Legislative Assembly of Ontario

The House met at 2 o’clock, p.m.

Prayers.

Hon. J. P. MacBeth (Minister of Labour): Mr. Speaker, I would like to take this opportunity to introduce to you and the members of the House some 25 students from John G. Althouse Middle School in the riding of York West, in the borough of Etobicoke. They are grade 8 students attending here today to see how we conduct ourselves. They are led by Mr. Quirk.

Mr. T. P. Reid (Rainy River): That will discourage them.

Hon. J. R. Rhodes (Minister of Transportation and Communications): Mr. Speaker, I would like to take this opportunity to introduce to you and to the other members of this Legislature a group of 32 grade 8 students and their chaperons, led by Mr. Doug McCabe, from St. Veronica’s School in Sault Ste. Marie. I would ask the members to join with me in welcoming them here.

Mr. J. R. Smith (Hamilton Mountain): Mr. Speaker, I would like to introduce to the members of the Legislature a group of grade 7 students from Highview Public School on Hamilton Mountain and bid them welcome.

Mr. Speaker: Statements by the ministry.

LAND SPECULATION TAX

Hon. J. White (Treasurer and Minister of Intergovernmental Affairs): Mr. Speaker, I was astonished to read in today’s Globe and Mail that a federal official has purported to rule that Ontario’s land speculation tax will not be deductible for income tax purposes, while I am still waiting to hear directly from the federal government on this matter.

Mr. M. Shulman (High Park): The Treasurer is the only one who is astonished. We all knew it. The Minister of Revenue (Mr. Meen) wasn’t astonished.

Interjections by hon. members.

Hon. Mr. White: On April 25 I wrote to Mr. Turner raising this issue and specifically requested that the land speculation tax should be treated as a deductible expense for purposes of computing income tax or capital gains tax. This would generate a combined tax impact ranging from 65 per cent to 80 per cent, which is a strong deterrent to speculation but falls well short of confiscation of proceeds. Mr. Turner replied on May 10 indicating the measure might be considered an income tax but that he wished to study legislation before making a decision. It is simply incredible, therefore, that such an interpretation should be communicated to us indirectly via the medium of a newspaper report.

Mr. Shulman: Isn’t there something about people in glass houses?

Hon. Mr. White: Let me set out to the Legislature the course of action the province now proposes to follow.

Mr. A. J. Roy (Ottawa East): Why doesn’t the Treasurer go cry on the CBC?

Mr. Speaker: Order, please.

Hon. Mr. White: The government of Ontario is prepared to challenge in court on behalf of Ontario taxpayers any unfavourable federal interpretation of the Income Tax Act.

Mr. Roy: Who is going to be the government’s lawyer?

Hon. Mr. White: If the newspaper account is correct, we intend --

Mr. E. Sargent (Grey-Bruce): The Treasurer knew it before he started.

Hon. Mr. White: -- to respond by a reference to the Ontario Court of Appeal under the provisions of our tax collection agreement with the federal Minister of Finance. In this way, the matter can be resolved quickly and a legal determination of the issue can be made. This interpretation of the Income Tax Act which has not yet been issued by the Department of National Revenue is simply an interpretation and is not a decisive legal statement.

Mr. V. M. Singer (Downsview): Much more decisive than anything the Treasurer has brought before the House.

Mr. Speaker: Order please!

Hon. W. G. Davis (Premier): The member is in favour of speculation along with his federal colleagues. Sure, he is.

Mr. Singer: The government was wrong before it started but it went ahead.

Hon. Mr. Davis: They are friends of the speculators.

Mr. S. Lewis (Scarborough West): The tax is dead. The government is just interring it now. It is dead.

Interjections by hon. members.

Hon. Mr. White: If and when the interpretation is released, I will be studying the release with my officials to determine the specific details of the action to be taken.

Mr. Lewis: This is like CBC’s Provincial Affairs. The Treasurer had better withdraw it now.

Hon. Mr. White: Ottawa’s position appears to be based upon the assumption that the Ontario land speculation tax is an income tax. The Land Speculation Tax Act very clearly imposes a tax on land. As a land tax, the speculation tax is no different from other land taxes and expenses, the deductibility of which is firmly established.

Mr. Singer: Come off it.

Hon. Mr. White: Legal opinion which the province has received distinguishes an income tax --

Mr. Shulman: The government should call a provincial election on this issue.

Mr. Singer: It would save it until the 12th hour and wouldn’t tell us who made it.

Hon. Mr. Davis: That is fine. Those members want to see land speculation continue. Why don’t they get up and say so?

Mr. Singer: Nothing is going to help the government one bit.

Mr. Lewis: The Treasurer is wrong and is incompetent and should withdraw the bill. It is simple as that.

Mr. Singer: He is still wrong and all he does is yap.

Mr. Speaker: Order please.

Hon. Mr. White: Legal opinion which the province has received distinguishes an income tax from a tax levied at the time of sale of the land, the amount of which is measured by the profit made on the sale.

Mr. Lewis: The government is throwing the real estate market into a shambles.

Hon. Mr. White: The crucial distinction is that between the nature of the tax and the measure of the tax.

Under the Land Speculation Tax Act, the tax forms a lien on the property. The vendor of the property, therefore, can only receive net proceeds on disposition. The Ontario tax, payable before the land is sold, never forms a part of the vendor’s income and therefore must be deductible in computing taxable income.

Mr. Singer: It took Dalton Camp six weeks to write that for him and it is still wrong.

Mr. Speaker: Order.

Mr. Roy: The minister is going to be laughed out of court.

Hon. Mr. White: The Department of National Revenue has issued other interpretations of the Income Tax Act which have failed when challenged in court.

Mr. Singer: It took the Treasurer six weeks to get an opinion.

Mr. Speaker: Order, please.

Hon. Mr. White: For example, bulletin IT-53, which disallows another existing provincial tax measure in computing federal capital cost allowances, recently came before the courts. The Federal Court of Canada held that the Minister of National Revenue’s interpretation was incorrect in law and reversed the department’s interpretation.

Let me recapitulate. Speculation in land and housing has been a major contributor to inflation in Ontario. Consequently, the land speculation tax was expressly designed to deter rampant speculation in land and real property in Ontario.

Mr. Singer: It’s the worst-written statute that has ever come before this Legislature.

Hon. Mr. White: It has been well received and has had wide support. It is working.

Mr. Singer: It is not.

Mr. M. Cassidy (Ottawa Centre): Look at the sales performance now.

Mr. Lewis: Give us evidence.

Hon. E. A. Winkler (Chairman, Management Board of Cabinet): That is why the opposition is angry.

Mr. Lewis: Give us evidence if it is working.

Hon. Mr. White: Since announcement of the tax the listings of properties for sale have increased dramatically and price escalation has slowed.

Hon. Mr. Davis: It has indeed.

Mr. Lewis: The price escalation has not stalled.

Mr. R. F. Nixon (Leader of the Opposition): There’s a shortage of funds.

Hon. Mr. White: Concerted supporting action by the federal government is now required to stimulate the supply of housing and increase the flow of mortgage financing at reasonable cost.

Mr. Singer: A void has descended on Ontario.

Mr. Roy: The minister would be out of here if we taxed him 110 per cent.

Hon. Mr. White: The land speculation tax is not, as I made clear in my budget statement, a device to raise revenues. In fact, the success of the tax will be measured inversely to its revenue yield. Further, the government of Ontario has stated its intention of sharing any revenues from this tax on a 50-50 basis with the municipalities.

Mr. Singer: We divided the House 10 times on quorum calls to get the Treasurer into the House to participate in the debate and he still would not come.

Hon. Mr. White: The federal ruling is, however, clearly designed to protect the federal tax base. This decision indicates a complete lack of understanding by the federal government of the objectives of my tax policy and the central thrust of my budget, which is to deal with inflation.

Mr. Reid: That is why the government added to its deficit.

Hon. Mr. White: It clearly exposes the unwillingness of the federal government --

Interjections by hon. members.

Mr. Sargent: There’s a billion-dollar deficit.

Hon. Mr. White: -- to undertake by itself or support provincial actions to reduce inflationary pressures in Canada. Numerous options have been open to the federal government to use its income taxes and capital gains tax to discourage speculation in land and housing.

Mr. Singer: Why did it take the provincial government six weeks to get an opinion?

Mr. Cassidy: Now this is like “Provincial Affairs.”

Mr. Lewis: It won’t wash, my friend; it won’t wash.

Mr. Cassidy: There may be a rule against these things in the provincial House.

Hon. Mr. White: One can only conclude that the federal government has chosen to ally itself with land speculators and that it has once again encouraged the inflationary --

Mr. Singer: That’s fine. Stanfield wouldn’t have stood for that one.

Mr. Roy: The minister wants to win in court, doesn’t he? Don’t say anything.

Hon. Mr. White: -- forces set in motion by increased federal expenditures and increased money supplies.

Mr. Singer: It’s absolutely the worst statute, Mr. Speaker, that ever came before this Legislature.

Mr. Lewis: The Treasurer is just impossible.

Mr. Cassidy: He is backing down again.

Mr. Lewis: He moves from quicksand to swamp to quagmire. That is his programme. He has nothing to rest on.

Mr. Singer: The Treasurer should put on a sweater, turn down the thermostat and give us another great budget speech.

Mr. Lewis: Withdraw the bill, withdraw the bill.

Mr. Singer: The minister forgot to wear his sweater today.

Mr. Lewis: Why is he doing this to the Tory party?

Hon. Mr. Winkler: Both parties opposite are backing the fat cats.

Mr. Lewis: He probably knew this was true two months ago. This whole bill is not working and he probably knew it two months ago.

Mr. Singer: Why did he wait for six weeks to get a legal opinion? And then he wouldn’t tell us who made it.

Mr. Lewis: Think of how the Minister of Revenue feels.

Mr. Singer: It’s the worst incompetence ever.

Mr. Speaker: As soon as the members are finished we’ll call the next statement.

Mr. Lewis: Let’s hear from the Minister of Revenue.

Interjections by hon. members.

Mr. Lewis: The Tories are going to lose the federal election. Think of how the Minister of Revenue feels.

JURIES AND PUBLIC INSTITUTIONS INSPECTION STATUTES

Hon. R. Welch (Provincial Secretary for Justice and Attorney General): Mr. Speaker --

Mr. Lewis: The minister’s glasses are sweating.

Hon. Mr. Welch: -- later this afternoon I plan to introduce for the consideration of the House two statutes, the Juries Act, 1974, and the Public Institutions Inspection Act.

There are five basic features to the Juries Act, 1974, which is designed to replace the present Jurors Act and which follows in substantial form Bill 251, which was introduced at the last session of the Legislature for first reading only.

First, the new legislation shortens the list of exempted occupations.

Second, it improves the procedures for the selection and return of jurors.

Third, it makes serving on juries more convenient for members of the public.

Fourth, it modernizes the language and procedures in an Act which has not been substantially revised in over 100 years.

Fifth, it abolishes the grand jury.

The list of occupational groups made ineligible has been substantially shortened. In place of the absolute exemption given under the present Act to all persons in certain occupations, this bill creates a number of stages in the jury selection process at which persons may be excused from such service. The new provisions will allow individuals to obtain deferment or cancellation of their obligation to serve when the circumstances of their particular case warrant, rather than exempting classes of persons outright, when, in many cases, service would occasion no real hardship either to the general public or to the individuals concerned.

The improved jury selection procedure embodied in the bill does away with the subjective selection of jurors and replaces it with an objective random selection process which will produce eligible jurors drawn from every sector of our society.

To make jury service more convenient for members of the public, the new process will permit those summoned for service on a jury panel to have their service deferred to a sittings of the court later in the year or a sittings in the following year when it would be a hardship for the individual to be required to serve when originally summoned.

Farmers asked to serve at crucial seeding and harvesting seasons, businessmen and professionals with very pressing engagements and others will be able to apply to postpone their time for service to a later sittings of the court.

Of course, Mr. Speaker, some persons may be in such poor health, as in the case of the elderly, that they would apply to be excused completely. In some situations, as for example where a community has but one pharmacist or only a small fire department, those individuals may apply to be excused absolutely in the public interest.

The bill also abolishes the grand jury -- thus implementing a recommendation made by the Ontario Law Reform Commission in its report on the administration of the courts.

Mr. Singer: Some of us have been advocating that for over 10 years.

Mr. Lewis: About time.

Mr. Singer: What others?

Hon. Mr. Welch: Most other provinces have long since done so in the interest of improving the effectiveness of the criminal trial process. However, before it can be effective, the Criminal Code must be amended to bring its provisions into line with the law of the province. For that reason, transitional provisions are included which will retain the grand jury until those amendments have been achieved.

The public institutions inspection function, formerly carried out by the grand jury, has been preserved in a newly created body called the public institutions inspection panel, established under the companion piece of this legislation, the Public Institutions Inspection Act.

Mr. P. D. Lawlor (Lakeshore): Stanfield is a grand jury man, you know.

Hon. Mr. Welch: In the past, grand jury reports have led, either directly or indirectly, to the substantial improvement of public facilities and public services in institutions in the county or district maintained by public money. More important still, Mr. Speaker, the inspection by the grand jury of the places where persons were being detained pending trial or other disposition has provided an important safeguard for the liberties of the subject by ensuring that the actions of those involved in the administration of justice are regularly subjected to the scrutiny of representatives of the public.

Much like the grand jury, the public institution inspection panel will be drawn from those eligible for jury service.

Mr. Roy: I hope the minister reads the reports.

Hon. Mr. Welch: As I have already said, both of these bills were introduced for first reading and public consideration at the last session of the Legislature. In addition, to encourage as broad a public commentary and response as possible, copies of the Juries Act were sent to each of those occupational qualifications affected by the proposed amendments, as well as to the sheriffs and county and district court judges. On the basis of the responses received, certain adjustments to the form of Bill 251 were undertaken and are embodied in the legislation which I will be introducing later this afternoon.

ORGANIZATION AND FINANCING OF METRO TORONTO SCHOOL SYSTEMS

Hon. T. L. Wells (Minister of Education): Mr. Speaker, this afternoon I will be tabling the report of the ministerial commission on the organization and financing of the public and secondary school systems in Metropolitan Toronto.

This commission was established a year ago. Its job was to examine the structure, operation and financing of the Metropolitan Toronto School Board and the six boards of education in Metro, and to make any recommendations that it saw fit.

Mr. Speaker, the chairman of the commission was Mr. Barry Lowes, and the other members were Miss Margaret Gayfer, Prof. Brock Rideout and Dr. David Tough.

In preparing its report and recommendations, the commission points out that it has tried to establish an administrative structure and system of financing that will best guarantee equal educational opportunity for all Metro students, while at the same time answering the appeals made repeatedly by the boards of education for an equitable share of the available funds; greater local autonomy, especially in fiscal matters; and increased responsibility and accountability to the electorate.

The report I am tabling today, Mr. Speaker, contains 90 recommendations. Probably the overriding one is the recommendation that the existing two-tier system be retained, although in a modified form. The commission supports the concept that the Metro board is a vehicle for the six boards of education to meet, plan and co-operate in joint endeavours.

At the same time, the commission suggests that the powers of the Mero school board and the six boards of education should be more clearly defined, giving each body responsibility for those areas it can manage best. As an example, there is a recommendation that suggests that the Metro school board operate the computer services for the six boards of education, instead of each of the six having its own computer operation, as is now the case.

Similarly, the commission recommends a Metro-wide policy on pupil transportation and Metro-wide co-ordination of educational research to eliminate duplication and overlap. The boards of education would be permitted, by unanimous consent, to delegate additional responsibilities to the Metro board, and also to retrieve them.

Mr. Speaker, the major fiscal recommendation of the report is an attempt to increase the autonomy and responsibility of the six boards of education in Metro by having the provincial grant and expenditure weighting factors determined by the ministry individually for each board, just like all other school boards in Ontario.

The commission feels that this change would put an end to the frequently voiced complaints of some boards over what they consider to be their fair share of the funds allocated by the Metro school board.

The commission also feels that this change would reduce the amount of time now consumed by the complex budget process, and give boards more time to spend on educational policies.

However, Mr. Speaker, the commission recommends that the uniform mill rate should be retained to finance education up to the expenditure ceilings, Metro-approved extraordinary expenditures and supplementary expenditures.

Among the 90 recommendations are suggestions for:

1. A local tax levy for additional educational funds up to a specified limit above the ceilings, at the discretion of each individual board of education;

2. Uniform salary and fringe benefit arrangements for all employees, teaching and non-teaching, of the six Metro area boards of education;

3. A possible redefinition of the boundaries of the six boards of education, making them more equal in size;

4. Flexibility to allow the boards of education to increase the honoraria for school trustees;

5. Alterations to the weighting factors for special education, which generally would increase the funds in this area in relation to actual needs; and

6. Modest financial assistance to help candidates who stand for the office of school trustee with their election expenses.

These examples, Mr. Speaker, serve to illustrate the comprehensive and detailed nature of the report and its wide ranging recommendations.

Altogether, the commission received 42 formal briefs, held 27 public hearings and conducted innumerable informal interviews. I am happy to say that full co-operation and assistance was received from all school boards in the Metro area, as well as from a wide variety of groups, organizations and individuals interested in the quality of education in Metropolitan Toronto.

Mr. Speaker, I would like today to thank the members of the commission for the time and effort that they have devoted to this study, and also their staff, all of whom I think have done a remarkable job in 12 months’ time.

We will, as a government and as a ministry, be very carefully studying the report and reviewing its recommendations over the next few months. Any changes that arise from this review could result in legislation this fall.

Mr. J. F. Foulds (Port Arthur): No applause?

Mr. Speaker: Oral questions.

The hon. Leader of the Opposition.

LAND SPECULATION TAX

Mr. R. F. Nixon: I would like to ask the Treasurer, Mr. Speaker, if he has instructed the Minister of Revenue to collect the speculation tax at a reduced rate until such time as the controversy between the government of Ontario and the Department of National Revenue is settled either by agreement or by the courts?

At the same time, could he tell us what the level of revenue has been from that tax since it received royal assent?

Mr. Foulds: Zilch.

Mr. R. F. Nixon: And would he undertake to ensure that we will not be collecting tax at a rate which could in fact amount to a level that would exceed 100 per cent, because when this was discussed in the Legislature on a number of occasions, the Minister of Revenue gave us his personal assurance that it would not be collected at those confiscatory rates?

Hon. Mr. White: Mr. Speaker, no, indeed I will not. We will, if necessary, fight this through the courts; and we will no doubt win, as we won a case yesterday, I believe, with respect to capital cost allowances on equipment purchased in part with provincial government grants. I have no doubt that we are going to win this --

Mr. Roy: Oh, the minister is being pre- sumptuous.

Hon. Mr. White: -- and I am ashamed to think that the opposition here are pressing the suit of the speculators on every possible occasion.

Mr. R. F. Nixon: Oh, come on!

Interjections by hon. members.

Mr. R. F. Nixon: A supplementary: Without responding to the gratuitous and stupid comments of the Treasurer --

Mr. Speaker: Order, Order.

Interjections by hon. members.

Hon. S. B. Handleman (Minister of Housing): Withdraw.

Mr. Speaker: I hardly think the word “stupid” is a proper parliamentary word. I think it should not be used.

Mr. Lewis: It is a descriptive adjective; it is a word of gentleness.

Interjections by hon. members.

Mr. Speaker: I have not recognized the member for Scarborough West.

Interjections by hon. members.

Mr. Roy: Give us a synonym.

Mr. R. F. Nixon: Were you talking to me a moment ago?

Mr. Speaker: I was attempting to suggest to the hon. Leader of the Opposition that the word “stupid” should not be used in reference to one of the ministers of the cabinet. It is not a proper parliamentary word.

Interjections by hon. members.

Mr. R. F. Nixon: I would be the last to go against the instructions of the Speaker. I withdraw the term in reference to the Treasurer. But you certainly know my feelings on this matter, Mr. Speaker.

Mr. Roy: How about dumb-bell?

Mr. R. F. Nixon: As a supplementary, I simply ask the Treasurer if he does not have any concern for the taxpayers of the province, as well as for his natural fighting instinct, particularly when he was an opponent from which he gets that white heat response. Is he not concerned for the welfare of the taxpayers in the province who are going to be asked to pay at a confiscatory rate until this matter is settled? Would he not give some consideration to instructing the Minister of Revenue, so that the Minister of Revenue can --

Hon. Mr. White: I don’t instruct him.

Mr. R. F. Nixon: I use the word “instruct” because the Treasurer says he doesn’t make any policy himself. I would ask the Treasurer then if he would instruct the Minister of Revenue --

Mr. Lewis: He follows orders better than anyone else.

Mr. R. F. Nixon: -- so he can fulfil the commitment that he as Minister of Revenue made to this House that we would not be taxing at confiscatory rates, that is, above 100 per cent, by the authority of this House.

Hon. Mr. White: No, sir.

Mr. J. A. Renwick (Riverdale): Supplementary.

Mr. Singer: Supplementary.

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

Mr. Renwick: Mr. Speaker, will the Treasurer tell us when he expects this reference to the courts to take place?

Hon. Mr. White: Mr. Speaker, I had rather thought the federal government might not be prepared to issue any definitive statement on this matter until after the election, and I suspect that was the intention of the government.

Interjections by hon. members.

Hon. Mr. White: At any rate, when the dust settles after July 8, we will sit down and try to reason with the officials in Ottawa.

Mr. R. F. Nixon: The Treasurer always puts things on a political basis.

Hon. Mr. White: If it happens that their position is unalterable then, as I mentioned in my statement, I will sit down with my officials and we will decide upon the details of the specific action to be taken.

Mr. Singer: Supplementary.

Mr. Speaker: The hon. member for Downsview.

Mr. Singer: Could the Treasurer explain to us why, through the whole six weeks of the debate on that bill, there was no legal opinion whatsoever forthcoming from the government either from the Treasurer or from the Minister of Revenue, until at the eleventh hour he suddenly read us an anonymous report from the lawyer whose name he didn’t want to quote? Why is it that suddenly he now has a legal opinion which confirms, not what he put forward, but what we put forward? Could the Treasurer tell us why he waited so long?

Hon. Mr. White: I think, Mr. Speaker, the hon. member is not entirely accurate. Our entire case is based on the legal advice we got from legal officers in our own ministry and in the Attorney General’s ministry.

Mr. Singer: The Treasurer didn’t read us one through the entire debate.

Hon. Mr. White: The entire bill was based upon that advice. I myself, and I think at a later date my colleague, the Minister of Revenue, did read into the record certain legal opinions. One was lengthy and I didn’t have permission from the author to use his name at the time.

Mr. Singer: One at the 11th hour, in the last hours of the debate.

Hon. Mr. White: But now I have, and it’s Mr. Wolfe Goodman, QC.

Mr. Lewis: Oh, revelation!

Mr. Singer: The Treasurer waited until the whole thing was over and then he brought in an expert.

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

Mr. R. F. Nixon: I would like to ask the Treasurer why it is that his communication with the government of Canada was dated April 25, when he made his announcement of the intention to introduce the bill at least two weeks before that? Would he not have felt it would have been wise at least to inform the government of Canada and get an opinion on this matter which now appears to be absolutely crucial to the usefulness, if any remains, of this tax?

Hon. Mr. White: Sir, I just can’t imagine that this would not be considered an expense for income tax purposes.

Mr. R. F. Nixon: He had better start imagining it.

Mr. Foulds: He has a very limited imagination.

Hon. Mr. White: There seemed to be no particular urgency in putting the case to the federal government. I didn’t expect a fast reply and I certainly didn’t expect a no.

Mr. Singer: It took the Treasurer five weeks to get a legal opinion and then he read it to us and kept the author anonymous.

Hon. Mr. White: And it won’t be sustainable in court.

Mr. Speaker: The hon. member for High Park.

Mr. Shulman: Does the Treasurer not realize if he goes through with his plan to appeal to the courts, which will take at least a year or more, that during that whole period of time the entire real estate market in this province will be at a standstill?

An hon. member: That’s the problem.

Mr. Shulman: Does the Treasurer not realize this may very well send this province into a financial tailspin?

Hon. Mr. White: No, I don’t agree with that.

Mr. Roy: Supplementary, Mr. Speaker: Is the Treasurer not being somewhat presumptuous in saying that he is going, first of all, to win this case? Secondly, by collecting the tax at a rate which the court may well rule is not adequate and which may well be reduced by the court, is he not in fact being contemptuous of the court?

Hon. Mr. White: No, sir.

Mr. Lewis: Supplementary.

Mr. Speaker: No, there have been six supplementaries. The hon. Leader of the Op- position.

GRAND RIVER FLOOD INQUIRY

Mr. R. F. Nixon: I would like to ask the Premier if he is going to make an amendment to the terms of reference to the commission investigating the flood on the Grand so that it is established under the Public Inquiries Act, giving them the powers to accept evidence without in any way interfering with the rights of those giving the evidence?

Hon. Mr. Davis: Mr. Speaker, I expect we will be dealing with this in cabinet tomorrow. There has been consultation with the counsel for the group which is conducting the investigation. If it is felt -- and I think there is some legal justification for this -- that the rights of people who would appear before this group might possibly be prejudiced and if that possibility even remotely exists, then we will pass tomorrow an order in council establishing the inquiry under the Public Inquiries Act.

Mr. R. F. Nixon: Supplementary: Can the Premier explain why it was not established as a public inquiry in the first place? This was the impression that was given, that it was an announcement by the ministry and by the government of a commission with all of the powers that a public inquiry normally has.

Hon. Mr. Davis: Well, Mr. Speaker, I can’t speak as to the legal niceties of it. As I understand it, under the authority of the minister, one can accomplish the same objectives. The procedures are roughly the same but there is some question as to the position of witnesses who appear before the structure as originally presented by the minister. As I say, if there is some doubt about this, then we will go the route of the Public Inquiries Act.

Mr. E. R. Good (Waterloo North): Supplementary.

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

Mr. Good: Would the change in the terms of reference by order in council reduce the waiting period before the hearings could resume? It is now calculated to be about a month before things could resume. Would that period be shortened?

Hon. Mr. Davis: Mr. Speaker, I don’t know whether that period would be shortened because of any order in council. I’ll certainly take a look at it. I don’t think the operative section of the Public Inquiries Act would either lengthen or shorten necessarily the time before evidence could be heard, but I’ll take a look at that tomorrow.

Mr. D. M. Deacon (York Centre): Supplementary, Mr. Speaker: In view of the problems faced in the March 6 floods on the Grand River near Grand Valley, will the Premier have that matter also included in the inquiry?

Hon. Mr. Davis: Mr. Speaker, I think this matter was dealt with when the announcement was made with respect to the scope of the inquiry. What we will be dealing with tomorrow is the position of witnesses who might be called or who have some evidence to offer to the inquiry. Our basic concern will be to see that their rights are protected.

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

CONFLICT OF INTEREST

Mr. R. F. Nixon: I have another question of the Premier Mr. Speaker. Does he agree with the Minister of Transportation and Communications with respect to the conflict of interest situation that has resulted in the resignation of a commissioner of the Ontario Northland Transportation Commission, that those conflict of interest provisions are unfair; that the conflict was -- I believe the words were “trivial and unimportant” -- and, therefore, it is something that should result in a change in legislation? Or does the Premier go back to his original statements having to do with conflict of interest resulting in guidelines and agree that we have to establish a respect for conflict of interest legislation and requirements leading almost to a political taboo in this province in order to restore the confidence of the people in these matters?

Hon. Mr. Davis: Mr. Speaker, I don’t recall hearing exactly what the Minister of Transportation and Communications said.

Mr. R. F. Nixon: The Premier is going to hear quite a bit more about it.

Mr. Singer: He said the legislation should be changed.

Hon. Mr. Davis: I would say this, Mr. Speaker, that in a report I read in one of the papers, an editorial, I think there was some reference that the minister had said the issue was trivial. I don’t think anybody on this side of the House has ever said that the issue is trivial. I think what gives us concern, and I think must be considered logically by this House, is whether the legislation as it relates either to a government commission or the municipalities takes into account or provides a mechanism whereby people can serve who from time to time may be faced with “a potential conflict.”

I wasn’t privy to any of the discussions at public accounts today, but I understand there was some discussion as to the operative part of the --

Mr. R. F. Nixon: It was an in camera meeting.

Hon. Mr. Davis: That’s what I say. It was in camera, but I gather there was some --

Mr. R. F. Nixon: What is the Premier talking about then?

Hon. Mr. Davis: I’m talking about the fact that they were giving this matter some consideration. I don’t think that is a secret.

Mr. R. F. Nixon: How does the Premier know they were?

Hon. Mr. Davis: Well all right, ask the chairman of the committee. I would assume that they were giving this matter some consideration. Perhaps we will be having some recommendations to make to members of this House.

Mr. R. F. Nixon: Supplementary: Would the Premier not agree that he is the person who must set the consciousness of the cabinet and, in fact, all of us here in the community on the importance of this issue and that he should surely reprimand any of his ministers --

Mr. Sargent: He is the last person to.

Mr. R. F. Nixon: -- who would indicate that this matter is trivial and unimportant?

Hon. Mr. Davis: Mr. Speaker, no minister of this Crown has indicated that matters of conflict are trivial or unimportant.

Mr. Good: He certainly did.

Hon. Mr. Davis: I would say to the Leader of the Opposition that this government before any other government in Canada, including that of his friends who administer the federal affairs of this country --

Mr. R. F. Nixon: We didn’t have anybody resigning on conflict of interest as this government did.

Hon. Mr. Davis: -- took steps with respect to conflict prior to any other government in Canada.

Interjections by hon. members.

Mr. R. F. Nixon: This Premier has not come to grips with it. He is losing his cabinet ministers right, left and centre. He has restored the virginity of some of them.

Interjections by hon. members.

Hon. Mr. Davis: The ministers have been described as right, left and centre. We may be in the centre, some may be a little bit to the right -- but heavens above, they are not far to the left.

Mr. Lewis: I agree with that.

Hon. Mr. Davis: Ask us about transportation.

Mr. R. F. Nixon: I think somebody is going to be paying a lot of the Premier’s bills. Somebody is going to be paying a lot of this government’s bills.

Hon. Mr. Davis: The Leader of the Opposition can’t vote against it. He is embarrassed. Does he want to say something?

Mr. R. F. Nixon: I want to ask the Chairman --

Hon. Mr. Davis: Did he like my Spadina speech? I will deliver it.

An hon. member: Is it a good policy?

Mr. R. F. Nixon: I want to ask the Chairman of the Management Board --

Mr. Roy: Is the Premier going to support the Liberal policy?

Hon. Mr. Davis: Did the members opposite like the Spadina speech?

Mr. Singer: Yes.

Mr. Roy: Is the Premier putting up a plaque?

Mr. Singer: Is this government going to put its money where its speeches are?

CSAO EMPLOYMENT CONDITIONS

Mr. R. F. Nixon: Has the Chairman of the Management Board established a committee to review the requirements put forward by the Civil Service Association of Ontario? Does the minister believe that legislation should be forthcoming, as do many hon. members of this House, improving the situation the public servants find themselves in, particularly with their basic employment rights? And is the minister going to bring forward legislation to improve the pension provisions along the lines of their requirements

Hon. Mr. Winkler: Mr. Speaker, the short answer to the whole question is yes.

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

Interjections by hon. members.

Mr. Roy: Is the Premier going to support the Liberal policy?

Hon. Mr. Davis: It is our policy; why shouldn’t we support it?

Mr. I. Deans (Wentworth): The Liberal policy! Oh, what garbage.

Interjections by hon. members.

Mr. Lewis: The member for Ottawa East is creating apoplexy in our ranks. Will he stop asking questions like that? Oh, he is not asking those questions?

Interjections by hon. members.

Mr. E. W. Martel (Sudbury East): There is no limit to --

Mr. Deans: I can’t stand it, I really can’t; it is too much.

Interjections by hon. members.

Mr. Renwick: Why doesn’t the government call another general election and get it over with?

LAND SPECULATION TAX

Mr. Lewis: May I ask the Premier, Mr. Speaker, since the Land Speculation Tax Act in this Legislature was passed largely under false pretences -- pretences which were assumed by Tory members as well as by others and have now been demonstrably proven false -- and since the tax is clearly in a state of serious contention and will continue to be, doesn’t the Premier think it is the better part of common sense and reason to withdraw the bill, to suspend its application --

Mr. P. G. Givens (York-Forest Hill): Good question.

Mr. Lewis: -- or to rescind it until such time as the matter is resolved?

An hon. member: Right.

Hon. Mr. Davis: Mr. Speaker, I find this question --

Mr. Speaker: Order. Order, please.

Hon. Mr. Davis: Oh, sorry.

Mr. Speaker: Do I understand the hon. member for Scarborough West to indicate that this particular bill was deliberately passed under false pretences?

Mr. Deans: The hon. member didn’t say that.

Mr. Lewis: I don’t think I used the word “deliberate.”

Mr. Deans: No, not at all.

Mr. Lewis: I said I think the bill was passed under false pretences.

Mr. Speaker: Was there any inference in that, that there was deliberate deliberation in the false pretences?

An hon. member: No, no.

Mr. Lawlor: It was a lack of deliberation.

Interjections by hon. members.

Mr. J. E. Stokes (Thunder Bay): The Speaker is over-protective today.

Mr. Lewis: I will leave it, Mr. Speaker. Maybe the Premier --

Hon. Mr. Davis: Mr. Speaker, certainly if the leader of the New Democratic Party wants to use the term “false pretences,” I will not --

Mr. Renwick: Come, come, come. The Premier doesn’t need the assistance from the Speaker.

Hon. Mr. Davis: -- suggest that he said that this was deliberate.

Mr. Lawlor: No red herrings.

Hon. Mr. Davis: Listen; give me time. It is going to take me a minute or two to answer this question.

Interjections by hon. members.

Mr. E. M. Havrot (Timiskaming): Why don’t the members of the opposition shut up and listen.

Hon. Mr. Davis: And it will maybe involve a little bit of editorial comment.

An hon. member: Did the leader of the NDP hear that?

Hon. Mr. Davis: May I restate, Mr. Speaker, the intent of the land speculation tax --

Mr. D. C. MacDonald (York South): We know the intent.

Interjections by hon. members.

Hon. Mr. Davis: The intent very simply was, and still is, to discourage land speculation in this province in houses, condominiums, or what have you.

Mr. Lewis: I know that.

An hon. member: It hasn’t done that.

Hon. Mr. Handleman: Yes, it has.

Hon. Mr. Davis: It is the first significant step taken by any government in Canada to deal with the basic problem of inflation.

Mr. Lewis: Not at all.

Hon. Mr. Davis: If one reads the speeches of the national leader of the New Democratic Party --

Mr. Lewis: I do.

Hon. Mr. Davis: -- emanating, I believe, from Vancouver, he appeared to be in support of the land speculation tax except he would plug some loopholes.

Mr. Lewis: No, he appeared to be in support of taking land into the public sector, of seizing land.

Hon. Mr. Davis: Mr. Speaker, I think it would be very regrettable to have members of either party on that side of the House -- particularly this party which is concerned about inflation; these people obviously aren’t -- suggest we rescind this piece of legislation when we are making this genuine effort which we believe will be successful. The legal opinion we have had is that it is deductible. There is no question that it is having a stabilizing effect on the market, both in terms of raw land and in terms of housing. The government will continue --

Mr. Lewis: The Premier is living in a dream world.

Hon. Mr. Davis: -- to deal with inflation within those areas of jurisdiction where we think we can do it. I think it’s very regrettable, Mr. Speaker -- and I will support what the Treasurer said -- that we have had no communication from the federal government and that it would seize this opportunity in this manner to say that in its view it is not deductible when it is making no effort whatsoever to curb inflation on land in this country. I think if those members continue to support blindly the economic policy of the federal government at this moment, then be it on their own heads.

Mr. R. F. Nixon: Maybe the people should decide who is right. Escalate it into a federal issue.

Mr. Lewis: The Premier is overdoing it but I thank him anyway. Mr. Speaker, a supplementary to the Premier: Since the exemptions and the inadequacies in the land speculation tax render it irrelevant as a tool against speculation and since it has paralysed --

Mr. Havrot: That is the member’s opinion.

Mr. Lewis: -- the marketplace for housing, where it was designed to have some effect, why will he not rescind it until the issue is resolved?

Hon. Mr. Davis: Mr. Speaker, I know the leader of the New Democratic Party is far more knowledgeable in these matters than I am --

Mr. Foulds: That is true.

Hon. Mr. Davis: -- but I would say to him with great respect it has not paralysed the market in housing. It has not paralysed the market in resales or sales of new homes.

Mr. Lewis: Nobody is building.

Hon. Mr. Davis: What has happened, Mr. Speaker -- certainly people are building but does the member know what has happened? They have discovered that in the past six, eight or nine months, the number of new units sold to speculators who were hoping to make a $3,000 or $4,000 bill on the resale of those houses has had an impact on the market. There is no question there are houses available for sale today in the hands of speculators and this has had, without any question, an effect on the market but it does not mean there are no houses available for disposition.

Mr. Sargent: There is not a lawyer in Ontario who would agree with the Premier.

Hon. Mr. Davis: I would say with respect, Mr. Speaker, that the delay with respect to certain housing starts does not relate to the land speculation tax. It relates to other matters such as mortgage financing, subdivision agreements, allocation of other problems, not to the land speculation tax.

Mr. Lewis: It relates to all those things, including the land speculation tax.

Hon. Mr. Davis: As I say, I bow to the total knowledge of the leader of the New Democratic Party except in this particular situation. With respect, he is wrong.

Mr. Lewis: No, don’t be gratuitous.

Mr. Singer: By way of supplementary: The Premier has made a --

Hon. Mr. Davis: I thought we dealt with this before.

Mr. Singer: No. He made a grandiloquent peroration, a hymn of praise to himself. Can he give us any statistical background which will establish what he has said about the advance of the market or the steadiness of the market or the slowdown of the market? Does he have any statistical basis whatsoever?

Hon. Mr. Wells: Look around.

Hon. Mr. Davis: Mr. Speaker, I think the member for Downsview probably would have greater knowledge of this than perhaps I would. I would say this --

Mr. Deans: Everybody has more knowledge about everything.

Hon. Mr. Davis: I don’t say that in any critical sense at all.

Mr. Singer: Who says that?

Hon. Mr. Davis: I am saying he can go and talk to the real estate community. They will tell him that listings in some respects are down related to the price of three months ago. He can go to some of the major builders who have sold no units since April 9, who have done some assessment and research and discovered that 25 to 30 per cent of the units sold prior to that date were sold to “speculators.” I don’t say improperly, invalidly, or anything else.

Mr. Singer: Isn’t it strange, with all the facilities at his command, the Premier had no statistics?

Hon. Mr. Davis: I don’t think there’s any question, Mr. Speaker, and I am the first to acknowledge this --

Mr. Lewis: Who are these unnamed people?

Hon. Mr. Davis: -- that the numbers of single units or condominiums being purchased by way of investment, not for use on the market but by way of investment in terms of speculation, exceeded even the rough figures or estimates we were making at the time of the development of the land speculation tax. I would say to the member for Downsview, if he is genuinely concerned about inflation, for heaven’s sake support what we are attempting to do with land because it is the only realistic proposal which has emanated from any government in this country up to this date in 1974.

Mr. Lewis: It is not realistic at all. This programme is a fraud.

Hon. Mr. Davis: It’s not wrong; it is the only one.

Interjections by hon, members.

Mr. Lewis: The government doesn’t control speculation with this tax.

Interjections by hon. members.

Mr. Speaker: Order. Order, please.

Mr. Lewis: There will never be reasonable housing at a reasonable price with this bill. The government has to do other things and it won’t do it. In fact, the government has to fall --

Mr. Speaker: Order.

Mr. Lewis: -- and the government will fall, before there is reasonable housing.

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

Mr. Shulman: How can the Premier expect any apartment builder to begin any new plans, or begin any new apartments, until this matter is settled between the province and the federal authorities? Does he not realize that this means no new apartments will be started until he gets this settled in the courts?

Hon. Mr. Davis: Mr. Speaker, with great respect, while I once again acknowledge the tremendous ability of the hon. member for High Park when it comes to matters of high finance, he is talking about two separate issues. If he is saying that no builder will build an apartment, or a multiple dwelling or a high density building because he cannot resell without the question of the profit being resolved, I won’t argue that. But I should also point out to him that a large number of people who are in the development industry build on the basis of retention of ownership for a basis of investment.

Mr. Shulman: But they can’t be sure.

Hon. Mr. Davis: This will not inhibit the building of apartments as it relates to those who wish to retain ownership. It will not.

Mr. Shulman: They must hold it. They can’t build for resale.

Hon. Mr. Davis: Sure they can. They can indeed. There’s nothing to prevent it.

Mr. Speaker: The hon. member for Kitchener.

Mr. J. R. Breithaupt (Kitchener): A supplementary question, Mr. Speaker: As a result of the statement that has appeared in the press, is the Premier not concerned that the Hon. Mr. Meen has turned “white” and the Hon. Mr. White has turned “mean”?

Interjections by hon. members.

Hon. Mr. Davis: Mr. Speaker, I have, once again, a very high regard for the leadership contender from Kitchener for the year 1976 or whatever, and I think that he shouldn’t be confusing “mean” and “white”, he should be turning red himself in embarrassment at the very high quality of question that he has just asked.

Mr. R. F. Nixon: I should have turned red at the Premier’s mistake.

Hon. Mr. Davis: I would say to the hon. member for Kitchener, who surely should have some knowledge of this subject as well --

Mr. Breithaupt: I spoke on the bill, too. The Premier wasn’t here.

Hon. Mr. Davis: Sure. In fact, I thought he supported it at one point in time. Tell me what other government --

Mr. Lewis: They did. They supported it in principle.

Hon. Mr. Davis: -- in this country, particularly the federal government, has taken any concrete steps to stabilize or reduce the price of land in Canada? Tell me. Tell me.

Hon. Mr. Winkler: Or anything else, either.

Interjections by hon. members.

Mr. Speaker: There has been a reasonable and sufficient number of supplementaries. The hon. member for Scarborough West.

STRIKE AT FORT FRANCES CLINIC

Mr. Lewis: A question of the Minister of Labour, if I may: Is he aware that the so-called talks between the little CUPE local of 23 people in Fort Frances lasted for a couple of hours yesterday in Thunder Bay, after the minister’s officials tried for a week or 10 days to get the management together, and that there is now no prospect whatsoever of a settlement in sight of a strike at a medical clinic that has proceeded in excess of six weeks?

Hon. Mr. MacBeth: Mr. Speaker, I realize that they have had recent meetings and --

Mr. Lewis: One.

Hon. Mr. MacBeth: -- that they have come to an impasse, and I’m not ready to admit that it’s the end of it. I agree that nothing further can be accomplished immediately, but I hope it’s only a temporary impasse and that we can pick up the meetings again.

Mr. Lewis: By way of supplementary, if I may: What does one do with a classic -- and this surely is -- a classic little labour situation of this kind, where a union follows all of the procedures laid down under the Ontario Labour Relations Act and wins its certification -- in February of 1973, if memory serves me -- and to this day cannot receive recognition from the management group -- in this case, doctors -- with whom it is endeavouring to deal honourably and legitimately under the legislation? And how can one talk about good-faith bargaining when that kind of situation can be allowed to persist?

Hon. Mr. MacBeth: Mr. Speaker, I was asking the same question this morning --

Mr. Lewis: Was he?

Hon. Mr. MacBeth: -- and, as you are aware, there are still agreements -- of course it takes two to make an agreement -- but if the two parties can’t agree, I’m afraid that that’s still where it is. Now, I’m not saying it’s satisfactory --

Mr. Lewis: But what happens? They are certified under the law.

Hon. Mr. MacBeth: I know they are certified, but still they have to agree upon the contract. And if they can’t --

Mr. Lewis: The minister wouldn’t let Ford thumb its nose at workers that way. Why does he let doctors do it?

Hon. Mr. MacBeth: Well, we have no authority to force them to agree. It is by agreement.

Mr. Deans: It is because they are small and don’t have any power.

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

Mr. Reid: Would the minister consider some legislation, perhaps amending the Employment Standards Act, to provide under that Act a minimum contract dealing with wages, fringe benefits, union security and so on, with the view that if an agreement wasn’t reached by a newly certified bargaining unit within a certain amount of time, then that minimum agreement would go into effect?

Mr. Good: That sounds like a good idea.

Hon. Mr. MacBeth: Mr. Speaker, I don’t want to say I endorse that, but I will certainly examine it.

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

Mr. Foulds: A supplementary, Mr. Speaker: Is the minister aware that there have been only two mediation meetings since the strike began and that both of those meetings have been abortive? And what have his officials been doing to bring the parties together, and especially to bring the doctors to the bargaining table since they have thrown up every obstruction in the last six weeks?

Hon. Mr. MacBeth: All I can say, Mr. Speaker, is that they have been doing their best --

Mr. Lewis: He’s right; it is incredible. Absolutely incredible.

Hon. Mr. MacBeth: I think that they have been working as best they can to get the two parties together but, as I say, it still rests on agreement.

Mr. Speaker: Is this a supplementary?

Mr. Deans: Yes, one supplementary.

Mr. Speaker: A supplementary; the hon. member for Wentworth.

Mr. Deans: May I ask the minister, a little tentatively, whether he would consider establishing an arbitrator to hear the positions of both parties and to make a submission to the minister which may well be considered then as being a compulsory contract since it is a first contract?

Mr. Reid: Is the member asking for compulsory arbitration?

Hon. Mr. Handleman: Sounds like it.

Hon. Mr. MacBeth: Mr. Speaker, I must admit I don’t know whether I have any power to do that or not. The member is talking about compulsory arbitration under a first contract. I don’t know whether I have that power, but I will make inquiries concerning it.

Mr. R. F. Nixon: Bring in an Act in the Legislature.

Mr. MacDonald: What about Darrigo’s food markets, where we have the same situation?

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

GASOLINE-SAVING DEVICE

Mr. Lewis: I want to ask the Minister of Industry and Tourism just one question. Regarding the people who go on the ministry’s various world tours, selling their Ontario products abroad, does the minister check out the authenticity of what it is they are engaged in? I am referring specifically to a company called Turbo-Vapour Injector, which I believe went on a trip to the UK at the end of 1973, and whose component, which is added to cars, is now under investigation by the Better Business Bureau in Detroit, in the United States, and I gather is being looked at by the Attorney General’s office in Michigan for claims far beyond the apparent capacity.

Hon. C. Bennett (Minister of Industry and Tourism): Yes, Mr. Speaker, we do.

Mr. Lewis: Could the minister find out something about this particular instance and let us know what substance he feels there is to this particular marketable item?

Hon. Mr. Bennett: Mr. Speaker, may I indicate very clearly to the House, first of all, that TVI did not go on our trade mission under the name of TVI. TVI went for the ministry and for the Province of Ontario under the name of Promotional Advertising Systems Ltd. They were promoting and selling signs.

Mr. Lewis: Oh!

Mr. Sargent: An American company in Canada.

Hon. Mr. Bennett: While I am aware of the situation that the leader of the NDP is speaking of, TVI, which is a subsidiary of Promotional Advertising Systems Ltd., went to England two or three days prior to the official commencement day of the mission. They took with them a subproduct that they happened to manufacture or are agents for.

Mr. Sargent: They are an American company.

Hon. Mr. Bennett: They were selling the very product that the hon member is referring to, which can be attached to automobiles.

The particular item that the leader of the NDP is asking about, sir, has been referred to the Ontario Research Foundation for verification as to whether it is as good as they claim it to be in the saving of petroleum in the operation of an automobile. The very firm has also asked the government of Ontario if we would use it on some of the OPP vehicles and other government vehicles that are used by the Province of Ontario, and I have now requested the Minister of Government Services (Mr. Snow) and the Minister of Transportation and Communications to look at that.

Interjections by hon. members.

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

Mr. Lewis: There was more to this than I realized when I asked it. We will come back to it.

Hon. Mr. Bennett: If the member asks another I will answer that one too. Ask another one.

Mr. Renwick: They have taken the minister in, too.

Mr. R. F. Nixon: He has a meeting on TVI every morning.

TRUCK FREIGHT RATES

Mr. Sargent: Mr. Speaker, a question of the Minister of Transportation and Communications. Due to the fact that for about four years now, Mr. Minister, in the multi-million- or billion-dollar trucking industry, we have been the only administration which has not had a review of freight rates; and in view of the fact that --

Mr. Havrot: Question.

Mr. G. Nixon (Dovercourt): Ask the question.

Mr. J. M. Turner (Peterborough): Question.

Mr. Sargent: -- the freight rates have a great bearing on the high cost of living in Ontario, what tie-up is there between the trucking industry and the Conservative Party in that the minister will not call hearings of the Highway Transport Board to review the rates?

Now the minister has been telling me all this last session that he is going to put a stop --

Mr. Speaker: Order, order. The hon. member has asked his question.

Mr. Sargent: The question is, when is the minister going to quit kidding us and get down to action in this?

Hon. Mr. Rhodes: Mr. Speaker, the answer to the first part of the question is that there is no tie-up between the trucking industry and the Conservative Party, and the answer to his second question is, as I have told the hon. member on several occasions, we are checking with other jurisdictions to see what can be done and how it is being done.

He is totally wrong when he says all other jurisdictions have complete control. That is not correct. He himself knows full well that there are tariff bureaus in many other jurisdictions where only rates are filed. I told him exactly what we were trying to do, and as early as yesterday I explained to him that it was complicated and we were looking at it. Now if he wants to set me up for a question for tomorrow, I will meet him outside the House after.

Mr. Sargent: A supplementary, Mr. Speaker.

Mr. Roy: The minister is no expert on conflict of interest.

Mr. Sargent: In view of the fact that the minister says there is no tie-up between the trucking companies and his party, will he go on record as saying that he gets no funds for his pot from them?

Hon. Mr. Rhodes: Yes, Mr. Speaker, I will certainly go on record that I get no funds from the trucking industry in my campaigns.

Mr. Sargent: I am not saying the minister, I am saying the party.

Interjections by hon. members.

Hon. Mr. Rhodes: Now may I ask him a question as to where he gets his?

Mr. Sargent: I’ll tell him where I get mine.

Interjections by hon. members.

Mr. Speaker: Order. Order. The hon. member for Wentworth.

Hon. J. W. Snow (Minister of Government Services): United Appeal?

Hon. Mr. Davis: The member for Grey-Bruce doesn’t get it from United Appeal?

Hon. Mr. Snow: Nor from the NDP either.

Hon. Mr. Davis: The hon. member might.

REGIONAL GOVERNMENT OFFICE FACILITIES

Mr. Deans: I would like to ask a question of the Minister of Government Services. If it were the request of the Hamilton-Wentworth regional council that the Government Services ministry used its expertise to evaluate the three offers currently before them with regard to the provision of office facilities, which seems to have caused considerable turmoil, would the Government Services ministry be prepared to make that expertise available to them?

Hon. Mr. Snow: Mr. Speaker, I think that’s a very hypothetical question --

Mr. Deans: No it isn’t. Would the minister do it if they asked him?

Hon. Mr. Snow: If I were to receive such a request --

Mr. Roy: Don’t give the hon. member an answer on your own.

Hon. Mr. Snow: -- officially from the city of Hamilton, I would certainly consider it.

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

MILLBROOK SEWAGE TREATMENT PLANT

Mr. Good: Mr. Speaker, a question of the Minister of the Environment: What is he doing to clean up the mess that has developed down in the town of Millbrook where since 1967 they have been trying to get approval for a sewage treatment plant, whose plans and applications and bylaws have been lost down here in government bureaucracy?

Interjections by hon. members.

Mr. Good: Twice.

Hon. W. Newman (Minister of the Environment): I think that may be rather an irresponsible statement on the member’s part because we do have decentralization of departments --

Mr. R. F. Ruston (Essex-Kent): That’s not the only town.

Hon. W. Newman: We are very much concerned --

Mr. R. Haggerty (Welland South): The minister should have a responsible policy.

Hon. W. Newman: -- and we have over 500 projects going on in this province now and we are trying to help the people of this province get their problems sorted out. If the member has a particular problem --

Interjections by hon. members.

Hon. W. Newman: At least we are looking after the people of the province, more than they are over there who are talking about it. We’ll be glad to look into it. I will get a report back to the member as soon as possible on Millbrook. Okay?

Mr. Good: A supplementary: In view of the fact --

Mr. R. F. Nixon: The minister does not know what he is talking about.

Mr. Good: -- that their actual bylaws were laws -- and I’m sure the minister is aware of this -- and there is a two-year delay they say before approval can be given, will the minister do everything in his power to shorten that time period and would he consider giving some financial assistance to the municipality because of this delay and the increased cost which will result, especially when it was all the government’s fault that the bylaws were lost?

Hon. W. Newman: Mr. Speaker, I will look into the total matter and report back to the member.

Mr. Singer: That’s the minister’s irresponsibility.

Mr. Speaker: The hon. member for Sandwich-Riverside. Then the hon. member for Ottawa East.

SHOPPING MALL PARKING LOTS

Mr. F. A. Burr (Sandwich-Riverside): Thank you, Mr. Speaker. I have a question of the Minister of Transportation and Communications regarding fire routes at shopping centres. When will the minister introduce legislation to extend the definition of highway to include the privately owned parking lots at shopping malls, thereby enabling the police and fire departments to give the public proper protection?

Hon. Mr. Rhodes: Mr. Speaker, I have not given any consideration to that particular matter since I have taken this portfolio. I looked into that particular matter when I was in municipal politics and I recognize what are some of the concerns of the hon. member, I will be very happy to take it under consideration in any further amendments we may be making to the Highway Traffic Act.

Mr. Burr: As a supplementary: Does the minister realize that some communities are trying to pass this legislation and we want it to be province-wide to avoid having everybody come in with individual legislation?

Hon. Mr. Rhodes: Yes, Mr. Speaker, I am aware there are those individual municipalities attempting to pass such legislation.

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

CERTIFICATES OF MECHANICAL FITNESS

Mr. Roy: I have a question of the same minister, the Minister of Transportation and Communications. In light of the fact that no legislation or regulations have been brought in to tighten up the system of certificates of mechanical fitness, and in light of the fact that was brought to his predecessor’s (Mr. Carton) attention last year and he promised he would bring in legislation before last Christmas, why is he waiting to curb this abuse and prevent the frauds that are going on by allowing unsafe motor vehicles on our highways?

Hon. Mr. Rhodes: Mr. Speaker, I believe the hon. member has not really been doing his homework as adequately as he professes to do because we have --

Mr. Roy: I checked it out last week.

Hon. Mr. Rhodes: -- tightened up on the mechanical fitness requirements. We are at present developing a process by which only authorized personnel at designated facilities will be permitted to do this sort of mechanical fitness. We have publicly recognized there are loopholes in the former procedures but we are tightening it up, using qualified licensed mechanics who will be registered with the ministry to perform this type of inspection.

Mr. Sargent: Name 10 in Ontario.

Mr. Roy: Might I venture a quick supplementary? In the light of his statement how is it that none of the mechanics or garages I have checked with in the Ottawa area has received any directive since the matter was brought up last year?

Mr. Sargent: Not one.

Mr. Roy: Has he sent directives to them?

Mr. Sargent: He doesn’t know what he is talking about.

Hon. Mr. Rhodes: Mr. Speaker, I don’t know whether or not these directives have gone out. As I said we have been developing this. We are hiring extra people.

Mr. Roy: He had better check it out.

Mr. Cassidy: He is thinking about it.

Hon. Mr. Rhodes: No, we are going ahead with a programme of developing --

Mr. Roy: But he hasn’t advised them yet.

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

ACCESS ROAD FROM SIOUX LOOKOUT

Mr. Stokes: I have a question of the Minister of Transportation and Communications.

Interjections by hon. members.

Mr. Speaker: Order, please. There are several members who wish to ask questions and the time is just about up.

Mr. Stokes: Is the minister aware there are NORT funds and DREE funds being used for a resource access road from Sioux Lookout to Highway 599 and that road is going to intercept Highway 599 about seven miles north of Savant Lake? Will the minister intercede on behalf of the people of Savant Lake --

Mr. Sargent: The minister should resign now.

Mr. Stokes: -- to ensure that connecting road, which is so vitally important to the people of Savant Lake for educational and service purposes comes out at Savant Lake rather than in the bush seven miles along Highway 599?

Hon. Mr. Rhodes: Mr. Speaker, I am aware of the fact that the road the hon. member refers to is being constructed under NORT. I don’t know the exact details on it because, as he well knows, it’s being carried out under the Ministry of Natural Resources in the north Design Programme.

Mr. Stokes: Is he not a member of the committee?

Hon. Mr. Rhodes: I do not serve on the committee; my parliamentary assistant does. I certainly will bring that matter to the attention of the committee to report back.

Mr. Speaker: The hon. member for Downsview.

COMPLAINTS TO COLLEGE OF PHYSICIANS AND SURGEONS

Mr. Singer: Mr. Speaker, I have a question of the Minister of Health: Could the Minister of Health tell us of the 222 complaints received by the College of Physicians and Surgeons for the five-month period ended March 31, the extent to which the complainants were called in to give evidence, besides their evidence in writing; the extent to which the complainants were advised as to the complete result of the deliberations of the college; and whether or not there has been any attempt by the department to ascertain the adequacy of the handling of these 200-odd complaints?

Hon. F. S. Miller (Minister of Health): No, Mr. Speaker, I can’t answer that question. I think the hon. member well knows that we have taken steps to give rights to complainants under the new health disciplines bill. Therefore, I am not looking back into the past; I am looking into the future.

Mr. Singer: By way of supplementary, could the minister undertake to try to get us some meaningful statistics, say, for that five-month period, in order that the House will be able to deal adequately with those provisions of the Health Disciplines Act when they come before us in committee of the whole House?

Hon. Mr. Miller: I am sure I’ll try to, Mr. Speaker, but I know my hon. friend is simply going to move third reading on my behalf.

Mr. Deans: Supplementary.

Mr. Speaker: The hon. member for Wentworth.

Mr. Deans: Supplementary: Does the minister feel that the action taken by the College of Physicians and Surgeons, I believe it was, with regard to Dr. Mele is in keeping with the magnitude of the crime that he committed by taking that amount of money out of the public purse; and doesn’t he recognize that people go to jail for stealing a loaf of bread in the Province of Ontario?

Hon. Mr. Miller: Mr. Speaker, I think the hon. member is confusing two roles. One is the right of the College of Physicians and Surgeons to determine whether or not the services were properly rendered or rendered at all --

Mr. Deans: If they were rendered at all.

Hon. Mr. Miller: -- and to make a decision as it relates to his right to practise. The second right is that of the province or the Attorney General’s office to review the case if any fraud was proven or alleged and, if the case can be built, to bring it through the courts. This has happened in a number of instances in the past. I believe some 10 cases were turned over some while ago.

Mr. Speaker: A very short supplementary. There are just a few moments.

Mr. Deans: What does the minister intend to do in this case? Does he turn it over to the Attorney General?

Hon. Mr. Miller: I don’t make that decision, Mr. Speaker.

Mr. Deans: Who does?

Mr. Speaker: The hon. member for Kent.

LAND SEVERANCES

Mr. J. P. Spence (Kent): Mr. Speaker, I have a question of the Minister of the Environment.

Is it true that applications for severances are processed slowly? I have been told that for the severance of a parcel of land the landowner has to send in a $10 fee with his application and, before the land division committee can deal with it, it has to have a receipt from the Ministry of the Environment for the $10. In some counties where there are no regional offices they have to send the $10 to London and then from London to Windsor. Would the minister speed up the process of severances for land in the province?

Hon. W. Newman: Mr. Speaker, in the case of land severances in the various areas of the province, some are done by the health units themselves and some are done by our staff. Under part 7 of the Act, there is a $10 fee for severances. If the member is having a particular problem in his area and if he’d like to let me know about it, we’d be glad to try to expedite matters for him.

Mr. Speaker: The time for oral questions has expired.

Petitions.

Presenting reports.

Mr. L. C. Henderson (Lambton): Mr. Speaker, I beg leave to present the final report of the select committee on land drainage.

Interjections by hon. members.

Mr. Cassidy: The member’s raison d’etre will now disappear.

Mr. Stokes: And there’ll be no more talk about reservoirs in northern Ontario.

Interjections by hon. members.

Mr. Henderson: Mr. Speaker, I have the honour today to table the final report of the select committee on land drainage which was appointed by resolution of this House on June 30, 1972. Before outlining some of the findings and the recommendations of the committee, I should like to thank the Premier of the province --

Interjections by hon. members.

Mr. Lewis: The member will notice that the Premier left when the member got to his feet.

Mr. R. F. Nixon: There he goes.

Mr. Lewis: The hon. member is more indebted to the Premier than anyone in the House.

Interjections by hon. members.

Mr. Cassidy: How many thousands?

Mr. Henderson: I am. I would also like to thank the Minister of Agriculture and Food of this province (Mr. Stewart) --

Interjections by hon. members.

Mr. Speaker: Order, please.

Mr. Henderson: -- for their foresight in recognizing the need for this study --

Interjections by hon. members.

Mr. Henderson: -- the members of the staff for their dedicated work and, last but not least, my colleagues, the members of the committee.

Mr. Lewis: Was their report printed in Lambton county?

Mr. Henderson: As instructed, the committee visited every area in Ontario --

Mr. Deans: Twice over.

Mr. Lewis: As often as possible.

Mr. Foulds: By the ONR private car.

Mr. Henderson: -- and met and held hearings at 40 different locations.

Mr. Lewis: In and out of the province.

Mr. Henderson: Hearings were held in both the afternoon and evenings and thus we held 80 separate meetings.

Mr. Deans: Not on the same day though.

Mr. Henderson: There was an average attendance of 25 people at each hearing, so members can see that the committee met and discussed drainage with approximately 1,600 to 1,700 people throughout this province. In addition, the committee received 590 written submissions and briefs.

Including the recommendations made in our interim report, which was tabled in December, 1972, the committee’s final report makes 120 recommendations for the improvement of drainage legislation.

Mr. Deans: One per person?

Mr. Henderson: I propose at this time to outline briefly what I consider to be the more important matters --

Mr. Lewis: Just consider it read.

Mr. Henderson: -- which the committee has considered and recommended on.

Mr. W. Hodgson (York North): The leader of the NDP is not interested in the farmers of the province.

Interjection by an hon. member.

Mr. Henderson: Mr. Speaker, it appears the leader of the NDP is not interested in the farmers drainage in this province.

An hon. member: The NDP never were.

Mr. Henderson: If he was he would pay a little attention.

Mr. Lewis: No need. I will read the report. Did the member commission this cover?

Mr. Henderson: The petition was taken care of by the committee. If the member would read the book it would tell him.

Mr. Lewis: I will read everything. I don’t need the member’s submission.

Mr. Henderson: Very good.

Mr. Speaker: Order please.

Mr. Henderson: Early in the hearings, the committee felt that they had received sufficient information to prove the value of proper agricultural drainage to the farmer.

For example, once water is removed, the soil warms up five times as fast.

Poorly drained land would take two weeks to become warm enough for germination, while properly drained land would take two days --

Mr. Deans: That’s a piece of useless trivia.

Mr. Henderson: -- thereby extending the growing season by 12 days. In many cases this will double production.

The committee believe that in this time of food shortage, land drainage is one way of helping to minimize the problem. It also will make agriculture in Ontario a more viable industry.

It was with this thought in mind that many of our recommendations came about.

It also became apparent that there were some areas of concern throughout the province, and as a result the committee commissioned research on the problem of land-use conflicts, environmental conflicts, and benefit/cost relationships. The results of this research were interesting and valuable.

First of all, it was revealed from the research that the environmental conflicts resulting from drain construction were negligible but still important enough to be guarded against. Secondly, the land-use conflicts between urban and rural areas were not so serious that they could not be overcome by common sense and perhaps tidying up some parts of the legislation. Thirdly, it was revealed to us from the research that approximately 30 per cent of the municipal drains built in Ontario were not returning proper benefits in relation to costs.

Accordingly, Mr. Speaker, we have made recommendations in our report requiring that in the future a benefit/cost certificate will be required to be filed on any new drain constructed under the Drainage Act. As well, we are recommending that an environmental impact statement be filed with the municipal council at the same time as the benefit/cost statement is filed.

These two statements will be filed as a result of a petition which comes before council in the usual way or at the request of one or more ratepayers who feel that drainage is needed in their particular area. In either case, it will be the responsibility of the municipal council to decide on whether to accept such petitions. The first responsibility of the municipal council is to appoint an engineer whose duty it will be to define the area to be benefited and in so doing to confirm to council whether or not the petition is valid, and if it is not valid at the time of submission, to indicate to the petitioners how many more signatures are required in order to make the petition valid.

We have recommended changes in the concept of what is required in a valid petition. We are now recommending that the validity of the petition be calculated as a majority of the number of properties to be benefited. A valid petition would consist of a majority of the number of properties or alternatively 60 per cent of the acreage in the area to be benefited as determined by the engineer.

The committee is also recommending that the Minister of Agriculture and Food be given the right to petition for a drain in order to provide full-time farmers with their legitimate drainage requirements thus preventing obstructions by groups of landowners who are not interested in draining the land.

The committee is convinced that one of the most important officials in the construction and maintenance of drains in rural Ontario is the drainage commissioner. It is recommended in our report that the title be changed from drainage commissioner to drainage superintendent --

Mr. F. Laughren (Nickel Belt): Yes; don’t overdo it.

Mr. Henderson: -- and that every township or municipality in Ontario which wishes to construct a drain under the Drainage Act be required to qualify and appoint a drainage superintendent.

Mr. Cassidy: That’s a pretty revolutionary change.

Mr. Havrot: Why doesn’t the member listen?

An hon. member: What would he know about it?

Mr. Laughren: The member has gone too far for rural Ontario.

Mr. Henderson: I am sure, Mr. Speaker, that the members opposite, if they take long enough, will understand.

An hon. member: The member for the Islands will have to have a drain.

Mr. Henderson: The member for the Islands will certainly require drainage.

We are recommending also that the salary of the drainage superintendent be subsidized from provincial funds in much the same way as road superintendents are presently subsidized by the Ministry of Transportation and Communications.

For many years, there has been an arbitrator or body of arbitration of some kind to settle disputes arising under the Drainage Act. This person was known as the drainage referee and consisted of a lawyer or a judge skilled in drainage law with a minimum of 10 years’ experience as a practising lawyer. For a short period, the Ontario Municipal Board acted as drainage referee.

Mr. Roy: Does he have to be a Tory?

An hon. member: No, he doesn’t.

Mr. Henderson: It’s very interesting, Mr. Speaker, that the member for Ottawa East mentions that. The present drainage referee was federal Liberal member of Parliament for Kent riding early in the 1960s.

Mr. Roy: Good. Did he do a good job?

Mr. Henderson: Yes, I would have to agree he has done a very good job.

An hon. member: The government is going to do away with him.

Interjections by hon. members.

Mr. Henderson: If the member will wait until I complete my remarks, Mr. Speaker, he will understand.

An hon. member: Prejudice.

Mr. Henderson: The committee, Mr. Speaker, was not at all certain that dissatisfied or disaffected landowners in the matter of drainage under the Drainage Act were being afforded every possible opportunity to have their cases heard and judged properly. There were many reasons for this doubt and in our hearings, it was made plain to us that the ordinary citizen was confused by the legal ramifications to which he was required to submit himself in order to have what he thought was ordinary justice.

While we mean no criticism of the present drainage referee, who has served this province well for so many years, nor of the many county court judges who have done likewise, the committee recommends that the appellate system under the Drainage Act be changed to a system which is more flexible, less expensive and more attuned to people’s needs.

We are therefore recommending the establishment of an Ontario drainage appeal tribunal which will hear disputes under the Drainage Act in an informal, inexpensive and sympathetic manner so that people can feel that their rights are being preserved and that they are being given a fair hearing of their complaints.

In our recommendations regarding the organization and administration of this tribunal, we have borrowed heavily from the ideals and philosophies of the Assessment Review Court and Land Compensation Board which presently are hearing appeals throughout the province.

Financial assistance to municipal drains and financial assistance to farmers wishing to drain their own lands has been the policy of this government for many years. Between 1967 and 1969, ARDA assistance was also available to all drains in Ontario thus providing two-thirds of the cost of the drain, to be paid on all drains constructed under the Drainage Act. This rate of subsidization was so attractive that farmers, municipalities, contractors, manufacturers, all began furiously to build drains and in very short order, the ARDA funds were exhausted and the programme was discontinued.

This caused a great deal of difficulty in the drainage industry, especially to the contractors and manufacturers, and was really not helpful in the long run. We were told in many of our hearings that the cost of drains built during this period escalated rapidly and this contention was confirmed by the research which the committee commissioned on costs of drainage works.

Bearing in mind the experience where high drainage grants resulted in higher costs, pressure on manufacturers, engineers, municipalities, contractors, the committee is not recommending any change in the present grant structure under the Drainage Act.

In the Tile Drainage Act, however, the committee is recommending major changes. The committee believes that it is vital that individual farm underdrainage be installed at a rapidly increasing pace. Our benefit/cost studies on outlet drains indicated that these drains are not really profitable until adjacent farmers tiled their lands into the drain. We were informed of one municipal drain where the fact that one farmer tiled 20 acres into the drain, put the drain in a plus benefit/cost position. Your committee is convinced that increased support should be given to farmers who wish to tile their lands.

Accordingly, we are recommending that the percentage of loan to be given under the Tile Drainage Act be raised from 75 per cent to 90 per cent, and the loan be made over a period of 10 years at no interest. The committee has calculated that the present lending structure under the Tile Drainage Act, (that is, 75 per cent of the cost at 4 per cent interest) represents a subsidy of 16 per cent. Our proposal -- 90 per cent of the cost at no interest -- will mean a subsidy to the individual farmer of 32 per cent. Since the present rate of subsidy to most counties to municipal drains is 33-1/3 per cent of construction, then it is the committee’s contention that a 32 per cent assistance to individual farmers is not only vital but appropriate.

The committee has recommended a new, extensive role for the Ministry of Agriculture and Food. Specifically, we recommend that the ministry constitute a new farm drainage branch, which will carry out the wider responsibilities which are recommended in our report. The ministry in the future will have to qualify and certify drainage superintendents. They will be required to produce data and statistics which will allow them to monitor the performance of a contractor, engineer and municipal councils. The amount of money which will be administered by the drainage branch will necessarily be increased and will require more staff and more expertise.

One of the items of increased funding which will be required for the Ministry of Agriculture and Food is the decision by the committee that certain barriers to agricultural land drainage should not be permitted to obstruct and frustrate farmers in obtaining the efficient drainage which they need. The greatest barrier to agricultural land drainage, in our opinion, is the network of county, township and provincial highways. The cost of carrying drainage channels across, through or under these roads is becoming greater every year, and such crossings are becoming more frequent.

Until now, three departments of government have been involved -- the Ministry of Transportation and Communications, the Ministry of Treasury, Economics and Intergovernmental Affairs and the Ministry of Agriculture and Food.

The costs of these crossings are being subsidized now by the Province of Ontario, and rather than have it continued that three ministries be involved at various stages, the committee is recommending that the funds presently appropriated for road crossings of all kinds be consolidated within the Ministry of Agriculture and Food and paid by that ministry to the municipalities.

More recently, the Ministry of Transportation and Communications has recognized the need for an open-ended budget allotment to cover these and other costs associated with municipal drainage. This will do two things. It will resolve some confusion that the local levels of government have as to which ministry they should be dealing with and, secondly, it will relieve the local township and county road budgets of undepreciable drainage crossing costs which have until now come out of those budgets.

In line with this thinking, that artificial barriers to drainage should not be permitted to frustrate the requirements of farmers, the committee has recommended that where farmers underdrain fields and in so doing must cross the county, township or provincial road to obtain a sufficient outlet the cost of crossing this road be subsidized by the Ontario Ministry of Agriculture and Food to the extent that roads are presently subsidized.

During the course of our hearings we had an unexpected situation arise where a drain which had completely complied with all the requirements of the Drainage Act, was halted by an injunction issued by a county court judge on behalf of certain environmental groups.

To date, this situation has never been resolved. The injunction has never been brought to trial and, in effect, a stalemate exists.

The committee is concerned that legislation passed by this assembly should be so easily frustrated. The committee is recommending that in the future no such injunction be permitted to halt work on a drainage works properly constituted under the Drainage Act. We are also suggesting that the Minister of Agriculture and Food be named as a party in any injunction proceeding so that, if necessary, he may take action if the municipal council does not.

We are also recommending that in the case of the drain of which I am speaking, this assembly pass a special Act requiring the municipality involved to take the necessary action to bring the matter to trial.

Finally, Mr. Speaker, I wish to speak of a matter which the committee found to be not only interesting, but --

Mr. Foulds: Finally.

Mr. Henderson: -- pertinent to the situation in Ontario. It is well known that this committee has studied drainage and other matters in other jurisdictions outside of Ontario.

We visited Quebec, Nova Scotia, Newfoundland and Manitoba in Canada, and the states of Florida and Michigan in the USA. In Manitoba and Florida we found a coordinated system of water management and control over water as a resource.

Further research and further study indicated that similar action had been taken in the state of Nebraska. Here, a natural resources commission has complete control over all matters relating to water: recreation, conservation and flood control, drainage, irrigation, mosquito control and so on.

We found a similar situation in the United Kingdom. The Parliament of the United Kingdom passed the Water Act of 1973, reducing the number of water control bodies in the United Kingdom and Wales from 1,500 to 100. This was done after many years of study and with much co-operation and support given to the programme by the government.

While the situation in Ontario is not quite as difficult as those which were in Nebraska and Florida, Manitoba and the United Kingdom, still the committee is aware of the divided jurisdiction which deals with water in this province.

For example, our report lists 20 different pieces of legislation in Ontario which have reference to water control or water management. We feel that there is much to be learned from the experience of these other jurisdictions in the one-agency control of water.

We are therefore recommending in our report that the government of Ontario, as a plan for the future, institute a task force or committee. It would study the possibility of putting the control of water, as a resource, into one ministry of government in order to reduce the amount of conflict and the amount of confusion which now arises in the province with regard to what some people might say is our most essential resource -- the water of this province.

I commend this report to the government and to this legislative assembly.

Hon. Mr. Wells: Mr. Speaker, I would like to table the report of the ministerial commission on the organization and financing of the public and secondary school system in Metropolitan Toronto.

Mr. Cassidy: The minister is not going to try to break his record for statements, is he?

Mr. Speaker: Motions.

Introduction of bills.

JURIES ACT

Hon. Mr. Welch moves first reading of bill intituled, the Juries Act, 1974.

Motion agreed to, first reading of the bill.

PUBLIC INSTITUTIONS INSPECTION ACT

Hon. Mr. Welch moves first reading of bill intituled, An Act to provide for the Inspection of Public Institutions by Public Visitation.

Motion agreed to, first reading of the bill.

ONTARIO SCHOOL TRUSTEES’ COUNCIL ACT

Hon. Mr. Wells moves first reading of bill intituled. An Act to amend the Ontario School Trustees’ Council Act.

Motion agreed to; first reading of the bill.

Hon. Mr. Wells: Mr. Speaker, these are just housekeeping amendments.

HIGHWAY TRAFFIC ACT

Hon. Mr. Rhodes moves first reading of bill intituled, An Act to amend the Highway Traffic Act.

Motion agreed to; first reading of the bill.

Hon. Mr. Rhodes: Mr. Speaker, very briefly, this bill contains provisions relating to two separate parts. The first is legislation prescribing the method of vehicle permit issue and display of number plates and the validation devices in connection with the use of a multi-year licence plate and permit.

Secondly, in relation to the North York traffic tribunal pilot project, provision is made to permit the justice to impose a lesser fine or no fine at all in respect to certain offences on a person who has attended a driver improvement clinic. The legislation also provides for the designation of areas in which this programme may be applied.

Mr. Lewis: Mr. Speaker, on a point of privilege. I wish to get rid of a point of privilege about which I feel a little embarrassed; it has been hanging around for a long time, and I want to get it over with.

Mr. Speaker, yesterday I very righteously indicated to the House that I hadn’t used the word “lie,” as the minister had indicated I had done back in questions and answers in the Legislature about housing matters. He sent to me a photostat of Hansard today which indicates quite firmly that on May 24, 1974, there is attributed to me in print, quite explicitly, “Mr. Lewis: No, that is a lie,” for which, if I used the phrase, I apologize profusely. It is not a word that I use easily or lightly at any time. Maybe I should check the instant Hansard more carefully, but I am sorry if I pretended it didn’t exist.

Hon. Mr. Winkler: The member is getting soft.

Mr. Speaker: Orders of the day.

THIRD READING

The following bill was given third reading upon motion:

Bill 70, the Denture Therapists Act.

Clerk of the House: The 16th order, resuming the adjourned debate on the motion for second reading of Bill 87, An Act to amend the Assessment Act.

ASSESSMENT ACT (CONCLUDED)

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

Mr. M. Cassidy (Ottawa Centre): Mr. Speaker, I have a few more comments to make about the bill on which the debate began yesterday.

The thing that concerns us about this bill is the evidence that the government has now abandoned the consistent principle of assessment and the very strong fear that that abandonment will continue now and forever more without any effort to change it.

I’ve been looking back at the programme whereby the Ontario government has been involved in assessment. The history goes back to after the war, 25 or 30 years ago, when it began to worry about equitable assessment within the assessing jurisdictions. Later on it worried itself about the training of assessors; it set up assessment officer courses at the community colleges and that kind of thing. Ultimately, in 1972, we had the assumption by the province of the assessment process, and we had the legislation which was designed to bring market value assessment into force in the province by 1975.

Concurrent with that, Mr. Speaker, we had a very lengthy study of assessment, along with other parts of the taxation process in the province, by the Smith committee, which reported I believe in 1966 or 1967, and which probably provided one of the intellectual grounds for the province in making its decision to go to market value assessment.

But now we have a deferral. We have a temporary and possibly permanent abandonment of market value assessment or anything like it. We have a government which has consistently shown it is afraid of the consequences of going to any equitable form of property assessment and will seek, therefore, not to do it before an election.

Because of the way in which it mismanages the whole affair, it’s safe to predict that in 1978 or 1979, were this government in office, it would be doing the same thing once again. Now I expect some other results will take place, Mr. Speaker, but nevertheless they are simply handing the whole thing, kit and caboodle, to the next government of the province after 1975.

Frankly, I would wish for a bit more intestinal fortitude, to use the Premier’s words, on the part of the minister and on the part of his ministry and on the part of the government. It’s just a year and a half ago that the then Minister of Revenue (Mr. Grossman) was boasting before the Tax Executives Institute that it would be possible to complete the market value assessment of the province by September of 1973. He did not appear to feel it was a difficult problem to complete the assessment by that time and he expected then that the rolls would be available by 1974 for use in 1975.

Well you know, if the government had stuck to its guns at that time we could have a much more equitable system of assessment, and therefore of local property tax than we have at this time. Two things were needed at that time:

First, the determination to continue with the equitable system of market value assessment; recognizing, however, that an assessment based on 1971 or 1972 values would be below the market values that prevailed at the time the new rolls came in. That’s okay, because the new rolls would have been much more equitable internally. The government would have had horizontal equity between different kinds of residential property. We would have had horizontal equity between different kinds of commercial property and different kinds of industrial property; and that’s what we’ve been so desperately lacking.

The land which has been under-assessed, developable land which has been held by speculators and held by large development firms, on which the under-assessment has been the most gross, would have been covered and would be equitably assessed according to a market value system even if it was based on 1972 or on 1971.

The government could then have come up with, and could have had time to come up with, a second policy decision which was needed, and that was to decide what weight of taxation would fall on the different classes of property. Right now, although we have a split rate of assessment which slightly over- assesses, or rather taxes commercial and industrial property slightly more heavily than residential, the results of a market value assessment, in which there were no abatements, would be to shift taxation very heavily from the commercial-industrial sector over to the residential.

Now one of the features of the freeze we’ve had over the last four or five years has been that commercial and industrial operators whose business and turnover have been booming, who should and could have been able to pay taxation related to their increases in sales and their increases in production, have had a local tax rate which has been frozen as well. They literally have borne no extra tax over that period of time, and the shift, therefore, if anything has been towards residential rather than towards commercial-industrial. At any rate, the proportions haven’t changed.

Now if market value assessment were to come in with no other adjustments, there would be a very sharp shift of taxation from commercial and industrial to residential, because of the fact that the residential side of the assessment hasn’t been done for far longer in most parts of the province than the commercial and industrial side.

That would be inequitable. We would not accept that; we would not tolerate that and I don’t think the government would either.

What was needed, Mr. Speaker, was for the values to be fixed related to market value and then for policy decisions to be taken as to what percentage of market value should actually be taxed. Clearly, for example, commercial and industrial property should have been taxed at 100 per cent of market value. That is a reasonable kind of position. If they were to experience any reduction in taxes because of the shifts which took place, their taxes should have been no less than the taxation they bore before re- assessment.

In the case of residential property, in order to retain the present average burden of residential tax, the government might have fixed the taxable assessment at 75 per cent of market value; or maybe 60 per cent, I am not sure. That figure could also have been fixed in an equitable fashion in order to ensure that the burden didn’t increase. I think there is a very fair case of saying the burden should have been reduced and the slack should have been taken up through provincial funding, through a foundation plan and through a transfer of income and sales tax points to the municipalities.

Once that was done, the minister would have had a system which would have been much more equitable than the one now. The minister will tell me that this still would not have reflected end of 1974 values because of the very sharp inflation in property we have experienced over the last two or three years; an inflation which, of course, is due in large part to this government and the policies it has pursued.

Now that’s true. But if the government started by having horizontal equity within the different classes of property, and if it also ensured that there was relative equity between the different classes of property that would be a great step forward. It could be done by the technique I have outlined. The third thing would be, some time in the next two or three years, to bring those 1972 values up to the 1976 or 1977 level. It’s a relatively simple exercise, Mr. Speaker, once you have moved on to a recent market value assessment.

What is going to happen is this. In 1976 or 1977 the minister or the government -- if they are still around -- will come forward with a market value which they have attempted to make up to date but which will then, too, be two or three years out of date because of the problems which exist in keeping up with current values in the assessment field. The same thing I am recommending now and which should have been done in the past year and a half, will be done then except that in the meantime we will have experienced two, three, maybe four, maybe an infinite number of additional years of inequitable assessment because of the policies being pursued by the government.

I want to cite some figures, Mr. Speaker, about the inequities that exist and rather than work out my own I thought I would take them from the then minister’s speech. He refers, for example, to one municipality where the average assessment to sale ratios varied from a low of 18 per cent of market value for vacant commercial land to a high of 51 per cent for apartments. The ratio for single-family houses was 45 per cent; for vacant residential land 26 per cent; and for industrial properties 47 per cent.

In my own city of Ottawa, I know the ratios vary all the way between about -- it used to be between about 20 and about 40 per cent; with the increase in values it may be now as low as 10 per cent in some cases up to about 25 per cent. There is inequitable taxation because properties which are essentially similar and which sell for the same amount of money are taxed in a grossly different kind of fashion.

In Toronto, if one follows the situation here, one finds that older property which is selling for $35,000 or $40,000 is, in many cases, taxed more than new property selling for $50,000 or $55,000. With older property in different parts of the area, one property will be taxed $100 or $200 more than another one even though their market value is identical. For that matter, properties which are more expensive may be taxed less than those which are less expensive.

This is a result of having a long accretion of different kinds and forms of assessment and of having a government which has been unwilling to come to grips with the problem. The then Minister of Revenue was quoted as saying: “On higher priced homes the range of assessment accelerates with it and varied from 19.5 per cent to 29.5 per cent.”

And he claimed -- and I think they are valid claims -- that if we ever get to market value assessment, that there are positive results from it. For one thing, the municipal foundation plan that we’re putting forward in order to equalize taxes and tax burdens in relation to what you get across the province, is much more easily administered. A programme to transfer income tax plans to the municipalities is more easily administered if there is equitable taxation between municipalities, and not only within the municipalities.

You have the general problem of the inequity, Mr. Speaker, which tends to disfavour older property and favour newer property; that is, older property tends to be taxed more heavily than new property. That means that poorer people tend to be taxed more heavily than people who can afford to buy new homes. That would be solved with a system of market value assessment.

The government, however, has simply copped out on this particular issue. We’re going to have to wait for another 1% or two years, and there is no evidence that the government is trying to come to grips with the policy issues that are involved in order to guarantee that residential taxpayers on average don’t pay more. And in order to ensure that business and commercial taxpayers pay their share, which they’re not doing right now, and in order to ensure this equitable form of assessment.

There is one other point in the bill, as well, which is a major matter of principle. That is that the government has, once again, marched up the hill and backed down when it came to the question of mine assessment.

Certain above ground structures involved with mining will be assessed for the first time, Mr. Speaker, but the exemption on concentrators and on other mining machinery that is above ground continues; the exemption on the mineral resources that are below ground continues, and, in particular, the exemption on any mining machinery and other equipment which is below ground continues. We simply find that unacceptable, Mr. Speaker.

There are many communities in the north in which the mine is the major industry, but unlike a community in the south, they are barred from assessing and, therefore, from taxing the major proportion of the assessment, or the value of the stock in trade of that particular company. We think that the government ought to have grasped the nettle on that one and that it should have, once and for all, ensured that mines pay tax at least on the same basis, as any other industry, rather than experiencing this continual privileged position which they’ve been given by the Ontario government.

We will have amendments on several of the sections, Mr. Speaker. We’re going to handle it that way. But I just want to make it clear that in letting the bill go past second reading, it isn’t because of any enthusiasm at all for what the government is doing. We think that it should be now declaring what its policy is and it should be now letting people have their new assessments so that they can begin the appeal process. We know, or we suspect, that when the market value assessments come out eventually, if they ever do, the appeal process will become so clogged that there will be then an excuse for a further delay by this government, which simply refuses to bring in equitable taxation on property in the province.

Mr. Speaker: Does any other member wish to speak to the bill? The hon. member for Lakeshore.

Mr. P. D. Lawlor (Lakeshore): I have just a few brief remarks. On the split millrate concept, I take it that the government has definitive policy against the split millrate notion as things presently stand.

The second thing I’m concerned with is the mining tax. It was our determination that on certain underground works -- and very large installations can now be made underground, even in part of the concentrator process -- the government should reassess and give some consideration to imposing the tax.

I remember the Smith committee on which the minister and myself sat, years ago. No definitive solution came out of the committee. It set up a particular form of mining taxation but as far as the property aspects of that tax touching machinery and equipment are concerned, they didn’t come to a final determination nor, I believe, did we, although we discussed it at considerable length. I haven’t checked that out. The minister may recall the outcome.

Finally, I take it the minister has a formula under way at this time, as a method of short-circuiting the business of market value assessment for all forms of properties. Surely, with the ingenuity we have at our disposal, a formula in which numerous components can be worked into a computer could, by ingenious devisal, bring out the results of increased market assessment as things presently stand, against the figures the minister has actually arrived at.

Does the minister have to go through a long gyrating exercise in order to come to figures which he’s already obtained? Can’t he take residential components; the industrial growth equalization factor; perhaps half a dozen things into account in a computerized or formula assessment? Has he done that? Is he in the process of doing that?

If he could, I would think the minister -- having arrived at the formula, which would have to be intrinsically fair and based upon geographical differentia of all kinds -- could bring in his across-the-board market assessment tomorrow without any difficulty, particularly since that is reinforced by his speculation tax and the feed-in of enormous amounts of information directly into his offices as to what true values are in diverse areas of this province. That is an extra source of computer analysis which could simply be fed in and render this whole process.

Of course, I suspect that for electoral reasons the minister doesn’t desire to get down to that sort of thing where a certain gumption is necessary and he has to grit his teeth and seize the nettle, so he post- pones it until after the next election, and, as we come to believe in this party, ad infinitum -- it will never be brought in. It is not his intention any longer so to do. Not because of constitutional reasons or appeals to courts or anything like that, but simply because the inflation in property would have this terribly detrimental effect, as the minister sees it, at the polls.

Mr. Speaker: The hon. member from Simcoe East.

Mr. G. E. Smith (Simcoe East): Mr. Speaker, I would like to draw to your attention and to the members of the Legislature that in the west gallery are 35 students from Hillcrest Public School in Orillia, along with their teacher, Mr. Knight. I should perhaps draw to the attention of the members of the Legislature as well, that these are classmates of one of our pages, David Harvey, from Orillia. I know that you will join with me in welcoming them this afternoon.

Mr. Speaker: Does any other member wish to speak on second reading of Bill 87 before the minister? Mr. Minister.

Hon. A. K. Meen (Minister of Revenue): Thank you, Mr. Speaker. There are quite a number of points I want to respond to arising from the debate. To begin with, perhaps I could summarize briefly the essential principles spelled out in the bill.

The extension of the freeze for two years, for example, stems from a number of reasons; the most compelling of which has been, as the member for Waterloo North (Mr. Good) pointed out, the dramatic rise in market value of real estate during the period when the market value assessments of lands in certain parts of the province was going on. This was so to such an extent that, by the time we had finished, we realized that, as pointed out by that hon. member and others, our market value assessments were out by as much as 40 per cent. So it has been necessary to go back and rework those areas in which the rapid increases occurred.

As mentioned by one or two hon. members in the course of this debate, it’s not so tough to do it the second time around, because you’ve done it on the basis of market value once and so you can get back and do a follow-up on that without the same degree of mechanical work being involved.

The fact of the matter remains, though, that quite a number of months of additional work is required in bringing this all into a proper base. As my predecessor, the present Provincial Secretary for Resources Development (Mr. Grossman), said last fall when he announced the extension, it will take us till about the end of this year to have the figures into the computer and capable of being analysed for residential purposes, and roughly May or maybe June of next year before we have the commercial and industrial properties likewise catalogued and put into the computer, by way of basic information.

As we then recognized -- and I see the hon. member for Lakeshore has left the chamber -- in the select committee which dealt with the Smith report in the summer of 1968, were we to simply go to market value assessment based on those figures -- and I think we all agreed that market value assessment was the way in which to do this -- we would experience in many municipalities, particularly dramatically in the city of Toronto, a tremendous shift of the tax burden from the industrial and commercial sector to the residential sector. Indeed, I recall the mayor of the city of Toronto appearing before our committee in June of 1968, when he put forth to us some figures which demonstrated roughly a $2 million shift of the tax burden, based on the figures that they then had available, from the industrial-commercial sector on the one hand to the residential sector on the other.

Furthermore, it was pointed out to us that there could well be shifts within the class of residential or commercial or industrial, but particularly disadvantageously to the people involved within the residential sector.

Contrary to what the hon. member for Ottawa Centre has had to say on the point, it is not the older homes that are over-assessed proportionately. In fact, it is the newer homes that are assessed at a proportionately higher value. The older homes here in the city of Toronto, in some parts, are assessed at as little as five or 10 per cent of their current market values. We realize that if we are to bring them to market value, along with increasing others in the residential area to market value, there will be a very dramatic increase in the amount of tax payable by some of them.

It’s therefore necessary to do an analysis of the tax burden shift within the residential class, as well as between residential on the one hand and commercial-industrial on the other.

Contrary to what the hon. member for Lakeshore has suggested, one can’t whip that into a computer on a Tuesday afternoon and come out with all the answers on Wednesday morning. It’s going to take quite a number of months. In fact, my ministry estimates that it will take 15 to 18 months of very careful analysis of all of these figures, with the assistance of the computer, to determine: (a) the degree of shift; (b) the nature of that shift within particular classes; and (c) the way in which we should then apply certain factors within the classes and between classes, in order to see that these unhappy and burdensome shifts do not occur.

Only after all of that has been done will it be practical for us to go to a market value assessment and to apply it for the purpose of municipal taxation. It is our confident belief that we can accomplish this by the end of 1976, so that for the taxation years be- ginning thereafter, we will be able to use market value assessment in a way that will not be prejudicial to the taxpayers of this province.

Consequently, and it was for this reason that my predecessor made the announcement last fall, we have found it necessary to extend the freeze for a further period of two years. Now, we will be returning the roll each year hereafter rather than only in cases where there have been substantial increases or alterations in the assessments. The member for St. George (Mrs. Campbell) asked me a question to this effect some while ago, and I told her in the House that this was our intention and, of course, it is incorporated in this bill.

We will be returning it at a later time. We will be returning it on, I think, the third Tuesday of December each year. This will enable my people to provide a print-out of the roll to the clerks of the municipalities, up to and including any corrections that come to the attention of the clerk as far ahead in the year as election day itself. We all know that right up to election day, under the Municipal Act, electors can come forward, make corrections on the list, for the purpose generally of qualifying for electoral purposes, and this kind of correction can then be posted and made available for the benefit of the municipalities early in the new year.

We also have broadened the assessment base for mining municipalities. The member for Ottawa Centre suggests that we haven’t gone far enough. We have gone quite a distance along the road toward helping out these mining municipalities. It will add $1.3 million to the real property taxes in the mining municipalities in the year 1975, by our estimates, and a further $780,000, I think it is, to their business tax revenues, making in all a total increase of $2,080,000 in the mining municipalities. That is a very substantial improvement in their tax base.

There is another element in all of this which some members have touched upon. Namely, the ability of the assessor, by the amendments which I am proposing, to increase land values in cases where farm land has changed its use to residential by way of subdivision, and where the freeze has applied. Up until now, the assessment has remained at the vacant farm land assessment value, notwithstanding that the property has been subdivided, homes were built and assessments are way out of line with those in comparable subdivisions that existed prior to the freeze.

These are all substantial improvements in the legislation --

Mr. E. R. Good (Waterloo North): The government has been three years assessing that.

Hon. Mr. Mean: -- and I think will go a long way towards easing any discomfort which municipalities have experienced in that regard. The member for Waterloo North, I believe it was, criticized the ministry for getting into this Act of assessment. One or two of the members have also asked whether we propose to return this function to the municipalities at some later date.

I would like, for a moment -- if I can just find my notes on this -- to review for the benefit of the members the history leading up to the time when the ministry took over this responsibility, I have quite a lot of detail here, Mr. Speaker, and I will try to abridge it.

It goes back to 1947 when the then Department of Municipal Affairs established the assessment branch. In 1950 the assessment branch issued its first manual to aid assessors and then revised it again in 1954. In 1964 the department completely revised the manual as a guide to the assessors -- they set up training programmes for the assessors -- I think the hon. member for Ottawa Centre mentioned this.

Mr. Good: The government couldn’t make it manageable.

Hon. Mr. Meen: It set up these training programmes and use of the manuals for evaluation systems generally, and they conducted programmes all over the province. The next year, 1965, the department established licensing of the assessors in an attempt to make sure that the municipalities engaged only qualified assessors or that persons going into assessment departments of the municipalities had the potential to upgrade themselves in the course of their work. The Legislature passed enabling legislation allowing the counties to assume responsibility for municipal assessment.

At the time the department encouraged the districts of northern Ontario to establish the office of district assessor. The district assessor was to be appointed by the Minister of Municipal Affairs at the request of two-thirds of the municipalities in the particular district.

Both of these steps were intended to provide full-time assessors, the economies of scale and career employment for the development of professional assessment. In this regard we made substantial grants to the municipalities to defray the costs. The then Minister of Municipal Affairs, in a speech to the assessors’ convention in Ottawa, made the following points however -- and let me just read from Mr. Spooner’s address to them at that time. I will read only part. He said:

“Last year the assessment branch of my department conducted a survey to determine certain facts concerning the condition of the assessment roll in each municipality in Ontario. Nine hundred and forty assessment rolls were examined in some detail. The following data was accumulated -- ”

Mr. E. Sargent (Grey-Bruce): That was 10 years ago.

Hon. Mr. Meen: “(1) Six hundred and four municipalities,” and this is out of 940, “or 64.2 per cent have neither revised nor have they adjusted assessed value since 1956.”

Mr. Good: Sure, because the government wouldn’t make the use of the manuals mandatory. That was why.

Mr. Sargent: That’s right.

Hon. Mr. Meen: This was, of course, a problem.

Mr. Good: Sure.

Hon. Mr. Meen: “Four hundred and five municipalities do not use integrated assessment systems or even use the manual, although some of them use parts of several different systems. One hundred and sixty-four of them have no appraisal records of any kind.”

Mr. Sargent: That’s the way the government has been running things around here.

Hon. Mr. Meen: These are what the municipalities were not doing, if the member for Owen Sound would just pay attention to what I am saying.

One hundred and forty-two municipalities did not close their assessment rolls by October, nor did they give any extension of time. Two hundred and eighty-three municipalities did not assess properties at all, and 170 municipalities -- I am paraphrasing here in the interests of brevity -- 170 municipalities -- that’s 19 per cent -- did not include population on the assessment roll.

He went on to list a total of 12 different items. And then a little further along he says:

“I suggest that there are three basic reasons at the present time why the assessment function is poorly applied: (1) Poorly trained and part-time assessors; (2) The use of outdated and inadequate assessment systems; (3) The reluctance by municipalities to appropriate sufficient funds to institute and maintain the present -- ”

Mr. Sargent: The government has really screwed things up since that.

Mr. Cassidy: And now we have no assessment at all.

Mr. Speaker: Order, order.

Mr. Good: The minister hasn’t done a thing yet. They are still operating on that basis.

Hon. Mr. Meen: -- it was necessary for my predecessor to take this over in 1970 --

Mr. Cassidy: Now the minister has no assessment at all.

Hon. Mr. Meen: -- we are bringing order out of chaos, and I can say this --

Mr. A. J. Roy (Ottawa East): The minister is an expert in chaos.

Interjections by hon. members.

Hon. Mr. Meen: -- that with that kind of record I am not going to be all that eager to see this function returned. On the other hand, I am not categorically closing the door on that suggestion because until I can be satisfied, and my colleagues can be satisfied, that despite all these courses and the blue book, and all the rest of it, there will be an equitable application of the rules to all the taxpayers of this province, we cannot delegate our responsibility out of this ministry.

Mr. Good: The minister had 4,000 appeals and he --

Hon. Mr. Meen: I would be derelict in my responsibilities were I to do that at this time; and for that matter, although I don’t close the door on it, I do not expect that it would be next year or five years from now that this would return. I mentioned to the

PMLC last Friday that I don’t close the door on this suggestion, but certainly I am not saying to them that when the assessment has been completed, I will then be inviting them to come in and take the matter over from us once again.

There is too much at stake. With the provincial grants around this province being based on municipal assessment, it is essential that we have consistency, not only within the municipalities but within all the municipalities on the same basis across Ontario. I think everybody agrees with that, but the difficulty is to achieve it.

If the assessors are working within a particular municipality, they have their own local interests at heart; and although that might be to get some level of consistency among the taxpayers in their municipality, it may also bring with it a desire to have a lower than market value assessment in order to obtain larger provincial grants. That is the sort of thing that distorts our whole grants picture and, of course, we can’t permit that to prevail.

Mr. Roy: If it will do as good a job as the land speculation tax it can wait.

Hon. Mr. Meen: Mr. Speaker, that concludes my comments on the principle of the bill, and I would invite all members in this House to support it on second reading.

Motion agreed to; second reading of the bill.

Mr. Speaker: Shall the bill be ordered for third reading?

Mr. Cassidy: No, Mr. Speaker.

Mr. Speaker: Committee of the whole House? Agreed?

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

ASSESSMENT ACT

House in committee on Bill 87, An Act to amend the Assessment Act.

Mr. Chairman: Are there any questions, comments or amendments to any section of the bill? If so, which section?

Mr. E. R. Good (Waterloo North): Section 6.

Mr. Chairman: Anything before section 6?

Mr. M. Cassidy (Ottawa Centre): Section 2, Mr. Chairman.

Mr. Chairman: Anything before section 2?

The member for Ottawa Centre on section 2.

On section 2:

Mr. Cassidy: Mr. Chairman, I just want to raise a little question with the minister here about the fact that in section 2(2) it is proposed that only the buildings involved with mining that are above ground will be subject to assessment. They have all been exempt in the past, and now the government is opening the door in a minuscule kind of way in response to the kind of pressure that the northerners have been bringing for year after year after year. As one of our members said, that means that the wheel- houses and the shacks on top of the ground will be assessed but the real guts of the mine underground -- all the equipment and so on -- still will be exempted.

I think the minister’s figures bear that out. He indicated that the extra taxation in 1975 will amount to $1.3 million. You have got to compare that against the gross product of the mineral industry in northern Ontario. As I recall, their profits are around half a billion dollars; and their production is a lot higher than that; I haven’t got the actual figures here. But certainly, Mr. Chairman, there is no other industry that has got such a degree of exemption and such a degree of preference as does this one.

If mines will have their equipment and other underground installations exempted, one has to ask whether this means that any firm that wishes to build a manufacturing plant underground also will be exempt. I am really not sure, but we just simply can’t accept this minuscule step.

I wonder if the minister would be so kind as to estimate for us the total assessment of mining property and the tax revenues if it were brought under assessment, because I think that that figure would indicate just what a small step is being taken in this particular section.

Hon. A. K. Meen (Minister of Revenue): Mr. Chairman, I don’t have the figure for the total assessment. I’m afraid I can’t tell the hon. member what it might raise if one were interested in taxing the machinery that’s underground. Also, I must say that I’m not that conversant with what percentage of extraction machinery might be underground, and I do know that the municipalities have suggested that that kind of provision also be made. I think they’ve got to recognize that in the chambers underground, in which some of the hoist equipment and maybe some extraction and rough concentrating equipment might be located, there is no structure; it’s simply a great cavern that has been hollowed out. It might or might not raise a good deal more revenue.

In my understanding of it, at any rate, the advice I have goes a good deal of the way, however, toward meeting the requests of the municipalities in giving them a very much broader tax base than they had before. But I’m afraid, as to actual figures, I can’t help the member at the moment.

Mr. Cassidy: It’s amazing the way this government acts. When Paul Godfrey drops a whisper in the ear of the Minister of Housing (Mr. Handleman) that he wants some powers over housing policy to change the whole structure of planning in the municipality of Metropolitan Toronto, that’s all he needs to do. He whispers and Sid Handleman tells the Minister without Portfolio (Mr. Irvine) and bingo, within a few days it’s embodied in legislation.

The mining municipalities, year after year, come back to the government and say: “We want to be able to tax the mining enterprises within our boundaries.” Now, the minister says: “We’ve gone part of the way to what it is they wanted.” What is it that Paul Godfrey has that the mining municipalities lack? Why does he discriminate against them and why does he so constantly favour the mines and the mine owners and the large, often foreign-controlled companies against the people in the north who live in these mining municipalities?

Hon. Mr. Meen: I will respond to that, Mr. Chairman. I really don’t see that we’re treating them any differently. I suppose it’s a question of what you determine to be taxable real property or not, but whether it be an industry that’s on the surface or whether it be an industry located underground it seems to me that the formulas that we apply are essentially the same.

If an industry chose to locate underground it would have certain taxes that would be applied to it, including business taxes, but there would be no building as such. It would have certain structures on the surface that would be taxed and I think we are applying the same kind of tax throughout, although we are not saying we are not going as far as the municipalities would have us go. I suggest to the hon. members that we are going as far as it is practical in the interests of some form of consistency.

Mr. Cassidy: Wait a minute, though, Mr. Chairman. One point is that you can’t apply business tax on something on which there is no assessment, and the business tax cannot apply on any underground workings of a mine because there is no assessment on those underground workings. We’re into this hangup partly because of the fact that certain kinds of machinery and equipment in an industry are exempt from property tax -- that’s something that probably bears looking into as well -- but the government is taking that and is applying it with the broadest kind of strokes it can.

The minister knows perfectly well that a firm that happened to build an underground plant would be taxed, among other things, on the value of the underground cavity that was created in order to house the plant. That should certainly be taxed as far as a mine is concerned as well.

There’s a value in a hole in the ground even if the walls are made of rock rather than concrete, and there is a whole lot of other equipment and so forth in that mine which is escaping tax.

Not only that, Mr. Chairman, but inequities as between mining municipalities will be created; the northern members can provide more direct information on this than I can, but there will be inequities as between various mining municipalities. In one case there will be a mine whose hoists and other equipment, and workings and so forth, are basically above ground. In another case they will have equipment down 100 ft, down 200 ft, or down 1,000 ft. This is where most of the equipment and most of the taxable value of that mine is going to be located.

In one case there will be property tax and there will be business tax. In the case of another mine, maybe a neighbouring mine or maybe in a neighbouring municipality, there will be no tax, apart from the privies, the parking lots and the entrance to the shaft which is located above ground. This just doesn’t make any sense at all. It seems to us that the government is carrying on its favouritism for the mining industry.

Mr. Cassidy moves that section 2(2) of Bill 87 be deleted and the following substituted: (2) Paragraph 19 of the said section 3, as re-enacted by the Statutes of Ontario, 1971, chapter 79, section 2 is repealed.

Mr. Cassidy: The effect of the amendment is to eliminate any kind of exemption for mining equipment and so on and for the minerals located within the mine. That seems to be about the best way to deal with it.

I notice the minister hasn’t said a word about the exemption which the government is continuing on the value of minerals in the ground which certainly relates to the value of the property occupied or used by the mining enterprise. I think he ought to comment on that part of it as well.

Mr. Chairman: The member for York South.

Mr. D. C. MacDonald (York South): Mr. Chairman, I would like to say a few words on this amendment. I was interested in the argument the minister advanced to try to defend his indefensible position when he said he was being consistent because he wasn’t doing this underground. I would like to remind him that a few years ago we had considerable debate in this House about whether or not we should tax pipelines under the ground. Municipalities from all across the Province of Ontario came in and said this is an added asset from which companies are making profits. They are doing business and, therefore, it should be taxed. The Assessment Act was changed so that there was assessment of pipelines and municipalities could share in that.

Another point -- I’m not absolutely certain of my ground on this because I know it has been discussed a great deal but whether or not it was moved I don’t know; I raise it as a point of earlier consideration -- is whether or not, for example, the great storage basins in Lambton county should be assessed. Imperial Oil and various subsidiaries of companies have really multimillion dollar assets under ground in which they store gas in off-peak periods and are able to feed it into the pipelines in the peak periods. Although it happens to be only a hole in the ground, it happens to be one of nature’s most incredible gifts and assets to us in the Province of Ontario. It is a business asset and there certainly was consideration and my recollection is -- subject to correction if I am wrongs that there is now assessment and taxing on these underground storage facilities.

Unfortunately, one of my colleagues from the north whom I heard discussing this this morning is tied up in another committee. He was citing an example -- I hope he can get free from that committee to come and give even more documentation of it -- of his area where you happen to have two or three towns which were exclusively woods towns, with pulp and paper mills or the equivalent thereof. They are all taxed. They are all assessed. In that same area, in the same school district, you have a big mining community, one of the biggest and most profitable mining communities in this country, in which there are millions of dollars of underground facilities and underground equipment, which is not assessed.

You have the one community, with industry in that community, in effect, getting off relatively scot free because a great proportion of its assessable assets happen to be under the ground. And the other communities have to pick up the tab on their behalf. This is the reason these mining municipalities have come to you.

It’s a pretty poor show when the minister says “We’ve moved an inch when you asked us to go some distance in terms of removing this kind of inequity.” Years ago we used to have the same kind of a situation with regard to assessment generally of mining communities. The thing that always intrigued me was it was other businesses in the community, as well as the residential property owner, which were picking up the tab on behalf of industry. Only by dint of great pressure upon this government did the government finally relent and, in the instance of above-ground facilities, assess them so that those industries could pay their fair share of taxes in the community.

The thing that really staggers me about this is the cosiness once again of this government in relationship to the mining industry. It’s a cosiness which results in favouritism which has been traditional. In fact, I invite the hon. minister to go and invest $21 in a most interesting book -- yes, it sounds like a lot of money but that’s the cost of books today -- called “The Politics of Development,” by H. V. Nelles, a professor on the staff of the University of York. He did his original studies when he was working with Lands and Forests. He has done a study of the politics of development in reference to mining, forestry and hydro-electric power in this province. You have there the most solid incontrovertible documentation of the extent to which governments are being subverted in their public policy.

Hon. J. White (Treasurer and Minister of Intergovernmental Affairs): Take a look at our new measures.

Mr. I. Deans (Wentworth): We have.

Mr. J. A. Renwick (Riverdale): We are taking a look at one right now.

Mr. MacDonald: Let’s not take a look at other new measures. Let’s take a look at this one here. Here is a very sizable relic of favouritism on the part of this government with regard --

Mr. Renwick: Has the minister read Nelles’ book?

Mr. MacDonald: No, he hasn’t read it.

Mr. Renwick: Of course he hasn’t.

Mr. MacDonald: However, if he wants to read my review of it in the current issue of Canadian Forum it will give him some idea of what he should do some time this summer to pick it out. It’s a continuing example of the kind of favouritism which this government exercises vis-a-vis the mining industry. The tragedy of the thing, the scandalous inequity of the thing is that he chooses to turn a deaf ear to the municipalities which are living with the situation and which are trying to establish equity within their own ranks.

Of course, the answer is a simple answer. When election time comes, the government will go and get its $100,000 from Inco or from some other company of that nature. It’s an investment as far as they are concerned. It’s seed money as far as the government is concerned. This is the politics of development which has now been solidly documented academically as well as in many debates in this House.

Mr. J. R. Breithaupt (Kitchener): And the development of politics.

Mr. MacDonald: The development of politics or the politics of development, it’s a combination of both. I think it’s time for more if the provincial Treasurer really wants us to take a look at what he’s doing in removing some of these inequities. He is paying some lip service as a necessary objective of public policy.

Interjection by an hon. member.

Hon. Mr. White: We are doubling the mining tax.

Mr. MacDonald: But he has a long way to go along the road. He has taken one or two baby steps and there are a lot more giant steps to be done before he removes the inequities. Here’s an opportunity to take another baby step along the road.

Mr. Chairman: The member for Grey-Bruce.

Mr. E. Sargent (Grey-Bruce): I am just adding my voice to that of the member for York West.

Mr. MacDonald: York West? Try South.

Mr. Sargent: Okay, I am sorry. I just want to say that any engineer who could define the technology to build everything underground in this industry would not pay tax at all by this guideline here. To say that the minister is going to exempt plant and machinery located under mineral land and used to obtain minerals from the ground and machinery on the surface of mineral lands, a building or a plant on the surface of mineral lands and used to obtain minerals from the ground, is totally unacceptable. I think in complete fairness to other firms in industry he has given a great million-dollar concession here to the industry -- and there may be hundreds of millions of dollars of concessions. I want to state my position. I am totally opposed to this type of assessment.

Mr. Chairman: The member for Nickel Belt.

Mr. F. Laughren (Nickel Belt): Mr. Chairman, it has been of some concern to me and to my colleagues in the New Democratic Party, and particularly those of us from the Sudbury area, about the level of taxation of the mining industry for some time now. I personally favour Crown corporations that the government wouldn’t have to tax, but I know that this bill doesn’t deal with that; so I will get back on to the content of the bill.

Mr. Chairman: The amendment.

Mr. Laughren: I am sorry. Yes, the amendment. I would like to know from the minister what kind of assessment value we are overlooking here. Does he have an idea of the assessed value of what he is not assessing in the Province of Ontario? It seems to me we could be overlooking it. The thing that bothers me is that I don’t know how the minister distinguishes between buildings and plant and machinery. He will assess building and plants but not machinery. I wonder how he distinguishes between plant, machinery and buildings in a highly sophisticated, automated, computerized plant such as the new nickel refinery at Copper Cliff. I would suggest to him that there is going to be some very arbitrary decisions made as to what can be assessed in an operation like that.

Mr. Cassidy: All favouring the company,

Mr. Laughren: And they will all favour the company, as they always do. You know what compounds the felony here -- if I could use that term, Mr. Chairman; I am sure you wouldn’t object -- is that it is those very communities --

Mr. MacDonald: You curled his hair when you used it.

An hon. member: How can you tell?

Mr. Laughren: -- that need the assessment the most which are being hurt the most with these kinds of exemptions. I could list to the minister such communities as Manitouwadge. If my colleague from Thunder Bay was not in the committee, I am sure he would be telling the minister about what happened to Manitouwadge. It went into actual bankruptcy, and yet it is the location of one of the wealthiest mines in the Province of Ontario.

Or I could give him examples of some of the amenities that Sudbury area does without; partly, at least, because of the lack of assessment on the buildings and the equipment in the mines. When the Treasurer introduced regional government to the various communities, this party supported the concept of regional government and still does.

Interjection by an hon. member.

Mr. Laughren: At the same time, while we recognize the fact that the equalized assessment across the region is a step in the right direction, we can see that here is an opportunity in a bill such as this to expand that assessment in the mining community. Despite the location of the mine, despite whether it is a building, despite the fact that it may be underground, or whether it is a plant, or a piece of machinery, then it should be assessed -- and this then could be applied to the entire region. Then we would really be reaping one of the benefits of regional government in communities such as Sudbury.

When the minister is bringing in legislation that is going to change the existing legislation, for heaven’s sake why not take the giant step in the first place that my colleague talked about and assess all mine equipment and buildings?

Mr. MacDonald: You can’t expect pygmies to take giant steps; that’s our problem.

Mr. Laughren: These are truly baby steps that the minister is taking. I hope that he will seriously consider the amendments put forth by my colleague from Ottawa, I would say, Mr. Chairman, that northern Ontario grants are not the answer to giving northern Ontario communities the amenities which they have a right to expect from the government of the province. As a matter of fact, while I won’t digress from this amendment, Mr. Chairman, it is a fact that on a per capita basis grants to the northern communities were lower than those to the communities in southern Ontario.

So I would urge, Mr. Chairman, the minister to give serious consideration to the amendment as put forth by my colleague from Ottawa Centre.

Mr. Chairman: The member for Waterloo North.

Mr. Good: Yes. I believe there are about 20 sections in the Assessment Act which deal with exemptions to assessment and taxation, and these range all the way from places of worship to Boy Scout homes, and buildings held by the Crown in the right of Ontario and Canada.

Now in many instances, Mr. Chairman, the government has seen fit to make payments in lieu of taxes to the municipalities. This we have applauded as a step in the right direction and very good, especially in municipalities where a large part of the assessment is non-revenue producing, such as university cities like my own and like Kingston. We did get amendments over the years which now make payments in lieu of taxes, because the municipal tax base is very limited. The source of funds for the municipalities is limited to one function -- that is the tax on real property, as described in the Assessment Act.

Therefore, Mr. Chairman, I think it is important that the government take another look at this amendment. We will support it. We would think that as the government moves toward providing more funds to the municipalities by eliminating more and more of these 19 sections in the Act, which are exempt from assessment, it should take a better look at this particular section and allow the underground installations of mining firms to be assessed and therefore taxed.

Mr. Chairman: The member for Wentworth.

Mr. Deans: Thank you, Mr. Chairman. I want to support my colleague, the member for Ottawa Centre, but, more than that, I want to say something. The Treasurer interjected that we should take a look at what the government has done with regard to the mining tax, the upward changes and the rate of mining tax.

Mr. Chairman: So far as it relates to this amendment, of course.

Mr. Deans: Yes. I’m just bringing back to mind what he said, that’s all, and also to remind him of changes in the tax in the forest industry.

I want to say that those are all taxes that are directed to the general revenue of the province. The changes in those taxes are intended to recompense --

Hon. Mr. Meen: Yes, but they come out of the same treasury.

Mr. Deans: Wait a minute. The changes in those taxes are intended to recompense the public of the Province of Ontario for the loss of its valuable resources. They’re not intended to provide the wherewithal to maintain any particular municipality. If you’re ever going to free northern municipalities from the role of having to beg the government, year after year, for additional grants in order to meet their commitments, then obviously you’re going to have to do away with the inequities that currently prevail within this Act. You’re going to have to give them the kind of power they themselves have long sought.

It’s pretty obvious to most of us that we don’t derive anything like the kind of revenue from the use of our resources that we ought to get. Not even a tiny proportion of the actual worth of the mineral resources of the Province of Ontario is recovered by way of the mining tax. And because of the rather unusual conditions which prevail in northern municipalities, we’re forced to return a great portion of what we do get to offset what revenue municipalities normally would be able to get were they able to tax the actual worth of the industrial development within their areas. The mine in northern Ontario is no different, I say, to the mill in Hamilton.

Mr. Laughren: That’s right.

Mr. Deans: The mine in northern Ontario is the industrial heart of the northern municipality, just as the Steel Co. of Canada Ltd., Dominion Foundries and Steel Ltd., or the Firestone Tire and Rubber Co. of Canada Ltd., or any other company that provides the kind of industrial assessment necessary to bring about an equitable distribution of costs for the people and municipalities is in southern Ontario.

For us to draw strange guidelines that exempt the soul and substance of the mining operation from tax is wrong. We’re going to have to change our thinking. We’re going to have to recognize that, on the one hand, there is no similarity to be drawn from what we’re able to derive by way of mining tax -- as it should be and is applied across the board, and is a source of revenue in general terms for the use of the province in providing whatever services should be provided for people all over the province -- and the right of municipalities to govern themselves and tax those things which are within their boundaries for their own use.

The government pays lip-service to something called the autonomy of local municipal government in assuring local municipal government the right of self-determination, and in assuring it that it can make its own way. The only way a person can have self-determination and some degree of autonomy is if the government has the opportunity and ability by law to tax and raise its revenues. In fact, this government seems consistently to fail in recognizing that. What you’ve done at this point is such a tiny step along the way that it’s hardly even worth considering. I want to suggest to you that if you are serious, if you think that the municipalities of northern Ontario have the right to the same degree of viability that municipalities in the south have, if they have the right to self-determination as you claim is available in southern Ontario, if they are to have the right to raise taxes that are supposedly within their jurisdiction to raise, then you are going to have to do away with the exemptions on mining machinery underground.

If you are not going to do that, then you obviously don’t ever intend to provide the freedom to those municipalities to follow through on their fiscal responsibilities to their residents. They can’t do it by simply having residential tax, and they certainly can’t do it on the basis of the few dollars that will be raised by this change. The only way they are going to become self-sufficient is if this government decides to alter the ability of the municipalities so that they can tax all of the wealth or all of the assessed values of the mine, and the machinery in the mine.

We have made this argument so many times that it almost seems ridiculous to have to make it again. I would have thought that the government would have recognized a long time ago that northern Ontario is sick and tired of coming down here to Queen’s Park and begging for higher grants.

Mr. Laughren: We are going to come down in even greater numbers.

Mr. Deans: The people of northern Ontario are fed up with doing without the kinds of services that they rightfully should be having because of an inability to tax the major industrial sources in the north. The fact that they may differ in the way in which they are set up doesn’t make them any less valuable to northern Ontario than most of the major industrial developments in southern Ontario are valuable to their own particular municipalities. We’ve got to stop treating them differently.

Mr. Good: Mr. Chairman, just one point I would like to make in this before we have the vote -- that is a question I would like to ask of the provincial Treasurer and the provincial Minister of Revenue. Why did the government have no compunction in taking money from the taxpayers of the Province of Ontario to help municipal financing through taxation by giving grants on universities for students? I must commend the government for recognizing the need to provide the municipalities with more funds by giving grants in lieu of taxes, even though they be partial grants. You had no compunction in taking money from the general consolidated revenue of the province and giving it to the municipalities, but you are hesitant to take it from this one particular industry which should be paying its rightful share of --

Mr. Sargent: Right.

Mr. Good: -- municipal taxes. This I find hard to comprehend.

Mr. Chairman: The member for Riverdale.

Mr. Renwick: Mr. Chairman, I have first of all a question -- I want some clarification from the minister. At the end of the existing section there is a phrase “but not including a concentrator or smelter of ore or metals” and that disappears from the proposed amendment. What is the actual effect of the proposed amendment, which the minister is asking us to approve and which we are opposed to, in terms of the additional assessment which will accrue to the mining municipalities in the Province of Ontario?

Hon. Mr. Meen: Mr. Chairman, I welcome the opportunity to repeat this. What I said was that it will return to the mining municipalities an additional $1.3 million in land tax, and some $680,000 in business taxes, to a total or aggregate amount in excess of $2 million of revenue in the mining municipalities.

Mr. Renwick: The business tax comes in another section, isn’t that right?

Hon. Mr. Meen: In the section dealing with business assessment.

Mr. Renwick: Yes, all right. The section that we are talking about is the exempting section.

Hon. Mr. Meen: Yes.

Mr. Renwick: That’s right.

Hon. Mr. Meen: Later on we will --

Mr. Renwick: Yes, making minerals liable for business assessment comes in the next section. Is that correct?

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

Mr. Renwick: The section dealing with the liability for business assessment of the mining business comes in the next section?

Hon. Mr. Meen: We are dealing here with the exemption under section 2(2).

Mr. Renwick: That’s right. We are dealing with an exemption. At the present time what is taxed under this provision, if you interpolate the exemption into what is taxed, is a concentrator or smelter of ore metals. Is that correct? Or is that exempt under the preceding section 17? I am asking a very technical question.

Hon. Mr. Meen: Yes, and I don’t know whether I have the answer to that very technical question. Paragraph 19, dealing with business assessment, exempts buildings, plants and machinery in, on or under mineral lands. What we are doing is removing the words “in, on or”, so that it reads: “The buildings, plants and machinery under mineral land.”

That then brings into the fold the very substantial assessments of the concentrators and refining equipment that are above ground rather than just the rough concentrators and the rock crushers that are used underground for the purpose of some form of rock selection before it is brought to the surface.

Mr. Renwick: At the present time, the concentrator or smelter of ore or metals is subject to tax, whether it is above or below ground. Is that correct at the present time?

Hon. Mr. Meen: No, I think that’s not correct.

Mr. Renwick: What does the exclusion mean at the end of paragraph 19 as it presently stands?

Hon. Mr. Meen: The hon. member is asking about the exclusion of plant and machinery used for obtaining minerals from the ground and all minerals. Is this the exclusion he is speaking about at the end of the clause?

Mr. Renwick: No, I am speaking about the very end where it states, “but not including a concentrator or smelter of ore or metals.” I’m looking at paragraph 19 as it is presently in the Act.

Hon. Mr. Meen: By removing that, it then brings that into taxable form.

Mr. Renwick: What I’m trying to say is that isn’t my understanding of the section. Paragraph 19 is an exempting section as it presently stands. I’m not looking at the minister’s amendment. I’m looking at the statute as it presently stands. That is an exempting clause from assessment. But it takes out of the exempting clause at the present time a concentrator or smelter of ore or metals. Therefore, it must necessarily be that at the present time a concentrator or smelter of ore or metals is subject to assessment.

Hon. Mr. Meen: No, excuse me.

Mr. Renwick: At the present time.

Hon. Mr. Meen: No -- oh yes, excuse me.

Mr. MacDonald: It is a double negative -- and therefore it is a positive.

Mr. Renwick: That’s right. I’m correct.

Hon. Mr. Meen: I’m advised that concentrators and smelters are taxed and have been taxed since 1970 and that the taxation of them would continue.

Mr. Renwick: Since when?

Hon. Mr. Meen: Since 1970.

Mr. Renwick: I want to find the answer to it, because I don’t know whether I’m wrong or someone else is wrong. This section 3 of the Assessment Act, as I have it in my hand, is chapter 32 of the Revised Statutes of Ontario, 1970, as amended by chapters 79 and 98 of the 1971 statutes, and the 1973 amending Act does not apply to this section. I assume I’m talking about the right section as it presently reads. That states: “All real property in Ontario is liable to assessment and taxation” -- It has nothing to do with whether it’s business or real property assessment -- “subject to the following exemptions.” Then paragraph 19 exempts “the buildings, plant and machinery, in, on or under mineral lands” and so on and so forth, but not including “a concentrator or a smelter of ore or metals.” As my colleague from York South says, the double negative means at the present time a concentrator and a smelter of ore or metals are subject to assessment for taxation.

When the minister states that the additional assessment available to the mining municipalities will be in the neighbourhood of $2 million, has he made the --

Hon. Mr. Meen: It is $2 million in revenue.

Mr. Renwick: What is the increased assessment to the mining municipalities by bringing in buildings and plant above ground but, of course, not bringing in concentrators or smelters of ore or metals because they are already subject to assessment? Do you have any idea of what will be the assessed value of the plant and buildings which will now be subject to assessment and taxation?

Hon. Mr. Meen: No, I’m sorry, I don’t have the figure for the increase in the assessment. The material I have provided to me by the Ministry of Treasury, Economics and Intergovernmental Affairs deals with the dollar revenues to the municipalities Mr. Chairman, but it does not show the mill rates upon which those dollar revenues are calculated.

Mr. Renwick: Why not from the assessment on which the mill rates are applied? We would expect that from Treasury, Economics and Intergovernmental Affairs. They’re so sophisticated that they only give you the figure which they drag out of the air, but they never give you the underlying information on which you must be asked to make an assessment.

We are altering here the property subject to assessment. Surely if the minister says the mining municipalities requested this, there is an obligation on the minister to tell us what is the increased value in assessable property for the purpose of this tax, and not to tell us what the revenue will be. That, of course, must of necessity be the product of the mill rate applied to the increased assessment. But the minister says, no, he doesn’t have the assessment. All right. Let me make the argument which has been made many times. Why, in the Province of Ontario in 1974, would we have the exempting sections listing 19 headings -- there’ll be 20 because there’s a section 17 (a) which has come in a little earlier --

Mr. Good: There are 20. He added another one last year.

Mr. Renwick: Sorry, he added another one last year -- there’ll be 21 altogether. But when you consider the marginal notes under section 3 of the Assessment Act -- “lands of Canada, Indian lands, churches, public educational institutions, philanthropic or religious seminaries, educational seminaries, public hospitals, highways, municipal property, Boy Scouts and Girl Guides” -- maybe that’s the equivalent. It’s the Boy Scouts and Girl Guides and the mining industry. That’s it.

Mr. Cassidy: Inco is hiding behind the Boy Scouts of Canada.

Mr. Renwick: “Industrial farms, charitable institutions, Children’s Aid Societies, scientific and literary institutions, battle sites, exhibition buildings of companies.” And then we get the machinery related principally to the mining industry -- not all. Then we get one acre for forestry purposes out of 10. Then the mineral lands and minerals.

Now, what conceivable ground would there be for exempting any of these items of tangible property or intangible property used for the purpose of earning income by businesses from the assessment by which municipalities can levy their municipal taxes? Surely one must be able to get through to the government somehow that at this point in time you do not have this kind of exemption.

My colleague from Ottawa Centre assures me that his amendment will have that effect, if passed by this assembly today, that there will be no longer in the Assessment Act a paragraph 19 to section 3. Surely the minister must say that that is an admirable result in 1974.

We, of course, haven’t gotten around yet to dealing with the Corporations Tax Act which is supposed to impose upon the mining industry additional taxes for the general benefit of the people of the Province of Ontario. But there are many ifs, ands and buts about that.

The interjection by the Treasurer to my colleague, the hon. member for York South, when he referred to Prof. Nelles’ study, was “a typical red herring.” When one analyses the Corporations Tax Act amendment to give effect to the budget, I doubt very much whether the impact will be anywhere near the kind of impact which should be borne by the mineral industry in the Province of Ontario for the general revenues of the province.

So, setting aside the Treasurer’s red herring and dealing with the specifics of what we are talking about, and since the minister doesn’t have the information as to the increased assessed value of the property upon which the mining municipalities will levy the tax, and since he can’t possibly give a rational justification for maintaining this section in the Act, would the minister not accede to the amendment made by the hon. member for Ottawa Centre and make this property subject to the real property and business tax in the Province of Ontario? Why can’t he do that?

The reason obviously is that it’s a sop -- it’s another little partial step. We in this party are kind of sick and tired of the gradualism of the Tory party. It is disguising progress as a minuscule step forward, so minuscule it’s very difficult to tell whether it’s a step forward or a step back. I’m simply saying to the minister, on the arguments which have been made to him, Mr. Chairman, will he please accept this amendment?

Mr. Sargent: He can’t hear very well.

Mr. Chairman: The member for Grey-Bruce.

Hon. Mr. Meen: Mr. Chairman, if I may respond to that for a moment.

Mr. Chairman: All right.

Hon. Mr. Meen: I don’t know whether the hon. member for Riverdale really appreciates what he is saying. He’s asking me to give him an assessment figure when it’s far more meaningful to give him the total dollars going to be paid.

Mr. Renwick: But he can’t give the dollars without applying -- will the minister permit an interruption?

Hon. Mr. Meen: I have those figures. It’s something in excess of $2 million of additional tax. A further point is that this is a 24 per cent increase in the total amount of real property and business taxes which will be paid by the mining community on top of a 100 per cent --

Mr. Renwick: We are not going to buy that.

Mr. Chairman: Order, please.

Hon. Mr. Meen: -- increase in the mining taxes being levied against them.

Mr. Renwick: We don’t want the minister’s arithmetic.

Hon. Mr. Meen: It’s no small or insignificant -- you don’t want any arithmetic? What does the member want?

Mr. Renwick: No, we want our arithmetic. The arithmetic he should have.

Mr. Chairman: Order, please. The hon. minister has the floor.

Hon. Mr. Meen: Because the fact is there is a very substantial increase in the amount of tax these mining companies will be paying to their respective municipalities; a very substantial amount. Whether the additional tax they pay goes to the municipalities directly or goes back to them in grants of assistance of one sort and another, for educational purposes or whatever the fact remains that all this money -- the doubling in the amount of mining taxes, the 24 per cent increase in the land tax and business tax -- comes out of one treasury. It’s out of the treasury of those companies and that’s a very significant amount of tax to raise.

Mr. Renwick: Stop that nonsense. Mr. Chairman, I want to know whether --

Mr. Chairman: The member for Grey-Bruce.

Interjections by hon. members.

Mr. Chairman: Order, please, let the member --

Mr. Renwick: I want to finish the point if the member for Grey North will let me.

Mr. Sargent: Mr. Chairman, I have the floor here.

Mr. Chairman: Order, please. Perhaps we should let the member for Riverdale continue his point.

Mr. Renwick: I want to finish this point if I may, Mr. Chairman.

Mr. Chairman: Then we’ll have the member for Grey-Bruce.

Mr. Renwick: It’s Grey-Bruce.

Mr. Sargent: It doesn’t matter. It’s not Grey South.

Mr. Renwick: Am I correct? I want to know whether the minister and I are in agreement.

Hon. Mr. Meen: Probably not.

Mr. Renwick: The revenue figure he speaks of as being the additional revenue gained by the mining municipalities by virtue of this particular change in the Assessment Act is the product of a mill rate applied to the assessed value of the property. Is that correct?

Hon. Mr. Meen: Of course.

Mr. Renwick: Right. The Treasury has given him the revenue figures.

Hon. Mr. Meen: Yes.

Mr. Renwick: Why is it now not possible for him to give to us in this assembly, when we’re asked to make this change, the mill rates and the assessed values which will produce that amount of revenue? Why can’t he give us the basic information? I want to know what is the additional assessed value of the property in the mining municipalities which will be subject to tax by virtue of this change in the assessment basis. He doesn’t have it.

Hon. Mr. Meen: Mr. Chairman, I simply answered before that I do not have that information. I have the net result which, in terms of dollars, has to be the most important item of all.

Mr. Chairman: The member for Grey-Bruce.

Mr. Sargent: Mr. Chairman, I would like to ask the minister, granted that the Treasurer has doubled the mining tax in his budget this year, if the minister figures returning $2 million to the municipalities in grants in lieu of taxation, I submit, Mr. Chairman, they’re not meaningful. If we don’t know, we can’t resolve the underground plants.

The other end of the picture is how much money are we missing by not taxing the underground plants? If the underground plant is worth half a billion dollars maybe we’re bypassing $10 million in taxation. I want to say to you, sir, we don’t know how many millions of dollars we’re passing up. Here we have a situation in which no other sector in our economy has such a large profit structure as the mining industry.

No other sector has enjoyed so many hundreds of millions of dollars of depletion allowances. No other sector receives these in our economy. And no other sector of our economy gets its raw product for nothing. It belongs to the people. They get it for nothing. So it is completely unreal, as the member for Riverdale says, for you to class this industry with a charitable institution. It’s unreal.

So for you to toss the figure of $2 million buy-back in lieu is not real. It is not business-like, and I suggest you tell us, Mr. Minister, if you can, how much underground plant you are bypassing in taxation.

Hon. Mr. Meen: Mr. Chairman, I understand that there is little underground plant of any consequence. The expensive plant -- the smelter -- the valuable machinery is above ground. You have things like the primary crusher, as I mentioned before, your track, your little cars that run along the track and your pneumatic drills, and what not, but --

Mr. Sargent: That’s construction.

Hon. Mr. Meen: Yes, but that’s a very small --

Mr. Sargent: That’s taxable.

Hon. Mr. Meen: That’s still exempt under paragraph 19, but that’s a very small part of the total plant and machinery of the company. So that I think we are getting a substantial part of it by the amendment proposed in my bill.

Mr. Good: Mr. Chairman, one point, I think, has to be clarified. As I read section 17, machinery, smelters and concentrators are exempt from taxation. All we are adding here are the buildings above ground, in other words, houses. Let’s not --

An hon. member: Shacks.

Mr. Good: Let’s not confuse ourselves here. The exemptions in section 17 still pertain to machinery and equipment -- and they would still be exempt under section 17 of the Act. All you would be taxing would be the buildings, that are above ground, is that not correct?

Mr. Renwick: That’s right.

Mr. Good: Machinery that is used for the purpose of concentrators or smelters of the ore or metals including the foundations on which they rest, would still be exempt?

Hon. Mr. Meen: That’s right.

Mr. Renwick: Is that a correct statement, I am asking the minister? Is that a correct statement? When you speak about the present situation where it states that a concentrator or smelter of ore or metals is by the double negative, now subject to tax, the minister simply is talking about the shelter within which the concentrating and smelting operations are carried on, because, as the member for Waterloo North says, the machinery forming part of the smelter or the concentrator is already picked up, and will continue to be picked up, under paragraph 17. So, you really --

Hon. Mr. Meen: Yes, but you are still assessing.

Mr. Renwick: That’s a correct statement.

Mr. MacDonald: You almost exempted it nut by nut throughout the machinery.

Mr. Chairman: Those in favour of Mr. Cassidy’s motion will please say “aye.”

Those opposed will please say “nay.”

In my opinion the “nays” have it.

Shall we stack these?

Mr. Renwick: Call in the members.

Mr. Chairman: The amendment before the committee is that of Mr. Cassidy that section 2, subsection 2 of Bill 87 be deleted and the following substituted for subsection 2: “Paragraph 19 of the said section 3 as re-enacted by the statutes of Ontario, 1971, chapter 79, section 2 is repealed.”

The committee divided on Mr. Cassidy’s motion, which was negatived on the following vote:

Clerk of the House: Mr. Chairman, the “ayes” are 34, the “nays” are 47.

Mr. Chairman: I declare the motion lost and the section carried.

Section 2 agreed to.

Mr. Chairman: Order please, the member for Waterloo North wishes to comment on section 6. Is there anything before section 6?

Mr. Cassidy: Section 3 Mr. Chairman.

On section 3:

Mr. Chairman: The member for Ottawa Centre on section 3.

Mr. Cassidy: On section 3, Mr. Chairman, I am just looking at my notes here. I wanted to comment on the inadequacy of the change that was made here and to ask the minister why it was that the opportunity hadn’t been taken, since these amendments were taking place, to make some major changes in the business tax assessment, given the anomalies which exist in that system and given the pledges that were made by his predecessor to make major reforms in business tax on a progressive basis.

We were not happy with the idea that business tax would take five or six years to reform, but certainly what’s proposed here does not represent any significant step toward reform whatsoever. So could the minister tell me what is the reason for the delay, what the government’s intentions are now as far as the business tax reform is concerned and why the government is being so slow?

Hon. Mr. Meen: I understand what the hon. member is getting at, Mr. Chairman. Briefly, the business tax is the most appropriate way in which to derive additional revenues from quarters such as this, and with respect to section 3 itself the amendment is appropriate. Without that amendment, the tax would fall under the general omnibus provisions of the bill, which would levy the tax at 30 per cent instead of 60.

Mr. Chairman: Shall this section stand as part of the bill?

Mr. Cassidy: If I could find my copy of the bill it would be helpful.

I accept what the minister says about that particular point, but the problem is that in a series of amendments of various sorts to the bill, nothing has been done to carry out the promise that was made by the former Minister of Revenue a year and a half ago. He promised that there would be steady steps toward ensuring that there was a common business tax rate and that it was a reasonable one.

It would seem to me that a rate of 75 or 90 per cent would be a reasonable kind of rate to begin with. Right now, we have rates that go as high as 140 per cent for distillers. Brewers, for some reason, pay 75 per cent. Wholesalers pay 75 per cent. Smaller retailers -- retailers with fewer than five stores, no matter how big those stores are -- pay 50 per cent. Car parks, of all things, pay only 25 per cent.

The whole system is crying out for reform, Mr. Chairman. The government has had an opportunity to ensure greater equity, and in this particular case it is not bringing it in. Not only that, if I can go back to the question of car parks -- a government that says it wants to put the emphasis on transit should be ensuring that people who pay business tax at the rate of 50 or 75 per cent don’t get a preferred rate for the parking of their cars -- professionals and people like that. It just doesn’t make any sense to us that nothing more was done than to make an inconsequential amendment in this particular section.

Section 3 agreed to.

Mr. Chairman: Is there anything before section 6? If not, the member for Waterloo North on section 6.

On section 6:

Mr. Good: Mr. Chairman, under section 6 I would like an explanation from the minister. We’re dealing with assessment on apartment buildings and the allocation of portions of that building to the various tenants so that the taxes can be properly apportioned between public school and separate school supporters. It has been, of course, customary for the tenant to indicate his preference for support, whether it be to the public school or to separate school.

This section, as I read it, says the assessment shall be proportioned in relation to the ratio the rent of the space occupied by each tenant bears to the fair market rent of the entire parcel of real property. Previously, I would say, if the assessment was divided equally among 12 apartments in a building, portions would go to separate or public school support. I suppose that portion which was common room, basement, hallways and what not, would go where the owner had indicated on an assessment basis.

What I don’t understand is why the fair market rent enters into the apportionment of tax money to separate or public school support. We’re talking about assessment on market value. The Assessment Act says: “All property shall be assessed on market value.” Now we’re talking about dividing it up in proportion to fair market rent.

I understand and I realize that in every assessment of a multiple residential building being rented out there is a rental factor which would have some input into the fair market value. But since we’ve moved to market value assessment, the assessment on the building has to be what a willing buyer pays to a willing seller, if we’re really going to talk about fair market value.

I would like an explanation, first of all, of how the distribution is going to be; whether it’s going to be an equal one-twelfth in the case of a 12-plex, divided among the tenants in relation to their support for public or separate schools. If you start monkeying around, telling the tenants what, in your mind, fair market rent is for their apartments I think you’re going to have a lot of landlords concerned as to their rental divisions between various floors of the apartment buildings, one of which probably rents for more than the one below it and so on up. In many instances the higher you go the higher the rent is which, I think, is an acceptable practice; people prefer certain floors. I wonder if the minister would give me a little detailed explanation of what is the purpose of this.

Hon. Mr. Meen: Mr. Chairman, the way the Act reads now is that assessed values are allocated on a portion of the square-foot area occupied by each of the tenants. This means that parts of the lands and buildings are excluded from that apportionment.

In the illustration given by the hon. member for Waterloo North of the 12 apartments, regardless of where they were in the building there would be an apportionment, as I understand it, under the Act, on the basis of their actual square footage for the purpose of taxation. This would mean that certain parts of the building are excluded from taxation.

Common areas like hallways, parking areas and so on, shafts, malls -- we’re seeing more and more of those in commercial establishments -- result in lots of business tax to the municipality. The intention of this amendment is to allocate the space occupied by tenants in a different way, on the basis of the relationship the fair market rent of each tenant’s quarters bears to the total fair market rent of the entire property.

The payment of rent presupposes that each tenant enjoys certain rights of access to and egress from the space he occupies. It therefore presupposes some interest in the common areas and rent also reflects a value, we believe, that the common areas add to these tenancies.

I might say, for example, that a tenant occupying 1,000 sq ft on a ground floor opening out into a mall, is going to have a fair market rent substantially higher than a tenant occupying the same number of square feet off in a different area of that complex, up a floor or two higher, in which he didn’t have what some of us call “walk-in business,” He would have access to the mall of course, but only access in the sense of people coming to see him. So his fair market rent would be a good deal less.

In this way we think that there will be a more equitable distribution of the apportion.

Now, this section, I might add, will also ensure that the school boards will get their fair apportionment of the total taxes levied against a property. And remember those taxes are paid by the owner. They’re not levied against the tenant. This is just really for the apportionment for this purpose. We will then have a fairer apportionment of the school taxes between the two school boards -- the separate and the public school boards -- which otherwise would not be possible.

Under the present section, prior to amendment, the common areas don’t wind up getting any kind of apportionment, and the taxes relative to those areas are directed according to the owner, whether he is a separate school supporter or a public school supporter. The taxes relative to those common areas are now apportioned according to where he directs them. Under the proposed section, there will be an apportionment of the total tax dollars in relationship to the school support of the tenants, relative to their fair market rent.

The last point raised by the hon. member, as to the difficulty of assessing a fair market rent, may well be a good one. But fair market rents are being assessed now, and I don’t think any particular difficulty is likely to arise.

Mr. Good: One further question: At present, would the owner of a mall, for instance, be paying business tax on the common areas? And are you saying that in future the tenants would have the business tax apportioned among them, in relation to the areas they occupy, and also to the parking lots and the common areas and everything else? Is the owner paying business tax on these elements at present?

Hon. Mr. Meen: The answer to the latter question is no, he is not paying business tax now on those areas. Under the readjusted arrangement, because the fair market rent would take into account the elements used in common, and that enter into the value of his rent, the answer would be that he would pay business tax based, in some fashion or other, on those common areas as well.

Mr. Good: The tenants will be paying the business tax in those common areas under this amendment?

Hon. Mr. Meen: Yes, that’s what I meant to say.

Mr. Good: Under this amendment?

Hon. Mr. Meen: Yes.

Mr. Good: So, in other words, you’re going to get additional taxation from this amendment through --

Hon. Mr. Meen: Not necessarily.

Mr. Good: -- through the business apportionment.

Hon. Mr. Meen: Not necessarily, because it’s all simply a matter of the way in which it is apportioned. But the apportionment would reflect the use of these common areas, some being more valuable than others.

Mr. Good: Okay. Section 6 agreed to.

On section 7:

Mr. Chairman: The member for Ottawa Centre.

Mr. Cassidy: A point of information to the minister --

Mr. Chairman: Will there be a lengthy discussion on this?

Mr. Cassidy: Not really.

Mr. Chairman: We have time for a quick question.

Mr. Cassidy: A quick question, yes. I’m sorry to interrupt. Does this basically relate to the evaluation for assessment purposes of HOME lands, or other lands which are owned by the Crown, but leased in residential areas? Is that the intention, or are there wider intents involved in section 7?

Hon. Mr. Meen: The intention is that it would apply. These words are added, “and against the tenant to the extent of the assessed value of the portion of the land occupied by the tenant.”

Mr. Cassidy: Could the minister bring in a better statement about that after the break, because I understand that section 26 confines this section to tenants on Crown land. I would like to know the purpose of bringing in this amendment.

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