36th Parliament, 2nd Session

L054b - Tue 3 Nov 1998 / Mar 3 Nov 1998 1

ORDERS OF THE DAY

FUEL AND GASOLINE TAX AMENDMENT ACT, 1998 / LOI DE 1998 MODIFIANT LA LOI DE LA TAXE SUR LES CARBURANTS ET LA / LOI DE LA TAXE SUR L'ESSENCE


The House met at 1832.

ORDERS OF THE DAY

FUEL AND GASOLINE TAX AMENDMENT ACT, 1998 / LOI DE 1998 MODIFIANT LA LOI DE LA TAXE SUR LES CARBURANTS ET LA / LOI DE LA TAXE SUR L'ESSENCE

Mr Grimmett, on behalf of Mr Hodgson, moved second reading of the following bill:

Bill 74, An Act to amend the Fuel Tax Act and the Gasoline Tax Act / Projet de loi 74, Loi modifiant la Loi de la taxe sur les carburants et la Loi de la taxe sur l'essence.

Mr Tony Martin (Sault Ste Marie): Madam Speaker, on a point of order: It would be a shame to start without a quorum.

The Acting Speaker (Mrs Marion Boyd): Clerk, would you check for a quorum.

Clerk Assistant (Ms Deborah Deller): A quorum is not present, Speaker.

The Acting Speaker ordered the bells rung.

Clerk Assistant: A quorum is now present, Speaker.

The Acting Speaker: The member for Muskoka-Georgian Bay.

Mr Bill Grimmett (Muskoka-Georgian Bay): Before I commence my remarks, I should indicate that I will be sharing my time with the member for Simcoe Centre and the member for Northumberland, who are both experts in the field of fuel tax.

Bill 74 is An Act to amend the Fuel Tax Act and the Gasoline Tax Act. Those people who have followed the budget process closely will know that Bill 74 delivers on our government's commitments made in the 1997 budget and in the 1998 budget. The commitments made in those budgets are worth looking back on. In my research in preparation for speaking tonight, I went back and looked through those budgets to see the references that were made and that now are coming to light in Bill 74.

Back in the 1997 Ontario budget there was reference on page 136, for those people following at home, to the province taking a look "at ways to improve the timeliness of its cash flows, including tax remittances and flows to transfer payment partners." The reason for that was that in a continuing effort to reduce our deficit situation we wanted to find efficiencies that would "ease cash balance requirements." "Liquid reserve levels" could be a lowered as a result of these improvements to cash flow and of course that would lead to "lower public debt interest charges."

Much of the effort made in drafting Bill 74 is aimed at improving the cash flow consequences that come from the fuel taxes that are imposed by the provincial government. As you will note from my comments later, many of the changes we're making are made after consultation with the fuel industry in Ontario and many of the changes that we're bringing in are bringing the Ontario tax collection system in the fuel industry in line with the practice at the federal government level as well. Bill 74, as I said, delivers on a commitment made in the 1997 budget to deal with that.

Then in the 1998 budget it is again referred to in the budget papers, and I'm referring to budget paper C on page 99. On that page it was indicated in the Ontario that we would be taking steps to minimize "red tape for fuel exporters by amending the Fuel Tax Act and the Gasoline Tax Act to remove provisions requiring exporters to give advance notice of their intent to remove motive fuels in bulk from Ontario;" and also amend "the Gasoline Tax Act to implement the 1997 budget initiative to optimize cash flows by bringing tax remittance dates in line with those of the federal Excise Tax Act. Ontario will work with the petroleum industry to implement these changes."

Following the 1998 Ontario budget in May, our government followed up on that commitment, met with the fuel industry people and, following those meetings, we were able to put in place some draft legislation, which is in Bill 74 and which we are debating this evening.

In addition to dealing with the red tape issue, I thought I would deal with the sections of Bill 74 that deal with motive fuels. Most people know that the volume of many liquids generally expands as temperatures rise and it contracts as temperatures fall. The difference in volume is especially noticeable in gasoline and diesel fuels.

Ontario gasoline and fuel sales and taxes are based on volume and the industry measures fuel in two different ways. One way is known as ambient temperature volume. It measures the volume based on the actual weather temperature. The second way corrects for seasonal fluctuations. To accommodate this, the industry has developed a temperature-adjusted volume measurement standard of 15 degrees Celsius. This has become an international standard. In most cases, the same method of measuring the volume of motive fuel sold is used for both tax and sales purposes. Problems arise when the volume of product sold differs from the volume of product on which the tax is charged.

The real issue we're getting at in this bill is consistency and making sure the industry deals with a level playing field when they collect the tax on fuels they're selling. Bill 74 suggests that, in responding to the industry's concerns, they want to have the same system when they calculate how to assess the tax on the fuel being sold. Bill 74 provides a fairer way to calculate the tax. The industry has asked for legislation to ensure that all members of the industry follow the same rules, so we have done that and we now have one rule that applies at the federal level and at the provincial level.

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Another matter that Bill 74 deals with is the issue of special fuel products. I'm sure you're aware that new technology has produced alternate fuels and we continue to look for alternate fuels. Many governments have tried to encourage industry to find alternate ways of providing energy, and Bill 74, in my opinion, will strengthen this. It will encourage the industry to continue to look for and implement the use of alternate fuels.

Several Ontario firms now collect waste oil and refine it into diesel and heating fuel. They market these fuels for bulk distribution to transport companies. That's used for motor vehicles and also by industrial users who have furnaces for heating or manufacturing. As you know, there is continuing research into developing canola and peanut oils into fuels for powering internal combustion engines.

Currently the Fuel Tax Act, which would be amended by Bill 74 if it is passed, defines fuel as "any gas or liquid that may be used for the purpose of generating power by internal combustion," but the current act does not envision producing fuel from anything other than traditional crude oil. As these new threshold businesses develop out there that don't have wholesale customers or terminal sites, they don't meet the act's current rules for collecting and remitting tax and for dyeing fuel that they sell for non-taxable use. Bill 74 responds to industry concerns in that regard and it removes operation barriers for the business to make it easier for those fuels to enter the marketplace.

At the outset, I talked about the concern of cash flow that was mentioned in both the 1997 and 1998 Ontario budgets and I thought I'd make a few remarks about what in Bill 74 would improve the cash-flow situation of the Ontario government.

At present, the province has an imbalance in its cash flows with respect to fuel tax. We pay disbursements during the first half of the month and we receive revenues during the second half of the month. What we try to do to improve our cash flow is bring our revenue times closer to our disbursement times.

The bill deals with the issue of cash flow in several different parts and it requires that the larger operators in the fuel industry submit their tax revenues at an earlier time in the process. Thus, the province will collect that money at an earlier time and not have to borrow monies as it would have had to do with the later dates that are currently in both the Fuel Tax Act and the Gasoline Tax Act.

With respect to the cash flows, it's expected that this will save as much as $4 million on an annual basis and thus put the province in a position of not having to borrow those monies. That is again an issue that was raised in the 1997 budget when the finance minister indicated that efforts would be made to improve the cash flows. Similar steps were taken in previous bills that dealt with other tax collection statutes under the provincial government, but the issue of collecting fuel taxes has been dealt with separately and we're now dealing with it in Bill 74.

Now what we'd like to do is perhaps deal also with some of the other issues that are contained in Bill 74. The special fuel products issue is one that I'm sure many people have an interest in. The types of fuels that section is dealing with have to do with the fuels that are produced by the industry and attempts by them to find alternate fuels. The sections that deal with that are there to help those distributors who are currently distributing special products and also to help them with the collection of taxes.

I thought I would also in my comments this evening speak to the issues that were raised by the industry in their discussions with the ministry. The ministry has indicated in the earlier budgets that it would deal with the collection of taxes by the government and to try to make them a higher priority. In order to make them more collectible, Bill 74 would deem that taxes that have been collected by the distributors of fuel in Ontario would be deemed to be held in trust by those companies for the government.

That deeming of the trust provision would support our government's commitment to improve the tax system's fairness and it would also ensure that unremitted taxes are recovered in absolute priority to all debts. It would work together with Bill 74's enhanced garnishment provisions to secure the collection of tax revenues to the greatest extent possible. The proposed amendments in this bill parallel recent changes clarifying the wording of federal income and excise tax legislation and work to strengthen Ontario's claim for recovering unremitted commodity taxes collected under deemed trust provisions. They would ensure that tax revenue losses are minimized and that delinquent collectors, vendors, taxpayers and their secured creditors do not benefit from failures to remit tax at the expense of the province. Similar amendments have been made to Ontario's tobacco and retail sales tax acts with legislation that was passed in the fall of 1997.

Bill 74 also has provisions to make gasoline and fuel tax system collections fairer. One of the items the bill does is that it allows people who have been overassessed on their collections of tax to appeal those decisions for a four-year period rather than a three-year period, as was the case before.

Bill 74 improves the efficiency of the government in processing objections and appeals in the tax collection process and it speeds up the resolution process as well. The issue of the three- or four-year period for claim refunds for taxes paid in error parallels other provisions in the draft act which change the time period that the government has to reassess or audit the collection procedures of the distributors of fuel, taking that again from a three-year period to a four-year period. It really brings it in line with the assessment and refund period in other provincial tax acts so that there is a general four-year period of assessment and refunds. So we have a consistency there that's been attained through the use of the tax system and through the amendments that are suggested in this bill that would be brought to the fuel tax collection system and those are in line, as I said, with changes brought to other acts, such as the Retail Sales Tax Act and the Tobacco Tax Act, which we brought in in the fall of 1997.

For those people who have been following along, the 1997 budget was the time when we first started talking about these changes and people will recall that was the budget in which the province indicated that we were well ahead of our deficit target at that time. At the time of the 1997 budget we were about $710 million ahead of our deficit projections, thanks to prudent forecasting and an overachieving Ontario economy. It was in that budget that we also announced we would have a record investment in health care of $17.8 billion, so I'm pleased to see that in Bill 74 we're following up on the promises we made in the 1997 budget.

In the 1998 budget we provided some more detail of how we would improve the cash flow in the fuel tax area. We also at that time indicated that we would have the final implementation of our government's 30% provincial income tax cut, and we indicated that we were about $1.4 billion ahead of our deficit reduction plan.

In conclusion, I would like to indicate that I will be supporting Bill 74. I'm looking forward to the debate on this issue and to the remarks of my colleagues, as well as the colleagues across the floor, who I'm sure share my interest in fuel tax reform.

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Mr Joseph N. Tascona (Simcoe Centre): I'm very pleased to join the debate, following the member for Muskoka-Georgian Bay, with respect to fuel tax reform. As the member for Simcoe Centre, I've been a strong proponent of bringing reform into gasoline pricing, especially in my area of Simcoe Centre where we seem to find the gas prices are much higher than in other areas of the province, for no particular reason other than the fact that we have a very heavy transportation volume through our riding, which is a destination for tourism, and also the pricing seemed to go up on long weekends. That seems to be the pattern.

Gasoline pricing practices of large supplier-retailers continue to be a problem which threatens consumers with unreasonably high prices. Price increases are timed to coincide with long weekends, especially in my riding of Simcoe Centre, which undermines the important role played by independent gas retailers in Ontario. Gasoline pricing is an issue of common interest to all Canadian consumers, especially ensuring fair competition in the marketplace, which I would say is the responsibility of the federal government under the Competition Act.

It's a fact that you can drive a truck right through that Competition Act, and the federal Liberal government has done nothing to ensure fair gas prices in this country and to make sure there isn't price fixing under the Competition Act. They have done nothing to protect the consumer in this country with respect to gas pricing.

There was a federal report of the Liberal committee on gasoline pricing in Canada called the McTeague report, tabled in June 1998, which concluded that the current Canadian wholesale and retail gasoline market is not truly competitive and that competition has steadily lessened in recent years. The McTeague report recommended that the Competition Act be amended to provide better protection for consumers and that the federal government immediately act to replace the criminal burden of proof model currently used in sections dealing with predatory pricing and price discrimination. It's just a fact that whenever you see a long weekend, all the prices go up the same. There's very little difference between what each retailer is selling their gas for. The consumer is getting gouged because the federal government does nothing.

The need for immediate action on the part of the federal government to restore competition to the gasoline marketplace has been expressed by Ontario consumers to the consumer watchdog commission of MPPs appointed in the spring of 1998 by the Honourable David Tsubouchi, Minister of Consumer and Commercial Relations, and I'm proud to be a member of that consumer watchdog commission.

The federal Competition Bureau is of the opinion that no marketplace problems exist in the gasoline industry which violate the Competition Act as currently drafted, and a private member's bill, C-235, sets out amendments to the Competition Act to address certain of these issues. That's one initiative by a backbencher federal Liberal member which hopefully will be adopted by the government, but we'll have to see what happens in the hearings.

The government of Ontario has called upon the federal government to address this problem of national dimensions by amending the Competition Act to address pricing practices within the gasoline industry and appointing a special investigator to enforce the revised act to ensure that Canadian consumers benefit from competitive and transparent gasoline prices across the country.

I received a letter last week in the Barrie Examiner, and it was also in the Barrie Advance, from a concerned constituent. The person's name is Aline Revoy, from the city of Barrie. It was an open letter to me:

"Because you are on the task force to monitor gas prices in Ontario, I'd like to ask you to explain the variation in prices from here to Pickering, Orillia or to Toronto for that matter. On Sunday, October 25, driving to Pickering and back, we discovered the price of gas in Barrie, at the Esso or the Shell or Petro was 55.9 cents a litre. In Bradford it was 49.9 cents and in Newmarket it ranged from 49.9 to 51.9 cents. In Pickering, it was 51.9. Same companies.... Now on October 24 going the other way to Orillia, Barrie was at 55.9 cents and Orillia was at 53.9 cents. On October 26th, it was 55.9 in Barrie, 49.9 at the Esso station south of the King Side Road on the 400 - coming back up the 400, the Petro station sold the gas at 51.5."

Aline Revoy indicates: "I have a real problem understanding why the price varies so much. It all comes from the same refinery. Distance to travel could not be a factor as it is cheaper in Orillia than Barrie. I am now convinced that the oil companies must think we are particularly wealthy in Barrie. I think not! Please explain."

That's a very legitimate question on the part of one of my constituents. I'll try to respond to that as best I can, knowing full well that the federal government is responsible for the pricing of gasoline in this country and in fact has done nothing to protect the consumer.

What are the components that make up the pump price of a litre of gasoline? There are four major components in the pump price:

First, there's the price of the crude oil feed stock.

Second, the federal and provincial taxes: 14.7 cents per litre is provincial gasoline tax, 10 cents per litre is federal government excise tax, and then there's 7% GST, which is included on the posted pump price, which comes out to approximately 3.5 cents per litre. I note that the McTeague report specifically indicated that it was not proper for tax to be put on tax, and that's exactly what's happening here. GST is being charged on top of provincial taxes and federal excise taxes, which make up the gas price.

The third component of the pump price of a litre of gasoline is the retail margin required by retailers to cover the costs of running the station and providing a return. These margins vary by size and type of station, but on average are about three cents per litre.

The fourth component is the refining and marketing costs, and margins which represent the costs of refining the crude oil and transporting it, distributing and marketing refined products, including a return on investment. These costs are covered by what is left to the refiner after all the other costs have been covered, for example, crude oil taxes and the dealer margin.

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What we're dealing with here in terms of why there's a differential in gasoline prices from area to area and what makes up the price of a litre of gasoline is these known factors. What's happening out there is a gasoline pricing policy which the federal government refuses to regulate. It seems that the prices of gasoline in my riding of Simcoe Centre, and particularly in the city of Barrie, are staying at that level of 55.9 cents, where in other areas even north of Barrie, and in particular south of Barrie, they are much less.

What's the explanation? I don't have an explanation other than the fact that it would appear that the oil companies or the supplier of the gasoline to the retail operators are related - they're the same company - and they determine that the city of Barrie, obviously because of the high traffic flow and the volume, allows them to make more money because they need to get their gas out of that area, and in fact they get a tremendous amount of volume. It's good business sense, but it's to the detriment of the consumers.

What I particularly object to is whenever we get a long weekend - what we experienced this summer, with the exception of only the long weekend in September - all the prices jump between three to seven cents per litre at the gas stations together, and there's no break for the consumer whatsoever. All the prices are going up because of that long weekend and they're all going up uniformly. You can call it what you will; that's predatory pricing. That's gas fixing and it's not fair for the consumer. That's one of the things I am very adamant about. I think the federal government has to take action on that in terms of pricing.

All we can ensure at the provincial level is to keep making the federal government aware that the constituents we represent - and in fact who they represent because they have 101 MPs here - believe that consumers are being gouged by the gasoline prices in this province, which the federal government refuses to intervene in and protect the consumer.

The bill we're speaking about tonight, Bill 74, which deals with the Fuel Tax Act and the Gasoline Tax Act, obviously is related to what we're trying to do to protect consumers from gas price volatility. Ontario's position has always been that ensuring fair competition in the gas marketplace is the responsibility of the federal government under the Competition Act. They are responsible for the pricing. They are responsible for gas price fixing. They are responsible for predatory pricing against the consumer.

In August 1997, Minister Tsubouchi tabled a resolution in the Legislature calling on the federal government to control gasoline pricing problems by amending the Competition Act to address pricing practices within the gasoline industry. The resolution also called for the appointment of a special investigator to enforce a revised Competition Act to ensure consumers benefit from competitive and transparent gasoline prices across the country.

Has the federal government done anything on that? Of course not. They're not interested in protecting the consumer. But we were pleased to note that MP Dan McTeague, in his gas pricing report which was released June 10 of this year, and many of his Liberal colleagues, notwithstanding the government, are calling on the federal government to strengthen the Competition Act to better protect consumers, which is what Ontario has been calling on Ottawa to do for a long time. A vast majority of the report deals with issues which fall within the federal jurisdiction; gas prices, for example.

We're going to continue to monitor the price volatility of gasoline on behalf of Ontario consumers, but I also note that there is going to be a ministers' conference in November and I know Minister Tsubouchi will make the federal government aware of the feelings of consumers in Ontario with respect to gasoline prices. I hope they'll listen because it's long overdue.

Especially in my area of Simcoe Centre, we not only get a lot of traffic volume coming through the city and into the city, we have a lot of people who commute. We're getting gouged at the gas pump with 55.9 cents, paying much more than other areas. These people have to live and work and they have to use their car to get to their job every day, yet they're being gouged with significantly high prices in comparison to the other parts of the province in the general area, and that's not fair.

We will continue, as I said, to monitor the price volatility and put pressure on the federal government to show that the consumers are not pleased with what's happening. Premier Harris has indicated that if attempts to take action on the national level fail - and we'll know what happens out of this November conference with Minister Tsubouchi and the federal government - Ontario should be prepared to examine options at the provincial level as best we can to protect the consumer, because it's obvious that the federal Liberal government is not interested in protecting consumers.

With respect to the Fuel Tax Act and the Gasoline Tax Act, there are certain components that I would like to address.

The first part is dealing with regulating tax collection and remittance. Ontario is going to harmonize the due dates for gasoline tax with the federal excise tax. As I said earlier, those are the two components which have an impact on the price of a litre of gasoline. There's a federal tax, which is the excise tax, but also the federal government is gouging the consumers by putting the GST on top of that, and there's also the provincial gasoline tax.

The federal excise tax on motive fuel is remitted to the federal government semi-monthly. Tax on transactions during the first half of the month is due at the month end and tax on transactions during the second half of the month is due on the 15th of the following month. At present, gasoline taxes are remitted to the province monthly, on the 21st of the month, for tax on sales during the preceding month. On average, this due date is 13.5 days behind the federal government's due dates.

The 1998 budget stated that the province will improve its cash flow by bringing gasoline tax remittances in line with those of the federal Excise Tax Act. In order to adopt provisions similar to those of the federal government, the minister requires the authority to allow for specific criteria relating to the remittance of tax by certain tax collectors. This amendment provides the authority under Bill 74.

The next area I would like to deal with is the method of measuring motive fuels. The motive fuels industry introduced the temperature-adjusted volume measurement standard of 15 degrees Celsius to correct for the seasonal fluctuations of gasoline and diesel fuel. Volumes of many liquids, especially motive fuels such as gasoline and diesel fuel, expand and contract with changes in the temperature. I'll just repeat that because what we're dealing with here is the gasoline and diesel fuel that is used by the transportation industry in people's automobiles and in trucks. It's a very significant aspect of our temperature in this province as it affects the consumers and their use of gasoline.

Volume based on weather temperature is referred to as ambient temperature volume. Generally speaking, as temperatures rise volumes expand, and as temperatures fall they contract. This volume measurement difference is especially noticeable with gasoline. In most cases the same method of measuring the volume of motive fuel sold is used both for tax and sales purposes. However, in other instances tax has been collected and a sale made on two different volumes of motive fuel.

To ensure consistency and prevent tax losses, the federal government introduced rules in the 1997 budget requiring that both the tax and product sold be based on the same volume measurement, for example, either ambient volume or the industry standard. Ontario is implementing a similar provision.

The ministry should not be affected because the Gasoline Tax Act and the Fuel Tax Act require that all taxes paid by consumers be remitted.

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Greater volumes result in different levels of taxes at certain times of the year, but the real issue is consistency and a level playing field. Problems arise for the industry when sales and taxes are not accounted for on a consistent volume measurement basis. For example, a retailer with ambient pumps may not be able to collect enough tax from consumers in the warmer months to recoup what was charged by the supplier using a temperature-adjusted volume because of a smaller volume measured by ambient pumps.

The ministry is introducing legislation, supported by most of the industry, that calls for consistency in billing for tax and product sales using either volume measurement tool. The federal government has passed similar changes which were announced in its 1997 budget.

The different methods of measuring the volume of gasoline and fuel lead to different methods of collecting tax throughout the oil industry, which may have been reflected in the price of a litre of gasoline or fuel. These new procedures will ensure consistency in the tax collection methods and remove price variances that could be attributed to tax accounting.

The industry has requested that this legislation be introduced to ensure that all members of the industry follow the same rules. The proposed amendment ensures a consistent measurement of motive fuels within the industry for the purposes of collecting tax. This amendment, however, does not sanction the industry practice. It is based on a similar provision introduced in the federal 1997 budget. Without the amendment, the tax collected could continue to vary due to the different temperatures at which the volume of the product on which the tax is collected is measured.

Just to comment further on that, Ontario is harmonizing its due dates for gasoline tax with the federal excise tax. As I stated, that could have a significant impact on gasoline pricing, which is impacting gas prices, obviously, throughout the province, especially in areas such as Simcoe Centre where our temperature is much different than that in the city of Toronto. The differential in terms of summer temperatures versus winter temperatures is quite significant.

The motive fuel industry introduced a temperature-adjusted volume measurement standard of 15 degrees Celsius to correct for the seasonal fluctuations of gasoline and diesel fuel. Volumes of many liquids, especially motive fuels such as gasoline and diesel fuel, expand and contract with changes in temperature. Volume based on weather temperature is referred to as ambient temperature volume. As I said, generally speaking, as temperatures rise, volumes expand and as temperatures fall, they contract. That volume measurement difference is especially noticeable with gasoline. That's basically the nub of the problem and that's what this act is focusing on. Obviously it's a tax amendment but it's also dealing with fairness for consumers with respect to gasoline.

I just would say in closing, I am very concerned about the federal government's inaction in terms of protecting consumers with respect to gas prices. My riding is getting gouged every weekend, every day. The fact of the matter is, there are no controls with respect to gas pricing because the federal government is doing nothing with respect to predatory pricing, they're doing nothing with respect to gas price fixing and they're basically leaving it at the door of the consumers to suffer every day. I have a lot of consumers in my riding who commute every day and they are getting gouged just because they live in the city of Barrie. The federal government has done nothing.

Mr Doug Galt (Northumberland): Thank you very much for the opportunity to speak on Bill 74. Bill 74 is really a budget bill, following from the budget of 1998. It was actually on the order paper a while ago as Bill 173 from the budget of 1997, but when the House was prorogued, Bill 173 was dropped from the order paper. It's good to have it back here and to get this through because it is a very important part of the budget.

Part of the reason to have this in place has to do with optimizing the provincial cash flow. Ending up with over $100 billion in debt, partly because of the lost decade and the tremendous escalation of the budget and the debt during that decade, there's no question the province is cash-strapped and anything we can do to improve that flow is certainly going to be very beneficial to the people of Ontario.

The bill also talks a lot about the measurement of gas based on 15 degrees Celsius - the member for Simcoe Centre explained that in great detail - and also removing barriers to the marketing of special products such as diesel and heating fuel that's refined from waste oil. Being an environmentalist, I'm really quite enthused about the changes that are going on there. Then, there are just a lot of various administrative updates that are present in this particular bill.

The previous speaker spoke quite a bit about price-fixing and the problem that we have. It's in the court of the federal government and it's really unfortunate that they wouldn't address this. Who's to know whether they're making a lot of money or gouging or just what's going on when Wednesday evenings, just before a long weekend, the price goes up, and it goes up significantly - five, six, seven cents. If I happen to be in Toronto and I see the price make that great, big leap, I drive back to Port Hope or Cobourg to pick up some gasoline, I pull in and the prices are almost identical there to what they are in Toronto. Why would it go from maybe 49 cents a litre up to 57, 56 cents a litre instantly, almost in the same hour, in that region? You wonder if something isn't going on, if there isn't price-fixing. There does not seem to be an initiative on the part of the federal government to look at this at all.

It's certainly upsetting to a lot of our visitors to this country when they see the price of gas being moved around like that. We already pay enough tax on our gasoline that we don't need that kind of bouncing. For example, the province collects 14.7 cents on a litre, the federal government collects 10 cents gas tax plus the GST, which works out to a little over three cents, approximately 3.5 cents. There's another three-cent markup basically for handling by the local service station, and then there's the cost of the actual gasoline being delivered. You end up with a price of approximately 50 cents or maybe slightly over on a per-litre basis.

We hear a lot from municipalities looking for some of that gas tax to assist with the building of the roads, the infrastructure in their respective communities, and I have some empathy for their concerns. I kind of look at, if we took the gas tax that the province gets and looked after all the roads in Ontario with that, maybe then we could match the feds with what they're taking in once they would look after any roads that they handle in the province of Ontario. To my understanding, they don't look after any roads in Ontario, they just simply tax that 10 cents plus the GST and use it for whatever purpose. I stand to be corrected; it's possible they look after part of the TransCanada, but to my understanding it's all looked after by the province.

Ontario is investing in the infrastructure in this province. Never before have so many dollars been spent on the roads in Ontario, and it's throughout. I well remember the member for Cornwall criticizing our government in the winter of 1995-96 for the potholes on 401 as he drove back and forth. I didn't hear him criticizing last winter, because those potholes have been fixed by this government.

I remember in 1995 listening to the CBC, a cross-Ontario checkup, about potholes in the province. This was 1995. A call came in from the Dryden area and this caller said, "The potholes are so big up here the moose use them to hide from transports." Then a caller came in from Cornwall and said, "If you go to the bottom of one of our potholes, you can actually hear people speaking Chinese." Then the last caller came in from Sarnia and that caller said, "If you want to give the world an enema, you should use one of our potholes." That was the condition of the roads in this province when we took office.

I remember my brother-in-law driving from Sioux Lookout to Dryden, and at 1 o'clock in the morning he hit one of these potholes and ruined two of his tires and two of the rims. That was the kind of pothole that the previous government left in Ontario. I'm really pleased that that road has now been paved, and I'm sure the member for Kenora would be thrilled to see that road. I understand he flies back and forth, but if he were to drive that road, I'm sure he would enjoy the present condition it's in. Not only have we repaired a tremendous number of potholes that were in this country but we're also building safety barriers, like on the 401, with that gasoline tax.

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I don't know how many people have been seriously injured or have been killed on the 401 because of crossovers. Certainly a lot of those were happening in the Cobourg-Port Hope area. If you drive east of Toronto, there's a long, straight stretch of the 401 until you get to the community of Port Hope, and then there's a bunch of curves on the 401 as you move through that area. The crossovers on slippery roads in the wintertime became pretty serious and a lot of people were being killed. It could have been addressed by the previous government if they'd put in those centre barriers to prevent crossovers, but I guess they weren't particularly interested in safety on our highways because they really cut back the spending on our infrastructure.

As we talk about tax, one of the interesting situations we've had is over property tax. It's certainly been a very difficult one in Ontario as we designed - and everybody really agreed with the current value assessment that our government announced back in June 1996. Then as we moved along, we came up with various options. Starting in January 1997, there were some eight-year phase-ins. We had many options. Toronto actually took on the 2.5% cap that has worked out very well for the city. This is one area of tax, particularly as it relates to property, that if the municipalities had accepted or had used one of these options, it would have saved grief for so many of our commercial and industrial operators and owners in Ontario. Thank heaven the province came to their rescue with the announcement the Minister of Finance made just a little over a week ago of the 10% cap this year for the commercial and industrial owners. Certainly I've heard a lot of positive comments in my area and I'm sure everyone in the House has heard similar comments in their jurisdictions during this past week or so.

Some of them are getting tax increases of 250%, 300%. I'm sure you're familiar with the Hoselton sculptures, for example. You see them in gift shops all over the country, aluminum birds or Canada geese on a hunk of marble. It doesn't matter what airport you go to, even in the gift shop downstairs, you'll find some of the Hoselton sculptures. They're just a little south of the Big Apple on Percy Street, the southern part referred to as the Big Apple Drive. Their taxes went from $9,000 to $38,000. On Monday morning, Gord Hoselton was extremely appreciative when I met him in Cobourg when the Governor General was there. He made a presentation of one of his sculptures to the Governor General and he was telling me how appreciative he was of this move on the part of our government.

The way it was set up, we wanted to see that the local municipalities had the autonomy. They want to be autonomous, but with the size of some of our municipalities - they have a clerk-treasurer and an assistant clerk-treasurer - you get into this complicated legislation and it's pretty difficult for them to deal with it. I, for one, am very supportive of single-tier municipal governments. That's not saying whether it should be the upper tier converted or the lower tier, but having two tiers in the municipal government I think is far more government than the people of Ontario really need to have.

As we talk about taxes, I found it particularly interesting a week ago Sunday evening, driving into Toronto, when Tony Valeri was on CFRB. He is the parliamentary secretary to Paul Martin, the federal Minister of Finance. I've never heard anybody in our caucus move as far to the right as Tony Valeri did in that discussion that evening. He talked about paying down the debt. He talked about the concern he had for transfer payments. A lot of the discussion that evening on the phone-in had to do with the $20 billion that has come from the employment insurance premiums and is sitting there with the federal government. For what reason? Nobody in Ontario can quite figure that out. A large percentage of that came from Ontario workers. It's certainly not going to help the unemployed in Ontario. It's sitting there in a fund.

Also, there's this cut in transfer payments. When we started out with health care, for example, the federal government was paying 50 cents on the health dollar in Ontario. What are they paying today? It's down to 7.6 cents. When the New Democratic Party brought this up and wanted to have unanimous consent to debate it in the House, who said no? It was the provincial Liberals supporting their first cousins in Ottawa, supporting this kind of cut in transfer payments. It's hard to understand why they would be so supportive of their federal cousins. At least the NDP does have a position in this House and you know exactly where it's at. They also brought in a motion asking for unanimous consent to debate the $20 billion in EI premiums and again the provincial Liberals said nay. It's just difficult to understand.

As we talk about gasoline and the various taxes, this government has brought in some very significant income tax cuts, ranging from 49.6% for 10% of the population earning under $15,000. Those earning between $15,000 and $19,000 had a provincial income tax cut of some 36%, and that ranges right through to the upper brackets. I don't know how many make over $255,000, but they're down by 18%, with the average being 33.5%. It actually reduces the total taxes by some 27%.

That's the kind of dollars we're leaving in the pockets of the people of Ontario for the average family. With this tax cut fully implemented, it's approximately $1,385 that they're saving. That is like an increase of $2,000 or more in their salaries. I hear people, particularly teachers, saying, "I haven't had a raise in my salary in five, 10 years." Well, yes, they have. Because of our tax cuts, they've had a raise on average of at least $2,000, and if you look at teachers, it's far more than that. It's more like a $3,000 or $4,000 increase in salary that they've really had because of the tax cut brought about by our government.

Just to even it out, when we removed the employer health tax, getting rid of some of those job-destroying payroll taxes, up to $400,000 of payroll, that has been moved. Where does that income come from? It's coming from people making over $50,000, and it's a sliding scale. That's why they're not receiving nearly as much of the tax cut as some of those in the lower brackets.

This government is also reducing corporate taxes.

Because of all of these tax cuts, we are stimulating the economy. We're making more money available so that people, workers, can buy the widgets, can buy the things that they need and want. When they are out making those purchases, that stimulates more opportunity for people to make those widgets, or whatever they want to make in their industry, and it becomes quite a circle. Some people say, "You're just riding on the coattails of the international economy." Well, make a comparison. BC was bouncing right along in the early 1990s when we were deep into a recession. Why were they bouncing along? At that time, their taxes weren't so high. Now their taxes are high and they're deep into a recession. They went into a recession long before the Asian crisis. It was not the Asian crisis that pulled them down.

I think a lot can be said for our tax cuts. I was really impressed when Dr Sherry Cooper, a vice-president of Nesbitt Burns, and I understand she's a PhD economist, addressed the finance committee. I was filling in at the time. She was going on about what a great job - and this is in Hansard, by the way - this government was doing with the tax cuts and stimulating the economy. I, like a lot of other people, was thinking that the international economy was having a lot of influence. I asked her just how much relates to our government and how much to the international economy. I said, "Would it be 70%?" and she said, "Oh yes, far greater than 70%." I think that in itself indicates a pretty big success story on the part of this government in some of the things we've been doing to stimulate the economy.

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As we address the gas tax here today, we've addressed everything from the effect on the temperature - the adjustment for temperature. There's one area in here that I would like to speak on just for a few minutes having to do with the recycled oil. I think it was rather unfortunate that the previous government allowed some of these used oil burners to be put into garages. Where did 80% of them go? Into downtown Toronto, rather than the original intent of going to northern Ontario.

I know the previous government talked an awful lot about protecting the environment, but they forgot to walk the talk. It was all talk and very little action. We finally put a freeze on the sale of these used oil burners, and it's good to see that in this bill we are removing those kinds of barriers so that used oil can be converted to diesel fuel and heating fuel; also recognizing the biomass products that can create oil: oils coming from things like canola seed and peanuts. These and many other oils can certainly power some internal combustion engines. These are the things that this government is doing environmentally to recognize using something that's renewable rather than something from the ground that is not renewable, and in this particular bill we will be encouraging the use of that technology.

There's also an interesting point in here on the dyeing of gasolines. The main thing here in the dyeing of the fuels in general has to do with harmonization with other jurisdictions; right now it's pretty consistent with Quebec, as I understand it, but certainly dyeing of fuels that are not to be used on the highways such as on farm vehicles. It needs to have more flexibility in that particular regulation and that's what we're doing in this particular bill.

In winding up - I see we have about one minute left - I just want to stress that this bill is called the Fuel and Gasoline Tax Amendment Act. It's really a budget bill that we're bringing in to implement measures that were mentioned in both the budget of 1997 and the budget of 1998, tremendously important with the timing of the payment of the tax that's going to save some $4 million a year just in interest costs alone, and it will be consistent with the federal government.

We're not doing anything that's going to be particularly hard on the oil dealers. It will be consistent with collecting the tax based on the temperature. It will be removing the barriers for the products such as diesel and heating fuels that are made from waste oil, and there will also be some administrative corrections in this bill. For those reasons I enthusiastically support Bill 74.

The Acting Speaker: Questions and comments?

Mr John C. Cleary (Cornwall): The member for Northumberland mentioned my name and kind of aggravated me a little bit in what he said about the provincial highways. If he had had to travel the roads that I have, all the provincial highways in eastern Ontario, he would have complained too, because when this government came into power I don't think they knew what coal mix was to fill these critical holes that were causing all kinds of accidents in my community and other communities across Ontario.

On top of that, these highways that were all worn out, they then had the gall to give them back to the municipalities with insufficient funds to upgrade them. That's a sore spot with many municipalities yet. The biggest kick of the whole thing is when we saw a picture in the paper of the minister out filling these potholes in the spring of the year, once it was too late.

I agree that there should be some kind of a cost saving with municipalities, the farming community and others, on account of all the downloading that this government has done on the municipalities. Surely they could give them some kind of a fund that comes from the provincial gas and fuel tax.

I know in many municipalities their taxes are then increased substantially, some of them 100%, 200%, on the residential and commercial. This government is telling about how great they are to the municipalities, yet they downloaded all these worn-out roads. Also, municipalities are making decisions on what bridges to close and to keep open because they know there's not much money coming from the provincial government.

Mr Wayne Lessard (Windsor-Riverside): One of the points that the member for Northumberland mentioned was the federal Liberal government's theft of the employment insurance surplus funds and the approach that the provincial Liberals took when we proposed raising this topic in debate. I don't recall which context he raised that in, but maybe he could elaborate on that during the two minutes he has.

He also mentioned our record on the environment during the time of 1990-1995, a record that I'm very proud of. It was a time when we put in place the Environmental Bill of Rights and brought in the Environmental Commissioner, the commissioner who has been very uncomplimentary to this government's record with respect to its approach to improving the environment: two scathing reports in a row, and I'm sure next year's report will be no different.

The members for Muskoka-Georgian Bay and Simcoe Centre raised the issue of volatility in gasoline prices, but there isn't anything in Bill 74 that is going to bring an end to the rise of gasoline prices that we see all the time just before holiday weekends or the continuous rise of gasoline prices for consumers at the pump. Even though they talk about stability in gas prices, that may be true as far as regulating the prices at different temperatures is concerned - the member for Simcoe Centre was talking about his area being a colder place; I hope he was referring to the climate and nothing else with respect to his riding - but that isn't going to do anything to try and stop the gouging of consumers at the pump just before long weekends. If I'm wrong about that, I would like to hear that from the government members.

Mr John L. Parker (York East): I was very proud of the performance of the member from Port Carling and Muskoka lakes, the member for Simcoe Centre and the member for Northumberland on this very important bill, Bill 74, the fuel tax act, which implements some of the key provisions of the 1997 budget.

The member from Muskoka lakes led off with the comment that the other two speakers were in fact experts in this field, and he did not mislead us. The member for Simcoe Centre spoke with his customary passion, this time on the subject of his work on the all-important gas-busters group and also on the issue of the effects of temperature on volumetric measurement. I found his remarks in that respect most illuminating and very helpful.

The member for Northumberland, as is his custom, spoke with great erudition, in this case with a dissertation concerning potholes, alternative fuels and of course the all-important issue of the financing of fuel dyes. I'm sure everyone in the House found his remarks most helpful and most illuminating. I certainly paid close attention to his every word and, as always, the member for Northumberland was most illuminating and helpful in his remarks.

Bill 74, as we have heard, puts into legislative effect some of the important elements of the 1997 budget. I appreciate the concern that some members may have that this is a matter that is being rushed through the Legislature, having only been announced in the budget about a year and a half ago. I appreciate yet again another one of these cases of something being rammed through in undue haste, but I do hope people will understand that it is receiving the kind of attention it deserves.

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Mr Richard Patten (Ottawa Centre): It's fun responding to the member for Northumberland, who always throws out a variety of ropes and pieces of string to other members in the House. He's fond of criticizing the federal government, and I would remind him that his leader not too long ago stood up and said to the oil companies, "If you don't play ball, if it looks like it's price gouging, we're going to do something about it." Indeed, there was some debate in the House on whether the provincial government had some authority to do something about it, and of course the Premier substantiated the view that the province has an area of authority to do something and they could act upon it, which they haven't done at this point.

I live in the Ottawa-Carleton area and I want to tell you, when I drive from Ottawa to Toronto, you should see the difference in prices. Sometimes there's a difference of 10% or 15% in the cost per litre. We've raised these differentials in numerous instances. We've seen some discussions, I've heard some interviews on radio with the oil company leaders, and the only thing I can glean is that they're saying they price to market. What the hell does that mean? It means, "If we can get as much money as we can in this market, we're going to take it." That's what it means. It's just like, why do we pay the prices we do flying from Ottawa to Toronto when it costs $614 now to do so? It's priced to market, because a lot of people have to come here and travel back and forth, and they've priced it that way.

My time is almost up, so I will stop there except to say that you might consider sharing some of this revenue with some of the municipalities, where you've offered them to take over responsibility for the roads.

The Acting Speaker: Two minutes for response, member for Northumberland.

Mr Galt: Thanks to the member for York East for being so gracious in his comments. Also thanks to the members for Ottawa Centre, Windsor-Riverside and Cornwall.

The member for Cornwall seemed to take a little exception to my comments. He was talking about the downloading. He forgot to mention the downloading from the federal government to the province, but he also forgot the fact that we paid two thirds of bringing all the roads we transferred to the municipalities up to MTO standards, when otherwise it would probably be a long time before they got up there. We also transferred three years of maintenance, which certainly in Northumberland is well salted away in the bank at this point in time.

It was interesting, the member for Windsor-Riverside talking about the environmental record and the scathing reports. I would think he would be embarrassed to even mention them, because those reports from 1995-96 are really the result of their term in government. I thought he'd be trying to hide those rather than trying to roll them out as our record. Our record of what we've been doing is just starting to show.

I'd also like to point out to him that his minister, Ruth Grier, was very opposed to waste energy incinerators. As a matter of fact, she banned them. But what did she allow upwind from where I live? Five miles upwind she allowed an incinerator to go in to burn PCBs, and she was totally opposed to waste energy incinerators. She did not walk the walk, she only talked the talk, whatever it was for politics. However, I do agree with that incinerator. It's working very well. I wouldn't want the people to be particularly upset. I think it's just a fine incinerator and it's doing a good job environmentally. But I want to point out to the member, here we have somebody who did an awful lot of talking but didn't do much of the walk of what she talked about. I think he should be aware of the kind of Minister of the Environment his government had.

The Acting Speaker: Further debate?

Mr Gerry Phillips (Scarborough-Agincourt): I think I'm supposed to mention that I'll be sharing my time with others in my caucus.

I want to begin our debate on Bill 74, An Act to amend the Fuel Tax Act and the Gasoline Tax Act, by reviewing a few of the elements within the act and pointing out the concerns we have in terms of the trend this is setting. One of the major parts of the Fuel Tax Act and the Gasoline Tax Act is to once again give the minister regulatory power. To use the explanation, the proposed subsection of the bill provides that a regulation "may be general or particular in its application and may be limited to specific types of collectors."

This continues a pattern we see from this government of increasingly giving themselves the authority to do things through regulation rather than through legislation. For the layperson what does that mean? It means that rather than public policy being set here in public, it is set in the cabinet office. That's what regulation means, behind closed doors. I will just point out the importance of this.

Property taxes: For the first time in the history of Ontario, the province has now moved in to collect property taxes. The province has said: "We are going to raise $5.5 billion from property taxes. The rates will be set by the province by regulation to raise $5.5 billion from property taxes to pay for education. School boards won't set those rates; municipalities won't set those rates; it will be done here at Queen's Park." Not in the Legislature, not here where the duly elected people are; down the hall in the cabinet room, through regulations, $5.5 billion.

It now is the fourth-largest source of revenue for the province of Ontario. Personal income tax is first, retail sales tax is second, corporate tax is third and then property tax. The reason it's so important is I think it's wrong. I think it is dead wrong for any body to set taxes in private, behind closed doors, without a vote of the duly elected people. If any council or municipality ever tried this, they would be run out of office the next day. The taxpayers would storm the municipality.

This government gave itself - and it's in one of the tax bills. For those interested in it, it says, "The Minister of Finance may make regulations prescribing the tax rate for school purposes, for the purposes of this section." It goes on and gives the Minister of Finance, the cabinet, the Premier, sweeping powers for $5.5 billion worth of taxes to be set in secret, behind closed doors.

I was always amazed that the Conservative backbench would ever agree to this, because, somewhere down the road, there will be a change of governments. It's just the way the system works. I guarantee you, you will be so angry that any body can set tax rates, raising $5.5 billion in private, behind closed doors. It's wrong. Evidence of that came perhaps most recently from the Supreme Court of Canada, which said, on a different matter, probate fees which were set not through legislation but by regulation were, to use their language, "invalid" or illegal. Now Ontario, by the way, has a $400-million problem. Ontario now is in danger of $400 million being wiped off the books. Why? Because they tried to set taxes by regulation and not through legislation.

That's my first comment on Bill 74. It is a further extension of a government doing business behind closed doors. I say to my friends in the Conservative caucus, I'm sure that before you came here you never thought you would be approving bills that would increase the power of the cabinet. I'm sure you thought you would be pushing in the other direction.

My friend from Northumberland said he's very happy with the property tax process. I'll tell you, he's in a minority. Since May 1997 we have had six property tax bills, each one trying to fix the previous one. Now we've got to have a seventh property tax bill. We're anxious for it to be presented, because it has to be passed before the end of this calendar year. Every municipality is out there on tenterhooks trying to find out, "Where is the government going now?"

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In fact, I was interested to see Cam Jackson, who is one of the cabinet ministers, saying he's going to try and persuade the government to exempt his area from the bill. He doesn't want it in his area. The report here is that he'll be presenting his region's case to Finance Minister Eves because, he says, "We don't need what Eves is going to be doing in our area."

So I say, first, my comments on the bill are, once again we have, through regulation, a government taking more power behind closed doors. Surely if we've learned a lesson from all this property tax stuff, it is that it's wrong to be doing it through regulation.

Secondly, I want to talk, because this is a budget bill, about the implication of these budget bills. My colleague from Northumberland talked about the impact on the environment of the various bills that we're seeing here.

I just wanted to say that in the Provincial Auditor's report that was presented today - and this really is a report card by our Provincial Auditor. We're lucky that we have an independent auditor who looks at the way the finances of the province are managed and provides comments on that for the public. I just want to give a few comments, because it illustrates a government that can't manage the affairs of the province. The member for Northumberland talked about the environment. Here's what the Provincial Auditor said in today's report. He said in 1996 the ministry had 226 air pollutant standards that required reassessment or substantial reduction in the amount of chemicals allowed to be released in the air. It was a huge problem in 1996, in the report. The Provincial Auditor pointed that out.

Here's what the Ministry of the Environment said to the auditor in 1996 when he pointed out that we've got a big problem with air pollution. The ministry responded to a recommendation that it had developed an aggressive three-year plan for studying and updating the standards. In other words, in 1996 the ministry said, "It's a problem and we're going to have an aggressive three-year plan to fix it."

Well, two years later, what does the auditor say? He said, "We recently followed up on this `aggressive three-year plan' and found that not a single one of these standards had been reassessed or updated." It's scandalous that a serious air quality problem - and the Mike Harris Ministry of the Environment said, "We're going to have an aggressive three-year plan to fix these." The Provincial Auditor today reported that in this aggressive-three plan, there was not a single one of the standards.

So when the member for Northumberland talks about a commitment to the environment, nothing could be more damning or more current than the fact that in today's report the auditor said on this aggressive plan that nothing happened.

I wanted to comment as well because central to the budget - and the members have been talking about how pleased they are with the finances etc. I wanted to talk about the area of social assistance and the contract that the government awarded to a firm to assist them in dealing with social assistance. I think it illustrates the problems with the government.

Here's what the auditor said about that. Amazingly, the government awarded a contract to a firm, Andersen Consulting, a well-regarded firm, I might add, for $180 million over a four-year period. Andersen Consulting did their own analysis. They said, "We think the time required to do this may be between $50 million and $70 million." By the way, that would have given them a full profit and all those sorts of things. But the government, for whatever reason, awarded a contract of $180 million. They said they won't get paid unless the savings are there.

This contract was signed in January 1997. Social assistance rolls were going down. Everyone knew it. Everyone knew that this $180 million was going to be in their pockets, but they signed the deal that allowed Andersen Consulting's fees to go up by 63%. There are clerks who have been working on the project who are making more than a deputy minister would make.

The auditor said to the ministry, "Tell us the basis on which you arrived at a $180-million payment," and the ministry said, "We really can't tell you how we arrived at $180 million." Eighty-five per cent of the reason Andersen Consulting was selected was because of their people, and guess what? Over half of the people who were on the project when it was assigned have left the project. So the major reason why they were given the project, over half of them have now left it. For the government, it is a scandal. How could this possibly happen?

On a personal note, what makes me particularly angry is I still remember the note that the minister sent out to community groups going after welfare fraud. Everybody believes people who are cheating the system cannot be allowed to cheat the system, but here's what they sent out. They sent out this thing, "Help Stop Welfare Fraud," a toll-free number: "If you know of anybody or you suspect anybody, phone this number." The Minister of Community and Social Services sent out a note saying: "Would you go around and post these things in public buildings? We've enclosed a copy of the poster that you're encouraged to display in public buildings." In other words, let's hunt down these people. Let's get at these welfare frauds. If you even suspect somebody, phone the number.

What happened? There was some fraud out there. The government found fraud to the tune of about $8 million a year. That was the report that we got. What did all of this do, this hunting them down, putting up posters, getting the posters stapled up in public buildings, the toll-free number? At the same time as the government was telling people to hunt them down - that may be too strong. At the same time they were saying, "Find these people out," they were signing the contract to pay the private sector firm $180 million. Welfare fraud turned up $8 million of annual savings and the government's paying this company $180 million.

What was the cabinet thinking of when they approved a payment of that level? The minister of the day said there were mistakes made and all that sort of stuff, but there was this all-out attempt to track down those who were abusing the system with all of the posters and whatnot and the governments goes on and signs a contract for $180 million for this consulting firm.

I will add, by the way, that the auditor's report - I've now been around these things for 10 years or more. I think it's about the most hard-hitting report. In an area that not many people have picked up on, the auditor essentially says - I'm using my language, not his - that Hydro is cooking the books. The auditor held up the six-month report from Hydro. Remember where Hydro said, "We're making money," and they held up this little booklet? For the first six months, Hydro said they were making $513 million. The auditor said the real number is they've lost $125 million. The auditor points out in his report that Ontario Hydro has said - this is on page 2 of the report, right up front, the most significant one -

Mr David Tilson (Dufferin-Peel): On a point of order: I wonder if, between these various topics that the member is going through, he could mention Bill 74, just in between the various categories of conversation that he's debating.

The Deputy Speaker (Mr Bert Johnson): That is a point of order. We are debating Bill 70. I've just started in this and so I was waiting for the member for Scarborough-Agincourt to bring his remarks within it. I'm sure he will.

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Mr Phillips: Mr Speaker, I would encourage you to have followed the debate that took place before, because it was very wide-ranging, dealing with many budget matters. The government talked about transfer payments from the federal government at length. It was a very free-ranging discussion on the budget. This is a budget bill and the areas that I've been talking about are the impact of the budget and the budget bills. I talked about the regulation. The member for Northumberland was specifically talking about the environment because the fuel tax deals with that, and I've talked about the environment.

The Deputy Speaker: I didn't want to get into a debate on that. I was just ruling on the point of order that we debate the information that's in front of us. I've told the member that is a point and that you will bring your remarks within the bill that we're debating.

Mr Phillips: Thank you, Mr Speaker. A very large part of the Hydro financial numbers has to do with Hydro deciding to write off $6.5 billion of expenses, much of that fuel, which we're dealing with here. They decided that they would, in a sense, prepay fuel costs for 1998, 1999 and 2000. Fuel costs that are going to be incurred in 1998, 1999 and 2000, they went and expensed against 1997. What the auditor said when they did that, which is part of this fuel act - it's in the document - he said that Hydro is reporting a profit of $640 million, $750 million and $645 million, when in fact they're going to lose $1.7 billion, $1.8 billion and $1.5 billion. They will lose $3 billion over the next three years, not make $2 billion. That is significant and a significant part of that is, Hydro decided to prepay their fuel costs. Fuel costs for 1998, 1999 and 2000, they wrote off against 1997.

The reason I raise this is, fortunately, the auditor also was able to - if you look at the budget and then you look at what's called the public accounts, you will find significantly different numbers because the auditor said, "I'm not going to accept the way the government is reporting its finances in the budget," and they were forced to make a significant change in it. That's why the deficit came in at a number about $1.6 billion different than the budget, because there were two sets of books, the real books and the budget books.

I want to also talk about the government's use in its budget of advertising expenditures. The reason I want to do that is that the government, in explaining its budget, has decided to use about $42 million of taxpayers' money in advertising. We saw earlier this week the rather cynical approach on advertising, the $42 million of hard-earned taxpayers' dollars that the government is spending. I just want to share with the public some of things that are behind the $42-million expenditure that you, the taxpayers, are now funding.

This says, for example, "The emotional impact of our advertising is even more important than the content of our copy." In other words, don't worry about the content; it's the emotional appeal of it.

It goes on to point out that they are selling this like a tube of toothpaste. They have what's called a brand personality. Here's the image that Mike Harris has to present: He's fair and reasonable, confident and optimistic, having the guts to do the right thing. It's all manipulated. It's all part of, not a genuine use of $42 million of taxpayers' money to communicate the program, but "Let's appear fair and reasonable." They use those words a lot, "fair and reasonable." "Let's use the term `we have the guts' to make the tough decisions."

The reason I point all of this out is that, in Bill 74, the government just earlier today said, "This is going to net us at least $4 million more money a year." Why? How? "We're going to get the taxpayer giving us the money a lot earlier than they used to give us the money and that's going to save us $4 million a year in interest costs." Fair enough; $4 million is money that the taxpayers will appreciate. Clearly, it comes out of somebody and the industry will pay $4 million a year more. That's just the way it works. This isn't an increased tax but it is an increased source of revenue by simply forcing the industry to pay the money earlier. So here you've got $4 million less for the industry, $4 million more in the pocket of the government. Fair, fine, so be it.

But I say to the industry, if it costs $4 million for you, where is the government using that money? I go through those two examples: a $180-million contract, when the company that got the $180-million contract estimated its maximum cost at $70 million, and $42 million of advertising - clear, obvious pre-election advertising. The public should be aware that during the campaign the parties are allowed to spend a maximum of $4 million on advertising. Harris has already spent 10 times that amount of your dollars, every single dollar of it spent on paid advertising. So I say to the industry that's being asked, to use the language of the government, to improve the cash flow - you know, "Give us your money a lot earlier," so be it; "We want to save $4 million," so be it - where's it going? It's going to fund Mike Harris's advertising campaign.

I want to touch briefly on a point made earlier by the member for Northumberland where he was - hopefully I can find my little piece of paper. Here it is. We often hear in the Legislature, and he raised it earlier today in the debate, "Our problem is the federal government has cut transfer payments." Here's the problem with that argument. I remember the day the federal budget came out announcing the cuts in transfer payments. I remember that day well. Mike Harris said, "I support the cuts." In fact he said, "I don't think the federal government is cutting enough." As a matter of fact, it's right here in the Common Sense Revolution: "In the wake of that budget," in other words the budget cutting transfers to the provinces, "the spending cut component of which we publicly endorsed...." I know Mike's changed his tune now, because it's far more popular to bash the federal government, but you can't erase the record. Mike said: "We like the cuts. In fact, we don't think they've cut enough." That's the first point I wanted to make.

The second point I wanted to make is we've often asked Mike Harris: "Would you like to spend more money on health care. Is that the issue?" He has always said: "No, we're spending enough on health care. Even if I got more money from the federal government, I wouldn't spend more money on health care."

I make those two points to the public because you'll often hear this: "Our problem in health is the federal government cutting transfer payments."

First, Mike Harris - and anybody who is interested in it is welcome to a copy of that - said "the spending cut component which we publicly supported." Mike liked the cuts.

Second, if the issue is that we're not spending as much as we should on health care and therefore we should be getting more money from the federal government, that isn't what Mike Harris said. He said we're spending enough on health care. He has never said he wanted to spend a penny more than he is spending on health care. That's a challenge, I think, for the government in that he was so public in telling the federal government: "We like the cuts. In fact, you probably aren't cutting enough."

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On the bill: On the recycled oil provisions, I think the intent of this portion of the legislation is that it is now a growing industry on refining old oil products and that's good. That's good for the environment; it's good all around. The provisions here are designed, as I understand it, to make certain that those industries are taxed so that because of some historical definitions they don't escape taxation. I'd just make two points on that. One is that on any emerging industry where we are trying to encourage new technology and recycling, I just hope that in the process of trying to get more tax revenue, we don't undermine the success of these organizations that are just in the start-up phase. That's really more of a rhetorical question because only time will tell, but governments of any political stripe are looking for symmetry. I hope we aren't going to undermine an emerging industry where they are refining and recycling petroleum products.

As I'm about to suggest my colleagues continue the debate, I'd say that Bill 74 is a budget bill. It is a relatively straightforward budget bill, but I felt that it needed to be put in a broader context. It is ironic in many respects that today we get the report card from our auditor on the way the government is managing our hard-earned tax dollars, pointing out in the report a number of things: the $180-million contract for the consulting firm; he calls the Hydro approach using the big bath approach; and points out that the Ministry of Health still has eight million health cards that remain to be verified for eligibility. The government has now been in office for almost three years and eight million health cards are not verified yet.

The Ministry of Natural Resources looks like it's perhaps the most mismanaged ministry, with not even proper program support and implementation to see whether it's doing its fundamental job - $800,000 in advances to employees that haven't been collected; $1.3 million in mostly unrecorded disbursements that weren't followed up. I've talked about the Ministry of the Environment, where the member for Northumberland talks about the environmental things in here, and yet in 1996 the ministry said it was going to have an aggressive plan to update the air pollutant standards and today we find that in that aggressive plan not a single one of the standards has been reassessed or updated.

On the fuel tax bill, I think it's a comparatively straightforward matter except that it has many of the symptoms of the problems we've seen in other tax bills from this government.

Mr David Ramsay (Timiskaming): I'd like to thank the member for Scarborough-Agincourt for sharing his time this evening. I was very pleased to see that while he was starting with Bill 74, An Act to amend the Fuel Tax Act and the Gasoline Tax Act, he availed himself of the opportunity also to discuss other budgetary items, as others in the House from the government side have also this evening. It is ironic that today, as we discuss and debate a budget bill, the Provincial Auditor brought out his report. As the member for Scarborough-Agincourt has just pointed out, it is really quite a devastating report. As a northerner, being the member for Timiskaming, I am particularly shocked by the mismanagement of the Ministry of Natural Resources.

I was just discussing that with my colleague the member for Algoma-Manitoulin, who has been here since 1987. For maybe six of those years he has been the MNR critic and he really knows that ministry inside and out. For those of us who come from the north, that ministry has always been the government presence in northern Ontario. It's a ministry that northerners have relied upon to manage our resources, both wildlife resources and timber resources. It saddened me to see the devastating cuts that have happened over the last couple of years of the Harris government, cuts as deep as almost 50% in this ministry that resulted in an over 40% cut in personnel. I think what the auditor has shown us today is what we had been fearing and saying over the last couple of years, that such radical and devastating cuts over such a short period of time were going to basically cripple the ability of the Ministry of Natural Resources to do the job that Ontarians entrust it to do: to manage our wildlife resources, primarily in northern Ontario but throughout the province. Page after page of this report is a devastating indictment of the damage that the Harris government has done to our wildlife through their mismanagement of the Ministry of Natural Resources.

I would say right off the bat that it's the government's cutting policies that I blame, not the personnel who are left, who remain in the ministry, for this devastation. It is horrendous. Mr Phillips mentioned what I think was a most devastating lack of accountability that the Provincial Auditor pointed out today. Thank goodness we have a Provincial Auditor to keep governments of all stripes on their toes.

He says here on page 192, "During the 1996-97 fiscal year, the ministry estimated that $39.2 million would be required from the account for fish and wildlife expenditures" - the account he's referring to is a wildlife account that primarily is set aside from the revenue that is derived from the sale of all sorts of hunting and fishing licences. I and my colleagues agree that this fish and wildlife special-purpose account is to be used for the preservation of our wildlife resources in this province, and it is an extremely good idea. The ministry felt that they would need $39.2 million in this year from this account "and withdrew this amount. However, the ministry's financial system recorded only $34.7 million in actual program expenditures charged to the account. Ministry staff had not properly documented and recorded fish and wildlife program expenditures totalling $4.5 million." I guess what he's saying is that they can't account for $4.5 million in that ministry from that particular account.

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All those good folks I represent who hold their Outdoors Card and buy their fishing licences and their hunting licences who understand that that money, rather than going into general revenues, goes into a specific fund that's entrusted to preserve wildlife in Ontario I'm sure would be absolutely shocked and very angry that $4.5 million of that hard-earned taxpayer money that's collected through these licensing charges has not been accounted for. It's disappeared somewhere, and that's to the loss of all Ontarians, but especially to our wildlife reserves. I think that's one of the most damning indictments that the Provincial Auditor brought down today.

The other thing, on page 162, that the member for Scarborough-Agincourt had mentioned, is that like most ministries, the Ministry of Natural Resources issues travel advances to employees, though it's not as necessary today as it has been in the past. I've felt that over the last few years the need for travel advances has been minimized to quite an extent because of the issuance of charge cards to employees who are responsible for those accounts. They make those charges and then they have to recoup those charges through the ministry and pay off those cards, so I'm not sure why travel advances are getting so out of hand.

When the auditor looked at this, on page 162 of the report, he found that travel advances to employees, as late as 1993, have not been kept track of and have not been recouped. There is a major lack of accountability. In total, at the time of this audit, there was $800,000 owing from ministry employees back to the ministry for advances that were made to them mostly for travel and related expenses such as that.

Again, there's almost $1 million that's outstanding there that could be used for the day-to-day operations of this ministry, to the good of not only wildlife resources but timber resources that would enhance economic activity throughout the province. This is just a tremendous shortfall, and I would hope the ministry will endeavour to collect this money, as they have started to do, so that it can go back into the account.

One of the other areas that I find very shocking is the fishery program, particularly the fish stocking program. It is quite shocking because, again due to the lack of resources, ministry officials have had to cut expenditures in handling and transporting the fry and other fish stock coming from our fish hatcheries across the province, and by trying to minimize the cost of this, have encountered a tremendous increase in mortality of the fish stock.

While we're spending a lot of money in producing these fish, rearing these fish to the size that makes it appropriate to introduce them into the environment in the various lakes - quoting from the report here: "`Many districts no longer have the resources to support fish stocking, particularly aircraft stocking, resulting in a greater workload for fish culture staff or potentially greater post-stocking mortality.'"

What the auditor is saying in talking to the experts here is that even those fish that actually make it to the lake, they believe, because of all the delays in the handling and transportation of the fish, that we're getting a much higher post-stocking mortality. We're not getting our bang for our buck. I thought that's what this government was about: trying to cut waste. Here we're seeing a lot of waste, and this is because of the cuts.

"The ministry invests $4 million annually on advanced rearing techniques and fish diets to produce strong, healthy fish and thereby increase survival rates. However, this effort is diminished because the transportation methods chosen by districts may increase fish mortality and reduce stocking success." He gives many examples here throughout this. I'm sure that the many Ontarians who enjoy going fishing with their families would be very upset to see that these resources are being mismanaged.

Another important area of Ministry of Natural Resources protection of our wildlife is their whole enforcement activity. We have conservation officers stationed throughout the province to ensure that the game and wildlife laws are being enforced properly. Our critic from Algoma-Manitoulin has over the last few years raised the alarm that there's been a tremendous cut in conservation officers and their operating budgets, and that's exactly what the auditor today zeroed in on.

Mr Michael A. Brown (Algoma-Manitoulin): The government said it wasn't so.

Mr Ramsay: All these years, as my colleague says, the government said it wasn't so. But today the auditor has proved that and proved Mr Brown from Algoma-Manitoulin to be correct. He says here that the ministry allocates operating support funding to all the districts for enforcement activity, and this is based roughly on about $11,000 per conservation officer. However, this amount does not take into consideration the geographic or resource pressures affecting each district.

An example of that would be that in the southern part of Timiskaming and actually even in the northern part too, around Kirkland Lake. These are some of the most highly sought-after wildlife management units to hunt moose. Because we are relatively close to southern Ontario compared to the great northwest wildlife management units, there is tremendous hunting pressure in our area and the need for greater enforcement. This is not taken into account.

Additionally, this amount is reduced by office overhead costs and the cost of leased vehicles and computers. After deducting these costs, there's only $4,000 to $7,500 per officer left to carry out enforcement activities and to pay for vehicle operating costs, mandatory training, uniforms and meals while the conservation officer is out in the field, sometimes working very long hours in very bad weather.

The auditor goes on to review this:

"Over the past two years, there has been a decrease in the amount of time spent on general deterrent patrols. Over 70% of the conservation officers who responded to our questionnaire indicated that their assigned areas were not being effectively patrolled due to inadequate funding, poor vehicles and equipment and, in some cases, because of increased patrol areas. As a result, the conservation officers have concentrated on these areas considered to be high risk" based on a history of past violations.

At the districts that the auditor visited, the funds budgeted for each conservation officer were insufficient to carry out enforcement activities. I find it particularly shocking that the funds ran out seven or eight months into the fiscal year. In one example in a district in the northwestern region of this province by November of the year the conservation officer basically was stuck in his office until April 1 of the next year, right smack dab in the middle of the most important moose hunting season, our largest game hunting season that we have in Ontario.

Mr Michael Brown: And deer hunting.

Mr Ramsay: And deer hunting.

Where was that conservation officer? He was in his office somewhere in the northwest. He doesn't identify which one - Kenora, Dryden, somewhere else - not out there patrolling that moose hunt, which is the most important hunt in the northwest. We're really in a mess here, and this had better be straightened up very quickly because we are in great danger of losing our wildlife resources if this trend continues, because there just isn't the proper enforcement.

The report goes on to say that, because of this, there was a great decrease in charges laid in this fiscal year, and particularly in the northwest and the northeast regions, where most of the big game is, there was a decrease by 24% in charges laid over the previous year. "The reduction in patrols may have resulted in violations not being detected and an increased risk of illegal activities putting pressure on the wildlife resources."

It's a twofold effect. The lack of patrols mean the conservation officers are missing a lot of violations, and for the little, limited time that they are out there trying to enforce they are obviously not laying as many charges as they previously did. What we're seeing is an increase in poaching, and the auditor goes on to say, which I think is the most alarming part:

"The reduction of patrols may have serious consequences for the province's fish and wildlife resources. For example, we were informed by the ministry that the reduction of moose tags and reduced patrols may have resulted in increased poaching in the northeast region."

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This is the region where my colleague from Algoma-Manitoulin and myself, coming from Timiskaming, reside. We personally feel tremendous pressure from our constituents in their frustration, in their lack of ability to obtain moose tags. The vast majority of the people we represent want to hunt safely and legally, abiding by the regulations set out by the ministry. But when they see that there's a lack of protection of our wildlife resources, they become extremely agitated, and rightfully so. There need to be some changes made here for sure.

One of the areas of concern is that the ministry have the proper information, which is, I suppose, almost the whole theme for this report. If I go back to the very beginning of the Provincial Auditor's annual report, in his overview, his title is "Improving Information for Decision-Making: Good Decisions Require Good Information." He says that "having good information for decision-making is essential."

One of the very important areas for the Ministry of Natural Resources and for the whole moose tag system that has been designed to provide hunting opportunities for Ontarians, while at the same time trying to conserve our natural resources, requires that the ministry biologists have the proper information as to what the wildlife counts are in the crown lands across the north. It would seem that the ministry has been unable over the last few years to get the proper information. They have not been able to spend the money to do the aerial surveys.

It's very interesting for those who don't live and breathe this, like some of us from the north do, the tremendous job that the MNR biologists do, primarily over the winter. When law enforcement and other management tasks are put to bed for the winter, they move into other activities such as taking inventory. The best way to take inventory of big game is using airplanes and flying in grid systems across selected areas of wildlife management units and visually taking account in those grids of how many, in this case, in my area, moose there would be and extrapolating from that particular count and those particular grids to the whole wildlife management unit to come up to a total count of moose in that area to determine what would be the allowable hunt for the next year.

Changes in weather patterns affect the ability to do that. In fact, if there's hardly any snow on the ground - in one year, up in Kirkland Lake, they did a flyover before the snow came. It's just about impossible to track moose if you don't have some trails in snow, so these counts really rely on heavy snow. They did that inappropriately and in fact we worked with the area fish and game club to ask them to do that again in the next year.

But the auditor had said that in many of the wildlife management units for over 13 years aerial assessments, aerial surveys, had not been carried out. The ministry doesn't have the resources to do the proper accounting of the resource out there to determine what the proper hunt would be, and this could lead to a diminishment in the wildlife resource, which would mean we would no longer have sustainability and would put hunting opportunities in jeopardy, which would be a tragic loss for Ontarians who are hunters, but especially northerners. Really, it's part of our heritage and a right as we see it, the ability to go out and to hunt.

This is a big concern to northerners, and I look forward to discussing these concerns with our fish and game clubs, as I'm sure my colleague from Algoma-Manitoulin and the other northern members will do in probably the next few weeks, as we work towards putting pressure on the government to bring more resources to this ministry. This ministry has been devastated, and now we see that our wildlife management ability has also been devastated, that they have not been able to manage with less, as the government likes to say they can, do more with less money. They're not doing more with less; they're doing much less, so it's doing less with less. In this case, while it's not people, as in other ministries that are being victimized by the cuts, it's wildlife and it's northern Ontario. I for one am not going to stand by and see this happen. I'm very pleased that now we finally have the documented information from the Provincial Auditor that has brought this forward, that gives us the ammunition to go after the government to say that this is not acceptable, that it's causing a great loss to wildlife management and hunting opportunity and outdoor opportunity for northerners.

Moving a little closer in relation to the bill, as the bill, as you know, is about fuel tax and gasoline tax, the purpose of this particular tax, brought in years ago, was to pay for highways. Next to wildlife issues and others related to this bill, the condition of our roads is one of the big complaints northerners have. I reflect on a column by the editor of the Timiskaming Speaker, Gordon Brock, upon his return from taking some six months off and travelling with his family across the country. His observation in his first column upon his return was about the deplorable condition of northern Ontario highways compared to the prairie provinces. He had travelled west with his family, and he noted the contrast in the road conditions in northern Ontario and the road conditions in the prairie provinces as he moved with his family in his automobile across Manitoba, Saskatchewan and into Alberta.

That's one of many observations that are made on almost a weekly basis in our constituency offices. While there seems to have been an attempt, after all the pressure the opposition has put on this government, to make the repairs and do the rebuilding that is required in the north, we really are talking about a major rebuilding and upgrading, bringing all of the northern highways up to the newest standard that the upgrading brings when it comes to a highway near you. But we still have vast stretches - in fact, about five months ago in this House I brought forward a petition that had been started by a transport truck driver out of New Liskeard who had placed petitions in the truck stops between North Bay and New Liskeard. Very quickly about 400 truckers from across the country had signed that petition, which acknowledged the deplorable condition of Highway 11 from North Bay basically to Marten River, a very short distance on Highway 11 but a very bad stretch of highway.

While this bill, Bill 74, endeavours to tighten up some of the enforcement of both the Gasoline Tax Act and the Fuel Tax Act to make it fairer, to make it easier to collect those taxes, the taxes that these bills authorize over any fiscal year far exceed the amount of money that is plowed back into highway reconstruction or construction in this province; in fact, gasoline tax has long been used as just one of the consumption taxes out there to basically fill the general revenue of this province. With the very high cost of gasoline, as was noted by one of the previous government speakers, and the great fluctuation in that and the tremendously high rate of both the federal excise tax on gasoline and the provincial tax, northerners especially, and all Ontarians, have a right to and deserve the very best highway system.

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When you talk to transport truck companies about their inability to properly maintain their vehicles when they have to move those vehicles over improperly maintained roads, and the high cost of that and how those costs have to be transferred to their customers, it is an economic necessity that our highway system be brought up to a standard that we see on the American interstates and other provincial highways across this country.

Hon Robert W. Runciman (Solicitor General and Minister of Correctional Services): They get federal money.

Mr Ramsay: That is very good. I see the Solicitor General has offered a suggestion, and maybe that's part of the suggestion too. We have a TransCanada system that in part originally was funded by the federal government, and possibly we should be looking at that again. I know the federal government puts a lot of money into the Maritime provinces, which don't have the resource base that Ontario does, and there is a substantial contribution from the federal government to highways in other provinces. Ontario is seen, obviously, with a tremendous ability to raise revenue such as this, as having those resources, but we really have to do something major to ensure that we have the proper infrastructure, not only for strong support for the economy of Ontario but also when we look at the injury and death rate on Ontario highways. It's of great social importance that we have an extremely good highway system.

As I'm speaking about northern Ontario, in the under three minutes that I have left in my time, what I'm finding in my area right now is that the most important and pressing issue to my constituents, while we are short of jobs, while we talk about highways, is the lack of doctors. This week the Ontario Hospital Association issued a report of the percentage of people from different regions in the province who enter our hospitals with certain illnesses and diseases, and it is shocking, the statistics that come from northern Ontario of the very high rate, a three to four to five times higher rate than Toronto and southern Ontario, of admissions to our hospitals of people with heart disease and asthma, to name a few that really stand out in that report. A lot of that can be attributed to statistics such as the fact that just about 50% of the people in the town of Kirkland Lake, a town of almost 11,000 people, do not have a family doctor. We cannot go on with that.

We have reports of cancer patients needing to receive chemotherapy waiting in an emergency room for three or four hours, lining up for treatment; because they don't have a family physician who can renew their prescriptions, people desperately going to the pharmacy trying to get their prescriptions, and of course the pharmacist cannot renew a prescription unless a doctor authorizes it. Without a family physician, this puts people, especially cancer patients, in such a vulnerable position that it's just not right. It shouldn't be accepted, and it's just not acceptable.

Time after time I have approached this minister with letters about this, I have spoken to her about this, I have railed about this in the community, as other officials have railed about this, and yet she will not take on the OMA, which really has not addressed this problem over the last few years. I think it's time we had a Minister of Health who would finally stand up to and take on the Ontario Medical Association and say: "You have failed to do the job. You allow a maldistribution of physicians in this province, and it is your responsibility, along with us, to make sure that all Ontarians receive equal access to health care at the very primary level." I'm not asking for all these specialists to be in the north, which would be nice. We accept that we have to go to regional centres. But we need primary health care. That is an issue that my colleagues, especially from the north, will be taking up in the next few days, as it's of growing importance.

The Deputy Speaker: Comments and questions?

Mr Lessard: The member for Scarborough-Agincourt correctly pointed out that Bill 74, amending the Fuel Tax Act and Gasoline Tax Act, is another tax bill put forth by this government, and it needs to be considered in the context of the entire focus of the Tory tax scheme and how that has been reflected in the auditor's report. That really is a criticism of not only the Tory tax scheme but their ability to govern here in the province as well.

I'm pleased that he mentioned some of the decisions we're going to be faced with that are being made by Ontario Hydro, some of the things that we talked about during the debate on Bill 35. I think we as legislators need to look closely at the report from the Provincial Auditor when he says that Ontario Hydro has written off $6.4 billion in expected future costs from its operating results for the next four years. That is going to have a tremendous impact on the government of Ontario's books, because through the changes in Bill 35, Ontario Hydro's financial statements are going to become part of the Ontario government's financial statements in the future.

This is a tax bill that we should consider as part of the overall Tory tax scheme, a tax scheme that we have seen is benefiting those who are very well off at the expense of those who are the lowest paid in our society. It's meaning that the rich are getting richer, the poor are getting poorer, and that has been substantiated by a report that was released just in the last couple of weeks. The middle class is under attack, and this bill is part of this government's strategy.

Mr Grimmett: I'm pleased to remark on the comments of the member for Scarborough-Agincourt and the member for Timiskaming. I thought it was noteworthy that while we have had some complaints raised by the opposition about the amount of speaking time on bills, in 60 minutes of speaking time that the Liberal Party had on Bill 74, I didn't have a stopwatch with me but I estimated that they spoke for about five of those minutes about Bill 74 and the other 55 minutes about just about any other topic under the sun. I take it that they are supporting the bill on that basis.

I noted in his comments that the member for Scarborough-Agincourt wanted to praise the government for having the recycled oil provisions in the act, although he was under the mistaken impression that the recycled oil provisions were there to try and raise more revenue for the provincial government. In fact, the recycled oil provisions in the bill are there to reduce red tape for some business people in Ontario who have developed and are in the process of developing new processes to recycle oil products and to use alternative sources of energy.

These operators currently are in the difficult position of having to collect provincial revenues while not being properly registered as distributors because the current legislation doesn't allow them to be officially recognized as distributors. So these distributors have come to the provincial government and asked for a method whereby they can become collection agents, and this bill will not only allow them to become collection agents but will give them a process whereby they can remit that money to the provincial government and also colour their fuels that are exempt from tax. I think that clarifies that.

Mr Michael Brown: I'd first like to congratulate my colleagues the member for Scarborough-Agincourt and the member for Timiskaming on their fine presentations on what essentially today is a budget bill. I'm always amused as I listen to the government on this. They talk about efficiencies. Their cash flow is going to improve, of course, because they are going to more efficiently have their receivables paid, but the exact opposite could be said for those that are paying the receivables, the small business persons across this province, who now will have to make some more cash flow arrangements, so to speak, so that they can cope with the increasing efficiency of this government.

Particularly, I wanted to talk about the member for Timiskaming's presentation, because today we received the annual report of the Provincial Auditor of Ontario. As the member for Timiskaming pointed out, it is an absolutely damning document from the point of view of the government's operation of the Ministry of Natural Resources.

I think one of the more shocking findings, and the member alluded to this, was the fish and wildlife special purpose account. This is an account that your Outdoors Card funds, your hunting licence funds, your fishing licence funds, and it is supposedly set up under a committee that looks after this. But here's what the auditor said: "The ministry estimated that $39.2 million would be required from the account for fish and wildlife expenditures, and withdrew this amount. However, the ministry's financial system recorded only $34.7 million in actual program expenditures charged to the account. Ministry staff had not properly documented and recorded fish and wildlife program expenditures totalling $4.5 million." They lost $4.5 million.

2050

Mr Martin: I want to respond to the comments by the members for Timiskaming and Scarborough-Agincourt and to say that they put on the record here this evening some very legitimate and important points that the people of Ontario should know and understand about this government and how this piece of legislation that's in front of us here tonight relates to everything else they are doing, fits into the context of the agenda of this government, which is, from all important perspectives, whacking the poor and giving more money to the rich.

I agree with the members who say that this bill doesn't really do a heck of a whole lot about the issue that the Tories seem to think or would lead us to believe in the comments they have made here tonight it will do. This doesn't really do anything to grab that bull by the horns, that very difficult issue of gasoline prices that have a tendency to go up just before a long weekend and then come back down to a more normal rate after the weekend is over. For them to suggest for a second that somehow they can't do anything, somehow they're powerless, somehow they're paralyzed in front of this issue, is to actually belie the truth.

You would also have thought, if you paid attention to the gas-busters fiasco that happened a few months ago with the capes and the white gloves out there, and they were going to take on the big oil companies and make sure that gas prices never went up again and protect the ordinary citizen against all that was wrong and obscene about the level of gas prices from time to time across this province - alas, it all spluttered out. It amounted to nothing, and here we are tonight -

The Deputy Speaker: The member's time has expired. The member for Timiskaming has two minutes to respond.

Mr Ramsay: I appreciate the comments from the other members.

The member for Sault Ste Marie has just mentioned that obviously related to the gasoline tax and the fuel tax has been the tremendous fluctuation in the price of gasoline throughout this province, and this is especially true in more remote areas. The farther away you get from more densely populated centres, there are certainly higher gasoline prices, and this is accounted for by lack of market competition. To actually transport gasoline from the south to the north really only adds about half a cent a litre.

It's a real perennial problem. In the 13½ years that I have been here, there is no simple answer. From time to time, political parties think they have an answer, and even the government member said he was upset that the price fluctuates, this coming from a member of the Progressive Conservative Party, who I would have thought would totally embrace free-market principles, as I think most of us do in this House.

In this particular commodity, it's somehow finding a compromise that allows the free market to function, but on the other hand brings some sort of equity to the people in certain regions, usually the more remote northern regions of the province, so they are not so totally gouged because of lack of competition that the people of southern Ontario benefit from. We in the north in most areas don't get the benefit of gas wars, as southerners periodically do, that give sort of levelling effect to gas prices over the year. I'd be willing to work with the gas-busters and try to find a way; maybe just keeping up the publicity would be a way to embarrass the companies into doing it.

The Deputy Speaker: The member's time has expired. Further debate?

Mr Martin: At the outset I need to ask for unanimous consent to defer our leadoff on this piece of legislation until the critic can be here.

The Deputy Speaker: Is that agreed? It is agreed.

Mr Martin: Thank you very much. It feels good to be in this place every now and again when there is unanimity about something, some co-operative spirit.

Mr Steve Gilchrist (Scarborough East): Only because it's you asking us, Tony. You're number one in our hearts.

Mr Martin: Thank you very much. It's just unfortunate that some of the things I have to say tonight have to be so critical, but that's the way it is around here.

Interjection.

Mr Martin: You'd disappointed if I didn't, right. You'd wonder what happened.

Mr Gary L. Leadston (Kitchener-Wilmot): Somebody has to do it.

Mr Martin: That's right. It's a tough job but it's got to be done. I want to talk tonight about this piece of legislation that's in front of us. I want to talk about three things in the 20 minutes I have.

First of all, I want to talk about the gas-busters. I want to ask the question, where are they? What happened to them? We know where the crime commissioners are. We hear from them from time to time. They're out there doing their work and making that noise and living up to their reputation. I'm just wondering where the gas-busters are, and why it is, when some of the folks from the Conservative caucus get up to speak tonight, we hear all kinds of moaning and groaning about what the federal Liberals aren't doing, but we don't hear a darn thing about what you propose to do and what you learned or what it is you decided to do as a group after you went out across the province on that fateful long weekend - I forget which one it was, but we haven't seen you since - making that grandiose announcement on how you were going to be observing, you were going to watch, you were going to see. Where you saw something untoward happening, some gas price rising in a way that it shouldn't, you were going to stop it, you were going to lie down in front of that big truck when it came and say, "No, you can't do this."

Mr Lessard: Bring the oil companies to their knees.

Mr Martin: Bring the oil companies to their knees and make them say uncle and tell them "Never again will this happen." I'm going to talk a little bit about that in the 20 minutes I have.

I'm also going to talk a little bit about how this piece of legislation actually is another tax increase. Not significant, not huge, not as big as, for example, the tax that's been imposed now on senior citizens when they go to get their pharmaceuticals at the drugstore so they can look after themselves from a health perspective; not nearly as big as the tax increase that most Ontarians across this province are experiencing on their property as the municipalities deal with the download; not as big as in northern Ontario where this government has now reintroduced a cost to register your licence plate on your vehicle that used to be free. It was a token -

Interjection.

Mr Martin: Nonetheless - by the previous NDP government, of which I was proudly a part, which decided that in northern Ontario where transportation is such an essential element of any aspect of life you want to talk about, whether it's going to work, visiting family or taking somebody to the hospital, for the most part you have to drive because the distances are so vast and the weather can be so difficult that you have to buy gasoline and put it in your vehicle. In order to make up for the huge differential there is between the cost of gasoline in southern Ontario versus northern Ontario, we decided as a government by way of some gesture to the north to say that we understand the challenge you face, the dilemma that's in front of you -

Mr Lessard: It's an issue of fairness.

Mr Martin: It's an issue of fairness - that we would, in all fairness, take off the cost of registering your vehicle. But this government in its wisdom decided that it was going to reintroduce that and so we have another tax. I'm going to talk about that ever so briefly in that context. This, at the end of the day, will be a further tax.

We have the government members talking about how they're concerned, how they are sincerely and seriously concerned about the price of gasoline, how it is continually going up, and how particularly on long weekends it goes up and affects those people who like to get out of the city to go to their cottages or whatever, because a lot of travel happens on a long weekend in Ontario. They were going to put an end to that, but in fact what they've done, which they're not going to speak about or be honest about, is, by way of this piece of legislation, to introduce a small, additional tax on the regular, run-of-the-mill Joe and Jane in Ontario who needs to drive to work, drive to a health centre or drive to take their children to a place for recreation etc.

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I'm also going to talk for a few minutes tonight about the larger context within which this piece of legislation is rolling out. That's the context of the gap, the gap that's growing ever wider between those who have in this province and those who do not have -

Mr Lessard: The chasm.

Mr Martin: - the chasm that is growing between those who are rich and those who are poor, and to speak ever so briefly about the report that was put out last week that some of you probably read about if you picked up the newspapers Thursday or Friday, I believe it was, where an analysis was done and some comment made. We raised it here in the Legislature.

It's important for people to understand and recognize just exactly where the agenda of this government is taking us, what very difficult circumstances it's creating for those in this province who actually carry the bacon, who actually get out there and do the work, those people in this province who work for a living, who no longer feel very secure oftentimes in that circumstance because of the nature of the work they now do, which is of a part-time contractual nature. Because of all that, those people are falling further and further behind, while at the same time the folks at the top end are doing much better.

Those are the three things I'm going to talk about tonight. I'm going to try and put some thoughts on the table here, and you can respond in your two minutes and tell me what you think and perhaps take an opportunity to go around here, to get up and give us 20 minutes of your wisdom and understanding of it.

To begin with, I said I was going to talk about the gas-busters and ask the question: Where are they? Where are the gas-busters? Where are these guys who were out there some months ago, before a long weekend, making all kinds of hoopla, getting all kinds of press? It was a great publicity stunt, which this government is very good at. They do it over and over again. It's part of the routine now. Big publicity stunt, big promise to the people of Ontario, "We're going to do this for you, and we're going to do that for you; we're going to respond to this dilemma or crisis on your behalf in this way," and then a week or a month or six months later, we find out that there's no substance to it, that there's nothing there. It's all smoke and mirrors. It's all puff.

As the woman in that ever-famous advertisement said some years ago, "Where's the beef?" Where are the gas-busters? Where are the results of the work the gas-busters were supposedly to take on? The guys in the white capes and the white gloves out there were going to take on the big oil and gas companies, were going to lie down in front of the trucks and say, "No more, that's it." It didn't happen. Nothing happened.

They get up here tonight, and I believe some of the gas-busters themselves spoke and put some thoughts on the table, but all they did in their comments in the time they had was slam the federal Liberals. There may be some justification in that, because there are some things the federal Liberal government could probably do. We have colleagues in the federal New Democratic Party caucus in Ottawa who have tabled private member's legislation which would allow the federal government to take some action that would in fact challenge the big oil companies, big gasoline companies in this province to actually do something about the pricing of gasoline.

In the north we always ask this question: Why is it governments can regulate the price of beer but can't regulate the price of gasoline? Why is it we can make the price of beer the same across the country and yet we can't do that for gasoline? I'm sure there are lots of thoughts on that and ideas and reasons for it, but I don't want to focus tonight on the federal Liberals because they have their own challenges to deal with. I want to focus tonight on the Ontario Tories, who suggest to us that there really is nothing they can do, that it's not within their jurisdiction and they have no power. Suffice it to say that Mike Harris, Ernie Eves and some of the other cabinet ministers in that government from time to time sit down over dinner, over coffee or over cocktails with some of the movers and shakers, the big wheels in this province, the people who make the economy run because they're at the controls, and they could if they wanted to, if they were genuinely and sincerely interested in doing what they say publicly they want to do. We've heard Mike Harris, the Premier, stand up and talk about how he is really upset with the big oil companies, with the big gasoline companies, and we've heard Ernie Eves say the same thing and we've heard the gas-busters say that, but at the end of the day nothing is done. I guess they're not saying it to the right people. They're saying it to people like the member from Windsor and myself, but they're obviously not saying it to those people who are in control of the pricing.

They can do something. Let's look, for example, at Prince Edward Island, the smallest province in the Dominion of Canada. They ran into a problem with the gas and oil companies. They knew that gasoline was really important to the economy of that province and yet they didn't just throw up their hands and say: "We're powerless. We can't do anything. They're too big. Woe is me." No, they brought in legislation to regulate and to do something about the price of gasoline because they discovered that provinces have the right to regulate gasoline prices at the pump. PEI has a regulatory agency that has done that now for years.

This government tonight and over the past number of months has stood up and said, "We've got to do something about gasoline prices," and "Isn't it awful?" and pointing the finger at the federal Liberals, when in fact they themselves could do something if they wanted - all talk, no action, but it's typical of a government that leaves everyone subject to the whims of the marketplace even if that is not in the best interests of the average consumer. Let's make no bones about this. This government is about allowing the marketplace to dictate, to rule, to be in charge of every aspect of our lives. Eventually, if they're allowed the time to do that, that's what will happen. When they stand up and say they're going to do something about the price of gasoline, we know that's not true, because they're not going to interfere in that realm of life in our province.

Oil companies might take a price-setting agency to court, if Ontario set one up, on the grounds that the government is trying to regulate interprovincial trade, which is a federal responsibility. However, as long as the price-setting is done at the pump, they would not likely succeed. That has been our legal advice.

It could also be argued that the price fluctuates so much that the ceiling could become a price floor. In other words, it's possible that consumers might be shut out of potential price decreases. Still, it's likely that competition would operate at price levels below the regulated price just as it does under rent control.

What has PEI done? They've instituted the Island Regulatory and Appeals Commission, or IRAC, as it is commonly known in Prince Edward Island, established in 1981, following the amalgamation of the former PUC, Land Use Commission and Office of the Director of Residential Rental Property. What does it do?

"The purpose of the Petroleum Products Act is set out as follows:

"...to regulate the distribution and sale of petroleum products within the province of Prince Edward Island for use within the province, and the type, location, and operation of facilities and equipment associated therewith, and to ensure at all times a just and reasonable price for heating fuel and motor fuel to consumers and licensees within the province."

To suggest for a minute that there is nothing this government could do in front of this very challenging problem, particularly where it concerns those who live in rural Ontario and those who live in northern Ontario, who depend on their cars for transportation and for so many reasons, is just not to be telling it as it is.

I wanted to speak as well just for a few minutes about the context within which this bill is situated, and that's the growing gap between the rich and the poor, which was documented so well by the Centre for Social Justice just this past week in a report that it put out which talks about how over the last 10 or 15 years in Canada and in Ontario, because we're driven by this market force that nobody seems to have the courage to get up and challenge or seems able to find a way to have government do its job in co-operation with or in partnership with or in front of, in fact what's happening because government hasn't been playing its role is that the gap between the rich and the poor is widening.

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One of the interesting things, though, that's pointed out in the study, just so you know how this relates to the government of Mike Harris and the Tories in Ontario, is that for 10 or 15 years the gap has been widening, but up until 1994-95 at least those at the bottom end of that chasm, the lower-paid workers in the province, those who get the lowest income, were ever so slightly increasing. The gap was increasing, but their income was still going up year over year by a small amount, as governments moved to make sure that cost of living and those kinds of increases were considered and brought in new ways of helping those who are at the bottom end through the various programs that were introduced.

But under the present government, in 1995-96, for the first time in the history of this province, the actual income of those at the bottom end has decreased, coincidental, I might say, with the 21.6% that was taken away from some 750,000 people across this province, the lowest-paid people, the lowest-income people in the province, who have children to feed, who have homes to make sure they can pay the rent on, who have clothing to buy during the long winter months. Those 750,000 people across the province found their income reduced by 21.6% under this government, the first thing they did when they became government.

This gap, which you'll probably hear a lot more about as we move towards an election, which is coming in this province within the next six to 12 months, is described like this by the report, which might help you understand a bit further why you should be concerned. It says, "The employment gap: Access to paid work - any work or enough work - is key to understanding what has been happening to the poorest families over the last generation. The casualization of work has hit young people and families the hardest, but has become a permanent feature of the labour market." The casualization of work means taking real, solid, long-term, good-paying jobs and turning them into part-time jobs or contract jobs. That's the casualization of work, and it's contributing in a major way to the gap.

"The income gap: Governments have made radical changes in the way they provide income for people without a job, and how much income support people can expect. The erosion of this help has been most rapid since 1995."

Mr Lessard: What year was that?

Mr Martin: It was 1995.

"The social stability enjoyed by Canadians for much of the past 25 years is starting to give way to increased inequities in the distribution of incomes."

If you think it's just the social justice centre that's talking about this, let's look very briefly at an article that showed up in the business section of today's Toronto Star, which isn't known to be a left-wing newspaper or to be purporting left-wing ideology. It says, in an article written by David Crane today in the Toronto Star, "There is no dispute over the fact that executives and managers are getting better pay increases than ordinary employees." This is not to speak of the people who can't get jobs because there are no jobs for them to get. This is not to speak of those who are out of the workplace because of the casualization of employment. This is talking about people who actually have jobs, and he's saying that there's no dispute that the top echelon are getting more and more increases than those ordinary employees.

This is the environment in which we're looking at this bill tonight, which is going to make some changes, some insignificant in many ways yet important changes, to the Fuel Tax Act and Gasoline Tax Act of Ontario.

There was one other piece in this paper that I wanted to bring to your attention which is interesting - some right-wing economists, speaking about things they could do to better the economy: "Raising the goods and services tax to help pay for lower taxes on capital gains and increased retirement savings limits for the rich.... Eliminating special tax breaks for the elderly, unemployed and those on welfare to pay for lower income tax rates for everyone." We know what that means. That means lower income taxes particularly for those who are at the top end of the scale.

To end my few thoughts here, I want to remind people that we as New Democrats do not believe that the income tax scheme is in any way in the best interests of the people of Ontario, and that at the end of the day if we don't reinvest in health care and education and in jobs, we'll all be worse off for it.

The Deputy Speaker: Comments or questions?

Mr Lessard: On a point of order, Speaker: I don't believe we have a quorum. I'd like you to check.

The Deputy Speaker: Would you check if there's a quorum present, please.

Clerk Assistant: A quorum is not present, Speaker.

The Deputy Speaker ordered the bells rung.

Clerk Assistant: A quorum is now present, Speaker.

The Deputy Speaker: The Chair recognizes the member for Northumberland.

Mr Galt: I was interested to listen to the usual kind of speech to come from the member for Sault Ste Marie. He's becoming something like the member for St Catharines in that you can almost tell what he's going to have in his speech; it's consistent, if nothing else.

He talked about the growing gap between the rich and the poor. That's why this government, very progressively with our income tax cuts, gave those in the bottom 10%, those under $15,000, a 49.6% cut, while those over $255,000, only a half percentage point, ended up with only an 18% cut. That's a significant difference, and I'm sure the member for Sault Ste Marie appreciates that significant difference in the variations.

I think it would be interesting for the member for Sault Ste Marie to know that if you look at the average in Canada and the average in the US, here in Canada our unemployment is double what it is in the US, and at the same time we pay twice as much to people who don't work. Whether they're on welfare or on unemployment, we pay double the amount for them not to work. There's a very significant figure there when you see that our unemployment is also double what it is, on average, in the US. Your government was very prepared to pay people to sit at home. I can give you all kinds of testimonials of people who have been on workfare. They're very pleased with getting out into the workforce and having a recommendation from a supervisor.

I think you've recently read about the boondoggle that you people had in public housing, some $5 billion that's missing over your public housing, not to mention the $60 million that disappeared from the northern Ontario heritage fund during your term in office. I think those are some of the things you should be addressing as the member for Sault Ste Marie.

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Mr Michael Brown: I always enjoy the presentation by the member for Sault Ste Marie, and always kind of shake my head a little bit with the member from Laffer, or whatever that curve is called, on the other side.

As we debate this fuel bill that's here before us, one of the things that is perplexing to many of us is that since about 1990 the amount of money collected through gasoline and fuel taxes, which used to roughly parallel the expenditures of the province of Ontario on our roads, has steadily declined. In other words, the revenue that we bring in from fuel and gasoline taxes now far exceeds the amount of dollars that we pay to keep our roads in good condition.

I know, for my constituents in northern Ontario, we would like to see an improved relationship. We would like to see more money spent on improving our infrastructure. I remember making a presentation here in the House about two years ago. I had been talking to my friend Rick McCutcheon from the Manitoulin Expositor and he had conveyed to me that a tourist had told him that the stretch of Highway 17 between Sudbury and Sault Ste Marie was the worst stretch of Trans-Canada Highway in Canada. This person had driven from one end to the other and that stretch of 17 was the worst. We've seen some improvements in the last little while, and I'm happy about that, and we will continue pushing for those improvements. But clearly roads and the condition of those roads are paramount in the minds of my constituents and, I'm sure, in the minds of those in Sault Ste Marie.

Mr Lessard: I want to compliment the member for Sault Ste Marie for his very eloquent remarks this evening. I respect the member for Sault Ste Marie as being the social conscience of this place on many issues. It's important to hear that point of view, and I hope that the government members are listening as well, because he's talking about that growing gap between the rich and the poor, a gap that is growing because of the tax policies of this government. What we're debating here tonight is another tax bill

We need to debate that in the context of the entire Tory tax scheme, a tax scheme that benefits those who are the most well off and really kicks in the teeth those people who are down. The member for Northumberland seems to suggest that a 21% cut to those on social assistance really wasn't enough. We're actually providing too much assistance to those who find themselves losing their employment because of changes that this government is promoting in the economy and maybe we should eliminate all supports whatsoever. Maybe that's his sort of suggestion for improvements. We in the New Democratic Party fundamentally disagree with that. That's why we've said clearly what we would do with that Tory tax scheme, a tax scheme that the Liberals, by the way, say they wouldn't interfere with one bit.

The member for Sault Ste Marie also talked about what the provincial government could go do to control gasoline prices for consumers who are faced with huge price increases just before a long weekend, but this government continues to say they have no ability to regulate those prices. We know that's wrong. They're doing it in Prince Edward Island. This government can do it, but they refuse.

Mr Gilchrist: It's my pleasure to add a couple of comments to the presentation made by the member for Sault Ste Marie. As my colleague from Northumberland suggested, it's a little difficult talking about this bill in response, because the member varied off topic into a wide variety of other challenges that he sees have been made to the taxpayers.

Obviously, one of the issues he's touched upon is in terms of fairness. We believe we've gone about as far down the road in terms of bringing tax fairness as the $11 billion deficit we inherited would allow us.

What the member opposite knows is that at the same time, the federal Liberal government continues to rip off the taxpayers of Ontario to the tune of over $2.5 billion a year. Heaven knows the potential that we could put those dollars to, the various ills that would solve in our society, the continued progress towards a balanced budget and, once we've hit surpluses, obviously the attendant savings, the interest expense that would be saved every year from that point onwards.

I am surprised the member continues to focus his comments and his criticisms on the only level of government in this province that has made any moves towards giving more money to those who are less fortunate, to cutting the taxes they face. At the same time we see municipalities increasing their taxes by as much as 17% and we see the federal government continuing to take far more money from Ontarians per capita than they take from any other citizens in this country. Then they turn around and give less of it back to Ontario than they give to any other province. The bottom line is that we can't do it alone. We recognize that there is still progress to be made but we know we've done our bit. Call on the federal Liberals to follow us in that example.

The Deputy Speaker: The member for Sault Ste Marie has two minutes to respond.

Mr Martin: I want to thank the members for Scarborough East, Northumberland, Algoma-Manitoulin and Windsor for taking the time to get up and respond to my brief comments.

The member for Algoma-Manitoulin reminds me that if the agenda of this government were as good as they say it is, then all the Third World countries would be just roaring successes, and we know in fact that's not the truth. It's interesting to listen to the members for Northumberland and Scarborough East try to justify a regime that is creating an ever-growing gap between the rich and the poor in this province.

This bill, among other things - this has been confirmed by ministry officials - is a small revenue increase. I said in my remarks that it's not as big as the increase we have seen in taxes across this province by way of the copayment that seniors now have to pay for their drugs, that we in the north now have to pay re the price of licence plates, the money that property owners are now having to cough up because of the download on to municipalities and communities. These are all things that have contributed in a very serious and growing way to the gap that's beginning to grow wider and wider in this province between the rich and the poor.

The members across the way talk about the income tax scheme, the income tax break they're giving everybody. The rich, yes, get a fairly substantial and significant amount of that. The poor get a smaller amount and in some instances no relief whatsoever, but they sure get hammered by the taxes this government has introduced by way of the copayment on drugs, by way of the download on to property taxes, by way of the newly instituted cost of licence plates for northerners. If this is what they mean by tax fairness, we don't want any of it.

The Deputy Speaker: It being almost 9:30, this House stands adjourned until 1:30 tomorrow afternoon.

The House adjourned at 2128.