as to whether or not it is a tax on income, even though it relates to a particular transaction.

You can have income from a particular transaction. I don’t know whether the minister is trying to draw a distinction between income and capital gain, but it is certainly a well known taxation principle that the determination as to whether a particular gain is an income gain or a capital gain is not that it was an isolated incident but relates to the intent with which the party entered into the transaction in the first place.

I am doing something really, Mr. Chairman, that I don’t want to do. I don’t want to expound great taxation principles here in this debate. But unfortunately the minister’s attitude is forcing me to try to do this. If the court comes to the conclusion that the intent with which the transaction was entered was to make a profit, then it is deemed to be income. On that basis then, the minister’s analysis of the British Columbia case is, in my opinion, a wrong one.

But whether I am right, whether Peat, Marwick is right in casting doubts, whether the British Columbia case is applicable here or not, all add to the doubt that surrounds this particular statute.

How can I get through to the minister on this point? It is not enough for the minister to say he has some advice that disagrees with the doubts the opposition has, that disagrees with Peat, Marwick’s doubts and that quickly shoves aside the British Columbia case. Can the minister not come to us with a written opinion from any one of the sources I suggested? And why won’t the minister do that?

The future of this bill rises or falls on what you do with this particular section. This is the key section. If the minister is wrong, and I think there are substantial grounds to argue that the minister is wrong, then the Province of Ontario is making a terrible mistake.

Surely it is not too much to ask the minister to bring forward before this Legislature the best opinions that are available in the Province of Ontario. His reluctance to do so convinces me more and more, as I listen to the minister, that perhaps these opinions have been sought and they weren’t favourable and that is why they are not forthcoming.

I have yet to see this government being reluctant to spend money to seek outside opinions to bolster its position on a variety of issues. For example $15,000 down the drain to get Buckminster Fuller to draw a few pyramids besides Spadina to bolster an election argument. Every day we are hiring somebody or other at great fees to give us an opinion on something or other. It has never been a problem with government to spend money to seek opinions when they think they can bolster an argument by bringing in an apparently independent outside opinion. Why is it so difficult in such a key and important statute, in such an important matter of law? Why is the government afraid to do it? Those are the questions, Mr. Chairman, that demand answers.

Mr. Chairman: The hon. member for Lakeshore.

Mr. Lawlor: Mr. Chairman, just to throw another weight into the debate, the report issued by Price Waterhouse and Co. in a tax bulletin, covering the whole range of this and other taxes as proposed in the budget, doesn’t come down flatly one way or the other as far as I can determine from a quick perusal. It does point out a number of interesting similarities as between the federal and the provincial position. The thing that irritates both the provincial level when a federal tax is being imposed and vice versa is that the taxes aren’t on all fours. The wording isn’t exactly construable. It is almost precisely the same wording. The government revised its taxation legislation here in the past couple of years to bring it in complete line with precision, by and large as compared to the federal; as we did with the Corporations Tax Act not very long ago and as the minister in charge of all these things well knows. Price Waterhouse has this to say:

“The cost basis of the land and, therefore, the profits on the sale for the purposes of the land speculation tax will likely be different from those for federal and Ontario income tax purposes. In addition to possible differences in the amount of deductible costs in determining the amount of a gain, only gains accrued after April 9 will be subject to the Ontario land speculation tax.

“The Ontario system also differs from the federal tax-free zone concept for the measurement of capital gains where the cost base of an asset, for purposes of determining a gain, is the higher of cost and fair market value on valuation day and the lower of cost and fair market value for the purposes of calculating a loss.

“In determining the Ontario land speculation tax both gains and losses in property held on April 9 will be measured with reference to the fair market value of the property at that date without regard to the actual costs of the property.”

Those are some of the other things. Within the contour lines of your own Income Tax Act how do you think the matter stands? Are you proposing to make an amendment therein, particularly with respect to corporations?

Hon. Mr. Meen: Mr. Chairman, so far as I am aware, there would be no amendment required under our Acts in that we treat these much the same as -- well, our Act is aimed pretty well the same way as the federal Income Tax Act. As I understand it, there would be no problem whatever. Indeed, in interpreting our own Act we would consider this a cost of doing business relative to a particular transaction and not a tax on income or on profits.

Mr. Chairman: Does any other member wish to speak on Mr. Singer’s motion?

Interjections by hon. members.

Mr. Chairman: Order, please. We have two matters to decide at this time.

The committee divided on Hon. Mr. Meen’s motion that subsection (1)(d)(vii) of section 1 stand as a part of Bill 25, which was approved on the following vote.

Clerk of the House: Mr. Chairman, the “ayes” are 50, the “nays” are 28.

Mr. Chairman: I declare the amendment carried.

The committee divided on Mr. Singer’s amendment to subsection (1) of section 2 of Bill 25, which was negatived on the same vote reversed.

Mr. Chairman: Is it the same vote reversed? I declare the amendment lost, and the subsection carried.

The hon. minister has an amendment to subsection 2.

Hon. Mr. Meen moves that subsection (2) of section 2 of the bill be amended by striking out “of” in the 11th line, and by striking out clauses (a) and (b) and by inserting in lieu thereof:

“Of 20 per cent of the proceeds of disposition where the corporation beneficially interested in the designated land is, immediately after the disposition has occurred, a non-resident corporation as defined in the Land Transfer Tax Act, 1974.”

Mr. Chairman: Shall I read this over again? It is as printed. Agreed? All right; is there any discussion? The member for Lakeshore.

Mr. Lawlor: I won’t prolong the discussion, I will simply ask why?

Hon. Mr. Meen: I am sorry; I did not hear the member’s question.

Mr. J. A. Renwick (Riverdale): Why? It is a three-letter English word with a question mark after it.

Hon. Mr. Meen: It’s simple. I wish they were all that easy.

The sections as we had previously put them together caught up business combinations of Canadian residents. I had some submissions made to me that indicated this was not in the best interests of the orderly conduct of the business community. This had never been a provision under the Land Transfer Tax Act before. What we were trying to do by this section was to bring in a provision covering the subterfuge of a merger of a non-resident corporation which could effect an end run around the 20 per cent non-resident land transfer tax. Consequently that had to be in this Act and we had built in that provision. In the course of picking up mergers for the purpose of evading the 20 per cent tax it inadvertently caught the ordinary merger or amalgamation of two or more resident Canadian corporations which have never been taxed in these circumstances and it hadn’t been my intention to tax them now.

Mr. Lawlor: But what you have omitted from the previous legislation is a clause which I think you are probably going to claim was redundant -- clionastic, as the Greeks said to one another as they passed at noonday. On this matter of not a non-resident corporation, I take it that your position is that that was already included under the Act which has been proclaimed, the Land Transfer Tax Act, and therefore there is no need to have it under this and so you are omitting it from this particular bill. Is that true or not?

Hon. Mr. Meen: If I understand the hon. member correctly, what we are trying to do here is explained in this way; with the mechanism available for the designation of a non-resident corporation and the other provisions in this Act, we can catch the kind of transaction which would not ordinarily be caught under the Land Transfer Tax Act where there is no triggering of the information by the registration of a document.

Under subclause (vi) referred to in section 1(1)(d) and under subclause (viii) of 1(1)(d) where we have an effective conveyance of real estate by the sale of shares under (vi) and of a merger or amalgamation that could occur under sub (vii), there could very well be an effective change to a non-resident and so it was appropriate to pick that up by this section in the Land Speculation Tax Act although it’s aimed at the non-resident 20 per cent tax set out in the Land Transfer Tax Act.

Mr. Lawlor: We are not still on all fours, Mr. Minister, through you Mr. Chairman, but I am simply directing my remarks to perhaps a fairly obvious point. You had a clause (a) in there previously, clause (a) under subsection (2) which has been just dropped and omitted. The reason why you have taken it out, I take it, is because it is already covered in the other statute. Isn’t that correct -- or is it? What goes on here?

Hon. Mr. Meen: No, Mr. Chairman, it is not covered. What we are saying here is that in the case of a merger or an amalgamation, there has never been an intention to tax and we are not purporting to tax now. There is no transfer of title in this case, when we are not dealing with non-residents, where we are dealing with a merger or amalgamation or a sale of shares pursuant to subclause (vi) and (vii) of 1(1)(d); there never had been such a provision and we don’t propose to have it now.

What we had intended to do was more accurately set forth in clause (d) to catch the non-resident corporation that attempts to purchase without payment of the non-resident tax, therefore placing itself in a more competitively advantageous position than a corporation that might take a more direct route. We would catch them where they sought to accomplish this same end by way of a purchase of the shares under subclause (vi) or an amalgamation under subclause (vii); in either cases of which they become a non-resident corporation within the definition of the Act.

Mr. Chairman: Shall this amendment carry? Carried.

Mr. Lawlor: Subsection (3), Mr. Chairman?

Mr. Chairman: Anything further on subsections (3) or (4) of section 2?

Mr. Lawlor: Yes, just on (3), and a very technical procedural point. When this tax is levied I take it that where the affidavits disclose that the tax is leviable the amount of money would be, in some cases, very large indeed. Where is it paid? What is your intention with respect to that? Do you pay it as you proffer your documents at the land titles office or the registry office? Or do you pay it some time in advance of that? What is the machinery connected with that situation?

Hon. Mr. Meen: Mr. Chairman, the affidavits would be required, and under subsection (1), of course, that’s the conventional 50 per cent tax; subsection (2) deals with the non-resident 20 per cent land transfer tax payable. It would be payable in the same manner as any of the other taxes. If it is necessary for us to investigate or check documents, then of course it would be perhaps prudent for the people entering the transaction, particularly when involved in a merger on an amalgamation, thereby attracting a tax, to arrange to pay it at the normal time, of course, and not when they are in the registry office. The only time they would show up in the registry office would be to file a copy of the letters patent of amalgamation, if that’s what they are called.

Mr. Lawlor: That would be covered?

Hon. Mr. Meen: I would not expect they would ever be there. So the normal provision, I would think, under those circumstances, would be a payment to the Minister of National Revenue, who would remit the funds to the Treasurer.

Mr. Chairman: Shall subsection (3) stand?

Mr. Singer: No. On subsection (3) Mr. Chairman, I notice the minister wants to have the right to prescribe interest rates by regulation. That comes in the subsequent section and it’s referred to here. I’m not sure that I like that kind of scheme. I’ll be talking about the regulatory sections a little later. But in the meantime, if it is foreseen that the rate of interest can vary, why do you set out nine per cent at this time? Why don’t you set up some kind of a formula? Is it reasonable that you should pay nine per cent and not the rate recently prescribed by the Bank of Canada, that sort of thing?

Hon. Mr. Meen: Mr. Chairman, there is always difficulty involved when you are introducing a piece of legislation for the first time rather than amending one. In this case we had set out some interest rate which we thought was reasonable. As every day goes by it seems that yesterday’s rates were a little on the low side. But the purpose here was to establish a rate of interest, because of course there could be transactions on which interest might accrue from and after April 10.

So when you initiate a new piece of legislation like this it has to be spelled out as a fixed amount, so that people will know where they are at, to use the colloquial, before the bill is passed and when we are looking retrospectively at transactions following April 9. So it is spelled out here and that’s the amount. Of course in taxing Acts of this sort there is normally provision for variation on the interest rate, and consequently the further modification of the cost.

Mr. Breithaupt: Perhaps the minister could advise us, Mr. Chairman, of the terms and conditions on which he would expect that a different rate would be prescribed. One might think, indeed, that this rate of nine per cent will last perhaps for the length of time that it takes to pass this bill and you may well be into some other rates beyond then.

Just what are the criteria going to be for your rate? Are you going to take the Bank of Canada discount rate and add a percentage or two? Just what do you think is going to be your guideline in setting this kind of a rate?

Hon. Mr. Meen: Mr. Chairman, I will take advice from various quarters when this question comes up. Nine per cent was a little higher than the Bank of Canada rate at the time when this bill was prepared in March, and I think that, by and large, my philosophy would be that it would run a little bit higher than the prime borrowing rate, as an incentive to see that it was paid.

Mr. Breithaupt: One would think that that would be the case, Mr. Chairman.

Mr. Singer: Mr. Chairman, I’m still not happy with that. I recognize it is not a simple thing to resolve. On the other hand, following up on the thought put forward by my colleague from Kitchener, surely there should be some kind of criterion put into this and some kind of frequency at which it will be reviewed. Certainly it has been my experience that in the various statutes where we fix interest rates they stay there for about 50 years unchanged, and there is no regular review.

Since you are reserving your right to change the interest rate by regulation, I would like to see some tests or mention of frequency or how often it’s going to be reviewed or some kind of criteria set out here as to when it’ll be done, how it’ll be done and how frequently it’ll be reviewed.

Hon. Mr. Meen: Mr. Chairman, I suppose one could go on ad nauseam in the refinement of these sections. I think this accords an adequate amount of flexibility. The regulations themselves have established the rate, and regulations under an Act that is new like this would be under constant review. I really couldn’t imagine that we would want to tie ourselves down. We might say they would be reviewed quarterly. It might be that I’d want to review them much more frequently than that in the changing set of circumstances.

Mr. Singer: That’s really not the answer, because surely when we get into a taxing statute -- and you’ve heard me complain about this before -- the more that you can put in the statute, the better it is for the people who are going to be affected by the statute. The minister is asking that he be given the broadest regulatory powers that are imaginable. It’s wrong, to my mind, particularly in the taxing statute when you say you can regulate the right of interest anytime you want. Again, I don’t want to debate the regulation section at this moment, but your first one, that you can exempt anybody from tax at any time for any reason, is a wrong principle to put into a taxing statute.

I think the minister should be prepared to tie himself within certain tests and say it will be reviewed every six months or every year, and that a report will be made to the Legislature, or it will be tied in in some way with the Bank of Canada discount rate or the prime borrowing rate. I don’t care what tests you put in, as long as it is readily ascertainable so people are going to know where they are going. If, as has happened in so many of our statutes, this interest rate isn’t changed for 20 or 30 or 40 years, it really is of no help to the people who are going to pick up the statute to understand why those peculiar people who in 1974 passed statutes put on the peculiar figure 9, any more than if we had nine per cent in a statute like this three years ago anyone would have been able to understand it at all.

I think that the minister really has a duty to put in some kind of elaboration as to the method by which the regulation is going to be carried.

Mr. Chairman: Shall this section stand as part of the bill?

Mr. Lawlor: No. One further question, again on the technical point I raised at the very beginning. It’s a land transfer tax. If the individual is taxable, is it anticipated that with respect to this non-resident corporation declaring itself to be such the simple case clears itself in advance by going down to where you have an office set up on one of these streets over here. These are just loaded with documents. These are going to be subject to approval -- supposed to be -- by what? Midnight tomorrow night? I know it has been waived, but apparently out there they don’t. They are still performing gyrations over the whole thing. I heard from my own accountant this morning about it. He was terribly worried about whether he had any time left.

In any event, when they approach the wicket to register their documents, it appears from the face of the document now as a corporation. Is it your intention that that tax be collected there at that time or the document be not registered unless it is? You may say that as prudent people they will pay their tax in advance and obtain some kind of certificate from your office which they will then hand to the registrar. And so the approvement is paid in advance. But if it is not so paid, is it possible to pay at the wicket on the spot? What happens if they don’t, either through ignorance or through recalcitrance, if they just refuse to pay? Have you worked those details out at all yet?

Hon. Mr. Meen: I understand my staff have worked them out, Mr. Chairman; I have not been personally involved in this. I am given to understand that in the case of a non-resident, effective, transferee or when there is a question of this nature the matter is dealt with by my ministry staff rather than by the personnel out in the field itself, you might say, in the various registry offices. It makes me wonder if at some time we wouldn’t have the tax collectible right at the site. Except, when you recognize the problems confronting you under the Speculation Tax Act and when you have to have an evaluation done in order for it to be ascertained what amount of tax is payable, I would foresee that at least for the immediate future we are going to be involved with having to inspect each one of these transactions in the ministry offices themselves.

Mr. Lawlor: Therefore the public should be fairly severely warned that to wait until the last minute and to approach the registry office with documents in hand will mean almost invariably they will be turned away. They have to seek out their clearances and when they approach they have to come with clean hands; they have had to pay the tax already. Then they will run into no difficulty with respect to their documents.

Hon. Mr. Meen: I would observe that what I have been saying, of course, refers to the speculation tax. When you are talking about that you are talking about a period of time yet in which we don’t consider that any significant accretion in value will have occurred so there isn’t any particular mechanical problem that I envisage immediately. I do see what the member is talking about and I would concur with him.

I would like to see that capable of being handled at the site, but if you recognize the kind of problem we have you will also realize that maybe we are going to need a computer printout arrangement in every one of the registry offices to feed back the information available -- and it will be available through the assessment part of my ministry -- in order to establish values and so on when there may be some point come into question.

I don’t know, whether we will be able to have that sort of mechanism available for the convenience of the public in the 60-odd registry offices around Ontario. I’d like to think that’s a measure of sophistication we will be able to achieve.

Mr. Lawlor: I doubt if that will take place. I think you have to make the legal profession particularly cognizant of that -- that they have to seek prior clearance. That will be all there is to it.

Mr. Chairman: Shall this subsection stand as part of the bill?

Mr. Cassidy: I wanted to ask, Mr. Chairman -- I’m afraid I wasn’t here on Tuesday and the question may have been raised then -- does the minister intend that the assessment records will be the basis of valuation at April 9? Is that his intention? Or has he in fact stated what the policy will be as far as that is concerned?

Hon. Mr. Meen: That is the intention, Mr. Chairman. We believe we can assess a reasonable figure for market value as of VO Day, or whatever we are going to call April 9.

Mr. Lawlor: VD Day No. 2.

Hon. Mr. Meen: If this mechanism is as effective as we think it will be within the ministry we will be able, fairly speedily, to establish a value on any particular parcel in Ontario as of that date.

Mr. Cassidy: Maybe I can follow up and ask when will the ministry be able to give that kind of valuation as of April 9, when people begin to ask? When will you be equipped to provide that kind of information?

Hon. Mr. Meen: We are equipped now. The ministry has been doing that in the succession duty office, of course, for quite some while; in the assessment office also. What I was referring to was the further degree of sophistication with the computer system which will be available in the residential area by the end of this year, and for the commercial and industrial area by roughly this time next year. We can do that now for any property which comes up, but the mechanical work involved in coming to a fair valuation on any particular property is somewhat greater now than it will be later.

Mr. Chairman: Shall this subsection stand as part of the bill?

Mr. Cassidy: No. I am concerned because the previous Minister of Revenue (Mr. Grossman) said that due to difficulties within the ministry the whole assessment programme was being delayed by a period of two or three years. This minister says his department is ready. How many instances of valuation for succession duty would the ministry have had during the course of a typical year? How many does it expect under this particular Act? I would suspect that --

Mr. Chairman: I fail to see --

Mr. Cassidy: -- something between 70,000 and 100,000 valuations will be required in the course of a normal year as part of the Land Speculation Tax Act.

Hon. Mr. Meen: We do expect to have an increase in the workload in this area but I don’t anticipate any particular problems.

What my predecessor was speaking of was the completion of our assessment and the placement of that material into computer record form as well as a detailed analysis, occupying roughly 18 months, of the effects of the use of these market value assessments on the tax picture of the taxpayer. It is not the matter of evaluation that is bothering us -- we think we will have pretty accurate assessment figures very shortly -- but the impact of the use of those without understanding the shifts within various classes.

Where some have been assessed at 10 per cent and brought up to market value and others have been assessed at 30 per cent and brought up to market value, obviously if the mill rate applied to the fellow whose property has been assessed at 10 per cent is the same mill rate as applied to the fellow whose property is assessed at 30 per cent, he is going to notice a significant increase in his taxes.

Therefore, we have got to look at the various elements surrounding that before it is put into effect in the year 1976 for the year 1977, but what we are saying at this stage is that we should have the capability, in terms of staff, material and information, to cope with these problems as they come along.

Mr. Cassidy: What I am saying, Mr. Chairman, is this --

Mr. Chairman: Order, please. This seems to be beyond this particular subsection.

Mr. Cassidy: No, I don’t think so. It says the tax will be paid at the time, and the question of the member for Lakeshore was related to the computation of tax at that particular time. I understand that this question hasn’t been raised previously, although there would have been one or two occasions when it could have been raised previously, Mr. Chairman, and possibly you could bear with me.

Mr. Chairman: It does not seem to affect this section. I have allowed the question for the sake of information. Is there a further point of clarification?

Mr. Cassidy: I am asking for a bit of co-operation from the chairman, Mr. Chairman. I haven’t entered into this debate in any significant way up until now --

Mr. Chairman: The chairman can’t --

Mr. Cassidy: -- and it was not possible for me to be present on Tuesday.

Mr. Chairman: Order, please. The chairman has no control over whether you are here or not in that respect, so you can’t go back and open up the whole field again. In allowing the discussion, I allowed it for the sake of information -- but it doesn’t affect subsection 3.

Mr. Cassidy: Mr. Chairman, may I say then that there will be an occasion later on during the course of that bill when this will be raised, so it would be simple enough to raise it now while we are sort of halfway through the discussion.

Mr. Chairman: Let’s raise it at the appropriate time then.

Subsections 3 and 4 agreed to.

Section 2 agreed to.

On section 3:

Mr. Chairman: Any comments, questions or amendments on section 3? The member for Waterloo North.

Mr. E. R. Good (Waterloo North): On this section, there are two questions I would like to ask for my own edification.

Regarding the duties of an executor as they pertain to the payment of this tax, could the minister inform me where property that is designated property and subject to taxes is be transferred by terms of a will in an estate which would be taxable, if I am correct in assuming that the payment of that tax would then be deducted in reducing the size of the estate as it relates to provincial succession duties?

Hon. Mr. Meen: Well, you are asking me for a legal opinion in an area outside this tax, but I think that my off-the-cuff opinion would be that it would not be deductible, because a disposition does not occur pursuant to the terms of the will or of the Devolution of Estates Act if it passes on in intestacy, but rather it would occur when the executor or the administrator subsequently conveyed the fee in the property, either to a beneficiary named in a will or pursuant to his authority to recover moneys from the assets to then distribute among the beneficiaries. So it would be payable at that time. To touch on the question of whether it is a deductible item, it would not be because there is the basic worth of the estate, minus the basic debts and the statutory allowances for other charges that may be made against the estate -- funeral accounts, for one -- to derive a net value for succession duty purposes in the estate.

There are other parts of the Succession Duty Act that bear on a beneficiary, but I don’t think they would affect us here. Therefore, to give a short answer to the member’s question, the tax would not be a deductible item for the purpose of succession duty calculation.

Mr. Good: Thank you. That is most alarming news, Mr. Chairman, and it probably doesn’t just affect the wording of this particular section.

Could the minister answer a further question. If property is transferred, say, outside the terms of the will but transferred because it was held as, say, joint tenants and not tenants in common, would that transfer be considered a disposition under the terms of this Act?

Hon. Mr. Meen: I would say it’s not considered a disposition.

Mr. Good: It is not?

Mr. Chairman: Section 3. The hon. member for Lakeshore.

Mr. Lawlor: Unavoidably, as the minister probably knows, my colleague from Downsview and myself were with the attorneys general of the provinces of Canada on last Tuesday night after having given our very best efforts during the afternoon to bemuse the Minister of Revenue. On a number of occasions during the debate I have raised the point about bequests and the general dispositions of land under wills, and so forth. Did you go over it in my absence the other night? Or have you addressed yourself to the question I originally asked at the beginning of the first section?

Hon. Mr. Meen: It was the matter of the trust. The question the hon. member raised was regarding the removal of the word “trust” from one of the earlier sections. I think that was dealt with under subclause (p) of 1, probably in the member’s absence.

Mr. Lawlor: Oh, that’s a dirty trick. It does affect the central portion of this section. This is where the tax falls. What’s it all about? Why is the section in there at all? Is it for constitutional reasons, a business of direct and indirect taxes? Is it construed that the trustee is not the owner in such a way as to bear the tax brunt frontally on his own head? Or, if he were placed in that position, that it would be indirect taxation, which the province can’t do? So that at one portion of the thing, you seem again to talk with a forked tongue.

You say in one part that the trustee, executor, and so forth, the person acting in fiduciary capacity of designated land that is disposed of, is not, as such, personally liable for the tax. Then you go on to say that he is. I put it to you quite bluntly that’s what you do say. Do you agree?

Hon. Mr. Meen: No, with respect, Mr. Chairman, I don’t. I can understand what the member is saying. But what we’re saying here is actually that, in his capacity as an executor, or as a trustee, he has a basic responsibility to see to the due payment of the debts of the deceased. Now, it’s not his personal liability to pay that so we say he is not personally liable for that. But if the money has come into his hands in just the same way as an executor or trustee is responsible for collecting in the assets of an estate, payment of the debts and eventual distribution of the assets among those beneficially entitled, and if he gets in the moneys resulting from a transaction out of which a tax liability arises, then it is his responsibility to see that that liability is paid like any other debt of the estate.

Mr. Lawlor: It is not quite as simple as that. It’s not a case of if the money comes into his hands. If he doesn’t damn well see that it gets there -- if he doesn’t collect, as well as what he does collect and doesn’t remit -- then it seems to me all to come to the same thing. I wonder why? It’s like the dance of the emu in the Kalahari -- a huge section like that which does, fundamentally impose a tax both for omission and commission, for negative and positive, for doing it and for not doing it. He’s caught. I thought it was for constitutional reasons but if it’s not for that then I don’t see much worth in it.

Mr. Chairman: Shall this section stand as part of the bill? The member for Ottawa Centre.

Mr. Cassidy: Yes, I have a question about it, Mr. Chairman.

Part relates to this. That is, the question of the amount sufficient to pay the tax on the designated land is a concept which in my mind is relatively unclear. The second thing is that the penalty which is imposed in subsection 2 of this section can in fact be far heavier than it would appear was the intention of the legislative draftsman. If the executor, administrator or trustee doesn’t collect an amount sufficient to secure the tax he is guilty of an offence and is liable to pay an amount equal to 150 per cent of the tax.

For the sake of argument, the tax may be $50,000 on a substantial property worth $250,000 or $1 million. The amount by which the trustee under-collected could be $1,000 or $2,000, but his liability is not 150 per cent of the amount under-collected, it is 150 per cent of the total amount of the tax, according to the reading that I have of this particular subsection. Would the minister confirm that?

Hon. Mr. Meen: I think the amount of the tax as I would have tried to interpret it would have been the amount in reference to the amount that was unpaid.

Actually, section 2 is taken from section 26 of our Ontario Succession Duty Act, which has precisely the same wording, at least essentially the same wording. It’s based on it, with the same 150 per cent reference and the like. That has stood the test of time in our statute for some years.

Mr. Cassidy: Well, the succession duty is something which I would suspect is a lot more fixed and immutable than the tax that we are talking about in this particular bill. By its very nature, a speculative tax is rather difficult to define. When you get into the number of exemptions, loopholes and deductions which are put on this particular bill, it becomes more difficult.

In the case of an estate there is an established procedure for probate which the lawyers in the House can tell more about than I can. You value the property. Much of the estate is often in forms which are very readily valuable -- for example, mutual funds, stocks which can be valued at a particular day, and other things like that.

For the value of the real property involved, once again you simply ask your appraiser to go in and say, “How much is the house worth?” The house is worth $45,000. “How much is the cottage worth? How much is the shop for the building or the investment property worth?”

That’s all they have to know. They don’t have to get into the business of differentials. And it is when you get into the question of differentials, of course, that you run into some of the difficulties that I was trying to talk about before. The reason I raised that question before was simply this: The assessment now being made by the minister will be, one assumes, internally consistent. If they’re 10 per cent over market or 25 per cent below market in a consistent way, if they are okay in relation one to the other, then it is a relatively fair system of levying tax on property.

But if valuations for this particular tax have got to be made between current market value and a deemed April 9 value, calculated according to assessment value ratios which may have been five or 10 or 15 per cent out of line with the market, you get the trustees in a very difficult position. They could make a decision about the amount of tax which ought to be deducted and then find that they were wrong and that the ministry is saying, “Look, on the books that we cooked, you ought to have laid aside another $5,000 or $10,000.”

You now find yourself liable not for 150 per cent of $5,000 or $10,000 but for 150 per cent of the full $50,000 or $75,000 that was there.

I know that the minister may say that the courts are not going to levy the full amount. It is possible the ministry would seek to avoid taking any action where it was convinced there had been honest error and there had been no intent to defraud the Treasury. But it seems to me that these points should have been included in the law and anything entered here in Hansard is not sufficient since the declarations to the minister are not equal, in any respect, to the wording of the law when it comes to interpretation by the courts.

Hon. Mr. Meen: I am not particularly convinced by that argument, Mr. Chairman. The executor or trustee or administrator would apply to the minister for an assessment, filing with the minister the necessary documentation and obtaining an assessment of the amount of money payable. It seems to me he is not in any great position to fiddle -- if I can use that term -- the figures because eventually the assessment division is going to bring in some figures which will either confirm those he has or will show that his acquisition cost was really lower than he allowed it to be or that his disposition price was higher than he was laying it out to be, thereby suggesting there should be more tax payable.

The member for Ottawa Centre wouldn’t be expected to be conversant with practice under the Succession Duty Act but the areas to which he makes reference are probably the most straightforward areas. I would mention to him that under that Act, my ministry has to contend with street certificates, with bearer bonds, with unregistered assets of one sort or another which are still assets of the deceased and which still have to be accounted for but which the executor might well be in a position to dispose of without any particular record.

It follows, then, whether the member is talking of the Succession Duty Act or whether he is talking under subsections 1, 2 and 3 of section 3 he is still talking of a very significant amount of tax potentially arising and the possibility that someone, under this Act or under the Succession Duty Act, could fail to disclose some matters to the ministry when, under this Act, they are endeavouring to obtain an appropriate figure for the tax. That is part of it. I think the penalty, as I say, has stood the test of time and is an appropriate one to have in this section, as I suggest it is appropriate under the Succession Duty Act.

Mr. Cassidy: I don’t believe in proposing amendments because I think the whole bill is so riddled with loop-holes it should have been sent back and the government should have brought in a decent kind of tax on speculation rather than this halfhearted concoction.

However, we are faced with a problem here. The minister knows I have no particular compunction in recommending, as I have done in this House, much heavier speculation taxes than are being imposed by the government, so that doesn’t bother me. However, the question of fairness is involved here, too. He points out, rightly, that in the case of acquisition of a property after April 9 there will be an acquisition price. There will then be discussion between the transferor and the ministry about the value of the exemptions over the course of the time the property was held, and then there is a disposition price. On that, the difficulties are perhaps somewhat similar to the difficulties of valuation which you have under the Succession Duty Act.

However, for the first two or three years of application of the Act, the period when it is hoped, according to the Treasurer, that the Act will have its greatest psychological and real impact in Ontario, Mr. Chairman, the properties changing hands will be mainly properties owned by the transferors as of April 9. The value of those properties will be exceptionally difficult to assess and there is going to be a tremendous amount of dispute about that. After all, the value of properties in Toronto has gone up by 43 per cent over the course of the last 15 months; right now, the average value of property seems to be going up by four or five per cent a month.

In another month or two, if one is to believe the Minister of Housing (Mr. Handleman), the chairman of the real estate board and the Treasurer, some of these values are going to come back down again temporarily.

Mr. Chairman: I am wondering if the hon. member knows that this section, as I read it, deals with trustees. It should be --

Mr. Cassidy: That’s right. I am talking about the problems the trustees will have, Mr. Chairman, when they try to assess the amount of money that they are going to be asked to put aside. Let’s take this set of circumstances, where a sale has been made and the transferor instructs his lawyer or his trustee, or his beneficiaries instruct his executor, to go ahead, and close the deal in 30 or 60 days. The ministry is asked for an assessment, and wonder of wonders, they manage to get it out in 15 or 20 days. And they come up with an assessment which is, for the sake of argument, twice what the transferor or his agents believe is reasonable, the property having been held in those particular hands over a period of time, possibly even a period of years, prior to April 9, 1974.

Now, what is going to happen? The ministry is saying to the executor or to the trustee that under no circumstances is he to accept the instructions from his client when he says “pay what seems reasonable in the circumstances,” rather than paying the assessment which has been laid out by the ministry. The assessment by the ministry is valid only insofar as it is accepted by the taxpayer. I think that is correct. If the taxpayer chooses to challenge it, then it is an assessment that is created, I presume, one way or another by the courts, where these things can eventually wind up.

So, the assessment by the ministry is only valid insofar as it is accepted; in fact, it is in the nature of a tax ruling, which the taxpayer can choose either to accept or not to accept -- in the nature, one might say, of the kind of tax, really, which the minister chose not to seek from the federal government.

The minister says that the trustee is honour-bound to go to the ministry and seek this tax ruling, and, with this situation, he goes to his client and says: “Okay, out of the proceeds of this deal, I have got to give $100,000 into the ministry, otherwise they are going to zap me for up to $150,000, because that’s what the penalty is right here. Now, if it’s $98,000 rather than $100,000, and it’s not the $2,000 on which they’ll zap me for 150 per cent, then that risk, you might say, I am willing to take. But, I simply will not go along with $150,000 at writ, even though I agree with you completely in thinking that the ministry and the ministry’s appraisers and valuers are absolutely zany; they are insane, they are wrong, and I counsel you as my client to fight that ruling. I think it’s worth spending $5,000 or $6,000 in legal fees to go to the courts because the decision of the ministry has been unconscionable.”

You get a situation though where, unlike many other situations, the taxpayer is, if you will, judged by the ministry and has to abide by that ruling until he can wrest the money away from the ministry in the courts. Now, as I understand it, in other sectors of tax law, for example, in income tax, the taxpayer makes a personal self-assessment, he submits his forms, he submits his cheque and he says, “Here you are, because of these deductions and these other privileges and so on that are law, I have to pay you $6,000 or $10,000 in tax and here it is.”

The Ministry of National Revenue up in Ottawa, which handles these things for us, takes a look at the appraisal made by the taxpayer and if it disagrees, it may come back and say, “Look, we are assessing you, not at $10,000 but at $15,000, and if you accept it, fine, give us the $5,000, and if you don’t accept it, then you are going to have to appeal.” And that’s what is done. But the significant thing about that appeal is the fact that the appeal is carried out while the money is in the taxpayer’s hands rather than in the government’s hand.

Mr. J. E. Bullbrook (Sarnia): That’s not right. That’s not correct.

Mr. Cassidy: Eh?

Mr. Bullbrook: You’re wrong.

Mr. Cassidy: Am I wrong?

Mr. Bullbrook: You have to pay the tax because --

Mr. Cassidy: Oh, I beg your pardon, you have to pay the tax once you are assessed. But the tax is paid into a trust fund, is it not, when you appeal?

Mr. Bullbrook: The government has the money.

An hon. member: It can be paid into court.

Mr. Cassidy: It can be paid into court?

Mr. Bullbrook: No, no, no. You just pay it. You can’t pay it into court.

Mr. Cassidy: Okay, well, let me try it again, then. The appraisal is made by the individual and it’s only if the assessment disagrees with that personal appraisal that the ministry orders the taxpayer to pay the additional amount in order to carry out his appeal.

In this particular case though, because these things are almost entirely handled by trustees and agents; the trustee or agent is compelled to honour the assessment made by the ministry before he and the taxpayer have reached a decision. That is a very significant change, I would suggest, in the way in which these things have been carried out heretofore.

Mr. Chairman: The hon. minister.

Hon. Mr. Meen: No particular comments, Mr. Chairman. We are dealing with the liability for payment of tax, not with the procedure on assessment.

Mr. Bullbrook: I suggest most respectfully that we are dealing with the procedure. I want to ask several questions that cause me vital concern.

Mr. Chairman: The hon. member for Sarnia.

Mr. Bullbrook: Before I do, Mr. Chairman, I want to convey some of my observations to the minister -- and I think there are times when he respects the validity of comments I make in the House. I have just flown back from my riding.

I want to tell you that this tax is having an impact upon the economy of this province the like of which hasn’t been seen in many many years. I want to tell you that you are stultifying the normal and usual dealing in real property commerce in this province. I want to tell you you are putting the legal and accounting professions in an almost untenable position with respect to their responsibility. I want to tell you you are putting your own public servants who have sworn to uphold the law in an extremely delicate and difficult position with respect to this.

I want to ask you now in connection with this particular section, is a solicitor acting in his normal capacity with respect to the disposition of designated land where exemption does not occur in a fiduciary capacity?

Hon. Mr. Meen: Mr. Chairman, I have assumed in looking at this section, in reference to the hon. member’s question, that if he receives money into his trust account of this nature, he might find himself accountable. I have observed to myself that were I practising I might worry just a little bit about the disposition of the funds which I received on the sale of a property, unless I were absolutely certain of the way in which there might or might not be a tax liability on that.

Mr. Bullbrook: I have almost come to the conclusion that I want to stop using the verb “implore,” but I implore you again to recognize the ramification toward solicitors, in general, with respect to this statute.

As of this morning in the city of Sarnia the land registry office is not obliging the solicitors, if they feel an exemption is not applicable, to file the normal affidavit that was provided to solicitors in connection with the exemption. I ask everyone in the House, not just the lawyers, to think about what you are saying the lawyers must do. They have an obligation to clients to act on their behalf in their best professional manner.

I give you an example of a transaction entered into on April 11 that is to close on Monday, May 20. We then will not have passed this statute, there is no doubt about it. The statute will not at this time be law. No one will be assured what the law will be applicable to that transaction, and yet for commerce to continue in its normal fashion, for the lawyer to undertake his obligation, he has two things to do: he has to act in the best interest of his client to complete that transaction next Monday, where time is essential to his client’s legal position. He must attempt to advise his client as to what the application of this tax might be, not knowing what the law will be at the time. And superimposed upon that he has the obligation of withholding from his client sufficient moneys to take care of the tax -- I see the minister shaking his head, and I don’t want to continue if I am wrong. Stop me if I am wrong. Please do.

Hon. Mr. Meen: All right. Yes, I am pleased if I can help the hon. member in this instance. We have been issuing lien clearance certificates on these transactions since Wednesday, April 10. Throughout these weeks when the bill has not been law there has been the question of a lien arise. Now the point is that my ministry does not take the position that since April 9 there has been any significant accretion in value. We are issuing lien clearance certificates, and the lawyers need have no worries about that.

Mr. Bullbrook: I obviously don’t have the ability to express myself properly, obviously I don’t.

Hon. Mr. Meen: If the hon. member will bear with me, what I am trying to say is that within our competence to issue these lien clearance certificates, and reassure the counsel acting for the clients in these transactions that there is no problem, we are doing our best to see that they are accommodated.

Mr. Bullbrook: Is the minister not aware that the majority by far of the exemption certificates that he has granted were because of the fact that the transactions were entered into prior to the date of April 10?

Hon. Mr. Meen: That may be.

Mr. Bullbrook: Sir, please. You see, when you give me answers like that saying you are getting lien clearances, surely you are -- but the problem is they are so simple to get, and they have been, because the transactions were entered into; and the lawyers could quite validly and in good faith say that there was an obvious exemption.

Now we are getting into the time when there isn’t the exemption but the lawyers find, for example, that they have transactions when the funds from one transaction are called upon to complete a series of transactions in which there might not be an exemption. Just think of the implications of this. Obviously not many people are concerned with the implications; I don’t know why I concern myself with it so much, frankly.

I want to say to you, sir, if the lawyer is in a fiduciary capacity, I don’t think any lawyer worth his salt, legally or ethically, is going to put himself in a position of distributing any of the funds from his trust account with respect to this tax. I take it you agree with this?

Hon. Mr. Meen: Yes.

Mr. Bullbrook: Do you realize that, as of tomorrow morning, were I doing a transaction and having regard to the implications of this statute, I wouldn’t pay out one red cent to my client? Yet that is my client’s money, impressed with a trust for him; yet I am impressed with a statutory trust now to collect the tax on behalf of the government of Ontario or suffer a penalty of 150 per cent. I’m not? Tell me where I am wrong, I am sorry.

Hon. Mr. Meen: No, only if you receive the money into your trust account. You can always --

Mr. Bullbrook: That’s not what I am talking about.

Hon. Mr. Meen: The solicitor for a purchaser will always see that the purchaser’s money is paid to the vendor unless there is a direction signed by the vendor authorizing it to be paid in some other direction as, for example, to the vendor’s solicitors. That is a nice convenient mechanism we have all used for years in order to get the money into our trust account, supplemented perhaps by other funds from mortgage advances and the like, to use on the purchase of another place.

At this time, while we are in this transitional stage and perhaps for some while in the future, I can imagine the legal profession may feel itself in a much safer position if lawyers say to their clients, “Give me a direction to ask your purchaser to make so much money out of your purchase price payable over to Y, because I need that amount of money to buy your home.” We often do that anyway; it keeps the money out of the lawyer’s trust account. I would expect they may well want to be doing that.

Mr. Bullbrook: I just can’t describe how I -- I just can’t believe what I am hearing from a normally sensible practitioner of the law.

I would suggest off the top off my head -- and I invite contradiction again -- that 80 per cent of the real property transactions handled by lawyers in the Province of Ontario require payment into trust accounts for the purpose of general commerce.

In most cases they have a mortgage to pay off and they want to have those funds in order to undertake to discharge the mortgage. On many occasions they have collateral obligations which have to be taken care of. You mentioned paying the agent. I happen to refuse to honour that direction. I don’t pay the agent; I leave it to my client to pay the agent. That’s a contract between the agent and the principal which I don’t happen to honour; that’s up to him.

Hon. Mr. Meen: I agree with you.

Mr. Bullbrook: Perhaps some solicitors feel that obligation but aside from that you know yourself, in the majority of circumstances by far, the funds have to be paid into the trust account. Are you wanting to cut me off?

Mr. Chairman: No.

Mr. Bullbrook: Mr. Chairman, I can assure you of this; I am right on the point.

Hon. Mr. Meen: Mr. Chairman, on this point I would support the member for Sarnia. He is talking to this general section --

Mr. Bullbrook: I am talking about something I am sure my colleagues are going to get up on. My colleague from Downsview and my colleague from Kitchener are champing at the bit for me to sit down so they can add to this because of the ramifications. I want to say I am sure every lawyer in the Province of Ontario, now that the minister has said that in his opinion such lawyer acts in a fiduciary capacity -- may I say I agree with you? I don’t think a lawyer taking funds into his trust account can, in any way, extricate himself from the impact of that section. None whatever.

I want to hack in for a moment. This is something that I could never understand and that I’ve discussed with others. It’s been touched upon directly by the hon. member for Ottawa Centre, with whom I don’t agree very often, but I agree here. Why the significant onus on the part of citizens of Ontario to collect the tax for you? This I can’t understand for a moment.

Normally, the only type of taxes that you collect are those direct taxes that you’re called upon, unwillingly at times, to collect, and you collect those through vendors. Your sales tax, your gasoline tax. But your normal type of tax is collected, as is the federal tax, with a foundation of, I would say, propriety and understanding with respect to the taxpayer. The taxpayer calculates the tax under the law and remits to the tax collector those taxes. You do it in every instance that I can think of. Your succession duties are payable in that fashion. Your share of the personal income tax is payable in that fashion; and I would think should be so payable.

I say to you that the land transfer tax is an entirely different situation. You are entirely justified in taking the position that, with respect to non-resident sale of a property in the Province of Ontario, you must protect the public weal, as does the withholding provision of, the Income Tax Act. That’s most eminently sensible. And I doubt if you’d hear anybody take issue with that.

But why, first of all, is it necessary to invade the general commercial activity by saying you will extract that tax forthwith? And, secondly, why do you put an onus on the legal profession? Because let’s face it, with respect to normal trustees, administrators, executors and others in a fiduciary capacity, they are normally established on a rather long term basis. I think the minister would agree.

Hon. Mr. Meen: Trustees.

Mr. Bullbrook: Well yes. When you have trustees, it is a long term relationship. The fiduciary capacity that really has the volatile impact here is the solicitor-client relationship. Again I say to you, I agree that they’re in the fiduciary capacity. How we can contemplate, even when the tax position is stabilized, putting that type of onus on a solicitor is beyond me.

Secondly, I say to you again that this is a twofold trust. First of all, he’s got a trust to his client to account to him for those funds. You impose upon him a statutory trust to account to you for taxes. Thirdly, may I say to you, and this is what causes me more concern than anything, if you couple your subsection (3) and the other subsections (1) and (2) together, here’s what you’re asking of solicitors -- you’re asking them to assure that they pay the tax on behalf of their client, and that they calculate interest at nine per cent, from the time that the tax should have been payable.

Mr. Singer: And that’s going to be changed by regulation.

Mr. Bullbrook: That’s going to be changed by regulation? Because that today is an impossibility. It’s an impossibility, today, for them to calculate the absolute interest that’s payable from the date of the disposition of the designated lands.

But more important than anything, you render a personal liability to the solicitor of 150 per cent of the tax itself. I just can’t for a moment think that you, as a solicitor -- I’m sure you have, I shouldn’t say this to you, I’m sure you’ve recognized the impact of that, the significant impact upon our profession? We’re not standing up asking, as we normally do as lawyers, for something peculiar to our own bent. What we’re saying here is: Goodness gracious, don’t try to make the legal profession tax collectors; because it’s going to be the legal profession that really is going to bear the burden of this. I want to stop for awhile, because I want you to respond. I’ve made my point.

Hon. Mr. Meen: The hon. member refers to our making the legal profession tax collectors. We aren’t really. We’re just saying that if we, as lawyers acting for clients, get the money into our account, and there is a liability attached to that money for a partial payment of the liability, and if we have done that and we’ve got the money into our accounts, then we will have done so because we were able to satisfy the purchaser that there was no lien. There would have been a lien clearance certificate obtained, either by the payment of the tax, which would be the preferable way out of any other moneys available, or giving security or giving an undertaking to pay the moneys. I don’t think it’s really imposing that great an additional burden. Those of my colleagues who are practising law will simply have to learn about this mechanism. But, I really don’t think that it’s as horrendous as the hon. member for Sarnia would make it out to be.

Mr. Bullbrook: May I give you an example? I am going to give you an example, right now, that I am sure lawyers will be faced with -- an example of a client who swears to a valid exemption under the Land Speculation Tax Act. You know the affidavits I am talking about? Supposing he swears on a stated set of facts to a valid exemption? He follows that affidavit with a documentation at the registry office, but there is not a valid exemption. His assessment of the validity of the exemption is not a correct one. I am exaggerating for the sake of example. Okay?

It means, in effect, therefore, that there was a tax liability, and the exemption shouldn’t have been claimed. And since there was a tax liability, section 3 comes into effect. And the lawyer has disposed out of his trust fund the money to the client on the basis of the affidavit sworn by the client. The lawyer, then, is technically responsible to a fine of 150 per cent of the tax.

This is the type of thing. Mr. Chairman, I want to say this to you. I have said it so many times, with respect.

For two years I haven’t spoken as much in this Legislature as I have on this bill, sir. I can assure you I haven’t. I want to say I am so concerned with the impact of this legislation that I cannot properly describe it, because what we are doing is passing tax laws about which you will say: “Oh, we won’t do that,” or “Oh, we didn’t mean that”; because that’s the impact of section 3.

What is the lawyer to do when his client has already sworn there was an exemption? The transaction has already closed, as many have. And in many instances, if not most, the exemption is a valid one. But supposing the Minister of Revenue says: “I am sorry, it wasn’t a valid exemption.” Do you realize that the impact of this is, as I say, that that lawyer who dispersed in good faith on the basis of an affidavit so sworn, dispersed those funds to his client, which it is his obligation so to disperse, is now subject to a penalty of 150 per cent?

As one member of this Legislature, I just cannot tolerate a response that says: “Of course, we will be fair.” Tax laws, all laws aren’t based on the fact that a minister will be unfair. We presume that you will be fair, equitable and just, as were your advisers. But we are passing laws that subject people to this type of punitive measure without reconsideration. And I don’t mean to defame it and I don’t mean to harp on it when I say this is the trouble with the statute; the impact of section after section has not been given sufficient consideration.

It is not the fault of the Minister of Revenue, and I’m going to harp on that. It is the fault of the Treasurer’s position, where he insisted that it was politically expedient, and I recognize it is, to conceive of such a tax. We support the principle of true speculators being taxed, but the problem is the Minister of Revenue and his advisers are again caught up in this insidious law play that they have. They must enact a law to specifically statutize a concept that is good in itself. I intend to say this to you, I’ll stand against this section. I don’t know whether anyone will join me in standing against this section. But I am not for a moment --

Mr. Lawlor: I’ll join you.

Mr. Bullbrook: Be it that I am a lawyer, acting as an advocate for the legal profession; but that isn’t it. I am going to stand against this section, because I am not going to vote in favour of any statute that imposes a penalty of 150 per cent on somebody who has done something in good faith.

Hon. Mr. Meen: I will tell you this. I would not think for one moment that an action could be maintained against a solicitor in the circumstances the hon. member for Sarnia describes. I couldn’t imagine anyone would consider that a claim would be made against him in these circumstances. But I tell you this -- although it is clear from subsections (1), (2) and (3) that that might happen -- of course we don’t want to wipe out a collusive arrangement between a solicitor taking a false affidavit. The hon. member for Sarnia is not talking about that. He is talking about acting for a client whom he believes to be swearing a true affidavit, and it turns out later on that maybe the client has given him a false affidavit. And if the members --

Mr. Bullbrook: Maybe the affidavit is false in fact and not false at the time. I’m saying that he might swear that he thinks he has got an exemption when in fact he doesn’t have an exemption.

Hon. Mr. Meen: That would be a mistake in fact.

Mr. Bullbrook: It would be a mistake in fact, but that doesn’t make any difference.

Hon. Mr. Meen: I would like to reflect on this and what I want to do. I would suggest we could stand this section down, because it may be possible to put a subsection (4) or something of that sense in here; or perhaps under the prosecution sections or whatever, in order to protect the profession. There is no way in which I could buy that kind of thing any more than the member for Sarnia could buy it. We want to see that at least commerce can be carried on.

Mr. Lawlor: Mr. Chairman.

Mr. Chairman: The member for Lakeshore.

Mr. Lawlor: Mr. Chairman, I would think that is very sensible on the part of the minister. What’s happened here is that the very point at issue didn’t in the course of the drafting come to mind. When the word was used, they wanted to throw the net as broadly as possible with respect to trust and fiduciary relationships and that placed the legal profession in a peculiar position as this specific type of transaction falls day in and day out precisely at the fiduciary under this head. The minister also well knows that the kind of directions we get from clientele directing money is usually done through the channel of conduit of the solicitor himself, who in that process could be, I suspect, designated a trustee even as a conduit; because it is usually the lawyer who gives the further direction as to the fund, although it’s possible to run a legal office, of course, without trust funds and without trust accounts; but I would suspect that is infinitely awkward.

I don’t know quite how they would really manage to do it, but I understand there are a few lawyers around who do it. What they do is by way of directions from clientele. They tell the other lawyer to make the cheque to somebody else and never to make it to them. They don’t extract their fees half as easily as would otherwise be the case.

Mr. Chairman, I have one other point I have to make under this in continuity with the member for Sarnia. When you get to your certificate sections, when you get to the later sections in the bill in which you may reverse your position and may reassess, there is a kind of an awkwardness there in which, if there is a revisitation or a reassessment say, and the money has all been dispersed, technically speaking in this narrow dimension I think you would find that this was very well applicable. A judge sitting there construing the statute would be obliged to say: “Well I am sorry, but that’s what those fellows said up in Queen’s Park; and, Mr. Solicitor, not only do you lose all your fees out of the transaction but it is costing you a bundle besides.”

The minister is nodding. I think he quite agrees.

Hon. Mr. Meen: Yes, I agree with that, and as a matter of fact I had that section in mind when I was suggesting it might be appropriate to have the addition somewhere farther along in the Act, but if it were appropriate to have it here, it would make nice drafting.

Mr. Lawlor: Have it here.

Hon. Mr. Meen: That might be, having in mind that the reference by the hon. member for Lakeshore has bearing on my observation too.

Mr. Chairman: Is it agreed then that section 3 stand down to a later time?

Agreed to.

On section 4:

Mr. Chairman: Any questions or comments on section 4?

Mr. Singer: Yes I have a lot of questions.

Let’s hear the minister move his amendment first.

Mr. Chairman: Yes, we have an amendment on section 4.

Hon. Mr. Meen moves that section 4 of the bill be amended by striking out clauses (a) and (b) and substituting therefor:

“(a) when the designated land is disposed of by or by way of gift to an organization that is at the time of the disposition a registered Canadian charitable organization within the meaning of paragraph (c) of subsection (8) of section 110 of the Income Tax Act of Canada and is not a trust exempt from tax under part 1 of that Act by paragraph (f) or (h) of subsection (1) of section 149 of that Act, or

“(b) when the designated land is disposed of by a municipality.”

Mr. Chairman: The member for Downsview.

Mr. Singer: Mr. Chairman, there are about four separate heads under which this amendment should be criticized. Let me start with the first one.

The amendment says we delete subsection (a), and as far as I can see the old subsection (a) is not reinstated anywhere else. The minister confirms that I am right in that supposition; and therefore that means there will be a tax payable when the designated land is taken under statutory authority or sold by a person by whom notice of an intention to take it under statutory authority was given.

In simple language, that means if land is expropriated the tax is payable or if land is sold to an authority or a body with expropriating power, as often happens the tax is payable.

Hydro comes in and says sell us your land or if you don’t sell we will expropriate. Many deals are made in that way, with the threat of expropriation. Then the tax is payable. Now why, Mr. Chairman, should that be taken out? The original intention made some sense.

The Province of Ontario is going to build a community called North Pickering and probably, sometime later, it is going to build another community called South-East-West Pickering. It comes along a year from now when land prices have continued to zoom and says: “We are going to take that 1,000 acres of land by expropriation, and we are going to build a new community on it.” Perhaps the idea is a good one and it is in the public interest.

It says to the owner, who has been quite content to stay there with his holdings and continue to farm, if you will; “We don’t really care, Mr. Farmer. Under other sections of the statute we want you to continue farming. We’ve got great reports about farm land going out of production and so on. We don’t really care whether you want to sell it or not, we are taking it. Not only are we taking it but we are going to take it at today’s value, whether you like it or not. Having taken it at today’s value, we are going to take back 50 per cent of the profit you make on it because you are a speculator.”

Now what possible sense does that make?

Mr. Bullbrook: The chairman just looked at you and internally he shook his head.

Mr. Singer: How can you remove what was a reasonable and logical exemption and now say it no longer applies if a public authority comes in and says; “We are going to take your land and we’re going to give you a profit whether you like it or not, even if you want to stay; and then we are going to take it back again. We are going to take it back at least at the rate of 50 per cent; perhaps at the rate of 86 per cent; and maybe even at the rate of 112 per cent.”

Suppose we are right about the 112 per cent, and I think we are? There is good old farmer Jones sitting there, saying: “Let me farm. Go away.”

Mr. Good: Plus succession duties --

Mr. Singer: The government says: “No, you can’t farm. We are taking your farm because it’s in the greater public interest that we build an Arnprior dam or a new South-West Pickering. We are going to take your land. Not only that, but you are going to have to pay us 112 per cent of the profits that you have made after selling it.”

Mrs. M. Campbell (St. George): It’s crazy.

Mr. Singer: Surely, Mr. Chairman, that makes no sense at all?

Mr. D. M. Deacon (York Centre): It’s laughable, if it weren’t so cruel.

Mr. Singer: I urge the minister quietly, and I hope rationally, to reinstate the old subsection (a) which this amendment proposes to remove.

As I say, there are three other points on this, but let’s try to deal with that one first.

Mr. Lawlor: Mr. Chairman, may I speak on this point, too?

Mr. Chairman: The member for Lakeshore.

Mr. Lawlor: The point is extremely well taken with respect, particularly I think, to land assembly. Is there not written into the old section as it was a kind of inducement or an attractive element to the person owning the land to sell specifically to an expropriating authority because he was going to get a benefit out of it? He was going to be exempted from a tax.

There probably was some play over precisely what the amount of the tax would be in the 50 per cent situation. It would be a point of negotiation, or at least it would be a moot point in his own mind. In any event, he was exempted and he wouldn’t have to play with figures like that, on how much he was going to be mulcted or how much he was going to be saved. That gives the public realm -- the municipality on one side of the fence, the provincial authorities, perhaps, in some contingencies -- a kind of inside track. Your land policies of recent date have been arrogated in that direction, too. Objectively speaking, it doesn’t give him any higher position than anybody else but it appears to. And that, psychologically, would be the inducement. It is a very valuable feature in legislation of this kind if you can effect a public purpose and meet, perhaps in a congelative way, what was mentioned in this House earlier as actually opening up the market by making a greater supply of land available and developing it and getting it into housing. If it can have this peripheral or indirect side effect, and it can if you leave it alone, then why doesn’t the minister do so, because you are killing three or four birds with a single stone? In a fell swoop, the minister removes it from the legislation and it really bemuses me. I think the minister should put it back in; and I think he should put it back in immediately without any further debate on the matter.

The minister saw the virtue of it in the first instance. Is your thinking so purblind, so warped, that having set up your legislation and having brought it into being, on very good consideration I would trust, you would then have seen fit to turn volte-face upon your own position and simply ignore it?

The beauties written into the thing are from the point of view, too, of the negotiating authority, not just from the person being expropriated. The inducements and attractions built into the legislation from the point of view, on a subjective basis, of the expropriating authority, don’t give it a bit more leverage. Maybe, maybe not, according to their shrewdness and hardness. He says; “Now listen, you know you are not going to be paying land tax on the thing.” And then perhaps: “We can find a more equitable solution to this particular problem.” And then: “Certainly you are going to pay.”

There is a degree of acrimony in the decree of appeal, and the business of going to the board of negotiation -- the whole thing, the way the people are called to fight. They are going to be hit by the double ramming of taxation and of being expropriated all in one bunch, which they always find profoundly unpalatable. Come hell or high water and whatever you may say of the benefits written into the expropriation legislation of recent date taxpayers don’t like it; and the second ramming is having to pay the tax on top of it. Really, I’m almost reduced to arguing humanity in the situation and making a compassionate plea on its behalf. But, I think the point was made.

Hon. Mr. Meen: Let me say this, Mr. Chairman, that obviously having put the two sections in dealing in the first sub (a), with conventional transaction to a body that had the capacity to expropriate; and the sub (b) dealing with other bodies and the expropriation; obviously we felt there was some merit to that side of the argument.

Mr. Lawlor: Yes.

Hon. Mr. Meen: But on weighing the pros and cons of this, the evident sense, in the eyes of a speculator, that he might hold on, hoping that he would sell out to such a body and thereby withhold his lands from the private market, certainly was one argument that was advanced.

Mr. Singer: To divine the next time you create a North Pickering?

Hon. Mr. Meen: The section seemed to suggest that we were really favouring speculation. By taking it out, it seems to me that we put the owner of the property in exactly the same position as anyone else.

Mr. Singer: Oh no.

Mrs. Campbell: Oh no.

Hon. Mr. Meen: He can put forward that argument as to the tax that he would pay or not pay to the expropriating body or to the negotiating authority at the time they come to him.

Mr. Bullbrook: He has no right to say no.

Hon. Mr. Meen: Oh yes; that is correct if there is a farm expropriation. But, he can say to them, as to value; “Now I am going to have to pay tax so you are going to have to take this into account in the allowance.”

Mr. Singer: He is going to argue and we’ll have a new breed of owner saying: “I don’t want all that money, pay me less.”

Hon. Mr. Meen: He could argue, perhaps, that he didn’t intend to sell it. There are all kinds of arguments that he can advance. In the long run, my colleagues and I came down on the side of leaving this individual in the same position as anyone else in the community. If he makes his deal, then he makes it on the basis of fair value. And the cost of that transaction -- and it is a cost of that transaction -- would be taken into account.

Mr. Singer: He doesn’t want to make the deal, he wants to continue farming; which the minister says is a good idea.

Mr. Bullbrook: I just want to say one thing to the minister for a moment, as he has been kind enough to continue standing down things. I don’t think he is going to stand this down. We are going to stand up, with respect to this one; but may I say this to the minister: The fallacy in the concept of you and your colleagues -- and perhaps that’s what the Treasurer meant in his great budget speech -- is that long-term farmers whose lands are taken by Hydro are deemed to be speculators. That’s what you are saying on his behalf.

Mr. Singer: All those people who are fighting so hard in Pickering are deemed to be speculators.

Mr. Bullbrook: You are saying they are defined to be speculators, and as a result they will pay this speculator’s tax.

Mrs. Campbell: And you don’t know how much it will be.

Mr. Bullbrook: It beggars description to think that you would come to this rationalization on the basis of saying that some speculators somewhere, by some happy set of circumstances might have bought some land somewhere to sit on, hoping that some government authority, in its sometime wisdom, would expropriate it from them some day.

Mr. Singer: Yes, and then they would have to pay the tax.

Mr. Bullbrook: Now that’s what you have got on one side of the scale. On the other side you have got the myriad of people of Ontario who legitimately don’t want to give up their land, but who are compelled by government thrust to give up their land. Those are the two sides of the scale.

I would suggest, in my respectful opinion and experience, that 100 individuals will be caught up in this statute against the one true speculator. My colleague from Downsview made it quite clear; he reduced it to the absurd that it really is.

Mr. Singer: Mr. Chairman, first on a point of order, this is a four-part amendment, and I am going to suggest that we can only deal sensibly with it by dealing with each part. The first part of the amendment is that old subsection (a) be replaced, and I think we should vote on that. If that is agreeable, I will continue to address a few more remarks with respect to subsection (a).

Mr. Chairman: We could place them separately.

Mr. Singer: You see, there are four parts: that subsection (a) go, that subsection (b) go, and that they be replaced by new subsection (a) and new subsection (b).

Mr. Chairman: No, the deleting of the old subsection (a) and its replacement by a new one are considered as one.

Mr. Singer: Well, the new subsection (a) I don’t find at all difficult; the new subsection (a) I could go along with. But I don’t want the old subsection (a) to go. There are really four parts. The old (a) vanishes forever if this amendment, as put in its present form by the minister, carries --

Mr. Chairman: Well, you could add it as a subsection (c) at a later time.

Mr. Singer: No, but he hasn’t done that. The amendment that is before us is that the old subsections (a) and (b) go and be replaced by two others. In my quick reading of the new subsection (a), I find it quite acceptable; the new subsection (b) I don’t like. But as I say, there are four parts and we should have an opportunity of debating each of those parts and of dealing with them separately. That is what I am suggesting and asking for your ruling on.

Mr. Chairman: My point is that if you wish that the old subsection (a), as you call it -- I don’t know what it says --

Mr. Singer: Well the old subsection (a) deals with --

Mr. Chairman: -- but you want it to stay, as I understand.

Mr. Singer: That is our argument.

Mr. Chairman: Then you can add it as a new subsection (c).

Mr. Bullbrook: No, it is in the present statute. .

Mr. Singer: It is in the statute that is before us.

Mr. Good: Mr. Chairman, do you have a copy of this amendment?

Mr. Chairman: I have a copy of the amendment.

Mr. Good: It was moved that section 4 of the bill be amended --

Mr. Chairman: I understand; I have it right here.

Mrs. Campbell: We don’t want it.

Mr. Singer: Mr. Chairman, this is a four-part amendment, and I am suggesting that you rule that we can deal with each one of the four parts separately.

Mr. Lawlor: Surely he is right, Mr. Chairman. It has to be dealt with that way.

Mr. Good: Read the amendment.

Mr. Chairman: I am reading the amendment. Normally you would delete the subsection (a) --

Mr. Singer: Well, this is not normal.

Mr. Chairman: -- and you feel this should be added. Right? Does the hon. minister have a comment on this?

Hon. Mr. Meen: Mr. Chairman, you have an amendment before you replacing subsections (a) and (b). It seems to me you could take a vote on that, then let the hon. member introduce an amendment to insert a new subsection (a) (a) or subsection (a)(b), or whatever, if he wishes and then we can vote on that.

Mr. Singer: No, Mr. Chairman.

Mrs. Campbell: You can’t bypass --

Mr. Chairman: Order, please. We couldn’t insert it after we delete it.

Mrs. Campbell: That’s right.

Mr. Singer: No, I am not suggesting an amendment. His amendment has four parts and I am trying to deal with each part separately.

Mr. Chairman: Well, suppose you discuss it for a few moments and I will make my mind up over the dinner hour.

Mr. Lawlor: Mr. Chairman, may I just say a word on it? To take a look at them, you know, they are not related. I have never seen anything like this happen in the House before. The new subsection (a) he is substituting is a wholly different kind of bird or even fish from the bird over here. The things he is substituting are not commensurate at all; therefore, if he is going to take out something that is totally different than what you are putting in, you are going to have to deal with it, I suggest, on its own merits. We object to having it taken out. Some of us don’t object to the new thing being put in, so why not deal sensibly with it and take them one at a time.

Mr. Chairman: Supposing you discuss for the next two or three minutes why you wish the old (a) left in?

Mr. Singer: All right.

Mr. Chairman: The member for Downsview.

Mr. Singer: That was the point I was going to come to. I think the minister is trying to create a new breed of cat, an expropriated owner who is going to be put in a position of running to the expropriating authorities and saying: “No, no, don’t give me all that money. I don’t really want it. You’ve valued my land too high. I’m going to have to pay too much tax.” Think of the new breed of evaluator that you are going to produce. You are going to bring an evaluator in and say: “Now, Mr. Evaluator, you’ve had all this training, and I know that most people who hire you want a very high value put on, but I’m hiring you this time and giving you instructions to make the value just as low as you possibly can, so I won’t have any tax to pay.”

It makes no sense. It makes no sense at all and the minister knows this. Leave the old (a) there, for goodness sake. It isn’t as though there is any possible way to control the thing.

An expropriating authority has in mind that it needs a particular piece of land and the owner has to give it up. That’s what expropriation is all about; and surely you are not going tax that at this rate?

Is the minister aware that the farmers whose land is being taken now for the Pickering airport are taxable under the capital gains sections of the Income Tax Act? Is he aware of that?

Hon. Mr. Meen: I would presume they would be.

Mr. Singer: Yes. That is, in fact, the law. The valuations were done and every farmer has to pay capital gains tax on the extent of his profit over the V-day value, which was Dec. 31, 1971 --

Mr. Good: Of which this government did.

Mr. Singer: -- over the date of expropriation, which is Jan. 30, 1973. So in that 13-month period if there was an increase in value -- and most of those properties increased in value -- there is a substantial capital gains tax payable.

The minister is going to come along and dip into capital gains tax and take advantage of that same person. Some of the sections here are designed, we thought -- when we listened to the minister that was the impression -- to try and keep people farming.

Let’s come back to the farmer who says: “I want to farm, my children want to farm, my grandchildren want to farm. We are a great farming group and we are going to farm through the next 10 generations. And once we can’t farm, we are going to sell our land to good old farmer Lawlor, who is going to carry on farming.”

So, under this statute, apparently he is exempt from this tax. But, lo and behold, along comes Hydro or TEIGA or somebody and says: “No, no, we need your land. You can’t farm here any more. Off; we’re expropriating.”

You fellows want another 50 per cent. It is nonsense. It is unfair. It is unreasonable. For goodness sake put back the old section (a).

Mrs. Campbell: It is unconscionable.

It being 6 o’clock, p.m. the House took recess.