STANDING COMMITTEE ON FINANCEÂ AND ECONOMIC AFFAIRS
COMITÉ PERMANENT DES FINANCES ET DES AFFAIRES ÉCONOMIQUES
Thursday 24 April 2008 Jeudi 24 avril 2008
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The committee met at 0905 in room 151.
The Chair (Mr. Pat Hoy): Good morning, committee. We shall now come to order, and our first order of business will be to take a short recess, as we have more incoming amendments and the clerk needs to file them in order of their appearance within the bill. We shall recess until we get them photocopied.
The committee recessed from 0905 to 0917.
The Chair (Mr. Pat Hoy): The standing committee on finance and economic affairs will now come to order. You should each have the additional amendments.
SUBCOMMITTEE REPORT
The Chair (Mr. Pat Hoy): I would ask that the subcommittee report be read into the record.
Mr. Wayne Arthurs: Your committee met on Thursday, April 17, 2008, to consider the method of proceeding on Bill 44, An Act respecting Budget measures, interim appropriations and other matters, and recommends the following:
(1) That the committee meet for the purpose of clause-of-clause consideration of Bill 44 on Thursday, April 24, 2008, at 9 a.m. in Toronto;
(2) That for administrative purposes, proposed amendments be filed with the clerk of the committee by 5 p.m. on Tuesday, April 22, 2008.
The Chair (Mr. Pat Hoy): All in favour? Carried.
BUDGET MEASURES AND
INTERIM APPROPRIATION ACT, 2008
LOI DE 2008
SUR LES MESURES BUDGÉTAIRES
ET L'AFFECTATION ANTICIPÉE
DE CRÉDITS
Consideration of Bill 44, An Act respecting Budget measures, interim appropriations and other matters / Projet de loi 44, Loi concernant les mesures budgétaires, l'affectation anticipée de crédits et d'autres questions.
The Chair (Mr. Pat Hoy): Now I would ask for unanimous consent to stand down sections 1 through 3–that is a rather normal practice—and then we would move right to the schedules of Bill 44, An Act respecting Budget measures, interim appropriations and other matters. Agreed? Agreed.
We will go back to those later in the day.
In the package for the committee, page 1, a PC motion. Mr. Barrett.
Mr. Toby Barrett: Thank you, Chair. On behalf of the official opposition, I appreciate the opportunity to put forward some amendments at this meeting of our standing committee.
The Chair (Mr. Pat Hoy): I beg your pardon. I'm advised that schedule A, sections 1 through 4, did not have any amendments.
Shall sections 1 to 4 of schedule A, inclusive, carry? All in favour? Carried.
Now you can continue, Mr. Barrett.
Mr. Toby Barrett: Thank you, Chair. As I was saying, we do have a number of amendments, and if we take a look at our Bill 44 sheets, on page 2 you will find a PC motion to be moved.
I move that schedule A to the bill be amended by adding the following section:
"4.1 The act is amended by adding the following section:
"'Maximum increase in assessed value
"'19.1.1(1) Despite any other provision of this act, the assessed value of each property for the 2009 and every subsequent taxation year shall not exceed the assessed value of the property for the 2008 taxation year by more than five per cent.
"'Termination of cap
"'(2) Subsection (1) continues to apply to each property until such time as the property is transferred to a person other than a spouse or child of the person who owned the property on January 1, 2009.'"
The Chair (Mr. Pat Hoy): I'm going to have to rule this particular motion out of order, as it is beyond the scope of the bill.
Mr. Toby Barrett: I'll defer to the Chair on that decision.
The Chair (Mr. Pat Hoy): We'll move to PC motion number 2 in your package. Mr. Barrett.
Mr. Toby Barrett: Found on page 3.
I move that schedule A to the bill be amended by adding the following section:
"4.1 The act is amended by adding the following section:
"'Maximum increase in assessed value
"'19.1.1(1) Despite any other provisions of this act, the assessed value of each property for the 2009 and every subsequent taxation year shall not exceed the assessed value of the property for the 2008 taxation by more than the percentage prescribed by the regulations.
"'Termination of cap
"'(2) Subsection (1) continues to apply to each property until such time as the property is transferred to a person other than a spouse or child of the person who owned the property on January 1, 2009.'"
The Chair (Mr. Pat Hoy): I am going to have to rule that this motion is also out of order, as it is beyond the scope of the bill.
Now, Mr. Barrett, you're one page ahead of us, so when you say page 4, it's actually page 3 in my binder, but go ahead. You must be counting the cover page, so when you say 4, we're actually on 3 in my binder.
Mr. Toby Barrett: All right. I'll let people look up the pages themselves, or maybe have him indicate what page the committee turns to.
The next amendment the opposition wishes to move is:
"4.1 The act is amended by adding the following section:
"'Maximum increase in assessed value
"'19.1.1(1) Despite any other provision of this act, the assessed value of each property for the 2010 and every subsequent taxation year shall not exceed the assessed value of the property for the 2009 taxation year by more than five per cent.
"'Termination of cap
"'(2) Subsection (1) continues to apply to each property until such time as the property is transferred to a person other than a spouse or child of the person who owned the property on January 1, 2010.'"
The Chair (Mr. Pat Hoy): I'm going to rule this motion out of order, as it is beyond the scope of the bill.
Mr. Toby Barrett: I'll defer to the Chair on that one.
The Chair (Mr. Pat Hoy): Continue with your next one.
Mr. Toby Barrett: The next amendment is:
"4.1 The act is amended by adding the following section:
"'Maximum increase in assessed value
"'19.1.1(1) Despite any other provision of this act, the assessed value of each property for the 2010 and every subsequent taxation year shall not exceed the assessed value of the property for the 2009 taxation year by more than the percentage prescribed by the regulations.
"'Termination of cap
"'(2) Subsection (1) continues to apply to each property until such time as the property is transferred to a person other than a spouse or child of the person who owned the property on January 1, 2010.'"
The Chair (Mr. Pat Hoy): This motion I will rule out of order, as it is beyond the scope of the bill.
We'll continue with the next motion.
Mr. Toby Barrett: "4.2 The act is amended by adding the following section:
"'Assessed value of home not affected by repairs, etc.
"'19.1.2 Despite any other provision of this act, the assessed value of a property shall not be increased by reason of any increase in the current value of the property resulting from repairs, alterations, improvements or additions to the property having a value of not more than $25,000.'"
The Chair (Mr. Pat Hoy): I rule this motion out of order, as it is beyond the scope of the bill.
Your next one?
Mr. Toby Barrett: "4.2 The act is amended by adding the following section:
"'Reduction in assessed value of home for seniors and disabled persons
"'19.1.3 Despite any other provision of this act, the assessed value of a property in the residential property class shall be reduced by $10,000 if the property is the principal residence of a person who has reached the age of 65 years or who is disabled.'"
The Chair (Mr. Pat Hoy): I'm going to rule this motion out of order, as it is beyond the scope of the bill.
Now we are at schedule A, sections 5 through 9 inclusive. There are no amendments to schedule A, sections 5 through 9 inclusive. Shall sections 5 through 9 carry? All in favour? Carried.
In our binders we now come to PC motion number 7. Mr. Barrett.
Mr. Toby Barrett: I move that subsections 39.1(1) and (2) of the Assessment Act, as set out in section 10 of schedule A to the bill, be struck out and the following substituted:
"Reconsideration of assessment
"39.1(1) For 2009 and subsequent taxation years, the owner of a property or a person who has received or would be entitled to receive a notice of assessment under this act may request the assessment corporation to reconsider any matter relating to the assessment or classification of the property, including any matter that could form the basis of an appeal under subsection 40(1), no later than September 30 of the taxation year in respect of which the request is made."
The Chair (Mr. Pat Hoy): Any comment?
Mr. Toby Barrett: I'd just comment briefly that in February 2009 most property owners will receive their tax bills based on the 2008 taxes, and the new assessments affecting the 2009 actual taxes will not yet have been processed by any municipality. So this PC amendment essentially requests that we move the deadline for appeal back until September 30.
Mr. Wayne Arthurs: Very briefly, certainly the government and the minister believe that a period of a minimum of four months from the time one receives their notice in which to consider an appeal process or review process is adequate. The deadline of March 31, we believe, is an appropriate one.
The Chair (Mr. Pat Hoy): Any other comment?
Mr. Michael Prue: I will be supporting the Conservative motion, although from the statement of the parliamentary assistant I think there's not much chance of it passing. It's merely an extension of an appeal time, and I think that citizens, not having had this experience in the last several years due to the freeze, would more than likely welcome such an extension.
Mr. Toby Barrett: The parliamentary assistant does draw the committee's attention to that deadline of March 31, but the final tax bill showing the full force of any tax changes really doesn't come out until April or May, so the homeowner will not be able to file a reconsideration because of that March 31 deadline. Hence we ask for this September 30 deadline for appeal.
The Chair (Mr. Pat Hoy): Any other comment? Hearing none, all in favour? Opposed? The motion is lost.
PC motion number 8.
Mr. Toby Barrett: I move that subsections 39.1(7) and (8) of the Assessment Act, as set out in section 10 of schedule A to the bill, be struck out and the following substituted:
"Notice of reconsideration
"(7) For 2009 and subsequent taxation years, the assessment corporation shall mail to the person making a request under subsection (1) or (3) the results of its reconsideration within 180 days of the request being made."
The Chair (Mr. Pat Hoy): Any comment? Hearing none, all in favour? Opposed? The motion is lost.
PC motion 9.
Mr. Toby Barrett: I move that subsections 40(5), (6) and (7) of the Assessment Act, as set out in section 11 of schedule A to the bill, be struck out and the following substituted:
"Last day for appealing, if request made under section 39.1
"(5) For 2009 and subsequent taxation years, if a person has made a request for reconsideration in respect of a property under section 39.1, whether or not the person is required to do so as a precondition of appeal under subsection (3), the last day for the person to appeal for a taxation year is the later of March 31 of the following taxation year and 90 days after the notice by the assessment corporation under subsection 39.1(7) has been mailed.
"Same, if precondition under subsection (3) does not apply
"(6) For 2009 and subsequent taxation years, if a person has not made a request for reconsideration in respect of a property under section 39.1 and is not required to do so as a precondition of appeal under subsection (3), the last day for the person to appeal for a taxation year is March 31 of the following taxation year.
"Exception, if time for returning roll is extended
"(7) If the assessment corporation extends the time for returning the assessment roll for a taxation year after 2008, the last day for appealing in respect of a property for a person to whom the precondition of appeal in subsection (3) does not apply is 90 days after the return of the assessment roll or March 31 of the following taxation year, whichever is later."
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The Chair (Mr. Pat Hoy): I'm going to interrupt you there. I got ahead of myself. We have to return to the last schedule and vote on it.
I'll ask the committee, shall schedule A, section 10, carry? All in favour? Carried.
I apologize for that.
Now we're talking about the motion put forth by Mr. Barrett, section 11. Any comment?
Mr. Toby Barrett: Yes, thank you, Chair. This particular motion is designed to ensure that once you get your property assessment notice, you have, in this case, until March 31 of the next tax year to appeal or within 90 days of receiving the notice, whichever is later.
Mr. Wayne Arthurs: Mr. Chairman, the government believes that the current provisions are appropriate, providing a consistent 90-day time frame after the receipt of the RFR decision.
The Chair (Mr. Pat Hoy): Further comment? Hearing none, all in favour? Opposed? The motion is lost.
Shall schedule A, section 11, carry? All in favour? Carried.
There are no amendments for schedule A, sections 12 through 21, inclusive. All in favour? Opposed? Carried.
Shall schedule A carry? All in favour? Carried.
Now we're at the PC motion on page 10.
Mr. Toby Barrett: I move that section 67 of the Capital Investment Plan Act, 1993, as set out in section 1 of schedule B to the bill, be amended by adding the following subsection:
"Approval of the Legislature
"(1.1) Despite subsection (1), the Minister of Finance shall not make a grant under this section unless,
"(a) the Minister of Finance lays before the Legislative Assembly a report setting out the name of the proposed recipient, the amount of the proposed grant and the intended purpose for which it is proposed that the grant be made; and
"(b) the payment of the grant by the Minister of Finance is approved by the Legislative Assembly on motion."
The Chair (Mr. Pat Hoy): Any comment?
Mr. Toby Barrett: It's just essentially asking for a requirement that the finance minister lay a report before the House setting out the details of the approved grant and get the approval of the members before paying such a grant.
Mr. Wayne Arthurs: Mr. Chairman, the minister would not make a grant unless it was approved by the assembly and their processes for that, including the payments being approved through the estimates process as well as reporting on expenditures through the public accounts process.
Mr. Michael Prue: My reading of this is that this would involve school boards, local health systems, colleges of applied arts and technology, universities, municipalities and children's aid societies. Would it involve other grants to groups that did not include these?
Mr. Toby Barrett: Quite honestly, I can't give you an answer on that.
Mr. Michael Prue: Okay, thank you.
The Chair (Mr. Pat Hoy): Any other comment? Hearing none, all in favour? Opposed? The motion is lost.
Shall schedule B, section 1, carry? All in favour? Carried.
There are no amendments to schedule B, section 2. Shall schedule B, section 2, carry? All in favour? Opposed? Carried.
Shall schedule B carry? All in favour? Opposed? Carried.
There are no amendments to the next schedule. Shall schedule C, sections 1 through 3, inclusive, carry? All in favour? Opposed? Carried.
Now we're at the PC motion on page 11.
Mr. Toby Barrett: I move that clause 309(3)(a) of the City of Toronto Act, 2006, as set out in section 4 of schedule C to the bill, be struck out and the following substituted:
"(a) requiring that the information that must or may be included on or with tax bills under section 308 be determined on consultation between the city and the minister;"
The Chair (Mr. Pat Hoy): Any comment?
Mr. Toby Barrett: Again, the city, referring to the city of Toronto; it would require that the minister and the city of Toronto consult to determine the required information on tax bills.
The Chair (Mr. Pat Hoy): Any other comment?
Mr. Wayne Arthurs: Although the province wants to continue its relationship and partnership with municipalities, and the city of Toronto in particular, in the particular indication of this motion, it also needs the capacity to be able to put information of importance to constituents as it relates to the province within that tax bill.
Mr. Michael Prue: I'm not sure of the purpose or intent of this particular motion. I don't understand why it's here. When I read what is here, and this addition, it seems to be singling out Toronto. Is that the purpose of it?
Mr. Toby Barrett: I would like to include Norfolk county and Haldimand county and some others, but the way it was written up, I know that the City of Toronto Act is specifically referenced in this legislation. Beyond that, I'm a strong believer in public consultation.
The Chair (Mr. Pat Hoy): Any other comment?
Mr. Toby Barrett: Apparently, there is a similar amendment for the Municipal Act. We want this similar amendment with respect to the City of Toronto Act.
The Chair (Mr. Pat Hoy): Any other comment? Hearing none, all in favour? Opposed? The motion is lost.
Shall schedule C, section 4, carry? All in favour? Carried.
Schedule C, sections 5 through 9 inclusive, have no amendments. Shall schedule C, sections 5 through 9 inclusive, carry? All in favour? Opposed? Carried.
Shall schedule C carry? All in favour? Opposed? Carried.
Now we have the NDP motion on page 12.
Mr. Michael Prue: Mr. Chair, at this point I am seeking the concurrence of committee to withdraw motions 12 through 19 inclusive.
The Chair (Mr. Pat Hoy): Are we agreed? Agreed.
Mr. Michael Prue: I see the smile on the Chair's face here.
The Chair (Mr. Pat Hoy): I was thinking of my grandson; that's all.
Mr. Michael Prue: Well, of course. I know.
The Chair (Mr. Pat Hoy): Would you confirm, Mr. Prue, that motions 12 through 19 inclusive, are withdrawn?
Mr. Michael Prue: Yes, all of them are withdrawn.
The Chair (Mr. Pat Hoy): Shall schedule D, section 1, carry? All in favour? Opposed? Carried.
Shall schedule D, section 2, carry? All in favour? Carried.
Shall schedule D, section 3, carry? All in favour? Carried.
Shall schedule D, section 4, carry? All in favour? Carried.
Shall schedule D carry? All in favour? Carried.
Shall schedule E, section 1, carry? All in favour? Carried.
Now we are at PC motion 20, schedule E. Mr. Barrett.
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Mr. Toby Barrett: I move that schedule E to the bill be amended by adding the following section:
"1.1 The act is amended by adding the following section:
"'Tax rate for 2008 and later years
"'38.0.1 Despite clause 38(2)(e), the specified basic rate of tax of a corporation for every taxation year ending after December 31, 2007 is 12 per cent.'"
The Chair (Mr. Pat Hoy): Any comment?
Mr. Toby Barrett: There is certainly evidence in the past that investment does move to lower-taxed jurisdictions. I'm just looking at today's Report on Business in the Globe and Mail: "Ontario in Midst of 'Very Mild' Recession." This is data pulled together by the U of T's Institute for Policy Analysis on provincial growth in the fourth quarter of last year: "The forecasters say Ontario's economy contracted 0.4% in the first quarter of this year from the previous quarter. The province is in the midst of shrinking another 0.1% in the second quarter from the first." I won't go on. I'll just summarize by saying that tax cuts create jobs.
The Chair (Mr. Pat Hoy): Further comment?
Mr. Michael Prue: It's just a question. As I understand this, you are seeking to reduce the corporate level of taxation from 14% down to 12% as a result of this motion. How much would that cost the treasury of the province of Ontario?
Mr. Toby Barrett: That's a good question. I don't know whether the parliamentary assistant would have any projection on that. We like to think of that as how that will boost the economy in Ontario, but I know people are always concerned about revenue that comes into the public sector.
Mr. Michael Prue: I'm concerned about the revenue because it would go to schools or hospitals or welfare or whatever. How much is this?
Mr. Wayne Arthurs: The government does have a very specific strategy in respect to the reduction of business taxation, the capital tax, particularly those rates in the manufacturing and resource sectors, currently a business education tax with an accelerated business education tax reduction in northern Ontario, capital cost allowance and other matters, but we don't support the motion before us for a reduction in the corporate income tax.
Mr. Toby Barrett: Just further to the NDP question, as I indicated, tax cuts create jobs—more people working, more people paying taxes. Again, on the principle that investment also, in contrast to what I said previously, as evidenced, moves to lower-taxed jurisdictions—more business, more corporate taxes coming in—in addition to the working families that are supported by these companies.
The Chair (Mr. Pat Hoy): Any other comment? Hearing none, all in favour? Opposed? The motion is lost.
There are no amendments in the following schedule E sections, 2 to 10 inclusive. Shall schedule E, sections 2 to 10 inclusive carry? All in favour? Carried.
Now PC motion 21.
Mr. Toby Barrett: On behalf of the opposition, I wish to move that subsection 11(1) of schedule E to the bill, be struck out and the following substituted:
"11.(1) Subsection 66(1.1) of the act is repealed and the following substituted:
"'Capital tax rate
"'(1.1) The capital tax rate for a corporation for a taxation year is 0.3 per cent multiplied by the ratio of the number of days in the taxation year that are before January 1, 2007 to the total number of days in the taxation year.'"
The Chair (Mr. Pat Hoy): Any comment?
Mr. Toby Barrett: As this bill is presently written, the capital tax was eliminated for the manufacturing and resource sectors. We wish to take that further.
The Chair (Mr. Pat Hoy): Any other comment? Hearing none, all in favour? Opposed? The motion is lost.
Number 22.
Mr. Toby Barrett: Still on schedule E, I move that subsection 66(1.2) of the Corporations Tax Act, as set out in subsection 11(2) of schedule E to the bill, be struck out and the following substituted:
"No tax payable after December 31, 2006
"(1.2) No tax is payable under this part by a corporation that is not a financial institution for a taxation year ending after December 31, 2006."
The Chair (Mr. Pat Hoy): Any comment?
Mr. Wayne Arthurs: Yes. The government does have a very specific strategy for the elimination of that capital tax. It's being quite aggressive in that regard, particularly this year and retroactively with respect to the manufacturing and resource sectors.
Mr. Michael Prue: I just want to make sure that I'm clear on what the purport of this motion is. It appears that the Conservative motion is taking back the date—the motion in the bill is December 31, 2008. You're giving a two-year tax windfall for past taxes, paid back to 2006. Is that what this is?
Mr. Toby Barrett: That's my understanding. This would be for all corporations but not financial institutions. The previous amendment, by the way, did include financial institutions; this one does not, just by way of clarification.
The Chair (Mr. Pat Hoy): Any other comment? Hearing none, all in favour? Opposed? The motion is lost.
PC motion on page 23.
Mr. Toby Barrett: I move that the definition of "G" in subsection 66(4.1) of the Corporations Tax Act, as set out in subsection 11(3) of schedule E to the bill, be struck out and the following substituted:
"'G' is 0.6 per cent multiplied by the ratio of the number of days in the taxation year that are before January 1, 2007, to the total number of days in the taxation year, and"
It ends there.
The Chair (Mr. Pat Hoy): Any comment? Hearing none, all in favour? Opposed? The motion is lost.
PC motion on page 24.
Mr. Toby Barrett: I move that the definition of "J" in subsection 66(4.2) of the Corporations Tax Act, as set out in subsection 11(4) of schedule E to the bill, be struck out and the following substituted:
"'J' is 0.9 per cent multiplied by the ratio of the number of days in the taxation year that are before January 1, 2007, to the total number of days in the taxation year, and"
The Chair (Mr. Pat Hoy): All in favour? Opposed? The motion is lost.
PC motion 25.
Mr. Toby Barrett: I move that the definition of "L" in subsection 66(4.3) of the Corporations Tax Act, as set out in subsection 11(5) of schedule E to the bill, be struck out and the following substituted:
"'L' is 0.72 per cent multiplied by the ratio of the number of days in the taxation year that are before January 1, 2007, to the total number of days in the taxation year, and"
The Chair (Mr. Pat Hoy): Any comment?
Mr. Michael Prue: The difference between what is in the bill and what's being proposed: I don't see it.
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Mr. Toby Barrett: I'm not clear myself, colleague.
Chair, I've gotten behind in going through the bill. I would like to ask legislative counsel to perhaps explain this one and the previous one.
The Chair (Mr. Pat Hoy): Very well.
Ms. Catherine Macnaughton: The provisions relate to the calculation of the tax. There's a change in rate for different periods of time. If you look at "L" in the act now, which is in sub (5), it's the sum of two amounts, depending upon what period of time the tax applies to. The effect of the amendment is to remove clause (b) of "L," which would be for the period of 2007-08, so that the capital tax would end at the end of December 2006. So it's consistent with the other amendments that Mr. Barrett has proposed.
The Chair (Mr. Pat Hoy): Thank you.
Mr. Michael Prue: I wasn't clear that (b) had been taken out as a result of this because it reads exactly the same as (a) does now.
Ms. Catherine Macnaughton: It reads the same as (a), but all of "L" is being—
Mr. Michael Prue: You see, it wasn't the deletion of (b), which would have been simple for me to understand.
Ms. Catherine Macnaughton: If we just struck out (b).
Mr. Michael Prue: Okay, that's what it does, it strikes out (b).
Ms. Catherine Macnaughton: The effect of it is it takes out (b).
Mr. Michael Prue: All right.
Ms. Catherine Macnaughton: And with all of the other amendments that Mr. Barrett has, the effect is to take out (b) in each one of those calculations.
The Chair (Mr. Pat Hoy): Thank you very much. Any other comment? Hearing none, all in favour? Opposed? The motion is lost.
PC motion, page 26.
Mr. Toby Barrett: I move that subsection 66(4.4) of the Corporations Tax Act, as set out in subsection 11(6) of schedule E to the bill, be struck out and the following substituted:
"No tax payable after December 31, 2006 by financial institution
"(4.4) No tax is payable under this part by a financial institution for a taxation year ending after December 31, 2006."
The Chair (Mr. Pat Hoy): Any comment?
Mr. Michael Prue: I just want to be clear what the intent is. This is to allow the banks that made billions of dollars in profit over the last couple of years to not pay taxes under this section. You want me to vote to give extra money to CIBC, TD and Royal Bank because they didn't make enough?
Mr. Toby Barrett: And other financial institutions.
Mr. Michael Prue: Okay, thank you. All right. I just want to know what this is for.
The Chair (Mr. Pat Hoy): Any other comment? Hearing none, all in favour? Opposed? The motion is lost.
Shall schedule E, section 11, carry? All in favour? Opposed? Carried.
Now we have PC motion, page 27. Mr. Barrett.
Mr. Toby Barrett: I move that the definition of "D" in clause 66.1(3.2)(b) of the Corporations Tax Act, as set out in section 12 of schedule E to the bill, be struck out and the following substituted:
"'D'" is 0.9 per cent multiplied by the ratio of the number of days in the taxation year that are before January 1, 2007 to the total number of days in the taxation year."
The Chair (Mr. Pat Hoy): Any comment? Hearing none, all in favour? Opposed? The motion is lost.
Shall schedule E, section 12, carry? All in favour? Carried.
There are no amendments to the following section. Shall schedule E, section 13, carry? All in favour? Opposed? Carried.
Shall schedule E, section 14, carry? All in favour? Carried.
Shall schedule E, section 15, carry? All in favour? Carried.
Shall schedule E carry? All in favour? Opposed? Carried.
Shall schedule F, sections 1 through 3, inclusive, carry? All in favour? Carried.
Shall schedule F carry? All in favour? Opposed? Carried.
Shall schedule G, sections 1 through 6, inclusive, carry? All in favour? Opposed? Carried.
Shall schedule G carry? All in favour? Opposed? Carried.
Shall schedule H, sections 1 through 3, inclusive, carry? All in favour? Opposed? Carried.
Shall schedule H carry? All in favour? Opposed? Carried.
Shall schedule I, sections 1 through 6, inclusive, carry? All in favour? Opposed? Carried.
Shall schedule I carry? All in favour? Opposed? Carried.
Shall schedule J, sections 1 through 7, inclusive, carry? All in favour? Opposed? Carried.
Shall schedule J carry? All in favour? Opposed? Carried.
Shall schedule K, sections 1 through 4, inclusive, carry? All in favour? Opposed? Carried.
Shall schedule K carry? All in favour? Opposed? Carried.
Now we've come to PC motion 28.
Mr. Toby Barrett: I move that subsection 3(3) of the Liquor Control Act, as set out in subsection 1(1) of schedule L to the bill, be struck out and the following substituted:
"Power of board to borrow
"(3) With the approval of the minister and the Minister of Finance"—now, I have a question here: "the minister and the Minister of Finance"—I'm not sure of the wording of our motion. It just says "the minister," but it doesn't say which one.
Mr. Michael Prue: The bill says the same: the minister responsible for the Liquor Control Board.
Mr. Toby Barrett: That would be our understanding of that?
Mr. Wayne Arthurs: Yes.
Mr. Toby Barrett: Okay. "With the approval of"—that minister—"the minister and the Minister of Finance and on the recommendation of the Standing Committee on Finance and Economic Affairs, the board may borrow money on its credit."
The Chair (Mr. Pat Hoy): Any comment?
Mr. Michael Prue: I just want to make sure: This is to give extra work to the committee so that the committee would make that recommendation and pass it along to the appropriate ministers?
Mr. Toby Barrett: This would empower our committee and would provide more accountability and consultation if we approve, with permission of the various ministers mentioned, borrowing. As the bill currently stands, the LCBO has the authority to borrow funds, and conditions or terms can be attached to that kind of borrowing by the Minister of Finance or the Minister of Public Infrastructure Renewal.
Mr. Wayne Arthurs: It would be our view that the approvals currently required by the Minister of Finance and, at this time, the Minister of Public Infrastructure Renewal, are appropriate balances between the government's role and the commercial responsibilities of the Liquor Control Board.
The Chair (Mr. Pat Hoy): Any other comment? Hearing none, all in favour? Opposed? The motion is lost.
We have a new motion that was presented this morning, 28.1. It's a PC motion.
Mr. Toby Barrett: This one is still the Liquor Control Act, schedule L, subsection 1(2).
I move that subsection 3(5) of the Liquor Control Act, as set out in subsection 1(2) of schedule L to the bill, be amended by striking out "shall" and substituting "may".
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The Chair (Mr. Pat Hoy): Any comments?
Mr. Toby Barrett: I just received this on my fax machine this morning, and I'm assuming—and maybe legislative counsel could assist—it's by way of justification of the same sentiments as I described in the previous amendment. Again, I'm at a disadvantage, because I—
Mr. Michael Prue: It would appear to me that what the law says here is quite clear. If the board wants to make a major capital expenditure, it shall borrow the necessary funds. What this is saying is that it may borrow the necessary funds in accordance with the section. So I don't know where else they would borrow it, if this is granted. If they want it, the "shall" means they must, and the "may" is giving them an option. I don't know where their other option is.
The Chair (Mr. Pat Hoy): Any other comment?
Mr. Michael Prue: I just don't understand what this is attempting to do, because I don't know what other source of funds they could possibly use. If they may use this or may this, I can understand that.
Mr. Toby Barrett: As I understand, this would give the LCBO the option to use some of their existing funds for capital expenditures, rather than being put in the corner of being obliged to borrow.
Mr. Michael Prue: So what this is doing is allowing the LCBO to do what it has always done, and use monies from its own revenue to finance capital projects?
Mr. Toby Barrett: That's my understanding.
Mr. Michael Prue: Oh, all right.
The Chair (Mr. Pat Hoy): Any further comment? Hearing none, all in favour? Opposed? The motion is lost.
Shall schedule L, section 1, carry? All in favour? Opposed? Carried.
Shall schedule L, section 2, carry? All in favour? Opposed? Carried.
Shall schedule L, section 3, carry? All in favour? Opposed? Carried.
Shall schedule L carry? All in favour? Opposed? Carried.
Shall schedule M, sections 1 through 2, inclusive, carry? All in favour? Opposed? Carried.
Shall schedule M carry? All in favour? Opposed? Carried.
Shall schedule N, sections 1 through 2, inclusive, carry? All in favour? Opposed? Carried.
Shall schedule N carry? All in favour? Opposed? Carried.
Shall schedule O, sections 1 through 3, inclusive, carry? All in favour? Opposed? Carried.
PC motion 29. Mr. Barrett.
Mr. Toby Barrett: This is section 4, schedule O, Municipal Act, 2001. I think I have the right amendment.
I move that clause 344(3)(a) of the Municipal Act, 2001, as set out in section 4 of schedule O to the bill, be struck out and the following substituted:
"(a) requiring that the information that must or may be included on or with tax bills under section 343 be determined on consultation between the municipality and the minister."
The Chair (Mr. Pat Hoy): Any comment?
Mr. Toby Barrett: This amendment would require all Ontario municipalities and the minister to determine the required info on tax bills by consultation. I know we had a previous amendment specifically to the City of Toronto Act in the city of Toronto. This, as I understand, would cover all Ontario municipalities, including the city of Toronto, although that's probably already covered by the previous amendment.
The Chair (Mr. Pat Hoy): Any other comment?
Mr. Wayne Arthurs: It's my understanding that the form and content of the tax bills were originally regulated by the province as early as 2001, and the province needs to continue to have flexibility in regard to providing Ontarians with information by insert. We'll certainly continue our ongoing discussions with our municipal partners, but the province needs the capacity to be able to act in the interests of Ontarians broadly.
The Chair (Mr. Pat Hoy): Any other comment? Hearing none, all in favour? Opposed? The motion is lost.
Shall schedule O, section 4, carry? All in favour? Opposed? Carried.
Schedule O, sections 5 through 9 inclusive: Shall they carry? All in favour? Opposed? Carried.
Shall schedule O carry? All in favour? Opposed? Carried.
Schedule P, section 1. Shall it carry? All in favour? Opposed? Carried.
Now we are on page 30, a PC motion.
Mr. Toby Barrett: This refers to the Ontario Loan Act, 2008.
I move that subsection 2(1) of the act set out in schedule P be struck out and the following substituted:
"Expiry
"(1) No order in council authorizing borrowing under this act shall be made after March 31, 2009."
The Chair (Mr. Pat Hoy): Any comment? Hearing none, all in favour? Opposed? The motion is lost.
PC motion 31.
Mr. Toby Barrett: With respect to the Ontario Loan Act, 2008, I move that subsection 2(2) of the act set out in schedule P to the bill be amended by striking out each reference to "December 31, 2011" in the portion before clause (a) and by substituting "March 31, 2009" in each case.
The Chair (Mr. Pat Hoy): Any comment? Hearing none, all in favour? Opposed? The motion is lost.
Shall schedule P, section 2, carry? All in favour? Opposed? Carried.
Shall schedule P, section 3, carry? All in favour? Carried.
Shall schedule P, section 4, carry? All in favour? Carried.
Shall schedule P carry? All in favour? Opposed? Carried.
Schedule Q, section 1. PC motion on page 32.
Mr. Toby Barrett: I move that section 1 of schedule Q to the bill be struck out and the following substituted:
"1. Subsection 4(3) of the Ontario Lottery and Gaming Corporation Act, 1999 is repealed and the following substituted:
"'Power of the corporation to borrow
"'(3) With the approval of the minister'"—that would be the Minister of Public Infrastructure Renewal, if I'm not mistaken. Does that make sense?—"'and the Minister of Finance and on the recommendation of the Standing Committee on Finance and Economic Affairs, the corporation may borrow money on its credit or give security against property.
"'Borrowing, approval
"'(3.1) An approval under subsection (3) may be subject to such terms and conditions as the minister and the Minister of Finance consider advisable.'"
The Chair (Mr. Pat Hoy): Any comment?
Mr. Toby Barrett: Again, as the legislation is currently written, the ministers of both finance and public infrastructure renewal can attach terms and conditions to approvals. The sentiment here is to provide some additional empowerment to this standing committee.
Mr. Wayne Arthurs: The view of the government would be the same as with respect to the earlier motion as it is related to the liquor board, and that is that the responsibilities and authorities requiring approval of the Minister of Finance and, currently, the Minister of Public Infrastructure Renewal are appropriate balances between the government role, the oversight necessary and the commercial activities of the OLGC.
The Chair (Mr. Pat Hoy): Other comment? Hearing none, all in favour? Opposed? The motion is lost.
Shall schedule Q, section 1, carry? All in favour? Opposed? Carried.
Now we have this additional one that came in this morning, a PC motion, 32.1.
1010
Mr. Toby Barrett: I move that subsection 13.1(1) of the Ontario Lottery and Gaming Corporation Act, 1999, as set out in section 2 of schedule Q to the bill, be amended by striking out "shall" and substituting "may".
The Chair (Mr. Pat Hoy): Any comment? Hearing none, all in favour? Opposed? The motion is lost.
Shall schedule Q, section 2, carry? All in favour? Opposed? Carried.
Shall schedule Q, section 3, carry? All in favour? Carried.
Shall schedule Q, section 4, carry? All in favour? Carried.
Shall schedule Q, section 5, carry? All in favour? Opposed? Carried.
Shall schedule Q carry? All in favour? Carried.
Shall schedule R, sections 1 through 3, inclusive, carry? All in favour? Carried.
Now we're on page 33, a PC motion.
Mr. Toby Barrett: I move that paragraph 69 of subsection 7(1) of the Retail Sales Act, as set out in subsection 4(2) of schedule R to the bill, be struck out and the following substituted:
"69. Bicycles, as defined in the Highway Traffic Act, purchased after November 30, 2007 and before January 1, 2011 at a price of $2,000 or less, and bicycle safety equipment, including bicycle helmets, purchased after November 30, 2007 and before January 1, 2011."
The Chair (Mr. Pat Hoy): Any comment?
Mr. Michael Prue: It's more of a question than a comment. It seems that the change here is bicycles under $1,000 are in the bill—you're moving it to $2,000. I'm wondering, how many extra bicycles do you think are going to be sold between $1,000 and $2,000? I know I can go into a bicycle shop and maybe find something made out of titanium, hand-tooled and everything else, but how many would this possibly involve, and why are you doing it for such a luxury bicycle?
Mr. Toby Barrett: Actually, when I first read this bill, I thought maybe it was an NDP bill.
Mr. Michael Prue: No. I agree with bicycles, but I don't know how many bicycles cost more than $1,000. I've never gone out to price one, but mostly, when I see them in stores, it's $100, $200 or $300 for a bicycle. A $2,000 bicycle I can't even imagine. It would have to be really hand-tooled and custom-made, in my view.
Mr. Toby Barrett: The sentiment of this, I assume, is just to cover off all bicycles. I wouldn't personally pay more than—again, I'll pay a hundred bucks for a car. It's an amendment to raise the price to $2,000 to cover anybody who does get dinged or for some reason pays more than $1,000 for a bicycle to take advantage of the tax exemption.
Mr. Wayne Arthurs: I think something like 90% plus of bikes sold in Ontario are under $1,000. I think we've captured the vast majority. Like the member who moved it, I thought maybe Jack Layton had consulted with the PC caucus on drafting the motion.
Mr. Michael Prue: Have you ever seen Jack Layton's bicycle, the double-decker that he rides with Olivia? I don't think—I know it doesn't cost $1,000.
Mr. Toby Barrett: I just totalled my car on the QEW on Monday, and it's worth less than $1,000. I'm not kidding.
Mr. Wayne Arthurs: I've seen your car.
Mr. Toby Barrett: I'm not kidding. That was the other car. This is my wife's car, the new car.
Mr. Michael Prue: Does anybody have any information on how many bicycles will be sold in Ontario that cost in excess of $1,000 that this will capture?
Mr. Toby Barrett: Did I not hear 10%, maybe?
Mr. Wayne Arthurs: My comment was that the information we have is that in the neighbourhood of or more than 90% of bicycles sold in Ontario are sold below the $1,000 threshold. The vast majority by far are being captured with this exemption.
Mr. Toby Barrett: Yes. We will continue to be green as a party.
The Chair (Mr. Pat Hoy): I'll call the question. All in favour? Opposed? The motion is lost.
Shall schedule R, section 4, carry? All in favour? Opposed? Carried.
Shall schedule R, sections 5 to 7, inclusive, carry? All in favour? Opposed? Carried.
Shall schedule R carry? All in favour? Carried.
Shall schedule S, sections 1 through 4, inclusive, carry? All in favour? Opposed? Carried.
NDP motion on page 34.
Mr. Michael Prue: I move that subsection 22.(2) of the Taxation Act, 2007, as set out in section 5 of schedule S to the bill, be struck out and the following substituted:
"Interpretation, maximum tax credit
"(2) The maximum tax credit permitted for a taxation year in respect of investments made by an individual in corporations registered under part III of the Community Small Business Investment Funds Act is, for each taxation year ending after 2008, unless otherwise prescribed, the sum of,
"(a) the lesser of $1,125 and the amount equal to 15 per cent of the equity capital received from the taxpayer during that taxation year or during the first 60 days of the following year by the corporations on the issue of Class A shares; and
"(b) the lesser of $375 and the amount equal to five per cent of the equity capital received from the taxpayer during that taxation year or during the first 60 days of the following year by the corporations on the issue of Class A shares, if the shares were issued by the corporations as research-oriented investment funds under subsection 16.1(2) of the Community Small Business Investment Funds Act."
Can I just confirm this was part of—that should have been withdrawn.
Interjection.
Mr. Michael Prue: Yes. I'm sorry; I'm just reading it now. This as well should have been withdrawn with the others that were withdrawn earlier. It's all related to the same.
The Chair (Mr. Pat Hoy): We'll consider this motion withdrawn.
Shall schedule S, section 5, carry? All in favour? Carried.
PC motion 35.
Mr. Ted Arnott: I move that schedule S to the bill be amended by adding the following section:
"5.1 Subsection 29(2) of the act is repealed and the following substituted:
"'Basic rate of tax
"'(2) A corporation's basic rate of tax for a taxation year is 12 per cent.'"
By way of explanation, as we know, the current corporate tax rate is 14 per cent, and this amendment would allow the general corporate income tax rate for 2009 and later to be reduced to 12%. This is consistent with what our party has been saying for quite some time now in the lead-up to the budget and since that time.
Mr. Michael Prue: I asked Mr. Barrett this question earlier today: "Can you indicate to me how much that will cost the treasury of the province of Ontario?" He could not answer, by reducing the corporate tax rate from 14% down to 12%, what amount of money is involved here.
Mr. Ted Arnott: It is our belief that a reduction in the corporate income tax rate right now is absolutely essential to stimulate the economy, and that it would have a net economic benefit for the province of Ontario.
Mr. Michael Prue: Is this the same rationale that Mr. Harris used to talk about: Corporate tax rate reductions increase revenue to the province? Is that the same—
Mr. Ted Arnott: I'm familiar with Mr. Harris and his arguments of the past.
Mr. Michael Prue: And is this the same argument?
Mr. Ted Arnott: It's 2008 and we're entering into a recession. We believe that there's an absolute necessity to immediately stimulate the economy in this—
Mr. Michael Prue: No, I'm not arguing against the need to stimulate the economy. I'm just trying to figure out how much it's going to cost the revenue to the province of Ontario in this fiscal year.
Mr. Ted Arnott: And our party would contend and respond that we believe there would be a net economic benefit to the province if indeed this amendment were passed and adopted as policy by the government of Ontario.
Mr. Michael Prue: Okay, thank you.
Mr. Wayne Arthurs: My comments would remain the same as or similar to ones made earlier during this committee hearing, that we have a strategy in respect to business tax reduction, which includes a capital tax elimination, the current elimination retroactively for the manufacturing and resource sectors, the business education tax reductions phased in, as well as accelerated in northern Ontario. So it's a fairly comprehensive strategy, targeting areas that business has been most adamant about and wanting to see as a first position to eliminate, and we're moving aggressively on that front.
The Chair (Mr. Pat Hoy): Any other comment?
Mr. Ted Arnott: I would ask for a recorded vote.
Ayes
Arnott.
Nays
Aggelonitis, Arthurs, Lalonde, Pendergast, Prue, Sousa.
The Chair (Mr. Pat Hoy): The motion is lost.
Shall schedule S, sections 6 through 17, inclusive, carry? All in favour? Carried.
Now we're on page 36, a PC motion.
Mr. Ted Arnott: I move that section 18 of schedule S to the bill be struck out and the following substituted:
"18. Section 72 of the act is repealed."
The Chair (Mr. Pat Hoy): Any comment?
Mr. Ted Arnott: This would repeal the capital tax for all corporations for the years 2009 and onwards.
Mr. Wayne Arthurs: The government strategy, Mr. Chairman, remains the same. The acceleration of the capital tax elimination by July 1, 2010, and the current activity particularly around manufacturing and resources not only makes that more expeditious; it actually makes it retroactive.
The Chair (Mr. Pat Hoy): Any other comment?
Mr. Ted Arnott: I would ask for a recorded vote.
Ayes
Arnott.
Nays
Aggelonitis, Arthurs, Lalonde, Pendergast, Prue, Sousa.
The Chair (Mr. Pat Hoy): The motion is lost.
Shall schedule S, section 18, carry? All in favour? Opposed? Carried.
We have a PC motion, page 37.
Mr. Ted Arnott: I move that section 19 of schedule S to the bill be struck out and the following substituted:
"19. Sections 73, 74, 75, 76, 77, 78, 79, 80 and 81 of the act are repealed."
The Chair (Mr. Pat Hoy): I'll rule this motion out of order, as it deals with sections that are not open in the bill.
Mr. Ted Arnott: Thank you, Mr. Chair.
The Chair (Mr. Pat Hoy): Shall schedule S, section 19, carry? All in favour? Opposed? Carried.
Now page 38. Mr. Arnott.
Mr. Ted Arnott: Could I ask for a two-minute recess, Mr. Chair?
The Chair (Mr. Pat Hoy): Do we have unanimous consent for a two-minute recess? Agreed.
The committee recessed from 1024 to 1025.
The Chair (Mr. Pat Hoy): The committee will resume. We were about to approach the motion on page 38. Mr. Arnott.
Mr. Ted Arnott: Yes, Mr. Chair. The remaining Conservative motions are housekeeping amendments with respect to our previous amendment, which was to request the immediate elimination of capital—
Interjection.
Mr. Ted Arnott: I'm going to withdraw the other Conservative motions.
The Chair (Mr. Pat Hoy): Which ones?
Mr. Ted Arnott: This one that we're dealing with right now.
The Chair (Mr. Pat Hoy): You'll withdraw 38?
Mr. Ted Arnott: Yes.
The Chair (Mr. Pat Hoy): Shall schedule S, section 20, carry? All in favour? Carried.
Shall schedule S, sections 21 to 29, inclusive, carry? All in favour? Carried.
Schedule S, section 30: A PC motion on page 39.
Mr. Ted Arnott: I'm withdrawing that motion.
The Chair (Mr. Pat Hoy): Page 40?
Mr. Ted Arnott: I'm withdrawing that as well.
The Chair (Mr. Pat Hoy): Page 41?
Mr. Ted Arnott: I'm withdrawing that as well.
The Chair (Mr. Pat Hoy): PC motion 42?
Mr. Ted Arnott: Withdrawn.
The Chair (Mr. Pat Hoy): PC motion 43?
Mr. Ted Arnott: Withdrawn.
The Chair (Mr. Pat Hoy): Shall schedule S, section 30, carry? All in favour? Carried.
Shall schedule S, sections 31 to 37, inclusive, carry? All in favour? Carried.
Shall schedule S carry? All in favour? Carried.
Shall schedule T, sections 1 through 2, inclusive, carry? All in favour? Carried.
Shall schedule T carry? Carried.
Going back, shall sections 1 through 3 carry? Carried.
Shall the title of the bill carry? All in favour? Carried.
Shall Bill 44 carry? All in favour? Carried.
Shall I report the bill to the House? Carried.
We are adjourned.
The committee adjourned at 1030.
CONTENTS
Thursday 24 April 2008
Budget Measures and Interim Appropriation Act, 2008, Bill 44, Mr. Duncan /
Loi de 2008 sur les mesures budgétaires et l'affectation anticipée de crédits,
projet de loi 44, M. Duncan F-395
STANDING COMMITTEE ON FINANCE AND ECONOMIC AFFAIRS
Chair / Président
Mr. Pat Hoy (Chatham—Kent—Essex L)
Vice-Chair / Vice-Président
Mr. Jean-Marc Lalonde (Glengarry—Prescott—Russell L)
Ms. Sophia Aggelonitis (Hamilton Mountain L)
Mr. Ted Arnott (Wellington—Halton Hills PC)
Mr. Wayne Arthurs (Pickering—Scarborough East / Pickering—Scarborough-Est L)
Mr. Toby Barrett (Haldimand—Norfolk PC)
Mr. Pat Hoy (Chatham—Kent—Essex L)
Mr. Jean-Marc Lalonde (Glengarry—Prescott—Russell L)
Ms. Leeanna Pendergast (Kitchener—Conestoga L)
Mr. Michael Prue (Beaches—East York ND)
Mr. Charles Sousa (Mississauga South / Mississauga-Sud L)
Clerk / Greffier
Mr. William Short
Staff / Personnel
Ms. Catherine Macnaughton, legislative counsel