Legislative Assembly of Ontario

The House resumed at 8 p.m.

House in committee of the whole.

RETAIL SALES TAX AMENDMENT ACT (CONTINUED)

Resumption of consideration of Bill 58, An Act to amend the Retail Sales Tax Act.

On section 3:

Mr. Deputy Chairman: When we recessed, the member for Ottawa East had the floor.

Mr. Roy: I might say, Mr. Chairman, it is not every day at eight o’clock that I have the opportunity to get up and address the Premier (Mr. Davis), the Treasurer (Mr. F. S. Miller) and the Minister of Revenue (Mr. Maeck) all in their seats.

Hon. Mr. Davis: That is only because we are here and you are not. I hope Hansard records that.

Mr. Roy: Prior to the adjournment, Mr. Chairman, I was talking about the concerns of some of my constituents pertaining to Bill 58, An Act to amend the Retail Sales Tax Act and, more specifically, to section 3(4), paragraph 70, of the act. I might say to the Minister of Revenue, while we are talking about this, that this act is getting as complicated as the Income Tax Act for the ordinary lay person to try to follow the different sections of the act.

Hon. Mr. Davis: We are just trying to enhance your practice.

Mr. Roy: But I want to tell the Premier -- and I am pleased that the Treasurer is here, because his initiative in his budget results in abuse to the Minister of Revenue; he is the one who has to take all the abuse from the Treasurer’s initiative.

Hon. F. S. Miller: Notice that I am taking the ones with credit.

Mr. Roy: That’s right. But, in the terms of the taxes to the public, the Treasurer is not around to bear the brunt --

Hon. F. S. Miller: That is his job.

Mr. Roy: Okay. I am glad the Treasurer understands that; and I trust that he appreciates the effort and the zeal of his colleague who is the Minister of Revenue.

Hon. F. S. Miller: He is a fine gentleman.

Mr. Roy: My concern, Mr. Chairman, is this: As you know, under paragraph 70 certain furnishings, as defined by the minister, and food preparation equipment are exempt. The difficulty is explained by my constituent who wrote me a letter. For the benefit of the Treasurer and possibly the Premier -- his French is improving somewhat; I have noticed he has said a few words over the last year or so -- I will read my constituent’s letter in the language in which it was written; then I will have the translation shortly.

Hon. F. S. Miller: I’ll translate for you.

Mr. Roy: It is written to me, of course, as the member for Ottawa East, and it says -- L’électeur, Monsieur l’Orateur, dit tout simplement:

“Je vous prie de trouver ci-inclus la copie des nouveaux règlements concernant l’exemption de taxe de vente pour les restaurateurs.

“Comme fournisseur d’équipements à ces restaurateurs, je suis très concerné par la page 2 de ce pamphlet.

“Ces règlements sont sujet à tellement de différentes interprétations que je ne pourrais tous les énumérer ici.

“La responsabilité d’interprétation qui nous est imposée nous expose inutilement à des risques sérieux d’erreurs dispendieuses.

“J’apprécierais, à votre convenance, l’opportunité d’en discuter plus longuement avec vous.”

For the benefit of the audience, he says, basically: “Enclosed is a pamphlet that is printed by the Ministry of Revenue. As a retailer in restaurant equipment, I am concerned about page two. These regulations are subject to so much interpretation that I can’t even enumerate them all here.”

He feels that the responsibility for interpreting these regulations imposes undue hardship on the people in the retail business and can lead to serious errors which they will have to pay for. He says, “I would appreciate your comments.” As a member who is aware of what is going on in government in my riding, I had already made a speech on the subject, as the minister will recall, about the difficulty of interpreting the ministry pamphlet.

As one who furnishes these institutions, my constituent’s concern is that the ministry says the following businesses are exempt: hotels, motels, hostels, resorts, cottages, cabins, legions, convention centres, restaurants, summer camps and commercial resorts. That is the first onus imposed on the individual who sells the equipment: these businesses are exempt but others are not. Apartment dwellings are not. I suppose he can distinguish that from a cottage but then clubs are on the list. What is the difference between a club and a restaurant? He has got to make a distinction. When a person comes into his store to buy equipment he has got to find out “Are you serving food in your club? Is that considered a restaurant?”

Does the minister not see the onus that is being put on the individual, an onus that very often he would not even put on his own civil servants? Next is a delicatessen. What’s the difference between a delicatessen and a restaurant? He has to make that distinction. Is the individual running a delicatessen or is he running a restaurant? That’s the type of unfair onus I am talking about.

By the way, I notice that not exempted on the list are such institutions as homes for the aged and hospitals. I find it strange that if there are going to be exemptions, you would not include institutions which are for the benefit of the community.

Mr. Hennessy: You find a lot of things strange.

Mr. Roy: Also not exempt are snack bars, that is to say snack bars located at or in exhibition fairs, sporting events, cinemas, theatres, supermarkets, department or grocery stores or similar places. How does he tell where it is located or if it is a snack bar, restaurant or delicatessen? A lot will depend on what the individual involved calls it. He is going to have to make a distinction about who he is selling to?

Nursing homes are not exempt; nor are summer camps if they are private, If they are commercial they are. Surely when we are enacting laws, when we are asking the people of the province to collect taxes on behalf of the government or to give out certain exemptions, it is unfair to impose this type of hardship on the individual who is going to have to determine what type of business the person who is buying from him is in and what type of business he is selling to.

I notice the Premier frowning. Doesn’t it make sense that that type of onus shouldn’t --

Hon. Mr. Davis: Can’t you think of an answer? I have an answer.

Mr. Roy: No, but your frown was enough for me. I realize that all a man of your importance has to do is smile or frown, and I can get the message.

Hon. Mr. Davis: I frowned because the answer wasn’t as obvious to you as it was to me.

Mr. Conway: You haven’t answered anything you were asked today.

Mr. Roy: That’s right. I might mention that your performance during the question period was excellent, but there weren’t any answers forthcoming. It was a pretty good performance.

Hon. Mr. Davis: I really question whether there were any real questions.

Mr. Roy: Now you are insulting my colleagues the member for Carleton East (Ms. Gigantes) and the member for Ottawa Centre (Mr. Cassidy). I thought they said they had important questions.

Hon. Mr. Davis: Oh I don’t dispute that.

Mr. Deputy Chairman: May I bring members back to section 3 of the bill?

Mr. Roy: Yes. Thank you, Mr. Chairman; I’m glad you did.

May I ask the same question the Premier asked during question period: Must I ignore interjections?

Mr. Deputy Chairman: It would be advisable for you to do so.

Mr. Roy: The onus is imposed on the individual in the business. The other thing the individual has to do is to know the sorts of restaurant kitchen equipment that are exempt -- blenders, bowls, broilers, coffee-makers and so on. But exhaust canopies are not exempt, Mr. Chairman, and he has to know that.

First of all, someone walks in and says, “What are you running? What type of business are you running?” And the individual says restaurant. “Is it a restaurant or a delicatessen?” he says to him. That’s the first thing he has to determine: is it a restaurant or a delicatessen or is it a club; or is it a snack bar.

If he sells bowls, he’s okay. If the fellow is running a restaurant, he can sell a bowl; but he can’t sell an exhaust canopy or food wrapping equipment. Mobile buffets, wagons and cooking things are not exempt.

The other point is this: When an individual walks in, once it’s been determined it’s a restaurant, a delicatessen, a club or a snack bar, the person has to say: “Are you buying a whole piece of equipment? Because if I’m selling you parts for the repair and maintenance of this equipment, you can have it but you have to pay the tax.”

Do you see what I mean? There should be some high-priced lawyer cross-examining the individual who walks in to determine exactly who he’s selling to and what type of equipment he’s going to have.

I think I’ve made the point of the onus imposed on people in this business and that the complaints of this constituent of mine are well founded. Surely when we’re enacting laws we should try to put forward something more simple, especially considering that these people are collecting taxes for the government. It’s bad enough trying to run a business today, just trying to stay ahead of the overhead, trying to keep your head above water, without having to go through this rigmarole of having this type of responsibility forced on the individual. If he makes a mistake it’s got to come out of his pocket, doesn’t it? He has to pay it.

Hon. Mr. Maeck: We’ll be very lenient.

Mr. Roy: You’ll be very lenient. I would hope so. With that type of directive sent to individuals I would trust that you would be.

I think the point has been made that surely when laws are being passed, when regulations are being enacted, we should try to get some logic, we should have to have something comprehensive so that individuals aren’t faced with a responsibility which, to all intents and purposes is impossible for the ordinary business individual to meet.

Hon. Mr. Maeck: Some of the concerns the honourable member has expressed are certainly concerns of ours. It is a difficult situation, and a difficult one to administer.

In our ministry we have discussed some of the points the member has mentioned quite a few times before bringing the legislation here. However, I would remind the member there are district taxation offices that anyone who has a problem can certainly phone for a ruling. It’s really that simple.

The member didn’t have any problem telling me which ones were exempt and which ones were not by the list that’s already been supplied. He was able to say that canopies were not exempt and stoves were. I think that’s fairly explicit in the bulletin.

I would remind the member, also, that this will come under regulations; we will be looking at it a little more closely to try to iron out some of the concerns the member has.

In the meantime -- and I believe it’s contained somewhere in the bulletin -- if they do have a question, if they are concerned about something or there’s something they don’t understand, they can call the district taxation office and get a ruling. Once they’ve done that they’re not going to be held liable if a mistake has been made.

[8:15]

I’ve also instructed the staff that initially, while this program is moving ahead slowly, they should not be too tough on people who make mistakes, because it is a new law and it is a case of a few mistakes being made; we understand that.

The other thing I would like to say relates to the difference between clubs and restaurants. A club, obviously, would be a licensed club so they would have a licence to produce if that were necessary; however we’ve had some concerns, particularly about the definition of hotels, motels and the ones you talked about initially at the top of the page. We just haven’t been able to come up with a definition that’s any better than the one we have.

Mr. Roy: What’s the difference between a delicatessen and a restaurant?

Hon. Mr. Maeck: When we pass the regulations we will try to make it more definitive than what we have in the bulletin, but we had to get the bulletin out immediately, because as you know the tax was effective on April 11 and they had to have some guidelines. That’s not to say corrections cannot be made, and certainly they will be considered. I appreciate your bringing it to our attention.

Mr. Roy: The point I wanted to make is that even with the best of laws, the laws that are thought out, the ones we think are precise and the meaning is very clear, when you talk about tax laws there are always questions. When you set up these laws and they are enacted for the public, we always come up with question marks. What is the definition of this or that? The point I am trying to make is that we can see the problems even now, here; so imagine how bad this is going to be for others. There are some problems right here with this type of definition. We can see question marks all over the place.

I understand the difficulty the ministry officials have. I understand that the ministry officials will be most co-operative and the district offices will be co-operative, but the fact remains you can’t be asking a businessman to be calling up a district office on each and every transaction. So we should force ourselves, when we’re passing legislation or when we’re sending forth regulations, to draft so that at least it’s clear in our own minds what is meant, so that we have definitions that are clear and we have something which the ordinary lay person can look at and understand. Even at that we’re going to have problems, but here we’re sending out something, I’m suggesting to you, which is full of loopholes and which is full of question marks. I think it’s unfair to people like this individual who is in the hotel restaurant supply business. I think it’s an unfair onus to impose on individuals.

Hon. Mr. Maeck: As I stated earlier we will look at it again, it will be in the form of a regulation.

The other thing I might mention to the honourable member is that you have to remember that this is actually a temporary exemption. It sunsets in 1981, so it’s not something that is going to be etched in stone forever. Therefore, there are perhaps going to be some problems with it, but to cover all the items we have covered I don’t think anyone can come up with something that nobody is going to have a question on. It’s not that simple, because when you list one item then there is something that is very close to that one and people wonder whether that is exempt or isn’t it?

Stoves and exhaust fans are good examples. In my estimation, it is all part and parcel of the same thing, and yet it isn’t under this legislation. If you asked me why I would advise you there was a certain amount of dollars that we could afford to put into the tourist industry and the restaurant business and we had to draw the line somewhere; in that particular instance it happened to be between the stove and the exhaust fan.

Mr. Roy: Maybe you could answer a question for me. Why would kitchen refrigeration equipment be exempt and why would parts for the repair and maintenance of that equipment not be exempt? Why would you have that distinction on something like that?

Hon. Mr. Maeck: I would suggest to you that when you talk about repairs and parts, and so on, that could go into any refrigerator in anybody’s house if someone so desired. If they purchase a piece of restaurant equipment for a restaurant they are exempt, but the same parts that would repair that one could also repair the refrigerator in your house or mine and we would have no way of controlling that.

Mr. Roy: With respect, you fail to see the first step. My constituent is going to have to determine what the fellow is operating before he can give an exemption. If he sells a blender, bowls or broilers he is going to have to determine that he is selling either to a hotel, motel, restaurant and all that stuff, okay?

Hon. Mr. Maeck: What’s the difference?

Mr. Roy: What’s the difference? He’s going to have to do it whether it’s going to be for the actual equipment or for the repair equipment, that’s what I don’t understand.

Mr. Conway: I thought the Premier had the answer to that.

Hon. Mr. Davis: Mine was very simple. Dial the taxation office.

Hon. Mr. Maeck: I believe under the legislation they do have to produce an exemption certificate number, so perhaps that is right. I have no idea. If that is the case, I really don’t know why the parts are not exempt and the refrigerator itself or the piece of equipment is.

Again I can only say there is a limitation to the amount of dollars we were prepared to put into this and somewhere the line had to be drawn and perhaps that is where it was drawn.

Mr. Roy: I don’t like where you’ve drawn the line.

Mr. Worton: As I interpreted the remarks of the member for Ottawa East, you are not going to exempt exhaust systems. Quite frankly, as one who has been in the food business and with the thinking today on health protection, I don’t think there is anything more important than having a proper ventilating system in any shop, whether it be a foundry or food outlet. I think you should seriously consider that because that is a must today in any food establishment.

I spoke to your officials, who were very helpful, and to you about the smoke detectors which are on the market. There is a great play being made for people to install them. It was brought to my attention that there are three variations of the smoke detector; one is for smoke, one is for open flame and the third is a combination of both. There is some clarification needed on that particular item. I haven’t heard back from either you or your officials on it. Again I would implore you to reconsider what the member for Ottawa East has said about the exhaust systems and ventilating systems.

Hon. Mr. Maeck: I will reconsider the exhaust systems. I don’t think that is a major item one way or the other as far as tax is concerned.

We did look into smoke alarms. The reason we are exempting only smoke alarms as such, rather than the ones triggered by heat, is that it is my understanding the ones triggered by heat are usually not put in residences but are put in commercial buildings where the heat has to get to a fairly high degree before the alarm goes off. Our thrust here was to encourage people to put smoke detectors in residences. That is the reason the ones triggered by heat were not considered, only the ones triggered by smoke.

It is my understanding the ones triggered by heat are not put into homes because they require too high a degree of temperature to set them off.

Mr. Worton: The distributor who brought it to my attention certainly indicated to me they were becoming a large installation in homes. I can understand what you said about certain homes, depending on the type of heating, but we are talking now about an open flame alarm system. When I was speaking to our fire chief, he expressed some concern. There are some alarms that go off with the open flame and the smoke detectors will not do that. I think what is good for one should be good enough for the other.

Mr. Conway: Do you remember how storm doors got into the budget last year? Do you remember that one?

Hon. Mr. Davis: That wasn’t me. That was Kathleen.

Mr. Conway: It gave me a new insight on public policy.

Hon. Mr. Maeck: I will give the member the assurance we will look at it again. If the information you have given me is accurate, we will accept them along with the smoke detectors.

Mr. M. Davidson: I understand a position has been placed by members of our party with regard to the purchase of equipment manufactured in Canada. The amendment I suggested said in effect that “provided such furnishings or food preparation equipment were manufactured in Canada.” I understand that amendment was defeated. I do, however, remind the minister of a few words that I suggested to him when this was first presented to the House. I suggested to the minister at that time that there were fully owned Canadian manufacturers in the Cambridge and Kitchener area and, now that the member for Guelph has spoken, there are fully owned Canadian manufacturers of the kinds of goods he is talking about in the Guelph area.

I realize that the amendment placed under section 3 on behalf of the member for Hamilton Mountain (Mr. Charlton) did not get through, but I would like to suggest to the minister that even though he is going to allow the exemption for all goods purchased by these people, be they manufactured in Canada or the United States of America, he should consider sending out a bulletin to the tourist industry and the hotel/motel accommodators who are going to purchase this equipment, stating that even though the exemption applies to any equipment purchased, as far as his ministry is concerned preference should be given to equipment manufactured in Ontario or in Canada; they should purchase that equipment rather than equipment manufactured outside the boundaries of Canada or Ontario.

I would suggest that to the minister, because I believe the manufacturers in the Cambridge, Kitchener and Guelph areas would appreciate that as would the workers in those areas who are very much concerned about the jobs they have because of the influx of imported materials going into the very industries to which he is referring. He should send a directive from his ministry to the effect that even though the exemption applies to any goods purchased, he and his ministry would prefer that if possible they buy goods manufactured either in Canada or Ontario.

Hon. Mr. Maeck: I think that’s a reasonable suggestion and I’d be prepared to accept it. I, along with all other members of the House, am aware that there is a program in the province that says “Shop Canadian” so why can’t we extend it in the form of a bulletin to those people you are referring to? I’d be quite happy to do that.

Section 3 agreed to.

Sections 4 to 9, inclusive, agreed to.

[8:30]

CORPORATIONS TAX AMENDMENT ACT

Consideration of Bill 59, An Act to amend the Corporations Tax Act, 1972.

Sections 1 to 6, inclusive, agreed to.

On section 7:

Mr. Deputy Chairman: Mr. Charlton moves that section 7 of the bill amending section 33 of the act be amended by striking out “14 per cent” in the fifth line and substituting therefor “15 per cent.”

In my mind, that is an increase of taxation and as chairman I would rule that out of order.

Hon. Mr. Maeck: Mr. Chairman, there are four more amendments that have been proposed by the member for Hamilton Mountain related to that particular amendment and I wonder if he wants to proceed with those. The fifth one would stand on its own but I would again ask the chairman for the same ruling he has made on this one.

Mr. Charlton: If the chairman is going to rule the first one out of order, the same would apply to the next three. I don’t want you to throw out number four just yet, please.

Mr. Deputy Chairman: Since there’s an increase from 14 to 15 per cent in the amendment I have before me, I have ruled it out of order and so we will pass section 7.

Section 7 agreed to.

Sections 8 to 10, inclusive, agreed to.

On section 11:

Mr. Charlton: Mr. Chairman, I have an amendment to section 11. The minister has already suggested he feels it is out of order, but I am going to move it anyway and we will test the water on that one.

Mr. Deputy Chairman: Mr. Charlton moves that section 11 of the bill be deleted.

Hon. Mr. Maeck: Mr. Chairman, on this one we are again suggesting an increase in taxes and I would refer you to section 15 of the standing orders which says that only a minister of the crown or the executive council can move such an amendment.

Mr. Charlton: Mr. Chairman, we would like to dispute the contention that we are increasing a tax by this amendment and this deletion. This exemption as set out in section 11 of the bill is an exemption which did not exist prior to the existence of this bill and does not exist in the Corporations Tax Act. It is a new exemption, so by removing this exemption from the bill, we will not be increasing any tax because the exemption is not there now. It does not exist in present legislation and makes no specific recommendation to a specific tax increase in this section at all. It is merely removing an exemption which the minister is proposing, which does not at present exist in the Corporations Tax Act.

Mr. Deputy Chairman: The bill itself is to place a tax by the removal of an exemption and the motion is to remove that exemption.

Mr. Charlton: The motion is to remove the proposed exemption, not an existing exemption.

Hon. Mr. Maeck: Mr. Chairman, may I say we have already passed the section to which this section refers and therefore they are frying to remove a tax. They are trying to create an exemption.

Mr. Charlton: I might point out, Mr. Chairman, that when we passed the section to which the minister is referring, we did not pass it contingent on this section passing. There is no reference in the section which we passed to this section of the bill, none whatsoever. There may be reference in this section to that section but there is not converse reference. There is no reference in sections 7, 8, 9 or 10 to section 11 of the bill.

Mr. Laughren: He’s a corporation lawyer by profession, you know.

Mr. Deputy Chairman: Is there any other member wishing to speak to the point we have before us?

Mr. Conway: Very briefly, Mr. Chairman. It would be my impression, from having looked at that particular section the amendment speaks to, that it does substantially affect the pattern of tax exemption intended. To that degree it is clearly out of order. I would concur entirely with the minister’s position, lest there be any misapprehension from our point of view.

Mr. Deputy Chairman: Were there any other members wishing to speak to this point before the chairman rules? The member for Nickel Belt?

Mr. Laughren: Take the Liberals off the hook with your ruling.

Mr. Deputy Chairman: I do rule the effect of the bill is to impose a tax that otherwise would not be imposed and it is, therefore, out of order.

Mr. Germa: Mr. Chairman, I sat quietly here and listened to this debate and you have propelled me to my feet.

Mr. Deputy Chairman: I am glad I have accomplished something in this House.

Mr. Germa: I don’t want to do this, but I have to support the amendment put forth by my colleague that you are supplying another loophole to taxation of corporations. That is the whole argument I have with the tax system. You impose a tax and then by devious means you provide exemptions, one after the other, to relieve these people of their just taxation. This is what section 11 is; and that is why I support the proposition that section 11 should be deleted.

“There may be deducted from the tax otherwise payable is the lead-in to the section, and the whole tax system in Canada and in Ontario leads off with that proposition. You say one thing in the first paragraph and then by the time you get to the end of the legislation there is nothing left. It is like putting a hypodermic needle into an orange: you suck the juice out and say, “Now charge your tax. Levy your 14 per cent now.” There is nothing left. It is like whistling in the dark, or whistling up the creek, isn’t it?

Hon. F. S. Miller: That is quite a metaphor. It sounds like a screwdriver.

Mr. Laughren: Rowing in the dark.

Mr. Germa: Let’s listen to some of the other exemptions which are provided under the Income Tax Act of Canada, which the government of Ontario goes along with. By the time you come to the exemptions there is nothing left for the people of Ontario to tax, and that is the weakness in the taxation system. I am dealing now only with mining corporations, hut it applies universally to all other corporations.

I just happened to have picked up a document entitled Canadian Taxation of Mining Income, by E. N. Holland and R. M. Kemp.

Mr. Conway: Mr. Chairman, on a point of order: I certainly do appreciate the member for Sudbury’s point and I certainly want to listen to it, but I do want to know whether or not the chair is going to entertain the amendment.

Mr. Deputy Chairman: No, I have already ruled. But I am very pleased that you, yourself, suggested you were glad to hear the argument. I have ruled that it is out of order and I should really end the debate there. The chair does not claim to be infallible.

Mr. Laughren: The member is speaking to section 11 of the bill.

Mr. Deputy Chairman: I might suggest to the member who put forward this deletion that the proper method is simply to vote against this section, if he wishes to do so.

Mr. Germa: I am speaking to the proposition under section 11, Mr. Chairman, which says, “There may be deducted from the tax otherwise payable ... that portion of its taxable income or taxable income earned in Canada ... ” and it goes on and on and on dealing with exemptions. I am speaking to the exemptions in the corporate tax law --

Mr. Deputy Chairman: The net effect is that the minister is proposing an exemption and you want to delete that exemption. If the exemption proposed by the minister is deleted, then in fact the amendment is what will be imposing the tax. Therefore, I have ruled that the amendment is out of order, and I have heard nothing from you that would change my mind.

Perhaps we should go on to the next section of the bill, unless the committee wishes to hear further from the member for Sudbury.

Mr. Germa: Even though you have ruled the amendment out of order, I still resent that we are adding more exemptions to the Corporations Tax Act. I have a right to object.

Mr. Deputy Chairman: I appreciate your resentment.

Mr. Germa: Let me tell you about it, Mr. Chairman, and you might agree with me.

Mr. Deputy Chairman: You may challenge my ruling if you wish to do so. But I am going to declare section 11 as part of the bill.

Mr. Germa: I am not speaking to the amendment, Mr. Chairman.

Mr. Deputy Chairman: You are speaking to section 11 as such?

Mr. Germa: To section 11, which provides further exemptions to corporations.

Mr. Deputy Chairman: That is in order. I have ruled your amendment out of order; you may speak to the section, and you may vote against the section if you are so inclined.

Mr. Germa: I am not proposing any amendments, because I know it is impossible to deal with this minister. He has a closed mind. He is atrophied; he is in a rigid position. He has been listening to his advisers, and I know what they have said. But I still resent further exemptions to the Corporations Tax Act.

What I resent are the loopholes that are deliberately provided in any taxation law -- not only in the corporation tax law; they exist in the income tax law or any other tax law. At this time we are talking about the Corporations Tax Act, but the exemptions that are provided both federally and provincially are simply abhorrent and unacceptable to me.

When I refer to a corporation, I am speaking of mining corporations; I am zeroing in on mining corporations because they are what I understand best, coming from the city of Sudbury, where our whole lifestyle is dedicated to and dependent upon mining corporations. Yet over a long period of time I have seen that the mining corporations have not contributed their fair share to the existence of the community or the province in which they exist.

Just listen to this list of exemptions provided for mining corporations under the federal Income Tax Act, which the province of Ontario accepts with certain reservations. In general terms the province of Ontario goes along with these exemptions, and here it is proposing one more.

The figures have been put on the record by my colleague of the benefit to the province of mining corporations; it is an infinitesimal amount when we compare it to the wealth and the value of the minerals produced. I just want to put on the record all of the loopholes that are evident and available and used by mining corporations today when calculating their corporation tax:

(1) Inventory allowance; (2) capital costs allowance; (3) the 25 per cent resource allowance -- after January 1, 1976; (4) reserve for unrealized profits on disposing of resource properties; (5) interest expense; (6) Canadian development expense; (7) pre-1972 Canadian exploration and development expenses; (8) foreign exploration and development expenses; (9) Canadian exploration and development expenses; (10) Canadian exploration expenses; (11) earned depletion; (12) charitable donations; (13) gifts to the crown; (14) dividends from Canadian corporations and foreign affiliates; (15) loss carry-overs.

Those 15 exemptions are applicable Mr. Chairman, before you start calculating your corporate tax. By the time I deduct those 15 exemptions, there’s nothing left for the minister to tax. These things include the corporate airplanes, the fancy mahogany boardrooms, and you’re asking me why I disagree with granting them another exemption. They don’t need another exemption. The mining corporations in Ontario do not need another exemption.

A headline in my local newspaper showed Falconbridge Nickel Mines Limited bad $22 million profit in the first quarter of 1979, the highest profit they’ve seen in their whole history. What is the minister doing this for? Why is he granting this further exemption? He’s already granted them the whole world. It’s time the people of Ontario realized something from their natural resources.

I’m speaking now, in the whole corporate tax structure, only of miffing exemptions. I’m sure it permeates the whole business community. Yet you’re willing to grant further exemptions. I’m just amazed.

I understand rule 15 of the standing order -- we can’t propose an amendment which will alter the tax structure or the revenues of the province of Ontario. But despite rule 15, I have to stand here and oppose this exemption. I hope the minister will take my words into consideration.

[8:45]

Mr. M. Davidson: Point of order: Mr. Chairman, I understand that prior to my arrival in the chamber there was another point of order relating to the acceptance of the amendments placed by the member for Hamilton Mountain with regard to this. I understand also that under the standing orders, the section that was quoted by the chairman at the time was under “Regulation and Management of the House” section 15: “Any bill, resolution, motion or address, the passage of which would impose a tax or specifically direct the allocation of public funds.

I would ask you, as Chairman, to take a look at section 15 on page three of the standing orders. I would ask you to determine whether the motion placed by the member for Hamilton Mountain did in fact impose a tax or whether it did in fact specifically direct the allocation of public funds.

I contend that section 11 of the act and the motion moved by the member for Hamilton Mountain delete -- and I want to make this very clear -- exemptions that have not previously been imposed. Therefore under this section no tax was imposed and unless this is passed, there can be no allocation of public funds.

Whet I am suggesting to you, Mr. Chairman, is that the point of order made earlier and directed to this very section was correct and should be taken very seriously into consideration by yourself, as the chair, or referred directly to the Speaker or the procedural affairs committee to determine what section 15 of that part of the standing orders actually means.

As far as I am concerned, Mr. Chairman, we are not asking for the imposition of a tax, nor are we asking that we specifically direct the allocation of public funds, because unless this bill passes there are no public funds available. I would ask you, Mr. Chairman, to take that into consideration -- yourself, the Speaker of the assembly and, if necessary, refer it to the procedural affairs Committee.

Mr. Chairman: I’d like to thank the honourable member for his comments. I would have to remind the member that the chairman who was in the chair at the time ruled the amendment out of order.

Mr. Sterling: How are you going to rule?

Mr. Chairman: Order. As that amendment has been ruled out of order by the chair the member has one alternative. He may, if he wishes, challenge the ruling of the chair. If not, we’ll continue with further business.

Mr. M. Davidson: Mr. Chairman, it is not my wish to challenge the ruling of the chair. As I said earlier in my comments, what I am asking you, as chairman at the moment --

Mr. Makarchuk: It is not because of the ruling. It is the office we respect.

Mr. M. Davidson: -- to do, is to refer, through you to the Speaker of this House and if necessary to the procedural affairs committee of this House, what in fact section 15 on page thee means.

Mr. Chairman: Order.

Mr. Rotenberg: You can’t do that.

Mr. Chairman: The honourable member is now being repetitious. I appreciate his comments.

Mr. M. Davidson: I’m referring to your comments, Mr. Chairman.

Mr. Rotenberg: You can’t do that. You want to appeal and it goes to the Speaker.

Mr. M. Davidson: That’s all I ask. Read Hansard, David, if you don’t understand what I’m saying.

Mr. Chairman: Are there any further comments on section 11? Shall section 11 stand as part of the bill?

Some hon. members: No.

Mr. Chairman: All those in favour will please say “aye.”

All those opposed will please say “nay.”

In my opinion the ayes have it.

Amendment stacked. Section 12 agreed to.

On section 13:

Mr. Chairman: Hon. Mr. Maeck moves that subclause (i) and (ii) of section 126(4)(c) of the act, as set out in section 13(2) of the bill be struck out and the following substituted therefor:

“(i) an individual who is a limited partner thereof or a member of his family is a general shareholder or is related to the general partner, or

(ii) a trust, the beneficiaries of which are related to any person mentioned in sub-clause (i) is a limited partner thereof.”

Mr. Laughren: On a point of order, Mr. Chairman. Did he send a copy of that to us?

Hon. Mr. Maeck: Yes, I did.

Mr. M. Davidson: Who got it?

Hon. Mr. Maeck: Your critic.

Mr. M. Davidson: He doesn’t have it.

Mr. Charlton: When did you send it?

Hon. Mr. Maeck: I sent it today before the question period.

Mr. Conway: Lorne, that amendment makes you sound like a Philadelphia lawyer from Parry Sound.

Hon. Mr. Maeck: The Liberal critic got one. I’m sorry if you didn’t get one, I can send you one over. It was sent over.

Mr. Chairman: We will be dealing with two separate subsections.

Hon. Mr. Maeck: Mr. Chairman, I am going to read the explanation to this one.

Mr. Conway: Read it slowly, Lorne.

Hon. Mr. Maeck: This amendment is necessitated because the loophole was not fully corrected by the existing provision in this bill. After amendment, the taxpayer will not be able to avoid or substantially reduce the amount of capital tax which would otherwise be payable had he not had a related person or corporation hold his interest as a general corporate partner of a partnership in which he is a limited partner.

Mr. Conway: Could you amplify that?

Mr. Haggerty: If I read the amendment correctly, the minister has left out the words “of his family owns any share.” Is that what he deleted from his amendment? The amendment now reads: “An individual who is a limited partner thereof or a member of his family.”

In the original bill it was “his family owns any share.” Now the interpretation is a shareholder or is related to the general partner. I just can’t understand what this will mean under the act if the words “family owns any share” are removed and just omitting the word “owns” after “family.” I don’t know what the minister means when he says he is plugging the loophole. It seems to me he has broadened it out, opened it up.

Mr. Conway: Is this the intermission?

Hon. Mr. Maeck: I am just trying to make a comparison here.

Mr. Conway: We should have an NFB short.

Hon. Mr. Maeck: Perhaps I will have an answer from my staff shortly. It is very difficult, very complicated.

Mr. Haggerty: As I interpret it, it says, “family owns any share of capital stock.” The amendment is, “a member of his family is a shareholder.”

Hon. Mr. Maeck: As I understand it, the idea behind this amendment is to plug a loophole where the original amendment covered most people who would be able to avoid the tax. I think I have a proper reply here.

The motion to amend the corporations tax bill is in order to block a loophole in the provisions relating to the paid up capital of limited partnerships. Under the amendment in the bill, the paid up capital of a limited partner who is an individual who owns shares in the general partner, is to be added to the paid up capital of the general partner. The original amendment did not include that. The idea of that is to make sure the proper tax is applied.

Under the present wording, the parties could arrange to have such an individual limited partner own the shares of the parent company of the general partner and in such case, the paid up capital of the individual limited partner would not be taxed under the amendment in the bill, since neither he nor members of his family would own any shares in the general partner.

This motion would close this loophole since, in the example I have given, the individual limited partner would be related to the general partner, even though he would not be a shareholder thereof.

There are some problems with this particular act simply because of partnerships. Partnerships, general and others, are formed in order to avoid the payment of tax and that is why this whole section is in here. After we had drawn up this section we located one loophole that was left and that it the one we are trying to close.

Motion agreed to.

Hon. Mr. Maeck: The amendment to clause (d) is in relation to the same explanation I just gave. This is just the other part of it. It requires this amendment to make the whole thing work.

[9:00]

Mr. Chairman: Hon. Mr. Maeck moves that section 126(4)(d) of the act as set out in section 13(2) of the bill be struck out and the following substituted therefor:

“(d) where two or more general partners of a limited partnership are corporations, and where a limited partner referred to in clause (c) is a shareholder of or is related to two or more of such general partners, the amount allocated to such limited partner under clause (b) shall be apportioned and added to the paid up capital of each general partner of which the limited partner is a shareholder, or to which he is related in the same proportion that the share of the profits of the limited partnership of that general partner is to the total share of the profits of the limited partnership of all the general partners of which the limited partner is a shareholder or to which he is related.”

Mr. Laughren: Mr. Chairman, is there a subamendment that would remove the word “partners” from that amendment?

Mr. Chairman: Would the honourable member put that in writing, please?

Mr. Laughren: No, I’ll pass.

Mr. Chairman: Are there any more questions?

Mr. Charlton: Yes. Mr. Chairman, Could I just ask the minister if he could put the amendment that he just read into his own words for us?

Hon. Mr. Maeck: I’m sure if I put it in my own words it would be more understandable but we must have the legal terms to make it legal.

Motion agreed to.

Section 13, as amended, agreed to.

Sections 14 to 23, inclusive, agreed to.

Hon. Mr. Maeck: I move the committee rise and report.

Mr. Chairman: We have some votes.

Hon. Mr. Maeck: I thought they were stacked. Could we have agreement that the votes take place at 10:15 p.m.? We would have to move back into committee of the whole House.

Mr. Chairman: Does the committee agree that we come back to committee to vote? At 10:15 p.m.?

Agreed.

On motion by Hon. Mr. Maeck, the committee of the whole House reported progress.

SUCCESSION DUTY REPEAL ACT

Hon. Mr. Maeck, on behalf of Hon. F. S. Miller, moved second reading of Bill 47, An Act to repeal the Succession Duty Act.

Hon. F. S. Miller: The score was 2-2, Mr. Speaker.

Mr. Acting Speaker: That’s the most important information you’ve given us in some time, Mr. Treasurer.

Hon. F. S. Miller: I really think no introductory comments are needed on this bill. Ontario followed the lead of eight of the other provinces in Canada and decided that the combination of capital gains tax and income taxes were, in our opinion, adequate in terms of the overall taxation of wealth. We followed the lead of provinces such as Saskatchewan which, as recently as two years ago, felt that --

Mr. Warner: They have got resource tax -- something you refused to do.

Hon. F. S. Miller: -- it was also not necessary any further to take away from the incentives we have in our society for the accumulation of wealth.

Mr. Laughren: Mr. Speaker, the Treasurer has introduced this bill to abolish the succession duties in Ontario for basically three reasons, as I understand his budget. First of all, he feels that the capital gains taxation has eliminated the need for succession duty tax. Second and I quote from his budget statement: “I am convinced that the continuation of this tax is hurting our economic performance and costing us jobs.” The third reason, and I am quoting again from the Treasurer’s budget statement: “Our citizens will have one less burdensome concern to deal with in planning their private lives.”

I shall return to those comments later, but they do contrast somewhat with the budget statement a year ago, 1977, which said this:

“In the past year, the provinces of British Columbia and Saskatchewan have abandoned the succession duty field. As a result, only Manitoba, Quebec and Ontario now levy succession duties and gift taxes. We have reviewed this matter carefully and have concluded that our own statutes should remain in force. They add a valuable degree of equity to the province’s tax structure.”

At that point, the level of succession duties in Ontario was such that all estates under $300,000 were exempted as a result of the 1977 budget; even with that $300,000 exemption, the Treasurer indicated that it was necessary to retain succession duties. Perhaps when he responds, he could tell us what has changed in the last year.

As we begin what I regard as an important debate -- as a matter of fact, I think it is an extremely important debate -- I would like to quote a fellow by the name of Harlan Read. This is what Harlan Read said in the introduction to a book which he wrote some years ago. The title of the book is The Abolition of Inheritance. This is what he said, Mr. Speaker, and I hope you will bear with me, because it bears directly on this debate. I quote from page three:

“I intend to prove to you that inherited wealth is the foe of freedom; that it is a violation of the rights of the unborn; that it is the perpetrator of inequalities, robbing the cradle of its opportunity and fastening upon a living generation the authority of the tomb; that it must follow monarchy and slavery into the record of things past, because it is like them both in essence and in detail. Inherited wealth is the father of poverty and aristocracy, and the hearts of mankind today are sick unto death of both.

“The case against inherited wealth is simple and clear, but the evil has been so long entrenched and the minds of men are so reluctant to admit the existence of a new world or a revolutionary thought that I ask your most careful and honest attention to my arguments. I ask you to forget for a time all preconceived ideas and to open your minds frankly and liberally to the truth, no matter how strange and new it may appear. I ask you to forget for the time all obstacles to the accomplishment of the proposed reform and merely to consider whether the principle of inheritance is right or wrong. When that question is settled, we will consider next what can be done to remedy the condition in which we find ourselves. But first let us seek with open mind to discover what is right.

“I must assume at the outset of my argument that each reader is interested -- deeply interested -- in the vital problem I am to present. I must take it for granted that I am writing for sane, healthy, earnest men and women who feel as I do the miseries of little children who hear as I do the groaning of strong men burdened with the yoke of undeserved poverty who hope as I do that the time of deliverance is at hand. More than that, I must assume that my proposal to destroy the privilege of inheriting fortunes suggests the possibility of relief that is well worth the thought that you, as readers, have undertaken to give it.”

That was from The Abolition of Inheritance, by Harlan Eugene Read, the year 1918, and very little has changed in the thoughts expressed in that introduction to his book. That is how we feel. This government talks about the necessity of providing incentives both at the personal level and at the corporate level. The Treasurer is very fond of talking about incentives. But isn’t it strange that when he talks about incentives for the corporate level it is that there are never enough and there have got to be more. When he talks about incentives at the personal level it is that there is too much there now and we have got to take away a little or we will destroy the incentive of the individual.

That is the difference in the mind of the Treasurer and the party he represents. For the corporate sector it is always, “We have got to give more in order to create incentive.” With the personal level it is, “We can’t give so much or we will take away incentive.” What kind of logic is that? Well, we know what kind of logic it is; it is elitist logic.

This government wears its hypocrisy like a neon garment. There is no better example than the Treasurer and there was no better example than the Treasurer on budget night. That is exactly what he was doing.

The Treasurer talks about personal productivity, about the need to keep social assistance at a level so that there will be an incentive to work -- be is very fond of talking about that. It is obvious, even in a relative sense, that in his eyes plenty at the personal level causes sloth.

That is what he thinks when he is looking at the individual out there in society: plenty causes sloth. That is what he thinks when he is talking about applying the revenues from the consolidated revenue fund to the family benefits levels or the minimum wage in the province. That is what he is afraid of. He is afraid that plenty will cause sloth. If that were true we would be paying family benefits to the Eatons, the Westons, the Bronfmans and all those other families who have inherited great wealth.

There is no other tax that so clearly draws the line between that party and this party, not to mention the Liberal Party of Ontario. No other tax so clearly speaks to the presence of income classes in our society as this inheritance tax, and no other tax so starkly presents a picture of the presence of wealth in the presence of people who have so little as the abolition of a succession duty or a death tax. The abolishment of no other tax would so clearly perpetuate an economic system that plainly and simply does violence to human potential, to personal potential.

Opposing no other tax abolishment would give me so much satisfaction or so much a sense of justification as opposing the abolishment of succession duties in this province. Abolishing succession duties is abolishing, plain and simply, a tax on wealth. It is a declaration of war on equity; that is what the Treasurer has done. It is a declaration of war on the redistribution of wealth in our society; make no mistake about it, that is exactly what it is. The Treasurer understands that and his advisers understand that as well. The Treasurer has indeed thrown down the gauntlet to us, and we cannot accept it, we cannot accept this bill.

Mr. Hall: You disagree with Blakeney, do you?

Mr. Laughren: Yes, as a matter of fact, I will get to that in a moment about the abolishment of succession duties.

I would call upon the Liberal Party in Ontario to support us in opposing the abolishment of succession duties in Ontario. Would the members do that?

Mr. Nixon: You want double taxation on it, do you?

Mr. Laughren: It is very interesting to hear the Liberal Party speaking like this. This is not simply a bill that will cost the Ontario Treasury $28 million this year; it is much, much more than that. This is a bill that is steeped in principle and tradition.

[9:15]

I feel that this bill demeans the democratic process in Ontario because of its intent. I mean that. The Treasurer has demeaned the democratic process in Ontario and I will tell you why.

I do not believe that this government has received any mandate from the people in Ontario to so blatantly hand over a gift such as this to the top three per cent in our society. The minister has received no such mandate. He has taken it upon himself to cater to the whims and wishes of that group of three per cent, only three per cent but he has received no mandate to do so, none whatsoever.

Hon. F. S. Miller: I am catering to the 97 per cent who hope to be part of the three per cent.

Mr. Laughren: Oh, that’s very interesting. That really does speak to the minister’s philosophy, doesn’t it? That’s very interesting and it is nice to have it on the record. What the Treasurer is saying is that he is willing to write off 97 per cent because they have his base desire to join the top three per cent.

Hon. F. S. Miller: I am catering to the 97 per cent who want to be.

Mr. Laughren: No, no. The Treasurer is saying that he believes that 97 per cent of the people out there have the same base desire as he does to join the top three per cent, at the expense of the bottom 97 per cent I might add. One doesn’t get to the top without climbing over the people on the bottom and he knows it.

Hon. F. S. Miller: Have a secret ballot in your party.

Mr. Laughren: We’ll see. I feel very strongly that this Treasurer and this government have not received a mandate to do this for the top three per cent of the population of Ontario, three per cent of income earners. I didn’t hear the minister talk about that in his last election campaign, but he will talk about it in his next one, I promise him that. Because that is exactly what he is doing.

The Treasurer talks about capital gains and that we don’t want double taxation. The Liberal Party does as well. What a lot of nonsense. What he doesn’t tell everybody is a couple of minor points. One, capital gains are taxed only at 50 per cent. You only pay tax on 50 per cent of capital gains anyway. Two, there is no capital gains tax in Ontario as a provincial taxation measure. There is none.

Mr. Hall: You are the last holdout, Floyd.

Hon. F. S. Miller: You are wrong.

Mr. Laughren: There is the federal capital gains tax --

Hon. F. S. Miller: We get that back.

Mr. Laughren: -- which applies to the province of Ontario on 50 per cent of the capital gains realized. What the Treasurer is engaging in is, quite frankly, a deception. Perhaps the Treasurer could tell us when an estate is left in Ontario now, what tax will the heirs pay on the amount they receive from that estate? What tax will they pay? When the Treasurer responds, perhaps he could tell us.

This bill will cost this government dearly. The minister shakes his head, he smirks. And the Provincial Secretary for Social Development (Mrs. Birch) -- what a joke. Social development. If anyone over there should be concerned about an iniquitous bill like this, it is the Provincial Secretary for Social Development. I don’t expect anything better from the flimflam man from Muskoka, but the Provincial Secretary for Social Development should know better.

Hon. F. S. Miller: You never learned much about farming. You feed the chickens to get the eggs. You don’t cut their heads off.

Mr. Laughren: I want to tell the minister, I’ve heard all that before. It only applies to the rich, doesn’t it? The only trouble with the Treasurer is that he only provides incentives to the rich. When he provides it to the poor, he says it kills incentive. What kind of double standard is that? That’s hypocrisy and the Treasurer knows it.

Mr. Speaker, the Treasurer talks about the need for economic stimulation, the need to create jobs in Ontario. Because of the high unemployment rate in Ontario and elsewhere in this country, it’s being used for everything. It is being used to justify everything from unsafe conditions on the job to pollution of the environment, to nuclear development.

Mr. Deputy Speaker: And to the bill before us?

Mr. Laughren: Yes. This Treasurer, Mr. Speaker, would approve a germ warfare testing centre in downtown Toronto if he thought it would create employment. That’s where his head is when it comes to the creation of jobs.

I want to tell you, Mr. Speaker, the need to create jobs has become the latest refuge for the scoundrel. That’s what it’s become. I want to tell you, Mr. Speaker, the Treasurer is indeed a scoundrel.

Hon. F. S. Miller: On a point of order: Isn’t that getting -- I’m many things but --

Mr. Nixon: You have gone too far. Withdraw “scoundrel” and substitute something else.

Mr. Deputy Speaker: I appreciate the words used by the member for Nickel Belt, but I’m sure he could find something probably a little more parliamentary.

Mr. Laughren: Mr. Speaker, I did try. I would say that the Treasurer is engaging in fiscal deceit; he is using specious arguments to justify his own elitist determination to protect that segment of our society that fawns on him. That’s exactly what he’s doing. He is simply protecting the property of those who need no protection at all.

I would quote from a paper entitled ‘Transfer Taxes: Their Effect on Productivity and Control of our Economy,’ by John Savage and D. Van Den Bulcke, a paper prepared for the Ontario Economic Council in 1968. This is what they have to say about the succession duties in Ontario, which first came into effect in 1892.

Hon. F. S. Miller: That was before capital gains.

Mr. Laughren: “Quilted in 1892, the now holey and drafty Ontario Succession Duty Act has been patched and fringed over the past 75 years until today it is a tattered and frayed remnant, providing the most complete coverage of those estates whose possessors have likely been similarly attired in relative tatters, while the heirs of the well-advised capitalists are attired in relative splendour as the benefactors of a carefully planned delivery of their successions through one or more of those gaping holes.”

That’s what we think, and others think, of the kind of tax system we’ve got in the province of Ontario. The Treasurer should know that already in the province of Ontario there are exemptions for all estates up to $300,000. Who is the Treasurer weeping for?

The Treasurer’s remark the night the budget was presented was that egalitarianism is b.s. Mr. Speaker, you called me to order for using the word “scoundrel,” which so aptly describes this Treasurer. That was not a thoughtless or a throwaway remark by the Treasurer. It was an expression of this Treasurer’s contempt for those who have made his life so comfortable. That’s exactly what it was.

Hon. F. S. Miller: I came here to suffer.

Mr. Laughren: His life is comfortable because others made it possible for him to be comfortable. He did not achieve it on his own.

Mr. Nixon: He worked hard. He took tickets at Santa’s Village.

Mr. Roy: So much for free enterprise.

Mr. Laughren: The Treasurer says that the abolishment of succession duties --

Mr. Ashe: Where does Morty Shulman stand on this one?

Mr. Laughren: I’m the wrong person to ask about the views of Morty Shulman.

The Treasurer says the abolishment of succession duties will make life less burdensome for people. Again what an outrageous deception from the Treasurer. The abolishment of this tax will make life less burdensome for people who already have no burdens, the top three per cent. Does he really think the top three per cent have financial burdens?

Later I’ll get to the Treasurer’s argument about how succession duties crunch the families who are recipients of a small business. The Treasurer says that other Canadian jurisdictions have abandoned succession duties. He’s right, they have; except for Quebec, other jurisdictions have abandoned succession duties.

Mr. Conway: What kind of watered-down socialist are there out west?

Mr. Laughren: I think they are wrong too. I would say that at least when NDP governments have abolished succession duties they replaced them with progressive taxes. You’ve done the opposite; we in Ontario have the worst of both worlds from this Treasurer. He abolishes succession duties and imposes regressive taxes. That’s a lot different from what NDP governments would do in any province in this country.

Mr. Ashe: There aren’t many more NDP governments than there are Liberal ones.

Mr. Laughren: This Treasurer has given us the most regressive tax system of any province in Canada and, quite frankly, has earned our contempt for that. I mean that.

Hon. F. S. Miller: Without question, that is a badge of honour.

Mr. Laughren: As a Treasurer, he has earned our contempt with this budget he has brought in. I mince no words with him. That is exactly how we feel.

The Treasurer knows that when a tax such as this one, the succession duties, is abolished, those moneys have to be found somewhere else. Guess where the Treasurer finds them. We know, don’t we?

Mr. Nixon: Where? Tell us.

Mr. Laughren: We have been debating some of them tonight: sales taxes, Ontario Health Insurance Plan premiums. Did my friend really not know?

Mr. Nixon: I can guess.

Mr. Laughren: I think he did. From sales taxes, from the tax on cable television to the gasoline tax, the Treasurer found his replacements to make up for the taxes that were lost from the top three per cent. Ordinary working people will derive no benefit whatsoever from the abolishment of this tax. As a matter of fact, they will pay more, because they have to make up for the lost revenues from the abolishment of succession duties.

Perhaps the Treasurer can get up and tell me how the construction worker, the miner, the teacher, the civil servant, the farmer, the small businessman are going to benefit. How is the truly small businessman going to benefit from the abolishment of this tax? Perhaps he can tell us who is going to benefit from the abolishment of this tax. We know who is going to benefit. We know full well.

In 1967, the Ontario committee on taxation had something to say about succession duties. As a matter of fact, they had quite a bit to say about succession duties.

Mr. Nixon: That was a royal commission; it was headed by Lancelot Smith.

Mr. Laughren: Yes, it certainly was; and it had some very good things to say about succession duties. I would like to quote to you, Mr. Speaker, because I know that, with your numerous duties, perhaps you have not had a chance to read all the comments that the Smith committee made on succession duties.

Mr. Nixon: It wasn’t a select committee.

Mr. Laughren: I’m sorry; did I say “select committee”? I didn’t mean a select committee. It was a royal commission. It was a select committee of this Legislature that examined the Smith report.

This is a quotation from the Ontario committee on taxation:

“Wealth taxes cannot be justified in any form at the provincial level by any strict interpretation of the principle of benefits received. Yet there is considerable merit in the point of view that holds that the private accumulation and maintenance of wealth are made possible, in good part, by the actions of government in creating and protecting the economic and social structure within which such assets are amassed. This contribution by government is surely of greater value than the cost of providing the services paid for through taxes. It can be argued that the state, as a silent partner in the accumulation of private fortunes, properly should share on behalf of all citizens in the prosperity of its more affluent members.”

Perhaps the Treasurer wishes to be a bigger partner in the accumulation of wealth but then not make any claims against that accumulation as a partner. Talk about being a silent partner; he is a dumb partner. He is not going to get anything out of his contribution to the partnership.

The report goes on to say:

“Since the strength and growth and indeed the very foundations of our economic system depend upon the willingness and ability of private citizens to accumulate and invest capital, these consequences are held to be anathema. On the other hand, a democratic society such as ours, espousing political equality for all its citizens, cannot permit undue concentration of wealth in the hands of a few. Though differences in wealth will always be with us, extremes of affluence and poverty must be prevented in the interests of a stable society. While other arguments may have been added in the theoretical support of egalitarianism, there is a continuing validity to Plato’s warning that the state should avoid riches and poverty” -- speaking of Plato, in walks my colleague the member for Lakeshore (Mr. Lawlor) -- “ ‘for the one produces luxury and idleness and revolution, the other revolution and meanness and villainy besides.’ A reasonable tax on wealth is one way of ensuring a proper balance between these two objectives, capital accumulation and control of extremes of wealth.”

[9:30]

That sounds most reasonable to most reasonable men because most of us would agree that death taxes, succession duties -- it doesn’t really matter what you call them -- are in fact a tax on wealth. Quoting from the Smith committee:

“Death taxes, if adequately protected by gift taxes, are admirably suited to control the growth in this country of an economically powerful minority whose influence is based upon inherited wealth. By this device the amount of capital that passes from one generation to another can be controlled, an essential safeguard for the basic fabric of a democratic society.

“Moreover, because the tax is not payable until death, this end is achieved with a minimum deterrent to working and saving during a man’s earning and creative life. We realize, however, that the objective of limiting undue accumulations of wealth can be defeated by sophisticated tax planning.”

The Smith committee recognized the validity of this but also put in a proviso that they understood that sophisticated tax planning could avoid a lot of this. They go on:

“From the foregoing discussion of the various forms of wealth taxes we conclude that Ontario should impose a tax on wealth, and this tax should take the form of a death tax.”

I know what the minister is going to say. He is going to say we now have capital gains tax and therefore we can forgo succession duties. What a joke. Is he really making a relationship between capital gains tax and taxes that pass at the time of death of a wealthy person? They are totally different principles and the Treasurer should understand that.

I want to quote further from the Smith report.

“There is no doubt that death duties which are imposed at progressive rates weigh more heavily on the rich than the poor.”

That in itself is reason enough in the Treasurer’s mind to abolish the tax, that in itself is reason enough to abolish the inheritance tax and raise OHIP premiums. It really is wearisome to have to cope with the Treasurer’s persistent drive to make our tax system ever more regressive.

I would like to perhaps anticipate an objection of the Treasurer by quoting further from Smith:

“We have been told that succession duties have a harmful effect on owners of private businesses. It is contended that the tax forces the sale of businesses, often at the most inconvenient and critical times, frequently resulting, it is alleged, in the expatriation of the ownership of Canadian concerns.

“We have also been told that elderly entrepreneurs do not respond to pressures to continue the expansion of their businesses because of the need for consolidation of and the provision of liquidity in theft estates.

“We have been deeply concerned with these arguments since we would seek to avoid any consequences of tax policy that prejudice Canadian ownership of business enterprises within an expanding economy.

“However, not only did no one present to us any conclusive examples of Canadian-owned businesses having been sold to foreign interests because of death duties, but our own researchers were equally fruitless in bringing specific cases to light and in each instance of which we are aware, succession duties were at best a marginal consideration, not the motivating or deciding factor in the sale.”

Mr. Lawlor: That’s right.

Mr. Laughren: A final quote from Smith has to do with the province of Alberta, because I know the Treasurer will dredge up every conceivable excuse to justify this elitist kind of taxation.

Mr. Lawlor: Alberta does more to destroy this country than Quebec.

Mr. Laughren: I quote from Smith:

“Recently the government of Alberta has enacted legislation to refund to the estates of domiciliaries and certain residents the portion of the federal estate tax which is paid over to that province. Saskatchewan has indicated that it may take similar action. There has also been some agitation in Quebec to abandon the succession duties.

“In our opinion it would be improper for Ontario to repeal its death tax. For the reasons we have given we consider the succession duty to be the most appropriate method of taxing wealth in the provincial tax system.” So let us dispose of all the arguments that have to do with why the Treasurer is abolishing succession duties and get right to the heart of it: It is a tax on wealth, and that is what the Treasurer is fundamentally and ideologically opposed to. That is the only reason he is doing it.

Mr. Speaker, lest you think that the Smith committee was expressing views that were radical and not expressed in earlier years, I would like to take you back a few years to some people who expressed similar views; people from -- there are quite a few, as a matter of fact -- John Stuart Mill, with whom I know the Treasurer communicates.

Hon. F. S. Miller: What’s the date of the book? When was it published?

Mr. Laughren: This book was published in 1918.

Mr. Bounsall: The Treasurer had it in first-year English. He took the same course as I did; so I know he had to read it.

Mr. Laughren: Is the minister saying that because John Stuart Mill said it many years ago that it is therefore invalid?

Hon. F. S. Miller: No. I just wanted the date for rebuttal.

Mr. Lawlor: The Treasurer hasn’t had a single new thought since 1918.

Mr. Laughren: I know the Treasurer would like to know what John Stuart Mill would say. Writing in his autobiography, John Stuart Mill said -- and he is talking about himself and his wife: “We look forward to a time when society will no longer be divided into the idle and the industrious; when the rule that they who do not work shall not eat will be applied not to paupers only but impartially to all.” Does the Treasurer know what that means? It means that people who inherit a large amount of wealth can be as idle as people who have no wealth. But we do not talk about them that way. We only talk about people being idle who do not have wealth, and the Treasurer would abolish this wealth tax.

There also was Jeremy Bentham. He was, as my colleague from Lakeshore should be, a renowned jurist --

Mr. Lawlor: I haven’t got time.

Mr. Laughren: -- my colleague who some day will be a renowned jurist.

Mr. Nixon: If he wants to be a renowned jurist, you people ought to take up a collection for him.

Mr. Lawlor: All donations gratefully received.

Mr. Laughren: Jeremy Bentham also dabbled in economics; so the Treasurer should listen to him. What Jeremy Bentham would do is have all inheritances revert to the state, because he could see the evils of inheriting great wealth.

A little later than those fellows, there was the Minnesota Tax Commission. They had this to say, talking about inheritance tax:

“This method of increasing the public revenue is wise, simple and effective.” Think of those three words: “wise, simple and effective.” “Wise, because it does not touch private property during the life of the owner and thus places no burden on business activity. Simple, because the tax is easily ascertained and collected while estates are in a probate court. Effective, because by the application of progressive rates it adds no burden to the poor but permits those who have much to contribute to the government somewhat in proportion to their ability to pay. It invades no natural rights. It violates no maxim of the law. It overleaps no constitutional barriers. It is neither revolutionary nor socialistic.” Well, I will continue anyway. “But it is on the contrary a measure of practical wisdom and social justice and has been truly styled an institution of democracy. Another desirable feature of the inheritance tax is that it cannot be shifted.” It is, I say, to the Treasurer, a tax that is wise, simple and effective. Perhaps that in itself is reason enough for the Treasurer to abolish it.

I would not want the Treasurer to think that I was quoting only from people who have the same background as I. There was a fellow of the Treasurer’s ilk who had something to say about inheritance taxes too. His name was -- is the Treasurer ready for this -- Andrew Carnegie. This is what your friend Andy had to say. He said --

Mr. Deputy Speaker: I hope the honourable member is aware of standing rule 19(d)(4).

Mr. Laughren: No, I am not. Perhaps you could put it to me. Would you do that?

Mr. Deputy Speaker: “In debate, a member shall be called to order by the Speaker if he ... in the opinion of the Speaker, refers at length to debates of the current session, or reads unnecessarily from verbatim reports of the legislative debates or any other document.” So I would just ask the honourable member to refrain from extending that rule.

Mr. Van Horne: It’s the equivalent to wearing argyle socks, Floyd.

Mr. McClellan: That would really take care of ministerial statements, wouldn’t it?

Mr. Van Horne: It is called the Laughren syndrome.

Mr. Laughren: I don’t understand whether the Speaker is making a rule or not. Are you really telling me that I cannot quote from people like Jeremy Bentham and John Stuart Mill and Andrew Carnegie, who have not been in this Legislature for years? Cannot I quote them to substantiate an argument I am making on second reading in a highly principled debate? Is that what you are saying, Mr. Speaker? If you are not, I will carry on with what Mr. Carnegie said.

Mr. Deputy Speaker: Order. I appreciate the question posed by the honourable member. I believe that standing order states that reading from debates or other papers are within order for a short space of time, if they are not too lengthy.

Mr. McClellan: On a point of order, Mr. Speaker, do I take your ruling to mean that from now on we will not have ministerial statements read at the beginning of the House every day?

Mr. Ruston: That doesn’t deserve an answer.

Mr. Deputy Speaker: I was just informing the honourable member of the standing order set out in the legislative standing orders.

Ms. Gigantes: A very short reading.

Mr. Van Horne: A very short member.

Mr. Laughren: I honestly thought it would be making a contribution to debate in the Ontario Legislature to quote from people like John Stuart Mill and Jeremy Bentham, but if you rule otherwise that’s fine, because you live with the ruling.

Mr. McClellan: Whom do you expect to enforce it?

Mr. Laughren: And I find it surprising that no one quote has been at length -- no one quote from any source has been at length.

Mr. Van Horne: Ad nauseam, but not at length.

Mr. Laughren: Mr. Speaker, I hope you will permit me to give two short quotes from Andrew Carnegie. He said: “The almighty dollar bequeathed to children is an almighty curse. No man has a right to handicap his son with such a burden as great wealth.” Well, that’s Andrew Carnegie.

Mr. Nixon: Did your father believe that too?

Ms. Gigantes: Is that wrong, Mr. Speaker? Mr. Laughren: The Treasurer would probably regard that as blasphemy, but that’s what Andrew Carnegie said. Well, Mr. Speaker, we know that there are --

Mr. Lawlor: It’s what the Liberal members of the Smith committee said too. I was on it. It was my baptism of fire. I was burned, I never got over it.

Mr. Laughren: Mr. Speaker, we know there are ideological differences between this party and the government and the official opposition --

Mr. Conway: I don’t believe it for a moment.

Mr. Laughren: -- but we sometimes forget just how profound those differences are. Every now and again a bill like this comes along to jog our memory.

We, as socialists, believe that we have an obligation as legislators to work towards a more egalitarian society. We believe that an egalitarian society can best be achieved in a society that encourages co-operation and sharing. We are opposed to predatory behaviour, whether in competitive practices or in the accumulation of wealth. We think that the accumulation of wealth by a very small minority is dependent upon predatory practices.

It follows then that the passing on of accumulated wealth to succeeding generations can only lead to a society motivated more by meanness than by generosity. That’s how we feel as New Democrats and I would urge the Liberal Party to stand with us in opposing this bill. This is not a bill that should pass through the Legislature of this province. If I have failed to inspire the Liberal Party --

Some hon. members: You have.

Mr. Laughren: If I have failed to inspire you --

Mr. Ruston: You have read too much from that book.

Mr. Martel: What did Bob Nixon say in the last debate on this?

[9:45]

Mr. Samis: There are many Liberals who have failed to inspire them.

Mr. Laughren: Mr. Speaker, if you have a sense, as I do, that I have not inspired the Liberal Party, perhaps I could -- and I know you are going to keep a close eye on me here -- go back a little bit in time to what was said a couple of years ago, well it was 1973 and 1974, when there were amendments to the Succession Duty Act. In 1973 -- I will be very, very brief -- Mr. Breithaupt said -- and I think Mr. Breithaupt in 1973 was the Treasury critic. He said:

“We believe that it is quite reasonable and logical for the province to accept the responsibility and to share in the benefit of taxation of large estates as they pass between generations. We would not like to see that removed, because I think that even though there are a small number of such estates, the benefits which are received are a reasonable expectation of the sharing by the community in the facilities which the community has in fact provided, that has allowed this wealth, at least to a degree, to have been accumulated and developed in the first place.”

That was the position of the Liberal Party in 1973.

Mr. Martel: Oh, they’ve switched again.

Mr. Samis: Even the member for Renfrew North agrees with that.

Mr. Laughren: We move on to the next year in which the Succession Duty Act was amended, which was 1974. I can’t go on without stopping for a moment and paying tribute -- I know I will embarrass him -- to my colleague from Lakeshore who made the definitive statement on inheritance succession duty taxes back in 1973.

Mr. Lawlor: I give up on them now.

Mr. Laughren: It was one of the finest addresses that I have ever read.

Mr. Conway: Give us a paraphrase.

Mr. Laughren: No, no. The Speaker would rule me out of order. I won’t do that to you.

But I would move on to 1974 when there was a further amendment to the Succession Duty Act, and this is none other than the member for Brant-Oxford-Norfolk, Haldimand, Delhi, Caledonia, Hagersville --

Mr. Martel: What did he say? Tell us what he said. He is blushing. Tell us what Bob Nixon said.

Interjections.

Mr. Laughren: I will try and be brief, but he was articulate on that particular day, and this is from page 3335 of Hansard, Monday, June 17, 1974.

Mr. Lawlor: Oh, what a black day that was.

Mr. Nixon: One of the better days in the Legislature.

Mr. Laughren: Mr. Nixon said, “Frankly” -- I am quoting now -- “I support the principle of maintaining succession duties.”

Interjections.

Mr. Acting Speaker: Will the member address the chair, please, rather than the members of his party?

Mr. Nixon: That is right, Mr. Speaker.

Interjections.

Mr. Laughren: I do not want to be accused of taking it out of context, so I want to finish.

Mr. Nixon: I don’t mind.

Mr. Laughren: After he said: “Frankly, I support the principle of maintaining succession duties. And I must admit to you, sir, a certain distinct problem in my own mind: I suppose we can all think of instances when people who had a great influence on us in earlier years, expressed opinions. I can recall sitting around our breakfast table at home in St. George, reading the Globe and Mail, when the estate of the late Harry Oakes was probated. You may recall, sir, that Harry Oakes was a multimillionaire who had done extremely well out of the resources of this province. He had moved to Nassau for tax reasons -- also I understand the climate is quite pleasant down there -- and he had moved most of his assets with him. Though we shouldn’t forget the fact that he had left certain emoluments to the province, like the Harry Oakes garden in Niagara Falls and certain other things, he really took most of his assets with him. But some of them were not transportable, and upon his, what you would call I suppose untimely death -- which was never solved” -- I didn’t know you could solve deaths, but anyway -- “the province of Ontario saw fit to tax $8 million in succession duties on his estate. I remember expressing to my father, the former member for Brant, some surprise at the size of that tax bite, and my sainted father” -- I don’t dare add to this -- “saying, ‘You shouldn’t be so worried; it should be 10 times that big.’”

Interjections.

Mr. Laughren: The member goes on, and I still don’t want to take him out of context:

“I’ve always felt sort of as the aftermath of his opinion that succession duties have been historically a basic and important means to redistribute wealth, wealth that was garnered by hard work, perspicacity, intelligence and undoubtedly good luck. The succeeding generations, while they have always had access normally during the lifetime of the patron of the family to good education and certain other assets, I have always felt --”

Mr. Nixon: Is this still me?

Mr. Laughren: “ -- should not be so unduly favoured as to be able to take the estate without decrease by succession duties.”

I will not go on. But finally, he says, after some interjections, “I can tell you, Mr. Speaker, that I am glad the government has renounced, at least for the time being, its policy of attempting to become a third-rate tax haven of the type that would attract the multimillionaires of this part of the hemisphere to retirement here. I don’t think, really, we could do it; our climate is better than Alberta’s, but not as good as Nassau’s.”

Mr. Martel: Where are those people tonight?

Mr. Lawlor: Shades of E. P. Taylor.

Mr. Conway: We will call it the Harry Oakes election.

Mr. Laughren: The member for Renfrew North refers to an election. We understand in this caucus that when we vote against a bill like this it is putting certain things on the line. I can think of no better principle on which to put it on the line than succession duties or their abolishment.

Mr. Conway: So you would lose another 12 inches overnight.

Mr. Laughren: This bill is important. It has the indelible Frank Miller stamp on it.

Mr. Ruston: The three-dollar election.

Mr. Laughren: He has staked out his territory on the side of the privileged in the province as no other Ontario Treasurer has done in recent memory. If the Liberals support this bill, they will in effect be ordering the Liberal Party of Ontario to draw their wagons in a circle and fire inwards.

Mr. Nixon: Mr. Speaker, I want to congratulate the member for Nickel Belt on his excellent address. The fact that he quoted John Stuart Mill and myself in one breath indicates he has tremendously good judgement when he selects the philosophical basis for his remarks. I do, however, regret the absence of the member for Beaches-Woodbine (Ms. Bryden) from this debate, because her contributions previously as Treasury critic were certainly welcome. There was a lightness, a humour, a sensitivity in her remarks that unfortunately we miss at the present time. But I suppose you have got to move with the times and Environment’s gain is our loss in this debate.

I really appreciate the honourable member quoting me. I was going to tell the same breakfast-table story tonight about my sainted father. I can recall very clearly that he went on, after saying that the tax should be $80 million, not $8 million, and he said -- naturally -- one of the things that Liberals must guard against at all costs is double taxation. That’s the way I recall his words. I will check with my mother, but that’s the way I remember it.

Mr. Martel: Boy is that a double flip.

Ms. Gigantes: Shameless.

Mr. Nixon: One of the things the NDP forgets, even when they quote Commissioner Lancelot Smith, is that at the same time there was a federal royal commissioner, a chap named Carter. He made a comment that appealed to me then, and I regret that our federal cousins have not really enacted his principle in our tax laws at that level. That is, that a buck is a buck. If you inherit a buck, you pay the income tax on it. This is sometimes construed as a capital gains, and that is precisely the way that capital gains taxes are paid.

I have a case in my constituency now that was brought to my attention by some good solid dirt farmers in the constituency of Brant-Oxford-Norfolk. In this instance, these people are really the salt of the earth. They are rather rough diamonds in many respects. Their boots are dirty. The member for Nickel Belt wouldn’t understand precisely what I mean, being a northerner, basking on the shores of the lakes and swatting mosquitoes.

Mr. Martel: With a sledgehammer.

Mr. Nixon: Under these circumstances, the property was owned by an older uncle. Through God’s good grace, the gentleman went on until he was about 96 years of age. When he died an untimely and early death, the property went to his heirs, who, as I say, tend cattle, clean out stables and work in the fields. They found that because of the extremely high cost of land in the area the capital gain on a very small holding of about 85 acres was evaluated at something like $160,000, and $80,000 on the tax base was added to the income of his hardworking heirs.

Even without the succession duties that we’re abolishing tonight, it really meant the sale of that property. I think the capital gains tax is a heavy tax indeed. It certainly was part of the conception of the development by Edgar Benson, whom we all respect in the House --

Mr. Mattel: What year was that?

Hon. F. S. Miller: In 1971.

Mr. Nixon: -- and who was Minister of Finance for Canada when the tax was introduced, that the provinces would share. There was an agreement across the board, in fact across Canada, as I recall, that succession duties at the provincial level would be phased out, which certainly accounts for the fact that we were prepared to support them during that phase. But now it is time that they are abolished. We in this party feel that double taxation is something that cannot and should not be supported.

There have been many good examples actually of other governments that have gone this way. You may have noticed, Mr. Speaker, by way of interjection, that the government of Saskatchewan, headed by the chief guru of Canadian socialism, Mr. Blakeney, found that it was good judgement on its part to follow this agreement that had been entered into some time ago. Death taxes, as the honourable member calls them, have been repealed in that province as well.

The province of Quebec has retained them. And it may very well be that they will retain them as a basis for some kind of fancy finance --

Ms. Gigantes: They have a progressive income tax there.

Mr. Nixon: -- during the period when they expect a certain degree of transition. The Treasurer, however, might be interested to know that in hard times in this province -- hard times were Liberal times, as he may recall --

Mr. Gregory: They still are.

Mr. Nixon: -- and I say it before he does -- something like 45 years ago when there was not much money coming in from the income tax or any other source, the Treasurer of the day brought his budget into balance -- a word that this Treasurer doesn’t use very often, except in his wildest projections. He brought the budget of the province into balance by means of succession duties. So it has had an honourable base in the financing of the programs of this province in times when the total budget was considerably less than it is now. But times change.

I felt the federal royal commissioner, Mr. Carter, in making his recommendation, made a blueprint that was followed at least in part by the government of Canada and is finally being followed by the government of this province. It’s pretty hard to be a tax haven when we’re the only province, other than Quebec, maintaining succession duties. The course of events has made the remarks my honourable friend quoted so effectively rather academic at this stage.

There was a time when Alberta was the only province that had abolished these special taxes, but now we are all following suit. In my view, it’s about time and it shows good judgement and we support it with some alacrity.

[10:00]

Mr. Bounsall: I will be very brief because the members of the House are all concerned that as many votes as possible take place tonight. We do, indeed, wish to vote on this bill.

We, in our party, want very much to vote against this bill. I’d like to tell the House that our feelings are the same as were articulated by the member for Nickel Belt this morning in our caucus. The prospect of voting against this bill has not inspired as great an ideological orgasm since the Waffle left. That’s the way we, in this party, feel about the abolition of succession duties.

It’s a fundamental taxation that must take place when the wealth of one generation passes to another, in order that equalization and equality of opportunity may take place in this province as well as, from a governmental level, having funds from a very admirable and socially acceptable source with which to finance its programs. The fact that we’re abolishing a tax that applies to the wealthiest three percent in this province says exactly where this government stands in terms of its attitude towards the wealthy and the rest of the taxpayers in this province.

It is interesting to realize that during the course of the 12 months this budget is to run, the money we are not going to receive in revenue, estimated by the Treasurer to be about $50 million, is just equal to the amount of extra moneys that have to be raised by the increase in the OHIP premiums. That will not be lost on the taxpayers of Ontario, when the time comes to talk about this on the hustings which, as the member for Nickel Belt has indicated, we most certainly will.

Going back over the history of succession duties and succession duty taxes, I certainly won’t be as informative, nor as interesting or beguiling as the member for Nickel Belt in the entirety of his remarks. However, let me say that it was my understanding, from a federal-provincial conference, that the federal government had finally decided to get entirely out of succession duties.

There was an agreement with the provinces that taxes were to be shared in a more equitable way between the federal and the provincial governments; that the federal government would opt out of the field entirely so the provincial governments solely could collect what was considered to be a very legitimate source of fairly large revenue for the province. I believe that took place in 1972, so, it has taken the province of Ontario a short seven years to abandon it completely when it was given into its own jurisdiction and had been thought to be, by those concerned at that federal-provincial conference, a field of revenue which the provincial government would, and should, entirely occupy.

I won’t go on any further than that. I oppose the abolition of succession duties most strongly. There isn’t a member of this caucus who wouldn’t reiterate every word and sentiment of our financial critic, the member for Nickel Belt, in his remarks with respect to the succession duty and how much we are opposed to its abolition. I would think, in months and years to come, that people in this Legislature and across Ontario would look back to tonight and mark this as a dark evening, an evening in which succession duties in this province were formally abolished. It will remain dark until we have power, when we will certainly reinstitute them.

Mr. Ruston: I am happy to participate in this debate. I was interested in what the last speaker said about how he was happy to have this vote on record tonight and how important he thought it would be. But I would just say to him that abolishing succession duties was in my opinion a wise decision. I am in favour of it completely, and I will tell you why, Mr. Speaker.

With succession duties plus capital gains tax, if a family had acquired a farm back in 1850 and farmed it every day from that day until now, it would have to pay for that farm in duties, if we keep on the way we are going. I happen to know someone close to my own place who, when the family farm was turned over to one of the relatives about 10 or 15 years ago, had to borrow $15,000 to pay off the succession duties on it.

A neighbour of mine passed away not long ago. The problem is the evaluators from the capital gains and succession duties people came in and put a value of $390,000 on this farm. That farm is not worth $150,000 to grow corn and soya beans on, yet they put a price of $390,000 on it. Now they have to sell it and get off the land if these taxes are kept on; they have no alternative.

I just wonder if it is NDP philosophy that they want the government to own all the land. I know some of them do; I could mention one or two but I won’t embarrass them. They don’t want even to own their house and think the government should own the property their house is on. But I am telling you, Mr. Speaker, if that is what they want I won’t worry about the vote tonight. I will go up and down every concession in Essex North and let the member from the NDP do the same thing and see where he will end up in the election.

Mr. Charlton: I will be very brief. I think most of the points on this bill have been made reasonably well by the member for Nickel Belt --

Mr. Nixon: “Reasonably well?” That’s faint praise.

Mr. Bounsall: Admirably well.

Mr. Charlton: -- but I too want to rise in opposition to this bill and just take a moment to point out a number of things to the Treasurer so he is very clear in his mind where this opposition comes from.

In relation to this bill the Treasurer said, on a number of occasions, that the $28 million and the prospective $50 million or $60 million in future years that the removal of this tax is going to cost the province is not a lot to get upset about. But we have just gone through a whole series of tax bills; we have listened to the Minister of Revenue tell us repeatedly, on amendments which I have moved to reduce consumer taxes, that he has great sympathy for the amendment but we have to get the revenue to run this province from somewhere. We heard that on gas tax; we heard that on motor vehicle fuel tax; we heard that on land transfer tax; we heard that on retail sales tax; we heard that right down the line this afternoon, Mr. Speaker.

The Minister of Revenue is sitting right behind the Treasurer just now. He has come back into the House, and perhaps the Treasurer should discuss with him the sympathy he felt for our amendments, but his concern over where the revenue to replace those amendments would have come from. This bill removes the succession duties tax, which only affects the top three per cent of society in Ontario, part of where the revenue to replace those consumer taxes -- those taxes that hit right at the very bottom people in this province financially -- could have come from.

This is one of the areas that could have been used to protect those people already under excessive pressure from property taxes and every other indirect tax that has been slapped on them in this province.

If the Treasurer had not taken this action in the budget and here today to remove the succession duties tax, at least in part the other tax increases that are being imposed this year could have been avoided.

Mr. Lawlor: May I just speak for a moment on this matter? Will you permit me, Mr. Speaker?

Mr. Speaker: Yes.

Mr. Lawlor: Thank you. I think it should be well understood that capital gains taxation is not identical with estate taxes or death taxes or wealth tax as such. There are large areas in which they overlap. If they overlap, I will concede to the member, who has certainly reversed himself tonight and turned himself inside out on the particular issue, then one ought to be played over by way of one deduction against another.

Surely Conservatives agree with us, whatever the Liberals may do on this kind of issue, with a sense of society that I think is shared to some degree, that when pools of wealth pass from generation to generation, nothing is more invidious or detrimental to a country. If democracy is to mean anything, it must mean something in economic terms too. In the old days, a fellow by the name of Deacon over here used to argue that it was effeminate. It weakens the fibre of the nation to permit wealthy fathers to visit great wealth upon their children.

According to the government’s own free-enterprise philosophy, you have to make things on your own. You have to have the gumption, the forthrightness and the aggressiveness to go out and make it on your own, Mr. Speaker. But what happens? The government confirms just the opposite every damn time. It says let the parent keep the child in sloth and in various forms of jet-setting. Let him live in Monaco. The government runs just directly counter on a moral basis at least to its whole announced philosophy.

We’ve argued this before in this House. I wasn’t going to bother again tonight as I think it’s useless to point it out to the government. However, I put it to the minister that there are large areas where a wealth tax is perfectly valid and which would not attract capital gains. Lawyers exist in order to set up trust agreements and to set up various devices in order to manipulate this whole thing. We don’t see the rich getting any poorer because of capital gains taxation.

But, if the government had a proper wealth tax on top or a proper wealth tax to move into those areas of opening in between where the capital gains operates, then we might some day just hope to see a more egalitarian society than what we’re going to get now.

Hon. F. S. Miller: I thought we had to be through at 10:15, Mr. Speaker. I have to reply.

Mr. Germa: I’m sure the Treasurer can wait for two more minutes to hear from someone who has a view on this class legislation, and this is class legislation if I ever saw it. We know what class the Treasurer is supporting in this. He is supporting the wealthy class.

Many of us have had parents who have deceased and have inherited our parents’ wealth. In my case, it was a hard hat, a pair of safety boots and a lunch bucket. That’s where most of us are in this society.

What the Treasurer is talking to here is three per cent of society, that wealthy group in a society which has accumulated wealth. There is no better time to distribute the wealth than when they are deceased. If any tax system is going to work, it has to indicate that there is equity in the system. There is no better time to impose equity in the system than when a person has deceased. For that reason I would choose to vote against this bill.

[10: 15]

Hon. F. S. Miller: Every so often we do get a bill which clearly differentiates the socialist from other people in the world. I am just delighted therefore to argue this on the merits of the case the member put forward tonight. I truly believe he has just got a mixed-up view as to what wealth does in this world. He truly does believe that if you take away from somebody, you somehow make somebody else richer. That’s just where he is wrong, in his total approach to the whole issue. The removal of wealth from a few does not make others better off.

We already have the capital gains tax. It has been enumerated here. In fact, I would go so far as to say the capital gains tax probably should be indexed, because currently the capital gains tax truly is a tax on capital, not just on gain. I think one needs to look at that issue before too long or else we are going to be taxing the original asset -- not only the change in it due to the rate of inflation these days.

Many of the estates that are subject to this tax really are fixed. They are the land the members talked about. They aren’t dollars. They are assets that have a value, sometimes far in excess of their income-earning capacity and therefore we have caused innumerable hardships to working-class people. He talks about inheriting a hard hat and a pair of boots. I didn’t even inherit that. I inherited the debts of a father and I still believe in this kind of approach. I believe it’s the only kind of thing that gives all of us the stimulus to go forward and create wealth in an economy which is shared with those less fortunate people through income tax, capital tax, other taxes we have.

All the quotations he had were pre-1971. That’s why I asked him the question about the precapital gains tax. They were all made at a time when this was a fair source of taxation because we didn’t have the alternatives. The Income Tax Act changed in 1971-72 and brought in a more equitable means of taxation. The only people profiting from the great bulk of the estates in this province were lawyers. There was absolutely no need to allow them to profit from that taxation. The only letters of objection I got were from lawyers who said it was a big part of their caseload. Those are the people who weren’t that happy with my change.

So I have to say I am delighted to bring in this act. I am proud of this act and I would be glad to meet the member on the hustings any time with this act.

Mr. Speaker: Order. The motion is for second reading of Bill 47. Shall the motion carry?

All those in favour of the motion will please say “aye.”

All those opposed will please say “nay.”

In my opinion, the ayes have it.

Normally, we would call in the members but I understand that when the House was in committee of the whole they had agreed to vote on stacked amendments at this time. What is the pleasure and the wish of the House?

Hon. Mr. Welch: Mr. Speaker, it certainly was the understanding that at 10:15 we were going to clear up the revenue bills. Perhaps we could come to some agreement that the same bell could be used to clear the second reading of this bill and then do the work in committee. Could we agree to a 10-minute bell for that purpose?

Mr. Speaker: Is there unanimous agreement? Call in the members.

The House divided on Hon. F. S. Miller’s motion for second reading of Bill 47, which was agreed to on the following vote:

Ayes

Ashe; Auld; Belanger; Bennett; Bernier; Birch; Campbell; Conway; Cunningham; Cureatz; Drea; Eakins; Eaton; Elgie; Epp; Gaunt; Gregory; Grossman; Haggerty; Havrot; Henderson; Hennessy; Hodgson.

Johnson, J.; Kennedy; Kerr; Kerrio; Lane; Maeck; Mancini; McCaffrey; McCague; McGuigan; McKessock; McMurtry; McNeil; Miller, F. S.; Miller, G. I.; Newman, B.; Newman, W.; Nixon; Norton.

Parrott; Peterson; Ramsay; Riddell; Rotenberg; Rowe; Roy; Ruston; Scrivener; Snow; Stephenson; Sterling; Taylor, G.; Timbrell; Turner; Van Horne; Villeneuve; Walker; Watson; Welch; Williams; Wiseman; Weston.

Nays

Bounsall; Bryden; Charlton; Cooke; Davidson, M.; Germa; Gigantes; Isaacs; Johnston, R. F.; Laughren; Lawlor; Lupusella; MacDonald; Mackenzie; Makarchuk; Martel; McClellan; Philip; Semis; Swart; Warner; Wildman; Ziemba.

Ayes 65; nays 23.

Third reading also agreed to on motion. House in committee of the whole.

LAND TRANSFER TAX AMENDMENT ACT (CONCLUDED)

Resumption of consideration of Bill 57, An Act to amend the Land Transfer Tax Act, 1974.

On section 1:

The committee divided on Mr. Charlton’s amendment to section 1, which was negatived on the following vote:

Ayes 23; nays 65.

Section 1 agreed to.

On section 2:

The committee divided on Mr. Charlton’s amendment to section 2, which was negatived on the same vote.

Section 2 agreed to. Bill 57 reported.

RETAIL SALES TAX AMENDMENT ACT (CONCLUDED)

Resumption of consideration of Bill 58, An Act to amend the Retail Sales Tax Act.

On section 1:

The committee divided on Mr. Charlton’s amendment to section 1 of the bill which was negatived on the same vote.

Section 1 agreed to.

Bill 58 reported.

CORPORATIONS TAX AMENDMENT ACT (CONCLUDED)

Resumption of consideration of Bill 59, An Act to amend the Corporations Tax Act, 1972.

On section 11:

The committee divided on the motion that section 11 stand as part of the bill, which was agreed to on the same vote reversed.

Bill 59, as amended, reported.

On motion by Hon. Mr. Welch, the committee of the whole House reported two bills without amendment and one bill with amendment.

THIRD READINGS MOTOR VEHICLE FUEL TAX AMENDMENT ACT

Hon. Mr. Maeck moved third reading of Bill 54, An Act to amend the Motor Vehicle Fuel Tax Act, 1972.

Mr. Nixon: Mr. Speaker, on a point of order. Surely, sir, you will have noticed that the time for adjournment has long since passed and we’re doing business that might very well be done next Tuesday.

Mr. Speaker: It is my understanding there was unanimous agreement for second reading of Bill 47 and unanimous agreement to hold the stacked votes on the bills in committee. It is my understanding there is no agreement to go beyond that.

Hon. Mr. Welch: Are we being denied unanimous agreement to do four third readings now?

Mr. Nixon: Does the minister want us to do four third readings at this time of night?

Hon. Mr. Welch: Yes.

Mr. Nixon: What’s in it for us?

Hon. Mr. Welch: Nothing.

Mr. Speaker: Do we have unanimous agreement?

Agreed.

Mr. Nixon: As long as you don’t tax my estate.

The following bills were given third reading on motion:

Bill 54, An Act to amend the Motor Vehicle Fuel Tax Act, 1972.

Bill 57, An Act to amend the Land Transfer Tax Act, 1974.

Bill 58, An Act to amend the Retail Sales Tax Act.

Bill 59, An Act to amend the Corporations Tax Act, 1972.

The House adjourned at 10:40 p.m.