The House met at 1331.
ASSISTANCE TO FARMERS
Mr Wildman: Ontario farmers face important challenges as we enter the 1990s and the 21st century, and this Liberal government appears not to be ready to meet them. Farmers face a serious credit crisis, a debt crisis, interest rates remain high and are likely to rise further due to inflationary pressures that will be brought on by the institution of the federal government’s goods and services tax, and yet this Liberal government has let the Ontario family farm interest rate reduction program lapse without any replacement.
How does this government intend to finance agriculture in Ontario?
Farmers also face challenges on the environ-mental and health care fronts, yet this government has no strategy for sustainable agriculture or dealing with the need for less reliance on chemicals to protect our soil and water and also the health of consumers. The government continues to back away from any meaningful protection of agricultural land from development pressures. The government continues to refuse to require food land guidelines to be included in municipal official plans.
This government seems content to bask in the reflection of the Toronto urban economic boom while farmers continue to have to leave agriculture, and those who remain on the land are squeezed by higher costs, environmental concerns and the blandishments of the development industry.
Is this government content to preside over the disappearance of the family farm as we enter the 21st century?
DISCOVERY OF INSULIN
Mr McCague: Today marks an important anniversary in Canadian medical history. It was on this date in 1923 that Sir Frederick Banting and John Macleod were awarded the Nobel prize for medicine.
Allistonians can be particularly proud today because Sir Frederick Banting was a native of our fair town. He was born in Alliston on 14 November 1891, educated at the University of Toronto and served overseas during the First World War in the army medical corps. Upon returning to Canada in 1920, he began to work under Dr J. Macleod on the problem of diabetes. Within four months, they had isolated insulin and proved its effectiveness.
Forgotten by the Nobel committee but not forgotten by Banting was the contribution made in the discovery of insulin by Charles Best. Best was born in the United States but was educated in Canada at the University of Toronto. He became a colleague of Banting and contributed greatly to the research on diabetes, which was overseen by Dr Macleod.
On this date we pay tribute to these three fine scientists. Their discovery of insulin is surely one of the crowning medical achievements of the 20th century. As Allistonians and Ontarians, we should all be proud of the accomplishments of Banting, Macleod and Best. I encourage all members to visit the memorial to Banting near Alliston.
PASSENGER RAIL SERVICES
Mr D. R. Cooke: Subsection 260(6) of the federal Railway Act sets out certain criteria for the National Transportation Agency in determining whether or not uneconomic passenger train service should be discontinued. They include actual losses and present existence of alternative transportation services as well as probable future existence of those services.
The order in council relieving Via Rail of many of its obligations to provide passenger rail service has been passed without these criteria being met. Thus, the agency has not fulfilled its obligations pursuant to sections 144 and 145 of the National Transportation Act.
Even so, the order in council relieving Via Rail of its obligations clearly deposits those residual legal duties with the original owners of the lines, Canadian National and Canadian Pacific. In other words, responsibility for an integrated rail system still falls within the mandate of CN and CP.
The federal legislation stipulates that these companies are responsible for providing passenger rail service to the people of Canada should Via Rail service be rescinded. There is a residual legal duty for CN and CP to start passenger rail service at midnight 15 January 1990 on all lines abandoned by Via Rail.
I hereby call upon these two responsible corporate entities to obey the law and institute these passenger services in accordance with their fine traditions.
Mr Allen: It is time for this government to directly address the dilemma of food banks and the moral scandal of persistent and growing hunger in the midst of economic prosperity.
I have therefore requested that under the new orders the standing committee on social development of this Legislature devote 12 hours to a close examination of this disturbing question.
It is not enough for the government simply to say that our social assistance reforms will eliminate the need. Work rule changes will not help food bank clients who are unable to work. Increases in shelter allowance that are less than actual rental costs will still see food money going to rent. Food allowances less than actual market basket costs will still send recipients to food banks and inflation add-ons only keep clients on the treadmill.
Those who began food banks in the early 1980s had no intention of becoming a necessary part of the social assistance system. Their consciences are racked by the thought that they have become so and that every day they are allowing the government to evade its clear responsibility.
The time has come to develop a clear and precise strategy for phasing out food banks and ending hunger in Ontario, and the committee can be an important first step in that process.
Mr Jackson: On 13 July, Bill 5 received royal assent. The bill makes it mandatory for school boards to offer heritage-language classes at the elementary school level. The bill also gave the minister the power to make regulations.
Despite the fact that draft regulations had not been released to school boards and the provincial advisory committee was still working on the program resources guide, the government pushed this legislation through the House.
The only information the government felt obliged to provide was outlined in a statement from the Ministry of Education on 24 October 1988. “School boards must provide heritage-language classes on the request of the parents of at least 25 students...and these classes are to be held outside the normal school day.”
When the regulations were finally released in August, school boards were surprised to find that once they establish a class they are required to continue to provide it even if only 10 students attend the first scheduled class. In fact, the boards must continue to provide the classes throughout the school year even if just one child remains in attendance.
The inflexibility of the new government regulations is difficult to understand, especially in light of the many provincially mandated priority programs in our educational system which are today being severely underfunded.
This government must realize that heritage-language classes form an important and balanced part within the broad spectrum of educational goals and priorities. The government’s new regulations pose a serious threat to that important balance.
PASSENGER RAIL SERVICES
Mr Adams: As an expression of my deep concern about the recently announced closing of the Via Rail route between Peterborough and Toronto, I have written a piece of verse. It is dedicated to the member for Oxford (Mr Tatham), poet laureate of the 34th Parliament, dean of railroaders and recently appointed to the Ontario-Quebec committee on high-speed rail.
Ode to Via Rail:
When tonight you think of Via,
take the time to think who we are.
Do we want to pollute our planet,
leaving nought for kids to inherit?
No, we want to travel by train,
cutting down on acid rain.
No, we want to save white pines,
by travelling on those railway lines.
If Mr Mulroney wants to be back
He must make sure we stay on track.
And to the member for Oxford:
We are with you, Charlie, in your lifelong fight.
On passenger trains,
you’ve always been right.
Mrs Grier: It must be transit day, because I want to comment on the fact that yesterday when the Minister of Transportation (Mr Wrye) tabled his estimates, there was once again a great deal of rhetoric about the government’s commitment to spending on roads and public transit. There was an emphasis on the need for a good road system for our economy and particularly for the tourist economy of the province, but there was not much emphasis on the concept of gateways, the concept introduced by the predecessor of this minister. The gateways were supposed to siphon people out of their cars and into public transportation.
Look at this particular publication by the Ministry of Transportation, a road map that every tourist and every commuter, I am sure, owns. There is no mention of gateways. There is no indication as to where you can leave your car and get on public transit. You are not even told where you can catch the GO train. If you are a tourist wanting to come downtown but not wanting to drive, you do not know how to do it.
Cigarette packages carry warnings about health risks. When will the government’s road maps carry a warning to take public transit instead? It may be a simple oversight, but it seems to me to indicate this government’s lack of commitment to public transit and its interest in spending more money on expressways.
When the Highway 407 bypass finally opens, it will be just as clogged as every other expressway, and the people who try to get downtown to work will still face long delays and high fares on our public transit system.
Mr McCague: Apparently the government has issued an order in council authorizing liquor stores across the province to open on Remembrance Day, 11 November, at 12 noon. This signifies a major departure from past practice.
In response to this decision, the town of Clearwater and the village of Point Edward have passed resolutions calling upon the Ontario government to show respect for our veterans. To me, the issue here is what importance and relevance we as a society give Remembrance Day and, in particular, those men and women who risked their lives for our country.
Perhaps the government believes consumers want the convenience of open liquor stores on that Saturday. Perhaps it believes it needs the money or perhaps it believes a half-day remembrance is better than none. Perhaps, saddest of all, the government may be right: consumers prefer convenience and see nothing untoward about the shift in how we remember our veterans.
I think all members of this House should consider and put into perspective the importance of Remembrance Day. It is more than the laying of a wreath or going to a parade, quickly over and then forgotten for another year. We owe so much to those who served and died in that service. I wonder if it is too much to ask in return that we forgo a little convenience.
CHRIS KUBIK AND AL DUNNING
Mr Pelissero: Each year the Big Brothers-Big Sisters of Grimsby, Lincoln and West Lincoln select one outstanding young man or woman to be honorary Lincoln MPP for a day. This year, Chris Kubik, a 16-year-old student at Denis Morris high school, was chosen on the basis of his progress and participation. Chris’s Big Brother is Al Dunning, a resident of Beamsville. They have been matched for over seven years and share many common interests such as sports, camping and fishing.
The Big Brothers-Big Sisters movement has been helping children for over 80 years. Its success is based on an effective yet simple concept: one-to-one friendship between a mature, caring adult and a child who can benefit from that friendship. Given the increasing number of children today living with only one parent, an understanding and loving Big Brother or Big Sister is the kind of friend a child needs to become a mature, productive and emotionally healthy adult.
I am sure all members of this House will join me in welcoming Chris Kubik as their honorary Lincoln MPP for the day, and his Big Brother, Al Dunning. They exemplify all that is good about the Big Brothers-Big Sisters movement across the province. Chris and Al are here today with us in the gallery. Welcome and congratulations.
Mr B. Rae: I have a question for the Premier. Yesterday, in what must be seen as a rather unusual step, his Minister of Labour (Mr Phillips) felt obliged to write a letter to his Minister of Correctional Services (Mr Patten) concerning complaints which have been raised with the Minister of Labour about health and safety in prisons and jails that are under the jurisdiction of the Minister of Correctional Services.
Quoting from the letter, his Minister of Labour states, “In particular, section 14(2) obligates you to provide information, instruction and supervision to a worker to protect the health or safety of the worker.”
Can the Premier explain why one of his cabinet ministers would feel he had no choice but to write such a letter to the Minister of Correctional Services?
Hon Mr Peterson: The member obviously could have asked the writer of the letter or the receiver of the letter, but I think the receiver of the letter could probably assist him in his response.
The Speaker: Was that the Premier’s response or was the Premier referring it? The Premier is referring it to the Minister of Labour.
Hon Mr Phillips: I received two letters --
The Speaker: Order.
Mr B. Rae: On a point of order, Mr Speaker: The Premier referred the question to the recipient of the letter, who is the Minister of Correctional Services.
The Speaker: I will try once again. The Premier would like it referred to which minister?
Hon Mr Peterson: I am easy on the subject, but I think the Minister of Correctional Services might as well answer, if he so chooses.
Hon Mr Patten: I do not feel that I can speak for the Minister of Labour, but I will make a comment. I understand that a letter has been sent to our ministry dealing with the question of health and safety and that the other issue was the utilization of untrained correctional officers. I might point out that the utilization of untrained officers happened to be our management staff who are filling in the vacancy of some officers who chose to phone in to be ill or sick or not fulfil their duties at that particular time.
In terms of the health and safety issue, I have not read the total implications of that. Let me assure the member, though, that naturally and of course that is a major concern for our particular ministry, for all our employees, for anybody who works in the institutions and for the people we are trying to serve.
Mr B. Rae: If I heard the minister correctly, he said he had not read or was not fully aware of the implications of the health and safety issue. I cannot believe that the minister would make that kind of a statement, given the fact that this entire dispute is about health and safety and about the health and safety of the people who are working within the system.
Can the minister explain to me why he has yet to meet with any responsible person among the jail guards concerning this health and safety dispute? Why has he not sat down personally and met with them? Why, in fact, would his colleague the Minister of Labour feel obliged to step in because he is so obviously dropping the ball and failing to do his job?
The Minister of Labour is, in fact, the one who is calling the parties together. Why would not the Minister of Correctional Services, as employer, have met with those employees?
The Speaker: There have been two questions asked.
Hon Mr Patten: I believe the Leader of the Opposition is not truly characterizing this in the light of the circumstances that we have. The Minister of Labour, as I understand it, responded to the union’s concern and passed on that communication to us for us to examine and consider.
The Leader of the Opposition was incorrect in saying that I did not acknowledge the importance of health and safety. I repeat, I do acknowledge the importance of health and safety. I have said that we will have the necessary meetings that are required with the union at a point at which our institutions are safe, secure and well managed. I believe that is happening now. As soon as that happens and we arrive at a position where we have normalcy and we have good operations in our institutions, we will meet with the union through our employee relations committee at the institutional level, plus our employee relations committee at the provincial level.
Mr B. Rae: I want to try and break through the gobbledegook. Is the minister himself personally prepared to meet with the union and with the jail guards themselves to resolve what has obviously been a major dispute about health and safety, or is he going to continue to avoid his responsibilities to the point where he has to keep on getting letters from his colleague the Minister of Labour (Mr Phillips)? Is he prepared personally to intervene, to meet with these people to try to resolve this dispute? Yes or no?
Hon Mr Patten: The whole world does not revolve around simplistic answers or questions. It is a very complex, extremely sensitive issue and I would hope that we would not be playing politics over situations of this nature.
The people who are concerned with the operational responsibility of our labour force and our labour issues in our ministry are prepared to meet as soon as we have a situation of normalcy. I am committed to that. I have instructed the superintendents of all our institutions to sit down with their particular employee relations committees as well. That needs to happen on an individual basis because each institution --
Mr B. Rae: No, no.
Hon Mr Patten: The Leader of the Opposition shakes his head. Perhaps he does not appreciate the fact that each one of those institutions is different. Some are small, some are large, some have different levels of community, etc, and not all institutions face the same kinds of concerns.
I reiterate, we are prepared to do that once we have a position where we can operate our institutions satisfactorily.
NATIONAL COUNCIL OF JEWISH WOMEN OF CANADA
Mr B. Rae: The second question is also for the Premier. I do not know whether he is equipped to answer this one or not either.
I am sure the Premier is aware of the very substantial sums of money that were transferred by various ministries in his government -- and not only in his government but indeed by previous governments -- to the National Council of Jewish Women of Canada, Toronto section. I asked several months ago about what kinds of audits were being performed in terms of the transfers that took place from the Ministry of Culture and Communications, the Ministry of Community and Social Services and the Ministry of Housing to the National Council of Jewish Women. I wonder if the Premier can tell us, is he now in a position to say what his audits have found with respect to these transfers, and if not, why not?
Hon Mr Peterson: I am not in a position to share that, but whatever information is available, this very clearly will be shared with my honourable friend and anyone else who is interested. He could very clearly ask the ministers responsible and it will all be there for anyone to see.
Mr B. Rae: It appears that the council has been told that the government of Ontario is trying to collect $800,000 of a so-called overpayment, and since it involves different ministries and different ministers at different times, I felt I had to ask the Premier this particular question.
The question that I have for the Premier is this: How would it have been that the province of Ontario would have made a $350,000 overpayment on a renovation grant? How could that have happened? When did the audit commence and what has been the result of that audit? If the Premier is going to the council and saying he wants the money back, why does he not have that information for the Legislature?
Hon Mr Peterson: I do not have that particular information, but I am certainly happy to gather it up for the honourable member, or the appropriate minister will, and presumably any actions taken will be done on a substantiated basis.
Mr B. Rae: The council, as the Premier will know, in its national body, is a charity that has been in place for nearly 100 years. They have apparently been faced with a demand from the province of Ontario for a very substantial sum of money. I think the people of this Legislature are entitled to know on what basis this decision was made, when the audit was performed and how it is possible that such levels of overpayment were in fact made to the national council. This is information. The government is acting on the basis of this information. Bureaucrats are apparently meeting with the national council. We are entitled now to this information. His government is in charge of this. We would like to have that information.
Hon Mr Peterson: I will ask the appropriate ministers to share that information with the member and if there are any irregularities in the payments subject to investigation at the present time, presumably if mistakes have been made they want them to be rectified. That is what the whole object is about.
Mr Brandt: My question is for the Premier in regard to the situation at our correctional institutions. I wonder if the Premier could share with us any decisions or contingency plans that evolved out of the meeting of Policies and Priorities Board of Cabinet.
Apparently on the way in today, he indicated that this matter would be discussed by P and P with respect to what future actions might be taken by the government in regard to the current dispute between the jail guards and the government. Could he perhaps enlighten us as to whether any of those decisions were made and was the matter even discussed?
Hon Mr Peterson: My honourable friend, being a former member of the executive council, will know that agendas of the executive council are a private matter. That being said, I am happy to share with my friend that matter was not discussed at the board of policy and priorities this morning.
Mr Brandt: I am surprised that it was not because it is a pending crisis, unless something is done. I would like to ask the Premier, in view of the fact that nothing was discussed at P and P, and he apparently hinted that there may well be some discussion in talks that he had prior to going into that meeting today, if he could indicate whether any instructions have been given to the Solicitor General (Mr Offer) with respect to the possible involvement of the OPP if the situation continues to deteriorate in our jail system?
Hon Mr Peterson: No orders have been forthcoming from my office, to the best of my knowledge, to the minister responsible.
Mr Brandt: Could I ask the Premier, in view of the answers that were given by the Minister of Correctional Services earlier to the Leader of the Opposition, if he in fact supports the position -- to use the minister’s words -- that there will be no discussion until the situation develops into one of “normalcy” -- I believe is what he indicated -- and that if in fact the position of the government is that it is not going to have any discussions whatever with the union in regard to how this matter may in fact be resolved? Is he going to wait for a major crisis before there is any direct contact between his minister and the union involved?
Hon Mr Peterson: These matters are a matter of ongoing discussion, as the member knows. There has been an injunction in the courts. As the member knows, a number of matters are subject to arbitration at the present time and my honourable friend would know enough, since he has spent some time in government, to realize that there are certain ways and processes to solve these kinds of questions. I think he can have great confidence in the minister’s capacity to handle that.
Mr Brandt: I would like, if I might, to direct my second question to the minister involved then. There is a great deal of concern, I want to say to him, about the lack of contact that his ministry has made with any of the officials who are representing the jail guards in this particular dispute. In fact, the matter is deteriorating on a daily basis.
I want to ask the minister why he has not shown more direct interest by even so much as picking up the phone and discussing the matter directly with those involved? Why has he not done that?
Hon Mr Patten: I share the member’s concern. Let me assure him that I have been very active over these last few days and these past few weeks in relation to this issue which I believe really concerns most of us in this House.
My position, however, my responsibilities and my mandate, as the member I am sure will appreciate, is to ensure that our institutions are operating effectively; that the community in fact is confident that those institutions are secure and safe. We have had some difficulties in doing that. We have said we are prepared to do that.
Our first responsibility in a situation of this nature, however, is to place our resources in the position of ensuring that those institutions are secure and running adequately. Once that happens, we will then have some resources to be able to address these concerns hopefully in a thoughtful, caring kind of way.
Mr Brandt: I would remind the minister that when there was flooding in southwestern Ontario, primarily in the county of Essex, that the former Minister of Agriculture and Food and some other interested members were there virtually the next day to observe the damage that was done, to assure the people that assistance would be forthcoming and to take whatever actions were possible on the part of the government to assist in a crisis situation.
I believe that there is in fact a similar situation here, where some degree of contact, some direct indication from the minister that he is prepared to sit down, review the situation and try to return it to come degree of a normal situation would be the most positive signal that his ministry could possibly send out. And yet, he is standing idly by and waiting for the situation to continue to get worse and worse daily.
We now have in over half of the institutions, half of the jails in this particular province, a work slowdown and serious labour disruptions taking place requiring the minister to get an injunction to attempt to stop that. I do not believe that is the answer. I believe the answer rests with the minister. Why is he not prepared to make that contact?
Hon Mr Patten: First of all, I do not share the member’s characterization of the situation. Yes, it is serious. It is not deteriorating. I believe it is improving. The information I have shows that the vast majority of our institutions at the moment are back to normal. We have a handful of situations which we believe will also be back to normal in a short period of time, a matter of hours hopefully. And at that particular point I can assure the leader of the third party that we will do everything we can. We have indicated this.
It is a simplistic thing to say that someone should take action in a specific way. Let me assure the member that we are looking at this in a manner which we believe will resolve this. We for the co-operation of everyone in order to do so and we believe that this will take place later on today.
Mr Brandt: Jim Clancy on Global News this afternoon said, and I quote, “In August the deputy minister,” of his ministry, “signed an agreement with the union at the Don Jail that they would not let the bed count exceed 550.” As of this moment there are some 609 or 610 inmates in that particular institution.
How can his ministry have any credibility with the union when it in fact signed an agreement some three months ago which it has already broken, when he continues to take the position that he is not going to have any contact with it and when he has already broken this particular agreement? How does he expect to resolve this with those kinds of totally unacceptable labour relations?
Hon Mr Patten: Unfortunately, the information of the leader of the third party is not correct. I would suggest that he might want to ask his researchers to check the original document.
Mr Brandt: These are Jim Clancy’s comments, not mine.
Hon Mr Patten: If the member wants to refer to other people’s comments, commenting on a document in which we have participated in signing, then I think it is incumbent upon him to make sure that the information he has is correct. If he wants to deal with hearsay, that is one issue; if he wants to deal with the facts, it is the other.
Mr Speaker, I will tell you what the facts are. The facts indeed are that we did acknowledge that there was a capacity and when capacity reached a certain point we would address the issue of overage in counts of inmates coming in. However, we never at any point identified a particular figure in terms of saying, “Beyond this we cannot go.”
Would the leader of the third party expect that of us when we are sitting there in an institution where we have no control over when the police knock on our door and say, “We have 30 inmates for you,” or “We have 30 people who are charged”? We cannot say no. We must accept them. This would be a foolish position to be caught in, Mr Speaker. You can appreciate the difficulty --
The Speaker: Thank you. That seems like a fairly comprehensive response.
The Speaker: Just before I recognize the next questioner I would like to ask all members of the assembly to recognize on the east side of the Speaker’s gallery a member of the Nicaragua National Assembly, Dorotea Wilson. Please join me in welcoming her.
GOODS AND SERVICES ACT
Mr Laughren: I have a question for the Treasurer concerning his position on the federal government’s proposed goods and services tax. Although I am not sure, I think that the Treasurer is opposed to the federal government’s GST, and I am going to make that heroic assumption in my question. Can the Treasurer tell us, if he is opposed to it, why he is opposed to it? First, is it because he does not like the fact that it is a regressive consumption tax; second, that he wants that entire field to himself in the province of Ontario; or third, that the level is just a little too high?
Hon R. F. Nixon: The Premier (Mr Peterson) instructs me to answer one and three, and having fulfilled that instruction, I would like to say something further on my own behalf and to probably emphasize the point I just made. The Premier has found the tax to be unacceptable. The treasurers meeting in Montreal gave it their consideration and we found it to be unacceptable. I thought perhaps I should make that clear.
Specifically, the honourable member refers to the rate at nine per cent, which we think is going to be seriously inflationary in spite of the fact that the Minister of Finance for Canada says that this is going to be looked after by the Bank of Canada. We feel that the impact here will have deleterious effect on our economic growth and development, in job creation and all of the aspects that have been associated with our buoyant economy. There are other reasons that the member might want to pursue.
Mr Laughren: I wanted to know from the Treasurer as well what this means, because he obviously now has come out -- despite the different views in the headlines that he has expressed over the last six months. One minute he is in favour of it and the next minute he does not think it is such a good idea. Does this mean that the Treasurer will have no part whatsoever in rolling together that regressive sales tax with his regressive sales tax in the province of Ontario?
Hon R. F. Nixon: The honourable member knows that the sales tax in Ontario is not seriously regressive because we have a clear spectrum of programs that ease the impact on low-income taxpayers. We are very proud of the fact that the honourable member himself, as I recall, reportedly supported that type of program that eases the regressive aspects.
But I should also say that he would know that the Minister of Finance for Canada terminated any discussions with the treasurers. He did this in his usual gentlemanly way by phoning us all and saying “We are going ahead on our own and at our own rate and we will not be amalgamating our tax with yours. We thought that the discussions were going forward with some substantial content, but there has been no contact in this regard since the time that he took --
Mr Laughren: Oh, you wanted to be co-operative.
Hon R. F. Nixon: Of course. Why should we not be co-operative? We are prepared to be co-operative at any time with the government of Canada or any other reasonable source.
The Speaker: New question.
Mr B. Rae: We will continue to co-operate with the opposition.
The Speaker: The member for Parry Sound is waiting patiently. It is time for a question, not further supplementaries.
NURSES’ PARTICIPATION IN HOSPITAL MANAGEMENT
Mr Eves: I have a question of the Minister of Health. The minister is aware that her ministry passed Ontario regulation 83/89 last February. This would allow staff nurses at public hospitals to sit on committees which would give them a part of the administrative, operational, financial and planning aspects of hospitals across the province. I believe members from all three parties in this Legislature supported that initiative as an important first step towards solving the nursing manpower shortage in the province of Ontario.
Could the minister please tell the House today how many hospitals to date have submitted bylaws determining that they will follow her regulation for her approval and how many she has approved since these nurses were supposed to have been elected by 30 September of this year?
Hon Mrs Caplan: I want to say to the member that I understand the issues which are affecting the profession of nursing in this province. That is one of the reasons that we drafted a new regulation to give nurses more say and an important voice in decision-making within hospitals. I want him to know that we have worked with the Ontario Hospital Association to draft and frame a bylaw which has been circulated, and I want to tell him as well that I believe that much more can be done to see those regulations implemented to achieve both the spirit and the intent of those new regulations.
Mr Eves: That was all very interesting and very thoughtful on the part of the minister, but she did not answer the question that was asked.
It is our understanding that a joint Ontario Medical Association-Ontario Hospital Association prototype bylaw has been submitted to the minister for her comment and approval. It is also our understanding that the Ontario Nurses’ Association and the Registered Nurses’ Association of Ontario had no input into the drafting of this prototype bylaw. As a matter of fact, I have talked to the ONA, the RNAO and the Ontario Hospital Association this morning, and they have indicated to me that they have not received any response from her with respect to this prototype bylaw at all. Nurses from around the province have written me expressing their concerns. It would appear that although some hospitals are willing to comply, the majority of hospitals in the province, I think it is fair to say, and in the view of the ONA and the RNAO, are not complying or prepared to comply in the way we would like.
The Speaker: The question?
Mr Eves: What is the minister doing to ensure that this regulation and this provincial law is being upheld and that a suitable type of bylaw is being put in place in all the public hospitals in the province?
Hon Mrs Caplan: I cannot stress strongly enough in this House and outside this House my determination to see that nurses have more say within the working environment. I believe that is a significant issue both in quality of work life and ensuring that nurses are valued, appreciated and listened to within the hospital system of this province.
But I would say that we are consulting not only with nursing associations but with the Ontario Hospital Association and others as to how it can be implemented in a way which will change the culture and the attitude and foster better working relationships between the employers, the hospitals, and their employees, their nurses. I know that the member would want to share with me the optimism that I have that we will make progress in this province in achieving the objectives which I have so clearly stated.
Mr Dietsch: My question is to the Minister without Portfolio responsible for disabled persons. Recently I was contacted by a disabled constituent who has designed and built a new home to suit her needs. As the minister can appreciate, my constituent was quite proud of her accomplishments, so proud in fact that she wished to submit her plans for consideration of a Premier’s Awards for Accessibility. The new home includes widened halls, sliding doors, a large bedroom on the main floor, a special room with a whirlpool and a large shower for therapy and an office so that she can continue to work at home. Let’s imagine her dismay when she learned that there was no category for an individual to enter.
Can the minister inform this House as to why an individual, disabled or not, cannot enter the competition for the Premier’s Awards for Accessibility?
Hon Ms Collins: I want the member to know that I am familiar with the case to which he has referred. The Premier’s Awards for Accessibility were created in 1985. The criteria used to judge applications include innovation, access, integration, utility, safety, practicality and interior design.
Regarding the case to which the member refers, these awards were conceived specifically to raise awareness of design issues, of which the disabled community are only too aware, and this is why the awards have been targeted towards architects and other design professionals. Having said that, I want to inform the member that we are more than happy to accept applications from anyone who has made an effort to design his or her home or workplace with barrier-free concepts.
Mr Dietsch: I know that everyone knows that able-bodied people take for granted the ability to move independently and that a disabled person must always consider the physical barriers to moving from place to place: Are there any stairs? Will doorways be wide enough? Will I be able to use the washroom? These are questions that are common for the disabled, and I hope we will consider such a category for individuals such as Linda Crabtree.
I would like to ask the minister what her office is doing to encourage and promote barrier-free design in the province of Ontario.
Hon Ms Collins: The member is exactly correct when he talks about the physical barriers which confront disabled persons daily. These are the types of problems which we are trying to make the design profession aware of through the Premier’s awards.
The members of this House should be aware that in response to the United Nations declaration of the Decade of Disabled Persons, this government formulated its own proclamation. Principle 4 of this proclamation states, “Public co-operation will be sought to promote positive action in broadening access of persons with disabilities into the life of the community.”
This government believes in that principle, and I would like all members of this House to know that my office funds the Barrier-Free Design Centre, located at Sunnybrook Medical Centre. This centre’s mandate is to inform design professionals of the aspects of barrier-free design. It also serves as a clearinghouse for new products and information --
The Speaker: Thank you.
Mr D. S. Cooke: I have a question for the Minister of Housing. I would like to refer to a publication called The Rent Review Publication. It is produced in Burlington by a couple of consultants, one of whom used to work for his ministry in the rent review section. I would like to quote very briefly from this publication. They are putting on a seminar on 30 October which the minister might want to attend.
It says: “This practical seminar will be taught in a by-example method, stressing the ‘how to’ aspect of the legislation. We will teach you how to sell rental property by using the system. Here is what you will learn:
“How and why the new legislation contributes to apartment flips....
“We have only one purpose for this seminar. That is, simply to teach you how to sell more rental property under rent controls.”
Would the minister agree with what we have been saying for months, since the new legislation came in, that his rent review legislation contributes to apartment flips, which directly contributes to huge rent increases by tenants in this province?
Hon Mr Sweeney: The honourable member is well aware of the fact that when the rent review legislation was changed, I guess it is three years ago now, there was a clear limitation of five per cent on the amount that could be passed through in terms of refinancing a building. That was, as the honourable member is well aware, to counteract the situation that existed at that time, where the entire amount was requested as a pass-through cost.
I think there has been a significant change. I am not sure whether the honourable member is suggesting (a) that buildings not be permitted to be sold, or (b) that there be no pass-through costs, but I think the change in legislation has certainly improved the situation that existed previously.
Mr D. S. Cooke: I think the minister has to get a better grasp of his own legislation. He will understand that in addition to passing through additional charges for the mortgage, there are also financial loss provisions, and then there are the base rent increases, and we are talking huge rent increases that encourage flips of apartment buildings.
I want to refer specifically to one that has been raised in the House before, 27 Walmer Road. In the last five years, this apartment building has flipped five times. The cost has gone up 265 per cent. This is a major problem. Yesterday, the minister agreed there was a major problem with the capital costs and renovations that are not required. Is he prepared to agree this is a major problem, and what proposals is he prepared to put forward to plug this second loophole?
Hon Mr Sweeney: I think the honourable member is also aware of the fact that in the change in legislation, there was an inclusion, for the first time, of costs no longer borne; in other words, that those kinds of pass-through costs that originally just were put on and kept there for ever and a day now are removed once that cost no longer exists. So it is a two-way street.
It is true that when additional costs are incurred, the landlord has the right to ask for a share of those additional costs. It is equally true that when those costs no longer exist, when they have been accounted for, then they are no longer borne and therefore cannot be included, and there is a reduction, as a matter of fact.
EAST METRO TRANSPORTATION
Mr Cousens: I have a question for the Minister of Transportation. On 22 June of this year, the Legislature approved a private member’s resolution I tabled that called on the House to consider the east Metropolitan Toronto transportation corridor and called upon the minister to conduct a detailed study that would involve Metro, Scarborough, Markham and Pickering, to look at the transportation needs and the environmental concerns as they relate to the east Metro expressway, as it is so adjacent to the Rouge Valley.
I would like to ask the minister if his ministry has begun that process, and what progress report he can make on this study that we called for in that debate four months ago.
Hon Mr Wrye: I am certainly aware of the point that my honourable friend makes about that resolution back in June on this very important matter. I can advise the honourable member that a very intensive review of the east Metro transportation corridor proposals that we have had in the past, and indeed an intensive review of the mix of transportation needs in the eastern part of Metropolitan Toronto and indeed in York and Durham regions, is well under way within my ministry, and to the extent that we will involve others in the ongoing discussions in the future we will be doing so in the next short while.
Mr Cousens: That is not much of an answer. In fact, stop calling it question period, because we are not getting any answers out of the ministries, even in estimates. I have asked the minister point blank: What is he doing on this? It happens to be a major concern to all of us. This House would not have approved this resolution four months ago if it did not believe there was some importance to it. It happens that the minister cannot come forward now and tell us what he is doing. He is always studying, but he never tells us what he is studying. He has never come forward with a report. Could he tell us what proposals are on the table with regard to the east Metro transportation corridor, and if any other alternatives are being looked at, what are they?
Hon Mr Wrye: The honourable member for the third party seems to forget some of the things that are happening in the east Metro corridor. The honourable member forgets that just yesterday he was up on Highway 404, where we opened a $22-million project. Regrettably, the honourable member could not attend the sod-turning which began the construction on the nearly $250-million widening of Highway 401, 12 miles from Morningside, which we also got under way earlier this month. Regrettably the member could not or has not noted some of the very dramatic improvements we are undertaking to get Highway 407 under way, which will eventually move out to the eastern part of Metro.
We are looking very carefully at the east Metro transportation corridor and at the impacts of the proposals and the feedback that has been received, and certainly the environmental concerns that have been received, and in the next short while we will be coming forward to the Legislature and indeed to the affected municipalities to hear their thoughts on the various options available to us.
Mr Adams: My question is also for the Minister of Transportation. The people of Peterborough were rocked by the announcement of the closing of the Toronto-Peterborough Via Rail route. As members know, that route is very important to our region, but so are the widening of Highway 115 and the extension of GO Transit into and beyond Oshawa.
My question to the minister is this: Is there anything being done to speed up the widening of Highway 115?
Hon Mr Wrye: I appreciate the ongoing concern of my friend the member for Peterborough, and indeed of the people in Durham and other regions east of Metro, over the decision by the federal government to walk away from its responsibilities for inter-city transportation at a time when this government is putting literally unprecedented amounts of money into the same system.
The member will be pleased to know that we have made great progress in the process of upgrading Highway 115, which began I believe in 1986. As of now, that program is on schedule for completion in 1992 and will be completed thanks to part of the $2 billion of additional money which the Treasurer (Mr R. F. Nixon) so graciously provided in the budget. I am very pleased to have that money so that the final two contracts can be awarded in 1991, and this very important project, with commuter parking lots along the way, will be completed on time.
Mr Adams: I am grateful for that reply. As the minister knows, I see the widening of Highway 115 and the extension of GO Transit into and beyond Oshawa as being linked, as providing a transportation corridor between Metro and Peterborough. I ask the minister now: What are the plans for the extension of GO Transit into and beyond Oshawa?
Hon Mr Wrye: I can tell the honourable member that certainly the government is moving very aggressively, as he knows, to ensure the expansion of the GO Transit system in those areas which this Legislature has ruled and has legislated an appropriate measure of mandate for GO Transit. We are committed to spend an additional $400 million over the next five years on capital improvements alone.
In terms of our movement of the Lakeshore line eastward into Oshawa, I can tell the honourable member that a great deal of work is now under way and is nearly completed on the environmental assessment report. It will be submitted in the near future and we hope to he able to move forward just as quickly as possible to take the GO Transit services further east than its current Whitby terminus.
RENTAL HOUSING PROTECTION
Mrs Grier: My question is for the Minister of Housing and it concerns a landlord known as Ariann Developments and a tenant whose name is Sylvia Blackman. Ms Blackman has been a tenant in a building on Christie Street for nine years and has never missed a rent payment.
Last April, she received a notice of eviction on the grounds of nonpayment of rent, which was eventually withdrawn, but when she returned from being out of the country last July, she found that she had been evicted, that the locks had been changed on her apartment door and the contents of her apartment had been seized. She has been to court twice but she is still without a home and without her possessions.
Surely the minister must agree that tenants deserve greater security of tenure than this woman has had, and what does the minister intend to do about it to make sure that Ms Blackman is reinstated and that another tenant is not subject to the same kind of harassment?
Hon Mr Sweeney: The honourable member has referred to a situation where, at least as I understand it, the law has clearly been broken, and that the tenant in question has access to the courts to get remedy for the law being broken. The honourable member would be well aware of the fact that the minister has no greater power than the court has and, as a matter of fact, does not even have the power that the court has. I certainly would be prepared to look into this on an individual basis, but I do not have a solution beyond the power of the courts to make a ruling and to enforce that ruling. Our job is to pass legislation.
Mrs Grier: The courts have not served this particular tenant well; I grant that. But this government has not served the tenants of Ariann Developments well either. That company lost its charter by a technicality some months ago and on a motion by the member for York Mills (Mr J. B. Nixon) was reinstated by this government despite the fact that many tenants of the company came before a committee of this House and said: “This is a bad landlord. He ought not to be allowed in business.”
In my constituency, at least 50 tenants have been served with incorrect eviction notices by this same landlord, and I have asked the minister if he will investigate under the Rental Housing Protection Act allegations that this landlord is attempting to gain vacant possession so that she can then demolish affordable housing and replace it with luxury condominiums.
Will the minister agree to take action within the powers that he does have under the Rental Housing Protection Act?
Hon Mr Sweeney: If we are talking about the same landlord I think we are, the honourable member will be aware of the fact that the ministry has charged her under legislation. I believe that case is coming before the court in December. Where there is clear evidence that the act has been violated -- I cannot prejudge what that decision will be; we will simply have to wait for it.
However, the other point I would make is that there have been some activities on the part of this landlord, we have investigated them and the ones that have been brought to our attention do not appear to violate the Rental Housing Protection Act, and until the act itself is actually violated we do not have the power to charge her any further.
VIOLENCE AGAINST WOMEN
Mr Jackson: My question is for the Premier. He would be familiar with his 14-member interministerial committee dealing with sexual assault and family violence, particularly violence against women. I would like to ask the Premier, what is his understanding as to the time frame for completion of that report and when will it be ready for legislative action by his government?
Hon Mr Peterson: I think the Solicitor General will be better able to help the honourable member with his question.
Hon Mr Offer: The member raised an important issue dealing with the interministerial committee, currently chaired by the Ontario women’s directorate. This is a committee that is designed to address a number of issues: short-term and long-term financing, the whole question of education, the whole question of what these centres are designed to accomplish and how best they can accomplish it. This committee has been working for the past while and I am currently awaiting a report dealing with these very important issues.
On the time frame, I must say that I cannot give the member a specific date right now, save to say that they are currently meeting and addressing these very important issues. I am looking forward to receipt of their final report in the very next while.
Mr Jackson: I hope the Premier will listen to the supplementary because there is a serious concern of women’s groups all across this province about sexual assault crisis centres and battered women’s homes. There are a series of services that have written letters to his government and they have been told that the Solicitor General’s hands are tied because ministries are not yet ready to report. Even in the Premier’s own Solicitor General’s response he talks about the breadth and complexity of this problem, but he does not talk about the importance and seriousness of it in terms of its human consequences.
My question to the Premier’s Solicitor General is simply this: If centres are having to turn away many women who are victims of violence, if our court support programs are being cancelled and if our medical support programs for doctors are being cancelled, when will his government put a priority and resolve to bring forward that report and give some legislative life and action to that agenda, which the women of this province deserve?
Hon Mr Offer: In the original question, I dealt with the whole issue of the interministerial committee but there is of course an ongoing need of many of those centres for immediate funds. It was just last week that I personally signed letters to each one of those centres throughout this province that allocated over $300,000 so that they would be able to continue to meet the needs of those they have been designed and set up for.
In addition, I have clearly come to grips with some specific needs, with Hamilton and with the Barrie crisis centre, specifically with immediate dollars needed, and those dollars have been sent so that they can continue to meet the needs of the people they were designed to help. This particular ministry and this particular government have clearly indicated their continuing --
The Speaker: Thank you.
CONTROL OF RABIES
Mr D. W. Smith: I have a question to the Minister of Natural Resources on the incidence of rabies --
The Speaker: Order. Would the Attorney General (Mr Scott) and the member for Burlington South (Mr Jackson) control themselves.
The Speaker: Order. We would like to hear the question. The member for Lambton.
Mr D. W. Smith: As I said, I have a question for the Minister of Natural Resources on the incidence of rabies in southwestern Ontario, particularly in my own riding of Lambton. She will likely know that rabies in southwestern Ontario is the highest in the province; in fact, it is the highest in North America. It is costing us, the government, a good many dollars. Each year hundreds of Ontario residents receive anti-rabies vaccine because they have come in contact with these rabid animals. It has been estimated that rabies costs over $25 million annually in vaccination, diagnosis, compensation to farmers and education. I would like to ask the minister if she could explain and outline the steps that are being taken to reduce this serious health risk.
Hon Mrs McLeod: The honourable member is quite correct in indicating that the incidence of rabies in southern and eastern Ontario is in fact higher than anywhere on the North American continent. The good news is that in response to that we probably have the most advanced and aggressive program of rabies control on the continent.
We have a very aggressive program of immunization for foxes using an oral bait vaccine in Metropolitan Toronto ravines and in eastern Ontario we have just begun the first aerial drop of oral bait vaccines. This is an experimental program that has been developed by the Ministry of Natural Resources and it is actually attracting attention across the world. We also have a very effective skunk immunization program in the Metropolitan Toronto area.
They are experimental programs. They are being very closely monitored, but we are optimistic of success. In fact, our projection for next year in southern Ontario is that the incidence of rabies either will be stable or will actually decrease.
Mr D. W. Smith: As the minister has mentioned, there is quite an outbreak of it in urban areas, and down in southwestern Ontario, in particular in the Windsor area. I wonder if the minister can explain why the ministry is not there when the outbreak begins? Perhaps the minister could just give us a little more detail on that.
Hon Mrs McLeod: The outbreak of rabies will normally follow certain patterns that can be projected on the basis of the epidemiology of the outbreak, but there are some times when it occurs in unusual circumstances and that was the case in Essex county in 1988. It is not always possible to predict where that outbreak will come and it is not always possible to begin what is still an experimental immunization program in advance of that. We are certainly working very closely with health officials in the Kent-Essex area so we can ensure that there is no risk to human health and that there is protection for livestock and domestic animals.
Mr Pouliot: My question is to the Minister of Transportation. I noticed and was happy to see that the minister was very quick off the mark right after the announcement of curtailment of Via Rail services throughout Canada, more specifically, affecting Ontario. Yet I wonder if the minister is aware of a study of rail passenger service to and from northeastern Ontario by a special panel sanctioned and funded by the Ministry of Northern Development and Mines in conjunction and association with the Ontario Northland Transportation Commission that was commissioned in the spring of 1989 before the Via cutbacks were announced.
This is what the objective read, “The Ministry of Northern Development and Mines, in association with the Ontario Northland Transportation Commission, wishes to review with the people of northeastern Ontario, individually and collectively, the appropriateness of rural passenger service provided to the area.”
The Speaker: The question.
Mr Pouliot: “The objective will be to consider whether in the light of high cost and apparent lack of users reduced service at lesser cost can be in fact provided.”
The Speaker: Do you have a question?
Mr Pouliot: My question is as follows: Is it true that the report highlighted the following, “The desire to reduce the cost of the transportation subsidy on both the short- and long-term basis”? How does the minister explain the contradiction?
Hon Mr Wrye: I would prefer to explain it by referring the question to the Minister of Northern Development (Mr Fontaine), but he is not here today. The member will know that the Rukavina task force was set up, as he pointed out in his question, by the Minister of Northern Development. I can advise him that I understand from my colleague the minister, who is unavoidably absent today, that the work of the task force is complete and the report is in and is currently being translated. Until that report is released, I cannot otherwise speculate on any of the contents of the report.
Mr Pouliot: it is quite all right for the minister to pass the buck, but one thing he cannot do is escape from his mandate to provide and to develop transportation services in northern Ontario. With great fanfare, they were patting themselves on the back yesterday during estimates saying, “We may. We may not. Maybe yes, maybe no, we will pick up the slack.” When is the minister going to make a commitment that for whatever service is not being provided to the people of northern Ontario, the government in accordance with its mandate will pick up the slack and keep providing that essential service?
Hon Mr Wrye: I am just astonished that this member and members of his party are so quick and so prepared to allow Ottawa to walk away from absolutely everything. It is just astonishing to me.
The honourable member should know, and I would have thought would have been the first to say, that this government is not only fulfilling its mandate in terms of road transportation as we work on improvements to Highway 17, Highway 11 and Highway 69, all gateway roads to the north, as we open up five additional remote airports this year and prepare to open up an additional two or three remote airports in northern Ontario next year. I say all this because, for example, with remote airports, of the 21 remote airports in northern Ontario 10 are in that honourable member’s riding.
The Speaker: New question, the member for Simcoe West.
Mr McCague: Mr Speaker, do you think we could interrupt the Minister of the Environment (Mr Bradley) for a moment?
The Speaker: The member for Stormont, Dundas and Glengarry has a question.
Mr Villeneuve: To the Minister of the Environment: The minister, I am sure, is aware of a conference called Let’s Clear the Air, a week ago, right here in this city of Toronto. Can the minister tell this House why he has not taken steps, following the American lead I might add, to ban MMT as an octane enhancer and to legislate a certain percentage of oxygen content in our fuels? The US is way ahead of us on this one. We are looking for the minister to do something towards clearing the air.
Hon Mr Bradley: Last week, at the meeting of the Council of Environment Ministers of Canada, an awful lot was accomplished in terms of cleaning the air in this province and right across this country. The member will know that I brought forward the proposal some time ago that we move in all of Canada to the proposed California standards for automobile emissions. I am pleased to report that the ministers collectively acted upon this proposal that the Premier of Ontario (Mr Peterson) made at the conference of first ministers of each of the provinces, and moved forward on that.
In addition to that, I can tell him that there was an undertaking that across Canada they would follow the lead of Ontario in the vapour pressure, which comes down from 11.5 to 10.5, therefore producing less smog in the gas.
I can tell him in addition that there is an undertaking to work with the ministry of transportation in each of the provinces in terms of inspection of vehicles, which I think is going to be very positive. There are stage 1 catchment systems that the oil companies have agreed to, the gasoline companies have agreed to, which will again reduce drastically the amount of contaminants going into the air.
I must say that I am not always optimistic after these meetings, but there was a good deal of optimism coming out of that meeting.
The Speaker: Perhaps the minister could take a breath and let the supplementary come.
Mr Villeneuve: The greater Toronto area has almost 4.5 million people, the most concentrated, populated area, in Canada certainly, and in most of North America. MMT is a known producer of carbon monoxide and indeed produces between 75 per cent and 90 per cent of the carbon monoxide in our atmosphere, particularly important in a heavily urbanized area such as the greater Toronto area. Would the minister not consider at least using oxygenated fuels here in the greater Toronto area as a start towards reducing pollution, towards protecting the ozone layer and towards reducing carbon monoxide in our environment? The ball is in the minister’s court.
Hon Mr Bradley: I think the ball would be in a provincial court if air contaminants did not move from one province to another. Unfortunately, there are no borders between the various provinces that stop all the pollution. Just as in the last meeting we were able to agree -- as I say, with the Premier of Ontario and the various premiers meeting earlier this year -- coming forward with the proposal to reduce emissions, I would be happy to once again show the leadership of Ontario in bringing further measures to fruition.
When we examine fuels, one of the things we have to consider is that we do not cause a worse problem when we take certain action. I know the member and I would both want to agree on that. There are certain courses of action that can be taken. For instance, everyone is looking at alternative forms of fuel. I want to assure the member that sometimes when you ban one product, the product that is used to replace it can cause worse problems than the product you have banned. I understand why the federal government has not done this yet and I will be pleased to raise this matter with the federal Minister of the Environment to ensure that on a national basis we assess all of these problems with a view to finding a solution.
Mr Cousens: I have a petition here signed by 420 residents who are asking the government of Ontario to hold the line on tobacco taxes in Ontario and I submit these petitions as they have been given to me.
Mr Wildman: I have a petition, and with your indulgence it is in the old, acceptable form.
Signed by 132 permanent and seasonal residents of the Batchawana area, it states that “the waste disposal site at Batchawana is receiving substantial use, not only by permanent residents and cottage owners but from a commercial fisheries plant,” and is “not being maintained adequately at present, and poses serious environmental and health hazards.”
As a result, the petitioners are petitioning the provincial government “to allocate the necessary funds to ensure that adequate maintenance standards for the waste disposal site” -- at Batchawana -- “are upheld, and that proper monitoring and enforcement at the site are provided.” I have signed it and I support the petition.
ASSISTANCE FOR PEOPLE WITH BRAIN INJURIES
Mr Dietsch: I have a petition addressed to the government of Ontario with respect to the head-injuries group that is looking for an increase in funding towards rehabilitation, for rehabilitation facilities for the head-injured, and also a redirection of funding for home care for the care of head-injured individuals. It is signed by some 2,000 people from the Niagara Peninsula. I have affixed my signature thereto for consideration.
REPORT BY COMMITTEE
STANDING COMMITTEE ON REGULATIONS AND PRIVATE BILLS
Mr Callahan from the standing committee on regulations and private bills presented the committee’s report as follows and moved its adoption:
Your committee begs to report the following bills without amendment:
Bill Pr29, An Act to amend the Toronto Baptist Seminary Act, 1982;
Bill Pr33, An Act respecting Grand Valley Railway Co. Inc.;
Bill Pr35, An Act respecting the Ontario Home Economies Association;
Bill Pr42, An Act respecting the City of Guelph:
Bill Pr48, An Act to revive East York-Scarborough Reading Association Inc;
Bill Pr51, An Act to revive Astcam Co. Limited.
Motion agreed to.
ORDERS OF THE DAY
EMPLOYER HEALTH TAX ACT, 1989 (CONTINUED) / LOI DE 1989 SUR L’IMPÔT PRÉLÉVE SUR LES EMPLOYEURS RELATIF AUX SERVICES DE SANTÉ (SUITE)
Resuming the adjourned debate on the motion for second reading of Bill 47, An Act to impose a Tax on Employers for the purpose of providing for Health Care and to revise the requirements respecting the payment of Premiums under the Health Insurance Act.
Ms Bryden: I adjourned the debate on Thursday and we are getting back to discussing Bill 47, An Act to impose a Tax on Employers for the purpose of providing for Health Care and to revise the requirements respecting the payment of Premiums under the Health Insurance Act.
They say there is nothing new under the sun, but I think there is one exception to that at least and that is the ability of the provincial Treasurer (Mr R. F. Nixon) to dream up new taxes, to dream up untried taxes and to continue to load the lower-income groups and the middle-income groups with more taxes, but to leave the well off and the corporations with less and less taxes. That is new for a government which claims that it believes in a progressive tax system, but we are finding out more and more that it does not believe in a progressive tax system.
The title of the bill is also misleading because it says “to impose a tax on employers for the purpose of providing for health care and to revise the requirements respecting the payment of premiums under the Health Insurance Act.” The minister told us last Friday it was a bill to abolish health premiums. As of 1 January no one in Ontario will need premiums in order to obtain full health care. But this bill continues premiums for a considerable number of taxpayers for the first three months of 1990. Therefore, it cannot be called a bill to end premiums on health care.
This is one of the problems with this bill, because thousands and thousands of people have been receiving premium notices in the month of December and they have also received a letter from the Minister of Health (Mrs Caplan) which says, and I quote:
“As announced in the 1989 Ontario budget, OHIP premium payments will be eliminated effective 1 January 1990. This means that after you pay the amount indicated on the enclosed notice, you will not be billed again for OHIP premiums. As always” -- the minister says -- “premiums are payable three months in advance. After 31 March 1990, as long as you remain a resident of Ontario, your coverage will be valid without further payments. Your existing OHIP number remains unchanged and you should continue to use your current identification card. Please inform the Ministry of Health in writing if there is a change in your family status or address. If you have any questions about the elimination of OHIP premiums or about your health insurance coverage, please contact your nearest Ministry of Health office listed below.”
First she tells us, in the first paragraph, that premiums have been eliminated effective 1 January 1990 and then she tells all these people, who are pay-direct people who received this letter with their notice, that they have to keep on buying their coverage up until 31 March through premium payments, which they are expected to pay in December.
Certainly this is doubletalk and I think it indicates that the government is trying to pull a ploy of getting three months’ coverage out of the premium payers who are on direct pay or whose employers were paying for them and who also have received similar notices for December to cover the next three months. This is really a fraud on the premium payers who are being asked to pay for three months’ extra coverage up to 31 March 1990.
Of course, who gets the money? It goes into the general revenue of the province, but presumably it can be used by whatever ministry the Treasurer assigns it to and it will probably be used to pay part of the transitional costs, as they call it, of getting the new system in effect, the new “premium-free” system in effect.
But these people who are being asked to pay the December premiums feel that the bill should be amended to see that they do not pay a final December premium that covers them beyond 31 December, and the same should apply to employers who pay premiums on behalf of employees. If they have already paid, there is no reason why a refund could not be arranged in order to make the minister’s letter a true letter saying that there is no premium coverage after 31 December. That is one of the things that I think we should be looking at as an amendment to the bill to protect those people.
Last Monday, I pointed out that there had been a number of amendments introduced to the bill, at the last moment I may say. To be precise, 20 of them were sent to me the morning of the day on which these two bills, Bills 47 and 46, appeared in Orders and Notices for the day’s business. They were all together. There were three of them for Bill 47 and 17 for Bill 46. That is much too late to notify people about substantial changes in the legislation. We certainly did not receive them until Monday morning, the day the bills were to come up.
While it may have seemed ungracious to say to the new minister that he was not improving on the methods of the previous Minister of Revenue, the fact is that he was following the pattern that both Conservative and Liberal governments have followed for far too long in this House, and that is giving the opposition as little as possible notice of amendments and giving them as little as possible information in compendiums.
The compendiums for these two bills, Bills 47 and 46, came very late for us to prepare adequately before we had to caucus them. The demand for the bill from the ministry and from the House leaders came very shortly after those compendiums had finally been received. I think this is an insult to the opposition, which should expect at least two weeks’ notice of the compendium in advance, and the amendments should certainly not come on the morning that the bills are to come up because they have to be caucused as well. Therefore --
Mr Haggerty: You’ll have to talk to your House leader on that.
Ms Bryden: I understand the House leaders agreed to that, but the ministry also was pushing to get this legislation railroaded through. Yet, what we are looking at it is a brand-new tax, a tax that has never been used in Ontario before. It is only being used right now in two other provinces, and that is Manitoba and Quebec.
We have no experience with this tax yet. We do not know what its impact will be on the economy and the population. We do not know how much it will be shifted. We do know that it will be considered a corporate expense for all companies who pay corporation tax. Therefore, the taxpayers of Canada will end up paying as much as 50 per cent of it, so that in that sense it is a tax that is not entirely paid by the employers of Canada but is shifted to the taxpayers of Canada.
We do not know how much of it will also be shifted to other people such as those who buy services from employers who pay the tax, such as those who operate transportation services and deliver goods to the employers who pay the tax. We do not know how much it may be shifted to employees in the sense that some employers will consider that it is an employee benefit, even though it is not related to the employee’s liability for any health care costs. The employers will still think that since they are paying it to pay for health care for the whole province, wages should be suitably reduced and that this should be considered an employee benefit when you are negotiating a new contract.
It has been touted as a benefit for the entire province of Ontario. All residents will, from 1 January, be entitled to full OHIP coverage without payment of premiums, except for the exceptions I have mentioned. That is a principle that this party has been advocating for a number of years. I think we were the first ones, about eight or so years ago, to come out in a committee report advocating that we abolish OHIP premiums and move to taking it out of general revenue as most other provinces now do, all but two others.
It took the Liberals a long time to come in step with this move, but they finally promised it in 1985 and, almost five years later, they are finally implementing it through this bill. We question whether they looked at the other alternatives.
Did they look at the other options for financing the premium payments which amounted to about $900 million and whether they could have financed them out of a progressive tax system?
Our party, when it advocated them in its first move, said that it should be financed out of the progressive income tax system.
Why did the government not look at putting in a corporation tax to cover all those thousands of corporations that pay no tax whatsoever -- a minimum tax at least, but even more needed, a proper corporation income tax without all sorts of loopholes and concessions?
Why did the government not look at taking the other half of the capital gains tax? The federal government now collects 50 per cent tax on capital gains, but there is still the other 50 per cent, and there appear to be a great number of capital gains being realized these days with the way takeovers and flips are going on. But that other half is completely tax-free at the moment, and it is a source that the government could have looked at in order to have a fairer tax system.
Why did it not look at the succession duty area which this province vacated about 10 years ago, leaving the well-off with absolutely no tax on their assets when they pass on? I do not favour a succession duty tax on the family farm or the family home, but I do on the well-off who have been getting away in this province without paying anything or without their estates paying anything when death occurs. Most other provinces still retain a form of succession duties.
Why did they not look at a wealth tax, which they use in Sweden and which taxes assets rather than income? They are assets which could be used for investment and development if they were put into investment and development under some sort of direction from the government, but if they are simply left to the whims or the desires of the owners of those assets, there is no guarantee that any of them will go into productive investment in the country. A lot of it may go out of the country to other places.
The government has not even looked at a wealth tax in recent years. My colleague the Revenue critic has been suggesting for a number of years that we should be looking at a wealth tax and these other sources of taxation to make sure that we end up, not with a regressive tax system. which we now are developing, but with a progressive tax system, a tax system based on ability to pay. Ever since this government came into effect it has been turning the pendulum in the opposite direction; it has been turning the tax system into a tax system based on regressive consumer taxes, user fees and now things like the employer health levy.
Members may say it is not entirely regressive because it is on employers’ payrolls, not on employees, but as I say, it can be passed on to the other taxpayers of Canada as a deduction from income tax. It also is a tax which hits the people with labour-intensive industries, and that makes it regressive, because most of the labour-intensive industries have big payrolls but small profits, and that is one of the major objections to it.
Another major objection is that the Treasurer has chosen to put in a tax which is virtually without exemptions. That means he is hitting a very wide swath of the population of this province. I think over 400 employers will be covered by it, but a great many of those employers are in the public sector, so that the tax will fall on school boards, hospitals, municipalities, any kind of government agency that is separate from government itself, such as a crown corporation that produces some goods and services. All of those groups will be paying the employer health levy, the employer health tax as it is called, EHT.
I think the letters EHT are going to become as hated as the letters GST, goods and services tax, because they are both taxes which aim to hit as large a population as possible without very much in the way of exemptions to allow for the special effects of such a tax on the people who pay the tax initially but who may have to ultimately impose the tax on other people. I am speaking of municipalities, hospitals, school boards and all such public sector bodies.
It is true the Treasurer has suggested that he is aware of this problem and that those bodies have not budgeted for extra tax starting in January 1990, and their budget year may not be over, so he is going to put up $23 million as sort of transitional grants to help them over the hump until they can persuade their municipal governments and school boards to raise the mill rate or to cut back on services in order to somehow find the money to pay the employer health tax.
If the school boards and hospitals and municipalities were able to raise the additional money easily, it might not be such a problem, but most of their sources of revenue are from senior governments or from services which the public may be paying for in user fees but which cannot be drastically increased, so that really the Treasurer should completely revamp the grant system to all those public sector bodies which will be hit by the tax in order to see that if the tax is allowed to continue, they will have adequate funds for it. Otherwise, it just becomes part of the government’s attempt to foist off on the municipalities and the local government bodies a greater and greater percentage of the provincial government’s responsibilities.
This is becoming a really alarming trend, particularly under this Liberal government. The province and the provincial Treasurer are just ducking out of their responsibilities in a thousand areas and saying, “Let the municipal taxpayer make up the difference or let them cut their services.”
We all know what that means. It means no further increases in day care or in services to people or in children’s services, and municipalities carry a great many children’s services. It means no further increases in cultural grants which municipalities are now having to pick up in many cases because the Ontario Arts Council and other provincial bodies are cutting back on their grants.
All of those trends are making the provincial government richer, it would appear, and the municipal and local bodies poorer. As a result, we are going to have a very much poorer quality of life.
That is another reason why we should be looking at this employer health tax with very questioning regard. As I say, our first line of change would be to produce a genuinely progressive tax system in this province.
I know we cannot do this overnight because the federal and provincial government have let the whole income and corporation tax system become so pro big business and there are so many loopholes for the well-off that they are a very poor instrument at the moment to use for replacing the premium income.
For instance, if the government had to collect the $2-billion payroll tax through corporate income tax at the moment, it would require a nearly 50 per cent increase in the corporate income tax rate. That is not to say it might not be a deserved increase, because corporations have been getting a lower and lower rate over the years -- the personal share of income tax has been going up while the corporate income tax share has been going down -- but it would be a substantial change that would be difficult to absorb immediately.
Personal income tax would have to go up to about 61 per cent of basic federal tax. It is just being raised at the moment to 53 per cent under a bill before this House. It was only 48 per cent when the Liberals came in, so there have been successive increases there.
The thing is, if the Treasurer puts it on the personal income tax, he is putting it in a leaky sieve because the tax is so badly eroded by concessions and loopholes that it is not a suitable way to switch the tax system to a progressive one. It would appear that a payroll tax is the quick fix to get the premium revenue of $2 billion the Treasurer is going to need.
The premium revenue is actually about $1.8 billion but the province is deciding it is going to pick up another $300 million on top of what it needs to replace premiums. That is typical of the Treasurer. When he puts his hand in your pocket, he empties your pocket rather than just taking a share. So to replace the $1.8 billion in premiums, they are going to take in $2.1 billion.
They have not told us what they are going to use this money for; whether it will be for health care or any other needs of the Treasurer. It seems that, generally, he is grabbing money where he can, including the entire lottery proceeds, if Bill 119 goes through. Yet it is only a small amount coming from the lotteries, about $500 million, about which he is going to say, if Bill 119 passes, that he has the say about where it will be spent. At the moment, he is not giving any guarantee that any of it will be spent on culture and recreation. That is another tax grab that is coming this year unless we can stop it.
The employer health tax is also a tax grab that I think is badly designed and which we do not have enough information on to choose as the substitute for the premium income. We in this party certainly support the elimination of health care premiums and we think it is long overdue, but replacing it with a new and untried tax without looking at all the other alternatives for a fair tax system is what we are objecting to.
This is why we intend to vote against this tax, because we think the government has to go the route of cleaning up its tax system, making it fair and basing it on ability to pay, before it tries imposing any more overall taxes such as the employer health tax, without exemptions or further study of its impact and without considering its effect on all the public sector bodies.
The other objection to it is that it will require massive bureaucracy to collect. Again, we do not know what those costs will be. It will produce, undoubtedly, a shift in the amount of business which is done through the present employment picture and will encourage industries to automate more quickly. This will mean a loss of jobs in this province. It is really a very unfair tax because it does hit the labour-intensive industries and it may just be brushed off by the richer employers, who will also be picking up a gain: those who were paying their employees’ premiums may actually end up with more money in their pockets than the amount of the tax because it is relieving them of that premium cost and putting on them a cost that may not be very great if they are a fairly low labour-intensive industry. That is another inequity that comes from this tax.
The effect on small business is also very much feared. Small business itself feels it will not be able to compete in both the local market and with the United States firms under free trade if this additional cost is added to its cost of doing business. And I think those fears are real.
It is true that smaller businesses will pay a lower rate of tax, about half of what the top rate is for the employers with payrolls over $400,000, and then there is a sort of notched provision for a variable rate for those who are close to the threshold between those two thresholds of employers with payrolls over $400,000 and employers with payrolls under $200,000. But it is not really helping small business to say that it is a nominal tax and that they should be able to pay it regardless of how many employees they have, because it is a tax that they were not anticipating, that they have not allowed for in their pricing practices and that they cannot absorb nearly as easily as a large business. Yet they are both covered by the tax.
In Manitoba, which has a similar tax, there is a $300,000 exemption; $300,000 of payroll is exempt. It seems to me that the government should be looking at the possibility of a small-business exemption in this province, because I know it is going to hear from every small business in the province that this is an unfair tax.
In Quebec the tax is somewhat higher than ours -- 3.36 per cent compared to our 1.95 per cent -- but there are no exemptions of any kind in Quebec, so that makes it a considerably larger burden and it may be leading to more automation and reduction in the number of labour-intensive activities. Again, we have not had enough information from the ministry as to its effect on businesses and while we asked for some of these figures, not very many of them came through before this bill was brought before us. It still looks as though the ministry is trying to railroad through a new and untried tax without sufficient information for the opposition parties to assess it and it is also, presumably, trying to railroad it through this House very quickly by bringing it up on such short notice.
I think we possibly should consider public hearings to let those who want to protest it be heard. I know all those people who are going to have to pay premiums for the three months of January to March are certainly going to want to protest what is happening there because it really is a tax grab and it is simply helping the ministry to pay its OHIP bills over the first three months with an extra little pot from that extra tax.
Right now only 15 per cent of the total cost of health care in this province has been coming from the premium tax. The rest of it is coming out of general revenue, as it is in all other provinces except the three with the employer tax. So there is no reason why the ministry could not finance the health care system out of general revenue at least in those three months before the employer tax produces any revenue.
I really feel it should postpone the whole thing and finance it all out of general revenue but make our revenue system much more progressive. We are not asking for the ministry to go broke in those first three months when it is not getting the old premium payments in; we are asking it to look at it realistically. It should be financed out of general revenue and not out of those particular people who get caught with continuing premium payments in December for coverage in the first three months of the year.
There might also be consideration given to exempting businesses in their first year of operation. That might be a way of cushioning them from the sudden effect of this tax on their operations and their economic prospects for the year. Again, we would prefer to see the tax not gone ahead with.
I might say we did not make this decision lightly. We believe this government is not carrying out its avowed aim of producing a fairer tax system in this province and it is not carrying out its promises to see that we have a progressive income tax system. It is simply reverting to the old policy of previous governments and it is accentuating that policy of switching to taxes that are regressive, like gasoline taxes, sales taxes, motor vehicle licence taxes, user fees of all kinds, and are just saying that is the kind of tax system it wants.
If that is the kind of tax system they want, they are out of step with the modern world, because they are going to find there will be a tax revolt developing with all the switches to regressive taxes, including of course the goods and services tax, this tax and the one we will be discussing right after this tax under Bill 46, which is the commercial concentration tax. I think it is time they stopped looking at new gimmicks and instead looked at real tax reform.
This is the reason why we have decided to oppose this bill, and we will ask for amendments to change that particular situation that I mentioned about the double taxation for the first three months.
I want to speak briefly about the one significant amendment to this bill that was brought to us on Monday. The government acted quickly to save the employers from having to pay an instalment for the December payroll tax. The original bill started the payroll tax, the employer health tax. It was to become effective on 1 December. So the government thought it was going to get another extra month’s revenue out of that tax and the payments would not come in until January, because you usually remit a month later. But it would in effect give it an extra month’s revenue, and then the payments from 1 January on would be for the 12 months of 1990.
That apparently created a lot of flak from employers and there was a sudden new amendment brought in which quickly changed the date of the effect of the tax from 1 December 1989 to 1 January 1990, and all reference to a December payment is dropped by this new amendment. It obviously was a backing off by the provincial Treasurer and the ministry from the attempt to get that extra month’s revenue for the employer health tax out of the employers, but you notice how quickly they acted when it was a ease of the employers paying an extra chunk of tax. That amendment still has to come up before us and certainly it does have the value of starting the whole employer tax system from 1 January on a uniform basis and I think that is desirable rather than starting with an extra month’s tax on the people with payrolls over $400,000, which were the groups that were to be affected by the December date.
I suppose the ministry thought it was a handy way of getting the tax coming quickly from the handful of employers with the biggest payrolls and getting that extra month’s revenue in from it, even though that revenue would not come in until January. Now they have got it all worked out so that employers will all pay on 12 months’ gross payroll every year, but it will not be calculated until a year later, when the annual return is presented by the company, so that in 1990 there will be payments that will not be based on the exact wages for 1 January 1990 to 31 December 1990, but when the adjustment comes around at the end of the tax year the actual payrolls for those 12 months will be covered but there will not be that extra December one if this amendment is adopted. So as I say, it is one amendment that the government acted quickly on. They really are still leaving the tax on 12 months, as it was intended originally, but the timing of the payments coming in has been changed so that the year they settle up is 1991.
Since we are opposing the bill, we would oppose any amendment to it as well. I do want to urge members to consider whether we are not moving too fast on this bill and whether we should not be looking at alternative methods of raising the money which is needed to replace the premiums and let’s get on with providing our population with adequate health care without the hassle of whether you are covered for this month or next month or whether you dropped out because you were unemployed or because you got behind in your payments. I think that is a step forward that our party has been advocating for a long time, but let’s finance it in a sensible way based on a fair tax system.
Mr Daigeler: Let me say first of all how pleased I am to finally be able to address this House on a major piece of legislation. I had previously prepared some four speeches on other topics; however, mostly because of prolonged speeches by the other side. I had been unable to follow through with the actual presentation. Perhaps the Treasurer, in his usual wisdom, could consider a Queen’s Park verbosity tax, whereby long and repetitive interventions would become taxable.
As a Liberal, I fully support the second reading of Bill 47, the Employer Health Tax Act. As my honourable colleague the Minister of Revenue (Mr Mancini) has pointed out, this act puts Ontario’s health care financing on a sound financial basis. It honours my party’s commitment towards a simplified and progressive taxation and it does this in a manner that is fair and equitable for employers.
Let me start with the last point first. Most employers know that a healthy worker is a productive worker. Therefore, many already pay 100 per cent of their employees’ OHIP premiums and should see little change through the employer’s health tax. Employers make use of Ontario’s infrastructure and of its natural resources and part of that resource is our people. To invest in health care is to support our most valuable resource, namely our workers. With the employer’s health tax all employees will contribute to the continued health of our most precious commodity.
Moreover, the tax has been graduated so no employer will be unfairly burdened. Smaller businesses will pay a smaller percentage. Based on the size of their payroll. Companies with high payrolls will pay a higher percentage. Of the three provinces to fund health care through a payroll tax, Ontario still comes in at the lowest rate.
Our business climate will remain competitive, not only with other Canadian provinces, but also with our neighbours to the south, American employers pay as much as 9.7 per cent, almost 10 percent, of their total payroll on their employees’ health care costs.
Finally, small business people will get an additional break in the tax by having to remit only quarterly. Treasury statistics indicate that 85 per cent of Ontario businesses will in fact fall into this category of a lower taxation rate and a quarterly, rather than monthly, remittance.
The second important feature of this bill is that ordinary Ontarians will realize a big saving by the introduction of this new measure. If you were paying OHIP you will save some $714 a year. And even if your OHIP premiums were paid for, you will still save some $274 at the end of the year because OHIP premiums will no longer be a taxable benefit.
May I remind members, and especially the members of the official opposition, of the Social Assistance Review Committee. This report, applauded by all three parties, although I am not sure whether that did include Right Wing Runciman, stated that OHIP payments should be abolished. SARC’s mandate was to look at our assistance programs for people with limited incomes. As the past chairman of the Liberal caucus committee on social policy, I am proud to see my government make life easier for low income Canadians with the adoption of this bill. We will move further towards the medicare system envisaged by Justice Emmett Hall, one that is equitable and financially accessible to all.
Finally, I am pleased to see a simplified system of health care financing. Soon gone will be the cumbersome collection system of individual contributions, family plans, partial or full employer coverage and premium assistance for students, seniors and welfare recipients. With the proclamation of this bill all Ontario residents will automatically receive health care coverage. Indeed, because of this simplification in the collection of the money, the Ministry of Revenue estimates that some 50 fewer civil servants will be needed to collect this tax, as compared to the collection of OHIP premiums.
In conclusion, I would like to say again that I proudly support the Minister of Revenue and my government on Bill 47, An Act to impose a Tax on Employers for the purpose of providing for Health Care and to revise the requirements respecting the payment of Premiums under the Health Insurance Act.
The Acting Speaker (Mr Breaugh): Are there any comments or questions on the member’s statement?
Mr Curling: Just comments on my colleague. As I sat here and listened to my colleague’s understanding of the bill and the passionate way in which he believes in this, I feel very proud to be associated with him. I did not want to make any comment, but I am moved to make that comment. I am sure that after that speech, this bill will be unanimously endorsed without any amendments.
Ms Bryden: I would just like to ask the member if he has really studied this bill and what its economic impact will be on small business and large business and also what the cost will be to big business, because it looks in many cases as if they will get off with the least expenditures and the public sector will end up paying very large sums that they have not budgeted for and that they have no means of raising. So has he really studied all the economic impacts? Should we not delay the thing and possibly look at other alternatives or at least look at the implications of this tax for our economy?
Mr Haggerty: You still want OHIP premiums then, do you?
Mr Jackson: I am quite moved by the member for Scarborough North’s (Mr Curling) defence of the member for Nepean (Mr Daigeler). I rather witnessed a very passionate. heartfelt reading of his prepared text and I thought he had captured the intent of the writer, whomever it maybe, but that was the passion I noticed.
I would like to commend the member for his text. I do not agree with him and I wish that perhaps, instead of reading those texts, he would have time to examine more fully the breadth of opinion which is being represented by all of his constituents, who the member undoubtedly would admit have written him with serious and legitimate concerns from the employer’s perspective in terms of affordability and from the perspective of the consumer, who knows that in many circumstances the costs associated with this will not just be limited to a transfer payment to this government, but will be put down onto the costs of the services and goods and commodities. Whether it is groceries in the store, whether it is an automobile that is purchased on a lot, these new taxes will be passed on to the consumers.
When 30 per cent of the citizens of this province were not paying any form of health insurance and were receiving those services without any examination of their pocketbook, those very citizens -- predominantly seniors on fixed incomes, low-income groups -- are the very people who will now have to dig deeper into their pockets to find the necessary money to pay at the grocery stores which are going to pay millions of dollars because of their employees.
This government would love to index this tax, but it will do nothing to index the pensions and other services which this government foots the bill for. This is an insidious double tax and I would hope that the member would reflect on those passionate insights, which I am sure he has read from his constituents’ mail.
Mr Daigeler: First of all, I would like to indicate to the member for Burlington South that so far at least I have been in the habit of preparing my own speeches based, I admit, on some notes from people who work for either the ministry or myself, but if he would see my light on in the evening, he would note that I do prepare my own speeches.
With regard to the member for Beaches-Woodbine (Ms Bryden), I must say I am rather surprised to see the strong defence of the business community from the side of the official opposition. I would have thought that they would have been very, very supportive of the idea of eliminating the OHIP premiums and really applaud this initiative rather than ask for a further delay of this very significant undertaking that should benefit especially those people for whom the official opposition always claims a monopoly of interest and representation.
To the member for Burlington South, I would like to indicate that I have had very little representation so far from either business or constituents, other than to say that they appreciate this initiative and that they realize, yes, there is a cost associated with it but that, given the rising health care costs, they do realize that they have to contribute towards the financial expenses that are associated with the quality service that is being provided in this province.
I can say to the member for Burlington South that I think this measure, while it does cost us something, will be fully accepted. It will be welcomed once it is implemented, and I look forward to representing the government on this matter.
Mr Jackson: I wish I had had time to prepare copious notes on this bill. I was just advised four and a half minutes ago that they would like me to come in and speak about it. However, I have been reading my mail and I have been listening to my constituents, and I did undertake, as I see did several members of this House, to conduct a provincial election in my own riding of Burlington South back in 1985 when this whole issue of the status of OHIP premiums and payments was undertaken. I recall at that time I resisted the very sexy and attractive political platform of the Liberal Party that “we are going to eliminate OHIP premiums.”
Mr Curling: Which we have done.
Mr Kerrio: It was a mistake. Look how few there are of you.
Mr Jackson: Are you talking about your cabinet or are you talking about --
Mr Kerrio: Whatever.
Mr Jackson: All right. I guess the point I want to make here is that the genesis of this bill came from a party that was attempting to appeal to the voters without having fully thought through the implications of implementing a revenue measure that will have dramatic and potentially devastating effects on the structure of our business community.
There are a lot of reasons that I find fault with this bill and the approach that the government has taken. There are very few redeeming qualities to this piece of legislation so I will try to be fair and deal with both. But I must admit that my Ben Franklin list is overwhelming in the area of condemnation for a bill and what its intention is.
Let’s look at what our Treasurer did. As I recall, the Treasurer promised that they were going to eliminate OHIP premiums. Did they do that? No.
They said they were going to freeze the payments. This is a popular thing to do because previous treasurers have had to do the politically unfavourable and unpalatable process of raising OHIP premiums. It occurs at the time of a budget. It is immediately met with resistance, and the government has traditionally reacted by removing more and more people from the group which was part of the pool that paid that OHIP premium. As I indicated earlier in my response to the member for Nepean, that had risen today to where almost 30 per cent of the citizens of this province do not pay OHIP premiums.
Although that process may have required improvement, I clearly reject that the government’s solution is the most appropriate one. The Treasurer in a very clever fashion has taken the costs of OHIP and he has indexed them. He has indexed them and hidden them both at the same time by making this move.
Because the government does not have the political will to face the people with the truth about escalating health costs, what is it going to do? It is going to hide it as an employer tax, an employer levy, and hit every person in this province -- the poor, our senior citizens, corporations, small business people. Everybody is going to be hit by this and every year that will increase.
If a labour group goes before the Ontario Labour Relations Board and gets an arbitrated settlement on the basis of appropriate criteria and it gets a seven per cent or an eight per cent increase, well, the Treasurer gets a seven per cent or an eight per cent increase on his tax. It just automatically passes through to the Treasurer. Does anybody see that? Does anybody recognize that? No, they do not.
So I must state for the record how disappointed I am at the government, which will not deal with the upfront costs of health care in this province but continues to hide them.
That thesis has some merit. If members look at what this government has done in the last five years in terms of addressing health care costs, it is a consistent pattern. Health care consumers of this province have the right to know the extent to which they are creating a burden on the taxpayers of this province. Philosophically, members may disagree with me, but I think a citizen has the right to know how much he is using the Ontario drug benefit plan, which is paid for by OHIP. I think a citizen has the right to know how much he is costing the system in order to achieve his level of wellness, and I think it is responsible for a government to turn to those people and say, “We will protect you financially from any adverse harm for the costs of the health care, but we think you should understand what your costs are doing to the taxpayer.”
I recall bills 55 and 56 which radically altered the Ontario drug benefit plan. When we suggested that the citizens of this province be advised of what their costs are, their cumulative costs, associated with the drug benefit plan, that they be informed of that, that it be recorded, the Liberal government said no.
Another example is the approach that this government took to Bill 94 in its negotiations with doctors. We specifically stated, “Why don’t we let the citizens of this province know what we pay our doctors for any medical procedure?” Not this government. “We can’t let them know what that costs.” So do the citizens really understand what the costs of health care mean to them?
Today we are left to understand the meaning of health care costs by virtue of what is not happening in our hospitals, why services were being denied, why medically necessary procedures were denied. Citizens would participate in the debate on access to health care if they knew more clearly what the costs of their health system was and the degree to which they were contributing.
So I say to the Minister of Revenue who is present and who is listening attentively, and I appreciate that, that as a new Minister of Revenue, it is a significant issue for us to address as to whether or not the public understands the implications of the tax they are being called upon to pay.
From that basis I want to address this bill. I can say unequivocally, up front, that I have had a significant amount of mail, more so than on many issues, from my community on this issue. They are very angry and upset. They are angry and upset at the lack of consultation; they are angry and upset at the speed at which this government is moving to implement this legislation; they are angry and upset at what the government denied was a form of double taxation when the citizens of this province, the almost 60 per cent who do pay through their companies and through their -- I am sorry, almost 70 per cent between individuals and company contributions. Those citizens have paid their premiums three months in advance and therefore, in accordance with when the implementation of this bill is to occur, on 1 January, today they should not be paying any additional premiums to OHIP, but this government says, “Not so.”
At first they denied it is a form of double taxation, that we are asking companies to pay their OHIP premiums for the months of January, February, March and April of next year. At the same time, people can open a newspaper and read that they are going to have to come up with two per cent of their entire payroll effective 1 January.
The government, to its credit, has begun to acknowledge the reality of that, and its latest defence is to say, “Well, we can’t afford to be without the cash.” That is not satisfactory. That is not satisfactory to a whole host of Ontario citizens, with the exception of Nepean; I understand that they are unaware they are paying the double tax and therefore have not written the member. But I understand that in many areas of this province, people understand it for what it is. It is a double taxation.
The government has the right, I suppose, to say: “Well, it’s not that painful. We’re only gouging people for two or three or four months.” The government has the right to say it cannot survive without the cash flow. I am not taking that away from it, but when, behind closed doors, the government can come up with these kinds of tax schemes, without consulting with the business community, without, I dare say, consulting with its own caucus about the implementation of such a bill, it is invariably going to run into these unfair and discriminatory reactions to a bill; natural consequences of a bill that is structured in this way.
And so headlines like “Queen’s Park Accused of Double Billing During Transition to Health Tax,” and many other types of headlines, which I obviously do not have in front of me. I should not have lost this one, because it says, “Double Taxation Plan Costly, Tories Warn.” These are just two of dozens of headlines across this province. Does the government say anything about it? “We just need the cash flow.”
I know that the Minister of Revenue does not accept that as an answer when he goes knocking on some business’s door, which cannot make its payroll, which cannot pay its suppliers, but God knows it is going to pay the government and pay the tax man. The government cannot live without the cash flow, but it expects businesses in this province to.
As one of the minister’s earliest and first bills, I would hope he would reflect on the philosophical underpinnings of this tax and I hope it is the last tax of this nature that he has to defend in this House. I doubt he is proud of it but I am not going to ask him that question because I know he is going to respond to my comments in a few moments, anyway.
I am concerned that the Treasurer has developed this form of tax in the manner in which he has. I wish perhaps that, like many members of this House, at some point in his life he had a payroll to meet; if he had the experience of taking an employee into his office and saying: “I’m sorry, but here is the bottom line. I’m going to have to let you go.”
In 1982, when political parties were dreaming up these promises to curry favour with voters, we were sitting in this House comfortable in the knowledge that in majority government we would not face the taxpayers until 1985 but, in reality, out there on the streets, businesses were cutting their overhead just to survive. Any government that thinks for a moment that those days are gone and may never return is playing with the fate of our province and is playing with the lifeblood of our workforce: That is the right to have a job.
When we take a tax like this and we add it as yet one more tax on top of any employer, whether he is in the private sector or the public sector, we have to understand the consequence and the need to say no once in a while.
I, for one, have resisted the notion that health care in this province is free. It is not free, it never will be free and it never can be free. In fact, the costs of health care are probably the greatest single challenge that this province will meet in the next 10 years.
The road to meeting that challenge should not start with hidden taxes. It should not start with conveying a taxation system that lacks, in my view, the honesty as to what it really purports to do. It should not punish those people in society who are contributing and it should not lay out a promise that things in this province are free.
I would ask that the minister reflect on those comments. I, for one, cannot support this bill. My conscience and my constituents prevent me from supporting this bill. I hope this government will soon begin to develop an understanding of the real challenges in health care and not take the easy route out and simply say that the citizens of this province have an infinite capacity to be taxed.
Ms Bryden: I feel that the previous speaker has brought home to us the fact that this is a matter not just of dollars and cents but of people’s attitude towards the guarantee that this province has given in the past, that health care would be available to everybody without restrictions or difference in treatment but as a right. But I think the member has indicated that the route that is being chosen to make this come true is a questionable route.
I would like to ask him if he has specific suggestions as to what route we can take besides voting against the bill, because we really are facing a very important dilemma. We want to remove premiums, but we want to have a fair tax system in this province and to finance as much as possible out of the general revenue fund.
Mr Jackson: Quite frankly, I was hoping the member for Scarborough North would get up and talk about passion again, but he did not.
I am very pleased to respond to my colleague from the New Democratic Party. It is clear, if she was listening to my comments, that the issue of integrity and the way in which the government articulates the role of health care is at issue here.
I cite, for example, the fact that this government, in all of its bravado, undertook a major campaign to discredit the doctors and the medical community in this province over the issue of balance billing. It strikes me that the subsequent negotiations with the Ontario Medical Association betrayed a really cynical approach of this government in terms of bonusing the doctors prior to a provincial election at taxpayers expense: “Let’s buy peace with health care.” So I say to my colleague in the New Democratic Party, to answer her question directly, the fact is that it is that practice that is impeding the proper awareness of our citizens in terms of health care costs.
I might also add, with the time expiring, that this government has to start establishing criteria for health care which are related to our province’s economic strategies. I cite, for example, the need for lithotripsy services. The minister knows he is going to be called upon to come up with some money to provide it. This government is engaged in a political death dance as to where it is going to put the one new machine in this province. I suggest that it should be located in the city of Hamilton, where the workers in the steel industry are excessively exposed to renal stone disease; they should have immediate access to that so they can return and be productive employees and not be sitting in hospitals and backlogging the hospitals of this province. That is the kind of initiative that is required.
Mr Hampton: I am pleased to be able to participate in this debate, because I think that what is involved in this bill and the tax changes it intends to implement are very important issues across the province and very important issues I think that many people at this time do not fully understand and appreciate. However, I think when they do fully understand and fully appreciate them, the government will hear even more opposition and more concern than it is hearing already.
Let me say at the outset that I personally favour the elimination of OHIP premiums, and I know that my colleagues in the official opposition favour the elimination of OHIP premiums. OHIP premiums have traditionally been a form of unfair and regressive taxation. It has been shown, I think, that in many cases the people who were forced, required, to pay their own OHIP premiums were in many eases individuals and families who did not have large disposable incomes.
The government’s response, both this government’s response and the previous government’s response, was always: “Well, there is such a thing as premium assistance and therefore those families and those individuals who are most in need financially would have their OHIP premiums paid for them.” Then the other rationale that was trotted out was that 70 per cent of Ontarians had their OHIP premiums paid by their employer and, therefore, it was only some 20 per cent who had to pay their own premiums.
The fact of the matter is that many of the people who were in that 20 per cent were people we might classify as lower-income working families; in other words, it was a real financial sacrifice for them to pay their OHIP premiums. So I and the other members of my caucus fully support the idea to eliminate OHIP premiums. In fact, it is an idea that we have supported for some time and it is an idea that we think is long overdue.
That is not, however, the issue in this bill. The OHIP premiums could have been eliminated in several ways. There are several different taxation measures which could have been used in effect to eliminate OHIP premiums. The government has chosen a particular way, and therefore the subject of this debate is to comment on the method this government has used and how that method will impact on certain individuals, certain social groups in our society and certain sectors of the economy. As well, the purpose here is to comment on the implementation strategy this government has chosen.
I want to pay particular attention to the implementation strategy, because we all know that what the government is doing is eliminating OHIP premiums, but then it imposes a new and special kind of tax. It is a payroll tax; in other words, those employers will pay this tax in different percentages upon their payroll. If they have a payroll of under $200,000 per year the tax will be, I understand, 0.95 percent. If they have a payroll of greater than $400,000 a year, they will pay a tax of approximately, as I understand it, 1.98 per cent. If they are between $200,000 and $400,000 it is a graduated tax.
The implementation strategy, though, is quite curious, quite curious indeed, and it has confused a lot of people out there. I must say that the answers the Treasurer has given in this House have gone a long way towards contributing to that confusion. Because what is happening out there is that people who have been paying their own OHIP premiums continue to receive OHIP premium notices, OHIP premium notices that say: “You must pay us now for your OHIP. You must pay us now for January, February and March. Please pay the amount listed on this notice for your OHIP coverage.” They receive that. Then they pick up the newspaper and it says, “Beginning January 1990, OHIP premiums are eliminated.” So, being curious folks, they immediately phone their local OHIP office or they call the Treasurer’s office or they call the Ministry of Revenue and they ask: “What is happening here? Do I have to pay this OHIP premium?” They are told: “Yes, you do. You have to pay this OHIP premium.” Then they say: “I thought this tax was coming into place and my employer was going to have to pay a tax beginning in January 1990 in place of OHIP premiums. Isn’t that true?” The answer they receive is, “Yes, that’s true.”
If they are an employer, the answer they get is, “Yes, you will have to pay a payroll tax beginning in January 1990 on the size of your payroll.” So they say: “Why do we have to pay twice for OHIP? Why do I have to pay through the premium method and then have to pay on the payroll tax as well? Isn’t this unfair?” The answer they usually get from the government bureaucrats they talk to is: “That is really not for me to discuss or decide. Why don’t you contact your MPP or the Treasurer or the Minister of Revenue or the Minister of Health and talk to them about it?”
We asked the Treasurer in this Legislature, and first of all we were told by the Treasurer, “There may be some overlap but it will not be very great.” Yet when we check back with our constituents, we find they are still receiving these notices for January, February and March 1990, and they are also being told, “You must pay the payroll tax.” So we asked the Treasurer again and now he says -- he said it yesterday after a lot of prodding -- “Yes, people will have to pay OHIP premiums for January, February and March, and yes, people will have to pay the payroll tax.” There may be some small exceptions on the payroll tax but in general, as of 1 January 1990, employers will have to pay the payroll tax.
Where I come from that is known as double taxation. Where the Treasurer comes from, unless there is some sort of doublespeak here, he says that is not double taxation. The way I have always understood it, if you are paying twice for an article, you are paying double, and if it is a tax and you are paying twice, then you are being doubly taxed.
I see some of the Liberal members shaking their heads. I say again, the Liberal Party must have new meanings for old words if they do not understand the public’s logic on this, because it certainly makes sense to everyone else in the province who is getting two bills for the same service. It amounts to double taxation.
Let me say this: Sometimes in the province, if you go to people and you say, “Look, we are going to hit you with a special assessment this year because we want to accomplish something special; we want to build a special highway or add a special service,” people may willingly say: “Okay, we will bear the extra burden of taxation. We will handle this extra burden of taxation.” I do not know if they would ever agree to be doubly taxed, but fundamentally, if you are going to do that, you at least have to go to the people and tell them what you are doing.
This government seems to insist upon trying to confuse the issue. An observer from outside would be led to conclude that the government wants to publicly deny that there is double taxation, but behind closed doors wants to mail out both bills and collect money at both ends. That is something we object to and I think that is something most people in this province would find objectionable, that kind of behind closed doors operation.
There is another element that is really bother-some here. If you asked the vast majority of people in Ontario whether they support OHIP, whether they support a publicly funded medical care system, the overwhelming answer would be yes. In other words, OHIP enjoys broad and deep support among the citizens of Ontario. Among citizens of Ontario there is a broad and deep support for OHIP.
Now you have a government that intends, on the back of OHIP, to add double taxation. Something that is an unfavourable idea anywhere is suddenly going to be thrown on to the back of something that is a very much favoured and very popular public program. Something that is very good and has wide public support is sullied by an idea that is very bad and, I might say, very stupid.
What is being gained here? The government is going to get approximately $529 million of extra revenue by requiring people to pay their OHIP premiums and collecting the OHIP payroll tax at the same time. The government would say that is good because that will add to the slush fund it can kick around for a while, but the point of the matter is that people who genuinely support OHIP as a publicly funded program find that the integrity of that program is undermined when the program is used as a source of double taxation, and that is very objectionable as well.
If they are is going to do it, they should come clean, state all the reasons they are going to do it and tell people exactly what they are going to do with the money. But for six months now we have had the Treasurer stand up in the House and say, “No, there’s not going to be any double taxation.” Then the question is asked again, “Yes, there’s going to be some overlap but the overlap won’t include all employers.”
Then I asked him yesterday, “Are people going to pay their premiums for January, February and March?” The answer was yes. I asked the other question, “Are some employers also going to be paying the payroll tax for that period?” The answer was yes. I think in anybody’s mind that amounts to double taxation and we have not yet had an adequate explanation why it is going on and what it is intended to do. We have not had that explanation at all.
I can only say to this government that if it thinks it is going to slide this through the door and people are not going to become aware that they are being doubly taxed, then it is right out to lunch. I will quote from yesterday’s Globe and Mail, an article by Margot Gibb-Clark detailing the extent of and the concern over the double taxation. I think the government ought to be aware that this is not going to go by lightly, that people are going to have an opportunity to voice their opinion on it and they are going to form some conclusions about this government and the way it does business because of the manner in which it is trying to do this.
I think it is absolutely despicable to take something that enjoys public support far and wide and then attach to it an element of double taxation, which has the eventual result of destroying some of the integrity of that plan in the public’s eye. I think it is a very despicable thing to do, but I am not surprised, coming from this government.
If you look at some of this government’s other financial decisions in terms of what it has done to boards of education, adding more and more mandatory programs on to boards of education but cutting the funding of boards of education so that the boards have no alternative but to increase the property tax, itself a most regressive and unfair tax; if you look at what this government has done to local municipal councils in the face of inflation, cutting unconditional grants in terms of cutting grants for sewer and water, streets and roads; if you look at that and you look at the increasing costs of those items in terms of the annual inflation rate, you will see that this operation with respect to OHIP premiums and OHIP payroll taxes follows in a line with what the government has been doing over the last two years.
All three things are despicable: passing on greater costs to municipal councils, passing on greater costs to boards of education and now using OHIP as a means to collect extra money above and beyond what the public should be called upon to pay, and trying to do it all through the back door. That is, as I say, quite despicable.
The implementation scheme is one item. Believe me, people across Ontario are going to know about the double dealing the government is trying to accomplish with the implementation scheme, but there are all sorts of other problems with what it is doing. There are all sorts of transfers here that are taking place that the public ought to know about and will know about and they will be judged on them.
It is pretty clear that what is happening here is that in effect, by moving to the payroll tax, the government is making another cash grab. The government is increasing its take by this tax to an amount greater than what OHIP premiums brought in. Who is paying this additional amount? What are the transfers that are taking place?
Large employers will not pay any more than they paid before in terms of contributions to OHIP. They will pay about the same, or in some cases, they will pay less. Who is dumping off some of their share? In other words, who paid into OHIP before and will be paying a little less now? It is pretty clear that the outfit that is going to be paying in a little less, and I would suggest it is going to grow to be a lot less, is this government out of its general revenue fund. They are offloading what they used to pay out of the general revenue fund on to other municipal and public bodies and on to small business.
That is what is happening here. They are offloading what they used to put into OHIP through general revenues on to school boards or on to municipal councils or on to small business. That is what is happening.
If municipal councils and local boards of education across the province were reaping a windfall in terms of tax revenue, the government might have some justification for this, but the fact of the matter is that municipal councils and local boards of education really have only one source of revenue, the property tax. That is their autonomous source of revenue that they have some control over.
Their other source of revenue is grants from the provincial government, but as we already know, it has cut back on those grants. Every election, it keeps saying that it is going to return provincial support for local boards of education back to 60 per cent. In other words, for every dollar that a local board of education has to spend, the government would provide 60 cents of that. The fact of the matter is that it is actually decreasing that. If you look at most boards in this province, you are looking at funding that now is under 40 per cent. Boards in my area calculate it to be around 38 per cent that they are receiving from the province. In other words, the rest has to come from local taxpayers.
What the government is really doing here, when it imposes more of this burden on local boards of education and on municipal councils, is that it is telling them: “Raise the property tax again. If you need to pay this, raise the property tax again.” In other words, it is indirectly telling them: “You have these extra costs to pay. You go out and raise again the most regressive and unfair tax that exists in this province.” That is really what it is saying in an indirect way, but again, we would not be surprised because this government has been doing that over the last four years. It seems to like regressive and unfair taxes.
I can cite other examples: its use of the sales tax and its use of the gasoline tax. Again, where it had progressive tax options open to it, it failed to choose those and it has chosen the most regressive and most unfair ones, and this is just a duplication of that all over again.
They have now shifted some of the financial responsibility from themselves on to local boards of education and local municipal councils that are already hard pressed and they have given them no source of additional revenue to meet these additional costs.
How they can say bravo to that, that this is a wonderful thing is totally beyond me because the local boards of education, municipal councils, universities and colleges have all told them that this is unfair, that it is an unfair burden and that it will be a very difficult burden for them to meet. They have been told that and they are going to hear more of it because it is absolutely true.
Let’s look a little more closely at this because when you look at this tax in terms of its fundamentals, you start to see even more examples of unfairness and regressivity. I could not believe it when I found that if you are self-employed, you are not even touched by this payroll tax. Yet when I sit down and read a basic textbook talking about theories of taxation, what do they talk about in terms of fundamental principles, in terms of equity? That burdens should be shared equitably across the population, that where there are equal benefits there should be equal payments, but that this should be balanced with questions of progressivity. Those are fundamental tax issues. Pick up any textbook on taxation and you will read that in the first chapter.
If we look at those fundamental principles and apply them to this tax, it is pretty clear that whoever brought this tax forward obviously did not read the textbooks or has read the textbooks and said, “We don’t care.”
These are some of the examples. I will pick examples out of my own constituency, real people.
Let’s take a logging company that employs 15 people. They all work hard. Many of them work six and a half or seven days a week. You work six and a half days a week cutting and hauling logs out of the bush to the mill. Your hours may be 11 or 12 hours a day. On the seventh day, you fix equipment. That is called your day of rest. On the seventh day, you fix your equipment so you can go back to work on the Monday to Saturday. You have a logging company with 15 employees. They all earn about $30,000 each in average salary. If you multiply that out, 15 employees at $30,000 each, you come up with $450,000. That company with 15 employees is going to be hit by the 1.95 per cent of the payroll tax. In other words, they are going to pay almost $9,000 in payroll taxes.
Just a little way down the road, you have a self-employed lawyer who runs a small practice. He mainly deals in real estate. That is where he makes his money, dealing with real estate and corporate commercial concerns. He has two secretaries. He pays them about $15,000 each, so his total payroll in terms of his employees is $30,000. He makes a salary. His own income is in the neighbourhood of $90,000 a year, some years $10,000 more, some years $10,000 less. Does he pay any OHIP payroll tax on his own $90,000 salary? None. Zip. He gets a free ride. The only payroll tax he will pay is the 0.95 per cent on his two secretaries, which amounts to a couple of hundred dollars a year. That is his contribution to payroll tax, but in terms of his own $90,000-a-year income, he does not pay a red cent.
You can go down the road to the doctor who runs the clinic. Again, he is classified as self-employed. His income, and I will use Ontario averages, is about $120,000 a year. This gets even more interesting, because you see in his clinic he may have only one nurse-receptionist who he may pay $20,000 a year. What he relies upon to do a lot of his work, what he relies upon to enhance his practice, is a publicly supported hospital. On his $125,000, what does he pay for OHIP? On his $125,000 annual income, what does he pay for OHIP payroll tax? On his own $125,000 net income, he pays nothing, absolutely nothing. On his nurse-receptionist’s $20,000, he pays the 0.95 per cent again. That is his contribution to this payroll tax.
Where do you find the justice in this? How can anyone argue that this is a just tax, a just system? To me, in terms of who is carrying the burden and who is getting free rides, it makes absolutely no sense whatsoever. It makes absolutely no sense. Now you might think if you go out there and you talk to some self-employed individuals who will be receiving a free ride under this payroll tax, that they are cheering, that they think: “Hey, great, wonderful, I am getting a free ride. I get my OHIP paid for and I am getting a free ride.”
I tried that out on a few farmers in my community. They are self-employed; they have their farm; they get their net incomes from the farm. I asked them what they thought of this, if they were happy, if they were pleased about that. I want to tell members what they thought and what they think and what they said to me. They said:
“Listen, OHIP, publicly supported medical care, is something we are all proud of. It is something we all consider to be especially important. It is something that we want to preserve the integrity of and we want everybody across the province to see the integrity of. We don’t feel good about the free ride. We would at least like to contribute something to this. We feel that something that benefits everyone, something that is good for the public in general, if we have an income on this, we should at least be able to support it to some extent. We don’t like this idea of a free ride. We don’t like it and we don’t think it is good for the system and we don’t think it will create public support for the system.”
I am not surprised by that, because I find most farmers believe that everyone should exercise some individual responsibility and that they should contribute in some way. That is the general view in the farm community. So I want to say to this government, it may feel that in some places it is going to win some favours on this or it is going to win a lot of support on this. I am here to tell them that even people who perceive themselves as getting a free ride do not like what they see happening.
If the government is going to charge a payroll tax, they argue and they are convinced that it should also include people who earn their income from self-employment. After all, if you look at the Canada pension plan, there is a self-employment aspect to that. If you look at workers’ compensation, which is another payroll tax, there is a self-employment aspect to that. What is the principle behind saying that people who have self-employment incomes of $90,000 a year, $125,000 a year, are exempt now from paying for OHIP? What is the principle? I am really keen to find out, because from the questions I have asked so far and the answers I have received none of them make any sense.
Let’s just take this a little further afield because there are some other interesting aspects out there in the world of self-employment. Let’s just look at it from the perspective of yuppie Toronto for a while. It is no secret -- it is a secret to this government which does not want to acknowledge it; probably the reason it does not want to acknowledge it is because some of its friends are the people who are getting the most out of the system -- but it is no secret out there in terms of what is happening in the Toronto real estate market.
We have people who buy property one year for $200,000, hold on to it for nine months, a year, a year and a half, and sell it for twice the price. They get a net income on that of perhaps $200,000. In some cases, they really have no great staff working for them. They might have one secretary or two secretaries and they may pay them $30,000 a year. That is their contribution to OHIP, but in terms of their own annual net income from their activity, real estate speculation, they pay nothing. They are self-employed.
Under this wonderful scheme that the Minister of Revenue and the Treasurer have worked out, they simply take their OHIP scot-free, even though, in terms of ability to pay, which should be a fundamental of any tax consideration in our province, in terms of revenues with which to pay, they have much more than that little logging company that has 15 employees and is working very hard and is contributing a great deal to our society. I ask the minister again to explain the rationales for this kind of lopsided situation; explain those rationales.
I want to say something about the small business sector here as well. One of the other fundamental principles of taxation is that you measure the revenue that you receive against the degree to which it may cause dislocations in the economy or it may retard certain productive sectors of the economy. You look at those things.
This is fundamentally a payroll tax. That is all it is. It does not tax profits. It does not tax, as we said, high net incomes. It taxes on the basis of how many employees you have and how much money those employees make. This government acknowledges that the small business sector is the sector of the economy it wants to reward and it wants to help. They say that is the key in the future to providing more jobs.
Well, who does this tax hit most directly and most severely? It hits the small business sector. It hits small businesses, and particularly businesses in the service industry because they are most labour-intensive. Service industries are the industries now who hire the most employees and therefore can be expected to have relatively higher payrolls on which they will have to pay this tax.
Let me give an example. In my community and three or four of the communities in my constituency, we have credit unions. Let’s take for example the Dryden District Credit Union. In order to accomplish what they do, which is offer financial services to the public and offer financial services to the community, they have to have a number of employees. They have credit counsellors, loan counsellors, clerks, accountants, office managers and auditors. They offer a very valuable service to the community.
Even though they are a small organization, because they are in a service industry, their payroll amounts to over $400,000 a year. In other words, using the example I gave, let’s assume their payroll is about $450,000 and they get hit with a $9,000 payroll tax. It is not going to take them long to figure out: “Look, this is an extra cost for us. It hurts our balance sheet. What are we going to do?”
They can always substitute more computers for people. They can always substitute telephone answering machines for a receptionist at the desk. They can always substitute more automatic tellers and bankcard machines for more clerks. That is exactly what they are considering, not because they necessarily want to -- if anything, they want to do it the other way; they want to increase employment -- but they look at the unfairness of this tax, they look at the way it is buttonholed directly at them and they say: “We have to make some substitutions. We have to substitute machines for people if we are going to reduce the burden of this tax.”
The government could not have, in my view, found a better way to cause dislocations in the small business sector of our economy; it could not have picked a better way to do it than it has by this tax. Second, it could not have picked a better way to retard the growth of that sector of the economy; it could not have picked a more effective way, a more harsh way, to retard the growth of that sector of the economy than this kind of tax.
The government will argue with the small business sector: “You know, we had no choice. We really could not do it any other way.” There are all kinds of ways, there are all kinds of tax alternatives that this government could have used, either to not use a payroll tax or to reduce the overall burden of this payroll tax or to reduce the burden of this payroll tax on the specific small business sectors.
Other provinces have payroll taxes like this, no doubt about it, but other provinces have a $200,000, $250,000, $300,000 exemption. In other words, if you are a small business just starting out, you do not get hit with this tax until you get over the $300,000 payroll level. In other words, you can have 10 employees earning $300,000 apiece before you start to be hit by the tax. That was one way to do it, and then increase the tax in some form from there on. The government is going to say, “How could we have gotten that income otherwise then?” There are more progressive ways to get that income.
It is noticeable that this government in the last two budgets has not touched corporate income tax. If there is one thing, one type of tax, that seems to be sacred to this government and that this government does not want to increase, it is the corporate income tax. It is almost as if the government is afraid that if it increases the corporate income tax, all those corporations that contributed money to its election campaign last time will desert it and go back to the Conservatives. That is what it appears to be to the public.
That is the one tax that these people consider sacred, the corporate income tax. That is a tax that could easily withstand an increase at this time. After all, it is an increase on profits; it is an increase on those who can afford to pay it rather than, as this tax is, a tax burden on many businesses that may not be able to repay it and in fact, if the economy is tailing off, as all the indicators now show, very likely will not be able to pay it.
There were other options out there for the government to use. Do not tell us here and do not tell the public, “We had no choice. This was the only way we could do it,” because that is clearly not the case at all.
As I said, the public wants some explanations that it is not getting as to why in the first three months of this payroll tax a large number of people are going to be called upon to pay their OHIP premiums and pay the payroll tax as well. They want an answer to that and they want an answer that makes sense. So far in this Legislature, we have not heard one that makes sense.
Mr Wildman: The answer is that the government just wants the money.
Mr Hampton: I must say I agree fundamentally with the comment that the member for Algoma has just made, that the government wants the money. Whether they can offer a proper rationalization or not is another question and a question that they have not answered.
So we have questions about this peculiar double taxation implementation strategy, a strategy which, I will say again, I think harms the integrity of a program which up until now has enjoyed almost universal support from the public, and I talk about the OHIP program. The public also wants to know why so much of this tax burden has to be shifted on to a sector of the economy which may have the least resources with which to meet the tax burden and which may very well in the end result in substitutions of more machines and less people, bringing in more machines to work in those enterprises and reducing the number of people.
The public wants those answers and the public deserves those answers from this government. As I said, I and my fellow caucus members support the elimination of OHIP premiums. We support the elimination of premiums which were in themselves fundamentally regressive and unfair forms of taxation. But what the government has substituted in terms of this payroll tax is in itself a flawed, unfair and regressive tax and this government could have done much better. could have been more progressive, could have been more fair and could have created a tax which has less drag and less dislocation effects on a very important part of the economy, the small business sector.
We want to hear some explanations from this government and we want to hear some answers. Because, as I said, quite frankly up to now, we have not heard them, and the ones that we have heard just have not met the test when we look at them carefully. I appreciate the opportunity to speak on second reading of this bill and, as I said, we want some answers from the government as to why it has chosen the vehicle it has chosen and why it has chosen the unfair implementation strategy that it is now in the process of putting through.
The Acting Speaker: Any comments or questions on that? There being none, any further debate?
Mr Charlton: Mr Speaker, you were in the chair yesterday afternoon when I began my comments and you will be aware that I made a few comments on this bill. But I want to direct some additional comments as well as to repeat some of the comments from yesterday to the Minister of Revenue and to those other Liberals who are here today because, although I see a couple of the same faces here, essentially we have a different crowd on duty this afternoon. Perhaps preaching in installations is the only way to get through to this government because there very rarely are very many of its members here even when we are dealing with what they are telling us is extremely important government legislation.
I would like to pick up, I think, about where my colleague left off. He made reference in the windup to his comments about this tax, this tax which essentially takes money out of the corporate sector in Ontario versus the corporation income tax in the province of Ontario. This government has told us that through this payroll tax it is going to make companies pay which under the OHIP premium system did not pay premiums on behalf of their employees while other companies were paying premiums on behalf of their employees and that somehow this is going to make up for the stinginess and the wrongs of the past in the corporate sector.
Then you look at the actual makeup of this tax package in Bill 47, the graduated scale to which my colleague referred, and I want to point out to the government members here this afternoon precisely what that sliding scale is, because most of them when they think about a sliding scale, think about a tax that somehow reflects ability to pay. That is what we look for in the sliding scales in our income tax system and that is supposedly what is also there in the corporate income tax system. So we talk about sliding scales and we set out sliding scales and we leave the impression that that is in fact what we are talking about, ability to pay.
As my colleague pointed out earlier, the sliding scales that are set out in this bill are set out based on the gross payroll of a company in a year. That gross payroll includes not only cash salary but benefits and other items that are paid by the company on behalf of employees. It is the gross total figure. But those of us who have dealt with trade unions for many years understand the numbers that get rolled into wage packages. At any rate, we are talking about gross wage packages on an annual basis.
We have a three-level tax here. For employers whose payroll is less than $200,000, we have a tax rate that is the lowest tax rate at 0.98 per cent; between $200,000 and $400,000, we have a sliding scale that goes up from $200,000 to $400,000, and then over $400,000 we have the top tax rate at 1.95 per cent.
Again, if you think about that, Mr Speaker, it seems to fulfil the normal criteria that we think about when we think about sliding scales somehow reflecting ability to pay. But I think if we stop and think in serious terms, all of a sudden it dawns that the gross payroll of a company does not necessarily, in any way, shape or form, reflect that company’s ability to pay. It reflects the amount they are paying in wages and benefits certainly, but some companies have large profit margins, other companies have small profit margins, when in fact they may have precisely the same wage bill. Their margin above that wage bill, the return that is net profit at the end of the year, may be substantially different in two companies with precisely the same wage bill -- two companies whose tax burden under this payroll tax will be precisely the same.
This is a tax whereby a company that may be in a profit position this year and in a loss position next year -- such as some of the steel companies in Hamilton went through during the recession, for example, where they were in loss positions for two or three years in a row -- will have a tax burden imposed based on its payroll, not on its ability to pay that tax; in other words, a tax that in that circumstance will exacerbate the loss the company suffers at any given point in time in an economic downturn.
Further, a marginal company, perhaps because it is in its infancy -- it is only a four- or five-year-old company which has gone into the manufacturing sector, made a major capital investment in that sector and amortized that capital investment over 10 or 12 or 15 years -- may find itself in year 7 in a very marginal position in terms of profit. They are paying off the capital investment, which as we know in the long run is profit, but there is no cash flow there in that kind of context. What are we doing with this kind of tax to that very marginal company?
On the other hand, another company down the road with, as I have suggested, roughly the same size of gross payroll, may be in a very substantial net profit position, but the liability of that company will be no different than the tax liability we have just imposed, on the one hand, on the company in a loss situation, and on the other hand, on the company in the marginal situation.
Mr Speaker, you have been through situations in your own community, especially during the recession periods -- and we will see recessions in this province again, whether it be this year or next year or four years down the road; the economy goes in cycles and we will have another recession -- when companies have to look at laying off employees and decide how much downsizing has to happen in order for them to be able to ride through the difficult period, to find financially the best way for their operations to survive that downturn so that they are in a position to come out the other end with a capability to then take advantage of the recovery as the recovery comes on stream. We have all seen that process a number of times in our lifetime.
But let us impose this tax on that cycle and we have a recession and we are in a downsizing situation where some companies’ first thought in a downsizing situation is just lay off everything insight. That is already true for some companies. We have seen other companies that have tried during recessions to limit the number of people they have had to lay off. They have had job sharing situations in some cases and they have kept on people who were perhaps not necessary during the downsizing period; people they did not want to lose to their operation have been kept on in some cases unnecessarily, except for the desire to have that person still available when the recovery starts because of a specific skill he has or whatever the case happens to be.
What is the incentive in imposing this kind of a tax, a tax directly related not to profit -- because in a downturn profit goes down -- but a tax directly related to gross payroll? The very clear incentive during a downsizing operation is not going to be to look for other things that can be cut in the operation before you start cutting people, because the tax is directly tied to payroll. If you want to get rid of the tax and save dollars for your company, too, you get rid of people, because they are the ones who are being taxed.
Your corporate income tax will go down because your profit margin is going down. You do not have to do any cutting to solve that part of the problem during a recession. But in the case of the imposition of this payroll tax, the very clear incentive will be whenever there is a financial problem in a company and it is looking for fast ways to save dollars, we are giving it a fast way to save dollars and cut people all at the same time. That will be the incentive for even the most responsible corporations, as we have seen some of them be in the past. We are giving them an additional incentive to say: “Hey, reducing our stockpiles used to work, but let’s reduce our employees. It’s a quicker way of saving dollars this time because we not only reduce payroll, we reduce taxes all in one fell swoop.”
The same kind of disincentives hang around the neck of this tax in almost every way we look at it. We have seen technological change having a very serious impact on working life in industrial Ontario over the course of the last 20 years. Again, I will go back to the companies in my own town. Stelco, which 20 years ago employed 15,000 people in the Hamilton area, is now employing half that, about 7,500. They are still meeting the same market -- in fact they are meeting a substantially increased market in terms of overall volume of tonnage of steel they are selling -- but technological change has allowed them to substantially reduce their workforce.
Companies have tended to take on technological change as their capital investment in their old capital works has been paid for. It has outlived its useful life, and in order to take the company on to the next stage of technological development, one has to upgrade the technologies. The old technology is cracking and falling apart and one has to renew.
However, with this tax we are saying not only should technological change occur when investment in old technology has been met, capitalized and profitized as well, but we are saying perhaps we can even give companies an incentive for tech change that they would not otherwise consider: they can reduce other costs because they do not pay a payroll tax in terms of technological investment; they pay a payroll tax in terms of the number of dollars and wages and benefits they are paying to people, not to robots.
We are putting in place a tax that in some respects we could say makes Ontario industry more modern and more competitive more quickly than it would otherwise happen at the same time as we are putting more Ontarians out of work faster than we as a society are capable of dealing with it. I do not think this government has seriously thought of all of the potential ramifications of this tax.
This is a tax that discriminates against employment intensity and it discriminates in favour of capital-intensive operations. It is going to benefit the investment houses where there are large profit margins with small numbers of people employed, and it is going to hurt the company out there that has decided that instead of going to a total computerized operation, it is going to continue to employ craftsmen to build handmade goods for the people of Ontario and the world.
It is the company that has retained the craftsmen that is going to be discriminated against by this tax because that company still has a substantial payroll. The company that has gone totally to CAD-CAM, where everything is computer designed and computer operated and there are only five employees left in the plant, is going to benefit from this kind of tax, because even if their profit margins are identical, even if their net profits are identical, the company that has gone tech is not going to pay the same tax even in the same profit situation as the company that has retained the skilled tradesmen, the company that is still putting out the handcrafted products, products which may not look as high tech, but which are probably, as you well understand, Mr Speaker, a little more solid when you knock on them. They do not break quite as easily when your kid throws them against the wall or whatever the case happens to be.
That is the kind of discrimination we are building into our tax system. It gets even worse than that. We have stood in this House and, on the one hand, admired and patted ourselves on the back for the prosperous society we have in Ontario. On the other hand, we know we have problem employers in this province: employers who exploit women, so that we have had to bring in pay equity legislation, and employers who just generally pay low wages in order to see that their profits are as big as those of somebody else down the road who is much more efficient than they are but who pays decent wages.
I just did some math on an example. I used an example in my comments yesterday, but I have done some math on it so I want to repeat the example so people can understand the way in which this kind of a tax discriminates. You have got two employers, two separate companies. Both of these companies employ the same number of employees and both of these companies had the same net profit last year. One of these companies pays an average wage of $5 an hour. The other of the two companies pays an average wage of$ 13 an hour. As I have said, they both employ the same number of employees and their net profit last year was almost identical so they both had a roughly equal ability to pay this tax in terms of how at least I think about ability to pay, and taxes even in the corporate sector should be levied.
But what happens under this tax regime set out in this bill with these two companies? Well, one of the companies has a payroll in the neighbourhood of $190,000 a year and the other company has a payroll of $494,000 a year. Two companies, as I have said; same number of employees, same profit. So what happens? We have got a wage differential here where one company is paying 2.6 times better wages than the other company. So right off the bat, because the payroll is 2.6 times greater in that second company, the payroll taxes it pays are 2.6 times greater than the exploitative company -- the company that is paying the low wages.
But it is even worse than that because now we have to introduce this sliding scale, the one I was referring to earlier. We normally think that sliding scales reflect ability to pay. Well, the company with the payroll of $494,000 a year pays the tax at the top rate, which is 1.95 per cent; and the company with the same number of employees and the same profit pays the tax at the lower rate of 0.98 per cent. Not only do two companies with precisely the same profit picture have a 2.6-times differential in the tax they pay, we exacerbate it by this sliding scale, so that of the two companies that in fact have an equal ability to pay a tax towards the operation of our health care system, the one that is paying the higher wages is going to pay a tax approximately three times greater than the other company with the same profit picture, but a company that has built its profit picture on the backs of workers by paying an average wage of $5 an hour.
It is three times the tax for the company that has been the good corporate citizen, that has paid the decent wage in the province of Ontario, that has got the good benefit package. It is going to have to pay three times the amount of payroll tax that the exploiter is going to have to pay. He is going to laugh all the way to the bank because he is still maintaining his good profit picture and nobody has really done the job of not only getting at the kind of inequities that this kind of tax allows to continue but at the tax itself which, because of its sliding scale and because it is tied directly to the exploitation that one of those two employers is involved in, exacerbates the exploitation.
That is entirely counter to everything that I can think of that we have talked about in this House in my 13 years here in the Legislature. I am not just talking about New Democrats now. I am talking about the general tax debates that I have listened to in this Legislature over the course of the last 13 years. I cannot recall an occasion when any Tory or any Liberal stood up in this House and said, “I’m for, I’m in favour of that kind of discrimination, that kind of backward disincentive.”
This tax takes us, in my view, not one or two steps back but about 10 steps back, because it sets a new direction and it sets a new mindset in terms of what is appropriate, fair and equitable tax policy in the province of Ontario.
If we allow this kind of new mindset to be easily wedged in place in the overall tax structure of this province, then the next time this government feels uncomfortable about raising personal income taxes because it needs additional dollars, or corporate income taxes -- both of which have their flaws internally in their systems but both of which are among the fairest, most equitable of the taxes that we have in terms of their incidence, where they hit and where they impact -- when the government feels uncomfortable about raising the corporate income tax because it might put the Ontario corporate income tax rate a little bit higher than Quebec’s or Alberta’s, then it is going to play games with the payroll tax to get the dollars it needs out of this regressive and unfair tax -- unfair internally in the corporate sector.
It certainly is not going to hurt to any substantial degree the individuals who are not going to pay the OHIP premiums any more, and we have said from the outset that we support the government’s move to eliminate the OHIP premiums, but to eliminate something regressive and unfair like OHIP premiums and replace it with something regressive and unfair like this payroll tax and the kinds of tax incidence that it has, in my view is not a good, appropriate or fair direction to be taking us down in the future.
We all know what happens to taxes once they are put in place. They never stay at the rate at which they were introduced. I cannot predict whether it will be 1990 or 1991 or 1992 before this tax gets increased, but this very low rate at a range of 0.98 per cent to 1.95 per cent, members can all assure themselves without having to listen to me, will not always be the rate at which this tax is applied. It is the start rate, and all of the things that I have talked about and all of the things that were talked about by my colleagues -- and I think members will hear some further comments from others in this debate about other unfairnesses, inequities, anomalies that this tax will cause to have happen out there -- all of those will be exacerbated every time that there is a tax increase, or every time that an employer considers increasing his payroll by hiring new people, or conversely, as an employer tries to look at ways to make his operation leaner.
The kinds of problems that I have set out and the kinds of problems that my colleagues have set out, each and every one of them will be exacerbated by the very basic day-to-day economic decisions that companies have to make. This tax does not deal with that, and it would appear that this government is not ready to deal with that either. It has talked about the good years that we have been through for the last several, and it specifically tries to point to the years since it became the government.
To my friends across the way, I will end my comments by saying I believe that each and every one of them will live to regret the day they imposed this tax and that, as we move into the next recession, because that will inevitably come -- as I said, I am not an economist or a soothsayer; I do not know if it will happen later this year or next spring or a year and a half from now or three years from now, but we will surely have that recession as we always do eventually -- I ask each and every one of them to watch what this tax does, watch how employers use this tax in their adjustment process as they have to find ways to downsize during that recession and watch the very negative impact it has in an overall way on the total employment displacement in the province of Ontario as we go through our next negative cycle in the economy.
Mr Pope: I have been told by my friends in Timmins and Iroquois Falls who watched my effort last week on the occupational health and safety bill that I talked for too long. I talked on that occasion for an hour and a half and I thought today I would keep my comments to 43 minutes. I think the message is in there.
I would like to start by thanking Mac Penney of our research office for the excellent work he has done on Bill 47, not only after introduction but also in analysing the debate that has taken place to date. Certainly, his analyses and guidance has been well appreciated by the members of our caucus. As always, he has produced very good work for us.
Secondly, I want to indicate to you, Mr Speaker, that, because this is a debate on second reading, I would like to spend a few minutes talking about general tax philosophy of this government as it reflects itself in this piece of legislation and then go on to make some specific comments about the detail of the provisions of Bill 47 and how we think they will impact on the daily lives of the people of the province of Ontario and businessmen of the province of Ontario.
First of all, I think it is becoming of increasing concern. Whether you are in Niagara Falls at the Sheraton Hotel in the coffee shop, or whether you are in the Esquire Restaurant on Cedar St in Timmins, or in the Prince of Wales Hotel in Niagara-on-the-Lake enjoying coffee in the morning with your friends, or whether you are in many of the great communities in Essex South, people are increasingly voicing their frustration and concern with economic policies of government.
It was not without some degree of credibility that Statistics Canada indicated during the summer months that one of the major contributing sources of inflation across this country, and in particular in the province of Ontario, was in fact the increase in government taxation. That statistic has already been reflected in many comments that I hear from businessmen and individuals in my own riding and across this province.
We have seen this administration, for reasons that they alone are accountable for of course, come in with two successive overall tax increase packages in two successive budgets of $1.3 billion in each year. That has an inflationary effect on life in Ontario that we all, as residents of this great province, face in our day-to-day lives.
Those tax increases are either paid directly by us or they are passed on to us through price increases or through wage settlements or reduced wage settlements when we take benefits packages as well.
This tax bill, which is not a policy that is directly the responsibility of the Minister of Revenue; I acknowledge that -- but the opportunity for second reading on this tax bill is to make comment on this kind of thinking or mentality that has pervaded this current administration in Ontario and, second, to put it into the context of other tax measures that all of us are becoming increasingly worried about.
[Remarks in French]
We have heard from time to time that we are overtaxed. When we see tax freedom day moving ever so slowly further and further into July, when people have to work underground in the mines, in the stores, on the farms, in the lumber mills and the factories until the first weekend of July, into the seventh, eighth and ninth of July, just to pay taxes that are being imposed by different levels of government, surely it is time to have a pause in this grinding away at people’s ability to live in this province.
A lot of people in government think it is a big joke and that it is all political nonsense being spoken. It is not a joke. When you see workers in Florida and the southwestern United States with 17 per cent deductions on their paycheques, as I have seen, and we have deductions of 35 per cent, 40 per cent or 45 per cent, it is no longer a laughing matter. It affects the ability of our fellow citizens in this province and in this country to survive in a fashion that they have a right to expect.
Do not tell me that we can replace that with a broad safety net of social programs. Tell that to the people of northern Ontario, that their government is providing them with an adequate transportation system, for instance, at government subsidies, at public subsidies that they can take advantage of. Tell them that, when you can fly to Toronto for $383 on Air Canada or Air Ontario and you can fly from Toronto to Miami, Florida, for $160. Tell them that, when they are pulling the train service, both federally and provincially, out of every major community in northern Ontario, let alone the small isolated ones. Tell them that, when they have not seen four-laning on Highway 11 or passing lanes on Highway 11 for three and four years.
Tell them that, when they see the promise of new hospitals in northern Ontario unfulfilled and yet they cannot get into hospitals down in southern Ontario because the waiting lists are getting longer and longer and longer. Tell them about the subsidized health care system that this employer health tax is going to help support. Tell them about that, when they are in Rainy River and they have to travel to Thunder Bay for an appendectomy for their son or daughter. Tell them about it when they have to wait longer and longer and longer for heart surgery for their mother or father, and in desperation go and pay the full tab in Cleveland or Alabama or New York state. Tell them about that, when they have been told about the publicly funded health transportation system using dedicated aircraft or commercial aircraft at public expense, and then they find when they get here that they cannot get into a hospital for essential, urgent treatment.
All of these issues that relate to the functioning of our health care system, our OHIP system, the basics, are deteriorating while this government is grabbing more disposable income from the residents of this province. And surely no one can deny the deterioration of the health care system under this regime -- no one can deny it -- a system that was examined and lauded by the entire western world just a few short years ago, where we brought people into this province to get medical treatment because we had a world-class health care system with world-class specialty teams, and now they have to go to other jurisdictions to get even essential medical treatments on an urgent basis. And we are supposed to pay an employer health tax in this province to fund that kind of performance? Give me a break.
Mr Adams: I will give you a break any time.
Mr Pope: There has not been, I say to the member from Peterborough (Mr Adams), the kind of crisis in the health care system in this province in the last 40 years, and this government wants more money to continue that kind of performance? Not on your life. We do not support this tax measure, we do not support the abilities of this cabinet and this government and this Minister of Health to run the health care system in an efficient, humane manner whatsoever.
The evidence is all around us. The deterioration is all around us. The declining quality of health care is all around us, and everyone recognizes it. It is a source of worry and concern when we are told that hospitals are not going to be built, even though they were committed in different parts of this province, because we are going to community-based care. Big deal if you cannot get the basic essentials on an emergency and urgent basis to be made available to you no matter where you live in Ontario.
So we do not intend to support this kind of funding to pay for that kind of system. No one does, because we are not satisfied with the performance of the Minister of Health or with our health care system.
From a revenue and tax-policy point of view, we disagree with the direction of this government, and we think there is ample evidence from within this government to support our position. We have had too many tax increases, between 26 and 29 in total in the last three years, depending on how you count them; between 26 and 29 tax increases. We have seen increases in personal tax rates. We have seen increases in gasoline tax. We have seen an increase in the retail sales tax. We have seen an increase in the land transfer tax. We have seen surtaxes. We have seen a tire tax. We have seen all of these taxes that the average taxpayer, the average working man and woman in this province is having to pay every day. When they buy a new tire, they pay that tax. When they go to buy gasoline at the local gas station, they pay that tax. When they have their payroll deductions increased, with less take-home pay, they are paying that increase in personal income tax. When they go to the store and buy items for their personal use, they pay that additional retail sales tax. And here it comes, again and again and again.
Mr Curling: Here comes the GST.
Mr Pope: I say to the member, the former cabinet minister who has made that comment, the only difference between the goods and services tax at the federal level and this provincial level is that the Liberals have not figured out how to do a GST as well as the federal guys have, and they have chipped away at 26 different tax increases in the last three years, $1.3 billion in additional taxation that the residents of this province are paying for two successive years, and they sit there so smug in their seats and pretend that it is not going to affect anyone in this province.
Well, it has. It has discouraged incentive, it has discouraged people in their daily lives, it has made it more difficult for people to survive and live in this province, and the responsibility rests clearly with this government, which spends more time manoeuvring on the federal level for political reasons and less time explaining its own economic policies and tax policies to the people of Ontario, and we deserve those explanations.
We deserve those explanations as to what in goodness is going on in tax policies in this country and in this province. We do not need the manoeuvrings and the shy, reticent Treasurer of Ontario refusing to directly comment on GST and its impact on the province, and more specifically what he sees as the essential ingredients of tax reform on a national basis. He will not declare himself on that. He will not add to a national economic and tax plan, but he will sit back and snipe on the sidelines. We have had too much sniping at both levels of government. In the meantime, it is the taxpayers who are paying the bill for all this manoeuvring and nonsense.
There is no doubt, whichever way you cut it, that it is the working men and women in the mines, in the lumber mills, in the factories and in business who are paying the shot. Those who have the means to hire lawyers and accountants to do tax planning always will be able to do that. It is those average wage earners who always pay the bulk of these tax measures, and they are paying more and more and more. When we pass 1 July for tax freedom day, the government is saying to the public of this province, “When you work full time, when you work hard, when you and your wife both commit yourselves to going out to work so that you can make ends meet, thank you very much, because you are doing more work for the governments of this country than you are doing for yourselves.”
What about this great community? We now have a commercial concentration levy. This community has seen major increases in housing costs, major increases in rentals, staggering increases in food prices, and on top of all these additional tax burdens that are being placed on them by this Liberal administration in Ontario, it is going to throw a commercial concentration levy, which people are going to pay in further increases in retail prices, make no mistake about it. Economic life is difficult enough in the great city of Toronto and in the major centres of this province, and this government is committed to making it even tougher.
We oppose their basic policies; 7,000 additional civil servants over the past three years; $1.3 billion in tax increases for two successive years. That is not the way to go in running an efficient government to benefit the people of the province of Ontario.
We understand the background to the employer health tax. It was a 1985 promise in an election campaign which this government has taken over four years to implement. We understand that.
We understand that the background of OHIP premiums was a freezing of the premiums from 1985 to the current 1989 budget. We understand that the cabinet of this government has made a conscious policy decision in spite of the objections, I suspect, of the Minister of Industry, Trade and Technology (Mr Kwinter) to impose a payroll tax in this province with respect to health care.
We understand the background from small business organizations and advocates within and outside the government, how they warned this government about the negative consequences of a payroll tax, particularly on small business. We have seen the small business reports from the Ministry of Industry, Trade and Technology since 1986 deal with this matter, tell this government and those who are listening that it will have a negative impact, and we have seen this government ignore those recommendations in that report and proceed nevertheless with a payroll tax system.
So that the public understands, we believe payroll taxes are broadly defined as amounts collected by governments from business on the basis of the amounts of wages and/or other forms of remuneration that businesses pay to employees. Whether it is your standard wage, whether it is a bonus, whether it is deemed to be a benefit under whatever regulations may be implemented or introduced to implement this legislation or tax policy generally, all of these matters will be subject to this payroll tax. It will affect, for instance, a miner. It will affect bonus provisions that the mine will negotiate with the miners. It will affect commissions businesses will pay.
As something that has undoubtedly been dealt with in cabinet and by the Liberal caucus when it considered this bill, imagine a lawyer who is self-employed, an accountant who is self-employed or a doctor or dentist who is self-employed. He will have no obligation to pay for health care in this province other than through his general personal income tax, and if he is incorporated, through his corporate tax. He will have no obligation to pay through the payroll tax system because he is self-employed, because he is not on a payroll. What a disincentive to employment in this province.
That is precisely why the Ministry of Industry, Trade and Technology, in its small business branch, warned against this kind of tax measure. What a disincentive. Those who are not on payrolls, regardless of how much they make, professional people who do not place themselves on payrolls, will not make a payroll tax contribution to health care in this province. But those who commit themselves to the economic livelihood of this province by employing people will pay the shot. How is that for equity and fairness? What message does that send out to people who are looking at expanding their businesses in this province, who are quite legitimately looking at their options?
If members think that is not a concern, I want to go back to what the Treasurer of this province was reported as saying on 6 October of this year. I think it was at a meeting or a luncheon of the Canadian Manufacturers’ Association. He was urged to respond to the growing unease about the competitive position of Ontario vis-à-vis investment, economic development and expansion and employment as opposed to other jurisdictions. The response of the Treasurer was that it was a legitimate concern, but he thought Ontario was competitive.
What was the first thing he went to to try and make an argument that Ontario was competitive? The first thing he went to was the tax rates, clearly a link between competitiveness and overall tax policy even in the Treasurer’s own mind. Here, he quoted corporate tax rates between Ontario and three selected jurisdictions to try to make his case, although he admitted that business had a right to be concerned. If business has a right to be concerned, employees have a right to be concerned because it is their economic livelihood, their economic future and the future of their children and their families that are equally at risk.
If there is no concern about tax policy and its impact on economic competitiveness, certainly the Treasurer did not make that case. Certainly in his own mind he linked the two, and certainly in the Saskatchewan budget of 1989 and the Quebec budget of 1989, tax policies compared to those of Ontario were front and centre in the budget documents to try to encourage investment dollars into those provinces, as opposed to Ontario, I presume.
That is why Ontario was singled out; trying to encourage economic expansion in those provinces, I presume, as opposed to Ontario, trying to encourage more employment in those provinces as opposed to Ontario. They are making a case in those jurisdictions about the slipping competitive position of Ontario in a national framework. Certainly, the walking feet across the border of the United States and Canada speak volumes to tax and economic competitiveness as well.
We have heard the stories of the people working in Windsor and living in Michigan and why they are doing it. I suspect there is probably a similar concern shared by the good people of Sault Ste Marie as to what it all means when these stories come out in the newspapers. Whether they are true or not, it has to be a source of anxiety and concern to border communities.
We have to address this issue, put the numbers up front and make the case for Ontario in a way that I do not believe it has been made in the last couple of years, that we have a great workforce of very competent and dedicated workers, that we have the right economic climate and that this is the place to locate even in a North American context, that we have the resources, the communication systems and the social services to attract investment, corporate enterprise and employment into this province.
These kinds of measures, I believe, and this kind of coherent policy over three years now, send the wrong messages out to those who are looking for places to invest money and to locate and expand.
Source deductions, of course, are already made from the payrolls of working people in this province regardless of the profitability of the firms involved. It is not like an income tax. It is not like a corporate income tax. Regardless of how profitable the operation is, there will be a tax on the total wages paid to working people who work for that company, for that business. Even if they are losing money, those businesses will be paying payroll taxes based on the size of the payroll.
There are those who say you can plan around it by your preparation of income tax statements and your deduction of losses. Yes, you can plan around it. You can play with depreciation. You can do all sorts of things to affect the tax consequences of payment of income tax and corporate taxes to the federal and provincial governments, but the fact of the matter is that this is an additional tax on wages paid. It is a payment regardless of profitability. It constitutes in my mind a source deduction no different than unemployment insurance, no different than Canada pension plan premiums or contributions, no different than workers’ compensation. It is just another addition to this list.
Mr Fleet: For the benefit of the workers.
Mr Pope: The member for High Park-Swansea, Lord Fleet of Swansea as I used to say in the last session, repeats the same argument that the government makes every time it imposes a tax, that it is for the benefit of the workers. We now have someone who says that when you pay out 53 per cent of your wages in taxes every year, it is all for your benefit and you should not worry about it. Using that logic, pay the whole works over to the government and you will be even better off. What kind of Liberal logic is that to throw at the people of Ontario? Pay it all over. Just work for the government and you will be even better off.
Is that not the logical conclusion to what he is saying now? The logical conclusion is to just give it all. The next thing he will be arguing for is a national wealth tax. He will be arguing that pretty soon, where you will pay a percentage of your total net worth every year. They are probably already talking about it in this cabinet. I would not be surprised at all.
Mr Epp: Shh, it’s a secret.
Mr Pope: It’s a secret. I guess I let that secret out; sorry about that.
Just to put on the record our understanding of the key features -- the minister may want to respond to this at the appropriate time -- the tax will be levied on all employers having permanent establishments in the province including all governments, charities, nonprofit organizations and provincial government transfer payments recipients such as hospitals, universities, colleges, municipalities and school boards.
The Ministry of Revenue has advised us that it is not something that is subject to a checkoff. It is not a checkoff item. The tax is based on total remuneration paid to all employees who work at or who are paid through an Ontario place of business.
Remuneration under Bill 47 is defined to include all amounts required to be included in the employee’s income from employment for income tax purposes including taxable benefits, including such things as bonuses, taxable allowances and commissions. I understand that the government is proposing to amend the bill to permit the Lieutenant Governor in Council the authority to prescribe by regulation any type of amount or benefit that will not be included in remuneration for the purposes of determining the amount of the tax to be paid by the employer.
I understand the Lieutenant Governor in Council, ie, the provincial cabinet, may be looking at regulations that will address the issue as to what benefits will be included in calculation of the payroll base for the payment of this payroll tax. We will be eager and pleased to learn from the minister the policies and principles that those regulations will contain.
The tax will be levied as a percentage of total remuneration according to a schedule of graduated taxes linked to the total remuneration paid by the employer, and of course the bill in section 2 sets out that schedule. It is 0.98 per cent for employers “where the total Ontario remuneration paid by the employer during the year does not exceed $200,000” and a rate of 1.95 per cent for employers “where the total Ontario remuneration paid by the employer during the year exceeds $400,000,” and there is a graduated scale, of course.
The rate is not capped, nor is there any ceiling on the dollar amount of payroll on which tax will apply, so it is a straight rate of 1.95 per cent on all total Ontario remuneration paid during the year over $400,000 regardless of how many millions of dollars it may be.
The employers who are taxed at the top rate must pay monthly instalments calculated on the remuneration paid in the previous month. Just to put into some context the $200,000 minimum rate of 0.98 per cent, that would be the equivalent of a mine operating with four miners. So we are talking about most of the businesses in Ontario other than family businesses or businesses with one or two employees as paying in excess of the minimum rate of 0.98 per cent.
Monthly payments: The paperwork that entails is clear. All employers who are already frustrated with the reporting requirements from various levels of government right now are going to have another one thrown at them.
We understand that there was problem with respect to 1 December 1989, but the minister in his opening statement, I believe two days ago, indicated there would be some amendments to take care of the December problem. We trust the minister will be tabling those amendments and in fact doing that. The liability to pay this payroll tax starts on 1 January, and the first instalment is due in April of next year.
There has to be an annual return, the reporting requirements plus an annual return at the end of the year, with any balance of the tax payable to the Ministry of Revenue. I presume that will be through local offices, regional offices if required, and as has clearly been admitted by both Treasury and the Ministry of Revenue personnel who met with our caucus researchers, self-employed persons are exempt from the tax.
There will be administrative provisions announced fairly soon by the Ministry of Revenue. We believe that this payroll tax will be not simply a replacement of OHIP premiums but in fact a major new revenue source for the government of Ontario. Just as we heard that GST was a replacement of manufacturers’ tax and found out there was a significant tax increase rolled into it, we also see that the payroll tax is not just a replacement for OHIP premiums, but in fact there will be a significant tax increase rolled into it and no guarantee that the payroll tax rate will not be increased in subsequent years by a deliberate budgetary policy of the Treasurer of the province of Ontario.
If the tax at its proposed rates was in place for all the current fiscal year, we believe it would be the fourth biggest tax revenue generator of the province, ranking only behind the personal income tax, the retail sales tax and the corporate income tax as a money-maker. So not only do we believe it is not simply a replacement for OHIP premiums and there is an additional revenue source rolled in, but we think in raw dollar terms what has been announced here is the fourth biggest tax, fourth biggest source of revenue, for the government of the province of Ontario.
The size of the yield to the government has sparked, the tax dollars generated for the government coffers has generated a lot of concern that it will in future be looked upon as a revenue item to be used by the Treasurer at his whim and will in announcing future revenue and tax sources to meet the needs of the provincial government.
In the current fiscal year, the tax will add a projected $489 million to provincial revenues. Now we think that those numbers are out of date based on the minister’s announcement of the 23rd about how December would be treated, so there may be some adjustment in that, but there will be sizeable revenue. In the current fiscal year, revenues from the employer health tax and OHIP premiums are projected at $1.79 billion, representing 12.87 per cent of the total budget of the Ministry of Health. That includes operating and capital. In the full fiscal year, this tax will raise an estimated $2,114,000,000, $271 million more than would have been raised by OHIP premiums.
That is why we say it is not simply a replacement tax, it has become, from its very inception, an additional source of revenue for the government of Ontario. At $2,114,000,000, as the proceeds from the employer health tax, this would cover 15.2 per cent of this year’s Ministry of Health budget, both operating and capital. That is an increase from 12.87 per cent. That is why we say it is additional revenue. We want to give members the equivalent so they can analyse our numbers.
The estimated full-year yield by tax bracket for the 0.98 minimum rate is $174 million. For the graduated rates that is below the maximum $105 million and at the maximum 1.95 per cent rate would generate just over $2 billion, in fact $2,009,000,000. The tax policy branch of the Ontario Treasury was kind enough to give us those estimates that we are relying upon. It is interesting to note that the employer health tax will also impact on federal revenues in that the federal government will also have to pay the tax on its Ontario payroll. The direct payroll tax cost to the federal government has been estimated at between $92 million to $100 million on an annual basis, given current salary levels.
That means that this -- and it will be interesting to hear the Treasurer and the Minister of Revenue about the negotiations that went on in this -- is a unilateral measure by the province of Ontario which will generate more revenue from the federal government. Whether that makes up for some complaint about transfer payments from the federal government to the province, I do not know. It could be and if that kind of financial or fiscal war is going on between the province and the federal government, I think we have a right to know about it since it is our tax dollars we are arguing about, whether they be federal or provincial, and I hope the Treasurer or the Minister of Revenue will deal that issue.
In addition, the federal government, we understand, will incur other costs as a result of the switch from OHIP premiums which were a taxable benefit for federal tax purposes to the employer health tax which will be tax deductible. Estimates indicate that the federal government could lose $320 million annually in corporate taxes and just under $300 million in income taxes as a result of the move to the employer health tax.
Again, since it is our tax dollars that are being dealt with in this conflict between the federal and provincial governments, whether it be friendly or otherwise, I think we have a right to know what is going on behind the scenes, where it all washes out, what the net effect is on the federal government’s fiscal position and on the provincial government’s fiscal position and the net effect of all of these things on the net transfer payments to the province from the federal government as a result of these measures.
Are we going to continue --
Mr Fleet: Why don’t you ask Mulroney for the answer?
Mr Pope: Now the member for High Park-Swansea says that his government does not have the obligation to answer any of these questions. I happen to think they do and if they do not want to, maybe we will just find a government that does want to answer these questions, since it is the residents of Ontario who have to pay these taxes. I am glad the member for High Park-Swansea keeps on rolling these Liberal government attitudes out for everyone in this province to understand and respond to.
Mr Fleet: I’m the only one listening.
The Speaker: Order.
Mr Pope: I am sorry, Mr Speaker. It is interesting that some members of this Legislature who are so concerned about small business lost the battle over the implementation of payroll tax when it came to this particular piece of legislation. I think it is rather interesting --
Mr Mahoney: At least I don’t go home to my riding all the time.
Mr Pope: Well, the member should spend more time in his riding. He may understand what is going on out there. He may understand the impact of this government’s tax policy if he spends some time in his riding. It might be an interesting sidelight for him from his work down here.
There is no doubt that the introduction of this payroll tax will require the development of a new assessment base by the Ministry of Revenue. The ministry, we know, is trying to work very hard at this. It has sent out over 450,000 questionnaires to employers across the province of Ontario to establish the assessment base, applicable rates and payment schedules.
I am just saying that there is a substantial cost to the implementation of these tax proposals, a significant new cost. How it will be reflected in ongoing costs in the Ministry of Revenue is something that we will want the minister to address, and no doubt he has those answers in his reply.
The officials in the Ministry of Revenue were good enough to give us some estimate that about $50 million would be the cost to develop and implement the new tax and that 200 new employees would be required by the Ministry of Revenue to operate this employer health tax system.
At the end of the first quarter of the current fiscal year, about $3 million will be spent on computers for the new system. We talk about 200 new employees. We talk about the $50 million in implementing this tax program and $3 million in computers. These are just some of the costs that the Ministry of Revenue officials and the Treasury officials have been good enough to give us, some of the costs that the taxpayers of this province are paying so that they can be taxed more.
The Speaker: Does the member have much more to refer to?
On motion by Mr Pope, the debate was adjourned.
The House adjourned at 1800.