Legislative Assembly of Ontario

The House met at 2 o’clock, p.m.

Prayers.

CONFERENCE OF ATTORNEYS GENERAL

Hon. R. Welch (Provincial Secretary for Justice and Attorney General): Mr. Speaker, before beginning the orders of the day, you will recall that yesterday I had occasion to indicate to the members of the House, the convening of the conference of the inter-provincial attorneys general. I know that members of the House would like to welcome in your gallery the members of this conference, my colleagues, the attorneys general. I would like to introduce to the House Hon. Alex Macdonald from British Columbia, Hon. Mervin Leitch from Alberta, Hon. Mr. Romanow from Saskatchewan, Hon. Mr. Pawley from Manitoba, Hon. Mr. Choquette from Quebec, Hon. Mr. Baxter from New Brunswick, Hon. Mr. Sullivan from Nova Scotia, and Hon. Mr. Hickman from Newfoundland. We are expecting to be joined before we conclude tomorrow by the Hon. Mr. Campbell from Prince Edward Island.

We start our meetings today and will be carrying on until tomorrow. My colleagues, the attorneys general, wanted to see the operation of the House and I thought this would be an excellent time for members of the House to meet with them and welcome them.

Mr. F. Drea (Scarborough Centre): Mr. Speaker, before the orders of the day, may I present students from the R. H. King Collegiate Institute with their teacher, Mr. Hochkirchen, in the west gallery.

Mr. H. Worton (Wellington South): Mr. Speaker, it is my pleasure to introduce 25 students from grade 12 economics, John F. Ross Collegiate and Vocational Institute, Guelph, and their teacher, Mr. Bruce Abel.

Mr. J. F. Foulds (Port Arthur): Mr. Speaker, it is my pleasure to introduce to you and through you to the members of the Legislature 60 students from the Five Mile Public School in the great riding of Port Arthur. I am sure you will welcome them.

Mr. E. M. Havrot (Timiskaming): Mr. Speaker, it is my great pleasure through you to introduce to the members of the House 30 grade 7 students and three adults in the west gallery from the Cobalt Public School in the great riding of Timiskaming. Thank you very much.

Mr. Speaker: Statements by the ministry.

ONTARIO COUNCIL ON UNIVERSITY AFFAIRS

Hon. J. A. C. Auld (Minister of Colleges and Universities): Mr. Speaker, I would like to advise the House of the government’s intention to create an Ontario Council on University Affairs. The council, which will be established by legislation that I propose to introduce later this afternoon, will make recommendations to the government on matters affecting the province’s university system, such as the eligibility of programmes for funding, total funding requirements and allocation of funds.

I am pleased to advise hon. members that the first chairman of the new council will be Dr. Stefan Dupré, currently chairman of the department of political economy at the University of Toronto.

With your permission, Mr. Speaker, I will briefly summarize Dr. Dupré’s distinguished career. He graduated in economics and political science from the University of Ottawa in 1955, then studied political economy at Harvard University, receiving his AM in 1957 and his PhD in 1958. He taught political science at Harvard from 1958 until 1963 when he joined the University of Toronto.

While at the University of Toronto he has served in various capacities with the Ontario Committee on Taxation, the Ontario Civil Service Arbitration Board, the Science Council-Canada Council study group on federal support of university research and the National Research Council of Canada. He is also a past president of the Institute of Public Administration of Canada.

Mr. Speaker, legislation to create the Ontario Council on University Affairs responds to the recommendations of the university community in general and in particular to the advice of bodies such as the Commission on Post-Secondary Education in Ontario, the Council of Ontario Universities and the Committee on University Affairs.

The new council replaces the Committee on University Affairs and will act as a strengthened “‘buffer,” protecting the autonomy of the universities in planning their programmes and development while maintaining the minister’s accountability to the Legislature and the people of Ontario.

NORONTAIR NORTHWEST

Hon. J. R. Rhodes (Minister of Transportation and Communications): Mr. Speaker, in the Speech from the Throne which opened this session of Parliament, the Honourable the Lieutenant Governor noted the government’s intention to extend the norOntair type of air service to communities in northwestern Ontario.

The plan calls for linking some 12 more or less isolated communities with the national and regional air carriers at Dryden, Thunder Bay and Sault Ste. Marie. It would also provide much greater mobility within this northern region itself.

I would like to report to the House on progress to date.

My ministry has now completed feasibility and system design studies, and a proposal has been approved by the resources development policy field committee. I have this week authorized the Ontario Northland Transportation Commission to take immediate action to implement norOntair Northwest services.

I should point out at once that there are several critical factors which determine the timing and sequence with which norOntair Northwest can be implemented.

First is the matter of airport facilities and navigational aids. Several municipalities would have to upgrade these facilities to meet norOntair and Ministry of Transport standards. While there is substantial federal and provincial assistance available for this purpose, all local jurisdictions may not be prepared to move at once to effect the improvements.

Next is the negotiation of contracts with suitably qualified carriers to operate the service for the province. This air service cannot be launched without the co-operation of the private sector.

And finally, licence applications from the appointed carriers must be approved by the Canadian Transport Commission. The Ontario Northland Transportation Commission will support these applications and we are counting on the CTC to expedite approval.

Services to communities which have adequate facilities now, and where suitable contractors are available, probably could be inaugurated within 12 months. Other points would join the network as facilities became available. We expect the entire network to be in service in 1977.

The following links are planned: Fort Frances and Red Lake to Dryden; Kenora, Sioux Lookout and Pickle Lake to Dryden; Fort Frances and Atikokan to Thunder Bay; and Marathon, Geraldton, Manitouwadge and Wawa to Thunder Bay and/or Sault Ste. Marie.

Mr. Speaker, as was the case in northeastern Ontario, this new norOntair service will be a demonstration project. It is approved for a maximum of three years. It will be operated by a private sector carrier or carriers under contract to the Ontario Northland Transportation Commission. If required, the province will make available two Twin Otters or comparable aircraft -- one in this fiscal year, and one in 1975-1976.

Within the next two weeks a task force from ONTC and the ministry will hold meetings with each of the municipalities involved. Specialists will deal with the engineering and financial aspects of upgrading airport facilities and will discuss the proposed service pattern; the probable flight frequencies and fares; and the economic implications for the community.

Meanwhile ONTC, which is charged with the responsibility for selecting the carrier or carriers, will place advertisements inviting private carriers to submit proposals. As a result of these activities, Ontario Northland should be able to name the operators and give a firmer implementation schedule in August.

Mr. Speaker, the present norOntair operation in northeastern Ontario will complete its three-year demonstration programme this fall. That demonstration has shown that this type of transportation service is needed, wanted and viable. Since inauguration in 1971, it has experienced a steady growth in patronage particularly during the past six months under the on-the-spot guidance of ONTC. It is the government’s intention to extend its support of norOntair northeast to the end of 1976. At that time we have every expectation that with or without provincial subsidy the service will be continued indefinitely.

Today we embark on another three-year air-service demonstration, this time in northwestern Ontario. Unquestionably, the Ontario Northland Transportation Commission, with its success with norOntair northeast, is the agency to supervise operations of the new airline. We are confident it, too, will be successful, will reduce isolation and will improve economic and social opportunities for the affected communities. It will also provide a much needed base for the development of the private air transportation sector in the north.

UNEMPLOYMENT RATE

Hon. J. White (Treasurer and Minister of Intergovernmental Affairs): Mr. Speaker, I have a brief summary of current labour force conditions in Ontario and in Canada for April, released by Statistics Canada this morning. I am pleased to inform the House that, as anticipated in my budget --

Mr. S. Lewis (Scarborough West): It’s the first opportunity the Treasurer has had to crow for some time.

Hon. Mr. White: -- Ontario’s seasonably adjusted unemployment rate was 3.6 per cent of the labour force compared to 5.3 per cent for Canada.

Interjections by hon. members.

An hon. member: Does the Treasurer mean we’re ignoring the rest of Canada?

Mr. Lewis: It must have been the Land Speculation Tax Act.

Mr. Speaker: Order.

Interjections by hon. members.

Mr. Speaker: Are there further statements?

Mr. V. M. Singer (Downsview): The Treasurer should put on his sweater!

Mr. Speaker: Oral questions.

The hon. Leader of the Opposition.

PROVINCIAL CONTROLS ON PETROLEUM PRICES

Mr. R. F. Nixon (Leader of the Opposition): Thank you, Mr. Speaker. I’d like to ask the Premier if he is aware that instructions have gone to the gasoline retailers in this province that their pump price will go up by nine cents tomorrow?

Hon. W. G. Davis (Premier): No, Mr. Speaker, I am not aware.

Mr. E. R. Good (Waterloo North): Does he care?

Mr. Lewis: That’s true.

Mr. R. F. Nixon: A supplementary: Since the Premier is now aware that the price is going up in the province tomorrow, even though he was unaware of it --

Mr. Good: He doesn’t care.

Mr. R. F. Nixon: -- does he continue to reject acceptance of any policy which would use the power of this Legislature or the power of his government, either to control or moderate that increase so that it can be brought on in stages or, better yet, kept at a level considerably below the nine-cent level?

Hon. Mr. Davis: Mr. Speaker, I have observed in this House before, and I’ll be very frank about it again, I don’t see a committee of this Legislature reviewing prices as being a solution to the problem.

Mr. R. F. Nixon: The Energy Board can.

Mr. Lewis: The Energy Board does.

Hon. Mr. Davis: I was asked by the leader of the New Democratic Party about controls -- I think it was roughly 10 days ago -- and the answer is the same today: At this moment we do not see some form of legislative control. I emphasize “at this moment.”

Mr. D. C. MacDonald (York South): Review and rollback.

Mr. R. F. Nixon: A supplementary, just to make it clear: Since the increase is going to take place tomorrow and the Premier has associated himself with the leader of the Progressive Conservative Party in Canada who is calling for these controls --

Mr. A. J. Roy (Ottawa East): That’s right.

Mr. R. F. Nixon: -- does he categorically reject the use of the power which would be given to him by this Legislature either to moderate or control these prices?

Mr. Singer: Good question!

Hon. Mr. Davis: Mr. Speaker --

Mr. Singer: Let’s have the Treasurer give another bulletin.

Hon. Mr. Davis: -- I must say I find it encouraging to find the leader of the Liberal Party of the Province of Ontario obviously in support of Mr. Stanfield in his approach to wage and price controls. I would only say to him, if he would use some of his --

Mr. R. F. Nixon: I can do as much harm as the Premier will.

Mr. Foulds: Quit playing politics.

Interjections by hon. members.

Hon. Mr. Davis: -- questionable influence on his federal colleagues, they could have headed off this situation six weeks ago in Ottawa -- and he knows that’s so.

While I am not going to raise the constitutional issues here today --

Mr. R. F. Nixon: There are people here from other provinces.

Mr. Speaker: Order.

Hon. Mr. Davis: I am not going to raise the constitutional question, but one of our sister provinces, Mr. Speaker, has taken certain steps and now finds itself in the courts.

Interjections by hon. members.

Hon. Mr. Davis: I would only say to the Leader of the Opposition that we here have demonstrated our intent to come to grips with the question of inflation far more than has the federal government -- we are prepared to do so again.

Mr. R. F. Nixon: How?

Mr. Roy: How?

Interjections by hon. members.

Mr. Speaker: Order.

Hon. Mr. Davis: But with respect I say that while any form of control of this kind may have to be done provincially at some point, it should be done by a federal government that has the intestinal fortitude to deal with it.

Mr. R. F. Nixon: This government has rejected controls.

Hon. Mr. Davis: No, we have not rejected them.

Interjections by hon. members.

Mr. Speaker: Order.

Mr. Lewis: By way of supplementary, I presume the Premier will be discussing this with the Attorney General of Nova Scotia at some stage today or tomorrow --

Mr. Speaker: Order, please

Mr. Lewis: How far above nine cents a gallon is the Premier prepared to allow prices in Ontario to rise -- one cent, two cents, three cents above the nine cents -- at $44 million additional cost to the consumer? Where does he draw the line? Where does he start to protect the consumers of Ontario?

Hon. Mr. Davis: Mr. Speaker, I am expressing strictly a personal point of view --

Mr. Singer: Oh, come on!

Hon. Mr. Davis: -- and I find it hard to understand an increase beyond the seven cents roughly --

Mr. Lewis: Seven and a quarter cents.

Hon. Mr. Davis: -- or whatever it was that was agreed to in Ottawa some six weeks ago.

Mr. Lewis: A supplementary: If the Premier finds it hard to understand, why is he so coy about the additional two cents that the oil companies are extracting illegitimately from the consumers of Ontario, whom he, as Premier, is supposed to defend and is about to betray?

Hon. Mr. Davis: Mr. Speaker, I am never coy.

Mr. Lewis: Mr. Speaker, a further supplementary --

Mr. Speaker: Order. The next supplementary should be over on this side.

Hon. Mr. Davis: I may be many things, but I am never coy.

Mr. Lewis: Well, he is being coy in this place.

Hon. Mr. Davis: I am not being coy.

Mr. Lewis: He certainly is!

Mr. MacDonald: The Premier’s innocence is so sweet.

Hon. Mr. Davis: Well, I am innocent.

Mr. Speaker: The hon. member for Rainy River has a supplementary.

Mr. T. P. Reid (Rainy River): Thank you, Mr. Speaker --

Mr. J. Riddell (Huron): Send in the Treasurer with another bulletin,

Mr. R. F. Ruston (Essex-Kent): Send a telegram to Stanfield.

Mr. Reid: Is the Premier prepared to take any action against the oil companies, who are now splitting up the market and putting themselves in monopoly situations in regard to various grades of oil and gasoline and to geographical areas?

Hon. Mr. Davis: Mr. Speaker, I am not familiar with this activity, if it is going on, on the part of the oil companies. I would be quite prepared to discuss it with the Minister of Energy (Mr. McKeough).

Mr. MacDonald: A supplementary question: Since the Premier is aware of the fact that the Home Oil case in 1940 established the constitutional right of a province, why is he waiting for Imperial to appeal a case in Nova Scotia when clearly it is procrastination?

Hon. Mr. Davis: Mr. Speaker, I pointed out that one of our sister provinces had taken a step and found itself in the courts. I said just a few moments ago I was not raising the constitutional issue.

Mr. R. Haggerty (Welland South): At least they are trying to do something!

Mr. Lewis: A supplementary --

Mr. Speaker: I believe there has been a sufficient number of supplementaries. The hon. Leader of the Opposition.

ENVIRONMENTAL IMPACT OF PUBLIC WORKS

Mr. R. F. Nixon: Another question of the Premier, Mr. Speaker: Since the decision handed down by the Minister of the Environment (Mr. W. Newman) yesterday, pertaining to the Arnprior dam expropriation hearing, apparently opens it up for the work to begin on the $80 million programme on a grand scale, has the Premier assured himself, in consultation with the Minister of Energy and others, that in fact this project is essential? Or would he give some further consideration to stopping it on the basis of the ecological invasion and the damage that it will do?

Is he aware that one of the reasons it is going forward is that the lake will provide 50 miles of shorefront, presumably for recreational purposes, when in fact we are losing 2,000 acres of farmland with the decision that was supported yesterday by the Ministry of the Environment?

Hon. Mr. Davis: Mr. Speaker, the government isn’t prepared to alter the policy of Ontario Hydro with respect to the Arnprior development.

Mr. R. F. Nixon: A supplementary: If I may just make it clear, I would think that if the Premier could say that the project were essential to the provision of energy in the province, there would not be so much objection to the way this has gone forward. Will he assure himself of the essentiality of the programme, or is this something that is associated with the provision of recreational services in the area, rather than power?

Hon. Mr. Davis: Mr. Speaker, the definition of essentiality is a judgement decision sometimes based on the degree of essentiality. Ontario Hydro has been charged with the responsibility of providing electricity to the consumers of the Province of Ontario. I could say to the Leader of the Opposition that when it comes to this particular aspect of its responsibility it has been and is doing rather well.

Mr. Roy: The only essentiality was to get Yakabuski elected.

Mr. Lewis: That certainly was not essential. No, that was inessential.

Supplementary: May I ask the Premier, is he aware that in every single instance of the five farmers from whom Ontario Hydro sought expropriation, the inquiry officer found that Ontario Hydro had asked for more than was reasonably necessary and had not justified the taking which they put before him, and in every single instance reduced that taking? Doesn’t that show him that Hydro from Day One to the end has behaved in a fashion so arbitrary and so irresponsible that he should now intervene to reappraise the entire project?

Hon. Mr. Davis: Mr. Speaker, I haven’t read the hearing officer’s report in detail. While I acknowledge that the hearing officer did reduce the amount required by Hydro, the hearing officer did not say, nor I guess would it be appropriate to say, that this work was not essential. I think it is fair to say, Mr. Speaker --

Mr. Lewis: He was not asked that.

Hon. Mr. Davis: -- that Hydro may or may not have in other instances suggested a larger acquisition than was, shall we say, completely necessary for their works. I don’t know whether they acquire an extra 10 acres here or there. I can’t presume to know this. I would only say to the leader of the New Democratic Party the government does not intend to alter the direction of Hydro as it relates to the Arnprior project.

Mr. Lewis: By way of a supplementary, can the Premier at least intervene in Hydro to indicate to them the government’s displeasure at the heavy-handedness with which they have approached the whole project, because why exacerbate public feeling even further by wishing to acquire land far beyond that which is reasonably necessary, and productive farmland to boot?

Hon. Mr. Davis: Mr. Speaker, Hydro has been told on more than one occasion that this government is anxious, with respect to land dealings in particular, that they exercise as much good judgement as is possible.

Mr. Lewis: They’ve not learned it.

Mr. MacDonald: They are really slow learners on that issue.

Hon. Mr. Davis: I would say, Mr. Speaker, if there are instances in the many thousands of acquisitions where people are upset, I can understand this and I’m totally sympathetic to the concern of the people who are affected. I can only say that Hydro has been told this on many occasions. In fairness, I think in probably the vast majority of cases the people negotiating, the people doing the actual settling with the farmers or owners, do so on a very reasonable basis. There are always exceptions and I’m prepared to admit it.

Mr. Speaker: The hon. Leader of the Op- position.

Mr. R. F. Nixon: Yes, the Treasurer was in the riding of the hon. member who sits behind him.

Hon. Mr. White: No, I was in the member’s riding. I was in Cayuga. Cayuga is the member’s riding, isn’t it?

Mr. R. F. Nixon: No, it isn’t.

Interjections by hon. members.

Hon. Mr. White: I drove through the Leader of the Opposition’s riding.

Mr. R. F. Nixon: The Treasurer is very welcome to drive through it any time.

Hon. Mr. White: And I was glad to get out of it.

Interjections by hon. members.

Hon. Mr. White: To answer the question, I hope to have something to say on this subject Thursday.

Mr. Speaker: The hon. Leader of the Op- position.

Mr. J. E. Bullbrook (Sarnia): The Treasurer could come to my riding every day but it wouldn’t do him any good.

Interjections by hon. members.

Mr. Speaker: Order. Something seems to be out of order. The hon. Leader of the Opposition.

LAND PURCHASES IN HALDIMAND-NORFOLK

Mr. R. F. Nixon: Mr. Speaker, I have a question of the Treasurer. With the options on the property in Haldimand-Norfolk near Jarvis running out within about two weeks’ time, is the Treasurer prepared to make a statement, now that he has canvassed the regional council of Haldimand-Norfolk, on the proposals that have been put to him for the sale of that property in the Haldimand-Norfolk area? Is there going to be a positive announcement of government policy before the efflux of time means the options are lost?

Hon. Mr. White: It is interesting, Mr. Speaker. I did tell the hon. member last Friday that I had been in his riding on Thursday and I wondered how long it would take him to confirm that fact and to learn that I wasn’t in Oxford county at all. That’s by the by.

POTATO SUPPLIERS

Mr. R. F. Nixon: I would like to ask the Minister of Agriculture and Food if he has instituted an inquiry into the fire at the potato warehouse owned by the John Dawesworth Co. at Pine Orchard north of Toronto, which was referred to as a part of the price fixing consortium that was alleged to have been financed by one Joseph Burnett? And if he has not instituted an inquiry, would he ask those people who are carrying on the inquiry -- whom he refers to from time to time in this House -- to meet with the York regional police on this particular incident?

Mr. Worton: Careful, that is a hot potato.

Hon. W. A. Stewart (Minister of Apiculture and Food): Yes, it seems that way; it seems as though there were many.

No, Mr. Speaker, I have not asked for such an inquiry. I assume that the appropriate authorities are looking into it appropriately.

Mr. R. F. Nixon: Supplementary: Since it may, in fact, have a bearing on the special inquiry that the minister is undertaking in the price fixing in the potato market in Metropolitan Toronto, would he not deem it advisable to ask those people associated with the food council who are concerned specifically with this, or with the OPP who are assisting them, that they might very well consult with the York regional police in this matter?

Hon. Mr. Stewart: No, I see no particular reasons for that, Mr. Speaker.

Mr. M. Shulman (High Park): Supplementary, Mr. Speaker: Why is it taking the minister so long to conduct such a relatively simple inquiry; and when is he going to report to the House on what he has learned?

Hon. Mr. Stewart: Mr. Speaker, I don’t think there is any great problem as far as the study is concerned. We have met with the various presidents of the food companies that are involved, and I think perhaps the story might have been exaggerated to some degree.

There is not complete control by those various dealers of all the potato markets in the Province of Ontario; nor in the Toronto area. There are one or two stores that seem to be buying most of their supplies from the particular people who were referred to in the newspaper article. Other chain stores are not buying all their supplies there at all. In fact, they are buying them from a variety of sources throughout Ontario which is, I suppose, the appropriate and normal thing to do.

We have had some discussions with them concerning their source of potatoes, and there has been no evidence that we can see whatever of any collusion to force the price of potatoes in any way. As a matter of fact, there are at least 43 growers who are growing on contract for some of the potato distributors referred to in the article, and who are quite well satisfied with the arrangements they have. There is nothing to preclude anyone else from getting into the business himself.

Mr. Shulman: Supplementary, Mr. Speaker: Has the minister taken the trouble to question the people who were threatened when they were changing their method of supplying the potatoes?

Hon. Mr. Stewart: No, that’s a matter that will be properly investigated, but not necessarily by the ministry.

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

Mr. R. F. Nixon: Supplementary: Might I presume that the minister’s statement is not the report that was promised and that there will be a fuller report given to the Legislature?

Hon. Mr. Stewart: I wouldn’t say that was the case, Mr. Speaker.

Mr. R. F. Nixon: Was the minister’s statement he just made the report that he has promised for the last two or three weeks?

Hon. Mr. Stewart: Not necessarily. I told the Leader of the Opposition we would look into it, and if there was any evidence of wrongdoing we would report to the Legislature. We can find no such evidence, Mr. Speaker.

Mr. Shulman: It’s there for a blind man to see.

Mr. Speaker: The hon. member for Scar- borough West is next.

KRAUSS-MAFFEI SYSTEM

Mr. Lewis: Could I ask the Minister of Transportation and Communications: What is the course of action he intends to follow now that the Toronto city public works committee has recommended that no additional land be provided for the experimental model Krauss-Maffei project at the Canadian National Exhibition grounds, and is so recommending to council; particularly since that committee contains within it a sufficiently representative group of council that it looks as if the request for additional land will be turned down? What then does the minister do?

Mr. R. F. Nixon: Put it underground?

Hon. Mr. Rhodes: Mr. Speaker, I expect that we will ask and we will expect that the terms of the agreement that has been signed between the ministry and Metropolitan Toronto will be lived up to, and that agreement provides for the use of the facilities and the land in that area.

Mr. Lewis: Just a moment, now. By way of supplementary, is this not sort of the latest, perhaps the final episode in the death wish which surrounds this project? If the city of Toronto says that by no means may the minister have any additional land for his project -- they will not permit it -- what then does he do? Does he run it around Queen’s Park, as was suggested, or does he scrap it?

Mr. J. R. Breithaupt (Kitchener): It’s a way out.

Hon. Mr. Rhodes: Mr. Speaker, as I say, there is an agreement existing between the ministry --

Mr. Singer: Run it up the Spadina expressway.

Hon. Mr. Rhodes: -- and Metropolitan Toronto that I would think would supersede any decision by that committee.

Mr. R. F. Nixon: The minister had an agreement with Toronto to build a certain amount of expressway.

Mr. P. G. Givens (York-Forest Hill): Supplementary: How much is it going to cost and who is going to pay for the widening of Lakeshore Rd. west of Bathurst St.? Who is going to pay for it: the ministry or the city?

Hon. Mr. Rhodes: I don’t know what those arrangements are. I can’t give the member that cost at this time.

Mr. Speaker: The hon. member for Scar- borough West.

TEXASGULF INC.

Mr. Lewis: May I ask the provincial Treasurer, Mr. Speaker, if he has engaged in discussions with Texasgulf Inc. over its announced intention to suspend the $95 million smelter expansion development at the Kidd Creek mine on the alleged basis that federal and provincial mining taxes require the suspension of all activity?

Hon. Mr. White: Mr. Speaker, I had one such conversation with them almost immediately after the budget; just a day or two after, I think. They expressed some concern about the marginal tax rate. They drew our attention to the fact they were having their annual meeting the following week. I think there have been further conversations between their technical experts and my officials but that is the last such conversation I had with them. I haven’t spoken to them since they announced their delay in proceeding with that expansion.

Mr. Lewis: By way of supplementary: How does one deal with a company of this kind which received special dispensations from Ontario in hydro-electric power and in per-unit car transportation costs; had an $8 million DREE grant; is 30 per cent owned by the Canada Development Corp.; and simply halts development of a very important smelting operation in northern Ontario? Can this minister not bring them in and talk to them fairly vigorously about their intentions?

An hon. member: It can nationalize the company.

Mr. Lewis: If it won’t do that maybe Ontario and the Canada Development Corp. should do it together as a public venture?

Hon. Mr. White: We are in the process now of drafting the changes in legislation which are necessitated by the government’s budgetary policy as announced in my budget. When those details are known, I think I will be in a better position to discuss the matter with the officials of this and other companies. But in the meantime I don’t know of any moral suasion that I can bring to bear on the matter.

Mr. Lewis: After all the concessions the minister has given them?

Mr. W. Ferrier: (Cochrane South): A supplementary, Mr. Speaker: Would the minister discuss the provisions in section 113, I think it is, of the Mining Act and see if it is possible to cut back on export permits of ore which may be being refined outside Canada, and see if there is some leverage there to force the company to move ahead with the plans it had announced previous to the taxation decisions by this ministry and by this government and the Ottawa government?

Hon. Mr. White: That is an option which could be considered, no doubt, but I don’t want to do anything precipitously. We want to decide upon the details of our own amendments --

Mr. Foulds: Why doesn’t he then?

Hon. Mr. White: -- and qualify the effect on this and certain other companies and then decide upon an appropriate course of action.

Mr. R. F. Nixon: A supplementary: The minister referred to his discussions with Texasgulf and other companies; have other companies indicated they may cut back their operations as well?

Hon. Mr. White: No, I wouldn’t say that, but the half-dozen largest companies whose tax rates are increasing very substantially, naturally enough are not overjoyed at that prospect. They will be doing internal calculations no doubt about their investment programmes --

Mr. Lewis: Is this intimidation on their part?

Hon. Mr. White: -- as, indeed, we are taking a look at a variety of options within the constraints of the budget statement.

Interjections by hon. members.

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

Mr. MacDonald: A supplementary, Mr. Speaker --

Mr. J. E. Stokes (Thunder Bay): If the government wants to develop it, it can take the ore bodies away from the company.

Mr. MacDonald: I wouldn’t like to persuade the minister to be precipitous, but if the companies are engaging in a thinly disguised intimidation, blackmail --

Mr. Lewis: Sure; bullying.

Mr. MacDonald: -- what would be the appropriate word? -- isn’t it legitimate for the minister to say to them, “You are taking Ontario ore out of the ground; either you smelt it in the Province of Ontario or that is the end of it”? Maybe they will recognize then that the minister is playing tough just as they are playing tough.

Mr. Lewis: Does he remember Allan Lawrence?

Hon. Mr. White: This is an option which obviously is available to us. There are other options and I am not going to fly off the handle as the socialists in this province would have me do.

Mr. E. W. Martel (Sudbury East): Don’t knuckle under either.

Mr. MacDonald: The Premier has an option on the gas rollback which he won’t exercise. This minister has an option on this which he won’t exercise. Are they all paralyzed?

Mr. Lewis: Don’t let Texasgulf intimidate the minister.

Mr. MacDonald: Are they running the minister or is the minister running them?

Interjections by hon. members.

Hon. Mr. White: We are going to get a much better comprehension of the situation and then we will decide on an appropriate course of action. If the members think for one minute that Texasgulf is running me, they’ve got another think coming.

Interjections by hon. members.

Mr. Martel: The minister should get off his knees.

Mr. Speaker: The member for High Park.

Mr. Shulman: Has the minister not realized that if this company, which is controlled by the Canada Development Corp., gets away with thumbing its nose at the minister’s budgetary policies, all the private companies will follow suit?

Hon. Mr. White: I don’t think it is thumbing its nose at me. Mr. Turner’s budget turned the federal policy around. Several years ago, it had vacated mining tax areas on the political or ethical basis that these resource tax areas rightly belonged to the province. It was quite a surprise to us and no doubt to the mining companies to see the federal government turn its back on that policy without any discussion or prior consultation.

Hon. W. D. McKeough (Minister of Energy): A complete flip-flop.

Hon. Mr. White: A flip-flop, as my hon. friend says. The flip-flop puzzled everybody.

Mr. MacDonald: I wish the minister would either flip or flop but do something on this issue.

Hon. Mr. White: As members know, the flip-flop was flim-flammed when the House of Commons didn’t support the government and when Mr. Stanfield is Prime Minister my expectation is that he will go back to the policy as it has been for several years.

Interjections by hon. members.

Mr. Foulds: The minister should know about that.

Mr. MacDonald: That would sit with the minister. He recognizes its appropriateness.

Mr. Lewis: My colleague from Wentworth (Mr. Deans) said there is a word for that, too, but I can’t use it in the Legislature.

MEETING WITH IMPERIAL OIL

Mr. Lewis: May I ask one last question of the Premier? Has the Premier met with Imperial Oil about the increase in gas prices tomorrow?

Hon. Mr. Davis: Mr. Speaker, I have not personally met with Imperial Oil.

Mr. Lewis: The Premier is more worldly in these matters than I am; I concede it. Will he tell me why the senior vice-president and director of Imperial Oil and the corporate director for Ontario have asked to meet with me and members of the NDP caucus to- morrow morning at 10 o’clock to explain --

Hon. Mr. Rhodes: They want to see if he is for real.

Mr. Lewis: -- the components of the price increase? What does that mean about the likely increase? How do we conduct ourselves in such a meeting? I’ve never handled that before.

Mr. Stokes: State the government position, when it costs the company four cents per gallon to produce it.

Hon. Mr. Davis: I’m really surprised at that.

Mr. Speaker: Order.

Mr. Lewis: What happens when one smells power so close at hand? How does one cope with it?

Mr. Breithaupt: I suggest the member keep his hands in his own pockets,

Hon. Mr. Davis: I wonder, Mr. Speaker, that the leader of the New Democratic Party really is meeting with them.

Mr. Lewis: I am meeting with them; yes, that is true.

Hon. Mr. Davis: I can’t presume to give him advice on how he should handle that meeting tomorrow. I just wish that I were present to listen to how he does handle it.

Mr. Lewis: The Premier wishes they were coming to him as readily as they come to us.

Hon. Mr. Davis: I can only say that I think they have also met with the Minister of Consumer and Commercial Relations (Mr. Clement) here. Perhaps when the member finishes that meeting --

Mr. Lewis: I don’t think so. No, I think they know where power lies.

Hon. Mr. Davis: -- he will have some greater insight at least into that particular industry. I will be delighted to have his observations when he is finished.

Mr. Lewis: The Premier will have them.

Hon. Mr. Davis: I am sure we will.

Mr. Lewis: I would be very pleased to have the Premier along if he is interested. It’s in my office.

Mr. Stokes: Feel free.

Mr. I. Deans (Wentworth): Which is more than the Premier does for us.

Hon. Mr. Davis: I have been at the odd meeting.

Mr. Speaker: Does the member for Scar- borough West have further questions?

The hon. member for Sarnia.

Mr. Bullbrook: May I first suggest to the leader of the New Democratic Party that he genuflect and kiss the ring. That is the first thing that is done.

Mr. Lewis: I am wearing the ring.

Mr. Speaker: I might point out that this is the question period.

PETROSAR LTD.

Mr. Bullbrook: I apologize, sir. I have a question in several parts of the Minister of Energy in connection with the now publicized communication from the Premier of Alberta to the chairman of the board of Petrosar Ltd. Could the minister advise whether the government has adopted a policy in connection with this situation? Has such policy been communicated either to the federal government or the government of Alberta? Would one be unduly optimistic in hoping that the policy of the government of Ontario would be that it is not in the best interests of Confederation for a provincial government to restrict the use of its basic natural resources from an interprovincial point of view for the development in a less than altruistic fashion of its interprovincial secondary industries?

Mr. Speaker: That sounds like a question and three supplementaries.

Hon. Mr. McKeough: Mr. Speaker, I think the answer to all four parts of the question would be ‘yes’. I’m not sure that I used such flowing language as my friend from Sarnia uses, but the answer is yes.

Mr. Speaker: The hon. member for Port Arthur.

ECONOMIC DEVELOPMENT IN NORTHWESTERN ONTARIO

Mr. Foulds: Mr. Speaker, I have a question of the Minister without Portfolio responsible for municipal affairs within TEIGA. I wonder if the minister could elaborate on the statement he made over the weekend at Sault Ste. Marie with regard to economic development in northwestern Ontario. Specifically, could he indicate if that has any relation to the “action pacts” announced by the federal Minister of Manpower and Immigration, and for what areas of identified need will funding be made available? For example, will transportation, industrial and economic development, municipal infrastructure, social development and housing all be considered in the final announcement?

Hon. D. R. Irvine (Minister without Port- folio): Mr. Speaker, I don’t believe there is any further elaboration at this time. I indicated to the people present and to the press that there would be an agreement, we hope, signed in the near future. We will do it in conjunction with the federal government and we are not about to release details of the agreement at this time. We are hopeful that we have persuaded the federal government to move as quickly as possible to sign this agreement with us. At that time, all the municipalities affected, the federal government and ourselves will be present.

Mr. Speaker: The member for Port Arthur.

Mr. Foulds: One supplementary, if I may, Mr. Speaker: What has been the delay, the hangup, in making the joint announcement between the federal and the provincial government? Can the minister take us into his confidence to that extent? Isn’t it about time that we had some concrete action? Surely the minister understands the people in north- western Ontario are frustrated by announcements about announcements?

Hon. Mr. Irvine: Mr. Speaker, I agree wholeheartedly with the member that it is time for concrete action. We are endeavouring to do this. The Treasurer and Minister of Intergovernmental Affairs has, with me, made every effort to clarify any misunderstandings which may exist at present, or have existed in the past, between the federal government and us. There are certain criteria which must be included in the agreement as far as we are concerned, and we are going to stick by those criteria. It’s up to the federal government to say either yes or no. We hope it has said yes as of today but I’m not aware that it has.

Mr. Speaker: The hon. member for Rainy River.

Mr. Reid: Will some of the criteria be the same as in regard to the agreement in Cornwall? Secondly, if I may, Mr. Speaker, will the federal election hold up the signing of that agreement or can we expect that before the end of June?

Hon. Mr. Irvine: Mr. Speaker, I would expect the federal election will probably hasten this agreement, if anything. It would be in the interests of the federal government to make sure the agreement went through, I think.

Mr. Speaker: The member for Ottawa East.

WAGE AND PRICE CONTROLS

Mr. Roy: Mr. Speaker, a question of the Premier which is related to some of his earlier answers: In light of the fact he is openly supporting the federal Tories and their major plank is wage and price controls, has he changed his position on that issue? Is he prepared to support wage and price controls?

Hon. Mr. Davis: Mr. Speaker, I don’t want to take this occasion to answer a further supplementary question or to make a political speech. I have made it very --

Mr. Roy: Just answer the question.

Hon. Mr. Davis: -- clear in this House -- although the temptation is very great.

Mr. Reid: Yes or no?

Hon. Mr. Davis: The temptation is very great because the Liberal Party of Ontario is now on record in favour of wage and price controls. That became obvious after the statements this afternoon.

Mr. Roy: No, we are not.

Hon. Mr. Davis: I would only say to the member for Ottawa East -- as I’ve said in this House -- this province, this government, is prepared to co-operate with the federal government in logical moves --

Interjection by an hon. member.

Hon. Mr. Davis: -- with respect to inflation. I have said that if the federal government, in its wisdom, felt that wage and price controls on a short-term or flexible basis made sense for all Canada, we would not raise any constitutional objection and we would be prepared to co-operate. I’ve said that a dozen times and that answer still stands.

Mr. MacDonald: That’s a copout.

Interjections by hon. members.

Mr. Lewis: That certainly avoids the issue.

Mr. Roy: Mr. Speaker, if I might ask a supplementary: Does it appear to the Premier that the 90-day freeze as proposed by his federal leader is something that is logical and makes good sense? Secondly, Mr. Speaker, how can he possibly take that position in light of the experience of England and the US?

Hon. Mr. Davis: Mr. Speaker, I really don’t think this House is the place to debate the federal election.

Interjections by hon. members.

Hon. Mr. Davis: If the member for Ottawa East, like his leader, wants to go on the record as being in total support of the federal budget and what the federal government has done and is doing about inflation, be it on his own head.

Interjections by hon. members.

Hon. Mr. Davis: I just don’t think they have done a job. I don’t think their budget comes to grips with it realistically and I have no hesitation in saying so.

Hon. E. A. Winkler (Chairman, Management Board of Cabinet): Go home and brag about the budget now.

Interjections by hon. members.

Mr. Speaker: Order, please. The member for High Park.

Mr. Shulman: A question of the Minister of Housing, Mr. Speaker.

Hon. Mr. Davis: I still think the member is going after that nomination.

Mr. Lewis: I think the Premier may be right.

Mr. Roy: No way.

Hon. Mr. Davis: I think he must be.

Interjections by hon. members.

Mr. Speaker: Order, please.

Mr. Lewis: Let’s have a little order for the member for High Park.

Interjection by an hon. member.

Mr. Lewis: It isn’t often the member for High Park gets a chance; now quieten down.

COST OF LAND FOR HOUSING

Mr. Shulman: A question of the Minister of Housing, Mr. Speaker: In view of the comments last night by his colleague, the Minister of Government Services (Mr. Snow) on page 1870-3 of Hansard, during his estimates, that since the government brought in the land speculation tax, “the price of land is continuing to increase,” does the minister think that perhaps he should bring in some sort of a tax that would control the price of land?

Mr. MacDonald: Or the Minister of Government Services!

Hon. Mr. Winkler: Out of context. Out of context.

Hon. S. B. Handleman (Minister of Housing): Mr. Speaker, I knew the New Democrats felt a little left out of this exchange and would get in sooner or later

Mr. Lewis: Oh no.

Hon. Mr. Handleman: I haven’t read my colleague’s statements. I didn’t bring in the tax. It was the Minister of Revenue (Mr. Meen) who brought in the tax.

Mr. Shulman: But the member is the minister responsible for housing.

Hon. Mr. Handleman: I am responsible for housing, Mr. Speaker, but I would have to examine the statistics which apparently supported my colleague’s statement. I will look at those and perhaps respond to the hon. member. It is our feeling, and all the information we have supports it, that housing prices are declining,

Mr. Stokes: But not land.

Hon. Mr. Handleman: I really can’t speak with any authority on the price of undeveloped or developed land.

Mr. Stokes: Land prices are not declining.

Mr. Shulman: A supplementary, Mr. Speaker: Inasmuch as the minister’s colleague said that his ministry is continuing to buy a great deal of land and that prices continue to increase, does the minister think that the price of housing can somehow be kept down if land continues to increase in price?

Mr. Roy: He will build on water. The minister should tell them he will build on water.

Hon. Mr. Handleman: Mr. Speaker, within a few days we hope to be making an announcement that will have the effect of reducing land prices. My ministry is acquiring land all the time, and I have no indication from my land acquisition officers that the price of land is continuing to increase.

Mr. Breithaupt: The minister had better ask them again.

Mr. Speaker: The hon. member for Rainy River.

NORONTAIR NORTHWEST

Mr. Reid: Thank you, Mr. Speaker. I have a question of the Minister of Transportation and Communications. I might say, Mr. Speaker, I am glad to hear of his announcement today. I’ve been waiting a long time. But I would like to ask the minister two questions in view of the fact that he suggested it may be a year before the northwestern air service is fully established.

First of all, will there be any interim financial assistance available to carriers between now and that year? Secondly, will individual legs of the system be able to become operational almost immediately, given the fact that airports and planes are available?

Hon. Mr. Rhodes: Yes, Mr. Speaker, we will be making the necessary contacts with the carriers who would be interested to get them to make their proposals to us; and where the facilities are available we will begin the service as quickly as possible. I think the 12-month idea was in order to get some of the airports up to standards in the communities I mentioned.

The financial involvement, of course, will be a matter for negotiation with the individual carriers as to what degree of subsidy will be involved through the province and through the ministry.

Mr. Speaker: The hon. member for Sudbury East.

Mr. Martel: Mr. Speaker, is it the intention of the ministry to do with this service as it is going to do with the northeastern Ontario service, which we will sell at the end of three years if it makes money or retain if it loses money?

Hon. Mr. Rhodes: Mr. Speaker, that is a supposition on the part of the hon. member. We are not intending to sell the service at all. We intend to continue operating the norOntair service in northeastern Ontario as we have been doing, and we will continue in northwestern Ontario in the same way.

Mr. W. Hodgson (York North): The member for Sudbury East had a dream.

Mr. Speaker: Supplementary?

Mr. Martel: Yes, Mr. Speaker. Is the minister not aware that his predecessor in that portfolio indicated it was the government’s intention to opt out at the end of three years?

Hon. Mr. Rhodes: Mr. Speaker, the three-year period is ending and I can assure the hon. member that I have no intention of opting out of that service.

Mr. Singer: What about dial-a-bus?

Hon. Mr. Rhodes: Dial-a-bus in Downsview? Out.

An hon. member: Everybody wants out of Downsview.

Mr. Speaker: The hon. member for Wentworth is next.

BECKER MILK CO.

Mr. Deans: Mr. Speaker, I have a question of the Minister of Labour. Can the minister indicate when he intends to make changes to either the Labour Relations Act or the Employment Standards Act to ensure that the employees of Becker Milk Co. Ltd. and other companies in the same fashion are given the protection that other employees in the Province of Ontario are given?

Hon. F. Guindon (Minister of Labour): Yes, Mr. Speaker, as I have said already, we are reviewing both the Employment Standards Act and the Labour Relations Act, and I propose, of course, to make some amendments to these Acts in the House at the appropriate time. We are working intensively on both of them. I cannot give the hon. member any date as yet.

Insofar as the Becker people are concerned, as the hon. member knows, there is still room for appeal. I think Becker has appealed some of the decisions of Prof. Carter; I would have to refresh my memory on that, but I think that is where it stands.

Mr. Deans: A supplementary question: Is it the intention of the government to establish, by law, the relationship between Becker and its employees as Mr. Carter envisaged it should be? Secondly, were there any representations made to either the Minister of Labour or to anyone else in the ministry from Mr. Stanley Randall on behalf of Becker when he was in the employ of Becker as a labour consultant last year?

Mr. Lewis: It is too much to believe.

Hon. Mr. Guindon: Answering the first part of the question that is exactly what we want to do. We want to define really who is a manager and who is an employee -- the employer-employee relationship. That is the question we are delving into at the present time. There have, of course, been representations made to my ministry by both sides.

Mr. MacDonald: Which year and which century?

Mr. Deans: Does that include representations by Stan Randall on behalf of Becker?

Hon. Mr. Guindon: Mr. Speaker, I remember Mr. Randall calling me on the phone and I remember meeting with him on one occasion.

Mr. Foulds: On behalf of Becker?

Mr. Speaker: The hon. Minister of Transportation and Communications has the answer to a question asked previously.

KRAUSS-MAFFEI SYSTEM

Hon. Mr. Rhodes: Thank you, Mr. Speaker. Earlier in the question period the hon. member for York-Forest Hill asked what the cost of widening Lakeshore Rd. would be and who was going to pay for it. Metro has called a large contract to resurface Lakeshore Rd. The total cost of the project is approximately $1.7 million. The widening of the road at each end of the contract, which is necessary as a result of the construction of the GO-Urban service, is estimated to cost $225,000. That amount will be paid by the ministry; the balance will be paid by Metro.

Mr. Speaker: The hon. member for Kitchener.

FIRE IN OHC TOWNHOUSE

Mr. Breithaupt: Mr. Speaker, a question of the Minister of Community and Social Services: Following the tragic fire in which six persons lost their lives in Metro Toronto, can the minister advise if funds can be made available to cover the costs of transportation of the remains of the mother and her four children to the Indian reserve so that this tragedy will at least come to a conclusion that might, in the circumstances, be a happier result than would otherwise be?

Hon. R. Brunelle (Minister of Community and Social Services): Yes, Mr. Speaker, this morning my colleague, the Minister of Housing, brought this to my attention and we are very pleased to provide for the cost of transportation to send those Indians for burial within their reserve near Kenora.

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

PROVINCIAL LIBRARY GRANTS

Mr. E. J. Bounsall (Windsor West): A question of the Minister of Colleagues and Universities, Mr. Speaker: Is the minister aware that due to the completion last November of a much larger Windsor public library and the resulting vastly increased expenditure in utilities and maintenance, in order to keep within the eight per cent provincial budget increase in library budgets the Windsor library board has had to cut the book acquisition to one-half; the same sort of cut for acquisitions of recordings; no expenditures at all in the audio-visual area; and it has had to ask its entire library staff to work one week at no salary? Therefore, will the minister ensure that the provincial grant this year can go above the eight per cent, particularly to the Windsor library board?

Hon. Mr. Auld: In answer to the first question, Mr. Speaker, no; and in answer to the second, I’ll inquire about it.

Mr. Speaker: The hon. member for Waterloo North.

WATERLOO REGIONAL HEALTH BOARD

Mr. Good: Thank you, Mr. Speaker. A question of the Minister of Health: I think the regional chairman of Waterloo has persuaded council to vote to abolish the regional health board as it now exists -- which includes provincial appointments -- and bring the health board completely under regional government. Would there be any change in the grant structure, which is presently 75 per cent, and secondly, are they legally allowed to eliminate the health board?

Hon. F. S. Miller (Minister of Health): Mr. Speaker, I was unaware of this move in the member’s area. It’s an interesting problem, because we are trying the reverse in the city of Toronto, to get Toronto and the suburbs to come together and get the extra grant. I would think that probably there was cause for a change in the grant if that happened, but prior to making a firm decision I would like to look into it and see what in fact is happening.

Mr. Speaker: The hon. member for Thunder Bay.

NORTHERN ONTARIO MEDICAL STUDENTS

Mr. Stokes: Thank you, Mr. Speaker. I have a question of the Minister of Colleges and Universities. Is the minister prepared to intervene on behalf of applicants from northern Ontario to medical school who are being denied admission to medical courses on the grounds that their academic standing in relation to the academic standing of people who reside within ready distance of the universities obviates the possibility of them enrolling in those particular courses? And, specifically, will he check with the University of Ottawa, which has denied medical students admission to courses on the grounds that they did not in fact qualify because of their relative position, academic-wise, to those living immediately around the Ottawa area?

Hon. Mr. Auld: Mr. Speaker, as the hon. member is aware, the admission requirements for the various universities are set by the universities and there has never been, to my knowledge, any interference on the part of the province in this connection. I do know that there are many more applicants for a number of the courses, including medicine, than there are places.

All I can say is that I will inquire about this, but I would assume that the universities are doing what they have always done, and that is taking a look at the academic standing and other qualifications of the applicants, regardless of their home base.

Mr. Stokes: Supplementary: In view of the fact that there are no medical schools in northern Ontario, and in view of the fact that a good many students aspire to a medical career in the north, where there is such a shortage of them, would the minister inquire to see that there isn’t discrimination against applicants from northern Ontario?

Hon. Mr. Auld: I will inquire, Mr. Speaker, but my guess is that any so-called discrimination has nothing to do with place of origin, but rather academic standing; which I think the hon. member would appreciate.

Mr. Stokes: Not necessarily.

Hon. Mr. Auld: I would hesitate even to attempt to suggest to universities that they accept students from a certain area because of the area rather than because of their academic standing, and the likelihood of them graduating effectively. I would not like to be accused of attempting to provide less qualified people in a field particularly as important as medicine.

Mr. Martel: Oh, that is nonsense.

Mr. Reid: Supplementary, Mr. Speaker.

Mr. Speaker: The question period has expired.

Petitions.

Presenting reports.

Motions.

Mr. R. F. Nixon: Mr. Speaker, on a point of order before you proceed. I’d like to bring to your attention, sir, that a group of students from Princeton in Oxford county has just come into the gallery. I know, sir, that you would like to welcome them.

Mr. B. Newman (Windsor-Walkerville): A fine-looking bunch.

Mr. R. F. Nixon: That’s in my riding.

Mr. Speaker: Introduction of bills.

COLLEGES AND UNIVERSITIES ACT

Hon. Mr. Auld moves first reading of bill intituled, An Act to amend the Colleges and Universities Act, 1971.

Motion agreed to; first reading of the bill.

Hon. Mr. Auld: Mr. Speaker, as I mentioned in my statement at the opening of the House today, this will establish the Ontario Council on University Affairs by legislation. In reply to a comment from an hon. member, the committee on university affairs was appointed by the minister and had no continuity; it could have been dissolved at any time.

ANSWERS TO WRITTEN QUESTIONS

Hon. Mr. Winkler: Mr. Speaker, before the orders, I would like to table answers to questions 1, 6, 9 and 15.

Mr. Breithaupt: Mr. Speaker, before the orders of the day, I am wondering if the House leader could give us some assistance with respect to the ordering of business. It appears as though the health bill may take some time in committee. And Natural Re- sources in the other committee, of course, is to be followed by Community and Social Services. Since members may well be involved in both of those areas, could some consideration be given to putting another ministry’s estimate in committee following Natural Resources? Perhaps it could be from another policy field -- such as Consumer and Commercial Relations -- so as to avoid the duplication of having the same members involved in both locations?

Hon. Mr. Winkler: Mr. Speaker, that is a very fair request. As the member knows we have tried to keep these areas of concern apart so the same members aren’t involved. I will have a look at it and see what arrangement I can make to ameliorate the problem.

Mr. Speaker: Order of the day.

Clerk of the House: The second order, House in committee of the whole.

LAND SPECULATION TAX ACT (CONTINUED)

House in committee on Bill 25, An Act to impose a Tax on Land in respect of certain speculative Transactions affecting the Control or Ownership of Land.

On section 1:

Mr. Chairman: At our last sitting we were beginning discussion on page 3, of subsection (v), I believe. Is there anything on this particular subsection? The member for Lakeshore.

Mr. P. D. Lawlor (Lakeshore): On clause (v), which has reference to farming properties in which the family farm corporation isn’t involved, would the minister take a few moments to explain to me how he sees that clause working?

Hon. A. K. Meen (Minister of Revenue): Yes, I would be pleased to, Mr. Chairman. It is a rather complicated clause to try to read and understand.

In short, this permits 10 per cent per annum compounded annually on what I choose to call the base price; that is the acquisition price if it was bought after April 9, or the value on April 9 if it was acquired before that date. It is the 10 per cent figure compounded annually from that date forward for each year the farm has been held in farming prior to its disposition.

By the wording of this section it spans inter-family dispositions or inter-family transfers of the tide when the farm is kept in farming and when it flows from a father to a son to a grandson and so on; in other words a family farm within the definition of family farm corporation.

This operates to establish the value at the time of the disposition when it is, as prefaced at the beginning, the case of a disposition of farming land to which clause (h) of section 4 does not apply. That looks to the point in time when, after whatever number of these transfers of title may have occurred since April 9, or since the acquisition under a non-4(h) section, the transfer is again made under provision other than section 4(h).

Does that clarify that? I recognize it is rather difficult to understand.

Mr. Lawlor: That helps. I have three questions, basically, arising out of it.

When you say that the allowance is 10 per cent per annum calculated with annual rests, why are you putting in the words “with annual rests”? Is that to exclude compounding factors; or precisely what is the raison d’être of that?

My second question has to do with wording further down, “on the designated land by the transferor making the disposition.” Does that mean that if a speculator should get into farming in order to save his hide and take some of the advantages, say there is a tenant farmer who has been working that land for a period of time, since you place your full weight upon the word “transferor,” do you mean that the person who actually owns the land or has the prime beneficial interest in the land is the one who must do the farming in order to gain the benefit? Let me put it this way: Does the minister recognize the effect it may have upon the tenant farmer in Ontario; and is he being in any way constricted, overridden or is the minister building into his legislation some kind of caveat against his continued existence?

Third question: If there has to be continuity for the 10-year stretch, what happens in the case of, say illness on the part of the farmer who also is a transferor over a period of time? Say he is sick for a year; can he pick up the benefit after that period? What if he is not actually farming the land -- he is not carrying on at all -- what happens in that particular context?

Hon. Mr. Meen: Mr. Chairman, I’m sorry, I missed the last question. Would the member care to repeat that?

Mr. Lawlor: Mr. Chairman, it is in regard to illness over a period of time in which he was absent, either through fault of his own or no fault of his own, and unable to follow the continuity of the benefit being conferred by way of deduction in this clause.

Hon. Mr. Meen: Just to answer the last question first -- we would not want to penalize the farmer who was ill and for whatever reason had to get somebody in to work his farm for some period of time. The hon. member also asks about “annual rests.” That is a term I have seen frequently in various legal documents. It has always been my understanding that was the technical jargon for stopping to add the calculation of interest to the principal to establish a new principal balance upon which the interest rate then compounds; and it indeed establishes a compounding factor.

Mr. Lawlor: It doesn’t exclude a compounding factor; it recognizes and affirms.

Hon. Mr. Meen: Yes, indeed.

Mr. Lawlor: How about the second question, the problem of the tenant farmer?

Hon. Mr. Meen: I don’t think I had anticipated that we would rule out the possibility of the investor holding a piece of land and keeping it in farming; we want to keep land in farming.

Mr. Lawlor: That’s what I thought.

Hon. Mr. Meen: And yet under this arrangement, to permit these other accumulations of the 10 per cent it has to be the farming family that owns the farm and has it under its own tillage.

I’m a little concerned about the matter which the hon. member for Lakeshore raises with respect to illness, though, and I would think that some kind of a period might be provided for by way of regulation that would protect them against that sort of problem when you got out of the family.

Mr. Lawlor: With respect, Mr. Chairman, on this one point, I would ask the minister to advert just a bit more than he is doing at the moment to that tenant farmer situation. He may have not, in his haste to design this complex legislation, given sufficient weight to that factor. I would ask him to mull that one over for a little while too.

Hon. Mr. Meen: I recognize that if the farmer were to lease out the property --

Mr. Lawlor: That’s right.

Hon. Mr. Meen: -- that would create a break in the period and there would then be a realization of a disposition, if the lease were for a period of years within the description of the lease -- 10 years or more. I wouldn’t expect that would be the case in the instance of farming. But we will give that some further thought and I appreciate the observation made by the member.

Mr. Chairman: The member for Sarnia.

Mr. J. E. Bullbrook (Sarnia): Do I take it then, in response to my colleague the member for Lakeshore, that the minister is saying in effect that he construes the words “carried on” as being an active participation in the actual definition of farming on page 5 of the legislation? The minister wouldn’t contemplate the landlord-tenant relationship as exempting the transferor in this situation?

Hon. Mr. Meen: That is right, Mr. Chairman, I would not contemplate that.

Mr. Bullbrook: Just a matter of interest to the minister. As a lawyer, I would think one might have some success in arguing the point that a transferor who was not actively participating but was doing it under some sort of lease arrangement was carrying on farming. I am just wondering if the minister had benefit of advice in connection with the interpretation of those words.

Hon. Mr. Meen: Mr. Chairman, I would say no, I haven’t, on that point. This is going to be one of those areas we’ll be working with. I noted the observations by the member for Lakeshore, and I note also the observation by the member for Sarnia.

Mr. Bullbrook: Is it possible, recognizing the indulgence of the minister to us with respect to a possible amendment, would it be possible to modify it as a verb by saying: “Was actively carried on on the designated land by the transferor”? That is a suggestion only.

Hon. Mr. Meen: I think, if anything, that tends to worsen the situation. It makes it a little more difficult to provide for the farmer who may be taken ill and require some assistance for a short period of time while perhaps still living in the premises, or the family still being there. I am a bit concerned about the word “actively” being put in, Mr. Chairman.

Mr. Bullbrook: Recognizing, I think, the sympathy of the minister and ourselves to the three points brought up with significant validity by the member for Lakeshore, which we on this side of the House were going to bring up ourselves, do I take it from the rather elastic response that we received from the minister that he doesn’t expect a vote on this in its present construction; that we intend to perhaps come back to it afterwards -- after some attempt by his senior officials to modify things?

Hon. Mr. Meen: No, I don’t think, with all respect to the member for Sarnia, I had intended that. What I said was that there are difficulties, when one puts the bill together from a start with no precedent, in catching everything and resolving one’s thinking in all these areas exactly the way we want it. In some instances, such as perhaps this one, it may be necessary to work with it for a while to see how it will work. It may look great in theory but in practice it may turn out rather differently. I would mention that the word “actively” I think would limit us; the way it’s provided now he could have a manager, for example, running the farm for him if he had been injured or otherwise wanted to retire from active participation in farming.

Mr. Bullbrook: May I suggest to you that the ingenuity shown by the minister in connection with a rather peremptory evaluation of the impact of this section is nothing compared to the ingenuity the legal profession as a whole and tax experts as a whole will show with respect to not only this entire statute but to this section itself.

I want to invite the consideration of the minister, through you, Mr. Chairman, to the definition of farming itself. If I was called upon tomorrow to advise a speculator how to exempt himself at least in part from the impact of this statute one would ask him, for example, to buy himself a bull and a cow and put them out there. If he in fact does so, the breeding of stock of all kinds in which he is actively participating, perhaps somewhat peripherally, exempts him as a farmer under the exemption section.

Mr. J. R. Breithaupt (Kitchener): Even a couple of rabbits, too.

Mr. Bullbrook: One wonders -- even a couple of rabbits! That’s carrying it ad absurdum, but it would certainly be more economic, I would think, in the long run.

An hon. member: He’d end up with a lot of rabbits.

Mr. Bullbrook: I really am concerned. As I say, the points to be raised by my colleague the member for Huron-Bruce (Mr. Gaunt), who is completely unhappy with this section, are going to be much more appropriate than mine.

I have to look at this as a lawyer and I want to put it to you directly that as a lawyer, if, tomorrow morning, people came to me in my function as a lawyer -- or at least when, perhaps, I’m not a member of this House -- and said: “Mr. Bullbrook, I want to buy this land. I want to extricate myself from the impact of that statute,” I certainly would invite them to look at the definition of farming.

I want to say to you that the definition of farming, developed in subsection (e) on page 5, put together with the exemption section under subsection (v) here, opens a loophole that every speculator will drive his Cadillac through without any difficulty at all.

I’ve never been a great spokesman for the agricultural industry. As a matter of fact, my colleague from Huron-Bruce said to me I must have seen the light because I’m very much concerned with the impact of this legislation on farming people in Ontario. We in this party certainly are, all the way.

We know as a matter of fact that any right- thinking person sitting on the government benches is concerned with the ad hoc-ery exemplified by the Treasurer in that moment of glory when he put through the budget and he didn’t know for one moment how to implement what he was saying.

Hon. J. White (Treasurer and Minister of Intergovernmental Affairs): I thought your party voted for this bill?

Mr. Bullbrook: The impact on the farm people of Ontario is a significant one. Right off the bat, Mr. Chairman, we have my colleague from Lakeshore who himself would agree that he, like us, cannot hold himself as tremendously knowledgeable with respect to the welfare of the farm population of Ontario, and who can see that this particular statute should never, directly or indirectly, by any stretch of the imagination have any impact upon the farm people of Ontario who are sincerely operating their land for agricultural purposes.

The problem we face is this, and I say this with the greatest respect -- because I have the greatest respect for the Minister of Revenue who has undertaken an extremely delicate and difficult obligation with respect to implementing those pious platitudes of the Treasurer in the budget statement; it was all right for him that day, Mr. Chairman, to stand here and point up to his friends in the gallery and receive the applause of the government benches, but the fact of the matter is he didn’t have to write the statute.

I say this to you, Mr. Chairman: It wasn’t two weeks before that budget day that he got that bright idea, or somebody gave him that bright idea. We agree with the so-called bright idea in principle. The problem that we face, in good faith with the Minister of Revenue, is to try to write a taxing statute that will be efficacious, that won’t have holes in it, that will be equitable, that won’t hurt people whom we don’t want to hurt; but this isn’t what we are doing.

I catalogue for you just one short litany. What about illness? What about continuity? What about the active participation of the transferor? What about the tenant farmer? What about a management contract? What about the definition itself? All those things are contained in this very subsection, the heart of which might affect the agricultural industry in the Province of Ontario.

I have taken the place of the member of Lakeshore, and I shouldn’t have, but I think I can speak for him in saying that it is not good enough for the minister to say to us: “We’ll pass it in its present form. We’ll see how it works.” Because as long as we sit in this House, we don’t want it to work to the adverse interest of the farming population of Ontario. More important, we don’t want to leave these manifest loopholes to permit pure speculation under the guise of so-called agriculture or farming.

Mr. Lawlor: Mr. Chairman, on that point, my main remarks under this head, of course, will be directed to subclause (e) on page 5, but right at the inception of this farming concept I think is the appropriate time to say that this is a door so wide as to drive all the locomotives through. It’s the simplest thing in the world.

Have you done this deliberately? Have you left this thing in such a ragtag, bobtail fashion that you can drive a locomotive clean through the centre of your Act? Your Act becomes a completely nugatory and senseless document as things stand. As I say, I shall be presenting to you what I think is a more proper definition of farming in the hope you’ll see the light and perhaps adopt it --

Hon. Mr. Meen: Mr. Chairman, on a point of order, certainly I am open to any suggestions, and I will welcome suggestions from the opposition, but I would observe that this is under subclause (e). When we get to the definition of farming we can talk about that there; and I can tell the hon. members, either then or later, where I got that definition and what my expectations are for dealing with it. But right now, sir, I would suggest we are on subclause (b).

Mr. Lawlor: Yes, I think you are right.

Mr. Chairman: The member for Huron-Bruce.

Mr. M. Gaunt (Huron-Bruce): Mr. Chairman, I think one of the problems in this legislation is that the government and the minister have not recognized the difference between an investor and a speculator. The farmer is an investor and not a speculator, and I propose, when we get to section 4(h) of the bill, to put forward an amendment that will make this particular section redundant.

However, I would have to say to the minister that the way this bill is drawn certainly leaves the door wide open, as the member for Lakeshore and the member for Sarnia have said. There is no question in my mind, given subsection (v) and the definition under section (e) that every speculator in the Province of Ontario will be out getting himself a plot of land or a farm --

Mr. Lawlor: A few pigeons.

Mr. Gaunt: -- a few pigeons and a few rabbits, and he’ll classify himself as a farmer --

Mr. R. F. Nixon (Leader of the Opposition): Or a pear tree.

Mr. Breithaupt: Or even two bees.

Mr. Gaunt: -- when in actual fact he is a speculator. I say frankly to the minister that we are going to have to tighten up this bill in that regard, because what it is going to do --

Mr. V. M. Singer (Downsview): On a point of order, Mr. Chairman, I don’t think there is a quorum in the House. Maybe we can get the Treasurer back in if we ring the bells.

Mr. Bullbrook: Why don’t we get some of the rural people from the Conservative benches --

Mr. Singer: Yes, who are so upset.

Mr. Bullbrook: -- who should be concerned about this and should speak about it?

Mr. Breithaupt: They have given up.

Mr. Singer: A special quorum call for the Treasurer.

Mr. T. P. Reid (Rainy River): It’s probably pretty deep for some of them, though.

Mr. Chairman: We will call in the members.

Mr. Singer: Does that mean the Treasurer too?

Mr. Chairman: That isn’t covered by regulation.

Mr. Chairman ordered that the bells be rung for four minutes.

Mr. Chairman: Order, please. We will count again.

Clerk of the House: Mr. Chairman, there are 28 members present.

Mr. Chairman: The hon. member for Huron-Bruce.

Mr. Gaunt: Thank you, Mr. Chairman. I was indicating to the minister that I felt the way this particular bill is drawn provides a great loophole for the speculator. I think in most areas he’s blocked off to an extent. But in this area, in the case of the application to farm land, I feel the door is wide open. I think many lawyers who would be advising their clients with respect to this bill would say: “Well, I’ll tell you one avenue you can pursue, and that’s to buy yourself a farm. In that way you’re going to get out from under this particular tax.”

I feel the minister is certainly going to have to tighten up on the definitions section. I think there are other areas as well which are going to have to be given some consideration.

For instance, the minister says one of the ideas behind the bill is to keep people in farming. That is good, it’s laudatory. But I am suggesting to him that it is going to do the exact opposite, and I will tell you why. With the bill as it presently stands and the loopholes to which several hon. members have referred, the speculators are going to go out to rural Ontario and they are going to buy themselves packages of land, which is going to drive the prices up for the bona fide farmer who is trying to make a living on the farm. If that continues to happen over the course of several years, the farmers who are interested in farming, the bona fide farmers, are going to find themselves in the position where they are not going to be able to afford the land for farming purposes because the return on that land will not equate with the buying price. So they are going to be placed in the position where they won’t be able to buy the land for farming purposes because of the situation where the speculators have driven up the price.

I say to the minister this is a serious matter and one which I suggest he should give more consideration to, because I think the --

Hon. E. A. Winkler (Chairman, Management Board of Cabinet): Is that going to affect the people who are on the land now?

Mr. Bullbrook: He didn’t say it would.

Mr. Gaunt: No, it won’t. But it will affect the people trying to get into the business of farming; and indeed the average age of our farmers across this province is over 50, so in the next few years there is going to be a fairly severe attrition rate. The only way that we can continue to maintain our agricultural production is to bring more people into the farming business, and we can’t do that if land prices on the farm skyrocket to the point where they can’t make a living by farming. So I say to the minister that --

Mr. Bullbrook: This is the insidious part of this bill.

Mr. Gaunt: This is a very insidious thing and I think this particular section should be sent back to your draftsmen and redone. I think it should be given further consideration, because the way it stands now you are in serious trouble and we are in serious trouble in this province.

Hon. Mr. Meen: I would like to ask, on a point of clarification Mr. Chairman, is the hon. member talking about subclause (v) or is he talking about the definition of farming?

Mr. Gaunt: I am talking about both.

Hon. Mr. Meen: Everything I have heard so far has been farming as applied to subclause (v) and I think we can talk about the definition --

Mr. Bullbrook: On a point of order. I neglected to rise when the minister made this original point of order. It is impossible for us to vote intelligently on the passage of subclause (v) if we don’t take into consideration the definition of fanning.

Mr. Gaunt: But section 4(h) comes in too.

Mr. Bullbrook: And 4(h), I’m sorry; 4(h) comes in there too.

Mr. Gaunt: Right, it is all a package.

Mr. Bullbrook: I don’t see how, with the greatest respect, we can possibly evaluate the impact of one subsection without looking at the bill as a whole.

Mr. Chairman: We can’t keep jumping all over the bill either.

Mr. Singer: Mr. Chairman, as my colleague says --

Mr. Chairman: I thought the hon. member bad an amendment or was going to propose an amendment?

Mr. Gaunt: No.

Mr. Chairman: Oh, I see.

Mr. Singer: Mr. Chairman, I rise in support -- and very, very strong support -- of what my colleagues have been saying. I draw to the minister’s attention his rather peculiar remarks when he quoted with apparent relish a portion of the speech I made on second reading, and I repeat the comments I made then and I say that the minister is wrong, as my two colleagues have just said. I wish the minister would listen to his own rural members such as the hon. member for York North (Mr. W. Hodgson), and the hon. member for Victoria-Haliburton (Mr. R. G. Hodgson). The minister has a number of members over there representing farm areas --

An hon. member: The minister knows that.

Mr. Singer: -- and they are incensed with the provisions that you have for farmers. What fairness is there when you bring this forward and persecute one segment of the economy? None at all. You exempt farmers if their land is taken for expropriation. If farmer A happens to be just within an expropriation line and his colleague, farmer B, just outside it, even though both portions of land have been farmed for three or four or five generations, one is going to be assessed at a 50 per cent tax rate and the other isn’t by reason of the accident of somebody drawing a line on a map.

Does that make any sense to you? If a farm has been in a family for many generations and eventually it comes to the point where either there is nobody to continue the farming because that particular branch of the family has not produced people who want to stay on the farm or there is nobody left, does it make any sense that that land which has been kept in production should be picked on in that way?

Certainly there is a line to walk. If somebody goes on under the guise of farming and puts on a crop of hay for a few months and then speculates, that kind of person should be hit. But surely you can come up with some kind of formula, as you’ve reached for now in your amendments in relation to small income-returning buildings. Surely you can come up with some kind of gradation there and look after people who have farmed a particular section of land for several generations. Surely they are entitled to the fruits of their labours and the fruits of their ancestors’ labours. You are taking that away from them; that’s what you are doing.

It’s all very well to poke fun, and it’s all very well for the Treasurer to pop off again. He gave you a legacy that you’re finding it very hard to live with; and I wish he was here to help protect you in this, because you are taking an unfair shellacking. You are the one who has been charged with the burden of trying to put this through.

Stand with your own rural members. Speak to the Minister of Agriculture and Food (Mr. Stewart) or his parliamentary assistant or the few rural members who are here in the House now, the member for Peel South (Mr. Kennedy), and the member for Glengarry (Mr. Villeneuve). All of those people are getting the same kind of reaction from their constituents that we are trying to express to you.

Who do you listen to when you get at this kind of drafting? Those three sections that my colleague just referred to, subclause (v) and the definition of farming and then section 4(h), all tie into a package. I urge the minister to take those three sections back, look at them again, come in with some kind of gradation, depending on the length of time a particular property has stayed in farming use, and make some reasonable kind of an exemption.

We don’t want a blanket exemption. We don’t want people to be able to continue in the guise and escape their proper responsibilities under speculators’ taxes or any other kind of taxes by putting on a crop of hay and saying I am now a farmer. But we do feel that important consideration has to be given to those families which have owned a piece of farm property and farmed it through several generations. You are ignoring that, and I say it’s unfair. I say you are needlessly persecuting an important segment of the Ontario community.

Mr. Breithaupt: Mr. Chairman, I too would like to follow the remarks made by my colleagues with respect to the matter of the definition and practical result of the use of the word “farming” in this statute. I think that it is important for us to --

Mr. Chairman: Order please. I think whatever definition is arrived at later will have to apply to this.

Mr. Singer: No, but it’s a package, Mr. Chairman.

Mr. Chairman: Well, let’s dispose of this subclause (v) first of all. Then we can get to a definition of farming.

Mr. Breithaupt: Mr. Chairman, it’s very difficult to dispose of a section this way when we don’t know what its result will be.

Mr. Chairman: You are talking about farming in this section, it seems to me.

Mr. Bullbrook: I’m going to rise on a point of order, and I’m going to rise most respectfully to you, Mr. Chairman, to point out the word farming is used in the clause which is the subject of our present debate. Do you agree with that Mr. Chairman? The word “farming” is used?

Mr. Chairman: In this particular subclause?

Mr. Bullbrook: It is. Is there anything in the rules that says we cannot refer to a definition of farming in the same statute? We are not debating what definition should be in there at the present time. Nobody has put forward a substitutional definition. We are debating the impact of the defined word “farming” in the subclause. I most respectfully suggest to you it is not out of order.

Mr. Breithaupt: Mr. Chairman, I have noted with great interest the fact that a number of members have joined into the debate in this area. It would appear that certainly not all of us, the member for Downsview or the member for Sarnia or I, are involved in directly representing a large number of farmers as constituents. Our interest here is to ensure that the best possible taxing statute can arise from what we are deliberating.

It has been unfortunate in this debate so far, Mr. Chairman, that here have been occasions for a number of quorum calls. It appears as though a large number of the members of the House have not interested themselves in this particular debate.

Mr. Chairman: Order, please. That has nothing to do with this. The member must realize there are two other committees sitting.

Mr. Breithaupt: I realize that, Mr. Chairman, and this is what I was coming to.

It’s not necessarily that they have been unwilling to be here. They have been unable to be here for other reasons, but the difficulty is going to be when perhaps we are called to vote upon this section. Members may come in and not realize the particular depth of problem they are being called to vote upon when they come either to support or oppose these various subsections. This matter is all of a piece when we are looking at the matter of the future development of farming within the province.

I suggest to the minister that we must deal with these particular areas altogether; that is not only this subclause (v) but also when we press on to the definition of farming, subsection (e) in this same section, and then the matter set out in subsection (h) of section 4 which deals with designated lands and their disposition.

I would appreciate hearing from the minister how he feels this kind of situation of applying the tax to disposition is going to affect the future development of the principles of the use of farming land in the province, to which I think we all subscribe.

Hon. Mr. Meen: Mr. Chairman, subclause (v) is conceived really to provide a number of things along with the other provisions in the Act. It permits the flow of a family farm from generation to generation without ever attracting tax. It allows the compounding of the 10 per cent per annum back to the time when it was first acquired on an arm’s-length transaction or at April 9, if it happened to have been acquired prior to that date. We are allowing that as the base value and the interest is computed on that; ergo, we have allowed all capital appreciation up to that time free of any tax.

It’s not unreasonable, I suggest, that we take that as the date, or the date of acquisition if it should be later, and roll up the 10 per cent per annum from there. When eventually the farm is sold, if it’s a non- section 4 sub (h) transaction and therefore out of the family, even if it is sold for continued farming purposes, it’s our belief -- and I subscribe to this -- that the farmer will then be deemed to have taken his capital appreciation. If it exceeds the 10 per cent roll-over allowance per year from his base price at acquisition or April 9 or 10, it seems to me that’s a very reasonable way to do it.

He may be selling it to a developer, he may be selling it to another farmer; but when he isn’t selling it within the family I think we have to presume he’s going to get his proportionate share of any additional increase. His adjusted acquisition value has all these credits built into it.

I might just observe that I have talked to quite a number of my colleagues on this side of the House who represent rural constituencies and I think they are all comparatively satisfied that the provisions for the farming community are very generous indeed. They are there and in place in a fashion which will be an incentive to stay on the farm and make a dollar’s profit for a dollar’s work. This, of course, is what we are anxious to do as well as not impede appropriate development for housing purposes in due course if such should be appropriate.

Mr. Bullbrook: I think now we have come to the very nub of things and I want, through the chairman, to address myself to the minister. Without being melodramatic I want to address myself to the agricultural community of the Province of Ontario as someone who doesn’t act as their advocate very often.

The minister talks about a capital accretion and we have a statute on the books of the government of Canada that takes care of the taxing of capital accretions. The purpose of this statute is not to tax capital accretions. The purpose of this Act is to tax speculative transactions.

Mr. R. F. Nixon: You are calling the farmer a speculator.

Mr. Bullbrook: This is the essence of what the minister and the Treasurer do not understand in the insidious aspect of this statute.

Now let’s take the designated value day and let’s say that a year from the designated value day the farmer is approached, because of urbanization or any other reason in the world, and is entitled to make a profit on the sale of his land. I say to the minister that he is caught up as far as capital accretion is concerned, by the Income Tax Act of Canada. But I say to you without reservation, Mr. Chairman, that man is not a speculator -- and the minister can stand in this House all day and debate the exemptions.

The exemptions have been brought about as a result of the recognition by the government that some relief had to be given; and so a formula was developed to give the farmer some relief. Section 4(h) gives him total relief in connection with transfers as far as agricultural use is concerned.

But I implore the minister, I implore the members of the government, to recognize that the person who is caught up with a tax on a speculative transaction is no more a speculator than am I, and I can assure you I am not.

The point is we must be fair to the farming community. This is unfair entirely; notwithstanding some conscientious attempt to take away the tax impact under the statute. We don’t have to do that. Surely we have the ability to recognize the farmer’s farm land as part of their livelihood and if collaterally, after generations of developing that land, they have the good fortune to sell that land at a significant capital accretion, then they are going to pay the government of Canada, and eventually the government of Ontario, the tax on that capital accretion from the time that that tax came into being on Jan. 1, 1972, I believe it was.

That is an equitable tax and the farm community didn’t resist that tax. And very few people stood in the House of Commons in Ottawa and tried to resist that tax, because it was a tax that said a dollar for a dollar. But goodness gracious, for us to have to stand in this House and for a moment attempt to develop a formula to extricate the farmers from a tax they never should be involved with, that’s incredible.

I implore the minister to think of my example again. Suppose a farm has been in the family for 50 years, 100 years, even 200 years, and under this statute, and because of pressures over which the farmer has no control or direction, somebody comes and says: “We require your farm and we are prepared at arm’s length to buy your farm.” By any stretch of the imagination can that farmer be considered a speculator? He can’t be considered a speculator.

Why are we playing games with exemptions for him? The man is not a speculator. The purpose of this tax, again according to the Treasurer, and again why we supported it in principle, is to properly tax at a very high and effective rate those people who speculate with land values in the Province of Ontario.

I for one want to tell the minister this; I hope we on this side of the House divide on this section. I think it is the most nefarious section among many nefarious sections in this bill.

The farmers of Ontario, with sincerity and integrity of purpose, have carried on their operations for generations. To call them, in effect, speculators does them an injustice that this government will never remove from the escutcheon of the Progressive Conservative Party. I can assure the minister of that. Don’t fool around for one moment with exemptions. This government doesn’t need exemptions for farm people; they are not speculators.

Mr. Lawlor: Mr. Chairman, I have a banal confession to make. I don’t understand the section at all. I sit here and peruse it. I want this to be parsed for my denuded understanding. This is a situation where the transferor is not a family, or the person to whom it has been transferred is not a family corporation, or a family within that very wide definition -- nieces, nephews, uncles and aunts and all the rest of it -- that has been set up. The minister wants to retain the land in farming and as long as it is retained in farming there are some benefits going to accrue, but it is not within the so-called family concept. That’s where we start. And then you get down and you say that this benefit or deduction of 10 per cent per annum, cumulative, is to be a benefit conferred on the transferor making the disposition to which clause (h) or section 4 does not apply.

That is one. You have four other categories, and I must take them one at a time and ask why and wherefor are they. “Or by any previous transferror of whose family the transferror making the disposition to which clause (h) of section 4 does not apply was a member.” What’s that all about? Why have you got that? What are you thinking of?

Hon. Mr. Meen: The definition comes farther along, Mr. Chairman, as to the members of the family. The hon. member will see that in subclause (g) at the top of page 6. What this really does is to permit the chain of events I outlined earlier, the father to son to grandson to great-grandson, and what not; or off to a brother or a sister or whatever; within the family, as the hon. member will see. This, as I also indicated -- I think he agrees -- is very complicated, but what it does is permit the transfers to all these on the assumption they are not arm’s length, and therefore a disposition doesn’t take place on occurrence of one of those events, but only when it is not under section 4(h). Outside that, beyond members of the family or a family farm, then the disposition is deemed to take place and at that time you work your way back at yearly intervals to the base price at the 10 per cent per annum.

I might just observe that it seems to me if 10 per cent per annum compounded, after you have given allowances for cost -- and remember that the farm would be a money-making proposition to some degree; and the farmers are having a somewhat better life of it these days, and that is fortunate to see, they have been long overdue in that score -- but if they are making some money out of this farm they are still entitled to the accumulation rate at 10 per cent per annum on the base price --

Mr. R. F. Ruston (Essex-Kent): That is going to change after next year.

Hon. Mr. Meen: -- which means that after seven years a $100,000 farm has gone to $200,000, and in another seven years has gone to $400,000. If that isn’t sufficient profit and allowance, then frankly I don’t know what is. And if the farmer makes more than that then perhaps he could be properly classed, to the degree of the excess, in the category of a speculator --

Mrs. M. Campbell (St. George): Oh, no.

Hon. Mr. Meen: -- and on that basis then might be expected to pay some tax.

You are asking us to block the loopholes. On the other hand you are asking me to put in an even larger exemption than ever. Frankly, what we are talking about here is the provision in subclause (v), Mr. Chairman, which provides for these transactions to pass without tax, and yet I hear that the poor old farmer is getting a tough time of it and he should be exempted. We are looking at this within the family, and with respect I think this could be --

Mr. Bullbrook: No, no. Let me resist that for a moment, because I won’t be deflected by that type of specious argument. May I say -- and I’ll only be a moment, I can assure the member for Lakeshore -- you can’t have it both ways.

You are saying we want to exempt farmers, yet we are complaining about the loopholes. May I say to you that it is a two-fold proposition. We want to exempt bona fide farmers; but we also want to say, if you look at the definition of farmers there will be people who will exempt themselves as farmers who are not bona fide farmers; and those are two mutually exclusive points.

An hon. member: Good point.

An hon. member: Right.

Mr. Lawlor: Let me come back on it please, Mr. Chairman. Is this clause designed with respect to lands that are going out of farming, or is it partially designed, as I read it, to retain properties in farming but falling outside certain groups?

Hon. Mr. Meen: Right, it is. In short, Mr. Chairman, it is designed to protect the family farm flowing from father to son to grandson, so if it goes out of farming, then there would be a disposition, because it would not then be a disposition within section 4(h).

Mr. Lawlor: Right.

Hon. Mr. Meen: But if it stays in the family, then the carry-through of the accretions of allowances is complete and it does not attract a tax.

Mr. Lawlor: Did the hon. minister ever read the lines from John Milton of something about a “horrible confusion upon confusion rose”? I hope the confusion is all in my mind and not just in that of John Milton’s or the minister’s.

But if that is the purpose, I take it that if land is going to be retained in farming within the family unit, you have that completely covered by way of exemption, period. If it is not going to remain within the family, then it comes outside of the exemption; if it is not going to remain in farming, then it obviously is taxable as it passes out of farming into some other form of, let us say speculation. And I take it those two contingencies and the second proposition are covered by this section.

All right. I won’t worry you like an Irish terrier about what I didn’t understand as to your explanation about point one just a moment ago.

Let us go on to point two: “ ... or by any previous transferor of whose family the transferor making the disposition” -- that’s the one I read, I’m sorry.

Let’s take the next one: “ ... or by members of the family of such previous transferor ... ” If this is caught within the family unit why doesn’t section 4(h) simply apply and this clause -- what’s that super added for? What is it referring to? Who is this previous transferor?

Hon. Mr. Meen: The previous transferor in this case, Mr. Chairman, would be, let’s say in my illustration given earlier, the father transferring to the son. Perhaps he got it from his grandfather, all in this period of time.

Mr. Lawlor: But that is covered in section 4(h), isn’t it? What is the point in here?

Hon. Mr. Meen: I think the intention is to make sure there is no implication throughout this whole transfer of events and that you have -- what we are dealing with is the “10 per cent compounded annually.” And you’ll see it here: “At the rate of 10 per cent per annum calculated with annual rests upon the amount determined under i and ii, whichever is applicable”:

And I think you can go all the way down here -- “or by any previous transferor.” Now I think the hon. member can see there could be a series of transactions within the family.

Mr. Lawlor: Yes, all of which are exempt.

Hon. Mr. Meen: All of which you look through in computing the interest.

Mr. Lawlor: As long as that land stays in farming it is exempt.

Mr. Meen: Within the family.

Mr. Lawlor: Yes. I don’t see the benefit to the 10 per cent. I suppose you could argue this way, that if it stays in the family for three years then they get in that three-year cumulative period a little in excess of 30 per cent and if it goes out of farming, from the family, then they’ve still got the benefit of that much. Is that what the basic argument is?

Hon. Mr. Meen: We haven’t looked at any specific three-year period as I am proposing to do with respect to investment properties, Mr. Chairman. But through whatever period we are talking we have the 10 per cent cumulative rollup and at the time of the disposition on an arm’s length transaction -- i.e., not a section 4(h) transaction -- then one looks back over the period of years involved. Or if it should go out of farming then it would not be a section 4(h) transaction.

Mr. Lawlor: The horrible confusion is lifting, the fog is dissipating. I am beginning to see what the minister is trying to do. He’s doing it very badly; thank you, Mr. Chairman.

Mr. R. F. Nixon: Go ahead.

Mr. W. Hodgson (York North): Mr. Chairman, I would like to say a few words on this section of the bill.

I think for the most part this bill is good; it’s trying to get at a certain type of farmer and is exempting that certain type of farm as long as it stays within the family for years and years. If he should happen to be lucky enough to live until he is 70 years old, if he is 62 now, and he carries on farming, he would be exempted pretty well.

In the area I live in there are many farmers who call themselves farmers but who are not really farmers. For example, we have a lot of Toronto people coming up there now, investing their money and using farms for estate homes. They maintain the property fairly well, but to qualify as a farmer all a man has to do is make $2,000 of gross income from that particular farm and he can make $200,000 away from the farm.

Mr. R. F. Nixon: He gets that in the tax rebates.

Mr. W. Hodgson: But he will be exempted to the tune of 50 per cent of what his farm is evaluated at on April 9, and seven years from now he won’t have to pay a penalty at all. He can also transfer it to a son and he can carry on in the same manner for a number of years, and this is the part of the bill I don’t agree with.

My concern is about the bona fide farmer. That is the farmer who has farmed for -- you could state a period; I think there should be a time stated in the bill and I wish the minister would give this some consideration -- for 15 or 20 years; I don’t care, 25 years if you want to go back that far.

But the big thing that I think should be in there to make this bill workable is that 75 per cent of his gross income has to be derived from farming in that period, whatever the period of time is.

As I said, it is the legitimate farmer I am concerned about. I feel that if he has made his living off the farm for 15 or 20 years or it has been in the family from generation to generation, and a generation really doesn’t matter if he has been a legitimate farmer in the Province of Ontario, he has had a tough time of it over the last 25 years. If anybody wants to come along and buy his farm and he has farmed it this long and made 75 per cent of his gross income off the farm, I think he should be exempted and it should be noted in your bill.

If he has farmed a farm for 15 years, and has derived 75 per cent of his gross income, why not just write him off and make him exempt?

Mr. R. F. Nixon: Mr. Chairman, the hon. member for York North and the hon. member for Sarnia put the case very strongly and with a legitimate connotation that can be supported on all sides. When the minister started in on this, he said, tell us how we can improve the bill. I would submit to you, Mr. Chairman, that he has had some specific advice on that, public advice from his own supporters and from those who are not normally in that list.

There are really three sections that deal with the matter to which the hon. member who just sat down referred. It’s very difficult to determine where the amendments should come, but in our view it appears that subsection h of section 4 is the most convenient way to put in an amendment which would at least deal in part with the suggestion that has been put forward with good sense by the members who have already spoken.

I would say to you, Mr. Chairman, that it is clear that the minister does not exempt farmers from the classification of speculator, no matter how long they hold the land, if they sell it out of agriculture. The principle of the bill deals with speculative profits and we are concerned with those people who you might say are in the land deal and out of it when the price is right; and as somebody has said, by gosh the price has been right indeed.

We hear of unconscionable, unsupportable, greedy profits that have been made by those people who have no interest in the land, no interest in the home, but simply in the profit they can get by buying the land as cheaply as they can from a farmer and selling it to a developer without adding any value to it whatsoever.

The point has been strongly made about a bona fide farmer. You can classify him any way you choose in amendments that have been proposed. Indicating that his income should be 75 per cent derived from the land would be okay as far as we are concerned. Certainly that would separate the wheat from the chaff in no uncertain terms. A lot of people who think of themselves as farmers would be excluded, but at least it would be a device recognized by the people in the community as a tough test, that if you make 75 per cent of your income off the land, you are indeed a farmer. That is one amendment that could be brought forward certainly.

The member has indicated that there should be a time limit established. We are proposing in our amendment 10 years, when it will be brought forward by my colleague from Huron-Bruce. If it would be more convenient or if the minister would advise that he would feel better with 15 years, perhaps we would consider that. We think that 10 years is a sufficiently long time to establish a bona fide farming commitment. Subsection (v) on page 3 is the indication of government policy that the farmer, no matter how long he holds the land, is in fact not excluded.

The Premier (Mr. Davis) in talking about it, and the minister just a moment ago, said he feels he has been fair in giving us a 10 per cent increase in value compounded yearly, which means that it would double in seven and a half years, I believe. That simply means the farmer is designated as a speculator even though he has operated that land for 10 years or many more years.

It is our view there should be an across-the-board exemption for a bona fide farmer, who is not a speculator, and that this should be made clear in the bill along the lines expressed by the hon. member for York North and also expressed privately by other members who are normally in support of the minister and will be again if he were to bring forward such an amendment.

The member for Sarnia has made an impassioned plea, and it could not be put more effectively in my view, that the House divide on this subclause and maybe we should. We are really interested in having the bill improved in this respect. In my view, subclause (v), if that is how it is properly designated, becomes redundant and therefore it should be removed from the bill at this time, if at the same time section 4 subsection (h) is amended along the lines that have been described by a number of speakers.

I don’t believe it is necessary for us to have a division on the bill on all three of those sections, although if anybody feels we should, we can go along with that. There are these three sections which deal with the farming community and I would hope the minister would take the advice which has come to him, I hope rationally and reasonably, from all sides and bring about an amendment which means that all sides can support that concept, and that is, the removal of the bona fide farmer from the provisions of the bill whatever the disposition of his land.

If he falls in a period less than the 10-year limit we are proposing, or whatever the minister might consider then his 10 per cent a year might apply after a period of perhaps three years, if his bona fides are established, by the provision of the bill.

Mr. Chairman, I ask the minister to consider this. He has said he will and I believe he will; we await on his intelligence in this regard.

Hon. Mr. Meen: I find the observations by the members for York North and for Brant (Mr. R. F. Nixon) and others who have spoken on this thing very interesting.

I am not sure, Mr. Chairman, that an amendment to 4(h) would be the way to accomplish that. I am quite sincere, and I am sure the hon. members realize this, when I say if we can improve this bill in any way I am only too happy to do it.

We still haven’t got to subclause (e), which is the definition of farming. I am first to say that I think it leaves something to be desired in its rather limited form. It is the form exactly as it appears now in the Succession Duty Act. We have a variety of definitions of farming and farm operations in our various statutes. This is a fairly straightforward definition. If, as the member for Huron-Bruce said, you could drive a speculator’s truck through it, perhaps there is some merit in doing something about that definition now.

We are awaiting the result of the study of the final report of the farm classification committee. In that report I understand they have a far more elaborate definition of what constitutes farming and farm operations. If that will overcome the problem expressed by my colleague from York North --

Mr. Lawlor: Why don’t you mention I just finished showing it to you?

Hon. Mr. Meen: -- of the Bay St. farmer who is interested more in speculating than in anything else, that might be the way to do it.

On the other hand, the suggestion made by the member for Brant I think is a good one and he is following up on what my colleague from York North has said about this. The principle we adopted in the proposed amendment, which the members have in their reprinted copies for use in the committee, concerning investment properties might be something which could be adopted to this on a scaled basis of 15 years or something.

My concern is that if we do that it is really amazing just what the implications are for a dozen, possibly more, little subsections here and there. I would want my law officers to satisfy themselves that in adopting some position of that sort we didn’t emasculate some of these other provisions. I don’t want to hurt the farmers in the scheme provided under subclause (v), I would like to see that as the minimum which they would get and I sense that is the feeling of all members of this House.

What I would suggest is that we could approve subclause (v); but when we get to the definition of farming, or as my people have advised me -- and this shows you how complicated this can be -- it might be more appropriate to include it as a part of the new section 20. Members will get to it in due course. That is the one dealing with rental accommodation and the credits.

If we do that and I advise the committee that we have created a form of redundancy in this subsection or some others, we can return and make the appropriate amendments to those subsections. Now on that understanding, since I let the hon. members have copies of mine, I would also ask them if they would then be good enough to let me have a copy of theirs so we can study them and determine to what extent they are directly appropriate; and perhaps they may need some shimming up by way of the skills that can be provided by my tax experts.

Mr. W. Hodgson: Mr. Chairman, on this particular section, I’d like to point out to the minister that in the way it is now written we are more or less playing into the speculators’ hands. You know, a speculator can buy a farm and keep it for seven years, and he can qualify as a farmer simply by buying $2,000 worth of cattle today and selling them tomorrow, thereby getting a gross income of $2,000 and immediately qualifying for 50 per cent of his taxes back. In seven years’ time he could double the price of his farm and not pay any speculation tax. So it is very important that we put in a figure for gross income from the farm.

Hon. Mr. Meen: What the hon. member is talking about, and I can see the point he is making -- but with respect, I think it is not under sub-subclause (v), it is really when we get over to subclause (e) and to defining farming --

Mr. W. Hodgson: Yes, I know, but --

Hon. Mr. Meen: But if I get any redundancies I want the committee to understand I want the right to come back to fix this.

Mr. Bullbrook: Yes, no more passion then. Do I understand correctly from the minister that we will stand down for further consideration, sub-subclause (v), the definition section (e), and section 4(h), pending your having the opportunity of taking the advice of your people in the context of the remarks --

Hon. Mr. Meen: Mr. Chairman, no, I am not suggesting that. I am saying that there might well be others which we don’t anticipate.

Mr. Singer: Well then, you are in trouble.

Hon. Mr. Meen: If I change the definition in section (e), if we find some way to strengthen section (e), if in fact it is weak, then that doesn’t necessarily alter sub-subclause (v), but it could be that we would find some other subsections. It is just incredible what alterations can show up once you fake some little change somewhere else. So I don’t want to limit it to subclause --

Mr. Bullbrook: Mr. Chairman, may I say to the minister I find it incredible, especially when I hearken back to his rising on a point of order and asking the Chairman if we were debating section (e) while we were talking about sub-subclause (v).

The very point of a taxing statute is that we can’t debate one section without having reference to another section. It is absolutely impossible. We recognize that the impact of a definition or the impact of an amendment on one section might be significant on another.

But the point I want to make, and the point the member for York North made so well on his second rising, is that if we vote in favour of your subsection, we are voting in favour of the principle that a bona fide farmer is a speculator. That’s why we can’t vote in favour of it.

I implore you to stand down sub-subclause (v), stand) down (e), stand down section 4(h), and we’ll go our merry way with other things that I don’t think are as important.

If you are going to ask us to support this particular section, I for one can’t do it. Notwithstanding an attempt to exempt farmers in certain circumstances, the very attempt to exempt the farmer begins with the premise that a farmer is a speculator -- and a bona fide farmer is not a speculator.

I implore you again: Please stand down these subsections. We’ll get our heads together; I think we are of one mind in what we intend to do. I suggest to you that otherwise, you are not inviting disaster, but surely you are inviting me, for one, to stand up on a matter of the principle of including farmers as speculators.

Mr. Singer: Is the minister not going to respond to that?

Well, let me just add a word or two to what my colleague from Sarnia has said. The minister brought in this Act and when he introduced it he announced that he would anticipate that the Act was going to have to go through many changes; and after second reading we had more changes than we had Acts. We are still at it, and we haven’t really got very far in two full days of debate.

What the minister has in mind, I am afraid -- and I apologize, Mr. Chairman, if I am imputing motives to him -- is to get through this bill and get something on to the statute books. Well along with my colleagues, we will not vote in favour of putting something on the statute books with the promise of a future amendment.

There is a serious farm problem; it involves three sections, and this is the first one. Unless the minister is prepared to accept the reasonable suggestion put forward by my colleague, that he withdraw these three for the moment and come back with another farm package to let us have a look at it this evening or tomorrow or whenever this bill is called for debate, then we are going to have to do the same thing with this section, with the definition section and with section 4(h).

It’s a very simple and logical suggestion. It’s a badly drafted bill. The minister for some reason brought in this bill which was inexpertly prepared. It hadn’t taken into consideration all of the ramifications it should have and to expect us to go along with a promise of a future amendment, I say is expecting far too much. We just can’t go along with that suggestion.

The alternative is a reasonable one. I urge the minister to accept that alternative.

Hon. Mr. Meen: On the contrary, Mr. Chairman, I suggest the alternative which I have proposed is a reasonable one. I don’t know how we can maintain any kind of order in the course of debating the various sections and subsections throughout this bill if we hop around all over the place.

Mr. Singer: It isn’t our fault you brought it in.

Hon. Mr. Meen: I would suggest, with respect, that we deal with subclause (v) and go on to (b), (c) and (d); and when we eventually get to (e) we will have had a chance to consider the question of the definition of farming which is, of course, one of the major matters; and/or when we get to section 20 to put in an appropriate clause there, if such is indeed appropriate.

Mr. Singer: We have no reason to expect that your appropriateness is appropriate.

Hon. Mr. Meen: I don’t think we can stand various subsections and sections and the like down for disposition at some later time. I think we’ve got to deal with them in some form of order or we’ll just never keep this thing properly organized.

Mr. Chairman: Shall this subclause stand?

Mr. D. C. MacDonald (York South): Mr. Chairman, I want to make a brief comment. Obviously we’ve reached another impasse and there are going to be bells ringing and we are going to waste 15 or 20 minutes --

Mr. Singer: Forty or an hour.

Mr. MacDonald: Or 40 minutes, until we can get the ministers in from the four corners of the province; but that’s par for the course in coping with an incredible bill.

The point I wanted to make as unprovocatively as possible is back to the minister’s plea that he is interested in amendments which will improve this bill. The comment I want to make refers to what we have been dealing with, the whole position of farmers, but it refers more broadly.

I was rather interested when the member for Eglinton (Mr. Reilly) intervened briefly on second reading and said the problem with this bill is that it casts its net so wide it catches a lot of people who are not speculators and who never intended to speculate. They are the people who are likely to be paying the tax. Whereas the exemptions, plus the pressure of those who are pushing for even further exemptions from this government, are going to create even more loopholes than were originally in the bill for the genuine speculator to get out of it, by one way or another.

Therefore, it is fundamentally a bad bill, and this farming section is only one illustration of many applications of the badness of the bill, if I may use that word. Namely, it is getting little people who are not speculators and it is not catching the big people who are speculators. That’s a farce.

Mr. Chairman: The hon. member for St. George.

Mrs. Campbell: Mr. Chairman, from the beginning when we discussed other sections of this bill it became quite apparent that what we really needed was to hear from the minister himself exactly what his definition of a speculator was. In the course of the debate today -- and I don’t speak for the farming community either; you’re in my riding now -- I have been really horrified at the fact the minister seems to imply that if a farmer makes a profit he becomes a speculator. This is one of the reasons why under no circumstances will I personally approve this section.

We have begged the minister, Mr. Chairman, to give consideration to the definition of a speculator. We have had several people say -- and mean -- that the fault with this bill, including this section, is that it catches the innocent person and does not catch the person who is guilty of making unconscionable profits in land transactions, which is what the bill is supposed to be doing.

I don’t know what we have to do to make it clear that this is a piece of tax legislation which, by law, must be clear and unambiguous. If anything were ambiguous this section is. Surely the minister can’t expect us to go ahead and deal with this particular subsection on some good faith that maybe later on it will be corrected. We have had enough of that. I, for one, don’t intend to vote in favour of the inclusion of this subsection.

Thank you, Mr. Chairman.

Mr. Chairman: The member for Huron.

Mr. J. Riddell (Huron): Thank you, Mr. Chairman.

Mr. Chairman: Order please. Does the hon. minister wish to reply?

Hon. Mr. Meen: Just one observation. I have had a chance to look at the implication in subsection (v) of A. If we do change (e) on 5 -- and I guess there is some merit in recognizing that if it is changed then we could wind up with an alteration in (v); because of course (v) sets a pattern for the whole principle of credits --

Mr. Chairman: It would be easier to come back to this.

Hon. Mr. Meen: The thought I am trying to express is that if we do get into a significant change in (e), then there might be some good reason for not having passed (v). Now, I would limit my concurrence on this to those two, at least until we get along to (e). But I think there might be some wisdom in what the hon. members have been saying in standing (v) down, Mr. Chairman, if you can live with having one or two sections maybe outstanding at a time.

Mr. Chairman: I can see no problem on that. I have it noted here. We will go on to (b) at the bottom of page 3 and the hon. minister has an amendment to the latter part of that subclause which appears at the top of page 4.

Hon. Mr. Meen moves that clause (b) of subsection (1) of section 1 of the bill be amended by adding at the end thereof: “or an interest held inland solely as security for some indebtedness secured by the land.”

Mr. Chairman: That is the part that is underlined at the top of page 4.

Mr. Breithaupt: Mr. Chairman, could I ask a further question of the minister? I notice that in the earlier part of the definition, the fifth line refers to land registered “in any land registry office in Ontario.” By that does it include, automatically, by the interpretation section, a land titles office -- or should that be considered as well? I don’t have the statute in front of me, but I just thought I’d raise the point because I happened to notice it.

Hon. Mr. Meen: Yes. My belief is that that would be broad enough to cover any system of registry; be it the land title system, the Torens system -- or be it our registry office in a capital “R” capital “O” sense. It is intended that it would be that broad.

Mr. Chairman: Shall this motion carry? The member for Lakeshore.

Mr. Lawlor: Mr. Chairman, I have two matters which I wish to raise with the minister. First, I want a little further justification, to say the least, for the exemption of the Canadian resource property, so-called. Why, if this is a tax primarily directed towards speculative profits in land or arising out of land of any kind, not to supply housing or anything else -- its primary purpose is that it can be done with a diversity of other modes -- if this is the purpose of the tax, and I look at the clauses to which reference is made in the bill of the Income Tax Act of Canada. In “C” on page 164 of that statute, Canadian resource property of a taxpayer means “any property acquired by him after 1971 that is” -- and I’ll leave out -- “drilling rights, exploring rights, royalty rights” -- all this sort of thing -- “any oil or gas well situated in Canada.” And clause 5 reads, “any real property situated in Canada, the principal value of which depends upon its mineral resource content.”

Why is it in every contingency the oil people and the mining people are segmented out and special graces conferred upon them by our legislation? Are they some kind of privileged suzerainty in this province that they don’t bear what the farmer bears, what a principal householder bears who happens to have a roomer? They buy and sell properties among themselves and in consortium all the time -- that is land with mineral resources on it.

Shouldn’t we share in that and isn’t that a speculative profit in that particular industry? Isn’t it as speculative as anything the minister can possibly think of? It is probably more grotesque in some of its forms and gross in its manifestations than the rather minatory taxable situations of transference which this government proposes to tax. I find it somewhat unpalatable. Is there a policy decision? Is there some kind of reason behind all this?

Hon. Mr. Meen: It is sort of elementary in a way. I’m not sure it is the complete answer, but of course, Mr. Chairman, what we were seeking to do was to get some kind of control on the spiralling cost of land, both in the farming community and in the housing end of things. I am advised by the Treasurer that his ministry had no evidence there was any particular speculation occurring to the detriment of the people of Ontario --

Mr. Lawlor: You just had to look.

Hon. Mr. Meen: I’m speaking for myself, Mr. Chairman. There was no evidence of speculation in Canadian resource property. This was the reason for the single exception at the end of that section.

Mr. Chairman: Shall this motion carry?

Mr. Lawlor: Mr. Chairman, as to the second part of the section, I take it that that’s super-added and designed to protect mortgage corporations in particular and people holding equitable interest basically on property of all kinds. Is this what’s behind it?

Hon. Mr. Meen: More than that, actually, Mr. Chairman, but that’s essentially the case. This is the section that would permit mortgages to be sold and dealt with in the marketplace without their being included under designated land.

The definition of designated land is so broad as to cover a mortgage interest -- an equitable interest or a first mortgage on a piece of real estate in the registry office or the actual fee in the title -- and so this exempts that kind of interest as being designated land within the meaning of the Act.

Mr. Lawlor: Does it also mean that when the indebtedness is acted upon, and let’s say the land is seized by reason of the indebtedness, that the wide definition of the exemption here, not being within designated land, continues to apply?

Hon. Mr. Meen: Yes, it could, Mr. Chairman. It was our view that the case of its being applied, for more money to the benefit of the mortgagor by way of foreclosure, that with the provisions under the Act for a power of sale, for the order of redemption and so on, he would have that opportunity to protect himself. Therefore the chance of this being worked to the detriment of the Act, as a way around it would be from a practical standpoint illusory.

Mr. Lawlor: But what I haven’t worked out, Mr. Minister -- if you can help me -- is this term indebtedness. Let’s leave aside the mortgage picture. The minister has various forms of indebtedness, vis-à-vis indebtedness by a corporation to particular individuals.

By any stretch of the imagination could that form of indebtedness be utilized as a way to avoid the consequences of your Act? Corporations say they were indebted to us. This corporation becomes indebted to us for $100,000 and we propose to take over the corporation precisely in order to resolve this indebtedness. It, in effect, nevertheless involves land. Does the minister think he has sufficiently, and in depth, covered that situation elsewhere in your bill? Or is this a possible loophole?

Hon. Mr. Meen: I don’t think it is but I don’t think I can put my finger on it right off the bat.

That would be a case, I presume, that the member -- just correct me if I’m wrong -- where he would anticipate the shares of a corporation being indebted, to say another party --

Mr. Lawlor: Right.

Hon. Mr. Meen: -- being used --

Mr. Lawlor: Right.

Hon. Mr. Meen: -- to acquire the title at some value in excess of its amount -- I’m not really quite sure how that would work. I am not sure its a loophole; or if it is even a practical course of action to follow.

Mr. Lawlor: Well, I would imagine that in certain corporations here it would be highly beneficial for them to escape your 50 or 70 per cent tax.

Hon. Mr. Meen: That would be on a sale. Needless to say the major point of this amendment is, as the member for Lakeshore has indicated, to avoid the creation of any cloud on mortgage titles.

Mr. Lawlor: No, I take issue with the minister, Mr. Chairman, it is not on a sale. It is a question of a contract or an agreement of some kind, drawn in such terms that it a certain sum of money were lent to the corporation on certain contingencies and if not repaid by a certain date, the shares of that corporation, or the majority of the shares, become vested in the creditor and he then assumes the ownership of the land.

Mr. Chairman: Shall this section, as amended, carry?

Mr. Lawlor: I am waiting a reply from the minister.

Hon. Mr. Meen: If we get just a little bit farther down in the next subsection --

Mr. Lawlor: Four?

Hon. Mr. Meen: No, we were dealing with (b), so if we move down to (d) where we get to disposition, I think you would be caught under the hypothetical case advanced by the member for Lakeshore. Because, you see, that would then talk about a beneficial interest and that is what you have created by the kind of arrangement the hon. member for Lakeshore has postulated, in which a loan is made, and as collateral security for that loan the borrower puts up an interest in land. Then, eventually, that is taken over, as a possible way to avoid the payment of tax by the borrower, in a colourable transaction to sell the property and avoid the tax. But in (d) sub- section (1) immediately along here we have: “A sale or transfer however effected of any part of the beneficial interest in designated land”. So that would cover the situation the hon. member has advanced.

Mr. Lawlor: It is possible.

Mr. Chairman: Subclause (b) of subsection (1) as amended as agreed to. We will move on to (c)(d); and there is an amendment on (i) of ((d).

Hon. Mr. Meen moves that subclause ii of clause (d) of subsection (1) of section 1 of the bill, be deleted and the following substituted therefor:

“The sale, transfer or assignment of an option providing for the acquisition of designated land, or the transfer of designated land, made to comply with the terms of any such option that has been exercised.”

Mr. Chairman: Is the amending motion agreed to.

Agreed to.

Mr. Chairman: Anyone want to speak before we move into subclause (v) here? There is an amendment on subclause (v), Mr. Minister?

Hon. Mr. Meen: All right up to that point, Mr. Chairman?

Hon. Mr. Meen moves that subclause (v) of clause (d) of subsection (1) of section 1, of the bill be deleted and replaced by the following:

“Any change in the composition of the membership of, or the persons beneficially interested in, any organization, syndicate, association of persons, partnerships, joint venture, or corporation without share capital, 50 per cent or more of the assets of which consist of designated land, if the effect of such change is that control over the use of the designated land or the proceeds of its disposition, or of a subsequent disposition, is exercisable in fact by a different person, or group of persons.”

Mr. Chairman: The hon. member for Lake- shore,

Mr. Lawlor: Is the previous clause an alteration by way of omission of a phrase in the thing -- “not being a change in the beneficiaries under a trust”? I take it now that if there is a change in the beneficiaries of a trust, that it’s called a disposition.

Hon. Mr. Meen: Further along, Mr. Chairman, in subclause (p), I think it is --

Mr. Lawlor: Transferor.

Hon. Mr. Meen: Yes, it is a completely new section in which we have expanded upon various natures of transactions, including trust properties and beneficial interests in them. So the reference here, as I understand it from my draftsman, was to remove what became a redundancy with the new subclause (p).

Mr. Bullbrook: Perhaps I am away off base on this, but supposing Imperial Oil and Shell Oil decided to get into an obviously speculative joint, venture, are they exempted from the statute because of the wording, “50 per cent or more of the assets which consist of designated land”?

Hon. Mr. Meen: I guess one would have to look at the assets of those two corporations, which consist of a great deal more, of course, that just resource properties if that is what the hon. member has in mind.

Mr. Bullbrook: At first reading, I was led to a response that said it would depend upon their holdings in the designated land, but of course it depends upon the holdings of the corporation itself. I am just wondering why we find it necessary to exempt corporations that decide to use the umbrella of their significant outside holdings to become what truly can be construed as speculative.

Hon. Mr. Meen: I think this definition is taken from other statutes of like nature. Otherwise, Mr. Chairman, I don’t have a complete answer for the member, to my satisfaction anyway, as to just how one would determine the 50 per cent or more of the assets in this case.

This section, as I say, has been taken from similar statutes. Perhaps my advisers can tell me if we anticipate any difficulty in administering this section. My only concern, in reference to trusts, had been to overcome the redundancy there, but I think I note a certain measure of validity in the hon. member’s question.

Mr. Bullbrook: I don’t want to try to attempt to make it difficult for the minister, but it would seem to me also that if we are going to restrict speculation by others, then it is an open invitation to large corporations that are in a position of diversification or otherwise to undertake to fill the vacuum of speculation by the exemption available here.

The answer that it is in other statutes, I think you would recognize, is not good enough. I am not interested either in the administration of this. I am really interested in the raison d’être or why we seem to want to invite corporations to get into the speculative field.

Hon. Mr. Meen: I don’t think we are. What we say is that a disposition occurs if any beneficial interest has occurred. I don’t think we are inviting them to get in. What we are trying to do is to determine when a change has occurred, and we are saying disposition is deemed to have occurred if there is a “change in the composition of, the membership of, or the persons beneficially interested in any organization ... ” and we go on to define the way in which the organization is structured. But we are not inviting speculation. We are saying, “Okay, a disposition has occurred if this should have happened.”

Mr. Bullbrook: Well, by way of consideration, let’s say that Imperial Oil decides to pick up Erin Mills and sit on their land from a speculative point of view; they are completely exempted -- and I don’t understand the reason for it. As a matter of fact, I used the word “invitation,” and it seems to me to be nothing more than that, Mr. Chairman. It is in effect an invitation for speculative corporations to involve themselves by merger, amalgamation or otherwise with large corporations so that they can exempt themselves under this section.

I ask you to help me. Just give me the reason why you have put that 50 per cent in. I just want to know why we put in that exemption. There obviously is a reason or it wouldn’t be there.

Hon. Mr. Meen: Well, it refers to the ownership of land, Mr. Chairman. If their assets consists of 50 per cent or more of land, and there is a change in the composition or the membership or the persons beneficially interested, then it is deemed to be a disposition of the land concerned. We wouldn’t want to do it if there was a change in some membership; just a very small percentage and I think it’s not unreasonable to select 50 per cent.

Mr. Bullbrook: For clarity, may I suggest the following: You have a corporation whose assets are 100 per cent designated land and they find themselves under this statute. You have a corporation that decides to acquire land for speculative purposes but, because of the size of the corporation, it’s almost impossible to visualize the acquisition of a sufficient amount of designated land to bring themselves outside the exemption.

By way of Imperial Oil -- I am not suggesting Imperial Oil is going to do it; let’s choose Denison Mines by way of example. If they decide to bring themselves under the umbrella of this exemption, why don’t we treat the corporation with 51 per cent of its holdings being designated land in the same fashion as we do a corporation with 49 per cent of its assets being designated land? First, why the exemption? Second, what’s the magic formula of 50 per cent?

Hon. Mr. Meen: Two before one. I guess. The 50 per cent happens to be used in other Acts, as in the Canada Corporations Act. I don’t think it’s an unreasonable figure to look at.

Mr. Bullbrook: The purpose of that Act isn’t the same as the purpose of this Act. That is a tax with respect to profit, based upon a decision by the government to tax those profits at a certain rate. Now, this is a different thing. You are now setting up a principle of what constitutes a speculator. You are establishing a principle as to who a speculator is. You are saying that a corporation is exempted, no matter what it does and no matter what its intention or motivation, if 50 per cent of its assets, or less than 50 per cent of its assets, so constituted, is designated land. I don’t think you can analogize between the corporation tax or perhaps the Income Tax Act in this particular statute. There is a collateral principle that you are involved with too. You and your colleague, the Minister of Housing (Mr. Handleman), and your colleague, the hon. Treasurer, have said that not only is there an economic impact to this statute, there is a social impact to it too. That is that you are going to help drive the speculators out of the market thereby stabilizing the value of real property for the benefit of the people of Ontario. Now, I can’t for the life of me accept the answer that is used in other statutes; it might well be used in other statutes, but you know it’s used in another context.

Mr. Singer: Right.

Mr. Bullbrook: Maybe I am obtuse, but if you could help me understand why you distinguish between a corporation having 51 per cent of its assets in designated land, and -- I am using this for exaggeration -- and all of a sudden there comes a corporation with 49 per cent of its assets in designated lands, why the exemption for one and not the other? Why any exemption to begin with? If a corporation holds designated land, why shouldn’t it be dealt with in the same fashion as any individual holding designated land?

Hon. Mr. Meen: I am still not sure that I follow the argument advanced by the member for Sarnia.

Mr. P. G. Givens (York-Forest Hill): You are legitimizing the speculative --

Hon. Mr. Meen: I think he has got to recognize that this subclause 5 deals with organizations and non-share capital corporations, clubs and the like. I wonder if he noted that, so that his hypothesis regarding Shell and Imperial, of course, would be inappropriate. We are really just talking about a change --

Mr. Bullbrook: Oh, I am sorry, maybe that is the answer. Your hypothesis was regarding the Ontario corporation tax.

Hon. Mr. Meen: Yes, I said that the general 50 per cent --

Mr. Bullbrook: And you used an analogy just for the 80.

Hon. Mr. Meen: -- factor had come and I was looking for my subsections 6 and 7 dealing with transfer of beneficial interest in shares and amalgamations under subsection 7, of course. But, here, under 5, we are simply talking about clubs and organizations, and some of them, if they have a significant level of landholding.

Mr. Singer: So do the partnerships.

Hon. Mr. Meen: I think it’s appropriate to talk in terms of a 50 per cent-

Mr. Bullbrook: All right. I began with the very example that I intended to convey to you. I began with the coming together of Shell and Imperial Oil. I began with that partnership; and you’re inviting that here. You’ll never find such a partnership that will have 50 per cent of its assets in designated land. Again, it invites a multitude of opportunities for corporations to find themselves in a different situation from the individual who is subject to the tax.

Mr. Singer: Mr. Chairman, or even without corporations, you’re inviting A and B to join together in a partnership and then allowing C and D to take over that partnership, and they will be exempt as long as 50 per cent of the assets of the original partnership do not consist of designated land.

Let’s presume A and B are apartment house owners -- no, owners of commercial buildings -- and commercial buildings are exempt, so they’re not designated -- and along the way they get designated land, but they’re very careful to keep it down to 49 per cent of the assets of the partnership. You’re inviting them to use this exemption.

Hon. Mr. Meen: No, with respect, Mr. Chairman, if they were apartment owners they would be owning designated land. Apartment land is designated land in the ministry’s --

Mr. Singer: I said “commercial.” I shifted from apartment to commercial. Let’s get into commercial or industrial property. You’re inviting them to do this, because you don’t designate industrial property.

Hon. Mr. Meen: It’s still designated land within the meaning of the Act.

Mr. Singer: All right, then they go and buy Royal Trust short-term loans at -- what’s the rate this afternoon? -- 10.5 per cent and they make sure that that’s worth more than 50 per cent of their partnership. It’s inviting somebody to do this.

A and B, two very wealthy people, suddenly look at subclause (v) of the definition disposition and say: “All right. We can produce $5 million in cash. We’ll form a partnership, and our partnership is going to invest in Royal Trust short-term loans at 10.5 per cent,” which is not bad. “Having done that we’ll buy $4 million worth of designated land and speculate on that and we’re exempt. In the meantime we’re earning 10.5 per cent on the $5 million of Royal Trust short-term loans that we’ve bought. But, not only do we do that, but we’re exempt from the speculation section.”

Now there’s a perfect example. Find a hole in that one.

Hon. Mr. Meen: We’re talking about the definition of a disposition. All we’re saying here is that there’s deemed to be a disposition if there’s change in the control over the use of the designated land or the proceeds of its disposition. That’s all we’re saying here.

Mr. Singer: That’s right. That’s exactly right. You are inviting that kind of disposition.

Hon. Mr. Meen: Remember that when they eventually sell, under your scheme, then they are subject to the speculation tax.

Mr. Singer: Sure. And they do this because they’re going to sell to C and D. They’ve escaped the incidence for your tax. C and D will pay for the $5 million that they put into short-term loans.

Mr. Bullbrook: Surely the minister must recognize what my colleague is saying. Certainly you’re defining disposition, but you’re exempting from the definition of disposition those partnerships, those joint ventures, those syndicates and those other amalgams that are defined there, which find themselves with total assets, less than 50 per cent of which is designated land.

I brought up Imperial Oil. You must recognize that large corporations of this nature do acquire significant land. In my area, vast acreages are owned by and sat on by Imperial Oil, and sold at significant profits by Imperial Oil. But they’ll never be 50 per cent of their assets. They’ll never be 0.005 per cent of their assets, believe me. I just can’t, for the life of me, understand the purpose of this.

May I put it to the minister, if I can, as clearly as it is possible for me to do? The point is this: I feel that you’re attempting to tax land speculation; that’s a high purpose, with which we agree. Why do you say, however, that if the speculator happens to be someone who is wealthy enough to amass sufficient assets, together with less than 50 per cent of designated land, he is exempt? I don’t see any purpose in that exemption unless it is an invitation, as I said before, to people who are wealthy to divest themselves of their taxable responsibility under this subsection.

Mr. Singer: Set up a scheme to do that.

Mr. Bullbrook: Because you know what is going to happen. This isn’t a problem; this is why the lawyers stand up. They don’t want to listen to themselves talk all day -- it’s a loophole so wide. We all have clients of success who can envelope themselves in this type of exemption.

Hon. Mr. Meen: Really, what we are trying to say here is that if it is over 50 per cent then we deem a disposition to have occurred at the time when the control over the use of the land occurred. If it is less than 50 per cent, you don’t have the disposition being deemed to have occurred at that time. It would be deemed to have occurred at a later time when, under the partnership agreement or whatever else should be the case, they make an eventual disposition. This is simply a deemed disposition at a time when a change in the control over the use of the designated land occurs under sub (v).

Mr. Chairman: Shall this motion carry?

Mr. Singer: No.

Mr. Chairman: Those in favour of this amendment carrying, please say “aye.”

Those opposed will please say “nay.”

In my opinion the “ayes” have it. I declare the motion carried.

Subsection (v), as amended, agreed to.

Mr. Chairman: Is there anything on the upper part of page 5, on either (v) or (vii)?

Mr. Singer: Yes, (vi) and ( vii ), Mr. Chairman, are exactly the same thing. I don’t know --

Mr. Chairman: I am sorry, there is an amendment to (vi). Perhaps the minister would care to place it.

Mr. Singer: On allotment and issue, is that the one?

Mr. Chairman: The part that is underlined. The hon. minister.

Hon. Mr. Meen: Yes; excuse me; sub (vi).

Hon. Mr. Meen moves that subclause (vi) of clause (d) of subsection 1 of section 1 of the bill be amended by deleting “issue and allotment” in the second and third lines and inserting in lieu thereof “allotment and issue.”

Mr. Singer: Mr. Chairman, it is the same objection as my colleague from Sarnia and I latterly had to sub (v). If 50 per cent of the assets of the corporation -- and now we are talking about a corporation with share capital -- do not consist of designated land the control of the corporation can be transferred and it’s not deemed to be a disposition. The vendor and the purchaser get together and they arrange for the transfer of the control of the company between them. As long as they haven’t exceeded the magic 50 per cent formula that land has changed between two parties, there is a speculative gain probably, otherwise the exercise wouldn’t be worthwhile, and they have escaped the incidence of the tax. Why?

Hon. Mr. Meen: Simply because we are not interested in fixing the tax at that time. We would catch them on that tax when eventually the property is sold. This deems the disposition --

Mr. Singer: It is sold.

Hon. Mr. Meen: No, it’s the sale or transfer in any manner of the beneficial interest in or the allotment and issue of, shares to which are attached 50 per cent or more of the voting rights ordinarily exercisable at meetings of shareholders. In other words it’s deemed to have occurred when you have made a transfer or allotment of shares to accomplish this.

Mr. Singer: Provided there is 50 per cent.

Hon. Mr. Meen: This is the corporate analogy in (vi) to the partnership or non-share capital corporation provisions in subclause (v) where we simply deem it to have occurred. A disposition is deemed to have occurred if that happens; if those factors, those criteria are not in that, no disposition is deemed to have occurred under this section at that time. It would simply occur at some later time when indeed they sold oft the shares, sold off the land, or made a disposition of the shares that did come within the section.

Mr. Singer: But surely the minister, of all people, should understand that you can transfer property in a number of ways besides transferring a parcel from owner A to owner B, or from vendor A to purchaser B.

If a limited company owns 40 per cent of its assets in designated land and the control of that company passes from group A to group B, the ownership of that land goes to the second group. You have had a transfer. And you are avoiding it. There may never be another one. Even if there is another one later on, why should it not take place in the same way? Why can’t the incidence of this tax be defeated all the way down the line by this gimmick?

Hon. Mr. Meen: I think the hon. member would recognize that in the sale under those circumstances the purchaser of the shares is going to have to look at the price he pays for those shares and determine what kind of speculation tax he is going to wind up paying at some date in the future when he develops the land.

Mr. Singer: Suppose he wants it for his own purpose?

Hon. Mr. Meen: If 50 per cent or more of the assets consist of the designated land, then he has acquired it and paid whatever price is appropriate.

Mr. Singer: And he is home free when nobody else is home free.

Mr. Lawlor: Let me take a crack at this, too, Mr. Chairman, if I may. It is the same thing. Suppose that a corporation wishes really to sell land, and has 50 per cent of its assets in terms of land, is it possible for the corporation to go out and borrow -- say the land will be sold for $1 million -- would it be possible for the corporation to go out and borrow $2 million on the market somewhere, say $1,100,000 to make it a little over the 50 per cent, and then escape the impact of the tax?

Aren’t you opening the way to all kinds of financial manipulations with respect to what is to be designated an asset or not an asset? And won’t they build their non-real property assets in anticipation of sale one way or another in order to meet that 50 per cent figure?

In other words, why do corporations get this special benefit being visited upon their heads when the rest of the citizenry -- the designation of designated land is the broadest thing imaginable under the statute, except that you hew out these various hollows, which are about the same size as the mountain they replace.

In this particular instance it appears to be a particular invitation and an egregious move on your part to giving corporations not only ab initio and overall the benefits that others don’t enjoy, but an in-built device for manipulation.

Hon. Mr. Meen: I think it is possible to envisage cases like this in which there may be some attempt by people to circumvent the Act -- or to drive through it -- or however the members might want to express it, but in a case such as the member outlines -- and the member for Downsview has also I think suggested -- obviously the matter is tolerable. Under section 6, to which we will have cause to refer in due course, any such transaction as that can be deemed to attract the tax, and I don’t want to jump around but let me read:

“Where the result of one or more sales, exchanges, declarations of trust, or other transactions of any kind whatever, is that a transferor has disposed of property under circumstances such that he may reasonably be considered to have artificially or unduly reduced the amount of taxable value of designated land that he has disposed of, the taxable value shall be computed as if the reduction had not occurred.”

Mr. Lawlor: The hon. member knows that this is not the way these statutes are considered in the courts. That’s unbelievable.

Hon. Mr. Meen: And if that kind of matter came to our attention, that’s the sort of thing I would think would apply.

Mr. Singer: If he is excepted in one section the minister is not going to catch him in another section. No way. That is about as ludicrous a tax definition as I have ever heard.

Mr. Lawlor: You always construe it in favour of the taxpayer. It has to be crystalline, precise, set down. You couldn’t invoke --

Mr. Singer: The taxpayer comes in and says, “Look at the section, I am exempted.”

Mr. Lawlor: All the tax law you and I were ever taught at Osgoode Hall would teach that elementary principle.

Mr. MacDonald: Were you both at Osgoode?

Mr. Lawlor: Yes, I am afraid so.

Mr. MacDonald: Oh, heavens.

Mr. Chairman: Shall this motion carry?

Some hon. members: No.

Mr. Chairman: Those in favour of the motion as proposed carrying will please say “aye.”

Those opposed will please say “nay.”

In my opinion the “ayes” have it.

Shall we stack this one?

Mr. Singer: No.

Interjections by hon. members.

Mr. Chairman: Order, please. On Bill 25, Mr. Meen had moved that subclause (vi) of clause (d) of subsection 1 of section 1 of the bill be amended by striking out the words “issue and allotment” in the second and third lines and inserting in lieu thereof “allotment and issue.”

The committee divided on whether subclause (vi), with its proposed amendments, should stand as part of the bill, which was approved on the following vote:

Clerk of the House: Mr. Chairman, the “ayes” are 50, the “nays” 34.

Subsection (vi), as amended, agreed to.

Mr. Singer: That’s right. Write in the exemptions. All your corporate friends are looked after now.

Interjections by hon. members.

Mr. Chairman: Order, please. Shall subsection (vii) stand as part of the bill?

Mr. Singer: No.

Mr. Chairman: The hon. member for Downsview.

Mr. Singer: Mr. Chairman, without repeating ad nauseam the same remarks, subclause (vii) is a continuation of subclause (v) and subclause (vi) in that it allows and invites an obvious exemption. As a matter of fact, I am rather pleased to have the opportunity to speak on this once again, because for the Minister of Revenue --

Mr. Breithaupt: Hurry, before they all get out.

Mr. Singer: -- to stand in his place and read to us a general section where he can descend on people who obviously try to avoid taxes, and to suggest that any taxpayer who wants to rely on the statute as written is going to be pounced on, shows his naiveté. Perhaps naiveté isn’t the best word; he shows stupidity perhaps and certainly ignorance when he puts forward the idea that a taxpayer who says he can do such and such under a certain section of a certain statute is later going to be grabbed by the enforcement people and told that he is duly entering into a scheme to deliberately avoid taxation.

What the government is doing is creating and inviting an obvious avoidance of the tax, provided that you have the kind of corporate and accountancy advice that only rich people can afford, and sufficient assets to be able to do it.

These three sections -- we divided the House on the second one, we made the initial objection on the first one, and the third one is exactly the same -- these three sections positively invite a scheme to avoid the incidence of this tax in favour of wealthy people, wealthy corporations, wealthy partnerships, wealthy organizations which have the facilities to run circles around the provisions of the Act. I hope it isn’t too late once again to urge on the minister that these three subsections be withdrawn.

No excuse he has been able to give to the House makes any sense whatsoever as to why these sections are in. He says he stole the language from other taxation statutes. The other taxation statutes have nothing to do with the purpose or the principle of this statute. Why are they there?

What possible logical excuse has he got for including these three subsections other than he has been importuned by corporate friends and wealthy friends of this government to include an obvious exemption of which they can take advantage? There is no other reason which is apparent. There is no other reason that appears. Someone descending below the magic level of 50 per cent is suddenly exempt. If they are at 49 1/2 per cent or 49 per cent suddenly they can escape. But we are against it; as his colleague sitting right next to him, the Solicitor General (Mr. Kerr), used to say, “the polluters will pay.” He’s trying to tell us the speculators will pay.

Mr. A. J. Roy (Ottawa East): How much will they pay?

Mr. Singer: The poor speculators might pay but the rich speculators who can have the advantage of good corporate advice, good legal advice and good accountancy advice are invited to enter into a scheme to avoid the incidence of this tax.

This section, Mr. Chairman, which is at present before us makes no sense at all. Those three sections should in good conscience be removed and I’m certain that if the minister is intelligent enough to realize what he’s been conned into -- the longer this bill goes on, the more convinced I am the minister is naive. He doesn’t understand what he has to cope with.

Mr. Roy: You are being mild; he isn’t naive, he is stupid.

Mr. Singer: He’s got the intelligence to understand this and if the minister would think of what is involved in these three subsections he would withdraw them. There is no excuse for them. There is no rationalization for them and if he says they are going to be picked up later he misses the whole point of the principle of this statute. This section should not pass, Mr. Chairman.

Mr. Chairman: The member for Lakeshore.

Mr. Lawlor: Mr. Chairman, I wouldn’t agree with the basic proposition that is put forward at this stage. The figure of 50 per cent is obviously an illusory figure, an arbitrary figure, taken right out of the air. The very least the minister should have in this context is 25 per cent or 15 per cent if ownership of land is on that basis. Of course, we wouldn’t agree with that either. We would say corporations are in no better position than the individual out there who hap- pens to rent a room and has to bear the weight of the tax in this particular regard.

The fallacy in the whole legislation, particularly riding on this particular section, is what was mentioned by the member for St. George, Mr. Chairman, a number of times and by others in this House. That is, unless and until you zero in and get your focus on what a speculator is, and whether and when and how and in what context corporations are speculating in land -- and you know what you mean by speculation -- you are going to run up against this kind of an imbroglio, these very badly phrased and written clauses.

That’s where your fault lies. That’s where the nub of the matter turns with respect to section after section, particularly as we get into later sections of this bill affecting homes and what not. To simply take your blanket removal of commercial and industrial, and work off that particular base -- where the speculative profits are rampant and rife in this province -- is not to face this thing frontally or take it in its whole categorical import.

Your legislation, in clause after clause -- and in the merger clauses in particular which we are at present discussing -- is deficient by any reckoning. I think you are only beginning to glean for yourself the depths of the swamp in which you are engulfed and you are being sucked down, hour after hour in this House, by the quicksands of your own legislation. I hope -- and I say this in terms of friendliness -- that you don’t totally disappear before it’s over.

Mr. Chairman: The hon. minister.

Hon. Mr. Meen: I’m surprised the hon. member for Downsview would want me to withdraw these three subsections. I think if they are deficient -- and I’m not prepared at this moment to indicate that I think they are -- the argument advanced by the member for Lakeshore has more validity: that if there is a deficiency it’s in the matter of the per cent. I’m not sure of that. I would like to work with this section just as with the other two and see what happens; see how we wind up designating assets of the corporation, see if we get into any difficulties in determining whether there is a circumvention of the Act, and whether or not section (vi) can be properly applied.

In my opinion the section would be applicable. This is far better than lifting the three subsections as the member for Downsview would suggest, which would just open the whole thing wide. At least here we pick up three different categories of situations in which there would be a deemed disposition and which would, under those circumstances, attract the tax. That’s an awful lot better than not having those subsections in at all.

Mr. Singer: All right. If the minister throws down the challenge, let me suggest how we can amend these rather than --

Mr. Chairman: We’ve carried two of them.

Mr. Singer: All right. He’s talking about the three of them and I’m only picking up the minister’s suggestion. If he changed the wording in these three subsections from “disposition includes” to the wording “disposition shall not include,” then he would have caught that. I don’t know the extent of the suggestion that section (vi) will catch someone who can legitimately and honestly and legally take advantage of another section, then the minister is dreaming. I don’t know when he went to law school.

Hon. Mr. Meen: I wasn’t suggesting that.

Mr. Singer: All right, let me finish. I don’t know what kind of knowledge he has of taxation statutes. But the game of avoiding taxes has been a game that has been played as long as there have been taxation statutes. And if the minister can find any comfort in section (vi) where some taxpayer, or supposed tax- payer, can point to another section of the statute and say, “I am fully within the four walls of that section,” and really believe that section (vi) is going to apply, then the minister must be smoking something other than cigarettes.

The minister’s assertion of this proposition is absolutely appalling. And if that is what he is being told by his advisers, then the minister has no business being there, and his advisers have no business being there.

Earlier, Mr. Chairman, we talked about the importance of having obtained outside advice. Did they write to Ottawa? Did they go to Ottawa? Did they phone Ottawa? Had they consulted any of the leading accountants in the Province of Ontario? Unfortunately I must accept the absence of any tax knowledge from the minister or from his advisers --

Hon. G. A. Kerr (Solicitor General): Have you got an amendment?

Mr. Singer: -- because if in seriousness he can put forward a proposition such as this and say that if someone brings himself within the four walls of one section of the statute we can prosecute him under another section for avoiding the provisions of the statute, then the minister doesn’t know what he is talking about. And I am surprised, with all the resources of the Province of Ontario, that you haven’t sought the advice of a competent tax lawyer who is not associated with government. This piece of paper is a dismal failure. You should have brought someone here who can competently advise you. The minister’s second assertion of this ridiculous statement makes one wonder about the intelligence of the minister.

Mr. Chairman: Shall subsection (vii) stand as part of the bill?

Mr. Singer: No.

Some hon. members: No.

Mr. Chairman: Those in favour of subsection (vii) standing as part of the bill will please say “aye.”

Those opposed will please say “nay.”

In my opinion, the “ayes” have it.

Mr. Singer: We can stack it. There is no point in sort of trying to fight your way out of a paper bag. They don’t understand and they won’t understand it.

Mrs. Campbell: But they will when the people jump.

Mr. Singer: Yes. And they say: “If it is abused, then maybe we will change it.” Baloney.

Mr. Chairman: All right. Then the vote is stacked for later.

I guess subsection (e) is next. The hon. member for Lakeshore.

Mr. Lawlor: This is the definition of farming and I am afraid this is going to take --

Mr. Singer: Wasn’t that withdrawn for later consideration?

Mr. Chairman: Was that for --

Mr. Lawlor: No, I thought this was the later consideration.

Mr. Breithaupt: I thought, Mr. Chairman, that we were going to give some consideration to dealing with that earlier item which was 1(a)(v), and this definition; and also the item raised in section 4, subsection (h). Are we to deal with them all or are we to consider that these matters are withheld for the time being until further consideration is given to them by the minister and his aides?

Hon. Mr. Meen: Well, Mr. Chairman. I had rather looked upon subsection (e) as being closely related in its reference to sub (v) of 1(1)(a). I still do. The section 4(h) is also related to it. This is part of the difficulty of dealing with this elaborate bill. There may be some merit in putting it over. There is also some merit in talking about the definition of “farmer” at this stage. I am really in your hands, Mr. Chairman, as to what you would like to go on.

Mr. Chairman: No problem, I can mark it as being stepped down for now.

Mr. Breithaupt: I was just wondering what the minister had in mind. If, for example, it was his intention to review these three items and have something more for us, perhaps at 8 o’clock this evening, then this might be a convenient place and time to call it 6 o’clock so that we could deal with these matters if the minister had a chance to review them. But if that is not the minister’s intention, I would presume that we would otherwise just go ahead.

Mr. Lawlor: Mr. Chairman, I would not agree to that. The remarks that I have to make range somewhat more broadly than the very issues that were at stake earlier today. I would like to draw the minister’s attention to several picayune points that I have, in fact, in my head. Therefore, I would suggest that we go forward with the debate; at least on the points that have been previously brought to attention. Secondly, Mr. Chairman, with all respect, I won’t be here tonight; so I had better do it now.

An hon. member: Go ahead.

Mr. Lawlor: On one of the points that have been mentioned, in this section the minister seems to be following the Income Tax Act definition 248(1) with two differences.

The word “livestock” -- it is a small point, but we are interested -- is spelled “live stock,” two words, in the minister’s Act; whereas it is not so in the other one. Is it meant to have a difference in that? Well, the way the minister is wording this legislation, we have to be extremely scrupulous about every aspect of the thing. I suppose a cow with a brindled horn by any other name is called a --

The second thing has to do with the words, “maintaining of horses for racing” in the federal definition; but are omitted from this Act. Why? What is going on there?

Hon. Mr. Meen: Mr. Chairman, I had understood that my subclause (e), I was lifting the interpretation from our Succession Duty Act. If I can just take a look and see if horses for racing was included in that one, then I could tell the hon. member. I don’t think it is. Our definition under the Succession Duty Act would appear to be the one which we adopted here, section 17(a), rather than under the Income Tax Act, or any of the other federal provisions.

Mr. Lawlor: I take it that the answer to the first question is that the minister doesn’t intend any distinction between “live stock” and “livestock.”

Hon. Mr. Meen: As a matter of fact, yes, it is intended to be one word I expect. Certainly in the Succession Duty Act, from which this was taken, it was one word.

Mr. Lawlor: I want to bring -- and I already have done so at the commencement of the House today -- to the minister’s attention, while he is out mulling the matter over and thinking about it, the definition on page 12 of the advisory committee report on farm classification. As I indicated to the minister earlier today -- and he is aware that this document exists and, as I understand it, the matter is being surveyed by, I suppose, the Ministry of Agriculture and Food -- the committee made a recommendation.

Recommendation 3 states that lands be classified into five classifications: agricultural, agricultural residential, rural residential, rural recreational and, finally, rural speculative. The agriculture classification, the one that the minister is seeking to exempt and to give some benefits to, is defined here somewhat elaborately. I won’t read it in its totality, but it starts out:

“Farmland beneficially owned or leased by a physical person or persons or corporations whose principal activity is devoted to the production of plants and animals useful to man, including but not limited to forage and sod crops, grain and feed crops, et cetera.”

Every clause in there has a nicety about it and a point which should command itself, I suggest, to the minister over against this amorphous, totally pigeon-hole definition that we have before us, which earlier we raged against on the basis of simply opening it wide. In my opinion, it is the most effective single point in your whole legislation, whereby you undermine your own legislation in the process of enacting it.

They define principal activity in this farm report as to where the weight falls and what are the criteria. They define a farm corporation perhaps in a more delicate way than you have done. They say:

“Corporation for the purpose of this classification should be deemed to mean a corporation incorporated under the Business Corporations Act or the Canada Corporations Act, whose principal object and principal activity is the production of plants and animals useful to man, as above defined, provided that all of its shareholders are physical persons; that no less than two-thirds of the shares of all classes are owned by farm operators; and that the principal activity of at least the majority of them is the operation of such farm.”

That’s pretty good. That’s really beginning to tie it down in a way that one finds a little more palatable than what you presently have proposed to us and have before the House. And so, really what I’m standing here for is to say that when you take it back in the interim before the evening session, and you come back with further nostrums as to how your legislation may be improved, this is the direction it should take and the new impetus it should have.

Hon. Mr. Meen: Mr. Chairman, I note it’s approaching 6. I think I can be very brief on this point, while the hon. member is still here. I thank him for his observations on that report. Since the report was received in February, I understand that the Ministry of Agriculture and Food and some representatives from other ministries are examining its content. At this moment I have no report from them as to their acceptance of those recommendations or their suggestions as to any changes.

At first blush, the definition of farming in there may look pretty good, but there may be some questions that we would have to direct our attention to before we could determine whether it was an appropriate definition of farming for purposes of this Act. I recognize that there may be some shortcomings in the present definition which we have taken from section 17(a), as I indicated, of our Succession Duty Act. I think, for the present time, I would have to stick with this definition.

We have a number of other different pieces of legislation with different definitions of farming. Rather than get still another one built into one of our pieces of legislation, I felt I should be consistent at least with the Succession Duty Act, an Act with which we’re involved in some respects as to assessment of values of real estate at certain points in time. If we should be able, through the benefit of the Ministry of Agriculture and Food and other related bodies to come up with something else that could improve this at a later time, then I would be the first to suggest that we adopt it. We would, then adopt it, I would think, with perhaps with some mutations in other parts of the taxing legislation in my ministry.

Mr. Lawlor: Mr. Chairman, if I may just say in debate, that’s totally unacceptable. Legislation must not go through in that particular way.

It being 6 o’clock, p.m., the House took recess.