Legislative Assembly of Ontario

The House resumed at 8 o’clock p.m.

LAND SPECULATION TAX ACT (CONTINUED)

Mr. M. Shulman (High Park): There’s no quorum, Mr. Chairman.

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

Mr. Shulman: There is no quorum.

Mr. Chairman: We don’t need you here to say so.

Clerk of the House: There are 18 members present, Mr. Chairman.

Mr. D. J. Wiseman (Lanark): There are 19.

Mr. Chairman: According to the rules of the House then, I shall rise and report.

Mr. R. F. Nixon (Leader of the Opposition): I know a whip who is going to lose his job.

Hon. L. Bernier (Minister of Natural Resources): The member for High Park should get the smile off his face.

Mr. Chairman: Will the member take his seat?

The House resumed; Mr. Speaker in the chair.

Mr. Chairman: Mr. Speaker, the committee of the whole House reports no quorum.

Mr. Speaker: The committee of the whole House reports no quorum and asks the clerk to take the count.

Clerk of the House: Mr. Speaker, there is a quorum present.

Mr. Speaker: Mr. Chairman, now there’s a quorum we will go back into committee of the whole House.

Mr. Shulman: Doesn’t there have to be a motion from the government?

Mr. Speaker: Yes.

Hon. W. A. Stewart (Minister of Agriculture and Food): I so move Mr. Speaker.

Mr. Chairman: According to the orders as printed, this is the procedure without any motion. We are in business and we are dealing with section 5, subsection 2. The member for High Park.

An hon. member: Tell them they can come in.

Interjections by hon. members.

Mr. L. Maeck (Parry Sound): Funny thing that the member for High Park doesn’t realize there is work going on besides in this House.

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

Mr. Shulman: No.

Mr. B. Gilbertson (Algoma): There are two committees sitting besides the House.

Mr. Maeck: He should use a little consideration.

Mr. Shulman: I would like to ask the minister about the word “after” in line 6. It is my understanding, Mr. Chairman, that what this means is, if I wish to sell a property and I am selling it to the member for Downsview (Mr. Singer) -- again we are still working on our transaction, it hasn’t gone through yet -- and I wish to avoid paying the tax, I will go to your department and get a certificate saying the tax is payable. I will then proceed to sell the land but the problem is, the way this is worded, I presume this is the only error in the bill -- it’s the only one I have noticed so far tonight -- the way it’s worded, as soon as I have received the certificate and go to the member to consummate the deal, the certificate becomes no good because it says here: “The giving of the certificate does not destroy the special lien for tax resulting from any disposition of designated land occurring after the date as of which the certificate is given.”

Now since obviously the sale is not going to go through at the same time I receive the certificate, what you are saying in effect is: I must get the certificate after the sale goes through but I must also get the certificate before the sale goes through. Can you explain that to me, Mr. Chairman, how it is physically possible to sort of move in both directions at the same time?

Hon. A. K. Meen (Minister of Revenue): Mr. Chairman, I suppose it is possible to give an explanation. The one thing I can’t give the hon. member is comprehension. I would have to leave that up to him. I would just suggest that if he would read the words “after the date as of which the certificate is given,” he might realize that that relates to a date presumably established by evidence filed with the ministry for a date of closing of a particular transaction.

This is where the solicitor for the vendor contacts the ministry and says: “Look, June 15, next, I will be completing a sale on such and such a piece of property; here’s a copy of the agreement of purchase and sale and here’s the sale price. Now, would you kindly advise as to the amount of tax that is exigible so that I can make arrangements for payment of that tax. Or, if no tax is payable, let me have a release of that lien.”

So, the ministry issues the certificate releasing the lien as of the date of June 15, let’s say, if that were the date established for closing. Now, this is May 27, and the certificate would be in the hands of the prudent solicitor acting for the vendor so that he can deliver it to the solicitor acting for the purchaser on the completion of that transaction on or before June 15, to use my illustration.

Any problem? None whatever. That is precisely what the words “as of which the certificate is given,” are really intended to mean.

Mr. Shulman: I am delighted that’s what they are intended to mean; it is a pity that is not what they say.

I will try to take the minister’s wisdom and try to comprehend his complicated explanation and the explanation sounds lovely. It is a pity it isn’t written into the bill. The lawyers with whom I have had the pleasure of discussing this section say: “It is very obvious what he means, but isn’t it a pity he didn’t write it properly, because what the section says is not what the minister has just said.” What the section says -- and let me read it so that the minister can comprehend; I will read it very slowly -- is:

“The giving of the certificate does not destroy the special lien for tax resulting from any disposition of designated land occurring after the date as of which the certificate is given.”

I know what the minister means; I do comprehend what he means.

Hon. Mr. Meen: I expect the member does.

Mr. Shulman: I wonder if a judge will know what he means, because unfortunately a judge who will have to decide on it may not have been sitting here in the balcony hearing the minister’s kind words and perhaps the minister won’t be there as a witness to explain. Perhaps it is unreasonable of me to ask the minister to make it sufficiently simple that lawyers can understand what he meant to say. Perhaps he could reword it just the way he just worded it now, so that the date that is referred to is not the date on which it is given -- because that is what it says -- the date as of which --

Hon. Mr. Meen: It does not. It says, “as of which.”

Mr. Shulman: “As of which the certificate is given.” Now, you are going to have to be a Philadelphia lawyer to persuade anybody that that’s not going to mean the date “as of which the certificate is given;” because those are the very words the minister is using.

The minister may shake his head in comprehension or incomprehension -- and I’m not sure which of us is not comprehending the other; although I suspect it is mutual. I suggest to the minister that really, in effect, this section can be used if one uses plain English to mean what plain English supposedly means. I wish the minister would pass it to one or two of his confreres that are here and ask them what they think it means. It is fairly obvious to anyone who, perhaps, isn’t aware of the minister’s thinking that the certificate must be used as of the date it is issued. In other words, what you will have to do is complete the transaction the same day.

I know the minister, as with all the other sections which he has drawn up so well, is not going to accept any suggestions from this side to try and remedy his errors; but I want this one on the record, too, because they are all going to come back to haunt him. And let this one be one more where just through rushed and inept wording and a refusal to change it and make it simple -- to us simple people -- he is going to have troubles later on.

Mr. Chairman: The member for Sandwich-Riverside.

Mr. F. A. Burr (Sandwich-Riverside): Mr. Chairman, I’ve been trying to follow these two-letter words, “as” and “of.” Did I understand the minister to say “as of” means “on or before”?

Hon. Mr. Meen: Yes, Mr. Chairman.

Mr. Burr: Why not say so?

Hon. Mr. Meen: The section says “a transaction resulting after the date as of which the certificate is given”; it would mean that if a certificate is given releasing a lien as of, say, the middle of June, the transaction could be completed between now and the end of June between the parties whose interests are shown on that certificate -- one has to emphasize that, too -- without the attraction of any tax because either the tax has been paid or there is no tax exigible or security for tax has been given.

Mr. Burr: I understood that when you said, “Yes. On or before,” but then you confused me. Why not say “on or before”? Is that not legal terminology?

Hon. Mr. Meen: It just happens that “as of the date for which the certificate is given” means the same thing.

Mr. Burr: I might say, “As of now I shall no longer drink coffee.” That means from now on.

Hon. Mr. Meen: That’s right, because you used the word “now.”

Mr. Burr: “As of.”

Hon. Mr. Meen: All right. As of June 15, I will drink no more coffee. What does that mean?

Mr. Burr: From now on. It doesn’t mean “on or before.” It does not mean “on or before now.”

Mr. D. H. Morrow (Ottawa West): That is June 15 or thereafter.

Mr. V. M. Singer (Downsview): You don’t solve legal problems by waving your hand. Mr. Chairman, I don’t follow the minister at all. I would like to hear him explain away Mr. Stephenson’s comments to the 1,500 members of the Canadian Bar Association. I would also like to hear him explain away the argument I advanced relating to the Ministry of Revenue Act.

I have read that thing through again. I see now section 6 -- which I didn’t mention before because I ran out of time at 5 o’clock -- as: “There shall be appointed, pursuant to the Public Service Act, such other officers, clerks and servants as the minister considers necessary for the proper conduct of the business of the department.”

I’ve looked in the Ministry of Revenue Act and I’ve looked in the Public Service Act and I don’t see anything defining “officers.” But what puzzles me more than anything else is how you can have retroactive statutes that will retroactively affect other statutes which are not retroactive. I’d like you to explain that to me because certainly there’s nothing in the Ministry of Revenue Act which gives it any retroactive effect.

In the absence of an opinion from the law officers of the Crown saying that this unusual section 23 gives a retroactive effect to this statute and equally applies to the Ministry of Revenue Act and equally applies to the Public Service Act, I don’t think it follows at all because the courts look askance at any statute which purports to have retroactive effect. Unless the language is clearly and distinctly spelled out there are many court decisions which say they will not give a retroactive effect to such a statute.

I would like to know --

Hon. Mr. Meen: Unless it’s spelled out.

Mr. Singer: It is not spelled out. How can you spell out, in section 23, a retroactive effect on the Ministry of Revenue Act which isn’t even referred to? How can you do that?

Hon. Mr. Meen: Would the member like to resume his seat?

Mr. Singer: Just sit down and you can answer me in due course.

Hon. Mr. Meen: Okay.

Mr. Singer: How can you purport to do it without the most positive opinion from the law officers of the Crown? There is nothing in the Ministry of Revenue Act which says it can be retroactively applied. There is nothing in the Public Service Act which says it can be retroactively applied. You take section 23 and read it and show me some reference in there, either to the Ministry of Revenue Act or to the Public Service Act which says you can take section 23 and apply it to either of those statutes. You can’t. I don’t know what kind of law this minister is trying to enact in this province.

Hon. Mr. Meen: Why don’t you save your arguments for when we get to section 23?

Mr. Singer: If you want this statute which we’re debating now to apply to the Ministry of Revenue Act retroactively surely you’ve got to say so and you don’t say so. If you want it to apply to the Public Service Act surely you’ve got to say so and you don’t say so.

Tell me who the officers are. How many officers do you have? Have you appointed them? Have you got a list of them? How many people can sign those certificates? Are they officers? What is an officer? If I wanted to challenge any land -- now, don’t shake your head at those fellows. They’re no help to you. They got you into this I am. Have you got an opinion there from the law officers of the Crown?

Are you going to be able to tell me how you can retroactively affect a statute that has no retroactive provisions in it without even mentioning it, and in a taxing statute above and beyond that? It just doesn’t make sense. This minister comes in here, without even a basic knowledge of the law, with a taxing statute, and tries to attribute the most unusual, inept, illogical kinds of interpretation that the courts have never allowed.

I would agree, Mr. Chairman, that the Legislature can enact retroactive legislation. But, the law is abundantly clear that if there is going to be retroactive legislation, then that legislation has to be clearly spelled out so it’s meaning can be understood and so that there can be no doubt in anybody’s mind.

Now, can the minister tell me what kind of legerdemain he is about to use to say that a retroactive section in a statute called An Act to impose a Tax on Land in respect of certain speculative Transactions affecting the Control or Ownership of Land can equally affect the statute called the Ministry of Revenue Act, and can equally affect a statute called the Public Service Act? Neither one of these is mentioned in this statute that is before the House, and neither one of these allows the minister to take any action retroactively. How can he do it? It just doesn’t make sense.

Mr. J. E. Bullbrook (Sarnia): Are you going to answer the questions?

Hon. Mr. Meen: Sure, I will be happy to. I was starting to do so a few minutes ago.

Mr. Bullbrook: You don’t sound too happy about it.

Hon. Mr. Meen: I certainly must confess to some irritation at listening to this kind of argument. The hon. member for Downsview knows perfectly well that there is the same capacity in this Legislature to enact the Land Speculation Tax Act as there was in this Legislature to enact the Ministry of Revenue Act. There are provisions in the Ministry of Revenue Act for retroactivity. We have provisions in this Act for retroactivity in certain sections.

Mr. Singer: Where are the provisions in the Ministry of Revenue Act for retroactivity? Show them to me.

Hon. Mr. Meen: There is no problem whatever in this legislation, and when we get to that section we can deal with it. Section 23 --

Mr. Singer: Oh no, deal with it now.

Hon. Mr. Meen: And I don’t propose to deal with it --

Mr. Singer: Of course you don’t because you can’t.

Hon. Mr. Meen: When we get to section 23 which deals with retroactivity in subsection (e) and subsection 3 of section 22, it states, “A regulation, if it so provides, may be effective with reference to a period before it was filed.” That is just precisely the kind of authority we are talking about.

Mr. Singer: Nonsense.

Hon. Mr. Meen: There is no doubt in my mind that there is that capacity.

Mr. Singer: Well, you are not a very good lawyer.

Hon. Mr. Meen: Mr. Stephenson, when he was talking about the certificates that have been signed up until now and saying that he questioned their validity, is technically correct when he says that, because we don’t have an Act that is passed --

Mr. Singer: Of course you don’t.

Hon. Mr. Meen: -- under which those certificates are signed. Those certificates will be validated by a regulation under 22(2)(g) of the Act --

Mr. Singer: Ah, baloney.

Hon. Mr. Meen: -- authorizing a regulation to be passed, which authorizes a designated officer or class of officers empowered by the government of Ontario to exercise powers or perform the duties of the ministers under this Act. By regulation under 22(2)(g) of this Act -- not of the Ministry of Revenue Act -- those officers, who number between 35 and 40 in my ministry and who are signing these releases on my behalf, will be authorized, and those certificates will be confirmed.

Now, it is obvious that at this stage one can’t authorize them to do this. We don’t have an Act yet, thanks to the opposition and the filibustering from over there.

Mr. Singer: Oh no, thanks to your ineptness. Thanks to your absolute ineptness. Worst statute that has ever been brought before the Legislature.

Hon. Mr. Meen: Now, I would suggest that when we have the Act into law and can pass the regulation, then we will be able to --

Hon. Mr. Stewart: You said that about other legislation which is now good law today.

Hon. Mr. Meen: We will be able to fully ratify the certificates that have been issued under that section.

Mr. Chairman: The member for Lakeshore.

Mr. P. D. Lawlor (Lakeshore): Mr. Chairman, if the hon. minister, among his boyhood remembrances, had read Pilgrim’s Progress, he would know about the revisitation of the Slough of Despond, in which we all exist in the course of this particular legislation.

I am now getting numerous calls, Mr. Chairman, with respect to certificates, believe it or not, Mr. Chairman. They seek to get the certificates. What has happened in terms of the letter that was before us earlier today is a very widespread phenomenon indeed in the whole area.

What I would like the minister to do for me -- I know you’ve done it tentatively and in outline in the brochures you sent out to the legal profession -- but I really would like to know, and for you to go into some detail in telling me, what the procedures really are. When they phone me and ask, I say, “Go over to 77 Grenville St. and see what you can do.” But I don’t know really what they can do -- what the score on the thing is. They tell me that the bill isn’t available, that they can’t get copies of it. I know I’ve sought, due to numerous requests, to obtain copies of this bill to send to various friends of mine in the legal profession so they may peruse it on their own hook and make of it what they will. That’s their problem. I can’t get them. You said earlier in the day if we could get this thing over with you’d get some printed.

Hon. Mr. Meen: That’s right.

Mr. Lawlor: Is the printing problem so grave at the moment that we can’t even get adequate copies of the legislation that we’re seeking to deal with, so that we may get some intelligent input? At the moment the thing is total confusion.

What I’m interested in, as I indicated, is the clauses in the bill having to do with certification, and particularly what I call the (b) part of that particular section. This is where you say “the giving of the certificate does not destroy the special lien tax resulting from a disposition of designated land occurring after the date, as of which the certificate was given, and (b)” -- what I call (b) -- “and giving of the certificate does not impair or relieve the transferor from his responsibility to pay.”

I can see (b) but I’m “demd,” as Mantalini in Dickens says, if I can see (a). Why do you have to put that particular clause in? I would think that the mere giving of the certificate wouldn’t destroy or impair the responsibility to pay the tax. It may be paid subsequently. It may be paid by some arrangement. The certificate is given as a condition precedent to the particular payment. You can make your deal.

But that generally is what I’m after here. How do you handle these things? When one appears at Grenville St. and asks for a certificate, what is the procedure? What must be presented? On what grounds will it be given or refused? Can you give us an outline for the general delectation of the profession at this time? Maybe we can clear some ground, and not have quite so much fuss as what’s taking place at the moment.

Hon. Mr. Meen: Mr. Chairman, I’m happy to try to outline what would happen. But I think one would have to recognize that in every case the circumstances may be somewhat different. The applicant appears with his documentation, presumably including a copy of the agreement of purchase and sale, establishes a date, establishes an amount and eventually establishes the amount, if any, of the tax that would be payable.

The hon. member asked, “Why not after the date as of which the certificate is given”? The certificate would be given in relationship to the anticipated closing date. Suppose one were then to say, “All right, we won’t close then; we’ll close six months later.”

Perhaps there would be a side agreement under which they weren’t going to close on that date but they were going to speculate that there would be some additional increment in value and they didn’t want to attract any tax. So they might say, “All right, we’ve got a certificate, but that clears this deal, it doesn’t matter when we closely.” Six months from now the value may be very different, and so the ministry reserves the right to say, “All right, you’re talking about a closing date now. Within 30 days, the normal period of closing following the completion of an agreement of purchase and sale.”

Whatever it is, you look at a particular date and you satisfy my staff that that’s the value attributable to the transaction on or about that date, or on or before that date, because we are talking incremental increases, not decreases, necessarily. So you satisfy my staff that a certain amount of tax, if any, was payable as of that date, and the certificate would be issued as of that date. I don’t have any difficulty with that; I don’t know why some of the members opposite have indicated that they have some difficulty with that terminology.

Mr. Bullbrook: I’ll tell you why.

Hon. Mr. Meen: In any event, after that date it’s a whole new ball game. It may be that it’s a new deal which has been made.

Mr. Lawlor: If the deal doesn’t close in 24 hours --

Hon. Mr. Meen: Ah, yes.

Mr. Lawlor: -- you’ll have to come back.

Hon. Mr. Meen: Ah, no, you might say. Besides, what my staff are instructed to do is actually give some latitude of a week or two weeks beyond the anticipated closing date --

Mr. Singer: A week or two?

Hon. Mr. Meen: -- which will look after this kind of problem.

Mr. Singer: Come on.

Mr. Shulman: That’s against the law, isn’t it?

Mr. Bullbrook: Has there ever been a statute like this one?

Mr. Chairman: Order please. The hon. minister has the floor.

Hon. Mr. Meen: Not at all. In the terminology of subsection 2 it is completely within the purview of this that they could set a date sometime beyond the anticipated closing. The member who has suggested that is against the laws is not a lawyer and he does not realize the meaning to be imputed to the words “as of the date for which the certificate is given.” I am saying to him, and I think the member for Lakeshore at least understands this, that --

Mr. Lawlor: Don’t try and inveigle me.

Hon. Mr. Meen: -- gives some protection to the counsel involved in the completion of the transaction. If that date passes, they would have to come back to the ministry to obtain a new certificate based on the evidence they adduced before my staff.

Mr. Singer: Now that’s just nonsense.

Mr. Chairman: Order, please. The member for Lakeshore can continue his questioning.

Mr. Lawlor: Does the application --

Mr. Singer: That’s pure nonsense.

Mr. Chairman: Order, please.

Hon. Mr. Meen: It is the application.

Mr. Shulman: Even I realize that.

Mr. Lawlor: Does the certificate make reference to the specific deal presented on that occasion?

Hon. Mr. Meen: Yes, it does, Mr. Chairman.

Mr. Lawlor: How many applications have you in your ministry at the present time? How many are you processing? And arrears? Any idea?

Hon. Mr. Meen: I don’t have the figures.

Mr. Bullbrook: How long are you taking? You have to have figures?

Hon. Mr. Meen: Yes, there are some which I would expect would be a couple of weeks in arrears.

Mr. Bullbrook: What do you mean by --

Mr. Chairman: Order, please.

Hon. Mr. Meen: There was quite a backlog as a result of the mail strike --

Mr. Bullbrook: You say “Order, please” and I appreciate that but I am asking a question.

Mr. Chairman: The minister has the floor.

Hon. Mr. Meen: There was a backlog as a result of the strike, Mr. Chairman, which my people have been struggling to overcome. In addition there has been, as might be expected at this time of year, the normal increase in real estate transactions flowing through all law offices which I expect will prevail at least to the end of June. I would think there would be no significant backlog in the ministry by about the end of this week.

Mr. Bullbrook: How would you like to undertake that? Would you like to --

Hon. Mr. Meen: We were able to obtain the services of a number of law students who finished their examinations about a week or two weeks ago; I think it was just last week -- roughly the middle of May. They are giving us a very substantial hand in picking up this backlog. I would think that within the next couple of weeks we will see not only the backlog cleared up but we’ll see the ministry on an essentially current basis.

Mr. Bullbrook: I don’t particularly care about the administration of the statute.

Mr. Chairman: The member for Sarnia.

Hon. Mr. Meen: Others have asked and that’s why I was explaining.

Mr. Bullbrook: May I say to you, most respectfully through the Chair, that I don’t care about the administration of the statute. One would hope the people of Ontario are properly represented in connection with the administration of the statute.

What bothers me is the very pith and substance of what the member for Lakeshore talks about. It really is exemplary, again, of the catch and grab type of attitude that this statute has. I come back into this House now and I say to my colleague, the member for York North, (Mr. W. Hodgson), that nothing has been done for the farmers of Ontario.

Hon. Mr. Meen: Come back to the subject.

Mr. Bullbrook: All right, fine. You think it isn’t an important subject. I tell you it is from the point of view of equity and justice and you are going to learn that it is very important from the point of view of politics.

I want to talk about the imposed designation of (a) and (b). It doesn’t cause me any concern, Mr. Chairman, when it says, “and the giving of the certificate does not impair or relieve the transferor from his responsibility to pay any tax imposed by this Act.” That is general law in any event. No taxing authority is estopped on the facts that are given to it from collecting the tax if it finds that the facts are in error. That’s trite law as far as the Tax Appeal Board is concerned, as far as the Exchequer Court is concerned, as far as the ministerial interpretations are concerned with the Department of Revenue -- that’s trite -- that you are not estopped by the giving of any certificate to collect a tax where the certificate was given on facts, not properly represented or not properly understood by the taxing authority.

That’s understood and I accept that. I would not want to put a burden upon the government, any government of any jurisdiction, because they gave a certificate to estop them from collecting the tax in those circumstances.

But it’s the first part that causes me concern, and one would hope would cause the Minister of Consumer and Corporate Affairs some concern and the Minister of Revenue some concern, because that says: “But the giving of the certificate does not destroy the special lien for tax resulting from any disposition of designated land occurring after the date as of which the certificate is given.”

Occurring after the date at which the certificate is given -- now this is where the minister hangs his hat. And I say, when I talk about clutch and grab, we’ve talked here for -- what? three weeks now -- about farmers, the clutch and grab on farmers who aren’t speculators; the obligation upon lawyers to collect tax when there shouldn’t be an obligation. Now we are talking about what is known in the common law as a bona fide purchaser for value without notice -- and I ask to be interrupted as soon as the minister says and feels that I am wrong -- who traditionally under the common law, because of his position of innocence of knowledge, has been protected under the common law.

That’s been understood under our system. But not so under this Act. Not so under this Act, as I read it. The minister smiles -- and perhaps I’m making a manifest error, and if I am, I invite him now to rise in his place and tell me where the manifest error is.

I say to you that under the wording of this statute, a bona fide purchaser for value without notice, relying on the certificate issued, is responsible not for the payment of the tax as the transferor is, but his land is liened with respect to the tax obligation. And that’s wrong. It’s directly wrong.

I must be making a mistake. Obviously I am not sufficiently equipped to understand the words there and I’m now going to take my seat with the hope of rising again because, as the minister shakes his head, he conveys to me that I misinterpret that part of the subsection. So I sit so that he can direct me properly.

Hon. Mr. Meen: I accept the member’s invitation to direct him properly, as he puts it. He must recognize that in the conveyancing of real estate, it is up to the solicitor acting for the purchaser to make all necessary searches, as he does, and one of them is -- one of many for example -- a corporation tax clearance certificate.

Mr. Bullbrook: Right.

Hon. Mr. Meen: Now, under that certificate -- we are all familiar with that one -- that’s been going on for years.

Mr. Bullbrook: Right.

Hon. Mr. Meen: You advise the controller of revenue, as it happens in my ministry, that you are going to be completing that purchase from the XYZ Co. and you want a corporation tax clearance certificate from him as of that date. Right?

Mr. Bullbrook: Right.

Hon. Mr. Meen: And you also may advise him that there are other corporations on the title that had title until certain dates. And you outline those and give the names of the companies and you ask for corporation tax clearance certificates on those too.

That’s one of those things that doesn’t appear on the title to the property per se but we, as lawyers, have always accepted those as one of the things that we did. We are charged with a form of notice by the statute, the Corporation Tax Act in that case, whether it happens to appear on the title to the real estate or not.

So there are many things we have to do as lawyers in handling a title purchase for a client.

Mr. Bullbrook: Absolutely; entirely agree, entirely agree.

Hon. Mr. Meen: All right. Now, there is significantly no difference between that situation and this, as I see it. In this case, this statute imposes a tax based on an increment in value, an increase in value from a certain date -- be it April 9 or 10 or be it the date of acquisition -- with certain allowances to the anticipated date of closing.

Now, if that date should pass, or the date for which the certificate is issued by my ministry should pass, then the purchaser’s solicitor is in the position of having to come back to the minister and say: “All right, for whatever reason I wasn’t able to complete that conveyance set out in the certificate you had for the solicitor for the vendor to deliver to me on closing.” Now, we need another one updated by 15 or 30 days, or whatever, in order to give clear title as to tax. Now, there’s no problem about that. There’s no travesty of justice created by this, and I would suggest that the member for Sarnia is making the proverbial mountain out of a molehill.

Mr. Bullbrook: I want to ask you one question. Would you please permit me to continue for a moment? I certainly don’t understand the response. I just want not to be deflected if I may by talking about the time element. Forget about the time element. Are you saying to me that the issuance of a clear certificate under the Corporation Tax Act does not negate a lien under the Corporation Tax Act? Is that what you are saying?

Now, understand what I am saying -- I am asking you whether the issuance of a certificate under the Corporation Tax Act does not negate a lien. I recognize the corporation still has a responsibility to pay the tax.

I say to you directly that my understanding of the law is that the issuance of the lien does not permit the issuance of the certificate of clearance, does not permit the seizing of the land for arrears of corporation tax. That’s my understanding. Would you tell me, please?

Hon. Mr. Meen: I can’t quarrel with that. We are not talking about the Corporation Tax Act, but I think that certificates of clearance of the corporation tax claim are essentially the same.

Mr. Bullbrook: May I say to the minister that we now come to the nub of the thing. This is the distinction that I make and tried to make before. I don’t want to waste your time, or my colleagues’ time, about an argument over the issuance of a certificate and then the need for the issuance of a new certificate. I am saying this to you when you talk about the obligations of a solicitor for the purchaser. We know he has many obligations collateral to and not directly involved with the title per se. Right, you mentioned one, the corporation tax, hydro arrears in a rural municipality as far as Ontario Hydro is concerned -- arrears of tax, execution, things of that nature. When he gets that certificate, my understanding of the law is that that certificate provided by the solicitor for the vendor enables the solicitor for the purchaser to certify to his client that there is not a cloud created on the title.

Obviously, I am not able to convey to you my concern here. What I am saying to you here is this, that you say under this statute that notwithstanding the issuance of the certificate, that the certificate does not stop you from still claiming a lien. Now we get back to the very point -- I am sorry, help me.

Hon. Mr. Meen: Sure, after the date as of which the lien certificate was granted. If the transaction is completed on or before that date, then the lien is gone, but after that date it is no longer effective.

Mr. Bullbrook: May I say to you, if you said “on or before,” rather than “on or after,” I wouldn’t be on my feet. How many times are you going to complete a transaction before the certificate is issued? How many times are you going to complete a transaction on the day the certificate is issued, and --

Mr. Shulman: That’s what we argued before. But he has said it doesn’t mean what it says.

Mr. Bullbrook: Heaven help me. I realize that you have been arguing, and I am trying to carry the argument forward. What I am saying to you, in effect, as best I can, is that this particular subsection and the wording thereof will apply to 99.9 per cent of the transactions. It will not permit a solicitor for the purchaser to rely on the certificate issued by your ministry. It just can’t. And you are just inviting the same type of disaster you did before.

I sit down by saying again, if you will permit me, this catch and grab business -- we agree again with the concept that we want to tax speculators, but goodness gracious, why do you put us through this type of trauma on every section and every subsection?

Not only do you put us through the trauma, but may I say this to you, Mr. Chairman, before I sit down -- you now begin to dig in your heels. You dig in your heels with farmers and you dig in your heels with people who have spent their lives attempting to amass some equity as a result of the pursuit of the God-given right and endeavour, and you, for some reason, think that you are so magnificent that you can call them speculators.

Mr. Chairman: The hon. member for Sandwich-Riverside.

Mr. Burr: Is an amendment to 5(2) in order?

Mr. Chairman: Yes.

Mr. Burr moves that section 5, subsection 2, be amended by changing the words “as of” in line 6 to the words “on or before.” Any comment?

Hon. Mr. Meen: Obviously, I will just observe that that wouldn’t improve the situation. It would just worsen it, if anything. There’s no possibility, then, that a solicitor for a vendor could possibly get a clearance certificate that was of any use when he came to sell at a subsequent date. He would have to have the certificate when he attended for the closing, and if it only applied to a completion of a transaction on or before that date, then clearly it’s a useless exercise in obtaining the certificate.

Mr. Singer: Mr. Chairman, I have listened to all of this and the most significant admission by the minister was that the certificate is of no effect, and I agree with that. I agree with what was put forward. But, when you try and read subsection 2 together with subsection 3, you have to wonder about the use of a lien at all. Because if you read subsection 3, you find out that you don’t really need to worry about a clearance certificate, provided there’s an affidavit that the transferor attached to the registered document. Then the lien doesn’t attach. So, with the shaky ground that you’re on, with the impossible legal ground that you’re on, what are you worrying about your lien at all for? Because to defeat the lien, you file an affidavit by the transferor under subsection 3, and the lien doesn’t attach. Isn’t that what subsection 3 says?

Hon. Mr. Meen: Mr. Chairman, I have already told the hon. members that in many cases there would be no question of the matter coming before my ministry at all. Because there are certain exemptions, as we debated in section 4, and if one can, by affidavit, establish to the satisfaction of the registrar that the transaction --

Mr. Singer: Not to the satisfaction of the registrar.

Hon. Mr. Meen: -- falls within the exemptions of section 4, then there is no lien. No lien arises. There is no claim for tax. Ergo, there is no question of a workload within the ministry in having to handle those applications. It is only where the transferor cannot execute an affidavit that he is brought within section 4, one of its exemptions. It is only then that one is involved with a potential application of the tax and, consequently, the lien for unpaid taxes.

Mr. Singer: Surely a transferor in good faith could swear an affidavit, for instance under 4(g)2, that he had renovated or caused to be renovated at a cost of not less than 20 per cent. And he may have been wrong by 17 per cent of the 20 per cent, but in good faith he believed it was 20 per cent. So he put on his affidavit that there is no lien, and off he goes. You’re going to find it awfully difficult to prosecute the transferor who swore that affidavit, particularly since he’s taken his money in used $1 bills, non-serialized in sequence and run off to Switzerland, and put them in a numbered account.

Hon. Mr. Meen: Well, I don’t want to be misinterpreted --

Mr. Singer: So that the whole lien procedure really is a phoney.

Mr. Lawlor: He doesn’t think it’s $1 bills.

Mr. Singer: Well, maybe it’s $10 bills. But it’s a phoney. First of all you’re on illegal ground. And second of all, you make it so easy to defeat the lien procedures merely by putting an affidavit and attaching it. And the registrar is not going to sit in judgement on the efficacy of an affidavit. All the registrar is going to look for is an affidavit by the transferor that he verily believes that the designated land comes under section 4 a) or b) or c) or d) or e) or f) or g). If he does that, zoom it goes through, boom there’s no lien. The next part is the transferor gets his money and off he goes. And if you ever catch up with the transferor and he’s still got his money and you can find him, he’s still liable for the tax, but the land is free and clear.

Mr. Lawlor: Right. This is the position the registrar is taking.

Mr. Singer: So, why don’t you take out your lien section? Your lien section makes no sense; (a) because it’s illegal and (b) because it’s impractical. How can you expect us to support the lien section at all?

Mr. Lawlor: Not one registrar in the province is going to question a single affidavit coming forward under subsection 3 in this thing.

Mr. Bullbrook: He has no right to.

Mr. Singer: Right. He is not a policeman.

Mr. Shulman: He wouldn’t have time anyway.

Mr. Lawlor: I think the word is out that they simply accept them. How could they possibly make any inquiry into them as to value? I am, nonetheless, still interested in the administration features of the bill.

Mr. Bullbrook: Because he has law students.

Mr. Singer: There are going to be designated offices, are there?

Mr. Lawlor: There is no particular problem in offers to purchase and what not that are dated before April 9, as I take it. You can get those through easily enough, like presenting the offer to purchase. It’s the ones that are being set up now and the ones after April 9, closing sometime in the future, where the real problem occurs. How do your clerks, or whoever handles these things, arrive at what the fair market value was on April 9? How do they determine that, sitting in their office over there?

Mr. Shulman: The computer is going to tell them.

Hon. Mr. Meen: Could I ask the hon. member where he was this afternoon? Was he in the House?

Mr. Shulman: We never got any answer this afternoon anyway.

Hon. Mr. Meen: I outlined it in considerable detail and I suggest he look at Hansard.

Mr. Shulman: Don’t look at Hansard. It is useless. It’s the computer and he doesn’t have the computer yet. He’s going to have it next year.

Mr. Bullbrook: Just on a point of order for a moment, that type of response makes me rise on a point of order, and why the chairman permits that type of thing --

Mr. Chairman: What is the point of order?

Mr. Bullbrook: My point of order is this, why do you permit that type of response to a member who, most times, is in this House, when we recognize we have sat in this House debating this bill with as many as six government members in the House? There are three other things to be done here, and other business to be done by members, so don’t you make that type of response to any member.

Mr. Lawlor: I thank you very much for that.

Mr. Bullbrook: You don’t need any help, you should have said it yourself.

Mr. Lawlor: I doubt very much that Hansard will disclose what you are saying. I was here long enough this afternoon to hear the portent of the debate and the main points. I would like, nevertheless, for my own delectation and because I’m getting these numerous calls and because the legal profession is in a state of total uproar and wild about this bill -- it’s never seen anything like it, and what you are doing as far as the legal boys are concerned, is, they are going to be charging $150 to $200 more per deal because of the hoops that you are putting them through, so that you are making your little contribution on the legal end of the thing to the inflationary spiral in this province, the real estate. I nope you realize that. It is certainly one of the aspects there.

Mr. Shulman: He will raise the cost of housing.

Mr. Lawlor: I would, gently, like to know how they determine fair market value sitting in the office over there? I tell you this, if you don’t answer, by George, you’re going to get it.

Mr. Shulman: By George!

Mr. Lawlor: You can sit here six months, because we have formidable powers of cross-examination.

Mr. Singer: Whether anybody else reads Hansard or not.

Mr. Lawlor: All right then, you said that they set a certain date and you said that you were getting them a latitude. What does the certificate show with respect to your latitude? Does it show that this certificate is valid from this day henceforth one week? How does that work? What does that look like?

Mr. Singer: He has got law students coming in?

Hon. Mr. Meen: I wonder has the hon. member not seen one of the certificates?

Mr. Lawlor: I have not seen one of your certificates.

Mr. Shulman: Send a couple over.

Hon. Mr. Meen: I thought I had one somewhere. It simply certifies that with respect to a particular transaction between (A) and (B), as vendor and purchaser, a brief description of the land, that as of the certain date stipulated at the bottom, no lien is payable, or there is no lien.

Mr. Lawlor: What on earth were you talking about latitude for? That says a certain date.

Hon. Mr. Meen: Mr. Chairman, I thought it was elementary, but maybe the hon. member has missed the point on this.

Mr. Lawlor: Listen, boy, your arrogance is going to get you nowhere.

Hon. Mr. Meen: If he is acting for the vendor --

Mr. Lawlor: We practically got you bamboozled from the beginning of this bill and if you go on like this you will be here forever. You better learn. Some people are so damned obtuse.

Hon. Mr. Meen: If he is acting for a vendor and he knows that he has a closing date of 30 days hence, as a wise solicitor for a vendor he would set about the various clearance certificates which he or the solicitor for the purchase is going to requisition or may indeed have already requisitioned. So he would be in touch with the ministry, advising as to the anticipated sale date, the amount of the proceeds, the parties to the transaction, generally submitting a copy of the agreement of purchase and sale and indicating also his date of acquisition and if there has been an increase in value, what he would anticipate the tax would be.

This kind of information would be submitted to the minister. In the course of assessing it, the minister’s staff would determine the amount of the tax, would make arrangements for payment if there is any tax payable, or if no tax is payable would issue at that time -- and not wait until the 11th hour and the 59th minute of the evening before a transaction is to close -- the lien clearance certificate as of a date at least up to the date set out by the solicitor for the vendor in his material submitted to the ministry. If, in the illustration I gave, he picked June 15, it would be that date or a date subsequent to it for which the ministry would issue the lien clearance certificate. That lien clearance certificate would be mailed back to the solicitor for the vendor for him to put in his file with the other documentation, awaiting the attendance to complete the transaction.

Mr. Lawlor: Well I suppose --

Mr. Bullbrook: May I say -- all right, go ahead.

Mr. Lawlor: I was going to say that as far as I can see, it’s not the minister who is obtuse; obviously we lawyers over here and numerous others of the opposition must be terribly at fault, because that is not what it says; that is not the literal rendering of the thing. You can place any interpretation you bloody well please on your legislation, and that is what you are doing all the way through on a bill that has to be as critically regarded and as neatly and tightly assessed as this taxation statute has to be to be valid at all. You are the most akimbo-elbowed man I have ever seen. You are fairly tight in most instances, but in this particular case, being loaded with this persiflage, I suppose that you have given yourself elbow room which we simply can’t permit.

Mr. Bullbrook: Mr. Chairman, may I say to the member for Lakeshore, I don’t believe we are obtuse. We are not obtuse. We are not getting answers. We are not getting answers to fundamental questions where the minister -- I say this to him most respectfully -- is attempting to befog us with time elements and with quantum elements. I am not interested in that.

I don’t mean to be melodramatic, but the history of democracy is replete with situations where people uprose as a result of taxation statutes.

I have begun with that premise in criticizing this statute, and every section and every subsection must be critically analysed from the point of view of its impact upon citizens. This is what we have attempted to do.

We are not obtuse. I don’t want the last word for the sake of having the last word, believe me, but it has to be recorded here that we are not obtuse. The fact of the matter is that the minister has not been able to respond directly to our criticism --

Mr. Lawlor: I didn’t think we were obtuse. I thought a little sarcasm might help.

Mr. Bullbrook: -- and he digs in his heels for the sake of digging in his heels.

Mr. Chairman: The member for High Park.

Mr. Shulman: As a member who was here this afternoon, perhaps I can pursue the matter that my colleague has raised. He asked, when you get these applications in next week, how are you going to tell, sitting in your office, what that property was worth on April 9, 1974? If you recall, when I tried to question you about that this afternoon, you said our computer will tell us in a few seconds. But you don’t even have the computer yet. You told me you aren’t going to have it until the end of this year. What is going to happen for this year, 1974? How are you going to tell, sitting in your little ivory tower up there, what that property is worth? Are you going to run out there and take a look at it?

Hon. Mr. Meen: Mr. Chairman, the very simple answer is no, I don’t intend to do that. But we have our assessors throughout the province who have been doing this on an ongoing basis.

I might mention that the member for Waterloo North, I think, mentioned that there were some portions of his riding that were running at about 60 per cent of the current market value. That’s true. That is one of the reasons why we have had to put back the full market-value assessment programme until 1976 for the 1977 taxation year. There has been a tremendously rapid rate of increase in some of the areas that were done at an earlier time.

If my memory serves me, I believe his area was done somewhere in the 1971-1972 era -- perhaps a year or so after that, but some time ago and in the intervening year or two years there is -- well, this is 1974, so that’s about right-1971-1972 I think, there has been such a tremendous escalation that now those assessments that were not, by our figures at any rate at that time, a fair market value, are no longer fair market value and their rate of increase has been such that we are going to have to go back and do them again, and we are doing that now.

Mr. Shulman: You can never catch up.

Hon. Mr. Meen: Just coming back to the basic question of market value assessment, for any question which comes before us and for which we don’t have a current market value assessment done within the last few months, and over the last few months those will automatically bridge the April 9 date in any event, we would have that information available through the assessment office.

Now later on in the year, as I was trying to tell the hon. members, and by about this time next year for all properties in Ontario, we will have this information on a fairly swift retrieval basis through the computer. But presently it would not be out of the computer, it would be on our basis of market value assessment.

Mr. Shulman: What market value? I am no lawyer, but it is obvious to me that the market value assessment is going to be nowhere near either the value or the selling price.

Let us just take -- I keep trying to take concrete examples because not being a lawyer I don’t have the minister’s great intellect or his knowledge of these things; it is slower for me to comprehend. But let’s take a comprehensive example --

Hon. Mr. Meen: Be careful, your sarcasm is showing again.

Mr. Shulman: Let’s take a simple example which even I can understand, and I am sure the minister will explain the fallacy of my thinking to me.

Let’s suppose next month I decide to sell my building on Roncesvalles Ave., and I find a willing buyer. Actually I have been talking to the member for Downsview and I find he is willing to buy the building from me -- and we close the deal, and I make out the value of this building as of the day I am selling it to him which is going to be June 15 to be exactly the same as on April 9, because there really has been no increase in price since then, how in the world are you in your office going to have the foggiest notion what that building is worth or was worth on April 9? What is the use of looking at the assessment? That is not going to help you.

Hon. Mr. Meen: Why not?

Mr. Shulman: Because the assessment happens to be approximately 50 per cent of what the selling price would be. So what is the use of looking at the assessment? I mean, you are talking like a child. I expect a certain amount of intelligence from you.

Hon. Mr. Meen: Mr. Chairman, if the assessment for our purposes, the market value assessment, not the assessment on which the hon. member is presently paying taxes --

Mr. Lawlor: The market value is nowhere near the present value, and never will be and you know it. That is a myth.

Hon. Mr. Meen: Well, I am interested because maybe we should send our people out and just double it. But the point is that our market value assessment will be our indicator for establishing the values on April 9 --

Mr. Shulman: Then you will question every deal that goes through?

Hon. Mr. Meen: We may have to question quite a number of the deals that go through.

Mr. Shulman: You are going to bog down.

Hon. Mr. Meen: On the other hand, let’s face it. At this particular point we have had six weeks since April 9 and I would not expect that there has been a significant increase in real estate values. Indeed, from what readings I have been given, if anything, values have not risen, but may be flat-topping and there may be some indication toward a downward drop in those prices, regardless of what the hon. members opposite have been saying, simply because there are far more houses on the market than there were a month or two ago --

Mr. Shulman: Surely because nothing is moving.

Mr. Lawlor: They don’t move, that’s right.

Hon. Mr. Meen: And if they don’t move, then the vendors will be reducing their prices, and so there will be some reduction in the prices.

Mr. Shulman: Not necessarily, this is galloping inflation.

Mr. I. Deans (Wentworth): Let me ask a question. I don’t know anything about it, except what I read in the paper. And I read in the paper last week that the average value of the average home sold in Metropolitan Toronto had gone from $47,382 in February of this year to $57,876, I believe, at the first of May of this year. That was in three months, an increase of $10,000 in the average price of the average home sold under Multiple Listing. Now where are you going to saw-off? Where are you going to decide?

Obviously the market value of that home, the assessed market value was assessed some considerable time ago, maybe 12 months ago. And at the time that assessment was made, that home likely was worth no more than $38,000 on the free market. So where do you begin to saw-off in determining what, in fact, that particular property would be worth on April 15? This is what we don’t understand --

Mr. Shulman: Nor does anybody else.

Mr. Deans: -- and I think it is quite elemental and I think it is necessary that we understand where we are going before we can reasonably vote on it. It is virtually impossible, with the way the market has developed over the past six months to a year, for anyone to put his finger on any given period of time and say on that date this particular property was worth X number of dollars. We want to know how it is that you’re going to be able to do that, given those kinds of changes. If you were to take this mythical average home sold by the Multiple Listing Service, how would you decide what it would be worth, given that there was a $10,000 appreciation in value from the end of February to May 1? How would you begin to decide what it was worth on April 15?

Hon. Mr. Meen: I will repeat what I said this afternoon --

Mr. Deans: Oh no, not that again.

Mr. Shulman: That is not going to help.

Hon. Mr. Meen: What I’m trying to say is, and what I said then, was that we do have information on sales that occurred at that time, entirely apart from our own mechanism for market value assessment -- that is an ongoing process.

Mr. Shulman: Where is that information?

Hon. Mr. Meen: Teela market surveys -- a number of sources of this kind -- plus our own figures available to us under the Land Transfer Tax Act on all sales that occur where we have the affidavits under the Land Transfer Tax Act attached to every last deed that’s registered. That gives us the market value and by --

Mr. Deans: On those properties?

Hon. Mr. Meen: On those properties that are sold. It is possible to obtain comparative figures for like homes, of like vintage, in the same general area --

Mr. Shulman: How can you do that without a computer?

Hon. Mr. Meen: -- roughly the same size of lot, this kind of thing. Then we can determine from that the way the prices were moving in order to determine what would be a fair market value for that particular house on April 9, if it is one of that very small percentage that doesn’t comprise the home of the vendor or is otherwise exempt under one of the sections. Say it fell under 4(g), where one has to make some improvements, and that kind of thing. You couldn’t rely on that, but you could be looking at other factors in order to determine the amount of any tax that was payable. There are various mechanisms available to the ministry, either through the mechanism of the assessment procedure, which we have for our market value assessments or related sales in the area about the same time of similar homes and so forth, that one can use to attach a fair market value to that property.

Mr. Deans: You obviously must have given a lot of consideration to the kinds of mechanics that are going to be involved in making these analyses because I can imagine -- without too much imagination really -- how difficult it’s going to be to go around and start to make that kind of assessment --

Mr. Shulman: Impossible.

Mr. Deans: -- to dig through all the records to find out a similar home, in a similar area with the same amenities and to try to determine the value of that over and against the value of what’s currently being offered for sale. It really is an impractical proposition. The moment you’ve assessed one of those homes, that will be the basis for every appeal on every single assessment from that day forward.

I don’t understand the appeal mechanism, but any lawyer worth his salt is surely going to take any subsequent assessment that’s higher than that anywhere in the general area and appeal it. And they will appeal it and appeal it and appeal it, and the mechanism will break down. The added cost to the purchaser or to the seller, depending on which it is, has got to be astronomical just simply to process what you’re hoping to accomplish. I frankly think the government is getting itself into one heck of a mess.

Do you know something? I wish you well with it. I really do. I hope it destroys you totally because you deserve it. I don’t mean you personally but quite frankly the government deserves it. To push ahead with a bill with so many obvious flaws you frankly deserve to be defeated on it at some point.

Mr. Lawlor: I take it, in granting the certificate at the present time, what you’re really saying is this: “We have no problems as we see it for the nonce and this may stretch into the next two or three months but the market value as of April 9 is substantially what it will be on Aug. 9.” At least on Aug. 9 you’ll look at the situation and say that it’s shifted a few points one way or another, but at this very moment, that if you brought in the thing there wouldn’t be much of an argument. Your assessors, and others, would nod their heads basically and say: “All right. This is the selling price as of this date, or thereabouts, and it looks pretty much the way it ought to be in terms of a fair market value.”

What bothers me is some years hence in the actual operation and administration of the statute again. Suppose you take the situation where I own the whole house but I’ve rented out three-tenths of the building and I continue to reside in and hold seven-tenths of the building. Without projecting ourselves into the future on that, would your assessors under your suzerainty simply say if the house is selling for $30,000 and you own seven-tenths, then you would take it off the figure which it was actually sold for? If you have any suspicions that it is undervalued you might send an assessor out to take a look at it. Assuming that this is a normal arm’s length transaction brought by contracting parties through an agent or otherwise, I assume that that is what you do.

Then three years from now, if that situation existed, you would be paying a tax of three-tenths of seven-tenths of that increment. Of course, our whole problem is that that increment in 1977-1978 is the very bird at issue. At that particular time, surely you are not telling the people of Ontario, you and me and everybody else in this Legislature, most of whom own property, that we should be very discreet or some other thing to go out and have a land valuation made right now on top of the valuations that some of us had made when the federal government brought in its taxing statute and set the first valuation day. I haven’t got the impression that you were really advocating that this particular process with the cost entailed should be gone through.

Surely there are monumental problems by way of retrospect to be faced now in a number of years’ time to gain that effective date, namely, April 9 of this year. In a very short time, we are going to lose track. Do you think you can retain track? Do you think that your present records are adequate by way of assessment purposes? I must confess it’s drawing a purple herring right clean across the path of this debate even to suggest that the fair market assessment that we talked about at such laborious length during the Smith committee recommendations and bringing them forward has any real relation to the true cost of property.

They have had an assessment made in the Niagara Peninsula. Did you see what they were doing to the Shaw Festival Theatre and its market value assessment? The building cost $3 million. Its assessment at the present was about $487,000, reduced recently to $412,000, saving them a few hundred dollars by way of assessment. Nobody pretends that there are any commensurate figures, and there never will be. By the time you’ve got uniform assessment across the province, the whole situation is altered and you start all over again.

With the rapid escalation of prices that we face you are completely out of date. It would be foolish to start all over again at this stage. You’ll take your market value. You may call them what you please. They are the figures that you have arrived at with some degree of uniformity, at least on the basis of uniform principle as between Fenelon Falls and here, in order to set these market values, but it has no relevance in this debate. I think that you only prolong it by introducing issues of that particular kind.

Mr. Shulman: Wait a minute. You really shouldn’t speak without a quorum. Could we have a quorum call, please?

Mr. Singer: You will find there are 19.

Clerk of the House: There are 18 members present.

The Chairman ordered the bells be rung for four minutes.

Mr. Chairman: The member for Lakeshore has the floor.

Mr. Deans: Whoa. On a point of order, I don’t believe you have a quorum, Mr. Chairman.

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

Mr. Chairman: The Clerk reports he saw a quorum.

Mr. Deans: Just.

Mr. Chairman: The member for Lakeshore has the floor. We are on subsection 2, the matter of a lien.

Mr. Lawlor: I was saying, Mr. Chairman, that in order to get a certificate under this subsection, certain things would have to be proven or certain things established with the ministry. Apart from the infernal nuisance of having to go through the procedure of traipsing up to Grenville St., sitting around, suffering a certain amount of intolerance at being put off and having to come back, the thing that really turns the public off more than bureaucratic controls is more serious.

What I was centrally interested in and the question I am directing is that while the minister may remain a little nonchalant today and say that this is not a pressing issue as things presently stand, it will be a pressing issue in 10 years time when that house comes to be sold, which is three-tenths or seven-tenths or whatever tenth you want occupied. How is one figure going to be set over against another at that time and dated back and assessments made as to capital increment and value increment between those two dates?

Mr. Singer: Is the minister not going to reply?

Hon. Mr. Meen: Not on this subsection.

Mr. Singer: Oh. Not on this subsection. All right, let me try and whet him into action again.

Mr. Chairman: I wonder if I can find out from the committee about the matter before us. The way I read this section, the discussion is on the matter of a lien. I don’t think really assessment enters into this section, the way I read it.

Mr. Shulman: But the minister says it does.

Mr. Singer: Of course it does.

Mr. Lawlor: Oh, but it does. In order to get a certificate from the ministry, you have to prove certain things and values and present evidence. One of the ways in which these values are established is through assessment, so he says. I don’t believe it, but there you are.

Mr. Singer: Let them send you to Mr. Lawlor and he will give you a short course.

Mr. Lawlor: So we get into all this rigmarole because of it. If he is not going to reply, I think we should move the adjournment of the debate or something, just to see what he does.

Mr. Singer: Well, I’d like to pursue another line of inquiry. As I understand the minister, everything is going to be clear and rosy and normal when you get a whole flock of law students in to issue these certificates. I presume the law students are going to be these officers, are they?

They are not going to be the officers. What are the law students going to do? Are they going to assess the applications for clearances? Are they going to give them to these officers who are then going to rely on the law students? We were trying to pursue that on section 5(1) and you told us, by some magic, when you get the computer working you press buttons and the computer is going to come out with the evaluations. You are not going to have the computer working for some considerable time, even if it works.

Now in the meantime you are going to gather law students out of the law schools as soon as they are released, and they are going to come in to the department and they are going to clean up the backlog. Now the backlog, presumably, is going to be cleaned up by officers signing certificates, if the officers can legally sign the certificates, about which I have grave doubt, even though the minister doesn’t. Are the officers -- 35 to 40 -- present employees of the department?

If they are, and if you can legally make them officers, if and when retroactively you give them an appointment by a retroactive regulation, on what criteria are they going to accept the advice of these well-paid law students who have just emerged from Queen’s and University of Ottawa and Windsor and York and University of Toronto, and Western -- I think those are all the law schools -- or maybe you are going to hire them from other provinces, I don’t know, and they are going to sift through all these papers and read the statutes and say: “That’s a good one for a clearance. Here you are, Mr. Officer, give him a clearance.”

What criteria are these law students, who are going to come in and clean up the backlog, going to use if they are not officers, to recommend to the officers that the clearance certificates be, in fact, signed so that the liens, in fact, don’t exist?

Hon. Mr. Meen: Well, Mr. Chairman, the law students of course don’t make the decisions on these things, but they are able to distill down the facts that come in with the applications from the various law firms. And then, based on that, the information would go forward to the more senior assessors and those who are able to ascertain an appropriate value for the real estate and determine whether a tax should be payable. And then eventually through the mechanism of several steps such as that, eventually either a lien clearance certificate is issued or a statement of the amount of tax payable is issued and arrangements made for its payment.

Mr. Singer: How many law students are you going to hire?

Hon. Mr. Meen: Well we have, I think, 11 now.

Mr. Singer: Eleven. Do you have a list of instructions for the law students as to what they are going to do?

Hon. Mr. Meen: Well, I have not entered myself into the mechanism of that department, but I expect that we have either written or oral instructions that would detail the number of steps they take.

Mr. Singer: And are you implying to us that the law students are going to seriously be able to make the determination as to value?

Hon. Mr. Meen: No, I have not said that.

Mr. Singer: Well then, who is going to make the determination as to value?

Hon. Mr. Meen: I indicated that we have assessors in the ministry who will do that.

Mr. Singer: Oh, the assessors now. All right. Well then, you get an application for a clearance from the member for High Park. And he supports it with a letter from good old Joe, his friendly real estate agent. He says in --

Hon. Mr. Meen: No. He says you are prepared to buy his property from him.

Mr. Singer: Well yes, and he has a letter from good old Joe, his friendly real estate agent, who says: “In my opinion the value is no more than it was on April 9.” What is the law student going to do when he sees all that material come in from the member for High Park?

Hon. Mr. Meen: Having regard to the source, he might very well question him, I wouldn’t know.

Mr. Shulman: He is going to have to question every one that is going to come in.

Mr. Singer: Yes, and then what kind of report is he going to make to one of these 35 or 40 senior people?

Mr. W. Hodgson (York North): Have you no faith in our young law students?

Mr. Singer: Not to make decisions like that.

Hon. Mr. Meen: I think this is a rather senseless dialogue, Mr. Chairman. But, in short, he is going to present the information to one of the senior men. They will determine whether an assessment should be made by way of a man attending at the site.

They will determine whether their own information is adequate to support the representations made and, based on this, further discussions might or might not be held.

Mr. Singer: Let me continue this senseless discussion, so described by the minister. I don’t think it’s senseless at all; I think it’s most important. How is the law student or the senior man in the department, happily called an officer -- if you can have retroactive regulation on top of retroactive statutes, which don’t provide for retroactivity, what kind of tests is he going to apply? Somebody tells him that Black Acres is worth $100,000 on April 9. It is now being sold for $100,000 on June 11. What kind of testing is either your law student or your officer going to be able to apply to that? Remember, he hasn’t even got your magic computer to be able to help him. What kind of testing is he going to be able to apply to determine this?

Hon. Mr. Meen: He still has available to him the information in the assessment division, which will help him in ascertaining whether that representation is a fair one.

Mr. Shulman: What good is that?

Mr. Singer: I see. Let’s move from Black Acre to Yorkminster. There is no up-to-date information in Metropolitan Toronto, in the assessment division, which is going to give him the faintest idea.

Let’s presume it’s a house in Yorkminster subdivision in the borough of North York. How is he going to apply any testing because his assessment records are of no value? They are still on the old Alf Gray system -- what was it? -- 17.1 per cent plus 10 per cent or something?

Hon. Mr. Meen: No, for tax purposes they may be on Alf Gray’s old system but within my ministry we have up-to-date real estate values, all done.

Mr. Singer: On every property in the Province of Ontario?

Hon. Mr. Meen: Yes.

Mr. Singer: Come on!

Hon. Mr. Meen: I believe that virtually every property in Ontario is done. It may not be completely current as the member for Waterloo North will tell you. His area was one of the early ones done --

Mr. Singer: Yes, he told us that today when we talked about --

Hon. Mr. Meen: -- and he thinks it may run at about 60 per cent. I don’t quarrel with that; there may well be some that do.

Mr. Shulman: Then what good is it to you? What use is it?

Hon. Mr. Meen: We know the ones running low and we can adjust them as required. The fact is it is quite within the competence of the assessment division of the ministry to come up with fair market values.

Mr. Singer: You are telling me that you know that in Waterloo the value is 60 per cent. Do your records show that?

Hon. Mr. Meen: No, I am saying I would be prepared to accept that. The member for Waterloo North has said it.

Mr. Singer: Yes, but supposing he said it was worth 30 per cent. Would you be prepared to accept that?

Hon. Mr. Meen: No, I would not.

Mr. Singer: No? How do you determine all this? Because the member for Waterloo had said 60 per cent, is that the be-all and the end-all? Maybe he’s right and maybe he’s wrong. I told you I have great respect for him and I would be prepared to take his figures over and above yours, but --

Mr. J. A. Taylor (Prince Edward-Lennox): Let’s hear from him.

Mr. Singer: -- surely that’s no way to run a taxing statute?

Mr. Lawlor: You accept your figures for Downsview --

Hon. Mr. Meen: I would say I happen to know there are some where there is a disparity of 30 to 35 -- maybe upwards of 40 -- per cent, going by current values as opposed to the values of two, three or four years ago when those market value assessments were made. It’s for that reason that my predecessor (Mr. Grossman) announced in this House last October that we were going to have to go back and do some of those again.

It may well be that the member for Waterloo was speaking with considerable accuracy in reference to his own area. I do not dispute that. I don’t say it’s true. I say, if he said it, I might well be prepared to accept it because I do know that in some areas of this province where there has been rapid escalation in costs -- and we don’t have to look at Metro for that; we can look elsewhere and Waterloo might well be one of those areas -- as a consequence we are going to have to go back. We are going back and redoing some of these areas.

There are some which could be as much as 30 per cent out. If the member for Waterloo says his area is one of them, I am not going to disagree with him.

Mr. Singer: Doesn’t that make the whole thing absolutely ludicrous? The member for Waterloo stands in his place and says somebody told him that the values in his county are 60 per cent of actual value and you say, “That’s good. He’s an honourable man -- and so say we all -- and therefore every time we see something from Waterloo, we’ll run in and ask the member for Waterloo.” Will you ask all 117 of us what we think the reasonable value is? I am sure I could ensure my permanent re-election if I could fix the actual values in Downsview merely by consultation and coming up with a figure out of the air.

Mr. Lawlor: The value in Lakeshore is 10 per cent of what you think it is.

Mr. Singer: That’s no way to run a taxing statute. In saying that, I applaud my colleague from Waterloo. He’s a fine gentleman and he’s telling you what’s wrong with the system. Surely, because he has an opinion it’s at 60 per cent of value, it doesn’t fix the basis on which your law students and your 35 or 40 officers are going to determine whether or not to issue a clearance certificate?

Hon. Mr. Meen: No, it does not.

Mr. Chairman: The member for High Park.

Mr. Shulman: I would like to leave this subject just for a moment and come back to certificates directly. Suppose, before the member and I conclude our deal on this property, my lawyer comes in and says we want to get this certificate but no lien is claimed. We supply all the material but we are not going to close the deal for six months. Will you give me the certificate for a date six months hence?

Hon. Mr. Meen: If the agreement of purchase and sale calls for a completion date six months from now and if it’s an absolute airtight agreement that commits you to sell and your good friend from Downsview to purchase six months from this date, the ministry would be prepared to issue a lien clearance certificate or a certificate of the amount of tax that would be payable, computed as of that date.

Mr. Shulman: Supposing it wasn’t complete or an exact sale but just an option; would you still be prepared to do it?

Hon. Mr. Meen: No.

Mr. Shulman: The answer is no?

Hon. Mr. Meen: Yes, the answer is no.

Mr. Shulman: For the life of me, how in the world is anyone ever going to assemble any land?

Hon. Mr. Meen: There might be some difficulty. I am thinking of situations in which one might take an option at a certain time but he would, I suppose, as he was about to exercise the option -- remember its the optioner who is granting an option to the optionee but it’s the optionee who has the right to exercise it, not the optioner. The optioner is going to know to what extent he may be subject to tax if the optionee exercises his option X months from now. You simply wouldn’t grant it at that time; you would grant it at the time when the option became a contract of purchase and sale.

Mr. Shulman: Let’s suppose we come to your little city that you bought down in Nanticoke a few days ago. Your good friends from Revenue Properties were going around, as a public service, optioning the land; let’s suppose that instead of that happening last year, they were doing it this year.

You people wouldn’t be prepared to issue any certificates on that basis. You said so two minutes ago. How could they ever have assembled the land? How could the options have ever been taken out? You know damn well they couldn’t have and no one will ever be able to assemble land in this province again, thanks to your new bill.

Mr. Chairman: We have the --

Mr. Shulman: Is the minister not going to reply?

Hon. Mr. Meen: I have answered the question.

Mr. Shulman: Thank you very much. Goodbye options and goodbye land assemblage.

Mr. Chairman: The member for Waterloo north.

Mr. E. R. Good (Waterloo North): One thing before we decide what we are going to do with this section. As far as getting the certificate on the basis of whether the values are correct or not, to me, is going to be such a hassle that I think it will probably end up it will be the vendor putting in a figure to attract what he considers the lowest amount of tax he can get away, or that the minister will accept. It is going to be impossible for the average man to get valuations, unless he is in the business and has gone out and got professional valuations as of April 10.

This did not happen on federal valuation day, Jan. 1, 1972, as far as capital gains tax goes. I know that in some instances the thing has just been handled with this attitude, “Well, what is the least amount of tax I think that will be accepted by the government, and we’ll put in figures to correspond with that.”

A letter from the real estate officer on the valuation, if it is treated in the same manner in which the assessment review court treats letters of valuation from a real estate appraiser, will not be regarded with any degree of authority by the ministry. I would hope that perhaps it would, but, to my dismay, a few months ago in the assessment review court, they said, “This letter is worthless. We don’t even know if that gentleman visited the property.”

I said it was the basis on which a willing buyer sold to a willing seller. They said it was not notarized and that it wasn’t handled by a professional appraiser. I said, “Well, it was good enough for the vendor to take as his appraisal, and it was good enough for the buyer to take as his appraisal, and the deal was made on that basis. It didn’t hold any water with the assessment review court.

I venture to say that except for people who are in the buying and selling of land as a business, there are going to be very few persons who have established a valid, authoritative legal valuation of parcels which are going to be transferred in years to come, and that valuation on April 10, 1974. So, there are going to be real hassels arising, and I’ve only one question.

Interjection by hon. member.

Mr. Good: Is the onus going to be on the transferor to prove that his valuation is correct, or is it going to be on the government to prove that its reassessment of his valuation is correct? It is interesting to know which way that will go.

Hon. Mr. Meen: Mr. Chairman, I think under taxing statutes it would be consistent if I were to say that the onus would be on the transferor to establish the valuation.

Mr. Good: Yes, that is what I was afraid of. That is what I thought. Be that as it may, I think we are going to find that it is going to be a pretty “dicey” situation trying to establish these values with any degree of accuracy. I would hope that the government’s position would be that it would err on the side of favouring the transferor, especially when it comes to people -- individuals who are transferring small parcels, second homes, investments, farmland and things of that nature to attract as small an amount of tax as possible.

The one thing in this section that does concern me is that, as I understand the debate that has been going on, it is possible to find that where a lien has been established on the land that the lien has been wiped out by a certificate and supposedly a clear title has been given, it would still then be possible, if the tax is not paid by the transferor, to have that lien re-established at a later date on that land. This would then become an encumbrance against the land after the vendor has made his sale and taken off. Is this not the basis of what the argument was earlier?

Hon. Mr. Meen: No. Once the lien has been released --

Mr. Shulman: On a point of order, Mr. Chairman, before the minister replies, I wonder if we could have a quorum?

An hon. member: Not again.

Mr. Singer: Don’t complain. If you can’t keep 20 Tories in here you deserve every quorum call.

Clerk of the House: Mr. Chairman, there are 19 members present.

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

Clerk of the House: Mr. Chairman, there is a quorum present.

Mr. Chairman: The member for Lakeshore has the floor.

Mr. Lawlor: Mr. Chairman:

“The wise old owl sat on an oak,

“The more he saw the less he spoke,

“The less he spoke, the more he heard,

“Why can’t we all be like that bird?”

You heard me did you? Remarkable.

I want to pursue just for a few moments another problem. I want to understand the mechanism and I want it on the record how these certificates are obtained touching the payment of the tax.

Will you grant a certificate, and how do you manage to grant it? If I come up to Grenville St. and say, “Yes, I am afraid we are caught in the net. We are one of the sardines.” I don’t represent the sharks -- they never come to see me -- I know the way out. If they would only come I could make myself a fortune under this bill. I could hold a general opening and gesticulation toward the --

Hon. Mr. Meen: That won’t be legal.

Mr. Lawlor: -- speculation industry in order that they would come to see me. I can get them out of this tax without turning a hair if you will only pay me 50 per cent of the 50 per cent. I will be a millionaire inside two weeks. Why don’t the member for High Park and I go into business?

Mr. Shulman: I have an 18-year-old boy who’s already done that.

Hon. E. A. Winkler (Chairman, Management of Cabinet): He beat you to it, Pat. He beat you to it.

Mr. Lawlor: If you walk in with a cheque, if you estimate what you think is the tax as you have reached either your actual value figure or your fair market value figure, you come in and hand over the dough -- a certified cheque I suppose -- and say, “Here it is, now you give me a certificate.” You agree with the evidence placed before you. Is it possible and on what terms is it possible to obtain the certificate without payment as condition precedent?

Hon. Mr. Meen: Mr. Chairman, I wonder if the hon. member has ever had that type of question come up in the sale of real estate in an estate? The same kind of principle would apply here as if he, as the solicitor acting for the vendor, came in, the arrangements were made, the establishment of a tax was reached, and let’s say the estate didn’t have the money or the vendor didn’t have the money -- he was going to derive it out of the sale. The ministry would accept an undertaking from that solicitor to see to the payment of the amount of the tax out of the proceeds.

That would be one way he could do it. If he didn’t have a certified cheque for the amount of the tax or if he didn’t have security that could be posted, there is the further mechanism that has been recognized for years and which is followed under the Succession Duty Act. This involves simply taking an undertaking from the firm of solicitors acting for the vendor to say that the amount of money payable is paid out of the proceeds when the sale is completed. On that basis the release would be issued.

Mr. Lawlor: Have you any mechanism -- are you anticipating bonding provisions of any kind?

Hon. Mr. Meen: I suppose it would be possible if the covenant of the solicitor weren’t acceptable. Perhaps there was no solicitor acting or someone to whom the ministry could look to with a feeling of confidence that we have been able to look to the legal profession up to now. It might be that a bond was required or that maybe the solicitor for the vendor wasn’t receiving the proceeds.

Under that basis, yes, he would have to look to something like a bond or some other security for the payment of the amount of the tax.

Mr. Lawlor: Do you feel that you have got adequate provision in your statute to provide for that possible contingency?

Hon. Mr. Meen: Yes. I don’t know the subsection offhand, but I am sure we have got it provided for.

Mr. Lawlor: We will take a look at that.

Mr. Chairman: The member for High Park.

Mr. Shulman: I would like to pursue this matter of land assembly, which obviously the minister hadn’t considered before, in reference of this certificate. Let’s again take a specific example. I own a building on Roncesvalles Ave., and there is a company by the name of Meridian which is in me habit of building apartment houses in the city. They decide that this would be a very good area in which to build an apartment house. And so, following their usual routine, they start approaching the various individual owners in the area in order to buy the land to put up their apartment.

They approach me first of all and they say, “Gee, that is a lovely building you have. We are thinking of investing in your area. We would like to buy the building from you, and we will offer you -- it’s worth maybe $50,000, so we will pay you $60,000 for it.” And I would be very tempted to accept. But before accepting, the first thing I would have to do, because I wanted to make sure how much tax I am going to be stuck for, I have to say, “Well, hold everything just a minute. I think maybe I will give you the option you want but I better go to that department down there and see how much tax I am going to have to pay.”

I am going to come down and see you people, and you are going to say, “Well, we can’t give any certificates until you have a definite firm offer; an option is no good.” That’s what you say. So I am going to have to phone up Phil Roth, and say, “Gee, Phil, I am awfully sorry, I would like to let you buy that building, but there can’t be any deal because I can’t find out how much tax I am going to be liable for.”

Now, if the minister will just try thinking ahead one step, what he has done with this section is stopped at one fell swoop any possibility of land assembly.

There is no way that assemblers can go ahead in secret as they always have in the past. They are going to have to send a letter out to everybody in the block, saying, “Hey, fellas, we want to put up a big apartment building there.” Has the minister given any thought to what that will do to land values in that particular block, and ultimately the cost that good old Phil is going to have to pay for his land, and ultimately the rent that he is going to have to charge when those apartments go up? Secret land assembly is finished. There never will be another secret land assembly in this province, with this section.

Have you any idea what that is going to do to rents, presuming that any apartments ever get built again? Would the minister care to comment on this?

Hon. Mr. Meen: Mr. Chairman, the owner of a property is entitled to see what his market value assessment is, and I think that he would be entitled then to come in and see what his property, assessed in his name, stood at on our books as market value assessment, if indeed he has much doubt as to its value. From that, it wouldn’t be very difficult for him to deduce the amount of the tax. I can’t imagine that this is going to place any impediment in the way of any really genuine, willing vendor.

Mr. Singer: Could I ask the minister a question or two? I have sort of been glancing through his colleague’s statement called “Housing Ontario ’74.” Following up this point about options, I turned to the bottom of page 17. It states:

“Private industry will be required to enter into binding agreements with appropriate levels of government which will guarantee the production of the numbers and price ranges of dwellings specified in the provincial regional and municipal production targets.”

And it goes on to one, two, three headings, and (a), (b), (c) and so on. How is your colleague, the Minister of Housing (Mr. Handleman), going to be able to do that unless an option system is available so that land can be assembled, and so that this kind of an agreement can be offered to the Ministry of Housing in order to produce the houses that your colleague is talking about in the statement he tabled?

I wonder the extent to which you knew about this statement when you brought this statute in. There is another section we have already passed it in here. But I thought it was interesting, to improve existing housing stock by directly encouraging the rehabilitation of older housing in deteriorating neighbourhoods. And you have got that 20 per cent figure in here. So I wonder to what extent this statement was co-ordinated at all with what the minister is doing in this statute.

Mr. Chairman: Order please. To the hon. member, I am just wondering how you tied this in to this particular section when we are talking about liens.

Mr. Singer: Oh, it is quite obvious.

Hon. Mr. Meen: Real obvious.

Mr. Singer: Let me explain to the chairman, because the chairman isn’t following me. The object of this statute apparently is to encourage housing. Now, this afternoon we had the Minister of Housing, Mr. Handleman I think his name is, come in with a statement and a policy. And the policy applies in place of what this minister is doing in his statute.

Hon. Mr. Meen: Oh, for goodness sake.

Mr. Singer: Now, when we are talking about lien clearance certificates, the hon. member for High Park elicited from the minister just a little earlier the statement that if there are options, you won’t get the clearance certificates. But a substantial portion of this statement a couple of pages that quickly come to my attention are pages 17 and 18 -- deal with the government dealing with developers. Now how possibly are you going to be able to encourage a developer to get into this kind of action if there are no clearance certificates available so that the developer can know where he is going, and the people with whom he is going to be dealing know where he is going? You are defeating what your colleague said this afternoon in his 50-odd-page statement. Does that make any sense to you? It doesn’t to me.

Hon. Mr. Meen: Well, I can say that the words of the hon. member for Downsview sure don’t make much sense to me.

Mr. Singer: Well, you should pay a little more attention.

Hon. Mr. Meen: If he is going to use that argument, he might just as well talk about agreement of purchase and sale. The vendor under any of those transactions isn’t going to get a certificate from me either, until he has submitted a copy of the executed agreement of purchase of sale.

Mr. Singer: Then you are not going to get any agreements. And you shot two or three pages of your colleague’s.

Hon. Mr. Meen: We can’t be issuing the things on a whimsical basis any time somebody may be thinking of selling his property. And by the same token, if he is thinking of optioning it, the same question would arise.

Mr. Bullbrook: An agreement of purchase and sale is whimsical?

Hon. Mr. Meen: And I would say, Mr. Chairman, in any event that this is completely out of order. It has nothing whatever to do with 5, subsection 2.

Mr. Singer: Oh, come on.

Mr. Shulman: Well, what I am talking about certainly has to do with it, which is the damn certificates, which is 5, sub. 2. I want to come back to what the minister was saying just a moment ago, since he is still reading his crib notes. He suggested that there is no problem if we have a vendor. All he has to do is come down to your office, look at his market assessment value, which we have already found in some areas is 60 per cent of the real value. In other areas it is 80 per cent. In other areas, presumably it is 110 per cent.

But that isn’t really what the problem is. As the minister must be aware, in order to assemble a block of land and get it all together at a reasonable price so that we don’t have a few people holding out and making the cost of land impossible, it has to be done in secrecy. Now you cannot option the land without the people going down and going through all this routine.

There is no possibility of secrecy. And what I am suggesting to the minister is, in effect, the result of this section is going to make land assembly either impossible or so expensive that the cost of rent of apartments in and around this city and for the rest of the province is going to rise astronomically. Now, the minister shrugs me off, and tells me not to worry about that.

Mr. Lawlor: He is going to pass regulations.

Mr. Shulman: He is going to find some magic way to solve this problem, he hasn’t told us what. But it isn’t good enough, you know, to shrug me off as not being a lawyer and not knowing what I’m talking about. This happens to be a factual section he has brought in; the results are very obvious to everyone in this House -- even to the doctors.

Mr. Lawlor: As a layman, I think you do fairly well.

Mr. Shulman: Thank you. And I say to the minister that surely he mustn’t just pass it by. He has to give some consideration to his colleague who sits beside him -- and I wish he was here tonight -- and who is going to have the problem of higher rents, or no apartments available a year or two years from now -- because you are bringing in a silly subsection.

I suggest to the minister he has got to do two things. First of all, he must give the certificate of valuation to anyone who comes in -- as he puts it, in a whimsical way -- and asks for it; because otherwise there aren’t going to be any sales. How can anyone go ahead and make a sale if he doesn’t know how much tax he is going to have to pay?

Suppose I am closing my mythical deal with the member for Downsview, and I say: “Look, I want so much money for it. I think that the valuation as of April 9, 1974, was $50,000 on this property; but I had better go down and make sure before we close the deal, because I have to know how much money I am going to end up with. I have the mortgage to pay off; I have certain other debts that I must settle in connection with this property. So, I’ll go down to good old Art’s office and I’ll ask him how much the valuation is going to be and see if he is willing to accept my figures.”

And, according to what he has just said, I am going to go down there and he is going to say: “Well, I’m sorry, we’re not going to tell you that until you have got a firm deal. In other words, I am not going to tell you how much tax you are going to have to pay until after you have sold the property.

What is this -- Alice in Wonderland? I mean, this is nonsense! I don’t know whether I should laugh, cry, weep, rage or what -- but how can the minister take such a foolish position? Obviously, you must give these certificates on request. And for you to say you are only going to give the certificates after the Rubicon has been crossed, is to dry up the river. Is that a mixed metaphor?

Mr. Lawlor: It is a mixed metaphor; it is a good one, though.

Hon. Mr. Meen: Not really.

Mr. Shulman: Perhaps I should say drain the river. That is a better metaphor; yes, that is to drain the river.

Hon. Mr. Meen: No, “dry up”; that is pretty good.

Mr. Shulman: Will the minister please -- I ask him kindly and with all goodwill. When I looked at him as a backbencher; he looked so wise back there, sitting in the back row -- and he used to nod at the right time.

Hon. Mr. Meen: They always do.

Mr. Shulman: I used to think he was so bright. Just on this one section, just to please me, will he do this one right and say that he will give these certificates on demand?

Hon. Mr. Meen: I don’t think, Mr. Chairman, one could give the certificates on demand because that presupposes the sale price and consequently a taxable amount. But I think what the ministry should consider would be establishing some mechanism whereby any owner could be assured of a minimum figure based on his acquisition on or before April 9, that is the value on April 9 or his later date of acquisition. If he has acquired it at a later date it’s pretty clear just what his acquisition price is so what we’re really talking about, I guess, is just simply those who presently own real estate. That will get less and less as the years go on and as there are transactions that then establish a subsequent date for acquisition.

I think we should be prepared to issue a statement to a registered owner as to the market value, which we would consider to be applicable to his property, if he indicates to us that he is contemplating a sale. That would then give him a benchmark from which he could work but that would not be appropriate in subsection 2 or 5 nor, for that matter, in any of the subsections.

Mr. Shulman: What then?

Hon. Mr. Meen: I beg your pardon?

Mr. Shulman: Is the minister going to bring in some new subsection?

Hon. Mr. Meen: No, I don’t think that’s necessary. I think that would be an administrative thing which the ministry would arrange to make with information available to the applicants on request.

Mr. Shulman: Okay. We’re making a little progress on the subsection. What about the problem of assembly land? How can anyone do it in sequence?

Hon. Mr. Meen: No difference.

Mr. Shulman: There is a big difference. Right now you go and knock on a door -- and we all know how these rapacious apartment buildings do it and they make the whole circuit in a matter of two or three days and get all the land optioned up. How can they possibly do that now?

Hon. Mr. Meen: If anyone is so foolish that he grants an option to somebody on that kind of short notice without talking to his lawyer or thinking about it, or comparing notes with his neighbours, he’s got to be out of his mind.

Mr. Bullbrook: What’s his lawyer going to tell him, my friend?

Mr. Shulman: Now, let’s be reasonable. The minister must surely know how land is assembled in the province. They knock on your door on what street is it, Yorkminster, is it, or did we establish what street you’re on?

Hon. Mr. Meen: I don’t think we ever did.

Mr. Shulman: No, okay, well, on X street. They knock on your door on X street and you know that your property is worth $75,000 -- no, pardon me, as a minister your property is worth $125,000 and this fellow offers you $150,000 with a 90-day option. Of course, you grant the option. Of course you do. You know what the land is worth. You’ve lived there all those years. You know that John Jones down the street sold his six months ago for so much less.

That’s how land is assembled all the time. If it wasn’t done that way no apartments would ever be built. You never would have bought your little buildings, your city down in Nanticoke. That’s the only way land can be assembled at a reasonable price. It can’t be expropriated for a private owner.

Now, in effect, this is no longer possible and you pass it by and you won’t comment on it. I’ve had the opportunity in the last few days of phoning the owners of the largest apartment complexes in this city and I’ve picked their brains and their feeling is that there isn’t going to be any more apartment building in Ontario, certainly not in the Toronto area.

Of the sections quoted, there is another section further down which is perhaps more pertinent to the point, but this is one of the sections quoted: “They say land assembly is no longer possible except by doing it publicly,” which means land assembly is going to be two, or three, or four, or five times more expensive than before which means that rents are going to be 50 per cent or 60 per cent higher than before. This is not my brainwave. This came from one of your loyal Conservatives who is one of the largest apartment builders in this city.

You can shrug my thoughts aside. You can shrug his thoughts aside, but that’s a fact. And it’s going to happen and the apartment builders are aware or it. And the word, and I give you the word from on high, is that no one is going to be able to build apartments. Pass it by. Shrug it off. It is on the record again for your future demise.

Mr. Chairman: Those in favour of Mr. Burr’s motion will please say “aye”.

Those opposed will please say “nay”.

In my opinion the “nays” have it.

I declare the motion lost and the subsection carried.

Subsection 3, any comments? The member for Lakeshore.

Mr. Bullbrook: Trying to wear us down.

Mr. Lawlor: Mr. Chairman, on 3, the affidavit section, I was just a little bemused as to how this affidavit that has been supplied to the profession will be filled in. I suppose the most used clause of them all, whereby the tax would be escaped is 4(e), the principal residence section, and they have been filling them out and appending them to deeds. It says, section 4, clause (e), clause 1, subclause (e), but now that you have altered (e) --

Hon. Mr. Meen: Who altered (e)?

Mr. Lawlor: There is an amalgam here.

Hon. Mr. Meen: Who altered (e)?

Mr. Lawlor: You have added very considerably to it on the --

Hon. Mr. Meen: Just an addition.

Mr. Lawlor: -- on the partial residency features, where only part of the designated land disposed of is ordinarily inhabited by the transferor -- you certainly can’t; you are getting a mix now. You are going to have to segregate out somehow or other how to fill out the affidavit. Don’t you think there is a problem connected with this?

Hon. Mr. Meen: Well, subsection (e) was broadened by giving the benefit of the portion which hadn’t been in the section before. I don’t think there is any problem. Affidavits that were sworn prior to that presumably were relating to the whole of the residence, and now under (e) it permits the apportionment. There is no problem under sub 3 of 5 with respect to that particular subsection.

Mr. Lawlor: Well, as your original bill came in, upon which this affidavit was drafted, the thing was clear, pellucid, no problem. It simply referred to principal residence. Having sub-added an exemption, and if you or my client would fall under that particular exemption and have a partially rented premises, I simply can’t appeal any longer to 4(e), that is for sure. I wonder if I can mention 4(e) at all in this regard since it contains a number of features which would seem to me to confuse the issue. If it were simply principal residence, you would say so. But if you have a tenant under this particular regard, you say 4(e), but not exempt because falling within your addendum.

I think you have got problems trying to make up this affidavit and to submit it, not if it is a principal residence. I agree with you there; that is clear, you just fill it in. I am sorry, maybe you do there too with respect to the crunch in the altered (e) subclause, but certainly if they happen to have any tenants in that regard of course you can’t use the affidavit at all. You are going to have to go down and get a clearance from you I guess. That is the only way you can operate.

Mr. Chairman: Shall section 3 stand as part of the bill? The member for High Park.

Mr. Shulman: Well, I just wanted to look into this section a little bit because sections that invite people to become crooks are always intriguing to me. And if ever I saw a section that invited everyone to become dishonest, this is surely it.

Let’s suppose my name is Hugo Fidinam and I live in Lugano, Switzerland, and I have invested some millions of dollars here in Ontario in balmier days in apartment houses. Let’s suppose I own a great big apartment house near Bay and College, we’ll say, just below College on Bay. And let’s suppose I suddenly read the news coming out of Queen’s Park and I realize that the situation for investment isn’t quite so hot over there any more. In fact, it is becoming positively unfriendly.

I think it is time to get out. Around about Jan. 1, 1975, the housing market unfreezes a bit and I find a foolish buyer is willing to buy my apartment house and I say, “My goodness gracious, I am going to have to pay half a million dollars in tax to that ungrateful government who don’t even consider all I have done for them.” Don’t leave, Mr. Minister.

Mr. Lawlor: He is going to Lugano, Switzerland, to talk it over.

Mr. Shulman: Is Fidinam here? Are you going to ask him if he is really going to do that? We are losing the minister, Mr. Chairman. Do something. If he loses us our quorum -- if he causes the quorum to break -- I think I had better --

Mr. Morrow: We are listening.

Mr. Shulman: Yes, but you are not going to be able to answer me. If you promise to answer I will continue, okay? All right, the former Speaker is going to promise to answer.

Let’s suppose good old Hugo over in Lugano -- I hope I don’t have to repeat all this tomorrow -- swears an affidavit saying that apartment house is his principal residence. According to this section there is not going to be any tax payable. What are you going to do about that?

Mr. Morrow: He would not have to pay a tax.

Mr. Shulman: The hon. member would not have him pay any tax? Okay. I am glad that the former Speaker agrees with me that there is a massive loophole in this bill. Oh, here he comes. Here comes the minister again. In his absence I hate to tell him what happened.

Mr. J. M. Turner (Peterborough): Go ahead. Tell him.

Mr. Shulman: I hate to say this, but the former Speaker of the House chose to answer and I don’t think the minister is going to like his answer very much. I will recapitulate the facts, because you may have a different answer.

Hon. J. T. Clement (Minister of Consumer and Commercial Relations): Let him read it tomorrow.

Mr. Shulman: Yes, you should read it in Hansard tomorrow. If you had been here you would have heard it.

The situation is this: Hugo Fidinam, whose home is at 23 Plattsdam in Lugano, which is just across the border from Italy in Switzerland, owned this apartment building which he bought when he thought all was well in this province. It is over on Bay St. He has decided, looking at the news coming out of here, that things aren’t so hot in Ontario any more for speculators -- in fact they are not so hot for anybody in the real estate field, but especially foreign speculators -- and that it is time to get out. He searches around and finally finds a buyer.

Things aren’t quite so good but he does find a buyer. Let’s say a year from now the deal goes through and he realizes that because of inflation and all of these other problems -- because of the housing shortage and the apartment shortage that you have managed to produce by that time -- prices are going to be very high for apartment houses. He realizes if he sells he is going to pay half a million dollars in tax to you people.

He says: “Those ungrateful Tories, after all we did for them, it really isn’t right we should give them this additional donation.” So instead of that he writes a little affidavit from Lugano as the owner, and says “I, Hugo Fidinam” -- how is it worded here? -- “swear the special lien confirmed by this Act does not apply because this is my principal residence.”

You yourself have said that when that type of paper comes in there is no way that all your law-student assistants, assessors and various other minions have any possibility of checking them all. This is going to be part of the 95 per cent. That is going to be automatically rubber-stamped and that is going to go through and about four years later or maybe four months later or maybe four minutes later you are going to discover that you have been had. Somebody is going to get up on this side of the House and say Fidinam did you again. You are going to say “Well, that dirty fellow. We are going to get the tax out of him.” Perhaps you could send a cabinet minister over to Lugano and say, “Fella, please give us the tax. We would like to have that half a million dollars.” And he is going to say, “Come on over here and get it.”

This is just an open invitation for every foreign owner of real estate in this province to defraud the government. Why shouldn’t they? A bill drawn up so badly -- they are over there -- you have no legal recourse. They don’t want to invest in this province ever again anyway. What is to stop them from getting out, giving you your affidavit and that is the end of it and there is nothing you can do?

Hon. Mr. Meen: Mr. Chairman, I find it incredible that a member of this Legislature who has had a hand in the framing of quite a number of bills in the last few years, since he was elected on Oct. 17, 1967, should suggest that somebody, simply because a piece of legislation didn’t agree with him, should openly flout it, swear a false affidavit, presumably in collusion with a purchaser. If that were the case, even the purchaser would be caught with the lien. I am astonished; I am just plain --

Mr. Shulman: How, how?

Hon. Mr. Meen: Take a look at section 6, for goodness’ sake.

Mr. Shulman: I have.

Hon. Mr. Meen: I am astonished that a member of this House would suggest that a false affidavit would be an appropriate way to defeat this bill.

Mr. Lawlor: Oh, mollycoddling! Don’t go sanctimonious on us. Crocodile tears!

Hon. Mr. Meen: It leaves me speechless that somebody should say that, even the member for High Park. I would suggest that all this does --

Mr. Shulman: On a point of privilege, Mr. Chairman, we know the minister is having some difficulty in understanding what we are saying on this side. We expect him to pay a little bit of attention. What I said was not that anyone should do it, but that many foreigners would do it. Please pay attention. Don’t walk out in the middle of my speeches and then come back and say I said something else.

Mr. Chairman: Order, please. That is no point of personal privilege.

Hon. Mr. Meen: Any provision for an affidavit could be suggested by the hon. member for High Park to be an open invitation to a fraudulent affidavit, but I suggest to him that that is not the case in this country. I think we are entitled to assume that by and large, people will not swear false affidavits.

In any event, this does not wipe out the claims for tax. It merely clears the title so that a purchaser, accepting an affidavit, just indeed as that purchaser accepts an affidavit sworn by the transferor in a conventional transaction. Let’s say he is an unmarried man, and therefore there is no dower attachment in the title. Purchasers accept that too, but the hon. member for High Park would suggest that that is an open invitation under the Registry Act for unscrupulous husbands to convey their properties away and defeat the dower interest of their wives.

Mr. Shulman: Don’t you think they do it all the time? Is the minister suggesting that doesn’t happen?

Hon. Mr. Meen: But the fact is that in this instance we are saying that the purchaser who takes title without notice of am defect in this, together with an affidavit sworn under this section, can take title free of the lien. The lien does not attach. He takes it free and clear, provided he is not in a collusive arrangement with the vendor, which is provided for in the next section 6, which we will get to eventually. But there is no lien; it does not wipe out the claim for the tax.

Mr. Bullbrook: It doesn’t wipe out the claim for the lien either.

Hon. Mr. Meen: In this hypothetical case of Hugo Fidinam, if Fidinam has other assets that are exigible, then the tax would be recoverable or exigible against those other assets here in Ontario -- and I presume in that instance there are certain other assets of the gentleman.

Mr. Shulman: Mr. Chairman, I presume the minister hasn’t read the bill. He said if we look at section 6, that problem will be solved. Section 6 does nothing. As far as the vendor goes, all it says -- and we shouldn’t be jumping ahead of ourselves -- the argument he has brought in here -- and I read section 6, which is very brief:

“Where the result of one or more sales, exchanges, declarations of trust, or other transactions of any kind whatever is that a transferor has disposed of property under circumstances such that he may reasonably be considered to have artificially or unduly reduced the amount of the taxable value of designated land that he has disposed of, the taxable value shall be computed as if such reduction has not occurred.”

It doesn’t say a word about the purchaser being responsible. Has the minister misinterpreted that section too? Is he really suggesting that section suggests that the government could then go after the purchaser of that apartment house. Is he really suggesting that?

Mr. Chairman: Subsection 3.

Mr. Shulman: No, wait a minute. I asked a question.

Hon. Mr. Meen: Wait until we get to section 6.

Mr. Shulman: The minister brought up section 6, not me.

Mr. Chairman: We are not really discussing section 6.

Mr. Shulman: The minister said section 6 covers this subsection.

Mr. Bullbrook: Why don’t you let the member debate the argument on section 6?

Mr. Chairman: We are not debating section 6.

Mr. Shulman: The minister can’t get up and give an answer that something is covered in section 6 when it is not covered in section 6. What kind of nut house is this?

Mr. Gilbertson: You are making it a nut house.

Mr. Bullbrook: The minister brings up the argument about section 6, and he talks about section 6 as --

Mr. Shulman: Mr. Chairman, I appeal to your common sense.

Mr. Lawlor: That is dangerous.

Mr. T. P. Reid (Rainy River): Try something else.

Mr. Shulman: Will the chairman reconsider his ruling? Will the minister reconsider everything?

Mr. Chairman: Section 6 is not on debate. It is indicated, according to my hearing, and I think it is correct, that your question could be answered under section 6.

Mr. Shulman: Well, are you going to suggest that we have to come to section 6 before we discuss this, which has nothing at all to do with section 6?

Mr. Chairman: Shall subsection 3 stand as a part of the bill?

Mr. Shulman: Mr. Chairman, let’s come back to the first principles. I am sorry the minister got so upset, but he has had a bad day. He has had a bad year. He is going to have a worse year before we have finished.

Let’s come back again. Ill now take the example the minister took -- and I presume I am out of order, because we were discussing another bill entirely; and this is husbands who transfer things into other people’s names. I won’t even say which member it was on his side. I don’t want to embarrass him. But someone sitting not very far from him was pointing to himself when he was talking about transferring assets. Of course, husbands do that all the time. Doesn’t the minister know about that?

Hon. Mr. Clement: I was pointing at the hon. member for Waterloo North.

Mr. Shulman: Sorry. I misunderstood your comment. You know, any lawyer in this House who has practised must be aware that when you set up a section that invites people to commit fraud, they will commit it. There may be one or two angels who will not. There may be a few others who are afraid they are going to get caught. But those who don’t care about getting caught, and that includes all the foreign owners, of course they are going to do it.

And don’t come back and say, “I am telling them to do it.” They know what they have to do to defeat the dumb provisions of this bill -- and they will do it. This is set up foolishly. And you can’t pass it off by taking your high moralistic tone and saying, “The member for High Park is giving people bad ideas.”

Mr. Lawlor: That was a bad tactic.

An hon. member: Well, we already know about it.

Mr. Shulman: Are you suggesting that Hugo Fidinam isn’t going to know how to defraud the government? He has enough experience.

Mr. R. F. Nixon: Hugo has been making out fairly well around here.

Mr. Shulman: He may have to -- to make sure they don’t look for a while -- he may have to give a little donation.

Mr. Lawlor: Hugo is one of the most important men in this assembly.

Mr. Shulman: Now I am telling you, Mr. Minister, that there will not be a foreign owner of land -- and they will clear out of here -- who will pay this tax. They will get their little secretary, who has an $80 a week job down in Lugano, to write out a false affidavit. That little secretary isn’t under your jurisdiction, anyway. It is going to be wholesale fraud -- and you are inviting wholesale fraud. You can’t pass this off by saying it is all my fault, because somehow I think I had very little to do with drawing up this section.

Now, I suggest in a more friendly tone, Mr. Minister -- and I give this as my gift to the minister -- I hate to see a bill that is entirely bad, subsection by subsection. Let’s have one subsection of one section done right, just to confound our lawyers -- so they can’t hold that bill up and say: “It’s all wrong.”

This way, if you get this one right, I’ll get up and defend you. I’ll say: “He did one subsection right so I don’t want my friend condemned as having a bill that is totally wrong.” Let’s get one subsection correct.

Mr. Chairman -- and I give this only from the generosity of my heart and my friendliness to the minister and our long, pleasant acquaintance over the years; which I hate to see going down the drain. Now, obviously, the only persons who can be allowed the use of subsection 3 -- and it is obvious to me; and if the minister thinks about it, it will be obvious to him -- are residents of this province. Will the minister agree with me on that? The minister has had a stroke.

Hon. Mr. Meen: No, the subsection is certainly intended to free the lien in virtually all the cases, in as much that we have spelled out a number of exemptions. This should make it a fairly easy matter for most of the legitimate transactions to flow through; and most, by our estimation, anyway, can be cleared simply by the affidavit anticipated under the Act.

Mr. Shulman: The minister didn’t hear my question. He was in a catatonic state. Let’s try again. I suggest to the minister the section is essential, because this will clear 95 per cent, you say. Actually, it is much lower. It will clear a very large percentage of the cases. But obviously, it cannot be allowed to apply if the vendor is not a resident of this province, for the simple reason is you will never collect the tax.

Now, the suggestion I make to the minister again -- I say to him that if he didn’t understand me before, I’ll do it very, very slowly -- I suggest to the minister he must amend this subsection so it only applies to residents of this province. You see, residents of the province you can still catch. We are here. If we commit a fraud, you have other ways of getting at us. If we put out a false affidavit, you can charge us with something or other. If we get away with some tax we didn’t pay, you can come back and grab our other assets. But if our name is Hugo Fidinam and we live in Lugano, you can’t.

So I suggest to the minister -- in the most friendly way -- do one section right. Why should they get up at the next bar convention and say, “He did every section wrong”? Add a few words at the end of the section saying, “This subsection only applies to residents of this province, those who have their principal residence in this province.” Will the minister consider this gift from me? I really feel that way on the subject.

Hon. Mr. Meen: Mr. Chairman, that’s an interesting thought. I don’t know whether it’s practical to add it in right here, or indeed if it is practical at all, because it would change the general mechanism, I suspect, but let me reflect on that for a minute or so.

I don’t think that it needs to be in subsection 3. One could have a saving provision anywhere, I would suppose, in this Act, that would apply to that -- and I’m thinking out loud again -- as to whether that will throw a proverbial monkey wrench into a lot of these transactions we would like to see go through reasonably smoothly. The non-resident vendor of any real estate would have to then submit his deed and other papers to the ministry for vetting, whether the transaction fell under the general area we contemplated or not.

Mr. Lawlor: That’s right That would be a good move.

Hon. Mr. Meen: I’d like to ruminate on that, Mr. Chairman. What we might do, if the hon. members wish, would be to leave paragraph 3 until tomorrow and we could go on with sub-paragraph 4 while I cogitate on whether there is some merit to the hon. member’s suggestion.

Mr. Shulman: Mr. Chairman, I am struck dumb. This is the first suggestion he’s even been willing to cogitate upon. I am overwhelmed with the moderation --

Hon. Mr. Meen: Don’t lay it on too thick.

Mr. Shulman: -- but perhaps tomorrow he’ll turn it down and restore my faith in the government.

Hon. Mr. Clement: Quit while you are ahead.

Mr. Chairman: Subsection 3 then, is it stood down?

Mr. Lawlor: Mr. Chairman, I would ask for your indulgence and that of the minister on just a couple of points under 3, which go to some degree in the clarification of this. I incidentally thought, with the pillorying you are taking in this particular matter, wouldn’t it be a wise idea for you to apply for a much easier ministry, like the Ministry of Labour, and get yourself off this bed of nails?

Mr. Shulman: Health would even be better.

Mr. Lawlor: I am sure you have your application in, Mr. Minister.

What I would like to know is, and I would like your considered opinion on this, if a deal such as the member for High Park put to you was going through, what in your opinion is the obligation of the solicitor acting on behalf of the purchaser of that building? He knows it’s an apartment building and he knows it can’t be a principal residence, having a diversity of other residents.

If, through some reason or other, the matter gets into your department and a certificate is granted, and if he is handed a certificate or it’s placed on the deed or on title or wherever its placed, he is not going to question it. He’s happy to have the certificate. But if the affidavit is presented to him on closing, he is going to ask, “How can you possibly make up an affidavit of this kind?”

Is he under an obligation at that stage to question, to hold back, to renege, to refuse to close? I’m not just talking about a moral obligation, I am talking about an obligation in law, and I ask for your opinion under the terms of this section.

Hon. Mr. Meen: Well, put yourself in the position of the solicitor acting for the purchaser of an apartment building. One of the things you’d have in front of you would be an offer to purchase that recited that there were 48 apartment suites, let’s say, in that apartment building, their average rental was $235 a month, the Hydro bills averaged so much monthly, the taxes were so much and the insurance rates so much, all the usual things that you would see in an agreement of purchase and sale. Furthermore, before you closed, if you weren’t buying the shares to the company but rather taking the deed of conveyance to the real estate, you’d be insisting that the vendor’s solicitor provide you with notices to all the tenants of the sale of the property and the assignment of the leases --

Mr. Lawlor: I am sorry, Mr. Minister, we know all this.

Hon. Mr. Meen: You can see all this, so what I am coming to is -- and I have listened very attentively to the hon. member for Lakeshore -- you can paint a picture where it is virtually inevitable that the solicitor for the purchaser knows full well, as does his client, that the affidavit attached to the deed that says, “This is the principal residence” is a false affidavit.

Mr. Lawlor: What is his responsibility?

Hon. Mr. Meen: I would say in that case then that a lien would still attach. No, excuse me, the lien, I think, is gone by the nature of the affidavit, but the moneys would be recoverable against the purchaser just as though he had been the vendor. I think that’s the way that would work in that set of collusive circumstances.

Mr. Shulman: Perhaps we could pursue this a little further. The example I took was of course a far-fetched one, to make it obvious how foolish the whole thing was. Let’s suppose instead of being an apartment house on Bay St., it’s one of the big rooming houses on Russell Hill Rd., which is not quite so obvious. How in the world is the solicitor to be aware, and if he has suspicions, is it his responsibility to play detective?

Hon. Mr. Meen: It comes a question of fact again. What are the representations made? Is he or is he not and is the purchaser or is the purchaser not in collusion with the vendor on this matter, Mr. Chairman?

Mr. Shulman: Boy, that is going to be a tough one to prove.

Mr. Chairman: Subsection 3 is set down until tomorrow. Are there any comments, questions or amendments on subsection 4?

Mr. Shulman: Do you want to go into that now?

Mr. Chairman: If there is going to be a lengthy discussion, it is hardly worth while getting started.

Mr. Shulman: It won’t be more than half an hour.

Mr. J. R. Breithaupt (Kitchener): Mr. Chairman, I think at this particular point it is time for the committee to rise and report, if the minister were so minded.

Hon. Mr. Meen: No, I think we have three minutes we can usefully use.

Mr. Deans: We actually don’t because the House has to rise at 10:30, so the committee must rise and report before 10:30.

Mr. Chairman: The member for High Park.

Mr. Shulman: I’m perfectly willing to begin. In subsection 4 it says, in case you are going to grab the property under this section, you have to send out registered letters to everybody in sight who has an encumbrance. What I don’t understand, after reading down the very subsections that follow, is what in the world is the use of the registered letters? The only way the person receiving the registered letter can do anything about it is by paying the lien. Having paid the lien, that doesn’t give him a first call. All that does is add to his call whatever it is. It may be a third call, a fourth call or a fifth call.

It’s obvious you’ve made an error in this section. Every bill can’t be perfect. You’ve made one little error here. Perhaps we should fix up this error, Mr. Chairman. Would the minister care to comment on that?

Hon. Mr. Meen: Mr. Chairman, I don’t think there is an error in subsection 4, section 5. That’s simply a requirement which we’ve inserted in this bill, that notice go to the owner and all others with any apparent interest in the land before any such process is begun under the other subsections, with the authority in the subsequent sections for the sheriff to sell pursuant to warrant, and then the other sections deal with the proceeds of the sale and so on.

Section 4 just makes sure that anyone with an apparent interest in the title is advised of the process that’s under way.

Mr. Shulman: That’s very kind of you to advise them, Mr. Chairman. But what’s the point of advising them if they can’t do anything about it? Obviously, you are advising them for some purpose. I presume it’s for more than a make-work reason. Or do you want them to come to the sale to watch their property disappear?

If you are advising them, you are advising them so they can protect their interest. The only way they can protect their interest is paying off the lien. If they pay off the lien, they should get priority as far as that amount goes, and you are not giving them that.

Hon. Mr. Meen: Indeed, if they paid off the lien, the Crown exerts no priority. It has been paid and so then they have their usual remedy.

I move that the committee rise and report, Mr. Chairman.

Mr. Shulman: I’m right in the middle of my argument. You always cut me off.

Mr. Chairman: Order, please.

Hon. Mr. Meen moves the committee rise and report.

Motion agreed to.

The House resumed; Mr. Speaker in the chair.

Mr. Chairman: Mr. Speaker, the committee of the whole House reports progress and asks for leave to sit again.

Report agreed to.

Hon. E. A. Winkler (Chairman, Management Board of Cabinet): Mr. Speaker, before I move the adjournment of the House I would like to say that tomorrow we will proceed with the consideration of this bill. Inasmuch as the Ministry of Natural Resources has concluded its estimates this evening, I will call the estimates of the Ministry of Colleges and Universities in the standing committee.

Mr. I. Deans (Went worth): May I just ask one question please? Is it still the intention of the government to proceed with Treasury in the House at some point in the near future or does the House leader intend to revert back to Agriculture?

Hon. Mr. Winkler: No. If one could look far enough ahead, I would say that for the next ministry in the House I will revert to the previous one and call the Minister of Agriculture and Food (Mr. Stewart).

Hon. Mr. Winkler moves the adjournment of the House.

Motion agreed to.

The House adjourned at 10:30 o’clock p.m.