The House resumed at 8 p.m.
Mr. Nixon: Would you care to introduce our guests, Mr. Speaker?
Mr. Speaker: I’d love to, but I can’t.
Mr. Nixon: You’ve got unanimous consent.
LAND TRANSFER TAX AMENDMENT ACT (CONCLUDED)
Resumption of the adjourned debate on the motion for second reading of Bill 13, An Act to amend The Land Transfer Tax Act.
Mr. Speaker: Do any other hon. members wish to speak to this bill?
Mr. Cassidy: Mr. Speaker --
Mr. Nixon: Oh, it is going to be one of those evenings.
Mr. Cassidy: I beg your pardon; did the member for Sarnia have some more comments to make?
Mr. Blundy: No, I didn’t.
Mr. Nixon: Ah, the people in the gallery are in for a big treat.
Mr. Cassidy: May I say to the member for Sarnia, through you, Mr. Speaker, that it is a pleasure to see a Liberal critic taking his duties seriously in this House and coming forward with positions on each of the bills for which he is responsible. I wish that his performance was emulated by some of his rather more dilettanteish colleagues within the Liberal caucus.
Mr. Nixon: We are here to listen to you. What heavier duty could we assume?
Mr. B. Newman: Talk about gluttons for punishment.
Mr. Cassidy: The member for Brant and surrounds has been listening to me for years, Mr. Speaker. I think he’s getting a bit jaundiced because it’s summertime.
The bill we have in front of us, An Act to amend The Land Transfer Tax Act, represents a lurching away by the Treasurer, the member for Chatham-Kent (Mr. McKeough), from the pink Toryism of the Hon. John White, who was the member for London South. The 20 per cent transfer tax on non-resident purchases of apartment buildings, speculative land banks and so on is rescinded in this bill and the only place where special treatment will continue to apply is on non-resident purchases of recreation land and of farmland.
I have to say that for all of the inadequacies of this particular bill we felt that the principle when it was proposed three years ago was a correct one. We were very upset over the loopholes that were built into the bill at that time. We remain upset at the loopholes that exist in the bill; they are so large the bill is largely ineffective. We feel, however, that now is not the time and this is not the way to take action on this particular tax.
Effectively what we have now is a bill which was designed to protect a re-emergence of the speculative fever which hit our cities in the last five years being weakened to become a bill which only protects recreation land and certain forms of farmland and nothing more.
When this bill originally came forward three years ago there was a lengthy debate. At that time we did say that we were disturbed by the loopholes which existed and which might allow, we suggested, a foreign investor to acquire control in an indirect way of a Canadian company and, therefore, to evade the tax. I suggest that people in the real estate industry could offer many examples of cases where sham deals have been put forward in order to permit non-resident investment in residential real estate, or other kinds of real estate, in our cities, in contravention of the spirit of this particular bill.
The way to handle that though, Mr. Speaker, was to block up those loopholes -- and there are means, affidavits and that kind of thing, to block up those loopholes -- rather than simply open them wide as the government is now doing. I think there is a fallacy involved with this particular piece of legislation.
Mr. Roy: The biggest fallacy is you, Cassidy.
Mr. Cassidy: The fallacy is that somehow the importation of funds from abroad -- whether from Hong Kong, or from Pittsburgh, or from Dusseldorf, or wherever -- is somehow a cure, or an answer, or a response to problems that we may have in the supply of housing here in Canada.
If the minister was more able, she would come forward with the following defence of this particular piece of legislation. She would talk about the procedure by which developers build a building and look around for a buyer. She would suggest that there is a lack of entrepreneurship on the part of Canadian capitalists and therefore we require capitalists from other jurisdictions to come into the Ontario market in order to buy up real estate and, therefore, free up the developers to build more buildings.
Surely, Mr. Speaker, that raises some very important questions about the nature of those questing, venturing capitalists, those free enterprisers whom the Conservative Party is so proud to protect. Why is it that they’re not prepared, apparently, to take advantage of opportunities being made for them and why aren’t they getting into this particular land market? Why is it that this government is so bankrupt in its housing policies and its development policies that it seems to be able to rely only on foreign capital coming in, in order to bail us out for things which the Ontario corporate sector is not prepared, apparently, to do? I just think the whole thing is a bunch of nonsense; I think it’s all a bunch of nonsense.
Mr. Pope: There’s no need for self-criticism.
Mr. Turner: That makes it a good bill then. We were just thinking that.
Mr. Cassidy: What we worry about in this party is the fact that over the years of the early 1970s there was a steady and persistent process by which the heart of our cities was being bought up by foreign interests, just as inexorably as Canadian industry has been bought up or taken over by foreign interests from other countries. It was getting to the point where you couldn’t work for a Canadian entrepreneur, you couldn’t buy Canadian products, and you couldn’t even live in a dwelling which had been erected or which was owned by your fellow Canadians. I, for one, tend to think that it would be nice if we could keep our class wars, if we could keep the conflict between the interests of owners and tenants, sellers and buyers, entrepreneurs and workers, and that kind of thing here, in a domestic situation rather than constantly being subjected to pressures which come from abroad.
Mr. Roy: Yes, but you are always inflaming the situation. You have called every landlord a villain.
Mr. Cassidy: No I haven’t, as a matter of fact.
Mr. Roy: Yes you have.
Mr. Cassidy: But I’ll call one landlord a villain. I’ll talk about Metropolitan Trust, which is a German-controlled company and which has been guilty, I would suggest, of really scandalous practices in terms of kicking families out of various dwellings that it’s had here in the Toronto area. As far as their operations are concerned they’re perfectly all right; it’s just that they don’t happen to like people with kids. If they operated out of their own country they would have to work under a regime where they would be obliged to accept a tenant who happened to have children, but here in this country they come in and they ignore human decency. It’s easy to do that when you’re 3,000 miles away.
Mr. Wildman: Subversion, we call it.
Mr. Cassidy: And they also ignore the rules that apply in their own country. They come in with an interest solely to make a profit and with absolutely no commitment to the future of our kind of living style here in this province.
Part of the aim of The Land Transfer Tax Act was to discourage the kind of continued incursion of foreign capital into the residential sector of our cities, where there was an enormous outburst of speculative fever that occurred in the early part of the 1970s. I think it’s significant that two things haven’t happened that the government might have expected to happen from this tax and a related bill, the Land Speculation Tax, which is also being watered down in the amendments we have as a consequence of this year’s budget.
The first is that the revenues accruing to the government have not jumped up as a consequence of this particular 20 per cent tax. In fact, the figures indicate quite the contrary. They indicate that the big increase in property values in 1972 and 1973 brought an increase in the land transfer tax revenue, as a result of this three-fifths of one per cent tax, but that there was virtually no effect as a result of this tax on non-resident purchases.
Here are the figures: In 1972-73, the revenues from The Land Transfer Tax Act were $29 million. In 1973-74, that is up to virtually the day that this tax was introduced, those revenues jumped by 50 per cent to $46 million. In the year that this 20 per cent tax was introduced, however, the revenues from The Land Transfer Tax Act increased by all of $2 million, or about five per cent, from $46 million to $48 million; and they have risen very gently since then to $51 million in the fiscal 1975-76 year and to an estimated $52 million in 1976-77.
It’s interesting that in 1977-78, after the withdrawal of this particular tax, the government now estimates that the land transfer tax revenues will jump by $8 million, or about 16 per cent, to a total of $60 million. In other words, the jump will be bigger in the year the tax was withdrawn than it was during the three years in which the tax was actually in force.
Does that mean that there was no purchase of real estate here by foreigners? I suggest to you that was part of the effect, and that, in itself, was probably a good thing as far as the life of our cities is concerned -- that a number of foreign investors were discouraged from putting funds in and hotting up a situation which was already difficult. I would suggest that for others -- there was lots of advice available from lawyers, accountants, real estate brokers and other people who had an interest in paving the way for foreign men to come into real estate in this country -- there was lots of advice available as to how they could bring that money into real estate here in Ontario and avoid the tax.
Of course, one of the ways that was done was by means of the exemption system which was built into the tax by the government. That was a very wide open situation. Without going into all of the details of the legislation -- I won’t even quote the actual section but I believe it’s section 16 -- any foreign investor who indicated that the company intended to develop land for industrial, commercial or for residential purposes in Ontario could get an exemption from the tax, provided they met certain conditions laid down by the Minister of Revenue. I think that during the course of this debate -- this is the first chance we’ve had to review this bill in three years -- the Minister of Revenue should give some indication of what kind of conditions were actually set down, particularly in residential development since that’s the area which I think is probably of the greatest interest and concern.
But anybody who said they would develop property could get an exemption from the 20 per cent tax, provided that they carried out those conditions. They didn’t have to pay the money and then wait to get it back when the conditions were fulfilled. They could get a deferral of the tax liability and the liability was extinguished at the time the condition was fulfilled. Because of the way these things work and the cozy kind of environment which the Tories run in this province, there has been no means of asking the government, and certainly no willing volunteering of information from the government, as to what conditions were set down and how those conditions were, in fact, fulfilled. I suspect, though, that the conditions were relatively light.
This bill might be more acceptable -- and we’re going to oppose it, as I think is clear from what I’ve been saying right now -- if the acquisition by foreign interests of speculative land holdings were to continue to be subjected to the 20 per cent tax. However, that is not the case. As I read the bill, the existing exemptions on industrial and commercial land continue. The exemption on residential land which is to be developed is being broadened into an exemption on any kind of land which is zoned residential; including, I presume, speculative land holdings in residential holding zones which are no longer Crown land but have not yet been moved forward for development by the local municipality. The only lands to which the transfer tax will continue to apply are recreational land and farm land which is currently under production.
I don’t think that’s enough protection. I believe and my party believes that if you just simply cut the land transfer tax down to those two items of recreational land and farm land, then you have left a very broad loophole, and that loophole will be exploited. It may not happen this year. It may happen next year or the year after that or the year after that; but we will find that if we let this essential piece of protection down, and if Canada and Ontario investment becomes fashionable again the way it was three or four years ago, we will suddenly see an enormous incursion of foreign money into residential investment in this province, which will have the effect of driving up the price of residential building land. It will have the effect of driving up the price of apartments. It will ultimately have an effect for which Canadian residents -- our people here, our constituents, including the constituents of the member for St. David (Mrs. Scrivener) -- will have to pay in the form of much higher rents, in the form of much higher prices for houses and in the form of much higher mortgage payments which they will have to pay for 30 or 40 years.
I, for one, have been very upset at the number of policies we have coming from the government which are designed to kind of close the stable door after the horse has fled. If I can change that analogy around, what’s happened is that the speculative investors were allowed to come in and take an enormous profit at the expense of purchasers and tenants of residential land; measures were taken three years ago which the government said would have the effect of containing that particular situation; there was a brief period of containment, but it is significant that there has been no rolling back whatsoever, either in the higher rents or in the high prices of residential property which took effect as a result of the speculation that occurred in this province, in our major cities, in the early 1970s.
What we have had instead is both the federal and the provincial government coming in to rescue, not the ordinary working Joe earning $9,000 or $10,000 a year, but middle-class, middle-income people, by giving them very substantial housing subsidies in order to buy property which they could and should have been able to afford without government assistance if this government hadn’t been asleep at the switch when the speculators were having a field day.
Now the government is making the same mistake all over again. It is reopening the door to speculators to rip off the public once again, and that means to rip off the taxpayers of this province who one way or another are liable to have to pay the bill.
Mr. Warner: Withdraw the bill or resign.
Mr. Cassidy: They are going to pay the bill because of a loss of potential revenues.
An hon. member: Shame on Margaret.
Mr. Cassidy: They are going to have to pay the price because of increasing expenditures through the provincial Ministry of Housing and through the federal ministry responsible for housing and through the federal CMHC, all to repair situations which were permitted by free enterprise governments, and which should not have been permitted had there been an adequate control of land prices and land development by government over the previous few years.
I don’t want to go into this in great detail.
Mr. Havrot: Thank God.
Mr. Cassidy: I think it is well known that the NDP believes, has believed and will continue to believe, that it’s possible to have a much more sensible process of development of land in order to ensure that it is developed in the interests of people on moderate incomes, the ordinary people of this province. We are not getting those kinds of policies from the government at this time. We are getting certain policies which have allowed certain kinds of housing to come into the hands of certain people, provided that they can be sure that their incomes are rising very rapidly over the four or five years that the subsidies will be applied to them. Beyond that period of time, they face very high costs for their housing and no assurance they will be bailed out by a continuation of those very expensive subsidies.
We have a government that on one side deplores public housing subsidies, but on the other side is prepared to give equal amounts of money to people for home purchase provided that those subsidies don’t go on indefinitely. It’s a crazy set of policies they are pursuing. What the Minister of Revenue, at the behest of the member for Chatham-Kent, is carrying out in this particular piece of legislation, Mr. Speaker, is simply to further confound a rather chaotic and nonsensical set of policies which I fear are going to get us into greater and greater difficulties if they are allowed to continue.
In opposing this bill, I want to say that the one area of the legislation we welcome is that recreational land and farm land will continue to be protected. I want to say, as well, that on a technical basis, I think the minister’s officials should look very seriously at the definition of residential land in section 1 of this particular bill. I believe that it is inconsistent with the 1974 legislation and will create enormous difficulties of interpretation which will allow high-priced tax lawyers, acting on behalf of people trying to further avoid this particular legislation, to have a field day in the courts.
As for the rest of it, we think that the minister is wrong -- she is always wrong, we know that. We think that the Treasurer is wrong, that the government is wrong --
Mr. Havrot: Everybody is out of step but you.
Mr. Cassidy: -- and we will oppose this bill. We wish the government would come forward with effective policies to ensure that our cities can grow, develop, be liveable places; and places that we own ourselves rather than places owned by foreigners.
Mr. Roy: It’s not going to be difficult for me to say a few words that will make more sense than what I’ve just heard to my left.
Mr. Cassidy: They are supporting you for leader.
Mr. Roy: And before my friends across the way get all excited, I am not about to defend them, either.
Mr. Havrot: Resign.
Mr. Cassidy: That’s Warner’s line, isn’t it?
Mr. Havrot: You be careful or I’ll walk across the floor.
Mr. Cassidy: We would leave.
Mr. Speaker: Now can we get on with the bill?
Mr. Roy: In listening to the comments of the previous member about the importance of getting this country moving, to create economic activity, to create jobs, it seems somewhat inconsistent to me that they would continue to put a burden on certain property in a bill -- a bill we shall support -- which encouraged the development of what we consider to be commercial property; and of course at the same time we felt it important that there be protection for farm and recreational land. The protection remains there, but on the economic side it seemed to us that because of this tax, coupled with the interest rate, the land speculation tax and the undue restriction on that particular tax, economic activity was stymied in this province.
Over a period of a few years, we have seen that when the economy doesn’t move, of course, it affects jobs. When you are trying to keep a proper perspective, a proper balance in what you are attempting to do, to create employment, to create economic activity, profit then is not a bad word. We in this party believe in profit, we believe in private enterprise, so that the basic principle as outlined in this particular bill is not something that is foreign to us, it is something that we can encourage.
You know you can’t have it both ways. You can’t say that you are concerned about unemployment, that you are concerned about young people not having jobs, and at the same time have a series of tax measures which to all intents and purposes discourage or are too much of a detriment to people who are prepared to get involved in economic activity in the commercial field.
Mr. Laughren: It resembles the federal programs; it’s like the federal programs.
Mr. Roy: You really can’t have it both ways.
Mr. Laughren: The federal program, eh, Albert? We know, Albert.
Mr. Roy: If something has been brought out in this election, it is the inconsistency in NDP policy; it has really been brought out. I have said this before on the political platform and I am not afraid of saying it again, the same people who are yelling about corporate bums --
Mr. Cassidy: The hon. member is consistently wrong, that’s what he is.
Mr. Roy: Those fellows over here this year were running after them for money to finance its election campaign.
Mr. Havrot: The welfare bums are on that side.
Mr. Roy: So if anything else had happened in this election, with the back-off from their policy --
Mr. Laughren: Order, order.
Mr. Cassidy: On a point of order, Mr. Speaker.
Mr. Speaker: The hon. member with a point of order.
Mr. Lawlor: A point of personal privilege.
Mr. Cassidy: I claim some expertise about the rules of relevance and debate in this particular House, and I would suggest to you, Mr. Speaker, that the hon. member is out of order and should return to the principle of the bill.
Mr. Speaker: I would also suggest that he is straying somewhat; and would he please address his remarks to this Chair.
Mr. Roy: I can say this of the member for Ottawa Centre, Mr. Speaker: The minute we start getting to him, then I am out of order.
Mr. Germa: You are always out of order.
Mr. Breaugh: Albert, comb your hair.
Mr. Laughren: Button your jacket, Albert.
Mr. Roy: The point we are trying to make is, very simply, that you can’t have it both ways. You can’t say, well, we want to keep these taxes on, we think that we should keep the speculation tax on, that we should stifle economic activity, and then be out there yelling about the unemployment problem.
Mr. Laughren: Like the federal Liberals, Albert.
Mr. Roy: I think it’s unbiased. I feel, Mr. Speaker, that the NDP or the previous speaker have been talking out of both sides of their mouths.
Mr. Havrot: That’s Alice in Wonderland.
Mr. Roy: And so we in this party, Mr. Speaker, have never been afraid to face consistent policies.
Mr. Germa: You support the flip-flop.
Mr. Laughren: Sit down while you are only losing.
Mr. Roy: That’s why we’re prepared to say, “Yes, we’re prepared to remove some of the burdens to encourage economic activity,” because if we encourage economic activity, of course, we shall create more employment. And I’m sure the members to my left -- I like having these fellows there to my left; that’s where they should be --
Mr. Laughren: Far to your left.
Mr. Young: You still believe in Santa Claus, Albert.
Mr. Roy: It seems to me that these are some of the measures that have to be taken if we’re to stimulate the economy of this province. So we have no qualms about supporting this legislation. We feel that it’s consistent.
Mr. Cassidy: I think you belong to the national capitalist elite.
Mr. Roy: At the time the legislation was brought forward we were critical of the government, because we felt that if anything is difficult in the economic situation in this province, it’s inconsistent policies on the part of the government. We felt that possibly its reaction back in the years 1973-74 was in fact an over-reaction -- and possibly the minister is prepared to admit that. There was a problem at that time, but because of the poor economic prophecies of the Treasurers the government was in fact curtailing --
Mr. Laughren: Albert, run federally.
Mr. Roy: It was curtailing economic activity with a weapon which at that time was much, much too strong.
Mr. Stokes: As I recall, you voted for it.
Mr. Roy: As I recall it it was this party, Mr. Speaker, which made the legislation workable at all. It was this party.
Mr. Stokes: Now you are admitting you were wrong.
Mr. Roy: No, we’re not admitting that, Mr. Speaker. You see, the strength of this party is that this party feels that it has responses for the situation that exists at that time. We’re not hung up on so-called principles, like the people to my left --
Mr. Stokes: You don’t have any -- you don’t have any.
Mr. Roy: Principles which you no longer have.
Mr. Lawlor: He is not hung up on principles so he wouldn’t be bothered.
Mr. Roy: You’re not even going to nationalize anything, you people.
Mr. Speaker: Order. I wonder if you could speak to the principle of the bill, please. Thank you.
Mr. Roy: Mr. Speaker, I think the point must be made that at the time that this legislation and the speculation tax Act were brought forward it was this party that made it workable.
Mr. Lawlor: Totally consistent.
Mr. Roy: And we expressed at that time a certain amount of concern. Yes, we supported the legislation because we felt that there was a problem at that time. But it seems to us that the government --
Mr. Germa: All free enterprisers.
Mr. Roy: -- the government’s role in stimulating economic activity is something that’s got to alter occasionally and the response must have some reflection to the problem that exists at that time. So we say, Mr. Speaker, that to stimulate economic activity at this time this type of legislation to us makes sense. I would hope that all members, even members who are hung up on so-called principles --
Mr. Breaugh: That has never been your problem, Albert.
Mr. Cunningham: Even the socialists.
Mr. Roy: Even the socialists would understand economic policy. You know -- understand that they’re in Canada now, that free enterprise works and that to make a profit is not a sin. This is the reason why we’re supporting this legislation.
Mr. Cassidy: Why try to prop it up then?
Mr. Havrot: If that is a few words I would hate to hear a full-fledged speech.
Mr. Cunningham: Lawlor for leader.
Mr. Lawlor: Mr. Speaker, I would be delighted if our friend had just detailed in which specific way they had made this legislation work. I don’t remember them making an iota of a contribution with respect to the debate on the matter at all -- as usual.
Mr. Roy: Of course, Patrick, you have attained an age where you forget a lot of things.
Mr. Lawlor: The original legislation, the legislation which is being altered tonight, came through in 1974. It was almost immediately completely revamped by a bill called Land Transfer Tax No. 2, which probably was more elaborate than Land Transfer Tax No. 1. The legislation as it originally came through -- there’s no need really to amend it tonight to make the provision -- the legislation as it stands on the books today is so honeycombed with exceptions, is so much ventilated with holes that anybody could practically go through.
Mr. Havrot: There is not much ventilation today, man. It is a hot night.
Mr. Lawlor: If one looks at the sections in respect to deferrals and the use of deferrals in the acquisition of all manner of land, et cetera, on resale to residents, the provisions there are, as I say, honeycombed. The definition of a non-resident corporation, and the business of the holding of shares, is flexible in the extreme. The use of unit trusts within the application of the legislation leaves much to be desired.
Apart from these masterful but minor things, I want to refer to the recommendations to the Minister of Revenue for the province, submitted by the minister’s advisory committee in July 1974. The man who headed up this inquiry was R. M. Anson-Cartwright FCA, as chairman --
Mr. Havrot: Ah, Mr. Cartwright.
Mr. Lawlor: -- with a multitude of legal talent, FAs and CAs all over the place. They found that the many things I have mentioned here today were perfectly true. But on page 2, in their address to the minister -- and, after all, this is the minister’s own committee -- they said:
“The Hon. John White made two statements in his budget speech of April 9, 1974, that are particularly relevant to this recommendation. He said first that ‘In examining the problem of rapidly rising prices for real property in Ontario, it has become increasingly apparent that large-scale acquisitions of land by non-residents of Canada is a significant factor.’ He also stated: ‘I emphasize that it is not our intention to penalize industries which seek to locate or expand in this province [nor did the legislation extant do so] although we would encourage these established companies to broaden Canadian equity participation.’”
Then, going on to the next Act: “Mr. White said: ‘There is no doubt ... speculation ... by non-residents bids up (land) prices artificially, increases the cost of housing and generates unwarranted windfall gains.’” That is with respect to this legislation and to the next bill that is coming before us.
What has changed materially or significantly in the past three years that would make those statements out of date or in any way questionable? They are as valid today as they were then, and therefore the legislation should stay in place and intact. If a corporation, if the Arabs want to buy industrial or residential land in this province, they simply have to incorporate here. It is a very simple process. On the question of the holdings, they have to diversify them over resident Canadians with respect to the share position in the corporations. It can all be manipulated and nicely arranged; there’s no great problem.
Why then add to the inflationary burden in the land field, which is precisely what the minister is doing by taking this tax off and restricting it within narrow confines. With respect to the section 16 deferral provisions, the minister retains them with respect to farm and cottage properties and perpetuates the particular inequities worked in there. The whole thing becomes threadbare, loose and of very little account. I said it didn’t have a significant impact in any of that. The minister said that the greater the impact of this legislation, the lesser the tax. But, as a matter of fact, it is beginning to rise.
This is a curious twist of the tail that we have before us tonight. Why not leave it alone? In no way, in my opinion, does it impinge upon foreign acquisitions. It is not a vital factor in the economy of this province. It does help to keep prices of land down and out of the hands of the speculators, particularly from other lands. Therefore, this is at this time -- it may not be so three years from now -- a retrograde step.
Hon. Mrs. Scrivener: Mr. Speaker, I wish to thank the members for their contributions to the debate on this bill for second reading. I was interested to note the member for Sarnia’s remarks just before the dinner recess that the Liberal Party supports the changes to the bill, and this was supported again by the member for Ottawa East.
In terms of the remarks of the member for Ottawa Centre, he argues philosophically that this is not the way to go at this time. Frankly, we say it is the way to go and we are flexible and are willing to reflect the economic requirements of the times.
Mr. Makarchuk: You are willing to give the country away. That is what you are prepared to do.
Hon. Mrs. Scrivener: He mentioned economic loopholes several times. He mentioned them in terms of loopholes existing in the present bill, and which he considers will exist in the bill as amended. He did not, however, outline what loopholes he had in mind, unless he was referring to foreign investment in land which must be protected.
I think this land will continue to be protected. Land which is recreational or agricultural in character will continue to be protected under the provisions of the bill, and it will be subjected to a very heavy rate of taxation as it is at the present time. However, with this protection, non-resident investment will not be discouraged and will be welcomed in Ontario as it relates to industrial, commercial and residential property. In other words, what I am saying to the member is that we appear to have a basic, philosophic difference of opinion.
As to loopholes which the member says will be opened if this bill is passed, he did not indicate what they are. One can only speculate. I have to say I deny his arguments --
Mr. Cassidy: One can speculate in this province now that those bills are going through.
Hon. Mrs. Scrivener: I have to say I deny his arguments concerning housing for middle-class families and the problems which will be generated. I think he paints a picture of doom and gloom which is fallacious and most unlikely in terms of what this bill will actually do in terms of creating and stimulating construction of new housing.
Mr. Cassidy: It’s happening now.
Mr. Havrot: You are just a born loser, that’s all.
Hon. Mrs. Scrivener: The member also queried the present qualifications for exemption.
Mr. Warner: You jest.
Hon. Mrs. Scrivener: Frankly, these qualifications have been so widely broadcast and are so commonly known to so many people it never occurred to me that a member of this House as well informed as the member for Ottawa East would not be familiar with them -- Ottawa Centre, I’m sorry.
Mr. Stokes: You were right the first time.
Mr. Cassidy: I thought you were doing fine.
Mr. Germa: Can you walk and chew gum at the same time?
Hon. Mrs. Scrivener: But they are based on residence. It is not necessary to be a Canadian citizen --
Mr. Roy: She is yours, not ours.
Hon. Mrs. Scrivener: -- but it is necessary to establish permanent residence within two years --
Mr. S. Smith: Wait until she says “Ottawa West”; then you are in trouble.
Hon. Mrs. Scrivener: -- and to have lived in Canada for 366 days continuously in the past two years and immediately prior to taking the land or having exemption confirmed.
Mr. Cassidy: The minister is simply unaware of the loopholes.
Mr. Acting Speaker: Order, please.
Hon. Mrs. Scrivener: The member did not outline them and frankly I wracked my brain trying to think of what he was referring to. I queried my staff and they don’t know what he is referring to, and I guess we know the bill very well.
Hon. Mr. Rhodes: And he doesn’t know what he is referring to either.
Mr. Acting Speaker: Order, please.
An hon. member: You had your say.
Mr. Cassidy: Mr. Speaker --
Mr. Acting Speaker: Order, please.
An hon. member: Sit down, you had your say.
Hon. Mrs. Scrivener: Mr. Speaker, I have to say that I consider the remarks from the member for Ottawa East -- and I apologize to him for not mentioning his constituency title correctly -- his remarks were really bang on. It’s a fact that we do want to stimulate investment --
Mr. Cassidy: Boy, they are in bed again together.
Mr. Stokes: What do you expect? He is more Tory than you are.
Hon. Mrs. Scrivener: We do want to stimulate investment in development in this province --
Mr. S. Smith: We are trying to get him to cross the floor.
Mr. Cunningham: Let’s have an Ontario senate.
Hon. Mrs. Scrivener: -- and we are convinced that this bill will have the effect of encouraging such investment at this time.
Mr. Acting Speaker: The motion is for second reading of Bill 13.
Motion agreed to.
Mr. Acting Speaker: Shall the bill be ordered for third reading?
Mr. Cassidy: No.
Some hon. members: No.
An hon. member: Shame!
Mr. Acting Speaker: Do I understand the hon. members wish to --
Mr. Cassidy: Mr. Speaker, there should be a vote on second reading, at least a voice vote. That’s why we said “no.”
Mr. Acting Speaker: The Chair called for whether the motion would pass and nobody objected.
Mr. Cassidy: Point of order, Mr. Speaker, for the record, the New Democratic Party is opposed to this bill and we did object to second reading. I put that on the record. I expect it will go into Hansard.
Mr. Havrot: Which part of it, the front part?
Mr. Acting Speaker: Shall the bill be ordered for third reading?
Some hon. members: No.
Mr. Acting Speaker: Referred to committee?
Mr. Cassidy: That’s right.
Mr. S. Smith: There are no changes.
Hon. Mrs. Scrivener: Third reading of the bill.
Mr. Cassidy: It will have to go to committee.
Mr. Acting Speaker: Order, please. As I understand the standing orders, if there’s an objection to going to third reading it should be referred to committee.
Mr. Cassidy: Exactly.
Mr. Acting Speaker: I heard objections and I would assume that the bill would be referred to the committee of the whole House.
Hon. Mrs. Scrivener: Mr. Speaker, on a point of order, I believe the objection has to be raised by 20 members.
Mr. Cunningham: What change do you have in mind there?
Mr. S. Smith: What changes are you going to make?
Mr. Cassidy: On a point of order, perhaps the hon. minister would like to cite the reference she is referring to.
Hon. Mrs. Scrivener: Mr. Speaker, it’s in the new rules under which we are operating at this time. I may move third reading of the bill; unless 20 members object to third reading, the third reading is proceeded with.
An hon. member: She’s right, you know.
Mr. Cassidy: On a point of order, Mr. Speaker, I asked the hon. minister if she could cite the specific rule which she is referring to. I think the hon. Speaker is aware of the practice of the House, which is if members wish to deal with the bill in committee of the whole, it goes to committee of the whole. It is not the right of the government to take it through to third reading without unanimous consent.
Mr. Acting Speaker: Perhaps the hon. members will allow me to confer with the Clerk to ascertain the correct ruling?
Mr. MacDonald: We have been doing this for months.
Mr. Maeck: Mr. Speaker, can I refer you to section 19?
Mr. Cassidy: Mr. Speaker, I would refer you to 47(b) and 47(c). Rule 47(b) states, “When a bill has received second reading it may, by unanimous consent, be ordered for third reading.” And you, Mr. Speaker, stated that there were objections, as there certainly were.
Rule 47(c) says, “If unanimous consent, as required by clause (b) is refused, if the bill is a government measure it will be referred to a committee of the whole House or a standing or select committee as the minister having charge of the bill designates.”
Hon. Mr. Rhodes: Exactly what she said.
Mr. Cassidy: Obviously it is at the minister’s discretion. If she wishes to have the bill sent downstairs, then that’s obviously a prerogative of the government side. But the discretion is only whether the bill goes to the committee of the whole, or whether it goes to a standing or special committee of the House.
Mr. S. Smith: Turn the page.
Mr. Acting Speaker: My interpretation of section 18 is, and I am reading from the standing orders, “When 20 members stand in their place after second reading of a bill, the bill shall be referred to a standing or select committee of the House, as the minister having charge of the bill designates.”
Mr. Deans: Mr. Speaker, if I may. Your reading of rule 18 is, of course, entirely accurate. But it refers, sir, if you will, to standing or select committees and doesn’t refer to the committee of the whole House. The prerogative, as everyone understands it, is that if the opposition members wish that the bill should go to committee of the whole House, or to a committee, the minister has the choice of any of the committees, including the committee of the whole House, but must send it to a committee.
The only time that rule 18 comes into place, sir, is if the opposition or the government backbenchers were to want the bill to go to a standing committee or a select committee. Then at that time they would require 20 members to stand in their places in order to so direct it.
I would ask you, if you would, to abide by what has been the precedent and what is the understanding and in fact what is in the rules. That it is in fact the prerogative of members to ask that the bill go to committee and it is the obligation of the minister to send the bill to committee, although the choice is up to the minister unless 20 members direct otherwise.
Mr. Roy: If I might speak on the point of order, Mr. Speaker, I think the point made by the member for Wentworth is correct, that unanimous consent is required to go on in third reading. My point simply is that my recollection of what took place in the House is that when you asked for third reading, we didn’t hear the objection by the member standing at the --
Mr. Cassidy: Oh, no.
Mr. Roy: I recall the incident very vividly --
Mr. Stokes: Stop trying to weasel. You were wrong in your interpretation of the rules. Be gracious enough to accept it.
Mr. Roy: What are you annoyed about?
Mr. Acting Speaker: Order, please. I think I ruled initially that because there was not unanimous consent, the bill should be referred to the committee of the whole House or the committee to which the minister wished to designate it.
Mr. Deans: That’s absolutely correct.
Mr. Acting Speaker: Because there had been some reference to it, I did read provisional rule 18, and it seems to me that rule, as the hon. member for Wentworth has indicated, is where it’s to be referred to a standing or select committee. This is being referred, as I understand it, to the committee of the whole House; consequently, I have ruled and abide by the ruling.
Ordered for committee of the whole House.
LAND SPECULATION TAX AMENDMENT ACT
Hon. Mrs. Scrivener moved second reading of Bill 14, An Act to amend The Land Speculation Tax Act, 1974.
Hon. Mrs. Scrivener: This bill proposes a number of important amendments designed to enforce this government’s tax policy with regard to speculative activity in real estate. Let me say, Mr. Speaker, that this government continues to oppose non-productive trading in land. However, the government also recognizes that such a policy must be carefully refined if it is not to be destructive. Accordingly, then, this bill proposes three major changes to The Land Speculation Tax Act.
Firstly, the time period for which an investment property must be held in order to be eligible for exemption from land speculation tax will be reduced from 10 years to five years. This change will make investment in apartment buildings much more attractive and will spur the construction of needed rental accommodation.
Secondly, changes are proposed to the exemption for farmers. Effective April 20, 1977, any person or his or her spouse who actively farms a farm property for 10 years -- any 10 years -- will earn a full exemption from land speculation tax for that property. This change will remove potentially onerous problems for farmers who become unable to operate their farms through age or illness but who wish to retain their land.
Thirdly, this bill will implement certain changes arising from changes to The Land Transfer Tax Act.
These changes will ease potential hardship on our farmers and will help to encourage the construction of rental accommodation. At the same time, the purpose of The Land Speculation Tax Act will continue to be fulfilled.
Mr. Blundy: I think many of the arguments that were put forth pro and con for Bill 13, which was just handled by the House, pertain in the case of Bill 14. I don’t suppose there is one member in this House whose riding has not seen the vibrant economy that we knew in development back in 1972, 1973 and 1974 fall off to a certain degree over the past few years. I think this is what we want to be able to ensure will continue or will again be the case in this province.
Under the present Act, even the Treasurer (Mr. McKeough) admits in his budget statement that a substantial pool of capital normally available to resident developers in the province has not been available. For three years now, since 1974, there has been a falling off and people wanting to invest in Ontario have been discouraged and have not been investing in property. I personally believe that the amendments that are proposed in this Land Speculation Tax Act will assist the economy of the province and the development of land for the building of residential properties, especially apartments and homes.
The farmers are, obviously, being more fairly dealt with under the amendments in this Act and I personally feel that this is a fair amendment. I believe that, basically, our party is in agreement with the amendments outlined in the Act and we will support the bill.
Mr. Cassidy: Mr. Speaker, I hope that support from the Liberal Party is for me. I doubt it.
Mr. S. Smith: It is part of the leadership campaign. You have our complete support, Mike.
Mr. Cassidy: I want to say one positive word about this bill before I say a few negative words about it. That is this. We’re prepared to go along with, in fact we welcome, the particular sections that apply to legitimate farmers who will earn a complete exemption from the land speculation tax after a period of 10 years. That seems to be a reasonable kind of thing.
When you look at the alternatives between the desire to maintain people in productive farming on the one hand and the danger of one or two people exploiting that as a loophole, frankly, we think that it’s right to err, if one errs at all, on behalf of the full-time productive farmer by ensuring that they do not become liable to this particular tax and that they earn the entire exemption over the 10-year period.
That said, as far as the rest of the tax is concerned, the comments I made about The Land Transfer Tax Act can be applied pretty much to this particular piece of legislation as well. I think it’s wrong. We think it’s wrong. We think the basis for the weakening of the tax confirms every word the member for York South said when he initially commented on the land speculation tax when it was introduced in 1974. Every word of the forecast we gave at that time has amply proved true. That’s unfortunate because it indicates just how ineffective these two taxes have been in getting some reasonable behaviour back into the housing and residential market, particularly in the province, over the past three years.
The member for Sarnia said, “Quite probably we’re going to get a vibrant economy back into our cities as the result of these two particular tax measures.” I want to remind the member for Sarnia, since he wasn’t here at that time, just what that vibrant economy was and what the conditions were in 1974. To take one index, between 1973 and 1974 we had an increase in the average price of residential property in the city of Toronto, or the Toronto region, from $35,000 a unit to $50,000 a unit. These days $35,000 doesn’t even buy you a two-bedroom town house on the outskirts of Oshawa, let alone a decent house within Metropolitan Toronto.
Mr. Roy: You can buy a house on the Island for that, Mike.
Mr. Deputy Speaker: Order, please.
Mr. Cassidy: These guys are bitter, Mr. Speaker. They really are. It’s a most incredible situation. Obviously, though, they’re harking back to 1974 when, yes, I did happen to live on the Island at a reasonable rent at that time, in accommodation which has now been condemned by the Metro chairman, and in a house which I’m afraid --
Mr. Deputy Speaker: Order, please. Will the member get back to the principle of the bill?
Mr. Cassidy: Thank you, Mr. Speaker. I just wanted to point out that the member for St. Andrew-St. Patrick (Mr. Grossman) and the member for Ottawa East, the Conservatives and the Liberals, have never lifted a finger on behalf of the 250 families on Toronto Island who were being expropriated by Metro Chairman Paul Godfrey. They have no sense of compassion --
Hon. Mr. Kerr: No wonder it was condemned.
Mr. Cassidy: -- or concern.
Mr. Pope: Your leader made a profit on his house.
Mr. Cassidy: A profit?
Mr. S. Smith: May it be recorded that the member for Ottawa Centre did lift a finger.
Mr. Cassidy: Dear me.
Mr. Roy: Mr. Speaker, I plead guilty. I have never lived on Toronto Island.
Mr. Cassidy: Okay.
Mr. Cassidy: The member for St. Andrew-St. Patrick, Mr. Speaker, has the opportunity to bring forward legislation on which there can be a vote. I challenge him to bring forward that legislation in order to ensure that the residents of Toronto Island are protected and are no longer under the thumb of Paul Godfrey and Metro council.
Mr. Deputy Speaker: Order, please.
Mr. Cassidy: Boy, that was an election promise, Mr. Speaker, of two years ago.
Mr. Deputy Speaker: Order, please.
Mr. Cassidy: It has never been fulfilled.
Mr. Deputy Speaker: Order, please. I would like to remind the member for St. Andrew-St. Patrick he should speak only from his seat. The member for Ottawa Centre.
Mr. Cassidy: Mr. Speaker, the vibrant economy that the member for Sarnia harked back to so fondly was an economy where land prices were skyrocketing by the month, where the prices of property were rising by two or three per cent per month, where rent increases of 20 and 30 per cent were common in our major cities. That’s what it means by a vibrant economy. That’s what the Liberal Party wants to restore to Ontario and that’s what the Conservative Party apparently wants to restore to Ontario as well.
Mr. Cassidy: We are getting back to precisely that situation with the legislation which is before us in The Land Speculation Tax Act. The minister and the Treasurer and the government want to do away with the land speculation tax. They want to allow foreign investors to come in en masse. They are doing away with rent review effective the end of 1978 and we will be back to exactly the same situation that occurred or that existed in 1972, 1973 and in 1974.
It seems to me that it is important for us to think back to that time and to realize what are the reasons why there has in fact been a certain cooling off in the urban economy, in construction and that kind of thing, over the years between 1974 and the present. It obviously is not because of these particular taxes. It is because there has been a difficult period of readjustment to a very rapid rise in land costs which was permitted -- in fact encouraged -- by the Conservative Party and its friends.
There was also a rise in the cost of construction materials which was created by economic situations -- cyclic economic conditions -- across North America. There was a very great increase in the cost of labour which related to the inflationary situation in which we existed. And there was a very rapid increase over that period of time in the costs of mortgages.
All of those things occurred together. They had the effect of dampening down the construction market for industrial, commercial and in particular for residential property.
Mr. Maeck: Is that what you were telling the electorate?
Mr. Cassidy: Bearing in mind that period of readjustment has now just about come to an end; bearing in mind that a number of the factors which led to that situation have pulled out; bearing in mind -- to say this to the member for Timiskaming -- that there has been a readjustment, for example, in such things as certain construction wages, certainly a readjustment of the cost of construction materials, and some flattening out in the increases in land costs, what was important was to keep the protections against speculation and against foreign investment in place against a renewal of exactly the kind of situation we had four and five years ago. Instead of which we have all the props being taken out of the protections that were around, in order to prevent a recurrence of that particular situation.
This bill provides a major bonus to people who want to speculate in land over the short term. It cuts the period of remission of the land speculation tax down from 10 per cent a year over 10 years to one and two-thirds per cent a month.
If I can take the example of somebody who has held :a property for a short period of time, say two and a half or three years, they will be liable right now to a tax of 14 per cent of the capital gain of the speculative land profit on their increase in value after three years. That tax is being cut from 14 per cent to approximately eight per cent of the overall profit.
If the profit is at all interesting, an eight per cent tax on it is not going to serve as any effective deterrent. That means apart from somebody who wants to get into a property and out within a year or so, there is no longer any effective deterrent against speculation in properties recurring the way it was occurring in the years of the early 1970s.
We think that that is wrong. We think that the government is wrong. We think that the reasons that the government has offered are also, may I say it, misleading.
Let me just read what the Treasurer had to say in his budget statement. He says, as the minister said, that the government remains committed to its policy of discouraging non-productive speculative activity. I assume that what is being permitted by this particular bill, these particular hand-outs to speculators, is productive speculative activities, and I wish that the minister would define exactly what those happen to be. Or else I would assume that the member for Chatham-Kent (Mr. McKeough), the member for St. David (Mrs. Scrivener), maybe the member for Ottawa South (Mr. Bennett), and the other economic panjandrums of the cabinet will go around the various conventions of groups, such as the association of public real estate companies, the Housing and Urban Development Association of Canada, and the Urban Development Institute, and make speeches, telling them, “Please don’t speculate. It’s nonproductive, and it’s not a good thing.”
Hon. Mr. Kerr: Invest in development.
Mr. Cassidy: That’s right. They make these speeches, but they are not willing to back up their speeches with any effective kind of action.
Hon. Mr. Kerr: So naive. Does the member think it is the OMB that is holding up development?
Mr. Cassidy: We have had a tax on land transfers which the minister said discouraged foreign investment. But then the Treasurer said in his budget that the land speculation tax required a longer than desirable commitment by non-residents who wish to buy investment properties in Ontario, that 10 years was too long for non-residents. What the Treasurer is saying, and what this minister is apparently supporting, is the view that we should encourage non-residents to come in, buy up property, and sell it and make speculative profits after three or four or five or six years, because 10 years is too long to require them to hold the property. That is precisely what is being said in this particular budget and for this particular bill.
Hon. Mr. Kerr: You probably haven’t heard of the Rent Review Board yet.
Mr. Cassidy: A substantial pool of capital normally available to resident developers has, says the Treasurer, therefore dried up. I don’t understand why it is; the province of Ontario can have a triple-A bond rating down in New York, but Ontario developers can also get a good bond rating if they want to borrow money in New York, Hong Kong or Dusseldorf. At any rate, those were the only reasons that were offered by the Treasurer for this particular change in the land speculation tax. They are fallacious, they are specious, they are hypocritical and they are wrong, and we intend to oppose this bill.
We believe it is important to keep a protection against short- and medium-term speculation. We believe it is wrong to have that kind of activity happening with apartments. It is wrong to have people buying up older homes and trying to resell them at massive profits, and it is particularly wrong to have people like former cabinet ministers and other people like that, all of the good gentry of the province, buying up semi-urban land, farm land, and that kind of land, in or around our major cities, holding it in order to make major speculative gain and not having more than a finger lifted against them by the Ontario government, effective with the passage of this Act.
Mr. Martel: Those capitalists.
Hon. Mr. Kerr: A cynical socialist speaking.
Mr. Roy: I can recall when this legislation was first brought forward and the awful mess that the legislation was in at that time. I can recall discussions on this legislation for a period of approximately a month. I can recall the Minister of Revenue, then Arthur Meen, who could not accept some of the recommendations that this party was making at the time. If you will recall, at that time the tax proposed was, I think, 50 per cent on the speculative profit, and there had been no agreement made with the federal government, with the result that if one was paying federal taxes at the rate of 50 or 60 per cent, one would end up paying something like 110 per cent on the profit. In other words more tax than there was profit.
We tried to get through to the minister, time and time again, day after day in this House. I can recall discussing this legislation with the minister and explaining to him that he was wrong, that he should have obtained the consent of the federal government at that time. I don’t like to be nasty to a member who is no longer here, but the man had no flexibility at all. In that sense, he caused an awful lot of confusion in the marketplace. The remarks we made at the time legislation was passed were borne out. In fact, the federal government disallowed the deduction that the province thought they could have under this Act, and they had to backtrack on the tax.
But I can recall during the month of debate on this legislation that we tried to make the legislation workable. This was one aspect. This was the most obvious deficiency in the legislation. But there were many others, as you will recall. And at that time we in this party -- and I can recall my colleagues Singer, Bullbrook and others -- were talking on this legislation to try to make it a workable piece of legislation.
But as I said earlier, I felt that the combination of government controls -- and this is another piece of government control -- that along with the increase in the interests rates and with the other land transfer tax was a blow that was too hard to the economy of this province. In fact, what it did do is stifle the economy of the province with the resulting unemployment that we have here today.
Now the member for Ottawa Centre has, as usual, misconstrued the remark from my colleague from Sarnia. We at no time, nor did he at any time, suggest that we’re prepared to accept the type of inflation which existed on real property during that period of time.
Mr. Cassidy: That’s what they called for.
Mr. Roy: I find it highly improper that he would misconstrue these comments and I find it typical of that member that when he talks about speculative property he doesn’t mention the profit made by his own leader on a piece of property.
Mr. Cassidy: How much did you get for your house?
Hon. Mr. Rhodes: What about your house?
Mr. MacDonald: How much did you get for your house?
Mr. Roy: I only mention that point, not out of criticism of his leader -- he’s entitled to a profit.
Mr. Cassidy: The member is as phoney as a $3 bill.
Mr. Havrot: “Profit” is a dirty word.
Mr. Roy: To us a profit is not sinning. You know, that’s where we’re different to the party over there. Profit to us is not a sin. We feel that in a private enterprise system, profit is what drives the economy; this is what creates jobs. And these people are against unemployment, they say.
Mr. Roy: I say it’s somewhat fallacious and I find it somewhat cynical that certain members should get up in the House and talk about speculators as though they are a bunch of villains across this province.
Mr. Martel: Parasites.
Mr. Roy: Some are, some are. But you’d best be careful that you should not be so selective when you’re talking about certain people speculating on land. What we’re saying in supporting this legislation now is that there are enough controls. People who want to get involved in the economic activity of this province are what this country’s all about. Once economic activity is created this affects a lot of people involved in the construction of apartment buildings; these represent their retirement plans. Often this is their only investment, the purchase and selling of a particular type of property. And we don’t feel that there is anything wrong in that sort of thing. The speculation that we were after in 1973 and 1974 was, in fact, speculation on raw land where people were buying land, keeping it for a month or two and selling it at speculative profits.
Mr. Cassidy: What a sellout, what a sellout.
Mr. Roy: This is what we were against. We were against, for instance, certain buyers who would buy from large developers, keep the property for six months or so and then sell at a profit.
Mr. Cassidy: If only the poor people of Ottawa East could see this statement -- boy!
Mr. Roy: This type of thing, we say, is still protected under this legislation.
Mr. Cassidy: The member voting against the interest of his constituents.
Mr. Roy: But what we’re basically saying -- and this is where I find the cynicism of the NDP argument -- is that they are --
Mr. Lawlor: Now you are leaving the barn door wide open.
Mr. Cassidy: He wants a licence to steal from the people of Ottawa East.
Mr. Roy: -- so hung up on principles that they cannot be selective, that they can’t select a villain.
Mr. Cassidy: And you have none.
Mr. Roy: In their overall principles, of course -- and this is why their socialist approach has got them where it’s got them; you’re in third place and you’re going to continue going down --
Mr. Laughren: Cross the floor.
Mr. Cassidy: I think you are in the Minister of Revenue’s lap.
Mr. Roy: What we’re saying basically, Mr. Speaker, in our comments on this legislation is that the government made a mistake back in 1974. We in this party made every effort possible to try to make it a workable piece of legislation. What we’re saying to the government is that at that time, back in 1974, I think there’s a recognition that you were going much too far, that you showed no foresight. And it’s thank God for this party that some of the pitfalls in the legislation were curbed. So, basically, what we’re saying now is that the economic situation requires a different type of stimulus. This is why we in this party believe in private enterprise, and the more controls we can get off the better it is going to be. That is where we are different from the people to our left.
Mr. Warner: Tell that to Ottawa.
Mr. Roy: So what we are saying basically is that at this time we feel it is proper to support this type of legislation because we believe in a private enterprise system. We have nothing against profit.
Mr. Laughren: Cross the floor.
Mr. Roy: And we feel that in the long term this will create more accommodation and hopefully over a period of time we will be able to get rid of one more control -- rent control --
Mr. Laughren: Cross the floor.
Mr. Roy: -- another type of control that in the long term we would like to see removed in this province. In other words we believe in individuals rather than controls imposed by governments --
Mr. Cassidy: Individual exploiters, yes.
Mr. Roy: -- and this is why we are supporting this legislation.
Mr. Martel: As a Liberal, John, you support that.
Mr. Makarchuk: Mr. Speaker, the thing that worries me about this bill, particularly about the future of Canada and of Ontario, is the oft-expressed view both from the Conservatives and the Liberals that we need foreign people to come in and do things for us. Those guys had better grow up. It is about time both parties stopped waiting for somebody to come around and wipe their fanny or blow their nose.
Mr. Deputy Speaker: Order, please.
Mr. Makarchuk: This country is big enough and this province is old enough to be able to do things on their own.
Mr. Makarchuk: As a result of what the government is trying to do with this land speculation tax, we have to depend on somebody else to come in and do things for us.
Hon. Mr. Kerr: Are the socialists going to do it?
Mr. Makarchuk: The government hasn’t the guts to stand up on its own two feet.
Mr. Makarchuk: That’s an expression. Its actions on this bill express the kind of confidence the government has in this country and the direction it would go if it had full control.
Hon. Mr. Kerr: You cynics.
Mr. Makarchuk: No other western civilized country in the world allows foreign speculators to come in and do the things to its economy, to its land, to its country, that we do in this country.
Mr. Roy: What about the US?
Mr. Makarchuk: Yes, how about the US. If you compare the economies of those particular countries in terms of either productivity, in terms of growth, in terms of employment, in any factor including standard of living, you will find that they are higher than they are in this country.
Hon. Mr. Kerr: Are you talking about Switzerland or Luxembourg?
Mr. S. Smith: You are talking nonsense and you know it.
Mr. Makarchuk: The thing about it is that they did it by themselves. You take a little country like Sweden --
Hon. Mr. Rhodes: Cuba, Cuba.
Mr. Makarchuk: Seven million people, John, less than the province of Ontario.
Mr. Deputy Speaker: Order, please.
Mr. Pope: What? Are you crazy?
Mr. Makarchuk: It is able to build an automobile --
Mr. Mackenzie: You are going downhill --
Mr. Deputy Speaker: Order, please. The member for Brantford has the floor.
Mr. Makarchuk: The point in all this is that the nations are able, through government intervention, to make their economy grow without having to depend on somebody else to come do it for them.
Mr. Cassidy: The Swedish vote will desert you entirely in the next election.
Mr. Makarchuk: If one looks at the amount of capital the people generate in this country -- and some of the members really should look. As I said the other night, forget Adam Smith. Even try to look at Milton Friedman perhaps. But forget that and look at the fact that we in this country generate more capital than we invest. Canadians actually, on a per capita basis, invest more than the Americans. Everything -- the ingredients, the resources, the finances, are all here that we could use, that we could build, that we could develop without having to go somewhere else -- without having to ask other people to do it.
Hon. Mr. Kerr: Haven’t got enough.
Mr. Makarchuk: It’s here, and yet we refuse to act in that direction. We pander to speculators, to people who basically shuffle paper and nothing else. They don’t contribute one iota to a community. There is no contribution made whatsoever.
Hon. Mr. Kerr: Confiscate.
Mr. Makarchuk: If you look at the major wealth that has been produced in this country you will find out that the wealth hasn’t been produced by people who came in with new products and new factories and developed new resources. The wealth in this country has been developed by people who have been shuffling paper, buying land, reselling it and making their big deals in that way.
If you read The Canadian Establishment, as an example, and watch the Canadian lumber barons fighting with each other, are they really fighting in terms of innovation or new products? No, they are fighting in terms of how they can take over one major enterprise from a person holding another enterprise; and, of course, they line up the banks and so on and have their little paper battle. But in terms of solid contribution to productivity, to growth in this economy, there is really nothing there.
What the government is doing in this Act and in this kind of legislation is encouraging that kind of nonsense to go on to the detriment of the country and to the detriment of the people and everybody else. During the election the Tories went out and wrapped themselves in the flag; that’s a very easy thing to do. But when it comes to doing the economic things that make this country valuable to its people and provide the things that the people of this country need and deserve, the Tories refuse to move in that direction --
Hon. Mr. Kerr: Control, control, control, and tax, tax, tax.
Mr. Makarchuk: -- because they are fat and comfortable and they are desperate.
Hon. Mr. Kerr: Regulate, regulate, regulate.
Mr. Makarchuk: And they are scared --
Mr. Makarchuk: All they do is to wait for somebody else: “As long as I’m okay, Jack, it’s fine. That’s all I’m concerned about.”
Mr. Gregory: Why don’t you speak about the bill?
Mr. Cunningham: Sell your boat. Give your boat away.
Mr. Makarchuk: The member for Ottawa East says that this encourages private enterprise, that this encourages growth --
Mr. Cunningham: Give your boat away.
Mr. Makarchuk: But when we have the Ronto situation, for example, where a speculator goes in --
Mr. Cunningham: Sell your boat. Give your boat away.
Mr. Makarchuk: Has the member got a price in mind?
Mr. Deputy Speaker: Order, please.
Mr. Makarchuk: For a price I will sell it to him.
Mr. Makarchuk: Where a speculator comes in --
Mr. Cunningham: You NDP phoneys, you sit and postulate about socialism --
Mr. Makarchuk: -- and makes a profit of $10 million on some property --
Mr. Cunningham: You suck and blow at the same time.
Mr. Deputy Speaker: Order, please.
Mr. Makarchuk: -- which adds a cost of approximately $5,000 --
Mr. Wildman: Mr. Speaker, control that man.
Mr. Makarchuk: Yes, he’s apoplectic.
Mr. Cunningham: Give your boat away and your stock away.
Mr. Deputy Speaker: Order.
Mr. Cunningham: For the record, he laughed when I talked about stock.
Mr. Deputy Speaker: Order, please.
Mr. Makarchuk: The member has a phobia about boats.
Mr. Cunningham: I will never have a boat.
Mr. Deputy Speaker: Would the member for Wentworth North please contain himself?
Mr. Cunningham: If the member for Brantford will take me on his boat.
Mr. Makarchuk: I will. I will.
Mr. Deputy Speaker: Order, please. Would the member for Brantford please keep his remarks on this bill?
Mr. Wildman: The member is at sea.
Mr. Makarchuk: The minister is aware of this one: Ronto comes in and takes $10 million out of a community; it adds a minimum of about $5,000 to the cost of each housing unit. What that really means is a few people have walked away with a lot of money and a lot of people who are going to go in there will have to pay for this. Once they are paying the money that is going to the speculators, they are not buying the goods and services; they are not buying the fridges, the stoves, the furniture and all those other things that provide jobs and consumption and make this a vibrant and lively economy. They are not doing that. They can’t afford to.
Hon. Mr. Kerr: No, you have got to have resource industries.
Mr. Makarchuk: That’s the kind of situation the government is trying to encourage.
Hon. Mr. Kerr: Oh, no.
Mr. Makarchuk: The minister says oh, no. I suppose it’s something else.
Hon. Mr. Kerr: You’ve got to develop your basic industries.
Mr. Makarchuk: That’s right. But the basic industries we have have been here for a long time. There haven’t been too many of them developed recently. They may have been expanded --
Mr. Makarchuk: If the minister brings in all these arguments about freeing free enterprise, I just wonder in what way are they curtailed? What isn’t so free about them? How are they constrained? By what means? Who is constraining them? They damned near can do anything they want. They can pollute our waters. They can pollute our air. They can vandalize our society.
Hon. Mr. Kerr: Stick to the bill.
Mr. Makarchuk: They can make unlimited fortunes. If there were some constraints on free enterprise, we would see some kind of shift in income in our society.
Mr. Makarchuk: If we look at the distribution of income in our society, it hasn’t changed. It has changed a bit: The rich have got richer.
Hon. Mr. Kerr: Them who works, gets.
Mr. Makarchuk: Obviously there isn’t any kind of constraint on free enterprise. And when we say constrain some of the free enterprise, all we are saying is, “For God’s sake, go ahead and do what is decent and reasonable and socially useful but, in the meantime, don’t destroy the environment or vandalize our society.” Is this asking too much?
An hon. member: No, no.
Mr. Makarchuk: Is this above and beyond reason? I don’t think so, and neither does the minister.
Mr. Eakins: Good speech.
Mr. Rotenberg: Mac for leader.
Mr. Deputy Speaker: Order.
Mr. Makarchuk: I just find the continuation of this bill abhorrent. This is a sellout. It’s one of those government actions which --
Hon. Mr. Kerr: Karl Marx would admire you.
Mr. Makarchuk: -- people will eventually have to pay for. It’s a lack of confidence in its own ability to build, to create, to do things. It’s a lack of confidence in the people of this country, and the government expresses it in this kind of legislation.
Mr. Eakins: Where is Samis tonight!
Mr. Roy: You’ve got a real socialist up there tonight.
An hon. member: Thirty-three of them.
Mr. Wildman: Well, he has got a reason to be unsure of himself.
Mr. Deputy Speaker: Order, please.
An hon. member: Give your boat to charity.
Mr. Makarchuk: In conclusion -- listen, I’ve got another boat coming up. A larger one.
Mr. Breithaupt: He would like to have his own navy.
Mr. Makarchuk: Yes, of course.
Mr. Deputy Speaker: Order, please.
Mr. Makarchuk: I would also like to point out the reluctance that is expressed to have government involvement. Mr. Speaker, if you look at the economies of the United States, if you look at the economies of Canada, you find out that the periods of greatest growth were when you had government involvement or you had the greatest spending on social services. If you look, the greatest growth in this country was when we had a socialist economy during the war years, when the government was involved that time. When you started off that growth, that continued for a long time.
Mr. Havrot: Like in England, eh? Tell us about England.
Mr. Makarchuk: Do you want to look at West Germany? Do you want to look at Japan? Do you want to look at Switzerland, Sweden, Norway, Denmark? Do you want to look at some of those countries? Look at them and compare their productivity and their per capita growth to our country and you’ll find out they are way ahead, Mr. Speaker.
Mr. Havrot: Tell us about China.
Mr. Makarchuk: We are somewhere on the level with Kuwait, that’s where we are.
The reason basically, of course, is that we wait for somebody else to do it. And, of course, they do it to us, no question about it. During the election, where does the Premier (Mr. Davis) go? He goes to New York and says, “Hey fellows, I’ve got a province to plunder. Come on down, bring your money in,” that’s what he does.
Mr. Makarchuk: They can see a mark. They’re used to dealing with a mark. They can see a mark coming for a long way.
Mr. Havrot: Just like Barrett in British Columbia.
Mr. Deputy Speaker: Does the member for Brantford have any more comments in regard to Bill 14?
Mr. Pope: That reminded him.
Mr. Makarchuk: In conclusion, Mr. Speaker, what worries me are the facts and the minister’s actions in the Lynden Hill Farms case. I know she remembers that case very well and I hope it doesn’t die; we intend to resurrect it in the public accounts committee.
The owner of the property in an interview with the Globe and Mail said that he was promised that he was going to get a speculation tax exemption. Of course, in the discussions and in the House, the minister said, “Oh no, it’s something we negotiate and we’re going to continue negotiating.”
I suggest that from now on what the minister does is ensure that her department collects the money ahead of time. While she has the money then we ought to negotiate with the people for the exact sum. I think that’s a fairer way of operating these things than letting them sit out there.
Mr. Cassidy: Hear, hear. What about Ronto as well?
Mr. Laughren: Tell us about Ronto.
Mr. Makarchuk: Hopefully, if things are quiet, I’m sure she wouldn’t forget about it. I have a feeling that the promises were made somewhere in the past and nothing would happen.
I think one of the things missing out of this legislation is that the tax should be collected at the time of the transaction and when there is a dispute -- it’s done at the federal level -- then what you do is you sort it out afterwards, but at least you have the money, Mr. Speaker. In some cases you may be able to collect the money after the event, but in a lot of cases you’ll find that it’s salted away in the banks in Switzerland, or Panama, or the Bahamas or someplace and there is no way you can touch it.
Mr. Cunningham: You’re as bad as Eddie. Come on down.
Hon. Mr. Rhodes: Tell us about the Swiss banks.
Mr. Martel: I will tell you about how this government would pay for lunch.
Hon. Mr. Rhodes: Gee, I wish I had one.
Mr. S. Smith: Is that Moog you are talking about? The Premier doesn’t understand German --
Mr. Makarchuk: The other thing is because of the problems involved in the land speculation tax, in the granting of tax, is that the minister should make it a procedure to report regularly, something like the Securities Exchange Commission does, to the members of House when exemptions are granted and on what grounds the exemptions are granted.
There should be a regular report coming out of the ministry on those things. We should not have to go and hunt afterwards, get it somewhere in a back room and so on, and then try to find out just what happened and why did it happen, and why did somebody get an exemption? These are the kinds of things that we should know a responsible minister is going to report to the House when they do something of this nature. If a minister has nothing to hide, there’s no reason why it should be kept secret.
Hon. Mr. Kerr: Order, order. This is not on the principle of the bill, Mr. Speaker.
Mr. Makarchuk: And every time the government keeps it secret, I question why it is being kept secret.
Mr. Deputy Speaker: The member for Oriole.
Mr. Williams: The member for Brantford --
Mr. Roy: Tremble in your seats.
Mr. Williams: -- continued on his high level of illogical argument this evening as he did this afternoon, and I’ll speak to that in a moment or two. But in so doing, I’ll endeavour to stay on the principle of the bill, which is something that’s been lacking in the debate that’s been ensuing over the past 15 or 20 minutes.
Mr. Mackenzie: It will be a first for you.
Mr. Warner: Why don’t you read us the budget?
Mr. Cassidy: Yes, why don’t you?
Mr. Williams: Mr. Speaker, there’s no question that the two bills that we’re debating this evening, The Land Transfer Tax Act amendment and --
Mr. Laughren: No, we are only debating one.
Mr. Williams: -- the land speculation tax amendment are indeed two of the most important tax bills that will come before this House this session.
Mr. Lawlor: You’re telling me -- a big sellout.
An hon. member: Ah, sit down.
Mr. Williams: And I think it’s regrettable --
Mr. Cassidy: There is only one bill now being debated.
Mr. Williams: -- that amendments to the very broad terms of the original bills that are before us today have to be attributed to a slack economy. I would hope to think that these initiatives are being taken by the government, whether the economy had been less than at peak or otherwise --
Mr. Lawlor: Still inflation. There is still inflation in the land. It hasn’t changed.
Mr. Williams: -- because it has become quite evident since the inception of the original legislation that the bills have been too punitive for the legitimate types of businesses that have wanted to do business in this province, both domestically speaking and with regard to foreign corporations. It’s all well and good for my friend from Brantford to suggest that no foreign investment is needed in this country --
Mr. Cassidy: Better ask your minister friends.
Mr. Williams: -- when in fact it’s well understood by people who perhaps have some understanding of the real world -- those of us who have had an opportunity to actually work in the private sector.
Mr. Cassidy: You wouldn’t recognize the real world if you found it.
Mr. Williams: It would be interesting to determine just how many of the members of the --
Mr. Martel: Sidney Handleman isn’t going to like that. Nor is Bill Newman.
Mr. Williams: -- third party who speak so strongly against the free enterprise system have personally ever had the opportunity to involve themselves in that free world.
Mr. Cassidy: Oh, come on. Rubbish.
Mr. Williams: It’s very easy to sit up --
Mr. Warner: I worked in a sweat shop. That is free enterprise.
Mr. Williams: -- in an ivory tower and make comments, but when they don’t understand the free world --
Mr. MacDonald: That is an ignorant statement.
Mr. Lawlor: If you think that the real world is --
Mr. Williams: -- I guess you have to give them a certain amount of licence to do that.
Mr. Deputy Speaker: Order, please.
Mr. Williams: Mr. Speaker, obviously they speak through lack of knowledge and so one has to have some sympathy towards them. But at the same time --
Mr. Wildman: You and Franco would be great buddies.
Mr. Williams: -- when you hear them using the term “hypocritical” and “specious arguments,” I think they have to look at themselves when they make use of that terminology. The fact of the matter is that the companies that are dissuaded from investing in our province through this type of inhibiting legislation are the very companies that employ the tradesmen, the craftsmen and the union people who are so anxious to participate in activities in the labour market for the job opportunities available to them.
Mr. Wildman: How does speculation produce jobs?
Mr. Williams: It’s well known that the base of our economy is founded in two or three sectors --
Mr. MacDonald: Back to the principle of the bill.
Mr. Williams: -- one of which is the auto industry, the other of which is the real estate development field, and the building of not only residential real estate undertakings but also commercial and industrial.
Mr. Wildman: It is the first time I have ever heard a Tory say speculation produces jobs.
Mr. Williams: It seems to me that for purposes of emotional impact the member for Ottawa Centre continues to stress the arguments related to simply residential costs of building which, of course, is an important consideration. But too, the prohibitive costs of commercial and industrial building are inhibiting factors that have steered legitimate businesses in the construction industry away from Ontario into other areas, not only into the southern United States, but also into adjoining provinces. This is well understood and recognized, and it’s regrettable that many of our own domestic corporations have seen fit to move south of the line, not with any malice at all but because they felt there was a more positive business climate prevailing in that area with some of the negative aspects of it probably being attributable to this legislation.
We don’t think it has been that bad to drive out business, but it has had some negative impact. I think the Treasurer, and the minister speaking today, have given some recognition to this fact. I think the government, in being prepared to realistically recognize the problem, is prepared to make adjustments --
Mr. Wildman: If you have got to be negative it is better to be only partially negative.
Mr. Williams: -- to accommodate, realistically, the business sector, realizing that so long as the business sector is healthy, then so too the trades and unions are healthy, their people are working, the economy as a whole is stimulated.
Mr. Wildman: What is good for General Motors is good for the world.
Mr. Williams: In fact the province as a whole has to benefit from that type of productive climate. So to listen tonight to the hypocritical comments that have come from members of the third party, criticizing the private sector --
Mr. Cassidy: You would have us mortgage our futures.
Mr. Williams: -- when that is the very basis on which they enjoy the high standards of living that we have in this province, and when that is the base from which we all derive our high standards of living and enjoyment, and from which we derive our taxes from which we, as a government, have the responsibility to provide and do provide the socially-useful programs that our friend from Brantford talks about, but which we cannot bring about unless we have sufficient moneys in the public coffers to undertake those programs.
Mr. Makarchuk: How much did Ronto pay?
Mr. Williams: You can’t tax ourselves to bring that money into hand; we have to get it from the private sector.
So for the opposition party, the third party, to criticize and condemn and try to prevent growth in the private sector, they’re simply cutting off their nose to spite their face and they know it.
That is the hypocritical part of the argument. Why don’t they be honest and admit to it, and at least spend some time in giving some recognition to that area of our provincial economic activity that is deserving of support? And that has to be in the private sector; you cannot continue to debate, forever and a day in this House, issues as though they’re black and white.
Mr. Cassidy: But that’s precisely what you are doing. You dismiss everything as the government does.
Mr. Williams: That is a point that I raised at the time of the budget debate, that the biggest weakness and the reason the third party is now back where it deserves to be, as the third party, is the fact that they don’t talk to the three basic issues.
They talk about big government and they talk about big business; I’ve never yet heard of them talk about and relate the importance of big unions in the overall triumvirate situation that prevails in this province. Until they’re prepared to honestly deal with all three aspects of those influencing factors in our economy, no one is going to give total credibility to the arguments they raise in this House.
Mr. Wildman: Thank you, Napoleon Bonaparte.
Mr. Cassidy: You talk about big business.
Mr. Williams: So, Mr. Speaker, in coming back to the principles of these bills that are before us this evening, it is imperative that these bills move forward.
Mr. Cassidy: Why don’t you attack the unions?
Mr. Williams: They indeed will provide additional encouragement and stimulation to the private sector. I can only give total support, as did the other members of this party, to the official opposition party in giving unqualified support to this legislation, but I think that’s the type of positive response and attitude that must prevail in this House and through which we will achieve many more initiatives and bring about positive legislation that will benefit the people of this province.
Mr. MacDonald: Mr. Speaker, I’d like to deal with three unrelated points. The first one --
An hon. member: Speak to the bill.
Mr. MacDonald: Oh, they’re related to the bill, but they themselves are not related.
The first one is the cheap intervention of the hon. member for Ottawa East (Mr. Roy) -- I’m sorry he has gone out of the House. You know he knows, as a lawyer, and everybody knows, that when we dealt with the land speculation tax we deliberately exempted principal dwellings, and this personal intervention to drag in the alleged profit that the hon. leader of this party made when he sold his house is precisely what he’s going to do when he sells the house he lived in for a number of years and bought for a low price and is going to sell for a “profit.”
That’s a mixing of issues that we all know is a deliberate and calculated mixing; and if the hon. member doesn’t know then he’s not worthy of his legal profession and of his position in this House.
Mr. Roy: Sit down. You don’t know what you’re talking about; you put them all in the same bag, all speculators.
Mr. Acting Speaker: Order, please. The hon. member for Ottawa East has already had his turn to speak on the principle of the bill. The hon. member for York South will continue.
Mr. Roy: On a point of order, he misconstrued my comments.
Mr. Martel: You don’t have a point of order.
Mr. Acting Speaker: The hon. member for York South will continue.
Mr. MacDonald: The Speaker is so right. The member for Ottawa East had his turn and he said nothing except --
Mr. Roy: If I said nothing, what’s getting you so excited?
Mr. MacDonald: I am not getting excited. Just in case a few of his colleagues are as confused as he is, I was trying to make certain that they didn’t get mixed up in the confusion.
Mr. Roy: You poor, poor socialists,
Mr. MacDonald: Mr. Speaker, let me move to the second point that I wanted to underline. There is one element of this bill which we do support, and it is difficult to support one when the rest of it is so deplorable. I just want to underline what my colleague from Ottawa Centre has said with regard to the phasing out of the obligation to a land speculation tax for farm land.
I have been rather interested in this because as the agriculture and food critic for this party, I have had a number of people call up and say, “I understand you are in favour of protecting agricultural land,” I said yes, and they said, “If at the end of 10 years a farmer wants to sell to a developer rather than to another farmer, aren’t you encouraging speculation? Are you protecting agricultural land?” I say, “You’ve got a point.”
It may well be that there’s the odd person who has held his land for 10 years, or the person who has held land as a family farm for a long time who is going to sell it for speculative purposes. But the answer to that question is that if this government has got guidelines to protect agricultural land and those guidelines are something more than pure political rhetoric, and if those guidelines are ultimately backed up by law as this party seeks, as the Rural Ontario Municipal Association seeks, and as the Ontario Institute of Agrologists seeks, then it will be certain that no prime agricultural land is going to be sold for speculative purposes. It will be kept for food land production purposes.
So we acknowledge that after 10 years it is conceivable, with the inadequacy of other legislation that this government has at the moment, with guidelines that have no backing in law, that that might happen, We will watch it to see that it happens as little as possible.
My third point, Mr. Speaker, that I wanted to raise is this --
Hon. Mr. Kerr: Who’s going to do the farming?
Mr. Acting Speaker: Perhaps the hon. members would refrain from interjecting. It is out of order; please allow the hon. member for York South to continue,
Mr. MacDonald: Mr. Speaker, with respect, this isn’t an interjection. This is a competing debate.
Mr. Cassidy: That’s right.
Mr. MacDonald: I was rather interested in noting in one of my previous reincarnations in terms of ministerial responsibility as critic, that in 1974, as the budget credit for the New Democratic Party, I had some comments to make about the land speculation tax when it was first introduced. Mr. Speaker, forgive me -- I rarely quote myself although I always find it to be a reputable kind of quote. But I do on this occasion want to quote you three paragraphs because I think they are very prophetic:
“Clearly the government regarded its 50 per cent speculation tax as the headline grabber of the budget.” This is 1974. “I venture the prediction that it will be the prize example of flim-flamming in a budget replete with it.”
Mr. Cassidy: That’s right.
Mr. MacDonald: “The effectiveness of the tax, so the provincial Treasurer argues, can be judged in advance by the fact that it will result in only $25 million of revenue. There’s as self-serving a statement as I have ever heard. It assumes that the tax will check speculation so effectively that there will be very little revenue. After all, most of the major developers have each made $25 million in the last year or so.”
Mr. Acting Speaker: Order, please. I wonder if the hon. member for Haldimand-Norfolk (Mr. G. I. Miller) and the hon. member for Algoma (Mr. Wildman) would extend the courtesy to the member for York South that he can continue his part in this debate.
Mr. MacDonald: With respect, Mr. Speaker, the hon. member for Haldimand-Norfolk wasn’t even listening to you so I think you will have to repeat it.
Mr. Eakins: He was talking to the member for Riverdale (Mr. Renwick).
Mr. MacDonald: The hon. member for Riverdale was trying to quieten him down.
I was drawing attention to the fact that the government predicted they would get $25 million in revenue; and that this was an indication, they said, of how effective their tax was going to be in damping down speculation, because they were only going to get $25 million in revenue, when everybody knows there are many major developers who have made more than $25 million in a year. In fact however, I added back in 1974: “There are so many exemptions granted and so many potential loopholes in the tax that the limited amount of revenue will be a measure of its ineffectiveness. The lawyers are going to have a Roman holiday and the developers will still be laughing all the way to the bank.”
Mr. Speaker, just to show you how prophetic that statement was, the government contended they were going to get $25 million in revenue, and that would be proof of the effectiveness in damping down speculation. Do you know what the record is; do you know what the statistics are?
Okay; in 1975-76, the first full year after the tax was introduced, the total amount of tax they got was not $25 million in revenue; the loopholes were as big as a barn door; they got only $3 million in revenue. That shows how far off the provincial Treasurer was in his estimates of how much revenue he was going to make from this. In 1976-77, do you know how much they made? Was it $25 million; no, it was $6 million. It was $3 million the first year; $6 million the second year.
Do you know what their estimate is for this year? It’s $9 million. I suspect it is as phoney as the original. That’s the reason we are going to oppose this; because it is fallacious, it is opening up the doors to speculation when your efforts up to now have been wholly ineffective.
Mr. Ashe: I rise in support of this bill, the same as Bill 13, in that --
Mr. Ashe: That’s right, isn’t it? It appears to me that it is nice to be part of a government and part of a party that can recognize changing business climates, changing economic conditions, as with this particular one.
Mr. Peterson: You are so flexible you don’t have any principles at all.
Mr. Makarchuk: You haven’t got them, that’s the problem.
Mr. Ashe: The official opposition also recognizes that things do change and that’s probably why they are in full support of this particular bill as well. I don’t think that’s a negative aspect of any government. I think it is a positive aspect to realize that they can examine their policies, they can look at themselves in the mirror and recognize that sometimes things do change and changes are necessary. That really is what we are talking about in the bill just discussed some time -- I was going to say a short time ago, but it isn’t that any more; some time ago it was Bill 13 and of course now it is Bill 14.
The hon. member for Brantford indicated there were certain members of the government party, and I suppose the official opposition party, who didn’t really have the guts to stand up for our particular province in our economic condition. I find, really, it is just the opposite of that, that we can stand up and again recognize that we do need, quote, if you want to call it that way, “help” through foreign investment from time to time.
We do need investments, we do need the capital from other countries from time to time. If you went along with all the regulation and negativism of the third party, nobody would be able to stand up because they wouldn’t have the economic fortitude, they wouldn’t have the muscle to stand up because they wouldn’t have any income to stand up with.
Mr. Peterson: They have a new redneck over there.
Hon. Mr. Kerr: Now hear this.
Mr. Ashe: The other real inconsistency I find when members speak to this bill, again relating to some of the inconsistencies of the third party in this instance: For example during the recent election campaign, and very conveniently, the leader of the then official opposition, no longer so, and the then member from my riding, no longer so, came out and made a grandstand appearance in meeting with the local elevator company which has had some economic problems in the last number of years. Of course, seeing they are in the elevator business, single-family dwellings really --
Mr. Breithaupt: That business does have its ups and downs.
Mr. Ashe: It has its ups and downs to say the least. But they don’t really have much marketability on single-family dwellings. They really relate, of course, to apartment buildings from time to time, and to commercial businesses from time to time. Yet here they go down and talk to this company and let them cry on their shoulder to indicate that they’re really concerned about jobs, they’re really concerned about the elevator industry. Yet when we come forward with a particular piece of legislation that would probably be of some stimulus to the economic climate and the investment opportunities in this province to get the apartment investments going again -- to get investments in commercial buildings going again possibly -- they stand up and oppose it. That to me is completely irresponsible and completely inconsistent, to say the very least.
Mr. Cassidy: Does the member say that the only way to get building is to have unlimited speculation?
Mr. Ashe: Also on the same subject --
Mr. Cassidy: Is that what he says to do?
Mr. Ashe: -- it is well recognized that one of the reasons that we have a shortage of apartments in our major urban areas is partially because of this particular unamended legislation --
Mr. Breithaupt: That’s why the member’s government brought them in.
Mr. Ashe: -- and also because of rent controls, which the third party would support forever. And we know that that’s the reason. The main reason for rent controls of course is the lack of supply. The lack of demand certainly isn’t a problem. The demand is there but the supply has been lacking.
Mr. Warner: Your government brought in the legislation.
Mr. Ashe: If we had a climate of too many apartments on the market, we wouldn’t have to worry about rent control because --
Mr. Acting Speaker: Order, please. Perhaps the hon. member would return to the principle of this bill.
Mr. Ashe: Yes, thank you, Mr. Speaker.
Mr. Cassidy: He should resign so that Charles Godfrey can come back.
Mr. Ashe: I apologize for wandering, but I’ve been indoctrinated by that kind of wandering now for a week and a half and it is rather difficult.
Mr. Warner: Sitting beside the member for Oriole (Mr. Williams).
Mr. Ashe: In closing, I can’t support the arguments as put forward by any members of the third party in opposition to this bill. Again, I think the bill -- the amendments to The Land Speculation Tax Act as it was to The Land Transfer Tax Act -- will stimulate further investment in our economic climate in the province of Ontario. It will bring forward more overall opportunities for investment of a capital nature and also, to a degree, I suppose, of a speculative nature -- yes, because I too am not opposed to the word profit. So we should expedite the passing of this legislation. And all those in clear conscience who are really truly involved and concerned about the economic conditions and who work in our province should support it.
Mr. Acting Speaker: The hon. member for London Centre.
Mr. Peterson: With respect, it’s our turn.
Mr. Martel: You weren’t here.
Mr. Peterson: I just want to respond to that, for a couple of minutes. I don’t intend to be long, but it amazes me to see a particularly new member from Durham West talking as if that party there is the only one which has any option on the free marketplace or understands the free market forces.
Hon. Mr. Kerr: The only one that has been responding is the third party.
Mr. Peterson: They are the ones who brought in the bill, changed the bill, criticized my leader in 1975, called him the friend of the speculators because he had some legitimate arguments to make at that particular time. They have no philosophy. They have no understanding of what makes the free marketplace operate. They move only with the forces of a particular time. And I have never seen a government with less philosophy, with less conception, that reacts more to whatever happens to be the principal forces at a particular time. And I’ll tell them this --
Hon. Mr. Kerr: You supported the bill in 1974.
Mr. Acting Speaker: Order, please.
Hon. Mr. Kerr: What is your philosophy?
Mr. Peterson: I want you to know, Mr. Speaker --
Mr. Acting Speaker: Order, please. Perhaps the hon. member would return to the principle of the bill.
Mr. Peterson: I was not going to speak on that.
Mr. Cassidy: It is a good thing you are not opposing this legislation.
Mr. Peterson: We are going to support this because we think it’s one step along the way.
Hon. Mr. Kerr: Give us your philosophy.
Mr. Peterson: But what we resent is the sanctimonious attitude of the government sitting over there, thinking that they have the only option on veracity or truth in these circumstances. Let me say this, that we have an all-time low vacancy rate. We have a housing crisis of unparalleled proportions. All of it is the sum total of the cumulative policies of that government.
I say, with respect to my friends over here on the left, I hear them talk on both sides of every single issue --
Mr. Warner: We don’t expect you to understand.
Mr. Peterson: -- whether it’s a question of more housing and less farm land or less farm land and more housing. They have never sat down and reconciled the entire thing. And I say that to them in fairness. We probably -- and it’s interesting to note that this party that I represent tonight has probably more faith in free market systems than any other party here in this House. Unabashedly I say that.
Mr. Warner: What party will you represent tomorrow night?
Mr. Lawlor: Probably true; a complete anarchist.
Mr. Peterson: I just want to lay this before the House tonight, that we are here, we are going to support the bill. If you have analysed all of the things that the people of my party have said --
Mr. Cassidy: The weak, the poor, the disabled, the aged.
Mr. Lawlor: You would make Barry Goldwater blush.
Mr. Peterson: -- that my former leader, the member for Brant-Oxford-Norfolk (Mr. Nixon), said when he was accused by the Premier of this province (Mr. Davis) as being “the friend of the speculator,” for saying almost exactly what the minister and what various other people in the government party have said tonight.
Mr. Cassidy: You are both friends of the speculator.
Mr. Peterson: It speaks, to me at least, as just a small measure of the sanctimonious nature of this government. I will tell you you have a long way to go before you truly understand: one, the free market forces; and two, before you have any consistent philosophy about what makes it all go.
Hon. Mr. Kerr: We are still waiting for your philosophy. What is yours?
Mr. Peterson: With respect to you, my friend, I have absolutely no faith. Fortunately, the electorate has deemed you irrelevant, so it doesn’t matter any more what they say to you.
But with respect to my friends over here, I say to you very honestly and very fairly, that you haven’t really addressed your minds to the problem. My friend from Durham West was talking about rent controls and all of that nonsense. Let me tell you, all of this was brought in by your government as a reaction to perceived political problems.
Mr. Cassidy: You squeaked into that position.
Mr. Peterson: Not real problems but political problems. You have no right, in a sanctimonious mood, to come into this House and try to say those kind of things because you don’t understand it, you don’t understand the forces --
Hon. Mr. Kerr: We still haven’t got your philosophy.
Mr. Peterson: George, what are you yapping about?
Hon. Mr. Kerr: We still haven’t got your philosophy.
Mr. Acting Speaker: Order, please. The hon. member will not refer to another hon. member by his first name but rather by the riding he represents.
Mr. Peterson: In fairness now, if the hon. Minister of the Environment has something very close to the heart he wants to say I would gladly defer to him.
Hon. Mr. Kerr: We want your philosophy.
Mr. Grossman: Are you against the rent review?
Mr. Acting Speaker: Order, please. Let’s not have philosophy; let’s speak to the principle of the bill.
Mr. Peterson: I’ll tell you our philosophy; we have been consistent through the past year.
Mr. Acting Speaker: Order, please. I would again warn the hon. member that he should return to the principle of the bill. It is time that he respected the Chair’s ruling and that you return to the principle of the bill without any further interruptions.
Mr. Lawlor: Tell him not to be so sanctimonious.
Mr. Cassidy: You are 100 per cent right, Mr. Speaker.
Mr. Grossman: The voice of authority.
Mr. Peterson: In fairness, Mr. Speaker, several other speakers have alluded to various other bills that bear on the entire problem of producing housing in this particular province, particularly at this time. What I had hoped I have done, and perhaps I haven’t, completely --
Mr. Grossman: Right.
Mr. Peterson: -- is speak to this problem over the last two or three years in all the interrelating pieces of legislation.
The truth is, it has been a disaster. Whatever has happened heretofore has not worked. We welcome these changes as perhaps a quasi solution to the problem. We don’t think it is the entire solution.
But I just want to say that when I sit here and listen to some of this nonsense I have heard, and I came in late tonight, from the member for Durham West, from some of my friends to the left, Mr. Speaker, I just have to say this, that --
Mr. Lawlor: How about the nonsense we have to listen to?
Mr. Peterson: -- we haven’t yet had a coherent answer to this problem; we support it only because it is in some small fraction an answer to that problem.
Hon. Mr. Kerr: Great contribution.
Mr. Martel: Mr. Speaker, as one of eight members left in this Legislature who in fact was on the committee whose report prompted the speculation tax --
Mr. Peterson: You should be ashamed of yourself.
Mr. Martel: In fact we opposed it; the committee, in its findings, in fact opposed a land spec tax.
Hon. Mr. Kerr: You what?
Mr. Martel: We opposed the land spec tax, the select committee.
Mr. Peterson: Elie is a friend of the speculators.
Mr. Martel: I want to remind you, I want to tell you who was on that committee just before I go on. Russell Rowe -- I think some of the Tories who shot their face off tonight know Russell Rowe, the Speaker. Donald Deacon -- do you know Donald Deacon?
Mr. Roy: A good man.
Mr. Martel: Right on. I’m going to come to him too.
Mr. Peterson: He is a great Canadian.
Mr. Martel: Douglas Kennedy.
Mr. Roy: Who is he?
Mr. Martel: I hope some of you Tories know these fellows -- Nicholas Leluk, William Newman, Gordon Walker, Sidney B. Handleman, and there was Richard Smith from Nipissing.
An hon. member: Good man.
Mr. Martel: Let’s get down to land speculation.
Mr. Grossman: Who else, Elie? Read the rest.
Mr. Martel: Well, there was my friend, the member for Hamilton, and myself.
Mr. Eakins: Last but not least.
Mr. Martel: We looked at this problem for well over a year -- a year and a half.
Mr. Cunningham: At 50 bucks a day.
Mr. Martel: At 50 bucks a day. You want to believe it. In fact, we went to Europe, with all expenses paid.
Mr. Breithaupt: And how many came back?
Mr. Peterson: Don’t look down your nose at these people, Elie.
Mr. Martel: Well, the report prompted the government to move.
Mr. Eakins: Tell us about the trip.
Mr. Martel: But the committee, in fact, opposed land speculation tax as a solution to the land problem.
Mr. Martel: And it recommended in two areas, the ownership of real estate by individuals, and commercial and corporate real estate ownership -- for my friend from Durham who talked about investment. You know, Mr. Speaker, we had the people from the real estate industry in and you might ask the present minister responsible. As we attempted to find out how much land they had, after three days of questioning we were no further ahead than when we started. No one knew a thing. They didn’t know who owned the land. They didn’t have a clue. And they couldn’t tell us although they represented the majority of the corporations.
Mr. Cunningham: Could be in the cabinet.
Mr. Martel: Well, some of them are now in the cabinet, but they signed this. Now, we talk about hypocritical -- private foreign sector investment is doing great things for us. Let me tell you what the government’s friends signed. I am going to quote three or four --
Mr. Grossman: Didn’t you support it?
Mr. Martel: I supported it, you are darn right.
Mr. Grossman: You were against the land speculation tax?
Mr. Martel: Yes, right. Commercial and corporate real estate ownership -- the committee recommends the following: “The committee recommends, subject to recommendation 8, that all future acquisition of land in Ontario other than by individuals be restricted to corporations or ventures not less than 75 per cent owned by Canadian citizens or landed immigrants resident in Canada.”
The committee felt that the only way to get at land speculation was to in fact have Canadians in control because in Germany we found out that there was a special tax writeoff for German investors to purchase in Canada.
Mr. Eakins: Did you visit Hamburg?
Hon. Mr. Kerr: What is in Hamburg?
Mr. Wildman: It’s not a hot dog, like some people over there.
Mr. Martel: We visited a number of German cities, including Bonn. But they in fact had a special tax because of which they didn’t care how much they were charged in Canada or how much they sold it for, because they could write it off in Germany. Now, you can have all kinds of land speculation tax but it doesn’t affect them one jot. They just pass it on. In fact, the member who is no longer here, I think my friend from --
An hon. member: Nipissing?
Mr. Martel: No, not Nipissing.
Mr. Grossman: You have got only one over there.
Mr. Martel: Well, he beat Glen Hodgson anyway.
Hon. Mr. Kerr: Wouldn’t buy his house.
Mr. Martel: But in Hodgson’s riding the Germans had in fact purchased almost the whole of that area and Glen was absolutely perturbed that they could write off in Germany what they had purchased in Canada. In fact, it was one of the reasons he was very forceful in demanding that you don’t have a land spec tax, that you don’t allow foreign investors to purchase the land. You lease, which is being done in most of England today.
Industry in England is not buying, it’s leasing. And industry in the United States isn’t buying land, it’s leasing. And the select committee who spent over a year studying it looked into it very carefully. My friend the member for Oriole should see the signatures. Of the seven signatures six of those are either in the cabinet, occupy Mr. Speaker’s chair, and said we don’t need investment of that nature in Ontario.
Hon. Mr. Kerr: They obviously disagreed with the report.
Mr. Martel: No, they supported the report because they signed. What the government didn’t do was pay any attention to the select committee report. Two of them are in the cabinet today --
Mr. Martel: Yes, two of them are in the cabinet. We hear all the claptrap that we’ve just gone through; those people over there don’t understand free enterprise and foreign investment. Well, seven out of the 11 members came from that party. Didn’t they understand? Get up and shoot your mouth off now.
An hon. member: They are in the cabinet, we aren’t.
Mr. Acting Speaker: Order, please. The hon. member will use more parliamentary language.
Mr. Martel: The other two, of course, were Donald Deacon and Richard Smith. Yes, good members, but they too signed this document and now the hon. member is supporting land speculation. They didn’t; they moved to get rid of it. Too bad he wouldn’t.
Hon. Mr. Kerr: They knew they made a mistake.
Mr. Roy: Oh, no. A changing situation.
Mr. Martel: I’m going to quote a little more. Okay?
Mr. Roy: Oh, no.
Mr. Martel: Just for the hon. member. Under “Commercial and Corporate Real Estate Ownership,” recommendation No. 8 reads:
“The committee recommends that corporations less than 75 per cent owned by Canadian citizens or resident landed immigrants, who can establish that it is bona fide in the nature of their business to acquire land on a regular basis for real estate development or finance, have the option of becoming 75 per cent owned by Canadian citizens or resident landed immigrants as a condition of being entitled to continue to acquire land during the period required to obtain a fair price for corporations’ shares on the Canadian market.” The hon. member’s friends again.
Mr. Roy: Did I sign that?
Mr. Martel: No, but his party was well represented, as was the Tory party; two are in the cabinet now, two are parliamentary assistants --
Mr. Grossman: And two of you.
Mr. Martel: -- one is the Speaker, and there’s my friend from London South (Mr. Walker). They were against the land speculation tax.
Mr. Grossman: And so were you.
Mr. Martel: So was I. And I’m still against it tonight.
Mr. Grossman: You’re against the land speculation tax?
Mr. Martel: Yes. Because it’s not a solution.
Mr. Grossman: You’d better speak to your colleagues.
Mr. Martel: They’re against it.
Mr. Grossman: My constituents will be interested in that. Have you read the resolutions at your conference?
Mr. Roy: The member should listen to his colleague, the member for Ottawa Centre.
Mr. Martel: I listened very carefully.
Mr. Acting Speaker: Order, please.
Mr. Martel: Now, in the private sector, what are we talking about? These Tories, who don’t know anything -- just the New Democrats -- what did they sign?
Mr. Grossman: What about the resolutions at your convention? Are you against the land speculation tax, McClellan?
Mr. McClellan: Don’t blow all your fuses.
Mr. Martel: I’d like to remind you, Mr. Speaker, that seven of the 11 were Tories and six of them are still here.
Hon. Mr. Kerr: Six of them are still here.
Mr. Martel: The Minister of the Environment made a mistake during the election. He wanted to close the English-Wabigoon river system and the Minister of Natural Resources (Mr. F. S. Miller) told him no. Let the minister go and resolve that problem with his colleague while I talk about the land speculation tax --
Mr. Grossman: What clause of the bill is that?
Mr. Martel: What did we say about ownership of real estate by individuals?
“The committee recommends, subject to recommendation 2, that all future transfers of legal or equitable ... interests in real property in Ontario to individuals, directly or indirectly, be restricted to Canadian citizens and landed immigrants resident in Canada” as a solution to getting rid of land speculation.
Mr. Roy: You are out of order.
Mr. Martel: No, I’m not. I’m talking about land speculation.
Mr. Roy: That’s not what you are talking about.
Mr. Martel: I’m talking about what the hon. member’s colleagues signed. I listened to all the claptrap from the new member, one of the new bright boys.
Hon. Mr. Kerr: We’ve got a lot of bright new members.
Mr. Martel: Yes, part of the $3 million boys. He might read some of the reports that his colleagues signed.
Mr. Maeck: Times change. That was four years ago.
Mr. Martel:: It was a farce in 1975 when the government brought it in. It was argued in this House for about two months. Poor old Arthur was inflexible; day in, day out, we went through that ritual.
Mr. Grossman: How would you know? How did you vote on it?
Mr. Martel: Everybody said it wouldn’t work. Less than two years later we are back, and I predict that before we are finished we’ll remove the remainder.
Mr. Roy: Do you think so?
Mr. Martel: Yes, I think so, because the Arabs have money to invest, the Germans have money to invest, the Americans have money to invest -- far greater than Canadians -- and therefore they can absorb the tax. That’s what the committee found. They can absorb the tax and simply pass it on to Canadians who might be wanting to buy.
Mr. Grossman: Would you revoke it if you get elected?
Mr. Martel: Well, they pass it on. I suggest to the member for St. Andrew-St. Patrick that he read the report. Why doesn’t he go in his cubicle now, read the report and then come back? Just go and read the report and come back.
Mr. Grossman: Tell me if you would revoke it. Save me the trouble, Elie; would you revoke it?
Mr. Acting Speaker: Order, please. Would the hon. member for St. Andrew-St. Patrick cease to interject in order that the member can carry on?
Mr. Conway: Throw him out.
Mr. Acting Speaker: Order, please. And perhaps the hon. member for Sudbury East would spend a little less time in debating the merits of the report that his committee submitted and relate his comments to the principle of this bill and continue the debate in that manner.
Mr. Martel: Mr. Speaker, you’ve got a bill which recommends a land speculation tax. The government established a committee which after a year and a half of study --
Mr. Roy: Of travel and study.
Mr. Martel: Travel and study.
Mr. Warner: Mostly travel.
Mr. Martel: -- reported and recommended that land speculation tax wasn’t the way to resolve the problem of investment of this nature and land speculation, and made all of these recommendations. The report led to the government introducing this stupid tax, which in fact is now cut in half and two years down the road we’ll eliminate.
I suggest to you, based on the real study that was done with research available and so on, that we in fact move to the report and start to implement the recommendations, signed by seven Tories, which would end the speculation, because the ownership of land would rest with Canadians -- recreational land, which my friend from Parry Sound is concerned about; there are a whole number of recommendations with respect to recreational land.
The report, and this is what bothers me after the government paying a considerable amount of money, has been almost totally ignored, except to introduce a crazy land speculation tax which you’ve cut in half, which cost the province I don’t know how much in introducing it in the first place, because we spent two months on it. We’ve cut it in half again tonight, and we haven’t answered the problem.
All of the documentation we could put together was that this would not end speculation because of the vast amounts of money, the vast tax writeoffs that other nations have and which they can simply pass on to the Canadian public in the form of a higher price, whether it’d be for a price of real estate when you purchase your home, whether it be in recreational land. Surely that’s what we’re interested in.
I don’t need the claptrap from the member for Oriole or the new boy from Durham. Maybe they could read the report and come back and see who’s right. Maybe they should read the debates from the last time around when we said it wouldn’t work. As the former leader of the New Democratic Party quoted, the $25 million you were going to make the first year was $3 million.
Mr. Grossman: Did you vote against it?
Mr. Martel: Yes; I opposed it then for the same reasons I’m opposing it tonight, because in spite of the recommendation of the one group that did the study --
Mr. Grossman: NDPers, all against spec tax. We are in favour of spec tax.
Mr. Martel: -- the study was thrown out except to bring in the crazy land spec tax. I suggest to you before you get so hidebound and critical about what socialists are doing, you might in fact read the report, Albert.
Mr. Roy: Elie, I like you personally; you’re not a bad socialist.
Mr. Martel: No, don’t give me the claptrap. Well, what else did the committee report, Mr. Speaker?
Mr. Roy: You are making a very good speech.
Mr. Martel: You see what I’m trying to drive at, Mr. Speaker, is that we covered all the bases, very carefully.
Mr. Conway: Dick Smith wrote a good report.
Mr. Martel: Dick was in here. I give him credit for some of the material. He added to this report, particularly as it pertains to the forest industry and I give him credit for that.
Mr. Roy: And Dick said you were one of the better travelling companions.
Mr. Martel: Well, we crawled a few pubs in Europe, I must admit; but I really --
Mr. Conway: The minister’s ears, please.
Mr. Martel: Yes, I won’t go into that.
I would urge the government, for a change, to look at a select committee report, that’s what they establish committees for, and based on the findings of the committee in fact start to implement it. Other provinces have, and they have eliminated land speculation, but you simply can’t do it via this route. They have too much money in foreign countries, such as the Arab nations; the Germans have special tax writeoffs, which they simply pass on to us; the Americans have more disposable income than we have, which they pass on to the Canadians --
Mr. Martel: The select committee said -- well, I’ll go back to it: “The committee recommends that corporations or ventures less than 75 per cent owned by Canadian citizens or resident landed immigrants be entitled to obtain leasehold interest in land in Ontario on terms appropriate to their commercial needs.”
Hon. Mr. Kerr: You don’t suppose Canadians can build, do you?
Mr. Martel: Now we didn’t rule out the Americans coming in and investing; we’re just saying that they would have to lease the land; and this is what many American firms are doing, both in the United States itself and as they invest in Europe. They’re simply leasing. As my friend the member for Brantford said, they know a mark, they know a mark.
Mr. Warner: Come to Ontario!
An hon. member: Biggest suckers around.
Mr. Martel: They simply pass it on to the Ontario consumer. I’m saying to the Minister of the Environment, if he wants to get into the act, read the report and you too will support us.
Hon. Mr. Kerr: I did.
Mr. Martel: Aw, you didn’t, George; not at all.
Hon. Mr. Kerr: I thought it was terrible.
Mr. Martel: We provided for the Americans to invest and to continue to build, if that’s what you’re concerned about; and the trade unionists having jobs and so on, in response to the member for Oriole. We provided a loophole based on --
Mr. Grossman: Loophole?
Mr. Martel: -- what they’re doing in the States already and based on what they’re doing as they invest in Europe, whether it be England or other nations in Europe proper, they’re doing it. There is no loophole, it’s leaseholds.
Mr. Grossman: There is no loophole?
Mr. Deans: You are not allowed to quote people back. Don’t you know the rules of the game?
Mr. Grossman: I have left the rules.
Mr. Martel.: Mr. Speaker, I think I’ve tried to drive the point home that we’ve heard claptrap from over there. In fact, what they did was run down their own two cabinet ministers, their two parliamentary assistants and the return of the member for London South who also signed that document. I suggest, before the member for Oriole shoots his mouth off as he did tonight, that he reads what was said.
Hon. Mr. Kerr: You’ll never live it down.
Mr. Grossman: That’s not parliamentary language.
Mr. Martel: His colleague signed this. As I sit down I suggest my friend from Ottawa East reads the report, too, because his colleagues, like us, wanted to get rid of land speculation and saw this as the only way to do it.
Hon. Mr. Kerr: That was the rule in those days. Times have changed.
Mr. Acting Speaker: Order, please. The hon. minister is rising on a point of order. Would you state your point of order?
Hon. Mrs. Scrivener: Mr. Speaker, we’ve just had a very neat, although wordy, rationale from the member for Sudbury East about the various events and important considerations which led up to the report of the committee on foreign investment.
Mr. Martel: Right.
Mr. Deans: What is out of order?
Hon. Mr. Rhodes: You.
Hon. Mrs. Scrivener: And this was, apparently, to be an important basis in our considerations here this evening.
Mr. Acting Speaker: Would you state your point of order, please?
Hon. Mrs. Scrivener: But I think he forgets that there was a most important constitutional problem which was before the committee at that time.
Mr. Martel: State your point of order.
Hon. Mrs. Scrivener: Most certainly. This is a point of order, Mr. Speaker, and I haven’t had an opportunity to state it.
Mr. Acting Speaker: Would the hon. minister state her point of order, very briefly. I haven’t heard the point of order at this time.
Hon. Mrs. Scrivener: I haven’t had the opportunity to state it, Mr. Speaker, beyond the fact that I am pointing out that the member has been misinforming the House.
Mr. Martel: Oh, wait a minute.
Mr. Acting Speaker: Order, please. I hope I didn’t hear what I thought I heard. Is the hon. minister accusing an hon. member of misinforming the House or misleading the House?
Mr. Deans: Now we have a point of order.
Mr. Martel: On a point of order.
Hon. Mr. Kerr: Careful.
Hon. Mrs. Scrivener: I am not. No, Mr. Speaker, I am not.
Mr. Martel: On a point of order, Mr. Speaker.
Hon. Mrs. Scrivener: I’ve had so many interruptions, Mr. Speaker, from the opposite bench and from yourself that I haven’t been able to get a sentence out.
Mr. Martel: Mr. Speaker.
Mr. Acting Speaker: Order, please, the hon. member for Sudbury East will permit the hon. minister to continue her point of order.
Hon. Mrs. Scrivener: Mr. Speaker, my point of order is that the member has been misinforming the House because I think he forgets --
Mr. Martel: Wait a minute, Mr. Speaker, on a point of privilege.
Hon. Mrs. Scrivener: -- a most important point which was part of the consideration of that select committee at that time. It was that there was a constitutional problem which was then before the federal government in terms of the Prince Edward Island attempt to control non-resident land ownership at that time, and it was before the Supreme Court of Canada. It was a most important consideration and, as a result of that, the select committee then had to alter its recommendation to the government --
Mr. Martel: No, it didn’t.
Mr. Acting Speaker: Order, please. It is the Chair’s assessment that that is not a point of order. Perhaps the hon. minister might respond to the comment that the hon. member for Sudbury East made during her remarks at the conclusion of the debate.
Mr. Martel: Mr. Speaker, on a point of privilege, I suggest the minister withdraw the statement she made with respect to that fact that I had misled the House. The select committee -- and I have before me its report -- dealt with the constitutional issue in its report. I might quote, Mr. Speaker, if I might.
Hon. Mr. Kerr: Ah, get to the root of it.
Mr. Martel: “The committee recommends that the government of Ontario take the position that legislation along the lines proposed by the committee is unambiguously in relation to property and civil rights in the province in the matters of a local and private nature. In regard to ownership of land by corporations, the committee” and so forth.
What we recognized was that there was a possibility of a constitutional issue. We said: “The committee recommends the government of Ontario take the position that legislation of the kind the committee has recommended with respect to real property in the provinces within the powers of the province --”
I have it before me. And we had as our counsel one Ivan Feltham who taught law at Osgoode and who had this issue checked out.
Mr. Acting Speaker: Order, please. Order, please. I would have to check Hansard to make certain of the remarks of the hon. minister as to whether she did indicate that you had misled the House or were misleading the House or --
An hon. member: Misinformed.
Mr. Acting Speaker: -- was misinformed. Perhaps the hon. minister might like to clarify that point, whether she did say that. If she did, I would ask her to withdraw it, and I would also ask her to pass comment -- rather than a point of order -- concerning the other remarks during her concluding remarks on second reading.
Mr. Breithaupt: Mr. Speaker, can you advise the House if, in fact, the hon. minister did have a valid point of order and the hon. member for Sudbury East did have a valid point of privilege.
Mr. Acting Speaker: As far as the Chair is concerned, there was no point of order and I do not believe there was a point of privilege.
Mr. Martel: With the greatest of respect --
Mr. Acting Speaker: Order, please. Are you challenging the Speaker’s ruling?
Mr. Martel: Speaking to the point of privilege, Mr. Speaker, the minister said that I, in fact --
Mr. Acting Speaker: Order, please. The hon. member has already spoken to his point of privilege and this isn’t a debate. Perhaps we could continue with the principle of the bill on second reading in order that we might attempt to conclude the debate.
Mr. Williams: Mr. Speaker, I have a point of privilege. The member for Sudbury East suggested that the member for Oriole shot his mouth off. I would point out to the member for Sudbury East that I never shoot my mouth off, that I always speak advisedly, which is more than I can say for the member for Sudbury East.
Mr. Philip: You can go on for hours and hours.
Mr. Makarchuk: That’s a lonely opinion.
Mr. Acting Speaker: Order, please. The hon. member does not really have a point of privilege. Could we continue with the debate on second reading? The hon. member for Wentworth.
Mr. Deans: Thank you, Mr. Speaker.
Hon. Mr. Rhodes: Your leadership campaign is going down the hill.
Hon. Mr. Kerr: You won’t get the over-65 vote.
Mr. Peterson: Go ahead, fur head. You are doing well.
Mr. Deans: That wasn’t very nice.
Mr. Acting Speaker: Order, please.
Mr. Deans: Aren’t you ashamed of yourself? You should be.
Mr. Peterson: I just said “fur head.”
Mr. Deans: Don’t you want to retract that? That was really despicable.
An hon. member: Take it back.
Mr. Deans: Why don’t you take it back --
Mr. Acting Speaker: Order, please.
Mr. Deans: -- and be a gentleman? Be a gentleman for a change.
Mr. Acting Speaker: Order, please. Perhaps the hon. member for Wentworth will continue.
Mr. Deans: Having listened to the trivia from my colleague from London, let me just say that I have listened to a lot of this debate this evening, here and over the speaker in my office; I refer to the discussion of the free market system, put forward by members on the Conservative side and on the Liberal side of the House, both of them speaking of a system as if it somehow existed in the province of Ontario.
I think that to begin with, we have got to try to understand that whatever it is they conjure up in their mind as the free market system hasn’t existed in this province for the best part of the last 50 years. The purpose of this legislation was surely to try to discourage the takeover of land in the province of Ontario by non-residents. That was the original purpose of it. It was an attempt to try to cut down on speculation. It was an attempt to discourage non-residents from owning land and using land in a speculative way.
I think we have reached a point at which there is an honest difference in the philosophical outlook of the parties -- the Conservatives and the Liberals thinking that it’s appropriate and within their concept of what’s in the best interests of the economy of the province of Ontario -- to permit trading in land to take place without any consideration for the residency of the owners of the land and to allow the free flow of money in and out of the country, again without any consideration for the detrimental effect that it has on the cost to the people who live in this province and the people who have to pay the bills.
I don’t quite understand why this took so long, but it seems to me that where we draw the line, where we differ, is this: While it might be expedient at this point in time, because of a slowdown in the development of the province of Ontario, to take some steps to try to encourage non-resident investors to invest further in the province and, thereby, hopefully bring about an upturn in the construction industry -- in the long-term best interest of the province of Ontario, as it applies to this generation and to the next generation and to others beyond that, surely our responsibility is to try to guarantee that, above all other things, the ownership of land will remain in the hands of people who reside, and who make their home, and who have business interests here in the province of Ontario and throughout the remainder of the Dominion of Canada.
That’s the issue. The issue isn’t whether the government wants to take some steps right now to ease a problem that currently exists. If it wants to do that, so be it; let it do it with whatever other means it has at its disposal. But for heaven’s sake, let it not risk ownership of Ontario’s land by taking steps now that will in many ways encourage an influx of money into the province which will not in any way benefit anyone in the province in the long run and which will simply drive prices up even further.
The minister knows, and I know, and anyone else who has looked at business in Ontario understands that in almost every single case the cost of the tax, wherever the tax was applicable, was woven into the final price at the time of the sale of the land or of the enterprise. Because of the nature of the corporate tax laws of Canada that was written off over an extended period of time.
So if this tax was at all beneficial, if it was meaningful, and if it did in fact discourage outside interests from coming into Canada, it certainly didn’t discourage those whose business it was to establish a commercial endeavour or industrial endeavour, who wanted to create employment, who wanted to manufacture goods to produce services. It didn’t discourage those people; it never was intended to discourage those people. Those people were given every opportunity, either by way of exemption or by way of writeoff through their corporate tax structure, to off-set whatever additional costs were imposed by this. And they did that.
What this was intended to do -- and what it should be doing, and why we should be keeping it in place -- was to try to avoid the speculative undertakings of a number of people who were using money, earned wherever it was earned, in or out of the country, but whose interests were not in the development of the province of Ontario, but whose interests were simply in the business of making additional money on the money that they were investing.
I happen to think that it is important for Ontario, it is important for the future of Ontario, it is important for the people that we have responsibility to. It is important that we should draw the distinction. The distinction has to be this: that the government and the Liberals are prepared to see the land of Ontario owned, in any dimension, by anyone from any place. They don’t care whether they are resident or non-resident; whether the money is being held by a syndicate in Sweden or by a syndicate in Switzerland, or brought in from the United States. They don’t care who owns the land in Ontario, because it doesn’t matter to them.
They don’t see it as being important. We do. We think it is important. We think that the ownership of land is vital. We think that the future determination for planning and economic purposes can be made more readily by a government in this country dealing with people who own land in this country, and who live and who work in this country.
I think that is where we part company; it’s just that simple. The other parties don’t care who owns it; they don’t care whether there is speculative profit made on it; they don’t care whether that speculative profit drives up the prices; they don’t care whether those people contribute one iota to the economy. Their only interest is a self-satisfying interest of seeing something that they plan to identify as the free market system working.
Well, we do care. And what we are telling the House is this, Mr. Speaker. If you take a look at the ever-increasing costs as they apply to the construction and development industry, in the vast majority of cases the increasing costs are attributable almost entirely to the changing ownership of land. There have been over the last 10 years, at least, clear indications of intercompany sales, of book sales, in order to appreciate land values, in order to drive the price of land up, in order to create speculative gain for people whose interest has nothing at all to do with the best economic interest of Ontario.
Now that may well happen if Canadians owned that; it could happen. But I suspect, given if one looks back historically, that it is not likely to happen there as it is if it is owned by interests from outside of the country.
So it is important from our point of view, is vitally important from our point of view, that we should attempt, by whatever means there are at our disposal, to dissuade people who do not have any roots in this country, whose interests are simply in the making of money at our expense, from taking over the ownership of the land that is so vital for future needs.
We just frankly think that it may not be the most appropriate tool, it may not be the most effective tool, but it is one tool that can be used to try to maintain the ownership in Canadian hands and to discourage outside interests from involving themselves in investment purely for speculative purposes.
So I suggest to you that in fact, instead of doing what you’re doing and moving towards halving the tax, you should be moving towards imposing a much more severe restriction on those who would speculate, on those who would use the land of this province as a basis for their own usury and greed. We should be taking firm action to make sure that more of the land of the province of Ontario is going back into the hands of residents of this province and this country; we should be taking steps to ensure that over the next decade or 20 years, significant changes occur in the ownership pattern and that those significant changes move away from foreign ownership toward domestic ownership. In the long run, it’s who ultimately owns the land that determines the final price that you and I are going to have to pay --
Mr. Peterson: And how would you suggest we do it?
Mr. Deans: Are you back again? -- that you and I are going to have to pay for all of the enterprises that take place.
It doesn’t matter whether it’s the development of homes for people --
Mr. Peterson: As opposed to homes for animals.
Mr. Deans: -- homes that are already far out of reach of the majority of the average-income people, or whether you are talking about commercial undertakings, the exorbitant prices of which have to be paid for through the consumer prices charged in the stores, or whether it be the industrial developments that take place across the province on land that has been sold at inflated prices, far outside of what they might reasonably be expected to charge; those prices reflect in the cost of the products that are manufactured and sold in the marketplace to Canadians.
We must, as a primary step -- as a first step towards trying to put a curb on the ever-increasing prices and trying to keep out people who would use the very basic resource, the one basic resource that belongs to us -- we have to take steps, we have to take whatever steps we can, this being one very small one, to try and persuade them that we really don’t want them in here for speculative purposes.
If they want to come in and establish a portfolio investment that will in some way or other benefit the development of Canada, the development of Ontario; if they actually want to develop commercial and industrial enterprises that will be beneficial to you and to me and to children that are yet coming; then that’s another matter and they are of course then given exemptions in order to do that.
As my colleague says, and after long deliberations and discussions with many industrialists in many parts of the world, we came to the conclusion, from what they told us, that they were quite prepared to enter into the long-term leases on land that they could lease, as long as they were given assurances that they wouldn’t at some point or other be faced with eviction. Those assurances can be built into the leases. They didn’t expect to own the land; they were prepared to come in and to do what they had to do in terms of development, because they want to be part of the Canadian market, because they wanted entree into the North American market and Canada provided them with that.
Mr. Deputy Speaker: Order, please. I’d like to inform the member speaking that it is now 10:30 of the clock.
Mr. Deans: Thank you, Mr. Speaker. All I want to say then, in my final comment on it, is this: You are absolutely right, we disagree with you. It’s fundamental and it’s clear. We don’t happen to agree that you can play games with the future generation’s needs. We don’t happen to think that you can play roulette with the land ownership of the province of Ontario, hoping some day that it will revert to Canadian hands in some magical way. We happen to think that you’ve got to take concrete and positive steps. This may not be the most forceful one. This may not provide the end-all for all of the things that we want. But I will tell the minister one thing; what she is now doing is running contrary to the best interests of the province of Ontario.
On motion by Hon. Mrs. Scrivener, the debate was adjourned.
Mr. Deputy Speaker: The member for Wentworth North gave notice that he was dissatisfied with an answer given during question period by the provincial Treasurer (Mr. McKeough). According to section 28(a) of the standing orders I deem that a motion to adjourn the House has been made. The hon. member for Wentworth North and the provincial Treasurer will be given five minutes each. I call on the --
Mr. Breithaupt: Point of order, Mr. Speaker. With respect to your interpretation of rule 28 I note in reading the rule that one sentence is as follows: “No debate on any one matter during this period shall last for more than 10 minutes, five minutes to be allowed to the member raising the matter and five minutes to the minister if he wishes to reply.”
Can you advise the House, Mr. Speaker, whether it is the presumption under the rules that whether the minister chooses to reply or not, it is at least an expectation that he would be present?
Mr. Deputy Speaker: I have been advised that it is not necessary for the member of the executive council to be present. The debate would continue under the rule if the member of the executive council was or was not present.
Mr. Breithaupt: It is apparently not much of a debate.
Mr. Lawlor: It makes a farce of the whole thing.
REGIONAL GOVERNMENT FINANCES
Mr. Cunningham: Mr. Speaker, pursuant to the standing orders of the House I am anxious to pursue a supplementary question I raised on June 29. I would have thought, given the fact that I had given sufficient notice, that the provincial Treasurer might have found it necessary to be here tonight. However, in his absence I will pursue this matter in the hope that he ultimately will reply to my question.
The original question raised by the member for Wentworth related to an independent review of the Hamilton-Wentworth region. The Treasurer stated that he was awaiting a reply from the regional municipality of Hamilton-Wentworth and their regional council.
My supplementary question, if you will recall, related to a request pursuant to section 121, subsection 2 of Bill 155, 1973, wherein I requested that a minimum of 50 taxpayers may request a commission of inquiry into any of the affairs of a region or any matter connected therewith. The basis of my dissatisfaction with the Treasurer’s answer to me would be that he ignores the basic right inherent in the aforementioned legislation for citizens, taxpayers, to obtain relief from a system of government that may in fact not be working to the benefit of those residents.
Such a provision I believe is a good one. I have seen it in a number of the various regional bills. But it is only valid, Mr. Speaker, if the government recognizes and respects such petitions. Last week I presented on behalf of my constituents a petition with over 200 names. I would be pleased to submit a petition with over 20,000 names -- and I could get them, I believe -- requesting an inquiry or an independent review of the Hamilton-Wentworth region.
The members might wonder why my constituents would want such an independent commission. Notwithstanding the fact that they didn’t want to get involved in regional government itself, I would say that they are not only suspicious, they are tired, they are fed up with regional government.
I would like the Treasurer to know, through the record at least, that the taxpayers have had it. Imposed in the name of efficiency, with promises of tax savings, the regional government in Hamilton-Wentworth is a sad tale of confusion, duplicity, misadministration, duplication of services, reduction of services, and higher taxes. It is a sad mess.
The Treasurer, if he were here, would recall the recommendations of the Steele commission. Had that report been implemented and regional services implemented gradually with public input, in the democratic process as we know it, the regional system of government as we see it today might have worked. This, of course, wasn’t done and our system of regional government as we have it today is not working.
It is costing every taxpayer in the province of Ontario a great deal of money, for the taxpayers of Ontario supplement the cost of regional government not only through direct conditional grants, they also do it through the cost of running the province of Ontario, TEIGA specifically, to assist the employees of that ministry specifically, in the administration of their duties related to regional government.
In Flamborough, for instance, taxes are up roughly 30 per cent. A taxpayer in the township of Flamborough pays roughly 57 per cent on his tax dollar for regional purposes. In the city of Hamilton, it is 47 per cent.
I am disappointed that the Treasurer of the province of Ontario has not taken the time to respect my question, and I suppose inherently the question from the member for Wentworth, and of course the question of my leader in requesting an independent review.
Mr. Cunningham: I would only say to him through you, Mr. Speaker, that that is indicative, I suppose, of the attitude of this government and the longer that they propose --
Mr. Wildman: Arrogant.
Mr. Cunningham: -- to delay and abrogate their responsibilities, I say the longer they are inflicting the hardship on my constituents. I want to say I am unalterably opposed to that kind of disrespect to my taxpayers and my constituents. I think this is just the height of abrogation of responsibility and the longer that they abrogate that responsibility, the longer they are going to be in a minority situation. John Smith, who said it was a good idea, is gone. Art Meen is gone. John White is gone. Don Ewen is gone. They are all gone.
Mr. Deputy Speaker: Order, please. Your five minutes have expired.
Hon. Mr. Rhodes: You are gone. Sit down. You are gone now. You just got dusted off.
Mr. Cunningham: Oh no, I am not gone. I am in by 10,000 votes.
Mr. Deputy Speaker: Is there any member of the executive council who wishes to speak at this time?
Mr. Breithaupt: You are the only member of the executive council present at this time.
Mr. Deputy Speaker: If not, I deem the motion to adjourn to have been carried.
The House adjourned at 10:40 p.m.