30e législature, 3e session

L039 - Thu 22 Apr 1976 / Jeu 22 avr 1976

The House met at 2 p.m.



Hon. Mr. Auld: Mr. Speaker, I have a message from the Honourable the Lieutenant Governor, signed by her own hand.

Mr. Speaker: By her own hand, Pauline McGibbon, the Honourable the Lieutenant Governor, transmits estimates of certain sums required for the services of the province for the year ending March 31, 1977, and recommends them to the legislative assembly, Toronto, April 22, 1976.

Statements by the ministry.


Hon. Mr. Davis: Mr. Speaker, first, on behalf of the Legislature and the government, I would like to express, through you, best wishes to our sovereign, Her Majesty the Queen, on the celebration of her 50th birthday. I am asking the Honourable the Lieutenant Governor to convey these best wishes to Her Majesty.


Hon. Mr. Davis: While I am expressing best wishes, I think I would like to -- in fact, I know I would -- express on behalf of all members of this House congratulations to the Minister of Correctional Services (Mr. J. R. Smith) on the announcement of his upcoming marriage.

Mr. Reid: You gave up too soon, John.

Mr. Peterson: No kidding.

Hon. Mr. Davis: I am sure, Mr. Speaker, that he will find marriage the same valuable correctional institution that the rest of us have, at least those of us who have experienced it.

Mr. Peterson: Is it Betty, or which one is it?

Hon. Mr. Davis: I don’t know whether you are all being invited or not, but I thought you should all know.

Mr. Roy: He’s got your permission, has he?

Mr. Gaunt: Since you got in the cabinet you slowed down.

Mr. Speaker: Will the hon. Premier yield?

Mr. Lewis: If I may, Mr. Speaker, simply say, in the unaccustomed role as Her Majesty’s loyal opposition, that we share with the Premier in extending best wishes.

May I say to the Minister of Correctional Services that all of my colleagues extend to him, of course, heartfelt congratulations, and we work on the assumption that all of his children will be issued identity cards very early in life.


Hon. Mr. Davis: Mr. Speaker, today the Prime Minister of Canada confirmed his proposal that two conferences of first ministers be held in the coming months. The first conference would take place on May 6 at Sussex Dr., in private, and would consider gas and oil prices, the unilateral federal decision to revise the method of calculating the revenue guarantee, and federal proposals on patriation and the constitution. The second conference would be scheduled for approximately mid-June, to deal with shared-cost programmes and other aspects of federal-provincial fiscal arrangements.

Members will recall that on April 9, the Treasurer (Mr. McKeough) tabled in the House, on my behalf, the response of the government of Ontario to Mr. Trudeau’s proposal to hold these two separate first ministers’ conferences. We suggested to the Prime Minister of Canada that these items should be discussed at a single meeting of first ministers in May, prior to the bringing down of the federal budget, and that this meeting be in public.

I am disappointed that Mr. Trudeau has chosen not to appreciate the logic and urgency of our proposal for a single open conference to deal with related matters of vital concern to this province and to the country.

In our opinion, an increase in the price of oil and gas of the magnitude that we understand is being contemplated by the federal government will have undesirable economic and fiscal effects. We are concerned that the degree of income redistribution resulting from such an increase could have a serious dampening effect on the economic recovery of Canada, which has just got under way. We are concerned that the increase will have a serious inflationary impact, thereby weakening and discrediting the national anti-inflation programme. We are concerned that such an increase will further divert funds into the hands of government and away from the private sector, where they are needed for investment and expansion. We are concerned that such an increase will further aggravate fiscal disparities among the regions of the country. In this regard, we cannot understand the logic of considering oil and gas prices on May 6 in isolation from the subject of equalization payments, which is not due to be discussed until mid-June. Such a piecemeal and un-co-ordinated approach makes no sense to us at all.

With regard to energy prices, the Minister of Energy (Mr. Timbrell) has put forward an alternative pricing system for crude oil. In my opinion, Ontario’s flexible proposal can accommodate the diverse needs and interests of the producing provinces, of the consuming provinces, of the federal government, of industry and of the general public.

In short, Ontario has designed a positive and viable alternative to the present crude oil pricing policy. That alternative has not been refuted nor subjected to irreconcilable criticism.

Our position is clear. It is the basis of a sound, realistic, national policy for crude oil pricing. It is the position which I shall advocate strongly on May 6.

With regard to federal-provincial fiscal relations, we continue to advocate that all aspects of current fiscal arrangements he discussed before the federal budget is finalized and before commitments are made in programme areas. This agenda item should include such issues as the revenue guarantee, the equalization formula and the financing of the major shared-cost programmes. if we are to reduce the rate of growth of the government sector in Canada, if we are to minimize federal-provincial policy and programme entanglements, if we are to eliminate waste and inefficiency in public spending, this country must adopt a more integrated approach to federal-provincial fiscal relations.

A meeting of health ministers has been called by the federal government for April 27-28, with health financing as a major item on the agenda; a meeting of welfare ministers has been scheduled for the first week in June to consider new programme and financing arrangements in the social services area; however, the meeting of first ministers called for the express purpose of considering new federal proposals on the major shared-cost programmes is not to be held until mid-June. Given this un-co-ordinated schedule of meetings and the unwillingness of the federal government to accept our proposal for a single meeting, I have asked the acting Minister of Health (B. Stephenson) and the Minister of Community and Social Services (Mr. Taylor) to request of their federal counterpart that financing matters not be discussed at the upcoming ministerial meetings so that the first ministers will have an opportunity to consider the general question of shared-cost programmes and other aspects of federal-provincial fiscal relations.

Mr. Trudeau has indicated that the May 6 meeting will be held in private at 24 Sussex Dr. We regret this decision. Canadian energy policy is just too important for Canadians to be denied access to the nature and implications of those discussions.

The same holds true for federal-provincial fiscal relations. We hope that the federal government will agree that the June conference should be open to the public, and we will indicate our desire in this respect formally to the Prime Minister. And, Mr. Speaker, I will table the Telex received from Mr. Trudeau.


Hon. Mr. Auld: Mr. Speaker, on Tuesday, April 20, the leader of the third party asked a question in the House on Management Board orders as they related to the Ministry of Education. His concern centred around some $77 million of additional spending which was authorized by way of Management Board orders.

Mr. Speaker, my concern on this matter relates to the misunderstandings which have developed in this House over Management Board orders and their relationship to 1975-1976 spending levels. Suggestions have been made that perhaps over $100 million of additional unreported spending has been made by way of Management Board orders and that this spending was not included in the 1975-1976 expenditures reported in the Ontario budget 1976.

I want to stress that these suggestions are false. The total expenditure shown in the Treasurer’s 1976 budget of $11,391 million includes all Management Board orders which the Management Board has approved up to the time the budget went to press; plus all anticipated Management Board orders which we expected would be required for planned expenditures, specifically in relation to salary awards and that kind of thing.

In particular, the expenditure of $11,391 million includes the Management Board orders for $76.4 million, which were the subject of the question by the leader of the third party. The amount of $76.4 million was required for additional expenditures on the general legislative grants to school boards.

I would like to stress that the increased costs in education were first made public in October, 1975, when the Treasurer tabled the Ontario Finances report to the end of the second quarter; that is, to Sept. 30, 1975 and I’m sure all hon. members have seen it. If they will look at table 3, they will see the budget estimates, the revised estimates and, in this case, the increase. This information was provided because the ministry was aware at that time that the amount provided in the estimates for general legislative grants might not be adequate since more school boards were spending up to the ceilings than had originally been anticipated. The estimate in September, 1975, of $71 million proved to be $5.4 million less than the amount finally required.

I would also like to explain to the hon. members that the additional funding which has been made by Management Board order, or is anticipated to be made by Management Board order, is always reported in Ontario Finances. These reports, which the Treasurer issues quarterly, contain a revised forecast of expenditures to the end of the fiscal year, based on the best information available at the time Ontario Finances goes to press.

A quick examination of Ontario Finances will show that the majority of the increase in 1975-1976 expenditures from the 1975 budget was forecast in the Sept. 30, 1975, estimate. The total expenditure forecast at the end of the second quarter was $11,382 million, while the 1976 Ontario budget revised this upward slightly to $11,391 million. The increase in spending from the $11,028 million shown in the 1975 budget, which amounts to $363 million, is authorized either by supplementary estimates or Management Board orders. I should stress that the $11,391 million is an interim expenditure amount for 1975-1976 and some variation from this figure can be anticipated when the actual expenditure is finally determined by the Provincial Auditor later this year.

In summary, the $11.4 billion total expenditures reported by the government since Sept. 30, 1975, represents the best interim forecast of all spending for 1975-1976, including Management Board orders.


Mr. Roy: The government didn’t know that two days ago, eh?


Hon. Mr. Handleman: This afternoon I will introduce a number of amendments to the Residential Premises Rent Review Act.

One of the amendments ensures that all periodic tenancies are included within the scope of the legislation. It has been suggested that more explicit wording may be needed to ensure that the intent of the law is sufficiently clear.

A second amendment clarifies the fact that a landlord who has benefited from a rent increase of up to eight per cent without a rent review may not have another such increase for a period of at least 12 months.

A third amendment makes it possible for a tenant --

Mr. Cassidy: The government wouldn’t accept that three months ago.

Mr. Speaker: Order.

Hon. Mr. Handleman: -- to deduct previous overpayments of rent from future rent cheques until a rent review order has been fully satisfied. The Act currently limits these deductions to one month only when some of the rebates are in excess of one month’s rent.

The most substantial amendment will exempt certain kinds of rental units from the rent review programme. We are proposing that rental units which are owned by non-profit institutions, in which rents are already subsidized, should be exempted from rent review. This exception includes buildings owned and operated by churches, universities and colleges. It also includes government projects with rent-geared-to-income or limited dividend features, or any other buildings where rent is already subject to government approval. It simply makes no sense to apply rent review legislation to housing which is already reviewed, administered and controlled by government or governmental agencies.

In bringing forward these amendments, it is the government’s hope that our resources can be concentrated in the areas of greatest need where no other controls exist.


Hon. W. Newman: Mr. Speaker, you will note that the estimates today include an item of $25.6 million for a farm income stabilization plan. I intend to introduce legislation in the near future enabling such a plan to be applied to a wide variety of agricultural commodities.

Federal action could still alter our estimates of $25.6 million as the government of Ontario’s share of stabilization premiums for this fiscal year. If it should prove too low, the government shall reorder its priorities to provide the extra funds needed for the legislation.


Hon. Mr. McKeough: Mr. Speaker, I am tabling today for consideration of members a staff paper entitled Oil and Gas Pricing and Trade Competition: An Ontario View.

As I emphasized in the budget statement earlier this month, we are concerned that a further round of oil and gas price increases could seriously damage the competitive position of our economy, particularly at this time when it is vitally important that we win our way back into US markets. There are a number of disturbing factors which are reducing the competitiveness of our industries --

Mr. Bullbrook: Why doesn’t the government tell Alberta that? Why doesn’t the Premier tell Mr. Lougheed that?

Hon. Mr. Davis: They set the price.

Mr. Speaker: Order, please. Let the hon. minister finish his statement.

Hon. Mr. McKeough: -- including lower productivity levels, high interest rates and the relatively high level of the Canadian dollar. Higher energy prices will simply compound the situation.

This paper provides a technical analysis of the implications for Ontario’s competitive position of possible increases in the price of oil and gas. The paper shows that, in general, Ontario industries are somewhat more energy-intensive than their US counterparts. This means they are more adversely affected by increases in the price of oil and gas.

I hope that this paper will contribute to public discussion concerning the development of a better energy pricing policy for Canada based on rational objectives and current economic reality.


Hon. Mr. McKeough: I thought it wise to inform members that when the Corporations Tax Amendment Act goes to the committee of the whole House, I have asked the Minister of Revenue (Mr. Meen) to move an amendment to the section with respect to the premiums tax on insurance companies.

The life insurance companies have been making representations to Ottawa about the adverse impact on their business arising from federal tax laws. In particular, they are concerned about the non-neutrality of the income tax system in respect of different forms of savings. We agree that modifications are needed, and we would hope that changes may be forthcoming in the May federal budget. Ontario will parallel these federal changes.

Taking this dimension into account, as well as the competitive position of our life insurance companies in the US market, the Minister of Revenue will propose an amendment to the premiums tax increase. Instead of the across-the-board rate increase from two per cent to three per cent as originally proposed for life insurance, the one per cent increase will be applied only to the non-savings portion of premiums; and for life, accident and sickness insurance, the increase will be applied only to contracts entered into on or after April 7, 1976. This will exempt existing individual life insurance and the savings part of future life policies from the tax increase. We will follow the same phasing-in procedure of applying the tax only to new business as in our 1973 corporations tax amendments in respect of fraternal organizations.

There will be some revenue loss from the original proposal as a result of this amendment, but I expect to recover this via changes following the federal budget. Modification of the 15 per cent federal investment tax would broaden the base for the profits tax on life insurance companies, thereby generating a higher corporate tax yield to the province.

The whole spectrum of taxation on life insurance companies needs to be reviewed. The present system of provincial premiums tax plus federal investment tax, both of which are deductible against profits tax at both levels, has become excessively complex and unwieldy. The province, therefore, intends to undertake an in-depth study of this area, with the objective of securing a better tax structure for the long term and one which generates adequate revenues to the province.


Hon. Mr. McKeough: Finally, on Tuesday the leader of the third party asked a somewhat fuzzy question of my colleague, the Minister of Community and Social Services (Mr. Taylor). With the indulgence of other members for a moment, I will undertake a little reality therapy for the benefit of the Liberal leader.

Mr. Singer: Is that a ministerial statement?

Mrs. Campbell: The Treasurer has no expertise in that area.

Mr. Singer: What about ministerial statements being non-controversial?

Mr. S. Smith: He said he didn’t have your leash. Who is it today?

Hon. Mr. McKeough: First of all, the federal-provincial conference of April 1 and 2 to which the leader alluded was a conference of finance ministers, not a conference on guaranteed annual income.

Second, at such federal-provincial conferences, policy initiatives involving financing are discussed by provincial Treasurers and the Minister of Finance. The document I tabled was a finance study analysing the costs of implementing Mr. Lalonde’s version of a guaranteed annual income.

Third, the Ontario study showed definitely that the federal government had grossly underestimated costs by $2 billion a year, and demonstrated that there was no basic reform achieved by Lalonde’s huge “add-on” support and supplementation proposal.

To clarify what is obsolete and what is current about federal thinking on income security, let me establish several simple facts.

The September, 1975, federal proposal which Ontario analysed was the result of 2½ years’ work. It was supported by seven volumes amounting to almost 1,000 pages of details and cost figures. Unfortunately, quantity overwhelmed quality in the federal documents. The more recent proposal of --

Mr. Roy: You just know you are in trouble when you require a statement like that.

Hon. Mr. McKeough: The more recent federal proposal, that of February, 1976, consists of eight pages and no details. Subsequent to Ontario’s cost exposé of the only concrete proposal on the table --

Mr. Shore: Exposé? Oh, Darcy.

Mr. Singer: What security book are you bringing out next?

Hon. Mr. McKeough: Mr. Lalonde put a cost figure at $350 million on his new eight-page plan. As well, this cost estimate is totally unsupported by any detail or documentation. When such necessary detail is provided, Ontario intends to do an accurate costing so that governments can make informed decisions rather than embark blindfolded on fiscal ferry rides.

Mr. Roy: Sounds like one of your reports.

Mr. Lewis: Are you starting to write your own speeches?

Mr. S. Smith: What a rationalization.

Mr. Cassidy: What is a fiscal fairy, if we could ask?

Hon. Mr. McKeough: Well, you would recognize them over there, I can tell you that -- right in that group right there, there are a lot of them.


Mr. Roy: How about a little order?

Mr. Speaker: Order, please. Let’s get on with the business of the House.

Mr. S. Smith: I think the Treasurer was better when Taylor did have him on a leash.

Mr. Lewis: I could take the Treasurer to the Human Rights Commission for that.

Mr. Speaker: Order.

Hon. Mr. McKeough: Mr. Speaker, the skimpy information we have been able to glean about Mr. Lalonde’s new version of a guaranteed income is as follows.

Mr. S. Smith: You have at least learned that it is a new one.

Mr. Singer: The Treasurer will have to bring out another exposé.

Hon. Mr. McKeough: It drops out all single people and all childless couples under 55. This leaves families with children as the main clientele, generally the same group which currently receives family allowances.

Under this limited objective I leave it to the imagination of the leader of the third party whether this warrants a new programme with a fancy title, rather than some simple modifications to the existing family allowance programme.

I would like to conclude this therapy session with a simple moral. If we are to achieve real progress in Canada’s income security system we must do it by reforming the existing mishmash of programmes --

Mr. S. Smith: And by refuting those that have already been withdrawn.

Mr. Speaker: Order, please.

Hon. Mr. McKeough: -- rather than adding on new programmes at great expense --


Hon. Mr. McKeough: -- and further increasing the burden on working taxpayers.


Mr. Speaker: Order, please.

Hon. Mr. McKeough: The Minister of Community and Social Services and I are in complete and regular communication and in total agreement on this approach to reforming Canada’s income security system.


Hon. Mr. McMurtry: Mr. Speaker, today I will be tabling a report of the Ontario Law Reform Commission on landlord and tenant law.

Part I of the report deals with those aspects of the fundamental law of landlord and tenant which are applicable to all tenancies, whether residential or non-residential. While the technical topics dealt with in Part I are not of broad popular interest, the commission’s discussion for these subjects is highly significant to those who desire to rid the statute law of useless, archaic doctrines and make it more relevant to contemporary social and economic needs.

Part II of the report is concerned with an examination of certain aspects of the law relating specifically to non-residential tenancies -- for example, commercial, industrial and agricultural tenancies. Part II of this report deals with certain subjects which had previously been dealt with in the 1968 interim report. However, in that report they were dealt with in the contest of residential tenancies and in this report they are dealt with in the substantially different context of non-residential tenancies.

Part III of the report proposes a standard form tenancies agreement for all residential tenancies. The report contains a draft of a standard form agreement based on Part IV of the Landlord and Tenant Act prior to its recent amendment. The report also contains detailed proposals pertaining to the relationship between a standard form tenancy agreement and the Landlord and Tenant Act, the substantial provisions of a standard form agreement and the use of a standard form agreement. This part of the report should be of general interest to landlords and tenants of residential premises.

This major report contains, in all, 76 recommendations. The proposals contained in the report, if implemented, would require substantial revision of the Landlord and Tenant Act. While the report does contain some suggestions for draft legislation, considerable work would be required to translate the recommendations into legislative form.

My officials and I will be studying the implications of the report and will be analysing its recommendations in light of the recent amendments to the Act. This study and analysis will enable the government to develop an appropriate legislative response to the report.



Hon. Mr. McMurtry: Further, Mr. Speaker, I am pleased to provide an answer to a question asked by the member for Timiskaming (Mr. Bain) on April 1. He asked what steps the government is willing to take to resolve the caution placed by the Bear Island Indian Foundation.

In August, 1973, cautions were registered under the Land Titles Act on behalf of the Timagami, Bear Island, Indian band in respect of all unpatented land in 110 townships in the districts of Nipissing, Sudbury and Timiskaming. The 110 townships comprise about 4,000 square miles.

This action has caused inconvenience and concern to the public and to companies carrying on business in the area. Also, the Ministry of Natural Resources has been prevented from discharging its land administration responsibilities in the area since 1973; no freehold or leasehold interests have been registered in the 110 townships since that time.

The cautions were registered on the application of the Bear Island Foundation, which claims that it is interested in the lands as assignee of the Timagami Band of Indians who are, it is alleged, “entitled to be registered as owner or owners of the land with possessory, absolute or qualified title.”

The basis of the claim lies in the contention that neither the Timagami band as then constituted nor anyone acting for the band ever entered into a treaty surrendering its interest in the lands to which the caution applies, and no legislation has ever been enacted extinguishing that interest.

It must be recognized that it is not within the constitutional power of a provincial government to resolve unilaterally any Indian land claim, since the matter of “Indians and land reserved for the Indians” is within the exclusive jurisdiction of the federal government under the British North America Act.

However, the government of Ontario recognized a responsibility to have this matter resolved. To this end, following the imposition of the cautions, representatives of the province did visit the band to ascertain the reasons behind the imposition of the cautions and to learn exactly what the band was seeking to achieve. The discussions were unsuccessful on both counts.

On June 2, 1975, the lawyer for the Timagami band sewed notice under the Proceedings Against the Crown Act of his intention to seek redress on behalf of the band from the Province of Ontario “for past unlawful interferences, discontinuance or compensation for present unlawful interferences.”

Nothing further has been heard from the band since this notice was received.

Mr. Renwick: Why should there be?

Hon. Mr. McMurtry: I am advised that the Ministry of Natural Resources is completing a detailed analysis of this problem as a basis for a decision on the further action that the government will take in the matter.

Mr. Lewis: About three years later.

Mr. R. S. Smith: That’s what you said two years ago.

Hon. Mr. McMurtry: In the meantime, no steps have been taken by the government to apply to the courts for a legal resolution of this problem, because it has been considered that every avenue of negotiation should be explored in order to avoid the confrontation that would result from legal action --

Mr. Lewis: Good! Just get Natural Resources going.

Hon. Mr. McMurtry: -- not to mention the fact that such action of necessity would be protracted and expensive.

Mr. Renwick: Legal action is not a confrontation. It is a resolution of the problems.

Mr. Lewis: Well, if the Ministry of Natural Resources --

Mr. Speaker: Order, please.

Mr. Lewis: Why wait three years to do this?

Mr. Speaker: Order, please.

Mr. S. Smith: Give them a penalty.

Mr. R. S. Smith: They haven’t had anybody up there for two years.

Mr. Speaker: Oral questions.


Mr. Lewis: First, Mr. Speaker, a question to the Minister of Agriculture and Food. In rough dollar terms, how much money was spent in the last fiscal year on the cow-calf stabilization plan? Does the minister recall?

Hon. W. Newman: Mr. Speaker, in the last year the cow-calf stabilization programme took in about $114 million and the total payout was about $22 million, if I remember correctly.

Mr. Lewis: By way of supplementary, would it be fair to say then that the $25 million under the farm income stabilization programme this year will go largely, if not exclusively, to the cow-calf stabilization plan?

Hon. W. Newman: No, not necessarily, because there’s a good possibility that Ottawa may get involved in the cow-calf programme. We don’t know at this moment in time whether they will or whether they won’t. That’s what’s made it very difficult. That’s why I made the statement today about the cow-calf programme in Ontario; I have no idea exactly how many will be enrolled.

Mr. Lewis: But by way of supplementary, isn’t it true, in fact, that the minister is engaged here in a not very elegant sleight-of-hand to call the cow-calf stabilization plan a farm income stabilization plan, which he really has no intention of implementing with dollars attached to it? What a lot of nonsense.

Mr. Speaker: Order, please.

Mr. Cassidy: That’s right, another deception.

Hon. W. Newman: With irresponsible people like the Leader of the Opposition, and I say it advisedly, who don’t understand the kinds of programmes we are implementing, who don’t understand what stabilization is all about, who don’t really fully understand it --

Mr. Lewis: Your agricultural land policy is incomprehensible.

Hon. W. Newman: Just let me finish. You asked the question.

Mr. Cassidy: Come on.

Hon. W. Newman: I said this would be a voluntary programme and the farmers would be putting in a portion too. Similarly the feds will probably put in a portion too and we could probably take this figure from $25 million to $75 million very easily with the input from both the feds and the farmers who are involved.


Mr. Lewis: May I ask the Minister of Consumer and Commercial Relations a question? Is he prepared to consider the requests that have been made to the government by the various public housing tenants’ associations, the Rent-Geared-to-Income Tenants’ Association, that they would be willing to be removed from the rent control legislation in Ontario if the government of Ontario would renegotiate a new geared-to-income rent formula with the federal government, which has not been renegotiated since 1989, and give to those tenants’ groups some voice on their respective boards? Is the minister prepared to undertake to do that in advance of this legislation?

Hon. Mr. Handleman: First of all, I don’t think the two problems are related.

Mrs. Campbell: They are related.

Hon. Mr. Handleman: We are not negotiating being in or out of the rent review programme. I recognize the concern of the public housing tenants with regard to the rent-geared-to-income scale. My colleague, the Minister of Housing (Mr. Rhodes), is working on that problem now but it is not a condition of being in or out. I think it is a condition that has existed for quite some time and I am sure my colleague will be able to deal with it in a very equitable manner.


Mr. Lewis: A question, if I may, of the Premier: Is it not possible for the Premier to say that he will attend the private meeting in May with the Prime Minister but he intends to make public the deliberations of that meeting so that, in fact, the public will know what has taken place, and that he undertakes to do that in advance of the privacy which he himself has repudiated and let everyone know, including the Prime Minister of Canada, that we won’t be party to that kind of an arrangement?

Hon. Mr. Davis: I think it is kind of obvious that the position of Ontario will be made public prior to the meeting.

Mr. Lewis: Ours will be, yes.

Hon. Mr. Davis: I think it will also be obvious to the public, whatever emerges from the meeting. Those two positions may be at variance but the people will know the position I have taken and they will know the conclusion that is arrived at by the meeting of first ministers.

Mr. Lewis: By way of supplementary, is the Premier prepared to undertake in advance to inform the public of the discussions that took place during the course of that meeting and the positions put by the various principals?

Hon. Mr. Davis: I don’t think it will be necessary. I think it is very obvious that some provinces will be requesting a certain figure and other provinces will be suggesting, as we have, an alternative, and I think it is fairly obvious that the federal government will make a decision. I don’t think one need even get into a question of going to what is a private meeting -- and I have asked for it to be public -- and being asked by my hon. friend to disclose in a public way what may be said in confidence by some of the first ministers of this country. Certainly, as far as I am concerned, I am more than prepared to make public what I say, and I think really that is the important part of it.

Mr. Kerrio: Get the Minister of Housing (Mr. Rhodes) to do it for Ontario Housing.


Mr. Lewis: I have a question, if I may, to the acting Minister of Health: I am tempted to ask the minister what, in any possible explanation, is going on at the Montfort Hospital in Ottawa in its negotiations with the ministry. But let me put the question to her this way: Is it true that Mr. Clusiau, the executive director of the institutional operations branch of the ministry, phoned the Montfort Hospital on Tuesday afternoon and told them that their psychiatric wing was closed down, resulting in anxious and frantic staff meetings throughout the day yesterday, not to mention the board, and then phoned back this morning to tell the hospital that in the 48 hours money had been found and their psychiatric wing would remain open?

Hon. B. Stephenson: The facts of the case are these. Last July, the 30-bed wing of the Montfort Hospital was approved for psychiatric service. There has been a great deal of delay, apparently, in readying that wing for the service and the hospital was to make application for the opening of those 30 beds to the ministry. Without notifying the ministry, they did open 15 beds. There was no provision for funding because the ministry had not been notified that the hospital was about to open the 15 beds --

Mr. Lewis: Oh come on. You have the budget before you.

Hon. B. Stephenson: -- as they were supposed to do. When the occasion arose that they asked for funds to fund the 15-bed unit, which they had opened unilaterally, they were informed that there were no funds at that point. However, we have ensured that the funding will be ready for the 15-bed unit as of today.

Mr. Roy: Supplementary?

Mr. Speaker: The Leader of the Opposition with a supplementary first.

Mr. Lewis: Is the minister denying that the director of the institutional operations branch knew for some considerable time that the psychiatric unit was open and functioning? After all, the Minister of Health (Mr. F. S. Miller) was supposed to open it, and everybody knew that. That was one of the reasons for the delay. But that aside, is the minister denying that a phone call was made to close that psychiatric wing down, and then 48 hours later reversed?

Hon. B. Stephenson: Mr. Speaker, I am not denying that any such phone calls were made. I do not know whether such phone calls were made; but I shall find out whether they were or not. I would not deny that.

Mr. Roy: Supplementary: How is it, first of all, that the minister didn’t know that decision was made? Secondly, when decisions are made of that magnitude, does the minister leave that to just a civil servant like Mr. Clusiau? Thirdly, is there any truth to the comments that he made to the administrator that not only were they going to remove about $912,000 from the Montfort Hospital, but they were looking for another $7 million in the Ottawa area?

Hon. B. Stephenson: In answer to the third question, I have no idea whether that statement was made or not. I shall attempt to find out whether such information was transmitted.

Mr. Roy: It was. It was made.

Hon. B. Stephenson: This is hearsay and I will --

Mr. Roy: What do you rely on?

Mr. Speaker: Order, please. The question is being answered.

Hon. B. Stephenson: The request, I gather, was made by Mr. Clusiau that he had no authorization to fund the 15 beds which had been opened, because the hospital had failed to notify the ministry as they are supposed to do so that the funding could begin.

Mr. Lewis: Oh, come on. You are too much.

Mr. Roy: Could the minister advise how her ministry did not know that the psychiatric wing was open, when I have a letter here dated April 14, 1976, when they are discussing whether weekend leave should be given to patients in that psychiatric unit? Does one hand not know what the other hand is doing in the ministry?

Hon. B. Stephenson: I have not seen a copy of that letter, Mr. Speaker. I would like to see that letter.

Mr. Roy: Well, I will send it to her.

Mr. Lewis: One final supplementary, to the acting Minister of Health: Since she made an error in the ministry in her calculation of 27 beds for the Great War Memorial Hospital in Perth, since she made an error in the ministry of $432,000 for the South Waterloo Memorial Hospital, since she made an error in her ministry of over $200,000 for the Owen Sound General and Marine Hospital, and now this fiasco with Montfort, isn’t it about time she cleaned up the incompetence of the Ministry of Health in its dealings with hospitals all over this province?

Hon. B. Stephenson: Mr. Speaker, to my knowledge, there were no errors made regarding the Owen Sound General and Marine Hospital. There were calculations based on differences regarding the services provided; the same thing at Waterloo. In fact, there were no errors made except on the basis of lack of information as provided by the hospital in terms of the Great War Memorial Hospital in Perth. We may have made some errors, and I shall not deny that the members of the staff of the Ministry of Health are not infallible -- unlike the members, of course, of the official opposition. The official opposition, of course, believe that they are totally infallible. We have no such illusions. However, we do attempt to do the best job possible, and we shall continue to do so on behalf of the people of this province.

Mr. Speaker: Any further questions; the Leader of the Opposition?

Mr. Roy: Can I ask a supplementary?

Mr. Speaker: No, I said that was a final supplementary. This is getting to be a debate.

Mr. Roy: That is what we want -- a debate. We would love a debate.

Mr. Speaker: Order, please. Not at this period. That was a final supplementary. The member for Hamilton West with a question.

Hon. Mr. Davis: Get into the debate.

Mr. Roy: I will. I will.


Mr. S. Smith: A question for the Attorney General: What is going on, Mr. Attorney General? Can be tell the House really what is happening with Browndale? I realise that he is very busy -- the playoffs are on and all that -- but seriously, how can --



Mr. Speaker: Order, please. Will the member place the question?

Mr. S. Smith: How can it be that the official in the Attorney General’s department denies that the Ontario Provincial Police have in fact started inquiries, that he now refuses to back up the Attorney General in his statement that there is an Ontario Provincial Police inquiry into Browndale? What is happening there? Is there or is there not a police inquiry? Will there be a public inquiry into the financing affairs of Browndale? Can we expect some real action and not just a runaround between Health and the Attorney General and his officials?

Hon. Mr. McMurtry: Mr. Speaker, the leader of the Liberal Party is very much error when he states that any official in my ministry stated that the Ontario Provincial Police were not involved.

Mr. Reid: They are all at the hockey games.

Hon. Mr. McMurtry: The fact of the matter is that the Ontario Provincial Police have had these documents for some weeks. What I learned after the leader of the Liberal Party’s question the other day was that the OPP had, together with the official in my ministry looking after the matter, decided that fundamental to any effective investigation was a complete audit of the Browndale operation and I am advised by the Ministry of Health that this audit will be complete by tomorrow.

Mr. Eakins: The audit is finished.

Mr. Reid: They are not very good with figures.

Mr. Speaker: Order, please.

Hon. Mr. McMurtry: And this will enable them to pursue the investigation that I ref erred to the other day.

Mr. Eakins: Why don’t you table the audit? It is completed.

Mr. Speaker: Any further questions?


Mr. Speaker: The member for Hamilton West with a supplementary first.

Mr. S. Smith: As a supplementary on this --

Mr. Yakabuski: You have a lot of gall, Stephen, asking a supplementary. Still on the payroll?

Mr. Speaker: Order, please. The member for Hamilton West.

Mr. S. Smith: -- can the Attorney General give us any assurance that a hearing will be held at which people who wish to bring evidence can come forward, people who have informed some of us that they have very important evidence to give but who cannot come forward unless subpoenaed under oath? Can the Attorney General assure us that the affairs of this so-called non-profit organization, which has so many dealings with a number of highly profit-making aspects of a very large empire, will be brought to public light and scrutiny by means of a judicial inquiry of some kind?

Hon. Mr. McMurtry: At this point it’s much in too premature to suggest that any judicial inquiry is warranted. But I would suggest to the leader of the Liberal Party that he exercise his responsibility, If there is something rotten in the whole Browndale situation, as he said on the radio yesterday --

Mr. S. Smith: There is plenty.

Hon. Mr. McMurtry: -- and if he has a lot of evidence accumulated --

Mr. S. Smith: And I do.

Hon. Mr. McMurtry: -- by his research staff, as he said yesterday, then he has a responsibility to turn it over to us and the Ontario Provincial Police.


An hon. member: Put your money where your mouth is.

Mr. S. Smith: Just ask for it and you’ll get it.

Mr. Speaker: Order, please. The hon. member for Hamilton West asked a supplementary. The hon. Leader of the Opposition, I believe, had one -- does he still have one?

Mr. Lewis: Its order to clear the air or to clarify matters as soon as possible, can an undertaking be given that the results of the audit and whatever it shows be tabled in the House and a statement be made to the Legislature as soon as possible?

Hon. Mr. McMurtry: I see no reason why that cannot be done, Mr. Speaker.

Mr. S. Smith: Continuing the same line of questioning, can the Attorney General not imagine a situation where information has been brought forward but which, unless provided under oath at a judicial inquiry, could be considered very damaging to people’s reputations and also damaging to those who provided the information? Can the Attorney General not possibly understand that a judicial inquiry is the only place that such evidence can actually be presented?

Hon. Mr. McMurtry: Mr. Speaker, my position has always been that judicial inquiries should not be used to go on fishing expeditions; that is simply an abuse of the process. A lot of people are victimized needlessly if this is the type of approach that the member is so enthusiastic about recommending. We must have some reasonable evidence on which to base the calling of such an inquiry, as you suggest. Again, I invite the member to turn over to us any relevant material that he has in his possession.

Mr. S. Smith: The minister has only to come and ask for it.


Mr. S. Smith: I have another question of the Attorney General. This has to do with the statement I made in the Legislature on March 12 concerning certain doings in the private laboratory situation in Hamilton. Can he tell us now whether he is prepared to order an investigation into that situation -- the one that was promised by the Premier (Mr. Davis) -- a public investigation into the private laboratory arrangements in this province? To assist the Attorney General I will now tell him that the name of the firm I referred to on March 12 in Hamilton is S and M Laboratories Ltd. -- it’s not Smith and McMurtry -- and that particular firm is the firm which is alleged in my statement of March 12 to have offered improper arrangements. Since March 12 no one from the ministry has spoken to me; perhaps the minister could explain why. Is he prepared to make good on the Premier’s promise of having a judicial inquiry into the private lab system in this province?

Hon. Mr. McMurtry: Firstly, I know of no such promise made by the Premier. Secondly, the Ontario Provincial Police are looking at a number of labs in Ontario and I will certainly ask them to contact the leader of the Liberal Party or his office, in order to benefit from any information he may have in respect to the lab he has just identified.

Mr. Lewis: By way of supplementary, could I ask the Attorney General please to phone the leader of the Liberal Party on a regular basis to request such information so it need not be done here?

Mr. S. Smith: That was really hilarious, Mr. Speaker. Six weeks ago I announced it in the House and I have not heard from the Attorney General. That’s a hilarious comment, really.


Mr. S. Smith: I would like to ask a question of the Treasurer with regard to the fairy tale he was telling us or his reality therapy which sounded to me more like play therapy or dream analysis. Could he explain to me how it is that Mr. Johnson of the Globe and Mail, could say the Treasurer was apparently unaware that the proposal of last year with regard to the guaranteed annual income had been withdrawn and a new proposal, welcomed by all the provinces, had been put in its place? Why did he not acknowledge, when he made his rather sensational accusations and denunciations of the federal plan that that plan had already been withdrawn in response to provincial pressures?

Hon. Mr. McKeough: Mr. Speaker, I would acknowledge that that was withdrawn. There is no great secret about that.

Mr. S. Smith: Why didn’t you acknowledge it then?

Hon. Mr. McKeough: Nevertheless, I think that it is of interest to the taxpayers of Canada --

Mr. Roy: Shout.

Mr. S. Smith: Why didn’t you acknowledge it at the time?

Hon. Mr. McKeough: You are proving to be a bigger apologist for Pierre Elliott Trudeau than Bob Nixon ever was. You really are.

Mr. S. Smith: Run on your record, Darcy.


Hon. Mr. McKeough: You are so much in the pockets of Ottawa it’s pathetic. Just pathetic.

Mr. S. Smith: You are going to have to run on your record, not the federal Liberals’.

Mr. Kerrio: You’re in bed with Ottawa, Darcy.

Mr. Speaker: Order, please. Could we get back to the answer now?

Hon. Mr. McKeough: You could almost bet that at that annual meeting you won’t get out of the federal hip-pockets. You will just stay there; you like it; you eat at it, you just love it.

I think it is of interest to the people of Canada that a plan which was documented by the federal government, 1,000 pages, 2½ years, happens to be out by $2 billion, I think that is of some interest to the taxpayers of this country and we will go on doing that sort of thing.

Mr. Roy: All sound and fury.


Mr. Speaker: Order, please.


Mr. S. Smith: A question for the acting Minister of Health: With regard to Chedoke Hospital and the regional health council and her statement of two days ago, could the minister explain why, if she was so pleased with the wonderfully valid proposals made by the health council, she felt compelled to make some form of counter-proposal, as she termed it, which takes the very guts out of the proposal the health council itself made?

Hon. B. Stephenson: Mr. Speaker, I doubt very much if the counter-proposal which I did make removed anything from the proposal which the district health council made. It was discussed at the time of our meeting. I asked at that time for validation of their proposal and in my response to them reminded them that I had asked for that validation and about my request that they consider that route. I am still awaiting their decision. I gather they are having a meeting today. They had one meeting yesterday. I think they are meeting again today and they are considering this. I am sure we will be hearing from them.

Mr. Deans: Can I ask the minister, with reference to the sentence in her letter which says, “It would be entirely acceptable to reduce the present active treatment bed capacity at Chedoke to 100,” whether that means they must, or they may not, or what exactly does it mean? Would it be equally acceptable if they just simply told her that what they proposed to her is what they believed they can accomplish and they’re prepared to proceed on that basis?

Hon. B. Stephenson: Mr. Speaker, as someone who attempts to be fairly reasonable in all discussions and all negotiations, I made a request of the district health council that they consider my proposal to them. I am asking that they consider that proposal and if they do not agree with it, that they give me the valid arguments supporting their point of view, which is what I would like to hear.

Mr. Cunningham: Would the minister be kind enough, in the context of the discussion on Chedoke Hospital, to give us, through the House to the people in the Hamilton area, the names of the four people who met with her deputy minister before the new health council was formed, on the subject of the future of Chedoke Hospital?

Hon. B. Stephenson: I am sorry, Mr. Speaker, I cannot do that at the moment, because I don’t know which of the members they were.

Mr. Deans: May I ask the minister, am I wrong in my recollection that all that was asked of the municipality, the health board and the hospitals involved, was that they reduce the number of active treatment beds to 1,967 or thereabouts? The actual number I don’t recall. Am I further wrong that they did, by their proposal, do just that, and if I am correct in that assumption, then why doesn’t the minister leave them alone? Why is she bugging them so?

Hon. B. Stephenson: Mr. Speaker, I do not believe that I am bugging or badgering the Hamilton district health council at all.

Mr. Deans: You are.

Hon. B. Stephenson: I have asked a reasonable question. I anticipate from them a reasonable response.

Mr. Deans: But they gave you a reasonable response.

Hon. B. Stephenson: At this time, I will tell the member that he is a little bit wrong, because they did not make the reductions which we had requested of them, but he is not wrong in suggesting that they have a programme for reducing which almost meets the requirements, but not quite.

Mr. Lewis: Why not leave them alone?

Mr. Deans: What are you trying to do to the people of Hamilton?

Mr. Lewis: You are out of control in that ministry.

Mr. Cunningham: What I am asking is, would the minister ask her deputy, Mr. Backley, to indicate to her who these four individuals were who met with him on this subject before the formation of this new health council; people who, in fact, were not on the health council, but ostensibly purported to represent the people of this area?

Hon. B. Stephenson: Mr. Speaker, I shall try to find out from the deputy minister, Mr. Backley, who the people were. It is my understanding that they were members of the previous health council.


Mr. Martel: A question of the acting Minister of Health: Why was the Ministry of Health willing to use what it now considers an illegal board at Laurentian Hospital to oust the Grey Nuns, and why at this point in time is the minister appointing a new hospital board?

Hon. B. Stephenson: Mr. Speaker, as the hon. member knows, Judge Waisberg, who is an eminent jurist in this province, was appointed as a commissioner to examine the problems inherent in the Laurentian Hospital. His very first report to the ministry was the advice that he considered the present board of the hospital to be improperly constituted and illegally appointed, and his second recommendation was that we immediately ask that board to resign and that we appoint an interim board to function until the annual general meeting of the corporation of that hospital.

Because we felt Judge Waisberg’s advice was valid advice and should be adhered to, we immediately contacted the hospital planning council in Sudbury, the chairman of the regional government, the present chairman of the board of that hospital, discussed the matter with them, asked for nominees to the board, and we suggested to them that it was the responsibility and probably, not probably but very definitely, the right of the individual groups within Sudbury to make those nominations at this time.

They selected three people from each of the two groups which I have mentioned. The regional hospital council and the regional council each nominated three persons, hearing in mind our direction regarding the need for balance of anglophone and francophone. They each submitted three names and we appointed each of those individuals without question.


Mr. Germa: Is the minister not aware that the board which she has dismissed has publicly refused to resign? There are, consequently, two boards of governors for one hospital. Would she not consider introducing a little democracy into the system by having the board of governors of the Laurentian Hospital elected at the next municipal election?

Mr. Cassidy: That is a better idea.

Hon. B. Stephenson: Mr. Speaker, if that is the decision of the corporation of the Laurentian Hospital then it most certainly can be done. The appointment of the interim board is only to function until the time of the annual meeting of the corporation.

Mr. Germa: In Judge Waisberg’s interim report did he make any mention of laying criminal charges against certain people on that board?

Hon. B. Stephenson: Mr. Speaker, the interim report had two recommendations, both of which I have reported to you fully. It had no other documentation at that time.


Mr. Spence: Mr. Speaker, I have a question of the acting Minister of Health. I’ve received a number of complaints from senior citizens regarding drugs listed on the Ontario drug plan. Valium which is listed on the drug plan is not very effective to many senior citizens. One that is most effective is a brand-name drug called Roche five-milligram Valium. Is the minister contemplating making a re-evaluation of the effectiveness of the drugs on the drug plan of the Province of Ontario?

Hon. B. Stephenson: Mr. Speaker, the drugs which are listed in the drug benefit plan are those which are approved under either the Quad programme or the Parcost programme in the Province of Ontario and they are of equal therapeutic value.

Mr. Spence: Mr. Speaker, senior citizens find many of these drugs ineffective. Is there any way that those senior citizens who find it a hardship to pay for the brand-name drug, which is, they say, effective, can be helped?

Hon. B. Stephenson: Mr. Speaker, could I suggest that the hon. member speak to his leader, because I’m sure that his leader will give him some pharmaco-therapeutic advice regarding the equalization of therapeutic effectiveness of the drug which is available as Valium on the plan --

Hon. J. R. Smith: It’s all in the mind.

Hon. B. Stephenson: -- and that which is listed as Roche Valium, which I will tell you is four times as expensive.

Mr. R. S. Smith: I’ve got to see Darcy first.

Mr. Lewis: It sounds like a psychoanalytical tournament around here.

Mr. Speaker: Order, please. This will be the final supplementary. The member for Nipissing.

Mr. R. S. Smith: I just have a quick supplementary. I would just like to ask minister if it’s not true that if the doctor indicates by letter to her ministry that he would like a certain drug used in many instances -- a non-generic drug, a specific brand-name drug -- it is paid for by the ministry whether it be on the Parcost index or not, or the Quad index?

Hon. B. Stephenson: Mr. Speaker, I believe where there is no therapeutic equivalent within the benefit plan that, in fact, does happen. Where there is a therapeutic equivalent within the drug benefit plan I do not believe that it does happen.


Mr. Grossman: I too have a question of the acting Minister of Health. It’s been some 10 days since the announcement that the Doctors Hospital would be changed over to a community health care clinic. I wonder what specific steps the ministry has taken through the various committees which have been formed to contact the staff to assist them in getting relocated? They’re getting very anxious with the passage of time.

Mr. Roy: Have you resigned yet?

Mr. Grossman: I’m still here, Albert.

Mr. Roy: It is obvious that you are still here.

Hon. B. Stephenson: Mr. Speaker, with the assistance of representatives of the municipal government of the city of Toronto, the Ministry of Health is establishing the task force which is in the process of examining and organizing the ambulatory care centre for Doctors Hospital.

Mr. Eakins: For all centres?

Hon. B. Stephenson: At the same time, the Evans committee is functioning when requested to do so by the physicians on the staff.

In addition, a committee made up of the union leaders, representatives of the Ministry of Health, representatives of the OHA, representatives of the Ministry of Labour and representatives of Manpower Canada have organized and have held personnel conferences and are presently establishing specific centres in various Manpower offices for hospital workers. This week they will be bringing their outreach programme into the various hospitals involved, to bring to those hospitals Manpower consultants and counsellors who will be able to assist the people who are the being terminated in finding new employment in similar jobs, providing them with information regarding upgrading educational programmes and providing them with information regarding transfers to other areas.

Mr. Grossman: Mr. Speaker, a supplementary question: Will each and every employee in the Doctors Hospital be contacted personally within the next seven or eight days?

Mr. Lewis: Not likely.

Hon. B. Stephenson: Mr. Speaker, I would hope it would be within the next seven or eight days. Most certainly the Manpower officer and counsellor will be within that hospital within the very near future.

Mr. Singer: If not, you will resign.

Mr. B. Newman: May I ask the minister if the field workers will extend to all parts of the province, so that the city of Windsor, having lost a substantial number of job opportunities, will have the benefit of those services?

Hon. B. Stephenson: Mr. Speaker, we have had marvellous co-operation from Canada Manpower and they are, in fact, going to be --

Mr. Roy: Say that loudly.

Mr. Peterson: They are federal. Tell that to the Treasurer.

Mr. Singer: You are an apologist for those people in Ottawa.

Mr. S. Smith: You must be in bed with them.

Hon. B. Stephenson: I will say this very loudly; I will say this very loudly because they have provided us with a great deal of support and a good deal of encouragement and active participation in this programme of employment adjustment for these workers. They will be functioning throughout Ontario.


Mr. MacDonald: A question of the Minister of Agriculture and Food: Could the minister advise us what is the present status of the application of Saputo Cheese Ltd. of Montreal for a permit to build a specialty cheese manufacturing plant in eastern Ontario?

Hon. W. Newman: Mr. Speaker, the marketing people who were here have called for an application for a hearing. They sent out notices to all the people involved. They have set a date for the hearing; I think it is towards the end of this month.

Mr. MacDonald: Is it accurate that the ministry or the government, subtly or otherwise, is expressing opposition to this proposal? And if so, how does the minister reconcile it with his elaborate efforts for regional development of resources in eastern Ontario?

Hon. W. Newman: Mr. Speaker, it is not my intention to interfere with the process of any application. It goes from there, if necessary, to the Ontario Milk Commission. Then it is to be dealt with in the appropriate manner and any facts that are involved will come out at that time.

Mr. MacDonald: I understand there was a meeting of the milk commission yesterday at which this issue was discussed. What was its role at this point?

Hon. W. Newman: Mr. Speaker, I am not aware of the milk commission meeting on that particular point. I know they are meeting to discuss industrial milk problems, I discussed that matter with them this morning. We will also be meeting with them this afternoon. I understand they were discussing mainly the milk problem. I have no knowledge of the milk commission having a hearing, at this point in time, on the Saputo application.


Mr. Roy: Mr. Speaker, a question of the acting Minister of Health, if I can have her attention here, dealing with the Montfort Hospital again. There was a suggestion in her answer that her ministry was not aware of the openings. I wonder if the ministry is aware of a letter dated April 14, 1976, from the institutional division, budgets’ branch, Ministry of Health, which sends a letter to the Montfort Hospital and says: “I am writing to you in reply to your telephone query regarding psychiatric patients on weekend leave.”

Now how does the minister explain this type of correspondence going back and forth between her ministry and the psychiatric unit at the Montfort Hospital, and her answer here today that they were not aware that the unit was, in fact, open on March 1?

Hon. B. Stephenson: Mr. Speaker, the formal correspondence which must take place before beds can be put into service, and the agreement which is signed between the ministry and the hospital to have those beds in service, has not as yet been completed.

Mr. Roy: Yes, but a supplementary, just to answer my question: Did her ministry know or not know that the unit was, in fact, functioning since March 1; and was she not aware, as minister, that the official opening as such was delayed to allow her predecessor -- I should say the inactive Minister of Health (Mr. F. S. Miller) -- to give him some time to recuperate and come and open the psychiatric centre? The only reasons for the delay were for his convenience.

Mr. Lewis: Of course they were.

Mr. Reid: The inactive?

Hon. B. Stephenson: Mr. Speaker, that’s very interesting information which I did not know. I’ve had a great many other things to think about besides the opening of Montfort Hospital’s psychiatric unit. But to my knowledge the information which is necessary to flow from the hospital, the documentation which is necessary, has not as yet been completed; and they really shouldn’t be funded yet.

Mr. Lewis: That’s right; that was a request from your ministry.

Hon. B. Stephenson: They should not be; but they will be out of the generosity of the hearts of the faff of the Ministry of Health.


Mr. Cassidy: Supplementary, Mr. Speaker: Since this reaches right up into the deputy minister’s office, from which a call went to ask for the deferral of the official opening; and since they therefore must have been aware that the operation of the psychiatric end of it was operating, does the minister only rely on what she sees in writing and not what people tell her over the phone, or when she visits? Is this the way the Ministry of Health operates?

Mr. Speaker: Order, please.

Hon. B. Stephenson: Mr. Speaker, the hon. member knows full well that the official opening of a unit very frequently has nothing to do with whether the beds are being use by patients or not; nothing.

Mr. Cassidy: Exactly; exactly.


Mr. Roy: Mr. Speaker, can I ask one final supplementary.

Mr. Speaker: Order, please; that was the final supplementary. The hon. Minister of Government Services has the answer to a question asked previously.

Mr. Lewis: You had $600,000 for renovations in May of 1975 for the opening, and your ministry knew about it.

Mr. Speaker: The time is nearly up and there are many other questions; it has been pursued twice this afternoon.

Mr. Roy: Just a short one.

Mr. Speaker: Order please; no.

Mr. Roy: You are protecting her.

Hon. B. Stephenson: By all means go right ahead.


Hon. Mrs. Scrivener: Mr. Speaker, I would like to reply to the question asked by the member for Ottawa East on Tuesday concerning the Legislative Assembly Retirement Allowances Act, 1973.

Mr. Roy: This should be good; yes.

Hon. Mrs. Scrivener: Any former member of the legislative assembly who has contributed to the fund, and who has five or more years of service, is entitled to an annual allowance payable on a formula basis, according to age.

This eligibility remains constant, and is paid irrespective of any other income or occupation, except in one instance. The only occasion when a former member is not entitled to his allowance is in the specific instance of his re-election to the Legislature. In this case, the allowance would be suspended while the individual remained a member of the Legislature.

Mr. Bullbrook: Well, they do get it.

Hon. Mrs. Scrivener: I would remind the member for Ottawa East that the Legislative Assembly Retirement Allowances Act was passed with a minimum of debate in December, 1973, replacing earlier legislation. It carried with the consent of all parties in the House.

Mr. R. S. Smith: You mean Allan Grossman is getting $50,000 a year.

Mr. Roy: Can I ask a supplementary?

Mr. Speaker: Yes; the member for Ottawa East.

Mr. Roy: Could the minister respond: Does the think it right that a former member of the Legislature making $38,000 a year from the province should get in addition to that a pension of probably $15,000 or $18,000 a year?

Hon. Mr. Handleman: Have you spoken to him lately?

Mr. Breithaupt: It is not included for the feds.

Hon. Mr. Scrivener: Mr. Speaker, I think it is quite irrelevant what I think. It is my role to administer the Act as it was approved in this House.


Mr. Speaker: Order, please.

Mr. Reid: Bring in legislation to fix it.

Hon. Mrs. Scrivener: The member’s most distinguished colleague, Mr. Farquhar Oliver, is a recipient of the pension; he was on the Camp commission and he is now a member of the election expenses commission.


Mr. Speaker: Order, please.

Mr. Bullbrook: It doesn’t make any difference.

An hon. member: Are you blind?

An hon. member: He is making more than the Premier is.

Hon. Mr. Davis: That is not hard.

Mr. Speaker: Order, please. We can’t even hear the answer to the question; order please.

Mr. Bullbrook: Can you imagine that response? Farquhar Oliver gets it, so it means it is right.


Mr. Swart: A question, Mr. Speaker, of the Minister of Agriculture and Food.


Mr. Speaker: Order, please.

Mr. Swart: Is the minister aware of an announcement made last week about the construction of a major plant in the Beamsville area in the heart of the Niagara fruitland which follows, of course, the construction of a major plant by John Deere in the Grimsby area and the proposal for the expansion of the plant there in the Vineland area?

Hon. Mr. Henderson: You voted for it too.

Mr. Swart: What does the minister intend to do in the near future, or now, to stop the increasing trend in the Niagara Peninsula for development to take place on the very best land, the fruitlands?


Hon. Mr. Newman: Mr. Speaker, if the member had been listening to some of the comments I’ve been making around the province regarding the Niagara region and the preservation of agricultural lands, he would know we have had a great deal of input regarding the Niagara regional plan from our food and development branch. There has been some delay in the Niagara region plan because of our discussions. As a result of our discussions, some boundaries have been pulled in to preserve this fruitland for future use in the Niagara Peninsula.

Mr. Swart: A short supplementary: Is the minister aware that in fact no boundary changes have been made yet and that, with respect to the request of the Niagara regional council that the municipalities be given more time for normal development, the Ministry of Housing has stated: “We support the approach that would permit a reasonable rate of growth for several years of normal development in all urban areas” --

Mr. Shore: This is a short supplementary?

Mr. S. Smith: He should have asked for a long supplementary.

Mr. Swart: -- and even the Ministry of Agriculture and Food has stated, “We would agree that all municipalities should be permitted several years of normal development at the regional average rate”? Would the minister care to comment on this?


Hon. W. Newman: Mr. Speaker, if the NDP wants to bring a halt to everything, all at once, then let the members of that party say so.

Mr. Shore: Give it to him, Bill.


Hon. W. Newman: They shouldn’t talk in that party about lifting land freezes and putting land freezes back on. Why don’t they develop a policy over there so they know where they’re going?


Mr. Swart: Mr. Speaker --

Mr. Speaker: No, that short supplementary was too long. The member for Huron-Middlesex with a question.

Hon. W. Newman: Why didn’t the member ask a question about that last night?

Mr. Lewis: We wouldn’t ask you about your statistics.

Hon. W. Newman: Go ahead and ask.


Mr. Speaker: Order, please. Will the hon. members refrain from making interjections, please? We’re making this a shambles. You’re doing it. It’s your question period; if you want to spoil it, that’s fine.

The member for Huron-Middlesex may ask a question.


Mr. Riddell: Thank you, Mr. Speaker, a question of the Minister of Agriculture and Feud -- and Food.

Some hon. members: Feud!

Mr. Ruston: He’s feuding now!

Mr. Riddell: In view of the restriction on the availability of money for farm drainage loans, can the minister advise how the townships are expected to live up to their commitments, not knowing that there were going to be restrictions when they approved the loan applications? And can the minister advise how the farmers are expected to pay for the tile already installed on the strength of the fact that the loan would be coming through from the townships?

Hon. W. Newman: Mr. Speaker, as the hon. member knows, the allocation in the budget is now $13 million, which is approximately the same as it was last year. It’s gone up very rapidly from $4.5 million about three years ago, but because of the constraints within the ministry this year, it was held at $18 million.

What we are doing right now, because the announcement could not be made until the budget came down, is we are now putting a further letter in place to all the municipalities in the Province of Ontario asking them what they have committed and what they have not committed at this point in time, so we can look at the overall picture to see how far some municipalities have committed themselves and how far some of them have not committed themselves, so we can have a look at the whole matter.

Mr. Eaton: You already knew that. You were told that on the phone this morning.

Mr. Riddell: Mr. Speaker, a supplementary. Just a quick one?

Mr. Speaker: There are just a few seconds left. If it’s just a short supplementary, we’ll allow it.

Mr. Riddell: In view of the fact that assistance might not be forthcoming to these townships that have over-committed themselves, is the minister aware that because of the budget restraints, the manufacturers of the tile and the drainage contractors might well have to take forceful action with the farmers, placing them in a position where they might have to borrow from the bank at higher rates of interest, assuming they had sufficient creditworthiness to do so, or remortgage their assets to obtain money to pay both the contractors and the suppliers?

Mr. Speaker: Thank you, thank you.

Mr. Singer: Shame. Shame.

Mr. Eaton: You had that written down this morning, word for word.

Hon. W. Newman: Mr. Speaker, nobody wants to create any undue hardship for the agriculture community, especially myself. Let’s make that very clear to start with.

Mr. Shore: What is the member for Middlesex (Mr. Eaton) going to do now?

Hon. W. Newman: Now, as for the $13 million that was allocated for tile drainage on the farms this year --

Mr. Ferrier: The minister is blocking the drains.

Hon. W. Newman: Some of the municipalities, I know, have overcommitted; I have heard from them. Some municipalities have not committed their total allocation. Until we get all these facts and figures together and assess the whole situation, the tile drainage contractors themselves know what was committed some six weeks ago, or what they had committed’, because I had figures from the tile drainage contractors’ association. I know what they had committed, and they hadn’t committed as much as we had allowed in the budget at that point in time.

Mr. Roy: That’s obvious.

Hon. W. Newman: We are going to get together all these facts and figures from the municipalities and try to work it out on an equitable basis within the means we have.


Mr. Speaker: The oral question period has expired.


Presenting reports.

Hon. Mrs. Scrivener, on behalf of the Accommodation division of the Ministry of Government Services, presented the design and construction programme for 1976-1977, which included a summary of major and minor capital projects, new lease-purchase projects, accommodation alterations projects and major projects completed in the past two years.

Mr. Lawlor from the standing private bills committee presented the committee’s report which was read as follows and adopted:

Your committee begs to report the following bills without amendment:

Bill Pr5, An Act respecting the City of Cambridge.

Bill Pr11, An Act respecting Napco Poultry Ltd.

Bill Pr14, An Act respecting the Town of Fort Erie.

Bill Pr15, An Act respecting the Town of Fort Erie.

Bill Pr11, An Act respecting the Institute of Professional Librarians of Ontario.

Bill Pr20, An Act respecting the City of Ottawa.

Your committee begs to report the following bill with certain amendments:

Bill Pr18, An Act respecting the City of Niagara Falls.

Your committee recommends that Bill Pr1, An Act respecting Mid-Erie Acceptance Corp. Ltd., and Bill Pr28, An Act respecting Rancheria Mining Co. Ltd. be now reported.

Mr. Speaker: Motions.

Introduction of bills.


Hon. B. Stephenson, on behalf of Hon. F. S. Miller, moved first reading of bill intituled, An Act to amend the Public Health Act.

Motion agreed to; first reading of the bill.

Hon. B. Stephenson: Mr. Speaker, the purpose of this bill is to control the performance of tests in private laboratories and to prohibit the offering or giving of rewards or inducements to obtain business for a private laboratory.

The bill also provides for the refusal to renew laboratory licences --

Mr. Breithaupt: Just in time.

Mr. Reid: But the horses are gone.

Hon. B. Stephenson: -- and to limit or prohibit the performance of tests in laboratories.-

Hon. Mr. Davis: Horses?

Mr. Reid: The barn door. You have closed the barn door. Haven’t you heard that?

Hon. B. Stephenson: -- in cases where the minister determines it is in the public interest to do so.

Mr. Reid: Would you like to implement that?

Mr. Cassidy: Thank Ed Ziemba for that bill.


Hon. Mr. Handleman moved first reading of bill intituled, An Act to amend the Residential Premises Rent Review Act, 1975.

Motion agreed to; first reading of the bill.

Mr. Speaker: Orders of the day.

Clerk of the House: The ninth order, House in committee of supply.


Mr. Chairman: Does the hon. minister have an opening statement?

Hon. Mr. Meen: Yes, I do, Mr. Chairman. It will be relatively brief. I welcome the opportunity to discuss, in committee of supply, how my ministry will be operating over the coming fiscal year. But before we get down to a detailed examination of the estimates, I would like to make a few brief comments. First, the structure of the estimates, as you will find in the estimates book, follows the organization and the programmes of the ministry exactly. Thus, vote 901 covers the main ministry administrative activities. Vote 902 is the administration of taxes programme, covering the corporations tax, retail sales tax, succession duty and gasoline tax. Also included under this vote are other taxes such as tobacco tax and the provincial land tax. Altogether, we administer some 12 tax statutes for the province.

Vote 903 covers Ontario’s various tax credits and guaranteed income system and includes the servicing of the Ontario home buyers grant, which we administer on behalf of the Ministry of Housing. Vote 904 is the municipal assessment, on which the Treasurer (Mr. McKeough) made an important statement in his budget concerning the implementation of property tax reforms in the province.

Finally, there is the Province of Ontario Savings Office, which isn’t a vote, because it is covered by existing statutory legislation, but it is still included in my estimates.

Contained in the estimates are a number of features to which I would like to make a very brief reference. The government has, as the Treasurer noted in his budget speeds, imposed cuts in administrative operations. I want to assure the committee that we intend to comply with these ceilings and with the cuts to the fullest. At the same time, we reduced our complement by 153 over the last year from 4,115 to a total aggregate today of 3,962.

I might also say that, expressed against our estimated actual 1975-1976 expenditures -- excluding, of course, GAINS transfers -- our expenditures for 1976-1977 will be only one per cent higher than those of last year. Such an achievement, and I feel it is an achievement in a period of inflation, has not been obtained without some impact on the operation of the ministry. I would like to make the point that, unlike the operations of the ministries handled by some of my colleagues, a reduction in the size of our budget cannot be achieved by reducing programme activities or reducing public services. On the contrary, the ministry must not only meet its share of constraints, but it must also deal with continued increases in its workload, both to maintain the flow of essential revenues and to ensure that the province’s taxes are administered fairly and efficiently.

Mr. Chairman, with these few opening remarks, I would like to propose that we move to a detailed examination of the estimates. For the purpose of dealing with these estimates, I would like to move down to a seat in the front and have a table brought in so that my deputy and one of our staff experienced in the various votes could be with him in front of me.

May I also make a suggestion about the manner of dealing with these votes? This is my first opportunity, as I have mentioned, to bring my estimates before the House in committee of supply, and thus I haven’t had any experience in the procedure here. In the past couple of years, my estimates have been in standing committee; the debates on the various votes are somewhat more freewheeling there and can range back and forth over the subheadings of the votes.

I would like to recommend, particularly with respect to vote 902, which deals with tax administration and the various taxing statutes, such as corporations tax, retail sales tax, gasoline tax and the like -- there is a fair amount of detail in each one of those subheadings -- that I think we should try, with the concurrence of the committee, of course, to keep our discussions within those various subheadings. That may not always be possible, particularly in the opening discussions on each one of the votes, but to the maximum degree possible I think that kind of format would assist me in giving the fullest possible and most complete answers to the questions which the hon. members will raise.

Mr. Chairman: I don’t think there is any problem about the committee allowing the minister to move down to a front bench so he might have the advantage of discussing certain questions with his advisers, but I think it’s customary that we have lead-off statements from the critics of the two opposition parties. I believe the hon. member for Yorkview is about to begin.


Mr. Young: Mr. Chairman, in beginning the discussion on the Ministry of Revenue for this party, I just want to add a word to what the minister has already said this afternoon. He took some credit to himself, and of course unless a minister on that side of the House pats his own back he’s not going to get it patted from this side, and so I suppose the one way to achieve some credit is to tell us just how good a guy he is.

Back on April 1, the minister also took a crack at this same thing, and I want to quote two or three things that the minister said at that time -- to his credit, let me say, since he is a fairly new minister in this department. He said, and I quote him from Hansard of April 1 -- whether that date is significant or not I’m not sure, but that’s the date: “We reduced our complement by 153 positions during the last fiscal year, 1975-1976.…” The figure given today was 173, I think, Mr. Minister; however the fact is there has been a reduction of complement. The minister did not say whether these are high-priced or low-priced people and whether or not the reduction has taken place right across the income spectrum or whether these are, by and large, low-cost people while the high cost people are getting increases in salary. However, that’s something he can look at.

But he points out to us that the savings this year should be in the order of $1.5 million to $2 million. Then he tells us that as far as revenue collected is concerned, in the 1972-1973 fiscal year it cost 71 cents per unit -- whatever he’s talking about --

An hon. member: For every $100.

Mr. Young: -- and then he says that came down 13 per cent this past year which, again, is good and we compliment him for that.

“The number of accounts per employee is another interesting yardstick to look at,” he said. “That number has increased from 349 to 463 accounts per employee, an increase of 33 per cent.” Which again looks like efficiency.

Then he says: “When we took over assessment from the municipalities, there were 1.6 million properties. By 1975-1976, with the activities in subdivisions and the like, the number has increased to 2.8 million properties, an increase of 75 per cent.” But: “The number of properties per assessor has increased from 663 in 1970-1971, to 1,149, an increase of 73 per cent.”

Again, he doesn’t say whether this means that in the early stages the assessing had to be done and then that tapered off and so maintenance perhaps was responsible for much of that decrease, we don’t know.

Then again: “In the Province of Ontario Savings Office the public moneys on deposit in 1971-1972 were $138 million; in the fiscal year just ended, the moneys on deposit have increased to $240 million.

Perhaps the minister can take a look at that as a great source of revenue and we can discuss that later on. But he says this is an increase of 74 per cent. “Deposits per dollar of cost” he said, “have increased 16 per cent ... Work units per hour per person in the Province of Ontario Savings Office in 1971-1972 were 13.1; they increased to 16.9 in the last fiscal year, an increase of 29 per cent.”

And so the minister goes on in this vein and he completes this section by saying: “I want to cite [these] items in support of my contention that we’re already a lean ministry and an efficient one.”

That may well be so; and if it is, then again I say we congratulate the ministry for its leanness and efficiency. But, Mr. Chairman, I want to point out to the minister that this is the kind of talk we generally hear from ministries after an election when a government has replaced another government to demonstrate just how wasteful and inefficient the former government has been.

I suppose Mr. Bennett is engaged in that sort of thing in British Columbia right now. We see snippets in the newspaper about him saying this kind of thing. He is becoming so much more efficient than the former government. Time after time, through the years, we hear this thing going on.

The thing the minister did not point out is that he is comparing his lean and hungry look in the present day and the streamlining of his ministry with a former government which is exactly the same government as we have right now. This is the significant thing.

If, indeed, these things are true, and he is bringing these percentages down, all he is saying to us is that this government in years past has been sloppy. It’s been fat and indolent and inefficient. That’s what he is saying here.

While we give credit to this minister, it may well be that what the minister is saying is, “My predecessors were pretty sloppy and now I’m tightening up.”

What else can he say? In effect, what he is doing is fighting his own past, just the same as the Treasurer is fighting his own past when lie talks about restraint right now; when he is going to cut back on grants and assistance to old people, children, widows and orphans and all the rest of it. What he is doing is simply saying we have been very inefficient in the past and now we have to tighten up, partly because New York has said so if we are going to keep our triple-A rating. He doesn’t say it but that’s what he means. In other words, because the government has been so inefficient, we have to suffer the present restraints in areas where we should not be suffering them.

As far as this ministry is concerned, let me give him credit by saying that it is likely the cutbacks are in areas where cutbacks should be made. I don’t know; we don’t have enough details in the estimates to know that but perhaps we will know more before we are through. In any case, I simply want to point out that while this is happening, this minister is simply cutting back on the waste and the inefficiency of the same government in years gone by.

While he may take credit himself, by taking that credit he is pointing the finger at his predecessors and at this government which allowed this kind of a situation to develop haphazardly in the days that are gone.

While this may be true, and while I may be willing to give the minister a certain amount of credit, I want to spend some time this afternoon on this field of assessment where I don’t think the same kind of efficiency has been shown. Those of us who were in this House in the 1960s remember the Smith report and then the report of the select committee headed by Mr. White, the member for London South, I think it was. Both those committees pointed out the tremendous problem of inequity in the taxing structure and the assessment structure, and the way municipalities are at variance not only in the way they assess properties but in levying taxes.

These reports highlight the fact that municipalities have widely different standards of assessment. Some properties within the same municipality -- and we all know examples of it -- had different assessments on them and as far as the casual observer could see there were no great differences between the two properties.

Of course, the differences in valuation of industrial, residential, high-rise, commercial and vacant land were a sight to behold. Not only were there variances with a municipality, but no two municipalities seemed to have the same standard for assessing and then for taxing. Not only that, but as the former member for St. Andrew-St. Patrick pointed out the us in 1973, in a speech he made, we had something like 270,000 properties in Ontario which were missing from or incorrectly tabulated on municipal tax rolls. That was in 1969 and 1970.

“These missing properties included cottages and permanent residences in rural and resort areas, as well as houses and commercial land in the cities.” That’s a direct quote from Mr. Grossman at that time.

Hon. Mr. Meen: What is the date of that?

Mr. Young: The date of his speech is Oct. 18, 1973, but he is speaking of a condition that existed about the turn of the decade.

Hon. Mr. Meen: I wondered about that date.

Mr. Young: I suspect that situation is now rectified, although I suppose nothing is perfect and no human beings, not even assessors, are perfect, and it may be there are still some properties that are paying no taxes. Certainly there were a great many people in this province getting free rides for we don’t know how many years, over decades likely. They just kept quiet and when the tax bills hadn’t arrived they never asked for them. I suppose you couldn’t blame them for that.

In any case, that situation may well have been rectified by now. I am talking about the situations brought to our attention by these committees in the early 1970s. Because of this, the grant structure from the province to the municipalities was tremendously out of whack. When there was no standard within the municipalities, when grants came to the municipalities from the province based on their own assessment rolls, and their taxes were based on those assessment rolls, then there was complete chaos in the whole grant structure. What we faced at that time was the certainty that we weren’t going to get any kind of unity among the municipalities in trying to rectify this situation. This Legislature faced up to the fact that the only way we could possibly hope to get this straightened out was by the province itself taking over the whole field of assessment.

That is what happened. With great fanfare, the province did take over assessments. The announcements were made on several occasions that it was coming forward.

Then at the same time, there were no standards. Some of the municipalities like Metro Toronto, were saying the rule of thumb is about a third the value of the sales price; another municipality one one-tenth and another one-quarter. So there was no consistency there. The feeling was that the only way we could possibly get this thing brought into line was, while we were going to assess provincially, to assess on the market value; that is the value, I suppose, which a willing buyer was willing to pay to a willing seller. That is not easy. They have had some problems and we still have some problems; but that was the general hope that we had.

The machinery was set up; eventually I think about 31 regional offices were set up out of which the assessment was done. About 1,500 assessors were hired and trained, given the background to do the job and brought in and schooled a bit. There were about 2,500 employees, in total, for the 31 or so regional offices. They were given a manual which, I understand, came right out of California, a warm climate and a place where basements are very scarce and the construction is different. They were given the manual and told to go out and do a job.

These people started in good faith to do their work, and to give them credit they did a fairly adequate job within the framework of the instructions they were given and the manual which they had. To quote further from Mr. Grossman’s speech at that time, and he was looking back at this time from 1973 to the beginning:

“When the government assumed the assessment responsibility in 1970, the objective was to reassess all properties at their market value and then to reform the property tax system based upon these more equitable assessments.

“We anticipated completion of the valuation work by early 1973 for tax study purposes. The assessors would then update their assessment for introduction in the fall of 1974. It was estimated that up to 18 months would be required to study, develop and seek the approval of this House on meaningful property tax reform before local authorities set 1975 mill rates based upon the new 1974 assessment.”

He then said these words, which are rather startling: “The reassessment work has now been completed.”

What he meant by that word “work” has to be qualified in light of subsequent experience, because things just didn’t go as they were planned.


Certainly, the California manuals, based I as I said on the warmer climate and different construction, different types of houses, were just inadequate and changes had to be made. Finally, I suppose, it came to the place where values were placed on what people really felt they needed in a house and wanted in a house, and what the willing buyer would pay for that house to the willing seller. So this thing was revised and, finally, some sense began to come into it.

But something else happened in 1970. York county and Peel county were reassessed on the basis of market value. It was fairly near; not perfect, but near enough to show us what could happen. Those in the House at that time remember the storm that broke over our heads when the new assessment and possible taxes based on that assessment were known.

Some of the things that were brought to our attention then were that the taxes on single-family homes rose, rather dramatically in some cases. The taxes on vacant land were up, and perhaps they should have been. The taxes on apartments and multiple homes fell rather startlingly. And then industrial and commercial properties fell in value and, therefore, in taxation.

Also, within municipalities in certain areas, in places like Peel county and York county, the tax burden was shifted from the urban to rural municipalities. Of course, this meant that because of these shifts there would be profound changes in provincial grants. That, of course, was a situation which the municipalities looked upon with very great fear and very great foreboding. As I said, within this House we had debate after debate and in the question period this was questioned and queried time after time.

It was obvious to the government that some response had to be made and so responses were made. Adjustments were made; money was poured out from the provincial Treasury to help this situation. But what was more obvious to us all was that shifts similar to those we were looking at in Peel and York would take place throughout the whole Province of Ontario at the time of market value assessment.

I think as far as the government was concerned, there was real fear of what was going to happen. So we got the announcement, which I have already quoted from, by the minister of that time. He said this in October, 1973; the hope was that in 1974 the tax rolls would be returned for taxation in 1975. But 1975 would bring the election, and to have this kind of massive shift in taxation and the bills coming in just at the time when the government might want to go out and appeal to the people was a situation that could not, I think, be borne by the cabinet at the time. Mr. Grossman said this in addition to what I’ve already quoted:

“However, the assessment division of my ministry has advised me that the valuations on residential properties in many parts of the province are inadequate for property tax policy purposes at the present time.

“The achievement of accurate and acceptable market value assessments on residential properties has been disrupted by rapid changes during the past year. In that relatively short period of time, the real estate market has become unpredictably volatile with prices rising at unprecedented rates in many urban and resort areas.

“Consequently ... the assessors have been unable to keep their valuations in step with recent markets because the valuation methods being used were established in 1970 on the expectation of fairly stable markets.”

So he said the government tax reform programme perhaps should be postponed:

“As the new data will be available by the fall of next year, the government’s tax reform programme could be finalized by early 1976, after allowing 18 months for the tax studies, fiscal policy development and legislative action.”

That was the statement in October, 1973. The postponement took place at that time.

Of course, in addition to an election which was looming in the near distance, there was that significant fact that property values were going crazy, particularly in the residential market. We all remember at that time that land became a speculator’s dream and housing was going through the roof. But this government, as well as the government in Ottawa, was doing nothing to curb that kind of wild, speculative endeavour; even though the warnings came from this side of the House, that in this regard and in other regards some curbs should be placed upon profiteering, otherwise we would be getting wage demands in the days ahead; and when wage demands came, we said at that time, then governments would be pointing the finger at the wage earners as the people who are the culprits in the whole inflationary process.

Right here we saw where it started, and because it was starting there and skyrocketing, then the assessment to market value had to be postponed because of this matter, plus the election that was coming through. So the real reason I suppose, while it was based on inflation, was a political one. The result was that for another period of time the inequities that we saw in the assessment situation and the tax situation across the province were frozen at the pre-1970 level. Many of these assessments went back to the 1940s and prior to that; values bore no relationship to what values were becoming in 1973.

Of course the grants from the province still had to be tied to these incredible levels for another period of time. Even though Mr. Grossman, the minister responsible at that time, said that reassessment had been completed, my guess is that it was completed on paper only, and what the department had not yet found was a usable way to translate this into market value and to bring equity into the whole structure of taxation. The magic formula that was being looked for to prevent colossal shifts of tax burdens which might put the Tories out of office had not been discovered.

The situation then drifted for a while to see what was going to happen. Finally, I think it was perhaps late in December or November of 1974 -- that’s over a year after Mr. Grossman’s announcement -- the cabinet decided to set up an internal study committee to devise a tax policy to accommodate the impact of reassessment.

Now this committee, as I understand, was headed by Dorothy McRobb, a very able, capable person, and it was made up of people who -- again, to give them their credit -- did an extremely good job, as I understand it. It was to be a low-profile and no publicity committee. The government didn’t want the public to know very much about it; little snippets and bits of news about it came through from time to time, but not very much. As I understand it, that committee was to report in February of this year. It should have reported by now, and I presume that the budget paper the Treasurer announced recently might have been based in large measure upon the report of that particular committee.

Their job was, first and foremost, to give the ministry and the government the kind of magic formula, as I called it, which could bring about reassessment and more equitable tax legislation. As I said, the McRobb committee did a lot of very hard work and budget paper E likely grew out of this, but the strange thing to me is that while the minister in his budget papers makes certain announcements about what might happen in the way of good readjustment in taxation in his view, he says this:

“To facilitate discussion on the proposals, a commission will be appointed to receive submissions and to make recommendations on the new property tax system. The commission, which will include people knowledgeable in municipal education finance, will be asked to report to the government by the fall of 1976 so that legislation can be prepared for the spring of 1977.”

That means that taxes can be levied by 1978. I presume this is what his hope is.

Again this is a strange step for a government to take. The minister has outlined what the possible steps are and what the possible policy can be with the shift in business taxation and residential taxation, the shift in the assessment in rural lands and the province paying 100 per cent of the taxes to the municipalities. All this is here and outlined. One would have felt that the government would have gone ahead and said:

“We believe this to be an equitable way of solving the problem. Let’s get on with it.”

Unfortunately, or fortunately for this province but unfortunately for the government and its plans, it came back in last fall’s election as a minority. A minority government, perhaps facing another election in the near future, can’t always do what it may want to do if it has four clear years without having to refer itself back to the electorate. The best laid schemes of mice and men gang aft agley, as Robbie Burns said at one particular point in his lifetime, and it happened here.

I have no doubt that this outline in budget paper E might well have been translated into legislation and gone forward if the majority government had come through as the Tories had hoped. But since it didn’t and since this does mean a lot of changes and a lot of disruption within the province, again a commission is appointed to delay until after the next round and the run-off elections take place. Then perhaps, with a majority one party or the other will have the four years and will go forward to do the job that has to be done in bringing in market assessment.

I don’t know whether the McRobb group will continue its work as a commission now instead of a committee, whether the same personnel will continue or a brand new commission will be appointed. That’s something that the minister perhaps will tell us in his response. But you see what has happened. During this period we had set up what I understand is called a valuation file. It started back a couple of years ago and was certainly basic to the whole plan of changing assessments. Perhaps the minister, again, can tell us how far that evaluation file has gone. I gather there are still some problems in connection with it and certainly it has to be updated. The valuations of 1970, 1971, 1972 have to be translated into 1976-1977 values, and there is a lot of work to be done.

I don’t know whether the budget cutting the minister talked about is going to affect that work. If it does, then I think the minister should take a long look at his budget cuts in which he takes such great pride. We should have efficiency in bringing the valuation file up to date and getting this whole process into a position where we can move forward.

The thing that disturbs me in all this is that we have come to the spring of 1976 when this thing, after the second round, should have been done, and after the delays that Mr. Grossman announced, should have been done. The old problem, the old inequities, the old crazy evaluations and crazy standards are still with us. We’re still basing assessment and still basing taxation on that old outdated concept. I say to the minister that this is just not good enough and we are certainly facing trouble about it.


One of the things that is happening and which I think we have to face as a Legislature is that the revision of the assessment is taking place anyway. And it is taking place via court action; appeals to the assessment -- and even, in some cases, right through to courts. The action in respect to the Ontario Steel Products Co. in May of 1973 is a good illustration of what is happening. I have the details of it here, but I don’t want to go into it in detail. There was one dissenting voice in that, but it did let loose a whole flood of appeals. They had already started, of course, before this time, but this seemed to be the linchpin which opened the flood gates.

But, you see, what is happening here -- and this minister knows full well -- that one of the most serious results of a delay in setting up a market assessment is the time and money being wasted by the department right now in defending the interim assessments arrived at, particularly in commercial and industrial buildings. What is going on in Metro is an illustration of this.

Successful appeals are cutting down on tax revenue for the municipalities. The longer the delay in assessment reform, of course, the greater the loss to local treasury.

It was in the late 1960s that the Toronto Assessment Commissioner Grey arrived at a tax base for the new Toronto Dominion Centre -- and we all remember this being in the news. When the assessment was transferred to the province, Mr. Grey, now a consultant acting for the TD Centre, successfully appealed his own assessment and I understand it cost the city of Toronto over $1 million in tax revenue in that one appeal.

Grey, and others who once worked for the city assessment department, became “consultants” in the tax field. They knew from inside information where possible “inequities” existed, and they went out to work and make a living. And who can blame them for doing that -- except some of the methods are perhaps questionable. Some consultants actually solicited appeals from property owners and are paid according to the amount of assessment reduction they can achieve. This is a known bit of scuttle-butt on the assessment areas in the city in the tax areas, and perhaps the minister should take a long look at what is happening there.

The Bank of Nova Scotia, for example, has saved itself over $800,000 through assessment appeals. Olympia and York Developments Ltd. is extremely active in appeals respecting buildings that it controls. The Star buildings, both old and new, are appealing -- also the new Hudson’s Bay complex, Hotel Toronto, the Bank of Montreal -- and a great many other new structures in Metro.

As a matter of fact, I think it is almost routine now for new buildings and new complexes within Metro to appeal their assessments. These appeals are not for peanuts -- they involve millions of dollars.

My information is that the same thing is going on in other centres, and it will escalate as time goes on. The longer the government takes to get us the market value, the more time and energy and resources will be wasted in fighting those appeals within the minister’s own department. There is more to come. Their rumblings are escalating in the high-rise field now. Appeals are certainly multiplying there as owners try to reduce assessments to the condominium and the single-family level following the recent action on condominiums.

Assessment reform is grinding its way through the appeal routes, and in this way we are getting a new assessment and tax structure; but it is still riddled with inequity and with sheer injustices. Instead of appointing a new commission to rework the old ground, the government should be acting now to implement market assessment. Perhaps the minister realizes this and I would hope that he takes a look at this and tries to get that commission to operate in a matter of weeks rather than a matter of months or year.

I believe there is a matter which was raised in this House before, and which I just want to mention to the minister briefly. Perhaps we can get back to it during the estimates, and he might have full information for us then if he hasn’t now. That is the organization which is known as Teela which works in co-operation with the department in connection with records. I am not sure in my own mind exactly what part it does play but I hear rumblings out in the province about it and dissatisfaction as far as some of the regional offices are concerned with its function. Teela I understand -- if I am clear -- gets deeds from the registry clerk and I think registry clerks from the assessment division do operate within the registry office. These documents come back and they are given a number and then Teela is given charge of them and Teela makes a record. It builds up a system of file cards and turns them back to the minister for his information and for his records. Then they are allowed to use those records any way they like commercially. It seems to me that this is another situation like the situation in the Ministry of Transportation and Communications and the whole matter of supplying confidential assessment information to private marketing organizations becomes something of a legal or a moral issue which should be looked at very carefully. I know that some of the people out in the province seem to think that the error rate which Teela rolls up is rather high and the assessment information is not as accurate as it should be. I have heard one person say that it seems that with the turnover in Teela they may not be paying enough wages; the turnover is so high perhaps they are not training staff adequately and so the errors are compounded.

I wonder whether the minister could tell us about this arrangement and why he is keeping the arrangement and whether or not it might well be that this kind of work could be done more effectively and more economically within his own department without the records going out and being used commercially by a private concern.

I would also ask him about the ownership of Teela -- whether Teela is owned as a company. Is it incorporated? Does he know anything about its sales and the income derived from this kind of relationship which it has with the minister and with his department?

One other matter which I wanted to raise with the minister for his elaboration is one which has come to the attention, I think, of a great many of the members in the House. That is, the 1974 Act amending section 17(3) of the Assessment Act. I have in my hands a copy of a letter which no doubt the minister has and certainly other members have received, from a certain Mr. T. D. Taylor, 67 Banstock Dr. in Willowdale, Ont. I am not going to read this letter -- the minister can have it if he wants it -- but I will read pertinent sections of it. The particular amendment he spoke about was section 6(3) which says this:

“The value of an assessment of an entire parcel of real property that is occupied by more than one person to be assessed under this Act shall be apportioned on the assessment roll among the occupants of the entire real property who are to be assessed in that proportion that the fair market rent of the space occupied by each occupant shares the fair market rent of the entire parcel of real property, so that the sum of the values apportioned to each occupant shall be equal to the value of the assessment of the entire parcel of real property.”

Certainly, I think, when that amendment came to the House a great many of us did not realize what the impact of this might be. If I could, as I mentioned before, quote two or three paragraphs from this letter it will perhaps enlighten us more than any amount of talking I can do. Mr. Taylor says:

“It almost seems that there must be a conspiracy in Canada to destroy the small businessman. How else could one explain section 6 of the Assessment Act 1974 amending section 17(3)? I would really like to find out the name and occupation of the person who first proposed this idea as it relates to the shopping plazas. It surely must have been an executive of Simpsons, Eaton’s, the Bay, Woolco, Kresge’s, Loblaws, Dominion, or some other large chain [He doesn’t include them all, I notice, but he has a lot of them there.] for they stand to gain tens of thousands of dollars at the expense of the little guy in the smoke shop. Please don’t let anyone tell you otherwise because there are many cases where a large store is paying $3 per square foot per year rent, compared to a small store in the same plaza paying $10 or more per square foot rent. Thus the large store will pay only one-third of what they were previously paying and the small store will have to pay three times what they were previously paying.”

And then he has a statement about the way the small man has to fix up his store, just to make a go of it:

“They put their house in hock for perhaps $60,000, $50,000 going for fixturing and $10,000 for a cushion. Fixturing, by the way, means putting in walls, ceilings, floors, light fixtures, and the front, to the tune of $30,000-$40,000. As soon as the floor, lights, and walls, etc., are in they become the sole property of the landlord. Pretty crafty, huh? The landlord gets a free store, and it doesn’t matter whether the tenant goes bust or dies in a couple of months, and the landlord doesn’t even have to pay gift tax.”

And to continue:

“The common-area maintenance charges that somehow had been soft-pedalled during the rest of the negotiations turn out to be a nightmare. Common-area maintenance can include air conditioning, floor sweeping, snow removal, painting and so on. The landlord does all the spending of the money, but does not put in a nickel of his own. Thus he has no incentive to keep the cost down; instead he charges 10 per cent to 15 per cent of all the bills he pays, including maintenance staff wages. What does he care if some contractor pads his bills? He will probably sneak in what are his own capital costs and then add 15 per cent for his effort.”

Mr. Taylor goes on to say:

“Now the argument that the large stores should pay less rent and taxes because they are providing all the customers just won’t wash. The big stores need the small stores just as much as the small stores need the big ones. On the west side of Yonge St. just north of Steeles Ave. in Toronto, Loblaws proved they could not survive on their own. Eaton’s took over the location and also proved they could not survive on their own. On the opposite side of the road, the G.E.M. store has never been a big success.

“One argument put up to me is that buying space is just like buying anything else; the more you buy the cheaper it is. Agreed, but not two-thirds cheaper.

“What could be fairer than basing taxes on the space used? Should efficient use of a small area be penalized? Conversely, should inefficient use of a larger area be subsidized? Because the small businessman cannot buy at the low price, because he has to submit to blackmail in the amount of rent, is it right that the Ontario government should now ask him to work 100 hours a week to pay additional taxes? Where the hell else is he going to get the money to pay them?”

Mr. Reid: Is that parliamentary?

Hon. Mr. Meen: He is quoting.

Mr. Renwick: It is ministerial.

Mr. Young: And that’s signed by Mr. Taylor, and I have simply read part of his letter for the edification of the minister. I presume, Mr. Minister, that you have a copy of this letter.

Hon. Mr. Meen: I haven’t seen that letter.

Mr. Young: You haven’t? Well, I will see that you get a copy of it then as soon as it is possible to do that.

Hon. Mr. Meen: At least I don’t remember seeing it.

Mr. Young: Mr. Chairman, I have some pretty well to the end of my presentation today. I do want to ask the minister about his plans for the regional offices.

Certainly when the 30-odd regional offices were set up, there was a big job of assessment to be done, and it was done. Do we need this amount? I understand there was some discussion going on about cutting down on regional office numbers, and some discussion as to where these should be headquartered, and what functions they should take on.

I don’t know how far this has progressed, Mr. Chairman, but perhaps the minister can enlighten us as to what the progress is, because it certainly seems that this is one place some savings can be made unless there is still a great deal of work to be done in the valuation file. Even there, I can’t see that 31 offices are needed for this. It’s more a central job now which is needed.


I would hope he’s addressing himself to that central job and that he’s not going to delay any further -- that is, that this government is not simply waiting for another round of elections, hoping for a majority, before it’s going to bite the bullet and do the job which has to be done in the whole field of assessment.

I hope the minister takes to heart the kind of advice I have given him today. I think it’s been good advice. Also, I would very much like the minister to hand on to the other members of his cabinet the observations I made early in the game that when you take credit for something that is happening now in the way of reduction of expenditures, you should also realize who was responsible for the fat, the waste and extravagance that occurred in the years gone by.

Mr. Edighoffer: Mr. Chairman, I’d like to make a few comments at this opening session of the estimates of the Ministry of Revenue. First of all, I’d have to say that this, of course, is the first session of any estimates in this third session of the 30th parliament. I thought, with so many seats on this side of the House -- we’re cramped and, of course, in the minority situation -- that maybe the estimates books might have been prepared in a somewhat different manner. They might have been extended somewhat. I know that a number of my colleagues have asked if I would ask this minister whether there is any further detail in the estimates of the Ministry of Revenue which are before us at the moment. There’s no further detail for the members, at all?

Hon. Mr. Meen: Mr. Chairman, the short answer is no. The detail I have worked up in my books, of course, is enormous and if it were capable of being abridged they’d be welcome to it. As it stands, I regret to say there isn’t anything more that I have immediately available for them.

Mr. Edighoffer: The reason I asked that is that during the supplementary estimates, I believe, some ministers did present somewhat more detailed information. I thought maybe the process might change somewhat because of the minority situation.

However, I won’t continue in that vein. We’re here to discuss the Ministry of Revenue. I’d have to say, similar to what the previous speaker, the member for Yorkview said, that I recall the minister’s speech on April 1 in the House. After listening to that speech I really wonder what we are doing here today. I thought everything was running so smoothly that there would probably be no need for any criticism or question whatsoever.

Mr. Reid: Should go to help clean up the Ministry of Health.

Mr. Edighoffer: However, I notice he did not answer one question which seemed to be asked by interjection during that speech. That was, “Why are you not applying your great restraint programme to the collection of taxes?” I didn’t hear any answer but maybe the minister will have something; or maybe he can’t answer that.

In looking over the estimates -- I’d like to thank the minister for seeing that the critics did receive copies a few days prior to those which were tabled in the House today -- I noticed that, of course, there is consolidation of the ministry administration and support services. I have to say this is commendable; however, I would say, as the previous speaker said, probably this does show that there has been some waste in the past.

I refer to the commendable part, the consolidation of a couple of branches. However, we must remember that these are the estimates and I want to remind the minister and the members that we do have the system of Management Board orders which we saw in the last supplementary estimates, I believe there was $900,000 set aside for the GAINS programme. I just hope that these estimates will end up to be the true actual estimates and, in this year in particular, I also hope we will see restraint in Management Board orders. I say this because, in the most recent Auditor’s report, I believe there was a figure of something like $1.3 million set aside by Management Board order for this ministry.

Mr. Chairman, I just hope I am in order in making a very brief comment on the GAINS programme. The Treasurer (Mr. McKeough), in his budget speech of April 6, said he would change the residency requirements for persons 65 years of age or over so that new applicants would meet the same 10-year residency criterion that is required for the OAS and GIS. In looking over the House of Commons debates, I found that on April 14 the federal Minister of Health and Welfare made a statement that by the full there would be amending legislation and if this legislation would be in place and, as the federal minister stated, if it would commence a new system which I believe would set out an earned benefit for a resident at the rate of one-fortieth of the eventual full pension for one year of residence in Canada after the age of 18, I just feel that, if I am in order, I would like to suggest that the minister should consult with the Treasurer and probably consider holding off that legislation until the federal amendments are enacted in the fall.

Mr. Chairman, I listened very carefully to the member for Yorkville covering past speeches --

Mr. Young: Yorkview.

Mr. Edighoffer: That’s right, sorry. The member for Yorkview.

Mr. Reid: It’s where he spends all his time anyway.

Mr. Edighoffer: I listened very carefully to the comments he made regarding the setbacks for market value assessment, and I certainly don’t want to go over that in that type of detail today. However, I can say that I agree with many of the things which he said and I cannot see why market value assessment has had to be delayed and, of course, was again delayed by the Treasurer in the recent budget.

However, I would like to make a few comments about the operation of market value assessment, and I really would like to make a brief comment on another item which the previous member touched on, and that’s on the shift in tax burden to small businesses in shopping malls. We, in this party, the same as many other members, have received many letters from businessmen who are most unhappy. I know that you, Mr. Minister, on at least one occasion that I know of, have sent out a very lengthy letter trying to explain the position, but I would like to just make a few comments in this area because I feel that there are some hardships for some small businesses which are affected by that recent amendment to the Assessment Act in 1974.

To me, the present situation seems to be that some malls are being assessed by the old method and some by the new method. It would seem to me that in all fairness the new malls could have been assessed in the same manner at least until 1977 or 1978 when the entire market value assessment was initiated across the province. Instead, the new malls were assessed in the new manner without developer or tenant prepared for or even aware of the new legislation.

The ministry should have realized that the method by which shopping malls are financed would result in a dramatic shift of tax burden from the large low-rental tenant on to the small high-rental tenant, with assessment now being based on fair market rent rather than area occupied. Realizing this, the ministry should have taken definite steps to make sure that both developers and tenants would be made aware of this new assessment method in order to avoid the explosive situation that resulted.

No exception is made for existing leases. Some tenants are locked into five- or 10-year leases and were led to believe by the developer that they would be paying taxes of a certain amount, based on actual taxes being paid in similar malls elsewhere. Instead, they are being faced with tax bills up to 10 times as high as those projected figures. The tenants are trapped in existing lease arrangements, since neither the landlord nor the small or large tenants were aware of this amendment.

Cases have shown large tenants having had their taxes substantially reduced below the projections made at the time of entering into the lease arrangement. The shift of the tax burden onto the small tenant is being appealed by most of them, but in the meantime they are actually facing possible bankruptcy because of this.

Realty taxes are still paid by the developer, but the assessment office apportions the total amount among the tenants, based on what it considers their fair market rent to be. The developer would naturally use this as a guideline. Business taxes are also a property-based tax and are calculated as a percentage of assessment, thus the result of this shift in assessment is to increase the assessments where the rents are higher and decrease the assessments taxed at the higher rate. Larger tenants are charged much less rent per square foot because of their attraction as the drawing cards of shopping malls. Smaller tenants pay higher rents because of the fact that they use their space much more intensely and usually have direct access to a common area in the mall, providing many facilities for the customers.

At the time this amendment was passed, it was not realized what a great range of rents were being charged in these shopping malls, and it was allowed to pass by the three parties. The implications of this amendment are now evident. Our staff and many members of the caucus have talked frequently with the minister’s office and, as I stated earlier, he has written many letters, or at least one letter I know of, trying to show that this shift in the tax burden is correct. He uses the argument that up until the change, small businesses were not paying their fair share of taxes in shopping malls. That may have been so, but that’s no reason to completely reverse the situation.

The intent of the legislation was to obtain a more equitable distribution of the apportioned assessment, and I would just like to quote from the minister’s opening remarks on this amendment. He stated:

“A formula is provided for apportioning the total assessed value of tenant-occupied property among the tenants and in accordance with the market rental value of the space they occupy so that the tenants occupying the most valuable space will be assessed for a greater portion of the total assessment of the property than will tenants occupying less valuable quarters within the same area.”


Previous to this amendment, the Act read that the assessed values were allocated on a portion of the square foot area occupied by each of the tenants. This meant that parts of the land and buildings were excluded from apportionment. The payment of rent presupposes that each tenant enjoys certain rights of access to and egress from the space he occupies. It therefore presupposes some interest in the common areas of rent and also reflects the value that the common areas add to their tenancy.

Up to this point the tenants were not paying taxes on these areas but under the readjustment arrangement the fair market rent would take into account the elements used in common, and this would be reflected in the value of the rent.

To me, the general reaction of most small businessmen is that it appears to be a classic example of big corporations and big government combining against the small entrepreneur. I think protection of the small entrepreneur is most important in this business society. I know I would be most interested in hearing whether or not the minister has received many complaints, which I feel he has.

Mr. Good: What is the minister going to do about it; that’s the thing?

Mr. Edighoffer: I know that this matter can be discussed further during that particular vote.

I would just like to touch very briefly on a couple of other items. As we can see by the estimates, we are talking about $206 million to be supplied to this ministry. The largest single item seems to be the transfer payments of the GAINS programme to senior citizens. I cannot, and I am sure many members of the House cannot, quarrel with these payments in these inflationary times. But many of the funds in the different votes are for administration and many of my colleagues, I know, want to speak on certain items which come under different Acts.

We have been receiving a number of complaints very recently because not too long ago -- in fact, I guess it was the same night that the budget was brought down -- this ministry sent out a number of tobacco tax declaration and remittance forms. They are called TB-1s. We had a number of these sent into our offices and I am wondering about the waste in this area because, as I understand, about 145,000 of these forms were sent out. When you start figuring that out at eighty cents each way, you come to a total of about $23,200 just for postage. Half of that is for the government for the first mailing, which means it costs $11,600 to just get out these forms.

I really wonder why the ministry couldn’t have figured out a way in which these forms would have gone to the distributors and then on to the retailers or somehow just gone to those who were in the business of selling cigarettes because we received many. For instance, here is one from a fuel company, and I know I received one in my own business. It seemed unnecessary to send that many out.

There are many items in this ministry. One area where I hope the minister will have an answer is in tax rebate. Late last fall there were some great difficulties after the last year’s budget allowed only a two-year period to apply for a tax rebate with the electrical utilities commissions. I understand there was approximately $10 million outstanding in rebates and I wonder if much of this has been returned to the utilities and if this matter has been settled or not.

As a small businessman, I appreciate the operation of this ministry. To some extent you might call this the cash register for the province. I understand from the April 1 speech that you’re moving to new quarters and it must be a challenge to find a cash register big enough to accept, I suppose, $15 million every day -- that really would include holidays -- which is quite an interesting operation.

In closing, this cash register seems to be becoming busier and busier each year and with the quantity of transactions the need is there for good administration to make certain that all programmes are dealt with fairly and expediently.

Hon. Mr. Meen: Mr. Chairman, there are quite a number of things to touch on, some of which, I suppose, could be dealt with just as well when we get under the individual votes. I think there are a few things I might touch on at this time in a more general sense.

Following more or less in the order in which the points were advanced, the hon. member for Yorkview had some mild criticism of my indicating the progress the ministry has made to date in economies, efficiencies and so on, sounding as though if I’m to take some credit it automatically casts aspersions and doubts upon the performance of my predecessors. I want to put this point on the record.

This is not something new which instantly happened with a sudden spate of constraints and the like. We have been working more toward a mechanization of records, particularly in corporation taxes, but in other branches of the ministry as well.

Of course, in assessment where we have converted from a multitude of different forms of assessment, which we inherited when we took over the municipalities, to one system -- and a computerized system at that -- we’re hound to be able to achieve, as we press on toward that conclusion of market value assessment, some economies of numbers and this is beginning to work forward.

It’s been an ongoing thing. I know that my predecessor was able to accomplish some economies when he was in charge of this ministry. It’s not anything which has just happened but certainly I felt at the time of my earlier speech in the Throne debate that both points were well worth making.

I’ve got a plethora of notes around here on various points made by the members as they ranged across all four of the votes in this ministry. I’ll try to touch on at least some of the major points. If I miss any of those the hon. members think I might touch on perhaps we can come back to them when we get to the individual votes.

The matter of assessment, of course, is one that I expected would be of great interest to all hon. members. We did take over quite a shambles by way of inconsistency of assessments as they were conducted in the various municipalities. It was difficult for Treasury and Economics to know, when they were making their equalization payments and grants to the municipalities, just how they would calculate these because the assessment formulas used by many municipalities were so different.

They seemed to vie for low assessments as I see it. They were trying to be consistent within their municipalities, mind you, but nevertheless they seemed to vie among themselves to get lower assessments so they could get larger transfer payments from the province. This made it more and more difficult for Treasury and Economics.

Of course, that was one of the reasons for our having to take this over because despite all the efforts of the old Department of Municipal Affairs assessment division in the past to get some kind of consistency among the municipal assessors, they were unsuccessful. As I say, that was one of the reasons for taking it over.

As my predecessor, Mr. Grossman, did say in 1973 -- I was interested to check the date with the hon. member for Yorkview -- We discovered and we had learned by about 1973 that there were about 270,000 properties which weren’t on the assessment roll at all. Of course these properties should be taxed and will be taxed with the new system.

I want to point this out too, that Mr. Grossman said and I have been at pains to say -- and I am sure he must have been similarly at pains to make this point -- that when we go to market value assessment we do not go to market value assessment, period. We have to have a reform of the taxation method applied to market value assessment.

Nothing could be clearer in demonstrating that point than what happened in Peel and in York when they went to market value assessment without benefit of some form of factoring of the residential assessment. Without some kind of adjustments in other fields it was inevitable -- as I say, it was graphically illustrated in those two areas -- that without the benefit of factoring of the assessments there would indeed be a shift to the residential quarter of the municipality.

We do not want that to happen, and so one of the major points in the 15-point proposal which the government is putting forward, is that it looks as though a factor of 50 per cent of fair market value as applied to residential accommodation assessment would be about right, to be assured that there would not be a significant shift -- in fact there would not be a shift -- of the tax burden from the industrial/commercial sector to the residential sector. And the other 14 points in budget paper E are all matters, along with the first of the 50 per cent of assessment for residential purposes, that we want the commission to study.

Dorothy McRobb and her committee, made up of members of the Ministry of Treasury and Economics, and the Ministry of Revenue, I think have done a great job in analysing the problems that would stem from a straight move to market value assessment. It is certainly stemming from their report to government, which was available to us back in February, that our 15 different points were developed.

We certainly are asking the commission to come forward as quickly as possible, but one point that I have made was that we would never go to market value assessment without adequate consultation with the municipalities, and with all other people and bodies whom we would consider to be affected by such a move. We do not want to rush into a market value assessment without giving the commission adequate time. We are guessing to some extent, I suppose, as to how long it will take the commission to make their report, but we are asking them to make their report by the fall.

I couldn’t agree with the hon. member for York-view more when he suggests that we should get on to market value assessment, get over this hodgepodge that we presently have for an assessment system. The sooner we can get away from these frozen assessments and on to something equitable, such as the method we are proposing, the better. But the point is, we can’t go into this unless we are certain that when it is applied, the results will be equitable. They would not he equitable if we simply took the route that occurred in Peel or in York, and we would under no circumstances see that it happened that way.

I have repeatedly assured the PMLC and others -- the city of Toronto; Arthur Eggleton called me the other day to ask me this very thing. I said to him that he could be assured that the municipalities and all concerned would have an adequate opportunity for input to the commission to determine just what is the best way to apply these principles.

Mr. Young: That should have been done three years ago.

Hon. Mr. Meen: I question that. Now, the hon. member for Yorkview on that point said my predecessor indicated the assessments were completed in 1972 or 1973. I am sure he did not mean completed in the sense we are talking about, because we really only got the market value assessments completed for residential purposes about the end of June or the first part of July of last year, and we only got the industrial and commercial sector completed about the end of 1975. So I had not heard that Mr. Grossman had indicated that the assessments were completed. I wonder if he had said something to the effect that they were virtually complete or well on the road or whatever he said --


Mr. Young: Could I --

Hon. Mr. Meen: Well, it’s of no consequence. I see the hon. member has it in print. It’s Xeroxed from Hansard, I suppose?

Mr. Young: That’s right.

Hon. Mr. Meen: I can take a look at that. But the fact of the matter is that the assessments are --


Hon. Mr. Meen: The assessments are now virtually complete, as I am advised. He may have been misadvised, but in any event I am advised that they are now. It’s clear that they were not at that time. We could not have gone into the commission stage then, and only now are we in a position to do that and I hope they will be able to have their hearing and give us a report on the 15 points or other recommendations that they may have by the fall of this year so that we can act on them perhaps in the fall session.

As I say, I would dearly love to have that in place now but I know perfectly well that that would depart from my undertaking of adequate consultation with the municipalities, and I know perfectly well that if we simply put it in place there would be bound to be some problems. We, Dorothy McRobb and her committee have worked long and hard to come up with principles that they think and that we think are equitable, but there may be some aspects to this that we don’t anticipate yet and we’re looking Ito the commission for some advice.

The commission will not, of course -- at least I don’t anticipate that it will -- comprise civil service. I do expect that the commission though will have available to it the staff of Treasury and Economics and of Revenue, who are conversant with this and who developed these 15 points which the commission will be looking at.

I think it was the hon. member for Yorkview who also asked about Teela Market Surveys. I am advised that Teela Market Surveys is owned by a Mike Feldman. I don’t know Mr. Feldman but apparently it’s a private company. In the past the ministry has had an arrangement with Teela whereby we provide them with roll numbers, property addresses and total assessments; all this kind of information is on the assessment rolls, of course. In exchange for that Teela has been providing us with a record of all the transactions.

They have their people in the registry office following all transactions as they go through, and so they have been providing us with a list of these transactions of purchase and sale, the names of the purchasers and the vendors, the sale price, financial arrangements -- that is how much cash and how much mortgage -- presumably the terms of the mortgage.

We could then, from our own records, determine whether the price was a realistic price on the basis of, say, one-third cash and two-thirds mortgage or was inflated in total price, if it were, say, mortgages totalling 95 per cent and only five per cent down, that kind of situation, would be of interest to us in determining the true value of that property. They give us a title search if we need it, they give us the legal description, and I understand also that they give us an outline of the land sold or secured, I presume a sketch showing the shape then.

As we go into market value and, of course, have our own figures, and as we’ve been updating our records so that we wind up with descriptions of every last parcel of land in the registry offices, that service -- as provided by Teela becomes less and less use to us and it is now being phased out. But that’s the arrangement they’ve had. They’ve not been receiving anything from us, and this is the point that I think the hon. member for Yorkview may have been thinking in terms of.

Mr. Young: No.

Hon. Mr. Meen: They’ve been getting nothing from us that was of a confidential nature.

Mr. Young: But they do use your information to make money.

Hon. Mr. Meen: No. With respect, they’ve been providing us with more, I suspect, in terms of information that was valuable to us than was of any real service to them. They could, with that information, then post that to their record and that would help in double-checking assessments and the like to have the roll number and the recorded names of the parties, of course. They were certainly doing the vast majority of the work in terms of the title search and all the other particulars they were providing to us. I suspect, if anything, the street ran in our direction in terms of benefits, more than it ran in their direction.

The hon. member was also talking about the amendment to section 17(3). In fact, the member for Perth touched on that at some length too, and perhaps I could range across their two observations in replying to the point on section 17(3). I would say at the outset that, indeed, I have received hundred; of letters, and I have replied, so far as I am aware, to virtually all of them. I don’t remember Mr. Taylor’s letter, but if it’s of any vintage I must have seen it and would have replied to it. It’s dated March 1, I see, and so presumably a reply has gone to him.

I think to some degree there’s a misunderstanding, but it’s an immensely complex subject. I guess the hon. members have come to realize this. To begin with, the amendment to section 17(3) does not affect all taxes. It affects only business tax. Real estate taxes are assessed against the owner of the shopping centre. Generally speaking, that owner apportions the taxes among his tenants on the basis of the square feet they occupy, but however it is done it is set out in the terms of the lease.

What 17(3) gets at is the assessment made against the individual shop owner and individual shop for purposes of business tax; the business tax is being levied against the owner directly. It was a logical extension of the principle of market value as applied to all real estate. As we would be applying market value to the assessment of the shopping centre itself for real estate tax purposes payable by the owner of the shopping centre, so it also seemed logical to extend the principle of market value to rental. In other words, fair market rent, which does not necessarily mean the rent the tenant is paying. It may be more or less than what he is paying.

The large tenant, the anchor tenant, in a shopping centre, generally has a pretty strong bargaining position when he is negotiating the terms of his lease with the shopping centre owner, because that shopping centre owner can turn around once that lease is negotiated and hypothecate a security when he comes to make his financing arrangements for the balance or the entire shopping centre for that matter. He frequently does assign the rentals recoverable under that anchor lease as security for the mortgage.

So that tenant, the anchor tenant, probably negotiates a pretty attractive rent, but that does not mean that that’s the fair market rent that he pays. The fair market rent might very well be a good deal more than that. By the same token, a small tenant, perhaps with very little bargaining power, may have to pay a premium rental for a few square feet in order to get into a particular shopping centre, recognizing that in the course of getting into that shopping centre he’s the beneficiary of maybe daily or weekly advertising by the anchor tenants, advertising of sales and the like that are put on by the major tenant in the centre. So he’s prepared to pay a good deal more per square foot because he is renting a good deal less and becomes the fringe beneficiary of a lot of the other activities that go on in the centre, courtesy of the larger tenant.

In his case, the fair market rental payable by him for assessment purposes might well turn out to be a lot less than the actual rent that he is paying. In other words, the assessment division may well look at the rent that’s being paid, but they take into account a lot of other factors, including the net revenues from the operation, the economic rent, as factors to enter in their calculations in determining what constitutes fair market rental.

A lot of the people who have written to me are not in shopping centres. Many of them are in strip stores on streets in towns around Ontario, and indeed on the Yonge streets of Ontario, and of course this kind of assessment does not hurt them at all. Regardless of their size, their business tax is not affected by somebody farther down the street if they are not in a shopping centre complex.

In fact, from what my advisers have told me, there may well be a reduction in the business tax payable by some of these shop operators where there is a greater apportionment of business tax against other parts of the building if they are, say, in a walk-in shop on Yonge St. and there are other business premises above them. In the past, the store has borne the larger part of the business assessment and the premises above have borne a much lesser amount. On this arrangement, under fair market rent, it is my advisers’ feeling that the actual business tax borne by a lot of these shop operators will come down under the principle in section 17(3) and not go up.

Having said all that, I should add that I am not unaware of, nor am I unsympathetic to, the problems of a lot of the smaller shop operators in shopping centres. I have been endeavouring to get to the root of the problem where they are concerned to see if there is not some solution to the problems in the shopping centres, without impairing the basic principle of section 17(3) as it applies to all other commercial properties that aren’t in shopping centres.

I have had a number of meetings with experts in the area of shopping centres to try to find some kind of solution to this dilemma. The people I have met with up to now have indicated that, with this explanation I have just been giving here in the committee, they are not prepared to say that there’s anything fundamentally wrong with section 17(3). But I have asked my staff to work with a committee, which I believe is now fully established -- certainly we have nominated our people to that committee -- to try to come up with some advice to me as to how we might treat assessments in shopping centres if we are going to treat that kind of assessment differently from section 17(3) assessments, where the properties are not in shopping centres.

I am advised that some of these anchor tenants -- and a number have been named to me -- would be quite content to go back to the old system, because it would appear that if we take fair market rental in shopping centres, the amount of tax that’s borne by the large anchor tenant for business tax purposes may nevertheless still come down. In other words, the basic point that the tenants in the shopping centres make, that their business tax would go up, I guess that is correct, because in the overall picture the anchor tenants’ business tax would come down somewhat.


It would not come down as much as many have thought. Nevertheless, it would come down some. I am advised by representatives of some very big businesses that they would be content to have some other scheme whereby they continued to bear the same, or roughly the same, proportion of total business tax in a shopping centre as they are presently bearing.

I think that is a very encouraging sign. We should be able to reach some kind of satisfactory arrangement for shopping centre purposes.

It was the member for Perth, I believe, who raised the question about notices sent out on budget night. Perhaps he can just nod his head. Was the hon. member for Perth asking about the 140,000 or so notices that we sent out budget night to all the merchants and why we didn’t send them out to the tobacco people?

One of the reasons for doing this directly for the small amount of mailing involved was that the sooner inventory declarations were in the hands of the merchants, the sooner they would be put on notice. The larger the inventory the larger the tax recovery at an additional five cents a pack.

They are responsible for it. We wanted them to be on notice at the first opportunity. We did not want to rely on 170 or so wholesale tobacco merchants to get the forms out to their dealers. It could take as much as two weeks in the normal route to get them around.

So, for the eight cents mailing cost, it seemed appropriate to get one in the mail to everyone. After all, those merchants are my agents. It is appropriate, I think, that I should advise them and see that they get the notice, the declaration, and the inventory sheets, as quickly as possible. That was the purpose of the mailing.

You should remember that we made an estimate of the additional revenue. It will be a while, I suppose, before we know how accurate the estimate was. The tobacco tax people estimated something like $2.5 million of additional tax of inbound inventory in the hands of the merchants, on budget night.

Remember too, the turnover in tobacco stocks is on about a two-week basis. If we delayed in getting those forms out they would have every reason for showing a lesser value for inventory by the time they get the forms. Consequently, there would be a significant reduction in the return of tax to the ministry. I would think spending $21,000 or whatever that works out to, for securing a fairly substantial part of a $2.5 million inventory is good economy.

The member also asked about retail sales tax rebates to utilities and municipalities. I don’t have that information at hand at the moment. It is doubtless in my material with respect to retail sales tax. I will endeavour to get that for him, Mr. Chairman, when we get to that point in the estimates.

Mr. Chairman: I assume we will have the concurrence of the committee to deal with vote 901 item by item.

On vote 901:

Mr. Chairman: Ministry administration programme, item 1, main office.

Mr. Renwick: Mr. Chairman, I just have two or three areas I wanted to cover briefly with the minister. I do thank him for the correspondence which we had on the efforts made by his ministry to deal with the restraint programme of the government. He responded, as he always does, both graciously and fully, to the inquiries which I made.

I am not going to raise in the House the provocative matters which he raised when he spoke to the Jaycees in York East about the government restraint programme. I am going to limit myself to the specific aspects of the response of his ministry to the restraint programme. I would then like to deal with a couple of other items which I believe are appropriate under the main vote, being of a general nature with respect to the administration of the ministry.

In the minister’s response to me about the restraint programme he stated that within the ministry they had accepted their fair share of the government-wide restraints and in so doing had attempted to ensure that the basic level of essential services is not disrupted. Then he went on to itemize specifically the actions which had been taken, cross-referencing the actions which had been taken to the Management Board’s instructions to implement eight specific cost control measures. I am not certain whether, in the typing, the cross-references were quite accurate. I may need a little help in clarifying whether the typing corresponds with what the minister was endeavouring to tell me.

He referred to the measure No. 3, which is a 10 per cent reduction in data processing budgets and then has opposite it the Minister of Revenue cut, a complement of 183. I think that is just an error in typography. I think he must have been speaking to the immediate freeze on replacement staffing. Is that correct?

Hon. Mr. Mean: Yes, I believe so. I think that 183 is 153. I think the member for Yorkview raised that point earlier and I think the correct number is 153.

Mr. Renwick: It should be 153?

Hon. Mr. Meen: Yes, I think so.

Mr. Renwick: The Ministry of Revenue cut then has beside it an asterisk indicating that it includes the effect of a previous complement decrease of three per cent. I would appreciate it if the minister, in line with what my colleague the member for Yorkview has said, would perhaps flesh out a little bit for us the nature of the cuts and what has happened to the people who have been part of that decrease in the complement of the ministry; the nature of the roles which were performed and how they were absorbed within the ministry; and whether or not they are, in a sense like other freezes, only considered to be of a temporary nature or whether they are the kinds of restraint cuts which, in any reasonable judgement, can be considered to be a permanent saving with respect to what the government is doing.

I am particularly interested in both sides of the equation; that is, the restraint part reflected in that cut and the assurance that the persons who have been cut have been dealt with fairly and equitably with respect to what they may now be doing. Also, to relate it to what the actual cut was either in the past fiscal year or when the cut did take place.

The second matter to which he referred was -- again I think the cross-reference may be wrong. It relates to measure No. 1 and has an item, $341,200, opposite. I assume that is probably the 10 per cent reduction in data processing budgets and is item No. 3 of the Management Board’s control measures. Am I correct in that?

Hon. Mr. Meen: I am sorry. Would you repeat that, please? I was distracted.

Mr. Renwick: Your letter to me indicated measure No. 1, $341,200 but measure No. 1, of course, is the staffing question, the complement. I think the correction should be that you were really referring in the $341,200 cut to the 10 per cent reduction in data processing budgets which would be measure No. 3. Then the third measure to which you referred was measure No. 7 which is a consolidation and rationalization of regional offices for a saving of $395,400. Then you referred to measure No. 2 which was an immediate moratorium on new or renewed contracts for management consulting and organizational planning of $1,070,700 and I would ask the minister to comment about the nature of that cut and what the meaning of the term moratorium is as it relates to that particular cut.

Then the minister went on in his letter to me and reiterated that they had done everything possible to avoid disruptions in service to the public by making cuts in what he referred to as these discretionary areas and listed four effects that it had upon his ministry. I would like comment from him about what the effect is on the service to the public, considering that this is basically not only a revenue-collecting ministry but a service ministry in the strict sense of the term.

The four items were: 1. a delay in the implementation of an on-line computer system in the Province of Ontario Savings Office; 2. a change to the public information programme affecting Ontario tax credits, replacing booklets with articles published in magazines; 3. a delay of at least one year in the implementation of a computerized revenue division data base which is an integral part of our tax simplification programme; 4. the suspension of development work on longer-term refinements to computer applications within the assessment division.

That is the self-contained area that I wanted to discuss with the minister. Perhaps the minister would like to respond to those matters now before I move on to the other area that I do want to deal with briefly.

Hon. Mr. Meen: Yes, Mr. Chairman, certainly the basic reductions in personnel have been made without, I think, any terminations. We may have terminated one or two but if they have been terminated, I don’t know where they have been. Generally, the reductions have been accomplished through attrition of retirements, normal resignations and death, and simply a restructuring of the workload within the various parts of the ministry. They are not temporary. I would expect that they are permanent. We may be able to accomplish more.

The member for Yorkview -- or was it Perth? -- raised the question of the 31 regional assessment offices and the Henderson report as to whether there can be some rationalization of those when we’re finished with market value assessment. I think that we will be able to do something like that, but again, it will not be at the expense, by and large, of laying off dozens of employees, if one rationalizes some of the offices, reorganizes the regions and so on.

These are ongoing programmes and as we get a little farther along with market value reassessment, to use that illustration, we will obviously have redundancies in operations where there won’t be the same degree of workload in those offices and we will be able to accomplish some further economies there.

Mr. Renwick: Perhaps I could ask one question before you move on from that item. Can I have an assurance -- and not right now if it is not possible to give it to me; perhaps after the estimates are over, by letter -- that of the persons who have been part of the reduction of the complement of the Ministry of Revenue, all of them have been simply reaching retirement age or voluntarily leaving the service of the government?


If that is not the case, then could we have specifies of those persons, not necessarily by name, but by classification, who perhaps are the exception to it? I refer to those who were in fact terminations because of the need to cut the complement. Could I have the second part of that assurance? Again, I don’t anticipate that all that information is available immediately. Could I have assurance that there has been no adjustment downward in the grade classification within the civil service classification of any of the persons who were affected by that reduction in complement? I’m most anxious to have that information, if I may.

Hon. Mr. Meen: Mr. Chairman, there have been no terminations, I am advised. I don’t know of any instances under this programme where there has been any downgrading of a position. There is one instance in which one of the staff has been moved into a position of a lesser salary level -- he’s red-circled -- but that is the only one I’m aware of.

Mr. Renwick: I can take it I don’t need a letter from you? I can take that as an assurance from the minister?

Hon. Mr. Meen: My deputy advises me that this is the case. There has been none but, if the hon. member would like me to do a double-check on that, I certainly would not mind going to that additional work to assure myself that it is the case.

Mr. Renwick: I would appreciate it.

Hon. Mr. Meen: Not that I have any doubts about his knowledge of it.

Mr. Renwick: No.

Hon. Mr. Meen: But, I think, maybe he and I would both like to make sure that has not occurred as a result of this programme.

Certainly there are occasions when employees, for whatever reason, reach a level where perhaps they feel they should be moved into something of a less demanding nature as they move along. I would just indicate that, although it’s possible, there are one or two of those in that category. Those would be cases I would not consider a part of this programme of constraint. That’s for other reasons altogether.

Mr. Renwick: I would appreciate hearing from you at a convenient time.

Hon. Mr. Meen: I’m only too happy to do that. The member has raised a number of bewildering points in talking about these various measures of constraints such as the 10 per cent reductions and whether they are with respect to the EDP, or whether they were personnel or complement cuts. I’m not quite clear on the nature of his question. Certainly, if I understand measure No. 1, it was with respect to complement --

Mr. Renwick: Which is the number we have been talking about.

Hon. Mr. Meen: Yes, to 3,962 from 4,115.

Mr. Renwick: My next item was also measure No. 1. It was $341,200, so I thought it was a transposition and probably meant item 3 of the cost control measures.

Hon. Mr. Meen: I can’t say that I am clear as to whether that would be the figure. Measure No. 2 is $341,200.

Mr. Renwick: Oh, that’s measure No. 2. Thank you.

Hon. Mr. Meen: If last time I showed that as measure No. 1, then I was mistaken and I apologize to the hon. member. It looks as if my 183 figure may have been correct in the first instance in terms of the gross cut. We did have a complement cut of 183. I believe it was in the GAINS branch where we had a number of people on contract since the institution of the GAINS programme in July of 1974.

It was inappropriate to have people on long-term contract on a programme that is here to stay. I think the 30 were added back in making a net complement cut of 153 instead of 183.

Management Board approved an addition of 30 back in I think that was with respect to GAINS. The net effect was then 153 but it was originally 183. That explains the two different figures.

Mr. Renwick: So the net reduction is 153.

Hon. Mr. Meen: That’s correct.

Mr. Chairman: Item 1.

Mr. Villeneuve: Mr. Chairman --

Mr. Renwick: Mr. Chairman, I don’t mean to interrupt but I have asked a number of other questions which related to the same area of concern. I’d like to pursue them.

I have now got it straightened out that the $341,200 refers to the moratorium on new or renewed contracts for management consulting and organizational planning. Is that correct? Would the minister comment on that?

Then would he correct for me the measure No. 2 that I have for $1,070,700, which presumably, and I can only guess, is the 10 per cent reduction in data processing budget.

Hon. Mr. Meen: I am sorry, I was momentarily distracted. The moratorium on consulting which the member was asking about, you see we have been trying to get into new computer systems for possibly a combination of corporation tax and retail sales tax, and new computer systems generally, and this had been intended as some studies along that line. So we just simply put that off for the time being.

Mr. Renwick: That’s the $341,200 and that’s not permanent, that’s a moratorium.

Hon. Mr. Meen: That’s right. If we should be able to find it practical next year to get on with this, it is something that we think should be done.

Mr. Renwick: All right, now measure No. 7 is the consolidation and rationalization of regional offices of $395,400. I don’t believe I need a comment, provided that’s the correct cross-reference, is that right?

Hon. Mr. Meen: I am told that is correct.

Mr. Renwick: Right. And the last item which must then be incorrect is measure No. 2, $1,070,700.

Hon. Mr. Meen: That’s measure No. 4.

Mr. Renwick: That should be measure No. 4, and measure No. 4 is the 10 per cent reduction in direct operating expenditures, such as travel, communication, supplies, services, furniture and equipment. Is that correct, or does it need any further elaboration from the minister?

Hon. Mr. Meen: I don’t think so. I believe that’s correct.

Mr. Renwick: Then I would like to know of the four items which were the impact on the service which the ministry provides, which I quoted a few minutes ago from his letter to me, to what extent is it affecting the service of the ministry? For example, I will leave aside the Province of Ontario Savings Office on-line computer system, until we come to that vote. But what is the effect of replacing booklets about Ontario tax credits with notices published in magazines, or articles in magazines?

Hon. Mr. Meen: I suppose it means there may be some who just don’t fully understand and perhaps don’t know enough then to make the application for a tax credit. For three years, I guess it would be, we did have pretty substantial advertising programmes in that end to try to acquaint people with the programme, being a new programme. We concluded that this year, faced with these constraints, this kind of thing -- such as booklets by the hundreds of thousands placed all over the place, in banks and our own savings offices and every place where we could get a counter to put some of them out -- maybe wasn’t giving the kind of return that the cost ought to justify, and that in the long run, since the programme had been in effect for three years, perhaps for this year anyway we could trade on the knowledge that these people would have acquired.

We are not going to know too early, because a lot of returns won’t be filed until the end of this month, but we are hoping that the cutback in that area will not significantly reduce the understanding by the taxpaying public of the tax credit programme. I have been on radio and my staff have been on radio and television and in the press whenever we can to try to get as much publicity as we can. Maybe that’s just as effective; I would like to think that it was.

Mr. Renwick: Mr. Chairman, I don’t think I need to deal with the other three items. As I say, the one comes under the Province of Ontario Savings Office. They are really all related to delays with respect to your computerization programme, as I take it; in a sense they are deferrals of more elaborate use of the computer system within the ministry.

Hon. Mr. Meen: Yes.

Mr. Renwick: If that’s the case, I would like to deal with the second area which is of concern to me.

Mr. Chairman: Is that in item 1?

Mr. Renwick: Yes, Mr. Chairman. I don’t think you were in the chair when I got up. I had just two areas I wanted to deal with on this first vote.

My concern is that the Ministry of Revenue would appear -- my reference is to the auditor’s most recent report and I use the figures only for illustrative purposes not for accounting purposes. The Provincial Auditor’s last report, for the year ended March 31, 1975, says that for practical purposes the Ministry of Revenue collects about 60 per cent of the total revenues of the province.

Using that figure, my concern, really, is why is it that the Ministry of Revenue does not extend the operations of the ministry to cover some obvious matters where there have been revenue accounting problems for the government because the collections are made by other ministries?

Hon. Mr. Meen: Mr. Chairman, is the hon. member referring to things like mining tax? What are you thinking of?

Mr. Renwick: Yes. I can give you the specific items I want to refer to. I am particularly concerned in the revenues of the province that the Ministry of Revenue does not take on -- I believe it can be split off in such a way as to be taken on by the Ministry of Revenue -- the vehicle registration fees of the Ministry of Transportation and Communications which have now been transferred, as I understand it, to the Ministry of Government Services. I am not certain about that.

In any event, it is quite obvious from the auditor’s reports over some time that the system of collection of motor vehicle registration fees is inadequate and it would appear to me that that substantial amount of revenue coming to the province by way of fees should come through your ministry. I don’t think it need to be hung up, as a proposition, on the fact that the issuing of the licensees is tied in with the other operation of the Highway Traffic Act dealing with cancellations and all of that kind of rigmarole.

I am talking about the annual method used for the collection of the registration fees. In my judgement there are very severe condemnations of the present system set out in the auditor’s report and, of course, they have been commented upon and repeated for some recent years as well as the current time. That’s one area which I think the ministry should be responsible for.


The second area which I am equally concerned about is why the Ministry of Revenue is not concerned with -- I am sure you are waiting on my words -- the problem of collection of unpaid amounts under the Motor Vehicle Accident Claims Fund. The auditor’s report indicates quite clearly there are significant amounts of money owing to the fund which are not being collected at the present time. Surely the Ministry of Revenue is the ministry which has the machinery for the collection of those funds.

Again, it is not related to the question of determining the Obligation of citizens to the fund. It’s a question that, when the obligation to pay is settled, and the amount owing confirmed, why isn’t the collection process part of the Ministry of Revenue? I’m sure there are good reasons why it should be. I can think of no reason why it should not be a part of the function of the Ministry of Revenue to collect outstanding amounts. These go on year after year because of the nature of the settlements which are made after the full amounts of liability have been determined.

The third area about which I am concerned is in the Ministry of the Attorney General with respect to significant court costs outlined that are paid but not remitted to the province in certain instances. Also, where there are significant delays by some courts in remitting prepaid fines to the province, and where there are significantly large amounts of unpaid fines imposed by the provincial courts but never collected. Again, the Provincial Auditor’s report sets out in some detail the amount of unpaid fines which are not collected.

Surely there should come a point in time when the decision has been made, and the amount owing is understood and is clearly accountable to the province, that this Ministry of Revenue should have that responsibility. We shouldn’t fool around with the Ministry of the Attorney General collecting those amounts of money.

I simply refer to the fact, as far as the auditor is concerned, that the statistical records prepared by the management audit branch of the Ministry of the Attorney General indicate the collective total of unpaid fines imposed by provincial courts throughout Ontario amounted to $17,600,000 at Sept. 30, 1974. There is a whole aging process which could certainly be undertaken to find out which of them are collectible, and which are not, and how it should be dealt with.

I’m not suggesting I have been exhaustive in the areas that are of concern to me. I am saying I’ve used those three particular examples as the kind of function which should be performed by the Ministry of Revenue and not loft scattered out among the other ministries who do not have the kind of skills and abilities which the ministry has for follow-up, collection and enforcement of these claims.

I’m sure I could think up others, but the three of great concern to me are: the unpaid amounts outstanding under the Motor Vehicle Accident Claims Fund; the unpaid fines in the provincial courts and the related matters of moneys not paid to the province from the court system of the Province of Ontario, and the one that I originally referred to, and that is, the collection is -- what? -- about three-quarters, as I understand it, of the so-called fees which are collected by the province, and centred in the motor vehicle registration system.

I would appreciate at least a brief comment from the minister on those matters which I believe are strictly within the main office vote of his ministry.

Hon. Mr. Meen: Mr. Chairman, the hon. member raises an interesting area for discussion -- that is, whether the Ministry of Revenue should extend operations beyond the administration of the taxing statutes of the province. That’s really what he’s asking.

I would venture to say the main assignment of this ministry is to administer 16 taxing statutes. We have the other programmes -- the OTC and GAINS and tax -- but the negative income tax programme is certainly not a taxing statute; it is anything but.

It’s related to income. The GAINS programme is related to income. They all have that common thread.

The other area, of course, of municipal assessment from the standpoint of the province is not related to anything except to get a common taxing base for the benefit of our partners, the municipalities.

I have always tended to look upon vehicle registration fees and the collection of those fees -- in this case by the Ministry of Transportation and Communications; if it is being moved to MGS, it’s news to me -- but by whoever, as only a part of the total function of the vehicle registration. The monitoring of ownership and transfers and cancellations and the like has to be the major part of that activity.

Surely, the collection of the fees on transfers and on renewals is an ancillary part; albeit when you look at the number of dollars in the Treasury of the province -- some $221 million estimated for the current fiscal year -- it isn’t petty cash. All the same that function which the hon. member would suggest the Ministry of Revenue take over seems to me to be far more than just the collection of the fees which these various local registrars around Ontario are able, I’m confident, to collect and to remit.

Really, I don’t know enough about the collection of unclaimed amounts under the motor vehicle accident claims fund to indicate to the committee whether that would be a matter related in any sense to the activities of my ministry. I don’t really see how it would be, except to the extent that anybody, such as the Ministry of Revenue or the motor vehicle accident claims fund itself, would have a claims or collection department. Perhaps what the hon. member is talking about is that we set up a ministry called a collections ministry or something to that effect.

It would then be going far beyond the aspect of administration of taxing statutes under which you have 189,000 retail merchants or 145,000 recorded corporations or X number, 170 or so, recorded tobacco wholesalers; and I’ve forgotten how many recorded gasoline manufacturers. All of these, within various taxing statutes, are recorded with the ministry and licensed. We have our people checking with them and a flow of communication back and forth. It seems to me a completely different kind of operation in revenue from that contemplated in the collection aspect of going out; writing the typical dunning letters which a collection agency would start with; followed in due course by the issuing of a writ and then the usual process through the courts.

We have our own activities in that regard, of course, when people are in default of filing returns, but again we are proceeding under the Act. We either have or have not their returns; we have things to start with. It just doesn’t seem to be something that, to my mind at any rate, fits in with the activities of the ministry.

On court costs, I wonder who is best able to assess the adequacy of court costs? I think the hon. member indicated that maybe they’ve already been established, so perhaps there’s been a taxing of accounts. The costs are established, but again he’s asking that a form of collection activity be undertaken by a ministry which, by and large, is involved in other things. I’d have thought that the body presently responsible for the collection of the court costs under the Attorney General would be the one best equipped with the knowledge whereby they would proceed to make these collections. I am moved to ask the hon. member if he thought that those items might be brought in under revenue, why not the collection of OHIP premiums, for example, at $790 million, if we think that $221 million for vehicle registration is large?

Mr. Renwick: I think that if the minister would allow, I have a comment on that.

Hon. Mr. Meen: Yes, certainly.

Mr. Renwick: My answer to that was that in the case of OHIP you have an income and outgo operation. You have the payment of the doctors and hospital accounts. In the case of fines which are levied by the Crown in the provincial courts where you have $17 million outstanding, not collected at the present time, that is a straight collection operation. They are recorded in the court offices and it is quite obvious that it is a serious defalcation not to have collected and not to have some continuing method of making certain that those fines are collected.

That’s the distinction which I make and that is also the distinction I make with a great bulk of the motor vehicle accident registration fees during the period of time when the new licences for the current year are first offered for sale until Feb. 29, or whatever the annual cut-off date is.

In the other area, with respect to the motor vehicle accident claims fund, these are amounts that are finally determined. There is no outgo in connection with them, it is simply a question of collecting the funds which are due to the province. So it is the collection operation; and if the minister wants to say that I am advocating that the Ministry of Revenue, in addition to its collection obligations under the 12 taxing statutes, including the Retail Sales Tax Act, should enlarge that collection operation or establish a separate division for collection purposes, then I think yes, my answer obviously is yes.

What I am saying is that there is an obligation on government to so establish their collection processes that we are not faced with the kind of failure to collect which is evident throughout these other ministries. In a strange way, your ministry deals solely with money. The other ministries, in many ways, deal with other areas of concern and do not have and cannot of necessity be expected to have the kind of skills that are required for the, if I may use the term, sympathetic collection of outstanding amounts owing to the Province of Ontario but not to be paid out by the Province of Ontario.

Hon. Mr. Meen: The hon. member certainly poses an interesting question. I have never really given that much thought -- I would be less than honest if I were to say that I had given it any thought -- beyond assessing the role of the Ministry of Revenue as the administrator of taxing statutes basically.

In the rationalization of all of the functions of government, if it were that maybe one section of one ministry should be devoted to the collection of all accounts -- whether they were accounts established in the sense the hon. member for Riverdale assesses, an account taxed and established in the court and owing and outstanding and so on -- if the collection of all accounts of that sort were centralized in one agency, it would probably be more efficient. I can imagine that a case could be made for something like that.

I am not about to say that I believe the Ministry of Revenue should take that over; but I would say this, we should give it some thought It might just be that an agency in a ministry devoted to that kind of activity might be a very sensible route to go when one does look at the sizeable amounts of money that are outstanding under various ministries as they presently show.

Obviously, I have nothing in my estimates this year for something of that sort, but that is interesting to contemplate and I will have my people take a look at it with a view to determining whether there is anything of a practical nature that can be done.


Mr. Renwick: Mr. Chairman, I just want to narrow the scope of what I was asking the minister and this will be my last word, at least on this matter.

I don’t mean that the ministry should be responsible for all amounts owing by anybody to government. I am not casting the net that wide. I am looking at the statement of revenue, shown as exhibit 3 in the Provincial Auditor’s report, which brings the 12 taxing statutes within the area of the statement of revenue. Then it has certain other headings. Royalties, for instance, which are in the nature of a tax in the broad sense of the term; I haven’t referred to those because there may be special considerations about them.

I am referring to “fees, licences and permits,” which again comes within the broad context of taxes, of which the significant proportion is the registration of motor vehicle fees. I am referring to the third item, “fines and penalties,” where the total revenues of the province in 1975 were $42 million; but, as I said, accumulatively there are $17 million outstanding somewhere around the province.

I am not referring to sales of lands, businesses or facilities, and I specifically didn’t refer to the Ontario Health Insurance Plan because of the inflow-outgo operation. That’s the limit of what I wanted, and if the minister perhaps would consider it solely in the purpose and the interest of the efficiency of government in collection of the moneys which are owing to it, I think it would be helpful.

Mr. Villeneuve: Mr. Chairman, I would like to ask the minister a straightforward question. The Premier of this province (Mr. Davis) has often assured the Franco-Ontario population that the ministry as a whole would accept and try to give information in Canada’s official second language to the extent that that would be feasible. Since taxation affects each and every citizen of this province, has your ministry given any consideration to implementing the bilingual programme here?

Hon. Mr. Meen: Yes, we have quite a bilingualism programme, Mr. Chairman. I think my ministry is one with a real policy directive on bilingualism.

All my branches answer French correspondence in French. I have informed the central government switchboard of persons to whom French calls should be referred. All documents in wide public use are bilingual now, notably and particularly the GAINS and the assessment material. There are 20 French or bilingual documents produced in the ministry altogether.

Signs in certain designated bilingual areas, in my ministry offices, are being replaced with bilingual signs as they require replacement. I don’t know whether the member would be interested in this, but in Sudbury and North Bay the signs are bilingual. In Windsor and Welland they are presently English. Ottawa is converting to bilingual sings. That’s under retail sales tax. For assessment, designated areas are bilingual. The Province of Ontario Savings Office at Pembroke is bilingual, for example.

The retail sales tax branch, I am advised, has appointed a bilingual co-ordinator, who will determine what forms and documents need to be translated; and he is going to set up facilities for hearing notices of objection in French too. Retail sales tax bulletins and relevant forms are going to be produced in bilingual versions. Retail sales tax notices of objection are going to be heard in French.

The gasoline tax branch will be producing a letter in French explaining gasoline tax refund claims, and it is going to attempt to recruit bilingual auditors. All reassessment advertising and information, as I indicated, is going to be bilingual.

POSO, our Province of Ontario Savings Office, is going to make French cheque books available, in addition to currently available deposit and withdrawal slips that are bilingual; and recruitment advertisements in some of these designated areas will be in bilingual form.

I don’t know if that’s enough detail for the hon. member, Mr. Chairman, but in case he wanted anything more, in my GAINS programme I probably have some further details I could give him.

Mr. Villeneuve: That’s pretty much what I wanted to find out, Mr. Minister. I’m quite satisfied with your answer.

Hon. Mr. Meen: Well, thank you very much.

Ms. Chairman: The hon. member for Niagara Falls.

Mr. Kerrio: Mr. Chairman, my remarks will be directed in one specific area -- refunds in the motor vehicle fuel tax area. The ministry, in the amended Act of 1972 -- would that come in this vote?

Mr. Chairman: No, that’s not in the main office vote. That would come later on.

Mr. Kerrio: Could you indicate where? I want to talk specifically on the motor vehicle fuel tax refund.

Hon. Mr. Meen: That’s vote 902, item 3, Mr. Chairman.

Mr. Chairman: The hon. member for Beaches-Woodbine.

Ms. Bryden: Thank you, Mr. Chairman. I wanted to make a few general comments under the main vote, and the first thing, I would like to say is, it isn’t really the ministry’s responsibility, but I think we should complain that the estimates for this ministry were just tabled today; even though I appreciate the fact that the ministry did send us a Xerox copy, although it was one single copy for each opposition party.

Hon. Mr. Meen: If I may just comment, I didn’t get my copy until today either. I’ve been working from a Xerox copy. The hon. member for Beaches-Woodbine could have had any more number of Xerox copies if she’d asked for them.

Ms. Bryden: Thank you, Mr. Minister. In a lot of jurisdictions, the estimates are table before the budget so that members do have an opportunity to study them, and the official printed copies are available for all members without having to seek them out.

This ministry, if you subtract the CAINS transfer payments which are a specialized programme, according to the estimates will be spending about $68 million, of which approximately 60 per cent is for the assessment programme. So it is really a two-pronged ministry, a revenue-collecting ministry and the administrator of a very important municipal tax base programme, namely the assessment. I think, even though the amounts may not be very great, we have to look at the figures here, which seem to indicate that in most areas the ministry is holding the line on expenses.

There are only two conclusions one can draw from that: Either the expenses of the previous year were somewhat excessive, that there was waste and they have been able to cut that out in order to bring their expenditures down somewhat below last year in many of their branches; or the 1976-1977 figures are unrealistic.

As we go along in some of the estimates, I must say that I’m going to question how some of the services votes can be cut so drastically. There must have been a drastic change in programmes, or some of the previous services were found to be unnecessary.

For example, under management systems, the services vote had gone down from $473,000 to $170,000; the supplies have gone down from $61,000 to $23,000. I just wonder, how realistic that kind of a cut is, or is it simply window-dressing and they may run out of supplies and borrow from somewhere else until the fiscal year is over? In other words, have we got real elimination of waste or is some of it cost-catting for this particular year and it will all be put back in as soon as March 31, 1977, goes by?

I think it’s rather interesting that this is the first year we have something called policy and planning in the ministry administration. The descriptions of our ministries put out by the Civil Service Commission and other people who publish booklets on the government say that is a non-policy department. That may be a good description of it, but it apparently has a policy and planning branch now. If it has any policy functions, I think it should be looking at some of the questions that my colleague the member for Riverdale (Mr. Renwick) raised as to whether it could take over some of the revenue-collecting functions of other branches. There are a few other areas to which it might consider persuading the cabinet that its jurisdiction should be extended in order to prevent duplication in the government

For example, I understand that when the assessment is completed there will be a complete registry of all housing in the entire province. This could be very valuable as a data bank for the Ministry of Housing in planning future programmes. It wouldn’t need to take as many surveys of need if it has all this information in the Ministry of Revenue. I understand that the assessment branch will also have complete financial reports from all apartment owners, which could be provided to the rent review people so they wouldn’t have to go in for as much collection of data whenever applications for increases are made.

I have heard that the North Pickering community operation, which is planning the new town and was considering acquiring a good number of parcels of land, set up its own computer operation, costing several million dollars, to get an inventory of all the land in North Pickering; and that the assessment branch was doing the same thing. If this is true, this is another area where the ministry perhaps could have been alert to the fact that this was going on and got the two operations together in order to save money for the government and for the taxpayers.

With regard to the assessment operation which the ministry took over in 1970, we seem to have had nothing but a series of starts and then restarts, changing the basis and changing the manual; and then postponements year by year on various pretexts or excuses. I think in 1973 the first one was that the California manual hadn’t worked out and hadn’t produced market values, and I’m not surprised. Then they said that the sudden surge in realty values, particularly in the residential field, had upset their programme, although it seems to me that if the first assessment had been done right they could have factors ready to update as required.

As my colleague the member for Yorkview (Mr. Young) said, it looks as if these were merely excuses and the government just wasn’t ready to face up to the impact of what reassessment at market value was going to do.

We have been warning the government about the shifts that would occur from commercial and industrial to residential as a result of reassessment to market value. I think our members on the John White select committee and on the Smith report warned about that, and said that the government should be planning how to adjust and react to that impact, how to compensate for it and prevent it from happening in a lot of cases.

Mr. Chairman: I must remind the hon. member that we have reached the time for our usual dinner break.

The House recessed at 6 p.m.