FAIR MUNICIPAL FINANCE ACT, 1997 / LOI DE 1997 SUR LE FINANCEMENT ÉQUITABLE DES MUNICIPALITÉS
CONTENTS
Thursday 1 May 1997
Election of Chair
Election of Vice-Chair
Fair Municipal Finance Act, 1997, Bill 106, Mr Eves / Loi de 1997 sur le financement équitable des municipalités, Projet de loi 106, M. Eves
Ministry of Finance
Ms Marion Crane, director, tax design and legislation branch
Mr Gerald Sholtack, senior counsel (revenue), office of legal services
Ministry of Municipal Affairs and Housing
Mr Almos Tassonyi, senior economist, municipal finance
STANDING COMMITTEE ON FINANCE AND ECONOMIC AFFAIRS
Chair / Président: Mr Terence H. Young (Halton Centre PC)
Vice-Chair / Vice-Président: Mr WayneWettlaufer (Kitchener PC)
Mr TedArnott (Wellington PC)
Mr TobyBarrett (Norfolk PC)
Ms IsabelBassett (St Andrew-St Patrick PC)
Mr JimBrown (Scarborough West / -Ouest PC)
Mr GaryCarr (Oakville South / -Sud PC)
Mr JosephCordiano (Lawrence L)
Mr MonteKwinter (Wilson Heights L)
Mr TonyMartin (Sault Ste Marie ND)
Mr GerryMartiniuk (Cambridge PC)
Mr GerryPhillips (Scarborough-Agincourt L)
Mr GillesPouliot (Lake Nipigon / Lac-Nipigon ND)
Mr E.J. DouglasRollins (Quinte PC)
Mr WayneWettlaufer (Kitchener PC)
Mr Terence H. Young (Halton Centre PC)
Substitutions/ Membres remplaçants:
Mr TimHudak (Niagara South / -Sud PC)
Mr John L. Parker (York East / -Est PC)
Mr JosephSpina (Brampton North / -Nord PC)
Clerk / Greffier: Mr Franco Carrozza
Staff / Personnel: Ms Alison Drummond, research officer, Legislative Research Service
Mr Mark Spakowski, legislative counsel
The committee met at 1007 in committee room 1.
ELECTION OF CHAIR
Clerk of the Committee (Mr Franco Carrozza): Good morning, everyone. Welcome back. I must inform you that there have been changes in the committee membership. We must elect a Chair and a Vice-Chair. I now open the floor for nominations.
Mr Gerry Martiniuk (Cambridge): I have the distinct pleasure of nominating Terence Young to stand for election as Chair of this committee.
Mr Gerry Phillips (Scarborough-Agincourt): I'll second that.
Clerk of the Committee: Any other nominations? I now close the nominations and ask Mr Young to take the chair.
The Chair (Mr Terence Young): Thank you to my nominator and my seconder. Before we move to electing a Vice-Chair, I would ask the research assistant to distribute some documents, a summary of recommendations. Also, Mr Hudak made a request for information regarding differentiation of assessments, so that will be distributed now.
Interjection.
The Chair: It's done? Okay, that's done.
ELECTION OF VICE-CHAIR
The Chair: We'll move right to the election of the Vice-Chair. I open the nominations.
Mr E.J. Douglas Rollins (Quinte): It gives me great pleasure to nominate for Wayne Wettlaufer Vice-Chair.
The Chair: Any further nominations?
Mr Phillips: Do you need a seconder for that?
Clerk of the Committee: Not in committee.
The Chair: The nominations are closed. I declare Wayne Wettlaufer to be the Vice-Chair of this committee.
APPOINTMENT OF SUBCOMMITTEE
The Chair: I'll now entertain motions regarding the establishment of a subcommittee for committee business.
Mr Jim Brown (Scarborough West): I move that a subcommittee on committee business be appointed to meet from time to time at the call of the Chair, or at the request of any member thereof, to consider and report to the committee on the business of the committee; that the presence of all members of the subcommittee is necessary to constitute a meeting; that the subcommittee be composed of the following members: Mr Young, Ms Bassett, Mr Pouliot and Mr Phillips; and that any member may designate a substitute member on the subcommittee who is of the same recognized party.
The Chair: All those in favour? Any opposed? Carried.
FAIR MUNICIPAL FINANCE ACT, 1997 / LOI DE 1997 SUR LE FINANCEMENT ÉQUITABLE DES MUNICIPALITÉS
Consideration of Bill 106, An Act respecting the financing of local government / Projet de loi 106, Loi concernant le financement des administrations locales.
The Chair: The government has presented some replacement amendments which I'd like to make sure are distributed.
Mr Gilles Pouliot (Lake Nipigon): How many, Chair?
Clerk of the Committee: I will give them to you in a moment. For your notice, there are four, plus a new one. The first one will replace 2, so I've marked that 2A. I will give it to you in a moment. The second one will replace 4. The third is to replace 5. Then there is a new amendment to section 55, subsection 372(3). The last one will replace 31.
Mr Pouliot: Point of order, Chair: First and foremost, congratulations to you and to the Vice-Chair on your election -- well, appointment. How many amendments do we have from the government side on Bill 106 as we go to clause-by-clause?
The Chair: I have 43 amendments right now. We have replacement amendments being distributed. I haven't counted how many are government amendments, so I'll let the parliamentary assistant answer that.
I'm going to ask the clerk to go through these replacement amendments and make sure the members have them attached to the right section. Would you mind doing that, please?
Mr Phillips: On a point of order, Mr Chair: The committee had agreed that all amendments would be in by 5 o'clock on Friday, April 25. I don't know what the procedure normally is, but I had assumed that was the instruction to our committee. Is it permissible for us to be entertaining amendments now? I'd like to know that for now and I'd like to know it for the future when we have an agreement and that doesn't then seem to have any force of weight.
The Chair: Under standing order 75, the parties can submit amendments until two hours before the committee sits "when time permits." If you have any further amendments, if you were to submit them right now I would rule them in order. I apologize on behalf of the clerks' department for that miscommunication. You thought you had to have your amendments in by Friday at 5 o'clock and there was a miscommunication on the subcommittee, I understand.
Mr Phillips: If that's the way we want to do it, I don't know why we would ever agree to the amendments being presented to the clerk at 5 o'clock on Friday, April 25. If that was how we were going to work, I would have liked to have known that and said: "I won't go through a lot of work to get them in on Friday. I'll just wait until two hours before the committee." I assumed that was the agreement. I'm not going to be sticky about this, but if that's how the committee wants to work, I think we've got some trouble.
Mr Pouliot: For the record, the NDP amendments, the third party's amendments, were in by -- I need your help, Franco -- Tuesday, so we had exceeded the deadline, although in terms of "miscommunication," we thought we had that flexibility. Now we're informed two hours prior, which means the supplementary amendments to what is already a massive set of amendments will be presented this afternoon, not this morning, since they had just been presented at 10 o'clock.
The Chair: The standing order refers to submitting amendments two hours before the committee sits "when time permits."
Mr Pouliot: I understand that.
The Chair: We have just re-empowered a subcommittee to deal with these matters. And, Mr Phillips, no, that's not the way we want to operate things. We want to have the subcommittee set those procedures.
Mr Pouliot: Supplementary on the same point of order: You are intent on having all this process terminated by the end of today, right?
The Chair: I don't have an order to take this bill back to the House at any specific time. I would like to get through this bill. I think it's very important. I think the people of Ontario want us to get through this bill as expediently as we can do it.
Mr Pouliot: I might as well make this matter clear. Please bear with me; I don't wish to prolong this. This is a mess of biblical proportions. There is no question about it. As I just breezed through some of the agenda, it's obvious that this thing is ill-fated; the government does not know where it is going. The bill is also meshed. It does not work in isolation. It is webbed with other bills that are coming down the track, so unless we have some clarification, it will be very, very difficult for Ontarians to put this to work at the implementation stage after this receives third reading and then royal assent, and I'm concerned on behalf of Ontarians.
I know the way the exercise goes around here and that you're about to shove this down people's throats, having chosen not to listen to the dozens of presenters with all the sincerity at their command say to you, "Put the brakes on."
We'll be listening intently to your amendments, but we have no illusions here. We know that the fix is in and the people shall bear the brunt of it. We're not here to fully cooperate on this. We think this is too fast. We think you should put the brakes on, withdraw the bill, and come back with a final draft version in the fall session.
Mr Phillips: I would just say I honestly don't think the government has had the time to think the bill through. I think it's going to cause some real trouble out there. But at the same time, it will be even more trouble if the bill is delayed because we've heard from municipal leaders, the financial people and everybody else that this thing can barely get in under the wire with all good luck.
Frankly, I don't want our party to be seen to be holding it up. We've got real concerns about it and we've expressed those concerns, but in the end I don't want time to be blamed for fundamental flaws in the bill. We're prepared to live with the agreement that I thought the committee reached to deal with this. We will obviously be expressing our concerns on the bill, but the government will not be in a position to say, "Well, it was because the Liberal Party held up the bill." We have cooperated every step of the way on this bill, on the timing that the government wanted, and we will continue to do that, having expressed, as I say, significant concerns about the implementation of it.
Ms Isabel Bassett (St Andrew-St Patrick): First of all, thank you for your comments and your cooperation in that regard. I just wanted to remind everybody that it is our hope that we will finish this day so we can do the job as well as possible in the given time. We do have a House leaders' agreement, I understand, to try and finish today if we can so that we can move forward on this matter.
Mr Pouliot: Again, please accept my apologies. The House leaders' agreement dates back to Bill 103, and I understand that we had also a tentative agreement -- in fact, a firm agreement -- on Bill 104. But the government of the day chose to change the rules and to straitjacket the opposition so the many, many amendments that we had on Bill 104 -- and they were all most valid amendments indeed to make the legislation better. The government changed the rules on us, so therefore I would see a jeopardy in terms of the overall agreement with the House leaders and it does not, therefore, have the same weight or the same significance at this time.
I can assure you that we, the third party, entered the negotiations vis-à-vis agreement on schedule candidly and with all good faith, but it became obvious that the intent and the tone was to drive the agenda of the government through, and we see it as an affront to democracy. So I'm not too, too sure where the agreement stands now among the House leaders because we feel that we've been straitjacketed and it was not the image of honesty, if you wish, in terms of negotiating.
Ms Bassett: That wasn't held out as any kind of threat. It was just an agreement that's there. I'm sorry, naturally, about your feelings. We'll have to proceed, I presume, and hope that you will overcome them.
Mr Pouliot: It'll take some time to heal. More important, it's the kind of legislation that reflects the very agenda of this government. When on the very day, we're presented with some 40 items to be amended, it does not convey confidence. Many of them are dealing with the dates, and if you intend to push them through, we will be asking for some brief explanation as to how they go to the heart of the bill, what remains the same and what changes. Those are fair questions that your committee should be able to entertain. A lot of them seem to be similar, but they push the dates back. This is in accordance with what we, as the third party, had intended to say: "Put the brakes on, you're going too fast." What about implementation vis-à-vis levies? What about the interim levy? What about agreements that are not covered under force majeure, at the mall etc where there will be some dislocation? What about access to the slush fund?" We hope to find them in your agreement.
I will say no more. I'm here to listen and to cooperate.
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The Chair: We'll move on to clause-by-clause review of the bill. I will ask the clerk to identify the replacement motions when we get to the appropriate section so you can match up the replacement motions you have with the amendments already distributed.
Mr Phillips: Can I just ask one question? I'm sorry, Mr Chair. The Minister of Finance has indicated that the bill now permits different tax rates for small commercial properties. The original bill didn't, and I can't find the amendment that permits that. Can you just tell me which amendment permits that?
Mr Gerald Sholtack: It's not in this bill. The proposal will be contained in a subsequent bill that will authorize municipalities to establish multi-tiered tax rates for commercial property. It's not before this committee at this time.
Mr Phillips: So this bill right now only permits one tax rate on commercial property?
Mr Sholtack: It only refers to the prescription of one commercial class and the authority in the bill is for the municipality to establish one tax rate for that class.
The Chair: Could you please identify yourself for the record?
Mr Sholtack: My name is Gerry Sholtack. I'm senior counsel at the Ministry of Finance.
The Chair: With regard to subsection 1(1), are there any questions, comments or amendments?
Mr Phillips: Sorry, I'm just getting myself going.
The Chair: Shall the section carry?
Mr Phillips: Just so I'm clear on this, we're dealing with the Assessment Act amendments, correct?
The Chair: That's correct.
Mr Phillips: Are we dealing with current value?
The Chair: We're dealing with subsection 1(1). Shall the subsection carry? All those in favour? Carried.
Subsection (2), any amendments, questions or comments? Carried?
Mr Pouliot: We do have an amendment for subsection (2), I think.
The Chair: I have one for subsection (3), not for (2) at this time.
Shall subsection (2) carry? Carried.
Any comments, questions or amendments to subsection 1(3)?
Mr Phillips: There is an amendment here.
The Chair: Yes. Mr Pouliot. It's marked on your package as amendment 1.
Mr Pouliot: This came from public accounts. We'll have to stand it down.
The Chair: Do we have unanimous consent to stand down subsection 1(3)?
Mr Phillips: Actually, we had a very similar motion somewhere else in the bill, but it is to do exactly the same thing. I don't know whether Mr Pouliot is ready to debate this now, but it's a fairly important matter.
The Chair: We'll proceed with the NDP motion right now, please.
Mr Pouliot: I move that the definition of "current value" in section 1 of the Assessment Act, as set out in subsection 1(3) of the bill, be struck out and the following substituted:
"`current value' means, in relation to land, the value of the land based only on the current use of the land and not other uses to which the land could be put."
The Chair: Mr Pouliot has moved the motion which is number 1 on subsection 1(3). Can I have the agreement of the committee that I should not re-read the entire amendment? Is that agreeable? Thank you. Debate?
Mr Pouliot: Briefly put, this amendment changes the definition of the term "current value" so that it captures the notion of current use. This amendment would change the assessment reform contained in the bill so that it more closely approximates actual value assessment and would make it more fair. The bill, as written, would allow for all property in areas with high market values to be assessed similarly. The Crombie panel recommended that property assessment reform be based on "current value" and "current use" to avoid market-determined swings and speculative value. The bill allows municipalities to pass bylaws in order to use current use in determining value, but this amendment changes the entire bill by changing the definition and will make the assessment uniform for the province.
The Chair: Comments or questions?
Mr Phillips: Just to agree, actually, with this motion. We have one very similar to it later in the debate. The government's Who Does What panel studied this matter, and in their communication on August 20 they supported the amendment, as opposed to what's currently in the bill.
As we've talked to municipal leaders around the province, they are quite worried, as the bill currently stands, that, for example, some small businesses will have real difficulty because they may be operating in a facility which currently has one use, but if it were to be put on the market, would have perhaps a substantially higher use, but they will be valued at what it would sell for on the market, not what it's current value is, current value in terms of the business.
I think I would prefer to go with the NDP motion, and ours later, and agree with the Crombie panel.
Ms Bassett: I would just say that the whole basis of our system of actual value is current value, so obviously we can't support your amendment.
Mr Pouliot: We've been through this before, and at the risk of sounding repetitious -- well, start from the premise of intent and spirit: What do you mean to accomplish? You put it on paper. No one has been able to establish any substantial difference between current value, market value, actual value. Everything I buy is market value. They all mean the same. Even a DNA expert, even a legislative forensic expert, even counsel would be hard-pressed. We know that the fix is in here.
This is to get off the hook for some promises, some documents that were circulated during the last election. Nobody believes you out there, and what we're trying to do is to say, "Let's be fair about this." With respect, what we get as an answer is the kind of convenience or a feeble attempt at justifying what is essentially a repetition. It means exactly the same. In your dictionary of synonyms you would be hard-pressed to find any difference: current value would become market value; market value would become actual value. It's all the same.
Ms Bassett: If I could just add one last comment, I want to point out that at the committee hearings numerous presenters before the committee stated that value-based assessment is in their view the fairest and most equitable system available. The majority of municipalities have already been reassessed at least once during value-based assessment and have readily accepted it, so your view that nobody supports it is not right.
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Mr Pouliot: I see. So if I list a property at market value somebody will say, "Market value is not current value." Thank you very kindly.
Mr Phillips: Actually, we're almost talking about two different things here. No one is disputing the move to a market, current value system; it's just, what are your criteria for that? It's almost like we've got the wrong briefing note or something like that.
What the motion does is what Mr Crombie says, and that is to use a value system but to use value on the basis of its current use, not on the basis of what its possible use would be if it's put on the market. As I say, it's almost like we don't have the right briefing note in response to the question, but I've learned from experience that you eventually take a vote and you win, we lose.
The Chair: Shall the amendment carry? All those in favour? All those opposed? The amendment's defeated.
Shall subsection (3) carry? All those in favour? Carried.
I have no amendments for subsections (4), (5) or (6). Shall those subsections carry? Carried.
Shall section 1 carry? Carried.
We're on part I, subsection 2(1). Are there are any amendments, comments or questions? Shall the subsection carry? Carried.
On subsection 2(2), we have a government motion. It will now be number 2A, on the white pages that were distributed. I believe it will be the top page. It refers to subsection 2(2), so we'll call that motion 2A. Ms Bassett.
Ms Bassett: Did you say we don't have to read it?
The Chair: Yes, you have to read it, please. It's just that under ordinary circumstances formality is that I would then re-read it. It's not really necessary, and the committee agreed.
Ms Bassett: I move that subsection 2(2) of the bill be amended by adding the following as clauses to be added to subsection 2(2) of the Assessment Act:
"(d.1) providing for a procedure to determine whether land is conservation land for the purposes of paragraph 25 of section 3 and, without limiting the generality of the foregoing, the regulations may,
"(i) provide for the determination of any matter to be made by a person or body identified in the regulations,
"(ii) provide for a process of appealing such determinations,
"(iii) adopt documents by reference as those documents are amended from time to time, including amendments made after the regulation was made;
"(d.2) providing for a procedure to determine whether land is in the farmlands and managed forests property class and, without limiting the generality of the foregoing, the regulations may,
"(i) provide for the determination of any matter to be made by a person or body identified in the regulations;
"(ii) provide for a process of appealing such determinations;
"(d.3) providing for different procedures than the procedures provided in sections 39.1 and 40 for resolving issues as to whether land is in the farmlands and managed forests property class or whether land is conservation land for the purposes of paragraph 25 of section 3 and, without limiting the generality of the foregoing, the regulations may,
"(i) provide for the functions of the assessment commissioner or an assessor under section 39.1 to be carried out by a person or body identified in the regulations,
"(ii) provide for the functions of the Assessment Review Board under sections 39.1 and 40 to be carried out by a body or official identified in the regulations;
"(d.4) for the purposes of regulations made under clause (d.3),
"(i) varying the application of section 39.1 or 40 or any other provisions of this act,
"(ii) prescribing provisions to operate in place of section 39.1 or 40 or any other provisions of this act,
"(iii) prescribing provisions to operate in addition to section 39.1 or 40 or any other provisions of this act;"
The Chair: Did you want to explain or comment on the meaning of the amendment?
Ms Bassett: I can explain. This simply provides authority for the minister to prescribe procedures for determining land to be classified as farm land and managed forest, for land to be exempt as conservation land, and for appealing such determinations.
The Chair: Any comments or questions? Shall the amendment carry? All those in favour? Amendment 2A is carried.
Shall subsection 2(3) carry?
Mr Phillips: I don't mean to embarrass myself here, but give me a hint of exactly where we are in the bill.
The Chair: They are hard to read, actually, because the numbers don't stand out, but it says at the top, "4, 5, 6," and then you see "section 2." It's the one that's not in brackets. You go down there. We just carried an amendment to subsection (2), which is the "2" in brackets. We are now below that, at the "3" in brackets, which is subsection (3). I have no proposed amendments to subsection (3).
Mr Phillips: Okay.
The Chair: Okay, shall it carry? Carried.
Now we have a government amendment, which is for a proposed new subsection (3.1).
Ms Bassett: That's right. Since it's hard to find, it comes right after (3).
The Chair: That's right. That's where it would go.
Ms Bassett: I move that section 2 of the bill be amended by adding the following subsection:
"(3.1) Section 2 of the act, as amended by the Statutes of Ontario, 1994, chapter 36, section 1, is amended by adding the following subsection:
"Municipal option classes
"(3.1) A regulation prescribing classes of real property may require, for land in a municipality to be in a class, that the municipality opt to have the class apply within the municipality and the regulation may govern how the municipality opts to have the class apply or cease to apply. In this subsection, `municipality' means a municipality, including a county, a regional or district municipality or the county of Oxford, the council of which is required under section 363 of the Municipal Act to determine tax ratios."
Briefly, this simply means that the minister may prescribe new classes of property that municipalities may opt to use.
Mr Pouliot: When we talked about classes, would I be right in saying that the devil will be in the regulation, in the detail, that the minister will decide what a municipality can do in terms of its options, so if it wishes to voice more classes or different classes, this will be determined by the minister?
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Ms Bassett: No. As the bill states, there are six classes of property now that are determined, but the minister may opt to prescribe new classes, and then the municipalities can opt or not opt to prescribe those classes.
Mr Pouliot: There are no changes with the present situation? The number and the state of classes will stay the same?
Ms Bassett: Of the ones that the municipalities must adopt, yes.
Mr Pouliot: And we're only talking here in terms of additional classes?
Ms Bassett: Yes, we are, that are optional.
Mr Phillips: What would be some examples of these? What's the government got in mind here?
Ms Bassett: The new multiresidential class would be one.
Mr Phillips: But don't we already have that in the bill? We have the multiresidential property class. You're thinking of another multiresidential property class?
Ms Bassett: Marion will answer.
Ms Marion Crane: I'm Marion Crane, from the Ministry of Finance. If the minister prescribed, for example, a new multi-res class, then the municipality could adopt that class if it chose to use that class. That new multi-res class would have a different definition than the multiresidential class has now. It could have different parameters in terms of what a new multi-res class is.
Mr Phillips: So you might have two classes of multiresidential property class?
Ms Crane: You'd have one multiresidential class that would be province-wide. If the minister prescribed this new multiresidential class, it would be a class which municipalities could opt to use but they wouldn't have to use if they didn't want to.
Mr Phillips: For example, he could opt to have a new class called "hotels/motels"? That's possible, right?
Ms Crane: In that particular example, those things would be included in one of the classes already there.
Mr Phillips: Say that again?
Ms Crane: The minister could prescribe a new class, yes, and the municipality could adopt that class if it wished to do so.
Mr Phillips: So hotel/motel is another example of what could be permitted with this amendment?
Ms Crane: It's not precluded, if that were to happen.
Mr Phillips: That's the purpose of this amendment?
Ms Crane: The purpose of this amendment is to allow something like a new multiresidential class.
Mr Phillips: Or hotel/motel.
Ms Crane: It would be a new class that the minister would prescribe, that the municipality could opt to use.
Mr Phillips: And that amendment would provide the option to do that.
Mr Almos Tassonyi: Mr Chair, I'm Almos Tassonyi. I'm a senior economist with the municipal finance branch.
Just to clarify Mr Phillips's question, the real purpose of this is to create a power whereby municipalities can put forward a request for a new class and it may be enabled by regulation.
In most cases, the properties in the new class would have previously been in one of the standard classes, but will have been taken out of that by definition in the regulation. The intent is to allow a different set of tax ratios and rates to then apply to the new class.
Mr Phillips: I'm trying to get an idea of why we're doing this. I hear another multi-res, which I can't quite figure out, because they're one of the six existing classes.
Ms Bassett: I think the intention is that we have flexibility, that if municipalities were to want something -- I know you want to think we have X and this would apply to X and Y, but that boxes us into something that isn't there. The idea is to allow some flexibility if municipalities were to see a need that didn't fit into the six classes that were already there. This would, without having new legislation, allow us to accommodate their desires, more or less, because they could then opt into something that was prescribed, in effect.
Mr Phillips: I understand. I remember the hotel and motel people made quite a strong pitch to not do this. I just want to be sure that I know you are planning to do this, just so they don't get mad at me.
Mr Pouliot: I share the concern of my colleague Mr Phillips in terms of not having the motel and hotel association get too upset at us. This would simply be the last straw. It would be devastating.
Let me go back to the heart of this matter. It's established that on account of the changes to the BOT, the business occupancy tax, 10% or more of revenue will have to be found elsewhere. It will be lost.
Does this give municipal government the authority to tax, for instance, churches, places of worship, adjacent parking lots, or to go back to the bank tower, the people who stand to benefit the most, and say: "What you've saved on the dollars per square foot, the municipality will establish another tax, another levy so it can take its money back"?
Ms Bassett: I'm going to let Gerry answer this.
Mr Sholtack: No, this is merely to allow optional classes to be created. It has nothing to do with exemptions or any other forms of taxation that aren't permitted now. An example of the new multi-res class was tabled with the draft regulations that were tabled at the beginning of the session. Section 8 of that draft reg talked about the new multi-res class.
The reason we're doing this amendment is to ensure that there's no question the minister has the authority to enact a new class, that the municipality has the option to adopt or not adopt. If the municipality doesn't want to adopt this new class, it doesn't have to, and it will continue to tax this property as part of the regular multi-res class.
Mr Pouliot: So at the moment you cannot say this. I can appreciate the high ethics and the protocol that you bring forward, but I attract another matter of humanity. So let me do this job, sir, and you can respond.
The minister does not wish to take the hit here. This is buck-passing. The municipalities had six well-defined areas of jurisdiction. They also have, by way of your amendment, an opportunity to establish supplementary options to raise revenue. We know by all accounts that the majority will take a hit. This is not revenue-neutral. What is yet to be verified are the other bills that are connected, webbed, meshed. Until we know their costs, it will be very difficult to ascertain, to determine what this will do in the real world.
We're asking, is this open-ended? Would the municipalities, upon request, by petitioning to the government, merely be informing them of their intent to go and raise the levy?
Mr Sholtack: Maybe I could clarify that. The minister has the discretion to make classes or not. This is not to be done in response to a municipality's request, necessarily. The government's intention is to provide that option in the case of the new multi-res class. It is provincial policy that will be implemented. It will permit municipalities to essentially tax these new buildings at less than what they tax the current multi-res buildings. It is intended as an encouragement to new construction. That's the example that we need the authority to implement. That's the basis on which we're seeking this amendment.
Mr Pouliot: By way of concluding comments, say I have a more humble, small existing building. I find that under another bill, Bill 98, I now pay development charges for the new one, plus they get a tax break. Am I going to be upset at the Tories.
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The Chair: Any further comments or questions? Shall the amendment carry? Carried.
From subsection 2(4) to (8), I have no proposed amendments. Shall these subsections carry? Carried.
Shall section 2, as amended, carry? Carried.
I have no proposed amendments for sections 3 to 8. Shall those sections carry? Carried.
Section 9: I have a government motion, one of the replacement motions, marked 4A. You'll see at the top that it refers to subsection 9(3) of the bill. What we'll do is deal with the proposed amendment first and then deal with the whole section.
Ms Bassett: I move that subsection 14(5) of the Assessment Act, as set out in subsection 9(3) of the bill, be amended by striking out "If a property is in two or more classes of real property" at the beginning and substituting "If portions of a property are in different classes of real property."
The Chair: Would you like to clarify this section?
Ms Bassett: Simply that the words "more classes of real property" really was before "or." We're changing the "or" to "of." It's a typo.
The Chair: Comments or questions? Shall the amendment carry? Carried.
I have no further amendments to section 9. Shall the section, as amended, carry. Carried.
I have no proposed amendments on sections 10 and 11. Shall those sections carry? Carried.
Section 12: There are a number of amendments. We'll start with the government amendment, replacement amendment 5A.
Ms Bassett: I move that subsection 19(5) of the Assessment Act, as set out in section 12 of the bill, be struck out and the following substituted:
"Farm lands and buildings
"(5) For the purposes of determining the current value of farm lands used only for farm purposes by the owner thereof or used only for farm purposes by a tenant of such an owner and buildings thereon used solely for farm purposes, including the residence of the owner or tenant and of the owner's or tenant's employees and their families or other buildings prescribed by the minister on the farm lands, consideration shall be given to the current value of the lands and buildings for farming purposes only, and in determining the current value, consideration shall not be given to sales of lands and buildings to persons whose principal occupation is other than farming."
The reason for the amendment is simply that it permits the minister to prescribe other buildings on farm property in order to value the underlying land at farm land values.
Mr Pouliot: I find it passing strange, bizarre, that you would enter a fairly risky field of determining. Who the heck are you, the government, to determine whether it's a citizen's main occupation, principal occupation, part-time, full-time? This is not part of the bill. You can be many things at one time. If you're guided by the tax policies and then you are determined, you go a step beyond. I would ask counsel, with respect, to at least issue a caution. We'll beat a path to the Human Rights Commission etc. This goes beyond the levy jurisdiction, to make it conditional, to base your case on the premise that you are or are not full-time or this is not your main occupation. It's very difficult to decipher, and you open quite a can of worms here.
Mr Sholtack: Maybe I could assure the committee that this is not a new provision. This provision has been in the act for many decades. It's designed to permit farm lands to be assessed at a farmer-to-farmer basis; it's a current use rule, basically.
Mr Pouliot: I understand this, which brings us to my real question: Suppose -- and I need your help -- I have a farm which is in transition. The developers are flirting. I am being solicited, I am being flattered, I meet my best friend every 10 minutes etc. A smaller part of the farm is being farmed, but I still refer to myself as a full-time farmer. Which profession do I belong to?
Mr Sholtack: Your land, as long as it's being farmed, will be eligible for this special treatment, this lower-evaluation treatment. In fact, you don't even need to farm it yourself; you can have a tenant farm it.
Mr Pouliot: Yes, Mr Rollins is the expert at that.
Mr Joseph Cordiano (Lawrence): I just want a point of clarification. It's in the same vein with respect to the principal occupation and the difference that might result between a person and a corporation. How is that rectified with this amendment?
Mr Sholtack: The only change from what is in the bill now is the addition of the words, "or other buildings prescribed by the minister." Other than that, it's identical to what's in Bill 106 now, and it is the same as what is in the current Assessment Act as subsection 19(3). There are just some word changes because of the change to current value. The occupation really doesn't matter. What matters is whether the land is being farmed or not. The addition of "other buildings" permits other buildings that are on farms, that do processing or other kinds of activities, to tap the value of the lower rates for the land on which they sit. That's the only purpose of this amendment.
The Chair: Further comments or questions? Shall the amendment carry? Carried.
We are proceeding to amendment 6. It's a Liberal motion on section 12.
Mr Phillips: I move that subsections 19(2), (3) and, (4) of the Assessment Act, as set out in section 12 of the bill, be struck out and the following substituted:
"Current value based on current use
"(2) The current value of land shall be based only on the current use of the land and not other uses to which the land could be put."
I further move that subsection 19(5.2) of the Assessment Act, as set out in section 12 of the bill, be struck out.
That is very similar to the original NDP motion that we debated. Consequently, there may not be a need for a lot of debate, but it was to attempt to implement the government's Who Does What panel recommendation on how to value land -- land being, of course, property -- and to reflect the concern of a lot of businesses and perhaps some homeowners that they will be assessed on the basis not of the current use of their property but on how it might be put on the market and that will drive their assessment way up and probably force them out.
Ms Bassett: I'd like to point out that we have defined what "current value" means, and we feel that it's fair and equitable. The opposition may disagree, but that's our view of it, and we've already discussed that.
Mr Pouliot: We are reminded with a certain authority that we have the right to disagree. Why don't we take all our amendments and file them in the garbage can? This is not what is intended here.
We could simply vote against all the clauses and therefore make this motion irrelevant by way of being out of order. But when we don't have more to offer -- and I know our argument isn't the strongest on section 12. However, our sentiment is that if in doubt, we vote no. This is chaotic or has the risk of being chaotic. We sense a certain nervousness. You don't present us with a great deal of confidence. Everything is meshed, it's at the mercy; direct questions don't necessarily give us direct answers.
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We have our opinion, madame, with respect, and we'll take the hit one more time. But I want you to know that for every time we are reminded that we don't form a majority, we shall remind you, or certainly think it, that committees are not political, that this is not a political exercise. That's why we have committees, so that each and every one of us is not guided by an iron fist. No one is pointing the finger and saying, "You shall vote this way." When we say that we disagree, although the amendments have the sponsorship of their respective party, members are free to vote the way they wish.
You see, I am a member of the committee now. I am detached. Those amendments were scrutinized and prepared by our party, but once I'm here I can vote for or against. I am sure the other members would do the same thing. But it would appear that when you say "we," you involve your colleagues here and are saying that they don't have an independent mind. I have no doubt that you're right, but I only wish they knew their mandate better.
Ms Bassett: Thank you for pointing that out. I didn't mean to imply they don't have independent minds or that people don't have the opportunity to discuss.
The Chair: Further questions or comments? Shall the amendment carry? All those in favour? All those opposed? The amendment is defeated.
We will move to the same section, NDP amendment 7.
Mr Pouliot: It was identical.
The Chair: Pretty close; it looks close to me. You don't have to move it.
Mr Pouliot: Our amendment is actually out of order. We will withdraw.
The Chair: Withdrawn? Okay.
I have no further amendments to section 12. Shall section 12, as amended, carry? Carried.
Section 13: We will deal with the amendments first, NDP motion 9.
Mr Pouliot: I move that the table to subsection 19.2(1) of the Assessment Act, as set out in section 13 of the bill, be amended by striking out "1998, 1999" in the first column of the second row and by striking out "1996" in the second column of the second row and substituting "1997."
The Chair: Mr Pouliot, before we go to your clarification, I want to make sure that we have dealt with subsection 19.1. There are no proposed amendments for 19.1. Shall that carry? Carried.
Please go ahead and clarify your amendment.
Mr Pouliot: This and the following amendments significantly alter the time frame for implementation. The time frame suggested by these amendments is implementation for 2000. I did voice repeatedly to our parliamentary assistant, in terms of our concern vis-à-vis the implementation, that you were going too quickly and that you had overestimated the capacity of society to digest and assimilate all the changes that you're proposing.
This amendment is based on the many groups and individuals who appeared before committee urging the government to put the brakes on, to slow down. There are 3.8 million properties to be reassessed in preparation for assessment reform. My understanding is that it's due by the end of April of next year, 1998. The reform will create large shifts in tax burden across the province and it is expected that there will be some 900,000 appeals; chaotic indeed, a mess.
It is crucial that the government takes its time in preparing the tax rolls for implementation. The year 2000 is based on the recommendation from Stanley Hamilton of British Columbia; he's a professor of urban land and economics. You're quite fond of referring to the example of the province of British of Columbia when it serves a purpose -- and I'm not imputing motive. Yet when it serves another purpose, you conveniently disregard the example of British Columbia. If we're to quote an example, we'd like to see it whole, not just to pick and choose for political expediency.
What we feel is that you're going too fast; 3.8 million properties are about to be reassessed. Some of the assessors -- it will be like instant coffee -- are given as little as one day's training. They're poorly paid and they have to descend upon society and come up with a report. You already have in excess of 30,000 assessors and you're giving a bad name to the profession.
It's all going to be after the first interim tax levy. You'll have one final levy, which you're still not addressing. Imagine the mess. What we're trying to do is to help you, the government, do a better job. We're saying, do it but do it slowly. Change your timetable to give you a little more time and to deal with the dislocation, the vagrancy, that this kind of system is sure to bring.
There will be some severe discrepancies and if you have more time you'll best be able to deal with them, and therefore the acceptance of changes -- because we are not opposed to change -- will be more to your liking, certainly easier to digest.
Ms Bassett: I would reply to M. Pouliot that we feel there is not a need to delay, because the legislative and administrative processes are on schedule. I'd like to point out that municipalities in 29 of the 39 regions and counties have been recently reassessed and 47% of the province's 3.8 million properties to which you refer are valued on their 1988 or 1992 values, so they're more current. The reassessment is on schedule to finalize assessment updates by the end of December of this year. We feel there is no need for delay, but we do hear you.
Mr Phillips: The problem we have with the amendment is that we've got, as you know, some real concerns about the implementation of the bill and what not. At the same time, there are many who will benefit from the bill, so we are reluctant to slow the timetable down. We would much rather the government fix the bill than slow the timetable down. We'll have difficulty in amendments that would result in this thing being implemented more slowly. We would much prefer to see it done on this timetable, but properly. So, there we are.
Mr Pouliot: I hear on the one hand the confidence of ignorance, not knowing what lies ahead. It's nice to be candid, and yet on the other hand, I hear, "Don't call Kevorkian, government, you can do it all yourself." I mean, "Please push, we'll help you off the cliff; après toi, Alphonse." The minute the rubber hits the road, you've got so much on your plate that you will do so, and you're doing so at your own peril. But you are so confident, you know, the typical members of the First Brigade. They speak very highly of the First Brigade, but it so happens that they're all dead. We're trying to say, "Put the brakes on; in there you shall find an equilibrium." We want to wish you well. You don't perhaps fully believe that we're here only to help, that we don't have any ulterior motives, and the fact that you stole my job from me has nothing to do with our help.
The Chair: All those in favour of the NDP motion? All those opposed? The motion is defeated.
We're still on section 13, subsection 19.2(2). Motion 9 is an NDP motion.
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Mr Pouliot: In the same spirit, I move that subsection 19.2(2) of the Assessment Act, as set out in section 13 of the bill, be amended by striking out "1999" in the first line and substituting "2000."
It's in the same vein as the argument addressed to the two sections.
The Chair: Any comments or questions? All those in favour of the NDP motion? All those opposed? It's defeated.
Shall section 13 carry? Carried.
I have no proposed amendments on sections 14 to 21.
Mr Monte Kwinter (Wilson Heights): Could I have a question? I know that in subsection 1(3) there is a definition of current value: "means, in relation to land, the amount of money the fee simple, if unencumbered, would realize if sold at arm's length by a willing seller to a willing buyer." As a person who has been a real estate broker for many years, that is my definition of market value. I'm just curious to know. Subsection 20(2) under section 14 and subsection 24(1) under section 15 substitute "current value" for "market value," and I apologize I wasn't here for the earlier discussion. Has there been a definition of the difference between the two?
The Chair: I'd like to refer to the parliamentary assistant, please.
Ms Bassett: We have defined current value in the act and we can just read out how it's defined.
Mr Kwinter: I just read that. At our committee hearings, and I think even in the House, there have been indications that current value is different from market value, and I just want to know where that difference has been defined.
Ms Bassett: Where it is defined, is your question?
Mr Kwinter: Yes.
Mr Sholtack: If I could address that, the purpose of this is to reflect what the property could sell for. Market value could include highest and best use and so potential value, and the definition of current value is intended to preclude any speculative value that might be part of the value.
Current value is what you could realize your property for, if unencumbered, as of the valuation date, which for 1998 through to 2000 would be June 30, 1996. So it is what your property would realize in reality rather than with any speculative possibility that market value might impart. In our view, there is a distinction between those two concepts.
Mr Kwinter: Are you then saying that there are three classifications of value? There's actual use value, market value and current value?
Mr Sholtack: Yes, current use and current value are different concepts.
Mr Kwinter: Yes, but you're also saying that current value and market value are different concepts as well.
Mr Sholtack: Yes, we feel there is a difference between current value and market value.
Mr Cordiano: Based on what?
Mr Sholtack: Based on the definitions. The market value could be higher than current value, because current value is what the property can actually realize on the market.
Mr Kwinter: I would challenge that, I really would. Market value is what the property would realize on the market, and that is exactly the definition you've given for current value. I would suggest to you, without being partisan in any way, you're playing with words just to get away from market value, which seems to have a negative connotation, and you're going to current value. As I say, I would challenge you to get anybody who is objective to tell me that there's a difference between market value and current value.
Mr Cordiano: Where's the evidence?
Mr Kwinter: I'd welcome some sort of authority that gives that definition. It seems to me that we really are playing with words. I have no problem with you doing it as long as you acknowledge that is the case, but I do have a problem if I have to go out and defend that, no, there is a market value and then there is a current value.
Mr Pouliot: I need your help to guide me through this exercise. A friend of mine owns a small house in Toronto and he called the brokers one day, on the Monday. The price hadn't changed from Monday, Tuesday and Wednesday. He said, "What is the current value of my house that I'm trying to sell?" He got one price. The next day he called and he said, "What is the market value of the house that I'm trying to sell?" He got the same price. Then he called and he said, "What is the actual value of the house that I'm trying to sell?"
Mr Kwinter is absolutely right. Let's not play games. We know the background of this. Either you tell someone that current value is what it's worth today -- if you look at Webster's or Oxford, they'll tell you. Market value is what the market will bear, so it's the same. Your current value is what the market will bear today. Actual value means what it is actually worth. We're not children here.
If I ask any real estate professional, "What is the difference between the three?" they'd say, "Gilles, you're talking about the same thing," in this context, and they're absolutely right. Current value is what it's worth today; market value is what the market will bear, therefore it is current; and actual value reflects the other two synonyms.
This is very thinly veiled. This is trying to really put one across, and I want to wish you well. But when all is said and done, what is it? We know what it is and we'll let it be. But trying to go to the general public and to try to decipher -- nobody has come up with a good explanation. They've come up with a little feeble attempt that if you look under the cover of darkness, there is one little element here that's different to give legitimacy to the bill. But once you reach the street, everybody out there knows that there is no difference between the three.
Ms Bassett: I would just add that one of the ways that it is different is the way it's implemented. This is quite a difference.
Mr Cordiano: I just wonder how you plan to deal with the endless numbers of appeals that will be made trying to establish the difference between current and market value, because I can tell you, you're going to be subject to those appeals. This will come before the courts at some point, so the definition must be very clear, and it isn't to all those who have observed this and are interested in it. I'm sure there are endless numbers of people out there waiting for the same answer to this question: What is it?
Ms Bassett: We already have, as you know, a large number of appeals under the current system.
Mr Cordiano: You'll have even more after this.
Ms Bassett: Current value we define -- and that will be the way the appeal system judges things as well: under the definition of current value.
Mr Cordiano: I still don't understand the difference. Perhaps we weren't apprised of it. I wasn't here for the other hearings that took place.
Ms Bassett: As M. Pouliot did point out, we could argue this endlessly, because there are different views.
Mr Cordiano: Given that it's such a flimsy definition that you're offering, you will get endless argument, and that's the point we're trying to make.
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Mr Kwinter: Just so there's no misunderstanding, I really have no problem with your using whatever term you want. If you want to use the term "current value," that's fine. Where I do have a problem is the implication that there is a whole other category of "market value." As a real estate professional, I can tell you that it's going to set off a chain reaction where people are going to say, "You mean to say there are other ways of valuing property and there is a difference between current value and market value?" That is my concern.
As I say, whether you use market value or current value, I have no problem with that at all. I do have a problem that on the record now there is a statement by officials of the ministry that says there is a difference. I say to you, that is going to set alarm bells running throughout the industry, to say: "There is a difference? What is that difference and how do we define it?" That is my concern. So far this bill does not in any way designate what the difference is. What I'm saying is that there are repercussions way outside this bill, because we've now had another classification injected into the real estate jargon. That is the problem. All I'm saying is that you're creating some problems outside this bill that should be addressed.
Ms Bassett: I would just read our definition one more time, because that's what they will be using: "`current value' means, in relation to land, the amount of money the fee simple, if unencumbered, would realize if sold at arm's length by a willing seller to a willing buyer."
Mr Kwinter: If I may, just one last thing. Until I got into government I taught a real estate course. I can tell you, that definition is the absolute verbatim definition for "market value" -- absolutely, without a change of word. When I taught my students, "This is what market value is," that was the definition. This is the concern I have, again nothing to do particularly with the bill. You are now saying to real estate professionals, "Just wait a minute, there's another definition," and that's market value. What is that definition? If you say, "I've read it to you," it's the same thing as current value. As long as we acknowledge that, I don't really care whether the bill says "current" or "market," as long as there's an acknowledgement that there aren't two separate kinds of evaluations.
The Chair: Are there any further concerns on a new topic? Shall sections 14 through 21 carry? Carried.
We are on section 22, government motion 10.
Ms Bassett: I move that section 22 of the bill be struck out and the following substituted:
"22(1) Clauses 34(b) and (c) of the act are repealed and the following substituted:
"(b) land or a portion of land ceases,
"(i) to be exempt from taxation,
"(ii) to be farm lands the current value of which is determined in accordance with subsection 19(5),
"(iii) to be conservation land or managed forests land the current value of which is based on current use under subsection 19(5.2), or
"(iv) to be land the current value of which is based on current use under regulations made under subsection 19(2);
"(2) Section 34 of the act is amended by adding the following subsection:
"Supplementary classification
"(2) If, after the October 31 preceding the taxation year and before the beginning of the taxation year, anything occurs that would change the class of real property a parcel of land is in, the assessor shall change the classification accordingly and the clerk of the municipality, upon notification of that change, shall enter it on the collector's roll and the tax levied for the taxation year shall be determined in accordance with the new classification."
This clarifies that where land ceases to be farm land, managed forests or conservation land, it will be valued on its current value rather than its current use, and it clarifies that where the classification of the land changes between October 31 and December 31, the assessor must alter the collector's rule to reflect that change. So it's an updating of records in this second part.
Mr Phillips: Can you just give us an example in real terms of what the implication of this is? What would be an example where something ceased to be a farm land where this would apply?
Ms Bassett: Gerry, I'll turn to you.
Mr Sholtack: This refers to class 6 land. People will have to qualify to be included in the special farm lands class, and where they cease to be so eligible, they will lose that special tax treatment. As well, their land will be revalued on its current value rather than on its current use basis. This provision allows the assessor to recognize that through a supplementary assessment. Where the land ceases to be farmed is an example; if it's being redeveloped.
Mr Phillips: I recall that the mayor of Brampton, I think, was in to see us and expressed some significant concerns around what this might do to the carrying costs for land. Does this help the mayor of Brampton or does it make him more angry or what?
Mr Pouliot: He's not running again.
Mr Phillips: You don't know the mayor.
Ms Bassett: I can't comment on whether it helps or hurts the mayor of Brampton.
Mr Phillips: No, his concerns. You were there, and he said he worries that if land is either farm land or immediately is assessed at its development value, the taxes on it will become so prohibitive that housing will be unaffordable. I think that's what he was saying to us. Does this have any impact on that or not?
Mr Sholtack: It won't change the current treatment as long as the farm land is being used and qualifies for the farm land treatment. This only deals with a situation where development starts, where the land is no longer being farmed.
Another example is managed forests, which is the other part of class 6. If the forest is no longer a managed forest and so eligible for special treatment, it will be revalued.
Mr Pouliot: I know the government is very, very sensitive to the inquiries coming from area code 905.
When it comes to managed forests, we're looking at a definition of, what is it, four acres?
Mr Sholtack: A minimum of four, yes. I'm sorry: It's 10 acres; four hectares.
Mr Pouliot: Thank you. That makes a big difference.
I'm privileged to live in northwestern Ontario, where even people of moderate means like myself can possibly have access to a 10-acre property, because we measure things on a bit of a different scale and land is not as expensive, and we are cognizant first hand of good forest management. How would I qualify? You've mentioned, in terms of that, that I would have to be a full-time farmer, my main occupation. Would I have to be a full-time forester? You see, being of moderate means, I want to enact the savings on my taxes. I feel that I'm paying very, very high taxes, and the way this government is spending it, I'm not getting full value for money, so I want to minimize my taxes. Therefore, rather than buying eight acres, I buy 10 acres, because an acre doesn't mean all that much.
Mr Sholtack: The rules for determining what are eligible managed forests will be issued shortly. The ministry is finalizing them. But essentially they will set up a process which is similar to the rebate program that is now operated by the Ministry of Natural Resources. It'll be the same sort of idea. You'll have to qualify and have a management plan in place to maintain the managed forest.
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Mr Pouliot: Exactly that. With your help, we'll continue briefly. You drew the valid parallel, the analogy of the farm rebate, that it's closely tied with its cousin, the forestry rebate. So the municipalities will lose money, but what I gain with my 10 acres will I not lose on the house?
Mr Sholtack: This will only apply to the forested land.
Mr Pouliot: Yes, but you see, the province does not make up the difference. The municipality is lean and mean. They cannot enact the savings by streamlining, by being more efficient. They've already done that. They've been doing that for five years. Now that they're not getting the money from my 10 acres, nor from my farm, what's going to happen to my property taxes? They've got one clerk-administrator, a receptionist and two Harry Smiths who drive the grader. Who's going to pay them? I guess I'll get hit on the house. It's of no benefit to me because even if it were revenue-neutral, there are no gains.
Mr Joseph Spina (Brampton North): With regard to the references made to the mayor of Brampton and his concerns, I can't speak for the mayor of Brampton because nobody speaks for him, but I can speak on behalf of my constituents since I do represent that area. We have 18 active farms, and in addition to that there is a substantial amount of farm land that has been bought by developers. Mr Hooshley, the gentleman who was here with Mayor Robertson, is the main individual associated with that development project.
This amendment would help us, and I know my constituents would be satisfied with this, in fact pleased, because a substantial amount of that development land will be undergoing the crossover at some point and they certainly would like the ability to protect that land as agricultural provided it is being farmed, and it would remain that way until such time as -- the definition says until the land is scarred for development. Speaking on behalf of my constituents, that would be our position.
Mr Phillips: Just so I'm clear, right in the middle of the area I live in there's some land ready for apartments but every year they put a little wheat on it. That would remain as farm land, I gather.
Mr Spina: No, I think there are some fairly strict definitions with regard to being cultivated. Obviously, throwing a bush on it doesn't classify it as farm land. Counsel would be the one to better clarify that definition, but I think you have to use a little common sense on that. If they're getting away with it, that's a problem.
Ms Bassett: I just want to pick up on what Mr Pouliot said and his concerns that the municipalities may suffer from the loss of additional revenue. In the hearings, you probably heard that the province has set up a permanent $1-billion annual community reinvestment fund to ensure that the shift in responsibilities is fair and that the rural municipalities are not disadvantaged. That should allow them to --
Mr Pouliot: My understanding of the contingency fund --
Ms Bassett: It's a reinvestment fund.
Mr Pouliot: I mean the reinvestment fund; hereinafter called the fund. You're trying to have me swallow that market value assessment was to identify and price the new areas of jurisdiction, responsibilities, starting January 1 -- we refer to it as the downloading -- not to address the discrepancies by way of 106, not the difference in levy, not the difference in assessment and reassessment.
That's not where that $1-billion fund is. The $1-billion fund is for a place like Manitouwadge having to pay for the OPP, or a place like Schreiber where there is a more disproportionate number of senior people. That's what the fund is for. I'm not aware of a $1-billion fund any other place. It's too large an amount. There's nothing in place there to make those transitions. Well, if there is, there will have to be, especially those who depend more than 40% on the farm. We interviewed, and you were there. Some farming communities have 50% -- in fact in one case, over 90% of revenues came from the farm.
Ms Bassett: We did, and your concern is very valid, Mr Pouliot. But you probably have forgotten that there is a fund -- because we are aware of those concerns as well -- that will make up the difference. Obviously, you can't leave municipalities hanging out there if they lose some of the revenue. They have to pay for it, and they're used to collecting more taxes. So there is the $1-billion annual fund that will help.
Mr Pouliot: There again, that point is well taken, and suffice it would mean there is a fund, but if we tax $1 billion, where will you take the $1 billion for the downloading, or are we talking about the same money? We must be talking about the same money.
Just one technical question. Once farm land changes its definition, like Mr Spina said, it goes from farm to non-farm, I guess -- I need your help -- or non-productive farm. Let's say a developer is looking at it. The property has to be reassessed. So somebody would apply to the assessment office and then an assessor, she or he, would come to the farm and it would come under a different definition?
Mr Sholtack: Yes. This is the authority for the assessor to revalue the property after the assessment notices have gone out for the following year or for that year.
Mr Pouliot: And they would have 90 days to do so?
Mr Sholtack: Yes. For example, if the bulldozers went on and started to develop the property in April, the assessment would be revalued for the rest of the year. It ceased to be farm land or the forest ceased to be a managed forest, and --
Mr Pouliot: And it's now the 407. But that doesn't apply. Okay.
Mr Sholtack: So the property will be revalued on its current value basis rather than on a current use.
Mr Cordiano: Could I ask just a follow-up question? For land that has been purchased and is going through a development process, and then the developer decides not to go ahead and that land sits idle, what happens to that land with the designation around current value? Where is the current value? The land still appears to be farm land.
Mr Sholtack: It has to be more than appears; it has to be farmed.
Mr Cordiano: So how would it be under your definition? What would be the current value of that land? Would it not be what it could actually sell for, given that it's going through a rezoning and now that value has been increased or enhanced, but the land hasn't actually gone through its physical transition?
Mr Sholtack: If we're talking about land that's being farmed, actively farmed --
Mr Cordiano: No, it's not being actively farmed. Let's go back to that. It's in transition. It sits there perhaps for two years, and in the case of the example that Mr Phillips used, it could be sitting there for quite some time. How do you establish whatever the current value is for that land? This is a very graphic example, perhaps a better example than has been used thus far to determine the difference between current value and market value. The land's there and wheat is growing on the land, yet it's gone through the rezoning process, the application has been made and then suddenly the developer stops.
Mr Spina: Wheat is growing on it?
Mr Cordiano: Well, whatever is growing on it, weeds, I couldn't care less. It still looks like farm land. How do you answer that? How do you make the distinction?
Ms Bassett: Mr Cordiano, you raise a good point, and we are looking at that in an upcoming bill. We will be looking at farm lands pending development and raising the issues such as those you're talking about right now.
Mr Cordiano: That's a huge gap, a huge grey area.
Ms Bassett: It is.
Mr Cordiano: You haven't answered that question and you're asking us to approve this piece of legislation.
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The Chair: Any additional concerns or questions? Shall the amendment carry? Carried.
Shall the section, as amended, carry? Carried.
We move on to section 23: There's a government motion 11, on the beige pages.
Ms Bassett: I move that subsection 35(1) of the Assessment Act, as set out in section 23 of the bill, be struck out and the following substituted:
"Notice and complaint
"(1) The owner and the tenant or tenants of land in respect of which a notice of assessment under section 32 is delivered or transmitted or that has been assessed under section 33 or 34 or classified under section 34 shall be notified and be entitled to complain as if the assessment or classification had been regularly made and the assessment roll was returned 14 days after the day of mailing of the notice of assessment."
This is really a technical amendment. It clarifies that where there is a classification change in a supplemental assessment, owners and tenants of land have the right to appeal.
The Chair: Comments or questions? Shall the amendment carry? Carried. Shall section 23, as amended, carry? Carried.
I have no amendments or motions regarding sections 24 and 25. Shall those sections carry? Carried.
Section 26: I refer you to government motion 12 on your beige pages.
Ms Bassett: I move that clause 40(1)(e) of the Assessment Act, as set out in subsection 26(1) of the bill, be struck out and the following substituted:
"(e) for land, portions of which are in different classes of real property, the determination of the share of the value of the land that is attributable to each class is incorrect."
This is a technical amendment. It clarifies that where portions of a property are assigned to different property classes, the amount allocated to each class can be appealed.
Mr Kwinter: I've read both the original and the amended, and although the wording is slightly different, I don't see what intent is different. Could you clarify for me why it's different?
Mr Sholtack: The present wording refers to land that is in two or more classes, and we want to clarify that land cannot be in two classes. The change was made to refer to portions. It's the portions that are in discrete classes; the property itself could be divided between two classes. That's the purpose of the amendment. Just to make it clear, if you've got a property that contains a commercial part and a residential part, each part would be in its separate class.
The Chair: Further comments or questions? Shall the amendment carry? Carried.
I refer you to amendment 13. It's a government motion on subsection (26).
Ms Bassett: I move that subsection 40(13) of the Assessment Act, as set out in subsection 26(4) of the bill, be amended by adding at the end "unless it is appealed under section 43(1)."
This merely clarifies that the Assessment Review Board's determination of a question of law is always subject to appeal to the Divisional Court.
The Chair: Comments or questions? Shall the amendment carry? Carried.
I refer you to NDP motion 14, in the beige pages. It's regarding subsection 26(4).
Mr Pouliot: I move that subsections 40(14), (15) and (17) of the Assessment Act, as set out in subsection 26(4) of the bill, be amended by:
(a) striking out "1998" in each place it appears and substituting "2000";
(b) striking out "1999" in each place it appears and substituting "2001";
(c) striking out "2000" in each place it appears and substituting "2002";
(d) striking out "2001" in each place it appears and substituting "2003"; and
(e) striking out "2002" in each place it appears and substituting "2004."
If I missed one street in the city of Toronto, I'll come back with another amendment.
All this amendment does is move the time frame closer to the year 2000 after the next election.
The Chair: Comments or questions? All those in favour of the NDP motion? All those opposed? The motion is defeated.
I have no further amendments to section 26. Shall section 26 carry, as amended? Carried.
Section 27: I have no amendments to section 27. Shall section 27 carry? Carried.
I have no amendments to sections 28 to 30. Shall those sections carry? Carried.
Section 31: I have a government motion.
Ms Bassett: I move that subsection 46(1) of the Assessment Act, as set out in subsection 31(1) of the bill, be amended by adding at the end "or a determination that lands are conservation lands for the purposes of paragraph 25 of section 3."
This clarifies that the review of the determination of eligible conservation land will be made by a prescribed tribunal rather than by application to the Ontario Court.
The Chair: Comments or questions? Shall the amendment carry? Carried.
There are no other amendments to 31. Shall the section, as amended, carry? Carried.
I have no amendments to section 32 or 33. Shall those sections carry? Carried.
Section 34: I have an NDP motion, number 16 on your beige pages.
Mr Pouliot: We withdraw. I was simply recommending that --
The Chair: I'll clarify. It's not an amendment; it's a motion.
Mr Pouliot: Thank you, Chair. We heard you loud and clear. We're simply recommending that the committee vote against section 34.
The Chair: Further comments or questions? All those in favour of section 34 carrying? Carried.
I have no amendments on sections 35 to 52. Shall sections 35 to 52 carry? Carried.
Section 53 of the bill: I refer you to government motion 17.
Ms Bassett: I move that the definition of "tax rate" in section 361.1 of the Municipal Act, as set out in section 53 of the bill, be amended by striking out "three decimal places" in the third line and substituting "six decimal places."
The reason for this is really for accounting purposes. I'll read it: "The tax rate will now be six decimal places instead of three decimal places to reflect the change from mill rate to tax rate and to prevent the loss of revenue through rounding out of figures."
The Chair: Comments or questions? Shall the amendment carry? Carried.
Shall section 53, as amended, carry? Carried.
I have no amendments to section 54. Shall section 54 carry? Carried.
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We'll move on to section 55. We start with government motion 18.
Ms Bassett: I move that subsection 363(1) of the Municipal Act, as set out in section 55 of the bill, be struck out and the following substituted:
"Establishment of tax ratios
"(1) A set of tax ratios for every municipality shall be established in accordance with this section.
"What tax ratios are
"(1.1) The tax ratios are the ratios that the tax rate for each property class must be to the tax rate for the residential/farm property class. The tax ratio for the residential/farm property class is 1."
The reason for this is that we needed a benchmark, and this clarifies that the tax ratio for the residential/farm property class is 1.
The Chair: Comments or questions? All those in favour of the amendment? Carried.
I'm moving to Liberal motion 19, on the same section.
Mr Phillips: I just alert the committee that in some respects the next four motions are a package. I guess we have to deal with them one at a time, but they have to be taken in a total context. I'll move the first one and then we can debate the reasons for it.
I move that subsections 363(2), (3) and (4) of the Municipal Act, as set out in section 55 of the bill, be struck out and the following substituted:
"Municipal bylaw
"(2) The council of a municipality shall pass a bylaw on or before March 15 in each year to establish the tax ratios for that year for the municipality."
If I can explain what we're attempting to do, there is a flaw in the bill that's going to cause municipalities a fair bit of difficulty. In our opinion, it's this: In a two-tier system, the tax ratio -- I hope I've got the terminology correct -- must be the same for the upper tier and all the lower tiers unless there's agreement to allow the lower tiers to set their own tax ratios.
The limit on the tax ratio, as we understand it, is the total for the two tiers; that ratio is then the maximum ratio. For example, if, when all the numbers are added up -- the motion we just passed -- residential is 100, the commercial will be something higher than that almost without exception, maybe 200 or 250 or 300. But it may very well be that at the lower tier there are municipalities with a ratio of 200 and municipalities with a ratio of 300, a different one. The one with the 300 will not be allowed to use the 300, as we read the bill; it will have to use the 250, if that's what the region is. The bill handcuffs municipalities.
It was in Ottawa that we heard this, from Hawkesbury, I think. I'm not sure of that. I think it was one of the municipalities in that area. These four amendments, as a package, are designed to give the flexibility so the lower-tier municipality does not have to use the upper-tier municipality's ratios, because there will be maximums set on it that will be lower than the existing ones. That's a layperson's explanation, my explanation of it, anyway. That's the intent.
Ms Bassett: I know what you're saying. As you know, in this bill the highest level of government establishes the tax ratios. We would say this allows two property owners who own similar properties of the same value in the same upper-tier community, getting the same upper-tier services, will pay the same taxes. That's the principle. We feel the government can delegate its power to the lower tier. Lower-tier governments would still be accountable, however, for how much tax revenue they require. By letting the upper tier set tax ratios, it results in only one set of ratios for a given property tax bill, and this makes the system simpler and easier to understand.
Giving the lower tier the power to set ratios would also increase the potential for tax competition to attract business, because you could have different rates.
I feel this allows the best of both worlds, really. What you argue, that the lower tier can set tax ratios, is permissible if it's delegated by the upper tier.
Mr Phillips: I think this is going to cause some difficulties if it proceeds. In the end, all we in opposition can do is alert you to it, give the solution, and hope we don't have to say, "We told you so."
The Chair: Further comments or questions? All those in favour of Mr Phillips's motion? All those opposed? The motion is defeated.
We'll move to Liberal motion 20. I don't know, Mr Phillips, if you want to consider --
Mr Phillips: I could move all three of these at the same time, if you'd like.
The Chair: I thought you might like to withdraw them.
Mr Phillips: I would like to get them on the record.
The Chair: If you want to go ahead, we can discuss them all at once. We have to have three separate votes, that's all.
Mr Phillips: Do I need to read them all? I would be happy to read them all. I want them on the record.
The Chair: You should read them all.
Mr Phillips: I move that clause 363(7)(a) of the Municipal Act, as set out in section 55 of the bill, be amended by striking out "subsection (2) or (3)" and substituting "subsection (2)."
I move that clause 363(9)(c) of the Municipal Act, as set out in section 55 of the bill, be amended by striking out "subsection (2) or (3)" in the fourth and fifth lines and substituting "subsection (2)."
I move that section 364 of the Municipal Act, as set out in section 55 of the bill, be struck out.
That was the discussion we just had. That was the last three parts of the same process.
The Chair: Are there any comments or questions on those three amendments, which have a similar purpose and meaning?
We will vote on Liberal motion 20. All those in favour? All those opposed? The motion is lost.
Liberal motion 21. All those in favour? Opposed? The motion is lost.
Liberal motion 22. All those in favour? Opposed? The motion is lost.
The committee stands recessed until after routine proceedings today.
The committee recessed from 1200 to 1553.
The Chair: The last thing we did before the recess was that there were four Liberal amendments defeated. We are on page 21 of the bill, section 55. Under section 363, I have no amendments on subsection 363(1), (2), (3), (4), (5) and (6). Actually, I have no amendments right through to section 368. Shall those sections carry? Carried.
There are no amendments to section 369. Shall the section carry? Carried.
Section 370, a government motion.
Ms Bassett: I move that subsection 370(1) of the Municipal Act, as set out in section 55 of the bill, be struck out and the following substituted:
"Interim levy, local municipality
"(1) For 1999 and subsequent years, the council of a local municipality, before the adoption of the estimates for the year, may pass a bylaw levying a separate tax rate, as specified in the bylaw, on the assessment in each property class in the local municipality rateable for local municipality purposes."
And I further move that section 370 of the Municipal Act, as set out in section 55 of the bill, be amended by adding the following subsections:
"Interim levy for 1998
"(7) For 1998, the council of a local municipality may pass a bylaw levying special tax rates on the assessment of property in the municipality rateable for local municipality purposes.
"Rate can differ
"(8) Despite section 362, the tax rates to be levied under subsection (7) may be different for different properties.
"Restrictions
"(9) The tax rates to be levied under subsection (7) must be set so that the amount raised on the property does not exceed 50%, or a lesser percentage if such a percentage is prescribed, of the taxes levied on the property in 1997, including business taxes levied on persons carrying on business on the property.
"Application of subsections (2), (5) and (6)
"(10) Subsections (2), (5) and (6) apply, with necessary modifications, to a bylaw under subsection (7) and amounts levied under subsection (7)."
The interim levy for 1998 clarifies that the taxes raised for interim purposes in 1998 cannot exceed 50% of the total business and property taxes for 1997, and the interim levy for 1999 and subsequent years clarifies that current provisions in the bill providing for raising interim levies apply to 1999 and subsequent years.
Mr Pouliot: I need your help here. Under the present system, you have your interim tax levies, so you go early in the year and you go to the maximum that the statutes allow, which is 50%. I would assume, given the pressures at the municipal level, people pretty well comply as much as they possibly can. I've heard you mention that under the interim levy, you could go to a new class of taxes providing you don't surpass or exceed 50%. Is that right? Within that 50% you can rearrange? Is that what you're saying? Or is it supplementary to the 50%?
Mr Tassonyi: Mr Chair, if you'd like me to address this for Mr Pouliot, the purpose of the 50% rule, basically, in the previous statute was to set a ceiling on the interim levy, as you point out. In this case, this amendment clarifies that on, say, a commercial property, the properties which had previously been the business taxes assessed to the tenants would also be included in the total of the taxes to which the 50% could apply on a property.
Mr Pouliot: Yes. As human frailty, knowing that your appetite is more insatiable than ever, I was banking on consistency, that in your dumping your responsibility on to the backs of municipalities, you would not hesitate and you would allow them to do whatever they wish. They could go to the marketplace and fleece an additional 20% or 30% as long as you could wash your hands, and that would have been consistent with your bill. So there's a departure here. It's still the same thing, except that you have more flexibility at the commercial level. Thank you.
Mr Phillips: Just so I'm completely clear on this, because the municipalities were quite worried about part of this, let's take the old bank tower. It pays realty taxes right now of -- I don't know -- $15 million, and the occupants pay business occupancy tax of roughly seven million bucks: $22 million. As I understand it, this would permit the new city of Toronto to send an interim tax bill for $11 million realty tax.
Mr Tassonyi: Essentially that's correct, maximum. There is some ministerial prerogative to set limits as well in subsequent sections.
Mr Phillips: But in no cases can anyone send out a tax bill that is more than 50% of the combination of BOT and realty tax from the previous year.
Mr Tassonyi: That's correct.
Mr Phillips: So the worry that the municipalities have, which is that the bank towers are going to be extremely pleased come May of next year when you send the final tax bill out and you say to them, "Well, you had an $11-million interim tax bill, but your second is only going to be $5 million," for the small business that will see substantial increases if their business occupancy tax is only 20%, they cannot send an interim bill out higher than 50% of the previous year's combination of realty tax/business occupancy tax?
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Mr Tassonyi: The 50% limit applies to the previous year's no matter who the business owner is, whether it's a bank tower or a small business, as long as it's the commercial landlord that is getting the bill. Essentially, it does deal with the municipal concern that's been raised to you and to us.
Mr Phillips: Actually, I think what they were saying, if I might, was, "Would you permit us to send out an estimate of the 50%?" not, "Will you allow us to send out the combination BOT/realty tax?" I thought that's what they were saying.
Mr Tassonyi: I guess that depended on who you were talking to. We've certainly had representations from the municipal associations and from others requesting that we look at the flexibility involved in dealing with this issue.
Mr Phillips: Is this what AMO wanted?
Mr Tassonyi: I believe it's pretty close to what AMO had requested.
Mr Pouliot: Do you have an impact study, some example of what this does to your final levy, which will be in the mail five months after the interim, so it will be quite close?
Mr Tassonyi: There are so many things that will be changing as a consequence of this system once it's finally realized that I don't have any specific calculations to indicate which way a final tax bill will go for any particular ratepayer. In consequence, in the bill there is provision for municipalities to make adjustments if a ratepayer has been overcharged or to deal with any circumstances to adjust the bill appropriately.
Mr Pouliot: Chair, we suggest that our timetable be altered for the very reason that this presentation changes by the day, if not by the week.
I'll be brief. I went to the House today. This morning I knew that starting in January, because they run a different fiscal year, my small property would not be subjected to education taxes. I also read that in lieu of that, there would be new responsibilities at the municipal level which would reflect on the levy under general purpose. I'm told by way of the minister -- and I have to believe what the minister says, of course; it's the voice of the government in these matters. Now I'm back not to 100%; now it's 50%.
I don't know about Miss Jones having slipped in the bathtub and needing a hip replacement. Who's going to pay for what and to what extent? What about rehabilitation? I still don't know all of these things. Simply put, we've asked for an impact study. I know you have too. Give us the database that you know -- and if you don't know, it's becoming sort of predictable; we understand that, and things are liable to change.
The thing is, a short time before the municipal election you have reassessment, you have Bill 98, development charges, and you have all this downloading, but we don't know who pays for what and who's responsible for what in such a short time before the transition.
I asked a very simple question, and I think it goes to the heart of the matter. Someone owns a mall and I have a long-term contractual arrangement, 10 years. It suits the mall owner; it suits me. When you shake the can and you come up with levies, your margin is 8%. There will be some cases your impact is to the tune of 15% to 20%. There's no force majeure. There's no contingency in my contractual arrangement. Who's going to pay the difference? What kind of new relationship will we have to do?
When you ask that, people don't give you the answers. They don't know. When you ask about ramifications, they say, "Well, tighten up your belt." When 60% of the levy on a small farm town has been taken away by way of rebate, people say: "Well, they'll have to tighten up their belts. You tighten up your belt." No two situations are alike. It's frustrating because in some cases you can only tighten up your belt so much. In one case, it's 95%, and somebody says, "Well, they can tighten up their belts." They might as well fold or amalgamate. You cannot amalgamate overnight. There are terms and conditions attached to that.
We're saying we should maybe take a little more time. It's frustrating. We have no database, no examples. We know that Oakville is losing $18 million at the two car plants. We don't know who's going to make up the slack. It's 18 million bucks. Is it the commercial or the residential or both? We know that the biggies -- and I don't want to malign them -- are saving 18 million bucks. The money has to come from someplace. I don't mind if they save $18 million, but who's going to pay? No answer.
Ms Bassett: I want to just say that preliminary data -- this is without answering all the things because of time not permitting -- will be ready this fall, and detailed data will be ready early in 1998, so people can plan on that.
The Chair: Further comments or questions? Shall the amendment carry? Carried.
I have no further amendments on section 370. Shall the section, as amended, carry? Carried.
Section 371: We are looking at a government motion.
Ms Bassett: I move that subsection 371(1) of the Municipal Act, as set out in section 55 of the bill, be amended by adding the following clause:
"(c) prescribing a percentage that is less than 50% for the purposes of subsection 370(9)."
I further move that section 371 of the Municipal Act, as set out in section 55 of the bill, be amended by adding the following subsection:
"Prescribed percentages can vary
"(2.1) A regulation under clause (1)(c) may prescribe different percentages for different property classes and for different properties within property classes."
This allows for the Minister of Municipal Affairs and Housing to prescribe interim levies of less than 50% for 1998. A similar provision, as you know, already exists in the bill for 1999 and subsequent years.
The Chair: Questions or comments? Shall the amendment carry? Carried.
Shall subsection 371(1), as amended, carry? Carried.
The next motion I have is Liberal motion 25.
Mr Phillips: I move that section 55 of the bill be amended by adding the following section to be added to the Municipal Act:
"Reimbursement for reductions on farm land
"371.1(1) For each year, the minister shall pay a municipality an amount to compensate the municipality for the reduction in the municipality's tax revenue due to the elimination of provincial funding for the farm tax rebate program.
"Calculation of amount
"(2) The amount the minister shall pay under subsection (1) is difference between,
"(a) the amount that would be levied on the farm land in the farm land and managed forests property class if the tax ratio for the class was 1; and
"(b) the amount that is levied on the farm land."
By way of explanation, this was something the Ontario Federation of Agriculture was concerned about. While they welcome the change in program from the farm tax rebate to the reduction in property tax, they recognize that the province used to pay and takes it off their books, but it's the municipalities that are going to have to pick up the lost revenue. The Ontario Federation of Agriculture was concerned that because the government has essentially moved the cost off themselves on to property tax, on to the municipalities, it's putting the farm community in a difficult spot. What they asked for or suggested, although this is not their wording, was that we find some vehicle for making certain that the municipalities aren't out the money. That's the intention of it.
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You may recall that AMO recommended not proceeding with changing the classification of farm to 25%. I think this is a potential compromise for both AMO and the Ontario Federation of Agriculture.
The Chair: I have to rule the motion out of order because it contravenes standing order 56. It directs the allocation of public funds.
Mr Phillips: I appreciate that. If a government member were to move the motion, is that possible?
Clerk of the Committee: Only the minister can move it.
Mr Phillips: Only the minister can move it. I had a feeling some of the government members might want to move it.
The Chair: We're now considering subsection 371(3), NDP motion 26.
Mr Pouliot: It's in terms of the time frame implementation. We have some sections that are fairly lengthy, and I would ask unanimous consent that they be deemed to have been read, and I can give a very brief argument as to our rationale behind these.
The Chair: Are you looking at 26, the same one I am? It's not a long one.
Mr Pouliot: I'm looking at section 55, subsections 372(1), (2), (3) and (5).
The Chair: It's numbered at the top on my pages as 27. There's another motion on subsection 371(3), an NDP motion, number 26. Do you have a copy of that? It's just the page before.
Mr Pouliot: All I have are summaries that, being anecdotal, don't follow the act. I'm sorry.
The Chair: We'll get you a copy.
Mr Pouliot: This is just a matter of implementation, Chair. We'll get to the next one.
I move that subsection 371(3) of the Municipal Act, as set out in section 55 of the bill, be amended by striking out "1998" in the second line and substituting "2000."
The Chair: Comments or questions? Those in favour of the NDP motion? Those opposed? It's defeated.
Shall subsection 371(3) carry? Carried.
Shall section 371, as amended, carry? Carried.
We're on section 372, NDP motion 27.
Mr Pouliot: This is a little more than two pages. This amendment requires municipalities to phase in the assessment-related changes on an interim basis, equally if you wish, over a period of eight years. We feel that by doing it one eighth at a time, the chances of dislocating and of severely impacting the system are reduced. It gives people a chance to prepare for the task ahead.
The current bill allows for an option on phase 8, but only too commonly, if you're pressed for money, you shall go where the money is. You would wish, perhaps, to implement to have more flexibility, but if you're not forced to do so, you won't do it.
The Chair: Mr Pouliot, do you want to read the motion or do you want to have it deemed as read, with unanimous consent?
Mr Pouliot: Deemed as read; that's why I'm offering the comments in lieu of.
Interjections: Agreed.
The Chair: Agreed. Do you want to have further comments and questions?
Mr Pouliot: If they wish. I know the fate of this motion. Why not save the time? You're not listening anyway.
The Chair: All those in favour of the NDP motion? All those opposed? It's defeated.
In the white pages we gave you this morning, there is a government motion on subsection 372(3) of section 55 of the bill.
Ms Bassett: I move that the French version of the definition of "1997 taxes" in subsection 372(3) of the Municipal Act, as set out in section 55 of the bill, be struck out and the following substituted:
«`Impôt de 1997' À l'égard d'un bien, s'entend en outre des impôts imposés à ce titre aux personnes qui y exercent une activité commerciale.»
It's simply a change to the French version.
Mr Pouliot: It's the same amount in both languages, I take it.
The Chair: Any comments or questions? Shall the amendment carry? Carried.
Subsection 372(9): An NDP motion, number 28.
Mr Pouliot: I move that subsection 372(9) of the Municipal Act, as set out in section 55 of the bill, be amended by striking out "1998" in the third line and substituting "2000."
The Chair: Comments or questions? All those in favour of the NDP motion? All those opposed? It's defeated.
We're moving to government motion 29.
Ms Bassett: Since it's fairly long, perhaps I could have the motion deemed to be read in. No? All right, I'll read it in.
Mr Rollins: Are we going to vote on section 372 now?
The Chair: Shall section 372, as amended, carry? Carried.
Ms Bassett, please go ahead.
Ms Bassett: I move that subsection 373(1) of the Municipal Act, as set out in section 55 of the bill, be struck out and the following substituted:
"Tax relief for low-income seniors, etc
"(1) For the purposes of relieving financial hardship, the council of a municipality, other than a lower-tier municipality, may pass a bylaw providing for deferrals or cancellation of, or other relief in respect of, all or part of assessment-related tax increases on property in the residential/farm property class for owners who are, or whose spouses are,
"(a) low-income seniors as defined in the bylaw; or
"(b) low-income persons with disabilities as defined in the bylaw.
"Tax relief must be given
"(1.1) The council of a municipality, other than a lower-tier municipality, shall pass a bylaw under subsection (1)."
I further move that subsections 373(5) and (6) of the Municipal Act, as set out is section 55 of the bill, be struck out and the following substituted:
"Application to lower tiers
"(5) A bylaw of an upper-tier municipality providing for a deferral or cancellation of tax increases or other relief in respect of tax increases also applies with respect to the tax increases of its lower-tier municipalities.
"Amounts transferred by lower-tier municipalities adjusted
"(6) If a lower-tier municipality levies a tax rate for upper-tier purposes in respect of which there is a deferral or cancellation of tax increases or other relief in respect of tax increases, the amount of taxes the lower-tier municipality shall pay the upper-tier municipality shall be reduced accordingly.
"Deferred taxes, payment to upper tier
"(6.1) If a lower-tier municipality levies a tax rate for upper-tier purposes in respect of which there is a deferral of tax increases the lower-tier municipality shall pay the upper-tier municipality its share of any deferred taxes and interest when they are paid."
This, it seems clear to me, requires municipalities to provide a deferral, cancellation or other relief in respect of assessment-related tax increases for low-income seniors and low-income disabled owners and/or their spouses.
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Mr Phillips: This is probably timely. During the committee debate Mr Ford was a fairly strong advocate of this, of the reverse mortgage. Actually, it was a coincidence that he mentioned it and literally a couple of days later the ads started coming out for these things. It looks like you have created a new industry here.
This one says, "Concerned Seniors Pay Property Tax the Easy Way," which is what everybody looks for, I guess. "With the threat of megacity comes the possibility of increased property taxes. This will affect everyone, but the hardest hit will be seniors." It goes on to outline the plan here, which is, "This leaves the homeowner to enjoy the full benefits during their lifetime, knowing that it does not require repayment until they die."
I gather that's the intent of this thing, to permit peace of mind until people die: reverse mortgages. Is that what the --
Ms Bassett: You're right in that it is outlining the intent. It's up to the municipalities to decide what they want to do. Some municipalities, as you know, because reassessment has already occurred, will not be affected; in fact, for three quarters of them this will not be an issue.
Mr Phillips: Is there mention later on in these amendments of the support the province is providing for this? Is that covered in a later amendment?
Ms Bassett: No, it is not. We are outlining the intent and it's up to the municipalities to decide to do what they wish within the outline.
Mr Phillips: I noticed today's announcement that the municipalities have picked up roughly another $650 million to $700 million of costs. Has AMO indicated that they can afford this, or have you put a cost estimate on what it might cost?
Ms Bassett: It's up to the municipalities to decide if that's what they want. It's premature to talk about who does what right now.
Mr Pouliot: I wish that one of our colleagues had indicated that reverse mortgages are a court of last resort for many people. What shocked me was that, first of all, they cost anywhere from 1.5% to 2% more than conventional mortgages, without the flexibility and choice of product afforded with conventional mortgages. Also, you must have reached a fairly high equity in the property, far more than to secure a mortgage under the terms of CMHC. All those rules go by the board when it comes to a reverse mortgage, which is a convenience.
If that's the kind of legacy you want, I suppose you should look at the next amendment of the NDP, which offers an opportunity to respect the human dimension, and nobody goes broke in the process.
Ms Bassett: I would just point out that the municipalities can provide a deferral or cancellation or other relief in any case.
Mr Pouliot: You know, I don't want to say things I will regret, but it's like saying to someone: "Here's $10. Go to the cinema; buy yourself a popcorn and a soda." Now this government is saying: "Here's $5. You can do whatever you wish with it. You're free." It's always, "The municipality can do this," "The municipality can do that." You have the courage to say to a municipality, "If you wish, you can charge less than the 50% tax levy." They can charge less than 50% if they wish now. The thing is that they will not have the means to do so. They'll be forced to charge the 50%; 90% of them are already charging the 50%, because that's what the statutes allow.
It's not a newly found flexibility. You still write the rules, you still write the standards -- you do it by statutes and by regulation -- and you forget to put the cheque in the mail. When we ask you, "How much is it going to cost?" we're hearing responses such as, and I know you're well-intended, "It's too early to say," or "We don't know."
It's not too early. Little will get done during the months of July and August. The election is in November. Their fiscal year starts in January. Your assessment starts three months after. In the meantime, they'll have to pay for those four months. Our fiscal year is April 1. I think time is of the essence here. That's why we're asking that you delay this.
The Chair: Shall the motion carry? Carried.
Next is an NDP motion 30.
Mr Pouliot: I move that section 373 of the Municipal Act, as set out in section 55 of the bill, be struck out and the following substituted:
"Waiver of increases for low-income seniors, etc
"373(1) Assessment-related tax increases on property in the residential/farm property class shall be waived for owners who are, or whose spouses are,
"(a) low-income seniors as defined in the regulations; or
"(b) low-income persons with disabilities as defined in the regulations.
"Definitions
"(2) For the purposes of this section,
"`assessment-related tax increases' means tax increases beginning in the year 2000 or beginning in a subsequent taxation year for which the day or one of the days as of which current value is determined for the purposes of assessment for the taxation year is different from the corresponding day or days for the previous taxation year;
"`owner' means a person assessed as an owner.
"Determination of assessment-related tax increase
"(3) The amount of an assessment-related tax increase shall be determined as follows:
"1. For a tax increase beginning in 2000, the assessment-related tax increase is the tax increase within the meaning of the definition of `2000 assessment-related tax increase or decrease' in subsection 372(2) reduced, if the tax increase is being phased in under a bylaw under section 372, by the amount not yet phased in.
"2. For a tax increase beginning in a subsequent year, the assessment-related tax increase is the amount determined in accordance with the regulations.
"Regulations
"(4) The minister may make regulations,
"(a) defining low-income seniors or low-income persons with disabilities for the purposes of subsection (1);
"(b) governing the determination of an assessment-related tax increase for the purposes of paragraph 2 of subsection (3).
"When waiver applies, ceases to apply
"(5) A waiver of tax increases under subsection (1) ceases to apply when the property is transferred to a person other than the owner's spouse.
"Amounts transferred by lower-tier municipalities adjusted
"(6) If a lower-tier municipality levies a tax rate for upper-tier purposes in respect of which there is a waiver of tax increases the amount of taxes the lower-tier municipality shall pay the upper-tier municipality shall be reduced accordingly."
It gives them a chance to be like the others. That's all it is. It brings forth the reality of the many who are on the waiting list, many of whom are among the most vulnerable. It gives them a tool to defend themselves. It does not strip them of their dignity. It restores faith in the system. That's all this does, and it's not very costly.
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Mr Kwinter: I apologize. I wasn't here. I don't know whether the government had any amendments for 373 or if it's just --
The Chair: The one immediately before, yes. It was carried.
Mr Kwinter: Can I get a clarification from the member from the NDP caucus, which applies also to the government provisions? Are there provisions in the regulations where it says, in 373(1), part of the "assessment-related tax increases on property in the residential/farm property class...for owners who are, or whose spouses are, low-income seniors as defined in the" bylaw? For example, if you are a millionaire and your wife has no income and you say, "I claim an exemption because I have a low-income spouse who has no income," is there a provision in the regulations to cover that?
Ms Bassett: It's up to the municipality to define, it says in our legislation. In the amendment the NDP had, I'm not sure.
Mr Kwinter: You know what I'm getting at? It says "or their spouse," if their spouse is a low-income senior. As I say, there are many senior citizen spouses who have no income. They are in no way needy of any kind of exemption, but it could be used as a loophole to say, "My spouse has no income, and I want to claim the exemption." Do we have an answer for that at all?
Ms Crane: If I could just clarify, as Ms Bassett has pointed out, in the government amendment the definition of "low-income senior" and "low-income disabled spouse" would all be defined by municipal bylaw, so it's up to the municipality to define what those terms would mean in their municipality.
Mr Kwinter: So the particular example I use would be covered, not included in this exclusion?
Ms Crane: The municipality determines all those parameters you were mentioning, the definitions of "low-income" "senior," "disabled," "spouse."
The Chair: Further comments or questions? Those in favour of the NDP motion? Those opposed? Defeated.
Shall section 373, as amended, carry? Carried.
I have no amendments for 374. Shall section 374 carry? Carried.
We're on section 375. The next amendment is one of the replacement motions you were given this morning. It says 31A at the top.
Ms Bassett: I move that the English version of subsection 52(3) of the Power Corporation Act, as set out in subsection 68(2) of the bill, be amended by inserting "of inside ground floor area" after "square metre" in the third-last line.
The explanation is that the French version was translated; the English was not.
The Chair: Comments or questions?
Ladies and gentlemen, bear with me. We are on subsection 55(375), down to where? This is very difficult to read.
Clerk of the Committee: This amendment is on page 42, at the top of the page, on subsection (3). It's the third-last line from the bottom.
The Chair: Bear with me. Before I deal with this amendment, shall section 55, as amended, carry? Carried.
I have no amendments for sections 56 to 67. Shall those sections carry? Carried.
We are now on section 68, which is the bottom of page 41. There is a replacement motion for government motion 31A, which Ms Bassett just read into the record. Are there comments or questions? Shall the motion carry? Carried.
Shall the section, as amended, carry? Carried.
I have no amendments for sections 69 to 75. Shall the sections carry? Carried.
The next motion I have is Liberal motion 32.
Mr Kwinter: I move that section 76.1 of the bill be amended by adding the following section to Part IV:
"Payments in lieu, federal and provincial governments
"76.1 The acts amended by this act continue to apply as though they were not so amended with respect to payments in lieu of taxes by the crown in right of Canada or the crown in right of Ontario."
At our hearings in Ottawa, in Port Colborne, we had various deputants appear before us concerned about what was going to happen to the revenues, or the lack of revenues in some cases, as a result of the repeal of this particular section, because they are quite dependent on federal and provincial payments in lieu of taxes. We just want to make sure this continues to apply in the act.
Ms Bassett: I would just point out to Mr Kwinter that the province is reviewing payments in lieu. It'll appear in another bill.
The Chair: Any further comments or questions? Those in favour of the Liberal motion? Those opposed? The motion is defeated.
Shall the section pass? Carried.
We're now on government motion 33.
Ms Bassett: I move that the bill be amended by adding the following section:
"Omitted business assessments
"77.1 Despite section 21, subsection 33(1) of the Assessment Act continues to apply with respect to business assessments relating to the 1997 taxation year or an earlier year."
This merely allows for omitted business assessments to be levied after 1997.
The Chair: Questions or comments? Shall the amendment carry? Carried.
Shall section 77 carry, as amended? Carried.
I next refer to NDP motion 34.
Mr Pouliot: I move that section 78 of the bill be amended by striking out "1998" in the second line at the end of paragraph 1 and substituting in each place "2000."
This is a time frame implementation.
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The Chair: Comments or questions? Those in favour of the NDP motion? Those opposed? The motion is defeated.
Shall section 78 carry? Carried.
We're now looking at NDP motion 35.
Mr Pouliot: I move that section 79 of the bill be amended by,
(a) striking out "1997" in each place it appears and substituting "1999"; and
(b) striking out "1998" in each place it appears and substituting "2000."
We're consistent. We're looking forward to a change in the time frame implementation.
The Chair: Any further questions or comments? Those in favour of the NDP motion? Those opposed? It is defeated.
Shall section 79 carry? Carried.
We are now looking at NDP motion 36.
Mr Pouliot: I move that subsection 80(1) of the bill be amended by striking out "1997" in the third line and substituting "1999" and by striking out "1998" at the end and substituting "2000."
The Chair: Those in favour of the NDP motion? Those opposed? It is defeated.
Shall section 80 carry? It's carried.
We are now looking at NDP motion 37.
Mr Pouliot: I move that section 81 of the bill be struck out and the following substituted:
"Bylaws under section 363 of the Municipal Act.
"81(1) In this section, `section 363 bylaw' means a bylaw under section 363 of the Municipal Act as it read on December 31, 1999.
"(2) Subject to subsection (3) a section 363 bylaw expires on January 1, 2000.
"(3) If a municipality passes a bylaw before the end of 2000 continuing a section 363 bylaw, the section 363 bylaw continues, despite the repeal of section 363 of the Municipal Act as it read on December 31, 1999, until the section 363 bylaw expires or is repealed."
The Chair: Did you want to explain the purpose of the motion, Mr Pouliot?
Mr Pouliot: In the interests of time, I'll just say that we want an orderly implementation of this statute. It takes time to digest and to assimilate, and they're going too fast.
The Chair: Those in favour of the NDP motion? Those opposed? It is defeated.
Shall section 81 carry? Carried.
We are now on government motion 38.
Ms Bassett: I move that section 82 of the bill be struck out and the following substituted:
"Unpaid business taxes etc.
"82. The Municipal Act, as it reads on December 31, 1997, continues to apply with respect to the following:
"1. Business taxes that remain unpaid on December 31, 1997, or that are levied after that date under subsection 33(1) of the Assessment Act as it applies under section 77.1.
"2. Other rates, charges or levies that remain unpaid on December 31, 1997, and that are not taxes on property."
This is really a complementary amendment to section 77.1, to permit the collection of taxes raised by omitted business assessments.
Mr Kwinter: Could I get a clarification of what these rates, charges or levies are that are not taxes on the property -- just examples.
Mr Tassonyi: Those may be things like licence fees or water rates or sewer rates that are collected in like manner to taxes. They're not deemed as taxes but are collected in like manner. We wanted the collection provisions that would apply to be retained.
Mr Kwinter: All these levies, taxes, are applied as to the property but they're not really considered property tax. Is that what you're saying?
Mr Tassonyi: That's correct.
The Chair: Further comments or questions? Shall the amendment carry? Carried.
There is another proposed amendment to the same section, NDP motion 39.
Mr Pouliot: I move that section 82 of the bill be amended by striking out "1997" in the second line and in the fourth line substituting, in each place, "1999."
The Chair: Those in favour of the NDP motion? Those opposed? The motion is defeated.
Shall section 82, as amended, carry? Carried.
We are looking at NDP motion 40.
Mr Pouliot: I move that subsections 83(1), (3) and (4) of the bill be struck out and the following substituted:
"Commencement
"83(1) Except as provided in subsections (2) and (4), this act comes into force on December 1, 1999.
"Same
"(4) Part II (sections 40 to 61) and sections 63 to 76 and 80 to 82 come into force on January 1, 2000."
Once again, this is changing the time frame implementation.
The Chair: Those in favour of the NDP motion? Those opposed? The motion is defeated.
We are going to NDP motion 41.
Mr Pouliot: I move that the bill be amended by adding the following section:
"Public hearings etc required
"83.1 Despite section 83, this act, other than subsection 4(1) and section 77, shall not come into force unless the following occur before December 1, 1999:
"1. An assessment is made of the land in the province as it would be made under the Assessment Act if the amendments to the Assessment Act in this act were in force.
"2. The Ministry of Finance prepares an analysis of the impact the assessment would have if municipal taxes were based on it.
"3. The assessment and analysis are made public and are tabled with the standing committee on finance and economic affairs.
"4. The standing committee on finance and economic affairs holds public hearings, including public hearings outside Toronto, on the assessment and the impact it would have if municipal taxes were based on it."
I've already told you more than I know. We know there's an impact study; we suspect there is one for the city of Toronto. We're asking that we become the rightful recipients, as critics of this bill, but apparently it's not forthcoming -- they're not listening -- so we're making a plea through an amendment to the act, saying, "Please give it to us."
The Chair: Any further questions, comments or confessions? Those in favour of the NDP motion? Those opposed? It is defeated.
Shall section 83 carry? Carried.
We're going to NDP motion 42.
Mr Pouliot: If you appreciated the last one, you'll love this one, Mr Chairman.
I move that section 84 of the bill be struck out and the following substituted:
"Short title
"84. The short title of this act is the Market Value Assessment Act, 1997."
We have been subjected to what is nothing less than a ritual, a charade, cheap tricks best performed at a tombola that's about to leave town. It's all the same. The veil is so thin they've been smoked out, so why don't we call it like it is? This is what the resolution says. It says: "Please come to your senses. Tell the truth. Call it something that people will understand and relate to, not to make an end run around the truth."
Surely you can acquiesce to this. It's not asking for a lot. You're not losing anything in that. I implore members of the committee, the short title of this act is the Market Value Assessment Act, 1997, and I so move.
Mr Kwinter: I think the member for the NDP is being totally unfair. I'd be prepared to support his amendment if there were a change to the short title of this act to the Actual Value Assessment Act, 1997.
The Chair: Further comments or questions? Those in favour of the NDP motion? Those opposed? The motion is defeated.
Shall section 84 carry? Carried.
We are now looking at an NDP motion referring to the long title of the bill.
Mr Pouliot: The following spells out the approximate principle associated with the movement, party, that we are, that of the NDP.
I move that the long title of the bill be struck out and the following substituted:
"An Act to Impose a System of Market Value Assessment on the Province of Ontario."
The Chair: Further questions or comments? Those in favour of the NDP motion? Those opposed? It's defeated.
Shall the title carry? Carried.
Shall the bill, as amended, carry? Carried.
Shall I report the bill to the House? Agreed.
This bill is complete. This committee stands adjourned until the call of the Chair.
The committee adjourned at 1653.