The House met at 2 p.m.
Mr. Speaker: Statements by the ministry.
HIRING OF CANADIAN PERSONNEL BY UNIVERSITIES
Hon. Mr. Parrott: Mr. Speaker, I would like to inform the Legislature about developments in the matter of the citizenship of faculty at Ontario universities.
Because of the concern expressed by hon. members of all parties, my ministry has been monitoring the citizenship of new and existing faculty members through the data provided by the universities to Statistics Canada. Following receipt of the latest data from Statistics Canada for 1974-1975, I discussed the number of foreign professors being hired with representatives of the presidents of the universities and expressed my concern that little or no progress had been made.
I am pleased to report to the House that the university presidents have responded constructively to the concern about the low percentage of newly appointed professors who are Canadian citizens by establishing the following new procedures to govern appointments:
1. Each faculty opening will be properly advertised.
2. The procedures employed in the review of candidates will result in fair consideration of all Canadian applicants.
3. The qualifications for the particular post will be clearly identified.
4. Each president will be personally responsible for the implementation of this agreement.
Strict adherence to these procedures will ensure opportunities for qualified Canadians to compete for appointments. I have emphasized to the presidents that these procedures must significantly improve the performance of the university system in hiring Canadians.
The universities noted that the citizenship data provided to Statistics Canada on professors already on staff was not being revised each year and was, therefore, not accurate because a large number of foreign professors had become Canadian citizens. All the universities have updated their citizenship file by canvassing each faculty member to ascertain current citizenship and to establish an accurate base year. In future years this updating will be done automatically.
Before the update, the figure for the system in 1974-1975 appeared to be 66.5 per cent. I can now report that in 1975-1976 71.7 per cent of the faculty members at Ontario universities were Canadian citizens. These figures by institution are: Brock 67.1; Carleton 74.4; Guelph 73.3; Lakehead 75.2; Laurentian 82.1; McMaster 63.2; Ottawa 78.8; Queen’s 77.9; Toronto 72.8; Trent 70.6; Waterloo 68.3; Western 72.7; Wilfrid Laurier 80; Windsor 63; York 62.1.
The five per cent improvement is due almost entirely to foreign professors taking out Canadian citizenship. It is encouraging to note that so many professors who came to Canada in the 1960s have chosen to make a permanent commitment to this country by obtaining citizenship. We should not lose sight of the fact that many students would have gone without post-secondary education if these professors had not been recruited.
It is also true that our universities have also made a permanent commitment to foreign professors by granting them tenure. I believe that this might lead such individuals to obtain Canadian citizenship as a reciprocal expression of confidence.
If present trends continue, and there are good reasons to believe they will, two per cent or three per cent of the existing faculty each year will obtain Canadian citizenship.
For 1975-1976, the percentage of new professors appointed who were Canadian citizens was 63.5 per cent, which is about the same as it has been for the previous two years. The figures by institutions are: Brock 50; Carleton 48.6; Guelph 54.8; Lakehead 73.2; Laurentian 80.4; McMaster 54.2; Ottawa 70; Queen’s 73.7; Toronto 64.9; Trent 50; Waterloo 45.6; Western 68; Wilfrid Laurier 63.6; Windsor 60; York 70.
The hon. members will note there is a very wide range among the universities. Some institutions have made a commendable effort to recruit Canadians and I am sure that in future years this policy will bear fruit as these promising young Canadian academics reach intellectual maturity. However, the performance of other universities demonstrates a failure to respond positively to a longstanding concern.
The percentage of Canadians hired by all the universities is eight per cent lower than the percentage of Canadians already on staff. Only one institution hired a larger percentage of Canadians than it already had. This means that 14 universities might have experienced a decline in the percentage of Canadians on faculty if some foreign professors had not obtained citizenship.
The percentage of Canadians joining the professoriate in Ontario needs to be substantially increased. In my meetings and correspondence with the university community this has been my message.
At the moment the universities are in the midst of making appointments for the 1976-1977 academic year. The universities have agreed to provide data on the citizenship of the new appointments by the end of this September. Our position on this matter will be greatly influenced by this data.
Mr. Speaker, the federal government is also concerned about the number of foreign professors entering Canada. Currently, foreigners with a job offer from a Canadian educational institution are exempted from the usual immigration procedures and can enter Canada freely. The federal Minister of Manpower and Immigration, Robert Andras, has invited provincial ministers with responsibility for higher education to participate in a review of this exemption. We welcome this opportunity to participate in this review because it is obviously advantageous to have a co-ordinated national policy.
I am sure hon. members would agree we must not fall into the trap of becoming chauvinistic and isolationist. This can be avoided by ensuring our policies accommodate arrangements for visiting professors and exchange professors. This should become the pattern for keeping up to date with international scholarship, rather than the massive importation on a long-term or permanent basis of foreign professors.
Some sceptics have claimed it is too late to Canadianize our universities. The fact is, however, that Ontario universities hire between 800 and 1,000 faculty members each year. These represent about eight to ten per cent of our total faculty complement. If a substantial percentage of new appointments -- well in excess of the existing 72 per cent Canadian -- were to be Canadian in future years, then progress would be made.
In order to accomplish this, the universities must ensure that they plan and manage their graduate schools to produce enough highly qualified people to staff the professoriate. In 1974-1975, Ontario universities awarded about 1,000 doctorates. A compounding factor is that only 54 per cent of these were to Canadian citizens. The reasons for this are complex and varied, however, the result is that in some disciplines not enough Canadians are available. I am urging the universities to review carefully the trends to ensure that Canadians are not being denied opportunities for graduate training.
We have a commitment from the university presidents to improve their procedures. We have seen the improvement achieved by the naturalization of foreign professors. We have an accurate base year for citizenship data and a mechanism for rapid updating each year; and, we have insisted for the last five years that when university boards of governors are reconstituted they be composed entirely of Canadian citizens. These facts, combined with this statement of government policy, provide the basis for optimism that the universities will improve their performance in hiring Canadians.
I am sending copies of this statement to the chairman of the board and the president of every university to ensure that the government’s expectations are clearly understood. I am sure that these expectations are shared by the public. As responsive and autonomous institutions, universities must respond to a greater degree than in the past.
As I mentioned earlier, we will have the data on the 1976-1977 appointments by the end of this September. If at that time a tangible improvement is not evident, then we will be forced to consider a variety of sanctions to strengthen the universities’ resolve in dealing with the problem. The experience of the next five months will determine if more direct action is to be taken.
ONTARIO LIBERAL PARTY PRESIDENT
Hon. Mr. Davis: Mr. Speaker, before the oral question period I know the members on this side of the House would like me to express our congratulations to the member for Rainy River (Mr. Reid) on his new role as president of the Ontario Liberal Party, which I understand is separate and distinct from the Liberal Party of Ontario, which is now defunct.
Hon. Mr. Davis: I know that he will give a great deal of commitment to his new responsibilities. He might begin by advising his leader that the policies of the Rt. Hon. John George Diefenbaker were popular for quite some time in the Province of Ontario, a fact that may not be known to him.
Hon. Mr. Rhodes: Are you federal or provincial, Pat?
Hon. Mr. Davis: On a personal note, Mr. Speaker, I’d like to advise the member for Hamilton West (Mr. S. Smith) --
Hon. Mr. Davis: -- that I didn’t receive an invitation to Keith Davey’s birthday party, a fact which distresses me as much as it does him, I’m sure.
Mr. R. S. Smith: The government wouldn’t let you go anyway.
Mr. Speaker: Oral questions; the hon. Leader of the Opposition.
Mr. Lewis: Mr. Speaker, we in the New Democratic Party are happy for the member for Rainy River (Mr. Reid) that the Liberal-Labour Party has finally come into its own.
It’s a long evolution but a happy one.
HIRING OF CANADIAN PERSONNEL BY UNIVERSITIES
Mr. Lewis: A question, if I may, of the Minister of Colleges and Universities based on his pleasing statements. It’s in two parts: First, can we have a guarantee in the Legislature that the statistics, university by university, will be tabled formally year by year from here on? Can the minister also explain to us how the severe cuts in post-graduate training which characterize the restraint programme this year can do anything other than prejudice the emergence of a greater number of Canadian professors?
Hon. Mr. Parrott: The answer to the first question is yes. That was one of the points I made with them. I thought in fairness to the system, really, that it should be a very accurate and yearly updated statement and I’m prepared to commit myself and this government to this presentation of the facts to the Legislature.
On the other part of the question, I think the member’s information is incorrect. We have indeed frozen the number of positions in graduate training this year but we have not reduced the numbers. The BIU value for each graduate position will increase; the number of BIUs to be generated by graduate training has not been, nor will it be, reduced this year.
Mr. Martel: A supplementary: In view of the fact that the select committee recognized there had to be an increase in funding for graduate studies and Canadian studies in order to prevent what occurred in the 1960s from recurring, is it this government’s intention to add additional funds to graduate studies to guarantee that doesn’t occur?
Hon. Mr. Parrott: As the member well knows, we were increasing funds to graduate schools in the last years since the select committee reported. This year, it’s an increase in funding; it’s not an increase in numbers. I think, given that fact and the need for review, which is a part of the recommendations at the same time, that is --
May I make that a little clearer? There is both a freeze and a review mechanism and one without the other would not be nearly as valuable. Given both a freeze and a review, with increased funding for students, I think we have allayed the member’s concerns.
Mr. Sweeney: Mr. Speaker, a supplementary of the minister: I noticed the figure he gave us was something like 71 per cent for all professors but the information I have is that as of Oct. 1, 1975, the percentage for social sciences faculties is only 64 per cent. It strikes me that that is much more significant, in a particular faculty of that nature. Is he taking this into consideration? Is he giving special attention to certain faculties over other faculties because they have a greater impact upon what the universities are supposed to be doing?
Hon. Mr. Parrott: I think it would be incorrect, at this moment, to attach too much importance to one aspect in itself.
Mr. Reid: That is the whole point.
Hon. Mr. Parrott: I think we must definitely have a very accurate base year and that’s what we’ve established. I was not convinced in the past that the statistics from Statistics Canada were accurate enough, not for reasons of attempting to obscure information, but many details which Statistics Canada want -- for example, the rounding of numbers which isn’t appropriate in such detailed information -- led to some misconceptions. I thought the important thing to do was to establish a base year. Given that, and given a very clear statement that we will look at the total picture, I think then we will respond, as I indicated in my statement, about the various questions as they pertain to the total picture rather than one at a time.
Mr. Speaker: The Leader of the Opposition.
Mrs. Campbell: A supplementary, Mr. Speaker.
Mr. Breithaupt: A supplementary.
Mr. Speaker: The member for St. George with a final supplementary on this.
Hon. Mr. Davis: Ladies first.
Mrs. Campbell: Can the minister advise me as to whether or not there has been discussion with the presidents as to the prerogative of heads of departments to choose as between the finalists, as it were, in the competition for the jobs? Is he aware of the fact that in the matter of the department of sociology and the department of music at the University of Toronto, where there have been Canadian applicants, the prerogatives have been exercised by heads of departments so that the advertising might not be very effective?
Hon. Mr. Parrott: I will be pleased to supply the hon. member with a copy of this statement, and I think on page 2 it very clearly identifies the position and the commitment from the presidents of the universities. We recognize that perhaps there wasn’t a fair enough system of advertising positions. We have discussed this problem with the presidents of the universities and they have given me the commitment that they will take it as their personal responsibility to see that a full opportunity will be given to all Canadians who apply.
Mr. Lewis: A question of the Premier if I may, Mr. Speaker: Is it not time that he intervened personally with the senior civil servants in the Ministry of Health to see if they could somehow overcome their inclination to error in the activities they pursue, particularly since there is now the very embarrassing question of the way in which the ministry endeavoured to close the hospital at Durham, running directly contrary to the specifics of the statutes passed by this Legislature?
Hon. Mr. Davis: Mr. Speaker, I don’t want to get into a discussion of a matter that I gather is still before the courts in terms of the Durham Hospital, where I think really there are two things being assessed. One was whether or not the letter suggesting that there be no further patients taken in on such and such a date had any foundation in law; I gather the judge has questioned that. I think the hon. Leader of the Opposition should know that the question of the closing, which was supported by an order in council, as I understand it, pursuant to the Act, is quite a different issue. While I am always prepared to discuss any matters with the senior civil service of the government, I am also quite comfortable in the knowledge that the acting Minister of Health (B. Stephenson) has great capacity to deal with the problems in that ministry.
Mr. Lewis: By way of supplementary: The Premier, however, will also have noted, I am sure, that whatever the undoubted capacities of the acting Minister of Health the judge was obviously offended -- in fact, he used the words “mending fences in haste” -- at the way in which the order in council was thrust to the courts on the day on which Durham made application, and the feeling that somehow due process was not being observed. Is it not possible to get the Ministry of Health, in the sensitive areas of hospital closings and cutbacks, to behave in a civilized and rational fashion rather than an arbitrary one?
Hon. Mr. Davis: Mr. Speaker, I think what was done by the ministry in terms of the closings was both rational and, to the extent it is possible in these difficult situations, humane and reasonable.
I am not going to debate the views of one of the judges of the High Court in this province, but the fact is that Durham Hospital knew and there was no hiding of the order in council. I announced it myself here in this Legislature. So, while I am not going to comment on what the judge said, I don’t think anybody was taken by surprise or did not know of the facts as they existed.
With respect, Mr. Speaker, as I say --
Mr. Singer: It is not a question of whether you are taken by surprise. The question is whether you did what it says.
Hon. Mr. Davis: -- not only have I confidence in the capacity of the acting Minister of Health, I have confidence in her capacity to deal with any problems within her ministry.
Mr. Singer: A supplementary: Surely the Premier will admit that it isn’t a question of taking people by surprise, but that of all people who should observe statutory provisions the government is the most obvious one that should? After all, it is the government’s statute. Is the Premier saying that as long as the government’s heart is pure, it doesn’t matter what the statutes say?
Hon. Mr. Davis: No, Mr. Speaker. As I understand it, the government has followed the provisions of the statute.
Mr. Singer: Yes, later.
Hon. Mr. Davis: No, no.
Mr. Lewis: A question, if I may, of the Attorney General: Now that the College of Physicians and Surgeons has suspended the licence of one doctor dealing with Abko Labs for six months, reprimanded another four and tied directly together the receiving of favours from Abko Medical Laboratory apparently in return for services rendered, is it not time to reintroduce the principle of equal justice equally applied in Ontario and point to that part of the Criminal Code which has also been violated?
Hon. Mr. McMurtry: I don’t really understand the Leader of the Opposition’s question. If the Leader of the Opposition is suggesting there is a criminal offence that has been committed and that we are not prosecuting, I would like to have further particulars in that regard. As I indicated last week in this Legislature, my position is that if responsible information comes to my agents or my ministry in reaction to the commission of a criminal offence, we certainly wish to prosecute. There may well be unethical behaviour, or behaviour that is contrary to a certain professional standard of conduct -- and there seems to be little doubt that there is some evidence of that -- but that standing by itself does not necessarily amount to a criminal offence; although it may amount to such, and if we have that information, we will prosecute. I hope and expect that the College of Physicians will supply us with any information that would indicate a criminal offence has been committed.
Mr. Lewis: Well, I admit to being perplexed. Since the college has indicated publicly in its judgement the conferring of favours in the case of one doctor and in the others says specifically: “The discipline committee was convinced that the payments were indeed some form of remuneration for revenues generated to the laboratory by referral of patients;” since section 383 of the Criminal Code says, “Everyone commits an offence who being an agent, demands, accepts or offers or agrees to accept from any person, a reward, advantage or benefit of any kind as a consideration” for doing certain things; since there is, at least on the face of it, even to a layman clear evidence of the need for the application of justice, can he as Attorney General pursue it?
Hon. Mr. McMurtry: Yes, we will pursue the matter, Mr. Speaker.
Mr. Lewis: Mr. Speaker, a question of the Premier again: Since there remains in the estimates this year $1.5 million for Minaki Lodge, and I believe another $400,000 for operating expenses, what will happen to that money; and how does he possibly explain the public investment so far and the fiasco of Minaki today?
Hon. Mr. Davis: Mr. Speaker, I think that question should properly be directed to the Minister of Industry and Tourism.
Mr. Lewis: Well, alas, he not being here, I turn to his mentor. Does the Premier want me to wait to ask that question?
Hon. Mr. Davis: I will get the answer if the minister is not here tomorrow.
Mr. Lewis: One last question, of the Minister of Consumer and Commercial Relations: I wonder if the following has been brought to his attention from the pages of the New Yorker: “Automatic paper shredder, ideal for home or office, lightweight, compact, it renders illegal, confidential correspondence records so that they won’t be read by the wrong people. Totally electric and automatic, it shreds cards, negatives, cellophanes and bond paper and sells for only $89.95.”
Has the minister investigated its value?
Hon. Mr. Handleman: Mr. Speaker, that particular ad has not been brought to my attention because --
Mr. Speaker: Order, please.
Hon. Mr. Handleman: -- the 1969 model which I have in my office is perfectly suitable for the purpose, and I don’t happen to need a new one. It sounds like a good buy, though.
Mr. MacDonald: How much did you pay for yours?
Mr. Martel: Maybe you could buy a dozen.
Mr. Shore: Tell him it is not in the budget.
Mr. Speaker: The member for Hamilton West with his questions.
Mr. S. Smith: It is going to be hard to top that as a matter of urgent public importance, Mr. Speaker, but we will try.
Mr. Speaker: Order.
Mr. S. Smith: I was going to ask the Treasurer (Mr. McKeough) whether his predictions with regard to our party are any better than those with regard to his budget, but alas, he has taken the opportunity not to be here; so I shall have to turn instead --
Mr. MacDonald: Is that a matter of public importance?
Mr. S. Smith: -- to the Minister of Labour, who is also the acting Minister of Health.
BLOOD LEAD LEVELS
Mr. S. Smith: Is the Minister of Labour aware of recent information which indicates that workers who work in areas where lead is being smelted can in fact be carrying the lead dust home in their clothes, and that the lead can then find it way into the bloodstream of members of the family, including young children? And if she is aware of this information, is there any programme in force at the moment to test the blood of the children of those workers who are in atmospheres where lead happens to be in the atmosphere, such as Canada Metal Co. Ltd. and so on?
Hon. B. Stephenson: There have been at least two programmes in which children of such families have been tested on an ongoing basis, and this is continuing. This information, as the hon. leader of the third party has stated, has recently been released. I think that it points up yet another area of concern for the clothes-changing and bathing procedures of workers in those specific plants after they finish their shift, which is the area I’m looking at specifically right at the moment. Certainly with this kind of information we shall have to look most carefully at the children of those workers who work in lead smelter plants in terms of the possibility of some infusion of lead into their bloodstreams.
Mr. S. Smith: Just by way of supplementary, and I appreciate the answer, do I take it then that there is a programme whereby all the children are going to be tested, if their parents are working in lead smelters, and that the results of these tests will he tabled in the Legislature?
Hon. B. Stephenson: I didn’t say that. What I said was that we will attempt to develop a programme in order to have this done. Most certainly the results will be given to the families of those children, which is where they should be, and if they agree, then certainly we can table them in the Legislature. But this depends upon the confidentiality desired by the families and the children.
Mr. S. Smith: Supplementary: I don’t want to make this into a give and take, but basically, when are we going to know if this has been done? It is a hazard and we are worried about it. When are we going to know that this has been carried out? Can the minister give us some undertaking in this regard?
Hon. B. Stephenson: As soon as it’s humanly possible to do so.
Mr. S. Smith: A question of the Attorney General: Has the audit of Browndale been completed and presented to him? Is he prepared to present it to us at this time?
Hon. Mr. McMurtry: I don’t know whether the audit has been completed. I do know that it has not been presented to me.
Mr. S. Smith: Supplementary: Continuing on that topic, could the Attorney General give an opinion in terms of whether he thinks it is appropriate that a non-profit institution, Browndale, Ontario, should have been considering in February, 1974, the purchase of shares in one of the Brown private companies, namely Browndale International Ltd.? Does he feel that this is proper and can he tell us whether those shares were purchased?
Hon. Mr. McMurtry: It’s not my role to volunteer legal opinions on a few bare facts presented to me by any member of this Legislature, with the greatest respect to all of the members. I indicated to the leader of the Liberal Party that an investigation was under way, and that information relating to the audit would be made available to members by staff as soon as this information is available. As a matter of fact, I believe that members of my staff met with the leader of the Liberal Party at the end of last week to ascertain what information might be of assistance in such an investigation. I don’t think I have anything more to say at this time.
Mr. S. Smith: Just one more supplementary: I did meet with the Attorney General’s staff, and can he explain to this House how it’s possible that he could have had in his possession for some considerable time an affidavit from one Mr. Sorbie, pointing out, in paragraph 15, that there was one particular person, a Dr. Wong, who had important information to give and would give it under oath; and that by the time the minister’s people spoke to me on Friday none of them had gone to speak to that particular Dr. Wong, even though he was the only person singled out as a person having important information to give? Could the Attorney General explain what kind of an investigation that is, that nobody in fact spoke to the man?
Hon. Mr. McMurtry: They indicated, to the House, the affidavits have been in the possession of the Ontario Provincial Police for some weeks; I’m confident that they are quite capable of making a proper investigation. I have no intention of directing the investigation on a day-to-day basis, if at all.
Mr. S. Smith: What about a week-to-week or a year-to-year basis?
Mr. Speaker: Further questions?
Mr. S. Smith: I have a question of the Minister of Consumer and Commercial Relations. The Minister of Consumer and Commercial Relations may remember that on April 1, I asked whether he could give us information as to how many itinerant sellers in the Province of Ontario have in some way had a penalty applied to them because of not complying with the Act respecting itinerant salesmen in this province. I haven’t received that information yet. Could the minister give us that information, please?
Hon. Mr. Handleman: Mr. Speaker, as I recall, the member for Hamilton West asked me how many unregistered itinerant salesmen were in the province -- and I replied to him that I didn’t think I could tell him how many there were unregistered. We have done some investigation. The number of registered salesmen in the province has jumped from 1,286 in 1973 to 1,625 in 1975. We have processed approximately 5,000 complaints and the number of prosecutions is quite low, mostly because we have been able to solve most of the problems by conciliation.
At the present time, we are trying to get more information as to the number of sellers who should be registered and are not. We are asking local authorities to co-operate with us in that respect. We are also considering measures to improve the present legislation.
The number of prosecutions in 1975, as I recall, was down to five from 48 in 1973; we have managed to reduce the number of prosecutions by better policing of the Act.
Mr. S. Smith: I thank the minister for that information; I appreciate him digging it out.
Does the minister not agree, though, that as it stands at the moment, the Act basically penalizes those who take the trouble to get themselves licensed and bonded and who comply with its provisions? Does the minister not agree it offers them nothing by way of identification which they could then use at the door in order to identify themselves. It basically leaves those thousands of people who go door-to-door without complying with the Act totally unpenalized, and in fact rewarded for avoiding the Act with no danger of real prosecution?
Hon. Mr. Handleman: Mr. Speaker, I suppose you could say those who are law-abiding are penalized in comparison to those who violate the law. We are looking at possible measures to make any contract signed with an unregistered itinerant salesman invalid, which I think would provide sufficient penalty under those circumstances.
Mr. S. Smith: Just a final supplementary: Would the minister not agree that if he brings that in, it would also be a good idea to give them some identification to show they have been registered so as to protect the householder?
Hon. Mr. Handleman: Mr. Speaker, many municipalities, of course, do provide itinerant salesmen with a licence, which can be used by identification; but certainly it is a suggestion worth considering.
FEDERAL REPORT ON WOMEN’S WAGES
Mr. S. Smith: One final, small question of the Minister of Labour: With regard to the minister’s statement that she was looking into the matter in Kitchener where a federal survey showed that women were being paid at a rate 17 per cent lower than men; can she tell us, first of all, whether she has any provincial survey information at all; whether there is any provincial survey now being conducted? And if so, could she give us the information? And if there are no provincial surveys of a similar kind being conducted, why is she leaving this whole matter to the federal government?
Hon. B. Stephenson: Mr. Speaker, the matter is not being left to the federal government. As I told the hon. member last week, the employment standards branch of the Ministry of Labour is at this point checking the statements which have been released by the federal government. There have been certain studies done by the Women’s Bureau of the Ministry of Labour, but they have not specifically been in relation to Kitchener. This is one which was released by the federal government. That information is being checked and is being pursued by the employment standards branch.
Mr. S. Smith: A supplementary, I may not have made myself clear: What I am saying is, that was okay for Kitchener, but are there any provincial studies for other places and could the minister please table the results?
Hon. B. Stephenson: Mr. Speaker, I have said there have been other studies done by the Women’s Bureau; and I will find the results and table them, yes.
Mr. Speaker: The member for Windsor-Sandwich.
PRESIDENCY OF ST. CLAIR COLLEGE
Mr. Bounsall: I have a question of the Minister of Colleges and Universities. Is the minister aware that the administrative staff, the teaching staff, the support staff and the students of St. Clair College all walked out today at 1 p.m., for the afternoon only, as an indication of their solid support for the president, Richard Quittenton, who was precipitously and unjustly asked to resign by the board?
Mr. Lewis: That’s a political witch-hunt.
Hon. Mr. Davis: You can’t accuse him of playing politics. They must be all NDP on the board.
Mr. Bain: All old-line Tories.
Mr. Bounsall: That’s right; that’s the problem. Would the minister be willing to intervene at some future time, if necessary, to see that this president -- who has done so much, not just for St. Clair College but for the entire college system in Ontario -- is retained in his position and is given fair and honourable treatment, as is his just due?
Hon. Mr. Parrott: Very briefly, Mr. Speaker, the answer to the first portion of the question is yes, but I do have a brief statement which I would like to give to the House in reply to the question.
Mr. Speaker: If it’s a brief statement it can be part of an answer.
Hon. Mr. Parrott: It’s a page and a half. Is that brief, sir?
Mr. Speaker: Maybe it is; we’ll see how long it is.
Hon. Mr. Davis: A page for the answer and a half for the statement.
Hon. Mr. Parrott: Over the past three or four days I have been in constant contact with many persons in Windsor and at St. Clair. I am sure that the hon. member for Windsor-Sandwich agrees with me on the value of St. Clair College and the close relationship between it and its community.
The relationship of St. Clair was achieved, no doubt, in large part due to the office of the board of governors and to the chief employee, President Quittenton. The board and president have worked very effectively together in launching and developing the college. Recently, I heard that the board and President Quittenton had discussed future alternatives. I understand there were some who felt that now, after 10 years, it was time for a fresh hand at the helm. I further understand that Dr. Quittenton was, himself, interested in tackling a new challenge. I know the board of governors does regret that in the course of these discussions --
Mr. Breithaupt: That didn’t work out.
Hon. Mr. Parrott: -- the whole situation was misrepresented locally, with reference to financial problems at the college as the reason for requesting Dr. Quittenton’s resignation. That was quoted in the Windsor Star on April 21, I believe. I’m assured by the board of governors that this allegation was totally false. I can also assert that this ministry, at least from our point of view, has no concern in regard to the financial management of St. Clair College. I personally regret this hurt to a person who has made such a significant contribution to this college and to his community.
As I said, I’ve been in touch constantly over the weekend. I was aware of the development up until 10:30 this morning, where I thought a statement was going to be made to resolve the situation, and I have just recently been informed, before coming into the House, of the actions of the students and the staff association. I’m very hopeful that the board and the president will continue to discuss their problem and come to a mutually acceptable position. I certainly will keep in close contact until that is achieved.
Mr. Speaker: That will be considered as a normal answer. A supplementary from the member for Windsor-Walkerville.
Mr. B. Newman: Will the minister ask the board to lift the deadline of tonight as the time by which Dr. Quittenton must resign or be fired, so that the two parties can attempt to resolve the issue amicably?
Hon. Mr. Parrott: I didn’t quite hear the first portion of the question.
Mr. B. Newman: Will the minister ask the board to lift the deadline, the time by which the president of St. Clair College must submit his resignation or be fired, so that there is additional time to resolve the issue?
Hon. Mr. Parrott: I fully admit not having complete knowledge of the facts, because they have been changing almost momentarily, but to the best of my knowledge at this time there is not a deadline, at least one that is not acceptable to both. Therefore, I would not like to say I would intervene, because I feel it isn’t necessary on that portion of it.
Mr. Bounsall: That’s been done already.
Mr. Warner: Supplementary.
Mr. Speaker: This will be a final supplementary on this then, the member for Scarborough-Ellesmere.
Mr. Warner: Would the minister not agree that this situation could have been avoided had the board of governors been totally representative of every constituency, and that in the future it might serve well if the government could instruct that boards of governors will be comprised of students, faculty, support staff and other members of the community so as to avoid the kind of situation which has occurred at St. Clair?
Hon. Mr. Parrott: Quite honestly, I think that is not the way it is. I feel there were factors that precipitated this situation that were not related to the board representing certain constituencies.
RUTHVEN PUBLIC SCHOOL EXPANSION
Mr. Mancini: I have a question of the Minister of Education. In view of the fact that the Ministry of Education has been requested since 1969, and has been petitioned in 1975, to consider the request for a building expansion to the Ruthven Public School, I would like to ask the minister if he is going to make money available in this year’s budget for the expansion?
Hon. Mr. Wells: The request from Ruthven Public School will be considered with all other requests when we look at the 1976 capital allocations in the fall.
Mr. Mancini: Supplementary: I would like to ask the minister if he has received a letter from the board of education in Essex county and if he has answered it. I would also like to give the minister these 500 letters.
Mr. Martel: Put them on the order paper.
Mr. Lewis: What have you got against Ruthven? It is a perfectly lovely school. Let them expand; open up your heart
Mr. Speaker: Is there an answer? The hon. minister.
Mr. Speaker: Order, please.
Hon. Mr. Wells: It is not so easy, as my friend knows, down there. Perhaps if he would lend a little support to some of the other building plans of the Essex county board he might serve the interests of that area.
Mr. Kerrio: I don’t think that is the question.
Mr. Sweeney: That is subtle blackmail.
Mr. Yakabuski: What are your priorities?
Hon. Mr. Wells: I get a lot of letters from the Essex county board, as he is well aware; in fact, I get a lot of letters from all the boards in the Windsor area.
Hon. Mr. Wells: The situation with Ruthven is the same as I just stated; it will be considered with other requests.
Mr. Shore: What about the letters?
Hon. Mr. Wells: Members might be interested in knowing, I believe, that the changes there entail the closing of some schools also, do they not? That is something which I am sure the board would want to take a look at.
Mr. Lewis: The government found $3 million for Minaki Lodge but nothing for Ruthven.
COST OF SABBATICALS
Mr. Yakabuski: I have a question of the Minister of Colleges and Universities. Since I did not have a reply a couple of weeks ago --
Mr. Speaker: Order, please.
Mr. Yakabuski: -- from either the Minister of Colleges and Universities or the Minister of Education, I will approach them one at a time.
Mr. Yakabuski: Today I want to ask the Minister of Colleges and Universities have he or his staff done any research on what the taxpayers of Ontario would be saved if sabbaticals in the colleges and universities areas were discontinued and that ripoff was ended?
Hon. Mr. Parrott: I must say I have done a great deal of research in that problem. One of the things I am researching most carefully at the moment is to see whether there will be a net saving to the taxpayers, because I’ve got to recognize that if we should ban sabbaticals it may mean that the opposition would be dissipated by 50 per cent. Whether that would be a net savings or not, I am not sure, but I am looking into it.
Mr. Reid: You rehearsed that one.
Mr. Speaker: Order, please.
Mr. Breithaupt: If the member for Renfrew South had a sabbatical he wouldn’t know where to hang it or how to play it.
Mr. Warner: Supplementary: If the minister is contemplating a written response to the member for Renfrew South, would he include in that the statement that sabbaticals do save money for the taxpayers at the university levels since only 75 per cent of the salary is paid and no replacement is hired? In fact, the university spends 75 per cent of its money, not 100 per cent, and the remaining faculty members --
Mr. Speaker: Order, please.
Mr. Mancini: What is the question?
Mr. Speaker: Order, please.
Mr. S. Smith: What kind of a question is that?
Mr. Breithaupt: Why don’t we dismiss everyone then?
Mr. S. Smith: Let’s hear from Laurel and Hardy then.
Mr. Speaker: I think we can have fewer interjections in this. Order, please. Has the hon. minister an answer to that?
Hon. Mr. Parrott: I can assure the hon. member that I will give him, the member for Renfrew South, all of the information he requires. I can also assure the House that I won’t accept all of the comments made by the member for Scarborough-Ellesmere.
Mr. Yakabuski: Supplementary.
Mr. Speaker: All right, the member for Renfrew South with a supplementary.
Mr. Yakabuski: Could the minister inform the House if there has ever been a sitting member of the House on sabbatical?
Mr. R. S. Smith: Just the member for St. Catharines (Mr. Johnston).
Mr. Conway: Is that the “progressive” part of the Conservatives?
Mr. Speaker: Order, please. Those interjections add nothing to the debate. Does the hon. minister have a quick answer?
Hon. Mr. Parrott: I’ll take the question as notice.
Mr. Singer: Mr. Speaker.
Mr. Speaker: Is this a supplementary?
Mr. Singer: No, a new question.
Mr. Speaker: All right; we’ll get to you in a moment then. The member for Timiskaming with a question.
LOANS TO MILK PRODUCERS
Mr. Bain: Thank you, Mr. Speaker. I have a question of the Minister of Agriculture and Food. On Friday, April 9, he answered a question concerning the industrial milk production incentive programme by saying that each farmer should go to his ag rep to discuss a renegotiation of his IMPIP loan. Specifically, what terms are being changed to favour the farmers? Can the agriculture representatives do any more than reduce by 15 per cent the amount of milk required to qualify for the 20 per cent refund of principal?
Hon. W. Newman: Mr. Speaker, I think I answered at that particular point in time that if he goes to his ag rep we have an internal committee within the ministry that deals with the IMPIP loans. I realize the problems that many of the farmers are being faced with because of the new programme that has come in from Ottawa, the problems they’re faced with as far as repaying their loans is concerned. We have a special internal committee by Mr. Norm Watson of my ministry.
Mr. Bain: Supplementary.
Mr. Speaker: Supplementary.
Mr. Bain: The minister can correct me: Is there any consideration this committee will give other than reducing by 15 per cent the amount of milk required to be produced to qualify for the refund? And would he also inform us whether this committee or he himself is considering or prepared to consider a refund of 25 per cent per year instead of 20 per cent; or will he consider extending for a year or two the loan period for which the farmer would qualify for the 20 per cent refund?
Hon. W. Newman: The 20 per cent refund is geared, of course, to the amount of milk he was not allowed to have this year. There was a 15 per cent overall reduction in the Province of Ontario set up by the Ontario Milk Marketing Board. I might point out that in the other provinces in Canada, it’s higher than that. I think Ontario is the lowest as far as the cut is concerned this year. As far as extending the IMPIP loans, a lot depends on the individual circumstances of the individual people who have been hurt.
I spent two hours last Friday talking to the Ontario Milk Commission. We discussed some of the problems of some of the farmers who just got into the industrial milk field late last year, the problems they’re faced with and will be faced with in a matter of weeks. We are looking at the whole problem at this point in time. We’ve also asked the Ontario Milk Commission to discuss it with the Milk Marketing Board, because we know there are a lot of problems.
Mr. Gaunt: Supplementary, Mr. Speaker.
Mr. Speaker: The member for Huron-Bruce with a supplementary.
Mr. Gaunt: Supplementary to the minister: In view of the urgent situation and the fact that many farmers, indeed most farmers, cannot purchase additional MSQ quota, is the ministry prepared to do anything to try to make available more MSQ quota so that farmers who are just establishing themselves in the business can buy more quota to tide them over this very difficult period?
Hon. W. Newman: Mr. Speaker, in answer to the member, the MSQ quota is set up by the Canadian Dairy Commission and by the federal people in Ottawa. It kind of annoys me a little bit, because we fought for and obtained what we were entitled to this year in the Province of Ontario as far as MSQ quota is concerned. But it does concern me when they hand out extra MSQ quota in other parts of Canada; I don’t feel there was nearly the need for it as there was in the Province of Ontario.
This is surely a year of consolidation, and to hand out any extra MSQ quota; and I know I’ve been criticized for fighting against that particular province getting extra quota. I felt it should be used in those provinces that already had a situation that needed to be corrected. All I can suggest to the hon. member is that we could borrow from quota or he could talk to his friends in Ottawa. We have talked at the federal-provincial conference about this; we knew some of these problems were coming.
An hon. member: We don’t have any friends there any more; we gave them up yesterday.
Hon. W. Newman: Certainly I am very much concerned about the industrial milk shippers in this province.
Mr. MacDonald: A supplementary: Since the whole purpose of the IMPIP programme was to increase milk production, and the current thrust of policy in the milk industry is to reduce it, has the minister considered eliminating the requirement of increasing production without any penalty on the 20 per cent forgiveness, in order that he reconcile the conflict between the old and the new policy?
Hon. W. Newman: Mr. Speaker, the whole total IMPIP programme is not in place at this point in time; it was wiped out before.
Mr. MacDonald: No, but for those who signed IMPIP loans.
Hon. W. Newman: It was brought in for a purpose, and a very good purpose, by my predecessor, and I think I should explain why it was brought in. It was brought in because there was a certain allocation set up by the government of Canada. We were not meeting our allocation, we were losing market share quotas to other provinces. The programme was brought in to step up Ontario’s share of what they were entitled to.
Mr. MacDonald: Can you answer my question?
Hon. W. Newman: Just a minute. So that effectively helped with that particular programme. Now we are in a situation where some of our friends down in Ottawa didn’t realize you can’t turn cows on and off.
Mr. MacDonald: We didn’t ask for his rehash. Answer the question.
Hon. W. Newman: What I am talking about is the IMPIP programme. We are prepared to reduce the percentage as corresponding to the percentage reduction in the total MSQ allocated to the producers.
Mr. MacDonald: He has not answered my question.
Mr. Speaker: Order, please. I can’t help it.
Hon. W. Newman: It would help if the member knew a bit about agriculture.
Mr. Singer: Mr. Speaker, I have a question for the acting Minister of Health. On April 22, she advised the hon. member for Nickel Belt (Mr. Laughren) that the interim new board for Laurentian Hospital was appointed partly on the nomination of the regional council of Sudbury. Can she explain how this worked, when at least one mayor who is a member of that council assures me that no such discussion ever took place and no such nominations ever took place on the regional council?
Hon. B. Stephenson: Mr. Speaker, I certainly can’t vouch for the fact that the mayor who was supposed to be a member of the council was present at the time, but, in fact, that is exactly what happened.
Mr. Singer: He said he was.
Hon. B. Stephenson: The request was made of the regional council and of the hospital planning council of that area that each supply us with the names of three nominees to that board, which is, I will remind the members of the House, an interim board to function only until the meeting of the general corporation.
Mr. Singer: By way of supplementary, can the minister tell us whether or not, of her knowledge and if she hasn’t got the knowledge, will she inquire -- the matter was ever brought to a meeting of that regional council?
Hon. B. Stephenson: Mr. Speaker, it is my understanding that it was. If it was not, I shall inquire to ascertain the facts.
Mr. Martel: Supplementary: Is it not true that all of the appointments were made on the recommendations of the regional chairman, Joe Fabbro?
Hon. B. Stephenson: As a matter of fact, Mr. Speaker, they were not. Three were made on the recommendation of the hospital planning council and three on the recommendation of the regional council.
Mr. Martel: Never.
Mr. Speaker: The Minister of Labour has an answer to a question asked previously.
Hon. B. Stephenson: Mr. Speaker, it’s as the acting Minister of Health that I have an answer to a question.
Mr. Speaker: Fine.
Hon. B. Stephenson: The leader of the Liberal Party asked me, I think three days ago, about a report of the Council of Health about funding for lab services which purported to recommend tendering for that service.
There have been three reports tabled by the Council of Health for the Province of Ontario and one other report, which is an internal document -- three of which are public -- and in none of them can I find any recommendation regarding tendering for laboratory services in the province.
Mr. S. Smith: Supplementary: Is the minister not aware that I never said anything about the Council of Health; I said within the Ministry of Health there have been civil servants who have produced between four and six reports which touched on the question of laboratory finances?
Hon. B. Stephenson: Mr. Speaker, I will state again that, having perused all of the reports I can find, tendering for laboratory services is not mentioned.
Mr. Speaker: Does the hon. minister wish to give the answer to the other question?
Hon. B. Stephenson: Thank you, Mr. Speaker. The Lender of the Opposition has made in this House, and outside, some interesting but very misleading statements regarding three hospitals whose names he has mentioned upon occasion, one occasion being yesterday in Hamilton. Mr. Speaker, the information regarding those --
Mr. Lewis: On a point of order. Is this a point of privilege the minister is rising on?
Hon. B. Stephenson: It is in response to the question asked by the Leader of the Opposition about whether we should not withdraw all of our claims regarding the other hospitals in the constraint programme on the basis of inaccuracies which he stated were the fault of the Ministry of Health. I should like to respond, if I may.
Mr. Lewis: The minister answered my question at the time.
Hon. B. Stephenson: I did answer it at the time. I will reiterate the answer now. In one instance --
Mr. Lewis: Thank you very much. That’s what I thought --
Mr. Yakabuski: You don’t want the truth, eh?
Mr. Speaker: Order, please.
Mr. Lewis: On a point of order. I am glad that the minister, after the fact, has assembled information which she wishes now to give to the House in an additional response to a question she has already answered. It can appropriately come before the orders of the day as a statement by the ministry. It can come in the budget debate. It can come in the Health estimates. But it cannot come now -- or it should not come now.
Hon. Mr. Davis: Are you telling the Speaker how to run the House?
Mr. Speaker: Order, please.
Mr. Breithaupt: Speaking to the member’s point of order, did I hear the minister say that the statements that were made by the Leader of the Opposition both here and outside were misleading the House? Is that correct?
Mr. Yakabuski: Of course -- always.
Hon. B. Stephenson: Yes, Mr. Speaker, that is the statement I made.
Hon. Mr. Davis: Not intentionally of course.
Mr. Speaker: Order, please. May I suggest to the hon. minister if it is just a general statement, then it probably should be given as a statement by the ministry before the orders of the day. If it is a question which was taken as notice, then this is the appropriate place for it. I will leave that in the minister’s hands to decide. I am just not sure which it is.
Mr. Lewis: She can make it tomorrow.
Mr. Lawlor: Mr. Speaker --
Mr. Speaker: Order, please. The oral question period has expired.
POINT OF PRIVILEGE
Mr. Lewis: On a point of privilege, Mr. Speaker. With respect to the Premier’s observation earlier in this question period, I have looked very carefully at his statement of April 12, when the hospital closings were dealt with, and nowhere do I see any reference to an order in council or the mechanism by which they were to be closed, as I think the Premier indicated. It again reaffirms that the approach taken by the Ministry of Health contravened its own statutes.
Hon. Mr. Davis: Mr. Speaker, I am not going to get into a legal argument. In anything I said earlier today, I did not say that in the statement I made here, on whatever date it was, that I had referred to an order in council. All I said was that an order in council had been passed. In my observations here this afternoon, I said very simply that it came as no surprise to anybody. I announced it here in the House. That’s all I am saying.
Mr. Lewis: I see. So you can use the wrong name, as long as you announce it.
Mr. Speaker: Order, please.
Hon. Mr. Welch presented the annual report of the Royal Ontario Museum for the year ended June 30, 1975.
Mr. Cunningham: That’s where the member for St. Catharines (Mr. Johnston) is.
Mr. Speaker: Order, please.
Hon. Mr. Welch moved that the order for third reading of Bill 25, an Act to amend the Highway Traffic Act, be discharged and the bill be referred back to the committee of the whole House for reconsideration of those sections of the bill which were deleted by the committee, namely section 3(4), section 4(2), and section 19.
Motion agreed to.
Mr. Speaker: Introduction of bills.
CONSUMER REPORTING AMENDMENT ACT
Mr. Reid moved first reading of bill intituled, An Act to amend the Consumer Reporting Act, 1973.
Motion agreed to; first reading of the bill.
Mr. Reid: Mr. Speaker, the purpose of the bill is to prevent the selling of personal information contained in consumer reports to persons outside the Province of Ontario. The bill would also prohibit the selling of lists of names and addresses of persons contained in consumer reporting files. As well, it requires that the form of security used to protect that confidential information be filed with the Minister of Consumer and Commercial Relations.
Mr. Speaker: Orders of the day.
Clerk of the House: The 11th order, House in committee of supply.
ESTIMATES, MINISTRY OF REVENUE (CONTINUED)
On vote 903:
Mr. Chairman: We are dealing with vote 903, guaranteed income and tax credit programmes.
Shall the vote carry?
Mr. Reid: Are we on the first vote? Not only that, the minister isn’t even in his chair.
Mr. Chairman: Vote 903, item 1. The hon. member for Windsor-Walkerville.
Mr. B. Newman: Mr. Chairman, the minister was going to reply to the questions I put to him concerning the first-time home buyer grant to those who purchased mobile homes with CSA approval but not necessarily CSA approval Z240. Many people, I understand, bought mobile units with the CSA approval, not realizing it had to be a specific CSA approval.
Hon. Mr. Meen: I was about to respond to the hon. member on Thursday night when the chairman hammered the gavel, announced it was 10:30 and it was time we rose and reported. I do want to outline the picture as we have seen it here.
Although hindsight’s great stuff, in short, the advertisement and the form of advertisement we used was intended, really, to acquaint potential purchasers of mobile homes with the fact that they had to meet certain standards. The advertisement said, “A mobile home which meets prescribed standards defined by the Canadian Standards Association.” It was not intended, of course, that that would mean that any CSA approval would do. It was intended to get people to contact our information centre -- which they did by the thousands -- to ask any questions and have those questions answered as best we could.
The weekend that intervened since last Thursday night gave me a chance to get some particulars on that and I would advise the committee that we received a total of 130,000 telephone calls about the grant in general and a very substantial number of those calls would relate, undoubtedly, to the mobile home situation. I guess it’s fair to say that the ad did get across.
When the ad was written, my people tell me that one of their concerns about inserting the Z240 was that people might forget that number and think of some other number; then, seeing a Z number of some designation they might have thought that that was the one. Rather than try to put in a number they indicated they thought it was better -- and that was the best advice we had at that time -- that it simply be drawn in more generic terms, inasmuch as we didn’t set out all the other criteria either. I suppose, from hindsight, it’s easy to argue that the Z240 might have been included. I am inclined to think it might have been.
The ad’s a pretty busy one as it stands -- busy in quotes; that’s an advertising term I have come across lately. It’s about as busy as one would want to have an advertisement. I suppose the addition of a little something more wouldn’t have been all that much more, but that’s where the decision was made. I am not convinced, frankly, that either of these actions -- the addition of this material or the addition of all of the specifications -- would have made a great deal of difference.
We did go so far as to mail a booklet which did contain all the qualifications, specifications and details required. We did go so far as to mail those to quite a number of park owners and dealerships. I suppose we might have directed a specific mailing to all owners but I suppose again, by hindsight, that’s something we might have done.
The fact is that although there were some applications which were denied, in retrospect it’s a hardship but I couldn’t see any way at the time when we made these rulings in which we could possibly have extended it.
It would have had a distinct disadvantage if we had amended the regulations to admit those purchasers of homes which did not qualify with a Z240 but, perhaps, had some other Z designation under CSA. There is a much simpler one, a much easier one to meet, which deals with electrical standards only; it doesn’t deal with structure and insulation and the like. Had we done that, we would have wound up disqualifying some others who sold homes of that qualification and purchased Z240s or some other dwelling unit as their first home thereby qualifying, because we did not then treat a home which was not a Z240 as a prior residence. It would have wound up disqualifying quite a number who had previously qualified under the present arrangement.
From a logistics and practical standpoint it seemed that a difficult, if not impossible situation would be created had we gone back to rework the game or changed the rules during the course of the ball game.
That’s a rather long answer to a short question from the hon. member for Windsor-Walkerville but I trust it explains the situation.
Mr. B. Newman: Thank you. I notice your new ads do specifically mention Z240s, so you must have learned something from the error you committed earlier. Could you inform the House as to approximately the number of mobile unit buyers who lost out on their first-time home buyer grant as a result of not having the Z240 qualification, but simply having a CSA rating on the unit?
Hon. Mr. Meen: I am advised that we don’t have any particular figure for that. The 400 or so applications which were denied were denied for quite a number of reasons and we do not have a breakdown of the numbers within that group who were denied it simply on that basis and who were otherwise fully qualified. What you would have to do is go through and see whether they qualified otherwise in every respect.
Certainly there are some. I have a great deal of sympathy for those who may have been misled, deliberately or otherwise, by a vendor who allowed that because it had any kind of CSA approval, that was fine, and “Go ahead and sign here and you will get your $1,000.” This, I suspect, may have happened. I just don’t know how many there are in that category.
Mr. B. Newman: I did discuss this with some of your officials and, let me tell you, they were most co-operative. They explained everything to me very well and I thought were a real credit to your department.
Mr. Reid: I want to speak to the minister concerning the same thing. As the minister knows, I have been in touch with him on one or two occasions or more in regard to the fact that some of the people who bought mobile homes were not successful in receiving the Ontario home buyer grant. They bought these mobile homes in good faith. The constituents I am speaking of, as the minister knows, are in northern Ontario, particularly in northwestern Ontario, where they wouldn’t have the opportunity to contact your regional officers to the same extent as the 130,000 callers or letter writers you had.
Many of them took it on good faith that if they purchased a mobile home which was being sold on the market it would qualify for the home buyer grant. I am informed by some of them that the mobile homes they now live in far exceed the standard of Z240. Some of them have had them inspected by the local Hydro people, for instance, and found that the wiring is more than adequate and exceeds the GSA standards.
The minister says he’s got some 400 applications which were turned down for one reason or another. I would suspect that a large number of those come from northern Ontario where the people, as I say, acted in good faith, thought they were doing the right thing but have been turned down because their mobile homes didn’t meet the Z240 standards. Again, perhaps because of the area they live in, they didn’t have the opportunity to get the confirmation that, perhaps, the minister felt they needed.
I would implore the minister to have his officials go through those applications, pull out those which were turned down because they didn’t meet the Z240 standards, look at those particularly from northern Ontario where they don’t have access to the information to the same extent as people do, perhaps, in southern Ontario and give your officials a chance to have another look at approving those requests.
I would think, for instance, if we take the minister’s comments that many of the 400 were turned down for reasons other than the fact that they weren’t in the Z240 series, you would find there might not be all that many which would qualify because they do meet the standards and those could be approved.
I wonder if I could have the minister’s comments on that?
Hon. Mr. Meen: Mr. Chairman, the Act itself is very clear. It is not a question of looking at those in northern Ontario; it’s a question of looking at those for which the specifications of the home concerned do or do not meet the requirements of the Act. Whether it’s in northern Ontario or Windsor or wherever, the fact of the matter is that some of these cases may well be those we had to reject only because they did not meet the Z240 standards. I don’t know of a standard which is more stringent than the Z240; the hon. member refers to electrical -- that could be. There are lots of other requirements, besides electrical, which have to be met before you get a Z240 rating. There is a much lower standard of mobile trailers which has a Z number.
Mr. Reid: Yes, I realize that.
Hon. Mr. Meen: It’s 173 or whatever it is and that meets an electrical code which is quite a satisfactory code. The 240 may have an even higher electrical standard for all I know but it has all these others for mechanical, plumbing, installation, general structural quality and so on which are not proved nor disproved, I would suppose, by some of the other standards. They are just not met in the sense of ever having been inspected.
I am advised also that there doesn’t appear to be any economically practical way in which a home could now be assessed as to whether it meets or does not meet the Z240 standard. You could wind up by pulling panelling off and tearing the home apart in order to determine whether the installation and the structure were adequate and whether the plumbing met the requirements and the like.
There have been various ways taken by my ministry in order to try to help these people whenever we have had a case in which they haven’t met the Z240. I know of no way in which we can deal with somebody in the north; you are talking, in effect, of hardship cases -- how can we deal with somebody in the north any differently from someone in the south? The Act is clear, and I am obliged to live within the terms of the legislation.
Mr. Reid: With all due respect, I suggest that the next time you come out with a programme about which there is some question you ensure that the advertising is much sharper and clearer so that people particularly in the northern communities can get that information so they don’t think they are doing the right thing and then find out later that they are put to a hardship.
Hon. Mr. Meen: There is one further point. I don’t disagree with that. I say hindsight is a great thing. This was our first venture into a home buyer grant, and mounting an advertising campaign in a few weeks’ time perhaps leaves something to be desired. It would be nice to have some precedents. I think it’s fair to say that we’ve all learned a lot in the course of administering this programme over this past nine months.
There was one point that I wanted to emphasize and that is that the people in the north, like people in the south or anywhere else in Ontario, have a Zenith 8-2000 line which is clearly set out in the advertisement and which says: “You can phone us free of charge by dialing ‘0’ and asking the operator for Zenith 8-2000.” It’s very clear, if they have any questions.
Mr. Reid: Have you ever tried to phone that number?
Hon. Mr. Meen: As a matter of fact, no, I haven’t. Is it difficult? We have quite a number of lines but, I suppose, at peak periods they can wind up being busy. In any event, as I say, hindsight is great stuff and next time we’ll do a little better.
Mr. Gaunt: If you have got two days, you might call it.
Mr. Reid: Next time you might use some more telephone lines too.
Mr. Grande: I have a further question of the minister, if I may. Out of the $138.7 million for transfer payments, is there $3 million or $4 million which you supposedly will be saving as the result of changing the Ontario Guaranteed Annual Income Act? Is that reflected in that figure or not?
Mr. Chairman: Before the minister answers, that is actually item 2. Shall item 1 carry, then we’ll recognize the question of the hon. member for Oakwood under item 2?
Item 1 agreed to.
Hon. Mr. Meen: I am advised the $138.7 million is the net calculation after taking into account the amendment to the GAINS legislation presently before the House.
Mr. Good: Are the sales tax credits regarding production machinery included in this figure?
Hon. Mr. Meen: No, they are not.
Mr. Good: Whose ministry is that under?
Hon. Mr. Meen: It’s under retail sales tax but we dealt with that in vote 902.
Mr. B. Newman: It is in the explanatory note.
Mr. Good: The explanatory note states the retail sales tax credit programme is included.
Hon. Mr. Meen: That’s part of the Ontario tax credit. That’s the portion of the tax credit programme where the claimant adds into his tax credit one per cent of his personal allowances.
Mr. Good: Under what ministry are the estimates of the refund on sales tax -- the credit on production machinery? Is none collected or is it collected and then refunded in the form of a grant?
Hon. Mr. Meen: It comes under the retail sales tax item in vote 902, and it’s simply a reduction in the revenues.
Mr. Grande: I really don’t understand here. Are you taking for granted then that that particular bill will go through and will be passed?
Hon. Mr. Meen: When one puts one’s estimates before the House he has to assume that the legislation proposed by the government will be passed. That is exactly why amending legislation of this sort is introduced immediately following the budget. That amending bill to which the hon. member is referring is a part of the Treasury budget.
Mr. Grande: So you are assuming that the Liberal Party is going to be supporting that amendment?
Hon. Mr. Meen: One assumes that the House will support the financial initiatives of this government.
Vote 903 agreed to.
On vote 904:
Mr. Young: The other day when we were discussing this whole matter of assessment, I spent a bit of time talking about the appeals that were now going through in respect to assessment of large properties in Metro Toronto and other places -- commercial, residential, shopping, industrial and so on. I wonder if the minister could tell us just what proportion of his budget -- what amount of money and what amount of time -- is being allocated to fighting those appeals at the present time. That is a situation which we are facing now because we do not have any definite basis upon which assessment is now made. Perhaps the minister could give us some inkling as to what is taking place in that field and what resources are being expended to meet that challenge.
Hon. Mr. Meen: Mr. Chairman, there isn’t; I don’t have a precise figure, and I was going to say that there isn’t any, but I presume that somewhere in our calculations we have an allowance for the conduct of these appeals. The appeals to which the hon. member was referring are ones -- no, I may be mistaken; I must say that I directed my thoughts to the 30,000 appeals relative to condominiums. The other matters, the large industrial and commercial complexes --
Mr. Young: Hudson’s Bay, the banks.
Hon. Mr. Meen: Yes. I don’t have the figure. If the hon. member needs it, I’ll endeavour to get it. I take it he’d like to have it; he wouldn’t have asked me for it. I’ll endeavour to get it for him. I don’t have a breakout at the present time.
Mr. Young: Mr. Chairman, one other question. With respect to the valuation file, could the minister bring us up to date as to its state at the present time? The file, I think, is a pretty vital part of the total assessment picture today in terms of revamping the assessment and bringing it up to market value. From what the minister said, I understand that file was started somewhere around 1974, with residential and vacant land first and the other properties coming in after that. How far are we from having that file completed? How much more work needs to be done on it?
Hon. Mr. Meen: Mr. Chairman, I think it was in the hon. member’s opening comments last week when he suggested that we were having some troubles with the valuation file. I don’t think that’s quite the case; I don’t believe we have any problems.
The file itself is completed and is being updated to include new structures built in the late 1975 and 1976; in other words, that’s an ongoing process with the valuation file.
At the present time, I’m advised that each regional office has finalized what we choose to call adjustment factors or modifiers to adjust the valuation contained in the valuation file to current market value. Each region has received the computer run of the results of these adjustments on a property-by-property basis; in other words, they’ve got a completely detailed valuation run on every property. These are presently being checked, which means a physical attendance at the site to make sure that they’re still there, that they’re right, that it is a building thus and so, and that something hasn’t been transposed, a number moved over or any of that kinds of things that can come up when you are going through such detail. When the check is completed, the valuation so developed will be merged with the standard assessment system.
I guess what happens after that is that when the merger into the standard assessment system has been completed, every one of the regions will receive a complete set of the assessment data sheets, which will include the old assessment on each property and the market value assessment, together with all pertinent details relative and relevant to that market value assessment. These data sheets will be distributed to the assessors on a neighbourhood basis. Each one who is familiar with his own neighbourhood will take these sheets out then and they will check all the valuations and make any necessary adjustments that they may discover. The standard assessment system then is updated to reflect these adjustments.
All of this, as I understand it, relates to residential. By October or so this year, we ought to have the modifiers for the industrial and commercial areas. Those modifiers aren’t yet complete for the commercial and industrial areas; they are complete, as I am advised, for the residential. When the commercial-industrial and the exempt properties which fall in that general category are being finalized -- we hope that that will be completed by October, roughly, of this year and the modifiers for those worked out -- then the work will be completed, and it should be possible then to finalize the studies with respect to the tax shift.
That’s another reason why we are not in a position to advise, in every sense in every way, as to just what will happen with these tax shifts. The studies are going on, and when the modifiers are available in October or so, we should then be able to finalize our assessment of the tax shift within the industrial-commercial sector. That should be of assistance in the refinement of the 15 fundamental proposals which we have put forward in the Treasurer’s (Mr. McKeough) budget statement as budget paper E, and should enable the commission to assess the 15 proposals and determine just how they should apply.
When all that’s been done, and if the commission endorses the proposals or modifies them, and the government then, in the later part of the fall, is able to assess the commission’s report which we want to have in by then, we should be able to take the necessary steps. In any event I would expect we would be in a position to prepare assessment rolls at market value and issue the notices, so that everybody then will be able to see the assessment on his property, with an estimated mill rate, which would be calculated by my ministry, assuming the same number of dollars would be required by the municipality as were required in, say, this current year, 1976. That taxpayer will then be able to look at all the figures; his market value assessment, the percentage applied to it -- we are suggesting 50 per cent in the case of residential -- times the mill rate that we would then calculate for each of the municipalities, to be the appropriate mill rate if they were operating on the same size of budget as in the preceding year. They will then be able to determine just how this affects them.
That’s the schedule of things. I don’t think as the hon. member was suggesting, we are in difficulty with the files. They are complicated, and there are many of these studies still going on for these modifying factors, as I have indicated, but in the next few months when it’s completed for the industrial-commercial sector we should have that information available for the commission, and I think they should then be able to report to us on time.
Mr. Young: I take it for granted then that the situation is well in hand so there should be no further delays as far as getting to market value is concerned -- that the rolls will be returned for assessment for the tax year of 1978, without fail?
Hon. Mr. Meen: Mr. Chairman, that’s our best educated guess. We ourselves are on target, and premising that the commission can bring us in definitive recommendations with respect to our 15 points, then I think we should be in a position to move on as scheduled. At this point, I anticipate no delays that would alter that situation. And I frankly hope that none occurs.
I have already said I would dearly love to have been in a position to have this in place now, and get rid of a lot of the inequities we know exist. But I think in the interests of the dialogue that we want to have with the municipalities and the other people directly affected, and in making sure that when this is put in place it’s right, and that it works, that this delay is justified.
Mr. Young: We are glad to have that assurance that the programme seems to be now getting toward finalization. I suppose if another provincial election doesn’t intervene to mess up our plans again in some way, then can we look forward to this thing actually happening, and many of these difficulties being --
Hon. Mr. Meen: You know, I have a great affection for the member for Yorkview, but he really does get pejorative at times, and there is just another example. I want to say to him it was not the election that intervened; these are steps that we did not anticipate in their totality, at the time when we took on the assessment in 1970. I can tell you that these steps are being taken, not because of any possibility of an election, or no election.
Mr. Young: Again, Mr. Chairman, I am glad to hear the minister assure us that elections have had nothing to do with delay in this regard. We were suspicious that they had. Now, our minds are set at rest, and we have the minister’s word for it that the very thought of elections had nothing to do with this whole delay process. It’s good to have that on record and now we are clear.
Just one other question --
Mr. Warner: They are very inconvenient.
Mr. Young: They are very inconvenient when the time comes but I am not disputing the minister’s good faith in this. Of course, he doesn’t make the final decisions over there. Whether someone else may have ideas other than this minister’s as to the timing of this thing we are not certain on this side of the House.
I was just a little puzzled, Mr. Chairman, through you to the minister, as to where the electronic data processing work is buried in these estimates? There is no clear indication of where the expense of this process is. I suppose it occurs on various items in this vote and I wonder if the minister would explain to us where we can find the expenses which do occur in that field?
Hon. Mr. Meen: I am told it is in field operations. Data processing has a sum of $993,000 and the development is $450,000; I take it that is also in field operations. That’s in the first sub-vote under administration. The $450,000 is part of the $840,900.
Mr. Young: Part of vote 904 -- the first part?
Hon. Mr. Meen: Right. The $450,000 for development is part of the $840,900. That’s sub-vote 1 of 904.
Mr. Spence: I would like to ask the minister -- I might say before I ask the question that in my riding I have a gentleman who has made a special study of site value assessment which is carried on in Australia and New Zealand. He has visited different municipalities, trying to sell site value assessment.
Did your department make any studies of site value assessment? I know you decided on market value assessment but this constituent of mine seems to have made a real study. What studies have you carried out on this or have you any ideas?
Hon. Mr. Meen: No, Mr. Chairman, I don’t profess to know a great deal about the principles of site valuations. They are not practised here; I don’t think they are practised in any jurisdiction in Canada. I don’t know whether they are practised in any jurisdiction in the United States but I do understand that they are practised in New Zealand and in a number of other jurisdictions.
One of the catches in the principle of site valuation is that you just value the land; you don’t value the improvements. It is an incentive to develop everything to its maximum potential and to do it right away. We don’t think -- my advisers tell me they don’t think -- that this is really the way in which we should go at this stage.
The select committee and the Smith committee, I am sure -- I must say I don’t recall this clearly but I think that the Smith committee in the 1960s -- made some observations about site value as a method of assessment and concluded that it was not the way to go. They did explore all methods and they ultimately concluded that going the market value route, which they recommended, was the best way to bring some kind of equity out of the inequitable and highly chaotic kind of arrangement we saw in those days with the 950 municipalities. The select committee certainly endorsed that and, of course, what we are doing today is an outgrowth of it.
This whole question of site value assessment keeps coming up. There are people who really do think -- they are convinced themselves -- that it is the greatest thing since sliced bread. Really, I think -- and I don’t want to sound unkind -- it’s a rather simplistic approach to an extremely complex subject, that being of assessment. A person who owns some vacant land next door to a large metropolitan area could very well be taxed into oblivion by site value assessment, because he would be taxed on the basis of what that property should be worth if it were developed like the properties next door, and if they happened to be 40-storey industrial or commercial complexes then he would be assessed accordingly. The money has to be got somewhere to run the municipalities and our view has been that it should come based on the market value of the piece of bricks and mortar that happens to be there in the municipality, rather than by looking at it on the site value approach.
Ms. Bryden: Mr. Chairman, I gather that the progress in the reassessment pretty well covers residential but that the commercial is not yet completed. I don’t think the exempt properties have been assessed at market value yet. I understand the farm assessment is still on the basis of farm value rather than market value. I don’t believe unorganized territory has been covered and yet the proposal for the commission is that it be brought under the provincial assessment.
Since there are so many parts of the picture missing for a true impact study, it’s hard to understand how anybody can appear before this commission and discuss the proposals for changing the property tax base and the property tax system and the business tax system, with the little information that is available. I would just like to ask the minister if I am correct that all these gaps are missing and that the impact studies have not really been completed and will not be completed until October when the commission is supposed to report? How is it possible for people to appear before the commission and comment on the proposals to offset the impact if they do not know what it is?
In the budget paper there is a sample impact study given for the regional municipality of Niagara, but it would appear that this is only a sample and that other areas will not know what the impact is and how these possible shifts are going to occur. It seems to me that we would like to know why we have waited so long for these proposals of how to deal with the impact of the reassessment. For six years we have known that this shift was going to occur from commercial and industrial to residential, and yet at the 11th hour, six years after, we are given a few months to review some proposals for dealing with this without the information really being available.
In that time the department has spent $211 million up until March 31 of last year and is asking for another $43 million. Administrative costs have risen greatly. In 1973-1974, for example, the administration vote that we are looking at now was $217,000 and it’s now $840,000 -- almost four times as much -- and yet we still have nothing really to show for it in the way of reassessment and information on which we can base proper reform of the municipal tax structure. If it wasn’t the election, what was the cause for this long delay when we have known that this shift was going to occur?
Secondly, the minister has given us his complement reduction and shown with some pride that they have managed to reduce the complement somewhat -- since the results are so intangible, one is not surprised -- but he hasn’t given us the figures on the number of contract and casual employees, which seems to be always the missing link in any of these statements about reduction in complement. I would like to know if he could give me the number of contract and casual employees as at March 31 for 1974, 1975 and 1976, so we can compare and see whether they have gone up when the complement went down.
Thirdly, I would like to ask him if there is any consideration being given to provincial aid to the municipalities who are being asked under the proposals -- the 15 proposals for tax reform -- to phase in any tax increases that may come from the reassessment to market value. It would appear that the proposal is that the municipalities will pay for the phasing in or, in fact, the other taxpayers in the municipalities will pay for the phasing in -- because certain people whose taxes should go up according to the market value assessment will not go up as much as they should. This means that other people’s taxes, which should go down, perhaps will not go down as much as they should because of this phasing in.
It seems to me if you are going to have a phasing-in programme, the entire population of the province should bear the costs, rather than just the particular taxpayers in a given municipality. There will certainly be resistance to phasing-in programmes if the entire cost is left to the municipalities.
And then, as far as those bodies going to be made taxable under the proposal -- those which have been exempt up till now; hospitals, school, conservation authorities and so on -- are there any proposals or plans for adding to the grants for these bodies? They are all non-profit bodies dependent on other levels of government to provide them with funds, or on the local taxpayer. The proposal that the tax base should be broadened by extending it to these exempt properties is really just taking money out of one pocket and putting it in the other. In some cases, it’s taking it out of a municipal pocket and putting it into the provincial pocket. It should be the other way around; if you are going to tax those bodies, the province must supply the extra money to cover their extra taxes and then the funds will then flow to the municipalities.
I think those are the three questions that I have at the moment, Mr. Chairman.
Hon. Mr. Meen: Maybe my arithmetic is off, Mr. Chairman, but I counted four questions in all.
You are asking us about the cause of the delay -- and I don’t know how many times I have to talk about this. But I guess the hon. member wasn’t in the Legislature in 1972-1973 when we had to extend the time at that stage. You see, we had brought our assessment roles up to a virtually complete situation, but they weren’t computerized. They weren’t designed at that stage to follow any rapid escalation in market value. That, incidentally, is the reason for the apparent divergence of opinion on the part of my predecessor, and myself, when he stated in 1973 -- and I believe it was the hon. member for York who quoted it at this time -- that “assessment was complete.”
He was talking about assessment according to the mechanism where you did not use computerized systems. You did not have any facility at that stage for an ongoing update from almost literally day to day as the market values fluctuate through the course of the year -- I suppose peaking in May and June and dropping through the summer and rising again a little bit in September and tending to drop off and so on through the winter months and then swinging up again in the spring.
He was talking about just a straight mechanical system of assessment; and it was virtually complete at that stage, as he indicated. But beginning in 1972 and going on through 1973 and into 1974 we experienced -- we all know this -- an absolutely dramatic and almost frightening escalation in the market values of real estate. This was particularly evidenced in residential accommodation -- but not so evident, say, in the values of apartment houses and the like, which tended to remain constant.
In the case of residential accommodation, prices started to go right out of sight, and our assessment people just could not keep up. We then had to go into the computer system, which we now have in order to be able to keep current with the market, regardless of how quickly it may fluctuate. That is why we have had these two different dates, but it was one of the major reasons why my predecessor had to extend the time of the freeze and the time for bringing in the market value assessment, so that we could bring in that far more sophisticated arrangement for computer processing and generally handling all of the millions of assessed properties in this province.
So when the hon. member says, “If it wasn’t the election, what was it?” I don’t know how many times I have to tell her -- and no offence intended, Mr. Chairman -- but that’s the real reason, regardless of how cynically she may be inclined to look at some of the other things that have happened here in the province over the last while.
Ms. Bryden: Could I ask a question concerning that, Mr. Chairman? It seems to me that computer systems were used in assessment in other jurisdictions for a good number of years to use market value prices in order to update and keep assessments in step. Was the idea of using a computer system rejected -- I know that this was in your predecessor’s time -- at the outset and it took us three years to discover that a computer system was essential?
Hon. Mr. Meen: I’m advised that it took us three years to develop the system, so it was really coming along. Perhaps it was inevitable that it would have been brought in, but ultimately, by 1973, it became essential that it be used for the purpose of market value assessment rather than the refinements that might have come along at a later time.
The hon. member was also asking about contract employees as of March 31 for each of the years -- what, 1974, 1975 and 1976? I’m advised that they were huge. There was all of one.
Ms. Bryden: Contract and casual?
Hon. Mr. Meen: I’m advised, yes; contract and casual, one.
Ms. Bryden: In each year?
Hon. Mr. Meen: In each of those three years I’m advised that there was one contract employee as of March 31, 1976, 1975, 1974 -- and I don’t know about 1973.
Mr. Good: The same one?
Hon. Mr. Meen: I believe it was the same one.
Mr. Good: You get rid of them all except one by the end of the year.
Hon. Mr. Meen: I’m advised that the gentleman has died so we don’t have him any more. So, at this moment, we have none.
Ms. Bryden: Excuse me, Mr. Chairman, does that include casual employees too? You had no casual employees at all?
Hon. Mr. Meen: I’m advised by the staff we have had no casual employees on those dates and in the assessment division, which is what we have been talking about.
The phasing in; I would like to get some advice from the commission -- we’ll be looking forward to their words of wisdom -- to suggest how the phasing in takes place. There are, and I mentioned this figure before, 270,000 properties that weren’t on the assessment rolls at all. There’s no phasing in for them; they’re already in now and they are being taxed like anybody else. There are others that are being assessed at a small fraction of what they should be assessed.
If one assumes that residential assessments here in Toronto run at, say, 10 per cent of fair market value, there are some properties that are running at, as a wild guess, maybe two, three or four per cent of fair market value -- maybe even less than that -- being frozen at those assessments based on legislation passed in 1919 giving recognition to returning war veterans. The city of Toronto still has some of those properties; I’m advised that there is no other municipality in Ontario though with that similar kind of, in effect, exemption.
Certainly it’s very beneficial treatment for those owners. Those owners are, in many cases, not the same people as the people to whom the benefit was extended in 1919. I guess the question comes up: Should you have a transitional period for them? They’ve been getting close to a free ride for quite a long time. Or should you not bring them right onstream instantly at a fair part of the market? These are questions to which the commission will, I’m sure, direct some thought.
I don’t know what the real answer is. There are some people, I suppose, who have paid a disproportionately high price for a piece of real estate because of its very attractive tax nature. Suddenly they’re being deprived of that tax benefit and they’re going to lose some inherent value in the property because of the loss of that tax position.
Of course, if one does not bring these in instantly the other people in the municipalities are bearing a part of that, but if one stages it over four or five years, which way is the pain worse? To those who bear a little bit of it, say of you’re staging it over five years, 80 per cent of it the first year, 60 per cent of it the second, and so on, whereas with the individual you are raising his by that same amount? Or is it better to get it all over at once and raise his by several hundred per cent where you, in those instances, probably don’t reduce all that dramatically the amount of tax the other people are paying?
I’m sure my colleague, the Treasurer (Mr. McKeough), and all my other colleagues in cabinet, will be interested in getting the views of the commission as to just how the phasing-in process should go. It might be that they would recommend that we treat some of these differently from others. There may be all kinds of variations on the theme which I haven’t thought of and which they may be able to think of when they have the benefit of the advice from the municipalities.
I’m told, incidentally -- and this was not a question raised by the member directly as a question, but she raised it in the course of her observations -- that the modifying factors for the exempt properties, industrial and commercial, which aren’t totally developed yet, will be available for the municipalities by Aug. 1. They should be able to move on with their own studies and the commission with its studies to determine the significance of any shift and just what should be done. It’s fine for the member to talk about our knowing that there would be shifts from one class to another; knowing it for six years she said. Well, I can tell you, Mr. Chairman, we’ve known it for 10 years -- nine years anyway, since 1967 -- and that really isn’t the point. What we’ve known in that period of time is that there would be a shift from the industrial-commercial sector on the one hand to residential on the other.
The city of Toronto did quite a comprehensive study of the Smith report and told us the degree of the tax burden shift were there to be no factoring involved; in other words if everyone were just assessed at market. That’s an extremely simplistic thing in itself and we’ve known we couldn’t possibly do that. So, recognizing, with the studies we did -- the hon. member referred to Niagara -- the studies we did of Niagara showed us that there would be a shift unless there were a factoring down of the residential class of something like 60 per cent, I guess, and we’re recommending or suggesting 50 per cent as the factor, to make sure that there is no significant shift in a municipality from the industrial-commercial sector on the one hand to the residential on the other.
We’re not setting out to burden the industrial-commercial sector with greater taxes, notwithstanding the fact that they can set off those taxes against their taxable income. We’re not setting out to that, but our goal rather is the other side of that coin, namely to see that the residences are not burdened with a higher percentage of the tax than is presently the case.
The hon. member was also asking -- and this was her fourth point -- about hospitals, schools, and she may have mentioned universities, otherwise tax-exempt properties. I believe the statement has already been made and confirmed that these bodies, the hospitals, when they pay their taxes in the usual way to the municipality, would show that as an expense and the provincial grants to the hospital in that case would be enriched by that same amount, so that there would not be any additional burden on the hospitals per se, or the supporting bodies, whatever.
I am not sure how that would work in the case of schools in a municipality, because it sounds as if it’s taking out of one pocket and putting into another of the same taxpayer. But certainly for hospitals and universities, in which there is a distinction that I think one can legitimately draw between the two, I am advised that there would be enriched grants that would take up the amounts of those payments that they would be making as taxes so they should not be additionally burdened in any sense.
Ms. Bryden: Mr. Chairman, can we expect the impact studies across the province to be available in time for people to see whether the 50 per cent factoring is going to be adequate in all cases? On the basis of Niagara you may draw one conclusion, but it may be quite different in other areas. I think it is very important that the people concerned know what the impact is going to be in their own area.
Hon. Mr. Meen: Mr. Chairman, I think the intention is that these studies would be available to the commission -- and the commission I expect, is going to be holding public meetings -- as well as, of course, to the municipalities; therefore I think one can consider that with the municipalities being advised of the significance of these steps, that it’s going to be public. I don’t think there’s any question of it not being public and I would hope that there is no such question.
I want everybody to be able to look at his assessment notice, along with the results of the commission -- this is the next step down the road, I suppose -- so that he will know just what is happening with his property and his potential tax liability. If he finds it is out of line, then of course he would have this information within an appeal period so he could take it through the necessary appeal steps.
Coming back to the basic principle that I think the hon. member is getting at; that is, that beginning in early summer -- no, I guess that’s not fair; I am told late summer -- the municipalities will have all the information they need, not just in the residential sector but in the commercial-industrial sectors of their municipalities too. They will have all the information, including these adjustment factors, so that they will be able to analyse it for themselves. I am sure that’s as public as one would ever need to have it get.
Mr. Good: Mr. Chairman, I think we have actually spent a great deal of time on this whole matter, both in the leadoff speeches and recently; the minister undoubtedly will have some input into the final results, but I suppose the final policy will rest with government as a whole. There are some things I would like to ask about and a few comments I would like to make.
It is significant to me that I still feel the same as I did back in 1968, when I think it was in the first speech I made after I came into this House that I said it was imperative at that time, the way assessment was going across the province, that there should be uniformity and that the use of certain assessment handbooks should be made mandatory by all those who are engaged in the assessment process, because it was obvious at that time that those municipalities that were doing their assessment according to recognized practices had no trouble with their assessments. Within the taxation area, they had everything assessed on a basis where there was a degree of equity according to the social conditions of that area and the acceptability of the amount of tax that should be paid by residential, commercial and industrial.
The province saw fit at that time to throw the whole business out the window. Now we have messed around for seven years, and it is going to be eight years before we bring in a new system about which there is no guarantee whether there is any equity or not. I shouldn’t be bringing this up every year -- but had the province at that time looked at the areas where people were not doing their assessments properly and enlarged some of the areas to a county basis for assessment, rather than have your kitchen-table assessments done by some part-time clerk back on the last concession of the township, I think all of this could have been avoided. Considerable inequities and hardships have resulted to municipalities over these years by the freezing of not only the assessments but the freezing of the equalization factors that are used within county and regional municipalities, and by the freezing of the factors that are used by the municipalities for the grant purposes. And we still have a mishmash right now. You have market value assessment operating in certain areas of the province which, for two years or three years, have not had the advantage of your proposed factoring system. Now you say you recognize the shift. It’s not too many years ago since the present Treasurer of the province called me and members of my party -- I forget what the words were -- in effect we didn’t know what we were talking about because we had mentioned there would have to be a modifying factoring system either on the assessment or on the tax levied within the municipality.
I don’t remember this government ever doing one thing about it at the time or raising any opposition to the great shift that occurred in the Peel and Mississauga areas when market value assessment went in. Nor did it do anything in my own region when market value assessment went in. You accepted the whole thing that market value was the be all and the end all of everything. Now you are beginning to admit that it isn’t; that things happen.
Now, I’ve a few direct questions. First of all, you mentioned that you are on computer and can push a few buttons and bring your market value assessments up to date. How then do you account for the fact that market value assessment all across the province -- not only in those areas where it now is a reality and has been a reality -- bears no resemblance to present market values -- nor did it at the time when the assessment was made? Secondly, why is it that those areas where they have had two or three tax bills already no adjustments have been made in those assessments for those tax bills? I talk of Grey and Bruce and the Parry Sound area; I believe there is another one down in the Ottawa area which is already on.
Another question I would like to ask is if these assessments are not adjusted annually -- which they haven’t been -- is it your intention that assessments will change annually to keep in touch with market values? if they do, what do you expect to do about commercial and industrial assessments which, by your own admission, you don’t base on market value but on replacement cost less depreciation? How are you going to keep them up? If market value for residential properties keeps going up and should building costs remain static we are going to have greater inequities in there.
The other thing I would like to know is if the proposal as spelled out by the Treasurer in his notes to the budget were accepted, would the present market value assessments, which are now in force in areas like Grey and Bruce, suddenly be readjusted so that a residential assessment -- which now has an 85 per cent tax bill -- would be reduced to 50 per cent and the industrial would go up to 100 per cent? In other words, we would then have another juggling around of the assessments and a revaluation of the tax rates in those areas. I think that is important. It has to be important to the people of those areas who have already had the trauma of being thrown on market value assessment with the shifts which did occur in that particular area.
When the minister answers those questions I have a few others I would like to ask.
Hon. Mr. Meen: I didn’t have any discussion with the people in Peel and York when they decided to go to market value assessment. That was sort of before my time -- in the ministry anyway; I was a private member in the House in those days. I think we all knew that there was the potential of a shift to the residential quarter if they did not have the benefit of factoring and, of course, without appropriate legislation they would not have that benefit.
I can tell the hon. members that roughly four years ago when I was in Treasury and Economics and Grey and Bruce came to see us seeking authority to go on market value, I pointed out to them that there was every possibility there would be some pretty dramatic shifts, in some cases, of the tax burden in some quarters. For example, in the town of Hanover it was evident to us that there would be a shift there and the taxes would go up.
In Muskoka and in any of the other districts in which we have permitted a return to market value assessment, we have been very careful to tell the people involved that we would expect a shift upward in the tax burden on the residential sector -- at least to some degree. And we would only authorize it if the percentage of commercial-industrial assessment in the municipalities concerned was low compared with the total assessment. Coupling that with the obvious gross inequities that prevail in these municipalities -- there were some terrible ratios of assessment for similar types of value of accommodation, particularly in the residential end.
So one weighs the advantages of going to a more or less even form of assessment at market value on the one hand against the unavailability for at least a two- or three-year period -- it didn’t look like that long when we did it; we thought it would be in, as you know. But it looked like a fairly short period of time in which there might conceivably be a shift of the burden from the industrial- commercial sector on the one hand to the residential on the other.
The hon. members have asked about what might happen with Grey and Bruce and Peel and York and so on. I wasn’t aware of the percentage which the hon. members for Waterloo North or for Grey-Bruce refer to. Did the hon. member for Waterloo North say 85 per cent for residential?
Mr. Good: No, that’s the rate levied.
Hon. Mr. Meen: I simply don’t know what that would be. If it’s running at, say, 85 per cent or something --
Mr. Good: I would say it’s less than 50 per cent now.
Hon. Mr. Meen: If it’s less than 50 per cent of fair market value, then at least the assessment would come in by way of a small increase.
Let me just illustrate the problem. Peel went to market value assessment in 1968 or 1969 and it purported to be reasonably even and consistent across that county. But then market values have gone out of sight there too.
Mr. Good: Texaco and those other industries -- their assessment went down something terrible.
Hon. Mr. Meen: Illustrating the same point I’m making, it might well be that we have to see that these assessments, when applied, are applied in such a fashion that they do not increase the tax burden on the residential taxpayer. He obviously can’t deduct his taxes from any earned income -- that is for the purpose of calculation of income or corporate tax.
The municipalities that went to market value assessment did so to overcome gross inequities within their classes. I presume they accomplished that reasonably well. But other factors entered the picture and that is why we’re having to do these studies -- to make sure that when we put the entire province on to this principle of market value assessment the burden on the taxpayers is equitable. As mentioned earlier by the hon. member for Beaches-Woodbine (Ms. Bryden), we also must ensure that the transition period doesn’t hurt them too much, but is fast enough that it doesn’t leave the inequities outstanding for too long a period of time.
Mr. Good: On that question, if things are on the computer, why have there been no adjustments in those areas where you already have market value in operation?
Hon. Mr. Meen: I can give you an answer to that one. The fact is that if you’d asked for it two months ago we couldn’t have given it to you. The computer just now is into the stage where we are able to do this. So it’s not a matter of doing it in the past to determine these adjustment factors and the other information that must go into the computer. We are only now at this stage. I’m not even sure the extent to which we could do it across the province today. But it is only now coming on stream in that sense.
Mr. Good: What is of concern to me, Mr. Chairman, is that if you’re going to adjust market value assessment -- in my own region of Kitchener-Waterloo it was two years ago when the land speculation tax came in. At that time I was told -- and I think you agreed with the figure -- that the market value assessment represented about 65 per cent.
If there is going to be an adjustment in the residential market value assessment on a year-by-year basis, once we do get on it, what do you intend to do to keep industrial assessment in line with the changing values of residential properties? Let’s face it, residential property values do change more often and within greater limits than does industrial assessment.
Hon. Mr. Meen: The question might also be raised with respect to apartment buildings, the values on which don’t change as dramatically upwards as appears to be the case with normal owner-occupied residential accommodation. I think basically it is a question of the 50 per cent -- if that is built into the Act, is it engraved in stone or not? I would say no, it wouldn’t be. We would have to review every while the percentage of assessment that was relative to residential accommodation as opposed to 100 per cent assessment for industrial and commercial properties and make sure that, as values rise and therefore new market values are applied, there is not an unjust application of the burden into the residential quarter. My colleague from York North (Mr. Hodgson) just points out that there could be a decrease too as well as an increase, which may not always go on the way we have become accustomed to seeing it over the last 10 years or 15 years.
Mr. Good: Market value is what a willing buyer pays the willing seller. You have those figures from your monitoring of sales within the various areas but obviously you don’t intend to keep your assessments at market value; you are going to keep them somewhere else. Within what limits do you intend to keep them, because --
Hon. Mr. Meen: The hon. member just doesn’t perceive the principle of market value assessment because indeed assessments will stay at market value, however market value moves.
Mr. Good: Look at the assessments in the places where you have it in operation.
Hon. Mr. Meen: Well, of course it doesn’t there, because they are not on the computer arrangement that reflects the values in the market today, where when the values go into the computer and we see the computer values spewing out the imputed market values to properties that haven’t been trading in the marketplace, we will see that it does reflect the way in which the values are going up and down, once this is all in place.
Mr. Good: That is the point. Then to clarify, if your theory is correct you are telling me that within three years from now, the assessment notice will show the actual market value as it is reflected by the sales of that type of property in that area. If that is what you are telling me, that is a totally new concept that has never been projected in this House before, and I just have difficulty believing it.
Mr. Chairman: The hon. member for Welland.
Mr. Good: He is trying to get out; that’s for sure. I have some other things too.
Hon. Mr. Meen: What I am trying to say is that the computer will reflect on an almost daily basis the value of any particular piece of real estate as reflected by sales of comparable pieces of real estate in the area as those sales go on. When the assessments are made, and the proposal is that they will be made once every two years, then there would be a change in that assessment for tax purposes once every two years, and that change may be up or it may be down depending upon what has occurred at the time when the assessment is established and the line is drawn and the computer says that’s the assessment for tax purposes. It is good for next year and the year after that, or whenever, if we go to a two-year basis, as one of the proposals suggests.
Mr. Good: One other matter that I would like to discuss is the proposal that is shown in the supplementary papers of the budget as it relates to bringing business tax in line at 50 per cent. This has been talked about for some time and it is something which I am personally opposed to. I think the inequities that will result here will be equally as apparent as would the shift in regular taxation from industrial. If we look at the Treasurer’s table on page 4, it’s obvious here that those who are going to receive the largest increase in business tax are the same people who are going to receive increase in their regular tax, and they would be your small merchants, professional retail merchants, the retail stores, and I’d just like to cite a few examples here.
If the present retail store business taxes increase from 30 to 50 per cent on an assessment of $10,000 as it exists now -- which would be $63,000 under new proposed taxable assessment -- business tax would increase from $60 to $630. Now that’s your small retail businessman; raising his business tax from 30 to 60. In other words, you want to level everybody out; everybody in business is going to pay the same amount of business tax related to his assessment.
All right, well, business tax is a tax for doing business, and in my view it can be more properly reflected in the type of business which is related to the amount of business and really the prosperity of that business.
On the other hand, the financial institutions and the wholesalers, along with industries, are going to see a tremendous reduction in their tax as they are reduced, from 60 per cent in the case of industries and 75 per cent in the case of the wholesalers and financial institutions, back to 50 per cent. So here you’re asking, under this proposal, to have the small retailer, business and professional man, bear the burden of industry and wholesalers and the banks and the trust companies. Just as an example, a wholesaler’s present business tax of $900 would be reduced by $370 and his total tax bill reduced by $510. Industry on the average would receive a tax bill of about $570 less on a present $10,000 assessment.
The thing I want to really zero in on, which I think reflects the fallacy of the whole argument, is the present business tax on distilleries and breweries. We went through this in private bills committee six or eight years ago, when it was reduced from 150 per cent to 140 per cent. The proposal then was that it be reduced from 150 per cent to 100 per cent
The Province of Ontario has no feeling of guilt or no compunction in deriving great sources of revenue from the distillers and the brewers of this province in the form of tax and markup, and it’s our fifth highest source of revenue. The municipalities in which these distilleries are located have relied heavily on the business tax from these people to raise additional sums. How can one justify the fact that the province wants to make money on this type of business, but it’s not going to allow the municipalities to do it? You’re saying that the distilleries, which now pay 140 per cent business tax, should have their business tax cut to 50 per cent, which, in the case of a present $10,000 assessment would mean a reduction of $1,230 in taxation.
At the time that that proposal was in the private bills committee -- to reduce the business tax from 150 per cent down to 100 per cent -- I did some checking and it would have meant, in my own municipality, for instance, something over a one mill burden to be borne by the rest of the taxpayers. The member for Essex North (Mr. Ruston) did some checking in his municipality and he found that it would have been more drastic than that in one of the rural townships in which Hiram Walker’s had great facilities.
There is just no way, in my mind, that you can justify the levying of a business tax. A property tax, all right, that’s related to the property. Business tax is really -- well, it’s just a gravy tax that one pays to the municipality for the privilege of doing business. In my view, the more prosperous the business, the more business tax should be paid. And certainly a bank or a trust company or a distillery or a brewery is a more likely and acceptable source of taxation than is the small merchant, or the business or professional office.
I just think you have to rethink that whole matter of standardizing the business tax at 50 per cent for every business across the board -- that means your little nickel and dime store, your “Mom and Pop” grocery stores, the retailer on the block, the hardware store and the florist. Everybody is going to be saddled with roughly a $330 increase in taxes on a $10,000 assessment, while they see their friendly banker down at the corner paying less taxes; they see the wholesaler and the industrialist paying $570 less; and they see the distillery across the road paying about $1,250 less in business tax.
Mr. Chairman, to the minister, I would ask that he personally give this some further study and not standardize anything. Nothing is accomplished by standardizing a percentage of taxes among such a variety of classes, but in the light of acceptable social practices within our community, if the province wants to make money out of the liquor industry, I don’t know why they should suddenly say that municipalities may not.
Hon. Mr. Meen: Mr. Chairman, I want to point out to the hon. member that the 15 points which have been proposed in budget paper E are not engraved in stone, and the 50 per cent is not engraved in stone.
Mr. Good: No, I know. But it has been talked about for eight years by the Treasurer.
Hon. Mr. Meen: Okay, but let me remind the hon. member -- though he didn’t have, as I recall, the pleasure of sitting on the select committee in 1968 -- that the Smith report recommended 50 per cent business tax right across the board. The select committee that reviewed that didn’t entirely agree with the Smith report because it went on to say: “Make real estate tax 50 per cent as well of fair market value.” But the select committee, having studied all that, and having heard submissions from all quarters, suggested that there be a single rate of business tax. The committee did not necessarily agree that it should be 50 per cent. Perhaps it should be 40 per cent -- or whatever.
I noted what the hon. member was saying about the breweries. I guess they have always been considered fair game, with 140 or 150 per cent on that part of their operation dealing with the production of consumable liquors -- which happens to be about 25 per cent of the total operation of most of the liquor distilleries. The remaining 75 per cent is on commercial alcohol, which is at a rate of 60 per cent. So it is not that they are being reduced in the whole of their assessment from 140 per cent down to 50 per cent, if it should be adopted as a standard rate -- or 40 per cent, or whatever, if it should be taken as a standard rate -- but rather that 25 per cent only would be subject to that reduction -- a very attractive reduction, I gather, from their standpoint. The remaining 75 per cent in round figures would experience a reduction from say 60 per cent down to 50 or 40, or whatever.
Now, again, I just want to emphasize that this is just a recommendation. It might be that the commission, in hearing from perhaps the representatives of the city and the municipalities which the hon. member for Waterloo North has the privilege to represent, might say to us that they thought that that was not an appropriate simplification of the tax structure. It does happen, though, that a committee and a commission that have looked into this have concluded that it did seem to make good sense to standardize at one rate.
But I think we will await the word from the commission before we take any action on this. Obviously, we will await their views. But it is just one of those points we want to hear from them about.
Mr. Good: I have just one more response to the minister. Leaving the distilleries out of this, and looking at the industry rate presently at 60 per cent, or even the wholesalers at 75 per cent -- you know, a corporation has two things it can do. If the business tax stays at its present rate, or if it goes up -- or anything goes up -- it either has to reduce the dividends to the shareholders or recapture their payment in the price of their products. They may reduce the dividends to the shareholders the first year, but that’s not going to go on more than maybe one year, so they do have an opportunity to recapture their payment. But if you are going to shift this burden now presently borne by industries on to the residential tax -- because that’s what will happen -- every reduction you give the industry is going to be shifted on to the residential property tax in that municipality. You know that as well as I do.
You say you are not raising them, but that’s the general effect when you reduce the business tax on industry. It puts the burden on the residential community, because naturally the municipality has to have a certain amount of money. If you are planning this shift to the residential property owner, I hope you make it abundantly clear why you are doing it, why you feel industry should not be saddled with 60 per cent business tax instead of your proposed 50 per cent, and all of this will then reflect on the residential property owner within the municipalities and that’s where the crunch of it all comes.
Sure, Mr. Chairman, it would be very nice to reduce the tax, but let the tax fall on those best able to pay.
Hon. Mr. Meen: I shouldn’t prolong this -- the hon. member for Welland-Thorold (Mr. Swart) has tried to get up about half a dozen times, so I will be very brief. The 50 per cent figure, I am advised, is very slightly higher than the statistical average of all the business assessments in communities; very slightly higher. If one were to set 40 as the average it would be significantly lower than the statistical average across the municipalities of the business tax assessment.
The point I am making is to refute what the hon. member for Waterloo North has been saying about a shift to the residential, if anything it’s an increase in the burden being paid by the commercial sector, a very, very slight increase, but not a decrease, as he has been suggesting.
Mr. Swart: Mr. Chairman, I guess I have finally made it after about six tries. A great deal of the discussion on this estimate so far has taken place around the so called reform in tax and assessment, the statement in the budget. I am not going to deal with that at length now, first of all, because I am going to have more to say about it in the budget debate, but at this time I am not going to say a great deal about it because I want to go into another issue, but I do want to state that in my view, and I think it is a considered view, that the reform is not going to accomplish what they say it’s going to accomplish. It’s primarily a political document.
I think it has already been pointed out by the minister here, when there is any objection raised to any part of it, he says, “Well, that’s not firm.” Yet the government brings forth this document as a display item for the public to see. I think it’s worth going into in some detail but it’s not going to provide the benefits that they say that it’s going to.
It is not going to reduce the percentage of property taxes paid by the residential property owners at the rate that market value of houses is increasing. It is, as has already been pointed out, going to shift a tremendous burden on to small business. It is going to give tax concessions to the large corporation, and there can be no doubt about that, and it is going to hurt tremendously community associations, which are going to have to pay a level of taxes that they have never ever had to pay before.
The point I want to discuss, and I think it will be fairly briefly, is a tremendous injustice that exists under the present system. It’s the tax concession that’s given to a certain group, and that group is the developers and the speculators. They are the greatest beneficiaries of the present property tax system and, under the proposals, will continue to be. What they are getting away with in this province could, and I think ought to be, classed as the greatest tax scandal in the history of this province, particularly because they are consciously aided and abetted by deliberate loopholes in government policy.
The Assessment Act, section 27, provides that land must be assessed at its market value, except farm land used only for farm purposes. Throughout much of the province all properties are assessed at a given percentage of their value but by and large there is some degree of equality between the various properties, including farms that are farmed by farmers. It is not so with the speculative and development land around the cities. No recognition whatsoever is given of its real value in relationship to residential or other taxpayers.
Let me give this House two or three examples of what I mean. In October and November 1974, for $1.092 million OHC purchased 45 acres of land in Welland from River Realty Ltd. and Doro Investments Ltd. for a HOME housing programme. A start has now been made on constructing the 196 single-family homes on the properties. The assessment to River Realty Ltd. and Doro Investments Ltd. at the time it was purchased by OHC for $1.092 million was $1,350 or 1/735th of the market value of the property which the government paid and it claimed at a meeting there that it paid the correct market value for that property.
In 1975, those companies paid general land taxes of $143.23 -- and I hope the minister would note this -- on that property in the year in which they sold it for over $1 million. Even under the present method, each lot will be assessed at between $400 and $500 and three homeowners with 50-ft lots will pay as much taxes on their land alone as the total paid by the speculators on the whole 45 acres.
Land and buildings in the Welland area, according to the government’s own equalization factors, are assessed at 24.4 per cent of value. Of course, that value is a value of several years ago and, in fact, at the present time they are assessed at about 12 per cent of the value. Even at the minimum 12 per cent figure, on a market value of $1 million and $92,000 River Realty and Doro should have paid taxes of $13,500 instead of $143. I say to you, what a ripoff. It’s condoned and abetted and, in fact, is a result of the policy of this Tory government.
Let me give you a further example. Birchwood Builders in the St. Catharines area, a speculative developer, is promoting the growth of St. Catharines, and with considerable success, into the best fruit land to the west of the city -- the best fruit land in North America and probably in the world. The company has a lot of close help. Langendoen Investments Ltd., Berol Development Ltd. and Paramount Property Co. are also large land promoters in the west St. Catharines area. So close are they to Birchwood Builders that they all share the same business address in St. Catharines; and even though they are destroying the best agricultural land in the nation, they enjoy the same delightful property tax concessions that the Ontario government provides to all the developers.
In 1965, a parcel of land comprising 13.937 acres located in the Martindale area, was sold for $27,310. It was resold to Birchwood in August, 1974 for $256,040. In December of that year, it was transferred in trust to Langendoen at an undisclosed value. That property, which in 1974 was sold at over $250,000, was assessed at $3,100 or 1/83rd of its 1974 market value and paid taxes of $339.54 in 1975. That’s one of the better ones.
There’s another property which was bought by a Mr. Heranden in 1943 for the sum of $5,000. It was bought by Birchwood in 1974 for $150,000 and was sold by Birchwood in December, 1974, for $430,000. The assessment on that property is $2,800, 1/155th of the market value of that property.
I say to you that I’ll be providing more of these kinds of statistics when we get into the budget debate.
The crying injustice of these condoned ripoffs by the developers and the speculators is not just that they’re pocketing the proceeds, it is more that the taxpayers have to pick up the tab for their exemptions. In the St. Catharines-Thorold area alone, speculator-developers hold at least 3,000 acres of undeveloped land with an average value of more than $12,000 an acre. Using government equalization figures, again adjusted to the current value, the tax paid on that value should be half a million dollars instead of the approximate miserly $25,000 they pay at the present time.
In the city of Thorold, property taxes would be lowered by four mills if developers paid taxes on the value of the holdings at the same ratio as homeowners do. The taxes would be lowered by four mills. Transpose the situation to all other cities around the province and the amount of taxes other ratepayers are picking up for the developers totals tens of millions of dollars -- I’ll stand by that figure -- all by courtesy of you, Mr. Minister, the Treasurer and the Ontario government.
The injustice of other property owners having to pick up huge tax levies for the developers is, however, only part of the public ripoff. The artificially low taxes encourage developers to acquire and hold in near or complete monopoly all of the lands around the city which can be developed to the year 2000. That is the situation at the present time. In most urban areas, this has been a phenomenon which has occurred in the last 10 to 15 years. Prior to that time there were little local developers who acquired the land as they needed it.
Very obviously, when the speculators can hold land whose value escalates on their own initiative year by year, and they don’t have to pay taxes on it, they are going to tie it up in speculation and with this government, they really can’t lose.
I say to you, and I say this in all earnestness here this evening, that we need a new interpretation now to section 27 which says farm lands get the exemption when they are used only for farm purposes. These lands are not being used for farm purposes -- that doesn’t say they have to cultivate them -- they’re being used for speculative purposes and they should pay taxes on that basis.
Or, simply, you can add a clause; you can make an amendment which would say farm taxation will apply only to an owner whose principal occupation and income is farming. I am in favour of giving farmers the tax exemption and it can be accomplished. It isn’t that difficult to accomplish by a simple amendment.
I invite you, Mr. Minister, to take that action during this session and to bring in that kind of amendment so those developers pay the kind of taxes they should pay. A lot of this land, perhaps, will be released and the public won’t have to pay escalating prices for property when they want to build their homes.
Hon. Mr. Meen: I would point out to the hon. member that the kind of assessments and taxes he’s been describing -- I presume they’re accurate; he’ll have his research accurate on that -- are exactly the kind of thing we’re setting out to try to remedy. The sooner we get it remedied the better.
The proposal is the fourth proposal in budget paper E -- I presume he is fully aware of that -- in which the taxes in full will be paid to the municipalities. They will be paid in turn by the province on the farming property but if the property is sold out of farming within 10 years, according to this proposal, if and when it is sold out of farming, there would be a recapture of all of those taxes payable by the farm owner and vendor at that time.
I suggest that’s a pretty good way of keeping property in farming or seeing that the proper amount of tax is paid to the municipalities. I would also remind the hon. member of a certain Act called the Land Speculation Tax Act that would catch those boys, in spades, in the kind of transactions he is talking about.
Mr. Swart: Can I ask this question further? I would like the minister to read the section of the Act -- the section of the proposal which assures that that is going to be recovered. My understanding of the reading of that is that farm land will still be exempt and it may be recovered. It gives no time limit; nothing of that nature.
I don’t think there is any more assurance in those new proposals which, of course, can be changed, as you have said, between now and then. There is no more assurance in those proposals than there is in the present Act that you are going to catch the speculators and they are going to pay their fair share of the tax. I would like to have read out to me where it says that those people will be caught and they will have to pay. That land is going to be anything over a very small amount -- just for a house and holding; perhaps one acre they will be able to get.
Hon. Mr. Meen: I don’t have a copy of budget paper E but I would invite the hon. member to read the fourth item.
Mr. Swart: I have read it.
Hon. Mr. Meen: It spells out that there will be provision to recover taxes paid by the province if the property changes use. That is exactly the point. It would be recoverable in the same way as the present farm tax reductions are recoverable for a period of 10 years and that’s the intention. That is the proposal. This is all part of the package. I suggest that we should await the commission and see what they have to say. I would expect that they would endorse the proposal.
Mr. Swart: Can I ask one further question? I’d like to ask the minister, when it is such a simple act to catch these developers by just a minor change, why can’t we do that now? First, the reassessment was ’77, now it has gone to ’78; it could be 1980 before it is implemented. There is no assurance that that clause will be implemented then; why not make a change now?
Hon. Mr. Meen: That is only one part of the whole picture. Presently, those assessments to which the hon. member is referring -- certainly the first one of the illustrations he gave -- is because that property is assessed for farming purposes. Are we going to start imposing outrageously high taxes on farmers because we think they are speculators? No.
I would say this policy is in place and we should leave this alone. There are these certain special assessments available to farms which are in farming. That is why that kind of assessment would apply and we are saying that when it moves out of that category, under the new scheme there would be a very substantial tax attracted. I am not proposing that we do it this year. For that matter, the assessments are all struck for this year so there would be no way in which one could alter it for the current year.
Mr. Swart: Change the Act this year.
Mr. Martel: Mr. Chairman, I want to speak in a parochial sense about assessment as it applies to the mining corporations in the Sudbury basin. As you know, I am sure, the regional municipality is already something like $133 million in the red after three years of operation.
There is something to say about that. We had three of the captains of the Titanic who all ran for the Tories, of course, because they wanted to bail out. Three of the mayors wanted to bail out of that mess and come down here because eventually they are going to have to face the music. They were all running Tory, too, by the way and none of them made it.
They are $133 million in debt as of 1975 -- the end of 1975. The whole region suffers continuously as a result of the policies of the government as they pertain to assessment. I am sure you have seen some of the reports of Dale Richmond, who is now working for Metro Toronto; he indicated that the problems confronting residential taxpayers in the Sudbury area of course can be attributed to the government of Ontario because of the manner in which they have assessed the mining industry over the years. And the situation is going to get worse. I don’t know of any city of that size where the taxes to the residents are any higher and the kindness of the government to the industry is so obvious.
I gathered the assessment figures for Inco and Falconbridge to the end of 1975, and they are rather interesting. I want to put them on the record. Falconbridge’s investment, in the Sudbury area, must be worth in the neighbourhood of $250 million or $300 million, I guess, and I am sure Inco’s investment in the Sudbury area must be worth in the neighbourhood of $1.5 billion.
Mr. Shore: Big figures for you, Elie.
Mr. Martel: You are right. I have them in front of me, otherwise I will forget them.
Mr. Shore: Did somebody tell you where the zero was?
Mr. Martel: Indeed somebody told me where the zero was. In fact, they told me how to read them.
Mr. Reid: It couldn’t have been anybody in your party.
Mr. Martel: Well, it certainly wasn’t the Liberal leader.
Mr. Mackenzie: One up on the Liberals, that’s for sure.
Mr. Reid: I am sorry I said it, Mr. Chairman. Would you keep him on topic?
Mr. Martel: In the last couple of weeks -- I think you will enjoy this, Mr. Chairman -- with the shift in positions by the Liberal Party from the time of the Throne Speech to the present, and as that party’s leader, the member for Hamilton West (Mr. S. Smith) changes his position, I have come to the conclusion that he has more positions than Masters and Johnson.
Mr. Shore: That was funny the first time around.
Mr. Martel: He has never been in the same position twice.
Mr. Reid: Elie, you’ll never top “Dracula looking after the blood bank.”
Mr. Martel: I want to tell you, you’ve got more positions these days than Masters and Johnson.
An hon. member: I don’t understand what’s funny about that.
Mr. Martel: You don’t understand? I’ll tell you after.
Getting back to Inco and Falconbridge, dear old Falconbridge is the country cousin up there. In Nickel Centre their realty assessment is $2,671,000 and their business assessment is $1,456,000 -- I am rounding these off -- for a total assessment in Nickel Centre of $4,127,000. In Valley East they have $35,000 in realty assessment and no business assessment. In the town of Walden they have realty assessment of $108,000, and business assessment of $64,000, for a total of $172,000. And in Onaping Falls they have $10,628,000 in realty assessment and $6,376,000 in business assessment, for a total of roughly $17 million. Total realty assessment is $13,437,000 and total business assessment is $7,897,000, for a total of roughly $21,335,000.
That’s little old Falconbridge. Inco does better. Inco is a small company; its profits aren’t too much -- a couple of years ago they were $300 million for one year and predominantly from the Sudbury area. I can’t recall a time, since I worked at Inco in 1955, that they have gone under $100 million, except one year when it was $86 million. They struggle; I mean, they really struggle --
Mr. Shore: Are you on a sabbatical from there?
Mr. Martel: Yes. I am on a sabbatical, yes -- a long-term sabbatical.
Mr. Bounsall: Profits have been up ever since he left.
Mr. Mackenzie: He’s not going to be replaced by any Liberal anyway.
Mr. Martel: The intriguing thing about poor old Inco -- they are not very well heeled either -- is that in Nickel Centre they have $459,000 in realty assessment and $175,000 in business assessment; in Onaping Falls, $1,279,000 in realty assessment and $763,000 in business assessment, for a total of roughly $2 million; in Valley East, $184,000 in realty assessment and $109,000 in business assessment, for a total of $294,000; in the city of Sudbury, which includes Copper Cliff -- and, of course, that is why everyone in the Sudbury basin went along with regional government -- $47,665,000 in realty assessment and $28 million in business assessment, for a total of $75 million; Walden, realty assessment $11 million; business assessment $5,659,000; for a total of $16,969,000. Total realty assessment $60,898,000; business assessment $34,876,000; total assessment $95 million.
Inco in the Sudbury basin has to be worth $1.5 billion, but the Smith committee couldn’t come to a satisfactory conclusion on how we get some of that largesse back into the city. They suggested that most of it be pumped down here, with a little dispersed in the city, a little dispersed in the regional municipality. At the end of three years, the region alone was $133 million in the red. Yet money was coming out of the Sudbury area like you wouldn’t believe.
Two years ago the profit of Inco alone was over $300 million. This means that in reality it was well over $500 million. Because of the tax games that are played in the mining industry -- for example you write a third off the top annually and things like that -- you reduce it very quickly. Although the mining industry says it is paying 72 per cent, they never tell you 72 per cent of what. That’s the important thing. Seventy-two per cent sounds great, except that it is about 72 per cent of maybe 30 per cent -- and then it comes down to the real world. In the process of making all those long green ones, the Sudbury region in fact has been pillaged, ravaged.
This year, part of the city of Sudbury is still trying to get sewers and water -- the city proper, not the outlying areas. There are areas which are within the regional municipality -- such as Valley East which has 20,000 people -- in this day and age they are trying to get sewers and water. We don’t talk about day care that frequently in the north; we talk about such mundane things as sewers and water. You people down here worry about day care. We worry about sewers and water and street lighting and streets.
The reason is that in the Sudbury area you do not assess it adequately, nor do you assess the underground operation. There’s a city underground. I am not sure anyone over there realizes it. There is machinery, the whole business, underground, and we don’t get a lick of that -- none.
Mr. Chairman: I must remind the hon. member that we have reached the time for the private members’ hour.
Hon. Mr. Welch moved that the committee rise and report.
Motion agreed to.
The House resumed, Mr. Speaker in the chair.
Mr. Chairman: Mr. Speaker, the committee of supply begs to report one resolution and asks for leave to sit again.
Report agreed to.
PRIVATE MEMBERS’ HOUR: NOTICE OF MOTION NO. 3
Clerk of the House: Private member’s notice of motion No. 3, Mr. di Santo.
Resolution: That, in the opinion of this House, it now being eight years since the Smith committee on taxation reported, a select committee of the House should be appointed with power to sit when the House is not in session, to study ways of reforming the tax system of Ontario to make it fairer and, without limiting the generality of the foregoing, to examine in particular: (1) the burden of local and regional taxation on the homeowner; (2) new sources of revenue for local and regional government, including sharing of income tax, corporation tax, sales tax and resources taxes; (3) alternative methods of financing education costs; (4) ways of preventing a significant shift in the relative burdens borne by different categories of property taxpayers as a result of the coming change to assessment based on market value.
Mr. Speaker: Mr. di Santo moves resolution No. 3. The hon. member.
Mr. di Santo: We are discussing today the resolution calling for a new study of the Ontario tax system, a resolution that I had the honour of introducing, seconded by my colleague, the member for Beaches-Woodbine (Ms. Bryden).
My resolution stems from two factors. The first is related to the fact that eight years after the Smith committee report, we still have in Ontario a regressive tax system which puts the heaviest tax burden on homeowners and on low income groups. Secondly, my resolution is generated by the ominous consequences of this government’s decision in the financing of municipalities and of the school boards. As a result of the reduction of provincial grants to local governments this government is penalizing homeowners and the low income groups beyond logic, let alone justice and equity.
In 1976, in Metro Toronto, the average property tax will be close to $1,000, of which 50 to 60 per cent will go towards education expenses. That means that a pensioner with $269 a month will pay almost a third of his pension for property tax. And if you also consider the increase in hydro, heating and water rates, you will see what this government is doing to the well-being of thousands of pensioners and members of low-income groups who have been struggling for years to own a house. They now find themselves in a position of not being able to keep it, by decision of the Davis government. They are being denied the right to live in dignity.
There is no equity; there is no justice; there is no progressiveness; there is no rationality; there is no common sense in the present tax system. If you consider that when a worker retires with a dramatic drop in his income and when he has no children in the school system, this government forces him to continue to pay the same amount of property tax he paid before, and the tax credit he gets back next year does not eliminate the regressiveness of the tax entirely, then you will realize once again that this government is hitting the most vulnerable part of our population.
Within the same tax system, which we do not accept in principle, there is an insane logic at which any person with a normal mind is appalled. In Metro Toronto, for example, those people living downtown in an average house assessed at $5,000, in 1976 will most likely pay $690. That’s a big jump from the $625 paid last year, according to the Toronto Star figures. An average house in the boroughs, assessed at $7,500, will pay about $1,000, compared to $850 last year. But what is even more frightening is that the recent government decision to reduce its share of money to local governments will most likely become a trend towards dramatic property tax increases every year.
I also want to mention education funds, because the Province of Ontario is among the most backward provinces in Canada in relieving property of education tax. Last year, the government of Nova Scotia announced that it would join Alberta, New Brunswick and Prince Edward Island in paying the full cost of education, minus capital expenses.
In Manitoba, the entire municipal financing system has been reformed. Manitoba was the first jurisdiction in Canada to let the cities share in personal and corporate income taxes in 1973. Last year the New Democratic government of that province decided to give the municipalities two per cent of its personal and one per cent of its corporate income tax revenues with no strings attached. Nothing of that in Ontario.
After some timid steps in terms of tax credit this year to offset regressive taxes the Treasurer is proposing nothing but a royal commission to study belated reform of the property tax in Ontario. The major focus will be a change in assessment to relate it to market value of properties. Because of the vague terms of reference and the obvious and justified doubts that the idea casts in all our minds, I would say that we do not trust this government.
It is suspicious that the government decides to appoint a royal commission at the very moment when it is dumping on the municipalities and school boards -- and then on the citizens -- a substantially heavier tax burden. It is suspicious that the government, in its terms of reference, does not even mention the fact that we should find a more appropriate way of having people pay according to their ability rather than because they own a house.
It is suspicious that this government does not even suggest the possibility of working out a different formula of financing cities and schools, namely income tax, commercial tax and corporation tax. For these reasons, we are proposing that a select committee of this House should study ways of reforming the tax system of Ontario to make it fairer.
As a parliamentarian, I believe that the ultimate responsibility of legislating for the people of this province lies with the Legislature. We, the elected representatives of the people of Ontario, have the right and the duty to make laws and, therefore, to set up an equitable tax system which is probably one of the most important ways of influencing the lives of our citizens by legislative means.
A select committee, with open hearings for all concerned citizens and with the authority behind it of the people of Ontario, will be not only the most logical but also the most efficient means of testing the pulse of the province in such an important matter as taxation. Finally, it will be the most adequate vehicle to convey to this House an accurate picture of the reactions of the province.
Mr. Breithaupt: Mr. Speaker, I am pleased to rise in support of the resolution which has been proposed by the member for Downsview (Mr. di Santo) and which would call for the reforming of the tax system in Ontario to make it certainly more fair and more equitable. The eight years that have passed since those volumes on Ontario’s finances were received by this Legislature have passed, indeed, very quickly. The chairman of the committee, by whose name the report became known, was certainly knowledgeable; he had the support of staff and had, indeed, a broad and detailed knowledge of taxation matters within this province.
In the summer of 1968 a select committee of this Legislature travelled across Ontario to hear from many groups about their views on the recommendations of the Smith report, and, as well, their views on taxation matters generally. Indeed, the member for Welland-Thorold (Mr. Swart), as I recall, appeared before the select committee when he was the reeve of his township and gave a presentation dealing particularly with matters of municipal finance, in which of course he is quite knowledgeable.
Since that select committee was appointed, only eight years ago, we have had two general elections within Ontario. The result is that now only six of the 13 members who served on that select committee continue as members of this Legislature.
Mr. Worton: That doesn’t speak well for the report then.
Mr. Breithaupt: Well, my colleague suggests that it doesn’t speak too well for the report. But three of the four government members who survive are now in the cabinet -- the Minister of Revenue (Mr. Meen), the Minister of Agriculture and Food (Mr. W. Newman) and the Minister of Transportation and Communications (Mr. Snow). The fourth Conservative member who had the experience of being on that committee is the chief government whip, the member for Mississauga South (Mr. Kennedy). In addition, the member for Lakeshore (Mr. Lawlor) and I had the pleasure of being on that committee. Neither he nor I, I think, has prospered as have the other four of our colleagues surviving from that committee. But of course, hope does spring eternal.
Mr. Hodgson: You are House leader.
Mr. Breithaupt: I don’t know if that’s a punishment or it’s a benefit, but it’s certainly an enjoyable experience, as has been mentioned. However, not only has the Legislature changed -- of which that is an example -- but certainly the Province of Ontario has changed substantially in those past eight years.
The finances in the years following our national centennial, those late 1960s, were indeed much different from what they are today. There was no talk of deficits in those days. There was no thought of cutbacks. The general theme was, as I recall, “Good government deserves your support,” and of course, the people of the province responded with massive majorities in favour of the present and continuing government.
There was really no thought or consideration that the financial problems which we now face were on the horizon, or even considered, back in those late 1960s. However, when the present Premier (Mr. Davis), the member then for Peel North and now for Brampton, became the leader of the government, we saw a change, coincidental I trust, in the financial picture of the province. We have seen, since those days, a series of deficits, and indeed, they have continued apace for the past five years.
The budget in 1967 was, as I recall, something less than $2 billion. Now, it is six times as large, and indeed the deficit this year, as the deficit last year, approaches that basic $2 billion figure. So the times certainly have changed, and I believe that Ontario needs to look again at the recommendations that were in the Smith report. Using it as a base, we must review the changes in our society that have taken place since, and we certainly must attempt to come to grips with them.
As a new member after the 1967 election, I was certainly pleased to be named to the select committee on taxation. With a master’s degree in economies before I had begun my studies in law, I thought that I would have a relatively easy time in a generally familiar area, as we discussed taxation within Ontario.
I was, of course, quite wrong. I finished up knowing much more about taxation in Ontario than perhaps I really wanted to know. But the end result, I hope, was an educational process, not only for me but also for the other members who had the benefit of being members of that committee.
It was an excellent and most worthwhile experience, and I certainly believe that the study made by the select committee on taxation was a serious and valuable one. I believe it was generally a non-partisan one, as all of the members attempted to come to grips with the problems of taxation and financial matters, and to bring a balanced view to the problems and the concerns that face us all as residents of Ontario.
Therefore, I do support this resolution. I might not necessarily agree with each of the four particulars or their thrust as we are dealing with studies in the matters of taxation but they are certainly, of course, examples which, in the view of the member for Downsview, are especially worthy of consideration.
On principle, though, the resolution does merit support and I have no qualms in supporting it. Indeed, we must continuously reform our tax system in every particular in Ontario; we must make it more fair and more equitable. If a select committee of this Legislature were to be created to study this interesting and complex subject, it could certainly do the people of our province a great service as we look toward the tasks and responsibilities of government in this province in the next decade.
Mr. Williams: Mr. Speaker, I would have to vote, with respect, against the resolution which has been put forward in the House today. In my view the arguments given for support of the resolution can be discredited on the basis of an analysis of what has transpired since the Smith report came down eight years ago, as has been stated. In light of what has transpired since this resolution came on the order paper in the form of the presentation of the provincial budget, I think both of these matters warrant consideration and, as such, I think would indicate justification for having non-confidence in this type of resolution.
I think the motion we have before us implies that the government took no action during the long eight-year period with regard to the recommendations which came forward from what is now commonly known as the Smith committee report. I would remind the hon. member for Downsview that the Conservative government of the day saw much wisdom in many of the recommendations which emanated from that report and as a result did act upon those basic recommendations.
One, of course, and the major thrust of that report, was to deal with equalization of assessment and assessment on market value basis. The province was quick to recognize the validity of this and found that there was no way this could be undertaken and accomplished without moving the area of responsibility from the local municipalities to the province. The province was quick to respond to that situation. If there was going to be universal application of assessment -- an equalization -- it would have to be handled on a universal basis. As such, it was proper that the province would move into the field which had previously been reserved to the municipalities.
Accordingly, in 1969, the legislation was introduced by way of an amendment to the Assessment Act whereby the province did move into this sphere. As members now know we have the province totally in command and in charge of this situation with the regional assessment offices working actively to introduce -- not now or in 1977 but in 1978 -- fair market evaluation based on universal provincial application of criteria laid down at the provincial level.
Of course, too, there was recognition of inequities which existed at that time and the need to provide assistance to people who were least able to afford the cost of taxation on real property they owned or had an interest in. Consequently, the government of that day moved quickly to introduce the recommendation -- one of the main recommendations of the Smith report -- which dealt with the basic shelter exemption proposals. The government did introduce such legislation almost immediately after that recommendation was tabled.
It turned out in practice to be regressive. After it had been in place for a period, I think, of two years, possibly three at the outside, the government realized that it was proving to be a regressive form of relief because those who needed the support the most by way of relief from taxation were not necessarily deriving the benefits therefrom. They moved, therefore, from the basic shelter exemption formula to the present tax credit system that we have in Ontario, which is now much more equitable and fair in that it does assist those who need the greatest assistance.
The government has responded down through that period of time to some of the basic recommendations and needs as enunciated in that report. I suggest this resolution is one that has been introduced prematurely in the light of the very significant comments made in the budget that was presented by the Treasurer (Mr. McKeough) a few short days ago.
I draw to the attention of the members of the House that portion of the budget which refers to the area in which there will be activity with regard to the relationship between provincial and local governments. At that time, the hon. minister pointed out that under the budget paper E the government is advancing proposals on how the property tax structure can be reformed to accommodate reassessed property values. It was indicated that a commission will be set up, comprised of people knowledgeable in municipal and education finance, who will review the 15 very substantive and significant recommendations that are proposed in budget paper E. This, in effect, really pulls the rug out from under all of the criticisms that are really incorporated into the four specific charges or suggestions, if you will, that are contained in the resolution.
Coming specifically to those points, Mr. Speaker, it is suggested that if such a committee as proposed in the resolution was set up they would have to find ways and means of changing the burden of local and regional taxation on the homeowner. Of course, perhaps the most significant recommendation of the 15 contained in budget paper E is the one that will do this very thing and shift the burden of taxation from the residential to the industrial and commercial sectors of land use, so that the taxation factor would be reduced from 100 per cent of market value to 50 per cent of market value, with the 100 per cent being retained and applied only against all other forms of property, other than residential.
In addition thereto, of course, there would be the additional 50 per cent business tax imposed on top of the commercial and industrial properties within which there was some form of business activity being carried on. A very significant shift in the burden of taxation would be taking place as a result of that one recommendation alone out of the 15.
As we go through the budget paper, there were other suggestions or criticisms implied in the four areas -- where it was implied that no activity or action is being taken. But these recommendations, I think, respond very positively to these points.
As far as new sources of revenue for local and regional government are concerned, the budget paper again is very specific in providing that there will be two new major areas of revenues from real property taxation and that is in the area of farming and managed forests. As well, of course, there is the very significant area of what has heretofore been exempted property. It is in this area that very significant tax means will be made by the municipalities if the commission that is set up endorses and reinforces these proposals as presented in the Treasurer’s budget paper E. Here, also, there is a responsible response to the specific item two as to areas in which the tax system should be considered and reassessed.
With regard to alternative methods of financing education costs, which is the third specific area that the resolution asks the government to look at -- or a committee, should it be so set up -- I don’t know exactly what the mover and seconder of the motion have in mind with regard to this, other than for the province to pay the total carrying charge. As is well known, they are presently bearing not less than 60 per cent of that burden now by way of outright grants to the municipalities to support them in their educational endeavours. Unless they are simply proposing that the province assume the responsibility to the extent of 100 per cent, I don’t know what other alternative the hon. member for Downsview (Mr. di Santo) may be proposing.
The fourth proposal, ways of preventing a significant shift in the relative burdens borne by different categories of property taxpayers as a result of the coming change in assessment based on market value, again I think that the highlights of the budget paper E that I have spoken to pretty well deflate any suggestion that there are inequities that exist because of again the shift that will take place should these recommendations and proposals be essentially adopted and recommended by the commission that will be established --
Mr. Speaker: I would draw to the hon. member’s attention that his time has just about expired.
Mr. Williams: -- as stated in the paper. Consequently, it would appear that the resolution before us has proved to be premature and redundant based on the action that has been taken by the government in the past and will be taken as a result of the commission that is being established under the budget paper presented in the past two weeks.
Ms. Bryden: I rise to support the resolution which my colleague, the member for Downsview, has put forward with me as the seconder.
It is now somewhat over eight years since the last comprehensive review of the tax system was done in Ontario. The Smith committee was actually appointed in 1963 and took 4½ years and reported in 1967.
While some changes were made in the tax system following the Smith committee report and the John White select committee which studied it, it is still a fact that Ontario has a very unprogressive tax system. Too great a burden is carried by homeowners and low income groups. Too much wealth is escaping tax and that is why we are calling for a new study at this time.
A new study is extremely urgent because of the recent tax changes in the Ontario budget which have added to the regressiveness of the tax system. In particular, the 45 per cent increase in OHIP premiums and the failure of the province to prevent increases in local property taxes, which will range from 10 per cent to 20 per cent this year, have increased the burden on low and middle income groups in this province.
The analysis published in the Globe and Mail on Saturday showed that in an Ontario family of four with income just above the cutoff point of $8,225 for premium assistance under OHIP, the taxpayer just above that level, will pay the highest combined income property and health taxes in Canada. In fact, on his last $1,000 of taxable income he will pay $661 in taxes, more than a millionaire pays on his last $1,000.
Using the provincial Treasurer’s own table in budget paper B, I was able to work out the burden of OHIP premiums on various taxpayers, even accepting the Treasurer’s assumption that employers will continue to pay 88 per cent of employees’ premiums, which is quite an assumption of which we are not sure. Recognizing that such payments become a taxable benefit to employees -- this is a fact that is often forgotten -- the resulting burden works out to 1.53 per cent of gross income for a family with a $9,000 income; 1.05 per cent for a family making $15,000, and only 0.67 per cent for a family making $30,000. That’s a truly regressive tax.
A new study of the tax system is needed now because the average family cannot take on any greater burden of taxation today. Their standard of living is already being threatened by huge increases in energy prices, mortgage interest, rent, insurance, service fees, food and just about everything they buy. In many cases, wages are not keeping up with these increases. On the other hand, there is much evidence that those who are benefitting from inflation are not paying their fair share of taxes, if one looks around at the high living of the jetset. A Gallup Poll just a year ago showed that 66 per cent of Canadians thought taxes were too high, but in Ontario it was 68 per cent. That underlines the need for a study of the system.
A study is also needed at this time because the small degree of tax reform which came after the Carter commission is being eroded year by year as the federal and provincial governments both continue to grant new tax concessions and establish new havens for tax dollars. The RRSPs and RHOSPs and interspousal transfers of benefits from these are being used by the well-to-do as prime devices for dodging taxes. Too generous capital cost write-offs have also opened loopholes for people who can afford to buy airplanes and lease them back to Air Canada. Many companies are still able to defer taxes indefinitely by fast-write-off concessions.
The Ontario government goes along with these loopholes in the income tax. It goes along with them even in the corporate tax held where it has its own collection machinery and could vary the rules almost instantly. When it does vary the rules, it more often lightens the burden on the corporations instead of increasing it. In fact, Ontario’s take from corporations as a percentage of total provincial revenue has gone down in the past 11 years from 17.5 per cent to 10.4 per cent.
In addition, corporations are enjoying a $220-million rebate of sales tax on production machinery and equipment this year. There was a promise in the Speech from the Throne of a reduction in mining taxes, yet our take from the mine profits tax was less than one per cent of total provincial revenues last year. We got an estimated $102 million on mineral production of over $2.3 billion last year.
Our take from the land speculation tax is laughable; a mere $4 million is expected this year. No wonder it doesn’t bring in any money when exemptions are granted so widely. For example, it was reported recently in the press that foreign-controlled Shell Canada got a total exemption on the purchase of $525,000 worth of land in the Sarnia area on which to build a new plant. We need a new tax study just to see what is happening with regard to exemptions under the land speculation tax and the foreign land transfer tax. The latter yielded only about $1 million in 1975.
Another area where we need a new study is an examination of the trend of death taxes in Ontario. The provincial take from transfers of wealth at death has dropped from four per cent to less than one per cent in the past 11 years. In fact, it’s actually down to 0.6 per cent of total provincial revenue. The Smith committee favoured greater use of death taxes in the interests of equity but the Ontario government has steadily reduced succession duties so that only $62 million will come from this source this year. While we support some of the succession duty liberalization measures which were designed to relieve farmers and small business from excessive duties and to help widows and orphans, we feel the cast of these improvements could have been recouped by claiming more from the bigger estates without affecting very many residents of the province. At any rate, that is another area which needs immediate study.
The tax credit system to which the member for Oriole (Mr. Williams) referred with some pride is becoming less effective as the effect of the formula -- which is rather rigid -- and inflation continue to erode its ability to offset the regressivity of the property tax. It is time for a review of the formula.
The commission which is proposed in budget paper E as a possible answer to the problems of the property tax is not even going to study the question of new sources of revenue for local governments over and above property tax. There is no reference to a sharing of income and corporation tax with local government. There is no discussion, either, of a review of the tax credit system in its terms of reference and furthermore, since it hasn’t even been set up and will not report until October, we do not really know what it is going to recommend and whether its recommendations will have an effect on reducing the regressivity of the property tax.
We can’t have a just society without a just tax system and we can’t have a tax policy without a tax philosophy. That is why we are calling for a select committee of the Legislature to do the study instead of a royal commission. We think members of the Legislature should have the opportunity to debate tax policy and arrive at a consensus before we can recommend reform. The necessary studies of existing taxes and their incidence has to be done as well but select committees can appoint research staff and commission studies as well as a royal commission.
The Smith committee recommended that there should be an ongoing study in this province of tax incidence. That is one recommendation which has not been carried out. This is another reason why we need a review at this time.
The White committee on taxation did come out with a tax philosophy. Let me read one quote from its philosophy: “The major premise on which our recommendations are found is that the combined provincial and municipal tax burden should be allocated in a manner which recognizes the ability to pay principle. It is the opinion of your committee that this requires a progressive distribution of burden.”
That is on page 5 of their report. On page 1, they state, regarding their recommendations: “The consequences of these and other recommendations will be lower property taxes, which are unquestionably regressive, with greater reliance on provincial taxes, which are more broadly based and more progressive through the whole range of income and wealth.”
Unfortunately, those consequences have not flowed from the actions of the government since the report of the White select committee.
Mr. Speaker: The hon. member has one minute.
Ms. Bryden: Thank you. Instead, we have had a reversal of what the White committee was aiming at. It is time that this was exposed and documented, and the present policy re-examined by all parties.
Ontario could lead the way in devising a tax system which is fair, which will treat people in similar circumstances in the same way and which will make it possible to redistribute income to compensate for the imperfections of the marketplace. It will not devise such a system unless we reverse present policy.
Mr. Shore: Mr. Speaker, I take this opportunity of thanking you for giving me this opportunity of speaking on our party’s behalf in relation to supporting the general principle of a review of the matters which came out of the Smith committee report. I have had an opportunity of looking at the Smith committee report, and the basic concepts they addressed themselves to are the problems of educational costs of municipalities, the problems of a fair and equitable tax base, particularly as it relates to provincial and municipal matters, and the issue of autonomy at the municipal level.
It’s very nice to say that budget paper E, as the hon. member opposite stated, addresses itself to the problems. I wish to make it very clear that budget paper E does not address itself to the real issues that this commission would do. As a matter of fact, it is rather disappointing that the government should always want to respond to something rather than be progressive -- to take an attitude of action rather than reaction.
I think that is what this item addresses itself to. If we really look at this the timing is probably very significant. Back when the commission made its report, and over the last number of years, the attitude of the Province of Ontario, particularly the Ministry of Education, was to try to adopt the principle of the select committee on education -- particularly to reach a level of 60 per cent funding for education.
After a number of years they finally reached that level across the province. In some areas it was lower, some areas it was higher, but on balance it finally reached that 60 per cent level. It took a number of years to reach that level but it only took one year to show some severe regressivity. Suddenly in this year’s budget the item of 60 per cent is going backwards. In some instances it is down to 52 per cent when it was 60 per cent last year.
It is interesting also, in relation to grants to the municipalities, that it took a number of years to increase those grants. In last year’s budget, a year ago, the increases to the municipalities through grants -- conditional and otherwise -- were 500 and some million dollars more than the year before, but suddenly this year they are only going to be $200 million more. There seems to be something basically wrong in the planning aspect, both from the provincial level and the opportunity for intelligent planning at the municipal level, when extremes like that are allowed to take place.
In relation to local autonomy and local fiscal responsibility, it is very clear in the Smith report that there should be a major thrust in the direction of holding the local community accountable and fiscally responsible -- to a great extent you cannot be accountable without being fiscally responsible at the same time -- but it is improper, poor planning and poor management to expect municipalities to try to be accountable to their communities when they have to go begging to the province each year for handouts. It may be wise and intelligent on behalf of the provincial government to plan themselves that way, although I question it, but it certainly doesn’t lead to intelligent priority setting at the municipal level to have to do it that way.
Therefore, I think there is all kinds of evidence to suggest that a proper select committee be restructured to study this province’s success in the future, it is the relationship between the province and its municipalities. There is nothing anywhere, as the finance critic of the NDP has suggested, in budget paper E or any other submission where the government has stated it is going to address itself to this whole matter of municipal-provincial relations. I think this is a golden opportunity to do it, if we truly believe we want to have a partnership. I think the way to start is to draw attention through the select committee, to the inequities and not to wait each year to see what the situation might be.
Mr. Gregory: Mr. Speaker, I rise in support of the resolution by the member for Downsview, but probably for an entirely different set of reasons than he gives. You wouldn’t want me to agree entirely with you?
I feel the Smith report recommendation of setting up a committee to investigate new ways of taxation is excellent. I think any government which does not continuously do this or purposely avoids it should perhaps do some investigations on its motives. I don’t think this government certainly is in the position where it wishes to do this. There is always room for improvement. I don’t think we are ever going to reach a situation where we will have the totally perfect country or province where re-examination periodically is not going to be required. I think this is one of those instances.
The member for Downsview, when he proposed this resolution and gave some reasons for it, in my opinion gave many of the wrong reasons for supporting it. Certainly my reasoning will not be the same as his. The typical opposition position is that we must once again go after that old chestnut of taxing corporate profits and eliminate, almost, the high wage earner as they have done in England.
As many of you probably heard in a discussion on the radio this afternoon or at least at noon time, they have in England practically eliminated those people who provide jobs for people. They have practically put them out of business; they have put them in a position where they cannot afford to operate any more as employers. They are driving them from the country and we are having the resultant chaos in England.
I don’t believe that’s the answer. I don’t believe that property tax alone is necessarily the answer either. I believe, as he has stated, that this is a regressive tax. Naturally, that is obvious. It has to be regressive, because property taxes go up but the earning power of that man does not go up to the same extent.
We are taxing the poor, the old age pensioner, people on fixed income. We are taxing them in accordance with how much they have been able to accumulate for themselves. As a free enterpriser, I somewhat resent that. Because a man has been frugal all his life and been able to acquire a property that now has considerable value is no reason why he should be taxed beyond his means. I think using the property tax as we have it today, it is very difficult not to penalize him.
My reason basically for supporting this is that I think it would give a certain degree of control upon local, municipal, board of education, and regional government spending. I think that is very important at this point. I feel that for many years -- and the member for London North touched on the point -- the provincial grants to local municipalities and to school boards have been cut back; not exactly cut back, but the percentage increases have been restrained.
I choose to think that we are not really cutting back on the needs of those communities and those councils and those boards of education so much as we are cutting back on the wants of them. This is what has got entirely out of proportion over the past few years. I noticed in the newspaper and from the minutes of a board of education meeting in the region of Peel just the other day: They had struggled with their budget and were down from $118 million to something like $112 million. They virtually settled on this and suddenly somebody found that they had made an error of $5.7 million. Imagine -- an error of $5.7 million on that budget
Mr. Warner: Sounds like the Health ministry.
Mr. Gregory: I am not debating a provincial ministry at the present time. I am debating a regional board of education, if that’s okay.
Mr. Warner: Similar.
Mr. Gregory: You usually do tend to confuse the issue. Try not to this time, all right?
Mr. Warner: We will try not to confuse you.
Mr. Gregory: That, to me, showed a degree of irresponsibility. It was suggested by the member for Downsview that he would like to see total funding of education at a provincial level, as has been done or started in some other provinces.
That’s fine, but you cannot suggest that without suggesting provincial interference in that particular function. There is just no possible way that any provincial government can give a blank cheque to a board of education, a municipal council or a regional council and not expect to have some control. The money all comes from somebody’s pocket.
Mr. Shore: You aren’t suggesting they don’t have control now, are you?
Mr. Gregory: Yes, I certainly am. I am suggesting, from experience, that they do not have the degree of control they should have. When there are errors of that sort, retired persons on pension, people on fixed incomes, are going to have to pay more property tax because somebody made an error; instead of actually knowing the full amount of the budget and cutting it down, they tailored it accordingly. That disturbs me a great deal, I can tell you.
I think it’s a great idea to set up this committee to see if we can find new ways. I have not heard any suggestion about new ways from the mover of the resolution; he is suggesting the same old ways his party has been suggesting for years. I want to hear if there are any possible new ways. I don’t know what they are; I don’t profess to know the answer, but I will support the hon. member in setting up a committee to try to find out. Maybe there is some way we can do this, but I say to the hon. member, don’t give me this old chestnut about how we are going to play the Robin Hood game again and tax the rich --
Mr. Warner: Why not?
Mr. Gregory: -- and as the member for Beaches-Woodbine has suggested, we are going to hit the old death taxes again. Whoopee! Isn’t that marvellous? Then nobody will be able to leave anything for anybody; we must pass that!
Mr. Mackenzie: You are taxing the poor.
Mr. Gregory: You come to this earth poor and you are going to return to it poor; it’s that sort of thing, that old chestnut. Maybe the hon. members opposite should try to get a new idea once in a while.
Mr. Mackenzie: We are proud of it.
Mr. Gregory: You are completely bankrupt of any new ideas.
Mr. Bounsall: Nothing is changed yet in the system!
Mr. Gregory: I will go along with this and sit on this committee with you; I would love to hear some new ideas. Maybe this committee could come up with some new ideas as to how we are going to do this, instead of these old saws that the hon. members opposite have been sawing on for years.
Mr. Renwick: Would you reconsider your position and not support us?
Mr. Warner: You’d help the wounded by giving them a rubber crutch.
Mr. Gregory: That’s the kind of remark I like to hear; I enjoy them. That’s beautiful.
As I say, I think that’s one of the things we should do. One other thing that was touched on was market value assessment, which I think is excellent, bringing everything on to a market value assessment basis. If we are going to be stuck with this real estate tax type of thing, market value assessment is the only fair way we can do it. It has been many years since anything has been done to bring it back into line. As a matter of fact, in the region of Peel, particularly the city of Mississauga, we have been on market value assessment for years; unfortunately, everything hasn’t kept pace, so we don’t know what’s happening across the province. I think there are quite a few municipalities that are not on market value assessment yet, but its to be hoped that they will all be on that very shortly. I think it is going to have a profound effect on the tax rate of people who live in less expensive housing. At the present time, it doesn’t. You are taxed on property, which I think is ridiculous. Taxing on housing is one thing, but taxing on a property is another thing entirely.
I certainly can support this resolution. I think it would be a great idea to have a look. I think anybody who doesn’t have a new look every once in a while is regressive, and certainly the Progressive Conservative Party is not regressive in any way.
Mr. Swart: Mr. Speaker, I hadn’t intended to speak on this resolution, but in view of the fact that there are five minutes left --
Mr. Mancini: Did you say “five”?
Mr. Peterson: There isn’t. You only have half of it.
Mr. Swart: -- I would like at least to reply to one or two of the comments made by the hon. member for Oriole (Mr. Williams). He is the only one who has spoken against it so far, and he said, if I heard him correctly, that it was introduced prematurely and that it’s not needed now in view of the other commission which is to be set up.
I want to say that because the other commission has been set up, it is now needed more than ever. What we need to do is take something of an impartial and all-party look at the property tax system in this province and determine for the future where are the sources from which the revenues should come to pay the expenses of the municipality. I think it is important that we start from an objective and a neutral base. I say to the member for Oriole, with the document that has been tabled, it is no longer a neutral and an objective base from which that commission will start.
It has made certain proposals, and there is no doubt in my mind, as I said a little while ago, that they are predominantly for political purposes. They can point to them, as he has, for the savings which he says they are going to make to residences which will never materialize by any objective examination of what is proposed, and yet all these proposals are made to us. I think we should start from the neutral position.
This is particularly true in a minority House. I suppose, if you have an all-party select committee sitting in a majority House, what would come out of that would probably be largely government policy. I suggest that most of us in any of the parties don’t have any vested interest in this. We want to see, as a member of the Liberal Party said, a system that is a partnership between municipalities and the government, where the municipalities know where they are going in financing local government from one year to the next instead of what happened this year. We do need this all-party select committee to take a look at the taxation system, particularly the municipal taxation system.
My final words are that even as of 1974 Ontario had the second highest property taxation per capita, according to the Canadian Tax Foundation, of any of the provinces in Canada. I think this year Ontario is going to make it first. I think that in itself is reason for having the commission.
Mr. Peterson: Mr. Speaker, I didn’t intend to speak on this, and my apparel is no disrespect for you, sir, as I wasn’t planning to speak. But I would just like to speak in favour of this motion because I think it is very important. It has been eight years since the last review, according to my understanding, and I think that is far too long a time at a time when government expenditures have grown at such a fantastic and uncontemplated rate. As we are looking for more ways to finance equitably the great services the government is providing today, I think we have to re-examine the philosophy. It has been said by smarter people than I that if you want to find out what a government is about, look at the budget, and if you want to find out what they really care for and where their priorities are, you have to look at their system of taxation. I am not at all convinced that we are raising our revenue in this province the right way at this present time.
There is just one other brief comment I have and I would like to say this. I’m very concerned that, generally in this province, there are two major ways of raising taxation through the property tax, which really accounts for two levels of spending -- municipal taxation as well as the education tax. It seems to me we are going to have to look very hard at bringing more accountability of the politician -- I’m talking about the school trustee who spends that dollar -- and making the electorate aware of which politician spends that dollar.
I think we have the same type of confusion in some respects with one tax form, even though federal and provincial taxes are on that form. I think there is a lot of confusion in a lot of people’s minds about which politician is spending that money. When we are making more and more demands on the taxpayer and on his purse, I think that that politician who is prepared to stand up and spend his money has to stand squarely and clearly accountable to that taxpayer, and there should be absolutely no misunderstanding about who is doing it. Thank you, Mr. Speaker, for allowing me to have a word.
Mr. Speaker: This concludes this order of business.
Hon. Mr. MacBeth moved the adjournment of the House.
Motion agreed to.
The House adjourned at 6 o’clock, p.m.