Legislative Assembly of Ontario

The House resumed at 8 p.m.

LANDLORD AND TENANT AMENDMENT ACT

Hon. Mr. McMurtry moved second reading of Bill 50, An Act to amend the Landlord and Tenant Act.

Mr. Deputy Speaker: Does the hon. minister have an opening statement?

Hon. Mr. McMurtry: Very briefly, this bill is complementary to Bill 49, An Act to amend the Municipal Act. The effect of the amendment is to deem that in every lease of commercial premises there’s contained an agreement that, if the tenant carries on on the leased premises a business requiring licence by a bylaw passed to licence and regulate body-rub parlours or adult entertainment parlours and does not have such licence as required by the Municipal Amendment Act, the landlord may terminate the lease and re-enter the premises.

Mr. Renwick: We support Bill 50 as complementary legislation to the bill amending the Municipal Act in relation to the same topic. As far as we are concerned, the bill is sufficiently accurate and definite that, regardless of the social pressures to pass such legislation, the test is very clear; that is, there must be a licence. If there is not a licence, then that is the event which permits the landlord to terminate the tenancy and to re-enter the premises. On that basis and because it is so clear, we think it is well advised legislation and we certainly support it.

Mr. Blundy: The members of the Liberal caucus certainly support what is being attempted to be done in this bill. It is understood by us that this is concerned only with the licence for a premises that is to get a licence for a body parlour. There are many other licences needed by businesses of varying kinds. I understand it’s strictly for this purpose. With that in mind, we feel it is important that this bill be passed to amend the Landlord and Tenant Act in this way and we support that amendment.

Mr. Lawlor: I have just a word on the bill. It rises out of and as a background to the amendments under Bill 49 or the Municipal Act, which under previous legislation were fairly extensive anyhow. Why we are having the revision quite puzzles me up to a point. In any event, this is subsequent upon that and Bill 50, the following bill.

I would say a word about this problem of these stores or shops, and particularly about the pornography element involved in the background. It seems to me it’s probably preferable to have segmented portions of the city or some other place where this particular kind of high-grade literature may be available to the fair number, apparently, of our fellow citizens of adult age, admittedly, if you can call them that, who wish to peruse, absorb and delectate themselves with respect to the matter. I don’t want to be too high-minded, because I have looked at such matters -- to some personal delectation -- in the past myself.

Hon. Mr. Grossman: Would you expand on that?

Mr. Nixon: Might we have some detail on that?

Mr. Swart: You have imagination enough.

Mr. Nixon: It takes a very vivid imagination, indeed.

Mr. Lawlor: But in other cities I have been in, the cities which have been castigated by the Premier (Mr. Davis) here earlier this afternoon -- why he segregated out Sweden as a separate entity quite puzzles me; it is a dreadful thing to do, seeing that I was one of the people there. Just because the Attorney General wasn’t in Sweden but spent the balance of his time in that far more degenerate city, Athens, is neither here nor there. True, he paid his own way, and therefore I suppose had some kind of mitigating circumstances. At least he can call somebody to witness on his behalf when he is finally called onto the carpet, so to speak. He may call somebody to act as compurgator of the crime -- does he remember that old term in medieval law?

Hon. Mr. Grossman: What’s that?

Mr. Lawlor: Members know, they kind of compurgate all over the place. A rather dreadful phenomenon, et cetera. It’s like expelling too great a quantity of water if you have been drowned.

Those major cities -- Amsterdam, Athens, Copenhagen, Stockholm --

Mr. Nixon: Brantford.

Mr. Lawlor: -- have taken -- I don’t know if the word in these circumstances is sophisticated, I find sophisticated people to be generally very naive on the whole; but that’s the term they use, particularly in the New Yorker magazine which is the favourite magazine of my good friend sitting a little to the right of me here.

Mr. Nixon: He is to the right of everybody, but I will tell him.

Mr. Lawlor: All his natural human wisdom is compurgated from the New Yorker magazine. He won’t go to a movie unless it is mentioned favourably.

Hon. Mr. Grossman: Did they refer to Pretty Baby there?

Mr. Lawlor: But in these cities they have seen fit to segregate certain areas where this kind of trash can be shown, and it is a most interesting part of the city. I made a special trip on a couple of occasions.

Mr. Nixon: Are you recommending Lakeshore?

Hon. Mr Grossman: Queen’s Park.

Mr. Lawlor: The wide range of printed production -- I won’t say literature -- together with other rather exotic devices is something to bepuzzle the upper regions of the cerebellum.

Mr. Nixon: Devices are not included.

Mr. Lawlor: In any event, it’s there and it’s a rooted factor in our society. This is a kind of bludgeoning Act -- this particular area is exposed to children particularly, blatantly exhibitionist in intent, on a main route in the city. We could conceivably oppose it; it is justifiable in itself, nevertheless the strong grain of the Puritan mentality is operative in the thing in so far as it gives no cognizance to an alternative or to some kind of safety valve built into the society in this particular regard.

In the extension of the Landlord and Tenant Act in this way, as we all know up to this time certain types of houses, houses of ill-fame, if they were established so by a court proceeding the landlord then could issue an eviction notice, gain a writ of possession and empty the premises. The extension of the principle into this particular area in this particular kind of operation, et cetera, while operative in that particular area of the city, and while we all know what the design of the legislation is, is an attempt one should take exception to. In a broader way, in a wider vein, it probably is restrictive of human liberty and human potentiality and it should be mentioned in the course of this debate that such may very well be the case, and exception taken to it.

One has to be extremely jealous. As my final thought, in the kind of society we have where a vast ring of other evils, sins, if you will, et cetera -- sins of ambition, sins of envy, sins of acquisition, sins of overreaching, sins of dominance of other human beings -- are far more diminishing of human possibility over against the sexual, which is largely a human weakness rather than something intrinsically malicious, these things have to be balanced and kept in some proportion. I would think the legislator of this province would be cognizant of this and somewhat jealous of the range of possibilities envisaged in this legislation.

However, it would be political death, of course, to take too much umbrage with it. Therefore, I sit down.

Mrs. Campbell: It was a most interesting conclusion to debate on this bill. Perhaps if I were to follow the same principle, I would sit down before I stood up.

It’s obvious this is a bill which has been asked for by municipalities. It’s a bill they regard as important, particularly in a city such as Toronto. I was just wondering, however, if the Attorney General would be prepared to advise us as to whether this is the first step and whether we might see the second step next year, when we would he moving into residential premises. That’s the same sort of proposition.

Obviously, this bill must have the support of this House, partly, I think, because of the demands of the municipalities across the province that there be something which they can look to as a way of control, a weapon, if you like, to serve their purposes.

I must say that I do find it a difficult sort of situation for a landlord because I could see that there might be many cases where a landlord might, in the long run, find himself penalized by reason of the non-performance within the meaning of this bill. He or she might not be in a position to really know the circumstances of the operation or whether or not there was licensing involved. It does give me some concern. If the Attorney General in reply could somehow alleviate some of these concerns, I would appreciate it.

I don’t think I can speak at length, nor do I want to be philosophical about it. It’s a purely practical matter. Speaking for this caucus, we would support the principle of the bill.

Mr. Deputy Speaker: Does any other hon. member wish to participate in the debate? If not, the hon. minister.

Hon. Mr. McMurtry: Very briefly, I certainly don’t think I can add very much to what has already been said by the hon. members opposite.

I think the concerns raised by the member for St. George perhaps are, with respect, more germane to Bill 49 --

Mrs. Campbell: That’s right.

Hon. Mr. McMurtry: -- because Bill 50 does give the landlord some rights in relation to getting rid of a tenant, quite frankly, who neglects --

[8:15]

Mrs. Campbell: Also an obligation.

Hon. Mr. McMurtry: Yes. I appreciate that. I’ll speak to the other matter of Bill 49 while I’m on my feet. Bill 49 does recognize the fact that it’s possible that landlords may quite innocently, while acting reasonably, suffer harsh consequences by reason of the use to which their premises are put without their knowledge. I think it’s important to draw the members’ attention to the sections of Bill 49, which we’ll be discussing in a few minutes, which provide relief for a landlord from any order closing down the premises. As I say, we will be discussing those sections shortly.

Motion agreed to.

Ordered for third reading.

House in committee of the whole.

MUNICIPAL AMENDMENT ACT

Consideration of Bill 49, An Act to amend the Municipal Act.

On section 1;

Mrs. Campbell: I was just angry enough with this bill that I was going to rise and propose a number of amendments, not particularly as they relate to what is before us in this bill, but rather to that which is not before us in the bill. Those of us who have been struggling through the justice committee, dealing with the bill known as the Hamilton bill, I think must be somewhat irate because this bill goes part way to alleviate some of the problems there but doesn’t begin to meet the rest of the problems which are related to this particular situation.

However, having given consideration to that and recognizing that probably I would be ruled out of order, it doesn’t make sense that in one bill we cover all of the problems but rather we allow municipalities to stagger from one problem to the next without resolving their problems in toto as we have the opportunity to do. I assume there would be little profit to me in rising to move in debate amendments which would be at least as lengthy as the bill itself.

I am always angered when I see this kind of lack of understanding of the problems of municipalities in the field covered by this Act. However, as I say, I have no amendments to offer and I suppose we will stumble along to resolve some of their problems from time to time as we go.

Mr. Swart: Mr. Chairman, I am wondering whether you’re going to take this clause by clause now. We had the general discussion on the bill under second reading. I would like to make a few comments on section 1(3), if I may, but there may be others who want to discuss earlier items.

Mr. Deputy Chairman: Any items before that one?

Mr. Renwick: It would be helpful if the Attorney General would respond, since we did pass in the previous session of the previous Parliament the enabling legislation. These are basically amendments to that enactment of section 368 (a) of the Municipal Act. Therefore, it would appear to me that the amendments which the minister is proposing relate to specific problems which have arisen with respect to the enforcement of the bylaws passed under the section as originally enacted by the Assembly in 1975.

I think it would be helpful if in each subsection the minister would tell us what the problem is that requires each of the particular amendments to which reference is made in this bill. I think that is particularly appropriate with section 1 of the bill; not necessarily so with section 2, although it may also apply to section 2 of the bill. So would it be possible for the minister to tell us why we are now called upon to entertain these miscellaneous amendments to the provisions of 368(a) of the Municipal Act as enacted in 1975?

Hon. Mr. McMurtry: I have no objection. First of all the bill enacted in 1975 dealt with the phenomenon that had become known as the proliferation of the so-called body-rub parlours. Since that time, and in view of that legislation which required licensing, obviously many of these establishments changed their modus operandi and became involved in a number of other activities that generally came under the heading of nude encounters of one kind and another. So the intent of this kind of legislation, of course, is to expand the licensing requirements to this other type of activity which has caused problems for municipalities about the province.

Section 1 also adds powers over and above what was contained in the 1975 legislation in relation to body-rub parlours. It adds powers to regulate or prohibit “any printed matter, oral or other communication or thing” used to promote body-rub parlours. That is added in conjunction with body-rub parlours.

Mr. Renwick: I suppose that was because of the use of handbills handed out in the streets in the vicinity of the premises.

Hon. Mr. McMurtry: That is correct.

Mr. Deputy Chairman: Any further discussion on section 1, subsection 1? On subsection 2 then.

Mr. Lawlor: Just one question on section 2. The McRuer nostrum coming in -- I don’t take exception to it, but again I think it should he brought to your attention -- the business about an inspector, whoever he may be, a medical officer or otherwise, day or night or at any hour entering upon premises. Does this in any way disturb or bother the residual civil libertarian sense of the Attorney General?

Hon. Mr. McMurtry: I don’t think there is any doubt that this gives municipalities powers greater than what they have enjoyed in the past. There certainly is the potential for using these powers in an unfair and arbitrary manner, If municipalities with these additional powers were to act unwisely or unfairly then of course this would concern any members of the Legislature who are concerned with individual rights.

This legislation was discussed and reviewed very carefully in our ministry because of our concerns. We are simply of the view that anything less will not enable municipalities to carry out responsibilities in this area, Obviously we -- as all the members of the Legislature -- are going to monitor the manner in which this legislation is used in so far as these licensing powers, these regulatory powers are concerned, to see that they are not abused. The potential for abuse, I must confess in my view at least, is there.

Mrs. Campbell: I’d like to --

Mr. Deputy Chairman: We were on section 1(2), and I think the member for Lakeshore got over to section 2. We are still on section 1(2).

Mrs. Campbell: Fine. In this section and throughout the bill we are dealing with the power of municipalities to license. We are talking about licensing, regulating and so on. One of the things that is causing me concern is that while it is granting powers to license, the government seems to be very indefinite as to the procedure for licensing the municipalities. I would ask the Attorney General why he would not spell out, where he is granting powers to license, the procedures by which licensing does take place so that municipalities are not in the dark as to how they exercise these powers of licensing?

Hon. Mr. McMurtry: I am not sure that I can respond to that. Some municipalities have licensing commissions; some do not. Some licensing, as the hon. member knows, is done directly by municipal councils.

In the circumstances, in order to provide legislation which would be of use to municipalities across the board, this in our view is the appropriate legislation. Whether or not there may be a need, for perhaps the Treasurer (Mr. McKeough) or someone else with general responsibility for the Municipal Act, to introduce new licensing legislation governing the procedure of licensing bodies across the province, I am not really in a position to offer useful opinion one way or the other at the present time.

I gather the legislation involving the city of Hamilton has caused some concern in this respect. I am aware in only very general terms of that concern. But it seemed to me at least that in view of the fact that municipalities, particularly the municipality of Metropolitan Toronto but other municipalities as well, have been pressing for this legislation for some time, that it was in the public interest to get on with it. My advisers -- and I am certainly satisfied with their advice -- have indicated to me that this is the best form in which to present such legislation at this given point of time.

Mrs. Campbell: Mr. Chairman, I guess it just points to the fact that the left hand doesn’t know what the right hand is doing. Where you have a licensing commission, as you do in the city of Toronto, I would think there is no problem. But where a municipality wants a licensing commission, and can’t get it because the Treasurer has decided that he is opposed to it, it leaves that municipality somewhat in the dark, I suggest, as to how it proceeds to carry out this very important function, which [think most municipalities of any size across this province want to see in effect. It is just that kind of gap that I think is unreal when the minister is producing legislation of this nature.

[8:30]

Mr. Lupusella: Mr. Chairman, I have the same concern which was raised previously by my colleague from Lakeshore. It seems that in this particular section of the bill that the minister has introduced, the main issue he is trying to portray is simply the regulation of the business of a body-rub parlour. There is no such device about a particular system or particular method to find out what kind of abuses are going to take place as soon as the licence has been given to a particular person interested in that particular business. I think this section is lacking in some way because there is no monitoring system as soon as the licence has been issued to monitor what kind of abuses take place. It seems that the general concern of the Attorney General on this bill has been just to regulate the business and give the opportunity to municipalities to regulate that particular business. I think that we should include in some section, maybe in that subsection with which we are dealing now, some kind of monitoring system in order that we can monitor the abuses which eventually might take place. I would like to have a response from the Attorney General.

Mr. Roy: Mr. Chairman, I don’t want to --

Mr. Deputy Chairman: On this same subsection?

Mr. Nixon: Subsection 2, dealing with advertising?

Mr. Roy: Exactly, Mr. Chairman, I am dealing with section 1(2), and the powers that we are going to give municipalities to “provide for regulating the placement, construction, sixe, nature and character of signs, advertising,” et cetera.

I don’t want in any way to unduly prolong this debate but it seems to me, as a somewhat naive individual, that what we are trying to accomplish here by giving such powers to municipalities is, frankly, to give them power to prohibit the functioning of these body-nib parlours. I am just wondering why we don’t deal with it directly? If that is what we are trying to accomplish, why don’t we at the provincial level pass legislation saying that that type of operation is prohibited, or why don’t we give municipalities the right to prohibit the operation of such institutions? I find that less offensive than this piddling around whereby municipalities are going to be starting to do indirectly exactly what we are not prepared to do directly?

Hon. Mr. McMurtry: It’s a matter of the constitution.

Mr. Roy: It’s a matter of the constitution. You are saying that in doing it in such a way, by giving that sort of power -- I would like to hear the opinion on the question of constitution. If we gave that sort of power, is the Attorney General of the opinion that we would be embarking in the criminal field?

Hon. Mr. McMurtry: Yes.

Mr. Roy: Is that the problem with the constitution? Is it the opinion, therefore, of the Attorney General and his officers, that if we gave the municipalities the power to prohibit, or if in fact we passed provincial legislation prohibiting, the operation of this type of institution or business that it would be considered an encroachment on the field of criminal law and in fact against the constitution? I’m not so sure about that.

Hon. Mr. McMurtry: Well I’m satisfied. That is certainly the view of my senior law officers. There are a number of cases that make it quite clear that the province does not have the right to prohibit in this area without having its legislation deemed to be an attempt to pass legislation within the exclusive jurisdiction of the federal Parliament, namely within the area of criminal law. There is a great deal of legal authority to this effect. If the hon. member is interested --

Mr. Roy: I accept your word for it.

Hon. Mr. McMurtry: -- I will be happy to send him some of the citations. I am sorry I don’t have them tonight. A’s a matter of fact, I didn’t even know until 6 o’clock this evening; but notwithstanding that, we are prepared to proceed.

Mr. Nixon: That’s incredible. You have a very well organized system; your Honie leader is going to be aghast.

Mr. Deputy Chairman: Order. Mr. Nixon: He is aghast.

Mr. Roy: May I ask if the Attorney General is saying that there is no case law or jurisprudence to the effect that if municipalities are given this type of power under section 1(2), and if they in fact -- let’s say, for instance, the municipality was to pass a bylaw saying that body-rub parlours shall not have signs that are larger than one centimetre by one centimetre, something as ridiculous as that --

Mr. Nixon: Sounds like a Tory.

Mr. Roy: -- is there any jurisprudence to the effect that if the restriction is an undue restriction it is an encroachment on the federal field; that it is not a matter of regulation but rather is a matter of indirectly prohibiting the operation of the body-rub institutions?

Hon. Mr. McMurtry: A municipality could prohibit any signs. It’s my off-the-cuff opinion that the prohibition of signs would not be considered by the courts tantamount to a prohibition of activity. For example, a municipality might feel for aesthetic reasons that on a particular street it is going to eliminate any signs of any size whatsoever. That in itself would not he deemed, I don’t think, to be a prohibition.

What we are attempting to do by this legislation -- obviously many people consider it very offensive to be on a city street, particularly a major city street, and be confronted with a large sign proclaiming a certain activity which they find an intrusion of their privacy. But there is a significant difference between regulation and prohibition. Certainly if the Legislature were of the mind to prohibit this type of activity, it would be much more simple just to prohibit or give the municipality the power, to prohibit it absolutely. However, I am satisfied that would be unconstitutional; and as I said there are many reported cases, which make it quite clear that you cannot prohibit under the guise of regulation.

Mr. Roy: You are saying, as I understand it, that even with increased enforcement under the provisions of the Criminal Code therefore, of the type of activity that goes on, that would not be good enough for municipalities to control this type of activity. They would need this added power under this law.

For example, we tolerated for a long time what happened on Yonge Street until the unfortunate incident involving the young boy. All at once, it was just like magic, with enforcement and everything else, the street seemed to be all cleaned up. That had nothing to do with --

Mr. Nixon: Even without this legislation.

Mr. Roy: Yes, that had nothing to do with this legislation. It had to do, basically, with enforcement of the Criminal Code. It bothers me, frankly, that --

Mr. Renwick: And the attitude of society.

Mr. Roy: Yes; so I am just wondering, since municipalities, city councils, through their board of police commissioners and all that, have a sort of jurisdiction over the enforcement of the Criminal Code, why we would he giving them this type of legislation. When the crunch comes we can move in with proper enforcement of the Criminal Code. As the member for Riverdale has said, if there’s sufficient public pressure it would appear that the tools presently exist now to do something without -- the Attorney General has said it earlier, this legislation is open, it invites all sorts of abuse and --

Hon. Mr. McMurtry: I didn’t say it invites it.

Mr. Roy: I say, then, it invites abuse, and you see a potential for abuse. Certainly the potential is there, and as you said it will require very close monitoring. I am just wondering -- in view of what happened on Yonge Street, I think that is the most obvious example, without this type of legislation We were able to clean it up -- why are you saying the municipalities feel that for constant control, maintenance of control over the long term, they need this.

Hon. Mr. McMurtry: Mr. Chairman, with respect, I would have thought these comments would have been more appropriate on second reading -- dealing with the matter in principle. I thought the principle of the legislation was adopted. But notwithstanding that, I reiterate what I said earlier, many months ago, that the municipalities did have powers under the Criminal Code. Our own ministry drew to the attention of the municipality of Metropolitan Toronto the provisions of the Disorderly Houses Act, for example. I had taken the position that there were present powers with respect to proper enforcement of the Criminal Code to clean up -- to use that general term -- many of the abuses, much of the flagrant activity that was being carried on. I think subsequent facts bore out the correctness of this.

But I can say that some weeks before the very tragic murder, the Jacques case, occurred on Yonge Street, I had instructed members of my ministry to start to prepare draft legislation in consultation with the municipalities. Because, notwithstanding the present powers, their existing powers weren’t sufficient for the municipalities to effectively shape the character Of the neighbourhoods of the community in a way that was in the public interest. Therefore, I take the position that this legislation is needed.

We have seen the lure of the dollar to certain enterprising people who have found a market for activity which is not only very offensive to the majority of the community but, unfortunately, has had the potential to attract and has in reality attracted a lot of other activity which does, quite frankly, amount to criminal activity. It is true the Criminal Code can deal with a criminal activity per se; but the very character of the neighbourhood that had been developed did create an atmosphere which attracted criminal activity. Obviously it is in the public interest to try to give municipalities powers to control or regulate the nature of commercial activity, particularly some commercial activity which, when carried on in a flagrant fashion, does attract this other activity, which is clearly criminal.

It is true that such criminal activity can be dealt with by the Criminal Code but, in order to get at some of the root problems, the municipalities and their elected representatives are convinced this legislation is necessary, and we are satisfied that it is necessary. Notwithstanding our concern that it be administered fairly, reasonably and justly, we think it is necessary, and it would appear that the principle of the legislation was supported on second reading.

Mr. Deputy Chairman: The member for Welland-Thorold.

Mr. Swart: I am somewhat confused. You said we were dealing with subsection 2 but, as I read the bill, we are still dealing with section 1(1), which replaces section 368(a) (2). But in the bill we are still dealing, are we not, with section 1(1)?

Mr. Deputy Chairman: That had carried, but I think there is some confusion as to the numbering in the bill.

Mr. Swart: I want to speak on the same subject that the previous members have been speaking about --

Mr. Nixon: We are still on section 1 of this bill.

Mr. Deputy Chairman: We’re still on section 1.

Mr. Swart: -- which is section 1(1), which replaces 368(a)(2) --

Mr. Nixon: Oh, that’s carried.

Mr. Swart: -- which is the permissive legislation for municipalities to pass bylaws.

I have a feeling that all the debate we have had so far is a repeat of the debate that took place on second reading of this bill, and I am not sure whether the member for Ottawa East (Mr. Roy) was here at that time through all the second reading debate --

Mr. Roy: I see you don’t have a very good memory; I was here.

Mr. Ruston: You don’t remember him being here, Mel? My goodness.

Mr. Kerrio: It’s bad enough that the government does that to Albert.

Mr. Swart: -- but it was clearly explained by myself, and the Attorney General at least, that the licensing --

Mr. Nixon: You don’t get the impression that he was raising a second reading point, do you?

Mr. Deputy Chairman: Order. Does the member for Brant-Oxford-Norfolk wish the floor after this speaker?

[8:45]

Mr. Nixon: Yes.

Mr. Deputy Chairman: You’ll be next, if you will allow the member for Welland-Thorold to continue.

Mr. Nixon: I just wanted to help him.

Mr. Swart: It’s perfectly obvious that no licensing bylaw can prohibit anything that is legal, though it may license it. When it comes to the point -- and this has been fought out many, many times in courts -- where it is a prohibition or appears to be a prohibition, then the court will rule that section ultra vires. I think that was discussed a week ago tonight. A licensing bylaw, I suggest, cannot prohibit adult entertainment parlours, if they’re quite legal under the Criminal Code.

In the discussion last week I asked the Attorney General if he would make representation for changes in the Criminal Code so that municipalities could do this. This may be difficult, hut many of the municipalities would like to prohibit these kinds of establishments. From a very practical point of view, it seems to me they should have that right. However, I recognize that under the way the Criminal Code is they cannot do it.

I support this change, this replacement of the old subsection 2 of 368a, and the rather wide powers it grants the municipalities. I know the member for Ottawa East is opposed to that and doesn’t think municipalities should be trusted with those kinds of powers. I could quote from him from the debate a week ago tonight when he said:

“I suppose it is necessary legislation, but it is not legislation I like very much. There is far too much power given under this legislation to municipalities.”

Mr. Roy: Right. I’m not backing off from that.

Mr. Swart: It seems to me that if we have some faith in municipalities to be able to solve this problem, we have to give municipalities these kinds of powers.

Mr. Roy: Some of the civil libertarians might agree with me.

Mr. Swart: I prefer it to some kind of ruling from the provincial level. Even within the province, there is a great variation, from municipality to municipality, in the kinds of adult entertainment parlours, the hours they are open, et cetera. I would think any provincial legislation which ruled

Mr. Swart: Pardon? from the top would not be acceptable to those municipalities.

After some experience has been gained in the administration of this, there may be some changes to this section and perhaps to other sections of this bill. There are two or three changes to other sections of the bill I’ll come to in a few minutes that I would advocate.

Subsection 1, changing permissive legislation for municipalities to licensing them in that manner, meets with my approval.

Mr. Deputy Chairman: Is subsection 1 agreed to?

Right. On subsection (2) then, Is subsection 2 agreed to?

Mr. Nixon: I have a question on subsection 2. Are we still on the advertising?

Mr. Deputy Chairman: Subsection 2 is agreed to. On subsection 3.

Mr. Nixon: When did we do it subsection by subsection?

Mr. Swart: This is one area where I disagree with the authority given to municipalities. Subsection 3 amends, again section 368a. In 5(a), it says: “A bylaw passed under this section may prohibit any person carrying on or engaged in the trade, calling, business or occupation for which a licence is required under this section from permitting any person under an age specified in the bylaw to enter or remain in the body-rub parlour or any part thereof.” It seems to me that there should be consistency in our legislation as to where a person becomes an adult. Certainly according to this a municipality could permit them to go in at 14, 16, 18, 21 or 25, I suggest that when we have the accepted age of 18 as an adult for all the purposes I know in our society it should also apply in this case.

I just don’t see the reason why you leave this wide open. You set the age at which people may vote in municipal elections. Conformity seems reasonable to me and it seems that this should conform with all the other legislation.

Mrs. Campbell: They can leave home at 16.

Hon. Mr. McMurtry: This particular wording was requested by the municipalities, but I think the hon. member opposite makes a very valid point. I’d be quite prepared to accept an amendment that perhaps said “permitting any person under the age of 18.

Mr. Swart: If we need a motion I would move that the words “specified in the bylaw” in lines four and five of that subsection 5a be removed and the words “of 18” replace those words. It would read: “is required under this section from permitting any person under the age of 18 to enter or remain in the body-rub parlour or any part thereof.”

Mr. Deputy Chairman: Could I ask the member to --

Mr. Swart: Put it in writing?

Mr. Deputy Chairman: -- write the motion out, please? We’ll hold that section until the motion is written and then we’ll take the motion.

Mr. Roy: On that point, I agree with the member for Welland-Thorold that that makes more sense than the way it’s presently drafted, but I’m just wondering, is that not again giving the power to municipalities to decide if an adult or a minor is going to go into an establishment? Is it your considered opinion that that is not offensive to the Criminal Code and the constitution -- off the top of your head?

Hon. Mr. McMurtry: It’s my considered opinion of the last five seconds that it’s quite constitutional, quite defensible.

Mr. Roy: I am not so sure.

Mrs. Campbell: Shall we stand it down?

Mr. Deputy Chairman: Stand it down. We will move on to section 2 of the bill and we will come back to subsection (3) of section 1 when the amendment is written out.

Mr. Breithaupt: Are you certain the definition section isn’t sufficient?

On section 2:

Mr. Deputy Chairman: Is there any comment on section 2 of the bill?

Mr. Nixon: I have a comment.

Mr. Deputy Chairman: On section 2?

Mr. Nixon: It isn’t in one of the earlier subsections. It is on page three and has to do with subsection 9(b): “‘goods’ includes books, magazines, pictures, slides, film, phonograph records, prerecorded magnetic tape and any other reading, viewing or listening matter.” The hon. minister may recall me raising this matter on second reading.

What about the other category of goods which seem to be occupying the time of our courts these days that is not described by any of those nouns or adjectives? You’d probably call them hard goods, I believe. But the minister may recall a court case recently which held the attention of all the readers of the Toronto Sun, in which --

Mr. Breithaupt: All of them?

Mr. Nixon: Well, you and me.

Mrs. Campbell: Both of them.

Mr. McClellan: All six of them.

Mr. Nixon: -- in which you may recall the jury was in stitches -- I think it was the way it was described -- at the description of the goods being sold in this particular emporium. But it occupied the time of the courts and the person operating the place -- parlour? place? -- had to close up because the jury found that what they were doing transgressed the Criminal Code. Would it not be worth consideration that we extend our rather elaborate definitions to include those emporia?

Hon. Mr. McMurtry: I would be very interested in what you might have in mind.

Mr. Nixon: Naturally. I have described it as fully as is necessary, and if the Attorney General can’t cope with it then neither can I.

Mr. Breithaupt: It could be described as everything you can think of.

Hon. Mr. McMurtry: I would just like to point out that the definition section says that “‘goods’ includes” -- it does not exclude the material you are referring to.

Mr. Breithaupt: You are saying the odd business doesn’t count.

Hon. Mr. McMurtry: An “adult entertainment parlour” and “goods.” It think it is open -- well not only open but a court would include in the definition of “goods” perhaps some of the articles to which the hon. member has referred. That section does not exclude such considerations.

Mr. Nixon: Carried.

Mrs. Campbell: I don’t think the Attorney General knows what you are talking about.

Mr. Deputy Chairman: Is the member for Welland-Thorold on section 2?

Mr. Swart: Yes I am, Mr. Chairman. We have a similar amendment we would like to make to subsection 1. Do you want a written motion for that too?

Mr. Deputy Chairman: Yes. I need everything in writing.

Mr. Roy: Why?

Mrs. Campbell: Because he can’t follow it unless it is in writing, that’s why.

Mr. Deputy Chairman: It is the rule of the House, though, that amendments must be presented in writing. Can we return to section 1(3)?

Mr. Swart moves that subsection 3 of section 1, which is the new subsection 5a of section 368a of the Municipal Act, be amended so that the fourth and fifth line thereof will read: “section from permitting any person under the age of 18 to enter or remain in a body-rub parlour or any part thereof.”

That replaces the words “under an age specified” with “the age of 18.”. Any discussion on that amendment?

Mr. Breithaupt: One would think that “any person under the age of 18” would be the operative phrase so that the words “under an age” specified in the bylaw would be the words that were struck out

Mr. Deputy Chairman: The effect of the amendment as written by the member is slightly different. I am reading it as he has put it.

Motion agreed to.

Mr. Deputy Chairman: Mr. Swan, I understand, is moving a similar amendment to section 2(7) but I’ll wait until I get it in writing.

Section 1, as amended, agreed to.

On section 2:

Mr. Roy: I’d like to make a comment on section 2(5), and that involves the right of entry by a medical officer of health, a public health inspector or a peace officer. I was just wondering if the Attorney General appreciates that he is giving very wide powers to these individuals to enter these establishments at any time of day or night. Generally the criterion for the actions of peace officers, or officers enforcing bylaws or whatever, is based on reasonable and probable grounds. In this particular case, you have it phrased in such a fashion that he may enter if he “has reason to suspect that a breach of any provision of a bylaw under this section has occurred.”

Is it your intention under this section to require even a lower standard? You don’t even require the standard which has been acceptable under British common law of reasonable and probable grounds to just enter these premises. These are wide powers. They may enter a room at any time of day or night “for purposes of carrying out the enforcement of a bylaw passed under this section.” Was it the feeling of the municipalities or the law enforcement individuals that even that was not sufficient? I thought that was a fair and reasonable standard, “reasonable and probable grounds,” rather than just “has reason to suspect.”

[9:00]

Hon. Mr. McMurtry: Yes, this is a matter that was discussed with municipal authorities and law enforcement authorities. If you required them to obtain a search warrant -- and we are talking about commercial premises as opposed to residential premises and I agree that different standards would be applied -- quite frankly, we are facing a situation in which to require what would amount to be the same standards as having a search warrant would make it very difficult for enforcement. Again this was a decision that was arrived at only after some careful consideration of the nature of the problem and the dimensions of the problem.

I reiterate my concern that this potential for abuse is here, but I think municipalities are convinced they do require such a right if they are going to effectively enforce these bylaws and I am satisfied they do. As has been pointed out by members opposite, if experience tells us we have gone too far, then of course we will have to take another look at the section, but at the present time it would be very difficult. That is a very crucial section and I am not surprised that the member for Ottawa East has focused his attention on it, hut I am satisfied that it would be difficult for effective enforcement without that right.

Mr. Roy: Let me ask you this, for purposes of clarification: If you claim that that power is necessary, or if the law enforcement agencies in municipalities feel that it is necessary, when you say that it is limited, involving commercial premises, why could it not apply to residences?

As I understand section 368a, this type of activity could go on in a private residence, could it not? If that was the case, then you are giving that power to enter into residences. Maybe you can help me in that. I may have missed something in this legislation. What is there about this legislation that limits these powers, in the enforcement of it, to commercial premises?

Hon. Mr. McMurtry: This whole matter is in respect of an adult entertainment parlour, the officer may enter such adult entertainment parlour. I would think there is an onus on the person entering the premises to ascertain that it is an adult entertainment parlour. If it turned out to be a private residence, then I would think that there would be a remedy for the person whose privacy may have been invaded. Because it does specify that we are talking about entering an adult entertainment parlour.

Mr. Roy: Yes, but again, as I understand the section, the definition of adult entertainment parlour means: “any premises or part thereof which has provided goods or services appealing or designed to appeal to erotic sexual appetites and inclinations.”

As I said to you jokingly last week, I suppose you could close down a lot of apartments of individual members here if you enforce this section --

Mr. Nixon: Not in our caucus.

Mr. Roy: Not in our caucus, my House leader says.

Mr. Warner: Speak for your own.

Hon. Mr. McMurtry: I hope your wife doesn’t hear that comment.

Mr. Roy: My wife? There is no -- but I --

Mr. McClellan: I think, Albert, you are sinking.

Mr. Roy: Having in mind how wide this definition is of what you call adult entertainment parlour, you could close down a lot of premises. You could consider a lot of residential premises to be exactly that. If that is the only criterion I am concerned. Having such a wide definition of what is called an adult entertainment parlour, I am concerned that the medical officer of health, public health inspector or police officer has that kind of power.

As far as you can tell -- again I am asking for assistance -- there is no other restriction on determining whether he can enter a premises or not. It is simply the fact that he makes a decision that he thinks that it is an adult entertainment parlour and that he has reason to suspect a breach of any provision of a bylaw. On that basis he can enter into any premises, day or night. I don’t like that very much. I think that’s exceedingly wide.

As I said before, I understand the necessity of this type of legislation but I don’t quite understand the necessity of the legislation being quite as open as this is and not having more restrictions than there are here.

I have to voice my concern about this, because if that is the only restriction -- I mean, it is all very well to say it’s commercial premises but that’s not the criterion; the criterion is simply determining that it is an adult entertainment parlour and, looking at the definition, that’s much too wide. I’m concerned about that. I would like to see some more control than we are leaving them with here.

Hon. Mr. McMurtry: With respect, Mr. Chairman, I think the way this is worded is stronger than what the hon. member might suggest to replace it. For example, if it talked about entering any premises that he had reasonable and probable grounds to believe was an adult entertainment parlour, that would fall short; that would be a less heavy onus on the peace officer than this, because it makes it quite clear that he only may enter an adult entertainment parlour, and not a premises that he believes or even has reasonable and probable grounds to believe is an adult entertainment parlour. But the onus is that he can only enter an adult entertainment parlour.

I appreciate the hon. member’s concern, but in say view this section places a heavier onus on the peace officer or the health inspector because the determination must be made, not just a belief or a suspicion, that it’s an adult entertainment parlour.

Mr. Renwick: Perhaps the minister has not quite caught the point made by my colleague the member for Ottawa East; perhaps he has and I’ve missed it. If the minister will look at the definition of body-rub parlour as it is set out opposite page two at the top of that page, it refers to “where a body rub is performed, offered or solicited in pursuance of a trade, calling, business or occupation.”

I think my colleague the member for Ottawa East is concerned that similar words do not appear in the definition of adult entertainment parlour on page three. In other words, there is nothing to indicate that an adult entertainment parlour is confined to the kinds of premises in which those particular goods and services are provided in pursuance of a trade, calling, business or occupation.

I think my colleague’s concern is perhaps that the clause is so wide that when you get to the entry power of a peace officer or medical officer of health under the provision where he “has reason to suspect it would give a licence to the peace officer to enter premises other than those in which a trade, calling or occupation is being carried on.

Perhaps the member for Ottawa East would clarify it, but that is the point I thought he was referring to, that “adult entertainment parlour” is not confined to some place where a trade, calling, business or occupation is being carried on and, therefore, is open to the interpretation that in fact it could be a private residence.

Hon. Mr. McMurtry: When one reads the section -- and the definition section, of course, as the hon. members opposite well know, cannot be read in the abstract -- I think it is quite clear, in a reasonable reading of the legislation, that what we are talking about is commercial establishments.

I am of the view that it would be very specious for any person purportedly acting in a position of authority on behalf of the municipality to argue that an adult entertainment parlour as defined in this legislation could mean any premises other than a commercial establishment of that character.

Mr. Roy: I recall the minister mentioning the question of commercial establishments on second reading as well, because I had expressed some concern at that time. My colleague from Riverdale has noted that in relation to body-rub there is a restriction there under section 368, subsection Gb, which is not in that subsection 9, in the definition of an adult entertainment parlour. I would like to reiterate that. Frankly, I am not in a position here to know how to propose an amendment. The only amendment I could think of at this time that I would propose would be, rather than to say “has reason to suspect,” I would suggest it be reasonable and probable grounds. I am not satisfied under this subsection 5 that under the guise of saying he’s enforcing a bylaw, a peace officer or medical officer or a public health inspector could enter private residences on the basis of saying they were adult entertainment parlours.

I voice my concern about it. I am sorry the Attorney General does not agree with me that the potential for abuse is there. When we are passing legislation here, we should look at some of these things and from all of our personal experience try to curtail or to prohibit this or try to see where there is an area of concern or an area of danger and plug that up before we pass this legislation.

I have expressed my views on it. I think it’s much too wide. I don’t have an amendment right now, other than to say I would suggest, in view of the fact I am not satisfied it’s restricted to commercial premises, that a medical officer of health or a public inspector or a peace officer should either have reasonable and probable grounds to enter the premises or should have a search warrant.

Mrs. Campbell: I am very indebted to my colleague for drawing this matter to our attention. I am afraid I read into this section, the first subsection which enables laws to be passed regulating adult entertainment places, and determined that there will be or there is a power by councils to pass such bylaws. Then going down to subsection 5, where we deal with the powers of the medical officers, I perhaps was lulled into a sense of false security in that it seemed to me that subsection 5 flowed largely from subsection 1 and that we were dealing with places which have been licensed by bylaw where a breach is suspected of such licensing. I don’t know how we could amend it in order to make it more applicable or to make it appear to be commercial only. That was my interpretation of this bill as it was before me.

Speaking to the powers, I recognize those powers are very stiff and very broad. However, I have lived with the problem in my own riding, and the fact that under existing legislation the licensing commission and those enforcing under the commission have almost no power at all to enforce the way it stands now. There is no continuity between the observation, the search warrant and getting back; this has been one of the major gaps which has caused problems in my riding. So I am not as upset about that particular provision or the fact that it is rather broad. I would hope we could monitor this as we go.

[9:15]

Perhaps the Attorney General could give me some assistance. Was it his understanding that since we have subsection 1, which provides for the licensing of adult entertainment parlours, that therefore when you come down to subsection 5 you are dealing with those premises which are licensed within this Act, and accordingly they would be, as I read it, commercial establishments?

Mr. Renwick: I agree with the Attorney General, that because of the provisions of section 2(11) you have an argument that can be made that what you are talking about is an adult entertainment parlour which is being operated for commercial purposes. I would much prefer to leave the wider terms of “have reason to suspect” in, provided I am satisfied that adult entertainment parlour is restricted to a commercial establishment,

I think the argument can be made that it is, but I can’t understand why those words aren’t perhaps in the definition section of adult entertainment parlour. I think probably in this instance I would not be prepared to go along with the more restrictive phraseology of “reasonable and probable cause.” I think the nature of the problem requires the police officers to be able to act on the basis of having “reason to suspect.”

But the problem still remains that you have to make an argument that an adult entertainment parlour is in fact a commercial operation. I think I agree with the Attorney General that that argument can he made; but I do draw to his attention that he eliminated the necessity of making that argument in the definition of body-rub parlour, by specifically including in the definition the phraseology “in pursuance of a trade, calling, business or occupation.” It was perfectly clear that the definition meant a commercial establishment.

As I say, I think the argument would be sustained, but I don’t understand why the prosecuting officer should be faced with the obligation of having to make that argument.

Hon. Mr. McMurtry: There is also section 2(7), which refers to "bylaw passed under this section may prohibit any persons carrying on or engaging in trade, calling, business or occupation,” as well as subsection 11.

In any event, I don’t want to prolong this debate; although I am satisfied that it would not be open to the interpretation that concerns the member for Ottawa East, I am quite prepared to propose an amendment to subsection 9(a) of this section of the Act by inserting, perhaps after the word “provided,” in the second line, the words, as has been pointed out by the member for Riverdale are in the other corresponding section with respect to body-rub parlours, the words “in pursuance of a trade, occupation, calling or business.” Perhaps that might be of assistance.

Mr. Chairman: Hon. Mr. McMurtry moves that section 368b(9)(a) of the Act as set out in section 2 of the bill, be amended by inserting after “provided” in the second line, the words “in pursuance of a trade, occupation, calling or business.”

Motion agreed to.

Mr Swart: You do have a motion from me before you for a previous subsection.

Mr. Chairman: Yes. This is in regard to subsection 7. The Chair has received an amendment from Mr. Swart.

Mr. Swart moves that section 368b(7) of the Act as set out in section 2 of the bill be amended by striking out “an age specified in the bylaw” in the fourth and fifth lines and inserting in lieu thereof “the age of 18 years.”

Motion agreed to.

Mr. Warner: I had a question related to section 2. I gathered we were dealing with section 2 in its entirety. I had a question which relates to subsections 2 and 9(b).

I take it you also have noticed the legal intimidation that’s prevalent here in the chamber tonight among all the lawyers. Undaunted, I shall try to get into this.

Mr. Breithaupt: You’re just going to add to the confusion.

Mr. Philip: It never bothered you before.

Mr. Warner: Lawyers don’t scare me too much.

Interjection.

Mr. Warner: Yes, I do. I had a question about the wording in subsection 2, particularly in the fourth line where it mentions “oral or other communication” and that type of wording is repeated in subsection 9(b), “prerecorded magnetic tape.” Does that mean those “hot line” taped messages that are available by way of the telephone as advertised in the local newspapers? If not, I’d appreciate an explanation.

If it isn’t the intent, would it not include that and does that present any sort of legal problem?

I take it from the advertisements in the newspaper that there are prerecorded messages in some establishments. They have been used; they are being used -- I don’t know whether they still are or not -- by way of the telephone. I don’t know if that was the intent of the legislation to get rid of that --

Hon. Mr. McMurtry: You can’t. It’s under the federal Bell Telephone Act and we can’t affect by provincial legislation what is a federal statute as far as the Bell telephone system is concerned. This is really to cover the recorded messages that are piped out onto the streets through loudspeakers.

Mr. Warner: Wasn’t that problem cleaned up earlier by the city of Toronto? I’m not trying to be provocative at all, but it seems to me that the city of Toronto cleaned up that particular aspect of the difficulty much earlier under some other bylaw, whereby they were able to get those premises which were piping out messages to cease.

Hon. Mr. McMurtry: I don’t really know what the answer to that is. There might be a noise bylaw, but apart from that I don’t know, other than just gentle persuasion. I don’t know just what authority the municipality would have unless it offended a noise bylaw.

Mr. Swart: I would agree that in some respects this section is rather broad and I mentioned this on second reading. I would point out again that this is permissive legislation to the municipalities. They’re going to use their discretion within this framework. In some instances it may be necessary to have this broad legislation, and therefore I think it’s important that we do approve of this section as it is.

May I say that I put a slightly different interpretation on section 2(9)(b), under the words “goods’ -- prerecorded magnetic tape.” I would not want anybody to interpret that I’m an authority on this, and the Attorney General did, but it’s my understanding that there are tapes per se which appeal to erotic or sexual appetites which can be bought, therefore are for sale. It would be my understanding that this would --

Hon. Mr. McMurtry: I bow to your expertise, sir.

Mr. Swart: I got in ahead of you. I said I don’t want anybody -- but I understand that that is what this applies to, rather than any appeal which is put on a loudspeaker or over the telephone or anything of that nature.

Section 2, as amended, agreed to.

Mr. Chairman: Any further comments on any section of the bill?

On section 3:

Mr. Warner: Section 3, did you have --

Mr. Bradley: Better get your act together over there.

Mr. Warner: Under 470b(1); I had a question about the -- as I read it, you’re talking about the person who leases the property, as opposed to the owner of the property?

Hon. Mr. McMurtry: This is one and the same; the owner could be convicted or it could be a tenant.

Mr. Warner: But if the premises have been rented out to someone and they are found guilty of carrying on something they’re not supposed to as set out in this bill, are you able under this section, then, to go after the owner of the premises as well?

Hon. Mr. McMurtry: Yes.

Mr. Warner: Who may have no knowledge of what the people are doing to whom he had rented?

Hon. Mr. McMurtry: Yes.

Mr. Warner: Why do you want to do that? Hon. Mr. McMurtry: Because without doing that it’s impossible to enforce it. We provide relief to the owner who can satisfy the court that he had no knowledge.

Of course what happens is that without placing some responsibility on the landlord, the people who carry on these businesses just change their names; or they may incorporate, create a different legal entity week-by-week just by incorporation. So unless you place some onus of responsibility on the landlord, people can defy this legislation by creating a different legal entity, by carrying on business in a different name almost on a day-today basis.

This has been the experience of municipalities throughout the province. So unless you place some onus or responsibility in relation to the owner of the premises, the capacity, the ability to licence and regulate becomes meaningless.

Mr. Warner: You see, I thought perhaps this was covered in the section above, 470a (1). They talk about the person who contravenes the bylaw, I assumed that that’s the offender, that’s the person who is carrying on the practice that is unacceptable. What you’re saying, then, is that you’re requiring the owner to have full knowledge of what he’s rented the building out for?

Hon. Mr. McMurtry: To exercise some reasonable care or otherwise the building may be closed down. There is power already in existence under the Disorderly Houses Act, but under subsection 3 of that section we provide the owner with some relief to apply to the court and perhaps in the appropriate case to post a bond. Otherwise, unless there is some onus and responsibility placed on the owner, the results which I’ve just :been speaking about will occur.

The individuals, of course, the actors in the piece, can change day-by-day. If somebody gets charged they may even disappear. The premises, and the business being carried on by ABC Nude Encounters, just opens up the next day as DEF Nude Encounters; and on and on it goes.

[9:30]

Mr. Warner: Does that also apply then in case of the property management operation for an absentee landlord? In that situation do you go after the property manager?

Hon. Mr. McMurtry: I guess that is why there are property managers for absentee landlords, to keep some reasonable control with respect to the nature of the activities that go on on the premises. There is no question but that without this provision, as I have already indicated, people who wish to flout the legislation can in fact make a mockery of it.

Mr. Warner: I appreciate that and I certainly want the Attorney General to understand that I fully support having legislation whereby you can close the place down if there is a problem. I understand that, I appreciate that; it should be done. The Joe Martins of this world should have some problems coming to them and should be dealt with; I understand that.

I was just a bit unclear as to what the intent was with respect to the owner. It is entirely possible that a large property owner -- maybe Cadillac Fairview or somebody that has a lot of property -- may not know exactly what is going on in all of its premises, and you are going to come in and hit them with a $10,000 flue. I Was concerned about that. Maybe the $10,000 wouldn’t bother Cadillac Fairview though.

Hon. Mr. McMurtry: Mr. Chairman, never did I think I would hear the member for Scarborough-Ellesmere express concern about Cadillac Fairview.

Mr. Warner: You see, if you stick around here long enough, you lean a lot of things about my sense of equity and fairness.

Mr. Roy: Mr. Chairman, I want to say to the Attorney General that I have looked over closely this power that is given to the courts to close down premises. At first blush, I thought. “My God, here we go again, giving untrammelled powers to courts.” But having read the subsequent sections, and the appeal provisions and all the safeguards that are entered into this legislation, I am satisfied.

I want to say to the Attorney General that I have been extremely critical of many aspects of this legislation. I may be emphasizing the obvious by saying that, but the fact remains that I have had serious reservations. However, looking at all the provisions in relation to the closing of premises, I think there is an attempt on the part of the drafters of the legislation, on behalf of the Attorney General, to have some balance in the closing. The appeal procedures and the remedies that are given as a matter of protection to people who may bear the brunt of this type of order are there, and certainly these are safeguards.

The previous speaker, the member for Scarborough-Ellesmere, was saying that the Joe Martins of the world -- I don’t know who he is -- should have a hard time. That may be so -- I don’t know what he is; whether he is an owner around here or something else -- but even these people are entitled to due process. As detestable as some of their activities may well be, under our system of justice these people are also entitled to full due process. I am not suggesting that the member was against that; all I am saying is, as much as we want to make it difficult for the operation of these types of business establishments which, as the Attorney General said, for a dollar are obviously prepared to stoop to any type of measure or to try to satisfy the lowest appetites of individuals.

The fact remains that we must be careful when we are passing legislation that full safeguards are given. That is the tradition of the common-law system. That is the tradition in this province and one hopes that is the tradition all of us here will follow.

I want to say to the Attorney General I am satisfied that sufficient protections are given in these sections.

Mr. Swart: Mr. Chairman, I share the views of the previous speakers, by and large. I recognize the validity of the comments made by the Attorney General in this section, but I do have a little conccern, particularly with the words “shall ... be closed to any use.” There is no option there left with the court.

I would point out that this is not the section that deals with the contravention of a bylaw, that they have not been proved to be operating an illegal establishment, they have not been convicted of any criminal offence, or done anything of that nature. They just haven’t had a licence. I can think of instances where a person might rent out his property to a bookstore and within that bookstore they may cater to the exotic, or whatever words you want to use. The municipality that has a bylaw might decide that was an adult entertainment parlour under this Act, and rightly so. If the person was convicted of operating without a licence, then would the owner of that premises have his premises closed, must have his premises closed, even though he may have known nothing about it.

I am just asking the Attorney General if the word “may” -- I want to have this tough too, but I want it to be fair -- and I am wondering, if it were changed to read “the court may order that the premises or part thereof he closed to any use”; would it give more discretion then to the court? Although in the majority of instances perhaps the court should and would order that the premises be closed, I can foresee certain instances where perhaps it shouldn’t be closed for that period up to two years. It would mean that the owner would have to go through those procedures, which I grant are there under subsection 3.

I would prefer to see the discretion left with the courts with the clear intent in the bill, of course, that the court would have the power to do this. I would like to have the Attorney General’s views on just changing that one word to “may.”

Hon. Mr. McMurtry: I think the points raised by the member are very valid ones, but I have to say that this is a matter that was also a subject of some discussion with the municipalities. I am in a rather awkward position here, because I don’t want to say anything that sounds like a general criticism of the courts, hut the municipalities were strongly of the view that the difficulties they had encountered in the courts with respect to breaches of the municipal bylaws and penalties had been such that, without some sort of mandatory provision, albeit a tough provision, in their considered view it was not going to have the teeth they desired for the legislation.

Again, I remind the member that relief can be obtained. Certainly it was the intention of the drafters of the legislation, pursuant to my instructions after some considerable consultation, that we wanted this particular section to be pretty tough in relation to licensing provisions. We are dealing with a fairly limited area of commercial activity, and quite frankly, we want to get the message through to that type of operator that if he is in breach of the licensing provisions the penalty can be pretty tough.

There are these other provisions, the appeal provisions to which the member for Ottawa East referred a few moments ago, but I have to say to the member for Welland-Thorold that while his concerns, I think, are very valid, to change the word from “shall” to “may,” in the considered opinion of people who reviewed this matter, is not likely to produce the results that are anticipated or expected or hoped for in the passage of this legislation.

Mr. Swart: I still have some reservations, because the very following subsection says the court may order, if he is convicted of a contravention of a bylaw passed under these sections, which is every bit as serious.

Hon. Mr. McMurtry: That’s without a licence.

Mr. Swart: If he knew the conduct, or ought to have known the conduct, the court may order that the premises or part thereof be closed to any use for any period not exceeding two years. Surely there should be some conformity in this, It would seem that’s at least as serious an offence in subsection 2 as it is subsection 1. Why would there not be conformity between the two?

Hon. Mr. McMurtry: We are drawing a very definite distinction between a breach of this legislation that is related to carrying on this type of occupation without a licence, and other breaches that may occur with someone who has obtained a licence. What we are trying to do and to accomplish by this legislation is to focus on the requirement of obtaining the licence. This has been the cmx of the problem with respect to these operators who cause so many of these problems that have been experienced by municipalities throughout this province. They are people who just refuse to obtain a licence.

We are deliberately drawing a distinction between a breach of the legislation which is related simply to carrying on a business of this kind without a licence -- or there might be some other breach; for example, it may be some sort of a health requirement. The person may have a licence, but the sign or the form of advertising may offend the provisions of the bylaw. What we are saying is that the penalty should not necessarily be as harsh for someone who has at least made an attempt to pay attention to or to abide by the fundamental requirement of the legislation, that is the obtaining of a licence.

Other breaches of the bylaw which may occur after the obtaining of a licence may be much less serious in nature, if we are going to focus on that problem. Therefore, we agree that in such cases, the licence having been obtained, the courts should have a very wide discretion as to what penalty should be imposed in a particular circumstance.

Mr. Swart: I would like to pursue this matter a little further. I am not fully satisfied with the answer given by the Attorney General. If the operator is convicted of something under the Criminal Code in these premises, operating a bawdy house, we’ll say, where is the provision in here that the premises will be closed? He may have had a licence. He may have carded on the business of the licence but carried on other businesses there too. How would you get that person to close the premises for a period of two years? That would seem to me to be the place where, really, the greatest need exists. Where do we get them under this bylaw?

Hon. Mr. McMurtry: In that particular case there is already in existence the Disorderly Houses Act, the existence of which we drew to the attention of the municipality of Metropolitan Toronto last summer. You may recall they retained counsel -- as a matter of fact, a former senior law officer of the Ministry of the Attorney General -- to bring applications under the Disorderly Houses Act where people had been carrying on activity which led to criminal conviction. This was quite widely publicized pursuant to the Disorderly Houses Act; and because of these breaches to the Criminal Code, there were a number of premises closed down under that Act, and that law is at present in force.

[9:45]

Mr. Roy: May I make one comment and I appreciate what the member for Welland-Thorold was talking about under subsection section 3(2), which deals with 470b(1). At first blush, reading that, it appeared to be a very offensive and onerous section in that the court did not have a discretion to order or not to order; but on the concern expressed by the member for Welland-Thorold, very often the courts, you know, are not as rigid as we pretend that they are, and given a situation as he suggested as a matter of example, I can recall the courts, sometimes when we were dealing with offences where there was a mandatory jail term or something, where the courts would impose something like 24 hours, so that you just check in and check out. In the same way it can order the premises or part thereof to be closed for any period. The courts for all intents and purposes could order the premises to be closed for an hour, I suppose, or for 24 hours.

So surely there’s sufficient discretion given in the courts, because my original reading of it was that it appeared the courts were obliged to close the premises for a period not less -- I thought it was not less than two years on first blush, but given that discretion that it’s not exceeding two years there is an awful lot of flexibility, and the court can act accordingly.

Hon. Mr. McMurtry: It can be only for one day.

Section 3 agreed to.

Sections 4 and 5 agreed to.

Bill 49, as amended, reported.

CORPORATIONS TAX AMENDMENT ACT

Consideration of Bill 28, An Act to amend the Corporations Tax Act, 1972.

Section 1 agreed to.

On section 2:

Hon. Mr. Maeck: I have an amendment to section 2.

Mr. Chairman: Hon. Mr. Maeck moves that sections 2 to 23 of the bill be renumbered as sections 3 to 24, respectively; and that the bill be amended by adding thereto the following section:

“Section 2(1). Clause (c) of subsection 2 of section 2 of the said Act, as re-enacted by the Statutes of Ontario, 1977, chapter 58, section 2, is repealed in the following and substituted therefor:

“(c) Dispose of taxable Canadian properties and the meaning given to that expression by subsection (1) and section 248 of the Income Tax Act of Canada, if the reference in that definition to section 2 of that Act were a reference to this section, that was property situated in Ontario as prescribed by regulation; or

“(2) Clause (c) of subsection 3 of the said section 2, as re-enacted by the Statutes of Ontario, 1977, chapter 58, section 2, is repealed and the following substituted therefor: (c) dispose of taxable Canadian property within the meaning given to that expression by subsection 1 of section 248 of the Income Tax Act of Canada, if the reference in that definition to section 2 of the Act were a reference to this section, that was property situated in Ontario as prescribed by regulation or,”

Hon. Mr. Maeck further moves that the necessary complementary amendments be made to section 23 as renumbered of the bill in order to bring the new section into force on the 8th day of December, 1977; and to reflect the renumbering of the remaining sections of that bill mentioned in section 23.

Hon. Mr. Maeck: Perhaps I could give an explanation; it might be helpful. This amendment adds a new section 2 to the bill to reenact section 3(2)(c) and (3)(c) of the Act in order to correct an omission which was made when those clauses were re-enacted by Bill 88, which came into force on December 8, 1977. The words “that was property situated in Ontario as prescribed by regulation” were inadvertently deleted and will now be restored to those clauses.

The other amendments made by these motions are strictly complementary to that one.

Mr. Nixon: I sincerely hope that the minister understands what he said more than I do. That is something, surely, to be desired.

Mr. Turner: Did you not follow that?

Mr. Nixon: It looks to me as if this amendment -- by the way, not that it’s significant in this particular instance, but I don’t believe we got notice of this amendment.

Hon. Mr. Maeck: I am sure that notice was sent to your critic.

Mr. Nixon: Well, if the minister says so, that’s good enough for me. Our critic was just called out for a few moments.

Hon. Mr. Maeck: I think he will have the notice.

Hon. Mr. Parrott: As was the rest of your party.

Mr. Nixon: I’m now financial critic, I’ll tell you. I’m now being joined by another financial critic who is knowledgeable in this. But it appears to me that your predecessor, probably two or three predecessors, have made a substantial error in amendments that were put before the Legislature previously, and the error escaped the fine-tooth investigation that is given these amendments year by year in this House.

I’d like to ask the minister if there is anyone who would be injured by way of taxation that would be payable by the fact that we are now retroactively fixing the mistake his predecessor made.

Hon. Mr. Maeck: I don’t believe so, although I’ll have an answer for that in a moment or two. It really is putting back in a phrase that was deleted. My understanding is that we have used the Act as it was meant to be used, and we corrected it by adding the phrase. I don’t think we interpreted it any other way in the meantime; but I will double-check that for you.

Mr. Nixon: I am concerned about that. But it really means that nobody in the universe knew that we made a mistake until somebody told the minister and told him to correct it --

Mr. Germa: We knew.

Mr. Breaugh: We picked that up, Bob.

Mr. Nixon: -- and he can assure us that the significance of this is applicable only to himself, a couple of his advisors, and the member for Oshawa.

Mr. Breaugh: That’s right.

Hon. Mr. Maeck: That’s right.

Mr. Chairman: Shall the amendment carry?

Motion agreed to.

Section 2, as amended, agreed to.

Mr. Breaugh: All-party agreement on that.

Mr. Nixon: There are no other mistakes you want to fix up before we carry the bill?

Hon. Mr. Maeck: That’s the only one.

Sections 3 to 24, inclusive, agreed to.

Bill 28, as amended, reported.

MINISTRY OF GOVERNMENT SERVICES AMENDMENT ACT

Consideration of Bill 31, An Act to amend the Ministry of Government Services Act,

1973.

Mr. Chairman: Are there any comments?

Mr. Nixon: Has the minister got any amendments that he wants to bring forward? There were some indications that contracts above a certain value should not be signed by the deputy but should have the direct attention of the minister. He may remember those comments made by some of my colleagues on second reading.

Hon. Mr. Henderson: In response to the hon. member, all contracts are signed by the minister -- all contracts.

Mr. Nixon: I appreciate that, Mr. Chairman. I know he gave that answer when he was responding to the bill in principle. But the bill does give the administrative officials of the ministry the right to act on behalf of the minister.

While this minister is here, I have no doubt that even the most minute business transaction will have his personal attention and probably bear, if not his signature, at least his initials. I appreciate the fact -- and I mean this most sincerely -- that he takes it very seriously. But the bill does permit an administrative official to make a decision on behalf of the minister. It was suggested there be a limit to the size of the contracts where that special ability on behalf of the administrator would pertain.

Hon. Mr. Henderson: Firstly, I’m sure you understand the procedure of the advertising.

Mr. Nixon: Yes.

Hon. Mr. Henderson: Before a contract is let, it is first scrutinized by the deputy minister, then it comes to the minister for signing. The purpose of this particular section is -- let’s suggest we were out on a contract repairing a building wherever it might beat the moment, the individual operating that contract doesn’t have authority to buy a keg of nails.

Mr. Breaugh: What about the cross?

Hon. Mr. Henderson: We don’t have authority to buy the cross, either. The idea is that he will be able to go up to $10,000 without reporting to head office. This is the procedure book --

Mr. Nixon: Very impressive.

Hon. Mr. Henderson: I could read you what he would have to go through but I don’t think you want me to read that tonight.

Mr. Nixon: Not everybody could lift it.

Mr. Eakins: Is the minister saying that nothing under $10,000 is advertised?

Hon. Mr. Henderson: No. If there’s a repair on a jail in Sarnia, for example, or Lindsay --

Ms. Nixon: Lindsay, yes.

Hon. Mr. Henderson: If they were painting a jail there and they needed paint --

Mr. Nixon: Ten thousand dollars’ worth of paint?

Hon. Mr. Henderson: No, that’s the example. That’s the limit we have set. It might be $10. I’m sure the hon. members both realize that maybe $10,000 is far higher than it needs to be. We feel for economics we should put the figure at $10,000. It’s not going to change the present procedure anyway. It’s to regularize the present procedures.

Mr. Chairman: I’m sure the members have the bills in front of them. Which section are we --

Mr. Nixon: Mr. Chairman, I didn’t want to bring this to the attention of anybody here who might have the responsibility of these bills, but my bill book doesn’t have --

Mr. Chairman: That would he section 3.

Hon. Mr. Henderson: Section 3(b).

Mr. Nixon: Did you want to do it by subsection, Mr. Chairman?

Mr. Chairman: Shall section 1 of the bill carry? No?

On section 1:

Mr. Germa: I’m going to take the opportunity of asking the minister a couple of questions related to construction of public works. I’m specifically referring to a new provincial building which is going ahead in my riding of Sudbury, wherein the minister has entered into a lease-purchase arrangement.

I never could see through the bottom dollar of those things. I did a rough calculation of what the lease-purchase arrangement is going to cost the government at the end of a 25-year lease. It appears that a $10 million budding, which is the professed value of the building, is going to cost the minister $28 million at the end of a 25-year lease.

Perhaps the minister would take this opportunity to run through the figures with me of how the government of Ontario is the benefactor when you enter into lease-purchase arrangements for construction of public works?

It’s my impression that if the government of Ontario has to acquire X square feet of spare and this space has to be constructed, it would be financially beneficial if the government went ahead and either through direct contract or through their own activity erected the building, rather than enter into a lease-purchase arrangement.

I understand that at the end of 25 years the building does revert to the province. Of course, the province is the title holder at the end of 25 years. But in the interval, it seems to me that in this particular instance we have a building which is going to cost the province some $28 million and the projected value of construction at this point in time could be something like $10 million. I’m wondering about the $18 million of carrying charges and lease-purchase arrangements and rentals involved in the situation. Maybe the minister would be pleased to tell us exactly how we benefit from this kind of arrangement as opposed to an outright hard price contract.

[10:00]

Hon. Mr. Henderson: I’ll be very happy to respond to the questions of the hon. member. When we decide to proceed under a lease-purchase agreement such as we are doing in the city of Sudbury, first, the province acquires the necessary site where the building is going to be placed. Second, the province appoints their architect who brings in the plan of the building and this is usually approved by the user ministry. For instance, if it’s Natural Resources, the office space for them is approved by them. Following this we put the plans out for tender for someone to place the building there and supply the money or a lease-purchase agreement.

The hon. member is no doubt correct on his $28 million for a $10 million building. When you apply the interest over that period of years -- I don’t have a calculation of the actual interest at this moment, but past plans have proven to us that if the current interest rate is 10 per cent, for example, it usually ends up that over the 28 years we pay approximately 12 per cent for the supervisory and the clerical work that goes with it. There is two per cent in there as a rule for the builder. We could say the government is losing that two per cent, but we don’t believe that is the case. We would have to hire additional bookkeepers, additional staff.

First, the contract is competitive bidding. It’s advertised. In the ease of the building in Sudbury, I believe it was 14 bids we had on that building. You could correct me. You no doubt have a list, but it seems to me it was 14. In that particular case, we did take the cheapest contractor. So it is competitive bidding, exactly the same as if we were doing the building and calling contracts, and the same as if we issued a 25-year debenture. We think it’s competitive. It helps the credit rating of the province.

Mr. Foulds: How?

Mr. Nixon: Wow I It needs all the help it can get.

Hon. Mr. Henderson: It helps the credit rating of the province.

Mr. Foulds: How?

Hon Mr. Henderson: We don’t have to do the borrowing.

An hon. member: Very good, Lorne.

Mr. Breaugh: You also don’t have to show the costs.

Interjection.

Hon. Mr. Henderson: No, but it’s a competitive bid. It’s a competitive bid all the way.

Mr. Foulds: You can get into trouble, like you did with Thunder Bay courthouse.

Hon. Mr. Henderson: The Thunder Bay courthouse; the hon. member --

Mr. Nixon: Let’s go over that courthouse again. I hear it’s subsiding, sinking.

Hon. Mr. Henderson: Mr. Chairman, the hon. member is well aware that we debated the Thunder Bay courthouse quite thoroughly this time last week and we believe that the procedure of the lease-back is good business for the province -- competitive bidding, competitive interest rates and with 14 tenders I am sure you would agree there were sufficient tenders to make it good competition.

Mr. Nixon: Carried.

Mr. Germa: I wonder if the minister could detail in dollar terms what is the benefit to the province in dollars over a 25-year period

-- over the lease of this particular building? What benefit do we get in dollars as opposed to constructing the buildings ourselves as the province of Ontario?

Mr. Nixon: Many dogs.

Hon. Mr. Henderson: I’d have to respond in this way that I would expect there’d be very little difference either way -- up or down. I don’t have the dollar figures, but we believe it’s competitive and not far apart.

Mr. Germa: It’s probably good for the minister to have a belief, but until he can prove to the critics that he is in fact doing a benefit to the taxpayers of Ontario, we can’t rest on that. I am particularly suspicious that the person doing the construction might go out and get money at 11.5 per cent and charge 12 per cent. He is peeling off half of one point for doing nothing except moving the money from his pocket into yours. Until you can prove to me there is some benefit, I don’t know why I should have to accept a lease-purchase arrangement.

Hon. Mr. Henderson: The interest rate is competitive bidding. That’s part of the bid; that is part of the tender.

Mrs. Campbell: That doesn’t answer the question.

Hon. Mr. Henderson: That is part of the 14 tenders we have received. We accept that when we accept the tender. We don’t necessarily have to know what the person is paying for the interest. The interest rate is competitive bidding in all 14 tenders at so much per month for the 25 years this building is constructed to supply the money.

Mr. Germa: Going from another direction, can the minister give me a price?

Mr. Williams: On a point of order, it is my understanding that we are dealing with Bill 31.

Mr. Philip: You are hardly the person to call order.

Mr. Williams: I believe the discussion to date has been very much out of order, Mr. Chairman. Can we continue with the bill on a section-by-section basis?

Mr. Germa: We are dealing with construction and acquisition of properties. I suspect I am in order. I am dealing with one specific acquisition and construction of a provincial property.

Mr. Chairman: Yes. I would say, however, that the hon. member is being very specific. I appreciate that much of this should be discussed during the estimates of the ministry.

Mr. Germa: Could I respond by saying I am dealing with the principle of lease purchase as opposed to the total purchase of a building? That is what I am particularly dealing with.

Mr. Martel: You have to deal in specifics to get an explanation of how it works.

Mr. Foulds: He is using an illustration.

Mr. Nixon: You used the wrong word there. You should deal with the principle on second reading.

Mr. Germa: I am talking about the principle of lease purchase as opposed to outright purchase. The minister has the power under the bill to acquire property. He interprets that to mean he can do it by lease purchase.

Mr. Chairman: Are you referring to subsection 2(e)?

Mr. Nixon: Under section 1(1) he has the power to acquire, lease and dispose of public works.

Mr. Martel: That’s right on.

Mrs. Campbell: Dead on.

Mr. Martel: This is clause by clause. We are not talking about principle now. He is perfectly in order.

Mr. Germa: Section 1(1) says: “It is the responsibility of the minister and he has power, in accordance with section 8, to acquire, lease and dispose of public works.” He has the power to acquire and he has acquired by lease purchase a particular building. The principle I am questioning is, is lease purchase beneficial as opposed to outright purchase? I am asking the minister where he has a $28 million project here what would be the figure if he went ahead on a straight purchase arrangement for that property over a period of 25 years. Have you got a figure to compare with the $28 million figure I have given you?

Hon. Mr. Henderson: Again, I restate, the province acquires the land, the province appoints an architect and advertises the plan for tenders exactly the same as if it were hiring the contractor. But we go one step farther and advertise the interest rate as well, if you want to call it that We advertise for a contractor to build the building and to finance the building and we will pay him for that building over a 25-year period. We really have fully competitive bidding all the way.

Mr. Martel: What are the savings if you build it yourself?

Hon. Mr. Henderson: I say you can’t do it any cheaper. It is competitive bidding.

Mr. Breaugh: No, it isn’t

Hon. Mr. Henderson: It certainly is. It is competitive bidding; the whole thing is advertised. We have 14 tenders.

Mr. Breaugh: No, it isn’t.

Hon. Mr. Henderson: Tell me how it is not.

Mr. Nixon: We have a matter of high principle here.

Mr. Martel: I just want to ask the minister, since he provoked me, what my colleague is attempting to find out.

Hon. Mr. Henderson: Do you mean he’s not capable?

Mr. Mattel: Yes, but he is having difficulty getting through to the minister.

Mr. Breaugh: We try to help one another.

Mr. Mattel: I’ll just try to put it in a little different perspective. If the government were to build that building itself -- financing it, actually putting it out to tender, purchasing the land, as the minister said -- or do it via the route by which the ministry is prepared to do it, surely the minister should be in a position to tell us.

Mr. Sterling: He did.

Mr. Mattel: No, he didn’t. He said, “Take my word for it.”

Hon. Mr. Henderson: No, I didn’t.

Mr. Mattel: Let me finish --

Hon. Mr. Henderson: Mr. Chairman, on a point of order: I told him there was competitive bidding and the cheapest bid was taken. It is not a matter of taking my word for it. There were 14 tenders on the building, and the cheapest tender was taken. So it is not my word; the proof is out there. The proof is in the pudding and eating it.

Mr. Mattel: I am not talking about 14 tenders at all. What I am asking the minister to explain to us is, if the province undertook that itself -- using the Sudbury building as an example -- what the advantages are, what the savings are to the province in dollar terms, in doing it that way as opposed to the lease-back arrangements the minister is talking about. I am saying the minister has to tell us where the savings are. Don’t let him tell us, “Keep the faith, baby; it is a saving to the province.” He has to tell us how much the savings would come to.

If the minister is not aware of all the details of the Sudbury proposition -- and I don’t belittle him for that -- he might tell us of yet another building where his ministry is doing exactly the same thing and where he might be more familiar with the figures.

What we are trying to elicit from the minister, without him telling me to keep the faith, is what the dollars-and-cents savings are to the province to do it via the route that his ministry is going. That is what my colleague is trying to find out, maybe the minister can explain it to us.

Mr. Williams: Mr. Chairman, on a point of order, please.

Mr. Martel: Oh, tell him to sit down, will you? He was just ruled out of order once.

Mr. Deputy Chairman: What is the member’s point of order?

Mr. Williams: The previous Chairman gave a great deal of latitude to the members of the third party to discuss the principles of the bill, matters of leasing versus purchasing and so forth. But it seems to me that what is now being discussed is the financial considerations of a particular project which far exceed the terms of our discussions here this evening. I would ask you to rule whether in fact this discussion is in order. I would suggest it is not.

Interjections.

Mr. Deputy Chairman: Order, please. The member for Sudbury East has asked a question under section 1, which deals with the minister’s power to acquire and lease, and questions on that power are in order.

Mr. Williams: With respect, Mr. Chairman --

Mr. Martel: That’s twice you have been ruled out of order.

Mr. Deputy Chairman: I have ruled --

Mr. Williams: The question asked was how he could justify the expenditure of that particular lease --

Mr. Deputy Chairman: I have ruled the matter is in order. Do you wish to appeal my ruling?

Mr. Martel: Do you want to challenge the ruling?

Ms. Williams: I am simply raising the point that he’s asking a question about the interpretation of the hill.

Mr. Deputy Chairman: You have raised the point and I have ruled on it.

An hon. member: Challenge the Chair.

Mr. Deputy Chairman: Order. The member for Sudbury East has asked a question. Would the minister care to answer the question?

Hon. Mr. Henderson: Mr. Chairman, the minister has responded to the question that it is all competitive bidding.

Mrs. Campbell: Oh, come on.

Hon. Mr. Henderson: From all the information we have, this is the cheapest method. At this time I don’t have another example where we have advertised and worked out the interest. I don’t have that with me tonight.

Mr. Breaugh: Let me give you an example. Hon. Mr. Henderson: But my answer is -- and I have said it three or four times -- it is strictly competitive, on the open market. We had 14 tenders, not only on the construction of the building but on the supply and the money for the building; and I say it is the cheapest method.

Mr. Martel: I might accept that it’s the cheapest method. But show me where.

Mr. Ruston: Figure out the interest on $10 million.

Mr. Martel: I haven’t got my calculator with me. Have you?

Mr. Ruston: Just figure it out; 25 years at 10 per cent and the approximate total is $2.5 million.

Mr. Deputy Chairman: Order. Would you direct your questions to the minister?

Mr. Martel: I am still trying to get from the minister what the savings might be. They don’t have to be precise, but how does be arrive at the fact that there is a saving? The minister says there is; be is probably right --

Mr. Breaugh: No, I wouldn’t go that far. Mr. Martel: What I’m saying to the minister is to prove it to me. I don’t want him to just get up and say, “Well, it is right and that is why we do it.” J am not concerned what the 14 bids came in at; I assume it went the usual route of tendering and so on. Just tell us where the savings to the province are by doing it the one route as opposed to the route that the ministry is not going. We just want to know where the savings are in some specific terms. Surely that isn’t too serious a proposition to put to the minister that he tell us where those savings are?

[10:15]

Hon. Mr. Henderson: Mr. Chairman, once again I believe I have answered the hon. member’s question.

Mr. Eakins: Mr. Chairman, under renovations and repairs does the minister require the contractors to be bonded?

Mr. Germa: Mr. Chairman, can we deal with the lease purchasing before we get to renovations? Can we not complete this one?

Mr. Deputy Chairman: I saw the member for Victoria-Haliburton next; if he wishes to yield on this one he may, but he has the floor.

Mr. Germa: He is going to distract the debate, Mr. Chairman.

Mr. Deputy Chairman: The member for Victoria-Haliburton has the floor.

Mr. Germa: We have to come back to the lease purchasing.

Hon. Mr. Henderson: Mr. Chairman, can I respond to both questions? Firstly, to the member for Victoria-Haliburton, on any contracts under $100,000 we don’t require bonding.

An hon. member: Ten thousand dollars I

Hon. Mr. Henderson: We believe --

Mr. Martel: Under $100,000?

Hon. Mr. Henderson: Yes. We believe that we should let the small contractor in to give him an opportunity to prove himself. Over $100,000 they are bonded.

Now to the hon. member for Sudbury; I have answered your question, I have nothing more to add to it.

Mr. Germa: Can I come at it from another angle, Mr. Chairman? If I take what the minister says, that the best and most economical and cheapest way to erect a public building is through lease purchase, are you saying that for ever more every other building in the province of Ontario is going to be built under a lease purchase?

An hon. member: Yes.

Mr. Germa: Then why, at any other point in time, has the province ever constructed buildings? You can’t have it both ways. If you were doing it the other way before, you were wasting money. You have to admit that, if this is the best way to do it. You can’t go both ways.

Mr. C. Taylor: Sure you can.

Mr. Germa: How can you? How can you go both ways if this is the best and cheapest and most economic? You have to tell me then, Mr. Minister, that for ever more we will never construct our own buildings and all our buildings will therefore, from now on until the end of time, be lease purchase. How do you sit on that one?

Hon. Mr. Henderson: Mr. Chairman, the hon. member has been here for a day or two, and he is well aware that the lease-purchase program has been working effectively for the last three or four years.

Mr. Foulds: Ineffectively.

Hon. Mr. Henderson: I would have to tell him, further, that we do have some buildings that we finance out of current budgets, small projects.

Mr. Breaugh: Yes, Johnny-on-the-Spots.

Hon. Mr. Henderson: We finance them out of current budgets, so they are a straight cash deal. They are not large enough for what we consider lease purchase. We finance them right out of the current budget.

Mr. M. Davidson: On the same line, and I know we discussed this briefly during your estimates, but it is a problem that I still have some concerns about.

Under the lease-purchase agreement that your ministry -- and I know you are relatively new to it so I am not trying to put the onus on yourself, it is something that existed before your time; and I probably understand a little bit that you probably have difficulty yourself in some of these things trying to explain why your government has chosen this path -- but could I ask you this: Under the lease-purchase agreements that are signed by your ministry, is the government in fact -- during the estimates I found out that there was not, in fact, in any of the contracts that were signed, a clause that allowed renegotiation of the price that was paid on a monthly basis.

Some people felt that was beneficial to the government. I would suggest to you that in some cases it is not beneficial to the government, and as you get to that 25-year period, you may in fact want to renegotiate the lease-purchase agreement, because you may find that the buildings are deteriorating to a point that you don’t want to pay the kind of rent that you negotiated 25 years ago.

What I’m trying to find out from you, Mr. Minister, is in that lease-purchase agreement, who is responsible for the maintenance of the building; who in fact looks after the maintenance of the building; and, if I might ask, if it is not the government and the buildings have not been maintained, who pays for the upkeep of those buildings after the 25 years and the state of deterioration in which you may find those buildings at that time?

Hon. Mr. Henderson: Mr. Chairman, it is very easy to answer the last part of that question. At the end of 25 years we are the sole owner.

Mr. M. Davidson: And yon are responsible for the deterioration?

Hon. Mr. Henderson: Definitely; we are the sole owner, so we are responsible, Mr. Chairman.

Mr. Breaugh: I want to pursue this point under section 1(1). Let me be specific: when you were in Oshawa announcing the new Ministry of Revenue building, you said some unusual things that would be applicable under this particular subsection. You said for example that you had chosen an architect. Yet as I recall the discussions in the council chambers that morning, you were rather unclear as to how the architect got chosen. The architect obviously sets the standards under which some unnamed developer would build the building, and then you would go to a lease-purchase arrangement. Would you clarify for us now what are your accepted procedures at this point for choosing an architect?

You certainly didn’t do that by tender. You selected the name of that firm without stating any criteria. You simply said, if I recall correctly, that you had the names of five or six people who had done some business with the government previously and you were prepared to accept their word in terms of the design of the building.

After that point, would you explain to us how you go from -- not tendering but selecting an architect -- are you saying that you will in that instance and in other instances that would be applicable under this bill, then go to tender? Is that your position and is that a public tender? Are you necessarily bound by it? Would you care to elaborate on that?

Hon. Mr. Henderson: I will be very happy to elaborate on it. Firstly, I am sure the hon. member realizes the architects do have a set fee within the union that they belong to. Secondly, within the organization -- you may not call it a union -- but they certainly are. You people really don’t agree with the union -- or do you?

An hon. member: What union is this?

Mr. Breaugh: Normally we do. About an architects’ union, I’m not at all sure.

Hon. Mr. Henderson: I sometimes wonder if you believe in the union or not.

Mr. M. Davidson: They don’t profess to be one.

Hon. Mr. Henderson: Let me go back to the engineering firm in Oshawa. The hon. member will agree that the firm we chose is very knowledgeable of the climatic condition in the area. He’s very knowledgeable of the building --

Mr. Breaugh: They are quite similar to those in most of southern Ontario.

Hon. Mr. Henderson: The architect we chose has had an office in Oshawa. The engineering firm we those --

Mr. Breaugh: Do you want me to tell you how they vote, Lorne?

Hon. Mr. Henderson: Mr. Chairman, I would have hope how they would vote, but maybe the hon. member is more knowledgeable than I am as to how they vote.

Mr. Breaugh: Some deal!

Hon. Mr. Henderson: I must ask them the next time just to make sure.

Mr. M. Davidson: Keep giving them contracts and you can be guaranteed.

Hon. Mr. Henderson: But the hon. member is well aware that both the architect and the engineering firm are large enough in their operation to --

Mr. Breaugh: it is not by tender.

Hon. Mr. Henderson: it is not by tender, no, No, it is not.

Mr. Breaugh: Elaborate how they are chosen then.

Hon. Mr. Henderson: They are chosen by the minister. They were chosen on their ability, for the size of the firm, and their knowledge of the local area. I think if you look at both the engineers --

Mr. Breaugh: Not on their voting record?

Hon. Mr. Henderson: I will be quite honest I don’t know their voting record. I don’t.

Mr. Breaugh: Make a stab in the dark, Lorne, just try.

Hon. Mr. Henderson: I could tell you I would hope I should know but I don’t.

The hon. member for Port Arthur will tell you with respect to the building -- and I presume he’s been talking to engineers and what have you, that the architect who designed the building we are concerned about -- the courthouse -- was not knowledgeable of climatic conditions. He made the panels too distant between the posts -- that was one of his mistakes in that building. Had he been an architect from that area and known the climatic conditions, that problem would not have existed.

Mr. Deputy Chairman: Shall section 1(1) carry?

Mr. Breaugh: Just to pursue this matter for a moment -- we have passed the point where you, as minister, or under this bill your staff would choose the architect.

Hon. Mr. Henderson: Not the staff, the minister.

Mr. Breaugh: Fine, the minister chooses the architect. Now past that point, will you elaborate for us just exactly how the developer who puts together the project will be chosen? I think that’s rather important. As the member for Sudbury has pointed out, there is a rather substantial amount of cash floating around in any government building that will be put up under this proposal.

Will you explain to us precisely how that process is put together? You used the word “tendering” rather loosely. Would you give us some indication as to what the specifics of that tendering process will be? Without question some particular developer, and I would dare say in this instance -- I think I would be prepared to go to the wall on this one -- they are not going to be New Democrats, but some developer is going to make a rather substantial profit on this.

Hon. Mr. Rhodes: You may rest assured. That’s good thinking.

Mr. Breaugh: The Minister of Industry and Tourism is getting a little upset on this.

Hon. Mr. Rhodes: No, I think you are right on.

Mr. Breaugh: There are some developers, you know, who are New Democrats.

Hon. Mr. Rhodes: You are getting those ripoff artists in your party? I can’t believe it.

Mr. Breaugh: I’m not going to read it into the record, they might get a little upset, but there are some. Rut somebody is going to make a rather substantial amount of money on this.

Hon. Mr. Grossman: They will sue you for libel. Say it outside the House.

Mr. Breaugh: I’d like the minister to be rather careful in the way that he outlines -- Would you go and get beer into the ballpark and leave the rest of us alone?

Mr. Deputy Chairman: Order.

Hon. Mr. Grossman: Call them socialists outside the House.

Mr. Deputy Chairman: Order. Order. Could I ask the hon. member to keep his questions to the generalities of the process and not to any particular projects?

Mr. Breaugh: Mr. Chairman, I am really trying to do that. I am being disturbed by small people on the other side.

Hon. Mr. Rhodes: A few big ones too.

Mr. Breaugh: I want to know specifically, will you lay out for us exactly how this will occur under this bill? I think it is important.

There are large amounts of money involved in this, and I think it is important that we have a clear understanding as to how you intend to proceed.

Hon. Mr. Henderson: Mr. Chairman, I have explained that process quite clearly.

Mr. Breaugh: No, you haven’t. Come on.

Hon. Mr. Henderson: As you know, we have appointed the architect, the engineering firms, that will prepare the plans.

Mr. M. Davidson: You agree it wasn’t called by tender?

Hon. Mr. Henderson: The plans will be approved by the user ministry.

Mr M. Davidson: You agree it wasn’t called by tender?

Hon. Mr. Grossman: Listen, you’re going to learn something.

Hon. Mr. Henderson: In the case of the Oshawa building, it is going to be by the Ministry of Revenue. The plans will be approved by that ministry. At that stage, when they are approved, they will be advertised in the local papers and in the provincial papers, sufficient to let anyone interested in building the building and supplying the necessary funds make competitive bids.

Once again, and I go back to the Sudbury building, I think it was 14 tenders. I could be wrong by one or two, but we usually get 12 to 20 tenders for buildings of this nature. In most cases, it’s one contractor that does supply the money, and he sublets out to other contractors. Again I say, it is straight competitive bidding from our point of view. If the low bidder meets all the criteria, he gets the job.

Mr. Nixon: Let’s have an adjournment.

Hon. Mr. Rhodes: It is early.

Mr. Nixon: Let’s adjourn.

Hon. Mr. Rhodes: Ten minutes to go.

On motion by Hon. Mr. Grossman, the committee of the whole House reported two bills with amendments.

THIRD READINGS

The following bills were given third reading on motion:

Bill 28, An Act to amend the Corporations Tax Act, 1972.

Bill 49, An Act to amend the Municipal Act.

Bill 50, An Act to amend the Landlord and Tenant Act.

On motion by Hon. Mr. Grossman, the House adjourned at 10:30 p.m.