The House met at 10 a.m.
STATEMENTS BY THE MINISTRY
PUBLIC DEFENDER SYSTEM
Mr. Deans: I wondered why the Attorney General was here.
Hon. Mr. McMurtry: I am always here on Friday mornings. I want to inform members of the Legislature of a study under way into the merits of adding a public defender element to the established Ontario Legal Aid Plan to improve services to the people of Metropolitan Toronto.
Mr. S. Smith: Another Ombudsman.
Mr. Deans: I thought the Attorney General had already announced that. I heard about it on the air.
Hon. Mr. McMurtry: During the last week some misinformed and self-serving statements have been made about this issue. As a result, the issue has been somewhat seriously distorted and, in my view, the public has been somewhat misled.
Mr. Nixon: It is being added on to all the time,
Hon. Mr. McMurtry: In so doing, these persons have maligned the office I hold and the crown attorneys of this province, together with hundreds of dedicated men and women in Canada and the United States, who are devoting their talents and energy to the provision of public defender-type services. I rise this morning to respond specifically to some of the nonsense that this issue has given rise to and to set the record straight in the public interest.
First, it is crucial to recognize that my ministry’s study of the public defender system commenced after the Advocates’ Society of Ontario, an association of experienced litigation counsel, requested my assistance last December with a study of the topic on which they were embarking. Our efforts since then have been complementary and co-operative. The society’s representative, Mr. David Humphrey, QC, accompanied members of my staff on an investigation of the Montreal public defender office. Further, the legal aid committee of the Law Society of Upper Canada is also investigating the public defender system, again in a co-operative effort with my office. The chairman of its committee on public defenders has met with officials of my office to discuss this topic. They are presently planning a joint investigation of the Chicago public defender office.
Secondly, I can assure members that the public defender system is being investigated, not out of cost considerations, but rather because of the ever-increasing number of concerned judges and lawyers who have approached me to discuss the poor quality of legal representation being offered by some lawyers under the present legal aid system.
This concern, however, should not overshadow the continuing dedication and excellence of the majority of the lawyers who participate in the legal aid plan. Having the constitutional responsibility for the civil rights and liberties of the citizens of this province, including persons charged with criminal offences, I cannot let this concern go unanswered.
Third, I want to stress that my office’s study of the public defender system is limited to considering its utility as an addition to the present legal aid system and not as a replacement for it.
Public defenders in Montreal and across the United States are among the most vociferous advocates of the need to ensure that the private bar is actively and substantially involved in the provision of legal aid defence services. It is apparent that the Ontario critics are not aware that most of the good public defender offices in the United States handle not more than 10 to 80 per cent of the defence work, with the remainder being handled by the private bar. It is apparent also that our critics have not considered the many ways in which a public defender system can enhance and strengthen the private criminal bar.
Mr. McClellan: Who are these critics?
Mr. Germa: He is raising a straw man.
Hon. Mr. McMurtry: In Montreal, the private defence bar, which was almost non-existent 10 years ago -- that’s in criminal matters -- has been virtually created by the public defender office.
No decision has yet been taken on whether to set up a public defender office in Toronto, but I can tell the members that I am very interested in the concept. A properly-run defender office can guarantee its clients the services of a criminal specialist, acting within the scope of his or her experience and having available senior specialists for supervision and consultation.
At present, in Ontario there is nothing to prevent a lawyer fresh from the bar admission course from taking a complicated murder trial, nor is there any way to prevent a lawyer whose practice is substantially real estate work from doing the same. Compare this to the public defender office in Washington where new attorneys undergo a six-week, fulltime course in criminal law procedure and trial tactics before taking a case. This course includes case-law study, together with videotape sessions, in which the new lawyers practise their ability to translate case law into advocacy. This course is followed by a continuing program of supervision by and in consultation with senior counsel.
In addition to this training and supervision, the good public defender offices also provide two other vital services. The first is the availability of fulltime investigators who are able to commence work on a case the moment it is received. This is obviously crucial, for example, where an alibi defence is available. It is also of great assistance in preparing any attack on the prosecution’s case or in deciding whether a plea may be appropriate. At least as important is the provision of thorough sentencing preparation, a matter more commonly discussed than often implemented by the private bar.
The better American public defender offices have fulltime social workers who work with convicted clients on diversion programs, job-finding, family support and care and a whole range of services designed to remake the offender before sentencing. Washington, for example, has nine social workers for a staff of 19 criminal lawyers.
I want to emphasize something else which has been entirely overlooked by these critics, who do not appear to have troubled themselves with the slightest bit of research or investigation.
Mr. McClellan: Who are these critics who are taking up so much of our time?
Mr. Cassidy: The Attorney General is very sensitive this morning.
Hon. Mr. McMurtry: Good American public defender offices make these specialized services -- investigative social workers, library and research materials and educational initiatives -- fully available to members of the private bar who are acting for legal aid clients. We would do the same in Toronto if we were to establish such a system.
Mr. McClellan: He doth protest too much.
An hon. member: Overkill.
Hon. Mr. McMurtry: My object, if we were to implement a public defender system, would be to improve the private criminal bar, not to destroy it. The private criminal bar would continue to play the lead role in legal aid defence services. But, by establishing an office of fulltime, highly specialized and trained criminal lawyers, practising in an office where the supervisory and consultative services of senior counsel were always available and where a full range of support services were constantly at hand, I would hope to set a standard for defence services which the private bar would strive to meet, rather than rush to deride. Such a defender office would have no captive clientele, but would attract and retain clients only by gaining a reputation for expertise, dedication and results.
Persons charged with criminal offences who qualified for legal aid would continue to be able to retain any lawyer who would accept a legal aid retainer. The public defender office would simply be one of their options. The onus would, therefore, rest solely on us to create an office which, because of the competence and vigour of its services, would be retained by accused persons.
By proceeding in this fashion, we would be helping to discharge the legal profession’s obligation to ensure that quality defence services are available to all accused persons, regardless of their means, without encroaching upon their freedom of choice. We would also be improving the standard of services generally delivered by the private bar, both by increasing the facilities available to private practitioners and by providing the incentive of skilled competition.
Because there seems to be some doubt about the remarks I made earlier in the week, let me also stress that any public defender office we would establish would be completely independent of government. Its lawyers would answer only to their directors who would report to an independent board, be it the law society or some other independent public body.
There are numerous other aspects of these services which show great promise but which I have not commented on. One of these is the ability to provide neighbourhood offices close to the clientele, thus helping ensure both early intervention and effective rehabilitation programs. Another is the capacity for test-case-initiated law reform inherent in an office of specialist lawyers working together on a daily basis in the criminal courts.
I could go on at some length --
Mr. Deans: What do you mean you could go on at some length? You have gone at some length.
Mr. Martel: Go ahead. Give it to us.
An hon. member: Why don’t you do it out in the hall?
Hon. Mr. McMurtry: -- but I feel that these matters ought to be discussed and investigated in conjunction with the private bar. To this end, my staff will continue to meet with and make their research results available to the advocates’ society and the law society. We will be willing to include the Criminal Lawyers Association in the process if they want to become part of it.
Mr. Swart: Are you trying to take the heat off Newman?
Hon. Mr. McMurtry: I regret that an element of confrontation and a large degree of distortion have been introduced into the consideration of this important topic. I have endeavoured today to dispel that distortion, and I can assure the honourable members that it is my desire to continue to pursue this issue with, rather than against, the private bar of Toronto. In so doing, my goal is to ensure that access to quality legal services, and therefore to justice in the criminal courts, is available to all members of the public. The public interest demands no less.
In addition to attacking the public defender system, the Criminal Lawyers Association has launched an unwarranted and irresponsible attack on the legal expertise and ability of crown counsel throughout this province. I cannot allow such outrageous allegations to remain unanswered.
Mr. S. Smith: Isn’t he sensitive?
Mr. Warner: Violence in the courtroom. Are you going to charge them?
Hon. Mr. McMurtry: Senior counsel in my ministry quite properly take umbrage at these statements and have provided me with a copy of a letter which has been delivered to the president of the Criminal Lawyers Association this morning. I am tabling a copy of that letter for the benefit of the members.
Mr. McClellan: Sue the rascals.
Hon. Mr. McMurtry: As a former defence counsel and now as the senior law officer of the crown, I adopt and echo the disappointment expressed by counsel in my ministry.
ARTS COUNCIL GRANT
Hon. Mr. Welch: Mr. Speaker, one of the morning papers carries a story today dealing with a grant from the Ontario Arts Council to some cultural organization.
Mr. Deans: Does the minister want to take umbrage?
Mr. Breithaupt: They are doing the next issue on Frank Drea next week in the Caribbean.
Hon. Mr. Welch: I have asked the arts council for a full explanation. I don’t expect to have that before the end of the sitting today, but certainly I would share that with the members of the Legislature at the first of the week.
Mr. Breithaupt: So don’t ask.
Hon. Mr. Welch: I felt I should at least make that acknowledgement just before I go downtown to speak to a convention on some other subject.
Mr. Breithaupt: There’s nothing else to ask then.
Mr. T. P. Reid: That’s a new wrinkle. The minister admits he doesn’t know in advance. That will destroy the question period completely.
Mr. S. Smith: That’s right. If every minister did that, we’d have nothing to ask.
Hon. Mr. Davis: We are thinking of doing that every day.
Mr. Breithaupt: You might as well, rather than doing what you’re doing.
Mr. S. Smith: An admission of ignorance may be your best offence.
Mr. Breithaupt: A group disclaimer.
Hon. Mr. Welch: Mr. Speaker, rising on a point of privilege, it should come as no surprise to members of this House that the government respects, at this stage, the autonomy of the Ontario Arts Council; therefore, I would have to get some information from those who made the decision if, in fact, such a decision was made.
Mr. S. Smith: The Attorney General and the former Attorney General are so touchy today, I think I’ll leave them both and ask a question of the Minister of Consumer and Commercial Relations.
Has the minister informed himself concerning some of what I think are the very excellent practices of certain insurance companies in offering lower rates for fire insurance to those householders who will install smoke detectors in their homes? Is he familiar with this? If he is, can he give us some indication as to how widespread that practice of rate lowering is, and would he tell us what he has done and what he will do to encourage more insurance companies, as a matter of course, to offer lower rates to those households which have smoke detectors installed? Given the recent tragedies, I think it’s more and more evident that such smoke detectors would be of great value.
Hon. Mr. Grossman: Well, yes. The Leader of the Opposition is quite right that it’s a good move. In fact we were asked quite some time ago, as I recall -- I don’t have the details in front of me -- to look into what was alleged to be a problem, in that some insurance companies were sending out -- I think it was with renewals but I would have to check precisely -- some sort of offer whereby smoke detectors and fire detectors could be purchased at a somewhat inexpensive price; and I think together with that same mailing, it indicated that the purchase of that equipment would reflect very favourably on their rates.
Some people suggested to me at the time that perhaps that was unfair. We had a complaint from someone saying that those smoke detectors should not be offered at a bargain; it was unfair to the retailers. Well, as we answered them at the time, anything that can be done to make the availability of these devices greater, reducing the price and encouraging people to buy them, we were fully supportive of.
There are companies that are offering this sort of incentive and we do fully support it. We can’t give you a list of the companies. I don’t happen to have that with me this morning but they are well aware of our encouragement towards this trend.
Mr. S. Smith: By way of supplementary: Let me be clear -- since it’s a Friday, perhaps the Speaker will give a little extra leeway -- we are not in favour of insurance companies getting into the business of undercutting retailers by selling smoke detectors --
Mr. di Santo: Speech, speech, speech.
Mr. S. Smith: Correct, yes. But would the minister tell us precisely what he has done to encourage the insurance companies to offer lower rates for homes that install their own smoke detectors rather than the insurance companies’ smoke detectors and precisely what has he attempted to do, who has he written to, what has he said to them, what has been the response and what will he do now?
Hon. Mr. Grossman: Obviously, our role with insurance companies is, of course, not to tell them how to set their rates.
Mr. MacDonald: Heaven forbid.
Mr. S. Smith: Beg them.
Hon. Mr. Grossman: Our role with insurance companies is, of course, to make sure, for example, that their rates are reflecting properly the experience, for example on seat belts, so that any benefits that should come back to the policy holder do in fact get back. Now, this horrible incident occurred just a few days ago.
Mr. S. Smith: Again last night.
Hon. Mr. Grossman: The development over the last few months is well known by the insurance industry to be one looked upon favourably by us. There is no question that from time to time my superintendent of insurance will indicate to insurance companies that a certain trend is or is not, we think, a happy one. I think I have made clear to the Leader of the Opposition that they are well aware that we look favourably upon this approach. They know that -- and I might say that they knew that quite some time ago, not just after the fire this week. I might also say with regard to that first point that, quite frankly, we favour anything that will get those devices into people’s houses; whether that amounts to making those devices available at less than the retail stores are selling them for or not, I am not concerned. I think it’s much more important that however they get in, through encouragement, through bonuses, through undercutting, whatever -- anything that the insurance companies can do to make those available at a low price, any method whatever -- I am fully supportive of, and I am surprised to hear the Leader of the Opposition is not.
Mr. Cassidy: In view of the comments by the minister, saying that the government is in favour of any measure which would encourage home owners to acquire smoke detectors to protect themselves from the kind of tragic deaths which we have had in this city this past week, is the government prepared to apply to smoke detectors, the principle which now applies to safety equipment in industry and to exempt smoke detectors from sales tax as part of an overall program of encouragement and promotion which would be carried out through municipalities and across the province to ensure that home owners would be strongly encouraged to acquire these smoke detectors in existing housing?
Hon. Mr. Grossman: With or without that sales tax exemption, as I am sure the member knows, since December 31, 1975, under the Ontario Building Code, administered by my ministry, all new houses must have these devices. That looks after all new homes, with or without the retail sales tax bonus.
Secondly, I would point out that we are aware of the problem with older houses. The Ontario Building Code itself can’t deal with older houses. The honourable member may want to canvass my colleagues with regard to changes to some other legislation. I believe the Solicitor General (Mr. Kerr) might be able to help the honourable member. With regard to the retail sales tax credit, obviously my colleague the Minister of Revenue (Mr. Maeck) would be in a position to deal with that.
I should also say that some municipalities have exercised the powers they do have to make the installation of these devices mandatory in existing houses. I applaud those municipalities. I think all municipalities should do this. When one measures the cost of some other things that municipalities require for new and existing houses, one wonders why all municipalities haven’t exercised the power that some have to make these devices mandatory.
Mr. Kerrio: Supplementary, Mr. Speaker: In view of the fact that the minister is encouraging people to install smoke detectors, I wonder if he would give this House and the people who are going to use them some assurance that any detector that is sold and installed in the province will be of a completely dependable quality and that we will not have any detectors on the market that will not be completely dependable.
Hon. Mr. Grossman: I would point out that my ministry some time ago issued an information bulletin setting out the various kinds of smoke detectors, reporting on what the different ones do. It even goes so far, for example, as to talk about where and how they should be installed. We also point out the ones that are approved under the Ontario Building Code; and recently we indicated that the new and different type of detectors, the photoelectric ones, are about to be added to the Ontario Building Code. Those are the ones -- and they are contained in the information booklet -- that we find acceptable and reliable.
We have also pointed out, in the information bulletin and other places, that any unit which anyone proposes to buy should indicate that it has been tested by the Underwriters’ Laboratories of Canada (ULC). We have made that quite clear.
Mr. Kerrio: Should? I am asking if the minister will make it mandatory.
Mr. Foulds: Supplementary: Could the minister indicate what action he plans to take? He has indicated, for example, that in organized municipalities, the municipalities could take some initiative. But is it not even more important, in his opinion, to take initiatives with regard to smoke detectors in unorganized municipalities and unorganized territories where, in fact, there is no fire protection, and the only protection that many people have from tragic fires are the smoke detectors?
Hon. Mr. Grossman: I apologize to the member. All my ministry can do is to administer the building code and put in the provisions for the building code. Also, of course, we can do the other things we have talked about: make sure that good and reliable devices are in the marketplace and give consumers guidance. The member might want to ask my colleague the Solicitor General, I think, about that situation.
Mr. Foulds: Could I redirect my question to the Solicitor General, Mr. Speaker?
Hon. Mr. Kerr: Mr. Speaker, in a situation like that there would have to be some regulation or legislation passed by the province. At the present time the new fire code is being drafted and put together by my ministry and the Ministry of Consumer and Commercial Relations. We hope that that will be available some time this year. If there were some agreement, we could include a provision in that legislation that all homes should have some type of smoke detector or alarm system that would be available, that would not be unduly costly and, as one honourable member mentioned, that would work in times of emergencies or fires of any degree.
URBAN TRANSPORTATION DEVELOPMENT CORPORATION
Mr. S. Smith: In the absence of the Minister of Transportation and Communications, I wonder if the Premier would respond to this question:
Can the Premier tell the House what the thinking of the cabinet was in its apparent decision against the UTDC merger, or partnership arrangement, or partial acquisition or whatever, with some other company, be it Canadair or KVN, a decision which I gather was before cabinet for consideration and which, according to Mr. Foley, has been turned down by cabinet?
Can the Premier tell us what the thinking was behind that decision, what the nature of the offer was, the precise details to the extent that he’s able to share them with us, and the reason that the cabinet has turned this down?
Hon. Mr. Davis: I can’t give the honourable member many precise details. There has been some discussion related to the possible sale of UTDC. One of the potential purchasers, apparently, was Canadair. Canadair is a crown corporation -- a crown corporation in the sense of the word that it is a federal crown corporation.
I think the feeling of cabinet was that in terms of research, in terms of the higher technology, in terms of the desirability of developing this expertise within the province of Ontario, listening to the very constructive observations of the Leader of the Opposition in my estimates that the government should he giving encouragement to greater research, development, higher technology, I think it is fair to state that the feeling of the government was, and is, that to dispose of UTDC to a company perhaps not only geographically located in other parts of this country, but where the potential then for industrial research and high technology development might not move forward with the same potential as here in this province, really didn’t make a great deal of sense.
While I know the Leader of the Opposition -- everybody’s entitled to his own point of view -- is unfortunately less than enthusiastic about the activities of UTDC, and while I understand that politically some people might welcome a sale, perhaps with a small profit to the province of Ontario, it is a rather clear indication if that potential exists that, as is the case in some instances, there are those outside our own province or those who aren’t as close to government who probably have a greater appreciation of what is happening in UTDC and its potential than is perhaps shared by some of the members opposite.
Without getting into a lengthy discussion or debate here this morning, I accept the feelings of some members opposite that they would not have the government involved in an area of research and development that has been by and large, neglected by the private sector.
I can give the Leader of the Opposition the very tangible reasons why the private sector has been reluctant to get into this area of research and development. It’s simply this -- in the final analysis there is only one purchaser for this type of equipment. That purchaser is, by and large, government in one form or another, whether it happens to be the TTC, the Hamilton -- whatever the transportation utility there is called -- Ottawa, in most states of the Union, the municipalities or perhaps the state levels of government.
My limited experience indicated to me that there was very little likelihood, as he has suggested, that the private sector would, in fact, move this type of initiative and we felt as a government, and continue to feel, that the potential is there, the scientific knowledge could be beneficial. It is, in fact, high technology, it is providing jobs, and it is an area that not many other jurisdictions are exploring. I really think if the Leader of the Opposition were consistent with some of his other observations about an industrial strategy or economic strategy, if he really were totally logical in his approach he would be saying to the government of Ontario, “I’m glad you’re not considering selling this to Canadair.”
Mr. Conway: It would be a lot cheaper if you could get Kirk Foley a nomination and get him out of it.
Hon. Mr. Davis: Oh no.
Mr. T. P. Reid: You got into it because of Spadina, not because of any other reason.
Mr. S. Smith: Supplementary: I’m trying to understand what the Premier has said in response to my question. Do I take it that the nature of the offer which Canadair made -- and as I recall, I thought Canadair had its shares held by CDC rather than being a crown corporation, but I could be --
Hon. Mr. Davis: CDC is a crown corporation.
Mr. S. Smith: That’s different, because CDC can be held by private individuals, and the Treasurer says things from time to time about favouring the private sector, whatever that means to you.
Mr. Nixon: That’s what you’re talking about -- consistency.
Hon. B. Stephenson: He doesn’t know. That’s schizophrenia.
Mr. S. Smith: In any event, do I take it that Canadair offered to purchase UTDC, in whole or in part, for a price that would represent, considering the investment we’ve already made in that, a profit to the province, and the government has turned it down because it feels the private sector, or the semi-private sector that they might represent, ought not to come in?
Would the Premier please be consistent about this? If the government gets a good offer from the private sector, the Premier comes in and tells us that this means they know how valuable it is so why sell.
Mr. Martel: Question.
Mr. S. Smith: If we get a bad offer the Premier says that only proves that the public sector has to stay in the business because no one else will do it. Which one is it?
Hon. Mr. Davis: I didn’t say either, as a matter of fact.
Mr. S. Smith: I mustn’t hear very well then.
Mr. Martel: What was the offer?
Hon. Mr. Davis: I don’t think that Canadair in fact made an offer. There have been some informal discussions. I am not aware of any formal offer from Canadair. I am aware that there was --
Mr. S. Smith: What did you turn down?
Hon. Mr. Davis: -- and maybe continues to be -- I didn’t say we turned down an offer.
Mr. Cassidy: Supplementary: In view of the government’s decision to continue with the UTDC’s research in areas which the Premier was responsible for in the first place and which, among other things, led us to the Krauss-Maffei debacle of three years ago, can the Premier explain how he expects the municipal transit systems of the province to be able to afford the operating costs of these systems that the UTDC is developing, given the fact that the government has been steadily withdrawing its support of operating costs to transit in the major cities of the province?
Hon. Mr. Davis: I really think we haven’t been. In fact, the figures will prove we haven’t. Secondly, I think the hon. member perhaps is sufficiently aware of the activities of UTDC to understand that there are several facets to it. One has been the design and development of the streetcar that is being sold to Metropolitan Toronto, a very important part of business that has led to fairly significant economic activity in this province.
Mr. McClellan: They reinvented the streetcar.
Hon. Mr. Davis: I should point out to the honourable member it has led to certain jobs -- several hundred of them as a matter of fact. The member who is sitting immediately on the geographic left and philosophic right of the leader of the third party will understand what I’m talking about. It’s been very beneficial to that part of the province and UTDC deserves some credit for it.
With respect to the other aspect -- what UTDC is in the process of attempting to develop -- no one can guarantee its ultimate success --
An hon. member: Not the square wheel again.
Hon. Mr. Davis: I don’t know whether it’s on wheels or what it is, but it is an intermediate capacity carrier, which most transit people will agree will be extremely beneficial if the technology proves out. Quite obviously the decision then, assuming it is a success, will be that of the local municipalities or transit authorities. The question of finance, the question of operating subsidy, if the costs are less per mile than subways -- which it is proposed to be -- if the carrying capacity is about, say, 60 per cent of subways and if the operating costs are less than 50 per cent of a subway, and construction cost, once again, substantially less, then I think the economies of it should become apparent even to the leader of the New Democratic Party.
To ask at this point why we carry on with this research or experiment, because we have reduced our funding by way of operating commitment to the municipalities, I think is really a very fallacious question. It doesn’t represent the better thinking of the honourable member and I think the kind of answer he should get is that which I have given.
Mr. S. Smith: Supplementary: Is the Premier aware that Mr. Foley and I were on radio together and Mr. Foley made a clear statement that a merger proposal with Canadair had been put before cabinet and had been turned down? Did he know what he was talking about? Is there any accuracy to the statement that that man made on the radio? If there is some accuracy, could the Premier tell us what was the proposal and why was it turned down?
Hon. Mr. Davis: Mr. Speaker, I am delighted to know that the Leader of the position and Mr. Foley were on the same radio program together. Perhaps now there is a greater measure of understanding and agreement.
Mr. S. Smith: He is just about convinced.
Hon. Mr. Davis: I don’t discuss what goes on in cabinet. I can only say to the Leader of the Opposition that cabinet was not presented with a detailed proposal for purchase, in whole or in part, by Canadair. Cabinet has evaluated certain options that are available to us, whether it was Canadair, KVN or anyone else. The decision of the government has been, and is, that while there has been this interest -- I can’t say to the Leader of the Opposition how firm the interest, the dollar amount, or how definitive -- we think it is in the interest of the people of this province in terms of the economic activity, in terms of the research, development and high technology, that UTDC stay in business. That was the extent of the cabinet decision rejecting other possible options but not related specifically to an offer from Canadair, although I am sure there have been some informal discussions, because Canadair is one of those doing some of the technical work for UTDC.
Mr. S. Smith: You are holding out for $1.98?
Mr. Deans: Maybe they can show some potential.
CHAIN STORE DISCOUNTS
Mr. Cassidy: I have a question for the Minister of Agriculture and Food. I would like this minister to tell the Legislature specifically when he first learned of the practice of the two per cent deduction which Loblaws and other major supermarket chains were making on their invoices to fruit and vegetable growers in the province of Ontario?
Hon. W. Newman: Mr. Speaker, I already answered that question yesterday. If the member checks Hansard, he will find that I did answer it.
Mr. Warner: You had several answers.
Mr. MacDonald: When?
Hon. W. Newman: It was just last week; Wednesday or Thursday of last week.
Mr. Cassidy: When?
Hon. W. Newman: Mr. Speaker, while I am on my feet I would like to say if I had anything to do with the interruption in the House yesterday, I apologize to you. I was just getting a little annoyed. As I said last week, we moved on it as quickly as I heard about it when it was brought to my attention.
Mr. Cassidy: Supplementary: I gather the minister is saying he first heard about this on Wednesday or Thursday of last week. Is that correct?
Hon. W. Newman: I said it was brought to my attention on Wednesday or Thursday of last week.
Mr. Cassidy: Can the minister explain who in the ministry is doing any surveillance about the way in which supermarket practices are impinging on growers and other producers in the province of Ontario? What is the role of the Ontario Food Council to prevent this kind of kickback taking place, which is undermining the role of marketing boards in the province of Ontario and undermining the position of growers?
Hon. W. Newman: I would just point out to the member that the food council does a certain amount of monitoring within the limitations of our staff. As far as discounts are concerned -- I used the word “discounts” yesterday --
Mr. Warner: Kickbacks.
Hon. W. Newman: -- I suggested yesterday that I would look into it further. I have had further discussions with the Attorney General (Mr. McMurtry), the chief law officer of this province, and have asked him to look into it further legally. I anticipate he will be making a statement in the House later next week.
Mr. MacDonald: Supplementary. The minister says he learned about it last Wednesday. In his investigation, has he discovered when anybody in his ministry learned about it?
Hon. W. Newman: When it was brought to my attention by some of my own staff, I immediately moved on the situation and we are still investigating the matter further.
Mr. S. Smith: When did they learn of it?
Mr. MacDonald: Mr. Speaker, that was not my question. I understand the minister has told us 756 times that he moved as soon as he heard about it. My question was: In his investigation, has he found out when it was first brought to the attention of anybody in his ministry, any branch of his ministry?
Hon. W. Newman: Mr. Speaker, I said we are looking at the total matter at this time. I have talked to some of my staff, as late as this morning, further on this. We are trying to find out who has sold to these chains; whether dealers, brokers, or if there is any direct selling by producers. We are trying to get a handle on the total situation.
Mr. MacDonald: Mr. Speaker, I rise on a point of privilege. The minister has listened to me ask the question twice: When was anybody in his ministry first informed? Twice, he has deliberately not answered that question. What can one do about it? Can I just repeat it a third time?
Mr. Speaker: The Minister of Agriculture and Food, as is the case with any other minister, can answer a question in any way that he sees fit.
Mr. MacDonald: I repeat the question for the third time: When was any branch of his ministry first informed of this practice?
Hon. W. Newman: As Minister of Agriculture and Food all I can tell the member is what I was informed. I do not know and I cannot give him details of that answer as to when our people were aware of the situation.
Mr. MacDonald: Will you find out?
Mr. Foulds: Why didn’t you ask?
Mr. MacDonald: Why didn’t you ask when you investigated?
Mr. Warner: You didn’t bother to ask. What a ministry!
An hon. member: Nobody accused you of kickback schemes.
Mr. MacDonald: He is in collusion with Loblaws. Who are you kidding?
Hon. B. Stephenson: What an idiotic remark for the member for York South to make.
Hon. W. Newman: Mr. Speaker, on a point of privilege: I am not trying to cover anything up at any time. I would point out to the members that I said yesterday that if there was any wrongdoing and if it was illegal, the appropriate people would be dealt with. I don’t like the inference that I am trying to cover up anything -- because I am not trying to cover up anything.
Mr. MacDonald: You first declared there was no wrongdoing before you investigated.
Mr. S. Smith: Would the minister undertake as soon as possible to inquire within his ministry to determine for himself at what point in time people within his ministry were first made aware of this two per cent practice going on? Will he report to the House the date at which someone in his ministry was first made aware of this practice and what was undertaken thereupon?
Hon. W. Newman: I have a very competent staff in my ministry. If there is a problem that arises in the agricultural industry, I am notified by my staff. The member has asked me when was my staff first notified. I will try to find that out for him.
Mr. MacDonald: Correct. That’s what I asked you four times.
Mr. S. Smith: And the minister will tell us when he has found out?
Mr. Swart: Supplementary: Because the minister has been very vague on what specific steps he intends to take, will he tell the House now if he will contact in writing Loblaws and Dominion Stores and ascertain from them the exact amount of money they received in discounts, and tell them that he expects them to return that to the farmers?
Mr. S. Smith: Bette, you don’t know anything about this.
Hon. B. Stephenson: Neither do you.
Hon. W. Newman: It is quite obvious that the member who is asking the question doesn’t really understand what the question is that he is asking. As I have already said this morning, any discount that was made was, by and large, done through brokers and dealers.
Hon. W. Newman: Just listen, will you? Don’t get me upset this morning.
Mr. Swart: You have a lot to be upset about.
Hon. W. Newman: I said we were investigating the producer sales to the chain stores. I said when the Attorney General, the chief crown law officer of this province, whom I talked to yesterday --
Mr. Swart: Will you answer my question?
Hon. W. Newman: -- has a legal opinion, it will make it a lot easier to deal with this particular situation.
Mr. Swart: Don’t worry about the legal opinion only.
Mr. McGuigan: Supplementary: In view of the fact that this has been a continuing problem ever since we have had produce in the chain store industry, and in view of the fact that I mentioned in my speech on Tuesday -- the minister will find it in Hansard -- the reluctance of people to come forward, would the minister give us some assurance that his ministry is prepared to move and enact legislation, something along the lines of the Combines Act, which does impinge on this to some extent, to end this terrible practice?
Hon. W. Newman: When I have the full legal opinion from the chief law officer of the province of Ontario regarding -- I think the member’s leader mentioned the Business Practices Act, and there was some discussion about the Combines Investigation Act, which is federal legislation -- and we find there is something illegal or wrong that has to be corrected, then certainly I am quite prepared to look at legislation.
Mr. Cassidy: I have a question of the Minister of Industry and Tourism. In view of the rift between the Ministry of Industry and Tourism and the Treasury ministry over the appropriate steps to be taken to build up the automobile industry and the automobile parts production industry in this province, can the minister explain the nature of that rift; why he disagrees with the Treasury’s findings that we could have 25,000 more jobs and more than $800 million in investment, if we had a fair share of industry’s production in this province; and how Ontario can expect to get a better deal from the automobile industry, if two major ministries of this province are in public dispute over whether or not there is a problem?
Hon. Mr. Rhodes: There is no rift or difference of opinion between the Treasurer (Mr. McKeough) and me.
Mr. Warner: Oh, come on!
Mr. Cassidy: Supplementary: In view of the fact that the minister, when speaking to the Automotive Parts Manufacturer’s Association, was quoted as saying that his department viewed with less than full approval the Ontario study that was released last week, and in view of the fact that he said that we must keep this “in perspective,” can he say exactly what those comments mean if they do not mean there was a rift between these two ministries?
Hon. Mr. Rhodes: Mr. Speaker, first of all, if the honourable member will look closely at the article, of which I think he probably has a copy, he’ll note the only part in quotes is where it says we agree in principle that there is a serious imbalance in auto trades. The previous paragraph is a comment by the person who wrote the particular article. It is not in any way relative to the remarks I made; nor would my remarks indicate I disagree with the Treasurer. What I said yesterday, and I will say again today, is that we have every reason to believe -- and we are working towards clearing up the problem -- that we are not getting a totally fair share of our investment out of the automotive industry.
Hon. B. Stephenson: Right.
Hon. Mr. Rhodes: We know that and we are working towards trying to solve that. What I did say though is that over the past three years we have been experiencing some growth in the automotive industry in Ontario. Eleven thousand new jobs have been created. Now, I’m not suggesting that is a fair share. I am simply saying that has been happening. So there is no difference of opinion. And, please, if you are going to quote from the paper, quote what has been quoted, not someone else’s opinion.
Mr. Ruston: Supplementary: With regard to the report that we’re discussing, is he aware that imports from offshore countries were included and not only imports from the United States?
Hon. Mr. Rhodes: Mr. Speaker, again, as I said not too many days ago, there are all sorts of formulas and numbers being used. It’s so confusing at times. And I have heard the comments made by the Minister of Industry, Trade and Commerce in which he disagrees with the figures we’ve produced, saying we are not including the offshore. There are so many different sets of figures around and I don’t know how you are ever going to arrive at a number which you can put forth and say, this is the way it works.
Mr. McClellan: A little work.
Hon. Mr. Rhodes: Well, the honourable member says “a little work.” There’s considerable work going on by the federal government, by the people in my ministry, by the United Auto Workers by the auto industry itself; and we all come up with different numbers. I don’t know what the basis is. What the member for Essex North refers to is one set of numbers that has been used.
Mr. Deans: Why don’t you establish a joint committee?
Hon. Mr. Rhodes: Yes, we know you can work that in.
Mr. McClellan: You can rely on it, Mr. Speaker.
Hon. Mr. Rhodes: I think you are right.
Mr. Bounsall: Just a comment to the minister. Any sort of work which the Ontario government produces in this field is likely to produce more and better figures --
Mr. Speaker: Question.
Mr. Bounsall: -- than the feds do and have in the past. But apart from that, since my talks with the auto company executives, particularly Chrysler, have indicated that there is in fact a vast field out there for entrepreneurial work in the auto parts industry, particularly in supplying --
Mr. Speaker: I don’t hear a question.
Mr. Bounsall: -- small parts continent-wide, would the minister consider making an analysis of what parts may well be produced in this area and think of giving whatever loan incentives may be necessary to encourage manufacturers in Ontario to move into those proven areas?
Hon. Mr. Rhodes: Mr. Speaker, I believe that the sort of information that the honourable member is referring to as to the potential markets and the potential for manufacture of just these auto parts, has been and is being gathered within the ministry. Where we have had some difficulty -- and I have had this discussion with the companies as well; I’m talking about the manufacturers -- there has not perhaps been the investment that should have been made by the auto parts manufacturers. Right now there is consideration being given at the federal level for the development of an enterprise development corporation. That has not been worked out in detail. But the availability of funds -- and you are getting now into the incentive area -- is something we have talked about here.
Mr. Cassidy: Loan area, you said.
Hon. Mr. Rhodes: In the loan area, fine. But that money could be made available under the development corporation and if there is some investment required and the companies are prepared to make that investment, I am sure we would look favourably upon getting involved in loans. But remember that many of these larger companies are saying to us: “We really don’t want incentives and loans. Will you just make the investment climate in your province a little better for us and we’ll make our own investments.”
Mr. Kerrio: Supplementary, Mr. Speaker: In view of the fact we get very little consideration in the design of these automobiles -- and I don’t know whether that is considered in the man-hour involvement as it relates to our fair number of jobs -- I wonder whether the minister is aware of the feelings of Don McPherson, president of General Motors, who says the federal auto pact between Canada and the United States should not be renegotiated.
Mr. Samis: Why do you have to quote him?
Mr. Kerrio: And is he aware that the chairman of Ford Motor Company, Roy Bennett, says Canada must make itself competitive with many of the 50 US states which are seeking to attract new industry by offering a wide range of incentives? In view of these two top management people, of General Motors and Ford, having these kinds of views, what is the minister and maybe the office of the Premier going to do to make certain that this kind of thinking doesn’t prevail or we won’t get anywhere?
Mr. Haggerty: The Labour government in England provides that incentive.
Hon. Mr. Rhodes: Mr. Speaker, we are fully aware of the statements that have been made by Mr. McPherson and Mr. Bennett because we read the same newspapers the member does. Obviously, we know what they’re saying and, in fact, we have talked with them
Mr. J. Reed: That’s about all you know, too.
Mr. Kerrio: What are you doing about it?
Hon. Mr. Rhodes: I’ll tell the honourable member what we’re going to do about it. Let me tell the member what the Premier’s office and I, and others on this side, will be doing about it. We’re going to go out and work our butts off to defeat that silly government that’s in Ottawa right now and put somebody in who will do something about straightening out the auto pact business.
Mr. Foulds: You are going to support Ed Broadbent?
Mr. Lewis: That’s the first time the Premier knew what he was doing in the next federal campaign.
Mr. Kerrio: Have you got somebody in the wings that you’re not telling us about?
Mr. Cassidy: The minister’s naive faith in the curative powers of Joe Clark is both touching and misguided.
Hon. Mr. Davis: You people will come a poor third.
Mr. Cassidy: A final supplementary: If, after 14 years of the automobile free trade agreement, Ontario is still wondering publicly which set of figures is the correct one to tell what is happening in the automobile industry, would the minister not agree that Ontario’s government is simply playing into the hands of both the Americans and the Big Four automobile manufacturers, and that what is needed from this province is leadership in providing a push in order to get automobile investment into Canada, rather than shilly-shallying over whether or not there’s a problem?
Hon. Mr. Davis: Are you going to nationalize them too?
Hon. Mr. Rhodes: The honourable member knows very well the question about these particular statistics and stuff had never been brought to the surface as to the sharing of jobs in manufacturing until over the last recent while when things have got tight. He also knows that part of the big problem that’s being faced -- and this has been addressed by ourselves and, I think, by the auto workers as well as the companies -- is that there are many jobs that are counted as being related to the auto pact agreement in Ontario that are not being counted in the United States. That’s having an effect on how the numbers work out as to what percentage of employment we have.
We aren’t able to convince our federal friends that perhaps we should be looking again at such things as stampings, carburetor manufacturing and what have you as being part of the auto pact jobs. They are counted in Ontario and in Canada. They’re not counted in the United States.
I don’t know how I can resolve that. As I said the other day, I don’t have the ability to go to Washington and debate these matters with the United States government. All we can do is tell the federal government we recognize these areas. We point them out to them and ask them to do what they are elected to do and responsible for doing.
Mr. S. Smith: It doesn’t stop you in Japan.
Mr. Foulds: Why don’t you run federally?
Mr. Kerrio: I don’t hear your kissing cousins making noises down there. I don’t hear Joe Clark making any noise about it.
Hon. Mr. Kerr: Mr. Speaker, I wish to answer a question posed earlier this week by the honourable member for Wentworth (Mr. Deans) regarding the Oakville warehouse fire.
The day following the fire, Mr. J. C. Stevens of the technical services branch of the office of the fire marshal discussed the investigation with Mr. Frank Botteriell, the building owner. Mr. Botteriell was anxious to ascertain any information we had as to the cause of the fire, and Mr. Stevens provided him with as much up-to-date data as he had. Specifically, there were a number of reports and rumours which the investigators were endeavouring to verify during the period, concerning the fire origin.
A Chevron Chemical employee had reported to the insurance adjuster that a CNR employee had been feeding the fire on the railway tracks near the building. When Mr Stevens discussed the fire with Mr. Botteriell, he had said the fire marshal’s investigators were endeavouring to check out the validity of this report. The office of the fire marshal did not, however, indicate it had taken a sworn statement from witnesses to the initial burning activities.
On April 28, Mr. Botteriell was interviewed by the fire marshal’s investigator, Peter Heyerhoff. By that time, he’d interviewed a Chevron employee and other witnesses to the fire and the matter of the burning debris on the railway tracks had been clarified.
This part of the investigation revealed that two CNR employees, hearing about the fire, arrived at the scene and took separate action in putting out the fire in the grass alongside the building. One of them used an iron bar and pulled a burning pallet away from the south side of the building under the rail spur. He then attempted to remove pallets from the loading dock area to prevent them from catching fire. The other employee used a metal switching broom to put out the burning dry dead grass and underbrush. He was then assisted by an employee of the Oakville Storage and Forwarders Limited to totally extinguish the remaining grass fire.
The two CNR employees heard a crackling noise of fire and used a steel switching broom handle to break open the seam of the metal clad wall of the building. They observed fire in the wall cavity of the building at that time. The initial description of these activities before being clarified by other witnesses could have misled the adjuster.
From the start, there was no evidence that the fire was intentionally set, so we did not withhold information from the owner. It is clear that the building ignited from a fire involving dry grass and weeds. Investigation has not yet revealed who started the fire.
The CNR and its employees have co-operated fully in the investigation and there is no suspicion that they in any way contributed to the fire. On the contrary, at least two of the employees actively attempted to prevent the fire from spreading.
Mr. K. Pipher, senior investigator for the central region, office of the fire marshal, has not held any conversations with Mr. Botteriell.
As promised, I am today tabling a May 2 memorandum from the Ontario fire marshal, J. R. Bateman, to Mr. F. L. Wilson, QC, assistant deputy minister in my office, setting out the results of his investigation into the Oakville fire.
I am also providing some additional information with respect to the difficulties faced by the Oakville Fire Department in delivering water to the scene.
One pumper located at the closest fire station in Chartwell Road was in service fighting a grass fire at the time the alarm came in. A pumper from the Randall Street station was immediately dispatched to the scene but its water supply of 500 gallons was insufficient to extinguish the fire. Another pumper arrived but was rendered inoperative when its drive shaft became disconnected as it was being driven across the railway tracks. Shortly thereafter, another pumper arrived on the scene and was connected to the municipal water supply but the fire at that time was of such magnitude that the firemen had great difficulty in their attempt to extinguish it. They eventually directed their efforts to prevent its spreading to other buildings.
As was mentioned, assistance was provided also through the mutual aid program by the Burlington Fire Department. I want to say that a commendable job was done by all the firemen at the scene to control the spread of the blaze and protect adjoining property.
Mr. Deans: One supplementary question, if I may. Did I understand the minister to say that Mr. Pipher did not, at any time, speak to Mr. Botteriell? If I did, I draw to your attention that’s quite inconsistent with the statement made by Mr. Botteriell to me.
Hon. Mr. Kerr: That’s just what I said.
Ms. Bryden: A supplementary, Mr. Speaker: I do not feel that this statement answers the question that my colleague from Oshawa asked. He asked for a general statement from the Solicitor General as to who is responsible, in such a fire where dangerous and possibly explosive chemicals are involved, for notifying the health authorities, the people in the area, the workers in the surrounding buildings and any other people who might be concerned with these dangerous chemicals.
Mr. Speaker: Question.
Ms. Bryden: It appears there was no clear delineation of who is responsible in such a fire for notifying people.
Secondly, the Solicitor General did not deal with the problem --
Mr. Speaker: I haven’t heard a question yet.
Ms. Bryden: I have asked when the minister is going to give us the full statement on who is responsible.
My second question is that he did not deal with the case of the second person --
Mr. J. Reed: The member’s second question?
Ms. Bryden: -- who had very explosive chemicals in his factory nearby and was not able to get fire protection for those chemicals. There could have been a very serious explosion and nobody seemed to be taking any notice of it. Is there not somebody who is responsible for protecting the people against such an explosion?
Hon. Mr. Kerr: First of all the fire department is responsible for putting out and controlling the fire. As for that particular incident in respect to chemicals, I understand that the Minister of the Environment (Mr. McCague) will have some information in respect to their survey and assessment of any possible air or water contamination. Also, the local health unit was on the scene; a report will be available, I understand, next week from the health unit if we desire to have it; and I expect a report from the regional police to be available by the middle of next week.
NIAGARA REGIONAL GOVERNMENT
Mr. Bradley: The question is for the Premier, Mr. Speaker. In view of the fact that the report of the Archer commission and the subsequent white paper response of the Treasurer (Mr. McKeough) to that report have failed to address what I feel and what many people feel are the real jurisdictional and financial problems in the Niagara region and have not fully explored all of the alternatives to the present structure and operation of regional government in Niagara, would the Premier assure this House that those who wish to respond to these documents before the deadline of May 31, as prescribed by the Treasurer, will be permitted to advance proposals not dealt with in the reports and that those views will be given serious consideration by your government?
Hon. Mr. Davis: My experience has been that people wishing to propose something that is not totally included in any report have never been precluded from doing so and most groups I have dealt with have never been reluctant so to do. So I would suggest that no matter what my answer might be, if there are people who wish to reply to the white paper and who wish to encompass in their reply something that goes beyond the white paper, I am sure they will do it anyway; and like all submissions, we will consider it very carefully.
Mr. Bradley: A supplementary question on the report of the Archer commission and the white paper, Mr. Speaker. In view of the fact that both the report and the response really amounted to tinkering and the removal of some minor irritants that existed and that the report essentially said there’s nothing wrong with regional government which a little bit of public relations wouldn’t solve, would the Premier not consider the entire exercise, which cost a quarter of a million dollars, to be somewhat of a waste of money?
Hon. Mr. Davis: No, Mr. Speaker. Of course, my recollection is -- and the honourable member can correct me -- that part of the initiative for the study came from that municipality which he now represents. It was a reaction by this government to a local request, a local initiative -- selecting a person who I think most people felt had both the ability and the experience and the talent to do a proper evaluation, although his evaluation may not meet the thoughts of the honourable member.
I understand that some agree with Mr. Archer’s report. It’s like every report, you will not get total unanimity. However, if the honourable member is suggesting it was a waste, I would say to him, with respect, that he may have been on the council that suggested that this study take place, so he would have to assume the responsibility if he feels it is a waste. We don’t.
Mr. Bradley: We didn’t appoint Mr. Archer.
INDIAN LAND CLAIM
Mr. Samis: A question to the Minister of Natural Resources, Mr. Speaker. In view of the fact that the St. Regis Indians have laid claim to the entire St. Lawrence River from the Quebec border to Gananoque and in view of the fact that the federal Minister of Indian and Northern Affairs told them clearly on Tuesday that the federal government does not recognize nor accept that claim, can the minister tell the House what position his ministry is taking in regard to jurisdiction over fishing in that area, and could he also advise us what he would tell fishermen this weekend in the St. Lawrence Valley vis-à-vis licences, regulations and jurisdiction?
Hon. F. S. Miller: Yes, Mr. Speaker, I will be glad to. As the honourable member knows, it’s a most difficult problem. We have been in touch with the federal minister by phone a couple of times this week and I understand my deputy will be down in Ottawa next week talking either to the minister or his deputy. In addition, I have one of my senior staff down there today, I am told, checking a map of what the federal government believes to be the boundary of the reserve. We have not guaranteed we will agree with the map; we want to have a good look at it first and see if it is an approximation of what we believe the boundaries to be. Then we will allow or encourage fishing to take place under the normal rules of the province outside of that boundary, if we find it acceptable. We will probably be issuing a release to that effect within the next few hours, saying that with the season opening tomorrow for pike and pickerel, I believe it is, in that general area, the enforcement regulations will remain unchanged in those parts of the river which we consider to be outside of the reserve.
Mr. Samis: First of all, I would like to say I welcome that announcement.
Supplementary: I would ask if the minister has consulted or will he consult with the Solicitor General to ensure that there is no harassment this weekend or next week of anglers who do go out into the disputed area, in order to protect their rights as fishermen?
Hon. F. S. Miller: I will be pleased to do so. We have been very anxious, as I am sure the member is, not to have any kind of outbreak in that area.
Mr. Lewis: You look after the auto pact and we will look after the rest.
Hon. Mr. Rhodes: You are going to look after the Indians?
Hon. B. Stephenson: What is it you are going to look after, Stephen?
Mr. Lewis: I am still looking.
Hon. W. Newman: That’s what I heard.
Hon. F. S. Miller: There were rumours this week of shots. I have traced those down and found them to be unfounded insofar as we can find out, but these kinds of issues have all the elements of danger. Therefore, I certainly would encourage the normal cooperation between my ministry’s conservation officers and the OPP, and I am sure the Solicitor General would join me in that.
Mr. J. Reed: In the absence of the Minister of Energy (Mr. Baetz), I shall direct my question to the repository of all knowledge on that side, the Premier.
Hon. Mr. Davis: I’m glad you recognize it.
Mr. Nixon: I thought it was George Kerr.
Hon. Mr. Rhodes: Wrong again.
Mr. J. Reed: I wonder if the Premier could tell us what purpose is being served by Ontario Hydro sending out a system reliability questionnaire to farm operators asking them to estimate their financial losses if electrical supplies were interrupted?
Hon. Mr. Davis: I am not the repository of that particular memo.
Mr. Nixon: Oh, what a disappointment.
Hon. Mr. Davis: It is a disappointment. I would like to say to the honourable member that I have read the memo and I have checked it with Ontario Hydro. I would assume, I can only assume, that they are trying to seek information from the farm community as to whether or not an interruption in power would have any economic impact on the viability of that agricultural operation, which I guess is not an unusual question to ask, and which I am sure the farmers will have no difficulty in answering.
Mr. S. Smith: Sometimes known as scare tactics.
Mr. J. Reed: Supplementary: I wonder if the Premier would apprise himself of the contents of this ludicrous document, which doesn’t really address itself to the farming operation directly, and which is incomprehensible when it comes to a farmer trying to interpret properly what’s asked?
Hon. B. Stephenson: Come on, now. Don’t put down the farmers.
Hon. W. Newman: I will remember that remark.
Mr. Martel: That’s the trouble with you farmers, Bill, none of youse can read.
Mr. J. Reed: Could the Premier tell us if this questionnaire was not just sent out by Hydro to justify their expansion program in the minds of farmers, and any rate increase which might accompany that expansion; and could he also inform the House as to how much this piece of nonsense cost?
Hon. Mr. Davis: I will certainly undertake to look at it. I won’t agree to do it this weekend. I have other reading I intend to do and a few other things I intend to do.
Mr. J. Reed: Monday morning.
Hon. Mr. Davis: Some of us are going to have a very pleasant evening tomorrow night and I won’t be able to read it, although I might stand up and read it there. It will probably be as relevant as anything else I might say tomorrow night.
Sure, I’ll take a look at it. Obviously the honourable member finds it incomprehensible. I may have the same difficulty, but let’s see if I can have a go at it and make sense out of it and then explain it to him next Monday or Tuesday. I think he will find that farmers comprehend far more than he thinks they do.
Hon. B. Stephenson: That’s right.
Mr. Germa: In the absence of the Minister of Health (Mr. Timbrell), could I ask the Premier if the economy of the province of Ontario has deteriorated to the point where the government cannot afford to supply the veterans in Sunnybrook Hospital with a decent and traditional breakfast? Is it not possible for the Premier to shake down $200,000 to overturn the decision of the executive director to go to a cold breakfast rather than the traditional hot breakfast for veterans?
Hon. Mr. Davis: I noticed that in the paper this morning. I know the Minister of Health would have some more specific observations. I can’t comment on the nutritional value of a hot breakfast as opposed to a cold breakfast. I can’t comment on which is more desirable from my standpoint. Although most mornings in the week I have a cold breakfast, I would prefer a hot, but please don’t ask me to comment on which is more nutritious. I think that is also something which has to be considered.
While we have certain economic difficulties, they do not extend to that question. Of course, I know we’re all prepared to exercise our own restraints. Certainly, if it is felt that from a nutritional standpoint the hot breakfast should be retained -- and I don’t make these judgements -- maybe we can find the $200,000 out of the allocations some would like to see for new office accommodation and other things here in this building, or something of that nature.
Mr. Cunningham: Or UTDC.
Mr. Martel: Cut the Premier’s staff. Cut 35 of them and have only 30.
Mr. Ruston: I have a question of the Minister of Agriculture and Food. With the shortage of capital funds available in the ministry for tile drainage, would he consider allowing this money to come from the private sector -- banks and so forth -- and make up the difference between the six per cent and the bank rate?
Hon. W. Newman: If the member is asking me if it would be possible to expand the tile drainage program by allowing the banks to put up the funding and we would make up the difference between six per cent and the bank rate, there still remains a liability on behalf of the province of Ontario and it would have to be shown in the books that way. As a matter of fact, we looked at that approach two years ago.
Mr. Ruston: A supplementary: Couldn’t the farmer make this loan with the agreement of the province that it would pay the difference in the interest rate?
An hon. member: Why not?
Hon. W. Newman: If the farmer wishes to go to the bank -- and most banks are very co-operative with farmers -- and get a loan himself at the bank, yes. The other way, keep in mind the difference in the subsidy. If one looks at my estimates this year, I think the subsidy differential amounts to about $4 million at this point in time. That’s one of the constraints we’re living with within the budget.
We decided we would take the farm tax reduction program, which affects all farmers in the province, where we needed considerably more funding there, and we had to make some adjustments in other areas of the budget.
DEATH OF LABOURER
Mr. Young: I have a question of the Minister of Labour. On December 13, 1977, the minister answered a question of mine in connection with the death of a workman in my area in an unshored ditch. Since that time, I understand charges have been laid and a verdict rendered -- a verdict which perhaps didn’t get as much attention from the media as the original accident.
I wonder if the minister could, for the record, tell us what has happened in that regard and, perhaps to save a supplementary, could she tell us what action has been taken by her department to make sure that excavation of this kind, shoddy and deadly as it is, will no longer take place?
Hon. B. Stephenson: The member for Yorkview is entirely right. The Ministry of Labour, occupational health and safety division, after investigating this accident, was the source of charges laid against the contractors. That court case has occurred, the verdict and the judgement have been rendered, and indeed the highest fine ever required of any individual contractor in this province was elicited as a result of the verdict in that case.
The occupational health and safety division, in the construction area, is extremely vigilant in its examination of these sites and intends to become more so with the new automated frequency of inspection program which it has developed, somewhat in the same manner that the industrial program has been developed. Hopefully, this will provide us with a more frequent inspection of those individuals who have bad records, such as this contractor, and less frequent of those who have excellent records.
NORTH YORK FIRE
Mrs. Campbell: Mr. Speaker, I wonder if I could rise, I guess, on a point of privilege.
In view of the position which has been held by Mrs. Ward Markle in the government service and the position of Mr. Ward Markle, I wonder if we could prevail upon the Premier to express on behalf of the whole House our sympathy in this tragic occurrence.
Hon. Mr. Davis: Mr. Speaker, I have, of course, already conveyed, as I’m sure a lot of members have, our personal sympathies to the family. I would be quite pleased to convey the sympathies of the entire Legislature. As I say, I’ve already communicated mine to them, but I’d be pleased to add this as well.
ORDERS OF THE DAY
House in committee of supply.
ESTIMATES, MINISTRY OF REVENUE
Mr. Chairman: The minister with an opening statement.
Hon. Mr. Maeck: Mr. Chairman, it is a pleasure for me to present this ministry’s estimates for the first time as Minister of Revenue, and I welcome the opportunity to discuss the operation of the ministry with the committee.
We have already provided additional explanatory material to all parties, to supplement the information contained in the printed estimates. However, at this point I would like to summarize a number of important features and developments which I think will be helpful to members in the detailed vote by vote examination of the ministry’s finances.
First, I would like to deal with the broad changes in proposed expenditures shown in the summary table on page 65 of the printed estimates. Members will notice that the total of funds to be voted for 1978-79 is about $2 million less than last year and that this reflects a balance of expenditure increases and decreases across the ministry’s programs.
On the one hand, the estimates suggest a general increase in the cost of running our programs. It is important to emphasize, however, that these increases primarily reflect regular salary awards, bookkeeping changes in salaries accounting, and in the actuarial funding of pensions. In other words, they do not represent commensurate increases in operating costs and resources in real terms. In fact, the explanatory notes being distributed show that overall staff resources measured are to be reduced this year by 85 man years, while the nominal increases in service and supplies expenditures largely reflect such factors as higher postal rates, investment in computer facilities, and preparations for the implementation of market value and relocation to Oshawa.
On the other hand, expenditure increases are offset by the reduction in the guaranteed annual income estimate from $121 million to $109 million. However, I want to stress that this does not involve any real reduction in GAINS payments to the elderly. Instead, it reflects the fact that the original estimate for last year was too high, so that the actual level of total payments will be virtually constant over the two years, as the number of GAINS recipients has stabilized.
Another point to bear in mind is that the printed estimates do not include the measures to further reduce civil service staff and costs announced on April 25 by the Treasurer. At the present time, it is too early for me to provide the committee with details of how these reductions will be implemented in the Ministry of Revenue. Such information, however, will he provided as soon as possible.
I would like to comment briefly on the planning processes used in the preparation of these estimates and in planning our operations for 1978-79. For two years now the ministry has been operating under the management by results, or MBR, system, which has significantly improved our planning and management capacities. Over the past year, the MBR system has been extended and reinforced by the implementation of zero-based budgeting techniques. These are particularly useful in ensuring the most effective use of resources to meet carefully ordered priorities under conditions of budgetary constraint. In this connection, the members will already be aware of the reference in the Treasurer’s March budget to the effect that the Ministry of Revenue is one of the two ministries most advanced in the use of zero- based budgeting.
I would like to highlight some of the salient features in the estimates relating to three main program groups of the ministry. In this I shall again concentrate on those factors which best explain the operational changes contained in the printed estimates in financial terms.
The first major program grouping is ministry administration, under vote 1001. This program covers more than just administration in the narrow sense, but includes a wide range of activities which provide important logistical support to the operating branches of the ministry. As indicated earlier, the main reasons for the increase in proposed expenditures this year are salary awards, and the change in accounting methods for salaries and pensions. As shown in the distributed explanatory notes, staff resources are to be reduced or held constant in most areas, while additional staff are to be assigned to allow the ministry to undertake the planning essential for the successful relocation of operations to Oshawa. Overall there will be a net increase of 24 man years assigned to that particular program.
The next program is the administration of the province’s tax system and the GAINS transfer payments under votes 1002 and 1003. The complexity and importance of this program I think is apparent. Its branches are responsible for the administration of 13 distinct taxing statutes and efficient collection of some $5 billion in revenues and the distribution of $106 million in GAINS payments. This involves dealing with about 400,000 regular taxpayers and agents, representing large and small businesses engaged in every type of economic activity across the province, as well as hundreds of thousands of one-time tax transactions under succession duties and the land taxes. Also, over three million payments are made to 258,000 GAINS pensioners.
Leaving aside the increase in the estimates caused by salary awards and accounting changes, there are two major developments embodied in the estimates for this particular program.
First, staff resources are planned to be increased by 31 man years in the tax operations. Along with the redeployment of existing staff, this increase is necessary to maintain basic revenue processing operations, audits and investigations in the face of the steady growth of workloads. Second, I am particularly pleased that additional funds have been allocated to design and implement new computer systems, which are critical to the continued improvement of our production efficiency and the effective utilization of staff. Despite the inflationary increase in the prices of supplies and other inputs, in recent years the ministry has been very successful in reducing unit collection costs through the introduction of improved operating methods. With the funds allocated for investment this year, I am confident we will secure similar improvements in future years.
I would like to mention one other important priority in this program. Since 1975, the ministry has been publicly committed to tax simplification and improved services to taxpayers. This priority is directly in line with the government’s overall commitment to improved customer services and deregulation generally. In the past two years the ministry has made a number of important advances on this front. These include a major simplification of corporations taxation under Bill 88 last year -- I am sure the member for Hamilton Mountain (Mr. Charlton) will wonder how complicated it was before -- I do; the introduction of a new series of bulletins for all taxes; streamlined compliance requirements and forms; improved appeals processes; advance rulings; and simpler taxation for small businesses.
Mr. Chairman, we are well aware that tax simplification is not a once-and-for-all exercise. It is a race against forces which work constantly to make taxation more difficult, largely because of the increasing complexity of business activities and the ever-changing nature of federal-provincial taxation in Canada. Consequently, tax simplification requires constant attention, geared particularly to managing tax changes in ways which are intelligible to taxpayers. In 1978-79 we intend to introduce a number of additional measures with particular emphasis on increased cooperation with federal and other provincial authorities to achieve greater consistency among the various tax systems and to reduce problems of “double taxation.”
Finally, I would like to deal shortly with the municipal assessment program under vote 1004. I believe the major functions of the assessment division are well known to members of this Legislature. Overall, it provides much the same support to the local government sector as the revenue division does to the Ontario government’s operations. That is, on a current basis it is responsible for the maintenance of existing municipal assessment systems, which form the basis for raising about $3 billion in property taxes and largely determine the allocation of more than $3 billion in provincial transfers. It also conducts annual municipal enumerations on behalf of local governments, which are vital to school board apportionments, per capita grants, municipal voters’ lists and the selection of juries. In addition, the division is responsible for the revaluation of all properties in the province in preparation for the implementation of the new system of market value assessment, and I shall say more on this activity a little later.
The scale and complexity of these operations are massive. In fact, this is the largest program in the ministry, accounting for more than 60 per cent of our expenditures, excluding GAINS transfers, and about 58 per cent of our total staff. It might be mentioned that these services are provided free to local governments, saving them at least $56 million annually.
As with other programs, salary awards and accounting changes largely cause the increase in the division’s estimates for 1978-79, even though manpower is being reduced. Over the years, staff levels have been steadily reduced from the high point of 2,736 in 1971, after municipal assessment staffs were transferred to the province along with the assessment function. This year, manpower will be further reduced by 82 to a level of 2,354, which has been achieved through improvements in operations.
Of course, the biggest priority of the division is the implementation of market value assessment, designed to provide an equitable and consistent basis for property taxation and provincial grants. However, while the inequities and distortions produced by existing municipal assessment systems are certainly well known, I think it is also agreed by all concerned that the implementation of market value assessment without changes in the ways in which property taxes are levied would result in unacceptable shifts in tax burdens, particularly onto residential properties.
From the very beginning, the government has stated its determination that market value assessment would not be implemented until tax policies were developed which would ensure that the results will be equitable and acceptable to local governments and ratepayers. To this end, the government has purposely engaged in a lengthy process of public consultation.
The government’s first proposals were issued in the 1976 budget to begin the process of public discussion. The Blair committee was then appointed to refine or change these proposals independently on the basis of its own examination and hearings across the province. The Blair report was in turn examined by the government, and a further set of proposals was presented by the Treasurer for consideration by a special provincial-local government committee. This latter committee completed its deliberations a few weeks ago, as all members are aware, at which point it met with the cabinet and the caucus of each party in this Legislature.
As I said, it has been a lengthy process, but I believe that the government has fully met its commitment to take the question to the public and seek the broadest possible consensus on how and when municipal property taxations should be reformed. Indeed, I am encouraged by the progress that has been made, and particularly by the co-operative spirit and constructive work of the provincial-local government committee.
Of course, before a new system of municipal taxation can be put in place, it will go through the most important stage of all when legislation is presented by the Treasurer to this House for examination and approval. I cannot say at this point when this will be done, but I can assure members that my ministry is ready to undertake the responsibility of providing municipalities with new sets of consistent and accurate assessments on which they will base their new tax systems.
Mr. Chairman, this concludes my introductory remarks. I trust that I have been helpful to the members in putting my ministry’s estimates in some perspective. I have purposely confined these remarks to the main changes between this year’s estimates and last year’s. I am ready to answer the detailed questions that the members may raise in the votes and items as they appear in the printed estimates.
Mr. Haggerty: Mr. Chairman, I have listened with interest to the minister’s opening remarks. As the official opposition critic I offer my congratulations to the honourable member representing Parry Sound on his appointment as Minister of Revenue, the province’s chief tax collector. We wish him well in this position. It’s not a popular choice by any means, for today there seems to be a resentment shown by taxpayers to all levels of government on increased taxes.
Taxpayers are used like yoyos. You can keep them dangling on a string. Whatever the need is, government taxes can be moved up and down, usually up. The amazing thing is that the government of the day has not set goals in maintaining a healthy atmosphere of full employment in Ontario. The minister speaks of zero-base budgeting and budget restraints. Zero base also means no growth in employment opportunities in Ontario.
The only solution by the Treasurer (Mr. McKeough) and the Minister of Revenue in this area of unemployment in the 1977 Ontario budget, to escape the responsibility of a full employment strategy program, was to take the easy way out and raise the high employment benchmark to 5.3 per cent for the purpose of estimating the provincial full employment budget.
Let’s take one example of the government’s policy in establishing a new industry in communities outside of the Queen’s Park complex: The locating of the Ministry of Revenue’s department to Oshawa, Ontario. As I have already said during the estimates last November, why locating the ministry’s office in one of Ontario’s healthiest communities that has no doubt the highest employment and the highest earned income of any municipality perhaps throughout Canada? I wonder what happened to the government’s policy to decentralize some of its ministries from Queen’s Park to centres in Ontario that need new industry and new employment opportunities? Why not locate some of these facilities either in the Niagara region or the Sudbury region?
Mr. Eakins: Or Victoria-Haliburton.
Mr. Haggerty: Or Victoria-Haliburton. We on this side of the House have often questioned the need for the ministry to exist. It should be absorbed in the Ministry of Treasury, Economics and Intergovernmental Affairs and a new separate ministry relating to municipal affairs should be established. Perhaps then we could have hopes of an economic policy and tax reform, for after all it is the Treasurer who is calling the shots and setting policies in Ontario.
There is another reason for suggesting revamping this ministry, the matter of reassessment. Municipal tax reform should be within the ministry that is directly involved in the municipal field only. The Ministry of Revenue should only be dealing or involved in provincial tax deals such as corporation tax, retail sales tax and income tax. In fact, the provincial budget of 1937 granted every municipality a one mill subsidy on its ratable assessment, but to balance the one mill subsidy the province took away from the municipalities the right to levy personal income tax.
If the policy was to be reversed today there would not be the need for municipal tax reform. The municipalities would have sufficient revenues to sustain their needs. Personal income taxes generate approximately $2 billion in revenue resources, almost half the total revenue generated, which is in the area of $4.2 billion.
We are deeply concerned, as the official opposition party relating to municipal tax reform. It is an area where local autonomy should have the greatest input in tax reform at this level. Under the present proposal by the Treasurer, one would come to the conclusion that he is following the principle of assessment practices that were being used before the year 1807.
The assessing and levying processes were combined by one authority, and that is the state government of that day. Changes were made in 1807 when a completely new act was adopted. The new act established by statute the valuations at which specified real and other properties were to be assessed and the justices of the peace apportioned among the taxpayers their portion of the total amount to be raised according to their assessment. These statutory assessment values were revised and added to at four-year intervals by statutes passed in 1811, 1815 and 1819. It is amazing; 167 years ago the province had a program of reassessment every four years and, no doubt, uniformity existed even in that day.
I would like to quote from some of the early assessment that was carried out in the province of Ontario. This is based upon my comments previously about reassessment every four years. “Subject to minor changes, the above basis of reassessment remained in effect until 1807 when a completely new one was adopted.” I mentioned the revised assessment every four years. “The taxes raised by these processes were for general purposes of the whole district and the money raised was administered by the justice of the peace. As specialized urban needs arose, additional assessments or levies were made on property owners in certain of the towns. Thus, for example, in the towns of York, Sandwich and Amherstburg, in 1817, the raising of 100 pounds a year for firefighting equipment and other necessary improvements was authorized. These funds raised from the taxpayers of the town were in addition to the district rates they had to pay and were also administered by the justices.”
For example, they had classification of property even at that time: Class one, assessed to a value of 50 pounds and not over 100 pounds, the tax was two shillings, six pence; class two, assessed to a value of 100 and not over 150 pounds, it was five shillings; class three, assessed at a value of 150 but not over 200 pounds, tax seven shillings, six pence; class four, assessed to a value of 200 and not over 250 pounds, tax of 10 shillings; class eight, assessed to a value of 400 pounds and upwards, the tax was 20 shillings.
For example, some statutory assessment values for that time were: meadow land, per acre, was 20 shillings; uncultivated land, per acre, two shillings; town lots, 10 shillings; frame house under two storeys, 30 shillings; a horse, eight shillings; a milch cow, three shillings; a sailing vessel, 50 shillings. You can see that even at that time they did include assessment related to personal taxes too.
Property tax reform has been on the provincial government’s agenda since 1967 with the publication of the report of the Ontario committee on taxation known as the Smith committee. The 1969 budget contained the government’s program of reform to implement the report’s recommendations. In that document, the province set out its objectives for local taxation reform within the general framework of reorganization of local government structure and supposedly to improve provincial assistance to local government.
I should, at this time, make a specific comment concerning the reorganization of local government because I believe this is where the self-deception of the Treasurer at that time began. The Treasurer began to stumble or fumble in his approach to reassessment tax reform.
Members whose ridings are within the jurisdiction of regional government -- and I can think of one, the Niagara region, know that the Ministry of Transportation and Communications, along with the former county government, shared in road studies. The consultants’ reports -- and there were two that were carried out in the former county of Welland -- indicated that to bring the road system up to standard, or a provincial highway, the cost would be prohibitive under the present county assessment. To build, finance and improve the roads, required additional revenue. To cover that extra cost -- and, I might say, through government reform, the region of Niagara had to assume some 55 miles of provincial highway -- the consultant’s report indicated that a revised assessment program was required. I’m of the opinion that just what the real assessment job had to do was to direct the assessors at that time, through the consultant’s report, that they had to go out and find additional sources of taxation to pay for the extra cost that was shoved on to local municipalities through reorganization. To get that extra revenue, they had to establish in these reports higher assessment values. I believe that this is what the assessors were told to do in government reorganization and new market value assessment, to go out and reach that goal that was established by a consultant with the approval of the ministry.
The property tax reform objectives were the reassessment of all property at full market value and the removal of tax exemptions; these and a more neutral-based business tax, and greater equity among the classes of property, are the areas that we’re concerned about now. I think that is the goal we should be looking at, Mr. Chairman.
While some progress has been made in the three basic areas of reform, first set out in 1969 in the Ontario budget, the essential change to which all reforms have been tied -- namely the reform of local taxation -- has not been accomplished.
In 1969, the report on reassessment was completed in 160 municipalities. The studies indicated that under reassessment almost every new evaluation arrived at would show the majority of property -- that is, residential property taxes -- would be lowered for almost a span of 10 years. The Legislature and municipalities have been introduced to further new values of reassessment. We have just received two new proposals since January and the alternative proposals projected figures to indicate that residential property will be paying less in general.
We have not received, nor am I aware of any municipality receiving, information relating to individual properties in block or by municipalities as a whole. It is time that all pertinent information on this important topic be made available to the concerned citizen. We believe that property tax reform must not be dealt with as an isolated issue, since property tax is just one major source for municipal revenue, the other being provincial grants. The reform of property tax can logically be considered only within the framework of the total municipal revenue system.
Property tax will continue to be the single most important source of revenue for local government, It has received adverse criticism. It has been criticized as inequitable both because of the assessment inadequacies and anomalies that have been present over the years. It has been suggested by many that it is regressive and that low income groups pay a higher portion of theft income in property taxes than do high income groups. The government is well aware of this problem and has provided measures to soften the burden on taxes on low income residents by way of the property tax credit, pension tax credit and GAINS. These have reduced most of the regressivity tax bite.
Yet, the property tax alone cannot finance the present expenditure and responsibilities of municipal growth. The trend to municipal financing to meet the urban growth has for the past decade been one of growing dependence upon provincial funding. Between 1968 and 1973, the provincial grants in support of current municipal expenditures increased by 161 per cent By 1975, provincial grants for current purposes amounted to $965 million or about 50 per cent of the estimated revenue from provincial income tax for the year 1977.
While this reliance on provincial funding can partly be explained by the freeze on assessment valuation at the 1970 levels, which naturally weakened the growth potential of the property tax, it also reflects rising costs for such hard-core municipal services as protection and education and, in fact, even for the soft-core services.
Even with the property tax reform, the assessment base will not grow proportionately to offset these costs. Municipalities will continue to face a growing fiscal imbalance; revenues cannot finance the expense for which they are responsible. Our major concern then is how best to supplement the property tax as a revenue source. To date, none of the committees appointed, Blair or the municipal committee, has actually come to grips with this issue.
Perhaps the most appropriate option for supplementing the property tax would be an improved form of revenue-sharing. While revenue-sharing can never be a totally satisfactory solution without a reversal in the federal government’s position on tax-sharing with the provinces, it has two main advantages. First, it increases local flexibility in the use of funds and supports local autonomy for municipalities collectively. Second, it promises revenue growth as provincial revenue grows. This is a major area of concern to municipal bodies and is an area that must provide as a first priority the creation of a better revenue-sharing arrangement for municipalities, one which is certain, predictable and embodied in legislation so as to preclude the kind of game-playing that has occurred with the Edmonton commitment.
This game of a stacked deck has continued since the first royal commission study report of 1937 on federal-provincial-municipal relations. We in the Liberal Party would join in a venture of sharing the resources, which would be set out in a provincial statute that would have meaning and purpose. It would provide the municipalities with sufficient revenue to carry out their responsibilities, which cannot come about without joint consultation with municipalities.
It is generally accepted that the existing property tax system is substantially in need of reform. The findings of the Smith committee on municipal taxes over 10 years ago are still valid. The white paper on property tax reform, issued on January 4, 1978, deals directly with this topic. One can only assume that since municipal assessments have been frozen since 1970, and there has been a high inflationary impact on real estate, that inequities have grown considerably. This paper points to six types of inequities in the present system arising out of the inadequacies in the assessment process as well as the definition of taxable and exempt properties: inequities in the distribution of provincial grants; inequities in the apportionment between municipalities of the cost of upper-tier municipalities and school boards; inequities in the tax burden borne by different classes of properties and similar individual properties; inequities in the treatment of government and the exemption of certain properties.
Regarding the tax shift on residential properties, we can see by this latest report that the Treasurer already has encountered further difficulties on the release of the white paper and his ministry has already introduced an alternative system. This proposal has further broadened our concerns about market value assessment, or the McKeough system, because of the impact on residential property in urbanized areas in Ontario by tax shifts within and between classes of property. The Treasurer has admitted that his system does not deal with alleviating these negative effects and, until such measures are presented to cushion the impact of market value, the McKeough taxation system cannot be supported.
I would like to cite an example of the impact on market value assessment, taken from the report: “What market value would mean to a small business. The data released by TEIGA show that the retail and commercial sector will experience an overall property tax increase of 5.3 per cent across the province. However, the data shows a significant variation among municipalities with the impact on small urban centres and northern communities being dramatically greater than in the rest of the province.
For instance, while the tax increase on retail and commercial property under the McKeough system will be just 1.9 per cent in Metro, it will be over 16 per cent in municipalities and regions with 10,000 to 50,000 population.
Looking at the proposed system of economic regions we see that the increase for this sector in northwestern Ontario is 22 per cent and 12 per cent, compared to five per cent in central Ontario; and a decrease of 1.5 per cent in southwestern Ontario.
I was a member of the select committee dealing with the layoffs at Inco and Falconbridge in Sudbury and the question of taxation was very noticeable in our hearings, dealing with the mining tax, property tax, provincial sales tax, corporation tax and government grants. Inco was kind enough to present a brief to the select committee and I would like to quote something from this document. It makes some very good suggestions concerning the problems of taxation, particularly in mining communities.
Quoting from the property tax section in the report, Inco in its submission, dated February 19, 1968, “the report of the Ontario committee on taxation proposed an alternative to a suggested mines service tax.” It goes on to say, “We” -- that is Inco -- “propose instead that the municipal property tax assessment base be broadened to cover all processing facilities, including smelters and concentrators. The effect of this change would subject all concentrators, smelters and refineries in the province, including those of Inco, to the full impact of municipal taxation. The revision of section 35(5) of the Assessment Act would substantially expand the assessment in the Sudbury area. This revision could have a beneficial effect in other areas as well. Combined with the uniform assessment recommendations contained in the report, a far more equitable distribution of taxes for these affected areas would result.”
The province accepted this recommendation and smelters and concentrators were taxed for municipal purposes in 1970. In further support of this recommendation, the company went on to state:
“Obviously, any company faced with an increase in a municipal tax burden would expect that the increase would accrue to the municipal community in which it operates. The mines service tax does not meet that criterion, since the additional tax which is imposed on the profitable mining company can be diverted to regions other than the area in which the company conducts its operation. So far as Inco and its employees are concerned, we would find it more satisfactory and equitable to have Sudbury area property taxes spent directly for the benefit of Sudbury area citizens.
“In 1974, all surface structures were taxed when mine buildings were brought into assessment. The following table -- ” well, I won’t get into that.
What they are saying here is that where there are assessment practices carried out on mining corporations in northern Ontario, instead of the money actually coming to the area -- where, for example, there is an unorganized municipality -- the taxes generated by that corporation in municipal taxes should apply to that community instead of going back into the provincial coffers.
Summing up my remarks here concerning the 10 years of reassessment, I should put on the record my leader’s approach to property tax reform. This is the Metro perspective, a letter from Stuart Smith and the Liberal caucus. “There is even more fundamental concern, which must be taken into account, for dealing with revenue sharing. The Treasurer insists that property tax reform should be implemented before any improvement is made in the current system of provincial transfers to local government. Since the property tax is just one major source of municipal revenue, the other being provincial grants, the two issues are clearly intertwined.
“In the past two years, the arrangement for provincial-local government transfers, known as the Edmonton commitment, has been unilaterally reinterpreted by the Treasurer to such an extent that it has become virtually meaningless. Furthermore, if the Treasurer’s system prevails, the benefits of the province paying full taxes on its property are nullified by the provision that this amount will be deducted dollar for dollar from the full grants delivered to local government.
“If property tax reform is implemented at the same time as the province increases the burden on municipalities and school boards, local governments will be hard-pressed for funds and, therefore, forced to raise mill rates or cut services. As a result, tax benefits or additional costs which result from the change to market value will not be evident to the people of Ontario. Taxpayers will not know who to hold accountable.
“If the province were to insist on improving local government budgets during the first year of the property tax reform as it is proposed in the alternative system, local autonomy would be violated. For this reason, the committee rejected this and opted instead for a tax bill which is carefully designed to show the changes” -- a useful idea.
“The main point is that the property tax reform as proposed leaves the yearly amount of provincial funding for municipalities and school boards up in the air. That is why the first priority for the Liberal Party is the creation of an improved revenue sharing arrangement for local government; one which is certain, predictable and set out in a provincial statute, safe from the arbitrary interpretation of the provincial Treasurer.
“The proposed change to market value assessment raises major concerns across the province. The effects on home owners, tenants, and small businessmen and owners of vacant land, and on the municipal revenue system itself, pose particular problems for the citizens of Metro Toronto” -- in fact, throughout the province of Ontario. “The Liberal Party cannot support a scheme of property tax reform that fails to answer these concerns.”
I might add that if the difficulties that now face the Ministry of Revenue and the Treasurer of the province of Ontario -- If they had followed the policy that previous assessors in the province of Ontario wanted back in the early 1960s, which had one standard method and practice of assessment in each municipality in the province of Ontario with the adoption of an assessment manual made mandatory across the province -- and if they had followed that back in the early 1960s on reassessment, as has been carried out in a number of municipalities -- that practice is carried out in every municipality in the province -- they wouldn’t be in the jam they’re in today.
It would have been a lot simpler if we had followed that course. It wouldn’t be costing us this much for reassessment, because that’s what it is doing. For 10 years now we’ve sat by and waited for the government to move in this area, to find out just exactly what this is going to cost each individual in the province of Ontario. I can say this, it shows in some of these reports that there will be a shift to the residential taxpayer in almost every municipality. If the government is going to figure on telling the municipalities to generate additional revenue by taxing their own property, that is school property, firehalls, libraries, and so on, I don’t think that’s going to sell too well across the province of Ontario.
I think the minister at that time should have listened to the assessors who were promoting such proposals to the government. They knew the inequities were there and they wanted to correct them. It could have been corrected if the government had followed their suggestions.
I suggest to the minister that this delay of 10 years has cost the province of Ontario. I don’t know just where the money is going to come from. Perhaps that’s why we’re in a deficit now. The question then arises, who is going to pick up the tab for this? When reassessment is taken over by the municipalities and say this is their responsibility now?
The minister is shaking his head, no. I hope that’s not the intent of government, referring the assessment cost back to municipalities. It should be borne by the provincial government, but still with the local autonomy at that level.
I do have other comments, but I think I’ll deal with matters vote by vote.
Mr. Charlton: I’ll start off by also welcoming the new Minister of Revenue and by congratulating him on his appointment to the cabinet and to this very important ministry. This is only my second set of estimates and this is the second time that I’ve had, in estimates, to congratulate a new minister --
Mr. Wildman: Keep scaring them off.
Mr. Charlton: -- and also the second time I’ve been a first-time critic. So we’re all in the same boat from that point of view, I guess.
Mr. Nixon: Gee, this is interesting.
Mr. Charlton: I would like to echo the thanks to the minister and to his staff that were offered a couple of weeks ago by the member for Nickel Belt (Mr. Laughren). I would like to say to the minister and to his staff that I very much appreciated the assistance that was given to us in the past couple of months with a number of the tax bills. It helped us to digest and to become at least somewhat familiar with a very confusing and complex procedure much more quickly than we could have on our own. So thank you very much.
As I mentioned at the outset, this is a very important ministry -- important because taxes are at such a high level in the province of Ontario, at least in a general sense, although the province sometimes likes to take pride in having the lowest tax in a particular field and sometimes forgets to mention that it also has the highest tax in another field. Taxation generally is at a particularly high level today and that makes the ministry very important: important because the government is determined to get out of the annual deficit position that it has been in; important because people in general in our society feel very strongly the pinch of taxation. All of these things make this ministry very important because it is paramount that under the circumstances the government makes every effort to see that revenues are raised in the fairest and most equitable way.
As this ministry is the government’s revenue collector, to some degree I feel that this ministry has failed. As the administrator and the collector of taxes, this ministry has the experience and the people in the field to best assess the impact of taxes: to assess who pays the tax; what is the social and economic impact of the tax and whether that impact is desirable; to assess the cost-effectiveness of a tax -- this latter is something that’s been raised in the past, that different taxes have to be administered in different ways and some of them are more efficient or more cost-effective than others because the costs of administering them are lower or higher, whichever the case might be -- to assess the best mix of tax charges to provide this government with its revenue in the most efficient and the least harmful way in terms of the taxpayers of the province.
I feel that to some degree this ministry has failed to fulfil that role. I say that because the new minister says it. Repeatedly during the course of the debates on the revenue bills which we’ve already dealt with, which were attached to the budget, the minister has emphasized that this ministry does not set the budget and does not decide what tax increases will be implemented to meet the budget. TEIGA does the studies and the Treasurer decides. The Ministry of Revenue merely implements and administers the taxes -- fair or not, effective or not.
We certainly can’t blame the ministry staff for that. It would seem to me that the fault for this failure must lie with the minister. It would appear, to me at least, that this ministry has seriously lacked strong political leadership. We have a new minister now and we will most certainly look forward to stronger political leadership. We would like to see this ministry start to play a role in the laying of the groundwork and the planning on the revenue side of the budgetary process.
Just to point to part of what I am talking about: In the past two months, we have had a series of revenue bills, tax bills emanating from the budget amendment. Amendments to the Income Tax Act, the Corporations Tax Act, the Retail Sales Tax Act, the Tobacco Tax Act have all been presented to this House and passed. They were presented by the Minister of Revenue.
Repeatedly during the debate on these bills, we in this caucus and the Liberal members asked, section by section, what studies the ministry had done to assess the impact of these changes. How many tax dollars were involved? What would be the effect on industry or the industries involved in a particular sector, or the economy in general? How many jobs would be created or lost by specific tax change? How would the competitive position of a certain sector be affected by a specific tax change? What were the specific goals of that change in terms of jobs, tax changes and its effect on industries? In his responses, in almost every case, the minister stated a general hope of an intended general goal, but we were given no specifics. It would appear that the minister had none.
Perhaps TEIGA and perhaps the Treasurer had the studies and had the specifics -- I don’t know. But they were not provided to the House in a detailed and specific way. This makes it very difficult for those of us in opposition to respond in a straightforward, reasonable and responsible way to tax changes. If we don’t know the full extent or at least the estimated impact of a tax or a tax change, it is difficult to take a position logically. For example, there were a whole series of changes in the Corporations Tax -- those were the changes that the minister was referring to in his comment -- and they were, to the average member in this House, rather confusing. I found them confusing; the minister himself found them confusing. We were both new.
The changes set out a series of tax increases in some cases and tax decreases in other cases. The Treasurer’s budget statement of March 7 set out a net change in taxes in dollars and cents, but the Treasurer’s budget didn’t detail it in terms of the specific changes and didn’t detail it in terms of projections of the effects. Neither did this minister.
We received no analysis of the effect on the industries involved or any estimates of the possible jobs created or lost by the changes. This kind of uninformed process puts both of the opposition parties in a very difficult position. Five years down the road when perhaps a certain measure backfires and the real impact is all of a sudden known, this government will be saying to us, when we raise it and criticize or whatever the case happens to be, “Well, you supported the measure when we introduced it.”
This is not a reasonable and effective way for this Legislature to operate. The ministries have the resources, the staff and the time to do the necessary studies and, I would assume, they do go on. Our research facilities are very limited. It is virtually impossible for us in a matter of weeks after receiving a budget, and the bills that go with the budget, to try to assess and analyse the specific impact of each of the sections in those bills.
On the other hand, it would be a different story for our staff to assess existing studies and analysis from the Ministry of Revenue or TEIGA, or whoever happens to be doing the studies. I feel it should be the Ministry of Revenue but obviously that is not entirely what is happening. But if we had full access to those studies, instead of attempting to criticize in an emotional way, we would be in a position to attempt to criticize in a factual way or to accept and support in a factual way.
It is my very strong personal feeling that this would make the atmosphere here much more reasonable, less emotionally charged and much more productive. Unfortunately this is not the case and getting information is quite often like pulling nails out of ironwood.
To quote the former minister from her opening statements of last year’s estimates, she said, “As the Minister of Revenue, I must find the most effective, appropriate and humane way in which to apply the government tax policies.” According to the new minister, this just is not happening. TEIGA is making the decisions and the Treasurer is taking those decisions and presenting them to the Minister of Revenue with the taxes he is to implement and to administer.
In specific terms, we have just passed amendments to the Retail Sales Tax Act in order to implement a three per cent reduction in the Ontario sales tax. This tax reduction was proposed by the federal government as part of a tax package to stimulate consumer spending with the hope -- and I emphasize hope -- that jobs would be created. The program is to be funded two thirds by the federal government and one third by the province.
We supported the passage of this bill, but we supported it not because this ministry laid out before us an analysis of its impact. There was no analysis of what sectors would be affected most or how they would be affected; there were no projections of the effect on jobs created or lost after the withdrawal of this measure in October. Rather, we supported the bill in the hope, and it would appear that the government was doing much the same, that there would be some beneficial effect from the tax reduction.
One of the other facets of this Ministry of Revenue which concerns us is the whole question of the effective collection of taxes. This is especially true in the area of the large multinational corporate sector. There is no question in my mind whatsoever that many companies in this sector use their bookkeeping procedures and their relations with parent and sister companies to avoid certain taxes. This ministry should have the responsibility for seeking out and plugging loopholes in the tax structure in order that everyone, all companies and individuals alike, pays his taxes based on an equitable tax base so that everyone in the same circumstances is receiving the same advantage or fulfilling the same responsibilities to the taxpayers of the province of Ontario.
I know the minister will say, as did the previous minister, that they are working in this area and that gains are being made. But it seems to me that we never see tax bills which make clear the holes that exist and attempt to plug them. For the most part the bills that we see raise or, in some cases, even lower taxes, but they don’t very often tighten up the rules under which a tax is applied, or at least if they do it is not very apparent.
This area concerns us because of the way in which the corporate share of total taxes has decreased over the past 15 or 20 years and the share paid by personal income taxes has increased so dramatically. This brings us back to what I talked about earlier. This minister and this ministry have a responsibility to see that the taxes are assessed fairly and equitably for everyone in the province. It would appear that this policy has not been carried out by this government.
Tax shifts which have occurred over the past 15 or 20 years don’t appear to be very fair in terms of individual taxpayers in this province. Individual average wage earners who pay personal income tax have been faced with a continually ever-increasing share -- not only increasing taxes, but an increasing share -- of the overall tax burden. It would seem that this government is always concerned about the raising of revenue, but only occasionally concerned about the other function of tax policy, which is the redistribution of income.
The Ontario tax credit program, for example, was a good one at its inception. This program, however, has been unadjusted for a number of years now and it no longer represents or affects or redistributes to the same people that it did three or four years ago.
People who three or four years ago got a tax credit in very many cases no longer get one. They got some in the past and they got none this year or last year, largely because their wages have increased. However, because their wages have increased does not necessarily mean that their position in the economic structure of this society has changed at all. There are people who have over the past four or five years improved their economic position in society. But there are just as many, and probably many more, who have only managed to keep up with the cost of living and there are a goodly number in this province who have fallen behind the cost of living, especially those in the unorganized sector.
These people, who have only managed to maintain their economic status or have actually lost slightly in terms of their economic status in relation to the rest of society have, because of increased wages, reduced tax credits and in some cases have gone over the top and are no longer getting any tax credits at all. For many of these people the reverse should be true. Because in some instances they have lost ground in relation to the cost of living they should in fact be getting increased tax credits, not decreased or non-existent tax credits.
This brings us to a problem. At the same time that this Ministry of Revenue is having to adjust its taxes every year in order to get more revenue because costs have gone up, this ministry has a responsibility to deal with tax credits on an annual basis as well and to tie those tax credits to the changes in the economy, both to wages and to the cost of living. This is something that just isn’t happening and it is something that this ministry has to take a responsibility for doing.
I would like to move on now to a short discussion of the property tax reform question and the whole question of market value assessment. I don’t intend to take the same tack to it that the previous member from the Liberal caucus took, but there are a few things that I would like to impress on the minister and perhaps some of his staff as well.
In 1970 we set out on a market value reassessment and the stated goals at that time were to achieve a number of things. But among the goals two were most important. One was to end up with a uniform province-wide assessment base to eliminate the problems and inequities in grant distribution to the municipalities -- in order to give the province an effective and equalized base in order to deal with those grants to municipalities. The other major objective of the reassessment, although there were others, was to create property tax equity among like properties so they are all paying their fair share and tax equity between commercial properties, and so on.
But the original thrust, at least in my understanding of the market value reassessment program didn’t deal in any way, shape or form with the possibility of tax shifts between sectors. As a result of some rather dramatic changes in the real estate market, with the values of properties in the residential sector going up very much faster than the values of properties in the commercial, industrial and multiresidential sector, in 1974 and 1975, all of a sudden we were faced with the problem of dealing with these tax shifts and the problem, therefore, of dealing with tax reform as well as dealing with market value assessment.
Having to deal with the tax reform question and all of the political implications of dealing with the tax reform question have effectively put the brakes on not only the tax reform itself but on the market value reassessment as well, and this is causing a problem. Because the tax reform question lost the original goals in assessment which we set out again, which was equity among like properties and a uniform base across the province for the purposes of distribution of provincial grants, and it would appear on the surface at least as though we can’t proceed with the market value reassessment without tax reform. I think that presumption is not necessarily correct. I think there are other ways, for the time being, of dealing with the potential tax shifts that are indicated by the change in the real estate market.
At any rate, the problem that has arisen out of this whole question is the problem that existed in 1967, 1968 and 1969 when we decided to go ahead with market value reassessment, and those are the inequities that existed in the current system, and it’s not even fair to say that we still have those same inequities to deal with. The inequities have increased rather substantially over the period of the freeze and they are getting worse every day, so we are in a situation where we’re damned if you do and we’re damned if you don’t, in terms of property taxpayers in the province of Ontario.
I’m not naive; I understand the problems that the Treasurer and the Minister of Revenue face in terms of coming to some kind of solution to this problem of property tax reform. I understand that all three parties in this House have waffled on the whole question and have shied away from coming to terms with it, so I can’t totally blame the government, but the government is the government and has a responsibility in this area. I understand quite well when the minister says he just doesn’t find acceptable a tax reform system that is going to cause major tax shifts from other sectors on to the single family residential sector; we don’t find that acceptable either.
On the other hand, it doesn’t seem to me we have got very far in dealing with the whole question of tax reform. We had a budget paper in 1976 which laid out some proposals and suggestions for property tax reform, and following that we had the Blair commission, and the minister has already mentioned all this. It’s just that his view of it is a little bit different from mine.
We had the recommendations of the Blair commission which weren’t acceptable to the government as a base for property tax reform, and last January we had the white paper from the Treasurer, which was slightly changed in the terms of its proposals from the Blair commission but still was not a politically acceptable document to the government in terms of the tax shifts it would allow to occur. Now we’ve got the report of the Treasurer’s provincial local government committee on property tax reform.
It has again made some minor changes in the proposals, but again it doesn’t appear to me as though the proposals of the most recent committee are very much more politically acceptable in terms of tax shifts than the original proposals in the budget paper and the Blair commission were. It doesn’t seem to me as though we’ve gone very far along the road towards finding the politically suitable answers to property tax reform.
The reason I’m raising all of this is that what really concerns me most is the government’s reluctance to take the bull by the horns and bring something into the Legislature which we can either amend or defeat or pass. The government’s reluctance to come to terms with this problem in terms of legislation is causing some very real and very frightening problems out there in the property tax sector.
If all of what I’ve just said means the present proposals before the government for property tax reform are still not acceptable, and if that means the reassessments in property tax reform have to be put off yet again for another year or two or whatever the case happens to be, then we’ve got some really serious problems to deal with.
One of the things that’s happening out there is that the values at which the assessment division in the Ministry of Revenue at present has properties assessed at, the 1975 market values, are very rapidly running out of credibility.
Hon. Mr. Maeck: The 1974 values.
Mr. Charlton: The 1975 values, I’ll correct the minister. At least, if it’s true that the system is uniform across the province it is the 1975 values. We have the 1975 values in the assessment office where I work, at any rate.
Those values are very rapidly running out of credibility in terms of their relationship to the actual market. If the reassessment isn’t implemented this year, it’s my view, and I think if the minister talked to the staff in his field offices on a very open and straightforward basis, he’d find out that the opinion in the assessment office is exactly that. They would tell him that if the reassessment isn’t implemented this year, those 1975 values will no longer have any relative credibility in terms of a market value assessment and the program will have to be redone.
I understand, for example, that a new manual with 1977 cost factors will be coming down this fall, and that is precisely what is going to have to happen if there is no implementation this year. That’s going to mean effectively that all the money that’s been spent on the reassessment will have been of no use, because we’re really no closer to implementation.
One of the reasons this concerns me a lot is that another thing is happening out there, as a result of a number of court decisions over the past three, four or five years. These court decisions specifically directed that assessment shall have a relationship to their full market value or some percentage thereof. As a result of those kinds of court cases that have already tied assessment to market value -- and the process has already started, it started a couple of years ago -- we’re going to have a reassessment of the province without any policy, without any control, without any ability to deal with the tax shifts, and without any ability to decide what should happen and what shouldn’t. That process has already started. I can’t quote you any figures on a province-wide basis as to what extent it’s going on, but it will increase.
In the city of Hamilton, for example, this year almost all apartment owners have appealed their assessments. A large number of the medium- and small-sized commercial and industrial properties have appealed their assessment. What is going to happen in the court process is that those with the money to hire the expertise, or those who have the expertise on their own, are going to go into the court and win reductions in their assessment as a result of their present assessment’s relation to the actual value of the property.
But the person who doesn’t have the expertise or the money to buy the expertise -- and that means -- and I think the minister knows it well -- the average home owner in this province; not the industrial or apartment sectors but the average home owner in this province, the person who can’t afford to make use of the expertise -- is going to be in the position of either not appealing because he doesn’t know he has any reason to appeal or of not being able to present a very sound and effective case in the assessment appeal process.
As a result, we are going to have those with the expertise winning the reductions and those without the expertise staying where they are. That’s going to cause tax shifts and those tax shifts won’t be desirable. They won’t be any more desirable, in fact they will probably be less desirable, than the tax shifts that are implied even by the government’s present proposals for tax reform.
I grant the minister that this process of reassessment through the courts will probably be more gradual. It probably won’t happen all in one thump because it won’t be something being implemented holus-bolus across the board. But the tax shift will occur nonetheless and as those who didn’t appeal this year and last year catch on to what’s happening and go out and get themselves the expertise, then the shifts will increase and eventually we are going to be at the stage where we have a system which, already inequitable, is grossly more inequitable than it was when we set out to fix it up. As I said, this process is already underway and we are already losing control of what’s going on out there in the property tax sector.
None of us has all of the solutions. I would assume the minister’s own party is split on the whole question of property tax reform. Ours is and so, probably, is the Liberal Party. We don’t know what all of the answers are but I want to say to the minister just as clearly as I can that the answers have to be found now, this year. We can’t afford to let this process go on any longer. If that means that, instead of the in-the-dark process we have had for the past 10 years, we have to go to an all- party select committee to come up with acceptable positions to all three parties and to the public in general, then perhaps that’s what we have to do. But the solutions have to be found this year before that alternative process out there in the real world goes too far and causes too many problems.
Just to sum up, Mr. Chairman, this ministry has a responsibility not only to provide revenue for the government but also to provide equity and fairness for the taxpayers of the province. I feel the ministry has failed in this task and I urge as strongly as I can that this ministry start now to play an active role in the setting of tax policies not just in the administration and collection of taxes but in the setting of tax policies; and that this ministry in so doing take a very serious look at the whole question of where taxes come from and who pays taxes and what tax shifts have gone on in the past that may not have been desirable, and start looking to implement a total tax package for the province of Ontario that will be equitable for everyone in the province.
Hon. Mr. Maeck: Mr. Chairman, a few questions were raised by the member for Erie. I think, first of all, he suggested there were no full employment goals because of zero-based budgeting which means there’s no employment growth in Ontario because of it. I think perhaps he is confused about what zero-based budgeting really means. It has nothing to do with economic planning at all. It’s simply an improved method of planning ministry operations so we can report to people who control our budgets, such as the Management Board and so on. It really has nothing to do with the economic impact of the economy at all.
Mr. Haggerty: I thought you’d follow the Treasurer’s comments in his statement on the budget.
Hon. Mr. Maeck: You also raised the question of the fact we were relocating to Oshawa rather than some other city or area. That policy of a move towards the east was set by the government some time ago as part of their decentralization plan.
Mr. Haggerty: Not far enough east.
Hon. Mr. Maeck: But you have to remember that because it is moving to the city of Oshawa it does not necessarily mean it will not affect other communities around Oshawa. It had to go to a city, for instance, that could provide the proper banking facilities and telephone facilities that you might not find in smaller communities. Besides, there is the fact that we’re talking about 1,000 people moving into a community; you have to find communities which are capable of accommodating those 1,000 people in education services, in housing and so on.
Mr. Haggerty: Sudbury was one.
Hon. Mr. Maeck: I am not denying that Niagara could probably do it as well --
Mr. Nixon: How about Parry Sound?
Hon. Mr. Maeck: -- and I certainly would like to have seen it in Parry Sound.
Mr. Nixon: South River?
Hon. Mr. Maeck: I don’t think it would fit into South River very well --
Mr. Cunningham: Burk’s Falls.
Hon. Mr. Maeck: Maybe Burk’s Falls; we could accommodate my friend Stan Darling from Burk’s Falls and put one in there some time.
Seriously, the government’s overall rezoning development plan was to move east of Metro, and this is consistent with that. As you know, we also announced the relocation of the OHIP people to Kingston. This is all consistent with --
Mr. Nixon: Not much done about that.
Hon. Mr. Maeck: It’s in the planning stages, I understand.
The third point you raised that I could probably talk about now -- there are many others that you raised that will come up in the votes as we go along anyway, and there is no use repeating them two or three times. You did suggest that perhaps it would be an idea to amalgamate the Ministry of Revenue with TEIGA. I would remind you that Revenue was at one time a part of TEIGA and it was removed because of the work load. It was felt that one minister couldn’t handle both, That’s the reason a new ministry formed, the purpose being that Revenue would administer the programs and the fiscal policies and look after the legislation for taxing purposes and so on, and the policies would be set by TEIGA.
This is a point that was raised by the member for Hamilton Mountain who was suggesting that this ministry should become more involved in the setting of tax policies. I would suggest to you that the tax policies usually come down in the budget, and the budget is a secret document. It’s the responsibility of the Treasurer.
The Treasurer does from time to time confer with the members of my staff to find out what sort of impact a certain tax would have on the public, what sort of situation would be caused if a certain tax were instituted -- those kinds of things. But basically the budget is a secret document and I, as Minister of Revenue, know no more about the budget until it comes in than anyone else in this Legislature, other than the fact that we may be asked to do some research on certain areas of taxation to find out what the impact would be if this or that happened. But we are never told exactly what is going to happen.
While I wouldn’t mind having the input, mind you, and I try to do that as much as I can, I don’t think it would work very well with our legislative system if the Treasurer had to consult the Minister of Revenue before he decided what taxing policies he was going to bring in in his budget. I think that’s where the problem really lies. I assure you I try to get as much input as I can into these taxing matters. But I don’t anticipate that this responsibility is going to change to that extent, because it’s the way the whole system is set up.
A great deal has been said about market value assessment and the problems of assessment. We’ll be getting into that in detail when we get into the separate votes. Let me assure the member for Hamilton Mountain in particular that I’m very much aware of those court proceedings out there that are certainly going to create shifts in taxes, whether we want them or not. I agree with the honourable member that if we do not move, the courts will decide these matters for us. They are not going to come in a reasonable manner; they may come in such a way that it’s going to cause a lot of confusion.
I would suggest to the member for Hamilton Mountain and the member for Erie that this is a problem that is facing all our constituents, perhaps, with the exception of those in such places as the districts of Parry Sound and Muskoka and a few other areas that are already on market value assessment, where we are not faced with these kinds of situations.
There are a great number of appeals before the courts at the present time, and there are major appeals; they’re large industries and hotels with large assessments who, if they win their appeal, will cause a great shift in taxation in various municipalities, not the least being Metro Toronto. There are many others. We have a great deal of inequity in some areas of the province as far as assessment is concerned.
We have to bite the bullet as the saying goes; that’s going to have to come from all members of this Legislature, and not just from the government, because we need the support of the members across the way if we are going to try to correct this situation. I hope we can come up with something that will be reasonably acceptable to all members of the House so that we can straighten out the problems we have as far as assessment is concerned.
I’m very concerned about this matter because I am aware of the great number of appeals. On the other side of the coin, regarding the market value assessment that has been implemented in the district of Parry Sound, which I’m very familiar with, of course, and the district of Muskoka, while there may be some politicians who would be very concerned that it would become a political issue when election time comes around, I must tell the members here that I have gone through two elections since market value assessment was placed in the district of Parry Sound and it did not become an election issue at all. It was never an election issue. To those members who are concerned about the reaction of their constituents, I would suggest that they talk to MPPs who come from ridings that have been reassessed and who are on market value assessment; they’ll find that it does not become a political issue in most cases.
Mr. Warner: It won’t be that easy in Toronto.
Mr. T. P. Reid: Even in rural areas?
Hon. Mr. Maeck: Mine’s a rural area, and I’ve gone through two provincial elections since we went to market value assessment.
Mr. Warner: You don’t expect a political problem in Metro Toronto?
Hon. Mr. Maeck: I’m only telling honourable members of the experience of the people who have gone through it. Members shouldn’t be so concerned because when we bring it in it’s going to be equitable.
Mr. Warner: That’s a new policy.
Hon. Mr. Maeck: I don’t believe that most people in this province want someone else to pay a percentage of the taxes they rightfully owe. I think most people are sincere and honest; if it’s pointed out to them that they have been paying less than their share and someone else has been paying more than they should have been paying, and if it’s presented in a proper way, I think most people will accept that perhaps they have been having a little bit of a free ride while their neighbour has been paying the shot.
Mr. Warner: The reverse is true for tenants in Metro. The windfall will go to apartment owners.
Hon. Mr. Maeck: Not necessarily. We can ensure that doesn’t happen. I think that would have to be done.
Mr. Warner: You disagree with the Treasurer then?
Hon. Mr. Maeck: Let me tell the honourable member that the Treasurer and I don’t agree on every issue.
Mr. Warner: That’s good.
Mr. T. P. Reid: But he wins all the time.
Hon. Mr. Maeck: I do think the problems we’re talking about are not insurmountable if we look at them coolly and calmly and sit down and discuss them properly with the people who are going to be affected. In my own area, I can recall tax shifts within single family units where some people’s property went down and others went up. I’ve talked to them and I’ve had many in my office.
Nobody likes their taxes to go up, but when you check their assessment and find that it’s proper, if you explain to them, “Look, you’ve probably been getting a lower tax rate than you should have all these years; perhaps it’s time now you paid your share,” most people agree with that. People are not as upset about paying their share. It’s the people who are paying more than their share now that we have to do something about.
Mr. Warner: Tell that story to Inco.
Mr. Cunningham: What about the licence plates?
Hon. Mr. Maeck: That really has nothing to do with my estimates. However, I think that answers pretty well all of the inquiries that were made up to this point, and if there are other things we will get into them in detail when we go from item to item in the votes.
Mr. Chairman: That completes the opening statements.
On vote 1001, ministry administration program; item 1, main office:
Mr. T. P. Reid: I’ll be very brief. I’d like to discuss a matter of policy with the minister for about 30 seconds relating to letters I have sent him and his predecessor over the course of the last year and a half relating to people going across the border into the United States and coming back with their purchases into Canada where they are not charged provincial sales tax. Usually they’re charged the duty and the federal sales tax, but not the provincial sales tax. This obviously has two effects. One is that the province is not getting its pound of flesh, but secondly it puts the Ontario merchants at a disadvantage in competing with the often lower-priced goods in the United States.
Obviously, at the moment the difference in the value of the Canadian dollar vis-à-vis the American has kind of wiped out that advantage for the American producers. However, we can’t count on that for ever more, and I wondered if the minister had anything to report in regard to his conversation with his federal counterpart as far as collecting the provincial sales tax. Would you have an estimate of how much money the province is losing as a result of this inability to come to an agreement with the federal government about collecting?
Hon. Mr. Maeck: I must say, Mr. Chairman, that I have not personally talked to my federal counterpart about this matter. Staff will prepare a proper answer for you. I’m not that familiar with it. It isn’t an area that I’ve been involved in up to this point in time. Certainly I will look into it.
Mr. T. P. Reid: Will you get back to me?
Hon. Mr. Maeck: I will get back to you.
Mr. Haggerty: I want to direct a question to the minister on his opening comments about the paralleling of corporation tax -- that is, the provincial together with the federal Income Tax Act. When can we expect that you’ll have the completion of this joint venture with the federal Income Tax Act and the provincial corporation tax? I’m concerned about this because I’ve had a number of small businesses, particularly in my area, that are having difficulties when filing their tax assessment. They presently have two tax forms to fill out -- one federal and one provincial. When can we expect the total amalgamation of the provincial corporation tax with the federal income tax?
Of course, the province or the minister may have to designate a certain item there that will not follow in line with or parallel the federal legislation, but I understand there are other provinces in Canada that have this agreement with the federal government. It’s similar to the provincial income tax where you have one tax collector instead of two. I think tax simplification is required in this area. We should have one.
Hon. Mr. Maeck: Bill 88 was an act we brought in last year to bring most of our Corporations Tax Act in line with the federal Income Tax Act. There are certain tax policies that this government has that are not in line. Really what we have said in Bill 88 is that we are in line with federal income tax legislation with the exception of those items that we listed. This is what I was referring to in my opening remarks.
If you are referring to using the same form, I don’t think that is a possibility at all because we have different taxing policies. We don’t necessarily agree with everything the federal people are doing as far as corporation tax is concerned. As long as we have a difference in some of the legislation or our ways and means of collecting, there would be no possible way of having one form to do both jobs. So I don’t anticipate, at this time at least, that we will ever get to the stage where we will ever be able to use one form and it would suffice for both federal and provincial. I don’t think that that would happen.
Mr. Haggerty: I thought perhaps in your present simplification policy, eventually you would reach a level that you would have almost the same tax base. Perhaps there are certain ones that the ministry could opt out of, but I am looking for something to make it much easier for the small businessman to be able to file a tax assessment without worrying about having a federal auditor or a provincial auditor come in and say that there was an oversight -- perhaps there would be $7,000 or $8,000 owing in tax assessment back two or three years ago. I know a number of the small businessmen in my area have gotten into this difficulty because there was an oversight due to not understanding the intent of both the income tax and the corporate tax act and its regulations.
Hon. Mr. Maeck: As I indicated, there is no way at the present time unless we completely change all of our taxing policies and adapt them completely to the federal policies. There would be no way that we could have one form. As you are aware, when it comes to income tax it is a different situation. Our percentage of income tax is based on the tax payable to the federal government and one form is used for that purpose. That is a different situation.
It is because our fiscal taxing policies are in some areas a little different that there is no way could we use the same form. But this year, as you will recall, in the amendments to the Corporations Tax Act, we did bring more of our act in line again with the federal people. We are working in that direction all the time. Does that answer your question? I know you may not agree with it, but --
Mr. Haggerty: It doesn’t go far enough.
Mr. Charlton: I would like to discuss with the minister for a moment some of my comments from my opening remarks and his response, specifically relating again to the assessment program.
It doesn’t deal with assessment policy, it just deals with a statement that was made about the urgency of the situation and how we deal with it. I suggested in my opening remarks, the possibility of an all-party select committee, in order to come to some kind of agreement that would be acceptable to all three parties in terms of tax equity.
I would assume that if the Treasurer and the Minister of Revenue can’t come up with proposals they are willing to legislate by June, we are going to be into the same bind of postponing it again. Would the minister be willing to consider seriously having an all-party select committee to deal with this if he can’t come in with some legislative proposals by June?
Hon. Mr. Maeck: I agree, as I said before, with the urgency of the situation. First of all, I want to have the government finish their review of that report from the provincial and local government committee. Whether it should be refined, adopted or what, the recommendation has to go before cabinet. Whether the government will adopt that or not, it is too early to tell. I have discussed it with the Treasurer and have expressed to him the urgency of something being done. Hopefully, this process will move along quickly.
If we have to look at other means, I am sure the government would. It is not a matter for me to decide actually, but the government may look at a committee structure of some kind if that became a last resort. Of course, that would delay things again and I believe whatever we are going to do should be done before the end of June. The legislation should be brought in so that staff within the ministries would know where we are going, municipalities would know what to expect, and residents of the province would know what to expect. It is something that should be done rather quickly.
If we get into a committee situation -- a select committee or even a standing committee -- by the time we get through all the representations that various interested people would want to make, I am afraid our time would have gone by and it would be too late to do anything this year. I am not against having a committee look at it as a last resort. I don’t mean that in a derogatory sense, that I want to exclude members from becoming involved in the debate, but I think it has got to the point where time is of the essence. I will be pressing the Treasurer to try to get some decisions on these matters as quickly as possible.
Mr. Charlton: I’ll just be a moment, Mr. Chairman.
That was my whole point, Mr. Minister, that in my view, if you don’t come in with the legislative changes before the end of June it is going to be postponed again. I wasn’t suggesting that we set up a select committee tomorrow. What I suggested was that if you can’t find agreement among yourselves in cabinet to come in with some proposals before the end of June, and we are going to have to put it off again, then let’s not go through the same process of shoving it off somewhere and keeping this side of the House in the dark. Let’s get into a process where the three parties can sit down and agree on proposals to come back to this House with. That is what I was suggesting -- if you can’t deal with it before the end of June.
Hon. Mr. Maeck: I don’t take objection to that. I think that is probably a good way to do things. As a matter of fact, as I said earlier in the House today, this is something that isn’t going to happen unless the majority of the members in the House agree to it. There is no question there has to be involvement.
I agree with you that if we can’t come up with a solution or proposals or legislation that could be presented to the House, then I guess we would have to look at other means. I would not be so bold as to suggest that it would be my prerogative as to whether a select committee was appointed or not, but certainly I wouldn’t be against it.
On motion by Hon. Mr. Maeck, the committee of supply reported progress.
On motion by Hon. Mr. Maeck, the House adjourned at 1 p.m.