Legislative Assembly of Ontario

The House met at 2 o’clock, p.m.

Prayers.

Mr. L. M. Reilly (Eglinton): Mr. Speaker, the Minister of Industry and Tourism (Mr. Bennett), will be in the House shortly, but meanwhile he asked me if I would introduce to the House the 65 students from École Secondaire Bel Court in Ottawa, together with Mr. Nadeau and other escorts.

Hon. S. B. Handleman (Minister of Housing): Where is the member for Ottawa East (Mr. Roy)? They are from his riding.

Mr. J. E. Stokes (Thunder Bay): Mr. Speaker, it is my pleasure to introduce to the Legislature the 46 grade 7 and 8 students from Manitouwadge Public School, under the direction of Mr. James Bishop, Mrs. Carol Ross, Gail Conrad and Mike Voiture. I hope that members of the Legislature will welcome them and that the students enjoy their stay in Toronto.

Mr. E. W. Martel (Sudbury East): Mr. Speaker, it gives me a good deal of pleasure to welcome to the Legislature 40 students and five adults under the direction of Mr. Toppari, the principal, from Wanup Public School in the municipality of Wanapitei.

Mr. Speaker: Statements by the ministry.

ASSISTANCE FOR FLOOD VICTIMS

Hon. A. Grossman (Provincial Secretary for Resources Development): Mr. Speaker, following previous assistance in cases of natural disasters in this province, the government of Ontario will extend compensation to those people who have suffered losses from flood damage in southwestern Ontario during the past few days.

This compensation is provided under the disaster relief assistance programme, designed specifically to help people who suffer losses caused by disastrous storms or flooding. This assistance is available to residential property owners and owners of small businesses.

In order to qualify, a municipality first applies to the government to have that municipality declared a disaster relief area. Once this is done, the municipality establishes a committee to raise funds and settle claims. The government will then match such funds dollar for dollar.

However, Ontario is also asking the federal government to contribute equally so that the amount collected by the municipal fundraising committee will be matched not only by the province but also by the government of Canada.

The provincial disaster relief assistance programme also provides guidelines for the equitable distribution of those moneys raised by the municipal committee and matched by the province.

Concerning the questions which have been raised regarding operation of the dams along the Grand River, my colleague the Minister of Natural Resources (Mr. Bernier) is arranging for a committee of review in the whole matter of the flooding, and this review will include operation of the dams along the Grand River.

Mr. E. Sargent (Grey-Bruce): The government will end up not giving five cents to the whole bunch.

Mr. I. Deans (Wentworth): Is that a public review?

LAND PURCHASES IN HALDIMAND-NORFOLK

Hon. J. White (Treasurer and Minister of Intergovernmental Affairs): Mr. Speaker, I have now completed my review of proposals for our new community in Haldimand-Norfolk. The government has accepted my recommendation to acquire all of what has come to be known as the Townsend site in the Jarvis area. To do this, we have acquired all the property and offices held by the consortium, so-called, covering 10,740 acres. We will exercise these options by the end of the month and assume ownership of the entire site. The total cost of this acquisition will be about $22 million, which is much less than the estimated cost of acquiring a similar parcel of land on the Woodhouse site. The Townsend site will meet our planning objectives for the region; and it was overwhelmingly supported just two weeks ago by the members of the council of the regional municipality of Haldimand-Norfolk as the preferred site for a new community.

I have also had the proposals made to us by the consortium examined by an independent chartered accounting firm and the Ministry of Government Services and its consultants. The agreement which has been reached is the result of some intensive negotiating over the past few weeks. It provides for us to take over and exercise all the options at their original cost; to purchase three farms now owned outright by the agents at the average per acre price of the property under option; and to pay a five per cent fee to cover all the assembly costs, including local real estate brokers’ fees.

Mr. Speaker, we have reserved the right to pay the brokers’ fees directly to the realtors in the area involved from the amounts due to the consortium under the agreement. We also have an undertaking that neither the members of the consortium nor any principals in this transaction have or will acquire, directly or indirectly, any property within two miles of the development site. In this connection, we will require some additional property to complete the site and I have asked the Minister of Government Services (Mr. Snow) to proceed immediately with this acquisition on a similar cost basis.

Meantime, development in the general area, and particularly in the area south of the site to Lake Erie, is controlled by minister’s orders so that the interests of the government and the regional municipality will not be frustrated by any precipitous or incompatible development. The planning and development of the site and surrounding areas will be proceeded with using the provisions of the Ontario Planning and Development Act. The land being acquired by the government will be sold to the Ontario Land Corp. providing this Crown corporation is agreed to by the Legislature later this year.

DIAL-A-BUS

Hon. J. R. Rhodes (Minister of Transportation and Communications): Mr. Speaker, I should like to make a statement on the status of the GO dial-a-bus demonstration in Metropolitan Toronto and to announce proposed service revisions.

For a number of years transportation planners had recognized a general demand for a public transit system which was more personalized than the conventional, fixed route bus line. To serve this demand the government, through my ministry, developed what was probably the first actual experimental system utilizing the dial-a-bus principle. The location chosen for this original demonstration was the Bay Ridges area in Pickering township east of Toronto. Bay Ridges had no public transit system and it was felt that a direct service to the GO train at Pickering Station would greatly benefit the residents, many of whom commuted daily into Toronto. The demonstration was successful in providing a much-needed service and eventually its operation was taken over by the municipality.

The experience gained in this pioneer operation contributed greatly to our understanding of dial-a-bus possibilities and limitations. The ministry, in conjunction with municipalities, conducted numerous studies throughout the province and, where dial-a-bus seemed appropriate, assisted with the implementation of further experimental systems. In many cases, these experiments have been successful, and the operations are being continued as viable municipal transportation facilities in such places as Bramalea, Ottawa, Kingston, Stratford and Sault Ste. Marie.

In the Metro area there also existed public demand for this kind of personalized transit which seemed to be working so well in smaller cities. Since the dial-a-bus concept was new, its effectiveness and its public acceptance in densely populated urban areas were unknown. Service in such areas was appropriate, not only because of the local demand but because it provided a way for us to give effective advice to other large municipalities throughout the province in their attempts to come to grips with their public transit needs. Demonstration dial-a-bus projects were put into operation in three Metro areas: York Mills, Armour Heights and Downsview. These three areas were selected because they were representative of three distinct levels of household income, thus broadening the application of the results of the experiments.

The three areas have two things in common: There is a very heavy dependence on the private car for the daily work trip; and the street geometry and housing density make it impractical to provide close and convenient transit on fixed route systems. This government’s policy is to encourage public transit, to woo drivers away from their private automobiles and to help provide mobility for people who are denied the use of private cars. Our three Metro project areas need improved transit on both these criteria.

Public use of the three experimental systems has been disappointing, although the York Mills service has been accepted to a much greater extent than the other two. Analysis of the results indicates that the dial-a-bus concept does not produce the desired results in metropolitan areas which are serviced by a grid of efficient fixed-route service.

The number of riders, particularly in Downsview and Armour Heights, does not justify the cost of supplying the service. Nor have the systems brought significant numbers of new riders to the regular TTC transit routes.

I have therefore decided on the following programme of revisions. One, to terminate the Downsview service, effective June 23, 1974. Two, to terminate the Armour Heights service, effective July 21, 1974.

Mr. S. Lewis (Scarborough West): That’s certainly a revision.

Hon. Mr. Rhodes: Three, to eliminate Saturday service in the York Mills area, effective June 23. Weekday service in York Mills will be continued for at least a few more months to permit testing of modified service designed to attract more riders and to reduce operating costs. Four, service in the Willowdale area will not be inaugurated as was planned in the original proposal.

In terms of filling a definite public transit need, the Metro dial-a-bus experiment has been disappointing.

Mr. M. Shulman (High Park): Mildly.

Hon. Mr. Rhodes: As a research project, however, the experiment has been valuable, providing much-needed data which will be extremely helpful in our future transit developments.

Mr. D. C. MacDonald (York South): The patient died but the operation was successful.

Hon. Mr. Rhodes: Mr. Speaker, I would like to commend the TTC, the unions and the staff of my ministry for the co-operation and enthusiasm which they have displayed in this experiment to improve our public transit facilities.

Mr. R. F. Nixon (Leader of the Opposition): Nice epitaph.

Hon. Mr. Rhodes: I propose now to request the TTC to join with our MTC staff in exploring new ways to --

Mr. Lewis: Create another mobile nightmare.

Hon. Mr. Rhodes: -- utilize the special small buses which have been developed for dial-a-bus service.

Mr. R. F. Nixon: They can’t use those buses?

Hon. Mr. Rhodes: They are already being used in Mississauga and Oakville in other than dial-a-bus applications. Incidentally, the Ontario Transportation Development Corp. reports that sales and confirmed orders for these vehicles amount to about 100. Some of these have gone to the United States, and additional interest is being shown by several other jurisdictions south of the border.

Mr. Lewis: The whole thing is a nightmare.

Hon. Mr. Rhodes: OTDC is also in the advanced stage of design modifications which will give the bus capability to carry wheelchair and other handicapped passengers.

Mr. Lewis: What is the ministry going to do with the dial-a-bus?

Hon. Mr. Rhodes: I’m convinced that any reasonable concept to improve public transit should be explored, developed and tested. With this approach and with our assistance, the TTC will continue to be the most effective and innovative transit operator in north America.

Mr. R. F. Nixon: They are easier to get rid of than Krauss-Maffei.

Mr. Stokes: The operation was successful; but the patient died.

Hon. Mr. Rhodes: I’m also determined that the province as a whole will continue in the forefront in the development of new and better transportation systems, a reputation which is recognized internationally.

Mr. Lewis: Maybe you could use the dial-a-bus to run at the CNE this summer.

Mr. Speaker: Order please.

Mr. W. Hodgson (York North): The member for Scarborough West doesn’t like to hear that, does he?

Mr. Lewis: The whole thing was preposterous; the whole transportation concept was preposterous.

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

ASSISTANCE FOR FLOOD VICTIMS

Mr. R. F. Nixon: I would like to ask the policy secretary who made a statement with regard to payments in the flood areas if there will be no money paid to the people of those areas who suffered damage other than through the matching dollar formula which has been used in the past?

Hon. Mr. Grossman: I’m not too sure that I understand the member’s question -- what other money? I presume the person who is suffering doesn’t care where the money comes from.

Mr. R. F. Nixon: Let me make it clear then. As a supplementary, is the minister not aware that the matching formula never comes anywhere near meeting the requirements of those people who have suffered the damage? Certainly it is a gesture --

Mr. Deans: That’s all it is, a gesture.

Mr. R. F. Nixon: -- but does the minister not agree that it is a formula to simply contain provincial payments to a level where in fact they will not be of as much use as they should be in an area where there is $10 million damage?

Mr. H. Worton (Wellington South): There is no new policy there.

Hon. Mr. Grossman: Mr. Speaker, I don’t know where the hon. member gets the $10 million damage. That’s right off the top of somebody’s head.

Mr. R. F. Nixon: From the Brantford Expositor. Ask the member for Brantford (Mr. Beckett); he knows the Brantford Expositor is always right.

Hon. Mr. Grossman: I don’t know where the hon. member gets the idea that the funds in the past haven’t been sufficient. There have been substantial funds paid out.

Mr. Lewis: Come on, there were no disaster funds.

Mr. Deans: They are not sufficient.

Hon. Mr. Grossman: It depends on what one means by sufficient; I don’t suppose any number is sufficient.

Mr. Speaker: Order.

Mr. Lewis: Your contribution becomes negligible; it is deliberately negligible.

Mr. R. F. Nixon: Another supplementary, if the Speaker will permit me. Can the minister assure that the hearings he’s announced will be held in the flood communities themselves and that they will be open, so that those people who are concerned with this matter and who have had such serious losses themselves will be able to put forward their own opinions in this regard?

Hon. Mr. Grossman: Is the hon. member referring to the cause of some of the damage?

Mr. R. F. Nixon: The full review of the utilization of the dams.

Hon. Mr. Grossman: I would suggest he direct that question to my colleague, the Minister of Natural Resources.

Mr. R. F. Nixon: The provincial secretary made the statement, did he not?

Hon. Mr. Grossman: I made the statement that there would be a review carried out by the minister.

Mr. Deans: He doesn’t know when it will be? Will it be public or private?

Hon. Mr. Grossman: As to whether the minister intends to have it as a public review I wouldn’t suggest it.

Mr. Lewis: Is it public or private? Oh, it’s a ministerial review.

Hon. L. Bernier (Minister of Natural Resources): Mr. Speaker, if I may --

Hon. Mr. Grossman: Why doesn’t the member wait until he gets the answer?

Hon. Mr. Bernier: -- just qualify that a little further. Yes, we will be making a very in-depth study of the actions of the conservation authority. We will be reviewing all the data that they have compiled, and their reasons for certain actions. Once that report is given to me and we’ve had an opportunity to examine it, then we will decide at that time if we should have further public hearings.

Mr. R. F. Nixon: Then there will be no public hearings?

Mr. Lewis: Supplementary: What does the minister mean, further public hearings? I take it that this is an internal review conducted by the ministry of itself?

Hon. Mr. Bernier: No, Mr. Speaker, it’s not. I would point out that the conservation authorities are an autonomous body. They operate outside our ministry and we are reviewing the actions that were taken by that authority.

Mr. R. F. Nixon: Supplementary: Would the minister agree that since there is this feeling in the community -- reported to the House by the Premier (Mr. Davis) himself -- that the conservation authorities may very well have administered their responsibilities inappropriately, anything less than a public hearing, where the people whose property was under water would have a chance to express their views, is simply going to be insufficient?

Hon. Mr. Bernier: Mr. Speaker, I certainly don’t want to prejudge the actions of the conservation authority at this particular time.

Mr. Lewis: No. He wants to judge them, not prejudge them.

Hon. Mr. Bernier: I’d have to wait until the report and a review of their actions has been completed.

Mr. Deans: Supplementary: Doesn’t the minister feel that to conduct a pre-inquiry jeopardizes the possibility of having an accurate and open discussion about the actions of the conservation authority? Doesn’t the minister feel that the inquiry he is talking about should be conducted in public in order that the public can participate and can understand the information that he is seeking and the information upon which the conservation authority based its decisions?

Hon. Mr. Bernier: No, Mr. Speaker, I can’t agree with that assumption by the hon. member. I think it is fair to say that we have to give the conservation authorities a fair opportunity to --

Mr. Deans: Then do it publicly.

Mr. Martel: It is a snow job.

Hon. Mr. Bernier: -- lay it before our particular ministry and our experts, our engineers within the ministry. Once I’ve got that information, I’m prepared to judge what steps we take.

Mr. Lewis: The ministry can’t be trusted.

Mr. Deans: To release what the minister happens to think is of consequence.

Hon. Mr. Bernier: It’s local autonomy.

Mr. Lewis: Mr. Speaker, I’d like to ask a question of the Provincial Secretary for Resources Development on a previous point?

Mr. Speaker: I think since it is probably on the same topic, it will be in order.

Mr. Lewis: Does the provincial secretary not think this might be the time to abandon the government’s present position on compensation in the case of natural disasters, which has proved so inadequate, to recognize that the communities affected can never themselves contribute enough, and therefore to give of the province sufficient to make up the losses?

Hon. Mr. Grossman: Mr. Speaker, again the hon. member is giving an opinion that it hasn’t been sufficient in the past, and I suppose it’s a value judgement as to what is sufficient.

Mr. Lewis: Yes, it is.

Mr. R. F. Nixon: No one but the Minister of Agriculture and Food (Mr. Stewart) thinks it is enough.

Hon. Mr. Grossman: In 1970, in the storm in Sudbury where substantial damage was caused by high winds, this government’s share alone amounted to $335,000.

Mr. Lewis: Oh breathtaking, breathtaking.

Mr. Deans: Whole homes were blown away.

Hon. Mr. Grossman: If the hon. member suggests that we do what we can to make our assistance breathtaking, I don’t know what he would consider breathtaking. If he’d send me his criteria for what is breathtaking --

Mr. Lewis: Full compensation for natural disaster without asking for a dollar. Let them raise what they can, but don’t penalize them by pro-rating the grants.

Hon. Mr. Grossman: Should we go before the Management Board and see if we can take the Chairman’s breath away?

Interjections by hon. members.

Mr. Speaker: Order, order.

Hon. Mr. Grossman: Is that what the member wants us to do?

Mr. Lewis: It would help.

Hon. Mr. Grossman: Or to provide substantial assistance?

Mr. MacDonald: The rhetoric filled the vacuum.

Mr. Speaker: The hon. Leader of the Opposition? The hon. member for Grey-Bruce, a supplementary.

Mr. Sargent: Would the minister not agree that accepting only one-third of the disaster financing under this formula, as the member for Scarborough West said, is outdated? If only $50,000 is raised, then this government’s commitment is only $50,000 and that’s wrong in a disaster area.

Hon. Mr. Grossman: Mr. Speaker, in the first place, I don’t know where the hon. member gets his mathematics. He must have got them from his leader, who is always in trouble with mathematics. We match dollar for dollar --

Interjections by hon. members.

Hon. Mr. Grossman: If we match dollar for dollar, even to me that sounds like 50 per cent.

Mr. Sargent: It is federal, provincial and local.

Hon. Mr. Grossman: We’ve invited the federal government --

Mr. Sargent: It’s down to one-third now.

Hon. Mr. Grossman: If the federal government comes along, which we hope it will, it will be one third. The hon. member, I’m sure, has no objections if we involve the federal government, so the provincial taxpayers’ costs won’t be as high as they might normally be. There’s nothing wrong with that, I’m sure. The suggestion that it won’t cost us -- how much did he say?

Mr. R. F. Nixon: It is a niggardly policy.

Mr. Sargent: He is just fooling the public, that’s all he is doing.

Hon. Mr. Grossman: There have already been offers of assistance from some large contributors, which are going to the municipalities, of somewhat in excess of $100,000. That’s just what I heard over the phone this morning -- it will be a substantial figure. Now overall, I hope, really, it won’t be a substantial figure, because I hope the astronomical figures used by the Leader of the Opposition will in fact not be so. But whatever the figures are, this formula will apply. This House can be sure that this government will make certain that no one suffers unduly because it is too high.

Mr. Lewis: Regardless of need.

Mr. Deans: Supplementary question, please.

Mr. MacDonald: The minister is not taking any steps to ensure that. They have to move locally before the government moves at all.

Mr. Deans: Is it the intention that the funds raised can be used to compensate for loss of furnishings and things other than damage to real property?

Hon. Mr. Grossman: Oh, yes.

Mr. Deans: How then are they going to determine the losses?

Hon. Mr. Grossman: This has been determined in past instances and will be determined now. There will be a committee set up by the municipality for the purpose of assessing the claims, as has been done in the past.

Mr. Deans: Will it include business losses, too?

Hon. Mr. Grossman: No, it doesn’t include business losses.

Mr. R. F. Nixon: Supplementary, Mr. Speaker: Will the minister include those direct expenses by the municipalities during the flood and during the cleanup for equal dollar pay compensation? Or does it have to be contributed by someone else in the community?

Hon. Mr. Grossman: That has not been taken into consideration, Mr. Speaker. We are talking about losses to individuals, and any loss to an individual will be taken into consideration within this formula.

LAND PURCHASES IN HALDIMAND-NORFOLK

Mr. R. F. Nixon: I would like to ask the Treasurer, by way of arithmetic, if a five per cent fee on the $20 million plus acquisition will mean that the consortium will receive something in excess of $1 million for their trouble in assembling that land and holding it for the period of time.

Mr. Lewis: Not the consortium.

Hon. Mr. White: Well sir, for their trouble and very considerable cost they will receive five per cent of $20,219,291, which works out to $1,010,964.55.

Mr. R. F. Ruston (Essex-Kent): Quite a rip-off!

Hon. Mr. White: But I must point out to you that the expenses incurred by the consortium are approximately equal to this assembly commission.

Mr. R. F. Nixon: Can I ask the minister, as a supplementary, is the average figure upon which these options are being acted upon by the government about $1,600 per acre?

Hon. Mr. White: No. It is $1,943 or $1,944.

Mr. Sargent: Supplementary: Would the minister advise, since the Ontario Land Corp. is coming into the picture here, when is this legislation coming to the House? Secondly, what portion will the private sector have in the Ontario Land Corp.?

Hon. Mr. White: We plan to introduce the legislation next fall, and those details will be revealed when the bill is introduced.

Mr. Lewis: Supplementary, if I may: Forgive my ignorance, but how does the minister add expenses of an amount of better than $1 million to take out options on tracts of land? How does the minister arrive at the $1 million plus, in expenses not costs?

Hon. Mr. White: The consortium has paid 2.5 per cent to the area brokers who have put this deal together for them. That is probably the largest single element. They have an obligation to pay a very substantial amount to a Mr. Cherkas. They have an obligation to pay a substantial fee to a planner whose name is Pearson. Clarkson Gordon were the accounting firm mentioned in my statement, and they have verified the expenses of the consortium in this assembly.

Mr. R. F. Nixon: Is there then no profit to the consortium whatsoever?

Hon. Mr. White: There is no profit to speak of. It is more or less a break-even proposition on the assembly, which is to say the five per cent commission we are paying to them is more or less equal to the expenses actually incurred in the assembly. They will have a profit on the 298 acres which we are buying directly from them which they own outright themselves. They acquired that for something over $800 per acre. We are paying them the average price of $1,943 or $1,944, so they will have a profit of several hundred thousand dollars on these three farms, less whatever administration, carrying charges, taxes and such like may have been incurred.

Mr. R. F. Nixon: Supplementary: Would it be true to say that if the options had lapsed the farmers who then would have had full title to renegotiate a sale, assuming that the minister’s freeze order were going to be lifted, would probably expect a price considerably above the $1,800 to $1,900 average that is to be paid?

Hon. Mr. White: I can’t predict that, but certainly looking at other government assemblies this has been the history of such operations, yes.

Mr. Lewis: A supplementary: Does the speculative land tax apply in this case to the acreage which you are purchasing from Cherkas Associates? Will they pay the tax? I take it they will.

Hon. Mr. White: The option prices were established in October, 1973, which is to say many months before the effective date of the land spec tax. Whatever provisions are included in the land spec tax, with the exception of the effective date as this bill is passed by the Legislature, would not have any effect on the transaction. As I say, the prices were established months before April 10.

TORONTO ISLAND AIRPORT

Mr. R. F. Nixon: I would like to ask the Minister of Transportation and Communications if he can confirm to the House that the committee established under his aegis, including representation from Metropolitan Toronto and other interested groups in Toronto dealing with airport transportation facilities at the harbour level is meeting regularly and secretly -- at least it does not have open meetings in the ministry -- and that it has been presented with a programme which would call for the establishment of the present island airport as a STOL airport and the development of a new airport in the island community on the spur of land at the foot of Leslie St. -- which has been designated for park purposes -- which would take over the present island airport duties? Is that the main technical recommendation the committee faces? Does the minister support that recommendation?

Hon. Mr. Rhodes: Mr. Speaker, the committee has been meeting regularly. It is a committee made up of staff, with the exception of appointees which have been appointed from municipalities within Metro. They have not been meeting publicly. They have been discussing in detail the technical aspects of developing a study of the airport possibilities in this area. I have not received the final recommendation, or indeed even an interim recommendation at this time from that committee, so I cannot answer the latter part of the question put by the Leader of the Opposition.

Mr. R. F. Nixon: A supplementary: Does the minister mean to indicate he is unaware of the recommendation to put two airport facilities in the harbour area? Is he not further aware that if this committee makes such a recommendation, it would be tantamount to a recommendation for this facility to be built without involving the community or without hearing from the ministerial experts as far as transportation impact or environmental impact studies -- which may or may not have been completed -- are concerned?

Hon. Mr. Rhodes: Mr. Speaker, I am aware this sort of consideration has been given by the committee, but I repeat I have not received a specific recommendation or report from that committee. I am aware there have been discussions along the lines the member has referred to, but I do not wish to discuss that until I have received the actual report.

Mrs. M. Campbell (St. George): Mr. Speaker, I wonder if the minister is not aware of the fact that the Board of Trade has representation on this committee? How does that constitute, together with the two aldermen, a technical committee? Why is the Board of Trade the only group presumed to have some interest in this whole plan?

Hon. Mr. Rhodes: Mr. Speaker, I don’t believe we have indicated that the Board of Trade or any other particular body is the only body which would have interest in this plan. As I said earlier, the committee was established to be a committee of staff and it was recommended and suggested that there be appointments from the various interested political groups within the area of Metro. If Metropolitan Toronto or any borough or the city of Toronto wishes to appoint an elected representative, I feel it’s their right to do so. But as far as representation from the Board of Trade is concerned and how they were appointed to that committee, I am afraid I can’t answer the member. The appointments we have made from our ministry have been of technically competent staff to do the study. The other people have been appointed by other bodies.

Mr. P. G. Givens (York-Forest Hill): A supplementary: Is it the minister’s intention, if he establishes two STOL airports -- one on the island and one on the spit -- to eliminate the necessity of having a second international airport in Pickering?

Hon. Mr. Rhodes: Mr. Speaker, I am sure the member for York-Forest Hill is being facetious. He knows full well that no STOL airport, whether it is developed on the island or elsewhere, will replace the need for a second airport. I would leave that final decision to the federal Ministry of Transport to make. I cannot say it is even determined there will be the development of one or two STOL airports in this immediate vicinity.

Mr. Lewis: We have talked about it for years. It will be interesting to see what is solved.

Mr. Sargent: A supplementary: Is the minister aware -- he probably is -- that every major city in North America would give anything to have that island airport? What is the policy of the government? Is it for it or against it?

An hon. member: That is a good question.

Hon. Mr. Rhodes: Mr. Speaker, I can assure the member that I am for airports.

Mr. Sargent: Is that government policy?

Hon. Mr. Rhodes: That’s my policy.

Hon. Mr. Grossman: And I’m for the Islands.

Mr. Sargent: What is the government policy on it?

Hon. Mr. Rhodes: Mr. Speaker, the government policy on that particular airport will be determined once the report from the committee has been made available. When we’ve had a chance to study their recommendations, then we will determine the policy.

An hon. member: By that time you’ll be out of government.

Hon. Mr. Rhodes: I want to assure the hon. member that he will still be free to land his private aircraft on Toronto Island for a while to come.

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

LEAD HAZARD FROM ELECTRIC KETTLES

Mr. R. F. Nixon: I’d like to ask the Minister of Health if he can clear up the great electric kettle business by informing the medical officer of health for Toronto that he has not only the authority but the responsibility to release the specific names of the kettles and the level at which the lead pollution is liable to impinge on anybody using the water out of them?

Interjection by an hon. member.

Mr. J. R. Breithaupt (Kitchener): Is it true the minister has metal in his kettle?

Hon. F. S. Miller (Minister of Health): What do I have?

Mr. T. P. Reid (Rainy River): Get the lead out!

Hon. Mr. Miller: Oh, get the lead out. They were checking me for something like that yesterday but they didn’t find it.

Mr. Lewis: They can’t run a test like that.

Mr. Reid: Looking for a spot for a brain transplant?

Hon. Mr. Miller: Well, they wanted to have some absolute zero to start with.

An hon. member: They picked the right one.

Mr. Reid: They wanted to see if a politician’s brain was larger.

Hon. Mr. Miller: Or smaller, I’m not sure which.

Mr. Lewis: Will the minister answer the question!

An hon. member: Why doesn’t the minister answer the question?

An hon. member: Relax.

Hon. Mr. Miller: I don’t think the question of the release of the names of the kettles is properly within my jurisdiction. I do have the list of the names; I do know which kettles are in fact acceptable. I do fully agree though, with the federal minister’s statement that he would recommend that the use of electric kettles be curtailed during this period of time while we complete some tests.

Mr. Stokes: Doesn’t the minister think the public have the right to know?

Mr. R. F. Nixon: A supplementary: Wouldn’t the minister agree that if he’s got the list in front of him, he’d better read it to the Legislature now? Why not?

An hon. member: Now!

Mr. R. F. Nixon: We’re thinking about the health of the people.

Hon. Mr. Miller: Mr. Speaker, I have to get some advice on this particular issue before I do that.

Interjections by hon. members.

Mr. Lewis: A supplementary.

Mr. R. F. Nixon: The minister is completely --

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

Interjections by hon. members.

Mr. Lewis: I want to know on what grounds the medical officer of health in Toronto, this Minister of Health and the federal minister, Herb Gray, all maintain a conspiracy of silence while the public waits with considerable apprehension and the testing is done? Now why can’t the minister give us those names now?

Mr. Stokes: He has the information before him!

Mr. Lewis: What’s wrong with those people?

Mr. Sargent: He’ll be in hot water if he doesn’t!

Hon. Mr. Miller: At this point in time I would like to ensure that the tests were fairly done -- they’re being done by the Ministry of the Environment, so I’m sure they’re fairly done -- but I want to ensure --

Mr. Reid: We will all be dead by the time we get a report.

Interjections by hon. members.

Hon. Mr. Miller: -- that they are reproducible and that they are meaningful.

Mr. Speaker: A supplementary? Yes. The hon. member for Sandwich-Riverside.

Mr. F. A. Burr (Sandwich-Riverside): Mr. Speaker, a supplementary: Inasmuch as one of the companies announced that it had discontinued the practice of lead soldering about two years ago, can the minister tell us why it discontinued this practice? Was it because of this very reason -- that the lead was escaping?

Hon. Mr. Miller: I am told that all manufacturers have discontinued using lead at this point in time. One of the things we have to do is determine how old some of the kettles are that are currently emitting lead, and whether the new ones in fact are doing it.

Mr. Lewis: While the minister is determining, we will be perking.

Mr. Burr: On that basis, is the minister going to recall the old kettles?

Mr. Lewis: Recall the old kettles?

Interjections by hon. members.

Hon. W. A. Stewart (Minister of Agriculture and Food): Make them into windmills.

Mr. Lewis: Melt them down and use them for an energy source!

Mr. Speaker: Is there an answer to the last question? I’d be interested in hearing it.

An hon. member: Why don’t you make them into windmills?

Mr. Speaker: The hon. member for Port Arthur.

Interjections by hon. members.

An hon. member: Let’s hear the answer.

Mr. J. F. Foulds (Port Arthur): A supplementary, Mr. Speaker: Did I not hear the minister say that he has a list of the acceptable kettles? What damage can be done by relating to the public the names of those kettles that are acceptable? He will do no damage to the public and no damage to those companies.

Hon. Mr. Miller: I think by deduction one would have the kettles that were deemed to be not acceptable.

Interjections by hon. members.

Mr. Lewis: The public has a right to know!

Mr. Breithaupt: Mr. Speaker --

Mr. MacDonald: The public welfare, as usual, gets second consideration.

Mr. Lewis: I have a feeling this is a tempest in a --

Mr. Breithaupt: -- in a tea kettle. Did the minister have the list of manufacturers that is before him developed from a series of tests which have already been done with respect to this particular problem? How was the list of names made up in the first place?

Hon. Mr. Miller: Mr. Speaker, with great respect, I’d like to pass that question along to my friend from the Ministry of the Environment whose ministry in fact did the tests.

Mr. Breithaupt: I will be happy to pass that on to the minister.

Mr. Speaker: I must point out that more than half of the question period has now expired.

Interjections by hon. members.

Mr. Speaker: The hon. member for Scarborough West must ask questions, too. The hon. minister may respond if he wishes.

Hon. W. Newman (Minister of the Environment): What was that question again?

Mr. Breithaupt: On what basis was the list of names made up? Was it done from tests which have already been made by the ministry? And were some manufacturers thereby excluded?

Hon. W. Newman: The MOH for the city of Toronto asked us to do some testing on kettles. There were only nine kettles tested at that time. They were brought from various staff members’ homes and were kettles of various ages. We have different readings of parts per million in water.

Mr. Lewis: Very scientific.

Hon. W. Newman: Yes, very scientific.

Mr. Lewis: Certainly it wasn’t what one could call a scientific test.

Hon. W. Newman: We were saving the taxpayers money. We did some preliminary testing, and because we haven’t done any great, extensive testing, we don’t want to release the names of the nine kettle companies that we have dealt with at this point in time.

Mr. Lewis: What one has the minister stopped using?

Hon. W. Newman: I am still using mine.

Mr. Speaker: Does the hon. Leader of the Opposition have further questions? The hon. member for Scarborough West is next.

ASBESTOSIS

Mr. Lewis: Very quickly then, Mr. Speaker, I have a question of the Minister of Health.

Is the minister launching any specific inquiry into the prevalence of asbestosis in the Johns-Manville plant and the very serious disabilities, and indeed deaths, flowing from difficulties in the asbestos industry, as evidenced in the reply which was given to my colleague, the member for Sandwich-Riverside by one of the ministries, Health or Environment?

Mr. J. A. Renwick (Riverdale): Both are equally confused.

Hon. Mr. Miller: We have been carrying out a fairly intensive series of tests on asbestosis. I have some data which I can read to the member, or make available to him, on the types of asbestos and their effects upon health. There apparently is some variation in the ores and their effects on health, the size of the particles and so on. We are attempting to find what variables affect human health under current conditions. I have this available and I will be pleased to make it available to the member.

Mr. Lewis: Thank you. By way of supplementary, is the minister leading to a new set of standards which would then be imposed on the industry? Is that part of the examination?

Hon. Mr. Miller: It would be our overall objective, I am sure.

Mr. Lewis: Has the minister given himself a timetable, since it is pretty critical at this stage?

Hon. Mr. Miller: I agree it is critical. Yet, as the member knows, timetables involving the relationship between an occupational hazard and health are not easy to live by.

Mr. Renwick: Particularly when there is an industrial interest involved.

Hon. Mr. Miller: I don’t accept that comment. We are doing our very level best to find the cause and relationship between these in order to protect the workers in a meaningful way.

Mr. Renwick: The ministry is operating in a vacuum.

Interjections by hon. members.

Hon. Mr. Grossman: Does the member think we are all dying in a hurry?

Mr. Lewis: In the case of lead, uranium and asbestos, one can’t play around with it.

Mr. Renwick: The ministry doesn’t know what is causing the problem.

Mr. Lewis: During 1971 and 1972, according to the ministry’s reply, there were six deaths recorded from it. Does that strike the provincial secretary as comic?

Hon. Mr. Grossman: It strikes me as serious.

CLOSING OF PELHAM SECONDARY SCHOOL

Mr. Lewis: May I ask the Minister of Education if the Lincoln school board and the Niagara South school board are able to agree on certain boundary changes in order to provide for the Pelham school to continue to exist, would it be his ministry’s intention to accede to those changes?

Hon. T. L. Wells (Minister of Education): Mr. Speaker, I would have to hear the presentations from the two school boards before I could really give a definitive answer on that.

Mr. Lewis: By way of supplementary, might it be possible for the minister to encourage the boards to make their presentation to him within the next two weeks so that a decision could be made before the axe falls at the end of the year, as is now intended?

Hon. Mr. Wells: Sir, I think my friend knows that I spoke to the Lincoln board a couple of weeks ago and we discussed the problem. They indicated to me during our discussions that they would be meeting a delegation from West Lincoln township, which appeared before that board last week. As a result of that appearance, a committee of the Lincoln board has written the Niagara South board to ask for a meeting. To date, I haven’t any answer as to whether the Niagara South board has agreed to a meeting or not, we are waiting for that answer. But the process is on, it is up to the Niagara South board to agree to the meeting. If they do, the outcome of that meeting will then obviously be put before me.

Mr. R. F. Nixon: Supplementary: I wonder if the minister would consider using his office and good offices for such a meeting and ask the representatives to come and confer with him, so that if it is agreeable to change that boundary line permitting the school to continue there will be no delay while the information is transmitted from one level to the other? In fact, the minister can show some initiative in this regard.

Hon. Mr. Wells: I find that question rather surprising, Mr. Speaker. My hon. friend is always talking about autonomy at the local level, and yet at every instance be wants me to put my heavy hand on these boards.

Mr. R. F. Nixon: It has nothing to do with that.

Hon. Mr. Wells: I have already used my good offices, and the good offices of the Premier of this province have been used to gain special hearings for the people in the Pelham area with the Niagara South board. And, I might tell my hon. friend, much to the displeasure of the Niagara South board, who feel they can very adequately handle this matter themselves. They were elected by the people to handle it; they feel they can handle it.

Interjections by hon. members.

Mr. R. F. Nixon: Supplementary: Would the minister not agree that if the agreement is arrived at to change the boundaries, as has been indicated by the hon. member who asked the question, and there is such a delay that in fact the school closes anyway, then the minister has been shirking his responsibility?

Hon. Mr. Wells: If my friend, sir, would listen, I said the Lincoln county board had approached the Niagara South board for a meeting. Whether that meeting is held or not is now up to the Niagara South board. The Niagara South board and I have talked about this matter; we have talked about it with the Pelham people; and we have held meetings about it. I think it is now incumbent upon these two responsible bodies to get together and do something about it. If they ask us to be part of it we’ll certainly facilitate that; but otherwise I think the matter rests in their hands.

Mr. R. Haggerty (Welland South): Supplementary, Mr. Speaker: May I direct a question to the Minister of Education? Why did he allow the change in the boundaries in the first place? What they are suggesting now is to go back to the original boundaries, which would take West Lincoln into the town of Pelham. Why did the minister allow the change in the boundaries in the first place?

Hon. Mr. Wells: Of course, sir, I wasn’t the Minister of Education at the time those boundaries were established. It is my understanding they were the boundaries that were established at the time regional government was instituted in that area. I assume they were agreed to by the people concerned, the Lincoln county board and the Niagara South board.

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

Mr. Lewis: I don’t think I should.

Mr. Speaker: Does the hon. member have no further questions?

Mr. Haggerty: No.

Mr. Speaker: All right, the hon. the provincial Treasurer has the answer to a question asked previously.

NAKINA IMPROVEMENT DISTRICT

Hon. Mr. White: Yes, Mr. Speaker, on Tuesday the member for Thunder Bay asked a question concerning the status of the application of the improvement district board of Nakina in its quest for erection into an open community by way of a township rather than having a closed community, and so on; and the answer is as follows:

As part of the amendments to the Municipal Act, the government is considering a proposal to amend section 11 of the Municipal Act to permit improvement districts to be erected into township municipalities when they have attained a minimum population of 500. At present an improvement district must meet the ordinary population minimum of 1,000 population for a change of the township status. This would facilitate consideration of the application by Nakina which is now before the Ontario Municipal Board. Nakina now has a population of 621. It is expected that the application will be considered by the board in the usual fashion once the Municipal Act amendment receives assent by the Legislature.

Although the improvement district form of organization is a useful means of accommodating new development in sparsely populated areas of the north, there is concern that an appointed board of trustees is not a suitable form of government for established communities that have the capacity to sustain elected, local self-government. Under the proposed legislation, northern communities would have the opportunity to establish local community councils, which would be responsible for fire protection, water, roads and similar services. This proposal is part of our effort to improve conditions and services in the north, as announced earlier this year in the Speech from the Throne.

I might add that my colleague, the Minister without Portfolio (Mr. Irvine) will be meeting with the delegation from the association of unorganized communities to discuss this proposed legislation on June 13.

And, sir, I have a very short answer to a question asked by the member for Windsor-Walkerville --

Mr. Stokes: May I ask a supplementary to that?

Mr. Speaker: A supplementary would be in order, yes.

Mr. Stokes: Since there is precedent for amendments to section 11 of the Municipal Act to provide for communities that are improvement district boards with less than 1,000 population to seek erection into a township -- there is ample precedent -- why is the minister so long in bringing in legislative authority for that move?

Hon. Mr. White: Well sir, I don’t know. The matter came to my attention some months ago. It sounded pretty sensible to me and we have been acting on it as quickly as possible from that day to this.

I would like to get the views of the Association of Unorganized Communities before proceeding further. That meeting is coming up in a couple of weeks, so I would expect to have an amendment available very soon. It seems to me it would be more orderly to proceed under such an amendment than to make an exception to the existing section 11.

Mr. F. Laughren (Nickel Belt): Supplementary, Mr. Speaker: Is it the intention of the minister to invite the members of the Legislature who have many unorganized communities in their ridings to that meeting?

Hon. Mr. White: I would welcome that, Mr. Speaker. I will ask my colleague, the Minister without Portfolio, to circularize the affected members giving the time and place of that June 13 meeting.

MUNICIPAL BUDGET CONSTRAINTS

Hon. Mr. White: Sir, just one short answer to the member for Windsor-Walkerville, who inquired about provincial grants to Windsor. In 1973 they amounted to $4,985,000 and this year’s total is expected to be $5,811,000. I think it is interesting to see that Windsor held its expenditure growth increase in 1973 to five per cent -- very much, I suggest, to the credit of Mayor Frank Wansbrough and his council.

Mr. B. Newman (Windsor-Walkerville): Supplementary.

Mr. Speaker: Supplementary, yes.

Mr. B. Newman: Is the minister aware that the community is involved heavily in environmental projects and --

Mr. Speaker: Order please. Was it the question of the hon. member for Sandwich-Riverside originally?

Mr. Lewis: Of course.

Mr. Speaker: Well, I’m sorry then. If it was his original question he may ask the first supplementary. I’ll come back to the hon. member for Windsor-Walkerville.

Mr. Burr: Mr. Speaker, although I’ve lived most of my life in Windsor-Walkerville, I represent Sandwich-Riverside, so the mistake is understandable on the part of the minister.

Mr. Breithaupt: It is understandable.

Mr. Burr: Is the minister aware that until annexation about eight years ago, the city of Windsor I think had a complete sewage system, but because of the annexed areas Windsor now has a large area that is living with septic tanks? The Minister of the Environment, rightly so, has asked us to put in the sanitary sewers and storm sewers. This creates a peculiar problem for Windsor, and that is the problem I was drawing to the minister’s attention on Tuesday. That’s why I asked him to review it.

Hon. Mr. White: Well sir, I don’t want to be provocative, but the municipalities do want additional unconditional grants. We are going up by nearly $1 million. Whatever deficiencies continue to exist will be brought to our attention, no doubt, by Windsor. I suppose that if they were better represented in this Legislature I might be better informed in the matter. They haven’t had really first-class representation since Ivan Thrasher was defeated.

Mr. MacDonald: The minister is certainly being provocative as well as inaccurate. The people of Windsor saw through his people a long time ago.

Mr. Speaker: The hon. member for Windsor-Walkerville.

Mr. B. Newman: Mr. Speaker, a supplementary of the minister --

Interjections by hon. members.

An hon. member: The Tories will never get in again down there.

Mr. Speaker: Order please.

Mr. B. Newman: With the attitude that the minister just took, Mr. Speaker, there will never be representation.

Mr. Breithaupt: Provincially or federally.

Mr. Ruston: They will never get any in the next 10 years, that’s for sure. The Tories are all going down the river there.

Mr. R. F. Nixon: Why doesn’t the minister go down and run Windsor and show us how it’s done?

Mr. Speaker: Order.

Mr. B. Newman: Is the minister aware, because of the additional burden to provide sewage treatment and other facilities as a result of the request from the Minister of the Environment, that the city is adversely affected and cannot provide other needed facilities in the community, such as public works?

Hon. Mr. White: Sir, I just am not going to accept that proposition. When one sees Windsor’s growth in spending last year was five per cent, and Rockwood’s was 29 per cent, and Welland’s was nine per cent, and West Lorne’s was 24 per cent, I suppose if these works are badly needed and the expenditures acceptable to the people of Windsor, they’ve got the resources to go ahead and do it.

Mr. Speaker: Supplementary? The hon. member for York-Forest Hill is next.

SPADINA EXPRESSWAY

Mr. Givens: I wanted to ask the Minister of Transportation and Communications whether in light of the very dismal report he made earlier on the failure of the dial-a-bus system, and in light of the fact that it will be many years until there is any relief in sight, whether he would consider paving immediately the Davis ditch from Highway 400 to Eglinton in order to immediately relieve the horrible traffic congestion that is rampant in that part of Metropolitan Toronto?

Mr. Lewis: It is hard for congestion to be rampant.

Hon. Mr. Rhodes: No. Mr. Speaker.

Mr. Givens: He’ll change his mind.

Mr. Speaker: The hon. member for Port Arthur.

STRIKE AT FORT FRANCES CLINIC

Mr. Foulds: Thank you, Mr. Speaker. A question of the Minister of Labour, although I hate to interrupt his present political reverie. A question about the strike in Fort Frances between CUPE Local 795 and the doctors’ clinic: Can the Minister of Labour tell me if any mediation meetings have taken place between CUPE Local 795 and the management of the private doctors’ clinic in Fort Frances?

Hon. F. Guindon (Minister of Labour): Mr. Speaker, the only thing I know about this particular case is that a meeting has been called for Wednesday, May 29. That’s the latest --

Mr. Foulds: Can the minister tell me if that meeting took place and where it took place? Can he tell me why it took his mediator so long to arrange such a meeting when the minister informed this House that a meeting would take place on May 13 or 14?

Hon. Mr. Guindon: Mr. Speaker, if my memory serves me well I understand some of the negotiators, particularly on the union side, were attending a very important conference. That, I think, was the reason.

Mr. Foulds: Mr. Speaker, is the minister not aware that the chief negotiator for the union has been in Fort Frances and has stated publicly that he would meet any time, any place, and that the meeting has failed to take place because the doctors have obstructed it?

Hon. Mr. Guindon: I would be happy, Mr. Speaker, to get further details and to convey the message to my friend.

Mr. Lewis: While he is still minister.

Mr. Ruston: When is he going to Ottawa?

Mr. Speaker: The member for Huron is next.

Mr. J. Riddell (Huron): Thank you, Mr. Speaker.

Mr. Renwick: He should stay here and go down in glorious defeat.

Mr. Speaker: Order.

SOLANDT COMMISSION REPORT

Mr. Riddell: A question of the Provincial Secretary for Resources Development, if I could, please. In light of the fact that many people are greatly concerned over the loss of their homes and land as a result of the proposed Hydro route from Nanticoke to Pickering and because Dr. Solandt himself has said he anticipates about 50 homes will be taken along the 100-mile east-west corridor -- and that’s one home every two miles according to good Liberal mathematics -- has the minister yet decided, as he stated he would some time after May 10, whether the government will accept Dr. Solandt’s recommendation for expropriation without going through the requirement for a hearing of necessity?

Hon. D. R. Timbrell (Minister without Portfolio): The member read that very well.

Hon. Mr. Grossman: Mr. Speaker, just as soon as the government arrives at its decision, it will be made apparent to this Legislature.

Mr. Riddell: Can the minister tell me at this time whether there are any changes in Dr. Solandt’s recommended route which reflect areas of major public concern about the proposed route?

Hon. Mr. Grossman: Mr. Speaker, the member is attempting to get me to tell him in advance what changes there may be, and if there are any.

Mr. Lewis: Shocking.

Mr. Ruston: Nobody else but this minister --

Interjections by hon. members.

Mr. Lewis: The provincial secretary is too smart for that. He wouldn’t let them do that to him.

Hon. Mr. Grossman: Of course I am.

Mr. Speaker: Order, please.

Hon. Mr. Grossman: Mr. Speaker, the matter has received a tremendous amount of study by the government, particularly by the cabinet committee on resources development. Its recommendation has gone forward and a decision will be made very shortly. The member will, I am sure, be satisfied that all the consideration any reasonable person would expect a reasonable government to give to these very difficult matters has been given and he will be one of the first to know about it if he is in the House on that occasion.

Mr. Riddell: I will be here.

Mr. Speaker: The member for Thunder Bay.

DREE PROGRAMME IN NORTHWESTERN ONTARIO

Mr. Stokes: Thank you. I have a question of the provincial Treasurer. When will the announcement be made jointly by the federal and provincial governments with regard to the provisions of the DREE programme in northwestern Ontario? What criteria is he going to use to assure that the places in northern Ontario which need it badly will have some good effect from it?

Hon. Mr. White: Sir, the most recent information is that May 31 is convenient for Mr. Andras, but we are pledged not to reveal the details of this agreement until that time.

Hon. Mr. Rhodes: Pierre wants to fly in.

Mr. Foulds: A supplementary: I wonder why is it necessary for the announcement to coincide with Mr. Andras’s calendar, since Mr. Andras is the Minister of Manpower and Immigration, and not the calendar of the Minister of Regional Economic Expansion, Don Jamieson, who is responsible for the agreement?

Mr. Lewis: Precisely, precisely.

Hon. Mr. White: He has been named, no doubt by federal order in council, as the signator for the federal government in this matter.

An hon. member: Why?

Hon. Mr. White: Why he would have been selected? I really couldn’t say.

Mr. Foulds: Is the Treasurer going to work hand in glove with this pork barrel style of federal political campaigning by the Liberals?

Hon. Mr. White: We have no choice in the matter.

Mr. Speaker: The hon. member for Etobicoke.

PUP TRAILERS

Mr. L. A. Braithwaite (Etobicoke): Mr. Speaker, I have a question of the Minister of Transportation and Communications. Can the minister comment on newspaper and other media reports on the fact that a tractor-trailer driver was fined $24 in Orillia yesterday --

Mr. E. M. Havrot (Timiskaming): Louder.

Mr. Braithwaite: -- as a result of an accident which occurred last August when a trailer broke loose -- a pup trailer? And can the minister state when the culmination of the lengthy research which his department is doing on pup trailers will be brought to this House in the form of a report?

Hon. Mr. Rhodes: Mr. Speaker, the hon. member is in error and should not state that it was a pup trailer, because it was not. A dump truck was involved and the dump truck was pulling a small, light trailer that is often used to carry a front end loader, which I believe is what this trailer has been used for.

The driver was fined and I have no comment to make on the amount of the fine other than to say that I am a bit surprised at how lenient it was, but that’s a decision for the courts to make, not for me.

Secondly, the fine was for the trailer hitch -- that is what the fine was for, as I understand it.

But I want to make it very clear at this point that it was not a pup trailer, as the member has referred to it, and I think the article points that out. The study is continuing in conjunction with the federal government. We are working very closely with them to come up with what we hope will be a reasonable solution to what is developing as a problem.

Mr. Braithwaite: A supplementary: The minister no doubt is aware there are large pups and small pups --

Mr. Speaker: The question period has now expired.

Petitions.

Presenting reports.

Interjections by hon. members.

Hon. J. W. Snow (Minister of Government Services): Mr. Speaker, if the hon. member from Owen Sound would remain for a moment -- during the discussion of my estimates, certain information was requested by the hon. member regarding leases on office space and other facilities entered into by my ministry. I promised to give the hon. member additional information. Today I would like to table, Mr. Speaker, a printout by the computer giving fairly detailed information on 1,147 leases which are in effect.

Mr. Sargent: Mr. Speaker, I want to thank the minister very much. I didn’t think it would happen. Thank you.

Hon. Mr. Snow: Mr. Speaker, I would point out the hon. member wanted that information and bet me that he wouldn’t have it by June 1; I’d like to put it on record that it was tabled on May 23.

Mr. Sargent: He beat the House.

Mr. Lewis: For money he’ll do anything.

Mr. Sargent: I’ll buy him a new hat.

Mr. Speaker: Presenting reports; any further reports?

Hon. Mr. Rhodes: Mr. Speaker, I am pleased to submit the Ministry of Transportation and Communications annual report for the fiscal year ending March 31, 1973.

Mr. Speaker: Motions.

Introduction of bills.

Orders of the day.

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

LAND SPECULATION TAX ACT (CONTINUED)

Mr. Chairman: In the discussion of Bill 25, the last matter under discussion was an amendment proposed by Mr. Burr, I believe. Is there any further discussion on that?

Mr. R. F. Nixon (Leader of the Opposition): I would like to ask the minister if he would not now be prepared to either give some consideration to an amendment or suggest there might be some improvement that he himself could make in clause (g), because it is well known that the improvement on renovations -- which is a part of the government programme, I believe announced a few months ago by the new Minister of Housing (Mr. Handleman) -- is one that should never be underestimated. The concept that all housing has to be new is, of course, an erroneous one, in that dollars invested in the refurbishing or the renovation of older homes is often what saves smaller communities and makes available some of the finer homes in major urban areas.

The concept of that 20 per cent limit, as the minister is well aware, is going to lead this renovation into an area which becomes prohibitive. In other words, in order to be exempt from the tax, as I understand it, the renovator will have to invest such a substantial amount of money that the renovated older home would be, I think someone said equipped with air conditioning and so on, which is surely not in the best interests of simply putting good, renovated, old homes back on the housing market. It seems to me the provisions as they presently are in the bill will mitigate directly against that and will mean that the renovated older homes will be only among those very high-costing homes and available to a limited number of people in the community, or else renovation itself will become economically unsound. I would hope the minister would consider an alternative other than the one that is before us.

Mr. J. R. Breithaupt (Kitchener): Mr. Chairman, I too would like to comment briefly on that particular matter. We have seen, particularly in the downtown parts of Toronto, various areas which have been renovated and made extremely handsome by the changes that have resulted. However, they have, of course, resulted further in displacing persons who had been living in those homes when they were more reasonable and cheaper accommodation, and they have resulted in their replacement by various people who have sufficient funds to allow themselves the luxury of downtown accommodation when it is substantially changed and improved upon.

As my leader has mentioned, if the renovation costs are such that they will have to be extreme in order to come up with the percentage amount that is set out here, then surely we are going against the basic principle involved in trying to renovate homes in the downtown part of our communities in many cases, especially homes which will then be available to persons of limited or modest means of income.

I think this is an amendment which is certainly worthy of consideration and I would hope the minister would consider it.

Mr. Chairman: The hon. member for Lakeshore.

Mr. P. D. Lawlor (Lakeshore): Mr. Chairman, surely the section -- and I think the minister has gone some distance to asserting this and affirming it -- surely the section is counter-productive, along the lines of the argumentation here today, particularly as you have admitted a real basis of differential between smaller communities and communities that are not so small, places like Windsor and the metropolitan areas. Even if it were conceded that a 20 per cent renovation figure in metropolitan regions was somehow feasible, over against that in these other areas you are really acting as a clog in the equity to a very serious extent. Your government has of recent date -- through the minister who sits slightly on your right -- announced a whole series of NIP programmes, RAP programmes and a new programme on house improvement and renovation in designated districts, and outside those districts, in an endeavour to improve the land. If a man has to spend 20 per cent, that money might have been spread over a larger number of homes. He has to plunge all his capital, or a goodly portion of it, into a single improvement. Surely again, in social terms if not in economic terms, that is counter-productive too? Can’t you give consideration to revising those figures, at least for the time being?

They say: “Yes, we’ll consider this in our regulations.” By the time we are finished, there is going to be infinitely more in the regulations than in the bill, despite all your amendments and the way the bill gets bloated in the process of passing through this House. If that was your purpose, we again find that unpalatable; that you should place a matter of such substantive worth in terms of regulations where they are largely hidden away, rather than in terms of the Act itself.

We know how primitive, primeval and rudimentary this legislation really is, but surely it can be bolstered right in front of us today sufficiently to give cognizance to these basic requirements and these exigencies of home improvement throughout the province -- which you yourself have acknowledged -- but because of the nature of the wording, you are unable to give any effect to as things presently stand.

Mr. Chairman: The member for High Park.

Mr. M. Shulman (High Park): I’m not rising to support or criticize the amendment, I’m just trying to understand what is going on here; which is a little difficult for me. Perhaps the minister can enlighten me?

If I buy property which contains a building or a structure and that building or structure is worth, say $10,000, am I to understand that if I put in $2,000 worth of improvements, there is no tax payable once I sell that -- provided that building is worth 40 percent of the land? Is that exactly what this section means?

Hon. A. K. Meen (Minister of Revenue): To answer the hon. member for High Park, Mr. Chairman; first of all, no, I don’t think it is quite what the section means.

Mr. Shulman: What the hell does it mean?

Hon. Mr. Meen: What we are saying is that if your purchase price is $10,000 -- and we are talking about land and building; we are not segregating -- then into the building it would be necessary for you to put $2,000 worth of improvements before you would escape the land speculation tax on your resale for, say $15,000, $18,000, or whatever you got for the land and building. I don’t think that is quite what the member for High Park was saying.

Mr. Shulman: Aren’t you inviting fraud with this section? In effect you are saying that if a person owns such a property, he has to at least go through the appearance of making such an improvement. Isn’t that what someone will do? By putting in 20 per cent in improvements, or pretended improvements or unnecessary improvements, or necessary improvements -- to put on a new wing, if necessary -- you can avoid 30 or 40 or 50 per cent in tax.

It strikes my mind that you are perhaps making a minor error; and perhaps the first one we’ve had cause to point out in this bill -- minor, that is. Would the minister agree with me that this section is not, perhaps, inviting trouble?

Hon. Mr. Meen: Mr. Chairman, I would say the section is elementary in what we are trying to catch at this stage. I think we will be able to develop some sophistication on it with some experience. What we are trying to do here is to avoid the “white painters.” These are people who come in and do nothing but just slick up the front of the building -- maybe give it a sandblasting, perhaps fix up the front steps, rework the kitchen, and a few things of that sort -- but provide a minimal amount of true improvements in the premises. Here in Toronto, I’ve been advised that the 20 per cent figure is a little on the low side rather than on the high side. Whereas the hon. member for Windsor-Walkerville --

Mr. F. A. Burr (Sandwich-Riverside): Sandwich-Riverside.

Hon. Mr. Meen: Sandwich-Riverside, thank you.

Mr. J. A. Renwick (Riverdale): He lives in Windsor-Walkerville.

Hon. Mr. Meen: He has indicated that in other areas of the province, as for example in Windsor, the 20 per cent figure may be on the high side.

What I might be able to work up at some time in the near future would be some schedule whereby the amount of profit might be related to the brevity of time the property is held by the person who improves it and to the amount of his demonstrable expenditures in making the improvements. Now whether all this sort of thing lends itself to fraud, as the member for High Park suggests, I really couldn’t say. I think we are entitled to assume that the people who are in this business will abide by the law, will provide adequate, suitable and correct figures on their expenditures, and that they will give these as requested. Our own assessment people will be able to pin down the improvements and identify them, and will be able to establish what are legitimate improvements and determine whether the renovator has complied with the section as it stands.

As I indicated, and this is more in response to the member for Sandwich-Riverside, I think by regulation we can relieve against an undue tax burden arising in the cases which he drew to my attention on second reading. If I set the tax at a lower amount than the 20 per cent rate, I would not have authority under the regulations to exact a tax which, say based on some other schedule of improvements, worked out at more than 20 per cent. If I set it at a reasonably high figure, for example 20 per cent or 30 per cent or something like that, and work out a schedule which would apply to someone like the renovator as illustrated to me by the member for Sandwich-Riverside, we would be able to relieve against an undue tax burden which might accrue to him.

That is the course of action I would recommend we follow at this time rather than set an arbitrary figure again, of 10 per cent as suggested by the member for Sandwich-Riverside. It could wind up being inordinantly low and simply a licence to speculate when they are simply prepared to roll in a few dollars and figure that 10 per cent could be nothing more than a very modest improvement -- enough to slick up the place with a coat of paint on everything and very minor improvements otherwise after which they recover their money, and presumably a handsome profit free of tax under those circumstances.

I don’t think any of us want that. We’re trying to get at the person who, you might say, is not a legitimate renovator. We want people to continue with their programmes of renovation. We don’t want this rule to be counter-productive but we also want to see that the “white painter” does not continue to get away with the kind of speculative profits he’s been able to get away with in the past.

Mr. Shulman: Mr. Speaker, I want to pursue this. I think the minister may not have thought this through. Let’s take a specific example.

Mr. Renwick: He hasn’t.

Mr. Shulman: Let’s suppose you and I go into partnership today and we buy a specific property in the outskirts of Toronto for say $30,000 -- it would have to be quite a way out to buy it that cheaply. There’s a building on it worth $20,000. Let’s suppose we’re speculators, you and I, and we hold on for a period of some years and ultimately the property is worth $60,000. In other words, over a period of years it doubles.

If we go to sell at that time we’re going to have to pay the 50 per cent speculative land tax, which will be 50 per cent of our profit or 50 per cent of $30,000. In other words, we would pay $15,000 in tax. We can avoid paying the tax completely if at that time we say: “Why give the government $15,000? Instead of this, let’s renovate to the tune of 20 per cent of $20,000,” which means we have to pay out $4,000 --

Hon. Mr. Meen: No, 20 per cent of $30,000.

Mr. Shulman: All right, $6,000. We have to pay out $6,000 at that time to renovate. We don’t have to paint but we can paint; we can add a fire escape; we can put in windows where there weren’t windows and take out windows where there were windows --

An hon. member: And air conditioning.

Mr. Shulman: Air conditioning, great. We can renovate unnecessarily and foolishly to the tune of $6,000 which will save us $15,000 in tax.

Mr. Breithaupt: And a new buyer can tear the whole thing down.

Mr. Shulman: Well, then he’ll get his 20 per cent. Does the minister not realize that in effect this section will mean you would have to be a certifiable idiot to pay that tax? All you’re going to do is produce all sorts of make-work; in other words another inflationary pressure. It just doesn’t make sense. Am I missing something? Is there a flaw in my thinking?

Hon. Mr. Meen: No, I think the member is touching on the point I made -- we believe there should be a limit as well --

Mr. Shulman: But it isn’t there.

Hon. Mr. Meen: -- on the length of time within which this would occur.

Mr. Shulman: It’s not there.

Hon. Mr. Meen: That’s correct.

Mr. Shulman: If there’s something which should be there but isn’t there, shouldn’t the minister perhaps stand this section down until he figures out a way to make it work? Obviously the way it is now, it’s an invitation to fraud and legally it’s quite proper; but it’s an invitation to dilly the government. Isn’t that the word? Dilly?

Hon. Mr. Meen: Diddle, you mean diddle.

Mr. Shulman: Diddle. It’s an invitation to diddle the government, and anybody who didn’t do it would be a damn fool. Surely if the section isn’t going to work the way it is and if you yourself recognize something’s got to be done about it, stand it down and we’ll go to the next section; we’ll come back to this when you have figured out a proper way to do it. If it goes through as it is, it is just one more joke in this series of jokes in this bill. Will the minister follow my suggestion?

Hon. Mr. Meen: No, Mr. Chairman.

Mr. Shulman: I didn’t think so.

Mr. Chairman: The member for Riverdale.

Mr. Renwick: I am not certain whether my comments are related specifically to what the member for High Park has said, but I want to try to ask the minister a question. I raised the matter on second reading and I raised the matter when the debate was taking place on the definition of what I think was called net maintenance cost at the time the bill was introduced.

The key part of the clause is the word renovation. Is the minister saying that any out-of-pocket expenditure incurred by a person for the purpose of doing something to a piece of property is going to be included for that purpose --

Hon. Mr. Meen: Doing something to the building?

Mr. Renwick: -- in calculating the 20 per cent regardless of what the amount is? I take the drift of his remarks, in response to the proposed amendment of my colleague from Sandwich-Riverside, to be that he wants to rule out the straight out-of-pocket expenditure which is paid for the white paint which paints the house.

Isn’t he really inviting the kind of problem which I tried to raise earlier in the debate? That is that the very use in the taxing statute of the word renovation begs the question, for any court, or any tax body which has to make a decision with respect to it, as to whether or not the expenditure is an expenditure on revenue account or an expenditure on capital account. I think that is what I am trying to ask the minister.

It’s not just a question of whether or not one has expended dollars on a piece of property or on a building or structure on that property, which is what the minister appears to be saying, or whether that amount represents 20 per cent of the original cost or the fair market value, depending on the date upon which the property was acquired. Is he not inviting his ministry in the initial instance and anybody who subsequently has to deal with the matter on appeal to make the distinction as to whether the expenditure is an expenditure on revenue account or an expenditure on capital account? I happen to think that by use of the term renovation, without any other clarification, he is providing for that distinction.

Hon. Mr. Meen: My personal feeling is that I am looking at the capital side, not the income side of expenses. When I talk of renovations, I am talking of capital improvements.

Mr. Renwick: Yes.

Hon. Mr. Meen: We may need some clarification on that in due course, or interpretation of what constitutes renovations, Mr. Chairman. It’s the capital improvement side I am talking about.

Mr. Renwick: This is what worries me, because I don’t think the minister -- and certainly the public -- has any appreciation of what is involved in the provision of this bill in which he is involved.

I notice there is a group which has formed, presumably for the purpose of making representations on this section. I haven’t received any representations from the property renovators’ association, have you? Has the minister received representations from a body mentioned in the newspapers about two or three days ago, the property renovators’ association or some such group of persons, which is obviously keenly interested in this problem?

Hon. Mr. Meen: Yes, Mr. Chairman, I recall that coming in. I have not studied it in detail but I think it’s called the professional renovators association or something like that.

Mr. Renwick: Yes. I haven’t seen them myself, and I take it that my colleague, the member for Lakeshore, hasn’t received it. I don’t think that the member for --

Mr. Burr: I received some in Windsor.

Hon. Mr. Meen: It’s the Professional House Renovators’ Association.

Mr. Renwick: Yes; obviously this is a body which has been called into existence by the provision of this statute. I am very much concerned when the minister says he may have received it but he hasn’t studied it, because, like the member for High Park, I am engaged at the moment in trying to understand, rather than to express an opinion of approval or disapproval, what the minister is about. I find it extremely difficult when I am asked to understand something which the minister himself doesn’t understand and his advisers don’t understand. I am going to refer, ad nauseam if I may -- because I did it on second reading and I did it in the net maintenance clause -- to Gilmour’s “Income Tax Handbook, 1972, Tax Reform,” which is the 22nd edition of his book. It is still at page 365: I have never gotten off the page. I may have referred to 366, but it is all on the one page in the book. I see that my friend, the Minister of Housing, is well aware of the reputation of Gilmour’s tax handbook -- is that correct? Oh, he is not nodding or anything.

Hon. S. B. Handleman (Minister of Housing): I have heard of him.

Mr. Renwick: You have heard of him.

Would you consider it your bible; do you have it on your bedside table for nighttime reading? I do. I have had it there ever since this bill was introduced. I am going to close my eyes now and see if I can recite it verbatim:

“The American Institute of Certified Public Accountancy from time to time publishes accounting research studies to provide discussion and documentation of accounting problems.”

This is under the heading: “Current Accounting Practices Relating to Repairs and Improvements.”

“Accounting research study No. 7, entitled “Inventory of Generally Accepted Accounting Principles of Business Enterprises,” by Paul Grady, was published by the American Institute in 1965, and contains the following informative section in chapter 4 respecting capital and revenue expenditures:

“Depreciation is the means by which costs and other amounts are removed from asset accounts and charged to expense over their estimated productive lives. Many expenditures for or related to fixed assets are charged to expense when incurred, and therefore never become a part of the asset account balance. Expenditures that are charged to the asset account are called capital expenditures; those charged directly to expense are called revenue expenditures.

“The distinction between capital and revenue expenditures may be an arbitrary distinction based on the materiality of the amounts involved [Which is the first point; the materiality of the amounts involved], or the distinction may be based on whether future periods will benefit from the expenditure or only the period in which it is incurred.

“As a general rule, expenditures for ordinary repairs necessary to put assets back into good operating condition, and for maintenance aimed at keeping them that way, are expenses as incurred. The general rule sometimes is modified to permit the distribution of total estimated repair costs over the life of the asset through the use of a reserve. Total repairs, both ordinary and extraordinary, may be estimated for the life of the asset on a proportionate amount charged to expense and credited to reserve each period. Actual expenditures are then charged against the reserve.

“Minor improvements and additions are usually included as ordinary repairs and expensed accordingly.”

Well, it indicates clearly the kind of problem which the minister is introducing into the taxing laws with respect to this question about what the term renovation means. I think my concern has been throughout, as reflected in the court case -- which I am not going to relate extensively again, because I did it at another point in time -- about the question of the Canada Steamship Lines versus the Minister of National Revenue, 1966.

One only has to drive around the city of Toronto to recognize there is a great deal of “white paint” renovation taking place. The minister has referred to it either as “white paint” or as “sandblasting.” And there have been the questions of the redoing of the electrical systems in a house; the redoing of the plumbing system in a house; and perhaps the repair of the roof. In many cases the repair of a roof and the replacement of the roof on a house has been considered to be a repair cost, not a renovation cost.

Hon. Mr. Meen: It can be treated sometimes even as a revenue account.

Mr. Renwick: I am simply saying that the basic question is not going to be quantified in terms of the materiality of the amount. There must be some better distinction which has to be made.

I think the minister’s bill appears on first blush to indicate that if I buy a property on which there is a structure which could be called a house, then every cent I take out of my pocket to do something to that house property is going to be an expenditure which can be included in the calculation of the 20 per cent, or as my colleague has indicated the 10 per cent.

My impression from what the minister has said from the first point in time when I raised this particular aspect of the problem -- and it is only one aspect of it -- has been that he does not agree with that, that he in fact as minister is going to make decisions as to what number of dollars, when expended and for what purposes, are to be treated for the purpose of calculating this 20 per cent.

Is that a correct assessment of the minister’s position? Is he going to abide by the traditional distinctions or tests to determine whether or not a particular expenditure is one on capital account and therefore a renovation cost, or whether it is one on revenue account and therefore a repair cost in the traditional sense?

Hon. Mr. Meen: Mr. Chairman, I think I was perhaps oversimplifying my assessment of what one would allow as a proper expense in the case of renovation expenses. I was thinking in terms of every last cent which effected a capital improvement as being a sort of capital expenditure.

The hon. member for Riverdale points out that at least under the Income Tax Act -- according to Gilmour, in any event -- they have treated certain of these expenditures, sometimes even including a complete new roof, I suppose. So I would have thought in reading Gilmour, and I have read that section in Gilmour myself, that the case of a complete new roof would be more legitimately a capitalized matter. Since one would expect a new roof to last, say 15 or 20 years, I would have thought that the income tax people might very well rule that that had to be depreciated over its anticipated life. But a running repair, one might say, where one patched up a hole in a roof brought about by a storm, would be an expense against income in the year in which the expenditure was incurred and therefore not charged off and added to the capital account.

My view would be if a renovator purchased a house that needed a completely new roof, I would treat him the same way as the renovator who purchased a house which merely needed some repairs done to that roof. Putting it another way, perhaps more accurately, I would treat the man who makes a repair to a roof to make that house water-tight in the same way as I would treat him if he were replacing the entire roof. But I think that would be a legitimate expense. Even though it might under the Income Tax Act be treatable as a revenue expense, I think that would be something that could still legitimately be charged by that renovator against his cost of converting that house into a first class livable accommodation.

Although we would look at the practice followed under the Income Tax Act, I am not suggesting we would follow it exactly; just as I have indicated here, my view is that for the benefit of the taxpayer under the Income Tax Act certain of these expenses might be classed as revenue expenses. He might very well want to charge them off against revenue in the year in which he incurred the expense.

Under this Act I think it would be appropriate to permit that as -- in many cases anyway -- a legitimate capital expenditure for the purpose of the renovation in determining whether or not he was subject to tax.

Mr. Renwick: Mr. Chairman, I do want to labour the point to some extent. I think we almost have to go back to first principles to illustrate to the minister the policy of what he is talking about. I think without being overly puristic about the question of accounting, what the Income Tax Act of Canada in fact provides is that you determine, in accordance with generally accepted accounting principles, the business operations of a particular operation and you apply the special rules of the Income Tax Act subsequently.

What I am trying to clear up is the question of expenditures on capital accounts. What the minister refers to as capital improvement expenditures, as distinct from revenue expenditures, is not a matter relating to the taxing statutes. It may be of significance in the way in which the taxing statutes are interpreted, but if one could assume a pure world in which there was no income tax or any other kind of tax which related to capital or revenue expenditures, the accountants would still be called upon to determine whether or not an expenditure at any given time is an expenditure on capital account or an expenditure on revenue account.

That question remains, whether or not we are talking about this taxing statute, the federal income tax, the Corporations Tax Act or any other taxing statute. Because the quotation which I referred to was not relating to the application of a taxing statute, it was relating to the question of generally accepted accounting principles for business enterprises.

As the minister knows, in the Business Corporations Act and elsewhere, there is the tradition of the report of the auditors with respect to the state of business of a particular operation. They talk about general accounting principles, and those principles are principles which are not related to the impact of particular taxes imposed by particular governmental or state authorities of one kind or another. What nobody now understands is the fact that the minister has clarified one thing, although he has confused it by mixing it up with something called income tax practice at the federal level, which has nothing to do with the problem. What he has said is that any dollar which is expended by any person on a building or structure on a piece of property for the purpose of calculating the 20 per cent, must be assessed by the accounting profession in the first instance for that person, and then presumably by the minister’s accounting people to see whether or not they agree, to determine whether it is or isn’t a capital expenditure or a revenue expenditure. I am simply pointing out that the problem is an extremely difficult one.

However, there will be cases when it will be difficult to determine how to classify an expenditure. As an illustration, the cost of replacing the roof of a factory building -- of course here we are talking about a residential property -- may clearly be a revenue expenditure in one case, but in the case of renovations to an old and dilapidated building, such a cost could be argued to be a capital expenditure.

Somebody is going to have to make the decision as to whether or not in the building that is kind of an old and dilapidated property -- presumably in the case of residential accommodation an abandoned building, rather than one presently occupied by persons as a residence -- a substantial expenditure such as the cost of replacing the roof, which the minister would agree would be a material amount of money with respect to a house property, is or is not going to be included in what he referred to as capital improvements, which I understand to be his extrapolation of what the word “renovated” means in the taxing statute. I think that poses a very serious problem for all of the people who, for legitimate business purposes -- true somebody may say that there are speculative profiteers -- have taken buildings and renovated them and then either sold them or leased them to persons for living purposes.

I suppose the classic example of the kind of renovation which is taking place is the renovation on -- what is the street running north from Yorkville between Avenue Rd. and Bay St., where the man who made the killing on Shell Oil --

Hon. Mr. Meen: Is that Hazelton you are thinking of?

Mr. Renwick: Yes, Hazelton Ave. Obviously that is an area where older buildings, still quite fit to be lived in, were first bought, substantial renovations were made, and I don’t know whether they now have been sold or leased -- I am just using it as an example. I would be very curious as to the determination which would be made by the minister with respect to those costs; and that included the gutting of buildings, as I understand it, in a rather loose sense of the term, and the sandblasting and the renovation of them and so on, to build them into something which have been called now, in the elitist term, “townhouses” and sold at substantial numbers of dollars over and above what they were acquired for.

As I say, I am only using it as a physical example of what is taking place elsewhere in the city. I am very curious as to whether or not the minister understands that, because I have laboured the point now and I am not going to labour it any further.

If the minister, in the spirit with which this assembly is always imbued -- that is the ecumenical spirit which has kept us all here so closely involved in this particular tax bill, not only because of our genuine love and affection for the minister himself but also for the government’s legislation, but more particularly for the people of the Province of Ontario -- but having regard to that ecumenical spirit, I would simply point out to the minister that when the Canadian Transport Commission was faced with this kind of problem they dealt with it by schedule. They eliminated the problem because they specified for what purposes expenditures would be considered to be capital expenditures on the one hand or revenue expenditures on the other.

I am inclined to think that every now and then taxing statutes, particularly this kind of taxing statute, lends itself to that kind of decision-making by government, so that persons engaged in business when they make the expenditure can decide within very narrow limits as to whether the expenditure will be one which will be treated for this taxing statute’s purpose as a capital improvement -- to use the minister’s term, for renovation -- as distinct from a revenue expenditure. I again referred to this on an earlier occasion. It stated that:

“Where a uniform classification and system of accounts and returns prescribed by the Canadian Transport Commission requires that an expenditure incurred by a taxpayer for repairs, replacement, alteration, or renovation of depreciable property of a prescribed class, shall not be written off as an expense but shall be treated in some other manner.”

Then they provide for practical purposes a schedule and a method by which you determined those things.

I think the people in business in the Province of Ontario, recognizing the importance of the renovation of the existing housing stock -- and I think that is what we are all talking about, I mean that is an acceptable social value at the present time -- lends itself immeasurably well to that kind of care and attention, so that those persons who are engaged in the legitimate business operation of the renovation of the existing housing stock in the city, and particularly in the inner core of the city where the older houses are, should be able to see very clearly which costs, when incurred, will be part of this 20 per cent and which will not, rather than inviting them into the quagmired decision-making process of what is or is not a capital improvement, or a capital expenditure, or a revenue expenditure, and what is included within the term “renovation.”

As I say, in the ecumenical spirit that all of us have brought to this particular bill, I’d ask the minister, perhaps even at this late date, to stand the section down and indicate that he is prepared to make that kind of classification so that people will know. Because you cannot again leave people in the uncertain state, as you are doing throughout so many portions of this bill, and particularly, in my view, in this area.

Hon. Mr. Meen: Mr. Chairman, the hon. member for Riverdale is bringing into the discussion an element which I must say I hadn’t contemplated in the drafting of this legislation; but I don’t think it is an element that is really germane to it.

When he is speaking of revenue expenditures, he is talking, I think, of the case where the landlord has tenants in the premises and he is making repairs -- perhaps to plumbing, perhaps to windows, to doors, to the roof or whatever -- the cost of which he might want to set off against his revenues from the rental recovered.

What we are talking about here is where a renovator purchases a property. He has his acquisition cost determined and then he turns around, puts his tradesmen in and makes fairly extensive repairs, if they are going to be 20 per cent. This is the kind of thing the member for Sandwich-Riverside was talking about too. This is what we are aiming at here in clause (g).

To my mind there aren’t going to be any doubts entertained by the people who are doing the work about money legitimately expended to improve the premises, whether it might be money that would otherwise be allowable as a revenue expenditure if they had tenants in the premises and were expending money in order to keep the premises proper and suitable under the Landlord and Tenant Act, whether it was that kind of expenditure or whether in fact it was an expenditure that had to be charged off over a term of years, as is the requirement under the Income Tax Act in certain instances, as the hon. member for Riverdale says.

I don’t believe there will be any question about how these are to be allowed or how we would treat them if they have worked an improvement on the premises since the time of acquisition and where there is not a question of tenancy in the premises where you have your workmen in. If there aren’t going to be tenants in the premises, then there isn’t any question. If there are tenants in the premises while the purchaser is making these extensive renovations, then I suppose it is possible we could have some difficulty in determining which was an appropriate capital expenditure allowable under this Act and which was something which he did only to keep his tenants happy and a sound roof over their head with doors that close and windows that close against the elements; and which was a proper kind of maintenance expenditure, during possibly an extended period of time in which he was carrying on these renovations, out of which eventually came his resale qualifying for the 20 per cent.

I think we would have to look at cases like that somewhat differently from the case where there is no tenancy involved while the repairs are going on. If that is the case, then I don’t think the hon. member for Riverdale makes the case for difficulty on the part of the renovator in establishing his position; for whatever purposes, whether it be his book-keeper’s purposes, whether it be for the purposes of his financial statement, whether it be for income tax purposes or whether it be ours under this Act. I would think there is no significant difference in the kind of expenditures that would be allowable within a very wide spectrum -- from painting, that would have to be part of it, to significant plumbing, to maybe just a minor roof repair -- it would still be something that in my opinion would class as an expenditure for the purposes of clause (g).

Mr. Chairman: Would the member for Sandwich-Riverside yield to the member for St. George?

Mr. Burr: Yes.

Mrs. M. Campbell (St. George): Mr. Chairman, I have a great deal of difficulty with this section. I suppose my problem goes more to the root of the entire bill and what purpose we’re seeking to achieve. It seemed to me that one of the reasons for looking at this tax was to try to stem the tide in the costs of the provision of housing at a time when we were facing -- and we still are facing -- substantial homelessness in the province.

I look at this section and I think in terms of a place such as Trefann Court, where I am quite certain there would be no difficulty in ascertaining that renovations had in fact been made and that the renovations had been made in substantial work. What is bothering me is that in the urban centres, when hopefully some day we will stem the tide of destruction followed by highrise, you will then have the new speculator, and I would call him that, who moves into the renovation field.

He may not be a speculator in the sense that I originally saw it, but he is certainly more of a speculator than some of the people already caught by some of these dreadful sections. What is happening is that by the very thrust of this kind of a section, what we are doing is precluding those organizations, be they non-profit or otherwise, from being able to function in the city to provide housing for those who need it at costs they have some hope of meeting.

So again the whole purport, the whole philosophy of this, as I see it, is being distorted in favour of those who are going to make their money out of the land, whether it be by renovation or otherwise, at the expense of those who aren’t going to have a place to live.

I recognize the social aspects of the problem are not perhaps inherent in a piece of taxing legislation, but it is part of the whole principle that what we set out to do -- and I repeat something with which I have been in hearty agreement throughout -- has been distorted into a totally different emphasis to the advantage of those who are out to make their profits on land and/or buildings, while those who have been caught in the squeeze, those who cannot provide what they set out to provide because of this kind of competition, are unable to be of any assistance to us. I don’t know how I can approach it to any greater extent than that. I certainly feel that by increasing the amount you are only going to put up the cost; by decreasing it we are only going to really permit profits. In no way has there been any consideration of the implications of this proposed section as it affects the whole question before us, which is the provision of decent housing at prices people can afford to pay.

Hon. Mr. Meen: I don’t know whether the hon. member expects an answer from me with respect to housing. It happens to be my colleague, the Minister of Housing, who has that responsibility; but I gather that --

Mrs. Campbell: I am aware of that; all too sadly aware of it.

Hon. Mr. Meen: But I gather that the member for St. George, though, does recognize there is some difficulty in determining what kind of percentage -- if we are going to tackle and try to stop the “white paint” artists then obviously some figure of significant amount has to be written in. It is my opinion, and that of my advisers that 10 per cent is too little. It may well be that even 20 per cent is too little. That’s the kind of submission that I get from Metropolitan Toronto. On the other hand, from the rest of Ontario the message seems to be that the 20 per cent is a little too high.

What I am saying here is that I have authority to reduce the tax; so I am proposing that I leave this section as it stands and then work up a provision that would meet the kind of situation illustrated so well by the member for Sandwich-Riverside. It could work; and could work just as well, I would think, here in Metropolitan Toronto.

Now the interesting thing is that if we also tailor it at the same time to percentage of expenditure with respect, let’s say, to acquisition price, we might also then increase the 20 per cent at some later date if we find that some scallywags are getting away with something. Because we would then have a formula that could apply to reduce a larger sum based on the length of time held -- and probably in inverse proportion to the length of time held -- and also to the degree of expenditure incurred.

But at this time this section will give the ministry basic authority within which the minister can work to look after the problems I envisage could well be encountered in Sandwich-Riverside, and also perhaps in some areas of Metropolitan Toronto too, where the percentage of 20 per cent might turn out to be unrealistically high.

Mr. Chairman: The member for Sandwich-Riverside.

Mr. Burr: Mr. Chairman, it seems to me that when we are talking about renovators we should realize there are two kinds of renovators. First of all there is the professional speculator who buys a house for $30,000 and does a cosmetic job on it. He makes it look nice; puts on a new aluminum door and some paint. He doesn’t do the work himself; he sends in some men to do it. He spends a couple of thousand dollars and sells the house maybe for $40,000. That’s the kind of person that the minister --

Hon. Mr. Meen: That’s the guy I want to get.

Mr. Burr: Unfortunately, there are some other people. I mentioned them in my example. There are two brothers who make their living out of their own labour. They buy a house and they do some renovating. They put in their own labour and they sell the house again at a very nominal profit margin. This profit does little more than cover their own labour. And this is the kind of person we are trying to protect.

I was just wondering during the course of the discussion whether some exemption should be given to the genuine --

Hon. Mr. Meen: To whom?

Mr. Burr: -- to the genuine renovator; the man who does the work himself and is not in an ivory tower speculative position. I wonder whether that would be possible.

Also, another question of the minister: Has he given further consideration to allowing the renovator’s own labour to count as part of the 20 per cent; or whatever the figure might be? Those are the two points.

Hon. Mr. Meen: Mr. Chairman, I have given some consideration to that and I think it would be possible to work out some allowance. We might have to set a figure where the allowance for labour by the renovator himself doing the work might be equivalent to the expenditure for material that went into the job. In other words, a 100 per cent markup on the actual material; some way like that. I think it may be possible to work this out by regulation. I have given some thought to that.

On the other point, I have already told the hon. member there should be some way in which, in circumstances as he has outlined, the genuine renovator -- except I wish I knew a way to define what constitutes the “genuine renovator” -- should be permitted a profit, even if it does not come up to the 20 per cent of total acquisition cost. That is where I figure a regulation should be able to be tailored within the 20 per cent.

As long as the 20 per cent, or whatever figure we have, is a sufficiently high one within which we can work, then the ministry can have authority to abate tax if certain other qualifications are met; for example demonstrable expenses, which could include an allowance for the renovator’s own labour on the job and then a measure of profit related to the total cost of those.

Mr. Burr: Mr. Chairman, would the minister say then that he is confident that the amateur, do-it-yourself renovator, of the type that I have described, will not be forced out of business?

Hon. Mr. Meen: Yes, Mr. Chairman, it would be my intention to see that sort of person was not put out of business.

Mr. Burr: Thank you.

Mr. Chairman: The member for Riverdale.

Mr. Renwick: I think the principle of what my colleague says is extremely valid and the minister will be able to protect the do-it-yourself man who is involved in this kind of renovation.

I think where the bill is really hung up is on the question of making moral distinctions about who is doing something which is acceptable and who is doing something which is not acceptable. Could I suggest to the minister that we insert by reversion to section 1 the definition of the word “speculator” to mean rascal or scallywag? Then perhaps we could define rascal or scallywag as not to include certain persons, such as non-profit corporations that are engaged in beneficient activity of providing housing for certain people or persons, if they are blood brothers -- we wouldn’t want half-brothers -- who are engaged legitimately with their own hands toiling upon the property and producing the kind of housing accommodation which is required. Do you think that perhaps we could work that out some way, because the minister has referred a couple of times to scallywags? I tend to think that is rather a euphemistic term for rascals, which is a much more historic English word.

Mr. Burr: Scoundrels.

Mr. Renwick: Or scoundrels. We could delineate the term scoundrels as not meaning, for example, the member for Lakeshore. No one would want to call him a scoundrel.

Hon. Mr. Meen: I was going to suggest the definition as being members of the opposition.

Mr. Renwick: I may say, this is the problem. You cannot in a taxing statute make moral judgements about who is at what particular time in his career a scoundrel or a rascal.

Hon. Mr. Meen: Right; or a scallywag.

Mr. Renwick: Or a scallywag. As a matter of fact, there are few of us who are consistently scoundrels or scallywags.

Hon. Mr. Meen: Quite so.

Mr. Renwick: It is just at certain points of time in our careers.

Mr. Lawlor: And not when we are renovating houses, I can tell you that.

Mr. Renwick: Could we stand the matter down and deal with it on that basis?

An hon. member: I have heard of better reasons than that.

Mr. Renwick: I can send out for the longer or shorter Oxford English dictionary and get the magnifying glasses out and see what those terms mean and whether it is possible to give some definition to that.

My colleague, the member for Sandwich-Riverside, is an estimable, honourable man. He is just like Caesar. The fact of the matter is that the minister is saying yes, we will protect this little enclave of honest people. But he won’t define the larger area of sophisticated scoundrels, rascals and scallywags. That is what he is trying to get at. It has the Liberal party hang up. They are always hung up on moral judgements. They have great difficulty in making them.

Mr. H. Worton (Wellington South): Not on scallywags, though.

Mr. Renwick: Oh indeed they have. They wanted to get somebody called the speculator and they voted for the bill on principle because it was against something that was wrong. My colleague from York Centre knows. Was it wrong to develop Thorncliffe Park?

Hon. Mr. Meen: Back to the section.

Mr. Worton: Well, was it a scallywag or a speculator?

Mr. Renwick: I don’t know.

Mr. Chairman: Order please. I think we are spending too much time on the amendment.

Mr. Renwick: It was speculative and it was profit-making, but it provided an immense amount of public accommodation.

Mr. Chairman: Does the member wish to discuss the amendment further?

Mr. D. M. Deacon (York Centre): Not very much profit-making.

Mr. Renwick: Oh we always knew that. There is never any profit. There is always a lot of hard work and no profit. We all understand that. But people made their living for years in developing Thorncliffe Park.

Mr. Chairman: Order please.

Mr. Renwick: I am asking my colleague the member for York Centre, was that a speculative profit scheme?

Mr. Chairman: Order please; we are off the topic we should be discussing.

Mr. Deacon: That was a long-term gain.

Mr. Chairman: Does the member for Riverdale wish to come back to this section?

Mr. Renwick: Oh yes. Thank you, Mr. Chairman, for drawing it to my attention.

How are you going to deal with the problem of who is the good guy and who is the bad guy? It is not a grade B western movie we’re dealing with, it’s a taxing statute.

Mr. Deacon: Mr. Chairman, it all gets back to the same problem, in our view. The reason we supported the bill is, as the member for Riverdale said, we are against what you call churning, a short-term movement of properties; and this is why we feel that all these other clauses you have are really missing the point and frustrating the situation.

An hon. member: Take out everything but the first clause.

Mr. Deacon: We have a problem here, just in this one clause. I think of those houses south of Queen St., west of Bathurst, that were repaired by the people in that community at a cost of $300 to $400 a house, houses that were considered unfit to live in by the building inspectors before they went to work on them. That was $300 to $400 a house that they spent, in cash. It would be very hard to work it up to the 20 per cent figure, even taking in the value of the contributed labour. But they did improve those houses and put them in fine shape.

Surely we are not trying to force upon people major improvements far beyond that which they require? Yet this is, in effect, what this clause does. It worries me that the minister is trying to attack the problem of speculation by the value-added approach. I really feel the minister is making a great mistake in not saying; “We’ll put aside all other things and recognize we are trying to get rid of churning and will tax heavily on short-term trades.”

The member for Riverdale mentioned Thorncliffe Park. That stock was in for about 12 years. It went from the issue price of $5.50 to around $8 after 12 years. That was what I’d call long-term development and I don’t think it would be subject to tax under this situation.

Mr. Chairman: The member for Lakeshore.

Mr. Lawlor: Mr. Chairman, in continuity with my colleague’s statements as to the distinction between expenditures or expenses and capital improvements, I think the minister will agree, as we did when we sat as colleagues on the Smith committee, one of our chief concerns from that time has been with the federal government -- since that date, as a matter of fact, we’ve brought in innumerable items of taxing legislation precisely to bring congruence between the federal scheme and the provincial. The minister -- I suppose he bows his head to the storm at this particular stage -- recognizes, I’m sure, that what he is suggesting here today is a grave and complete traducing or departure from those principles that were laid down at that time and what has been our intent, to try and keep in some form of relationship and congruence.

If he’s going to call a capital benefit what is really an expense, and vice versa, and he’s going to designate that within a very subjective intent and within the narrow discretions of his ministry, by regulation or otherwise, he is running directly counter to the whole scheme of taxation as we’ve envisaged it in an overall way in the province.

He may argue that in considering a land speculation tax it’s going to have to have its own proper designations. But really, aren’t you introducing a complexification that begins to boggle the mind? Won’t they have to set up two diverse sets of principles as to what is a capital accretion and what isn’t?

And won’t there be total confusion in the ranks? Think of the amounts of money that will have to be expended to accountants to know these diverse concepts, working in antinomy as between the two levels of government and between your own concepts of capital gains taxation on the one side -- in your own legislation -- and this peculiar piece of legislation hanging out here which has its own principles and in which everything you said was a rose turns into a thorn or vice versa.

Truly the minister is a pioneer. There are two types of pioneers, Mr. Chairman, and I think this afternoon the minister gleams like a conquistador. There is the guy, “stout Cortes,” whom you would like to be, surveying the Pacific. You have really reached a kind of elevated piece of land from where you can see at least 2 1/2 miles out to sea. But the other guy, you never hear much about him, his name was Miguel; he fell down a hole in the Andes and nobody ever heard of him again. You must take into account Miguel, along with the other fellow.

In a section of this kind you are building in all kinds of ambiguities, all kinds of twisted definitions and designations which don’t fall in place, which are directly counter to what has been achieved in good accounting principles over a long period.

It takes 50 years to come to any sort of working definition of what a capital improvement would be on property; and with a wave of the wand out it goes. You say that is going to be considered of that nature as far as we are concerned because we have to do so if we are going to give any relief and keep Sandwich-Riverside’s small contractor in business. It is an enormous price you are paying in terms of the jurisprudence of taxation in order to achieve your results.

I can only point this out. I think any indication of what you intend to do at this stage in order to rectify the thing after the event is not really going to solve the difficulties I am talking about.

Mr. Chairman: Ready for the question?

The member for Riverdale.

Mr. Renwick: Thank you, Mr. Chairman. The only reason I stood up was because of my colleague’s usual adroit remarks of being a pioneer, and it reminded me of that other phrase -- some are born pioneers and others have pioneership forced upon them. I am inclined to think the minister is in the latter class. He is not quite sure what it is about and I think his friends under the gallery don’t know either.

Hon. Mr. Meen: Back to the section.

Mr. Renwick: Back to the section?

Mr. Lawlor: He’s an explorer without a map.

Mr. Renwick: Yes, he really is. If I could coin a phrase, “unchartered seas”. Could I make a prophecy, too?

Mr. Lawlor: Have you ever heard about the subjunctive?

Mr. Renwick: The Act will be repealed within a year.

Hon. Mr. Meen: You said that.

Mr. Chairman: Ready for the question?

Mr. V. M. Singer (Downsview): No.

Mr. Chairman: The member for Downsview.

Mr. Singer: I am sorry I wasn’t here a little earlier, Mr. Chairman. I understand we are on clause (g), the 20 per cent?

Mr. Renwick: It has been amended to 10 per cent.

Mr. Singer: Has it been amended? By whom? By your colleagues?

Mr. Renwick: We haven’t passed it yet.

Mr. Singer: That’s an amendment moved by the member from Windsor?

Mr. Renwick: The member for Sandwich-Riverside.

Mr. Singer: Yes, the member for Sandwich-Riverside. I think I can support that without too much difficulty, Mr. Chairman, and I wonder, really, whether the minister gets any messages. Is he aware there was a meeting convened by the Canadian Bar Association with about 1,500 lawyers in attendance yesterday? They all paid $25 or $40, I think, and they spent six or seven frustrating hours trying to understand what was going on in the Act.

Mr. Renwick: If you see them up in arms; boy you are in trouble.

Mr. Singer: A gentleman named Mr. Stephenson apparently came on your behalf and admitted the Act had certain shortcomings. He admitted he was unable really to tell them what was going to happen or how things were going to work; and that maybe there had to be more changes and maybe he didn’t understand the meaning of some of the words. I wonder how many messages the minister has to have in order to take back this Act, put it on the drawing board again and have a real look at it. The section we are talking about now, this 20 per cent -- and I am sure the point has been made earlier; I regret I wasn’t here, but I was otherwise engaged on some very serious business --

Mr. Renwick: I am sure it was dealing with the other part of the executive branch of the government.

Mr. Singer: On this 20 per cent business, undoubtedly representations have been made to the ministry as they have been made to me and many members of the House, about the problem of arbitrarily picking a 20 per cent figure. There are persons engaged in the business of acquiring old and rundown houses, refurbishing them by painting and plastering and perhaps putting in some new plumbing and that sort of thing, and putting --

Mr. Renwick: Usually I would object that this was repetitious, but I won’t.

Mr. Singer: Oh, thank you -- and putting these buildings back on the market for sale. Now if you are going to make sure they have to put in 20 per cent over and above the cost of the buildings to them, then, Mr. Chairman, what’s going to happen is they are going to look at their cost figures and say: “Oh, gosh, I guess we didn’t do enough. We are going to have to put in some air conditioning. We are going to have to have wall-to-wall and ceiling-to-ceiling broadloom. We are going to have to rip out everything that is inside and replace it until we get up to this magic figure of 20 per cent; and then having done all of that we are going to have to charge more.”

What are you doing to help the housing crisis?

Mr. Deacon: How are we getting cheaper housing that way?

Mr. Singer: You are hindering; you are really throwing up another roadblock. Do you really know what you have done with this statute? All over the Province of Ontario people are afraid to deal with land or buildings or anything else because they don’t know what this silly statute means, they don’t know whether it’s going to be deductible as a business expense -- we are going to come to that one again later; I am sure the minister has seen my notice of motion.

Mr. Lawlor: No, no; we have been over that very thoroughly.

Mr. Singer: But surely, Mr. Chairman, when so many people who are knowledgeable about the business -- lawyers, accountants and others -- bring forward this voice of protest, something must appeal to the minister. Maybe he has made a mistake. Maybe he should rise in his place as I heard on the radio his colleague the Minister of Transportation and Communications (Mr. Rhodes) did this afternoon, and say: “Dial-a-bus was a big failure and we wasted umpteen million dollars of the public’s money and we are going to quit.”

Why don’t you do that here? Take it back, say you’re sorry, you made a mistake, you tried -- not very well, but you tried -- and bring us back an Act the people of Ontario can live with, that isn’t just going to stop business dead, that isn’t going to increase the price of renovating a home. I can’t think of anything more sensible at this time to correct this bad section than to vote for the amendment put forward by the member for Sandwich-Riverside.

Mr. Chairman: Are you ready for the question?

The hon. member for Peterborough.

Mr. J. M. Turner (Peterborough): Mr. Chairman, I would like, if I may, to have some assurance from the minister. We have heard of contractors, we have heard of amateur do-it-yourselfers and so on, but what happens in the case of a couple, or even a single person -- but let’s presume a young couple have bought a house and they decide to do the renovation work themselves insofar as it is possible. In that specific case, can they include the cost of their labour towards the renovation?

Hon. Mr. Meen: Mr. Chairman, I take it my colleague was not in the House when I directed my comments along that line. I have indicated that we are looking at that.

If he is talking about the young couple who buy a house which becomes their residence, and the young couple move in and do their own renovations, then there is no tax money. I think what he is talking about then is someone who is renovating a house --

Mr. Turner: That’s right.

Hon. Mr. Meen: -- he is living somewhere else, and it’s not become his residence. He is doing it, or his wife and kids are helping him with the renovation.

Mr. Renwick: Is it important whether they are young or not?

Hon. Mr. Meen: Then I am saying that it would be possible to build into the allowances, by regulation, a factor relative to one’s own labour, possibly related in turn to the capital expenditures for material put into the work. This is a factor that is used in other statutes, I am advised, and it is one way we could do it, but that is the kind of thing that we are looking at at the present time.

Mr. Turner: Mr. Chairman, just to pursue that, I was in the House and I did hear the answer. One thing that rather concerned me, and I am sure the minister just picked a figure from the air, but I would caution him and draw to his attention that, in the case of a renovation job as against a straight new construction job, normally the labour cost is much higher than the material cost. I would just like to draw that to his attention if I may.

Mr. Chairman: The hon. member for Lakeshore.

Mr. Lawlor: I have a technical question, I suppose, which has to do with this section. On renovation, the figure has to reach 20 per cent after April 9, of the cost to him of his acquisition of the designated land. Then down below in that same clause it says if the fair market value should be higher than the cost of acquisition. Has the minister a definition of what the cost of acquisition in this context means? What does it cover?

Hon. Mr. Meen: If the hon. member would look back, he will see that it was defined at the beginning; and the adjusted value. We have that in the earlier definitions which the hon. member may not have noted. What we are saying is the cost of acquisition if after April 9. If he happened to own it on April 9, then it is its fair market value on that date.

Mr. Lawlor: I don’t agree as to your business of what the cost of acquisition means in your previous clauses under appraised value, fair market value or any other sort of thing. The brochure the minister has issued to the general public does include within the cost of acquisition, for instance, the land transfer tax that would have had to be paid at the time of acquisition. I would like to know whether it includes legal fees that you have to pay at the time; and does it also include real estate fees? What does it include?

Hon. Mr. Meen: The cost of acquisition ordinarily would include real estate fees, if the hon. member will assume that the purchaser winds up paying the real estate commission, which is payable legally by the vendor but buried in his sale price.

Mr. Lawlor: Right.

Hon. Mr. Meen: It would also include his legal expenses, I would expect, on acquisition of the property.

Mr. Lawlor: Again, is the minister prepared to publish regulations that are going to say that a real estate fee, for instance, that is legally paid by the vendor is somehow or other buried in the sale price and therefore a legitimate cost to the purchaser?

Hon. Mr. Meen: No, Mr. Chairman. The real estate fee payable by a vendor, I think one would expect philosophically, is absorbed in his sale price. Eventually then in that transitional sense it is payable by the purchaser; but in fact it is, generally speaking, an obligation of the vendor.

If it were worked the other way, the dollars would be the same. The vendor would recover that much less on his sale if he agreed with the purchaser that the purchaser would pay the agent’s commission on that particular transaction.

Mr. Lawlor: Yes, that would have to be agreed in writing as a separate matter, wouldn’t it?

I would refer the minister to the highlights of the 1974 budget statement, page 8, where calculations are made as to what the impact of this tax would be.

Mr. Singer: That is the third previous version.

Mr. Lawlor: I do tend to get behind on these things. Maybe later tonight well have the fourth version.

Mr. Singer: The fifth one, why not?

Mr. Lawlor: I’m not going to spend time belabouring the minister on this particular one. Your regulations will contain a detailed summary or detailed statement of all those matters that would go in to define what that elusive term really means, I take it. Is that so?

Hon. Mr. Meen: If there’s any term that requires further elaboration, Mr. Chairman, it would be included in the regulations.

Mr. Chairman: Are you ready for the question? The hon. member for Downsview.

Mr. Singer: I have a number of questions for the minister. It had been suggested to me that the minister, or some of his officials, had been discussing it with some of the persons knowledgeable within this particular industry, and that suggested compromise either had come forward from the ministry or had been put forward to the ministry and it was going to be thought about. It ran something along the line that where the improvements were less than 20 per cent the calculation could be made as to the amount of the improvement and the tax would abate accordingly, or be adjusted accordingly. Can the minister enlighten me on that before we get to a vote?

Hon. Mr. Meen: Mr. Chairman, the hon. member could take a look in Hansard, if he likes. I enlightened the hon. members earlier this afternoon.

Mr. Singer: Could the minister elaborate on that again? I apologize for not being here, I can’t hang on his every word.

Hon. Mr. Meen: Yes, I realize that. I will try to be brief though.

We are looking at the 20 per cent figure as probably a top limit. We don’t want the so-called renovator to be able to simply go in and slap a coat of paint over everything, or to sandblast the front and slick up the place without making significant improvements. So we figure that a 20 per cent figure is not too low -- except certainly in Metro where we are told that it may be too low; but to the rest of the province it may be a little on the high side, as indicated by the member for Sandwich-Riverdale.

Therefore I have said to him that rather than adopt a ten per cent figure which was the subject of his amendment -- and which would be in the opinion of my advisers and the people who have an opportunity to look at the general picture here in Metropolitan Toronto a figure much too low, and would be playing into the hands of those who simply do want to go in and make a minimal amount of improvement on some premises and then put the property back on the market at a substantial profit -- we would, within the latitude accorded by the Act of 20 per cent and the authority to abate the tax below that figure, then allow for the person such as described by the member for Sandwich-Riverside. His expenditures including some allowance for his own labour, would then form a base upon which a measure of increase could be allowed without tax. Beyond that the tax might well be exigible at the normal 50 per cent rate.

We also are looking at the question of the length of time within which a property would be held. So there are a number of factors that enter into it which do not render themselves at this time susceptible to reduction to statute. I am just saying that we should leave clause (g) as it stands with the refinements to be worked out by way of regulation just as quickly as we can.

Mr. Singer: Well I thank the minister for explaining it again, although I find the minister’s explanation totally unsatisfactory.

I don’t see how the minister can possibly readjust a positive statement in a taxing statute by promising he will consider it and perhaps change what he has written by regulation. I think it is absolutely the anathema of the legal principles behind taxing statutes. If the minister is so badly prepared he can’t come before us with a taxing statute that means what it says and he tries to slough off the weaknesses by saying: “Don’t worry, we have the problem in mind and we’ll fix it up by regulation;” then I say that all the minister is asking for is complete dictatorial powers.

Why didn’t he just come in with a statute and say: “We will levy whatever tax against speculators we think is proper and we’ll tell you in regulation from time to time what it will be and against whom it will be levied”? It would have made it much simpler, it would have saved a lot of time of the House. We have had only one vote and it might not have been too constitutional, as this probably isn’t, but it would have saved us all an awful lot of time.

The minister has begun to think about some of these problems, but unless and until he can reflect them in legislation, certainly he can’t look to us for support.

Mr. Chairman: The hon. member for Riverdale.

Mr. Renwick: May I just ask, Mr. Chairman, what the Professional House Renovators’ Association asked the minister to do about this section of the Act?

Hon. Mr. Meen: As I mentioned, I was aware that a submission had come in; I have not studied it. My staff have been looking at it. I do not know the result of their assessment of the submission. My general impression gained from what I have heard is that they basically support what we are doing. Now they may have some recommendations to make along that line, but I can’t say.

Mr. Chairman: Are you ready for the questions?

The committee divided on Mrs. Campbell’s motion that clause (e) of section 4 be amended by adding after the word “dependants” in the fourth line thereof, “or by a person resident in a hospital, a nursing home, a senior citizens’ residence or any other institution under the Charitable Institutions Act”, which was negatived on the following vote:

Clerk of the House: Mr. Chairman, the “ayes” are 26, the “nays” 44.

Mr. Chairman: I declare the motion lost and clause (e) of section 4 carried.

Mr. Breithaupt: Mr. Chairman, do you think we can take the same vote on this next one?

Mr. Chairman: Shall we take the same vote? Agreed?

Mr. Singer: It doesn’t really matter.

The committee divided on Mr. Burr’s motion that section 4(g)(ii) be amended in the third line thereof by changing “20 per cent” to “10 per cent”, which was negatived on the following vote:

Clerk of the House: Mr. Chairman, the “ayes” are 26; the “nays” are 44.

Mr. Chairman: I declare the motion lost and section 4(g) carried.

Mr. Singer: Don’t worry, it will all be taken up in the regulations.

Mr. Chairman: Now we’ll deal with section 4(h), and we’ll also revert back to section 1, subsection (1)(a) and (b), and then section 1(e) and (f) and section 4(h). We’ll deal with them all together this time. Is that agreeable?

Mr. Breithaupt: Yes, Mr. Chairman. We could perhaps have some guidance from the minister as to just how he wishes to deal with this entire package. Of course, as you know, Mr. Chairman, it deals with the various farming matters that are raised in the Act, the first dealing with the 10 per cent situation, and then the other two dealing with the definitions of farming and farming corporations. It’s in section 4(h) that I think many of the members have comments to make concerning, particularly, the applicability of this matter of farming land being designated. If the minister could give us some guidance as to how he wants to deal with the farming matters, if perhaps, we can call them this, we would then know how to proceed.

Mr. Chairman: For the benefit of the members, just before the minister rises, the sections that we are dealing with are on pages 3, 5, 6, 8 and 13.

Mr. Singer: Shouldn’t we go back and have a look at the title again?

Mr. Chairman: I thought the chairman was doing this as a favour for the member for Downsview. I understood --

Hon. Mr. Meen: No, I think the member for Kitchener --

Mr. Chairman: I am sorry, Mr. Minister.

Hon. Mr. Meen: -- was asking for my thoughts on this, Mr. Chairman.

Mr. Singer: I’m interested in this section, too.

Hon. Mr. Meen: Frankly, I’m easy. It seems to me we could discuss 4, sub (h) --

Mr. Lawlor: You are not easy, just plain loose.

Hon. Mr. Meen: -- and to the extent the members may wish to refer back to section 1, subsection (1) clauses (e) and (f); and section 1, subsection (1) clause (a) and subsection (v). It seems to me they might be free to do that, though I think the major part of the thrust of this debate surrounds section 4(h) itself.

And, then, when we have concluded that debate, I would think that your vote would be on all of those as a package, inasmuch as we have -- I was going to say, I am advised by the Leader of the Opposition that he may propose an amendment to section 4(h), and so the vote would be on section 4(h).

Mr. R. F. Nixon: The member for Huron-Bruce.

Hon. Mr. Meen: I am advised that it’s the member for Huron-Bruce -- that we would take the vote on that. The other sections were discussed at some length, so I would expect that the hon. members would limit their comments on those sections, since our major debate really will hinge around section 4(h).

Mr. M. Gaunt (Huron-Bruce): Mr. Chairman, I have an amendment for section 4(h). It affects section 1, subsection (1), clause (a)(v) and clauses (e) and (f). Nonetheless, I will deal with this particular section. And I think, Mr. Chairman, I’ll put the amendment now, with your concurrence, and talk to the amendment during the next few minutes, if that meets with your approval?

Mr. Chairman: Okay, that will be fine.

Mr. Gaunt moves that subsection (h) of section 4 be amended by adding after the word “transferor” in the second line, “in farming, and has been so used by the transferor for a period of 10 consecutive years prior to the disposition,” and by striking out all the following words in the subsection. So the subsection shall now read:

“When the designated land disposed of is, at the time of the disposition, used by the transferor in farming, and has been so used by the transferor for a period of 10 consecutive years prior to the disposition.”

Mr. Gaunt: I think the main problem, Mr. Chairman, in this particular section having to do with farming is the fact that we haven’t distinguished the matter of the difference between an investor and a speculator, and our contention is that a farmer is an investor and not a speculator. The entire amendment is premised on the fact that a farmer invests in his land, he invests in his buildings, and he does not do so for the purpose of speculation. He does so for the purpose of making a living.

The intent of the amendment really is twofold in nature. There are two aspects of it, the first dealing with the matter of farm sales from farmer to farmer, and it drops this business of distinguishing between sales to members of the family and sales to other farmers outside the family. Quite frankly, I think it is a piece of nonsense to distinguish between sales to members of the family and sales to other farmers. I see no point or rationale in that at all. In both cases the purchaser is going to be farming and so it is the end use that’s important here.

The other matter has to do with the sale of the land when it is being removed from farming, and according to my amendment this would remove that land from the application of the tax if the land has been farmed continuously for 10 consecutive years by the transferor. In this way we are saying that in no way is the farmer who has farmed that land for 10 consecutive years a speculator; he is not trading, he is not churning, as my friend from York North (Mr. W. Hodgson) mentioned. He is obviously there with the intention of farming that land and should not be subject to the application of this particular Act.

I might just read a letter I received from a gentleman whom I have known for a number of years. He is not a constituent of mine but he does make the point here that as far as he is concerned this particular Act, as it applies to farmers, is not very appropriate or not very just, particularly as it applies to his case.

Mr. Chairman: Order please.

Mr. J. Riddell (Huron): Let’s cut out the tea party.

An hon. member: They are laughing at the farmers.

Mr. Singer: They are not interested in farming. Let the record show it.

Mr. Gaunt: I will just put on the record some of the comments that are made in this letter. The letter is dated May 16:

“I am writing you about a problem that is to be forced on a large group of farmers in the near future. The problem is Mr. White’s new speculator legislation.”

Actually it is Mr. Meen’s speculator legislation but it was mentioned by the Treasurer in his budget and so I imagine that’s why that impression is conveyed.

Mr. P. G. Givens (York-Forest Hill): It’s an illegitimate child between the two of you.

Mr. Gaunt: The letter goes on:

“As you know, I have a farm on the edge of London. I have farmed this farm for 22 years. I have spent close to $60,000 on this property in improvements, one way and another, fences, buildings, etc. I did not ask the city to move toward me. It would appear to me that I made a mistake. I spent this money to produce food, chickens and cattle. I have been offered a high price for this property by farm standards, but I want to continue farming it for some time. Now Mr. White says that I must pay 50 percent over farm value as a speculator.

“Are all farmers to be treated as speculators when in reality they are not? Mr. White has kindly exempted a transfer of property within the family from the tax. What son could afford to buy his father’s property near a city and continue to farm it?

“It appears to me that Mr. White would like to treat the family farmer who has worked so many years like a speculator. There is only one difference. The farmer has worked to pay for his farm for years. The speculator has probably paid a minimum down payment, say $5,000 on a $250,000 property, held it for a year and sold it for $500,000. Some speculators that have done this very thing have offered to buy my farm. Can you see any reason why the two should come under the same law?”

Mr. Givens: How does the Minister of Agriculture and Food answer that? How does he answer a letter like that?

Mr. Singer: Is the Minister of Agriculture and Food going to vote with his party on it?

Mr. Givens: How would you answer that letter?

Hon. W. A. Stewart (Minister of Agriculture and Food): He’s exempted.

Mr. Gaunt: No, he is not exempted.

Hon. Mr. Stewart: As of the value of April 9.

Mr. Gaunt: Yes, but if he sells it --

Hon. Mr. Stewart: And he can add on 10 per cent a year and another 10 per cent on top of that and he has the maintenance costs to add to it.

Mr. Gaunt: But the point is that if he values that property at -- well, let’s just use the figures given in the letter. There’s no need for accuracy; I don’t know whether his property is worth $250,000 as of April 9 or not, but let’s say it is for the purposes of argument in dealing with the comment made by my friend across the way.

Let’s say that his property as of April 9 is worth $250,000. A year from now, because of the development pressures brought about by the advancement of the city of London, he is offered by some speculator $500,000. There is no possible way that he is exempted under the Act, given those figures.

Hon. Mr. Stewart: That’s right.

Mr. Gaunt: He is exempted up to 10 per cent per year, but under the conditions of the Act, he would have to pay the tax and yet he has farmed that land.

Mr. Givens: With inflation at 12 to 14 per cent what are you doing for the guy?

Hon. Mr. Stewart: With that 12 to 14 per cent he is more than covered.

Interjections by hon. members.

Hon. Mr. Stewart: Yes he is. He has got 10 per cent right in the bill and he has got another 10 per cent in maintenance costs. That’s 20 per cent right there.

Mr. Gaunt: The conditions that I have described --

Interjection by an hon. member.

Hon. Mr. Stewart: That doesn’t matter. He is just a farmer. I am not saying he’s speculating.

Mr. Chairman: Order, please. I wonder could we have the member from Huron-Bruce finish and then if anybody wants to get in the argument, we’ll give everybody an equal opportunity.

Mr. Gaunt: The point that I am making is that given those figures, this farmer would not be covered with the exception of the 10 per cent plus the maintenance costs, which wouldn’t take him out from under the provisions of this Act according to the figures I have cited and yet he has farmed that land for 22 years.

Under no conditions is that farmer a speculator. He is not a speculator. He never intended to speculate and yet he’s the victim of circumstance if you like. He’s the victim of the encroachment of the city of London.

Hon. Mr. Meen: He is the beneficiary of the city of London to the extent of $250,000.

Mr. Givens: He shouldn’t come under this bill at all.

Mr. Gaunt: It depends on how you want to look at it. He’s going to benefit financially, no question about it. But he wants to farm.

Hon. Mr. Meen: Then he can carry on farming.

Mr. Gaunt: He can carry on farming to the point where land values are such that he can’t afford to carry on farming. That happens all the time. That’s why he should be exempt, in my view, when he has owned or farmed that land for more than 10 years. He should be exempt from this tax for the first sale. That is really what we are saying under the terms of this amendment.

I would commend the amendment to all members of the House and I hope the minister will see the point that is brought forward here.

Mr. R. F. Nixon: Mr. Chairman, I was interested in the interjections of the Minister of Agriculture and Food in connection with the amendment put forward by the member for Huron-Bruce. He is attempting to defend a situation which must cause him and some of his friends in the Conservative party serious embarrassment.

In fact, you are saying, by including the bona fide farmer in the provisions of this Act, that he is a speculator. You are saying that if he is prepared to sell his property for more than what the Minister of Agriculture and Food might feel is a proper increase in value -- 10 per cent a year plus the additional costs of his maintenance fees, including taxes -- then he deserves to pay the tax. If he believes that way he should vote against the amendment and the chances are that he may, in fact, vote against the amendment.

The point we have made in this connection, in the sections that were previously stood down, is, No. 1, the definition of farming is very weak. In the bill at present, if you have property and have two bees on it -- and they may even be of the same sex for all that matters --

Hon. Mr. Meen: You are going to have two more bees.

Mr. R. F. Nixon: -- you are a farmer under the provisions of this bill. In other words, any kind of a well-to-do person from the city can go north of London, buy a large property, put a couple of bees or even a couple of Anguses on the property and be designated a farmer under those circumstances.

To begin with, we have been critical and so has, for example, the hon. member for York North been critical of the definition of farming in this bill. It is unconscionably weak.

To define a farmer is tough, but one of the toughest ways to do it, I say to the Minister of Agriculture and Food, is to say that you are a farmer if you make most of your money off the land. I know he is a beef farmer and he might not be excluded, but it would mean that you would have to be a bona fide farmer out on the land, working at the provision of food products in order to qualify under the amendment that we propose.

We are also prepared to recognize that farmers for a quarter of a century and longer have been on the economic short end of what’s happening in this province and in this nation. It has been only in the last few months that the farmers have been treated to an increase, at least in their gross income. And this is with all the problems they must face, with the uncontrolled increases of the inputs that they must purchase and apply to the land by way of products and services in order to produce the products at the elevated prices that they are now receiving.

The Minister of Agriculture and Food knows as well as I do that that is extremely selective, too. If you happen to be a hog farmer, the elevated prices you are receiving mean that for every hog you sell this week you are probably losing between $8 and $15 per carcass.

We are trying to recognize in this bill that the provisions put forward by the minister wherein the value of the property can increase by 10 per cent a year beginning with the April 8 cutoff has nothing to do with what the farmer should have access to by way of the appreciation of his property. If London growth north and goes out into some of those farming areas of Middlesex, and if the person is a bona fide farmer under the provisions that we have tried to put forward, why shouldn’t he be in receipt of those large incomes from the sale or the property which have been accruing to other people, not bona fide farmers, for so long?

The amendment put forward by the member for Huron-Bruce is very clear. It exempts bona fide farmers and if they sell the property for $1 million, they are still exempt.

Mr. Givens: That’s right.

Mr. R. F. Nixon: We do not consider the people who are farmers as speculators and we regret very much that so far the Minister of Revenue has not seen our point of view. Neither has the Minister of Agriculture and Food, although he may give it some further consideration.

Let me tell you, Mr. Chairman, it is not enough to say we are giving the farmers some sort of a special gift of a 10 per cent increment, year by year, based on the value at April 8, 1974, plus an additional value of the cost of maintaining the land. The bill still designates the farmer as a speculator and in that it is wrong -- it is morally wrong -- and I would trust, Mr. Chairman, that you and the people in this House who think as we do in this regard are prepared to support the amendment.

If you don’t like the provisions of our amendment for God’s sake give us an amendment of your own which we can consider because we do not believe the bill should go forward with the provisions it presently contains. It’s an abomination. If the Minister of Agriculture and Food says it does not designate farmers as speculators he is wrong because part of the title of the bill -- and we have been messing around with even the bill’s title -- is An Act to impose a Tax on Land in respect of Certain speculative Transactions. With an amendment which would exclude the farmers we would do what is right for that industry and for those individuals.

I simply say in closing that we do not want to do a favour for somebody who is designated as a farmer under this bill; that is, by keeping a couple of cows, a couple of bees -- or growing some sort of an apple crop on four or five trees. That doesn’t designate a farmer -- that is an amendment which really ought to be dealt with at the same time. It’s not an easy amendment but it’s one to which surely the mind of man, the mind of the Minister of Agriculture and Food, should set itself. We earnestly call for the support of you, Mr. Chairman, and the other members of the House for this eminently reasonable amendment put forward by my colleague from Huron-Bruce.

Mr. Chairman: The member for Downsview.

Mr. Singer: Mr. Chairman, I am not anxious to repeat what the member for Huron-Bruce has said, what my leader has said, what the member for Sarnia (Mr. Bullbrook) said earlier or what I tried to put forward at the commencement of the second reading debate in connection with this bill. But there are a couple of points which, perhaps, bear some additional emphasis.

No. 1 is there is a federal capital gains tax and a farmer who sells his farm at a substantial profit, as a capital gain, is taxable and he has to account to the government of Canada for that. Surely, that has to be borne in mind?

The second point I want to draw to the minister’s attention is, since we now have back in the Act -- we had it out for a few weeks -- the exemption relating to expropriated land, to think for a moment what happens to a farmer who is within the expropriated land limit and what happens to his neighbour immediately outside. The government of Ontario decides it is going to build another North Pickering. I tried to make this point in second reading but perhaps it didn’t get through so it bears some repetition --

Mr. Givens: Nothing gets through.

Mr. Singer: The government of Ontario decides it’s going to create another North Pickering and it expropriates a large acreage of land. Somewhere along the way it draws a line and says everything south of the line will be expropriated and everything north of the line will not be expropriated.

The farmer to the south of the line is going to get the current market value at the time the Expropriations Act is completed; the farmer to the north of the line is not going to get it. The farmer to the north of the line is going to have to pay this 50 per cent tax in addition to his capital gains tax but his neighbour, beside whom he has been farming for 10 years, 20 years, 50 years, is going to be exempted from it. Does that make any sense, Mr. Chairman?

Mr. Givens: None at all.

Mr. Singer: Surely the Minister of Agriculture should understand that? The Minister of Agriculture has been here when his colleague, the provincial Treasurer, has told us about the sad tales of the White family who happen to have a farm outside the city of London which was just beyond the line. Had the White family farm or the White ancestors only been fortunate enough to have bought something on the other side of the service line, all of the Whites for the next 50 generations would have been multi-millionaires. The Treasurer has complained violently about how unfair that has been.

Mr. Breithaupt: And he is a White.

Mr. Singer: Yes, and he’s a White. How could it happen to him? I wonder if he has bothered to read through this Act and recognizes that once again government is picking on the White family and they may never be millionaires, any of them, now or forever more. That alone should move the minister to take some kind of action. Much more seriously, Mr. Chairman, if this section is enacted in the way it appears in the revised version of the Act, a great inequity is being done to a very important segment of the Ontario community. It’s unfair; it’s unreasonable. Therefore I would suggest that the minister, if he is not able to accept the amendment put forward by my colleague from Huron-Bruce, withdraw once again the section and figure out how he is going to look after the farmer. Because if there’s any one thing that apparently rides high in the Tory escutcheon is, “We love the farmers and the farmers love us.” Well, you are ending the love affair, and maybe we would have been smarter to let you enact this horrible statute into law and antagonize all of the various segments of the population of Ontario and let you try to live with it in the years to come.

We are trying to help you. We are trying to help you and help the people of Ontario, but surely, Mr. Chairman, there is no way in which this iniquitous subsection should become a part of the law of the Province of Ontario in the form in which it is now before us.

Mr. Chairman: The member for Riverdale.

Mr. Renwick: Mr. Chairman, after the moral indignation of my friends on the right on the question of who is or who is not a speculator, I would like to sort of return to the details of the tax bill as it is before us and propose an amendment which I believe is in line with the policies which the New Democratic Party would like to see carried out. I personally accept, and I think our party accepts, the proposition that the definition of adjusted value including the clause with respect to the 10 per cent compounded annually additional amount which could be added in determining the adjusted value is quite adequate for the purpose of providing the value which will be deducted from the proceeds of sale and will determine ultimately the amount to which the tax is to be paid. Therefore we, in this part would oppose the amendment proposed by the member for Huron-Bruce.

Mr. Singer: Good, good.

Mr. Renwick: We always like to draw the lines very clearly.

Mr. Singer: Yes, yes.

Mr. Renwick: The grandstand play for the wealthy farmers in the Province or Ontario who may make a million is not a line that we in this party have been particularly interested in.

Mr. R. F. Ruston (Essex-Kent): You don’t want a speculator tax anyway.

Mr. Renwick: We are interested in, and our remarks have been directed towards the question of the stabilization of land cost in the Province of Ontario, land prices in the Province of Ontario and the maintenance in the Province of Ontario of land which is in agriculture.

I want to come to what I believe is the fallacy which the minister has fallen into in the way in which the bill was drafted in its initial instance. Last year when we amended the Ontario Succession Duty Act, we passed certain definitions which were designed to relieve from the burden of succession duties farms which were kept in the same family from one generation to another, either by the device of a farming corporation or by transfer to particular members of the family, and that’s where the definitions came from. Of course, in the hurry to draft this particular bill and the ministry, operating as it always does in its watertight compartments, was unaware of the fact that the definition of farming, as has been stated before, was quite inadequate.

I think that in itself is a first and fundamental point to which I would like the minister to direct his attention before I come to the amendment which I will propose to the amendment introduced by the member for Huron-Bruce. I would like the minister to tell me why it is not possible at this point in time to use the much more adequate definition of farming and farm which is included in the farm classification advisory committee report. It is obviously a definition which has had care and attention by those who are engaged in farming as distinct from the definition which was made by those who were concerned with something called the Ontario Succession Duty Act and is therefore a definition, as we passed it a year ago, inadequate for the purposes of this particular bill.

The second matter which is of concern to me is the failure anywhere in the bill to determine, when there is a combination of farming and some other activity being carried on, which is the chief source of income. The guidance is usual because this problem arose in the Income Tax Act. I again refer the minister to the provisions on page 48 of Gilmour, which in chapter 7 refers to the problem of determining whether the chief source of income is farming or a combination of farming and some other source.

I think it is quite likely, by the nature of the development of the agricultural community in the Province of Ontario, that you are going to have a number of people who are legitimately engaged in farming and some other occupation, and where the kind of distinction which is required under the Income Tax Act must, of necessity, be made.

And I refer again to the provisions of the Income Tax Act of Canada, which I think he should take into consideration, for the kind of guidance in making the determination where there is more than one occupation by the transferor or members of his family, or by the transferor and the farming corporation into which he may have placed the farming operation belonging to his family.

The policy to which I referred, if I may move on to the other point, is what I took to be the concern expressed by the member for York North during the course of the earlier discussions on this bill in second reading. I thought this was the concern that was expressed by a number of the members of the Conservative Party who are intimately involved in and concerned with farming. It appeared to be arbitrary, conceptually wrong and inconsistent not to permit the passage of farm land from a transferor to a transferee regardless of whether the transferee was related as a member of the family to the transferor.

It seemed to us that the purpose of the bill should provide for the stabilization of land costs and prices, and consistent with that purpose should be a concern by the government to maintain in agricultural use the substantial part of the farming land which is at present in farm use in Ontario. I would suggest that if there is a moral purpose around, the moral purpose is to provide the production, from the land which we have in the Province of Ontario, of the kind of food which is required not only or our own purposes, but also for world purposes.

I find it a little difficult to equate that particular concern, which I consider to be one worthy of some moral indignation, with the kind of moral indignation expressed by the member for Huron-Bruce, the leader of the Liberal Party and the member for Downsview.

What I want to propose -- and if my interpretation of the bill is wrong, then I stand to be corrected, because it is quite technical. I want simply to propose that it doesn’t matter whether the transferee of farming land is a member of the family of the transferor, or whether the transferee is a farming corporation within the restricted definition as contained in the Act. It would appear to me to make no never-mind for the basic purposes of the bill to provide for the transfer of farm land to persons who may be strangers to the transferee without subjecting them to the tax.

I would like to propose that the wording -- I don’t claim that it is ideal or adequate -- would convey the meaning to the minister that so long as the land is transferred to a transferee for the purpose of enabling the transferee to continue farming the land, it doesn’t matter whether that transferee is or is not a member of the family of the transferor or otherwise related, in the sense in which that kind of relationship is important for succession duty purposes, which is a different kind of taxing statute designed for a different purpose.

I would like to propose, and then perhaps comment again upon, this particular amendment. Mr. Chairman, what I am doing is moving a further amendment upon the amendment moved by the member for Huron-Bruce. The wording which I am using is to, in substance reinstate certain of the wording which the member for Huron-Bruce’s amendment has struck out of the bill in order to convey what I want to say.

I want to move that subsection (h) of section 4 be further amended by adding thereto, after the word “disposition” and that is the last word in the amendment proposed by the member for Huron-Bruce -- the words “and the disposition of such designated land is for the purpose of enabling the person to whom the disposition is made to carry on farming on the designated land.”

I would so move Mr. Chairman. Then I would like to perhaps elucidate, if it needs any further elucidation, the point which I am trying to get across to the minister because I think it deserves consideration.

Mr. Chairman: Does any other member want to speak on this before the --

Hon. Mr. Meen: I would like to hear the hon. member for Riverdale on some clarification on his proposed amendment, Mr. Chairman.

Mr. Chairman: Do you want me to read the amendment?

Mr. Renwick moves that subsection (h) of section 4 be further amended by adding thereto after the word “disposition,” the words “and the disposition of such designated lands is for the purpose of enabling the person to whom the disposition is made to carry on farming on the designated land.”

Mr. Singer: Mr. Chairman, on a point of order, after the word “disposition,” I think should be clarified, because as I understood the member for Riverdale he means the word “disposition” in the amendment moved by the member for Huron-Bruce. Perhaps it should be said there.

Mr. Renwick: Yes, this is the elucidation I wanted to make. The member for Huron-Bruce has moved that subsection (h) of section 4 be amended by adding after the word “transferor” in the second line, the words “in farming, and has been so used by the transferee for a period of 10 consecutive years prior to the disposition.”

Those are the words we want to leave in the bill. But following the word “disposition” in the amendment of the member for Huron-Bruce -- we accept his striking out of all the other words -- we want to reinsert the words “and the disposition of such designated land is for the purpose of enabling the person to whom the disposition is made to carry on farming on the designated land.”

Perhaps in my own roundabout way I have got the purpose across to the minister. It seems to me that it makes no never-mind, so long as the land remains in farming, whether the transfer is made to a member of the family of the transferor, to a farming corporation or to a stranger. It makes very good sense, and seems to be in line with the number of statements made by the ministry with respect to their policy on farming land and that if that situation pertains there should be a complete exemption of that transfer from the particular tax.

That makes a very real distinction between the amendment as proposed on behalf of our party and the amendment proposed by the member for Huron-Bruce, because what the member for Huron-Bruce is saying is that so long as the farm property has been in farming for 10 consecutive years, it doesn’t matter who he sells it to. He is entitled to get away with whatever the proceeds may be. I am simply suggesting -- and I think it is consistent -- that while I am not an expert in mathematics, members of our caucus inform me that 10 per cent compounded as is provided in the additional clause in subsection 1 of section 1 of the bill in the definition of adjusted value, means, for practical purposes a doubling of the value in seven years, together with the additional costs which are permitted in determining the adjusted value.

If that is the case, we want to dissociate ourselves from the amendment by the member for Huron-Bruce but we want to commend to the minister the proposition that it shouldn’t matter whether the transferee is or is not a member of the family so long as the disposition is made for the purpose of enabling the person to whom it is made to carry on farming on the designated land.

Hon. Mr. Meen: I find the comments of the member for Riverdale interesting, Mr. Chairman. What he is disregarding, at least in our view, is that it is a sale, even for the purpose of farming -- and this is what he is suggesting we do. He recognizes the validity of the retention of farming which I have in the section now and he is suggesting it should be possible for one farmer to sell to another without attraction of any tax, regardless of whether or not they are in the family. It is our view that if an arm’s-length transaction takes place by a farmer to another farmer unrelated to him he inevitably will be taking his so-called profits, in that sale.

Mr. Singer: He will be paying capital gains tax on it.

Hon. Mr. Meen: Not if it is kept in farming by this section.

Mr. Singer: He will be paying a capital gains tax to the government of Canada.

Hon. Mr. Meen: He will be paying a federal capital gains tax as does any person in Ontario when he --

Mr. Singer: Right.

Hon. Mr. Meen: -- sells any asset, whether he be a farmer or not.

Mrs. Campbell: Except for principal residence.

Hon. Mr. Meen: Yes, except for principal residence.

Mrs. Campbell: Yes, and we will come to that, too.

Hon. Mr. Meen: That includes cottage properties and so on. What I am saying is we do not feel that when a transfer is made from father to son to grandson and so on there should be any dislocation of these roll over provisions to which the member for Riverdale has referred.

I might just touch on that momentarily and observe that if you disregard the allowance to the farmer who tills his own soil of the full amount of his net maintenance costs up to 10 per cent of the base value, it is seven years for the basic 10 per cent per annum cumulative. But if you take into account the further 10 per cent for net maintenance costs which he can charge off against income for income tax purposes -- for that matter, with respect to taxes he gets the farm tax rebate cheque -- he will still be able to show his basic taxes and all the other things.

From our figures it is clear that it is not very hard for a farm operation to operate with net maintenance costs allowable under the section of upwards of 10 per cent. When you take taxes, mortgage interest, basic repairs, proportionate amounts for light and heat and water referable to the maintenance shop and the like, he can actually wind up with a total effect of 20 per cent -- the one 10 per cent figure being cumulative and the other 10 per cent, in reference to net maintenance costs, being non-cumulative -- and with a turnaround or doubling effect in not seven years but about 4 1/2 years.

That is pretty attractive. If you add to that the capacity to roll over the title to property from father to son to grandson and so on without attracting any tax, and with each successor in title accumulating the base figures accumulated by his father and his grandfather in the years gone by he can build up a very substantial net worth in that property which would be free of tax altogether.

Coming back to the point made by the member for Riverdale, it is our feeling that when he does eventually sell in an arm’s-length transaction to another farmer or to anyone, he must be assumed to be taking his profits at that time. We don’t assume that if it is a non-arm’s-length transaction within the family as it has been defined.

The amendment by the member for Huron-Bruce would rule out any possibility of a transaction of family relationship in the ownership of a farm, would require a 10-year ownership for that particular registered owner, and he would have no facilities for a flow-through from father to son, if we were to accept his amendment. I think that anything approaching that kind of amendment would be a travesty and would be a great injustice to the farming community.

Mr. Gaunt: All you have to do is put your family provisions in the amendment and you have it covered.

Hon. Mr. Meen: And actually the member for Riverdale recognizes that; he is just simply taking the next step and saying, ‘‘Well, I think as long as it is kept in farming there should be no speculation.”

Mr. Gaunt: And there shouldn’t.

Hon. Mr. Meen: As far as we are concerned, we see it that if it is sold outside the family, even if it is kept in farming, that it is appropriate that any excess over and above these very generous allowances -- and the member for Riverdale concurs that --

Mr. Deacon: Generous allowances contribute to inflation.

Mr. Mr. Meen: -- these are very generous allowances to the farming community; far more generous than has been extended in any other quarter.

Mr. Gaunt: The minister missed the point.

Hon. Mr. Meen: Actually, it rather surprises me that the other groups haven’t complained at the generous treatment being afforded to the farming community. I am suggesting that they are being well treated, and if the allowances then still do not equate on the basis of roughly 20 per cent per annum increase, free of any tax, and based on a value accumulated to April 9, that perhaps some kind of tax should be attracted when the sale is outside the family. And that’s why we have the provisions under 1, sub (1), sub (a), sub (v) under 1(1)(e) and 1(1)(f), the farming corporation; because it is part of the whole picture, too, and we wanted to make sure that it was in the picture so that sales on those transactions would not attract tax either -- and then, of course, under 4 sub (h), the basic family farm provision.

Mr. Renwick: Mr. Chairman, just before the adjournment, so that the minister and his advisers perhaps would have an opportunity to think about the problem a little bit more, I am not suggesting for a moment that they are not aware of it, but it seems to me passing strange that commercial properties and industrial properties, other than apartment buildings and so on, should be free and that tourist operations, if they are as designated, should be free of the tax completely and yet not farm property, which is a business operation, a commercial venture.

It seems to me that it should be free if it is sold for farm purposes and it shouldn’t matter who it goes to at that point in time. I think it should be completely free and I think that in your laconic way you have expressed it much more clearly than I have. The purpose of my amendment was to say that, exactly, the situation that an arm’s-length transaction from farmer to farmer, related or not, in the sense of arm’s length, should not be subject to this speculative land tax any more than the considerations which lead you to believe that commercial property and tourist property should be subject to the tax.

And here I think the minister and our party are in agreement -- that once it goes out of farming then we have the sensation that the adjustment provisions are adequate to provide a reasonable degree of exemption for practical purposes. If there is a margin then to be taxed, well that’s fine, that’s kind of in the windfall area of additional properties. We are not in disagreement on that.

But I would ask the minister during the dinner adjournment if he would consider whether there isn’t an area in between that he could accept, the kind of amendment which I proposed on behalf of our party for that arm’s length farmer-to-farmer transaction.

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