Assemblée législative de l'Ontario

L042 - Thu 7 Nov 1985 / Jeu 7 nov 1985

LAND TRANSFER TAX AMENDMENT ACT (CONTINUED)

TOBACCO TAX AMENDMENT ACT

LAND TRANSFER TAX AMENDMENT ACT (CONTINUED)

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The House resumed at 8 p.m.

LAND TRANSFER TAX AMENDMENT ACT (CONTINUED)

Resuming the adjourned debate on the motion for second reading of Bill 48, An Act to amend the Land Transfer Tax Act.

Mr. Partington: I am pleased to speak with respect to Bill 48, An Act to amend the Land Transfer Tax Act. I wish to record my opposition to the bill, particularly clauses 2(1)(a), (b) and (c), which basically place a tax on the purchase of property. The tax does currently exist. It is $4 a thousand on the first $45,000 and $8 a thousand above $45,000. As it is proposed, the act increases the tax from $4 per thousand to $5 per thousand up to $55,000 -- that is a half of one per cent -- and above $55,000, the act increases the tax from $8 per thousand -- from eight tenths of one per cent -- to $10 a thousand, which is one per cent.

On the face of it, that might not appear to be a very serious increase. What it does is impede, discourage and place in jeopardy the opportunity of families and young people, particularly first-time home buyers, to buy a home. Buying a home and owning a residence is a right that every person in Ontario should have. This tax increase is hurtful. It undermines the chances of many people in our community of owning a home. It is front-end-loading first-time home buyers out of existence.

This government should be moving now to encourage home ownership. Home ownership is an important part of housing policy. There has been a great deal of emphasis placed recently on rental accommodation and the developing crisis of zero vacancy rates. Surely this government should be moving to redress that problem by encouraging home ownership.

It might appear from the printed version of the bill that it is an innocent increase, but at $45,000 the tax goes from $180 to $225, that is a 25 per cent increase on the face of it, but I will be happy to show the House that it is much higher than that.

At the $100,000 rate, the tax on a house jumps from $620 to $725. That is an increase of $105, which works out to 17 per cent. I am sure that when we talk about $100,000 purchases and $45,000 purchases, figures such as $225 and $725 seem a small amount of money. However, the House should be aware that when people make purchases of the nature of $100,000 they may be paying down $10,000, and when they make a purchase of $45,000 they may be paying down $4,500, the balance being borrowed money.

I noticed in the Toronto Sun yesterday the Toronto Real Estate Board's statistics on the average resale price of homes in the city of Toronto. I guess Toronto is some distance away from a $45,000 house. The average resale home in Toronto in 1984 was $102,318 and the average resale home in 1985 in Toronto had increased to $112,831. That is an increase of $10,513 on an average house.

Last year the tax collected on the average house in Toronto amounted to $638.50. That is the old tax on the old price. One year later, the tax collected on the new average house sale in Toronto is $853.31. That is an increase of $214.81 that a new home buyer has to bring in when he buys a house in Toronto. That is a 34 per cent increase in the amount of money a first-time home buyer has to pay Ontario for the privilege of buying a house. Again, it is only 34 per cent and that is only $214.

Hon. Mr. Nixon: A lot of people think it is lawyers' fees.

Mr. Partington: I say to the Treasurer (Mr. Nixon) it is $853. We have what appears to be a 25 per cent increase on the low end and a 17 per cent increase on $100,000. I might mention that once one gets above $55,000 the tax increase for similar figures is 20 per cent.

I am quite happy to disregard what happens once we get up in the higher figures because I do not think it is applicable. We should be looking at what most people in Ontario buy, at what most home owners buy. We should recognize that most home owners are not rich. A house purchase is the single most important investment they will ever make in their lives.

The House may believe that land transfer taxes in the range of $400 to $800 is not much money, but let me explain what happens when a first-time house buyer goes about buying a house. If he is buying a house at the $112,000 level in Toronto, which appears to be an average price sale, he may be paying in total $11,000 down; he is borrowing the rest. He or she is a working man or woman and if he or she is fortunate, and it may be necessary, his or her spouse will also be working.

At the time of buying the house, they have to pay mortgage application fees, mortgage appraisal fees. We are in the range of $250 to $400 for that item alone.

Mr. Haggerty: It sounds like a lawyer's field day.

8:10 p.m.

Mr. Partington: Maybe this is a time when a lawyer's explanation might be appropriate. Then a survey is required and that costs between $500 and $750. That is reality and it is time the government understood reality. Then there are registration fees and municipal fees for getting tax certificates and property standard clearances, and so one adds on $100 there. Then there are reasonable legal fees, I must admit, that can run anywhere between $500 and $1,100.

When we put all that together, the home buyer probably has to come up with $2,000 or $3,000 in addition to the $11,000 he has to put down to buy the house; maybe 30 per cent of it.

Mr. Haggerty: How about the lawyer's fees?

Mr. Partington: I just discussed that.

Mr. Speaker: Perhaps the honourable member would address his remarks to the chair and disregard the interjections.

Mr. Partington: I am sorry, Mr. Speaker. I just got carried away because I believe this is a tax that truly impedes home ownership at a time when home ownership should be encouraged.

This government is not just putting a $200 increase on a tax this year. It is asking a member of the public to pay $800 to $900 on maybe an $11,000 investment. At the same time, that individual has to come up with $1,500 to $2,000 in additional expenses. The land transfer tax is becoming the straw that is breaking the proverbial camel's back.

At a time when all those costs are incurred, the first-time home buyer is usually also hit with things like tax adjustments, heating oil, buying drapes, fridges and stoves and paying moving expenses. I think experience would show that normally a first-time home buyer often has to depend on next week's paycheque to help put the transaction together. He does not have $200 extra in after-tax earnings to pay a 34 per cent increase in land transfer tax to the government of Ontario.

Home ownership, as I indicated before, should be encouraged. Home ownership stimulates construction, landscaping endeavours, decorating, home furniture sales and a myriad of other activities that help to make this economy work.

The Land Transfer Tax Amendment Act, as I indicated earlier, is impeding and will impede home ownership if it is passed in its present form. We have heard the Minister of Housing (Mr. Curling) and others talk from time to time about the housing crisis and the apartment rental crisis. One way to ease that crisis is to encourage home ownership, and certainly this government should not increase the tax rate. This is an ad valorem tax. The tax goes up 10 per cent or more every year anyway.

Mr. Wildman: I thought the members of that party liked that.

Mr. Partington: The member should listen, because they are the ones who should be defending the status quo.

Mr. Wildman: The member's party introduced the ad valorem in the first place.

Mr. Partington: I am talking about the first-time home buyer. The tax on the average house in Toronto in 1965, 20 years ago, was $38. It will be $853 if this amendment is passed. That is a big increase.

To get back to the thrust of my argument, we have to encourage home ownership. The tax should not be increased. If this government were thinking of a strong housing policy, it would not even maintain the status quo with respect to the Land Transfer Tax Act. It would and should exempt first-time home buyers from the land transfer tax. Let us help these people buy houses.

If the government does not want to exempt first-time home buyers, there should be an allowance. The land transfer tax should kick in after the first $25,000, after the first $50,000; or maybe, at least here in Toronto, after the first $100,000. But the government should be doing something to encourage home ownership. It should not pass a bill that destroys and inhibits the ease of purchasing houses.

I urge every member of this House, and particularly members of the third party, to be concerned about the average working man, to be concerned about the first-time home buyer, to help these people to have an environment in which they can raise their families, where they can grow, where they can invest and, when they reach retirement, they can have a nest egg for their future. To do that, the government must amend this act. They must not pass it in its present form.

Mr. Callahan: I am going to be very brief on this matter. A house is something most people buy only once in a lifetime. If my friend the member for Brock (Mr. Partington) is talking about the speculator, I cry for him because he is going to have to bring in that extra money when he buys those five, 10, or 15 houses. That drives the price of houses up. It is not the home owner who buys one house, it is the speculator, and I have no sympathy for him at all.

Most of the people I have acted for over the years considered the land transfer tax to be something they paid for that most precious commodity, their first-time purchase. Maybe we should be addressing the question of other costs. I have never seen a client come in yet for whom a lawyer could not reduce his fees if that person was in difficulty. Or perhaps we should be looking at something the Tories never looked at, the introduction of a land registry system which allows a person to simply mechanically check out the title instead of constantly having the legal profession, year after year, purchase after purchase, do the same title search every time and charge the same fee for doing it.

I have never seen any progressive legislation during the Tory regime of 42 yawning, ho-hum years when they addressed that issue. Had they done it, there would not be this additional cost involved for the legal fees. It could probably be done at this time through just putting a coin in a machine and getting a title. It is done in the United States and I cannot understand why it has never been done in Ontario, except that it was the friends of friends.

My friends on the other side of the House, rather than having this one-time purchase tax by paying this small pittance the Treasurer has brought forward, would tax car seats for children and feminine hygiene products. In Ottawa, they tax the senior citizens -- all the people who cannot fight back. I suggest this tax is eminently fair. It approaches it from the standpoint of something very sensitive to the Treasurer; it is a matter of a one-time purchase.

The Leader of the Opposition (Mr. F. S. Miller), the former Treasurer, seemed to have the information we were going to increase the sales tax to nine per cent. He thought that because he would have preferred to raise the sales tax to nine per cent and reap a great vast amount of money, not once but every time someone bought a commodity, most specifically children's car seats or feminine hygiene products; or he might close a hospital or two to try to get the money to look after this province. Instead, the present Treasurer in this sensitive government looked at it in terms of the items which will affect people on a one-time basis, and it is a very minor increase.

That tax, along with the other taxes contained in the Treasurer's budget, demonstrate a very sensitive government, a government which cares about the people, not one that will go out and try to find areas where it can tax people on the basis of their not being able to fight back. That tax in itself demonstrates the humanity of this government.

8:20 p.m.

Mr. Cureatz: I would like to take the opportunity to say a few words with regard to this very novel idea of increasing taxes in Ontario.

First, I would like to congratulate the Treasurer. In times gone by, he and I had many interesting discussions. When I was in the lofty position of Deputy Speaker, I can remember only too well when he was House leader, and heaven forbid, when the member for Sudbury East (Mr. Martel) was the House leader for the New Democratic Party, and we had some trying times in the chambers. I can think of other more blissful occasions, such as little trips to Newfoundland and carrying on on the beach. He has come a long way now that he is Treasurer of Ontario.

I notice everybody has been centring in on the more detailed aspect of this tax. I have a concern in terms of what the Treasurer plans to do with all this money.

Hon. Mr. Nixon: Spend it.

Mr. Cureatz: Spend it. Now that he mentions spending it, the first area of concern I have is exactly what benefit this has for the farmers of Ontario. With regard to the budget, the increase in taxes and this bill, I cannot see how the Treasurer is going to come forward with a great plan to help the farmers.

For all the people in the back row over there on the government side, the former Treasurer in a past incarnation, when he was House leader over here, had a great story about the White bean picker. Does the Treasurer remember the White bean picker?

Hon. Mr. Kerrio: They were soybeans.

Mr. Cureatz: He is looking so blank. This is an interesting story concerning the White bean picker, where White Farm Manufacturing Ltd. made a combine which was the combine of combines apparently. This combine could pick beans so fast that one would blink his eye and finish 100 acres. The Treasurer, in his esteemed wisdom and through the graciousness of his heart, decided his farm would be the ideal place to try out this White Farm bean picker. Does the Treasurer remember those days?

I want to know why this tax is being placed on prospective property buyers when we are not told by the Treasurer how he plans to spend the money from this tax, and more specifically, spend some of it for the great farmers of Ontario. I hope in his summation he will be relating to all members of this House how he plans to spend the money.

Mr. Callahan: We are spending it on the past sins, Minaki Lodge, Suncor.

Mr. Wildman: What has all this got to do with the bill.

Mr. Cureatz: The member for Algoma (Mr. Wildman) wonders. He is not sure what it is all about. I am not sure what it is all about either.

Do members remember this picture? Was this not great? Signed, sealed and delivered. Do members remember that one in the Toronto Sun? It is getting a little faded around the edges, but I dug it up out of the many files.

Hon. Mr. Nixon: Your death knell.

Mr. Cureatz: Maybe, and maybe it is going to be the Treasurer's death knell at some future time.

I would like to know where this tax falls under the accord. I have been looking through this feverishly and I do not see anything under here with regard to the Land Transfer Tax Amendment Act.

Mr. Martel: Keep looking.

Mr. Cureatz: The member for Sudbury East says to keep looking, and I am looking. It is headed, "An Agreement for Reform of Minority Government." We will see how the vote comes in regard to some of these tax bills and we will see who really understands the parliamentary process. Let us take a look. It says:

"We undertake the following:

"The leader of the Liberal Party will not request a dissolution of the Legislature during the term of this agreement except following defeat on specifically framed motions of no confidence."

Let us take a look at specifically framed motions of no confidence.

Mr. Mantel: Would the member speak to the bill?

Mr. Cureatz: Mr. Speaker, I am hardly the one to give you advice on whether I am speaking specifically on a bill or not, but I assure you in the fullness of time I will come exactly to the point in question, and that is in regard to the Land Transfer Tax Act.

Mr. Speaker: I have been waiting.

Mr. Cureatz: With regard to the accord, when we take a look here, we see, "Proposals for action in first session from common campaign proposals to be implemented within a framework of fiscal responsibility." Here we go.

"Introduce reforms to the Occupational Health and Safety Act." That is very honourable, I must admit. "Continue the pre-budget freeze on the ad valorem gasoline tax." We have not got to that one yet. "Wind up the Royal Commission on the Northern Environment. Provide full coverage of medically necessary travel under the Ontario health insurance plan."

Where in this accord is there anything about the Land Transfer Tax Act? Is this the new behind-the-scenes government, the one we were so fearful of? Is this the hidden agenda? Suddenly, we have the New Democratic Party supporting the Liberal Party with regard to the Land Transfer Tax Act. I am wondering whether this is the thin edge of the wedge. At last we have really seen the true colours of the New Democratic Party.

Mr. Foulds: Those within the red line. Do you know there actually is a tax reduction in this bill?

Mr. Cureatz: I am going to talk about the member's leader again and all the lawyers in these chambers. We all know how well the Treasurer likes lawyers, barristers and solicitors. One day what I would really like to do --

Mr. Speaker: Order. I appreciate there may be some legalese in your remarks that I do not understand, but please come back to the land transfer tax.

Mr. Cureatz: There is some legalese here you do not understand, Mr. Speaker, but if you allow me to continue it will become very clear.

The point is that the Treasurer dislikes lawyers immensely. We can look back over Hansard for years. Even in the humble eight or nine years I have been here, in speech after speech he continues on about how he dislikes lawyers. What I would really like to know is who his law firm is with regard to placing mortgages on his farm, the farm I often heard about from that great former member, Eric Cunningham. He used to complain all the time about visits to that lovely farm out in George's -- am I close?

Hon. Mr. Nixon: St. George. The last time the land transfer tax was paid on that was 1848.

Mr. Cureatz: That is the point. For the Treasurer, it does not hurt too much because he has not paid it. The Treasurer has acknowledged it does not hurt him personally, but the point is it will hurt a lot of people across Ontario with regard to new purchases.

Who really gets stung with regard to the land transfer tax? My learned colleague alluded to the fact, and the Treasurer even shouted over to me, that the lawyer usually gets stung. Everyone is saying that the land transfer tax is an extra bill the lawyer is billing to his client.

I was most moved by the new member for Brampton (Mr. Callahan), who has since left. He indicated it was about time this small pittance of a tax came into being. I will remind all members of this chamber that the member for Brampton practises criminal law. He is not too worried about the Land Transfer Tax Act and the increase of taxes with regard to this legislation. It does not matter a hill of beans to him because he is out there in the criminal court.

Mr. Offer: Where is the member from?

Mr. Cureatz: Let me remind all the members of something, including the member for Mississauga North (Mr. Offer), because he is doing some real estate. I will get copies of Hansard and make sure we send them out to all the lawyers of the Law Society of Upper Canada in Ontario so all the lawyers will know that the Liberal Party is not interested in the legal profession whatsoever, as indicated by the member for Brampton.

Hon. Mr. Nixon: Who was it who did not give them more legal aid money? It was the Tories.

Mr. Cureatz: Indeed, the Treasurer is not very interested in the legal profession in Ontario. He indicated to me in this House -- we will have to check Hansard later -- that the law firms get stuck as if it were an extra bill. We can solve that problem. Maybe with this increase in taxes the Treasurer could run around and explain to all the people of Ontario that the humble lawyer should not get blamed with regard to this increase.

8:30 p.m.

I am surprised the leader of the third party has not stood up in defence of his own legal profession from time to time. I heard by the grapevine he did a very honourable job in thanking the guest speaker, the Premier (Mr. Peterson), at the University of Toronto law school criminal division reunion. I was hoping that at some time in these chambers I would see the leader of the third party stand up and mention something about his profession, but never a note. I thought this would be his chance, that, finally, he would get up and say, "I am concerned about the Land Transfer Tax Act."

I was hoping the member would get up and say: "Do you know why, Treasurer? It is because lawyers always get blamed for it." Whenever they send out their bill, it always says land transfer tax, which is extra money that should be paid to the Treasurer. I am very confident the leader of the third party will be getting up very soon and expressing those kinds of concerns about his own profession.

If the Treasurer is not going to do that, let us take another look at where he might spend the money. I wish he would be a little more clear about the Land Transfer Tax Act and the increase he is putting on people buying property in Ontario. He yawns nonchalantly.

I want to remind the members in the back row on the government side that if I have listened to one speech in this chamber, I have listened to 100, 200, 1,000 by the now Treasurer. One of his great speeches all the time was about a fellow by the name of Charles MacNaughton. Do the members recall Charles MacNaughton? I do not because I was not here at that time.

Mr. Martel: I remember him.

Mr. Cureatz: Then the member can correct me if I am wrong.

The present Treasurer always used to say to the then Minister of Transportation and Communications, Jim Snow, who, I see -- that is another story for another time. He used to say to Jim Snow: "I am very disappointed in you as the Minister of Transportation and Communications. What happened to those huge budgets with regard to road building in Ontario?"

Does the Treasurer remember those great speeches? It brought tears to my eyes. I would be sitting in that chair and taking out my Kleenex. He would say, "Where is all that money for the roads in Ontario?" Maybe this is where the money is now going to go. But before we support the bill, it is incumbent upon the Treasurer to have fuller explanations on the spending aspects of the Land Transfer Tax Act. I bring up that item to refresh the Treasurer's memory.

Interestingly enough, speaking of roads, he has commented to me that he would often take a little trip to visit his daughter in Belleville somewhere. A little nod? Yes? No? At one point, he said he had had a little trip on Highway 401 travelling east from Toronto.

Mr. Wildman: Does this have much to do with the bill?

Mr. Cureatz: Mr. Speaker, this is very interesting. If you listen and be patient another minute or two, I will confirm to the member for Algoma that it is right on point with regard to the Land Transfer Tax Act.

Highway 401, the great artery of Ontario, more specifically southern Ontario, is now getting -- is there a hush in the chamber?

Mr. Wildman: They are all asleep.

Mr. Cureatz: Ruts, R-U-T-S. What is the rut? Everyone is laughing and giggling. Big deal. Highway 401 is getting ruts.

Mr. McClellan: Who is the member talking about?

Mr. Cureatz: I will tell the member. I have had constituents coming into my two riding offices, transportation truck drivers, ordinary people driving ordinary cars, complaining that once their vehicles get in those ruts they cause accidents, because the tires get set into those parallel lines and when they try to get out and pass they lose control and the car overturns.

This is very serious. I wrote to Ed Fulton. Have you seen Ed's name now on these great massive signs which, I must confess, I always felt a little embarrassed about?

The Deputy Speaker: Order. Would the member please address the chair; and second, refer to members by their ministry or their riding.

Mr. Cureatz: These beautiful big blue and white signs, which formerly had the name of the Minister of Transportation and Communications, Jim Snow, now have Ed Fulton. I wrote to Ed --

The Deputy Speaker: Would you please refer to the ministers by their ministries or their ridings.

Mr. Cureatz: The Minister of Transportation and Communications.

I said, "Dear Mr. Minister," and then I crossed it out, as we all do, and said: "Ed, I have this problem. Through my riding and into the riding of Northumberland, Highway 401 is getting very dangerous to drive on. We are getting great big deep ruts in it."

Mr. Wildman: The member could have said this during the budget debate.

Mr. Cureatz: Do not worry. It is coming to fruition.

I said, "I want to know what you are going to do." He sent me back a nice letter and said: "The problem has been resolved. We have put signs on the highway telling people the highway is unsafe and to be very careful when driving."

I must give credit to the Liberal government. Sure enough, true to their word, there are the new signs on the major artery of Ontario that say, "Hazardous driving for the next one kilometre." Are the people over there listening? This is important. Write it down. I want them to get copies of it in Hansard and send them to the other Liberals who are not here so they can use them for night-time reading.

The Deputy Speaker: Would the member return to the bill at hand?

Mr. Cureatz: They put up a great big sign that said, "Caution: Hazardous Driving," not for one kilometre, not for 3.6 kilometres, but for 36 kilometres. Then there is another sign, "Caution: Hazardous Driving," another 52 kilometres. I would not mind the signs being up if we were assured that at some point the Minister of Transportation and Communications would come out with a full budgetary comment about Highway 401 being fixed up.

What does this have to do with the bill? We want to know whether the Treasurer, when he raises this pittance of a tax, as his own colleague the member for Brampton said, is going to guarantee to this chamber that some of those pittances are going to go towards the maintenance of some of our major roads in Ontario.

Mr. Martel: The member's party was in power for 42 years.

Mr. Cureatz: The road just deteriorated now and it is now their responsibility. Do not forget, you guys are supporting them. Remember the accord? I think you should be embarrassed that the road is in such a condition. In my next column I will mention that the third party is responsible for the condition of Highway 401.

The Deputy Speaker: Order. Will the member please address his remarks through the chair, and there will be fewer interjections.

Mr. Cureatz: My train of thought, until I was interrupted, was where the Treasurer was going to be spending this pittance of a tax, as the member for Brampton indicated.

I have another area of concern, and I am so happy, so very pleased. Do members remember a gentleman who used to say, "In my heart of hearts"? Does the member for Sudbury East remember that? He used to say, "In my heart of hearts." I am so pleased in my heart of hearts that the Minister of Energy (Mr. Kerrio) is here, because if I had some assurance from the Treasurer that this pittance of a tax would go -- and this is going to be good -- towards the continued construction of the Darlington generating station, then I would feel a little more comfortable about it.

The Treasurer, the Minister of Energy, the Chairman of Management Board (Ms. Caplan) and all his other cabinet colleagues are eventually going to have to bite the bullet in regard to the Darlington generating station. Although the minister appeared before the committee, smiled very nicely and had all kinds of wonderful things to say to us about energy, he did not specifically say what his government's policy was going to be with regard to Darlington.

I wonder whether I have a little clue that this pittance of a tax in the Land Transfer Tax Amendment Act is going to go to the continued construction of the generating station. I am looking forward to the comments of the Minister of Energy with regard to this bill to see whether that is going to be the case. If it is not the case, then we are going to look with great interest to the decision of the Minister of Energy and his cabinet colleagues some time in January or February with regard to the generating station.

Last but not least, we on this side of the House are very concerned about the detailed aspects of the legislation. As a matter of fact, I spoke with my colleague the member for Dufferin-Simcoe (Mr. McCague), and he is interested in some specific sections of the legislation. He is so interested that he is not even quite sure which way we should be supporting the specific aspects of the legislation. We shall all wait with bated breath for the end of the evening to see whether we will be supporting it.

8:40 p.m.

Mr. Wildman: I listened attentively to the member for Durham East (Mr. Cureatz). I was very moved by his plea for the poor lawyers, although it was somewhat self-serving. I wonder where he had dinner this evening. I was a little disappointed that the member, who when he served as the Deputy Speaker was well respected on all sides of the House for his ability to maintain a debate on topic, could go on at such great length about the White Farm bean-picking machine, harvester or whatever it was called.

Hon. Mr. Nixon: Combine.

Mr. Wildman: Combine. The only relationship it had to the matter at hand was the very fact that the whole speech did not amount to a hill of beans.

Mr. Andrewes: The member for Durham East outdid himself, and he has stolen some of my thunder.

I want to address some comments to this piece of legislation and to the Treasurer as they relate to the agricultural community. I am sure the Treasurer has been well briefed by the Ontario Federation of Agriculture, as recently as yesterday, that farms in Ontario now change hands an average of once every 15 years. That may not be the case in the area of St. George, but it is the case across the province.

The Treasurer is well aware of the problems in the agricultural community. If he is not aware of those by now, I am not going to spend a lot of time enumerating them, because I am sure the boys at Earl's have kept him up to date. When I travel my riding, I cannot get to Earl's because I cannot afford to make that trip. When I travel around my own riding, I go into such esteemed social establishments as Christie's Dairy Bar, Keith's Restaurant and Ernie's Restaurant in Grimsby, which was formerly the Peach Bar. It was appropriately renamed Ernie's. I do pick up the odd tidbit of information. I have learned --

Mr. Cureatz: On a point of order: I would like the honourable member to confirm whether these are the same people who own Earl's garage.

The Deputy Speaker: That is not an appropriate point of order.

Hon. Mr. Nixon: The reference to Ernie's Peach Bar was a nonparliamentary slur.

Mr. Andrewes: It is Ernie's Restaurant, formerly the Peach Bar. It was renamed when Ernie became the proprietor. He renamed the Peach Bar.

I want to stress to the Treasurer that this particular tax does have some modest influence on life in the agricultural community. The Treasurer has provided some partial exemption on single-family residences, which are currently eligible for the farm tax rebate. However, the Treasurer, above all in his caucus -- and when I look at his caucus here this evening I do not see a strong agricultural influence. There is the member for Oriole (Ms. Caplan) and the member for Niagara Falls (Mr. Kerrio). We have some at the southwest end on the government side of the chamber.

The Treasurer, because he was raised in an agricultural community and has been briefed by the Ontario Federation of Agriculture, knows the pressure on that sector. He knows that the agricultural industry is in a state of transition and that in many instances consolidation of farms is occurring on a daily basis. It is something I think all of us recognize as being necessary and that we should be encouraging. However, what the Treasurer has done with this tax is punitive. In the long run it probably will not limit sales. Those sales will take place anyway. However, it is another nail in the already tight and uncomfortable coffin the agricultural community finds itself in.

I am going to suggest the Treasurer consider extending the exemption he has given on the land transfer tax to the second residence on the farm and to any agricultural property so he can provide what the member for Brampton has properly described as a humanitarian consideration to this legislation. I believe that will encourage the kind of consolidation and rationalization we know must take place in this industry. I urge him to consider that as an amendment to his bill.

Hon. Mr. Nixon: I guess the land transfer tax originally was designed to pay for the registry office and the services therein. It was probably just a few farthings at the bottom of the lawyer's bill, going back into the 17th century or whenever they started it. I am not sure it is a good idea to make it a direct revenue producer, but it has happened and I guess it will continue. There are still costs associated with registry, and as the member for Brampton has pointed out so carefully and usefully, there are many improvements we ought to consider.

I thought I should mention that because the member for Durham East asked me how the money was going to be spent, and I want to remind him that in this jurisdiction we do not have earmarked revenues, except under rare and special circumstances. The revenues go into the consolidated revenue fund and are spent under the direction of the Management Board of Cabinet and under the collective responsibility of the government of Ontario, responsible to this House and eventually to the people and finally, I suppose, to the good Lord, who judges us all.

The specific questions asked in the debate had to do with the exemption of apartments from the surtax. We considered this carefully and felt that in the circumstances, with our ongoing Liberal housing policy that is coming to grips with the needs of the province, it would not be practicable to add a surtax at that point, but condominiums and duplexes do attract the surtax.

The farms do not attract the surtax as long as they are officially farms. We designate them official if they are in receipt of farm tax reduction payments that go out over my signature. As long as they are official farms, they do not attract the surtax.

We gave this lengthy and careful deliberation, feeling it should be brought up to date as a revenue producer, but we do not feel it has an unduly heavy effect on any purchaser. The recommendation by way of revenue from the surtax level is so small that it is vanishingly small and is meant to apply only to an Eaton starter house.

8:50 p.m.

I looked over this legislation and saw how it would be rather readily understood. I cannot imagine why any member of the official opposition would not know whether to vote for or against it, other than to quote a note from the Deputy Minister of Revenue. He quotes Charles MacNaughton, who, he said, once said in a debate in this House, "Anyone who is not confused here tonight does not really know what is going on."

It is fortunate that as Minister of Revenue, even though I have had this responsibility for only a short time, with the effective briefings available to me from the qualified staff in the ministry I am quite prepared to respond to questions and to convey information. If, God forbid, any scintilla of this information is not readily available, I will put members in touch with the appropriate officials.

Once again, I point out to members on all sides that in my judgement the bill in its principle is eminently supportable, and I look forward to unanimous support in this regard.

The Deputy Speaker: Mr. Nixon has moved second reading of Bill 48, An Act to amend the Land Transfer Tax Act.

All those in favour will please say "aye." All those opposed will please say "nay." In my opinion the ayes have it.

Hon. Mr. Nixon: By agreement -- unanimous agreement of the House, I trust -- we would postpone the division, under your direction, Mr. Speaker, until 10:15 p.m.

The Deputy Speaker: With unanimous consent, the division on second reading of this bill will be postponed until 10:15 this evening.

TOBACCO TAX AMENDMENT ACT

Hon. Mr. Nixon moved second reading of Bill 49, An Act to amend the Tobacco Tax Act.

Hon. Mr. Nixon: This bill replaces the ad valorem taxation of cigarettes and cut tobacco with a specific tax per unit. Future tax changes will not now be automatic but will require the approval of the House.

Utilizing this approach, the bill proposes that the new specific tax for cigarettes be 2.7 cents per cigarette. The new specific tax for cut tobacco and all other tobacco products except cigars will be 1.5 cents per gram or part of a gram. The tax rate on cigars remains at 45 per cent. These rates will take effect on the day following royal assent.

To simplify the objection 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 rights of entry, search and seizure for any purpose related to the administration or enforcement of the Tobacco Tax Act is repealed. In its place, the corresponding entry, 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 to believe that an offence under the Tobacco Tax Act has been committed.

Other amendments in this bill are administrative in nature and consequential on the replacement of the ad valorem tax on cigarettes and cut tobacco with a unitary tax. They include the repeal of provisions defining taxable price per cigarette and taxable price per gram and of those authorizing the minister to make regulations prescribing the taxable price for cigarettes and per gram of tobacco.

Mr. Dean: The Treasurer (Mr. Nixon) has outlined the details of the bill in a brief summary. As with some of the other bills, the procedural and administrative items in it are not particularly contentious. I believe him when he says it is supposed to facilitate the processing of the tax and any appeals therefrom.

However, I do not agree with him that the removal of the ad valorem tax is a good move. It seems to me the Treasurer has removed the ad valorem tax on those items where there is some likelihood the price will decline. I cannot help feeling he is trying to look as though he is removing something when it may not be in the best interests of the people who would like to see the tax go down.

Be that as it may, I do not believe this government should be encouraging the production or use of tobacco by whatever means it might be using. It should have left the tax as it was.

This matter of the fix that some of the tobacco farmers find themselves in is one I can certainly have sympathy with, as a person who has tilled the soil. However, in the face of massive declines in demand and therefore sales, the only real way to solve the problems of the tobacco producers is to find something else for them to produce on the soil. That is where the efforts of the government should be concentrated.

As I believe I mentioned in the earlier part of the budget debate, the focus of the government's funds that it is using in the so-called transition proposal in the budget -- I believe it was announced again today -- should not be to bail out somebody who is about ready to go under in the tobacco business or in any other kind of farming, but rather should be encouraging farmers to switch to something else at a much earlier stage in the possible growth of their problems.

There are a lot of things that can be grown in this soil. There are a lot of others that perhaps could be; we do not know at the moment. I would like to see the government propose the establishment of more research to find a better and more socially acceptable product that could be raised on that soil and, therefore, find an alternative way of making a living for the farmers who are finding it difficult to keep up the kind of tobacco sales they are used to.

We could take a leaf out of the former government's activities -- when I say "leaf," I am not referring to a tobacco leaf -- we could take a leaf out of the former Conservative government's book. When faced with something similar in the declining demand for freestone peaches, although I agree it was on a slightly smaller scale, our government encouraged growers to plant clingstone peaches, which were in demand, so that process of changeover could be speeded up.

Tobacco is a lot easier to change over than trees. Any member who knows anything about trees knows it takes a long time to get one into production. When one yanks out a full-grown tree, it is going to be some years before one gets back to that stage again. That is the sort of innovative application of our ingenuity the Treasurer would be wise to encourage in his colleagues, rather than a bailout procedure for farmers who may be having a tough time in the tobacco business.

In short, I think the efforts to assist our colleagues in the tobacco farming community should be positive rather than a last-ditch, "just-on-the-brink-of-bankruptcy" rescue mission.

Be that as it may, whether the government will see fit to do that, which I urge the Treasurer to discuss with his colleagues, I do not believe we can support this bill as it stands.

Mr. Foulds: We support this bill. We do not believe in the ad valorem tax it removes. We also feel -- personally, I feel strongly -- we have reached the point where the so-called sin taxes are nonproductive. Taxation should simply be used as a method of gaining revenue, and so we support this tax.

9 p.m.

Mr. Lupusella: I am delighted to rise to make some short comments about this issue. Maybe I need some clarification from the Treasurer. There is a deletion of ad valorem taxes, but I think the taxes paid on cigarettes are going to be increased, so that means there is revenue to the Treasury. Do I understand that correctly? I might be wrong. I do not know.

As I thought, this bill will generate more money for the government. We understand the terrible effects of smoking cigarettes and tobacco in Ontario. I express my concern to the Treasurer. Will he be able to spend some of that revenue to educate the public about the detrimental effects of smoking cigarettes? I am sure all the tobacco farmers in Ontario are going to hate me for saying this, but we all understand the terrible effects of smoking cigarettes and cigars. The province has to show leadership and take a stand on that issue because it is detrimental to the health of our citizens.

In this bill, even though there is an increase in taxation, I had an opportunity to find out that the Conservative government in Ottawa is giving millions of dollars to the farmers. It is time we faced this dilemma and spoke frankly to farmers about this problem and tried to help them in a different way. Does it make any sense to raise money from the sale of cigarettes and then see another level of government giving millions of dollars just because the farmers are in terrible financial hardship with relation to this bill?

I hope the Treasurer will take my comments into consideration because I think it will be beneficial to the citizens of this province.

Mr. McCague: The purpose of this bill is to replace the existing ad valorem tax on cigarettes with a flat tax rate. The Liberals contend that an ad valorem tax was unjust and unfair and that all future tax changes will not be automatic but will require the approval of the Legislature.

The right -- right over there or the left -- left, whatever we want to call them, do not quite understand that all taxes -- and granted, the government inherited them -- be they retail sales tax, income tax, corporations tax, whatever, are all ad valorem taxes. The sooner the members opposite get that into their minds, the better. They do not understand. As a matter of fact, I am not sure the Treasurer understands, or the member for Sudbury East (Mr. Martel).

Mr. Martel: You are the only one who understands anything.

Mr. McCague: The member is getting revved up, by God. Let her go, Elie.

The Acting Speaker (Mr. Morin): Order. Would the member please address his comments to the chair?

Mr. McCague: Yes, Mr. Speaker. Would you tell the member for Sudbury East the sooner he gets revved up to his old style, the better things will be in this House? Would you mind telling him that?

The Acting Speaker: No.

Mr. McCague: He would not mind telling him, he says. That is great.

In any event, is not the retail sales tax an ad valorem tax by another name? I do not need an answer now. When sales go up, the retail sales tax automatically brings in more revenue. Income tax is an ad valorem tax by another name. When one's salary goes up, one's income tax goes up automatically.

I ask the Treasurer, when federal income tax increases, does not Ontario automatically get a larger slice of the pie? Will his government now move to change the retail sales tax process? I think not.

Would the Treasurer mind paying attention, as he has asked me to do on several occasions?

Hon. Mr. Ruprecht: In one ear he hears you; in the other he hears me.

Mr. McCague: He is much more interested in what I have to say than he is in what you have to say.

Mr. Andrewes: I am sure what the member for Parkdale (Mr. Ruprecht) has to say goes in one ear and out the other.

Mr. McCague: It is a through process. Never mind.

The Treasurer knows of what I speak. In hindsight, we in the Conservative Party made a mistake. We called a couple of taxes on wine and cigarettes, those sin taxes, ad valorem. On fuel, we called them ad valorem. Had we called the others ad valorem, I suggest the Treasurer would not be suggesting today that we remove all those, what he does not want to refer to as ad valorem taxes; he is willing to carry on the ones the public does not quite understand and try to diminish those the public seems to understand.

In Bill 49, the government removes the ad valorem tax and replaces it with flat tax which brings in more revenue than the ad valorem tax.

Mr. Wildman: That is true.

Mr. McCague: I thank the member. That is the first visible sign of support.

Under the ad valorem tax we received $5.32 in tax on a carton of 200 cigarettes. Under the Treasurer's plan we receive $5.40 in tax on a carton of 200 cigarettes. I hope those figures are right. When I say "we," I am referring to we, the citizens of Ontario. I happen to be one of those who has not quite broken the habit of supporting the tobacco growers of this province. I do not think the Treasurer sincerely applauds that, even though he did.

Hon. Mr. Nixon: I will accept the member's money under any circumstances.

Mr. McCague: That is right. The only smoke I have seen from the Treasurer is smoke and mirrors. I happen to puff away on occasion.

The Treasurer has always espoused his concern for the tobacco farmers in Ontario and the problems they have been facing. I understand that. A lot of them are from his area and, to this point, it has been an important industry for this province.

A few years ago, in Simcoe county and very close to it, we had 100 tobacco growers in that general area. After a few years they found they could not stand the frost up there. I understand the people down in his area cannot stand Nixon. Who is going to put them out of business: Jack Frost or Bob Nixon? I am not sure.

The Treasurer raised the tobacco tax, which will bring him an additional revenue of $8.8 million per year, and put in his budget $6 million to be used for farmers forced out of the business by his government. The cost to the farmers of Ontario is an additional $1.2 million in taxes.

The Treasurer will recall the opening of the Norfolk county fair, a great fair. Fairs are very important to this province, as I know he will agree. There, 100 angry tobacco farmers stormed the traditionally peaceful county fair demanding that the Minister of Agriculture and Food (Mr. Riddell) -- the Treasurer knows who he is -- help their faltering industry. Rather than the usual cheerleaders and laughter, the minister found himself faced with angry protesters and placards. The demonstration degenerated quickly and the protesters had to be dispersed by the police after about 10 minutes.

9:10 p.m.

Barry Murray, chairman of the Ontario Flue-cured Tobacco Growers' Marketing Board, said the protest was an indication of the growers' frustration. He added that he felt bad about the demonstration, but the minister had to understand that if he were losing his home and watching his life being destroyed before his eyes he would act similarly.

I remind the Treasurer that he is now the government.

Mr. Wildman: If this were Margaret Thatcher's government, they would be bringing in law and order.

Mr. McCague: Would the member remember that too? He is one of the pups in the litter. The Minister of Agriculture and Food stated at a luncheon later, "I want tobacco growers to know there are 80,000 farmers facing problems this year and they all have to be taken into consideration." I agree with that, but that is no consolation to the people who were there to talk to him. He continued, "We cannot just help tobacco farmers because they happen to find themselves in trouble this year." The minister also stated that the province is considering setting aside four cents per pack of cigarettes to be used to bolster export tobacco trade. It is a good idea.

He said he would be setting up a meeting of the Treasurer, the producers and the manufacturers to see if such a deal was possible. He declined to elaborate but indicated that if it worked out the deal would be included in the next provincial budget.

I see nothing in the budget suggesting an additional tax of four cents per pack of cigarettes to be used to bolster export tobacco trade. Was this proposal ever seriously considered'? The Treasurer will respond later and I am sure we will get the answer. It will be a first, but I am sure we will get the answer.

Did the Treasurer meet with the groups mentioned by the Minister of Agriculture and Food or did he consult with the boys at Earl's garage to see if they supported such a move? I have no problem with the Treasurer consulting with the boys at Earl's garage. He and I are both grass-roots politicians who agree one gets a lot of good ideas at Earl's garage or McKee's Tire Service in Nottawa, or Rutherford's Car Sales in Beeton; and one can go on and on with that list, but he cannot get all his advice from there. There are some problems that he has to deal with as Treasurer which they do not understand. That is no insult to the people at Earl's garage and not even an insult to the Treasurer.

In a recent pre-election Toronto Star article written by Bill Walker, the government promised the use of one per cent of the province's ad valorem tax revenue for research on alternative crops to tobacco. Now that the government has removed the ad valorem tax and replaced it with a specific tax per unit, when can we expect one per cent of the present tobacco tax to be redirected for research on alternative crops?

We will get the answer when the Treasurer concludes his remarks.

Hon. Mr. Nixon: That will be a first.

Mr. McCague: For him, yes; he is exactly right.

Hon. Mr. Nixon: I thought I would say it before the member did.

Mr. McCague: I already said it. It will be a second.

The government stated it wants to aid the financially sick farm industry, but farm spokesmen indicated it would have to put more money where its mouth is if it wants to find a cure.

"This is a remarkable budget. Farmers' reactions run from indifferent to negative on this one," stated Bridget Pike of Wolfe Island, first vice-president of the province's largest general farm organization, the Ontario Federation of Agriculture. She also pointed out that between March 1984 and March 1985, Queen's Park collected $583 million in tobacco tax; 82 cents per package of 25 cigarettes.

Does the Minister of Natural Resources (Mr. Kerrio) have something to say?

Hon. Mr. Kerrio: Yes, this speech could be worse.

The Acting Speaker: Would you please address the chair?

Mr. McCague: That is right. The minister can make another statement tomorrow.

The extra tax will add another $8.8 million to provincial coffers and about $12-million worth of adverse publicity from the farming community. This is Bridget again, talking about the Treasurer and his colleagues. "They are killing the goose that laid the golden egg; bleeding the guys to death before they can make the adjustments they have to make."

The president of the Christian Farmers Federation of Ontario said he had to be short in his comments, "because there is not much to comment on." The president of the Canadian Farmers' Survival Association also said, "Six million dollars will not meet the needs of farmers in trouble."

Together, the 2,000 tobacco farmers in Ontario produce 90 per cent of Canada's crop. The problem they face is supply and demand. As demand for tobacco has gone down in Canada, they have a supply surplus problem. Initiatives should be taken to aid them to cultivate new foreign markets.

This government has done very little in this direction. In other words, it has done very little for many of its constituents who happen to be tobacco farmers. The only new program for farmers introduced in this budget is a $6-million fund to help them get out of farming to pursue other occupations. There is nothing in the budget to help beleaguered farmers stay in farming.

We will have to weigh our alternatives in view of the actions the Treasurer has taken and let him know a little later.

Mr. Gillies: I will find it hard to follow my learned colleague, who is such a knowledgeable farmer, someone who is well versed in these matters of high finance because of the high offices he held in the former government.

I did want to say a few words about the tobacco tax, because it is of considerable importance. The tobacco industry is still of considerable importance to the part of the world the Treasurer and I come from. I do not know how this tax is going to go over at Earl's Shell; I suspect it will not be one of the major topics of conversation. But I do not think it is going to go over very well at all at the Delhi Belgian Club Ltd. The Treasurer has many friends down at the Belgian club in Delhi, Oscar Van De Walle and others. I could go on and on.

This part of the world is hurting. The tobacco farmers have been reeling for some years under --

Mr. Wildman: Tory rule.

Mr. Gillies: I do not think the member can blame the blue mould on us, but he can try if he wants to.

They have been reeling under a number of very serious setbacks in that industry. We recall that not so long ago in our part of Ontario the wealthiest, most prosperous and largest employers in the farming industry were the tobacco farmers. They were out buying a lot of new cars and a lot of new appliances and building big houses. It was a very good type of farming to be in.

They just seemed to be hit with one thing after another in the last couple of years. They complain incessantly about the levels of taxation on their product, not just provincial taxes but also federal taxes. Lord knows they complained enough about the taxes our government imposed on tobacco. They had a serious problem several years running with the blue mould, which seriously infected the tobacco crop. They have had ongoing complaints about the labour situation. All these things tie in to the situation they find themselves in and the effects this bill and the taxation will have.

I want to touch on a few of these things. I would not mind increases in tobacco taxation so much if I felt that the additional revenue raised was going to go towards helping to defray the costs that the effects of smoking have on our health care system, but as I have pointed out in this House before in question period, we do not see that. We see a reduction in the increase in health care expenditures from some $800 million last year to about $600 million this year; we see a reduction in this government's commitment to the capital expenditures necessary to keep our hospital system in first-class shape, so I do not see the extra money going there.

9:20 p.m.

We had a presentation in our caucus the other day from the Non-Smokers' Rights Association, and it pointed out -- I have no reason to doubt the statistics -- that smoking is probably the number one contributor to the death of adults in this province, more than anything else one can name, more than drunk driving, more than traffic accidents, more than anything. This is a fact with which we have to come to grips.

My feeling about this tax, quite frankly, is that it is not going to do a heck of a lot. It is going to raise a bit more money in the short term than the ad valorem tax would have. I wonder if in the long term the ad valorem would have raised more.

This government has to come to grips with the tobacco industry in all respects. It has to come to grips with the fact that these farmers are hurting and they are not able to sell their crop. It has to come to grips with the fact they are not able to compete against imported tobacco from countries in South America where labourers are paid $40 a month. It has to come to grips with a situation where to harvest, plant, succour and prime the crop that they do have, they find they have to import labour from the Caribbean.

In a time of high youth unemployment this is always a bit of a mystery to me, but we do still have to bring in a large number of people to help with the tobacco crop in our part of the world. Lord knows, I am not going to be overly critical of that. Some of these families in Jamaica and other countries in the Caribbean probably need that money to raise their families as much or more than many of our workers do. Just the same, it leaves one wondering why they cannot get young people to help harvest the crop.

People are losing their farms, they are planting less and they are selling less. This government has to come to grips with the fact that a $6-million Band-Aid program in this budget is not going to make the difference, that we have to have some sort of meaningful program to get these farmers off tobacco and into other crops. I do not pretend for a minute that that is going to be an easy task. The soil that lends itself to growing tobacco does not lend itself to many other crops that are going to achieve any kind of return similar to what these farmers can get from tobacco.

There have been some very interesting experiments in Brant county and in Haldimand-Norfolk with the planting of peanuts. Anyone who has been down our way and goes down Highway 24 from Brantford towards Simcoe will pass Picard Peanuts, which has been the largest commercial venture in this regard thus far. If one talks to the people who have tried it, the people at Picard or the other people who are planting peanuts, they are less than enthusiastic and they are less than ecstatic about the results they are getting. There is the same problem. Imported peanuts from South America and from the Third World at cut-rate prices are almost impossible for an Ontario farmer, with our labour and material cost, to compete against.

Other crops that might be suitable for this soil are hard to find, but I would urge the Treasurer to tell his colleague, the Minister of Agriculture and Food to launch a large-scale and meaningful research project into what might be the best uses for this soil. What can we offer these farmers by way of tangible assistance, guidance, training, grants or whatever might be required to get them off tobacco and into some other crop?

Mr. Wildman: If they would legalize pot, that would be a real revenue-getter.

Mr. Gillies: The member for Algoma has a suggestion that I would not dare to repeat in this House.

I have to feel this is the answer. We talk about trying to provide incentives to increase tobacco exports from Ontario to elsewhere. It might work and it might generate some additional percentage of sales. I do not think this is the answer. I do not think in the long run our friends, the tobacco farmers in southern Ontario, are going to be able to mount much of a competition against the cut-rate material coming in from the Third World.

Many tobacco farmers speak to me and they feel that one of the answers is a national, Canada-wide marketing board. They are pushing for that. For whatever reason, we have had numerous meetings and presentations on this matter -- I am sure the Treasurer is as frustrated as I am -- but this proposal is stalled in Ottawa.

Hon. Mr. Nixon: What is the member going to do about the Tory government up in Ottawa?

Mr. Gillies: It is up there and the members from the area, regardless of their political stripe, know that --

Hon. Mr Nixon: Oh, yes, no politics.

Mr. Gillies: Let us not have any politics in here. They know that this is what the farmers want, and there it sits up on Parliament Hill. As to the long-term, tangible benefits of a national marketing board in tobacco, I have to wonder if that is much of the answer.

I will oppose this tax and I expect our caucus will oppose it. I do not think it does a heck of a lot. I do not think it addresses the problem. I urge the Treasurer to look at these things. He knows as much as or more than anybody else about the plight of tobacco farmers in this province. I urge him to look at a meaningful off-tobacco program, at a meaningful increase in the commitment in our health care system to combat the costs to this province of the effect of smoking. The health care costs of smoking in this province, I am led to understand, are staggering. We do not see a commitment in this budget to meet that challenge, nor any of the other challenges that face our health care system.

We need a meaningful program to move farmers out of tobacco and into other crops, so they can keep their farms and achieve a reasonable income for their families. The Treasurer should continue to urge the federal government to move, or at least to make a decision one way or the other, on the question of a national marketing board and to take a head-on and multifaceted approach to the problems that face our tobacco farmers.

My colleague the member for Dufferin-Simcoe (Mr. McCague) mentioned the situation the Minister of Agriculture and Food found himself in when he went to the Simcoe county fair. I did my usual stint a couple of days later at the Progressive Conservative Party booth at the Simcoe fair. I missed my friend the member for Haldimand-Norfolk (Mr. G. I. Miller). He was at the Liberal booth another day. We missed each other on that trip.

Regardless of political stripe, I do not want to see a Minister of Agriculture and Food for Ontario having to wade into a mob of angry people to try to justify a situation where they feel they have been deserted by their government, and that they cannot work their land to raise their families and keep their farms. I do not care whether it is a Liberal or a PC minister --

Mr. Rae: Or.

Mr. Gillies: -- or a New Democratic Party minister, the member for York South (Mr. Rae) cautions me. Heaven forbid.

I hope we can take a meaningful approach to this situation, so that even a year or two years from now, when my friend the member for Haldimand-Norfolk and I go down to the Simcoe county fair, the minister will not have been greeted by an angry mob but by a group of people saying, "Our government listened and took steps to alleviate our problems."

Mr. G. I. Miller: I was not going to enter into the debate on the tobacco tax issue, but after listening to the two members from the opposition, I felt I should rise and clarify a few points about what the tobacco industry has meant to Canada, and to Ontario in particular. Tobacco has built an area of Ontario where there was nothing but blowing sand; the area could grow nothing. There were very poor crops in the 1930s. It has grown from that to a very prosperous area. Tobacco has been one of the reasons.

The point has been made by the member for Brantford (Mr. Gillies) and the member for Dufferin-Simcoe that there are alternatives that might be utilized to take the place of tobacco. I am not promoting tobacco. Our young people should be concerned for their health and future. Everyone has to make a decision and we should make the point very strongly as far as the health of our young people is concerned.

Tobacco was used by the Indians. It was used by my grandmother, who used to smoke in the little house behind the barn so the kids could not see it. There is much satisfaction from the pipe and smoking. Going back to the services, our young people who stood up for us always looked forward to cigarettes from home. They could barter them if they did not smoke and make a pretty good profit. Many of those stories were related to me.

9:30 p.m.

We are talking about a community where there are roots. They built, struggled and provided homes, and the community and the province are depending on it.

We can put them out of business and import it. I will give an example: the burley tobacco producers. Not a pound of burley tobacco has been grown this year, and we are still importing $5 million to $6 million worth of tobacco to replace that. Is that what we really want to happen in Ontario? Put our farmers out of business and then import it from the Third World countries when we can do it here?

As long as it is on the shelf, I think we have to be realistic. The Minister of Agriculture and Food has taken strong steps to strengthen the agricultural industry, and he has done that in the light of the fact that tobacco is an agricultural industry. It was indicated by the former Minister of Transportation and Communications, on the opposition side now, that only $6 million was put into replacement of crops. That is not true. The budget last year was $330 million, and now it comes in at $410 million. That is an increase of at least 21 per cent.

There is a farm program with $50 million set aside to reduce the interest rate on long-term debts, and all farmers in Ontario can take advantage of that. We have announced a program today where they can get advice, a call-in program, so all farmers can take advantage of it -- and tobacco farmers are included in that -- which is going to be useful.

Again, we have to take a strong look at what we are doing to this community. The ad valorem tax has been taken away at the request of the Flue-Cured Tobacco Growers' Marketing Board so they may be able to get that extra money directly from the manufacturers to the producers rather than coming through the Treasury. I think the general public does not want to see the money coming from the Treasury to support the tobacco industry, but if we can get it out of the products, we may well set an example on how we can get a better return not for only tobacco, but also other farm products.

Mr. McCague: The member does not believe that.

Mr. G. I. Miller: I certainly do. I have lots of faith that the industry is going to survive. I have lots of faith that the tobacco board has been a leader in organizing and marketing its products. They worked closely with the member's former ministry over the last many years. It was that government that brought in the extremely high taxes to trigger the whole situation we are in now. The federal government has again moved in with an increased tax much higher than inflation this year.

I do not think we should be out to destroy an industry; we should be out to control an industry. I think the tobacco producers are only too glad to work along to protect our health. If they see their farms going down the drain, they are going to scrap for them, and that is really what they were doing at the Simcoe fair. They could see that the people were not listening.

One can come in with all different crops, such as asparagus, tomatoes, blueberries or raspberries, and they are all trying to do it. I can name many farms in that business that are in financial trouble today. I will not get into names, but I know they are out there. We have an overproduction and our tomato plants are closing down in Chatham.

The members opposite cannot name an industry that is going to replace the tobacco industry on that particular land. They are not going to find them. As long as the tobacco is on the shelf, I think we should be supporting the industry. As one member, I intend to do that and I am sure the Minister of Agriculture and Food will treat it in the same way as the other agricultural industries in Ontario.

If the opposition really wants to take a stand on it, it should vote against the bill and put these people out of business; then the opposition can take the responsibility. It will not be me as a member for my area because I am going to fight for them.

Mr. Harris: The member is voting to increase taxes.

Mr. G. I. Miller: That is for a specific purpose. We have removed the ad valorem tax. At least it now has to be done before the Legislature; it is not done automatically. The money is going to be put back into an area --

Mr. McCague: You are the government over there.

Mr. G. I. Miller: We certainly are and we will accept the responsibility.

Mr. McCague: Why do you not do something?

Mr. G. I. Miller: I have just indicated the money that has been put into it.

The Acting Speaker: Order.

Mr. G. I. Miller: It makes me feel good to be able to take part in this debate. I hope the opposition will see that with reasonableness we can protect an industry that could well be shrinking. We should not be importing it. We should be producing it here and not destroying communities, homes and the foundation of our whole society.

Mr. Guindon: I am pleased to enter into this debate on the tobacco tax bill, which proposes to enact yet another of the tax increases the members opposite did not anticipate making last April.

The Liberal budget does not reduce taxes on tobacco products; yet in 1984 the now Treasurer called for action to reduce taxes on tobacco products. He said the tobacco industry was in a state of emergency. He also said he was concerned about driving tobacco growers out of business. Those were his words. We all know the tobacco industry is having difficulty and we should be trying to find ways and means to encourage it to find alternatives.

Is a $6-million transition fund really going to help tobacco producers by ploughing their crops right back into the fields? I do not think so. All the transition fund will do is help tobacco farmers get out of business and out of production. The minister said he was concerned about the loss of seasonal jobs in southwestern Ontario. "We cannot brush these aside," were his words. By not decreasing taxes on tobacco products, is he not shrugging aside this emergency? Is he not ignoring concerns he himself professed to have?

In 1984, the now Treasurer said to the then Minister of Agriculture and Food that he must not allow the next budget to go through without important adjustments downwards to the tobacco tax. Is he not doing just that? Is he not dismissing the effect of high taxes on an important and legitimate industry in Ontario? In 1984, the now Treasurer said he would be looking at an alternative crop.

Through the election campaign, the Liberals promised to spend one per cent of the tobacco tax on development of new products and alternative crops for the tobacco industry. We have not seen any of that. That is another promise that has gone down the drain. It has gone the way of the rest of the Liberal wish list.

Not only does this budget do nothing to help tobacco farmers, but the proposal to have tobacco advertising banned will hurt producers in the long run. What message are tobacco farmers in Ontario getting from the Treasurer, who says one thing when in opposition and quite another in government? They get the message that they should be very worried about their business and very worried about their future.

9:40 p.m.

Mr. Andrewes: I have been out of the precincts of the Legislature, educating myself on the question of tobacco with the aid of the member for Elgin (Mr. McNeil).

I want to say a word or two about the ad valorem tax. The change from an ad valorem tax to a specific tax has been generally well received by the Ontario tobacco industry. It does give it some direction and some stability for the coming year and allows it to do some constructive planning in an industry that certainly is in dire need of that kind of direction.

However, I do want to say a word about ad valorem, because many members here would suggest that ad valorem taxes are evil or punitive and that ad valorem taxes offend democracy. My colleague the member for Dufferin-Simcoe referred to the somewhat contradictory views that have been expressed by members of the government party on ad valorem tax.

I have listened very carefully to the arguments they have put forward over the years. I have even heard those same arguments in my own riding from some good Tories who have expressed similar concerns about ad valorem taxes and the fact that they have a kind of multiplier effect. However, in listening to the discussion here this evening, I have experienced what I would like to describe as reverse déjà vu.

The agricultural community for many years has gone before tariff boards and tariff panels -- the member for Kent-Elgin (Mr. McGuigan) will know this very well -- and argued about protections for certain agricultural goods from imports, protections that are called duties. For many years we fought hard to convert what were then known as specific duties to ad valorem duties because, as prices and costs rose, the inflation effect eroded the kind of protection that the duty was designed to give a specific agricultural commodity against a lower-priced import, particularly during the harvest season.

You will understand what I am talking about, Mr. Speaker, because you are very familiar with agriculture and you are particularly familiar with the seasonal aspect of agriculture and the impact of low-priced imports on our agricultural commodities in season. The view one might hold on the value of ad valorem as it is applied on a tax or a duty really depends on whose ox is being gored.

Yesterday I was privileged to meet with an individual who represented a nonsmokers' group. It took all my patience and endurance to sit through an hour and a half without chewing on the pacifier that the member for Haldimand-Norfolk and I often find ourselves engaged in. However, I did do that.

What astounded me was the fact that this individual suggested that the change from an ad valorem duty on cigarettes to a specific duty cost the Treasurer $130 million of forgone revenue. If that is true -- and I assume it is true; I do not doubt the spokesman for this group; if it is not true, I hope the Treasurer will correct me -- it seems rather picayune that all the government has to offer as a result of forgoing $130 million in revenue is a $6-million program of transition that amounts to a hand-holding exercise for those parts of the agricultural community that are hard pressed.

The Treasurer well knows the problems in the tobacco industry, as you do, Mr. Speaker. He knows of the 60-million-pound carryover from this year's crop. Based on an average price of $2 -- that is a fair market price if one traces some of the history of that crop over the past couple of years -- that industry is now sitting on $120-million worth, and the processing side of the industry is sitting on considerably more of that commodity from previous crops.

Here is an industry in trouble. It is experiencing a declining market -- a trend that socially and practically has to take place. In experiencing that declining market, the industry faces the fact that there is no other single agricultural commodity that one can grow in those tobacco lands that will ever yield the dollars per acre that tobacco does.

A number of young people have made investments in tobacco farms. They bought those farms in good faith with the expectation of good markets. They paid the land transfer tax, such as it was. They will continue to pay this exorbitant increase the Treasurer has imposed. These young people are now looking for leadership, encouragement and a sign from the government that there may be some hope.

I add those comments to those of my colleagues because they are important, not simply in dealing with a tax in a revenue bill but in dealing with the emotions and the future of young people who have invested a good portion of their lives and are willing to invest the rest of their lives in the agricultural industry.

Mr. Harris: I will be very brief, but I do want to make a couple of comments on this bill. Also, I apologize to the Treasurer for missing out on Bill 48.

Hon. Mr. Nixon: Would the member like to revert?

Mr. Harris: Would the Treasurer like to revert? I have a lot to say about Bill 48.

Hon. Mr. Nixon: Not with this Speaker in the chair.

Mr. Harris: One of the difficulties I have with the Tobacco Tax Act is the ad valorem approach. The industry does not appear to share my concern, so perhaps it is unfounded, but I do not mind putting it on the record and we will see what happens over the next year.

As my colleague just mentioned, the removal of the ad valorem tax has been generally well received by the industry. I suspect that is because, as some have referred to it in this Legislature, the term "ad valorem" has come to be known as something negative. The perception is that ad valorem means the tax always goes up.

9:50 p.m.

What bothers me a little is that I now hear of the sales coming in on cigarettes. The tobacco industry's sales are declining, and there is a surplus of the product, which means more competitiveness and the likelihood of lower prices. As of this week, Rothmans is selling 30 cigarettes for the price of 25.

From what I see of these signs, there is a very real possibility of cigarette prices going down. As I say, I may be wrong. Perhaps I did not hear on the radio yesterday morning of a sale by Rothmans, which is starting to sell its cigarettes at a lower price. If I am wrong, that is fine. However, the perception out there is that there is a surplus of tobacco products, and I suspect that is the case. That generally leads to lower prices.

What we have done by removing the ad valorem tax on tobacco products -- even without increasing the tax; if we had just left it -- is we have frozen the tax at what could be the highest level in the history of tobacco products. That was not enough, though. We increased the tax as well. Not only are we going to freeze it there, but we are going to hike the tax as well.

I have difficulty when I hear members opposite say what a wonderful bill this is. I admit that I am not from tobacco farm country, and I am not a farming expert. I am registering my concerns as an individual. God bless the tobacco farmers if they are happy with this; that is good enough for me. I will very likely be convinced by the Treasurer's closing arguments to support this bill. However, I do want to get my concerns on the record; perhaps the Treasurer can address those and see how persuasive he can be in convincing me that on balance this is a bill I should support.

I am concerned that there are two products in the province that have some likelihood of declining in value. They are two products out there in the world, Canadian and Ontario markets where I hear on the radio and television and read in the newspapers that there is a surplus and that there is the possibility of declining prices.

It strikes me as very ominous that those are the only two products where this government wants to take off ad valorem taxes. On gasoline, where the predictions are that the prices will go down, ad valorem would be very advantageous -- in fact, the tax would go down as prices go down -- and on cigarettes, the tax would go down if ad valorem were there. Ad valorem on declining prices is a very advantageous form of taxation for those who are concerned about the industry.

What is going up? I think it is very relevant to say this, because this is one of the two bills that suggest removing ad valorem is a good thing. What is going up? Housing prices are going up. The real estate market is going up. Did we remove ad valorem from that form of taxation? No. That one is going up; that is more money for the government. That is a bigger grab; so we will leave ad valorem on the land transfer tax.

Incomes also are going up; so we will leave the ad valorem on income. It is very easy to take ad valorem off -- well, I do not know how easy it is, but in my own mind it is easy; one pays X dollars for every $100 one earns, or if one wants to have an escalating scale, one can do that. I am sure ad valorem can be removed.

Hon. Mr. Nixon: Is that the new policy of the Tory party?

Mr. Harris: What I am talking about is the Treasurer's policy here. That seems to be my role this year, or at least for part of it. I accept that role, and I want to point out what I see as the inconsistencies.

For all the other forms of taxation, where everything is going up, ad valorem has been left on. For sales tax, one of the biggest revenue measures the Treasurer has, ad valorem is okay there. Yet on the two products that appear to have a likelihood of going down, ad valorem is removed and the likelihood of lower taxes is removed. In fact, we are now freezing taxes at a potentially very high level.

I have mentioned, and I want to repeat, that even if some think taking this ad valorem off is good, if my predictions are wrong, if cigarette prices are going to carry on going up and if removing the ad valorem will be okay, as the industry thinks, I do not understand why we are increasing taxes at the same time. We see it in the fuel tax bill, we see it in the gasoline tax bill and we see it in this bill. Did the Treasurer hope or think that by removing the ad valorem everybody would think what a wonderful Treasurer we have? He has removed the ad valorem on the wrong products; it is on the ones that are going down. Did he think they would not notice an increase in taxation?

The member for Haldimand-Norfolk spoke in favour of the tobacco farmers, and I respect that. Actually, some of the things he said made some sense to me, although there is nothing in this bill about any transition fund, and I doubt that the Treasurer is now going to start dedicating the taxes he receives. The fund may be a good thing. I am not sure all my colleagues agree with me on that, but I think it may be a good thing. However, it has nothing to do with Bill 49; it is out of general revenue.

When we are talking about this, we are talking about Bill 49, the one that increases taxes. I have difficulty with the member for Haldimand-Norfolk speaking in favour of this wonderful bill and at the same time saying that the higher tax that is going on tobacco is a benefit to the farmers.

I understand what the industry thinks about taking the ad valorem off and that some disagree with me; I understand that part. However, I fail to see why higher taxes on cigarettes are of benefit to a very hard hit part of the agricultural community, the tobacco farmers.

I should not be presuming to speak for them, as others here are much closer to them than I am. However, even though I am from northern Ontario, I want to stick up for them anyway, because I am not sure that some of those over on the other side of the House are sticking up for them for the right reasons. I think they are sticking up for the budgetary practice of the Treasurer rather than for the tobacco farmers.

I hope I have made my point. I know that some who are closer to the tobacco industry than I am disagree with me and will believe that three months from now or six months from now the price of cigarettes will be lower.

I am not proud of it, but this month I am a smoker. There are months when I can call myself a nonsmoker. I do not have the willpower to be able to come to this Legislature and tell members that I am a nonsmoker, because in this month I am back smoking again; so I know how much cigarettes cost on a daily basis.

I hope that three months or six months from now I will not be in the position of finding out on a daily basis what the price of cigarettes is. However, if I am, I will be very interested to see whether the price of cigarettes in Ontario is moving up or down.

10 p.m.

I hope I will not be smoking at that time, but I will still be very interested and I will be going to my corner store. It is Demarco's Confectionery. It is a little store, and I think the Treasurer might be interested in it. It is outside the church on Algonquin Avenue in North Bay. It is a little confectionery store where I buy my tobacco products and other things. We meet there and discuss many items. I get considerable advice there. I want to relay to the Treasurer that those people who sit around the tables at Demarco's Confectionery do not share the same opinion of the budget as those at Earl's garage.

Hon. Mr. Scott: Is Mike still there? Mike Demarco?

Mr. Harris: I missed what the Attorney General (Mr. Scott) said. It used to be a hangout for the Liberals?

Interjection.

Mr. Harris: That is right. It used to be.

Interjection.

Mr. Harris: Exactly. He knows Frank Demarco, all of them. It used to be a Liberal hangout; now it is a Mike Harris hangout.

The Treasurer has not been successful on any of his budget bills so far, but I look forward with anticipation to see whether he can convince me that I should support the Tobacco Tax Amendment Act.

Mr. Brandt: I wanted to take this opportunity to share with the Treasurer about the tobacco tax --

Hon. Mr. Nixon: The member has not read the bill.

Mr. Brandt: Yes, I have. I am delighted to see it did not go up even more, as many other things did in the budget.

I am out of breath. I just ran in the door --

Mr. Andrewes: Do you smoke?

Mr. Brandt: Yes, I am a smoker and I have been trying to quit for some time. The Treasurer in his eagerness to raise more money in this budget has, in spite of all the advice he received from his own constituents, one of the tobacco-growing hearts of this entire province, raised the very tax he criticized so frequently when he was on this side of the House. I find that deplorable. The very fact the Treasurer has done that and has taken that action would indicate to me he has no sensitivity whatever towards the farmers who are under a great deal of pressure and stress these days.

Mr. Newman: See the halo around his head.

Mr. Brandt: I hear the member has finally indicated he is concerned about the same tax. I am sure some of his farmers are concerned about the same thing. I want him to know this tax is going to hurt the very people who should be helped by this government.

We have heard from the Minister of Agriculture and Food on a number of occasions about how desperately he wants to help the farmers of this province. He could have indicated that by sending that message very directly to his colleague the Treasurer. Did he do that? My colleagues know he did not. He is insensitive to the needs of the farmers of this province, and more particularly to the boys at Earl's garage. Those are the boys who gave him the advice that he should not be raising this tax. He did not take that advice. In my view, that is a deplorable situation.

As I look through the entire budget and as I look at the $700 million the Treasurer has extracted from the taxpayers of this province and at the increase in the debt of this province, which is going to get completely out of hand with the irresponsible spending of that government, the tobacco tax is only one component of that entire exercise with which we on this side of the House simply cannot put up.

There are many measures in that budget we cannot accept and we will have to vote against them out of a responsible position we are taking to represent the taxpayers of this province. I felt compelled to share some of those remarks with the Treasurer. I rushed here from another appointment because I wanted to tell him how badly I felt about this tax and why we on this side of the House feel it is necessary for him to take, if he would, another look at his budget.

He should take one more look at that budget and, as he has so frequently stated when he sat on this side of the House, look at it in the context of what he can do to help the people of Ontario.

What can he do to help the farmers and tobacco growers in his own riding, the riding that he and his father have represented for so many years? The Treasurer has turned his back on them and abandoned them. It is with a great deal of reluctance I have to say that to the Treasurer, but I wanted to share those comments with him because I know he wanted to hear them.

I rest my case on the basis that once again, as throughout this budget in so many ways, the Treasurer has increased a tax that should not have been altered at a time when he should have been looking at helping the farmers, and the tobacco growers in particular, in a more direct way.

Mr. McGuigan: I rise in this debate because I also have tobacco growers in my riding. While we have a lot of ex-smokers here who are confessing their bad habits and bragging about the fact they now are ex-smokers, I am probably the only one here who can say he is an ex-tobacco grower. My father probably loved his tobacco crop or took more interest in his tobacco crop than any of the many crops he grew. During my early years in farming, I grew 25 or 30 acres of tobacco and I could tell the House a good deal about that industry from the perspective of a grower.

I rise to support this bill and to take a stand on the question of ad valorem. If we look at ad valorem in income tax, sales tax and many other situations that have been mentioned here, it is pretty well a straight-line projection. We start from a fairly small base and we raise the value or the percentage, which is what "ad valorem" means. As the base moves along on a constant percentage, the tax comes up on a straight-line basis. That is not true with tobacco because we have a very small cost in the actual product. It is only a few cents for the tobacco that goes into a package and yet that package sells on the market for $2.40 or $2.50. It is brought up by very expensive production, expensive advertising, expensive packaging and expensive levels of both provincial and federal taxes.

As the base moves along in that situation, it is exponential. Rather than being a straight-line curve, the taxes come up in an exponential way. On that basis, they have always been criticized by this Treasurer and he has taken the bold step of putting on a specific tax, one for which in each budget he presents -- and I know he is going to present budgets for many years -- he is going to stand up and be subject to criticism from all sides of the House.

Mr. Foulds: Including yours.

Mr. McGuigan: Including mine; including the member for Haldimand-Norfolk. There is a principle involved, that he is prepared to put his budget and himself on the line to be criticized.

Mr. Brandt: To put us in the hole; to put the province in debt -- I forgot to mention that.

Mr. Speaker: Order.

Mr. McGuigan: Those statements are too ridiculous to deserve a reply. How can any of the members over there criticize with the debt they left this province in? It is not worth a response.

Mr. Brandt: The best-managed province in the country; that is what you saw when you took over. It will take you about 12 months to get it messed up.

Mr. Speaker: Order. The member completed his speech a short time ago. The member for Kent-Elgin.

Mr. Brandt: I am sorry.

10:10 p.m.

Mr. McGuigan: I want to re-emphasize that we are talking about the principle of this. I support that principle. I can meet any of my tobacco growers and I can defend it. I have talked to tobacco growers and those people are satisfied and pleased that finally we have a Treasurer who is willing to face his audience yearly and defend his position. He is going to do that for many years.

I want to talk about tobacco growers. I know something about tobacco growing and about the alternative crops that can be grown in that soil. The very sad pan of the main tobacco-growing district, the Norfolk district, is that while the climate there is very much suited to tobacco growing, it is not suited to the alternative crops that would be high-value crops. I am talking largely of the tender fruit one would grow in Lincoln county or the Niagara Peninsula or along the north shore of Lake Erie.

I might mention that many years ago a pioneer fruit grower in this province, Grant Fox -- I am sure the member for Lincoln (Mr. Andrewes) knows that name -- established a peach orchard at Normandale, right on the lake. A number of other people tried growing peaches in that area. It failed because they simply do not have the climate to do it.

The other area those people can move into is vegetables. They have the irrigation that goes along with their tobacco and a move into vegetables would be an opportunity for them. But the market is already filled. We are fighting to maintain our position in that market as it is and the market is under very severe pressure. So the opportunities of moving into these other items are very limited.

We do have a new crop development program that is supported by both federal and provincial governments. They are looking at strawberries for one thing. They are trying to develop a strawberry harvester so we could have a strawberry processing industry. We have also done some work in peanuts, which has been mentioned.

All these things are on the edge of our capabilities. They are on the edge of our climatic situation and our cost situation. We wish them a great deal of success, but there does not appear to be any bright spot in that situation.

Over the years, there is going to be a diminution of the acreage in tobacco. We can see that from the fact that around 38 or 40 per cent of the people are smoking now. Just a number of years ago it was well over 50 per cent. The tonnage is going to go down, but not everyone will go out of the industry overnight. The Treasurer has set up a fund to try to help those people go out.

I am going to close because we are running out of time, but I point out there are other agricultural producers who are also in very serious difficulties caused by world overproduction. What has been started here in the matter of the $6-million fund is only the beginning of what will be required over the years. It does indicate that for the first time this government, with the $50-million program brought in by the Minister of Agriculture and Food and by the Treasurer, is concerned and is doing something about it.

Mr. Speaker: Does any other member wish to participate in the debate?

Mr. Cureatz: Thank you very much, Mr. Speaker. By popular demand

An hon. member: Unpopular demand.

Mr. Cureatz: I still have at least 15 seconds. I thought maybe the member would like to share some thoughts I had with regard to this horrible tax the government is bringing in with regard to tobacco farmers.

I want to tell the Treasurer I do have some tobacco farmers in my riding and I do not like what is taking place with regard to the raising of this tax money because I am worried that the Attorney General, who just came in and sat beside the Treasurer, is frantically trying to think of all kinds of ways to fund the legal aid plan. I have yet to hear from the leader of the third party how he thinks the legal aid plan should be funded. The Attorney General has this great scheme to charge every lawyer in the province for the legal aid plan.

Mr. Speaker: Order. I believe there was agreement by all members of the House previously for --

Mr. Cureatz: I move the adjournment of the debate.

On motion by Mr. Cureatz, the debate was adjourned.

10:25 p.m.

LAND TRANSFER TAX AMENDMENT ACT (CONTINUED)

The House divided on Hon. Mr. Nixon's motion for second reading of Bill 48, which was agreed to on the following vote:

Ayes

Allen, Bossy, Bradley, Bryden, Callahan, Caplan, Charlton, Conway, Cooke, D. R., Cooke, D. S., Cordiano, Curling, Elston, Epp, Ferraro, Fontaine, Foulds, Fulton, Gigantes, Grande, Grandmaître, Grier, Haggerty, Hayes, Henderson, Kerrio, Keyes, Knight, Kwinter, Laughren, Lupusella;

Mackenzie, Mancini, Martel, McClellan, McGuigan, McKessock, Miller, G. I., Morin, Morin-Strom, Munro, Newman, Nixon, Offer, O'Neil, Poirier, Polsinelli, Pouliot, Rae, Ramsay, Reville, Reycraft, Riddell, Ruprecht, Scott, Smith, D. W., Smith, E. J., Sorbara, South, Swart, Sweeney, Van Horne, Ward, Warner, Wildman, Wrye.

Nays

Andrewes, Ashe, Barlow, Brandt, Cureatz, Davis, Dean, Eves, Gillies, Gordon, Gregory, Guindon, Harris, Jackson, Lane, Leluk, Marland, McCague, McFadden, McNeil, Miller, F. S., O'Connor, Partington, Pollock, Rowe, Shymko, Stevenson, K. R., Treleaven, Villeneuve.

Ayes 66; nays 29.

Bill ordered for committee of the whole House.

The House adjourned at 10:30 p. m.