Legislative Assembly of Ontario

The House resumed at 8 p.m.

GASOLINE TAX AMENDMENT ACT

Hon. Mr. Maeck moved second reading of Bill 55, An Act to amend the Gasoline Tax Act, 1973.

Mr. Charlton: Mr. Speaker, I rise to speak on Bill 55 much in the same way and from the same point of view as in the speeches by myself and my colleagues on the fuel tax bill on Tuesday.

Mr. Bradley: It is called posturing.

Mr. Charlton: We are going to oppose this bill; we are going to oppose this bill because it is inflationary --

Mr. Bradley: Because it is safe to do so.

Mr. Charlton: -- we are going to oppose this bill because it is regressive. Inflation in the area of gasoline prices over the last decade has been astronomical. We all know that, we have all seen that, we have all felt it in our pocketbooks, and we have all wondered at some of the policies of governments in this country.

Some of the increases in the price of gasoline over the past decade have been totally out of the control of --

Mr. Bradley: The Premier of Saskatchewan.

Mr. Charlton: -- any of the sectors in this country. We have had increases that have resulted from the things that have happened around the world in the oil sector -- the oil boycott in 1972, and the things that OPEC and the Arab countries have done since. It is true that those things have been out of control and have helped to feed inflation of prices in oil and gas.

Some of the increases over the past decade have resulted from games that oil companies have played in this country and the United States. Those increases have resulted from incorrect and misrepresented information on oil reserves, and we even had some cases of oil companies withholding oil and gas in order to force prices up. In some instances those increases were out of our control; in some instances the governments in this country could have taken some action to protect the consumers in this country and none was taken.

Some of the increases in oil and gas prices over the past decade have been as a result of government policy in this country. We have had the kinds of things that Alberta has done, and to some degree we can understand that, although we can’t agree with it in the overall context of the best interests of Canadians. Alberta’s tax policies have contributed significantly to the increases.

We have also had the policies of the federal government in gradually taking the domestic price in Canada for Canadian oil to the world price. All of us in this House to some degree -- the Liberals probably to a lesser degree -- have disagreed with that policy. The government across the way has disagreed with that policy; the Premier (Mr. Davis) has criticized that policy repeatedly and in a fashion that appeared, or was at least meant to appear, to be strong and in the best interests of the consumers of gasoline and oil in Ontario.

But now we have before us a bill much like the one we had on Tuesday which increased the motor vehicle fuel tax. This is a bill that increases the tax on gasoline, an increase in the price of gasoline to consumers in this province that we have some direct control over. There are no excuses this time. There is nobody else to blame. This increase is inflationary. It is inflationary in the energy sector which is already under far too much pressure, has been for a whole decade. Yet, this has been chosen as one of the taxes to be increased.

This bill increases the tax from 4.2 cents per litre to 4.6 cents; a 9.5 per cent increase. Does that sound reasonable coming from a government that has forced, or attempted to force some employees to accept a four per cent increase in salary? Does it sound reasonable from a government that has been talking about restraint for three solid years? Is it reasonable to take a commodity such as gasoline, in a sector so vital to the Ontario economy -- a sector which plays such a major role in all of the things that go on in this province, which involves almost everyone in the province, because in some way almost everyone uses gasoline and pays for it, whether it be directly or indirectly -- to take a commodity such as this and increase the tax by 9.5 per cent at a time when everyone is talking about restraint and cutbacks?

There is the Minister of Revenue (Mr. Maeck), sitting beside the Minister of Health (Mr. Timbrell).

Mr. McClellan: It’s a conspiracy.

Mr. Charlton: The Minister of Health has been under a lot of pressure lately because of things that have been going on in the health-care sector, the restraints and the cutbacks, and the increases he has imposed.

Mr. Nixon: A million dollars for dogs but no money for hospitals.

Mr. Charlton: But the increase we are debating here tonight, in the price of gasoline, is no less important than what is happening in health care.

We have a situation here where this government and the federal government have been urging people to lower their expectations, to lower their demands on the economy; then we impose a 9.5 per cent increase, all in one shot, in a tax which affects everyone. It is easy enough to say that as an individual increase it is not going to amount to very much to any one person in dollars and cents, but as a part of the whole package to come out of this budget, as a part of what is happening to the whole of the economy, it is just adding fuel to the fire of inflation. It is putting us back on the road to double digit inflation, to the position where Tories and Liberals in this country will again start talking about wage controls; and it is not going to be fun for any of us, neither for the government side nor for the consumers of this province.

The average wage increase in this country in the last year has been only 6.5 per cent; but it will not stay that way, people will not keep their demands that low. They will not put up with that if this kind of inflationary trend keeps up. Add the kinds of tax increases, regressive tax increases, we have had in this budget to food costs, housing costs, the cost of fuel and so on, and people are going to start demanding more -- nine, 10, 11, 12 per cent. They are not going to fall very much further behind before they start fighting back.

This government, by the kinds of regressive increases in this budget, and this is one of the worst examples of regressive increase in this budget because it affects virtually everyone in a regressive way, is inviting problems not very far down the road.

As if this nine and a half per cent increase in gasoline tax isn’t bad enough, section 1(2) of the bill increases the tax on aviation fuel -- 100 per cent. The minister has asked us to approve a 100 per cent increase in aviation fuel tax. I don’t know what the minister’s thinking is, what his colleagues in cabinet are thinking, what the Treasurer (Mr. F. S. Miller) is thinking, what the civil servants in the Ministry of Treasury and Economics and Ministry of Revenue are thinking. I don’t know how they would rationalize a 100 per cent increase in anything all in one shot.

Perhaps they consider that flying is a luxury. I would just like to remind the minister and his colleagues on the government side that vacationers are not the only people flying. There are a lot more people in airplanes in this country than just vacationers out on a luxury trip. Today a large part of the commerce that goes on in this country depends on airlines and flying in order that the economy can operate, in order that the businesses that operate in this country can function efficiently. And God knows there are even some politicians and civil servants flying around this province and this country trying to do the business of the people. And we are adding a 100 per cent increase in the tax on aviation fuel.

Mr. Kerrio: What does Jim Snow say about that, Lorne?

Mr. Charlton: Just on the front page of the Globe and Mail: “Charter Flights to UK Rise by $25 for Fuel Surcharge.”

Mr. Kerrio: How can you fight Jim Snow?

Mr. M. N. Davison: Come on, Vince; you will have your chance later on.

Mr. Charlton: I took the time to cut out this article and read it. I suggest to the minister, Mr. Speaker, that he do the same.

“Three major airlines announced a fuel surcharge yesterday on charter class flights across the Atlantic.

“CP Air’s price increase will affect even those travellers who have bought their tickets already.” The same is true for Wardair.

I took the time this afternoon to phone some of these airlines to ask them if the fuel-cost problem they were having was the result of the minister’s proposed tax increase. The answer I got was no. The decision for this surcharge announced yesterday was already made before this government announced its increase in aviation fuel tax.

What that means, Mr. Minister, is that now the airlines are going to have to sit down and turn around and decide how badly this tax increase is going to affect them --

Hon. Mr. Maeck: I will tell you how badly.

Mr. Stong: Ultimately the consumer pays.

Mr. Charlton: -- and up the lump again. It is all adding pressure, it is all adding pressure to a sector of this economy that, although perhaps not quite as vital yet as the sector served by gasoline, is a sector that in our modern society has become very vital to the operation and functioning of our society and our economy. It is not just people that fly; a lot of goods are moved by air today. Mail gets moved by air today -- and God knows the mail service has become expensive enough without this government adding more fuel to that lire as well.

As I have said, perhaps this government thinks flying is a luxury. But I think if there is the thought and rationale behind this kind of tax increase at this time, somebody has missed the mark. Flying in this country is much more vital to our economy than just a luxury for those who take flying vacations.

There are a lot of areas in this province, especially in the north, which are only served by small aircraft. That is the only transportation in and out that they have. And we’re imposing this kind of tax increase.

[8:15]

Like every other tax increase, this tax increase on gasoline and on aviation fuel is not only inflationary, it is also very regressive. As I suggested earlier, gasoline is something used in some way, either directly or indirectly, by everybody in this society; but this increase in the tax on gasoline isn’t going to affect everybody who has to pay it equally, most certainly not. It’s a regressive tax because it in no way reflects people’s ability to pay.

In the usual fashion of this government, we hold the line on progressive income taxes and the government brags about it repeatedly, but some small increases in personal income tax most certainly wouldn’t have affected low-income people and people on fixed incomes in the same way as this gasoline tax is going to affect them. Pensioners in this province, for example, for the most part don’t pay income tax, so a small increase in income tax wouldn’t have affected them at all; but any pensioner who wants to drive his car for a short weekend away from home -- if he’s lucky enough to have a car -- is going to get stuck with this increase, and most likely he can’t afford it. As always with this kind of a tax increase, the lower your income the harder you get hit; even the middle-income people will be hit harder than those at the top.

Mr. M. N. Davison: Tax the poor.

Mr. Charlton: In addition to being inflationary, it’s regressive. It’s not going to add very much benefit to the provincial treasury; it’s not going to solve the fiscal problems of this government in terms of cash flow and deficits. It doesn’t serve any really useful purpose anywhere; it just adds problems, it invites new problems down the road. Eventually, the kind of approach this government and the federal government are taking is going to invite disaster.

We’re going to oppose this bill, Mr. Speaker, because in almost every way you can possibly look at the bill it has a bad effect. In any way you look at the bill it’s difficult to find any really useful, really compelling reason to impose this tax increase at this time.

Mr. Haggerty: Mr. Speaker, I want to address myself to the matter before us, Bill 55, An Act to amend the Gasoline Tax Act, 1973.

We do have some rather strong reservations about this particular tax bill. It’s an increase; the explanatory notes in plain words and to simplify it, mean it is a tax increase.

Mr. M. N. Davison: That won’t stop you from supporting it.

Mr. Haggerty: We on this side, I suppose almost everybody, would take the view that any tax is regressive, even at the municipal level.

I was interested in the comments made by the minister this week relating to the government increase in tax on diesel fuel. The minister stated it was the first provincial increase on gasoline and fuel tax since 1972, and that the new increase would not be burdensome to the consumer.

Any tax increase causes difficulties to the consumer. It seems to me the minister and his government have neglected to consider the continuing price increase of gasoline since 1973 and the increase in the price of diesel fuel since that time. It’s been increased year after year, although it wasn’t a government tax increase it was revenue required by the oil industry in Canada.

I don’t have to remind the minister of the huge profits the oil industry has accumulated since the energy scare of 1972-73 and the almost embargo on oil coming into Canada and the United States. I think in this area it has worked for the benefit of the oil industry.

We can see on the stock market, as it relates to the oil industry, the huge dividends and the profits in that area, without looking at the end products, gasoline and diesel fuel, and the huge profits that are made on those particular commodities. I say to you, Mr. Speaker, the consumer has had that impact of continued increases for the last six or seven years and it certainly had added to the inflationary costs in the province of Ontario.

I was looking back in Hansard at what the Minister of Revenue of 1972 had to say about the gasoline tax increases at that time. The Honourable Allan Grossman, Minister of Revenue at the time, spoke on the amendment to the gasoline tax on April 13, 1972. He had this to say:

“It is essentially, in my view, to be quite honest, a method of raising taxes from those sources which appear to be the best from which to get these taxes.”

Apparently, the new Treasurer has certainly followed this principle. Be that as it may, it is difficult to follow ‘the different ministers’ requirements for funding each administrative body in its yearly program. We look to see what the new member for St. Andrew-St. Patrick (Mr. Grossman) had to say in a press release of April 20, 1979. He stated this:

“Toronto, Ontario. Reports that Canada is suffering a gasoline shortage are false, Ontario Industry and Tourism Minister Larry Grossman said today. Inquiries from American tourists indicate they are concerned a gasoline shortage might disrupt their visit to Canada this year, said Mr. Grossman.

“‘We definitely do not have, nor do we anticipate, a gas shortage in this country; in fact, gasoline is abundant in supply here,’ he added. ‘Travel throughout Canada will be better than ever before for American visitors this summer. The devalued Canadian dollar will be a bonus for the United States tourists. Current exchange rates yield about 15 cents on the American dollar. Exchange facilities are available at all Canadian banks, most businesses and at five Ontario travel centres at United States-Canada border points.’” This is the point I want to raise with the minister, bring to his attention:

“In addition, the province of Ontario has suspended sales tax on accommodation and meals under the American plan to provide even greater savings. I invite the American people to visit Ontario this year to experience the vast and varied sites, sounds and flavours of this province.’”

I don’t know whether he’s talking about the increase in price for liquor and spirits or not, Mr. Grossman said further: “‘Our American friends are important to us in Ontario with our tourism motto: ‘We treat you royally.’”

Now all of a sudden the Treasurer comes into the act and he places a tax on gasoline which certainly is going to discourage some Americans. There is to be $79 million raised by this.

Mr. Eakins: Especially on the 401.

Mr. Haggerty: I say it’s in direct contrast to “We treat you royally” in Ontario.

Mr. T. P. Reid: We tax you royally.

Mr. Haggerty: Yes; we give it to you in one hand, but we’ll take it from the other hand. Rob Peter to pay Paul is the old saying; and I suggest to the minister I don’t think he’s going to be treating them royally with that increase in gasoline tax.

I would like the minister to clarify something here. How much revenue will be generated by the gasoline tax and how much will be raised by the fuel tax?

Last session, the Minister of Consumer and Commercial Relations (Mr. Drea) introduced some amendments to say we were going to move from the present measurements to the metric system. At that time I asked him:

“What additional revenue will this bring into the province of Ontario?” He estimated the conversion to metric would bring in about $3 million.

Last week I had a few moments and I went over to visit my local implement dealer. I was going to buy myself a five-gallon can of hydraulic oil for the tractor. I asked him this year’s price. He said there hadn’t been any increase in the price of hydraulic oil. But he had two cans there, one was a metric measurement can and the other was the old measurement; I’ll tell you, there was quite a difference in the volume of those two containers. I am sure on the conversion job it means higher profits to the oil industry again. The consumer may again be taken in this area. I don’t have to tell you about metric conversion, Mr. Speaker, the consumer has been taken by that and there was no need for it. The minister shakes his head and says no.

Hon. Mr. Maeck: Not this time.

Mr. Haggerty: During the last session I also raised with the Minister of Consumer and Commercial Relations a question related to the matter of unleaded gas. I told him of the difficulties I had personally and that other persons had brought to my attention that they had problems too with the unleaded gas. I don’t know what was the cause of the knock in the engine, but I told him I had to go to a higher octane, or super unleaded gas, at an additional cost; and so had the rest of the consumers. I said there should be some checking into this.

The minister was kind enough to write me a letter January 18, 1979. I will put it on the record: “I refer to your question as recorded on page 6208 of Hansard for December 13, 1978, regarding the pricing of premium unleaded gasoline recently introduced to the market. First I should explain why this fuel appeared.

“In 1974, when it became apparent that fuel without lead was essential for catalytic mufflers, the cost of such fuel was discussed by the petroleum industry with the automobile manufacturers. It was stressed that the need to add other constituents to try to replace the deleted lead, and the need for additional costly refining processes would mean a more expensive fuel. It was also stressed that there would be a crude oil penalty of four to six per cent to produce a gallon of unleaded gasoline compared with a gallon of leaded fuel.

“In light of these facts, an agreement was reached with the auto industry to produce automobiles capable of efficient operation on gasoline with octane ratings in the order of 87. This minimum rating was then set as the national standard for regular unleaded gasoline.

“The agreement was breached by the auto manufacturers and new cars began to be produced which need fuels with octane ratings well in excess of that figure. It became necessary for the oil companies to introduce a premium unleaded gasoline with a minimum rating of 90, an additional requirement of five per cent more crude is needed to produce one gallon than to produce one gallon of regular unleaded.

“In addition, octane requirements continued to increase so that the motorists’ demands are being met by marketing regular unleaded ratings of 80 to 90 and premium unleaded ratings of 90 to 93 on average.”

I hope the minister listens to this last paragraph:

“The differentials on pricing are, I am sure you will agree, not unreasonable. The question that does remain unanswered, however, is why do we need this expensive energy wasteful fuel in Canada? The emission limits can be met without the need for catalytic mufflers and hence there is no need for unleaded gasoline.

“My ministry has queried the federal government but has not yet received the courtesy of a reply. We shall try again.

“Yours very truly, Frank Drea, Minister.”

He tells me in that letter there was no need for this expensive gas on the market. It was an agreement between the manufacturers of automobiles and the oil industry.

If perhaps we can go back and have that five cents or 10 cents or 15 cents knocked off a gallon of gas, I think every consumer in Ontario would be happy. Those are pretty strong statements to put into a letter.

I have all the confidence in the Minister of Consumer and Commercial Relations. If there was ever a minister over there who was concerned about consumer needs and consumer protection, he is the minister. He is doing a great job.

[8:30]

I suggest the minister should be looking in this area. As I said, we have strong reservations about this particular bill. In this particular instance, I think the consumer has been taken again.

If the taxes generated by this increase were used for more research in fuel in Ontario, we might take a different view. When we look at the other things that were mentioned in the budget, perhaps there may be a good project or a good scheme there, such as the small business development corporations proposed. The Treasurer is talking about funds to help small industry to become established in the province of Ontario.

As my colleague from Niagara Falls will bear out, from the studies and testimony before the Ontario Hydro committee we found that within a 10-year period we are going to have to use methanol to assist in automobile operations in Ontario. I suggest to the minister that we should be applying the additional revenue that’s going to be generated from this tax to research in other areas of energy that we’ll perhaps use for ways and methods of travelling in the next 10 years. I suggest there’s revenue here that we could use for building a methanol plant in Ontario to assist the conservation of energy.

We on this side are concerned about the conservation of energy. With a methanol plant in the province of Ontario, there are many areas of waste we can use to capture some benefit. Additional farm products could be used for methanol, and garbage could be used. There’s a vast area here for research. On this side of the House, we will support the bill in the sense of saying that the government should provide some research measures so that we’re going to have some benefits from the tax increase.

Over the years, we’ve had tax increases on gasoline and we have actually gained no benefits whatsoever in research. This is an area here in research and development that will create jobs in the province of Ontario. I suggest to the minister that he should be looking in this particular area.

Mr. Samis: Mr. Speaker, I’d like to make a few brief comments on this latest tax increase presented to the good people of Ontario by the minister.

I believe his gift this year amounts to 9.5 per cent. The poor motorist must be really staggering. If I’m not mistaken we had a price increase in January of this year. We can expect another price increase in the cost of gasoline after the federal election, especially if “Bill Who” gets in. Then, the headline on the front page of the Financial Post says:

“OPEC Jolt May Blow Ottawa Lid in Oil Prices.” I will quote very briefly from the lead paragraph.

Mr. Nixon: That’s the NDP propaganda organization.

Mr. Samis: That’s right. “The possibility of yet another world oil price increase in June is growing, even before the dust has settled on increases up to 31 per cent in the first quarter. Already there is a dramatic change from the phased 14.5 per cent, projected for all of 1979 only four months ago.” It refers to the Sheik Yamani talking about further increases beyond that one.

With the projected increase from Alberta, and the projected OPEC increase, and now the threat of an even higher increase from OPEC, we have this gift of a 9.5 per cent increase to the consumers of Ontario. I really wonder how the poor consumer must feel. Here he is in the middle of a federal election campaign. He sees his OHIP in the past 12 months go up 18 per cent in one shot, while I believe the latest increase works out to about five per cent per year. On one hand, his OHIP goes up about 29 per cent in the space of 12 months, and on the other hand he sees this government give away $100 million to the pulp and paper companies. He sees his tobacco prices go up again this year and yet he sees the government give $70 million to Inco. He sees the price of alcohol, spirits, beer, et cetera go up and yet he sees this government give away $28 million to poor Henry Ford.

He sees a new tax introduced, the cablevision tax, and yet he sees the minister announcing a $200 million slush fund for manufacturers to feed off at the trough. He hears on the radio this evening that the price of bread is going up again and yet he sees this government giving a further exemption to estates of a value of over $300,000. He hears there is going to be another increase in the price of milk, yet he remembers this is the same government which, courtesy of Lord Darcy in the last budget, gave a tax credit of approximately $115 million on industrial machinery manufacturers.

No wonder the poor taxpayer in this province is bewildered and confused. He knows the cost of living is going up. He knows this increase is going to drive it up even further. He knows, in terms of equity, this is not the fairest way of raising taxes, and now he knows the oil companies are again making record profits. He knows, come July, he is going to pay more again for his gasoline in the province of Ontario. Yet the Premier (Mr. Davis) tells him: “Don’t worry, we are standing up for you. We are doing the best we can to keep oil prices down to a reasonable level in the province of Ontario.” We all acknowledge a car is not a luxury any more; it is a necessity, especially outside of Metropolitan Toronto.

I believe my colleague from Erie referred to the fact this is going to have a considerable impact on our friends from the United States who are coming up here. One of the arguments they are now using is it is too expensive to come to Canada. As you get on the 401, you see those nice little signs 99 cents, 97 cents; and no signs which mean over a dollar, as you go into northern Ontario. That is going to go even higher this year, and obviously that will affect the small entrepreneur.

We are telling the taxpayer on one hand:

“Stop expecting so much from government. Stop expecting so much from your employer. Just reduce your expectations; things are tight now.” Yet what are we doing to him? We raise the cost of his gasoline, the cost of his OHIP, the cost of his wine, the cost of his beer, the cost of his tobacco, the cost of his cablevision; and the price of bread and milk are going up.

I wonder why, instead of always resorting to the sales tax, the minister wouldn’t give greater consideration, if we are going to hit the gasoline or automotive field, to graduating it in some way. Why not apply a special tax based on the size of the engine or the weight of the car at time of purchase; so those gas gobblers, the energy wasters, pay a full premium for having that right or that privilege in our society? If we are going to have a tax based on gasoline, why not graduate it according to the size of the car? Those which are the least economical should pay the highest tax; those ears which are the most economical, the most efficient in terms of energy, should pay the least tax. We don’t follow that approach, we just apply this general sales tax. The size of the car doesn’t matter, we all pay the same.

In view of the rising prices, in view of the giveaways in the budget, in view of the fact the government is hitting the little man again, it is no wonder in Ontario, as well as all across Canada, the electorate is getting so cynical about government and politicians in general.

Mr. Nixon: Mr. Speaker, the government House leader is murmuring something about me already speaking on this. Actually, in the old well-organized days from the government’s side, we used to deal with these hills in batches, as I recall, and when we were dealing with motor vehicle fuel tax and gasoline tax, we expressed our views on a more integrated basis. Under the new regime, it is done in a very time-consuming and wasteful way, and it is necessary to repeat the views on more than one occasion.

I am very glad to have the opportunity to say to the honourable Minister of Revenue once again, that he should not think for a moment that with the new Treasurer (Mr. F. S. Miller) his position is the same as it was with the old Treasurer. He now has, I think, a special responsibility to have an independent view. The new Treasurer is inexperienced, and in this instance I have a feeling he is completely out of touch with the policies of the Conservative Party.

We have heard repeatedly in the House the attacks made by the Premier (Mr. Davis) and other members of the government on the escalating prices of gasoline and -- what a nefarious plot this is on behalf of the government of Canada and the party which has the responsibility for that government, both now and in the foreseeable future, and how serious it is that the price of gasoline continues to escalate.

We have repeatedly pointed out to the Premier that if he is concerned about the price of gasoline, he can reduce the gasoline tax, which really should be at the present time at 19 cents a gallon, but unfortunately by the procedures we have, the government is now collecting about 21% cents a gallon, illegal though that may be.

I feel if there is any consistency to government policy, this tax should not be proceeded with. However, if the government, in its bad judgement, intends to proceed, we do feel that however ill advised it is, it is not the sort of thing that necessitates going to the people for their final decision. There are, of course, matters of high principle that would necessitate it, but unlike the NDP we are not prepared to go to the people with this or the other small changes in the budgetary policy of the government that have been announced by the Treasurer and must be enforced by the innocent Minister of Revenue.

Mr. McClellan: He’s not so innocent.

Mr. Nixon: In case the minister missed my comment before, I did point out to him how unfair and wasteful the procedure for collecting the gasoline taxes from the farmers happens to be.

I am delighted that the Minister of Agriculture and Food (Mr. W. Newman) is joining us; because I have a feeling that within that cranium there is a speech tonight, and we might even hear it. I really feel that the policies of this government have oppressed the farmers to a point where it is shameful.

Hon. W. Newman: Look at your friends in Ottawa. They are charging tax on fuel; don’t give us that nonsense. Just because you pay tax on fuel don’t blame us.

Mr. Nixon: If it were not for Eugene Whelan the farmers would be in trouble.

Mr. Kerrio: The ghost of Bill Stewart would be better than what we’ve got.

Mr. Deputy Speaker: Order.

Mr. Nixon: I know, Mr. Speaker, that you are aware that other somewhat more enlightened Conservative governments, and as you are often made aware there are no Liberal provincial governments -- although that is going to change; it is always darkest just before the dawn and the Liberal ascendancy is going to begin in this province. I would say before 1979 is out we will have a return of Liberal policy in this province, and that is much to be looked forward to.

But there are other Conservative governments which do not needlessly oppress the farmers. They do not extract from the farmers this 21 cents a gallon, even though the farmers are using the gasoline only to till the soil and grow the food for the hungry citizens of this province, and in fact the world. The money goes into the consolidated revenue fund and the Treasurer has the utilization of that money, without any interest payable, for months, in fact years, before any rebate goes back to the farmers under these circumstances.

Hon. W. Newman: You can fill yours in every month if you want to; you can do it every month.

Mr. Nixon: This is a circumstance, Mr. Speaker that certainly must concern you, representing a rural area, as it concerns me. I would hope the Minister of Revenue, in his new position where he can express an individual view and take some aggressive initiative himself, would move to correct a situation which is long past the time when it should be corrected for the benefit of my farmer constituents and those of many other members of this House.

There has been some argument made by the government that their revenues from licensing and gasoline tax do not come near to meeting the cost of the roads. Even with the roads which in the past we have been proud of, there are many people in the province who are expressing dissatisfaction, to me at least, with the level of maintenance and the rate at which the roads are being improved in this province. I do not want to repeat the arguments that have been made in the estimates of the Ministry of Transportation and Communications about the improvements that are required, hut the argument that we are already spending more on highway maintenance and building than we are getting from gasoline and motor vehicle fuel tax and licences certainly is inappropriate. It is the responsibility of the government, and it has been one of the main responsibilities, to provide an outstanding level of highway transportation.

[8:45]

One need only go back to the record of the former administration of the United Farmers of Ontario to know that at that time the high level of road-building which really led the world, far ahead of the interstate network in the United States, was begun here, under the leadership of former Premier Mitchell F. Hepburn. Even the Queen Elizabeth Way was recognized at that time as one of the most advanced roads in the world.

Certainly, this government has not shown the kind of leadership in recent years that we would expect in this province. When Leslie Frost was Premier, or Prime Minister as he liked to be called, in those days when the Minister of Health (Mr. Timbrell) was learning his political lessons at the knee of that former Prime Minister, there was an approach to the provision of services more commensurate with the amount of money that was being gathered into the consolidated revenue fund for the benefit of the roads system.

The argument that you are not balancing this any more seems to be irrelevant, in view of the inadequacies of the road-building and road maintenance program. I see the Minister of Revenue is holding his hands palm upwards in the standard position of the Minister of Revenue, “Don’t ask me, I have no responsibility.”

Hon. Mr. Maeck: I didn’t say that. You have so many good ideas, tell me where you get the money.

Mr. Nixon: He didn’t say it, but he was making the classic gestures that Ministers of Revenue have been making for years; as if they didn’t have a word to say about government policy. I simply bring to his attention again that we are very proud of what he has been able to do in his short tenure; that in many respects his views are more influential in this House than the views of the Treasurer himself. I would hope that he would move towards influencing the policy of his colleagues, towards the utilization of these revenues in a more progressive, if not conservative, manner.

Mr. M. N. Davison: I just wanted to make a few temperate and sober observations and comments, if I might, on Bill 55.

On the aviation fuel tax increases of 100 per cent, that is quite a figure the minister has there. I have to hark back to the debate we had earlier today when we were talking about a crisis of 21.7 per cent. I tell you that the consumers of this province are lucky you are not running a chain of food stores or they would really be in trouble.

The critical tax in my riding is the 9.5 per cent increase in the gasoline tax, from 4.2 cents to 4.6 cents per litre, which is a substantial chunk of the 21.1 cents a litre that is paid in my riding by my constituents who drive their cars. Even in Hamilton Centre an automobile is a necessity these days.

The tax is inflationary, as is any tax which exceeds the wage increases that the workers and pensioners in my riding are getting. When the workers of Hamilton Centre have to keep their wage demands down to something in the neighbourhood of six or 6.5 per cent, it hurts when you add a 9.5 per cent increase to the already fairly high tax you have on gasoline.

I am waiting for the minister, when he makes his remarks, to tell us this is Tory government policy and Tory government direction addressing the problem of public transit, and that this is the way they are going to increase ridership on public transit and encourage public transit. If so, it would be about the only policy they have over there to accomplish that worthwhile goal.

What really concerns me is that this fits in with a growing trend in Ontario that we have seen over the past few years, which is the kind of inflation and price increases in what I would call basic necessities of life in Ontario in the 1970s; basic necessities such as health care, housing, energy and food. All along, from sector to sector -- and tonight we’re talking about energy -- the government’s policy is to do absolutely nothing to protect consumers from price-based increase ripoffs in these basic necessities.

Not only does the minister not protect the consumer from price increases, but this is one of the few taxes he has that isn’t based on a percentage of the commodity. I’m surprised he didn’t do that when he brought in the new hill so he wouldn’t have to come back to the Legislature periodically with a bill to increase the take from a gallon of gasoline. He would just get himself a percentage and that way he could reap a windfall revenue gain every time there was a boost in the price of fuel. That’s the only thing I can congratulate the minister on in this bill, that he didn’t take the ultimate step and go in that direction.

The government seems to be in a consumer-bashing mood as of late. I would make one suggestion to the Minister of Revenue in this debate. If he wants to go after a group of consumers he shouldn’t go after the group of consumers that spends almost all, if not all, their disposable income on the basic necessities of life -- on food, on energy, on health, on housing. If he wants some support from this side of the House, from this party, in going after a group of consumers, I would suggest the group he picks on is the group of consumers who have enough money to blow on things like Gucci shoes and yachts and diamond rings and limousines and caviar. If he’s going to bash consumers, he should pick on those people for a change and leave alone those who have to spend so much of their money on basic necessities.

Mr. Kerrio: Wait until he hears about those Gucci shoes.

Mr. Riddell: Mr. Speaker, I rise to support this bill with a great deal of reluctance. If I thought people were in any way amenable to having an election on this issue --

Mr. Laughren: Don’t be so mealy-mouthed.

Mr. Riddell: -- I would be inclined to vote against the government.

But it’s obvious that people wouldn’t want an election on this issue.

It’s equally obvious that this government, for 35 years now, has leaned on the federal government to help it out of its difficulties.

Hon. W. Newman: Oh come on now.

Mr. Riddell: I sometimes wonder what’s going to happen if by some stretch of the imagination the Tories might happen to form the next federal government; but I don’t think that will happen.

Interjection.

Mr. Riddell: Well, my good friend, you wouldn’t have the federal Liberals to blame; so what would you do?

Mr. Deputy Speaker: And now back to Bill 55.

Mr. Riddell: I say these people have really leaned on the federal government but it reduced the federal excise tax on gasoline by three cents a gallon.

Hon. W. Newman: But they still charge the farmers for it; give it back.

Mr. Deputy Speaker: Order; the member for Huron-Middlesex has the floor.

Mr. Riddell: After the next election, we’ll look after the farmers on this side.

In 1978, the federal government reduced the federal excise tax on gasoline, and the Ontario government takes back almost two cents a gallon in April of this year. The paradox is that the Ontario government has attacked the federal government’s handling of the oil situation, claiming that too much of the increases are being taken up in a variety of government taxes, including taxes imposed by producing provinces and taxes at the federal government level.

The latest provincial government action adds to the spiralling costs of gasoline, estimated to increase by 25 cents to 30 cents a gallon from early 1978 to the end of 1979. Add to that increases of 30 per cent to 100 per cent on licence plate fees put into effect last year.

In order to put the current gas tax increase in perspective, I must relate to the very sophisticated and complex motor vehicle tax study undertaken in 1974 by Price Waterhouse and Company. The study showed that between 1967 and 1974, taxes collected from the motor vehicle owners and operators in Ontario increased 86 per cent, from $335 million a year to $724.4 million a year. The consultants, using a straight-line projection and assuming that the same rate of taxes would be in effect, reported that by 1979-80 government revenue would increase to over $1.1 billion.

What has happened in the interval? In the 1977 licence year, the provincial government raised licence plate fees from a low of 30 per cent to as much as 100 per cent. On April 10, the government announced the increase in gasoline tax of four cents per litre, estimated conservatively to be 1.8 cents a gallon. The provincial government Bill 158, introduced in the latter part of 1978, changed the Gasoline Tax Act of 1973 to the metric scale, and I believe my colleague from Erie elaborated somewhat on this. As a result, by applying a 4.2 cent per litre gas tax, the 19 cents a gallon tax went to 19.1 cents a gallon. This means that the new increase will bring the tax to 21 cents a gallon. Therefore, it appears that the straight-line projection of provincial government taxes of $1.1 billion on the motor vehicle owners and operators by 1979-80 will be far short of the real taxes being borne by motor vehicle owners and operators.

It never ceases to amaze me that government officials fail to address the real issue -- direct expenditures on behalf of motorists. Unfortunately published government reports of revenues and expenditures, of the Ministry of Transportation and Communications are net accounts and fail to reveal that that ministry is charged with very heavy capital grants and operating subsidies to municipal transit systems. Research and subsidies for experimental mass transit systems, the Ontario/GO Transit public transportation system, the provincial air services, the Ontario Telephone Service Commission and the Ontario seasonal employment program are all charged as direct taxes on the motorist.

These non-road expenditures have increased rapidly in the last few years. It has been long held that the motorists should pay 65 to 75 per cent for the construction and the maintenance of roads and highways, with the balance being considered essential needs of society at large and borne by general revenue.

What is the result of all this? It appears that the government is, in fact, continuing to look on the motor vehicle owner-operator as a revenue-producing source. They fail to recognize that 85 per cent of the households in Ontario have at least one motor vehicle and that motor vehicles are no longer a luxury but a very important and necessary part of modern society. This allows inequities to be carried forward without a great deal of pressure or reaction from most of the elected officials, particularly on that side.

[9:00]

Another good example is the fact that the federal excise tax, reduced from 10 cents to seven cents in August 1978, is applied only to the private motorist, with the private motorist being expected to carry the burden of equalizing the differential between domestic oil prices and foreign oil prices for our eastern provinces. This means the private motorist is paying into this fund for the federal government in excess of $400 million a year. If this tax were applied to all gasoline users, the tax could be reduced three cents a gallon for the private motorists.

These are complex issues, and perhaps it is for this reason the average motorist does not react more strongly. The only way in which unfair taxation policies can be averted is for motorists to act much more forcibly on an individual basis, advising their elected officials that they will no longer tolerate these anomalous, inequitable taxes.

In summary, I want to say that the additional $57 million to $60 million the provincial government will collect through the increase in the gasoline tax announced in April of this year is inequitable and unrelated to the growing revenues the government has collected from motorists over the past decade. I further believe the time is long overdue for the government to realign its taxation policies so as to apply a more realistic version of the user-pay principle and only apply direct taxes to motorists which are related to their fair share of government expenditures for roads and highways.

Mr. Germa: I have just a few words on Bill 5, the bill to raise the gasoline tax. As usual, my part of the country, northern Ontario, seems to take the brunt of the attack when the government is going out to raise revenues. Northern Ontario is a unique part of the province. That has been said many times before, but it bears repeating. We have a very different problem to overcome in that part of the province due to the geography, the sparsity of population and the mileages that separate one community from another.

Mr. Laughren: The Minister of Revenue doesn’t care.

Mr. Germa: The Minister of Revenue doesn’t have to put up with that. Most of this cabinet is not aware of the inequities that exist. By increasing the tax on gasoline, the effect is multiplied by the time it is applied to the northern part of the province because of our consumption, not only on account of the mileage, but because of the temperature. The weather involved causes low gasoline mileage in private automobiles.

I am sure members can understand when it is 40 below zero in northern Ontario, an automobile just doesn’t move as easily as it does in the southern part of the province. Consequently fuel consumption is a way up compared to what people have to put up with in the southern part of the province.

Almost daily, as I drive around northern Ontario, I see prices of 22.9 cents per litre. Translated into gallons and dollars, that is $1.041 a gallon. It is very easy to look at 22 cents a litre, a lot of people don’t panic at 22 cents; but when translated into the price per gallon, it is something phenomenal. We are paying over a dollar a gallon in most of northern Ontario for gasoline.

For the government of Ontario to add another nine per cent on to that cost is just unacceptable. I thought 19 cents a gallon was plenty for the kind of services we get up there. Just driving down this last weekend, on looking at the condition of the roads, I found there are more bump signs than anything else. The government of Ontario puts all its money into printing bump signs instead of fixing bumps.

Mr. Laughren: There are more bump signs than speed limit signs.

Mr. Germa: That has to be taken into consideration. The minister might come back and say, “Well, you only paid $10 to register your vehicle.” That doesn’t ameliorate the excessive costs that are attached to transportation in Northern Ontario.

The price of energy in Ontario has gone up at an annual rate of 15 per cent over the past six years. That is also inflationary. I tie that to the government’s program to diversify the economy of the north; they’re talking a lot about tourism. I don’t necessarily agree with their thrust to turn northern Ontario into a hotdog stand, but if they are going to do that, they must not increase the cost of getting there. If they want to make us a hotdog stand, let them at least get the people up there so we can sell hotdogs to them, but let them not make it more difficult for us. It’s difficult enough to get up to northern Ontario and here they are adding to the burden of costs of getting there.

So, Mr. Speaker, the increase in taxation of aviation fuel is also going to militate against the ease of transportation in the northern part of the province. The government has been putting in many remote airports where all of the foodstuffs, all of the energy requirements, have to come in by air. It has raised the price of gasoline to over $2 a gallon in those remote spots and by adding more tax to the gasoline plus tax on aviation fuel, it is just going to aggravate the situation even further.

So while this is imposing a burden on a lot of people in the province, the burden is magnified and multiplied for those people in the northern part of the province.

Mr. Laughren: I rise in opposition to this bill.

Hon. Mr. Maeck: Oh, I thought you were going to support it.

Mr. Laughren: No, I oppose this bill. As a matter of fact, what’s really incredible is that the Minister of Revenue, who used to be such a strong sympathizer with the problems of the north, brings in these bills without a blush. The flimflam man from Muskoka says, “Here it is, Lorne, rush it through. Ram her through.” The Minister of Revenue does indeed do just that.

What bothers us so much is that there’s no relationship between their taxation of fuel and conservation policy. None at all. They just look down the list of possible taxes in the province after the member for Muskoka has given them the total figure and they say, “Well, let me see, we can get so much here, and so much here.”

The minister shakes his head, but perhaps he could explain to me, when he makes his closing remarks, what the justification is, if not revenue, for adding this tax on gasoline? If not for revenue, for what purpose? I suspect that his answer will be that, “Yes, you’re right. It is indeed a tax grab, not based on any kind of policy at all.”

That’s what’s bothering us about the whole budget of the member for Muskoka. When you look down at all the tax increases, they are simply tax grabs. They are not part of any overall policy; they couldn’t be.

We are going to be debating later tonight, I suspect -- I hope -- a tax on land transfers.

That’s got nothing to do with housing policy. Whether the tax is going up or down, there should be some kind of relationship to a policy, but none of these taxes are.

OHIP is another example. There’s no relationship between the health policy of this government and the level of OHIP premiums, or what they do with OHIP premiums.

Mr. Deputy Speaker: There’s nothing in this bill about OHIP.

Mr. Laughren: Getting back to the gasoline tax, Mr. Speaker, which I know you want me to do, the Minister of Revenue simply must justify to us why he increases the tax on gasoline if not simply for revenue. Is there any other reason -- any other reason -- for raising the tax?

Also, was any consideration given to the particular problems of northern Ontario, which my colleague from Sudbury expressed so well? I don’t know how the minister’s colleagues from northern Ontario tolerate him with these kind of tax grabs. It must make life very difficult for them.

The member for Sault Ste. Marie (Mr. Ramsay), I’m sure he is sitting there saying to the minister: “I don’t want to be a one-tripper. Don’t make me a one-tripper, Lorne.” We can hear him saying it now.

Mr. Warner: He’s going to vote against the bill.

Hon. Mr. Maeck: Cheapest gas in the province in Sault Ste. Marie. Don’t tell me that.

Ms. Laughren: He will be long gone after the next election and the minister will be partly to blame. The minister will be partly to blame because he didn’t stand up for consumers of gasoline in northern Ontario; the minister will be to blame.

That’s right; and the member for Sault Ste. Marie is going to go back to his friends and his family in Sault Ste. Marie after the next election and he is going to say: “You know I really tried, but that guy from Parry Sound did me in.” That’s exactly what’s going to happen; and the minister did it by increasing the gasoline tax.

Well, Mr. Speaker, it’s a sad --

Hon. W. Newman: The guy from Parry Sound will do you in first probably.

Mr. Laughren: Steady now, steady. As a matter of fact it’s the policies that this minister shepherds, if I might use that expression, shepherds through this Legislature, it’s the minister’s policies that are the reasons New Democrats are so strong in northern Ontario and why we are getting stronger by the day. Every time this ministry brings in a new budget, the stock of northern Ontario New Democrats goes up.

Hon. Mr. Maeck: That’s not what happened in the last election; you didn’t get stronger up there.

Ms. Laughren: That was before this Treasurer got his hands on the taxes of the people of Ontario; the minister might just take a poll in northern Ontario and find out how Conservative candidates are doing in the north in the federal election.

Mr. McClellan: Not too well.

Ms. Laughren: They are nowhere. And does the minister know what they are saying on the doorstep? He knows how people out there don’t always make a clear distinction between federal and provincial politics. I was out knocking door to door last week and they said to me: “Ah well, I have always been a Conservative, but I am not voting Conservative in this election, not after they raised the gasoline taxes like that.” I said to them: “Now just a minute, that’s provincial.” He said, “It doesn’t matter. They are all Conservatives.” So the minister sees what he is doing to his friends in Ottawa.

Mr. Breaugh: Joe and the argonauts.

Mr. Laughren: He is hitching his rowboat to the Titanic, that’s what he is doing.

Mr. Speaker, these taxes are inflationary.

Ms. Nixon: The only difference between the NDP and the Titanic is that the Titanic had an orchestra.

Ms. Laughren: We would have rearranged it upstairs too.

Mr. Speaker, my colleagues have spoken in a very articulate fashion on this bill. I believe it’s the kind of bill that we will continue to oppose in this chamber. If someone doesn’t stand up against these regressive tax grabs on the part of the government -- nobody will; and that’s why we are doing it and that’s why we will continue to do it. We simply refuse to take the position of the Liberal Party, the Liberal Party that says, “It’s not convenient for us to oppose the government bills at this time.”

We say that’s not the position that we intend to take, because this government has a Minister of Consumer and Commercial Relations (Mr. Drea) who is not protecting the consumers in the province of Ontario.

Mr. Warner: The minister of corporate protection.

Ms. Laughren: I saw him stand: up this afternoon when my colleague from Hamilton had his bill on the food prices, and there they all stood up in opposition, just as they all will support --

Hon. W. Newman: And you were grandstanding.

Mr. Nixon: That was a terrible thing, that you blocked that.

Hon. W. Newman: And so were you; grandstanding all afternoon.

Mr. Laughren: Mr. Speaker, this is not a tax that has anything to do with conservation. It is not a tax that is progressive in any sense of the word. It is a tax that discriminates against people in northern Ontario, and we have no hesitancy whatsoever in opposing it.

Hon. Ms. Maeck: Mr. Speaker, I want members to pay very close attention to what I have to say tonight for a change, no interjections.

Ms. Laughren: Apologize to the member for Sault Ste. Marie.

Mr. Breaugh: Apologize to all of northern Ontario.

Hon. Ms. Maeck: No, I am afraid not. I have no apologies to make for this bill or any other bill that we have brought in on this budget.

[9:15]

Mr. Nixon: I guess not.

Hon. Mr. Maeck: I have to say again that this is part of a package. Whether the member for Nickel Belt believes it or not, there is a fiscal policy involved in this budget and this happens to be part of it. The fiscal policy is that we expect to have a balanced budget by 1984 and the fiscal policy is also that we must collect the money we are going to spend; otherwise, we are going to run a deficit. So we need to find money.

Mr. Nixon: But you like deficits.

Hon. Mr. Maeck: The member for Hamilton Mountain, and all the NDP members, have indicated they feel it is an inflationary and regressive tax. But I must remind all members the cost of highways and roads certainly has gone up over the last seven years and that is how long it is since we have raised the gasoline tax.

An hon. member: That is because you have been fuelling inflation.

Hon. Mr. Maeck: At the present moment in my own riding a secondary highway used to cost $100,000 a mile to construct -- that was in 1971 when I was first elected; it now costs $200,000. So somewhere the dollars have to be found.

We heard a lot about the 9.5 per cent increase, but that is over a seven-year period, not over one. If one takes the seven years into account it is less than 1.5 per cent per year for seven years.

Mr. Nixon: What is that per month?

Hon. Mr. Maeck: So I don’t know how you arrive at a 9.5 per cent figure.

Mr. McClellan: Better research.

Hon. Mr. Maeck: I think if you are going to be realistic you take it over the period since the last raise and that was in 1972.

Mr. M. Davidson: He used to work for you guys. You used to pay his wages.

Hon. Mr. Maeck: Yes, I suspect that was the case.

The member for Hamilton Mountain also talked about the aviation fuel and the 100 per cent increase and so on, but he forgot to mention, as did the other members who spoke about aviation fuel, that we have taken the sales tax off the purchase price of commercial aircraft which will more or less compensate --

Mr. Breaugh: So many people benefit from that.

Hon. Mr. Maeck: -- for the increase they are going to pay in sales tax. If those members are going to talk about a subject why don’t they talk about all of it, not just part of it? Give us a little credit on the other end once in a while.

Much has been said by all members about the fact we have complained and the Premier has complained about fuel prices going up, and so on. But we cannot vacate our taxing field because the federal government decides any time it wishes to raise the price of fuel at the wellhead.

Mr. Nixon: It is Alberta that is doing it.

Hon. Mr. Maeck: it is not just Alberta, it is done in agreement between the two jurisdictions.

An hon. member: It’s Lougheed that’s a part of the problem.

Mr. Nixon: Do you know what he calls us?

Hon. Mr. Maeck: I don’t know; tell me.

Mr. Nixon: It is unparliamentary.

Mr. Kerrio: Your friends in Alberta are the cause.

Mr. Speaker: Your interjections are similarly unparliamentary.

Hon. Mr. Maeck: The member for Erie mentioned this could discourage Americans from coming over here and hurt the tourist business and so on, but I would advise him and other members that it is not very long ago -- I think about three or four weeks ago -- the member for Windsor-Walkerville (Mr. B. Newman) sent me over a nice little article from the Windsor paper. It indicated that Americans were driving across to Ontario at the present time to fill up their gas tanks. I just don’t see how that is going to have any --

Mr. Laughren: You will put an end to that.

Hon. Mr. Maeck: It is cheaper.

Mr. M. Davidson: There was a price war in Windsor though.

Mr. Eakins: Was that on the 401?

Hon. Mr. Maeck: No, I said in Windsor. So the member for Windsor-Walkerville was good enough to send me the article which indicated Americans are coming over to Windsor to buy gasoline because it is cheaper.

The member for Erie also talked about some funding for research and so on. As I indicated in one of the earlier debates, the tax that is collected goes to the general revenue fund and any of those types of programs would certainly not come under the Ministry of Revenue, but perhaps the Ministry of Energy.

Mr. Bolan: Is the honourable minister going to fix highway 520 with it?

Hon. Mr. Maeck: I would say to the member for Nipissing what I am going to do is see the district of Nipissing becomes part of southern Ontario.

Mr. Laughren: How are you going to fit Parry Sound in there?

Hon. Mr. Maeck: The member for Cornwall had some concerns about the confusion of the tax policy. I think I covered some of that earlier, but it boils down, as I said, to the fact we must collect the dollars somewhere. The people over there are demanding programs from time to time. Somebody has to pay for them.

Mr. Nixon: You gave $1 million to a dog hospital today.

Hon. Mr. Maeck: I did not give anything to a dog hospital.

Mr. Nixon: The government did. Are you not part of the administration?

Hon. Mr. Maeck: That was from the Provincial lottery, not from the taxpayers’ dollars.

Mr. Kerrio: It is not Monopoly money, it is the real stuff.

Mr. Gregory: We heard you were going to the dogs, that is why we wanted to give it a buck.

Hon. Mr. Maeck: Everybody is quiet, I can speak again.

Mr. Grande: Speak up.

Hon. Mr. Maeck: Twice now, I have mentioned the fact the farmers are not getting a fair shake.

Mr. M. N. Davison: Can we quote you on that?

Hon. Mr. Maeck: I have taken the time to make a few inquiries of my staff. The member for Brant-Oxford-Norfolk said they wait months and even years for their tax rebates. I have to inform him they are processed in four days from the time we receive them until they go back out. That is a long way from months and years.

Mr. Nixon: The minister has such a big bureaucracy, he should be able to get them out in one day.

Hon. Mr. Maeck: The fact is the honourable member should get his facts a little straighter before he makes such statements in the Legislature.

Mr. Nixon: The minister has it all wrong; gas bills have to be saved for a year before they can be seat in.

Hon. Mr. Maeck: The other point I want to make is the federal excise tax is never returned to the farmer. The feds collect it and they keep it. We at least return it.

Mr. Nixon: You get 10 cents back.

Mr. Speaker: What is wrong with the member for Brant-Oxford-Norfolk tonight? I thought you had already spoken on this.

Mr. Nixon: I am just trying to help him with his speech.

Hon. Mr. Maeck: The member for Hamilton Centre talked about our public transit policy. I think we have a good public transit policy. I think the public transportation in the city of Metro Toronto is second to none in the world, and it has been amply supported by this government.

Mr. M. Davidson: Why don’t you talk about the rest of the province?

Hon. Mr. Maeck: The member for Huron-Middlesex, who is no longer in his seat, talked and talked and talked. As a matter of fact, he read and read and read, but he did not say anything that had not already been said by all the other members before him.

Mr. Gregory: He never does.

Mr. Nixon: He made an excellent speech.

Hon. Mr. Maeck: I do have some concerns about the remarks of the member for Sudbury, because I must agree that people in northern Ontario certainly have to travel greater distances than they do in the south. As much as I hate to mention it, I must remind the member for Sudbury and others in northern Ontario, they do have the $10 licence plates they do not have in the south.

An hon. member: That’s a joke.

Hon. Mr. Maeck: It is not a joke to the people in southern Ontario who have to pay the $60 or $80, I can tell you.

Mr. Warner: The average person from up there is going to pay a couple of hundred dollars.

Hon. Mr. Maeck: David, why don’t you resign?

I am not by any means trying to say that is full compensation for the difference. I am saying it was brought in to help to compensate.

Mr. Warner: It will cost them $200 on the average for the next year.

Hon. Mr. Maeck: I think the member for Scarborough-Ellesmere had better check those figures out before he makes that kind of statement.

Mr. M. N. Davison: Let’s hear your figures.

Mr. Gregory: If you don’t drive a car, you don’t need gas, dummy.

Hon. Mr. Maeck: However, there is no question this type of tax is going to cost the average consumer in northern Ontario more money than in the south. There is no question. My good friend, the member for Nickel Belt, wants justification. As I indicated earlier, we do have to spend more money on roads and the price of roads has increased. That is the one justification. The other of course is we need the dollars.

I think that answers most of the queries that were made.

Mr. Speaker, I wonder if it would be possible to hold the vote on this bill until after the debate on the next bill? Could we have unanimous consent?

Mr. Speaker: Is that agreed?

Mr. Warner: Yes, we had agreed to that earlier. We would like to proceed in an orderly fashion this evening.

LAND TRANSFER TAX AMENDMENT ACT

Hon. Mr. Maeck moved second reading of Bill 57, An Act to amend the Land Transfer Tax Act, 1974.

Hon. Mr. Maeck: Mr. Speaker, this bill, in addition to several administrative changes, includes provisions to enact the increases in the tax rates proposed in the Treasurer’s budget. The administrative measures provide for greater ease of comprehension of the amount on which tax is payable, and ensures that purchasers upon registration of their deeds will be required to pay land transfer tax, regardless of when they paid for their property.

Mr. Haggerty: I would like to address myself to this bill and add a few comments with perhaps some reservations and some reluctance in supporting the bill.

We are concerned about the amendment proposed by the minister and can only say that it indicates the shallowness of his ministry and perhaps even of the Treasurer in that this is again a regressive tax. It adds to inflation, as does anything that relates to housing costs.

I was looking at the Toronto Star this afternoon, and it seems what the minister has suggested here -- increasing the land transfer tax to $45,000, which will bring in additional revenue to his ministry -- is perhaps in direct contrast to what his Tory buddies in Ottawa are suggesting. In particular Joe Clark goes about in the federal election campaign telling us that he is going to give preferred low interest rates to all home buyers.

Mr. Nixon: We’ll have to raise provincial income tax five per cent to pay for that.

Mr. Haggerty: Yes. There have been quite a few editorials on that particular issue suggesting that will cost the Canadian taxpayers around $600 million, and that it won’t attain the goals he hopes to attain. Apparently that lower interest rate will go to the wealthy.

This tax hits the lower income person who is buying a home worth perhaps $35,000 to $45,000 or less. Again, this is a matter of hitting the small working man in Ontario, and it will add additional costs to the purchase of that home.

I think we on this side have said in the past that we support a land transfer tax to cover the cost of operation of the registry offices in Ontario -- the cost of having the land registered. But we have taken the view that much of that additional revenue should be passed on to the municipalities which share in some of the responsibility related to property. I suggest to the minister that this is perhaps a levy that should be looked at.

A person purchasing a new piece of property in a municipality -- and the Deputy Premier (Mr. Welch) is well aware of this, particularly in the Niagara Peninsula -- that has what they call an impost charge can pay a charge of from $500 to as high as $1,200 This, again, is an extra tax on that piece of property.

[9:30]

I suggest to the minister that he’s just pushing the public a little bit too far by taxing and taxing and taxing. There’s got to be an end to it some time. Overtaxation isn’t the answer. This is an area where the government should be getting just enough to cover the cost of registering a property, the maintenance of the registry buildings and the staff that is required. A portion of that additional revenue should be passed on to the community or the municipality.

I look at the amendment put forward by the NDP. The mover moved that section 1(1) of the bill be amended by adding thereto the following subsection, -- subsection 1(d) and the said section 1 of the act is amended by adding at the end thereof “but does not include any building used solely for residential purposes.”

That will favour the speculator. This is one of the problems I find and this party finds. We must have tighter control over land speculation. It’s still a problem. My colleague from Huron-Middlesex mentioned a week ago about foreign owners buying farmlands in Ontario. It’s done on a speculative basis. When they buy particular farmlands, they can get a pretty healthy rebate on farm property taxes. It’s one way they can generate additional revenue.

They may be renting it nut to another farmer. Looking at the actual value of farmland and market value -- and the minister is pretty familiar with this, as I think I’ve discussed it with him previously -- in market value alone farmland is assessed according to what the speculator will pay for it. He’s going to pay much more than the average farmer will pay for farmland. I suggest in this particular area this will add additional revenue for speculative purposes that shouldn’t be allowed in Ontario. The government must find some measures to go after the speculator and not the average person who’s buying a home or who wants to buy an older home.

Mr. Eakins: No more speculation tax.

Mr. Haggerty: No more speculation tax. As the member for Huron-Middlesex said, there is a problem there. I find -- and my colleague from Niagara Falls will bear this out -- that speculators have come into certain municipalities and bought up acres of farmland for the purpose of later on dividing them into five-acre lots. It’s farmland that’s going out of production. They’re renting it out now and making a profit on it.

A neighbour of mine called me a couple of weeks ago about renting land that belonged to some German people who had bought the property. He pays the taxes on it and he pays the rent on it. It runs him to quite a bit of money a year. They’re sitting on something that’s worth money. As long as one can get a tax rebate on the farm property, I guess I would be buying land too on that basis, if I could get a break. I suggest all of this adds to the inflationary cost of land, even this change from $35,000 to $45,000 with the additional revenue that’s going to be brought about there. There is no doubt that it’s going to add to the cost.

I would bring this to the attention of the minister that I’m concerned about the speculator. After all, the speculator who buys the land adds nothing to paying for the costs of getting services to his land until after he starts to sell it off. That’s why I suggest that the additional revenues should go back to the municipality to pay for some of these future services instead of a person buying a property and paying a $500 or a $1,200 impost charge.

I sincerely hope the minister will give that consideration. Again, I said it’s a regressive tax increase and, perhaps, we shouldn’t be supporting it but we will support it.

Mr. Charlton: Mr. Speaker, I rise to speak to Bill 57, An Act to amend the Land Transfer Tax Act, 1974. I’ll say right at the outset this is another bad one.

Mr. Ashe: They’re all bad as far as you’re concerned.

Mr. Charlton: We’re going to oppose again.

This bill, again, deals in an area which is very vital to the economy of Ontario, and to Canada. It also deals with an area that has been under extreme pressure over the past 10 years. The real estate sector has been under excessive pressure. The price increases in this sector in the past 10 years have been astronomical especially in the residential sector.

Over the past 10 years residential prices of housing have up over 100 per cent. The ability of people in this province, and right across the country to a large degree, to afford housing in this country has been substantially reduced over the past 10 years. Today, instead of looking at whether or not a man working at the steel company, or anywhere else, can afford to buy housing, we have to look at total family income. We find substantially greater numbers of wives being forced to work in order that a family unit can buy a house. This tax badly affects that sector.

Again, it may not be the most obvious or the most guilty culprit in terms of the price of housing, but it’s just adding on top of what’s already there in terms of excessive prices and costs. This gets added as a front-end cost. This is money people have to save before they can even consider buying a home. Housing prices have been a problem for a number of years now, and we continually seem to find ways to make those problems worse in the housing sector. This is one of them. This is one of the ways we make them worse.

The ceiling in this bill for the low rate of the tax is increased. The minister increases the bill. Actually, I guess the Treasurer (Mr. F. S. Miller) increases the bill. We should get that straight as the minister always points out to us.

Hon. Mr. Maeck: Not always.

Mr. Charlton: The Treasurer increased the ceiling on the low rate of the tax from $35,000 to $45,000 but, at the same time as he takes a small step in a progressive direction, he turns around and increases the low rate of the tax by 33% per cent. It doesn’t stop there either. He goes on to increase the high rate of the tax by 33% per cent as well. The unfortunate part about all this is the progressive step isn’t enough and the increase both in the low rate and the high rate is far too much. This is another tax which is regressive in nature, which most heavily affects those people least able to pay, and which is also inflationary in nature in a sector where inflation has already been excessive beyond any reason.

One of the things we should be looking for, both in this province and in this country, is ways to reduce the rate of inflation and the burden of buying homes in this country instead of finding ways to add on to those things we’re not willing to control.

We now have a situation where the federal government is talking about some new tax credits to assist home owners. This government’s cousins in the federal party are talking about federal tax deductions of mortgage interest to reduce the burden of buying a home. My own party is talking about federal tax deductions of mortgage interest to reduce the burden of buying a home. My own party is talking about dealing with excessively high interest rates by putting a ceiling on mortgage interest rates to deal with the excessively high cost of buying housing. But the government of Ontario turns around and ups the tax, ups the front-end load people have to pay to buy housing.

So while everybody in Ottawa is running around looking for solutions to the problem, this government adds more problems. It may not be the major source of the problem, but it still is adding to the problem and it can’t get away from that. And it is adding to the problem in one of the sectors that is most vital in this country -- vital because housing is a necessity; vital because we are not building enough housing and we are losing the jobs that could be created in the housing sector and we are adding taxes to make the problem worse.

I want to talk about the one very small progressive aspect of this bill which I mentioned earlier; the increased ceiling on the low rate from $35,000 to $45,000. It is unfortunate that the minister doesn’t seem to realize that housing prices aren’t uniform across this province. Identical housing on lots of identical size carries considerably different purchase prices in different areas of the province.

Unfortunately for the people of Toronto, Metro Toronto, where we are tonight, happens to be at the top of the scale. The highest prices for average housing are here in Toronto and the prices graduate down as you move out from Metro. Average prices for an average new home in Metro -- not an excessively luxurious home but an average new home -- is almost $70,000. That same home on a similar piece of land in Hamilton is only about $54,000 or $55,000. In some areas of the province that same home is actually less than the minister’s new ceiling, less than $45,000.

We are in an economic situation in this province where people don’t really have a lot of choice about where they live. People who live in Metro and are forced to pay the excessively high prices for housing in Metro can’t afford to say, “I would like to get out of Metro. I will quit my job and go elsewhere.” With unemployment the way it is they can’t afford to take the chance of quitting their job and going elsewhere where costs are less. They are fixed here. They are stuck here. They are held here. Their job is here. They are forced to pay the price of housing in Metro Toronto.

Unfortunately for them, because they are stuck in Metro and because they are paying the $70,000 for an average home instead of the $45,000 in Sudbury, or wherever, they are not only paying the low rate of tax on the first $35,000 under the existing tax and on the first $45,000 under the amendment, but they are paying the high rate on the last $25,000 or $35,000 of that house, depending on whether one is talking about a few weeks ago or now.

Unfortunately for the people in Metro or the people in Hamilton whose average homes are over the minister’s ceiling as well, the high rate isn’t just slightly higher than the low rate; the high rate is double the low rate. It is not just a little bit higher, it is not just a little bit of an extra penalty, it is double the low rate. The low rate is bad enough but the high rate is double the low rate.

[9:45]

So people who are forced into a location because of where they’ve had to go to get a job and because of the price they’ve had to pay for their home, are being doubly penalized. They have to pay high Metro prices for their housing or they have to pay high Hamilton prices for their housing as compared to many other areas of the province, and they also get penalized a second time, because this government can’t see what average housing costs today in Ontario. That’s really unfortunate and one of the things that we find very offensive about this bill. It’s one of the amendments we intend to move when we get into committee of the whole House.

The other thing that I’d like to say is that perhaps the particular approach I just mentioned about raising the ceiling even further, perhaps all the way to the level of the cost of an average home here in Metro, which is the highest average home cost in the province, perhaps that’s only a minimum that we require out of this amendment bill.

As my colleague the member for Nickel Belt mentioned when he was speaking to the Gasoline Tax Act -- this fellow right down here, the minister knows him well; he’s the one who needles you all of the time -- one of the reasons we opposed the gasoline tax, and I’m going to say one of the reasons why we are opposing this tax, is because there seems to be absolutely no relationship between these taxes and economic fiscal policy from this government. In fact, not only does there not seem to be any direction in terms of economic policy but these taxes tell us that there’s a contradiction in terms of economic policy.

We hear during debates in this House, on housing, that we have problems with the price of housing, that the price of houses in this province is forcing families to have two incomes instead of one and we have to find ways of dealing with those problems. The federal government is discussing the same problems. I’ve already mentioned some of the approaches they are taking. We get CMHC and OHC and our own Ministry of Housing dreaming up schemes to reduce the burden, dreaming op schemes to help people afford to buy; then we turn around in our tax policy and add to the problem. Then we turn around yet again and dream up more schemes to deal with that problem. It’s a vicious circle; we increase the cost of government. Not only that, but all of these gimmicks and schemes that we end up having to create in order to help people buy don’t really work.

We’re in a situation right now in Ontario and in Canada where hundreds, nay, thousands of families are walking out of homes they’ve bought in the last few years. It’s a situation that’s gone far beyond anything we’ve ever seen since the 1930s. Thousands of families are quit-claiming because the costs have escalated so much they can no longer handle them. What’s even worse, Mr. Speaker -- and this is exactly what I’m talking about and I hope the Speaker can take the time to kick some of you people in the behind and make you realize what you’re doing -- a lot of these people who are quit-claiming, who are walking out on their homes and their mortgages, are people who were in on these gimmicks, schemes, that the provincial government here in Toronto and the federal government in Ottawa have been forced to set up to try to deal with the high cost of housing.

They are walking out because these gimmicks, schemes, don’t really get to the root of the problem. Yet, with this tax we are just adding a little more to the problem; putting the solution a little further away, making the problem that much harder to deal with.

What it really boils down to, as I suggested earlier, is that this tax, and the whole approach of the taxes in this budget, is in contradiction to the things the people in the federal campaign are telling us should be happening in order to stimulate the economy, to create jobs, to help us along the road to economic recovery, to put people to work.

Everybody at the federal level is saying; “We’ve got to put money back into the consumers’ hands because that’s stimulative.” This government is doing everything it possibly can to see that that doesn’t happen in any kind of a constructive way. This is just one of the very blatant examples of that.

This tax increase may not be in itself excessive. This tax increase may not be in itself the whole problem, but this tax increase along with the gasoline tax increase and the motor vehicle fuel tax increase and the alcohol tax increase and the tobacco tax increase and the tax increases under the Retail Sales Tax Act and the tax increases under everything else, the mining tax -- well the mining tax is a reduction, I forgot about that one; the government is just going right down the line and adding little lumps that catch in the throat of economic recovery, little lumps that catch in the throat.

Mr. Gregory: Are you going to send this stuff home or something?

Mr. Charlton: We are opposed to this tax increase because it’s economically harmful; and because instead of being helpful and stimulative, it adds to a problem which is already excessive beyond belief in the housing sector, it’s already excessive beyond belief in terms of this economy’s ability to allow people to buy housing.

We are just adding to the problem. We are contradicting the things we say in other sectors; we are contradicting the things that we are trying to accomplish with housing programs; we are contradicting the things that we are trying to accomplish with job stimulation in the housing sector. This tax increase at this time is silly.

Mr. Stong: There is another principle of this bill I would like to address, Mr. Speaker; it’s found basically in section 4 of the bill and it deals with the retroactive aspect of it.

There are two types of retroactivity in this bill. First is the retroactivity that would collect a tax right now before the bill becomes law as of April 11; then there’s the type of retroactivity that would impose that same tax on an arrangement or an offer to sell or purchase prior to April 11, 1979. It seems to me that the first aspect of retroactivity is illegal in itself and should not form part of this bill. In fact the bill ought not to come into law or have the tax collectable until the date on which the bill receives royal assent.

In addition to that, anyone who knows young people, young couples who have bought homes or are trying to buy homes in Ontario, must realize how close to the vest they have to play their hand, and how much planning and budgeting really goes into their purchase, particularly when they are trying to figure out their taxes, their insurance, their legal fees, their transfer tax as it was before, the interest rates, fuel -- everything; how much they have to budget and how much income is needed and how much money they have to borrow. Many of them have entered into arrangements with the bank to borrow that money now, and as a result of this bill they are now going to be saddled with an extra cost of which they had no notice at all before April 11. That is wholly unfair and ought not to be incorporated in this bill.

It’s easier to argue that the retroactive aspect of this bill, beginning on April 11, should be applicable, because as of April 11, the night of the budget, people who were contemplating the purchase of a home were put on notice they would have to pay that extra land transfer tax. But for those who had already entered into their offers to purchase, which incorporates a binding and legal document and in the absence of anything else forms a contract, that contract too is subject to this tax increase, although it was entered into prior to April 11.

It seems to me that that’s really unfair and ought not to be incorporated into the bill; that aspect of the retroactivity really is a principle that ought not to be included in this bill, because people didn’t have notice and it really does work a hardship, particularly on those who have to budget so closely when they are planning their purchase and now they are being straddled with this cost. So I would really urge the minister, on that particular aspect, if he will not have the tax collectable only on those deals executed or offers executed on or after the date of the bill coming into effect, at least he should have only those offers to purchase executed on or after April 11 caught by the bill rather than those offers to purchase executed or entered into prior to April 11.

I would urge him to change that aspect of this bill, so there is some alleviation of the hardship that has been worked on some young couples who have entered into offers to purchase prior to budget night. They had no notice and now they have got notice and they are saddled with the costs. Maybe they would have made other arrangements; they would have maybe taken a cheaper house; maybe they would have been able to get a higher credit rating; they might have offered less; they may have been able to make other arrangements with the bank. Now they are stuck. I ask the minister to consider that and to eliminate that aspect of the retroactivity of this bill.

Mr. Warner: Mr. Speaker, first a point of privilege with respect to the debate which occurred during the last bill: I wish to indicate to the Minister of Revenue there was a modest mistake in the calculations I applied to the discussion. I was using the average mileage figures for my good colleague from Algoma and not average figures for the rest of the residents of northern Ontario.

With respect to the bill we have before us, as my colleague from Hamilton pointed out, part of the difficulty is that you can’t just look at this bill in isolation. It is part of a package, a regressive package of taxation. I know that members of the Conservative Party who sat on the health care cost committee indicated they agreed we have our share of regressive taxes now. Surely it should be the overall economic policy of the government to try and get rid of as many regressive taxes as they can, not increase them, either in number or in substance, within each tax they have.

Surely the idea of a fair tax policy is to try and develop fair and equitable progressive forms of taxation and to eliminate as far as possible the regressive forms. That is the overall economic policy I think most people would expect to have.

But that is not what we get from this government. When they are given the opportunity to try and develop some decent forms of revenue raising they don’t do it. The most glaring example, of course, is our natural resources. This province has a tremendous amount of natural resources, but the revenue we raise from it is a pittance.

The most obvious comparison to all of us, and I am sure it is quite painful to the government by this stage, is comparison with the province of Saskatchewan. They have far less natural resources than we have here but they raise a great deal more money from those resources than we do in Ontario because they have a proper tax policy. Because they are able to do that they can eliminate regressive taxes as they go along. They are not at the stage of having eliminated all of them, obviously, but the average wage earner in Saskatchewan isn’t burdened the way the average wage earner in Ontario is. They have a sensible tax policy but in addition they have some economic planning. They have developed a plan and they are sticking to it.

What do we have in Ontario? Nothing snore than desperation. This is a desperate move. The government knows it has a housing problem; it knows it has some of the highest costs of housing in the country; it knows people in Metro Toronto cannot afford housing. The Minister of Revenue knows full well that for Ontario Housing alone in Metro Toronto there are 10,000 on the waiting list. These are people who cannot afford market rents, let alone have any hope of ever having a home of their own and in the face of the problem what does the government do, it increases the tax on the housing market. How can that be construed as anything but inflationary? How can it be construed to do anything but exacerbate the problem, not solve it?

[10:00]

In the face of not having a housing policy, and in the face of having a minister who wants to get rid of the Ministry of Housing, a minister who does not have the least concern about developing a housing policy in this province, this government decides to increase the tax. That is crazy; it is developed out of desperation, because there is no overall economic policy, because under pressure it is a lot easier to let Inco off the hook. That is part of the root of it. It is part of the problem with the natural resources. The minister knows it and I know it, but it is a lot easier to let them off the hook and add a small amount of tax to be paid by people who cannot fight back. That is a lot easier.

The minister will stand up and argue with figures to show it is not going to cost very much. Well, he is nickel-and-diming us to death, that is what he is doing. The last bill, the one we are opposing at division tonight, and this one --

Hon. Mr. Maeck: And all the other ones.

Mr. Warner: -- and the other bad ones. We will surprise the minister, there will be a couple we support -- the regressive ones, are not a lot, in total dollar amounts, but the effect is cumulative.

Mr. Speaker, I know that other members wish to speak. I could go on at greater length --

Mr. Nixon: Oh, come on. Keep going. Mr. Warner. The member for Brant-Oxford-Norfolk is trying to encourage me. You will notice I am the only member who gets that riding right -- Brant-Oxford-Norfolk. I never mistake it.

Mr. Nixon: There really are two.

Mr. Warner: Mr. Speaker, I do not know how any member of this assembly who is deeply concerned about developing an economic plan and policy for the province, and is also concerned about having fair and progressive taxation, could in good conscience tonight do anything other than vote against this bill. I certainly intend to do so and I encourage my colleagues to do the same.

Mr. Nixon: Mr. Speaker, when I was first elected I can recall very well the then neophyte Premier, a chap named Robarts, had appointed a royal commission on taxation, chaired by Lancelot Smith, a very able person who has certainly done a lot by way of his advice in the report of his royal commission to, in many ways, introduce much-needed equity and justice into the tax system of this province, which had certainly lacked justice and equity for a good long time.

I felt, when I saw this bill was coming forward, that I wanted to quote to the minister, who I am sure may have never heard of Lancelot Smith, just what the royal commissioner had said about the tax at that time. He made some criticism which has been corrected, at least to some degree, by the minister’s predecessor. But, I thought I should read just a short paragraph from page 296 of volume III of the report of the Ontario committee on taxation.

“On grounds of equity it is impossible to justify the land transfer tax. For individuals the time of purchase of real estate is seldom the time when they have the greatest liquidity or capacity to pay tax. To suggest that the action of buying real estate indicates an ability to pay, and that the purchase of this commodity are good measures of such ability is nonsense.

“If, as we conclude, the ownership of property is not a particularly accurate index of ability to pay, the act of purchasing property is worse. To the extent that property is bought by businesses, the concept is entirely inapplicable. Similarly, there are no benefits bestowed on property purchasers by government that are not already paid for through fees charged by land titles and registry offices.” I want to leave out a couple of sentences, which the minister may want to introduce if he chooses.

On page 296, he goes on as follows: “In short, we” -- that is, the royal commissioners -- “think that the tax on transfers of land is a poor one, and that the other Canadian provinces are wise in not having one.” I haven’t really perused any updated review of this report. Some of the other provinces may actually have them now. I have checked one or two of the facts associated with this with the minister’s chief advisers sitting under the gallery, but this is one area that I didn’t have an opportunity to review.

The commissioners go on to say that, as far as revenue is concerned, a sales tax on various services associated with land transfer would be fairer and easier to administer. It could he designed so that those people who were demonstrating the ability to pay would, in fact, be taxed.

On page 297, they make recommendation 31:4: “The land transfer tax be abolished and that commissions charged for services by real estate agents be made subject to the retail sales tax.” I am not prepared to debate with the minister tonight the efficacy of putting a sales tax on real estate commissions, but the royal commissioners in reviewing this objectively, felt and recommended to the government of the day that that was a fairer way to extract whatever revenues were needed from the sale of land in this connection.

Frankly, I think the land transfer tax has been useful, particularly in the much larger rates that are charged people who are not citizens of Canada in transferring titles to property to them. That concept was an appropriate one under some circumstances, but it has been singularly ineffective in stopping the transfer of our farmlands, our recreational lands and many of our developable properties in the urban areas to foreign ownership.

This is a matter that my colleague from Huron-Middlesex has brought to the attention of the House, and it is one which should concern us. I believe one of the ministers -- I guess it was the Minister of Agriculture and Food who is not in the House now, although he was here earlier -- had indicated that it was brought under control by the land transfer tax. But our experience and the facts show that that is not the case. Many of our best properties, agricultural, recreational and developable, have passed out of our jurisdiction in spite of the 20 per cent levy on land transfers.

I don’t want to single out any individual foreign proprietor but there is one company which I am sure some of the ministers opposite remember which, when it first came to Canada, had practically no bank balance at all. As I recall, they had about $2,500 to their name in Canadian currency. I refer to Fidinam Limited. They were able to get a transfer of some $50,000 for political purposes some time in the early 1960s to assist them in getting a deal with the Workmen’s Compensation Board whereby these properties were transferred and changed.

Many things have happened since then,

in spite of the 20 per cent land transfer tax paid by foreign buyers. Fidinam now owns what used to be my favourite hotel, the Park Plaza, and the Plaza II. As I drive up University Avenue, I remember seeing the big sign for the rental of a large office down there by Wellington Street. Those are three properties that I have seen just in casual observation, and I understand that Fidinam is now one of the largest landowners here. They even own a large chunk of land down in Haldimand county which they had hoped was going to be approved for industrial and/or residential development. I am not sure that such approval has been granted, but that company has done extremely well indeed, in spite of the 20 per cent land transfer tax which was referred to by the minister.

My colleague, the member for Erie, has indicated that this does not form a part of the basic principles we are prepared to put forward in opposition to the government to precipitate an election. The NDP was prepared to have an election on a five cent increase in subway costs for Toronto; evidently they are also prepared to have an election on the 2/10ths of one per cent increase in the land transfer tax.

Mr. Laughren: We are prepared to have an election on the government’s economic policy.

Mr. Nixon: They feel they are justified in saying that 2/10ths of one per cent is sufficient for them on a matter of high principle.

Mr. Laughren: That’s right.

Mr. Nixon: But, Mr. Speaker, you know as I know, that it is the moderation and good sense of the Liberal Party that maintains the stability in the House, as we must, as a Legislature, continue with the business of governing the province of Ontario for the benefit of all.

This is a niggling little increase, and one that is an irritant. It indicates that the government has never come to grips with the broad recommendations in principle of the Lancelot Smith committee, that this will undoubtedly not be possible for the government, which has been in office these 35 years. They haven’t been able to come to grips with these broad changes,

Mr. Speaker, I know you will agree with me that it will necessitate a change in government in order that new principles be brought to bear for justice and equity in the tax system of this province.

Mr. Bolan: Throw the rascals out.

Mr. Laughren: Mr. Speaker, as my colleague has said, we’re voting against the government housing policy as reflected in this bill.

Mr. Nixon: For 2/10ths of one per cent.

Mr. Laughren: We think it’s not the kind of housing policy we can support.

The member for Brant-Oxford-Norfolk didn’t express it quite right. What he really should have said was that it’s the Liberal Party’s unofficial coalition with the Tories that’s keeping the status quo in Ontario, that’s what he really should have said. It’s not stability that’s maintaining the status quo and all the regressive taxes that are there in the status quo; that’s what it really comes down to.

The Minister of Revenue looks over at us, as we vote against this bill, as we have with others on gasoline taxes, and he says, “You want to reduce all taxes.” That’s what he says to us. I heard him say it, he interjected it.

He doesn’t understand; I really think he doesn’t understand.

Hon. Mr. Maeck: You don’t understand that we have to have some money.

Mr. Laughren: The minister is not a manipulative person. I think he simply doesn’t understand. What we are saying to him is that it’s no coincidence he’s picked these kinds of taxes to raise. There’s lots of taxes he could have raised.

As a matter of fact, Mr. Speaker, if I thought you would allow it, if I thought you wouldn’t rule it out of order, I could tell the minister the taxes we would raise in the province of Ontario,

As a matter of fact, when we were talking about the budget, anticipating the budget the member for Muskoka (Mr. F. S. Miller) was going to bring in, we raised more money in our calculations than the Treasurer did; but they were all from progressive sources, every single one of them; whereas the governments’ taxes are from regressive sources, that’s the difference.

It makes no sense for the minister to stand up and say we would reduce all taxes; that’s nonsense. We would not increase these taxes because they contribute nothing, except to the coffers of the consolidated revenue fund.

What we are talking about is the way we would raise taxes. We understand the need to raise revenues, we understand that as well as the minister does. As a matter of fact if he were to take a poll in the western world, he would find that the really responsible fiscal people in government are democratic socialists, not free enterprisers who have run up the public deficit; not us.

Mr. Nixon: That’s why the United Kingdom is in such good shape.

Mr. Laughren: It was the Tories who did it in the UK and the member knows it.

We are the fiscally responsible political party.

Mr. Nixon: Now they’re coming over here and want to run us.

Mr. Laughren: That is heavy, I can’t cope with that.

Mr. Nixon: That’s the only racial prejudice that’s permitted.

Mr. Laughren: Mr. Speaker, what we’re saying to the minister is that this is another tax that is just adding an increased burden on people who should not have increased burdens. That’s what we’re saying. There are other taxes he could raise; the Treasurer knows what they are.

Mr. Nixon: Are you suggesting income tax be raised?

Mr. Laughren: I’m suggesting --

Mr. Nixon: He wants to raise personal income taxes.

Mr. Laughren: I’m being provoked.

Hon. Mr. Maeck: We could raise corporation taxes 20 per cent but it wouldn’t be enough; you would want 50 per cent.

Mr. Laughren: Mr. Speaker, the members are being very provocative.

Hon. Mr. Maeck: Well, you are provoking me.

[10:15]

Mr. Laughren: The Treasurer has already raised the corporations tax for some corporations. We would say that should be increased across the board and not selectively the way the minister has done it. That’s not the way to increase taxes either at the corporate level.

Hon. Mr. Maeck. If you want to be fair with everybody charge everybody the same.

Mr. Laughren: You’re right. Instead of raising OHIP premiums, which have no relationship to the ability to pay, we would increase corporation taxes and certain income taxes.

Mr. Speaker: What has that got to do with the land transfer tax?

Mr. Laughren: There are alternative ways of raising money --

Mr. Speaker: That’s not in this bill. Mr. Laughren: You’re quite right, Mr. Speaker.

We are adamantly opposed to this bill.

Hon. Mr. Maeck: Mr. Speaker, I will be as brief as possible. I see the clock is now at 10:15 and we would like to have a vote before 10:30 if possible.

I did want to reply to just a couple of statements that were made.

The member for Erie (Mr. Haggerty) suggested that the funds raised from this tax should be passed on to municipalities. I would remind him that funds are already passed on to the municipalities. Again, it’s the same as any other tax, it’s put into the general revenue fund and from there it’s delivered to the various places that the money goes, so the municipalities already are getting money.

The member for Hamilton Mountain (Mr. Charlton) made a great, long speech about the difference in the value of the same houses in various areas. I would just like to remind the member for Hamilton Mountain that there are one or two reasons why there are different values for the same type of house in different areas. One of the main reasons is the difference in salaries and wages. Usually, people who are paying $75,000 for a house are making much more money than those in the area where the same house costs $45,000, so the member has to take that into his calculations.

Mr. Charlton: Isn’t that funny, the civil service negotiates the same wage rates province-wide.

Interjections.

Mr. McClellan: What a lot of nonsense that is.

Mr. Speaker: Order.

Hon. Mr. Maeck: It is not nonsense. If you go into a low-income area you will find that the value of the property is lower. Come on, be reasonable.

Mr. M. N. Davison: Are there no $75,000 homes in Parry Sound?

Hon. Mr. Maeck: I would say to the member for York Centre (Mr. Stong) my staff have advised me -- but perhaps this answer is not correct. They advise me that the land transfer tax is due on the date of the registration of the conveyance at the registry office. The application of the tax increase is not retroactive. So whether there has been a misinterpretation on my part or the member’s I’m not sure. However, if he still has some reservations, he should let me know.

I will wind up my remarks so that the vote can be called.

The House divided on Hon. Mr. Maeck’s motion for second reading of Bill 55, which was agreed to on the following vote:

Ayes

Ashe, Auld, Baetz, Belanger, Bennett, Bernier, Birch, Bolan, Breithaupt, Campbell, Conway, Cunningham, Cureatz, Drea, Eakins, Gaunt, Gregory, Grossman, Haggerty, Havrot, Henderson.

Johnson, J., Jones, Kerrio, Lane, Maeck, McCaffrey, McCague, McKessock, McNeil, Miller, G. I., Newman, W., Nixon, Norton, Parrott, Peterson.

Ramsay, Riddell, Rotenberg, Rowe, Ruston, Snow, Stephenson, Sterling, Stong, Sweeney, Taylor, G., Timbrell, Van Horne, Villeneuve, Watson, Welch, Wells, Williams.

Nays

Bounsall, Breaugh, Charlton, Cooke, Davidson, M. N., Davison, M., di Santo, Dukszta, Germa, Grande, Johnston, R. F., Laughren, Mackenzie, McClellan, Philip, Renwick, Samis, Warner, Ziemba.

Ayes 54; nays 19

Ordered for third reading.

The House divided on Hon. Mr. Maeck’s motion for second reading of Bill 57, which was agreed to on the same vote.

Ordered for committee of the whole.

THIRD READING

The following bill was given third reading on motion: Bill 55, An Act to amend the Gasoline Tax Act, 1973.

The House adjourned at 10:35 p.m.