The House resumed at 8 p.m.
INCOME TAX AMENDMENT ACT (CONTINUED)
Resuming the debate on the motion for second reading of Bill 43, An Act to amend the Income Tax Act.
Mr. T. P. Reid: Mr. Speaker, this is a great way to pass laws. It is nice to speak before an attentive audience of my colleagues in the Legislature on Bill 43, the Income Tax Amendment Act.
There may have been the odd person who missed my remarks prior to the dinner hour at six o'clock, so I thought perhaps I would repeat them for the benefit of those people.
Hon. Mr. Ashe: Let's take them as read.
Mr. T. P. Reid: I know the Minister of Revenue (Mr. Ashe) after coffee has to be retrained all the time; I might as well repeat these comments so he will have the full flavour.
I spoke at not great length about Bill 43, notoriously labelled in the budget of the Treasurer (Mr. F. S. Miller) as the social service surtax --
Mr. Nixon: Interim.
Mr. T. P. Reid: -- also called an interim tax by my colleague the member for Brant-Oxford-Norfolk.
Mr. Nixon: I try to be as helpful as I can.
Mr. T. P. Reid: It is interesting the bill provides that these tax measures will come to an end at the end of 1984.
However, just to recapitulate, Mr. Speaker, for your edification if for no one else's, I was talking about how contradictory this bill was. It will have the effect of giving Ontarians a personal income tax this year of 50.5 per cent of the federal tax and by the end of the 1984 taxation year a personal income tax of 53 per cent.
Mr. Nixon: Unbelievable; incroyable.
Mr. T. P. Reid: The irony -- it is more than irony; it is actually hypocrisy -- is that the Treasurer states he wants to see a consumer-led recovery and yet he is taking more dollars out of the taxpayers' pockets than before.
Mr. Speaker: I must remind the honourable member that during the course of your submissions and debates that word is verboten.
Mr. T. P. Reid: "Hypocrisy"? It sure is going to be quiet in here. I am sorry, Mr. Speaker. "Contradictory," if you like, then.
In any case, the income tax surcharge will remove -- and the Minister of Revenue has indicated he does not agree with this, but we will hear his figures -- some $170 million from consumers in this fiscal year and approximately $300 million in the 1984 taxation year. With the alcohol and tobacco tax increases and the Ontario health insurance plan premium increases, the total loss to consumers this year will be $396 million versus a gain from the furniture and appliance exemption of $55 million.
The government in effect is taking away $7 for every $1 it is giving back to consumers with the break on the retail sales tax on home appliances and furnishings. In effect, they are giving a $1 rebate, but they are taxing away $7 with this and the other taxes that are found in the bills.
The Treasurer spoke before the budget, as I have said, of spurring a consumer-led recovery. Economists unanimously agree that this is not the way to do it. To give one example, the vice-president of the Canadian Imperial Bank of Commerce, Bengt V. Gestrin, said the surtax "seems to contradict the other measures" and would make recovery more uncertain. Even the federal Liberals, who are anathema to my friend across the way, delayed their tax increases until the recovery had a chance to take hold. The Treasurer did not.
Even the name, as I have indicated -- the social services maintenance tax -- is unfair. The money collected by this surtax -- it is not really a surtax; it is an increase in the personal income tax -- is about the biggest smoke-and-mirrors game the government has tried to play since it bought Suncor. It is simply an increase in the provincial income tax. The money is going into general revenues and is unrelated to social services expenditures as much as it is unrelated to anything else. It is paying for Suncor, Minaki Lodge and government advertising and polling as much as it is paying for social services or anything else.
As I have said, there is no guarantee that this tax will be only temporary. Income tax was temporary when it was originally introduced to pay for the costs associated with the First World War. The Treasurer himself has admitted that it may not be lifted as scheduled in 1985. Of course, the regressive part of it is that those people who have low incomes will have to pay the surtax. With an exemption level of about $2,178 in taxable income, anyone earning more than about $7,000 will have to pay this surtax, or increase, even though his income may be below the poverty line.
This tax is unfair; it is regressive and it is inflationary, as any increase in the cost of goods would be because of the increase in provincial income tax. It is unfair to those who are at or below the poverty line. The whole name of it is unfair and contradictory because it contradicts the very spirit of a consumer-led recovery, which the Treasurer himself spoke of.
We in the Liberal Party will not support Bill 43, and I urge my colleagues on all sides of the House not to support Bill 43.
Mr. Roy: We're with you, Pat. If George Ashe is for it, I'm against it.
Hon. Mr. Ashe: That figures. Anything that's realistic, anything that's rational, you'd be against.
Mr. Speaker: Order.
Mr. Breaugh: Mr. Speaker, you should be grateful they did not put a tax on chiropractors or it would be a noisy night in here indeed.
Mr. Nixon: The chiropractors are not going to be very amused at that.
Mr. Breaugh: Why does my friend not run back up and tell them?
Mr. Speaker, we will oppose this bill. We attempted, as we went through the budget bills, to sort out those measures we thought were at least fair and to provide some measure of support to the government in the process of doing that. We were struck by the comparisons that are in the budget and in the various bills that offer reasonable examples of where this government places its priorities. This bill, I think, is a classic Tory Treasury bill. It has all the earmarks of what the Tories in Ontario have become famous for.
I guess I should begin by saying that it starts as the income tax started, as a temporary measure. I think few of us really believe it is temporary in nature. I read this bill and I see in it the beginnings of a new form of taxation. It fits one of the criteria this government has established for taxation measures, in that it is called by several different names. I think the purpose of that exercise is to make sure that by the time the people of Ontario are aware this bill is here and this surtax is on them, they will have had at least two or three different names applied to it: a social services tax of some sort, a surcharge of some sort, an increase in the income tax of some sort.
There are varying levels of bringing in this increase: 2.5 per cent in the first year and an additional 2.5 per cent in the second year. The Treasurer has laid the groundwork already for saying that may not be the end of it. Even though it is temporary in nature, even though it is a surcharge, even though it has to do with social services, it will be in place and collecting taxes supposedly after July 1 of this year.
It bears the earmarks of what the Tories like to do with a taxation measure: call it by two or three names, and bring it in in stages so the pain is not quite as marked. I noticed that in his introduction of the bill this afternoon, the Minister of Revenue included -- I do not want to interrupt the other conversations in here, Mr. Speaker.
Mr. Speaker: That is very thoughtful.
Mr. Breaugh: I like to keep it down to three or four.
Mr. Speaker: Order.
Mr. Breaugh: I think this is at the heart of what the Tories in Ontario like to do. It is a bit difficult to understand how this change to amend the Income Tax Act is connected with social services. When one examines how the money will go into the Treasury and then come back out again, I suppose there is the hope that it will in some measure go to provide some support for social services, but there is no direct connection and it will be up to the Treasurer to make any connection he deems fit at a later date.
I noticed that when the Minister of Revenue introduced the bill this afternoon, he began by saying how many people are going to escape this tax, as if that was some comfort to everybody else who will have to pay it. When one looks at who they are targeting in this bill, once again with good common sense they are not taxing the poor, for the very simple reason that the poor do not have the money. They are getting at the lower middle class, that is for sure. When one talks about an income of slightly in excess of $7,000, if one is not talking about the poor directly, one is certainly talking about the bottom rung of the next level up.
I think it is true to say that almost everybody who has a steady job in Ontario, almost everyone who has an income of any kind in Ontario, is going to pay this tax. I think it is also fair to say that neither I nor anybody else here would be surprised to see people paying this surcharge for the foreseeable future. I think it is reasonable to say we might even see the surcharge being upped a little bit in future budgets from 2.5 to five, six or seven per cent. In every other instance when this government has introduced this same kind of a tax, by a different name, by a smaller percentage, that has been the trend.
When the government introduced the Ontario health insurance plan premiums they were not called a tax; they were called a premium. They have about as much relationship to the health care budget as this does to the social services budget, which is to say none. Money goes into general revenue and then gets disbursed as the cabinet sees fit.
I guess the same pattern will follow. It will be called by a different name initially. Once it is in place, as Darcy McKeough used to say, it is the best kind of tax you could name because it is one that is already there and people are used to paying it. All one has to do is up the percentage slowly, gradually, every year.
I dare say most of the population will not get a chance to see a copy of Bill 43, An Act to amend the Income Tax Act; they will only hear that this is some kind of a social services surcharge. I dare say most of them, after the beginning of July, will not be aware that the money comes out of their paycheque before they get it.
This is a tremendous source of income for this government, and this is a pattern the government has followed consistently and thoroughly in every way it can dream of over the past decade or so. The government has this type of taxation down to an art.
One rarely sees this government going back to the income tax and saying flat out: "We want to raise the income tax by a certain percentage." That is seen to be a no-no. There must always be some guise under which the move is made, and it always introduces yet another avenue for the government of Ontario to extract income from people who get a weekly paycheque. That is the government's favourite form of taxation.
The more one looks at this, the more one gets the impression that this is a nasty little piece of business. This is not a government moving to say, as it did previously with corporations, that it wants to raise the tax by one percentage point.
I know the Minister of Revenue will again give me a metric arithmetic lesson which proves that one per cent equals five per cent. I am going to say that it does not. Five per cent is five times more than one per cent; it always has been and always will be. He can dream up any set of statistics he wants, but he cannot refute that fact. He can say the dollar values are different, or the dollar values are the same, but he cannot argue that five per cent equals one per cent. It never has and it never will, no matter how many millions he spends to convince the people of Ontario that that old mathematical truth is now no longer correct.
I think we have here a classic piece of legislation from this government, which exercises its budgetary tools to the extreme. Every one of them is there: the name change, the gradual implementation, the concept that it is temporary in nature now. But it will not be temporary, I will bet, two years from now. There is the fact that it will grab more money from the middle-income earners in this province and the fact the government will become more and more dependent on it.
The government of Ontario has introduced a wide range of taxation measures, all of which fulfil these criteria and all of which are equally effective in putting money into the pocket of the Treasurer.
I suppose the government will say that one should not look at this bill as a single piece of legislation but, rather, as part of a provincial budget that gave some exemptions in certain areas for small businesses or lifted a sales tax on certain types of furniture and appliances for a 90-day period and that, on balance and overall, the economy will be better off.
I wish this surcharge had a 90-day limit on it. Again, maybe it speaks to the priorities of the government, which in seeking to give someone a tax break is very precise about when the break begins and ends. The government says very precisely that for a 90-day period on certain specified items there will be an exemption from the sales tax.
I wish the government had taken the same attitude on this tax bill and said this surcharge would last for a 90-day period for certain specific individuals. At least then one might be able to say there was a balanced approach here and the government was dealing with both in exactly the same way. But if one reads this bill, one can see there is no 90-day period here.
The government is talking about beginning with a two-year period. It is also talking about an escalation during that two-year period. There is no guarantee that at the end of the time this surcharge will be lifted. In fact, I think most of us sincerely believe that at the end of this time the temporary surcharge will become the normal way of operating.
From a number of points of view, I do not think this piece of legislation deserves the support of anybody in this House. On this side of the Legislature at least, we feel this is an unfair form of taxation. It does not measure up to the standard which the government set previously with the corporation tax, saying, "Listen, for those of you who are in the corporate world, who are beginning to recover in the economy, who are showing a profit, we will tax you one per cent more," and then moving to address itself to those who are not so fortunate.
This bill is not nearly so broad-minded or so generous. This bill attacks the general population; it attacks them across the board and it lays the groundwork for that taxation process to continue.
Without being unparliamentary about it, the only thing that is straightforward is to read Bill 43. I imagine 125 people have taken a look at it so far, plus the ministry staff, and not too many people in the population will find out that this taxation measure really is what the bill calls it, An Act to amend the Income Tax Act. Most other people will be given to believe that somehow there is a temporary social services surcharge put in place. That is not the legislation that is before us this evening. This is increasing the income tax. It is doing so, we believe, in a manner that is unfair and unnecessary and that will lead to future grief. For those reasons, we cannot support this bill.
Mr. Nixon: Mr. Speaker, I am glad to support my colleague the Liberal-Labour member from northwestern Ontario in his disapproval of the principle of this bill.
I had an opportunity on a previous occasion to draw your attention to the ramifications of the income tax statutes of this province that continue to concern me. You will notice that the personal income tax, with this additional tax, is estimated to return $6,045,000,000 in revenue during the present fiscal year.
In addition to that, the federal government, which has the responsibility of collecting that $6,045,000,000, has undertaken to pay us $3,759,000,000 in our shared programs, for which it pays a major proportion of the cost, in many instances without strings attached -- unconditional grants.
If you add those two figures together, Mr. Speaker, being adept at arithmetic, you will know that is $9,804,000,000 raised by a level of government divorced from the province. In fact, it is the government of Pierre Elliott Trudeau, so often damned by the government of Ontario for not doing anything in support of the initiatives of this province.
The $9.8 billion should be compared with the $22 billion that is the net revenue projected for this year. Being a careful mathematician, Mr. Speaker, you will realize that 45 per cent of the provincial budget is collected by the federal tax collectors.
Of course, we in this House know that we pass legislation year by year establishing a provincial income tax. But how many of the almost nine million residents of Ontario, who are citizens of Canada, are aware of that? Month by month, Mr. Speaker, from your paycheque and mine, as members of this House, and everyone else who is gainfully employed in payment of productive labour as we are --
Hon. Mr. Ashe: You should choke on that one.
Mr. Nixon: As a matter of fact, from my own humble payment from the Treasury of Ontario, more than $800 is extracted by the government of Canada. Like everybody else, I think of the government of Canada as extracting this money perhaps irresponsibly. I thought perhaps you would agree, Mr. Speaker. But while with the one hand they taketh away, with the other hand they send back 45 per cent of the total provincial budget, with no strings attached.
If there was ever a power and a force dislocating the democratic process, I suggest that is it. As we go around following the Minister of Revenue, who is rushing over to consult with his legion of advisers --
Hon. Miss Stephenson: Legion? Three people are a legion?
Mr. Nixon: The only legion that is bigger than his is the legion of the Minister of Education (Miss Stephenson), who is sitting patiently waiting to present some falderal bill of secondary importance while we are dealing with the finances of Ontario and the nation itself.
Mr. Speaker, from your impartial viewpoint, you must surely agree with me that democracy is seriously dislocated if another level of government has the political responsibility to raise 45 per cent of the budget of the Treasury of Ontario. As we go about the province turning sods for new courthouses, cutting ribbons on new bridges, opening new senior citizens' apartment buildings and opening new William G. Davis secondary schools or whatever -- separate schools, for all I know; anything is possible with the present jurisdiction both in the province and in the parish --
Mr. Conway: And they are about to lay a heavy on us separate school types.
Mr. Nixon: It could be. But the fact is that almost half the finances of all these programs is paid without a whimper by the great leader of our nation, who has just returned from a meeting of the leaders of the western world in giving leadership on a hemispheric basis. He and the Minister of Finance have signed the cheques to pay almost half the cost of the government of Ontario without any requirement that credit be given to the government of Canada.
They allow credit to be claimed on behalf of the government of Ontario by the Minister of Revenue and the Minister of Education, God bless her soul, who always on these occasions gives credit to her mentor, her leader, the present Premier (Mr. Davis), whom I would suggest she is planning in a nice ladylike way to supplant at the earliest possible opportunity.
The federal government does not require the kind of political kudos that have become the trademark and sort of the standard operating procedure of the government of Ontario, whose motto emblazoned on a flag and nailed to the mast is, "Me and the Premier brung you the cheque."
I am very much concerned, particularly in this legislation, which is labelled an interim surtax on the income tax, that we know very well -- unless, as we confidently expect, there will be a change of the government in the next few months, with the Liberals replacing the Conservatives to put the income tax and the other taxes back on a rational basis of justice and equity for all -- that this is not an interim tax increase. It is a permanent tax increase like all the other interim increases they have brought into being.
I am very deeply concerned that at a time when the economy is under tremendous duress, the Minister of Revenue is simply being led around by the nose by the Treasurer, who is also planning to replace and supplant the Premier at the earliest possible opportunity. This minister has his policy dictated by the Treasurer; it is really unfortunate.
I have said this in the past, and perhaps the minister is sick of hearing this, but I believe one of the more serious criticisms that can be levelled against the Premier is that he has not given the Minister of Revenue the freedom of action that would benefit all the taxpayers of the province. The minister should have an opportunity to come to grips with assessment and with the financing of local government, in which in his past experience he became an expert. Instead of that, his policies are all dictated by the Treasurer, who himself has publicly said that no one in government should maintain himself in office more than five years. Undoubtedly that was an underhanded attack, a blow, at the present Premier, who has been in office for well over a decade.
I am very much concerned that the Minister of Revenue may have achieved the pinnacle of his political career without ever having assumed a position in government where he will be establishing the kinds of policy that I feel sure, on the basis of his own background, would benefit not only this House but also the taxpayers of Ontario.
I did not want to let this bill go forward without bringing to the members' attention one more time that the government of Canada is assuming the responsibility for 45 per cent of our budget. That, I would say, is a conservative estimate, not a Progressive Conservative estimate but a true, Pocklington-style conservative estimate of the numbers we are dealing with tonight.
It is absolutely without doubt that we in this House all know that the passage of this bill over the objection of the opposition parties means this addition to the income tax is a provincial responsibility. Of our almost nine million citizens, I would suggest that a vanishingly small proportion are aware of that fact and of the fact that the political problem, the political situation, must be borne by the government of Canada under the agreement that goes back to 1942 or 1943, entered into by a previous Liberal government in order to prosecute the war effort successfully. None of us, of course, would question that in hindsight -- I am sure you would appreciate that, Mr. Speaker. Still the government persists in that agreement, and the government of Canada must accept the political responsibility for raising this proportion of our funds.
One of the things I brought to the members' attention a while ago in a previous debate was the publication of this tome entitled A Separate Personal Income Tax for Ontario: An Economic Analysis, published by the Ontario Economic Council and written by Douglas G. Hartle and others. I already have a question on the order paper asking for the cost of this publication. It was introduced, I suppose, by the Treasurer -- not by the Minister of Revenue, who would not waste public funds in this connection -- in a moment of pique, and he indicated he was going to establish a separate provincial income tax machinery.
Now, obviously there is no way that can be done and the thing I regret is we have been committed to many hundreds of thousands of dollars for the research and publication of this volume amounting to 641 pages, which ends up saying the province would be foolish indeed, in fact, asinine, if it even considered collecting its income tax itself.
Mr. T. P. Reid: Then they probably are.
Mr. Nixon: Well, there is no doubt about that and we did not need a passel of PhDs to prove that point.
The thing that concerns me is that so many of the taxpayers -- in fact, the citizens of Ontario and the members of this House -- are unaware that over the past decades, four to be exact, when the government of Ontario appeared to be financing its programs with such ease and with a surplus year by year up to the very year the Premier took over the responsibility for our affairs, we always had a surplus but it was based on the government of Canada collecting a major proportion of our revenue. Even with that assistance --
Hon. Miss Stephenson: By interprovincial agreement and you know it.
Mr. Speaker: Order.
Mr. Nixon: Thank you, Mr. Speaker. I appreciate your help in this connection.
Even with the assistance of a rich uncle in Ottawa sending money to the profligate government of Ontario as it spends more and more, we still have not had anything even near a balanced budget for all the years the Premier has been running the affairs of this province. The last time our books were anywhere near in order was the last year that John P. Robarts, God rest his soul, had the responsibility for our affairs.
I can assure you, Mr. Speaker, there is no way we in the opposition can support this bill because it simply compounds the undemocratic approach to the financing of provincial programs that has been so successful for so many decades in obscuring the true cost of the profligate government of this province.
Mr. R. F. Johnston: Mr. Speaker, I truly regret that I did not get to the chiropractors' dinner tonight.
Mr. Nixon: On a point of order, Mr. Speaker: I missed it too. I only go once --
Mr. R. F. Johnston: Then I also regret I was not wherever you were, because --
Mr. Kerrio: On a point of order, Mr. Speaker: That member can go through many contortions without going to the chiropractors' dinner.
Mr. R. F. Johnston: I appreciate the compliment.
Hon. Miss Stephenson: But it would be helpful to know what lubricant Bob was using.
Mr. Speaker: Order.
Mr. R. F. Johnston: It is obvious; though I just passed by a whole series of remarks I could make that I am not going to make, which you will be pleased about, Mr. Speaker. It is clear one could really benefit by that magical recall of vocabulary that has come to the member for Brant-Oxford-Norfolk (Mr. Nixon) tonight in terms of --
Mr. Nixon: What is that riding again one more time?
Mr. Ruston: Where were you tonight, Richard?
Mr. Nixon: Perhaps you would like to include Haldimand as an alternative.
Mr. R. F. Johnston: Just a little fatigue, I think. It is difficult to come up with words for this, like passel, etc.
Mr. Conway: Are you part of a passel of PhDs?
Mr. R. F. Johnston: A passel of PhDs I thought was wonderful, just wonderful; and worthy of the member for Renfrew North (Mr. Conway) I might say. It is important to have other words because one cannot use words here like deceitful, dissembling or hypocritical to describe this.
Mr. McClellan: Good thing too.
Mr. R. F. Johnston: It is a good thing, but I am finding it difficult to come up with other kinds of words that would more accurately or as accurately indicate what is wrong with this bill.
We rise in opposition to this bill in the strongest of terms, as the Minister of Revenue well knows from the fact we have raised questions in this House concerning the inequity and injustice of this piece of legislation. This comes from a government which, in my view, has done more in the last couple of years to widen the gap between rich and poor, to reward those who have and to take away from those who do not have, or not to give to those who have very little. This falls into perfect step with its policies.
I was at the estimates of the Minister of Community and Social Services (Mr. Drea) this afternoon. As I have done many times, I was drawing to his attention the contradiction in terms of just public policy of giving huge increases on a percentage basis to doctors -- $12,000 a year in the last year. The average increase to doctors was $270 million to approximately 14,000 people. At the same time the most we could scrounge up --
Mr. Nixon: Bob Rae is not against it.
Mr. R. F. Johnston: I am drawing a comparison, if the member does not mind.
Mr. Nixon: Who is the leader over there?
Mr. Speaker: Order.
Mr. R. F. Johnston: Mr. Speaker, the heckling on this side is most inappropriate. The comparison I am trying to make, the contrast is that in the same year we have spent $52 million on almost 300,000 people who are the poorest citizens in this province. While this bill does not touch them, it dramatically hits the group just above them on the income scale. It is endemic to this government and its approach to taxation policy that it does not understand how cruel it is being and how it is helping to make firm and rigid the class distinctions within this province by virtue of its taxation policies, as well as other things.
On page 17 of this year's budget we learned that the surtax is being brought in; one, to pay for increased social services for those who need it in these hard times; and two, because there is too much money out there in savings that needs to be loosened up and put back into the economy. This is the reason this particular surcharge is being added. There are all sorts of people out there with all sorts of additional money that should be recirculated at the moment and consumer demand started up.
I think studies will show that is true for many people in our society, but it is not true for all the people this piece of legislation will affect. The people who are going to he hardest hit by this are people who have no savings. If they have savings, they deserve some sort of reward for being able to have savings when they are getting by on the amounts of money they are getting by on.
I speak here specifically of a person who is earning the minimum wage in Ontario or slightly above, say $3.60 or $3.70 an hour, 10 or 15 cents above minimum wage. This is a minimum wage, I might remind the members, that has not been raised in almost two years in this province, while the cost of living has gone up approximately 25 to 28 per cent during that same period.
How is it we can expect somebody who is earning $3.70 an hour, slightly more than $7,500 a year, to save money and have money available to help this government pay for social services for those in need? That is absolutely ludicrous, but that is exactly what this bill requires.
That person will be taxed on the same basis as I am taxed, or as a cabinet minister is taxed, or as a doctor is taxed, or as our great friend, the head of Massey-Ferguson Ltd., Mr. Rice, is taxed. Surely that is absolutely unjust and inappropriate.
A person living on $7,500 a year in the city of Toronto and renting in the private market, as of April 1982 would have been spending an average of $336 a month for a one-bedroom apartment. That is $4,032 a year out of an income of $7,500.
This government has decided those people deserve to pay an extra five per cent in tax as well. It is also saying at the same time as it is going to get another five per cent increase in tax that it is taking off the sales tax on things like refrigerators.
My God, how is somebody who has only that much money left to feed himself and perhaps some dependants -- or just himself; let us just leave it at that -- and clothe himself so he can participate in the work force; how is someone working at $3.70 an hour going to be able to afford a refrigerator whether or not the Treasurer leaves the sales tax on the darned thing? He is not going to be able to. The government is mixing up its target groups.
It is offensive to me that when one looks at this one realizes the people who are actually unemployed will be paying this tax, unless this government changes its mind.
I quote from the Treasurer's remarks in the budget, page 17, "This means that those citizens of Ontario who have jobs will contribute a modest additional amount to ensure that decent public programs and job-creation initiatives are paid for without undue increases in our deficit."
This bill does not say an unemployed person will not have to pay. An unemployed person in Ontario is receiving on average $155.93 a week in unemployment insurance benefits. That puts them over the base amount of about $7,300 or whatever it is the Treasurer and Minister of Revenue have decided is exempt.
Therefore, somebody who is unemployed, who is in need of those very services this supposed progressive tax measure is purporting to assist, is actually going to be paying into it. Surely that is ludicrous. Surely even Conservatives can understand that. Surely even Peter Pocklington could understand that.
Mr. Conway: John Gamble is here tonight.
Mr. R. F. Johnston: But John Gamble could not. I think this is a very good point from the member for Oshawa.
Mr. Conway: Well, he is here tonight, if you would like to have a chat.
Mr. R. F. Johnston: This bill does not, nor does any of our legislation in this province, take into account any effect on low-income people in Ontario, and I am including people who are earning $7,000, $8,000, $9,000 and $10,000 a year. Nowhere does it take into account that around this province we have a real discrepancy in the cost of living.
I have costs for housing that for a one-bedroom apartment would range from about $4,000 in Metro to more than that in Thunder Bay, to much less than that in places such as Hamilton. In northern Ontario and isolated communities, all the costs are much higher, as the member for Lake Nipigon (Mr. Stokes) has said many times. Yet if a person is earning $3.70 per hour in a restaurant in Marathon, he will have to pay this tax even though his overall costs are much higher than those of somebody living in downtown Toronto; and their disposable income is less than somebody living in southern Ontario.
It is fundamentally unjust. What we have been trying to suggest to the Treasurer and to the Minister of Revenue is that surely there is a better way of doing this. Surely, if he is going to have a surtax and not seem to be dissembling about what it really is, he would put his surtax on those who can afford it. He would not attack people who do not have any disposable income to liberate, and who are being pushed very severely in our economic climate.
All we have been asking of the Treasurer is not to say we should not have a surtax, and not to say there are not groups in this society who should be paying more, but that he please look at it with some degree of fairness, some sense of equitability, if that is a word --
Mr. R. F. Johnston: Equity; that would be the word. That is another good reason I should have been there tonight, Mr. Speaker.
Mr. R. F. Johnston: I will leave that unanswered.
Mr. Speaker: Back to the bill, please.
Mr. R. F. Johnston: What we are talking about is a real surtax, a real surtax on people of wealth and means who have disposable income, such as cabinet ministers.
Can we perhaps do a little survey of the cabinet ministers to see what their disposable income is and how much they have in their savings accounts at the moment or what they have been investing in various stocks, etc?
Hon. Mr. Ashe: We are not allowed to.
Mr. R. F. Johnston: They are not allowed to. How much is in their savings accounts or how much have their wives or husbands got?
Hon. Mr. Ashe: Nothing.
Mr. Kerrio: They could share with Morty and Stephen Lewis.
Mr. R. F. Johnston: I doubt very much the "nothing" I got from the Minister of Revenue.
I have been very kind to the member for Niagara Falls (Mr. Kerrio) tonight. I have not turned on him yet but if he wants me to, I will be glad to do so.
Mr. Kerrio: They could share with Morty, couldn't they?
Mr. Speaker: Order.
Mr. R. F. Johnston: If the member wants me to start to talk about the federal Liberals, I will do so in a less glowing fashion than did the member for Brant-Oxford-Norfolk (Mr. Nixon).
Mr. Speaker: I would rather you got back to the bill, please.
Mr. R. F. Johnston: So would I.
Mr. Speaker: Thank you.
Mr. R. F. Johnston: Who are the people who have disposable income? I would suggest there are many over there who have a good deal of it, or even that some of us have some. I might even add myself into that group. I will not add the member for Oshawa (Mr. Breaugh) because he does not want me to name him, but I will mention myself.
Mr. Breaugh: How about the chief government whip over there?
Mr. R. F. Johnston: The chief government whip, as we know, could probably fund this whole thing himself if he were taxed properly. The Deputy Speaker is not as well off, but that is another matter.
All we have been asking of the government is to take it out of the pockets of those who can afford to pay and amend this thing so it is not affecting those people who are in no position to pay any more. If it really wanted to rebuild this economy, it would not do it on the backs of poor people and arbitrarily pretend that people earning less than $7,500 need to be targeted. It knows very well, when it makes a decision about whether or not people are poor enough to receive the premium assistance, that they are eligible to earn much more than that and have much higher taxable income before it starts to insist they pay the full Ontario health insurance plan premiums.
Even if the government does not let them know that is their right, even if it does not really encourage them to understand that is their particular role, its rules say one can have a taxable income of $2,178 and still get premium assistance. The least they could do would be to raise this up to a comparable level; be consistent, if that is not maybe too much to ask.
But I would ask them, if they think of adjusting this, to think in much more equitable terms and to think of those who have real wealth, who have their money stuffed away and not being used. If they want to get that out, tax them, but do not tax those who do not have it. Do not reduce the take-home pay of people who have been unjustly held down for many years and who deserve more.
How do they expect people to live on $150, $160 or $170 a week and then pay this extra tax? It does not make sense. I realize I am repeating myself, and I will desist and sit down. But I just find it totally unthinkable. I cannot understand why the government wishes to persist with this particular tax, standing where it does, and why it does not just get up and say, "Yes, we made an error, and yes, we will start this at a much higher level so we are not taxing lower-income people."
I sit here still wondering whether I should have this great disbelief that the Minister of Revenue will unstick his tie pin, suddenly his thoughts will become clear and he will then decide this is not just and he will change it. It must be the case. I believe even the Minister of Revenue will understand this, as I know my uncle Jack does over here.
I encourage the minister to rise in his place now and not wait for the end of debate and say: "Yes, we will change this. Yes, we will come in with some amendments to tax those who can afford to pay and not those who cannot." Then we will all be able to go home much earlier this evening.
Mr. Conway: Mr. Speaker, I want to say a few things about the bill before us, incorporating as it does the social services maintenance tax. In beginning, I want to take issue with my colleague the member for Brant-Oxford-Norfolk, who graced this assembly with some vigorous words not many moments ago.
The Minister of Education (Miss Stephenson) will recall the member for Brant had said the Minister of Revenue was nothing but the lackey of the Minister of Treasury and Economics.
The Deputy Speaker: Brant-Oxford-Norfolk.
Mr. Conway: Exactly. The member for Brant-Oxford-Norfolk charged the Minister of Revenue with being nothing more than the lackey of the Minister of Treasury and Economics.
Mr. Nixon: Even his executive has left.
Mr. Conway: There was a time not very many days ago --
The Deputy Speaker: Is "lackey" parliamentary, I am wondering?
Mr. Conway: Well, I will withdraw it, but the charge was certainly made that the Minister of Revenue played a very subsidiary role to the Minister of Treasury and Economics.
I used to think that might in fact have been true until a week or so ago I saw the member for Durham West (Mr. Ashe) slip the famous retroactivity amendment into the land transfer tax without the Treasurer even knowing what he was doing. When the Treasurer found out the morning after, not only that a bill he had firmly and resolutely opposed throughout many months in cabinet had been passed, but that his colleague, the junior minister, had in fact made it retroactive, I can just hear the whispering pines in Muskoka share with the Treasurer a sense of angst and disgust.
So I cannot agree with my friend the member for Brant-Oxford-Norfolk that the honourable Minister of Revenue always plays a subsidiary role. The land transfer amendment certainly indicates he will stick it to the Treasurer as quickly as any of the rest of us and, as this case proves, much, much more successfully than many on this side can take credit for.
I want to agree with those members who have drawn to our attention the fact that this particular bill incorporates a tax that brings with it a name that is a bit Hobbesian. It is mean, it is nasty, and it is not the kind of language I particularly like to see attached to any tax measure. It does not befit a government doing business in a civilized province such as this in 1983 to offer it up as such.
I chuckled when I heard the Treasurer, in his famous budget of May 10, tell us on that occasion, "I would like to announce one additional, temporary tax measure." He goes on to talk about the social services maintenance tax.
It has already been commented upon by my colleagues, among them the distinguished member for Brant-Oxford-Norfolk, that this was the way the federal Minister of Finance introduced the first income tax measure way back in the First World War days.
I want to say for the benefit of the upwardly mobile and more than a little bit ecumenical member for Sudbury (Mr. Gordon), who has dined at a Liberal table in his previous incarnation while he sought to determine, like the Minister of Education, in which direction politically he would ultimately go --
Hon. Miss Stephenson: I dined at no Liberal table.
Mr. Conway: I want to say, if it is good enough for the Minister of Tourism and Recreation (Mr. Baetz), it is good enough for the minister. The minister should not feel nervous and she should not feel embarrassed. History is sometimes a painful experience, but she should not feel nervous. We would have been glad to have had her.
Hon. Miss Stephenson: I am not nervous, not in the least. I am not nervous and you can ask your former leader. Ask him to give you the truth.
Mr. Nixon: I rejected her to the end.
Hon. Miss Stephenson: Stop fantasizing, Robert.
Mr. Conway: I hear that was more than a passing flirtation.
Mr. Nixon: I was lucky to escape with my --
Mr. Conway: One can almost fantasize --
The Deputy Speaker: Something in there is unparliamentary.
Hon. Miss Stephenson: Do not fantasize. I am much too colourful for you.
Mr. Conway: I will not fantasize. I want to say for the benefit of my friend from Sudbury city that it was on the same day as when his colleague, the Minister of Treasury and Economics of Ontario, introduced his document that about four and some odd hundred miles east of this assembly, the Honourable Jacques Parizeau was rising in his place, a few hours after we had our budget address here, to introduce his budget to the National Assembly.
One of things that was very interesting about the Parizeau budget was that --
Mr. Conway: I was thinking about that, but not even I would dare to engage in that debate.
A year ago, Jacques Parizeau introduced an extremely high and controversial gasoline tax to the National Assembly and through those elected members to Quebec. He did so on that night, 12 months ago, stating it was a temporary, one-year measure to deal with a serious financial and economic challenge, which he as the Minister of Finance for Quebec felt was well under way. A year ago, the Minister of Finance for Quebec said his very high gasoline tax was a temporary, one-year measure to deal with the financial exigency that he outlined at that time.
Not any more than four hours after the Treasurer read page 17 of his budget, Jacques Parizeau was introducing at that time, as the Treasurer did, the social services maintenance tax, which he indicated would be "an additional, temporary tax measure."
Jacques Parizeau was on his feet in the National Assembly saying, "My temporary gasoline tax, high and painful as it has been, is going to continue to be in effect." I suspect that his one-year gasoline tax is going to be a many-year gasoline tax.
I know even the member for Mississauga East (Mr. Gregory) would agree with me that governments generally do not have a high rating on the credibility chart when it comes to temporary tax initiatives. I wonder whether or not we should believe the Treasurer about the one-time temporary social services maintenance tax any more than the good people of Quebec believed Jacques Parizeau a year ago when he said their very high gas tax would be a one-time, one-year initiative.
Mr. Samis: Do not forget Mackenzie King.
Mr. Conway: My learned friend from Cornwall invites a return to the days of Mackenzie King, which some are more capable of returning to than others.
Mr. Mackenzie: How about Mitch Hepburn?
Mr. Conway: The member for Hamilton East, fresh from his weekend in the hardwood hills of the Madawaska Valley, suggests we talk about Mitch Hepburn. That is perhaps something I would be prepared to do with him on another occasion.
I, unlike other members, have been reading this budget item for a number of weeks, wondering whether our provincial Treasurer is not telling us something that we are missing.
Mr. Bradley: The truth?
Mr. Conway: My friend the member for St. Catharines wonders whether or not there is some hidden truth in this initiative. I wonder if that is not the case, because I notice that on pages 15 and 16 of the May 10 budget the Treasurer treated us to a four-paragraph lecture on OHIP premiums. He indicated that OHIP premiums were going to increase by five per cent.
Later on in that subchapter he indicates that he has examined carefully the impact of his payroll tax proposal, one which has been generated in previous budgets, and he has come to the conclusion, if I can quote the budget of May 10 on page 16: "Last May I released a paper which examined the possibility of addressing part of this problem by replacing OHIP premiums with a payroll tax."
The problem he is referring to is that five years ago OHIP premiums paid for 23 per cent of health spending. This share of health costs being paid for by the OHIP premium mechanism declined to 19 per cent in 1982-83.
He indicated in his budget that as Treasurer he had received a number of briefs concerning this payroll tax paper, most of which expressed doubts about the wisdom of introducing such a new payroll tax. "I intend," he went on to say, "to heed this advice and I do not intend to proceed with any further study or discussion of the payroll tax concept at this particular time."
I was wondering whether, with the new social services maintenance tax, we were not beginning to see the end of the OHIP premium mechanism.
The members of the select committee on health care financing and costs of five years ago -- and there was none more involved and none more distinguished than my friend the member for Wellington-Dufferin-Peel (Mr. J. M. Johnson) -- will well remember the debate we had at that time about the options for replacing the OHIP premiums. I think it is fair to say, and I know my friend from Hamilton East will recall, however much it clashed with his ideological proclivities, it was within the quiet of the government caucus office, I well remember --
Mr. Mackenzie: Explain that word to me. I do not understand those big words.
Mr. Conway: I will tell the member, I have heard some of his speeches and I have heard him utter more than a few multisyllabic wonders so I do not accept his self-deprecation.
I want to say to the member that he will remember, as will the member for Wellington-Dufferin-Peel, that in our discussion about options for replacing the OHIP premium mechanism there was a widespread belief that the only place for that was the personal income tax. When I see this kind of initiative as incorporated in Bill 43, I wonder whether the Treasurer is not telling us something fairly important.
I remember the Premier (Mr. Davis) lecturing me and others for days -- it was only weeks after the 1981 election when, without the knowledge of 66 of the recently returned Progressive Conservative MLAs, he and the former head honcho up there, Hughie Segal, took a 25 per cent interest in Suncor -- when we said that was part of no government platform in the election campaign. He said, "Oh, if you look back into the speeches of the Minister of Energy, when he outlined what the Ontario Energy Corp. mandate was going to be, you could certainly see the beginning of a new departure."
Ever since that little lecture, I have been very careful to look at government initiatives which might be more than we imagine in the first instance. Would it be possible with this particular amendment to our Income Tax Act, the Bill 43 currently before us, we are seeing a beginning of the end of the premium in terms of financing health care in this province?
Hon. Miss Stephenson: Don't hold your breath.
Mr. Conway: The czarina of all education has uttered a profundity to the effect of, "Don't hold your breath." She may be right.
Hon. Miss Stephenson: I am looking out for your health.
Mr. Conway: Notwithstanding the fact that the minister is opted out, I might even submit to her care more readily than she might imagine.
Hon. Miss Stephenson: I am not sure that I could stand that -- nor could you.
Mr. Conway: Is it an offer or is it not an offer? What is it?
Seriously, I was wondering whether my friend the member for Bellwoods (Mr. McClellan) had any of the same inclination. He is a learned member of the health-care-costs committee. I wonder whether any other members of the assembly were mindful of the Treasurer's lament at the bottom of page 15 and the top of page 16, about what the OHIP premium tax was not doing and how it was not performing as it once had. Is he telling us now that quietly, incrementally, in the best of the gradualism of the Ontario Progressive Conservative tradition he is beginning to shift the emphasis away from the premium and on to personal income tax through this kind of surtax mechanism?
I wonder. I do nothing more than that at this time, because I know something of the ideological warfare that rips and tears the Progressive Conservative caucus. I know the members for Ottawa South (Mr. Bennett) and St. George (Ms. Fish) do not much agree on anything more than the time of day. I know the Minister of Health (Mr. Grossman) and the Minister of Education have not always agreed on educational initiatives in the city of Toronto.
Hon. Mr. Bennett: Speak for yourself.
Mr. Conway: Not inviting the member for Ottawa Centre (Mr. Cassidy) to the sod-turning in his own riding was beneath the Minister of Municipal Affairs and Housing, because I have always found the minister to be --
Hon. Mr. Bennett: Sod is beneath me, that is for sure.
Mr. Conway: Score one for the member for Ottawa South. That is not bad. I sort of like the member; he has always been a good friend of mine and when he comes to Pembroke, I will tell members, we turn the sod together. No, he has been great. I do not understand why he has so abused the member for Ottawa Centre, but perhaps there is a hidden agenda about which he will tell me privately.
Mr. Conway: I sometimes think my interventions in these debates are more than a little counterproductive, but I just want to conclude by seriously --
Mr. McClellan: June 24 is rapidly approaching.
Mr. Conway: That is right. The member for Bellwoods is properly advising me of the preferred adjournment date, and I want no more than anyone else to keep members here beyond their normal six-month allowance, notwithstanding the blandishments of the editorial board at the Toronto Star.
I want to say to the Minister of Education, who is really the minister of everything in this government, I hear, if this is a new initiative, if Bill 43 is the beginning of the end of the OHIP premium in terms of our tax regime, would she please encourage her junior, the Minister of Treasury and Economics, perhaps to make an announcement in that connection because it might be more helpful for the assembly to understand the longer term in this connection.
If Bill 43 begins a formal end to the role of the health care premium in our province, then I am prepared to be less hostile than I am, as I have stated, for the reasons given in the earlier part of this address.
To you, sir, may I extend my thanks for your traditional indulgence.
The Deputy Speaker: You are most welcome.
Ms. Bryden: Mr. Speaker, as we all know, this bill imposes a five per cent surtax for 18 months on all but the very lowest-income taxpayers in the province. I note the bill simply calls it An Act to amend the Income Tax Act. The Minister of Revenue appears to have dropped the silly title given to this tax in the Treasurer's budget when he called it "the social services maintenance tax."
By that title, the Treasurer seems to be implying that social services would be cut back further than they have already been cut if this tax were not imposed. The Treasurer has already reduced many social services or kept the increases below the inflation rate. He is not maintaining the level of services to those on social allowances. He is not maintaining the grants to students needing student aid. He is not helping community organizations which try to assist seniors to remain independent in their own homes on an adequate basis. He is not improving home care systems so hospital beds can be relieved.
He is implying by the title of the social services maintenance tax that if he did not impose this tax he would presumably have to make further cuts, but further cuts would be unconscionable. In effect, by such a title he is blaming the recipients of social services for a tax increase. He could have called it the Suncor investment maintenance tax or the government waste maintenance tax --
Mr. Wildman: The Minaki tax.
Ms. Bryden: Or, as my colleague says, the Minaki Lodge maintenance tax. That would have made more sense. But no, he has laid the blame on the poor, the disadvantaged, the people who need social services.
What is worse, he has made the poor pay for the services they require because they are not able to work or their health is poor or they are students or people who need day care and things of that sort. One could almost call this a user fee because he is making the tax applicable to many of the recipients of social services. They are being asked to pay for the maintenance of the services which we provide to them because they are needed.
A single person earning $7,500 or a married couple earning $12,500 will be paying this tax. I suggest that if additional revenue is needed, a surtax on incomes over $40,000 would be much more appropriate. Those are the people who are benefiting from a great many of the tax expenditures that are available. Higher-income groups can benefit from registered retirement savings plans and various other forms of deductions not available to lower-income groups. It is time the higher-income group shared in the sacrifices that may be needed in this time of restraint. Instead, the sacrifices are being asked of the poor.
There is another area which is undertaxed in this province and that is the field of capital gains. In Canada, only half of a capital gain is subject to tax in the first place. If additional revenue is needed, it seems to me that is an area the province could look at. It could take a piece of the other half of capital gains that is exempt under the present income tax law.
The government could also close many tax loopholes. It could close or at least reduce what are known as tax expenditures. There are figures showing that tax expenditures total something like $300 billion. I think the figure is somewhat less than that, but at any rate, tax expenditures are a very large amount of revenue which is lost. If the provincial government did not go along with all the tax expenditures, it could get more money from closing some of those loopholes.
This is the kind of tax measure we would be interested in looking at, but certainly not one that hits lower-income groups the way this one does. That is why our party is opposing this legislation. It is not contributing to a more progressive tax system in Ontario; that is what we have been demanding for many years. The tax system is distorted in favour of letting upper-income people off.
One thing the Treasurer does not seem to recognize is that the federal government has recently reduced the top marginal rate on taxation, so a surtax is going to yield less from upper-income groups than it would have if that top marginal rate had not been reduced. That is another reason higher-income groups should be paying a larger surtax and lower-income groups should not be paying anything. If we want a stimulative budget, which is what the Treasurer said he was bringing in, if we want to stimulate spending, we have to bring in taxes that will not take money or purchasing power away from the poor.
In my opinion this tax is a reflection of the government's philosophy of skewing the tax system in favour of benefiting upper-income groups and disadvantaging lower-income groups. That is one of the main causes of our present recession.
We would like to see this bill withdrawn and replaced by a progressive tax bill.
The Deputy Speaker: Thank you. The member for Ottawa East has indicated he feels a speech coming on.
Mr. Roy: Just a brief one.
The Deputy Speaker: At this point, I must recognize the extinguished member -- that is, distinguished.
Mr. Roy: You understand, Mr. Speaker, that as we sit here and listen to the pros and cons of any particular piece of legislation, some of us feel a need to voice our concern about that legislation on behalf of our constituents. I do so in spite of the fact I see the Minister of Revenue expressing some sigh of impatience about the time that is being taken in discussing this.
Mr. Conway: I am for making him retroactive.
Mr. Roy: Yes, we should possibly. I am surprised there are no retroactive -- or are there retroactive provisions? I guess there are in this --
Mr. Conway: What do you say we make George retroactive, back to when he was on the Nepean council and school board?
Mr. Roy: No, George is one of the valued members and I think --
The Deputy Speaker: That is the Minister of Revenue.
Mr. Roy: The Minister of Revenue has that tenacity which is so often exhibited by ministers of revenue. They get all the abuse and none of the glory of the process. They are given all this legislation. This minister is even different from some of his colleagues; he seems to relish the abuse. I think there is a bit of masochism in that minister in the way he is able to absorb abuse and to shut it out with a certain amount of satisfaction.
My comments will be brief as usual. My colleague the member for Brant-Oxford-Norfolk talked about the role played by the federal government in collecting income tax. My colleague the member for Renfrew North (Mr. Conway) talked about how we are sometimes misled by different ministers about the duration of some of these taxes.
The Deputy Speaker: Is that parliamentary?
Mr. Roy: What did I say?
The Deputy Speaker: "Misled."
Mr. Roy: Mr. Speaker, we are getting far too sensitive in this place. If we cannot use words like "misled' or "hypocritical" when talking about policy as opposed to individuals, if we cannot talk about "lackeys," which I know renders people on that side extremely sensitive, we are overly sensitive. We are going to have to make this place a bit more interesting and a bit more abusive in the future.
My colleague the member for Rainy River set the tone for this whole caucus of how we shall be opposing this tax measure. I want to take a different approach to the process. I am sure members will understand that even though it may appear to some that I am straying somewhat from the principle of the bill, should I go too far I am sure --
The Deputy Speaker: I will bring you to order.
Mr. Roy: You will, or I am sure the Minister of Education, as the watchdog of this assembly, will remind you that I may be straying too far from the principle of the bill.
What are we doing? The Minister of Revenue is here this evening asking us, the representatives of the people of Ontario, to support a tax measure to increase taxes on the citizens of the province. For what reason? Are we to trust additional revenues to the same people, for instance, who spent $650 million on Suncor? Are these people to be trusted? As my colleague from Renfrew said some time ago, we were not expecting this wholesale attack on the public Treasury and the expenditures of such large funds as in Suncor. I would hazard to think most of the members of the Conservative caucus and even the cabinet were not expecting that expenditure, but that is what happened.
As the representative of the good citizens of Ottawa East, if I am asked --
Mr. Conway: And they are good.
Mr. Roy: They are good, wise and judicious.
If I am asked on behalf of those citizens to support a tax measure to give that kind of power, to allow that kind of abuse on the part of the government, I will categorically say no. I join my colleagues in opposing this legislation. Are we to give these people the power, for instance, to waste another $46 million on Minaki? Is that what they wasted?
Mr. Conway: They spent $45 million to protect $500,000.
Mr. Roy: That is right. As my colleague rightly points out -- talk about a value judgement on behalf of a government -- in an attempt to save $500,000, this government wasted $45 million. That is good planning. Even the Minister of Education, who has consistently been confused in her budgets, would not be making that sort of mistake on her own.
As the representative of Ottawa East, if I am asked to support or to give the government power to get its hands on public funds to waste them in this fashion, my answer is categorically no.
Mr. Roy: Mr. Speaker, I am trying to gain your attention and am getting competition from the Minister of Education.
The Deputy Speaker: Colleges and Universities.
Mr. Roy: Is it not Education?
Mr. Bradley: She is the czarina of all education.
Mr. Roy: It is all education, is it not? It is Bette "Software-Hardware" Stephenson.
An hon. member: Or coursewear.
Mr. Roy: Or courseware.
Hon. Miss Stephenson: Which is better than Albert "Nowhere" Roy.
Mr. Roy: Nowhere, yes. I want to tell the Minister of Education to leave the underwear out of this debate.
Hon. Miss Stephenson: I did not say "underwear"; I said "nowhere." That is you.
Mr. Roy: Leave that kind of wear out of this. We shall not get personal in these discussions.
As a representative of the citizens of Ontario, I am asked by the same ministers, these same people who are wasting taxpayers' funds running around the province in limousines with chauffeurs -- I darned near get run over every time I go by the Macdonald Block. There is a new car whistling out of there with a young chauffeur, and inevitably he always has a phone at his ear. He has one hand on the phone and one hand on the wheel. They come racing out of there. It is dangerous. These people are not going to get any more money to run around in limousines.
Mr. Conway: Has Doug Wiseman ever run you over around Perth?
Mr. Roy: I will tell you, Wiseman had his --
The Deputy Speaker: That is the Minister of Government Services.
Mr. Roy: I am sorry. The Minister of Government Services --
Mr. Bradley: They are always on their way to courthouse openings.
Mr. Roy: That is right. The minister with the bad memory, he forgets who the members are from Ottawa, except the member for Ottawa South, of course.
Hon. Mr. Bennett: I am delighted he remembers me.
Mr. Roy: Mr. Speaker, I know I am straying. I admit it, I plead guilty, but I have to tell you there was a courthouse opening last week in Ottawa --
Hon. F. S. Miller: Another one?
Mr. Roy: Yes. There they were in Ottawa, shovelling dirt with a big yellow machine, that is what they were doing. There we were in the middle of a field, at the corner of Laurier and Elgin, and it is --
Hon. Mr. Ashe: Come on. Mr. Speaker.
Mr. Roy: George, even you will understand this story. The punch line is simple. There we were standing in the middle of the mud, all of us, les paysans. This whole episode was being chaired by the member for Ottawa South. But the problem was they just had a little tent with a little platform and they could not get all the Tories on it. It was either pushing off the Minister of Tourism and Recreation or allowing the Chief Justice on it. So there on the platform is the member for Ottawa South, the chairman of the regional municipality, another good Tory --
The Deputy Speaker: The member is indicating he is worried there was too much government expense according to Bill 43?
Mr. Roy: Exactly. If I am asked whether we should give these people funds to do this sort of thing, I say no. Let me carry on with my list.
Hon. Mr. Bennett: The Premier made full recognition.
Mr. Roy: Yes, he showed a lot of class, a lot more than you did, Claude, baby. You have no class at all.
The Deputy Speaker: Hey, come on. Clean it up.
Mr. Roy: How embarrassing can the process be? There is the chairman of the whole event, there he is in 1983, who five years ago was saying, "There are no votes in courthouses." That is what he was saying five years ago.
Hon. Mr. Bennett: Mr. Speaker, on a point of privilege or clarification: The member drifts quite often; he is as bad as the clouds on a windy day.
Five years ago, I said very clearly that on a scale of priority of one to 10, the courthouse, by the standards of Joe Public in the community, would not be seen as the essential requirement, that this government had an obligation and understood its obligation to provide adequate facilities for the administration of justice. I was delighted to support the program and to be its chairman.
I was pleased to see the member for Ottawa East (Mr. Roy) was in attendance, so the Premier had somebody to aim at and have a little bit of fun with. Indeed, he kept the honourable member down like a little dog.
Mr. Roy: There is an admission on the part of the member for Ottawa South --
The Deputy Speaker: We have a point of order from the member for Essex South.
Mr. Mancini: Mr. Speaker, I am sure if the honourable minister were to reconsider what he just said, he probably would have it withdrawn from the record.
The Deputy Speaker: I did not find anything offensive about it.
Mr. Mancini: I am sorry, Mr. Speaker?
The Deputy Speaker: Neither I nor the member for Ottawa East, who was speaking, found anything offensive --
Mr. Mancini: Let us just assume, Mr. Speaker, that the minister realizes what he said, and let us give him the opportunity to withdraw it.
The Deputy Speaker: I do not have to urge him. Let us get on with the bill. We have had some fun; now back to the bill.
Mr. Roy: I was saying, Mr. Speaker, I am asked as the representative for the good people of Ottawa East, do I give these people more money, do I allow them into the pockets of the taxpayers of Ontario to get some more funds to do the following? That is what they were doing with public funds. They were doing it --
Hon. Mr. Bennett: It is a courthouse for you.
Mr. Roy: The courthouse is fine. It is the obscene flaunting of Toryism at a public function. There was Claude --
The Deputy Speaker: The Minister of Municipal Affairs and Housing.
Mr. Roy: Yes, the member for Ottawa South, introducing the guests --
An hon. member: You had to crash the party.
Mr. Bradley: Are you going to spend a little more money on the platform?
Mr. Roy: That is right. The platform could have been a bit larger. If the member for Ottawa West (Mr. Baetz) did not have good fingernails, he would have fallen off the platform.
Hon. Mr. Bennett: At least he made it to the platform.
Mr. Roy: He made it. As long as you wore blue you were on the platform. That is the thing about the Tories. When they are spending public funds they make it appear as though it is coming out of their own pockets.
Let me talk about the other people on the platform. There was the mayor --
Hon. Miss Stephenson: What is he talking about? Has this anything to do with the bill?
Mr. Roy: It has to do with --
The Acting Speaker Mr. Cousens): We are on Bill 43 and the member is speaking to the bill.
Mr. Roy: That is right. We are talking about abuse of public funds. That is what we are talking about.
Hon. Miss Stephenson: You are abusing public funds.
The Acting Speaker: Order.
Mr. Roy: Thank you, Mr. Speaker. Good. I am very pleased --
The Acting Speaker: And you are speaking to the bill.
Mr. Roy: I am pleased you are in the chair. Finally, I will get these people to order.
The Acting Speaker: If you are speaking to the bill, you can remain on the floor.
Mr. Roy: That is right. So here we have the member for Lanark (Mr. Wiseman) on the platform. It is all legitimate.
Mr. Roy: It is legitimate that he was on the platform. He has a bad memory, but we will forgive him. The member for Ottawa South has bad eyes. He could not see anybody else, but --
Hon. Mr. Wiseman: Mr. Speaker, on a point of privilege: Is the member saying he is opposed to the Ottawa courthouse? He stood up there and took all the praise from his fellow lawyers and the judges. I think he made some statement that he would maybe even go back and practise law in the new courthouse.
Hon. Miss Stephenson: What do you mean "maybe"? He does it three days a week.
The Acting Speaker: I thank the honourable member. I will just draw the attention of the member --
Mr. Conway: If it is good enough for George Kerr, it is good enough for the rest of us.
The Acting Speaker: Order. We are speaking to the bill. I will call the member who had the floor to speak to the bill.
Mr. Roy: I was speaking to the bill.
The Acting Speaker: You were not in the last few words.
Mr. Roy: Yes, Mr. Speaker.
The Acting Speaker: No, you were not.
Mr. Roy: I am talking about abuse of public funds.
The Acting Speaker: No, we are talking about a specific bill.
Mr. Gillies: He is making up for lost time.
Mr. Roy: That is right. I am saying that if there was no abuse of public funds, we would not need an increase. The record shows I was one member who was fighting for the courthouse against the member for Ottawa South who was saying, "No votes" - -
Hon. Mr. Bennett: We succeeded in getting it despite you.
Mr. Roy: "No votes in the courthouse," he used to say.
The Acting Speaker: The member should not persist in talking on subjects other than the bill, which is an income tax bill dealing with the collection of money: you are talking about the spending of it.
Mr. Roy: That is right. I am talking about the spending of it --
The Acting Speaker: Well, talk about the collecting.
Mr. Roy: I am talking about the spending and collecting of public funds.
The Acting Speaker: There are different opportunities to discuss different things.
Mr. Roy: If there was no abuse of public funds, they would not have to collect them.
The Acting Speaker: I have been telling the member to speak to the bill.
Mr. Roy: Mr. Speaker, just to complete the list of the people: The Provincial Secretary for Justice (Mr. Sterling) was on the platform --
The Acting Speaker: Is the member speaking to the bill?
Mr. Roy: Yes.
The Acting Speaker: No, you are not.
Mr. Roy: I am, Mr. Speaker. I am talking about the abuse of public funds.
The Acting Speaker: I say you are not. You will speak to the bill or you will resume your seat.
Mr. Roy: Mr. Speaker, in this bill we are talking about raising additional revenues. What I am trying to say to you, and I am sure you will understand this, is that if there was no abuse of public funds, there would not be the need to raise additional funds from the taxpayers of Ontario. What I am saying, just to complete here, is that the Conservatives, led by the Minister of Municipal Affairs and Housing, last week abused public funds. They are asking us for additional revenues after they have abused public funds; therefore, we oppose this bill, and we are saying we are not going to give them additional revenues to do that.
The Acting Speaker: I ask the member to direct his thoughts more specifically to the bill before us.
Mr. Roy: Mr. Speaker, if you do not quit interrupting me, I will bring you to order.
The Acting Speaker: I ask the member to withdraw that statement.
Mr. Roy: Well, Mr. Speaker --
The Acting Speaker: I am taking this job seriously, and I have asked the member to speak to the bill. You will withdraw that statement. You will not bring the Speaker to order.
The member will withdraw that statement. I have asked the member to withdraw it. Do you withdraw that statement?
Mr. Roy: Yes, I withdraw that statement.
The Acting Speaker: Then speak to the bill.
Mr. Roy: Try to listen to what I am saying. And quit getting carried away --
The Acting Speaker: I have asked the member to speak to the bill. I am giving him a final warning.
Mr. Roy: If you will listen, Mr. Speaker, even you will understand what I am trying to say here. I am saying that when we talk about the collection of public funds, I am entitled to speak about abuse of public funds. The Tories over there are wasting these funds, and I am giving examples of it.
The Acting Speaker: The chair is calling you to order and is calling you to speak to the bill. I am asking you; you are not speaking on the subject of the bill.
Mr. Roy: Mr. Speaker --
The Acting Speaker: As this bill reads, I am unable to see how you are able to deal with the second part of the logic, which has to do with expenditure of moneys. Please deal with the first part of the equation, which is the Income Tax Act, which I have read.
Mr. Martel: You chicken, Mr. Speaker. You let him get away with it. Throw him out.
Mr. Roy: Mr. Speaker, do not listen to the member for Sudbury East, because you are going to get carried away.
I repeat, I am being asked, as a member of the Legislature, to support legislation that will raise additional revenue by imposing additional taxes. When we are talking about increasing taxes, we are entitled to talk about tax expenditures. That is what I am talking about.
The Acting Speaker: I am now telling you for the final time, we are dealing with the collection of taxes, not the spending of them. You may deal with that subject in any way you wish as it lies within the bill.
Mr. Roy: If I may continue without further interruption --
The Acting Speaker: You may continue if you speak to the bill; otherwise, I will ask you to sit down.
Mr. Roy: The second point I want to talk about on this legislation --
Hon. Miss Stephenson: You haven't made the first one yet.
Mr. Roy: Mr. Speaker, I know it is embarrassing to the people over there when I talk about the abuse of public funds, but I, as one member, will not support legislation that attempts to get additional revenues from the taxpayers.
When we attempt, as we have done in the last while, to put questions on the order paper about political appointments, these questions are not answered. That, in my opinion, is another reason for opposing this legislation. When we want to find out how these funds are spent and which friends of the government are getting political appointments, and they refuse to give us that information, that is an abuse of public funds. I will not support additional collection of revenues if the government is not prepared to account for the expenditures of these revenues. That is what I am trying to say and I think it is relevant in the discussion of tax legislation to talk about the abuse of public funds.
In the last while, my colleagues and I have, for instance, put questions on the order paper about the spending of public funds. We have been advised by a number of ministers that we are not going to get answers to these questions, that the only way we are going to get answers to questions on the order paper is by going back to the estimates. In fact, the government refuses to account for the expenditure of these funds. At the same time --
Hon. Miss Stephenson: Absolute nonsense. The government refuses to waste additional money to answer foolish questions.
Mr. Roy: That is exactly the promise --
The Acting Speaker: Order.
Hon. Miss Stephenson: The information is available to you.
Mr. Roy: Mr. Speaker, the Minister of Education has just made my point. She says these questions are irrelevant and a waste of public funds, and she will not answer them. Yet there are standing orders which allow us to put questions on the order paper dealing with the expenditure of public funds, and the government refuses to account for these moneys. People like myself, representatives of the public, will not support additional tax measures if the government is not prepared to account for the expenditure of these funds.
I think before a government can logically come into this place and ask --
The Acting Speaker: Order. I have asked members for order for the last time.
Mr. Martel: How many last times are there?
The Acting Speaker: The good Lord has given us a number of extra times. The honourable member who has the floor is, I hope, speaking to Bill 43.
Mr. Kerrio: Everybody keeps interrupting him.
Mr. Roy: Do not let the member for Sudbury East intimidate you, Mr. Speaker. Do not get caught in a trap --
The Acting Speaker: I ask you to speak to the bill.
Mr. Roy: Do not get caught in that trap.
Mr. R. F. Johnston: Why don't you give a serious contribution?
The Acting Speaker: Order. The member for Ottawa East.
Mr. Roy: The member for Scarborough West has the nerve to ask other members in this place to be serious. He has his nerve.
The Acting Speaker: The Speaker will leave the chair for five minutes to give the House an opportunity to consider what it is doing.
The Acting Speaker suspended proceedings of the House at 9:43 p.m.
The Acting Speaker: Order. We will continue the debate on Bill 43, An Act to amend the Income Tax Act. I recognize the member for Ottawa East, who had the floor.
Mr. Martel: Mr. Speaker, on a point of order: I listened to the bells ring. I have been around here for a number of years and I would like to know under what standing order we just rang the bells for a minute now and we apparently rang them yesterday. I would like to know under what standing order that is occurring.
We simply do not rewrite the rules that we follow around here to suit the occasion. It seems to me that this, in my experience here, is a new rule. I would like to ask the Speaker to explain to me at least, if to no one else, why that bell was necessary under the standing orders as they currently exist. I cannot find it no matter where I look, and I do not think anyone has the right to rewrite the rules without this Legislature approving the writing of new rules.
The Acting Speaker: I thank the member for Sudbury East. There is no desire on the part of the chair to rewrite any rules, and I will bring this to the attention of the Speaker to report back to the House.
The member for Ottawa East is going to speak to Bill 43, and I would like to ask him to do that.
Mr. Roy: Mr. Speaker, as I was saying before I was so rudely interrupted by the government members, we are being asked as members of the Legislature to support a tax measure to collect additional funds from the people of Ontario. Some of us were pointing out that the attempt to collect additional funds is not justified in view of the large abuses of expenditures. I pointed out a number of these abuses of tax expenditures and I think I have pretty well gone through the list.
Some of my colleagues, I know, intend to participate in the debate, and in spite of the interruptions by the members opposite I was attempting, as the chair rose, to complete my remarks about the abuse of public funds. I had pointed out various areas where I think there are abuses, and it seems to me that, given the circumstances I have outlined -- and I am sure the members on the other side of the House would understand this we cannot support additional tax measures as long as the government is not prepared to take more caution in the expenditure of these funds.
I think you will agree, Mr. Speaker, that it would be irresponsible on our part to vote in favour of Bill 43, giving the government the authority to collect additional funds, when, as the guardians of these public funds, they have been abusing them and have been making wasteful expenditures. Given these circumstances, under the leadership of my colleague the member for Rainy River, we will oppose this legislation.
Mr. Cooke: Mr. Speaker, I will take just a couple of minutes. Before I get into the couple of comments I want to make, I think the member for Essex North (Mr. Ruston) should make an amendment to his bill so that the member for Ottawa Whatever gets fined not only for the three days a week he is away but for the two days he is here as well.
I want to make the point that our party obviously feels very strongly about this legislation and about this way of raising taxes. This bill is unfair, it is regressive and the way it was presented in the budget was misleading, to say the least. To try to call this a social service tax and to try to convince the people of this province that this social service tax will go towards the various demands on our social services, which are increased because of the recession -- a recession that was caused by the Liberal government of this nation and the Conservative government of this province -- is misleading, to say the least.
The government has tried to link the social service tax with the health insurance premiums and rationalize it, as they have the health insurance premiums, by trying to deceive the taxpayers of this province into believing it is not really a tax but some kind of special fund that is being paid by the taxpayers to help those who are less fortunate. It is absolutely ridiculous to think that single people in this province earning $7,500 are going to have to pay this tax, or that a family earning $12,500 is going to have to pay this tax when both of those types of individuals or income earners would be exempt from paying premiums in this province because it is recognized that their incomes are too low.
The other afternoon in question period the Minister of Revenue tried to justify this tax by saying it was progressive because it is a flat rate and, therefore, the more one pays in one's basic Ontario income tax, the more one is going to pay in this surcharge. That is the kind of economics and taxation policy we are hearing from the extreme right wing in the United States.
It is not a fair tax. Any flat-rate taxation is not a progressive tax; it is a regressive tax. That has been the problem with sales tax in this province and with the Ontario health insurance plan premiums, and it is the problem with this new tax being introduced by this government.
The Acting Speaker: All honourable members, the background conversations are really very distracting and I am sure they are distracting as well to the member for Windsor-Riverside. I would ask that these other conversations be reduced or stopped.
Mr. Cooke: The other point is that when this tax is combined with other tax increases in this budget, like the OHIP premiums, it means that for every dollar being pumped back into the economy through the one new exemption in sales tax, $6 is being taken out. Not only is this new tax unfair, it is ridiculous economics and will have a negative effect on the economy and will result in fewer jobs or a loss of jobs.
There is one point which I do not believe has been made by any other speaker on this bill so far. Last year when Bill 179 was introduced, the rationale for that bill by the Treasurer and the Premier was that those people who are working have to share in the cost of the recession. That nursing home worker or that health care worker has been restricted to a five per cent increase in his or her wages in order to help fund or reduce the expenses of this government to pay for the extra cost of this recession or depression.
These are very low income earners, such as those in the health care field and other areas of the government. We know the average wage of the provincial employee is below $20,000. The nursing home worker who makes $8,000 or $9,000 a year, in addition to having his or her wages frozen at a five per cent limit of increase, now has to pay this regressive five per cent surcharge on tax. This person is, as the government would say, "contributing in two ways to fight the evils of this recession and help pay the cost or shoulder the burden."
We in this party feel those people on low and middle incomes have already shouldered enough of the burden of this recession. We have put forward proposals for reforming the taxation system. Those people who have investment incomes, for example, those people who get capital gains in this province, pay tax only on 50 per cent of the capital gains. Surely, if we are interested in equality and equity, that tax should he examined and a dollar earned should be considered a dollar available for tax, whether it is a capital gain or income.
That is the kind of reform we should be looking at in order to raise the needed revenue to pay for the increased demand for the social welfare system. Instead, this government decides to dream up this five per cent surcharge that it would have us believe will go into a pot for the welfare costs of this province and that it also would have us believe will be equitably distributed among those people who need it. It is nonsense. It is unfair. It is an economic policy that will have negative effects on jobs and individuals and we in this party intend to oppose it.
We are pleased the government has accepted our proposal to refer this matter to committee where we can have some people come before the committee and indicate the effects on low-income earners in this province.
We hope and pray this government will see the light as it did on a couple of the areas of the sales tax it introduced last year. Before this bill receives royal assent, perhaps it will decide it is unfair even for a right-wing Tory government of which the Minister of Revenue is a part. Maybe it can withdraw this tax before it is implemented and will accept the amendment we will be putting forward in committee to put this tax on the people who can afford to pay, those with an income of $40,000 and above.
Mr. Boudria: Mr. Speaker, I would like to speak very briefly on this bill as the Community and Social Services critic for our party. I think it is very important to remind ourselves of the alleged purpose the government has given for the collection of this tax. They have chosen to call it a social assistance maintenance temporary surtax, and there are very many things in all of this that have to be questioned.
The first is the aspect of referring to a tax as a social assistance tax. The principle of blaming the poor, the needy, the elderly, the sole-support parent and all of those other recipients of social assistance as being responsible for the fact that the government has to collect such a tax is insidious in nature.
If nothing else, although we cannot propose an amendment to this bill in so far as the title is concerned, I urge the government at least to change the title of this bill and its alleged purpose to refer to its true meaning, which is, of course --
Mr. Bradley: The Suncor tax.
Mr. Boudria: -- the Suncor tax, or the government mismanagement tax --
Mr. Bradley: That's even better.
Mr. Nixon: The Minaki tax.
Mr. Boudria: -- the Minaki tax --
Mr. Bradley: Advertising.
Mr. Boudria: -- or the advertising tax. Or why not call it the John White inappropriate vision surtax? The $93 million it is costing this year for the interest on Suncor does not warrant a name for a tax. Then why is it deemed necessary with this particular raising of revenue to require that it be called a social assistance surtax?
I would like to draw to the attention of all honourable members that on page 27 of the program and resource summary of the 1983-84 estimates of the Ministry of Community and Social Services, in the financial summary page under income maintenance -- and I draw this to members' attention because it is very important -- is given the actual amount spent on general welfare assistance and family benefits. Last year it was $1.28 billion and this year it is $1.84 billion.
Mr. Speaker, I am sure you have already come to the conclusion that this increase is only $55 million. Then why is the government raising $170 million with the alleged purpose of spending this on social assistance? That is totally wrongheaded. The government is in fact making statements to the people of this province that some of us may think are not quite as accurate as they could be, to put it kindly. I could put it more strongly, but perhaps you would not tolerate any stronger language to express the same thing, Mr. Speaker.
May I remind members of a certain document issued a number of years ago, which was called A Charter for Ontario: Dedication. This was commonly referred to as the Brampton charter, and I have it here in front of me. Many people will remember that it was fashionable at one time for some people -- not all of us -- to think that if nothing else, this government at least was able to manage funds. The recent fiascos of the trust industry, in managing the budgetary deficit and so on and so forth, certainly express to each and every one of us that if anyone ever thought this government had the ability to do such a thing as manage funds properly, it has long since lost it. They seem to have lost it when the present Premier came to office.
Let me refresh your memory, Mr. Speaker, on section 9 of the Brampton charter. I wonder if the member for Ottawa South, who hands out cheques to the Minister of Education, has something to say on the subject. Item 9 of the Brampton charter, I want the member for Ottawa South to know, states, "A commitment to containing the size and expense of government in Ontario, resulting in a balanced budget by 1981." This is from a government that claims to be able to manage funds properly in this province.
I see the very concerned Provincial Secretary for Social Development (Mrs. Birch) is here in this Legislature --
Mr. Boudria: She is from Leamington. There is one redeeming factor.
Mr. Speaker, I want you to know the following. Here is another part of the Brampton charter that says, "The opportunity must be maintained for all who legitimately seek greater participation, such as native people, women and the handicapped, so that all in Ontario share a common heritage to the right to pursue personal fulfilment."
Does that include taxing the poor? Is that a way to achieve personal fulfilment for all in this province, according to the immortal words of the Brampton charter? Is that how equity is achieved in this province? Is that the view of this government of how to assist the underprivileged, the people who have a hard time making ends meet right now?
As the member for Scarborough West and others have asked, how can the government expect those people to buy a new refrigerator, dining room set or whatever with the reduction of other taxes, when it is taking away the very dollars they had in their own pockets in the beginning, if they had any extra dollars to spend on such things as new furniture?
In most cases, Mr. Speaker, as you will undoubtedly know, speaking to your constituents in the very impartial way you do as the Speaker, your constituents at the lower-income level can least afford to pay a surtax, and many of them will have to pay this surtax.
Members know this tax will be paid by people at the low-income level. Not only are we taxing the people at the lower-income level who are gainfully employed, but we are leading them erroneously to believe they have to pay this surtax in order to assist their friends who are unemployed and on social assistance.
As I have previously stated, and as members are undoubtedly aware, that is not the case. Only $55 million of the extra $170 million being levied in this "temporary social assistance maintenance surtax" will ever go towards that purpose.
I will wrap up very briefly because I know that we --
Mr. Nixon: The minister wants to speak.
Mr. Boudria: The Minister of Revenue, who is also known as the sidekick to the Treasurer, would like to speak and sum up on this bill.
We as a party not only oppose this bill but also the principle of raising the tax and calling it the social assistance surtax when it is really because of the mismanagement of this government. A surtax is insidious. It should never have been done and the minister knows it deep inside.
If he had his way, if he were unleashed, if he were capable and free, I am sure he would immediately at least change the name of that surtax and the income amount at which it is to be collected so the people who can afford it would pay, rather than those who cannot, with the purpose of raising it for other people and blaming the poor people of this province for having to raise that tax.
Hon. Mr. Ashe: Mr. Speaker, there are quite a few items I would like to put on the record. Unfortunately, with the limited time that has been left to me because certain people chose to wander off the subject, I will cover only a couple of points that I think bear correcting on the record.
First, it is frankly very disappointing to me to find the misconception of a member who is usually very well briefed and intelligent, the member for Rainy River, on how the tax works. He really does believe -- and I find this unbelievable -- that the surtax is an addition to the existing provincial tax.
He expressed it very plainly, that this year the tax rate goes up to 50.5 per cent, next year to 53 per cent; obviously a complete misunderstanding of the bill. I find that very difficult to believe from that honourable member. From some I might; from him, frankly, I do not.
Mr. T. P. Reid: What is it going to do?
Hon. Mr. Ashe: It does not work that way at all. It just goes to show how people can bend the truth to suit their own satisfaction.
First, the way it does work, as I am sure at least the members on this side know, is the actual surtax is on the tax, not an addition to the tax rate. In other words, even if one excludes the base exemption of taxes of $110.80 in terms of percentage, the true increase this year is two and one half per cent of 48, which is 1.2 per cent, bringing the rate to 49.2 per cent, excluding the fact that really it is less than that effectively because there is an exemption on the first $110.80 of tax. Similarly, in 1984, of course, it really is an additional 2.4 per cent or 50.4, again if one excludes that there really is a base which effectively makes it less.
Even with the temporary surtax -- and the bill is very specific that it is temporary; it is for the year 1983 and the year 1984 -- it still leaves only two provinces in Canada with an effective tax rate that is lower than that in Ontario. Those, as we know --
Mr. Cooke: How many have OHIP premiums?
Mr. Speaker: Order.
Hon. Mr. Ashe: -- are British Columbia and Alberta.
Mr. Martel: You are distorting the facts.
Mr. Speaker: Order.
Hon. Mr. Ashe: I also want to correct a misconception brought forth I would suggest by the member for Oshawa. He compared OHIP premiums as they relate to health costs with the revenues that come into the consolidated revenue fund and the specific earmarking of it for social services or whatever.
As the member knows, we do operate on a consolidated revenue fund system where funds are not earmarked. If he wants to relate to OHIP costs, of course, he is well aware that even the OHIP premiums cover less than one fifth of the total cost of the health care system. If he wanted to earmark OHIP premiums per Se, we would be spending one fifth of what we do spend on this great health care system in Ontario.
It is only fair also to put on the record the facts of our relationship and our collection agreement with the federal government. The member for Brant-Oxford-Norfolk -- and all areas around there -- talked about transfer payments and how it was the great and generous government in Ottawa that in actual fact paid some 44 per cent of our total revenues.
Let him put it into proper perspective. The transfer payments that come out of the federal coffers to Ontario amount to about 17 per cent of our revenues. We also have a collection agreement with them. He is trying to play both sides against the middle again. He holds up a great big, thick book and asks why we should not have our personal income tax system; at the same time he tries to suggest that when the feds are collecting it for us, it really is magnanimously given back to us with no strings attached. Quite rightly, it is our money.
Mr. Nixon: They collect it for you.
Mr. Speaker: Order.
Hon. Mr. Ashe: Of those moneys, 27 per cent is our own; 17 per cent is transfer payments. At the same time, 43 per cent of the total revenues of the federal government comes out of the taxpayers of Ontario, so what happens to all the rest?
In any event, I do want to thank him for his comments relating to myself in terms of the overall system within Ontario.
I would have liked to have touched on many more subjects and many more incorrect statements that were made. We will have an opportunity to do so at another time.
I have one last thing, as I see I have eight seconds. Let us talk about this low-income earner. The person with $5,000 taxable income will pay a grand total of something less than 25 cents per week for the last six months of 1983. The person who has a taxable income of $20,000 will pay $1.60 a week for six months. I do not think that is going to break the bank of anybody.
Mr. Boudria: You sound like a cable television commercial.
Mr. Speaker: Order.
Mr. Kerrio: What about the straw that breaks the camel's back?
Mr. Speaker: Mr. Ashe has moved second reading of Bill 38. Is it the pleasure of the House the motion carry?
Mr. Kerrio: No way.
Mr. Boudria: Absolutely not.
Mr. Martel: It is not the right bill.
Mr. Speaker: I thought we were taking them in order.
Mr. Speaker: My information was that we were going to run through them in progression, but apparently we are not. I will correct that.
Mr. Ashe has moved second reading of Bill 43. Is it the pleasure of the House the motion carry?
CORPORATIONS TAX AMENDMENT ACT (CONCLUDED)
The House divided on Hon. Mr. Ashe's motion for second reading of Bill 38, which was agreed to on the following vote:
Allen, Andrewes, Ashe, Baetz, Barlow, Bennett, Bernier, Birch, Brandt, Breaugh, Bryden, Cassidy, Charlton, Cooke, Cousens, Cureatz, Davis, Dean, Di Santo, Drea, Eaton, Eves, Fish, Foulds, Gillies, Gordon, Grande, Gregory, Grossman, Harris, Henderson, Hennessy, Hodgson, Johnson, J. M., Johnston, R. F., Jones;
Kells, Kennedy, Kerr, Kolyn, Lane, Leluk, Lupusella, MacQuarrie, Mackenzie, Martel, McCaffrey, McCague, McClellan, McLean, McMurtry, McNeil, Miller, F. S., Mitchell, Norton, Philip, Piché, Pollock, Pope, Rae, Ramsay, Robinson, Rotenberg, Runciman;
Samis, Scrivener, Sheppard, Shymko, Stephenson, B. M., Stevenson, K. R., Stokes, Swart, Taylor, G. W., Taylor, J. A., Timbrell, Treleaven, Villeneuve, Walker, Watson, Wells, Wildman, Williams, Wiseman, Yakabuski.
Boudria, Bradley, Breithaupt, Conway, Copps, Cunningham, Eakins, Edighoffer, Elston, Epp, Kerrio, Mancini, McGuigan, McKessock, Miller, G. I., Newman, Nixon, O'Neil, Peterson, Reed, J. A., Reid, T. P., Riddell, Roy, Ruprecht, Ruston, Spensieri, Sweeney, Van Horne, Worton, Wrye.
Ayes, 84; nays 30.
Bill ordered for third reading.
ONTARIO LOAN ACT (CONCLUDED)
The House divided on Hon. F. S. Miller's motion for second reading of Bill 34, which was agreed to on the following vote:
Andrewes, Ashe, Baetz, Barlow, Bennett, Bernier, Birch, Brandt, Cousens, Cureatz, Davis, Dean, Drea, Eaton, Eves, Fish, Gillies, Gordon, Gregory, Grossman, Harris, Henderson, Hennessy, Hodgson, Johnson, J. M., Jones, Kells, Kennedy, Kerr, Kolyn, Lane, Leluk, MacQuarrie, McCaffrey, McCague, McLean, McMurtry, McNeil;
Miller, F. S., Mitchell, Norton, Piché, Pollock, Pope, Ramsay, Robinson, Rotenberg, Runciman, Scrivener, Sheppard, Shymko, Stephenson, B. M., Stevenson, K. R., Taylor, G. W., Taylor, J. A., Timbrell, Treleaven, Villeneuve, Walker, Watson, Wells, Williams, Wiseman, Yakabuski.
Allen, Boudria, Bradley, Breaugh, Breithaupt, Bryden, Cassidy, Charlton, Conway, Cooke, Copps, Cunningham, Di Santo, Eakins, Edighoffer, Elston, Epp, Foulds, Grande, Johnston, R. F., Kerrio, Lupusella, Mackenzie, Mancini, Martel, McClellan;
MeGuigan, McKessock, Miller, G. I., Newman, Nixon, O'Neil, Peterson, Philip, Rae, Reed, J. A., Reid, T. P., Riddell, Roy, Ruprecht, Ruston, Samis, Spensieri, Stokes, Swart, Sweeney, Van Horne, Wildman, Worton, Wrye.
Ayes 64; nays 50.
Bill ordered for committee of the whole House.
INCOME TAX AMENDMENT ACT (CONCLUDED)
The House divided on Hon. Mr. Ashe's motion for second reading of Bill 43, which was agreed to on the same vote.
Hon. Mr. Wells moved that Bill 43, An Act to amend the Income Tax Act, be referred to the standing committee on general government for public hearings and clause-by-clause consideration on Monday afternoon, June 6, and Tuesday, June 7, in the afternoon and evening, with the bill to be reported by June 9 for third reading.
Motion agreed to.
Mr. Speaker: It being past 10:30 of the clock, I would advise all honourable members that the notice pursuant to standing order 28, for the member for Prescott-Russell (Mr. Boudria), will be debated at 10:30 p.m. on Thursday next.
This House stands adjourned until two of the clock on Thursday next.
Mr. Speaker: Order.
Mr. Van Horne: Mr. Speaker, the government House leader announced to us last week that on June 9 -- is that the date we are talking about, Thursday next?
Mr. Speaker: No; Thursday next is the day after tomorrow.
Mr. Van Horne: Okay. Sorry about that.
The House adjourned at 10:46 p.m.