LEGISLATIVE ASSEMBLY OF ONTARIO
ASSEMBLÉE LÉGISLATIVE DE L'ONTARIO
Wednesday 30 May 2007 Mercredi 30 mai 2007
The House met at 1845.
ORDERS OF THE DAY
STRENGTHENING BUSINESS THROUGH
A SIMPLER TAX SYSTEM ACT, 2007 /
LOI DE 2007 VISANT Ã RENFORCER
LES ENTREPRISES GRÃCE Ã UN RÉGIME
FISCAL PLUS SIMPLE
Mr. Chan, on behalf of Mr. Sorbara, moved third reading of the following bill:
Bill 174, An Act to enact the Taxation Act, 2007 and make complementary and other amendments to other ActsÂ / Projet de loi 174, Loi édictant la Loi de 2007 sur les impÃ´ts et apportant des modifications complémentaires et autres Ã diverses lois.
Hon. David Caplan (Minister of Public Infrastructure Renewal, Deputy Government House Leader): On a point of order, Speaker: I seek unanimous consent that, notwithstanding the order of the House dated May 9, the vote on third reading of Bill 174 may be deferred pursuant to standing order 28(h).
Mr. Rosario Marchese (Trinity–Spadina): "Will be deferred" or "may be deferred"?
Hon. Mr. Caplan: "May be deferred."
Mr. Marchese: I thought that it will be deferred.
Hon. Mr. Caplan: Yes, at the time of the vote, you'd have the division and have—
Interjection: So it's going to be deferred.
Hon. Mr. Caplan: It's going to be deferred.
The Deputy Speaker (Mr. Bruce Crozier): Do we have this all settled now so that we have unanimous consent? Agreed? Agreed.
The Minister of Revenue has moved third reading of Bill 174. The Minister of Revenue.
Hon. Michael Chan (Minister of Revenue): Businesses in Ontario have asked for a simpler tax system, and the McGuinty government has listened. Bill 174, Strengthening Business through a Simpler Tax System Act, 2007, would make compliance with Ontario corporate tax laws easier and less costly, and that's what my ministry aims for: helping our clients meet their tax obligations in the most effective way. I think we are making great strides toward that goal with Bill 174.
I am so pleased to be speaking to this bill today for third reading. I think we have witnessed government efficiencies at work here. This is an excellent example of effective government. We have adapted to the changing needs and demands of the people of Ontario and are well on the way to passing a bill that will streamline tax administration in this province. That's an accomplishment I take great pride in, not only as the Minister of Revenue but also as a former businessman.
It is also beneficial for businesses to keep tax administration down to the basics. Bill 174 achieves this. In short, Ontario businesses would benefit from a single tax form, a single tax collector and a single set of income tax rules.
Today, I would like to emphasize once again how Bill 174 would help the businesses of this province by expanding opportunities and strengthening our economy.
Bill 174 creates a new single piece of legislation, combining the Corporate Tax Act and Income Tax Act into the Taxation Act, 2007.
I would like to highlight some of the benefits of this bill. By moving to one set of tax forms, one tax administration and one set of rules, Ontario businesses would save time and money—up to $100 million annually in compliance costs. Businesses will save a further $90 million a year in Ontario income tax from a harmonized income tax base. The total amount of legislation and regulations will be cut by more than half, streamlining Ontario corporate and personal tax provisions.
The business community has spoken, and we have responded.
What this bill comes down to is one government administering corporate taxes in Ontario. If passed, it will reduce compliance costs for businesses, enable the Canada Revenue Agency to streamline services and reduce administration costs, making it simple.
And less is more. Less paperwork, less overlap, less time and less money spent on unnecessary duplication equals more opportunity, more capacity, more time and more money for businesses to grow and thrive. As businesses spend less time on paperwork, they can begin to spend more time doing what they do best: creating jobs and fostering a strong economy.
That's what our government is helping to do: creating a competitive environment for Ontario's businesses. We are making positive changes that will help build a vigorous economy that will benefit all Ontarians.
With our fourth budget, presented by the Honourable Greg Sorbara, Minister of Finance, on March 22, 2007, we left behind the deficits that we inherited and entered into a new era of balanced budgets and sustainable services. This is a new era, an opportunity for us to become an even stronger Ontario and, in turn, to strengthen businesses in Ontario.
The 2007 budget proposes more measures to simplify tax compliance and administration and to support corporate income tax base harmonization, a move that complements the position of Bill 174.
In the budget, we proposed a variety of measures that speak, as does this bill, to our commitment to provide a strong business climate, including reducing high business education tax rates by $540 million, which will benefit more than half a million businesses in 321 municipalities across the province; and providing more than $2 million to the Canadian Youth Business Foundation, which helps young Canadians create their own successful businesses.
In addition, to help support a strong, dynamic and globally competitive business environment in Ontario, the 2007 budget also includes significant investment in electricity infrastructure; significant initiatives as part of a $1.7-billion investment over five years, to 2009-10, in research and innovation; the establishment of a new Ontario Manufacturing Council; enhancements to certain entertainment industry tax credits; and significant measures supporting Ontario's tourism, entertainment and creative industries.
The McGuinty government recognizes that every area of a vibrant business sector adds to the success of Ontario, and that's exactly what Bill 174 does.
Our government has consulted with businesses and made improvements to this bill, confirming our commitment to deliver positive change for the people of Ontario.
We are accelerating the elimination of capital tax. This tax will now be gone by July 1, 2010, freeing up money to invest and grow Ontario's businesses.
And we have gone further: We are extending the apprenticeship training tax credit by four years. Our government sees the growing demand for skilled labour, and we are helping to meet that demand.
Businesses can invest in the future with the support of the McGuinty government. We can see the opportunity for us to become an even stronger Ontario, and we are acting on those possibilities.
Our government also recognizes the importance of research and development in creating a competitive business environment. This was the first government to create a ministry dedicated entirely to encouraging research and innovation in Ontario. Our continuing commitment to R&D is reflected in this bill. We have created a new R&D tax credit that would continue our support for research and development in Ontario.
These are just a few examples of the way our government continues to deliver results for businesses in Ontario. That's how my ministry and the McGuinty government work for Ontario. By consulting with key stakeholders, we are able to deliver measurable results that meet the needs of our businesses and our province. And I think we all recognize that strong businesses mean more jobs and a stronger economy for all the people of Ontario.
This government is committed to building a vibrant and competitive economy for our businesses, but we also recognize that this will mean change for the government too. We understand that with the passage of this bill, some people who are now working for us would be working for the federal government.
Change is not always easy, and I applaud the staff at my ministry for embracing these changes and continuing to provide excellent service to the people of Ontario. The memorandum of agreement signed in October 2006 with the federal government acknowledges the skills and expertise Ontario staff would bring to the CRA.
The people who work for the Ministry of Revenue are a priority, and we will continue to meet all our obligations to those employees. Negotiators for the ministry are working with the federal government to obtain the best human resources agreement possible for our employees. We will continue to assist affected staff and work with the bargaining agent representatives to help ensure a smooth and transparent process.
As is always the way, for some stakeholders, change can't happen soon enough. Business owners have told us they do not want to wait until 2009 to start realizing the benefits of Bill 174, and once again our government has answered. Businesses want to realize compliance cost savings as soon as they can, and so do we. So our ministry and the Canada Revenue Agency are working together to save businesses time and money by integrating some administration processes for taxation years prior to 2009. This is good news for business owners in Ontario and another example of the great work the McGuinty government has done for our province. We look forward to the benefits of these cost savings as soon as possible, once human resources and transition agreements are completed.
Bill 174 is a good-news bill for Ontario businesses and proof of the positive changes that can be achieved when governments work together. We are proud of the progress we have made in our bid for fairness from the federal government on behalf of the people of Ontario. But our work does not end here.
This bill helps to build a continued productive working relationship with the federal government, and it is in our mutual best interests to work well together. A strong Ontario benefits Canada. Building on our successes will help build a better, more competitive Ontario and Canada.
The Strengthening Business through a Simpler Tax System Act, 2007, is a major step forward in providing a more competitive business environment to achieve a stronger and more prosperous Ontario.
I now ask the honourable members for their support for Bill 174 so that we can enhance Ontario's business climate and expand opportunity for all.
The Deputy Speaker: Further debate?
Mr. Tim Hudak (Erie—Lincoln): I'm pleased to respond. Unfortunately, another night, another time allocation motion by the Dalton McGuinty government, ramming through legislation once again. Almost 100% of their bills these last few weeks have been time-allocated. So you know they're anxious to get out of here as fast as possible. They're tired of questions in the Legislature. So we find ourselves with a mere 20 minutes to address Bill 174.
I enjoyed listening to the comments of the honourable Minister of Revenue, Minister Chan. I do want to note that we in the official opposition were very curious when the new Ministry of Revenue was created by the Dalton McGuinty government, I think in record time. Congratulations to the minister. He was an MPP for a mere, what, three days—
Mr. Hudak: Two days, I hear from my colleagues across the way—and elevated to the status of Minister of Revenue. No doubt many members who had been elected in 2003 or previously who were not cabinet ministers probably looked sideways, thinking they had worked many long hours, put in many long weekends, many nights in the Legislature, and were passed over for an individual who had been an MPP for merely two days. No doubt there was probably a little bit of discussion in the Liberal caucus room.
Mr. Hudak: No? Everybody thought this was the right thing to do, eh?
The minister has some strong background in business. I know he had worked hard for his nomination. I just find it rather passing strange that many able members of the Liberal benches found that a two-day rookie had been put into cabinet just—
Interjection: That happened to you in 1995.
Mr. Hudak: It didn't happen to me in 1995, no. But it's nice of you to say.
What was also very interesting was the creation of the Ministry of Revenue. This is a golden oldie of a ministry, right? When the minister finally found his offices, he probably found an Olivetti typewriter on his desk, all kinds of carbon paper, likely a rotary telephone, and the old copy machine—what were those things called again? They had purplish ink that you could smell. I remember doing that in elementary school, if you wanted an interesting distraction and to improve your mood quickly.
Hon. Mr. Caplan: You're not old enough to remember that.
Interjection: Do you remember those days?
Mr. Hudak: I do remember those days.
When the minister finally found his date stamp there in the ministry, it had a date, likely, of February 3, 1993. Do you know why I say that? Because that was the last time there was a Minister of Revenue in the province of Ontario. The minister at that time? An interesting trivia question for the members.
Hon. Mr. Caplan: It was a long time ago.
Mr. Hudak: I know; it was a long time ago. The Minister of Public Infrastructure Renewal was barely out of elementary school at the time, I suspect, back in 1993, the last time we had a Minister of Revenue.
Mr. Hudak: No. The end of the Ministry of Revenue came as a result of that legendary cost-cutter Bob Rae. Bob Rae axed the Ministry of Revenue as a redundant and unnecessary ministry; the legendary cost-cutter, the legendary budget-balancer, so to speak, Bob Rae, back when he was simply a closet Liberal as opposed to a card-carrying member of the Liberal Party.
I will remind members of the assembly that the last Minister of Revenue—we didn't have toonies at this point in time; we had loonies, I guess.
Hon. Mr. Caplan: Shirley Martin.
Mr. Hudak: No, it wasn't Shirley. God bless Shirley Martin, the federal member for the Grimsby area, for Lincoln, at the time. She was a cabinet minister under Brian Mulroney. So, no. It was close: It was Shelley Wark-Martyn. The Honourable Shelley Wark-Martyn was the last Minister of Revenue in the halcyon days of 1993 when the legendary cost-cutter Bob Rae said it was a redundant ministry. Dalton McGuinty dusted this golden oldie off like some Frankie Avalon 45 and brought it back into vogue, I guess, to recognize his newly elected member from Markham.
I'm not sure where the minister's office is. I did have a suggestion at one point in time. The appropriate place for the Ministry of Revenue would be in the Whitney tower. The Whitney tower, of course, was mothballed some time ago, like the Ministry of Revenue itself. I thought it would be an appropriate location, although the Whitney tower has been mothballed for some 39 years and the Ministry of Revenue only for 14.
Do you know what? Maybe they were going to be serious about this ministry. If I were the minister, by the way, and Dalton McGuinty gave me that call and said, "You've been a member for two days. You've been very impressive. We're going to put you in cabinet," I think I would have asked for one of the existing ministries. With no disrespect to my colleagues across the floor—they certainly would not be included in this list—there have been some underperformers in the Liberal cabinet. I'm not naming names, and certainly the exceptions are staring across the floor at me right now. So you'd think the Minister of Revenue, the member from Markham, would have gone into one of the existing ministries instead of creating this golden oldie of a ministry anew, but unfortunately a new ministry started.
I said, "Okay. Let's check this out. Let's actually see what's happening in the Ministry of Revenue." So I went to their website tonight—fresh, hot off the press, so to speak; electronically, of course. We said, "Let's see what they have on the minister's website for speeches." You click on "Speeches"—2007, obviously; the only applicable year, because in 1993 they probably didn't have a website for the Ministry of Revenue. We checked the month of—this was created in April, March, February? Anyway, we checked each month in 2007, and not a single speech was listed for the Ministry of Revenue. Not a single speech was listed on the Ministry of Revenue website from the time it was created. I said, "Okay, maybe there haven't been speeches worth posting on the website. How about press releases?" Again, you click on 2007, look for each and every month, and there's not a single press release on the Ministry of Revenue website. So maybe unlike some other ministers who like to announce a website a day, or a minister who has been known to announce and re-announce the adventures of Brad Graham in claiming a certain trophy in Philadelphia and bringing it back home—and good for Mr. Graham.
Anyway, we will follow the adventures of the Ministry of Revenue with a close eye, but it seems, in many senses, a ministry created that actually isn't doing too much. We fear that this was simply the creation of another post for profile purposes, as opposed to actually investing taxpayer dollars wisely. Maybe we'll see a change in that. Maybe we'll go to the website tomorrow and we'll see, at 8 a.m., a new speech on there from the minister, or a press release, but after many months not a single one has shown up on that website, sadly.
Bill 174—as I said, it's disappointing that we are once again facing a time allocation motion this evening. What was rather interesting—Mr. Speaker, you may recall—is that during committee, actually, my colleague for Beaches—East York had shown that the number of motions was greater than the entire number of pages in the bill. This is an incredible accomplishment. I don't know how that's possible, that they would actually have motions that outnumbered the number of pages in the actual legislation. Maybe you're writing or rewriting the bill on several occasions, but that certainly gives pause to the competence of those who were drafting the original legislation.
We do support its purpose. As I said, I commended the minister on bringing it forward; I commended the previous minister, Minister Flaherty, on initiating the process. The Progressive Conservative caucus is supporting Bill 174. We're disappointed, nonetheless, that it's being rammed through with a time allocation motion.
We do look forward, as we watch with a very close eye, very rapt attention, to the future productivity of the minister and the Ministry of Revenue to see if it's actually about doing work or simply creating another cabinet position, a driver and staff.
Mr. Marchese: I'm not going to take the whole time.
Hon. Mr. Caplan: Aww.
Mr. Marchese: I could, and sometimes I enjoy it, as you know. I was about to welcome people to this political program—it's 7:10; we're on, live, Wednesday night—but it's not that kind of an issue today to do that. People can go back and watch some other—is hockey on tonight?
Mr. Hudak: Yes, at 8 o'clock.
Mr. Marchese: It's starting at 8 o'clock, is it? Because I'm not into—if it was a soccer game, I'd be watching it right now and I wouldn't be here; I've got to admit that. But hockey, I don't know.
First of all, I want to talk to the issue of time allocation. You know what? I'm tired of saying, "God, the government has just introduced another time allocation motion." I'm not going do that anymore. Why am I not going to do that anymore? Because when we are in government, we get accused by the opposition of moving time allocation. Then we get in opposition and we accuse the government of moving the motion. It's almost silly. It almost seems silly that every political party, once they get in opposition, attacks the government for moving time allocation motions. It's almost silly, yet we do it religiously, as if nobody notices.
Hon. Mr. Caplan: Why?
Mr. Marchese: Why? Because it is the job of opposition parties to do that, as you did when you were in opposition, and you relished it. Then you get into government and you say, "Oh, you're so negative. Stop complaining." Everyone who gets into government says, "The opposition is so negative." It's true: Opposition parties are always negative.
Hon. Mr. Caplan: Not you.
Mr. Marchese: Not me, except sometimes. Constructive.
So on the time allocation motion: Please, it's another one, and the government—but what is true, what I believe is going on, is that the government wants to get us out of here quickly. I estimate we're going to get out of here at the end of next week, which is going to make civil servants happy, I can guarantee. It may make some of our viewers happy; I can guarantee that, too. And some of us love to be here to debate; I can guarantee that as well. But I know for a fact that the Liberal government wants us out of here next week, and they're going to do their best to time-allocate everything and get us out.
Why do they want us out? They haven't been getting some good news lately. They have been whacked for the last—
Hon. Rick Bartolucci (Minister of Northern Development and Mines): Who?
Mr. Marchese: You've been beaten up for the last five weeks. They hoped that their budget, the anti-poverty budget, was going to give them a little boost into the election so they could beat up New Democrats and claim, once and for all, "Yes, hallelujah, we've found poverty. We're dealing with it. Only we Liberals are going to attack poverty. Yes, it's a couple of months before the election, but we're on to it. Follow us. Abandon New Democrats and everything will be better," more or less.
Except the budget didn't work for you. You had a couple of problems with a couple of ministers, who shall remain nameless, and it caused a couple of weeks of problems and off-focus poor government. The Liberals are saying, "God, how did we get out of focus so badly? Let's end this problem. How do we deal with that? How did we get into a situation where the opposition parties are having a field day on everything except what we wanted them to talk about, and that was the budget, and they're not talking about the budget?" You struggled with your own members to raise a couple of issues with your questions.
We sometimes can be pretty silly, I've got to tell you. I was in cabinet, and when I was not in cabinet any longer, they could never, ever persuade me to ask the kinds of questions we ask ministers. It's pretty silly. We should end that practice altogether where we lob—you know, I used to play baseball, softball, and I loved it. We all lob those silly balls to the minister. No matter how you try to make it sound tough, they're lob balls, right? And we try to give the ministers another opportunity to look good on some issue, because they haven't been looking good for a while. It's silly. We've got to end it.
I've got to tell you, when New Democrats form the government in 2007, I will be one who publicly says, "We will end the practice of having our own members lob questions to the ministers." I guarantee that I will say that publicly. But it may not happen. You may be re-elected; you never know. You guys are still in the lead in the polls.
Mr. Kevin Daniel Flynn (Oakville): We're looking good.
Mr. Marchese: You're not looking that great, I've got to tell you. You're saying you're looking good, but you're not looking that great.
But you never know. As Bob Rae used to say, "The polls can change." He was right—for the worse. In fact, when Bob Rae said, "The polls will change," he made it appear like we were going to get better in the polls. It didn't happen. You guys are going to pray that you're going to do better in the polls. I've got to tell you, I don't think it's going to happen. But this is a prognostication on my part; I could be wrong. Who am I? I don't have a crystal ball. I'm not the oracle whom the Greeks used to come to for advice—except, when asked, of course, I offer it as best I can. But who knows?
On this bill, briefly: What I know about this harmonization, Minister of Revenue, is that we're going to lose 90 million bucks. Is that correct, more or less, give or take? I thought the minister agreed that what the province of Ontario is going to lose is 90 million bucks. That's a whole lot of money. We could use that money. I know there are a lot of corporations that can never get enough of government largesse, that can never get enough of corporate welfare, that are going to ask for more and more. They ask of the Conservatives, and they love to give; and they ask of the Liberals, and they, too, love to give, under the guise of, "We have to be competitive," And I understand; I do understand.
There are times when we, as a government, have to be actively involved, as we were involved in 1992. The Minister of Northern Development and Mines would know this a little bit, I think. You'll remember when we were in government and we had a recession, which none of you admitted to be a fact. But that's okay; we understand politics. When the mills were shutting down, what did we do? We got together, the government, the union, the workers and business and, together, we saved a whole lot of plants. That's how we saved quite a few New Democrats, by the way, at that time when Bob Rae was not very popular. That's how we saved those seats. You may not want to admit it, for whatever reason, but we saved a couple of seats in that very difficult time because of that tripartite agreement that we had with government, unions and the corporate sector—and we saved the mills. There are times when you've got to do that; absolutely. It's a lesson you could learn.
So when we are about to lose 90 million bucks—I know there are a whole lot of corporations just waiting to suck up to that money, because they can never get enough. I appreciate the fact that when we simplify the tax structure in whatever way, it's probably for the good, probably for the better. But not once did the minister say, "That 90 million bucks we're losing—it will be okay. We'll make it up somehow. We're going to make an extra $90 million some other way." I didn't hear the minister talk about how we're going to make up for that $90 million, except, "This is good for business because it will make them more competitive." God bless, but when we lose 90 million bucks—including, Minister, expertise because we won't be able to re-employ all of the people we're losing; I suspect you would agree—we will have lost a great deal of expertise that we've built up in that department for a long, long time, expertise that will be lost.
Maybe we don't have to worry about it. Maybe we'll be able to retain enough expertise. Maybe you're right. I don't know, but I worry. I worry about the number of people we're losing, and I worry that the Liberals do not have a plan in terms of how we manage this with the workers and the union so that we have some harmony between you and the workers and the union as we harmonize. So you have harmonized, but I'm not sure you have achieved the harmony you need to achieve with the workers. Because if you had, we would have heard about it, leading me to believe that there's a lot to worry about, how many workers we are going to lose, in addition to the 90 million bucks we're going to lose to the corporations, who can never get enough of your largesse.
The third and final point: Many provinces have harmonized across Canada. I would have loved for some Liberal, one Liberal, the minister or any minister to have brought forth some studies of the effect on our finances or their finances and the effect on staff where they have already harmonized. We know that a few other provinces have harmonized. Surely we must have done some study that says, "Here's what we are going to lose by way of money, by way of staff, by way of harmony with our workers and the loss of expertise." Yet no one—not the minister, not one Liberal MPP—has talked about what happened in another province that could help to persuade me we're on the right track. You need to persuade the opposition. You need to persuade those who might have some concerns about harmonization, and you would have persuaded some or many, had you decided that the way to do it is to show that where they've done it in other provinces, it went well. There was harmony; the loss was minimal—less than you thought, less than I thought; the loss to staff was minimal—less than you thought, less than I thought; and the loss to expertise was minimal—less than I thought, maybe less than you thought. That would have helped me.
That data is available, surely. Perhaps the minister has that data, but I don't. It would have been good for you, Minister and the others, to have shared that data, because I am convinced that it is available to you. And if it is not available to you, you as minister and you as a government could have easily gotten that information from those provinces at the mere calling of those provincial governments.
So, Minister, I raise these concerns with you. I raise them so that those who are watching know that New Democrats have some concerns about the three or four points that I have made and that other members of the NDP have made. I hope that you will take them into account as this bill becomes enacted by your government, and I hope that those who are concerned will address those questions to you as the election gets closer.
The Deputy Speaker: Further debate? Does any member wish to speak? If not, pursuant to the order of the House dated May 9, 2007, I am now required to put the question.
Mr. Chan has moved third reading of Bill 174, An Act to enact the Taxation Act, 2007 and make complementary and other amendments to other Acts. Is it the pleasure of the House that the motion carry?
All those in favour, say "aye."
All those opposed, say "nay."
In my opinion, the ayes have it.
Call in the members. This will be a 10-minute bell.
I have been given a deferral slip. Pursuant to standing order 28(h), the vote will be deferred.
Orders of the day.
Hon. Mr. Caplan: I move adjournment of the House.
The Deputy Speaker: The deputy House leader has moved adjournment of the House. Is it the pleasure of the House that the motion carry? Carried.
This House is adjourned until 10 o'clock, May 31.
The House adjourned at 1922.