ASSESSMENT AMENDMENT ACT (CONTINUED)
The House resumed at 8 p.m.
ASSESSMENT AMENDMENT ACT (CONTINUED)
Resuming the adjourned debate on the motion for second reading of Bill 90, An Act to amend the Assessment Act.
Mr. Breaugh: Mr. Speaker, on a point of order: I could be mistaken, but I am not sure I see 20 members in the chamber.
Mr. Speaker ordered the bells to be rung.
8:06 p.m.
Mr. Breaugh: Mr. Speaker, how many Liberals can you count in here this evening?
The Acting Speaker (Mr. Cousens): That is no point at all. We are continuing with the debate.
Mr. Charlton: Mr. Speaker, in my remarks I will try to pick up where I left off the other evening, but perhaps I will have to pick up a few of those comments to refresh my own memory and the memory of other members as well.
When I left off I was saying the comments two or three of the Liberal members have made and several of my colleagues have made about the programs in the assessment division of the Ministry of Revenue clearly set out the problems we feel in terms of our constituents and the taxes they pay in the context of what we see lacking in this piece of legislation.
We have a situation in Ontario where for 15 years now this government and the Robarts government before it have been talking about province-wide, universal, uniform, property tax reform. After being 15 years into that program, 15 years into that reform process, we are very little ahead of where we were 15 years ago.
Mr. Haggerty: Don't embarrass them.
Mr. Charlton: Although I do not always agree with my colleague the member for Erie (Mr. Haggerty), I think even he will agree we have not progressed very much over the last 15 years.
In this bill before us we have a clear reflection of what I am talking about. We have in this bill the ninth postponement of what this government told us 10, 12 or 15 years ago was the answer to the property tax problems and inequities in this province. We have the ninth postponement of that market value program in this bill because of this government.
There are a few things I would like to make clear at the outset. My comments tonight are not, I repeat, a reflection on the staff in the assessment division of the Ministry of Revenue, formerly of the Department of Municipal Affairs. It is not a reflection on the staff because the staff of the assessment division are very capable people. It is a reflection on the political will and the political inadequacy of this government.
As I said in my opening comments on Tuesday evening, I do not want the new minister, the member for Mississauga East (Mr. Gregory), to take these comments too personally. We are prepared in his case to give him some opportunity to show his stuff; but we are certainly not happy with his immediate predecessor in terms of progress.
As I said on Tuesday evening, his predecessor twice removed was a minister who, although he did not reach the goals we would like to have seen, was at least flexible, understanding and willing to listen and to work out solutions to problems that we brought to his attention. That was the former member for Parry Sound, the Honourable Lorne Maeck. The immediate predecessor to the minister, the member for Durham West (Mr. Ashe), was not very useful or very co-operative at all.
We are in a situation where for 15 years we have been looking for the promised package of property tax and municipal finance reforms in this province, and we have nothing. The assessment division, as a result of political instructions from the minister, the Treasurer and, generally speaking, the cabinet, has moved from a position taken in 1970 of total and absolute responsibility for property taxation in this province to the position created in 1978 or 1979 when it went to this voluntary section 86 program, which is now the section 63 program, this voluntary, on the part of the municipalities, program of equalization.
It is a program which provides under section 63 of the Assessment Act for equalization of assessments within a class of properties at some percentage of market value. I will admit, at the outset, that this equalization program under section 63 does provide for some small additional measure of equity within classes. It does solve some of the problems we had in property taxation, but, just to put it into some kind of perspective, the sum would reflect perhaps 25 per cent of the problems we had in property taxation in this province. The other 75 per cent of the problems are still outstanding.
This bill provides us with a reflection of that because it is, again, the bill that avoids dealing with the 75 per cent of the problems we have avoided dealing with. Not only does the section 63 equalization program avoid dealing with 75 per cent of the problems -- the inadequacies and inequities among the commercial and industrial sector, the apartment or multi-residential sector and the single-family residential sector -- but it also avoids grappling with a number of new problems which the section 63 program creates.
I am not referring to the capabilities or the adequacy of the staff in the assessment division but to the policy which emanates from the cabinet and the government itself. This program has created a number of new problems that were totally unnecessary. I would like to talk about a few of those programs because they are some of the reasons we find ourselves in the position of having to oppose this bill this evening.
I refer to the situation we had in Hamilton in 1969 when, under the old numbering of the act, the program was the section 86 equalization program. We had a situation where a number of categories or classes of property were created, and each of those classes was analysed separately for the purposes of developing a factor which would create the percentage at which the properties in that class were assessed as compared to the ratio of market value.
In the analysis that was done, it was discovered -- and I guess it was a fact that was already known to a few -- that there were fairly large and substantial discrepancies between some classes of property. For example -- and I mentioned this peripherally a moment ago -- between the multi-residential sector and the single-family residential sector there was a very substantial discrepancy.
The single-family residential properties in Hamilton were assessed under the old system at approximately 10.8 per cent of 1975 market value, whereas the multi-residential apartment properties in Hamilton were assessed at approximately 18 per cent of market value. If the assessors in the Hamilton-Wentworth region had combined those two categories into one residential class, there would have been a major reduction or shift of taxation from apartments.
There would have been a substantial reduction for apartment dwellers and owners in Hamilton and a substantial increase for single-family home owners.
What we had here were two major sectors. There were tens of thousands of people living in apartments and several hundred thousand people living in single-family residences, but both categories made up a substantial and important political force in the community.
What we saw happen was an equalization program that separated single-family residential from multi-residential. Why did that separation happen? Why were those two different categories created under section 63, this section we are being asked to perpetuate this evening? If one looks at it on the surface, it could be said in all sincerity that those two were separated in order to avoid massive shifts of taxation and to protect individuals from undue and overbearing tax increases.
If everything had been done right through the system on that basis, that explanation could be believable. But we have ultimately to come to the conclusion that that was done, not because of the desire to protect individual taxpayers from massive tax increases, but because of the number of votes involved. We have ultimately to come to that conclusion because of what happened in other sectors.
We also found another major area of discrepancy in the Hamilton situation. We had single-family residential on small lots, 50 feet by 100 feet or smaller. They were fully serviced lots in the city proper. We also had single-family residential, rural or semirural, in the city of Hamilton, lots of an acre, two acres, three acres and three and a half acres, in most cases without services. In most cases, these were lots that were bought 30 or 35 years ago and the houses were built 25 or 30 years ago. Those suburban, semi-rural lots -- the larger acreage lots with no services -- were bought 25, 30 or 35 years ago for no more, in fact for less, than a much smaller city lot with a comparable house on it.
The home owners in those suburban or semi-rural lots were average people with average incomes and in some cases even below-average incomes. They moved outside the city for a number of reasons. Some of them moved to get away from congestion and to avoid the costs in the city which they could not afford because 30 years ago some of those properties were less valuable than comparable houses in the city.
8:20 p.m.
What has happened is there has been a shift in the past 30 years because of rather significant growth in our cities. We have seen it here in the Toronto and Hamilton areas. They have seen it in the Windsor, London and Sudbury areas. There has been substantial growth which crowded and pushed more and more people out of the city, as well as the city itself expanding its basic urban boundary. Those larger semi-rural suburban lots, the lots of 1.5, two and three acres, now are becoming prime development land. Even if they have a small bungalow on them, they are becoming prime development land.
In the marketplace, this so-called market value system of property tax assessment that we get ourselves caught up in, these home owners found themselves in the position where a property with a house that is comparable to a $60,000 house in the city is now worth $150,000 on the marketplace because of the land they have.
Let us remember that none of these home owners has this $150,000 in hand. They have never sold their property. They are now 30 years older than they were when they bought the property. They are 55 years old, with 10 years to go until their retirement. They probably have 20 years to go until they really want to sell that property. They want to stay there, to live, garden and retire there and to have the first few years of their retirement while they are still physically able to do so in the comfort of their own home, with their own backyard which they have worked for the past 30 years to make beautiful and the house they have worked to maintain. They want to stay there.
All of a sudden, as a result of this approach to market value, their taxes jump. We have heard about tax jumps in this House before. We have debated retail sales tax jumps of 10 and 12 per cent and Ontario health insurance plan premium increases of 17.5 and 37.5 per cent. We have been outraged in this Legislature about the amount of the increases. I recall in 1979 or 1980, when this government proposed a 37.5 per cent increase in OHIP premiums, the outrage in this House and right across this province was so great that the government and the then Treasurer were forced to back down to the extent of reducing that increase from 37.5 per cent to 17.5 per cent, by a full two thirds of what the increase could have been.
In the case of these lots I am talking about, as a result of this so-called equalization, this fairer system, for some of these semi-rural or suburban lots the increase in taxation was 500 per cent and 1,000 per cent, and in a few cases it was 2,000 per cent. In very few cases it was even as high as 5,000 per cent. Those are the highest figures I heard of. It is possible there were some even higher, but those are the highest figures I heard of.
Let us forget the 5,000 per cent figure, because they were very few in number. The majority of those suburban, semi-rural lots got increases in the range of 100 to 1,000 per cent. A 100 percent increase in property taxes is unbearable, a 1,000 per cent increase is catastrophic and a 5,000 per cent increase is like the earth exploding.
The problem in that situation was that the government was not prepared to respond to those circumstances. This brings us back to the question of numbers. They were not prepared to respond because only about six per cent of the properties in Hamilton fell into that kind of category when they did the equalization. So what if six per cent of the electorate is upset and alienated? Six per cent of the electorate never elected a government and never defeated a government either.
We had, on the one hand, the massive shifts that would occur between multi-residential and single-family residential. Those shifts were avoided. Those two categories got taken care of because there were enough people -- enough votes to have an impact on the government's political mind. But the six per cent stuck in that little minority category of single-family residences had no consideration at all.
The government could have as easily created a separate category for those suburban, semirural lots as they did when they created a separate category for multi-residential. In fact, not only could they have created a separate category, they could also have created a separate category based on exactly the same evidence, exactly the same criteria and exactly the same rationalization as they used to create the multi-residential sector, but they did not do that.
The only conclusion that we over here can come to, and I think my Liberal colleagues largely agree with me, is that it got done in the one case and not in the other because of numbers. One group was a very small minority group and did not really matter, but the other group was a major group to be contended with. There were thousands of people living in apartments and there were thousands of people living in single-family residences in full-fledged urban developments. Both of those categories of people had to be dealt with, and dealt with fairly, because of their numbers. That is the only conclusion we can come to, because they did not apply the same rationalizations and the same arguments for both groups. They neglected one group and provided for the other group.
Yes, the equalization program can provide some measure of limited benefits to property taxpayers in this province. In terms of fairness, equity and what we loosely refer to as equalization, the benefit it can provide is that if we take two very similar homes on two very similar-sized lots in the same municipality, it will likely ensure that ultimately the taxes those two properties pay will be very close or equal. Sometimes there are mistakes and that does not happen, but assessors are human and they sometimes make mistakes. There are sometimes mistakes and there are appeals, and people sometimes win appeals, but those are the only real inequities that are corrected by this section 63 equalization program.
8:30 p.m.
The section 63 equalization program avoids -- not only avoids but wilfully avoids -- the inequities between sectors and between classes. That same equalization process also wilfully avoids minority categories, categories that do not really matter because there are not enough properties in that category to really count for too many votes.
That brings me the next major objection we have to this bill. It is the section that says assessment notices, notices which for all of history, to the best of my knowledge, in this province have gone out to every property owner and every tenant every year to inform them of the assessed value on their property, their unit, or whatever the case happens to be, along with a description of the property or the unit and the occupants, will no longer go to every property owner and every tenant in this province but will only go, every year, to those who have properties, or parts of properties, on which there has been a change.
I do not think any of us on this side of the House would have any serious objections to that amendment, because it is a way in which the ministry is trying to save some $3 million a year. We would have no objection to that if the notices were not the vehicle by which people are notified of their assessment and about the appeal process.
The assessment notice has been the apparatus by which every home owner in this province is informed in December or sometimes later, if the ministry has a reason for being late and applies under the regulations to be late with the mailing of the notice -- what the assessment on his property is, the assessment on which he will be taxed. It tells them what time frame they have in which to appeal that assessment if they do not agree with it, how to go about it and where to send that appeal.
If those notices were not the apparatus by which that process occurs, I do not think any of us would have any objections to the assessment division saving $3 million; but we have all been here over the past five years, and we have seen the number of appeals that have been going on as the equalization process goes on and as other approaches to assessment go on.
Sometimes it has been the equalization process that has generated a lot of appeals. Sometimes it has been a situation like we had here in Toronto in the fall of 1981, last fall and again this year in the city of Toronto, where they are not doing an equalization but they are doing major updates of additions and renovations to homes. These additions and renovations are not going on in what the assessment division refers to as supplementary assessment, but they are going on in updates of the regular rolls.
It is clear that anybody who gets updated is going to get a notice, that is fine. If they want to appeal, they can appeal. This would be the response of the minister and the assessors. However, I ask the members to think back to the last time a constituent came in to talk about an assessment problem or a problem with property taxation. How does a constituent know or decide that his assessment is perhaps wrong? He gets that feeling in two ways.
One may react to what he considers to be an unfairly high level of taxation. Another may say to himself: "Well, I know that property taxes are high. I have read about it in the paper. This is the first time I have been a home owner. I know property taxes are going to be high, but should they be this high?"
He goes next door to his neighbour, his friend down the street or his uncle two blocks over and says: "Well, George, what's the assessment on your house? My house is fairly comparable to yours; my lot is fairly comparable to yours; we are only two blocks apart. What is the assessment on your house, George? I think mine is too high."
George tells him what his assessment is. If his assessment is close, then the problem likely goes away. If his assessment is higher, the person probably shuts up, goes home and does not say too much very quickly. If George's assessment is much lower, then the person starts asking questions and likely ends up appealing the assessment, because he has looked at comparable houses on comparable lots, in the same basic market area of his community.
The problem under this amendment is that George does not get an assessment notice because he did not make any changes in his house this year. He already has his recreation room; it has been there for five years. If the person put his recreation room in this year, there was a change and he would get an assessment notice. It was the addition of the recreation room, in fact, that made his house totally comparable to George's. However, he does not have a figure to compare with any more, because George cannot remember what his assessment was last year or the year before. He did not get a notice this year because there was no change.
The assessors or the minister will tell us the person can go down to city hall and get the assessment on George's house. This is true, very true. How many constituents know that? I would suggest that in my riding, and I think it is probably true in others as well, 10 per cent or less know they can go to city hall and freely get an assessment on anybody's property.
When people think about assessment they think about the assessment office; they do not think about city hall. They know the tax bill comes from city hall. However, when it comes to assessment, they think about the assessment office. If they go to the assessment office they will not get the assessment on George's house; they are not George. George can go to the assessment office and get the assessment on his house, but I cannot, nor can anyone else. We can get it at city hall. Anybody can look at the assessment rolls at city hall. However, most of my constituents, and I expect other members' constituents, do not know that.
This is one of the problems created by this change in the notice procedure. It creates a number of other problems as well.
8:40 p.m.
Over the last number of years, and I referred to it earlier, we have seen, at least in some municipalities, substantial increases in the number of assessment appeals. Those greater numbers of appeals have resulted from a number of things. In some cases they have resulted because there has been a section 63 equalization done. In other cases those increased numbers of appeals have resulted because somebody has latched on to a thing, whether it is a landlords' association, a small business association or a home owners' association.
We had one of those in Hamilton. The minister probably had one in his area at some time or another. We had a group in Hamilton after the reassessment at percentage of market value in 1979, a tax reform group that formed where one had hundreds of citizens all involved in the same group, all appealing their assessments and all getting involved in trying to fight the level of assessment they had been stuck with.
There could be any number of reasons why those things happen, but what one finds is that because of the substantially larger number of appeals we have seen over the last few years the Assessment Review Board and the appeal stages above the Assessment Review Board are clogged. There is little progress. There are backlogs that stretch back as far as three and four years.
One gets a situation where there is an equalization program in 1979. The home owner appeals his assessment in January 1980. The appeal is heard in May 1980. The home owner wins the appeal and wins a reduction. The assessment office does not agree with the reduction, so they appeal it up to the next level. Vice versa, the assessment office wins at the first stage and the home owner does not agree with the decision so he or she appeals it up to the next level. But at the second level -- whether it be the old county court or the present second step, which is the Ontario Municipal Board, the old third step, does not matter -- those backlogs of appeals on appeals are stacked up to the eyeballs of everybody in the assessment division and everybody in the assessment review courts division of the Ministry of the Attorney General.
What one finds is that when somebody appealed in 1980 and won or lost but it has been appealed up to the second step, by the assessment officer or by the appellant depending on who won or lost at the first step, those are still stacked up. They have not been heard yet. The next assessment notice comes out. One does not have a resolution yet of last year's appeal, so one wants to appeal again to he consistent. One wants to appeal this year because one is still fighting last year's.
But because of these amendments there will be no notice this year. There are no changes, so there is no notice. How does one figure out when one is supposed to appeal? How does one know whether the registrar's office is still in the same place it was last year? One can look in the phone book, assuming one remembers at the right time of year. How many of one's constituents will honestly remember whether it was January, February or March when they appealed last year?
They will remember it was winter. For most of us in this province, winter starts some time around December I and, depending on which part of the province we live in, it may extend until the end of February, the end of March, or in some cases even the end of May. How many of the minister's constituents are going to remember which month and which week they appealed in last year? Not very many.
The minister tells us: "We are going to do some advertising. We are going to put it on the radio. We are going to put it on television. We are going to put it in the newspapers." I think that is appropriate, but as the only method I think it is a joke.
I have been in and around this House long enough now to know something about reality as over and against naiveté. As the Environment critic of this party and this caucus for the last two years I have taken on environment issues in this House that have had front-page headlines in every major newspaper in this province, then I have gone out to public meetings after three weeks of press on the issue and found people who did not know what I was talking about.
So the minister and his staff should not be allowed to try to tell us that the one press release they do and the two or three or five days or even two weeks of ads they run somewhere in the major dailies of this province, not even necessarily in the front section but somewhere, are going to allow the people of this province to know and understand what the process is, because that is stupid, that is naïve and that is blind. It will not happen. All of us have been around long enough to know better than that.
We are in a situation where they are going to eliminate the notices every year except for those properties where there has been a change, but they want us to believe that people will know when to appeal because of some advertising campaign they are going to put on.
These are not comments I am making to the people from the assessment division but perhaps comments I am making to the minister and to his deputy. When they set up the new programs for seniors in this province, the property tax grants, we have constituency offices in our ridings and we had thousands of seniors phoning us and asking: "What is this new program about? I heard a bit about it, but I did not catch it and I did not see any ad in the newspaper that I could read." The ads were there, but they did not see them. They caught the tail end of something on TV, but not enough of it to be sure what was happening.
We had the same seniors coming back to us when the government ran ads explaining why their cheques were late, why there were foul-ups. There were dozens of ads run by the ministry. This minister was not there then, but look back at the advertising campaign that was put on around that seniors program, and we still had seniors coming into our offices asking us questions because they had not seen the ads. The same thing will happen with this so-called advertising campaign he is going to put on about the appeal process for assessment.
When people get their assessment notices in the mail and they open them and ignore them, that is at their own peril. At least they got the notices and if they ignore them, so be it. But they got those notices with the instructions on the back about how to appeal, and if they really had a burning in their gut to appeal because they really believed their assessment was too high they did so. But when the minister starts playing the ad game, the people who happen to be on vacation when the ads are run will not see them.
We have had situations in the past where this ministry and the regional registrar under the Ministry of the Attorney General have been flexible, where appeals have been allowed to be accepted because somebody was out of the country when they sent his notice. We have had all kinds of exceptions made in the past, but what this amendment is saying to us and to a lot of ratepayers across the province is: "No more flexibility. We are trying to save money: no more flexibility."
8:50 p.m.
That brings me to another area which causes me some problems with the approach that is being taken by the minister, and I assume he is going to tell us in his response by the Treasurer (Mr. Grossman) as well, because I can recall very clearly over the five years I was the Revenue critic for this caucus, Ministers of Revenue repeatedly telling me: "Yes, I administer this act, but do not blame me, it is not my responsibility in terms of policy development. The Treasurer develops the policy, I just administer it." I would assume the new minister would have to tell us some of those things in his response. I understand that and I accept that.
But I expect as well that the minister who administers the program and sees problems with it, even if he does not have the power -- in some cases he is going to have the power to make changes and in some cases he may have to consult with the Treasurer but I expect that even if he does not have the power in a particular situation where we are raising concerns, where we are raising problems, that those problems will at least get relayed to that gentleman in the front row, the Treasurer, who makes the policy decision in that area.
It is not good enough just to tell us here in this House: "I understand what you are saying, but I did not make that decision. It is not my responsibility, it is the Treasury policy that decides that direction."
He is supposed to be the prime expert in revenue assessment. He is supposed to be the guy who is getting all the feedback from his staff in the assessment division and it should be his responsibility to pass the complaints and problems along to the Treasurer, because unfortunately he is never here when we debate any of these revenue bills which we keep getting told are his responsibility. He is the one who sets the policy but he is never here when we debate these bills and none of the points we make ever gets directly put to the Treasurer.
One of the biggest areas of problems I have found relates directly to this bill and to what I see as the total abrogation of the minister's responsibility and the total lack of direction and progress in terms of the problems which this government defined in 1967, 1968, 1969, 1970, 1971, 1972, 1973 and 1974. They quit defining the problems after 1974 and started the progress of postponing, year after year, the solutions, or at least some of the solutions.
We have an appeal process and it does not matter whether we relate it to section 63 which we have here before us, whether we relate it to the old system which some municipalities are still stuck with, or whether we relate it to the full market value which a very few municipalities in this province have. The appeal process is fraught, riddled, with problems. Although some of the problems are technical because of the different methods of assessments that are used in various municipalities, most of those problems are related to the performance of the ministry.
Again, I say at the outset, the problems are not the minister's staff. I worked with the assessors in his ministry long enough to know what they are capable of and what their qualifications are. I worked with them long enough to know they are all basically sincere, honest, hard working and prepared to do the things that the minister and his ministry are not prepared to allow them to do.
One of the things we find happening, for example, in the assessment appeal process which I as a former assessor cannot live with and which a lot of his assessors cannot live with -- a lot of them have left because of these kinds of things -- is the direction they get about how they should handle their appeals. These are directions which come ultimately from the top, perhaps not from the minister's lips alone.
I understand he is new and probably has not sent very many of these directions out, but it is one of the basic and primary problems we have had in assessment appeals. I have talked to the assistant deputy minister, Mr. Lettner, about it and he is sympathetic to what I have expressed. He understands what I am saying.
Because of the political paranoia on the part of the government -- it cannot be put down to anything other than political paranoia -- one of the problems we have had is that assessors are being instructed to go into the courts and defend assessments regardless of whether they are right or wrong. If an appellant has a problem which is individual, on a single property, the assessor will correct that problem and make a recommendation to the court. The appellant will not even have to go to the hearing and that problem will get resolved. No problem, as long as it is a single property.
The minute somebody finds a problem with the market value analysis on a neighbourhood, a major commercial street or a downtown commercial area, one has a problem because the assessor comes back and says: "Well, boss, commissioner, manager," or whatever it happens to be, "we have a problem because I found some errors and I do not know what to do. Should I make a recommendation for a reduction or should I try to defend these assessments?" That is not what it is supposed to be like.
Mr. Nixon: That is not what you did in Old Beverly.
Mr. Charlton: That is not what I did in Old Beverly; the member is right. I never let any of those managers con me. That is why they once tried to fire me.
The reality of what we find happening is that as soon as one gets a big problem -- not a single property; they will fix the single property because that does not cause any problems for the municipality's so-called tax base. If I have one property that is wrong, the assessor is allowed to make his own determination about what he is going to do. He finds an error. He makes a recommendation. He goes into court. The appellant does not even have to go. The assessment is corrected. But as soon as one has a big problem -- it is still an error; it should still be corrected; the minister's predecessor, the member for Durham West, stood up in his place in that seat two years ago and told me that if there are errors and they knew the are errors, they would be corrected. I went back on the very appeals that I talked to him about in this House and there were no corrections. They fought us right down the line.
They fought us for a number of reasons. One was the directions coming out of the ministry head office. I do not know whether it came out of the minister's mouth, the deputy's mouth or the assistant's mouth; I do not know who made the first comment and I do not care. Ultimately, the responsibility is the responsibility of the minister. I will not try to get into where the blame lies.
9 p.m.
What happens in those cases is that they fight one whether they are right or whether they are wrong. The kind of situation one gets into as a result of that is not only fairly massive expenditures on the part of his ministry and on the part of the Attorney General's ministry, because he provides the staffing for the assessment review courts, but also fairly substantial expenditures on the part of constituents, home owners and ratepayers who are trying to appeal businesses, apartment owners, industries, whatever it happens to be.
We are getting into massive wasted dollars no matter how one looks at it because people are being forced into cases that drag out. They are fought, they are adjourned twice and three times, and they are appealed up when they are resolved at the first level because the process that is happening is not honest and up front.
I want to give the minister a few examples so perhaps he can understand what I am trying to say.
Interjection.
Mr. Charlton: Well, he will start to understand it when the roof caves in on his head.
We got into some appeals in Hamilton-Wentworth a couple of years back.
Hon. Mr. Gregory: Speak slowly.
Mr. Charlton: Speak more slowly?
Mr. Breaugh: More slowly. The minister is having trouble following.
Mr. Charlton: Okay. I will slow down a little here so he can understand.
We had a number of situations in Hamilton-Wentworth right after the section 63 program, the old section 86 program, in 1979. We had a number of areas that received rather substantial increases. The minister's staff are aware of this because I have been to talk to them about it already on a number of occasions, but I will give him a few examples so he can perhaps start to understand what I am talking about.
One of the appeals I personally had was on Upper James Street in Hamilton. It was a situation where in 1975, which was the base year for this section 86 update, they had seven sales on Upper James Street in the section between Mohawk Road and Hester.
Mr. Boudria: Hardly a base.
Mr. Charlton: Hardly a base. There were seven sales, five of which were fairly legit, up front and fitted in with everything else in the community. There were two sales that were 70 per cent above the other five, two sales from some screwball developer who really thought there was a market on Upper James Street for office towers.
There is no market on Upper James Street for office towers; there was not then and there is not now, but this developer went in and paid astronomical dollars for these two side-by-side properties so he could do an amalgamation and build an office tower for which he thought there was a market. This is what we have all referred to in debates in this House in the past as a speculator, somebody who had a vision, saw a dream and his dream evaporated in indigestion.
Mr. Boudria: Like John White.
Mr. Charlton: Yes, like John White, like Darcy, like a number of the others we have had around here.
He went out and paid astronomical dollars for those two pieces of property, dollars that were 70 per cent above the dollars that were being paid for any of the other properties on Upper James Street. He went ahead and built his office building with commercial on the first floor.
He bought the properties in 1975, so unfortunately they fell into the analysis of this 1975 market base. The building was built and finished in 1977 or 1978 -- I cannot recall which year now but it does not matter. That building is still sitting two thirds empty five or six years after its completion.
I want to tell the House about some of the tenants they did get in the one third they managed to fill. One of the prime anchor tenants they got in that building -- the sign is still up; it still smiles sweetly as one drives up Upper James Street -- was Greymac Trust. Members will recall Greymac Trust from the debates we had last winter and fall. As I said, the counters are still in the Greymac Trust area. The sign is still up there smiling beautifully every time one passes the building. It is empty as well. They do not even have a third of that building filled right now because the main anchor tenant is long gone.
They have two thirds which have never been occupied and a third of the third that was occupied is now sitting empty again. There is no market on Upper James Street for office buildings, but office buildings happen to be the highest commercial rate that one could apply on that street for market value assessment purposes. Those two sales were used in the analysis on Upper James Street.
There have been multitudes of properties appealed under the appeal process and we have won some reductions through hard negotiations with the assessors. In some cases we could not negotiate settlements and we had to fight it in the courts, either at the assessment review board level or at some appeal levels above that. In some cases it was the old county court and some were going to the Ontario Municipal Board.
We have won some reductions, but I want the minister to understand that in none of those appeals have we won what those properties should really be assessed at. That is a comment from somebody who used to assess those properties for the ministry. In no case do we now have appropriate values on those properties. Because of those two stupid sales out of seven -- because there were not enough sales in one year really to do a thorough analysis on them -- by an uninformed speculator and developer, we have sawed off in the courts. The chairmen at every level have listened to the arguments from both sides and have sawed off in the middle. We now have values that were lower than they put on in 1979 but which are still considerably higher than reality. We cannot get any further because of the saw-off, the compromise, the negotiation mentality.
The decisions are not based on fact. The assistant deputy minister for the assessment division will tell the minister about another case I went to him about. The same situation happened in Satellite City, just outside the city of Hamilton in Stoney Creek, with section 86 equalization. In 1980, when Stoney Creek went to the equalized value, they were being based on 1975 market values. I want the minister to listen to this because this is a case where the government, of which he is a part of the executive council, not only caused the problem but refused the solution.
9:10
In 1975 the then Minister of Housing was very intensely involved in developments in a place they called Satellite City on Stoney Creek mountain. They were involved through the Ontario Housing Corp., the Ontario Mortgage Corp. and the Ontario Land Corp. They had all kinds of property on the Stoney Creek mountain. They basically led the development of Satellite City. In 1975 the Minister of Housing predicted that by 1985, in 10 short years, there would be 100,000 people in Satellite City, in a place where nothing existed at the time but a few farms.
The Minister of Housing blew it. I want the members to know that although those very ambitious plans for 100,000 residents in Satellite City were carried fairly far down the road in terms of subdividing plans and the rest of that development process, we are now in a situation where in 1983, two years away from his target of 100,000 residents, we have about 5,000 or 6,000 residents in Satellite City, not 100,000.
We will be lucky to reach 20,000 residents in Satellite City by 2020, 37 years from now. The Minister of Housing predicted 100,000 residents by 1985. I want the Minister of Revenue (Mr. Gregory) to understand the problems created by the prediction that 100,000 people would be living in Satellite City by 1985.
Speculators descended on that place like a flock of locusts and ate every blade of grass. They bought up every available property in sight. Some of the property they bought up was developed, but not much. Some of those speculators went broke, bless their lovely hearts.
Mr. Boudria: That is not nice.
Mr. Charlton: Maybe they did not go broke, but they certainly did not make their pot of gold at the end of the rainbow.
There is really one particularly unfortunate circumstance in that whole scenario. Most of the speculators who went in bought up exceptionally large parcels of land and paid very low acreage values for them. In particular, they were buying up farms. Perhaps they made a little or lost a little, but they got out with skin still on their teeth.
One category of speculator was particularly adversely affected by the prediction of the Minister of Housing. This was the small speculator -- lawyers, real estate agents, small guys with an extra $50,000 in their pocket they did not know what to do with that year. They went in and bought up some property just around the periphery of the initial development. That initial development of three surveys is all we have now. Those small speculators went in and bought up these small three-acre, single-family residences. As a matter of fact, they were VLA lots, bought basically by veterans of the Second World War under the Veterans Land Act. A few of them were even First World War veterans. They were lots and properties developed for veterans at a very low price.
These small-time speculators bought them up at roughly $100,000 on the expectation of the phase two area of development; but phase one is all that has ever been developed. There were five phases to this so-called 100,000-people city. In fact, all of phase one has never been finished, but a good portion of it has. These small VLA lots were in phase two and phase three areas of the development, areas that have never been developed; but speculators went in and paid $100,000 for these properties.
The assessors went out to update the 1975 market values in an equalization program and they found these speculator sales, where speculators went in and bought these two- and three-acre VLA lots. They dumped these sales into their analysis, which was a legitimate thing for them to do at the time, because at that stage nobody knew the bottom was going to fall out. Everybody was still living with the expectation that there were going to be 100,000 people in Satellite City by 1985.
What has happened is there are properties assessed at a level of maybe $45,000 or $50,000 whose assessments have doubled. That means the taxes doubled too. The speculators who bought some of these properties got caught when their taxes doubled. Unfortunately, the taxes doubled for the veterans who did not sell out to speculators but stayed in their own homes. Their properties did not get sold, but because the speculators bought some down the road, they got caught in the squeeze of the market value analysis. Their assessments and taxes doubled too.
In the initial stages there was not too much we could do about it because we could not prove much of anything until we saw the development start to fall apart. Finally, in 1980, the people in those lots started to say: "This is all crazy. Not only have I never sold my lot for $100,000, but the market has fallen out of the whole place. There is not going to be any major development in Satellite City. I could not sell my place for $100,0000 under any circumstances."
That was the reality in 1980, but in 1975 it was not the reality. When they did the analysis, there was not too much they could do to fight those appeals. The reality of what had created that so-called $100,000 value had vanished. It was long gone. The speculators knew they had lost their shirts. They were never going to get their $100,000 back out of that property. We knew it, the home owners knew it and the assessors knew it as well. The people who worked in the minister's offices knew it. What instructions did they get? "If it is a single property and you find an error like that, give the reduction. Let it go." But what happens when there are 40 properties in the category? They cannot let 40 properties go. That starts affecting the tax base of the municipality.
They have even gone so far in that ministry as to set up a system where, if one loses big appeals like that which affect the whole stretch of properties, they send somebody down from the head office in Toronto to find out why the hell they lost so many appeals. The pressure is on the local commissioner and on the manager who looks after the area in question. By the time one gets three steps down, the pressure is right on the shoulders of the assessor, the guy who looks after the area, to go into court and defend those assessments, whether they are right or wrong.
We go to appeal on them. Again, we win a saw-off. The assessor gives his evidence to the chairman. He says they are worth $100,000. We go in and we give fairly well-documented evidence to the chairman that says they are only worth $65,000. Mr. Speaker, I want you to guess what the chairman decided in those cases. We said $65,000, the assessor said $100,000 and the chairman sawed off at $40,000.
9:20 p.m.
We end up with the taxpayers getting a reduction; they got an assessment of $80,000. What is it related to? Is it related to the market value that the assessor said was right, $100,000? Or is it related to the most recent sales we could come up with at $65,000? It is not related to either. He sawed off in the middle some imaginary figure that sounded fair but is not based on market value, which we are supposed to have. It is not based on anything except goodwill, and I do not believe that if one goes through the Assessment Act one will find assessed value based on goodwill anywhere in the act. That is the kind of thing we have going on in the courts, that is what is happening in the appeal process.
Do members know one of the arguments the assessors always use with you when you go to them with a problem that involves more than one property? As I said earlier, if it is one property and there is an error, they will fix it. But if you go to them with a problem that involves more than one property, do members know what the assessors always say to you? Do they know what the commissioner always says to you? Do they know what the assistant deputy minister says to you if you bring your problem to Toronto? "There is only so much we can do, because the bigger the problem gets, the more it affects the municipal tax base. If we don't watch it, sooner or later the municipal councils are going to be on our back."
That is true in some cases, I suppose. But we had a case in Hamilton this year where some commercial properties in Hamilton had been under appeal for the past three years. Unfortunately, they were all small businesses. These small business operators could not afford high-flying consultants, appraisers and lawyers of their own. They had been to appeals two years in a row and lost. They appealed their assessments again this year.
They had also gone to the city council to plead for help. The mayor came to me and said: "Brian, I know you used to be an assessor. Can you help us try to find a way to help these people in this village?" I said: "I do not know. I will try, Mr Mayor. I will go down and have a look at the properties. I will go down and talk to the owners. I will go up to the assessment office and talk to the assessors."
That is exactly what I did. In fact, after my first round of discussions with the assessors and the assessment commissioner, I even went so far as to drag the mayor down to the commissioner's office so he could explain to the commissioner that he was not worried about the effects on his tax base in the municipality. He believes these people deserve a reduction; he believes they are over-assessed and overtaxed. The mayor and the council want these people to get a reduction. These are small businesses and they are going to go under because they are overtaxed in a very difficult economic time.
After all of that, I did not get anywhere. They did not want to set the precedent of admitting the error on which the whole package of assessments was based. They forced me and two other consultants into a long, six-month battle, a battle, I might add, that cost a lot of money. It cost a lot of money for the assessors in the assessment division of the Ministry of Revenue; it cost a lot of money for the Attorney General's people because we had two postponements in those appeals; and it cost a lot of money for the appellants, who finally did win something -- not as much as I think they deserve, but they did win something. We could not even negotiate a halfway settlement, a compromise. We had to go to court and fight it right down the line, and it cost everybody a lot of money.
We have a Minister of Revenue here tonight asking us to pass a bill that will restrict the sending out of assessment notices so that assessment notices will only go out every year to those on whose properties there have been changes, because the government wants to save $3 million.
I want to tell you, Mr. Speaker, we are wasting 20 times that much in the way we run the inflexible system of government over there. The Ministry of Revenue and the Ministry of Attorney General in assessment matters alone are wasting five times that much every year by the inappropriate, stubborn way they operate to protect the reputation of assessment commissioners, or whoever it is we are trying to protect.
They are trying to save $3 million by refusing to send out assessment notices to everybody in this province so that ratepayers will know every year what their assessment is and they will know clearly the dates on which they are supposed to appeal. That $3 million they are trying to save they could save five times over without even looking at the rest of government over there.
They could save money just by being reasonable and flexible in the way they operate their assessment system, instead of making everything a fight from start to finish, where consumers, assessors and the Ministry of the Attorney General, which runs the review process, is forced to go through case after case, adjournment after adjournment; all of them, or most, unnecessary.
We are in a situation where we have been looking for reform in this province, and the government claims to have been looking for assessment reform and property tax reform in this province for well over a decade. The Liberal Party, the New Democratic Party and the governing party all basically claim to be looking for the same things, and yet we have made little or no progress towards that goal. We have accomplished very little in terms of new fairness and new equity in the property tax system.
It is not the fault of property tax assessors in this province. The fault lies with the minister; and again, not necessarily with the present minister. We will wait to see how he is prepared to perform in terms of pushing for policy change, pushing for real change and real reform. We will give him a year before we start to criticize him, but we have to criticize his predecessors. We also have to criticize the predecessors of the Treasurer, the so-called policy magicians who have done nothing but pull rabbits out of their hats by their hind legs and then let them get away.
We have a situation where the people of this province were waved the carrot for five years in the early 1970s about an overall package of uniform and fair property tax reform. The string is still there but the carrot has vanished. It has not only dried up but it probably would not be very tasty any more anyway.
Everybody seems to be telling us from the government side now that section 63 equalization is the way to go, the way of the future; but it is a cop-out. It is a cop-out because it only deals, as I said earlier, with 25 per cent of the problems out there in terms of property taxation itself. It also avoids in total all the problems of municipal finance and transfer payments between the province and the municipalities; all the areas that have to be combined into a package of reform, if we want to see some real sanity and fairness in this province.
Mr. Piché: It is very obvious the member has never been in municipal politics with the type of comments he is making.
Mr. McClellan: Look who's back.
Mr. Foulds: I gather he is going to speak tonight. Come on, René, speak up.
9:30 p.m.
Mr. Charlton: The member for Cochrane North (Mr. Piché) is making some comments tonight. On Tuesday night when I was speaking to this issue, he stood up and did the old "Mr. Charlton, you are a bleeding heart" routine. I say to the member for Cochrane North that he has constituents who are paying unfair property taxes as well. It is time he got off his behind and took this whole issue seriously because his constituents, as well as my constituents and all the rest of the constituents of every member of this House, are being shafted in one way or another, either because they are paying too much in property taxes or because the services they are getting are inadequate since the property tax system is totally unable to provide them with what the municipality really should be providing them with.
For all those reasons, I and my colleagues in the New Democratic Party caucus find ourselves in a position where we cannot support this bill because of a couple of the provisions in the bill and because this bill totally fails to deal with those things that have to be done in this province if we want to see real progress with fairness and equity in property taxes in Ontario.
The Acting Speaker (Mr. Cousens): The member for Prescott-Russell.
Mr. Breaugh: En français.
Mr. Boudria: Thank you, Mr. Speaker.
Mon collègue d'Oshawa m'incite à m'exprimer en français dans cette assemblée ce soir et, comme vous le savez, M. le Président, ça me fait toujours plaisir de le faire, surtout pour faire plaisir au député de Cochrane-Nord et au député d'Oshawa, et également à l'honorable ministre et député de Mississauga-Est. Je sais que ça lui fera plaisir de nous entendre discuter de sujets importants comme celui-ci à l'Assemblée législative ce soir.
Mais l'honorable député d'Ottawa-Est a parfaitement raison de dire que nous attendons tous avec impatience le discours du député de Cochrane-Nord qui nous parlera des problémes d'évaluation dans sa circonscription électorale. Et je vous avoue, M. le Président, que je céderais volontiers ma place à l'honorable député de Cochrane-Nord s'il nous promettait de faire un discours à ce sujet immédiatement.
Pardon, le député de Carleton.
I will speak slowly, because the member for Carleton (Mr. Mitchell) tells me if I speak slowly he will understand more. I want to address a few topics on this bill --
Interjections.
Mr. Boudria: We do have a rotation. It is unusual that the government members, who are all there to incite opposition members to speak out, did not seize the opportunity themselves. After all, they had it.
I would like to speak briefly on a few issues concerning assessments. The matter of assessment appeals is one I would like to raise. I had a personal experience with this last year. I purchased a home in November, and the assessment notice was never sent to me because I purchased my home in November. In late December, I inquired through others and found out the assessment notice had been sent to the previous owner, who lived elsewhere.
I asked the local assessment office to send me a notice so I could possibly formulate an appeal if I judged the amount was unfair. The local assessment office informed me it did not do that. Even if they acknowledge that one is the owner of the house, they will not send a notice of assessment because it sent one to the previous owner. They just assume the previous owner should be good enough to send the notice to the new buyer.
The principle of that just boggles my mind as to how the staff would decide this is the way to do things. Nevertheless, that is the procedure the ministry uses. I went to the municipality and found out what the assessment was. I never did get the notice from the previous owner.
Hon. Mr. Sterling: Your real estate agent should have taken care of that.
Mr. Boudria: The minister is speaking. He tells me the real estate agent should have taken care of all that. Obviously, the minister knows that I happen to know one particular real estate agent quite well and that is why he is raising the issue.
Mr. Roy: Is he talking about freedom of information again?
Mr. Boudria: He must be.
The assessment notice never did come. I went to the local town hall, found out what the assessment was and proceeded to formulate an appeal because I really felt I was being overcharged. The appeal was held in the first month or so of the new year. I do not recall whether it was in January or February, but I did go and present my case to the assessment review court.
It should be noted that the township of Cumberland, where I live, was reassessed under section 86 of the Assessment Act back in 1978 or so when I was on municipal council. I understand that is now called section 63. At that time, we were told by the assessment people who came in front of us -- I was sitting as deputy reeve of the township of Cumberland -- that from now on the assessment would be done according to market value. We would be equalized in classes, of course, because under section 86, now section 63, that was all we could do, but within those classes, assessment would be based on market value only.
Based on that information, which I knew only too well, having served on the council of Cumberland at the time we adopted that formula, I proceeded to make my appeal. My appeal was done for two reasons. First of all, my home is located in what they refer to as an estate area: that is, an area of relatively large homes on large country lots. None of those country lots existed in 1975, which is the base year for this section 86, market value assessment. They started those kinds of subdivisions in my municipality in 1978.
The question members are probably asking themselves right now is, how could they establish a base for something that was not there? They could not, obviously, so they gave totally arbitrary figures to arrive at a particular market value.
Mr. Breaugh: But isn't that unfair?
Mr. Boudria: The member for Oshawa asks, "Isn't that unfair?" Obviously it is. I looked at homes throughout the municipality within the same class, the class being residential, and determined that their market value was roughly 60 to 75 per cent of what homes had sold for over the previous two years. I looked at my own case and noticed I was assessed at some 145 per cent of what I bought my home for. In other words, if I could have sold my house for the ratio by which I had been assessed, I could have doubled the amount I paid for it. Needless to say, it is for sale to the minister right now if he wants to buy it at that kind of price. Obviously that is not the value of my home; it is totally erroneous.
I went to the assessment review court with this information and found the process rather intimidating, rather difficult. I presented what I had and made my case. I consider myself reasonably well informed in these matters -- although the minister may disagree -- certainly as well informed as most of my constituents, and I found the process rather difficult.
This is a relatively informal process by which individual ratepayers may go and appeal their assessment, and I found it a very difficult format in which to operate. I saw other ratepayers appeal their assessments there without having had the benefit of knowing how to go about appealing an assessment and not having any information from the minister. He should at least circulate a notice to them, informing them of facts they should bring with them to substantiate their case and things of that nature. Very few, if any, of those things were given to me or to anyone else appealing their assessments on that particular day.
In any case, after I had presented my case, I was cross-examined by the assessors as if I were accused in this particular case of having committed the formidable crime of appealing my assessment.
Mr. Foulds: Of owning a house.
Mr. Boudria: Yes. It was a criminal offence to own my own home, I suppose. I stood in front of this particular individual who cross-examined me, asking me such questions as, "Did you know your house was a good deal when you bought it?" Obviously, when anybody buys a home he buys a home of good value. It would be ridiculous to think that anybody would buy a home which is not a good deal. One obviously buys a home at a price that is affordable; otherwise, one would not be a home owner for very long.
9:40 p.m.
In any case, I lost the appeal, and I intend to appeal it again this year.
Mr. Breaugh: Right now?
Mr. Boudria: Yes. Possibly the member for Hamilton Mountain (Mr. Charlton), who I am told is an expert in those matters, could come and assist me.
The reason I am raising this with the minister is to illustrate how difficult it is for anyone to appeal his or her assessment even though we are served, in some cases, with assessment notices at present. Imagine a situation when we are not served with those notices, just how difficult it would be. The system is very cumbersome, very difficult and very intimidating for an individual right now. For the minister to make the situation any more difficult than it is is totally unacceptable to me and I hope he will reconsider the decision not to have the assessment notices delivered to each and every person the way they are at present.
A couple of other matters I would like to raise on assessment are the following, again relating to my days at the municipal level in Cumberland township. When the municipality went to the section 86 market value assessment, we were told this was not a mechanism by which the assessment is increased. It was merely a redistribution of the assessment within a given class. That is fine. However, what happens is there is always a certain error factor and there are a number of appeals.
Throughout the whole process, one or two or three per cent, or whatever the statistic is -- and I am sure the minister has such statistics for municipalities that have gone under that section -- a portion of the assessment is lost through that process. When that happens, a municipality finds in the year it changes to section 86, now section 63, market value assessment, that in the middle of that year it loses part of its tax base because of those appeals that arise from changing over to another system.
Of course, if the municipality had been aware that there is a certain error factor that happens all the time when that system is changed, it could have perhaps raised its mill rate by a small fraction in order to compensate for what happens in most cases when this situation occurs. If this were to start over again and I were in municipal office, I would think very seriously about changing that system because of all the inequities I have illustrated to the minister previously, as well as that part of the assessment that is lost in the year of the changeover. Municipalities should be made aware that this is something that happens when they change systems.
I would like to raise a situation that is happening now in my riding in regard to assessment lowering. I am referring to the very sad situation in the town of Hawkesbury. On December 1 last year the Canadian International Paper mill in my riding closed down. That mill is situated in Hawkesbury. On that day some 430 workers lost their jobs, roughly one fifth of the labour force of the town. Such an incident in itself creates a very serious financial burden on any municipality. A large segment of the population is on unemployment insurance initially and with the economic situation we have in Prescott-Russell and more particularly in Hawkesbury, subsequently that population ends up on general welfare assistance.
If that situation were not serious enough, because the plant closed down, the assessment of that plant decreases. The problem that happened in Hawkesbury is the following. Civic officials examined this situation and said: "How much is the Hawkesbury Canadian International Paper Co. paper mill going to decrease in assessment? We don't really know." They figured there would be some slight loss. The city figured they would lose roughly $100,000 in taxes because the plant closed down.
The Minister of Municipal Affairs and Housing (Mr. Bennett) thought in his wisdom that this was a good figure, I suppose, because he came up with a grant to that municipality of $200,000 over two years, $100,000 for each year, to get the municipality started again and to make sure the good people of Hawkesbury did not lose everything with this plant closure, as serious as it was.
However, recently the Assessment Review Board looked at an appeal that was made by Canadian International Paper and decided in its wisdom to lower the taxes of the Canadian International Paper mill by $825,758. Mr. Speaker, if you were a municipal official who had thought he was going to lose $100,000 worth of taxes and you found yourself in the month of November having lost this amount of taxes, how on earth could you possibly recover that taxation from now until the end of the calendar year? It is impossible, of course.
The breakdown for Hawkesbury in so far as lost revenue is concerned is the following, and I am sure you will want to know this, Mr. Speaker. Hawkesbury itself lost $309,103. The united counties of Prescott and Russell lost $102,676. Of course, the plant is still there: it is just a mothballed plant. Le Conseil d'éducation de Prescott-Russell lost $120,424; the same board of education but at the separate school level lost $196,886, and the separate school board lost $96,668. So altogether more than $800,000 was lost in my constituency in one appeal.
The effect of that is just disastrous in my riding, and I am raising this issue with the minister right now to find out what kind of measures he intends to put in place to ensure that this kind of thing does not happen three quarters of the way through a year. There are a couple of things I can think of at the moment. When there is an appeal like this and it is settled in mid-year after the mill rate has been raised, is there a formula by which provincial assistance can come in at least to complete the tax base for that particular year?
There is nothing the municipality can do. They cannot go back and increase the sales tax, as the provincial government does; they cannot have a deficit, as the provincial government does, or all those other things that provincial governments do. They have the very real situation right now of having no money. That is true not only of the town, as I indicated, but also of the counties, the boards of education and the separate school boards. It is a very serious situation.
Another possibility is that perhaps when there is an appeal of this kind involving a large assessment, it would have to be made the year preceding or something like that. There has to be a formula by which a municipality that is totally helpless is not forced to hold the bag three quarters of the way through the year with a loss. I understand from civic officials in Hawkesbury that they lost 15 per cent of their tax base through this appeal alone. That is a very serious situation and I certainly hope the Minister of Revenue (Mr. Gregory) can indicate to us if there are any plans to solve situations like that in the future.
I raise the case of Hawkesbury. It is a very sad case and I know all honourable members share with me the concern we have for that town. I am sure there are various other towns in this province that have single industries that have had a similar loss and are waiting equally anxiously for the minister's reply, because there is very little a municipality can do in a situation like this.
9:50 p.m.
I do not want to take much more time to discuss this matter. I think I have made my concerns known to the minister and I hope he will be able to respond to some of those things. I really urge him to change his mind about this issue of not sending out assessment notices.
As a person who is familiar with those things, the minister is probably of the opinion that if one gets one's assessment once and does not appeal it, that should mean one is agreeable to the assessment for which one has been charged and will be agreeable for ever thereafter or until it is changed. That is not the case.
These assessment notices are delivered at a very inopportune time of the year, right around Christmas when some of us have other things to do than read the bureaucratic forms we get. A few of us who do keep them to look at afterwards say, "Maybe this is unreasonable here," or start comparing with our neighbours, saying, "Maybe I am being overcharged for my taxes." Unless each ratepayer is provided with those forms so he can compare with his friends, relatives and people living around him there will be even less occasion for him to get the justice he deserves.
Being the sensitive individual he is, I am sure the minister will understand we must give our citizens every opportunity to appeal their assessments. I know the member for Carleton, who was in municipal office for a long period of time at the same time I was, would agree with me that the residents of the city of Nepean would surely -- for instance, with the high school taxes they are paying now -- want to have all the opportunity in the world to appeal their assessments. If they are no longer served with assessment notices, I am sure the member for Carleton would agree they will have less of an opportunity than they have now.
Mais vous savez, M. le Président, qu'avec ce projet de loi, tel que présenté, les payeurs de taxes de notre province ne recevront plus, dorénavant, de formule d'évaluation du ministère du Revenu; ils seront dans une situation très précaire. C'est pourquoi je supplie l'honorable ministre du Revenu, dorénavant, de s'assurer qu'on continuera à fournir aux payeurs de taxes de cette province les formulaires d'évaluation comme on le faisait dans le passé.
Je trouve le processus par lequel on fait appel aux décisions gouvernementales trés difficile actuellement; c'est très intimidant même. Et je sais que vous partagerez avec moi l'avis qu'il ne faut pas rendre ce processus encore plus intimidant qu'il ne l'est déjà. Il faut en effet le rendre plus facile afin que les payeurs de taxes de cette province puissent eux-mêmes aller devant les tribunaux d'appel afin de s'assurer que le taux d'évaluation qu'on leur applique est un taux raisonnable, parce que vous savez qu'il est toujours très difficile pour la plupart d'entre nous de payer nos taxes foncières.
The root of the whole problem is that slowly and gradually this government is increasing the burden of property taxpayers. The mere fact that education is increasingly funded by the acre as opposed to through the consolidated revenue fund is increasing hardship on each and every person in this province. I know the member for Scarborough-Ellesmere (Mr. Robinson), who is applauding at this time, is agreeing with me on this matter when we talk about the unfair burden that is charged upon the municipal ratepayers of this province.
The member at one time was working for the mayor of his city, who is now of course a federal Liberal member of Parliament. We know that a person who works for a Liberal for such a long time would have a thorough understanding of such matters and would therefore agree with me that there is an unfair burden being put on the municipal taxpayer by this government.
It is not so many years ago that the education burden, for instance, as I understand it, was paid by the property taxpayers to the tune of 40 per cent, with 60 per cent coming out of the consolidated revenue fund.
We are told that this is now completely reversed: some 40 per cent of the education costs are borne by this government and 60 per cent are paid from municipal taxes in this province. That is making a situation whereby an unfair assessment, as serious as it ever was, now becomes an even more serious situation with such a large burden on the municipal taxpayers.
The member for Carleton would know the effect of having so large school taxes, as is the case in the good city of Nepean. When we have such a large proportion of the education costs paid by the municipal ratepayer, any inequity in the assessment is that much more serious on the people.
In closing, I want the minister to know that what he is proposing in respect of the assessment notices is not good. I would urge him to reconsider that position and to think of the very serious effect this will have on the population of this province.
Merci beaucoup, M. le Président.
Mr. Foulds: Mr. Speaker, I rise to oppose Bill 90 and I want to oppose it specifically because of section 2 in the bill. I find it really incomprehensible that this government would introduce a bill into the Legislature that would refuse in effect to notify taxpayers of the assessment against their property on which they must pay taxes. That is what has happened: they refuse to notify those particular taxpayers on a specific property by particular and specific notice.
This government, by its own admission, has increased its expenditure on advertising, because it argues that it must convey certain information to the taxpayers and to the people of the province. It admits increasing its public relations and advertising budget from about $26 million a mere five years ago to in excess of $40 million. In this case, where it has specific and legitimate information which should be passed on to the individual property owner, the government refuses to do so. It tries to save something like $3 million in sending out these notices.
As my colleague the member for Hamilton Mountain said so well a mere hour or so ago, the government could have saved that money 10 times over in all kinds of different ways. He spoke specifically about reducing the arbitrariness, the inflexibility and the confrontational model designed by the Ministry of Revenue and the Ministry of the Attorney General. What he had to say on that subject I do not think needs repeating. But I have been struck myself, only in the past year, because of certain happenings in the city of Thunder Bay, which I will get into in a moment or two, or three or four, by just how confrontational that model is.
10 p.m.
Before I do that, I want to say I believe that debate on this bill is important and worth while because I believe this new minister is flexible, much more flexible than his predecessor, much more tolerant, much more open to suggestions for change, much more progressive than the previous minister.
Mr. Cassidy: No, no.
Mr. Foulds: I know there may be those critics of this minister who think otherwise. I hear a few voices raised in derision. I hear a few voices from the government back benches raised, saying: "No, not this man. We bear the scars too well from the last five years when he was chief government whip." But I believe this minister has been saddled with this totalitarian legislation that he now presents before the House and that he will be only too willing to withdraw it, to change it and to delete the objectionable section 2 of this bill.
I want to appeal to his sense of reason, his sense of fairness, his sense of humour and his rationality. In order to do so, I am forced to give the minister a bit of background about how his property taxation system has adversely affected the community of Thunder Bay. The minister may not remember that back in 1969, a year or two before his time as a cabinet minister or a member of this august body, the then Minister of Municipal Affairs, the Honourable Darcy McKeough -- one is almost inclined to say the deceased former minister, but I hear that is not true --
Hon. Miss Stephenson: Scarcely.
Mr. Foulds: The Minister of Colleges and Universities, the Minister of Education, interjects, "Scarcely." Quite right. I hear that Darcy is alive and well and raising money for Jean Chrétien's bid for the leadership of the Liberal Party. He grew to have such an enormous admiration for Jean Chrétien while Chrétien was Minister of Finance and he, McKeough, was Treasurer here that he is out beating the Tory bushes of southwestern Ontario with his own form of tithing, taxation and so on, raising money on behalf of Jean Chrétien.
Mr. Rotenberg: What has that got to do with this bill?
Mr. Foulds: It has absolutely nothing to do with it. I was subverted by the interjection of the Minister of Colleges and Universities.
Hon. Miss Stephenson: The member said he was dead.
Mr. Foulds: Would you restrain her, Mr. Speaker, because she has, as was demonstrated this afternoon, become such a purring pussycat that we hardly recognize her. We want her to become a little bit more aggressive, but when she makes speeches, not when she interjects.
Mr. Rotenberg: Is the member going to get to the bill tonight?
Mr. Foulds: I am trying to put the bill into a bit of a historical context. I think this is allowed when one is speaking on principle, when one is trying to argue from precedent and example.
Mr. Rotenberg: It is a filibuster.
Mr. Breaugh: He has been talking for only five minutes.
Mr. Foulds: This is the shortest filibuster I have ever engaged in, if it is a filibuster. Five minutes. My goodness, I have barely cleared my throat. However, if the member for Wilson Heights is asking me to extend my remarks because the minister is not yet ready to reply since he is not in his place at present, I will be very glad to do so.
Some members of the House will remember -- who do I see across the House who was actually in the House in 1969? Not a single one of the Tories sitting across there was actually in the House in 1969. So we need this historical lesson. We need the background even more. The then minister --
Interjection.
Mr. Foulds: Read? I do not need to read as this is so embedded in my memory.
Interjection.
Mr. Foulds: I beg your pardon? Would you care to repeat that?
Mr. Breaugh: Try to speak up. Do not mumble.
Mr. Foulds: Right. I would be glad to cede my place if the member for Scarborough-Ellesmere (Mr. Robinson) this evening cares to make the last speech he is going to make in this Legislature and resume my remarks later.
Mr. Breaugh: He probably does not even know what the Magna Carta is.
Mr. Robinson: No, you are right. I was not elected when the Magna Carta was signed.
Mr. Foulds: The member just talks as if he was. His social attitudes are just those that were in currency at the time of the Magna Carta.
Mr. Speaker: Now back to the bill.
Mr. Foulds: Nevertheless, back to Bill 90. Members have to understand the effect of section 2 of Bill 90 on the community of Thunder Bay by going back to 1969.
In 1969 there used to be the city of Port Arthur and the city of Fort William and a couple of municipalities, two of which were called Neebing and McIntyre. The then Minister of Municipal Affairs, the Honourable Darcy McKeough, during the days of regional government -- remember those, the high-rising days of regional government and Design for Development and all that stuff? -- forced an amalgamation upon the community that is now known as the city of Thunder Bay.
Into that city came kicking and screaming, unwillingly, the township of McIntyre, which had been part of the municipality of Shuniah and part of the township of Neebing. They were basically rural communities and they still are basically rural communities. Nevertheless, they were amalgamated into the city of Thunder Bay, largely because there had been things growing up known as strip developments, in an attempt to get additional tax base to pay for the servicing that was necessary. For example, the township of McIntyre licensed a shopping plaza. It was the first shopping plaza actually to be built in the community then known as The Lakehead. That community was right on the very border of the city of Port Arthur.
The largest pulp and paper mill in the area is Great Lakes Forest Products Ltd., owned by CP Investments. It happens to be in the rural municipality of Neebing. The residents of those communities traditionally enjoyed relatively low residential taxes because, in the case of Neebing, there was a high commercial and industrial assessment for Great Lakes Forest Products Ltd., and the community of Shuniah looked forward to gaining increased commercial revenue from the new County Fair Plaza.
Darcy was not going to have any of that. He would make it all one big happy family. Unfortunately, in the last 10 years this has had a very bad backlash when it comes to property tax. There have been what one can only call tax revolts in both the community of Neebing, where the alderman for that ward, a Mr. J. D. Polhill, has for the last three years campaigned on the secession of that ward from the community simply because there has been the imposition of equalized market value assessment in Thunder Bay under section 63.
10:10 p.m.
If I may say so, the same kind of tax revolt arose in the township of McIntyre because large rural properties were being revalued, reassessed at what people call market value for an urban centre, even though those communities were rural in nature and in no way could the properties be subdivided. In McIntyre, for example, the properties cannot be subdivided into lots of less than two acres, yet the kind of market value they are facing is the kind of market value on empty properties or on side lots and so on that is faced in an urban community.
The second part of that tax revolt, the second reason for it, is that the people in those two communities, those two rural wards, did not feel they were getting the same service as the downtown urban wards or the suburban urban wards, and they were not getting the same service. They do not get the same sewage systems; they do not get the same bus service; they do not, frankly, get the same police service. There simply is not the same kind of coverage there is, say, in the downtown wards. On the other hand, some houses, particularly in the downtown wards, had been overassessed in value in comparison to some of what we call suburbs, some of the new developments like Grandview Gardens West, Northwood and so on.
The city of Thunder Bay made a decision to go into market value equalized assessment. They choose to do so. There were, as my colleague the member for Hamilton Mountain indicated, a number of notices. There was a lot of discussion about this. There was a lot of talk in city council and there was a lot of talk in the press. There was an attempt on the part of the ministry to inform people that this was coming in. There were open houses.
Nevertheless, when most people got their tax notices at the beginning of this year informing them of their new tax assessment, because it was on a new base, because it was on a new system and because it did not actually give a dollar figure of how much they would be paying in taxes, they had no idea whether they should appeal or not. They had no understanding, particularly when there was a big sticker across the notice saying, "This is not a tax notice," that they had to appeal within a certain time.
It was only some three months later when they actually got their tax bills that they realized they had been well and truly caught between a rock and a hard place. It was only when they got their tax bills that they realized that what they had assumed, what they had been told would be a fairer taxation system was really not so very fair.
Then they tried to appeal. Some of them caught it just in time, but in a number of cases the deadline had passed for them to make an appeal. Some of them came to me as late as June or July of this year because they had been to their alderman and their alderman had said, "We cannot do anything. It is the province that is doing this to you." They had been to the mayor, and the mayor had said: "We cannot do anything. You have to appeal that to the province." In a sense, that is true: one does have to appeal it to the province. But it was the city that implemented it.
Nevertheless, when they came to me and we filed for an appeal, we were told it was too late. However, the constituents, Mr. So-and-So or Mrs. So-and-So, can appeal next year when they get their notices. If there is no change in the assessment value and they do not get their notices, how do they know when to appeal this coming year?
The government is going to put notices in the newspaper. They missed them last year. What strikes me as being very strange, with all of the attempts to notify people, is that there has not been the large scale advertising attempts to notify people of this program, equalized market value assessment in Thunder Bay and its implications, that there were, for example, with senior citizens' tax grants.
There are no two-colour or three-colour posters sent to my constituency office telling me that this is the time of appeal for property tax assessment. There are no big quarter-page ads or full-page ads with two striding figures, blue and red, to tell people there is going to be the imposition of market value assessment in the community or that it can be appealed. There are no flashy little jingles on television telling them to preserve and conserve their market value assessment. There just is not that kind of high-profile, constant bombardment of propaganda. There is no advocacy advertising when it comes to market value assessment.
If the people who missed the appeal last year for a whole host of reasons do not at least have an individual notice sent out to them this time around, how does the government legitimately expect them to appeal within the appropriate time?
I simply want to outline three of the cases that were brought to my attention. I wish I had the files in front of me so that I could outline these cases in detail. Unfortunately, those files are back in my office in Thunder Bay and I will not be able to give all of the detail on these cases until we continue the debate on this bill next week. I will have the opportunity to obtain those files when I am home on the weekend.
I want to give the minister some idea of the injustice wreaked upon the community by the imposition by choice of the city of Thunder Bay of market value, equalized assessment or whatever one wants to call it. I want to relate some of the impact on individuals.
First, take the case of a small businessman, Nick Prsa, who runs Nick's TV on Camelot Street in Thunder Bay. One of the big arguments made time and time again in favour of the property tax system this bill amends was that in the downtown core taxation would be less because over the years they had paid more than their share.
In a large number of cases that was true. In a number of cases the assessment on some of the downtown Port Arthur businessmen did go down, but not in the case of Nick's TV. He happened to have built a new building right on the edge of the urban downtown core on Camelot Street.
That is a whole two blocks away from the Eaton's development in Thunder Bay, from the Keskus development in downtown Thunder Bay, which was part of the urban renewal program instituted in the late 1960s by the provincial and federal governments.
10:20 p.m.
Mr. Prsa had built a new building. He himself runs one business out of it, Nick's TV, as I informed the Legislature, and rents out three other stores in this small mall. The fact of the matter is that when he got his assessment notice, it was based on 1981 market value. Anybody who knows anything about property values in Ontario, and particularly in the city of Thunder Bay, knows that 1981 was absolutely the highest year one could pick when it comes to market value. It was the most inflated year when it comes to market value.
One of the flaws about market value is that there is no such thing as provincial market value. One cannot have hermetically sealed market value in a community. One cannot have the same market value of the same house with the same amenities in Thunder Bay as in Cornwall, Brampton, Hawkesbury or Metro Toronto.
Mr. Prsa took his case to the review board and, I believe, to the appeal court, and in both cases it was turned down. When I talked to him about it, he said he might as well not have gone. It was like appealing to the Social Assistance Review Board. They had already made the decision. They simply were not going to allow any of the appeal.
One of the problems with this small business is that there is no comparable property. There simply is not another comparable property in the whole community on which to base their so-called market value.
Interjections.
Mr. Foulds: The members opposite may want to make fun of small businessmen, who in this case are Russian immigrants who have made good in the entrepreneurial sense in Thunder Bay, but I sure do not.
The second case I want to bring up is that of Michael Hedican. Mr. Hedican owns a house on Pearl Street, at the corner of Pearl and Ambrose. I do not know the exact number but when I speak next week on this matter I will have the file before me and can give the actual lot number and assessment value.
Members will remember I talked about urban renewal in Thunder Bay. Mr. Hedican ran a business on Wilson Street, I believe it was, which was demolished in the urban renewal process. He ran Mickey's second-hand store.
In 1969, when his business was frozen, Mr. Hedican was a man in his late 50s. Basically he was told that the business, Mickey's second-hand store, could not be expanded. He could not make any improvements to it and it was ultimately demolished to make way for a bright, new modern development.
Do members know what the bright, new modern development is on that street right now? It is a bloody parking lot. This government did him out of his business. They paid him about $60,000 for it. That is all. And at 58, what does he do? What he did with that $60,000 -- actually, it was somewhat less than that -- was to buy this home on Pearl Street. This home happens to have an apartment in it, and there is a small house on the back of the property which he rents out --
Interjections.
Mr. Speaker: Order.
Mr. Rotenberg: Will he admit now he is filibustering?
Mr. Foulds: No, not in the least. Mr. Speaker, on a point of order: If the member for Wilson Heights (Mr. Rotenberg) does not think it is the duty and obligation of a member of the Legislature to speak out in this assembly on behalf of his constituents when legislation is brought in that adversely affects their well being, then he is sadly mistaken.
Basically, this bill happens to amend what I call the Property Tax Act, the act that imposes property taxes on the people of this province. I am trying to give a little history of the case of Mr. Hedican and show how this bill should not go through at this time because --
Mr. Rotenberg: Mr. Speaker, on a point of order: I submit that this is not a general debate on the taxation or assessment policy of the government and the legislation. This is a debate only on the bill before us. I submit that the honourable member is not talking about the bill before us in any shape or form. I ask you to ask the member to confine his remarks to the bill before us. This is not a budget or throne speech debate.
Mr. Breaugh: Mr. Speaker, speaking to the point of order: The honourable member, if he were aware of the bill before us, would know that the Assessment Act will apply to every piece of property in the province. My colleague the member for Port Arthur has identified some of those properties. The member may not like what he is saying, but it is related.
Interjections.
Mr. Speaker: Order. Having heard the explanation, I think we will hear from the member for Port Arthur and his remarks pertaining to the bill, and I may remind him that is Bill 90.
Mr. Foulds: Mr. Speaker, I am very pleased for those instructions and the fairness with which you delivered that decision.
What I am trying to show is why section 2 of Bill 90, which is the section that indicates the ministry no longer wants to send out notices to those people who do not have their assessments changed, is unfair to Mr. Hedican. All I am trying to do to make that argument is to give a bit of history of how Mr. Hedican currently arrives at the ownership of the house and property on the corner of Pearl and Banning Street. I was indicating that his business on Wilson Street had been demolished through previous policies of this government and the federal Liberal government and that he had used the money, inadequate though it was, that was granted to him in compensation for the demolition of his business on Wilson Street, to purchase the property which this bill affects --
Interjections.
Mr. Speaker: I think the member is being repetitious. I have heard this before. Now get on to the bill.
Mr. Rotenberg: I understand he is being repetitious.
Mr. Foulds: Does my friend understand it?
Mr. Speaker: I direct the honourable member's attention to the clock.
On motion by Mr. Foulds, the debate was adjourned.
BUSINESS OF THE HOUSE
Hon. Mr. Eaton: Mr. Speaker, may I indicate the business of the House for tomorrow and next week?
Tomorrow, November 4, we will be continuing the estimates of Management Board of Cabinet.
On Monday, November 7, in the afternoon, we will be completing the estimates of Management Board, followed by concurrences to be announced on Monday.
On Tuesday, November 8, afternoon and evening, legislation in this order: second reading of Bill 52; committee of the whole House on Bills 51, 52, 86 and 87; second reading and committee of the whole on Bills 90, 93, 94 and 92.
On Wednesday, November 9, in the morning, the usual three committees have permission to sit. In the afternoon, the private members' ballot items of Mr. Gordon and Mr. Piché.
The House will adjourn at 6 p.m. on Wednesday until Monday afternoon, November 14.
The House adjourned at 10:31 p.m.