Legislative Assembly of Ontario

The House met at 2 o’clock, p.m.

Prayers.

Mr. E. M. Havrot (Timiskaming): Mr. Speaker, I am proud to welcome 80 students and eight adults -- 60 students seated in the east gallery and 20 in the west gallery -- from Ecole Intermediare St. Michel, in New Liskeard in the great riding of Timiskaming. I ask the members present to welcome our students.

Hon. J. R. Rhodes (Minister of Transportation and Communications): Mr. Speaker, I am pleased to have this opportunity to introduce to you, and through you to the hon. members of this Legislature, 34 grades 7 and 8 students with their supervisor. Sister Adeline Ryan, from St. Ann School in Sault Ste. Marie, who are seated in the east gallery.

Mr. Speaker: Statements by the ministry.

TORONTO ISLAND AIRPORT

Hon. Mr. Rhodes: Mr. Speaker, because of a series of misleading and inaccurate statements and questions which have been made, both in this House and elsewhere, I should like to advise the members of the facts as they relate to the Toronto Island Airport and the involvement of my ministry.

During the past 10 years, there have been a large number of reports issued on the island airport. Many of these have dealt with the question of converting the island airport into a STOL airport, while others have recommended using this location for other purposes, for example, the concept as proposed by the Toronto Harbour Commission. Some of the information contained in these reports is contradictory.

The responsibility for air transport rests solely with the federal government. But in March, 1972, it was agreed that the federal and this government would examine the utilization of the existing Toronto Island Airport for short takeoff and landing aircraft as this technology develops. A federal Ministry of Transport report, dated November, 1973, concludes that from a technical viewpoint STOL aircraft could operate into the island airport under instrument flight rules using the latest navigation and approach aids.

The Toronto Harbour Commission, which is responsible for the operation of the airport, has faced a financial deficit for some years with the accumulated deficit now being in excess of $1 million. This year it is estimated that their deficit will be approximately $300,000, and they have indicated that without financial support from the federal, and possibly the provincial government, they will have to consider closing the airport at the end of 1974.

Faced with this impending action and recognizing the strategic location of the island airport from a transportation point of view, the Ministry of Transportation and Communications, in order to better appreciate the recommendations which had been made over the past 10 years, and so that their implications on various levels of government and other interested groups could be identified, agreed to participate in a Toronto Island Airport committee.

The fact that this ministry agreed to chair this committee should not be misconstrued as meaning that it has the prime responsibility or role, but rather it has simply accepted the job of a co-ordinator. It has been stressed from the outset that this committee’s concern lies only with the assembling of various technical documents, analysing them, and through this process identifying the options available for the island airport, together with the consequences and various courses of action.

In March, 1974, the following agencies were invited to apoint a representative to this technical committee --

Mr. S. Lewis (Scarborough West): By whom?

Hon. Mr. Rhodes: -- the federal Ministry of Transport, provincial Ministry of Transportation and Communications, Metro Toronto, city of Toronto, Toronto Harbour Commission, Central Waterfront Planning Committee, Metro Toronto Board of Trade --

Mr. Lewis: Why? Why the board of trade?

Hon. Mr. Rhodes: -- and the Ontario Aviation Council.

From time to time, the committee received requests from special interest groups to be allowed to attend the meetings. However, the committee felt that conducting such technical investigations in a public forum would have a negative impact on the committee’s effectiveness.

It was agreed, however, at the third meeting of the committee that the minutes of the meetings would be made available to these interested parties. In an attempt to bring these interested groups up to date with the progress of the committee, the chairman undertook to prepare a summary of the proceedings, which has been distributed. This summary is not a direct copy of the minutes.

Mr. J. R. Breithaupt (Kitchener): It certainly is not!

Mrs. M. Campbell (St. George): It certainly is not!

Hon. Mr. Rhodes: However, it does contain all of the essential and basic points that were discussed.

Mr. J. A. Renwick (Riverdale): It does not. Every one of Ald. Heap’s points was deleted in those minutes.

Mr. Lewis: Who is the chairman of that committee?

Hon. Mr. Rhodes: In creating this summary there was no attempt to distort the facts or mislead people as to the committee’s considerations. I shall, however, be pleased --

Interjections by hon. members.

Mr. Speaker: Order. Order.

Hon. Mr. Rhodes: -- to recommend to the committee that it make available to the interested parties copies of the full minutes of this meeting if they so wish.

Since all levels of government and agencies that have a direct involvement in the island airport have been invited to sit on the committee, and further, since all interested parties are receiving a summary of the proceedings, it is difficult to understand how anyone can claim this is a secret committee. It must also be made abundantly clear --

Mr. M. Cassidy (Ottawa Centre): It sure wasn’t working in public.

Hon. Mr. Rhodes: -- that this is not a provincial committee, but that the province is only co-ordinating the efforts of those involved.

Mr. Renwick: The minister said it was a secret committee. He said public hearings would have a negative impact on its effectiveness.

Mr. Speaker: Order, please. Order.

Hon. A. Grossman (Provincial Secretary for Resources Development): Ask those questions during the question period, on the opposition’s time.

Mr. Speaker: Order.

Interjections by hon. members.

Hon. Mr. Rhodes: At this point, the committee has identified five options, as follows:

1. Use the existing island airport for other than aviation activities.

2. Maintain the status quo -- training and general aviation under visual flight rules.

3. Develop the present site for STOL instrument flight rules commercial operations, and move training and general aviation to a mainland site as required.

4. Develop the present site for STOL operations and move general aviation to another waterfront site.

5. Locate both general aviation and STOL operations to a site at the eastern headland under instrument flight rules.

When options 4 and 5 were discussed by the committee, the representatives of the Toronto Harbour Commission and the Central Waterfront Planning Committee pointed out that these alternatives were beyond the terms of reference of the committee, and that any serious consideration of option 4 and 5 would require an extensive impact analysis and further detailed studies involving participation by all interested groups. This was agreed to by the committee as a proper course of action.

No comment was made regarding options 4 and 5 by the official representative of the City of Toronto, who has only attended for part of one meeting since the committee first met on March 18.

To date, neither provincial nor federal representatives on the committee have expressed a preference for any option, and the committee is still in the process of assembling all pertinent technical data related to each of the alternatives.

I should like to emphasize that the so-called “confidential” report referred to in the media by Ald. Dorothy Thomas, and which allegedly calls for a “general aviation” report on the eastern headland, is, in fact, a draft summary of previous reports prepared over the past 10 years as a basis for discussion by the committee at its next meeting.

I will not speculate as to why Ald. Thomas has chosen the approach she has, but I can assure the House that no decisions have been taken by the committee or by any level of government that I am aware of, and certainly not by this government. Indeed, a decision on an expansion of the existing airport or the building of a new airport on the Toronto Island is not one which the Ontario government can make. That decision rests solely with the federal government.

Mr. Cassidy: If it is brought out in public the minister recoils.

Hon. Mr. Rhodes: The committee chairman has set a target date of July 1 for completion of a report summarizing the available options, and this report will be submitted to the executive officers of those governments and agencies involved. It is hoped that the information contained therein will enable the responsible levels of government to decide on an appropriate short-term course of action in light of the immediate decisions required on the existing Toronto Island Airport. The decisions reached will undoubtedly have an important bearing on the long-term future use of the airport.

Mr. Cassidy: Will that report be made public?

Hon. Mr. Rhodes: At such time as the report is submitted, I shall be pleased to table in the Legislature copies of all reports and studies which the committee has considered in arriving at its conclusions.

Mr. A. J. Roy (Ottawa East): How many pages did the minister forget to read?

POLICE RAID ON HOTEL

Hon. G. A. Kerr (Solicitor General): Mr. Speaker, I would like to make a statement to the Legislature, as a result of a question by the hon. member for Downsview (Mr. Singer), regarding the police raid that took place on May 11 last by officers of the Niagara region.

Interjections by hon. members.

Mr. Cassidy: Changing his tune, eh?

Hon. Mr. Kerr: The raid was carried out by 53 officers -- 10 RCMP officers and 43 from the Niagara force, including two policewomen.

In order to provide the necessary background, I should tell hon. members that in October, 1973, the mayor of Fort Erie requested police action to control drug trafficking in that community. There have been seven deaths related to drug abuse in the Niagara region in the last nine months.

The problems in the area were accentuated by a tightening up of narcotics laws in New York State. Addicts resorted to Canadian border towns to seek out people selling illicit drugs, particularly heroin.

During the winter of 1973, with the heroin problem increasing, the Royal Canadian Mounted Police launched an undercover operation. During this time the Niagara region police worked with the RCMP and a number of arrests were made in the Fort Erie area. On one occasion a check was made of people crossing the border from Buffalo and of 23 suspects examined, 95 per cent were found to be addicted to heroin and 80 per cent to have criminal records.

Mr. V. M. Singer (Downsview): They didn’t examine everyone who came across the border, did they? Only 23?

Hon. Mr. Kerr: One of the places about which police received a great number of complaints was the Landmark hotel. Two men were arrested in the parking lot last October and subsequently convicted on possession charges.

Early this year police received more complaints about drug trafficking and drug abuse at the Landmark. Police intelligence reports indicated that this hotel was being used as a halfway house by traffickers who were pushing drugs to teenagers. Police officers posing as patrons discovered that drugs were being abused and trafficked openly on the premises.

On May 11, 1974, the Niagara police obtained a search warrant under the Narcotics Control Act for the premises of the Landmark hotel. I should mention, Mr. Speaker, that it is my understanding that this hotel charges a small admission fee and that there is apparently only one entrance through which patrons can enter the premises. I further understand that two employees have criminal records and that at least one employee has been convicted of possession of drugs.

Mr. Roy: Oh yes.

Hon. Mr. Kerr: During the course of the evening police officers inside the hotel were apparently recognized and a number of patrons left. One officer was told when the actual raid took place, “You fellows are too late. We knew the police were coming and one guy came around and collected most of the drugs and left before you came in.”

Mr. Breithaupt: And they didn’t believe him.

Hon. Mr. Kerr: When police did raid the premises about 11 p.m., there were a number of men known to police as convicted or suspected drug traffickers. Included was another Fort Erie man who was facing charges of trafficking in heroin and has subsequently been convicted and is currently awaiting sentence.

I am informed, Mr. Speaker, that of 115 persons on the premises, 43 were stripped and searched. This included all 36 women present.

Mr. Singer: All 36 women?

Hon. Mr. Kerr: They were searched in pairs in the washroom and with one exception were not touched or handled physically in any way. The one young lady who did object to the search was not forced to disrobe completely and was let go following a visual check.

Mr. Breithaupt: Really?

Mr. Singer: By a visual checker, first class!

Hon. Mr. Kerr: All the men present were searched by police but only seven, those on whom drugs were found or who were prime suspects, were forced to disrobe.

Mr. M. Shulman (High Park): Why would they make the women disrobe and not the men?

Hon. Mr. Kerr: The policewomen who requested the female patrons to strip were following instructions, as this is apparently the only way in which drugs hidden on the person can be completely detected in these cases. I am advised that 10 charges were laid as a result of the raid, including four drug charges.

Mr. Singer: Four?

Mr. Roy: What else were they looking for?

Hon. Mr. Kerr: None of the women searched was charged. Some eight nickel bags of marijuana and a small amount of drugs found on the floor were confiscated.

Mr. W. Hodgson (York North): The hon. member was joking about it on the radio last night.

Hon. Mr. Kerr: Those on the premises at the time of the raid were all in the 18- to 30-year age bracket.

Mr. Singer: They are the worst kind. They should all be locked up!

Hon. Mr. Kerr: It is important to note, Mr. Speaker, that the actions of the police were at all times lawful.

Mr. Singer: That is not what Diefenbaker says.

Hon. Mr. Kerr: Section 10 of the Narcotics Control Act authorized entry of the hotel without a warrant, but the police had nevertheless obtained a warrant before conducting the raid.

Mr. Cassidy: They were still wrong.

Hon. Mr. Kerr: Section 10 also authorizes the police to search any person found on the premises. I would stress that the prerequisite to entry and search is a reasonable belief on the part of the police that there is a narcotic on the premises.

Mr. Singer: And then the people searched are visually inspected?

Mr. Speaker: Order. Order, please.

Hon. Mr. Kerr: From the foregoing, Mr. Speaker, you will see that there were more than sufficient grounds for such a reasonable belief in this case. I realize full well that the legality of the actions of the police is not in issue in this instance. There is general acceptance that the police acted within the law.

Mr. Cassidy: So why does the minister put so much emphasis on the matter?

Mr. Singer: That is what everybody except Diefenbaker and some other people have thought about it.

Hon. Mr. Kerr: I think that from the foregoing information, it is apparent that the raid was justified. Having said that --

Mr. Lewis: Come on.

Mr. Cassidy: Searching 36 women is justified; and not a single charge.

Mr. Lewis: What is the problem? The problem is the minister, in this case. The Solicitor General is now the problem. He sounds like the commissioner of police in Chicago; not the Solicitor General of Ontario. Not the Solicitor General of Ontario. That is his problem.

Mr. Singer: Resign right now.

Mr. Lewis: He forgets his jurisdiction. This is not the United States we are living in -- and the minister should remember that.

Mr. Cassidy: That is the best way for the police to lose the confidence of the public.

Hon. Mr. Kerr: Now, having said that, Mr. Speaker, I am concerned about the fact that in carrying out the raid, a decision was made to automatically search all female persons on the premises --

Mr. Singer: He is concerned. Isn’t that nice. Tell the police to do it again, though.

Mr. Speaker: Order, please.

Hon. Mr. Kerr: -- whether they had criminal records or were well known to the police or not. I deeply regret that statements made by me, based on preliminary reports, indicating that the raid was probably justified, have been interpreted to mean that I completely agree with the way in which patrons were searched. In fact, I must question the judgement of those who felt that all of these women should be examined in this way.

Mr. Lewis: What is the minister going to do about it?

Mr. Breithaupt: The whole cabinet doesn’t like the press any longer.

Mr. Speaker: Order, please.

Mr. Roy: Would the minister do the same thing again?

Hon. Mr. Kerr: Mr. Speaker, I have two concerns. The first is with regard to the search of all female patrons. The second is whether the blanket police authority to search all persons found on the premises should be the subject of further regulation, either by legislation or by way of guidelines set down by the Ontario Police Commission. In view of these two concerns, I have directed the Ontario Police Commission to conduct an investigation under the provisions of the Police Act.

Mr. Singer: Will it be a public investigation?

Mr. Speaker: Order, order.

Hon. Mr. Kerr: I will be placing the commission’s findings and any recommendations before the Legislature as soon as possible.

Mr. Singer: Oh sure, private investigation. Another whitewash.

Mr. Speaker: Order, please. Would the hon. minister please taka his seat? I would ask the hon. members to kindly afford the minister the courtesy of making his statement before they so rudely interrupt and attempt to create chaos in this House. There are two or three members who particularly are guilty of breaking this rule in this House and I would ask them please to co-operate. The hon. minister may complete his statement.

Hon. Mr. Kerr: As I said, Mr. Speaker, I will be placing the commission’s findings and any recommendations before the Legislature as soon as possible. It may be that a report cannot be made until the pending charges have been disposed of, but the Ontario Police Commission will in the meantime proceed with its investigation.

Mr. Cassidy: But in private.

Mr. Lewis: A private investigation.

Mr. Cassidy: What a sham!

Mr. Singer: Another closed investigation.

Mr. T. P. Reid (Rainy River): Here comes the heavyweight.

REDUCTION OF PUBLIC DEBT

Hon. J. White (Treasurer and Minister of Economics and Intergovernmental Affairs): And now the good news. Mr. Speaker, I am pleased to inform the House today that we are now in the process of reducing the outstanding public debt of Ontario by $369 million --

Mr. E. R. Good (Waterloo North): How much did the minister have to borrow to do it?

Hon. Mr. White: -- as a result of policies announced in my budget April 9.

Mr. Cassidy: He is borrowing $500 million from the Canada pension fund.

Mr. Good: He had to borrow $1 billion to do it.

Mr. Speaker: Order.

Hon. Mr. White: This is in addition to last year’s reduction of $225 million. The 16-month reduction on outstanding public debt, therefore, is $594 million -- which is in contrast to the increase I expect to see in the outstanding federal public debt. As a result, taking into acount the maturities scheduled for this fiscal year, the total debt held by the public will be reduced from $1,699 million on March 31, 1973, to $1,105 million.

Mr. Cassidy: This is worthy of Wacky Bennett. It is worthy of Wacky Bennett. That is his kind of computation.

Hon. Mr. White: Now, sir --

Mr. Speaker: Order, please. Order.

Mr. Cassidy: And the minister knows what happened to him.

Mr. Speaker: Order.

Mr. Roy: He is not going to read all that, is he?

Mr. Speaker: The question period will follow.

LAND PURCHASES IN HALDIMAND-NORFOLK

Hon. Mr. White: Mr. Speaker, as I undertook to do on Tuesday, I am now tabling documents related to the purchase of the Townsend site in Haldimand-Norfolk. The list of options shows the average price per acre as $1,936. The figure of $1,943, which I had been using, included some legal and other costs associated with the purchase.

Mr. Good: Litigation.

Hon. Mr. White: The second document shows the out of pocket costs to the consortium associated with the assembly of the townsite, which will be seen as slightly less than $1 million -- to be precise $944,945 -- excluding certain overhead costs. The third document shows the basic details of cost to the consortium of the purchase of the three farms, and this confirms the information which I gave the House last week.

Interjection by an hon. member.

Hon. Mr. White: Wacky Bennett, by the way, left a lot of money for the member’s friend Barrett to waste, it must be said.

Hon. Mr. Rhodes: Mr. Speaker, I would like --

Mr. Lewis: He left a lot of money and it’s been well used, let me tell the Treasurer.

Hon. Mr. Grossman: Yes, if we could only print money like the feds.

Mr. Speaker: Would you fellows please keep quiet?

Hon. E. A. Winkler (Chairman, Management Board of Cabinet): Jet airplanes and the like.

Mr. Cassidy: The number of the Treasurer’s borrowings is going up.

Hon. Mr. White: Wacky Bennett left hundreds of millions of dollars from his ministry. Barrett and his socialist friends are running through it just like that.

Mrs. Campbell: Mr. Speaker, would you ask the minister not to interrupt the other minister when he’s trying to make a statement?

Mr. Speaker: Yes, would the hon. minister please not interrupt the other minister?

Mr. Breithaupt: Try to play nice.

COMMUNICATIONS IN ONTARIO

Hon. Mr. Rhodes: Mr. Speaker, I would like to place before the House a document entitled “Communications in Ontario.”

Mr. Singer: The minister does it with such grace.

Mr. Lewis: He certainly is not gauche at all.

Mr. Reid: Can we have a rerun of that?

Hon. Mr. Rhodes: Mr. Speaker, I do hope that the --

Interjections by hon. members.

Mr. Speaker: Order, please.

Hon. Mr. Rhodes: I do hope that the students in the gallery recognize where all the interruption is coming from.

Hon. W. A. Stewart (Minister of Agriculture and Food): Say “rude interruptions.”

Hon. Mr. Rhodes: Mr. Speaker, this document contains the results of a major survey conducted by the Ministry of Transportation and Communications of the perceptions of a wide cross-section of Ontario residents, regarding the impact of communications on their daily lives.

The document interprets their attitude toward the effects of communications upon Ontario residents, as individuals and as members of family groups. It indicates what they consider desirable and undesirable. It outlines their concerns and needs with respect to present communications services and their hopes for the future.

As members of the House know, this government is involved with other provincial governments and with the federal government in discussions which are examining provincial needs and objectives in the field of communications. We are exploring mechanisms for a full and effective provincial role in meeting uniquely provincial needs and objectives.

The government of Ontario intends to ensure that the needs and views of our residents are considered as fully as possible in future communications developments. The basis of a sound and comprehensive provincial communications policy is assurance that the views of those who are most affected -- householders, business and industrial enterprises, educational institutions, municipalities, communities, government and provincial institutions -- are reflected in both provincial and national policy considerations.

This report is the first of a series of projected samplings of views designed to ensure that the social requirements of Ontarians are fully reflected in the development of our policies. The mechanisms of communication are vital to the individual. Communications has become a vast, complex and essentially remote enterprise. It is the domain of the specialist. Operational decisions are often made on the basis of expert viewpoint only.

It is not easy to find out how the ordinary person feels about existing services or what the future should provide. To help resolve the need for the participation of the individual, the Ministry of Transportation and Communications conducted the survey which gave rise to this report.

In eight areas of the province 72 discussion groups involving 850 participants were organized. Independent researchers conducted the group interviews. With the consent of all of the subjects, all discussions were recorded in order to provide a complete and permanent record of all survey information.

The report I place before you today is a breakdown of the issues and concerns which the participants expressed when asked to think about how communications affect their lives. On the basis of the study, it is apparent that people want the means of private and personal conversation safeguarded. They desire equality of opportunity to share in communications benefits and they warn against the destruction of existing communications networks which link the individual to others in his community by the imposition of new technology.

People are concerned about the effects of mass communications upon social values, and they indicate areas in which they think the government should be finding answers before embarking on a more-of-the-same kind of policy.

Mr. Cassidy: This is breathtaking.

Hon. Mr. Rhodes: The report makes pointed recommendations to those who are attempting to develop policies for government consideration. It deals with inequalities in existing services; it argues for consideration of the social impact of any new policies before advancing them for examination and possible action.

These views have already influenced our activities and were reflected in statements by my predecessor (Mr. Carton) to the first federal-provincial conference of communications ministers last November.

This is the first time the data has been made public in full. Following the tabling of this document in the Legislature, copies of “Communications in Ontario” will be distributed to groups, organizations and agencies throughout the province with the request that they respond to any of the points made by the original participants or make such reply as they see fit.

Over the summer all responses received will be analysed. If there are any refinements needed to present positions on the various issues raised in the report they will be made and seriously considered in the ongoing policy formulation activities of the ministry.

I would also welcome the comments of all of the members of this House.

Mr. Lewis: On a point of order, if I may, Mr. Speaker, prior to the question period.

I wonder, sir, if on a point of order you might provide some clarification for me and others in the House? As I understand it, a message came through from the Speaker’s office yesterday that the intent on the part of the natural resources committee to call a committee session to hear representations on matters affecting the health of the miners at Elliot Lake was seen to be beyond the committee’s rights since the estimates which it had been examining -- natural resources estimates -- had ended on Monday night last and the committee did not have the authority itself to call itself into session as a standing committee of the Legislature and invite such representation.

I wanted to ask you, Mr. Speaker, about the motion which was moved by the House leader (Mr. Winkler) on March 6 in the establishing of the committees, which said they:

... will inquire into all such matters and things as may be referred to them by the House, provided that all boards and commissions are hereby referred to committees No. 1 to 4 in accordance with the policy areas indicated by their titles.

Mr. Speaker, it was quite clear that doctors at the Workmen’s Compensation Board were the first individuals suggested by the Minister of Natural Resources (Mr. Bernier) to appear before the committee on this subject. I take it that it is entirely within this committee’s purview or competence to call the Workmen’s Compensation Board experts at any time on this matter since in effect, by motion, it has already been given that right.

The motion also says, “All standing committees shall report from time to time their observations and opinions on the matters referred to them with power to send for persons, papers and records.” I take it, therefore, that if the Workmen’s Compensation Board comes before it to discuss health matters at Elliot Lake, it is within the competence of the committee to requisition information, persons, papers and records which corroborate those submissions from the board or add to them or vary them.

In other words, Mr. Speaker, I am seeking from you, I hope, a change in position or a clarification of the ruling, that the committee should be allowed to proceed as it is apparently authorized to do under the standing rules of the House, and that this important matter not be frustrated.

Mr. Speaker: I should say to the hon. member that I did have an inquiry directed to my office by one hon. member yesterday regarding the powers of standing committees. I suggested to him that the standing committees had the power to deal with those things referred to that committee or committees by the Legislature.

This also includes the right to summon any boards or commissions, which boards or commissions do report through the particular ministry which is being dealt with by that particular standing committee. In conjunction with the summoning of boards and commissions, it seems to me that they could examine the Workmen’s Compensation Board in this connection.

My understanding of the inquiry that came to my office was simply whether the standing committee would have the right to summon any persons and to require the production of any documents. This is as I understood it and this, of course, would not be correct. It is only the boards and commissions which report to the ministry being heard or dealt with by that committee. This is my understanding.

Mr. Lewis: Further to the point of order, as I understand it there is nothing to stop the natural resources committee from getting together next Wednesday, as was its intent yesterday, we understood, and bringing before it the Workmen’s Compensation Board to discuss a matter totally within the competence of that committee.

Mr. Speaker: It would seem to me that the chairman of the particular committee has that right, yes.

Mr. Lewis: Yes.

Mr. R. G. Hodgson (Victoria-Haliburton): Mr. Speaker, speaking to the point of order, when a committee has been assigned estimates it is not in a true sense, I don’t believe under the rules, a standing committee.

Mr. Renwick: Yes, it is a standing committee.

Mr. R. G. Hodgson: It’s an estimates committee under the rules of the House. That would be my understanding and I wonder that you wouldn’t consider that point.

Mr. I. Deans (Wentworth): On the point raised by the member for Victoria-Haliburton, it says on page 19 under the heading “Supply”: “The estimates of any department or departments may be referred to a standing committee.”

Mr. R. G. Hodgson: No, estimates committee.

Mr. Deans: No, a standing committee, and that committee remains a standing committee.

Mr. Speaker: Yes, the standing committee has the authority to deal with those particular boards or commissions or the matters of the departments or the bills referred to that particular committee. It has nothing whatsoever to do with the fact that a standing committee may deal with estimates. I think that clarifies the situation.

Mr. Lewis: Mr. Speaker, I want to pursue this one stage of it. Then I have a question. I put it to you on a point of order. I don’t know how to resolve it. The committee on two separate occasions in its majority agreed to call representations relating to the health and safety of the miners at Elliot Lake. For reasons I don’t entirely understand but I have some suspicion about, the committee did not meet. It was cancelled again yesterday, when it is clearly within the competence of the committee to do as on two occasions we collectively and almost unanimously agreed to do. I’m sorry, the committee agreed. I was not on the committee. I was sitting in at the time.

Mr. Speaker, how is it then possible for the objects of the committee to be frustrated, for information to be suppressed and for the decisions which we had made collectively to be curtailed, because arbitrarily it is decided that the committee won’t sit when it is obviously within its competence? This is a terribly serious matter. I don’t think the

House rules should be abused this way to serve whatever motives may be at work.

Mr. Speaker: Of course, I’m not at all aware of the circumstances which led to the complaints presented by the hon. member for Scarborough West, but it seems to me, if the committee has decided by a majority that it wants to meet, the chairman should call a meeting of that committee.

Mr. Lewis: Right. How do we get that done?

Mr. Speaker: I know of no reason why he could not or should not call a meeting.

Mr. Lewis: How do we get that done though?

Mr. Speaker: Perhaps the hon. members would take it back to the chairman of the committee and tell the chairman of the committee that they would like to meet so that a committee meeting will be set up.

Mr. E. W. Martel (Sudbury East): Mr. Speaker, speaking to the point of order, there was a unanimous consent to meet yesterday at 10 a.m. The vice-chairman of the committee was advised to call that meeting and he took it upon himself not to call the meeting, contrary to the wishes of the committee.

Mr. Cassidy: That’s a point of order!

Mr. Martel: How do we now force that meeting to come about so that we can look into the serious situation at Elliot Lake?

Mr. Lewis: Mr. Speaker, on a point of order, there is a very serious attempt being made to prevent the committee from sitting before the session adjourns, a calculated attempt to prevent us from listening to people who are knowledgeable about the questions of silicosis and cancer in Elliot Lake. I don’t understand how the rules of the House can be manipulated in this fashion when a committee has agreed to proceed in a certain way. I would ask Mr. Speaker for his own intervention.

Mr. Speaker: I can only say to the hon. member that my name is not Solomon. I will investigate the matter and I will try to resolve it for the hon. members. I should have more information on it.

Mr. Roy: That’s not a bad name.

An hon. member: Allan Solomon Reuter.

Mr. Deans: Mr. Speaker, I also rise on a point of order -- a different point of order -- dealing with the proceedings of the House. I want to put it to you in this way. The rules of the House dealing with the committee of supply indicate that estimates referred to standing committees must be referred within 30 sessional days and, further, the committee to which such estimates have been referred must report to the House within 75 sessional days from the day of presentation of the budget.

A sessional day is defined as meaning any day on which the House sits. I’ve been informed by the clerk that Wednesday, though the House does not officially sit on Wednesdays, is considered to be a sessional day. This means that on every Wednesday, though the House is not sitting, one of the 75 days is deducted from the estimate hearings. This means that we are going to run into the same problem we have run into every year for the last four -- that at the end of 75 so-called sessional days, the work of the committee will not yet have been completed and we will not have been afforded the opportunity to properly evaluate the estimates of a number of ministries.

I want to ask you, sir, to rule in one of two ways, either to rule that a session day --

Mr. Speaker: I would like the hon. member to not restrict me to one of two ways.

Mr. Deans: Then I would ask you to consider two ways of ruling and to add any other that you desire -- other than no --

Interjections by hon. members.

Mr. Deans: -- that a sessional day be interpreted as it appears in the rules as a day on which the House sits, and therefore Wednesdays not be considered sessional days; or secondly, that the committee be instructed by the House to sit on Wednesdays for the purpose of hearing estimates, and that for the committees which are required by motion of the government to sit for any other purpose, that day not be considered as a sessional day for the purpose of hearing estimates.

Hon. Mr. Winkler: Mr. Speaker, if I might make a brief contribution. I know of no inhibition to restrain any committee from sitting on Wednesdays.

Mr. Deans: Oh, that’s not what I said.

Mr. Speaker: It seems to me that the rules are quite clear, on page 19 of our standing orders, in which first of all, 87(a) sets forth the fact that a sitting means a period of 2% hours --

Mr. Deans: Right.

Mr. Speaker: -- and the term “sessional day” means any day on which the House sits.

Mr. Lewis: Right. It doesn’t sit on Wednesday.

Mr. Speaker: But the Wednesdays have been set aside for committee meetings particularly so that the committees may sit on any Wednesday as they are supposed to, as has been ordered by the House.

Mr. Lewis: But that is not a sessional day because the House does not sit.

Mr. Speaker: I think that’s a pretty fine point and I think the House could have sat. The fact that it didn’t was to permit the committees to sit. I believe the intention of the committee that studied the rules for the House and that brought in a report was that Wednesday would be a sessional day, and that it would be a day on which the committee would sit and that the sittings for that particular day would be included as part of the total 30 days. That is what I believe to be the case.

Again, since the point raised by the hon. member seems to be a very fine point, I will have to investigate it further, but my opinion is that the Wednesday would be counted as one of the sittings.

Mr. Deans: Well, further to the point, sir, and in order that you might consider it in addition to the point I made that you are going to consider, would you then consider that on days when matters other than estimates are being considered by committees, that those days not be considered as sessional days for the purpose of determining the number of days allocated for hearing estimates?

Mr. Speaker: The hon. member lost me after the first sentence. Perhaps he’d repeat it.

Mr. Deans: On the notice paper it says -- on this particular day it says nothing -- but on the notice paper it frequently says that certain committees will sit for the purpose of studying bills, for example, the Health Disciplines Act. But when a committee is studying a bill, I would suggest that day not be considered as a sessional day for the purpose of estimates consideration, because obviously that day is then deducted from the total number of days available for the committee to hear estimates.

Mr. Speaker: I’ll consider that point raised by the hon. member.

Mr. Deans: Thank you, Mr. Speaker.

Mr. Speaker: Oral questions. The hon. member for Kitchener.

POLICE RAID ON HOTEL

Mr. Breithaupt: Mr. Speaker, a question of the Solicitor General, following his statement: In the response of bad reaction, which has been almost universal, to this whole event that took place at Fort Erie, is he prepared to have the police commission’s inquiry be a public one so that the full story and background of this matter can be completely clarified once and for all?

Hon. Mr. Kerr: Mr. Speaker, under the Police Act there are one or two sections where an investigation or inquiry can be held by the police commission. Section 56, for example, gives the commission the power to hold hearings and all the authority it would have under the Public Inquiries Act. Therefore I would assume that if, during the course of the investigation, the commission felt hearings were required and people should be subpoenaed to attend hearings, that would be sufficient.

Mr. Lewis: That is not good enough.

Mr. Singer: That is the trouble.

Mr. Renwick: Mr. Speaker, by way of a supplementary question, will the Solicitor General specifically state now that it will be an inquiry under section 57 of the Police Act and that the Lieutenant Governor in Council will direct the commission to inquire into this matter and not leave it under the more nebulous and inadequate provisions of section 56?

Hon. Mr. Kerr: Mr. Speaker, in view of the nature of this inquiry and the events that have occurred that I feel require an inquiry, it is not the sort of judicial-type of inquiry, the formal type of inquiry --

Mr. Renwick: That is a technical point.

Mr. Singer: That should not be so. That is the whole point of it.

Hon. Mr. Kerr: -- that is normally necessary when there are very complex issues to be decided and considered.

Mr. Renwick: Section 57 of the Police Act says that the Lieutenant Governor in Council may direct the commission to inquire into and report. Then it sets out in extension the provisions and provides for all the powers.

Hon. Mr. Kerr: He said that only after he had a report.

Mr. Lewis: The Solicitor General is having the police investigate the police and he is setting it up in advance. It is unacceptable.

Mr. Speaker: Order.

Hon. Mr. Kerr: Mr. Speaker, the particular section of the Act to be used for the inquiry hasn’t been decided as yet. This is something

I want to discuss with the members of the commission. It is possible that section 57 would be used.

Mr. Singer: Supplementary, Mr. Speaker.

Mr. Speaker: The hon. member for Ottawa

East was up previously on a supplementary.

Mr. Roy: Mr. Speaker, as a supplementary to the minister’s statement, he mentioned that he had been misquoted. I would like to know pending this inquiry whether he is prepared to issue instructions or guidelines to police officers in relation to drug raids and, secondly, whether he is prepared to allow or to condone similar raids and similar searches, as he was quoted in the newspaper yesterday.

Hon. Mr. Kerr: No, Mr. Speaker, I wouldn’t condone this type of a raid to this extent at all.

Mr. Singer: The Solicitor General did yesterday. Why did he change his mind?

Hon. Mr. Kerr: That’s where I have been misinterpreted. Mr. Speaker, when you talk about a raid of this kind you talk about all the procedures and searches that were conducted as a result of that raid. I have never condoned the type of physical search that was conducted by the police on those premises.

Mr. Roy: What’s on the front page of the Star then?

Mr. Singer: The minister said it was fine yesterday.

Hon. Mr. Kerr: Certainly, as a result of this inquiry, there would be guidelines laid down by the police commission.

Interjections by hon. members.

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

Mr. Lewis: Mr. Speaker, I want to ask the Solicitor General from the length of time he allowed to lapse between the time of the raid and its coming to his attention and the institution of the inquiry, from his responses throughout the piece, notwithstanding what he has said today, and from his equivocation about whether or not it will be a public inquiry, does the minister not recognize that all of that is essentially an American view of law and order, not a Canadian view of law and order, and that it is time the minister recognizes as Solicitor General he has civil liberties to protect as well as the public to defend?

Mr. Speaker: Order.

Mr. Lewis: That is exactly what he has done.

Mr. Speaker: The hon. member for Downsview.

Does the minister wish to respond to that statement?

Hon. Mr. Kerr: I don’t agree with the hon. member’s statement at all.

Mr. Speaker: All right. The hon. member for Downsview.

Mr. J. F. Foulds (Port Arthur): The minister does not agree that he has civil rights to defend?

Mr. Singer: Can the minister possibly tell us how he can justify one paragraph of his statement today, that he realizes full well that the legality of the actions of the police is not an issue and that there is general acceptance the police acted within the law, when all of the people consulted and referred to by the media say there is grave doubt about it; when no less a person than Rt. Hon. John Diefenbaker says it is against the law; and when the minister himself knows there has to be reasonable cause and today complains there was a search of all the female customers of that establishment? How can he say that it is well known and generally accepted that the police actions were within the law?

Hon. Mr. Kerr: I am saying, Mr. Speaker, the raid was conducted within the provisions of the law under the Narcotics Control Act and any other statutes.

Mr. Singer: The minister didn’t say “the raid”; he said “the legality of the actions of the police.”

Mr. Speaker: Order.

Hon. Mr. Kerr: I’m saying as to the conducting of the raid. I wish the hon. member wouldn’t take things out of context. I’m talking about the raid.

Mr. Singer: It says it right here in a paragraph.

Hon. Mr. Kerr: I’m talking about the fact that the police moved in and were there and announced that a search would be made of the premises and those people in there. That is within the law.

Interjections by hon. members.

Hon. Mr. Kerr: That provision is within the law.

Mr. Speaker: Order, please.

Hon. Mr. Kerr: Unfortunately, because of the broad section of section 10 of the Narcotics Control Act, it would appear there was nothing illegal about the search that was conducted.

Mr. Cassidy: But it was repellent to everyone in Ontario except the minister.

Hon. Mr. Kerr: Under the provisions of the law and the federal legislation that exists at the present time, it is not illegal.

Mr. Singer: It says it right here; separate paragraph.

Mr. Cassidy: But it was repellent to everyone in Ontario except the minister.

Mr. Lewis: It was wrong in every sense.

Hon. Mr. Kerr: Right, I’m not defending that law at all. I’m just making a statement that it wasn’t illegal.

Mr. Lewis: It is grounds for resignation.

Mr. Singer: The minister should resign.

Mr. Lewis: These are grounds for resignation. It is not characteristic of the minister.

Mr. Speaker: Order.

Hon. Mr. Kerr: As far as Mr. Diefenbaker is concerned --

Interjections by hon. members.

Mr. Speaker: Order.

Hon. Mr. Kerr: -- I would like to know what particular point he’s made that said it was unconstitutional.

Interjections by hon. members.

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

Mr. Shulman: What was the reason given to the minister by the police for searching all the females -- stripping all the females and not the males -- and is this the normal pattern in these raids?

An hon. member: Who gave the authority?

Hon. Mr. Kerr: Mr. Speaker, the reason is -- as I implied in the statement -- because of the way that women can secrete drugs, it is necessary to have a complete examination. That was the reason given to me.

Mr. Shulman: But not the men.

Mr. Speaker: The hon. member for Kitchener.

Mr. Breithaupt: Supplementary, Mr. Speaker.

Mr. Lewis: If the minister’s judgement is no better than his pronunciation, he is in trouble.

Mr. Speaker: Order.

Mr. Breithaupt: Since presumably the main drug concern of the Niagara regional police and other forces is with drug trafficking, and since possession is a relatively minor offence, will the minister investigate as part of this proposed study, just how much drugs and other items were to be expected to be found as a result of rectal and vaginal searches of young people?

Hon. Mr. Kerr: That, of course, would be part of the inquiry; that’s the type of information we want to know.

Mr. Singer: Yes, but it is a secret inquiry.

Mr. Speaker: Order. There have been six supplementaries.

Mr. Shulman: He suggested there is a difference between the female rectum and the male rectum -- and I would like to know what the difference is?

Mr. Renwick: By way of supplementary.

Mr. Speaker: I have not recognized the hon. member for Riverdale. I said there were six supplementaries in addition to the original question. The standing orders clearly indicate it is up to the Speaker to determine when a reasonable number of supplementaries has been asked. In my opinion, there has been a reasonable number or supplementaries.

Mr. Lewis: But it is an important question, and there have been six preposterous answers.

Mr. Speaker: The hon. member for Kitchener.

Mr. Breithaupt: Mr. Speaker, on a point of order: There were two particularly important statements which have been made today; one by the Solicitor General and the other by the Minister of Transportation and Communications.

Now, the latter minister apparently is elsewhere and is not available to answer questions in that important area. One would hope, therefore, that more questions could be placed in the area under the statement of the Solicitor General, since I think none of the other ministers has matters of as great importance as the ones which have been raised by the Solicitor General. I would ask the Speaker to reconsider that, so that further questions could be answered?

Mr. Speaker: There is nothing in the standing orders at all to indicate that any one minister must be present. If two ministers have made statements, and since there are occasions upon which a minister must absent himself from the House, that is no reason at all for the Speaker to indicate that further questions may be asked of the other minister who made a statement. I indicated to the House that, in accordance with the standing orders, a reasonable number of supplementaries had been asked. I reiterate that ruling; the hon. member for Kitchener may ask a new question.

Mr. Deans: And there are 17 ministers absent.

Mr. Roy: Boy, is the minister happy? Saved by the bell.

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

Mr. Singer: The legality is not in question.

Mr. Speaker: The hon. member for Scarborough West may ask questions.

DEMOLITION LEGISLATION

Mr. Lewis: A question of the provincial Treasurer: Where is the demolition permit legislation which was promised to the House by his colleague, who works within the Treasurer’s general ambit?

Hon. Mr. White: Mr. Speaker, the cabinet considered this legislation yesterday. They have directed my colleague, the Minister without Portfolio (Mr. Irvine), and me to refine certain aspects of it. My colleague is meeting the mayor of Toronto later today and we would hope to introduce the bill next week.

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

NANTICOKE COMMUNITY DEVELOPMENT

Mr. Lewis: A question, again, if I may, of the provincial Treasurer, relating to the new town at Nanticoke. Are the developers from whom he bought the land involved in the actual development of the townsite itself? Is that something which has been established in advance?

Hon. Mr. White: No, on the contrary, Mr. Speaker, there is a clear understanding in contractual form that they will not be involved within two miles of the townsite.

Mr. Lewis: Will they be called upon to develop any aspect of the townsite?

Hon. Mr. White: Mr. Speaker, I wouldn’t expect that to be done by the Ontario Land Corp. I would expect the Ontario Land Corp. to call tenders on every aspect of the development.

Mr. Lewis: On tenders? Could the Treasurer table the contract?

Hon. Mr. White: I’d be glad to.

Mr. Lewis: Thank you.

Mr. Speaker: Supplementary?

Mr. D. M. Deacon (York Centre): A supplementary: Did the minister’s decision to deal with these land speculators take into consideration the fact that the land on which they had options was the best agricultural land in the area, and not the worst?

Hon. Mr. White: Well, in fact, that is a misstatement, as the hon. member’s leader (Mr. R. F. Nixon) will know. It’s not the best land at all. There is no class 1 land involved. The London Free Press made it clear in an editorial last Saturday --

Mr. Roy: Did they talk about the Treasurer?

Hon. Mr. White: -- that while this was arable land, it was not the best land. And if the hon. member for York Centre has criticisms to make about this deal, why doesn’t he speak to his leader, who was the big push behind this and who was trying to shove us into this deal at much higher prices?

Mr. Deacon: He wasn’t.

Mr. Breithaupt: The government is the one that has blundered.

Interjections by hon. members.

Mr. Deacon: Perhaps the minister will read the statements that have been made repeatedly by my leader, that the development of the --

Mr. Speaker: Is there a question here?

Mr. Deacon: Yes.

An hon. member: We are getting there.

Mr. Deacon: I have asked --

Mr. Speaker: Perhaps the hon. member will say, “will the minister read them”?

Mr. Deacon: Right. Will the minister read the statements made by my leader, that indeed such a development is not needed and that existing communities could take care of the growth required for some time to come?

Hon. Mr. Stewart: That’s wasn’t what he said in the House a little while ago.

Hon. Mr. White: Let me, Mr. Speaker, undertake now to get extracts from Hansard and, the public prints, showing just how enthusiastic the Liberal leader was in this regard. And let me observe, before I sit down, that the hon. member asks this kind of question only when his leader is away.

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

Mr. Lewis: Look what the Minister of Energy (Mr. McKeough) does when the Premier is away.

Interjections by hon. members.

Mr. Lewis: Ambition dies hard in this House, Mr. Speaker!

Interjections by hon. members.

Mr. Lewis: That’s why I’m always here.

Interjections by hon. members.

TORONTO ISLAND AIRPORT

Mr. Lewis: May I ask the Minister of Transportation and Communications --

Interjection by an hon. member.

Mr. Lewis: Let me suggest, if I may, Mr. Speaker, that if the member for Kitchener wants to open up this subject, he should, because I know he had intended to, and then you would allow a flow of supplementaries on the minister’s statement today.

Mr. Speaker: Well, I think that is very considerate of the hon. member. If the hon. member for Kitchener would like to do that, I’ll permit it.

Hon. Mr. Grossman: Those fellows are in love again.

Mr. Breithaupt: Perhaps I’ll start off at this point, Mr. Speaker, and ask what possible justification the minister can offer us as to the reason why doctored minutes of these various committee meetings were given, not only to our research office and other persons who had asked them, but apparently as well to at least two members of the committee itself, the two Toronto aldermen, Don Heap and Dorothy Thomas. And why were the complaints and reservations and comments, especially those made by Ald. Heap, edited from the summary of the minutes?

Hon. Mr. Rhodes: Mr. Speaker, first I would like to apologize to the hon. member for not being in my seat when obviously he wanted to ask that question. I was called from the House on an important matter. I do apologize, and I am pleased that he was given this courtesy.

Mr. Breithaupt: I appreciate the minister’s too.

Mr. Cassidy: He has met the press now.

Hon. Mr. Rhodes: Now to answer the question -- I do hope that I won’t be interrupted any more by the member for Toronto Island until it’s his turn.

Hon. Mr. Grossman: He is not the member for Toronto Island. He is just somebody we have to contend with down there. He is making it difficult for the island.

Hon. Mr. Rhodes: Mr. Speaker, as I understand the minutes, and I really won’t accept that they are doctored minutes --

Mr. Cassidy: The government doesn’t have to extend the airport there to get rid of me.

Hon. Mr. Rhodes: I have not received even the so-called adjusted minutes that he referred to. I am not a member of that committee and I have not received them. The minutes, as I understand it, were prepared in a simple form and a short form in order to get the pertinent information to the members of the committee and to those who have indicated interest.

Mr. Roy: Do away with the criticism.

Interjection by an hon. member.

Hon. Mr. Rhodes: I have stated already in my statement that the complete minutes will be made available -- I don’t have the right to say that but I will certainly suggest to the committee that the complete minutes be made available to those who wish them.

Mr. P. G. Givens (York-Forest Hill): A supplementary?

Mr. Speaker: The hon. member for Scarborough West has a supplementary.

Mr. Lewis: Good gracious, I have, but there is a limit.

I would like to ask the minister, in view of his continued denial of motives on the part of the Province of Ontario on the establishment of yet a second airport on the island, how is it that the one document which deals with that in explicit terms comes from Mr. McCartney, the project manager, general aviation, of the Ministry of Transportation and Communications, who deals with the east headlands as an additional site, as an alternative site, in precisely the fashion which the minister indicated in his statement was beyond the terms of reference of the committee?

Hon. Mr. Rhodes: Mr. Speaker, the gentleman mentioned has been giving technical advice to the committee.

Mr. Lewis: He is giving the Ontario view.

Interjection by an hon. member.

Hon. Mr. Rhodes: He provided this particular working paper to the committee for its consideration. It is not a final position. It is not the position of the ministry or of the government. It is a report prepared by him for the use of the committee as an internal working document for the committee to work with. The options are in there; so is the history of the particular project going back to when it was first talked about. It is a detailed report and working paper to be used by the committee.

I emphasize to you, sir, and to all the members of this House, there is no decision of any kind concerning the use of Toronto Island or the east headland for airports; none of these options has been discussed by government. It has been done entirely by that committee, associated members thereto and technical staff assigned by the various bodies represented I on the committee.

Mr. Givens: A supplementary.

Mr. Speaker: The hon. member for York-Forest Hill.

Mr. Givens: In view of all the public controversy wouldn’t it serve the public interest better if, rather than tabling the minutes which are really a regurgitation of what took place at the meeting of the committee -- whether they be doctored or undoctored -- the minister would table all the reports placed before the committee, particularly the one by the aviation planning services and the other by Mr. McCartney of the ministry, so this assembly can determine what is going on before this committee?

Hon. Mr. Rhodes: Mr. Speaker, it is not my committee nor is it a committee of the ministry. As I indicated in the statement, it is a committee made up of representatives of various bodies, political and otherwise, here in the metropolitan area including the federal government as well as the Ministry of Transportation and Communications.

I have already stated, in the closing paragraph of my statement, that when the final report is prepared -- and I can only say that because that is when it will come to me -- I would be prepared and am prepared to table that report plus any other pertinent information gathered in the development of the report. I don’t think, sir, that I should be tabling before you at this time, material which belongs to that committee.

Mr. Givens: But this committee was called together under the minister’s aegis. He is the dominant factor in this committee, isn’t he?

Mr. Speaker: The hon. member for Scarborough West with a supplementary.

Mr. Lewis: One last supplementary to the minister. Why does the minister not make a categorical statement in the House now that he will not permit or contemplate, at present or in the future, an additional airport on Toronto Island? We have Malton, Pickering, Buttonville and the airport already there; to add yet another would be madness and would distort the Toronto-centred region plan anyway because of its concentration in the city of Toronto area.

Hon. Mr. Rhodes: Mr. Speaker, I wouldn’t do that for a very obvious reason.

Mr. Lewis: Why?

Hon. Mr. Rhodes: If I did that, it would be members opposite who would leap to their feet and immediately accuse us of taking away from the local people any opportunity to consider all of the factors.

Hon. Mr. Grossman: Of course they would.

Mr. Lewis: No, the minister would have some transportation policy if he did that. If that is the only reason, let him try it and see our response.

Interjections by hon. members.

Hon. Mr. Rhodes: At this stage in the game I don’t know what to expect but I can say to the members that I will not make that statement at this time.

Mr. Lewis: Well the minister should. That is what makes us suspicious.

Hon. Mr. Rhodes: When that report is completed, surely to goodness this House would want to have all of the possibilities investigated?

Mr. Lewis: No, I am not interested in a second airport at all; not at all.

Hon. Mr. Grossman: The member may not be.

Interjections by hon. members.

Mr. Lewis: No one is interested except the businessmen of downtown Toronto and that ministry.

Mr. Speaker: Order. The hon. member for Waterloo.

Mr. Good: This is a new question, Mr. Speaker.

Interjections by hon. members.

Mr. Good: Isn’t the NDP leader ready yet?

Mr. Speaker: Has the hon. member for Scarborough West no further questions?

Mr. Lewis: No, Mr. Speaker.

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

HYDRO HEADQUARTERS CATERING CONTRACT

Hon. W. D. McKeough (Minister of Energy): Mr. Speaker, on Friday morning the hon. member for Kitchener asked a three-point question relating to the catering contract for the new Hydro building. The question was directed to the Premier (Mr. Davis) but I will answer it.

The first part of the question was as follows:

Can the Premier advise why the catering contract for the new Ontario Hydro headquarters has apparently been awarded to Malloney’s without any tenders being called?

It is my understanding, Mr. Speaker, that Hydro’s contract with Canada Square left the renting of all the commercial space to Canada Square. Accordingly, Canada Square entered into a contract with the Egans for, I think, 28,000 sq ft. Hydro got a percentage of the excess revenue over a base amount. It was Hydro’s original intention that the coffee service on its 19 floors would be separate from any catering arrangement or any restaurant arrangement which was entered into in the commercial space. Canada Square, as it was required to, came to Hydro to get consent to enter into a lease with the Egans and the Egans at that time proposed an integrated food service in the entire building.

After investigation by Hydro, both internally and using the advice of a knowledgeable outside consultant. Hydro concluded that an integrated service made sense, both in terms of the food service itself and in terms of the financial gain to Ontario Hydro.

Hydro retains direct control over the extent, quality and performance of the really very limited vending service which is required on its office floors.

The second part of the question was:

Can the Premier explain why the CNIB, which is Hydro’s caterer in its present headquarters, was not asked to compete for the new contract and apparently has not even been made aware that the new contract has ben awarded?

I think I have answered the question in terms of the commercial restaurant facility arrangement between the Egans and Canada Square.

It is planned to continue with the service of the CNIB in Hydro’s Murray St. building. There are five or six employees at 620 University Ave., from the CNIB. It should be borne in mind that there will be no change in their status for well over a year. CNIB has informed us that there will be no problem placing these people elsewhere in Metro and, in any case, Hydro is taking steps to ensure that employment opportunities are offered to the CNIB employees, five or six in number, in other places somewhere in the Metro area. Just where, at this moment, we are not sure.

The third part of the question was:

Can the Premier advise if this is the same Malloney’s that operates the Edelweiss restaurant at Ontario Place?

I am informed, Mr. Speaker, that the Egan brothers originally operated that restaurant at Ontario Place, but this facility was sold some time in 1973 and is not now operated by the Egan brothers.

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

WITHDRAWAL OF TEACHERS’ SERVICES

Hon. T. L. Wells (Minister of Education): Mr. Speaker, a few days ago the hon. member for Port Arthur asked the Premier a question concerning the teachers’ dispute in York county, and he asked whether the Minister of Education was considering extending the date for the submission of resignations by the teachers in York county.

Mr. Speaker, the answer to that is no, I am not considering extending the date for those teachers.

Mr. Deacon: A supplementary: Since that bill imposed arbitration on them and since they are a special case in that regard, and since, in 1968, when the Premier was then Minister of Education he did extend the date in the case of Toronto resignations that were affecting the Metro board, why would the minister not consider extending the date of resignation?

Hon. Mr. Wells: Mr. Speaker, we considered this very carefully. The incident in 1968 that the member mentions was quite different and, as I am sure he is well aware, there is a provision for resignations by mutual consent presently in the contract, and I think the interests of all are best served by leaving the present contract and its conditions in force as they are.

Mr. Deacon: A further supplementary: Would the minister not agree that under normal circumstances, the teachers would know what salaries they would be faced with for the coming year and this way they don’t? Normally they would have the right to resign before May 31, knowing what their conditions of work would be the next year. In this case they don’t.

Hon. Mr. Wells: I might point out to my friend that at this time last year the contracts which were to be in force and under which those teachers would start working last September were still being negotiated. They did not know what the conditions of employment would be at that time.

Mr. Deacon: Yes, but they were not being forced, under arbitration.

Mr. Speaker: Has the hon. member for Waterloo North a new question?

ASSISTANCE FOR FLOOD VICTIMS

Mr. Good: A question of the Provincial Secretary for Resources Development.

Mr. Roy: Does the minister know who that is?

Mr. Good: Now that the citizens’ committees have been set up to raise money for flood relief in the Waterloo region and the payment of claims, could the minister inform the House what vehicle is going to be used for examining the circumstances of the flooding in the Waterloo regional area? Would it be the ministry or an independent body?

Hon. Mr. Grossman: While this is being administered by the Ministry of Treasury, Economics and Intergovernmental Affairs, under whose aegis the legislation is in effect, I would give a general answer that it is the community, the municipality, which sets up the organization and --

Mr. Good: The minister has missed my question.

Hon. Mr. Grossman: Pardon?

Mr. Good: Mr. Speaker, I think the minister misunderstood. The Minister of Natural Resources said that he would, some time in the future, indicate who would be investigating the circumstances surrounding the actual flooding conditions. What is the body that has been promised to investigate those circumstances?

Hon. Mr. Grossman: That should be directed to the Minister of Natural Resources. He’s the one who is setting it up.

Mr. Roy: Is he here?

Mr. Good: It is a matter of government policy, Mr. Speaker, and since the minister is not here, I thought the provincial secretary would know. Might I ask a supplementary?

Would the minister seriously consider the suggestion made by many people in the area -- including the chairman of the Grand River Conservation Authority and the regional chairman, as well as me -- that there should be an agency established which could deal with it and which would give opportunity for public representation and the gathering of public information when the circumstances surrounding the flooding are being investigated?

Hon. Mr. Grossman: Mr. Speaker, in the first place, there is no question at all as to whether I knew what the policy was. It was expounded by the Minister of Natural Resources on the floor of this Legislature. He said he would set up a committee. The question of whether it would be a public investigation was asked at that time and answered by my colleague, the minister. If the hon. member is suggesting that --

Mr. Roy: Where did he go? Where is he today?

Mr. Good: He didn’t know then.

Hon. Mr. Grossman: He gave the answer at that time. Whatever answer he gave is what applies.

Mr. Roy: He didn’t know.

Mr. Good: He said he hadn’t decided yet.

Hon. Mr. Grossman: When the hon. minister decides, he will, I’m sure, make a public statement to that effect.

Mr. Good: Surely that’s a policy decision?

Hon. Mr. Grossman: The hon. member may be surprised, Mr. Speaker, but we don’t get together four times a day so that I can find out what he’s done in the last hour.

Mr. Reid: They don’t get together at all!

Hon. Mr. Grossman: Indeed, it’s not my business to find out what he’s doing every day. That’s his business.

Mr. Reid: What is the minister’s business? That’s what we’d like to know.

Mr. Speaker: Order.

Hon. Mr. Grossman: He has his ministry and he’s looking after it very well. I would suggest the hon. member ask the Minister of Natural Resources to give him a reply to that question.

Mr. Good: We would, but he’s not here.

Hon. Mr. Grossman: All right. I’ll make sure that the hon. minister has been made aware of the question the hon. member has asked.

Mr. Breithaupt: A supplementary, Mr. Speaker.

Mr. Speaker: The hon. member for Kitchener.

Mr. Breithaupt: Following the statement which the minister made concerning the funding being arranged for the communities and persons harmed in the most recent flood, can the minister advise us what response he has received from the federal authorities to his request that an additional dollar be added to match the provincial dollar of contribution so that, hopefully, the amount which would otherwise be raised within the community could be tripled?

Hon. Mr. Grossman: Mr. Speaker, I have had no reply from the federal authorities unless, of course, my colleague, the Treasurer, has had a reply. I know he has written them as well.

Mr. Good: Has the minister asked?

Mr. R. F. Ruston (Essex-Kent): He didn’t speak to them down there.

Mr. Speaker: A supplementary? Yes, the hon. member for Windsor-Walkerville with a supplementary.

Mr. B. Newman (Windsor-Walkerville): Thank you, Mr. Speaker. Is the ministry considering a flood insurance scheme in co-operation or in conjunction with the federal government, so that in such future disasters there would be at least insurance available for those who might be adversely affected?

Mr. Roy: Does he know anything about insurance?

Hon. Mr. Grossman: Mr. Speaker, the matter of flood insurance has been under consideration by the government for some time and as a matter of fact we’re hoping we will be in a position to make a statement on a specific action which we have decided upon in the immediate future. As a matter of fact there is some concern as to whether this thing is possible and whether it could be helpful in a situation which arose a couple of weeks ago, but it is under consideration by the government.

Mr. Speaker: The hon. member for Wentworth.

HAMILTON TEACHERS’ COLLEGE

Mr. Deans: Thank you, Mr. Speaker, a question of the Minister of Education: Is it true that the minister and his ministry have decided to close the Hamilton Teachers’ College and to locate the teaching facility in the Brock University?

Hon. Mr. Wells: Mr. Speaker, it is not true.

Mr. Deans: A supplementary question: Is it then fair to assume that Hamilton Teachers’ College will not be closed?

Hon. Mr. Wells: No, Mr. Speaker. We will have a statement on that in a week or so.

Mr. Cassidy: It is always in a week or so.

Mr. Speaker: Before I call on the hon. member for Downsview, the provincial Treasurer has the answer to a question. Then the hon. member for Downsview.

Hon. Mr. White: More good news, Mr. Speaker --

Mr. Deans: Here is the legislative crier.

Hon. Mr. White: -- on how we saved the Ontario taxpayer more than $8 million by investing cash reserves wisely.

Mr. Cassidy: The Treasurer borrowed $1 million from Hydro this week, you know, Mr. Speaker.

ONTARIO INVESTMENTS IN U.S.

Hon. Mr. White: Mr. Speaker, last week the member for High Park asked me about our investment in US dollar time deposits, and I stated that I would give a report of our activities in this area.

Investment in US dollar deposits has been an essential part of our overall programme for the investment of our cash reserves, and we have confined our current US dollar activity to investments in fully hedged deposits with Canadian banks in Toronto. As the members know, the hedging of these investments by contracting for the sale of the eventual proceeds at an agreed price when we originally arrange the deposits, protects us against any fluctuations in the value of the US dollar so that they are, for practical purposes, the same as Canadian dollar deposits.

But US dollar deposits have over the years offered a better return. For instance, if we had invested in traditional domestic instruments at prevailing interest rates, we estimate the province would have earned interest income totalling about $255 million on its time deposits during the past six years.

The actual interest earned on the province’s time deposits during this period was $298 million. The $43 million difference is due to the decision to invest in US dollar time deposits with Canadian banks.

Let me give you an example, Mr. Speaker. On May 7, Ontario made a 56-day hedged US dollar deposit of $10 million. In round figures, the interest earnings on this deposit will be $184,000. If we had made an equivalent domestic deposit our interest would have been $130,000, almost one-third less.

I want to deal now with the second point raised by the member for High Park on the basis of observations in the Provincial Auditor’s report.

In 1968, Ontario was attracted by the higher interest rates, sometimes exceeding one percentage point higher being offered by Canadian banks on US dollar tune deposits. At that time the value of the dollar was fixed at 92.5 cents US. Since fluctuations of the dollar were minimal, there was no hedge undertaken against currency changes.

An hon. member: Is this a ministerial statement?

Hon. Mr. White: By May, 1970, Ontario had unhedged US dollar time deposits of $647 million. Very few investors anticipated the upward pressure which developed on the Canadian dollar in the year 1970. By mid-year these pressures were so intense that in spite of the purchase of $1 billion of foreign exchange reserves, Ottawa was forced to abandon the fixed exchange rate and the Canadian dollar began to appreciate rapidly. Although the province could have minimized its foreign exchange costs by the purchase of Canadian dollars in mid-1970, such action would have been highly irresponsible as this large transfer would surely have created extreme difficulties for Canada in the foreign exchange market.

The decision was made to remain in an unhedged US dollar position and to unwind that position under a programme of orderly conversion to Canadian dollars as the Canadian dollar stabilized. Under this programme we have reduced our unhedged US deposits to $205 million, and we will be concerting this balance at an appropriate time.

Mr. Speaker, our unwillingness to create severe difficulties in the summer of 1970 obliged us to remain in an unhedged position during the appreciation of the Canadian dollar in the latter part of that year. The exchange costs associated with this decision -- $34.6 million on the assets converted to date -- offsets but does not eliminate the estimated $43 million in increased interest earnings attributable to the province’s decision to maintain a diversified portfolio. The balance, incidentally, works out to $8.4 million which is our net profit, so to speak, on these investments.

Mr. Speaker, it has been necessary to go into considerable detail in the answer but I was anxious to give the House as full an explanation as possible of this important aspect of Ontario’s investment programme.

Mr. Roy: Couldn’t he make a statement?

Mr. Shulman: A supplementary, Mr. Speaker.

Mr. Speaker: I might say that the answer to the question took a longer than normal time, and has constituted a statement by the ministry and is in excess of the usual time. I will, therefore, in fairness, extend the question period by two minutes.

An hon. member: Thank you Mr. Speaker.

Mr. Speaker: The hon. member for High Park has a supplementary?

Mr. Shulman: How much does this province have in unhedged foreign time deposits at the present time?

Hon. Mr. White: It has $205 million.

Mr. Shulman: A further supplementary: How did the minister happen to forget that in his statement?

Hon. Mr. White: I didn’t forget it Mr. Speaker.

Mr. Shulman: The minister missed a page or two.

Hon. Mr. White: As I said: “under this programme we have reduced our unhedged US time deposits to $205 million”.

Mr. Shulman: I beg your pardon. How many unhedged foreign -- I didn’t say US -- time deposits have been placed in me last 12 months?

Hon. Mr. White: We’ve reduced this amount in the last 18 months, or thereabouts, from --

Mr. Shulman: How many new ones has the minister placed?

Hon. Mr. White: None to my knowledge.

Mr. Shulman: None?

Hon. Mr. White: None to my knowledge.

Mr. Speaker: The hon. member for Downsview.

Mr. Shulman: To the minister’s knowledge?

Hon. Mr. White: None to my knowledge. If I am mistaken --

Mr. Shulman: Better check.

SPECULATIVE LAND TAX

Mr. Singer: Mr. Speaker, I have a question of the Treasurer. A remark is attributed to the Treasurer in Wednesday’s Star to the effect --

Mr. Speaker: I’m sure there is an interrogation coming?

Mr. Singer: Yes. It was to the effect that Mr. Stanfield “will do that for us.” That means that Mr. Stanfield, if he gets to be Prime Minister, would allow the deduction of --

Hon. Mr. McKeough: What’s the question?

Mr. Singer: -- the land speculation tax from the federal taxes. Does the minister have any commitment from Mr. Stanfield to this effect, or is this just the minister’s guess?

Hon. Mr. White: Sir, the Progressive Conservative Party of Canada is in full accord with the need for decentralization --

Mr. Roy: Watch it on CBC.

Hon. Mr. White: -- and is in full accord with the need to provide the provinces with additional resources for that purpose.

Mr. Singer: Yes.

Hon. Mr. White: So one can contrast this with the remarks of the federal Minister of Finance --

Mr. Singer: Did the minister get a commitment from Stanfield? Did he get a commitment?

Hon. Mr. White: -and I’ll quote now, from yesterday’s Star.

Mr. Singer: Yes, same article. Did the minister get a commitment, though?

Hon. Mr. White: I quote: “Finance Minister John Turner said in a telephone interview yesterday” --

Mr. Singer: Why doesn’t the minister answer the question?

Hon. Mr. White: -- “the province has no reason to assume the federal government will allow it to intrude” -- and so forth.

Mr. Singer: Why doesn’t the minister answer the question? Did he get a commitment from Stanfield?

Hon. Mr. White: One has the absurd combination of federal policy --

Mr. Singer: Did the minister get a commitment?

Hon. Mr. White: -- to do nothing themselves about inflation and, secondly, to try to prevent the provinces from doing anything about inflation.

Mr. Singer: Did the minister get a commitment?

Mr. Lewis: Is the minister going into federal politics?

Hon. Mr. White: Never. Not ever.

Mr. Singer: Did the minister get a commitment?

Hon. Mr. White: The federal government decided several years ago to vacate, and leave for the provinces, resource industry revenue.

Mr. Singer: Did the minister get a commitment from Stanfield?

Hon. Mr. White: I can hardly believe that even the Liberals, were they re-elected, which is unlikely to the point of impossibility --

Mr. Singer: Did the minister get a commitment?

Mr. Reid: Would the minister like to make a small wager about that?

Interjection by an hon. member.

Mr. Singer: Did the minister get a commitment?

Hon. Mr. White: And I am perfectly sure that the government --

Interjections by hon. members.

Mr. Lewis: Well this bill should be withdrawn now.

Hon. Mr. White: Oh, the member for Scarborough West shouldn’t put himself in league with the speculators.

Mr. Lewis: Not at all. The government should not be pursuing a bill where they have no guarantee. They are in chaos on this bill.

Hon. Mr. White: I am perfectly sure we will be discussing this and other matters with Mr. Stanfield, hopefully, in the middle of June.

Mr. Singer: Did the minister get a commitment?

Interjections by hon. members.

Mr. Speaker: Order.

Mr. Singer: The minister still didn’t answer the question.

Mr. Lewis: It would make a good Provincial Affairs programme.

Interjections by hon. members.

Mr. Singer: A supplementary: Did the minister get a commitment from Mr. Stanfield?

Mr. Speaker: The member is asking the same question. The hon. member for High Park.

An hon. member: It wasn’t answered.

An hon. member: The minister can’t answer it.

Mr. Shulman: Is the minister seriously suggesting that imposing this, or any other tax, will stop inflation?

Hon. Mr. White: Is the hon. member seriously purporting to be an economist?

Mr. Shulman: I can do better than the minister is doing.

Interjections by hon. members.

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

Mr. Lewis: How much time is left, Mr. Speaker?

Mr. Speaker: There are exactly seven minutes left.

Mr. Lewis: A supplementary on this question.

Mr. Speaker: The hon. member for Scarborough West, a supplementary.

Mr. Lewis: Since the evidence is mounting that the present government and the senior civil service will not allow its speculative land tax to be deductible, based on a differing interpretation of jurisdiction relating more to capital gains than to those areas this government has discussed, how can the minister continue to bring this legislation to the floor of the House, presumably pass it, and allow the market to work under the wrong comprehension of what will occur, thus throwing everything into a shambles several months from now -- as well as now?

Hon. Mr. White: Mr. Speaker, this form of tax in other resource areas has not been considered as income tax for federal income tax purposes, and I have no reason to think that this will be the case some weeks hence, whether or not Mr. Stanfield leads the government. I am not going to let bad-tempered mutterings --

Mr. Lewis: But the Treasurer knows it is improbable.

Interjections by hon. members.

Mr. Singer: Can he prove they won’t do otherwise?

Hon. Mr. White: -- bad-tempered mutterings relayed via the Toronto Star deter us from a very strong measure to deal with inflation in this province.

Mr. Singer: Oh, the Toronto Star again.

Mr. Breithaupt: A suspicious source!

Mr. Lewis: Well, well, if it’s in the Toronto Star --

Hon. Mr. White: And if it should happen at some future date --

Mr. Lewis: Talk about bad temper!

Hon. Mr. White: -- that the federal government does take us into --

Interjection by an hon. member.

Hon. Mr. White: -- the constitutional courts on the matter then we’ll fight it every inch of the way.

Mr. Lewis: Oh, ho, ho. It’s their jurisdiction.

An hon. member: Settle down and shut up.

Mr. Speaker: The member for Ottawa East.

MINIMUM WAGE RATES

Mr. Roy: Mr. Speaker, in the absence of the Minister of Labour (Mr. Guindon) and the Provincial Secretary for Social Development (Mrs. Birch) and the Premier, I will ask a question of the Treasurer --

Interjections by hon. members.

An hon. member: Quite a few missing today.

Mr. Roy: -- and it deals with the minimum wage in this province.

As a senior minister, doesn’t he find it embarrassing that he will have people working in this province for an hourly wage which is going to be less than that received by inmates in federal institutions who are going to be receiving the federal minimum wage? How can he tolerate that in this province?

Mr. Lewis: Less than Manitoba, less than British Columbia.

Hon. Mr. White: Well, sir, our unemployment rate here is something like 3.8 per cent -- I am sorry, I can’t bring the exact figure to mind --

Mr. Lewis: That’s right.

Hon. Mr. White: -- and I think the question might be rephrased. Does a person in the Maritimes or in certain of the western provinces, where unemployment ranges up to 27 per cent, have to go to jail to get a decent living from the federal government? Now, that’s the question.

Interjections by hon. members.

An hon. member: He’s got to be kidding!

Mr. Roy: A supplementary, Mr. Speaker.

Interjections by hon. members.

Mr. Breithaupt: He is going to run federally.

Mr. Roy: Does the Treasurer intend to raise the minimum wage in this province and not allow a situation where in fact, hard-working, honest, law-abiding citizens in this province will be making $2 per hour --

An hon. member: Let them try working a little harder.

Mr. Roy: -- while inmates in federal institutions will be making $2.20 an hour. How can he tolerate that in the richest province in this country?

An hon. member: Is there any place you’d rather be?

Hon. Mr. White: Yes, apparently the unemployment rate is 3.6 per cent, as I had stated.

Mr. Roy: Just answer my question. How can honest people be blamed?

Hon. Mr. White: The minimum wage, sir, is under consideration by the government. I expect the Minister of Labour will be referring to this within a week.

Mr. Good: We haven’t a Minister of Labour.

An hon. member: There is not a minister in here.

Mr. Breithaupt: Which minister?

Hon. Mr. White: But I repeat my difficulty. Here you have 27 per cent unemployed in Newfoundland -- 27 per cent --

Mr. Breithaupt: They have a Conservative government, no wonder!

Interjections by hon. members.

Mr. Roy: It’s a Conservative government!

Interjections by hon. members.

Hon. Mr. White: -- because of inappropriate government policies -- 27 people out of 100.

Interjections by hon. members.

Hon. Mr. White: Do the people in Newfoundland have to go to jail to get a decent living because of these misguided, out-of-date federal policies?

Mr. Breithaupt: Or because they have got a Conservative government. It is as good a reason as any.

Mr. Roy: Yes, yes, it’s a provincial responsibility.

Interjections by hon. members.

Mr. Roy: It’s going to pay you to go to jail in this province, if this government keeps it up.

Hon. Mr. White: It doesn’t pay you to here.

Mr. Lewis: The Treasurer can’t save Bob Stanfield’s job.

Mr. Speaker: The hon. member for Sudbury.

INVESTMENT OF OMERS FUNDS

Mr. M. C. Germa (Sudbury): Mr. Speaker, a question of the provincial Treasurer. With reference to his budgetary statement that 20 per cent of OMERS funds would be available for municipal borrowing, can he assure the House that the rate paid will be at least that of the provincial average for the respective year?

Hon. Mr. White: Absolutely not! Does the member mean to say that I am called upon to guarantee those funds that OMERS invests in municipal or industrial bonds? Not very likely. That’s the chance they take.

And incidentally, when the Hospitals of Ontario Pension Plan was let loose, their earnings fell from something like eight per cent to something like two per cent.

Mr. Germa: Mr. Speaker, on a point of clarification, is he saying the OMERS board now has freedom to invest in any area of the market as they see fit?

Hon. Mr. White: My hon. friend must know better than that. I did say that next year they are going to be permitted to invest 20 per cent of their total inflow of cash for that year in debentures other than Ontario debentures.

When they have this investment facility in place well see what the experience is; we’ll see whether that can be increased. I’ve got a meeting coming up very shortly with OMERS -- as a matter of fact, it’s on Thursday, June 20 -- to discuss this and related matters.

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

EXTENSION OF OMERS BENEFITS

Mr. B. Newman: Mr. Speaker, I wanted to ask a question of the provincial Treasurer dealing with OMERS also.

Is the ministry considering extending the pension benefits under the OMERS scheme so that elected officials, other than councillors -- that is, officials of utilities commissions and school boards -- could have the benefits of the OMERS scheme?

Hon. Mr. White: Well, this has been mentioned to me. I don’t know what stage it is at. I would not be opposed to that, I don’t think, but it is at an early stage of consideration.

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

TORONTO ISLAND AIRPORT

Mrs. Campbell: Mr. Speaker, my question is of the Minister of Transportation and Communications. In view of the statement he made referring to the minutes, is the minister aware of the fact that the committee had taken the position that the interested persons would have the minutes, not a summary, and that in fact a letter from Mr. Johnson, your chairman of your committee, sent to Ald. Eggleton, under date of May 17, 1974 -- when he denied him too, the right to have an observer present -- advised that copies of the minutes would be available?

In view of the statement made by the minister, in which he said it was not a provincial matter, is he aware of the Statement in the proper minutes that MTC’s participation in the north was ongoing --

Mr. R. G. Hodgson: Is this a speech or a question?

Mrs. Campbell: -- but that in the future they would be involved in southern Ontario? Would the minister explain that position?

Hon. Mr. Rhodes: Mr. Speaker, I am not aware of what goes on in that committee. I would like to make it clear again that I am not a member of that committee, that the committee is not my committee and that the chairman of the committee is not my chairman. I’ll leave it at that.

I haven’t seen the minutes that the hon. member is referring to, but I do know that there has been consideration given by the government to attempt to develop in southern Ontario, an air service similar to the type that has worked so effectively in the northeast and in the northwest. There have been requests from municipalities that are not served at present by the other ordinary carriers, to give consideration to including them in any such service.

I point out to the hon. member that there has been no budgetary allowance made for that programme in southern Ontario at this time. But in keeping with the requests that have been made to the ministry, we feel there is a responsibility to look into the possibility of that developing. Whether or not that would mean it would have to include an airport on Toronto Island, I am not prepared to say. In fact, I would go back to the question asked of me by the hon. leader of the New Democratic Party, and say that as far as I am concerned, I personally wouldn’t be prepared to recommend or even look at another airport on Toronto Island. But I again point out it is a matter that will be discussed with --

Mr. Lewis: Say that again. Say that again!

Hon. Mr. Rhodes: I would say, as a personal opinion, that I wouldn’t be prepared to recommend another airport on Toronto Island.

Mr. Lewis: Now that is what the minister should be saying I He should have been saying that 72 hours ago.

Hon. Mr. Rhodes: What I am saying is that this is a federal matter and that we are involved, as a part of this committee, to gather information.

Mr. Cassidy: Oh, come on.

Hon. Mr. Rhodes: The very report that was being referred to, the working paper, is a summary of what has gone on for the past 10 years --

Mrs. Campbell: How does the minister know?

Mr. Rhodes: -- and the particular options have evolved out of that information, gathered over the last 10 years. I am amazed that the hon. member for St. George, who is so intimately involved in this community, is not aware of these past studies.

Mrs. Campbell: A supplementary, Mr. Speaker --

Mr. Speaker: I regret to say that we have exceeded the question period by five minutes now.

Petitions.

Presenting reports.

Motions.

Introduction of bills.

EDUCATION ACT

Hon. Mr. Wells moves first reading of bill intituled, the Education Act, 1974.

Motion agreed to; first reading of the bill.

Hon. Mr. Wells: Mr. Speaker, this is the bill that we introduced during the last session and was known as Bill 255. It is a consolidation of the Ministry of Education Act, the Schools Administration Act, the Public Schools Act, the Separate Schools Act and the Secondary Schools and Boards of Education Act.

As you are aware, sir, that bill has sat on the order paper, it has been reviewed and it has been revised in many areas. The revised version now comes before the House. I should just particularly draw to the attention of the House that one of the concerns of some of the separate school trustees in this province concerned the Separate Schools Act and their need for a definite assurance that there would be no erosion of their rights -- something which I indicated when I introduced the bill on Nov. 30 would not happen, and which has been further strengthened by the addition of several sections to this draft bill.

It’s my intention that after second reading this bill should go to the standing committee on social development for full discussion of all the sections, including discussion with the members of the public. Perhaps, sir, I could at this point also mention, since this is a lengthy bill and just in order that we can know the timetabling for this session, I now find that I will have to change an answer that I gave in this House a few weeks ago about introducing the bill on teacher-school board negotiations. It would not be possible now for me to introduce the bill until the middle of June at the earliest, which would not give, adequate time --

Mr. Lewis: Hear, hear.

Hon. Mr. Wells: -- for full discussion, so I do not intend to introduce that particular bill until the House begins next fall.

Mr. Lewis: The minister is right about that. You see, sense comes to those who stand and wait.

Mr. B. Newman: Is it the intent of the minister to have this bill proceed through the committee and come into effect before the House rises for the summer break?

An hon. member: He didn’t hear the question.

Mr. B. Newman: Is it the intent of the minister to have this proceed right through the committee and become effective before the summer break?

Hon. Mr. Wells: I think that the answer to that really has to rest with the House. It’s pretty hard for me to predict the type of discussion or the length of discussion that will go on. I understand the committee still has many sections in the Health Disciplines Act to do and that after that it will be able to get down and do this bill.

Mr. Lewis: Mr. Speaker, may I ask the Minister of Education if he does in fact have the collective bargaining bill in a state of preparation sufficient to bring it forward on June 15 or thereabouts, and since rumour has it we won’t be adjourning for at least six days beyond that, could we not see first reading of that bill and allow it to sit over the summer so that people would have access to it, since apparently he will have it ready before we adjourn?

Hon. Mr. Wells: I think not, Mr. Speaker, because really it would have been a rush to get this bill and that one ready, and it would be so near the end of the House session that I think I would really rather leave it and introduce it in the fall.

Mr. Cassidy: But this one is ready now. The ministry has lots of time to prepare the other one.

Hon. Mr. Wells: This bill is ready now, but as the hon. members realize, once we get into committee I will be very busy with this bill.

Mr. Cassidy: All we need is first reading, that’s all.

Mr. Speaker: Are there any further bills? If not, the hon. Minister of Transportation and Communications has a report to make. Could I have the consent of the House to revert to reports?

Hon. Mr. Rhodes: Thank you, Mr. Speaker. I would like at this time to place before the House a report entitled “The Socio-Economic Effects of Telephone Rate Increases.”

Mr. Lewis: They are all bad, that is what they are. He doesn’t need a report to tell him that much. He has told us how communications concerns people.

Hon. Mr. Rhodes: Would the member really like me to tell him the obvious? Really? Here in this open House?

Mr. Lewis: He does it every day. He does it all the time.

Hon. Mr. Rhodes: No, I won’t tell him the obvious.

Mr. Speaker: Further bills?

REGULATION OF PRIVATE VOCATIONAL SCHOOLS ACT

Hon. Mr. Auld moves first reading of bill intituled, An Act to provide for the Regulation of Private Vocational Schools.

Motion agreed to; first reading of the bill.

Hon. J. A. C. Auld (Minister of Colleges and Universities): Mr. Speaker, the purpose of this bill is to provide an up-to-date registration system for private vocational schools to replace the Trade Schools Regulation Act. The bill will safeguard both the rights of the persons operating the schools and the persons using the schools. To this end, a private vocational school review board is established to conduct hearings under the Act.

Hon. Mr. Winkler: Mr. Speaker, before the orders of the day, I would table the answers to questions 8 and 19 standing on the order paper. (See Appendix, page 2675.)

Mr. Speaker: Orders of the day.

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

LAND SPECULATION TAX ACT (CONTINUED)

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

On section 19:

Mr. Chairman: On Bill 25, we were discussing section 19 and I am not sure whether the minister placed his motion or not.

Hon. A. K. Meen (Minister of Revenue): No, I didn’t get my chance, Mr. Chairman. I move that section 19 of the bill be deleted and the following substituted therefor -- the substitution would be as it appears in the reprinted version in the hands of the hon. members.

Mr. Chairman: Mr. Meen moves the new section 19 as printed -- is it necessary to read it?

Mr. J. A. Renwick (Riverdale): This is the same section with which we had the problem in the Land Transfer Tax Act, as I recall. This was where the agreements were to be filed with the minister before a certain date. He has now eliminated that requirement in this bill, as he did in the other bill, so that presumably we are left in the very nebulous position we were in the previous bill, that with written agreements, so long as at some point in time, be it ever so long, the minister is satisfied that the agreement existed, there will be no tax, if it meets the requirements in the section.

We feel the same as we did on the prior one. The date required for filing those agreements with the minister is a required protection for the revenue, and the minister has given way to the professional advice which he has got from those who have special interests in making certain that agreements such as this can be brought into existence or found in files, long after the time when the Act was brought into force.

Hon. Mr. Meen: I would agree that certainly it does give the minister that degree of flexibility, Mr. Chairman, and it certainly became apparent to me that flexibility was necessary. I would expect that in the ministry we may continue to receive submissions of this nature from time to time -- I would presume, also, at an-ever diminishing rate -- but I would not be at all surprised if, for some time to come, there was occasion when some person -- and it would not necessarily be a lawyer; some individual might have been holding his documents -- approaching the time when it was necessary for registration to take place, he might appear and find, otherwise than by this amendment, that he was precluded from registration except subject to the Act. The same arguments which I advanced in respect of the Land Transfer Tax Act do apply here.

Mr. Chairman: The member for High Park.

Mr. M. Shulman (High Park): I want to make sure I am discussing the right section 19. Is this the one with the pointing finger above it? That’s the one you want to have in, is it?

Hon. Mr. Meen: Yes.

Mr. Shulman: Okay, because I thought you had reprinted it again. I am sorry. The point I want to bring up here is mildly disturbing to me. This morning I phoned the office of the Minister of Revenue to ask about this very specific section because I found it very difficult to understand how you could ever know when an agreement had been drawn up. What is to stop someone coming to you five years hence and saying “This was drawn up on April 8, 1974”? There is no way of really knowing this. In any case, I phoned the minister’s office --

Mr. E. R. Good (Waterloo North): Chemical analysis of the ink.

Mr. Shulman: Pardon?

Mr. Good: Chemical analysis of the ink.

Mr. Shulman: Yes, apparently they are getting ink specialists. I am not even going to belabour that point because the whole thing went into a cocked hat as a result of my phone call.

First of all, you are are told to phone 965-1211 and they say, “What do you want?” You say “The Minister of Revenue”. “What do you want to ask about?” You tell them what you want to ask about and they say, “You must phone 965-1774.” I tried that for half an hour from 9 to 9:30 but that line is steadily busy. Apparently, I guess, they have only one line and millions of people are inquiring what the hell is going on. Finally, I phoned back again to 965-1211 and I said, “I have really got a problem --”

Mr. V. M. Singer (Downsview): May I interrupt the member on a point of order, Mr. Chairman? I don’t believe there is a quorum.

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, I see a quorum.

Mr. Chairman: I recognize the member for High Park, he may proceed with his question.

Mr. Shulman: It wasn’t exactly a question, it is more in the nature of a statement. Mr. Chairman, I was explaining my problem in getting through to my friend the minister. I want to inquire about a property which I want to sell -- how much tax should be paid? I had some difficulty.

Apparently there is a special number one must phone, 965-1774. This line is perpetually busy, because I presume they have only one line and there are 10,000 people trying to find out. In any case after half an hour I gave up and I phoned back to Queen’s Park again and I explained my problem and she said, “If you want to you can hold on, but that line is always busy.” So I held on again, and fortunately it only took 16 minutes -- 14 minutes to 10, she triumphantly came back and said she had a line for me.

I have a confession to make, Mr. Chairman. I hope you are not going to be upset with me. I didn’t want to use my name because I was afraid that I might get extra special attention and I used my secretary’s name in this conversation that followed.

Hon. Mr. Meen: Oh, dirty pool.

Mr. Shulman: Her name is Worobec. I explained that I was Mrs. Worobec -- I have a high voice -- that I owned a property on Roncesvalles Ave., which was rented out to various persons, and that I was going to sell it next month.

I was going to explain as under section 19, that I already had a prior agreement -- you know that whole guff -- but it never got to that section you see, because this gentleman who I spoke to in the department, his name is Walker -- that’s what he said his name was and I presume they are not changing their names to protect themselves yet --

Don’t go away, Arthur. We are losing the minister again, we will lose the damn quorum again. How can he listen to me and talk to them at the same time?

Hon. Mr. Meen: I am listening.

Mr. W. Hodgson (York North): The member had better get a couple of his own members to back him up.

Mr. Shulman: I just want the minister; I don’t need anybody else. If Arthur will just stay here I will be satisfied.

Mr. W. Hodgson: We only have three NDPs in the House.

Mr. Shulman: Here he comes. Okay.

I explained to Mr. Walker that I had this building which I wanted to sell. He said: “What are you going to sell the building for?” And I said: “Eighty thousand dollars. My problem is, how can I be sure what it was worth on April 9th, 1974?” He replied: “If you will send us a letter giving it as your opinion, that the building was worth $80,000 or more on April 9th, 1974, there will be no tax payable and we will require no appraisal and nothing else.”

I thought, good Lord it can’t be true -- because, if so, what in the world have we been fighting in the House about for all these weeks and months? It has all been for nothing. No appraisal is needed. No tax to be paid. All we have to do when we are ready to sell property is write our own letters, saying the property was worth more on April 9th, 1974.

Well, I hung up and I thought to myself, I must have misheard.

Hon. Mr. Meen: Mr. Chairman, on a point of order. I do enjoy listening to the hon. member when he is posing these stories and telling us of his experiences, but really, I see no relationship between this story and section 19 of the bill.

Mr. Chairman: I was wondering that myself.

Mr. Shulman: Well, I will tie it all together.

Mr. Chairman: If you can just relate it to section 19.

Mr. Shulman: What I was attempting to investigate, before I got sidetracked by Mr. Walker, was how in the world he would know whether I had made an agreement prior to April 9th, 1974, which is what this section is about -- at least the one I have got in this book, unless you have changed it. I did ask for another book and they brought me another, but this one looks very much the same.

In any case what I am trying to get through to the minister is: Mr. Walker said not to worry -- no tax payable, no appraisal necessary, no documentation necessary. All I have to do is send in a letter saying, in my opinion, my building was worth more than I am selling it for now.

The question I pose to the minister is: What are we doing? What is this all about? If we go back umpteen sections and several weeks ago, when we were asking: how are you going to know? -- you said, “You get a real estate agent to give an appraisal.”

Now apparently that has been abandoned too. All that is necessary now is that the man who is selling the property sends in a letter saying that his property really hasn’t gone up in value since April 9th, 1974.

Quite frankly, Mr. Chairman, I found this so extraordinary that I had my secretary actually phone back herself. She got another gentleman, and the same story. This second gentleman said, “We have been instructed that we are to accept a letter from the owner. If he gives us such a letter, we will give the certificate and there will be no tax.”

What are we doing here? What’s it all for if that is all you are doing?

Hon. Mr. Meen: Do you want an answer?

Mr. Shulman: Yes, I would really like an answer.

Hon. Mr. Meen: Well we are completely off the point again because the hon. member is talking about establishment of value, not whether an agreement had been entered into or reached prior to April 10th, which is what section 19 is about.

But since he has asked the question, let me simply point out that between April 9, and this day, May 30, some seven weeks have passed. If we go on very much longer, we will not be able to accept that very elementary kind of support material for an alleged evaluation.

Quite clearly with the immediate reaction on the real estate market following the April 9 announcement -- indeed we hope that the effect on the market is something more than temporary -- there has not been, in our opinion, any across-the-board increase in valuations.

In any event, it is so close to April 9, with the elapsed time of seven or eight weeks, that it would not be reasonable to assume that at the time a contract was entered into, which is sometime between April 9 and now -- we are still seeing agreements that are being consummated now, and will be consummated for some time in the future, that were executed shortly after April 9, as well as those that were executed before it -- but in that general region they have established a general value and so there isn’t any problem as to confirming that there was an insignificant increment of increase between the date of April 9 and the date of the completion of the transaction by the registration of the documents.

So the staff have been instructed, as the hon. member for High Park has said, to accept a confirmation of this nature. But before very long we are certainly going to have to take the somewhat more sophisticated and --

Mr. P. D. Lawlor (Lakeshore): Why should you bother? You know the prices are going to go down. They couldn’t possibly go up with this bill.

Hon. Mr. Meen: -- complicated route of confirmation of the value, on or about April 9.

Mr. Shulman: I’m sorry, when did the minister say the change was going to take place?

Hon. Mr. Meen: For one thing, when the bill is passed. Right now there is no legislation in place.

Mr. Shulman: The minister’s facts are wrong. I don’t know if he has seen today’s Financial Post --

Mr. Chairman: Order.

Hon. Mr. Meen: Let’s get back to the point.

Mr. Chairman: Order please. The discussion up to now has had nothing to do with section 19.

Mr. Shulman: I beg your pardon, it most certainly has. Well, let’s stop fighting and --

Mr. Chairman: Order, please.

Mr. Shulman: We’ll be all through in three minutes if we don’t fight. Let’s not have another Tuesday.

Mr. Chairman: Keep it on section 19, please.

Mr. Shulman: Okay, I’m really trying very hard.

Mr. Chairman: Which, if I may point out, deals with agreements which existed prior to April 9.

Mr. Renwick: But it deals with special kinds of agreements, Mr. Chairman.

Mr. Good: Those made before April 9.

Hon. Mr. Meen: Having to do with value at that time.

Mr. Shulman: Right.

Mr. Good: No, there’s nothing about value in there at all. It says --

Mr. Renwick: On a point of order, it has to do with agreements which fix values on dates --

Mr. Good: Prior to April 9.

Mr. Renwick: -- prior to April 9, or not later than April 9.

An hon. member: And they’re excluded so you don’t have to worry about them.

Mr. Shulman: We sure do have to worry about them. We don’t know when they were made. How do we know whether they were made on April 9, 1973, or --

Mr. Chairman: Order, please. The discussion up to now has had nothing to do with section 19.

Mr. Shulman: I can bring it up under 20 again if you’d rather, but I’m almost finished.

Mr. Chairman: It may be under 20, I don’t know.

Mr. Shulman: Let me just very briefly end up by saying that if this is the reason he’s following that logic he’s wrong. Because according to today’s Financial Post, the prices have gone up. There are two averages used. One is LePage’s, which covers everything in Metropolitan Toronto. From April to May the average price went up from $42,240 to $45,095, according to LePage. The other figure, which comes from the multiple listing service, is similar: From $50,000 to $54,000. So it’s nine or 10 per cent. Maybe nothing.

Hon. Mr. Meen: That isn’t nothing.

Mr. Shulman: Well, that’s what you’re saying.

Hon. Mr. Meen: I am saying that there is no legislation in place and that I think it behoves us to get this legislation in place so that my staff can get on with taking a good look at some of these sales.

Mr. Shulman: Is the minister saying that because the legislation is not in place as yet, it’s not in effect?

Hon. Mr. Meen: Of course it’s not in effect.

Mr. Shulman: Then why are people already running around going through this nonsense of certificates?

Hon. Mr. Meen: Because we’re warning you, my friend, that when this is in effect it’ll be retroactive to April 9, that’s why.

Mr. Shulman: So, in effect, it’s not in effect, but it will be in effect as soon as it’s in effect, and it will affect us now, today, so it is in effect.

Mr. J. R. Breithaupt (Kitchener): Well, in effect, yes.

Mr. Shulman: In effect, it’s in effect. Let’s get back here. The whole thing is so ludicrous that we find, in each and every section that we go through, there’s a way for someone to avoid paying the tax. I forget what the figure was the hon. minister suggested is going to be collected this year.

Mr. Lawlor: That’s $25 million

Mr. Shulman: Not $25 million? It will be closer to $2,500. If we look at section 19 now, specifically --

Mr. Breithaupt: So it is a success.

Mr. Shulman: Not a success, it’s uncontrollable, it’s uncollectible First of all, the only people you can catch --

Mr. Chairman: Order, please. Order, please. Side discussions are out of order.

Mr. Shulman: I’m speaking through you, Mr. Chairman, to the hon. member for Kitchener.

Mr. Chairman: Speak to section 19, please.

Mr. Shulman: Okay. What section 19 does is to write a blank cheque for any speculator who wishes to speculate and not pay the tax. It’s the same old thing once again, an invitation to fraud.

Interjection by an hon. member.

Mr. Chairman: Order, please.

Mr. Shulman: May I put a question through you, Mr. Chairman, to the member for Peterborough (Mr. Turner)? What are you going to do, use a handwriting expert or a paper expert to find a hole in the papers?

Hon. Mr. Meen: If this goes on long enough, we can use --

Mr. Shulman: The minister may very well have to.

I am not sure whether the minister is serious about this bill actually preventing speculation of land or whether it is just public relations value. If it’s public relations value, if the minister will say so, I promise I won’t ever say another word on the bill. Ill never criticize you again because the honesty will overwhelm me.

Hon. Mr. Meen: What was the member’s question?

Mr. Shulman: The question is does the minister really intend to try to collect any money under this bill? If he does, section 19 is a blank cheque to anybody who doesn’t want to pay the tax.

As late as 1992, they can come doddering in and say, “Many score years ago, I discussed with my friend, the member for Downsview (Mr. Singer), selling this property and we had come to the conclusion we were going to sell it for $1.8 million. In fact, I have a memorandum here, signed April 1, 1974, to that very effect.” And the government hasn’t any way of disproving it.

Anyone who pays this tax has to be quite simple, because the minister has given everybody a blank cheque. Anyone who owns property prior to April 9, 1974, needn’t pay that. The only people you can possibly hope to collect from are those who buy after April 9, 1974.

I suggest to the minister once again for the 94th time -- no, sorry, the 95th time -- that he has made an error in this bill. When he rose and said he was eliminating section 19, as he did a few minutes ago, he should have just sat down at the end of those words, and then he would have been in good shape. What the new section 19 does is completely negate the entire bill. I won’t belabour it. He knows I’m right and he’s sorry he can’t admit it here in the House, but we understand each other perfectly.

Mr. Chairman: Does the motion carry?

Section 19 agreed to.

Mr. Chairman: On section 20, I believe the hon. minister has a series of amendments.

Mr. Breithaupt: Perhaps, Mr. Chairman, we could have the amendments put and then we would all know just what we are supposedly going to be discussing.

Hon. Mr. Meen: Yes, Mr. Chairman, I would like to do that and then offer one or two comments before we get into section 20 of the bill. I move that sections 20, 21 and 22 of the bill be renumbered respectively as sections 23, 24 and 25 and that the following sections be added to the bill.

Then the following sections to which I make reference are section 20 as it presently appears in the bill, section 21 as it presently appears in the bill and then section 22, which does not appear in the bill as reprinted for the benefit of the committee but for which there should be copies available for you, Mr. Chairman, and all hon. members who would like to have them.

Section 22 then reads as follows:

Notwithstanding any other provision of this Act, where a transferor, who has not previously disposed of designated land exempt in whole or in part under this section, disposes of designated land that was his principal residence for a period of five consecutive years prior to his ceasing ordinarily to inhabit the designated land as his principal residence; and where at the time he ceased ordinarily to inhabit the designated land as his principal residence the transferor was 65 years of age or older; and where at the time of the disposition the transferor is ordinarily inhabiting as his principal residence premises that are not owned in whole or in part by him or his spouse or by both of them, the designated land so disposed of is exempt from the tax imposed by subsection 1 of section 2 to the extent that the designated land would have been exempt by virtue of clause (e) of section 4 had the transaction to dispose of the designated land at the time he ceased ordinarily to inhabit it as his principal residence and had clause (e) of section 4 then been applicable to the disposition.

Mr. Chairman I think I should ask you if you would like to put the motion first.

Mr. Breithaupt: We are prepared to take it as read by the minister, Mr. Chairman.

Mr. Chairman: I will just place the first part and then we’ll take the rest later.

Hon. Mr. Meen moves that sections 20, 21 and 22 of the bill be renumbered respectively as sections 23, 24 and 25 and that the following sections be added to the bill as printed.

Mr. Breithaupt: Mr. Chairman, of course, we have not had really had much of an opportunity to look at the sections since the minister has just proposed them.

Mr. Chairman: Would the minister be prepared to explain them?

Mr. Breithaupt: I think it might be helpful if the minister would give us his overview of the new sections that are being placed. I have before me a new section 22 but I don’t have a new section 20 or 21.

Mr. Renwick: They are in the bill.

Hon. Mr. Meen: They are in the bill but renumbered.

Mr. Breithaupt: All right.

Mr. Singer: Could you quickly tell us how the numbering scheme goes now?

Mr. Chairman: Do you want me to repeat that?

Mr. Singer: I’m a little lost here.

Mr. Chairman: From the original bill Mr. Meen moves that section 20 --

Mr. Singer: Which one are we looking at? Are we looking at the first printing, the second printing or what?

Hon. Mr. Meen: Mr. Chairman, for the benefit of all members, the complication was the renumbering of the sections that followed sections 20 and 21. In adding a new section, which 1 wanted to insert following section 21 as it stands in the reprinted bill, that displaced the other sections down by one number. The motion, therefore, had to include the references to the present section 22, which as the members know, is the section dealing with regulations and Lieutenant Governor’s orders in council.

The only difference is that the new section 22 -- which deals with our senior citizens and their principal place of residence, which they will note is for a period of five years prior to the time when they vacate the premises to take up rented accommodation, possibly with a daughter or a son or in a nursing home or wherever -- new section 22 then moves in above old section 22.

The other two sections, 20 and 21, are precisely as they appear in the bill as reprinted for the benefit of the committee. I would suggest, Mr. Chairman, we would deal with section 20 and then with section 21. This will give members who are more interested in section 22 to have a good look at it and let me have the benefit of their views at that time.

Mr. Chairman: This is section 20 as it appears at the bottom of page 27?

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

Mr. Chairman: The member for Riverdale.

Mr. Renwick: My first comment -- and I really ask this simply by way of explanation -- is that the tightness of subsection 1 of section 20 seems to me to be a matter of some concern with the use of that word “exclusively.” There are a substantial number of buildings which have living accommodation in them which would otherwise qualify but on lower floors or on the ground floor have stores of some kind or another in the building.

It does seem to me that it’s a little bit unreal only to grant this particular benefit to those properties that happen to be exclusively devoted to living accommodation. On a strict interpretation of the bill somebody might believe he is entitled to the benefit of these provisions and find that he isn’t so entitled. I’m not certain that I know exactly how to alleviate against that stringency but it is too stringent in my view.

Mr. Chairman: The member for Waterloo North.

Mr. Good: On this section of the bill, I just want to make sure that I understand its implication properly. The way I interpret it, the bill means that in this new classification, investment property which would be a fourplex or a sixplex is rented so that the tenant uses it as his principal place of residence. If the part of the rental property is the principal place of residence and another part is commercial and industrial, it would be exempt under other sections of the bill from being designated land. But, as I understand the way this section deals with investment property, which is really housing units owned by someone other than the occupant of the house, it will be exempt if, over a progression of years, the tax becomes less and less after three years, so that each year up till 10 years there would be no tax apply to that particular property.

Now this theory is good in my view and in the view of our caucus. We thought that this principle should apply to other types of land and would solve the whole matter of designation. I think the basic premise we must return to is the difference between speculation and investment.

In my view and in the view of many in this caucus, speculation is when one buys with the idea of a quick turnover if the price is right. You might buy for a long-term investment, but if you have a sudden opportunity to make a huge profit by turning the land or apartment building or whatever it might be, over quickly, that would be speculation and not in the best interests of providing, adequate housing facilities at proper prices. To eliminate the driving up of costs in the housing field. I think the 10-year term is a reasonable length of time.

People who are buying residential property in multiple units, particularly in apartment buildings, are doing so as an investment. And without people entering the investment field in multiple unit housing, we are going to find that it would be very detrimental to the whole housing picture across the province. So this I think is a very acceptable solution to the problem which existed in the first bill, and we will support this section of the bill. I don’t know about the matter raised by the member for Riverdale; to me it doesn’t seem to be a problem because if it’s not exclusively residential and is commercial or industrial, it would be exempt under other sections of the bill.

Mir. Renwick: No, it works the other way.

Mr. Chairman: The member for Lakeshore.

Mr. Lawlor: Mr. Chairman, I take it, first of all as a matter of order, that we will be discussing the two subsections separately. I suppose we can discuss them together if we want, but I have quite different things to say on the two subsections, as has been the case throughout the bill.

On this particular one, the word to conjure with in the context is “exclusively”. If property is commercial then it’s outside your legislation. If it’s mixed though, that’s the warp and woof of the arguments from over here. Is there a principle, or ought there not to be a principle, whereby a prorating process would take place as between the commercial on one side of the fence and the residential on the other. Or if it’s mixed, does it fall, in your opinion, completely outside the purport of the legislation?

Mr. Singer: Mr. Chairman, on a point of order. I am sorry to interrupt the member, but I don’t think there’s a quorum.

Hon. Mr. Meen: Oh, for goodness’ sake. You and the member for High Park.

Interjections by hon. members.

Clerk of the House: Mr. Chairman, there are 18 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: Thank you. I recognize the member for Lakeshore.

Mr. Lawlor: I have pretty well made the point that I am concerned about in the first section. I just want to get on to the record exactly how the minister regards the mixed commercial-residential concept. Secondly, has he given any thought to a scheme of pro-rating within the ambit of that? I see nothing on that basis, although he has gone to some lengths elsewhere in the course of the bill, to set up provisions for pro-rating in diverse circumstances.

Hon. Mr. Meen: The hon. member has raised an interesting point, Mr. Chairman. In section 1, subsection (d), I think it is -- no, I am sorry I have the wrong subsection -- section 4 subsection (d); excuse me -- it is on page 12 and we talk about predominantly tourist, commercial, industrial and so on. I have a notion that we might overcome the difficulty which I read in what the member for Riverdale and the member for Lakeshore have said about the use of “exclusively” here. I think that is a little stringent.

Mr. Renwick: Yes, I agree.

Hon. Mr. Meen: It might be that the word “predominantly” in there would overcome the problem. The two situations -- the industrial, commercial, tourist and so on on the one hand, and residential use on the other -- are mutually exclusive. They have to be. Presumably, if we use “predominantly” with respect to the one, we would overcome any problem if we use “predominantly” with respect to the other, namely rented accommodation ordinarily inhabited by the tenant.

Mr. Renwick: Presumably; we are quite happy to move on --

Hon. Mr. Meen: Yes. On that basis I think we could consider it.

I might ask your guidance, Mr. Chairman. Do the hon. members wish to discuss subsection 2 to 20, while my advisers reflect on this a little more?

Mr. Chairman: Is that satisfactory?

Hon. Mr. Meen: And we might go back on to 20 subsection 1.

Mr. Renwick: Mr. Chairman, I would suggest we stand subsection 1 down for the moment.

Mr. Chairman: All right, we’ll call subsection 2 then.

Mr. Lawlor: Just permit me a word or two so that my ruminations may get mixed up with their cerebrations, or vice versa.

I can see the use of “predominantly” in the context that you mentioned previously as to the designation of a tourist establishment. But I suggest that there could be very critical ambiguities in connection with that particular term in this context. That’s as much as I want to say about that at the moment.

It will have to be scouted very carefully, I suspect. I can’t give up a thing so easy as that. Again, I think the better path into virtue would be to try to segregate on the basis of that portion which is attributable to commercial over against the residential on some sort of formulae. It’s far more complex; I concede that. But I also think it goes more to the purpose -- instead of getting into equivocations arising out of the terminology like “predominantly.”

As to the second clause, what is the raison d’être or policy behind the three-year period? What’s in the minister’s mind as to why the three-tenths doesn’t begin tomorrow morning, so to speak, rather than the holding over this period of time?

Mr. Renwick: You mean one-tenth of the year, starting now.

Mr. Lawlor: Yes, one-tenth of a year starting now; rather than the other. The design there must be to force individuals in this particular investment category, to stay off the market; to withhold their lands from the market until they can accumulate the benefits.

The second thing about it arises out of this first subsection. Again, when you’ve got the mixed concept -- and even if the word “predominantly” was there -- if they were going to be hit by the tax, wouldn’t it be in their interest to convert either in one direction or the other -- particularly if the other was as to the time running?

If time had run seven or eight years, and the seven-tenths have been picked up, would it not be in their interest to convert the residential -- I’m sorry. If it were an earlier time than that, after the first couple of years of this legislation, why wouldn’t one empty the place of tenants completely and turn to commercial and thus rid yourself of the burdens of this Act? The other way around, later on in the day, having accumulated certain tax benefits, then there may be a point to converting over into the area of the residential and excluding the commercial.

In other words, I want to rule out this back and forward play that could be involved in this. You are designing the legislation to promote particular business activities, particular orientations and uses of land in a certain way. With effective tax legislation of this kind, you are going to arrogate this particular economy into certain directions.

The second point that I made is the one that more crucially influences me -- namely, the business of simply emptying, getting rid of tenants, and turning buildings into commercial premises. Is there anything preventive of that? Or what strictures, limitations or otherwise has your legislation to prevent that?

Surely you’ll agree with me that that this would have the most undesirable social consequence -- the most undesirable possible. Because the legislation is designed to a point whether it be efficacious in this regard or not, awaits for the womb of the future -- but at the moment it’s designed to obtain more housing, to stimulate the housing market, to drop prices -- and all sort of thing. And that clause as it presently stands, seems to me, not very well designed to do so.

Hon. Mr. Meen: Mr. Chairman, that may be a possibility. I really have no idea whether a person with an apartment building who wanted to take advantage of the exemptions provided for commercial accommodation, would find it advantageous to convert his apartment suites, every one with kitchen and bathroom facilities, to commercial accommodation. I really don’t know. I would think that it would not be an economical thing to do when you consider that within three years, under the provision, the allowances for reduction in the amount of any speculative tax would have started to come into play.

Mr. Lawlor: Would the minister permit a question?

Hon. Mr. Meen: Yes, certainly.

Mr. Lawlor: I hadn’t that in mind so much. That is a bit obtruse. What I had in mind was the mix of residential and commercial, with residential suites above a whole series of stores, where the landlord says: “All right. I’ll put the whole works into offices,” and out go all those tenants

Hon. Mr. Meen: That’s the point I’m making, though

Mr. Lawlor: The apartment house example isn’t too good.

Hon. Mr. Meen: Take the case, though, where there are stores on the main floor and apartments above. I don’t know, but I would have supposed that it would wind up as pretty expensive commercial accommodation to convert those apartment suites for commercial purposes and, indeed, to establish that they were being used for commercial and not for predominantly residential accommodation as previously.

The hon. member also asked about the three-year term. That really was intended to stop the churning referred to by the member for Waterloo. There are various ways you can do it. You could say: “All right. Take 10 per cent of the amount of the tax off every year, diminishing over 10 years to zero from 50 per cent.” Really, I think it does have regard for the present picture, and I think that three years is a reasonable period. If the property is held as a genuine investment today, it’s not going to be too tough a task for the genuine investor to look at three years hence and say that from then on he will start realizing some reduction in the amount of tax he would have to pay on a speculative gain.

In the intervening three-year period there may or may not be any gain, so I don’t think the immediate effect would be adverse to any apartment owner. It was our feeling that the three-year term, to put it as I said at the beginning, would be effective in stopping churning.

Mr. Chairman: Shall subsection 2 stand?

Mr. Renwick: Mr. Chairman --

Mr. Chairman: On subsection 2?

Mr. Renwick: I would just like to make a couple of comments. I share the concern of my colleague, the member for Lakeshore. What the government is really doing is calling a halt for three years but then building in an acceptance of a 10 per cent rate of inflation in the value each year.

What bothers me here is what has bothered me throughout the bill. This is another example of the situation where you suddenly make everybody, no matter how long he’s held his property, you call everybody a speculator and stop him from selling. The person may have held an apartment building as an investment for several years -- indeed for many years in some cases -- but you’re suddenly saying to him: “No, you can’t sell it now for three more years.”

Hon. Mr. Meen: Oh no. We’re not saying that. We’re saying that he may not sell it at a speculative profit.

Mr. Renwick: What you’re saying is that he cannot put it on to the market, because you then make him a speculator, even though, in any other characterization of that person in his ownership of that property, he could only be considered to be an investor.

You turn him into a speculator and prohibit him, for practical purposes, from selling at a 10 per cent rate each year, even though, three years from now, he can add the three-tenths of the value and one-tenth for every succeeding year. It seems to me to make very good sense to at least do what my colleague said: start the one-tenth running now and leave him free to sell it.

Mr. Good: Why should anyone speculate on residential property?

Mr. Renwick: I’m talking about the fact that what this bill is doing is to make a speculator of everybody who is otherwise an investor in real property. I don’t think that is the intention of what we’re about. A speculator is a person who buys property and either before or shortly after closing the deal turns it over again.

The other point that seems to me to make sense -- I mean, mathematics is a pretty exact science -- is that you should be able to have the benefit of the proportionate part of the one-tenth, regardless of whether you hold it for the whole of a year. It seems to me that what you are saying to everybody is that unless you hold it for the whole of a subsequent year, you are not going to get the one-tenth that year. Well, if it’s sold half way through the year, presumably there is no reason why you can’t take one-twentieth. If he sells it a quarter of the way through the year there is no reason why he can’t take a fortieth. I don’t mean that you have to do it on a per diem basis, and make it work that way --

Hon. Mr. Meen: Where do you draw the line?

Mr. Renwick: I think quarterly is not a bad idea. One year is too long in order to earn the benefit.

Hon. Mr. Meen: That might be. And we did, in the case of the farming allowance, work it back on a monthly basis. But I think for the present time, at least, on a yearly basis -- there would be no allowance for the next three years, we’ll have an opportunity to determine just what kind of credit adjustment might be worked out on a basis like that.

Mr. Renwick: Well, you’ve got three years.

Hon. Mr. Meen: We’d have a little more time, yes.

Mr. Breithaupt: I hope the minister does take advantage of that opportunity to ensure that a proper balance is given to persons who may dispose of properties that come under this subsection.

There was some comment made earlier with respect to what we had felt would be a way of avoiding this entire matter. That of course would be to set a time limit generally on the ownership of all properties so that with the proper safeguards for persons who had to move or who had some particular reason for disposing of their buildings, we would be able to deal with the matter of speculation based on the length of time for which property was held.

The chairman will recall that we were going to propose an amendment with respect to this matter under section 2 earlier on, particularly dealing with the suggestion that a five-year term might have been satisfactory. A removal of the tax on the basis of 10 points of the 50 for each of the subsequent five years would have meant that after a 10-year holding of a property, there would, in fact, be no tax exigible.

We thought that this was worthwhile because it would be a way of dealing with all properties equally and further, it would be a way of allowing the person who has held the property for a substantial number of years to, in fact, balance the increase in value with the inflation that we all know, regrettably, is always taking place.

In the amendment that has now been brought in, Mr. Chairman -- in this series, which in fact deals under section 20 with the matter of investment property, we do commend the minister in the approach he has taken, particularly to have a three-year term, after which there is some relief against taxation.

Surely the people we want to penalize in this circumstance are those who purchase a property and, without any improvement, without any development, sell it after perhaps watching a crop of weeds grow, and make a large substantial profit from that sale. These are the ones who should be taxed in order to, hopefully, lower the eventual cost of accommodation on property.

I think that what the minister has done here in using a three-year term, is a beneficial start in ensuring that persons who are actually investing are going to be encouraged to invest in the knowledge that the property which they have no intention of disposing of in three or five or perhaps even 10 year is not going to be harmed, other than under some perhaps forced disposition that would occur before 10 years might pass.

There is one point that I might appreciate some clarification upon. It is my presumption that if a property has perhaps been owned for five or 10 years up until April 9, then of course if it were sold within the next three years it would acquire the possibility of taxation on whatever the 50 per cent value increase was over those subsequent three years. Presumably the minister, since he has agreed with my view, accepts the fact that we have to start somewhere and that persons who have held property for a length of time might well have benefitted substantially by increases in value up to April 9 so as to soften what might otherwise be a blow.

If that attitude is accepted -- as the minister nods his head and says it is -- then presumably those who are continuing to invest or who choose to invest and hold property for some years, are of course, going to have the advantage, which we properly think they should have, in acquiring and dealing with their property over a period of years so as not to have a tax attracted.

I think that the three-year term that the minister has suggested is a fair compromise and a good basic guideline by which to go. Anything less than that would appear certainly to raise the suggestion of speculation. Anything longer than that period of time might well raise the presumption of investment. In choosing this three-year term, we agree it is a satisfactory one so long as there are the safeguards which we all plan for in the reduction of tax so long as properties are held for a longer period of time.

We were all concerned that the earlier bill brought before us did not have the opportunity of dealing with this particular matter. We believe there are many persons in the province who have invested in properties with the desire to hold them over a period of years, to manage them and, of course, to use them as a hedge against inflation with, hopefully, a benefit eventually which might well match or be better than the rate of inflation to which we are all subject. We think those persons should be encouraged. They should be able to benefit in that choice of an investment just as others of us might choose to invest in some other security or in some other commodity.

I think, as a result, you have struck a good balance in this matter. The three-year term is a reasonable one and we approve that position which has been brought forward particularly in this section.

Mr. Good: Mr. Chairman, I would like to bring up one point in relation to this which, I must confess, I did not understand properly until the minister shook his head now.

A person buying an investment property now -- an apartment building -- is free of tax in 10 years. What is so different about a person who bought a property seven years ago and wants to sell it three years from now? He would not be free of tax on that particular property -- he might have held that property for 25 years as an investor. I don’t understand why “commencing April 10, 1974” should be in there. An investor who invested before your valuation day is no more a speculator than one who invests after your valuation day. In my view you brought a brand new thing into this discussion when you shook your head in the affirmative in answer to the question of the member for Kitchener.

I cannot see why this rule should not apply before as well as after your valuation day of April 9. Could the minister reply to that?

Hon. Mr. Meen: Certainly, Mr. Chairman. You have to recognize that it may well be that the person who bought his property 10 years ago, five years ago or two months ago was not a speculator. That may well be but how do you know?

Mr. Renwick: That is precisely the problem, so you make everybody a speculator.

Hon. Mr. Meen: There was no land speculation tax. He may very well have been holding it simply to speculate or to churn or whatever, depending on -- you are looking at the subjective end of things.

Mr. Good: If he has had it for 10 years?

Mr. D. M. Deacon (York Centre): Not churning in 10 years.

Hon. Mr. Meen: We are allowing all capital appreciation up to that date but from then on it’s a new ball game. Don’t shake your head -- we have argued over this for hours and hours and hours. We have a new ball game beginning April 9 and from that time forward, investors and all others must look at these properties in a different light.

They either look at them as an investment or they look at them as a speculation. If they look at them in the light of speculation they must expect to pay some tax but they will pay tax only on the accretion in value after April 9. In this case, if we are going to look at people n-ow as investors, it is certainly true that the time should start from the time when we announced there would be a speculation tax.

In this case, this is a further exemption for a class of people who, we all recognize, can demonstrate they are investors. There is nothing to stop them from selling and if they sell at an increment in value over and above the April 9 value, they must recognize they are put in the category of owing some tax. A person may, after three years if he has held, start to derive the benefit of that abatement in the tax which the hon. members in the Liberal Party at any rate have indicated they support.

I think it is a reasonable period of time within which -- to use the colloquial -- weed out the speculator and the fast churn artist from the genuine investor in rental accommodation. That’s the reason for having it and that’s the reason for having it begin on April 9 and not sooner.

Mr. Chairman: The member for Lakeshore.

Mr. Lawlor: Mr. Chairman, if I were so disposed to carry about in my briefcase a copy of “The Wealth of Nations -- all three volumes -- and in good Tory tradition and historical fact name myself Adam Smith I think my hair would turn slightly grey in the promotion of the section. While I support the section, I don’t think you should, being an heir and disciple to Adam -- not the original one, just the Smith one.

Has the minister considered the adverse economic effect and social effects? I think what happens in this particular context is that if you don’t adopt the one-tenth per annum, beginning now and flowing into the future -- a position which I’m personally advocating -- then you’re placing an unnatural constraint on the market. In effect, you’re holding properties, or forcing individuals to hold properties off that market and therefore the property is not being marketed. It has adverse economic effects in that way which are obvious to anyone who thinks about it.

There’s a fluid and free flow of the market mechanism itself not being able to operate. There would be no real incentive or no propulsion toward the lowering of the price if these are held in abeyance so to speak. It constricts the market. The demand continues to be there but, nevertheless, the supply has been diminished by reason of the legislation in this particular area.

You can’t help but have only one adverse effect and that is to drive prices up in this particular context. This is because of the availability of a kind of investment property that simply won’t come onto the market until three years hence. I trust you’ve really considered this restraint of trade feature of the legislation. The minister seems to indicate that he thought there wasn’t any such feature written into the thing, acting as a brake or as an impediment to the free flow of the market.

If you adopted my nostrum, then that wouldn’t be the implication. In effect, they would flow onto the market in a normal and usual way. As a matter of fact there might be some inducement to get them on the market as quickly as possible in the circumstances so that their incremental value wouldn’t alter. They would take the maximization of their benefits as they presently stand and have accumulated over the years.

That’s what you hoped was going to happen with respect to the legislation and, in part, has happened -- in the city of Toronto at least: a freeing up of property and a greater mobility in sales. This is particularly so in the case of those who want to unload, having held the property for a certain period of time, they feel they may as well pack up, pick up the swag and head for hinter parts. To have that happen was your inducement to the lowering of the prices. There has been a temporary reversal of the thing, according to the Financial Post.

This section is designed with directly adverse and contrary effect to the other effect that you sought to stimulate and place into being. Does not the minister see this? He may say, “That’s the price we have to pay for working what we consider certain equitable features into the investment property concept. We had nothing before. We’ve at least got this now. If it does happen to have this Holding restraint-on-trade aspect, that can’t be helped.” I say it can be helped if you do what I suggest.

Hon. Mr. Meen: We don’t think that it’s going to create the kind of situation the hon. member for Lakeshore describes. I would say, though, that if it were clearly demonstrated to me that that situation arose and our economists concluded that that was the reason why it arose, we could change it. I’m not sure that going to a straight linear 10 per cent per annum abatement of the 50 per cent tax for every year the property is held after April 9 is going to accomplish that without having the concomitant effect of virtually permitting the churning to occur.

As soon as you start to reduce the amount of the 50 per cent tax relatable in a direct way to the period of time held, then you open the door to, say, churning after a year or so because then the taxpayer is only going to pay 45 per cent tax. Or, after two years he is only going to pay 40 per cent. Maybe it becomes worthwhile then to turn it over every couple of years.

Mr. Lawlor: Then they start churning in 1977.

Mr. M. Cassidy (Ottawa Centre): There is no difference there actually.

Hon. Mr. Meen: Okay, but he has held it for three years. Mind you, the three-year period is arbitrary and that is where we think there is a reasonable period of time he has had to hold it before he acquires anything by way of a credit against the 50 per cent.

Mr. Chairman, I don’t know whether there is any other debate on this section, but I have been advised by my advisers that my suggestion with respect to the alteration in sub-paragraph 1 of 20 is satisfactory. If hon. members would like I could make an appropriate amendment at this time to sub 1.

Mr. Chairman: That is an amendment to the amendment?

Hon. Mr. Meen: Yes. It would be an amendment to section 20 as it stands in the printed copy of the bill.

Hon. Mr. Meen moves that the word “exclusively” where the same appears in the fourth line of section 20, subsection 1, be replaced by the word “predominantly.”

Mr. Chairman: Is this sub-amendment agreed to?

Mr. Cassidy: Mr. Chairman, I am not sure now whether we are going to be talking about sub 1 or sub 2 or both of them.

Hon. Mr. Meen: Talking about both.

Mr. Cassidy: I regret that I missed the debate on the particular section. I am not sure whether that still satisfies the questions about the tests that have to be applied by a landlord to his tenant or occupant about ordinary habitation by that tenant or occupant.

The point that was made by the members for Lakeshore and for Riverdale, I believe related to the case where a property was partially commercial but mainly residential -- for example, a store with four or six units above it. There is a test that is involved in sub 1 here, though, in which a landlord has presumably got to ask each tenant who seeks to rent from him, “Do you intend to be ordinary inhabitants in this particular unit?” Should it be somebody who wishes to use the place for illicit purposes or a politician who needs a pied à terre in Ottawa and Toronto, but keeps an ordinary residence elsewhere -- don’t confuse those two by the way -- or let’s say it was an apartment which was being rented by a large corporation for the use of visiting executives when they come in from out of town, and that kind of thing, it could be that even with the change in the word “exclusively” to “predominantly” that a landlord could be hit under that particular section.

Some nitpicking bureaucrat in the Ministry of Revenue could say, “Look, we happen to have had a look at the four or five units in this converted old mansion that you hold and we found that in fact most of these units are not regularly occupied by the tenants but they are used for other purposes,” such as those that I have described. Maybe the minister could answer that question before we go on.

Hon. Mr. Meen: We may have to issue some interpretations for the benefit of the taxpayers, Mr. Chairman, but I don’t anticipate any problem of that sort. Our assessment procedures designate these properties as either residential accommodation or business accommodation. The values of the assessment would be appropriate, I expect, in determining whether a building is predominantly for commercial purposes. If the stores in the building occupy several floors and perhaps there is a minor amount in which there is rental accommodation available in the form of apartment suites in the normal sense of that word, that building would be designated as a commercial building under the earlier definition which we talked about.

I don’t think the member for Ottawa Centre was in the House at that time. With this alteration then from “exclusively” to “predominantly” we picked up the other side, where we have the definition of an investment property.

Where the quarters are predominantly used for rental purposes, then the whole of that building would be determined as an investment property would not have the exclusive nature of the commercial elements in that building applicable to it. As it now stands, the whole of that building would be subject to the application of section 20(2).

Mr. Cassidy: I am a bit confused there. As I understand it, if a part of the building is commercial and a small part is residential, then it would be deemed to be entirely commercial and exempt from the tax. Is that correct?

Hon. Mr. Meen: Would you say that again?

Mr. Cassidy: If most of the building is commercial but say a quarter of it is residential, then it is exempt?

Hon. Mr. Meen: Yes, that’s right.

Mr. Cassidy: Now, if it’s about half commercial and half residential, do you then prorate and only take the tax against half of the value of the building? Or do you apply this rule? What would you do in that case?

Hon. Mr. Meen: No, there is no provision for prorating, Mr. Chairman. I think the case where it fell on precisely a 50-50 basis in a total dollar-and-cents assessment figure would be a unique one -- well, awfully close to unique; I suppose it could happen. That’s not provided for in this instance. We might have to make a ruling in a case such as that. If that were so, I think I’d probably come down on the side of it being an investment property rather on the side of it being a commercial property, and let the taxpayer determine whether he has some other remedies available.

Mr. Cassidy: Let me take a factual situation. If I could, I would like to preface it by saying that I have suggested in this Legislature a number of times that the tax ought to be tougher than it is. But since you are putting in all sorts of exemptions, I am now concerned about inequities that are introduced into the Act by the way it has been drawn up.

It seems to me that to simply introduce the word “predominantly” -- and I apologize, because that was suggested by my friends to the right and to the left of me.

Hon. Mr. Meen: It was agreed to.

Mr. Cassidy: Okay, but I don’t think I am nitpicking. If you have a 50 per cent rule, in which you say if it’s 50 per cent residential that is an investment property under this particular Act what happens in the case where the property is 50 per cent residential but one portion of it is occupied by the owner as his principal residence? What do you do in the case where the property is 49 per cent residential and 51 per cent commercial? You have a notch problem there, which is a pretty serious one; in one case, if it’s 51 per cent commercial, it is entirely exempt -- I am not sure if the minister is saying that, but that doesn’t make good sense --

Hon. Mr. Meen: Yes, it would be --

Mr. Cassidy: -- while in the other case, if it is only 50 per cent commercial, then it goes over into this particular section. The third thing is that this can be a very real situation in a common kind of property found along the main streets of many of our cities -- shops with anywhere between two and four residential units over top of them. Because of the higher value of the shop property --

Hon. Mr. Meen: Oh, I don’t know about that.

Mr. Cassidy: -- the assessment will square off at about 50-50, residential and commercial. Can we get some more precision about where “predominantly” comes in?

Hon. Mr. Meen: I don’t know that I can give the hon. member any more precision on that. “Predominantly” means more than 50 per cent, in my interpretation at any rate. In the kind of illustration the hon. member has given, if one had a store on the ground floor, with apartments above -- certainly it’s a common instance -- I don’t know whether the assessment would be such that the store would be worth more by way of assessment. It might be worth more by way of income, and in that sense be worth more by way of assessment. I don’t know. Whether there was a precise balance between the two would be a matter of fact, and I would question whether it’s really something that should trouble us at this moment.

In any event, I have already indicated my view as to the course I would take were I called on to make some kind of determination. The apartments above quite possibly could be of greater value, if there were three or four of those, than the assessed value relatable to the commercial property on the ground floor. But I must say I don’t really know.

Mr. Cassidy: Okay. Let me just close this off by raising a practical problem. At present assessment, it may well be that the commercial value of a property is considered to be greater than the residential value of the flats that are upstairs --

Hon. Mr. Meen: Then it would be all commercial.

Mr. Cassidy: By 1977, even at the rate that the ministry is going, we are assured that there is going to be market value assessment; and at that point the ratio could be reversed. Therefore, somebody who gets into a situation now because he thinks that it’s going to be tax exempt, could find that the rules are changed -- not because of anything he did and not because he wasn’t included, but simply because the assessments returned by the ministry changed the proportion from 51-49, to give a hypothetical example, to 49-51. That doesn’t make good sense.

Hon. Mr. Meen: He is going to know well before that, of course, if it should happen. His assessment notice is being updated annually.

Mr. Chairman: All right. The member for Huron.

Mr. Cassidy: If I can just raise one other point before I finish off, Mr. Chairman. Again on sections 1 and 2 --

Mr. Chairman: All right, if it is very brief.

Mr. Cassidy: What is that? Well, it is not on the same point --

Mr. Chairman: Order please. The member for Huron wished to introduce --

Mr. J. Riddell (Huron): Mr. Chairman, if I may interrupt the speakers for a minute, I would like to draw to the attention of the members here the presence of a group of grade 7 and 8 students from the Seaforth Public School, under the supervision of Mr. Paul Carroll who is not only a teacher but a politician in his own right. I am sure that the members here would like to join with me in extending a welcome to this group of students and their teachers.

Mr. Chairman: The member for Ottawa Centre.

Mr. Cassidy: Had I known the member for Huron’s business, I would have ceded much sooner, Mr. Chairman.

The other point I wanted to raise with the minister was in sub 2. It seems again that for a small owner of property that the sub 2 could have some quixotic effects. As I read it, a person who lives off and on in a property and at other times rents it out can either be exempt or can be hit by the tax in its full impact, depending on the timing of when he happens to live there and when he happens to sell.

If I can be specific, if they live there for three years and then rent it out for three years, then six years hence they have to sell it as an investment property and they are exempt to the tune of three-tenths of the tax. If they rent it for three years and then live there for three years or for two years, and then sell it, they are exempt from the tax --

Hon. Mr. Meen: Altogether.

Mr. Cassidy: -- because it is a principal residence. If, however, they rent it for a couple of years, live there for a couple of years, and then rent it out for a couple of years, they get no exemption at all from the tax.

Hon. Mr. Meen: That’s right.

Mr. Cassidy: I can tailor the examples, but I think the minister gets the point that I am making. What I would suggest is that the minister might consider in that kind of situation, in which there were the various alternating forms of ownership, that years during which the property is occupied as a principal residence would be deemed to be the same as years in which it is used as an investment property.

I think that is a reasonable kind of amendment. I don’t want to propose it because I have told my friends that I will propose no amendments during the Act. But it seems to me that that would get around that quixotic effect that the government would not want to have. The Act, I remind the House, is basically very badly drafted. But if you can make that improvement you can patch up a little way and apply a Band-Aid to a rather bad animal.

Hon. Mr. Meen: Mr. Chairman, that is an interesting observation. That could perhaps be taken care of in another fashion. If it is a practical sort of thing to do I’d like to give that a little bit of thought over the next few months. We could take a look at determining whether an amendment would be desirable or necessary at another time, possibly in the fall.

I can see the point the hon. member makes. I can picture for myself homes owned by employees of, say, large companies who take on contractual work around the province, or perhaps around Canada. The employee owns his home and doesn’t want to sell it when he has moved to take on some supervisory role, perhaps, in another city knowing that in a couple of years he is going to be back. So he signs a two-year lease, returns to take up residency again for a while, and then maybe discovers two years later, or three or whatever, that he is going to be moved to another site on another project of some sort or other.

I can imagine that there are instances in which the land of illustration made by the member for Ottawa Centre would apply, and to which some land of interpretation, either by way of regulation, or by way of amendment to the Act, might be appropriate.

But these are the kinds of refinements that I have talked about since the bill was introduced. We just couldn’t picture all these refinements in the initial stages when we had to draft the bill from scratch. Even this section is a new one, added with our subsequent eliminations during second reading. As a result of that debate, it was put in at the time when I introduced the bill in the committee stage. We couldn’t really have had a chance to have all these illustrations of cases brought to my attention. That is certainly one to which I will give some thought.

Mr. Chairman: The Minister of Revenue has moved that the word “exclusively” be replaced by the word “predominantly” in the fourth line of subsection 20.

Mr. Good: Mr. Chairman, I presume the vote on his amendment would carry the complete section. Would it?

Mr. Chairman: I think we will place this sub-amendment here first of all.

Mr. Good: All right.

Mr. Chairman: Those in favour of this word change --

Some hon. members: Carried.

Mr. Chairman: Would the hon. member prefer to come in on either subsection 1, or will it be on subsection 2?

Mr. Good: Yes, on subsection 2. I would like to return to the point, Mr. Chairman, that I was making a few minutes ago. The more I reflect on it, the more dangers I see in the one particular aspect.

As the title of the bill says, it’s a tax on certain lands and speculative transfers of land. And, when one sees the legislation as of April 9, one can then judge what type of buying or selling he is going to do as an investment or as a speculator. If a person buys raw land, he knows that unless he improves it, he is going to be classified and be subject to tax. If he buys a farm, he knows exactly what the conditions are. If he buys a residential property in which he wishes to reside, he knows where he is. If he buys an apartment building, he knows what the implications are and that he must hold it for 10 years.

Many of the amendments made in this bill -- in the next section, in particular, and the amendments in this section -- have been to correct situations which would have worked adversely toward residential property, and the provision of more residential property, which is in very great demand in the Province of Ontario.

We find here now that apartment buildings are only exempt from the speculation tax if they are held tor a complete period of 10 years. I cannot in any way see why the 10-year period should commence on valuation day of April 9. If we find that everyone else who buys land or apartment buildings now can predetermine what --

Hon. Mr. Meen: He is not going to be convinced.

Mr. Good: Surely a person who has owned an apartment building for 10, 15 or 20 years cannot be put in a speculation class when he is dealing in residential property. The whole purpose of the bill is not to work adversely against the people who are providing housing in the Province of Ontario.

People who have been providing housing in new units bought as of now know that they must keep them for 10 years in order not to be classed as speculators

People who have already owned them for 10 years, 15 years or 20 years should not now be put in a speculation category. They should have already proved that they didn’t buy them to speculate. Mr. Chairman, if they wanted to speculate, they wouldn’t have owned them for 10 or 15 years. I think it is a very difficult position now for every apartment owner in the Province of Ontario, who has to reassess his position on investments he made many years ago.

Individuals who own a six-plex, a 12-plex or a 16-plex are going to have to decide on their future programmes. They are going to have to tell themselves, “I have owned this building for 20 years,” and ask themselves, “Can I maintain it for another 10 years to prove to the government that I’m not a speculator?”

I just don’t think this principle is right, Mr. Chairman. I would ask the minister to reconsider that particular aspect of the bill in relation to people who have owned apartment buildings for more than 10 years at the time this bill comes into effect.

Mr. Chairman: Shall this motion carry?

Mr. Good: Can I have a reply?

Hon. Mr. Meen: I think the hon. member for Waterloo North must have had his hearing aid turned off when I answered him about 10 minutes ago on that very point, Mr. Chairman.

Section 20 agreed to.

On section 21:

Mr. Chairman: Section 21?

Mr. Good: Yes, 21. Section 21 as it appears in the new printing?

Mr. Chairman: Yes, the newly amended section 21.

Mr. Good: Mr. Chairman, this is the section which rectifies a condition which existed in the original bill dealing with the sale of lots by developers to small builders. Many of us received correspondence from people stating that this would have a very adverse effect on the development of lots for developers who didn’t want to be in the building business, and also for builders who didn’t want to be in the development business. As the bill previously stood, we found there was no provision unless lots of a registered plan of subdivision were improved to an extent which meant that the developer had to put a building on them before he could be exempt from the tax.

Now, we find that the provisions of this section, Mr. Chairman, allow the developer to enter into an agreement with an agreeing person or the purchaser that the purchaser will take the responsibility for the tax which will be applicable if that purchaser or builder does not meet certain conditions. The conditions are what I would like to speak about briefly.

The condition, Mr. Chairman, is that the purchaser must covenant to commence building within a nine-month period, to commence construction of buildings on 50 per cent of the lots and he must also agree in his covenant with the transferor that within 18 months he will commence building on all of the lots purchased at that particular time.

I can only relate how this applies to developers and builders in my own area, because I researched it rather thoroughly there. We have four or five large developers whose only business is to buy raw land, service it, get agreements of a subdivision from the provincial government, and build on very few of those lots themselves and sell the majority of these lots out to other builders. We have in the Twin City area four large builders and 66 small builders. These builders buy anywhere from three, four, five lots at a time, up to 30 or 40 and in some cases, and maybe 50 lots at a time.

I am told by these builders that the nine-month period during which they must commence construction on 50 per cent of the lots, and the 18 months in which they are given to commence construction on all of the lots, is not a long enough period of time in which to do it. They say their operation will be greatly affected because of the limiting length of time in which they have to start construction. Many outside factors affect the speed with which they can develop these lots. First and foremost, of course, Mr. Chairman, is the mortgage market -- how quickly they can obtain funds. Secondly, is the financial condition of the builder himself -- how, thinly he can spread his assets over five lots or. 10 lots, as the case may be -- and the size of the builder.

So we find that the builder has tied himself into an airtight agreement with the developer that if he doesn’t get buildings commenced on those lots by a certain date he is going to be responsible for all the tax accumulated under this bill as designated land from the time the original developer bought the land and serviced it right through until the time it would be finally sold.

The outside circumstances which affect the small builder are many and they are varied. And he, because of the very size of his business, is very directly and quickly affected by the supply of money for mortgages, the supply of credit for his own business and also by the supply of tradesmen available and the market itself.

I would respectfully ask, Mr. Chairman, that the minister consider extending these times to a minimum of one year and two years. This period of time was told to me as being the absolute minimum whereby a small builder could give a covenant that he could develop all the lots that he usually buys.

If we find that the builders are going to be limited to these relatively short periods of time then several things will happen. First, the builder will be very cautious in the number of lots that he will buy from the developer, naturally this will have a chain reaction and the developer will not seek subdivision plans of approval as quickly as he would if he could peddle his lots more quickly.

So a small builder, instead of buying 12 or 15 lots for his quota for the next year or 18 months, is maybe going to have to cut back to six or eight. This, of course, will have an adverse affect on the number of houses put on the market.

That, Mr. Chairman, is something I would like the minister to give very serious consideration to. Perhaps he has had representation as I have had on this point, and perhaps he has had an opportunity to talk to developers and small builders on this point. Mind you, it certainly is a great improvement over the way this situation was handled previously. I must commend the minister on working out what I think is an excellent alternative to the original bill but I do wish he would give consideration to the shortness of time in which this agreement must be met.

Hon. Mr. Meen: Mr. Chairman, I understand what the hon. member is saying. I do know that some builder associations made representations to my ministry about the one- and two-year term -- this was before I introduced the amendment, actually; it was during the course of the debate on second reading -- they suggested the one- and two-year term for 50 per cent and for the balance of 50 per cent of the lots.

No one has come to me. It may be that others on my staff have had time to see and hear others who feel that the nine month and nine month proposal, as contained in section 21, is going to create too great a hardship. What I had sought to do here was to create a real incentive to get going with those houses. Nine months is a complete building season, by the advice that I have received. And so it seemed appropriate, at least for the current building season and for the one that follows, to have the nine month and nine month period, a total of 18 months. This gives two complete building seasons.

I have the feeling that the concern expressed by the hon. member for Waterloo -- I’m sure it is expressed in all good conscience and good faith -- I am confident that it will not be borne out in practice. If it should turn out that builders are so apprehensive that they do not undertake sufficient commitments to complete the numbers of houses they would ordinarily complete, then obviously this would be counter-productive.

I thank him for his commendation on the section. It is, I quite concede, a vast improvement over the provision which we had earlier. I and my staff had not realized the inherent counter-productive nature of the provisions as they originally stood, requiring that the developer build a structure of some sort on house lots before he could escape the speculation tax. As I interpret it and as my colleagues see it, this section should overcome this and we would hope and expect that it is not counter-productive. But I hear what the member is saying and I can tell him that if it turns out that, in fact he is right and that it does become counter-productive then we will have to take another look at it.

The builders who would be presently negotiating with developers for the lots for the current building season have the whole of this summer and have had the whole of this spring within which to set about making their other arrangements. This period of time since the increase in the Bank of Canada interest rate has been less than optimum from the standpoint of obtaining mortgage financing. I guess that is a masterpiece of understatement. If there is ever a problem that the builders face right now I suppose it is in obtaining mortgage commitments.

Mr. Good: And they are not going to buy lots.

Hon. Mr. Meen: I would think if I were a builder I would not want to commit myself to the purchase of a number of lots, whether this Act were in place or not, in the face of the current mortgage situation. If we can assume that the mortgage companies will be freeing up their loans or that things will stabilize in that area so that some confidence will return to that market and where the lending institutions will put out their monies again, then I think that is the major impediment in the way of the builders. If mortgage money frees up then they will be able to say “Okay. We can get on with this business. There is probably an adequate supply of building blocks and of concrete and of the necessary lumber and bricks and roofing materials and plumbing and whatnot.” That will encourage them to get on with the building.

If it should, however, turn out that as a consequence of these provisions they are still apprehensive to the extent of not getting into the activities at the same pace as in previous years, then I would have to take another look at these provisions of nine months and nine months.

Mr. Good: Mr. Chairman, there are several points I think the minister missed. First of all, builders don’t work on a nine month building cycle. Most small builders keep their employees all year round and they are building all year round in one form or another. Either they are doing their finished carpentering or they get their foundations in, in the fall, and their framing up. Maybe they won’t always get brick until the following spring. But most of the 66 small builders that I am talking about in our area try to keep a programme going all through the year. It doesn’t work on a nine month basis.

Secondly, you don’t get a release of plans of subdivision at any particular time of the year -- the lots don’t come on the market in the spring, particularly. A developer gets a plan of subdivision approved and he has maybe 95 or 100 lots in one approval to dispose of to the builders. By practice he can say, “Okay this one takes so many, and that one takes so many.” They know who does the building in their subdivision.

Many times approvals have to be given by the developer of the area. There are strings attached by the developer as to what type of house will be allowed to be built in that particular area. What kind of alternate plans there can be on the street, left and right and what different types of finishing on the houses, so the street doesn’t look stereotyped. All this has to be worked out with the individual builder after the lot is sold. It is not as simple as the minister may think, Mr. Chairman. I have spoken to these people -- and I know many of them -- and they say that nine months is just too short a period and 18 months is too short a period especially when you put on a builder -- the agreeing person, as he is referred to in the bill -- the obligation to assume the tax that would be payable if the land were sold otherwise and not under this section.

When that builder buys those lots and sees that tax hanging over his head if he doesn’t get those 20 lots started within 18 months -- if he has bought 20 lots -- he is going to say, “I think I’ll only buy 12 and make sure rather than run the risk of being liable for the tax.” If he could hold on to them it would be all right. Mind you, if he goes to sell them and is speculating on them, sure, he should be subject to tax but if he has bought them as a legitimate builder as he has been doing for years and years in our area he should be all right. Goodness knows, a small builder can’t -- well, no one can -- get hold of any lots any more -- the minister must surely realize this -- unless you buy them through a large developer whose business it is to buy raw land and get registered plans of subdivision approved through the government.

I think, Mr. Chairman, the minister would be well advised to start off with a longer period if necessary and reduce it as the time goes by because I think you are going to find there will be an adverse effect. I m sorry I don’t have the figures of the number of homes being built to compare the four large developers, or the four large builders, and the 66 small builders.

I would think the 66 small builders are going to be more adversely affected by this than the large builders who have the financial capability of starting houses to a much greater extent than the 66 small builders. But I bet the 66 small builders make a tremendous contribution to the community in the number of houses they build.

I would certainly want the minister to give more serious consideration to prolonging this period of time so that we don’t jeopardize these small builders who have been doing such a great job in providing houses.

Hon. Mr. Meen: I can’t agree with the member more, in the sense of the contribution made by the small independent builders. The variety of home styles which occurs in subdivisions in which there has been a multitude of small builders is something we all enjoy. I don’t like those subdivisions which have been put together by one builder alone, or by one developer generally, and I think that kind of activity is certainly to be encouraged.

All I would see happening is that the builder who might take on a commitment for 50-100 lots, figuring if he doesn’t buy them this year or get a commitment from the developer to sell them to him this year, he might have to pay more for them next year and the year after that, is going to sit on them; in effect, he is speculating in those lots. Frequently these builders themselves will turn them over to somebody else at a little profit in a few months’ time.

He can’t do that in that fashion, though, under this. I am saying that this kind of provision will reduce the number of lots he takes on, at one time, to the number he can comfortably handle in that period of time. As long as he gets started during the nine months on the first half and gets started during the remaining nine months on the second half of the lots he has taken on, while he is working on the second part of that project he can be making a commitment with that developer or some other developer to take on some further lots in the normal rollover of inventory into finished houses and the sale of those houses.

I repeat to the member that if it should turn out that this is counter-productive, I’d have to take another look at it. I’d also say to him, though, that whereas he is suggesting one year and two years for this, and that I might want to cut that back sometime, I would suggest to him that it’s an awful lot easier for me to extend it than it is for me to cut it back. It would be better to start off with the nine months and nine months, than to start off with a year and two years and then discover that this was having no effect along the lines we are seeking to accomplish.

Mr. Good: The line the minister is seeking to accomplish, Mr. Chairman, in my view is to prevent the builders from speculating on the lots he buys; so that he will not resell them or he won’t sit on them to speculate. The bill prohibits him from reselling the lots without having to pay the tax so it’s just a matter of whether you give him another six months and ease the apprehension which he will have when he goes to buy those lots.

There are many things involved in getting development ready on all these lots. We have discussed it before and I personally feel that the minister is making a mistake by not extending this to at least one year and two years. However, I have made my arguments and the responsibility rests with the minister.

Mr. Chairman: The member for Riverdale.

Mr. Renwick: I want to ask a couple of questions, if I may, of the minister. I am not going to go over and belabour what the member for Waterloo North has said so well about it and I don’t pretend to be an expert in this field but I do want to ask a couple of questions.

One of the questions which has been raised, apparently, is a legal matter, as to whether a site-plan agreement would qualify as a sub-division agreement under the wording of the clause.

The second question I would like to ask is -- what is the minister’s conception of the extent of servicing that would be required to satisfy section 21?

The third question -- what is the magic of the agreement under seal that, as I understand it, is provided in section 21?

My next question -- presumably there is going to have to be a very clear definition of the time of disposition and of the time of commencement of construction. Is this right?

And my last question is this -- presumably the special lien would claim priority over the purchase-money mortgage taken back by a developer or transferor on the sale of the building lots, even though it may not take priority over the mortgage by way of loan for the purpose of construction. Is this right?

Hon. Mr. Meen: I am sorry, would you repeat your questions, please?

Mr. Renwick: Say that the developer-transferor sells the serviced lots to a builder-transferee, and takes back a mortgage, which is not a construction-money mortgage. And then the construction-money mortgage, of course, is used to construct the property and there are two mortgages involved. Would the special lien have priority over the construction-money mortgage and rank after it, but ahead of the mortgage taken back by the developer-transferor? Is that correct?

Hon. Mr. Meen: The last question first, Mr. Chairman. That’s my interpretation of the way that would work, too.

The member asked about site-plan agreements. I don’t think they are specifically referred to in section 21(1), but I can tell you that it had been my general expectation that a site-plan agreement would at least be contemplated in all of this, even though it is not a plan of sub-division.

Mr. Renwick: I raise the question simply for the purpose of drawing it on to the record, so that perhaps the minister, when he is giving consideration to the types of agreement, can look at a site-plan agreement which after all, in many cases, is not within the general purview of what we normally understand as a sub-division agreement.

Hon. Mr. Meen: That’s right, and yet in some areas the site-plan agreement can be far more important than the sub-division agreement, and I think we would want to spell that out in regulations --

Mr. Renwick: You would want to define the sub-division agreement, presumably?

Hon. Mr. Meen: Right. And the hon. member asked about sub-division agreements themselves, or what constituted suitable improvements -- the extent of servicing, I think was his term. It would be in substantial compliance with the sub-division agreement or the site-plan agreement, I suppose, in that sense. I don’t think there is going to be too much difficulty about establishing that.

He mentioned agreements under seal. I have always been a little mystified, really, as to just when a document has to be under seal and when it doesn’t. I think the Registry Act requires that documents be under seal in order to be registrable. I am a little hazy on that aspect of the law, I must confess, but that’s the reason why I would expect that reference to have been included in the section.

Mr. Chairman: Shall the new section 21 then --

Mr. Renwick: The other questions were related to the importance of the definition of the time of commencement of construction --

Hon. Mr. Meen: Yes, I knew there was another question.

Mr. Renwick: -- and the time of disposition.

Hon. Mr. Meen: The time of disposition would be established under one of our early sections where we have: “deemed disposition or whatever has occurred that has created the disposition.”

“Disposition would include the sale, transfer, however effected, of any part of the beneficial interest, the sale, transfer, assignment of an option,” and so on, the entering into a lease and so on.”

I think it would be the date of that document as established under section 1(1)(d) where we get to definition of disposition.

Time of commencement is going to be something that we will have to determine by regulation or spell out. I think it is going to vary with the nature of the construction. I think, for example, in the construction of a conventional home -- I myself would say that construction had commenced when the hole was in the ground and perhaps footings were laid out --

Mr. Good: Suppose there is a cement strike for six months?

Hon. Mr. Meen: I am sorry, would the hon. member repeat that before the microphone.

Mr. Good: This is very important. As you know, many building materials have been in short supply. Right now, ready-mix cement is in very tight supply. This could very well delay construction for a month, six weeks, two months. This is the type of thing which also relates to the argument we were putting before.

Hon. Mr. Meen: Okay. But the prudent builder is not going to excavate the basement until he has got a commitment from the supplier of his concrete aggregate to provide the footings --

Mr. Good: That doesn’t mean a thing if he doesn’t get it.

Hon. Mr. Mean: -- and he is going to have a delivery date for his block and his floor joists and so on, so that is all part of his schedule.

I think at this stage I would assume that we will define commencement of construction as being when there is significant evidence of intent by the builder to begin construction by way of seeing a hole in the ground, footings poured and perhaps the basement in course of construction.

You see assessors in my ministry constantly around in the subdivisions because they want to pick up the supplementary assessments for the purposes of records in my ministry and for tax purposes for the municipality. They would be advised by the builder that he had begun construction on certain lots on certain streets and they would drop around and take a look and could confirm through my ministry -- then to him and his solicitor -- that the lien was thereby waived and any steps necessary to clear the tide for that purpose would then be taken.

I was going to say though, that there is another kind of problem which I envisage that concerns the subdivision for cottage lot purposes. I was advised when I was in Sault Ste. Marie a few weeks ago that the practice among many purchasers up there, where they have fairly expensive subdivisions for cottage purposes, is to buy a lot, go in and clear enough of an area to put up a tent perhaps, maybe enough of an area to burn brush, and then set about clearing the lot, burning all the brush, taking out trees as required to develop the site for the cottage. It may be a year or two years before that site is in a suitable state for even the placement of a single concrete pad at surface level.

I would mention to the hon. members that this is precisely the history of the construction of my own summer residence. After I took title, it took several years of clearing and camping on the site before I eventually began construction of the cottage building.

In that instance I think that our regulations, in order to be fair to these people, should be that commencement of construction will be deemed to have occurred when there is any evidence of intent by the purchaser to even start the clearing of a site. If you have an area for burning brush, that might well be adequate: evidence, to my mind, of the intent to begin construction so that the lien would be released at that point.

These are refinements in this area which I am going to have to work out in the ministry as soon as possible. I am sure there are going to be some people this summer who will want to be reassured that they don’t have to start construction of a cottage property that’s going to be their pride and joy over the years to come, within a nine-month period. That’s something I can assure you I’ll be giving immediate attention to.

Mr. Chairman: Shall the amended section 21 carry?

Section 21 agreed to.

Mr. Chairman: There’s a new amendment to section 22. Has the minister placed this yet?

Hon. Mr. Meen: No, Mr. Chairman, I don’t think I have any amendment to section 22, the new amended section 22. Section 22, as in the book, becomes 23 and that’s been moved. The new 22 is before the hon. members now.

Mr. Breithaupt: We’re content, Mr. Chairman, that it not be read since we have copies of the item.

Mr. Chairman: Thank you. Shall this motion carry then?

Mrs. M. Campbell (St. George): I would like to speak to this amendment, Mr. Chairman.

Mr. Chairman: The member for St. George.

Mrs. Campbell: I am very much appreciative of the minister’s giving consideration to my concerns as expressed in my proposed amendment. Certainly in most areas this amendment goes beyond that which I had placed and for that I am very grateful.

There is only one area in which it limits what I had in mind and I would like some comment from the minister on this. I had referred to certain institutions and I would point out to the minister that under the present law, a persons who is 60 years of age and handicapped can be admitted to a home for the aged. That situation is not covered.

I recognize the difficulty in trying to incorporate all of these things into the amendment but I do feel obliged to point that particular problem out, in the hope that the minister could give some consideration to it. I did speak to his officials, asking that they might advise him before I rose to speak, of my concern in this particular area, so perhaps he is prepared to discuss it now?

Hon. Mr. Meen: Mr. Chairman, to begin with, may I observe that it was as a result of the observations made by the hon. member for St. George that I directed my thought to the plight, if we can call it that, of some of our senior citizens who have reached the stage where, for whatever reason, they have to vacate the family home they’ve held for a number of years? They hope some day to return to it, whether they’ve gone to a hospital or whether they’ve gone into a nursing home or whether they’ve gone to live with a daughter or son-in-law or whatever.

I felt, in this section, that age 65 was probably a reasonable place to start. One could drop that age, but in doing so, one starts to increase the number of potential abuses. I can’t imagine that there would be many anyway but there could be some.

I might say I also want to thank the hon. member for going to the trouble of speaking to my deputy and staff so that they were able to acquaint me with her concern, her further thought, on the 60-year-old who is crippled and, apparently under some circumstances, may be eligible for admission to a nursing home. The difficulty with that kind of thing, as I see it, is that it gets my staff and my ministry involved in assessment of certain criteria which are outside the purview of expertise that’s normally within, or supposed to be within, my ministry. We can ascertain the age of an owner but we would have to go beyond that to determine whether or not they were otherwise qualified to be in a nursing home and were age 60 and so on.

Therefore, I have some reluctance about adopting that course of action, at least at this time. We could give further consideration to doing this by regulation and maybe in some fashion I could develop a provision that would permit the 60-year-old to qualify if I had a certificate from the Ministry of Community and Social Services, or however that works, and I don’t know how that would work. But in some fashion that could confirm to us that the person qualified and was, in fact, a resident of a nursing home so as to permit the period to flow through. There may be a simple way to do it but this at least, I think, goes a long way toward accomplishing this end.

The couple whose children are grown and married and have flown the nest -- the couple who perhaps might like to come back to their home some day but for health reasons find it a little tough to keep the windows cleaned and the shrubs trimmed and the grass cut and all the rest of it, and rather hankered to go into an apartment for a while -- they might just like to have that base to return to some day if they find that they can’t stand the cliff-dwelling life.

There are some who do his. Having made the mistake of selling their homes they find to their despair they can no longer afford to go back into another home. Or maybe they wisely kept it and found that it was a good thing to which to return at a later time.

So I think we have accomplished most of this. I would thank the member for helping us to make a better bill out of this. I think we will try this for the next few months to see how it works, and we might just be able to incorporate something by way of regulation when I am able to direct my attention and my staff’s attention to it in the next few months.

Mr. Chairman: The member for Waterloo North.

Mr. Good: I have a question on the amendment, Mr. Chairman. Would this apply where the house, if it was his principal residence, was not sold until after the death of the former owner? If the property is transferred on terms of a will, would this apply?

Hon. Mr. Meen: Yes, this would apply then, to deem that to be the principal residence of the then testator, and so there would be no tax.

Mr. Chairman: Shall this new section 22 stand? Carried.

All right. Section 23 of the bill; that is, the new section 23 as renumbered, at the bottom of page 29. The member for Riverdale.

Mr. Renwick: Mr. Chairman, again I am not going to labour it. I have expressed my views about some aspects of the bill before. I am particularly concerned about the provisions of the regulatory power in subsection 2. I have no comment on subsection 1.

Mr. Chairman: Are there any comments on subsection 1 or can we dispose of that? The member for Kitchener.

Mr. Breithaupt: Mr. Chairman, I think that there are no particular problems with respect to subsection 1. We, of course, have generally viewed the provision of regulatory powers as one which should be jealously guarded by the Legislature. We feel that as much detail should be placed within a bill as is practical, and indeed possible, in order that the changes which regulations might develop from the manner in which the principle of the bill is discussed would be as small as possible. One presumes, though, that there is the necessity for various forms under this statute, perhaps more so than might be needed under other statutes that we have passed, and as a result we are prepared, with the caveats that I have given, to accept subsection 1.

Mr. Chairman: Shall subsection 1 carry? Carried. Now did I understand there are comments on subsection 2?

Mr. Renwick: Mr. Chairman, item (a) and item (k) are the ones which are of concern to me. Item (a) is one that we could not possibly tolerate in a taxing statute. To grant the government the power to exempt from tax “any designated land or class of designated land or exempting from tax any designated land with respect to which any disposition or class of disposition occurs,” is a grant to the government of the power to do whatever it wishes to do with respect to the application of this tax.

The elementary principle of the drafting of taxing statutes is to have the provisions with respect to the tax in the taxing Act, and not to provide for provisions under which, for practical purposes, the government can do as and when it wishes to do with the taxing bill. There is no principle upon which it can be justified, and if the minister calls in aid any other taxing statutes of the Province of Ontario, or elsewhere in Canada, to support what he is doing, I can assure him that it will be totally and completely irrelevant for the purposes of this particular section.

My comments, with the same respect, apply for the gradual relaxation of the taxing provisions set out in item (k), where the government would have the ability to pass regulations:

Providing for relaxing the strictness of this Act relative to the incidence of tax hereunder in special circumstances where, without such relaxation, inconvenience or hardship might result or the development of designated land might be impeded.

We are not prepared to permit that kind of leeway to the minister by way of regulation. The House will be in session for some considerable period of time now, throughout the month of June; we will be back in session, I understand, in September. If there are legitimate problems that would require amendments to the statute, then we should do it by way of amendment to the statute. But we are not prepared to countenance, for one single moment, the grant of those extensive powers. In line with the way in which we have dealt with this matter before, I assume we will deal seriatim with the items a through 1 of subsection 2 of section 23.

Mr. Singer: Mr. Chairman, subsection 2, section a, is a section which has no excuse, not only in any statute that comes before us, but particularly in a taxing statute.

The minister might just as well bring us a statute -- let him call it whatever he wants -- and all it needs is one section that says, the minister can levy in his discretion, or the Lieutenant Governor in Council, may make regulations taxing anybody for as much as they want any time they want. That, in effect, is what this kind of a regulatory provision allows. Let’s listen to the wording for a moment:

The Lieutenant Governor in Council may make regulations exempting from tax any designated land or class of designated land or exempting from tax any designated land with respect to which any disposition or class of disposition occurs.

So what the section really says is that no matter what else is in the statute, the Lieutenant Governor in Council may make regulations exempting anybody or any piece of land from the provisions of the statute. Now how, in all seriousness, in democratic Legislature, can a government ask for that kind of power?

It is an open invitation to lobbies and pressures -- and I am not suggesting that the application of that section will be a corrupt one, but the possibility of corruption, the imagination that corruption has taken place, the suggestion, will be coming forward at all times every time a regulation is passed, into this section.

One could ask: “Why was the land owned by ‘A’ exempted, when my land and the circumstances are exactly the same and is included?” What is the explanation? Maybe ‘A’ is a 17th cousin of the Treasurer. Probably being the 17th cousin, the Treasurer hasn’t spoken to him for a 100 years, anyway. But if somebody should work out a devious relationship, such as that one -- and there might have been some reason to exempt the 17th cousin White -- how in justice can there be a regulation passed by the Lieutenant Governor in Council taking that kind of action?

What is the logic? What is the sense in giving that wide, broad kind of regulatory power? It doesn’t relate at all to the provisions of the Act. It doesn’t set down any guidelines. The Lieutenant Governor in Council will act on the representations made to him by the Minister or Revenue. And as these things work, as I understand how they work, the recommendation of the responsible minister is usually accepted by his cabinet colleagues.

And the minister comes here and say: “Don’t worry. We have debated five weeks, and it is an imperfect Act, and it presents all sorts of difficulties. If we need changes, we will come back to you but in the meantime we need a clause drawn so broadly that we can exempt anybody we want at any time and for no reason from the tax we are intending to levy.”

Mr. Chairman, my colleagues and I can see no way in which we can support a clause drawn in the manner this one has been drawn. Without gilding the lily I think the clause speaks for itself without trying to extend this debate any further. I just state that we will not support this section and we will divide the House at the appropriate time in committee in relation to this subsection.

Hon. J. White (Treasurer and Minister of Economics and Intergovernmental Affairs): What the hon. member has said may or may not be true and correct, sir. The fact of the matter is it would be absolutely impractical to delete this section. The workings of the legislation would be almost impossible without it. I draw your attention, sir, to the fact that the Income Tax Act of Canada was passed in 1910. The Act has never provided a definition of income for the very good reason that it is absolutely impossible to phrase a definition --

Mr. Renwick: First of all, it was passed in 1917 and it did contain a definition of income.

Hon. Mr. White: -- so as to collect the appropriate taxes in accordance with the will and expressed wishes of Parliament.

Mr. Renwick: You are just in error. You are factually wrong.

Hon. Mr. White: I remind you, sir, that a year ago we passed --

Mr. Lawlor: He is fatuously wrong.

Hon. Mr. White: -- the Parkway Belt Act, at which time the minister was empowered to exempt certain lands from that plan and, as a matter of fact, we have been called upon to accept that responsibility. The decision having been made, as enacted by order in council, the government accepts the responsibility for all those decisions and all those decisions are made public.

Mr. Renwick: This is unbelievable.

Hon. Mr. White: I am not completely sure of my ground now, but I think you will find that the bill which was passed by this Legislature a few weeks ago, namely, the Land Transfer Tax Act, would have contained a similar provision. Certainly I know that the departmental Act of the Ministry of Revenue under what used to be section 9 enables the Minister of Revenue to forgive any tax, to forgive an interest, to forgive any penalty and to cancel any court sentences which have been applied under Ontario statutes.

The departmental Act itself has powers far broader than this one, powers which I think have never been objected to.

Mr. Renwick: It’s quite different. That is the exercise of --

Hon. Mr. White: These are powers which are seen to be absolutely essential by my friend from Lakeshore and other knowledgeable members who are expert in taxation complexities. I do hope, sir, that the Legislature will see this provision --

Mr. Renwick: You just make me shudder when you go through this kind of contortion.

Hon. Mr. White: -- in the context which I have mentioned and I hope that it will be retained within the statute.

Mr. Renwick: This is unbelievable. Mr. Chairman, first of all the Income Tax Act of Canada wasn’t passed in 1910. It was passed in 1917 with a predecessor Act in 1916. There was in that original Act a definition definition of income. It is a taxing statute that we are talking about. What provision there may have been for regulatory power under the Parkway Belt Act has no relationship whatsoever to the principles with respect to the levying of taxation.

Mr. Singer: And that was opposed, too.

Mr. Renwick: The fact that it is possible to forgive taxes under the financial Act of the Province of Ontario has no bearing whatsoever on the provision that we are talking about which is a grant to the government of a complete power to exempt any transaction from the imposition of this tax.

Hon. Mr. White: That is published.

Mr. Renwick: I don’t care whether you publish it or not. A taxing statute is not designed to provide the government, as distinct from the assembly and the laws enacted by the assembly, with the power to exempt people from tax or transactions from tax.

When you say to me that you have to have this section, or the bill won’t work, then you finally admit the lesson of the whole debate that there is substantial concern throughout the province that the bill won’t work in any event.

Hon. Mr. White: The lesson of the debate is that the opposition will do anything to pick up half a dozen votes no matter where they come from.

Mr. Singer: Oh, come on.

Mr. Renwick: This is quite ridiculous. For me to stand in this assembly and to have to listen to the Treasurer of this province use that kind of ridiculous argument shows that he has no conception of the principles of taxation in a democratic society -- none whatsoever.

Interjections by hon. members.

Mr. Renwick: The taxes are supposed to be levied by the persons able to look at the statute. He doesn’t go and look at the regulations. He looks at the statute to find out whether he is or is not subject to the tax. I am sorry at seven minutes to 6 o’clock to get exercised about it, but it is just ridiculous to have you enter the debate this way.

Hon. Mr. Meen: You complain when he doesn’t get into the debate, and you complain when he does.

Mr. Chairman: The member for Lakeshore.

Mr. Lawlor: Mr. Chairman, we in the opposition --

Mr. Renwick: A mindless entry by the Treasurer into this debate at this 11th hour of the bill is just absolutely ridiculous.

An hon. member: No wonder he needs you to take it through the House.

Mr. Singer: Are you sure you didn’t inconvenience yourself by coming in this afternoon?

Hon. Mr. White: If I am not here, it is because --

Mr. Singer: You should be here.

Hon. Mr. White: -- I am working for the province and half the time seeing delegations sent to me by opposition members, so don’t tell me that. If you think I am loafing then you have another think coming.

Interjections by hon. members.

An hon. member: You broke your amendments.

Hon. Mr. White: I will compare my number of hours of work to yours any old day of the week.

Mr. Chairman: The member for Lakeshore.

Mr. Singer: This is your bill and your mistake.

Mr. Chairman: Order please. Order please.

Interjections by hon. members.

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

Mr. Lawlor: -- efficacy on one side or the other, equally a waste of time, breath and noise.

Interjections by hon. members.

Hon. Mr. White: And you be careful, or I will come here tonight.

Mr. Singer: That would be terrible. Don’t threaten us.

Mr. Lawlor: Gentlemen, do we or do we not want to finish this bill?

Mr. Renwick: The Minister of Revenue must feel like wringing the Treasurer’s neck. You know you were doing very well.

Mr. Chairman: The member for Lakeshore.

Mr. Renwick: With four divisions you would be home free.

Hon. Mr. Meen: I would like to put on the record that I welcome the entry of the Treasurer into this debate.

Mr. Singer: Yes. You would have welcomed it during the past five weeks, too, but he hasn’t been around.

Mr. Chairman: Order please. The member for Lakeshore.

Mr. Renwick: Let the record show that the Minister of Revenue is delighted with the interjections of the Treasurer in this debate at the 11th hour.

Mr. Lawlor: Mr. Chairman, we have seldom had to labour, particularly in the opposition, so long and so strenuously to extricate any minister from such a plenitude of folly.

Hon. Mr. White: Don’t you want a speculative tax?

Mr. Lawlor: Never have we been subjected to this sort of thing before. Having given you time and breathing space, here and there you have amended the Act rather plenitudinously -- I think that is the word. Since we have abused the drafting of the Act throughout, I want to tell him, in case his spirits are hurt, that section 21 is extremely well drafted. I was quite taken with that particular section in its niceties, in terms of phrase, et cetera.

Hon. Mr. Meen: It is regrettable the draftsman is not here today.

Mr. Lawlor: But what does offend me, and I am sure offends the human mind, if you could roll it all into one ball, is subsection (j). That didn’t strike me as a very normal --

Hon. Mr. Meen: On a point of clarification, are we on all the subsections of section --

Mr. Chairman: First of all, since it is a special section, we should complete it.

Mr. Renwick: But we are going to vote on subsection (a), as I understand it.

Mr. Chairman: I understand it is subsection (a) we are dealing with at the present time.

Mr. Lawlor: Just subsection (a)?

Mr. Chairman: Yes, please. Does the hon. member for Lakeshore have comments on subsection (a)? Does the hon. minister have a reply?

Hon. Mr. Meen: Yes, I have some observations to make on that subsection, Mr. Chairman, on a suggestion made by some of the hon. members opposite that it was a unique kind of section. The member for Downsview keeps talking about this being a taxing statute, and what an outrageous performance it is to have a subsection like subsection (a) of section 2.

Interjection by an hon. member.

Hon. Mr. Meen: I would draw to his attention the fact that I didn’t hear much argument when we talked about the Land Transfer Tax Act, and I am looking at section 18, subsection 2(a), and section 18 --

Mr. Renwick: The language is quite different. Now, let’s not fool anybody. The language is quite different.

Hon. Mr. Meen: I might just quote it. It says the Lieutenant Governor in Council may make regulations exempting from tax any person tendering for registration a class of conveyance, and so on -- and I might ask, any class of conveyance? --

Mr. Singer: A class of conveyance.

Hon. Mr. Meen: -- to which it is determined that this Act is not intended to apply on any conveyance to persons prescribed for the purpose of this clause.

Mr. Renwick: Not intended to apply.

Hon. Mr. Meen: I suggest to the hon. members that the appropriate wording in subsection (a) of subsection 2 is essentially the same thing.

Interjections by hon. members.

Hon. Mr. Meen: We have analogous provisions in the Retail Sales Tax Act and the Gasoline Tax Act. Of course it is in every taxing statute.

Mr. Renwick: Of course it is not.

Hon. Mr. Meen: I might just take a look at section 246 of the federal Income Tax Act, for example.

Interjections by hon. members.

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

Hon. Mr. Meen: Look at the kind of provision the Income Tax Act of Canada has in section 246, subsection 1. It says:

Where the Treasury Board has decided that one of the main purposes for a transaction or transactions effected before or after the coming into force of this Act [How do you like that? “Before or after coming into effect” even?] was improper avoidance or reduction of taxes that might otherwise have been payable under this Act, the Income Tax Act or the Excess Profits Tax Act, 1940, the Treasury Board may give such directions as it considers appropriate to counteract the avoidance or reduction.

How about that for power, for goodness’ sake?

Mr. Renwick: We argued about that last night.

Interjections by hon. members.

Hon. Mr. Meen: I am suggesting that here the hon. member for Downsview says you have to know what your tax liability is and look at the authority it gives the minister to tax. I say that’s not the case at all; the provisions for liability for tax are clear in other sections of this Act. This subsection gives authority to exempt from tax; not to apply a tax but rather to exempt from tax, or the attraction of a tax liability.

Mr. Renwick: We dealt with avoidance last night.

Mr. Chairman: Order, please.

Hon. Mr. Meen: It certainly is clear that over the next few months, when we are applying this tax, there may well be instances in which this kind of authority is necessary in order to avoid an unjust application of the tax. If that is so and if, in the wisdom of my cabinet colleagues who would approve this regulation as the Lieutenant Governor’s order in council, such order would be made, it would be published and it would be there for the scrutiny of all.

I recognize that it is broad in its power but I also say to the hon. members, through you, Mr. Chairman, it is an essential ingredient to the application of this Act, as my colleague, the Treasurer, so well put it a few minutes ago.

Mr. Chairman: Shall subsection (a) then stand?

Mr. Singer: No way.

Mr. Renwick: I think I am going to filibuster now until 6 o’clock.

Mr. Singer: Would you call it 6 o’clock?

Mr. Renwick: The one thing I really don’t want to do is to walk up and down these corridors from 6 to 7 o’clock while the Tories come in and I miss my dinner.

Would you call it 6 of the clock?

Mr. Chairman: Will there be further discussion on other subsections of this bill?

Mr. Renwick: Yes, there will be, because we have similar comments on them.

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