The House met at 2 p.m.
STATEMENTS BY THE MINISTRY
Hon. Mr. Leluk: Mr. Speaker, I am pleased today to provide the House with details of my ministry's plans for participation in the government's job creation initiative, announced by my colleague the Treasurer (Mr. F. S. Miller) in his budget of May 10. As honourable members know, the board of industrial leadership is co-ordinating the acceleration of these projects, which are targeted for regions of the province with high levels of unemployment.
Mr. McClellan: That's "leadership and development." You didn't even get the name right.
Hon. Mr. Leluk: It's all good news. Just listen.
The province expects that 12,000 jobs will be created over a two-year period. The cost of the program is $246.8 million, of which Ontario is contributing $167.5 million.
Honourable members are already aware that the Ministry of Correctional Services is currently experiencing overcrowding in many of its correctional institutions. The ministry's response to the need for additional accommodation space has been to develop both long-term and short-term accommodation plans.
The long-term plan addresses ways of responding to the accommodation and program needs of institutions to the end of the century and includes new capital projects such as a 500-bed detention centre in the Golden Horseshoe area.
The short-term plan identifies capital projects that can be undertaken quickly to provide additional accommodation, bearing in mind factors such as security and value for dollar. The projects proposed in the plan focus on the need for additional higher-security bed spaces and more long-stay accommodation. It should also be kept in mind that in order to increase institutional capacity, the upgrading of support services and program capabilities is usually required as well.
The funds provided in the budget by the accelerated capital building program will allow us to undertake a number of the projects that had been designated in our short-term accommodation plan. Some of the projects will use the prefabricated steel security units designed by my ministry. One such unit is currently being installed at the Peterborough Jail.
My ministry will spend its allotment of $16.5 million on 10 projects at correctional institutions across the province. These projects are expected to create approximately 16,475 man-weeks of employment. They will also produce about 525 new beds over the next two-year period, which will help alleviate the overcrowding in our correctional institutions.
The largest of these projects will be the construction of a new $6.5-million unit for female offenders adjacent to the Metropolitan Toronto West Detention Centre in Etobicoke. This new unit will provide up to 175 beds as well as improved facilities for women being held in custody in Metro on remand or serving relatively short sentences.
The opening of this unit will clear the way for conversion of the present women's unit at the centre into an additional facility for male inmates. The conversion will provide space for 120 male inmates, which will help to relieve overcrowding in the Metro Toronto area institutions.
Two other projects will provide additional beds in longer-term correctional facilities. This will help to ease the overcrowding situation by reducing the number of inmates in jails and detention centres awaiting transfer to longer-term institutions.
At Maplehurst correctional centre in Milton, $375,000 will be used to convert unused space to dormitory accommodation. This project will provide a total of 78 beds.
A major change in the orientation of the Rideau correctional centre at Burritt's Rapids will be undertaken. This $2.75-million project would involve the conversion of part of Rideau from minimum to medium security. Alterations will be made to the support services area and additional program space will be provided for longer-stay inmates. The project will provide 105 new beds.
An $800,000 project at the Brantford Jail will increase accommodation by 30 beds in an institution which consistently operates at levels above capacity.
The Sault Ste. Marie Jail is severely overcrowded, and a $2.6-million project at this institution will provide 40 additional beds. In addition, there will be an expansion of program space and an upgrading of the existing building.
Projects with a total value of close to $1 million will be undertaken at three eastern Ontario jails. A total of 30 beds will be added by the installation in unused exercise yards of 10-bed units at each of the jails in Brockville, Pembroke and Cornwall. The value of the projects at Brockville and Pembroke will be $300,000 each and the project at Cornwall will cost $350,000.
A $1.8-million expansion of the Sudbury Jail will provide 40 additional beds and increase program space to meet the needs of a constantly increasing population.
A $750,000 project at the Kenora Jail will provide 30 additional beds to alleviate overcrowding at that institution.
In summary, the 10 projects outlined will meet two objectives. They will provide much-needed employment across the province and, at the same time, will reduce overcrowding in correctional institutions.
CONSTRUCTION INDUSTRY DISPUTE
Mr. Peterson: Mr. Speaker, in the absence of the Big Blue Machine -- I gather they are still sulking -- I will ask a question of the Minister of Labour.
Will the Minister of Labour be good enough to bring this House up to date on the problems that have developed between the Labourers' International Union of North America, Local 183, and the United Brotherhood of Carpenters and Joiners of America, Local 1190, which has resulted in some violence, arson and fires in the past few days. Obviously, there is a fight developing. Could the minister bring this House up to date on the role of his ministry, what he is doing about it and what steps he is taking to prevent violence?
Hon. Mr. Ramsay: Mr. Speaker, attempts had been made earlier to establish a mediation process in this dispute. Those attempts proved to be unsuccessful until today, when we have arranged for a meeting at the Holiday Inn in Yorkdale at 10 a.m. on Wednesday of this week.
Mr. Peterson: The minister is probably familiar with a telegram of today's date from Mike J. Reilly, secretary-treasurer of Labourers Local 183, to Mr. Carruthers of Carpenters Local 1190. I will excerpt part of that telegram because I find it very disturbing in tone.
"We will not put up with any further threats from your goon squads. It is our intention in the next few days to call upon our 8,000-member organization to give the necessary support on projects in order to allow our members to fulfil all our contractual obligations."
Could the minister tell this House if he has made any special arrangement with respect to security on a variety of job sites? I am sure the minister knows about them, but he also knows there were fires in Whitby, Oshawa, Scarborough and Markham, and there are certainly suggestions of escalating violence. What plans does he have in conjunction with his colleague the Solicitor General (Mr. G. W. Taylor), and perhaps the Attorney General (Mr. McMurtry) as well, to make sure there is absolutely no escalation in property damage or any possibility of personal harm?
Hon. Mr. Ramsay: I am not aware of the telegram from which the Leader of the Opposition has read portions. I am aware of the seriousness of the situation, and I want to assure him that all appropriate steps to try to resolve this matter have been taken and will continue to be taken.
Mr. Wrye: Mr. Speaker, in the light of this telegram, in the light of the incidents of arson my leader has enunciated, in the light of the fact that several years ago we had so much difficulty we ended up having a royal commission under Judge Waisberg look at certain sectors of the building industry, I wonder if the minister could be a little more forthcoming with the House and do other than state that he believes it is a serious situation and he has some kind of meeting set up for Wednesday morning.
Could the minister be a little more forthcoming as to exactly what he is doing in view of the seriousness and the escalating situation, which I think he would agree has escalated rapidly in the last seven days?
Hon. Mr. Ramsay: Mr. Speaker, I have perhaps purposely been a little evasive in my responses, but it is for a good reason. It is a very sensitive situation and I do not want to inflame it by making any comments or statements here, other than that we are very much aware of it, we are very much on top of it and we are hoping to find a resolution shortly.
TOXIC WASTE DISPOSAL
Mr. Peterson: Mr. Speaker, I have a question for the Minister of the Environment with respect to his statement of noble intentions today, his Blueprint for Waste Management, which is disturbingly similar to other statements of his ministry and his predecessors in the past.
Given the minister's renewed, presumably serious commitment that he has made to new methods of handling waste management, why is he even considering in his ministry an application by the city of Detroit to mix its sludge with the chemical waste on Fighting Island in a so-called reclamation program of dubious value? Why is the minister even considering that, knowing as he does of the preliminary evidence in that regard and the great potential harm that could wreak in that area?
Hon. Mr. Norton: Excuse me, Mr. Speaker, but I am suffering a little today from a hoarse throat.
Mr. T. P. Reid: The best news of the day.
Hon. Mr. Grossman: It may take longer than usual today.
Hon. Mr. Norton: I knew it would make the member opposite feel better if he thought I was suffering.
I am not sure what preliminary evidence the honourable member is referring to with regard to the sludge disposal proposal. As he is well aware, under the responsibility of my ministry, we have a piece of legislation known as the Environmental Assessment Act. This particular project has been designated as coming within the purview of that legislation and all the issues relating to environmental impact will be fully explored through that process.
If the member is suggesting that, prior to any appropriate consideration at all being given to a project, we should cast it aside out of hand, then frankly I do not think that is an appropriate way to operate. If there are indications in the course of the environmental assessment proceedings that it would create an environmental problem or potentially do so, surely that would be the time to deal with those issues.
Mr. Peterson: What I am suggesting to the minister is he is wasting his time, his money and his energy even entertaining this application to take sewage from a major industrial city that is not even within his jurisdiction.
Is the minister aware of the Environment Canada information on that particular matter which says, "Based on an application rate of 1,600 dry tons of Detroit sludge per acre, Fighting Island would receive the following: 5.05 kilograms of mercury per hectare, 1,590 kilograms of lead per hectare, 2,600 kilograms of cadmium and 303 kilograms of arsenic"?
This information is already at his disposal. It also states, "The natural soil detoxification process required to absorb and break down chemicals in the Detroit sludge does not exist in Fighting Island as a result of earlier US waste dumping there."
Does the minister not think his Blueprint for Waste Management loses credibility when he allows such dubious applications and the concomitant waste of time, energy and money he is going to spend finding out that it is the wrong thing to do?
Hon. Mr. Norton: Once again, I am aware of the data the member suggests, but I think that is appropriate information to be considered if the proponent wishes to go through the environmental assessment process, knowing the risks that are involved with regard to ultimate approval or rejection of the proposal. I think they ought to be entitled, the same as anyone else, to go through that process. The data may well lead to a rejection, but at this point I am not prepared to discard the data out of hand without giving them full consideration if it is their wish to proceed.
Mr. Elston: Mr. Speaker, I would ask the minister why there has not been more open co-operation between his ministry and the ministry officials of Environment Canada when it has come down to the time to have an in-depth and very serious study of the effects of the dumping of the sludge on Fighting Island, the sludge to contain mercury, lead, cadmium, arsenic and many other contaminants? Why did his ministry not co-operate more fully with Environment Canada to deal with this problem of environmental assessment as early as February 1982 when the first report was made internally in Environment Canada about the effects of this sludge?
Hon. Mr. Norton: Mr. Speaker, in terms of lack of co-operation, I do not know what the member is referring to. I am not aware, it has not been communicated to me either by my staff or anyone in Environment Canada, that there is anything remotely describable as lack of co-operation between our two staffs. That is true on a myriad of programs across the province.
There certainly are some indications from time to time of lack of co-operation on the part of the federal government, but I would not normally attribute that to the staff of the Ministry of the Environment at the federal level.
FAMILY LAW REFORM
Mr. Rae: Mr. Speaker, in the absence of the Attorney General (Mr. McMurtry), I have a question for the Minister responsible for Women's Issues, who is engaged in a private conversation. I would appreciate it if he could perhaps field this question.
I know the minister will be aware of this, because it concerns family law reform, and it concerns the very real problem that literally thousands of women are having in this province with respect to the enforcement of court orders and other problems they are having getting appropriate support from their spouse.
The Globe and Mail has recently quoted a lawyer in the Ministry of the Attorney General as saying that under planned revisions, a nonjudicial procedure is planned under which a spouse can go to the court office and request a regular automatic deduction from the earnings or the pension of his or her ex-spouse.
Can the minister confirm that such an amendment is in fact being planned which would relate both to earnings and to pensions? If it is being planned, can he tell us why it is being delayed until next year? If the decision has been made with the Ministry of the Attorney General to go ahead with this amendment, why is it delayed until next year to implement it?
Hon. Mr. Welch: Mr. Speaker, as far as I understand in my consultations and conversations with the Attorney General, he has some plans along that particular line. He would he best able to tell the member about the timetable in connection with that and I will certainly draw that to his attention. I do confirm that those matters are under active consideration. I cannot respond with respect to the timing.
Mr. Rae: I am a little surprised at that answer, because the minister will know there is about $42 million that is currently in arrears that has not been paid to spouses. I would have thought the Minister responsible for Women's Issues would be on top of that and would be aware of whether amendments would be forthcoming or not.
Mr. Speaker: Question, please.
Mr. Rae: Can the minister tell us when the amendment will be presented to the House which will provide a degree of justice for spouses, many of whom are at present forced to go on welfare? In particular, can he tell us whether the government plans to move in order to allow an attachment relating to pensions and registered retirement savings plans, which, as the minister will know, are currently excluded from the permissible orders at the family court both in relation to family law and divorce matters? Can he tell us whether it will relate to pensions and can he tell us when it is coming in?
Hon. Mr. Welch: The supplementary simply reworks the original question. As the Minister responsible for Women's Issues, I attach a very high importance to this. Indeed, as a former Attorney General, I can understand and support the concerns that the honourable member has underlined in his question. I am not able to speak to the timetable, because the Attorney General wanted an opportunity to review some matters.
I thought when the member was starting with his question he was making some reference to the problems we now have with orders under the Family Law Reform Act, because of the jurisdictional problems in so far as who appoints the judges is concerned; I know the Attorney General has that in hand as well. But certainly from the standpoint of maintenance orders, the member knows that if he were to take a look at the history of the enforcement in matters not necessarily related to these excluded items, there has been some progress.
I could not agree with the member more that every effort should be made to make sure these orders and maintenance payments are in fact paid, and I know the Attorney General attaches a very high priority to it. He will be in a better position to speak to this timetable in that regard.
Mr. Peterson: Mr. Speaker, the minister is aware, as am I, of individual cases that took up to a year and a half to get before the courts for the enforcement of these orders. Given the fact that it is universally recognized as being a problem, and given the fact that it is clogging the courts and is not very effective in its current form, would the minister use his good offices to persuade the Attorney General to bring in those amendments in this session? I am sure that speedy passage could be arranged, and we will go on and solve a problem that has been inequitable and unfair for some great number of years now.
Hon. Mr. Welch: Mr. Speaker, now that the question has been raised in the House and it is on my agenda, I certainly will speak to the Attorney General. I think all of us as individuals find it somewhat repugnant that taxpayers have to move in and look after the shortfall in these matters when there are some orders out there that should be enforced. Everything that can be done should be done with respect to the enforcement of these orders; there is no question about it.
Ms. Bryden: Mr. Speaker, my leader has drawn to the attention of the Minister responsible for Women's Issues one serious inadequacy in the Family Law Reform Act. Is the minister aware of the many other inadequacies in the Family Law Reform Act that have come to light during the five years since it was proclaimed? Will the minister indicate his position on my resolution on the order paper calling for the appointment of a select committee to hold public hearings on the working of the act, so that amendments can be brought in that will deal with cases such as the Leatherdale, Stoimenov and Adams cases, and that will ensure that the act fulfils its objective, namely to recognize the equal position of spouses as individuals within marriage and to recognize marriage as a form of partnership?
Hon. Mr. Welch: Mr. Speaker, I do not know that we have --
Mr. Speaker: Just before you proceed, if you will, I would like to ask the co-operation of all members not to hold private conversations in the chamber.
Hon. Mr. Welch: I am not so sure we really need a select committee to address those problems. As the honourable member will know, the Ontario Status of Women Council has already put forward some recommendations that I feel could correct the situation to which the member has made reference. I have already had a preliminary meeting with the Attorney General with respect to the changes that will be necessary to accommodate and overcome some of the problems of the case to which she refers, and other meetings are now scheduled to see what some of the implications are to it.
All I am saying is that we now have some specific recommendations before us, to which we can give some active consideration and on which we can move, subject to whatever qualifications are necessary with respect to the concern and consideration being given by the Attorney General.
As I say, the Attorney General and I have already discussed this, and we have another meeting scheduled very shortly to follow up those preliminary discussions.
Mr. Rae: Mr. Speaker, my question is for the Minister of Consumer and Commercial Relations who I am delighted to see has just walked into the House. My question concerns those thousands of Ontarians who are locked into fixed-term mortgages at rates that are very high indeed -- 17, 18 and 19 per cent. In many instances, these people are not even able to pay a penalty in order to get out of those fixed-rate mortgages.
Is the minister aware of the number of Ontarians who are in this position? I refer to those who are trapped in fixed-rate mortgages, are unable to pay a penalty and in many cases are even unable to pay an interest rate differential. As the minister knows this is a very high penalty indeed.
Is he prepared to call in the presidents of the major lending institutions in this province to discuss some relief for them? Will he ask whether it would not be in the best interest of fairness for everybody to introduce a standard procedure whereby those home owners who are caught in this mortgage trap would be able to renegotiate mortgages at reasonable rates? I think these rates should reflect the existing interest rate structure in this province.
Hon. Mr. Elgie: Mr. Speaker, I do not think this is a matter in which there are sides to the issue. I do not think the member meant to imply that. For a long period of time, particularly last year, we all had many concerns about the credit union movement, the banks and the trust industry with respect to the mismatch of their deposits and their outstanding loan obligations and the difficulties they were all encountering.
The member and I both know, as do other members of this House, it is not uncommon to have included in a mortgage the right to prepay certain amounts on a regular basis or on the basis of some penalty to renegotiate the loan. I know that in asking me if I would be prepared to meet with the trust company association, for instance, he is not suggesting I should advise trust companies or any other lending institutions to create a mismatch. That was the very problem credit unions and many other lenders faced.
The suggestion that we should tell lending institutions to get into a mismatch situation that created the desperate problems many of them faced not too long ago would be most inappropriate and I know it is not what the member is suggesting. However, if he is suggesting there be some discussions about the feasibility of a standard arrangement with respect to prepaying that did not jeopardize the financial situation of those institutions, I am certainly always prepared to have those discussions.
Mr. Rae: Whatever financial problems there may have been a year or two ago in the trust company and credit union industries with respect to the mismatch problem -- and we all know what that problem was -- the minister will be aware from discussions with principals in the financial field that the problem has by and large been resolved.
Mr. Speaker: Question, please.
Mr. Rae: May I just give one instance to the minister, Mr. Speaker? The Toronto Dominion Bank has put forward a chart comparing 1981 and 1982 with respect to those loans that are interest rate sensitive after one year. It shows assets at $4.41 billion and interest rate liabilities at $2.44 billion. So the minister will see that in this instance -- and I think he will find in most others -- there is no mismatch problem today.
In light of that and the fact that many consumers signed mortgages not knowing the extent of the trap or the difficulties they would have in getting out of those long-term, fixed-rate mortgages, will the minister please call in the heads of these institutions? Will he simply say to them, "You fellows are in a better position to bear the burden of this windfall than the many home owners out there who are facing real difficulty"? Would the minister please do that and give some hope to those many thousands of Ontarians who are caught in a trap and who are in a very difficult situation indeed?
Hon. Mr. Elgie: So that a quotation read in this House is not interpreted as applying to all lenders, let me say that the leader of the third party has quoted from a bank statement when, as he knows full well, banks probably supply a bare minority portion of the mortgages in this province that people are facing problems with in respect to interest rates.
Let us all understand we are talking about a lot of individuals who sold their homes and took back mortgages. Is the member asking me to meet with all of them as well? We are also talking about credit unions, some of which have had considerable difficulty in the past; surely he is not asking me to tell them to put themselves in jeopardy?
As he well knows too, there were trust companies that were having a number of problems with respect to mismatch. He also knows that banking does not come under this ministry, although certainly I am always willing to consider the feasibility of rational suggestions that anyone can undertake any discussions with another person about problems facing consumers.
Mr. T. P. Reid: Mr. Speaker, surely the minister realizes that part of the problem is not with the banks and the credit unions but with the insurance companies and other financial institutions. Does he not think they have a responsibility in that many of them gave advice to their clients or customers to take out three-year and five-year term mortgages at the higher rate? Therefore, they bear responsibility for the advice they gave to the consumer who obviously looked to them for some expertise in this field.
Hon. Mr. Elgie: Mr. Speaker, there were a number of situations that faced individuals who had taken out mortgages. As members know, many had clauses in their mortgages which allowed them to prepay or pay a penalty. In other situations, there were claims that there had been a verbal agreement and there are several legal actions under way at the present time in respect to those verbal agreements.
As the member will know, having consulted with the legal people in his party, there has been a recent decision in the British Columbia Supreme Court indicating that advice wrongly given gives a cause of action to the person who wrongly receives that advice. There are a number of actions that individuals can take if they feel there has been some contractual wrongdoing.
What we are talking about here is the general philosophy and issue. As I said, I am prepared to consider the feasibility of such discussions. If I come to the conclusion there could be some merit in it, certainly I am prepared to have some discussions.
Mr. Rae: Without wanting to prejudge the course of those discussions, I wonder if the minister would consider the fact that federal legislation in this field never got off the ground. He knows that full well. A mortgage is a standard contract that is covered by provincial law and consumer protection is the responsibility of his ministry.
Given the fact that a mortgage agreement is a standard form contract and that unless something is done a great many people are going to be suffering some real financial hardships, would the minister not consider amending the Mortgages Act or introducing a special consumer protection bill that would impose a standard term in every mortgage contract allowing every mortgagee in this province to pay a penalty of two or three months in order to take the benefit of changing interest rates?
Hon. Mr. Elgie: With the greatest of respect, I think the member knows the Mortgages Act does not come under my jurisdiction. Certainly the other remarks I have made in response to questions by the leader of the third party still stand.
Mr. Bradley: Mr. Speaker, I have a question for the Minister of Education regarding her policy on computers in the classroom, a policy which members will recall we have indicated many doubts about. We believe she should be involved in software instead of hardware.
The minister originally announced that microcomputers for the classroom would be available for 1982. These computers will be built by the Cemcorp consortium. The minister is now promising Cemcorp computers to the classrooms for September of 1984.
As the minister knows, Cemcorp is being managed by Meridian Technologies. In view of the fact that Meridian and its wholly owned subsidiary Microdesign Ltd. lost a $6-million contract in 1981-82 through failure to deliver on time and at cost, and that this track record raises doubts about the consortium's ability to produce the minister's dream machine, what substantial assurances are there at this time that the promises from the ministry and manufacturer will be met?
Hon. Miss Stephenson: Mr. Speaker, Cemcorp is a consortium of which the primary manufacturing agent is indeed Meridian. It is my understanding that the circumstances which were in place at the time the previous difficulty arose no longer prevail within the structure of the consortium that has been established.
The machine is not my dream machine. It is a second generation computer with specific classroom capabilities and a machine which is child-proof. I think this is a fairly essential feature for anything which is going to be exposed on a daily basis to children in schools within this province. The design was not developed by the Ministry of Education.
Hon. Miss Stephenson: If the member for Prescott-Russell (Mr. Boudria) would just be quiet for a moment, he might hear the rest of this.
The machine was not designed by the Ministry of Education. It was designed by educators with the help of computer scientists, and those with great experience in the field from the Canadian Advanced Technology Association. It is not a Johnny-come-lately and it is not something that has been dreamed up out of the air. It is a very real proposal which at the current time has a successfully operating bench prototype and the manufacturer is in the process of developing the prototypes which will be distributed to the schools this fall.
It is my understanding that if the honourable member continues to be the doubting Thomas, the guy who really does not want to see what is going on in this province, he does not need to bother attending Future Pod in August of this year, at which time, I am informed, there will be prototypes of the machine available for his perusal and examination by others.
Mr. Newman: Mr. Speaker, I am sure the minister is aware that back in the city of Windsor there is a company that has been producing computers for quite some time now. It is Advanced Business Computer Systems International Inc. Its computer meets the specifications set down by her ministry to the extent of approximately 95 per cent. The company likewise now produces the software for Wayne County Community College as well as Henry Ford Community College in the United States. Why would this company not have been considered when the minister was considering someone to provide her with the software as well as the computers?
Hon. Miss Stephenson: Mr. Speaker, it is my understanding that all the companies with any capacity for production in Ontario, and indeed in Canada, were approached and invited to participate in this activity. A significant number of them declined to do so. Whether that specific company was approached I cannot tell the member, but I am informed that many of them were. The specifications are perceived to be necessary --
Mr. Newman: Table the information.
Hon. Miss Stephenson: I will be glad to table the specifications and then all the members can look at them.
The specifications are perceived to be necessary for the purposes for which this computer has been developed, and that is a computer with the capability for compatibility of programming and flexibility either to stand alone or to be networked into a larger system. That propensity is certainly there within a number of computers currently being produced. All they have to do is to adapt the additional five per cent and they will be eligible for the support which was announced.
I would remind the honourable members the support is this: $2 million was provided as a Board of Industrial Leadership and Development grant to Cemcorp to begin the function of organizing its structure in order to be able to arrange the production of the machine. That is all they have had and that is all they are going to get. If their prototypes do not function, the additional $8-million purchase will not take place.
Any machine which meets the provincial specification will be subsidized to the tune of 75 per cent of the cost, as we announced in 1982. That will happen provided the machines meet the total specifications, not 95, 92, or 96 per cent, but 100 per cent.
Mr. Renwick: Mr. Speaker, my question is for the Minister of Correctional Services. In his statement today with respect to short-term capital projects, he refers again to his long-term plan to construct a 500-bed detention centre in the Golden Horseshoe area.
Before proceeding with this capital project for 500 additional beds in the Golden Horseshoe area, will the minister appoint a task force to be headed by an outstanding figure from the area of the voluntary agencies concerned about correctional matters and have representatives from his ministry and from other concerned organizations and from the detention centre guards, in order to assess and determine whether or not it is now necessary to consider this rather abrupt method of dealing with the detention problems in this area?
Hon. Mr. Leluk: Mr. Speaker, my answer to the member for Riverdale is no.
Mr. Renwick: By way of a supplementary question and in line with the stubborn approach taken by the minister, would he do the House the courtesy of tabling in this assembly any studies or background papers which have led him to the conclusion that it would be necessary to have an additional 500-bed facility in this area for detention purposes?
Hon. Mr. Leluk: The answer again is no. I have full confidence in my staff to determine whether or not there is a need.
GOVERNMENT POLICY ON UNIONS
Mr. Van Horne: Mr. Speaker, I wish to ask the Minister of Labour about the case of London Local 1059 of the Labourers' International and the issue of union democracy at the lower or local level. When this matter was last raised in the House it was left by the minister and the ministry in the consultative stage with no hope held out to either the London union affected or union locals generally that there would be legislative change. That was in February 1983.
Since then, correspondence has been exchanged between the union players involved and the Ministry of Labour, and a hearing by the international executive was conducted on May 10, 1983, concerned with the original charges which gave rise to the disqualification.
Is the minister now ready to propose some policy recommendations in the area of supervision of trusteeships by an international over a local -- such recommendations, for example, as we find in the Waisberg report? Recommendation 9 specifically deals with validating trusteeships imposed by a parent union. Is the minister ready now to make some kind of policy recommendations in this area of supervision of trusteeships by an international?
Hon. Mr. Ramsay: Mr. Speaker, first of all, I would like the member for London North to know there has been a great deal of time and effort put into the investigating and the hearing of various opinions and soliciting information and so on in respect to Local 1059 in London, including the opportunity for his own leader and the opportunity for representatives of the New Democratic Party to have their opinions heard and studied and assessed.
I suppose the short answer to the member's question is that after all of this consultation, and there has been considerable, we have decided that at least for the time being it would be inappropriate to introduce any changes.
Mr. Wrye: Mr. Speaker, considering that he and his ministry have had an extensive discussion on this matter, I am sure the minister is aware that the outcome of the hearing we are waiting for has really already been predetermined. As recently as February 1983, Mr. Ugo Rossini of the executive board of the Labourers' International -- which as the minister knows is the very body which conducted the hearing -- stated, and I quote:
"The London local's objection to the election had been overruled by the international body and the local simply has to live with that decision. That is democratic. If they do not like it, they should go to the next international
election in 1985 and vote against the current officers." This from the London Free Press on February 12, 1983.
The minister may not be offended by this kind of a patronizing attitude, but I am. It seems to me the union and the other locals need the minister's assistance. If he will not consider the amendment which this party proposed in the winter, will he at least consider the amendment proposed by the Ontario Building Trades Council in February 1983; and if not, why not?
Hon. Mr. Ramsay: Mr. Speaker, we have not closed the door on the matter. I want to make that abundantly clear, but as I said to the original question, at this time we just do not feel it would be appropriate to take any steps such as have been suggested by the opposition.
GOVERNMENT AND THE ARTS
Mr. Allen: Mr. Speaker, I have a question for the Minister of Citizenship and Culture. The minister no doubt is aware that the Macaulay committee on the arts has begun mailing questionnaires to various Ontario arts groups, but he may not be aware that the first mailings went out over three weeks ago to the largest centrally placed arts groups in Ontario, like the Canadian Opera Company, while small arts groups have waited until late last week to receive theirs.
In my own community, even the Hamilton Philharmonic and the Dundas School of Fine Arts did not receive their mailings, with a deadline of July 15 for extensive questionnaires on statistical data and for answers to very large, global questions that the ministry wished the committee to pose to the arts community. A deadline of July 15 gives five short weeks for hard-pressed arts organizations at this time of the year, some of them losing their volunteer support, others rushing into the busiest time of their activities.
Will the minister not concede that his rush-order timetable for the Macaulay committee is already making some mockery of the assurance that both he and Mr. Macaulay have given on occasions that the committee would listen extensively and fairly to the arts community in the province and that no pride of place would be given to the larger and the centrally placed arts organizations in this province?
Hon. Mr. McCaffrey: Mr. Speaker, that is an extensive question. If I may respond first to the observation my friend makes that this is a rush-order committee, let me make it clear -- I think Mr. Macaulay made it clear when given the opportunity to do so -- that the deadline we had set for the Macaulay committee -- nine months, which would take it through to November -- was a flexible period. From the time the committee was announced Mr. Macaulay and I -- and we discussed it at a press conference in this building -- indicated that we would talk in the spring and summer and see if more time was required. So we are not wedded to that nine-month investigation.
More particularly, the member is quite right when he says that the areas we are investigating through the committee are complex, and to that end we have, in consultation with the committee, provided each of the groups, large and small, with a form, not to replace any private or individual observations they may have on funding but rather to assist them in dealing with these relatively complex matters.
The forms are designed to assist individual artists or any of the individual organizations, large or small, that may wish to respond. We are aware, as I say, of the amount of work and we are sensitive to the summer period and what it means for the arts and other organizations; and if they are under any extra duress because of the summer hearings, we will be sensitive to that -- and so, most important, will the committee.
Mr. Allen: It is always reassuring to note there is some latitude in the timetable deadlines that are set. None the less, it is evident that the deadline has been read by the committee in a rather rush-order fashion, in that we notice the committee was busy setting deadlines at a time when it did not even have a complete list of all the arts groups in the province.
For example, when the umbrella committee for the arts in the province approached it, it was not even recognized by members of the secretariat; and at the very time when the deadline was being set screenings were being undertaken for public relations positions, which seemed rather irrelevant to the task immediately at hand.
Mr. Speaker: Question, please.
Mr. Allen: Would the minister please assure us that he is willing to extend not only the major deadline for the committee's operation but also the deadline of July 15, inasmuch as five short weeks for most of those groups is indeed an inadequate length of time to handle not only the statistical data the minister wishes to collect from them but also the answers to those very large, difficult, global questions that have been put to them?
Hon. Mr. McCaffrey: With regard to the insensitivity -- that may not be the exact word, but it certainly reflects the view -- of this committee to the arts community, I want to respond to that and in particular borrow a sentence from my friend the member for Hamilton West's June 3 open letter to me about the preoccupation we have, in his view, with "so early a deadline when mailing lists are still incomplete." Further, he talked about the secretariat being "so unfamiliar with the field."
I think that is a monstrous disservice and slap in the face to the Assistant Deputy Minister of Culture of our ministry, Mr. Doug McCullough, who I can say without fear of contradiction is the most respected and knowledgeable cultural leader in the country. He is that same Mr. Doug McCullough who is on a full-time assignment working with the Macaulay committee as its committee secretary. Nobody in this country is more familiar with the growing number of small and large arts organizations in the province.
As to our ability to alter or deal with the July 15 date, in the same way as we deal in every other matter with this constituency of ours it will be given full consideration.
Mr. O'Neil: Mr. Speaker, the minister may recall there was some concern when we had the estimates as to where this committee would be travelling across the province and what groups it would be hearing from. When the minister is talking about extending the date for this questionnaire, I wonder if it might be possible for him to let the members of this Legislature know where the committee plans to travel and whether it is still open for further suggestions from the members of this Legislature. In other words, the committee members might be prepared to go to different areas, whether north, east, south or west, to hear further briefs in some of the smaller communities across the province.
Hon. Mr. McCaffrey: Mr. Speaker, the answer to that is yes. This is a public committee, spending public money to make inquiries into an important matter of public concern. Where the members will meet will not be a secret. The meetings will themselves be public. We have already indicated that the committee has advised us of some of its public meetings.
I do want to make it clear to my friend the member for Quinte that we were determined, having seen a recent federal study into the area of the arts and culture, not to have a duplication of that effort. We were not anxious to have a committee work for two or three years. In our view we could deal with it relatively quickly, that is not to say 12 months as opposed to nine months, and have these public hearings in a variety of communities throughout the province. That was a commitment made by Mr. Macaulay before the estimates. I will make certain this exchange in Hansard is relayed to the committee; and most assuredly, where it is going to meet will be made public.
I think it is incumbent upon those of us with an interest in the arts to make sure constituents in our immediate areas are aware of that timetable. I will make it available as soon as I have it.
ONTARIO MUNICIPAL BOARD DECISION
Mr. Epp: Mr. Speaker, I have a question of the Minister of Municipal Affairs and Housing. The minister is aware of the annexation dispute between Vespra township and the city of Barrie. He is probably also aware of the inadequate decision of the Ontario Municipal Board in 1977, which required that a new set of hearings be held.
All parties involved had agreed that the new round of hearings would be held in two stages, the first of which was to resolve procedural issues and the second was to consider the case on its merits. Could the minister tell us how it is possible for the OMB to have made a decision on the annexation itself after having heard only the first part and not having heard any representations from residents of either community?
Hon. Mr. Bennett: Mr. Speaker, at this very time we are asking our people to review the decision that was released by the OMB. Indeed, we are having some further discussions with the municipalities involved. I do not think this is the appropriate time to try and get into a controversy about it because it is still at the municipal level and the OMB, and they have a right to have that review, as the member knows.
Mr. Epp: I am very much surprised by the minister's response, given the fact that in a letter dated May 5, 1983, to Mr. Paul Warner, president of the Residents Against Vespra Exploitation, of which 700 to 800 copies were distributed to residents in Vespra township and some may even have been destined for residents of Barrie, he stated:
"In response to the city's request and its delineation of the lands it now seeks to annex, the board has scheduled a formal hearing for May 24 in the board's chambers in Toronto. At that time the board will consider representations from legal counsel on the procedural issues raised by Barrie's request. Once argument on these issues has concluded the board will adjourn the hearing, make known its decision on procedure and set a date for hearing of the application on its merit. Both Barrie and Vespra township and all other interested parties will be given notice of this two-stage hearing and afforded the opportunity to be represented and heard in a public forum before any decision is made."
How can the minister, having written this letter, not take any positive steps to try to rectify the situation and let the people of Vespra township and Barrie have representation at a future hearing?
Hon. Mr. Bennett: I have very little to add to the original answer. The member is very honest and sincere, and I think he will agree the ministry is not in any way trying to point the OMB to a particular decision. I said to the member very clearly we intended to have further discussions and we will do so. I am never going to stand in this House and say I have directed the OMB to take a certain action. His party would find it very opportune to criticize the government for doing that.
GRANTS TO MUNICIPALITIES
Mr. Breaugh: Mr. Speaker, I also have a question for the Minister of Municipal Affairs and Housing. The minister knows his staff had prepared a discussion paper on changes in the basis for unconditional grants from a per capita basis to a per household basis. What is the status of that policy decision? It has been reviewed by representatives of the Association of Municipalities of Ontario. I would like to know whether the government has made a decision on whether it will implement that change; and if so, when?
Hon. Mr. Bennett: Mr. Speaker, the member started out by asking about a position paper. It was one that was sent to the association to have reviewed. There was no government position on it at all. It contained suggestions to try to reform the grant formulas to municipalities.
For some time AMO, and indeed most municipalities, had clearly indicated it was time to try to find a more simplified formula in giving back provincial funding to the municipalities. They wanted it on a basis that was easily understood by the citizens, the elected officials and all those involved in the program of fund allocation to municipalities.
It is nothing but that -- a paper sent to AMO for some input. Whether they agreed or disagree with the suggestions, it would be their position. I hope if they do not agree with it they will make some alternative suggestions. I would like them to point out areas we can look at both from their point of view and ours.
Mr. Breaugh: I am still at a loss as to whether or not that is a position paper by the ministry that espouses a policy or something that is about to become a policy.
I would like to ask the minister a secondary question on the same matter. One of the major concerns seems to be that whatever change might take place there will be a fluctuation in the actual dollar amount in grants for many municipalities. In places such as Kirkland Lake and throughout the Durhams they are looking at an estimated loss of income, probably in the order of $1 million to $3 million. It is income they cannot do very much about because streets have to be ploughed and sewers have to be maintained.
In the discussion paper most of the municipalities cannot find any transition period or any proposals the ministry would put forward to ease that rather sudden shock. Since the ministry put together the discussion paper, has it prepared any concepts about transition periods?
Hon. Mr. Bennett: I want to emphasize again the paper is entirely a discussion paper. It is not a policy position of the government. It was to give an opportunity for some further input by AMO and its members into what they think might be a workable grant formula between the province and the municipalities.
I realize the mayor of Kirkland Lake and one or two others have made some remarks relating to the amount of dollars they could potentially lose. I am not sure how they make those calculations because they have never submitted them to us. But in fairness to this government, in correcting or changing grant formulas and programs we have always implemented a transitional position so that municipalities that might suffer as a result of a change of formula are cushioned against that shock to their tax position. We have always done that and this would be no exception to the rule.
I want to emphasize that we are looking at a way to try to give a greater degree of stability and a sound way of easing municipalities into knowing what their grant position will be on an annual basis.
In conclusion, we have looked at the per capita grant versus the per living unit grant. I thought most municipalities were of the opinion the per living unit grant was more realistic. This was particularly because the declining population per household unit would seem to make it better to do it by the unit rather than per capita. We will look at it all. I hope there will be some input, maybe even from members of the New Democratic Party as to what they think might be a better formula.
HALDIMAND-NORFOLK LANDFILL SITE
Mr. G. I. Miller: Mr. Speaker, I have a question for the Minister of the Environment. The minister is aware that 350 tons of waste catalysts from the Texaco oil refinery were put in the Haldimand-Norfolk landfill site. Can the minister assure the residents of Springvale and area that their drinking water from shallow, spring-fed wells will not be affected by the waste catalysts in the local dump? Is the minister satisfied this material should be put in a local landfill site?
Hon. Mr. Norton: Mr. Speaker, to make sure I am responding to the question properly, is the member referring to the Tom Howe site? Is it the one where concern was expressed about nickel levels in the material that was placed on the site?
Mr. G. I. Miller: That is right.
Hon. Mr. Norton: Thank you. On the basis of the assessment that was done in consultation with both our ministry staff and the regional staff responsible for the site, the information I have is that it is safe.
There was testing on the material prior to its going into the site, as I understand it. The levels of nickel, an area where specific concern has been expressed, were such as to be viewed as harmless and very substantially below the federal guidelines for nickel.
The confusion I think has arisen in part as a result of some comments by one Joseph Cummins. We have pursued his remarks as reported in the media and had some experts in the field check out the comment about a safe range of three to six parts per billion or something. There is no evidence from any expert opinion that confirms his comments, if they were accurately reported. In fact he is several hundredfold out from the experts. They even checked one of his known favourite sources, a book written by a New England university professor. Even that favourite-source book of his did not provide confirmation.
Mr. G. I. Miller: What special monitoring system is in place to assure the people of the area the water is actually safe and their drinking water protected?
Hon. Mr. Norton: As I pointed out, Mr. Speaker, there have been tests done on the material to determine what leaching could take place from it.
Talking about the nickel, I think the figures Joseph Cummins used were that three to 10 parts per billion was the safe range. By comparison, Coca-Cola, tea and coffee have about 100 parts per million -- very substantially higher than the leachate that would go off that site.
So if no one has said they are good for one, on the other hand when they are all prepared to advise their constituents to give up Coca-Cola, coffee and tea, then they can tell them there is a problem with the landfill site.
Mr. Samis: Mr. Speaker, I have a question for the Minister of Tourism. I trust the member for Kingston and the Islands (Mr. Norton) has not acquired any form of Mulroneyitis since the weekend. My question deals with the --
Mr. Samis: I know he supported another candidate. We all know that.
Mr. Speaker: Question, please.
Mr. Samis: My question is to the minister regarding the plans --
Hon. Mr. Norton: Mr. Speaker, on a point of privilege: The honourable member has suggested I would support anyone other than my federal leader. I want him to know that is entirely incorrect. I am nothing if not loyal. and I hereby express my loyalty to my new federal leader.
Mr. Samis: I am glad to see the minister is a good loser. My question is --
Mr. Speaker: Order.
Mr. Samis: If I can ever get it in, my question is for the minister regarding the fears in eastern Ontario that his ministry is embarking upon another Minaki Lodge at Morrisburg. What reassurance can the minister give to people in eastern Ontario that his ministry is not going to construct another Minaki, especially in view of a quote from the Cornwall newspaper, "If you like accommodations with a fireplace in every room, the option of your own whirlpool and a gourmet menu of indigenous game, the chance to play tennis under a bubble and you do not mind paying $77 a night, Morrisburg could be the place to stay in 1985"?
That has the Minaki ring to it. How does he reassure the people of eastern Ontario he is not going to do it again? How much money is the minister talking about in terms of the Morrisburg project?
Hon. Mr. Baetz: Mr. Speaker, in view of the clock, will you give me permission to answer that question properly?
Mr. Speaker: That is up to the members.
Hon. Mr. Baetz: You will.
Mr. Speaker: Yes, they will.
Hon. Mr. Baetz: We cannot answer that properly with a simple yes or no. The member for Cornwall has just read from the Cornwall weekly or daily. I happened to read an article in the Ottawa Citizen today that quoted the member for Cornwall at length. I regretted seeing that article because I was sorry the member did not accept my invitation to the press conference where we released a voluminous report. It went into great detail.
Mr. Samis: Right here.
Hon. Mr. Baetz: I see he has it now. I am sorry he did not get to that press conference where he would have received answers to a lot of the questions he was raising here today.
I am really surprised the member for Cornwall would be taking the kind of stance he took in the Ottawa Citizen. There he appeared to debunk efforts for tourism in his own part of Ontario. If the member would have taken the time and trouble to look at the statistics he would have found that tourism is an incredibly competitive business today, that one can never stand still and the way to go is to build the kind of establishment recommended in this expert report.
The member wants to be the big debunker. He wants to say nothing is possible. I would urge him to read that report thoroughly and honestly. Then he will come to the conclusion the feasibility study came to which, in effect, said the competition for this proposed resort hotel does not lie with the motels and hotels in that area. It lies with the resort hotels in western Quebec and, even more important, across the river in the United States of America.
Mr. Samis: We do not want a Minaki.
Mr. Wildman: How much?
Hon. Mr. Baetz: If the member and his region do not want to compete and enhance tourism in that part of the world, I do. We are going to take this report and work on it.
CONVERSION OF RENTAL UNITS
Mr. Ruprecht: Mr. Speaker, I have another petition about the conversion of apartments to hotel accommodation. It reads:
"To the Honourable the Lieutenant Governor and the Legislative Assembly of Ontario:
We, the undersigned, beg leave to petition the Parliament of Ontario that the Minister of Consumer and Commercial Relations take immediate steps to protect us against unscrupulous landlords who evict tenants in order to create furnished hotel-like suites. This change not only eliminates valuable rental accommodation but these hotel-like suites will destroy our community by creating giant flophouses in our neighbourhoods."
Mr. Speaker, I present this to you and I hope it reaches the Minister of Consumer and Commercial Relations (Mr. Elgie).
INTRODUCTION OF BILLS
CITY OF TORONTO ACT
Mr. Shymko moved, seconded by Mr. Brandt, first reading of Bill Pr36, An Act respecting the City of Toronto.
Motion agreed to.
ONTARIO ASSOCIATION OF LANDSCAPE ARCHITECTS ACT
Mrs. Scrivener moved, seconded by Mr. Harris, first reading of Bill Pr37, An Act respecting the Ontario Association of Landscape Architects.
Motion agreed to.
CITY OF HAMILTON ACT
Mr. Charlton moved, seconded by Mr. Wildman, first reading of Bill Pr15, An Act respecting the City of Hamilton.
Motion agreed to.
ORDERS OF THE DAY
House in committee of supply.
ESTIMATES, MINISTRY OF REVENUE (CONTINUED)
Mr. Chairman: Order, please. The federal Progressive Conservative convention was won or lost on the floor of the Civic Centre in Ottawa. Shall we continue with greater and
better things, the estimates of the Ministry of Revenue?
Mr. Conway: I would rather think the convention --
Mr. Chairman: Could someone refresh my memory of what we were or were not doing?
Mr. Chairman: The member for Oshawa (Mr. Breaugh) last had the floor but it looks as if he is not present at this time. Is anyone in the mood to speak?
Mr. T. P. Reid: Mr. Chairman, probably if you like --
Mr. Bradley: Ask the minister whom he supported.
Mr. T. P. Reid: Perhaps we should ask the minister whom he supported. I suspect it was a combination of Neil Fraser and John Gamble.
On vote 801, ministry administration program:
Mr. T. P. Reid: Mr. Chairman, I have a number of questions. I presume we can ask anything on vote 801 rather than going down them.
I know somewhere in the briefing book there is an analysis of the number of people we are dealing with. I have a question concerning salaries for the head office people because I was doing a little computation. It seems to me the number of civil servants in most of the votes that come under the various branches of administration are either staying roughly the same or changing very little either up or down. Yet the increase in the estimates for salaries has increased, in one case more than 10 per cent. Can the minister assure us the salaries and increases in what are commonly called fringe benefits are adhering to the six and five?
Hon. Mr. Ashe: I can assure the honourable member that is not only so but we even have absorbed a net decrease. Last year's estimates do not include the annual salary awards made subsequently, although I understand this is traditional. If one adjusts last year's estimates to include the awards, our increase is even slightly less. In true terms -- if one wants to put it that way -- in terms of manpower funds, we have actually absorbed a decrease of something in the order of $600,000 net. In other words, the salary awards added to last year do not equal this year's estimates. The figure is slightly less.
Mr. T. P. Reid: Under item 4 of vote 801 there has been a budget increase of about $21,000 in analysis and planning. Under item 9 there is also something called systems development services. In reading the briefing material provided I realize there is a substantial difference between the two. However, it seems to me the two of them would and should go together. I am sure the minister will tell me that in effect there really is no duplication, but if we add those two together we see that more than $2 million is allocated to what probably should be one function.
A second point: the minister will recall that his deputy, Mr. Russell, appeared before the public accounts committee at Mr. Russell's request. He asked for such a meeting because he felt a special review requested by public accounts and done under the auspices of the Provincial Auditor was somewhat critical of his administration.
I presume the $1,406,700 deals primarily with new technology and computer systems and I hope the minister will confirm that. I wonder if he could address himself to analysis and planning, items four and nine and my remarks thereto, and expand particularly on what the taxpayers are getting under those two items.
Hon. Mr. Ashe: First of all let me get to the first item: why analysis and planning, which is vote 801, item 4, and systems development services, item 9, are not together. It is because they have two very distinct functions.
Item 9 is our management systems branch, delivering professional computer services -- the building, if you will, of the technology and the programs relating to the total ministry. Some of this, as the honourable member knows, is in turn recovered. That is why there is a substantial number in recoveries of this investment; but it is the development process.
One of the reasons for the actual increase in dollars here without having any increase in the numbers of people is the bringing on stream of unfilled, approved positions. There is not a full complement over the total period last year. We hope we are more up to complement now with the recruiting that has been taking place. If we are closer to complement there will not be the shortfall between the estimates and the actuals this year.
Analysis and planning is a group that is substantially smaller. There is a grand total of 14 full-time people in the estimates planned this year; compared with 15, including an unclassified staff member, last year. The group is in the budget control aspects of the ministry: the budget process design and policy analysis for our annual resource planning. It is involved in the estimates preparation that we are going through now, in-year monitoring of financial manpower and operating plans and the design of new planning forecasting information and control systems.
They are not as technically involved in the actual creation of plans, though no doubt there is an ongoing dialogue between these two important groups. I guess you could say analysis and planning come up with some of the balls, so to speak. Then when new programs are required that involve electronic data processing, it is up to systems development services to come up with programs that are technically feasible and do the job and work.
I think it is extremely important to clear up the differences of opinion between the ministry, particularly the deputy, and the item with the Provincial Auditor. I know the honourable member is chairman of the committee that oversaw this particular difference. He will draw his own conclusions about the evidence presented, but I think the long and the short of it is that the record of the ministry with respect to electronic data processing and developing new systems can stand on its own merits and I do not think it needs any apologies.
I hope a very useful purpose came out of that dialogue in front of the committee. I hope it pointed out to the Provincial Auditor it may really be his own department that is not technically geared. I appreciate that he too has financial constraints, but he may not have the capability to rule on the technical competence of that kind of system.
I understand from reading the transcript of the committee discussions that even the auditor ultimately acknowledged on the record that our ministry does go by the rules in virtually all instances where a normal process would work. In other words, there was a difference of opinion only where there was some deviation from the administration manual, when the ministry had to react quickly to a new program or a change in implementing a budget, when the paperwork had to fall into place a little after the fact. Under the normal development of systems a normal and regular procedure was followed in virtually all cases.
Mr. T. P. Reid: Mr. Chairman, that is all very nice. I think most people who were there would admit that Mr. Russell is a very capable and competent individual. However, Mr. Russell made comments to the effect that if what he wanted to do -- or perhaps, to be fair, needed to do -- conflicted with the manual of administration then he would do what was necessary, disregarding the manual of administration.
Mr. Russell also led us to believe there was some consultation with Management Board about any, shall we say deviation from the manual of administration. Yet it does not seem as if the ministry does check with Management Board when it has to come up with programs -- for instance, to implement the new tax measures brought in by the budget of the Treasurer (Mr. F. S. Miller).
I speak only as a member of that committee but I personally would like to see the operation of the Ministry of Revenue -- the computer aspect as well as the general administration -- actually put down in some kind of manual of administration. The deputy minister, Mr. Russell, said all of this was available, that it was in this manual and that manual, and we had a great presentation.
I know he meant well, but Mr. Russell performed what I call the old Ontario Hydro trick. This is where someone comes in and inundates us with so many facts and figures and reports and studies that the mind simply boggles after awhile. People tend to throw up their hands and say, "Well, if you say it is all there I guess it is."
But if, heaven forbid, anything happens to Mr. Russell, or if, for instance, he sees his way clear to go to Ottawa under the next administration, whatever that be, those who either follow or stay will not have a fairly clear blueprint. One gets the feeling that Mr. Russell's personal style of management is one of very strong leadership. This suits sometimes, but does not always provide for those who come after or those who might have to take over if there is an emergency or something of that nature.
In any case, I leave that to the minister. I would like to ask him, under vote 801 -- particularly items 4 and 9 but under any of the 10 items -- if any outside consultants are hired, and if so what are the costs and what do they come from.
While his staff is getting that information for him I would refer again to the briefing book. The minister talks about his classified and unclassified staff. Could he give us the numbers of unclassified staff for this year and tell us whether that figure has increased over last year?
Well; is this a moment's silence for Joe Clark?
Mr. Samis: Not from that side; we can see quite a few happy faces.
Hon. Mr. Ashe: That is right.
Hon. Mr. Ashe: Mr. Chairman, I think it only appropriate, before we go on to the honourable member's question, that we should once again put on the record the business of the Provincial Auditor's report on electronic data processing within the ministry.
There is a reference made that, if the deputy minister were not there with his style, would the place collapse? Let me assure the member that is not the case. First, there is a strong management team in the Ministry of Revenue; and not only, we hope, some strong leadership. There is no doubt that from time to time I frankly think the deputy's perspective and point of view is not too dissimilar to my own, in that if there is something to be done and it has to be done quickly one gets it done and puts it in the right perspective afterwards.
For example, if we have a budget to implement at midnight tonight, it is rather difficult to be setting it down as the book speaks, and have approval three weeks from now for something that should have been done at midnight tonight.
I think it only fair to suggest the Provincial Auditor recognized that and this was right in front of the member's committee: "As far as Mr. Reid's specific questions are concerned about the involvement and the concern of Management Board" -- to which he made specific reference -- "in the conduct of an audit, it is really one of compliance to make sure in the areas affected that any Management Board directives, policies or guidelines in the Ontario Manual of Administration that affect EDP are complied with. In some cases we recognize those policies may not be applied and it is really a technical violation. Mr. Russell made reference to that several times this morning. We would agree with that." That comes from the Provincial Auditor. "In such cases we attempt to point out the violation and suggest that possibly the Management Board directive needs to be revised."
I think what he is saying is that we are right; under the strict interpretation of Management Board guidelines we are technically wrong, but that is all.
Mr. T. P. Reid: Morally right.
Hon. Mr. Ashe: Morally right; right in a practical sense, and possibly, temporarily, technically wrong.
Back to the latter questions about whether we employ, from time to time, outside consultants in the system's development services: the answer to that is yes, we do.
The identification of those funds is under the program vote 801, item 9, under the heading services, 1983-84 estimates, $13,438,200. This is in that particular area.
In terms of people we do, as I say, hire consultants on a contract basis from time to time, usually for specific programs; sometimes on their own, at other times working with their own people. In terms of the actual full-time staff within the systems development service, as the honourable member can see on page 2 of vote 801, item 9, there is no change in either the permanent staff or in the anticipated number of unclassified staff; but this does not include, of course, the outside contract groups that are being referred to. I am trying to get the specific numbers involved in that and I will have them for him momentarily.
Mr. T. P. Reid: Did I understand the minister to say the entire $13,438,200 is not all consultant fees? The minister does not have to do it now but would it be possible for him to provide us with a list of the names of the consultants, with what tasks they performed and the costs?
There is another question I have in that regard: is there always a written, prepared tender emanating from his ministry? Or is he going the proposal system way, in which the deputy or whoever is in charge of this aspect of his ministry says: "We are thinking of doing something in this line? Would you give us a proposal and then we will pick and choose?" How is the tendering done for these kinds of contracts?
Hon. Mr. Ashe: I am advised it is quite normal to do it both ways. If it is a very small project, it may be by inviting a particular quote to complete a relatively minor task. Any major proposals are by tender and anyone can come forward and participate. I presume that as part of that process they would have to prove their capability of performing the task at hand.
Mr. T. P. Reid: Is the minister going to provide me with a list?
Hon. Mr. Ashe: Yes.
Mr. T. P. Reid: Thank you. I will ask one more question and then let someone else have a chance.
I want to clarify that when I was speaking about the deputy minister's appearance before the standing committee on public accounts I was on a little different wicket than that covered by the response the minister gave. I was talking about the overall direction of the ministry, not just that relating to computer services.
In any case, I want to ask about section 5, financial services. The briefing material says, "Stewardship of public funds (up to $3 million in accountable advances)." I would like to ask what that entails.
The other question for now relates to item 8, communications services. Under that I would like to know whether the ministry has any outside consultants. How many people are involved in that particular aspect? I am sorry; I think I can find that from the tables provided.
I would like to know what part of that is in-house and what part is out-house. Is that the correct word, Mr. Chairman? I could not resist that. The services component of that is $33,100. I would like to know if that, again, is related to consulting fees or contract work.
Hon. Mr. Ashe: What page was that?
Mr. T. P. Reid: Activity 8, financial data.
Hon. Mr. Ashe: I am having some difficulty identifying what we are talking about. Vote 801, item 5 is financial services. Are we talking about vote 801, item 5, which is where the member started?
Mr. T. P. Reid: Yes.
Hon. Mr. Ashe: Then the member is talking about vote 801, item 8, communications services.
Mr. T. P. Reid: Right; now the minister has it.
Hon. Mr. Ashe: Fine. The member's question relating to communications services is, what is the $33,100 under the heading of services?
Mr. T. P. Reid: Yes.
Hon. Mr. Ashe: Answering the first question relating to financial data, this is all internal. It is an internal control. Basically, the reference to the stewardship of public funds of up to $3 million in accountable advances is that one of the responsibilities of the financial services group is to account for all advances made within the ministry for travel expenses and other related expense claims, which often involve advances to the particular people involved, for which, of course, they have to submit claims forms, vouchers and so on afterwards.
The rather substantial figure of $3 million came about lately, particularly in the assessment division of the ministry where there was considerable movement last year; in fact, here in Metropolitan Toronto, where a lot of assessors were brought in from outside areas and received advances which, of course, had to be followed up to be accounted for. So this is completely an internal operation within the ministry.
Now, in vote 801, item 8, communication services --
Mr. T. P. Reid: Is all that money recovered?
Hon. Mr. Ashe: Yes. If at any time there happens to be -- and it can happen on occasion, frankly -- a person who upon termination for whatever reason has an outstanding advance that had not been accounted for, if that is not accounted for by his termination date we have the opportunity to deduct it from other funds, including salary, that would he owing to him.
Communication services include consultation, advice, audio and video taping, slide shows, overheads and equipment setup. Services also include consultation, advice, equipment training, processing, enlarging, photography -- that is all in that area -- and design concepts to camera-ready art, production, supervision for publications, posters, signs, covers, reports, etc.
These are the things we would do in the communications group. In some cases, some of these would tie in with our advertising agency of record with respect to promotions: for example, the delivery of the Ontario property tax grant program; or the tax credit program or assessment notices, vis-à-vis the return of the roll in that each year. Some of these would be in conjunction with our agency of record, but the bulk are internal because we do an awful lot of our own work in readying these kinds of materials, both our own productions, brochures, etc.. as well as a lot of our own camera and photography work.
Mr. T. P. Reid: If this is all pretty well done in-house and designed in-house and so on, where does the minister's budget come from for advertising the tax credit system and so on to the public?
Hon. Mr. Ashe: That would be in each particular part of the ministry under the heading of services. In the revenue portion of the ministry under the property tax grant program, for example, that would be the most substantial part, because the biggest part of our expenditures in the last few years has been in the delivery of the grant program.
Mr. T. P. Reid: I do not need it at this moment, but I wonder if the minister could have somebody in his ministry break out those figures so he can tell us what he spends, or is planning to spend, on external advertising this year.
Just one other note: I gather the $5,613,300 relocation project, once this year is over, will not be part of this vote, that the move will be complete; or is this going to go on for ever and a day?
Hon. Mr. Ashe: The move is not complete in the context of everything that comes about because of the move. Physically we have relocated, but the option for people to relocate under our assistance program goes on for two years. This is an ongoing situation. Of course, we have people who are also getting commuting allowances for a period of time. That is all under the Oshawa relocation unit.
As the members can see, we have also cut that down drastically. Looking at that at the end of this year, it is now being rolled into our facilities management unit. We are gradually rolling that group on a reduced basis into our overall facilities management unit. We will have a greater involvement in this function than ministries located in downtown Toronto. For them, doing what would be referred to as something relatively minor, such as changes in the building, movement of partitions and that kind of thing, normally one just gives a ring to Government Services. That is not a practical operation when one is somewhat removed.
We will be doing that ourselves on an ongoing basis. We are using these people in the ongoing recognition that staff units, groups within the ministry and different organizations change and the physical structure has to change. That will really never end, that is ongoing.
Similarly, we are using that group to be involved and to look at our overall branch setup in a physical sense. We have many branches throughout Ontario; some 65 offices, as the honourable member knows, which is a considerable number. This same group of people and their expertise will be utilized to see we are getting the best advantage of our accommodations and structure within those accommodations, further recognizing that, as part of the overall government restraint program, we are trying to utilize less space; and obviously, to utilize less space one has to use it better. They are involved in this ongoing process itself.
I am not suggesting we are just carrying on with the same group because, as the numbers indicate, it is considerably different. As the relocation unit shrinks, some of the people are being absorbed into the growing challenge we have in the facilities management group.
Ms. Bryden: Mr. Chairman, I want to talk a little about the policy of the ministry relating to assessment.
Hon. Mr. Ashe: Mr. Chairman, we are not on assessment at all; but I don't care, it does not matter to me.
Ms. Bryden: I think this can come up under the present vote rather than waiting until we get to assessment which we may never reach.
Mr. Chairman: All right.
Ms. Bryden: First. I would like to start off by congratulating the minister for having changed the assessment notices, I think largely as a result of complaints from this side of the House and from myself in particular. We now have on the assessment notice a clear statement of whether there has been an increase or a decrease in assessment. It used to be the home owner had to go and dig out his last year's assessment to find out if there were any change. He is alerted as soon as he receives his notice as to whether there has been a change. I think this is a commendable step forward.
There is also a much clearer explanation on the notice of what each entry on the notice means and I think this is valuable because home owners are not always experts on assessment matters. Giving them a clear explanation of what each line means is valuable.
There is also the holding of open house meetings. It is easier to meet with the assessor than to try to make an individual appointment. It is useful in explaining matters and in bringing the home owner and the assessor together. One problem with the open houses is they may happen to be on a day or at a time when the taxpayer is not available, so I hope individual appointments with the assessor are still possible under the present system.
However, there are still some improvements that could be made. The three-week appeal period is still too short for most people to look at the surrounding assessments to see if they have a case to go to city hall and inspect other tax rolls and prepare themselves to put in an appeal or decide whether to put one in.
Another area where some improvement is needed is the time lag on the appeals. I understand there is a large backlog because there are a large number of appeals coming forward. I would like to ask the minister if he could tell us, particularly for Toronto, what increases in Assessment Review Board staff there have been. Long delays mean the home owner is left in doubt as to whether he will get a reduction. His tax notices will be coming and he still will not know exactly what his taxes are going to be. There is another area where I have received complaints. When a taxpayer receives a reduction, there is nothing to prevent the minister from appealing the reduction. That is his right. Both sides have the right of appeal. The taxpayer is required to pay the original assessment until such time as the minister's appeal is disposed of or until any appeal is disposed of.
This creates a real hardship for a great many small home owners who may have gotten substantial reductions in their taxes but the ministry decided to appeal them. They are left having to pay at the higher rate for what could perhaps be over a year. Would the minister tell us the average time for the hearing of appeals when the ministry appeals them and whether there is any provision for paying interest to the taxpayer in the event the ministry loses the appeal and the assessment is ultimately reduced?
To an ordinary home owner, there could be a fairly long delay in receiving his reduction and there could be substantial interest costs to him. To the question of whether it is left up to the Assessment Review Board to award interest or whether it should be put into the act, I am suggesting it should be put into the act. If the home owner has to wait until the appeal, he should be granted interest.
This little clause requiring the taxpayer to pay at the original rate in the event of an appeal was put in the act two years ago by the ministry. I have heard many people feel the ministry should take its chances on the home owner being able to pay the extra when the appeal is over. If he has won the Assessment Review Board round, he should not have to pay the original assessment. He should pay at the reduced rate until such time as the appeal overturns that. For the ordinary home owner, that would seem much more logical.
Those are some of the improvements. Another improvement that might be considered is the taxpayer should perhaps be allowed the cost of one day off work for appearing before the Assessment Review Board unless evening sittings are provided. Most have to lose a day's pay. They do not know exactly when their cases come up. There are usually several scheduled for a morning and several for an afternoon.
Last year in Toronto there was a huge number of reassessments. Of those reassessments, 6,800 appealed, which indicates there was considerable concern as to whether those assessments were fair. Seventy per cent got a reduction.
Does the minister not think this indicates some of the claims that the 1982 assessments were arbitrary, hasty and without adequate inspection of the properties were actually validated by the fact that 70 per cent got a reduction? That seems to indicate a lot of the assessments were held to be incorrect by the then assessment review court.
This year, I understand there are a great number of assessments going on again in Toronto. It will be interesting to see how many of them are appealed and whether there is a similar reduction or whether the ministry has changed its methods and is reassessing with more caution than it did in 1982, when there was a great outcry about the methods. I hope the ministry has changed its methods and is not assessing without inspection of the property as was alleged, and I think in some cases confirmed, in 1982.
I have one final question. I want to ask the minister whether there is a double standard in the assessment regarding such properties as the Ontario Jockey Club, which is a very large property in my riding. It did something like $2.5 million worth of improvements over the last five years, but there was no change in its assessment until 1983. This occurred only after one of my constituents appealed the club's assessment on the grounds that it appeared other people who were making improvements to their property were getting big increases in their assessments but the Ontario Jockey Club's assessment did not change for about five years.
Is there a double standard? Local residents who live around the racetrack and whose properties in many cases appear to have been devalued by the presence of the Greenwood racetrack feel the Ontario Jockey Club should be paying a larger share of taxes to the city because of its great increase in business over the last five or six years. It is also detracting from the facilities and residences in the neighbourhood and is causing a great deal of extra police work, road development and things of that sort.
We would also like to know what criterion is used in assessing the OJC. I understand the assessors can choose between replacement cost, market value or income revenue production of the property. In the case of the Ontario Jockey Club, the assessor is reported to have told the Assessment Review Board, when my constituent's case was being heard, that market value was the criterion being used for the club.
How does the minister determine the market value of a racetrack? There are not very many around to compare, and I do not think there are very many willing buyers and sellers out there. Is that the criterion being used on assessing a property such as the Ontario Jockey Club's property on Queen Street?
Hon. Mr. Ashe: Mr. Chairman, I will try to touch upon some of the issues raised by the member for Beaches-Woodbine. First, I thank her for her compliments vis-à-vis the assessment function and particularly the assessment notice.
I think there is one area about which she has somewhat of a misconception and that is the appeal period. This may make her feel a little better. It was quite a highly publicized issue earlier in the year, particularly in Toronto, when the late return of the roll was made for the 1982 assessment notices. The issue of appeals was brought up once again by some members of city council who obviously did not know how anything worked.
It is a fact that there is a minimum of 35 days, not 21 days, a home owner has for receiving, understanding and deliberating over an assessment notice before the appeal.
The actual notices go out at least 15 days before the return of the roll and then there is the appeal period on top of that, which adds up to 35 or 36 days. As a matter of fact, because of the way they were mailed out, in Toronto it ended up being closer to 40 days, but in any event it is no fewer than 35 days, five weeks, which people had to make an appeal. Under any reasonable and responsible consideration of that time frame that should not be a problem.
Granted, if somebody is away for a whole season and has not made any particular arrangements for forwarding mail and that kind of thing, it could be a problem. I do not think one can design any system to catch 100 per cent of the people in what is felt to be a fair and equitable way. I would suggest this is probably fair and equitable to about 99.99 per cent of the population. On that basis, I think it has to be looked upon and deemed as being reasonable and responsible.
When that was pointed out to the members of city council, including the mayor, who was asking for an extension, I never heard anything more from them. I guess they felt that way too.
As far as the actual appeal of an assessment goes, as the honourable member knows, we do not handle the appeal process whatsoever. The assessment appeal process is handled through the tribunal of the Assessment Review Board of the Attorney General's ministry for the first lodging of an appeal. It is handled through a body called the Assessment Review Board. Up to and including the end of 1982, it was called the assessment review court. In practical terms it is the same body performing the same function with a different name. Where the process changed was in the appeal procedures beyond that first level.
I might point out to the member that a very substantial percentage of all appeals, particularly at the residential level, are handled, dealt with and resolved at that first tribunal level. Again, I stress a huge percentage of the residential area appeals are resolved at this stage.
There is no doubt that for some of the more substantial appeals, particularly industrial- commercial, the appeal process has a tendency to carry on. There is no doubt there have been some groups of rather large residential appeals that have gone beyond the Assessment Review Board level, in the condominium area, for example. There has been quite an issue in one instance where there were literally several thousand appeals carried forth from a group of condominiums within the same municipality.
They appear great in number, but in actual fact it is more a principle that is being challenged rather than an individual appeal. They are being handled quite promptly, as I mentioned. The first appeal process generally handles, deals with and clears most of the appeals. They are usually within the same year as the appeal.
For example, appeals are going on right now and have been going on for some time on the 1982 return of the roll for 1983 taxation. I am told it would be fair to say that about 95 per cent of those appeals will have been dealt with before this tax year runs out. We are talking about the current tax year and clearing most of the appeals that deal with the current tax year. I think we have to keep that in mind.
Where we see these big numbers of still outstanding appeals -- there is no doubt many of them have been there for years and that is why the process was changed -- is at the next level of appeal. Previously, the next level of appeal was to the county court. In many areas of the province the local county court judges were not too receptive to scheduling assessment appeals. In effect, a lot of them were just never scheduled, so they would accumulate year after year and nothing was happening.
With the changed process they now go right to the Ontario Municipal Board -- the new expanded municipal board, I might say -- which is geared to deal with these appeals. It will try to handle them on a current basis, but it will take a while to get rid of the backlog that has now been moved out of the court system directly to the OMB. If the hearing was already scheduled at the court, it will carry on to fruition; but if it had not been scheduled it has been moved to the OMB and will be scheduled accordingly.
Many of these appeals show in the numbers on a repetitive basis because the appeal may go back to the latter part of the 1970s, let us say for 1978, and so we have a new one showing for 1979, 1980, 1981 and 1982. That appeal is there five times, but it is really just the single appeal which is waiting to be heard year by year. Again, I hope over the next while they will be cleared. The member talks about paying interest to those who have a refund. May I point out that at our suggestion the Minister of Municipal Affairs and Housing (Mr. Bennett) changed the legislation and allowed municipalities to pay interest. I want to point out and once again clarify on the record that although the Ministry of Revenue and the Ontario government have the responsibility for assessment in this province, we do not derive one penny of the tax revenue therefrom. It goes exclusively to municipal governments, and they are not only the only ones who can collect it but are the only ones who in fact refund it.
They now have the ability to pay interest if they choose, and there is no doubt that the legislation was written to give them the option of paying interest or not. Municipal councils are big boys now and should be able to make their own decisions based on the needs of their constituencies. If they wish to pay interest, they can.
The other issue was paying somebody for a day off work. I would suggest this cannot be very feasible or practical. First of all, the situation does not suggest that everybody has to take time off work without pay. There is a certain amount of flexibility in when hearings can be held. A lot of people are not necessarily on an hourly paid rate; either they can take time off work and replace the time or they have that kind of flexibility in their office hours, if they happen to be office workers whose salary is really not docked.
I would suggest it would be very difficult to know who should pay this. Ultimately, of course, it is the taxpayers who would have to pay it, but should it be the Ontario government taxpayers when in a sense they do not derive any of the revenue in any event? Should it be the municipality where the appeal is involved? They are the ones who are going to derive any revenue. I do not know. I would suggest we really do not have many complaints that I am aware of where people are saying, "It costs me money to go to the hearing I instigated" -- "I" being that particular person.
I think they make that conscious choice. There is a comparison that runs in my mind. We have all had the situation, for the sake of something uncomplicated, of getting a parking ticket -- $5, $10 or whatever. I am sure the member opposite has said, as I know I have and I do not mind admitting it, "I know I am right in this, but I am sure not going to take the time and the hassle to save the $5 or $10 to go and tell the judge that I am right and the officer involved was wrong." So we send in our $10 and say, "It is not worth the hassle." I would suggest that people make that conscious decision many times, including when appealing their assessments.
On the actual appeals within the city of Toronto, and the member's misconception of their success or otherwise, let me again put on the record that the actual number of appeals that were scheduled last year was 6,842. Keep in mind that just under 5,000 of these appeals were lodged by a piece of legislation that I brought into the Legislature and that was duly passed accordingly, so these were not all appeals on the volition of the taxpayer.
Of that total, the assessments reduced were 1,968, or 28.8 per cent. The number of appeals confirmed, withdrawn, or abandoned -- in other words the people obviously felt their assessment was probably fair and equitable, so they withdrew their appeal or just did not show up; or their appeal was confirmed if they went to court -- was 4,704. That is, 68.8 per cent of the appeals were confirmed or withdrawn. As of the time of these statistics, anyway -- it would be something less since -- 170 of the actual appeals had been adjourned.
Of the total assessment at risk, we lost something less than six per cent. In response to the suggestion that we lost most of that assessment because it was poorly and inadequately done, I would suggest the facts do not back that up whatsoever. We lost, to be even more specific, 5.7 per cent of the assessments. This means that the city of Toronto, which is one of the areas where particularly some of the members of council try to play it both ways, each side against the middle, was still able to take credit for, and utilize on its budgeting at large, just over 94 per cent of that assessment increase. This saved the other taxpayers a little bit of money this year on their tax bill, because they had at least that little step towards a little more fairness within the city of Toronto.
I make no apologies for the process last year, as I make no apologies for the 1981-82 process, which is what we are talking about here; or the process that was done on the 1982 roll for 1983 taxation, where yes, we did catch, and I think the word is used appropriately, another several thousand -- I believe 6,000 -- more in the renovation changes, etc. I would suggest to the members that one year from now, when we are looking back to the numbers in that regard, the figure will be equally as favourable, if not even better than the 1981-for-1982 taxation figures that I just referred to.
There is no doubt at all that it was a great game to suggest this business of just driving around and windshield-assessing. That was maybe comical the first time, but not too factual in most instances. In fact, the results of the appeal process I think substantiate that to a great degree.
I think I have answered most of the questions and concerns that --
Ms. Bryden: What about the Ontario Jockey Club?
Hon. Mr. Ashe: Yes, sorry, the Ontario Jockey Club. Number one, of course, there is no doubt the club, like all other properties within the city of Toronto, does not necessarily bear any relationship to the value of other properties, one to the other. It is one of the reasons we have encouraged the city of Toronto and Metropolitan Toronto to do something about the tax base.
Believe it or not, the inequity is not only within the industrial-commercial category, there are inequities within the residential component to an even greater degree than within the others. The numbers may not be as big, Mr. Chairman, but the percentages from the extremities are even larger.
In terms of the specifics of the renovations, etc., that took place at the Ontario Jockey Club -- specifically at Greenwood racetrack, which is what I think the member is talking about -- there are many ways of arriving at value for single-purpose properties. There is no doubt about that at all. Its relative success is part of it, its geography, the type of business and so on.
There is no doubt it is very difficult to come up with a specific market value per se.
Regarding the renovations, I understand many of the renovations, in actual fact, were not assessable renovations; but those that were missed, and there is no doubt they were missed for two years, as thousands of residential properties were also missed for up to 10 years. The only difference was that when we did assess the Ontario Jockey Club we went back for two years, whereas in the residential reassessments in most cases we just do it from the current year forward unless it is a complete change back to a building permit, that kind of thing, where it is substantial. We have the option of going back, but in most residential cases we do not.
So their assessment was changed retroactively for two years. Surely that does not represent all of the expenditures they made, but again, much of it did not add to the value of the property or was not assessable per se. Similarly, when we talk about a home owner doing maintenance -- the replacement of a roof, that kind of thing -- that does not change the assessment either, contrary to the opinions of some, because it is under the heading of maintenance. So they have been changed and they have been changed retroactively.
Ms. Bryden: They may have changed the revenue producing quality of the racetrack.
Hon. Mr. Ashe: I would suggest this is only one perception of value. If this is the member's only indication of how people should pay property taxes, I can tell her there are many businesses operating, not only in Toronto but in Ontario, that would say: "We have not had it too good for the last year or two. Hence, should we pay any property taxes at all?" I would even suggest that maybe Eaton's could come crying with a balance sheet and saying: "Gee, we did not do as well last year as we did the year before. Will our property taxes go down?" We both know the answer to that is no.
Similarly, on a short-term basis the relative profit making capabilities of Greenwood racetrack will not change their property taxes either. It does change the other kinds of taxes they pay. There is no doubt that the racetrack tax to the government will be enhanced. Their corporation taxes, depending on the nature of the corporation, of course, can change. But it surely in itself does not change, and in my view should not change, the property taxes, because if that were the case -- if we related that business vis-à-vis property tax each and every year to the size of the profit or loss -- it would be very difficult for a municipality ever to set a budget it could rely on.
Mr. Charlton: Mr. Chairman, I would like to pick up on part of the minister's response to the member for Beaches-Woodbine. The minister quoted a figure of 5.7 per cent of the assessment at risk, and I do not think those figures give a clear indication of what is happening at the Assessment Review Board.
The minister understands, I hope, that when he refers to assessment at risk, when an assessment on a property is appealed, technically the entire assessment on the property is at risk: it is the entire assessment that is under appeal. But the reality is that the home owner may be going in and appealing 10 per cent of his assessment. He may be appealing the increase that occurred, and the 5.7 per cent the minister is quoting does not accurately reflect how much of what the individual was appealing he won or lost.
This point should be made very clear to everyone. If we are going to start talking about the record of appellants and/or the assessment office in the appeal process, then we should talk about it in terms of figures, in terms of individual cases and what actually happened in those cases: what was actually being appealed as opposed to the entire assessment.
Hon. Mr. Ashe: I do not disagree with what the member has pointed out. He is correct.
Mr. Philip: Mr. Chairman, I would like to come in on an issue that the minister spoke on very briefly in commenting on some statements by the member for Beaches-Woodbine, and I would like to do it from a different angle. It seems to me there is a basic unfairness in the way in which condominiums have been assessed in relation to other forms of property. If we look at the history of condominiums, when they first came into being the assessors basically did not know how to assess them or what value to put on them.
If we look at what has happened to the condominium market or the value of condominiums. frequently in municipalities a condominium, particularly on an ideal site, such as a waterfront site or a downtown site, was the only condominium or one of the few that existed at a particular time. Therefore, it was perhaps overvalued as compared to what happened later when more came on stream.
When we look at what has happened to condominium values in comparison to other forms of housing, we see great discrepancies. I think the ministry could commission research that would indicate that. But a condominium owner whose property may be worth X dollars is being charged the same or more taxes as someone who owns a property that is considerably more valuable.
When one reads, as perhaps the minister does, condominium and time-sharing magazines we see frequent complaints from condominium managers. Now we see a major concern by a very new and fairly enlightened group, the Canadian Condominium Institute.
I was talking to its executive director the other day about this very problem. Since there is a group such as the Canadian Condominium Institute that has at its disposal lawyers, economists and managers but is a voluntary organization, would it not be worth while for the minister to commission that body -- or perhaps set up a different body in which the Canadian Condominium Institute could be a partner -- to look at the problem that condominium owners are facing because as a group they are being overtaxed in relation to other forms of property owners?
While I have the minister's attention I would also like to mention to him that the single largest complaint from constituents, other than the condominium complaint, is that when they do improve their homes -- I am not talking about replacing the roof because that is general maintenance -- they improve the appearance of their community.
Many of the people who are doing this in my riding are people who are in the construction industry. When they have some time they make their homes more beautiful and, as a result, they make the community more beautiful by the work they do. This produces no extra revenue to them. It is simply their volunteer time and, indeed, there may be very little in cost of materials. Suddenly they are faced with additional property tax.
Perhaps the solution I proposed a number of years ago and reintroduced in my private member's bill on this would be worth looking at. I would like to hear the minister's comment on it. The idea is that the taxes not be increased if one improves his property, if he does not extend the external boundaries or the floor space of the residence and if one is occupying it for his own use for a period of not less than five years.
They would increase, of course, as a result of the improvements, to a new purchaser; but do not discourage, through additional taxation, people who happen to have the skills and the initiative to improve their neighbourhood by improving their homes. They are not making money out of it. They are not doing it because they are going to sell it. They are occupying it.
Particularly in the North York part of my riding there are many people who are in the construction trades. They constantly complain to me, "Every time we try to improve the appearance of our homes and this neighbourhood we get socked with additional tax." I have sympathy for what they say. They are saying basically the ministry is discouraging their initiative. I hope the minister will address himself to those two issues.
Hon. Mr. Ashe: Mr. Chairman, on the issue of the condominiums, I do not know whether the honourable member was here when I was referring earlier to the whole appeal process and the numbers, and that quite a lot of the appeal backlog has to do with that exact issue of condominiums. One of the reasons there are so many on appeal beyond the Assessment Review Board level is we have had a few conflicting decisions on the issue.
Frankly, in many cases it comes down to the change which took place in 1975 recognizing that a condominium --
Mr. T. P. Reid: I think you should wait until you have the member's attention.
Hon. Mr. Ashe: That is what I am doing. He did it for me so I am doing it for him. I am just returning the courtesy.
In 1975, there was a change in policy recognizing the condominium and comparing it with a single-family dwelling, whereas before they were treated as multiresidential rental units, and carried a higher component of tax. In most cases this benefited the condominium home owner.
The issue in the last couple of years relates more to the fact that, as was pointed out, the relative value of some condominiums in the community has changed to a greater degree than single-family residences in the community; and in some cases, in some circumstances, in some communities, no doubt that is so.
As far as we are concerned the issue is that there are two kinds of municipalities. There are those that have been on a frozen roll, and we have no authority just to pick out arbitrarily one component of the makeup of the roll and change its value on its own. In fact we cannot do it.
On the other side of that same issue, there were a few years back in the late 1970s when condominiums were increasing, in terms of percentages and perspective, at a greater value than many single-family homes. They had the advantage of it that way.
In other words, what I am saying is the government cannot, year to year, adjust one class of property values compared with those of its neighbours. There is no doubt the answer on a permanent basis, when there are municipalities which have been caught in that, is twofold:
They can update their assessment roll through a section 63 request from the council, and that will put everything on a fair and equitable base year. At present we are using 1980 as the base year. Up to and including 1985 we will be using 1980 base year values and that would correct any inequities there are.
The other part of the answer is to suggest that in many cases these are temporary bumps -- up or down -- in the marketplace. Over the period of a couple of years they will probably be winners an equal number of times as they will be losers vis-à-vis their comparison in values. So there is no easy answer.
It would not be good if we come to the point of being told by the court, contrary to the law, that we have to change values each year as to one class of property. The member's colleague, who has some background and expertise in this area, can tell him that would be a very horrendous task put on the assessment function, regardless of who has it. It would also to a great degree place in jeopardy the assessment base of some municipalities.
It may have some pluses in the short term for any given property owner, but it may have some very significant implications to the assessment process and to any given municipality as well. We are defending that principle through the assessment process. There is no doubt at all the issue exists in some areas of municipalities more than others. There really is no easy answer. I cannot suggest there are no inequities out there because in some cases there are. But there are ways to overcome them and in many cases they are within the hands of the municipal council.
As far as the whole concept of how an assessment should be done is concerned, I guess the debate will go on forever as to what value one puts on a property and how one arrives at a fair and equitable assessment. The odd proposal I have seen lately gets back to suggesting that all assessments should be based on the value of the land and not have anything to do with the building. That may be perceived to be fair.
The main argument behind this one is that it would really stimulate the building industry. It may do great things for the building industry but I suggest it surely would not do great things for equity nor for the assessment base of a municipality. They would just arbitrarily let things grow on a property and not change their assessment and hence their tax revenue. Believe it or not, that is being proposed as a change and taken very seriously by its proponents.
Not everybody accepts, as I do, that trying to compare market value of properties one to another -- a fair and equal time frame of market value, obviously -- is as good an indication of fairness as anything. But if one accepts that then one has to recognize that a change to property changes the value of that property and hence should change the taxes. As I indicated before the cosmetic change, the maintenance change, does not in itself change the assessment. If it is under the category of regular maintenance it will not change.
One can say that because somebody is a tradesman or a handyman -- not even a professional tradesman -- that could change a property substantially without any impact. I suggest that again puts an unfairness on the fellow who is not a handyman, such as myself. I then have to make a conscious decision, if I am not happy with my home as I now have it, to go and buy another one. And if it is an upgrade or of greater value I am going to pay higher taxes accordingly.
If one carries the suggestion to the nth degree it would probably encourage more gutting of homes and doubling and tripling of values if people knew they were still going to carry on with a very small tax bill. That is exactly what has happened in varying degrees in Toronto and partly what the whole assessment issue is about here.
People have changed the value of their home from $30,000, $40,000 or $50,000 to one of $200,000 and then complained to the nth degree because their tax bill went from $400 or $500 to $1,200. I would be very happy with a $1,200 tax bill on a $150,000 or $200,000 property. It just is not so; the reality in most parts of urban Ontario, including downtown Oshawa, is that people know it is not so. But the reality has not sunk in yet to most of the ratepayers or politicians in Toronto. Someday I hope it will.
There is no doubt at all -- I guess it will be forever thus -- that someone will call unfair whatever form of assessment or property tax exists. This will be so as long as it exists, and I suggest it will always exist in one form or another. Whatever one comes up with it will be deemed to be unfair and inequitable to some specific situation. Until there is a better way I think the system should have some relationship to market value. The changes to property that change market value is as fair and as equitable as anything I have ever heard of.
One issue we are looking at may partly satisfy the member's concern. It has to do with the change in value. The legislation now says if there is a change to property that would affect the market value in excess of $2,500, regardless of the cost of that change, the roll should be adjusted accordingly. There is no doubt that figure of $2,500 has been with us for a while and we are looking at it.
We have asked the Association of Municipalities of Ontario on an informal basis to decide whether municipalities generally might look at $5,000 as being a more current, realistic figure. It would be helpful to us as far as the administration of the assessment function is concerned. Also it would recognize the inflation of the last number of years in considering changes made to property that changes its value.
I think I have answered most of the member's questions. If I could -- okay. If he has another, we will carry on.
Mr. Philip: Mr. Chairman, I would like to respond to the last issue -- namely my proposal about improvements done to the home. It is possible the minister has not reviewed my bill. Basically I was proposing that an individual not be penalized if he improved his home without extending the square footage, up to and not more than a cost of $10,000. I was suggesting he not be penalized as long as he lived in that residence for a period of five years or on a sliding scale up to that duration. It would be obvious that if he sold in less than five years he would have extra back taxes to pay.
The minister seems to be confused by my question. I have not suggested that if property is improved and goes up in value it should not have a higher assessment. What we are arguing about is when that assessment comes in. I am suggesting the assessment should come in at the time of sale. If I buy a house that some fellow has improved from $50,000 to $200,000 then I am buying a $200,000 home and I should pay tax on a home worth that. However, if I happen to improve my home up to a cost of $10,000 why should I have this disincentive since it is for my own family's use?
There is no other product on which I have to pay additional taxes if I improve it. If I improve an old car so that it is a custom car and worth a lot of money, I may pay a capital gains tax on it if I can sell it for three times what I paid for it. But at least I do not have to pay an additional tax on it while I am using it. I suggest the minister might like to look at my bill. It does provide a remedy to what a lot of people see as a basic unfairness and a disincentive towards doing things for their families and improving their neighbourhoods.
On the condominium issue, I suggest it is not the bump in the curve at 1977 that we have to look at but the general pattern. The minister would have to agree that condominiums have not gone up in value at the same rate, particularly if one goes back to 1975 or earlier when the original assessments were set in anticipation of 1975. Does he not see it is not just that some condominium owners may have had a tax advantage in one or two years, but that condominium owners have been overtaxed as a basic pattern for the last 10 years.
The minister has some responsibility at least to research that and to come up with a solution to cure that basic inequity. Has he spoken to or had correspondence from the Canadian Condominium Institute? Has he talked to any of the lawyers involved in that or the condominium managers and presidents of boards of directors? There is a basic unfairness in the way in which condominium owners in this province are being taxed on property. That unfairness should be corrected.
Hon. Mr. Ashe: Mr. Chairman, I would comment first on the honourable member's bill. I do not think we differ greatly other than possibly on the amount. My closing remarks had to do with our suggestion now being considered by the Association of Municipalities of Ontario, about whether we should change the $2,500 to $5,000. The member is saying $10,000, so we differ on the amount; but we are agreeing that perhaps $2,500 has outlived its usefulness. We are only disagreeing on the degree of change.
The other thing I have to keep pointing out is that it is not how much money one spends, it is how much it changes the value of the property. One could spend $20,000 and not change the market value significantly. Conversely one could spend $10,000 and change the market value by $20,000 or $30,000. We relate it to the change in the market value, not the cost of the changes to a particular property. However we are not disagreeing that $2,500 may be too low today.
I do not know what I can add on the condominium issue. It has been ongoing. Whether or not we have had specific dialogue with the Canadian Condominium Institute about it I frankly do not know. We have ongoing dialogue on the issue with many lawyers in condominium corporations and associations in Ontario.
Again, the remedy has to be through an across-the-board change in the base within a municipality to make it fair and equitable. There is no doubt the owners are a lot better off now than they were when the condominiums were treated as apartments in the sense of the percentage of the tax burden they carry. Part of the issue really goes beyond the assessment difference and is a disagreement with the local municipality that they pay a full tax bill and then pay separately for some of their services. In effect they say they are paying twice.
I would suggest that is not our issue in the sense of the assessment, because if the assessment is proper all other things being equal the services are already recognized in the price --
Mr. Philip: The Condominium Act did not recognize that.
Hon. Mr. Ashe: When people are buying condominiums, surely they know one of the things they are buying is the right to pay a condominium fee -- which includes some of the services one would normally think are also included in the tax bill. As an illustration I would refer to such things as internal garbage collection in some cases.
There are others. It depends on the condominium and on the municipality. Some municipalities do enter into agreements with condominiums to provide some of these services, in some cases for a fee and in others without a specific fee. However, I do not think that is our issue, at least that part of it. It is more with municipal councils than anything else.
Mr. Philip: It is also in the Condominium Act. The amendment said the council may negotiate but it did not say that the council should negotiate or would negotiate. Now that is not your responsibility, but it was your government's responsibility when it brought in that act.
Hon. Mr. Ashe: The member cannot have it both ways. He cannot criticize the government because it does not give enough autonomy to municipal councils to make decisions and then say we should not give decision-making authority to municipal councils but should legislate what they ought to do. He should pick one side or the other. I have no problem with which side the member picks but he should at least be consistent.
Mr. Philip: Mr. Speaker, on a point of order: To correct the record, what I said was that the Condominium Act should have made it an obligation for municipalities to negotiate. There is no obligation in there. It uses the quease word "may," which allows any municipality to say, "Goodbye Charlie, we do not have to do it."
If the government had accepted our amendment, which would have forced negotiations either to provide the services or to reduce the taxes, then condominium owners would have felt some justice was being done. Now they pay the same taxes as home owners or higher and they pay additional taxes in the form of maintenance fees for snow removal, access lighting and upkeep of access roads that other people get out of general tax revenue. It is a matter of whether, in that act, the appropriate word was "should" or "would" -- which we had proposed -- or the minister's jello word of "may," which of course is completely meaningless.
Hon. Mr. Ashe: That is a point of view where we obviously have a difference opinion.
While I am on my feet, I would like to answer two previous questions the member for Rainy River asked so that we can clear the record of two outstanding issues.
The first was how the $33,100 in the services category in vote 801(8) broke down. Word processing, $12,000; courses, $3,500; repairs and equipment maintenance, $2,000; photocopier in the library, $2,400; Revenue's Typesetting -- that is a publication that the ministry puts out internally -- $5,200; community development -- early expenses for design/conceptual work, etc. -- $8,000; for a total of $33,100. I think I did answer before that there was no money spent on outside consulting services.
Second, I was asked how the advertising expenditures included in the 1983-84 estimates project out. As he probably knows, our agency of record changed in this past year because the former contract ran out and it was retendered. The successful agency of record now is R. T. Kelley Inc. of Hamilton. The contract is now in effect on a three-year term.
In the current estimates, spread throughout the various functions, there are projected expenses of $1 million. These comprise the Ontario tax grant program, $700,000; budget-related advertising, $40,000; assessment -- which is roll closings, section 86's return of the roll, etc.; quite regularly there is advertising related to the assessment function -- $200,000; and miscellaneous -- relocation, office moves, that kind of thing, normal local-type announcements -- $60,000. This gives a total of an estimated $1 million for fiscal 1983-84; and these expenditures are included in the estimates.
Mr. T. P. Reid: What were you on? I was going to move on to vote 802.
Hon. Mr. Ashe: We are kind of jumping around. May we see if there are any more outstanding issues relating to various items in vote 801? If there are not, maybe we can clear vote 801 and get on to vote 802.
Mr. Chairman: The member for Oakwood wanted to speak to vote 801.
Mr. Grande: The concern I have is a matter of policy, therefore, I think it would fall very nicely into the first vote. I have discussed it with the minister before and I would like to remind him again about it. I bring it before him on behalf of the people of Oakwood riding.
I am referring to the tax grant for seniors. It is not the fact that seniors come to me with problems, with applications and so on, for the time being the minister has dealt with that. Seniors come to me because their taxes are increasing phenomenally. I am sure the minister is aware of this situation in the borough of York which has the highest percentage of senior citizens in Metropolitan Toronto on the basis of population. At the same time those same senior citizens are paying the highest property tax in all of Metropolitan Toronto. It is a double-jeopardy thing.
I am sure there is probably no way the minister would be able to get hold of the information, but I notice that in his important notice of April 29, 1983, Tax Grants to Senior Citizens, bulletin 83-2, he mentions the fact there are 554,000 eligible Ontario seniors to whom he sent the spring instalment of the 1983 property tax grant.
There are two problems. One, does anyone in the government know whether the senior citizens in the riding of Oakwood, or anywhere in Ontario, who receive the old age security pension, the supplement and a guaranteed annual income system grant, and probably the Canadian pension plan if they have worked for the number of years they should in order to qualify, are now better off? I understand about 50 per cent of the number the minister projects, 554,000, receive some kind of guaranteed federal supplement, give or take few percentages, above 50 per cent.
Are those senior citizens better off with the $500 tax grant than they would have been under the property tax credit? Has the minister attempted to make any kind of study or is there any work being done, either by the minister or any of his colleagues within the government? Are they better off with the $500 than with the property tax credit they used to get prior to the grant for seniors coming in?
If the minister has any data whatsoever regarding that, and I admit it would be very difficult to get it, I would certainly want to see it.
The second point is in terms of indexing the $500. I am sure the minister understands that since the tax grant came in the amount was $500 in 1981, 1982 and now in 1983. Taxes do not stay that way; taxes keep increasing.
Let me tell the minister of a senior citizen's home in the riding of Oakwood that is assessed at $5,000, probably just about the medium to low kind of housing in the borough of York. In 1980 that senior citizen was paying $940 in property taxes. In 1983 that same senior citizen is being asked to pay $1,268.65. It is about a 35 per cent increase over the three-year period and yet the tax grant has remained at the same rate.
Is there any thinking or any work going on in his own ministry or in the Treasury in terms of indexing this tax grant? Otherwise, what is happening is that, while the taxes of those seniors in the riding of Oakwood are increasing, and increasing probably proportionately at a higher rate than anywhere else in Metropolitan Toronto, that $500 becomes less and less of an amount to go towards payment of their taxes. In effect, the minister is reducing the support to the senior citizens he started with in 1981.
As far as I am concerned, it is a common sense question I am asking the minister. I do not think I need a tremendous amount of information and data about that. I am sure he understands it. I certainly would like to hear from him as to whether he believes a policy change is required to index the $500 so it would be commensurate with the yearly increases in taxes.
Hon. Mr. Ashe: Mr. Chairman, as far as the income of seniors citizens is concerned, there is no province in Canada that treats seniors better than they are treated in Ontario. The record will prove that and the statistics back that up, so that speaks for itself.
Mr. Samis: It does not out west.
Hon. Mr. Ashe: Sure it does. Look at everything. If the member looks at straight, guaranteed income levels, there is no doubt that at the moment Alberta is slightly higher than we are, but we have some other benefits we give seniors that Alberta does not. We are higher than British Columbia in our guarantees, for both single and married. We are higher than Saskatchewan, higher than Manitoba, higher than Nova Scotia; and the others do not have any guarantee at all.
Mr. Samis: You are comparing with "have not" provinces.
Hon. Mr. Ashe: The other provinces do not have any guarantee at all. I am comparing it with the provinces that have it. There is only one, in terms of the guarantee -- that is, just looking at the guaranteed income, not at the value of other benefits -- that is slightly higher than Ontario, and that is Alberta and it is a nominal difference.
As far as the indexing of the property tax grant is concerned, there is no doubt that would be and is under the purview of the Treasurer. I do not think there was any particular feeling, suggestion, announcement or indication whatsoever that the program was going to be indexed. I do not have the statistics with me, although I know I read them into the record in the form of a statement late last year, but there is no doubt that a significant percentage of total local property tax is covered by the property tax grant program. In a substantial number of instances it pays three quarters, and in a substantial number it pays at least half. It is really only for those people who are in more elaborate surroundings that the property tax grant at its present level of $500 does not pay at least half. It usually works out to be more or less what the education component of the property tax bill is.
As the member knows, that was really delivery of the commitment of the government of the province to take off some of the obligation for education taxes. That was really the scenario behind the property tax program anyway. I suggest that in a huge percentage of the situations, the grant as it is now formulated and valued does that. It was never intended, really, to pay all the taxes, albeit it does, as I indicated before, pay them in a substantial number of cases.
It is true we have no way of breaking down the various levels on a constituency basis. I suggest though that, in terms of an urban area, there is probably as great a number, or a greater number of seniors in the city of Toronto getting a larger percentage of their property taxes paid than in any other urban area in Ontario. I say urban, differing from rural, and the reason I say that is I can keep quoting day after day, as I have, some of the gross inequities of some of the property taxes out there. Obviously, that means $500 would pay more of the taxes here than in practically any other urban area around.
I do not know the exact number of Ontarians who receive the guaranteed income supplement, that is to say the federal supplement to old age security, but I can say the number who go beyond their limit and still qualify for a further supplement in Ontario is in the order of 189,000, which is something less than the member indicated before.
As the member knows, that does guarantee in Ontario that a sum of money is indexed, for couples anyway. We guarantee for a married couple in Ontario, not valuing other benefits at all, a monthly income -- old age security, guaranteed annual income supplement, Gains -- at a minimum level of $1,061.28 per month. That is indexed quarterly. It is changed quarterly, albeit the last change which came into effect April 1 did not change it substantially because there was not a great change in the cost of living.
As a matter of fact, it only went up 70 cents per month per person, $1.40 for a married couple, from January to April 1983. The number of people receiving Gains has been going down over the last couple of years, which means the income level of our population has been getting better.
Although the property tax grant program has not been indexed per se Gains is, which does take care of families on a lower income and recognizes at least some degree of inflation, albeit not on the grant program itself.
When I mentioned the minimum income level for a married couple, both over 65, is now $1,061.28 per month, that does not include the other programs -- the free drugs, free Ontario health insurance plan, the property tax grant, the sales tax grant or the temporary home heating grant as far as that goes. One can add another $640 to that income in the past year: which means it is not too bad, $1,061 per month plus. If one averages the other out, roughly another $55 a month; over $1,100 of guaranteed minimum income for a married couple in Ontario.
I suggest that can be stacked up against any jurisdiction, not only in this country but probably on this continent.
Mr. T. P. Reid: I gather from the minister's remarks he agrees with the Treasurer (Mr. F. S. Miller), and it sounds almost like a fait accompli that the property tax credit is going to be phased out, that he is presumably going to --
Hon. Mr. Ashe: Tax grant.
Mr. T. P. Reid: Or tax grant; I am talking about the tax credit. I just get the flavour from the minister's remarks in that regard that, given his response, I would probably get the same response to the policy question about the tax credits. The Treasurer indicated he was going to look at doing away with the property tax credit, which would save the Treasury about $242 million according to the Treasurer's figures.
Can I gather that the Minister of Revenue would support that kind of move? Has he made a submission to the Treasurer in that regard? Does his ministry have any background papers, studies, etc. in terms of the property tax credit?
Hon. Mr. Ashe: As the member knows, the government is in the process of reviewing all its programs. I think it is part of good fiscal management, particularly in these days of constraint. There is no doubt, as the Treasurer indicated in his budget, that areas to be looked at are the grant and credit programs: in this case, the property tax credit.
Frankly and personally, there is no doubt in my mind that the credit, as it is now perceived and is now on the income tax form, has outlived its usefulness. It would probably serve a better purpose if it were to be restructured in some way. That is not to suggest that elimination is necessarily the answer, but in my view restructuring it probably is. But I do not make those decisions, at least not yet.
Mr. T. P. Reid: I guess the minister has answered that question as well as he can.
Could we carry vote 801 and move on to vote 802?
Mr. Chairman: That would be a great idea.
Vote 801 agreed to.
On vote 802, tax revenue program:
Mr. T. P. Reid: Mr. Chairman, I have a number of questions on vote 802.
On vote 802, item 2, tax appeals, the minister indicated in his opening remarks, which were blessedly and thankfully brief, that there were something like 133,000 appeals.
Hon. Mr. Ashe: Assessment appeals.
Mr. T. P. Reid: "As well, more than 133,000 appeals have already been registered with the Assessment Review Board."
Hon. Mr. Ashe: That has nothing to do with this. This is tax appeals we are talking about.
Mr. T. P. Reid: I am sorry; these are tax appeals. In any case, on the tax appeals -- we will get to the other -- I would like to know exactly how the $1,468,000 is spent.
The minister has a legal department. He also gets legal advice, I understand, from the Attorney General (Mr. McMurtry). Can the minister tell us what the money is being spent on, in some detail? Can he also tell us why there is an increase of $396,900 this year?
Hon. Mr. Ashe: Mr. Chairman, the tax appeals function is part of our overall increased emphasis in the tax revenue area of the ministry. Of course, we are building up all components of that. Easy access to a consolidated appeal route has always been very important and appropriate.
There is no doubt, I think we can all acknowledge, that during tougher economic times, tax appeals have increased. I think it is pretty automatic that, when things are booming along in the economy and the businessman is making all kinds of money, etc., he is really not looking for places to appeal. He says, "Appeal, what the heck," and it goes on and on. That is corporation taxes, sales taxes, and really our whole component of the nine ongoing pieces of tax legislation we administer, plus succession duties which are still with us.
Mr. T. P. Reid: Could the minister tell us where the 3,000 come in then? Having done away with the small business corporation tax, how do the appeals break down in those 3,000-plus cases?
Hon. Mr. Ashe: I apparently do not have that handy. I will get it for the member. I presume he is not asking why the extra money; it is more what the breakdown is in the type of appeal to type of tax.
Mr. T. P. Reid: I would also like to know why the extra money because --
Hon. Mr. Ashe: That is extra people, seven.
Mr. T. P. Reid: Seven extra people.
Hon. Mr. Ashe: Six net; seven on permanent, one less for unclassified; for a net increase of six. Again, it is to strengthen the appeal system, reduce the appeals backlog and maintain service to taxpayers in light of projected workload increases. As I mentioned, the economic climate, increased use of the appeals process to reduce tax liabilities and challenging legislative interpretations, which is taking more and more staff time, and involves working with legal counsel as well.
As far as the breakdown by tax goes, I do not have that here but I can get it for the member if he wishes it.
Mr. T. P. Reid: It is fairly difficult to relate the increases in salary. If one looks at the raw figures, for instance, under activity item 2, we see there is a $285,400 increase over 1982-83 estimates of $782,000. Taking five per cent of that, the figures do not add up to the six and five per cent program, even figuring in the six extra positions. Can the minister give us some idea what the salary range is for those six extra positions under the section on tax appeals?
Hon. Mr. Ashe: No, I cannot, not off the top of my head.
The buildup from last year -- we are not only talking about six extra people -- is not five per cent. When we compare with 1982-83 estimates, one must keep in mind that is before the 1982 salary awards. In other words, this is pre Bill 179. These are probably more the nine percenters rather than showing in the five per cent year. If I recall, that was generally the range of settlements in early 1982. That would account for something in the order of $70,000 of the $285,000 increase. The other would relate to the net of six new people, so it would appear to be in the $30,000 to $35,000 range.
Mr. T. P. Reid: Could the minister explain, under item 3, the $1,786,700 for special investigations? I presume that is where we might talk about a matter I have raised with the minister before, which is the collection of sales tax, on cigarettes in particular. After the budget, with the almost 33 per cent increase in the tax on cigarettes, we know this is going to be an added incentive, if that is the right word, for people to try to avoid the provincial tax on tobacco.
The minister may or may not recall that a year or so ago I raised with him the problem of cigarettes coming in from Alberta specifically, that it was worth while for people to drive out west, where the tax burden was less, bring the cigarettes into Ontario and bootleg them.
If the minister is beefing up this program substantially as well, could he give us a fuller description? Possibly even wider publicity might dissuade some people from trying to avoid paying the taxes. I gather there have been specific problems with the tobacco tax in some areas that have been exempted or are exempted under other legislation and agreements. Perhaps he could deal with those matters.
Hon. Mr. Ashe: There is no doubt that is part of our looked-for revenues. The special investigations group has been busier in the last few years and has had an increased work load. There is no doubt also that the tobacco tax area is one where there have been concentrated efforts. The last Alberta budget helped our problem somewhat by putting into effect a fairly substantial tobacco tax which made it a little less attractive to smuggle, and that is where most of it was coming from.
We also now have in effect some better jurisdictional agreements which are starting to pay off with that province. That is helpful.
In terms of advertising, there is probably no better advertisement than the kind of story that appeared in the Toronto Star on June 1, 1983, with the headline, "Man's Fine for Tobacco-Tax Fraud Skyrockets to $288,000." It read: "A Brantford man has been ordered to pay more than $288,000 in tobacco taxes -- more than 14 times his original sentence -- for his part in the illegal purchase and resale of cigarettes. Daniel John Jansen, 41, was ordered by a county court judge to pay tax evaded when he participated in the purchase and resale of 120,203 cartons of cigarettes in 1979 and 1980.
"Jansen was convicted in December of two violations of the Tobacco Tax Act -- purchasing cigarettes for resale from someone not designated as a collector of tobacco tax and selling cigarettes without a wholesale dealer's permit. He was ordered to pay $20,000 in fines within 18 months. The sentence was appealed by the Ontario Revenue ministry. Evidence indicated Jansen took part in buying cigarettes for resale from a native on the Six Nations Reserve near Brantford. Indians can buy cigarettes without having to pay tobacco tax" -- but these are to be for their own personal consumption.
We could not have done better with full-page ads than that kind of a report. These things have come about because of the further concentrated efforts by the special investigations group.
There is a further planned program of enforcement against tax evasion and deliberate abuse. There has been a completion of over 80 investigations and the initiation of over 30 prosecutions designed to result in significant tax recovery by tax branches and the deterrence of similar tax fraud by others. The tobacco tax one I just read is an excellent indication of that.
In the planned activities of the branch for 1983 all the way along the line there is a boost in the staff complement; the investigators increasing by one; management and support staff, because there is a lot of background paperwork for the field investigator, that is being increased by three; planning and development increasing by three; and there is one position that is vacant.
Prosecutions: where we had in the last fiscal year 31 and 27 others in progress for a total of 58, this year we anticipate that will be increased respectively from 31 to 48, and 27 at year-end reduced to 25 because one of the things we want to do is keep everything more current. That is still a net increase from 58 to 73 prosecutions that are anticipated.
Investigations, including prosecutions, in the last fiscal year and in progress at the end of the year were 175, and we anticipate that increasing slightly to 186. The revenue through taxes, interest, penalties, fines, voluntary disclosures and what have you, we see somewhere in the order of $3 million.
I think one of the very significant factors about a recognized, highly visible, tax -- well, not only the special investigations group, but the whole function of making it obvious somebody is looking for tax evaders and we are doing something about tax evasion; that increases the voluntary compliance component of the ministry. That is an intangible. It is hard to put a number to it, that is for sure, and I cannot. One thing I can tell members is that the special investigations group on its own more than pays for its operation, even in direct recapture of revenues, fines, etc. They are also involved in prosecutions, not just the recovery of revenue.
In this case there were prosecutions under the retail sales tax, in the past year, 26; tobacco tax, four; and one "other." We see activity increasing on all of those fronts and we have quite a number of actions currently under investigation, again broken down by statute.
Mr. T. P. Reid: Does the ministry pay for information? If, for instance, the Minister of Northern Affairs (Mr. Bernier) knows that, say, the Minister of Education (Miss Stephenson) did not pay her income tax or corporations tax or whatever and sends the ministry --
Hon. Miss Stephenson: How could the member ever suggest that?
Mr. T. P. Reid: I was taking an example in which I would not be too far out.
Hon. Mr. Bernier: Did the member pay sales tax on that material?
Mr. T. P. Reid: Yes. I did.
When I worked on customs, if somebody provided information on somebody who was smuggling the Royal Canadian Mounted Police or the federal ministry would pay the informer 10 or 25 per cent of whatever was recovered. Does that happen?
Hon. Mr. Ashe: No. If any of my colleagues got involved in tax evasion we would throw the book at them for sure, whether it was a female member of the executive council or otherwise.
No, we do not pay for information. We operate a voluntary disclosure and voluntary assessment type of tax administration. We do not feel paying for information would be conducive to our overall tax philosophy. Having said that, there is no doubt that information often comes forward in an anonymous way. In some cases, things start because of complaints rather than specifics, but sometimes where there is smoke there is fire. Again, it gives an opportunity to either our external audit group or, ultimately, special investigations.
Keep in mind, when we talk about the normal audit process done, let us say by a retail sales tax group, that in itself does not involve special investigations. If they get into a situation in their normal audit functions that would suggest out and out evasion rather than mistakes, then it is appropriate that special investigations be called in. We do not pay for information.
Mr. T. P. Reid: I have two further questions on that aspect. Can the minister give us an indication of how many cases are settled with an investigator going in and saying, "It would appear you have not paid," or "You have not paid enough," as opposed to having to go to court?
Second, if one looks under item 3, at transportation and communications, there is an increase of over 20 per cent. Services have increased roughly from $28,000 to $92,300, an increase of $64,500, which is an increase of two and a half times over last year.
Supplies and equipment last year were $10,300. The 1983-84 estimate is $64,500, an increase of $54,200. That is almost a sixfold increase in one year. I am finding these estimates rather interesting in the fact we are actually talking about the expenditure of government funds instead of philosophical meanderings. I am sure the minister is not finding it quite as interesting, but that is what we are here for.
How does he account for those rather large increases when his increase in people is nine?
Does that mean all these others are increasing exponentially?
Hon. Mr. Ashe: As the member knows, when salaries and wages go up there is an automatic component in employee benefits; that goes up accordingly. Similarly, transportation and communications is in line. When there are more people out in the field, there are more transportation related expenses.
On services, supplies and equipment, part of that is in the area of computer auditing and investigation as a means of dealing with computer-based fraud. Electronic data processing is being acquired and an extensive training program has been initiated. That is the main component of services and supplies and equipment, so we can better utilize modern equipment and technology to try to detect fraud rather than using the gumshoe approach, if you will, in comparison. We are investing in that in the coming fiscal year and it shows in those categories, services and supplies and equipment. The services increase is in the training aspect and the supplies and equipment in the physical plant.
Mr. T. P. Reid: I would presume some of that will go for the consulting fees we discussed earlier. When the minister gives me his list, I am sure that will show up.
I see others are most anxious to get into these estimates so I will ask just one more question at the moment. Under item 7, the corporations tax and other taxes, there is an increase of $2,909,000 related to the small business corporations tax. I presume that is what that is for. Can the minister give us an indication of how many small business development corporations he thinks will go into effect this year?
Hon. Mr. Ashe: Is the member on vote 802, item 7?
Mr. T. P. Reid: Yes.
Hon. Mr. Ashe: That has nothing to do with SBDCs, that is under item 8.
Mr. T. P. Reid: I am sorry, I was on the wrong page. My apologies.
We were informed that in 1982-83, roughly -- it does not all go in there -- I think there was something like $19 million at year-end. How many did that represent? How many is the minister expecting this year and at what capitalization?
Hon. Mr. Ashe: As far as what we expect this year is concerned, we do not know. The activity has been maintained. In his budget the Treasurer substantially increased the allocation for the SBDC program because of its success.
I can give the member a status report to April 30, the end of the past fiscal year. We have had 315 registered SBDCs. These are active SBDCs only. In other words, some that were registered and never got off the ground have already been excluded. Most of these, 307, have been private SBDCs and eight public. We have revoked for nonperformance a total of 68; applications or proposals in process at the end of the fiscal year were 34; applications withdrawn or rejected, a further 34. So the total applications or proposals received or in effect were 451.
The total authorized capital was just under $1.44 billion, but the actual issued capital, which is really more significant at this time, was $156 million, with 30 per cent of that being the grant or tax credit commitment of just under $47 million.
There have been 302 SBDCs that have individual investors and 13 have corporate investors only. There has been quite a variety of investments made, the majority being in the manufacturing and processing area, just under $106 million; tourist activities, about $31 million; mineral exploration, just under $7 million; research and development, $3 million; and book publishing, just over $500,000. So the actual investments in small businesses made by the established SBDCs have totalled 695, with a total value of $147 million.
Mr. T. P. Reid: I may have my wires crossed on this but if the total capitalization in paid-up capital is $147 million, would the returnable part from his ministry not be 30 per cent of that? That would come to roughly $50 million rather than $19 million last year and $11 million this year.
Hon. Mr. Ashe: The member mixed up the actual investments, which was that last figure I gave him. It was the investment total of $147 million that had been made by the SBDCs into the small businesses. The issued capital of the SBDCs is $156 million; and this is not just fiscal 1982-83, this is cumulative since the start of the program to the end of fiscal 1982. It is the status at April 30, so we are really one month into the new fiscal year. This is the most up-to-date, broken-down figure, but the figure is 30 per cent.
Because of the success of the program last year and the ongoing feeling of the Treasurer that it was successful, we did go back and receive additional allocations over and above that which were approved in the estimates process a year ago. As far as 1983-84 is concerned this was further enhanced in the Treasurer's budget last month.
Mr. T. P. Reid: That indicates we are putting in another $11,600,000 in the one program that really provides some incentive for people to involve themselves in some kind of small business, whether it be manufacturing, tourism and so on.
With this incentive, which I think is certainly a healthy one, and with what the Treasurer has indicated will be a free-enterprise or business- oriented recovery, why is there only $11.5 million this year? We spent or returned $19 million last year. Presumably Canada's and Ontario's economic performance is going to improve and generally the economy is going to be better.
I realize there were additional estimates put in, as the minister has indicated, but how did we arrive at this figure? Is the minister not a little more optimistic that more SBDCs will be formed this year?
Hon. Mr. Ashe: As a matter of fact we made that recommendation to the Treasurer and from that came his budget increase in our allocation, which is not reflected here, to $30 million. In other words, last year in the 1982-83 estimates it was $11 million but our actual was $19 million. In preparing the 1983-84 estimates we put in $11,600,000 because we were following the guidelines for the preparation of our fiscal estimates for the year. However we did suggest a higher figure to the Treasurer. He saw the success of the program from the results and did make some refinements, which increased our allocation to $30 million.
We have already allowed more than a 50 per cent increase over the 1982-83 actuals for what we anticipate out of the program in 1983-84. We have gone from an estimate of $11 million to an actual of $19 million, to a funded program for $30 million in this current fiscal year.
Mr. T. P. Reid: I just want to ask a question on item 9 about the retail sales tax. Is the minister now in a position to give us the broken-down figures of what his revenues were from the retail sales tax last year? Does he have them broken down by sector? What I am particularly interested in is what extra revenue he received from the increases through the Treasurer's budget of 1982, in terms of the expansion of the retail sales tax. How much extra revenue does the minister feel he took in as a result of those programs? In particular, how much extra revenue did he get from the changes in the taxes on meals?
Hon. Mr. Ashe: I do not have that figure. For some parts of that question it would be very difficult to come up with definite figures. For example, a restaurant that used to charge sales tax still does, the only difference is that it now charges it on everything whereas before it was only on 6 and over. We get a return from the restaurant trade as we did before.
The revenues are new from the take-out type establishments. They brought in virtually no revenue before so we do have that broken out and I suppose we can put a handle on that. The only thing I can say is that the anticipated projections out of the budget were not too far out of line, particularly when we are cognizant that it was not exactly an ebullient economy last year.
I cannot be specific on another point regarding the restaurant business either. I cannot give the honourable member the actual dollar figures at this time but I can get them for him. We do know that statistics now indicate the contrary to the gloom and doom statements put forth to us in a certain committee hearing last year. Members were saying it would be the downfall of the hospitality industry, particularly the restaurant and the take-out industry. But the statistics have not borne that out whatsoever. As a matter of fact it has been better in Ontario than any place in Canada.
I know that does not answer the question as posed by the member but I just do not have that breakdown with me. I can provide it to him in due course, if he wishes. I can also tell him that in terms of actual appeals on the retail sales tax and corporation tax areas that are handled by the appeals branch -- I think he posed that question before -- about 90 per cent of their activity is in two areas of taxation, retail sales tax and corporation tax.
Vote 802 agreed to.
Vote 803 agreed to.
On vote 804:
Mr. Charlton: Mr. Chairman, there are a number of issues I would like to discuss with the minister under this vote. Part of the discussion got started under the first vote by some of my colleagues, so I suppose the best place to tie all of this in from the start is to pick up on some of the questions that were asked of the minister earlier and some of his responses.
The member for Etobicoke (Mr. Philip) had raised with the minister the question of assessments on condominiums. In his response the minister had suggested that it would be very difficult for the assessors to keep on top of changes in market value from year to year. He suggested that if a particular type of property had changed dramatically in relation to other properties, perhaps it was just a blip -- or a bump, I think he called it.
I agree it is difficult for the assessors to stay on top of those changes in relative market value that can happen on an annual basis. On the other hand, it should be pointed out the Assessment Act puts an obligation on them to do that. It is difficult, perhaps, because they have not provided for the staffing to do it on an annual basis.
There are certainly difficulties there and I cannot disagree with the Minister of Revenue about them. However, it is the ministry's responsibility to find out why the difficulties are there and to live up to the obligation in the Assessment Act, especially for the municipality that has gone the equalization route under section 86 or 63, or whatever we want to talk about. The obligation is there to make sure the assessment is fair and equitable in the year in which the assessment is made.
I cannot recall the section it is in but it is there in the act. I remember having it drummed through my head some years ago. I agree with the minister it presents some difficulty, but if the difficulty is in stopping the annual review or if it is in setting up a different approach, then so be it. The ministry has to look at it because the obligation is there in law.
The minister commented in his answer that continually changing the assessments every year can cause problems for the tax base of the municipalities. That is true to some degree. On the other hand, not making the annual changes in market value fluctuations can cause even more problems for a municipality if the changes occur after the new rates are set in the appeal process.
I can give some examples from Hamilton of a condominium or group of condominiums whose value has fallen through the floor. In 1980-81 the market generally went down a bit -- about five per cent for residential properties I would guess, although I have not done a full market analysis. The market for condominiums was down from its high point about 33 per cent, and those properties should have got a reduction.
When that reduction does not occur automatically on the assessment roll when it is returned each year, and if those condominium owners appeal to the court and win, that causes far more problems for the municipal council. It causes far more problems for its tax base than if a change had been made on the roll, and their new rate had been set accordingly, based on whatever assessments were actually there. There are problems both ways, but the bottom line is that the obligation in the act is that the assessments will be fair and equitable in the year in which they are being made.
That obligation puts an obligation on the minister and his staff to ensure that if there are major changes in the marketplace for a particular class of property, even though they may be working on a 1975 or 1980 base year, those changes have to be reflected, since they no longer have the same value in 1979 or in 1982, or whatever the year happens to be, in relation to other types of property. The obligation is there to do that.
To repeat, I agree with the minister. It is very difficult for the assessors to do that accurately, annually. If that is true, then we have to find a way to make it easier for them to get that job done. It may mean more staffing or a different approach to annual reviews. I do not have all the answers because I am not in a position to analyse the ministry's staffing requirements across Ontario on an across-the-board basis. The ministry has to find a way to deal at least with that obligation that is set out in the act -- to reflect as accurately as possible every year equitable relationships of market value in a municipality where there is a market value base.
Perhaps I will let the minister respond to that before I get into some other matters I wish to raise.
Hon. Mr. Ashe: Mr. Chairman, again, with regard to the issue of the condominiums and a base year for value, I think the member has acknowledged it is a problem to try to think of changing values or of being that close to the market on an annual basis. I think he also recognizes that in actual property sales we normally run nearly a year behind in any event, so we are really talking about a time frame that is rather difficult.
As the member knows, I announced the four-year cycle on base-year values as a policy. I guess it was last year; it may have been the year before. I guess probably over any reasonable time frame -- not on a year-to-year basis; that I acknowledge -- if the assessment base of a municipality can be kept up to date on a four-year cycle, those ups and downs should not be too onerous because, although right now condominiums in any given municipality may be too high in relation to a single-family home, as I mentioned, there have been times when the reverse held true. The change on an annual basis adds complexity, difficulty and expense we really cannot justify overall over a period of a few years for a very minute change. So the key is the four-year cycle.
There is another thing we have done. Of course, the member recognizes the problem we have with the frozen roll situation. But even with respect to the section 63 municipalities, when we do go in and put a value on a condo based as we are doing now on 1980 values, if the value of condominiums was reduced, again vis-à-vis other kinds of residential property, if it was lower in 1981 or 1982 than it was in 1980, we associate that lower value to 1980.
In other words, let us say 1982 was lower and our base year is 1980. We already give them the advantage of that lower value. I am told that in the city of Hamilton the guideline was exactly the same. When the reassessment was done in 1979 on a 1975 base year, 1978 values for condos were generally used, which were in most cases, I am told, lower than the corresponding 1975 values.
There is already a built-in recognition on a section 63 reassessment of potential lower values of property between the difference in the current year when the reassessment is being done and the base year that is being used. There is no doubt that, as we get further and further away from our four-year-cycle base year, there will be more situations and opportunities where that may occur. In this case we are talking about condominiums, but in another time it may be another class of housing that will get the advantage of the lower value, even reverting back to the previous base year.
I do not think there really is any simple answer to it, and I think even the member acknowledges that. But I think in trying to get a system that is so completely pure we have to weigh whether, over any reasonable period of time, it does add overall purity to the system or fairness to the taxpayer. I suggest that over any reasonable time frame -- I know it is very trite and easy to say "over the long haul"; that is so indefinite -- over a five-year or a 10-year period or whatever, those ups and downs, if you can keep a four-year cycle, would probably serve the purpose in most cases.
As I indicated before, and I am sure the member is quite aware of it from his own knowledge, we have been fighting with the difficulty of conflicting decisions on changing values of condos on frozen roll situations. That is why we have had to take, and in some cases the other side has had to take, the appeal process beyond the first level and in some cases beyond the second level, because they are benchmark decisions we cannot seem to get a consensus on even at the same level of appeal.
There is no doubt that as we further utilize our modern technology -- the Ontario assessment system, etc. -- it is quite possible we will be able to come up with further refinements to recognize quicker changes in the marketplace than even the four-year cycle. At the moment, I must say we will be very pleased when we get on to a four-year cycle and, I hope, ultimately make it mandatory for the four-year update which, as the member knows, in legislation right now is not mandatory and I hope in the not too distant future it will become so.
Mr. Charlton: Mr. Chairman, I would like to make a few more points on this same issue and make a couple of things clear.
First, I do not disagree with the four-year cycle on update of base. That is not the major problem. The minister made a point and it is a good point. For example, in the last round in Hamilton where he was establishing a 1975 base but he was doing the work in 1979, some of the shifts in the marketplace between 1975 and 1979 were reflected in the base his ministry came up with in 1979, even though it was supposed to be a 1975 base. I understand that. That is fine. What I am saying is the extension of that.
What is not happening, or is not happening as it should, is that once that base has been set, whether it be a 1975 base in 1979, for the four years that base is in place they are not actively and accurately staying on top of the major shifts that occur over the four years.
I want to make it clear to the minister that I am not talking about the general market shifts. If a base is set in 1979 and the entire market for all kinds of residential properties drops or goes up, and all are roughly the same, there is no need to make any major changes; it is when one gets a situation as we had in Hamilton where, at one point, condominium town houses had gone from about $30,000 up to and above $45,000.
In a lot of other areas in the province they went higher than that, but that was the average spread for town houses in Hamilton. They dropped from that high of $45,000 right back down to where they started out in the $30,000 range. Last year, in 1982, one could go out and buy a condominium town house for $30,000.
Those condominiums were still assessed, though, at the high end even though the rest of the market had stayed up there or fluctuated by minor amounts between 1975 and 1982. Some areas in Hamilton went down five per cent, seven per cent and even 10 per cent. Some areas went up a little.
The condominiums fell a full third in most cases. That is what did not get reflected. That is what I am talking to the minister about, not marketplace movement but major shifts like that in market value of specific kinds of properties.
Yes, in the initial setting of the base some of that was taken into consideration. But once the base gets set it seems the assessment division is just a little reluctant to take a segment of the marketplace and change it because something has happened. People are being forced into an appeal process and the court system to have that happen, instead of having it happen as it should prior to the return of the roll, which has its advantages.
The minister is right. It causes some problems for municipalities but it would be less of a problem if all those condominiums go into an appeal after the mill rates have been set, and reductions are won based on the marketplace.
Hon. Mr. Ashe: Mr. Chairman, I understand the point the member is making. I cannot disagree with him. I guess what I am saying is that, if we can get to the step of having it reasonably accurate within the four-year cycle, then undoubtedly what he is suggesting may be the logical next step, both in terms of time as well as being able to use our increased capacity to utilize modern technology. There is no doubt in my mind that can and probably will happen in the future.
There are two other points I would like to make. One is I wish I could have some of those $30,000 town houses out my way because we sure do not have any. They could sure be utilized.
Mr. Charlton: They are back up to about $35,000 this year.
Hon. Mr. Ashe: Part of the problem has been solved in the passage of time.
Mr. Nixon: That is what makes market assessment so nice.
Hon. Mr. Ashe: That is right. The passage of time solves a lot of things.
The other point is, and I am sure the member is aware of it, we have a request in from the city of Hamilton to update. It is to be hoped it will proceed with the update of its roll based on the 1980 base. I hope that should correct most of the additional inequities that exist.
Mr. Charlton: Mr. Chairman, there is one other area I want to get into. It is specifically the market value area itself. We have been discussing this on and off for a heck of a long time now. One of the things I have noticed is starting to happen out there in the equalized municipalities -- and I have not been to all of them, but I have been involved in assessment cases and assessment questions in a number of municipalities around the Golden Horseshoe specifically and a couple outside the area, where they have been equalized supposedly based on market value -- is that the assessment staff out there in the province, under the direction of their managers, is trying to cut the whole market value thing just a little too fine. Perhaps they are trying to do too good a job, if that is possible. I will give a couple of examples of what I am talking about.
We have a place in Hamilton called Hess Village. There is one here in Toronto known as Yorkville. They are much the same thing, where commercial people have gone into what was traditionally a residential area and renovated houses into specialty shops, etc. What we had was a situation where in 1975 there were only two sales in Hess Village, and those two sales in 1975 were very high, but the entire analysis for Hess Village was based on those two sales.
What has happened is we have ended up with people stuck at a 1975 base that was created by two sales that were very high, people who could not get the dollars the assessment office says their place was worth in 1975 for love nor money. There is no way they could ever get that value out. There is no way even in the years after 1975, never mind now, that they could ever get that value out of those properties. There was not an extensive enough or broad enough look and, because it was a specialty area, it was analysed in total isolation. There was not enough cross-referencing with similar kinds of properties elsewhere in the city.
We get into a bind by trying to be too site specific. We create a situation which, as it was put earlier, really is a blip or a bump. There were a couple of people who were involved ultimately, as it turned out, five years later in the courts -- in an illegal scam, who created two huge sales that did not mean anything because they had a specific reason other than the ownership of that property for buying those properties at that very high value. Because it is a totally isolated analysis like that, those people are still getting clobbered today because we do not have the 1980 update done yet.
That is the kind of problem we are in. What I have found in many cases such as that is the assessment office becomes very inflexible in terms of making the changes because it involves 30, 35 or 40 properties. They become very reluctant, and they make us go into the court process and fight all those properties in the court, which is exactly what we are doing. We got an adjournment last week. We are going to be hearing those cases over three days in August, but it is a bit ludicrous. I could understand it if there were a real disagreement in terms of the market value, but nobody disagrees at this point.
The Acting Chairman (Mr. Kolyn): I would like to draw the member's attention to the clock.
Hon. Mr. Ashe: I just want to accept the points made by the member and suggest to him no system is perfect. A market value base should go beyond just one or two sales. I do not disagree with him. There may be instances that need some review such as the one he has suggested.
Vote 804 agreed to.
The Acting Chairman: This completes the study of the estimates of the Ministry of Revenue for the province of Ontario for the fiscal year ending March 31, 1984.
On motion by Hon. Mr. Wells, the committee of supply reported certain resolutions.
The House recessed at 6:01 p.m.