CONTENTS
Tuesday 4 November 1997
Fair Municipal Finance Act, 1997 (No. 2), Bill 149, Mr Eves /
Loi de 1997 sur le financement équitable des municipalités (no 2),
projet de loi 149, M. Eves
STANDING COMMITTEE ON FINANCE AND ECONOMIC AFFAIRS
Chair / Président
Mr Terence H. Young (Halton Centre / -Centre PC)
Vice-Chair / Vice-Président
Mr Wayne Wettlaufer (Kitchener PC)
Mr Ted Arnott (Wellington PC)
Ms Isabel Bassett (St Andrew-St Patrick PC)
Mr Jim Brown (Scarborough West / -Ouest PC)
Mr Monte Kwinter (Wilson Heights L)
Mr Gerry Phillips (Scarborough-Agincourt L)
Mr Gilles Pouliot (Lake Nipigon / Lac-Nipigon ND)
Mr E.J. Douglas Rollins (Quinte PC)
Mr Wayne Wettlaufer (Kitchener PC)
Mr Terence H. Young (Halton Centre / -Centre PC)
Substitutions / Membres remplaçants
Mr Toby Barrett (Norfolk PC)
Also taking part / Autres participants et participantes
Mr Almos Tassonyi, senior economist, taxation policy, MAH
Mr Bill Wong, manager, tax design and legislation branch, FIN
Mr Gerry Sholtack, senior counsel, FIN
Clerk / Greffière
Ms Rosemarie Singh
Staff / Personnel
Ms Alison Drummond, research officer, Legislative Research Service
Mr Mark Spakowski, legislative counsel
The committee met at 1005 in room 228.
FAIR MUNICIPAL FINANCE ACT, 1997 (NO. 2) / LOI DE 1997 SUR LE FINANCEMENT ÉQUITABLE DES MUNICIPALITÉS (NO 2)
Consideration of Bill 149, An Act to continue the reforms begun by the Fair Municipal Finance Act, 1997 and to make other amendments respecting the financing of local governments / Projet de loi 149, Loi continuant les réformes amorcées par la Loi de 1997 sur le financement équitable des municipalités et apportant d'autres modifications relativement au financement des administrations locales.
Failure of sound system.
Mr Bill Grimmett (Muskoka-Georgian Bay): I would like to speak to you today as you begin clause-by-clause consideration of Bill 149, the Fair Municipal Finance Act (No. 2).
Ontarians know that the property tax system is unfair, inconsistent and outdated. They asked the government to fix the problems in the system, and we are taking action to make the system fair.
Bill 149, combined with measures already passed in May in the Fair Municipal Finance Act, is part of the government's ongoing plan to create a fair, consistent and accountable property tax system in Ontario.
The Fair Municipal Finance Act, Bill 106, was the first stage in bringing fairness back to property taxes in Ontario. It ensures that similar properties with similar value in the same jurisdiction pay similar property taxes. It gives municipalities the tools to ensure fair implementation of the reformed system.
For example, it gives municipalities the flexibility to phase in assessment-related changes over up to eight years, to suit local needs. It ensures that municipalities assist their low-income seniors and persons with disabilities by offering cancellation, deferral or other relief for assessment-related tax increases. Bill 106 gives municipalities increased power to set tax policy to meet their own needs, so long as they do not increase relative tax rates on classes of property that are already taxed unfairly high.
In response to business concerns, Bill 106 eliminated the outdated business occupancy tax. This business tax is based on arbitrary tax rates that have no relation to Ontario's modern business environment.
By getting rid of inequities in the property tax system, we will stimulate economic growth by helping businesses compete on an equal footing. Bill 149 includes specific measures that respond to advice put forward by businesses, municipalities, non-profit organizations and other groups.
Through Bill 149, owners of vacant lands and buildings which currently incur no business occupancy tax will retain a similar tax treatment.
The bill gives municipalities the flexibility to set lower tax rates for lower-valued commercial properties such as small retail strip stores, restaurants and neighbourhood shopping districts to ensure they are not adversely affected.
We recognize that charities and similar organizations play an integral role in the life of communities across Ontario. If Bill 149 becomes law, municipalities will be able to offer such organizations tax rebates of up to 40% when they occupy business property.
We all take pride in Metro Toronto's commercial live theatre industry, the third-largest in the English-speaking world, which attracts 90% of Ontario's live theatre audience. We also know that Metro's large commercial theatres pay higher property taxes than their international competitors and their local publicly owned competitors.
This industry, according to a 1994 Coopers and Lybrand study, contributes some $400 million in tourism and 12,500 direct jobs. Provisions in Bill 149 and an education tax exemption in Bill 160 would ensure that Metro's large commercial theatres pay a level of property tax in line with their international competitors. To level the playing field locally, we are proposing to amend Bill 149 such that competing publicly owned theatres in Metro make payments in lieu of taxes at the same rate when they are used to stage for-profit productions.
If passed, the new city of Toronto will be required to pass a bylaw to allow a decrease of payments in lieu if public and exempt theatres demonstrate that revenue from profitable productions cross-subsidizes not-for-profit activities.
To recognize the vital contribution small privately owned live theatres make to Ontario's world-class live theatre industry, live theatres with fewer than 1,000 seats would be exempted from property taxes.
We'll also be putting forward an amendment today to deal with the concerns raised by the Canadian Opera Company.
Pat Bradley, executive director of the Professional Association of Canadian Theatres, has said, "Bill 149 will provide a more dependable and equitable approach to property taxes for theatre companies across the province."
Dean Ott, general manager of Young People's Theatre, agrees. "Young People's Theatre is a prime example of how the Fair Municipal Finance Act (No. 2) will have a positive effect on a theatre company, which will have a positive effect on the industry, which will solidify Toronto's position as an international theatre destination," he said.
On another international level, our international bridges and tunnels play a vital part in doing business with the United States. By levelling the playing field for all 14 international crossings, Bill 149 would further enhance Ontario's international competitiveness. The new measures in Bill 149 would replace the existing patchwork system of assessing and taxing international bridges and tunnels with a fair and consistent system.
We have consulted with representatives of our international crossings on these proposed changes, and already as a result of our actions, the Peace Bridge Authority in Fort Erie has recently announced the approval of phase I of a $200-million capital expansion project.
We heard concerns about the number of regulations in Bill 149. By dealing with these measures in the legislation, which you will shortly be reviewing, we will offer more certainty to municipalities and taxpayers.
We are open to suggestions for making the legislation more responsive to the needs of local governments and taxpayers. We demonstrated this by proposing amendments at the beginning of second reading to encourage discussion.
We have listened to the concerns of the development industry and concerned municipalities with respect to the fair tax treatment of lands pending development, and we have decided to continue those discussions.
We have also listened to the concerns of the Fair Retail Tax Group with respect to access to assessment information on multi-tenant properties. In response, we are looking at amendments to existing legislation that would ensure access to available information, subject to the privacy rights of others.
The people of Ontario told us that changes were needed. We have responded. Property tax reform is just one measure that will in the long run translate into economic growth, jobs and confidence for the future of our province. We are confident that we are on the right track and that this legislation, if passed, will support our objective to make Ontario a better place in which to live, work and invest.
We've heard from many knowledgeable individuals, among them John Bech-Hansen of the Board of Trade of Metropolitan Toronto, who said that: "The Board of Trade of Metropolitan Toronto commends the provincial government for proceeding to introduce a modernized property assessment system across Ontario. Not since the province assumed responsibility for property assessment in 1970 has any subsequent provincial government shown the courage to act decisively in this critical area."
J. Bradford Nixon, of the Canadian Property Tax Association, Ontario chapter, also stated, "The government is to be commended for recognizing the need for basic assessment and tax reforms."
Clearly, with Bill 149, we are moving in the right direction. We are taking a system that is complicated, frustrating and incomprehensible to taxpayers and making it fair, consistent and understandable. We are simplifying the system so that property owners understand why they are paying what they are paying. Families who are paying more than their fair share of taxes will no longer have to pick up the tab for those who have been paying less than their fair share.
We want to move ahead with the measures in this bill to create a smooth transition for the taxpayers of this province and to put in place the fairness measures which all Ontarians deserve.
Mr Gerry Phillips (Scarborough-Agincourt): Let me start by saying that I think the government has no idea what it's doing here. I used to be a businessperson. I ran businesses; I had 300 employees. I would never have agreed to proceed with this without some idea of what it's going to mean.
I'm always amazed at my colleagues in the Conservative Party, who purport to be business people who understand the bottom line. You're signing a blank cheque here. Mr Wettlaufer, I'll go on record right now as saying I'll be very pleased to be in Kitchener-Waterloo when this hits, and I'll say, "I've warned Mr Wettlaufer." And I warn Mr Rollins. I warn the caucus that you are approving something here of which you have no idea what the impact will be.
I will say that for small business the impact of this will be profound. You've done nothing in this bill to help small business. There's something in the bill to help owners of small buildings, but nothing to help small business. When they see the impact of this, they're going to want some answers from you. We tried to pass a resolution in the Legislature, which Conservative members voted against, to have the impact studies released. It was a motion that was supported by the NDP and ourselves.
Let's look at what this means to real people out there. Do any of you have any idea what it's going to mean to businesses in Belleville and Trenton? You don't. The government knows, the cabinet knows, but you don't. I will just say the elimination of the business occupancy tax means that the commercial and industrial and realty taxes are going to go up 40%. We've been told that. It is going to redistribute the business occupancy tax dramatically and it's going to hit small businesses.
I was late for this meeting because I had a phone call from someone desperate because an amendment the government proposes is wrong. Here we are having a profound impact on organizations and people and operations, and the amendment the government is trying to bring forward is wrong. I gather they're going to bring forward some additional amendments, seeking all-party agreement and they may very well get that.
My point is this: You are making the same mistake here that you made in Bill 136, Bill 140, the omnibus bill, the megacity bill, virtually every bill that has been introduced. The back bench must recognize this. It has not been thought through. No one has given the members of the Legislature the information you need to make these decisions. All we're being told is, "Everybody agrees there has to be change in the property tax system in Ontario, so you, members of the Legislature, buy what we're selling because we're only selling one thing," and that's this bill.
The second area I'm always amazed the Conservative back bench have not raised more issues about is setting tax policy by regulation. Frankly, it is wrong. I've often said if Bob Rae were trying to put this bill through, Mike Harris would be sitting here -- of course he would have notified all the media he was going to do something dramatic -- and he would be filibustering -- perhaps he'd be reading off all the rivers and streams in Ontario -- because, he would say, no government has the right to give itself this power.
May I say it is breathtaking to me that the government would give itself the authority to set a third of property taxes by minister's regulation; just pick up a pen and he's going to set -- over half the business taxes in Trenton will be set in private at a cabinet table by Mike Harris. You may say, "I like Mike, so that's okay," but you are passing laws for the future, so it may very well not be Mike Harris -- it won't be Mike Harris some time in the future -- and some other government is going to, by regulation, set over half the property taxes in Trenton with no discussion, no debate, nothing, just by what's called minister's regulation.
When you're in opposition it gets a little bit frustrating. I keep track of these things, and so far over the last six years I've won zero votes and the government has won 350 votes, so you've got the power to do it. But if I were in the Conservative backbenchers' shoes, I'd say: "Listen, I'm going to have to explain this thing and I'm going to have to answer to my local chamber. I'm going to have to answer to my local organizations and I want to know what the impact is going to be." I guarantee you, the impact of this is to shift taxes off large businesses on to small businesses.
The last thing I'll say is that I was actually quite surprised that when the municipal financial officials were in to see us the final day of hearings, I think it was the Thursday hearings, they indicated that the final tax bill will not go out until, in their estimation, late June 1998 at the earliest, maybe later. That is beyond the time when appeals can be registered. We've got an amendment in here that says that at the very least you should allow people to appeal after they get their final tax bill. The light will go off when people get their final tax bill in 1998 and find out what has happened to them. That doesn't have to be, because the government has impact studies, which is jargon for, "How is this going to impact on my local community?"
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As I say, my background is business and I'm being asked to sign a blank cheque here. I'm being forced to sign a blank cheque; I have no choice, because the government will put this through. But the Conservative back bench do. You can go to caucus and say, "Why are you forcing us to do this without giving us the evidence to prove that we're not going to be hung out to dry when this thing finally hits the streets?"
There we are, Mr Chair. As I say, I look forward to the clause-by-clause. The fact that we've got 35 government amendments and counting indicates that this thing is not particularly well drafted, in spite of the fact that the government has given itself virtually unlimited authority to set tax policy by regulation anyway. I would just say I will keep this Hansard and next July and August be travelling the province to tell property taxpayers that this is because the government wouldn't give the Conservative back bench the information they needed to make a reasoned decision.
M. Gilles Pouliot (Lac-Nipigon) : Bonjour, Monsieur le Président and members of the committee. Should I be appalled and shocked, representing a party when -- actually confirmed it with some 42 amendments. Does it tell us that a piece of legislation, a bill, was drafted in haste? Does it remind us that a better business plan, using the mantra's jargon, would have been preferable? Does it address, through focus groups, feasibility studies, impact studies? We don't know because the commissar, the members of the politburo, operate best under a veil of secrecy. They're a lot faster when it comes to hitting the poor. Mind you, that too they do by regulation. It's only as they move up the food chain to satisfy the insatiable appetite of their ill-fated agenda that they encounter resistance.
My colleague the parliamentary assistant has chosen to parallel with some of Bill 160, and he's absolutely right. Bill 160 is being opposed by the majority of Ontarians. You see, it's not so much Bill 160; it's the whole mantra, it's the whole manifesto. You either like or dislike Mike Harris. To some people, I've heard it said, they are thugs and bullies. It's not that they want to hurt the marginalized; it's just that the agenda demands that they do so.
This downloading bill, with its 42 amendments at present, is not so surprising. You had 160 amendments on Bill 26. That's where it all started. C'est là que tout a commencé. It began and then you moved up, you made a volte-face on Bill 136. You don't know where you're going; it's as simple as that. Less than two months before implementation, January 1, who pays for what? Do the municipalities know? Who's going to make up the slack? What about interim tax levy? What about 600,000 appeals? What about 3.8 million units being assessed and reassessed? It starts in all our neighbourhoods on January 1, less than two months from today. We still don't have answers to the many questions that were raised by the presenters time and time again.
This is a mess. You talk about an opportunity for municipalities. It's always them, but they don't have opportunities if they have a shortfall of money. You say, "It's okay, you can take eight years to enact rebates and increases." Commerce, business, doesn't work that way. You have as much latitude as you have money, as your credit line will allow you to do. So if you have a rebate, you might have to wait, but if a municipality is in need of money, it has an obligation to go and raise the money and it shall not wait. There's no alternative there.
It hasn't been worked out. We don't have one impact study. The government keeps saying with great fanfare that this is revenue-neutral, that taxes will not go up. We know there's $1 billion being taken out of it. We know that. We know there's $5.4 billion to be reconciled, aside from the deficit, all on borrowed money -- the tax break plus the deficit. We all know that; it's not a secret to anyone. But you've advanced so far without a timetable, without giving the opportunity to people to digest, to assimilate the changes. You've created a climate of anxiety politically, at your own peril. You will wear it well, and you're so deserving.
The back bench don't have a say. They're like members of the first brigade as they near the abyss. You have a few mandarins who control the agenda and that's all there is to it. You can smile, you can laugh. Go out there on your way to the Mercedes-Benz dealer at 761 Dundas Street East and stop at Regent Park before you order your M320, 3.2-litre.
Mr Wayne Wettlaufer (Kitchener): How do you know where it is?
Mr Pouliot: I know what I'm talking about. I'm talking about Regent Park.
Open your eyes. You've scared the living daylights out of people. How will this work? Go and ask the municipalities. I live in Manitouwadge, 800 miles north of here. What's the cost of policing, starting January 1? Our taxes will go up by $400 to $500 per unit, because we pay for social housing, ambulance services, library and policing. We should know who's going to make up the slack. It's supposed to be revenue-neutral. Best wishes.
You have created a mess of the highest order. When the assessments, when the tapes come in, in April, you will have 600,000 assessments. You will have class assessments for the first time. You will have a business community that's up in arms. I know how the commissars will deal with that.
But you see, the bleeding will not be controlled forever. Go out there. You've got 2.1 million children who should be at school. You have 128,000 of the most educated people in our province, who in unison are saying, "Commissars, put the brakes on." Those are law-abiding citizens. For the most part, when it comes to confrontation, timids are not used to it. I directed two strikes at a mine site; I was strike director. Our task was a lot simpler. There was the employer, the barons, and there was us miners on the picket lines, pointe finale, one common denominator. But we didn't hurt people; we listened. Our books were open.
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You still have time, but I have no faith. We don't present one amendment. It's not because we give up; it's because we are against the whole bill. It makes no sense, by virtue of not having a timetable attached to it. It's too much at one time, because it's part of your overall agenda and it's all arriving at the same time.
The Chair (Mr Terence H. Young): Thank you, Mr Pouliot. Further comments and questions? There's a delegation at the table. I would like the gentlemen to introduce themselves for the record, please; your name and your position.
Mr Gerry Sholtack: My name is Gerry Sholtack. I am senior counsel in the Ministry of Finance.
Mr Almos Tassonyi: I am Almos Tassonyi. I am a senior economist with the municipal finance branch of the Ministry of Municipal Affairs and Housing.
Mr Bill Wong: I am Bill Wong, a manager in the Ministry of Finance.
The Chair: Thank you very much. We will now go to clause-by-clause consideration of the bill. I have no proposed amendments to section 1. Comments or questions? Shall section 1 carry? Carried.
Section 2. I have a proposed amendment from the government. Mr Grimmett, please.
Mr Grimmett: I move that subsection 2(1) of the bill be struck out.
In explanation, the regulatory power to define eligible small theatres is removed because the definition is being moved to the legislation itself.
The Chair: Further comments or questions? Shall the amendment carry? Carried.
Shall section 2, as amended, carry? Carried.
Section 3. I have a Liberal motion on paragraph 1.1 of section 3 of the Assessment Act. Mr Phillips?
Mr Phillips: I move that subsection 3(1) of the bill be amended by adding the following as a paragraph of section 3 of the Assessment Act:
"1.1 Property held in trust for a band or body of Indians."
The Chair: Comments or questions?
Mr Phillips: Yes. By the way, this language is identical to the language that exists currently in the Assessment Act. We have just simply moved that that same language be put back in the Assessment Act. I'd prefer the words "first nations" over "Indians," but that's the language that was used in the Assessment Act.
You may recall that the first nations came before us and outlined, I think, eight or nine major initiatives the government has taken since elected that have the effect of substantially negatively affecting our first nations. This is the ninth one of them and I think it is a punitive measure. It looks like it's designed to further provoke relationships between the first nations and the government of Ontario.
It is something where there is not a substantial amount of money involved for the province but a huge amount of goodwill lost with our first nations by taking this step. It seems to me that if the government wants to make a move like this, it should be done after consultation and as a part of a broader look at dealing with our first nations. I see this, frankly, as a mean-spirited move by the government to simply further provoke an already uneasy situation with the first nations.
I don't know why the government is doing it. I think it's completely unnecessary. This restores it to the way that it currently exists and allows the government to conduct some meaningful negotiations with the first nations.
Mr Pouliot: We echo the sentiment and we will be supporting the Liberal motion. We too would have preferred the wording to reflect the reality by way of "first nation" in lieu if "Indians." What's at stake here is a mere $125,000, a mere bagatelle, trivia, an afterthought in financial matters, but much more important, as my friend and colleague the Liberal critic has mentioned, is the goodwill. It's what you're doing to our first Canadians that represents no value whatsoever.
There again, and the words aren't too strong, this government is not a friend of first nations. It has a great deal of difficulty acquiescing to the long-standing tradition. For as long as the sun shines and the river flows, they will remind us of the contribution that is still here; here first, the constitutional guarantees, but then the government by design just brushes them aside. There again, it is hardly a surprise. They don't have, in French we say, un droit de cité, for they are not very rich. They represent the poorest people in our great land. The $125,000 is your language; tradition, constitutional guarantees and the right to prosper is theirs. I will be supporting the Liberal motion and I congratulate them on their courageous attempt to have the bill amended.
Mr Grimmett: I won't be able to support the proposed amendment. I want to remind the members that this legislation is all about bringing more fairness and equity to the assessment system. If this amendment were passed, it would overturn a provision in Bill 149 designed to restore a level playing field to the property tax system.
This amendment would make Ontario the only jurisdiction in Canada that does not restrict its property tax exemption to reserve lands. Allowing this amendment will give unfair advantage to new off-reserve properties over other similar taxable properties. I want to remind the members as well that the current section in Bill 149 allows the grandparenting of those properties already exempt. I will not be supporting the amendment.
The Chair: Further comments, questions? Shall the amendment carry?
Mr Phillips: Recorded vote.
Ayes
Phillips, Pouliot.
Nays
Barrett, Grimmett, Rollins, Wettlaufer.
The Chair: The amendment is defeated. We now go to the government motion, which is number 3. Mr Grimmett, please.
Mr Grimmett: I move that paragraph 3 of section 3 of the Assessment Act, as set out in subsection 3(1) of the bill, be amended by striking out "including a churchyard" in the second and third lines and substituting "and a churchyard, cemetery or burying ground."
If I could just provide some background, the suggested amendment would clarify that churchyards, cemeteries or burial grounds owned by a church or religious organizations or leased to it by another church or religious organization is exempt from taxation.
The Chair: Further comments or questions? Shall the amendment carry? The amendment is carried.
We now go to a government motion, which is number 4 in your package. Mr Grimmett, please.
Mr Grimmett: I move that paragraph 4 of section 3 of the Assessment Act, as set out in subsection 3(1) of the bill, be amended by striking out "if the owner of the land is exempt from taxation" at the end and substituting "if the land would be exempt from taxation if it was occupied by the owner."
The explanation for that is that the previous wording has suggested that owners are exempt but in fact the amendment clarifies that it is the land that is meant to be exempt.
The Chair: Any further comments or questions? Shall the amendment carry? The amendment is carried. We now go to a government motion, which is number 5 in your package.
Mr Grimmett: I move that paragraph 5 of section 3 of the Assessment Act, as set out in subsection 3(1) of the bill, be amended by striking out "if the owner of the land is exempt from taxation" at the end of the first sentence and substituting "if the land would be exempt from taxation if it was occupied by the owner."
Again, we're clarifying that it is the land that is exempt and not the owner.
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The Chair: Comments or questions? Shall the amendment carry? It is carried.
We will now go to government motion number 6 in your package.
Mr Grimmett: I move that subparagraph 12.iii of section 3 of the Assessment Act, as set out in subsection 3(1) of the bill, be struck out and the following substituted:
"iii. any charitable, non-profit philanthropic corporation organized for the relief of the poor if the corporation is supported in part by public funds."
To clarify, there's no change to the original intent of the paragraph, but from the discussion that we had in public hearings, we want to make sure that the current exemption regarding corporations is very clear on which corporations are in fact exempt.
The Chair: Further comments or questions?
Mr Pouliot: Mr Grimmett, I need your help. I'm seeking clarification of "any charitable, non-profit, philanthropic corporation organized for the relief of the poor." Your focus is that their reason for being is the relief of the poor. What's the difference, therefore, between any charitable, non-profit -- you give yourself some qualities that are wanting. "Any charitable, non-profit corporation"; why "philanthropic"?
Mr Grimmett: Can I have Mr Sholtack provide us with a better legal explanation for this.
Mr Sholtack: "Philanthropic" has traditionally been included in the exemption. "Philanthropic" is a general word meaning relief of mankind, sort of a broad concept that really doesn't provide any restriction. It's fairly general in its intent.
Mr Pouliot: So is your answer, with high respect. If an ordinary citizen was to give $100, that is an act of charity, but if Magna International, through Mr Stronach, gives $1 million, are we getting closer to philanthropic in the first instance?
Mr Sholtack: It would still need to be charitable, of course, the organization. We're talking about the organization itself rather than the person who gives the money. So the organization itself has to be charitable, non-profit and philanthropic. These are traditional words that have been used to describe the types of organizations that have been exempt under this paragraph for many decades.
The Chair: Further comments or questions? Shall the amendment carry? Carried.
We now go to government motion number 7 in your package.
Mr Grimmett: I move that paragraph 26 of section 3 of the Assessment Act, as set out in subsection 3(2) of the bill, be struck out and the following substituted:
"Land used as a theatre that contains fewer than 1,000 seats and that is used on a total of at least 183 days in the taxation year to present live performances of drama, comedy, music or dance, but not including land used as a dinner theatre, nightclub, tavern, cocktail lounge, bar, striptease club or similar establishment. This paragraph does not apply to a building that was converted to a theatre unless the conversion involved modifications to the building."
This is another example of an amendment that would remove the ministerial regulatory power because the definition of eligible small theatres is going to be right in the legislation.
The Chair: Comments or questions?
Mr Phillips: Just a question on why it has to be used at least 183 days.
Mr Grimmett: Could I ask someone from the ministry to provide a better explanation than I can. Mr Wong?
Mr Wong: The reason why it is for 183 days is to ensure that these theatres are permanent in nature, not the one that is put up and just puts on one or two days of shows per year. It's the summer theatres that put on shows that are not used for other profit-type organizations; are not used, for instance, for the non-play-type organizations. If you use it for doing not theatrical work but use it for doing seminars, that's not counted as your criteria.
Mr Phillips: So summer theatre could be eliminated with this, if it's just a summer theatre.
Mr Sholtack: It is our interpretation that as long as the theatre was not used for any other purposes when it was dark, it would still qualify.
Mr Phillips: But it has to be used a total of at least 183 days.
Mr Sholtack: Right.
Mr Phillips: So summer theatre that went 150 days wouldn't be eligible.
Mr Sholtack: It depends on what it was the other part of the year.
Mr Phillips: Closed.
Mr Sholtack: The intent of this provision is that we get true theatres and not something that may be used only for a few months as a theatre but for the rest of the year as something else. The words "at least 183 days" are there in lieu of other kinds of descriptions, such as "predominantly" or "primarily" or "mainly." This provides a little more specificity for what we need.
Mr Phillips: It's a mistake, but okay.
Mr Pouliot: "But not including land used as a dinner theatre, nightclub, tavern, cocktail lounge, bar" etc: If the cocktail lounge is in the lobby, is that okay?
Mr Sholtack: The exclusions are for things that are not traditionally theatres. I guess they could have entertainment, but this is not theatre-type entertainment so they are excluded from the exemption.
Mr Pouliot: But suppose someone fits the bill, but at pre-performance and intermission time they mostly have now sort of a cocktail lounge-bar situation. In fact, in some cases you can buy the ticket for half-time; that way you beat the lineup. If they are less than 1,000 seats, if they satisfy the spirit, wording and intent of the bill, they would still qualify; they won't have to close their little building?
Mr Sholtack: No. I don't think the fact that they serve liquor during the intermission would turn the land into a cocktail lounge. "Cocktail lounge" has a fairly specific meaning as an ongoing place where people drink. Just getting a drink in intermission -- because their predominant use is for providing performances. So the answer is no, just because they serve liquor and other drinks during an intermission of a performance, that will not disqualify them. They'll still be eligible if that's all they do.
Dinner theatres are designed to entertain plus operate as a restaurant. People are fed while there's entertainment. Those organizations are not intended to be benefited because they're primarily providing food and liquor in a restaurant setting and having a performance done as part of that. We're trying to benefit true theatres that are organized to provide performances only.
Mr Pouliot: I thank you. Chair, if I may go from the technical to the political, I find it ironic that the present administration has slashed, cut, in fact gutted the arts budget and yet they are imposing their will on municipalities, and municipalities do not have a choice here, for it has been decreed that they shall enact this legislation. For the theatre, I'm fully sympathetic. It's well intended. But you have a typical case of a government cutting the budget, which is the transfers from the provincial funds to the theatre groups, the arts groups, and yet it doesn't cost them a penny to impose, by legislation, a situation where the municipalities can ill afford it.
It's one more example of the cheap shell game being played by this government. On the one hand you slash the budget and on the other hand you pass legislation to force the municipalities to give them the money, what you should have been doing in the first place. It's another one of your callous and cynical, sinister ploys. No wonder we're against the whole bill. It's so thinly veiled. People can see what's happening.
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The Chair: Further comments and questions?
Mr Grimmett: I just want to clarify a point there. Mr Sholtack has said that the purpose of the policy decision around this amendment was to make sure that true theatres benefit from the exemption. We don't want this exemption to spread more broadly than that. The 183 days includes what people in the business call dark time. We heard from a number of presenters who indicated they would have a show on for five or six weeks, then they would have a period of dark time, when the theatre is effectively closed down but inside the theatre there continue to be people working on a new production, either putting up new props or what have you.
This is designed to benefit those properties that are true theatres. The 183-day rule provides some clarity and an opportunity for those people to plan so they know what their overhead is going to be.
Mr Phillips: So if they're rehearsing for 50 days, that's part of the 183 days.
Mr Grimmett: That's my understanding of what dark time is. Part of the 183 days is to include dark time.
The Chair: Further comments or questions?
Shall the motion carry? It's carried.
We're now going to government motion 8 in your package.
Mr Grimmett: Before I read the motion, I wonder if we could have some discussion among the caucuses present. I'm requesting unanimous consent from all the members of the committee that for the purpose of dealing with this particular amendment, we permit ourselves to waive the rules for the purpose of deleting from this amendment some wording which -- I'll provide an explanation that I have received from the ministry.
When the Canadian Opera Company came before us, they expressed their concern about their property. There was a lot of sympathetic discussion. We would like to provide them with some relief through this amendment.
What happened was that the ministry people, when drafting the amendment, called the Canadian Opera Company and discussed the wording in the amendment with their counsel. The wording that we would ask unanimous consent to delete, if you have the amendment in front of you, is about two thirds of the way down where it says, "to which part III of the Corporations Act applies."
That wording was approved initially, I understand -- I didn't have the discussion on the phone, so I'm only hearing this second hand, but I understand it's correct -- was approved by counsel for the Canadian Opera Company. The proposed amendment then went forward, was tabled, the time for tabling motions passed and then the ministry again heard from the Canadian Opera Company, who advised that in fact the Canadian Opera Company was not incorporated under the Corporations Act, but it was incorporated under federal legislation.
What I'm saying to my fellow members is that I believe deleting that wording from this amendment will fall under the exception to the rules allowing for unanimous consent to change technical or drafting errors. I would think there is enough goodwill among us that we recognize that the purpose of the amendment is to allow the Canadian Opera Company to fall within the exemptions in this legislation.
I should be fair in saying that in asking some of the clerks about this, they may not necessarily agree with my interpretation of the rules, so I'm just putting everybody on notice that this is an opportunity for us to have a discussion about just what we're allowed to do under unanimous consent.
The Chair: From the chair, I will allow a discussion. I would like to hear comments and questions, but I'd like to tell you what my dilemma is. The time allocation motion asks that all proposed amendments be tabled with the clerk by 5 pm on the fifth calendar day following the final day of consideration, which has passed. So the question is, is this an amendment which is substantive to the original amendment which Mr Grimmett is proposing? There are precedents of amendments which are editorial. That's the question that I have to decide. I would like to hear comments and questions.
Mr Phillips: We don't have any difficulty with the proposed change. I accept at face value that it was a drafting error, so our caucus won't object to unanimous agreement to modify it.
I frankly can't comment on the other issue, which is, just what are we permitted to do? I frankly don't know how to resolve that, because I'm no expert on it. I accept that there's some line that's drawn somewhere, but we're anxious to accommodate the opera organization. That happens to be why I was a little bit late; I was talking to a person who was concerned about it. So we have no difficulty giving approval to proceed with the amendment. On the broader issue you'll have to look for some advice somewhere else.
Mr Pouliot: Actually, it's not this difficult, Mr Chair, and yes, I will resist the lure, the temptation. Simply put, through my caucus, I'm not here to help you in any possible way. I will not think less of myself if I say no to this. But I'm torn. It so happens that as much as I hate what is being done here, I love the opera company and I find myself supporting it. We too will be seeking unanimous consent. That's not the intent. Our intent is when it hits the marketplace. But the Canadian Opera Company came here, they took their time and we've all benefited and will continue to benefit. They need a gentle hand, so we will be supporting the government's request for unanimous consent.
Mr Wettlaufer: Mr Chair, it's not a matter of whether or not we support the opera company. I think your initial statement is what we have to address, and that is whether this is a substantive motion or whether it's an editorial motion. What we have to say is, if we delete the words "to which part III of the Corporations Act applies," are they editorial in nature or are they substantive? I think we have to address what was the intent of the initial amendment.
In looking at it, the words "part III of the Corporations Act" are somewhat exclusive, yet they are not necessarily affecting the total bill that much, they're not affecting the amendment that much. I believe they could be construed as being editorial, that the amendment could be editorial. That would be my opinion, that we are dealing with an editorial motion.
Mr Pouliot: Yes, I too would take it in that tone, that it is indeed editorial. But this has nothing to do with the 1,000 seats in your first line, because our indication is that it would be somewhat above 2,000? There's no conflict here?
Interjection: No.
Mr Pouliot: Okay.
Mr Grimmett: Just to assist, I wonder if I could pass on a little information to the committee on what happened at another committee on a somewhat similar issue. This is Hansard from Thursday, 28 August, 1997.
Mr Phillips: Haven't you already won?
Mr Grimmett: Maybe we have, but I'll just pass this on. In that committee, the Chair looked at a similar request and in discussing the issue indicated that where it is a drafting error:
"Errors affect all three caucuses through no fault of individual members of those caucuses. There's no question that each caucus filed their amendments at the scheduled time and was not late in filing those amendments. I'm proposing that these errors be rectified by seeking unanimous consent to substitute the amendments that were drafted incorrectly with a properly drafted package. I understand that these new amendments do not contain anything that was not intended in the improperly drafted amendments previously distributed."
I think that is the flavour of the same thing that's happening today. The parties are agreed that we're not trying to change the intention at all. We're simply trying to fit the Canadian Opera Company into the relief that this act provides.
Mr Phillips: Stop selling. You're going to get in trouble.
The Chair: Further comments or questions?
Mr Pouliot: I don't want this to be a war, but I've been here for 13 years. Mr Grimmett, with respect, that's a bit of a stretch in terms of a drafting error. It is one of omission and you want to have them inclusive. We're all in support and you were doing well, but to quote from precedent -- you're a lawyer by profession. You're also a politician by profession, oh my God. Surely you can do better. That was a stretch, but we accept your explanation.
The Chair: Further comments or questions?
Mr Wettlaufer: Sign it. Close the deal.
Mr Phillips: It's got white walls. Do you want the white walls?
The Chair: There will be a five-minute recess.
The committee recessed from 1102 to 1112.
The Chair: The committee is back in session. Mr Grimmett has received unanimous consent to take out eight words of his government motion number 8 and has received it. My ruling is that this an editorial change.
Mr Grimmett: Thank you, Mr Chair. Just to explain what I'll do here now, I'm going to be moving the motion that you have before you on page 8, or motion 8, and I'm going to leave out the wording that we've discussed.
I move that section 3 of the bill be amended by adding the following subsection:
"(2.1) Section 3 of the act, as amended by the Statutes of Ontario, 1997, chapter 5, section 4, is amended by adding the following paragraph:
"27. Land used as a theatre that contains 1,000 seats or more and that is used to present, on a total of at least 183 days in the taxation year, live performances of drama, comedy, music or dance, including opera or ballet, that are not presented with the intention of generating profit. This paragraph applies only if the theatre is owned and operated by a non-profit corporation without share capital. This paragraph does not apply to land used as a dinner theatre, nightclub, tavern, cocktail lounge, bar, striptease club or similar establishment."
The Chair: Comments and questions. Mr Grimmett, did you want to add anything further?
Mr Phillips: On a different part of that, there was a discussion with the Hummingbird, Roy Thomson Hall, Massey Hall and the North York Centre about their concerns on the 183 days. I'm not sure whether it's this section that applies to them or not. They were concerned that, as I recall it, if they exceeded 183 days they were subject to some tax liability. I'm not sure whether it's this section or another section.
Mr Grimmett: If I could comment on that, Mr Chair, this section is not the one that deals with that issue.
Mr Phillips: Okay. Thank you.
The Chair: Further comments or questions? Shall government motion number 8, with its editorial change, be carried? Carried.
We will now move to a Liberal motion. It's number 9 in your kit.
Mr Phillips: This was designed to accomplish what the government motion accomplished so we will withdraw this amendment.
The Chair: We will now move to Liberal motion number 10 in your package.
Mr Phillips: I move that subsection 3(3) of the bill be amended by adding the following as a subsection of section 3 of the Assessment Act:
"Charities renting from churches, charities, etc
"(1.1) Land that would be exempt under paragraph 11 or 12 of subsection (1) if the entity that uses and occupies the land also owned it, is exempt from taxation if the land is owned by a church or religious organization or by an entity described in paragraph 11 or 12 of subsection (1)."
By way of explanation, you may recall an organization from Ottawa that was in to see us -- Daybreak is my recollection of its name -- where they performed worthwhile community activities, halfway house sort of activities, and it seems they were caught between the cracks because they were renting property from a church and had tax liability as a result of that. This is designed to correct what I think is a mistake in the legislation, where charitable groups like Daybreak are renting from charitable groups, to prevent tax liabilities from being incurred.
Mr Pouliot: I recall vividly and was made more aware of the good deeds of the presenter, one who had travelled by car from Ottawa, again at his own expense for they don't have any money. From time to time, we all agree that you fall through the cracks. It was never intended to hit Daybreak. They're minute. They exist by necessity. They really represent what is best, often forgotten in our busy life. The little brochure, the humble brochure illustrated what has happened. This is not an organization that is there by choice; it's a group of good Samaritans putting their best foot forward and they would be hurt if by way of omission, because of political posturing, they would become victims by ricochet. I'm somewhat surprised that someone, or they themselves, noticed the intricacies in the bill. But it serves no purpose to omit them, and I certainly agree that it should be through the Liberal motion that their good deeds be recognized. I will support the amendment.
Mr Grimmett: I was here as well and listened to the presentation made by Daybreak. Unfortunately, I'm not prepared to support the motion at this time. The government has looked into this issue and we feel that if this motion passed we would create a lot of problems, because it could result in unfair tax treatment when non-profit corporations located in taxable premises pay tax and their non-profit corporate brothers occupying church lands or other lands owned by religious organizations don't pay tax. We feel this would expand the exemptions too wide so we're not prepared to support the amendment.
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Mr Pouliot: For what it's worth, God damn it, we really don't tread the same bloody circles. In my humble way I probably have -- this is hard to say. You're not the poorest of the poor. I don't know, but by way of circumstances and good accounting, I can hold myself in good stead with any one of you. What is to be gained by hitting Daybreak? Somebody has decreed that if we do it for them -- and then 10 minutes ago, with the help of a delegation, "Oh yes, we did, we sought unanimous consent." The clerks at the table with counsel recessed and came back and made the appropriate amendments.
Daybreak is not going to be back. They're going to get it right in the neck. They don't have the kind of resources or pressures to apply, so brush them off with legalese and justify our conscience, "If we do it for them we will have to do it for everybody else." No, you don't have to do it for everybody else. Daybreak came here with all the sincerity at their command. They are a voice, a very small one. Their work is not recognized, they're not going to get medals for it. It's their daily bread. The people are challenged, they go to them. They are a victim of circumstances just as often as they are a victim and have to wear and bear their condition. They have, with a few sticks of furniture, the most humble of shelter -- well, good luck. I mean, really, if this is the human dimension, a social conscience, that's where we certainly differ. I have difficulties with that.
The Chair: Further comments or questions?
Mr Phillips: A recorded vote.
Ayes
Phillips, Pouliot.
Nays
Barrett, Grimmett, Rollins, Wettlaufer.
The Chair: We'll now move to government motion number.
Mr Grimmett: I move that the definition of "land used for the purposes of the bridge or tunnel" in subsection 3(3) of the Assessment Act, as set out in subsection 3(3) of the bill, be struck out and the following substituted:
"'land used for the purposes of the bridge or tunnel' includes land at the end of the bridge or tunnel used in connection with the bridge or tunnel, including duty-free stores."
Just an explanation: The previous wording was too broad. It's felt that this amendment clarifies that the land at the end of the bridge or tunnel, including duty-free shops, will be considered to be land used in connection with the bridge or tunnel and assessed accordingly. These entities are subject to municipal tax but are not subject to education tax.
The Chair: Comments or questions? Shall the motion carry? The motion is carried.
Shall section 3, as amended, carry? Section 3 is carried.
I have no proposed amendments to section 4. Shall section 4 carry? It's carried.
Section 5: I have a government motion, number 12 in your package.
Mr Grimmett: I move that paragraph 1 of subsection 8(1) of the Assessment Act, as set out in section 5 of the bill, be amended by striking out "One or two subclasses" in the first line and substituting "Up to three subclasses."
By way of explanation, this provision amends the bill to create up to three subclasses of farm land awaiting development rather than one or two subclasses.
The Chair: Comments or questions? Shall the amendment carry? Carried.
Shall section 5, as amended, carry? Carried.
I have no proposed amendments to sections 6 to 8. Shall sections 6 to 8 carry? Carried.
Section 9: I have a government motion, number 13 in your package.
Mr Grimmett: I move that the bill be amended by adding the following section:
"9.1 The act is amended by adding the following section:
"Reduced assessment for farm land awaiting development
"19.4(1) The assessed value of property in the subclasses prescribed under paragraph 1 of subsection 8(1) shall be reduced by the percentage prescribed by the minister, if any.
"Phasing out by municipalities
"(2) The council of a municipality may, by bylaw, decrease the reduction under subsection (1) by the number of percentage points prescribed by the minister per taxation year subject to the following:
"1. A decrease of the reduction applies to every taxation year after the taxation year with respect to which the decrease first applied.
"2. To apply with respect to a taxation year, a bylaw must be passed before November 1 of the previous year. As of November 1 of the previous year the decrease is irrevocable.
"3. No decrease of the reduction may be made with respect to the 1998 taxation year.
"(3) In this section,
"'municipality' means a municipality, including a county, a regional or district municipality or the county of Oxford, the council of which is required under section 363 of the Municipal Act to determine tax ratios."
If I can provide some explanation: This provision permits the minister to prescribe a percentage reduction to the assessed value of property in the farm lands awaiting development subclasses. The municipalities may, by bylaw, phase out the above reduction by the percentage adjustment for each taxation year as prescribed by the minister.
Mr Phillips: We had quite a few delegations in expressing concern about what would happen to taxation on farm land awaiting development. Does this answer their concerns?
Mr Grimmett: There are other proposed amendments that we will be putting forward that will deal with it. This is one of the attempts to address some of the concerns raised. Perhaps I could ask Mr Wong to comment on that.
Mr Wong: This will allow further discussion with the minister pertaining to farm land awaiting development so that the discussion can flow and allow this type of usage, reducing assessment as one of the options.
Mr Grimmett: You may recall, Mr Phillips, in my opening remarks I indicated that we would continue to have discussions with the parties that wanted to discuss this issue with us. This provides an option to the minister.
Mr Phillips: Will that give him authority to make the decisions as opposed to requiring legislative approval?
Mr Grimmett: Yes.
Mr Phillips: So it's just more power for the minister. Why don't we just have a simple bill that says, "The minister may decide everything"? Wouldn't that have been a lot simpler than going through all of this? Maybe that's Mr Grimmett -- he or she, he right now -- this will all be in the minister's hands so the democratically elected people needn't worry much about it any longer. Is that the intent of the motion?
Mr Grimmett: I think, Mr Phillips, the intention is, with this proposed amendment and other proposed amendments, we're trying to deal with those issues affecting farm land that we feel we've reached decision on, but there are a number of matters where we want to continue to have discussions with the community affected. We're quite open to the suggestions that will come forward, but we realize that from the discussions we've had in the committee, there need to be further discussions.
Mr Phillips: This is obscene. All you're doing is saying, "Give the minister the power to make all these decisions." You may like it now -- I don't know how the Conservative back bench sit still for this nonsense. It is beyond me why would you ever agree to this. I'll tell you what it is: The government doesn't have a damn idea what the hell it's doing here, so says, "All right, we can't figure this out, we'll let the minister make these decisions." It's totally obscene. I hardly know where to begin with it.
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Mr Pouliot: I'm going to tell you, you have 126,000 out, and again, as a group, the most educated very likely -- 126,000, the great majority, 90%, with degrees, people who can count. You've placed them in the kind of dilemma that we're in. But you're the big guys, you're strong. In their case there's a bully in the school yard, Mike Harris.
Another example with your amendment, "The minister shall." Give your head a shake. Get a reality check here. Get real. Snap out of it. The minister will spell out the percentage. I thought you wanted to get out of people's faces, you wanted to give the municipalities more autonomy, more decision-making.
I heard Leach in front of AMO. They represent 95% of the populace through the Association of Municipalities of Ontario. Some gave him a standing ovation, but that was the first, because they believed; they had to believe somebody at some time. Now you're saying that Commissar Eves has all the power. He dictates to municipalities. Then you go on to say, "No decrease of the reduction may be made with respect to the 1998 taxation year." He sets the rate and you're stuck before at least 1999, because your bylaw has to reflect the previous year, November 1.
There's an election coming, your fiscal year starts in January, and you're saying, "Well, when everything is in place, nothing in 1998." I guess you can pass the bylaw and start acting in 1999.
But the meaning of it is, what is the minister prepared to do? We don't know that. If in doubt, you vote no. How can you support something that you don't know? Not with your track record. I wish I could. Really, the opposition has been violated so often here that although we search long and hard to find ways to accommodate what you're trying to put forward, we find ourselves unable to do that. It smacks of arrogance. That's why you bring out the worst in people.
I want to go on record to thank Mike Harris and the group, because never in the annals of Ontario has any one person or a group of people been able to organize and mobilize as many people in such a short time. Mike Harris, we owe you a vote of thanks. You have mobilized people. You have made the best kind of organization possible simply because of your bully tactics, nothing short of that. Democracy has almost ceased to exist. What's the next step? Arrests at 3 o'clock in the morning? The right to assemble? Citizens will begin to disappear. We will no longer see them around town.
Put the brakes on. This amendment tells us nothing except it gives the minister -- well, it started with Bill 26 -- all the power possible, this kind of vortex, bag-of-snakes kind of trick that doesn't belong here. You're not telling us anything. What's going on, counsel? Do you know or do you just serve the mantra? To you maybe it's like you've served others, or you close your eyes as you've done so many times before.
My colleague finds this obscene. I find it repulsive in the extreme that you would have the audacity -- the back bench of course will shuffle paper and pretend that they're reading. They won't be around the next time, but that's not the case; the citizens will be around. Amazing, and it gets worse.
The Chair: Further comments or questions? Shall the new section 9.1 carry? Carried.
Shall section 9 carry? Carried.
I have no proposed amendments to section 10. Shall section 10 carry? Carried.
On section 11: I have a government motion and a Liberal motion. I'd like to hear from the government first and we will not vote on that motion until I hear the Liberal motion because the Liberal motion amends the government motion, so I'll hold on the vote. We'll start with number 14 in your package, a government motion.
Mr Grimmett: I move that subsections 27.1(1) and (2) of the Assessment Act, as set out in section 11 of the bill, be struck out and the following substituted:
"Definition
"(1) In this section,
"'large commercial theatre' means, in respect of a taxation year, land or any portion of land that is used as a theatre, if,
"(a) the theatre contains 1,000 or more seats,
"(b) the theatre is used, other than by a charitable or non-profit organization, on a total of at least 183 days in the taxation year to present live performances with the intention of generating a profit, and
"(c) when the theatre is used, other than by a charitable or non-profit organization, to present live performances with the intention of generating a profit, no food or beverages may be consumed in the area in which people view the performances and any food or beverage service provided by the theatre is restricted to lobby areas.
"Large commercial theatres in Toronto
"(2) For each taxation year, the owner of a large commercial theatre that is located in the city of Toronto and that is not liable to taxation shall pay the city of Toronto the amount calculated in accordance with the following formula:
"P = (T x F) - S
"where,
"P = the amount of the payment,
"T = the taxes for municipal purposes that would be payable if the theatre were liable to taxation,
"F = the fraction that represents the proportion of the taxation year during which the theatre is used, other than by a charitable or non-profit organization, to present live performances of productions presented with the intention of generating a profit,
"S = any amount that a bylaw under subsection (2.1) permits the owner to deduct from the payment.
"Subsidy
"(2.1) The council of the city of Toronto may, by bylaw, permit an owner to deduct from a payment under subsection (2) an amount determined in accordance with the bylaw that represents all or a portion of the revenue from the use of the theatre, other than by a charitable or non-profit organization, to present live performances of productions presented with the intention of generating a profit, that is used to fund or financially support not-for-profit activities that take place on the same parcel of land or on another parcel of land in Ontario owned by the owner.
"City must pass a bylaw
"(2.2) The council of the city of Toronto shall pass a bylaw under subsection (2.1).
"When payable
"(2.3) Payments required under this section in respect of a taxation year shall be made not later than March 31 in the year following the taxation year."
I'd like to provide some explanatory comments. The proposed amendment removes three regulatory powers concerning payments in lieu of taxes by large commercial theatres which are not liable for taxation in the new city of Toronto. In its place, the amendment legislates that those large theatres not liable to taxation which are predominantly used to stage for-profit commercial live productions shall make prorated payments in lieu of taxes. Municipalities shall reduce the payments in lieu by the amount of any subsidy, as specified by bylaw, paid by the for-profit production to support other not-for-profit activities which take place on the same parcel of land or another parcel of land in Ontario owned by the large commercial theatre.
In response to concerns from the theatre industry as well as resolutions passed by Metro Toronto highlighting the unique nature of the not-for-profit theatre industry and the importance of heritage properties, the government has decided to require that a bylaw be passed by the new city of Toronto that will provide for the reduction of payments in lieu if it can be demonstrated that profitable productions are used to cross-subsidize not-for-profit activities.
Mr Phillips: Does the 183 days include what are called "dark days"? If there's a rehearsal going on, does it include that?
Mr Grimmett: I wonder if I could ask Mr Sholtack to comment on that. The dark days provision applies in this amendment as well.
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Mr Sholtack: To be consistent, the provisions are identical. It is contemplated that a public theatre would put on for-profit, plus they could put on not-for-profit activities, so the dark time would be apportioned between the two activities.
This is sort of a different issue than the earlier issue we talked about with exempt theatres, because these are our theatres that are used throughout the year to present performances. What is different is that some of them are not-for-profit performances and others are for-profit performances, so there would have to be an allocation of the dark time between the two to determine initially whether they are taxable or whether they are subject to pay the PILs and subsequently what proportion they have to pay.
The Chair: Further comments or questions?
I'd like to go to the Liberal motion, number 15 in your package.
Mr Phillips: Yes, it would amend the motion that was just read.
I move that the government motion striking out and replacing subsections 27.1(1) and (2) of the Assessment Act be amended by striking out the definition of "S" at the end of subsection (2), as set out in the motion, and by striking out subsection (2.1), as set out in the motion, and substituting the following:
"'S' equals any amount the owner may deduct from the payments under subsection (2.1).
"Subsidy
"(2.1) An owner may deduct from a payment under subsection (2) an amount that represents the portion of the theatre's gross revenues from performances or productions described in clause (b) of the definition of 'large commercial theatre' in subsection (1) that is used to fund or financially support other performances or not-for-profit activities that are undertaken by the owner."
By way of explanation, this puts in the legislation the entitlement of the subsidy rather than the operators of the main three theatres, the Hummingbird theatre, Roy Thomson Hall and Massey Hall, which are sort of one legal entity, I gather, and the North York Centre. It puts into legislation the definition of the subsidy rather than relying on the city of Toronto council.
You may remember that there was a group in that represented the three theatres indicating that they have somehow or other got caught in the whirlwind of activity here. Two of those organizations have really pulled themselves off the mat. The Hummingbird, which was formerly the O'Keefe Centre, and Roy Thomson Hall and Massey Hall, both of whom have had financial difficulties in the past, have finally gotten both those organizations on to a relatively solid foundation now and they're suddenly faced with paying new taxes. That could destabilize those organizations that have contributed and continue to contribute a lot to Ontario.
This would, as I say, put in the legislation the definition of the subsidy and not require them to have to make their case on an annual basis. For anybody who does long-term planning, you can imagine how destabilizing it can be if each year they're wondering whether in fact they will be into paying substantial property taxes or not.
Mr Grimmett: My preference would be to have the amendment proposed in government motion 14 carry unamended. The proposed motion, number 15, would take away the discretion from the city of Toronto to tailor its bylaw to reduce those payments in lieu.
I should point out that there is a fourth theatre, I believe, affected by both discussions, and that is the Elgin Theatre. We want to make sure the city of Toronto deals with this issue, that they have the discretion to deal with it and that when they do, they deal with it in a way that's fair to all of the theatres.
Mr Phillips: Just by way of comment, I was curious with some of the comments from the cultural communities patting the government on the back for doing what they've been doing. In reality, what the Harris government has done is absolutely slash financial support for the cultural community. We heard one organization that had I think $2.5 million slashed. Then they've turned around and said, "But we will help you by cutting off, by demanding, forcing municipalities to cut your property taxes." That's at the same time as the government has dumped social housing, social assistance, child care, ambulance service, health all on property taxes.
The government had no hesitation in doing that. There's no flexibility there. It was: "You must do it. You have no choice but to do it. We are ordering you to cut your property tax to small theatres." What we're trying to do with this motion is to level the playing field. If the government is going to do that, you can't suck and blow on this. You can't say, "We are going to order municipalities to cut property taxes to those theatres, but to those theatres we're going to leave the flexibility in the municipality." You're caught in your inconsistencies.
It must be difficult to argue, as you have: "We want to leave some flexibility for the municipalities." You can't, as I say, suck and blow. You've slashed support for them and now you are adding property taxes to these -- I thought it was three, now I gather it's four -- theatre groups. You run the risk of destabilizing those organizations because currently they are tax-exempt.
The Chair: Further comments or questions? We are voting first on the Liberal motion, number 15.
Mr Phillips: Recorded vote.
Ayes
Phillips, Pouliot.
Nays
Barrett, Grimmett, Rollins, Wettlaufer.
The Chair: We will now vote on government motion number 14. Shall the amendment carry? Carried.
Shall section 11, as amended, carry? Carried.
I have no proposed amendments to sections 12 through 15. Shall sections 12 through 15 carry? Carried.
On section 16: I have a government motion, number 16 in your package.
Mr Grimmett: I move that subsection 33(5) of the Assessment Act, as set out in section 16 of the bill, be amended by striking out "and preventing the land from ceasing to be such land was in the control of the owner" in the second, third and fourth lines.
By way of explanation, this amendment ensures that when land is no longer under conservation or managed forest, its tax preference ends regardless of whether this was under the owner's control or not.
The Chair: Any comments or questions? Shall the amendment carry? Carried.
Shall section 16, as amended, carry? Carried.
I have no proposed amendments to section 17. Shall section 17 carry? Carried.
On section 18: I have a government motion, number 17 in your package.
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Mr Grimmett: I move that subsection 35(2) of the Assessment Act, as set out in section 18 of the bill, be amended by adding, after "pay" in the second last line, "or reimburse the landlord for."
By way of explanation, the amendment would clarify that a landlord must give a copy of a notice of correction to tenants who pay or reimburse the landlord for all or part of the taxes on the land.
The Chair: Comments or questions? Shall the amendment carry? Carried.
Shall section 18, as amended, carry? Carried.
Section 19: I have a Liberal motion, number 18 in your package.
Mr Phillips: I move that section 19 of the bill be amended by adding the following subsection as a subsection of section 39.1 of the Assessment Act:
"Request by tenant
"(1.1) A tenant of an assessed person who, under the tenant's lease, is required to pay all or part of the taxes on the land may request the assessment commissioner to reconsider the tenant's portion of the assessed person's assessment, including the classification of the land."
By way of explanation, Mr Chair, you may remember that we had I think several groups -- yes, we did have several groups -- in to comment on this. This area will be one of the areas in my judgement where there is going to be a lot of public response and we heard from a group that represented a cross-section of tenants in shopping malls -- I think they were mainly shopping malls -- small tenants, large tenants, who expressed grave concerns that their property taxes are going to be fundamentally changed. Some of them gave us illustrations I think of how much property taxes represented of their total lease cost or total accommodation cost. In some cases they were 60%, 70%. So that's a huge part of their business expense.
As the bill is currently drafted -- currently they do get a good deal of information. I think they said they regard the assessment department as an objective third party that helps to resolve disputes between themselves and their landlords. They expressed real concern that unless the bill requires the assessment to provide them with some information and some way of being able to appeal it, they're going to be unilaterally facing some substantial changes in their business operating costs with no opportunity for dialogue and discussion. I think we're talking about literally tens of thousands of businesses that will be, once this bill is passed, dramatically impacted. The information that I took from their presentation was that the balance of power will shift dramatically to the landlord in their debates.
It's particularly important because, as I say, this is their future. This is a huge part of their operating costs. They are to a very large extent locked into their current location, probably many of them locked into longer-term leases. This is going to change their operating costs dramatically, and their ability to understand the basis on which it was arrived at and to have some influence on whether in fact that was correct will be severely limited by this bill. As I say, it shifts the power dramatically to the landlords and away from the business operators.
That's the intent of this motion: to provide more information to the tenants, to give them an opportunity for some say in it. I hope the government can support this because if we don't, come next July, when all of this finally becomes reality, you're going to face not only some very angry people, but some angry people who feel they've been disadvantaged by the bill.
Mr Pouliot: Most commonsensical. We'll be around next July unless the government decides to go to the people in order to avoid what's coming down the pike. Both opposition parties all along have been saying: "Look, how will this be reflected? What about in the real world? Where are your impact studies?" The answer is almost always the same, "Trust us. Life goes on and we're committed to making it simpler," but no, it's becoming more complex by the day. The degree of uncertainty is real.
I know you have a bias towards certain groups because of your philosophy and you believe that the least interference from any government will benefit the marketplace. You wish to create, and you're sincere, a climate whereby the free enterprise system will prosper. You see them as being catalytic in creating jobs and prosperity, yet when it comes to some of the rules and the letters that you send to yourselves, the legislation, sometimes it paints a different picture.
We have had group after group come here as presenters saying, "I thought you were to do this." The developers were a prime example. In fact we have had no less than, I don't know, maybe 10 people, municipalities and developers' associations, builders, who are saying: "Seize the relationship with one municipality. Divorce yourself from Mayor McCallion because everyone else wishes to have something else." They told you directly: "You are supposed to help us. We voted for you. We go to your fund-raisers. Some of us have bought suits for your Premier, and maybe golf memberships, and so on." They don't seem adverse to doing it again and again and again because it serves everybody's purpose in those circles, but you are penalizing people.
The small commercial, the small industrial gets it in the neck here. When push comes to shove and difficult choices have to made by municipalities, they will not turn to the residential if an opportunity is given to raise money from the commercial and the industrial. Those people are left without protection.
A cynic would say: "Why don't you help the government pass everything? First, it's going to happen anyway. Then don't caution the government, but don't wish them well. Have it pass and when it hits the street, it becomes such a mess." Oh no. We're not inclined that way. We're saying, "Take a little time. Do it this way. Maybe it's better. Consult more with people," but it seems that they've embarked on such an agenda, that they've gone so far, that those messiahs -- I mean, they have the determination of some groups too often heard and read about. They see no danger. God is great and they just push forward with the agenda. People are getting it from all sides. This is one example.
When it hits -- I haven't had an answer from anyone -- how are you going to handle 600,000 appeals, because that's what you're going to get? People in the meantime will be asked to pay taxes. This is winner-takes-all. The rich get richer. There is no capping. The anchor in the mall, the proprietor, the owner, in this case the landlord, takes it all. The small players are at the mercy of your government and they are at the mercy of the landlord. They have no friends.
Those are the people, politically speaking, as crass as it may be, that put their faith in you. They thought they were voting for a good Conservative Party, but you brought along on your coattails, many straight out of the Reform-a-Tory. Now they're stuck with those young ideologues, those little -- the Globe and Mail had the right description over the weekend. I don't remember the exact word. In the final analysis, they are of little consequence. You will eat your young. You will discard them and life will go on, but must you leave such a legacy? It's going to take some time to get rid of you people. You had better get a majority because if you don't get a majority, people like Mr Phillips and myself are not opposed to being compatible. We've done it before and it worked relatively fine.
Anyway, this is yet another example of what you are doing to yourselves. Stop being so masochistic, unless you have ulterior motives. Throw away the whip. There are other ways to express yourselves. This is a contortion. This is a concoction which is ill fated. You're hurting yourself. Why do you like it? Life can be so wonderful. Join in. Why must you be so negative and just concoct these things? What do you do, dim the lights and have a bottle of cheap whisky and scare one another? Halloween is over. Get on with it. I'm surprised that time after time you never learn the lesson.
Mr Chair, we should have a recorded vote on every one of your amendments so we can tell you in the future, "We told you so, and look at what's happening now." I'm really disappointed in what's in front of us.
The Chair: Further comments or questions?
Mr E.J. Douglas Rollins: It is getting close to the lunch-hour and I would like to propose a recess. I am asking for unanimous consent.
The Chair: Agreed? Agreed.
The committee recessed from 1202 to 1307.
The Chair: When we recessed, we were hearing comments and questions on the Liberal motion, which is number 18 in your package. I would like to ask for further comments or questions.
Mr Grimmett: I'll say at the outset that I can't support the Liberal motion, mostly because the reference in the motion to "the tenant's portion of the assessed person's assessment" is problematic. The reform that we're trying to bring about would to some extent hopefully simplify the assessor's job. It's not contemplated that the assessors would continue to in any detailed way set aside each tenant's portion in any type of valuation.
We continue to discuss with the various groups that raised this issue, and it certainly is an issue that needs to be addressed. We have said that we're going to continue to meet with the commercial tenants and owners of commercial and industrial multi-use properties. We want to address their concerns regarding access to assessment information and access to the reconsideration process. The government is currently in the process of considering amendments to existing legislation in the upcoming session of the Legislature to address those concerns.
When we eliminated the business occupancy tax -- the government is moving out of the business of apportioning tax on individual tenants. However, we appreciate the need for access to assessment information. We've indicated in our discussions with tenants that information such as gross square footage, average fair market rents and capitalization rates should be made available, and the government will be considering amendments to permit access to this and other information that is not confidential.
Mr Pouliot: I for one take no pleasure in watching in front of my very eyes a government that self-destructs. I have had for some time some questions, but now I'm certain that in large part you don't know where you're going, you don't know what you're doing. Every turn of phrase indicates that you either will do so by regulation or we recognize that there are further amendments.
Given your doctrinaire attitude, it is so unlike you, it is so unbecoming. It's like humour. In your case, it does not become you in the least. It's a last resort to correct mistakes. Hordes of legal experts, counsel, the best minds from the civil service will not suffice to save you. That's the crux of the matter. You are competent in your individual field, but given the speed at which you are going -- you have no timetable. We would prefer to be here and to say, "Well, the government is doing what it said it would," but not to the point of being obstinate, that has a timetable.
There would have been nothing wrong in your downloading exercise -- I mean, what's the rush here? You wanted to correct what you felt was not appropriate nowadays, but in doing that you're correcting things that are not -- if it's not broken, don't fix it. Some of the things are better left alone because they disturb our daily habitat. It's not a big crisis; let it be. Take the molecules or the atoms out of the convention and address them. What you're doing is you're pushing so far, so much, that you confront yourselves. Now you have to live with it. That's the creation. Thomas Walkom was at it again today, by way of the Toronto Star, saying, "Harris' chickens are coming home to roost."
This is your own making. This is your own design. You are the architect and the engineer of your own demise by attempting to please some at the expense of others. I don't think you mean bad; no, you mean good. It's the same with every bill. You come up with 40 or 50 amendments, and what you can't recuperate, you set up a secondary arbitrage, repêchage, that you pick up through regulation. I'm sorry. You shouldn't have to go through, "Trust us with regulation." Some bills are three pages and the regulation is 18 pages. It should be the other way around. They have to complement one another, but when the intent and the spirit is found the regulation as opposed to the bill, you've missed the boat.
I know I'm sounding repetitious perhaps, but this is error. This is, "Patch here and do this -- oops, I forgot this." Not very professional, not very Tory, not very businesslike. If you ran your individual businesses this way, especially those of you who have aspirations but yet are still quite small, you could not evaluate like this. Your line of credit would be cancelled. You have no business plan. You're ruling by the seat of your pants: not good enough for me as a socialist. As a capitalist, you risk being capitalists without capital. A capitalist without capital on your house is a curse of the highest order; that is, if it's the demise of yourselves, of your beliefs. My God, capitalists without capital: What a dreadful thought. I want to wish you well, but I'm not satisfied with your business plan. You have none.
The Chair: Further comments and questions?
Mr Phillips: You can imagine the frustration if you were on our side. Everything's going to be handled somewhere down the road, somewhere else. Some regulation will tell us what isn't being answered. In this case it's some legislation that isn't even introduced. The House comes back for four weeks and the future of all these often small businesses, not necessarily all small business, hinging on these kind of issues.
The parliamentary assistant just said: "We'll talk to them. We'll try and find some solution. We'll try and put it in legislation. We'll try and get it passed before the end of December." As my colleague said, if this were a business and you were going to the bank for a line of credit, they'd laugh you out of the bank. You wouldn't last five minutes in front of a bank manager with this. They'd say, "You'd better go and get some professional help here," because this is an embarrassment. I don't know how many pages the bill is -- it's not that long -- but there are 35 amendments here. Not only that, but an awful lot of the details are handled in what's called regulation.
I just sort of shake my head at the answers we get. If I were out in the business community I'd be saying: "What in the world are they doing to us? I thought they understood that we can't operate on this level of uncertainty."
I understand that once again the government is going to vote against our motion, but your faces must be red when you do it, because I guarantee you that I'll remind the business community of what happened here.
Mr Pouliot: I hope you realize, by way of a point of order, if I may, that we're sincerely here, Mr Phillips and I, to help all we can.
The Chair: I appreciate your point of order. Thank you.
Any further comments or questions on the amendment? Shall the amendment carry?
Mr Phillips: Recorded vote.
Ayes
Phillips, Pouliot.
Nays
Barrett, Grimmett, Rollins, Wettlaufer.
The Chair: The motion is defeated.
Shall section 19 carry? Carried.
Section 20: The first motion I have is number 19 in your package. It's a Liberal motion.
Mr Phillips: I move that section 20 of the bill be amended by adding the following subsection as a subsection of section 40 of the Assessment Act:
"Last day for complaining for 1998 assessment
"(2.3) Despite subsection (2.1), the last day for complaining with respect to the 1998 taxation year is, for a property, the day that is eight weeks after the day the final notice of demand for 1998 taxes for the property is given."
By way of explanation, this would permit property owners eight weeks to appeal their assessment after they receive their final property tax bill for 1998. It will only be when people get their final tax bill that they'll have any idea at all what's happened to them. I think hardly anyone will understand the impact when they get their assessment notice. It will just be a number on there and you won't know what that really means. When you get your tax bill you'll know, because that's when it's translated.
As I mentioned earlier today, the municipal financial officials indicated to us when we were in public hearings that they do not expect the final tax notices going out -- perhaps at the earliest in June and maybe as late as July. This gives eight weeks after people get their final tax notice to appeal.
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The Chair: Comments or questions?
Mr Pouliot: Through you, with respect, Mr Chairman, to Mr Phillips perhaps, first, how many weeks at present does someone have to appeal the assessment after the assessment has been received by the party?
Mr Grimmett: It's 21 days currently.
Mr Pouliot: Mr Phillips, you would like the 21 days amended to read eight weeks after receiving the assessment notice?
Mr Phillips: No, the final tax bill.
Mr Rollins: Eight weeks after the final tax bill.
Mr Pouliot: Thank you, Mr Rollins. Exactly the point I was making: assessment, the value of one property vis-à-vis another in a vicinity, a certain area. The amendment reads that you must receive your tax notice, which one could argue is foreign, independent, has no relation with the assessment. The mulitiplier, the formula, leads you to that, so I guess you could integrate it this way.
Is it to say -- maybe I am imputing motive here -- that once you get your tax bill, then you will seek recourse under appeal of assessment because you don't like your tax bill? The two are separate here. If you say increase the 21 days, but if you integrate by saying wait till you get your tax bill and then you can appeal your assessment -- I don't see the normal flow here. I find this rather extraordinary because I see them very separate. If you could say 21 days after you get your appeal, doesn't that suffice? That period should be increased too. We're still talking in the same box. But if you're saying the tax bill --
Mr Wettlaufer: That's what he's saying.
Mr Pouliot: I know. My question is to Mr Phillips.
The Chair: Do you want to comment, Mr Phillips?
Mr Phillips: Sure. It will only be when people get their tax bill that they will have any idea at all of what the impact of this assessment is. The fact that the government hasn't given us any impact studies, the fact that none of the municipalities have any idea of how this is all going to net out: I will guarantee you that the anger when people get their tax bill and then find they can't even appeal it will be interesting.
Mr Wettlaufer: I believe it was the Liberal government that brought in market value assessment a number of years ago, and I don't see that they considered it of import that they would change the legislation at that time to permit people to appeal the assessment after they received the tax bill. I personally received my assessment notice under MVA back in 1989 and I only had 21 days to appeal after the assessment was received, not the tax bill. I don't see why it should be any different now than it was then.
Mr Grimmett: I won't be supporting the Liberal motion. When the Ontario fair assessment system comes into effect in 1998, the taxpayer's time for appeal after the return of the assessment roll will be extended from 21 days to 60 days for 1998 and 90 days in subsequent years, so we are addressing the issue of providing more time for people to appeal their assessment.
Mr Phillips: So it is eight weeks right now.
The Chair: Further comments or questions? Shall the amendment carry?
Mr Phillips: Recorded vote, please.
Ayes
Phillips, Pouliot.
Nays
Barrett, Grimmett, Rollins, Wettlaufer.
The Chair: The amendment is defeated. I have another proposed amendment from the government, number 20 in your package.
Mr Grimmett: I move that section 20 of the bill be amended by adding the following subsection:
"(2) Section 40 of the act is amended by adding the following subsection:
"Correction of errors
"(18) If it appears that there are palpable errors in the assessment roll,
"(a) if no alteration of assessed values or classification of land is involved, the board may correct the roll; and
"(b) if alteration of assessed values or classification of land is involved, the board may extend the time for making complaints and direct the assessor to be the complainant."
Just in background, this new subsection is added to allow for correction of palpable or obvious errors in the assessment roll. This technical amendment would allow the Assessment Review Board to change any obvious errors.
Mr Pouliot: Please bear with my reaction if I seem exuberant. I'm really not, but I have the spontaneous choice of whether to cry or to laugh, and I thought maybe the second instance would be preferable. Now you recognize the error of your ways. You confess. You say: "Well, you know, if we make any mistakes, if we screw up, we have an amendment." You bring forth an amendment in anticipation of the many screwups and you say: "With the stroke of a pen, the magician can correct it. There is nothing that has happened, but just in case it does, we want you to have the go-ahead." There is little recourse. "You can do what you wish, Commissar." This is what you are saying here. You say, "We're in charge of the revolution here, the war, the big picture, but Commandante, if there's a sentry at its post, a member of the brigade, with the stroke of a pen, a gesture of the hand, a twist of the wrist, get rid of them." This is really something.
A good producer would have a -- this is slapstick. This is very cheap. This is the precursor to the final act at Yuk Yuk's as it's about to leave town and to close shop.
Laughter.
Mr Pouliot: Even children will not laugh at this. This is bad, bad, bad stuff. I mean, Christopher Columbus: "if no alteration of assessed values...the board may correct the roll." So you got the commandante in your structure here, the politburo, and then you've got the commissars: "You are in charge of this, this, this." Then you have the spear carriers, their brigade. They are the first ones off the cliff. They're dispensable, but the commissars will actually be in place, and they can correct the mistakes.
Well, if there's a mistake, what about the right of people to appeal? That's not in jeopardy here, but it might be, because my right to appeal was based on a mistake or mistakes, but now the commissar will be able to check. I can hear the click of the heels from here to eternity, province-wide. My God, this is unbelievable. Get the brown shirts back from the dry cleaners. Unbelievable.
Mr Wettlaufer: On a point of order, Mr Chair: I think the use of "brown shirts" is unparliamentary. Even considering that English is not M. Pouliot's native language, native tongue, I believe he could select other words.
The Chair: So you had no objection to "spear carrier"?
Mr Wettlaufer: I have no objection to "spear carrier."
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The Chair: Would you care to withdraw, Mr Pouliot?
Mr Pouliot: You're right. For the respect I have for my friends and their opinions, I will substitute "brown shirt" with "camisole." No, I will withdraw.
The Chair: Thank you. Further comments and questions?
Mr Grimmett: If I could try to clarify, there actually is real benefit here to the public and I'd like Mr Sholtack to perhaps provide a little bit of background on this amendment.
Mr Sholtack: The intent of this provision is to allow corrections that are obvious, not to necessitate appeals, because there are many slight errors that can be easily fixed that the assessment department points out. There has been a variant of this in the Assessment Act for many years. When you have so much information, there is invariably a slight error that can be easily fixed. This gives the Assessment Review Board the power to do that without necessitating an appeal and the payment of the fee and all the other process that you go through. It's a power that is very useful to correct these minor errors.
This same provision was enacted under Bill 106 but it was based on Bill 61 receiving royal assent before December 1. That may not happen, so this provision will only be proclaimed should Bill 61 be passed after Bill 106 comes into effect and supersede an earlier provision that was written into Bill 61. It's a technical timing problem that we're fixing here, but the intent is the same.
The Chair: Further comments or questions? Okay, we're voting on the government motion number 20 in your package. Shall the motion carry? Carried.
Shall section 20, as amended, carry? Carried.
I have no proposed amendments for sections 21 to 28. Shall sections 21 to 28 carry? Carried.
I have a proposed amendment from the government, number 21 in your package, on section 29.
Mr Grimmett: I move that subsection 29(2) of the bill be struck out and the following substituted:
"(2) Paragraph 17 of section 236 of the act, as amended by the Statutes of Ontario, 1993, chapter 27, schedule and 1996, chapter 1, schedule M, is amended by striking out the portion preceding clause (b) and substituting the following:
"17. For licensing, regulating and governing transient traders.
"For the purpose of this paragraph,
"(a) 'transient trader' means a person who offers goods, wares or merchandise for sale in any manner in the municipality,
"i. other than on a permanent basis, or
"ii. on a permanent basis if the total time the person has operated the business on a permanent basis and the time the person continuously resided in the municipality immediately before beginning to operate the business on a permanent basis is less than three months.
"(3) Clause (f) of paragraph 17 of section 236 of the act is repealed and the following substituted:
"(f) The licence fee shall be applied on account of taxes payable on the land used for the purposes of or in connection with the business if the land is owned by the person carrying on the business during the year in which the licence was issued and five years thereafter."
Background note: The amendment replaces subsection 29(2) with new subsections 29(2) and (3), which give municipal authority to license and charge fees to transient traders. The former authority was connected to the business occupancy tax, which was eliminated in Bill 106.
The Chair: Comments or questions? Shall the government motion carry? Carried.
Shall section 29, as amended, carry? Carried.
I have no proposed amendments to section 30. Shall section 30 carry? Carried.
On section 31, I have a proposed amendment from the government. It's number 22 in your package.
Mr Grimmett: I move that clause (e) of the definition of "payment in lieu of taxes" in section 361.1 of the Municipal Act, as set out in section 31 of the bill, be struck out and the following substituted:
"(e) section 52 of the Power Corporation Act."
As background, this consequential change ensures that the definition of payments in lieu is consistent with the amendment to the Power Corporation Act set out in section 65.
The Chair: Comments or questions? Shall the government motion carry? Carried.
Shall section 31, as amended, carry? Carried.
I have no proposed amendments to sections 32 and 33. Shall sections 32 and 33 carry? Carried.
Section 34: I have a proposed government amendment, number 23 in your package.
Mr Grimmett: I move that subsections 368.1(1) and (2) of the Municipal Act, as set out in section 34 of the bill, be struck out and the following substituted:
"Prescribed subclass tax reductions
"(1) The tax rates that would otherwise be levied for municipal purposes for the subclasses prescribed under subsection 8(1) of the Assessment Act shall be reduced in accordance with the following rules:
"1. The tax rates that would otherwise be levied for municipal purposes for the subclasses prescribed under paragraph 1 of subsection 8(1) of the Assessment Act shall be reduced by the prescribed percentages.
"2. The tax rates that would otherwise be levied for municipal purposes for the subclass prescribed under subparagraph (i) of paragraph 2 of subsection 8(1) of the Assessment Act shall be reduced by 30% or by the percentage, if any, under subsection (2.2).
"3. The tax rates that would otherwise be levied for municipal purposes for the subclass prescribed under subparagraph (ii) of paragraph 2 of subsection 8(1) of the Assessment Act shall be reduced by 35% or by the percentage, if any, under subsection (2.2).
"4. The tax rates that would otherwise be levied for municipal purposes for the subclass prescribed under subparagraph (i) of paragraph 3 of subsection 8(1) of the Assessment Act shall be reduced by 30% or by the percentage, if any, under subsection (2.2).
"5. The tax rates that would otherwise be levied for municipal purposes for the subclass prescribed under subparagraph (ii) of paragraph 3 of subsection 8(1) of the Assessment Act shall be reduced by 35% or by the percentage, if any, under subsection (2.2).
"Same
"(2) The Minister of Finance may make regulations,
"(a) prescribing percentages for the purposes of paragraph 1 of subsection (1);
"(b) requiring percentage reductions of the tax rates for municipal purposes for any subclasses prescribed under subsection 8(2) of the Assessment Act.
"Choice of percentage within range
"(2.1) If the regulations made under subsection (2) require tax rates to be reduced by a percentage within a range described in the regulations,
"(a) the percentage shall be specified, by by-law, by the council of the local municipality or, if the local municipality is a lower-tier municipality, by the council of the upper-tier municipality; and
"(b) if no percentage is specified under clause (a), the percentage shall be the highest percentage in the range.
"Municipal option for certain paragraphs
"(2.2) The council of a municipality, other than a lower-tier municipality, may pass a by-law providing for a single percentage that is not less than 30% and not more than 35% to apply instead of the percentages set out in paragraphs 2 to 5 of subsection (1)."
By way of explanation, the amendment removes regulatory power of reducing tax rates for vacant land, vacant units and excess land subclasses. It places them in the legislation. The tax rate for the vacant land and the vacant units and excess land subclasses in the commercial property class shall be 70% of the rate otherwise payable, and in the industrial property class shall be 65% of the rate otherwise payable. Municipalities are given the option to choose either a single percentage between 65% and 70% for both the commercial and industrial classes or the above percentages.
For the subclass for farm land awaiting development, the tax rate reductions will be set in regulation. If no percentage is specified, the tax rate shall be the lowest percentage of the rate otherwise payable.
One further item in this amendment pertains to large commercial theatres. If a subclass is prescribed for eligible theatres in the city of Toronto, tax rates may be set by regulation.
The Chair: Comments or questions?
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Mr Pouliot: Not by way of prophecy, but this nightmarish scenario whereby the law profession is occupying the largest floor space in each and every mall in the province of Ontario -- this is a minefield. And yet one more time we see the minister, the main mullah, the guru, we see the shadow of his hands controlling the puppets. This is convoluted. And yet if it doesn't work, the minister has a right to guillotine, to behead, to execute at will -- will show no mercy. When everything else fails, the minister has the almighty power to decree, to, in the context of legislation, impose his will, to rule by force. Another affront at democracy.
Members of the opposition, when they face this committee, should come with the proper attire. They should come here straitjacketed and handcuffed, because this is sad, sad, sad as you see this concoction, this sad mélange, this poison develop. It penetrates every aspect, through legislation, of our daily lives. You are successful. You have poisoned the well totally. It's page after page of this kind of determinant, and your philosophy represents what is worst in terms of a democracy. There isn't a life that you don't touch either directly or indirectly.
When this hits the street next June or July, Mr Phillips and I and our colleagues -- and the populace of Ontario much more importantly -- will be around. It will be, to say the least, challenging and interesting to see the skirmish. When the light is on, you will do the proverbial dash to the nearest hole, the nearest exit. When the lights come on, when you stop blocking the sun from penetrating, you shall be exposed for what you have put on paper and legislated.
I'm sorry. I'm going back home this afternoon and I am going to keep reading the classics. You are a depressing lot in the context of legislation. It gets worse. It exceeds, it surpasses, one's imagination. This has "bad news" written all over it.
Still time? I'll be brief. Still time. It comes from you. Mr Phillips and I are in your office with our IDs. We're quite willing for the benefit of Ontarians to come out of your office with your IDs. You could be heroes. You could wear the badge and you can be proud once again. Either that or you come up with this kind of cheap, confusing wording that if A doesn't get you, B will, and you cannot escape.
This is sad, sad, and sad again, and every time you get confused, you draft some more legislation that is even more confusing.
The Chair: Further comments and questions? We are voting on government motion number 23. Shall the motion carry? Carried.
Shall section 34, as amended, carry? Carried.
I have no proposed amendments to section 35. Shall section 35 carry? Carried.
Section 36: I have four proposed amendments. We'll begin with the one which is number 24 in your package. It's a government motion.
Mr Grimmett: I move clause 368.3(4)(a) of the Municipal Act, as set out in section 36 of the bill, be struck out and the following substituted:
"(a) prescribing, for each geographic area described in subsection (5.1), the rate of tax to be imposed by a local municipality on land described in subsection (1)."
By way of background, the power to prescribe tax rates for railway and hydro rights of way is amended to provide that a tax rate shall be prescribed for each specified geographic area in the province.
The Chair: Further comments or questions?
Mr Phillips: Can you give us a brief explanation of this again?
Mr Grimmett: Mr Wong, could you elaborate on that?
Mr Wong: This amendment will allow the prescription of tax rates for those areas that will be mentioned in further amendments. We'll have nine geographic areas, and for those nine geographic areas there will be tax rates and the minister will prescribe those rates.
Interjection: Do we have the prescribed geographic areas?
Mr Wong: No, the geographic areas will be amended in the following amendments.
Mr Phillips: This is the one where Harris and Eves sort of sign a piece of paper saying that we're going to order the railroads and the utilities to pay X amount per acre.
Mr Wong: It will tax per acre, yes.
Mr Phillips: Can we just get a brief explanation, Parliamentary Assistant -- we've heard a lot about market value and how this simplifies things and the bill is all about market value -- of why, rather than market value, we've chosen acreage as the determinant here?
Mr Grimmett: There was concern expressed at the outset when we dealt with Bill 106 from the major railway companies and the other entities that would be affected by a change in the assessment situation. There was a concern that the existing patchwork of assessment treatments they receive throughout the province could be exacerbated. They impressed upon the finance ministry that they would like some certainty, as they proceed, to deal with their right-of-way properties.
It was decided by the ministry that we would prescribe a series of rates on an acreage basis throughout the province and break down the right-of-way properties into nine geographic areas. The railway companies were here and they talked about that problem. They indicated that they felt this was a fairer way to deal with them in terms of setting out a prescribed rate on those areas where their rights of way are.
There was some concern that the rights of way, which are quite substantial in some northern communities, could be used by municipalities to perhaps distort the rates among different classes.
Mr Phillips: That doesn't make any sense to me; it's a set of words but -- the railroads ultimately will sell off some rights of way. I don't think they'll sell an acre of land in Pefferlaw at the same rate they're going to sell an acre of land in downtown Toronto. They're going to pay taxes at exactly the same rate. The government said this is bringing consistency, fairness and all those things to the tax system. I heard what you said and I'll read it again in Hansard, but it didn't make any sense to me. It wasn't an answer. I know that's what the railroads want but we're here, I think, to speak for the public as well.
Can you just maybe in simple language tell me where the public interest is served on assessing land on the basis not of market value but of numbers of acres?
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Mr Grimmett: There is still a market value component in that acreage. There is still a market value component in the acreages in each of the geographic areas.
Mr Phillips: Tell me more. How is that?
Mr Grimmett: I'm not the expert in that field. I'm not going to get into some kind of expert explanation for it.
Mr Phillips: Just tell me where that's market value in it.
Mr Grimmett: In setting out the rates there is a concept of market value for the lands occupied by rights of way in each of the geographic areas.
Mr Phillips: I don't see any of that in the bill. Tell me where it is.
Mr Grimmett: Perhaps I can have Mr Sholtack provide a little more detail.
Mr Sholtack: The problem this is addressing is that under the current act rights of way are taxed based on the value of adjoining properties. As you pointed out, a right of way in Toronto would be taxed much higher than a right of way in Pefferlaw or anywhere else in Ontario. In order to equalize that, because as long as the railway company is using the right of way for its railway purposes, it should be taxed the same whether it's located in Toronto or in northern Ontario, that's the purpose of these amendments: to stabilize the rate within the geographic area so that the tax is the same. Because the value isn't there as long as the railway company is using the right of way to run a railway and, as such, it's an integrated process, the land is worth the same, basically, wherever it is because it's being used for railway purposes. To compare it to adjoining property really distorts the value.
Mr Phillips: So let's just follow this. You're saying, then, that the logic is that if I am using a piece of property in downtown Toronto, it should be assessed at the same rate as if I am using a piece of property in Pefferlaw.
Mr Sholtack: The geographic areas, we'll deal with that in a later amendment.
Mr Phillips: I know you're dealing with railroads, but you said the logic is that regardless of where the rights of way are, they should be taxed at the same rate, if that's the logic. I'm just trying to figure out the logic, because it's not logical to me. You're now saying that regardless of where your business is or your home is, you should be taxed at the same rate. If you have a house on an acre of property in downtown Toronto, it should be taxed the same as a house in an acre of land in Manitouwadge.
Mr Sholtack: Railways are different because they need the track to operate, just like trucks need roads to operate. As long as they're using the right of way to run their railway, the land is used for railways purposes.
Mr Phillips: A steel company needs land. I understand this makes the railroads happy. I'm just trying to figure out where there is any consistency in public policy here. If you just want to say, "Well, we're trying to keep the railroads happy -- "
Mr Sholtack: No. It provides consistent treatment for railway rights of way within the geographic areas. It's limited use. As I said, the rights of way for railways can only be used to run trains on and for power utilities to string wires on. It can't be used to develop for a steel mill, for an apartment complex, for a commercial shopping centre; it can only be used to run trains on. As long as it's being used to run trains on, that's its value, that's the way it's going to be assessed within the geographic areas that are being provided in the act. It's not fair to compare them to comparable properties the way the act provides now, to value those rights of way based on adjoining lands.
Mr Pouliot: Following on what my distinguished colleague has said, you're right, Mr Phillips, by your reaction. This may be futile.
I need your help. I must work very hard at some of those things, so please be a little patient. Actual value assessment does not apply to rights of way, ie, railways, because of the description of usage of land. Right?
Mr Sholtack: Of the use to which the land is put.
Mr Pouliot: That's right. What you have done is you have established eight or nine, is it, different regions?
Mr Sholtack: Nine.
Mr Pouliot: Each region will be assessed at a different rate and the base of the formula will be so much assessment per acreage.
Mr Sholtack: The tax rate, yes.
Mr Pouliot: Completely detached from the actual value, because your approach is that since they have no actual value, they are only used for a purpose, we get them out of the convention. They are not to be like actual value. Right?
Mr Sholtack: They're to be treated as rights of way, yes.
Mr Pouliot: Very good, thank you. How do you reconcile some farm land being assessed at industrial value while it is still farm land for all intents and purposes? If somebody goes and applies for a permit or for rezoning and before that shows the least intent of changing what is being done, but yet because of rezoning a farm is assessed at industrial value, how do you see the consistency of that with the railroad?
Mr Sholtack: There is nothing in this provision, of course.
Mr Pouliot: Of course not.
Mr Sholtack: We did discuss farm land awaiting development in a previous motion.
Mr Pouliot: Okay, but Mr Phillips has said that because some of the acreage is presently abandoned -- or not abandoned but on the way to being abandoned or changing -- they've said that if they fail to find a short-line operator, or in their case they'll just go commercial, they're already advertising. Yet we know that the minute the land flips, an acre of land in Thunder Bay will be more expensive than an acre of rights-of-way land in Armstrong -- market -- we all know that, I think. Right? But because they are in the same region, they are assessed the same way.
You have to be consistent in your approach. The railways are saying that they're going to sell this in downtown Toronto and they're going to complete either a convention centre or add a sports facility, but presently that land is a right of way.
Mr Sholtack: I don't believe it is.
Mr Pouliot: I don't have an example, but if I think there is some example someplace -- we know what's happening out there to some extent -- that land will still be treated unlike the farm land that might or might not be developed some day, but that land will still be treated on preferential treatment per acre.
So much for actual value. Another brief subject I want to bring up is the railways -- most if not all majors have no hesitation when you peruse their books; some due diligence, nothing wrong -- using as assets and in terms used as collateral and in terms used to get a few basis points off the papers they float, the floats they issue. They use the land for an actual value. It's good collateral, it is sound and it is a way of doing business.
This is an asset on the books and it is not recognized by your definition. By the government's definition, they wash their hands of this. Again, it lacks consistency, because the railroads use that as true assets at the full market value. I'm just saying that in terms of the consistency.
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Having said this, I must admit I don't know what the answer is, whether they should be fully assessed when they are truly a right of way. I'm appreciative that no one has tried to defend this. The parliamentary assistant was tentative at best, not always the best position. You have so much on your plate. I can appreciate that. Let it be, we understand, but this is to be watched rather carefully. It doesn't jibe. It doesn't make the grade.
The Chair: Further comments or questions? We're voting on government motion 24. Shall the motion carry? Carried.
We have a government amendment proposed, number 25 in your packet.
Mr Grimmett: I move that paragraph 2 of subsection 368.3(5) of the Municipal Act, as set out in section 36 of the bill, be amended by striking out "and may be restricted to a geographic area" in the second and third lines.
The background on this is that it's a consequential amendment that strikes out a reference to geographic areas, which is necessary because the previous amendment provides that tax rates shall be set for each geographic area.
The Chair: Comments or questions? Shall the amendment carry? Carried.
Government motion number 26.
Mr Grimmett: I move that section 368.3 of the Municipal Act, as set out in section 36 of the bill, be amended by adding the following subsections --
Mr Pouliot: On a point of order, Chair: In terms of this lengthy one, with respect, would you agree to dispense and give us your rationale behind it? It's quite lengthy, it names every one of the nine regions and we've already debated that.
The Chair: You're asking for unanimous consent to dispense with reading the motion and just describing what it does. Agreed.
Mr Grimmett: This amendment adds a new subsection to section 368.3 of the Municipal Act, creating nine geographic areas in which tax rates for railway and Hydro rights will be set.
Mr Phillips: Just to help me along with the logic of this one as well, I'm trying to find the rationale for this, why the railroads would pay -- I disagree with the per acreage thing, but why would they pay one tax on an acre of land in Oakville and another on an acre of land in Burlington? They're right beside each other.
Mr Grimmett: I've had the explanation given to me and it has impressed me, and I still haven't become that familiar with it, but I can pass it on. I'll ask one of the people at the table. I think Mr Tassonyi wants to provide this one.
Mr Phillips: If he didn't want to, he does now.
Mr Tassonyi: I'm not sure I want to, but the reason essentially is that, as shown in the parts that are unamended in the bill, it's the government's long-term intent to move towards a consistent, province-wide rate of taxation on rights of way over a period of time, given the regionally specific ones in any case. In some sense it also reflects the existing differences of taxation levels in those areas. It's in part to address the issue of how much tax shifting you minimize by setting out these geographic areas.
Mr Phillips: Help me along again. There is no logic. This is an interim step, is it?
Mr Tassonyi: No, the setting out of the geographic areas is not an interim step. It sets out the areas within which a consistent rate would be applied. It's just that it was chosen to set this out in statute in order to provide a firmer base for which the municipalities could then understand within what context the rate structure would apply to those rights of way.
Mr Phillips: I heard every word you said. I don't understand the logic of why, if I'm the railroad, I pay X per acre in Oakville --
Mr Tassonyi: At this point it's not so much the logic for the railway company. They would probably prefer to pay one standardized rate throughout the province.
Mr Phillips: What's the logic for the public? Just tell me the logic for the public.
Mr Tassonyi: The logic is more from the municipal finance perspective, which is that it's basically maintaining the existing tax burden, as it exists in that region, that has been paid by the railway company and it averages out over the region. Given the number of counties and so on, it's very large regions. The logic is more from the municipal-fiscal perspective as opposed to the railway company's interest, in some sense.
Mr Phillips: It embraces in legislation inequities that the municipalities have developed.
Mr Tassonyi: That's one way to put it, yes.
Mr Phillips: What other way is there?
Mr Tassonyi: I would say it makes it more consistent over time. Basically it's because of these differences that we've created the geographic regions, and it's within the regions that we'll have equity over time.
Mr Phillips: There's no logic to it. I guess you're just saying that we will put in legislation the inequities.
Mr Grimmett: I think there is some logic here.
Mr Phillips: What the hell is the logic? There is no logic.
Mr Grimmett: The logic is that we are trying to be fair to the railway companies, as we're trying to be fair to other groups and other taxpayers in the legislation. We feel that in order to maintain some stability in the amounts the owners of these rights of way pay to municipalities, we have to look at the amounts they currently pay to municipalities. We've chosen to break it down into geographic areas and then the minister will fix the rates.
Mr Pouliot: I'll never learn English.
Mr Tassonyi: Historically there was zero logic, absolutely none, because you had differing rates within a municipality itself of effective taxation. If the railway ran through Rosedale it was taxed at one rate per square foot or per acre of line, and if it moved out of Rosedale and hit Parkdale and the same CP line runs through the town, the value then falls. Essentially the point gets at trying to move towards a consistent understanding of what that rate is going to be within a vary large geographic area.
Mr Phillips: I guess you've got to do it, but don't try and snow me.
Mr Tassonyi: I'm not.
Mr Phillips: What you're saying is that there was no logic in assessing it one thing in Parkdale and another in Rosedale, so you're going to take the total amount they're paying and you're going to redistribute it on the basis of per acreage.
Mr Tassonyi: I know, and as I said to you before, we're moving towards a consistent geographic rate of taxation, and it is meant essentially to put some stability into the picture so that as we move through here and revalue properties, the railways' rates of taxation are clear to them as well.
Mr Pouliot: Mon collègue, we shouldn't be surprised. No one is blaming anyone here. It's obvious to me -- with respect, it's not directed at you but to the government -- this is one more example of the railways being given special and preferential treatment. There is no other way. But one need not be surprised. All one has to do is go back to its origin, the history of our great country. Railways were given huge tracts of land. It started with a dream and quickly joined a political reality and it hasn't stopped.
You say the usage you make has nothing or little to do with the actual value of the property. Those tracts of land in some cases are worth literally millions and millions of dollars by virtue of location, location and location. That is not being considered in the mentality, in the philosophy, in the envelope of actual value assessment.
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We've taken the railroads out of actual value and we have said we will impose so much per acre depending on where you are in every one of the nine regions. Again the argument, because you must at least make an attempt at being consistent, when it comes to farm land being farmed, the usage, like railways have a usage, or rights of way, farming is a usage, it is recognized, except that if there is a zoning change -- you could farm for another 10 years -- you will be assessed entirely differently. If the right of way is in the process of being negotiated, nothing changes until the bill of sale comes across the desk. That's the reality.
On the other hand, if there's a zoning change there will be no zoning change for the railways, I can assure you, for the rights of way. When we're saying the "burden," every dollar becomes a burden. We favoured the railways all the way through. At one time, when I was at transportation, back to back I had the people representing CP Rail and the sky was going to fall. They bitched, bitched, bitched that they were paying too much tax. They were playing the poverty game. They went from this and that to complete and total destitution, blaming the unfair competition given to truckers, the competitor.
Right after that CP trucks comes in, bought with CP Rail money, and the laments. They had tears in their eyes. It was as if they had lost their best friend and their last dollar at the same time. We had to take a recess. It was a very sad state of affairs, very sad history.
CNR is good railroad money. Did you see the last quarter? It was phenomenal by all accounts, a success story, and the other hand comes in. That's the one that rakes it in. The Delaware, they know the story of the Delaware. Better yet, it was bought with Canadian dollars. They don't go east-west any more; they go north-south.
Those people should pay their fair share of taxes to the government and I know your duty is there to implement it. When we talked about fairness, now you are consistent with your philosophy. You are giving it to the railway barons, and don't change "landlords" to "proprietor" or "owner." A landlord is a landlord, and you've given it --
Municipalities no longer have this. Now municipalities were going to be left on their own to do this and do that. A little more latitude; you've straitjacketed the municipalities. You're giving them the responsibility when it costs money and then you say, "You can't do this, that or that because we've got to please our friends."
I'll finish here on this, but I'm going to tell you this is not consistent because you are not doing it to others -- or you are doing it to others. Then again, the bigger you are here, if you court the people in those clubs that the rest of us never have access to, that's where you will find them. They are the single-malt group. They are the finest of Bordeaux. They are not the dernier cru but the grand cru. They are la bonne fourchette, the fine table. The rest of us, the plebes, well: "Who are those people? Monsieur, you pay."
You will find those people at, what? The Boulevard Club? Help me. You know. You live there, you people. The Toronto Club, the Granite Club -- unbelievable. They've had their way. They're getting away. They are running away from the field. It's a shame. They're giving preferential treatment. They've got both hands in your pockets. Wake up.
The Chair: Further comments or questions? We are voting on government motion number 26. Shall the amendment carry? Carried.
Government motion number 27 on the same section.
Mr Grimmett: I move that paragraph 2 of subsection 368.3(11) of the Municipal Act, as set out in section 36 of the bill, be amended by striking out "and may be restricted to a geographic area" in the second and third lines.
By way of background, this is a consequential amendment. It strikes out a reference to "geographic areas" which is unnecessary because a previous amendment provides that tax rates shall be set for each geographic area.
The Chair: Comments or questions? Shall the amendment carry? Carried.
Shall section 36, as amended, carry?
I have no proposed amendments for section 37. Shall section 37 carry? Carried.
Section 38: I have government motion number 28.
Mr Grimmett: I that subsection 370(4) of the Municipal Act, as set out in subsection 38(3) of the bill, be struck out and the following substituted:
"Assessment roll
"(4) If a bylaw is passed under subsection (1) before the assessment roll for taxation in the current year is returned the tax rate levied under subsection (1) shall be levied on the assessment according to the assessment roll for taxation in the previous year as most recently revised before the bylaw is passed or a preliminary assessment roll provided by the assessment commissioner for the purpose."
This proposed amendment clarifies the most recently revised assessment roll that's to be used for interim purposes in 1999 and beyond. The members may recall that this issue was raised by some of the municipal clerks and treasurers who appeared before us.
The Chair: Comments or questions? Shall the amendment carry? Carried.
Amendment number 29 in your package.
Mr Grimmett: I that subsections 38(4) and (5) of the bill be struck out and the following substituted:
"(4) Subsections 370(7) to (10) of the act, as enacted by the Statutes of Ontario, 1997, chapter 5, section 55, are repealed and the following substituted:
"Application after municipal restructurings
"(7) If as a result of a municipal restructuring parts of a local municipality as it exists on January 1 of a year were, at any time in the preceding year, in different local municipalities or were, at any time in the preceding year, territory without municipal organization, this section applies for the purposes of the current year with respect to each such area as though it were a separate municipality.
"Interim levy for 1998
"(8) For 1998, the council of a local municipality may, before the adoption of the estimates for the year, pass a bylaw levying taxes on the assessment of property in the municipality rateable for local municipality purposes.
"Determination of interim taxes
"(9) Taxes under subsection (8) shall be levied on the assessment according to the assessment roll, as most recently revised before the bylaw is passed, for taxation in 1997 in accordance with the following:
"1. Taxes on residential and farm assessment shall be set by levying a mill rate that does not exceed the prescribed percentage (or 50% if no percentage is prescribed) of the residential mill rate levied in 1997.
"2. Taxes on commercial and industrial assessment shall be set by levying a mill rate that does not exceed the mill rate that would raise, on all the commercial and industrial assessment rateable for local municipality purposes in 1997, the prescribed percentage (or 50% if no percentage is prescribed) of the total taxes raised on that commercial and industrial assessment in 1997 including all business taxes levied in 1997. For the purposes of this paragraph, 'commercial and industrial assessment' does not include business assessment.
"3. For the purposes of calculating the total taxes in 1997 under paragraph 2, if any taxes were levied in 1997 for only part of the year because assessment was added to the assessment roll during 1997, an amount shall be added equal to the additional taxes that would have been levied if the taxes had been levied for the entire year.
"Relief for excessive interim taxes
"(10) If the council of the municipality is of the opinion that the taxes under subsection (8) on a property are excessive in relation to its estimate of the total taxes that will be levied on the property for 1998, the council may, by bylaw, reduce the taxes on the property under subsection (8) to the extent it considers appropriate.
"Clarification, property not taxable in 1997
"(11) Taxes may be levied under subsection (8) on a property that is rateable for local municipality purposes for 1998 even if the property was not rateable for local municipality purposes for 1997.
"Assessment added after by-law passed
"(12) A by-law under subsection (8) may provide for the levying of taxes on the assessment of property that is added to the assessment roll after the by-law is passed.
"Application of subsections (5) and (6)
"(13) Subsections (5) and (6) apply, with necessary modifications, to amounts levied under subsection (8)."
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This amendment meets the concerns of large municipalities, the Association of Municipalities of Ontario and the Association of Municipal Clerks and Treasurers of Ontario. It provides the method of levying the 1998 interim tax by using the 1997 assessment roll as last revised by the assessment commissioner in order to raise up to 50% of revenues raised in 1997.
Municipalities will be allowed to raise up to 50% of 1997 business occupancy tax revenues from realty assessment. Municipalities will be allowed to make adjustments to taxes on properties where the interim bill would be excessive relative to the anticipated 1998 final bill; for example, on farmlands and managed forests.
The option of using the 1998 interim role is removed. Municipalities in the process of restructuring may calculate their interim bills on the basis of collecting up to 50% of the taxes that were levied in the different parts that existed in the prior year.
Mr Pouliot: For some designation, the municipalities will be able to surpass on their interim tax levy, to go above 50%, and they will use as a method for calculation what they expect, what they anticipate.
Unless they have in hand the answers to the many questions, and if they have in hand the assessment, and if they have a hand on the numbers of appeals, they will really be guessing, in many cases. Anticipation will be grosso modo, will be some sort of a ballpark figure. And yet, they'll be asked to collect. It's the only way they can conduct business through the interim.
My understanding, and I need your help again, is that the municipalities would only be able, as is the case now, to levy 50% of the previous tax levy for general purpose, inclusive of the business occupancy tax. The sum for 1997 that was levied in 1998 for the purpose of interim shall not exceed 50% -- which is no change from today, from what is being done now, from what has been done in the recent past.
What I understood from the clerks and treasurers and from AMO -- I didn't see the focus, I didn't hear the focus on the two classes you have mentioned. I understood them to say, "Give us the tools to go above 50% for the interim tax levy for general purpose, regardless of class." That's what I heard.
Parliamentary Assistant, when you say you're responding to the requests of those two presenters, as representative, I don't think that's what -- what you said is right but there is also a bigger picture which is what they said in terms of the overall tax levy.
By way of a comment, isn't this an admission that people will be hard-pressed to find the money, the taxes, that this is not revenue-neutral, that there will be some dislocation, that the uncertainty is such that people see -- you see, the pendulum here, it says, "Well, give us more money," but I thought I heard your boss, Mike Harris, saying: "Oh, yes, I know we said this, that before the year 2000" -- that's two years from now -- "municipal councils should be able to pass along a savings from 5% to 10%." This was the boss man who said that.
Why would you need to appeal, to petition Parliament or the committee for more than a 50% interim tax levy? The main person, the Premier of this province, said you should be able to pass along savings of 5% to 10% if you tighten your belt. Doesn't that run contrary to what we heard? Then he went on to say, he and Mr Leach, that it was revenue-neutral, that taxes were not going to go up. Under the government's leadership, are taxes going to go up or not? If so, where will they go up?
Nothing will happen here after December 15. People's minds will be on celebration, the family Christmas, the Nativity. That leaves us, what? Five weeks, maybe six weeks at the most, and then January 1 comes in and all this is implementation. It's time you gave us the answer now. "Are my taxes going up or aren't they?" says Harry Smith and Jane Jones. That's what they want to know now. By this time, you should have the answers to all this.
But the municipalities that have the inside, the clerk-treasurers, the front-liners are saying: "No, no, We need the tools to go and grab more than 50% because we're not going to be able to make ends meet until we strike our final levy."
What's happening here? The Premier says, the government says, there's going to be a decrease in taxes, and the municipalities and the accountants are saying, the administrator says: "No, no, don't believe that. We're going to need more money than in previous years to operate, so we come here and we ask you to give us a chance to go at more than 50%."
It doesn't address the request, by the way, because you're limiting them, you're freezing them. The real money is with the residential, commercial and industrial, but now less with industrial because of your courting, I mean your partnership, with the large industries.
The Chair: Further comments or questions? We're voting on government amendment number 29. Shall the amendment carry? Carried.
Shall section 38, as amended, carry?
I have a government amendment on section 39, which is number 30 in your package.
Mr Grimmett: I move that clause 371(1)(c) of the Municipal Act, as set in subsection 39(1) of the bill, be struck out and the following substituted:
"(c) prescribing percentages for the purposes of paragraphs 1 and 2 of subsection 370(9)."
This amendment is a consequence of the previous motion amending section 370 of the Municipal Act.
The Chair: Comments or questions? Shall the amendment carry? Carried.
Shall section 39, as amended, carry? Carried.
I have no proposed amendments for section 40. Shall section 40 carry? Carried.
On section 41, I have a government motion, number 31.
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Mr Grimmett: I move that subsection 41(1) of the bill be struck out and the following substituted:
"(1) Subsections 372(2) and (3) of the act, as enacted by the Statutes of Ontario, 1997, chapter 5, section 55, are repealed and the following substituted:
"'1998 assessment-related tax increase or decrease'
"(2) In this section,
"'1998 assessment related tax increase or decrease' means the amount for a property calculated in accordance with the following formula, subject to subsection (3):
"Amount = 1997 Taxes (class)/1998 Assessment (class) x 1998 Assessment (property) - 1997 Taxes (property)
"Where,
"'1997 Taxes (class)' means the total 1997 taxes for municipal and school purposes on land in the municipality that is in the property class that the property is in including business taxes imposed on persons carrying on a business on such land,
"'1998 Assessment (class)' means the total assessment for 1998 of the land in the municipality that is in the property class that the property is in and that is rateable for municipal purposes,
"'1998 Assessment (property)' means the assessment of the property for 1998,
"'1997 Taxes (property)' means the 1997 taxes for municipal and school purposes on the property, including business taxes imposed on persons carrying on a business on the property.
"Same
"(3) The determination of the 1998 assessment-related tax increase or decrease for a property is subject to the following:
"1. The 1998 assessment-related tax increase or decrease for a property in the farm land property class or the managed forest property class prescribed under the Assessment Act is 25% of the amount determined using the formula in subsection (2).
"2. This paragraph applies with respect to a bridge or tunnel that crosses a river forming the boundary between Ontario and the United States. The 1998 assessment-related tax increase or decrease for land used for the purposes of the bridge or tunnel is the 1998 taxes on the land minus the 1997 taxes on the land for municipal and school purposes. In this paragraph, 'land used for the purposes of the bridge or tunnel' includes land at the end of the bridge or tunnel used in connection with the bridge or tunnel, including duty-free stores.
"3. If a new improvement to a property is reflected in the assessment used to determine the 1998 taxes but was not reflected in the assessment used to determine the 1997 taxes, the 1998 Assessment (property) shall be adjusted, in calculating the amount under subsection (2), to what it would be if the improvement was not reflected in the assessment for 1998.
"4. If an improvement to a property was reflected in the assessment used to determine the 1997 taxes and, because of a change related to the improvement, the improvement is not reflected in the assessment used to determine the 1998 taxes, the 1998 Assessment (property) shall be adjusted, in calculating the amount under subsection (2), to what it would be if the improvement was reflected in the assessment for 1998."
The amendment clarifies the meaning of assessment-related increase or decrease by way of a formula. This ensures that the phase-in is limited to assessment-related tax impacts excluding other changes occurring as a consequence of education finance reform and the Who Does What initiative. The amendment also clarifies the phase-in treatment of international crossings.
The Chair: Questions or comments? Shall the amendment carry? Carried.
I have another proposed amendment, number 32 in your package, from the government.
Mr Grimmett: I move that section 41 of the bill be amended by adding the following subsection:
"(1.1) Subsection 372(5) of the act, as enacted by the Statutes of Ontario, 1997, chapter 5, section 55, is amended by adding the following paragraph:
"8. For each property class for each year, the adjustments made under the bylaw must not affect the total taxes for municipal and school purposes on the land in the municipality that is in the property class and that is rateable for municipal purposes. For the purposes of this paragraph, the residential/farm property class, the farm lands property class and the managed forests property class prescribed under the Assessment Act shall be deemed to be a single property class."
By way of explanation, the amendment clarifies that tax rate ratios and ranges of fairness must always be adhered to even during a phase-in. Consequently, phase-ins must always be funded within each class. This prevents municipalities from shifting taxes to already overtaxed classes to fund residential phase-ins. The exception is that a phase-in of residential or farm lands or managed forests must be financed from those classes treated as a single property class.
Mr Pouliot: Very little room to breathe here, to conduct business. It seems that at every opportunity you just tighten the vice. You're sort of establishing a stranglehold. I guess your final act of torture will be that of a manicure.
On the one hand, you're giving municipalities more jurisdictional capacity, more responsibilities, but then you seem to sense what's going to happen here, severe dislocation in some cases, while you keep your foot to the floor and try to put the brakes on at the same time by saying, "If this happens, we will stop the municipalities from doing this, acting too fast." Yet they're going to have all those responsibilities and you know that they'll be forced to pull the trigger. They'll say: "We need the money," as simple as that, "and we have fewer dollars in terms of transfer payments flowing from there to the municipality. We have a new assessment base, we have all this downloading. Now we must pay for that so we've got to go and collect the money."
You'd better have the big chequebook when they come calling, because now this is the last stand, the last vestige. Now they no longer have the power. They must do it by instalment. They must take their time.
You have to pay your bills. Where I live in Manitouwadge, it's about 800 miles north of Toronto. We've opened our books. It's a village. We're not on the Trans-Canada Highway, we're inland. The closest house is 100 kilometres, 65 miles away. That's our neighbour, the closest house. We're somewhat isolated.
We have to be resourceful, but we lack not much. We're 3,200 people, so it's simple: We go to the municipal office and we all help one another. We started to get figures from the government. We know we're going to get a 50% tax break on our small properties. We're a company town so except for the sidings we all look alike. That's okay. We get a 50% tax break there, but now we've got to pick up the price of OPP. We know what that is. Right now, from what we know, we're about $500 extra. Our industrial base is pretty well gone. We're in mining, and you know what the Assessment Act does there. Our commercial base, you've got two small stores in town, a catalogue business to get away. We do a lot of dealing with them. Then we go to Thunder Bay or we go to Sault Ste Marie and that's 400 kilometres in each direction.
So now we're $500 and we don't know who's going to pick up the slack. Are our taxes going to go up by $500? No one has told us, and we've asked: "Where do we apply? Where is the formula? Where is the form so we can save Manitouwadge? This is our certified accounting etc. We're short $500 per household. What are we going to do?"
You know what they're going to do? They're going to read this and they will comply. But if you restrict them too much, then they can't. Then they have to say: "You there, you cannot charge more than this. The province is going to set the fee but leave you the bill." They'll set the policies but leave you the bill. The cheque is not in the mail. I've lived too long to believe in Prince or Princess Charming. I've discarded it long ago. But it seems that they discarded me before; maybe it never existed. You are messing up another municipality, I'm sorry, in the real world big time. I'll stop here.
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Schreiber, right now is looking at a 75% to 110% increase. They have zilch in terms of revenue, unless you send them the bill by January, some cheques at the end of every month, because the upper tier will tell them how much it costs for ambulance service. They've never paid for that before. There are many seniors in Schreiber -- it's an old railroad town -- so more hospital care; it's normal. They've never had to pay for policing, OPP, but I'm telling you that they're going to have to pay for that. They're going to have pay for social housing. They've never had to pay for that before. They'll save a few hundred dollars on the school taxes. It doesn't add up in the case of Schreiber. I've heard some people say, "Why don't we go into receivership"? It's like personal bankruptcy for a municipality, if you wish. "There are the keys." Of course, they will not do this.
Now it's restricted because you want to look good. You want to be the nice people. You would like to be loved. You'd like people to say nice things about you and preferably nice things to you. That way your vanity and egocentricity might propel you for a second term, like you would return. I understand that, that feeling of you'd like to be wanted, that someone is waiting for you, because lately it's been pretty bad going back home. You must miss that cuddly feeling of loved ones. You never thought it was like that, the scorn of the populace. You never thought it would be like this. You may no longer be able to go back home.
Your amendment number 33 --
The Chair: We're on 32.
Mr Pouliot: I'm sorry, 32. Another case of undermining their responsibility. Now they are really something: "You can't do this, you cannot do this, you cannot do this. You've got to stagger it." This is not coupons or strip bonds coming to maturity when you are five years or two years to retirement. This is the money that is needed two months from now and nobody has given me the answer where the shortfall will come in. On January 31, when it's time to pay the bill, when it's time to meet the paycheques, where are you going to take the difference? You can only go to 50% of interim tax levy for the previous year. By the time you get the assessment it will be late April, and then you will be hard pressed to go one massive shot, one last call to prayer, because you're going to have one final levy with all the reassessment and you're going to be in debt in some cases. Some of us will be rolling ourselves on the floor and our index finger will be long. You'll think God is talking to you, "We told you so, we told you so, we told you so."
By that time maybe a revolution will have hit the wall, or certainly the precipice, the cliff, the abyss. You'll have blood on your hands. People are gathering already. They expect 50,000 people again within a couple of days to come and tell you their dissatisfaction; 90% of them will have a degree in their back pocket. They represent the most educated.
Go on with the bill, vote for it, go to it, my friends. You don't need to call Jack Kevorkian, you can do it all yourselves.
Mr Phillips: The purpose of this amendment is to prevent municipalities from trying to cushion the blow on some of the residential and farm properties by putting part of the cost on to the commercial and industrial property taxpayers. I know this is what the taxpayers' federation probably wants but there will be some municipalities that are going to have real difficulty coping with this bill, particularly for the residential property taxpayers. For example, the government has determined you're going to shift about $300 million off apartments on to single-family homes -- that's fine -- plus a whole bunch of other things.
I always find that Al Leach will say, "We trust the municipalities," until it comes time for them to make any decision, and then he really doesn't trust them. Al Leach hated the council. He'll tell you this. The thought of a democratically elected body telling the general manager of the TTC what to do was just an anathema to him. His face would get so red that you thought it was going to explode, because the elected officials had the audacity to suggest any suggestions to the general manager of the TTC. The duly elected people -- he thought they were bungleheads.
I've told this story publicly before so I'll tell you again. I was Minister of Labour and we had a dispute between the union at the TTC and the TTC. The government of the day had to bring in legislation. I asked both parties to come in, the union and Metro council. I asked them both to come in to my office just so I could explain what I was doing. I asked them to be there at 10 o'clock. The union knew that. They were there at 10 o'clock and I explained to them. Al Tonks, Lois Griffin who was the chair of the TTC at the time and General Manager Leach showed up 10 or 15 minutes late and I told them what I was going to do. Al's face went so red, again, I thought it would explode, and he said, "Have you told the union what you're going to do"? I said, "Yes, I have." "Let me tell you, if you go ahead with what you're planning here, I'm going to run against you in the next provincial election and defeat you."
I tell that story because the architect of this is somebody who says, "Surely you trust the local politicians," and many of you in the room are probably former local politicians, I suspect. I think Mr Pouliot was a councillor in Manitouwadge. I don't know, Mr Rollins, whether you were or not, but many of us were. What this bill does is essentially tell the local municipalities exactly what they can and cannot do. It's very prespective.
This particular one is another piece of prescription that, no matter how tough things get with your residential and your farm property taxpayers, there is no way you can even temporarily put any of this on to the commercial and industrial property taxpayers. You may want to do that. I think you're handcuffing local municipalities, when you see how it's going to impact on them.
That's the intent of the motion. The business community may think that's good. But for local municipalities that are going to try and implement this, as my colleague said, it's a bit like you've got a straightjacket, the handcuffs, the belts and the ropes all tied around them, and all they've got left, probably, is their voice now. So there it is.
Mr Pouliot: After Mr Phillips had been the Minister of Labour, I had the honour to be Minister of Transportation. Those were the days when Mr Leach was at the TTC. It was like a pilgrimage; you could almost set your clock by it. They would request a meeting about every second month, the Toronto Transit Commission with Mr Leach as the chair. At the beginning it was interesting, but you got used to it. They came calling for money, and it became sort of pitiful, really. You would ask Mr Leach to look at ways of cutting things and he would swear that the TTC was lean and mean; now that the tables have turned he's telling municipalities, the same thing.
I will miss Mr Leach in January when the shufflette takes place, be it that from time to time people don't necessarily get better. Health is an important element, an important feature in politics. We try to hang on, to keep it. Then there comes a time when one would wish to spend more time with the family. Some of the jackals will finish the story, if you wish, but it will have been a sad legacy.
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Suffice it that when Bill 26 hit the floor, when Bill 26 was called, I felt really, really bad. The job that one Bob Rae did on the minister, and we were all there, I would not have wished that on anyone. I believe that the minister was so shocked that he is still reading Bill 26 as we look at 106 and then 149. I don't believe -- and I could be wrong, I am so often -- that he has a real hands-on, full understanding of el bill. There again, I could be wrong, but I've heard it said that it's quite demanding.
I won't say any more, but January 1 looms large indeed and you're going to have all this responsibility. People are going to try, in small towns with little resources, to come up and associate with the verbiage, and when they call your office it's going to be like the family support scenario. They won't have an answer or they'll have a generic. The people will try to answer them, and we've had some examples today, but they really don't know the answers themselves, so it rings hollow. "Oh, yes, thank you very much, thank you very much." You don't want to appear as if you don't want to never understand, but they never told you anything, and 15 minutes after you've got to deal with this. How many more amendments do you have?
The Chair: There are 40, I believe. We're on 32.
Mr Pouliot: We're on 32 and we have 40. Thank you.
The Chair: Sorry, 42. We're on number 32.
We're voting on government amendment 32. Shall the motion carry? Carried.
Government motion 33.
Mr Grimmett: I move that section 41 of the bill be amended by adding the following subsection:
"(1.2) Subsection 372(9) of the act, as enacted by the Statutes of Ontario, 1997, chapter 5, section 55, is repealed and the following substituted:
"Sharing so that no surplus or shortfall
"(9) The council of an upper-tier municipality that passes a bylaw under subsection (1) shall pass a bylaw requiring adjustments between the upper-tier municipality and the lower-tier municipalities so that neither the upper-tier municipality nor any lower-tier municipality has a surplus or shortfall as a result of the phase-in of 1998 assessment-related tax increases or decreases."
By way of background, this amendment clarifies that neither an upper tier nor a lower tier shall be in a surplus or deficit position solely due to the financing of a phase-in and requires the sharing of any surplus or deficit to ensure this.
The Chair: Shall the motion carry? Carried.
Government motion 34.
Mr Grimmett: I move that subsection 372(11) of the Municipal Act, as set out in subsection 41(2) of the bill, be struck out and the following substituted:
"Application to payments in lieu
"(11) For the purposes of this section, payments in lieu of taxes, other than an amount referred to in subparagraph ii of paragraph 24 of subsection 3(1) of the Assessment Act or an amount received under section 157 or subsection 158(4) of this act, shall be deemed to be taxes and the land with respect to which such payments in lieu of taxes relate shall be deemed to be rateable for municipal purposes."
The reason for the amendment is that it clarifies that properties on which payments in lieu are not based on assessment are excluded from phase-in calculations.
The Chair: Shall the motion carry? Carried.
Government motion 35.
Mr Grimmett: I move that subsection 372(12) of the Municipal Act, as set out in subsection 41(2) of the bill, be amended by striking out the second sentence.
The proposed amendment is a technical one which would delete a phrase that is redundant relating to the amount of taxes a municipality is required to pay to a school board.
The Chair: Shall the motion carry? Carried.
Shall section 41, as amended, carry? Carried.
I have no proposed amendments for section 42. Shall section 42 carry? Carried.
Section 43: I have government motion 36.
Mr Grimmett: I move that subsection 373.1(11) of the Municipal Act, as set out in section 43 of the bill, be struck out and the following substituted:
"Definition
"(11) In this section,
"'land used for the purposes of the bridge or tunnel' includes land at the end of the bridge or tunnel used in connection with the bridge or tunnel, including duty-free stores."
By way of explanation, the previous wording was too broad. This amendment clarifies that land at the end of a bridge or tunnel, including duty-free shops, will be considered to be land used in connection with the bridge or tunnel. These entities are subject to municipal tax but not subject to education tax.
Mr Phillips: Tutti what?
Mr Grimmett: Tutti frutti.
The Chair: Shall the motion carry? Carried.
Shall section 43, as amended, carry? Carried.
Sections 44 to 46: I have no proposed amendments. Shall sections 44 to 46 carry? Carried.
Section 47: I have government motion 37.
Mr Grimmett: I move that section 442.1 of the Municipal Act, as set out in section 47 of the bill, be struck out and the following substituted:
"Rebates to eligible charities, etc.
"442.1(1) The council of a municipality, other than a lower-tier municipality, may pass a bylaw providing for rebates of taxes to all eligible charities and to any similar organizations specified in the bylaw, for the purpose of giving the charities and similar organizations relief from taxes on property that they occupy.
"Amount of relief
"(2) The rebate provided by a bylaw under subsection (1) to each eligible charity and similar organization shall not exceed 40% of the taxes that would otherwise be levied in respect of land occupied by the charity or similar organization.
"Equal treatment
"(3) The amount of the rebate provided by a bylaw under subsection (1) to each eligible charity and similar organization shall be the same, when expressed as a percentage of the taxes that would otherwise be levied in respect of land occupied by each charity and similar organization.
"Application
"(4) A bylaw under subsection (1) may apply only to land in,
"(a) the commercial property class or the industrial property class, as prescribed under section 7 of the Assessment Act; or
"(b) a property class prescribed under section 7 of the Assessment Act that is not mentioned in subsection 7(2) of that act.
"Who gives rebates
"(5) Rebates under a bylaw under subsection (1) shall be given,
"(a) if the bylaw is passed by the council of a local municipality, by the local municipality;
"(b) if the bylaw is passed by the council of an upper-tier municipality, by the lower-tier municipalities.
"Sharing costs of rebates
"(6) The costs of a rebate of taxes on a property shall be shared by the municipalities and school boards that share in the revenue from the taxes on the property in the same proportion as the municipalities and school boards share in those revenues.
"Definitions
"(7) In this section,
"'eligible charity' means a registered charity as defined in subsection 248(1) of the Income Tax Act (Canada) that has a registration number issued by the Department of National Revenue;
"'lower-tier municipality' has the same meaning as in section 361.1;
"'upper-tier municipality' has the same meaning as in section 361.1."
By way of explanation, the regulatory power to provide rebates of taxes to eligible charities and similar organizations occupying land in the commercial and industrial property classes is removed and replaced with legislative provisions allowing municipalities with ratio-making powers to provide rebates to such organizations.
Charities are defined to be the same as registered charities defined under the Income Tax Act.
Municipalities would have the power to include similar organizations as specified by bylaw to be eligible for the tax rebate. Municipalities may rebate up to an amount equal to 40% of the taxes payable. The percentage amount of the rebate must be the same for all organizations named in the bylaw. The cost of the rebates will be shared by the upper-tier municipality, if any, and with any school boards.
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Mr Pouliot: You attempt to address it. It's widely expected that the number of charities and the needs that they will be asked to address will only increase. In fact, they will increase dramatically because of your agenda. When we're asking the municipality not to go more than 40%, let's not dream here; municipalities will be very hard pressed in most cases to give a break to anybody. So, again, you can play the good Samaritan role by saying, "We give you the right to decrease and so on."
The reality is that the possibilities to enact, to pass along a saving to give people a break or encouragement, will just simply not be there. The need will only increase. One reason why it will increase is because you had a choice to keep some basic services, or more of the basic services, to elect for the status quo and pay down the debt, but good economist that you are, you have chosen to increase the burden by borrowing money to give a tax break. It makes very little sense to me in terms of business acumen.
This is a choice that you've made. You claim to have been $11 billion in deficit, plus the debt, and instead of focusing on this while maintaining services, what you've done is said: "Okay, it's party time. We'll ask that the credit limit on our plastic be increased." So you went on another big spending bender, all with borrowed money. Now you find you must face the consequences and find $5.4 billion a year.
Incidentally, it benefited the richest people in the province because there was no capping. We know of some cases where the tax per year, the benefit of it, is over $1 million a year when all the increments take place. I saw again yesterday that the CEO of Magna International, because of their bonus system, made in excess of $25 million in remuneration, which is salaries and bonus options. I don't begrudge the person that in the least but that person will save, by virtue of your 30% decrease, in excess of $2 million in one year. At the same time you close hospitals, but that's okay.
Now, let's not dream in colour here when we say that "each eligible charity and similar organization shall not exceed 40%." It's nicely said, it's well intended but it has absolutely no meaning. People will not be in a position to pass along a break because of your cutbacks.
The Chair: Further questions or comments? Shall government motion number 37 carry? Carried.
Shall section 47, as amended, carry? Carried.
I have no proposed amendments for sections 48 through 64. Shall sections 48 through 64 carry? Carried.
On section 65: I have a proposed government amendment, number 38.
Mr Grimmett: I move that subsection 65(2) of the bill be amended by adding the following subsection as subsection 52(3.2) of the Power Corporation Act:
"Same
"(3.2) The corporation shall pay in each year to any municipality in which is situated land used as a transmission or distribution corridor and leased to another person for rent or other valuable consideration the total amount that the tax rate in the municipality for the property class prescribed under the Assessment Act in which the land is classified would produce based on the current value of the land as defined in section 1 of the Assessment Act and subsection (2) does not apply with respect to the land."
By way of explanation, this amendment to the Power Corporation Act adds a new subsection to specify that Ontario Hydro transmission or distribution corridor land leased to another person for rent or other valuable consideration will be taxed on the basis of current value rather than as a right of way.
The Chair: Questions or comments? Shall the amendment carry? Carried.
Shall section 65, as amended, carry? Carried.
I have no proposed amendments for sections 66 through 72. Shall sections 66 through 72 carry? Carried.
Mr Wettlaufer: I believe there is an amendment for section 72.
The Chair: That's a new section 72.1, so I think we can carry 72. What we'll do, if it's the committee's pleasure, is pass sections 66 through 72 and then deal with 72.1 as a new section. I'll ask the question again: Shall sections 66 though 72 carry? Carried. On section 72.1, there is a proposed new section from the government side.
Mr Grimmett: I move that the bill be amended by adding the following section:
"Interim levy bylaw
"72.1 A bylaw passed in December of 1997 levying rates for the purposes of interim financing under a provision of the Municipal Act or any other act ceases to have any effect on January 1, 1998. This section does not apply to a bylaw passed under section 370 of the Municipal Act, as enacted by the Statutes of Ontario, 1997, chapter 5, section 55 and amended by section 38 of this act."
By way of background, this section provides that only section 370, as amended in this bill, is to be used for the purposes of adopting an interim levy bylaw.
Mr Pouliot: What is the significance of this?
Mr Tassonyi: When I had to go up to Thunder Bay for a municipal finance officers' conference, I found out that the city of Thunder Bay had a private act which provided for interim financing under its provisions. Our intent was that the provisions in this bill be used by municipalities to pass bylaws in December taking effect as of January 1 to provide for the interim financing. It is meant to cover both the Municipal Act and any other private municipal act that's out there to use the provisions here.
The Chair: Further questions or comments? Shall the new section 72.1 carry? Carried.
Sections 73 through 75: I have no proposed amendments. Shall sections 73 through 75 carry? Carried.
On section 76: I have three government motions, numbers 40, 41 and 42. I'll ask Mr Grimmett to start with number 40, please.
Mr Grimmett: I move that subsection 76(1) of the bill be amended by striking out "subsection (2)" in the first line and substituting "this section."
This is a housekeeping change to the commencement section of the bill.
The Chair: Comments or questions? Shall the section carry? Carried.
Number 41.
Mr Grimmett: I move that subsection 76(2) of the bill be struck out and the following substituted:
"Same
"(2) Sections 3 and 11, part II (sections 21 to 48), part III (sections 49 to 70) and sections 71, 73 and 74 come into force on January 1, 1998.
"Same
"(3) Subsection 6(2) and section 7 come into force on a day to be named by proclamation of the Lieutenant Governor."
This new subsection postpones the provisions regarding the cessation of apportioning value to tenants until a proclamation date is named by the Lieutenant Governor in order to maintain the current provisions until the Education Act is changed.
Mr Pouliot: Maybe I should have more self-discipline, but I don't totally get it. What has this got to do with Bill 160? What's the connection here? You just said, "until Bill 160 comes into effect." What's the connection here?
Mr Grimmett: Mr Sholtack, could you provide some help on that?
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Mr Sholtack: Certainly. The provisions referred to are the ones that delete the current subsection 14(3) of the Assessment Act, which provides for the allocation of tenants' assessments in multi-tenanted properties. Section 7 provides for the elimination of tenants' assessments under the act. Currently tenants are assessed and that's done for business occupancy tax purposes. With the new act, there'll be no need for that and so those provisions are being removed.
However, there will be new requirements enacted under Bill 160 with respect to allocation of residential tenants' assessments for school support purposes and these provisions are to come in at the same time. One is not going to anticipate the other. These will be repealed when the new provisions under the Education Act come in.
Mr Pouliot: Thank you. If the new Education Act comes in.
Mr Sholtack: Certainly.
Mr Pouliot: If and when. That scares me when I hear it. I feel uneasy when I hear "160." When we mesh the legislation we have to be -- I'll give you one example: At one mesh, it's legislation to marry Bill 136. One would have had to change that legislation because the way Bill 136 was presented and its final analysis -- it was not the same thing at all. It could have talked about -- completely different and so on. The government was forced to backtrack, we know. It was sort of sounding the bugle of retreat in this case.
When I hear "Bill 160," I don't know what twist it will take. It depends on what channel I flick on. All I know is that this is the biggest protest in the history of North America in terms of the teaching profession. It's the biggest struggle ever in North America.
I don't know what Bill 160 will do and I wouldn't wish to have any legislation -- I know it has to be -- tied to Bill 160, because from what I read in the newspapers and also from what I watch on television, it doesn't augur well before, during and after. I would not want to depend on Bill 160. I don't know what they will -- the government does not know clearly what it will do.
Mr Sholtack: If this is some reassurance to you, this is the effect of these provisions, that the repeal of these provisions will only happen upon proclamation. They will continue, should Bill 160 not be enacted, so this should give you some comfort on that score.
Mr Rollins: He doesn't realize that --
Mr Pouliot: Oh, I do realize, sir --
Interjection.
Mr Pouliot: Dear colleague, you are of little help when all you succeed in doing is not a stay of execution. You've succeeded in reducing the voltage. Nothing with your law, I'm going to tell you, comforts me because you consistently disturb the marketplace and it hurts a lot of people. I want to see stability and I want to see things prosper. You are screwing up big time and this is the final straw on this ill-fated bill.
What you are seeing with Bill 160, by the way, might pale in comparison to what you will see next June and July when people get their property tax bill. In some cases it will triple.
The Chair: Further comments or questions? Shall government motion number 41 carry?
Government motion number 42.
Mr Grimmett: I move that section 76 of the bill be amended by adding the following subsection:
"Same
"(4) Subsection 20(2) comes into force on a day to be named by proclamation of the Lieutenant Governor."
This specifies that the new subsection of the bill dealing with palpable or obvious errors in the assessment roll would come into force when proclaimed by the Lieutenant Governor.
The Chair: Comments or questions? Shall the motion carry? Carried.
Shall section 76, as amended, carry? Carried.
I have no proposed amendments to section 77. Shall section 77 carry? Carried.
Shall the title of the bill carry? Carried.
Shall the bill, as amended, carry? Carried.
Shall I report the bill, as amended, to the House? Carried.
I just want to give committee members notice. When the House comes back on the 17th, we will be preparing for pre-budget hearings so we will call the subcommittee. Committee members, if you have any ideas or anything you want to have input on you had better start thinking about it now.
I now adjourn until the call of Chair.
Mr Phillips: Light the fuse when this thing blows up in July.
The committee adjourned at 1516.