The House resumed at 8 p.m.
The following bills were given third reading on motion:
Bill 86, An Act to amend certain Acts respecting Regional and Metropolitan Municipalities.
Bill 87, An Act to amend the Police Act.
INSTITUTE OF MANAGEMENT CONSULTANTS OF ONTARIO ACT
Mr. Shymko moved, on behalf of Mr. Robinson, second reading of Bill Pr26, An Act respecting the Institute of Management Consultants of Ontario.
Motion agreed to.
Third reading also agreed to on motion.
House in committee of the whole.
HEALTH DISCIPLINES AMENDMENT ACT
Consideration of Bill 92, An Act to amend the Health Disciplines Act.
Hon. Mr. Wells: Mr. Chairman, I have several amendments to the bill. The first amendment I would like to move is to subsection 64a(3) of the act.
On section 1:
The Acting Chairman (Mr. Robinson): Before you do, may I inquire whether there is any previous discussion on section 1? If not, is it the pleasure of the House that section 1 carry?
Mr. Nixon: Wait a minute, Mr. Chairman. I appreciate that the minister has an amendment to section 64a of the act, which is part of section 2 of the bill, but I just want to be sure before we carry the first section as to whether my colleague, the member for Hamilton Centre (Ms. Copps) was fully in approval of that.
Mr. Nixon: She agrees that it may be carried; so you may do so.
The Acting Chairman: That is particularly generous of her, I am sure.
Section 1 agreed to.
On section 2:
The Acting Chairman: Hon. Mr. Wells moves that subsection 64a(3) of the act, as set out in section 2 of the bill, be amended by striking out "other persons" in the second line and inserting in lieu thereof "persons licensed as medical practitioners in other jurisdictions."
Hon. Mr. Wells: Mr. Chairman, I think this follows along with the comments that were made during the second reading debate. There was some question among some members as to what "persons" meant and who might be the persons there.
It is obvious that if the bill were written without this amendment, "persons" could be nonlicensed medical practitioners or indeed could be anyone. Since this is a section on peer assessment, the person or persons who might be chosen who are not members of the college in Ontario should be licensed practitioners in some other jurisdiction. This means they will be medical doctors from some other jurisdiction.
Mr. Nixon: Mr. Chairman, under what circumstances would one want medical practitioners from another jurisdiction to undertake peer assessment of our practitioners?
Hon. Mr. Wells: There are a number of occasions in specific, very specialized specialties where one might want to bring in a doctor from British Columbia, Nova Scotia or Montreal to be one of the assessors. This would allow us to do that.
In the other reference, where it says "members of the college," it means only those who are licensed to practise in Ontario. For instance, my friend will recall in the inquiry of the Hospital for Sick Children, one of the doctors taking part in the Dubin commission was from British Columbia.
Mr. McClellan: Mr. Chairman, I am not sure I understand the original intention of the statute. I understand very clearly what the amendment is. The amendment is designed to make sure that people who are not medical doctors are not permitted to go into a doctor's office and read the medical records of a patient. However, it sounds very much as though the original intention of the ministry when it drafted the bill was to establish committees on peer assessment which were made up of a combination of medical doctors and lay people.
Either as a matter of historical interest or morbid curiosity. I would be interested to know whether it was the intention of the ministry when it drafted the bill that the committee on peer assessment would include other than medical doctors or whether there was just an inadvertent slip in the drafting of the bill that would have permitted unlicensed practitioners to examine the medical records of patients in the province. I wonder whether the minister could respond to that.
Hon. Mr. Wells: No, Mr. Chairman, it was never the intention that nonmedical practitioners would be part of the peer assessment. It was always intended that it would apply basically to licensed practitioners from other jurisdictions than Ontario. We cannot put in the word "doctors" because it is not easily definable; so the word "persons" was put in.
As my friend the member for Brant-Oxford-Norfolk (Mr. Nixon) always says, this is a great example of the benefit of good, healthy debate in this Legislature. On second reading, it was drawn to our attention through the asking of the questions that "persons" could be misinterpreted and therefore we are bringing forward this amendment.
Mr. McClellan: I have just one other question. What is the actual composition of the committee on peer assessment? Can the minister give us some idea of how many people will be participating in this process and how they will be selected?
Hon. Mr. Wells: I assume the honourable member is asking about the committee on peer assessment that would review the reports the assessors gave. That committee is made up of four MDs and one lay person.
Mr. McClellan: Where is that set out?
Hon. Mr. Wells: That is set out in the Health Disciplines Act. Usually the peer assessment is done by two people. The committee on peer assessment, which consists of four MDs and one lay person, actually does the appointing of the people and then gets the reports back.
Ms. Copps: Mr. Chairman, on the same point:
Am I to understand that the committee on peer assessment is made up of four members who appoint peers who will review their peers? Is that how it operates?
Hon. Mr. Wells: That is correct, Mr. Chairman.
Mr. Nixon: I am sure I should be aware of this information, but what triggers the assessment? Let us suppose there is a hypothetical case where a member of this House had information brought to him or her that indicated a medical practitioner was, in the view of some nonprofessional people, not performing up to the standards normally expected. How might the MPP trigger a peer assessment? Does the minister know that, or is that an unfair question from his previous experience as Minister of Health? Otherwise, I could find out by writing a letter, as perhaps I should have.
Hon. Mr. Wells: No, it is a fair question. I cannot answer the honourable member's question in terms of whether a peer assessment could be generated by a member of this Legislature.
The peer assessment basically occurs from a random selection process where in certain areas and certain specialties certain doctors are picked each year. It is not in response to particular claims or problems a member might bring forward. If there were a problem in that regard, I suggest it probably would go to the discipline committee of the college and that committee would look at the problem.
A peer assessment is a process that works on a regular, ongoing basis. It is like a spot-checking process that goes on. The peer assessment committee makes a random selection of doctors and gets the reports back. It is an ongoing process.
As I said in my opening remarks, a lot of it is educational, because of all the cases I indicated, there were very few, if any, in the pilot projects that have gone on that resulted in any drastic action. The whole thing is an educational process because it leads to interviews and talks about the practice with the doctor in the peer assessment committee.
Mr. Nixon: In our committee debates sometimes there is quite a bit of give and take on a subject. I wonder if the acting minister would not agree that between a reference to the discipline committee of the college and taking no action at all, there is a very large area wherein community complaints of a doctor are difficult to act upon. My own experience is that for the college to take action on community complaints, their investigations have to turn up from what we might call far-reaching, unprofessional conduct.
It seems to me that we, as a Legislature, might establish a procedure short of the very serious professional misconduct charges that would trigger the discipline committee to move into action. It would be very nice if there were some procedure whereby a member or anybody else in the community who might have the ear of the college might have an assessment take place.
It seems to me that anything that would trigger a disciplinary reaction would be extremely serious indeed. Yet I think the acting minister might be able to imagine circumstances -- certainly I can, from my own experience -- where the weight of the college might be brought to bear on one of its members who is something short, at least in its eyes, of it being necessary to be subject to actions of the discipline committee and that it might be able to assist the doctor in getting his or her act together.
I feel quite strongly about that, having experienced the circumstance that continues in my own knowledge, where I believe peer assessment might be at least part of the answer since the college does not feel it has grounds or cause for the more severe and almost terminal disciplinary action.
Hon. Mr. Wells: I am sorry; I should have remembered to say that as well as the discipline committee, the college has a complaints committee. The complaints committee can admonish a doctor and can handle a thing in a far less severe manner than the discipline committee. We have the complaints committee where any member who had a problem could direct that problem. Then there is the discipline committee, but the peer assessment program is sort of beyond that; it is an ongoing spot-checking program by peers of their peers in the province and random selection going on all the time quite apart from specific complaints.
Mr. Nixon: I cannot wait until the random selection gets this guy.
Hon. Mr. Wells: It is just like one's income tax.
Ms. Copps: Obviously I am in full support of the amendment, but I think there may be a bit of discrepancy. I believe the minister's intention in moving the amendment to subsection 64a(3) of the act is to ensure that all those who have access to the records are persons who are licensed as medical practitioners either in the province of Ontario or otherwise.
However, I understand from what the minister has said about the composition of the committee on peer assessment, that it comprises three medical practitioners and one layperson, and that under section 2 of the bill, in subsection 64a(5)(c) of the act, the peer who is appointed to do the assessment is required to provide to the committee any "information requested by the committee or the assessors, as the case may he, in respect of the care of the patients by the member or by the member's records of the care of the patients."
I understand the minister is not prepared to support our amendment, which would clarify that once and for all, but it appears that on the one hand he is moving an amendment to make sure those peers who are doing the assessment are covered under the ethical requirements of the college or other colleges, and yet the information that would be available to the committee is information that would be available not only to medical practitioners but also to at least one lay appointee who would not necessarily be bound by the regulations of confidentiality that the minister is attempting to apply in the amendment.
There appears to be an inconsistency and I wonder if the minister could speak to that.
Hon. Mr. Wells: As I think my friend will notice, the composition of the peer assessment committee is not laid out in the bill. It merely says the council may establish a committee on peer assessment. As I said, that committee would be appointed probably from four medical doctors and one lay person. I assume the lay person would be one of the people already on the College of Physicians and Surgeons of Ontario committee as one of the Lieutenant Governor in Council appointees.
There are already lay people on the discipline committee and on the complaints committee. To get at the problem my friend has stated about confidentiality, one should read section 65 of the Health Disciplines Act.
"65(1). Every person employed in the administration of this part, including a person making an inquiry or investigation under section 64, any member of the council or a committee, shall preserve secrecy with respect to all matters that come to his knowledge in the course of his duties, employment, inquiry or investigation under section 64, and shall not communicate any such matters to any other person, except"
-- and then there are the qualifications which are the normal ones:
"(a) as may be required in connection with the administration of this part and the regulations and bylaws or any proceedings under this part or the regulations; or
"(b) as may be required for the enforcement of the Health Insurance Act;
"(c) to his counsel; or
"(d) with the consent of the persons to whom the information relates."
Therefore the secrecy provisions apply to the medical doctors through the oaths they take and so forth, and also under section 65 to the lay people on the committees.
Mr. McClellan: I had thought I understood the bill but as we proceed I am becoming, as is not uncustomary, more confused. Perhaps the minister could explain something to me.
Is my understanding correct that there is no relationship between the work of the committee on peer assessment, which is described in section 2 of our bill, and the work of the discipline committee of the college which is set out in section 1? Am I correct in understanding that these are two separate functions and there is no relationship between them?
Hon. Mr. Wells: That is right. There is no direct relationship. However, if the peer assessment committee felt a case that came to its attention warranted some kind of further action it could be referred to the executive of the college. It could then find its way back to the discipline committee. However, it is not directly connected so that it would move right on to the discipline committee.
Mr. McClellan: I may be hopping forward, but I think if we ask this question now we can perhaps clear it up. What then is the purpose of subsection 6? As I understand it, it prohibits the peer assessment committee from taking information from the peer assessment and using it as the basis of a complaint before the discipline committee.
If that is correct, if there is that clear and absolute separation between the work of the peer assessment committee and the work of the discipline committee then the kind of thing the minister had stated was a possibility in his answer to my previous question simply could not happen. The information that the peer assessment committee managed to obtain as a result of its perusal of the records of the individual doctor could not be referred to the discipline committee, unless I am missing something somewhere.
Hon. Mr. Wells: No. I do not think my friend is missing anything. I think he is quite right. It means one cannot take the information the peer assessment committee has pulled together, take it all as if it were a case, put it into the discipline committee and use that material.
Obviously, if that were the idea the whole peer assessment program would fall. The medical profession itself would be concerned that this was not an educational peer assessment to upgrade standards but was perhaps a witchhunt to look for malpractice or things like that, which it is not.
I cannot explain. I would have to talk to the college people to know exactly how one jumps from the peer assessment to the discipline committee, but the clear indication is that once a doctor is referred to the discipline committee it then has to start its own investigation, look at his records and do everything over again, because it destroys the integrity of the peer assessment program if doctors think it is being used and could be used holus-holus for the committee.
Motion agreed to.
The Acting Chairman: Shall the section as amended carry?
Ms. Copps: I have an amendment to section 2.
The Acting Chairman: Ms. Copps moves that subsection 64a of the act as set out in section 2 of the bill be amended by adding thereto:
"(7) During a peer assessment program conducted in accordance with subsection (2) the identities of all patients shall be removed from records and or documentation used in the peer assessment."
Ms. Copps: Mr. Chairman, I believe the intent of this amendment was elaborated on during the discussions we had before we moved into committee of the whole. In particular, I am trying to address the issue of patient confidentiality. The chairman will no doubt be aware that the Minister of Health has attempted, amendment was elaborated on during the discussions we had before we moved into committee of the whole. In particular, I am trying to address the issue of patient confidentiality. The chairman will no doubt be aware that the Minister of Health has attempted, through the amendment we have just passed, to address the issue of confidentiality as it deals with interprofessional agreements and the whole question of secrecy or confidentiality in dealings among physicians either within this jurisdiction or in other jurisdictions.
It is my intention through this amendment to carry that one step further in the hope that this Legislature is committed to the guarantee of confidentiality for every patient. Specifically I believe that since the minister by regulation has allowed physicians, where necessary, to guarantee patient confidentiality -- and I believe he has discussed possible areas of concern such as psychiatric care -- he has agreed there may be instances where the patient's identity should be removed from the record.
It is our contention, in the interests of the pursuit of patient confidentiality, that patients' identities should be known only to their own physician. The peer assessment should have full access to all the files and medical records but no access to the identity of individual patients. I think it is clear that in the program of peer assessment that has operated in the past we have certainly seen very few, if any, breaches of confidentiality, but we do believe this amendment would inscribe in law a right that should be accorded to every patient.
I think it is clear that the intent of this legislation is to legalize the practice that has been carried out on an informal basis for some time. In that legalizing, we think the minister should not only look at the rights and the responsibilities of doctors to be subject to peer review, but also the rights of patients to have their identity stricken from the record in a case of peer review.
It is in that regard that we are suggesting by this amendment that patient confidentiality be a prerequisite in all the work that is done by the committee on peer assessment and also by reviewers who are appointed by the peer assessment committee.
I understand and reiterate again that the minister has suggested in the Legislature, as well as in his opening statement, that there are occasions where a doctor may choose to keep confidential the identity of the patient in the peer review process. It seems to me the fundamental question is that the decision about the identity remaining confidential should not be the choice of each doctor but should rather be a right accorded to every patient in this province.
I believe if I enter into a fiduciary relationship with a physician it is not with the intention of having my files perused by any other physicians whether they be associated with the college in Ontario or in other jurisdictions. By the present wording of the review amendment the minister is only allowing that particular confidentiality to be accorded at the request of the physician and is not granting that bona fide right to every patient in Ontario.
I think it speaks to the issues that were raised many years ago by the Krever commission and which this government has not seen fit to address to date. I believe that support of this amendment would be one small step towards allowing patients in Ontario, when they are in consultation with physicians across this province, the right to have confidence that their files will not be perused by any other physician or any other individual who may be party to the peer assessment review we are going to be voting on tonight.
The Acting Chairman: Just before I call on the member for Bellwoods (Mr. McClellan), I want to recognize a Scout troop from Humber West that was recently in the west gallery and has now departed.
Mr. McClellan: Mr. Chairman, you are not allowed to introduce people who are not here.
I do not intend to support the amendment, although I appreciate that the Health critic for the Liberal Party has pointed out an original defect in the bill that is before us. My sense is that the amendment from the minister that was introduced tonight has solved the problem. Before the amendment was introduced we had the strange situation where assessors were simply defined in the bill as persons and could be either licensed practitioners or lay people. These assessors would have the power to go in and inspect the medical records of the patients of any doctor who was being reviewed by the committee on peer assessment.
The amendment has now changed the bill so that assessors have to be licensed medical practitioners. I think it is sufficient that the code of ethics of the medical profession will safeguard the rights of patients whose records are being read by assessors.
There is a particular difficulty with the amendment the Liberal Health critic has introduced because it would require any physician who is being assessed by a committee on peer assessment either to keep a double set of records, one anonymous and one with the patients' names on them, or else they would have to go through all their records with a magic marker and blot out each and every name. There are some real practical problems around the implementation of this amendment.
I do not know how many patients the average physician has on his roster at any time. I would imagine it would be several thousand. Any practitioner who is being assessed by the committee on peer assessment would be immediately faced with the monumental task of going through all the records with a magic marker or some other deleting device and wiping out the identities of all the patients.
First, this would require the duplication of the entire set of files. I do not understand how else they could do it. They would have to duplicate their entire set of files and then take the duplicated copy and go through it with a magic marker and strike out the name of the patient each and every time it appeared on each and every single individual file.
Some of us have had that experience with some of our select committees. The select committee on the Ombudsman tries to anonymize its cases. It is a tremendous amount of work even to do it on a single-case basis, let alone ask a doctor to do it for his entire case load.
I do not think the solution proposed is a practical one. More importantly, quite frankly we have to depend on the code of conduct of the medical profession itself to safeguard the rights of patients whose records are being read. After all, an individual doctor often will consult with one of his colleagues with respect to treatment of individual patients without necessarily obtaining formal consent from the patient to do that.
I think the profession itself has developed ways and means of operating on a collegial basis as well as on an individual basis with respect to patients in ways that do protect the rights of patients to confidentiality. I assume any betrayal of the kind of confidences that are afforded to the committee on peer assessment would themselves be referable to action under the Health Disciplines Act itself.
In summary, I think the minister has remedied a defect in the bill with his amendment tonight and that the second amendment before us is not really necessary.
Hon. Mr. Wells: Mr. Chairman, I appreciate the concerns my friend the member for Hamilton Centre has. Certainly we want to be sure the confidentiality of patients is not illegally breached or that patients have any real concern that this might happen. I have to think we have taken all the necessary steps that can be taken to guarantee that, while still not allowing to happen some of the things that the member for Bellwoods indicated.
It would be difficult for a doctor if a peer assessment were to occur, and usually these occur, I gather, perhaps spontaneously. If that were to happen he would then somehow, through a lot of work, have to remove all names from the patient records he has. I have no figures to know how many do this, but I am told, for instance, that some doctors in family practice keep their records by families rather than by individual patients. In other words, they might have my file, my wife's file and my three kids' files all in one file.
If all the names were removed, it would be difficult for a person to be able to assess that unless somebody went to all the trouble to change it to patient A, patient B, patient C. patient D and patient E, and made sure everything in that file was absolutely in order and in the right place.
I believe we can guarantee the confidentiality by amending section 65 to make it clear that subsection 64a, which is the new section on peer assessment, applies in that section. It would any way but we are going to move an amendment in a few minutes actually to mention it in that section which establishes -- I read the section a few minutes ago -- that people who are taking part in any of these assessments or on any of the committees or have anything to do with the peer assessment program must not communicate anything they see to anyone else.
This is the same as what now occurs in investigations under various other sections by other committees of the college.
I really think we have to give this program a chance to operate. It has been operating as a pilot project -- not as a pilot project, but it has been operated by the college without the benefit of being in the legislation. It will now be in the legislation. I think the college is aware of those matters and those areas where confidentiality has to be assured. It has made arrangements with doctors who want to keep certain patients' names private and not available to the assessors.
It has taken steps to ensure that all the safeguards will be followed. I do not think we need to turn the program around, which this amendment would do, and make it so that every doctor had to take all the names out of his records before peer assessment could happen. I think that would probably lead to a gradual diminution of the program. For those reasons, we cannot accept the amendment.
Mr. Chairman: All those in favour of Ms. Copps' amendment will please say "aye."
All those opposed will please say "nay."
In my opinion the nays have it.
Section 2, as amended, agreed to.
On section 3:
Mr. Chairman: Hon. Mr. Wells moves that the bill be amended by adding thereto the following section:
".3 Subsection 65(1) of the said act is amended by inserting after 'section 64' in the third line and in the sixth line 'or a peer assessment under section 64a.'"
Hon. Mr. Wells further moves that sections 3 and 4 of the bill, as printed, be renumbered accordingly.
Hon. Mr. Wells: Mr. Chairman, I think I have explained what that does. I read the section a few minutes ago. This is the section that admonishes everyone to keep the information that comes into his hands confidential. It now specifically mentions this program in that section.
Ms. Copps: Mr. Chairman, when the minister was clarifying that earlier on, he mentioned something about breach of confidentiality. I do not have a copy of the full act in front of me, but I wonder if he might elaborate on the suggestion that the breach of confidentiality was allowed in investigations with respect to the Ontario health insurance plan.
Hon. Mr. Wells: The section says that in the course of his duties he "shall not communicate any such matters to any other person except,
"(b) as may be required for the enforcement of the Health Insurance Act."
That exception is in there. I do not have a copy of the Health Insurance Act here, so I cannot tell the member what that says. But I assume there are various things there that if one is to get at someone who might be fraudulently using the Health Insurance Act, it may be necessary to make that known to the people who are doing the investigation.
Motion agreed to.
Section 3 agreed to.
Sections 4 and 5, as renumbered, agreed to.
Bill, as amended, ordered to be reported.
On motion by Hon. Mr. Wells, the committee of the whole House reported one bill with certain amendments.
DISTRICT MUNICIPALITY OF MUSKOKA AMENDMENT ACT
Mr. Rotenberg moved, on behalf of Hon. Mr. Bennett, second reading of Bill 106, An Act to amend the District Municipality of Muskoka Act.
Mr. Rotenberg: Mr. Speaker, the purpose of the bill is to make a number of minor amendments to the District Municipality of Muskoka Act. Briefly, the bill will enable the district to determine the charge to the public for providing copies of municipal documents. It will clarify the power of the district to collect utility debts and reinstate the district's ability to establish reserves.
As has been done previously in the Municipal Act, the bill will increase the interest accumulation rate on debentures, and sinking and retirement funds from five to eight per cent. It will extend to the district the provisions of the Municipal Act which enable a municipality to operate in English or French or English and French.
The bill will delete the emergency measures provisions since the new Emergency Plans Act makes these provisions unnecessary. In addition, it will delete the boundary adjustment provisions since boundary adjustments are now dealt with in the Municipal Boundary Negotiations Act.
As I have indicated, the principles of all these matters have been dealt with in other acts already. I would urge the passage of this bill by the House.
Mr. Epp: Mr. Speaker. I am glad to rise on behalf of our party to indicate to the House that we intend to support this bill. As the parliamentary assistant has indicated, it is largely a housekeeping bill, but I have one or two concerns he may address his remarks to later in summing up. One is on section 6 where the bill indicates that a municipality during times of war, invasion or insurrection may acquire property outside of that municipality.
I wonder if the parliamentary assistant could indicate why the ministry has suddenly decided to insert this clause in the bill. Is there any reason to believe we are going to have a war, invasion or insurrection? What particular mental strain has he gone through to indicate that a municipality should then set up a municipal government outside of that jurisdiction? Maybe he could indicate whether that would be within the county, region or province, or whether it would be in Hawaii or some other place in the world where they might have a sunnier climate. Would he clarify that for us? I could not detect it from the act itself.
Mr. Rotenberg: Did you say section 6?
Mr. Epp: It is in the explanatory notes where it indicates the municipal council may hold meetings outside the municipality during times of war, invasion or insurrection and to acquire property for that. In giving Muskoka this right or privilege, does the minister intend to extend that privilege to all other 834 municipalities? If so, perhaps he can give us a clarification on why that is necessary at this time. Does it have something to do with the motion that is coming up in a private member's bill this Thursday on setting up a nuclear-free zone or is there some other explanation for it?
The Deputy Speaker: I think we all appreciate that the parliamentary assistant could no doubt answer your comments in his summation.
Mr. McClellan: I had intended to raise precisely the same question that was raised by my colleague the member for Waterloo North (Mr. Epp).
In an interjection the parliamentary assistant said he did not see anything in the bill that addressed the concerns he was raising. I refer him to the explanatory note referenced under subsection 6(1), which says that section 128 is being added as a section of the Municipal Act to apply to the district of Muskoka. Section 128 permits a municipal council to hold meetings outside of the municipality during times of war, invasion or insurrection and to acquire property for that purpose.
As I understand the statute, we are giving the power to the district municipality of Muskoka through its council to purchase a property somewhere in the world to which the council may retire in the event of war, invasion or insurrection.
Mr. Epp: War is not defined, so it could be some little local brush fire.
Mr. McClellan: Yes. I suppose an invasion could apply to the last municipal elections in the district of Muskoka when it was invaded by a number of cottagers from the municipality of Metropolitan Toronto. Perhaps that is what the parliamentary assistant has in mind.
I am sorry the member for Muskoka (Mr. F. S. Miller) is not here this evening. I am sure he would be privy to any requests that had been made by the municipal council of Muskoka for permission from the government of Ontario to acquire property in the event of war.
Perhaps the parliamentary assistant will be able to tell us where the district council of Muskoka would like to retire in the event of a nuclear holocaust. In short, we are quite baffled and perplexed as to why the good people of Muskoka would be concerned about being able to hold meetings outside their municipality in the event of a war.
This legislation is obviously important for the government since it is one of the priority bills that is being brought before us in the current session of the Legislature. Perhaps the parliamentary assistant can tell us why he needs to give the power to the municipal council of Muskoka to move outside its boundaries in the event of war. Perhaps he can shed some light on the perplexing question as to where they would go in order to be safe because I am sure all of us would like to have the same information, particularly in the event of a nuclear war.
Second, I am confused about the other amendments referenced in subsection 6(1). In the baffling language of the explanatory note, it states that this adds section 104a to the District Municipality of Muskoka Act. Section 104a clarifies the ability of Ontario municipalities to enact enforceable bilingual bylaws and to conduct their proceedings in English or French or English and French.
Again, I would like to know from the parliamentary assistant whether they have received a request from the district municipality of Muskoka to give it permission to hold bilingual meetings in both of this country's official languages.
My reading of the Municipal Act -- I am reading from section 7 of the act -- suggests that the power of municipalities to conduct their proceedings in English and French or English or French is a totally discretionary power. Again, the language of the explanatory note says what we are doing is clarifying the situation with reference to the district municipality of Muskoka and later in Bill 107 we will be clarifying the situation with respect to Oxford county.
My understanding is that this does not clarify things at all. It simply says they can be bilingual if necessary but not necessarily bilingual. What is the purpose of this section? Is it the expectation of the government that proceedings of the district municipality of Muskoka will, as a result of this statute, take place in both official languages or what?
Mr. Rotenberg: Mr. Speaker, there are two matters before us and I would like to deal with both of them.
In both matters, as I have indicated, these sections were amended in the Municipal Act last year. As is our custom, because the Municipal Act does not apply to regions and each region has its own bill, we are making the regional bills concurrent. They read the same, and we are giving the regions the same powers as is the case with the municipalities which are not part of regions.
This is not necessarily at the request of Muskoka. It is simply to bring the Muskoka act up to the same powers and duties as other municipalities. Normally, this bill would have come forward last year shortly after the Municipal Act amendment, but because of other more pressing business last fall, which continued in January, we did not get this bill introduced until now.
With all respect, explanatory notes are not legislation and sometimes they confuse more than they clarify. Section 128 of the Municipal Act, if I might quote it to satisfy the apprehensions of the member for Waterloo North, says: Where real or apprehended war, invasion or insurrection is proclaimed to exist under the War Measures Act (Canada)" -- so it is only when it is proclaimed to exist under the War Measures Act the meetings of any municipal council may be held at any convenient location within or outside the municipality, and the council of a municipality may acquire and hold such land at such locations and erect such buildings thereon as may be convenient for such purpose and for any other purpose in the municipality."
So this section 128 now becomes part of the District Municipality of Muskoka Act and only kicks in when there is a proclamation by the federal government under the War Measures Act of Canada. I think that clarifies it in that situation.
Mr. McClellan: Where should they hold their meetings? Tell us where.
Mr. Rotenberg: It is permissive to the municipality. If Muskoka wishes in that circumstance, it may hold its meetings outside the municipality if it deems it necessary and may acquire property. I hope that answers the question. I will allow a further question when we are in committee.
Mr. Epp: If the parliamentary assistant would allow a question because --
The Deputy Speaker: I am sorry, we are not in committee; we are still on second reading.
Mr. Epp: We will have to let it go to committee then because I want to raise some other points. I was trying to avoid it going to committee, if the parliamentary assistant could indicate whether or not they have to sell that property immediately afterwards. They could hang on to it for the next 100 years and that would be the excuse to get some land. They could buy land in Hawaii and have their meetings there from now on. It is just like the time when some of them in Muskoka wanted to have their meetings in Toronto.
The Deputy Speaker: If the parliamentary assistant would accept a question at this point --
Mr. McClellan: I think if we have questions we should complete second reading debate and put it into committee of the whole.
Mr. Rotenberg: Mr. Speaker, with respect, I am more than anxious to assist the other members, but I will bow to your ruling.
The Deputy Speaker: If the member speaking will accept the question, that is quite permissible at this stage in second reading. If the member for Waterloo North has completed his question, is there a short answer by the parliamentary assistant that might answer his question?
Mr. Rotenberg: Mr. Speaker, I am afraid I do not have a short answer at the moment, but I think one is coming to me.
Mr. Epp: On a point of order, Mr. Speaker: This seems to be developing into an important discussion on this matter. I suggest that rather than have this question and answer period during second reading, we should refer it to the committee of the whole. That would give the parliamentary assistant more time to find out what the answers are, since he was not even aware that this section was in there.
The Deputy Speaker: Is the member for Waterloo North then withdrawing his question?
Mr. Epp: Yes, I am.
Mr. Rotenberg: I was aware the section was in. I simply was not aware for the moment what the honourable member was referring to in the bill.
These sections are similar to the section 128 we passed recently. At that time I did not think there was any apprehension about the section. It does allow a municipality to acquire property. To the best of my knowledge, it is similar to acquiring property. I do not think there is anything in the act that requires a municipality to sell it when the proclamation is over.
If that is the situation and if this is a concern of the member, and there may he a valid concern, I would suggest with respect that it should not be done just to amend the District Municipality of Muskoka Act. We should have a look at section 128 of the Municipal Act which applies to all the other 800 municipalities in the province where there is some necessity for requiring a sale and disposal of the land by the municipality after the War Measures Act proclamation ceases. That is something that should be looked at in general legislation.
I want to point out to the member for Bellwoods (Mr. McClellan) that this has nothing to do with any present, current or possible future emergency. Again, it is put in so that the district municipality of Muskoka has the same powers as other municipalities throughout the province.
As far as the English or French is concerned, this is to make the District Municipality of Muskoka Act concurrent with the rest of the Municipal Act. This was in Bill 150, which we passed just a year ago. It allows any municipality at its own discretion to conduct proceedings in the English language, in the French language or in both languages. That is what we have passed for all municipalities in the province. That is what everyone else in the province has. Whether Muskoka wants it or not, we want Muskoka to have that power for the future. That is why that is here.
These sections, as well as the other sections in the act, are simply to allow Muskoka the general powers other municipalities in the province have. Later this evening we will be doing the same for Oxford and later this session we will be doing the same for some other regional municipalities to bring their acts up to date with the general Municipal Act.
Mr. McClellan: This is a very, very important way to spend our time.
Mr. Rotenberg: Mr. Speaker, it is important to the various municipalities to have these things done. It would seem to me they could be done reasonably quickly, because the principles have been adopted by the House. It is far more important for us to spend five or 10 minutes on Muskoka or Oxford than to have continuous speeches as we had this afternoon saying the same thing about another bill.
Motion agreed to.
Bill ordered for committee of the whole House.
COUNTY OF OXFORD AMENDMENT ACT
Mr. Rotenberg moved, on behalf of Hon. Mr. Bennett, second reading of Bill 107, An Act to amend the County of Oxford Act.
Mr. Rotenberg: Mr. Speaker, very briefly, this bill is very similar to the one we have just discussed. It adds the same provisions to the County of Oxford Act as were added to the District Municipality of Muskoka Act.
Mr. Epp: Mr. Speaker, the parliamentary assistant is quite correct. It is essentially the same as the bill we have just discussed with respect to the district municipality of Muskoka.
Therefore, my comments relating to section 6 in the previous bill also relate to section 6 in this bill. I presume the parliamentary assistant will get the full answer for us when we deal with these in committee so that we can have a clarification, particularly of that section. Therefore, I will terminate my comments with those words.
Mr. McClellan: Mr. Speaker, my colleague was entirely correct. Once again, we have a number of housekeeping amendments, some of which are obviously quite useful. However, then we have this utterly bizarre addition of section 128 of the Municipal Act giving, I assume, the county council of Oxford the power to hold its meetings outside the county during times of war, invasion or insurrection and to acquire property anywhere in the cosmos, I assume, to hold its meetings in relative peace and quiet.
I am disturbed by all the noise of a nuclear war or an invasion, or even a conventional war or an apprehended insurrection. Since I have discovered this evening that we are permitted to ask questions during second reading debate, is it the intention of the government to proceed through each of the 800-plus municipalities over the course of the next few seasons and to move these amendments?
The Deputy Speaker: Does any other honourable member wish to participate?
Mr. Rotenberg: It is customary on second reading for all the questions to be asked, and then I will answer them at the end. So I assume --
The Deputy Speaker: Order. The comments of the parliamentary assistant are not in order yet, unless we have established that no other member wishes to participate in the debate. If not, the parliamentary assistant.
Mr. Rotenberg: Very briefly, section 128 is already enacted for probably 750 to 800 municipalities in the province as part of the law of Ontario. It just does not yet apply to some of the regions, because the regional acts have not yet been amended so that section 128 applies. It applies, as I say, to the vast majority of the municipalities in this province. I cannot remember any members at the time objecting to the enactment of this legislation.
Mr. R. F. Johnston: You'd better get a list prepared of where these people are going to meet during the insurrection.
Mr. Rotenberg: With respect, Mr. Speaker, this is --
Mr. McClellan: Don't you know?
The Deputy Speaker: Order. The parliamentary assistant will continue with his remarks.
Mr. Rotenberg: Mr. Speaker, it is interesting that when we get what is considered to be a housekeeping bill, there are always people who can find something to talk about to take up the time. Of course, it is the right and the duty of every member of the Legislature who has a concern about a bill; it is the right and the duty of every concerned member to bring these things forward.
I simply want to stress that this is what is known as permissive legislation. It does not require the municipalities so to do. It simply gives Oxford the power, if it so desires at the time of an insurrection, war, etc., to set up emergency government if it wants to. There is no requirement so to do. Almost every municipality now has that power. On that basis, I think I have answered the question. I have no further comment on the bill.
Motion agreed to.
Bill ordered for committee of the whole House.
House in committee of the whole.
DISTRICT MUNICIPALITY OF MUSKOKA AMENDMENT ACT
Consideration of Bill 106, An Act to amend the District Municipality of Muskoka Act.
Mr. Rotenberg: Mr. Chairman, I have no comments at this time, unless there are questions.
Mr. Epp: I have some.
The Acting Chairman (Mr. Robinson): To which section are your comments directed?
Mr. Epp: Section 6.
Mr. Renwick: What about section 3?
The Acting Chairman: If you will bear with me, I will call the sections preceding section 6.
Sections I and 2 agreed to.
On section 3:
Mr. Renwick: Mr. Chairman, I just want to register my personal objection to "a lien on the property of persons who fail to pay public utility bills." I have a personal aversion to the public utility companies having that power.
Section 3 agreed to.
Sections 4 and 5 agreed to.
On section 6:
Mr. Epp: Mr. Chairman, can the parliamentary assistant clarify section 6 for us? He indicated earlier, during the course of second reading, that more than 800 other municipalities had this power, during a war, insurrection or invasion, to move their site of government to some other municipality and or some other location.
I wonder whether the drafters of this resolution took into consideration two things. First, were they really considering the implications of allowing a municipality to move its site of government to some other place in the world? Second, once the war, insurrection or invasion was over, would the municipality be able to keep the property it supposedly purchased or leased, or whatever the case might be, for years to come and hold its meetings there?
There is no clarification in the legislation on this very important matter, and I wonder whether the drafters of this legislation and the legislation as it is incorporated in all the other acts pertaining to regions and other municipalities considered the implications of that. If we can get a clear answer to that, we can deal more directly with the legislation.
Mr. Rotenberg: First, Mr. Chairman, my reading of section 128 would allow the holding of meetings outside the municipality only during the period where we are under the War Measures Act proclaimed by the federal government. Once that is over, the normal provisions would apply and the municipality would have to hold its meetings as the other section of the Municipal Act dictates.
As to the acquisition of property outside the municipality, there is nothing in the Municipal Act which would require the municipality to sell the land at the end of that period. It may sell the property; it would not be mandatory to sell the property.
From time to time, municipalities do hold property outside their municipal boundaries. Probably the best example of that is the site of what is known as the city of Toronto jail farm. Many years ago, the city of Toronto acquired many acres in Richmond Hill at the corner of Yonge and Highway 7. Some people now want to put a domed stadium on that land. The city of Toronto acquired that site many years ago -- 40, 50, 60 or 100 years ago. The city still owns the property and there is nothing in the Municipal Act compelling the city to sell that property.
Municipalities do have the right, other than in this section, to hold property outside their boundaries. This gives them power to acquire the property for that purpose; it does not require them to sell it at the end of the period.
Mr. Epp: We are dealing with the municipality of Muskoka and, as the parliamentary assistant knows, a good number of people who have their permanent residence outside the area often go and vote there. Some people even run for office there.
We have had a problem, not with Muskoka but with Parry Sound, where I think the majority of members in one of the municipalities have their permanent residence outside the area and take a trainload of people every --
Mr. McClellan: That was the invasion I was talking about.
Mr. Epp: That was the invasion?
What I am saying is that during the War Measures Act a municipal council could decide to buy land somewhere else and have its meetings there, and it could continue to hold the meetings there even after the War Measures Act has been lifted, if the parliamentary assistant is wrong on his reading of the act. He has not asked for an interpretation by a legal expert on that. He just said: "Well, I just think that does not apply, and my reading of the act says you have to sell it. You cannot continue to hold your meetings there."
I am asking him to get a clearer definition. I want a second opinion. That is no reflection on his great mental powers to interpret the act, but I am sure that sometimes he is wrong. He might even admit it, and perhaps this is one of those occasions, and I want a second opinion on it.
Mr. Rotenberg: I think the solicitor for my ministry is now preparing that second opinion. But if one reads the act very carefully, one will see that it says "when real or apprehended war ... the meetings of any municipal council may be held in any convenient location outside of a municipality." It applies only to the time when the proclamation is in force. It does not give the municipality the right to hold the meetings outside the municipality at any other time. I think the act is very clear. I do not think there is any doubt in the act that this only applies during that period of time.
However, the acquisition of land is somewhat different. It allows them to acquire land at that time, but the member is correct, there is nothing in the act that requires them to sell the land afterwards. It allows them to retain the land after the period of proclamation is over but does not allow them to hold their meetings in such location as they have retained.
Mr. Epp: I find it a little inconsistent that during the periods when we have war, insurrection or invasion, this property can be purchased but they may hold that ad infinitum. I do not quite see the consistency of it. Why would the government permit them to keep the land if they cannot buy it at any other time except during that very serious occasion, but once they have it they can keep it and do with it what they will, a speculation or whatever?
I do not understand why the government would permit them to do that. I do not understand why it would not bring in some kind of amendment to the act as well as to the other municipal acts where they have to sell that land within a period of a year or two after they had purchased it.
The Acting Chairman: One more go and then we will try to move on.
Mr. Rotenberg: With respect, because this is legislation and we are the parliament, I want to answer any and all questions that may be put forward by the opposition, and without restriction.
I would point out to the member for Waterloo North (Mr. Epp) that although I cannot quote them offhand, there are other situations where a municipality can acquire land outside its boundaries. I quoted the one where the city of Toronto acquired the jail farm many years ago. With respect, I do not think that is the issue in this situation. The issue is really allowing Muskoka to have the same power as all other municipalities have, and I think we should do that.
Although I may not agree with the member's concern, I can understand his concern about municipalities being allowed to own and retain land for this or other purposes outside their municipal boundaries. I will undertake to have some research done, although this cannot be done in an instant or just a few moments, about under which other sections of the Municipal Act municipalities can and do acquire land outside their boundaries and what their powers of retention of those lands are.
I will report back to the member and if after that he considers there is some requirement for a change, then I undertake to consider it -- not to bring forth an amendment but at least to consider the change which he is recommending. That is about as far as I can go at this stage.
Mr. R. F. Johnston: Mr. Chairman, this is otherwise known as the A. E. LePage amendment. Can the acting minister tell us whether the jail farm is the place where the city of Toronto will be holding its meetings during any perceived insurrection, or is it just a coincidence that it bought this property for other purposes? Did they buy it during the War Measures Act in the 1970s, or was it bought for other purposes and will it be used for meetings of Toronto city council?
Mr. Rotenberg: I thank the honourable member for his compliment and the promotion. I am not the acting minister, I am the parliamentary assistant.
Mr. R. F. Johnston: I know, but I like to elevate you. If others don't want to elevate you, I do.
Mr. Rotenberg: From your mouth to the Premier's ear.
Mr. Chairman, the jail farm was acquired certainly before the Second World War. I do not know the exact date. Another example to clarify this, the member may know that the R. C. Harris water filtration plant belonged to the city of Toronto before 1953, before Metro. It is in Scarborough but the city of Toronto bought the property in Scarborough for water filtration, so there are a number of indications. This is long before. The jail farm had nothing to do with it. I do not know if the city of Toronto has any plans for emergency measures and where it will go.
Mr. R. F. Johnston: Have any of the municipalities purchased any other lands for this purpose during the war measures crisis in the 1970s? If they were to acquire this property would they have to acquire it at market value, market value during the war crisis, and sell it for the same afterwards? What would be the guidelines for that?
Mr. Rotenberg: I would like to answer the question in the vein it was asked but I think I have more responsibility than that.
I do not know and it really is not the responsibility of this government to know whether or not municipalities have acquired land. We have given them that power under the Municipal Act. It is up to them whether they exercise that power or not. When they acquire land it would be under the land expropriation procedures. If they could not reach a value it would be under the land compensation act, so under the expropriation powers they would have to go to arbitration. If the owner was expropriated and not bought on market, the owner would be protected under the land compensation act.
As far as reselling it is concerned, when a municipality sells land it sells at market to any willing purchaser.
Mr. R. F. Johnston: There is one final thing. It is a matter of whether this would allow the purchase of land outside Ontario or outside the country for that matter, and whether any of our municipalities have done that.
Mr. Rotenberg: The act does not restrict where the purchase would be. I think it would be rather strange to buy it outside the country. One might find a place such as Rainy River buying across the border in Manitoba.
Mr. R. F. Johnston: But if Muskoka were invaded by Parry Sound.
Mr. Rotenberg: If Muskoka were invaded by Parry Sound, I do not think the federal government would proclaim that under the War Measures Act. There would not be a problem.
Section 6 agreed to.
Sections 7 to 10, inclusive, agreed to.
Bill ordered to be reported.
COUNTY OF OXFORD AMENDMENT ACT
Consideration of Bill 107, An Act to amend the County of Oxford Act.
Mr. Rotenberg: Mr. Chairman, as the questions were the same, I think they are all answered. Unless there are any other questions, I move that the bill be reported.
The Acting Chairman (Mr. Robinson): Hang on now; clause by clause on Bill 107.
Sections I to 9, inclusive, agreed to.
Bill ordered to be reported.
On motion by Hon. Mr. Gregory, the committee of the whole House reported two bills without amendment.
EXTRA-PROVINCIAL CORPORATIONS ACT
Mr. Williams moved, on behalf of Hon. Mr. Elgie, second reading of Bill 103, An Act in respect of Extra-Provincial Corporations.
Mr. Williams: Mr. Speaker, Bill 103 will allow us to treat all Canadian corporations equally for the first time. The act will, among other things, remove licensing requirements for Canadian companies incorporated outside Ontario.
At present, companies incorporated by the Quebec government, by special mutual agreement, and the federal government, by virtue of the Constitution, do not need an extraprovincial licence to do business here. However, companies incorporated by the other eight provinces must be licensed. This new legislation will remove that discrepancy, treating all Canadian corporations equally. Foreign corporations will continue to need a licence to do business in Ontario.
The Extra-Provincial Corporations Act will replace part VIII of the existing Corporations Act, completely rewriting legislation that has remained essentially unchanged for 83 years.
There are about 325,000 Canadian corporations active in Ontario. An estimated 290,000 of them are incorporated by Ontario, 30,500 by the federal government and 1,600 by the Quebec government. Only 2,700 companies, or less than one per cent of the total, are from other provinces and will be affected by the change. However, the removal of licensing requirements is an important step forward for Canadian companies. By eliminating paperwork, we make it easier for companies to do business in Ontario, which in turn encourages free movement of enterprise within the country.
This bill has been circulated for comment to many groups, including the Board of Trade of Metropolitan Toronto, the Canadian Bar Association, the Canadian Federation of Independent Business and the Ontario Chamber of Commerce. The chamber of commerce views this proposed legislation as a major step in the trend towards uniformity of company legislation in Canada.
In a letter, the chamber says: "We believe that removal of these licensing requirements will significantly simplify the carrying on of business throughout Canada. Such simplification should benefit the Canadian business community as a whole, particularly if your ministry can successfully encourage other provinces to adopt similar legislation."
I would like to turn for a moment or two to some specific provisions in this bill to show how it differs from the existing extraprovincial legislation. First. I would point out that the definition of "business" has been expanded to include nonprofit activity. This means foreign nonprofit corporations will need a licence to carry on activities in Ontario. I think it is reasonable to demand and maintain information files on foreign charities which could, for instance, solicit donations from Ontario residents.
The bill also contains a clear definition of what constitutes carrying on business as opposed to the somewhat ambiguous definition in the Corporations Act. Ownership of land and provision of services is now recognized as business activity.
Under the new act, there will be three classes of corporations, provincial, federal and foreign, as opposed to the 11 classes now set out. Of those 11 in the Corporations Act, nine are exempt from its provisions. These include insurance companies, loan and trust corporations, banks and brewers. Certain exemptions will continue under the new bill. For example, loan and trust corporations which are already regulated by the Loan and Trust Corporations Act are exempt.
The new act will give a director appointed to oversee the legislation responsibility for issuing licences and for deciding whether a company can operate in Ontario. No longer will licences have to be issued in the name of the Minister of Consumer and Commercial Relations. Although the director will have the power to turn down an application, approvals are normally a simple administrative function. For instance, only two applications for a licence have been refused in the last 20 years.
New elements of procedural fairness are added in the bill. For example, a right of appeal will exist when a licence is refused or cancelled or when a name is considered objectionable. In addition, sufficient cause for cancellation of a licence or for prohibiting a provincial corporation from operating in Ontario is defined in the bill.
Rules on the use of a name by a provincial or foreign corporation are set out for the first time. The present provisions merely state that a corporation will not be licensed if its name is objectionable, but there are no guidelines for determining what is objectionable. Those guidelines are now spelled out to prohibit the use of names which, for instance, may deceive the public or are used by other companies.
There are also no explicit rules on the continued appointment of a company's agent for service in Ontario. This deficiency will be rectified in section 19 of the bill which applies to foreign corporations by requiring them to maintain an agent for service in Ontario at all times. In addition, an amendment to the Corporations Information Act will require additional information from all extraprovincial corporations, whether Canadian or foreign, which do business in this province.
There are a couple of other matters in the bill which are worthy of mention. First, section 15 is a technical clause which does two things. It removes a defence by an extraprovincial corporation that its actions in Ontario are beyond its powers and provides that there is no constructive notice of documents on file with the director. The penalty provisions found in section 20 of the bill are stiffer than those in the Corporations Act, but in line with other company legislation.
In conclusion, I urge all members to support this bill. It is another example of Ontario's lead in Canadian company legislation.
Mr. Breithaupt: Mr. Speaker, I rise to inform the parliamentary assistant that we will support this bill in principle, but I ask him to consider having the bill sent to a standing committee when the time comes, to discuss certain details of the sections in the presence of informed persons who can give us answers to particular questions.
This draft legislation was first circulated in February of this year by the deputy minister. It arises out of a necessity for changes which will seek to have more uniform commercial legislation across the country. We suggest this is something worthy of support.
With respect to class 3 that is involved in these extraprovincial licensing requirements, those companies will have the opportunity to obtain the licensing. The first two classes will be exempt, so corporations incorporated under the jurisdiction of the Parliament of Canada or any of the other provinces, or with relation to the two territories as well, will be exempt from this requirement.
The introduction of the bill on October 28 was welcomed because we then had the opportunity of ensuring this legislation will, it is hoped, be in place before the fall session ends in mid-December.
There are a number of what one might call housekeeping changes in the bill, but there are also a couple of particular themes that I believe are worthy of discussion as we look at the principle of the bill.
First, the area of appeals dealt with by section 8 is particularly welcome. As a routine, the opportunities to appeal the administrative decisions to the Divisional Court is a pattern we should all support. The other particulars dealing with the contents of decisions or the changes in documentation are the kinds of mechanical developments that cause us no particular concern.
However, concern does arise when we look at section 15. As the parliamentary assistant said, section 15 deals with certain provisions by which an extraprovincial corporation can deal with property and can protect certain extraprovincial corporations from difficulties that arise under the present act.
Perhaps an example will be of assistance to the House. There is a property known as Plaza 100, which is a large apartment development at 100 Wellesley Street East in Toronto. This property was sold by Cadillac Fairview to 481076 Ontario Inc. in 1982. That numbered Ontario company was formed on May 25. 1981 by Mr. Laurence Caroe. The sole director on May 25 of that year was Jack Tse. On August 13, 1981, Caroe became vice-president.
On August 3, 1982, that numbered company, 481076 Ontario Inc., assigned its purchaser's interest in the agreement to purchase and sell to Deerhurst Investment Ltd. This is a Liberian corporation and the signing officer for that corporation was Lucy Y. S. Gomersall of Hong Kong. Caroe signed for the numbered Ontario company.
On October 1, 1982, the transaction between Deerhurst and Cadillac Fairview was closed, with Mr. Caroe acting for Deerhurst and Messrs. Goodman and Goodman acting for Cadillac Fairview.
On August 29, 1983, Deerhurst signed a contract with Spar Property Consultants Ltd., of whom we have heard, authorizing that company to represent Deerhurst before the Residential Tenancy Commission.
With respect to the concerns in Bill 103, Deerhurst chose to have a corporation called Fairwin Investments Ltd. act on its behalf so it would be able to avoid having the Plaza 100 transaction scrutinized by the Foreign Investment Review Agency. In fact, Deerhurst convinced FIRA that it was not a foreign transaction because all aspects of the business were being conducted by Fairwin, which was an Ontario corporation.
However, it was Deerhurst that entered into the above-noted contract with Spar. Furthermore, Deerhurst has issued T-4 slips and taken other actions which show that it is handling some of its own affairs.
The problem arises because, as we are informed, Deerhurst does not have an extraprovincial licence and, therefore, its title to Plaza 100 could perhaps be invalidated by an action in court. Indeed, even if Deerhurst was to obtain an extraprovincial licence, it perhaps could not sell Plaza 100 because it may have obtained the property illegally.
Accordingly, under the present legislation, that is to say under part VIII of the Business Corporations Act, the following events could occur: First, Deerhurst might be in some jeopardy of losing its property. Second, Mr. Caroe might be in some difficulty with respect to his legal advice and his obligations resulting from that advice. Third, Mr. Caroe might well implicate the law firm of Goodman and Goodman with respect to the transaction, and SPAR might well be prosecuted for acting as an agent when it might not have had the authority to do so. Finally, SPAR might well have a claim against Deerhurst for not revealing that it could not lawfully sign a contract.
Those possibilities are only submissions I make to members as to what might happen as a result of the tangled involvement that this failure to have an extraprovincial licence may develop. That gets us then to the contents of subsection 15(1). It is in that subsection I believe we are seeing a major reversal of government policy. It was not even mentioned in the minister's statement in the first reading of this bill.
As I have suggested in the historical information I provided, under present law Deerhurst's title to the building known as Plaza 100 may be invalidated in court. However, once subsection 15(1) of this bill is passed, the purchase of that land, as I understand it, will automatically be validated. It might well be preferable that as an amendment to this act we retain section 346 of the Corporations Act as it now exists with the necessary housekeeping amendments and that it replace subsection 15(1).
Section 346 reads as follows: "Every extraprovincial corporation having a licence under this part or a predecessor of this part, and every extraprovincial corporation exempted under subsection 338(1) from this part, has power, subject to its act or instrument of incorporation, to acquire by purchase, lease or otherwise, to hold, to mortgage, to sell, to alienate and to convey any land or interest therein in Ontario necessary for its actual use and occupation or for carrying on its undertaking."
That is in accordance with the Revised Statutes of Ontario, 1970, where this section appeared earlier.
So there is an area of concern with respect to subsection 15(1) that should be clarified, particularly with the opportunity of hearing from concerned parties before a standing committee in a hearing that need not be lengthy but should allow for a full discussion of that particular situation.
When we look at the terms of section 20 that deal with another principle in this bill, we are told that every person who, without reasonable cause, does certain things is guilty of an offence. The theme there to be considered is the meaning and the implication of this phrase "without reasonable cause."
Under section 33 of the Corporations Act as it now exists, an extraprovincial corporation or any of its agents can be charged for carrying on business unless a licence has been issued to that corporation. These charges can be laid at different times or all at once, and any or all of the particularly mentioned parties can be charged.
Under this bill, the extraprovincial corporation itself must be convicted before any agents can be charged. This raises a number of problems. First, there appears to be no particular rationale for not charging all the alleged offenders at once. Second, if those involved in the extraprovincial corporation are sufficiently clever and that corporation does not conduct its own business affairs, then it cannot be charged. As a result, it will not be possible to charge agents of the extraprovincial corporation which will, in effect, render the present subsection 20(2) unenforceable. In other words, all of the parties might well be immune from the charges which presumably are possible to be laid under the present section 20 of Bill 103. This, of course, will reduce the strength of existing penalty provisions.
It is difficult to imagine what would constitute this reasonable cause that is referred to in the first line of subsection 20(1). The minister certainly should have the opportunity of explaining that phrase and discussing it, or through the parliamentary assistant and the particular senior officers within the ministry. That occasion would, I think, be useful to have this bill more perfectly designed so we are quite clear as to what the penalties are going to be and what some of the defences might be that are available to the parties which might be involved. Certainly, it is not necessary to water down these penalty provisions in any way. I do think they should be clarified, and that would be an opportunity to do that.
Again, as we are looking to some of the particular themes in this bill, it is important to look at section 21, which deals with the ability to maintain an action before the courts. In referring to the example I have given to the House with respect to this 100 Wellesley Street property, this provision under subsection 21(1) would, as I understand it, enable Deerhurst and its agents to conform with the new act and to be absolved from the old. If this section happened to be deleted in committee, then Deerhurst and the agents could now be prosecuted, even if they obtained a licence for this very day, for breaching the former Corporations Act. If section 21 is passed as it is, then those agents would be absolved.
The parliamentary assistant has referred to the 11 classes which had existed under the present system for the particular exemption. If we look at clause 24(m), which deals with the variety of classes and exemptions, I think it is important to refer to the fact that the judicial committee of the Privy Council has determined that federal corporations do not have to abide by Ontario laws; that is to say they cannot, in effect, be regulated by the province.
Subsection 338(1) of the Corporations Act does give the cabinet power to reciprocate when another province exempts Ontario corporations. As the parliamentary assistant explained to the House, there is a relationship with Quebec to do just that.
Bill 103, which is before us tonight, will put all of the provinces on the same footing, which I think is good. It provides, as I said in my opening remarks, for the familiarity and uniformity of commercial legislation across the nation. It is hoped that other provinces may take the opportunity to enter into the same kind of general circumstance so as to avoid simply another item of paperwork, which is an unnecessary burden.
The present Corporations Act, in my understanding, also allows the government to exempt certain classes. While this has never actually been done, the principle is there, and that principle of exempting classes through reciprocity agreements is not objectionable. What is of some concern, though, is that under Bill 103 not only will cabinet be able to exempt a class along the lines of the present system, but it will also be able to exempt individual corporations. That is a power I believe cabinet does not at present possess.
It is objectionable if the cabinet, the government of the day, can exempt individual extra-provincial corporations without any open opportunity to consider this, certainly by the Legislature. It is an even more serious offence against the public interest when one considers that the government would not be obligated in any way to publish that order in council.
Deerhurst or any other foreign investor could lobby for and obtain secret cabinet approval to operate in Ontario without a licence. I think that is an objectionable theme. There may well be an answer to it as far as the intentions of the ministry are concerned. If that is the case, we should hear it and have the opportunity to discuss it in committee. There is, of course, the prospect of adding sections that would ensure that any prosecution under part VIII of the Corporations Act could still be proceeded with, notwithstanding the repeal of that part.
One thing that did rather interest me was that, as we move to the end of this act, we are dealing with the repeal of a certain part of the Corporations Act. I had been under the impression that when the Corporations Act was last brought before this House there was at least the general understanding that it was preferable to have all the corporate law, or as much as was possible, in one statute. I am wondering why the legislation that is before us tonight does not replace part VIII of the Corporations Act with what would be, in effect, amendments to that part rather than creating a new statute.
We seem to go in cycles in this kind of an approach. Within the next several years I am sure we will hive off other chunks of the Corporations Act and, finally, having done that, someone will get the bright idea in about six years' time that this should all be part of one act. We will go through all the mechanics again and put it all back together. Like Humpty Dumpty, we will try to put the pieces back together again. Once we have done that, the cycle will begin again. Two or three years later a part here and a part there will be once again taken away.
I do not recall the necessity of having to set up a separate statute to deal with extraprovincial corporations. There may be a rationale for this, but I think it would have been just as useful to have replaced part VIII with this legislation to improve the circumstances rather than to create a new statute. However, the parliamentary assistant may have a reason for doing it in this way.
In any event, I would end my remarks with what I hope is a complimentary comment to the ministry in that it circulated the proposed legislation back at the end of February. This approach, which, in effect, creates a white paper or an unnumbered bill, is one that is most appropriate in corporate law and other detailed matters. There are certain groups within our society, whether they are dealing with securities legislation or a variety of the other particulars the ministry has, that are peculiarly interested in certain somewhat narrow aspects. They are the ones we should hear from.
The opportunity of getting that kind of input by the circulation of draft legislation is a good way to go. We come up with better legislation because of the comments that are made by the people who are actually in that business or related to it, whether they be travel agents, life insurance companies or people setting up an organization like the Toronto Futures Exchange.
The parties involved have the expertise. It has always been of interest to me how they are willing to come forward to try to make better legislation, to involve themselves in their professional organizations in enlightened self- interest -- and there is nothing particularly wrong with that -- to come up with better legislation than any of us could hope to do as we try to deal with it without their input.
The way this bill has come forward is worthy of commendation. I think we will have better legislation the more often we do that sort of thing. However, in order to make this bill even better than it now is, I do look forward to the parliamentary assistant agreeing to have the bill go to standing committee briefly for the opportunity to discuss these points with the parties that are interested in them, so that we will know the legislation is as complete as it possibly can be. As a result, we will have better legislation.
Mr. Renwick: Mr. Speaker, I would like to speak about three or four areas of concern to me in the bill. We do not intend to oppose second reading, but that is not to be taken in any way as being in agreement with the rather naive and superficial way in which the government approaches the question of extraprovincial corporation activity in Ontario. Because the concerns we have would require a very substantial alteration in the philosophy behind the bill, we do not intend to delay its progress through the assembly.
I would hope the parliamentary assistant may consider the need for an amendment in regard to my first comment or give an explanation as to why it is not so. It is that under the present bill every extraprovincial corporation, whether it is a foreign corporation in the sense of being an outside-Canada corporation, or a corporation incorporated in another jurisdiction within Canada, is required under the regulations to have an agent for service in Ontario. That is my understanding of it.
In the bill we have in front of us, we have placed into the statute the provision with respect to having an agent for service in section 19. It applies only to class 3 corporations. that is, foreign corporations -- non-Canadian corporations carrying on business in Ontario.
I notice that in the provisions with respect to regulations the Lieutenant Governor in Council has the power to make regulations respecting the appointment in continuance by extraprovincial corporations of an agent for service on whom service or process notices or other proceedings may be made and the power to be conferred on such agent. It is my view that the statutory requirement as provided in section 19, that only those within class 3 need to have an agent in Ontario, would not be sufficient to support a regulation that required extraprovincial corporations falling within classes 1 and 2 to have an agent for service in Ontario.
I understand that is a serious concern, that it is important when process is issued in Ontario that one be able to find the person in Ontario who can accept service on behalf of the corporation. It matters not whether it is a Canadian corporation, an extraprovincial corporation in the sense of a corporation incorporated under the laws of one of the provinces or the territories, or a foreign corporation in the sense of being a non-provincially incorporated company or non- federally incorporated company.
It appears to me to be the kind of oversight the member for Kitchener (Mr. Breithaupt) was speaking about when he suggested the advisability of the legislation having a review before a committee of the Legislature.
I certainly would have been interested in having circulated to me, as I had the original draft bill on March 1, 1982, some of the comments made by others. I do not mean the laudatory comments about what a wonderful advance in the field of corporate law this bill is, but to find out whether anyone within the professional field involved with this statute looked at it with a fine-tooth comb and came up with any specific amendments which were incorporated in the bill.
I stand to be corrected but that oversight with respect to an agent within the jurisdiction who can accept service is one that I think we have to look at carefully. That is a matter where this bill can and should be amended. The other areas are ones that are of much more fundamental concern to myself and to members of this party as one will know from preceding debates in relation to this kind of legislation.
There is one particular area, and it is perhaps the second area where I have an immense concern. We have a Corporations Tax Act which goes to the root of the question as to what kinds of corporations are within the taxing net of the Corporations Tax Act, and the concept of the permanent establishment was developed for the purpose of enlarging to the extent possible the taxing net of the province.
I have never understood why some effort was not made, when talking about an extraprovincial corporation carrying on business in Ontario, to strictly adapt the extraprovincial corporations corporate law bill to the kinds of language used in much greater specificity in detail in section 5 of the Corporations Tax Act. That is the second but major difference in attitude I have towards legislation of this kind.
The third area is an area touching upon concerns we have with respect to the ownership of land in Ontario by persons outside the jurisdiction. I am restricting my comments in this regard to corporations outside the jurisdiction owning land in Ontario. I am not one who thinks for one moment that the Conservative Party is going to pass any kind of legislation that would inhibit the ownership of land by corporations, foreign or otherwise, in this province.
The whole drift of corporate law has been to remove the limitations formerly included in the Business Corporations Act, at present in the extraprovincial corporations section of the Corporations Act, but going to disappear when this bill passes. That provision with respect to the ownership of land is now in section 346, I believe, of the Corporations Act. It is going to disappear.
The provision that was formerly related to business corporations when the Corporations Act governed business corporations. but is now in the Business Corporations Act, has been removed. That is, the limitation on corporations owning land only for their actual use and occupation was removed from the Business Corporations Act when it was passed.
We repealed the Mortmain and Charitable Uses Act, which again was one of the traditional controls in Ontario for having at least some method of monitoring the ownership of land in the province by corporations. We now find this government is pursuing that particular road. It is doing so without ever having given consideration to the provisions of the Ontario Law Reform Commission report on the Mortmain and Charitable Uses Act which tried to deal with the questions. It came quite rightly to the conclusion that the Mortmain and Charitable Uses Act, in so far as it related to ordinary corporations, was outdated. But that did not eliminate the need for the Law Reform Commission to look at some of the policy questions that were of considerable concern to the Law Reform Commission so it could draw them to the attention of the government. Those concerns have not been dealt with.
This is a matter where, at least in a committee, we would have some opportunity for a brief discussion of what was said. However, I would refer members to provisions in the report dealing with the policy aspects of the ownership of land by foreign corporations. One finds statements such as this: "To what extent can a province control a land holding of foreign or foreign-controlled corporations and, in particular federally incorporated subsidiaries of foreign or nonresident corporations? These questions did not of course fall to be decided in a particular case and they remain unresolved."
It goes on to state: "Furthermore, the select committee on economic and cultural nationalism has made a number of recommendations which would have the effect of ensuring the future acquisition of land generally be substantially restricted to Canadian citizens and landed immigrants resident in Canada and corporations or ventures owned substantially by Canadian citizens or landed immigrants resident in Canada."
The report went on further to say that "while the ancient act was not the appropriate vehicle to achieve the policy objectives outlined above, if indeed it is decided that these objectives should be pursued; the act is too complicated and too little understood. In our opinion it should be repealed, but the matter of controls on foreign ownership of land is one which arises incidentally out of mortmain and charitable uses restrictions. However, if as a matter of government policy it is decided that a system of controls on ownership of land by nonresident corporations and others is desirable, we believe that such a system should be established by new legislation."
In addition, it refers to provisions of the Mortmain and Charitable Uses Act being replaced by a monitoring scheme which is integrated with that now applicable to extraprovincial corporations if that is thought to be desirable. Indeed, they refer specifically to the need to enact, in the Business Corporations Act, a section similar to section 306 of the Corporations Act.
I mention only those particular provisions of the report of the Law Reform Commission on the question of foreign ownership of land in Ontario by corporations, because nothing I have ever heard about the government would lead me to believe that it has seriously given any consideration to monitoring the ownership of land by corporations, and particularly by foreign corporations or foreign-controlled corporations.
I said at the beginning of my remarks that we are not going to oppose the bill on second reading. We are not going to oppose it because that is a fundamentally different attitude towards the problems that should be addressed in a bill such as Bill 103, to the way in which the parliamentary assistant, the ministry and the government have decided we should revise the existing law.
I certainly recommend to the parliamentary assistant to read up on the corporate setup of the Amway Corp. and Amway Canada Ltd. as outlined in the submission by crown counsel to the court a short time ago, which resulted in a fine being imposed and charges being withdrawn against individual executive officers. The fines were imposed only on the corporations in that event -- $25 million. I would like to know what kind of controls this government has or may exercise in any way over Amway Canada Ltd. with respect to its carrying on business in Ontario.
It is true that in 1978, during the course of the fraud that had been carried out, the company ceased to be subject to the federal statute and, by continuance, was continued as an Ontario corporation. It seems to me it is not beyond the stretch of the imagination to ask what would be the position of this government if Amway Canada Ltd. was, for example, an Alberta corporation and had no licence to carry on business in Ontario. What would the attitude be to the method by which the government would prohibit that company from carrying on business in Ontario by reason of the breach of the Criminal Code that was established in the court by the guilty plea?
That kind of problem seems always to escape the attention of the minister. He seems always to be concerned only with easing the licensing requirements of this government over foreign corporations and never in any way to be considering the kind of information that should be available to the government here in Ontario about the operations of those corporations.
I would ask the minister to consider what kind of application could be made to the court under section 14 if Amway Canada Ltd., instead of being a company continued under the laws of Ontario, had been an Alberta corporation. What steps would the director have taken? How would the director have any knowledge of whether a company incorporated elsewhere in Canada was in breach of the Criminal Code or of the Provincial Offences Act when he had no information whatsoever about that company other than what may be filed under the Corporations Information Act, which is a separate bill?
Those are the concerns we have about the bill. The attitude and philosophy of this party would be entirely different from the government on the issue of carrying on business in Ontario, on the issue of the ownership of land in Ontario, on the issue of effective enforcement of registration requirements against companies from abroad, whether from abroad in Canada or from elsewhere in the world acting in Canada, to make certain we have some control over their activities in this province.
We now have something upwards of 58 foreign banks, most of which are probably operating in Ontario. Are we to depend entirely upon the federal government regulation with respect to the foreign banks? They are quite likely going to have an enlarged share of the domestic banking business in Ontario simply because the Constitution of the country puts the jurisdiction over banks in the hands of the federal government.
The minister and the parliamentary assistant know as well as I do that laws of general application can be enacted in Ontario with which federally incorporated companies must comply.
For all those particular reasons, we are not going to oppose the bill. There is significant merit in the suggestion of the member for Kitchener (Mr. Breithaupt) that the bill go to committee so it can be given some careful examination, not over a protracted period of time, but careful examination of some of the ancient but still living concepts behind this kind of legislation and the way it is integrated with other aspects of corporate law of the province.
Mr. Williams: Mr. Speaker, first and foremost I want to thank the members of the two opposition parties for their concern and constructive comments with regard to the bill this evening. I would like to try to address as specifically as possible some of the concerns raised by both members. My greatest concern is whether time will permit me to address each one of those specific concerns. I will make an effort to do so.
If I am not able to satisfy the member from the official opposition and the member from the third party sufficiently, it may well be that the legislation should be referred to standing committee for further consideration. However, on the face of it, substantively speaking as well, the bill deals with a fairly narrow concern and is rather precise in its form.
It is one which can be dealt with in fairly straight responses to the concerns that have been raised. That will remain to be seen as I address those concerns. It may well be that we can settle these matters in this discussion or in committee of the whole House. We will make that determination as we proceed.
Before going to the concerns raised by the member of the official opposition, I would like to put into perspective, as I alluded to a few moments ago, that this legislation is narrow and precise in the sense that it is referring to one specific section of the Corporations Act, part VIII. What we are addressing is a situation that relates to the operation of companies in this province that represent less than one per cent of all corporate activity within this province.
The vast bulk of the over 300,000 companies that are doing business in Ontario, particularly after enactment of this legislation, would not be governed in any way whatsoever by this legislation. We are narrowing the number of companies that would be affected by this legislation, but in so doing, we are directing the legislation and giving a new thrust to it in a way that is most appropriate, that is, we are dealing with the total bona fide foreign corporations.
As has been pointed out in my opening remarks, but which bears reiteration, the legislation we are trying to upgrade and improve upon is legislation that has been standing on the books of this province since before the turn of the century. Virtually nothing has been done to make this legislation more relevant to today's situation and make it more fair and appropriate for the purpose of conducting business in this province by truly foreign corporations.
I think we have to have that perspective in mind as we address some of the concerns that have been raised by both honourable members. Some of the remarks that have been made and concerns that have been raised go beyond the scope of this legislation and deal in the broader context with corporate legislation.
Certainly, some of the points raised by the member for Riverdale (Mr. Renwick) are matters that have been discussed on more than one occasion in other forums dealing with the Business Corporations Act when that was before committee and when amendments to the Corporations Act were under consideration by this Legislature. These broader issues have been fairly and properly brought to the fore and debated on all sides of the House.
I respectfully suggest some of these issues go beyond what we are discussing in this bill which relates specifically to foreign corporations doing business in this province under the definition of extraprovincial corporations.
Let me turn, if I might, to the remarks that were put forward by a member of the official opposition. First, he made reference to section 15. This appeared to give him the greatest concern, as I emphasized in my notes the different concerns he raised. The member for Kitchener cited situations where he felt section 15 would not really protect the people of the province from the activities of a foreign corporation.
I point out to the member that the principles enunciated in section 15 of the proposed legislation are the same in principle as those found in the Business Corporations Act. I refer specifically to subsection 17(3) of the Business Corporations Act, 1982, which states, "...no act of a corporation including a transfer of property to or by the corporation is invalid by reason only that the act is contrary to its articles, bylaws, a unanimous shareholder agreement or this act."
The section we are introducing in this legislation simply mirrors what has been deemed to be good and valid legislative protection in the broader Business Corporations Act. There is a consistency here we felt should be introduced in this bill.
I will have to seek advice on the observation made by the member for Riverdale. I must say I cannot comment as to whether it was in the original draft act or not. I will check that and report. I do have to point out we are endeavouring to be consistent with this legislation. In fact, in other sections we will be discussing as we proceed with the debate on this bill, the members will see there are other sections drawn up in a fashion that is consistent with other sections of the Business Corporations Act. I think it is an important objective of the government in introducing updated and refined legislation that we have consistency with what exists in the parent legislation that governs corporate activity.
Mr. Renwick: I was wrong. It is in the draft act.
Mr. Breithaupt: Section 20.
Mr. Williams: Thank you. Section 20 of the draft.
I hope that response addresses the member's concern. It certainly explains why the wording of section 15 was framed the way it was.
The member for Kitchener then made reference to section 20 of the bill. I would point out to the member that we are trying to be consistent with regard to the matter of imposition of penalties. It is not necessarily identical with what is in the Corporations Act, but I believe it is consistent with what is in the Business Corporations Act relative to penalties both for individuals and for corporations. It is an effort by this government to provide a meaningful degree of consistency in the legislation.
The member referred to section 20, which deals with the matter of compliance. If I can just turn to this section, it states:
"Every person who, without reasonable cause,
"(a) contravenes this act or the regulations;
"(b) contravenes a condition of a licence; or
"(c) fails to observe or comply with an order, direction or other requirement made under this act or the regulations,
"is guilty of an offence and on conviction is liable to a fine of not more than $2,000 or if such person is a corporation to a fine of not more than $25,000."
Again, as I say, this is a matter that has been gone through in debate when the Business Corporations Act was before this House for consideration. These penalties are consistent with that major piece of legislation.
The member for Kitchener interpreted this as having an effect on a prosecution. I would respectfully have to take issue with that. The section has no effect on a prosecution and only affects an action brought by the extraprovincial corporation.
The Acting Speaker (Mr. Robinson): I would draw the honourable member's attention to the clock.
On motion by Mr. Williams, the debate was adjourned.
The House adjourned at 10:30 p.m.