MINISTRY OF CONSUMER AND COMMERCIAL RELATIONS AMENDMENT ACT
CORPORATIONS INFORMATION AMENDMENT ACT
The House resumed at 8 p.m.
LIQUOR LICENCE AMENDMENT ACT
Mr. Williams moved, on behalf of Hon. Mr. Elgie, second reading of Bill 11, An Act to amend the Liquor Licence Act.
Mr. Williams: Mr. Speaker, today I am pleased to introduce the Liquor Licence Amendment Act 1984. The most important change contained in this legislation will be a two-year prohibition on a second application for a liquor licence following a Liquor Licence Board of Ontario rejection of an initial application as a result of a public hearing.
The change is designed to prevent a repetitive series of reapplications, but the board will retain discretionary power to process a second application within the two-year period if it is satisfied there has been a substantial change in the circumstances surrounding the application.
In addition, this bill will provide for the formal amalgamation of the Liquor Licence Appeal Tribunal with the ministry's Commercial Registration Appeal Tribunal.
Further amendments will provide the LLBO with authority to prescribe by regulation other types of personal identification which may be given status equal to that of the Ontario photo card, the photographic identification issued by the board itself and currently the only proof of age that licensed establishments can rely upon without risk.
Finally, this bill will also amend the act to broaden the definition of Ontario wine to include wine made from a combination of Ontario and imported apple juice. This results from a request from two of this province's wineries that want to blend imported apple juice from the United Kingdom with our domestic apple juice to produce a new line of apple cider.
Mr. Boudria: Mr. Speaker, I am pleased to participate in the debate on behalf of our party, but I will gladly give the floor to the member for High Park-Swansea (Mr. Shymko) who seems to have a lot to say on this bill at the moment. Perhaps he wants to sell wine in small, independent grocery stores in his constituency. I am not quite sure. Whatever it is he is trying to mumble, he seems to have something on his mind.
The Acting Speaker (Mr. Cousens): The honourable member should be speaking to Bill 11 and not worrying about the member for High Park-Swansea.
Mr. Boudria: So should the member who is heckling me.
I will gladly speak to Bill 11.
The Acting Speaker: An Act to amend the Liquor Licence Act.
Mr. Boudria: An Act to amend the Liquor Licence Act. I am quite well aware of that, Mr. Speaker, and I thank you for bringing it to my attention.
First of all, our party is generally in favour of Bill 11 but we do have a few questions that perhaps we could enumerate at this point, and I hope in his wrapup remarks the parliamentary assistant can enlighten us as to some of the reasons for these amendments. Some members say they doubt that, but I will give the benefit of the doubt to the member for Oriole (Mr. Williams) that he can in fact enlighten this Legislature with some further explanations to this bill.
As the parliamentary assistant indicated, there are a number of changes. The first one I have concern with is the two-year prohibition on the second application for a liquor licence. I recognize the existing problem is that applicants would just reapply until objectors finally got fed up with objecting, and I know this is what the government is trying to cure.
I am in favour of having some sort of prohibition for a period of time; I am only questioning why two years was chosen. Two years is a very long time. I am thinking of the western end of my constituency. Where once there had been wide open fields, over the last two years 1,200 or 1,300 new homes and all kinds of new buildings have been built. It seems to me a two-year process like that may or may not always be necessary, and I would like further explanations from the member as to why he feels this particular length of time is warranted.
I recognize the government is saying it can consider an application before the two-year period is up, but from what I gather the applicant would in the first instance have to prove circumstances had changed to make a second application acceptable; then he would have to go ahead and apply a second time in order to attempt to get the licence. From what I gather, the government is creating a two-level method of application for those people who have applied less than two years ago.
Again, we do agree there should be a period of prohibition after a refusal, but I just wonder why it has to be this long. It is a personal concern I have. One cannot help wondering if this is not a case of denying justice by way of delaying it, because it is a long period of time or it may be a long period of time, and circumstances sometimes do change a lot more quickly.
Perhaps the member can indicate the history behind it and the number of cases we have had in the past where circumstances have not changed over two years. He may have proof this is the proper period, and I would gladly accept it, of course, if that were the case. It is a concern we have.
I personally welcome the Commercial Registration Appeal Tribunal now dealing with liquor licence appeal matters. I gather they were almost doing that in some cases already because of the composition of the various boards. I do wonder why it took us so long to do this. I seem to recall in the estimates of the minister almost two years ago we did say we were going to do this, and we now see it coming to light.
8:10 p.m.
I find it interesting that we are now going to give the same privileges to Ontario cider as we have to wine in the past. I must say, frankly, I thought this was the case already in this province. I recognize there is a linguistic component there to the word "cider." Generally in the French language we interpret "cider" as being fermented cider, a type of wine, and I had assumed this was already the case in the present law and it was generally interpreted as being the case in the English language.
I am told by some of my colleagues this is not necessarily so. In the English language, the word "cider" is used to describe a type of apple juice, as well as being used to describe fermented cider or apple wine, which has been used in the past. I am glad to see we have included that in the bill.
I have a question about section 6 of the bill, the amendment to subsection 18(3) of the act. I notice in the last sentence it says "an appeal under this section may be made on questions of law only." I wonder why that change took place. Perhaps the government could enlighten us on why it feels that change is necessary.
From what I gather, in the past we could refuse an applicant a liquor licence in this province because the individual was known to have a bad reputation or such kind of thing. Is what the government is doing, by removing this and allowing only questions of law, to comply with the provisions of the Charter of Rights? Is that one of the reasons it is amending this section? I am a little curious about the purpose of that amendment and would like to know the reasons for it.
My colleague the member for Kent-Elgin (Mr. McGuigan) also has a point on which he wants some clarification. I do not see him in his seat right now, but as I understand it he will be back in the Legislature shortly. If I indicate it to the parliamentary assistant, perhaps he will be able to clarify it for us. It has to do with the present act as it pertains to liquor permits on Indian reserves.
I understand most Indian reserves are dry, but that is not the case for all of them. I know there is a case of an Indian reserve in the constituency of Kent-Elgin that has, on occasion, applied for special occasion permits, as well as other kinds of permits. The present act does not refer to Indian reserves. It refers only to municipalities. The municipality is not the sole local jurisdiction nowadays.
Mr. Stokes: You can get a special occasion permit on an Indian reserve.
Mr. Boudria: The member for Lake Nipigon has indicated you can get a special permit on an Indian reserve. That is correct. As I understand it, though, what we are lacking in the case of the Indian reserves is the means to obtain an appeals procedure. There does not seem to be an appeals procedure when there is no municipality involved. I gather that is the problem the member for Kent-Elgin wants to indicate.
In any case, he has now regained his seat and he can add to the questions regarding liquor licensing on Indian reserves.
Those few remarks are about all I have to say on this bill. It is not a terribly controversial piece of legislation. I have a feeling a lot of the legislation we are doing these days is not particularly controversial in nature at all, and we seem to be doing quite a few small bills rather than attempting comprehensive legislation.
One wonders why we are doing only this kind of legislation at the present time. Does it mean there is actually something in the air that some of us are wondering about, some occasion in June when we will be called upon to vote on other things than Bill 11, all at one time?
The Acting Speaker: We are talking about Bill 11 and not about other subjects.
Mr. Boudria: We are talking about Bill 11. I was just indicating the relative importance of Bill 11 in the context of all the legislation we pass in this province. I cannot help but notice this is not one of the more complex pieces of legislation we will have to deal with this year.
Those are the comments I would like to make on behalf of our party. I would appreciate some remarks from the parliamentary assistant on those few concerns we have.
Mr. Renwick: Mr. Speaker, I do not think either I or this bill deserves this particular applause, but I am grateful for it.
I find bills such as this intriguing because the explanations we receive in connection with them are only partial. It is extremely difficult to deal with piecemeal legislation such as this on second reading. Having said that, I will attempt to cover my concerns in the bill.
I read the definition with respect to Ontario wine and the new inclusion in the Liquor Licence Act of the portion dealing with the combination of apples grown in Ontario, etc., and the concentrated juice of apples grown outside of Ontario in such proportion as is prescribed by regulation. The explanation is that two wineries requested the concentrated juice of apples grown in the United Kingdom be allowed to enter for this purpose, yet the limitation in the definition is not restricted to the United Kingdom.
I would like to know the dynamics behind the continuing request by wineries to have content from abroad included in the products to be manufactured in Ontario. Is it only the United Kingdom? If so, what part of the United Kingdom? What particular virtue do United Kingdom apples have? What is there to prevent someone suggesting there should be apples from France, Germany, the United States, or from some other part of the universe?
An hon. member: Even British Columbia.
Mr. Renwick: Or apples from BC, as my colleague said.
My point is simple. The explanations are partial and disdainful of the assembly. They do not give us the kind of information we need to deal with the bill. It would be easy to say there is no point in debating the bill at all; just let it pass, because it is not of any importance.
My same concern applies with respect to replacing the Liquor Licence Appeal Tribunal with the Commercial Registration Appeal Tribunal, particularly when I find we are not really substituting the Commercial Registration Appeal Tribunal as it is set out in the Ministry of Consumer and Commercial Relations Act. We are truncating its jurisdiction by precluding the application provided in the Ministry of Consumer and Commercial Relations Act for appeal to the courts.
In this bill, the government is disbanding the Liquor Licence Appeal Tribunal, transferring it to the Commercial Registration Appeal Tribunal, and then in the next breath saying the decision of that tribunal, so far as liquor licence applications are concerned, is final, whereas under Bill 274, the Ministry of Consumer and Commercial Relations Act, a very clear due process operation is permitted.
Later on in the bill when the government substitutes the Liquor Licence Appeal Tribunal with the Commercial Registration Appeal Tribunal, it again restricts the right of appeal of a person to matters of law, whereas under the act governing the whole of the ministry there is an appeal on questions of fact in law.
8:20 p.m.
Yet when the bill is explained to us in the assembly, no explanation is given as to why, if the government is going to make the transfer, it does not just make the transfer and allow the due process to operate, which is set out in the Ministry of Consumer and Commercial Relations' bill.
Similarly, there is an inadequate explanation in the parliamentary assistant's opening remarks. As far as I can tell, there is no reference to the increased jurisdiction to clause 7(za), "regulating and controlling the possession of liquor sold under any class of licence or permit." I do not know the reason for introducing that subsection in the bill.
It is extremely difficult to read the explanatory note, which says: "Section 7: The new clause is an addition to the section authorizing the making of regulations." One does not have to be a genius to understand this is what it is about. But why does the minister want that particular additional regulatory-making power?
Then he comes to the question of adding other and additional documentation for the purposes of establishing the age of a person. I do not know what the intention is of that. I do not know whether that is the forerunner to the requirement that drivers' licences in Ontario are now going to have the photograph of the individual person on them and that is going to be the substituted documentation.
What substituted documentation will be sufficient if the owner of an establishment serves liquor, beer or wine to a person under the age of 19 years? What other documentation does the minister have in mind that will exonerate the owner of the establishment from exercising the kind of vigilance we went to a great deal of trouble to provide in the assembly, by providing an identification card readily available to young people for the purpose of establishing their age? Again, all the parliamentary assistant offered was a very generalized statement.
I do not know, and I do not understand either, the technical amendment he is introducing to provide that "Ontario regulation 805/81 shall be deemed to have come into force on October 13, 1981." Is that a mistake? Was the regulation not filed in time? I noted the regulation was filed on November 27, 1981. Here we are in 1984 being asked to make that regulation deemed to have come into force on October 13, 1981, instead of November 27, 1981. Why is the minister coming in with a statutory change for that purpose at this late date?
Surely the parliamentary assistant knows there may be government secrets he cannot disclose, but certainly with some of the clauses which are technical the minister does not have to play it so close to the vest that he cannot share the actual reasons with the assembly. If they are shared, we do not have to debate these kinds of bills because one can read the explanatory note and one can understand it. The minister leaves us with no alternative. Either we ask all of these questions, because the explanatory notes and the parliamentary assistant's statements are totally inadequate, or we let the bill go and find a joker somewhere in the pack.
Let us be forthcoming and get on with the business of the House by dealing openly and clearly with the reasons for these various amendments. Then perhaps we will not have to put the bill into committee of the whole House.
Mr. McGuigan: Mr. Speaker, I am very appreciative of the remarks of the member for Riverdale (Mr. Renwick). Because of his learned knowledge of the law, he cleared up a number of points. He has confirmed what I had surmised was the case.
As I look at section 6 of the act, the net effect is to transfer the jurisdiction for appeals from the Liquor Licence Act to the Ministry of Consumer and Commercial Relations. The point is that the appeal is now made on the question of law only and not on the question of fact. I submit that appeal should be considered on fact, and I want to outline a particular case in my riding.
John Peters, the former chief of the Moravian band, in a letter to Helen Forbes of the Liquor Licence Board of Ontario, said a referendum was held on the reserve regarding the question of the sale of liquor. However, he said the referendum referred only to the sale of liquor by a nonprofit organization to be monitored by the Moravian band council. In fact, the licence was issued to a private individual. This fact is confirmed by a copy of motion 6 of January 19, 1983, of the Moravian band council.
I would have thought this fact would have been considered by the liquor licence board, and it is a fact that could be used as a basis for appeal.
Another fact that should be considered in an appeal is that the Ontario Provincial Police are slow to respond to calls for assistance on the reserve. Relations between the OPP and the reserve are not the best. One can appreciate the reluctance of the OPP to respond to what they probably regard as nuisance calls. Part of their inability to respond is due to the undermanned state of their complement. OPP officers themselves have told me they respond to calls on a priority basis and they cannot guarantee to respond to a disturbance call when their officers are tied up with traffic accidents or criminal investigations. The reserve has asked repeatedly for an OPP station on the reserve.
Another question that should be applicable is the allegation in the letter of February 15 from former Chief Peters to the chairman of the liquor licence board. The letter says the applicant openly and willingly confessed to bootlegging. Rev. John A. Lombard, rector of St. Peter's Moravian Anglican Church of Canada, says in a letter that the applicant supplied liquor to a 20-year-old boy who got drunk on the liquor and subsequently, as a result of a car accident, has only 20 per cent vision remaining in one eye.
It seems to me that on the basis of the above facts the licence should be subject to appeal.
I want to return to clause 6(11)(g) of the act, which says, "in the case of an application for a licence, the issuance of the licence is not in the public interest having regard to the needs and wishes of the public in the municipality in which the premises is located." I draw attention to the word "municipality," which has already been mentioned by the member for Prescott-Russell (Mr. Boudria). If one looks in subclause 1(i) of the Liquor Licence Act, "municipality" means "a city, town, village or township." We have another jurisdiction in Ontario that is not covered by "city, town, village or township," and that is an Indian reserve.
Nine elders -- and I remind all members that in the Indian community elders are held in great respect -- including the former chief, were opposed to the granting of a licence. I am confident these people would appeal the decision. I know the former chief would appeal. However, they are prevented from appealing on either fact or law, as there is no provision for an appeal from a reserve.
8:30 p.m.
I suppose the framers of the Liquor Licence Act did not consider this because at the time the Indian Act did not allow liquor on reserves. However, since 1970, there has been a provision whereby, on a petition from the reserve, liquor can be allowed on a reserve.
One would think that if reserves are not allowed to appeal and if their residents are not to be treated differently from residents of a city, town or village, some provision should be made for reserves. I do not know the ramifications of that or how it might affect the Indian Act. However, I would suggest the government look at this and perhaps stand down this legislation until such time as it can bring in an amendment to cover reserves.
I want to make it clear that I am not objecting to a licensed establishment on the Moravian reserve or any other reserve, provided the licence is granted under the same terms as exist for granting an appeal for nonreserve licences. If we are to have harmonious relations between native and non-native people, we must give them more control and, hopefully, full control over their affairs. This would include the question of whether or not they have liquor licences on the reserves.
By way of background information, I should point out that where a licence is granted on a reserve, the band council must first petition the federal government to lift section 94 of the Indian Act. This application was made on March 22, 1983, and approval was published in the Canada Gazette on August 27, 1983.
To conclude on that part of it, I think there is a glaring omission in the act in that we do not have a section dealing with an appeal from a resident of a reserve. If one looks at the present act, it is probably legal from the standpoint that they are not mentioned with respect to the original granting of a licence. Probably the granting of a licence is legal enough, but when it excludes them from an appeal and appeals are granted to non-Indians, it would seem to me we are treating them in a second-class way, which is not consistent with our ideas of common justice.
I think this act should be amended to take that into consideration. My objection is not to a licence on a reserve; it is to the process which, as I outlined, is very unfair.
Being an apple producer myself, I would like to comment on sub-subclause 1(j)(iii)(B), the concentrated juice of apples grown outside of Ontario. We do support the importation of grape juice because we do not grow enough of the particular varieties of grapes that are now in favour in Ontario. Just last week we amended an act to allow two more years of importing grape juice and concentrates from other countries, particularly from Europe.
I cannot see any necessity for bringing in apple juice. We have a surplus of apple juice in Ontario and have had for many years. Concentrated juice of any description, of apples or grapes or whatever, is not the best quality product because the juice is heated in a manner that destroys some of the flavour of the product. It is heated to drive off the water, but in doing so it also drives off a good many of the aromatic esters and ethyl oleate chemicals that add the particular bouquet, flavour and aroma to the juice.
When one buys a tin of apple juice that says "apple drink" rather than "apple juice," one is buying a product made from a concentrate. It is very much lacking in flavour and quite a different product from whole apple juice.
The Acting Speaker: Does what the member is saying apply to Bill 11?
Mr. McGuigan: If you look on the first page of the bill towards the bottom, sub-subclause 1(j)(iii)(B), it says, "the concentrated juice of apples grown outside of Ontario." I am just pointing out that one is not getting the very best product and I do not see any particular need for this.
I am personally very much against this bill and I would like to see it changed to take care of some of the concerns I have expressed.
Mr. Haggerty: I knew you would not forget me, Mr. Speaker.
Mr. Shymko: Now we will hear some eloquence.
Mr. Haggerty: The member is going to hear some different approaches taken to this act, An Act to amend the Liquor Licence Act. He can rest assured of that.
I was looking at sections of the act that could restrict competition, and I will direct a question to the parliamentary assistant on this matter. Does this bill conform to the new Department of Consumer and Corporate Affairs bill to amend the Combines Investigation Act that was tabled in the House of Commons?
A news release from Consumer and Corporate Affairs Canada says: "The result of extensive consultation with provincial governments, consumer groups, businesses and other interested parties over the past three years, the bill contains a package of amendments designed to fairly balance the interest of large and small businesses and consumers, and contribute to economic growth.
"Competition policy sets out the basic ground rules for all economic activities. The goal is to fashion a law which responds to Canada's present industrial realities and economic opportunities."
It adds: "Among the bill's major proposals are amendments to clarify and strengthen the law dealing with mergers, criminal conspiracies to restrain competition and the anti-competitive practice of firms that dominate markets. The bill also extends the coverage of the act to crown corporations and banks."
I would point out that there is an arm of this government that does dominate the market. One could say the LCBO under the Liquor Licence Act is a crown corporation and it dominates its market through, for example, price fixing.
The news release goes on to say: "The civil courts will also now be used to safeguard Canadian consumers and businesses from abuses by firms that are in dominant positions in their markets. The bill lists a variety of abusive, anti-competitive practices which can be used by firms which dominate their markets to prevent small firms from growing or new firms from starting business. This will ensure that small firms or new businesses are not prevented from growing as a result of dominant firms engaging in anti-competitive practices."
Section 1 of our Liquor Licence Act refers to Ontario wines. Other products are allowed to come in under this act.
The news release from Consumer and Corporate Affairs Canada says: "Conspiracies to restrain competition contradict the basic tenets of fair play in the free market system." I sometimes question whether it is a free market system when the Liquor Licence Act controls the issuing of certain licences. Walking down Bay Street or Yonge Street, particularly out in front of the Westbury Hotel, I notice they have railings placed outside at noon hour and alcoholic refreshments are served right on the street.
The Speaker is shaking his head -- he does not agree with me -- but that does take place on Bay Street. Yet different groups applying for special permit licences are confronted with strict conditions saying such facilities may interfere with the public. Extending the permit to allow service on the street is not necessary, I suggest, when the establishment has other facilities off the street. I think this is an area where the government could consider changes.
Getting back to the release concerning the Combines Investigation Act, it quotes Mrs. Erola as saying: "These measures will allow Canadian firms to better meet the foreign competition at home and to penetrate markets abroad. The proposed amendments also make agreements among Canada's chartered banks subject to the Combines Investigation Act."
However, it does not seem to apply to the Liquor Licence Act here.
8:40 p.m.
We talk about foreign competition and penetrating markets abroad. In the area I represent in the Niagara region, the riding of Erie, close to the US border, we see the loss of the tourist industry, particularly the dollars tourists can bring into Ontario. Even with the 30 or 35 per cent exchange on the US dollar, tourists are not coming into that area to spend money. One of the reasons is shown by an advertisement from the Buffalo Evening News dated April 16. Here is an example: "Labatt's beer and ale, case of 24, $7.98."
An hon. member: Made in Canada.
Mr. Haggerty: Made in Canada. The same thing applies to Canadian liquor sold across the border from Fort Erie. One can buy it for almost one third of its cost in Ontario. If we are to have fair competition -- we talk about export trade with our neighbouring country to the south -- and if we want people to spend money in the tourist industry here, we are going to have to bring our alcoholic beverage prices in line with those of our US counterparts.
If we were more competitive in this area of commodities, we might have all kinds of Americans coming to see the Toronto Blue Jays play the New York Yankees or Cleveland Indians. This is the area the government should be looking at.
Another area I want to discuss -- I have raised this at every opportunity I have had to speak on amendments to the Liquor Licence Act or about the Liquor Control Board of Ontario -- is the serious problem many municipalities now face with municipal waste disposal.
I draw a parallel to the beer industry, where we have recycling and returnable bottles; each bottle is recycled about 21 times. Yet we find the Liquor Licence Act and the Liquor Control Board are the biggest contributors to pollution -- I suppose one could take that both ways: human pollution and municipal waste pollution -- in the province in the sense that it is costing municipalities. It is getting to the stage where the local taxpayers cannot afford to bury these glass bottles any more. This government will have to take some leadership in this area.
I have a resolution from Fort Erie town council, for example. They are concerned about this problem. The resolution is about the multi-material recycling program. They talk about the glass and say a letter "advises that the Ministry of the Environment has a proposal before the provincial cabinet at this time supporting the recycling program and support appears to be justifiable providing the benefits are reasonably in line with the letter." This is dated the fourth month of 1984. It says there would be "savings to taxpayers through reduced landfill costs; private investment into community recycling systems [and] local employment."
I ask the minister and the parliamentary assistant responsible for this bill, why do they not get off their good intentions and do something in this area to give the municipalities some relief?
If it were garbage pickup day in Toronto, I would suggest we walk along Wellesley Street tonight to see what I am talking about. Almost every garbage can is filled with this type of litter. The government should put some pressure on the Liquor Control Board to change the Liquor Licence Act and bring in some recommendations on returnable bottles.
Mr. Nixon: Isabella Street is good too.
Mr. Haggerty: Isabella is good too? Is that a new brand?
The Deputy Speaker: With all respect to the member, I am wondering --
Mr. Haggerty: If one walks down the streets anywhere in Toronto, one can see what I am talking about. Let us move in this direction and do something in that area. Do something good for a change over there and at least get the recycling back to where it should be with responsible bottling.
The Deputy Speaker: Order. I wonder what this has to do with the bill.
Mr. Haggerty: I am right on the bill. That was omitted, and I thought I might induce the minister to bring it in.
Mr. Williams: Mr. Speaker, I have appreciated the comments from the members opposite on various aspects of the bill and the concerns that have been expressed.
I certainly want to hasten to allay the fears of the member for Riverdale, who suggested that the legislation has been brought forward in a form of secrecy and that we have denied the opposition members an opportunity to have a real understanding and appreciation of what the amending legislation is all about. I will certainly put his mind to rest as quickly as I can on that score, because I am anxious to put on the table, so to speak, all the information relevant to the sections that are of concern to the member for Riverdale to make quite clear the intent and purpose of those amendments.
I would like, however, to turn to the first speaker, the member for Prescott-Russell, and deal with section 2 of the bill and the concerns the honourable member expressed about the time factor before a further appeal could be made after an initial denial of an application for a licence. He was questioning whether the two-year period was too long and whether the amendment was merely a delaying or stalling tactic.
I can assure the member this is not the case. The two-year period has been brought in with a real purpose, given the fact that we are not talking about a new hearing. It is not as though we were denying an applicant the opportunity to apply forthwith to get a licence in the first instance.
It may have been a number years ago, before the member and I were of the age of majority, that the operators of restaurants had to wait six months, I think it was, or maybe a year before they could even apply for a liquor licence. They had to prove that the food they were serving in their establishment was of good quality and was causing no consternation out in the community as to a poor bill of fare. Once they had established their credentials in the community as far as serving good food to the public at large was concerned, then after a given period of time they could apply for a liquor licence.
Of course, that has since changed, and that delay period no longer exists. It did indeed work very difficult economic hardships on the restaurateurs in that particular era.
What we are talking about here, of course, is the appeal situation. If the member has not experienced it in his riding, I have certainly had first-hand experience of this situation. As the minister said back on March 26, when he introduced this bill for first reading, the reason for this particular amendment is that some applicants have filed new applications with the board shortly after each rejection, apparently in the hope that local opposition to the granting of the licence would simply be worn down. That is simply a reiteration of what the member for Prescott-Russell was saying and acknowledging.
Certainly I have had that experience in my own riding. While the names may not be of any significance to the member opposite, as an example, one of the major ratepayers' associations within the heart of Oriole riding, the O'Connor Hills Ratepayers' Association, went through this horrifying experience back in 1979. They opposed an application by a restaurateur on what they felt were very valid grounds. They appeared before the board and convinced the board that the licence should not be issued at that time, and it was refused.
8:50 p.m.
Within a matter of months, the applicant appealed to the tribunal. In the same year it went to the tribunal, and the tribunal agreed with the original position of the board in refusing the licence. That did not deter the restaurateur. He decided, "We will go back at it a third time." Indeed, the restaurateur did apply again. In so doing, he was refused a second time at the board level, the first level of appeal.
He had been turned down three times, but he decided, "No, we will continue to fight on and wear down the local citizenry." He went to the tribunal for a second time and, lo and behold, he got his wish. For reasons best known to themselves, and I am not going to quarrel with the reasons given although I may differ with them, the tribunal did approve the application.
This all took place within a two-year period. Quite frankly, at the time of the fourth hearing one person turned up from the ratepayers' association, compared to the first instance when a significant number came out. Each time, there were fewer and fewer people.
The very thing the minister referred to in his opening statement, that the member for Prescott- Russell has acknowledged and apparently has experienced in his own riding, happened here. The citizenry was just worn down and the ratepayers' association, which was vigilant on behalf of all the people living within that community, just felt it could not go on fighting although it gave its best shot, so to speak. Lo and behold, within that 24-month period, just through the process of continual application and appeal, the restaurateur did succeed.
With this experience in mind and this particular case, along with several others that had been brought to the attention of the minister, it was determined that it would be appropriate to have a cooling-off period so to speak. This would provide a reasonable period during which the residents in the community and their ratepayers' representatives, if they happened to have an organized ratepayers' association, would have a respite from being continually badgered by the restaurateur who was insistent on getting a licence and would keep the pressure on and keep the ratepayers' association, if applicable, and the citizens in the community continually coming back to the board to present their case.
The amendment has been put forward with this in mind, and I think on good grounds. As the member for Prescott-Russell and others have stated, the intent was good, but they wanted to be satisfied that intent as members understood it was bona fide. Indeed, I can reinforce and reaffirm what members are saying.
Mr. Boudria: Why two years as opposed to one year?
Mr. Williams: Let me go back to my example. The first application before the board was held in May. By the time they got to the tribunal, it was November, but it was in the same year; so the better part of a year had already been spent and they were only at stage 2 of the proceedings.
It seems to me that a longer time period has to be set aside that would prevent this continuing onslaught from prevailing. There is an escape provision in the section, as the member for Prescott-Russell himself pointed out.
If the circumstances have substantially changed -- and do not ask me to give a legal interpretation of substantial; from a practical point of view we can understand what substantial change would be -- the board has discretion to permit a rehearing or a new application to be made within the two-year period, but only in unusual circumstances. That escape mechanism is there if there are really bona fides under which the restaurateur is going to be greatly prejudiced by having to wait the two-year period. But by the same token I think this provides a strong measure of protection to the local community and to constituents who are subjected to these types of public hearings.
With that escape valve there, and considering the member's concern about whether it is one or two years, while two years is an arbitrary selection of time, I think it is a realistic one we can all live with that will be in the best interests of the public at large.
Perhaps I can turn to concerns raised by the member for Prescott-Russell and the member for Riverdale. I think the member for Kent-Elgin and the member for Erie (Mr. Haggerty) also raised some concerns with regard to section 1, where the definition of Ontario wine is expanded to include apple cider.
There were varying points of view from the other side of the House, from extreme pleasure to consternation, frustration and, if not outright opposition, a great deal of anxiety expressed over the fact that we would be amending the legislation to permit imported concentrates to come into this country. It would appear from what some members have suggested that it would impact adversely on the domestic wine market.
What has been overlooked, for those members who suggested it works against the interests of domestic apple growers and it appears as though we are bringing coals to Newcastle by bringing imported concentrates into a jurisdiction where we have great quantities of apple juices available locally, is that there appears to be an inconsistency.
The situation is identical to what we were talking about the other day under the Wine Content Act where we realize that a certain amount of imported grapes have to be brought into Ontario to ensure the quality, flavour and bouquet of wines are acceptable to the consuming public in Ontario. That blending process is an essential ingredient to ensure there is the quality and texture of the wines that make them internationally recognized and have earned them awards on an international basis. It is so with regard to the apple ciders.
It has been indicated the concentrates that would be used would have to be of the nature that are available only from England. The type of cider they want to produce is the English type of cider. The two brand names that are being proposed are ones which I am sure the member for Riverdale is much familiar with from his sojourns in England from time to time. I am sure he has enjoyed in a local pub some Strongbow or Woodpecker cider.
Those are the two brand names it was hoped would be produced here through arrangements with the local wineries, Jordan and Ste-Michelle Cellars and Andrés Wines. They are the two wineries the member for Riverdale referred to that have applied to import the concentrates so they can produce the singularly distinct English ciders.
With regard to the concerns of the member for Kent-Elgin, who is fearful that we would be infringing on the apple producers' market here, I can assure him the importation of the cider concentrates has been given approval after consultation by our Ministry of Agriculture and Food with the Ontario Apple Marketing Commission and the Wine Council of Ontario as well as the Ontario Fresh Grape Growers' Marketing Board.
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All three of them have been consulted prior to moving to this stage. It is interesting to note that it was by way of letter from the Ontario Apple Marketing Commission back in 1980, when this concept was first pursued by one of the English cider manufacturers, that a letter to the Ministry of Agriculture and Food from the Ontario Apple Marketing Commission gave its approval and blessing to this undertaking. I would just quote one paragraph from that letter, which is most significant. "In giving their support to the proposed change, the commission welcomed the opportunity of increased apple sales and employment."
Thus, it was with the blessing of the Ontario Apple Marketing Commission and the support of the wine council that these approvals were given by our Ministry of Agriculture and Food, because they will contribute to the wellbeing of our local wine industry.
The same restrictions on foreign concentrate are imposed here as exist under the regulations under the Wine Content Act. It is proposed that the new cider would have the same limitation as other wines of 30 per cent import concentrate. There is consistency throughout here. It will be of benefit to the apple-growing industry in Ontario.
Mr. Renwick: Why did you not limit it to importations from the United Kingdom?
Mr. Williams: In fact, that is what will transpire. In response to the interjection by the member for Riverdale, I acknowledge the bill may not specifically state that but that will be the end result. I can assure the member this amendment will deal only with English ciders and importation of concentrates from England.
I shall now turn to the concern raised by the member for Prescott-Russell with regard to section 6 in the bill, a concern also raised by the member for Riverdale. The issue is with regard to appeals under the Ministry of Consumer and Commercial Relations Act, now incorporating the Liquor Licensing Appeal Tribunal provision that an appeal under this section may be made on questions of law only.
The member for Riverdale suggested this was a change but in fact we are simply maintaining the status quo. Under the Liquor Licence Act, the law has read and does read in this way at this time. The distinction is being made here simply because the procedure is different.
As we were discussing a few moments ago, one takes a second-stage approach or second stage of appeal under the LLAT that does not apply under the Commercial Registration Appeal Tribunal, which would be dealing with an appeal in the first instance. If one were continuing to operate under the Liquor Licence Appeal Tribunal as at present, one would be in a two-stage situation. That is to say, one would go to the board first to apply for a licence, then to the tribunal if unsatisfied with the decision of the board.
After two airings of the facts, it was felt there would be a thorough and complete airing of the factual aspects of the application. Thus, it would be only in the case of a point of law that it would be justified to proceed beyond the tribunal level.
The distinction that exists now will simply be continued. There is no substantive change being made here, as might have been suggested by the member for Prescott-Russell and the member for Riverdale.
Mr. Boudria: In other words, that section applies only to the courts.
Mr. Williams: Yes, right.
With regard to the matter raised by the member for Prescott-Russell, expressing some concern with regard to liquor permits on Indian reservations, it is my understanding that the federal legislation predominates here. Only if provincial legislation, which is general in nature, is not inconsistent with the federal legislation -- and I might hasten to add that the federal legislation deals also with liquor-oriented matters -- then, of course, the federal would prevail. In any event, at the present time liquor permits and matters of liquor and consumption come under the federal Indian Act.
Mr. Boudria: What about the appeal situation?
Mr. Williams: On the matter of the word "municipality" and its lack of application to Indian reservations, which was raised by the member for Kent-Elgin, this is a matter of concern to us. It is a matter that is currently being reviewed by our ministry through the Liquor Licence Appeal Tribunal. The matter is being given consideration at this time.
Mr. McGuigan: What if the bill is passed in its present form? What would that do?
Mr. Williams: Dealing with this point, which I think is a valid and well-raised point, if we can sort out those differences we will bring in appropriate amending legislation in due course. However, I do not think there is need or cause to hold up this housekeeping legislation until that is resolved because that may take a bit of time. I am not suggesting it will be settled this week or next, but it is certainly something I can assure the members the ministry and the Liquor Licence Board of Ontario are taking a close look at.
The member for Riverdale was talking about section 5 of the bill, I believe, and in particular section 17. Again, we are speaking from an historical point of view where the decision of the Liquor Licence Appeal Tribunal has been final. In looking at subsection 11(1) of the Ministry of Consumer and Commercial Relations Act, it is provided, as the member for Riverdale pointed out, "Any party to proceedings before the tribunal may appeal from its decision or order to the Divisional Court in accordance with the rules of the court."
9:10 p.m.
That does exist as it relates to all of the laws that are governed by our ministry and come under the jurisdiction of the Commercial Registration Appeal Tribunal. Again, we have to maintain the distinction that exists with regard to the process and procedures that prevail currently under the Liquor Licence Appeal Tribunal which will now be absorbed under the more comprehensive Commercial Registration Appeal Tribunal. I think we still have to maintain some distinctions there as to the procedure because of the two-stage process that applies under the present liquor licence procedures. It does not apply with these other pieces of legislation that are governed by the activities and procedures of the Commercial Registration Appeal Tribunal.
The member for Riverdale queried the reason for section 39. This is section 7 of the bill. I would point out to him the reason for introducing the clause, "regulating and controlling the possession of liquor sold under any class of licence or permit," is introduced in the legislation to recognize the fact that we have made some changes with regard to the sale of beer at sports events.
Without this amendment, of course, we could not limit the possession of beer at a stadium to a maximum of two containers per person as is proposed. That is the reason behind this seemingly innocuous section. It has real purpose and meaning. To remove that cloud of uncertainty and to assure the member for Riverdale, this is being done to complement other changes that are being made to permit the reasonable sale of beer at professional sports activities at the stadiums.
This amendment will accomplish that in a way in which we hope there will be a continuing moderate consumption of beer in the ball parks. I can assure the member there are no "jokers" in the pack.
The member for Erie expressed concerns about foreign competition, cartels and monopolies as dealt with under federal legislation. He seemed to be relating those concerns back to section 1 of the bill dealing with the importation of concentrates for the making of English cider here.
Having explained the rationale behind permitting that, I think it will be clear to him that we are not allowing foreign competition to come here or trying to give exclusive rights to the Ontario wineries; we are simply trying to maintain a balance that has existed between the importation of grapes and other concentrates to assist the Ontario wine producers in making top-quality products. The intention of the legislation is not to create a monopoly or a cartel of sorts, but rather to enhance and improve upon the economy of the wine industry in this province.
I think I have addressed all the concerns raised by the members. If I have overlooked any point or concern which was raised, I would be pleased to have it drawn to my attention. Otherwise, I hope I have adequately satisfied the members with regard to their concerns, in explaining the matters behind some of the amendments which may not have been apparent on the surface of the bill as far as the specific wording is concerned.
Motion agreed to.
Bill ordered for third reading.
MINISTRY OF CONSUMER AND COMMERCIAL RELATIONS AMENDMENT ACT
Mr. Williams moved, on behalf of Hon. Mr. Elgie, second reading of Bill 12, An Act to amend the Ministry of Consumer and Commercial Relations Act.
Mr. Williams: Mr. Speaker, today I introduce for second reading certain housekeeping amendments to the Ministry of Consumer and Commercial Relations Act. Essentially, they are divided into two parts.
The first relates to procedural and operational issues concerning the ministry's Commercial Registration Appeal Tribunal. The second will permit ministry employees, under certain specific circumstances, to share relevant information with other ministry staff or with a peace officer.
Mr. Boudria: Mr. Speaker, I will speak very briefly on this bill to indicate our support. This is a companion bill to the previous bill and, as such, I can see very little controversy. We intend to support the legislation.
It is merely technical in nature. If there was very little controversy with the previous bill, there seems to be quite a bit less with this one. It is a companion bill to formalize the Commercial Registration Appeal Tribunal and the other feature mentioned by the parliamentary assistant with regard to the sharing of information with peace officers.
Mr. Renwick: Mr. Speaker, on Bill 12, I have no specific concerns about the alteration in the structure and in the refinement of some of the rules applying to the tribunal, which is the greater portion of the bill.
I would ask the parliamentary assistant the reason for section 3 of the bill which will add the new section 14 to the Ministry of Consumer and Commercial Relations Act. What led the ministry to believe it was essential to have a statutory change to permit one employee of the ministry to disclose to another any information related to the administration of an act for which the minister is responsible?
What was the barrier it saw? What legal problem was it faced with that would require such amendment to the bill? It did seem to me to speak for itself that there would have been no such necessary prohibition. I would ask for an explanation of that.
Why is the additional clause which permits the communication of information to a peace officer in the event an employee believes a criminal offence has been committed, limited to a criminal offence and not extended to also include a provincial offence?
9:20 p.m.
Also, it has been immensely broadened by providing in subsection 2 of the proposed section that "an employee of the ministry includes an employee of any agency, board or commission for which the minister is responsible."
There must have been some specific situations that were of concern to the ministry; there must have been a concern about the extent and degree of the authority that was available under the statute. I would like to know precisely what prompted and motivated the ministry to decide it must have this substantial change in the act governing the minister's operations.
Mr. Williams: Mr. Speaker, the disclosure of information, of course, has always been a sensitive issue in government. In recent times the whole matter of freedom of information and privacy of the individual has been very much in the forefront and is a matter that has been under discussion in this House in recent weeks -- in fact, in recent days. I really think the essence of this legislation, with regard to section 3 in particular, speaks to that situation.
The fact of the matter is that it was felt that personnel within different ministries were duty bound not to exchange information between themselves because there was no specific statutory authority so to do. In order to abide by what they felt was an oath of office, if you will, as civil servants carrying out their duties and responsibilities within their given ministries, they felt confined to sharing matters of privilege within their own ministries and among their own personnel who are charged with the responsibility of dealing with any particular matter before them at any given time. The employees felt that to do otherwise would be in violation of their code of ethics as civil servants.
It was felt that in order to remove this impediment, which it is in some circumstances, civil servants had to be certain they would not in any way be chastised or prosecuted for sharing this information with personnel in other ministries that might be directly involved in a matter that is of mutual concern to two or more ministries.
The situation becomes even more difficult and sensitive in situations where there may be a suggestion that some illegal or criminal activity might have been going on to which the civil servant or the ministry in question had been privy. But they felt they had their hands tied in being unable technically to share that information with the law enforcement agencies around the province.
As far as provincial offences of a civil nature are concerned, they would be handled under the act where the information was ascertained. But if criminal intent has been shown, up until now there were these impediments that prevented the civil servants from discussing these matters freely with the police. What the member for Riverdale (Mr. Renwick) reads into the section as to what it is about is exactly that.
On the face of the section, it clearly spells out what broader rights are being given to the civil servants. I can give assurance to the member for Riverdale that the sharing of this information will be done with discretion. It has to apply in the broader context of permitting such sharing of information to include employees of an agency, board or commission for which the minister is responsible, whether it is the Liquor Licence Act we were talking about earlier in dealing with the Liquor Licence Board of Ontario or the Liquor Control Board of Ontario, whatever the case may be.
As an example of confidentiality provisions the member for Riverdale might find of interest, I cite those contained in the Real Estate and Business Brokers Act. I refer the member to section 16 of the act as an example of the confidentiality provisions. I might read this as an example.
I believe the member for Riverdale was involved with this legislation at the time it was formulated. He might well recall this particular section. Subsection 16(1) says: "Every person employed in the administration of this act, including any person making an inquiry, inspection or an investigation, shall preserve secrecy with respect to all matters that come to his knowledge in the course of his duties, employment, inquiry, inspection or investigation and shall not communicate any such matters to any other person except,
"(a) as may be required in connection with the administration of this act and the regulations...; or
"(b) to his counsel; or
"(c) with the consent of the person to whom the information relates."
As the member for Riverdale will be aware in recalling that section, it is a confining type of confidentiality provision that exists not only in this bill but in other legislation as well. Civil servants have rightly felt straitjacketed in certain respects in sharing information that is germane and extremely important to some matters that may be before a ministry. By preventing them from sharing this information with other ministries, it impedes appropriate administration at the governmental level. We think it would not be in the best public interest so to do.
Motion agreed to.
Bill ordered for third reading.
9:30 p.m.
House in committee of the whole.
CORPORATIONS INFORMATION AMENDMENT ACT
Consideration of Bill 6, An Act to amend the Corporations Information Act.
Sections 1 to 3, inclusive, agreed to.
On section 4:
Mr. Chairman: Mr. McClellan moves that section 4 of Bill 6 be amended by deleting the first two lines and substituting therefor the following:
"4(1) A corporation or an extraprovincial corporation shall file the following information:"
And by further adding:
"8. The name, head office, location and principal place of business of any corporation and the name and residency address of any person,
"(a) which holds, directly or indirectly, 10 per cent or more of any issues of share capital of the corporation, or
"(b) in which the company, directly or indirectly, holds more than 10 per cent of any issue of share capital, and
"(c) the percentage of shares held in each case.
"9. Where the corporation is a corporation with share capital, whether or not,
"(a) each director is a resident Canadian,
"(b) each director is a director of any other corporation related to the corporation as determined under the Corporations Tax Act and, if so, the name and head office address of such related corporation and the jurisdiction of its incorporation.
"10. Within six months of the end of its fiscal year if either its assets or its sales in Ontario in the fiscal year exceed $1 million, an annual report for that fiscal year, which shall include a statement of sales, income and profit and a statement of assets and liabilities as of the end of that year in a manner to be determined by regulation."
And that section 4 be further amended by adding thereto the following:
"4(2) Any material change in the information filed with the ministry under paragraphs 1 to 9 of subsection 4(1) of the bill shall be reported to the ministry within 30 days of its occurrence."
Mr. McClellan: Mr. Chairman, as I mentioned during the debate on second reading, part of the amendment before the members has already been accepted by the Legislature. That was a long time ago, in 1972. The sections I refer to deal with the requirement to disclose, first, whether or not a corporate director is a resident Canadian; and second, whether a director is a director of any other corporation.
You will notice, Mr. Chairman, that I have moved this amendment to cover not just extraprovincial corporations but also Ontario corporations. So in a sense we are going back to a debate that has taken place in this Legislature a number of times going back at least to 1972 and, I am sure, before that. It has to do very simply with whether or not corporations that are registered under the laws of this province, whether they are extraprovincial corporations or Ontario corporations, have an obligation to disclose information that identifies the beneficial owners of the corporation and whether they have an obligation to identify their relationships with other corporations.
As I say, the part of our amendment that is set out in paragraph 4(1)9 of my amendment to the bill has already been dealt with by the Legislature in 1972. At that time all three parties under the glorious leadership of the Honourable John Clement accepted the notion that corporations should register information as to whether or not their directors are resident Canadians and whether they are directors of any other corporations.
Again, that notion was supported by all three parties. However, it was never promulgated into law, which leads one to speculate as to what kind of internecine strife took place once Mr. Clement returned to the cabinet table. I suppose that is lost in the shroud of history.
We had another debate in 1976 and, for purposes of tonight's debate, I have simply incorporated the amendments that were moved in 1976 into the composite amendment I have just moved.
The amendment is really quite straightforward. Simply, it requires a corporation to identify itself and its owners and to reveal a certain amount of very basic information with respect to its financial activities. Quite frankly, it strikes me as ludicrous that the government, having gone through the fiasco of Cadillac Fairview Corp. Ltd., to cite the most recent illustration, could still be reluctant to support the principle of corporate disclosure.
I want to use the Cadillac Fairview transaction by way of illustrating the concern I am trying to get at with my amendment. We have to understand and remember that the Cadillac Fairview transaction was all about the use of the secrecy provisions in our legislation which governs and regulates corporate activity.
Mr. Boudria: It is more than that.
Mr. McClellan: The member will have his opportunity to speak and participate in the debate.
Mr. Roy: It is not like the NDP to interrupt either.
Mr. McClellan: It is nice to see the member for Ottawa East here. Is night court not about to go into session?
Mr. Roy: It is okay. I am keeping an eye on you. This is better than night court.
Mr. Ruston: Jealousy will get you nowhere, Ross.
Mr. Conway: But at least he is not in Florida.
Mr. McClellan: This is true. I wish I were in Florida.
The Cadillac Fairview transaction, Mr. Chairman, just to refresh your memory very briefly, involved the sale of the Cadillac Fairview apartments, first to Greymac Credit Corp. for $270 million, and people more or less knew who Greymac was. They knew who the owners and principals were. It was sold again to Kilderkin Investments Ltd. for $312.5 million and then it was sold for $500 million to 50 numbered companies. These numbered companies were all registered under Ontario's legislation and were complying with the provisions of Ontario's laws.
There is only one flaw. Nobody knows who owned the numbered companies. Nobody knows who owned the Cadillac Fairview apartments. The 30,000 tenants of Cadillac Fairview had not the slightest idea who the owners were of the 50 numbered companies who paid $500 million for the largest single group of apartment buildings in Ontario.
The government is still in front of us saying there is no need to toughen up our corporate disclosure laws. I have to remind government spokesmen of the seriousness of the scam that was perpetrated by the authors of the Cadillac Fairview transaction, which involved the use of the secrecy provisions of our corporate registration legislation. I will just cite quickly the conclusions from chapter 12, page 239, of the Morrison report by way of reminder as to what it was that these people were up to.
"After examining under oath Rosenberg, Markle and Player and a number of other officers, directors, employees and advisers of the companies and other persons, the inquiry has concluded that the objective of the Cadillac Fairview transaction was to enable the principals who controlled the three trust companies (including Player) to withdraw $152 million from those companies primarily for their own purposes."
9:40 p.m.
They were trying to get at the money in the trust companies, which they did, for their own purposes. On page 240 it says: "As already stated, Player, Mastin and Markle must have known the true nature of the arrangements between the principals, if any, behind the number company purchasers and Kilderkin."
In other words, it is entirely unclear and it remains a complete mystery after a royal commission, after all of the hubbub and hullabaloo, as to whether there are any principals behind the 50 numbered companies. These were the companies which ostensibly purchased the largest group of apartment buildings in Ontario, for all practical purposes the landlords for some 30,000 citizens of this province. It is entirely unclear, because of the imbecility of our corporate disclosure legislation, whether there are any principals behind any of the 50 numbered companies.
The government still cannot tell us whether there are or who they are. Is it Rosenberg, Player, Mastin, Markle and company who own the 50 numbered companies? Is it Mr. Qutub? Is it the man in the moon? Is it the cosmos of the outer galaxy? Nobody has the slightest idea who is behind the 50 numbered companies. The government stands here again tonight quite prepared to say: "It is none of anybody's business who owns the corporation. This is part of the sanctity of the free enterprise system and the sacred rights of the individual." It talks as though a corporation had the same human rights as those that attach to a person.
Mr. Roy: Once we get freedom of information there will be no problem.
Mr. McClellan: No, that will not help at all, because the government does not have the information. The member for Ottawa East says that once we get freedom of information this will solve the problem. The problem is that the information is not registered with anybody. There is no requirement to disclose who owns a corporation, how many shares they have, whether they own other corporations, whether they are Canadians or whether they come from the fourth galactic empire.
It really is science fiction that this could be happening in this province, that the largest single group of apartments in our province could be sold, resold, flipped and then finally end up in the ownership of 50 numbered companies. Nobody had the slightest idea of who they were, who was behind them or what their intentions were, and 30,000 people were left in the most precarious kind of position. Of course, that does not even begin to deal with all the ramifications of this crazy episode.
I return again briefly to the concluding chapter of the Morrison report with respect to what this whole scam did to some of the most prestigious financial institutions in the province, Seaway Trust Co. and Seaway Mortgage Corp. "Seaway Trust, at January 7, 1983, had no proper borrowing base because its assets were substantially overstated. Additionally, its records and documentation were incomplete and its accounting system was seriously deficient." And they were at risk.
This is what the Morrison report has to say about Greymac Trust Co. and Greymac Mortgage Corp.: "As far as the Greymac companies are concerned, the inquiry has come to the same conclusion as for the Seaway companies, that is to say that it was only a matter of time before both Greymac Trust and Greymac Mortgage failed."
With respect to Crown Trust Co., reading from page 242 of the concluding chapter, the Morrison report states; "Crown Trust was presumably in a sound financial position at October 7, 1982. By December 31, 1982, its shareholders' equity had been substantially lost leaving it with virtually no borrowing base."
Again, another financial institution which had been in a very sound position had been brought to a very precarious state of affairs by virtue of the fact that -- going back to the point I started with -- the principals in the Cadillac Fairview transaction were motivated by a desire, pure and simple, to extract $152 million from the trust company to use for their own purposes, using the device of the secret numbered company as their modus operandi.
They perfected that apparatus in a number of smaller and less significant transactions. Once they had practised it a number of times and were ready for the really big leagues they unleashed their tactic, which involved the use of the secrecy provisions of Ontario's regulatory legislation.
Mr. Boudria: It was regulatory failure.
Mr. McClellan: My colleague interjects that it was a regulatory failure. Of course it was. Nobody disputes that for a second.
There is also a huge hole in our legislation that makes it impossible for the regulatory agency to know, in the first case, whether a transaction such as the final flip to the 50 numbered companies was an arm's-length transaction, whether there were, as the inquiry said, any principals behind the 50 numbered companies or whether it was somebody from the fourth galactic empire, somebody in Saudi Arabia or whoever. It is absolutely ludicrous.
Mr. Laughren: Or from Etobicoke.
Mr. McClellan: No, not from Etobicoke; perhaps somebody from eastern Ontario.
I am mystified the government fails to move quickly after having before it a scam that has led to a serious undermining of the most sacred financial fiduciary institutions of Ontario. Having brought Bay Street into the ministry to run it for a while until Bay Street could get it sorted out, having sent the Bay Street boys back to Bay Street, I suppose the government will now go back to sleep.
Mr. Conway: You sound as though Crown Trust might hold your mortgage.
Mr. McClellan: It does not. I am delighted to be able to tell the member for Renfrew North (Mr. Conway) that my mortgage is with a credit union, and not the Toronto Board of Education Staff Credit Union either.
We have had the most gruesome illustration that would be possible for the mind of some deranged science fiction writer to compose for us, laid out and acted out here and outside the Legislature over the course of the last three years. The government still stands there like the proverbial ostrich with its head in the proverbial sand saying there is absolutely no need for any kind of corporate disclosure legislation.
By adopting that attitude, and I say this to my dear friends in the Liberal Party who I suspect on this issue --
Mr. Mancini: You do not have any friends here, Ross.
Mr. McClellan: I certainly do. I am very selective, but I do have some friends in the Liberal Party. I have to say I am suspicious that their traditional ideological biases may make it difficult for the members to support our amendments, because I also recall that in 1976 during the minority period, alas, the Liberal Party sided with the government and voted against the amendments that are in front of the House again this evening.
I hope the members have learned their lesson. I hope they have seen the kind of thing that can happen when people are able to use the secrecy provisions of our corporation legislation as a cloak to mask underhanded motivations and basically dubious transactions.
9:50 p.m.
The Cadillac Fairview Corp. episode is simply the most flagrant and glaring that has come to our attention in the last 24 months or so. But it is not unique. The shenanigans of numbered companies are legion and legendary in our province.
The problems of monopoly concentration cannot even be understood, let alone dealt with, unless we have legislation that indicates whether directors of one corporation are also directors of other corporations.
The kind of concern the member for Huron-Middlesex (Mr. Riddell) has raised with respect to foreign ownership of agricultural land cannot be addressed when there is no requirement for corporations to identify themselves.
Before I conclude, I want to deal with the concern raised by the member for Prescott- Russell (Mr. Boudria). He seemed to imply that this amendment was somehow designed as an attack on the family farm. It is not. We share the kind of concern raised so well by the member for Huron-Middlesex.
I can recall in the middle-1970s that Stephen Lewis raised precisely this concern. I have a recollection the member for Brant-Oxford-Norfolk (Mr. Nixon) did not accept the notion that there was any significant danger to be posed through foreign ownership of agricultural land. That may be a canard which I am sure he will want to correct.
It is certainly true that the opposition at this time is united in its concern about the consequences of foreign ownership of farm land, as the member for Huron-Middlesex pointed out earlier today. It opens up the prospect of the family farm being replaced by a group of tenant farmers who are working for offshore farm land owners.
Again, how we can get any handle on the extent of the problem without corporate disclosure legislation is beyond me. I do not pretend any kind of mastery of farm issues or agricultural policy. We are not intending to cast a net that would catch the family farm in our amendment.
If we have done that through inadequate draftsmanship, it is not beyond the wit of draftsmanship to exempt the Ontario family farm from the legislation. That certainly would be our intention. We would welcome any amendments if there is a concern that the combined assets sale of $1 million is inadequate to exempt the family farm. A specific exemption can be incorporated in the bill to take care of that.
I think it is important, however, that the legislation provide a vehicle which permits us to monitor the extent of foreign ownership, not just of industrial manufacturing and business corporations but also of agricultural corporations which are, as has been pointed out, an increasing threat.
With these thoughts, I invite the other members of the assembly to respond to the amendments we have put forward and to engage in some debate on them. I hope the parliamentary assistant's mind is not completely closed to accepting some of the main ideas set out in the amendment we have moved, perhaps even the whole thing.
Perhaps the parliamentary assistant has a desire to consult with the Minister of Consumer and Commercial Relations (Mr. Elgie) and to come forward with a counterproposal with respect to information disclosure. However, I think it is quite inadequate to leave things as they are set out in the bill with, first, basically no requirement for any meaningful ownership disclosure with respect to Ontario corporations of any kind, and second, only the most limited requirement for disclosure with respect to extraprovincial corporations.
As I said earlier, once an extraprovincial corporation has complied with the terms of Bill 6 and supplied all seven pieces of information, we still do not have the slightest idea who the owners are, whether they are resident Canadians, whether the directors are directors of other corporations, what their relationships are or what the financial activities of the corporation are in a general kind of way.
The minister is prepared to give us an amendment that would identify the provincial agent. In most instances, it would be their lawyer. However, that does not tell us what they are. It does not tell us anything about them except who their lawyer is, and that information is generally available. If I am not mistaken, we know who the lawyers are for the numbered companies and for Cadillac Fairview. That does not tell us anything. It does not tell us what they are. It does not tell us what their relationships are with other companies.
I think this is quite inadequate. It is not good enough to say: "This is a companion to Bill 5. It is very narrowly drafted, and it is not meant to be as broad as the member for Bellwoods was trying to make it." That is not an answer. It is just saying the government has not confronted the issue of the need for modern corporate disclosure legislation in this province.
In Bill 6, the government has an opportunity to do precisely that. If it is not happy with this language for Bill 6, we invite it to come forward with a counterproposal. I hope it will not impose the customary, post-1981 veto on this most worthy amendment.
Mr. Boudria: Mr. Chairman, I would like to speak briefly on this amendment. As I indicated this afternoon, our party will not favour this amendment with our support. There are various reasons I say that.
Some hon. members: Ah.
Mr. Boudria: I hear a few "ahs" from the left-hand side of this House. I would like to hear the comments of some of the members to my left on this amendment. I would like to hear the comments of the agriculture critic of that party. I would like to know what he thinks of this amendment, but he is not here at this time. I would like to hear the comments of our colleague the member for Riverdale (Mr. Renwick), and I hope he speaks to this amendment. I would also like to hear the comments of the member for Lake Nipigon (Mr. Stokes), who I understand is the tourism critic for that party. I would like to know how he feels about this amendment.
When I hear the noises coming from the left of where I am standing, I hope the members speak afterwards as to how they feel this amendment would be beneficial and what would be some of the harmful side-effects caused by this.
In looking at this amendment, I am not a lawyer. I do not apologize for that because we must never apologize for not being lawyers, I am told. I am looking at it from a layman's point of view. That is what I am, in legal matters at least, and perhaps several other things. Giving it a cursory review, I find there are many things about this amendment which are offensive. Let me give a few "for instances."
This afternoon I mentioned that I was concerned about the effect this would have on an incorporated family farm, because a farm is capital intensive. I will strengthen that argument for a few moments, and then I will proceed with other concerns I have about the amendment.
10 p.m.
Looking at an incorporated family farm that has assets exceeding $1 million in one year -- and Mr. Chairman, being the knowledgeable person you are, you will know that most family farms are in that situation because they are capital-intensive businesses -- this incorporated family farm would have to submit an annual report for the fiscal year, including a statement of sales, income, profit, assets, liabilities and so forth, and it would have to state who the beneficial owners are beyond 10 per cent of that enterprise.
We are discussing various issues in this Legislature, including freedom of information and the protection of privacy. Surely the small business operator in the province is entitled to some privacy for the management of his own personal and family-type small business. Members of this party have long spoken for the small enterprises in the province, for the farms and the small businesses.
The small, independent grocery store -- the type that will shortly be selling wine and beer -- properly located in one of our towns, has a large real estate value because of its location. The stock on hand is very expensive. The cost of food, the stock and the fixtures is very expensive. It is quite conceivable their total assets exceed $1 million, including real estate. That is not abnormal.
Why should we ask the small grocery store operator to provide a statement of sales, income, profit, assets, liability, and so forth, to this government at the end of the year? Is it not important to preserve the sanctity of the small businesses we have?
In the tourism sector, a motel or a campground is very capital intensive. Large areas are involved, sometimes with many buildings, swimming pools and facilities for horses. They are very expensive things which have been accumulated over many years, usually by a family group, sometimes incorporated jointly among father, mother and three or four children with shares of those small businesses divided between them.
I fail to see what disclosing all that information is going to achieve. Clearly this is a situation in which we are trying to kill a mosquito with a sledgehammer. I recognize some of the concerns raised by the member for Bellwoods (Mr. McClellan) with respect to the Cadillac Fairview deal and others. I sat on that committee for weeks listening to some of the testimony.
Mr. McClellan: No, you do not. You do not recognize them at all. You are trying to obfuscate and confuse.
Mr. Boudria: We are hearing obfuscation and confusion. This is the same member telling us this is the be-all and end-all to solve the problems of Cadillac Fairview. We know we are not going to solve the Cadillac Fairview issue, as it involved the appraisal of the London armoury pretending it was a Days Inn by an appraiser whose qualifications only he understood.
How is this amendment going to solve those kinds of evaluations? We all know it is not. Those of us who served on that committee know this kind of amendment will not solve the vast majority of the Cadillac Fairview problems or anything else we heard in the testimony about the failure of some of those trust companies.
Again we are hearing the member for Bellwoods read from the Morrison report and tell us what bad shape the books of Seaway Trust were in at the time Morrison and friends moved in to take over. That is quite possible. It is true; we learned that in our deliberations on the committee. What on earth does this amendment do towards straightening out the books of Seaway Trust? I do not understand that at all.
Mr. McClellan: Truer words were never spoken.
Mr. Boudria: This amendment does nothing to correct many of the inequities we have heard about during the fall of the great trust affair.
I have been doing some reading on the issue; I have participated in most if not all of the committee meetings as a member of the committee. I think it is very interesting that if you get a chance to look at the draft report we have prepared, which will be tabled in this Legislature shortly, you will not find those kinds of measures mentioned.
None of these things was contemplated by members of the committee, and I challenge the member for Bellwoods to come up with a recommendation in our report that says we need this kind of amendment in order to correct the fall of the trust companies. Members of his caucus have copies of that report, and I challenge them to bring it out. We had an all-party committee look into this matter, and this kind of solution was not brought forward by the committee in its wisdom when we made our recommendations.
I did indicate this afternoon that we have many concerns regarding foreign ownership of farm land, and there are a variety of ways in which the government is going to have to address that. Let me illustrate some of them to the members. We need provisions by which the inventory of class 1, 2, 3 and 4 farm land in this province will be precluded from sale to foreign investors. This has nothing to do with the issue of whether investors should buy a portion of land that is not class 1, 2, 3 and 4 farm land; that is a different issue altogether.
As I said this afternoon, we in this party have been expressing concern for a number of years about the foreign ownership of productive agricultural land in this province; we are very concerned about that and we have been raising it in this Legislature for a number of years. I do not see how this amendment in itself would correct this kind of situation.
On behalf of our party, I am indicating that I cannot be convinced by the arguments set forth by the member for Bellwoods that this amendment would indeed be beneficial to the people of this province. I think the harmful effects far outweigh any good that may come of it.
I see the member for Nickel Belt (Mr. Laughren) nodding, and I am glad to note that I have finally persuaded him of the fact that this amendment does not seem to have the value at least one of his colleagues believes -- not all, because I certainly do not think all of his colleagues approve of this amendment; but I am glad to see the member for Nickel Belt is now on side and will be voting with us against this amendment.
I just wonder whether members are advocating a division on this issue. If there were a division, it would be interesting to see just how the members of that caucus would vote on this particular amendment. I have a feeling they would not all be on the same side, and perhaps I should just leave it at that.
10:10 p.m.
When we are dealing with this amendment, we are not looking only at extraprovincial corporations. As the member for Bellwoods said in his opening remarks, he is of the opinion that corporations or extraprovincial corporations should be subject to the amendment he proposed tonight. If there is any merit in this for an extraprovincial corporation, particularly in the area of an extraprovincial corporation purchasing class 1, 2, 3 and 4 agricultural land in Ontario, there is certainly no merit in having a provincially incorporated corporation subjected to this amendment.
In summary, on behalf of our party, although we are especially concerned about the issue of farm land being sold to foreign interests -- and we are of the opinion that publicly traded corporations should be subjected to disclosure, which is only good and proper -- we think the penalties people would pay through this amendment make it totally unacceptable. Principally, they would be the small business operators of this province. I am looking forward to hearing the comments of the parliamentary assistant on this.
Hon. Miss Stephenson: Mr. Chairman, on a point of privilege and order: I wonder if I might bring to the attention of the House that the House leader of the government party, the Minister of Intergovernmental Affairs (Mr. Wells), is today celebrating three decades of marital bliss. Since that is such a significant celebration, we thought the members of the House should be aware of it, and here he is dutifully representing his constituency, his ministry and his responsibility in the House.
Mr. Williams: Mr. Chairman, as was mentioned at the beginning of the debate this afternoon, there is a certain hazard in dealing separately with companion legislation. Clearly, this has occurred this evening because we tend to lose sight of the fact that Bill 6 is complementary to Bill 5 which deals exclusively with extraprovincial corporations.
The member for Bellwoods made it quite clear in introducing his amendment that he was now exercising a bit of largess in deciding to expand his original amendment and that of his colleague the member for Riverdale, who was about to bring forward a similar amendment in the fall of last year before the debate on this legislation was cut off.
At that time, the amendments were limited to extraprovincial corporations, but with this third revision that came forward this evening, we now find, as the member for Bellwoods stated, they would like it to apply across the board to all corporations. One can see a rather convoluted form of consistency in at least applying it to all corporations, even though we are talking only about extraprovincial corporations here, and so section 4 states.
While they are trying to apply a bit of consistency, they are losing sight of the purpose of this legislation in that it was designed to deal exclusively with the extraprovincial corporations.
I also note that in the first amendment they have applied a bit more largess in moving from a five per cent to a 10 per cent factor. They have broadened the base considerably in the type of disclosure information they are looking for. From a philosophical and a practical point of view, as soul-searching as it has been, we have not been able to find ways and means of accommodating the member for Bellwoods in introducing this type of amendment.
It was interesting to hear his somewhat broader elaboration on the historical evolution of the Corporations Information Act. He did get to the point of acknowledging that the amendment in 1972 was never proclaimed into law. I appreciate his having acknowledged that fact. Unfortunately, he did not go on to elaborate upon the matters the member for Prescott-Russell touched upon, and that is what happened subsequently in 1976.
I must say the member for Bellwoods has been remiss in not acknowledging the authorship of his colleague the member for Riverdale on some of those amendments in 1976. The member for Riverdale persisted in his efforts to identify resident Canadian directors in the legislation and to identify the name and residence address of any persons who would hold, directly or indirectly, five per cent or more of any issued share capital of the corporation, or in which the company, directly or indirectly, holds more than five per cent of any issued share capital. The percentage of shares held in each case would be disclosed. This was defeated at the time, as the member for Riverdale will recall. By nodding his head, I see he does.
The official opposition did not accede to that amendment for the reasons stated by the member for Prescott-Russell this evening. He should continue to be consistent in opposing legislation that would be an onerous burden on the corporations and companies of Ontario.
When the members of the third party talk about corporations, they seem to have fixed in their minds the General Motors of this world. They forget about the small corner store operators who would be caught in this net of disclosure. It would certainly work prejudicially against the small private business corporations that are trying to eke out a living in this highly competitive, free enterprise world.
There is a distinction to be made that I do not think the member for Bellwoods made this evening with regard to offering and non offering companies. There are different ground rules that exist. With the offering companies, we have procedures available by way of disclosures to the Ontario Securities Commission, so the information of importance to the investors and shareholders in those companies has to be disclosed. They have to satisfy the regulatory agency in the form of the Ontario Securities Commission.
Clearly, the proposed amendment goes far beyond the intent and purpose of this legislation and far beyond what is realistic as far as encouraging both domestic and extraprovincial corporations to continue to do business in Ontario is concerned.
I will make one further observation with regard to subsection 4(10) of the amendment put forward by the member for Bellwoods, which asks for a financial statement to be filed by companies exceeding $1 million in sales. This is far below the standards that prevail at the moment.
I think the member for Riverdale participated in the discussion in which it was agreed that Ontario corporations do not need to provide an audit until their assets and sales exceed $2.5 million and $5 million respectively. Now we are getting down to the cornerstore type of operation and asking them to make these onerous disclosures, which is totally impractical and inconsistent with what we are trying to accomplish in the legislation.
10:20 p.m.
Unfortunately, time does not permit me to go more deeply into some of the other matters touched upon by the member for Bellwoods. I would point out that the 50 companies he referred to in the Cadillac Fairview matter are 50 out of more than 300,000 companies doing business in Ontario, so we have to put that in perspective.
The provisions here are so onerous as really to inhibit companies that would want to do business under a corporate structure. In particular, I am sure it would tend to scare off outside corporations and offshore companies that would otherwise be interested in coming to this province to do business and not only to help improve their corporate profits but, more important from our point of view, to contribute to the economy of Ontario.
For these reasons and for others I do not have time to elaborate upon given the hour, it is with reluctance I have to say we oppose the amendment proposed by the member for Bellwoods this evening.
Mr. Renwick: Mr. Chairman, if this is the appropriate time, I would like to ask the parliamentary assistant if he is going to introduce an amendment with respect to the name and address of the agent for service in the province?
Mr. Williams: Mr. Chairman, earlier this afternoon the member for Bellwoods mentioned he was going to introduce two amendments, the second of which was a much simpler and more straightforward amendment, and one which, in discussion with the member for Riverdale and the member for Bellwoods, I suggested the government would accept.
It would be a further amendment to section 4 of the bill that would read -- and I am prepared to introduce the amendment from this side of the House -- that section 4 of the act as set out in section 4 of the bill be amended by adding thereto the following paragraph:
"8. The name and office address of its agent for service in Ontario."
I point out it simply reintroduces wording that currently exists in the present section 4 of the act, so it would not detract from what is there and, in effect, would maintain the status quo. We have no objection to that amendment being introduced and the legislation being amended accordingly.
Mr. Chairman: All those in favour of Mr. McClellan's amendment to section 4 will please say "aye."
All those opposed will please say "nay."
In my opinion the nays have it.
Motion negatived.
Mr. Chairman: Mr. Williams moves that section 4 of the act as set out in section 4 of the bill be amended by adding thereto the following paragraph:
"8. The name and office address of its agent for service in Ontario."
Mr. Renwick: Mr. Chairman, may I say how delighted I am the government was prepared to accept this amendment, because it is an absolutely essential amendment to the bill. It may well have been an oversight that it was not included in the first place, but it is necessary that anybody wishing to sue a corporation carrying on business in Ontario must be able to find a person on whom process can be served.
Motion agreed to.
Section 4, as amended, agreed to.
Sections 5 and 6 agreed to.
Bill, as amended, ordered to be reported.
On motion by Hon. Mr. Wells, the committee of the whole House reported one bill with a certain amendment.
ARBOREAL EMBLEM ACT
Hon. Mr. Pope moved second reading of Bill 14, Arboreal Emblem Act.
Mr. Laughren: Mr. Speaker, I was hoping the minister would show us a little showbiz pizzazz here tonight and put two trees on every member's desk -- at least a couple of container stocks on each member's desk.
Because of the length of time I have left, perhaps it would be best if I just read a poem by Thomas P. Murray called The Great Pine Tree.
"A great pine tree in the valley stood
a relic for so many years,
A story told so sad and so cold
that it brought the eyes to tears.
"It told how it grew from a little seed
away up to the sky,
And how birds all would rest in the fall
for points down south to fly.
"How it felt the warmth of the summer sun
as it saw the forest grow,
And then the cold when the summer is old
and the woods are frost and snow.
"It saw the Indian passing by centuries ago,
With a cunning step and steady hand
to guide both arrow and bow.
"It heard the cracks of the workman's axe
over on yonder hill,
It heard the howl of the wolf and the owl
as they roamed around the kill.
"It saw the flame of the forest fires
that swept across the plain,
How it welcomed the size of the western skies
with promising signs of rain.
"As the old pine tree grew stout and tall
the older and wiser it grew,
And stories would tell to surprise all well
if we could know what the old tree knew."
That applies in spades to the minister.
Mr. Conway: Mr. Speaker, I might thank my friend the member for Nickel Belt for reading my late grandfather's poem into the record. This is a bill that would give him a great deal of pleasure and, on behalf of the many people in the great Ottawa Valley, where the white pine has been king for a long time, I want to commend my friend the sometime resident of Westmeath township, the Minister of Natural Resources (Mr. Pope), for bringing it forward in this, the year of our bicentennial. I must say I think it is an entirely appropriate piece of legislation.
Motion agreed to.
Bill ordered for third reading.
The Deputy Speaker: It being 10:30 of the clock --
Mr. Conway: Mr. Speaker, just before you draw that to our attention, on behalf of my colleagues I would not want to miss associating ourselves with the comments made a few moments ago by the Minister of Education (Miss Stephenson). She drew our attention to the fact that this was the 30th anniversary of the marriage of the government House leader. The Minister of Education noted he spent his anniversary diligently in the public service in the Legislature. On behalf of the Liberal Party, might I extend to the government House leader our very best wishes on 30 years and on the very dutiful way in which he celebrated the occasion.
The House adjourned at 10:31 p.m.