Legislative Assembly of Ontario

The House resumed at 8 o’clock, p.m.

Mr. Speaker: Just before we start the evening’s proceedings, the Chair recognizes the member for Peel South.

Mr. R. D. Kennedy (Peel South): Yes, Mr. Speaker. Before we start, I would like to welcome to the House the 45th Mississauga Cub Pack with Akela Mr. Len Stewart, and his assistants Mr. Bower, Mr. Van Bergen and Mr. Johnson, in the west gallery. I know members will join with me in welcoming this group of fine young people.

Mr. Speaker: The order of business which had been called before we rose at 6 o’clock is No. 8, second reading of Bill 25. The member for York-Forest Hill.

LAND SPECULATION TAX ACT (CONTINUED)

Mr. P. G. Givens (York-Forest Hill): Yes, Mr. Speaker, I would like to make some comments on the bill that perhaps have not been mentioned in passing by previous speakers. I feel some of the previous speakers have been too critical of this bill -- that perhaps this bill is more generous than might have been expected of this government. It is certainly more generous than the bill having to do with the Parkway Belt legislation. There the government simply went ahead and said that those who lie in the path of the Parkway Belt are not going to be expropriated for a specific purpose, such as a highway or for hydro; that their land would be zoned for agricultural purposes forever and a day; and that where land across the way was worth $10,000 or $15,000 or $20,000 an acre, then this land hereafter shall be worth $500 an acre.

So this bill is more generous in that at least you are only charging 50 per cent -- and that on top of the income tax which the federal government is charging of another 50 per cent. Assuming that you can take the 50 per cent off the top and deduct it as an expense, this is only 86 per cent. So it is very big hearted of the government.

I wish I could sit in a Conservative caucus. I wonder what some of the Tory backbenchers do when they sit in caucus and see some of this legislation that is being put through by the Conservative government in order to perpetuate itself in office.

Mr. M. Shulman (High Park): They didn’t see this piece. They were told about it.

Mr. Givens: They weren’t told about it?

Mr. Shulman: No.

Mr. Givens: Government by decree.

An hon. member: How awful.

Mr. Shulman: Members of the backbenchers speaking up?

Mr. Givens: Now, if the purpose of the bill is to --

Mr. Shulman: They were more upset than we were, believe it.

Mr. Givens: Yes.

Mr. M. Gaunt (Huron-Bruce): I can well imagine that.

Mr. Givens: There don’t appear to be any manifestations of this protest as they hold on for dear life. Perhaps that’s why another couple of parliamentary assistants were appointed a couple of days ago. They are all getting something extra out of the trough; maybe that’s why they want to maintain themselves.

Seriously, if the minister is doing this for the purpose of lowering the cost of housing, he has been told over and over again by other speakers he is not accomplishing this. This bill is not accomplishing putting serviced lots on the line or increasing the supply of serviced lots for building in order to lower the price of housing, either for rental or for purchase. The minister is not accomplishing that.

If he is doing it for the purposes of lowering the fires of inflation and he is making this particular attack on one sector having to do with land, why is he confining himself to this kind of land? Why has he excluded industrial and commercial land? It is obvious that money is going to flow from this kind of speculative activity to speculative activity in industrial and commercial land, and that the prices of goods and services, as a result of the price of industrial and commercial land increasing, will be passed along to the ultimate consumer as well. Why didn’t he do it in one fell swoop and increase the fight against inflation; because he is not accomplishing the purpose of lowering the price of housing?

I cannot for the life of me understand why housing minister after housing minister refuses to take part or refuses to embark on a policy of a massive loan of a half a billion or a billion dollars for the purpose of the government going out and servicing land. This is one function which the government could perform better than any private industry, namely going out and servicing land; putting in the sewers and the watermains and whatever else has to be done for the purpose of servicing land in order to bring down the cost of serviced lots.

Mr. J. A. Renwick (Riverdale): No question about it.

Mr. Givens: This the government refuses to do for year after year. This Minister of Housing (Mr. Handleman), like previous housing ministers, gets up and renders lip service to this business of providing serviced lots and does not do so. He makes the noises and goes through the motions and the government refuses to do so. Instead of this, the minister comes in with this --

Mr. Renwick: Six thousand serviced lots.

Mr. Givens: -- grandstanding bill in which he purports to catch the fish, the people who are speculating in land. He says he is going to raise $25 million, and I say there will be grass growing down Yonge St. if he raises $25 million this year from this tax, because I don’t think he’ll do it. The tax is punitive. He’ll be catching a few fish but I don’t think he will --

Mr. R. F. Nixon (Leader of the Opposition): I understand one can find grass on Yonge St.

Interjection by an hon. member.

Mr. Givens: They’ve rolled it up. They had it for the mall but they rolled it up.

It’s punitive. He may catch a few fish in this way but he will not be moving more lots onto the market for building purposes.

One of the reasons people are buying land --

Hon. A. K. Meen (Minister of Revenue): Where is the member’s proof?

Mr. Givens: -- is there is a flight from the paper dollar. There’s a loss of confidence in the paper dollar; the smart money is escaping from the paper dollar and they are buying tangibles. They are buying land; they are buying gold; they are buying art treasures; they are buying jewels; they are buying commodities.

Interjection by an hon. member.

Mr. Givens: They are buying what?

Mr. R. F. Ruston (Essex-Kent): That was the member for High Park. They are buying bean futures.

Mr. Gaunt: He’s not for sale.

Mr. Givens: He’s only one representative of many.

Mr. Shulman: I command a high price in this country.

Mr. R. F. Nixon: He is buying commodity futures. He doesn’t fool around.

Mr. Givens: There is a flight from the paper dollar. My guess is, and this will be borne out in two or three years, that the people who have land -- not the in and outers; they will go by the board; the guys who go in and put down $2,000 for a deposit and won’t close their deals; there are not very many of them -- the other people will sit on their land because there is this flight from the paper dollar. The fires of inflation will increase because of the pressures in the world market and because the banana republics which have bananas to sell are going to be sitting on them.

Those who have commodities to sell, the cocoa producers, the coffee producers, the sugar producers and the oil producers, are waiting for the prices to go up. They have discovered there is a world shortage in these commodities; these are the factors that are firing the fires of inflation in this country. This is why people are buying into land and this is why the inflation on land will increase; and this tax isn’t going to catch them, because they are going to pass it on to the ultimate purchasers.

We have already dealt with the problem of small builders who won’t be able to function under this legislation. The minister hasn’t either confirmed or denied the allegations made by my colleague, the member for Downsview (Mr. Singer), as to whether, indeed, he has 83 amendments or he doesn’t have 83 amendments to present.

Mr. R. F. Nixon: He hasn’t got any amendments.

Hon. Mr. Meen: I will confirm it; I don’t have a total of 83, even in expectation.

Mr. Givens: Does he have half that number?

Hon. Mr. Meen: I think not.

Mr. Givens: But he has indicated this afternoon he has three very wide fields of activity which he is considering, namely the field having to do with the builders’ lots; the field having to do with rental activity, on which he wasn’t too clear as to whether he was going to listen to the representations that have been made to him as to whether he was going to make amendments to those sections. Those are very serious fields, and we don’t know what is going to happen there.

I want to ask the minister this: What is speculation? Speculation is risking very little to make a whole lot. I am wondering what the Conservative backbenchers are thinking about the person who is a farmer and who has owned a farm for 25 or 30 or 40 or 50 or more years, and who has been watching everybody around him sell off land and watching the prices of the land around him rising from $5,000 to $10,000 to $15,000 and $20,000 an acre, and now he is caught by this tax. Do they consider that man a speculator? Do they think he is deserving of the punitive aspect of this legislation?

Mr. H. Worton (Wellington South): Come on, tell us.

Mr. Givens: I want to ask some of the backbenchers, about the prudent investor, the doctor, the lawyer, the businessman, who for 20 years was told he had to have a hedge against inflation, so he has been depriving himself for 20 or 25 years of spending his money on some of the finer things of life and he has bought himself 25 or 50 or 100 acres of land. He has been paying the taxes, and he has been paying the principal and interest on the mortgage. Is this man a speculator in the same sense as the guy who put down a small deposit six months ago and is going to skim off a big profit? The minister is treating him in the same way?

What about the widow who inherited an estate five years ago, inherited some rent-producing property, or inherited some vacant land to which she has caused no improvements to be made? She has been told by her lawyer and she has been told by her accountant to hold onto it because all around her they have seen people whose land has appreciated in value. Is she a speculator in this sense?

The minister shakes his head “No.” Well what protection is he affording these people who aren’t speculators, but who were investing in the future of Canada? One of his own cabinet ministers -- who is no longer a cabinet minister -- said he did the same a few years ago, he invested in the future of Canada. What confidence can anybody have in this country when the government comes in with this kind of legislation?

Mr. R. F. Nixon: He said he wished he had bought more.

Mr. Givens: They are benefitting nobody with it, because this isn’t the land that is going to come on the market for people to build houses on or to build apartments on.

There is another question that I want to ask the minister that he hasn’t dealt with at all. We are in an inflationary spiral now; we hope that with the passing of time these fires will be dampened and that they will go down, and that the acceleration will be decelerated, but once the minister puts on tax legislation he cannot very well reverse it. What is he going to do five or six years or 10 years from now when he wants to reverse this? How is he going to do that?

How is he going to be able to accomplish that? What is he going to do with respect to people who are in the middle class or who are business people or professional people, who reach the age of 50 and want to plan their retirement portfolio or who want to plan their estates, who happen to own some real estate and who are thinking in terms of leaving their prospective widow or their dependent children a piece of real estate for their future, either revenue producing or non-revenue producing? How can they plan their estates now in the light of this tax which the minister is imposing on the books, this tax which does not benefit the people he is thinking of benefitting, by lowering the cost of housing?

We can all be in agreement that he is not going to lower the cost of housing, because he is not bringing low-cost land onto the market at all. He is dealing with raw land, raw land which won’t come on the market for at least another five or 10 years because it cannot be serviced at this particular time. So we are agreed on that.

So the government is not helping them and the minister is not going to be really bringing down inflation, because he is doing nothing about price controls. He is doing nothing about wage controls. He is doing nothing about controlling the inflationary factors in other sectors of the economy. All that it has done is that the government has taken this particular spectacular sector and it has come in with a spectacular piece of legislation which appears to be dealing with something that’s inflaming the economy, but which in fact is only one particular minor factor in the economy and nothing else.

Now how can people plan their activities in the future with respect to this tax when the minister himself, doesn’t know what he is doing? He hasn’t made up his mind with respect to the various amendments he has indicated he is going to bring in or that he may not bring in; he hasn’t told us what he is going to do. We are debating this thing in the dark.

So, Mr. Speaker, it’s a sad day when we deal with a piece of legislation which is of such far-reaching consequences. I would never expect that a true blue Conservative government would bring such legislation into this province because of the effect that it’s going to have on the whole economic picture of this province.

It will have no beneficial effect that anybody can see in bringing down the price of housing. It will have no beneficial effect as far as bringing in revenue is concerned, because the minister himself has admitted it isn’t going to bring in a great deal of revenue and that that isn’t its fundamental purpose.

So what is the purpose of this particular piece of legislation? It is to indicate to the public that the government is doing something for them; to indicate to the public that it is trying to stoke the fires of inflation; to indicate to the public that it is trying to bring down the cost of housing -- when in effect it is not doing that at all.

All the government is doing is playing with dynamite. I suggest, with respect, that when one is playing with dynamite and playing with percussion caps, they should only do so when they know what they are doing, I don’t think that the minister or the government realizes what they are doing in this respect. I think the government will rue the day it brought in this particular piece of legislation, because it is fraught with very serious consequences.

Mr. Speaker: The member for Sandwich-Riverside.

Mr. F. A. Burr (Sandwich-Riverside): Mr. Speaker, like everyone else in this group, I support the principle of discouraging the type of rampant speculation that has been permitted in this province for some years, especially because of its inflationary impact on our economy.

Speculators who add nothing to the property in which they are speculating can expect very little sympathy. But I should like to know whether the ministry has considered the effect of this bill on that group of people whom I shall call the home rejuvenators. These are people who buy old houses, old homes, renovate them and resell them, making a modest profit in return for their own labour.

In Toronto the last year or so they would have reaped the benefits of inflation and the label “speculators” might possibly be justified in some measure. But in Windsor, where house prices have not yet gone wild, the home rejuvenators have not deserved in any way to be labelled as speculators -- at least those who are doing their own work.

From what I have been able to learn, the home rejuvenators in Windsor will go quietly out of business next month. These men constitute one of the genuine free enterprise efforts that produce a socially desirable end product, namely better housing. It will be a great pity if this group is wiped out.

I am sure this is not the intention of the minister or of the government, but this will happen if the bill means what many of these small businessmen think it means. I have received representations on behalf of some of these home rejuvenators and I should like the minister to tell me whether these fears are justified, based on a case study I shall relate.

This is an actual example, which I should like the minister to hear, and on which I would appreciate his comments. I shall go slowly so he and his advisers may make notes and give me the answers I am seeking.

Two Windsor partners earn their living by buying old houses at the rate of about 10 or 12 a year. They renovate and resell these houses --

Mr. R. F. Nixon: Doesn’t the member want to do this in committee?

Mr. Speaker: The hon. member is asking for an explanation of the principle.

Mr. Burr: At present, these two men are buying an old house and the closing date was April 26, well after the April 9 deadline mentioned in the Act. The cost of the property is $26,500, of which the value of the land is $8,750 and that of the building is $17,750, if the value is pro-rated according to the assessment. The house, as you see Mr. Speaker, is about two-thirds of the total value, about 67 per cent. The planned renovations will cost $1,455. Because the renovations represent only 5% per cent of the total value of the buildings and the land, this property will not be exempted under the Act.

This work will take the two partners a full two weeks. They estimate the value of their labour at $1,000. That is, $250 a week each. According to their accountant, income tax regulations do not permit an assessment of ones own labour as a cost that improves the value of the property.

Maintenance of the property, which includes insurance, three months of municipal taxes and three months of mortgage interest, comes to $523. Legal fees and real estate commissions on resale will total $1,730. This gives an adjusted cost of $30,208. Counting the cost of trucking, tools, office expenses and accounting, a total of $250, and the value of their own labour of $1,000, this gives them a real cost of $31,458.

The estimated resale value is $34,000. By subtracting from this resale amount of $34,000 the adjusted cost of $30,208, we get a taxable value of $3,792. The speculation tax of 50 per cent on this will be $1,896. The partners must pay federal and provincial income tax at a 40.45 per cent rate. On the full profit of $3,542, that is $3,792 less $250 for trucking, tools, etcetera, the income tax at the probable rate of 40.45 per cent is $1,433. This gives a combined total tax -- comprised of speculation tax and income tax -- of $3,329, leaving $213 as a profit, if one can call it that, tor two full weeks of work and worry for two grown men with families to support.

There is, of course, the added risk that the anticipated sale price of $34,000 may not be forthcoming.

Now, if the speculation tax is allowed as an expense deductible for income tax purposes, a point on which I should like clarification from the minister, then the partners would make $980 on their venture, involving at least two weeks of hard work plus all the time spent with real estate agents, lawyers, insurance agents and all the other worries involved. This is not enough for the contribution they will have made to the community in upgrading or revitalizing or rescuing a deteriorating property which is badly needed for providing adequate housing in Windsor.

Without the speculation tax, the partners would have shared $2,109 for their enterprise in rejuvenating this property. This covers a period of two weeks of intensive hard labour and probably an equal length of time in what might be called administration and planning. If the two partners share this amount, they make $1,060 each for a month’s activity. This is not what one could classify as a speculator’s rip-off, Mr. Speaker. Certainly this is not what the minister has in mind.

To sum up this case history: (1) Without the speculation tax, the two partners doing their own work would have made $2,109 in the process of buying this house and land for $26,500 and selling it for $34,000; (2) if they are subject to the speculation tax, their net gain for their work will amount to only

$980; and (3) if, as they fear, the speculation tax is not a deductible expense for income tax purposes, their net return for all their effort and the risks they have run will be only $213.

Now I have a second case study, but I shall not give the details, just the fact that the property cost $27,375 and they expect to sell it for $38,000. The summary for this property is as follows: If there were no speculation tax, the partners would share $1,452 for their months’ effort. This involves renovations of over $5,000, a very poor return for their enterprise and the risks they have run. If the speculation tax is deductible for income tax purposes, then they would share only $622. If the speculation tax is, as their accountant reads the Act, not deductible, then they share only $57 for their four weeks’ hard labour in carrying out renovations of $5,350 plus providing about $2,000 worth of labour.

Mr. R. F. Nixon: Is the minister getting all this?

Mr. Burr: Now whether the speculation tax is deductible or not, it’s obvious that these partners --

Mr. W. Hodgson (York North): Watch him, Stephen -- he is going to be for free enterprise --

Mr. Lewis: Good policy.

Mr. Burr: -- are not going to renovate any more properties at the relatively moderate margin at which they have been working. The risks are far too great and the rewards are far too small.

Society will lose the very worthwhile work which they have been doing if the speculation tax is applied to this group of entrepreneurs. And surely, Mr. Speaker, it is not the purpose of the government to put these home renovators out of business.

If the partners were allowed to add the value of their own labour, $1,000, to the cost of the renovation of that first house, $1,455, we should have almost the required 20 per cent that would enable the Act to exempt them. Another $300 worth of renovations and labour would then enable these renovators to be exempted from the speculation tax.

If this is what the minister agrees is fair, then the bill should make it quite clear that the renovators’ own labour can be considered part of the 20 per cent required to exempt the property.

Another suggestion, perhaps an alternative to counting the renovator’s own labour as part of the 20 per cent, would be to make the 20 per cent required improvement apply to the building alone and not the building plus land combined.

Mr. Speaker I should appreciate, when the time comes, the minister’s comments on this aspect of the principle of the bill as it would affect the home renovators or home rejuvenators.

Mr. Speaker: The member for York North.

Mr. W. Hodgson: Mr. Speaker I’d like to speak a short time on Bill 25. I’d like to say at the outset that I agree with the principle of the bill. The only thing that I would disagree with is that it is about two years too late coming in.

But I’d like to share the concern of the member for Downsview, plus the member for Riverdale, for the small developer. The small developer in the area I come from is the backbone of the house building industry.

Mr. Givens: The small builder, not the small developer.

Mr. W. Hodgson: Small builder, excuse me, I’m glad the member for York-Forest Hill corrected me. It is the small builder who is the backbone of our community. I would say that in a large area like Metropolitan Toronto he does contribute, but not as much as he does outside of big metropolitan areas.

I would ask the minister to seriously consider an amendment to the bill that would protect and place the small builder in a competitive position with the large developer. That is my first point.

The other thing I am concerned about is farm properties. As it is outlined by the bill now, a farmer could farm his farm for a lifetime -- he could be a second generation farmer -- but April 9 is D-Day. If he sells for any other purpose except farming he will be penalized by the speculative bill.

Mr. R. F. Nixon: Even if he sells for farming.

Mr. W. Hodgson: No, not necessarily for farming, the bill provides that if it is kept in farming he won’t be penalized. I am sure there are a lot of people throughout the Province of Ontario and in this Legislature who agree with me. If it had been a family farm and a farmer has conscientiously farmed his farm for 10, 15, 20, 25, 30 years, he should be able to sell it for whatever the market value is -- whether it be sold for house building or for any other purpose. He shouldn’t be penalized at the end of that time. He has done his duty to the Province of Ontario in providing cheap food. Not only the Province of Ontario but the Dominion of Canada. I’d ask the minister to take a second look. This shouldn’t be. The evaluation day as set on April 9, which I mentioned as D-day, it --

Mr. Renwick: He should withdraw the bill and save us the trouble.

Mr. W. Hodgson: It should be considered in terms of the number of years he has farmed that farm. You have a good criteria to go by as set by the Minister of Agriculture and Food (Mr. Stewart), in the case of grants. If he has produced the maximum of $3,000 a year he qualifies for 50 per cent of his taxes, and that’s not too hard in this day.

The third point on which I would like clarification is that if the land is used for industrial or commercial development why is it also exempt from the tax? Maybe there is a farm outside of some of our smaller communities in agricultural use today and it could be developed into commercial or industrial use tomorrow -- it could be rezoned. If it is rezoned by the municipality will it be exempt?

These are just three of the points I want clarified, not only for my region but throughout rural Ontario. I would like the minister to consider these points I’ve made here this evening. When you come back into the Legislature on third reading with your amendments, I hope these are included. Thank you very much Mr. Speaker.

Mr. Speaker: The hon. Leader of the Opposition.

Mr. Renwick: Just withdraw the bill and put some unserviced land --

Mr. R. F. Nixon: Mr. Speaker, I want to speak in favour of the principle of the bill, which is to tax unconscionable profits in land speculation.

Mr. Renwick: There is nothing about un- conscionable profits. It is to stabilize land and housing prices.

Mr. R. F. Nixon: If we’re going to have a rational approach to our parliamentary procedure, I can’t see why it isn’t within the ken of reasonable people to realize that the principle of this bill is to tax these un- conscionable profits.

Mr. Renwick: I think it is to stabilize land and housing prices.

Mr. R. F. Nixon: Yes, well the hon. member can establish the principle to suit his own particular requirement.

Mr. Renwick: The Treasurer (Mr. White) stated the principle of the bill.

Mr. R. F. Nixon: Well I see the principle of the bill as a tax on unconscionable profits, and I’m very much concerned with the way these profits have been increasing. Economic experts, and even amateurs like the member for Riverdale, can with their incisive minds cut to the core of all of these problems for the edification of anybody who cares to listen --

Mr. Renwick: We tried to do that this afternoon.

Mr. R. F. Nixon: But still, Mr. Speaker, I’m sure you are aware that even the best economists --

Mr. Renwick: There is an unconscionable --

Mr. R. F. Nixon: -- and even those people who, by stringing together the platitudes of the discipline to which they adhere, still cannot explain the fantastic inflationary expansion which is ruining the land market in every respect and the housing market from the standpoint of those people who want to provide themselves with accommodation; and even to buy farmland for the production of food rather than for speculation.

One can often purchase property, ostensibly a farm, or purchase a home, ostensibly a place to live in, and find that its price has no relationship whatsoever to either of those purposes, but is related only to its resale value. This is surely something that this bill, in principle, can at least affect if not completely control.

There was a time when the widows and orphans we’ve been hearing about so much in this debate, if they had a few dollars, were advised by some people, I suppose, to put it into some kind of a revenue-producing property; that dear little old fourplex we have been hearing about so much in the debate this afternoon.

But there was also a time when they were advised to invest their money and their savings, and perhaps, their legacy, in the development of our country and our natural resources -- they were even advised to buy savings bonds and things like that. We have found that the policy of the government of Canada, in Mr. Benson’s time --

Mr. Renwick: That was a poor investment too.

Mr. R. F. Nixon: -- very properly imposed a capital gains tax on stocks and a provision that is known among the experts as the grossing-up dividend provision, which has driven people out of that sort of an investment and basically into investment on land. This was, if not the main thrust towards land investment, one of the things that began the turn-away from the stock market, the bonds, other debentures, even savings bonds; and directed people’s attention to real estate as an investment and as a “hedge against inflation.”

In other words, those changes in the tax laws of Canada, if anything directed people into this sort of investment -- and I’m talking about the widows and orphans, as well as those people who are smart operators and know how to turn a fast buck.

Mr. Renwick: Very few widows and orphans own any land in the Province of Ontario that we are talking about tonight.

Mr. R. F. Nixon: Yes. Well, I’ve just been treated to an extensive dissertation on either a widow or an orphan owning a property that is being developed and improved. Now, I think that was one of the arguments from one of the hon. member’s colleagues, and obviously it was from one of mine.

I’m not saying for a moment we should not be concerned about their investments, just the way I can remember the hon. member who is so irritated because I don’t happen to agree with him in this --

Mr. P. D. Lawlor (Lakeview): Just who is the hon. member mad at?

Mr. Renwick: I get the impression he is irritated. I’m not irritated.

Mr. R. F. Nixon: I find the hon. member irritating at times. I really do.

Mr. Renwick: That doesn’t make me irritated.

An hon. member: No, it doesn’t make the Leader of the Opposition right either.

Mr. R. F. Nixon: I can well recall the hon. member’s concern when large numbers of people, mostly pensioners, lost their investments because they had decided to invest it in Prudential Finance at the fantastic rate of seven per cent. I can remember him emoting to full galleries about his knowledge of the economic situation at that time -- unfortunately, to little or no avail.

Mr. Renwick: How right we were!

Mr. R. F. Nixon: Yes, and to no avail. Mr. Speaker, after those changes in the federal tax legislation, the direction toward investment in land began at an accelerated rate and has been accelerating ever since. It has now somehow taken on a momentum that I say to you cannot be explained by even the most erudite economist. It is similar to the same kind of weird investment infatuation that we have read about down through history, which has no relationship whatsoever to the actual value of the property concerned but is an investment for the sake of resale rather than use, whether it is farm property or housing property.

Mr. Speaker, when you think of people shelling out $60,000 for a fifth-rate townhouse, you must realize that these investments are for something other than to provide a living facility. Speculators are buying houses throughout Ontario and turning them over at $10,000 profit before the first sale closes. They are buying everything they can get their hooks on. Houses that were built in 1972 and sold for $25,000 are now selling for $45,000. Lot prices have escalated to the point where their resale value has gone up by factors of 10, 25, and in some cases even 100.

If the farmer gets an opportunity to sell his farm, which two years ago he valued at $35,000 to $45,000, why shouldn’t he sell it when somebody comes along and offers him $100,000 and, when that is turned down, then offers him $150,000 or $200,000? It doesn’t seem to make any difference whatsoever what the asking price is because of the fever that has got into the minds and the hearts of those people who are turning over property for a quick profit.

I support the principle of this bill in that it will tax that quick profit, with these two reservations! I believe that the tax should be 100 per cent on these unconscionable and speculative profits and I do not agree with what the minister has set forward as his designation of a profiteer or a speculator.

I do not intend to go over the various classifications that have been brought to his attention in the past. I am sorry that the Minister of Agriculture and Food is not in the House, Mr. Speaker, because he almost always is for these debates. The idea that a farm that is an operating concern should be subject to the additional tax as if it were a speculative sale is supportable only if that land is eventually going to be subject to the unconscionable profits that we have seen in the past before April 9, and I say to the House, no doubt, after April 9 as well because of the inadequacies in the administrative features of the bill.

There should be some means within the mind of the minister and those advising him, and I must admit that I am not one who can give him the direct advice that perhaps he seeks in this regard --

Mr. Renwick: We tried to this afternoon.

Mr. R. F. Nixon: Yes, I know. The member for Riverdale not only tries but he does it without end. It is too bad nobody ever listens to him, not even his colleagues.

Mr. Ruston: That is the story of his life.

Mr. Lawlor: The redone Robert Nixon!

Mr. R. F. Nixon: The idea of a farm being passed on without being subject to this tax as long as it is to some relative seems to me to be irrelevant.

Mr. Lawlor: He is being obtuse.

Mr. R. F. Nixon: It seems to me to be irrelevant that the law should, in fact, require that the land stay in agricultural production and, as long as it does, should not be subject to this special tax which is designed to cream off unconscionable profits.

Interjections by hon. members.

Mr. R. F. Nixon: As soon as it is sold for developmental purposes, that is the time to tax the profits. I personally do not believe that we should support the exemption of the taxing base within a family, but rather we should support the exemption on the basis of payment of this tax as long as it stays in viable agricultural production. The last thing we want to do, surely, is artificially to increase the cost of land, which is going to turn up by the same token as an increase in the cost of food. The same objection is expressed in what the member for Riverdale considers to be the deep flaw in the principle of the bill which does not permit him to support its concept and that is that the additional cost will turn up in the cost of housing.

This is, of course, regrettable and it is a serious matter indeed. Surely, as we examine the bill in its provisions there can be means put forward for example, to see that the small builder is not going to be forced out of business. It is estimated there are 2,400 building companies in Ontario which build 25 houses a year or less. The minister has indicated that he is aware of the problems inherent in the administration of the bill -- or the features of the provisions of the bill -- and I regret deeply that he did not respond to the comments from the opposition and at least let us have a look at those amendments which the minister has said will correct that unfortunate situation.

I believe that if we placed a 100 per cent tax on speculative land profits and had a bill which would define, in an acceptable way, what speculation actually is -- basically land which does not have improvements on it -- the price of farmland would decrease to the point where the farmer could afford to stay on the farm.

One of the things that has concerned the ministers of agriculture both provincially and federally is that the commitment of capital in the provision of land has simply got out of the reach of the working farmer. It’s within the reach of the person who has foreign capital or his own savings to invest in an escalating market but for a farmer who is prepared to work the land and produce food, hopefully at a profit for himself and his family, if built into that is the cost of land which is artificially inflated because of the opportunity for speculative profits, obviously it is not going to work in the best interests of the consumer or the farmer.

It is a deep flaw in the bill. It is a flaw with which the minister has to come to grips and the member for York North made a good point in that regard. It has specific application in this province, probably more than in any other part of Canada, because we have a third of the class 1 and 2 arable land of the whole nation. To tax that in such a way that it is going to be forced out of viable farming is a very serious matter indeed.

I was concerned that the valuation day was set at April 9. Some of the huge speculative advances in value had already taken place and it would not necessarily have had to be a tax applied retroactively if valuation day had been established at an earlier date. The rate of inflation of farm properties, housing properties and development properties in all parts of this province had been going at that time for many months, completely out of any realistic control or any relationship to the actual value of the real estate under consideration.

I would say to you, Mr. Speaker, that it is strange that a Conservative government would bring in a bill taxing profits in this way. I have no trouble supporting it because I believe it is a principle which should command the support of Liberals and anyone else who agrees with our particular position in this regard. I would say to you, Mr. Speaker, that it is essential the government bring forward legislation which is going to direct investment away from the compelling attractions of real estate for its own profit rather than its own viable use.

I would say again, for those who would choose to listen to the argument that the principle of the bill does do that, that the provisions of the bill in detail are flawed and my colleagues have pointed that out to you, sir, and will do so when we examine the bill in committee. Amendments are possible and the minister himself has indicated that he has some. There will be amendments from our party as well which I hope will do away with the serious shortcomings in the provisions of the bill as it is presently before us.

Mr. Speaker: It there any member from the NDP who wishes to speak? The member for High Park.

Mr. Shulman: Mr. Speaker, I would like to rise to condemn this bill but not the idea behind it, which was worthy. I’m sorry the thinker of the bill isn’t here. He has kept very carefully away from it; I don’t blame him too much. It is a great idea, as so many of his ideas have been, but badly flawed. In any case, I shall direct my remarks through you, sir, to the technician who has the responsibility for steering it through the House.

Mr. F. Young (Yorkview): He’s in Europe.

Mr. Shulman: Is he in Europe? Oh.

Mr. Lawlor: He’s going to make a speech in Paris.

Mr. Shulman: Good reason for him to be away. I want to tell you a story about a doctor, Mr. Speaker, who some 23 years ago opened up a practice out in west Toronto. He had no idea of speculating in land at that time but he thought he needed an office to practise in, so he bought a little house, and he practised there. He’s practised there all this time. I know him well, and --

Mr. Givens: He’s the member’s best friend.

Mr. Shulman: Well, perhaps, in a way.

Mr. R. F. Nixon: He is also his alter ego.

Mr. Lewis: Even his ego.

Mr. Shulman: I understand from this doctor that he is thinking of retiring from this particular line of work, and no longer will be needing his building after next year. I should imagine at that time that instead of becoming a slum landlord he would prefer to sell the building. That man is going to get caught in your speculation land tax. He is going to have to be paying the 50 per cent tax, and any increase in value in that time.

Mr. R. F. Nixon: If he plants a crop of soybeans he can probably evade the tax.

Mr. Shulman: Well, I am sure the man can pay the tax, but --

Mr. R. F. Nixon: That is the next thing they are going to tax.

Mr. Shulman: I am telling this story to illustrate the very tiny thought that went into this bill. Is that really what you want to do? Do they really want to catch a guy like that?

Mr. Givens: Yep.

Mr. Shulman: Do they really --

Mr. L. M. Reilly (Eglinton): I hope not.

Hon. Mr. Meen: Why not?

Mr. Renwick: That is one of those real speculators that the Leader of the Opposition was talking about.

Mr. Shulman: This is going to happen. You are going to catch this type of person, the man who has no intention of speculating in land or in buildings. Because every professional who has bought his own little spot to practise in is going to get caught in this when the time comes to retire. You are going --

Mr. E. R. Good (Waterloo North): Isn’t it a commercial building?

Mr. Shulman: It is not a commercial building.

Mr. R. F. Nixon: Put a drugstore in the bottom.

Mr. Shulman: Maybe if he put a drugstore in it he could get it exempted.

Mr. R. F. Nixon: You mean you haven’t got one there?

Hon. A. Grossman (Provincial Secretary for Resource Development): He will live off the rent.

Mr. R. F. Nixon: There’s not a doctor I know who doesn’t have a drugstore on the first floor.

Mr. Shulman: I don’t want to repeat the things I said on the Land Transfer Tax Act, because the two bills were brought in together. They had the same birth, and I happen to know the hour it took place. A gentleman confided in me. It was at 3 a.m. that he woke up from a dream and said, “My God, have I got an idea. This is going to be the budget for this year.”

Hon. Mr. Grossman: 3:10 a.m.

Mr. Shulman: He came rushing down to the office the next morning -- this man was a minister of the Crown, who I understand is not with us at the moment.

Hon. Mr. Grossman: He is having group therapy.

Mr. Shulman: He picked up the phone and phoned some other office here in the building, and he said, “Bill, have I got an idea. It is going to get us right off the hook.” I don’t know who he was talking to -- some fellow named Bill or Billy -- and Billy said: “Yeah, it better be good, better than the last one I hope.” And he said, “Yeah, this one has got no flaws in it. This one is really great.”

Mr. R. F. Nixon: You don’t even have to turn down the thermostat.

Mr. Shulman: “It is going to look wonderful in the papers. It’s going to get those ‘furriners’ out of the country, who everybody thinks are taking advantage of us; and not only that, we are going to get the speculators. We will be able to get up at the budget time -- of course the budget was only 10 days away at the time; it was sort of a late blooming idea -- “We are going to be able to get up at budget time and by golly, are we going to have a vote-getter. Right across the province they are going to like it.”

This fellow Billy, Billy the Kid, whoever he is, said: “Gee, that sounds great.” Whatever that other fellow’s name is -- Johnny, Johnny. “Johnny come on over and tell me about it.”

This was how it all began. It was a dream. It may turn out to be nightmare before it’s finished, but it began as a beautiful dream. And the problem was exactly the same problem as occurred with the “furriner” tax. They didn’t give the experts enough time to draw it up.

Johnny said, “Look, we’ve got this great idea. Let’s get it drawn up in a hurry; and then we are going to really show those -- We’ll shut up the NDP because they keep screaming about these various things. And the Liberals will be so confused they will support us -- and oppose us -- they won’t know what they are doing. And we are going to have the whole press right across the country to cheer us, and by God, you could even have an election this October if you wanted to.”

Well, well, it sounded great --

An hon. member: Allan’s approved it too. Allan approved it.

Mr. S. Lewis (Scarborough West): When Ian said 100 per cent, that is what he was talking about.

Mr. Shulman: I must confess, Mr. Speaker, and I yield with as much grace as I can muster to the hon. minister, if I had been sitting there in that room, when the minister came in with his bubbly idea, and had it thrown at me very quickly, I too might have succumbed. Because let’s face it, these men didn’t have too much time to think about it. It was a last-minute thing, you know, “We can’t have one of these budgets where they say, *Oh, we are waiting until next year to bring in all the goodies.’ We have got to bring in something in the budget.” And, quite frankly, they did not have much to put in the budget this year.

Mr. Renwick: That’s right. They had very little going for them.

Mr. Shulman: It was a bit of a problem. They didn’t dare increase taxes and the little piddly taxes they were cutting were of such irrelevance -- Mr. Clean taxes and shoes under $30 and things like that -- they weren’t really affecting too many people.

Hon. Mr. Meen: Just get depressed.

Mr. Shulman: My shoes cost $24.95. That’s okay. I got them on sale.

Mr. C. E. McIlveen (Oshawa): Honest Ed’s?

Mr. Shulman: Honest Ed’s, yes. How did the member know

An hon. member: In the fire?

Mr. Shulman: Anyway, to come back, they brought in the bill, they did not give their people enough time to draw it up sensibly and the result is that now that the truth has dawned -- and it has dawned over there a little late -- what they have said is, “Don’t worry, we recognize the bill is flawed.” Be- cause suddenly their own people started coming to them. I know a few of them said, “For God’s sake, what have you done here? You are going to stop the building of houses; you are going to produce all sorts of other things,” which I will come to by and by, “rents are going to go up; building is going to stop because all the small people won’t be able to build, and they do most of the building.”

So the minister, with a little embarrassment -- but he handled it quite well, I must give him credit -- came in and said, “Don’t worry about those little tiny flaws. We haven’t had time to work it out, but we are going to bring in amendments to fix all that.” The opposition was curious as to what the amendments were going to be and said, “What are the amendments going to be?” and the minister drew himself up with as much dignity as he could muster and said, “I’m not going to tell you that, but we are working on it. Don’t you worry, you will see it all in due course.”

So, the Leader of the Opposition said, “Don’t you think we should see the amendments before we debate the bills so that we can debate them intelligently?” And the minister sort of decides, “We don’t want them to do that.”

Mr. R. F. Nixon: The member is insulting people from Riverdale.

Mr. Shulman: Actually, I must sympathize with the minister.

Interjections by hon. members.

Mr. Shulman: I must have sympathy for the minister. It is not that he didn’t want us to try to debate it intelligently; he didn’t have the amendments made up. So he went back to the Treasurer and he said, “You’ve got me in a bit of a spot here. Get those damn amendments to me in a hurry.” And they are working like mad.

Mr. Renwick: The Treasurer is in Europe. He wants to keep the socialist hordes out of Paris.

Mr. Shulman: Well, this is a bit of a problem. The brain -- the dreamer -- had gone to Europe. This is a little unfortunate. So they put all the lawyers to work on this issue and they are working like mad. They have drawn up the amendments now. They are drawn up. The trouble is, they don’t want to fall into the same --

Mr. Young: Cesspool.

Mr. Shulman: -- cesspool, my colleague suggests -- cesspool as they did with the bill itself. So they have sent them out to other experts to get another opinion to make sure it is okay before they stumble.

All right. My sympathy to the minister. But what is wrong with the bill? Let’s just see. What is it that he’s trying to do? There seems to be two schools of thought around here as to what he is trying to do. The minister says he is trying to stabilize housing prices and land prices, I believe, and the member for Brant says he is trying to sweat the speculators. Whatever it is he is trying to do that unfortunately is not what he is doing. And I look at it with some amusement tinged with regret, because we are all in this same sinking ship together and as you go I am afraid we are going with you; country, province and all.

However, I am embarrassed to admit this, Mr. Speaker, but I have friends who are land speculators. I actually eat with them occasionally and some of them are actually not only --

Mr. D. C. MacDonald (York South): Cheer up, the member hasn’t got as many as the minister.

Mr. Shulman: Not only are they friends of mine but they are also advisers to the government. I had the pleasure, one evening not so long ago, of having dinner with three of these gentlemen and their lovely ladies. They were telling me of the chaotic phone calls and arguments that were taking place in the area surrounding the Prime Minister, his chief advisers, and their extreme unhappiness at the fact that --

Hon. Mr. Grossman: How is it that the leader of the NDP can’t associate in that milieu?

Mr. Lewis: I don’t move in those circles; that is a delegated responsibility. In our caucus we spread things around.

Hon. Mr. Grossman: It sure is. It is at arm’s length.

Mr. Shulman: As they pointed out to me, they said, “You know what is going to happen?” -- and I am now speaking of one of the largest landholders in Scarborough, perhaps the largest landholder in Scarborough.

Mr. Renwick: The member for Scarborough West?

Mr. Shulman: No, it is not him.

Mr. Lewis: But very close.

Mr. Shulman: He doesn’t live very far from the member though. He said, “You know, I own more undeveloped land in Scarborough than any other individual. I don’t build houses. I usually sell the land to builders. I don’t do much building. You know what they are forcing me to do? I’m just taking the land off the market. I am going to sit on it.”

Hon. Mr. Grossman: He is going to find himself surprised.

Mr. MacDonald: That is where the minister is kidding himself still.

Mr. Shulman: This man happens to be one of the richest, young, single, eligible bachelors in the city. Everybody knows who he is now.

Hon. Mr. Grossman: Is he male?

Mr. Shulman: And he happens to be a multi-millionaire. He said, “I can sit on that land for 10 or 15 years. I can outwait the Tories.”

Mr. J. Riddell (Huron): He only needs one year for that.

Hon. Mr. Grossman: Don’t believe it. He is going to get a sore backside.

Mr. Shulman: He said: “There’s no rush. I own the land. I’ve got no mortgage against it. I’ve got it clear and free. I can develop it next year. I can subdivide it and sell it. Or I can develop it after this government or more likely after this minister goes.”

He said: “There’s no rush. But you know what it means? My land isn’t going to go on the market. And that means there’s going to be that much less land available in Scarborough. And that means that the land that does become available and is built on is going to have to sell for more for the simple reason of competition. There are going to be that many more people wanting those houses, because I’m going to build my share.”

And does this government know what price they are going to be in about a year and a half from now?

Hon. Mr. Grossman: The member should tell his friend to sit and wait -- he is in for a great surprise.

Mr. Shulman: I would like him to be surprised -- and I would like the minister to be right this time. But I fear the minister is wrong.

I’ve got in front of me a letter from the Metropolitan Hamilton Real Estate Board. This is a socialist organization which my colleagues have set up in Hamilton to promote the causes of the NDP. I believe they wrote all of us a letter pointing out the “minor flaws,” as they put it, in the Land Speculation Tax Act.

Mr. V. M. Singer (Downsview): We all got the letter.

Mr. Shulman: We all got it, but no one so far has mentioned it in the debate.

Mr. Lewis: We are all counting on the member for High Park.

Mr. Singer: The minister read it --

Mr. Shulman: We all read it, but perhaps the press should hear about it. Because there are one or two errors that the land -- why the heck did none of the members mention it if they all got the letter? I presume the answer is that they all got the letter, but I read mine. Well, all right. It’s a pity that so much mail comes to various people, but it apparently doesn’t filter through. Well, let’s give them a second chance so they can get it. Yes, all the members have it. Follow closely as I read.

Mr. Ruston: Did the member agree with all of it?

Mr. Shulman: No, I don’t agree with all of it, but they make some very good points. They make a few minor points here. Let me start:

“1. The publicity concerning this Act is misleading. It is being sold as a land speculation tax when in fact it is a land and residential dwelling tax and encompasses much more than raw land.

“2. At a time when it seems necessary to encourage new housing units, this tax effectively discourages the owning of units for rental other than by an Ontario Housing Corp.”

Well, stop and think what that is going to mean in just a few months.

Mr. Singer: The member’s colleague from Riverdale made the point earlier.

Mr. Shulman: Thank you very much. I am so impressed by the wisdom and the brilliance of my colleague from Riverdale, and have been for many years, that I try whenever he makes a point to repeat it, to give it a little more emphasis.

Mr. R. F. Nixon: The member for High Park has to repeat it because he is never here when the member for Riverdale speaks.

Mr. I. Deans (Wentworth): Yes, he has to repeat it.

Mr. W. Ferrier (Cochrane South): Just like the member for Brant in Sudbury -- nobody thought he was there.

Mr. Shulman: Why is it, Mr. Speaker, I’m being heckled only from the right and not from the government benches?

Mr. MacDonald: The government benches are empty. They are not here.

Interjection by an hon. member.

Mr. Lewis: As a matter of fact, Mr. Speaker, I am reading the instant Hansard of the member for Riverdale’s speech right now, and it is superb. It is superb.

Mr. Singer: Well, let it stand for itself and don’t repeat it.

Mr. Shulman: The third point they make is that speculation isn’t always bad. It creates a market in real estate and produces liquidity.

Fourthly, they make the point that the member for York-Forest Hill made --

Mr. Singer: The member for Riverdale is chuckling.

Mr. Shulman: -- which is the matter of the flight from the dollar and the fact that inflation is forcing people to look somewhere else than government bonds and bank savings accounts to put their savings. And the logical place today -- let me say it -- if you wish to protect your savings, is to buy your own home or to buy a piece of real estate.

Hon. Mr. Grossman: How about insurance?

Mr. Shulman: Oh boy -- no sir.

Hon. Mr. Grossman: I have got a lot of money I can borrow at six per cent.

Mr. Shulman: In No. 5 they point out the 10 per cent you allow for carrying charges is completely inadequate. Go out and try to get a mortgage today, Mr. Speaker.

Hon. Mr. Grossman: Borrow money at six per cent.

Mr. Shulman: You are going to have to pay 11, 12, or 13 per cent for a mortgage. The government is allowing 10 per cent for carrying charges. When it dreamed up the bill, perhaps it was 10 per cent -- but it is not 10 per cent any more. It is not 10 per cent. Things are changing too fast.

“6. The condition requiring a 20 per cent improvement to exemption of the tax is unrealistic.” And they give examples of that. I won’t go into the details.

Under 7, they say, “This tax, if it is to meet a specific problem at this time, should be put on for a certain period of time.” But there is a danger there, which of course is pretty obvious.

As the member for York-Forest Hill says, how are they ever going to take this tax off? Let’s suppose we have a depression five or 10 years from now, perhaps one year from now, and nobody can sell real estate, and the government wants to get that tax off to encourage people to come in. Does the minister realize what happens if he takes it off as of any specific day? All those who have gone before will literally feel they have been --

Mr. Deans: Yes, without being kissed.

Hon. Mr. Meen: If there is a depression there will be no tax.

Mr. Shulman: Whether there is a depression or not --

Mr. Singer: Is that what the member is hoping for?

Mr. R. F. Nixon: That sounds like “turn down the thermostat.”

Mr. Shulman: Whether there is a depression or not we will still have the tax because we have inflation.

Hon. Mr. Grossman: The commodities market is so much simpler.

Mr. Shulman: I can’t explain to these people. I have tried and tried; they just can’t understand it.

Hon. Mr. Grossman: Why is he reading the advice of a socialist organization?

Mr. Shulman: I made a special point of writing a letter to the member for Brant; I printed it somewhere but he still doesn’t understand.

Mr. Ferrier: He is a great investor in Cara, that’s all.

Mr. Shulman: You see, the one thing that the minister is ignoring --

Mr. Singer: It’s a pity no one in the world is as smart as the member for High Park.

Mr. R. F. Nixon: Farmers produce the futures and he profits from them.

Mr. Shulman: That seems fair.

Mr. Lewis: Well, the whole party is sinking.

An hon. member: How come he is reading from an NDP report?

Mr. Shulman: Mr. Speaker, one of the facts of life with us today is inflation, and the minister and the government -- and I guess not just this minister and this government; we have another government in Ottawa -- they all have the tattoo, “Maybe it will go away. If we don’t do anything about it, maybe it won’t get any worse; then next year it will get better.”

Mr. Gaunt: The member’s party supports them in Ottawa.

Mr. Shulman: My party is no better. I confess that. We are all in this same horrible --

Hon. Mr. Grossman: Will the hon. member repeat that?

Mr. Shulman: I’ll repeat that. All politicians love to get up and say, “Elect us, and we will give you more.”

Hon. Mr. Grossman: Except the hon. member.

Mr. Shulman: I am not running for re-election again. There is no problem. I am the only guy in here who can speak the truth.

Hon. Mr. Grossman: I think the hon. member said that the last time.

Mr. Shulman: I am not seeking re-election. I don’t have to say the things that the hon. minister has to say in order to get re-elected.

An hon. member: Does the hon. member mean he was telling lies before the last election?

Mr. Givens: The hon. member’s leader looks relieved.

Mr. Lewis: Well, the member calls it as he sees it, I guess.

Interjections by hon. members.

Mr. Shulman: It’s easy now; it’s easy.

Hon. Mr. Grossman: Why is everybody a statesman when they are on their way out? Why wasn’t the hon. member a statesman before?

Mr. Shulman: I wanted to get re-elected.

Mr. MacDonald: You know what a statesman is -- a dead politician.

Interjections by hon. members.

Mr. Shulman: Inflation is going to get worse; there is no way that it is going to be reversed. The policy at Ottawa is to print more money, to live beyond our means, and the people in the government seats at Queen’s Park must accept that fact and draw up their legislation accordingly. This legislation gives no consideration to that whatsoever, because the ordinary fellow, who is not a land speculator; he’s not going in and out and buying and selling -- perhaps he is a doctor who bought an office on Roncesvalles Ave. --

Mr. Lewis: Don’t give the address.

Mr. Shulman: -- and who, because of inflation, has seen the value of his office go up every year, even if there is no real increase in value. A building that was worth $30,000 last year and sells for $40,000 this year is not really bringing much more, if any more, true value to the person who sells it, because he ends up with paper money and since everything has gone up in price, that paper money will buy less.

The minister has completely ignored this whole inflation factor. Inflation in this country was running at a rate of 12 per cent a year as of last month. By the end of this year it will be up over 16 per cent. The minister is allowing 10 per cent every year to cover all of the costs, including the mortgage. It just is completely unrealistic. Well, we go on.

Under 8, they say, “If this tax brings in enough revenue, this may just be the thin edge of the wedge.” And they are worried that from here the government’s going to go to commercial and industrial properties. Actually, I have no great objection to that.

“9. It appears that subdivisions will not qualify for exemptions even though the services have been installed. This would mean that the original developer will have to build on the lots. What effect will this have on the small builders?” Well, the minister has heard that from everyone. I presume he is going to bring in some sort of amendment to solve that problem. How he is going to do that without completely finishing off the bill, I don’t know, but let’s presume he has an amendment that will do that and still leave it some teeth.

Perhaps most important: “10. This tax will encourage the raising of rents” -- and I think it is self-evident. There is no question that as costs increase, and costs are going to increase, as supply lessens and supply is going to lessen, obviously the person who is in that house or in that apartment is going to be forced to pay the cost. Rents are going to go up. If the minister thinks otherwise, he is having a pipe dream.

I hope he doesn’t pay any attention to the idea of bringing in rent controls because that won’t work for another reason.

Mr. Givens: Bring in rent controls.

Mr. Shulman: The member knows why that won’t work.

Mr. Givens: The member’s party wants them.

Mr. Shulman: No, we don’t. Do we? Do we want rent control?

An hon. member: Absolutely.

Hon. Mr. Grossman: Which party? He doesn’t have a party. The guy hasn’t got a party. He has formed a new party.

Interjections by hon. members.

Mr. Shulman: Well, let me say a word on rent control. There is only one thing wrong with rent control. Rent control is lovely.

Mr. Lewis: I knew he would come around.

Mr. Shulman: I have experienced it two or three times myself. Rent control is great. If you are living in an apartment and they say your rent from here on in is going to be at the same $100 a month you have been paying right all along, that is wonderful as long as you live there, great and wonderful. When you go, you can sell the key for $1,000 and you can make money. It’s fine all the way along. There are only one or two minor things wrong. All apartments stop being built. There is no reason to build any more. How can you when it becomes non-economic?

Interjections by hon. members.

Mr. Shulman: If you exempt new buildings from it, what happens is that the old buildings become slums because they are not maintained. What is the point of putting money into maintaining it when you are not making any profit? Ultimately we get a New York City or a Chicago or a Philadelphia where landlords walk away from the buildings and they become gutted wrecks.

Hon. E. A. Winkler (Chairman, Management Board of Cabinet): I bet the member is going to go back in the stock market.

Hon. Mr. Grossman: What does the minister mean “go back?” He never left it.

Mr. Givens: Has he looked at the stock market lately?

Mr. Shulman: When I go back, it will recover itself.

Hon. Mr. Grossman: He is going to invest in dentures.

Mr. Shulman: All right, their tenth point is the tax will encourage the raising of rents, and I don’t think anyone can possibly argue that. I mean it’s just plain common sense that six months from now or a year from now, if the government foolishly goes ahead with this tax apartment rents are going to be considerably higher right across the province.

11, they recommend that apartment buildings should be considered commercial enterprises.

12, they recommend that all income-producing investment properties, except single family dwellings, be exempted.

13, they recommend that single family residences be exempted, provided they are held for a period of three years or more.

14, and again this is rather an important point and is of some interest --

Hon. Mr. Meen: What does the hon. member for High Park think about that suggestion?

Mr. Shulman: 13 or 14?

Hon. Mr. Meen: The one about three years.

Mr. Shulman: I think one should have a graduated period of time. I think the member for York North had a pretty good idea where you graduate, that depending on the number of years that you hold the property, the tax be reduced accordingly. I think that’s just plain common sense. I presume that’s one of the minister’s amendments. If it isn’t, it should be.

There’s a disadvantage to that, though. I hope the minister realizes what the danger to that is, that it is encouraging people to keep land off the market, because if the longer they hold it, the less tax they have to pay, there is a great inducement to keep the land off the market. So there’s another trap the minister better think about before he jumps into that particular hole.

An hon. member: Then we will put the realty taxes up.

Mr. Shulman: Okay, put every tax up; that’s a good rule to suggest.

14, they suggest exemption from the speculative tax of any person or company which buys raw land and develops it. This is one of their key points that they are making here. There s a great temptation to follow their suggestion but if the minister does he has gutted the bill. There’s nothing left.

This is what that socialist organization in Hamilton was suggesting. I don’t agree with a number of the points they make, for very obvious reasons, but I think they have to be said because a lot of their points are valid. A lot of the points that have been raised here by various persons that I have heard speaking are valid. What it really finally boils down to is that the government is not going to catch the people it thinks it is going to catch. Nobody is an idiot. No one is going to pay a 50 per cent tax to the minister and another 50 per cent tax to the federal government and end up making nothing. Why should they? What they are going to do, wherever possible, is steer out and steer into things where they will avoid this. Don’t build this --

Hon. Mr. Grossman: It is not there to catch people. It is there to develop more land for housing.

Mr. Shulman: But it isn’t going to do that.

Mr. Lewis: That’s right. That’s it. Some day they will understand that over there. Maybe they never will.

Mr. Shulman: I am delighted --

Mr. Lewis: What is the point in this bill? It won’t do it.

Hon. Mr. Grossman: That is a matter of opinion.

Mr. Shulman: -- that the minister has gone on record as saying that that’s what they want to do.

Mr. Lewis: So has the Minister of Revenue and so has the Treasurer. They have all gone on record.

Mr. Shulman: I am glad they are on record, because if that is what they are trying to do, they had better hold that election fast.

Mr. Lewis: That’s right.

Mr. Shulman: A year from now they are going to have an awful lot of red jam on their faces because there is no way that that can encourage anyone to build.

An hon. member: Right, the government shouldn’t try. Is that it?

Mr. Shulman: It should try, but try intelligently.

Mr. Givens: The government is 10 years away from development.

Mr. Shulman: Perhaps it is not sensible to ask the minister to proceed intelligently. I think he should bring in a bill to do exactly what he wants to do, and this bill is not it. This bill cannot do it. This bill is going to do exactly the reverse. It is going to increase the cost. It is going to increase the rarity. It is going to decrease the number of people who will be able to buy their homes. When I see what the government’s purpose is and when I see how it has tried to carry it out, I fear for it. I fear for the government and I fear for all of us, because the housing crisis is going to affect us all. The other members have all gone on record, now I want to go on record.

Hon. Mr. Grossman: It’s a courageous government.

Mr. Shulman: I have one piece of advice to give the government: It should hold its election fast, because my prediction is that a year from now housing is going to be much scarcer and much more expensive by at least one-third across this province, and the government’s bill is going to do it.

Mr. Givens: And I’ll give odds on that, too!

Mr. Lewis: Yeah, the government is really speculating in land with this bill.

Mr. Shulman: They can save themselves yet. There are two ways they can save themselves.

Mr. MacDonald: It’s even more misconceived than the energy bill, though it isn’t blowing up in their faces as dramatically.

Mr. Shulman: Not as quickly. There are two ways they can save themselves: One is to hold a real fast election, because the public has been fooled and the press has been fooled. There is the foolish representative of the press.

Mr. Deans: No, no. There’s the representative of the foolish press.

Mr. Shulman: Pardon me, the representative of the foolish press. Sorry, I got it wrong.

The government has managed to fool the public and it has presented a very pretty package. If it holds its election fast it’ll come back in, it’ll have its government again, and it’ll have carried it off. But if it waits, they’re going to find out.

There’s another way the government can get out of it.

Mr. McIlveen: The member won’t be running any more.

Mr. Shulman: No, I’m going to watch from the sidelines and cheer everybody on -- at them all.

Mr. McIlveen: There’ll be another Conservative from High Park.

Mr. Shulman: I would doubt that very much.

Mr. Lewis: No, no there won’t.

Hon. Mr. Grossman: Knowing the member, he’ll be selling apples on the street.

Mr. Shulman: Jeer and cheer.

There’s an easier way, you know, because elections are nasty things and some of the members might even be beaten and this would cause great regrets all around. We would hate to lose any of them from this august company. They all fit in so well!

Mr. Lewis: Not to mention some on this side of the House.

Mr. Shulman: There’s another solution. Instead of a vast election why doesn’t the government do the sensible thing, and I suspect it knows it’s the sensible thing even though it can’t even give me a nod of agreement. The sensible thing is take the bill out -- quietly say, “We’re going to reconsider it.” There’s nothing wrong with a government admitting they’ve made a mistake and that there’s a better way of doing things.

Hon. Mr. Grossman: The member really thinks we should do that, does he?

Mr. Shulman: The government has done it before. It has said: “Look, this bill requires more consideration. Let’s take it back. Because it can do what it’s trying to do.

Mr. Givens: Put your seatbelts on.

Mr. Shulman: It can do what it’s trying to do without crippling the housing market, and without crippling the land market in the province -- if it just gives its people a little more time. They’re now aware of what the government wants to do. What it should have done is very obvious. It should have come and said, “Look, we want to bring in a bill that does the following,” and said it publicly. It should have said, “We’re going to hear from any delegation that wants to for two or three months,” or a reasonable period of time, and it wouldn’t have run into all this nonsense.

But it’s not too late. There is nothing wrong with saying, “Look, we’ve listened to the opposition, we’ve listened around the province, we can improve things.” Don’t be stubborn; don’t be foolish, because the government is really cutting its own throat plus that of all the people in Ontario who want to own a home.

Mr. Lewis: That’s right.

Mr. Shulman: I can see by the frozen face on the minister he’s not going to follow my advice. So, all I can say --

Hon. Mr. Grossman: Every tax collector looks like that.

Mr. J. E. Stokes (Thunder Bay): The provincial secretary knows, eh?

Hon. Mr. Grossman: No feeling, no emotion.

Mr. Lewis: That’s right.

Mr. Stokes: He’s had the experience.

Mr. Shulman: I think perhaps the minister has a slight feeling of unease just about now.

Mr. Lewis: I hadn’t noticed it.

Mr. Deans: It’s just because he’s been sitting for an hour.

Mr. Stokes: It’s those tacks he’s sitting on.

Mr. Shulman: I predict, Mr. Speaker, the minister is going to ruin the housing market in the province, and the election a year hence will be fought on his mistake.

Mr. Lewis: That’s right. That’s right.

Mr. Shulman: And it may very well be that he -- and it’s quite unfair, it should have been that other fellow who’s in Europe -- but it may very well be that he will be the minister who ultimately goes down as the man who destroyed the Tory government and brought into power some other party. If so, at least his name will be in the history books -- and with that thought I leave him.

Mr. Givens: That’ll be known as the Meen test.

Mr. Speaker: The hon. member for Peel South.

Mr. Lewis: Land and housing, those people opposite can’t cope with.

Mr. Kennedy: I wanted to --

Mr. MacDonald: Is the member going to talk about the land transfer tax?

An hon. member: Go after them, bulldog.

Mr. Kennedy: Not right now. The member doesn’t understand it even yet.

Mr. Lewis: This bill will destroy the housing market in Ontario. There’ll be nothing left of it after this.

Hon. Mr. Grossman: Who said there wasn’t any before?

Mr. Kennedy: Mr. Speaker, my --

Interjections by hon. members.

An hon. member: -- the greatest housing programme in North America.

Mr. Speaker: The hon. member for Peel South has the floor.

Mr. Lewis: Well then, let him speak, for God’s sake, if he has the floor.

Mr. Kennedy: I think I lost a double turn, Mr. Speaker.

I think my colleague, the minister from St. Andrew-St. Patrick (Mr. Grossman) expressed the thought. The idea is to put more lots on the market. No question about it, that’s what the intent and the thrust of this bill is. Last year it was omitted by the opposition, who are the NDP, to acknowledge in describing --

Mr. Lewis: None of that.

Mr. Renwick: This has to stop.

Interjections by hon. members.

Hon. Mr. Grossman: Excluding the member for Lakeshore; pardon me, the member for High Park.

Mr. Kennedy: All right. I’ll tell members who I included. The member for Riverdale mentioned something to the effect of a disastrous housing policy.

Mr. Lewis: Absolutely.

Mr. Kennedy: Yes, but I think the member should be reminded that the 110,000 dwelling units that were put in place in this province last year was the greatest ever in the history of the province.

Mr. Lewis: A mere pittance.

An hon. member: A pittance.

Mr. Kennedy: And that’s a disaster? Onward and upward every year.

Mr. Lewis: It’s nothing. The government is 150,000 units behind and this bill will put it further behind.

Mr. Kennedy: It’s still more than ever and this is designed to assist.

Mr. Renwick: The government can’t even keep pace with the climbing birth rate.

Mr. Kennedy: But I’ll say this, Mr. Speaker -- this bill needs something to accompany it. My suggestion is that concerted action on the installation of services by the various levels of government, whichever ones are involved, would provide a double whammy which would achieve the objective. I don’t think a suppressant without the encouragement of the real installation of these services will enable any programme to go forward.

Like the other members, I’ve had some inquiries and observations about the bill, mostly, initially and subsequently, with respect to concern for the small builder. I think it’s been quite well discussed here and I don’t think there is any need to add anything. We want more lots available for the small builder and every other type of builder, not fewer.

Mr. Stokes: The small builder says he is not going to get it.

Mr. Kennedy: Pardon?

Mr. Stokes: The small builder says he is not going to get it.

Mr. Kennedy: I know he does, and what we want to say is that he will.

Hon. Mr. Grossman: We’ll look after him.

Mr. Kennedy: We want to design this bill and the regulations that accompany it so that he will get more lots. This is the whole object of it.

Mr. Young: Why didn’t the government do it before the bill was brought in?

Mr. Kennedy: As I said on the previous bill, fools and bairns shouldn’t see things half done.

Mr. MacDonald: This bill certainly is half done.

Mr. Young: Why didn’t the government do it then?

Mr. Kennedy: I don’t see any bairns, Mr. Speaker.

One thing that bothers me is land which is potential development land being held out of use through inappropriate zoning. The zoning has to be changed. Although the owner, the person holding this land, may be working toward this end as diligently as he can, it hasn’t had approval for the desired zoning, perhaps by virtue of the fact -- or lack of virtue of the fact -- there aren’t services, or for whatever reason. During this period of time escalation is carrying on and this person who would sincerely want to bring this land onto the market cannot do it, not because he is holding it and waiting for escalation but because it is something presumably beyond his capacity to get rezoned.

I’ve also had some concern with respect to commercial and industrial land which is exempted according to the explanatory notes. A situation I know of concerns a block of some 118 acres with a low assessment; services are nearby, adjacent, ready to go; the owner is presumably holding the land. He is not putting it on the market and there could be any number of reasons. I can --

Mr. R. Haggerty (Welland South): Low assessment.

Mr. Kennedy: It could be low assessment; it could be waiting for a further hike in value; and what I think is a significant reason probably is as a tax haven. Without this bill there is, of course, the corporate tax --

Mr. Givens: The income tax.

Mr. Kennedy: Yes, the corporate income tax, that’s right; the corporate income tax and capital gains tax.

Mr. Givens: Why should that be exempt from speculation tax?

Mr. Kennedy: That’s a good point; that’s what I’m talking about.

Mr. Givens: That’s the point I raised.

Mr. Kennedy: That’s a good point and the member did raise it.

Mr. Givens: All right; that’s the point I raised and that’s what a lot of people think now.

Mr. Kennedy: I intended to make reference to the member’s remarks, which I listened to very attentively.

This particular block of land, as a matter of fact, has a lower assessment than a five- or six-acre greenhouse, the owner of which has been there for a number of years, struggling to make a living in that field of endeavour. He’s assessed two or three times as much per acre as the man I mentioned before.

As one goes up the street -- it is Dixie Rd. I speak of -- there are indications of blocks of land held there. There is a crying need for industrial land, and yet for numerous reasons this isn’t coming on the market. I think situations such as this should have some examination.

Mr. Stokes: How is this bill going to do anything to help?

Mr. Kennedy: Pardon?

Mr. Stokes: How is this bill going to affect it?

Mr. Kennedy: It isn’t; this is the point I’m making. I think we have to go a bit further and have a look at these situations.

There are also other blocks of land which they want to bring on the market but perhaps the services aren’t there. There are potential services and the escalation taking place is based on potential value; and of course that is what speculation is all about.

Another sale was brought to my attention. I know over the course of the last couple of years we’ve heard of cases where land is bought and sold almost overnight with a great hike in price. This is a case -- in Oakville, I think it is, the legal description isn’t that precise -- where 150 acres were sold on June 21, 1973, and the price was $1,119,025 which is at the rate of $7,460 an acre. It was resold two months later -- the date of registry is Aug. 31 -- for the sum of $1,715,880; which is an increase of $596,000 --say $600,000 -- on this piece of land in two months.

The price per acre therefore went from $7,460 to $11,439. This isn’t unique. I don’t have the detail as to the zoning, unfortunately, so I don’t know what transpired here; but $600,000 in a couple of months isn’t bad.

Obviously these people aren’t in this business for their health. One has to take into account, and I’m sure they did, income tax, corporation tax, capital gains, the whole bit. Although the hike is $600,000, I wonder what the true profit to the vendor is? It will be interesting to know if there has been a subsequent sale and what’s happened in that situation.

The 150 acres is still there. It has served nobody except perhaps the federal government with the tax revenue it would receive from it and, of course, we don’t need to bleed for the principals in it either, I wouldn’t think. It is this type of thing, I suggest, Mr.

Speaker, that this bill is aimed at.

The members have mentioned certain com- plications, and we’ve picked things out which have been brought to our attention --

Mr. E. Sargent (Grey-Bruce): Tell the Minister of Agriculture and Food what the member said about him.

Mr. Kennedy: Pardon?

Mr. Sargent: Tell the minister what the member said about him.

Mr. Kennedy: He’s the best minister we’ve ever had in the field of agriculture.

Hon. W. A. Stewart (Minister of Agriculture and Food): I’m glad the member was reminded.

Mr. Kennedy: That’s what they said. I’m glad the member drew that to my attention.

Mr. Sargent: It wasn’t good.

Mr. Kennedy: So the principle of the bill, Mr. Speaker, is sound. I’ve pointed out some things that are bothering people, some of the technical details of it. I again suggest that it has to go in concert with other aspects of the development of housing. The intent is to bring more lots onto the market, not fewer lots. And it is not to inhibit, or penalize or suppress the development or the production of housing for the people of Ontario.

Mr. Singer: Is that what the statute says?

Mr. Kennedy: Right, right. And that’s what it’s going to do.

Mr. Singer: Is that what the statute says?

Mr. Good: Mr. Speaker I’d like to speak briefly on the principle of this bill.

Hon. J. T. Clement (Minister of Consumer and Commercial Relations): He would be the last one to let Downsview down.

Mr. Good: It is apparent in the Kitchener-Waterloo area that land prices have gone beyond reason especially land that is required in the immediate future for residential purposes. This is the sad part of the situation in the Province of Ontario, Mr. Speaker, because that land which is needed most for the development of residential units, both single family dwellings and multiple, high-density buildings, has inflated beyond all rhyme and reason. I would like to just quote from the Kitchener paper and to say at the outset I agree with the principle of trying to do something to take the middleman out of the land business, that is the speculator. I would like to make a few references to what has happened. Here is a quote:

“In the twin city area at the present time, housing costs have risen to become the third highest in Canada, exceeded only by Toronto and Vancouver.”

This situation, Mr. Speaker, is not right. Something is drastically wrong. I would like to try to relate a little bit of what has caused this. The figures shown in the release of last fall are somewhat old, but they do give the average amounts that housing costs in the three most expensive municipalities in Canada. Vancouver they show at $38,562; Toronto, $41,264; and Kitchener-Waterloo, $35,831.

Now, since last fall, Mr. Speaker, these figures have escalated considerably beyond that. But there’s no reason why a municipality -- a relatively small community in comparison to some of the larger municipalities -- should be living under the pressure that we are living under in the development of single family lots in the twin city area.

One of the reasons for this, of course Mr. Speaker, is that there are what the local papers describe as five “power blocs” controlling 80,500 acres of land surrounding the twin cities. These five power blocs are made up of companies with interlocking directors. In all, there are about 29 companies, many of which own only one small parcel of land. That is, a few small companies will own one farm, maybe two farms, so that numerous small companies have been developed and make up five large syndicated groups which own most of our development land.

These five companies owning 8,500 acres of land own all the effective development land around the twin cities; and because these development companies have bought up so much land, they find their holdings costs have escalated proportionately. The reason given as to why they have to keep so much inventory of land is that they’re trying to get a jump ahead of the speculators. And when a development company has to buy from the speculator a piece of land which has been turned over two or three times in the last two or three years, the development company is then the victim of speculation in the same way as anyone else.

I think we must agree, Mr. Speaker, that those who are legitimately in a development business do need an inventory of land. It is the basis on which they can keep in business. With the length of time which is required to bring a subdivision on the market from the original stages, it would be ridiculous if a development company that develop lots either for sale or for building didn’t have a proper inventory of land.

Mr. Young: The province owns enough up there.

Mr. Good: The reason given, of course, is that they must buy so much additional land to try to keep ahead of the speculators.

One of the largest speculators in the area has been Ontario Housing Corp., which owns something around 3,000 acres of land on the one side of twin cities and another 200 or 300 acres on the other side. This land has been held for a considerable time. It was all class 1 farm land. It cannot be serviced presently. It has been held for about six years, but it has had a terrific effect on driving up the prices of land, especially the 3,000-acre parcel which is in the vicinity of the airport.

It has, of course, set off a flurry of land buying in the Waterloo-Wellington airport vicinity and the price of that land, which could be developed and probably will be, eventually, for industrial as well as residential use, has been driven up considerably beyond what is practical for normal development.

Statistically, Mr. Speaker, one parcel of land was bought for $41,000, resold for $81,000, and sold again for $155,000. Another parcel of 150 acres showed a profit of $1,492,000 as it changed hands. Another parcel showed a profit of $557,000 as it changed hands -- not to developers, but from one owner to another owner before it ever arrived in the hands of a developer. Another parcel showed a profit of $1,200,000 and it has now been sold to a developer. Another parcel showed a profit of $603,000.

The final example, Mr. Speaker, is a parcel of land which was first bought for $150,000, resold for $372,000 and again it has been resold for $650,000; and it still is not in the hands of a developer who is going to bring it into service. So here we find the developers bemoaning the fact they have to pay so much for their land for the simple reason people are turning it over, shuffling paper and issuing cheques as the hon. member for Downsview said, without adding anything substantially.

In principle, I agree there must be something done to discourage people from simply turning over land as a form of investment. I think we must look at the whole matter of speculation. Most of the speculation in the Province of Ontario, I think, is done in two areas: First on recreational property, waterfront lots; and secondly on residential land which eventually will end up as housing lots. Granted we can’t create any more waterfront land in the province. There is only so much waterfront land in southern Ontario and the demand for it is exceedingly great.

The demand for residential land is also exceedingly great but something can and should have been done, and I hope will be done, to increase the supply of residential land which will cool down the speculation fever. Nothing can be done to --

Mr. Singer: Where is the legislation to do that? The minister shouldn’t wave his hands because the government is not doing it.

Mr. Good: Nothing can be done, Mr. Speaker, to increase the supply of recreational waterfront land, so we are going to have to deal with a situation where we have three buyers chasing every cottage lot; even if one can be found, which I doubt. But why we don’t see brought before us legislation which would drastically increase the number of serviced lots and the amount of land brought in for development, I am at a loss to understand.

Mr. Speaker, any investment with a 10 per cent return will double itself in about 7 1/4 years. A few years ago we would have called that an exorbitantly high rate of return on an investment. When interest rates were five and six per cent we talked of 15 to 17 years to double one’s money.

Speculation is in the mind, the social conscience of the community, as to how fast one should get a return on an investment. When one makes an investment and gets a proper return, no one thinks anything of that. And it is not too many years ago when doubling your money in 15 years was considered a reasonable and socially accepted investment. Now we find that at 10 per cent one can double money, with compound interest, in about 7 1/4 years.

Mr. Sargent: Or be a member of the cabinet. Either one.

Mr. Good: Well, one is as good as the other, yes.

We find that even at 10 per cent, an investment is not a very good hedge against inflation, as we have seen in the last few years. All one is doing is keeping even with inflation. One is not building up one’s equity to create buying power any greater than what one had at the beginning of the term of investment.

So, we have a graduated scale here, where we say if a person makes money at the rate of 10 per cent and doubles his money in 7 1/4 years, perhaps that is socially accepted; but if a person invests in something and doubles his money overnight, one wonders whether our society can accept increases in investment and return like that.

As the leader of my party has said, people have turned to land, looking for that quick investment. First, I think many people turn to land as a hedge against inflation, and rightly so, as I said in my contribution to the Throne Speech debate. But every person in the province who wants to should be in the position that he can buy his own house, because it is the only hedge against inflation on which he can really count. But we don’t even have, in this province, that condition where each person can buy his own house.

Mr. Singer: He can’t afford it.

Mr. Good: That is the sad part of this whole land and house situation, that the supply has not been equal to the demand. And the responsibility for this situation --

Mr. Haggerty: It lies over there.

Mr. Good: -- has to rest on the shoulders of the government, which has been completely directing land-use policy across the province in the last number of years.

Mr. Singer: Right. To their great shame.

Mr. Ruston: Five years.

Mr. Good: If we say that it is socially acceptable to double one’s money in a certain period of time, but it is unacceptable to double one’s money overnight, then I think that the idea of a graduated tax has great merit. If one is to invest in GICs, bonds, land, an art treasure, diamonds, jewellery or gold, no matter what, I think that in our present system a reasonable return on his investment is quite acceptable.

If that return on investment, whether it be land or be something else, is beyond what is socially acceptable, I think an increased tax of 100 per cent, 90 per cent or 80 per cent, down to what we consider to be the proper return, would be acceptable by people in this province. I think the day has gone when we say: “There’s a smart cookie. He made $100,000 overnight.” I think many of us are ready to accept that, because we find that the method of taxation must be related to the return to the individual.

It’s going to be a very interesting point, how one handles the profit, with a 50 per cent provincial excess profits tax, a federal capital gains tax, a federal income tax and the profit goes to charity. I don’t know how one would handle a situation like that.

Mr. Singer: When you get up to 112 per cent, there’s no problem.

Mr. Good: Mr. Speaker, there are things in the bill that concern me a great deal. When we look at the exemption clause, we find that sale of land by a corporation that is winding up its affairs and dividing its assets to shareholders is exempt. I wonder if that provision (c) will leave the door open for many small companies to be formed simply to speculate on land, sell their one parcel of land and distribute the profits to the shareholders.

There are, as I mentioned before, 29 individual small companies that are recorded in this one article in the Kitchener paper as owning small parcels of land, and some larger parcels of land. It is a very simple matter to take a profit, wind up the company, distribute the assets and start over by incorporating a new company. Any lawyer will do it for you for $500 or $700; maybe it’s $1,000 by now, I don’t know.

An hon. member: Hey, wait a minute, wait a minute. Don’t go --

An hon. member: Don’t go setting fees.

Mr. Good: All right.

Mr. Singer: Well, it all depends on the circumstances.

Mr. Good: So I think that section (c) is a loophole which will have to be plugged and I don’t understand the reason for it being there, Mr. Speaker.

By increasing the values of land by 40 per cent or more to evade the tax, I think that is also a loophole that could be abused. It would be a simple matter to buy a partially completed house. And believe me Mr.

Speaker, the speculation on completed houses in our area has just been something unconscionable. Houses have changed hands, without anyone living in them, for $10,000 or $12,000 or $15,000 more than the safe price by the builder.

The city of Kitchener had to apply for private legislation to prohibit the speculation on houses which are built as the city’s special development houses. These are houses serviced to a lower degree and sold at a fixed price. So we find there is speculation, not only on raw land but also on housing.

I think the tax could be evaded quite successfully if one were to buy a partially-finished residential house at a price lower than the sale price, then spending 40 per cent of that price by putting on the roof, putting in the plumbing and the wiring and the heating, and then selling -- having added that much to your purchase price you could evade the tax.

Hon. Mr. Grossman: Come on.

Mr. Good: Someone will be doing that before this bill even gets cold and the ink dries on the paper.

I think, Mr. Speaker, there are other things that show great deficiencies in this bill. One with which I am concerned, of course, is what is going to happen to the small builder who is in the habit of buying 10 or 15 lots a year from a large developer. We have numerous examples of that in the twin cities, where the major developers will sell ten lots or a part of subdivision to one builder, another street to another builder. This goes on and on and that is the only source of supply for those small builders. And if they are prohibited from doing this, Mr. Speaker, you will find that a lot of small builders will be put right of business; because in the twin cities today it’s impossible to buy a lot and build your own house. You have to buy it as part of a building contract.

Mr. Singer: Right.

Mr. Good: And this government is going to destroy that whole business.

Another thing, Mr. Speaker, I think the minister should also give serious consideration to people who presently own parcels of land on which a registered plan of subdivision has already been approved.

I am thinking of the case of a widow who called me two weeks ago. She has a registered plan of subdivision in a recreational area, and it is her purpose to sell two or three lots every year as long as she lives as a source of income. It took this woman and her husband about six years to get this plan approved. Her husband, unfortunately, passed away last year.

Mr. Singer: Is that the new speed-up they have over there?

Mr. Good: She got the approval last December and is ready to sell a few lots each year. There is no way she wants to get involved in building cottages or houses on these lots. People who buy these lots from her invariably want to build their own cottage or retirement home. I think that there should be an amendment written into this legislation to protect the person in that situation. And also to protect the person who wants to do nothing but go through the nightmare of trying to get a registered plan of subdivision approved and then sell the lots. I think on the original sale there should be some exclusion made from the tax.

I understand the purpose of the bill. I wish the government success in trying to make it work. I think it is going to be a nightmare, but I hope it does achieve the purpose for which it is intended.

Mr. Lewis: Well, if it is going to be a nightmare, why is the member supporting it?

Mr. Good: Because it is the only thing that has been brought forth that might happen to work.

Hon. Mr. Stewart: That is right.

Mr. Lewis: The member heard what the member for York-Forest Hill said. How can it work?

Mr. Singer: The member for Scarborough West is on the wrong side of this one.

Mr. Speaker: The hon. member for Windsor West.

Mr. Lewis: Oh, come on.

Hon. Mr. Grossman: He miscalculated this one.

Mr. Givens: The leader of the NDP should listen to the member and hear his speech.

Mr. Lewis: Never have we been so virtuous as on this bill.

Mr. Speaker: Order, please. The member for Windsor West has the floor.

Mr. E. J. Bounsall (Windsor West): Thank you, Mr. Speaker. The purpose for the government bringing in a bill of this kind is one which we would normally support here in the New Democratic Party. That purpose, as stated by various members on the opposite side, is to make more land available for Housing at reasonable prices.

Mr. Lewis: That’s the principle.

Mr. Bounsall: That is the purpose and principle of this bill. However, this bill, An Act to impose a Tax on Speculative Profits resulting from Disposition of Land, fails abjectly to achieve either objective. In fact it defeats the purpose and that is why we on this side find it difficult, if not impossible, to vote for this bill.

Mr. Givens: That is not what the member told the Windsor Star, though.

Interjections by hon. members.

Mr. Bounsall: We will make it very clear what was told.

Mr. Givens: That’s not what it says in the paper.

Mr. Bounsall: We will make it very clear.

Interjections by hon. members.

Mr. Bounsall: If the member would like to stay and listen we will make it very clear what was said.

Interjections by hon. members.

Mr. Speaker: Order, please.

Mr. Bounsall: Mr. Speaker, this party and I are not for speculators in any way, shape or form.

Interjections by hon. members.

Mr. Bounsall: I have not seen the article referred to in the paper, the Windsor Star. If that is what is quoted in that Windsor Star, that is not what I said. We all know in the Windsor area that from time to time, particularly on matters of this sort, the Windsor Star is not completely accurate.

The bill, in order to achieve this purpose, is going to try to remove speculators from the land business, or is going to attempt to remove the speculative profit from land. We all know who we mean by the speculators here. They come very readily to mind. They are those few wealthy individuals or speculative companies who buy land and sell it for a higher price without creating any improvement at all on that land -- often they get a much higher price -- making a very quick and unconscionable profit from this. It is all reflected inevitably and finally in the cost of the housing which gets built on that land, the cost of the entire unit.

Often the speculators trade and sell land to each other, between companies which have interlocking directorates, with no improvements done at all upon it, rapidly escalating the price of that land. All of which is passed on finally to the prospective home purchaser.

I firmly believe that this bill will not achieve the result of making either more land available or land at a reasonable cost let alone a lower cost.

The large speculator, of course, will always find a way around this bill. The large speculator, for example, holding land worth $300,000 or valued at that or even purchased since April 9 at that value, and anticipating selling it for $500,000, looking at the 50 per cent speculative tax, will simply say, “Okay, I’ll sell that land for $700,000. I’ll still get my $200,000 that I want to get out of this.” He will sell it for $700,000. In no way is that going to cause this land to be available for building at reasonable prices but it will push up the price in this example by another 40 per cent.

The bill itself requires that improvements be made on the land such as buildings built on the property. Another way around this bill, of course, is for the speculator not to sell the land. He enters into arrangements with the builders to whom in the normal course of things he would sell the land on which they would build. He enters into agreement with those builders. He doesn’t sell it to them but agrees with them that they will build on that land and the unit gets sold for whatever the speculator wishes the land to be evaluated at at the time. What happens to the builder, especially the small builder? In order to get land on which to build -- and he does not wish to go out of business -- he will enter into whatever agreement he has to enter into with the person who owns the land in order to perform his service of building the house. This really makes him nothing more than an employee of the land specula- tor. That’s an untenable position for the home builder to find himself in. He will become forever dependent upon the large speculator, much like the managers of the Becker Milk stores.

In terms of availability of the land, where is the small builder going to get that land this summer? Members all know that since the budget was introduced there hasn’t been one speculator or that much land at all has become available in this province. If at this stage the small builder has not already got his land on which he was planning to build his units in this coming building season, he is not going to get it. He won’t get it until this bill is passed with all the amendments which I wish we had before us to consider.

Until this bill is passed with those amendments, when they have been thoroughly threshed out in committee -- and I hope this bill will certainly be sent to a committee outside the House so we can do just that -- no land will become available throughout this entire period. When the bill does go through third reading in its final form there is going to be a further delay while the large land holders decide how they can get around paying this tax.

In the meanwhile, no more land becomes available. The small builder is not going to have any more land on which the build in this particular building season.

There are several other things which bother me because with the way the bill is written one can’t define the difference. One cannot draw a line. What about the small, individual person? The member for Waterloo North mentioned one in his remarks -- the widow who has decided to sell off small lots, having acquired a subdivision, in order to sustain her for the rest of her life.

What about the small operator of that sort, who has land, and goes through the expense and the time of getting a subdivision approved on that property? Normally that’s all they do and they have provided something of a service in so doing. There are many -- I don’t know how many -- but the small people involved in this situation must be quite numerous. These aren’t the big speculators we are talking about who have shuffled paper back and forth between companies, reselling and buying the same land and making great profits from it. These are small people who have a small number of lots available, who have got the subdivision and are now hoping and expecting to sell them off. They are caught in this bill.

So also are the persons, I gather there are a goodly number of them around the province, who have been in the business not of making unconscionable profits but of buying land which has been subdivided and putting in the services. These persons, in turn, sell it to the small builders in various bits and pieces. This, by and large, is the way building has been done in Essex county, as I understand it. One person is involved in the subdivision who sells it, but not at an unreasonable profit, to the person who puts in the services; he in turn sells it, but not at an unreasonable profit, to the builder.

The small builder is also concerned not just over the unavailability, to him, of lots this year and the delays in lots coming on the market for him to purchase, he is concerned about the first point I mentioned. That is, the large developer or the large speculator who has already made his profit after he’s added on the 50 per cent. Land will come into the small builder’s hands and he knows full well, because he builds only five, six or seven houses a year and he’s close to the persons who are buying these houses, that with interest rates being what they are and with an escalated cost of land in that building unit he just will not be able to sell that finished product now, which he has heretofore been able to do.

The minister needs very much to consider in the bill some way in which he cannot rule out entirely the small individual who has been engaged in essentially this type of what we would call services, and at the same time stop what we would all like to stop, the large speculator. But there is in this bill as far as I see it no way that one can draw that dividing line.

Perhaps the minister can tell us in some detail how one is going to ascertain the fair market value price for a piece of property, the valuation day being April 9. I would be most interested in the minister’s explanations of how he is going to arrive at that particular value for a piece of property already owned.

In terms of a bill that should be brought in, the only way that I can see that we would achieve getting more land on to the market at reasonable prices is to take the attitude that land must be a social resource, not a profit-making commodity at all, which could be bought and sold in the marketplace. For that to occur, a completely different bill to achieve these ends is necessary.

I think the government has got to get involved, to go out and carry through its oft-stated policy of land banking. But the government has to do it on a sufficient scale around the province that large amounts of serviced land become available. The land bank would be paying for that land -- simply original cost plus reasonable holding costs. The government then says that that land gets serviced by the various companies around this province who are in the business of servicing land. The government then puts those lots on the market for sale based upon those costs.

There is no profit being made by the government in that situation and that land would then become available on as large a scale as the government wishes to engage in the programme and at a price which is reasonable. Until there is a bill I can see which is workable, which this bill is not -- a bill which is based upon the principle that land is a social resource and not a commodity to be bought and sold and traded in the marketplace -- I will have to say that I cannot support this bill in this form. Thank you,

Mr. Speaker.

Mr. Riddell: Although I agree with the member’s philosophy, one should never kick a bleeding dog.

Mr. Speaker: The hon. member for Eglinton.

Mr. Reilly: Mr. Speaker, I find myself in agreement with many of the comments that have been made by members of the opposition -- even by my good friend, the member for High Park.

I find there are a number of things that have been said that I could support. Basically I think the bill itself is long overdue. I believe in the philosophy of this particular bill to impose a tax on speculative profits on lands that haven’t been improved. I think there is a lot of merit in this. I think the government has introduced a worthwhile bill but I think it is full of loopholes. But we have to start somewhere and we have started somewhere.

The member for Waterloo North indicated a number of instances from the standpoint of increased costs of land. If for no other reason, I should judge, he would support this bill.

It is not only in a metropolis like the city of Toronto and its environs where speculation occurs. I know of one instance where property changed hands five times, each time with increased profit, without anything being done on the land. This can happen not only in the city of Toronto but in an area like the city of Peterborough. There was a case there where the price started at $45,000 and went to $90,000 to $300,000, to over $600,000, and not so long ago the land sold at $1.3 million. Nothing has been done with the property except exchange it at a profit.

Mr. Riddell: Sounds like a Tory speculator.

Mr. Reilly: Yes, well there is nothing wrong with certain types of speculation in my book. I think that this is the wrong thing about the entire bill. The bill has been too encompassing. It started out with a large net and it caught too many fish.

Mr. J. R. Breithaupt (Kitchener): Mackerel, likely.

Mr. Reilly: If it had started out and got the speculator, I think everybody in this assembly would be happy. But it hasn’t done that. It has done more than that.

Mr. Speaker, at supper time tonight I received a telephone call from a constituent in my riding who said, “After the last war I took some of my proceeds and I put them in a fourplex. I didn’t want to put them in a GIC or a GSC or a bank deposit and I don’t invest in the stock market, but I did think I would put it into some kind of revenue-producing, income-producing property.” Since that time he’s done it two or three times. You may call him a speculator, but surely that isn’t the kind of person that you want to get in this net?

Mr. Breithaupt: That’s exactly it.

Mr. Reilly: Now, this man told me that he often would go down to that fourplex in his own time and do some odd repairs, making good, painting, doing whatever was necessary to save himself costs but increasing his investment. Now, unfortunately our bill encompasses many of these people who aren’t putting it in from the standpoint of a speculator but actually are trying to provide an annuity for themselves.

Mr. Givens: That’s right.

Mr. Good: The government won’t have to keep them.

Mr. Reilly: That’s right and in that particular case he said to me, “I haven’t asked for welfare and I am not asking for unemployment insurance and I am not asking for government assistance. What I want under these circumstances is a right to live with certain dignity. I want to, under these circumstances, invest for my future and prepare for it,” and there is no reason why he should be denied that right.

In my view, Mr. Speaker, there is a difference between that man and a person who buys a piece of property and six months later sells it at a tremendous profit. I think you should make a difference between him and that man who has a piece of property and has held that property for one year, or for five years, or for 10 years, or for 25 years. I think there’s a definite difference between the man who buys it and holds it for a period of time and works on that land and uses it for an annuity than the person who comes along and comes in for the first month, sells it six months later, and somebody else moves along and sells it maybe three months after that.

I think that if I knew what the amendments were perhaps I could go along with the other members in this House. They don’t know what the amendments are. What I can’t understand for the life of me is that the members of the New Democratic Party don’t support such a bill as this. I would have judged that under the circumstances they would be the first to endorse this principle.

Mr. R. Gisborn (Hamilton East): The member wasn’t listening.

Mr. Gaunt: The speculators’ party.

Mr. J. Dukszta (Parkdale): The member doesn’t understand the conception.

Mr. Reilly: Many of the points have been expressed here. It isn’t necessary for me to repeat them now. You know the effect that it has on a person who invests money in an apartment block, not a large speculator, maybe 12 suites, building his future that way. Let’s not deny him the right to work for himself and provide his own future. This is the appeal that I make to the minister.

I also suggest what has been said here before many times this evening, that we have to consider the small builder, if you want to call him such. Provision should be made for that man.

Let’s remember that the purpose of this is to get after those people who are exploiting, who are raising unnecessarily the cost of housing and the cost of commercial property. Those are the people who we are after.

I can give you personal experience where I have encouraged the members of my family to purchase houses over recent years. In one specific case, my daughter’s property increased within a period of two years from $50,000 to $100,000 value.

Now, these are the things that we are trying to prevent and I think the purpose of the bill is good. I think the idea behind the bill is good, Mr. Speaker. I think what the minister is trying to get at in proposing the tax is the speculator. My appeal to the minister in his amendments is to concentrate on the speculator and not to take away from some of these who want to earn their own living and provide their own future.

Mr. Speaker: The hon. member for Grey-Bruce.

Mr. Sargent: Mr. Speaker, across Ontario the people are waking up to find out how really inept this legislation is. I think of when Lady Godiva goes home and the guy says, “Where in the hell have you been, your horse has been back for three days?” I think the people are realizing just exactly what is going on.

An hon. member: Explain it.

Hon. Mr. Grossman: The member should speak up. Where was she?

Interjections by hon. members.

Mr. Sargent: In other words, we want to know just what is happening. What is happening here?

Interjections by hon. members.

Mr. Sargent: I’m glad we have the hon. member for York North here, and the hon. members for Peel South, Victoria-Haliburton (Mr. R. G. Hodgson) and Eglinton. They’re all going to vote for us on this; they’re going to vote against this, I hope. I think we’ll all vote against it unless we have many amendments to it.

Mr. L. Maeck (Parry Sound): The member’s leadoff speaker said the Liberals were supporting it.

Hon. Mr. Grossman: He isn’t listening to his leader.

Mr. Sargent: Well, we’ll see. I was very impressed by the remarks of my leader and of the hon. members for York-Forest Hill, Downsview and Waterloo North; they were right on target. I think the minister has made a lot of notes to amend a lot of things.

But basically I think that the free enterprise system is going to go down the drain if this kind of thing keeps on happening, because farmers and their forefathers, who have paid taxes on their farms for generations, now have been put in a position where they can’t sell them.

If the minister can’t make a distinction between a man who holds a piece of land for six months and sells it, and the farmer who has held the land for 25 or 50 years, then we’re in trouble.

Now this province is not unique in this problem, Mr. Speaker. What creates speculation is a land boom, mostly in areas abutting on metropolitan areas, in fringe development. And over the years, in Europe, the United States and in countless other jurisdictions, they’ve had this problem where speculators come into an area and, anticipating a boom, buy up land in the prospect of making a killing.

These speculators have had nothing whatsoever to do with the factors that make the value of that land skyrocket. They’ve had nothing to do with creating that increased value in the land. It’s the community itself that creates that value, and that community should be the first one to reap the rewards. In many cases this is solved by a reciprocal land tax.

I mentioned this to the minister the other day, and he said he’d never heard about a reciprocal land tax. I don’t hold that against him; I think he’s an able man. But what I’m trying to say is that in a problem so important as this, why wouldn’t he do proper research and come in with something that’s going to work.

For instance, this is how a reciprocal land tax works: For years the land has been assessed as farm land, probably paying an assessment of you name it -- anybody can pick a figure -- but the total farm has been assessed for $5,000 or maybe $25 an acre. And now we wake up --

Hon. Mr. Meen: Mr. Speaker, on a point of clarification, can the hon. member tell me in what jurisdiction they’re using this principle so that I might be able to look into it a little bit at some future time?

Mr. Sargent: I’ll get it for the minister.

Hon. Mr. Meen: Does the hon. member mean he doesn’t know the jurisdiction in which this principle is being used?

Mr. Sargent: Yes, the main area is London, Eng., where it was used to control speculation going on there in fringe development --

Hon. Mr. Grossman: Boy, they’ve got speculation under control there!

Mr. Sargent: -- and in many parts of the continent. Well, now we wake up and find that the farm is being bought for $500 an acre --

Hon. Mr. Meen: This is in London, Eng.?

Mr. Sargent: No, I’m talking about the principle of the deal. Try to be intelligent for a moment.

Hon. Mr. Meen: Yes, I’ll work at it.

Mr. J. R. Smith (Hamilton Mountain): Thorpe was up at their convention.

Mr. Sargent: -- or $50,000 for the farm, and the farm in turn being sold for $500,000. Now, the reciprocal land tax comes into play, and all of the back taxes for 10 or 20 years have to be paid up at current land values or a percentage of it, based on its value. So the speculator knows before he goes into the deal, that the municipality, the township, the village, the town or the city will receive it as its rightful due.

An hon. member: That’s our golf club again.

Mr. Sargent: So payday does comes to the local government, to the local municipality. Instead, here, the government is going to reap all the money, hundreds of millions of dollars in taxes, which should be going to the municipality.

Hon. Mr. Meen: Did the member read the budget? That is what we said we would do.

Mr. Sargent: The trouble with this government is that in recognizing a problem -- and we do have a problem; it’s been so ably put forth by everyone here -- and in trying to solve it they go about it in a very unprofessional way. With the greatest respect, the fellows who drafted this bill made a hell of a poor job of it.

Hon. Mr. Meen: Oh, boy, I’d sure hate to have the member doing it.

Mr. Sargent: I have been talking about this reciprocal land tax for the past 10 years here. And speculation didn’t just start last week or last month or last year in this province. In 1964 in Hansard I talked about five local Toronto Tories. They bought land in Bramalea, they didn’t put any money up, they signed for $50,000 each -- they put up no money, they just signed for it -- and six months later they sold the land for $5 million and each one took a capital gain of $1 million, having put up no money. This is a matter of record. We all know the ongoing scandals in Bramalea which this government had a great part in. But that is not part of this picture.

Hon. Mr. Grossman: The member just brought it in.

Mr. Sargent: It would make a hell of a good story if the truth ever came out. But I received a letter last week from a lady in mv constituency in Owen Sound and she was telling me about her father and mother --

Mr. J. R. Smith: Did they have mail delivery there?

Mr. Sargent: Pardon me?

Mr. J. R. Smith: How come they had mail delivery up there?

Mr. Sargent: Well, 10 days ago. I have it in my file if the member wants me to produce it. Her father and mother are living in Port Hope.

Mr. MacDonald: It’s that mountain air that makes that fellow over there so sharp.

Mr. Sargent: They put their farm up for sale for $125,000, but the brother of the mayor of Port Hope bought the land from them for $100,000, and in so doing he posted a $25,000 deposit. That was in 1969. In brief, the story is this: In 1971 the farm was sold for $650,000, and to this date the farmer has only received this $25,000 deposit. He can’t get the balance of his money. I tell the members this because, going from $25,000 received, the big speculators have had now $650,000 in their kick.

Countless land deals involving hundreds of millions of dollars, just billions of dollars, have been going on and now the government thinks that this legislation might be good vote-getting material; it might be another gut issue. Like its think-tank says to the government, let’s play the teachers against the tax- payers. And that’s boomeranged. I feel this is going to boomerang --

An hon. member: Unless they make some changes.

Mr. Sargent: -- unless the minister makes some changes. Instead of researching this the minister has been shooting with a shotgun instead of shooting with a rifle, and a lot of people are going to get hurt. The farmers in my area are very unhappy about this whole thing.

Hon. Mr. Meen: Speak to the leader, he thinks it’s fine.

Mr. Good: The member told the minister how to fix it up for the farmers. That’s what he’ll have to do.

Mr. Sargent: Now a farmer -- bear this in mind, and don’t forget it, I am an old politician; don’t you forget this, because farmers are pretty important to us in this country --

Mr. McIlveen: He is old, that’s right.

Interjection by hon. member.

Mr. Sargent: -- a farmer’s land is his pension, and the minister has destroyed that right here. It’s not in this bill. There is no way he can protect the farmer here.

Hon. Mr. Meen: It’s only 10 per cent a year.

Mr. Sargent: As I said before, a farmer who has had his land for 25 or 50 years is not in the same class as a man who holds the land for six months. The minister doesn’t differentiate. He’s laughing about it. He thinks it’s funny.

Mr. McIlveen: Yes, it’s kind of funny the way the member puts it.

Mr. Sargent: I can tell you this, sir, the farmer has no 40-hour week. He doesn’t go south for holidays. He can’t take a long weekend holiday. The cows have to be milked on Sunday as well as the other six days of the week.

Mr. Ruston: That’s right.

Hon. Mr. Grossman: Unfair to the cows.

Mr. Sargent: He has been anchored on that land for generations.

Interjections by hon. members.

Mr. Sargent: The government says to him he cannot sell his land unless he pays that 50 per cent tax.

Hon. Mr. Meen: Nobody said that at all, that is a complete misrepresentation.

Mr. Sargent: It is in here. Is the minister going to change it?

Interjections by hon. members.

Mr. Sargent: I haven’t heard many of the debates here but I heard my friend from Downsview making some pretty good remarks to the minister. I was talking to the accountant for a large development firm yesterday.

He said, “Is this actually going to happen”?

I said, “I can’t believe it.”

He said, “If a man has $100,000 profit on a deal, and is in a 60 per cent tax position, he pays the federal government $60,000 and he pays the Ontario government $50,000; so he’s paying 110 per cent tax.”

Interjections by hon. member.

Mr. Sargent: I can’t believe that.

Hon. Mr. Meen: Let the member speak to his friends. It would be they who did it.

Mr. Sargent: He wanted me to ask the minister personally if this is true. I said it is a fact. I think that those who have spoken have done a very great job and the minister has to make a lot of changes or he is going to be in real trouble. Motivation is a very important thing. I said to a guy one day, “How long have you been working for this firm?” He said “Ever since the day they threatened to fire me.”

Hon. Mr. Meen: A good story.

Mr. Sargent: Let the minister think about that.

Mr. Ruston: A very good point.

Mr. Speaker: The hon. member for York South.

Mr. MacDonald: Mr. Speaker, the object of this bill, I suspect, is something that no member of this House would dare to object to and that most would support. The principle of this bill is quite another matter. There is such a gap between the professed object of the bill as spelled out in its name and what the government has got in the bill itself, that we are dealing with a completely different situation altogether.

What I would like to do on the second reading, in which one is supposed to deal with the principle of the bill, is to try to sort this out and to deal with it in overview. I’m not interested in getting into the detail of the Act and the loopholes and how one might contend with the loopholes because, quite frankly, for the moment they are irrelevant.

I was very interested to listen, for example, to the leadoff from the Liberal’s this afternoon where he concluded by saying --

Mr. Renwick: The member for Downsview led off.

Mr. MacDonald: -- their inclination at the moment was to support the principle of the bill but when they saw the amendments they might change their mind. Now, the logic of that really threw me. If I were to be in what I think is his position, I would have said --

Mr. Renwick: How could the member tell?

Mr. MacDonald: Well, that is a good point.

Interjections by hon. members.

Mr. MacDonald: There might have been a logic in it if one said, “I’m opposed to the principle of this bill as it stands. Conceivably, I might change my mind when I see the amendments and if it is improved.” However, I suspect his problem is that he’s got to move from the fixed position that was established by the leader of his party in being in favour of it. So he starts out by being in favour of it and he might change his mind when he sees the amendments.

Mr. Renwick: That’s giving more credit to the member for Downsview than he deserves.

Mr. MacDonald: That is a classic example of the confusion that sometimes harasses him.

Mr. Renwick: It is the convoluted thinking of the member for Downsview which is characterized by a total relationship with it.

Hon. Mr. Meen: That convoluted thinking is exceeded only by that of the member for Riverdale.

Mr. MacDonald: By the member for Riverdale? Oh, no, the member for Riverdale was really on the beam. If the minister didn’t catch what he was saying, he is even more confused by this bill than we are.

Mr. Deans: The amendments improved the principle, but not enough.

Interjections by hon. members.

Mr. Renwick: Enough of these interjections, let’s get on with the meat of the bill here.

Mr. Singer: That’s not right. We haven’t seen a single amendment.

Mr. MacDonald: If the objective of this bill, Mr. Speaker, as the provincial Treasurer foreshadowed it and as the Minister of Revenue stated it and as the Provincial Secretary for Resources Development who presumably has discussed it in cabinet and knows something about it confirmed later again this evening, if the principle of this bill was to bring more land on to the market for the purpose of providing more houses at a more reasonable price --

An hon. member: It fails.

Mr. MacDonald: -- then the bill fails and one can stop right there. The principle just is not operative.

Do you know, Mr. Speaker, if the principle, as everybody assumed of this bill, would really get at the speculators? Proof of the fact that it isn’t going to operate has been building up ever since the bill was introduced. It’s rather significant, I think, that those who presumably are going to be the victims of this bill have been unbelievably silent.

Oh, there’s been the odd neanderthal who took the bill at face value and hadn’t had the discussion with his lawyers, or even hadn’t read it and began to think of how he could get through any of the loopholes or around any of the comers. He may think that it really means what it says; but the great majority of them hadn’t been protesting and they’re not protesting because they know they’re not going to be victimized.

Mr. Deans: That’s right.

Mr. MacDonald: They know they’re not going to be victimized.

Hon. Mr. Grossman: He is kidding.

Mr. MacDonald: And as a matter of fact, the second proof of the bill as it stands isn’t going to be effective --

Mr. Renwick: That’s right.

Mr. MacDonald: -- is that the provincial Treasurer, from about 48 hours after he brought down his budget, made two or three speeches in which he said: “If this bill doesn’t do it, then we’ll bring in something else.”

Mr. Renwick: That’s right.

Mr. MacDonald: In other words, he was conceding that the bill wasn’t going to be operative.

Mr. Deans: Absolutely right.

Mr. MacDonald: And there was his normal huffing and puffing that if it didn’t work he would bring in something else.

Mr. Renwick: That’s right.

Mr. MacDonald: But to my mind -- I mentioned this in my initial reply to the budget, but I’ve got to come back to it again -- for a piece of self-serving evidence, or testimony, or argument, that line in the budget was it; that the proof of the effectiveness of this bill was going to be the fact the government expected that they were going to raise only $25 million in revenue; and indeed it would be even more effective and they would be glad to see it get even less revenue. What self-serving nonsense. That is a classic.

The fact that the minister himself expected that he was only going to raise $25 million was proof of the ineffectiveness of the bill and --

Mr. Renwick: Even the Minister of Agriculture and Food stood up and bowed to the Minister of Revenue.

Mr. MacDonald: When one recognizes that, one understands why there’s been no outcry from the developers. As I already stated in this House I suspect there are 15 or maybe 40 or 50 different developers, each of whom has made $25 million in the last year or so. And the government is going to come in with a tax that will be effective in reducing the cost of land --

Mr. Deans: In the last three months.

Mr. MacDonald: -- and bringing more housing on the market, when from all of these big boys and all of the little people they’re going to catch in the net, all they expect to get is some $25 million.

The next rather interesting commentary on the principle of this bill and the effect it was going to create was in the reaction of the Toronto Real Estate Board. A few days after the bill came in they began to climb on the bandwagon, because they knew they weren’t going to be hurt, and to say that the government was to be commended. What they had achieved was some stabilization of the market; there was going to be a pause. There appeared to be a pause.

One could understand that. I suspect that every lawyer in the Province of Ontario has been devoting a good deal of his time to figuring out how to worm through the loopholes and around the comers of this bill. And everybody who is in the game of speculating, and a lot of little people who weren’t in the game of speculating, have been talking to lawyers to find out how the government was going to operate in this. What were the new rules of the game, they wondered, and therefore there might be a pause. But yesterday, Mr. Speaker -- perhaps you missed it -- the information came out that in the month of April the cost of an average home in Metropolitan Toronto had gone up from $50,000 to $54,000; so in the three weeks, roughly, after the budget has been brought down, when we thought we had a pause, the cost of an average home has gone up eight per cent.

Mr. Speaker: Perhaps the hon. member could find a pause now.

Mr. MacDonald: As a matter of fact, I could find a pause because that’s something to sleep on and give one nightmares: in the three weeks since this bill was brought in the cost of homes that the government is stabilizing went up eight per cent. That means that at that rate in the next year they will go up 100 per cent.

Mr. MacDonald moves the adjournment of the debate.

Motion agreed to.

Hon. Mr. Grossman: That’s the pause that refreshes.

Mr. Renwick: What are we going to do tomorrow? Is the government going to withdraw this bill?

Hon. Mr. Winkler: Mr. Speaker, as previously announced, tomorrow we will open the afternoon sitting with item No. 7, Bill 23, and, at the conclusion of that particular item we will move to item No. 6, Bill 22. The House will adjourn at 6 o’clock.

As announced previously, I believe I said that the Minister of Energy (Mr. McKeough) would return with his estimates on Thursday. Having hoped that we would have reached the conclusion of the second reading of this bill this evening, I would hold that option open for Thursday.

Mr. MacDonald: Mr. Speaker, by way of clarification, is the House leader saying that we might come back to Energy or we might come back to this on Thursday? Is that what he’s saying?

Hon. Mr. Winkler: We might come back to this on Thursday. I will inform the House tomorrow.

Mr. MacDonald: We might come back to this.

Mr. Renwick: What about the emergency debate on the hospital strike?

Hon. Mr. Winkler: I have no decision in that regard.

Mr. Renwick: I see.

Mr. MacDonald: We might get Energy next week.

Hon. Mr. Winkler moves the adjournment of the House.

Motion agreed to.

The House adjourned at 10:30 o’clock, p.m.