Legislative Assembly of Ontario

The House met at 2 p.m.

Prayers.

STATEMENTS BY THE MINISTRY

MISSISSAUGA TRAIN FIRE

Hon. Mr. McMurtry: Mr. Speaker, I rise on behalf of this government and, I know, every member of this Legislature to say thank you to the residents of Mississauga and all those who played supportive roles during the events of last week.

Courage, forbearance, grace and compassion, these and a host of other words can be used to describe those involved in the largest evacuation in our country’s history. With the eyes of the world on Mississauga last week, the actions of those people did the rest of us proud. All through that hectic week we received some incredulous phone calls from officials in other countries questioning how an evacuation of 240,000 people could proceed so well with so few incidents.

There were those prior to the evacuation who would have said it was impossible. But those residents, aided by courageous police and firemen, the Canadian Red Cross, St. John Ambulance, the Salvation Army, Boy Scouts, Girl Guides, humane societies, many other organizations and a vast army of volunteers, did it.

These people have written a new, and for a change, inspiring chapter in the melancholy history of disasters. I think it is also important to note, with many parts of the world in chaos and with some degree of divisiveness here at home, the residents of Mississauga have taught us that we as Canadians can surmount any difficulty when we pull together in a common cause. They have taught us what we can accomplish with compassion and plain, old-fashioned good neighbourliness.

The residents of Mississauga, Canada’s ninth largest city, are a typical cross-section of people from all walks of life who make up the population of Canada. To the pessimists across this land I say, “Look to the people of Mississauga and those who helped them to see what we can accomplish in the face of adversity.”

As for the accident itself, I want to assure the members of the Legislature, the residents of Mississauga and the other citizens of our province a full and complete investigation is under way and has been under way since the outset. As a government, we are determined to ensure such a potential catastrophe and large-scale inconvenience to our citizens does not happen again. As the investigation proceeds, we will be keeping the Legislature and the public informed of our findings.

At this point I had hoped to read into the record a list of the organizations, companies and other groups that played such a critical role in supporting local and provincial officials as they coped with the events of last week. That list is extensive and is still being compiled by Mississauga officials. As one who saw at first hand the efforts put out by so many, I can only repeat my thanks to all of them involved in the enormity of that effort.

In the gallery, I would like to commend to this House four people, representatives of all who played crucial and exemplary roles on behalf of the citizens of Mississauga and of all Ontario last week. One of them sprained her ankle during the course of the week, but still carried on as an inspiration to her citizens.

Another made the initial decision to evacuate. His coolness under an immense amount of pressure made a tremendous personal impression on everyone.

The third heads the Mississauga fire department. Words really are inadequate to describe the courage and dedication of those in the front line of this particular battle. At this time certainly our thoughts and our prayers go out to firefighter John Engel in the Queensway Hospital. We all wish his recovery. He is not forgotten.

The fourth is from the Canadian Red Cross, representing all the volunteers and agencies. One has only to ask any policeman or fireman what those volunteers meant to the operation and the evacuees.

Let this House salute Mississauga Mayor Hazel McCallion, Peel Regional Police Chief Douglas Burrows, Chief Gordon Bentley of the Mississauga fire department and Brigadier-General James F. Westhead of the Canadian Red Cross.

Applause.

Hon. Mr. Gregory: On a point of privilege, if I may for a moment, I would like to thank the Solicitor General for his kind remarks in regard to the people of Mississauga. I certainly would like to share in his remarks in giving credit to the four people sitting in the gallery. As a representative of that area, it makes one very proud to have them here after that having happened and to be able to express to them our good wishes and our congratulations. It is a pleasure for me to do so.

Mr. Sargent: I think this House should express its thanks to the Solicitor General too.

Mr. Kennedy: I too would identify myself with the tributes that have been paid in recognizing the service and duty, I think it can be fairly stated, above and beyond the normal call.

On reflection, I think we have a spirit not only of that recognition but of thankfulness that there were no casualties other than those the Attorney General mentioned, and we wish John Engel speedy recovery.

I add my tribute to Mayor McCallion, Chief of Police Doug Burrows, Fire Chief Cord Bentley, and of course Brigadier-General Westhead who represents the Red Cross, and to all those other volunteer agencies the Attorney General has referred to who will later be recognized.

Mr. Cassidy: I think the representatives of Mississauga who are here should know that for many years to come their work and the work of thousands of other people working with them or for them as volunteers in the evacuation and in the emergency in Mississauga will be studied and seen as a model throughout this continent and, as a matter of fact, throughout the world.

I want to join with other tributes that have been paid to the work all the people of Mississauga and the authorities of Mississauga carried out in assuring the emergency was handled without any loss of life.

Mr. T. P. Reid: Mr. Speaker, on behalf of the Liberal Party, in this case, we would like to associate ourselves with those remarks made by the Solicitor General. I would say the people who have been recognized on an individual basis in the gallery today certainly showed true grit through this potentially very disastrous situation.

We want also to commend publicly the Solicitor General for the fine job he did under very trying circumstances.

Perhaps, Mr. Speaker, it wouldn’t be remiss if we also, because we do this even more rarely than commending the Solicitor General, commend the press for the most responsible job I believe they did in covering this. Of course, we all thank God the disaster wasn’t any more serious than it in fact was.

ORAL QUESTIONS

MISSISSAUGA TRAIN FIRE

Mr. T. P. Reid: I have a question relating to the Mississauga problem. Can the Attorney General tell us in the House this afternoon whether he has advised either Mississauga or the residents of that area on how to approach the liabilities, the costs for what happened in this disaster? Could he also tell us whether the province of Ontario intends to sue Canadian Pacific for the costs involved, the extra OPP, the ambulance service and all the associated provincial costs related to this?

Hon. Mr. McMurtry: Mr. Speaker, so far as the cost to the government of Ontario is concerned for the OPP, ambulance, and Ministry of Health, which come immediately to mind, I have instructed the law officers of the crown to meet immediately to determine the appropriate action that might be commenced. Of course I think it is too early to state who might be sued in these circumstances, but certainly the odd name comes to mind. We will certainly pursue the appropriate legal avenues in this respect. I expect to have more to report back to the House on this in the relatively near future.

In so far as the citizens of Mississauga are concerned, I have instructed my law officers to render whatever assistance might again be appropriate to the solicitors employed by the city of Mississauga. Furthermore, the mayor of Mississauga and I have discussed what assistance might be given to individual citizens who have losses, either through their businesses or personally.

[2:15J

We have discussed with some of the Mississauga solicitors some vehicle which might provide citizens with helpful legal advice initially as to what they should consider, what they should contemplate, in so far as looking at reimbursement in relation to their losses is concerned. I understand there is a solicitor who is working on the possibility, for example, of establishing legal aid clinics for this initial advice.

Obviously, each citizen who has any significant loss may wish to consult his or her own solicitor as to what might be the most effective method to recover out-of-pocket expenses or any other loss but, certainly, we were addressing this question over the weekend and will continue to address it in the days ahead.

Mr. T. P. Reid: Supplementary: Would the Attorney General perhaps answer a somewhat philosophical question? Would he not agree that the province should not get into compensating Mississauga for the loss and the over-budgetary expenses for this disaster, but that compensation for those funds should come from those who caused the accident -- if you want them to remain nameless at the moment -- or are responsible for it, and not from the taxpayers’ dollars?

Hon. Mr. McMurtry: I agree entirely with that.

Mr. Kennedy: Mr. Speaker, the inquiry is to be made by the Canadian Transport Commission, a federal agency. In view of the fact that there are four levels of responsibility in an incident such as this -- federal, provincial, regional and municipal -- could the minister enlighten the House as to the liaison that might take place or the role the province will play in this inquiry? Are we to be a partner in this or will the province be giving testimony? Could he enlighten us on that, sir?

Hon. Mr. McMurtry: Yes, I will attempt to do that. The Canadian Transport Commission has announced the commencement of an inquiry, I think on December 4. I am not sure of the state of that inquiry at this time because I had a discussion about this with the federal Minister of Transport at the end of last week, the Honourable Donald Mazankowski, and indicated to him that I felt there should be a much broader inquiry than the type that would be contemplated by the legislation that requires the Canadian Transport Commission to have its own inquiry. The federal Minister of Transport certainly indicated his agreement with that and the federal government is presently considering the nature of the inquiry that should be held.

The federal minister has assured me that no decision will be made in relation to that broader inquiry until the province of Ontario has had an opportunity to make representations with respect to the scope of the inquiry, the terms of reference, of course, and, indeed, who is going to conduct it. I have also been assured the city of Mississauga would be consulted before any final decision is made and I have given the mayor of Mississauga my personal assurance I will do everything within my power to see that she and her colleagues are consulted.

I expect to be meeting with the federal Minister of Transport within the next few days, after meeting with my own colleagues in the provincial government, to discuss the details of this inquiry. We certainly don’t want to drag our feet as far as the commencement of the inquiry is concerned; on the other hand, we want to be assured that the inquiry is structured properly and has the appropriate terms of reference.

Mr. T. P. Reid: Supplementary, Mr. Speaker: Has the Attorney General or any of his officials had discussions with Canadian Pacific, and have they at any point indicated acceptance of any liability for the accident, one way or the other?

Hon. Mr. McMurtry: No, they have not. The furthest they have gone at the present time is to express a willingness to make some gratuitous, voluntary payments to assist citizens who can establish losses. Obviously, I hesitate to offer legal advice beyond my mandate as Attorney General, but it seems to me that CP will have some difficulty in convincing me and anyone else it doesn’t have to share a major portion of the liability.

Mr. Warner: Supplementary, Mr. Speaker: We should conclude from the answer given by the Attorney General that he is advising people not to sign any waiver form when they are reimbursed for “reasonable expenses.” Is that correct?

Hon. Mr. McMurtry: Again, my mandate does not go so far as to advise the individual citizen, but I think I can say on this occasion for any citizen to execute or sign a total release of all his or her claims before becoming aware of what the claims are and what his or her rights are obviously would be very unwise.

I am trying to get hold of a copy of the form CP apparently is using, to determine whether or not it represents simply an acknowledgement of payment for some out-of-pocket expenses or whether it purports to be a general and total release of all claims. Obviously citizens would be unwise to execute any such total release until they are absolutely confident as to the extent of their loss and the extent of their individual legal rights.

Mr. Peterson: I want to compliment the member for Scarborough-Ellesmere. It was an excellent supplementary and very much what I wanted to ask the Attorney General.

It seems to me the question is quite a serious one of people signing waivers under misconceptions about their legal rights I am wondering whether the Attorney General would enter into discussions immediately with CP and any other possibly culpable parties to make sure they do not present those types of waiver forms for release. Filling that, if they do continue to use that, would he bring his good offices to bear to do something about that so that people are fully apprised of all their legal rights before they sign any kind of waiver?

Hon. Mr. McMurtry: I have made my views known already to CP but I will again make them known, that they should not invite anybody to sign a final release until they are totally satisfied the individual is aware of the nature of his loss and his rights.

I cannot prevent individual citizens who are satisfied they know exactly what their losses are and want to settle their claims. It would obviously be an improper interference with their rights for me to say: “Look, you know what your losses are and you want to get paid immediately. Far be it from me to say that in those circumstances you shouldn’t sign a release.” But certainly, to CP and any others who may be involved, I will not hesitate to suggest to them their responsibilities as outlined by the member opposite.

GAS AND OIL PRICES

Mr. T. P. Reid: I have a question for the Premier in relation to his upcoming dinner on Thursday night. The Premier is scheduled to introduce Mr. Clark at the Conservative Party fund-raising dinner in Toronto this week.

An hon. member: Wednesday.

Mr. T. P. Reid: Wednesday, is it? Perhaps Joe will show up on Thursday.

Can the Premier tell us whether he intends to heap the same type of praise on Mr. Clark now, or on Wednesday night as he did during the election campaign in spite of the recent discussions on the oil prices?

Hon. Mr. Davis: It is Wednesday night, and all members opposite are welcome if they’re willing to pay the modest honorarium that is requested, for which I assume there is some reasonable tax deduction. Thursday night I think I’m working for the University of Ottawa -- I’m not sure what I’m up to -- but Wednesday night is the fund-raising dinner for the Prime Minister.

Mr. Martel:. You’re going to try to kick a football.

Hon. Mr. Davis: I can only answer the member by saying I intend to be there. I’m never sure what my introductory remarks may be, but I can assure the honourable member, if he wants to check on them, the best way is to be there to hear whatever it is I may decide to say.

I know the member opposite might feel I shouldn’t attend that dinner, as he, and his leader avoided the Liberal Party of Canada’s Ontario branch annual meeting over the weekend. I assume if the Liberal leader was there -- his absence was noted certainly in the press.

Interjections.

Hon. Mr. Davis: No, no, I know he was there. I guess the former Prime Minister of Canada said, “Member for Hamilton West where were you when I needed you in May?”

Mr. T. P. Reid: Supplementary: Since the Premier was there when Joe Clark needed him in May and look what he’s done to him in Ontario, doesn’t the Premier consider -- since he won’t come out publicly and say it -- that if he boycotted that dinner Wednesday night he might tell them the Premier, the Conservative Party and the people of Ontario are just a little upset with the way he’s been handling the negotiations on the oil costs and what it’s going to do to this province?

Hon. Mr. Davis: I think we made our position very clear on oil pricing, distribution of money, et cetera, a week ago today. The present government is faced with many difficult problems -- this being one of them -- which are the direct legacy of an incompetent government that preceded it.

Mr. Cassidy: Mr. Speaker, since I have none of these problems and intend to open the New Democratic Party’s federal convention in this city on Thursday morning with no hesitation at all in endorsing the federal leadership of Ed Broadbent, I would like to ask the Premier what the voters of Ontario are to read into his presence at this dinner on Wednesday evening, given all the indications that the Premier intends to spend the next provincial election campaign fighting against Joe Clark just as cheerfully as he used to fight federal and provincial elections campaigning against Pierre Trudeau?

Hon. Mr. Davis: Mr. Speaker, I’m not sure what the leader of the New Democratic Party may read into my attendance there Wednesday evening other than to have what probably will be a very good meal. He’s never been reluctant to accept a good meal, I’ve noticed.

Interjections.

Hon. Mr. Davis: I didn’t say anything about it being free.

Mr. Makarchuk: For 150 bucks it ought to be good.

Hon. Mr. Davis: I can’t comment on the price structure. It’s modest by some standards. It’s certainly high for those of us who come from Brampton; we’re not used to those higher figures.

The leader of the New Democratic Party is free to read into my attendance there anything beyond what would be normal. But in response to the general question, I am attending. Unlike the Liberal Party of Ontario, which is directly associated with the Liberal Party of Canada, I’ve never sensed that one should boycott a particular meeting where one night still have some message to take to the Prime Minister of Canada, or that one should neglect that opportunity. That’s one reason we intend to be there.

Mr. Conway: Mr. Speaker, recognizing that the Premier has rejected the proposition put by my colleague from Rainy River, and recognizing that the weekend seemed to indicate the Prime Minister’s position on the oil pricing agreement is increasingly fluid, what supplementary action does this government intend to take with respect to driving home once again its message to the Prime Minister of Canada in this intervening period until such time as an agreement is struck? What specific supplementary initiative does this government intend to take in these intervening days?

[2:30]

Hon. Mr. Davis: The views of the government of Ontario are still there before the government of Canada and the other Premiers of this country. We don’t propose any new suggestions. I think they are there in essence and are very clearly understood. The process now is very simply for the government of Canada to make a decision, either unilaterally or in conjunction with the producing provinces.

I understand the member for Renfrew North was at the meetings over the weekend. I am sure he shares the point of view expressed by his national leader and former Prime Minister of Canada about the position taken by the Prime Minister or the Premier of this province, arid he would totally agree with what he said.

MISSISSAUGA TRAIN FIRE

Mr. Cassidy: I have a question for the Attorney General arising out of the Canadian Pacific Limited waiver forms now being requested in Mississauga.

Is the Attorney General aware CP has chosen a very restrictive form of waiver, which asks people receiving funds for out-of-pocket expenses to say explicitly, “I release all claims against Canadian, Pacific Limited in any way connected with the derailment of CP train 54 in Mississauga at approximately midnight between November 10 and November 11, 1979”?

Since the minister’s statements just now indicated he doesn’t believe anybody should sign that kind of release form, and since, therefore, thousands of people should not be collecting out-of-pocket expenses because of what they give away in legal rights, will the Attorney General negotiate with CP so people can receive those out-of-pocket expenses without limiting the liability of CP to pay any other losses those people may have incurred?

Hon. Mr. McMurtry: Yes, I certainly will do that. The member for Scarborough-Ellesmere just moments ago sent me over a copy of the release form. I will immediately communicate with CP and suggest it does not use such a total and absolute release form. I will do that.

Mr. Cassidy: Supplementary: Since the Attorney General has taken that step, in light of the fact CP is refusing to compensate the residents of Mississauga and workers in Mississauga who lost a week’s wages last week because of the evacuation, and because of the very large numbers involved and the very costly and lengthy legal processes that will ensue if those claims for lost income have to go through the courts, will the Attorney General also undertake to negotiate a mechanism with CP whereby residents or workers can be reimbursed for the lost income during the period of the evacuation?

Hon. Mr. McMurtry: Yes, I certainly will do what I can in that respect. As the member knows, my authority is obviously somewhat restricted when it comes to civil claims between individual citizens and individual companies but in this particular case, I will not hesitate to pursue that path.

I was led to believe, by CP they were going to attempt to expedite the settlement of claims for out-of-pocket expenses. From what I am hearing now this may not be the case; if so, I will express my personal concern to CP.

Mr. Peterson: Supplementary, Mr. Speaker: We have here the potential for a great deal of litigation involving claims against various bodies, which could tie up our entire system, the minister’s staff and all the lawyers in town for years. Has the minister investigated the possibility of people subrogating their rights to the province so the province can establish liability so the minister could work with the various individuals in order to avoid legal bills and all the other complications that might ensue? By subrogating such rights, his department could expedite the payment of such claims.

Hon. Mr. McMurtry: We are exploring and will continue to explore all reasonable avenues to avoid the problem referred to by the member for London Centre. I appreciate his concerns and I share his concerns. We will explore all possible avenues to prevent that situation developing.

Mr. Cassidy: Supplementary: Since Canadian Pacific had profits of $368 million in the first nine months of this year and since its resources, obviously, far exceed the resources of any of the individuals who were affected by the evacuation, will the Attorney General undertake to negotiate, on behalf of the thousands of people affected, to have CP compensate people and workers in Mississauga not just for their out-of-pocket expenses but also for the very substantial sums that were involved in lost wages and income over the period of the evacuation?

Hon. Mr. McMurtry: I think I have said everything I can usefully say on this subject at this time.

Mr. Sargent: Supplementary: Surely there must be a firm position the government can take, in view of the fact that these giant corporations have multi-billion-dollar liability policies. I have no sympathy whatsoever for the insurance companies and I don’t think the Attorney General should have on the part of the province of Ontario, because we must teach these giant corporations a lesson that this can’t happen again. The way to hit them is in their pocketbooks.

For the Attorney General not to take a strong position and say he’s going to look into it, I think he must have a policy that everybody will be compensated.

Mr. Speaker: A new question. The member for Ottawa Centre.

Mr. Sargent: I would like to ask him what he is going to do about this.

Mr. Speaker: You didn’t ask a question.

Mr. Sargent: I’ll ask the question now then.

Mr. Speaker: The member for Ottawa Centre.

Mr. Sargent: Just a minute, Mr. Speaker. This is more important than you think. It is important to the people.

Mr. Speaker: Order. You were given ample opportunity to put a question. You got up and made a statement.

Mr. Sargent: I’ll ask the question again.

ENERGY POLICY

Mr. Cassidy: Mr. Speaker, I have a question for the Premier, on the basis of his speech to the Niagara Institute in Chicago last week.

Can the Premier say why he was so anxious to support the campaigns of such American spokesmen as Senators Byrd and Kennedy, Governor Brown and former Governors Reagan and Connally in their efforts to get the development of a North American common market in energy? Specifically, could the Premier say what are the common opportunities in energy he would like to see developed with the United States and Mexico? What would be the advantages for Canada and for Ontario and what studies has Ontario done on these common opportunities?

Hon. Mr. Davis: I’m delighted both the Leader of the Opposition and the leader of the New Democratic Party have read my prepared text for delivery in Chicago. Just to give a little bit of background, this was one of three or four seminars the Niagara Institute is conducting in the United States -- one in Los Angeles, one in Chicago and I believe there is to be one in Atlanta. I’m not invited to the one in Atlanta; Jim Gillies got to go to Los Angeles; I was stuck with the Midwest.

Mr. Peterson: You usually pick the warm one.

Hon. Mr. Davis: I wasn’t asked.

Mr. T. P. Reid: After this speech, I know why.

Hon. Mr. Davis: I have to tell the member it was very well received in Chicago.

Mr. Speaker: That wasn’t the question that was asked either.

Hon. Mr. Davis: The audience there was representative of some union leaders from this country, some business leaders and people from the business and investment community in the Midwestern United States, primarily Chicago, but also from the surrounding communities in Illinois and farther west.

The topic of my participation was Canada: The Perspective from a Provincial Premier. Besides that, what I was attempting to create at that meeting was an indication that in economic terms and in many respects Canada had much to offer. But I went one step further, which was contained in the speech, but which I really amplified at some greater length, when I pointed out that the traditional relationship between our two countries had been one primarily of a business communication, whether in terms of specific industries, such as the automotive industry, or in terms of state-provincial relationships. Take the area, for instance, of environmental concerns -- water quality control agreements between why the states and the provinces -- or such things as the government of Canada through its participation in the International Joint Commission.

What I was endeavouring to create with our American neighbours was some consideration from them and ourselves that we have many things in common in terms of economic growth and development. We have many things in common with respect to the potential in the field of energy conservation, in terms of substitution of certain traditional energy sources, where a great deal of experimentation and development of technology is going on in both countries.

Quite frankly, I feel it’s not the major issue in front of us, but when you have two nations such as the United States and Canada dealing basically in a common economic climate, there would be great merit in that instead of individual companies, or perhaps governments, dealing with problems, there should be some form of mechanism whereby we can explore certain economic policies that would be of mutual advantage to both nations. It is something that is happening in other parts of the world and we should not isolate ourselves from this possibility. I tried to convey that impression to our American neighbours in a very positive sense.

On Friday, the Leader of the Opposition (Mr. S. Smith) was trying to suggest we were discussing the possible joint development of certain energy sources in this province. We don’t have any. I am in no position to entertain that sort of concept. But surely we’re in a position in this country to say that if certain things are happening in the conservation field, in the solar energy field, or certain things in this area are happening in the United States we should be in a position to explore them along with our neighbours. It was an attempt on my part to say something that I think is very fundamental.

The European community has found certain common objectives. I don’t believe in a common market -- I don’t think that is politically or economically in the cards -- but I believe in some approach in terms of common economic problems or opportunities with the nation to the south of us. I think we’d be very foolish not to explore these. That was really what the intent was in those two paragraphs.

Mr. Cassidy: Supplementary: Is the Premier not aware that his statements are very likely to be interpreted, and have been interpreted as meaning something approaching a common market in energy? Also, will the Premier explain how we get away from that impression when the Ontario government has already supported new export commitments for natural gas, which would have the effect of sending cheap natural gas into the United States, while we have to use expensive frontier gas some time in the future? Is the Premier saying we should be sending cheap energy to the United States now, in return for American investment that would increase still further their control of our petroleum industry here in Canada?

Hon. Mr. Davis: Mr. Speaker, I don’t know who is interpreting what I said in what way. I can tell the member the people who listened to it did not interpret it that way. I don’t interpret it that way. I don’t think any reasonable person who knows what the history of this is would interpret it in that fashion.

Of course, I’m not in favour of the export of a cheap commodity that has to be replaced by an expensive commodity within a short time frame.

Mr. Cassidy: What is the Premier’s position?

Hon. Mr. Davis: I would make it abundantly clear that we were talking to a group of people who have an interest in Canada, some of whom have companies doing business here now, who are considering potential future investment. While the member may not want to see the economy of this province continue to grow, I do.

I must tell the member, there was somebody on the panel from the great province of Quebec. He was offering people in the state of Illinois cheap power from Baie James. I took it upon myself to say that Ontario Hydro could compete with any export in the short term. Not only could we compete, but also we could do it more effectively, because we happen to be several hundred miles closer to the state of Illinois than the power is at Baie James.

In any event, the reality is the state of Illinois won’t import power from either Ontario or Quebec, with the present transmission situation the way it is. I must confess to the member I said to the people there that if they were going to buy power, to buy it from Ontario and not from Baie James, which would cost more.

Mr. J. Reed: Supplementary: Are we free to assume from the Premier’s remarks that one of the areas of concern that he addressed in that speech would be the potential export of firm power from Ontario, especially with regard to remarks made earlier this month by Joseph M. Hendrie, chairman of the Nuclear Regulatory Commission in the United States, when he suggested it is possible some nuclear plants near large cities in the United States may have to be shut down because they haven’t found a satisfactory way to evacuate people in ease of some emergency? Is the Premier looking forward to the export of firm power?

[2:45]

Hon. Mr. Davis: The export of firm power was not mentioned either in the course of my visit with the people who were attending the seminar hosted by the Niagara Institute. That was not the purpose, as I said to the leader of the New Democratic Party. The only reason I -- as sort of an added comment -- just observed about our own surplus situation was because there was a gentleman there from Montreal who was talking about the potential of Baie James power. There was no discussion of firm export whatsoever, as I said.

Actually I think our markets are in Michigan, Ohio, New York and Pennsylvania. I would doubt, at this precise moment as to the potential in crossing Michigan to get into the state of Illinois, going through the state of Indiana en route. So, to make a very short answer, it was not discussed.

I just point out to the honourable member, though, he will be interested to know that the state of Illinois now depends for its electrical supply about 88 per cent on nuclear energy.

Mr. Cassidy: Is it fair to infer from what the Premier has said about the common energy opportunities in areas such as conservation and solar energy that it is the desire of the Premier and of his government that these new areas of energy development in Ontario should be no more Canadian-owned than the petroleum industry is in Canada today?

Hon. Mr. Davis: I must confess I spoke for about 30 minutes and there were a lot of other issues I covered. I went back in history to sort out for them just who won the war of 1812. I mean, I took a lot of time leading up to this speech and I didn’t get into all of these details. What did you say?

Mr. Nixon: That’s a change.

Hon. Mr. Davis: What I really was trying to do was create the feeling that the United States and our nation, Canada, had a lot of things in common; that in the energy field, in economic developments we have more common areas we should be exploring than perhaps any other two nations of the world.

The honourable member may not like our American neighbours in a corporate sense, nor have the same feeling about the need for Canada to sit down with others to explore certain economic opportunities or objectives.

I just have to say it very simply -- and I know the Leader of the Opposition mightn’t agree with me if he were here -- I just happen to think they are very good neighbours; they are important to us economically as we are to them. We can do some things together to our mutual advantage, and to isolate ourselves from the rest of the world, as the member would like us to do, would be very foolish indeed.

Mr. T. P. Reid: Mr. Speaker, I am somewhat concerned about the Premier’s slide into continentalism here, because his speech on page 11 says, to quote the Premier, “In my opinion it would be valuable for us to structure a Canada-US commission of inquiry to pursue common energy and development opportunities.” Further down on the page, to quote him again, he refers to “a common effort to develop common energy and developmental opportunity.”

That is fairly radical, but my supplementary, Mr. Speaker is simply this: How can the Premier even consider sharing our depleting energy resources or opportunities to exploit them with the Americans when we can’t even get an agreement on price and supply within Canada?

Hon. Mr. Davis: I think the answer to that is very simple and I am sure the member opposite knew the answer before he asked the question, I do not contemplate sharing depleting resources from this province with the United States. We don’t have any depleting resources we can share with the United States in terms of oil or natural gas. I cannot speak for anyone other than the --

Mr. T. P. Reid: What about the economic opportunities you are talking about?

Hon. Mr. Davis: No, no; I know the concept upsets the honourable members because they didn’t think of it first. I understand that, but I would say to the -honourable member, who, more than some over there, should have some understanding of what is happening in the United States -- he doesn’t want to isolate us from the tourist industry a bit; of course he doesn’t -- that I think we should be making a greater effort to involve ourselves with our neighbours in terms of common economic, energy conservation and energy technology matters.

Mr. T. P. Reid: It is not what this speech said.

Hon. Mr. Davis: Of course it is. I delivered the speech, I know what it said and I know what I said, and I just want to say to the honourable member that what I said makes a lot of sense. He can disagree with it; if they want to isolate themselves, the isolationist party of Canada, be my guest, but that is not where the long term future lies.

WCB MEDICAL SERVICES

Mr. B. Newman: Mr. Speaker, I have a question of the Minister of Labour. The Minister of Health also may have to reply to some part of it.

Has the minister or the Workmen’s Compensation Board received many requests from doctors throughout the province who are considering opting out of Workmen’s Compensation Board cases only? Is the minister aware that among the reasons for contemplating this action the doctors cite a great increase in the number of letters, phone calls and so forth from board personnel? These include requests for back-dated reports of several years ago with multiple questions for details concerning medical attention and procedures done for the board without a fee.

Hon. Mr. Elgie: Mr. Speaker, I asked the director of medical services this very question about a month and a half ago and he advised me there was no increase in the number of physicians who were indicating they would prefer not to deal with workmen’s compensation problems.

As a physician I am well aware of the fact many doctors do find extra work involved in looking after compensation problems. The extra amount of work is troublesome and the board has recognized this in the past by paying a premium for those services. I may tell the member now, if it is of any reassurance, that the present fee-schedule negotiations going on between the Ontario Medical Association and the Ministry of Health will be followed by negotiations between the OMA and the WCB to work out a schedule of fees which will again recognize there is a certain amount of extra work involved in looking after patients with compensation problems.

Mr. B. Newman: The minister is aware there will always be some doctors who will still wish to opt out. Is he making any type of arrangements for the transferral of records to the board from those doctors who wish to opt out or to some other doctor if another individual wishes to take over that case?

Hon. Mr. Elgie: The patient-physician relationship usually is such that a physician would endeavour to help a patient find a new doctor. Should the physician not be willing to do that -- and I frankly find that unusual; I have never known anyone who wouldn’t take part in that process -- if the person would contact the board, the board would certainly endeavour to help him find another physician in the area.

Mr. Breaugh: A supplementary: I would like to ask the minister if in his negotiations, or by whatever technique he would like to do it, he would find some mechanism whereby those doctors who now wish to charge additional amounts for reports used by the WCB in processing compensation claims would be dealt with in such a manner that the board receives full value for its dollars; or at the very least, would he find some mechanism so that those individuals who are already under duress would not have further financial duress added to them in the form of a $50 charge? I have at least one case of a doctor wanting about $150 to provide medical information for the processing of a claim.

Hon. Mr. Elgie: The negotiations which should be forthcoming in the very near future will certainly take into account that matter of the extra fees payable to physicians for the extra duties involved. They always have. That difference and that extra work have always been recognized in a different fee schedule and that will continue to be so.

Under the WCB Act, of course, the WCB account rendered for services given to the patient is the full amount that can be paid.

Mr. Cunningham: Supplementary: I would like to ask the minister if he is aware of a situation where it requires longer than 50 days in some situations for the practitioner to receive payments from the compensation board. Would he take it upon himself to see that the age of accounts payable from the compensation board is reduced so people would get their money a little faster?

Hon. Mr. Elgie: It has been my experience that accounts have usually been paid promptly, but I will certainly be glad to remind the board of some inconveniences some doctors are reporting.

TRANSPORTATION OF DANGEROUS GOODS

Mr. Renwick: Mr. Speaker, I have a question of the Premier. My concern is about the interim period between now and the report that will ultimately be made by the Canadian Transport Commission about the Mississauga spill and the implementation of the recommendations that will undoubtedly be contained in it.

Will the Premier assure the assembly that a single ministry of the government during this interim period will have available to it full information about the points of origin, routes and destinations of all movements of chlorine by any means within Ontario? Will he ensure it will have responsibility for monitoring those movements and for contingency plans en route and at destinations to minimize to the extent possible any likelihood of a second mishap?

Hon. Mr. Davis: Mr. Speaker, I will go far in terms of answering that question: The government will make every effort it can, within the limits of our area of responsibility, to see that this sort of thing does not happen again. Whether what the member for Riverdale is suggesting would in itself and by itself be sufficient I honestly don’t know, I think it is a reasonable question. Whether that would provide us with the mechanism to see that it could not happen again, that kind of technical opinion I quite frankly can’t venture. I can assure the honourable member we have steps in motion to see what we can do provincially to see that this sort of occurrence cannot happen again in any of our communities.

Mr. Renwick: By way of supplementary, since both CN and CP spokesmen indicated in the press that they do not intend to make any changes with respect to their transportation systems pending the result of the inquiry, and recognizing that chlorine is not the only hazardous substance which is being transported, is it possible for this government, given the divided jurisdiction, to ensure that any necessary changes are made in the method of transportation during the interim period so we do not persist in the same kind of transportation system that resulted in this particular accident?

Hon. Mr. Davis: I expressed the point of view last week that I don’t think we need to wait for the results of any formal inquiry, whatever form it might take, to explore as a provincial government if there are any short-term alternatives that would assist the situation. I made that quite clear and we intend to continue with that sort of approach.

As the honourable member has pointed out, we are not talking about chlorine only; there are other substances, and I don’t think any person is disputing the fact that these chemicals must of necessity be transported. There is no question that in some way they have to move from point A to point B. Our responsibility is to see in what ways we can be helpful in finding a better way of doing it. What that is I quite frankly don’t know, but the ministries of this government will be looking at it in advance of any federal inquiry or in advance of any federal legislation.

NIAGARA RIVER POLLUTION

Mr. Kerrio: I have a question of the Minister of the Environment. Is the minister aware of the fact that Olin Chemical Corporation, which is adjacent to the Hooker Chemical Corporation in Niagara Falls, New York, may be spilling as much as 1.4 million gallons of untreated leachate into the Niagara River? Is his ministry aware of this condition? I wonder if it brings to mind the urgency I have about the dumping of effluents into the river that’s adding to the pollution there?

Hon. Mr. Parrott: Mr. Speaker, I am not personally aware of this report. I’ll check with my officials and advise tomorrow.

Mr. Kerrio: While the minister is doing that, would he consider some kind of involvement with his counterpart in the state of New York so he might be more aware and in a better time frame to address himself to these kinds of problems? They seem to be developing and we are the last people to know on this side.

Hon. Mr. Parrott: I said I would check on this report. I don’t know whether it is well founded or unfounded, I am not able to report more than that today. I have talked and answered questions in the House on the other aspect many times, we have had debates in the estimates and I really have nothing more to add to those comments.

WORK INCENTIVES FOR FBA RECIPIENTS

Mr. R. F. Johnston: I have a question for the Minister of Community and Social Services. When the minister meets with the family benefit work group tomorrow about his work incentives program, will he continue to commit himself to beginning the program in January 1980, even though no regulations have yet been developed or staff hired? Will he inform that group what he is doing to assist those individuals who took jobs after September 19 because of his commitment, and I quote, “that any recipient will be eligible, effective immediately”?

[3:00]

Hon. Mr. Norton: Mr. Speaker, I fully intend to maintain all of the commitments I have made. The honourable member may not be aware but the field staff in my ministry has now been in receipt, for a matter of a couple of weeks at least, of detailed guidelines for the administration of the program. It is our intention to continue to proceed, effective January 1, with the retroactive provisions I outlined earlier.

Mr. R. F. Johnston: Supplementary: The information I have been getting from people who have been applying for help is they are getting no assistance at all and nobody knows when it is going to start or what are the regulations.

I would like to ask what kind of additional support the ministry will be providing to people like Helen Dee of Scarborough, who on September 26 took a minimum-wage job with the expectation assistance would be forthcoming to support her and her three children. She did not receive her phase-out moneys, which are under present legislation, until a month and a half afterwards, not until the middle of November. She is now considering quitting her job because her extra costs of baby-sitting, transportation and lunches are keeping her poorer than she was under full FBA recipient payments. What incentive will the minister give this woman to believe in the promises he has been talking about?

Hon. Mr. Norton: Obviously, to answer a question about specific applicants I would have to know more details of their levels of earnings and the numbers of dependants and so on.

Mr. Cassidy: If you are not set up, you are not set up.

Hon. Mr. Norton: If the honourable member wishes to refer that matter to me I would be quite happy to have that particular case reviewed and to report back to him. In response to the honourable leader of the third party, we are set up and we are ready to go.

Mr. Martel: When?

Mr. Cassidy: When?

ENVIRONMENTAL EMERGENCIES

Mr. Watson: Mr. Speaker, I have a question for the Solicitor General, but in view of his absence, I would like to direct it to the Premier. In view of the recent events in Mississauga; in view of the fact that most other communities realize a similar situation could happen to them; and in view of the fact that many of these communities have air-raid warning systems but, as I understand it, do not have the ability to turn them on because they are entirely with the armed forces, would the Premier look into the possibility of having these systems made available for the purpose of warning the general public of local situations? They may not all go off with a big bang as they did in Mississauga.

Hon. Mr. Davis: Mr. Speaker, I think that’s something that could be explored as part of this general inquiry. I must confess I haven’t given it a great deal of thought up until this moment, but it’s something that could be discussed before whatever inquiry is established.

Mr. Martel: Supplementary: In respect to these areas, could I ask the Premier is the government aware if other municipalities do have contingency plans where chlorine and any other chemicals which would have the same results are being delivered in the event of such an occurrence in outlying communities and, if not, would the government move to ensure that is looked into?

Hon. Mr. Davis: We would be quite prepared to sit down with the municipal people to have them share the experience in terms of the organization of what went on in Mississauga. I think what we really have learned from the Mississauga experience is that the people working together in a co-operative sense -- the heads of the various forces, the firefighters, the police and municipal officials -- can deal with a situation, given some common direction.

I could be corrected, but I don’t think the city of Mississauga had a contingency plan to deal with an evacuation of this size because of this particular situation. I think it’s something that evolved in a very short period of time and for which the people of Mississauga deserve tremendous credit. It wasn’t as though they had gone through this exercise. It wasn’t as though they had it all laid down.

Certainly, anything we have learned there should be shared with other municipalities. There is no question about that.

AMBULANCE SERVICES

Mr. Sweeney: I have a question for the Minister of Health. Is it true if a community ambulance service is run either by the Ministry of Health or by a local hospital it is deemed to be an essential service and therefore it cannot be settled with a strike situation? On the other hand, if it is run by a private firm, it is not an essential service and can be settled by strike. Given that the service is the same, how is this so?

Hon. Mr. Timbrell: Depending upon who is the employer, it is quite true the employees and the operation, for that matter, are under different pieces of legislation and therefore different rules do apply. It is not a question of definition of essential service. That is a matter which has vexed governments for years in trying to come up with a definition.

In the case of the honourable member’s particular community, when the service was operated by the Kitchener-Waterloo Hospital it operated under the terms of the Public Hospitals Act and under the Hospital Labour Disputes Arbitration Act and therefore the employees were not legally in a position to strike.

When the K-W hospital, a year or two ago -- I forget now how long ago it was -- gave up the service, or said they no longer wanted to run the service and it went to a private operator under the terms of a proposal call, that then put them into the private sector and in the position under the Labour Relations Act potentially to strike.

Mr. Sweeney: Given that the present stalemate in my community is based upon the inability of the employer to guarantee the settlement he is offering because he doesn’t know the money that is going to come from the ministry, can the minister suggest how this stalemate can be broken, because understandably the employees can’t accept his offer when be can’t guarantee he is going to be able to pay it?

Hon. Mr. Timbrell: With respect, that has not been a deterrent in other communities. In Mississauga, when the Halton-Mississauga service was on strike a number of months ago, in Thunder Bay, where they were facing the possibility of a cessation of work, that was not a deterrent.

The honourable member wouldn’t want me to in effect say to the operator, “Here is a blank cheque; whatever is the settlement we will pay to the last penny,” but of course in any situation we would review it in terms of what is needed to maintain an acceptable level of ambulance service.

Mr. Breithaupt: Supplementary: Will the minister advise the House how many other communities are in this circumstance where contracted ambulance services do allow at least the opportunity for strike, if that should occur? And is the ministry giving any consideration as to changing the present circumstances so that even under a contracting circumstance it may be that the requirement for necessity as it existed in the earlier situation in Kitchener would be carried on, so the strike concerns would not arise in a community such as ours where this matter has now gone on for some 10 weeks?

Hon. Mr. Timbrell: As the honourable member will know, there are a variety of circumstances under which an ambulance service will be operated. The member’s colleague has enumerated several of them. There are also volunteer services. There are also municipal services. For instance, in Metropolitan Toronto the Department of Ambulance Services comes under the Metropolitan government, and as municipal employees -- I guess they would be members of the Canadian Union of Public Employees they would potentially have that right.

I want to be very careful that in the present context of the labour dispute in Waterloo I don’t say anything here that would be inflammatory and potentially destroy the possibility of a settlement --

Mr. Breithaupt: As do we.

Hon. Mr. Timbrell: -- but certainly this is a matter which is of concern to me, and when matters have returned to normal I think it is something which bears some examination.

Mr. Breaugh: I have a question for the Minister of Health. I would like to ask the minister if he has now prepared a more reasoned response to the allegations of Mr. Jerome Alexander, who is the past president of the Ontario Ambulance Operators Association, and his remarks at their convention that we are facing a disaster?

If I can quote him: “The funding formula for private operators is pitiful, unrealistic and ill-conceived and it is past time for a major investigation of all branch activities to begin. Certainly the Ministry of Health must look at its organization and until this is accomplished we will flounder in the mud of bureaucracy forever.”

Hon. Mr. Timbrell: I am extremely pleased to deal with that, inasmuch as that particular ambulance service is one that has been of concern to us and has been under some investigation for a while. I mention that so as to put those remarks in some context.

Mr. Martel: Just to put it in proper perspective.

Hon. Mr. Timbrell: At the same time that gentleman made some remarks about the ambulance vehicles. I am told by staff that by the end of this current fiscal year we will have put on the road about -- I don’t have the figures in front of me -- 205 new ambulances in the province. This is close to half of the provincial fleet.

Mr. Breaugh: On the matter of an investigation, the minister has a fraud squad investigation here in Metro, he has continuing allegations of unsafe ambulances on the road, he has a dispute in Kitchener, he has a dispatching argument in Welland and again in the Windsor area, he has police officers who are unsure of the rules and fill up the ambulances with three or four people, even at minor accidents, at $40 a crack. Surely all of this is grounds upon which the minister will continue to have an internal investigation, as he supposedly has, under way. But he also ought to have a more public type of investigation.

Hon. Mr. Timbrell: I’m always pleased to deal with specific allegations. The ones the member brought up today have no substance whatsoever; in fact, they’re questionable in their origin and motivation.

Mr. Breaugh: The rest of the world is wrong and the minister is right? Why are you buying 200 new ambulances if there is nothing wrong with them?

Hon. Mr. Timbrell: Every year we do put a lot of ambulances on the road.

Interjections.

Hon. Mr. Timbrell: The honourable member really doesn’t want an answer, he wants a soap box. There are lots of them available outside of the House.

Mr. Speaker: The time for oral question period has expired.

MOTIONS

COMMITTEE MEETINGS

Hon. Mr. Wells moved that the standing administration of justice committee be authorized to meet on the afternoon of Wednesday, November 21, 1979.

Motion agreed to.

Hon. Mr. Wells moved that the select committee on Ontario Hydro affairs be authorized to meet on Tuesday, November 20, 1979, following routine proceedings and in the evening if required.

Motion agreed to.

ANSWER TO QUESTIONS ON NOTICE PAPER

Hon. Mr. Wells: Mr. Speaker, I wish to table the answers to questions 328, 346, and 348 standing on the Notice Paper.

ORDERS OF THE DAY

House in committee of supply.

ESTIMATES, MINISTRY OF REVENUE (CONTINUED)

On vote 801, ministry administration program; item 1, main office:

Mr. B. Newman: Mr. Chairman, when we adjourned the debate on Friday, I was the next speaker on the list, or I assume I was, and I appreciate being given the opportunity to start this afternoon.

In the discussions on Friday referring to assessment the minister mentioned that approximately $2,500 worth of construction, addition, modification and renovation would not be added to the assessment for that given year. The assumption was --

Mr. Deputy Chairman: I wonder if we might have a little more order in the chamber so we can hear the questions and statements being made by the honourable member?

[3:15]

Mr. B. Newman: The impression left by the minister was that any renovation of a particular structure would necessarily add to its value and would consequently increase the assessment. That isn’t necessarily so. One could have changes in the structure of a house, especially if it was being modified for a handicapped individual, for the single purpose of accommodating that one person. Even though the structural changes to the house could cost in the many thousands of dollars, maybe $10,000 for widening doors, improving fixtures, lowering wash basins, adjusting telephones and so on, they wouldn’t necessarily add to the value of the home.

For that reason, although $2,500 is allowed, I think there should be some leeway so that when the changes are made for a handicapped individual the sky should almost be the limit. That would simply allow a handicapped person to live almost as well as an individual who is not handicapped. I know we can’t say the sky is the limit, but we should have some figure that is substantially higher, if need be, so the handicapped individual, having such changes put into his or her home, does not have an increased assessment.

I hope that will be taken into consideration by the assessors when it comes to the particular problem I have mentioned. I have other questions, but I would like this one answered.

Hon. Mr. Maeck: Perhaps my statements of last Friday were a little far-reaching. I mentioned $2,500 could be spent on a house without its heng picked up by the assessors. When a building permit for alterations to the value of $2,500 or over is applied for and received, the assessor knows a certain amount of money has been spent on the building but he doesn’t take the amount of the building permit as an assessment value; he visits the property.

The member is quite right; there are many things that could be done to a property which may require a building permit but which would not necessarily increase the value of the property. But I believe also that when the assessor does visit he would take into consideration the kinds of things of which the member is speaking. I don’t think a different limit necessarily has to be put on.

What the assessor is really interested in is whether or not that building has actually increased in value -- not necessarily how much money has been spent on it, but has it increased in value by more than $2,500. That is the way the assessor would assess, rather than just saying $2,500 has been spent, therefore the assessment goes up $2,500. That isn’t the way it is done.

Does that answer the member’s question?

Mr. B. Newman: Yes, that does clarify it a bit, Mr. Chairman.

I would assume the assessors in the various municipalities would be broad-minded enough to take something like this into consideration, even though it may increase the value of the house because certain structural changes have to be made that are of consequence to the home, regardless of whether a handicapped individual lives in that home or not.

The other question I was going to ask of the minister was the one he brought to our attention when he referred to me and to the city of Windsor. That is the grant structure that was given to the city.

The minister knows the history of it -- that the city has been sort of short-changed by some $30 million over a number of years because of the resource equalization grant inequities. He made an adjustment just this past year and provided the community with some $3,097,600, if I am not mistaken.

The new equalization grants the ministry is going to put into effect this coming year are to be arrived at by simply adjusting the figure to a certain amount. He is not taking into consideration the additional grants he has given.

He really should have given approximately $10 million worth of grants each year over the number of years, had the resource equalization giant been fair. It was pointed out to his government by the then mayor of the city of Windsor back in 1973, 1974, or 1975 in the meeting in London, but our pleas from the city were falling on deaf ears. The ministry didn’t believe the city was right when it presented its case.

After it got a series of other municipalities involved and after the honourable Treasurer of the day, Darcy McKeough, realized Windsor was right and that Mr. Agnew, from the city, did present a good case, the amount the ministry would have to give to them to correct the inequity would have been approximately $10 million. I am subject to correction on that exact figure, but I understood it was so.

I can recall, Mr. Minister, pleading in this House at various times with the provincial Treasurer, trying to point out to him we were adversely affected. Other municipalities picked up the cudgel and as a result there were 15 or 20 or possibly even more municipalities throughout Ontario which found they were adversely affected. The minister accommodated them with a minor adjustment. The minister accommodated Windsor with a minor adjustment which was nowhere near what they expected to get. They appreciated the $3 million, even though they would have preferred the larger figure. Now the minister is going to short change us again next year because he’s not including the $3 million as the grant and adjusting it percentage wise, including the $3 million. He is excluding that $3 million. The minister is not being fair.

I hope he takes that into consideration or today advises me the equalization grant to the city will include that higher figure so Windsor once again won’t be shortchanged.

(Partial failure of sound system)

Hon. Mr. Maeck: Could I have some power?

Mr. Deputy Chairman: I think you’re about to get some power.

Hon. Mr. Maeck: These words of wisdom I want recorded forever in Hansard, so I have to wait for power.

Mr. Deputy Chairman: Either you or somebody is causing a short circuit, Mr. Minister.

Hon. Mr. Maeck: Pretend I’m the Treasurer (Mr. F. S. Miller) today, that’s who I am.

Mr. B. Newman: Shift over one seat. Somebody blew a fuse.

Mr. Deputy Chairman: Speak out loudly if you will, I seem to have lots of power in this microphone.

Hon. Mr. Maeck: How are my words of wisdom going to be registered, forever and ever?

Actually, I’ve said this before, Mr. Chairman, so perhaps it’s already been registered from time to time. The question the member for Windsor-Walkerville poses is a question that should be directed not to me but to the Minister of Intergovernmental Affairs (Mr. Wells). He is the one who decides the amounts of grants which go to municipalities. It’s under his jurisdiction and not the Minister of Revenue’s.

The Ministry of Revenue’s position in this whole matter is to bring forth proper equalization factors based on 1978 assessment, and so on. Those factors are used by the Ministry of Intergovernmental Affairs and the Ministry of Education to decide what apportionments there will be, what shift there will be and how many grants will go to the municipalities.

I recall in my statement, when I introduced the legislation which would take the freeze from the equalization factors, a guarantee written into that statement that no municipality would get less in 1980 than in 1979 because of the new factors. I am sure the Minister of Intergovernmental Affairs will take that into consideration when he is making a decision as to what the grants will be.

I know the policy announced by the Minister of Intergovernmental Affairs is that no municipality will receive more than 10 per cent in gains in 1980, if they happen to be one of those we might loosely call a winner in this equalization factor exercise. Of course, Windsor was not one of those. The question the member has asked of me should really be given to the Minister of Intergovernmental Affairs in whose jurisdiction it falls as to grants for municipalities.

Mr. B. Newman: I stand corrected. The only thing is unless I try to point it out to each of you people on that far side of the House we’re going to continue to be taken advantage of in my community. It isn’t fair to come along and deprive a community of a substantial amount of resource equalization grants and continue the short-shrifting of that community.

The minister is right. I possibly should not have asked that question of him. I do stand corrected. I hope I do have an opportunity at some time or other to go after whoever is really the culprit in the deal.

Hon. Mr. Maeck: There is one other item the member did mention that I thought I should also remark on. I think the $30-million figure may be slightly exaggerated.

Mr. B. Newman: It’s the accumulated total.

Hon. Mr. Maeck: Yes, I understand. I believe the $10 million might be a little exaggerated as well. Nevertheless, there is no question the city of Windsor was not receiving its fair share of grants over these past few years because of the freeze on equalization factors. It may take some time to make the proper adjustments because there is a bottom to the barrel as far as money is concerned.

Mr. B. Newman: But when there was a lot of money, it wasn’t coming our way.

Hon. Mr. Maeck: That’s true, but we did increase grants this year between education and the municipalities in the neighbourhood of $50 million. There is another $50 million going into the pot this year in round figures. It could be a little less or a little bit more, but it’s in that general vicinity. I think the province has dipped in about as far as it can dip this year. That’s the reason there was a limit of 10 per cent put on the municipalities.

Mr. B. Newman: You didn’t answer the other question. Are you going to consider that $3 million or so we received this past year? Will the additional 10 per cent go on and include that $3 million?

Hon. Mr. Maeck: That is the part of the question I suggested should have been given to the Minister of Intergovernmental Affairs and not to my ministry. I did remind the member I made a statement in the House when I took off the freeze that no municipality would get less in 1980 because of the new equalization factors. I leave that with the member.

Mr. B. Newman: We will be getting less because we will not be getting the $3 million.

Hon. Mr. Maeck: I’m not sure how the Minister of Intergovernmental Affairs will interpret the statement I made, but I will discuss it with him.

Mr. Charlton: I wouldn’t normally raise this under this vote, but since we’ve been discussing it I thought I would put a couple of comments on the record to try to clarify what the minister has said about additions to property of less than $2,500. I think the minister’s statement is generally correct, but somewhat misleading in the way it’s put out. What is happening in some assessment offices -- and I can’t swear this happens in every assessment office, but the policy is supposed to be uniform -- is they keep track of items that are added that come to a value of less than $2,500.

If two are added, even if they happen to be three or four years apart, if the cumulative total is over $2,500 the assessor will add the additional value at that point. So people shouldn’t have it in their mind they can add $2,500 here and $2,500 some time later and get away with it, because in most cases it won’t happen.

[3:30]

The other thing is that in any area where section 86 is being put into effect for anybody who has added something in the past that was worth less than $2,500 in value, although that assessment wasn’t added at the time, it is being added under section 86 because the market value assessment on which the section 86 equalization is based includes the value of that item, the garage, swimming pool, or whatever it happened to be. There are some municipalities in this province where, in a one-shot deal, those items are being added, although it is my understanding that once the section 86 equalization is done that assessment office will again resume the practice of not adding the items under $2,500.

Mr. Deputy Chairman: Are there any other questions on vote 801, item 1? The member for Etobicoke.

Mr. Philip: Mr. Chairman, I hope it is appropriate to bring it up under this vote, but it is a matter of policy and I would like to see if there is any change of direction by the minister on this.

I am wondering if the minister has received complaints from some of the small bottling companies concerning what they consider to be discrimination against them in the 50 cent sales tax exemption for beverages and confectioneries. A number of them have expressed concern to me, particularly some of those serving the Italian community. They tend to deliver large crates of drinks and their competitors are the local grocery stores where people tend to purchase soft drinks by the bottle. Since their system is one of selling in bulk, they feel that under the new regulations perhaps not only they but also Pop Shoppes and some of the other companies which specialize in selling returnable containers by the dozen or so are discriminated against and this works as a disadvantage to them and an advantage to some of the bigger companies such as Coca-Cola and Pepsi-Cola that tend to have their outlets through Becker’s and Dominion Stores and the bigger chains which these people cannot get into.

They would like to know whether there is any contemplation of a change of policy or some way in which they can be on an equal competitive basis with these companies.

Hon. Mr. Maeck: Mr. Chairman, I haven’t had any letters from the small companies that came directly to my desk. I will check with my staff to see if any complaints have been coming into the retail sales tax branch. I will have some information on that in a moment.

I don’t personally recall having received any letters from any small bottling companies with the complaint you have talked about. However, if it is acting as a sort of a penalty towards them, I would certainly be happy to look at it and see if there is a solution to it. Basically, all pop companies sell pop in bulk as well as in small quantities and the whole thrust behind this, as the member is well aware, was to accommodate not only pop but chocolate bars and small confectionery articles with a value up to 50 cents.

The member will probably recall that some time ago there was a concerted effort, not only by chocolate bar manufacturers but even by some consumers who were concerned about the fact that when chocolate bars went up to 25 cents the children had to pay sales tax on them. I suspect that is one of the reasons the Treasurer decided to go to the 50-cent limit instead of the 20. Basically, it is fair the way it is, except for those companies who may sell completely in bulk and only by the case.

Mr. Philip: Perhaps the minister or one of his senior people would be willing to meet with some of the companies concerned. I am sure I can arrange for that and they could discuss it with the minister or perhaps with one of his assistant deputies or somebody at that kind of level. I believe when it was first brought to my attention, which was several months ago, I did send that matter over to either the minister or one of his key executive people. I’m not sure who it was at that time -- my assistant is presently pulling the file for me -- but I think any meeting with them would be appreciated.

There is one company in the Weston area particularly concerned since 100 per cent of its sales are delivered by the case directly to homes.

Hon. Mr. Maeck: I would certainly be happy to arrange a meeting for any constituents or businesses having difficulty. I am prepared to listen to their submissions and see if there is something we can do to help them.

I have a note here now from the staff. They don’t indicate to me whether there is a record of any letters from manufacturers such as you indicated, but they do give me this information.

The tax is based, of course, on a unit sale. The sales in bulk are usually at a lower price than the individual bottle price, so there is an evening-out effect to some extent. In other words, if you buy a small unit, you are going to pay more for it, not through tax, but through the cost of the product in bulk. So the ministry staff think there is a type of an evening-out effect because of that.

As an example, they say a 39-cent bottle is tax exempt; one case of 24 units includes tax but on the unit price it is approximately the same as the single price. In other words, if you buy a case, when you divide it by 24 and get the unit price you will find they are usually the same price or maybe even sometimes lower than if you buy one bottle, even if it is tax free, so it sort of evens out.

Mr. Philip: Just one last point on that, Mr. Minister. The point they previously were making was they had some competitive advantage in competing with the multinationals and all of their advertising campaigns and all of the accessibility of the corner stores. This, in simply making them competitive or equal, takes away that one advantage as small companies, and as Canadian-based and as Ontario-owned companies. I assured them. I thought the minister would be interested in keeping this competitive advantage to the small Ontario businessman.

I appreciate the minister’s comments and I am sure perhaps we can get together and hopefully do something about it.

Item 1 agreed to.

On item 2, analysis and planning:

Mr. Haggerty: This relates to the minister’s announcement on October 16 of the formation of a consolidated revenue tax appeal service, a major step by his ministry towards simplifying the tax appeal process.

Is the only tax appeal office you have in Ontario located here in Toronto? Or are there others throughout Ontario?

Hon. Mr. Maeck: Mr. Chairman, again this item doesn’t come under this vote, but I am prepared to speak about it if there is no objection from the rest of the members of the committee.

This is the only office we have in the Ministry of Revenue. However, I did say in my statement that we would be prepared to send people around the province, if necessary, for instance to Thunder Bay or somewhere else. If it was necessary to have a tax appeal in an area, we can from time to time send staff from this office out to various places.

Mr. Haggerty: In other words, you are going to follow procedures established by the federal tax appeal system whereby they send out taxing officers or persons to bear appeals to different localities in Ontario, or throughout Canada in a sense. Instead of having one in Toronto, Hamilton, London, or St. Catharines, you will be doing this, will you? Everybody won’t have to come to Toronto?

Hon. Mr. Maeck: That’s right. We will be doing that. We have been doing it prior to this time. What we have done has really changed our assessment office.

It used to be if you had an appeal in the retail sales tax branch, as an example, the appeal would be heard by people within that branch. Now we have set up a separate appeals office so that regardless of where you are having your problems within the ministry, they would hear that appeal.

They are no longer connected to any specific branch in the ministry. They are not connected with sales tax or cork tax or tobacco tax. They have their own separate little branch and all they do is hear appeals from all the various branches within the ministry. We have always had an appeal system within the ministry but we have now located it in one unit and it is not in any way connected to any of the other branches.

Mr. Haggerty: Mr. Chairman I was trying to relate it to the additional costs of item 2. There is a substantial increase from $278,000 to $369,000 -- a $90,000 increase. Could the minister give me reasons why we have had a substantial increase in analysis and planning here? What are we contemplating in tax changes under this increase of about $90,000 in this vote?

Hon. Mr. Maeck: The largest increase in this vote is in services I believe. That is because of the computerized resource management and forecasting systems that we have implemented. That is where the largest amount is. Is there any specific item the member wants to know about?

Mr. Haggerty: I am making reference to item 2, analysis and planning. There is a substantial increase there. I was looking also at information services there. Item 2 seems to be rather costly; almost everyone has a direct phone to your facilities in Toronto to deal with tax matters, Gains and a few other items that relate to revenue and revenue-sharing, I guess it would be.

I would like to know why there is about a $90,000 increase on that second item, analysis and planning. It seems either you are bringing in some new type of planning for taxing purposes or you have some study that we on the opposition side are not aware of -- perhaps a study involving some of your forecasting.

Hon. Mr. Maeck: The computerized system of cash management is one of the major items. If you go down the list you’ll see there is an increase in salaries and wages. You are going to find this pretty well in every branch of every ministry in government because of the increase in salaries and benefits to all the civil service. Transportation and communications is up very little. As I said, services is the major single item. Supplies and equipment are actually down as compared to the 1978-79 estimates.

I guess the biggest item is salaries and wages. They have increased that staff by one person. We had 10 civil servants in there in 1978-79 and for 1979-80 we will increase it to 11.

Mr. Haggerty: That is vote 801, item 5 you are talking about?

Hon. Mr. Maeck: No, I am talking about vote 801, item 2. There was an increase of one staff. There is the increase in salaries and wages which went right across the civil service. There is the computerized system I spoke about that has been brought into this branch. That accounts for most of the increase in that item.

Item 2 agreed to.

Items 3 and 4 agreed to.

On item 5, financial services:

Mr. Haggerty: There seems to be a substantial increase in financial services. That could indicate you have additional staff. What is actually done in this area of financial services?

[3:45]

Hon. Mr. Maeck: The explanation for what we do is listed on the page in the member’s estimates. However, I will read it into the record. “This activity, performed by the administrative and financial services branch, delivers financial support services to program managers concerning payroll and expenditure accounting and reporting and financial control and review. Resources for the management of the branch and for the executive director of the support services division are also included in the activity.”

The reason for the increase in this one is that all of the branches up until this point had paid their share towards the Workmen’s Compensation Board payments out of this one branch. You will see as we go through the book there will be less funding for that purpose in other votes. We have changed the system so that all of the Workmen’s Compensation Board expenditures come from this vote instead of spreading it over the ministry.

Item 5 agreed to.

Items 6 to 10, inclusive, agreed to.

Vote 801 agreed to.

On vote 802, administration of taxes program:

Mr. Deputy Chairman: Does any member have any questions on vote 802? The member for Hamilton Mountain.

Mr. Charlton: The matter I wanted to raise is under the last item, item 7.

Mr. Deputy Chairman: Any questions before item 7?

Mr. Haggerty: Item 3, Mr. Chairman.

Items 1 and 2 agreed to.

On item 3, revenue research.

Mr. Haggerty: Could the minister give us in more detail what revenue research includes? Are there any research studies on other areas of taxation the Legislature should be made aware of?

Hon. Mr. Maeck: Earlier in the debate we talked about the Ministry of Revenue’s providing information to the Treasury regarding tax matters, the administration of taxes and the effects taxes would have on certain situations that might arise. That’s what this group does. They are a research group that reviews the operational practicality of proposed legislation. The Treasurer may come to our ministry and suggest he may want to implement a certain tax. He will ask for advice from us as to whether it’s feasible or not. The research group will investigate and report to the Treasurer as well as to the minister on matters such as this.

Mr. Haggerty: The minister did touch on the matter of refunds on taxes. I was wondering if he could indicate to the House the policies as they relate to late filing of the retail sales tax and why there is a double penalty in it. Is there some way the minister can make it much easier for the person who has to carry accounts for 90 days or something like that? It’s rather difficult for him to have the cash flow to contribute to the provincial coffers. Is there an easier way the minister can ease up on the double taxation? As a penalty, a person has to forfeit his part in collecting the tax in the first place and running that particular service. I think it runs to about 150 per cent or up to that per year, if you use the double taxation.

Hon. Mr. Maeck: I have to impress upon the member that retail sales tax is money that is collected on behalf of the crown by people who are in the retail business. They collect the money and there is no reason why they shouldn’t be able to submit these taxes after they have collected them. We give them 23 days. It is on the 23rd of each month they must submit the retail sales tax collected for the previous month, so after the end of the month they then have 28 days to submit the tax, or at least to get it in the mail. I believe there is a five-day grace period after that.

If we find they are late in filing, the first time they will get a letter from us suggesting they should be perhaps a little less tardy and get it in on time. If they persist in late filing, then we do have a penalty and I think that is only just and fair. I don’t think our staff really harass any of our tax collectors, our vendors out there, but I think it has to be borne in mind that when they have 23 days to get their taxes in after the end of the month and then another five days before we consider imposing a penalty, we are being very lenient with them.

It is not as if we were asking them to send us some of their money. All we are asking them to do is to submit the taxes they collected on our behalf, so it is not the same thing as having to dip into their own pockets. In some cases I must admit they use our money they have collected instead of submitting it to us, to pay some of their other bills. We can’t really go along with that sort of situation. We eventually have to collect the taxes owing the province.

I am told the tax penalty is not cumulative. The interest rate is nine per cent per annum; that is not an unreasonable amount when we realize if we go to the bank today we have to pay something like 16 or 16.5 per cent to borrow money.

Mr. Haggerty: Are all those who submit taxes to the Ministry of Revenue -- all of the persons remitting, the businesses or enterprises that submit their taxes to the ministry -- are they all treated on the same 23-day period or are there some staggered to give them up to six months, five months, three months or what? Are there variations given to certain industries or businessmen?

Hon. Mr. Maeck: Yes, there are variations. People who collect a very small amount may make arrangements with our district taxation office to pay every six months, or in some cases even only once a year if it is a very small amount. We are quite prepared to deal in a rational manner with anyone. We don't want them sending in a retail sales tax submission for a dollar a month or something like that, it is obviously not worth our while or their while; but in those kinds of situations they can make arrangements, through the district taxation office or by writing in to the ministry, to pay once a year, in some cases every six months and in some cases quarterly.

Mr. Haggerty: Again, the 23 days just doesn’t hold water for everybody submitting retail sales tax. The minister is telling me that at his discretion he can vary that period of time from 23 days to six months or a year.

What is the volume, though? The honourable minister said $1, but surely you don’t submit $1 at the end of the year. There must be some levels -- $50,000 or $20,000 or $10,000 or $5,000 or $2,000; does it all relate to the 23-day period?

Hon. Mr. Maeck: I will have my staff give me the amounts we are talking about. I am not sure of the amounts, I know we are talking about relatively small amounts.

What we are saying basically is this: If there is only a small amount the cost of mail alone is 17 cents, and if somebody --

Mr. Haggerty: One cent a day.

Hon. Mr. Maeck: If somebody is only collecting a very small amount it is not reasonable to ask him to submit taxes every month, so they do it quarterly or semi-annually or annually, depending on the amount of money. I will try to get you the amounts, or a rough estimate at least of the amounts we are talking about here. There are some 15,000 people who are on this kind of a program. They are not paying every month so I think we are being very reasonable and lenient as far as the vendors are concerned.

Mr. Deputy Chairman: Do we have to wait for a moment for that answer, Mr. Minister?

Hon. Mr. Maeck: I’m told by staff that is so. If it’s $1,000 a year or less it is $500 every six months maximum for the extended filing; and that of course would be $1,000 a year. I’m told also there are about 25,000-plus vendors on the six-month program.

Items 3 to 6, inclusive, agreed to.

On item 7; retail sales tax and other taxes:

Mr. Charlton: Mr. Chairman, I have a situation that’s been brought to my attention, which I’d like to raise with the minister, dealing with the purchase of musical instruments.

It’s my understanding -- and the minister can correct me if I’m wrong -- that if a board of education does bulk purchasing and sells musical instruments to its students at the bookstore or wherever they’re not charged retail sales tax, but if a student is going to a school where the board of education doesn’t happen to do the bulk purchasing, perhaps because it doesn’t have enough in terms of numbers to be bothered getting involved in that kind of thing, the student then has to pay the retail sales tax.

First I’d like to know if that’s correct; second, if that's true is there not some way that students could submit a note from the teacher or school and get a tax rebate on the retail sales tax?

Hon. Mr. Maeck: I presume my staff is preparing a reply for me and I'll have it for the member very shortly. It’s not something that has come to my attention personally but I do know that musical instruments purchased through the school would be tax exempt. I think that’s right.

I also know, of course, that if I go to a music store to buy an instrument for my child I’m going to pay sales tax on it. The member’s question was is there any way for my child to apply for a rebate on that sales tax, because if he had had the opportunity to buy from the school he wouldn’t have had to pay it? I understand that’s what the member is saying. He can understand the complications: every person who wanted to buy a musical instrument would say it was for their child. I don’t know how we, as a ministry, would enforce that kind of a policy, although I’m sympathetic to it.

I suppose there would be ways and means, if a letter was received from the principal saying that the musical instrument was purchased for the use of the student in the school; something like that could probably be considered.

Mr. Philip: Would an analogous situation be that of buying special car seats for posture, which I believe are exempt if a chiropractor or medical practitioner of any kind has written a prescription for that particular device to be used by the driver? If on the other hand he simply goes in and says it would be good for his posture to have one of these posture seats he has to pay sales tax, as I understand it.

Surely there would be some way of the school saying that this particular instrument is required for use in school activities, which would be analogous to the chiropractor saying that this is part of the treatment or program that a patient is involved in.

Hon. Mr. Maeck: I don’t know whether there’s an analogous situation there or not, but on this particular matter I’m told by staff that purchases by boards of education are tax exempt, but sales by schools to students apparently should not be tax exempt, we should be collecting tax; that means all students would be in the same boat. However, staff has asked for more details on this. If the member would give me additional information we could look into it in detail and find out the situation exactly.

[4:00]

Mr. Charlton: I will do that, Mr. Minister. I don’t have the letter here because it wasn’t sent to me personally. One of the members of our caucus received a letter I believe from an association of music teachers. I will get a copy of the letter for the minister so he can look into it.

Hon. Mr. Maeck: I would appreciate that. I would have thought they would be exempt if they purchased from a school but I am told that is not the case. When I think about it, I guess when schools are selling soft drinks or other items in the school they must collect tax. I have had letters about it before.

Mr. Deputy Chairman: You better be careful or they will all be paying sales tax. I gather the minister does not mean he is going to follow up this matter right now but at a later date.

Hon. Mr. Maeck: Yes, but I have one other note here from staff. Instruments have to remain the property of the school to be tax-exempt; instruments cannot be the personal property of the students. This means if the school purchases instruments, fine, it doesn’t pay any tax; but the students just use the instruments, they don’t buy them. If they bought them they would have to pay the tax. That puts those students in the same boat as a student who might buy an instrument from a music store. None would be exempt except the school board itself.

Mr. Deputy Chairman: Perhaps the member for Hamilton Mountain won’t want to produce that letter now.

Hon. Mr. Maeck: I don’t think it would be necessary.

Mr. Haggerty: Has the ministry or the cabinet given any consideration to removing the provincial sales tax on building materials for the construction of new homes? I am sure the minister is well aware of the high interest rates new home buyers are faced with today. They have been substantially increased in the last four or five years, from about eight or nine per cent to 15 or 16 per cent, and in some cases they may even be higher.

The minister is well aware that every time the American government increases its interest rates the Bank of Canada seems to follow suit. It does not seem right that purchasers of goods in Ontario have to borrow money at high interest rates as the result of poor management by the American government. That seems to be the crux of the whole matter of rising interest rates: the poor management of our friends to the south. We seem to follow the American practice; when their interest rate goes up we have to raise ours also. I think it is an injustice, particularly to those purchasing a home.

I think the Ontario government should find some relief in this area, and I suggest to the minister that removing sales tax on building materials for housing would be of help to home buyers and would without doubt assist the slowing economy now facing Ontario. I am told a great number of unsold houses will be sitting there for quite awhile. Builders in my area have gone seeking jobs in industry because they cannot sell existing houses on the market. People just cannot afford the high interest rate.

Perhaps this is an area the government should be looking at. Removing the sales tax on building materials would provide at least some break on the cost of new homes and in that sense subsidize the high interest rate. Has the ministry or the cabinet considered such a step?

Hon. Mr. Maeck: The matter of removing sales tax on building materials has been discussed many times within the ministry, within Treasury, within the government, and I am sure in this House. In the last year or two we have been removing sales tax on building materials, we have been removing sales tax on insulating materials and so on. I think I agree, as has always been thought, that if the retail sales tax were removed on building materials there is no guarantee the benefit is going to be passed on to the person who is building the house. I would suspect that in most cases the seven per cent would suddenly appear in the price of the material. Instead of the province and the taxpayers getting some revenue, it might be going to some other group that would be selling the materials.

In other words, there’s no way of guaranteeing that when you remove a tax that tax saving is going to be passed on to the person you are trying to help. I don’t disagree with the member when he says the interest rates are high and that’s the reason houses are not moving, but I might say also that I don’t think that’s the only reason they’re not moving.

In most areas of the province there is now not the shortage of housing there was a few years ago. There are a lot of houses on the market, I don’t think we need the stimulation we needed a few years ago when we talked quite a bit about removing the sales tax on building materials to stimulate housing construction. In this day, while we might need the stimulation for employment purposes, there are a lot of vacant homes sitting around this province and a lot of them were sitting around prior to the interest rates going up.

I’m not saying the interest rates aren’t a deterrent to houses moving. But I really believe, if you look at the ads in the papers, at least in the area I come from there is quite an abundance of housing right now in Ontario. As I have said, I have two math objections: One is the fact that there’s no guarantee it would be passed on two, we could lose a tremendous amount of tax dollars. My staff estimate, roughly, that if we were to remove the sales tax on building materials it could come to anywhere between $150 million and $200 million a year, which is an awful pile of money to take out of the budget at one point.

Mr. Haggerty: Thank you for those comments, though I think you could well work it. You worked it here a few years ago with the first-time home buyer’s grant. That’s actually what it was. We almost figured out what the sales tax would be on the purchase or construction of a new home and at worked out to about $1,200 or $1,500 at that particular time.

You could work it with the same program you had for the home buyer’s grant on the retail sales tax. Once the home is constructed and the person has moved in, then the retail sales tax could be rebated and go directly to the purchaser of the home.

I quite agree with the minister. It’s just like the time they removed the sales tax on shoes up to $30 and you were taxed beyond that amount. All of a sudden shoes all went up to $29.95, even for two year-old tots. That is what happened, the price went up. I’m not sure whether the saving was passed on to the individual purchaser of the shoes. It was another way the retailers seemed to capitalize on the sales tax. I think the minister is aware of that.

That’s another area that perhaps I should be looking at when I talk about the retail sales tax on shoes. There should be a break given to the person employed in industry. If you have to go out and buy a pair of safety shoes you’re paying well over $30 for them, and they could go as high as $40 or $50,

Mr. B. Newman: You buy a regular pair for that.

Mr. Haggerty: They’re pretty expensive. But when a person has to start paying a sales tax on that it is quite a story in itself.

I understand -- and hope I’m correct on this -- if certain industries supply their employees with the boots there is no sales tax. But the employees still pay it out of their weekly cheque. If the employee buys them individually he still has to pay the tax. I could be wrong on that, but there’s an area in which the minister should be looking. You should give the guy who is keeping your business going the wage earner in Ontario, some breaks on some of these things. When he has to go out and buy a pair of coveralls, I don’t have to tell you the price, of those today. Coveralls or wearing apparel for special working conditions are expensive. Shoes are one of the most expensive articles there are, and some people go through about two or three pairs a year. It can be rather costly. In some particular areas that should be considered as a write-off, just as management has a certain amount of write-offs for the purchase of goods they have to use. Not because of necessity but because they are for their protection. You should be looking at that area to remove the sales tax on articles such as work boots.

Hon. Mr. Maeck: It’s not just work boots that are taxable. I have to pay sales tax on my shoes too. I don’t think I can buy them for under $30 any more. They’re usually over that, so I’m paying tax on them. It’s the same with my clothes. We’re all in the same boat. Under personal income tax, the federal government does have an allowance or exemption on working clothes of up to $300. I think there is a benefit there.

Mr. Haggerty: That should be even higher.

Hon. Mr. Maeck: You can buy quite a few work clothes for $300; I think it’s reasonable. I doubt very much whether they go through three pairs of those heavy shoes a year; but maybe they do, there might be certain jobs where they do.

Mr. Haggerty: If you’re working around furnaces where there is hot metal you can go through them in no time.

Hon. Mr. Maeck: However, while I always have sympathy for the working man and would like to see us give him as many breaks as we can --

Mr. Haggerty: I can see the tears in your eyes.

Hon. Mr. Maeck: -- I think we have to be realistic and realize we do have to collect a certain amount of revenue to run the province. You can come up with all kinds of things I can be sympathetic to from a personal viewpoint and on a personal basis, but the first thing I have to think about is how do they affect the revenue of the province. In order to run the other programs you may be in favour of we have to collect the money somewhere.

Mr. Haggerty: It has been about 45 per cent for about three years, or 15 per cent increase for one year.

Hon. Mr. Maeck: If there is a real hardship in some of these areas I’m certainly prepared to look at it. With the personal income tax deduction of up to $300 for working shoes, clothes and so on, it isn’t a bad break. It’s not perhaps as good as some people would like, but at least it’s a step in the right direction.

Mr. B. Newman: I wanted to raise an issue that is raised every year with the minister. It concerns some method of assisting the physically handicapped in the purchase of miscellaneous items. There are children wearing adult-size clothes, as a result they have to pay sales tax because these are over a certain size. The handicapped have to buy crutches, wheelchairs and miscellaneous equipment like that. I think there is a sales tax imposed on that.

Mr. Deputy Chairman: Has the member finished?

Hon. Mr. Maeck: He is waiting for an answer to that. Speaking now off the top of my head, I believe orthopaedic equipment and so on is tax free, although my staff is preparing a proper answer. I’ll have it for the member in a minute. If he wants to continue with another item I’ll get back to him.

Mr. B. Newman: Will you look into other types of assists for the handicapped and not just the few of which I made mention? It’s bad enough being handicapped without having to pay a substantial sales tax.

Hon. Mr. Maeck: While we’re waiting for that answer, my ministry does, from time to time, meet with the committee for the handicapped. I forget its official name -- to get advice regarding tax matters. I’ll probably get the proper name for it in a moment. Usually their advice to us has been they’re not looking for a reduction in taxes. What they’re looking for are better programs from the social policy field. They don’t think taxes are the right way to go as far as looking after the handicapped is concerned.

Mr. B. Newman: They get neither.

[4:15]

Hon. Mr. Maeck: I’ve had advice from them on such things as the retail sales tax exemptions on vehicles that have been converted for their particular use. I have had submissions from other people who, because they had a leg off or something, asked for a sales tax exemption on a regular car -- well what I would call a regular car, one with an automatic transmission for example. There really is no change in the vehicle itself but they feel because of their condition they have to buy a car that is not standard, that does not have a standard shift with a clutch and brake and so on. I have taken that sort of a case to the committee, the members of which are handicapped people themselves, a lot of them, and they have said no, they would prefer to see the assistance come from a different direction rather than tax exemptions. They agree with the tax exemption as far as a modified vehicle is concerned because it requires special work to build that vehicle to accommodate them, they feel that is a legitimate tax exemption, but they don’t think we should be going beyond that.

It is the same thing with assessment. We were talking about that a little earlier. A private member’s bill was introduced very recently, in the last few days, requesting exemption from assessment if a house is modified for someone who is handicapped; yet that committee with which we deal from time to time has suggested that isn’t the right way to go, if there is going to be assistance it should be in a different form. Rather than asking a property tax assessor or a tax man to make decisions of that kind there are qualified people who should make those decisions in the social fields. Their general thrust and their general outlook is not to do these things through the forgiveness of taxes but rather to implement the programs in another way, which would be through the Ministry of Community and Social Services or the Ministry of Health.

The exemption, according to the act, is an exemption for artificial limbs and orthopaedic appliances. There is an exemption for equipment designed solely for the use of blind persons, cripples or chronic invalids; that covers a fairly wide range of exemptions.

Mr. B. Newman: You mentioned certain groups and organizations which thought there would be a better way than the sales tax approach. It is kind of strange, because I have a letter from the Muscular Dystrophy Association that specifically indicates a sales tax exemption. They mention that some system of exempt cards, similar to senior citizens’ cards, could be worked out. Naturally they would have to be authorized and signed by some official government agency or individual in government, because it is going to be a purchase for that individual who has the specific handicap.

I know it isn’t a simple problem to resolve, but I think we in government have to set the example and do everything we possibly can to make life a little more comfortable for those who have any type of a handicap that limits their mobility. Just as we ask for specified parking areas in municipalities and at the service centres on 401 and so forth, we have to take a new approach to these people as far as government is concerned and bend over backwards, so to speak, in attempting to alleviate the problems they suffer.

I hope you could find an approach, or your officials; I would think they are intelligent and capable enough, bright-minded enough to come up with some type of answer. I would think some jurisdiction does have a partial answer to the solution.

For example, there are chairs which have electric lifts to assist an individual who has difficulty sitting up or getting up from an armchair. You just press the button and the seat elevates and puts the individual on their two feet. I understand that runs about $1,800 for the chair and by the time you finish paying sales tax on that it is a substantial amount of money. I know, Mr. Minister, you are just as concerned as anyone on any side of the House, but I would like to see a little more effort spent on the part of your officials to find something that is at least a partial answer and maybe a complete answer to assisting these people -- you name the style of handicap -- so that we can make life a little more comfortable for them.

Hon. Mr. Maeck: As the member has said, certainly I have every sympathy. I can give you the proper name of the people we consult with from time to time. It is the Ontario Advisory Council on the Physically Handicapped. If we have some doubt about a car that has been remodelled, for example, they make the final decision on it and give us advice as to whether or not it should be tax exempt.

Just as a matter of interest, to March 1978 there have been 256 claims that have been rebated to physically handicapped people in the amount of $100,222. To February 23, 1979 there have been 457 claims and the total amount of rebate is $168,216. Out of that amount, $29,343 was paid to nonprofit organizations, which are also exempt under certain circumstances.

Mr. B. Newman: One of the problems with that approach is that many people are a little backward and shy and don’t want it known that a member of their family is handicapped, so they won’t go to one of the national or provincial organizations.

Hon. Mr. Maeck: They don’t have to go to them.

Mr. B. Newman: They would like to be able to go directly to a sales tax office.

Hon. Mr. Maeck: They can apply directly to us if they so desire, and most of them do. If there are any complications or if we need any advice on it, those are the people we go to for advice. I did give you a list of the items that are tax exempt, and we are open to suggestions all the time.

The suggestion you made about the new chair is something that staff should certainly look at to see whether that should be given a tax exemption; we are open to those kinds of suggestions. The only point I was trying to make was that we are tax collectors.

Mr. Haggerty: Of the worst kind; you have no heart over there at all.

Hon. Mr. Maeck: We are really not in the social field. While we are prepared to cooperate, I think decisions should be made by someone who is perhaps a little better qualified to make those decisions than we would be as tax collectors.

Mr. B. Newman: You make a good point, Mr. Minister, but I would still like to see your officials look at it a little more seriously, because the numbers you have mentioned to us that have received tax exemptions really is just a drop in the bucket when you look at the number who are handicapped in our province. It is a start, it is a good thing, we commend them for doing it; but let’s expand it as much as we can.

We are not asking anything for anyone other than those you have sympathy for, as I think everyone else in this House has and as have I. I don’t think I am any more sympathetic to them than anyone else is here.

Hon. Mr. Maeck: The point I was making when I gave you those figures is I was dealing only with automobiles that were converted for the use of the handicapped. I am dealing with no other item at all. I am not talking about artificial limbs or anything like that in that figure. I am talking only about vehicles.

For instance, some vehicles may have to have a much wider door than others, so it is a specially manufactured vehicle for that particular person. That is the type of thing I was referring to when I gave you the numbers. That isn’t the total number of things we have done for the handicapped.

Mr. B. Newman: There are newer types of devices and equipment coming out every day and I hope your officials, as they get requests for tax exemption on these new pieces of equipment and so forth, look favourably on them.

Mr. Haggerty: I was just discussing this with my colleague, the member for Niagara Falls (Mr. Kerrio), and he says the minister has a rather tough job over there to collect taxes. He said you can’t keep up with your colleagues who are spending so fast over there.

The member for Windsor-Walkerville is making a strong plea. I suppose the minister should be looking at the good book, St. Mark, chapter 2, about how Levi, the tax collector for the Romans, was taking the taxpayers every way he could think of. Then one person came along and said, “Follow me,” and he saw the light and there was a change in him. This is what the member for Windsor-Walkerville is trying to indicate to the minister. Let’s have a change of heart for the handicapped persons throughout Ontario and really give them some assistance.

Mr. Deputy Chairman: Levi worked on a percentage though.

Mr. Haggerty: Don’t tell him that.

The minister, in a previous question I asked him about the retail sales tax, was almost crying that there wasn’t enough revenue coming in, however if I look at the track record of the ministry’s estimates over the last two or three years there has been an increase of almost 15 per cent in the last three years, and that’s a substantial windfall.

Perhaps much of it can be derived from metric conversion, which the government so enthusiastically got on the bandwagon with. It is a great thing for the government. I remember last year during the estimates I raised a question related to the gasoline tax, and you said at that time the conversion would bring in about $4 million more.

I don’t have to tell anyone that every time a person wants to get some work done on his automobile or get his oil changed in the car, instead of taking four quarts of oil it now takes five. If one looks at the revenue generated, the windfall profits from that alone, one would think some of it should be passed back to the consumer; but apparently even the plea from the member for Windsor-Walkerville isn’t receiving too much attention today.

I bought some antifreeze the other day. I looked at the price of it and I thought it was just out of this world, I happened to look at the shelf and said, “You have some old stock there from last year.” I bought the old gallon at that time and I compared it to the present metric conversion, and there is quite a difference in the quantity alone.

The consumer is buying a small quantity today but the price has increased substantially and has brought revenue to the ministry. I think this minister is part of the con game that has taken additional revenue from the consumers of Ontario and added to it the windfall profits from the large increase in the retail sales tax over the last two or three years. I think eventually there is going to be a breaking point on this and we are going to have to see a change on that side.

I don’t think the public is going to stand for it much longer. They have been hoodwinked into metric conversion and it has been costly to the consumer. Almost everything he buys today in the grocery store or for his automobile has an increased price on it. You have been part of that inflationary cost that has spiralled in the last four or five years by going along with metric conversion.

It is not necessary in Ontario or even in Canada. Our greatest trading partners are the Americans and they aren’t jumping on that metric conversion bandwagon. I suggest the government should take another good look at this thing. All it has brought is windfall profits to the ministry here and profits to the large corporations. I think it’s time the government takes a second look at this thing. If they wanted to get into a study they could find out just what effect it has on the consumers. It’s been costly and I think it’s something that wasn’t necessary at this time.

Hon. Mr. Maeck: There is no question we have an increase in revenue in retail sales tax over the last two or three years; but I think to be fair one also has to look at the other side of the ledger, we have to realize what the demand for dollars has been on the government as well. Inflation does feed us more taxes. If the price of something goes up we gain, there is no question about that; and inflation has been moving for some time. It is not that we have raised the rates of retail sales tax, we haven’t raised them. It’s seven per cent and has been --

Mr. Haggerty: You don’t have to when one has to buy five for four.

Hon. Mr. Maeck: By the same token, our expenditures are going up too, because of inflation, the same as everyone else’s. So while we may be showing a bigger revenue in retail sales tax, if you look at expenditures --

Mr. Haggerty: It’s poor management.

Hon. Mr. Maeck: It’s only fair to compare our expenditures. You can’t make the comparison just in this ministry, you must deal with the government situation in general; what it’s costing us to operate now as compared to what it cost when we were taking in less in retail sales tax. I think everything is fairly relevant. We haven’t added items to the retail sales tax over the last couple of years since I have been the minister.

Mr. Haggerty: It is not too many who want to --

Hon. Mr. Maeck: As a matter of fact we have eliminated things, we have taken some off; for example the energy package that we brought in in the last session, all of the insulating materials that have been given an exemption. Mind you, on the other side of the scale, before the member for Hamilton Mountain stands up, I admit we are collecting some retail sales tax on cable TV and other items like the rolling stock on railways; we have added those items, but the seven per cent has not changed over that period of time. Those are some of the reasons our revenue is up.

The cable TV thing is not going to show on the figures you have now because it was only implemented in March. We won’t know what results that will produce until the next time around. There have been some items that have been added and some items that have been deleted, but as I recall the last budget that we brought in, overall, in all of the taxes that we dealt with, I think there was an increase of something like $80 million or in that neighbourhood projected overall in the entire budget.

Mr. B. Newman: Mr. Minister, the government apparently will be opening duty-free shops at all points of entry to the United States, that is all points of entry in Ontario to the United States. The federal authorities have already permitted that and it’s just a matter of time before Ontario will be selling alcoholic beverages without a tax to our American friends. Have your officials estimated the loss in revenue as a result of these shops; I would assume that maybe from the duty-free shops at the airport you might have an idea as to what it will cost the citizens of Ontario in tax losses?

Hon. Mr. Maeck: The only tax in which this particular ministry is involved with liquor is the sales tax. As the member has already indicated, Americans would be taking it out of the province. Sales tax is a consumer tax. It’s not being consumed in this province so therefore it would be exempt from tax, the same as the program we announced. Foreigners can buy any goods exempt from sales tax in the province and take them out.

Mr. B. Newman: Mr. Minister, you really don’t get what I am referring to. You have people now who will take advantage of this. They will cross from Detroit into Windsor. They will go into the store. They will buy the items that they wish to purchase and they will go right back over to the United States --

Mr. Haggerty: Forty-eight hours.

Mr. B. Newman: -- without paying a sales tax. Normally they still would have come into Windsor, but they would have had to go into a regular liquor store, during certain specified hours, to be able to buy this. Now we are not going to get that revenue because they are not going to have to go into a liquor store. They will be able to go and bring it into the United States on that 24- or 48-hour exemption.

Hon. Mr. Maeck: I am informed by staff that actually the province doesn’t involve themselves in the duty-free shops, it’s the federal government.

Mr. B. Newman: I know you don’t, but that individual would have had to have gone to a liquor store to purchase the article, wouldn’t he? He would have paid the sales tax, or it would have been built into the price of the bottle of alcoholic beverage. It is in there, you are not selling it to him for nothing; but when he goes into the duty-free shop he is no longer paying, let’s say, $10 for the bottle, he is only paying $8 for the bottle. There is $2 of revenue lost to the province.

Mr. Haggerty: More than that.

Mr. B. Newman: I am being very conservative.

Hon. Mr. Maeck: I am told by staff it is the federal customs people who should catch that situation, not us. I know what the honourable member is getting at. He is telling me when the duty-free stores are right at the border people don’t have to go any further than that to do their shopping and go back over. They don’t leave any money anywhere else at all, and they just --

Mr. B. Newman: Not necessarily.

Hon. Mr. Maeck: Not necessarily. I don’t know the answer to that. It is not a policy this ministry deals with at all, in any way, shape or form. I could pass your concerns on perhaps -- I don’t know which ministry it would be.

Mr. B. Newman: There is a loss of revenue to the ministry or to some government agency from the fact that the article is purchased at a cheaper price because no longer are taxes involved on the article. It is duty free, so the buyer is paying substantially less for the article going into that duty-free shop and bringing it across the river to Detroit rather than going into one of our regular stores in the city of Windsor and paying the regular price plus all sales taxes on it.

Hon. Mr. Maeck: He doesn’t have to pay sales tax if he buys it somewhere else. If he comes over from the United States he can buy it tax free. All he has to do is apply for the retail sales tax rebate. It doesn’t matter whether the price is $3 at the border or $7 in downtown Windsor, the fact is there is no retail sales tax anyway.

The honourable member will recall the pamphlet I sent over when we announced that people out of province could purchase tax free, so that people in Detroit or wherever can come over to Ontario and buy. They can buy an automobile or anything else tax free. They either fill the application out at the time, or they take it with them and apply when they get home, but they can purchase it tax free.

Mr. B. Newman: I understand all of that, but that individual will come to Windsor on a Saturday afternoon, he will buy the article and he will go right back over to Detroit and he will simply make a declaration he had been in Windsor for 24 hours or 48 hours, the required length of time.

I know he can be travelling from Buffalo through to Windsor and take two days or a day, whatever is required, and buy it and declare it on the American side without paying any type of tax, but he is going to be buying it at a substantially reduced price in the duty-free shop.

Hon. Mr. Maeck: But he doesn’t have to he here any length of time today. He doesn’t have to be here 24 hours or 48 hours to buy goods free of retail sales tax. There is no reason for him to be here any more than 10 minutes. The honourable member and I will talk about it later. I think there is a misunderstanding.

Item 7 agreed to.

Vote 802 agreed to.

On vote 803, guaranteed income and the tax credit program:

Mr. Swart: I want to take a few minutes -- not too long -- on the issue of the administration of the property tax credits. I have expressed concern a number of times over the last two or three years about what is taking place in the property tax credit field, and I want to reiterate and re-emphasize the seriousness of it in these estimates.

We all recognize, as I’m sure the minister does, that the property tax credit was brought in to relieve the regressiveness of the property tax, which has been shown by studies made by Mr. White and many others to be a very regressive tax. It was introduced, I believe, in 1972. Then I guess it would be fair to say in 1974 the tax credit was very much enhanced and brought to a level which to a very substantial degree did almost totally relieve the regressiveness of the property tax. I give credit to the government for doing that. I think that was a good move that was followed to some extent by other jurisdictions in this nation.

Since 1974, the property tax credit has come to be a lesser and lesser part of the total taxes paid by the average person on low income in this province. The regressiveness which existed before has been now reoccurring to a very substantial degree. I’m hoping the minister will very seriously consider making recommendations, because I think this is what should be done in his case for changes in that property tax credit.

The minister probably knows mill rates in this province during the last four years, from 1974 to 1979, according to the figures from the government itself, went up by 61 per cent. Actually, the average residential property tax went up a bit more than that because, as we know, the average assessment per home has increased somewhat year by year because of new buildings and improvements in the homes. In fact, the average property tax has increased by about 65 per cent in the last five years. I think the minister’s staff would bear out those figures.

The property tax credit during that period of time has only gone up from $387 million to $455 million for this year. That is an estimate from this year which was taken from the budget. That’s an increase of about 18 per cent while taxes have gone up by 65 per cent.

The minister shakes his head. Let me pull out some of his own documents. Let me refer to Advance Notice of 1978 Provincial Transfers to Local Government, Municipal Spending and Mill Rate Performance, 1974 to 1977, turn to page 3 of that document where it states that during those three years, from 1974 to 1977 the total percentage increase in residential mill rates was 43.5 per cent.

According to the minister’s figures in the following year it was 5.1 per cent; but this has to be compounded, and that’s on top of the 43.5 per cent. This year it is estimated to be 6.9 per cent. If these figures are compounded on top of the 43.5 per cent, that brings it to 61 per cent.

I suggest that figure is correct. If you add in the increase in assessment per residence also, the increase which takes place and which is adjusted for the equalization factors about every other year, you will find it brings it up to 65 per cent. I say that statement is correct.

It’s had enough that the property tax credit has fallen relatively by that amount, which is a very substantial amount, but if the minister looks at his own figures he will find the property, the increase in the property tax credit to those on the lower incomes -- those in the $5,000, $7,500 and even up to $10,000 range -- has not increased by that average 18 per cent. It has increased by between 15 per cent and 16 per cent. Again, that is from the figures of the government of Ontario. Here we have a situation where people, particularly in the lower income bracket, may have received -- and I am going to go into that in just a minute -- about 60 per cent of their taxes being paid by the province in 1974 under the tax credit system. Now we find that has been dramatically reduced.

[4:45]

What it means is the increase in the property tax burden has fallen most heavily on those in the lower income groups since 1974; the net tax they have to pay has increased, percentagewise, far more than it has for those in the middle and high-income groups. We have a program of restraint, we hear predictions -- and it is already taking place -- that the standard of living is going to fall, the cost of living is increasing more rapidly than the average income.

Statistics Canada stated at the beginning of October or November that in the preceding year the cost of living rose nine per cent and the average income had only gone up by six per cent. That is something we, in this party, do not think should necessarily take place, because there is a solution to it. But you are the government, and there is the government in Ottawa; therefore, it has taken place. That’s had enough, but when you have the burden falling more heavily on those in the lower-income brackets -- and property tax is a fairly substantial tax -- you should take a new look at this and make recommendations.

Let me give you some figures taken from your own documents; I hope your staff will check them out afterwards. In 1974 on a standard property tax of $500, a person with an income of $5,000 that year -- which is low, but there were many such at that time, including old-age pensioners, who had an income around that level -- they had a tax credit on that $500 of $310. I am sure you are familiar with how that is worked out. If they were old-age pensioners they got that amount of tax credit. That left a net tax of $190.

The tax on the same house in 1979 at the average increase of 65 per cent would be $825. If those persons had the same income -- and that is not normally the case; they would have had an increase in income; but if they did have the same income their taxes would be $472.50 as the net to be paid. The tax credit on the $825 would be $340, and the balance of $472.50 would have to be paid. This is up from $190 to $472.50. If their income had gone up during these five years in comparison with the guaranteed annual income, the tax credit would be even less. In fact, the amount they would have to pay would be a net tax of $512.50.

I am sure that if your staff goes into this they will concur, generally, with the figures I have given. These are old-age pensioners who paid a net tax of $190 in 1974 in property tax; on the same house this year, 1979, they would pay $512.50.

The contrast is not quite so great for someone in that income group who is not an old-age pensioner; that $110 would remain the same. After deducting $110, that person would pay $300 in 1974; that figure is rather easy to compute; but now they would have paid $582.50 with the same income, or $622.50 if their income had increased in line with a guaranteed annual income.

If you look at the percentages on those, the pensioner with his income going up is paying two and three quarters times as much in net taxes; the person who is not a pensioner would be paying 90 per cent more than in 1974.

To put it another way, in 1974 the government was paying more than 60 per cent of the tax and now it is paying less than 40 per cent. Conversely, the old-age pensioner was paying less than 40 per cent of the $500 in 1974; now he’s paying more than 60 per cent of the $825.

Mr. Bradley: Remember Darcy said he was going to fix that all up in his budget?

Mr. Swart: I remember. I have that budget right here. He was going to bring in a whole new program for the senior citizens and relieve them of their taxes, That $110 was going to be raised to $400 and they were going to relieve them.

I’m not even asking for that here today. I’m asking the minister to take a look at it and at least keep up the same percentage they were paying back in 1974. Surely those on low incomes, and this applies to those up to $10,000 or so, in a decreasing proportion, should not have to bear the brunt of the restraint program of your government.

I’m asking the minister to make an adjustment on this so that those old-age pensioners and others on the very low income don’t go on to suffer this kind of tax abuse which is being applied against them.

I hope when the minister gets up he will make some answer to this. I hope he will say whether he has any plans to make any adjustments in this field to enrich that, or to make any adjustments in any way to this so those people get a fair break.

What I’m really saying is that the property tax credit really should be indexed to the increases in property tax. I think that’s not an unfair way to do it. I would like the ministry to consider that.

I know the minister doesn’t have all the control. He’s got to go to the Treasurer (Mr. F. S. Miller), he perhaps makes the final decision on that; but the minister does administer and I hope he will bring to the Treasurer’s attention this hardship that is being applied against those on low incomes.

The second point I want to make with regard to the tax credit will be brief, I made it before. Although it is called a tax credit at the present time, it takes on the connotation more of a tax refund. The person has to pay the total tax, whether it’s in July or whatever the time of year, and then wait until the next April until he gets either a credit, or often, with the low-income earners, a refund on those taxes.

There are two reasons I feel strongly, and my party feels strongly, that this tax credit, recognizing administrative problems involved in it, should be applied at the time the taxes are paid. They shouldn’t have to pay this and then get it back at some later date. I think it is possible to find a way of avoiding that.

One reason I feel it is important, and I’m sure the minister would agree with me on this, is that if they get a tax credit at the time they pay the tax there is a realization on their part, if they went in to pay taxes of $800, and there was $300 deducted right at that time that it is a tax credit. Now they get it back later in the following year and many of them don’t really relate it directly to taxes paid. I’m sure the minister would agree with me on that. It’s desirable for people in a democracy, or whether you have a democracy or not really, to realize what is taking place, You have greater accountability if that is the case. It’s important people know what is taking place. If they are getting a tax credit it is directly applicable to that amount of money they’re paying and the government of this province is paying part of that tax for them. I think it’s important for that reason, but a greater reason, which these people have already stated of course, is they now have to find the money.

Many of the people on lower incomes, as we’re all aware, live from hand to mouth. They wait for their old-age pensions and the Gains cheques to come in at the end of the month. They hold off buying things. They don’t have any reserve or any reservoir they can coast on. When they get a tax bill of some $500, $600 or $700, whatever the case may be, it is a real blow to them and they have real difficulty paying it. If there is some way of working out a tax credit so they didn’t have to pay that, I think it would be extremely desirable.

I want to throw out two suggestions. One comes from my colleague from Hamilton Mountain, who is not in his seat right now but is coming in. One method might be, where there are wage earners at least, to have them declare this on the form they have to fill out yearly, or often yearly, if there is any change yearly with regard to their dependants, et cetera. That form could be filled out each year and they wouldn’t have that deducted from their income tax.

Because so many of these people who get the main advantage of this, or should get the main advantage of this, are very low income earners, like senior citizens who don’t get a weekly wage per se, I think it could be better worked out by having a credit at the time they go to pay their taxes.

I noticed administratively there can be problems with regard to that, but I suggest to you the government of this province, the government of this nation, and perhaps it’s the federal government which has the prime responsibility, could devise a way where they would have a table sent to the local municipalities. Once a person has sent in his income tax form -- and let’s make no mistake about it, the senior citizens and those on low incomes and have some refunds coming are the first ones who send them in -- they could send to that person a statement -- it would only have to have his name on it and the amount -- which says he fits into a certain category. That would entitle him to a certain percentage of tax rebate. When he went to the municipality he would take that with him so the notice could go to the municipality. Those or details that can be worked out. I suggest to you because most municipal taxes are not paid until July at least, the tax bills don’t go out and are paid in the latter part of the year, and your income tax is sent in in the early part of the year, it would be possible for the government to do this. They would have a form stating the tax credit that person would be entitled to for that year, so they wouldn’t have to find all of that money to pay that tax and then get it back a year later.

I want to reiterate I believe the property tax credit should be indexed to property tax increases, so those on the lower incomes don’t keep on losing year by year, as has been the case since 1974.

I want to say the property tax credit should be applied at the time of payment of the taxes. There may be a percentage where this would not work and they would have to get it at the end of the year, but I think it could apply to the majority of the people.

Finally, I want to ask the minister a question. I’m not sure if this has been raised before, but first of all we on this side of the House feel very strongly that the property tax credit which is going to be given by the federal government should in no way be deducted from the property tax credit which is given by the provincial government. I believe this year it’s going to be $62.50, and it’s going to be increasing, to every person who lives in their own home. I’m hoping when the minister gets up he will have a flat commitment that it will not be deducted in any way from the property tax credits of the provincial government, because yours has been decreasing as a percentage quite dramatically year by year and when the federal government is going to give it, it should go to these people and in no way should be deducted from the provincial property tax credits.

[5:00]

Mr. Chairman, that concludes my remarks. I just want to say that these suggestions, recommendations however you want to take them -- are given in good faith, in good part, to you. If my figures are correct -- and I suggest they will be borne out; there has been that dramatic increase in net property taxes for those on lower income -- you yourself in government will want to take a look at this and see if there is some way of adjusting this, of enriching the property tax credits. Give it the high priority it deserves, because those people on those low incomes find property tax a seal burden.

I know, and I am sure the minister does too, after the tax bill goes out you have those people on lower incomes coming to you and saying, “I don’t know how I am going to pay these taxes. They go up every year.” The last two years they have not gone up as much on the average in Ontario as they have previously, but this year they went up significantly more than they did last year and I am afraid that is kind of a bad omen; that is due primarily to the government restraint program

I hope the minister will have some comments to make on this and give some kind of a commitment that he will be reviewing this whole thing to see if we can find something more equitable and something that more nearly relates to what your government did back in 1974.

Hon Mr. Maeck: Mr. Chairman, certainly I will make a commitment to the member to look into the concerns he has registered and check into the figures he has given me. He sort of took me by surprise on those; they may have been my figures or they may have been Intergovernmental Affairs’, I am not sure. And I am not sure whether the member is referring to residential property tax there or whether he is talking about property tax right across the board in the province. There is certainly a difference.

Anyway, we will examine very closely what you have said. I am certainly sympathetic to assisting the seniors and the low-income people as much as possible. I am sure you are aware that all I can do really is make recommendations to the Treasurer who would make the final decision in a matter such as this -- and the government itself, I suppose.

The second item you raised -- the matter of getting the cheques to the recipients in a proper manner and at the right time for them to assist in paying the taxes and so on. We have looked at that quite a few times. We realize there are some problems there. As you know, we are tied at this point in time to the federal government income tax system. Application is made when they file their income tax and then the cheque is mailed from Ottawa and if they happen to owe any income tax it is deducted and they get the balance, and so on.

There are two ways in which we might be able to do something to change that. One is for the province to assume responsibility completely and do it ourselves. Then we could do the kind of things that you are suggesting. But as long as we are working through the federal government I think those kinds of suggestions are impossible because we can only work within the framework we are given by the federal people.

One of the big problems we have had in trying to work this situation out is that we pay one per cent to the federal government to administer that program for us. As the member indicated, it will cost us $455 million this year. Within our ministry I had my staff project what it would cost for the province to assume full responsibility and do this program ourselves, from the ground up; in other words, asking the recipient to submit directly to the province and have it processed by the province and a cheque go out at the proper time when taxes are due, instead of coming in long after they have paid theft taxes, which does give them some real problems. The estimate that I have on the cost to set up that kind of bureaucracy is around $30 million.

That is to set it up. That would include the computer service and all the other things we would need to do it. From then on the cost would probably reduce to maybe $20 million a year. I would then have to justify to the people of the province why I am spending $15 million a year extra to get the cheques out to these people, which would be very difficult to do. I would also have to justify to my colleagues and to you people across the House.

First of all I would like to see the province have total credit for the money being expended on this program, but mainly be able to get the cheques out at the time they need them, that is really important. In order to do that we would almost have to go to a complete provincial program.

There is a second way of doing it, but I don’t know whether that could be arranged or not. It could be that perhaps, some day, we could have the computer tapes sent from the federal government giving the names, addresses and the amounts of the property tax rebate, property tax credit, property tax -- whatever term you want to call it. If those tapes could be made available to us, then the cheques could be issued from the province directly. The problem there would be with the timing, whether we would have them in time to be able to assist in getting the cheques out before the taxes became due.

Right now, those who have been on the program for a few years I presume may have adjusted a certain amount as to the timing because they actually do get their cheques about the time the first property tax bills come in, but they are really getting them for the previous year, not for the year they are paying the taxes on. Whether that adjustment could be made while we are using the tapes from the federal government I am not sure. I doubt very much if we could change that timing unless we went directly to our own program with our own bureaucratic set-up.

I really hesitate to go into that, because the other thing that concerns me about that is we would be asking those people to file, in essence, almost a separate income tax to us, another form. They now have to fill out their income tax form and the information derived from that is transferred to another form which is sent in with their income tax form. If we were to go separately and do it all on our own, we would have to ask each one to individually submit an application to us. I don’t know how that may be received. People are sort of fed up with bureaucratic red tape and forms that they have to fill out now. To ask them to fill out another may be a burden.

Another thing is senior citizens, particularly in my area, either have somebody in the local golden age club or in the senior citizens’ clubs sit down and assist them with their income tax forms or they pay someone $5 to do it. There are some people who will do it for senior citizens for $5. Would it mean that those who are now paying $5 would have to pay $10 to have two forms filled out? All of those things can become rather complicated.

We are working actively trying to find a solution to some of the problems you have mentioned and we will continue to do so. Before too long we hope to be able to come up with something that is reasonable and that will be of assistance to those people, who I understand very well really need the money when their taxes are due and not six months later, that is really what the situation is now.

On the matter of the federal property tax credit system that the member talked about, I was asked about that in one of the earlier debates. I obviously cannot speak for the government at this point. The provincial government to the best of my knowledge has not taken a position. However, I have said that personally I am totally against that program affecting our Ontario tax credit program; that is a separate and distinct program. It really has nothing to do with the Ontario tax credit program, nor should it. It shouldn’t in any way affect the program we have had in place.

That is another reason it may become a little more confusing to the seniors when these cheques start coming out from the federal government along with our Ontario tax credit program returns. I don’t know how we are going to be able to explain to the seniors they are getting so much from here and so much from there. Maybe it is time we were sending out our own cheques, at the very least, rather than having them come from the federal government.

But I am speaking now as the Minister of Revenue. I can’t speak for the government because it has not been discussed, to my knowledge, at this time. However, I personally am not in favour of taking into account any of the federal property tax credits and using them in any way to affect our program. That’s my personal stand on it. I presume the government will take the same stand but I am not prepared to commit the government until discussions have taken place.

Mr. Swart: Just one further question of clarification. I understood the minister to say that he personally didn’t feel he should take into account the funds which are being transferred from the federal government as a property tax credit directly to the individual. The minister will get strenuous opposition from this side of the House if there is any reduction made to the provincial property tax credit because the federal government is also getting into the field. However, there may be some places where adjustments might be made. The minister might be able to adjust his program so that those who have the greater need may get more from his program than in the flat rate from the federal program. We would not have any objection to some form of adjustment as long as the provincial government didn’t use that to reduce or to prevent increases they otherwise would be giving in the property taxes.

Hon. Mr. Maeck: Yes, I understand the point the honourable member is making. I understand also that some kind of adjustments might be made. For instance, we all know very well the federal property tax credit program is only for home owners, while our Ontario tax credit program covers tenants and so on. I am sure that is what the honourable member has in mind when he is talking about adjustments. It is possible that some adjustments could be made in that regard, but it has not been considered at this point.

I only make the commitment on a personal basis. My personal viewpoint is that I will not, as the Minister of Revenue -- subject of course to the government’s final decision -- use that money to make reductions in the total amount that is being spent on Ontario taxpayers.

Mr. B. Newman: Mr. Chairman, I wanted to raise a different issue with the minister. That is the Gains program. In the first instance I’d like to commend his officials. Anytime a call is made by my office to the Gains office, it’s always expedited with courtesy and that is really appreciated by my own office staff as well as by the individuals for whom we are appealing the case.

But Gains is not indexed. Is the ministry considering indexing it so that it could reflect more closely the cost of living as do the old-age security and the guaranteed income supplement on the federal levels?

[5:15]

One sees the tremendous increases in the price of energy presently in effect and how in the future they are going to be substantially higher. One reads American newspapers where various cities are passing legislation that will provide for energy supplements. The city of Detroit is in the process of passing legislation for this. The state of Michigan now has legislation that will provide energy supplements. The US Congress has a little over $2 billion that it is planning on passing on as energy supplements to people on fixed and low incomes.

I would think it would be fitting at this time to consider increasing the supplement, or at least tying the supplement in to the cost of living; and also to consider, if at all possible -- I would like your input on that -- an energy supplement so that the elderly and those on fixed incomes can after some fashion meet the high cost of energy in the forthcoming year.

Hon. Mr. Maeck: As the member knows I am sure, the guaranteed income supplement is tied to the cost-of-living index. It is brought up to date quarterly, if I am not mistaken. I think it’s every three months.

Mr. B. Newman: I am referring to Gains.

Hon. Mr. Maeck: I know you are. Gains is tied to the guaranteed supplement program.

Mr. B. Newman: It’s indexed?

Hon. Mr. Maeck: No, but what I am suggesting to you is the guaranteed income supplement program is indexed and is adjusted according to the cost of living every three months. As the member is probably aware, we pass a regulation every three months to ensure that is passed on to the senior citizens. If we didn’t, what would happen is the $38.88 you were referring to a little earlier would be reduced. So we must pass a regulation increasing our guaranteed annual income so that they get full benefit of whatever that increase is.

The Gains program itself is not tied to the cost of living index.

Mr. B. Newman: That’s my whole argument.

Hon. Mr. Maeck: When we say $38.88 per month, we are talking about a single person.

Mr. B. Newman: I am referring to the maximum.

Hon. Mr. Maeck: The maximum is $53.65.

Mr. B. Newman: For a single person?

Hon. Mr. Maeck: Okay, $53.65 for married spouses. It’s an intriguing thought, but as the member I am sure is aware we have not in this government, to the best of my knowledge, indexed to the cost of living any program I know of. I think if we do we really help to feed inflation. We have to be fair and try to make sure our seniors get a proper amount, and I think we have. They are now partially tied to an index through the guaranteed income supplement, which is passed on quarterly, so their income increases every three months. It has never been delayed. It has always been passed directly on.

I think the member will recall the $20-a-month increase that was a sort of special increase. It was not tied to the cost of living that was also passed on by us, and as a matter of fact we passed it on also to those whom we support fully in Gains, those ones that have been dropped by the federal government because of the change in the citizenship rules and whom we carried on with. I think it cost the province something like $600,000 extra to extend that $20 to those ones who are totally our responsibility within the Gains program.

I don’t want the members to think that we are unreceptive to assisting, but we have not, to the best of my knowledge, tied any of our programs to the cost of living by indexing. I don’t see this government moving in that direction at this time.

Mr. B. Newman: I think the minister is in error. There is one program -- maybe not his program, but a government program -- that may not be indexed but provides an eight per cent increase annually, so the next year’s benefits are eight per cent more than they are this year and I assume the following year they will be another eight per cent more. So there is a precedent set already that is being practised by his government.

But on the $38.88 which is the amount that -- and I am referring to the single individual, I know it is $53.65 for the couple; why doesn’t the minister consider, if not indexing it to the cost of living, increasing it on an annual basis, maybe not necessarily to the cost of living?

A senior citizen having to live today on $364.87, unless he is in geared-to-income housing, government housing, has one heck of a time getting by. I can accept that the couple can get by a little easier on a total of $708 or $709; it is double the amount for a married couple; but for a single citizen, $364.87 is extremely hard.

Geared-to-income housing, government housing, does enable them to get a break, but think of the numbers that can’t get into government geared-to-income housing who must go into the commercial market to get housing. They still have to live. They don’t have their energy supplemented as would some who are living in geared-to-income housing. The senior citizen who doesn’t have those advantages has it extremely difficult at $364.87, unless he is being assisted by members of his family and/or is getting assistance from some organization or even Community and Social Services.

The minister is not considering substantially increasing that $38.88, is he?

Hon. Mr. Maeck: We review these things from time to time. It is not under review at the present time. I can certainly make sure it does go under review again, to have a look at it. It is again a case where it wouldn’t be a decision made by the Minister of Revenue alone, it would be the Treasurer; but we can make recommendations to the Treasurer and certainly I will have my staff review it again.

Mr. B. Newman: The reason I raise it this year is because of the tremendous increases these seniors are going to be confronted with in energy costs.

There is no use telling the honourable minister. He understands it all, as do his officials. But I certainly would appreciate it if they bent an ear to the advantage of the senior citizen in this instance, as I did with the handicapped earlier.

Mr. Charlton: I would like to jump back for just a few moments, if we could, to the property tax credit. In his statement my colleague, the member for Welland-Thorold (Mr. Swart), referred to the 1978 budget and the announcement in that budget by Mr. McKeough that the new proposed formula for the property tax credit was a rather significant formula in terms of enriching the property tax credit in this province, especially for seniors and low-income people. The hitch was that new formula would not be put in place until we had gone to full market value assessment.

Now we have postponed indefinitely the implementation of full market-value assessment. The Ministry of Revenue is presently engaged in what is obviously going to be at least a two-year, perhaps a three-year program of equalizing assessments under section 86. This means it is very unlikely we are going to see market value for four or perhaps five years, if ever -- at least for a fairly lengthy period.

Have there been any discussions going on between yourself and the Treasurer and whoever else might be involved -- I guess perhaps the Minister of Intergovernmental Affairs (Mr. Wells) -- about implementing that proposed formula without market value, or perhaps at least enriching the present formula somewhat, going part way in the absence of market value?

Hon. Mr. Maeck: In the discussion dealing with the particular item in the 1978 budget, as I’m sure the member is very much aware, there are ongoing discussions regarding the results of the equalization factors. That has to do with grants to municipalities, which in turn has to do with the amount of taxes people pay.

To be specific, no, we have not been discussing that. I think it was $75 million or something which was going to be put in at that time, in the 1978 budget; I think that’s the item the member is referring to, subject to property tax reform. We have not been discussing that, but we have been discussing the implementation of equalization factors for 1981.

As the member knows, we have a new program that only deals with 1980. That’s a matter that has to be discussed and decided upon, because obviously it could be costly. I don’t know what it will be. It depends on how it’s done. Those finance doors are being left open until a decision is taken on that particular matter. I don’t anticipate we’ll be talking about other items until after a decision is taken on that.

Mr. Charlton: All right. I can understand what you are saying. You made a commitment in your response to the member for Welland-Thorold (Mr. Swart) to at least have a look at the things which he brought to your attention.

I can’t vouch for the exact accuracy of his figures, but I think it should be obvious to you that for the last several years, each year in succession the amount of the property tax credit any one individual has received as a percentage of their total taxes was reduced.

I recall, for example, during the 1975 election when seniors in the city of Hamilton -- and I don’t know how true this was here in Metro where taxes are somewhat higher -- were getting fairly close to all of their property taxes back; at least that was the case for seniors who had no taxable income, who were just getting the straight OAS/GIS Gains cheque. Now they’re getting approximately half or a little better than half back. There has been a substantial change and I would like the minister to look and think very seriously about what it’s going to mean if we let that continue for another four or five years.

In effect, the good social-economic impact which the property tax credit initially had for seniors, people on fixed incomes and low incomes, will have disappeared virtually altogether. I think it’s time, this year, you took a serious look, in conjunction with the Treasurer, at some kind of move to up the property tax credit.

Hon. Mr. Maeck: We’ve already made the commitment to the member for Welland-Thorold that we would look at that, and I will look at it.

Mr. Wotton: Mr. Chairman, in relation to the earlier discussion which took place with the member from Windsor, there’s a point that concerns me regarding the Gains program as it applies to a situation where a husband would be 68 years old and the wife would be 58 years old. She’s not entitled to the spouse allowance. I’m thinking of a particular case where the lady is disabled due to a polio attack which happened back in the 1940s. I think her last cheque last month was somewhere in the neighbourhood of $16 because of the adjustment in the last quarter of the old-age security pension. After I did some quick calculating I feel that this year, with the increase in the Canada Pension and another adjustment in the old-age security allowance, this woman in particular is going to be without any provincial benefits whatsoever.

[5:30]

I realize there is a combination of Community and Social Services and your ministry, but it seems to me that to cut them off is going beyond what we feel would meet the human needs of the family. It is not only a matter of losing income, there is also the fact that the individual loses the drug benefits she is now entitled to, even though she gets a small pension.

I have to agree with the member for Windsor-Walkerville (Mr. B. Newman) that the whole system of the guaranteed annual income supplement program in conjunction with the benefits offered by the Ministry of Community and Social Services should be looked at. It is not every case, but where persons were married some years ago, or in present-day marriages where only one of the parties has reached pension age, I think it does present a hardship in a number of cases where this takes place.

Knowing your understanding of people in your area, I think it might be necessary to look into this to see if a more equitable adjustment can be made in providing assistance for these people.

Hon. Mr. Maeck: Mr. Chairman, in the example the member has used, where the wife is 58, she would be dealing with the Ministry of Community and Social Services and not with my ministry. She would have to be 65 to come under the Gains program.

Mr. Worton: Her husband is 68 years of age.

Hon. Mr. Maeck: Yes, so he would be receiving Gains and would be dealing with my ministry. But his wife would be dealing with the Ministry of Community and Social Services.

I can understand what the member is saying. I have run into those kinds of situations myself and it is sometimes very difficult.

I would be happy to pass his concerns on to the Minister of Community and Social Services (Mr. Norton); and perhaps our staff, when they are looking at the overall Gains A program, can take a look at that as well.

Vote 803 agreed to.

On vote 804, municipal assessment program; item 1, administration:

Mr. Charlton: I have a number of things I would like to raise under this vote, but today I just have a few questions in terms of direction.

The minister and I have discussed a number of times the section 86 program. On the last occasion I spoke to the minister about this he was looking at 107 municipalities which had applied to have a look at section 86 for next year. The discussion revolved around how many of those municipalities would opt for section 86 once they had seen the data.

I understand meetings have been going on. I would like to know from the minister how they are going and whether the municipalities are accepting section 86 or dropping their requests.

Hon. Mr. Maeck: The impact studies of section 86 have now been presented, I think, to pretty well all of those municipalities that had requested it; that is, the final stages. They have the right after seeing the impact study to decide whether or not they want to proceed with the section 86 program.

You are right, there were 107 municipalities which applied for the impact study. I think as of this morning there were 14 municipalities that had passed resolutions asking us to proceed with section 86. Those municipalities were given roughly two weeks to respond. That two-week period is not up at this point, but I don’t think there are that many days left to go. We should have results coming in fairly fast in these next few days. We gave them two weeks and we weren’t too stringent with that either. As the member knows, with the procedure we have to go through in order to get the assessment roll out in time, there is a timetable, we must keep.

At the present moment, as of this morning, there were 15 municipalities that we’ll be proceeding with that have requested the implementation of section 86.

Mr. Charlton: Perhaps the minister can get just a little bit more specific. He has had 15 municipalities that have requested it. Has he had any councils inform him, as a result of studying the impact study they’ve decided not to go?

Hon. Mr. Maeck: That wasn’t the way the system was set up. The system was set up in this way. They got the impact study. If they want us to implement section 86, they must pass a resolution and get back to us within two weeks. If two weeks transpire and they don’t get back to us, it’s obvious they are not prepared to proceed with a section 86 program.

Mr. Charlton: You have no indications at this point of any that may have already decided not to go? Perhaps the minister could clarify with his staff just when that time will run out.

Hon. Mr. Maeck: Approximately at the end of next week, I am told. There’s some time to go yet.

Mr. Charlton: Perhaps the minister could get some kind of an indication from his staff. I think he will recall in the discussions we had a few weeks ago he expressed some concerns about how many of those 107 municipalities might go. Does he have any kind of an indication or feel from his staff, who have met with these municipalities and presented the impact studies, how many are likely to go?

Hon. Mr. Maeck: It’s a guesstimate, but the staff seems to feel it could be as high as 50 per cent or maybe higher. There’s no way of knowing until they actually pass the resolution requesting it. It really isn’t fair to put a figure on it because we really don’t know. While the municipal treasurer or someone else may think it’s a great thing, when it gets to the full council there may be a majority that says it doesn’t want to do it. It’s very difficult to get a handle on that.

Mr. Charlton: I guess it’s not going to be very long before we know anyway how many of those 107 will go. The reason I raised the whole thing is, as the minister will recall, when he announced the section 86 program last year, we had a number of debates in the House that referred to that particular program and its voluntary nature. I guess we probably got into that discussion a bit as well last fall on the postponement bill. It seems to me, I don’t have an exact number, there are over 800 municipalities in this province, but if I recall correctly we equalized 12 last year.

Hon. Mr. Maeck: Fourteen.

Mr. Charlton: We had an additional 107 apply this year to have a look. The minister is saying to us we could have as many as half of them drop out, We don’t know, but we will very shortly. Any way you look at it, we’re still going to have a fairly substantial number, in the neighbourhood of 700 municipalities in this province, that have not gone.

Part of the criticism we raised with the minister last year was the voluntary nature of the program. The minister had expressed at that time the feeling he could get the vast majority of this province equalized under section 86 in two years. It seems to us that’s not likely to happen now. Through a voluntary program, the minister may get the entire province, or virtually the entire province, equalized in four or five years at the rate it’s going.

That doesn’t seem acceptable. We don’t feel section 86 is the direction the government should be going. We admit there are some benefits and some improvements involved in section 86; however, if we’ve got a section 86 program which is totally voluntary and not likely to reach all corners of this province for some years to come, what are you going to propose to do if half drop out this year and you don’t get a lot of applications next year and so on? At what point is your ministry going to take this whole thing in hand and see that it happens across the province? At what point are you going to say, “Okay, the voluntary nature of this program is not producing what we wanted across the province”?

Hon. Mr. Maeck: It’s a very difficult question to answer. We don’t know how well the voluntary program is going to proceed. It’s really a hypothetical question at this time for me to answer as to when we would be prepared to go across the province.

The member talked about 800 and some odd municipalities. That’s true, but remember that between 1970 and 1975, 250 of them were reassessed. Those municipalities aren’t too badly off as far as assessment is concerned compared to some of the other areas of the province.

I am more or less content to proceed on the basis we’re proceeding because I know the municipalities that have the greatest inequities add the greatest problems are the ones that are going to request the section 86 program.

The ones that have a relevantly level assessment across the municipality are not going to be in a hurry to ask for section 86.

I was reading in the paper this morning that the city of Burlington had started movements toward the section 86 program. They’ve had a look, not at the impact study but the first information that we produced for a municipality; they’re satisfied there aren’t that many inequities so they’ve decided not to go. My staff informs me there aren’t that many inequities in the city of Burlington. I’m not saying there aren’t some but there aren’t as many glaring ones as there are in the Cambridges of this world, or a few other municipalities.

So I’m saying the section 86 program, on a voluntary basis, will take place in those municipalities that are having a great amount of problems with their assessment, losing appeals and with inequities within the classes and so on. I think those requests are going to come on a basis whereby they will ask for it when they feel they need it. I don’t think there is too much wrong with that kind of a program.

Certainly it would be helpful to my ministry if every municipality in the province wanted to have a section 86 program, but I think the member realizes that even if everyone agreed, or if I brought in a policy that said everybody is going to be reassessed under section 86, I don’t think the ministry personnel could do it all within two years anyway. If I said that last year it was probably before we had an opportunity to see how much work is really involved in the section 86 program in each municipality. Even if there was a policy whereby we said we were going to do every municipality whether they wanted it or not, I don’t think the staff I have could complete the program in two years.

Mr. Charlton: A number of things seem to be changing here in attitude and approach. I understand the point the minister made about a number of municipalities. I have forgotten the number the minister mentioned, 250 between 1970 and 1975.

[5:45]

On the other hand, though, in the last few months I have talked to municipal politicians from all over southern Ontario and even a number that have been referred to me by several of our members from northern Ontario. It would seem to me that in the first year, last year, it was true that the municipalities that were applying were those with the greatest inequities. I am not sure because I don’t have information on all of the councils in this province, but I have a sense that the trend will be somewhat the opposite this year; that the municipalities with the greatest inequities are going to be the ones that back away once they see the impact studies. Some of those that don’t see any great political problems in the impact studies because there aren’t any excessive inequities may opt for the section 86 equalization because they want to see those who have been paying slightly too much get a reduction and those who are somewhat under assessed getting on increase and equalizing the whole thing; that is theoretically what the whole process is supposed to be about as long as it doesn’t get too offensive in anybody’s ward, or whatever the case happens to be.

My sense from talking to people in Haldimand and a few from Burlington, and a number from the north and from other areas in southern Ontario, is that you are likely to see quite the opposite this year in terms of those which choose to go; and that, in itself, will be counter to what you set out to do. It is going to shift the responsibility to find a solution to those inequities back to you, which is where it started out and has been ever since 1970.

The solution may very well be for you to impose a section 86 assessment. You could be right, I am not sure; I haven’t been in any of the assessment offices for any of the section 86 programs that have been done in the last few years. I don’t have a sense in terms of the amount of overall work load. You may be right that your present staff in the assessment division couldn’t handle the whole province in two years, but if, for example you were to find that this year out of the 107 that have applied 50 per cent of them drop out and you are not getting the applications for next year you should be getting, there would be nothing wrong with you imposing section 86 and prioritizing the way you handle it, starting with the worst and working to the best. I don’t see any serious problem, if you can’t handle them all in one year, of at least dealing with the ones the politicians have been afraid to deal with.

Of course we are politicians too, aren’t we, and I suppose that creates a problem. I think you know what I am getting at.

Hon. Mr. Maeck: It is a little premature to make a commitment as to what will happen. You could very well be right, it could be that those which accept the section 86 program may be the ones which have not the most serious problems. We will know that by the time this exercise is over this year. But it is premature for me to make a decision as to whether I would decide to implement section 86 with or without the municipalities’ consent. I suspect at this point in time I would not do something like that. However, that remains to be seen; and as I said before it is a sort of hypothetical question until we know which municipalities really go ahead with section 86 and which ones don’t. We won’t know that for another week or two until the results come in from the impact studies that have been released.

Mr. Charlton: I suppose, Mr. Minister, the main reason I got into all that really brings up the main point of the whole discussion. I am trying to get a sense of where we are heading with property tax reform, because I don’t have one right now. I don’t think anybody in this House does, except perhaps you -- I am not even sure that you do, or the Treasurer, or the Minister of Intergovernmental Affairs. I am trying to get a sense of where we are heading, because we don’t have it on this side at least and I just have a feeling there is no one on that side of the House who really has either.

We have shelved market value; albeit it is said it is shelved temporarily, but indefinitely temporarily -- whatever. We haven’t given up on it; you stated that quite clearly in response to my opening statement.

Who is doing what? What discussions are going on right now between yourself and your staff in the assessment division and the Treasurer and the Minister of Intergovernmental Affairs? What is happening right now in finding the ways that have excluded us in implementing the bigger package? Is there anything going on right now or has everybody shelved it and said, “Let’s let our heads clear for a couple of years and maybe we will be able to come up with something fresh once we have forgotten about it”?

I am just trying to get a sense of what direction we are heading in the whole property tax area. I am trying to get a sense of whether or not anything is happening, whether there are any intentions there, or whether we are just trying to forget about it for a while.

Hon. Mr. Maeck: We are not trying to forget about it because I am sure if anyone in this House realizes it the member for Hamilton Mountain realizes the introduction of the new equalization factors has put us in a position where we must come up with some sort of a program. What that program is going to be at this time I can’t tell the member.

We developed a temporary program, as you are aware -- the five per cent apportionment thing and the 10 per cent grant thing developed by the Ministry of Intergovernmental Affairs and Ministry of Education, and so on. That is for 1980. We must come up with some solutions to these problems as quickly as possible before 1981. The municipalities are entitled to know what they can expect in the future.

I am sure the member reads the newspapers as well as I do. The municipalities are very upset with this government because we have only announced the program for 1980. They don’t know where they are going to move beyond that. They don’t know what is going to happen. They don’t know what the government has in store for them as far as grants, apportionments or anything else is concerned.

So there are ongoing meetings, particularly in the ministries of Treasury and Intergovernmental Affairs, to deal with the problem we are going to have to face, and it has to be faced relatively shortly.

My own staff will also be working on that. I can’t tell the member what direction it is going to take at this point because I don’t know the direction it is going to take. We are discussing various ways and means. There are several options open. What the final option is going to be it is too early for me to tell the member. All I can tell him is that various ministries are working on it, probably right now -- well not at this time of night, it’s five minutes to six, but they are working on it.

Mr. Charlton: Mr. Minister, I do read the newspapers and I am here discussing this with you; and I was in the Intergovernmental Affairs estimates and discussed it with the Minister of Intergovernmental Affairs. Next week I will be in the Treasury estimates to discuss it with the Treasurer and I will know for sure by then --

Mr. Ruston: Don’t count on it.

Mr. Charlton: -- if there is any sense of direction over there. You don’t have it --

Mr. Ruston: Don’t count on that.

Mr. Charlton: -- the Minister of Intergovernmental Affairs doesn’t have it. I suppose next week I am going to find out whether or not the Treasurer has any real sense of where we are going.

What I am really afraid of, because I do read the papers and I have talked to quite a number of municipal people -- I haven’t talked to all of them in the province, but I have talked to quite a few -- and what I am really afraid of is, if there is no real sense of direction, if what is really going on over there is how the hell do we get ourselves out of this mess, we will end up next year announcing another one-year program and the following year announcing another one-year program and phasing in a shift over five or eight or whatever years; we’ll never get set on a clear course to property tax reform again. That is the feeling I am getting and that is why I am raising the whole thing.

I think on Friday I would like to get into a somewhat extended discussion of some of these things and some of the aspects of what’s happened in the last several years and where, in some respects, I think we should be going. Obviously I don’t have time to get into all of that this evening. I am just getting the sense that there isn’t any real direction at this point; in fact although the Minister of Intergovernmental Affairs stated quite clearly the government had to find some solutions and this was only a one-year program, he said the same thing; “I have absolutely no idea what those solutions will be, not even where to go and look for them,” I am getting the same response from you, and that just frightens me somewhat.

Hon. Mr. Maeck: I didn’t say that.

Mr. Charlton: There doesn’t seem to be anybody over there who really knows where we have to go to look for the answers. It concerns me somewhat, because I’ve seen it happen with the reassessment program. When we first postponed it in 1974 it was a temporary postponement for two years, and ever since we’ve had a one-year postponement every year. We really don’t seem to have come any closer to finding the solutions. One can’t really blame me for getting the same kind of gut queasiness about what is happening now with section 86 programs, and with the equalization factors and the one-year program to try and alleviate the problems there. There have been no real positive statements on the part of the government that they’re going to be making an announcement. They aren’t saying, “We know where we are going, we’re going to be making an announcement in six months or eight months, as soon as we have the details worked out, but we are going to be making an announcement about what’s going to happen thereafter.” We are not getting that kind of positive sense at all. I don’t think I can be blamed for being somewhat sceptical at this point in terms of what is actually happening in relation to what we set out to do 10 years ago.

Hon. Mr. Maeck: Mr. Chairman. I didn’t indicate to the member for Hamilton Mountain that I didn’t know where we were going. What I said was there were several avenues for us to explore. Whether I said it in those exact words or not I am not sure, but that was the point I was trying to make. They are being explored at this particular point in time. We realize a program has to be in place, and soon, so municipalities can plan for 1981. I think they have a right to know what direction this government is heading as far as grants are concerned.

On motion by Hon. Mr. Maeck, the committee of supply reported certain resolutions.

The House adjourned at 6 p.m.