ESTIMATES, MINISTRY OF REVENUE (CONCLUDED)
The House resumed at 8 p.m.
House in committee of supply.
ESTIMATES, MINISTRY OF REVENUE (CONCLUDED)
On vote 801, ministry administration program:
Mr. T. P. Reid: Mr. Chairman, I have just a couple of comments on this first vote.
I have been going through the public accounts and it is quite interesting to note, as all members will be interested to know, that almost 10 per cent of the people in the Ministry of Revenue are earning more than the $30,000 which finds their names registered in volume 3, details of expenditures, in the public accounts.
If my tally is correct, that means almost 400 of the 4,027 people in the ministry are earning more than $30,000. If one looks on page 4 of the public accounts, there are a number of others who are included in there.
I wonder, can the minister tell us how that percentage squares with those of other ministries in terms of there being about 10 per cent of those people in that category from $30,000 on up?
There is another question I want to raise with the minister arising from the public accounts. I would like to know whether there is anything in these estimates about the matter of remissions.
In volume I of the financial statements of the public accounts for 1981-82, on page 3-19, the Ministry of Revenue wrote off, as of March 31, 1982, retail sales tax to the tune of $38,721 for the Windigo Lake Transportation Corp., $1,758 for Lucien Menard Trucking and Building Materials Ltd., and similar small amounts for succession duty on an estate and for provincial land tax, for a total of $43,351.
Is there any provision I have missed in the estimates this year for these remissions? Perhaps the minister can explain the policy as to how his ministry arrives at granting these remissions.
Hon. Mr. Ashe: Mr. Chairman, I do not think we have specific details available in the context of verifying or denying that 10 per cent, or roughly 400, of the ministry's total staff -- that is, field and head office -- are at $30,000 or over. We suspect that is probably about right.
I think the honourable member will actually find that while we are a technically oriented ministry in the sense of having a significant number of staff, particularly in head office, with great experience and educational background, the approximately 10 per cent in the category of $30,000 and thereabouts is probably below average, in the total context, compared with most ministries. I will be honest. I cannot prove that to the member. I have nothing here to prove that to him, but it is our collective wisdom that this is so.
Mr. T. P. Reid: I will take that into consideration.
Hon. Mr. Ashe: We have at least the 100, 200, 210 here.
In terms of write-offs, we do not look upon these as expenditures; they would not show in the estimates as such, because they are writeoffs under the Ministry of Revenue Act. When we eventually show revenue per se, in net revenues for the year, they are already excluded. Frankly, there is no absolute way of knowing.
I can tell the member that before any remission orders or write-offs are put through, it is only with the 99.999-and-up per cent thought that there is no way that particular liability is collectable. In other words, one finally comes to the point of recognizing that one cannot take blood from a stone because there are no assets or nobody one can attach who was responsible for that liability and we eventually write it off. But it is under the Ministry of Revenue Act and not under the particular tax piece of legislation.
Mr. Epp: Mr. Chairman, I want to raise a small point having to do with the senior citizens' tax grant. When that was initiated and the cheques were going out directly from the Ministry of Revenue, an additional number of civil servants were hired to deal with the increased work load. Now the ministry has the computer formula and so forth worked out, I wonder whether there has been a decrease in the number of civil servants working on that project.
In the same context, I want to ask the minister if he can explain something. My constituency office, to use it as an example, will work on a problem, which is resolved from the standpoint that the ministry says, "We are going to send the cheque out," and the person receives the cheque. Then, maybe a week later, the ministry calls up the constituency office and says, "By the way, we are going to send out this cheque."
This has happened on a number of occasions; so it is not an isolated case. My secretary then calls the person and asks, "Haven't you received your cheque yet?" The person says, "Yes, we received it about a week ago." Then the ministry calls a week later to say the person is going to receive the cheque.
I wonder whether there is a great surplus of people who are trying to create work for themselves and are making these calls when the cheques have already been sent out. I wonder whether they could not be used in a more efficient manner or whether the ministry for some other reason is making these calls after the work has already been done.
8:10 p.m.
Hon. Mr. Ashe: Mr. Chairman, I do not think there is a pat answer to that one. I am sure what happens in some cases is that an inquiry is made, whether directly from a constituent, through a constituency office or by mail from the constituency office, and a particular person checks it out and finds it is already in the system.
I guess it is a matter of what the recipient on the other end of the line expects to hear. He probably already knows it is in the mail and may appear any day, but I would think that rather than say, "You will get it yesterday, today or tomorrow," they are saying, "It will be on its way, and you should have it shortly." I am sure that is where a lot of those come out.
In other instances, of course, they are following through to track down when a particular cheque will be issued, and in those circumstances they quite rightly say it will be processed in a week or in two weeks, as the case may be, and it goes out accordingly.
The last possibility I would suggest is that the person who is checking back with the constituency office -- and I must say this is something we have been doing more regularly this year because, frankly, we have had a little more opportunity to follow up on them -- may have just gotten busy and did not get back for a few days following when he thought he would. But in the meantime he had checked up what the problem was and had seen that it was being handled -- again, whether it was because of the first item I discussed or the second -- and that the main issue, I hope, is to solve the problem and get this cheque to the constituent. But I do not think there is any pat answer on that question.
In answer to the honourable member's indication that the computer does everything now, I can assure him this is not quite so. We are using computer technology, but we still need people. We are using the capacity of call-back a lot more this year. First of all, the applications have to go out. Once the application is returned, it still has to be physically examined to make sure it is basically correct, and the majority can then be entered right into the system. That is our recall, which we had available this year but which we did not have right away last year. There was a lot more handling before we had a visual awareness of the presence of that particular applicant. So there are still a lot of people involved.
Do not forget that even though we have cut down the error rate on the applications over the past three years from 40 per cent to 23 per cent to about 11 per cent, we are still talking about an awful lot of paper. We also have a lot of basic, very simple errors that have to be finished off manually before the application can be entered. We did a lot more of that this year as well rather than putting it aside and into the group that needed further personal handling and follow-up. Where there were very basic errors in which the information could be researched or finalized or corrected very quickly, there was action on that much more rapidly this year.
This year we used a standard, computer-generated form letter. We had a basic number of paragraphs and a basic number of problems that could be generated from it. But even when we are down to the net of 11 per cent with errors, we are still talking about something on the order of 65,000 applications that require an awful lot of personal indulgence by people. The percentage is relatively small, but the numbers are still significant; so there is no lessening. This year, in finalizing last year's program and getting our program geared up and in better operation for this year, we did find that we used more man-years than we had previously.
On the other side of the coin -- and I hope this is the way it will carry on in the future -- when we came to this fall and the final delivery of the program for the 1982 grant, we actually used temporary staff to a much lesser degree. We did not need as many for as long this year as we had last year. Over the total year, what we projected in the estimates as our manpower needs came just about bang on. We were high at the beginning and low at the end, and it all added up. The system is now in place; I think the results have proved that. We should be able to get along with a more regular level of staffing next year.
I do not want to mislead the member by suggesting it can be handled by permanent staff only, because that cannot be. In the key times of the year, we will still need more people when we are getting ready to process the applications, during the actual processing and the sending out of the cheques. We will go through the same process to a smaller degree, as members know, at the first of the year for those who turn 65 after August 1, 1982. That is a new group of people whom we will serve in January, as we have done in the past.
To give an idea of the relationship between the work load and staff increases in the division that handles the guaranteed income and tax grants over the past number of years, since fiscal year 1977-78, the staff and support staff of grant programs has risen from 161 to 230, an increase of some 43 per cent in actual staff. In that same period the number of property tax and income supplement clients -- this is the same division, in terms of total, that handles the guaranteed annual income supplement program -- served by the program has risen from 258,000 to 900,000, which is a growth of 350 per cent.
If we were not able to use technology to a great degree, there would be no way we could handle three and a half times the volume with a 43 per cent increase in staff. That is why it can be done and how it has been done. I do not see any great ability to significantly reduce those numbers even based on the current program we are delivering.
Mr. Nixon: Mr. Chairman, I want to raise a matter with the minister about the fuel colouring. In this instance, it has to do with his staff of inspectors.
The minister knows we have been in correspondence about one complaint involving his inspection staff. He was good enough to send me a copy of a letter he had written to my constituent about this, which I appreciate, but in an instance such as this where a new program is being inspected, in fact policed, by a group of newly retained inspectors, I feel it is extremely important that they be carefully informed as to the way they should treat the business people with whom they deal in applying the new statute and its regulations.
There is absolutely no reason in the world for them to act in a peremptory way with a taxpaying citizen who is a bona fide member of the business community. There may be all sorts of provocation and the inspector may feel that certain regulations are not being lived up to, but it should always be the primary responsibility of the inspector to show every concern for the responsibilities of the businessman and his own work in his own time.
Frankly, I had the feeling that the minister, very properly, is supporting his new inspection staff. I do not object to that too much. But he has a responsibility also to think of the position of those thousands of business people across the province who are hard-pressed and who are not very delighted to have another set of inspectors calling on them. They do not like it at all, particularly when the possibility of an infraction is some footling nonsense that the purple dye is not properly locked up in a back room as page 97(b) in the regulations may require.
There is a feeling that maybe the inspectors are starting off on the wrong foot. Who would want to steal the blooming dye, anyway? Who would want to dump it into any fuel where it should not be by law? It is not as if value is increased by putting the dye into the fuel.
8:20 p.m.
I am not here to comment on the detail of the regulations, but I can tell the minister that I do not want to hear any more complaints about the inspection staff, particularly from fuel oil dealers and others who have been in business for many long years and have been paying their taxes in support of this government and government at other levels.
I want to end my remarks by saying I appreciate that the minister has written to the person who had complained. I cannot tell him that I am thoroughly satisfied with the situation, because I feel the inspectors may be under the impression, particularly if they are newly employed, that they should be acting the way the police used to act back 20 years ago instead of the way the police are acting now. They should be at least as polite as Ontario Provincial Police officers. If we could ask them to respond to the public that way, we would be satisfied.
There is only one person responsible for this and it is the minister, because the complaints are going to come to him and be laid on his doorstep. I certainly hope and trust we will not hear of any more complaints.
Hon. Mr. Ashe: Mr. Chairman, I think it is appropriate that I briefly respond to the honourable member's query. I cannot disagree with him as to what should be the normal, general conduct of all government people, regardless of the government or regardless of the ministry.
On the other side of the coin, I am sure the member has been around here long enough to recognize that there always are two sides to every story. If I remember the background of how the particular inspection team appeared, it was in reaction to a complaint that somebody had put in. So they were, in effect, doing their job.
Mr. Nixon: That is the first I have heard of that.
Hon. Mr. Ashe: I could be wrong on that. I may be confusing it with another case. But they were doing their job, and it would appear they did it correctly, albeit without the owner being there. No doubt, there was some misunderstanding.
I might say, in terms of the security of the dye, our main concerns have nothing to do with its value per se to somebody else, because I cannot think of any other either. It is relatively costly but, more important, it could be relatively dangerous in its concentrated form. The security is more for safety than for any other reason. One of the questions brought up this afternoon was exactly on the lines of safety. We were being chastised for not giving enough direction to the security of supply and the security in the safety context.
Mr. Elston: We were talking about giving instructions as to the handling of it. I was not talking about this kind of problem, which is somewhat different.
Hon. Mr. Ashe: Handling and security all came together in the same general set of instructions, as I understood it, from us. The safety aspect came from Morton Chemical before the dye was delivered.
Needless to say, I do not like any complaints that come to me and involve staff, but I can assure the members that they are always looked at and researched to the best of our ability. We try to come back to the concerned member and/or the concerned client with as complete and as honest a response as we feel is appropriate.
I can assure the members that we do not bend over backwards to try to protect the staff or suggest they are always right, but I think we all have been around long enough to know that there are two sides to every story.
I want to close with one last point. The majority, although not all, of our fuel tax inspectors are not really new, young, invigorating fellows who are just getting their first little bit of authority. In many cases, they are experienced people who have come from jobs where they have been dealing with the public. As a matter of fact, we even have a couple of former OPP officers.
Mr. Nixon: And a former member of the Royal Canadian Mounted Police, I gather.
Hon. Mr. Ashe: That could be. We also have some people who were on the inspection teams of the Ministry of Transportation and Communications.
Mr. Nixon: It is the fact that they are former that concerns me.
Hon. Mr. Ashe: They are former in the context, as I understand it, of not wanting to move geographically to the extent that their new jobs were going to take them. I can assure the member, we had above and beyond the usual type or quality of person applying for those positions.
At least 80 per cent of the members in here made known to me five or 10 or 15 or 20 people they thought would be excellent applicants for the jobs. The number of applications was exceedingly high. The qualifications we were able to call upon in acquiring the staff were well above what was anticipated, undoubtedly some indication of the economic climate.
I am not concerned about the overall quality of the staff performing the function. Under most situations they will do a professional job that we will both be proud of.
Mr. Nixon: I appreciate the minister's answer. I can support it entirely, other than to say finally in that connection that he is almost personally responsible for the attitudes of those inspectors. If the minister does not convey to them that he is deeply and personally concerned with the way they are seen by the public whom they serve directly, then they are not going to be very concerned. Knowing the minister as I do, I am sure he will see that is done. We will certainly bring it to his attention if there is any concern.
With the permission of the chairman, I have another small point that I would like to raise having to do with the computer capability of the ministry, which is enormous. The minister must be aware that in many jurisdictions there is a growing concern about people knowledgeable in the functioning of computers, programming them in such a way that there is a leakage of funds that can be very readily covered up.
Would the minister explain to the House, not just how he sees that the computer is doing its job and that the cheques go out, particularly in the senior citizens' tax rebate situation, which I think probably is better this year than it was last year, but just to what extent we are safeguarding the integrity of the computer programs?
The minister must be aware that in many jurisdictions in North America it has become apparent that capable people can invade the computer programs, even from outside. Not being employees at all, they can invade them from outside, program them to send out cheques which are not warranted and even cover their tracks with the removal of the special amendments to the programs. Evidently this is quite readily done. Even the most elaborate series of coded protections is not seen to be sufficient in cases that have come to public attention.
While I am on my feet and talking about that, the minister must also be aware of a number of citizens who have been quite substantially overpaid in the program. Most of them, senior citizens, being good, honest, taxpaying citizens, are concerned with what to do with the extra money. Presumably most of them put the cheque in an envelope and send it back to the government or wait until the computer, checking and rechecking its function, finds there has been an overpayment and there will be some move to recoup.
It has come to my personal attention that in my constituency some individuals have received the advance payment and then an additional complete payment of $500, even though their taxes payable were not at the level where the $500 would have been warranted. To what extent is the minister experiencing that sort of problem with the payout program, and what sort of advice should we give these people? Should they wait for the computer to send out some retraction notice, should they send the cheques in, or should they just presume the Conservative government is even more anxious than usual to keep the promise?
Hon. Mr. Ashe: The honourable member knows we always keep the promise so there is no doubt or debate on that one at all.
In so far as the number of times an overpayment can be made -- and yes it can happen -- it is quite infrequent. There are reasons as to how and why it happens. In many cases it is because a husband and wife become unlinked or they were not linked in the first place so they get separate cheques in some cases, when in fact they were due only one. In other instances, there may have been, for some reason or other, a change in reference number so that their advance cheque was sent out under one number and their application was returned under another number. In our system, this looks as if they were never paid and they, therefore, get $500.
8:30 p.m.
We do become aware of this and eventually we contact them to ask for the money back. Failing that, we deduct it from next year's payment before they get any money. What really should happen, and we recommend the member suggests it should happen, is that in a case of overpayment, to use the example that is closest to the one he used where they got $750 instead of $500, I would suggest they send back not the $500 cheque, but a cheque for $250, payable to the Treasurer of Ontario, with a covering letter or the reference number identifying what it relates to, and then it will be credited back to the account. That is simpler and faster than sending the $500 cheque back and us going through the process of sending them back $250. I do not see why they should have to wait for the $250. That is normally what I recommend. This does not happen frequently; it happens very infrequently.
As far as the computers are concerned, there is always a concern in this day and age about illegal access to material within a computer system. While I cannot say our system is foolproof, because what is foolproof today is not foolproof tomorrow, I can assure the member that we do have within our internal audit system an internal auditor who is highly recognized within the industry and has the capability to have in place and to supervise, oversee and operate the most advanced data security system available.
Again, I have to acknowledge that does not mean it is foolproof, but it is as foolproof as is available. We continue to maintain our surveillance on the industry to make sure we are as up to date as the state of the art will allow us to be in terms of program security now and in the future. I cannot say our system has never been touched. It has not been touched as far as we are aware. We have put in place every known protection to make sure there is no misuse, misdirection or misappropriation of taxpayers' funds.
Vote 801 agreed to.
On vote 802, tax revenue program:
Ms. Bryden: Mr. Chairman, on vote 801, I did start to raise a matter with the minister regarding the auditors who operate under the retail sales tax, and I would like to deal with that item now as it was decided that it belonged in vote 802.
I was citing to the minister a particular case of Mr. Thomas Minakis, who operates a jewellery business in my constituency. The reason I wanted to cite this particular case is because it indicates a pattern of activity that the retail sales tax auditors seem to be carrying out, and I think there is a need for some changes in the activities of that particular operation.
I wrote to the minister in detail about Mr. Minakis's problems and he replied after a couple of months, but there are still a number of important issues that came out of this case that we should have the minister comment on as to whether he thinks the practices of the auditors are the ones that should be followed.
My particular concern is that the auditors appear to be spending a great deal of time harassing small businessmen. I would like to hear more about what is being done by the auditors and the special investigation people to go after the big tax evaders, of which I am sure there are some in this province. I think it is an area the ministry should be looking at very carefully, particularly in these times of revenue shortage and revenue shortfalls.
With regard to Mr. Minakis, there are about four or five happenings which should be questioned. The first is that there were something like 11 or 12 visits over an 18-month period to this small retailer. After the seventh visit, the retailer asked if the auditor had found anything and he said he had found nothing unusual. That is what Mr. Minakis quotes him as saying.
After another four or five visits, Mr. Minakis was suddenly presented with an assessment for $6,565. The assessment appeared to be based on a difference of opinion as to what could be identified as a repair and what could be identified as a sale. According to Mr. Minakis, there was no discussion during the 11 or 12 visits as to the methods by which he was identifying the different sales.
Apparently the auditor looked at a number of repair invoices, took the names of the customers and decided to phone those customers and ask them if it had been a repair or a sale. According to Mr. Minakis, the customers were under the impression that the person phoning them was Mr. Minakis's own accountant, not the retail sales tax auditor. He even has a letter from one customer who indicates very clearly that he certainly thought it was his accountant and not the auditor.
The ministry in its reply to my letter says that would certainly not be their practice and that the auditor would identify himself as a ministry employee when questioning the customers. But the ministry does admit that since Mr. Minakis's name was mentioned and it seemed to be a question of clarifying figures, which is the way one customer says the call was made, the customers quite conceivably might believe the phone call was from Mr. Minakis's accountant.
If this can happen, I think there should be a somewhat different way of obtaining the evidence. Perhaps a personal call to two or three customers with an identification card shown by the auditors might be one way. Certainly a phone call that can he misconstrued as an inquiry from the jeweller's accountant is not a very satisfactory way of obtaining evidence and can lead to the feeling that it may be an attempt to get evidence under false pretences. That is another complaint that should be looked into.
The auditor's methods also seem to be rather questionable. In the first place, he measured the store. I do not quite know what that has to do with a sales tax assessment. Perhaps the minister can enlighten us. He objected to being followed around and watched by the retailer, yet he was handling very valuable goods. On one occasion, some of the goods fell out of the drawer in which they were kept on to the floor, so there seemed to be some point in the retailer following him around, but he seemed to object to this procedure.
8:40 p.m.
When the assessment was received, it was simply a bald statement that $6,565 was owed for uncollected sales tax. There was no supporting statement, no schedule, no indication of how that figure was arrived at, how many sales, how much tax on each sale and so on. When this was drawn to the attention of the ministry, a statement was subsequently supplied. The ministry states in its letter that it is its practice to include schedules with all assessments. In this case the schedule was not included and I do not see how the retailer could be expected to exercise his right of appeal if he or his accountant had no information.
According to the ministry, the auditor had explained to the retailer that he was going to make an assessment and gave the reason as being the difference between sales and repairs, but he had not shown the figures to him or his accountant and they were left with the right of appeal but no facts on which to base it.
Another point which came up in connection with the assessment was that the assessment had been reduced by an allowance for vendor's compensation. Mr. Minakis has been in business since 1972 and has never collected compensation. The ministry may say he should have known that compensation was available over those 10 years and that it is mentioned in bulletins and so on, but we must remember that he is a very busy, small retailer and he is a newcomer to this country. He has not had the same experience in the retail business as people who have been here for 30 years.
The ministry or its auditors, in their visits from time to time, should have informed him that he was not collecting compensation to which he was entitled. It seems to me that government should not just say, "You get only what you know about," and never draw it to their attention that they are missing out on certain compensation that is available to vendors.
Another point that Mr. Minakis raised was that during part of this period of 18 months he had the feeling he was under surveillance by two persons who sat in a car across the street from his store for long periods. He wondered if this stakeout was part of a suspicion that he was dealing in international currencies, gold or something of that sort. They never spoke to him, but he would like to know if this is the kind of investigation the special investigators carry on.
Finally, when it came to the question of whether he would have to pay this assessment and whether he would pay it immediately, I gather that the ministry, or the auditor, told him that it could be paid in instalments if he had security. That led him to believe the security might be his own home and he immediately started to worry that his home would be seized if he was not able to pay that amount immediately.
It may be that it was a completely false fear, but again a person in his position, as a newcomer to the country, certainly does not want to feel that his home is in danger or can be seized as part of the security for a business. It should be made very clear to him what kind of instalment payments would be possible if he has to pay the amount. His assessment is now under appeal so we do not know what the final outcome will be.
The ministry should work with small businessmen rather than against them. It should visit them at the beginning, as it says it does, and then visit them, maybe not every year but once or twice every couple of years, if they do not appear to be keeping their books in the way that makes the collection of tax easy.
I think the ministry really spent far more time harassing this man than in assisting him in becoming aware of the law and conforming with it. I understand that he intends fully to fulfil his obligations under the law but felt that he really had not been informed that he was doing anything wrong or how he should be doing it.
It makes me wonder what is going to happen next year because of the extension of the sales tax to all sorts of new vendors, particularly those who sell snacks and a lot of the items which are now covered by the tax. It makes me wonder what sort of problems will arise with the attempt to collect tax from people who have never had to collect it before. Can they expect the same kind of harassment, or can we expect the ministry to inform them step by step of what their obligations are? I think that is one of the essentials of this extension of the sales tax.
I must report, and perhaps the minister can pass this on to the Treasurer, that in my latest constituency report I asked the question, "Do you approve of the extension of the sales tax to the various items to which it was extended in the last budget, and if not, what items do you think it should not apply to?" The replies indicated that they thought most of the extensions to food products should be abolished, particularly food under $5. The extension to feminine hygiene products was mentioned very frequently. The extension to cleaning materials was also frequently referred to.
From this experience with the auditing, I think the minister has the problem of the new people who are being covered by these extensions of the sales tax.
I would like, as one final question, to ask him how he is auditing the collection of sales tax by various nonprofit organizations that hold banquets of different kinds and have never before had to pay tax on the food they sell on these occasional banquets and dances. I would think there is a whole new area there for ministry mistakes and harassment. The record so far has not been too encouraging, and I wonder if those people will be instructed and assisted rather than harassed.
Those are my concerns about the present administration of the sales tax.
The Acting Chairman (Mr. Robinson): With one hour and 33 minutes, on vote 802, the minister.
Hon. Mr. Ashe: Thank you, Mr. Chairman. I will count to 10 in reverse -- 10, nine, eight, and so on. I find it exceedingly difficult when a member makes all kinds of challenges, charges and innuendos on a generalization of harassment, etc., and then comes up with one example. I would bet she cannot even name a second one: one bloody example is all.
Mr. R. F. Johnston: Watch your language.
Did you hear that, Mr. Chairman?
8:50 p.m.
Interjections.
Mr. Cassidy: You would not get away with that in Scarborough.
Hon. Mr. Ashe: Scarborough?
Interjections.
The Acting Chairman: Order.
Hon. Mr. Ashe: It happens to be under appeal, so I am reluctant to go into any details of it. There is the file right there.
Just to fill you in a little bit about dates, you wrote to me in August. I corresponded with you in September and corresponded back to you with the full details of the investigation and so on in October, so it did not go a couple of months before it was acknowledged. In fact, it was a month and then a subsequent month with the full report on the investigation, which I think is fair and reasonable under the circumstances. If we had responded in a couple of days, you would have said: "That is an off-the-cuff response. Why did we not take the time and trouble to investigate the issue properly?"
Mr. Cassidy: Nobody said anything about being off the cuff.
Hon. Mr. Ashe: Nobody asked for your comments, either.
Again, I am extremely reluctant to go into the depth of this file to point out some of the half-truths that have been brought out by the honourable member.
Interjection.
Hon. Mr. Ashe: Half-truths. I did not say they were completely wrong, only half wrong and only half right.
I can assure you that the facts do not substantiate many of the issues raised at all. In fact, many of the issues and concerns raised were addressed in my letter to the member dated October 15, 1982. I might say that as late as last week the member's constituent was in. We are still trying, and have been trying for some time, to get additional information from Mr. Minakis. I understand that at some points in the whole process there could have been some problems with fluency in English. That is fine. I have no problem with that at all, except that we have also been dealing with Mr. Minakis's accountant. To suggest, for example, that the accountant did not know that there was compensation under the Retail Sales Tax Act I find extremely difficult. I would even put a suggestion as to the competence of somebody like that, but I will not.
Mr. Cassidy: You just did.
Hon. Mr. Ashe: You can draw whatever conclusion you want, but that is fact.
We have been dealing with both the client, your constituent, and your constituent's accountant on this issue, and many of the points you have raised, as I say, are not substantiated by the facts. The long and the short of it is that we have extended the appeal period on a couple of occasions to get further information, as I am sure you are aware. As of last week we were still attempting to get all the information because, believe it or not, in the appeal process and even under the initial assessment the auditors both in the field and in the appeal process literally bend over backwards to give the benefit of the doubt to the taxpayer. And that, frankly, is the way it should be. I do not disagree with that at all. I think that is the way it should be and the way it has to be. I had better close with that on the basis that the case is still under appeal and no decision has been rendered. When we get the rest of the details that have been requested, then a determination on the appeal will be dealt with.
With respect to the other issue of nonprofit organizations and so on that we can now start to harass, I am glad to hear that, because it just goes to show what some people think auditors are going to be doing. I can assure the member that we do not have enough audit staff or investigation staff for them to be out misusing their time. They are limited in numbers; they are limited in the number of hours of the day that are available to them. On that kind of issue I would suggest that they would be reacting principally on the basis of complaint.
I have indicated through previous answers in the Legislature as well as in bulletins that have been made available to the members that in the situation she referred to, that is to say the nonprofit organization that has periodical fund-raising activities, if they meet the spirit of the regulations they do not have to collect tax on any event as long as they are from time to time, are not in competition with the private sector on a regular basis and do not exceed $75,000 in sales each year.
Mr. Epp: Mr. Chairman, on a point of order which may be of interest to everyone: I wonder if there is some kind of arrangement with respect to getting to the different votes. We have taken a lot of time on vote 801. A number of us would like to get to vote 804. I am not going to take up a lot of time with deliberations, but is there any understanding between the various parties? Can we get to vote 804 fairly shortly?
The Acting Chairman: There is no arrangement I am aware of except the provisions of the standing order which permit any member to speak on any vote and item once. When we have exhausted that list each time around, we shall move on. On vote 802, we now have the member for Riverdale.
[Applause]
Mr. Renwick: I only wish my colleagues would save the applause for some more appropriate occasion. I have an interest similar to that of the member for Waterloo North (Mr. Epp) so I do not intend to delay very long on this aspect of it, but it is a matter of concern to me.
My question really relates to the power the minister has to make recommendations or not make recommendations to the Lieutenant Governor in Council with respect to the remission of any tax or other penalty.
I do not want to take a lot of time about it and I do not want to speak about any particular case at all. I want to try to generalize my remarks on it.
If it is not appropriate for the minister to do this, do not hesitate to tell me so, but please do not tell me I am a lawyer and he is not a lawyer. I do not need that tonight; I get it in my caucus all the time. What are the principles upon which he from time to time recommends a remission of tax to his colleagues in the cabinet for consideration? Is that too broad a question or should I focus exactly what my concern is'?
Hon. Mr. Ashe: I would prefer if the member would be more specific. There is some latitude in some of the statutes. In most cases, it is under the Ministry of Revenue Act. If he could be more specific, I could attempt to be.
Mr. Renwick: I am speaking specifically of his power to recommend it under the Ministry of Revenue Act and the principles on which he might recommend it. I have in mind a concern as to whether the processes within his ministry have kept abreast of what the law now is, as I understand it, with respect to the classification of circumstances. They are not directly applicable but let it be well understood that, if the failure to pay the tax in a given situation is such that he believes a criminal charge can be laid, then naturally that is not the kind of case I am talking about at all. I am not talking about that kind of case.
The case I am going to refer to is the Queen versus the Corporation of the City of Sault Ste. Marie. The Supreme Court of Canada developed a third classification of case. Whereas our law had been if it was not a criminal offence and it was simply what the courts call a public welfare case not in the sense of community and social services; I would like to call it a public interest case -- where there was a public interest involved in these matters, if it was not a criminal matter all that had to be proved was the actual event and there was absolute liability. There was no answer that the defendant could give to the particular charge.
The minister is probably aware that the Supreme Court of Canada adopted and brought into Canadian law, after a certain gestation period in some of the lower courts, the proposition that there were three classifications: criminal cases, strict liability cases and absolute liability cases.
9 p.m.
Therefore, regarding the mere failure to pay the tax, if in the assessment processes of your ministry that amounted to a penalty, then it seemed to me, sir, that in determining whether you should recommend or not recommend that you should take into account the middle category, that is the strict liability cases rather than the absolute liability cases, if the defendant had an honest and reasonable belief in a state of facts, which, if they existed, would make the defendant's acts innocent, affords an excuse for doing what would otherwise be an offence.
Now that sounds a little bit like legal goobledegook but the situation I am talking about is the situation where -- let me spin an example out of the air. Say that a retailer, thinking that a person who was a vendor to him of, say, cigarettes, for example, thought that the vendor held a licence and was therefore the agent of Her Majesty for the purpose of collecting the tax, bought the cigarettes, then paid to that person the tax which was payable, but the person turned out not to be a licensed vendor. Then say the minister came against the person and assessed him for the tax directly and he said, "I did not know the fellow did not have a licence and I had an honest and reasonable belief in my mind that I was dealing with a person who was a vendor."
You come against that person for a substantial amount of tax which you claim, but he has already paid the unlicensed vendor the tax. For whatever reason, the unlicensed vendor disappears without paying the tax or you, sir, decide not to go against that person and you come against the retailer for the amount of the tax and you levy the tax, say, for example, in the realm of $20,000. You are satisfied, or the defendant convinces you that he had a reasonable and honest belief that the person he was dealing with was a licensed vendor, then are you not imposing a penalty when you, for example, instead of making a recommendation to remit the tax, say to the person, "Well, pay us $100 a month" as a method of reaching a settlement. Then you realize that $20,000 plus interest means that for 20 years the retailer will be paying and paying and paying over the 20 years before -- if my mathematics are right, and they probably are not -- paying off the ministry.
I would think that one could say in a funny kind of a way that you are punishing a person because he has already paid the tax unwittingly -- under a mistaken notion as to what the facts are but on an honest and reasonable belief that the facts were such and such. You are holding him to ransom for 20 years on a $100-a-month payment in many cases where a particular retailer, for example, may be only marginally able to keep himself afloat in business.
It seems to me, sir, that it may well be that by analogy in the recommendations which are made to you as minister as to whether you should recommend a remission, you are not giving full flow to the circumstances which are now part of the law in the courts in other matters with respect to the classification of cases; and that the middle ground, that is, a provincial statute where a penalty is imposed and where the courts now say it is a strict liability situation -- that is, that it is possible for a defendant to stand up and say, "I had a reasonable and honest belief in a state of facts which, had they existed, would have exonerated me from fault" -- it seems to me that you, sir, in the exercise of your discretion should be taking into account those principles in determining the basis on which you would make a remission.
I do not know whether I have expressed it very clearly but at least it is there for the sake of the record and in case it is a matter that we might continue a discussion on in some less august situation than in this court.
Mr. R. F. Johnston: Name one; name one.
Mr. Breaugh: Name something that is less august at this point.
Mr. Renwick: Let me put it the way the Supreme Court of Canada was dealing with it.
"The distinction between the true criminal offence and the public welfare offence" -- which I am going to call a public interest offence -- "is one of prime importance. Where the offence is criminal, the crown must establish a mental element, namely that the accused who committed the prohibited act did so intentionally or recklessly with knowledge of the facts constituting the offence, or with wilful blindness towards them." That is one situation. That would be a criminal offence and I am not talking about a remission in that sense.
In sharp contrast the court goes on: "Absolute liability entails conviction on proof merely that the defendant committed the prohibited act constituting the basic act of the offence. There is no relevant mental element. It is no defence that the accused was entirely without fault. He may be morally innocent in every sense yet be branded as a malefactor and punished as such."
When those were the only two classifications of cases, I can well understand that the minister would be reluctant when the public revenues are in question and his duty and responsibility are to collect the moneys owing to the crown. I can well understand when there were only the two classifications, where it was not a matter for the criminal courts, he would stick to the absolute liabilities standard in the case and very seldom would he recommend to his cabinet colleagues that there should be a remission of the tax. But where the court has recognized this middle ground of strict liability cases as distinct from either criminal or absolute liability cases -- let me, if I may, transpose a few words in the quotation from a case.
"It is one thing to deny that a necessary ingredient of the offence is positive knowledge of the fact that the vendor holds no subsisting licence. It is another to say that an honest belief founded on reasonable grounds that the vendor is licensed cannot exculpate a person who purchases from him. As a general rule an honest and reasonable belief in a state of facts, which if they existed would make the defendants" -- that is the taxpayers -- "act innocent, affords an excuse for doing what would otherwise be an offence."
I do not want to pursue it at great length; it gets legal and complicated. The classifications are now there in the courts in relation to environmental offences, occupational health offences, all sorts of other offences. But in the strange world of tax assessment, when you assess a retailer in the kinds of circumstances which I put before you hypothetically, where the retailer has already paid an amount of money to the person who was the vendor but who he thought was licensed, and you then assess the tax against him and say to him, "Oh, yes, we recognize the circumstances of the case and we will only collect $100 a month," and in the case of the tobacco tax, it is a $20,000 tax item which you are assessing him for, then it seems to me to be a rather unusual punishment you are imposing on him to say: "For the next 20 or 25 years you pay us," depending on how the minister calculates the interest. "You pay us $100 a month and your fine." This is the local corner store operation or a very small operation.
9:10 p.m.
I was just curious as to whether or not the minister is giving any consideration to implementing the power which he has to recommend that the cabinet give consideration to taking into account that a retailer may have acted on a reasonable and honest belief in the state of facts which, if they had existed, would have eliminated his problem.
I hope I have put that clearly but I am not certain that I have.
Hon. Mr. Ashe: I might say, Mr. Chairman, it is completely clear because I am very specifically aware of the specific case that the member is talking about, even though it was a general case out of the air.
Mr. Renwick: I was generalizing on a situation which strikes me as being important.
Hon. Mr. Ashe: I appreciate that. Let me assure the member that under that particular situation, and, I might add, not only with his constituent but in a reasonable number of like situations, in the view of our legal branch we are already taking the newly expanded version as put down by the Supreme Court. We have given the situation the benefit of the strict liability. We have kind of bought the argument, if you will, that there is some kind of an extenuating excuse that negates the absolute liability, or the criminal liability. We have already given them that.
Frankly, that is the reason we did not prosecute under the Tobacco Tax Act, but, under the Tobacco Tax Act, it says we must assess. That is what we have done.
I know we can argue the numbers and problems of the corner store, but I am not going to challenge or debate that one because we both know the problems that exist in that particular situation and others. I think the member would agree that there is some obligation on the part of retailers who are in business to know the people they do business with.
Frankly, I think there is an onus upon them to know that if somebody comes along with a bit of a deal, some suspicions should be aroused. If one can buy something cheaper here than through another supplier, at least a bit of suspicion should be aroused. There is no doubt that part of the tax was paid, if you will, to an incorrect source. On the other hand, part of it was not paid in the context of the better price that was obtained.
I think we did recognize those circumstances, again in this case, and in a couple of others like it, and who got caught partially innocently -- if there is such a thing as being partially innocent. The phrase is probably a conflict in itself. That is only partially guilty too.
Recognizing the economic realities of the situation, we did allow them to make more than reasonable payment arrangements that we would not normally do in other more difficult situations, or where there seemed to be no reason for us to be so lenient. It is an area in which, frankly, we have been involved and are working on very diligently within the audit and special investigations branch. This was how some of these problems turned up. It is unfortunate that some retailers, some of which the member was citing, got caught in the sense of being caught in the net rather than caught in the context of their guilt, partial guilt and/or partial innocence.
Again, I want to reassure the member that we have given them, in the view of our legal division in any event -- I will claim and pass on to him that I am not a lawyer -- the advantage of the strict liability interpretation of the Supreme Court.
Mr. Renwick: I have a very brief comment in response. It is interesting how the statute is drawn because, again without purporting to have studied the matter at any great length, the fact that it is the minister recommending to the cabinet removes the decision from the purview of the Statutory Powers Procedure Act.
For example, if the Ministry of Revenue Act simply said the Minister of Revenue could determine whether to remit the tax, then if my understanding is correct he would have had to hold a hearing. In the absence of a fair hearing with the taxpayer on the matter, the taxpayer could go to court to make certain the minimum rules of natural justice had been adhered to. In the situation we are in, because it is the minister recommending to cabinet and it is a cabinet decision, that excludes that opportunity.
Therefore, in the broad range of cases the minister could have, there is a situation where a taxpayer against whom the minister cannot and does not lay any criminal charges, and whom he claims to assess, is placed in the kind of situation which every now and then the Attorney General teases this House with, that he wishes we had the Scottish verdict of "not proven." Of course, that is not part of our law.
Where a retailer has paid out a significant amount of money to a person whom he thought was the holder of a licence and the person turns out not to be the holder of a licence, and the minister turns on the retailer to collect that money from him, I think the minister in a funny way is assessing a heavy financial penalty.
It turns out in cases such as I was illustrating, and other people could come up with other situations, that it is double the amount for practical purposes. The minister is saying to him: "We are going to keep a string on you, boy, for quite a long time. You pay us $100 a month for 20-odd years, and that is a bond for your good faith that you will not do this heinous deed again." The minister is saying it to a retailer who may very well be in the position that he had an honest and reasonable belief the person from whom he was buying the cigarettes in the first place was a licensed vendor and not an unlicensed vendor.
I was trying to generalize away from the specific case, although I naturally had the specific case in my mind. It led me to this belief: Whatever principles the minister decides, or his ministry comes to him and decides or places in a case before him, to determine whether he will recommend to the cabinet a remission in whole or in part of a tax that has been levied, or any other penalty, it seems to me in my humble judgement that the minister would be well advised to pay close attention to the classification set out in the case of the Queen versus the city of Sault Ste. Marie in the Supreme Court of Canada in 1978.
Mr. G. I. Miller: Mr. Chairman, I would like to get clarification from the minister on the tax that is being applied to church organizations and nonprofit organizations for fund-raising affairs within their municipalities.
I received a letter from the Kohler United Church women's group which has written to the minister. I have had considerable correspondence with them. They wanted clarification of the bulletin put out by the ministry which indicated $75,000 could be raised by fund-raising events within the church organization without having to contribute tax. But it went on to say that if meals were provided for various things and the food was prepared by the women of the church to raise funds for the church, all this being donated, the tax would apply.
Again, the minister was good enough to clarify this matter after we had written to him a couple of times.
9:20 p.m.
We have another case, the Christmas Panorama, which is held in Simcoe and which attracts a lot of people. The local restaurants and other public places cannot handle the numbers of people. Consequently, the churches put on dinners for the visitors and, again, the food is prepared by the people of the church.
Mr. Wildman: They are competing with the private sector.
Mr. G. I. Miller: They may be competing with the private sector but, as I pointed out in the beginning, $75,000 can be raised according to the bulletin that was applied. I do not know how else any church organization can raise $75,000 without putting on dinners for that sort of function. Besides that, most of these small congregations have difficulty getting people to take on the various responsibilities, such as the treasurer, who now has the additional burden of keeping track of sales, figuring out the sales tax and mailing it to the tax office on time, which all takes extra time.
The people from the Kohler United church, in particular, have made it very clear in a letter, of which I believe the minister has received a copy, that in these financial times it is difficult to keep the congregation working on behalf of the community and for the good of all the people of Ontario.
I really believe the government is making tax collectors out of the churches. If the minister would take another look, maybe that $75,000 could be used as a foundation without taxes having to be collected on behalf of the province.
Hon. Mr. Ashe: Mr. Chairman, there is no doubt that this is a difficult area. Yet to try to keep it fair and reasonable and have a fair marketplace out there, we have to recognize that the availability for nonprofit and charitable organizations to raise funds was expanded from the criteria included in previous regulations. There still is every opportunity.
It is not a matter of their raising $75,000 in terms of profit. It is a matter of gross sales in a calendar year not exceeding $75,000. This obviously gives lots of leeway for most smaller organizations. It is particularly generous for that very reason. It would be only the larger operations, if you will, that would generate that kind of volume in a given year. There is no doubt that nonprofit organizations can have intermittent events to raise funds for their own purposes without having to collect tax.
On the other side of the coin, if they are competing with the private sector in the same situation or on the same site, or in the same activity, as the member has identified, I think it is only fair to the person on the corner who, as the member himself indicated, is operating a restaurant or whatever, to put them both on an even footing.
The one thing that always seems to be forgotten, and I realize the member made reference to both in his remarks, is the fact that it is not the church or the organization that is paying the tax; it is the consumer who is paying the tax. If there is any extra liability on the part of the operator --
Mr. Breaugh: You're using churches to collect taxes. It's disgusting.
Hon. Mr. Ashe: Yes, they are collecting it. But even there we have made it much simpler in that they can be charging a tax-included price. If they have a meal for $3, they can have a meal for $3.25, including tax, and remit to us seven one hundred and sevenths of the proceeds by one simple calculation on the total receipts. Added to that, we pay them four per cent of that for their trouble, which possibly adds another few dollars of revenue.
The point I am trying to make is that, even in those situations where there is competition or where they are catering regularly to banquets, weddings, service club lunches, etc., and they are responsible for charging tax, they do not pay it themselves. That same organization or group buying their services would pay it anywhere else; if it went to the corner restaurant or the corner catering hall or whatever, it would pay it there. There is no additional obligation on anybody.
We say to the organization: "We appreciate that you have a little more hassle than you did before. You have a form to fill in. You can add up your sales, multiply by seven and divide by 107. That is all you have to send us, one calculation, but because you have to do that, keep four per cent for yourself up to a maximum of $1,000 a year."
I do not think it works out to being a great hassle or imposition. We try to keep it fair and reasonable, and at the same time we recognize that it is going to take a little adjustment on the part of some organizations.
I think the greatest problem is the feeling within some church groups that it is not their function to be a tax collector. In the context of the church proper, I think that has been recognized in the past. That is why churches per se do not have liability and pay property taxes on the church portion of their operation. If they could separate in their own minds the same situation relating to activities run by church groups, it might become a little clearer that it really is not the burden it is purported to be.
Mr. G. I. Miller: I agree there is some fairness in it, but the minister is talking about $75,000. The church I belong to makes $5,000 or $10,000 maximum in a year. Many churches only make $1,000 and they still have to go through the procedure of filling out the forms. As the minister indicated, they get four per cent back, up to $1,000. I think this government is just putting more responsibility on little organizations that really do not need it. They have enough headaches and red tape to contend with now, and it is just more red tape this government has put upon them.
Mr. Stokes: Mr. Chairman, I want to talk to the minister for a moment about something we have had considerable dialogue on over the years. That is the exemption from retail sales tax for Indian people for things bought on the reserve or for native people who can show a document indicating to the retailer that they are status Indians and that the goods are purchased for use on the reserve.
The minister put out a bulletin a couple of years ago that was less than lucid. In fact, it was unclear. I think he has improved it somewhat. I only had to talk to one of his officials to ask for an explanation of what the present one means. But there are a lot of retailers who are still having a great deal of difficulty with the intent. Many of my constituents who happen to live on reserves are still not clear what the full intent is and when the exemption applies.
I wonder whether the minister would consider revising that bulletin so that not only the retailers, but also the people to whom it applies, will have a clear understanding of that retail sales tax exemption, as to when, how and under what circumstances it does apply.
9:30 p.m.
There is one other thing I want to talk to the minister about. I have had considerable correspondence with his federal counterpart about this.
Mr. Elston: A much more reasonable gentleman, probably.
Mr. Stokes: Not really. I refer to the fact that people who earn their livelihood on a reserve exclusively are exempt from paying personal income tax. If 100 per cent of their actual earnings are earned on a reserve, there is a complete exemption from income tax.
The minister may ask: "What has this got to do with me? I am the Minister of Revenue for Ontario." If he will look at the income tax form, about 40 per cent of what the federal government collects finally finds its way into the minister's coffers.
I think his federal counterpart is being very hidebound about the interpretation of that exemption from income tax. They are saying things like, "Well, we have made an assessment that 59 per cent of your income was earned on the reserve as opposed to 41 per cent that was earned off the reserve."
It was all earned in the same community, but if you go to northern communities where there are airstrips, where there is a lease by his friend the Minister of Transportation and Communications (Mr. Snow) so they carve out a piece of the reserve for purposes of building an airstrip, technically it is not within the reserve. If you get somebody who works 41 per cent of his time on the airstrip, he pays income tax; and 59 per cent of his time he uses for repairing roads in the village. That is the kind of arbitrary decision that the Department of National Revenue makes on this.
Does the minister ever have any conversations with his federal counterpart about the application of taxes, how they apply and what percentage of it applies? Do ministers of revenue get together to discuss these things? It causes a good deal of trouble for bureaucrats at the local, regional and provincial levels, and then it gets over to the federal level.
Is there any way the minister can sit down with his provincial counterparts and the Minister of National Revenue to see whether we can find a clearer, much more succinct and much fairer way of applying those exemptions in a more uniform fashion so that we can cut out all of this bureaucracy and red tape and give our first citizens what they are entitled to?
The Deputy Chairman: The Minister of Revenue.
Hon. Mr. Ashe: Thank you, Mr. Chairman.
Mr. Wildman: I have something on the same thing if you would like to --
The Deputy Chairman: All right. The minister can take a moment's rest, and the member for Algoma can speak. I suggest, though, since we have only 49 minutes left and some other honourable members are looking to speak on vote 804 and a few of the other votes, we just keep it moving.
Mr. Wildman: Mr. Chairman, I will take your advice. On the matter that was raised by my colleague the member for Lake Nipigon, I want to underline his concerns with regard to the exemption for treaty Indians from the retail sales tax.
A number of years ago there was considerable controversy in the Sault Ste. Marie area over this issue. It related not just to the reserves in the immediate vicinity of Sault Ste. Marie but also to most of the bands that are under the Robinson-Huron Treaty. I think I congratulated the minister at the time for the readiness with which his taxation people were willing to meet with the bands.
We set up and had a meeting with the chiefs from a number of the bands in the Robinson-Huron area at the Garden River reserve to talk about specifically the sales tax exemption. At that time, as the member for Lake Nipigon said, the procedures were somewhat simplified to make them easier not only for the Indian people but also for the retailers who were to apply them. After that, there was far less difficulty in our particular areas.
Unfortunately, there still remains some difficulty. It seems there is no great uniformity with which the exemption was applied. There were exceptions where some retail outlets were doing it one way and others another way.
When it appeared that some of those problems were being resolved through discussions with the ministry and by having ministry people visit the retail outlets to inform the business people of how they were to do the exemption, the Treasurer (Mr. F. S. Miller) brought in a new budget and we ended up with another problem, because suddenly the government was applying the retail sales tax to cheap meals, the takeout meals.
We have a situation where treaty Indians, who have never had to pay a retail sales tax and who are supposedly exempt, suddenly have to pay a retail sales tax for food they buy at a fast food outlet.
Mr. Stokes: Unless it is on a reserve.
Mr. Wildman: Unless it is on a reserve. I am talking about next to a reserve.
Mr. Stokes: There is an exemption on the reserve.
Mr. Wildman: That is right. The question which then arises is, how does the ministry know where that food, if it is from a takeout operation, is going to be consumed, especially when you are talking about an area such as Sault Ste. Marie where the Rankin Location Indian Reserve is within the city limits and the Garden River Reserve is right next to the city? You might be talking about a five- to 10-minute drive home from an retail food outlet in the east part of the city.
The government and the ministry are taking the position, because this is fast food and they do not know where it is going to be consumed, that even if the people say, "We are driving back to the reserve," they have to pay the tax.
I thought we had this on the way to being resolved, but the new budget now has thrown a wrench into the whole thing. We have the ironic situation of people who, if they are purchasing an appliance or furniture that is to be used in their homes on the reserve and it is delivered to the reserve, or even if it understood that it is being taken to the reserve to be used there, they are not paying a retail sales tax, but their children are having to pay retail sales tax on food that very well could be consumed on the reserve. It just does not seem right to me.
If we believe in the treaty rights that were agreed to at the time of the negotiation of the Robinson-Huron Treaty and the other treaties that apply to Indian people in this province, and in the constitutional recognition of those rights, then we should be living up to them and not requiring them to pay retail sales tax on anything that is going to be used on the reserve.
Hon. Mr. Ashe: Mr. Chairman, on the issue of the retailers and the Indians knowing the status of the process and the reference to some consistency a couple of years ago, that was when, to buy goods and pay no retail sales tax, they had to be delivered to the reservation.
That was easy and consistent, but I would suggest that is what has caused a lot of the problems. That is why, in effect, we looked at it and about a year and a half ago, since I became minister, we changed it. We sent out new bulletins etc. to the appropriate areas, principally those dealing with status Indians in and around reserves.
I think there is a lot of familiarity -- not exclusively, I suppose -- but what we did say was that for the goods that were still delivered on the reservation, that did not change, but an Indian who could prove his status on the reserve could buy tangible personal property off the reserve and take personal delivery and still avoid paying the retail sales tax. That has worked reasonably well with very few difficulties on the part of the retailers, and I think understanding on the part of the Indian community. They still disagree with it from time to time, though, frankly, the reason for that escapes me.
9:40 p.m.
The food issue is another one. The only thing that has changed there out of the last budget is the price on which tax is payable. Before, if an Indian had a restaurant meal off the reserve in excess of $6, he paid tax. There was no doubt about that. The only difference now is the amount. As for takeouts, we presume that at a takeout restaurant consumption takes place at the point of the takeout restaurant and we are not going to try to change those regulations to accommodate the one or two situations that may have arisen that have caused a few people upsetting situations.
I would suggest if that seems to be a problem, there are two answers: either move the takeout restaurant on to the reserve or make sure to deal with a takeout restaurant that has delivery and make sure that delivery is taken on the reserve. Obviously, that is then where delivery takes place. If somebody picks up at a takeout restaurant, delivery is presumed to have taken place there. In the case of food products, we do not recognize that what goes in here still ends up back on the reserve. If it is put in there outside, it is taxable.
Mr. Elston: Mr. Chairman, as I entered the House there was some discussion taking place with respect to the charging of tax on some of our churches, a question that was raised by the member for Haldimand-Norfolk (Mr. G. I. Miller). Some of my constituents have come up with some difficulties that have arisen with respect to churches that provide the service of meals to various groups. Since May, when the budget was introduced, I was under the impression that the ministry required all churches to have vendors' permits if they catered to weddings or functions such as that, testimonial dinners, celebrations of one sort or another that were not directly sponsored by the church itself.
I received a couple of the ministry's circulars indicating that. When people inquired, I said: "Yes, you will have to apply because the minister has said, when you cater to weddings and so on, you will be required to get a vendor's permit because those are not church-sponsored events. You are allowed a reasonable number of church events. Otherwise, you will not have to get a vendor's permit unless your sales go over the $75,000 plateau."
Within the last couple of weeks, I again had cause to inquire at the ministry offices in Orillia and Kitchener and I discovered that there has been a subtle change. That change apparently is that the ministry has developed a program whereby these charitable organizations can cater to a reasonable number of events, including weddings and other things where there is competition even among those charitable organizations and caterers.
It came as a surprise to me because I had not seen a circular indicating that the minister was moving in that direction. I am pleased that he will allow various charitable organizations to escape having to remit sales tax if they comply with the reasonable number of events prescription in his instructions. The minister is shaking his head, but that is what we have been told by his offices.
Hon. Mr. Ashe: Some people make mistakes some of the time.
Mr. Elston: Pardon? They are mistaken.
I was told on one inquiry that as long as the church in question was only going through a reasonable number of these events it should return the vendor's permit it had received earlier, sending in the permit and then advising it did not have to remit tax because it was not doing this catering on a regular basis, i.e., once a month or twice a month, whatever appears to be unreasonable in the mind of the director of that local office.
Maybe the minister would like to clarify that because it became very unclear to me after I made those inquiries and became quite surprised by the whole series of statements made to me by those people.
Hon. Mr. Ashe: I can assure the member we will clarify it with the local manager of that retail sales tax office because the policy has not changed. If the church or charitable organization is in the business of catering, even on an intermittent basis, to service club meetings, banquets, wedding receptions and so on, in effect outside groups, tax is collectible and remittable by them. That has not changed. Somebody either misinterpreted the question or created a new set of circumstances and gave the wrong answer.
Mr. Elston: I made it very clear. I was quite surprised when the answer came back saying we should turn in the vendor's permit. I do not know exactly how many organizations have now been told they do not have to get the vendor's permit. That has caused some chagrin when it comes to intercommunity dealings between the various congregations involved in these functions.
I was also told it would be reasonable to apply to the ministry for an order in council exempting the various charitable organizations from having to remit tax on the basis they provided a singular service in the community. At least, that was the suggestion I took from it. They did not use those words directly to me.
I might ask the minister at this point if he has had some of those types of applications and, if so, how many? How many have been successful and what are the bases upon which these exemptions are being granted to these various charitable organizations?
Hon. Mr. Ashe: I do not know how many people have written with their own particular sets of circumstances. These are still a routine kind of inquiry. In terms of some of the other specifics that have come to us, I can think of half a dozen. Nobody has been given an exception or an order in council. Pardon me, I can think of one.
What are the senior scouts called? The Rovers were having a jamboree on the Niagara Peninsula, if I remember, some time in June or July, or something along those lines. It was a worldwide event. They had already indicated to the various groups who were coming from throughout the world what the costs would be because they had already been negotiated with a caterer.
In this instance, it was a matter of telling the caterer that he was going to have to pay it. He had cut his pencil so sharp there was nothing for him to pay it with. It would mean going to all of these various Rover groups who were coming from different parts of the world and saying, "You owe another X number of dollars per day or per week to cover sales tax." This was all finalized when the budget came in and the event was taking place shortly thereafter.
On the basis of that, and knowing exactly what the sales tax would have been in this case because there was already a negotiated contract with the local caterer, I recommended and brought forth a remission of the tax that would otherwise have been payable. It was accepted by my colleagues. That is the only one I can recall I have recommended to my cabinet colleagues and it was accepted.
9:50 p.m.
Mr. Elston: I would like to ask another question. I guess it actually comes down to a two-part question. Since the policy is now that as a charitable organization you will be able to have a reasonable number of your own sponsored events but that you must remit tax on all catered events, we will say, is the minister considering including the catered events in the reasonable number? I am trying to find out exactly how the reports came to me from his ministry that some exemptions might be granted on that basis.
Second, I wonder if the minister would consider the situation of those people who work to raise money for functions like the United Nations International Children's Emergency Fund. I was over at the Macdonald Block last week and I happened upon the UNICEF display, where they are selling cards and other sorts of things for that fine charity. They have to charge the seven per cent tax, of course, and remit it to the minister even though their funds are going for a very worthwhile cause. Has he considered granting exemptions to those sorts of charitable functions and, if so, is he in favour of granting some exemption to those types of organizations, or does he plan on any activity that might require them to remit but then maybe give them back the tax in recognition of the fine job they do?
Hon. Mr. Ashe: We have no plans at this time to expand the situation involving the churches and other charitable organizations. Of course, I cannot say this is forever, but at this time there is no thought of expanding it. We looked at all of the various issues that were brought forth earlier in the year, and I think we have come up with something that is reasonable from all perspectives.
With respect to the other issue having to do, for example, with UNICEF, I think where the whole thing gets crowded is that, again, nobody is going to belittle or underrate or underestimate the value of the project or the end result of where the proceeds go. On the other side of the coin, to suggest that we as the Ministry of Revenue or as the government are taking money from UNICEF to satisfy some of our tax needs, and our tax needs are the people of Ontario's tax needs, we are not.
Mr. Elston: You are.
Hon. Mr. Ashe: No, we are not. That is not so. If you buy some of their cards at $3, that is the price of their cards. On top of that the consumer is paying 21 cents in tax: $3.21. If we eliminated the tax, they would still be getting the same $3. The only winner would be the consumer, not UNICEF and not the taxpayers of Ontario in the context of the moneys we collect and put back into the community.
Mr. Elston: Why don't you charge seven per cent on top of these cabinet ministers' leadership dinners?
The Deputy Chairman: Order.
Hon. Mr. Ashe: You had better debate that with another of my colleagues.
The Acting Chairman: On vote 802, with 29 minutes remaining, the member for Oshawa.
Mr. Breaugh: Mr. Chairman, I do not want to take a long time, but I do want to put on the record once again my opposition to a number of things that are practised under this particular vote. I still think the expansion of the retail sales tax to include a large number of items, including feminine hygiene products, is inappropriate, that it is the wrong place to tax; that using charitable groups as tax collectors is wrong and, more than just being wrong in a moral sense, is just plain stupid, because I think the government is creating a lot of aggravation out there and setting up a rather impractical means of gathering revenue for the government.
I do not care what they do, they are not going to get very much revenue out of those church groups and charitable organizations; all they are going to do is aggravate them. I would say now that just before the next provincial election we will see a gradual retreat of even the Minister of Revenue from this whole field. They will just slowly but surely back off and get out of it, because it is not an appropriate place for them to be and they know it. I think they have rather stumbled into something here that they will in their own style, as gracefully as they can, withdraw from, because the revenue coming out of that kind of stuff has got to be peanuts and the aggravation has to be extremely high. It was a dumb mistake in the first instance, and no matter how one tries to change regulations and put out new circulars and retrench, it is a wrong move and the government is going to get out of there sooner or later. I would make the pitch that it ought to make that sooner.
The same thing applies to the cheap meals one can get at a fast food outlet. That is wrong. I do not care what numbers the Treasurer puts out, it has a negative impact on that industry, just as trying to get somebody on a catering wagon to collect retail sales tax is a dumb move as well. There is a whole range of things that I am sure if this minister applied some cost-effectiveness measures to he too would be prepared to say: "Never mind what the Treasurer wanted to do in his budget. This just does not make any sense. It is costing us about $15 million to run this tax collection process and we are getting a very poor return for our investment."
I know the minister is not going to announce this evening that he will back off, but I am convinced that sooner or later, the Treasurer in his next budget or the Minister of Revenue at some time will begin the process of backing away from that. I know for sure in my heart of hearts that by the time the next provincial election rolls around, none of these stupid taxation measures will be anywhere in sight. I think that is almost guaranteed.
The other thing I wanted to touch on under this vote is the racetracks tax, simply to point out that here is a government in 1982 that is up to its eyeballs in the numbers racket, in race- tracks, booze and cigarette taxes. If it were not for people's sins, this government could collapse tomorrow. What is even worse about it --
Mr. Wildman: It is a sinful government.
Mr. Breaugh: It is a sinful government. What is even worse about it is that it seems intent on expanding that basis as regularly as it can until pretty soon I warrant the largest chunk of money that this government will receive from all different sources will have something to do with what most of us would call sin. Without sin, this government is in deep financial trouble.
I would be happy if we would carry this vote and the next one and move to 804, because I am sure a number of members here have matters concerning assessment that we would like to discuss for the remaining 32 minutes.
The Acting Chairman: Would the minister like to respond --
Mr. Breaugh: He has no response.
The Acting Chairman: Let me make that inquiry, if you do not mind.
Hon. Mr. Ashe: Mr. Chairman, so that we will give the members some time on vote 804, I will not make any specific response, because I do not feel one is necessary. The only thing I will say is that generally, in any tax system, whenever there is a change, nobody likes taxes, nobody likes more taxes, but I think the main criterion is to get fairness, at least, in the tax system and with fairness eventually comes some acceptance.
Vote 802 agreed to.
Vote 803 agreed to.
On vote 804, property assessment program:
Hon. Mr. Ashe: Mr. Chairman, in the opening remarks of both critics, they specifically had some questions and used some numbers relating to the Metropolitan Toronto impact study. To make sure I have answered the questions raised by the two critics, and to deal with the anticipated question by the member for Waterloo North (Mr. Epp), I will use about two minutes to answer the questions. I think that may save a lot of problems.
The member for Rainy River (Mr. T. P. Reid) and the member for Oshawa (Mr. Breaugh) both raised questions concerning the cost of the Metropolitan Toronto reassessment project. Both quoted numbers, some of which I recognized and some of which I did not. The printed estimates before the House for vote 804, item 4, assessment field operations branch, include $1.7 million for the Metro reassessment project. These estimates were prepared around December 1981 or January 1982 on the assumption that work on the project would start immediately and that $900,000 of the total project costs would be spent in the fiscal year 1981-82.
In fact, work on this project was delayed while Metro reaffirmed its commitment to the project, and work did not commence until late March or early April 1982. This meant that all of the work would now take place in the 1982-83 fiscal year rather than 1981-82 and 1982-83. The total cost of $2.6 million would now all be spent in the one fiscal year and not be divided between the two years.
10 p.m.
In May of this year I responded to questions from the members for Oshawa and Waterloo North, giving cost estimates for the project of $2.6 million. With the compression of all of the work involved into the current year, the cost of the project was increased to $3 million. That cost, and the previous numbers I referred to, relate to the cost of additional work over and above the cost of the Metro assessment staff already in place.
I am not aware of the members' numbers of $4.6 million, $4.8 million or, indeed, $5 million, and can only assume they are making their own estimates of the Metro office costs that form part of the regular cost of operating the assessment offices in Metropolitan Toronto.
Mr. Epp: Mr. Chairman, I appreciate the figures that the minister has given us with respect to the study he has done in Metropolitan Toronto and the fact that he has updated those figures from $2.625 million to $3 million, which he says includes additional work.
Can the minister give us a breakdown of the travel allowance, meal allowance, accommodation and personal calls to assessors' families, and also what other categories there are and the costs associated with these various categories? Could he give that to us? If he cannot give it today, he can maybe give it to us in written form a little later.
Also, when will the study be released and why has it not been released to date? He has had the study for some time, as I understand it, and he still has not formally released it. I am wondering whether he could give that to us because there is no sense in his sitting on it.
The other aspect of this study is that I am wondering why he included the city of Toronto in it because it had not requested it. It may resist it for some time to come and then the study will be outdated and the expenditure on it will then be a waste of the taxpayers' money. There may not have been any real reason to have included the city of Toronto in this study.
I also have some other questions that I would like to ask the minister with respect to the assessments. He knows that Tax Reform Action for the People and others have been very much involved in about 6,800 assessments. Has the minister calculated the cost of having these 6,826 new assessments automatically appealed to the assessment review court? Does he have an estimate of that? Also, why was it necessary for the minister to obtain legal counsel from outside the ministry when he had legal counsel inside the ministry available for appealing these cases?
Maybe he could indicate how much he pays the legal firm for doing these various appeals because, as the minister knows, during the past year the city of Toronto has paid a part-time solicitor $140,000 for doing some work on the Planning Act. I am wondering how much the government of Ontario is paying its solicitors, whether they are working on a full-time or part-time basis. Would he make those figures available to us?
How much is it costing the Ontario government for the ministry's review of the assessments of 6,826 homes in preparation for the appeals and the court case itself? That is in addition to the actual appeals. He may also want to indicate the cases where the appellant was successful in having his or her assessment reduced and, if no building permit is going to be issued against that particular property in this year, whether the minister will give the assurance to the House that the property will not he reassessed next year again. I see him nodding his head. I get the impression that he is not going to give that assurance. Or is he saying no, it will not be assessed? That is a question he can answer.
With respect to a number of other matters, I want to touch on the urea formaldehyde foam insulation problems. Just a few weeks ago the minister indicated that he was going to establish a tax reduction on these various properties -- I am talking about the buildings themselves -- of 35 per cent of the assessment. I think he is being blatantly unfair to the people who had their assessments reduced by maybe 70 or 75 per cent, or whatever they were over 35 per cent.
First, he encouraged them to go to the courts. The government encouraged them to go to the courts if they wanted to have reductions. They spent their money, they spent their time, some of them hired solicitors. They went to the courts to get a reduction. They had a fair hearing and then the minister came and unilaterally reduced that assessment to 35 per cent.
I can understand him possibly applying that 35 per cent to next year but I could not understand him applying it to this year, as I understand he has done. He is being very unfair to the people who have this awful problem with the urea formaldehyde foam insulation.
I have just one other point which I will cover very quickly. It has to do with the sale of the 10,993 Cadillac Fairview units in Toronto. Assessments are established on various bases. One could be on the basis of replacement value or on the sale of these properties. I know that my colleague the member for Erie (Mr. Haggerty) touched on this earlier.
If you look at these units from the standpoint of the amount they are selling for, if you look at the escalation in the cost, if the figures are correct, then 10,993 units into $500 million comes to around $50,000 a unit. If that is the case and if this is a legitimate sale -- some of your colleagues tend to suggest there is nothing wrong with it, nothing illegal, everything else -- then the assessment obviously should go up to $50,000, if you want to use that yardstick.
If that is the case, the assessment on these various properties might multiply by four or five times. I think they were assessed at around $11,000 before. The initial sale established the price at around $25,000 a unit, using round figures. So, the assessments will be more than multiplied by four. That is a substantial increase.
Maybe the minister's assistants have all the answers to this and he can give us some indication in his remarks as to what is actually going to happen to the assessments if $500 million was paid for these almost 11,000 units.
Hon. Mr. Ashe: So that I will not take up too many of the remaining minutes repeating exactly what I said earlier, I would ask the member for Waterloo North whether he was in the Legislature when I responded to the member for Erie.
Mr. Epp: Yes, I was in the House but the minister did not fully respond.
Hon. Mr. Ashe: I do not know what else I can respond, other than what I said then. I indicated that the whole issue is being investigated to see whether ultimately they prove to be a bona fide series of sales or not, and that in the meantime we would not be using them in any calculations.
I indicated that even under normal circumstances, extreme cases at either end of the sales picture are excluded. So even under those circumstances all or most of them would not be included. I do not know what else there is to say.
Mr. Epp: That is this year. Next year, the minister may very well have them go up. Is that not true?
10:10 p.m.
Hon. Mr. Ashe: Not necessarily. Again we look at the marketplace, and any reassessments we are doing now are based on 1980 market values, which obviously recognize any update at the time they are done.
But in any event I think we are just presuming a lot of things. We will not be taking those sales into consideration at this time, that is for sure. In a year from now, I hope in a few months from now, the whole issue will be clarified by the various bodies that are investigating that total transaction.
On the issue of the homes insulated with urea formaldehyde foam, I think it is safe to say -- and I think I made it quite clear on the day I made the announcement of the government policy a couple of weeks ago -- that the situation today and the situation a year or so ago are quite different. We did not have any market experience or other experience just over a year ago to determine what the effect would be on market values. There was no indication of any sales in the marketplace. We still did not have any research done on the estimated cost of normally correcting the presumed problem.
So quite rightly we encouraged and assisted home owners in appealing their assessments to the assessment review court. We went ahead and made the decision that whatever the decision of that court would be for the 1981 assessment and for 1982 taxation, we would not appeal that decision; whether we agreed with it or not, we would not appeal it for that year. And that is exactly what we did. We did not appeal the tax reductions that were obtained, whether they were 45 per cent, 50 per cent or 75 per cent, for this year's taxes -- 1981 assessment, 1982 taxes. Those benefits went back to the home owners, and they received that reduction for that year.
But I also indicated in responding to many questions during the year that we would look at the whole issue during the year as it went by and that we would come forward, as we were asked to do, with a policy this year for the subsequent handling of the UFFI homes, and that is exactly what we did. During the year, to the degree that was possible, we investigated all of the sales that took place, which totalled something in the area of 100. We discounted about half of those, because there was every indication that the purchaser might not have been aware of the insulation when he purchased the property. Forty-eight properties were left that were bona fide sales with full knowledge of the insulation. We used that information as the basis. I indicated the day I made my policy statement, as I indicate now, that this still is not very many; I do not deny that. This is not a very significant number of transactions in the past year.
Mr. Cassidy: That's because people cannot sell at any price.
Hon. Mr. Ashe: Now there are comments from the peanut gallery.
So we will continue in the coming years to monitor additional sales.
But there was another consideration when we were looking at the whole issue. We went to experts in the trade and said: "Okay, here is the problem. Let us look at your normal house. What is the real cost if somebody wants to solve the problem completely?" Whether they were waiting for the federal government's policy or pronouncements or $5,000 was neither here nor there in the context of the issue we were looking at. We found out what it would cost in most usual situations to remove the interior lathing, wall board or whatever it might be in most households, to remove all signs of the insulation, reinstall walls and bring the house back to its normal level as it was before the installation of the insulation.
We came up with the figure that probably 25 per cent of the value of the home was just about right. When we looked at those numbers together we said, "Well, 25 may be a little low, considering what happened in the reduction based on our sales, so we will go to 35 per cent, which should be more than sufficient to compensate for the decreased value of those homes." Keep in mind they really have not decreased in value at all unless the owners want to sell them or try to sell them. In some instances, you could say nobody would buy them in a market such as we have had, but that has not been the experience. The problem can be solved by somebody who wants to solve it. I think the recognition of 35 per cent is extremely fair.
Do not forget, every dollar that is reduced from this or that property has to be paid by the rest of the taxpayers in that municipality. So there are two sides to fairness: fairness to the home owner who has the problem and fairness to the other ratepayers in that municipality. On that basis I think 35 per cent fills the bill. That, by the way, is effective on the 1982 roll for 1983 taxation. There was no retroactivity at all. The policy statement was made before the return of the rolls, so everybody knows the basis for it.
We have encouraged this and will continue to do so. We advertise and send out notices telling people that if they have urea formaldehyde foam insulation and were not part of the appeal process last year, to let us know. We are doing everything possible to communicate with the home owners out there. I think it is fair. Those who do not, will have the same appeal process open to them as they had in the past.
Mr. Epp: Then you will change it?
Hon. Mr. Ashe: There is no doubt. This difference next year will be going in front of the assessment review court on the basis that we now feel we have a figure we can justify and substantiate.
I would suggest that in many of the decisions made this year the courts had the same problem that we had. They really did not have anything to hang their hats on, either. As it has turned out, they may have been a little too generous in some situations, but that will remain to be seen on issues that may be brought before them based on appeals of the 1982 assessment rolls.
On the Metro situation, I can give you a breakdown of that approximately $3 million. The casual staff in Metro offices were summer students and people who were brought in on a part-time or contract basis to aid in the calculation process. They were not people who were physically involved in the field work of the reassessment. Overtime for external assessors was $1,220,000; the associated employee benefits that go with that were another $98,000. Travel for external assessors amounted to $1,309,000; systems and data processing, $92,000; and supplies, $4,000. That adds up to $3,030,000, which is the total amount involved for external purposes.
I do not want to lead you to the wrong conclusion that that was the total cost of the Metro reassessment. It was not. There were the regular salaries of the people who were involved in both the external and internal processes in Metro. As far as the Metro people were concerned, apart from possible overtime, they carried on their regular duties.
A lot of those regular duties included reinspections that came in the some 5,800 appeals. There was no particular extra expense involved in that. The reinspections were made as part of the process.
The cases were prepared for court and brought in front of the assessment review court without retaining or using legal counsel. Each of the appeals was handled by the assessor himself, so there was no outside legal cost whatsoever.
I cannot tell you that if people did not make changes this year, we will not change their assessment next year. That was one of the criticisms brought against us by Tax Reform Action for the People. They were saying, "Why did we get caught and our neighbour did not?" Maybe we found out about them this year when we didn't last year. I think it is only fair and equitable that we treat those people in the same way as we supposedly mistreated some people last year.
If changes are warranted to bring one further step of equity into the marketplace, that is exactly what we will be doing.
10:20 p.m.
Mr. Renwick: I want to be as succinct as I can. On November 4, I raised some questions with respect to making available to people appearing in the assessment review court certain information which had been withheld on November 3 with respect to the reassessments in ward 8 in the riding of Riverdale.
I want to make four points. I could only ask you one question during the course of question period on November 4. What happened to my constituent was that the ratio between the assessment and fair market value, which was the figure used, was at first said to be based on a data set of 200 and the information with respect to that was not disclosed when the hearing was taking place in the court.
A little while later, another of your representatives in the court indicated it was not 200 and the ratio was not 4.9 per cent; the data set was 193 and the ratio which came out was 4.8 per cent. That was one point. Those were based on the 1981 assessments and the 1981 figures with respect to value.
Other constituents in the same general area, indeed on the same street, were faced with a data set operation related to 1980 and the ratio in those cases was 6.9 per cent.
If the information I have is correct, your officers in the court did not know whether these were averages or medians in coming to the conclusion about the percentages which were to be used. My constituent was also unable to obtain that information.
Latterly, by going to the office --
The Acting Chairman: Order, please. The time has expired.
The time for the estimates of the Ministry of Revenue having expired, pursuant to standing order 46(d), I am required to put all questions necessary to carry every vote and item of the estimates. The only vote outstanding is vote 804.
Vote 804 agreed to.
On motion by Hon. Mr. Ashe, the committee of supply reported certain resolutions.
The House adjourned at 10:24 p.m.