L046 - Tue 19 Nov 1985 / Mar 19 nov 1985
The House resumed at 8 p.m.
FUEL TAX AMENDMENT ACT
Hon. Mr. Nixon moved second reading of Bill 50, An Act to amend the Fuel Tax Act, 1981.
Hon. Mr. Nixon: The bill replaces the ad valorem taxation of diesel fuel with a specific tax per unit. In the event there are to be any future changes, they will not now be automatic but will require the approval of the Legislature.
Utilizing this approach, the bill proposes that the new specific tax for diesel fuel be 9.9 cents per litre; that the new specific tax for diesel fuel used in railway locomotives be 3.1 cents per litre; and that these proposed rates take effect on the day following royal assent.
To simplify the objections and appeals process, the time allowed for the taxpayer to object to an assessment is extended from 90 days to 180 days. Provision is made to extend this time limit where circumstances prevent the taxpayer from meeting it.
The provision in the act that grants the minister the rights of entry, search and seizure for any purpose related to the administration or enforcement of the Fuel Tax Act, 1981, is repealed. In its place the corresponding entry, the search and seizure provisions of the Provincial Offences Act will apply. The warrant provisions of the latter act allow the minister to enter, search and seize only when reasonable grounds exist that an offence under the Fuel Tax Act, 1981, has been committed.
Other amendments in this bill are administrative in nature and consequential on the replacement of the ad valorem tax on fuel with a unitary tax. They include the repeal of the provision defining "taxable price per litre" and those authorizing the minister to make regulations prescribing the taxable price per litre of fuel.
Mr. Dean: This is another of the revenue measures the Treasurer (Mr. Nixon) has introduced that, although I do not want to attribute any base motives to him at all, resembles a sleight-of-hand performance in that there is great show of a benefit that is being conferred upon the consumer -- that is, removal of the despised ad valorem tax -- to distract the attention of the audience.
I might say parenthetically that ad valorem is certainly a well-tried system of applying a tax, and I believe the Treasurer commented on this himself at one other time, because it means a rate that varies according to the value of the substance being taxed. Another way of saying it is that it is a percentage tax.
None of us likes to have any percentage of our income or assets taxed away, but this certainly is a very frequently used system. We have it in our income tax; we have it in sales tax. I notice there has not been any particular suggestion that those are evil because they are percentage taxes. They may be undesirable from the standpoint of a person who hates to pay taxes, but no matter whether one takes it away from the citizen by ad valorem -- that is, according to the value, price or worth of the product or service that is being taxed -- or by saying, "You are now going to give me five cents every time you buy this item, no matter what the price of it is," it is still a way of getting tax from the public to the government for the programs the government believes the public wants.
I do not believe there is anything morally bad about taxing those who benefit in a large sense, and by that I mean the whole citizenry, for the services and products the government is able to provide to the people, we hope in a better way than we could do it singly. Not to digress too much from the topic, because I know most of the speakers this evening will not be digressing at all from the topic, there should be some consensus that the programs the government is going to pay for with these taxes are ones that are going to benefit us all one way or another.
It may happen that I never use the hospital system, for example, but I do not mind paying for hospitalization and for medical services. For one thing, purely selfishly, I might need that some time and it is good to have it there; but in a broader sense, we need these services that individuals cannot provide too well for themselves. Just imagine, for example, Mr. Speaker, if you and I happened to be on a desert island where there were no hospitals or doctors --
Hon. Mr. Nixon: Talk about the odd couple.
Mr. Breaugh: What an interesting image that is.
Mr. Dean: I was thinking of the coconut on the tree that falls down and hits the Speaker's head. Here am I, completely incapable of doing anything in a medical or surgical sense, and we are stuck. At that point I am sure the Speaker would gladly pay --
Mr. Breaugh: Why would the member want to pick a coconut?
Mr. Dean: Because there is probably some meat inside. I think that the Speaker, at that instance, would be glad to pay either an ad valorem or a straight per capita tax --
Hon. Mr. Nixon: Anything to get off that island.
Mr. Dean: Maybe even a per coconut tax.
Mr. Foulds: Maybe even an exit visa fee.
Mr. Dean: The point I am trying to make in as direct a way as possible is that we hope the things that have to be paid for by government revenues are desirable at least to the portion of the population that uses them, even if some of the rest of them may not be able to see it all directly at some time.
Further, I hope this government, as ours tried to do in years past, produces only the kinds of programs and services that cannot be provided better by the individual or by private organizations.
Mr. Callahan: Like the Liquor Control Board of Ontario?
Mr. Dean: The LCBO is a very good example, but I think that is probably for another debate.
Consequently, I hope the added revenue that the Treasurer hopes to drag in by the increase in the tax -- and I notice he is not proposing to raise the hated ad valorem tax; he is removing it, because it is such a desirable thing to do. However, he is adding on a straight value tax of 0.6 cents, I believe it is, per litre in this case, which is roughly a 6.6 per cent increase in the tax.
I do not know whether there is any rule that applies either in restraint or free-wheeling spending eras as to how much taxes should go up, in this case 6.6 per cent of an increase. It may not seem like much if we are talking about a fraction of a cent per litre, but it amounts to quite a bit if we are thinking of it in terms of what that implies about the rate at which government spending rises.
To return to my first statement, there is a little bit of almost sleight-of-hand here where it looks as though the Treasurer and the government are taking off something that is undesirable -- I believe it was a 27 per cent ad valorem tax -- and putting on only a very moderate little 0.6 cents per litre. That is hardly worth mentioning, except that it is 6.6 per cent of the price of every single litre of diesel fuel that anybody buys in Ontario.
8:10 p.m.
Members may say: "So what? I do not have a diesel car." We are coming to that car in the next bill, so do not worry. The gasoline-powered car is going to get it in the neck just as much. In fact, the percentage rate is higher. I think we should all be concerned about the tax increase, unless it can be demonstrated it is absolutely essential to the retention of our good credit rating. I think it will be difficult for the Treasurer to prove that right now.
We just have to think for a few moments about what diesel fuel is used for in Ontario. Sure, it is used for some cars, but that is more or less incidental. It is used mainly for transportation and powering the machinery of production and construction. Even though it may not be the biggest single item in the cost breakdown for the production of almost anything one might like to name, or the construction of buildings and other structures, nevertheless it is just another little grain of sand which sometimes helps tip the balance.
To elaborate slightly, I would start first with what we see most commonly, especially driving on the freeways in this province; the large transport trucks that carry absolutely everything we need these days. It was demonstrated very dramatically to those of us who were present about six weeks ago when the twin bridge of the Burlington Bay James N. Allan Skyway was opened after the two and a half years of construction initiated by the former Minister of Transportation and Communications, the Honourable James Snow of revered memory.
Mr. Callahan: Was that after the parkway or before?
Mr. Breaugh: The man is not dead yet.
Mr. Dean: One can revere people even though they are not notably dead.
Mr. Breaugh: That is not true in this case.
Mr. Dean: That is a matter of opinion and I would not want to get into an argument about personalities.
The point was, while those of us who were participating in the opening ceremony were standing at the apex of the new bridge structure, we were really impressed by the traffic of all kinds, in particular the commercial traffic that flowed over that bridge. Honestly, there were trucks of all descriptions carrying everything from automobiles to flowers.
Anything that increases the cost of transportation of the goods and makes it more expensive for the services we use is going to impact on every person in this province, and not particularly with respect to means or the ability to pay.
One goes up to the fuel pump with one's transport truck or perhaps gets it in the yard of the company from which the truck leaves. Somebody somewhere pays the extra price, whether it is the driver, the manager or the shareholders of the company. Naturally, that eventually goes into the cost charged to the person whose goods are being transported. We know what happens to goods when they get to their destination. They are either manufactured into something else and the higher costs are passed on to the eventual purchaser or they are used in a wholesale or retail way and somebody some time pays that extra cost.
We must not forget, when the cost of the item and the service goes up, another juicy little ad valorem tax goes on top of that. As I said before, nobody seems to be objecting, except in the sense that we may not like to pay taxes at all, to the fact that the sales tax is an ad valorem one that goes on top of all these other taxes, such as the extra cost of the fuel to transport the goods or allow the services to be delivered. Transportation is one aspect.
The second area upon which this will impinge is the production of food and fibre; farm products, in brief. Those who farm properly these days do not usually use any kind of tractor other than a diesel and all their other power machinery is undoubtedly powered by diesel engines. They are very efficient engines, but they require fuel. Every time a farmer ploughs his 100-acre field, harvests his crops, sprays his fruit or does anything to produce the items he is raising for sale and eventually for consumption by the people of Ontario, it is costing more.
Unfortunately, as the Treasurer well knows, the farmer does not always have the ability to pass on to the consumer the extra cost of production. if there is one place where a great deal of free enterprise still holds full sway, it is in the farming community, especially in some branches of it. It is a take-what-you-can-get-at-harvest-time market.
Frequently in years of overproduction, because the weather was particularly favourable or because someone planted too much of some kind of crop, farmers cannot even recover much, if at all, beyond the cost of production. The impact of a higher fuel cost on the producer of the fruit and fibre we need for continuing our high standard of living is going to be felt either by the consumer -- and if it is processed it then has a sales tax and heaven only knows how many other taxes put on it in between, so the increase is magnified -- or it is going to be felt by the producer, by the farmer himself or herself in lower return at the end of the year.
In an earlier debate I alluded to some years when farm producers do not make a profit.
Mr. Sargent: You can say that again.
Mr. Dean: I will. I am glad to have the suggestion from the member for Grey. There are some years when farmers do not make a profit.
Mr. McKessock: The member for Grey-Bruce (Mr. Sargent).
Mr. Dean: The member for Grey-Bruce. I am sorry, I would not want to confuse the members. Regardless of what part of the farming community one comes from, one knows that in those years when the farmer does not make a profit anything that increases the loss is just another burden that one hates to have to bear. The members on the government side, as well as on the official opposition side who are or have been farmers or connected with the agriculture community, know that the intrusion by government yet again into the day-by-day activities of the honest, diligent, hard-working and under-paid farmer is something we do not need.
The Treasurer agrees with me on that. There may be hope that during the committee session on this he will introduce an amendment that will wipe out the increase he is proposing. That would be a real achievement. It would show his heart is still in the right place.
Hon. Mr. Nixon: I thought one got this stuff tax free on the farm.
Mr. Dean: Is it tax free?
Mr. Breaugh: It was a good argument, though.
Mr. Dean: After all, the things the farmer has to buy are generally brought there by truck anyway.
Mr. Foulds: Now we see the argument come full circle.
Mr. Dean: The point I wish to stress is that all this accomplishes is to raise more revenue. We have to admit it is desirable from the point of view of the government, when it has embarked upon a program of spending that does not seem to have been completely contained in a balanced budget. The Treasurer therefore has to cast around feverishly in any direction to gather what rosebuds he can wherever they are available.
Hon. Mr. Nixon: While I may.
8:20 p.m.
Mr. Dean: Yes, spring is still a-fleeting.
I understand the revenue from the fuel and gas taxes is going to increase by $12 million in the remaining part of this fiscal year. It may not increase by quite that much if this is not approved soon. If it and the companion bill are approved, there will be an increase in revenue of $79 million in the next fiscal year.
This is not being received too favourably by a number of people who have become aware of this issue. Perhaps the average person in the province does not figure this has much effect on him, but I would like to quote very briefly from a report by a Mr. Shiller. He is not somebody with whom I am well acquainted. Edward Shiller is vice-president of public affairs for the Canadian Manufacturers' Association.
Hon. Mr. Nixon: They usually support us.
Mr. Dean: Does the Treasurer know him? The member for Dufferin-Simcoe (Mr. McCague) knows him well, so I feel more comfortable quoting him. Anybody that honourable member knows undoubtedly has integrity.
Mr. Shiller says, "This as well as other taxes aimed at industry and production people is a revenue grab." How does that grab my friend? That big mitt of the Treasurer is out there pulling it back, just like a bear paw after a salmon.
The important second part of Mr. Shiller's sentence is that it is "a revenue grab to finance another round of government spending." It was further described by a spokesman for the Canadian Organization of Small Business, a Mr. Solomon, as "making no realistic attempt at reducing the deficit."
Why is Mr. Shiller concerned about its being a revenue grab? I have probably covered some of that territory before, but just in case it has not got through to those who may not be paying as close attention to me as you are, Mr. Speaker, I will reiterate that it is because it is going to add to the cost of production.
What is one of the results of adding to the cost of production, aside from the fact that if one is trying to sell it to me I may not want to buy it as much? It is going to have the effect of reducing the competitiveness of Ontario as compared with other jurisdictions. I hardly need to underline here, because we have heard so much about it in the past six months or more, that we are increasingly in a world economy, and anything that reduces our opportunity to be competitive is going to have a very undesirable effect on the whole population of the province.
To return to Mr. Shiller again, that eminent representative of the CMA, he says: "The overall effect of this and other tax measures will be to erode the competitiveness of Ontario industry." Again I appeal to the Treasurer, knowing his well-founded background in soil conservation. He knows that erosion of the means of production -- in the case of agriculture that means the soil -- is a sure way to bankruptcy and oblivion, because once you ain't got it in the soil, you ain't got it in the granary.
The same thing will happen with Ontario industry in general. If we keep on discouraging the competitiveness of Ontario industry by eroding that feature through higher taxes, we will eventually not have very much in the granary, the breadbox or any other part of our substance where we expect to get something to live on now and in the future.
In short, because I know there are scores of others who wish to express their opinions on this regrettable proposal, I will recap by reminding members that the so-called ad valorem tax has not been ad valoremizing for the past year and a half, because the tax level was frozen at 9.3 cents in July 1984. We had an ad valorem tax in the sense that it was a percentage of the price at that time, but it has not changed with the price since. The suggestion that we remove this tax, which was jogging along very nicely at 9.3 cents, and replace it with a tax that is now going to be 9.9 cents, does sound like a real bargain price, does it not? It is not 10 cents, but 9.9. It is good salesmanship to put it there, but it is still an undesirable policy --
Mr. Gregory: It is a ripoff.
Mr. Dean: I hear the member for Mississauga East indicating that it might be a ripoff. I will leave that suggestion for him to develop later on when he has some words to say himself, but I do think it is undesirable that it is proposing --
Mr. Gregory: It is gouging the taxpayers. There is no question about it.
Mr. Dean: I know my colleague is bursting to get at this, but --
Mr. Gregory: I am not even going to speak on this. Go ahead.
Mr. Dean: The honourable member is doing a very good job of not speaking. I can hear him not speaking from here.
Mr. Gregory: I was trying to support the member.
Mr. Dean: That is the best kind. I need the support. Anyway, this revenue grab, as it was described so well by the gentleman I quoted before, Mr. Shiller, to finance the round of government spending, is going to have an effect upon the competitiveness of Ontario and upon the cost of almost every item we buy. We should look very carefully before we consider approving this. I do not think we should support this proposal.
Mr. Foulds: I rise to support the bill. It is a tax bill; it does levy taxes. That is what tax bills do. There is nothing revolutionary about that. I do not know why the previous speaker seemed so surprised that a tax bill actually levies a tax.
We are supporting the bill for one very good reason. As the previous speaker indicated, it does away with the despised ad valorem tax. That was his word, "despised." He failed to mention that the despised ad valorem tax was brought in by his government. At least this is a step in the right direction.
The previous speaker also made an argument about how income tax is an ad valorem tax. He is confusing a progressive tax with an ad valorem tax. If I might explain, an ad valorem tax rises automatically without legislative approval. Once the tax is in place, the government never has to come back to the Legislature for an increase in the rate of that tax.
That is quite different from the progressive, increased staging of income tax. If the income tax in Ontario is increased, as it was this year, from whatever it was to whatever it is -- the figures escape me -- the Treasurer has to bring in a bill to make it 48 or 52 percentage points. There was no ad valorem nature to that; he has to bring in the bill.
Within the tax structure, of course, as there is an increased income and an increased tax payable, there is a higher rate, but that rate is established. One can change the rate of income tax in Ontario only by bringing in a new bill. The previous government failed to bring in a new bill and its ad valorem tax was the tax grab of the century.
It is true that this tax will affect the cost of some production, but it will not affect the cost of production directly on farm or agricultural goods. My understanding is that the diesel fuel used by farmers for agricultural purposes is exempt from this tax.
Hon. Mr. Nixon: The member from Mississauga says it is coloured.
8:30 p.m.
Mr. Foulds: That is right. It is called coloured fuel; so there cannot be any bootlegging of it. As that fundamental industry in this province is exempted from the tax, it does mean it is applied, but I challenge the previous speaker and any other speakers to give us the comparable rates of taxation for diesel fuel in other provinces, such as Quebec, and see whether we remain competitive in this one instance with such provinces. I very much suspect we are competitive in this way.
I do have, and I want to put to the Treasurer, one case I do not think we can rectify in this bill. There are a few isolated communities, particularly in northern Ontario, and my friend the Minister of Northern Affairs and Mines (Mr. Fontaine) would be aware of these communities, places such as Armstrong, where they must generate their electricity through the use of diesel generators.
In those few cases, I would appreciate it if the Treasurer would look at those situations where a fuel such as diesel, which is a relatively expensive way of producing electricity, could be given an exemption very much the way the agricultural use of diesel fuel is exempted.
The long-term solution in that situation is to make sure Ontario Hydro gets into small hydro generation on streams nearby communities such as that, so they could put in small generators that would supply a small local community.
That tax is a hardship on communities such as Armstrong, and I would very much like the Treasurer to look at that.
Basically, this tax increase is a commercial tax increase. It is there; there is no denying it. I submit that is better than reinstituting toll bridges in this province to gain revenue, which seems to be what the previous speaker was advocating indirectly.
I therefore say very quickly we support this bill. It is an increase in taxation. It is largely a commercial tax. I suggest that basically it does not cause any undue hardship and the province does need to get some revenues to deliver the programs it has committed itself to in the accord.
Mr. McLean: I want to speak briefly on the bill. Being from the farm community, I realize what this does to the cost of production for food. I realize also what it does for the tourists in the area.
The Treasurer has tacked on a tax of half a cent a litre on gasoline, and that is for the unleaded gasoline.
Mr. Foulds: That is the next bill.
Mr. McLean: That is fine. It does not sound like a back-breaking burden for motorists to bear, and it means very little to the family that puts on 20,000 kilometres a year in a car, but how many cases such as that do we have? In my riding of Simcoe East, many people have to drive 100 kilometres one way to work.
Mr. Gregory: I think the member is on the wrong bill. We are talking about the fuel tax.
Mr. McLean: That is fine. I am getting around to it. Do not worry about it. This is fuel tax I am talking about.
When one realizes what the cost is to the average motorist, to the tourist and to the farmer, the extra is too much for the people of the province at this time. I have a farm that uses a lot of fuel.
Hon. Mr. Nixon: There is a lot of revenue.
Mr. McLean: There is a lot of revenue and there is a lot of expense.
When we talk about the cost and the increased cost, and when we realize the ad valorem tax that was on has been frozen for the past year and a half, what taking off the ad valorem tax does is it sets a price that is set year by year by the Legislature or by the government when it wants to, but the government has also increased the price of fuel.
That is the part of the bill that disturbs me. Bill 50 is strictly a tax that was in the budget. When we talk about the generation of electricity in northern Ontario, I know of many reserves and many parts of the province where that is a great burden on many of those people. When we look across this province, I believe there are many people who will be burdened by this extra tax. It may mean very little to some families, but in my riding it means an awful lot to a lot of people. I just wanted to speak briefly and indicate that we will not be supporting this bill. At least, I will not be.
Mr. Haggerty: I want to address Bill 50, An Act to amend the Fuel Tax Act, 1981. I listened to some of the comments from my colleagues on the other side. I am like the rest of them; I do not like to see tax increases either. I can recall my days sitting on the other side as the Revenue critic, complaining about the ad valorem tax, which was introduced in 1981.
There was a big debate in the House at that time. The government of the day, the Tories, had indicated during the election that there would be no increase in taxes anywhere. However, they brought in the ad valorem tax, which certainly hit the consumers at that time. We opposed it from all sides and said that if we ever got elected to the government side, we would move in this area to have it rescinded. That is what the intent is.
I listened to some of the comments of the members tonight, and I must say that if we look at the good side of this tax, it is not so high that one cannot afford it. The critic for the Conservative Party talked about user fees. I believe in and strongly support user fees. I suggest the tax increase is a minimal one; it is not that great. Let us look at the good side of it. There will be a $60-million fund for municipal improvements for special road renovation and transit capital projects. If we want to spend money in that area and to improve the transit system around the Metro area, we will have to raise taxes.
Mr. Wildman: Do you mean there are no free buses?
Mr. Haggerty: There are no free buses. They are subsidized pretty heavily now by the government.
All I am suggesting is that there are some good points in here. One has only to look to the United States, where President Reagan introduced the five-cent-per-gallon fuel tax, to see the number of road improvements on the American side. They are building new highways and replacing obsolete bridges. I do not have to tell members that the cost of twinning the Burlington Skyway, some $70 million or $80 million, is a pretty hefty cost to the province.
Mr. Wildman: Do not point to Ronald Reagan as a way of getting our support.
8:40 p.m.
Mr. Haggerty: What I am saying is that many of my friends do not look to see what has taken place on the American side. Here, if we are to spend a little bit more money on regional roads, county roads and even some of our highways -- they need much improvement in this area -- the only way we can do that is through a tax levy.
However, the most important thing is that we are going to be creating jobs out of it. The key thing we are looking for in Ontario is jobs for our young people. Here are jobs in the construction industry, and that is the way to go.
We have to increase taxes in certain areas. If we look at the present tax base as it relates to road construction in Ontario, information I obtained through the legislative library research service shows that 65 per cent of the revenue generated now in Ontario is picked up through gasoline tax, diesel fuel tax, licences for drivers and vehicles and so on. The other 35 per cent comes out of consolidated revenue.
When one talks about an imbalance in taxation, it certainly is so in this area. For example, we are asking some person who has never driven an automobile, and never will, to pay a road tax to subsidize myself and the members on the other side to finance the road and transit systems in the province. Is that justifiable? Is it what we call equity within the taxation?
The Smith report of 1967 on taxation drove home a point when it said at that time the government should be looking to users to pay their share to use the provincial roads. We talk about the cost affecting people in the northern areas. Yet we have vehicle operators on the roads today who in a sense are not paying their fair share in user fees and are operating vehicles on provincial and municipal roads. One might say those are the ones who get the free ride when they use propane or natural gas fuels.
Mr. Guindon: Why do you not tax propane?
Mr. Haggerty: It may come. The previous government was thinking about it a couple of years ago.
The Acting Speaker (Mr. Morin): Please address the chair.
Mr. Haggerty: However, for 42 years it did nothing in this particular area.
Mr. Wildman: Talking about trucks that burn heating oil --
Mr. Haggerty: I am just suggesting that when one looks at the small cost --
The Acting Speaker: Order. Would you please address the chair?
Mr. Haggerty: I was speaking to the chair. However, I am having a difficult time getting it through to the members on the other side, some of whom have been sitting with a government that was in power for 42 years, to look at the injustice being done with fees to use our roadways, highways and the rapid transit system in Ontario.
The minimal tax increase from removing the ad valorem is not going to break the province or the user, the person driving the vehicle on the roads. A $60 million fund for municipal road improvements for special road renovations is important. It would be difficult for me to go back to my riding and say, "We are not going to complete the other four lanes of Highway 3 because no money has been allocated in the budget." This budget is only for five months. We are still picking up from where the previous government left off in the last seven months.
Although there is some criticism, it is a good approach to a fair way to bring a form of taxation whereby the user should pay.
Mr. Partington: I am pleased to speak on the Fuel Tax Act as proposed.
In a footnote by Conrad to a document entitled Voices in Time, he stated, "Man is a thinking animal, a talking animal, a toolmaking animal, a building animal, a political animal, a fantasizing animal, but in the twilight of civilization he is chiefly a taxpaying animal." That is becoming more and more his chief occupation.
It is very important to fuel the engines of our economy, and we have to because we certainly want to put a tax on the fuel, but it seems to be growing and growing. The 9.9 cents per litre tax is an increase of 6.4 per cent over the tax as it previously existed.
One thing of which the government should be mindful is the fact that once it is achieving a fair tax with respect to all other aspects of our economic life, it should make sure it keeps increased taxes within a reasonable inflation rate, which probably should be more in the four per cent than the 6.4 per cent range. That is very important for consumers, most of whom have a tough time living within the inflationary costs we have, even though they may have been kept recently to a minimum of four per cent.
An increase of 6.4 per cent on fuel results in a substantially greater increase in the final cost to a consumer when the multiplier effect is borne through the economic process. So more and more of the consumer's dollar is used to pay for the products, in this case as a result of an increase in the fuel tax.
Certainly in my area, where very often agricultural products are trucked over to the Ontario Food Terminal in Toronto and then trucked around the province, the 6.4 per cent increase will add substantially to the cost of fresh fruit coming into this province and will have a detrimental effect on a product whose sale we should be encouraging to assist the farmers in obtaining not only a fair price for their product but the sale of their product and also to preserve, particularly in the case of Brock, the tender fruit lands that are there.
Mr. Wildman: What happened to the food terminal of member for Cochrane South (Mr. Pope) in Timmins?
Mr. Partington: I have no knowledge of that.
When we look at the American scene we see that fuel taxes are substantially less. In many ways we compete with the United States. One thing we have to bear in mind in increasing and in levying our taxes is the effect they have on our competition with the Americans.
It seems to me that increasing this tax at a 6.4 per cent rate when the average inflation rate is running at about four per cent is just too inflationary and is going to have a negative effect not only on the consumer, who ultimately has to pay for it, but certainly on the economic viability of many small businessmen and farmers, who really consider fuel tax and keeping it reasonable an important part of staying in business.
I will be voting against the Fuel Tax Act as proposed.
Mr. Hennessy: I am pleased to have this chance to join in the budget debate. One of the key jobs of any government is the presentation of a budget. In that document a government can show judgement and leadership. It can prove its competence. It can prove that the people's trust in it is justified.
The Acting Speaker: Order. The debate is on second reading of Bill 50, An Act to amend the Fuel Tax Act, and not on the budget.
Mr. Hennessy: I have it here. I will get to it.
The Acting Speaker: This debate is on the Fuel Tax Act and not on the budget.
Mr. Hennessy: Just be patient. I will get to it. I know where I am going.
The Acting Speaker: Go ahead and get to the point.
Mr. Hennessy: Is that okay with the Treasurer?
Hon. Mr. Nixon: Yes. I am listening to every word.
Mr. Hennessy: All right.
We cannot talk about the people's confidence being justified. Why? Because this government was not elected to govern. All it did was win a popularity contest with the third party in this Legislature.
What about judgement? Ontario has lost its credit rating since this budget came out. Our name has been blackened in the investment capitals of the world. If that is judgement, I would hate to see this government on a bad day.
Especially for the northwest and the great city of Thunder Bay in the riding of Fort William, the budget offers little hope and is full of little gouges and small ideas. To northern enterprise these gouges will be the death of 1,000 cuts. This government just does not understand the north; it just does not understand our needs. What is worse, they do not want to listen, as we listened to them when we sat on the other benches. It is not doing the job the people of the north and of all Ontario expect of it.
Let us bring up just one issue. Let us look at the gas tax. The members opposite do not have to worry about gas taxes; they all ride in limousines. The taxpayers pick up their tab.
Mr. Wildman: We are not on the gas tax. We are on the fuel tax.
Mr. J. M. Johnson: The member should not be jealous. He may get his day.
Mr. Hennessy: He will get his day -- in heaven, I hope.
In regard to the fuel tax, one has to realize that many people in northwestern Ontario sometimes have their furnaces on starting in September. It is a long winter up there. I would advise some of the government members to spend the winter there and see how the people there exist.
8:50 p.m.
One has to realize that with the cost of fuel tax and the gasoline tax the government is more or less gouging the people of northwestern Ontario to a great extent. It is very well to say down here that the weather is a lot different. Today we have a foot of snow there, if somebody would like to bring his snow-shoes up to Thunder Bay and have a little prance around. We could bring the Treasurer up there to see how things are working.
One has to realize a lot of people work and have to go many miles to get to their place of employment.
Mr. Lupusella: Oh, no.
Mr. Hennessy: He does not believe it? Oh, he is talking to his friend.
If one wants to go from one place to another, it is 20 to 25 miles. Distances are far between one town and another. People have to do a lot of travelling. It makes it a little difficult for people who have to pay for an extra driver's licence, an extra licence plate and the fuel tax. How much can the government tax the people? It is taxing them enough now. It is taxing them to death.
Regarding the roads, the government is not putting enough money into the roads. The government is charging more money for other areas, such as licence plates, etc., but it is not doing anything to improve the roads for people to travel on.
All in all, it is not fair to the people of northwestern Ontario. It is not fair to the people of the province to raise the fuel tax. As far as I am concerned, I will be voting against the tax.
Mr. Guindon: It is with pleasure that I rise tonight to speak on the fuel tax. I am especially concerned about a few things that were said here tonight with regard to the fuel tax.
The member for Erie (Mr. Haggerty) mentioned that some 60 per cent of money expended on roads and highways was collected through fuel tax, corporation tax, etc. Only five per cent of the revenue which comes from the fuel tax goes towards the general budget.
I would also like to reflect on the transportation costs. When the government increases the tax on diesel fuel, it is increasing the cost of transporting products, whether it is from southern Ontario to eastern Ontario or to northern Ontario. Every time the government increases the fuel tax, it is increasing the costs of all the haulers and truckers and it puts them in a difficult situation. They have to increase their prices; thus the consumer has to pay again.
Contrary to what a lot of members think, all farmers do not use coloured fuel. Some of them have to use clear diesel because they live in eastern Ontario or in northern Ontario where the weather is cold. The diesel tractors in winter do not always start the way they should start, and the blame is laid partly or mostly on the corporation or additives put in the diesel fuel. Also, they claim the injectors and fuel pumps wear out much faster. Therefore, they buy clear diesel to put in their tractors and vehicles and then have to wait for their rebate from the government. This is cash outlay. This is all cost added to the farmer.
The Treasurer should think about giving a tax break for farmers who want to equip their vehicles with radial tires. Radial tires save on fuel. They save on wear. They also stop compacting of the soil. If the Treasurer was good to the farmers and gave them a 30 per cent discount on radial tractors for the farm, he could kill two birds with one stone.
There is one more point I would like to make on the US tax on diesel fuel. The US tax on diesel fuel is very minimal. It is a tax on the mileage one travels in each state when one crosses a state. One gets a licence and is charged every year or every month on a mileage basis. It is not as the member for Erie said. He mentioned that in the United States they pay for all the roads with a five per cent tax on fuel. It is mostly each individual state that looks after the bridges and the roads.
For the time being, this is about it. I do not think the fuel tax is a good tax and I oppose it.
Mr. Pierce: I rise tonight to speak in opposition to the change in the fuel tax system. As my friend next to me has indicated, one has to live in the north to know what this tax does to the person who is trying to promote secondary industry and industrial growth in northern Ontario. This is a regressive move in the direction of trying to indicate to the people of this province that we are positively thinking about moving out industrial growth into the northern hinterland so that the people there have a better opportunity to benefit from all the good things government can do.
Again, as was stated earlier, an operator in northern Ontario starts up his truck in early September and does not shut it down until late in May, because if he does it will not start in the winter without a lot of problems, without a lot of additional fuel and a lot of propane to keep the diesel units warm enough to start them again.
The tax that is added here becomes just an additional cost to the consumer in northwestern and northern Ontario. This tax is passed on to the person who is buying the commodity or goods that are being transported by the diesel trucks on the highways. There is nothing here that indicates that now somewhere, because of this particular move by the government on the other side, commodities in northern Ontario and northwestern Ontario are going to be cheaper and easier to purchase. In fact, the consumer on the street will pay the additional tax for the truckers and the industries that are required to pay this cost of getting their products to the people in northwestern and northern Ontario.
We talked earlier in budget debates about the high cost of living in northwestern and northern Ontario. A lot of it stems back to high transportation costs. I know the Treasurer is well aware, from listening to my predecessor, Pat Reid, the representative from the Rainy River district, that transportation is a very important factor in northwestern Ontario in getting products to the people.
We talked earlier in the budget debates about the cost of milk in northwestern Ontario. As we always said, it goes back to the high cost of transportation. The Liberal government is well aware of those costs. It has been harping on them for a number of years to a party that was on the other side of the House at one time. It talked about all the good things it was going to do to ensure that people in Ontario got a fair shake.
I say this kind of tax does not give the people in all of Ontario a fair shake. Products that are required to be moved from northern and northwestern Ontario to southern and eastern markets will now be boosted in price and that will lessen the chances of those goods being competitive on the open market. In the reverse, products moved from eastern Ontario, which are so badly needed to promote the industries in northwestern Ontario, will increase in cost because of this particular move on behalf of the government.
I do not understand the reason. If there is to be some break in gasoline and fuel prices down the road, this regressive move takes away any chance of a break.
We talked about promoting tourism and how badly needed tourism is for the stabilization of this province. Yet all records show the American tourist is going one gas tank away from home. A lot of those vehicles, automobiles especially, because we are talking about fuel tax and not gasoline tax, are being switched to diesel fuel in the United States. They are coming into Canada on diesel fuel. In turn, their owners are now required to purchase this gas with the change in tax.
9 p.m.
I can only say in closing that I do not believe this is the kind of move this government wants to portray to the people of Ontario as promoting a better standard of living.
Mr. Wiseman: I would like to speak on this bill for a moment and to tell the Treasurer that I am a little disappointed in him. When he sat where we are sitting now, I thought he was a reasonable man and had some sympathy for some of his fellow farmers. Even though I understand his wife is, as my wife often is, the farm manager at home and looks after things, I would have thought he would listen to her once in a while, as I try to do my wife, and give her some encouragement for staying at home and managing the farm.
When he does something such as this to keep an election promise -- I understand one of the Liberals' election promises was that they would take the ad valorem tax off -- and sneaks in a 6.4 per cent increase to the general public, one pays it in the fuel tax or over the counter for goods that are shipped in by transport or whatever.
I wonder whether the Treasurer, who is a part-time farmer like myself, has ridden a tractor or done any farm work this fall. Perhaps when his farm manager, his good wife, is ploughing, she knows, as the member for Cornwall (Mr. Guindon) has said, that many of the farmers hate to use the coloured fuel in their diesel tractors for the reasons he mentioned and go to the clear diesel fuel. Perhaps he even does that on his own farm; I am not sure. I think the Treasurer should look at this.
I understand the ad valorem tax went up and down with the prices and there was a chance of its going down. With his tax now, there is no chance of that happening. I see by his lovely tan that the Treasurer has been south of the border; when we see the breaks their truckers and others get with their diesel fuel and compare those breaks with the ones on this side of the border, it seems we want to penalize them every way we can at a time when their costs are high. As many of the other members have said, we pass those costs on to the consumers; so the 6.4 per cent we are talking about in the fuel tax is peanuts compared to what it boils down to by the time the delivered goods are in eastern Ontario, northern Ontario or wherever.
The Treasurer could reassure me that he is a fairer man than he appears to be in bringing in this kind of legislation by rescinding this tax. At least, if he takes the ad valorem tax off he should not raise the tax at this time. When he raises it by 6.4 per cent at a time when civil service wages and many other wages are kept at something close to four per cent, the government is not practising what it preaches by passing this on to the consumers of Ontario, the good farmers and small businessmen who are out there trying to make a go of it.
The Treasurer should consider it, be fair and rescind what he has done here and put it back to what it was.
Mr. Baetz: I would like to comment very briefly on the negative impact this tax will have on tourism. I speak on tourism especially because I know the Treasurer has for many years been one of the very strong and articulate supporters of greater tourism for the great province of Ontario. He has spoken at great length about the tourist attractions in his part of the province. I am sure the very distinguished member for Grey-Bruce would be able to talk about tourist attractions in Grey-Bruce, including the great towns of Chesley and Hanover, my birthplace. All 125 members could talk about tourist attractions in their own ridings.
Yet we know there are two or three enormous disincentives that keep a lot of Americans away. We must remember there are some 180 million Americans living within one day's driving distance of our great and fair province. They would like to come here to visit, to see our sights and enjoy our cultural activities, but there are two enormous disincentives that keep hundreds of thousands, perhaps millions, of Americans away, which means a tremendous drain on our economy. One is the high cost of and high tax on our liquor, and the other is the high tax on our gasoline.
After 42 years reflecting out in the desert I imagined this great Liberal government would come back and at least be a little more imaginative on this issue than to simply increase rather than decrease the tax on gasoline and provide another disincentive for Americans to visit our province.
We can talk about the policies and the philosophies of ad valorem or direct tax, but the American tourist does not engage in that kind of discussion. He simply asks the price of gasoline in Ontario at present. Thanks to the proposal for this tax measure the answer to the American tourist is that taxes have gone up again, the cost of gasoline has gone up again. It is probably one of the most short-sighted proposals from this government.
Interjections.
Mr. Baetz: There is the member for Waterloo North (Mr. Epp), the home of the Oktoberfest. Ninety per cent of the people who come to the Oktoberfest are Americans.
Interjections.
Mr. Baetz: Not any more. That is one more reason why they stay home. I heard the member for Windsor-Walkerville (Mr. Newman) talk about tourism for his part of Ontario. Because of this increase in gasoline Americans are going to fill their tanks in Detroit, come over and drive around until the tanks are empty and then go back and refill them because gasoline costs are high in this province.
For any government that pretends to try to encourage tourism in the province, it is the epitome of short-sightedness to --
Mr. Wildman: On a point of order, Mr. Speaker: Perhaps you could direct the member to talk about the fuel tax. Not too many tourists drive 18-wheelers around this province.
9:10 p.m.
Mr. Baetz: What is the member talking about? Has he never seen the mobiles come over here? Obviously this gentleman does not know what we are talking about. I am talking about recreational vehicles.
Interjections.
Mr. Speaker: Order. I am sure the member is going to return to Bill 50, An Act to amend the Fuel Tax Act.
Mr. Baetz: The member for Port Arthur, Mr. Talkative from Port Arthur, does not realize that the Americans come across loaded with fuel in their recreational vehicles. They load up across the border because they realize that when they come over here, the cost of fuel is far too high. This tax is going to make it higher.
Anyway, I simply plead that the minister reconsider this tax because of the negative impact on one segment of our tourism trade. I have to draw pictures for these people who do not know what I am talking about, the two of them over there. I ask the Treasurer to reconsider this tax, which will simply be one more disincentive for one segment of our tourism trade.
Mr. Sargent: Naturally, I am in favour of the legislation, but I suggest to the minister that a lot of us are getting fed up with all the hanky-panky and all the Russian roulette they are playing in gas stations. They are putting up their signs, and the increases are 0.9, 0.8, 0.7 per cent. It is a con game with which the public is putting up.
I wish there were some proviso in the legislation that when these gas stations do have a price war, they not put prices up by 0.1 or 0.3 or 0.4. They should have a uniform number across the bit and quit this con game about 0.9 or whatever the increases are.
I think it is the most important commodity we buy today, and people are getting fed up with all this nonsense of the price wars in the gas stations. The minister should be conscious that this increase comes to -- I had better multiply it out -- 39.6 cents per gallon in tax. On a $2 cost per gallon we are paying 39.6 cents in tax to pay these guys' salaries, so they cannot vote against that part of it.
So instead of making everything a decimal point, make it an even number in the public interest. I know that is going over like a lead brick, but for the record, it should be an even number.
Mr. Rowe: I rise in my place this evening to address the fuel tax that the present government intends to implement. However, before I address this issue, and to the member to my far left -- and I might add that he seems comfortable over there -- I wish to take this opportunity to relate something for a moment to the Treasurer, the member for Brant-Oxford-Norfolk. I feel I share a moment of history in this great House, since the minister's late father and my late grandfather sat, much as we are sitting this evening, on opposite sides of the House about 62 years ago, that being from 1923 to 1926. I am happy to say things have not changed.
They sat in 1937. I am sure we all remember when the great Mitch Hepburn at that time burned his way across this province in a Liberal barnstorming election.
My grandfather often referred to the Treasurer's father as a gentleman and an honourable colleague. From my very short time and experience in the House, the member for Brant-Oxford-Norfolk seems to exhibit a reasonable amount of what his father possessed. You will note, Mr. Speaker, that I said a reasonable amount of what his father possessed.
Hon. Mr. Nixon: Do not go overboard.
Mr. Rowe: I intend to weigh the balance as I spend the next few years in this House watching and working with the Treasurer. On that note to the member, I might add there is a real possibility we could have, and probably will have, a new Treasurer in the fullness of time.
Mr. McClellan: Early fall.
Mr. Rowe: Or later; perhaps early fall. Liberals and New Democrats do make strange bedfellows, as has once been stated.
The increase in the provincial tax on fuel is especially detrimental to my riding of Simcoe Centre. Barrie and Bradford are the main areas of population in this riding. Industry and commerce are on a much smaller scale here, much like the Treasurer's riding. We have a major segment of the population who must commute to Toronto on a daily basis. This is a hardship in addition to hardships imposed by the free market, the increase in insurance costs and the costs of buying and maintaining a reliable vehicle.
Transportation is another aspect of industry that is hit. The member in the front bench to my left would not understand that because he does not understand industry. That has a ripple effect throughout our economy. Trucking and transport are fairly significant industries per se in my riding. They provide a fair portion of the residents with employment and also a means to market our products.
We have a portion of the Holland Marsh, the vegetable bin to Ontario, in this riding. I am sure all members are familiar with that area; they have driven through that great area on the way to their cottages. As the Treasurer must realize, this is a fuel-intensive industry. The people who operate in this industry must compete with American and Mexican produce. They must compete with the whims of Mother Nature as well. To add to this by imposing an increase to the fuel tax of 0.4 per cent is to add salt to a wound and to add insult to injury.
The vagaries of the marketplace are something these people are prepared to battle. If anything, they should be assisted and not saddled with additional hardship. In this region, in my estimation, the additional 0.4 per cent is a hardship. You may want to note, Mr. Speaker, that there are vagaries in the vegetable market as well as vitamins. While we are extrapolating, as we are, we should note as well that there are victims in this same market. Here the Treasurer has made a double killing, the farm operator and the consumer.
If this government is more concerned with improved relations in the balance of trade in favour of the Americans, that could be considered one positive aspect of this tax. It will certainly help to eliminate the competition for the Canadian market and at the same time eliminate what must be considered in every sense of the word a growth industry.
9:20 p.m.
There is only so much money in each and every one's budget: their grocery budget, their mortgage budget, their gas budget. How much does the Treasurer think the average person can stand? There is a limit, and I warn him that the people of my riding and the people of this great province are approaching that limit. The limit lies where a tax such as this one is regressive, and for those who are barely able to stay afloat financially it finally drives them to give up any further hope.
Finally, with my riding of Simcoe Centre touching on two beautiful bodies of recreational water, Georgian Bay in the Penetanguishene area to the north and Lake Simcoe in the centre, and with Bradford on the southern extremity, recreational boating is a major factor. We must realize that this increase in the tax on fuel has an effect on every business of this province in one way or another. Pleasure and leisure time are very important to the residents of this great province. Many people, both young and old, are employed in the recreational business of boating, lodges and camping. All these activities are directly affected by an increase in fuel tax.
Interjection.
Mr. Rowe: There are even diesel airplanes these days, I understand.
The decisions that are arrived at in this House have a far-reaching effect in this province. The Treasurer should not get the mistaken idea that I am fighting for those poor, unfortunate people who cruise the waterways in their $200,000-plus yachts. Perhaps he has one of those; I do not.
An hon. member: He has a manure spreader, here and at home.
Mr. Breaugh: He has a $200,000 manure spreader, not a yacht.
Mr. Rowe: If the Treasurer has one of those, it is nice to see he can stand on a Liberal platform.
Those people can afford the increase, but scale that industry down to the level of the average person, and one will realize it provides an income for hundreds of people in my riding. Fuel sales, repairs, storage sales and auxiliary operations such as other facets of tourism, stores and hotels are all affected by this tax.
We have a fragile economy and it should be protected. We have entrepreneurs who are trying to succeed. They should be encouraged and not faced with additional obstacles.
To the owner of the $200,000 yacht, this tax increase is a nuisance. To the marginal tourist operator, it is an obstacle that may or may not be overcome. To the employee, usually a young or otherwise hard-to-employ person, who is laid off if his company is forced out of business, it is a hardship that borders on disaster.
With the revelation in the Legislature two weeks ago that the province now will be receiving more money than it expected as a result of changes in the federal income tax, I urge the Treasurer to withdraw this tax on fuel at this time, giving all the residents of Ontario an early Christmas present.
Mr. Barlow: I must say that the taxpayers of Ontario, certainly those of Cambridge and I am sure those of Brant county, are not particularly happy with the increase not only in this fuel tax we are talking about but also in the other taxes that hit the drivers of Ontario.
There are increases in several areas, eliminating the ad valorem tax, which is something the present government has opposed for a long time. The term "ad valorem" had a roll to it; it allowed them to --
Mr. Wildman: Like "ad valorem" and "abhorrent." They are similar.
Mr. Barlow: That is right; ad anything. They just liked the roll to that; so they got on it and opposed it right from the beginning. That is fine. It was certainly their prerogative to do so.
Now the Treasurer has seen fit to eliminate it. That is his prerogative, but when he wants to take it off and add a 6.5 per cent increase on to those who use diesel fuel, that hits them in the pocketbook. It hits the farmers, it hits the trucking industry, it hits all those who have switched to diesel cars to save on their fuel bills because of the more economical diesel fuel.
Add to that the increase of 12. 5 per cent for the vehicle registration fee. There again, it hits everybody who drives a car to pay that extra 12.5 per cent. It is more like 15 per cent, I believe, for heavy commercial vehicles; so it hits the trucking industry.
It may not come as a surprise to members, but I am getting around to talking about the trucking industry in my role of wearing two hats, one as Transportation and Communications critic and the other, of course, as an operator of a fleet of trucks myself.
As I say, this increase not only hits the farming community, it also hits those in the north, where they have many miles to travel between stops. They have a big concern, I am sure, in the north. I am sure we will hear from our northern members, if we have not already heard from some of them, about how they are concerned about this. I am sure it is a concern to all members who represent ridings where a large segment of the population has commercial vehicles on the road.
While we are paying all these increases, of course, also hitting that same industry, the trucking industry, is the increased corporation tax this government has proposed. Add all those taxes together and it is unfair to some segments of the economy that will be asked to pay much more than other segments of the economy. I am talking again about the trucking industry.
The fuel tax is just one of many taxes. During the past six years the diesel fuel tax has risen by 3.8 cents per litre, or 69 per cent. That just hits this one industry. The trucking industry estimates that it uses about two billion litres of fuel per year; so that is a pretty considerable contribution to the coffers of the province.
Hon. Mr. Van Horne: Are these last year's notes?
Mr. Barlow: No, these are this year's notes. They are totally up to date. As a matter of fact, many of them were taken right out of the budget, which was prepared not by me or by anybody on this side of the House; it was prepared, as I understand, on the other side of the House.
There are several other things. While this money is taken out of the economy, nothing is going in. As a matter of fact, less is going in. I mentioned to the Treasurer before that the total budget of the Ministry of Transportation and Communications for 1985-86 is actually a decrease of $34 million from 1984-85. In 1984-85 it was increased over 1983-84, but then 1985-86 comes along and we have an actual decrease of $34 million in the total MTC budget.
9:30 p.m.
While that portion of the budget is going down, more money is coming out of the motoring public in the province. The revenue from motor vehicle fuel tax is projected to increase by $17 million this year. Under vehicle registration fees, the government anticipates another $20 million over and above what it received last year. I understand there is a possibility that a gasoline tax increase may not see the light of day, but if it does, on page 54 of the budget there is a projected increase of $59 million.
Those three items, gasoline, motor fuel and vehicle registration, amount to a $96-million increase being taken from the motoring public of Ontario while they are getting back about $34 million less in revenues.
There is talk about transfer to local governments. The transfer for municipal roads is projected to increase by $ 15 million for 1985-86.
Hon. Mr. Bradley: That is a great deal.
Mr. Barlow: That is right. However, as I say, that is only in one area, yet there is much more revenue coming in.
None of that is new money. It was all in the budget projected by the former government. As a matter of fact, the government plans to transfer a total of $523 million to municipalities for road work. When he was minister back in February, my friend the member for Dufferin-Simcoe (Mr. McCague) told the municipalities they would get $531.5 million. In other words, this Treasurer has seen fit to decrease what the municipalities were expecting by about $8.5 million.
That is something on which I am sure the municipalities were counting, expecting to be able to upgrade their roads. Heaven only knows that the roads in many municipalities are well below standard. They certainly are in the regional municipality of Waterloo. We have a very real concern there. The regional council has made representations to the minister on a number of occasions to try to get some additional funding so regional roads can be brought up to a better standard and the taxpayers of Waterloo region can have them in the condition they feel they should be in.
Mr. Haggerty: You are supporting the bill now, are you?
Mr. Barlow: No, hardly. When the government hits the taxpayer the way he is being hit, I cannot support that. It is a little unfair. Maybe I would not have as much trouble supporting it if the transfers were going up by the same proportion as the expenses, but they are not.
I know the Ontario Trucking Association made a presentation to the Treasurer and asked him to assist the trucking industry in the fight to ease the two per cent federal excise tax. I think the Treasurer listened to the trucking association when it made that presentation.
I understand Bill 51 is being opposed not only by us but also by the third party. If the gasoline tax does not go forward, it will show that the government listens from time to time. I hope it continues to do so. I hope it is going to sit down with the Legislature when we get to committee of the whole and take a serious look at what it is doing to those who are using municipal roads.
I have one or two other comments to make here. When municipalities ask for increases in the transfer payments for roads, they expect the Treasurer and the government to listen to their concerns and to respond. When they are told that they are going to get a certain figure and the Treasurer then contributes somewhat less than that in his budget, it is unfair.
It hits the municipalities. They have the real concern of trying to balance budgets, and they count very heavily on the transfer payments they receive from the provincial and federal governments. The road tax is one of the largest contributory grants that come forward. The only ones larger than that would be the grants to the school boards.
Mr. McClellan: The member has lost his place.
Mr. Foulds: He is not supposed to read in the House, is he?
Mr. Barlow: I am just trying to refresh my memory with some of the notes I have.
Hon. Mr. Van Horne: The member is trying to make out his notes.
Mr. Barlow: They were not in very good order here. I was not quite as prepared as I thought I was.
Mr. McClellan: The member should not let the other members pressure him.
Mr. Barlow: I am not. Actually, they are helping to fill in the time for me. On this page -- what have I got written here? I have something down here about --
Mr. McClellan: This is all being televised. Does the member realize that?
Mr. Barlow: Is that right? And I didn't shower.
The diesel fuel tax going up by almost 6.5 per cent, which is an increase of 0.6 per cent per litre, is particularly hard on -- I mentioned this before and I want to reiterate it -- the trucking industry. I and many other members of the Legislature have met with organizations such as the Ontario Trucking Association and the Ontario Good Roads Association. These people are all seriously concerned about the increase in taxes.
When the government hits the pocketbook of one industry alone, the trucking industry, we have to be very concerned. I hope the Treasurer will keep his options open when it comes to the clause-by-clause stage of this bill.
Mr. McClellan: What is this? A moment of silence for the Tory speak-a-thon?
Mr. Barlow: That is right, yes. I have another page here. I wonder what I have not covered. Oh, yes; here it is.
Let me point this out. Here is one I have not used yet. It is estimated that an average five-axle semi-tractor-trailer will cover about 160,000 kilometres a year. The tax increase will produce additional revenue of about $2,000 from one trucker for the provincial coffers. That is a big expense for that one truck, and that is only on the fuel tax.
Over and above that, we have the increase in the licence fee. There is more revenue: the 40 per cent increase in drivers' licences. I realize the 40 per cent increase in the cost of drivers' licences is going to a program that is extremely worth while, something that has been on the books for many years: the photo of each one of us on our driver's licence.
I understand there is confusion out there with the licence issuers. I talked to one licence issuer and he --
The Deputy Speaker: I would ask the member to restrict his comments to the bill at hand.
9:40 p.m.
Mr. Barlow: That is right. The fuel tax is only one area.
The Deputy Speaker is from a rural community, the adjacent riding to mine, along with the Treasurer. I know the farmers of this area, as well as being concerned about the increase in fuel tax, are also concerned about the increase in the cost of their drivers' licences.
The fuel tax is only one area. When it comes to taking the photographs, the licence issuers are concerned about this. They are concerned about the fuel tax as well, but they are also concerned about the confusion in issuing these three-year licences for the drivers of the province. I understand we are renting the equipment from Polaroid, and that is another story. I guess we have a bit of a lawsuit on our hands there, but I am sure the chief law enforcement officer of the crown will look after that problem.
Mr. Breaugh: Even you, Mr. Speaker, should recognize this is a little off this bill.
Mr. Barlow: No. It ties in with the fuel tax.
Mr. Breaugh: Something should be tied in, but it is not this debate.
Mr. Barlow: That is right. I am saying the driving public of the province, as well as paying additional fuel tax, is paying additional money for driving licences. They are paying more for all these various road-related taxes.
I would simply like to - -
An hon. member: Talk out the clock.
Mr. Barlow: Talk out the clock is right. If I had some more notes here, I would read them. Perhaps I should start reading through the total budget here and see what else there is that ties in with the fuel tax increase in Bill 50. I do not know whether I really can elaborate on that much more unless I happen to see something else in the notes I have here. Just bear with me a moment. These three pages all deal with the fuel tax. I want to see what I have not covered.
To go back to the trucking industry -- whose slogan is, "If you got it, a truck brought it" -- if a truck does bring it, the truckers have to pay more for the fuel tax increase along with the licences for their vehicles and other forms of taxation. Also, one is going to have to pay more to get what the truck brought. One is going to have to pay more because the trucking industry, like any other industry in this day and age, has to pass on these increased expenses. They are passed on to you, Mr. Speaker, and to the Treasurer.
The Treasurer used to put gas in his own car, but now he is one of the fortunate ministers who has the opportunity to have somebody drive him from point A to point B. We, the taxpayers, including himself, contribute now towards his transportation back and forth across the province.
The previous minister had a diesel car at one time and he also had a propane car. I know we are not talking about propane, and I would not want to stray from the subject at hand, the fuel tax increase, but I wanted to point that out to you, Mr. Speaker, in case you were not aware of that.
I am saying to the Treasurer that for the tobacco farmers of his area, for those who market apples or any other fruit product, they are shipped by truck and it is going to cost more to get these products to the market. The poor consumers are going to be hit both ways. They are going to be hit with an increase in taxation on their own transportation, but also they are going to have to contribute towards the transportation of whatever they buy, whether it is a basket of apples, a new refrigerator, a new desk for their den or a television.
All these things are going to be increased simply because the Treasurer, in his wisdom, chose to increase the fuel tax to those of us who drive vehicles that use diesel fuel for propelling our vehicles.
There is a recommendation here I would like to relate to the Treasurer. The recommendation says, "The Ontario Trucking Association requests consideration by the provincial government of a reduction in the level of provincial fuel tax." That is a very simple request, dated October 2. The budget came in later than that.
Obviously, this recommendation arrived in advance of the budget, but I guess the Treasurer did not finish reading this submission. It is actually the submission of the association to the Treasurer on October 3. That was one point the Treasurer unfortunately missed out on. I am sure he can be forgiven, as long as he takes the opportunity now to back off and cut that increase. He can remove the ad valorem if he wants, if he feels that is the right thing to do.
I happen to think that may not be the right thing to do. We have heard before that he is eliminating the ad valorem tax at a time when there is a reduction in the price of fuel, of gasoline products, of petroleum products on the world market. A reduction is in sight. That means the ad valorem is going to bring the taxation down, not only for the trucking industry but for all the motoring public in the province.
I hope I have been able to convince the Treasurer that this one budgetary item is a little bit out of line. If he would like to have some further dialogue on it, I would be glad to discuss it with him privately, or I could carry on for a little while and reiterate some of the points I have already covered. I do not think you want me to do that, do you, Mr. Speaker?
The Deputy Speaker: That is correct.
Mr. Barlow: I did not think you would. I will leave it with the Treasurer. If he would consider holding the price of the cost of diesel fuel that he included in Bill 50 at the level we are at now, I am sure it would make the motoring public happy and people would say, "That Treasurer ain't so bad after all."
The Deputy Speaker: The member for Brantford.
Hon. Mr. Nixon: Read the same speech.
Mr. Gillies: I thought I heard the Treasurer yell "dispense."
What an appalling day. I have been appalled all day. I was appalled earlier by this government's handling of the race relations commissioner of this province. I was appalled later in the afternoon by its handling, or nonhandling, of the Wellington teachers' strike. It is now 9:50 p.m. and I am still appalled. What an appalling situation. What an appalling government. It is just appalling.
In joining this debate on Bill 50, I have to agree with my colleague the member for Cambridge (Mr. Barlow) in his very articulate and incisive examination of this bill. As a member of this assembly I will not be supporting Bill 50. I fail to see in which direction this government is moving in what is very clearly not only a counterproductive but a very regressive tax.
We live in a vast province in a vast country. More so than most places on this globe, our country is dependent on the ease of transportation of our people and of our goods. Our working people have to travel as much as those in the upper-income brackets. Yet we see this government moving in a direction which is very clearly regressive and discriminates against people of lower income.
9:50 p.m.
In the course of this debate, I intend to talk about the farmers, about the people who depend on public transit, about the trucking operators and about the people who try to move their goods.
Where is everybody going?
Mr. Breaugh: There seems to be a consensus developing.
Mr. Gillies: I intend to talk about all the ordinary people in Ontario who are going to be adversely affected by the move the Treasurer is making through Bill 50, a bill I hope our caucus will be able to convince members of this assembly to send to a well-deserved defeat. This tax represents about a 6.6 per cent increase across the board. Again I would remind members, it is a regressive tax. It hurts those of modest incomes as much as it hurts those of greater incomes.
It hurts the farmers. The Treasurer is a very fine farmer, well respected in Brant county. The Treasurer, more than any member of this assembly, would know how the farmers depend on diesel fuel for fuelling their combines and their tractors. He knows an increase in the diesel fuel cost will lead to increased food costs for our citizens and how it is yet another burden on the poor, beleaguered farmer.
Hon. Mr. Wrye: The member is as wrong at 9:50 p.m. as he was at 2:50 p.m.
Mr. Gillies: I am sorry. The Minister of Labour is making, I am sure, a well-intentioned contribution to this debate, but I failed to hear it.
Coming from Brant county, the Treasurer should know a number of things about the effect of this tax. First of all, as I point out again, it is regressive. It is in no way a progressive tax and it hurts the lower-income person more.
Second, at a time when there are windows of opportunity for lower fuel costs in the world -- we see gas prices dropping and we see the opportunity for lower diesel fuel costs -- he is moving towards a pegged tax increase that will be less beneficial and will have a more adverse effect on the consumer than the dreaded ad valorem tax would have had.
I remember many debates in this House during the last five years in which I have heard the attacks of the front bench, the articulate spokesmen for what is now the governing party. I remember the former member for Kitchener, James Breithaupt, Pat Reid and the Treasurer himself.
Mr. McClellan: Where are they now?
Mr. Gillies: Where are they now indeed?
I remember their incisive attacks against the ad valorem tax at a time when the trend in both fuel pricing and inflation definitely pointed towards the negative effects of an ad valorem tax.
That has changed. Both in Bill 50 and in the gasoline tax, which we will be debating in this House at a later date, we see the government pegging these taxes not at the lower end of the scale, where there might be some benefit for the consumer, where there might be a break for the working guy, but we see these taxes being pegged at the higher end of the scale. We see the taxpayer, the consumer, getting the worst possible deal. There is no benefit to the consumer in this tax increase when one considers the possibility of lower fuel taxes. The Treasurer is determined to take the greatest possible buck he can out of these tax increases, and I find it most unfortunate.
Mr. Barlow: Appalling.
Mr. Gillies: My colleague the member for Cambridge calls it appalling and he is always right.
Mr. Dean: Well, he is nearly always right.
Mr. Gillies: He is nearly always right.
On another count I find fault with the Treasurer. Given his roots in Brant county and knowing the history of our community, I again find fault with him raising diesel fuel taxes at a time when the major industry in our county is having trouble moving its products. Of course, I am referring to the farm combine made by our good United Auto Workers at Massey-Ferguson Industries Ltd. in Brant county, 1,100 of whom are now laid off because of the market problems that this company is having, the diminished market and the diminished ability of farmers to buy new combines.
Mr. Mackenzie: They are not getting overtime, are they?
Mr. Gillies: I am getting another helpful intervention from my friend the member for Hamilton East.
These combines and tractors manufactured by the farm equipment companies depend on diesel fuel. I would have thought the Treasurer, more than any other minister of the crown, would have sympathy for the plight of those workers and the ability of those companies to sell their products.
We have had questions in this House in the last few weeks about the now defunct White Farm Equipment, the layoffs at Massey-Ferguson and the situation in which International Harvester finds itself in Chatham, but do we find a sympathetic ear in this government, any response to taxation policy that will help these companies sell their products in the Ontario market?
Interjections.
Mr. Gillies: I heard a chorus of noes from my colleagues and the answer certainly is no.
An hon. member: I hear the member is appalled tonight.
Mr. Gillies: I am. This government seems to be determined to make the situation more difficult for these companies and more difficult for the farmers to afford to buy these products. At a time when it preaches restraint, I find it passing strange it would increase such a regressive tax.
We are just a little puzzled on this side of the floor because we hear the Treasurer preach his restraint policies and his doctrine of lower government expenditures and greater breaks for the little guy. It occurs to us it is passing strange at a time when they are increasing the deficit of the province by $500 million and going for a $700-million tax grab. We find it all passing strange, especially when one contrasts it with the 1984 budget that was introduced by the then Treasurer, the man who will be assuming the leadership of our party next Monday.
Our friends opposite are not stupid. They are very observant. They have watched the development of fiscal and taxation policy in Ontario over the last number of years. Why could they not learn from a 1984 budget which introduced no tax increases and lowered the deficit by $900 million? With their professions of concern about government expenditures, why could they not come up with a budget that is remotely akin to our budget, which brought in no tax increases and lowered the deficit by $900 million?
I am appalled by this. I find it more than passing strange and I am suspicious. I want to tie this back to the 6.6 per cent increase in diesel fuel taxes, which is what we are debating, because on this side of the floor we are a little suspicious about where these additional funds are going. They are going for a $700-million tax increase, an increase in the deficit of $500 million; yet we see very few tangible benefits to the taxpaying population as a result of a total fiscal grab of $1.2 billion.
Excuse us if we are a little suspicious about whether our friends opposite are building up a bit of a war chest.
Mr. Andrewes: For what?
Mr. Gillies: My colleague the member for Lincoln asked for what? Things are so tough on this side of the floor the member for Lincoln has had to take a night job as a waiter. We believe there is a war chest being built up by our friends opposite for an event in the spring or fall of next year, which may involve what the former leader of our party used to call a consultation with the public.
The Deputy Speaker: Will the member please restrict himself to the Fuel Tax Act?
10 p.m.
Mr. Gillies: I am tying this back to Bill 50 because that is what aggravates this situation more than any other. We think the party opposite, now entrenched in the government benches, running government by press release in a way we have never seen in this province, is about to embark on an exercise in the coming year of buying the people's support with their own money. It is going to do it with the $1.2 billion it is taking out of their pockets now. Where does that leave us? It leaves us absolutely appalled. In my five years in this assembly, I have never seen the like of it and I hope I never do again.
Mr. Breaugh: So do we.
Mr. Gillies: For a moment, let us leave the farmers and the auto workers in Brant county who are being hurt by the insensitive fuel tax increase of the Treasurer (Mr. Nixon). Let us move along to the people in our cities who use urban transit. Most of our buses in our cities, be it Toronto, Brantford, Cambridge, Parry Sound --
Mr. Sheppard: Or Northumberland.
Mr. Gillies: Or Northumberland, Lincoln, Oshawa, Burlington. What kind of fuel do those municipal transit lines use?
Some hon. members: Diesel.
Mr. Gillies: Diesel fuel. The member for Cornwall (Mr. Guindon) knows it to be diesel fuel, and he is quite right. In our communities, it is often the lower income people who cannot afford automobiles who use public transit. I ask my friends, this very learned group, when the fuel tax goes up and the extra costs are passed along to these municipal transit systems, who is going to end up picking up that extra cost?
Interjections.
Mr. Gillies: I get a garble of responses, but we all know the correct answer, it is the ordinary working people who use our transit systems. Is this the government of the little guy? Is this the government of the ordinary person? Is this the government of the working man who will be paying this extra fuel tax through his bus tickets? I am appalled.
Mr. Wildman: There are no free buses.
Mr. Gillies: The member for Algoma (Mr. Wildman) is absolutely excited; he is agreeing with me so heartily. He knows the ordinary guy buying a bus ticket is going to pay through the teeth for this insensitive tax increase. He speaks up for the little guy at every opportunity.
Mr. Andrewes: There are no buses in Algoma.
Mr. Gillies: There should be. When the time comes, the member for Algoma is going to vote with this party against this insensitive fuel tax increase. I know he is, and I applaud him for it.
Mr. Wildman: I am not sure this is a point of privilege, but when they build a subway line from Wawa to Sault Ste. Marie, then I might agree with the member for Brantford.
The Deputy Speaker: That is not a proper point of privilege.
Mr. Gillies: I am glad the member for Algoma raised the subject of that subway line. I was about to get to it.
We have a government --
Hon. Mr. Van Horne: We were threatened with this before.
Mr. Gillies: No. Some day the Minister without Portfolio will be quoting from this speech.
This government came to power with the help of the third party with an agenda which spoke to the desires and aspirations of the working people of this province. This party engineered its way into power, into the government of this province, with the support of the New Democratic Party by speaking to an agenda for working people, for low-income people, for those in need of help.
Those are the very people who are going to pay through the teeth because of Bill 50. Those are the very people who are going to bear a disproportionate burden because of this tax increase. We in this party are not going to stand for it.
I want to return to a point made so eloquently by my friend the member for Cambridge. He is experienced and as knowledgeable about the transportation industry in this province as any member of this House. He knows the trucking industry. He knows the nuts and bolts of moving our goods to and fro between our cities and towns and our consumers.
Hon. Mr. Sweeney: Did the member check his colleague's last election returns? The truckers did not support him this time.
Mr. Gillies: I said he knew the truckers better than anybody.
Hon. Mr. Sweeney: The truckers did not support the member for Cambridge this time.
Mr. Gillies: Mr. Speaker, please restrain the minister. He is making this very difficult.
The member for Cambridge has pointed out how people everywhere in this province depend more on the trucking industry for the delivery of food and other goods than on any other form of transportation. We are talking about ordinary people; we are not talking about fat cats or corporations. We are talking about ordinary people who depend on trucking to live.
Who takes it in the teeth again because of Bill 50? Who takes it because this government has decided to peg the fuel tax, not at a reasonable level, not at the lower end of the scale, but at the higher end of the scale? Who is going to take it in the teeth? The ordinary people, because as the cost of these goods goes up that will be a reflection of the added fuel cost, which is probably one of the major contributors towards the cost of transportation.
I do not understand how this government could bring in something so myopic and so insensitive. In a province as vast as ours, in a province that has a longer network of roads than any other jurisdiction in North America, I do not understand how this government could feel it was fair and equitable to take such a tax grab from the very people who depend on our vital transportation links.
There might be an excuse for this if the additional funds made available to the consolidated revenue fund because of this tax grab found their way back into improvements of the transportation links within this province. I invite you, Mr. Speaker, to look at our colleague's budget. I invite you to look at the 1985 Liberal budget and tell me if the additional funds from this tax grab find their way into the Ministry of Transportation and Communications.
Are we going to find additional funds to improve our roads, to improve highway construction, to ease the very transportation of goods about which our party is concerned? I will ask my colleagues again, "Do we see an additional commitment in this budget to the Ministry of Transportation and Communications?"
Some hon. members: No.
Mr. Gillies: What do we see? We see the budget of this very important ministry cut by the ministry that is taking the tax grab out of the very people who use that system. We see it cut so a four-lane restricted access highway from Brantford to Woodstock cannot be finished on the original schedule; cut so people travelling the highways in my area have to face an unsafe situation on Highway 2, the most dangerous stretch of two-lane highway in Ontario. No increases, no improvements; cuts, cuts, cuts.
That is what we get from this government in return for the increase in fuel tax. So we will try again. Do we see improvements to our health care system? Do we see an increased commitment in terms of --
The Deputy Speaker: No. The highways had some connection with fuel taxes; the health care system does not.
Mr. Gillies: I am so glad you brought that up, Mr. Speaker, because I want to go right back to that very point. It is a very important point.
The money raised by Bill 50, the fuel tax increase, might be justified if it were going into improvements, say, in our health care system, to improve our hospitals, to improve our physical plant in our health care system, to improve the benefits under the Ontario health insurance plan.
Do we see that as a result of Bill 50? Do we see an increased commitment by this government to our health care system? No, again. We see reductions in physical plant; we see reductions in overall commitment.
10:10 p.m.
The Deputy Speaker: I would again mention to the member that it is not permissible to carry on in this way and to connect everything in such a fashion. Would you restrict yourself to the Fuel Tax Amendment Act?
Mr. Gillies: I certainly will, Mr. Speaker, and I want you to know how well taken your caution is, because nobody could inhabit that chair and have the respect and the immediate attention of this member more than its current occupant.
I have one final point in speaking to the fuel tax.
Mr. Breaugh: Is the member for it or against it?
Mr. Gillies: I am absolutely appalled about it.
The second-largest industry in this province, and some forecasters say one day the largest industry in this province, is tourism. We should be offering every incentive to attract people to come into our vast and beautiful province and to travel its highways, see our various attractions and see everything that Ontario has to offer in all its diversity, yet every step of the way that effort is going to be frustrated by Bill 50.
Our visitors are going to be faced with higher transit costs. Our visitors from Europe, which for the most part has very reasonable municipal transit costs, are going to be appalled when they see the cost of a bus ticket as a result of Bill 50. Our visitors from the United States are going to be disappointed and frustrated in their efforts to travel as a result of this.
An hon. member: Think of our visitors from the press gallery. They are totally disappointed. They are thoroughly appalled.
Mr. Gillies: The member for Scarborough West is shouting his agreement. He is indeed as appalled as I am by this fuel tax increase.
An hon. member: I cannot be shouting. I am out of my seat; I am not even here.
Mr. Gillies: What was that?
An hon. member: I do not know who this is.
Mr. Gillies: I am with him.
One thing I would like to touch upon, of course, is the trend in the motive fuels of our automobiles. There is sufficient evidence that we should in some fashion be trying to get a larger percentage of our automobiles switched over to diesel fuel as opposed to gasoline. It leads to fewer hydrocarbon pollutants than does the burning of gasoline.
Do we see a government that encourages conversion to diesel fuel? Do we see a government that encourages the purchase of diesel automobiles? Do we, through this bill, see a government that encourages lower levels of automobile pollutants in our province? No, quite the opposite. We see an increase in diesel tax that is going to negate and frustrate the efforts of many of our automobile drivers to switch over to this lower-pollutant fuel.
On every side of the issue we on this side of the House, in this party, are absolutely stymied.
Hon. Mr. Bradley: The members over there have been on every side of the issue.
Mr. Gillies: The Minister of the Environment is as appalled as I am, and he is just voicing his concern. He is absolutely appalled that this government is encouraging air pollution through this tax. The transportation industry is as appalled as I am about the move the government is taking in this direction. The Minister of Tourism and Recreation (Mr. Eakins), if he were here, would be as appalled as we are. I do not see any single front on which the Treasurer of this province should be able to defend this indefensible tax.
I would recommend to him, I would suggest to him, I would urge him to rescind Bill 50. Do not bring in this 6.6 per cent tax increase on the working people, the working men and women who depend on diesel fuel, the farmers, the users of municipal transit, the trucking industry. Rescind this tax and return some measure of fairness to our handling of diesel fuel.
Mr. Eves: I would like to take a somewhat different tack in this debate. I have heard some very good arguments made by the member for Cambridge (Mr. Barlow) and the member for Brantford (Mr. Gillies).
First of all, we are talking about the removal of the ad valorem tax, as indeed we are in Bill 51, An Act to amend the Gasoline Tax Act. We have a government that is supposedly very committed to removing ad valorem taxes because it regards them as inequitable. This is the same government that, while world prices for fuel and oil are going down, is raising taxes and professing to do the public of Ontario a great favour. They are raising this tax in Bill 50 by 6.6 per cent, which is far greater than the rate of inflation this year or in recent years. They are milking the public while professing to treat them more equitably.
As my colleague the member for Brantford has already pointed out, the average user of fuel is going to pay more at the pump at a time when the world price is going down. If the ad valorem tax were left alone, the tax would be going down along with the price. Our friends across the way in the government do not seem to understand that very simple fact of life today.
This is the government that in the same budget sought to increase provincial income tax by piggybacking it as it is on the federal income tax. If that is not an ad valorem tax, I do not know what is. The Treasurer goes around the province professing that he is increasing provincial income tax by two per cent when he knows very well that, piggybacked on to the federal tax, he is actually ending up with a four-percent increase in percentage rms to the taxpayers of Ontario.
I do not know how the people in government, and in particular the Treasurer, can profess to be dealing equitably with the taxpayers in these two types of taxation. The treatment is totally inconsistent. There is also no equity.
It has been said the Treasurer has leaked some rumours and intentions about what he professes to do with Bill 51, the Gasoline Tax Amendment Act. If, as is rumoured in the media, he is willing and prepared to limit or eliminate altogether the proposed tax increase in Bill 51, we on this side of the House are entitled to know why he is not willing to do the same with Bill 50. They are very similar except different types of fuels are being taxed. Surely what is good for the Gasoline Tax Amendment Act is good for the Fuel Tax Amendment Act.
I presume the only reason he is going to do something about Bill 51 is that his colleagues down here to my extreme left are insisting that he do something about it but are not insisting that he do anything about Bill 50. There is absolutely no consistency whatsoever in the Treasurer's treatment of these two taxes, which are very similar. As I have said, they are just on different types of fuel.
If we look at where the revenue from the fuel tax goes, my colleagues have already pointed out the disadvantage this results in to the trucking industry. We all know that every consumer pays one way or another for the increased cost of transportation. If this fuel tax increase is allowed to go through, it will ultimately affect transportation rates in Ontario, and that in turn will ultimately affect the price of any product or produce that is shipped by truck to its destination. The taxpayers are again going to pay for this increase.
Surely, as my friend the member for Brantford has already pointed out, the increases in fuel tax and gasoline tax should go to improve the highway system in Ontario. We do not see any evidence in this budget, in which all these bills were introduced, of an increase in the budget of the Ministry of Transportation and Communications or a fulfilment of the promises made during the May 2 election campaign to vastly improve the highway network across Ontario.
Particularly in my own riding, I can rhyme off four or five highways that were supposed to be improved by the end of 1985 by the current government, as pledged by their Liberal candidate in the last provincial election campaign. They have not even bothered to call tenders or do any engineering on these measures that were promised by their candidate. Highway 654 from Highway 11 into Nipissing was supposed to be done; it has not even been called yet.
10:20 p.m.
The Deputy Speaker: Might I bring the member to order to get back to the Fuel Tax Amendment Act directly?
Mr. Eves: With all due respect, I think these are all related. Surely the revenue from fuel tax and gasoline tax should be going to improve the highway system in Ontario. What we have here is a government that seems intent on reaping the revenue and stripping the Ontario taxpayers of this revenue, but it is not prepared to do anything for the taxpayers in return or for the users of the provincial highway system.
Our friends in the third party are very interested in whether the gasoline tax is going to cause undue hardship to residents of northern Ontario in particular. With respect to residents of northern Ontario, surely our friends in the third party should have these same concerns for this increase in the Fuel Tax Amendment Act. We are talking about a different fuel, but surely those who live in northern Ontario should know better than anybody else the large distances that are involved to ship goods by truck or rail in northern Ontario. Surely we all know that as a result of this increase in the Fuel Tax Amendment Act, northerners again are going to be hit the hardest.
If our friends in the New Democratic Party are going to stand for their principles on gasoline tax, surely they should be standing for their principles on the Fuel Tax Amendment Act as well. There is absolutely no rationale for two totally different treatments or approaches by the Treasurer, other than the fact that the third party has let it be known that it will not support the government with respect to Bill 51.
I want to deal with another issue in this whole bill which I do not think has been dealt with yet, and that is the search and seizure provisions. In the Fuel Tax Amendment Act, we see that the current government is planning on repealing subsection 18(3) of the act. Just so there can be absolutely no doubt in any member's mind exactly what is being done, I want to bring the members of the Legislature up to date on exactly what provisions are being done away with. Subsection 18(3) of the Fuel Tax Act, 1981, says:
"The minister may, for any purpose related to the administration or enforcement of this act or the regulations, with the approval of a judge of the Supreme Court, which approval the judge is hereby empowered to give upon ex parte application, authorize in writing any officer of the Ministry of Revenue, together with such members of the Ontario Provincial Police force or other police officers as he calls upon to assist him and such other persons as are named therein to enter and search, if necessary by force, any building, receptacle or place, or any motor vehicle powered by fuel for documents, books, records, papers or things that may afford evidence as to the contravention of any provision of this act or the regulations and to seize and take away any such documents, books, records, papers or things and retain them until they are produced in any court proceedings."
The Deputy Speaker: May I remind the member that it is out of order to read verbatim from any document.
Mr. Eves: Mr. Speaker, are you suggesting that in this Legislature, when we are talking about acts of the Legislature, we cannot read the sections of the act and debate the particular sections and the wording therein?
The Deputy Speaker: Certainly you can read and refer to sections, but it is out of order to read the entire act or --
Mr. Eves: I can assure you I have no intention of reading the entire act, only the relevant sections that deal with search and seizure provisions, which I think are very important measures this government is purporting to take.
I hope the Minister of Revenue (Mr. Nixon) has discussed these very important changes in the search and seizure provisions with the Attorney General (Mr. Scott), because I would find it very interesting indeed if the Attorney General, being the learned man of the law that he is, would have agreed to these changes being made in the Fuel Tax Act, 1981, particularly the repeal of subsection 18(3).
What the government plans to replace it with are the relevant sections of the Provincial Offences Act dealing with search warrants. While I do not intend to read the entire Provincial Offences Act -- I would never profess or propose to do that -- I think it is very important to read the relevant provisions with respect to search and seizure that are going to replace subsection 18(3) so that members can compare the two sets of provisions and decide for themselves which is more equitable, which leads more to a police state, if you will, and which does not.
Perhaps we can start with section 142. Subsection 142(1) says, "Where a justice is satisfied" -- I think that is a very important distinction, because the previous act referred to a judge of the Supreme Court; his approval was needed -- granted, ex parte, but at least the minister had to go through the procedure of applying to a judge of the Supreme Court of Ontario.
We now have this being replaced by the Provincial Offences Act where a justice, as defined by section 1 of the Provincial Offences Act, refers to a provincial court judge or to a mere justice of the peace. With all due respect to justices of the peace, they are not as learned in the law as Supreme Court justices are.
We now have, therefore, the government professing to make the search and seizure provisions, in its words, "more stringent" when in fact it is taking them from a Supreme Court judge and giving them to a mere justice of the peace.
I will continue on with subsection 142(1). It says the other party does not have to be there during these proceedings. I want to make that very important distinction, because it is not accomplishing what it professes to set out to accomplish in the first place. It says:
"Where a justice is satisfied by information upon oath that there is reasonable ground to believe that there is in any building, receptacle or place,
"(a) anything upon or in respect of which an offence has been or is suspected to have been committed; or
"(b) anything that bears reasonable ground to believe will afford evidence as to the commission of an offence,
"he may at any time issue a warrant in the prescribed form under his hand authorizing a police officer or person named therein to search such building, receptacle or place for any such thing, and to seize and carry it before the justice issuing the warrant or another justice in a county or district in which the provincial offences court having jurisdiction in respect of the offence is situated to be dealt with by him according to law.
"(2) Every search warrant shall name a date upon which it expires, which date shall not be later than 15 days after its issue.
"(3) Every search warrant shall be executed between 6 a.m. and 9 p.m. standard time, unless the justice by warrant otherwise authorizes."
I do not think the Treasurer understands what he is doing by repealing subsection 18(3) of the act. If he thinks he is improving the search and seizure provisions of the act and giving the public a break, we, in our learned opinion on this side of the House, do not think he is doing that at all.
Before, at least, one had to appear before a judge of the Supreme Court of Ontario and get a Supreme Court of Ontario justice's permission to go ahead and search and seize for the Minister of Revenue. Now what we have is a replacement of that section where one can go upon a note taken by somebody, I presume in the Ministry of Revenue, to a justice of the peace who is not as learned or well trained in the law as a Supreme Court judge is, and produce one's evidence in a written affidavit or upon oath before him and get a search warrant to enter the premises and search and seize anything one needs in carrying out his duties, supposedly, under the Fuel Tax Act.
The Treasurer is making a most unconscionable amendment. I strongly suggest and urge him, as I did earlier, to discuss the matter in some great detail with the Attorney General before he proceeds with section 5 of this bill. From what I can read, it does not accomplish the motives and goals he says he intends to accomplish by passing this amendment and changing the legislation.
Furthermore, when we go on and look at section 143 of the Provincial Offences Act, which deals with the retention of things that are seized, we see it is even more elaborate and specific in the Provincial Offences Act than it was in the previous Fuel Tax Act. Section 143 goes on to say:
"(1) Where any thing is seized and brought before a justice, he shall by order, (a) detain it or direct it to be detained in the care of a person named in the order; or (b) direct it to be returned, and the justice may in the order authorize the examination, testing, inspection or reproduction of the thing seized upon such conditions as are reasonably necessary and directed in the order, and may make any other provision as in the opinion of the justice is necessary for its preservation. "
Mr. Speaker, as you can readily see, the Minister of Revenue is not accomplishing what he professes to accomplish under section 5 of the act.
On motion by Mr. Eves, the debate was adjourned.
The House adjourned at 10:30 p.m.