Legislative Assembly of Ontario

The House resumed at 8 o’clock, p.m.

Mr. B. Gilbertson (Algoma): Mr. Speaker, I would like to introduce two school classes from Algoma riding. One is from C.O. Somes Public School, Batchawana Bay, and the other is from Searchmont Public School. I want at this time to have the members join with me to welcome these students and their teachers and chaperones.

Mr. Speaker: The hon. member for Wentworth.

THIRD READING

LAND SPECULATION TAX ACT (CONCLUDED)

Mr. I. Deans (Wentworth): Thank you, Mr. Speaker. I have two or three comments I want to make with regard to the bill before we get to that crucial moment when the votes will be counted. Then we’ll see whether the government will be able to sustain its position and perhaps go on with the bill or whether we in the combined opposition will be going to defeat them this evening.

Hon. A. K. Meen (Minister of Revenue): Has the member forgotten his party is voting with us?

Mr. M. Shulman (High Park): Never.

Mr. Deans: I want at the outset to make it crystal, abundantly and perfectly clear --

Mr. R. F. Nixon (Leader of the Opposition): But the member and his party are voting with the government.

Mr. Deans: -- that we have decided upon looking at the word “back,” that the word “back” should be struck out --

Mr. R. F. Nixon: I knew there was some reason why we came back early.

Mr. Deans: -- together with all the other words that should be struck out. The only difficulty we’ve had, and I think it’s pretty clear to everyone in the House --

Mr. R. F. Nixon: Is making up your mind.

Mr. Deans: It’s funny the Leader of the Opposition should put it that way because I know he has some considerable experience in like matters with making up his mind.

Mr. J. R. Breithaupt (Kitchener): My leader does it promptly and well.

Mr. R. F. Nixon: Where is the member for Riverdale (Mr. Renwick) who said he was going to vote with the government?

Mr. Deans: Nevertheless we’ll overlook the fact that the Leader of the Opposition has had difficulty making up his mind in the past and we’ll talk about the bill.

Quite frankly, we don’t agree with the amendment the Liberals have put forward. There is no question about that. We don’t see the value of going to the standing administration of justice committee. We see the value, of course, of voting against third reading of the bill as we always intended to do. We recognized right from the day the bill was introduced that it didn’t fulfil any useful purpose in the Province of Ontario; that it wasn’t likely to have a beneficial effect on the housing market; that it was likely, on the other hand, to become a cost of doing business; and that, given those things, the bill wasn’t worthy of support, in our opinion.

We voted against it on second reading as the government can recall, I’m sure. We attempted, by way of a number of amendments --

Mr. R. F. Nixon: There were nine amendments.

Both the member for Downsview (Mr. Singer) and the member for Riverdale are coming in now.

Hon. A. Grossman (Provincial Secretary for Resources Development ): It’s going to be a long night.

Mr. Deans: I am almost reluctant to break this up.

Hon. Mr. Grossman: God help us!

Mr. R. F. Nixon: Has the member for Riverdale got a point of order?

Mr. Deans: We decided, even after trying to move amendments, Mr. Speaker, that the bill could not be amended satisfactorily. We voted against many sections of the bill because the sections of the bill that we saw as being most obnoxious and most regressive could not possibly be amended to satisfy what we believe would have been a reasonable bill.

Mr. R. F. Nixon: But the member’s party also designated farmers as speculators.

Mr. Deans: We came to the conclusion in the final analysis, after all of the amendments had been counted and the bill had been considered, we frankly couldn’t support it on third reading. It had been our intention simply to vote against it. Unfortunately, the Liberal Party in its inimitable fashion clouded the issue.

Mr. V. M. Singer (Downsview): Oh, come on!

Mr. Deans: In they came with a motion to refer and that motion to refer would have had a standing committee of the Legislature make determinations well beyond its competency.

Mr. R. F. Nixon: Not at all.

Mr. Deans: There is no standing committee of this Legislature that has either the ability or the jurisdiction to determine whether this tax will be considered as a deductible business expense under the federal corporation tax.

Frankly, we felt that the most honest thing to do, recognizing that, was for one of two things to happen. Either the government should not proceed with the bill until there was clarification; or the government should put a clause in the bill which would have made it clear that it was not the intention of the government to tax in excess of 100 per cent and to set out what the maximum tax was to be, taking into account both federal and provincial. This hasn’t happened.

The Liberal position is not going to make it any more clear with regard to whether or not it will be considered a business expense and so we are put on the horns of a dilemma, as my leader (Mr. Lewis) said. Nevertheless, we will vote that the bill be not read a third time.

Interjections by hon. members.

Mr. Deans: We will vote that the bill be not read a third time.

Mr. R. F. Nixon: Is that all right with the member for Riverdale? How can he do that?

Mr. Deans: I want to tell the Leader of the Opposition it was at the insistence of the member for Riverdale that we vote that way.

Mr. R. F. Nixon: Why is he ignoring us?

Mr. Breithaupt: Everybody else is going to vote against it because they don’t like it.

Mr. Singer: I insist that he come back.

Mr. J. A. Renwick (Riverdale): I would vote for the Liberals but if they are unlucky enough to be in the middle, they have real problems.

Mr. R. F. Nixon: The NDP is in a box.

Mr. Deans: We don’t see ourselves --

Mr. R. F. Nixon: Will he kindly go to caucus this week?

Mr. Renwick: I chaired the last one.

Mr. Singer: But he was all alone.

Mr. Deans: Anyhow, I think both in public and in legislative terms, the proof of the pudding will be in the eating. It’s when one has to stand; that’s when one determines how he is going to vote.

Mr. Renwick: Thank you very much.

An hon. member: Right.

Mr. Deans: At this point, I want to be sure that everybody knows that when the votes are counted, we will stand in opposition to the government on this bill.

Interjections by hon. members.

Mr. Deans: We will further stand in opposition to the ridiculous position put forward by the Liberals. That is what we are saying. They can play games only so long but at some point --

An hon. member: That is what we said. They can --

Mr. Deans: -- along the way, in first, second or third reading --

Mr. R. F. Nixon: Then what is the NDP going to do?

Mr. Deans: -- they have to declare their position with regard to the principle of the bill.

Mr. Breithaupt: The NDP hasn’t done anything yet.

Interjections by hon. members.

Mr. Deans: At this point and from this point on our position is: (a) we were opposed to the principle; (b) the bill could not possibly be amended -- we were opposed to the principle --

Interjections by hon. members.

Mr. Breithaupt: Not in committee. The NDP was going to vote with the government because it was against speculators.

Mr. Deans: Now, (b) it was not possible in our judgement to amend the bill satisfactorily to bring it into line with our position.

Interjections by hon. members.

Mr. Deans: And (3), or (c) if you like, we still stand opposed to the bill as it is currently before us.

Now let’s take a look at the reasons. There are six reasons why we can’t support the bill. First of all, the bill will do nothing to reduce the price of land. It will likely keep land off the market. The second point is the possibility, the probability, that this tax will increase the price of land. It will concentrate building in the hands of major developers, without question, regardless of the amendment and the cost of this tax will become a cost of doing business.

Hon. Mr. Mean: The member is repeating himself.

Mr. Deans: I am just giving the position and why we are voting against the government.

Mr. Renwick: There is no repetition there that I can see.

Mr. Deans: Three, the tax will more likely hit small --

Mr. Singer: Has the member told all the NDP --

Mr. Deans: -- people in this community rather than hitting the large --

Mr. R. F. Nixon: Anyone under 5 ft.

Mr. Deans: It will encourage people to do renovations which are unnecessary; that’s the fourth point.

As point 5, we suggest it will be extremely difficult to police the renovation clause. The policing of renovations will be well nigh impossible and the government will have an extremely difficult time actually trying to determine the value of renovations and whether or not they fall within the 20 per cent allowance. Six, and very important to a large sector of the community, this bill by its very nature will increase the price of rental accommodation in the Province of Ontario.

Mr. Singer: What does the Minister of Agriculture think about raspberries?

Mr. Deans: With those six points --

Hon. W. A. Stewart (Minister of Agriculture and Food): The member should go ask Stafford; he will tell him.

Mr. Deans: -- together with the often-stated point that it is very unclear whether or not this will be considered by the federal government to be a cost of doing business and --

An hon. member: Don’t say that.

An hon. member: I just read that speech -- arrogance!

Mr. Deans: -- whether it will be permitted as a deduction against federal corporate income tax. We just don’t see ourselves in a position of being able to support the bill.

So, as I said before, and as was stated by my leader, at the appropriate time when the votes are counted, we will vote not to have this bill read a third time.

Mr. Singer: And in favour of our amendment.

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

Mr. Shulman: Mr. Speaker, I rise to oppose the bill, of course, on third reading, if there has been any doubt in) the minds of my Liberal friends where I stood on this bill.

Mr. Breithaupt: No, it is the member’s friend from the front row we are more worried about.

Mr. Shulman: And I think at this point, Mr. Speaker, it might be worthwhile to look back at what has happened since April 9, when this bill was proposed. It is interesting to re-read the speeches that were given by all members of the House on second reading, and it is fairly obvious that most of us at that time missed the serious import of what was happening. Certainly I had very little experience -- no experience in the buying and selling of land -- and could only go at that time on what I read in the bill.

Mr. R. F. Nixon: Just soya beans.

Mr. Shulman: Just soya beans, that’s right. I have had very few soya beans growing in Ontario. Since that time the number of delegations and individuals, people within the real estate trade, within the apartment building trade, within the home building field, who have come to me as an individual member with their cries of woe and beware, and what is going to happen --

Mr. R. F. Nixon: I thought we had all the speculators.

Mr. Shulman: -- have quite shocked me.

Hon. J. R. Rhodes (Minister of Transportation and Communications): What do you do with those speculators?

Mr. Shulman: As the Minister of Transportation and Communications is going to discover in the next year and a half, speculators, horrid as the word is, have their place in his type of society, and in his type of society he needs them.

Hon. Mr. Rhodes: And in the member’s.

Mr. Shulman: If this party formed a government, I’m quite sure we would bring in a type of bill that would be far worse to speculators. But we have the other means to control speculation. You can’t bring in a bill like this unless you intend to build the apartment buildings yourself. You can’t stop the apartment-house building unless you are going to replace it with something else.

I direct that to the minister through the Speaker. Now he’s diverted me from my speech, but I’m glad he did, because that’s a very important point.

Of course we want to tax speculators. Of course we do. But it must be done in an intelligent way that is not going to hobble the economy of the province, and when a Conservative -- I’ve got to disgress again, Mr. Speaker -- the Attorney General of Saskatchewan was down here some three or four weeks ago and he looked at this bill and he came and listened to the debate on second reading, and he walked out of the House, and he said, “If I attempted to introduce a bill like that in Saskatchewan I’d be called a Marxist. Every paper across the country would be running editorials demanding my head, and demanding that the government go down.”

Mr. P. D. Lawlor (Lakeshore): Including the Wall Street Journal.

Mr. Shulman: But it’s because this bill has been brought in by a Conservative government that the press has ignored it. The government has had a few dibs and dabs here and there. The odd columnist has written a little piece, but by and large, just look up there, there is nobody there.

Hon. Mr. Rhodes: That’s not nice.

Mr. R. G. Eaton (Middlesex South): What an insult.

Mr. Breithaupt: There are two.

Mr. Shulman: By that I mean there is no one from the Globe and Mail.

An hon. member: Is that the only reason?

Mr. Breithaupt: That’s not, by definition, nobody.

Mr. Lawlor: There is no representative from the Sun.

Mr. Shulman: There is not even anyone from the Toronto Sun, which is even more serious. In any case --

Mr. L. Maeck (Parry Sound): That’s what they mean. The member’s speech wouldn’t be too long.

Mr. Shulman: Fortunately, I understand a columnist from the Sun is hidden somewhere in the House, and he no doubt will report my speech. He has been very good about things like that in the past.

Hon. Mr. Rhodes: Probably not very accurately, though.

Mr. Shulman: Just to return to the point the Minister of Transportation brought up. The idea was well formulated, but the carrying out of it is abominable. You cannot have a dream, as the Treasurer (Mr. White) has had, and attempt to put it into force without giving thought as to its implications, as to its complications, as to the method by which it should be done, and we know now what happened. There have been enough leaks from the government’s gentlemen sitting under the stairs there. We know how it all happened. The minister came in very excited one day, he had the idea.

Mr. R. F. Nixon: Not this minister, surely.

Mr. Shulman: Not this minister, he has no idea. He carries out others’ ideas. No, the Treasurer is who we are talking about. He was the man with the idea. He came down all excited and he sold the Premier (Mr. Davis). He came to his staff and he said, “Bring me a bill.”

And I know now -- he knows now -- we all know now, what he should have done. They should have brought in this very same bill and said: “This is an avenue for discussion; and it sets it all out to discuss it with the people involved.” He could have put a date on it to prevent speculation. But what he should have said was: “Look, this is a concept; this is what we want to do now.”

This has been done with the business tax Act bill last year, and numerous other bills in previous years. When you go into a new concept you don’t blunder into water if you don’t know how deep it is; you go and ask the experts, you get a pilot. You ask people to come in to give their ideas. You send it to committee and have it discussed, and that’s not such a bad idea. But instead --

Mr. Deans: You do it before.

Mr. Shulman: You do it before, of course. The member for Wentworth is quite right.

Instead of which the minister came down like gangbusters and he said, “I’ve got the solution.” Last year he had the solution too, and we know what happened to that. It’s fortunate we did, because this bill is going to come back to haunt us all -- every member of this House and every one of the three parties.

Mr. Speaker: Order please, order. The hon. member is repeating what has already been debated in this House, on principle of the bill, and also in committee of the whole House. The bill has received extensive consideration. The only matter now before the House is the matter of third reading of the bill, whether or not it shall now be read a third time, or whether or not the reasoned amendment shall be approved and the bill returned to the committee of the whole House. Now, most of the members who have spoken, have spoken at some length or about matters other than on the principle of the bill --

An hon. member: Not me though.

Mr. Speaker: -- and I have permitted most members to do that; not all of them. I do believe the hon. member --

Mr. M. Cassidy (Ottawa Centre): I was the exception.

Mr. Speaker: -- is now straying considerably from the matters before the House.

Mr. Breithaupt: Always, always the exception.

Mr. Deans: That’s the way it is.

Mr. Shulman: Mr. Speaker, I shall confine myself to the principle of the bill and I shall not repeat anything I have said. I may repeat something someone else has said and there is nothing in the rules to prevent that. If that were the rule of the House, the first speaker would finish the debate on many bills.

Mr. Speaker: The hon. member may not speak now to the principle of the bill. The only matter that he may speak to, is whether or not the bill be now read the third time.

Mr. Shulman: Well, I am going to speak at great length as to whether or not the bill may be read the third time. Is that all right? In doing that, this of course includes one of the reasons the bill should not be read the third time -- I am sure it will -- because the principle is wrong. If, in that way, I stray on to the principle, you will pardon me, I am sure.

Mr. R. F. Nixon: The member said a moment ago the principle was right.

Mr. Shulman: The intention was right; the intention was right.

Mr. Lawlor: The Leader of the Opposition is always confused on his principles.

Mr. Shulman: Well, we all agree with that. There is no question the speculator should be taxed.

An hon. member: We don’t know what your view is.

An hon. member: He said the principle was wrong.

Mr. Shulman: Now, why this bill should not be read the third time is very simple. Really, I can sum it up in almost a few words. The intention of the minister in bringing this bill forth --

Mr. Lawlor: If it is as wrong as you say it is, it couldn’t be right in principle.

Mr. Shulman: We have heard two intentions from the other side; it depends which minister you listen to. Let’s suppose we listen to both the Minister of Housing (Mr. Handleman) and the Minister of Revenue -- and the Treasurer. The two intentions they gave us: We were going to get lower costs of housing, and secondly we were going to have more available housing. That’s supposedly what it was all about. And they threw in as a sort of a third factor: We are going to raise $25 million a year from this particular bill. Well, we’ll come to that third matter a little later this evening.

First of all I want to look at the first two intentions of the bill, which were to lower costs and to provide more available housing. Since I spoke on the principle of the bill on second reading, I have had the opportunity of consulting with the principal apartment builders in this city. They informed me -- and I don’t claim to be an expert; I am really merely repeating what I’ve been told by people who are expert in the bill -- that this bill is going to produce exactly the opposite result of what the minister intended. The reason they give me is -- and I believe I spoke to the three largest builders in southern Ontario -- that they do not intend to build any more apartments in this province while this bill is in effect. Except for the ones for which they are already committed.

Let me explain: There is a time lag, and the time lag varies anywhere from six months to two years depending on local conditions, depending on commitments already made; but basically, say about a year or a year and a half. And the reason they don’t intend to build any more apartments is very simple --- they cannot resell those apartments, so anything they intend to build they have to hold. They have two fears in connection with the holding of apartments. The first is that in case, of disaster, if they are forced to sell because of some terrible financial reverse, the financial blow will be horrendous.

In a few moments I am going to discuss the problem of inflation that is involved, but first there is the fact that from April 9, 1974, for a period of 10 years, a very large proportion of any capital gain, even if it is not a true capital gain -- and, Mr. Speaker, there are two types of capital gain that ensue in this world. There is the kind where something that is worth X dollars goes up to X plus $100,000; that is a real capital gain. Then there is a kind of phoney capital gain where, because of inflation, paper money buys less, so it appears to be worth more.

What the apartment builders are worried about are the phoney capital gains that this government is going to tax. And if inflation continues just at its present rate, and if a building that costs $1 million today goes up to $1.5 million five years from now, without any true capital gain, and they are forced to sell because of financial squeeze, mortgage squeeze or inability to renew -- any of these things -- this government is going to whomp it to them. And it is not going to take away a portion of their capital gain; it is going to take away a portion of their capital. That’s the first reason.

The other thing -- and it is the unsaid fear -- is that this bill is not going to work and, as a result, the government is going to have to bring in rent control. Let me just follow that up a bit.

As the apartment shortage develops -- and this is not something for 1974; this is something for late 1975; and I fear for the government in October, 1975, because by then, the vacancy rate in apartments in this city is not going to be zero, it is going to be something less than zero. People are going to be bidding for keys. This automatically follows when the influx of people continues, when we have lots of money around as a result of inflation and high employment -- and there is no question that the government is producing high employment in one form or another -- and when these are joined with a failure to build apartment houses.

As the apartment shortage reaches zero, which it will this year, and then goes to minus zero as people are forced to move in with each other next year, then we are going to get the various things that we saw during the war years. People will sell their keys. People who are leaving the country, leaving the city, or moving out for one reason or another, will be able to sublet those apartments. Once that happens we have only one way of keeping the lid on; that is, by putting in rent control. When that happens, God knows what is going to happen to the apartment owners.

I don’t want to go into all the complications of rent control, because it is not pertinent here and we have gone through it on other occasions. But let me stress again that if the government is going to put in this type of bill -- I am directing my remarks, Mr. Speaker, to the Minister of Transportation and Communications, because I have lost the Minister of Revenue; he has departed for more pleasant climes -- if the government is going to put in a programme that stops apartment construction, it must consider what that means.

It means that as the apartments stop being built, the pressure on other places to live is going to increase. That is going to mean family housing of every type; it is going to mean a ballooning of rooming houses in this city; it is going to mean a ballooning of rents, not just in apartments, but in flats and in houses. Then the next phase is the rise in prices of housing that will follow, because people will be able to make more money by renting houses, by renting rooms and by renting flats.

I come to the second thing that the minister intended to produce with this bill and the second reason this bill should not receive third reading; that is, he said this will produce lower prices. It is interesting, because of the lengthy debate by every member of both opposition parties in this House, that we have had enough time, eight weeks or almost two months since this bill was introduced, to see what the effect is going to be on prices. It is quite instructive, Mr. Speaker, to look at what the effect has been.

The minister was right. He said there was going to be an immediate drop in the price of housing in this province. He produced that. In the first three weeks, perhaps the first 3½ weeks, some speculators who were short of cash and who were worried about closing, panicked and houses were thrown on to the market. The price of housing did fall. There is no question about that.

Mr. Cassidy: At least 75 cents.

Mr. Shulman: Some of them fell by a few thousand dollars for a very brief period. It is quite interesting to see what happens.

The statistics which are produced by LePage are far more reliable than the ones from MLS, because MLS only get a certain number of the houses that come on sale but LePage gets them all. The statistics are quite interesting. For the first few weeks there was a temporary fall but by the third week in April this reversed itself. The prices have jumped to the point that today they are some 10 per cent higher than the day the minister introduced his bill.

Just stop to think what that means and why that is happening. We had the first immediate panic that speculators couldn’t get out. We had a great deal of offerings coming on the market and there was no one buying because no one was quite sure what the bill meant. Everybody held back figuring we were going to get lower prices. We believe the Minister of Housing, Mr. Speaker; we believe the Minister of Revenue. If we wait a few more weeks we’re going to get the bargains they promised.

There was a hold-back, and for three weeks there was this temporary drop-off of about three to four to five per cent in the price of housing. That reversed itself completely by May 1. By the end of May the average price of a house had gone up some nine per cent from before when the bill began. We have now reached the spot where as a result of this bill, not only is housing more expensive, less of it is already being contracted for and none of it in the form of apartments is going to be built next year.

There was an article in the Miami Herald last Friday the minister might find interesting to read. This article is really a tipoff to what is happening here in Ontario because it tells us something that is happening in Miami. This editorial says “Welcome to the Canadians,” and goes on to say, “In the last three weeks we have had an influx of Canadian apartment builders from Toronto.” The first one they mention is Alex Grossman, my bridge partner.

Hon. Mr. Grossman: He has been down there for years. That’s ridiculous.

Mr. Shulman: But, what has he done this last month? I went up to him at the St. Clair Bridge Club -- we’ll give them a plug -- on Saturday and I said, “Alex, what is this editorial about?” His comment was, “We are going where we can build.” He is a very large shareholder in Meridian and Cadillac. “We are going where we can build, and we can’t build in Ontario.”

Okay, so they are going to have the apartments in Dade County, in Miami city, in Fort Lauderdale, in Hollywood -- and here we are going to have the minister --

Mr. Breithaupt: We’ll exchange the minister for the houses.

An hon. member: How about the other Grossman?

Hon. Mr. Grossman: They will have trouble with pollution, I can tell the members that.

Mr. Shulman: Now we know what this bill is not going to produce. It is not going to produce lower prices.

Mr. Speaker: The hon. member is speaking on the principle of the bill and he is not speaking on the motion before the House.

Mr. Shulman: No, I am speaking on why this bill should not receive third reading. I am going on to the third reason why --

Mr. Speaker: You are speaking to the principle of the bill and most of it has been said before.

Mr. Shulman: I am sorry, Mr. Speaker, I am attempting to speak on why this bill should not receive third reading. The second reason I gave why it shouldn’t receive third reading -- I hope you didn’t miss it -- was because our developers are deserting us, and they are going back into the States.

Mr. Speaker: I didn’t miss anything the hon. member said. I repeat that he is speaking to the principle of the bill. That question has been decided.

Mr. Shulman: Will the Speaker not agree with me that if the developers are deserting us this is reason why the bill should not receive third reading -- so that we can woo them back? We have to woo them back unless we are going to have a comprehensive housing policy.

Hon. Mr. Grossman: Mr. Speaker, have sympathy for the hon. member. He is losing a bridge partner.

Mr. Speaker: I will ask the hon. member to speak to the motion before the House.

Mr. Shulman: No, I am not speaking to the motion before the House. I am speaking as to why the bill should not receive third reading. I’ll come to the motion before the House when I --

Mr. Speaker: That’s the motion that is before the House and the hon. member should speak to that motion only.

Mr. Shulman: Is the Speaker directing that after that motion is taken I can then speak on why the bill should not receive third reading?

Mr. Speaker: Absolutely not. The member knows better than that.

Mr. Shulman: In that case, I am speaking on why the bill should not receive third reading, which is my right no matter how many motions the Liberals bring in. I am coming to their motion by and by.

The third reason the bill should not receive third reading -- and I have given the two positive reasons which turned out to be negative; now I want to turn to the negative reasons -- is that the minister has said one of the results of the bill will be an intake of some $25 million from speculators which will come into the coffers of this province. Mr. Speaker, I want to go on record as saying that it is not going to be any $25 million per year coming as a result of this bill. There is not going to be any $5 million and there is not going to be any $1 million.

I want to go on record tonight and say that a year from now, when we rise in this House and ask the minister how much revenue he received as a result of this bill, it will be something under a quarter of a million dollars, the only people he is going to catch are the poor innocents who are not really aware of what is happening.

The minister has said $25 million. I say less than a quarter of a million. And I am willing, Mr. Speaker, to wager anyone in this House on that basis. If the minister is brave, perhaps he will take me on. It is very obvious as one speaks to the speculators in this province, and it is very obvious as one speaks to the apartment builders in this province, and it is very obvious as one speaks to the developers in this province what is happening. Everything has become frozen. And as building has become frozen, and as development has become frozen, and as large landholders have determined to sit on their land, there aren’t going to be the transactions. When this bill goes through later tonight, what you will in fact have done is put a cork in an already-opened hot champagne bottle. You can sit on that cork for a reasonable length of time. I am not sure how long you will be able to sit on it, Mr. Speaker. But sooner or later that cork is going to blow. And when it blows, a portion of your anatomy is going to go with it.

Hon. Mr. Grossman: We don’t use champagne over here. We just use beer. We wouldn’t know that.

Mr. Shulman: Okay. You can stop development for only a certain length of time. And you can freeze people out of apartment buildings. And you can freeze the holdings of lands. But sooner or later the screams will come from out there. They all aren’t aware of these esoteric discussions that occur in here, or whether something is on the principle, or whether it is on the amendment, or whether it is on the third reading. They just know they are not going to be able to get housing at a reasonable price. And it is going to be the doing of the Treasurer and the Minister of Revenue. But he is not going to get any revenue. Don’t fool yourself. You are not going to catch a single speculator in this province. They are not mad. Why should they pay you? They don’t have to. They can just sit on it.

The fourth reason this bill should not be passed, Mr. Speaker, is because it is going to increase lawbreaking in this province. It is an open invitation to fraud. And the one thing that we should be attempting to do in this room, if we do nothing else, is minimize law-breaking, minimize fraud, and encourage respect for the laws we pass. Instead, the wording of this bill is so inept. If ever there is a reason it shouldn’t be given third reading it is this. Because we are going to turn thousands of law-abiding people, ordinary homeowners, ordinary landowners, into lawbreakers. They are going to get away with it, mind you. No one is going to go to jail as a result of it. But is that really what we want to do?

Do we really want to encourage people to believe that the law is an ass, and the minister is an ass, and the government is an ass, and that we are all damn fools? That is what we are doing if we pass this bill. What we are saying right now is, “Okay, there is a speculative land tax. Any value on your lands since April 9, 1974, you have to pay 50 per cent tax on. Really it is more than 50 per cent. We are going to take 50 per cent. And the government is going to take somewhere between 25 and 75 per cent. So you will end up paying somewhere between 75 and 125 per cent of your profit. Sounds nutty. But that is what we are saying. But they don’t really have to pay. Because if you sell your land tomorrow, you don’t really have to pay the tax. Just send us a letter saying your land hasn’t really gone up in value and we will exempt you from the tax.”

Mr. Speaker, I ask you, is that not an invitation to fraud? Everybody knows land has gone up in value since April 9. Yet those people over there in the revenue department are already sitting with dozens of letters in their department from homeowners and landowners saying, “I’m selling my land in June [or,] I have sold my land in May, and I am not going to pay any tax because I swear that the land has not gone up in value since April 9, 1974”. Those people know they have prepared false affidavits, yet the government has told them this is the right thing to do.

But what is going to happen after this? The minister has promised us, once this third reading goes through, once we have passed the bill, things will be different. Then they are going to have to get an estimate, and the estimate is going to have to come from a real estate agent, and this is the only ray of light for the real estate agents. I have discussed with a group of six in the last 24 hours, this very section of it. They know there are going to be far fewer transactions, but as they put it, “Boy, are we going to make money on appraisals!” They are already competing over how much they should charge for appraisals, running anywhere from one-tenth of one per cent up to one per cent, depending on how great the appraisal is going to be. We are going to produce dozens, perhaps hundreds of dishonest appraisers in this province. Mr. Speaker, the very thing we should be trying not to do we will do if we give this bill third reading -- that is, spread disrespect for this Legislature, not just for this law but for all laws, and spread a feeling in the public that we are not going to be taken seriously but just foolishly.

The fifth reason this bill should not be given third reading has to do with what is being done to the farmers. I don’t intend to repeat the arguments that have been given by the farm members of this House. I am not an expert on farming; I know very little about it. I do recognize that letter after letter after letter has been coming into my office and, I presume, into the offices of the Liberal members who come from the farm communities, crying as to what has been done to them.

The most recent one I just received this afternoon. It comes from Loretto, Ont., and is a copy of a letter sent to the Minister of Revenue, begging us not to put this through. It gives a number of reasons. It points out, very briefly and in less than a minute, that the Act prevents the farmer from selling his farm on retirement or disability, unless he has a relative with a great deal of money. It prevents a farmer from bettering his lot by selling his farm and relocating elsewhere. It prevents a farmer from renting on long-term leases in order to justify the ever-increasing expenses for equipment.

All of this is being ignored by the party that is supposed to represent the farmer. We are supposed to represent the consumer. They are supposed to represent the farmer, and yet there they are, doing in the farmer with this bill.

The sixth reason this bill should not receive third reading is the increased powers, the novel, initial expansion of power that the minister has assumed in this bill. Never before this session has any minister ever come in here and said, “I am bringing a bill in, fellows. It may not be quite right; so I am going to put in a section that, if there is something I have left out, I don’t have to come back to you and get your approval, but I can put it in at my pleasure and at my leisure.”

That minister has the nerve to come in here and put in that section and, more amazing, no one in the press has written a word about that. There hasn’t been a word anywhere in the province about that -- not a word.

The minister has said that there hasn’t been a single one of his colleagues who has risen. They come to us in the back halls and say it’s awful and speak about it, but not one of his colleagues has risen to worry about this. The government may not always sit here, Mr. Speaker. There may be other governments, other ministers and other Premiers who will not be unhappy at using this precedent. That is possibly one of the worst things about this bill, one of the most important reasons that this bill should not receive third reading. Do we really want to give a minister such powers? Do we really want to give any government such powers?

Mr. T. P. Reid (Rainy River): Not that particular minister.

Mr. Shulman: Any minister. I wouldn’t want to have those powers if I were the minister because of the implications of what may come of that.

Mr. W. Hodgson (York North): The member will never be a minister. He won’t have to worry.

Mr. Shulman: Believe me, I am not worried on that score. I have no desire to be a minister. Those ambitions are long gone. I assure the member those ambitions have disappeared.

Mr. W. Hodgson: At one time he had ambitions.

Mr. Shulman: Yes, once I did, before I came here. After seeing this place, to the ministers I give only sympathy. They are forced to bring in things they don’t believe in and forced to carry out actions they are going to regret. No, I have no such ambition.

There is an eighth reason why this bill should not receive third reading, Mr. Speaker. It is the eighth of nine reasons. You’ll be glad to hear I am almost finished.

Mr. Speaker: I think the hon. member missed no. 7, didn’t he?

Mr. Shulman: No, no. 7 is there but I am glad you are paying attention, even if not close attention. Go back to Hansard; seven is there.

The eighth reason this bill should not receive third reading is that it is going to be an intolerable temptation on the minister, on his department and on his colleagues to use the bill for the advantage of their friends and their acquaintances and those who donate to them politically. I am referring, of course, to the fact that the bill allows the minister and his department to exempt anyone from its provisions who, the minister feels, may be inconvenienced.

Hon. Mr. Meen: Oh, come on!

Mr. Shulman: If someone had come to me eight weeks ago, Mr. Speaker, and said to me the government is going to introduce a bill and they are going to say this bill only applies to those who think it should, I would have laughed at it. And yet we have had two bills like that. One of them was accepted as a joke. It was written by Mr. Herbert, you will recall, and one of the sections of that bill -- Bill 32, in case you’ve forgotten it -- was the last section of it, which said: “This bill shall only apply to those who feel it should.”

Everybody laughed. We sang that one, remember? I couldn’t believe it. Someone actually read that bill and took it seriously. On looking back, if I had to do it over again, I never would have brought that bill in, Mr. Speaker, because I never dreamed that the Minister of Revenue would read it and take it seriously. He read it and said, “My God, what a great idea.” To our great amazement here it is. Bill 32 carried on to Bill 25. Backwards.

Yet, what began as a joke in the British Houses of Parliament, is brought here in all seriousness. If that section was printed in any part of this Commonwealth, people would augh and think it a joke. How can the minister bring in a bill and say it applies to everybody except those we think it shouldn’t apply to? How can the minister bring in a bill and say it applies to everybody except those it inconveniences? How about a bill saying the speed limit on our highways is 70 unless you have a Corvette and it goes 100?

The minister should be ashamed. If he had written the bill himself he would be ashamed. He just now is slightly embarrassed because he has to do another man’s bidding. These words in this bill are going to come back, not just to haunt this minister but to haunt every one of his colleagues who haven’t spoken up about this. Where was the government’s caucus?

All right. The final reason, the ninth reason, that this bill should not be given third reading, is that it catches the wrong people and it doesn’t catch the right people. The theory behind the bill was that we were going to catch the speculators. The speculators are not going to be caught. There are at least a dozen different clauses in this bill which allow any speculator with half a wit to avoid paying the tax, and the speculators are full-witted. Who it is going to catch is the ordinary person who happens to have bought some land up north.

I have a very close friend who wanted to buy some land in the country and he couldn’t afford to buy the expensive land in this area. He’s stuck near Kleinburg where land sells at $20,000 an acre. He went north of North Bay and he bought unserviced land as a retreat, some 200 acres of unserviced land for which he paid the princely sum of $20 an acre. He is going to get caught. That’s the incredible thing. He has been changing his place of residence. He was until then.

He has become a speculator, while the real speculators -- the people who bought, say, second residences out near Kleinburg or Orangeville, where they paid $20,000 to $25,000 an acre -- are exempt up to 20 acres. Up to $500,000, you’re exempt. There is no problem. So, we catch my poor friend with his $4,000 investment because he’s a speculator. We’ll let the big boys get by with their $500,000 properties.

We’re penalizing the innocent. We’re exempting the guilty, if speculators are guilty. We’re exempting the speculators, in any event, and if ever a bill has been introduced in any Legislature in this country, or in the whole Commonwealth, or in the United States of America, that was as bad, I have never seen it.

Mr. Speaker, there are nine reasons this bill should not be given third reading. What bothers me most of all is that we have stood here day after day and week after week, and we have tried. At first we thought it just had been done too quickly. The minister hadn’t given it thought. We thought if we talked across the floor through the chairman, through the Speaker, to him he would listen and make the changes that were necessary. But he sat there like a stone as though he wasn’t hearing us.

He heard us all right. He wouldn’t answer us. He wouldn’t make the changes necessary. He received the deputations. He received the letters from the industry. He received the letters from the apartment builders. He heard from the real estate agents. He heard from the landowners and the developers and he stood there and he wouldn’t move. He said, “Don’t worry. We’ll work it out. We’ll make up regulations that will solve our problems. We’ll put you people on the regulatory board and we’ll solve them.” And he brought in this bill, which is an abomination.

Unfortunately reason means nothing in this House and I know perfectly well that bill is going to get third reading. There is no way we can stop it despite the reluctance of his own colleagues; I think now they are beginning to suspect what is really involved in this bill. I think they are beginning to realize that a year or so from now they are going to have to withdraw it in ignominy, in embarrassment. I think perhaps even the minister is beginning to suspect but he sits there like a stone. He smiles occasionally.

Mr. Lawlor: A smiling stone.

Mr. Shulman: But he won’t budge. This bill is a shame, Mr. Speaker.

Hon. Mr. Meen: Is the member for Lakeshore going to speak?

Mr. Shulman: It is a travesty of what it is intended to do. It is intended to tax speculators instead of which it is demoralizing and mining our housing market.

Mr. Lawlor: I’ve been trying to get a deal through despite the legislation.

Mr. Shulman: All right. I won’t go on any further. I want to say a word about the Liberal amendment. Mr. Speaker, you may have noted there was some confusion in this party on the Liberal amendment --

Interjection by an hon. member.

Mr. Shulman: -- and, frankly, the confusion is perfectly understandable. The Liberals have suggested we send this to committee. For what purpose? He won’t listen. If I thought for a moment that we could go to committee and talk sense to him, I would support the Liberals gladly but we have sat here day after day after day and he won’t listen. What’s the use of wasting more time? For that reason only --

Mr. M. Gaunt (Huron-Bruce): Give him one more chance. We’ll give him one more chance.

Mr. Shulman: He doesn’t want it. He just wants to see the last of this bill and get transferred to some other ministry before the House starts to fall in. That’s the only thing he really wants.

Mr. W. Hodgson: Does the member want a towel now or later?

Mr. Shulman: I won’t need the towel later. I would like to have it now. Later the government is going to need the towel. When the chickens come home to roost on this bill, its members are going to wish they had never heard of the Treasurer.

Mr. Lawlor: They’ll need a bathrobe.

An hon. member: They’ll feel like we do.

An hon. member: The Treasurer is getting out.

Mr. W. Hodgson: The NDP has so many seats over there; it is not going to have any more.

Mr. Shulman: I don’t think it really matters.

An hon. member: Don’t worry.

Mr. Shulman: The disfavour that all of us in this House are going to feel as a result of this bill is going to shock us all. It is not just the government people. We are going to have to share some of the brunt of this for not being able to persuade them of what is common sense.

To come back to the amendment; for that reason, I cannot support the amendment. I don’t see any point in our going in and attempting again to argue with this minister day after day. He is determined to proceed on this course to disaster; if he is so determined, let him go. He has been warned again and again that a year and a half from now he is going to come back to us and say, “You were right.”

Thank you.

Mr. Speaker: The hon. member for Lakeshore.

Mr. Lawlor: Mr. Speaker, I have misspent the better part of my youth -- it seems like years now; the wasted years I call them -- arguing this particular bill in this House. Seldom if ever, at least during my brief tenure, passing like a moth through the flame, have I seen a bill held before this House for so long; wrangled over so acrimoniously at times; and so little affected by contributions made.

We come to third reading and one can’t refrain from making the valedictory as it passes into history. I think the minister latterly adopted a nostrum of his erstwhile leader, John Robarts. He used to say, “If you are really in trouble, you can’t stand the strain any more and the opposition begins to bludgeon you somewhat, the best thing to do is just shut up and sit there.” That’s how it has been visited upon the head of our young minister, Mr. Speaker.

In his baptism of fire he was scorched. I felt at certain points that he resembled Joan of Arc going up at the stake but then he decided not to answer and he’s done extremely badly since. The incendiary fires have only continued to burn and all it does is mean a certain obtuseness and purblindness has entered into the debate whereas before we had a groping similarity to reason and a passing possibility of getting something done.

The lawyers out in the field, particularly the Tory lawyers, have said to me “Won’t they withdraw it?” The other day I was in the registry office. It was quite beguiling actually because on Friday afternoon I went to register a deed. I had a whole cohort and entourage of fellow solicitors surrounding me. At that stage, having to field so many questions and fielding them almost as badly as the minister does on occasion, I felt that perhaps I would walk along to the end of the room, set up a little desk there and begin to charge a fee.

On Friday afternoon, I could have made somewhere close to $25,000, after telling the profession what was wrong with it, and perhaps more mellifluently telling them how to get around it, which is really what they are interested in and which they’ll shortly discover for themselves without too much advice from me or anyone on that score.

As far as the Liberals are concerned, when oh when are the Liberals going to be able to determine what is a principle? If a bill is so badly machined in its workings, in its interstices -- I think it is high time sophisticated people in this Legislature learned, against the grain of their naivete, that principles, that ends and that means are inextricably woven together -- that means are themselves partial ends, and that if the means are profoundly defective, that affects the goals, the ends, the principle of a bill. You can’t segregate off, in a simple-minded simplistic fashion, one from the other.

We recognize, if I may say so, that from the outset the internal workings of the bill were so malformed and maladroit as to lead to total ineffectiveness even if the principle, apart from that, was in any way acceptable.

What we would have thought was something remotely acceptable, and at least an initial step in this direction, which you yourself say is pioneering legislation, which will be adopted by absolutely nobody -- as the hon. member for High Park has indicated -- would have been had you said that a certain quantitative ratio should have been set. Let’s say, anything over 50 acres, start there. There might have been a second criterion worked into the formula, namely, that a certain valuation would be made, let’s say anything over $150,000.

At least you could have started there, and the whole swath of all the investment properties, and all the little guys, and the infinite trouble you have brought upon your own head would have been avoided -- at least at that particular stage. You could have then, and maybe at some time in the future, moved in with some kind of adroitness into these various other areas in which you have blundered like bulls in china shops, all the way through for the past several weeks with this particular legislation.

This legislation ought not to be read the third time because -- and I put my hand over my heart when I say this -- it will make a major contribution to bringing the Tory government down. I think that should be made a chief point, and I think that you should be fairly cognizant of it. When they asked me in the registry office whether it wouldn’t be withdrawn, I said “No, too much prestige is at stake.”

The minister above all, and certainly the Treasurer by this time, have known what malfunctioning it’s going to breed and what a degree of hostility has been engendered and will be as it comes to greater knowledge in the province. Every month that passes the situation will get worse as more and more people come to realize how they are caught in this wretched net. I say that you’ve done a great deal to alienate the farming community and justly so -- therefore every little investment property -- but we have discussed that at length.

The minister knows those particular heads. There’s hardly a property in Ontario that won’t be, in one way or another, profoundly affected by this particular legislation, even if it is only with respect to valuations and the increased cost to the individual in obtaining those valuations in times to come, in order to place a premium or a mark upon what they may sell for and what capital tax may be attracted.

Secondly, it ought not to be read a third time because it’s both ineffectual and ineffective. There are, as we come through the bill, any number of ways to circumvent your legislation. As has been pointed out ad nauseam, the big boys are the ones who are going to do it first. The minister’s definition of farming is so broad, so riddled with honeycombs, that anybody who sets up a beehive, a partridge in a pear tree and maybe a stook or two, will have availed himself of the farming definition -- and they are all going to move in that area. If they don’t, they’ll just hold on to it for 10 years and rent it out as investment property and then watch the prices rise over that period of time. Or they will set up their own valuations by way of the 20 per cent improvement figure. The minister is never going to be able to check that. That’s just a lot of malarkey about his inspectors. Valuations of 20 per cent will be circumvented without turning a hair, or they’ll convert the whole thing into a factory or into a commercial property and thereby deny housing to the province, which the government is seeking to promote, reaching the very opposite end to that which it set initially as one of its objectives.

As the member for High Park has stated, back-dating will become something of a commonplace because, as I understand it, at the registry office when those affidavits under section 3 are submitted, they are not subject to further test. The registry office will accept them holus-bolus, and the volume as these things go through -- and the minister knows that in the past few days, the registry office has been absolutely mad with turnover -- will be such that the ministry couldn’t begin to check these things.

This legislation was started too vaguely and too ambitiously, and therefore can’t pinpoint the real wrong and the real fault, the things we are trying to do something about in the area of land speculation. Why the minister was so cavalier and why he threw his net so broadly totally bemuses me.

The third reason this ought not to be read the third time is that the legislation is maladroit in instance after instance, and the minister has had to provide himself with regulatory powers of the most extensive nature imaginable, completely contrary to the traditions of our society and to parliamentary traditions themselves.

What has he done for instance, in the area of quit-claim deeds? Anybody who is turning over a quit-claim deed has to file an affidavit. How can they say it’s their principal residence? It is no longer. They may have left the place 15 years ago and are quit-claiming today. “Oh, I will straighten it all out by legislation,” says the minister.

Suppose there’s a family. I had a case the other day involving an Italian family of four, where each one of them held a quarter of an interest. The two boys have got married and moved out. One wants to turn over his one-quarter interest back to the family. How does he particularly manage that thing without going through some kind of machination brought on by this Act, which has neither envisaged nor made provision for in that kind of functioning?

Fourthly, it has set up a turmoil in the various areas of the economy and in the professions that are the very ones that the minister has to rely upon to see that the Act does work effectively. Time has not been given for consideration, for public scrutiny of the thing in advance. Every accountant you talk to is practically out of his mind as to how to advise his clientele. The real estate profession has ground to a standstill and has asked me by telephone innumerable times to explain the workings of various sections.

The legal profession is in a state of high dudgeon over the thing, and the minister knows it. His officers are trying to smooth it over and accommodate them to the upmost extent possible, but the degree of consternation, of disquietude and of confusion that reigns within the profession itself as this thing goes through for the third time, is something wholly unheard of.

All these various factors are very profound reasons why the minister should reconsider and withdraw. We will not go along with the minor confusion due to ensue. I can only say to this House that as I understand the situation, we had arrived at a position where we felt, having maintained from the beginning that this bill was flawed and defective beyond mere minor points of relative triviality, but flawed in its workings, in its means and in its end in terms of the principle, that we had to go ahead with a vote against the bill as the final gauntlet was thrown in this matter. That was the position we took.

We did find the pragmatic, molly-coddling eviscerations of the Liberals somewhat unpalatable and paused for a while as to whether we could support that particular kind of nonsense. But finally we felt that if we made our position clear in this House, we could support it. Thank you, Mr. Speaker.

Mr. Speaker: Does any other member wish to participate? The hon. minister.

Hon. Mr. Meen: Well, Mr. Speaker, unlike most of the members who have spoken this afternoon and this evening, I intend to limit my comments to the matter of the third reading and, in particular, the motion for amendment of the motion for third reading.

My colleague, the Treasurer, dealt with the correspondence between himself and the Minister of Finance, but in brief let me just say on that point that it is the Minister of Finance who is the policy minister in Ottawa, despite what the member for Sarnia (Mr. Bullbrook) had to say when we were talking earlier on this subject. It is not the Minister of National Revenue and it is, indeed, the Minister of Finance in Ottawa who has this authority. The Minister of Finance has acknowledged this and he has indicated to us that he can give, and will give, no ruling on the status of this tax vis-a-vis the federal Income Tax Act, until Bill 25 has become law.

Let me deal for a moment with the question of the amendment itself and the proposed reference to the standing committee on justice. I would ask this: Just what would this accomplish? The member for Riverdale put this rather well. He said that it would accomplish nothing. He said that it would be an exercise in futility. They would hear, Mr. Speaker, opinions from various quarters and they would be cast in the role of trying to weigh one opinion against another, of trying to reach a decision, when nobody in this House is really a tax expert -- not the member for Downsview, not the member for Riverdale, not the member for York East (Mr. Meen). None of us is a real tax expert.

Mr. Singer: All the facilities of government, and the minister didn’t come up with one authoritative opinion, not one.

Hon. Mr. Meen: Now there was reference to the --

Mr. Singer: They spend $100,000 on opinions of where to dump garbage, but not one dollar on taxation.

Mr. Speaker: Order, please. The hon. minister sat there throughout the entire debate without saying a word. Perhaps he could be afforded the courtesy.

Mr. Singer: Well he’s dumb.

Hon. Mr. Meen: The member for Downsview made reference to the opinion of Peat, Marwick, a copy of which I don’t happen to have, but I do happen to have a copy of the same document to which the member for Downsview referred in reference to the opinion on the bill issued by Clarkson, Gordon and Co. back in April or early May, and I suggest that he has placed an erroneous and distorted interpretation upon what they were saying.

Mr. Singer: I didn’t do that. I just read what it said.

Hon. Mr. Meen: I do not deny that I gave my own expression of opinion to the press on this subject.

Mr. Singer: How did the minister come to an opinion like that from what I read?

Hon. Mr. Meen: I also indicated what they said and I think the way I expressed it was reasonably accurately reported by the press.

Mr. Singer: Oh nonsense. What distortion of the facts.

Hon. Mr. Meen: Let me read what they say: “While a tax is payable by the transferor of the land and calculated by reference to the gain, he realizes it is structured as a tax on the land itself. As such, it appears to be a tax on property rather than a profits tax,” and I might just say parenthetically that that means it is deductible.

Mr. Singer: Just read the next sentence.

Mr. Speaker: Order please.

Hon. Mr. Meen: “The federal government has not yet indicated whether it will accept this position for income tax purposes.”

Mr. Singer: That’s right.

Hon. Mr. Meen: Now the point I have made all along, and I simply repeat it here, is that the rules as applied to date -- and it is precisely what Clarkson, Gordon have been saying -- would indicate that this tax was a deductible item before computation of tax --

Mr. Singer: That’s balderdash.

Hon. Mr. Meen: -- and the member for Riverdale himself pointed out that it would be necessary to amend the federal Income Tax Act before this status would be changed.

Mr. Singer: We don’t agree. Read the rest of the report.

Hon. Mr. Meen: The rest of the report --

Mr. Speaker: Order please. The hon. member for Downsview knows full well that he should not be interrupting the minister, who has listened patiently --

Mr. Singer: Why shouldn’t I?

Mr. Speaker: Because he should observe the decorum of this House.

Mr. Singer: Oh baloney.

Mr. Speaker: I am warning the hon. member to observe the rules and procedures and customs of this House.

Mr. Singer: I always observe the rules, Mr. Speaker.

An hon. member: Throw him out.

Hon. Mr. Meen: I believe Clarkson, Gordon in establishing their table, which is table 1 in their report, indicate what the tax would be if the federal government did not, but that is within the competence of the federal government, should it decide to change its Act.

Mr. Singer: What a terribly weak argument.

Hon. Mr. Meen: When the federal government brought in its budget on May 8, it indicated it was going to change the ground rules as to royalties, for example.

Mr. Singer: It is beyond belief that the Minister of Revenue can even try to argue his position.

Hon. Mr. Meen: It already had notice of Bill 25 but I would draw to the attention of the members of the House, Mr. Speaker, that there was no mention made by the Minister of Finance in his budget of May 8 -- if that was the date -- of any suggested change with respect to a land speculation tax.

Mr. Singer: Rot. Absolute rot.

Hon. Mr. Meen: I would simply suggest to the member that what Clarkson, Gordon is saying is precisely what we’ve been saying all along.

Let me refer the hon. member to an observation he made in the House, in committee.

Mr. Singer: Yes, please refer to it.

Hon. Mr. Meen: The member for Downsview said, at page 2187 of Hansard on May 16, Mr. Speaker:

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

Mr. Singer: Has the minister got such an opinion?

Hon. Mr. Meen: The member for Downsview said:

“These opinions would all be nothing more than opinions but it certainly would impress me much more.”

Mr. Singer: Right.

Mr. Breithaupt: Are there any?

Mr. Singer: Has the minister got any?

Hon. Mr. Meen: In reply I observed, on page 2189:

“The opinion is not completely unanimous but it is strongly in favour of our position. As we assess it, it seems to fall well on our side.”

Mr. Singer: Come on. What authority has the minister got?

Hon. Mr. Meen: I went on:

“I am not going to say whether we’ve consulted Mr. Stikeman or Mr. Robarts or Mr. Wolfe Goodman; and even if I had consulted them” --

Mr. Singer: No, of course not.

Hon. Mr. Meen: To continue:

-- “and had their written opinions, I would decline to table them. That would be quite improper. We have already in other cases -- ”

I was interrupted by one of the members opposite.

It happens that prior to that date of May 16, one of the gentlemen to whom I made reference at that time had written an opinion to his colleagues. He read with some interest what I had said on May 16 and under date of May 29 he wrote me.

Mr. Singer: Who did it? What’s his name?

Hon. Mr. Meen: He wrote:

“Dear Mr. Minister, I was very flattered and somewhat amused to read in the Ontario Hansard of May 16 that you had referred to me by name concerning the question of deductibility for income tax purposes of the Ontario land speculation tax. As it happens, I have given some preliminary consideration to this question and I enclose herewith a copy of a memorandum which I have prepared, dated May 2, 1974” --

Mr. Singer: Is that the one the Treasurer read here today?

Hon. Mr. Meen: To continue:

-- “which may be of some interest to you and your officials. Yours very truly.”

I might say I called this gentleman to see if he had any objections to my using his name; that was this morning when I checked with him on receipt of this letter of May 29. He indicated he had no objections whatever. The signature to that letter is Wolfe D. Goodman, a senior member of Goodman and Carr, the gentleman to whom the member for Downsview made such eloquent reference a few days ago.

Mr. Singer: Isn’t it wonderful that after the fact one can drag these things out from the Tory ministers?

Hon. Mr. Meen: Let me read into the record the opinion Mr. Goodman gave to his colleagues and has been giving otherwise, certainly up to the current date, on the matter of deductibility of tax payable under the Land Speculation Tax Act.

“I understand that the federal Department of Finance has informally expressed a view that the tax levied under the new Ontario land speculation tax is not deductible as an expense for federal income tax purposes. Finance obviously considers that the Ontario tax is an income tax on profits from land trading and that an income tax cannot be regarded as an outlay or expense which is incurred for the purpose of earning income but is merely a compulsory allocation of profits after they have been earned.

“However, I believe that Finance’s position is incorrect and the Ontario tax must be regarded as an expense which is deductible in computing income for federal income tax purposes.”

Mr. Singer: We heard that this afternoon. We’re equally unimpressed with it now.

Hon. Mr. Meen: He subdivides this report of his into three basic sections. The first is as follows:

“Section 2, subsection 1 of the Ontario Act imposes a tax upon the land itself. While a measure of the tax is 50 per cent of the excess of the proceeds of disposition over the adjusted value (cost) of the land, there is a considerable difference between a tax on land which is measured by the profit realized on sale and an income tax on the vendor in respect of the profit. This difference is well illustrated in the decision by the Privy Council in Esquimalt and Nanaimo Railway Co. versus AG BC 1950 appeal cases, page 87.”

Mr. Singer: That isn’t what the statute says.

Hon. Mr. Meen: To continue:

“In that case, British Columbia imposed a tax on timberlands which was calculated by reference to the amount of timber cut from the land. The railway contested the tax, contending that it was an indirect tax which would be passed on to the purchaser of the timber and that it was, therefore, ultra vires of the province. However, the Privy Council held that any tax on land must be regarded as direct tax irrespective of a measure of tax liability, and it was, therefore, a valid levy. Similarly, the Ontario tax, however measured, is simply a tax on land. The Ontario tax is by virtue of section 5(1) a lien on the land until it is paid.

“Accordingly, the proceeds of sale which belong to the vendor are reduced by the amount of the tax. In computing the profit on the sale for income tax purposes, it would be absurd [says Mr. Goodman] to include in revenue more than the net proceeds of sale after deduction of the Ontario tax.

“I see no reason to treat the Ontario tax as any less deductible for income tax purposes than say the export tax imposed on oil exports under the Excise Tax Act. Both levies reduce the vendor’s revenue. I do not consider that this result is affected by section 2(3), which provides that the Ontario tax is payable by the transferor of the land. This is purely procedural. In fact, if the transferor is a non-resident of Ontario, it is doubtful if the tax can be recovered from him, except by exercise of the lien under section 5(1). [And he goes on to say:] Income tax is imposed on persons resident in Canada with respect to their personal income for the year. It is quite possible for a person to make substantial profits from the sale of land which is subject to the Ontario tariff, but to have no taxable income for federal income tax purposes, For example, if you are dealing with a real estate development corporation, its land profits may be completely offset by capital cost allowances in respect of buildings selling for investment. By virtue of regulation 1100(12), it is not subject to regulation 1100(11), which limits most taxpayers’ claims for capital cost allowance to their rental income. Since the Ontario tax is payable on each land sale, whether or not the taxpayer has any taxable income for the year from all sources, it cannot really be regarded as income or profit tax.

“[And then this third and last item:] In any event, I do not consider that there is no invariable rule that any tax which is measured by the taxpayer’s annual income must be non-deductible for the purposes of computing income for the purposes of some other statute. For example, in Herod, Buenos Aires Ltd. versus Taylor Drube, 1964, 41 TC 1450, it was held that an Argentinian tax which was levied on an English company which carried on business in Argentina, and which was measured by some capital was deductible for British income tax purposes. The court emphasized that this was a franchise tax, imposed for the privilege of carrying on business in Argentina” --

Interjection by an hon. member.

Mr. Speaker: Order, please.

Mr. Singer: Mr. Speaker, is there a rule about reading this?

Mr. Speaker: Order, please, the hon. minister has the floor.

Hon. Mr. Meen: To continue:

-- “otherwise the company would be unable to carry on business” --

Interjection by an hon. member.

Mr. Speaker: Order, please!

Mr. Singer: On a point of order, we had this read to us once this afternoon. There is a ruling about reading documents at length. We have had it once today. It was claptrap earlier this afternoon; it’s still claptrap. Why do we have to hear it twice?

Mr. Speaker: I rule that is not a point of order. The hon. minister has the floor.

Mr. Singer: It is a point of order. It is repetitious.

Mr. Speaker: I rule that is not a point of order.

Mr. Singer: It’s unduly reading from a prepared document and it shouldn’t be done.

Mr. Speaker: The hon. minister has the floor.

Hon. Mr. Meen: The hon. member has no argument when it comes to being repetitious, Mr. Speaker. The final sentence is this quotation is:

“In the court’s view, this was sufficient to constitute the Argentinian tax as a deductible expense for British income tax purposes.”

Mr. Cassidy: Has the whip not got the troops to vote for the government?

Hon. Mr. Meen: Mr. Goodman goes on to offer the suggestion:

“I consider that any attempt by National Revenue to disallow deduction of the Ontario tax as a business expense should be resisted.”

That happens to be the opinion of one of the experts to whom the member for Downsview suggested I might turn.

Mr. Singer: Nonsense. If the minister had it from May 19 why did he not read it before?

Interjections by hon. members.

Mr. Speaker: Order please.

Hon. Mr. Meen: That opinion had been written by him precisely two weeks before this debate even entered the House.

Mr. Breithaupt: Why didn’t the minister give it to us earlier?

Hon. Mr. Meen: It is rather interesting that he volunteered to bring this forward and let me see what he had written two weeks before May 16 when the suggestion had been made that he, as one of the well-known experts in Toronto in the area of tax law, should be mentioned.

Mr. Cassidy: Why did the minister wait 2½ weeks before he read it to us?

An hon. member: I want to hear what the minister can say without reading.

Interjections by hon. members.

Mr. Cassidy: That doesn’t excuse the minister.

Mr. Speaker: Order please.

Hon. W. D. McKeough (Minister of Energy): If the member wants to make a point, make it a good one.

Hon. Mr. Meen: I want to make it clear, furthermore, as one point not really on this amendment, but it was raised by the member for Riverdale, and I heard it asked a couple of times and I am certain I answered it on both occasions, namely, how was the Ontario corporations tax to relate to the Land Speculation Tax Act? I thought I made it abundantly clear, but in case I did not I will repeat it now, with your permission, Mr. Speaker. Simply, that the Ontario corporations tax, which it mirrors in every aspect, to use the expression of the member for Riverdale, would --

Mr. Lawlor: Mirrors the vote.

Hon. Mr. Meen: -- accept the land speculation tax as a legitimate deduction --

Mr. Lawlor: Because the minister had better --

Hon. Mr. Meen: -- in the course of doing business and we don’t have to distort the Ontario corporations tax for that purpose. Within its four comers it follows, quite appropriately, that the moneys would be deductible.

Mr. Speaker, the whole proposal for referring this matter to a standing committee is specious.

Mr. Singer: Oh, yes.

Hon. Mr. Meen: It would, as my colleague the Treasurer observed, be a lateral move rather than a progressive move. It would not achieve us anything.

Interjections by hon. members.

Mr. Singer: Has he read the letter a third time?

Hon. Mr. Meen: We would hear opinions, mainly pro I expect, in favour of the bill, judging by the opinion I have just read into the record by Wolfe Goodman of Goodman and Carr.

Mr. Lawlor: One small point.

Hon. Mr. Meen: We would probably hear some adverse views expressed by some people who would want to cast doubts on the validity of the legislation.

Mr. Lawlor: Let’s test it; let’s find out.

Hon. Mr. Meen: The fact of the matter really is that until the federal government has an Act before it, the Minister of Finance is not prepared to give a ruling. We believe that we are entitled to proceed on the assumption that the practice followed under the federal Income Tax Act heretofore will be continued.

You have, as a business man, no other alternative, whether it be business or government, but to assume that the laws of other jurisdictions will continue, unless you have been advised they are going to be changed. In this case we have not been so advised, and we have every reason to believe that when the federal government has an opportunity to thoroughly study this matter it will recognize that it is a properly deductible expense before the computation of federal income tax.

Mr. Singer: What about the incidence of cronyism?

Hon. Mr. Meen: Nothing whatever would be gained by referring this to the standing committee, just further delay --

Mr. Singer: Come on. If the minister had a well-drafted Act it wouldn’t be delayed.

Hon. Mr. Meen: -- delay that the members opposite, the Liberal Party, dearly wanted.

Mr. Speaker: Order, please.

Hon. Mr. Meen: The longer there is delay the longer there will be confusion. The member for Downsview should be ashamed of himself for the kind of doubts he has cast in the market place because of the statements he has made both inside this House and out.

Mr. Lawlor: Please pass the bill! Let’s not hold it any longer!

Hon. Mr. Meen: Mr. Speaker, I was interested indeed to hear the comments by the member for Riverdale, who expressed my sentiments very, very accurately and well this afternoon.

Mr. Singer: Yes, we may never see the member for Riverdale again.

Hon. Mr. Meen: I expect that he will be back in the House this evening to help us all defeat this fallacious motion by the member for Downsview.

Mr. Singer: Shame on him.

An hon. member: Right.

Mr. Speaker: Hon. Mr. Meen has moved that Bill 25 be now read the third time.

Mr. Singer has moved, seconded by Mr. R. F. Nixon, that all the words in the motion for third reading of Bill 25 after the word “that” be struck out and the following substituted therefor:

“The bill will be not now read the third time, but be referred to the standing administration of justice committee so that that committee may determine whether or not the tax imposed by this bill is, in fact, deductible as a business expense under the federal taxing statutes.”

The question to be decided is: Shall the bill be now read the third time?

Those in favour of Bill 25 being now read the third time will please say “aye”.

Those opposed will please say “nay”.

In my opinion, the “ayes” have it.

Mr. Breithaupt: Mr. Speaker, before you ask for a recorded vote, are we to understand that if the New Democratic Party votes with this amendment it is voting both with and against the government?

Interjections by hon. members.

Mr. S. Lewis (Scarborough West): No, as a matter of fact, to clarify that, Mr. Speaker -- there is never an opportunity to clarify --

Mr. Speaker: Order, please. There is no discussion. I rule that the “ayes” have it.

Interjections by hon. members.

Mr. Speaker: Call in the members.

Interjections by hon. members.

Mr. Speaker: I believe one member of the House came into the chamber after the bells had stopped when the whips’ parade had started. I saw five people. Four of them, I’m sure, were civil servants. One, I believe, was a member.

Mr. R. F. Nixon: Oh!

Mr. Deans: Would the member care to retire?

Mr. J. E. Bullbrook (Sarnia): Would the hon. minister do the right thing?

Hon. Mr. Stewart: If it was me, I will gladly leave.

Mr. Speaker: I may say I may have been mistaken.

Mr. Bullbrook: I’ve never known you to be mistaken.

Mr. Deans: It’s okay, anyone who would put the Speaker in that position isn’t much of a man.

Mr. Speaker: The question before the House is the motion for third reading of Bill 25.

That motion is subject to an amendment moved by Mr. Singer and seconded by Mr. Nixon; a reasoned amendment and I believe I should read that reasoned amendment to the House. Shall we read it?

Mr. Lewis: No.

Some hon. members: Dispense.

Mr. Speaker: All right. The question to be decided first of all is whether or not the bill shall now be read the third time.

The House divided on the motion for third reading of Bill 25, which was approved on the following vote:

Ayes

Nays

Apps Auld Beckett Brunelle Carruthers Clement Downer Eaton Evans Ewen Gilbertson Hamilton Havrot Henderson Hodgson (Victoria-Haliburton) Hodgson (York North) Irvine Kennedy Kerr Lane Leluk MacBeth Maeck McIlveen McKeough Meen Miller Morrow Newman (Ontario South) Nixon (Dovercourt) Nuttall Parrott Potter Reilly Rhodes Rowe Scrivener Smith (Simcoe East) Smith (Hamilton Mountain) Snow Stewart Taylor Villeneuve Walker Wardle Winkler Wiseman Yakabuski -- 48.

Bounsall Braithwaite Breithaupt Bullbrook Burr Campbell Cassidy Deacon Deans Gaunt Good Haggerty Laughren Lawlor Lewis Newman (Windsor-Walkerville) Nixon (Brant) Reid Renwick Riddell Ruston Sargent Singer Smith (Nipissing) Spence Stokes Worton Young -- 28.

Clerk of the House: Mr. Speaker, the “ayes” are 48, the “nays” 28.

Mr. Renwick: I find greater difficulty voting with the Liberals than my colleagues do.

Mr. Speaker: I declare the motion for third reading carried.

Motion agreed to; third reading of the bill.

Clerk of the House: The 29th order, House in committee of supply.

ESTIMATES, MINISTRY OF AGRICULTURE AND FOOD (CONTINUED)

Mr. Chairman: The estimates of the Ministry of Agriculture and Food. I believe when we rose last it was the turn of the hon. member for Huron-Bruce to sum up his remarks.

Mr. M. Gaunt (Huron-Bruce): Thank you, Mr. Chairman.

Mr. R. F. Nixon (Leader of the Opposition): General applause on all sides, let it be noted.

Mr. E. M. Havrot (Timaskaming): A very popular guy.

Mr. Gaunt: Mr. Chairman, I find this waiting in the wings even more difficult than the performance itself.

Mr. R. F. Nixon: Oh, it is going to be a great performance.

Mr. Gaunt: Nonetheless I am pleased to --

Mr. S. Lewis (Scarborough West): You will struggle through.

Mr. Gaunt: I will struggle through. I am pleased to engage with the minister again this year in these estimates. I don’t want to repeat unnecessarily what has already been said in the debate, particularly at 10:15 on Monday evening. So I will try to avoid duplication in that respect.

Interjections by hon. members.

Mr. Gaunt: However, there are some points that I want to mention in these estimates. There may be some areas in which I will make comments that have already been made, but I do so simply to underscore the importance of the points.

Mr. R. F. Nixon: And from a position of experience.

Mr. Gaunt: I am not sure about that.

Mr. R. F. Nixon: Oh, I am.

Mr. Gaunt: It is true that in 1973 we had the best year for farmers ever in terms of actual dollars.

Mr. R. F. Ruston (Essex-Kent): Blame the Minister of Agriculture for Canada, he is the one who did it. The Minister of Agriculture for Canada did it all. Good for Gene Whelan.

Interjections by hon. members.

Mr. Lewis: I can see it is going to be one of those nights. Thank God there are only 15 minutes left.

Mr. Gaunt: I always love speaking at this time of night, particularly after a vote. The House is --

Mr. R. F. Nixon: Receptive.

Mr. Gaunt: -- flowing with exuberance, and one gets a chorus of applause and support one doesn’t usually get in the afternoon.

Mr. R. D. Kennedy (Peel South): Don’t hold your breath.

Interjections by hon. members.

Mr. Gaunt: As I was saying, if I may go back to where I began.

Hon. J. R. Rhodes (Minister of Transportation and Communications): Not again.

Mr. R. F. Nixon: Run her through again.

Mr. Gaunt: Thanks to Gene Whelan, 1973 was the --

Mr. Kennedy: Who’s he?

Hon. W. D. McKeough (Minister of Energy): Withdraw.

Mr. Ruston: Oh, go ahead. The minister is on the way out too.

Mr. Gaunt: In terms of real dollars or purchasing power, that is quite a different matter. The average 1973 income for every farmer in the Province of Ontario was $7,600, not including off-farm income.

Mr. R. Haggerty (Welland South): It wasn’t as good as the oil companies.

Mr. J. E. Bullbrook (Sarnia): For MPPs it was $14,900.

Hon. Mr. Rhodes: And some of us earned it.

Mr. E. Sargent (Grey-Bruce): You should be the last guy to talk about that.

Interjections by hon. members.

Mr. Chairman: Order, order.

Mr. Gaunt: In farmers’ terms, that’s a good year although many other people in our society would view that as a very modest income, indeed, given the fact that it had to serve as a return for management skills and capital investments as well as labour.

Mr. Kennedy: Did Eddie write that?

Mr. Gaunt: I wrote this. I always write my own speeches, and I don’t intend to change now.

Hon. Mr. Rhodes: You are reading it are you? You are not supposed to read it.

Mr. Bullbrook: That’s something nobody on that side can say.

Mr. Gaunt: That’s right. I write my own speeches and I know the material that is in it.

Mr. Kennedy: I heard you wrote Eddie’s and he wrote yours.

Mr. Gaunt: Well, there are always a lot of rumours and scuttlebutt about --

Mr. Kennedy: And Eric sandwiches them in between --

Hon. Mr. Rhodes: Right on.

Mr. Bullbrook: They both have an advantage over you. They can write.

Mr. Gaunt: Most of it is just that -- scuttlebutt. No substance, in fact, and that happens to be one of them.

An hon. member: Carry on.

Mr. Gaunt: Although, mind you, if my colleague from Grey-Bruce did decide to write a speech for me -- I’ve never asked him -- I’d be pleased to deliver it, I can say that.

Mr. Lewis: The member might regret it but he’d be pleased to deliver it.

Hon. Mr. Rhodes: He could end up in court.

Mr. Kennedy: Flying too low.

Mr. Gaunt: I think now I might as well kill the clock. I’m getting so much help that --

Mr. Ruston: Start off tomorrow on a clean slate.

Mr. Gaunt: As I was saying, this income of $7,600 had to serve as a return for management skills, capital investment as well as labour. Further, out of this money has to come funds for any expansion or improvement of the operttion. When all of these things are considered, the farmer is still far behind in terms of most other people in our society.

Mr. R. F. Nixon: Below the poverty level.

Mr. Gaunt: There are many forces that all came together at the same time to push prices up. The International Monetary Fund system changed and suddenly foreign buyers could afford to pay 25 to 30 per cent more for our food. The Russians and the Chinese bought up the only real reserve of grain in the world, and suddenly everybody else who wanted to buy grain was looking at empty elevators all over the world.

More droughts and crop failures hit worldwide agriculture than at any other time in recent history. So, production fell in Australia and South Africa, parts of North Africa, India and the Middle East. Floods swept over some rich farmland in the US last spring, and wet summers cut production in eastern Ontario and Quebec for two years in a row. All of these things have had an impact on food prices.

However, over 50 per cent of the price increases, I’m told, were due to increased prices for gas and oil. Along with the good farm prices last year came sharp increases in farm costs, which have had a very unsettling effect on the farm industry generally. I’m going to come back to that.

Additionally, consumers have been very restless about high food costs, although I think consumers by and large have come to appreciate and understand that farmers have to make a living too, and that their costs have been going up. I don’t really think most consumers begrudge the fanner a reasonable living.

However, on the front page of the Globe and Mail of Wednesday, May 8 -- that was just a few days after I started to write this speech, I’ll tell my friend from Peel South -- I noticed there was an article concerning the Food Prices Review Board and the research it had been doing into various marketing boards and how they have held prices higher than the supply and demand situation could justify. In my view, this does nothing to help consumers understand the situation. Indeed it does exactly the opposite.

It creates misunderstanding and mistrust, and unless the review board is prepared to print the whole story, it had better save the taxpayers the expense. The philosophy of the review board, as suggested in the article, is that because producers in the United States are going broke, our producers should go broke too, just so consumers can eat cheaper than would otherwise be the case, at least for the short run.

I think it is just about time that someone somewhere took Mrs. Plumptre and her posse out behind the barn and gave them a few basic lessons in agricultural economics. It is pretty obvious that none of them got very far in that subject, even though I’m sure they advanced well beyond that level, the elementary level, in most other subjects. If Mrs. Plumptre would only learn to understand that our farmers cannot produce below their cost of production, and while US producers can produce most foodstuffs cheaper than we can, if we continue to import cheap food which comes into the country -- they lower the cost of production at which our farmers can produce it -- eventually our farmers will be forced out of business and we will be dependent on imported food.

Then watch the prices shoot up. Take oranges, sugar, bananas, anything whereby we are solely dependent on importers and their whims, and see what has happened to those prices in the last 18 months compared to prices of foodstuffs we produce in our own country.

Need I remind you that the prices have gone up drastically in comparison to products we grow in this country? Canadians pay twice as much for oranges as do Americans in Washington, DC. So I would advise Mrs. Plumptre that she should take a look at the cost of production before she goes charging off on one of her consumer information junkets. Instead of helping the problem, the Food Prices Review Board has been part of the problem. Anyway I’m getting slightly sidetracked.

Mr. R. G. Eaton (Middlesex South): Get the message through to Gene.

Mr. Gaunt: Yes, I’ll talk to him about that. He listens.

Interjection by an hon. member.

Mr. Gaunt: I mentioned earlier that the higher farm input costs were having a very unsettling effect. They are producing a feeling of uncertainty, uneasiness and loss of confidence in the stability of the marketplace. Farmers are being encouraged to produce more because most agree that should there be a poor crop year on a world-wide basis in 1974, we would have a very serious food situation. Yet farmers are hesitant to do so because of the bad experience they have had with overproduction, surpluses, low prices and sometimes bankruptcy, in that order.

The unusually high prices for things the farmer has to buy just mean double disaster if farm prices drop sharply.

Interjections by hon. members.

Mr. Gaunt: As an example of the prices the farmers are having to pay -- a 40-lb bale of baler twine is three times the price it was last summer. The North American continent is short 320 million tons of steel at the moment, which is shoving up farm machinery prices considerably.

An hon. member: See what Trudeau’s done.

Mr. Gaunt: Also affected is wire. I tell you he’s done a lot. It could have been a lot worse, and if Stanfield gets elected it will be a lot worse.

Mr. Lewis: He won’t get elected.

Mr. Gaunt: My friend from Scarborough West says he won’t get elected and at least that’s reassuring.

Hon. Mr. Rhodes: Trudeau won’t get elected.

Mr. Gaunt: Because the people who would get hurt most in Mr. Stanfield’s price freeze would be the farmers and the labouring men.

Mr. R. F. Nixon: Tory times are hard times.

Mr. E. R. Good (Waterloo North): The professionals would go on their merry way.

Mr. R. F. Nixon: I have heard the Minister of Transportation say that himself. Tory times are hard times.

An hon. member: That’s right.

Mr. R. F. Nixon: Remember saying that?

Hon. Mr. Rhodes: That was before Trudeau.

An hon. member: Stanfield would make sure that the people who got hurt the least were those in the underwear industry.

Mr. R. F. Nixon: No, it wasn’t, I think you said it at the Liberal nomination in 1968. I do remember.

An hon. member: Tory times are hard times.

Mr. R. F. Nixon: You were nominating the Liberal candidate who then went on to become member of Parliament. That’s when you did it; right. I remember. “Tory times are hard times,” you said that night.

Mr. Lewis: You told us that when you applied for Liberal membership.

Hon. Mr. Rhodes: Don’t hold your breath.

Mr. Lewis: I don’t know, I have heard a number of rumours in this field about your --

Mr. M. Cassidy (Ottawa Centre): You are obviously considering it.

An hon. member: You couldn’t get the Liberal nomination.

Mr. R. F. Nixon: He’d jump anyway. Just didn’t look good enough.

An hon. member: You made your bed and you are going to wallow in it.

Interjections by hon. members.

Mr. R. F. Nixon: There is a special comer in hell --

Interjections by hon. members.

Mr. Chairman: The hon. member for Huron-Bruce is anxious to make his remarks.

Mr. Gaunt: Yes. I am getting less anxious all the time, I might say.

Mr. Lewis: What did you say about incomes in 1973?

Mr. Gaunt: I think I’ll run that one through again. As I was saying, the farmers’ input costs have gone up tremendously in the last 12 months. I mentioned baler twine, the shortage in steel which is driving up farm machinery prices -- and which has also affected wire, a simple thing like wire on the farm, and particularly barbed wire which is simply unavailable at any price, I am told, in most places.

The energy crisis has substantially shot up costs to the farmer. Agriculture is basically an industry that runs on energy. Agriculture is the biggest single consumer of oil, gas and petroleum. Agricultural production will be inhibited by the effects of shortages and higher prices for fossil fuels, fertilizers and chemicals.

Our agriculture has grown increasingly dependent on fossil energy resources and now requires approximately 10,000 Btu of fossil energy to produce 3,000 Btu of food energy. There is no question that our farmers are entirely dependent on fertilizer to increase production to the point where we can feed our own people and still export 40 per cent of our production. Fertilizer is the cornerstone of the green revolution yet the energy crisis has had a profound effect on fertilizer production. There is now a world-wide shortage of fertilizer; prices have sky-rocketed.

Interestingly enough, Mr. Chairman, it takes 20,000 Btu of energy to produce a pound of steel but 60,000 Btu for a pound of fertilizer. In other words, it takes three times as much energy to produce fertilizer as it does to produce steel, so it’s clear that reduced energy supplies will eventually show up in fertilizer shortages and higher prices. That’s exactly what’s happened.

In many cases fertilizer prices have doubled. In other cases the prices have more than doubled. Rock phosphate prices, for instance, were running at $3.50 a ton f.o.b. Florida three years ago. Today the price is $22 to $25 a ton. A 25 per cent increase in energy means a great increase in cost to the farmer.

Farmers see all these things happening and it makes for a great deal of uncertainty and insecurity. This feeling, I would say, is widespread among farmers. I think it is the government’s responsibility, both federally and provincially, to bring some stability into the situation.

I know Mr. Whelan had that thought in mind when he announced his income stabilization programme for hogs. He has indicated that he agrees with the concept generally and is going to apply it to other products and I presume he will if he can get the co-operation of the provinces.

That really completes one segment of my remarks, Mr. Chairman. I’ll move the adjournment of the debate.

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

Motion agreed to.

The House resumed; Mr. Speaker in the chair.

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

Report agreed to.

Mr. Speaker: I beg to inform the House that in the name of Her Majesty the Queen, the Honourable the Lieutenant Governor has been pleased to assent to certain bills in her chambers.

ROYAL ASSENT

Clerk of the House: The following are the titles of the bills to which Her Honour has assented:

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

Bill Pr5, An Act respecting the City of Ottawa.

Bill Pr20, An Act respecting the City of Toronto.

Hon. E. A. Winkler (Chairman, Management Board of Cabinet): Mr. Speaker, before I move the adjournment of the House I would like to say that tomorrow we will return to consideration of the estimates of the Minister of Agriculture and Food. On Thursday we will proceed to bills on the order paper and I’ll just quote the bill numbers so that they are on the record: 65, 60, 56, 57, 50, 51, 52, 69, 58, 59, 39, 35, 37, 63. If the House is sufficiently co-operative we can proceed beyond that point.

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

Motion agreed to.

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