Legislative Assembly of Ontario

The House resumed at 8 p.m.

RETAIL SALES TAX AMENDMENT ACT

Hon. Mr. Maeck moved second reading of Bill 58, An Act to amend the Retail Sales Tax Act.

Hon. Mr. Maeck: The bill we are about to debate implements the following proposals in the Treasurer’s (Mr. F. S. Miller) budget:

The price of admission at which tax at 10 per cent becomes payable under the act is raised from $3.01 to $3.51.

The tax at seven per cent on taxable services is extended to the consumption of telecommunications services, including community antenna television and cable television systems, pay television and microwave transmissions by fixed station or satellite.

The exemption from the seven per cent rate of tax for hotels, motels, resorts, et cetera, providing transient accommodation which was to expire at the end of 1979 is extended to March 31, 1981.

Provision is made to allow rebates of up to $700 of tax paid on the purchase of parts and materials incorporated into solar heating systems in residential premises.

Candies, confections and soft drinks which were previously exempt only when purchased for less than 21 cents will now be exempt from tax when purchased for less than 50 cents.

Packages or bags of candy and cartons or cases of soft drinks, the purchase price of which exceeds 49 cents, will remain taxable as will the purchase of two or more packages of containers of candies, confections or soft drinks for a single price in excess of 49 cents.

A new exemption is to be granted for the purchase of clothing patterns, certain textiles and fabrics and for self-contained household smoke alarms for residential fire protection.

Exemption is also to be given for certain furnishings and food preparation equipment used in restaurants and hotels provided such furnishings or equipment are sold and delivered in the period commencing April 11, 1979, and ending March 31, 1981.

In addition to these changes, other administration changes are proposed which will clarify the application of the act and the priorities of the crown in the recovery of the tax collected in trust under the act.

The period within which refunds must be applied for under the act is increased from two or three years for the refund of any payment made on or after April 11, 1977.

Provision is also made to specify the time within which the reply of the minister in appeal proceedings under the act must be served.

Mr. Haggerty: I would like to address myself to Bill 58, An Act to amend the Retail Sales Tax Act. The minister has indicated the purpose of the bill. It is an increase in almost every area, which will have an effect on almost every person.

I was interested in the removal of the sales tax from candies and confections and soft drinks. This is an area in which the government may lose some $16 million, I believe it is estimated in the budget report. Perhaps that is an area we should take a close look at. I don’t think it would actually hurt too many persons if the tax were to remain.

Perhaps the $16 million could be put to good use in a dental care program for our elementary school children.

Mr. Laughren: Are those the Liberal restraint taxes too?

Mr. Haggerty: I am just suggesting that this is an area where the government is dropping something off and encouraging young people to go out and perhaps buy more candy and things like that which are not the best of things for a person’s health. I am suggesting that this $16 million could have been used in a more useful way in Ontario in many of the government’s other schemes.

Mr. Laughren: I’m for denticare too. I’m with you.

Mr. Haggerty: My friend is with me? Good. That’s about the only time, isn’t it?

Mr. Laughren: We both want denticare.

Mr. Haggerty: I am also interested in the fact that the retail sales tax will be rebated, to a maximum of $700, on all materials purchased for incorporation into solar heating systems. This is a new area, and perhaps there hasn’t been much research done in this particular area; so the average person may not get much benefit from it.

We appreciate the tax rebate on home insulation; that’s really proving to be successful and of assistance to persons who want to reduce the cost of energy and to conserve energy. In this area, when we look at the federal election campaign at the present time, we have the Conservatives out thumping on the doors, saying “We are going to give you a preferred interest rate, a low interest rate, for the purchase of new homes, or older homes” --

Mr. Nixon: They’ll have to raise the sales tax to pay for that lost revenue.

Mr. Haggerty: We have the New Democrats doing the same thing, offering the home owners a good deal on low interest rates.

Mr. Makarchuk: Ours are different, though.

Mr. Haggerty: I know the hardship endured by a young person, or by any person who has to go out and make the most important purchase in his life; that is, a home. In this particular area, this party has gone on record in the past as stating that the sales tax should be removed on all building materials. In this way there is no special consideration given to any group in our society, nor is it based upon income level; every person would get a true break. Considering the cost of homes today, I suppose that would save him about $2,000 to $3,000 on the overall cost of purchasing a home and perhaps furnishing it.

I suggest that the government should be moving in this particular area instead of in this $700 rebate for energy conservation. I think the home should come first; then perhaps this could follow through if there’s enough research. I don’t know what $700 will do for solar energy in a home; not much. Insulation, yes; but solar energy? I don’t think you’re going to touch it -- for what? I don’t know. I don’t want to quote figures from the Ontario Hydro committee, but it’s been pretty expensive, has it not?

Mr. Nixon: Very expensive.

Mr. Haggerty: Very expensive; so in this particular area I suggest that the minister should be removing the sales tax on building materials. If the government wants to give the economy a boost, it should remember that the last time a boost was given was in connection with automobiles, and everybody went out and bought new automobiles.

Mr. Nixon: You’ve got to have an election before they start boosting the economy.

Mr. Haggerty: That didn’t hurt the Treasurer’s sales tax revenues. They didn’t go down; in fact, they went up that year. The government may have lost an estimated $300 million directly, but its general revenues were increased as a result of additional automobile purchases. In this particular instance, to get more employment in the other areas of home construction, the government should be reducing the sales tax in this area. It should cost the government nothing.

Hon. Mr. Maeck: Oh, it costs a little.

Mr. Haggerty: No, it doesn’t cost the government anything. I think this is perhaps a better deal. The government could steal some of the thunder from the federal fellows who are knocking on these doors promising almost everything. If the federal sales tax were knocked off building materials, and the provincial sales tax, I suppose we would be looking at 19 per cent --

Mr. Nixon: Is the federal sales tax still 12 per cent?

Mr. Haggerty: Twelve per cent; yes, I think it is. So we would be looking at 19 per cent.

The other area I think we should be looking at is the matter of taxing the --

Mr. Makarchuk: Land speculators.

Mr. Haggerty: Lands? No, I’m talking about the new revenue that’s going to be generated from the tax on cable television. This is another area where the government expects to gain additional revenue. I am kind of hesitant about the government moving in this particular area. There are other areas where taxes are collected through the matter of advertising and television and through other areas related to television and I suggest that this area is going to hit the average fellow again, the average TV watcher who wants to enjoy a hockey game or a baseball game who perhaps can’t afford the $15 to $20 a seat to see the NHL playoffs.

Mr. Nixon: $20?

Mr. Haggerty: I think my colleague was down in Montreal the other day. I think he paid around $15 to $20 away up in the bleachers some place.

An hon. member: The second seat from the roof.

Mr. Haggerty: The second seat from the roof is correct. I am suggesting to the minister that this is another area that hits the small person. Then the NDP comes back and says that they are going to put a five per cent tax on bank profits. In the Financial Post of April 28 we see: “Banks Moving In On Europe’s Currency Markets.” The Royal Bank, the Canadian Imperial Bank of Commerce, the Bank of Nova Scotia, the Bank of Montreal are all going to England to invest over there. They are taking Canadian capital and investing it over there perhaps to generate huge profits out of which this government is going to get nothing.

Mr. Makarchuk: Labour is taking over again. They’ll be withdrawing their investments.

Mr. Haggerty: The member thinks that’s going to be? He might have some points, but I am only suggesting to the member that if he looks at the huge profits the banking industry has generated since the early 1970s -- and it has continued to do so -- and he comes back and says; “We will just touch them with five per cent,” and if the minister comes back and says to the person who wants to watch cable television, “It is going to cost you seven per cent just to watch that show” --

An hon. member: Do you want to tax the banks, Ray?

Mr. Haggerty: I am fortunate in the area I come from. I don’t have to have cable television because I can get about four or five American channels --

Mr. Nixon: On a coat hanger.

Mr. Haggerty: That’s right, on a coat hanger. It’s all done through advertising. But here you want to go and hit almost everyone. Look at the senior citizens who, through some agreement through Ontario Housing, have been forced into cable television; they will have to be paying this tax to see those programs. I don’t think that’s right. I don’t think the government should move in that direction. There are other areas through which it could have collected the additional taxes that are required.

If the Treasurer had cut back on government spending -- I was interested in reading the article on government spending in the commercial letter from the Canadian Imperial Bank of Commerce. If one looks at Canadian government spending as a percentage of gross domestic product, Canada ranks third in the world. Sweden -- you can’t touch them; they are above everybody. The United Kingdom is next and then Canada follows. The United States is about 35 per cent; Canada is about 42 per cent; adjoining countries -- next-door neighbours. You find they can cut back on government expenditure without causing too much difficulty in the employment situation on the American side, but here we seem still to have heavy government spending, high unemployment and high taxes. One has to question the minister to find out in just what direction his department and the Treasurer is going.

I think I can agree with the matter of the exemption for household smoke alarms. That should have been done a couple of years ago to encourage the purchase of smoke detectors. This provides safety within a home and I suppose in the long run it’s a benefit to all of us.

We got into the matter of the transient accommodation as it relates to the tourist industry. I talked to that the other day. One minute the government is giving the tourist industry a break to encourage people to visit this province, and then the government turns around and hits them with an additional gasoline tax and alcohol tax. There is no benefit or gain there; the minister is probably breaking about even, if anything.

[8:15]

Mr. Makarchuk: He is a man who brings misery to people, isn’t he?

Mr. Nixon: Who?

Hon. Mr. Maeck: Not me.

Mr. Haggerty: There is an exemption for commercial aircraft, but when one looks at what is indicated there, the budget says: that effective April 11, 1979, the present exemption for aircraft will be expanded. Purchase of commercial aircraft and parts for such aircraft will be exempt from tax if certain conditions are met. The aircraft is registered. It would have to be registered any time one is going to fly an aircraft.

The exemption applies to the purchase of a licence to provide some classes of commercial air services. If one looks at the huge profits that have been generated by air carriers across Canada, one has to question why the minister would be moving to exempt them from retail sales tax in this particular area. It is just unbelievable that this budget actually places hardship on the average working man or the wage earner in Ontario. It is hard to follow it.

With those comments, it is rather difficult to support the bill in a sense, but I suppose we have to support it, not willingly, but in principle and with some disagreement.

Mr. Laughren: Come on. Grasp the nettle.

Mr. Haggerty: We will support it in principle, but there are other areas where the government could have moved in and added additional revenue without hitting the average person in Ontario. That is what the budget is going to do. It is going to have every wage earner in Ontario hitting management for higher wages to offset this increase in taxes. It is going to start up the whole spiral of inflation again. It is getting up almost to double-digit figures again, and I would be concerned about that.

This puts pressure in that area. Through the bargaining process and other measures that the labour force has, it is going to be going to the bargaining table. Perhaps we are going to see more strikes because people are not just going to tolerate it.

Mr. M. Davidson: You are not against reasonable wage increases, are you?

Mr. Haggerty: They are going to have to match their incomes with the cost of living. We can see it in the price of milk going up and we can see it in almost everything. Yet we find the government can step in and apply taxes, but they can’t apply any means or measures to control high profits in certain industries and in the food industry.

Mr. Laughren: I think he is talking about wage controls.

Mr. Haggerty: No, I am not talking about wage controls. If things aren’t brought under control the government is going to have to bring in measures to control it, whatever they may be. Before we get into that particular area, I think the Minister of Consumer and Commercial Relations (Mr. Drea) is going to have to step in and do some knuckle-rapping. The public isn’t going to tolerate it. The government can’t tell them to hold their wages at six per cent and then allow other segments in our society and industry to increase their profits, and some of them have been huge.

I heard the member’s speech this afternoon. He is right on on some of his points. The government has permitted them to seek higher profits. Of course, we have to have profits if we want to have what we call the free enterprise system, but I think those profits have to be shared with the rest of the people in Ontario and throughout Canada. If the government doesn’t bring in some measures besides tax increases, then it is going to run into difficulties very shortly.

Mr. Charlton: Mr. Speaker, I rise to speak to Bill 58 and to convey to the minister a surprise. We are not going to oppose this one.

Mr. Gregory: There must be something wrong with it.

Mr. Sterling: Withdraw the bill.

Mr. Makarchuk: However. Wait for the “however.”

Mr. Samis: He is reconsidering now in view of the members’ reaction.

Mr. Charlton: This bill is a total mish-mash of good and bad, of positive ideas and of betrayal and contradictions of those good ideas.

Mr. Kerrio: Lorne the betrayer.

Mr. Charlton: Just take a look at how the positive in this bill has been riddled with holes by the contradictions and omissions.

Mr. Nixon: You have a new writer for your caucus.

Mr. Samis: He can handle it himself, Bob.

Mr. Charlton: The government, the Treasurer, the Minister of Revenue and whoever else worked on this circus -- and it is a full three-ring circus -- have shown their real colours. They have shown there is really no direction on the part of this government in using its tax policy in an economic sense, in a stimulative sense and in an overall positive sense. No planning, no direction and no goals at all.

Let us take a look at some sections of this bill, both on the positive side and in terms of those contradictions and those betrayals of the positive that are indicated in some sections.

We start out by talking about the seven per cent exemption from sales tax for hotels, motels and resorts. This is a positive move and we will support the minister on it. It may create or maintain existing jobs; it may even help to save some small operators who have been under exceptionally extreme pressure over the last three or four years in the tourist industry. No problem; we will not oppose that move.

But let us take a look at how that positive section of this bill is complemented by some of the other sections: The government increases the exemption on admission prices to theatres -- the 10 per cent tax on theatres. They increase the exemption from $3.01 to $3.51. That is nice for those who go to theatres. But there are hundreds of thousands of people in this province who cannot afford to go to theatres or who do not even have theatres to go to. The Speaker himself will know of dozens of areas where there is no theatre to attend.

Mr. Nixon: What do they do in Schreiber for entertainment?

Mr. Charlton: I would ask the minister why can we not have a tax move that is effective in terms of offering a tax incentive to all the people of Ontario instead of a luxury, elitist tax break like this one? Why can we not have something that deals with the people in this province who really need help?

What do we see the government doing next? First of all, even if everybody in Ontario could afford to go to the theatres, and even if every theatre in the province were operating at half capacity and this increase in exemption to theatres were to fill all the theatres to capacity, it would not create any new jobs. The ushers perhaps would have to work a little harder but it would not create any new jobs. It is very unlikely that everybody would go running out to build new theatres and to hire new staff, because people do not do that until the capacity has been there for some considerable time and the demand effectively warrants it. So it is not likely to have any serious effect in terms of economic stimulation either.

Some of the moves in this bill are positive, as I suggested already, but some of the moves make absolutely no sense at all. The government moves into the area of confections and candy bars and soft drinks, and increases the area of exemption from payment of the seven per cent tax to cover products costing 49 cents from products costing 21 cents. On the surface it is a tax reduction for some; it appears to be what they call incentive -- stimulation.

Mr. M. Davidson: It’s rotting my kids’ teeth.

Mr. Charlton: What area do they pick? Junk food.

Mr. Roy: And no dental care program.

Mr. Charlton: Surely the Treasurer and the Minister of Revenue could have found, in conjunction with their staff, some area more socially appropriate that could have been more economically useful than the junk food area.

Hon. Mr. Maeck: Are you against children?

Mr. Samis: Are you against denticare?

Mr. Charlton: Perhaps the government should have considered something along the lines of a graduated retail sales tax exemption on energy-efficient automobiles instead of junk food that is going to rot kids’ teeth, as my colleague says. Perhaps a graduated tax exemption on energy-efficient automobiles would have been a much more positive and stimulative move to make.

Mr. Gregory: Kids don’t drive automobiles.

Mr. Charlton: But no, we’re stuck with junk food. Not only is it an area that isn’t essential to anybody in this province, this tax increase exemption is also inflationary. Already since the introduction of this bill, candy bars that a few weeks ago sold for 25 cents have gone to 30 cents; and they’ll go to 35 cents and to 40 cents. It is stupid. Not only is this government dealing in areas that have very little relevance to this province in economic and social terms, but they are also adding to inflation in so doing.

But there are some positive areas in this bill. We have the government providing a rebate of up to $700 on solar heating equipment. That is useful, that is stimulative. It may create some new industry; it may create some jobs; it may create some economic expansion. It may also create, and most likely will create, some useful initiatives in the area of energy conservation.

We also have the section on textiles, which is at least to some degree useful. Isn’t it nice though that the government turns around after making two positive moves in those areas and implements a tax on cable television and community aerial television? The cable television tax and the community antenna tax is a tax that will affect everyone who partakes of those particular commodities.

In the urban areas of this province it is also going to affect senior citizens very seriously, who in large part don’t have any choice about whether they have cable television or not, because it is included in their rent. They may not have a television, but they pay the cable rate anyway. So this is a tax that is going to affect those that can least afford it.

Last but not least, I would like to comment on the section of the bill that deals with the exemption on furnishings and food preparation equipment used in restaurants and hotels. It is probably a positive and a stimulative move. It could be very useful, but in their rush to complete this bill, perhaps even a rush to impress somebody, the government missed the mark, the Treasurer missed the mark, and the Minister of Revenue missed the mark. In order for this section to be really useful, it should have required that those commodities and items bought for installation in that particular sector be Canadian-made; that they be produced in Canada. They missed the mark. The effect of this section will most likely be lost. There may be some small effect, but they missed the maximum effect.

[8:30]

It’s really unfortunate that in a bill with some positive moves we have to find so many contradictions and we have to find such a mish-mash of positive contradictions and omissions that leave us on this side of the House very seriously questioning where this government’s economic direction is and where this government’s economic approach will lead us, asking ourselves what its economic goals are and questioning whether or not anything it tells us in economic terms has any real meaning when we see this kind of contradiction all in one piece of printed matter.

Mr. Williams: Mr. Speaker, it’s somewhat disheartening to listen to the negative attitudes and comments expressed by the members from the third party --

Mr. Samis: How many Tories are listening to you?

Mr. Williams: -- when they address themselves to major issues of the day as reflected in the budgetary policy of this province.

Mr. M. Davidson: We’re talking about the retail sales tax, not budgetary policy.

Mr. Williams: To listen to the member for Hamilton Mountain speak seriously about the problems of the tourist industry and, in the same breath, express concern about whether we should really be assisting small industries in this province leaves something to be desired and something that should be read carefully when one reviews the official records of Hansard to see exactly where the members of the third party stand on assisting the small business enterprises of this province, which, I remind them, are still the backbone of the economy of Ontario.

I think the third party loses sight of the real facts of economic life in this province when one of the major industries of this province -- the tourist industry -- finds itself in not the best of economic times. One only has to visit our neighbouring states to the south to recognize that some of the economic disadvantages --

Mr. M. Davidson: You’ve already priced yourself out of the tourism industry and now you’re trying to do it again.

Mr. Williams: -- that exist in this province are related to the cost differentials in room charges in the neighbouring states.

Mr. M. Davidson: They’re going to go up because of cable TV charges.

Mr. Williams: I think it’s very difficult to encourage our American friends from the south to come to visit and spend their vacation time in this province when they find room rates for the regular-size family of three or four people would be perhaps $26 to $35 here while they could find comparable accommodation in New York State or Ohio or Michigan for $19 or $22. Even with the benefits of the exchange rate running in favour of the Americans, it is difficult to persuade them they are getting good value for their dollar if they find we are pricing ourselves out of the tourist market in this jurisdiction.

Mr. Nixon: When was the last time you checked into Sutton Place?

Mr. Williams: This government has recognized realistically the differential that does exist and has recognized the need to come to the aid of the tourist industry to provide some assistance --

Mr. M. Davidson: By driving up room rates?

Mr. Williams: -- in the form of tax relief to make it economically competitive with the tourist industry in the neighbouring states.

Mr. M. Davidson: Every hotel and motel with cable television will increase its rates.

Mr. Williams: It is only appropriate that this government would assist one of the largest industries of the province which, I understand, employs in excess of 400,000 people and represents over 10 per cent of the economy of this province as far as the labour force is concerned. For the members opposite in the third party to slough off the efforts of this government to come to the aid of this major sector of our economy --

Mr. M. Davidson: John, we support the tax exemption on the tourist accommodation.

Mr. Williams: -- and look at it in a way of supporting them, reluctantly, does indeed leave something to be desired.

When, indeed, one of the major economic sectors of our province is in difficulty, the time comes for partisan politics to be put aside and for all members of the House to join with the government and support those industries by initiating what legislative benefits we can impose to assist those industries. We shouldn’t be continuing to look at the tax proposals and benefits in a suspect way and in a partisan way. There may be some areas, and there will be certain bills that come before this House that we’ll be debating later this evening, and later on this week, where the opposition will undoubtedly see fit again to oppose government initiatives.

Mr. Laughren: What do you think our job is?

Mr. Williams: But certainly this is one sector where I think there isn’t room for that type of partisan bandying about. I think that we should, indeed, all be giving strong support to the tourist industry which, indeed, is in some difficulty. So it is with regret, Mr. Speaker, that I do hear these reluctant rhetorical remarks of support this evening from the third party.

Mr. Roy: You’re being absolutely objective.

Mr. M. Davidson: John, you’re wrong again. Do you ever read your stuff?

Mr. Williams: I guess the only surprise is that they support us at all in this initiative, Mr. Speaker.

Mr. Laughren: Don’t feed the bears.

Mr. Williams: While I have yet to hear from the members of the official opposition I’m sure that they will take a more responsible position on this particular issue and will, indeed, be supporting the government in this particular initiative which is vital and imperative to ensuring the economic well-being of the tourist industry which so much needs our support at this time. So, Mr. Speaker, I would hope that with the support of the more responsible members in the opposition this evening, we will see a speedy passage of this legislation. Thank you very much.

Mr. Nixon: Mr. Speaker, I’m surprised the member for Oriole was not in his place when my colleague, the member for Erie, our official critic in the area of revenue, made it clear what our position was in this legislation. The bill is just diddling around with a piece of regressive taxation. I wish that the management of the tax base of the province had been such that we wouldn’t need a sales tax at all. After all, the Conservative government in Alberta is able to finance its activities without a sales tax. I don’t know how they do it when this government can’t do it.

Hon. Mr. Maeck: Find us a few oil wells and we’ll withdraw it.

Mr. Nixon: Certainly, it is an amazing thing.

Mr. Sterling: How are your provincial Liberal governments doing?

Mr. Nixon: If you were any good as a Tory government you would at least be able to do as well as your opposite numbers in the west, after all the hardships they’ve experienced these many years.

I can recall when the tobacco tax was included with the sales tax. I think it’s worth about $300 million. I see some people under the gallery who would know. It occurs to me that if you lumped it all together the revenues from sales taxes would be about $2.5 billion, which has to be one of our major sources of revenue.

When Mr. Frost introduced the tax back in 1961, he thought it would be the end of the Tory party. He introduced it at three per cent with all sorts of exemptions so that it really was not going to be an extensive burden at the time. But since then, it has not only grown in size until we’re collecting $7 million a day, but it has become a significant political instrument, as the Minister of Revenue well knows. Seven million dollars a day is collected every day -- Christmas Day, Sundays, the minister’s birthday, election day, every day -- $7 million a day is nickel and diming its way into the bottomless treasury of the province of Ontario. The allocation of those funds is, of course, a matter of major concern.

I would think the minister, although he wouldn’t admit it, would probably be giving a rise to the person who had the brilliant idea to tax cable TV. They must sit around over these two-and-a-half-martini lunches thinking of ideas as to how they could expand the base of the sales tax, because it is extremely lucrative.

If, and God forbid, the Tories are ever returned with a majority, you are going to see that tax go up probably a point or two each year for the first couple of years so that they can extract themselves from the mire of deficits they have wallowed in for these many years. That is one of the reasons we are so committed not only to seeing that they are not continuing in their present minority situation, but that they are turfed out of office so that a new and clearer view of public finance can be introduced after these many years.

Mr. Conway: Down with the scoundrels.

Mr. Roy: They will be taxing babies next.

Mr. Nixon: Certainly the person who had the idea of taxing cable television was in a sense inspired. It is interesting that with one hand the government is taking it away from the television viewers and with the other it is channelling, funnelling, pouring $20 million into Ontario television. I don’t know if anybody in this room watches it and I don’t want to spend all my time damning it, but there is $20 million of expenditure there just so that we can see the reruns of Judy LaMarsh interviewing Stephen Lewis, and things like that, interesting though those matters may be, and our good and old friend Elwy Yost -- and I don’t know how to spell it, I say to Hansard -- showing those great old movies and the reruns of my favourite television program, The Prisoner, which perhaps, Mr. Speaker, you have been able to see up in Schreiber.

I see, Mr. Speaker, you are looking at the bill and the relevancy that my comment has with the taxing of cable television. I happen to have an article here which had a fact in it which I considered interesting. It is from an article by William Dampier on TVOntario and in the article it says: “Two point two million people who live in the Toronto city area can choose from more diverse channels than any other metropolis in the world.”

I found that quite interesting and I believe it is true. There was a time before the oppressive heel of government censorship descended when we could even get blue movies in this town. I understand that is not the case any more. There were some people in my area who didn’t have access to cable who even put up a special rotor thinking that maybe by careful fine tuning they might be able to pull that in on a Friday night, but they tell me it didn’t work worth a darn.

Mr. Sterling: All they got was All in the Family.

Mr. Nixon: I don’t have cable television myself. Very few people in my constituency do, so it could be that those people in my area probably think cable is not a bad idea.

I am surprised, though, that the member for Oriole was so supportive of it because surely all the people he would normally call on for support are going to be called on to pay this additional tax. We haven’t had such a strange tax since Mackenzie King tried to put tax on radio receivers. Do the honourable members remember those radio tax guys who used to go door to door collecting -- was it $5? I think they could collect $5 and keep $4 for themselves and send a dollar in to win the war. It was a funny kind of tax. This one I suppose is easier to collect.

I was interested also in the strong support the member for Oriole gave the concept of keeping the sales tax reduced on hotel accommodation. I interjected that perhaps he had not checked into Sutton Place recently, because even though we had extended this exemption, I was told by the fine lady behind the counter in Sutton Place yesterday, Francesca is her name, that the rates, even the special rates for members of the Legislature, were going up to $40 today.

[8:45]

It seems to me that even though the sales tax is removed, the hoteliers in this community charge all the traffic can bear plus 25 per cent anyway. In those hotels where the amount of money is paid on an expense account, as is the case for members of the Legislature, there is a tendency to say, “Oh, well, $40 or $50; what’s the difference?” I find it really appalling.

I say this frequently, and I suppose as I get older I’ll say it more and more frequently, that when I was first elected here you could get the best room in town at an MPP rate for $8 a night, actually $5 a night if you went to the King Eddy, which in those days was quite anxious to have business.

Mr. Worton: Four dollars.

Mr. Nixon: The honourable member for Wellington South says $4, but he has been here longer than I. My sainted father had a suite in the Royal York at $1 a day for seven years. Of course, that was in a day when the Liberals were in office and the economy was much more moderate. Everybody was employed, the budget was balanced and all was right with the world.

Actually I have a feeling that the hotel-keepers are simply laughing at us as we reduce that tax because certainly their rates do not seem to reflect the reduction in tax. It is true, as the honourable member for Oriole has said, that the tourists from the United States are simply appalled when they come up here and see what they must pay even for moderate accommodation let alone the grand luxe that you get in Sutton Place. I mention that in case the manager happens to see my remarks because it is a very fine hotel.

You know we really are subject to very serious ripoffs, not just in hotel accommodation but in other areas. As I was dressing this morning before coming over to the Legislature, I was watching the Today Show, which is an American program, and there was an ad there for the Muffler Man, a company that the honourable members might do business with, although the minister with his government limousine doesn’t worry about mufflers, that’s for sure. It said at Muffler Man, and this commercial was from Buffalo, a motorist can get shock absorbers for $39.95, and in small print at the bottom, it said they are $59.95 in Canada. It just made me sick. Why should there be that kind of difference? I would think, Mr. Speaker, in case you’re worrying about it --

Mr. Samis: Where does the sales tax come into it?

Mr. Nixon: -- that a good deal of the difference has to do with the sales tax that’s imposed on these products in this province.

Mr. Samis: You’re stretching that one, Bob.

Mr. Nixon: I was also quite interested in the increase in the basic exemption to 49 cents. The NDP are worried about their children’s teeth because they are of course very permissive as parents and their kids are working on bubble gum and stuff like that most of the time. Actually it’s better if the parents impose some sort of discipline because I don’t think the kids ought to be disciplined simply by the tax base; that’s a bit far-fetched.

I do recall, and I think a few of my colleagues will remember, that back in the early 1960s there was a very strong feeling that the base deduction should not be 49 cents but $25. A very well researched prediction and review by noted economists indicated that even with an exemption of $25, the revenue from the tax still could have been established on a basis where it would be, let’s say, worthwhile. Perhaps it wouldn’t have been returning $7 million a day, but I don’t think when Les Frost introduced this he was really thinking of it becoming the cornerstone of finance, even with the government of Ontario at such a heavy deficit level.

I personally was very pleased indeed to read of the exemption of yard goods and patterns. While the people in my area may not be concerned with cable television, most of the ladies and the farm housewives do a lot of their own sewing and I think as they become aware of the fact that yard goods and patterns are now tax free, and my wife tells me that the patterns are becoming very expensive indeed, the fact that they are exempt is something worthwhile, encouraging people to do that sort of work.

I wonder where that idea came from. It’s interesting that as we see the various exemptions and changes in the sales tax over the years, one can usually trace the individual changes back to somebody’s pet idea. I can remember the Honourable John White exempted flowers from sales tax and they are still exempt. It might have been because his in-laws were flower producers and great rose growers down in the Port Dover area. I said so at the time when he was here as Treasurer, so I guess he won’t be offended if I say it again. They are still exempt and it’s probably a good idea. Far be it from me to recommend the extension of the tax to other sales and other items.

Even a day or two ago when we were talking about land transfer tax, I read to the minister the recommendation from the royal commissioner, Lancelot Smith, that the land transfer tax was inefficient and that the government should apply sales tax to real estate commissions. I would hate to recommend that, but it is an alternative that is of interest.

Actually it is never a good idea for an opposition member to recommend an increase in tax. As I recall my history, it was one of my predecessors as leader of the Liberal Party, two or three back, who recommended at one time that the sales tax be established in the first place. It was for a very very restricted means -- so that we could have the kind of education and health system we deserve. But probably the speech that did that gave Les Frost the courage to go ahead with the blooming thing.

Mr. Samis: Taking back any credit for it?

Mr. Nixon: But from small insignificant things come great monsters, and that’s what we are dealing with now. I don’t feel the principle of the bill is such that we can really support it or oppose it. It has become the cornerstone of the finance of the government of the province. The real cornerstone of course is the government of Canada, which raises most of the money for this government and transfers it, no strings attached, so the Ontario government can spend it as if it had raised the money itself, but that’s another matter. So if there’s any doubt in the mind of the minister or the member for Oriole, I don’t believe there will be a division on this bill at least in principle.

Mr. Samis: Mr. Speaker, I must confess in addressing this bill I can’t recall the days when the King Eddy charged only eight bucks a night.

Mr. Conway: Five.

Mr. Samis: My God, you are dated.

I must say I bear no personal grudges or wounds in terms of that former cabinet minister from Niagara Falls who has obviously battered and wounded the good man from Brant-Oxford-Norfolk for an eternity I think. Elections gone, career passé, that wound will show forever the scars upon us.

Mr. Nixon: The former cabinet minister.

Mr. Samis: Getting a little closer to the content of the bill, this one is a mixed bag. It is part of a generally inflationary inequitable budget. There are certain things in it that merit some degree of support.

First of all I would point to the special exemptions for the hotel-motel tourist accommodation industry. I think a previous speaker pointed out that really what we are doing is giving with one hand and taking with the other. In my area many of our tourists either come from Quebec or the United States and immediately they will notice the increased price of gasoline as they cross into Ontario; immediately they will know the increased costs of booze and tobacco as a result of this budget in Ontario --

Hon. Mr. Maeck: No, no, that’s wrong.

Mr. Samis: -- so what they are saving, especially when they cross from New York state, they are going to be paying just for driving in the province -- especially if they go on that gas-gouging 401. They will get all their money returned to the provincial Treasury through the exorbitant prices being charged there.

But I do support the idea of extending the exemption -- as my colleague from Hamilton suggested -- in terms of the food preparation equipment. I think he had an excellent point in terms of specifying special consideration for Canadian-manufactured equipment and Canadian-manufactured furnishings. I don’t see why we have to treat foreign, especially American, furnishings and equipment on the same level as Canadian. We have to encourage our own domestic industry. It is in enough trouble as it is. I think his suggestion of inserting a special clause to that effect was a very worthwhile one.

The $700 rebate on solar heating equipment is something I think we, on this side, have suggested for several years now in various budget debates. The point I would ask though is why we still don’t have in the province any form of home insulation program. I recall the flash from Prince Edward-Lennox promising before the 1977 election a major comprehensive home insulation program for the people of Ontario. Then as soon the feds began to move in that direction, it was, “We were thinking of it. We were intending it. We never made any specific commitment to it.”

Such an insulation program would save more people more money in the province, because solar heating is beyond the financial capability of most people today. Most people are going to keep what they have in terms of their home heating systems. If we had a home insulation program, it would cut their costs, reduce our energy demands and obviously help our long-term economic position and help the consumer in Ontario. But, no, we are resorting to the solar incentive, which I can support on its own merit, but I think it is a poor substitute for a meaningful home insulation program in this province.

The one core part of this bill that I really reject and resent is the imposition of this new, nefarious and nebulous tax on telecommunications, especially the cablevision tax. I strongly oppose the imposition of this new tax. I know in my particular constituency, in the city of Cornwall at least, over 90 per cent of the homes now have cablevision. This is going to affect virtually everyone in our community, and that means working-class people, middle-class people and the upper-class people.

Mr. Bradley: The NDP.

Mr. Samis: We know with any tax -- I hear my friend from St. Catharines. Remember Mackenzie King, and the taxes he introduced? Temporary measures, we were assured, purely temporary measures. We know the end result of that; the temporary measure unto eternity. It goes up virtually every year for the average working man. I would dare predict today that after the next election, if this bill is passed and we have the cablevision tax, even if that side happens by some sort of fluke, to coalesce with the other side, then this tax first of all will be increased. I would dare say within three years it will be at least double the rate that is being suggested today in this province.

Mr. Conway: Are you against the baby bonus, George?

Mr. Samis: All you have to do is look at the saga of taxes, whether in Ontario, whether in Renfrew, whether in Canada or in any part of North America. We all know the saga of the income tax, that nebulous temporary measure. We all know the saga of the general sales tax; a temporary thing, just a minor tax. We all know that saga of the customs and excise tax. The Liberals especially know the saga of the customs and excise tax. We all know the saga of the gasoline tax.

Mr. Nixon: You are the only person who knows what you are talking about.

Mr. Samis: We all know the saga of the tobacco tax; we all know the saga of the alcohol tax; we all know the saga of the motor vehicle licence tax.

Mr. Deputy Speaker: And now back to Bill 58.

Mr. Samis: This is history, Mr. Speaker, leading up to this tax.

We all know the saga of the motor vehicle fuel tax; the saga of the OHIP premiums. We know whenever there is a tax imposed on the average taxpayer in this province, there is only one way it goes with the Tory government and that is up; consistently. The history of Ontario is clear, and even the member for Ottawa East can see that. I would defy the minister to tell us that three years from now this tax will not be at least double the rate that we are now being asked to approve today.

Mr. Bradley: Not in Parry Sound.

Mr. Samis: It is interesting, Mr. Speaker, that this tax has created such a reaction in my own particular constituency that one citizen, completely on his own, a Mr. Alex Seguin, has taken it upon himself to start a petition to protest this tax. He has never in his entire life engaged in any such activity. He tells me that as of tonight -- I think he started a week or so ago -- he has already got 2,000 people to sign that particular petition protesting this tax. I emphasize, this man has never done this sort of thing in his life before. He is an ordinary working man who is currently unemployed, protesting this tax.

Mr. Speaker, you look at that person who is watching his cablevision and he says, “Gee, well, I don’t mind this tax if I know everyone is sharing it equally in terms of the overall budget and the imposition of taxes.” But then he looks at this budget and he sees what happens with people who have estates of more than $300,000; he sees what happens to the corporations that get $200 million given to them; he sees what happens to the pulp and paper companies, that have $100 million given to them. Then he sees what happens to poor Henry Ford, who has $28 million given to him; he sees what Lord Darce gave to the manufacturing sector last year in tax deferrals -- $115 million.

Yet here we go imposing a new tax for the sake of raising seven million lousy bucks in this province; we hit the average taxpayer again. We allow the loopholes to continue, we allow the privileges to continue.

Let me be very constructive tonight. The minister would say, “Well where else would you tax, if not the cablevision tax?” Let me make a very specific proposal.

Mr. Warner: The Progressive Conservative Party.

Mr. Samis: On page 15 in the budget statement the Treasurer proposes to increase the capital tax rate on banks.

Mr. Deputy Speaker: Order. The honourable member is straying considerably from this bill.

[9:00]

Mr. Samis: This is the retail sales tax, Mr. Speaker, I am contrasting the burden. While we are increasing the tax on the average consumer via cablevision, we are increasing the tax on the banks from three fifths to four fifths of one per cent, effective the night of the budget. If we were to increase that from three fifths to a full one per cent on those poor, downtrodden, suffering, profit- starved institutions called banks, we would not have to have a cablevision tax.

I notice the federal leader of the NDP last week exposed another area where the banks are pocketing increased profits and paying the same level of taxation as the average working man does in Ontario. I would say that if this minister wants equity in this budget, let him scrap the cablevision tax and raise the tax on the banks and the people of Ontario will support him 100 per cent.

Mr. Deputy Speaker: The honourable member for Carleton-Grenville.

Mr. Roy: I suppose you are going to support this act.

Mr. Sterling: Yes, Mr. Speaker, I am rising to support this particular bill --

Mr. Warner: One of the Sheriff of Nottingham’s men.

Mr. Sterling: -- in one regard, and express some disappointment in one area which I think perhaps should be expanded. The area which I find most encouraging relates to the raising of the exemption on the sales tax for the small items. To a lot of people this will not mean a great deal in terms of financial matters, but I can assure the minister it is much appreciated by the small businessman, the owner of the corner store.

Mr. Lawlor: I thought you were going to talk about solar energy.

Mr. Sterling: I am going to talk about that in a minute if you will just give me a chance.

That particular exemption is very important to the small corner store.

Mr. Lawlor: Are you talking about my Uncle Mac?

Mr. Sterling: Yes, I am talking about the member for Lakeshore’s uncle, from whom my son happens to purchase many items. His business has increased substantially since the drop of this particular tax.

In relation to the solar energy debate, I would like to draw to the minister’s attention other energy-saving devices that should probably also be looked at, in terms of giving some kind of tax incentive to the use of these particular devices. I point out in particular the use of heat pumps, which are becoming more and more in vogue as more are used in construction of new houses.

Mr. Laughren: Do you know anybody who has one in his house?

Mr. Sterling: I do happen to know of one person who installed one last year. I understand the savings in regard to energy at maximum efficiency are on a rate of three to one. Therefore, in trying to encourage people to conserve energy in these times, I think perhaps the ministry might look at heat pumps in future and encourage the use of such devices in homes for heating.

Mr. Eakins: Mr. Speaker, I think it is appropriate I should speak tonight on the retail sales tax, for it was the former member for Victoria-Haliburton some years ago who introduced the retail sales tax to Ontario.

Mr. Hall: It is up to you to take it off.

Mr. Wildman: Not from your side of the House.

Mr. Eakins: Someone said, “Not from this side of the House.” The distinguished former member started on this side of the House and I expect that in the same length of time I will be going across the floor to join the government when we move over there.

Mr. Warner: Dreamer.

Mr. Eakins: Our party will be moving over very shortly.

I want to address my remarks to the tourism industry, for I feel very disappointed it has not received the consideration it should. It has not had the priority or the profile the tourism industry deserves in this province. It disturbs me that this is the only province in Canada that gives such a low profile to the tourism industry. Members can check the various jurisdictions and I think they will find this is the only province in the whole of Canada in which tourism is a second cousin to some other ministry.

I want to mention just a few things that I think are very important. While we appreciate the concern for the hospitality industry shown by the removal of the accommodation tax, I think we should know far enough ahead for planning purposes just what this tax is going to be. We did not know until the budget came down that it is going to be extended for another two years; yet we have not taken into consideration what conventions mean to this province.

I think if the minister will consider talking to the people in this business he will find they have to plan many years ahead. Many of the large conventions that came to this province are booked several years in advance. In order for people in the convention bureau to be able to deal with this they must know well ahead what rates they can extend to the various conventions. This is a very big business indeed. I would suggest the minister give consideration to letting us know far enough in advance in order that we might have orderly planning.

I am rather concerned about the lack of consideration to the hospitality industry as regards the 10 per cent tax on meals. This is probably one of the few areas in which there is a 10 per cent tax. I feel it should be no higher than the tax on any other commodity. On a fur coat, for example, it is seven per cent, yet on a meal one must pay 10 per cent. If we are really going to take the tourism industry seriously, I think this 10 per cent tax should be reduced.

When I mentioned this to the Minister of Industry and Tourism (Mr. Grossman), he said, “Oh, that’s only nickels and dimes.” If that is so, then there should be no problem in reducing it to show that we in Ontario do consider our second largest industry is very important to us indeed. The hospitality industry employs directly and indirectly something like 400,000 people; and I believe it means to our economy about $5.8 billion. I would ask the minister to give serious consideration to the reduction of the tax to at least not more than seven per cent.

I notice that in the Treasurer’s press release he mentions furniture and furnishings purchased by the hospitality industry will be exempt from sales tax. In an article in the Financial Post some concern is expressed by the Commonwealth Holiday Inns: “The items look good at first glance, but once you dig in you find that many things are missing. For example, the exemption does not apply to mobile buffets in the kitchen, refrigerated displays, renovations or table linens, all of which are large purchases. Beds are exempt, as are desks, but not bedspreads. Chairs in a public room are exempt, but not chairs in a bedroom. Replacement of carpets is a big item. But these are not exempt, nor are wall furnishings, including pictures.”

They also go on to mention, “One long-term peeve in the industry is the escalating cost of beer, wine and liquor. Ontario restaurants, unlike their American counterparts, do not get volume discounts, and then tax is paid again by their customers.” So I feel, as some of the other honourable members have mentioned, that the assistance the minister has given with one hand has been taken away with the other.

With respect to the measures aimed at stimulating the hospitality industry in this year’s budget, I wonder if the minister has considered what the net effect will be of the $45 million budgeted for the tourist industry after the appropriate portions of the $100 million in tax increases in alcohol and gasoline fuel consumption have exerted their depressing effects on that industry. I wonder if the minister realizes that even if half of these tax increases were attributed to tourist consumption, they would completely wipe out the $45-million stimulus for that industry.

I feel, if we’re going to take this industry seriously, we should be giving it greater tax concessions and help. I want to draw to the House’s attention one of the very successful programs in British Columbia, whereby they have, through retail sales tax and other areas, supported the tourist industry by helping it to upgrade its facilities so that it can operate on a four-season basis. I think we can help increase our revenues in this province by assisting in this field.

We have not done that. Witness the help we have been able to give in the Ontario Home Renewal Program. This has been great for the home industry, but we have not come to grips with the particular area of which I speak in the tourist industry.

Hon. Mr. Maeck: We didn’t use the retail sales tax.

Mr. Eakins: Mr. Speaker, these are just a few of the concerns I have. The one concern is with keeping our rates competitive with our neighbour, the United States. In the past year we have played on the fact that we’ve got to keep down our minimum wage in order to make our rates competitive. I feel we cannot do this any longer. We cannot use the minimum wage as a whipping boy to offset the cost of increased liquor prices and other charges that will affect this industry.

Mr. M. Davidson: Mr. Speaker, I didn’t really intend to speak on this bill until I heard the member for Oriole --

Hon. Mr. Maeck: You might as well. Everybody else did.

Mr. M. Davidson: Thank you, also -- until I heard the member for Oriole stand up and try to berate my colleague, the member for Hamilton Mountain. Of course, the member for Oriole was wrong, as usual. He was trying to imply that we on this side, in the New Democratic Party, somehow or other were in opposition to the fact that the government was exempting tax on hotel/motel accommodation. Let me assure you, Mr. Chairman, and the minister, that that is not, in fact, the case.

It’s unfortunate that the member for Oriole chose to make his little statement and then turn tail and run, knowing full well he would be challenged on that statement. I’m quite sure he was aware, when he said that, that we in this party, and the Liberal Party also, support that part of this bill. We support it because we recognize and realize that the tourist industry in this province is falling far behind those of the surrounding provinces and the states below us.

We have to do something to recoup the loss we’ve suffered over the last number of years. But, again we get into a situation where this government has forgotten to look at the overall implications of what in fact this bill does. We get into the area of taxing, at a rate of seven per cent, telecommunication services, which includes cable television.

Let me assure the minister and you, Mr. Speaker, that having spent a good 10½ or 11 years of my life “on the road” -- as it is known -- living in hotels and motels, my experience tells me that any increase that goes into cable television in a hotel or a motel will in turn go to the person who rents the accommodation.

The minister may very well say the increase is only 46 cents to 50 cents per month per unit. But I am prepared to stand here and I am willing to bet that that tax will increase room rates in Ontario by at least $1 per night. With one hand the minister extends exemptions to the tourist industry and with the other hand he puts them in a position where they have to increase their normal room rate in order to pay for the costs of cable television.

[9:15]

The minister shakes his head “no.” I’m telling him my experience.

Hon. Mr. Maeck: You don’t own a motel. You were just a tenant. How do you know?

Mr. M. Davidson: I have friends who own hotels and motels because I lived with them, as I said, for 10 1/2 years. I know what they told me.

Hon. Mr. Maeck: You know why they raised the rates, eh? They explained that to you. Don’t give me that stuff.

Mr. M. Davidson: The minister should just watch what happens. I’m willing to bet him right now they will increase it $1 per day.

Hon. Mr. Maeck: Who will ever prove it? It’s 27 cents a month in hotels.

Mr. M. Davidson: I also want to suggest when that happens and his eyes are suddenly opened to the fact that he had better be ready to assume the responsibility for that because it is he who is, in fact, implementing this tax on cable television.

Hon. Mr. Maeck: I will gladly. We always do.

Mr. M. Davidson: In addition to that, as the member for Hamilton Mountain pointed out during his speech, he is taking away in two areas the opportunity for the lower-class earner in Ontario to get any form of entertainment at a rate he or she can afford. He is imposing a 10 per cent tax on any fee that goes over $3.51 for entertainment purposes in this province.

Hon. Mr. Walker: A penny and a half a day.

Mr. M. Davidson: I have yet, in the later days, to see any theatre that does not charge an adult over $3.50 to get in. At the same time, these very people who can’t afford to go out to the fancy shows that maybe we can get out to see, and who have a cable television set hoping they can get some form of entertainment for their family --

Mr. Bradley: Zapped again.

Mr. M. Davidson: -- are, in fact, going to have a seven per cent tax imposed upon them.

Mr. Bradley: The member for Oriole is now back.

Mr. M. Davidson: The member for Oriole should be back. As usual, as I said earlier, and I’ll say it in his presence, he was wrong in the majority of things he said earlier.

As the member for Hamilton Mountain pointed out, there were certain things in this bill which we could support.

Mr. Mackenzie: A tax on the member’s speech. He should put a tax on his words; so much a word on the member for Oriole’s speeches.

Mr. M. Davidson: I don’t know anyone who would want to buy them.

Now the member for Oriole is here I can say the member for Hamilton Mountain pointed out, under the explanatory note (c), that we in the New Democratic Party support the seven per cent exemption on hotel and motel accommodation for the tourist industry. I repeat that, Mr. Speaker, just so the member for Oriole is very clear on where we stand and does not go out espousing his phoney theory with regard to the position taken by this party.

Mr. Roy: It sure is phoney, I’ll tell you that.

Mr. M. Davidson: Under note (d), Mr. Speaker, we talked about and I agree with, as I’m sure our party does, a rebate of up to $700 for the purchase of parts and materials incorporated into solar heating systems in residential premises. I agree with that wholeheartedly. Knowing the cost of implementing the solar system into a residential premise I simply say that perhaps that should have been raised to $1,000 to make it something worthwhile to encourage people to go to that form of heating in Ontario in order that we can get away from the exorbitant costs of running Ontario Hydro as in today’s situation.

When the member for Brant-Oxford-Norfolk was speaking, I jokingly made an aside to him that the exemption on candies, confections and soft drinks up to the amount now exempt was, in fact, rotting my children’s teeth. I made that as an aside and he made some kind of a comment about this being a permissive kind of a party.

We’re no more permissive than anyone else with our children. I’m quite certain that if you have children, you know full well you can’t sit on top of their heads all day long. When they are out on the street along with the rest of the kids in the neighbourhood, if they want to go and buy a candy bar and eat it, you are not there to give them guidance and direction as to what they are to do.

More than that, the kind of exemption the minister makes here does not benefit too many people in this province. Far better, if we are going to exempt any kind of tax, that we exempt it on winter clothing for people who live in the areas where it is necessary to wear heavy-duty clothing, or on winter clothing for adults who work outside. Those kinds of exemptions make sense and are far more productive to our society than exempting candy and confectionery, particularly from a government which does not even believe in the implementation of denticare, never mind discussing it or talking about it in its budget.

Hon. Mr. Walker: What does the member have against kids?

Mr. M. Davidson: I have nothing against kids. I have six of my own. They are all well-oriented, and I don’t have to sit on them as perhaps the people over there do.

Interjection.

Mr. Acting Speaker: If the member for Cornwall wishes to interject, will he please return to his own seat?

Mr. M. Davidson: The bill talks about making certain exemptions dealing with textile and clothing. I welcome those, because I come out of the textile industry.

Hon. Mr. Walker: Six kids?

Mr. M. Davidson: Yes, I have six kids. Some of them are almost as old as the minister; at least in mind.

I welcome those exemptions, because I come out of the textile industry and I know the necessity and the need for the textile industry in this province to get some form of tax break. I can only suggest to the minister that his exemptions do not go far enough. Perhaps he should take another look at that in areas such as my good friend from Victoria-Haliburton has pointed out, that while exemptions are given in the tourist industry and the restaurant industry in terms of purchasing equipment, if there are certain things that apply, like if you nail it to a floor, tack it to a wall, or screw it to a wall, or screw it to a ceiling, these are somehow or other taxable items. I would like the minister to take a look at that and review some of that, because I am sure he could find a few more exemptions in there which would not become taxable.

Lastly, I speak to what the member for Hamilton Mountain has suggested, the exemptions that are given to certain furnishings and food preparation equipment in restaurants and hotels. During the course of his speech he mentioned that the provision about those being manufactured in Canada is not prevalent in the bill.

In my riding and in the surrounding ridings -- and I am sure the members from the Kitchener area will be well aware of this -- we have wholly owned Canadian companies which manufacture the very needs that the minister is referring to in this bill. It would be very nice if somewhere in this bill he could include a provision that these exemptions apply to the purchases of goods manufactured by Canadians in Canada -- preferably in Ontario, but not necessarily. Then the minister would have something worth talking about; then that section of the bill would make sense. Right now it means nothing at all, because all we are going to do -- I can see it now -- is provide jobs for those in the United States and exempt the purchaser up here for purchasing them.

Mr. Roy: Mr. Speaker, I was quite prepared to yield the floor to the Minister of Correctional Services if he wanted to give us his comments on this tax, but apparently he does not wish to do so. I was wondering whether we would hear from this minister, whose leanings we know and about which we will not comment, what he feels about the exemptions, the taxation on cable television and so on.

Since my early days in this place, I have always found it somewhat ironic that the Treasurer comes in with the budget and imposes new taxation, but he is never around to defend the tax changes We’ve seen the repetition through a variety of ministers but I think our anger or frustration will be somewhat controlled because it is unfair to take it out on the Minister of Revenue who, of course, was not the initiator, the one who originated the tax, but is only here to defend it.

From your lengthy experience in this House, Mr. Speaker, you will understand that sometimes we’ve reached situations that were clearly impossible. The minister will recall one of his former colleagues, Arthur Meen, when he was Minister of Revenue, defending the Land Speculation Tax Act. We kept saying to him at that time, “Before you proceed with this tax are you sure that you have approval of the federal authorities so that there will be no double taxation; are you sure that the speculation tax is an exemption on the federal tax, because we would possibly end up with 110 per cent taxation on any speculative profit?”

Hon. Mr. Maeck: What does this have to do with the retail sales tax?

Mr. Roy: I’m just trying to give the minister a bit of history, a bit of perspective. He’ll need a bit of perspective in that job. I say to the minister, Mr. Speaker, Arthur Meen took the abuse, he took the blows and, as it turned out, they had not obtained federal government approval. They rammed the tax through the House with the majority they had at that time and then had to come back with amendments when it proved to be a ridiculous tax and they had not obtained approval for the exemption from the federal authorities.

The minister is sitting there listening to the comments of various members as to what they feel about this sort of -- I really don’t know what to call it -- sort of chintzy, taxation here, taxation there. It seems to be the type of budget where the government said, “We’d better not go too hard in any one place but we’ll try to get all the corners, cut the corners here. We’re going to try to get everything that is not taxed now.” I’m surprised that the government hasn’t thought to tax some of the wilder schemes going on in the province. Possibly they were thought of but it didn’t have the guts to go ahead.

I want to raise something: when the government is looking at areas of taxation, why doesn’t it look at the overall setup in this province? The merchants in the Ottawa area were very disappointed by this budget and by this tax in particular. As you know, on the other side of the Ottawa River in Hull, Quebec, there is an exemption on the sales tax for furniture, for clothing. So the merchants on the Hull side of the river have an unfair advantage over the merchants on the Ottawa side of the river. I would have thought that the government would have looked at that situation to try to balance it out. But of course, this government being the party it is forgets about the Ottawa-Carleton area, it forgets about the people there, it forgets about the merchants in that area.

It is not something new, it’s something that Parizeau, from the Parti Quebecois government, brought in over a year ago. I would have thought that when the government was nickel and diming everybody it wouldn’t have been too difficult to allow an exemption on some of these items.

For instance, the exemption on furnishing. Why was it limited to hotels, motels, resorts, cottages, cabins and places of that nature? Why wasn’t the tax eliminated for the ordinary purchaser? Or at least eliminated for a particular area of the province. If the government is going to be nickel and diming anyway and passing a bill which is as complicated and as illogical as this one, it would have been just as logical to have some method in its madness and give the merchants of Ottawa a break or a fair advantage in competition with the merchants on the other side of the river.

I was just reading the other day in the last quarterly report from the merchants in the Ottawa area that apparently their business has gone down about 10 per cent from last year, whereas on the Hull side their business is up 30 and 40 per cent.

Hon. Miss Stephenson: Sure, the feds moved all the offices across the hall.

Mr. Roy: It’s not the feds. The minister is starting to sound like Jean Pigott. Her perspective of the country is based on a sewer pipe. She knows that’s what she was talking about, moving it back on this side.

Mr. Conway: Claude Bennett would applaud it.

Mr. Roy: When the minister formulated this budget, was there no input from our ministers from the Ottawa area? I ask the member for Carleton-Grenville, did he not have any input on this budget to bring forth the case of the Ottawa merchants about the unfair business situation they are in?

[9:30]

Mr. Bradley: They didn’t even consult him.

Mr. Roy: If he did have some input, obviously he didn’t have any weight. He couldn’t convince his colleagues. What’s wrong with him there?

Mr. Sterling: I am a lightweight. That’s my problem.

Mr. Roy: I say to my colleague from Ottawa South (Mr. Bennett), where was he when the minister was putting forth this legislation? Where was the member for Ottawa West (Mr. Baetz)? He bragged around Ottawa that he has a lot of weight in the cabinet. What happened there? There was no input.

Mr. Speaker, I think you will agree with me that it’s unfair that the merchants on one side of the river should have a tax exemption on items such as clothing, shoes and furniture when the merchants of Ottawa or Ottawa-Carleton don’t have the same exemption. I think it’s very unfair and I want to say to the minister that even his friends in the chamber of commerce are mad at him out there. I hope the same attitude prevails for a while because those people opposite certainly deserve it.

Mr. Conway: Poor Claude has no more influence.

Mr. Roy: No.

Mr. Makarchuk: The guys in the liquor stores feel the same way about him too.

Mr. Roy: Now, Mr. Speaker, in looking at the information bulletin as well, I really wonder if the minister expects ordinary merchants, ordinary people, in the course of their business to be able to distinguish what is taxable and what is not taxable with this new legislation. For instance, Mr. Speaker, if you buy beds including frames, headboards, springs and mattresses, you don’t pay a tax. But if you buy parts for repair and maintenance of these furnishings, you pay a tax. Now what’s the logic there? Does the minister want them to buy new products only?

For instance, food choppers are exempt, but food wrapping equipment is not. Why don’t we try to have some logic in the process? Why would blenders be exempt, Mr. Speaker, and not exhaust canopies? I ask you, what’s the logic there? Why would dishwashers be exempt, I ask the Minister of Education, and not mobile buffets, wagons and cooking units? I ask you, what’s the possible logic of something like that, Mr. Speaker?

Hon. Miss Stephenson: What’s illogical about it?

Mr. Roy: Why would grills and grinders be exempt from the tax and not table linen? I ask you, Mr. Speaker. Why would that be? I ask the minister, doesn’t he expect our tourist guests to have table linen?

Hon. Mr. Maeck: Do you call table linen part of cooking equipment?

Mr. Roy: The government has the slogan, “We treat you royally,” and it is taxing table linen.

An hon. member: How stupid can you get, Albert?

Mr. Roy: Now, Mr. Speaker, I ask you, can you tell me the logic of something like that? You know, I could go on; I could go on.

Hon. Miss Stephenson: You do. You do.

Hon. Mr. Maeck: I wouldn’t if I were you, Albert, you are making a fool of yourself.

Mr. Roy: I can’t, for the life of me, Mr. Speaker, understand such things as why slicers, stoves and toasters would be exempt from taxation and not refrigerated displays, storage equipment and waste disposal equipment? That should be exempt -- waste disposal equipment.

Hon. Mr. Maeck: Does that help you cook? We are talking about cooking equipment.

Mr. Roy: Now I know the government’s environmental policy. It is not prepared to make waste disposal equipment tax free, eh? It is going to dump it out there on the street, sure. The minister read the article in the Globe and Mail about the waste.

An hon. member: You haven’t got a clue. You are making a fool of yourself. Why don’t you sit down?

Mr. Roy: We have more waste here in Ontario than any other province in Canada.

Mr. Breithaupt: And we are looking at it too.

Mr. Roy: What I am trying to point out, Mr. Speaker, is basically this: as my colleague from Brant said some time ago, there’s no logic, rhyme or reason in the process. Where is the government’s principle? Doesn’t it have something --

Hon. Mr. Maeck: Why don’t you read the act?

Mr. Roy: I am reading the minister’s circular. What else does he want me to read? I am reading the information bulletin. It even has the minister’s name on it. “Lorne Maeck.” My God.

Mr. Nixon: Is it bilingual?

Mr. Roy: “Is it bilingual?” my friend asks. It is going to be just as confusing in French as in English, I am sure. Now, Mr. Speaker --

Mr. Breithaupt: And that’s saying something.

Mr. Roy: Some of my colleagues have mentioned the taxes on cable TV and I too think that is a bit much. The government is really going after the citizen at the bottom end of the scale. It figures it wants to nail him some more, the senior citizen whose only enjoyment is his cable television. In Ottawa- Hull, the only way to get TVOntario and the French language channels is to have cable.

Mr. Nixon: ETV costs us $20 million this year.

Mr. Warner: You’re scraping the bottom of the barrel.

Mr. Breithaupt: It’s the only thing available.

Hon. Mr. Maeck: It’s only 46 cents a month. Are you suggesting that is going to break their back?

Mr. Roy: My God, what is wrong with the government? We are capitalists on this side here, but we have some conscience.

Mr. Warner: Don’t be proud of that. You should be ashamed of it.

Mr. Roy: Yes. When the government is prepared to tax senior citizens and then raise the taxes on banks by one fifth of one per cent after their profits, that is a bit much. The government is prepared to slap a tax on people whose only enjoyment is watching their television sets. But the banks are making all these profits and the government is going to get only $5 million out of the banks this year.

Interjections.

Mr. Roy: There is no heart, no conscience, no rhyme or no logic in the process.

Mr. Conway: The minister has come a long way from Parry Sound.

Mr. Roy: The Treasurer should be here to try to give us the logic of his approach. My God, the government has no conscience at all. I checked into the hotel room the other night and I came to watch my favourite movie by paying a bit of money. Even pay television is taxed now. It is awful.

Mr. Nixon: He watches some pretty fancy movies.

Mr. Roy: That’s right. I have got to pay a tax now. Is that fair?

Mr. Sterling: We should double the tax on those ones.

Mr. Makarchuk: Where is he staying?

Mr. Roy: If it was their intention to curb the sinful activities of these movies, why don’t they go all the way? I am surprised that they didn’t impose a tax on some of the more natural and human activities. Are they going to start checking on that?

Hon. Mr. Maeck: Then you’d be really worried.

Mr. Roy: When I look at the process and at the logic of this bill, I say it is illogical and it is idiotic. It doesn’t approach solving some of the problems, such as those in the Ottawa-Carleton area. It is prepared to give the banks a break and yet hit the senior citizens or the people at the bottom end of the scale. It is unfair, but the government will get away with it because it is going to do it on a nickel-and-dime basis.

Hon. Mr. Maeck: Now you are going to tell me that you are going to support it.

Mr. Roy: The minister is asking me what I am going to do and what we would do. Our taxes on the bank profits would be more than an additional one fifth of one per cent, my friend. They would bring in more than $5 million, I don’t think the banks with a 30 to 40 per cent increase in profits this year would have minded at all.

The government is gutless. It is prepared to take on the small people who are defenceless, but it is not prepared to accept its responsibility.

Hon. Mr. Maeck: We are prepared to take responsibility.

Mr. Ashe: What a lot of baloney!

Mr. Roy: It is typical of the government, as we have seen, as my colleague from Brant-Oxford-Norfolk said, when it first brought in the sales tax.

Mr. Ruston: The party of the privileged.

Mr. Roy: The government is running out of principle, and it won’t be long before we will run it out of office.

Hon. Mr. Maeck: And you are running out of common sense.

Mr. Laughren: Mr. Speaker, I was really pleased to hear the member for Ottawa East take the position he did because we are going to give him an opportunity to join with us in amending this act to exclude cable television. That is what we are going to do. We think that is an obligation on our part. I am sure the Liberal caucus will support us in this move, given the remarks we have just heard from the member for Ottawa East.

Mr. Roy: I give you my word.

Mr. Laughren: It is not often I agree with what the member for Ottawa East says and I don’t think that it should be interpreted as any kind of trend.

Mr. Roy: I will tell you what. If you can go on an election on this I am with you all the way.

Mr. Sterling: Now the member for Ottawa East has done it.

Mr. Laughren: I did want to let the Liberal caucus know so they could meet either late tonight or before this bill actually goes into committee, because we do have an amendment prepared which will remove cable television from this act. We will see whether or not the Liberals are just talking or whether they are going to put their money where their mouth is.

There are some parts of this bill, as my colleague the member for Hamilton Mountain said, which we can support.

An hon. member: It must be wrong if you support it.

Mr. Laughren: It is a difficult bill on which to take a firm position in total. That is why we are going to support the bill on second reading but propose a specific amendment or so on it.

There were items on which exemptions could have been made. For example, larger children’s clothing should have been exempted. There are many, many families whose children take the larger-sized clothing and it should be exempted. There would also be other people who would benefit. I realize I would not benefit because I buy all my clothes at George Richards, but I do know of people who would benefit from this.

That is one area. Another area where items could have been exempted is in everything to do with physical fitness; all physical fitness equipment and clothing could very well be exempted. It is a very sensible suggestion that perhaps the minister will think about and could even entertain as a minister’s amendment when we get to the committee stage. It would have nothing to do with altering the principle of the bill and it would be a very positive move on the part of the minister.

Another area he might think about is the whole area of equipment for making one’s feet straight -- what is it called?

Mr. Deputy Speaker: Would the honourable member return to the items in the bill?

Mr. Laughren: Yes, Mr. Speaker.

What is bothering us about the bill itself, which is what we are here to debate, is that it is like so many of the other tax measures that flow from the budget: it really does not have any kind of direction or focus. Whether it is regional development -- there is nothing on that in the budget; whether it is a tax policy -- there seems to be no rhyme or reason to it, as my colleagues have said.

I have nothing further to say because of the constructive, inspirational and penetrating comments that have already been made by my colleagues.

Mr. Makarchuk: If you raised the price of gas you would not be able to get to Parry Sound, Lorne.

Mr. Bradley: Very briefly, Mr. Speaker, I would like to express a couple of concerns about tax measures, not necessarily in those cases when the ministry takes the action itself, but the reaction of those who are benefiting from the decreases or the exemptions.

I do not think I can emphasize too strongly the disappointment those of us in opposition and I am sure many in government feel when the government extends and this Legislature approves certain tax exemptions, and then the industry or business benefiting from those tax exemptions does not play ball with the Ministry of Revenue or with the provincial Treasurer. Instead it goes about increasing particular rates or particular prices.

I think this evening we have had expressed the sympathy and the agreement of members of both opposition parties with the continued exemption from sales tax for hotel and motel rooms. When we express disappointment we express it because the industry at the same time has decided to increase prices. I can recall at least one hotel which on two occasions, if my memory is correct, has raised its prices since this exemption was allowed.

I do not know exactly how one can communicate one’s disappointment about this; perhaps through the Minister of Industry and Tourism and through the Minister of Revenue. I’m referring to the disappointment the government and members of this Legislature have when we see hotels and motels proceeding with significant increases in their rates after they have been given a tax break by the government. It leads one to believe they are taking advantage of this; in effect the increase is proceeded with because the government has decided to cut back its share of the take in the form of the sales tax. We are concerned when that does happen, although we do support that particular exemption.

[9:45]

The other portion of this that we express concern over, and I join other members in this, is the cable TV tax, probably because television for those in the lower middle income and lower income brackets is the primary form of entertainment

It used to be said with a good deal of derision and criticism that when one drove through the Appalachians and other depressed areas south of the border and saw shacks, the homes of those on government assistance perhaps, or of those with low-income jobs, the homes would be ramshackle, the yard would be littered with broken-up cars, but there would be a television aerial sticking out of the roof. Somehow people would be critical of this: here they are with a broken-down home, with very little else, but they have a television set.

Of course the argument counter to that, and which one should be able to perceive, is this is essentially the only form of entertainment these people have.

We have now evolved to a situation, particularly for those in northern Ontario or other areas that do not have direct access to a large number of television stations, or indeed, even in southern Ontario, where those people are now involved with cable television services. Let me give you another example of that, Mr. Speaker. I think senior citizens particularly, but others within Ontario Housing Corporation complexes, have enjoyed a pretty favourable rate for cable television because Ontario Housing Corporation, through the Ministry of Housing, negotiated some time ago a bulk contract which provided cable service at a substantially lower rate than would be available to the average consumer.

These bulk agreements have evaporated, or lapsed at the very least. We now find these people, who are in the lower income brackets, captives of cable television because in these buildings they are not allowed to erect large towers or individual aerials. They either have the choice of rabbit ears, which aren’t very useful, or cable television. We find these people now compelled to pay rates of $6.50 or more a month.

What we are doing now by instituting a cable television tax is putting an additional burden on those who are not always able to pay it. I think I would be fair to concede there are people who have cable television who can afford this tax. It does not take into account, as is the case with some regressive taxes, the individual’s ability to pay.

This is the objection and concern we in opposition express to the taxation of this particular service, which we consider to be an essential core service for those who are unable to afford some of the other forms of entertainment which are much more costly and which involve travelling some distance in the community to theatres and other entertainment centres.

In praising the minister for continuing the hotel tax exemption, I also express concern about the industry not translating that into an advantage but rather looking upon it as a way to recoup what they feel should be some excess revenues; and I’ve concern about the cable TV tax. I hope the minister will certainly re-evaluate the second and communicate our message to the first group.

Mr. Peterson: Mr. Speaker, I rise to speak on this bill. I am disappointed only about the attendance in the House tonight.

Mr. Nixon: This is good attendance.

Mr. Ashe: You just came in 10 minutes ago.

Hon. Mr. Maeck: You just got in here.

Mr. Peterson: It is interesting to note -- I know that Hansard will note the Liberal Party has the greatest number of members present. It is obvious how much the NDP care about it, having four of their weaker members sitting here in the House, and not one front row member.

An hon. member: Where were you until five minutes ago?

Mr. Warner: We had five speakers on this before you even arrived.

Mr. Peterson: I almost wish I had never said that because the member for Scarborough-Ellesmere will be barking at me like a cocker spaniel for the duration of my very few remarks.

Interjections.

Mr. Deputy Speaker: The honourable member will direct his remarks to the chair.

Mr. Peterson: I am talking on these very important budget bills. Would the Speaker call for order?

Mr. Deputy Speaker: I would appreciate it if the honourable member would direct his remarks to the chair.

Mr. Peterson: I’m trying to do that, Mr. Speaker. If you would be so kind as to throw a bone to the member for Scarborough-Ellesmere, perhaps that would occupy his attention for 10 minutes while we discuss the substance of this particular bill.

Mr. Makarchuk: How can you discuss it, if you haven’t been here all night?

Mr. Peterson: In response to the member for Brantford, Mr. Speaker, I’ve been listening to this debate very carefully on the squawk-box in my office.

Mr. Makarchuk: Yeah, I’ll bet.

Mr. Warner: I’ll bet.

Mr. Peterson: I happen to have a far greater understanding of this particular issue than he has.

It’s interesting that the Minister of Industry and Tourism comes here tonight to do his correspondence. One would think the minister would have more important things to do than to come here and waste everybody’s time by screaming and yelling.

I just want to welcome him back. We’ve read his speeches with great interest and I must say, had I been an investor in England, there’s no way either he or the Treasurer could have prompted me to bring money to this province. There are certainly far more attractive ambassadors --

Interjections.

Mr. Deputy Speaker: Order.

Mr. Peterson: -- we could have sent on our behalf.

Mr. Deputy Speaker: Bill 58 is now before the House.

Mr. Peterson: We could have volunteered perhaps to assist the minister, under the circumstances.

Let me speak briefly on the subject. I’m somewhat frustrated, as I said --

Hon. Mr. Grossman: We know; we know.

Mr. Peterson: -- sitting here, debating, in some respects, fairly important measures of public policy, as we always do in taxation matters.

It’s an interesting point of view that in this Legislature, taxing matters are always considered matters of confidence, but frequently other bills of equally grievous import are not considered matters of confidence, yet we have such a dismal attendance here in the House tonight.

I point out only that if the government took this matter seriously they certainly would not have sent the ministers who are here in the House tonight, because they are the least significant members of the cabinet.

Hon. Mr. Grossman: Obviously, on your side, too.

Mr. Peterson: I say, in all humility, we do have the most significant members of our caucus here tonight. The member for Erie (Mr. Haggerty) would agree with me, and all my other friends.

Hon. Mr. Grossman: And your leader’s absent. We understand what you mean.

Mr. Peterson: I want to make a couple of remarks. There are several things that have been pointed out by members of my caucus. I thought the member for St. Catharines (Mr. Bradley) spoke very eloquently on the matter of cable television.

What the minister is doing -- whether he knows it or not -- is introducing a regressive, punitive system to people who, in our judgement, are least able to afford it. It doesn’t mean anything to the Treasurer, when he is sitting down with his dartboard, looking at new ways to raise taxation revenues -- and I want to point out to the Minister of Revenue that he is increasing taxation revenues in this province this year by 14.4 per cent when our expected real growth is 10.9 per cent. What he is committing us to irrevocably is an increased measure of extraction out of the public hide to pay for his excesses of the past.

It is our view that it has been a random, willy-nilly system, saying, “How can we extract the most amount of money with the least amount of pain?” Or, at least, “How can we slide by in these particular circumstances?” There has been no account of progressiveness; there has been no account of who’s most able to afford it. It’s just been a case of “How can we avoid the greatest amount of political flak?”

You get a little bit of flak here and a little bit of flak there and, unfortunately -- or fortunately for the government, unfortunately for us -- it doesn’t add up to a no-confidence vote or defeat on the budget bill at this time. But I think the minister has taken a chicken-hearted, weaselly way of extracting this money from the public hide; with no sense of commitment, with no sense of purpose, with no sense of dedication.

I think, ultimately, it’s going to cause the government ruin. Not now. I can tell the minister this. If there were not a federal election on right now, we would be sorely prompted --

Hon. Mr. Grossman: In the next 36 years, do you think?

Mr. Peterson: -- to vote him down. And I say that very seriously. I’ll tell the minister this. A year from now he’ll have to be a lot more careful than he is today and a lot more intelligent and a lot more creative --

Hon. Mr. Maeck: It’s not us that have to be afraid a year from now, it’s you.

Mr. Peterson: -- because let him just watch a year from now, and in spite of his $10 licence plates --

Hon. Mr. Grossman: He says that like he’s whistling by the graveyard.

Mr. Peterson: -- the most flagrant abuse of the patronage system I’ve ever seen that he’s a party to --

Hon. Mr. Maeck: What’s that got to do with this tax?

Mr. Peterson: -- he is going to be gone a year from now.

The Minister of Revenue; the tax collector. In most cases they have a tax collector that can count at least and here we have the minister --

Hon. Mr. Maeck: Where have you been all evening, down at the bar?

Hon. Miss Stephenson: Don’t talk about patronage. No Liberal anywhere should ever talk about patronage. You are the world’s worst exponents of patronage. Don’t talk to us.

Mr. Peterson: Mr. Speaker, obviously I’ve been somewhat successful in that I have --

Mr. Nixon: Certainly turned them on.

Mr. Peterson: -- excited the minister.

Mr. Nixon: Even the iron maiden.

Hon. Mr. Maeck: To think he’d run for the leadership.

Hon. Miss Stephenson: That’s the most ridiculous thing I’ve ever heard in my life.

Hon. Mr. Maeck: Stuart Smith beat you. You haven’t a clue.

Mr. Peterson: Mr. Speaker, I’m not here to talk about $10 licence plates tonight. I’m not down here to talk about the fact that the Minister of Revenue has a $10 licence plate.

Hon. Mr. Maeck: Actually that’s not in the bill.

Mr. Peterson: I’m here to talk about the substance of this bill and, unfortunately, have been provoked by some of the members of the opposition.

Hon. Mr. Grossman: They’re very concerned .

Mr. Warner: Why don’t you talk about something you know, otherwise keep quiet?

Hon. Mr. Maeck: People who live in glass houses shouldn’t throw stones, you know.

Mr. Peterson: Please let me just address my mind to this issue. I share the views that were so eloquently expressed by my colleague from St. Catharines with respect to cable television. It does not sound like a great deal, and I understand that and frankly it isn’t going to bother the member for Parry Sound who has found a new affluence in his job as a member of the cabinet -- something no one expected, least of all him, but he is there now and he is going to have no trouble paying his extra 50 cents a month. But there are a lot of people who are going to have a great deal of trouble paying that extra money every month. And we have to measure things by --

Hon. Mr. Maeck: I don’t have to have cable.

Mr. Peterson: -- a far different yardstick than the minister has so addressed his mind to. I don’t expect his response to carry any weight at all. It’s the Treasurer who I hold responsible.

Hon. Mr. Maeck: I’m not going to respond to you at all. You haven’t said anything yet.

Mr. Peterson: It is not the Minister of Revenue; he’s a little exercised at the moment.

Hon. Mr. Maeck: When you say something intelligent I’ll respond to it.

Mr. Peterson: And he’s a decent sort of chap for a guy with a $10 licence plate, but he’s a little exercised at the moment, and I would like to address these remarks --

Hon. Mr. Maeck: Jealousy will get you nowhere.

Mr. Peterson: -- principally to the Treasurer. But it is our view, and we expressed it at the time, and we will continue to express it, that he has shown no particular sense of the future, no particular sense of the present when he went about to extract this higher degree of increase in revenue -- i.e., 14.4 per cent -- out of the public hide on a regressive basis, than he did in terms that are registered in real growth in the gross national product. I think it’s fundamentally unfair to extract it out of the cable-viewers’ hides. Let me remind you, Mr. Minister, that the people to whom that means the most are frequently old people --

Hon. Mr. Maeck: Speak to the Speaker.

Mr. Peterson: -- people on fixed incomes, people who don’t have the income to get out to go to movies or go to the kind of places you go. They generally are not members of the Albany Club. Those are the kinds of people that are being punished by this kind of tax.

I regret in many ways that this isn’t an election issue, but it is, clearly, and we’re not going to cause an election on this. But let me say this very succinctly and very clearly to you, Mr. Speaker: had we been the government we would not have introduced this kind of regressive tax. We’re looking for $5 million here, $10 million there and $20 million there on the premise that it all adds up eventually in giving us the extra $181 million we have to generate in order to pay off the sins of the past and pay for the increasing debt load we’ve incurred in this province. But it’s so unfair. It’s unequitable and it really isn’t very creative. I deplore the minister for it more than anything.

I remember a phrase used by the former leader of the third party, a man for whom I say I have a great deal of respect, that the minister suffers from a terminal scrawniness of the imagination. It was so true then and it is so true today.

I have just a view or two to express on the tourism aspects of this, Mr. Speaker. It completely befuddles me. I’m glad to have the Minister of Industry and Tourism here today. The government works from both ways on this particular issue. They’ve lowered a tax and, on the other hand, they’ve increased the gasoline tax.

It’s a generally recognized fact that 80 to 90 per cent of the tourists who come into this province come by road access with the United States. We have an extraordinarily high gas tax in this province, now increased by 10 per cent or so. We have probably the most abysmal system of facilities on public highways through the service centres along highway 401, the Queen Elizabeth Way and various other highways. So, on the one hand we are trying to attract them by dropping our taxes; on the other hand we are driving them away by increasing taxes and by various other forms of insensitivity or lack of service to the people who should or would come here in the circumstances.

[10:00]

My colleagues and I are constantly exposed to this lack of comprehensive planning. Perhaps it is a function of the bureaucracies or the ministries that have been created on that side. Perhaps we are seeing all the ministers vie for attention or vie for favour in the Premier’s eye. I am not sure what goes on in that cabinet room, and I am sure if I did I would despair for it.

Mr. Lawlor: Yes, it is those fellows behind the throne; they are the ones who are responsible.

Ms. Peterson: The member for Lakeshore agrees with me. He is an erudite fellow -- as a politician. As a poet, he is just fair.

I see the lack of consistency. I see this lack of a point of view. I see this lack of provincial priorities and I say to you very sincerely, Mr. Speaker, had the Liberals been elected, or if they are elected in the future, you are going to see concerted action. You are going to see a caucus that sees things in concert; that brings a concerted point of view to bear on some of these public issues and we are going to see a strategy directed towards the goals as we see them, prioritized as we see them.

I say with great respect, my colleague from Victoria-Haliburton (Mr. Eakins), who has had a considerable amount to say and who is probably, in my judgement, the leading light in this Legislature on matters of tourism, would have a great deal more clout with the Liberal Party had they formed a government, than the Minister of Industry and Tourism, and would bring to bear a concerted, organized theory of tourism, and how we decrease that massive tourism deficit we face in this province.

On the one hand we are trying to extract a little more revenue and on the other hand we are trying to tax them a little more to scrounge a little more revenue out of them so that we can proceed towards lesser deficits in the future -- again, an unorganized and disjointed philosophy of either budgetary control or attitude towards the whole tourism industry.

I guess I have been repetitive, because I have spoken on several of these revenue bills, but it has to be said and probably one of the problems with the government is it has to be said more than once, I guess. We are seeing a lack of priorities and a lack of concerted action by this government that is to those of us in opposition, believe me, most frustrating.

All I can do, Mr. Speaker, is leave you with my frustrations and say had we had the opportunity to govern, if we have in the future, we will have a decidedly different set of priorities. We will focus the might, the authority and the responsibility of government on the solving of some of the specific problems that we face and we see some of these problems.

Hon. Mr. Maeck: Just like the feds do, eh? Just like the Liberals in the federal government. Tell us about it.

Mr. Peterson: Now we are seeing the Minister of Revenue raising his ugly head and making a funny noise and trying to blame the federal government for his responsibility. I don’t expect him to respond. He is a eunuch; he is a political eunuch, because his task is to sit there and collect these kinds of taxes the Treasurer has designed for him. He is an administrator and one you, Mr. Speaker, are as entitled to judge as I on his administrative capabilities. It is unfortunate for this province that we don’t have a Minister of Revenue who makes more physical input to the collection procedure in this province, who has more influence over, say, where we are going to raise money and where we are not.

I leave you, Mr. Speaker, with a few of those dismal thoughts and say that I am despondent, my colleagues are despondent. Unfortunately there is not enough at this point to bring down the government and to some extent, I regret that.

Mr. Ziemba: Looking forward to the amendment that we intend to place to remove the tax on cable TV, it seems to me that is one of the few enjoyments senior citizens and shut-ins have and it would be really wrong, as members have stated, to tax these people who are not in a position to pay.

In addition to that, cable television provides much by way of community communications. Many volunteer groups get together and put on programs that are of interest to seniors and others. The cable television outfit in my riding, Graham Cable TV, is especially outstanding in this regard, and I think this is as good a time as any to put in a plug for them. I’m of the opinion that the taxes we have forfeited by cancelling succession duties, $60 million, are where we should be getting money, not from people who are at the bottom of the economic ladder and from people who are living on pensions, for Pete’s sake.

I’d like to see the government bring back the succession duty tax. I know this isn’t the minister’s line of thinking. The wealthy in this province have always received tax breaks at the poorer people’s expense. That’s where the money should be coming from and not from these people who are least able to pay.

Hon. Mr. Maeck: Mr. Speaker, I can’t recall during any of the debates on any of the bills where so many members have participated in a debate on tax matters. To go through all of the speeches would take a great deal of time, which I see by the clock we don’t have, but I would like to cover some of the points that have been raised by the members.

The member for Erie suggested perhaps that the $16 million we will lose because of raising the limit to 49 cents for chocolate bars and pop could be better used for a dental program. I would like to say to the member that the $16 million would make a very small dent in a dental program really. For a number of years now, pressure has come from all sides of this House because of the fact that children were forced to pay tax on chocolate bars, pop and so on. We have now accommodated that situation and, by doing that, we have also simplified tax collections in the small stores. It’s going to make it much easier to administer the tax for those people who sell chocolate bars and candy, particularly in corner stores.

Mr. Haggerty: That tax relief hasn’t been passed on to the consumer.

Hon. Mr. Maeck: Of course, it’s passed on to the consumer. The consumer is not paying the $16 million.

The member mentioned the removal of retail sales tax for building material. A quick figure from my staff indicates that to do that would cost in the neighbourhood of $340 million per year from the budget, which is obviously out of the question. If we removed the sales tax on all building material, it would cost about $340 million a year, which is a great amount of money.

Mr. Peterson: What is your opinion on Joe Clark’s opinion on that?

Hon. Mr. Maeck: The other thing is that there is always the fear that the sales tax exemption may not be passed on to the consumer, as was indicated by some of the members when we were talking about the hotel industry. They are afraid that the cable television tax may be passed on to the room rates in hotels. In this case, it could be passed on. There’s no way of knowing these things.

The $700 maximum sales tax exemption for solar heating, I would remind the members, represents a purchase of $10,000. We’re not talking about $700 in purchases, we’re talking about $700 in tax. Removing that tax and exempting solar heating will allow those who manufacture solar heating equipment to create jobs and so on. There should be an added advantage besides the fact that we will be getting into an energy-saving area.

Every member I guess has spoken about cable television and every member has suggested the only people who are going to be affected by it are the senior citizens. There are a lot of apartments in this city of Toronto where senior citizens don’t live and where people are paying $600, $700 and $800 a month. The rate for cable TV on a monthly average in bulk will be 27 cents per month; in single service about 46 cents per month. So I don’t think that’s a tax that’s going to really hurt anybody. It’s a very very small tax and I can’t see a senior citizen being forced out of his home or having to disconnect his television for the sake of 46 cents a month --

Mr. Warner: Won’t that disappoint you over there?

Mr. Grande: That’s one more of many, that’s what it is.

Hon. Mr. Maeck: -- or if they are in a bulk situation, 27 cents.

I really get upset when everything is pointed at the senior citizens or the poor people. There are other people in this society besides them who have to also pay.

Mr. Grande: Because they can least afford to protect themselves.

Hon. Mr. Maeck: If anyone in this House is saying the senior citizens of this province cannot pay 46 cents a month towards cable TV, then I challenge them to prove that.

Mr. Mackenzie: They can’t afford one dime more in taxes, Lorne.

Hon. Mr. Maeck: The member for Hamilton Mountain talked about transient accommodation and about the admission threshold of $3.51 from $3, but he refers to theatres all the time. What about the people who just go to movies? There are all kinds of people who go to movies. It is not always theatres. There are many, many places where admission taxes apply to other than theatres. It’s not just theatres.

Mr. Charlton: A movie theatre is a theatre, Lorne.

Hon. Mr. Maeck: Sure it’s a theatre, but that’s not the context in which we usually address theatres. When we talk about theatres we are really referring to places like the Shakespearean festival and others.

Mr. Charlton: I was talking about them all.

Mr. Laughren: For three bucks?

Hon. Mr. Maeck: He also talked about candies and claimed it promotes the sale of junk food and this sort of thing. I would like to know what he gives out at Halloween for instance to the kids who knock on his door.

An hon. member: Das Kapital.

Hon. Mr. Maeck: I would like to know what he gives out to his kids when it’s Easter time. What does he do at Christmas time? So you know, Mr. Speaker, if it’s junk food, I wonder how much his children are eating. My staff says “humbug.”

Mr. Charlton: That’s more junk food.

Hon. Mr. Maeck: He also talked about restaurant equipment, and other members talked about restaurant equipment, and the fact that some items are tax exempt and some are not. However, in most cases what we have tried to do, particularly in restaurant equipment, is simply this: those items that are directly connected with cooking are tax exempt. The other things such as linen, garbage disposal units and things like that, are not tax exempt. That’s where the line was drawn. Napkins are not tax exempt.

Dealing with furniture in hotels and equipment in the restaurants and so on, there was much said that we should not allow the exemption for foreign-manufactured goods. I have some sympathy for that but I must tell the members that almost all of the equipment and all of the furniture that is being purchased by hotels and restaurants is made in Canada. So there’s really not any reason to go into a regulation like that.

Mr. Charlton: Make sure of it.

Hon. Mr. Maeck: The member must remember also there are business people here in Ontario who sell foreign products and they have to live too. He would have them eliminated completely. There are not that many, not enough to hurt our own industry, and most of the furniture, as I am sure all members are aware --

Mr. Charlton: Let them get a dealership for a Canadian company.

[10:15]

Hon. Mr. Maeck: -- is almost all made either here or in Quebec, so I don’t see the need for that kind of an amendment.

The member for Cornwall (Mr. Samis) talked about the same thing -- about Canadian content and so on. He also mentioned home insulation. The member is not here now, but home insulation is, of course, already exempt from sales tax. That is the only part of home insulation we would be dealing with in this particular bill.

He also talked about cable TV and, again, I point out we are talking about 46 cents per month on the average, or 27 cents, depending on whether it is bulk or private.

The member for Victoria-Haliburton (Mr. Eakins) talked about the tourist package being inadequate, and I agree up to a point. I agree the tourist industry needs as much help as we can give it, but I think we are moving a long way to assist them. Certainly, I would also agree the more notice we can give them about tax changes the better it is for everyone concerned, but the member also knows that tax items, budget items, are of necessity secret until they are announced in the budget. It is very difficult. That is why we have extended it to 1981, to allow these people to know at least in advance for this next period so they can make some plans. I do agree certainly that the more notice we can give the better.

Mr. Grande: Speak about note (f) in the bill, Lorne.

Hon. Mr. Maeck: Yes. The member also mentioned the 10 per cent on meals, and he must remember, of course, the 10 per cent starts at a certain figure. If I remember, I think it is $6.

Mr. Eakins: Why 10 per cent and not seven?

Hon. Mr. Maeck: Well, I think the 10 per cent on meals is based the same as on drinks. That is something I could look at and consider, but it isn’t a matter that was drawn to my attention before. I would be happy to look at it. Again, the tax rate is set by the Treasurer and not by me, but I would be happy to look into it to see if there is something that can be done. Certainly, it wouldn’t be for this year now.

The member for Cambridge (Mr. M. Davidson) was willing to bet me money that room rates would go up a dollar per day because of the increase in cable television. If it is going to cost 27 cents a month, I can’t see how that can be related to a dollar a day raise in hotel or motel rooms. I reject that completely out of hand.

An hon. member: If you don’t think they will take advantage of that you live in a dream world over there.

Mr. Peterson: What other notes do you have?

Hon. Mr. Maeck: Well, I have a few more notes here.

As I indicated a little earlier, there were some of the speakers who were very repetitive and brought the same points out several times.

Mr. Laughren: Don’t be nasty.

An hon. member: It is tough to hammer it home.

Mr. Warner: Just trying to help.

Mr. Laughren: Don’t mumble. We are here to help you.

Hon. Mr. Maeck: The member for Ottawa East (Mr. Roy) was in for a while; he made his little visit and left again, but I don’t recall anything he said worth answering, so I won’t bother.

Mr. Warner: He will be back.

Hon. Mr. Maeck: The member for London Centre (Mr. Peterson), popped in at the last minute here; he had been away all night and came in and complained about nobody being in the House. What he said, as far as I am concerned, doesn’t require an answer. It is not worth answering, so I won’t bother. The member for High Park-Swansea (Mr. Ziemba) just reiterated what had already been said about cable television.

Mr. Speaker, I think that winds up my remarks.

Motion agreed to.

Ordered for committee of the whole House.

CORPORATIONS TAX AMENDMENT ACT

Hon. Mr. Maeck moved second reading of Bill 59, An Act to amend the Corporations Tax Act, 1972.

Hon. Mr. Maeck: Mr. Speaker, this bill is to amend the Corporations Tax Act and includes several important amendments arising out of the 1979 Ontario budget. Three important changes are being made to the corporations taxes which will affect all corporations.

First, the general income tax rate is being raised from 13 per cent to 14 per cent. Although this rate increase applies to all corporations, those engaged in manufacturing or processing, farming, fishing, mining and logging will not be affected by this increase. The rate of the small business deduction is being enriched to maintain the effective income rate on small business profits at 10 per cent.

Second, the rate of capital tax payable by banks is being increased. The new rate will be four fifths of one per cent, which is one third higher than the current rate for loan and trust corporations and is more than double the rate for ordinary corporations.

Mr. Lawlor: It should be increased by 5,000 per cent. Then you could make some money.

Hon. Mr. Maeck: Third, the capital tax relief provisions for small business corporations are being enriched and a new relief is being introduced for those small to medium-sized corporations which are not profitable --

Mr. Lawlor: It’s the most glorious business in the world. When things are bad they make money; when things are good they make money.

Hon. Mr. Maeck: Do you want the floor, Pat?

Mr. Lawlor: I have the floor.

Hon. Mr. Maeck: -- with the result that more corporations will be eligible to pay $50 or $100 capital tax, rather than the higher capital tax they are now paying.

Some small corporations which are ineligible for the $100 capital tax because their taxable capital exceeds $200,000 will benefit from a provision which phases in the difference between the $100 capital tax and the higher capital tax they would otherwise pay.

Small to medium-sized corporations that are not profitable will become eligible for a new $100 capital tax instead of the regular rates. To be eligible for this relief these corporations will be asked to make a special calculation which demonstrates the cash flow aspects of their unprofitability.

Other important changes in this bill include measures which clarify how taxable capital is to be calculated. These measures will affect corporations which are members of partnerships, corporations which, having sold capital assets, have not received in full the proceeds from the sale, and those corporations which have loaned or advanced money to related foreign corporations. These measures are designed to treat corporations more fairly.

This bill also includes several important administrative charges which will improve the tax collection methods and appeals procedures. There is a measure which will authorize the collection of corporation tax from foreign entertainment corporations touring in Ontario, and another measure to speed up the appeals procedures by putting a limit on the time in which the ministry must reply to a taxpayers’ appeal.

Finally, this bill includes a tax simplification measure which will end the need for a corporation to file forms with both the federal government and the Ministry of Revenue if the corporation wants to have its income tax reassessed after the time allowed for making the reassessment has passed. Ontario will reassess beyond its six-year limit if the corporation has given the federal government permission to reassess beyond its four-year time limit.

Mr. Peterson: Mr. Speaker, is it your interest to carry on debate until 10:30 tonight and then proceed to the next legislative day, which is next Tuesday? I have a number of views on this bill. I would like to talk at the beginning about the capital tax, which is in many respects the most insidious form of tax this government has ever used on small businesses in this province. As you know, it grew up in a sort of static way over a period of years and became a flat regressive corporate tax that one paid regardless of one’s earnings, regardless of one’s retained earnings, regardless of one’s profitability in any given year.

I say for one I am very attracted to the move of the Minister of Revenue to try to bring some fairness into this tax, and try to avoid some of the paperwork thereby involved. I compliment the minister -- or perhaps since I was criticizing the Treasurer earlier I should compliment the Treasurer -- on those particular parts of this bill. It is a good move, it is a solid move, it is a helpful move.

When we are getting down to the minimal amounts of revenue that are going to be raised by this -- the $100 here or whatever -- one has to think very seriously that maybe in the circumstances it is just a nuisance tax anyway, and the minister is going to have to think, over a period of years at least, of abolishing this tax, holus-bolus.

It has eliminated some of the paperwork. That is something everyone in government is concerned about, the government here, the government in Ottawa, those of us in the opposition. We are not interested in overburdening the small business sector, particularly, with unnecessary paperwork. We all know, those of us who have been in small business -- I for one have been in a small business, not a particularly successful one compared to some of the other members of the House, but I can say without reservation that this has been a nuisance tax. If you talk to any proprietor, on the basis of equity and fairness he would be far more willing to pay on the basis of success or profitability than he would on a flat capital tax rate.

I am glad to see a movement in that direction. I am not sure we can’t move further in that direction. I just give that to the Minister of Revenue, because he is going to be applying his mind in the fairly near future to the whole question of a new budget for next year.

The capital tax generally is an insidious sort of thing. It is levied in some of the most unjust ways I know. Those companies that do not escape the capital tax provisions of this Bill 59 are still going to pay it on capital at the end of the year. And that takes into account, according to the definitions of this act, the bank overdrafts, the bank indebtedness and all that kind of thing.

That necessarily punishes a business that, for one reason or another, has a particularly large degree of bank indebtedness or debenture indebtedness at the end of the year. There are certain businesses that are cyclical, that necessarily need a higher degree of debt at certain times of the year than at other times of the year and we are punishing that particular kind of company.

It would be fairer, I say to the minister, if there was some average involved. If he thinks that is the proper way to tax -- which I am not sure it is, because there are some companies that are extraordinarily highly levered at the end of the year as opposed to other times of the year -- it would be fairer to average it; it would be fairer to take it strictly on equity or retained earnings or other kinds of measures that one could use for the payment of capital tax. It penalizes that particular company that is highly in debt at the end of the year for one reason or another.

I say to the Minister of Revenue that I hope he is aware of this; that he will take it back to his colleagues in the ministry and in the Ministry of the Treasury and Economics, and perhaps next year, as he is now, along with his colleagues, trying to pay a little more attention to this “small business sector,” or the independently-owned sector of the economy, give a little more thought to that aspect that he has not solved in this bill.

As I say, I am very happy with the moves the minister has made insofar as they go in that particular area, and I compliment him. He has made it a little more simple. He hasn’t solved very many problems. I think a logical extension of what the minister has done is to abolish capital tax eventually.

I notice, Mr. Speaker, that I only have a couple of minutes. Unfortunately, I am going to speak out the clock.

I want to talk about the differential rates. The minister has increased the rate by one per cent this year. He has created a differentiation. Some kinds of corporations pay more tax -- service industries and that type; certain kinds of businesses have a differential tax rate.

Now we are into a very difficult kind of problem for the future. There are built into that kind of differential tax rate insidious complications that I am not sure the ministry has thought out in great detail. We are all concerned at this point, and justifiably to some extent, about manufacturing. We are concerned about indigenous research and technology and about creating job value added here in Ontario -- legitimately, to a large measure, because the minister I am sure has read the very substantial, worthwhile and substantive document we have presented on our particular industrial strategy for Ontario.

We have never, and I want to point out to the minister, suggested differential tax rates. Because if our essential purpose in an industrial strategy is to create jobs, we have to recognize also -- albeit in many respects it is not as important as the manufacturing sector -- the service sectors and various other sectors that are involved and are particularly labour-intensive at this point in time.

Mr. Speaker, you have called time.

On motion by Mr. Peterson, the debate was adjourned.

The House adjourned at 10:30 p.m.