Legislative Assembly of Ontario

The House met at 2 o’clock, p.m.

Prayers.

Mr. B. Gilbertson (Algoma): I would like to take this opportunity, Mr. Speaker, to introduce grades 7 and 8 students from Hornepayne Public School. There are 60 altogether; and their teacher, Mr. Tymkin, is in charge. They have some chaperones with them as well. It’s a privilege to introduce them to die House.

Hon. J. McNie (Minister without Portfolio): Mr. Speaker, I have the pleasure of introducing to you, and to the other members of the House, a group of some 50 members of the Hamilton Chamber of Commerce who are seated in the west gallery.

Mr. J. E. Stokes (Thunder Bay): Mr. Speaker, the members will find on their desks samples of amethyst, a semi-precious gemstone that is found in abundance in northern Ontario. We are hoping, as a result of this promotion, that was really started by the hon. Minister of Natural Resources (Mr. Bernier), that we will be able to get this gemstone designated as the official gemstone of the Province of Ontario.

Amethyst has been highly regarded for centuries because of its natural beauty. It was used as one of the gemstones of the high priest’s breastplate in the movie “Exodus,” and is one of the 10 foundation stones in “Revelations.”

Mr. E. Sargent (Grey-Bruce): Wrong party there.

Mr. Stokes: Amethyst has since become the traditional birthstone for the month of February. It is found in abundance in northern Ontario and tons have been shipped to all parts of the globe, including England, Australia, Hong Kong, Japan and Hawaii. We are hoping that it will be the means whereby we can have an entirely new industry in northern Ontario. I hope all members will enjoy the samples that have been distributed here this afternoon.

Mr. Speaker: Statements by the ministry.

CNE TRANSIT DEMONSTRATION SYSTEM

Hon. J. R. Rhodes (Minister of Transportation and Communications): Mr. Speaker, for some weeks now we have been receiving tenders for the civil engineering construction pertaining to the transit demonstration system to be built at the CNE. As the members of this Legislature are aware, the costs of this project are divided into two components. The fixed price portion covers the cost of developing the vehicles and the control system. The costs of the civil engineering portion of the work are contracted on a cost-plus basis. The estimates of these costs, being received in the form of tenders, have been substantially higher than was earlier predicted.

On May 2, I indicated I would undertake a review of these costs before these contracts were awarded to ensure that all expenditures were essential to meeting the technology demonstration objectives. Members may not be aware that the civil engineering designs for the stations and guideway were provided to Krauss-Maffei by their civil engineering subcontractors.

The ministry has been involved in a design review with the subcontractors. The ministry does not, under the terms of the contract, have authority for the design approval of these structures as they must be integrated with the vehicle design and the control system. Our contract is a performance contract and the specifics of the design necessary to achieve these performance specifications are the responsibility of the developer.

Nevertheless, since the costs of the civil engineering portion of this work have risen substantially from the previous estimates provided to us, I asked the ministry’s civil engineering experts to review these designs. I have since been advised by this staff of specialists in the ministry that with modification of the design a substantial cost reduction could be expected without reducing the effectiveness of the technical development programme, although some of the structural elegance may have to be foregone, specifically in the stations. This, however, would require an extension of the contractual time to allow for redesign. It is estimated the redesign would require some 3½ months by a combined team of ministry and developer’s civil engineering expertise. This, of course, would delay the beginning of the test phase of the development by some three to four months.

Mr. Speaker, this project is a technical development project and will continue to require flexibility in our approach to it. While we are not anxious to accept this three to four month delay in the demonstration schedule, I want to balance my responsibility for the cost of this project with my earnest desire to carry out this development programme as quickly as possible. Therefore, I have authorized my deputy minister to advise Krauss-Maffei that we would be willing to consider granting them a three to four month time extension in the performance of their contract obligations with us, on the condition that the civil engineering structures undergo design modifications incorporating all of the possible cost reduction modifications. In addition, we have offered the use of eight civil engineering design experts, under the leadership of Dr. Jim Dalton, to assist Krauss-Maffei and their civil engineering design consultants to undertake this redesign.

Mr. Speaker, I am anxious to keep the cost of this experimental development project as low as possible. At the same time I am anxious to proceed with our development project as quickly as possible. These design modifications will allow us to take advantage of some cost reductions which can come from an additional engineering review and still achieve the basic research and demonstration objectives. In addition, this time period will allow us to accommodate some of the eight-week delay I indicated had occurred in the vehicle test programme. Therefore, the fact that these two components of the project can once again be co-ordinated makes it advantageous to provide this time to gain significant savings in our transit development experiment.

As I said, Mr. Speaker, this offer to grant a time extension has now been given to Krauss-Maffei and they have accepted it including the terms I’ve mentioned. Our expectation is that the civil engineering will continue at the CNE site shortly after this year’s exhibition.

Mr. R. F. Nixon (Leader of the Opposition): Mr. Speaker, on a point of order, just before you call the next order of business, surely the Minister of Natural Resources has a statement to make on the flood situation in the Grand River and communities so affected?

Mr. S. Lewis (Scarborough West): I would have thought so too.

Hon. L. Bernier (Minister of Natural Resources): To answer, Mr. Speaker, the Premier and I have not had a chance to converse following his very extensive tour of the flood area. I understand the Minister of Agriculture and Food (Mr. Stewart) is in the area, so it is quite likely we will be getting a full report from them.

Mr. Lewis: That is not solving anything.

Hon. Mr. Bernier: I must say our conservation authorities branch is actively engaged with the local branch, assisting in every way it can.

Mr. Speaker: Statements by the ministry.

Hon. A. Grossman (Provincial Secretary for Resources Development): Mr. Speaker, on a point of order in respect to the last question, I should perhaps advise the House that the ministers involved met this morning. My colleague’s not aware of it, but I reported to the Premier in the last half hour as to the reports from the various ministries. The Premier is coming in now -- I’d be prepared to answer any question anyone has but I think it is only fair to let the House know that all of the ministries involved did meet and the report went to the Premier in the last half hour.

Mr. R. F. Nixon: Perhaps if I might --

Mr. Speaker: I shall again call the order of business: Statements by the ministry.

ONTARIO MANPOWER CO-ORDINATING COMMITTEE

Hon. W. G. Davis (Premier): Yes, Mr. Speaker, I have a brief statement.

In this decade, as during the last, this government will face the task of finding an increasing number of productive and self-fulfilling jobs for Ontario’s labour force. Although the numbers entering the labour force today are not expected to reach the heights of the 1960s, the increase between now and the end of this decade will still be substantial.

According to the Economic Council of Canada statistics from late 1972, the national labour force is expected to grow annually by 2.8 per cent in the 1970s, a figure surpassed only by the 3.2 per cent annual increase of the last decade.

In particular, the impact on the labour force of women, young people and those between the ages of 25 and 34 will be an important factor in our manpower considerations. Also, as we move into the latter 1970s, the directions and priorities of government and the private sector will have to take into account the changing social and economic needs they confront.

This province has long recognized the importance of manpower policy in overall government planning, and to augment the effectiveness of existing programmes an Ontario manpower co-ordinating committee was organized earlier this year.

This committee brings together the deputy ministers of various ministries concerned with manpower, plus the Deputy Provincial Secretaries for Social Development and Resources Development. This was done because the government recognizes there are a great many dimensions to the manpower question that can best be served by a co-ordinated approach.

However, because of its importance in provincial affairs, I feel this committee should be headed by a member of cabinet. Accordingly, I have asked the Minister without Portfolio (Mr. McNie) to be its chairman.

With his experience as Minister of Colleges and Universities, with the ministry’s direct responsibility for education and manpower training, and with 30 years’ varied experience in the private sector previous to that, he is ably suited for this new task.

He will be assisted by a compact secretariat, whose job will be to co-ordinate and provide liaison between the various ministries concerned. Actual programme development and delivery will remain the responsibility of the operating ministries.

The chairman will serve as a member of both the cabinet committee on social development and the cabinet committee on resources development, since manpower is a subject that concerns both fields.

In its deliberations, the committee will follow what this government feels are a firm set of principles governing manpower policy.

Firstly, that there is a clear need to fully co-ordinate the activities of the federal and provincial governments in the field of manpower policy; secondly, that there is a need to more fully co-ordinate manpower activities within the various ministries involved in the Ontario government; and thirdly, that the training and education be related to both the social and economic needs of our citizens.

In conclusion, Mr. Speaker, let me say that this step further underlines this government’s determination to make the best use of our human resources as we continue to promote the social and economic welfare of the people of this province.

Mr. R. F. Nixon: I wonder if the Premier might also make a statement as to his findings during his tour of the Grand River area this morning?

FLOODING IN WATERLOO REGION

Hon. Mr. Davis: Mr. Speaker, I visited two or three of the areas that were very seriously affected by the flooding over the weekend. I visited Cambridge, including the former municipalities of Gait and Hespeler, and I would like to report particularly on one aspect, Mr. Speaker, and that is the real enthusiasm and the commitment shown by the citizens in those communities in cleaning up and coming to grips with what for them was a very serious problem. I also visited some homes in the former community of Bridgeport and met with some of the residents.

In the brief trip this morning, I found that the damage was in fact quite severe in some areas. There’s no question that some homes were seriously damaged; and a number of the commercial areas in the former town of Galt -- small shop operations and so on -- face very genuine hardships. Incidentally, Mr. Speaker, you would be particularly interested in the former community of Preston as well.

In Bridgeport, a number of residents were seriously affected. Their household belongings were damaged, and one or two homes, perhaps even more -- I didn’t have a chance to see them all -- had some structural damage to them as well. The chairman of the region was with me, as well as the mayor of Cambridge and Mr. McLennan, the mayor of Kitchener. I told them that the Provincial Secretary for Resources Development would be co-ordinating the activities of the various ministries here and that we would be assessing this matter from the point of view of just what further help the government might be to them when we get more information from them.

Mr. Speaker: Oral questions.

The hon. Leader of the Opposition.

FLOODING IN WATERLOO REGION

Mr. R. F. Nixon: Thank you, Mr. Speaker. I’d like to ask the Premier if he is prepared to make any statement as to what financial assistance would be forthcoming, either directly to those people damaged or through the municipalities concerned?

Hon. Mr. Davis: Mr. Speaker, quite obviously this was a question asked by some of the people I visited this morning. Cabinet will be discussing this tomorrow. We hope we will have a fairly valid assessment of the extent of the damage, although I’m sure it will be a few days yet before there is any finality to it. It’s possible that the Provincial Secretary for Resources Development will have some observations to make to the House on Thursday.

Mr. R. F. Nixon: Supplementary: I’d like to ask further of the Premier if in his tours this morning it was brought to his attention that many of the residents were, if not dissatisfied at least deeply interested in the role played by the conservation authority in flood water control? Would the Premier undertake, or at least give some consideration to the possibility of an investigation at the ministerial level -- or better yet at an impartial level -- of the role of the conservation authority in this regard; and giving particular emphasis to the comments made by the officials of the authority, that if the dam programme which has been in abeyance since 1966 had gone forward, there would have been at least a lessening of the damage?

Hon. Mr. Davis: Mr. Speaker, this matter was raised this morning. I think it is fair to state there were, shall we say differing points of view. Some suggest the problem would not have been as great if the existing dams had not been there. There are also some who argue, of course, that if there were more dams there would be less of a potential problem.

I discussed this, too, with the chairman of the region, and indicated to him we would be in touch within a day or so as to just how we might make an assessment of the role and functioning of the conservation authority; not just related to this particular incident but including some assessment as to whether there should be some further works undertaken that should be given greater priority than other works in the province. It’s a very massive programme, of course, but this matter is already under consideration.

Mr. I. Deans (Wentworth): Supplementary, Mr. Speaker: I wonder if I could ask the Premier if he would consider a public inquiry into the role of the conservation authority, as per the letter I sent him earlier today? It would be for this reason: For many people their insurance, no matter what type of insurance they have, is voided under the “act of God” clause. Rather than an act of God, if in fact it was an “act of man” that created the problem, and if it can be proven that was the case, then for many the opportunity to claim through their insurance would be extremely beneficial.

Hon. Mr. Davis: Mr. Speaker, I really can’t comment on what possible changes there might be in the law or insurance as they relate to this aspect The member for Wentworth did communicate to me indicating he had been there -- I think on Sunday if memory serves me correctly -- and suggesting there be some form of inquiry. I don’t think at this point, Mr. Speaker, that I’m prepared to suggest there will be a public inquiry, in that sense of the word; but certainly we are concerned, as are the local municipalities and a number of citizens, as to the question of the conservation authority. But I think it would be premature at this stage, Mr. Speaker, to indicate just what form our study or assessment will take. However, once again by Thursday, the Provincial Secretary for Resources Development might have some further information.

Mr. Speaker: The hon. member for Kitchener.

Mr. J. R. Breithaupt (Kitchener): Mr. Speaker, a supplementary question of the Premier: In the financial plans which he is making, will the Premier consider the usual situation that has taken place in the past whereby the province matches funds which are raised locally through various groups or by the municipalities, so that this would be an additional benefit available to those who have been harmed?

Hon. Mr. Davis: Mr. Speaker, when I was asked this morning, by some of the citizens and the heads of the municipalities, just what precedent there was, I referred to the policy of the government that if there were, quote, “a disaster area established”, our policy has been to match the grants raised locally, either on a voluntary basis or through the municipalities. This will be one of the options I’m sure the provincial secretary certainly will be considering.

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

CNE TRANSIT DEMONSTRATION SYSTEM

Mr. R. F. Nixon: I would like to ask the Minister of Transportation and Communications for further information on his announcement today.

Can he tell us the new expected start-up date for the experiment at the CNE? According to what he has said it would appear it would be early in 1976. And can he now tell us what the expected cost of the experiment will be with the adjustments he has announced today?

Hon. Mr. Rhodes: Mr. Speaker, I anticipate the expected start-up time of the experiment -- going along as we are now -- will be in the fall of 1975 for the demonstration.

Interjection by an hon. member.

Hon. Mr. Rhodes: Any reference to 1976 was a quote of mine in which I did state I was not that concerned about any specific time, that if it was not until 1976 I would be quite happy with that.

Mr. A. J. Roy (Ottawa East): The minister better talk to his boss.

Hon. Mr. Rhodes: As far as the price is concerned, I anticipate --

Mr. R. F. Nixon: Stan Randall would have had it going on time.

Hon. Mr. Rhodes: -- there will be a substantial saving in this cost as a result of the redesigning that will be done.

Mr. R. F. Nixon: Does the minister expect it to be more or less or the same; since the one cost has gone up and the minister is cutting back on what he says are the visual aspects?

Hon. Mr. Rhodes: More or less or the same in what regard?

Mr. R. F. Nixon: Than the minister’s estimate now, which is $26 million.

Hon. Mr. Rhodes: With the reduction, obviously it will be less.

Mr. M. Cassidy (Ottawa Centre): Supplementary: Mr. Speaker, can we then conclude that Krauss-Maffei has told the government of Ontario that at the kinds of costs that were being discussed a year ago, it cannot produce the system that it had then promised according to the ministry’s specs? Is the minister therefore now saying we will do it because Krauss-Maffei can’t?

Hon. Mr. Rhodes: No, Mr. Speaker, Krauss-Maffei has not told the government anything. We have been in contact with them concerning this particular problem.

Mr. Deans: That is one of the problems, by the way.

Interjections by hon. members.

Hon. Mr. Rhodes: We have decided that the way to save some money on this project and to help cut down the costs is by changing some of the designs down at the CNE. We are not being dictated to by the company in Germany.

Mr. Cassidy: Supplementary, Mr. Speaker.

Mr. Speaker: The hon. member for York-Forest Hill.

Mr. P. G. Givens (York-Forest Hill): If the costs of the minister’s mere experiment are causing him to scale down the whole project and make a less elegant design, as he has put it, doesn’t this indicate the minister’s whole project will be so horrendously costly that he might as well abandon it now and go to light rapid transit?

Hon. Mr. Rhodes: Mr. Speaker, we have no intention of abandoning the project, as much as the hon. member would like to see that done. He has hung his hat on the hope there will be a failure.

Mr. Sargent: Why doesn’t the government give Gerhard Moog a shot at it?

Hon. Mr. Rhodes: This programme is not going to fail. The technology is excellent. We are going to continue with the programme. The only changes being proposed involve methods of cutting down on the cost of the civil engineering of this project. I have no intention of announcing, at this time or in the future, the abandoning of this project.

Mr. Cassidy: Supplementary, Mr. Speaker.

Mr. Lewis: The minister has had little caucus on that one all right.

Interjections by hon. members.

Mr. Cassidy: That’s right. Mr. Speaker, in the cost-cutting to which the minister refers, is it intended that the original specifications put forward by MTC will be substantially rewritten, in order to lower the service standards of the project so that he can reduce the engineering and technology costs?

Hon. Mr. Rhodes: My announcement today, Mr. Speaker, is that we are changing the design of the civil engineering, which will reduce the costs of the development of the guideways for the experiment at the CNE.

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

Mr. Cassidy: The government will never see that system running.

An hon. member: The member for Ottawa Centre hopes so.

PETROSAR LTD.

Mr. R. F. Nixon: I would like to ask the Premier if he has expressed his objection to the Premier of Alberta with regard to the policy enunciated by that province, which would indicate that the so-called SOAP petrochemical project for Sarnia, proposed by Petrosar Ltd. could not go forward because Alberta feels the crude ought to be refined and developed in Alberta rather than here in this province?

Hon. Mr. Davis: Mr. Speaker, I have not personally communicated to the Premier of Alberta on this project. The Minister of Energy (Mr. McKeough) was in Alberta a short time ago and perhaps this was one of the items that was discussed. As far as I am concerned, and I have expressed this point of view publicly before, I think there is room for both such projects in Canada. While we recognize Alberta’s legitimate aspirations to improve its position from the standpoint of utilization of their natural resource and the development of secondary industry, at the same time, we have suggested this should not be done in a manner prejudicial to the rest of Canada.

Mr. R. F. Nixon: Supplementary: Would the Premier not feel he should get in touch, personally, with his friend in Alberta of the same political stripe, so that in fact the decisions taken out there are not going to mitigate against the orderly development of industry here as well as in Alberta?

Hon. Mr. Davis: Mr. Speaker, we are assessing this particular problem. I think at this moment it would be questionable as to what benefit there would be, although I am always pleased to call the Premier of Alberta on any issue.

Mr. R. F. Nixon: That is the thrust he should be making.

Hon. Mr. Davis: At this precise moment, I don’t know that it would serve any useful purpose.

Mr. Lewis: The Premier won’t be calling him after July 8 except about the colours of his delegate’s badges.

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

TAKEOVER OF DUNLOP BY FIRESTONE

Mr. R. F. Nixon: I would like to ask the Premier if he is aware of an offer by the Firestone Rubber Co. of the United States to purchase the tire plant, Canadian warehouses and bicycle tire plant of Dunlop Canada Ltd. in Whitby; and that Dunlop is now taking a nation-wide inventory of its assets, such as they are, for the purposes of negotiating with Firestone? Since Dunlop was very much an issue in this Legislature a few years ago, is the Premier not concerned that this final asset would be sold out, with the problems associated with employment in the region?

Hon. Mr. Davis: Mr. Speaker, we are quite concerned. I am not familiar with the details. I think if the Leader of the Opposition were to direct that question to the Minister of Industry and Tourism, he might have some more precise information for him.

Mr. R. F. Nixon: I would like to do so, Mr. Speaker.

Hon. C. Bennett (Minister of Industry and Tourism): Mr. Speaker, some weeks ago I had the opportunity of meeting with the president of Firestone Tire and Rubber Co. from Hamilton, Ont., and discussing with him the possibility of a takeover of the Dunlop Tire people. It is my understanding, sir, that at this moment it is in a confidential position with the Minister of Trade, Industry and Commerce in Ottawa, as it is being reviewed under the Foreign Investment Review Act.

Mr. R. F. Nixon: Supplementary: Has the minister lodged an objection on behalf of the government of this province that would tend to at least slow down, if not stop, such a takeover; or can he assure us that the jobs that are presently associated with Dunlop would be maintained?

Hon. Mr. Bennett: Mr. Speaker, in dealing with a matter such as this, which is at the moment in a confidential state with the federal government and the ministry, all I can say is we have been asked for some input from our ministry and we have been more than pleased to give it. We are encouraged by the direction --

Mr. R. F. Nixon: The minister intends to keep it confidential?

Hon. Mr. Bennett: If the member would listen for a moment, I will finish the answer for him.

Mr. Cassidy: What does the minister think this is, school?

Hon. Mr. Bennett: We have been encouraged by the direction the Firestone company has taken in regard to the takeover of Dunlop, which is a foreign-owned company; so it is one foreign company looking at the potential takeover of as second foreign company and there is fair and justifiable reason for the takeover.

Mr. R. F. Nixon: Is the minister’s input confidential?

Hon. Mr. Bennett: At this moment, Mr. Speaker, our input is confidential. We have been securing information from the federal government and from the corporations, both sides; and we have been responding in relation to an Act of the federal government.

Mr. Lewis: Supplementary: Can the minister not indicate to us the recommendation he has made, regardless of the information on which it is based?

Hon. Mr. Bennett: Mr. Speaker, my recommendation at the moment is in a confidential nature to the Minister of Industry, Trade and Commerce of Canada. He has asked for this information to assist him in arriving at some conclusion. May I say that at the time Bill C-132 was being processed, we in the provincial government had asked to be consulted at any time there should be a takeover by a foreign company of a company in our province, and that is the procedure which the federal government is using at the moment. We are pleased to work with them and it looks as though it will be a very favourable conclusion.

Mr. Speaker: The hon. Leader of the Opposition? The hon. member for Scarborough West.

PROVINCIAL CONTROLS ON PETROLEUM PRICES

Mr. Lewis: May I ask the Premier, would he consider following the example of British Columbia and asking the major oil companies voluntarily to restrain the increase in prices of gasoline and home fuel oil? I think in that case the request was to a maximum of eight cents per gallon in any area -- which was responded to favourably by Imperial Oil and one other company, although riot so in the case of Shell. Such action would obviously mean a tremendous saving for Ontario consumers, were oil companies here to accede to the Premier’s request.

Hon. Mr. Davis: Mr. Speaker, there are two or three things that might be suggested. The government is, as I expressed last Tuesday, concerned about the increase in the gasoline price; I can only say at this moment that I have not talked to the oil companies on a personal basis, but I do not preclude that possibility.

Interjections by hon. members.

Mr. Lewis: I have a supplementary of the Premier. Given the new and rather interesting information that a very senior official of the National Energy Board, involved in supply and distribution, was engaged in a fairly clear conflict of interest -- sufficient, in any event, to have him resign -- does the Premier not think this is yet further reason for him to revert to the position he thought he had entered into last March and to request of the oil companies that the price in Ontario come back to the seven per cent level, since all subsequent information has been such as to undermine the determination made earlier; and indeed that information may not have been accurately filtered through to the Premiers and the Prime Minister?

Hon. Mr. Davis: Mr. Speaker, I’m really not sure how the issue, which I read about very briefly this morning, enters into the discussion and I’m not really prepared to comment on that aspect of it.

Mr. R. F. Nixon: My supplementary directed to the Premier, has to do with a certain lack of clarity in the policy statement associated with this whole matter: Are we to presume there is a substantial possibility of the government of Ontario taking some action within the next weeks to cushion the impact of this increase, as has been done by the other provinces; or must we assume the policy is to allow the laws of supply and demand to regulate this?

Mr. E. W. Martel (Sudbury East): When did that happen?

Hon. Mr. Davis: Mr. Speaker, I think as far as --

Mr. J. F. Foulds (Port Arthur): Laws of the Premier’s capitalistic view of life.

Hon. Mr. Davis: -- any suggestion being made that the government was prepared to reduce its tax as it relates to gasoline price, it would be unfair to build up any expectation on the part of the consuming public that this might happen. I think it is fair to state that in two provinces -- and I’m only going by memory -- the tax was reduced and those provinces, of course, are the prime recipients of the very substantially increased revenues.

If memory serves me correctly, one of our sister provinces has cushioned the impact of the increase out of equalization grants flowing from the federal government, without getting into the source of the equalization. How successful the Province of British Columbia will be with respect to one or two of the major companies on the eight cent figure -- which is nine cents here -- I think will have to be determined. Certainly, Mr. Speaker, the last thing I want to do is to build up any expectation the government sees a solution being the reduction of our own gasoline tax by a cent or two cents.

Mr. Cassidy: Take the companies’ profits and share them out.

Mr. Deans: A supplementary question: Could the Premier explain how, with all the high-priced help available to him, he could go to the conference in Ottawa without the necessary information to negotiate from strength based on knowledge, rather than from a position in which he didn’t have the kind of background knowledge necessary to arrive at a sensible conclusion?

Hon. Mr. Davis: Mr. Speaker, I think there is always some degree of misunderstanding about conferences of this kind. I read a certain article today in Toronto’s leading and now only evening newspaper. I think the figure of $50 million was used, and I think that is a shade high.

I can tell the member for Wentworth that the participants in that meeting -- there was no signed agreement as is indicated in one or two press reports and there was no documentation on the table. Ontario went there with the recommendation, or very strong suggestion, that there be no increase beyond the $6 figure. All the conversations related to a $4 figure, which was the existing price, as it related to expectations of the western provinces where the figure was substantially in excess, of course, of $6. The Prime Minister of Canada, who was the chairman of the meeting, very politely but firmly said if we didn’t reach a consensus he or the federal Parliament would legislate a figure of $6.50. The total conversation, Mr. Speaker, related to the question of the $4 to $6, which was Ontario’s suggestion, and the suggestion by the Prime Minister of Canada that it be $6.50.

Mr. Lewis: I thought it was Allan Blakeney who had let it go to his head. Now it’s Pierre Trudeau.

Interjections by hon. members.

Hon. Mr. Davis: Mr. Speaker, there is no question the Premier of Saskatchewan wanted --

Mr. Lewis: And so did the Premier of Alberta!

Hon. Mr. Davis: Yes, he wanted a much higher price. I think it is fair to state that according to Mr. Blakeney’s calculations the $6.50 figure was -- or would have been -- less than he was already receiving.

Mr. Lewis: That’s right, that is true. He made that concession to the Premier.

Hon. Mr. Grossman: The member is on his side now, is he?

Mr. Lewis: Certainly. I have always been on his side.

Mr. Speaker: The member for Grey-Bruce.

Mr. Sargent: Directly or indirectly, the Premier and the Minister of Energy have goofed to the extent of $50 million, and we have a cushion of $500 million from this tax. Why won’t the Premier be man enough to admit he’s made a mistake and pass that back to the taxpayers of Ontario by cutting it back? He has the cushion and it’s his fault, no one else’s.

Hon. Mr. Davis: Mr. Speaker, with great respect, I am not going to debate what went on at the meeting itself. I think the figures there were relatively clear-cut. If the member for Grey-Bruce says there should be some cushioning effect, I say to him with respect that the federal government of this country, which has the responsibility for this issue on a national basis --

Mr. V. M. Singer (Downsview): Oh, yes!

Mrs. M. Campbell (St. George): Crybaby.

Hon. Mr. Davis: Listen, those people over there can’t have it both ways.

Mr. Roy: Quit passing the buck.

Hon. Mr. Davis: The Liberal Party and the federal government then had the option of going for a $6 price. They have said no to any form of control, and members very well know it,

Mr. Singer: The minister said the Premier was not knowledgeable. He should have a course in arithmetic.

Interjections by hon. members.

Hon. Mr. Davis: And for the federal Minister of Energy to try and pass the buck here is totally irresponsible, which is what I said on Thursday.

Interjections by hon. members.

Mr. Sargent: Mr. Speaker --

Mr. J. A. Renwick (Riverdale): The Premier takes no responsibility of his own.

Mr. Sargent: On a point of order, I think I’m entitled to an answer.

Hon. Mr. Davis: I think Donald Macdonald, the other one, made a mistake.

Interjections by hon. members.

An hon. member: The Premier made the mistake.

Mr. Sargent: Mr. Speaker, regardless of where the Premier wants to lay the blame, we look to him to look after Ontario. He has laid an egg -- he has goofed. Why doesn’t he have the guts to stand up for the people of Ontario once in a lifetime?

Mr. Speaker: Order, please. I think the hon. member for Grey-Bruce might try to use a little better parliamentary language.

Mr. Sargent: Intestinal fortitude then.

Hon. Mr. Davis: Mr. Speaker, I am the first one to understand the limited vocabulary of the member for Grey-Bruce. I am very sympathetic to it; I totally understand.

Mr. Roy: Then why doesn’t the Premier answer the question?

Hon. Mr. Davis: I would only observe to the member for Grey-Bruce there was no increase in revenues to the Province of Ontario out of this situation whatsoever --

Mr. Sargent: I didn’t say that.

Hon. Mr. Davis: Our revenues will not increase, unlike the federal government, which has an increase in tax --

Mr. Lewis: But the revenues of the oil companies will increase.

Hon. Mr. Davis: -- and perhaps he, with his friends, might have some greater effect than we do on this side of the House.

An hon. member: He wouldn’t understand that either.

Hon. Mr. Davis: Yes, take off the 0.6-cent federal tax.

Mr. Renwick: Our revenues will increase. We will get our share of the increased profits of the oil companies under the Corporations Tax Act, because we are going to let them go higher.

Mr. Speaker: Does the hon. member for Scarborough West have further questions?

Mr. Lewis: Well, I don’t suppose there is any point in pursuing this further.

Mr. Renwick: It’s just ridiculous.

FOOD PRICES

Mr. Lewis: May I ask the Premier a further question on prices? Since the Ontario food basket jumped by nearly five per cent last month compared with a year previous, is there any indication or any interest on the part of this government in moving to scrutinize those major food retailers with a view to looking at the possibility or rolling back certain prices, or to initiate some kind of inquiry into their activities; or indeed to defend the consumers of Ontario in any respect as regards food prices, since he won t do it on gasoline prices?

Hon. Mr. Davis: Mr. Speaker, this government is of course concerned about any increase in the price of any commodity, including food. I think it would be erroneous to indicate to the leader of the New Democratic Party that we were contemplating at this precise moment some form of price control, which of course would be coupled with wage control, which of course his party would oppose. I would only say at this moment we don’t contemplate it.

Mr. Roy: Which the government opposed last year.

Hon. Mr. Davis: No, we didn’t.

PRICE INCREASE BY GENERAL MOTORS OF CANADA LTD.

Mr. Lewis: May I ask the Premier: Now that General Motors has announced an increase of $92 per unit in its production. which would appear on the surface to violate the auto pact, or at least what we thought would flow from the auto agreement by way of negotiation on prices, would he at least launch a protest, a firm and deliberate protest, with the federal government, against the increase in the cost of automomibles produced by General Motors in order to defend the consumers of Ontario in that regard, since he won’t defend them in terms of food prices or gasoline prices?

Hon. Mr. Davis: Mr. Speaker, I am always prepared to launch a protest with the federal government if I think it will have any useful purpose.

Mr. Lewis: Well, has the Premier done so?

Hon. Mr. Davis: I will have to assess whether I feel it might have any useful purpose in this particular situation.

Mr. Roy: The Premier has no credibility there.

PRICE INCREASES BY STELCO

Mr. Lewis: May I ask the Premier, did he in fact seek from Stelco an explanation as to their increase in steel prices? Has he requisitioned their books, and is he satisfied of the need for the 11 to 12 per cent increase? Has the Premier done these things so that he might step in to defend the consumer in the area of steel prices, since he won’t do it in gasoline, food or automobiles?

Hon. Mr. Davis: Mr. Speaker, I am always prepared to accept constructive suggestions from the leader of the New Democratic Party, although they are sometimes rather scarce --

Mr. D. C. MacDonald (York South): If the Premier were alive, he wouldn’t need his suggestions.

Hon. Mr. Davis: -- it was his suggestion I communicate not only with the head of Stelco but also with the head of Ford. When he goes through his litany again in the next question I can save him one; I have already communicated with the head of Ford -- although I must confess I haven’t requisitioned their books, nor do I intend to.

Mr. Lewis: Would the Premier like to table what it is that he has sent to either of these major companies? I presume it was by letter.

Hon. Mr. Grossman: What? The tapes?

Hon. Mr. Rhodes: We didn’t leave the transom open.

Hon. Mr. Davis: Mr. Speaker, when I receive a reply, I will consider what action I will take as far as making its contents available to the members of the House is concerned.

EXEMPTION OF RESOURCE LANDS FROM LAND SPECULATION TAX

Mr. Lewis: One last question, of the Minister of Revenue, if I may, Mr. Speaker: Would the minister consider amending yet again -- I hate to say this; let me put it another way -- would the minister reconsider the exemption which he granted in the Land Speculation Tax Act for resource lands --

Mr. Singer: It’s out of order, out of order.

Mr. Lewis: Well we have passed that point in the bill, which is why I am raising it in question period.

Mr. Singer: No, it is out of order.

Mr. Speaker: Order please. I must confess, I didn’t hear the total question. Would the hon. member repeat it, please?

Mr. Singer: He’s out of order.

Mr. MacDonald: Neither did the member for Downsview hear it, but that didn’t hinder him.

Mr. Lewis: Now that it has been revealed that Inco is selling land, which it bought for $1 an acre, at an average sale price of $5,500 to $7,500 an acre, does that --

An hon. member: That’s a lot.

Mr. Lewis: In fact it’s a lot; I am sorry, a building lot -- does that not seem to the minister to be the kind of speculation which would permit the inclusion of resource land in his bill?

Mr. Singer: That is not how he started.

Mr. Speaker: It’s in order now.

Mr. Lewis: Yes, through dextrous rephrasing, it is now apparently in order, Mr. Speaker.

Hon. A. K. Meen (Minister of Revenue): Mr. Speaker, I was not familiar with the situation outlined to me just now by the leader of the NDP. I’ll look into the question.

Mr. Martel: The ministry was familiar with it.

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

AIR POLLUTION AT NIAGARA FALLS

Hon. W. Newman (Minister of the Environment): Yes, Mr. Speaker. On Friday the hon. member for Wentworth directed a question to my colleague, the Provincial Secretary for Resources Development, concerning a request from Cyanamid of Canada Ltd. for an extension of the control order served on the company by this ministry.

Mr. Speaker, the ministry’s order to reduce particulate matter was served on the Niagara Falls plant of Cyanamid on Oct. 23, 1970. Since then, three extensions have been granted. The last extension is to expire on June 30, 1974, corresponding to a termination of operations at the plant.

On March 6, 1974, the president of Cyanamid forwarded a letter to me, which indicated the company’s intention to make a capital expenditure of approximately $2.5 million to install the required pollution controls. On the basis of the increased market for their products and the time required to install pollution abatement equipment, the company requested a further two years’ extension to their control order.

Following receipt of this letter, I met with senior officials from Cyanamid, who were accompanied by the mayor of Niagara Falls, and I indicated I would have to have a guarantee they would install the necessary pollution control equipment before I would give further consideration to their request for an extension. At this point in time I am awaiting a further response from the company.

While I am fully sympathetic to the risk of loss of jobs which will arise if this plant closes down, nevertheless I want to be fully assured that the necessary abatement measures would be taken to protect the citizens of Niagara Falls living in the area of the plant.

Mr. Deans: Mr. Speaker, by way of a supplementary question, may I ask the minister if he could restate that portion of his answer dealing with the date the original order expired, which I believe he said corresponded with the date of the closing of the plant? Is he now satisfied that it is the intention of Cyanamid that they will not close the Niagara Falls plant at some subsequent date?

Hon. W. Newman: As I said in my statement, I have sent a letter to Cyanamid requesting certain guarantees; as soon as I hear from them I will consider the whole matter at that time.

Mr. Deans: Will he inform the House of it?

Hon. W. Newman: I beg your pardon?

Mr. Deans: Will he inform the House immediately he receives a reply; since the date is, of course, the end of June?

Hon. W. Newman: I would like to have a look at it first; then I will report back to the House, yes.

Mr. Roy: Yes, look at it first.

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

FUNDS FOR TERRORISTS IN NORTHERN IRELAND

Mr. Roy: Mr. Speaker, my question is of the Solicitor General.

I wonder if the Solicitor General can comment on the statement made by a member of the British Parliament, wherein he stated he will communicate with the Canadian authorities to help cut the flow of money to terrorists in Northern Ireland flowing from this province over to Northern Ireland; or is he in a position to confirm this statement?

Hon. G. A. Kerr (Solicitor General): No, Mr. Speaker, I am not aware of a flow of money from Ontario to Northern Ireland.

Mr. Roy: May I ask a supplementary? Is the minister able to comment on the fact that the MP stated that most of these moneys apparently were raised in Toronto? Are the minister’s secret service or whatever he calls them, his investigative police, looking into this question?

And secondly, Mr. Speaker, is the minister looking into this statement? Is he investigating this situation?

Hon. Mr. Rhodes: Is he for real?

Hon. Mr. Kerr: Mr. Speaker, if I remember correctly, when I read that news article it referred to Canada. I don’t think it referred specifically to Ontario.

Mr. Roy: It said there were no funds coming out of Quebec, most of it was coming out of Toronto. That’s what the article said.

Hon Mr. Kerr: The comment I read -- I think it was from United Press or Reuters -- said “Canada” and it didn’t make any exceptions as far as I’m aware.

There is some concern about the shipment of arms from Canada; that has been expressed before in this House and it has been in the papers. But I’m not aware of any great amount of money flowing from Ontario to assist the contestants, shall we say, in the problems that exist in Northern Ireland.

Mr. Roy: Are you investigating this statement

Hon. Mr. Kerr: I’ve asked for a report, yes.

CONSERVATION AUTHORITIES’ PRIORITIES

Mr. Deans: Mr. Speaker, a question of the Minister of Natural Resources. Notwithstanding my request to the Premier for an inquiry into the actions of the Grand River Conservation Authority on the evening of the flood, will the minister require that there be an investigation by his conservation branch to determine that not only the authorities overall, but that authority in particular, are setting priorities correctly with regard to: (1) flood control; (2) recreation; and (3) the flushing requirements of the Grand River. The inquiry should determine that they are in fact, taking the appropriate measures year to year to ensure that the dams which are intended as flood control measures are used for that purpose primarily?

Hon. Mr. Bernier: Mr. Speaker, I think one has to fully understand the operations of the Grand River Conservation Authority. I think the priorities which the member has stated are not in that particular order.

The first priority, of course, is to make sure there is sufficient water in the Grand River to flush the whole system and provide water for the communities downstream. This is their No. 1 priority.

Their second priority is to control the flooding in the flood plain lands; and the third, which is a very low priority, is recreational opportunities in that particular area.

Naturally we monitor very closely the operations of the conservation authorities because of our contribution, and I have seen no change in policy direction or in priority setting over the past year. I would say that the action the conservation authority took was in one of those “act of God” situations. They didn’t have that much advance information as to the size of the storm or the amount of rain that would fall after a very wet period in which the ground was completely saturated. In the previous week there had been about an inch of rain, the reservoir was practically at its peak and they were pulling it down at the time; they were pulling it down in awareness of the coming storm. But the information given to them, as I understand it, was that the rainfall was expected to be about 1 in. or 1¾ in. In no way did they expect a 2½ in. rainfall.

Mr. Deans: A supplementary question: Is the minister then admitting they did in fact open the gates of the dam and allow the water through? Second, doesn’t he feel that the function of the authority is to monitor continuously to assure that the dam itself is used as a flood control measure, rather than as a means of providing recreation?

Hon. Mr. Bernier: Mr. Speaker, I would invite the hon. member to visit that particular administration centre --

Mr. Deans: I have been there.

Hon. Mr. Bernier: -- and see the very complex control they have of their operations in connection with preventing floods. To me it is one of the finest in southern Ontario -- really it is. They have a handle on the situation and I’m confident the action they took was a correct one.

Mr. R. F. Nixon: Supplementary.

Mr. E. R. Good (Waterloo North): A supplementary of the minister, Mr. Speaker: Will the ministry routinely, or especially in this case, monitor all the data available as to the flow charts and the graphs and make a statement, probably through one of the minister’s hydrological engineers, as to the process that was followed and how it related to the flood that occurred? I do feel the people in the area want a statement from someone other than the authority itself as to the monitoring of the data that is available.

Hon. Mr. Bernier: I would point out to the hon. member that the conservation authority is an autonomous body, but in my opening remarks in answer to the question from the Leader of the Opposition I pointed out that my people were meeting with the conservation authorities branch in that particular area at the present time and would be reporting back to me. When I have that information it may well be that I will follow the member’s suggestion.

Mr. R. F. Nixon: A supplementary, Mr. Speaker: Wouldn’t it be true to say, however, that the minister’s predecessor was the one who established the relatively low level of flood control and the list of priorities by virtue of not approving the plans put forward by the conservation authority over a number of years for dams which would control the floods, specifically at West Montrose?

Hon. Mr. Bernier: Mr. Speaker, I would refer to my leader’s observation when he said control of flood waters in southern Ontario was a very large and complex undertaking. It would cost about $500 million if all dams were to be installed at this point in time.

I would point out to the Leader of the Opposition that in the mid-1960s it was the federal government which opted out of the Canada water assistance programmes in which it was paying 37½ per cent toward the construction of those dams. It opted out.

Mr. Singer: It was probably a Diefenbaker government.

Hon. Mr. Bernier: We’ve been pressing it to come back in and assist us in this very urgent programme. Hopefully it will.

Mr. R. F. Nixon: A supplementary: Since the minister has raised this new matter is he saying the decision to remove the proposed dams from the programme of the Grand Valley was taken elsewhere than by the minister and his predecessors?

Hon. Mr. Bernier: No, Mr. Speaker. I am saying they are still on our priority list, but of course they will be developed as funds become available. The federal government could have assisted us by maintaining its assistance over the period of the last few years, had it maintained its obligation.

Interjection by an hon. member.

Hon. Mr. Bernier: But it opted out.

Interjections by hon. members.

Mr. Speaker: The member for Kitchener.

Mr. Breithaupt: A supplementary, Mr. Speaker: Further to the request with respect to an independent view of the subject to satisfy the citizens in the area, would the minister not think that an independent or a ministerial review and public forum would be welcomed by the officials of the conservation authority as well so they could tell their story more fully and get all the facts of the situation before the public?

Hon. Mr. Bernier: Mr. Speaker, as I related to the member’s colleague, I would be prepared to take this route once I have the information in my hands.

Mr. Speaker: The member for Waterloo South.

PROPOSED COTTAGE SUBDIVISION ON NAPPAN ISLAND

Mr. Good: A question of the Premier, Mr. Speaker: Is it correct that in spite of the opposition by the Ministry of Natural Resources over the approval of a plan of subdivision on Nappan Island it was a cabinet decision that this approval should be given -- in spite of the objections of the ministry which stated in its estimates last week it has not reversed its decision? It still feels it is not right that there should be draft plan approval for 250 cottages on Nappan Island in the Trent Waterway.

Hon. Mr. Davis: Mr. Speaker, I understand this was very thoroughly discussed in estimates; I have no further information with which I can help the member.

Mr. Good: A supplementary, Mr. Speaker: This was discussed in estimates but the Minister of Housing (Mr. Handleman) has refused to give us an answer on why draft plan approval was given when there were objections from other ministries. It has come to me this morning that it was a cabinet decision that draft plan approval should be given. I want to know if that is correct.

Hon. Mr. Davis: Mr. Speaker, what goes on in cabinet in specific terms is, of course, confidential. I can only say to the member I don’t have any additional information for him at this moment.

Mr. Speaker: The member for Thunder Bay.

NAKINA IMPROVEMENT DISTRICT

Mr. Stokes: Thank you, Mr. Speaker. I have a question of the minister responsible for municipal affairs. Can the minister tell me the status of the application of the improvement district board on Nakina in its quest for alteration of status to that of an open community by way of a township rather than being a closed community, something to which it has been opposed for several years?

Hon. J. Irvine (Minister without Portfolio): Mr. Speaker, I believe the question should be directed to the Treasurer and Minister of Intergovernmental Affairs at this time. He is in the House.

Mr. Speaker: The member for York --

Mr. Stokes: Could I redirect it?

Mr. Speaker: All right.

Mr. Stokes: Can the minister tell me what the status is of the application of the improvement district board of Nakina for erection into a municipality, a township?

Hon. J. White (Treasurer, Minister of Economics and Intergovernmental Affairs): I am sorry, I can’t offhand. I’ll get the answer for the member.

Mr. Speaker: The member for York-Forest Hill.

DIAL-A-BUS

Mr. Givens: A question of the Minister of Transportation and Communications: In light of the lacklustre and money-losing performance of the province’s dial-a-bus scheme --

Hon. Mr. Grossman: Is this an editorial comment?

Mr. Cassidy: The minister never gives any, does he?

Mr. Givens: -- in Metro, will the government use its present review period to consult the public about its desires for this service, the dial-a-bus system, as suggested by the director of the Metropolitan transportation plan review?

Hon. Mr. Rhodes: Mr. Speaker, there was a discussion with the public at the time the present dial-a-bus system went into effect. I recognize that Mr. Soberman has had some comments to make in the press and he is certainly entitled to make his observations. For any new system that is developed, for any new area that is to be served, certainly they will follow the procedure that has been followed to determine how best to serve the people of the community.

Mr. Soberman referred to the lack of public participation. I believe the only lack of public participation was the lack of people getting on the buses and using them, so we are going to move them.

Mr. Speaker: The hon. member for Sandwich-Riverside.

Mr. Singer: That’s a pretty important lack, isn’t it?

Mr. R. F. Nixon: Dial-a-bus promotion lacked lustre.

Mr. Singer: How can you have a transportation service without customers?

Mr. F. A. Burr (Sandwich-Riverside): Mr. Speaker, a question of the Treasurer.

Mr. Roy: Tell us about Krauss-Maffei.

Mr. Speaker: The hon. member for Sandwich-Riverside.

MUNICIPAL BUDGET CONSTRAINTS

Mr. Burr: A question of the Treasurer: Is the Treasurer aware of the bind in which the city of Windsor finds itself as a result of budget constraints imposed upon it by the provincial property tax stabilization grant regulations? For example, is the minister aware that the Ministry of the Environment insists on very expensive sewage works, and rightly so, but the Treasurer’s ministry insists on curbing public works on pain of losing the maximum subsidies and grants? Is the minister aware of this situation?

Hon. Mr. White: No, Mr. Speaker.

Mr. Burr: Would the minister be kind enough to review the contradictory elements that are factors in the Windsor situation?

Hon. Mr. White: Well, we haven’t got any constraints at all. I don’t know what the hon. member is talking about.

Mr. Cassidy: The minister certainly does.

Mr. Roy: Tell us about the budget.

Mr. Foulds: He means he can’t even remember the budget after he put it out.

Hon. Mr. White: We have an inducement for economy; which I think the hon. members will agree is entirely appropriate, given a very high rate of inflation.

Interjections by hon. members.

Mr. Speaker: Order please, the hon. member is trying to listen and can’t hear very well.

Mr. Roy: The hon. member isn’t missing anything.

Hon. Mr. White: Those inducements are very greatly diminished by our new sliding scale, so that this year, for instance, if --

Mr. Singer: Sliding scale -- is that one of the pretty pictures the Treasurer has in his budget papers?

Hon. Mr. White: -- municipal spending growth is 10 per cent, they would receive in the grants a seven per cent bonus, so to speak --

Mr. Lewis: So to speak.

Hon. Mr. White: -- compared to four per cent a year ago. If the municipalities’ expenditure increase were 12 per cent they would receive five per cent by way of general support grant rate instead of two per cent a year ago, so the constraints are not unduly severe. I’m not going to take any blame for whatever spending priorities and quantities have been established by Windsor. That’s up to them.

Mr. Burr: A supplementary: My question is, is the minister aware that because of the necessity imposed upon the city to undertake certain public works in the field of the environment, other public works such as the repair of roads and sidewalks are just going to be impossible if the city is to receive the maximum benefit of the grants?

Mr. Roy: Next question.

Mr. Speaker: The time has expired!

Hon. Mr. White: I can’t find the book which indicates the exact amount of these grants.

Interjections by hon. members.

Mr. Foulds: It looks like Fibber McGee’s closet.

Hon. Mr. White: But I will be glad to tell the hon. members tomorrow how much money Windsor is getting this year compared to last. Then the hon. member and others can decide whether we’re playing fair with the municipalities or not.

Mr. Burr: Thank you.

Mr. Speaker: This completes the oral question period.

Petitions.

Presenting reports.

Motions.

Introduction of bills.

Orders 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.

Mr. Chairman: Order please. On Bill 25 we are about to put the question which is that the old subsections (2) and (b) of section 4 remain as part of the bill and be renumbered as (i) and (j).

Shall this motion carry? Carried.

Now, section 3 was stood down by the minister to prepare an amendment. I believe he now has that ready?

Hon. Mr. Meen moves that subsection (2) of section 3 of the bill be amended by adding after the word “who” in the second line, the words “knowing that tax is payable.”

Mr. Chairman: Shall this motion carry?

Mrs. M. Campbell (St. George): No. Could we have a copy?

Mr. J. A. Renwick (Riverdale): Can we see it first of all?

Mr. Chairman: Order, please. Would the minister care to explain this?

Hon. A. K. Meen (Minister of Revenue): I would be very pleased to, Mr. Chairman. The point covered by this amendment was raised by the hon. member for Sarnia (Mr. Bullbrook) when we were debating this section last week. I recognized that he was raising a valid point and set about to find some way in which to relieve the very heavy onus that would otherwise be placed upon the legal profession, among others, who might have occasion in the normal course of their business to take money into their trust account and to pay it out frequently and immediately for some other purposes of the same client.

I have proposed this amendment which would then place an onus on a solicitor acting in a fiduciary capacity, for example, for a vendor to make remittal of a tax that was payable only if he knew that the tax was payable. Otherwise, if he does not know, then he is in a position to use the proceeds for the purposes of the client, say for example, as would be the normal case, the purchase of another piece of property or properties out of the proceeds of the sale. And with this amendment, if he did not know the tax had been attracted, or if his client had perhaps misrepresented the facts to him or he had no occasion to know the tax was payable, then he would not be obliged to withhold the money or to pay the tax over to the minister.

Mr. J. R. Breithaupt (Kitchener): Well, Mr. Chairman, I commend the Minister of Revenue in bringing forward this amendment. The points which were raised by the member for Sarnia need not be repeated here because they, of course, appear in Hansard. I think that the matter of direct knowledge of the solicitor is something which is important to differentiate when we look on the other hand at information which may not be complete and which should not lead to personal liability.

I think that the amendment certainly is a reasonable one and I am pleased to see that it has been placed in the statute.

Mr. P. D. Lawlor (Lakeshore): Mr. Chairman, I feel that the amendment is perhaps drawn too broadly. In any event, would it not have been just as much to the point to give some specific exemptions to the legal profession acting in the trust capacity with respect to real estate transactions in an exclusive and direct way, rather than in this rather molly-coddled, obtuse way, knowing the tax is payable? I suggest to the minister over against that subsequent section that he and I conjured with at the time, that it may be revisited, that the reassessment of the tax may come back upon the individual.

The minister has worded it in such a way as perhaps in construing it and in construction before the courts -- and even within the terms of his own ministry as to whether he thinks its imposition is legitimate or not -- it very well could override the impact of those few words, “knowing that tax is payable.” In other words, I’m not convinced at this standing that it solves the difficulty at which you are aiming this amendment. I am indeed far from convinced that that is the case, and I would like to hear further from you on this particular head.

Hon. Mr. Meen: Mr. Chairman, I’m convinced -- and I’m pleased that the hon. member for Kitchener sees this position in this fashion --

Mr. Lawlor: He’s too easily appeased.

Hon. Mr. Meen: -- that this does look after that situation. As to administrators, executors, trustees or people acting in that capacity, I think they would have cause to know whether tax was payable, so that it doesn’t sweep too broadly across that area of activity. But it does indeed, in my opinion and the opinion of my advisers, protect the legal profession in handling trust moneys for their clients. That’s what this amendment seeks to accomplish.

Mr. Lawlor: Let’s just dwell for a moment on the word “knowing.” Do you mean that he actually knows or may constructively be deemed to know? It’s extremely important. If the Act is in effect and every citizen is deemed to know what the law is, a fortiori the legal profession is supposed to know what it is. He’s supposed to know that a tax is payable. How does this circumvent the difficulty really?

Hon. Mr. Meen: Well, he may not know, Mr. Chairman. That’s just exactly the point which the hon. member for Sarnia has raised, that he may not know. His client may have told him he acquired the property at a certain price. His client may have misled him. He would be in an invidious position, as I assess this, if he were cloaked with knowledge, by way of constructive knowledge, if he in fact did know. He would be bound to investigate into every last transaction and determine whether and to what extent any tax was payable. This could hamstring the commercial world, and there is no intention on my part to impose that kind of heavy onus. The responsibility here is rather unlike the responsibility of a fiduciary under the Succession Duty Act, where he has adequate time to reflect upon the transactions that are under his guidance and responsibility as an executor, an administrator or as a trustee. In this case, the solicitor handling a transaction is not in the same position.

So, in looking at these sections, I felt that I had cast too wide a net by adopting section 26 of the Succession Duty Act into this Act dealing with land speculation. Where it’s perfectly workable and has proven to be workable under section 26 of the Succession Duty Act, it did seem to me that the arguments advanced last week had validity, that it would be less workable and far too stringent to be imposed in this fashion in this Act.

Mr. Lawlor: Mr. Chairman, a final word on it as a commentary, it seems to me a kind of tentative lunge towards rationality and bespeaks the general tenure of the legislation as such. I don’t feel it solves the difficulty finally. I think you’re trying somewhat desperately to alter the situation. Let’s put it this way; it’s better probably than it was, but it seems to me on construction that that clause will probably fail.

Mr. Chairman: Shall this motion carry?

Mrs. Campbell: Mr. Chairman, I would like just some clarification. Up until now one of the things that has bothered me has been the retroactivity, if I may put it that way, of the effect of this legislation when passed.

In view of the fact that the lawyers are gathering together to try to understand this bill at its present state, do I take it correctly that any lawyer who has been transacting business on behalf of clients during this interim period, having in mind the retroactivity of this bill, is in fact now covered, so that he at least, not knowing what the eventualities will be, is covered now and does not have any retroactive obligation?

Hon. Mr. Meen: Up until the last half of that sentence I thought I understood the question, Mr. Chairman. The Act will apply as of April 9. If this amendment is adopted by the committee, then it would be included in the Act as passed and, of course, for all actions within the legal fraternity from and including April 10 last, then this will be applicable.

Mrs. Campbell: In other words, they couldn’t know at that point whether the tax is payable or not, so that they would be excluded from responsibility under this amendment. Is that not so?

Hon. Mr. Meen: The Act isn’t proclaimed yet, so at this point no tax is payable. All that applies now is a lien for any tax that may be computed to be payable. If a solicitor under section 2, as it stands unamended, had made such a remittal of moneys, -- maybe used them for the client’s purposes on a subsequent purchase, for example -- he might or might not have been liable depending on whether his client was or was not liable for the tax.

Mrs. Campbell: I see.

Hon. Mr. Meen: This section imposed that obligation on him. I have simply said that goes too far in my opinion. What we are saying is he is only liable if he has made a payment out knowing that tax was payable.

Mrs. Campbell: Thank you.

Mr. Chairman: Does this motion carry?

Motion agreed to.

Mr. Breithaupt: Mr. Chairman, on one point that you had gone through just before we reverted to section 3, and that was with respect to the adding of the former sections (a) and (b) to become sections (i) and (j) in section 4 --

Mr. Chairman: Section 4, that’s right.

Mr. Breithaupt: -- I was wondering if the minister might just allow us a question on that, because I think that there is one point that might be helpful to the minister on it. In what is now (j) -- that is, the old subsection (b) -- there was the matter raised that when certain designated land is disposed of in certain ways, then that land is not to receive taxes as a designated parcel. I am wondering if the minister has given consideration, or indeed this may nave been discussed earlier, as to whether when a municipality or one of these other agencies disposes of lands that the tax would be applicable as well.

In other words, should the section possibly read that “when the designated land is disposed of to or by”, the putting in of the words “or by Her Majesty” and so on? I don’t know if that had been considered but it would appear to me something worthy of consideration, whether the minister either chooses to make an amendment now or have the matter reviewed for a possible further amendment at sometime in the future.

Hon. Mr. Meen: Mr. Chairman, I recognize the problem which the hon. member is raising. One of the difficulties in simply inserting that little amendment “to or by,” as we have had previously -- and I guess that is where both the member for Kitchener and I maybe on different occasions touched on the same subject and I had to bypass that suggestion -- is that no tax is exigible by Crown agencies. I think this applies to municipalities as well; that may or may not be so.

In any event, no tax is exigible against the Grown, so it would be redundant to say “to or by” the Crown. It would take a complete, “and Her Majesty in right of Canada,” and so on. It would take a redrafting of this section to accomplish that. I am going to be looking at that in the next few months, but I don’t propose to include it as an amendment in this Act at this time.

Mr. Breithaupt: Just a point that may be helpful. Since a municipality is mentioned it may be worthwhile to consider an amendment or even a further subheading in this section that would deal with the disposal of the designated lands to or by a municipality or perhaps some emanation, such as a public utilities commission or other creature, which in fact may have title to properties for industrial land purposes or simply as surplus lands and against which it would be not be in the best interest to have a tax exigible but rather to encourage the use of that land for development at what would otherwise be a lower price if that tax did not have to be considered in the asking price of the property. I would hope the minister might consider that matter, dealing not only with municipalities but also with public utilities commissions, to take the example I chose, so that this possible problem could at least be considered. If it were considered we might be able to avoid an unplanned-for difficulty by a future amendment to the bill.

Hon. Mr. Meen: It might be at some future time, Mr. Chairman. I draw to the member’s attention that so far as a municipality is concerned we already have picked that up in the new subclause (b). It is really only, say, Ontario Hydro, to think of one.

Mr. V. M. Singer (Downsview): Mr. Chairman, I must say I am puzzled by what the minister has said. The tax is not payable by the transferor. It is a charge against the land and it seems to me the scheme of the bill is that the tax is really payable by the transferee.

The question of whether or not the Crown is exigible surely is not important. When a tax is payable by the transferee -- let’s look at the old (b) which is the new (j). When the designated land is disposed of to Her Majesty, there is no tax but when it is disposed of by Her Majesty to X, apparently X is liable to pay a tax.

Hon. Mr. Meen: No.

Mr. Singer: Why?

Hon. Mr. Meen: No.

Mr. Singer: The tax attaches to the land. It doesn’t attach to the Queen; it doesn’t attach to the transferor; surely it attaches to the transferee? The land and the lien follows and the lien attaches to the land. If I buy land from the Ministry of Public Works -- Her Majesty the Queen in right of Ontario, as represented by the Ministry of Public Works -- it seems to me that the way you have got it standing now is that the tax does, in fact, apply.

Let’s go back to 2(1) --

Where ... any disposition of designated land occurs, there shall be imposed and levied, for the uses of Her Majesty in right of Ontario, upon the designated land with respect to which such disposition occurs a tax computed at the rate of 50 per cent....

When the land has moved from the Queen to Arthur Meen, the lien attaches to the land and Arthur Meen, to have a clear tide, is going to have to get rid of the lien by getting rid of the tax. It isn’t Her Majesty who is being taxed; it’s the transferee, the purchaser, who is being taxed -- at least, if I read it correctly. If I am not reading it correctly, I’d like the minister to show me why I am not.

Hon. Mr. Meen: May I simply draw to the member’s attention the provisions of section 2, sub 3, which provides that it is the transferor who shall be liable for the payment of die tax. We’ll get into these sections later on. Of course, if a purchaser obtains the prescribed affidavits from a transferor, he would take without any liability for the tax; but if he is not able to satisfy himself cm that, by getting a lien clearance, then, of course, there is a lien on the land. But it is payable by the transferor, as the member will see in reference to section 2, sub 3.

Mr. Singer: I looked at 2(3), as the minister was talking and even though the Queen will not pay taxes to herself, the lien is still there. I submit that it has to stay there unless you exclude the fact that it’s going to be there. In other words, the lien is there even though the transferor is not liable to pay the tax.

The lien is there. The lien attaches to the land. You’ve made quite an issue of attaching the lien to the land The Queen approaches the Queen and says, “Give me the tax,” and the Queen says to the Queen, “No, I am not going to give you the tax.” But the lien isn’t removed; the lien is still there.

I think the suggestion made by my colleague from Kitchener makes good sense. Why don’t you say “to” or “by”?

Mr. J. E. Stokes (Thunder Bay): Mr. Chairman, while the minister is pondering that suggestion, may I interrupt to bring to the attention of the Legislature that in the east gallery we have 29 students from Nipigon Public School. They are 27 grade 8 students who are down here for most of the week. They are under the direction of Barry and Janet Frankham, Maxine Boyle and John Chase. I hope members of the Legislature will join me in welcoming them to Queen’s Park.

Hon. Mr. Meen: The member for Thunder Bay gave me ample opportunity to reflect on that subject, Mr. Chairman, and I would just observe that a lien arises only if there is tax payable. If no tax is payable by the Crown or in any such circumstances, then there is no lien, period.

Mr. Singer: I find great difficulty in accepting that. When we go back to 2(1), it says, “Subject to section 4, where ... a disposition of designated land occurs, there shall be imposed and levied ... a tax computed at the rate of 50 per cent ...” If the disposition is by the Queen or by a Crown agency, it would seem, in the absence of a positive exemption, that the lien still attaches.

Granted, the transferor by 2(3) is supposed to pay the tax, but wouldn’t it be easier to avoid that argument now? If the lien is there and the transferor isn’t going to pay it, then the person who owns the land is going to have to pay it in order to make good title at a later time when they want to deal with it again.

The lien is there. You haven’t removed the lien. And it doesn’t say that the lien applies only when the transferor has to pay the tax. It says the lien applies where the land is designated land.

It seems to me that it is designated land and the lien applies even though the tax is not collectible from the transferor. In the end course the purchaser from the transferee is going to demand a clear title, is going to search for liens, will find one, then we have the great argument, and to conclude the transaction the transferor is going to have to pay this tax.

Hon. Mr. Meen: Well, I simply repeat, Mr. Chairman, the lien is for moneys that are payable. If no moneys are payable, there is no lien. Section 2, subsection 1 says “subject to section 4.” Section 4 has certain prescriptions in it and we certainly know -- and you don’t have to refer to it by statute -- that in the case of the Crown no tax is payable. Therefore, there is no lien that could arise in those circumstances.

Mrs. Campbell: Mr. Chairman --

Mr. Chairman: Order please, we have already passed this section. We have allowed certain discussion on it for the sake of clarification but it seems to me that --

Mr. Singer: When did we pass the section?

Mr. Chairman: A moment ago.

Mr. Singer: A moment ago? No, we didn’t.

Mr. Chairman: Well, several moments ago.

Mr. Singer: We didn’t pass the whole section?

Mr. Chairman: Not the whole section, oh no.

Section 3 -- have we finished with that?

Section 3, as amended, agreed to.

On section 4 we are up to subsection (c). The minister has an amendment for subsection (c), on the top of page 12.

Hon. Mr. Meen moves that clause (c) of section 4 of the bill be amended by striking out “and” in the fourth line and inserting there in lieu thereof “or.”

Mr. Chairman: Shall this motion carry?

Mr. Singer: No. Not by a long stretch.

Mr. Chairman: The hon. member for Downsview.

Mr. Singer: Mr. Chairman, the argument on this is similar to the argument put forward by my colleague from Sarnia and myself in connection with these other sections a little earlier on -- I think the member for Riverdale was into this argument as well -- dealing with partnerships, corporations, amalgamations, arrangements and whatever else. It would seem to me that here again is an invitation to avoid the Act. A limited company has acquired designated land and the company decides amongst its shareholders that more than 50 per cent of its assets are designated land and it will wind up or dissolve. So it does and so it distributes its assets and so it avoids the tax. Why should it? It is as simple as that.

Hon. Mr. Meen: The amendment; of course, clarifies the matter of winding up and dissolution, which can be different functions, Mr. Chairman. I presume the hon. member isn’t requesting clarification on that point but rather is going to the genus of the exception. It is quite simple. In these circumstances, it is a transmission through to the shareholders and winds up in their hands. Then when they dispose of it, they wind up paying the tax, if a tax is payable.

Mr. Singer: Well, if there is a tax payable at that time, they will all have put on their little 40 per cent or have formed a new partnership under the circumstances.

Mr. Chairman: Shall this motion carry?

Motion agreed to.

Mr. Chairman: On subsection (d).

Mrs. Campbell: Mr. Chairman, on 4(d), I wish to present an amendment.

Mr. Chairman: The member for St. George.

Mrs. Campbell moves that subsection (d) of section 4 be amended by adding after the word “lessee” in the seventh line thereof the following: “or by a person resident in a hospital, nursing home, a senior citizens’ residence or any other institution under the Charitable Institutions Act.”

Mrs. Campbell: Mr. Chairman, this is an endeavour to meet the problem which I put earlier, that is, the case of the person who has had a family residence for some period of years, a person who has as a senior citizen been forced to go into a nursing home or some other institution and who lives there, as is usual in these cases, for a period of time. The whole matter of going into one of these institutions is in itself traumatic enough without forcing the person to give up his home at the same time. It is an attempt, Mr. Chairman, to try to assist one of the small people who are being affected by this speculation tax and who were never a part of the speculative field.

I put it forward for that purpose in the same way as one was concerned earlier about the effect on the farmer. I would hope that the minister would give consideration to this -amendment.

Mr. Breithaupt: Mr. Chairman, I think that it is worthy to make a few comments on this amendment which has been proposed by the member for St. George.

As she has said, there are circumstances whereby what might otherwise be the principal residence of a person is no longer technically the case because that person is now living, possibly temporarily, in a nursing home, a hospital or the senior citizens’ residence that has been referred to. I think this exception would be of great benefit to many of our senior citizens who leave their home perhaps with the intention of returning but then aren’t able to do so. If they were aware that they had this exemption should the need arise, it might be that they would be at least of a better mind to attempt to live in a senior citizens’ home, to which they may otherwise be going reluctantly.

If this exemption is acceptable, then it would mean that principal residence would be able to have an extended meaning, especially for some of our senior citizens. The possibility here, of course, is that a person might change his or her mind after living in a senior citizens’ home for a while and finally decide, or have to decide, that what was their principal residence may well have to be disposed of.

The disposition of that residence would no longer have the exemption if, in fact, it could be seen that the person’s principal residence had changed. If their residence was then deemed to be, in fact, the senior citizens’ home in which they had lived for half a year or a year, rather than the home that still stood in their name, it could possibly mean that tax might be exigible because this might be looked upon as possibly some kind of an investment property. I think that if we are able to avoid this possible technical argument that might discourage or dismay many of our senior citizens, we would come up with a better bill. Accordingly, I hope that the minister will consider accepting this amendment.

Mr. Chairman: The member for Lakeshore?

Mr. Lawlor: Mr. Chairman, as far as the amendment itself is concerned I personally at this time can see nothing wrong with it; in fact, it has positive merit as far as I could see within the section. But what I want to talk about, Mr. Chairman, are the larger implications of the section.

This remains, then, the single worst-drafted clause in the legislation. What kind of a hodge-podge have we got?

Mr. Renwick: I have read it 50 times and I still don’t know.

Mr. Lawlor: Couldn’t the minister segregate out, as he did in an earlier part of the bill -- with some recommendations coming from this side of the House -- ferret out, sift through the filter, the concept of fair market value? The minister had it all muddled up with a lot of other stuff, but he finally got around to redrafting the bill and sending it out, seriatim, in an intelligible way. But here we have a melange.

There is a tourist establishment -- which seems to be what it is starting out about. Then, worked into it, is the exclusion that affects commercial and industrial lands. And it does and it doesn’t, with respect to commercial land. Then the minister hews out of that, by way of a sub-amendment, so to speak, certain kinds of commercial property; namely, apartment houses. And then out of that there is the principle of apartment houses being used by tenants for principal residence. By the time you get down 12 or 14 lines it is an incredible snakepit; a labyrinthine coil that I could see neither head nor tail of, nor make out in any real sense.

For instance, let’s take one of the minor problems. I take it, despite the ministers move, at the end of this legislation in sections 20 and 21, to introduce a wholly-new concept called investment property -- and that, too, is a screwball effort, if I have ever seen one. But let’s just dwell upon the present piece of legerdemain. Does the minister intend to turn himself into some kind of involuted Houdini so that he really can misconstrue the profession? The minister is going to have to appoint 10 new judges to read the one clause alone.

In any event what happens if it is mixed commercial-residential, if there are stores with apartments above them? I put it to the minister that that land of property falls either in both or outside both. I am not quite sure where it falls or what stools it falls between as far as this clause is concerned. It seems to me that if one has commercial property it would be very much smarter to turn those upper stories those apartment units, into pure commercial, so that one has commercial throughout and escapes the tax completely. That would be the smart thing.

I am sure that’s not what the minister wants to do, nor what his legislation is designed to do, because again that is cutting back severely upon residential, upon where people live. One of your collateral subsidiary benefits, which is supposed to be caught in this legislation, is to provide more housing, not less and yet with a clause of that kind you are running precisely into that situation. I say to you that property used for both commercial and residential purposes is excluded from the investment property category of sections 20 and 21, and also from the exemptions for tax provided in the commercial purposes section. It is caught somewhere in between and with great difficulty is it possible to construe that.

I have another point here which bothers me. It has perhaps more to do with the principal residence concept but since that is worked into here overtly or subvertly or covertly or some “ertly” I have no idea how to handle it -- that is, the business which is partially mentioned on this particular head. What about the hiatus between the time a principal residence is achieved or held -- and may be held for many years -- and the acquiring of another principal residence or the acquiring of another residential position? Do you lose the benefit of both if there is a period in between?

The next section can be construed more strictly when people are buying homes and they have sold one and haven’t yet bought the other; or have bought one and haven’t yet sold the other. Which is which? We will come to that in due course. Those are a couple of the conundrums this section has.

Will you not consider taking this one back and setting up, I would suggest, four distinct and separate sections and dealing with the tourist concept? Do give us some kind of clue as to what is what -- everything goes over to regulations at this particular point under that particular head. We are not given any indication at all of what precisely -- or even imprecisely -- you have in mind with respect to tourist accommodation.

Secondly, say in a separate matter that the commercial is either included or excluded and what kind of commercial you have in mind. The industrial pretty well stands for itself although I think that is a terribly questionable situation. I have been given today, for instance. International Nickel’s holding lands up there. The company is selling at $5,000 to $7,500 lands it picked up for $1 an acre. Out of one acre you can make four lots and it is selling them off to people now.

That is really a subversion of the purpose of legislation. That is really a piece of speculation which is not pretended to be covered by your legislation. That is where some of the real speculation lies in this particular area.

There is so much wrong that one has to bow your head to the breeze and like a sheep turn your back and try to get away from the wind because the tornado blows hard on this side of the House on this legislation. Sometimes I feel I am going to be carried away.

Mr. Renwick: I am glad the member for Armourdale (Mr. Carton) is here to help us with this clause.

Mr. Lawlor: In any event, I want the commercial set up separately; the industrial designated and set up separately; then we can go on to apartment houses and deal with the issue. Basically, as far as I am concerned, you have set them up except for the business of the concept of principal residence being worked into that. That must be segregated and must be clarified and instead of the swampy pool we have in front of us, something has to be clarified. Legislation, particularly tax legislation, should be as clear as your draftsmen can make it instead of being as muddied as in some wild dream overnight.

Mr. Chairman: The member for York-Forest Hill

Mr. P. G. Givens (York-Forest Hill): Mr. Chairman, I would like to speak on this amendment introduced by my friend from St. George. Probably not much thought has been given to it and I think this will definitely improve the bill. It isn’t merely a theoretical thing because I have gone through it myself and the member and I have discussed it.

Mr. Renwick: That makes it non-theoretical?

Mr. Givens: That makes it non-theoretical because our discussions were based on real things which happened to both of us, involving real people. The change of status which takes place from the time a person who lives in his home has to go into this kind of institution, can be very traumatic, can be very shifting, can take a very long period of time. One cannot ascribe an arbitrary time period of even six months or a year; because it could take a year, it could take two years.

There are shifting degrees of status. A person can move from his home into a nursing home; from his home into a hospital; from the hospital into the home; and then back to the hospital. These things do happen. People at that age fall, they have accidents; and it could be catastrophic if --

Mr. F. A. Burr (Sandwich-Riverside): Or into a relative’s home.

Mr. Givens: Or into a relative’s home. And this thing could be catastrophic for a person found in the midst of this changing of status, which is of a shifting nature. Because it is often surprising how long it takes for a person to adapt himself to the idea of after having lived in his own home for decades, suddenly to have to make a change to a public institution. This is something that really shakes them up. They don’t want to cut the cord they have with die past.

The idea of having to reconcile themselves to this irreconcilable, final act of cutting this cord can be very traumatic and can be very final, and can shake one up very badly. I have seen this happen. It can be catastrophic and could be in the case of the present wording. The person could find that it is no longer his place of residence, after he has already made his adjustment to go into this kind of institution that my friend envisages. He then finds he has to run back to home base, so to speak, because of further changes of circumstances which have taken place; something beyond his control.

So this is not merely theoretical; it is not merely a figment of one’s imagination. This is a thing that happens day after day. I would appeal to the minister for what’s involved here. It is very serious from the human standpoint, but it is not very serious from a speculative standpoint, because I don’t imagine that the frequency with which something like this happens will affect the rate of speculation to any great degree. But it does affect the happiness and the well-being of individuals, of human beings that are involved. Because of that I think that the minister should make this change. And I appeal to him to make this change because of the human aspects of the problems that are involved in this case. It will really not affect the bill that much from the standpoint of the root problem that he is trying to get at.

Hon. Mr. Meen: Mr. Chairman, one of the difficulties would be that incorporating something like this, for which I have some sympathy, as other members doubtless also do, would be that we would be injecting into the heart of this section, which deals with the use to which property is put, a reference to the category of an owner of property. So, for one thing, it is not appropriate in (d). I think what we would wind up doing, if we were to do this, would be to restructure (d), (e) and (f) and a few of the others, perhaps with some justification, as suggested by some hon. members, to break them down in their various categories and maybe make it easier to follow. These sections are not impossible to read. They have been drafted by a very competent tax expert, I can tell the members, and I would feel reluctant, indeed --

Mr. M. Cassidy (Ottawa Centre): So competent he didn’t see them until an hour before the bill was introduced.

Mr. Lawlor: He must have had a field day; a state of high ecstasy.

Mr. Cassidy: Did the minister choose him personally?

Hon. Mr. Meen: I would be reluctant, indeed, to accept this amendment in this form, because it is clearly not appropriate. We could have in the regulations -- in which we will be defining tourist resorts, for example -- we could also have a form of definition of what constitutes a principal residence. It might just be possible -- and I’d like to do this if we could -- to incorporate some kind of provision for the owner of a principal residence. When he or she is required to move into a nursing home, either on a temporary or even on a permanent basis, I would like to have some provision that would take care of that situation. I don’t think we can tailor it on such short notice to fit along the lines suggested by the hon. member for St. George. I would like to be able to pick up all the problems and all the situations with respect to nursing homes and perhaps extended periods of time in hospitals.

And so you do wind up with, I think, a more elaborate situation to deal with when one directs attention to this area of concern -- and it is of concern to me too -- than I think we can really envisage on this short notice. Although I sympathize with the hon. member and with the points made, with some reluctance I think I would have to say I’d rather not put it in here; but bear it in mind when I am preparing the regulations and see if I can incorporate it at that time.

Mr. Breithaupt: The difficulty, of course, Mr. Chairman, is that the regulations are things which do not come before us in the ordinary give-and-take and development of discussion as we have within the committee and when we deal with a bill like this. This is an amendment which I think is worthy of particular merit. The member for Lakeshore has commented upon the fact that this subsection includes four particular items which have been put together not because they are alike but rather that this may be a convenient place in which the minister hopes to deal with these particular areas.

When the minister is dealing with the matter of principal residence then of course a clear definition of that term is needed. The matter of principal residence, as has been set out by my colleagues and by the members of the New Democratic Party as well, has shown to us I think that there are going to be examples, many of which we are aware of at the present time, that are going to cause the minister great consternation when he attempts to decide whether in fact a tax is to be exigible or not.

We have had the example mentioned of a person in hospital who might return home briefly, perhaps then go to a nursing home, perhaps then go to a relative’s home and perhaps then have to decide that the matter of principal residence is certainly not going to be the home which the person left originally, no matter where else it might be. The fact then that this property is to be disposed of may attract taxation. If a person has as the only major asset of his or her older years the home that had been the principal residence, then in fact we may find ourselves in a position of taxing away a value that has been a hedge against inflation for a person who really can not cope otherwise with having any source of capital to give hopefully a somewhat easier last few years of life.

The member for St. George has carefully worked out this amendment. I think the provisions of the amendment tend to alleviate a problem with which we are familiar and with which I think we all sympathize.

I would hope that the minister would reconsider the acceptability of this amendment. Indeed, the subsection could be passed as we go on and this matter could be discussed further, because I am certain that we will be spending a day or so more on the debate as these various points are considered.

I think that the amendment is worthy of further consideration and I hope that the minister would not leave it only to the regulations in which matters such as this can be developed. I think it is important that something like this -- which affects to a degree the principle of the bill -- be brought before the House where we may see it and discuss it and where we may have some impact upon the decisions before they are made.

Mr. Chairman: The member for Prince Edward-Lennox.

Mr. J. A. Taylor (Prince Edward-Lennox): Thank you, Mr. Chairman.

I must say that I am very sympathetic to the amendment of the member for St. George. However, it touches on just a part of the overall problem. What frightens me is the openness of this subsection and the amount of discretion which is left to the minister, either directly or through regulation. For example, my riding is very tourist-oriented and recreation-oriented. I would like to have some inkling of what type of tourist resort might be excluded from the provisions of this section.

We are concerned, certainly in the rural areas, about the entire impact of the legislation on just about every class of landowner there is. I know that the Act really doesn’t tax people, it taxes land. Really, it is a tax on designated types of land and of course that does impress the land with a lien. When does this arise? When do you call our tourist operators speculators? When do you call our little people, who have all of their life savings in their homes, speculators? When do you call our farmers -- who have century-old homes, who have passed their property from generation to generation -- speculators? The land values haven’t nearly caught up with the land values rampant in Metropolitan Toronto which prompted this legislation to be introduced. We feel we’re being caught in this type of legislation and, in particular, this particular clause when there’s no justification whatsoever and it really doesn’t solve the basic reason for the legislation.

We’re certainly in favour of the concept, the philosophy, of the legislation to tax the speculator, in the common sense of the word which we understand so well, in the exploding metropolitan areas. But how does this affect the tourist operators in my area?

Further along in the section, I would like an explanation of the application of this section to the subdivision of land where the servicing costs don’t exceed 40 per cent of the proceeds of the disposition. I’m not quite sure how that is meant. Does that include the imposts in the form of cash levies? For example, you don’t have to go very far from these chambers to determine some of the principal causes for escalating land values. In Oshawa, for example, the cash impost is $2,000 per lot which is probably 10 per cent of the value of your property which is imposed at the municipal level. That’s only one impost.

If we’re trying to get at keeping the price of housing down or keeping inflation down I think the thrust of the legislation is not directed in the right place. It may very well be that it should be administered at the local level. Maybe it’s something that should be done at the subdivision and development level rather than at this level where we cast a net so wide that it traps all the innocent people, the little people, the weak people in Ontario who have no cause to be caught by this legislation.

This is what concerns me and this particular clause (d) is so loose I’m afraid we just don’t understand where we stand. Maybe the minister could explain which tourist operators will be exempt. Maybe he could explain the type of apartment buildings which will be exempt.

For example, my principal residence is in Northport, in my riding. I have a residence in an apartment here while the House is sitting. I suppose an apartment building which accommodates people such as we who have apartments in town while the House is sitting is not one which would be caught by this legislation. But if you have other types of tenants in that building, it would be caught by this legislation. This is something I’m not clear on. Possibly the minister could comment on some of these matters.

Mr. Renwick: Mr. Chairman, if I may. I have great difficulty with the clause and I don’t want to make any extended remarks; I simply want to ask the minister to let us analyse the clause step by step so we can try to get some understanding of what it’s about.

Mr. Breithaupt: Let’s parse it.

Mr. Renwick: Parsing; that’s the word. I know the member for Armourdale will join in to assist in an understanding of this bill.

I take it that what we are first talking about is designated land which, at the time of its disposition, is predominantly used as a tourist resort of a class, kind or designation prescribed by the minister by regulation. I take it that’s the first definition of the kind of land which is to be exempt? If that is correct it seems to me the key words are “predominantly used as a tourist resort.” I suppose that’s a factual matter but I’d like to have the minister express to me what “predominantly used as a tourist resort” means. Then I would like him to ask the kind of question the member for Prince Edward-Lennox was asking. What is the class, land or designation which you propose to prescribe by regulation of land which is predominantly used as a tourist resort?

Could you answer those questions? Then perhaps we can go on to other areas.

Hon. Mr. Meen: I don’t have the proposed regulation before me. The Minister of Industry and Tourism (Mr. Bennett) has established a definition for a tourist establishment. I think our intention in the use of the words “predominantly used as a tourist resort of a class, kind,” and so on was simply to make it clear that it was the tourist resort that we would propose to exclude and not other structures and uses such as cottage properties. If someone has one or two cabins associated with his main lodge, as a main cabin, for example, that would not automatically fall under the definition of what was predominantly a tourist resort.

I think one would look at the activities. For example, do they have tourist guides available? Do they operate a dining room in conjunction with the operation? Do they have eating facilities throughout? There are all kinds of ways in which one can look at these things.

As I mentioned, the Ministry of Industry of Tourism has worked up a definition. I regret I don’t have it. It might have been of some assistance to hon. members; but we had expected when time permits -- very swiftly in fact -- to get on to the matter of die regulation defining tourist resorts and we would do so in conjunction with the Ministry of Industry and Tourism as they are the ones with the expertise in that area.

The member for Prince Edward-Lennox also raised the question of apartment houses.

Mr. Renwick: Mr. Chairman, in the interests of orderly discussion would the minister stay with the tourist business for the time being, if that is agreeable to the member for Prince Edward-Lennox.

Hon. Mr. Meen: I’d be happy to do that.

Mr. Breithaupt: Mr. Chairman, could the minister send for that definition? It might be helpful’ to us.

Mr. Renwick: I am really rather concerned when you speak about that you think your colleague has worked up some kind of a definition of tourist operations. I don’t think we can afford the minister the luxury of that kind of indefiniteness about his bill. Let me ask him a related question.

Mr. Cassidy: He speaks with his usual precision.

Mr. Renwick: Do you anticipate that a person who has land which is used for something called tourist purposes and can come to you as the minister and get a ruling from you, that, yes, for the purposes of this Act you determine that it is predominantly used as a tourist resort? Do you intend to give that kind of assistance to a taxpayer?

Hon. Mr. Meen: There are several courses of action open to an individual taxpayer, Mr. Chairman. I would not anticipate that as being the sort of thing, though, that would come to the minister. Once we have defined a tourist establishment, if he falls clearly within that definition, then I don’t think he would be coming to the ministry seeking a ruling.

Mr. Renwick: How do you define it?

Hon. Mr. Meen: On the other hand, if he is in some doubt as to whether he falls within the definition of tourist establishment as established by the regulation, then he might very well come to the ministry asking for an interpretation.

Mr. Breithaupt: Mr. Chairman, perhaps since I note that there is not a quorum present, we could have the minister send for the definition while we are having the count.

Mr. Singer: That would be a good idea.

Clerk of the House: Mr. Chairman, there are 17 members present.

The chairman ordered the bells to be rung for four minutes.

Clerk of the House: Mr. Chairman, there is a quorum present.

Mr. Chairman: Will the hon. member for Kitchener proceed, please?

Mr. Breithaupt: Yes, Mr. Chairman. I had just suggested that it might be practical for us to obtain from the Ministry of Industry and Tourism the definition that the minister plans to use when the regulations are going to be designed.

In subsection (d), if we are first of all to know what is meant by “tourist resort of a class, kind or designation prescribed by the minister by regulation,” then I suppose we will be able to decide where we are to go when persons come to us and say, “Do I have a tourist resort or do I not?”

The minister has suggested that it might depend upon accommodation or whether there are dining facilities. But if we do not have a definition, one can contemplate that as soon as this section is passed, there will either be an awful lot of dining rooms built or an awful lot of dining rooms will be torn down. Surely we should know just what is to be the case.

I would hope that the minister could follow up on the comments of the member for Riverdale and provide us with a definition that is to be used, so we all know.

Hon. Mr. Meen: Mr. Chairman, if we had been able to provide the definition, I think we would have incorporated it into the Act in the first place. The point is that a number of these have to be worked out --

Mr. Renwick: How can you say that?

Hon. Mr. Meen: I have a copy of Regulation 219, under the then Department of Tourism and Information, which is essentially what is in effect today. I believe there have been a number of minor amendments to it since that time, but it goes into some elaboration as to defining such things as a cabin establishment, a camping establishment, a cottage establishment, a hotel, a motel or motor hotel, an outpost establishment, a resort -- and perhaps hon. members would like me to read that one to them -- a tourist home, a tourist outfitters’ establishment and tourist establishments under various classifications.

One of the difficulties, I am advised, is that this regulation doesn’t cover all tourist homes. Those that have licensed premises for beverage purposes fall, I gather, under the Ministry of Consumer and Commercial Relations and not under the Ministry of Industry and Tourism.

So this, you might say, would be the background to our preparation of a regulation that would define a tourist establishment for the purpose of land speculation, where it might not necessarily fit with the views of the Ministry of Industry and Tourism when it comes to identifying a tourist establishment for the purposes of their Act, or with those of the Ministry of Consumer and Commercial Relations when it comes to identifying a tourist establishment for the purposes of licensing under the Liquor Licence Act; then the other requirements would be imposed, which I gather are more stringent. Consequently, that is the reason for the regulation being shifted to that ministry.

But, in short, this is the start from which we would work in developing a body of regulations to properly define what constitutes a tourist establishment, which would be exempt under this Act, without creating, in the course of doing it, all kinds of loopholes through which you could drive a Mack truck and thereby let out of the net those investments which we think would properly fall within the purview and intent of the Land Speculation Tax Act. Therefore, that is about all I can tell the hon. members at the moment. The authority is in the section to prescribe these by regulation -- and that is what we will be doing.

Mr. Breithaupt: It does seem rather curious to us to have the minister say, “If we could define ‘tourist resort’ we would do so.” If the minister at this point -- now six weeks after the budget -- cannot come up with a definition of the kinds of areas that are either to be taxed or excluded from tax, how can we possibly deal with this kind of legislation? Surely we must know the basic ground rules -- the rules of the game the minister referred to earlier -- that the tourist operators of the province will have to know and deal with? It may be, of course, that because of licensed premises under the Liquor Licence Act, there will be different criteria for the development of those kinds of establishments required by the Ministry of Consumer and Commercial Relations.

We, of course, have a very general term before us; a tourist resort of a class yet to be designated. Does the minister believe that we should pass this kind of legislation now without the knowledge of the definition that he is going to use to decide upon whether these premises will be taxable or not?

Mr. Renwick: And there is a further problem that bothers me, and that is the question of whether the minister is contemplating some form of partition operation with an appropriate apportionate proration of the proceeds of the disposition for tax purposes. Perhaps I could put it somewhat more clearly. You have to look at the land and you have to say to yourself: “ls that land predominantly used for tourist purposes?” But if it is part of a large parcel of land, are you going to say: “This part can be sold free of the tax, but the other part, if it is sold as a whole block, will attract the tax?” And who is going to determine the metes and bounds description of that portion of the land which is predominantly used for tourist purposes? I would like the minister to direct his attention to that problem.

Hon. Mr. Meen: That is wrapped up in the same question the member raised earlier; the “predominantly used” part. I think that is one of the problems we face in trying to identify what constitutes a tourist establishment. A man might own 200 acres fronting on a lake -- just to try and pick an illustration out of the air -- and operate a tourist establishment at the lakeshore and perhaps back for 500 or 600 ft, with cabins and the like; and then, for whatever reason, be speculating on the balance of his 200-acre parcel. And that is the kind --

Mr. Renwick: Well, he may have nature trails at the back part of his property; is that predominantly used for tourist purposes? He might have a pond in the back part.

Hon. Mr. Meen: If that were for fishing, perhaps, yes.

Mr. Renwick: Or a putting green.

Hon. Mr. Meen: I think one would want to look at the whole of the operation, the establishment, the use to which the acreage was put. This is the difficulty one finds in trying; to spell this out in a precise definition in an Act. We haven’t been able to establish as yet precise definitions that would fit that; but the member can see the kind of problem with which we will have to wrestle.

Mr. Renwick: We certainly see the problems, that’s not our --

Mr. Chairman: The hon. member for Prince Edward-Lennox.

Mr. Taylor: Mr. Chairman, I have a very practical question. The statute, as I understand it, impresses the land with a lien. That being so, the lien may be meaningful, or it may not, in terms of dollars. In other words, it may in theory not attract any taxation, or it may attract a large number of dollars in terms of taxes. But nevertheless that lien is there, which means that it is a cloud on the title. Now, who determines what that lien represents or translates in terms of dollars if we don’t have someone who can rule on it? In other words, if one of my tourist operators sells his premises, he is not sure whether he is a tourist operator or not until the regulations come out. What mechanically is the process now whereby he can complete his transaction and get a decision? We haven’t got the regulations yet.

Mr. Singer: Good question. Better not put that money in your trust fund either if you have any doubt in your minds.

Mr. Taylor: So what is the answer there? And I’m not talking, Mr. Singer, in terms of this problem in a personal sense. As I explained earlier, I have a great number of people in my riding who are in the tourist business and we have a turnover in the tourist operations.

Mr. Renwick: That is a time and space problem.

Mr. Taylor: I don’t have the time for that. But, I would like to know how this matter is resolved when there aren’t any regulations.

Hon. Mr. Meen: The matter can be resolved even in the face of regulations. For that matter, the Act isn’t law either, but the lien still potentially applies. What we are planning on doing, of course, is to have a mechanism where the proposed vendor can make application to the ministry for a ruling on the amount of tax that would be payable. And that will depend on whether he was exempted or not. If he was not exempted, then what was the price on April 9, or his acquisition price, if he acquired it after that time, as defined in the Act, and then his sale price? We can give that ruling.

We would hope to have a turnaround time sufficiently short that it could be accommodated within the normal period of time for the sale of the property so that he would know where he stood.

Mr. Taylor: So I presume there shouldn’t be any negotiations until that matter is clear because there could be no meaningful contract unless he knew what the tax might be.

Mrs. Campbell: Mr. Chairman --

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

Mr. Renwick: A person would be a fool to sell a tourist establishment today in Ontario.

Mrs. Campbell: I wonder if once again I might not appeal to the minister in the light of all of the discussion concerning this subsection, to stand it down and to come back to it with a breakdown of the various portions of it as suggested so ably by the member for Lakeshore?

My problem is very much this. The minister is quite aware of the fact that I have supported the principle of this bill all the way through. But when we come to this kind of a section, when the minister himself at this point cannot tell us anything of the criteria that would go into establishing the class, kind or designation; when again you have the matter of the principal residence raised in the section with no provision at all to assist those in the category to which I have referred, surely these people are as entitled to have the matter properly -- I say it with respect -- properly thought out, as do, for example, the farmers whose case has given great concern to this entire House?

There is no question in my mind at this point -- and I am not a tax lawyer and never was -- that as this stands, it is neither clear nor unequivocal, and that there can be really no harm done if the minister were to stand it down and bring it back to us with the rethinking to which his direction has been invited.

Certainly, so far as I am concerned, unless and until some of these people who could by no stretch of the imagination be deemed be speculators are protected and exempted, I personally do not feel that I can support this particular section. That is a personal position that I am taking but, good night, it is exactly what we have said from the start. We are letting the barracudas slip out on the effects of this legislation and catching all the minnows. And I, for one, am not prepared to continue my support unless some recognition is given in this section.

Mr. Cassidy: Are you going to reconsider your support of the bill?

Mrs. Campbell: I have made my position clear. I have supported the principle. I am now asking the minister to please take this back --

Mr. Singer: You can’t even bring the rest of your NDP caucus along with one mind on it.

Mrs. Campbell: -- and rethink it or restate it.

Mr. Cassidy: Would you support the bill on second reading?

Mr. Singer: Come on!

Mr. Chairman: Order, please. The member for Riverdale.

Mr. Renwick: Would the minister also address his mind to the time problem for the use of a particular piece of land? If it is used only for a portion of the year for tourist purposes, is that a determining factor as well?

Hon. Mr. Meen: I think it has to be, Mr. Chairman. I think that has to be one of the factors one would be looking at when dealing with that regulation.

Mr. Renwick: I think you have a three-dimensional problem of immense proportions. Yes, I think it is like an isosceles triangle. I think it is impossible for you to impose this kind of tax on the people of the Province of Ontario. There is no way, just on this one particular classification, that anybody today would dare to deal in land.

Mr. Breithaupt: Certainly, Mr. Chairman, no one would dare to deal with a tourist resort because the details as to what could be logically included in or excluded from the definition are not clearly before us.

In this kind of a tax statute it is simply not good enough that an item is submitted which will allow regulation to conduct the rules upon which the tax will or will not be exigible. I would feel, as we have earlier stated, that the matter of a tourist resort is a most important one within the province. Certainly, many of the members in this Legislature have these resorts and establishments within their communities and they perform and fulfil a great need within our society.

It is simply not enough, though, to say we are going to define it on the basis of whether they have a couple of tourist cabins beside a lodge or whether the parties who own it live within the property. It is not enough to define it solely on the basis of whether there are dining facilities. We have got to have something more to go on. If we are dealing with a tax statute we must have a clear definition of the kind of area you hope to exempt from the application of this tax.

We don’t have this kind of definition. I think it is deficient in the minister to bring forward this kind of a situation now with the admission that if we could define it we would do so. That’s just not good enough.

An hon. member: It sure isn’t.

Mr. Renwick: Mr. Chairman, the thing which comes through, and the remark which the member for Prince Edward-Lennox made emphasizes this to me in all its starkness, is you are really going to let the big fellow get away and the little guy is going to get hooked on this bill as a tourist operator.

Mr. Cassidy: That’s right.

Mr. Renwick: If you take the kind of tourist operation formerly operated, I believe, by the now Minister of Health, for example -- a fairly elaborate tourist operation with year-round facilities, trails of one kind or another for either walking or snowmobiling or skiing or any kind of particular activity which may go on in such a resort -- presumably the whole of that property is predominantly used for tourist purposes because presumably people go there because of the extent of the facilities which are available.

But if you take -- I don’t know of any specific example but I assume I could find one in Prince Edward-Lennox very readily; I won’t find many in --

Mr. Taylor: Riverdale?

Mr. Renwick: Riverdale? Not likely.

Mr. Cassidy: A few health spas, maybe.

Mr. Renwick: Not likely; it is mainly agricultural.

Mr. Singer: Which crops do you have?

Mr. Renwick: We will get to it when we get to clause (h); we deal with that.

Mr. Lawlor: There is a fishing village on the Don.

Mr. Renwick: There must be an immense number of small operators who use their property for mixed purposes, one of which purposes is for tourist purposes. Perhaps it is their cash income and they use it for -- what? -- they open it up in the early part of the year and they close it down in September or early October and that’s it. Now is that land predominantly used for tourist purposes?

Mrs. Campbell: He doesn’t know.

Mr. Renwick: Would the minister read into the record at least, in case anybody such as the tax foundation, has sufficient interest in this debate to look at it? Would the minister read into the record verbatim even the sketchy definitions that he was able to get from his colleagues’ ministries so that we can get some idea of the ambit of the clause?

Hon. Mr. Meen: Mr. Chairman, without abusing Hansard on that --

Mr. Renwick: It is not abusing Hansard.

Hon. Mr. Meen: Well, I think it is and I think it would be simpler to repeat that it is Regulation 219 of the Ministry of Industry and Tourism. The tax experts can look at this for themselves if they wish, or hon. members can take a look in their copies of the regulations --

Mr. Renwick: Can’t we have a look at it? Can we stand it down while we Xerox some copies?

Hon. Mr. Meen: But, as I have indicated this would just be the starter. We would want to get down to possibly some other definitions.

As the hon. member was asking, what about time? Suppose a fellow just operates an establishment for a month each year; now, is he a tourist operator? I would question that, and so I’d suggest that the time has something to do with it. But, if he operates through a total summer recreational period of June through September and perhaps closes at that point --

Mr. Singer: Suppose he starts July 1, which a lot of them do?

Hon. Mr. Meen: -- and many legitimate tourist operators today do not have insulated buildings. They don’t have a water system that can operate through the winter months, so that it would be impractical and unfair to rule out many of those as legitimate tourist establishments.

There are others, and there are more of them all the time, building establishments that are winterized and capable of accommodating the skiing and snowmobiling enthusiasts during the winter months, as well, keeping our northland open. And they might be the ones who don’t operate through the summer. So, we can’t always take a calendar period of time. We might want to look at a period of time within any particular 12 months or something of that sort.

So, these are all ways in which we must investigate these, with the help of my colleague, the Minister of Industry and Tourism and others, to come up with a suitable definition. But, I say with respect, Mr. Chairman, that it certainly is not our intention to let the barracuda get away and catch the minnow.

Mrs. Campbell: It has all through the bill.

Hon. Mr. Meen: Albeit, the full-time operator who has summer and winter facilities and is clearly a tourist operator is not going to be worried because it will be clear to all and sundry that he is a legitimate tourist operator. It would be the smaller operators whom we would want to have designations that were appropriate So they would not be discriminated against.

On the other hand, we would not permit the person who was not a legitimate operator and who simply purported to operate under the guise, of tourist operator for a month in say, the summer, to fall under our definition of a tourist operator and thereby escape any tax. He would be one of those whom I think we would be interested in controlling in some fashion.

Mr. Renwick: Do I take it that one of the essential ingredients of whatever definition the minister comes up with is related to accommodation?

Hon. Mr. Meen: My thinking has gone that far. Accommodation has to be one, yet one would wonder about services provided by some of the northern camps where they have guides and there isn’t any particular accommodation. The guides may be operated as a very significant part of the function of the tourist camp. Nevertheless, I would think that accommodation is in some fashion related to the identification of the tourist operator.

Mr. Renwick: If my colleague will just let me just pursue that a little bit. Is an outfitting store predominantly used for tourist purposes?

Hon. Mr. Meen: I don t think it would be. I was just thinking off the top of my head on that one.

Mr. Renwick: As a tourist resort?

Hon. Mr. Meen: There is one on the Lake of Two Rivers where you can go in and buy everything from your camp stove to your tent to canoe and paddles and lifejackets and the rest of it, plus maps and guides, I suppose, and everything else. But, that kind of operation would be a merchant, I would think, or a commercial operator and would fall under that category rather than under the tourist operator.

Mr. Singer: That’s commercial.

Mrs. Campbell: That would be commercial.

Mr. Chairman: The hon. member for Prince Edward-Lennox.

Mr. Taylor: Mr. Chairman, continuing in the spirit of trying to be helpful, I would ask the minister to take into consideration the farm vacation programme, which is encouraged through the Ministry of Agriculture and Food. Here, city dwellers are encouraged to spend vacations on farms and in that way they supplement the farm income. The farmers, I presume, may or may not be tourist operators for a certain portion of the year. As I say, I don’t know how that would translate in terms of the regulations, but I think that programme should be taken into consideration in drafting regulations.

Mr. Chairman: The hon. member for Downsview.

Mr. Singer: Mr. Chairman, the longer we get into it, the more puzzled I get. Take the case of an exclusive fishing resort which makes available fishing rights, say for salmon, for a limited period of the year only. You can catch salmon for a few weeks. They are entirely tourist resorts and that’s all they are open for. I think there is something that the government of Ontario has -- I suppose it is in private hands -- up around Hudson Bay where you can go and fly in and shoot ducks for a few weeks in the year. There is another place where you can hunt polar bears under a licence.

Mr. Taylor: Polar Bear Lodge.

Mr. Singer: I don’t know how long the polar bear season is, but surely to goodness we have to get some kind of specific definition in the taxing statute before we move on. We can’t leave these things to arbitrary regulation over which the House has lost control once this section goes through. It doesn’t make any sense.

Let me switch around just for a moment. Is it fair for me to conclude, since we are now talking about tourist resorts, that we have adopted the suggestion of the hon. member for Lakeshore and we are going to break this section down into its various parts so that they could be dealt with separately and be meaningful separately? Or does the minister believe that in debating this section he has to deal with each individual part of it? If we do have to deal with it as a whole, then I want to say something about the effect of this exemption for services in a serviced piece of land. If that does not allow for an exemption, then the minister is defeating very substantially the thought of putting serviced land on to the market in order to build more houses. If you can’t bring the cost of services into this 40 per cent figure, which seems to be what the last few lines of the section say, what sense does that make?

I am thinking particularly of the piece of land in which I know someone is interested and who, hopefully is going to develop it. One of the big development problems is going to be the supplying at the municipality’s request of a very, very expensive storm sewer. The storm sewer, apparently, is going to cost something over $1 million. If that gets along and the services are put in -- the storm sewer, sanitary sewer and water connections, roads and all of the other services that subdivision agreements provide -- and the subdivision is registered and those lots are then available, and a large, large sum of money has been made available in order to bring that land from its raw state into a productive state, does it make any sense that this is not included as part of the exemption? Why should there be a specific exclusion? I lose the minister when he comes down to these things.

Mr. Cassidy: The minister was lost long ago.

Mr. Singer: With regard to servicing the designated land, here we are, “or capital improvements, excluding any costs or value attributable to subdividing and servicing the designated land.” Why is that an exclusion? Why should it be an exclusion? The desire of the statute, as I listen to the Treasurer (Mr. White) and as I listen to this minister, is to make houses available. If all of this cost has gone into subdivision development and it has made raw land available as building land, why should those costs be excluded? If they are a few dollars or a fractional percentage, yes, but where the expenses are very, very substantial, and they can be -- and I gave you the illustration of one particular piece of land that I am familiar with where the cost of a storm sewer is going to run in excess of $1 million -- why shouldn’t that expenditure be allowable in order to claim an exemption, because the object of that expenditure is to make land available for building? I don’t understand the minister at all, and I hope he will take the suggestion made a little earlier, first by the member for Lakeshore, and break this section down into a number of subsections. Then we can deal with each one separately and we can see the full ramifications of it.

There is another little aside on the way by. Looking at the amendment put by my colleague from St. George, where she wants to exempt people who are residents in hospitals, nursing homes, senior citizens’ residences or other institutions under the Charitable Institutions Act, I suppose the minister is familiar with what happens to someone who is in an Ontario Hospital and with the role that the Public Trustee then plays by statute. The Public Trustee then becomes responsible for that person’s property and is charged with looking after it, selling it if necessary. It is no longer a principal residence and if the Public Trustee, with his duties and responsibilities under the various statutes which control him, goes out and sells a piece of property, which is not a principal residence belonging to a person who is an inhabitant of an Ontario Hospital, I would think that the tax is not exempt in this case either. If somebody finds himself in that position and the Public Trustee moves in and sells, as he has a duty to do, is the tax payable, then? There doesn’t seem to be any exemption. I would presume it is, because it is no longer a principal residence.

I just am unhappy with the way this statute has been brought before us. It doesn’t spell out these various matters. Each one of them is going to have to involve an individual argument unless the minister is going to try and con us into believing that the first of the regulatory clauses gives him the general power to exempt from tax anything that he at that moment thinks is unfair.

Under section 22(2)(a) he can exempt anything he wants at any time and for any reason. That is no way to run a taxing statute.

Surely, as several members have made the point about this particular section earlier this afternoon, the government should take this statute back, break it down into its sub parts, deal with every sub part and let us at least express our views on every one. I think, perhaps, the message will get through to the minister when the House will divide on every sub part instead of on just this one section. In relation to every different thought contained in this section before us, this statute is just inadequate. It isn’t a taxing statute. It isn’t finite. It isn’t definitive. It isn’t clear. It is begging for trouble.

Mr. Chairman: The hon. member for Ottawa Centre has indicated he wants to speak.

Mr. Cassidy: Thank you, Mr. Chairman, I will take the opportunity. Something is emerging very clearly since the start of this debate. The government, as we all know, wanted a piece of flim-flam. The NDP had suggested that in this section, and in other sections that either the law be made tough enough to stop speculation, or you may as well not have it. We can see the contorted writhings of the Liberal Party which is doing its best to wiggle out of the commitment it made on the second reading, because as far as I can see, it intends now to do another flip-flop and may well wind up voting the other way on the bill --

Interjections by hon. members.

Mr. Cassidy: The performance of the members for St. George and Downsview is clear evidence of that.

Mrs. Campbell: Stop that.

Mr. Singer: Why don’t you worry about yourself?

Mr. Cassidy: And the Liberal Party, with this belief of theirs in the free market, or whatever it is, believes in this tax even less than the government does, I would suggest.

The inequities of this particular clause, Mr. Chairman, are so gross, as we have been saying during the course of the debate, people have been talking --

Mr. Singer: Whatever happened to most of the NDP caucus on second reading?

Mr. Cassidy: What’s that?

Mr. Singer: Whatever happened to half of the NDP caucus on second reading?

Mr. Chairman: Order, please.

Mr. Cassidy: Most of us spoke about it, if you will look at the record.

Mr. Singer: I know, but you were away that day, that’s --

Mr. Chairman: Will you return to comments on section (b)?

Mr. Cassidy: On this particular section, Mr. Chairman --

Mr. Singer: Yes, sure, you didn’t like what the leader decided.

Mrs. Campbell: Self righteousness.

Mr. Cassidy: Let’s just look at this particular section which is being proposed by the government. Is the Liberal Party going to support this section, then? I don’t know what you are going to do about it. Does the Liberal Party support the exemptions for commercial and industrial property?

Interjections by hon. members.

Mr. Chairman: Order, please.

Mr. Cassidy: Or does the Liberal Party believe that people should be taxed on their speculative gains tax but that corporations should be exempt? Because that is the effect of this particular section.

Mr. Taylor: You are all mixed up.

Mr. Cassidy: No, I am not mixed up. It says very clearly that any industrial property --

Mr. Chairman: Order, please. Will the member for Ottawa Centre direct his comments to the Chair on section (b) -- through the Chair to the minister?

Mr. Cassidy: Mr. Chairman, I have been speaking to you right through, and as a matter of fact --

Mr. Lawlor: It is as if you were the only one present, sir.

Mr. Cassidy: No, there are several points I want to make about this.

Mr. Singer: You usually ride right through and miss the point.

Mr. Cassidy: We have spoken about the barracudas and the little fish, and the first point that was raised was about tourist operators. I would point out to the minister that if he is in the business of making exemptions -- and I wish he weren’t, because I don’t think this section is supportable -- but the people around the Province of Ontario who run camping operations as a means of making a summer income and contributing to the good health and good recreation on the part of the people in the province will not be permitted the exemptions given under this Act to the Frank Millers and the other proprietors of tourist lodges, because clearly they do not have 40 per cent of the value of their property invested in buildings or capital improvements that exclude subdivision and servicing.

What investment they put into their campsites, if in fact there is any, is in what one might call subdividing and servicing. They put in a road to get to the site. They put in water. They may put in sewage facilities for the big trailers and that kind of thing. But there are, by definition, few or no structures on a commercial campground, and yet that is going to be covered by this particular tax. Well, Frank Miller’s lodge will not be covered.

Secondly, in my particular riding of Ottawa Centre -- I’m sure this is the case in other ridings as well -- there are, according to municipal zoning, large residential areas that are zoned for use for offices as well. And there are houses there inhabited by people which, according to the zoning and without municipal permission or without going before the Ontario Municipal Board, can be turned into offices, warehouses and a number of other commercial or small industrial uses.

It is clear that anybody who wants to speculate in that kind of property simply has to have some kind of a floating industrial-commercial operation. And when they buy a house for speculative purposes, or if they have a house that has now come under the Act, then a few months before they are prepared to sell, they should put in an office there -- maybe even give it to some charitable organization, to a LIP project or something like that, for use as an office for a few months until they are prepared to sell. Or maybe they can give it to a small industrial concern, a tailor’s operation, a leather-working operation, somebody who is in the business of making repairs or something like that. It can be easily done. The tax can be evaded. Then you go back to using the house for residential purposes. That apparently is permitted under this particular Act.

If it’s a large tract of land that is currently used for commercial or industrial purposes, nothing will be done.

If it’s land owned by Inco, which was bought for $1 an acre and is now being sold for $50,000 or more an acre, as was raised by the member for Scarborough West (Mr. Lewis) during the question period, that won’t be covered.

If it’s a very large shopping centre, where the proprietors in effect make themselves a land bank out of the parking lot, and ultimately intend to develop that land as well, that will not be covered.

If it’s a large industrial concern with hundreds of acres which it intended to hold, ostensibly for industrial purposes but which they can, and often will, very easily convert to residential purposes, which are of higher value, again that will be exempt.

And, as the minister knows, if it’s a large corporation that is developing land, that is exempt.

The charge that the small fish are affected and the barracudas are exempt is a very real one, Mr. Chairman. And it is summed up in this particular section which allows such enormous loopholes in the Act that anything else in the Act simply lacks credibility.

I would suggest to the minister that if he wants to bring in an effective kind of tax, he’s got to remove this section from the bill. Otherwise he hasn’t got a bill that will work.

Mr. Chairman: The hon. member for Kitchener.

Mr. Breithaupt: Mr. Chairman, I just wanted to follow up some of the comments of the member for Downsview with respect to the matter of the tourist resort idea.

I think, as was first suggested by the member for Riverdale, that it is worthwhile to go through this subsection in its various component parts so that we can define and deal with each of these areas as we go through the piece.

I realize that there are a number of members who may wish to make their comments generally on this subsection because they have other commitments. But I’m wondering if the minister could come to some understanding with us concerning the breaking-down of this subsection.

Would the minister, for example, be prepared to stand down this subsection so that it could be redrawn into its four component parts so that they could be dealt with and discussed generally? Or, on the other hand, does the minister feel that these four items, which are somewhat disparate, should all be dealt with in the same subsection?

Hon. Mr. Meen: Mr. Chairman, I don’t believe that any useful purpose would be served at this time by standing this down for any redrafting. Contrary to what the hon. members say, I think that subsection (d), disparate though some of the classes may be to which reference is made, is a cohesive subsection. I would draw to their attention that roughly the last half, I guess, of that subsection refers to the classes referred to in the first half of the clause.

Perhaps I would just take a moment and read the section to the hon. members and delete one clause in reference to rental residential accommodation for the purpose of the principal residence of the lessee. If you delete that little exception, I think you may find the clause reads somewhat more, easily:

When the designated land disposed of is, at the time of its disposition, predominantly used as a tourist resort of a class, kind or designation described by the minister by regulation, or for commercial or industrial purposes --

Let’s stop at that point for a moment and then go on and read the rest of it. You’ll see that is qualified. It says:

-- and if the designated land so disposed of contains buildings, structures or other capital improvements, excluding any costs or value attributable to subdividing and servicing the designated land, that have a value, at the time of disposition, equal to 40 per cent or more of the proceeds of disposition of the designated land.

At least half, if not more -- there are six or eight lines in there -- modify the preceding classes, to which I’ve made reference -- the tourist, commercial and industrial. And the industrial and commercial are qualified by the phrase I deleted for the purpose of some clarity in reading the section, namely, the reference to other than rental of apartment suites or residential accommodation. These are all without commas, so I’ll just read that again.

-- other than rental of apartment suites or residential accommodation for use as the principal residence of the lessee.

We’ve excepted that from commercial or industrial because they fall in the general commercial end. We’ve exempted that because we have now section 20 which looks after residential accommodation, or under the general term of investment.

I don’t think there’s anything to be gained by splitting that section up. I see no merit in it, if the hon. members can understand the various categories that are covered and the qualification, that under a tourist establishment also the value of the buildings, structures and capital improvements, exclusive of the cost attributable to subdividing and servicing the designated land, whatever that might be, that have a value at the time of disposition equal to 40 per cent or more of the proceeds of the disposition. That does qualify to some extent and in a very clear fashion, I think, the characteristics, at least in some measure, of a tourist resort or of a commercial or industrial operation. It couldn’t be vacant land and still qualify, for example.

Therefore, I think I’ve answered the questions placed by the hon. member for Kitchener. I think at this time the section should stand. It might be that at some time in the future, when we have some experience with the application of this section, we might want to break it down. But this, plus the regulation, should do what we’re seeking to do by way of identifying these various classes and limiting them as much as possible. We don’t want to have every single operation of any kind fall under these exemptions.

The hon. member for Ottawa Centre suggests we simply take it out. I think that would commit a gross injustice on many legitimate tourist operators. It is quite improper to consider deletion of that subsection. It is, therefore, a very good reason and I suggest it should stay there.

Mr. Cassidy: It is going to hit the little guy, while you let the big guy get through.

Hon. Mr. Meen: I come back to the suggested amendment by the hon. member for St. George. She is talking about an ownership identification when, in fact, we’re talking in this section about a use. She’s also talking of the person who owns his or her own house and moves from that to hospital or to a nursing home or whatever. Under clause (d) we’re talking about rental of apartment suites or rental of residential accommodation, if I can read that in, so she can see what Tm talking about there.

Mrs. Campbell: It could be either.

Hon. Mr. Meen: It is not appropriate then, to put anything of that sort into this subsection.

Mr. Chairman: The hon. member for Lakeshore. I am sorry, you haven’t finished.

Mr. Breithaupt: I just wanted to finish making one point, since the member for St. George’s amendment has been referred to, sir. You may be in a position, of course, where if this amendment were accepted you would protect the person who has in the meantime rented what was otherwise the principal residence to some other party, in order to maintain it while that person may be in hospital or under some extended care programme. Just the fact of rental isn’t the only criterion. Indeed it may have to be rented in order to pay for other care, or just to maintain itself, so that taxes are taken care of and there are moneys for necessary repairs and that sort of thing.

Mr. Chairman: The hon. member for Lakeshore.

Mr. Lawlor: Yes, Mr. Chairman: the somewhat pretty little speech just made by the minister bemuses in that he has conceded all the points and nevertheless taken back nothing. I put it to you, if he had to do it over again, he would certainly not bring this conglomerate before us. He would have it segmented out intelligently --

Mr. Cassidy: That’s it.

Mr. Lawlor: -- so that it would be possible to read it intelligently. But that’s as it is. There are points in debate where one hits the boundaries of despair. I hit it exactly 3½ moments ago. However, there is sufficient hope left in the human breast to mention another feature, this 40 per cent feature.

Woe betide those -- I speak Jeremiah-like -- woe betide those who invest any money in commercial land premises under this legislation, because while they may have bought land with a building structure on it at 40 per cent of its overall value, the most terrifying thing in the world can happen to them. Their land values could just possibly go up. And if in that particular area this should happen, and land values were anywhere commensurate with what they are at the Park Plaza Hotel, or in the heart of central Toronto where land values are obviously very often much higher than they are for the structures that are found on them, over the years your structure value could decline and your land value rise. Unless, with a move of the elbow and a strenuousness of effort -- almost Herculean -- you can keep that 40 per cent balance then one day you could have sold free of the tax of 50 per cent and the next day, lo and behold, you could be caught completely within the net.

And so you are forced to make capital improvements to the property so that that balance may be maintained. And second under that head, and I think it’s been mentioned before in this debate but not strenuously enough, you must bring upon your own head, and upon the head of all enterprises in the province -- commercial, industrial, or otherwise; the whole works -- an administrative and actuarial nightmare. Because as property values shift in the community and the little plant that the little guy was working out of deteriorates in value, depreciation takes place. Land values go up. The owners of such properties have to watch, with the greatest possible adroitness and care, not to become the partner of the government in their eventual sales -- the government could become a partner to a very determinative extent, as you know. The government’s claims could well rise to 75 per cent in the case of any emolument or gain the owner of the property may make on the property as a whole.

Such a property owner, I suppose, will need all kinds of engineering advice, various forms of actuarial advice, and advice from people who are capable but high priced in the nature of assessment, to see that he remains in balance and that along the line decline doesn’t take place. Even if it is wholly beside the point and of no great value, he must expend moneys in order to maintain the building value over and against the property itself.

You’re building into the whole operation here, into the cogs of the machinery, a particularly damaging, wasteful and stupid aspect of capital expenditure. This is a breach of any notion of maximum best use made for properties and for land.

As I say, you wake up in the morning and find that you are being mulcted; that you are in effect being expropriated of a land value which a few weeks previously, or certainly a few years previously, was well in balance.

What do you do with all that sort of thing? I mean, how do you see it? Do you just shrug your shoulders and say: Well, that’s how the world falls out?

The small commercial enterprise, the corner drugstore, the corner barber shop, or any other number of people, who have their buildings in this particular state now find that the values in the community have shifted the full weight of this taxation onto their shoulders. This may have been their retirement possibility. They might have been able to come to a desmene where they could breathe free of the speculation land taxes of this particular kind. They may have wanted to retire with a little condominium in Spain that I read about in the morning newspaper. You can pick one up for about seven or eight thousand bucks.

But no! The government has relieved them of all that sun. They don’t have to worry about going off to foreign parts or any tropical luxuriance. The basic wherewithal with which that might have been done has been extracted from them at the bowels.

So this is the way it falls out; that’s the way society is; that’s the way we run things. They have taken their chances by living with us this long, and this is the penalty they pay for finding this a rather pleasant place to stand or to be expropriated.

Mr. Chairman: The member for Prince Edward-Lennox.

Mr. Taylor: Mr. Chairman, I wonder if the minister could clarify a remark on a question I asked earlier concerning the aspect of value in dealing with the servicing and subdivision of the land itself. I believe the member for Downsview subsequently raised this point.

I gather the section exempts only those lands where the buildings or improvements on the land equal at least 40 per cent of the sale value of that land. A tourist operation, for example, that had a very heavy investment in land but a low investment in buildings, would not come within the exemption.

There may be other examples of commercial or industrial operations where that might apply. They could include an industry that may be planning for future expansion, for example, that has a larger land holding than it immediately needs. It seems to be the trend today. Someone that has a commercial operation which might include a great deal of land for parking where you have a low parking turnover, would have a large land area but small building improvement area.

I don’t know how a drive-in theatre would fit in. There is a screen and minimal facilities in terms of structures, but a large land area to accommodate the cars that come on the premises.

Mr. Singer: Put in heavy roads or big water pipes or sewer pipes.

Mr. Taylor: If we are faced with that situation, then I would like an explanation of the rationale in not permitting what would normally be termed development costs insofar as servicing and the conditions that may be imposed by the municipality for permitting this development to take place in the first case. It may be in terms of internal roads, internal storm sewers, drains, other types of sanitary sewers, parking standards, buffer and retaining walls. There are many areas that are really servicing costs which could be very large but apparently would not be permitted under this. I was wondering if the minister could enunciate the rationale?

Hon. Mr. Meen: Mr. Chairman, the rationale behind all of this begins when one looks at development from raw land to serviced land; I think we went into this in some depth on second reading.

What you wind up with is an eventual decision that you are not going to permit somebody to escape a land speculation tax if, for example, all he does is achieve a rezoning and makes no physical improvements to the land. Now suppose he has brought in a watermain or a sewermain or has put in a road. Are you going to permit that? We eventually decided we should permit profit from that stage of development only if houses are built on it.

The hon. members will recall that the original sections imposed a tax under section 21 unless covenants are extracted from builders to commence construction. Of course for any particular parcel with these services, what we were looking at were, you might say, the above-ground values.

The figure of 40 per cent for the percentage of the realized cost on disposition is perhaps arbitrary. We had looked at 50 per cent originally, but that looked a little bit on the steep side. On the other hand, we don’t want someone to escape a land speculation tax by allowing him to put an absolute minimum of investment into the property, keeping it as, say, a parking lot with nothing more than a little shack in which the attendant would stay and keep his records.

When you try to draw a line someplace, you will have people arguing that it is arbitrarily high in some instances and in other cases, just as arbitrarily low. The figure of 40 per cent was selected as a figure which we felt was not so high as to be unconscionable, but sufficiently high that the person seeking to escape the speculation tax would have to have had a quite substantial investment in the above-ground improvements to the property. Therefore, we have the exclusion in clause (d) -- when talking about commercial properties, tourist establishments or whatever -- of the 40 per cent of the realized sale value after you exclude costs or value attributable to any subdividing or servicing of that land. That is the background of it.

Mr. Taylor: Then I presume the land would not be exempt if improvements in other than the servicing costs did not exceed 40 per cent of the value of that land? Now let’s assume the servicing costs might be 50 per cent or 60 per cent of the land value. If that is so, then the land would not be exempt and presumably the tax then would apply to a transfer on that land and the transfer price would have to include the cost of servicing. Are you paying a 50 per cent tax on money you’ve already spent to service the land? If so that’s confiscation.

Mr. Singer: Mr. Chairman, in Cobourg, a municipality you are familiar with, there is a large, partially undeveloped industrial subdivision owned by the Ontario Development Corp. It has oversized, heavy-duty roads; it has buried electrical services, large mains dug into the ground and so on. Presuming that was not in public ownership and someone wished to set up that kind of development of raw land for a heavy-duty industrial purpose, whatever incentive might exist is taken away.

Why would anybody in their right mind want to do that? Because they are going to be taxed -- and so is every piece of land they sell to erect another industrial building which would put people to work, pay taxes and so on; there’s no point. Had Cobourg had to be faced with that some time ago that wouldn’t have been there but now they have some choice industrial land with good, heavy-duty services which will attract industry -- good industry -- and make the area prosperous; but you are just putting the kibosh on that.

Your distinction, your idea as to where you draw that line, loses me entirely. That’s why I used a little earlier the example of the one particular piece of land in another municipality in the province where the big development problem is the construction of a $1 million storm sewer.

That’s a lot of money; and if that is the condition of development, it may well be that the owner will choose to put that in if he can take advantage of his expenditure. But if he’s going to be taxed after he’s put it in, why should he? What’s the purpose? You are discouraging, on that second piece of land, the erection of any houses.

You become self-defeating; all the way through this statute you are self-defeating. Surely that particular exemption has to be looked at -- actually it’s an inclusion, it’s not an exemption; that particular inclusion has to be looked at. You have to be somewhat realistic about the cost and the effort of turning raw land into serviced land and making it available for use.

Surely that is the whole object of the exercise? You want to make it available for use, for the building of houses. If you are going to make the taxing restriction such that all of the money put into the ground doesn’t count as a couple of the members were saying who would want to sell a tourist resort, or who is going to want to service a sub- division and take that risk? Nobody!

Hon. Mr. Meen: Mr. Chairman, I repeat what we said on second reading -- that where we have the covenant to build there’s the incentive to buy. There is no disincentive, then, to the seller. Indeed, there is an incentive to the developer to get buyers for his lots when he has put in his services who will covenant to build commercial, industrial and residential; within the overall competence you might say.

Mr. Singer: Isn’t your covenant in 21 just residential?

Hon. Mr. Meen: No, it is not. I would suggest that the developer who puts in this kind of service simply has the additional incentive, having gone that far, to see that he gets people who purchase to covenant to build. I would hope it is not counter-productive. The intention of this legislation is to be an incentive and not to have any counter- productive influence.

Mr. Chairman: The member for Ottawa-Centre.

Mr. Cassidy: I raised a point a moment ago with the minister about the transfer of use of a residential property to commercial and industrial use for temporary purposes as a means of avoiding the tax. Could he comment on that?

Hon. Mr. Meen: I am sorry -- would you repeat that please?

Mr. Cassidy: Yes; the conversion of a residential property to a commercial or industrial use in order to evade the tax, in a temporary kind of fashion, I am suggesting there are a number of instances in which that could be relatively simple to do. Secondly, the minister has made available to me the regulations under the Department of Tourism and Information, nition where the minister will use his which means it must predate about 1967. I am not sure when the name of the department was changed. At any rate, I may say that I have sought vainly in the library to get these regulations, and I appreciate the minister finally letting me have them.

The tourist establishment definition here, which he says he will use as a model, includes hotels, motels and tourist homes, as well as other things that I think we had understood we were talking about. I think we all had the idea we were talking about Frank Miller’s spread, about the idea that a hotel would be covered or that a tourist home would be covered. But the minister said this would be the base, and of course that’s where we are running into the problem. We are working with a definition where the minister will use his powers, under the regulation section, presumably to come up with a definition some months after this particular bill goes to bed.

Perhaps for clarity’s sake he could give us a ruling on one particular case. What will be the treatment of apartment-hotels? Will they be covered under this section or will it be required that they be held for eight years before they become fully exempt from the tax according to the later section set up in the bill for apartment houses?

Hon. Mr. Meen: Well sir, I think that might be one case one would have to look at. I don’t know much about apartment-hotels and the way in which they are operated, although I think they are operated on a fairly long-term lease basis. More so than a conventional hotel. If that were so then it might very well fall into the category of an apartment, rather than a commercial operation.

I think we would have to take a look at some of these and see what land of leases they sign with their tenants. If they are yearly leases or so, I think that would bring them into the general category of apartment. Whether they call themselves an hotel because down in the basement or on the main floor there is perhaps a sophisticated dining lounge available to the people who occupy the various apartment suites or a swimming pool and other things that have been made available only to those who sign on their longer term leases, that kind of thing is a guess. The distinction between an apartment operation that doesn’t have all these things -- they may have swimming pools but they don’t ordinarily operate things like dining rooms, lounges and shops -- and the commercial operation of an hotel, would be something that we would have to determine, to spell out in regulation form.

Mr. Cassidy: Well can I make this suggestion? I will be voting against this whole section. It is convoluted, it is badly drafted, it is confusing, it is wrong and it’s inequitable. But if the government somehow decided that it was going to make a distinction between long-term transfers of property and short-term transfers -- and that’s what is proposed later on in the case of investment or rental properties -- then I seriously wonder why, if it feels that’s okay for investment properties, it couldn’t apply that to commercial-industrial properties as well.

I happen to think that everybody has to be hit with the tax if you are going to have it all, because you want an effective weapon to stop speculation rather than to have the government simply to put its hand in the pocket of speculators while allowing them to continue with their business. Surely, if it is argued that somebody who has an investment property, an apartment or something like that, for several years is in a legitimate kind of business and therefore should not be subject to the tax, one could make exactly the same argument for a commercial or industrial operation as well.

The kind of distinctions the minister is now talking about in deciding about an apartment-hotel, whether it is an apartment or hotel by looking at the leases, or whether a place offering maid service where corporations rent on a yearly lease because they use it for visiting executives, is a hotel or an apartment, are distinctions that become almost impossible; and I think the minister would agree. The test of time, if you are going to have any kind of distinction, might be better. Then you would get away from the situation where General Motors of Canada Ltd. or one of these high-powered conglomerates with rather shaky financing and rather questionable antecedents was playing around in the market of industrial land, secure in the knowledge that it couldn’t be caught as long as it made sure that the sale was for industrial purposes, even though it was really trading in industrial values that would ultimately be traded to residential values.

You could get at that kind of situation if you had a time rule in it, so that they would only be exempt from the tax if, in fact, there was a legitimate holding for a period of six, seven or eight years. That would make a lot more sense than what is suggested here.

Hon. Mr. Meen: There may be something in what the member says. It is clear, of course, that we began this exercise not really aiming at the commercial and industrial sector, because we weren’t as concerned about speculative gains from that quarter as we were about the unconscionable speculative gains --

Mr. Singer: It isn’t an exercise, it is a taxing statues.

Hon. Mr. Meen: -- that were going on in the residential quarter.

I think as we developed this legislation it became apparent we had to have some kind of restrictions here. It may be as we develop our experience along this line it will be possible to see a course of action something like the one suggested by the member for Ottawa Centre. It is going to be awkward at times, I suppose, to identify the commercial operation and distinguish it from a commercial operation that is not residential rental, so as to apply the differential rate. It might be easier if we didn’t do that.

As the member suggested, he’d tax everybody. We are not proposing to do that right now, because I think we can distinguish the two at the present time without too great difficulty. I’m no expert in this area, but I would think my staff in the assessment division can pin-point the areas as to identify, for this purpose, commercial activities, commercial purposes and hotel operations from the true residential rental accommodation to which we are according a different -- and somewhat advantageous position in a way from certain others -- but a different kind of treatment from that accorded the straight commercial operation.

I think in time we might just see some kind of a provision like the method suggested by the hon. member, but I think at the present time we should go with what we have. We think this one can work, and we are confident that it can.

I find the member for Ottawa-Centre a bit of an enigma when he attacks everybody, but on the other hand he would vote against the whole of this bill. That is rather an anachronism, it seems to me.

Mr. Cassidy: Sure, because of the exemptions that are built in here.

Hon. Mr. Meen: I think that clause (d) as it stands is clear when one has worked his way through the various sections. Taxing statues have to be about the most difficult pieces of legislation one can ever try to interpret. I think the section is clear as to what the various categories apply to and should be supported by all hon. members.

Mr. Cassidy: It is so tall and wise a section, Mr. Chairman, that one can drive through it with a fleet of cars or trains side by side, and that is why we are opposing this particular set of exemptions.

Mr. Chairman: The member for Kitchener.

Mr. Breithaupt: Mr. Chairman, the member for St. George has put an amendment which we believe should be included. If the minister chooses not to accept the amendment and is not prepared to amend with a proper definition of “tourist resort,” then we shall vote against the subsection, and we invite the member for Prince Edward-Lennox to join us.

Mr. Chairman: I will place the question. Those in favour of Mrs. Campbell’s motion, will please say “aye.” Those opposed, will please say “nay.” In my opinion, the nays have it. Shall we stack this?

Mr. Singer: No; no stacking.

Mr. Chairman: Call in the members.

The committee divided on Mrs. Campbell’s amendment which was negatived on the following vote:

Clerk of the House: The “ayes” are 30; and the “nays” are 51.

Mr. Chairman: I declare the amendment lost and clause (d) carried.

In clause (e) the minister has an amendment.

Hon. Mr. Meen: Mr. Chairman, this is a fairly lengthy amendment and perhaps I might move that clause (e) of section 4 of the bill be amended by adding at the end thereof the underscored section as it appears in the copies available to the committee for the purpose of this debate.

Mr. Chairman: Shall we take it as read and dispense with the reading?

Agreed.

The member for Lakeshore.

Mr. Lawlor: Yes, I have already indicated one question which arises out of this principal residence section, which the minister will recall I trust, namely the interim time. If somebody buys a house -- if you or I bought a new house this afternoon without selling the old house, we would, I take it, have established a principal residence other than the principal residence we had two minutes before we bought the principal residence in question?

What happens to you when a month or so later, or even 10 days later, you sell that property which was previously your principal residence? It can no longer be considered your principal residence, I put it to you, on any interpretation or construction of this legislation.

In other words, you are going to be up against a tax in that particular context. The only thing you can possibly do, even with respect to so commonplace a thing as selling your own home, is you are going to have to pay a tax on the damn thing. Is this the purpose of this legislation? By what construction of wording do you try to circumvent that?

Hon. Mr. Meen: No, Mr. Chairman, I think under the circumstances outlined by the hon. member, the principal residence would not have been changed at that point. The principal residence would be, in the colloquial, “where one hangs his hat.” And when he sells his existing home he will move into the new home and that would be a change of residence. It would not be my intention that the Act should apply in circumstances such as that to impose a tax on an individual who had bought a new home intending to move into it when he sold his old one; where there was any transitional period of that sort it would not be intended to apply the tax.

Mr. Lawlor: Well, lets put a case which it will be slightly harder to accommodate in your proposition. Very often people do buy another house without having sold their existing house, and actually move into it long before they get the other marketed and sold. Is the index of the transfer the fact that you move into another house?

Then you say that is not your intention. But that’s beside the point. Your intention in legislation must be spelled out. We want to know what your intention is. To state here that you don’t intend any such an egregious effect and that you are hung up on an oxymoron, is neither here nor there. The courts don’t listen to what you or I say in these chambers or anywhere else and therefore it can’t have that particular impact. Shall I continue in this diatribe or shall I --

Mr. Chairman: The hon. member for St. George wishes to place a sub amendment; perhaps before 6 o’clock we might do that and consider the whole thing afterward. The member for St. George.

Mrs. Campbell: Mr. Chairman, this may come as no surprise to the minister.

Mrs. Campbell moves that clause (e) of section 4 be amended by adding after the word “dependent” in the fourth line thereof the following:

Or by a person resident in a hospital, a nursing home, a senior citizens’ residence, or any other institution under the Charitable Institutions Act.

Mrs. Campbell: In view of the fact that my friend from Lakeshore has ceded his position to me to place the amendment, I shall not debate it further at this point, Mr. Chairman.

Mr. Chairman: I might receive it, but it seems to me the minister’s amendment deals with the latter part of it and yours is an entirely new amendment. It is not an amendment to his amendment is it?

Mrs. Campbell: No, it isn’t.

Mr. Breithaupt: They might be dealt with as two separate matters, Mr. Chairman.

Mr. Chairman: I think they should be considered separately, yes; I will place it later, after we have disposed of the minister’s amendment. Is that satisfactory?

Mrs. Campbell: Mr. Chairman, I have other duties tonight. I would like to have it placed.

Mr. Chairman: Fine. I have held that I have not placed it.

It being 6 of the clock the House took recess.