L057 - Mon 2 Dec 1985 / Lun 2 déc 1985
The House resumed at 8 p.m.
ONTARIO LOAN ACT
Hon. Mr. Nixon moved second reading of Bill 43, An Act to authorize the Raising of Money on the Credit of the Consolidated Revenue Fund.
Hon. Mr. Nixon: The 1985 Ontario Loan Act will provide the government with the borrowing authority necessary to meet the financing requirements forecast in the 1985 budget. In addition, borrowing authority will also be sought for the period from April to September 1986. The authority to borrow $2.8 billion is being sought in the 1985 Ontario Loan Act. Any unused authority will lapse on September 30, 1986.
As outlined in the budget, the government intends to borrow from three sources -- the Canada pension plan, the teachers' superannuation fund and the public capital markets -- by continuing the Treasury bill tenders at current levels. The budgeted net cash requirements for 1985-86 are $2.213 billion. During that year some $354 million of loans will also mature and will be refinanced.
In accordance with the procedure recommended by the standing committee on public accounts in 1978, borrowing authority is being requested to permit borrowing of amounts offered by the Canada pension plan and the teachers' superannuation fund in the period from April 1 to September 30, 1986.
Just before I resume my seat, the other House leaders were good enough, with the co-operation of their caucuses, to agree to debate second reading of this bill at this time with the understanding that at nine o'clock we would turn to the second order of business, An Act to amend the Assessment Act, when the critic for the official opposition will be present.
Mr. Andrewes: Mr. Speaker --
Hon. Mr. Kerrio: The member should quit now while he is ahead.
Mr. Andrewes: That may not be a bad idea.
I am very pleased to join in this debate, particularly since it is my first opportunity as the Treasury critic for the official opposition to speak in the debate on budget bills. I am pleased that the Treasurer's wise men have now joined him under the gallery; I believe they are all here. They will no doubt be able to provide the sage advice we expect of them and to answer fully the comments of the opposition members.
I have now been in this Legislature some four and a half years and I have always regarded it as a very valuable learning process. I have learned a little bit about the procedures of the Legislature. Perhaps the Treasurer will continue to enlighten us on the proper procedures when we do stray from the very definite pattern and programs he has set forth.
I have learned a little bit about the cut and thrust of debate, because I think it is important that members do participate on both sides of the House in what often becomes a somewhat partisan debate but actually adds considerably to the whole lively atmosphere of the House. I must say I have learned a good deal from my colleague the Treasurer in watching him these four and a half years. I find him an excellent teacher and on occasion a mentor.
However, Bill 43, the Ontario Loan Act, 1985, continues a practice that was put in place by the previous Progressive Conservative administration. There is nothing new about this practice. There is nothing radical about it. Therefore, it is perhaps somewhat difficult to know what to say.
Before the member for Niagara Falls (Mr. Kerrio) suggests I sit down, I want to tell him I have a few brief, succinct and direct comments I would like to make to the Treasurer, which I hope will elicit some answers from him about this particular bill.
Hon. Mr. Bradley: Did the member for Lincoln (Mr. Andrewes) go to the same barber as the Treasurer?
Mr. Andrewes: I do not know. The Treasurer tells me he goes downstairs to get his hair cut. I would not dare do that. I find it is much more beneficial to me to go to Tony, the local barber in the town of Beamsville.
Mr. Speaker: The member referred to straying a little earlier.
Mr. Andrewes: I am sorry, Mr. Speaker. Perhaps I have been invited to stray. I do not believe Earl's provides barber services.
Hon. Mr. Kerrio: This is heady stuff.
Mr. Andrewes: Through this bill, the government is seeking the authority to borrow up to a total of $2.8 billion from two nonpublic sources -- the Canada pension plan and the teachers' superannuation fund.
Hon. Mr. Bradley: Those are good people.
Mr. Andrewes: They are wonderful people. The member for St. Catharines (Mr. Bradley) would know well of what we are speaking when we talk about the teachers' superannuation fund. I am sure he has made some deposits in that fund over the years and wants to be assured they are resting comfortably and earning tremendous returns for his future.
Hon. Mr. Bradley: I know somebody else who would feel the same way.
Mr. Andrewes: If the member is speaking of my wife, I will tell him she took her benefits back from that fund, such paltry amounts as they were, because teachers back in the early 1960s were very much underpaid, certainly not as well as they are today. They have managed to improve their lot.
According to the provisions of the bill, any unused borrowing authority will expire on September 30, 1986. It is certainly our hope the life of this government will expire long before the borrowing power set forward in this bill.
I am very surprised that my friend the member for Brant-Oxford-Norfolk (Mr. Nixon) is introducing a bill that would enable him to borrow some $1.15 billion from the Canada pension plan and about $1.2 billion from the teachers' superannuation fund in the fiscal year. After all, it was little more than a year ago that the current Premier (Mr. Peterson), the member for London Centre, was proclaiming the province would not be able to repay the moneys owed to pension funds and to the Canada pension plan in particular. Those quotes were offered and the same kind of question was asked of the Treasurer today.
The Treasurer may recall his leader enlightening the House about how Ontario has abused its pension funds and that tax increases would be required to help repay these debts. The Treasurer may recall the member for London Centre, who was then the leader of Her Majesty's loyal opposition, asking the then Premier and member for Brampton, and the then Treasurer, my colleague the member for St. Andrew-St. Patrick (Mr. Grossman), if their government intended to pay back the money owed to the pension funds and how it intended to raise the money to do so. Again, the same question was asked of the Treasurer today.
8:10 p.m.
The Treasurer may have forgotten his leader's concerns about the ability of Ontario to repay its debts to the pension plans, particularly the Canada pension plan. To remind him of some of these bits of history, I have chosen a rather selected quote, Mr. Speaker, which, with your permission, I would like to refer to. It comes from Hansard of April 18, 1984, and was asked during the question period. I cannot find the exact time, but it was some time during the afternoon of April 18, 1984.
The then Leader of the Opposition said to the then Treasurer, "The Treasurer will be aware, too, because of the studies he has looked at, that the Ontario Economic Council study said Ontario is so successful in laying off its debts in slush funds that more than 130 per cent of the net debt of the province is held by the Canada pension plan and the big-five public sector plans."
Before I go too much further, I want to emphasize that the then Leader of the Opposition, the member for London Centre and now Premier, was quoting from a study done by the Ontario Economic Council. That term may not be too familiar to you, Mr. Speaker, but I am sure it is to the Treasurer, and I am sure he would want to rethink his position with respect to that learned body of thought.
The question put by the then Leader of the Opposition to the then Treasurer was, "What impact is that going to have on the taxation of this province as the Treasurer now starts the process of repaying those pension funds, as he now starts paying for the Davis deficits and for the sins of his predecessors?"
That is only one of several selected quotes I could offer tonight, but it drives home the point I was trying to make.
Mr. Foulds: Especially the part about the Davis deficits.
Mr. Andrewes: What was that?
Mr. Foulds: If the member does not get it the first time, he does not get it.
Mr. Andrewes: That would not be the first instance of a selective memory lapse on the part of the members opposite since they assumed their responsibilities as a government. Fortunately for us and those members who would like to indulge in selective memory lapses, we have Hansard to help us deal with these problems of failing memory.
The concerns of the member for London Centre about borrowing from what he liked to describe as captive pension funds must have been left under his desk when he moved from this side of the House to over there. We have not been able to locate them, but we suspect there was a mass shuffle of these desks at some point and they may be under some other member's feet at this very moment.
The fact that we have before us a bill introduced by his government which would continue the practice of nonpublic borrowing by the province shows that the allegations the now Premier made more than a year were erroneous and as irresponsible as they were erroneous.
I must assume the Premier would not permit his government to raise funds by borrowing from pension plans if he had the slightest doubt about the ability of the province to honour that debt. I assume the Premier and his colleague the Treasurer, now that they are the government and have a better understanding of the province's finances and the way in which the province manages its responsibilities, recognize that their earlier charges were unfounded and had the effect of misleading the public, of alarming senior citizens who are the beneficiaries of the Canada pension plan payments, senior citizens who had placed their trust and confidence in this plan, many of whom depend on the benefits of this plan for their very existence.
No doubt the Premier now shares the views of his Treasurer regarding the creditworthiness of this province and its ability to honour its financial obligations. Those views were so eloquently expressed in a press release that came from the office of the Minister of Treasury and Economics back in the lazy, hazy days of summer, while the Treasurer was about some urgent public business in parts unknown and probably untravelled, certainly untravelled by the members of Her Majesty's loyal opposition.
However, since the Premier has in the past voiced some concern about the province's ability to meet its pension fund debt obligations, I believe it is legitimate for us to ask that this administration, in seeking borrowing authority, provide us simply with some indication of how it intends to honour these obligations. It is a fair question. The Treasurer was asked that question today. He diverted our attention by moving to some other catchy subject, such as how much CPP payments will be increased to buoy up the funds in order to sustain them on into the future. However, it is a fair question and I believe it deserves a fair, clear and succinct answer.
The member for London Centre has in the past suggested that the government of Ontario would be able to pay off the debt owed to the Canada pension plan only by raising taxes, if members can imagine that. I hope the Treasurer or the Premier, in responding to this debate and to questions raised by my colleagues, will at some point in the near future indicate to us in this House and to all the people across this province whether they anticipate another round of tax increases to fund this debt.
My colleague the member for St. Andrew-St. Patrick, the leader of the Progressive Conservative Party, indicated last year that we believe a continuing expansion of economic activity would generate the funds needed to service the debt without tax increases. Since the budget introduced by our friends opposite will do nothing --
Mr. Haggerty: The member's party has raised taxes since 1970 and increased the provincial deficit for all those years.
Mr. Andrewes: The member for Erie should pay attention to this. He will want to listen to this very carefully.
Mr. Haggerty: Do not talk to us about prudence.
Mr. Andrewes: I know his ears are closed, but he is a very broad-minded individual and I think he will want to hear this.
Since the budget introduced by our friends opposite will do nothing to sustain and encourage economic activity, it is indeed possible that they will have to increase taxes to service this debt. That is the usual way one repays debt. We think it would be the logical way for this government to seek to pay off its obligations.
In spite of the fact that the Liberal government has pursued budgetary and fiscal policies that have resulted in the downgrading of the province's credit rating, Ontario is able to continue its prudent debt retirement practices, which enabled it to repay nearly $2 billion in the past decade.
Hon. Mr. Nixon: That is not important for now.
Mr. Andrewes: I am sorry. I thought I was getting a missive that would inspire me --
Hon. Mr. Nixon: It is signed "Larry" and it says the member has spoken long enough.
8:20 p.m.
Mr. Andrewes: I cannot believe that.
When the Treasurer has his opportunity to speak in this debate, I believe he will confirm that in the next 10 to 20 years, debt repayments by the province, including Canada pension plan repayments, are projected to represent an average of 1.7 per cent of annual revenue and are not expected to account for more than 2. 5 per cent of revenue in any single year.
The province then is well positioned to meet its obligations and responsibilities, due in no small degree to the former administration's responsible management of the public purse, in spite of the fear-mongering of the member for London Centre now the Premier, and in spite of the Treasurer's attempt to divert us from this train of thought in question period today. That is not to say all of us in the House must not be concerned about the level of government borrowing from nonpublic sources such as pension funds.
When in government, it was the view of our party that it was essential to stabilize and reduce public-debt interest charges to maintain fiscal stability and enhance our ability to fund important and necessary programs and services. Public-debt interest charges, however, continue to be one of the fastest-growing areas of expenditure, not only for this government but also for other governments in this country.
For instance, we saw in the Toronto Star on the weekend that the federal government inherited problems. There was a quote from none other than the member for London Centre, who said he did not blame the current government for attempting to tackle a heavy deficit problem, because it inherited those sins from its predecessor, a Liberal administration.
I note that in this fiscal year about 12 cents of every expenditure dollar in the budget of Ontario will be used to service the debt. If that figure is not correct, the Treasurer may want to make sure the record stands corrected. At $3.2 billion, the public-debt interest charges exceed budget plan expenditures for all but two ministries of the government, the Ministry of Health and the Ministry of Education, the two big spenders the Treasurer has to contend with.
While our level of funded debt in relation to the size of our economy will remain stable in this fiscal year, public-debt interest charges will increase by 12.2 per cent, a growth rate greater than that experienced in the expenditure envelopes of most of the government's ministries. If the Minister of Agriculture and Food (Mr. Riddell) were here, he would want to interject to tell us of his great plans. However, he would only be taking credit for a process that was begun and was already put in place by a previous Progressive Conservative administration.
These facts must be of some concern to the members of all parties in this Legislature, and I believe they should be of genuine concern to the Treasurer. Therefore, it is disappointing, to say the least, that the Treasurer in his budget did not do more to reduce the deficit and stabilize our public-debt interest charges. The fact that his budget has resulted in a downgrading of the credit rating will increase our debt service cost by up to $300 million over the term of our debt, an increase that to my mind was unnecessary and avoidable.
The fact that this budget has increased our net cash requirements in the fiscal year by some 30 per cent, while at the same time imposing more than $750 million in new taxes on the people of Ontario, indicates to me that this is a government that has neither the commitment nor the determination to make the decisions needed to maintain the fiscal health of this province.
I am not claiming that the responsibility for the total funded debt of the province should fall totally on this government. The debt was incurred by Progressive Conservative administrations --
Mr. Haggerty: Since 1970.
Mr. Andrewes: -- and was invested in services and projects of lasting value to the people of Ontario.
Mr. Foulds: Like Minaki Lodge.
Mr. Andrewes: The member for Erie interjects. He will not tell us of the substantial government investments in his riding over the years. Does he want to enumerate them? He has forgotten about them.
Mr. Haggerty: Not like Minaki Lodge.
Mr. Foulds: The Tory members say they did fine, but they also claim other ridings did not get anything because they did not have a government member. You cannot have it both ways.
Mr. Andrewes: My colleagues are urging me on, Mr. Speaker. My apologies.
I say again to the member for Erie that the Progressive Conservative administration invested shrewdly in this province in projects of lasting value to the people.
Hon. Mr. Nixon: Like Suncor.
Mr. Andrewes: I hear the recounting of Suncor. Let us be clear, in the period between 1975-76 and 1984-85, Progressive Conservative governments invested about $18.5 billion in strengthening and improving Ontario's social and economic infrastructure.
Mr. Epp: In Tory ridings.
Mr. Andrewes: No. In the riding of the member for Waterloo North too.
Over that same period, Progressive Conservative governments improved the province's ability to service its funded debt. For example, 12 years ago it would have taken us 14 revenue months to repay our funded debt totally. That was in 1973. I was a mere youngster then.
Hon. Mr. Nixon: He was working for a living then.
Mr. Andrewes: I was working. I was making an honest living, the Treasurer reminds me. At the beginning of this decade, it would have taken us about 13 revenue months to pay off the funded debt. That was about 1980, and I was still working and making an honest living only to be provoked by the then opposition parties in the Ontario Legislature to jump into this -- I was going to say "circus" -- noble estate in which I now find myself.
Mrs. Grier: Does the member consider this to be an honest living?
Mr. Andrewes: Sometimes.
In the past fiscal year, we could have liquidated our debts in under 12 revenue months. So we have experienced a real improvement in our debt service capability, an improvement I hear the 1985 budget brought down by the Treasurer will jeopardize.
This government is asking for the authority to borrow what by any measure is a substantial amount of money. How the government proposes to spend that money is still largely a mystery. It is probably the best-kept secret those planning the Liberal strategy for the next election have ever had.
8:30 p.m.
The budget was very short on new and substantive programs and very vague on details of the few new programs it did implement. For example, the long-awaited housing programs -- and I am glad the minister is here to hear this -- about which we heard a great deal of rhetoric prior to that budget, were missing; they were not there. Early fall has passed. We are now into late fall and near winter, and we are still waiting patiently, as are those thousands of people in this province, in this city, who sit in this very cold night waiting to find themselves sheltered by some affordable housing. They are waiting; we are waiting.
By contrast, the budget was long on tax increases and quite specific about the details of how the government was going to make available to itself a huge new pool of funds -- a war chest, so to speak, if I can use that term perhaps somewhat loosely.
Certainly the funds raised by this government through its tax increases and deficit will not be exhausted by expenditures on the programs announced in this budget. It is far from clear to me, and I believe it is an impression shared by many members in this House, just how much of that new, large, revenue pool will be used to reduce the deficit and stabilize the provincial debt.
While the government has frequently spoken of its commitment to deficit reduction, its actions, certainly in this budget, have not matched its rhetoric. In the absence of any clear and comprehensive strategy for deficit reduction and debt stabilization, we find it difficult to support this bill, which would empower this administration to borrow nearly $3 billion.
Mr. Foulds: I had not intended to spend a lot of time speaking about the bill, but the previous speaker's remarks so provoked me that I will take at least a few minutes.
What a difference the geographic change of 25 feet can make, and I say this about both parties I am addressing in this Legislature. It does my socialist heart good to see the arguments put forward by both parties with regard to this bill. They are the same old tired arguments. Only the actors have changed. The Liberals are now spouting the lines that the Tories used a mere short year ago, and the Tories -- somewhat reluctantly, somewhat wishy-washily, without quite the conviction that the former official opposition had -- are making the arguments the former opposition made. The speeches and actors are the same. It is just like Othello and Iago; they have exchanged roles somehow.
I am not quite sure whether the Tories are voting for this bill. They said they found it difficult to support, and yet during the whole course of debate on all these budget bills they have assailed the government for losing its sacrosanct triple-A credit rating. The official opposition knows full well that if it votes against this bill and it is defeated, the double-A-plus credit rating will be shot into smithereens, let alone the triple-A rating that it clutched to its heart like some sacred shibboleth that it must forever hold as a Holy Grail to be achieved. I want to tell the members, it ain't going to happen.
I am very tempted to suggest that we not support the bill because of the arguments the government and the official opposition have taken with regard to the bill. I know, however, that would be irresponsible and not in the best interests of the province, either fiscally, economically or socially. Therefore, even though I have had to put up with the arguments put by these two parties in reverse -- the Liberal-Conservative coalition flip-flop; whatever one wants to call that combination or permutation -- we in this party will support the bill as we have when it has come up for debate in the past and as we will in the future.
We in this party see nothing wrong with borrowing when that money is used for useful purposes, socially, economically and fiscally. We in this party do not like deficits any more than anybody else, but we see that it is necessary occasionally to have a deficit as long as it is kept under control and used for useful social and economic purposes.
Mr. Jackson: It is a creative tool.
Mr. Foulds: Indeed, it is a creative tool. Deficits and their curtailment, and the holding of the triple-A credit rating as sacrosanct, should not be used to keep the poor poor as the previous government did for the past seven years. Frankly, I am worried about the present government because it is making the same speeches.
I would be much happier about voting for this bill if, first, we did see concretely in place the housing program so often promised by this government in the past and promised by the minister by early or late fall. On December 2, the fact that the Minister of Housing (Mr. Curling) is signing his Christmas cards in the House and has not yet announced the concrete details of the housing program is a dereliction and abdication of duty and a failure on the part of that minister and this government.
Clearly, those housing starts had better be firmly in place before Christmas, because when it is minus 17 degrees in Thunder Bay on an ordinary day like today and minus six degrees in Toronto when I arrived, it is not fall; it is winter and almost, if I may say so, the dead of winter. That housing program had better be good, fast and solidly in place.
8:40 p.m.
Second, we said at the time that the budget failed in two fundamental areas. First, it failed to develop an idea or a vision of the economy of northern Ontario as it should be developed. When one can have, in all of northern Ontario, merely four manufacturing plants that employ 250 people or more, other than those related to the resource industries -- and that is the entire manufacturing sector all through northern Ontario from the Quebec border to the Manitoba border, an area larger than France -- that is shameful and scandalous, a failure of the previous government and a failure of this government unless it acts.
Only when this government begins not merely to tinker with the economy, not merely to do the symbolic thing economically but to do fundamental things in changing the government, will it have anything like our full confidence. I say that very clearly.
Third, this government did absolutely nothing in its budget to use the money it is requesting, which will be part of the deficit, for genuine job creation for those 25 years old and older. The unemployment of working men and women, working couples, is a tragedy and that tragedy has not been addressed. It will not be addressed this winter and that is a shameful and shocking thing.
In other words, although we see the need for this bill and for the deficit, we do not see the funds being used as creatively as could be done with regard to job creation. This government, even at this late date, even before the House adjourns in December, could bring forward a community-project program to create jobs in housing and municipal projects.
Mr. Haggerty: Winter works.
Mr. Foulds: Every municipality in this province has capital projects that have been shelved for the last five years because of the chintziness of the previous government, programs that are needed to develop infrastructures in the municipalities and that could put people to work and provide us with socially useful equity in our province. That is not being done.
My friend the member for Erie interjected something about winter works. The government could develop a winter works program through community organizations, municipalities or nonprofit organizations that would put those unemployed people aged 25 to 55 with skills back to work, where they want to be and where they belong.
Finally, I want to speak for a moment about the whole fiscal, as opposed to the economic, aspect of this bill. There has been a lot of crying by the present official opposition, and there was a lot of crying by the present government previously when it was in opposition, about borrowing from captive pension plans such as the teachers' superannuation fund and the Canada pension plan.
Frankly, I think the arguments put forward by both of those parties in that circumstance are a lot of hogwash. Why do we have those publicly funded programs, such as the Canada pension plan --
Mr. McClellan: The Treasurer agrees.
Mr. Foulds: I know the Treasurer now agrees.
Hon. Mr. Nixon: Never.
Mr. McClellan: He repudiates.
Mr. Foulds: He repudiates his previous stand.
Why do we have those pools of capital in the Canada pension plan and in the teachers' superannuation fund if not to use them for socially useful programs such as housing, job creation and so on?
I am a teacher. I paid into the teachers' superannuation fund and I continue to do so. I have absolutely no objection --
Mr. Rowe: Two pensions?
An hon. member: Double dipping.
Mr. Foulds: I am not double dipping, I am double paying.
As a contributor to both pension plans, the Canada pension plan and the teachers' pension plan, I have absolutely no objection to that money being used by the state for socially useful programs. In fact, I endorse that use. I am prepared to say that not only as a politician but also as a contributor to both pension plans.
While there are a couple of members of the official opposition and a couple of government members who may even be collecting that pension at the present time while they are in their present capacities, no member of this party is currently doing so.
If we can get back to the bill, it is beneficial for both the pension plans involved and for the --
Mr. Wiseman: The member is helping in both areas.
Mr. Foulds: If the member for Lanark wants to speak on this bill, let him get up and speak. Otherwise, why does he not desist from his sad, vicious --
The Deputy Speaker: Order. Will the members for Lanark and Port Arthur please --
Mr. McClellan: Why do you not tell him to shut up?
The Deputy Speaker: I did tell the member for Lanark to stop interrupting. Would the member for Port Arthur please address his remarks to the chair?
Mr. Foulds: Certainly, Mr. Speaker. I have been addressing my remarks to the chair throughout. You have noticed that I have been speaking directly to you. It was only when the member for Lanark -- commonly known as motor-mouth among his friends, foes, allies, and neighbours in particular, alike -- got a little too loud that I actually turned and addressed him. I apologize for my --
Hon. Mr. Nixon: Temerity.
Mr. Foulds: -- temerity in being sidetracked. I thank the Treasurer for the assistance.
It is beneficial both to the pension plans involved and the public generally to be able to borrow from those funds. The reason for that is very simple: it prevents us, as a government, from having to borrow widely on the international market at highly inflated rates. It allows us to draw on a pool of capital that has been built up by men and women in this province. Instead of sitting uselessly in some God-forsaken, God-forgotten pool, it can be used for public works.
It allows us to use that money for the projects I talked about. It could allow us to help and, as a creative tool, could allow us to stimulate the economy. That would be beneficial to the people who draw on those pension plans and for the jurisdictions involved, both the federal and the provincial governments.
With those remarks, I will conclude. We will be supporting the bill. We find it acceptable. The one thing we find strange is that the remarks made by the other two parties are the same ones they made previously; only the roles have been reversed.
Mr. Partington: I am pleased to address this House this evening about this vital matter.
Mr. Rowe: We are pleased, too.
Mr. Partington: I thank my friend.
Hon. Mr. Nixon: Mr. Speaker, if the honourable member would let me advise you and him, the present standing in the Quebec Legislature is Liberal 86, Parti Québecois 24.
Mr. Partington: When the Canada pension plan --
Mr. McClellan: Let's hear it for Bou-Bou.
The Deputy Speaker: Order. The member for Bellwoods (Mr. McClellan), would you let the member for Brock (Mr. Partington) speak?
8:50 p.m.
Mr. Partington: When the Canada pension plan was instituted in 1966, it was in response to a need for some form of retirement security for Canada's senior citizens. Its concept, as I am sure you are aware, Mr. Speaker, was to create a financial pool from contributions obtained from all eligible workers across this country. The children of the baby boom were, at most, 20 years old and through CPP would be guaranteed financial security unparalleled by their elders. That was the perception and intent in 1966.
Mr. Haggerty: Until the government got its hands into it.
Mr. Partington: Exactly. That was my next line.
There is not one provincial government which has not borrowed from the fund. The federal government has taken its share, too. The retirement security of ourselves, our children and future generations no longer looks secure or guaranteed. It has been said many times in the past that governments, through their borrowing from the Canada pension plan, were mortgaging the future of Canada's young people. I disagree. I venture to say they are writing off the future of our young people.
As of March of this year, a total of more than $29 billion was out in loans from CPP to the provincial and federal governments of Canada. At present, it is at a critical point in that it is paying out almost as much as it is taking in in the form of annual contributions. This is with the largest portion of our population, the baby-boomers, still decades away from retirement.
The fund continues to grow as a result of interest earned on the money accumulated to date. If, however, the level of contributions from Canadian workers remains constant, the fund will be exhausted by the year 2003 and this government will have to begin repaying capital by 1994.
I suggest to the members on my left, through their earlier comments, that they pay a little bit of attention.
Thrift earns success in this life.
Mr. McClellan: Everybody is on your left.
Mr. Partington: The member is probably right.
This is just about the time, around the year 2000, when the first of our baby-boomers will be eligible for retirement and repayment of the contributions they have given to the fund. That brings me to the case at hand. The Premier and his government want to add to the debt of this province, which already is 50 per cent of that $29-billion debt. They want to add to that by borrowing more, not only from the Canada pension plan but also from the teachers' superannuation fund.
Mr. Philip: What is Hydro's debt?
Mr. Partington: We are not talking about Hydro's debt. We are talking about the general debt. Besides, we all have a --
The Deputy Speaker: Order. Will the member for Brock please address the chair and you will not then be distracted by interruptions.
Mr. Partington: I will continue. This is the same man who wants to add to our provincial debts, who as Leader of the Opposition cried "Shame" when the previous Conservative government announced its intention to borrow from the plan. What was viewed as wrong and unjust from the opposition benches now somehow seems to be right and justifiable just because it is from the government benches. Shame.
There is a vast difference between the borrowings of the Conservative administration and the borrowings of the current Liberal administration. The previous administration, through sound financial management, reduced the deficit and stalled the increase of taxes in Ontario, while continuing to provide a standard of life superior to that in any other province of this country.
Traditionally Ontario has been a leader in manufacturing, industry, retailing and personal income. Like her sister provinces, Ontario suffered the effects of the recession but Ontario was the first province to feel the effects of recovery. It led the recovery, but these facts are all images from the past, before the Peterson government and before the Nixon budget.
The current administration has been in power for almost exactly five months and what have we seen in those five months from a government which was quick to criticize the revenue needs of .the previous administration? We saw a budget which increased taxes by $700 million and the deficit by $500 million. Municipalities watched their transfer payments diminish appreciably in the same document. Drivers were hit with increased fees for both their licences and vehicle registrations. Even potential home buyers were hit. Cumulatively, Ontarians were told to reach into their pockets to the tune of $700 million.
Mr. Rowe: Whoa.
Mr. Partington: I heard my friend to my immediate left. I have to wonder which election promise this will fund. Will it subsidize the planned end to the Ontario health insurance plan premiums? Will it help pay for the 700 additional civil service positions this government seems to think are needed?
To add insult to injury, every single person, every business owner, every home owner, every man, woman and child in Ontario will have to pay more towards the public debt, thanks to the government's loss of the triple-A credit rating.
Mr. Rowe: Shame.
Mr. Lane: Shame.
Mr. Partington: Shame. "Open and accountable" are the words frequently used by the Premier and his colleagues to describe their style of government. To whom is it open? Is it open to those willing and able to pay the required membership fee for LEAF, the Liberal Economic Advisory Forum? To whom is it accountable? It is unquestionably accountable to members of the New Democratic Party. However, what about the rest of Ontario?
Having just bled taxpayers for every cent possible and in every way imaginable, how do the members on the government benches now reach into their futures? Is nothing sacred? Ontarians did not ask for the items contained in the current accord between the government and the members of the third party, but it would appear that the Premier and his caucus wish to ignore these facts.
Promises that cannot be afforded cannot be kept. In keeping such promises, this government is breaking faith with the right of all Ontarians to a reasonable expectation of a secure future and, ultimately, retirement. Who is going to pay for these promises? For that matter, I question not only who will pay for the increased debts being incurred by the current government but also how they will be able to pay. The debt is growing and will itself result in greater debt through accrued interest.
Taxes have been increased, which reduces the amount of disposable income available to each person in Ontario. Less disposable income translates into fewer purchases, fewer purchases result in fewer jobs, and fewer jobs lead to less taxes payable to the provincial Treasury. Less taxes payable leads to higher taxes payable for fewer people, and it goes on and on.
In five short months we have seen years of work tossed to the wind by the government opposite. If that is not enough, now Ontarians are having their future eroded. The tragedy is that no one has asked Ontarians how they feet about the matter. No one has asked Ontarians whether they want the items contained in the Liberal-NDP accord or whether they agree with higher taxes, a higher deficit, the loss of the triple-A credit rating or increased borrowings from the Canada pension plan and the teachers' superannuation fund.
No one has asked Ontarians how they feel about these vital matters because this government does not believe in what the Conservative government called consultation.
Hon. Mr. Kerrio: We do not believe in anything the Conservative government said.
Mr. Partington: I know that.
9 p.m.
An hon. member: Stop here.
Mr. Partington: Do you want me to stop now? Okay. Mr. Speaker, I have been advised by the deputy House leader that, in view of the understanding reached by the House leaders, this might be an appropriate time to adjourn the debate.
On motion by Mr. Partington, the debate was adjourned.
ASSESSMENT AMENDMENT ACT
Hon. Mr. Nixon moved second reading of Bill 57, An Act to amend the Assessment Act.
Hon. Mr. Nixon: I am glad to have an opportunity to introduce the bill for second reading. Since there are a number of former Revenue ministers in the official opposition, they know that at this time of year the officials of the Ministry of Revenue get a bit tense when the bill is not carried, since, without its carriage, the ministry would be required to return the assessment rolls from the province to the municipalities at market value assessment.
This was established by the former administration under the Assessment Act. I believe it was carried about 1970, when it was thought to be a relatively easy administrative situation to reassess all of the properties in the province at a market value assessment. The former administration tried on more than one occasion to accomplish this, but it always backed off when the pressures came on for what seemed to be, and probably were, good and sufficient political reasons.
The fact is that the Assessment Act still requires that the province, which assumed the responsibility for the assessment function in about 1970, would by law require market value assessment rolls to the municipalities for each taxation year. Since it has not been feasible to accomplish province-wide market value assessment each year since then, an amendment has had to be introduced allowing the province to return rolls to those municipalities not reassessed at market value assessment at the old, frozen, assessment rate.
The previous administration, by attempting various approaches to market value assessment or its near relatives, which would be market value assessment without changing in values among classes, has achieved the reassessment in a high proportion of municipalities but so far none in the metropolitan area.
After the introduction of the special report by the member for Waterloo North (Mr. Epp) with the help of Mr. Goyette, it is our hope that the proposals for market value assessment in the metropolitan area of Toronto may very well now go forward. I am not sure that is a fact, because it has to be done with the co-operation of the municipal officials.
The regional chairman has a task force chaired by his special assistant, who is examining ways by which the treasurers of the cities of the metropolitan area may, by co-operation, move to an approach to market value assessment, I hope, in 1986. Frankly, I am confident this may be achieved; at least I sincerely hope so.
If that is a fact and if it becomes possible to reassess the whole of the metropolitan area with the concurrence and support of the Legislature and the various cities of the metropolitan area and if everything goes well, then probably within three years reassessment can be accomplished in the metropolitan area and the remaining municipalities that have not been reassessed and then this bill will not be necessary. And if my aunt had wings, she could fly.
I hope these matters will work out, but having watched the approach to market value assessment over the years and having seen brave attempts to improve the situation fall upon the shallow, stony ground where seeds do not put down roots, I am not overly confident. I believe there is sufficient goodwill and a recognition that reassessment in the metropolitan area would be beneficial to all concerned. Once again, I hope this can be accomplished.
All I can say is that the mayors of the cities, working with the Metropolitan Toronto chairman in a properly constituted task force, are showing strong signs of goodwill and are taking an approach on their own initiative which bodes well for a solution to this continuing problem. It is possible this bill may not be necessary for more than one, two or three years longer. It is possible that another type of amendment may be contemplated in the event we do not feel confident this will go forward, but I am full of hope we can improve the assessment situation across the province.
The report entitled Taxing Matters, which all members have now had a chance to read and study thoroughly and carefully, is at least a sensible and thoughtful approach to improving the assessment function, which was taken over by the province more than 15 years ago. Our program for market value assessment under section 63 of the Assessment Act is very similar to the procedures used by our predecessors. While this is far from perfect, we hope it will improve the assessment function. I can assure members that the assessors employed by the province are well directed by the Ministry of Revenue and are taking a professional and helpful approach to this responsibility.
Members expressed their views during the estimates of the Ministry of Revenue. While that was by no means a complete opportunity to express their views, I am aware of their concerns in this matter and I hope we will be able to respond to them.
I ask members to give serious consideration to approving this bill this evening so we can proceed with what I consider to be a routine matter. It will allow the rolls to be returned to the municipalities, those that have not been reassessed at the old values, so that the municipalities can proceed with calculating their tax bills and get them into the hands of the ratepayers in a convenient and early time.
Mr. Dean: I am pleased to hear the further elaboration by the Minister of Revenue of the hopes and aspirations he has for the assessment function throughout our province. Some members, including myself, spoke to some extent about the whole issue during Revenue estimates. At that time, I echoed some of the things the minister is saying tonight, or maybe he is echoing tonight some of the things I said then. There is a good sound carrying across this chamber when we talk about assessment, because it has been a long and thorny problem.
I will not go though all the details I went through at that time because I agree it would be very desirable to get this rather routine, compulsory bill out of the way, if we could.
Mr. Laughren: Routine to the member.
Mr. Dean: Am I spoiling someone's fun? I am sorry. It is routine in the sense that it has been done every year since Adam was a pup. If it is possible to achieve the kind of universal market value assessment which will make this no longer necessary, then I would think all members of the House would stand up and cheer, provided the cure was equitable, easily understood and not too expensive to accomplish. That, however, may be in one, two, three or five years, as the minister indicated verbally and visually.
In the meantime, we have to go through this procedure again for the very sensible reason that if we do not, the roof will fall in, with people suddenly finding they have a market value assessment without any consultation. All members of the House are great on consultation when it comes to matters that affect municipal taxes and municipal councils in general, because that is where they know where to get someone if one happens to have done his homework on the consultation route.
9:10 p.m.
I do not know whether it is going to be conceivable to do it by the methods written about in Taxing Matters. As the minister said, most of us have had the opportunity now to look over "the blue book" to see that there are a lot of good, commonsense recommendations there.
Hon. Mr. Nixon: It was blue, was it not?
Mr. Dean: Yes. I do not know. I presume it was too far along to change the colour to red. Perhaps red is not a good colour when we are talking about assessment, anyway. People see red without a cover on the book. How about that?
Some of the recommendations in there are very worth while. Before we get to that, however, I want to suggest that the bill itself does not contain very much of substance except the technical aspect, the routine necessities of doing these two or three small items that will make the system of assessment run at least as smoothly as it has during the past few years. It is still not the ideal that all of us are hoping for.
I remind members again that many years ago, about 1978, a thorough study of the taxation and assessment system. It was about tax reform and it certainly involved assessment. It was carried out by a joint committee of the provincial Treasury and the Minister of Revenue on the one hand and the Association of Municipalities of Ontario on the other. A solution was devised, which did not necessarily include a section-63 type of market value assessment. It envisaged a kind of market value assessment that also took into account the inequities between classes, not only within classes, which is what section 63 does.
However, there was a little kicker in the solution, and that was the matter of a large provincial contribution to offset what seemed to be sudden and drastic changes in the portion that certain classes and certain assessment properties in those classes would be called upon to bear. That seemed to knock it in the head for the time being, and it does not seem to have survived that possible drawback since then. I am saying this in the nature of a review of my agreement that this bill is a necessary evil in the absence of thorough assessment reform.
In turning now to a few of the items that are listed in the Taxing Matters report, may I inquire in a general way of the minister whether it should be called "the Epp report," "the Goyette report," "the Nixon report" or simply "the blue book"?
Hon. Mr. Nixon: Call it Taxing Matters.
Mr. Dean: That seems like repeating a bad pun.
Hon. Mr. Nixon: The member for Waterloo North was responsible.
Mr. Dean: Okay, Epp's Taxing Matters.
I do not intend to cover all the recommendations in it, but I would like to zero in on about three of them briefly. The first is the matter of appeals, where the well-known principle of the taxpayer being innocent until proven guilty is used as a guiding light for certain suggestions that will bring about the situation where taxpayers will not be charged a higher assessment until it is absolutely determined they should be.
The principle is correct and some of the measures are okay, but the writer of the report does not seem to have given sufficient thought to the undoubted flood of appeals that will come just as a matter of course from certain individuals and firms that routinely object to every kind of addition to their assessments.
It is fine to say that until the additional assessment is proved through the proper channels to be justified no additional tax should be levied or paid; however, until further study of it has taken place I do not see that the provisions in the proposal are really sufficient to stop such a flood of appeals. I think we would get some that might, in the terms of the Ontario Municipal Board Act, be called frivolous objections or appeals.
I really am not convinced the process that is suggested in Taxing Matters is sufficient to stop that. I do not believe the recommendations on pages 26 to 28 finally deal with these frivolous appeals. We will still have them, and further thought needs to be given to that one before it is suggested we go wholeheartedly over that way.
The second item I want to touch on, again not at great length, is the matter of condominium assessments, just to deplore what I feel is an inequitable situation that has arisen as a result of a court case, which has effectively stalled action by the government on any change in what seems like an unfair treatment of one class of single-family dwellings, namely, condominiums.
I note on page 54 of the report there is a review of some important decisions that face the government at this time, or would face any government that happened to be in power at this time. Condominiums are to be assessed at the same ratio of assessment to market value as owner-occupied, single-family homes; consequently, the ministry and its assessors must look at market value in the vicinity of the condominiums spoken about every year.
The result of this seems to me to make condominiums doubly vulnerable to changes in assessment. Rather than being compared only with themselves or with other similar condominium residences, they are also compared with what we would call normal single-family, owner-occupied homes; therefore, we are faced with the situation where condominiums appear to be getting the short end of the stick.
Some people who have received this kind of extra assessment as a result of the double comparison for market value assessment naturally resent it greatly, but the appeal of that sort of treatment was not granted and the government was not given leave to appeal that decision. Consequently, we are at an impasse with condominiums and that real inequity needs to have early attention by the government. If other legislation is needed it should be brought forward; the answer is not really provided, although the suggestion for study is here. I believe other members are going to treat that more fully as the evening continues.
The third item I wish to speak about briefly has to do with the disabled and seniors in the community programs. To refresh the memories of members who might not be as closely connected with this as with some other aspects, the program was fast introduced last year by our government to enable changes to be made in the structure or in the shape of the building -- perhaps even an addition -- in residences where an elderly or disabled person was going to live in the community, rather than finding it necessary to go to an institution. Where the change or addition was undertaken strictly for the purpose of accommodating that elderly or disabled person it would not add to the assessed value of the property for taxation purposes.
This was an excellent idea, and it seemed as though it would solve the problem for certain groups of people in the province. The effect seems to have been that nobody objected to it, but not a great number of people took advantage of it. One of the suggestions in the blue book we are looking at now, Taxing Matters, is that this concept should be expanded so that it would also apply to group homes.
9:20 p.m.
The difference between what is there now and what would have to be there to include group homes is that a definition of the eligible residences would have to conform to what is used by the Ministry of Community and Social Services. The group home would have to be defined very similarly, if not in the identical fashion, to one that was a residence for from three to 10 people, exclusive of staff.
With the success that group homes have had in so many municipalities in the province, this would be an added inducement for the modification of certain residences to make suitable accommodation for other groups. If the modifications were seen to be, and actually were, exempt from taxation because of increased assessment, which would be forgone as long as the buildings were used for those classes of eligible people, the elderly or disabled, it seems there would be more likelihood of this good program being further taken up.
Part of the problem also seems to be that the publicity undertaken for the program when it was introduced in the spring and summer of 1984 has probably gone by the board and would have to be repeated, especially if there were a change in eligibility standards, so it would be once again seen as a desirable way to go by many groups and people in the province.
I draw this aspect of the report to the attention of the minister so that when further discussion of it takes place this can receive top priority. Some of us will recall about a year ago the great controversy that surrounded the extension of the provision that group homes were a zoning by right in all parts of Metro Toronto, in which that goal was finally achieved.
This is a further step to build upon that and upon the provision in the Assessment Act which provides there is some relief given to people who would modify the structure or accoutrements of a residence for people who are going to be using it in a group home way.
I will close for the moment and request the minister to give us the further benefit of input he has on this whole assessment matter as responses come in from the various groups to whom Taxing Matters has been sent.
Mr. Lupusella: It is a privilege for me to rise and speak to the principle of this bill, the Assessment Amendment Act. In doing so, I would like to convey to the minister that I cannot stand in my place and praise or celebrate something which I think members of this Legislature, through the course of estimates and in previous years, have condemned very strongly, criticizing the inequities of assessments in Ontario.
Therefore, while I appreciate the opportunity given to me to stand in my place, and even though I have to support this bill because there is nothing else to amend, I would like the minister to know I am very unhappy about the whole process and the process of assessment in general in Ontario.
Mr. Pierce: Vote against it.
Mr. Lupusella: I cannot; that is the problem. When the Minister of Revenue introduced the assessment amendment legislation, he stated in the Legislature:
"Members will be familiar with the purpose of this bill, since it has been introduced each year since 1970. As the act stands, if the amendment is not passed, the Ministry of Revenue will be obliged to impose full market value assessment in all municipalities in 1986."
In that paragraph, I would like to draw the minister's attention to the line "to impose full market value assessment in all municipalities in 1986." The reason the minister is using the words "impose full market value assessment" is that we are near the ceiling of market value assessment, even in Metropolitan Toronto.
In that respect, I cannot be pleased about, and I cannot praise and support as routine, a bill that states no full market value assessment will be imposed in the municipality of Metropolitan Toronto. This is a result of the past administration and now the continuation and support of the policies of the past administration by the Liberal government.
In the past, in relation to assessment in general, the government has been saying full market value assessment has not been introduced in Metropolitan Toronto, but it has been talking about assessment and reassessment. We cannot fool each other, because we understand the implication of the terminology of assessment and reassessment and that of full market value assessment, but the past administration and the Liberal government now are doing a marvellous job of hiding the real truth from the communities in Metropolitan Toronto and across the province.
The strategy the government is using is that through the years the assessment and reassessment came so close to the full market value assessment that in 1986, in 1987 or in 1988, we might say that in Metropolitan Toronto the principle of full market value assessment has not been applied because the reassessment principle went above the ceiling of the full market value assessment in Metropolitan Toronto. Talking about full market value assessment in two years' time does not make any difference, because the public at large has been fooled by the government and by the previous administration.
We cannot play this kind of political game. When we are talking about housing and the right to have a house in Ontario, we are touching something that affects the social framework of families raising children in Ontario. The province has an obligation to come out with a radical, concrete framework to reform property taxes in Ontario to take those needs into consideration.
The more I get into this ministry, the more upset I become. We know that property tax assessment has been a problem for the past 75 years. It brings to mind the inequities and injustices of the Workers' Compensation Act, which had not been amended since 1914. I compare the 71 years that act was not amended, until injured workers mobilized themselves and came to Queen's Park protesting the inefficiency of the system, to the 75 years the government was unable to tackle the problem of the inequities of the property tax system.
9:30 p.m.
Politicians at the provincial and municipal levels are aware there is a problem, and we all recognize it. The fact is that we are fooling people. We are trying to come out with a new recognition of the issue, with new studies, new assessments, new reassessments and now market value assessment. I am sure the municipality of Metropolitan Toronto supports the principle of full market value assessment. It is in the interests of the municipality because it is a vehicle for it to get more revenue, and it is a good tool for the province to raise money.
Therefore, when I stand in my place and have to support the Assessment Amendment Act in principle, I know that in reality the government wants the specific mandate to assess and to reassess properties; close to full market value assessment. I think the communities and the people in Metropolitan Toronto should be aware of this type of political game, which was played by the Tories and will be played by the Liberals.
I would also like to bring to the attention of the minister that I am a little disillusioned in relation to concrete reforms affecting property taxes. When I was debating the Ministry of Revenue's estimates, I was able to gather from the minister, that the new government is able or willing to go so far that eventually the renovation issue, along with other minor amendments, will be considered and will be brought to the attention of the citizens of this province. Then it might come out with a program that is serious about amending property taxes in Ontario.
Again I would like to bring to the attention of the minister the political game that was played by the Tories and is now being played by the Liberals. If the Liberals think they will get away with playing the same politics that were played by the Conservatives for so many years, they are completely wrong. The issue greatly affects the communities in Metropolitan Toronto; they are quite politicized about the issue, and I am sure they will understand who is playing politics on it.
As a result of my political frustration, I have drafted a resolution that stands in my name on Orders and Notices and, I am sure, will be debated some time on December 12. It will test where the Liberals and the Conservatives stand on issues affecting real property taxes in Toronto and across the province; it will be a political test that will be brought to the attention of communities outside. My own constituents will be aware of this issue, because property tax is an issue that has been part of my political campaign for the past 10 years. I have had an opportunity to deal with property tax reform during at least four election campaigns.
I think I have conveyed to the minister and to the government my message in the course of the estimates. Again I am trying to restrain by comments because I might be repetitive and because the minister might be upset if I repeated the same principles, which are close to my heart and to the hearts of my constituents, in relation to an issue that affects them greatly.
Let us go back a little as a matter of history in relation to the issue of "market value tax urged by study." I am trying to quote from different newspapers that have followed this issue closely. "Municipalities Resist Reform?" is a headline on an article that was printed in the Globe and Mail, November 9, 1985. During the course of the estimates of the Ministry of Revenue, with different members being interested in the topic, we had an opportunity to express our position in relation to the issue.
Even where market value assessment has been implemented across Ontario we are faced with inequities and people are not happy about it. Even though the government is pushing the principle of market value assessment in municipalities and regions outside the metropolitan area. As I stated in my previous remarks, market value assessment makes sense to each municipality and to the province because property in Ontario is becoming a bank to raise money for the province and for the municipalities. One will never see any municipality resist the principle of market value assessment.
When the province plays on the issue of assessment and reassessment every year, and when there is an act that states that for 1986 the assessment will stay at the same level, we are faced with the principle of implementing the municipalities' programs based on different loopholes by which they increase taxes in each region. They might use their own excuses that they need the money to subsidize different programs.
It is a cycle that property owners cannot escape. As politicians, we know there is a problem. We are playing politics with an issue when we know for a fact that injustices and inequities have been implemented for 75 years. I am not sure why people do not organize themselves and appear on the steps of the provincial Legislature to complain about this issue. Perhaps I should go and organize them. I would not mind doing that, because I feel people have been hit in a very unfair way by different programs implemented in this province.
I remember that in 1983-84 I had the opportunity to appear on behalf of a constituent of mine to appeal a decision about an increase of at least 100 per cent in assessment on the value of his house. He had made no renovations. He had put on siding as a way of insulating his house, but there was no practical renovation inside the house. Without going inside the house, the assessor talked to my constituent about the work that had been done. My constituent had the right to do that work because the house was not covered with brick. He had no alternative but to put on new siding to insulate his house, and he was being penalized for it.
9:40 p.m.
When I appeared on his behalf to appeal the level of the assessment, the assessor came out with the statement that he did not go inside the house and speak to the property owner at all. My constituent was able to win the appeal and, as a result of that decision, his property taxes went down by $700.
Was the $700 retroactive? No way. A mistake was made two years prior to the time when the reassessment took place. The increase was in the range of $700, and there was no retroactivity clause involved because the man wrongly, of course, maybe because he did not know, appealed the level of the assessment for that year. We know for a fact that even though he might win on appealing the level of the assessment, the decision is not retroactive.
There is a bureaucratic mess when an individual wins an appeal until the municipality changes the roll number on the property taxes, and so on. If the individual gets in touch with the municipality there is no relationship between the decision and the municipality. When the decision is actually rendered and until the computers are in place, there is no way for the individual to find out when the reduction will take place.
When we know for a fact that all of these injustices have been committed through the years, when we know for a fact that a lot of people pay the price of something which was greatly unfair, why does the new government not send back the assessors to reassess the houses based on the principle of four or five years ago when the Tories were trying to introduce the principle of market value assessment through the back door? They use the metaphor of assessment and reassessment.
You know for a fact, Mr. Speaker, because you are serving your constituents so well, that an assessor can invade your property any time he wants. If you do not open the door, he might increase the level of the assessment as much as he or she wants. The only recourse you have is to appeal that assessment. Those words are what the province uses in the principle of assessment and reassessment. I should play with the definition of those two words. As far as I am concerned, market value assessment has already been implemented.
In Metropolitan Toronto the properties have been overassessed. The government closes its eyes to this issue and people are paying more money to the province and to the municipalities. Then we talk about Mr. Goyette who, before being appointed, was working for the mayor of Toronto. I do not have too much faith in Mr. Eggleton because he has been trying to apply the principle of what should be fair for the province and what should be fair for the municipality. I am sure he will never find the right formula because when he is trying to satisfy the province, trying to help our people in Ontario, he will satisfy each municipality because it will lose money if a new formula is implemented on the issue of real reform on property taxes.
Who is Mr. Goyette? Who is he? Again, we do not have any choice. We have been trapped as politicians by the manoeuvre used since 1970 by the Conservatives. I do not want to accuse the member for Durham West (Mr. Ashe), because when he was trying to talk about reform the government gave him a quiet portfolio and he was removed from the Ministry of Revenue. I cannot criticize him because eventually, when he realized so many injustices had been committed in Ontario and tried to speak up in cabinet, the Premier of the day told him, "You had better go and get a quiet portfolio because you are talking too much."
The new Liberal government is doing the same thing. I can promise the new government that after December 12, 1985, I will get my resolution printed in many leaflets and I will distribute them and politicize people in Metropolitan Toronto about the unfairness of this system. I think my constituents and those in different municipalities will not tolerate political inaction coming from a new government which has been formed to come out with an agenda of reform.
That is why I supported the new government. The minister might say, "Property taxes are not on the agenda or on the accord signed by the NDP and the Liberal Party." I would like to remind the minister and the Liberal government that when I supported the new government I did so on the basis of the principle of reforms as a whole and not just on the principle of the accord. I think 75 years of the province and municipalities stealing money from the property owners is greatly unfair. Because of the unfairness of the system, I will fight until real reform is introduced on the floor of this Legislature.
As I stated, we have been trapped. If we do not support this bill, full market value assessment will be introduced. I will not accept this threat, because full market value assessment has been already implemented in Metropolitan Toronto.
The minister and his colleagues know the properties in Metropolitan Toronto have been overassessed. I do not see any reason my constituents are supposed to fight and appeal the unfairness of the assessment when a simple decision taken by the minister to send back the assessors and review the old procedure which has been implemented in relation to the issue of reassessment in Metropolitan Toronto might solve the problem. They should do that as soon as possible.
My House leader is reminding me the time is up. I am very reluctant to end my speech because I think the theme of property tax reform is something which affects each citizen in Ontario, in particular my constituents who have been hit in 1981 and 1982 by -- I call them mandarins because they have been acting as mandarins of the government in the middle of an economic recession and people were losing homes in Metropolitan Toronto.
What they have done will never be condoned by me as a member of this provincial Legislature representing the great riding of Dovercourt, nor by my constituents, the great people of Dovercourt.
9:50 p.m.
Mr. O'Connor: Thank you, Mr. Speaker, for the opportunity to speak on this bill which is of some importance to a number of my constituents. As we have heard, the bill provides generally for delaying market value assessment for another year. In that regard, I would commend the Treasurer for the approach he has taken to this difficult subject in that he appears to be following the lead of the previous government in moving towards full market value assessment in a gradual manner, over a period of time, not precipitately, not all at once, recognizing that as we go, we learn.
Because we have approached it in the manner in which our government did and in the way it is now being done by this government, we have been able to iron out the difficulties that arise in the program over the years as we go and to avoid the chaos that might otherwise exist were we to move towards full market value assessment all in one year, as was suggested by the previous speaker and by others in this House.
I would suggest to the government that perhaps it should follow the good example of the Treasurer in this bill with regard to some of the other policies towards which it is proceeding headlong in a very precipitate manner.
A few examples come to mind, such as the proposal to introduce wine and beer into the corner stores. Initially the Minister of Consumer and Commercial Relations (Mr. Kwinter) indicated there would be a bill in the House by the end of November. However, he seems to have followed the lead of the Treasurer in slowing down his progress in that regard.
Mr. Haggerty: Where does that come into this bill?
Mr. O'Connor: Back to the bill. I thank my friend opposite for reminding me of that point.
As I said, the bill provides generally for delaying market value assessment, a concept I can agree with and will be voting in favour of; however, an inequity does arise with regard to a certain segment of the people of Ontario. I refer to those people who live in condominiums or co-operative housing. I wish to speak to this inequity for a few moments. It has arisen particularly in certain areas of my riding, Oakville, in that, as a result of a decision of the Supreme Court of Ontario in September 1984, with which we are now quite familiar, a real inequity has arisen among certain property owners in this province.
The decision to which I refer is commonly known as Peel Condominium Number 57 versus the Regional Assessment Commissioner. The effect of this decision is that condominiums throughout the province must now be assessed annually according to their market value, whereas other properties, single-family dwellings and others -- unless the municipality in which they are located has opted to accept the principle of market value assessment -- are not so assessed. One can readily see that if there are two systems of assessment in a community, somebody is going to get hurt. Surely fairness and equity dictate that all the residences and other properties to be assessed in a community should be assessed on the same basis across the board.
The ministry itself recognizes the inequity that existed, in that after this decision of the court it sought to appeal the decision to the Court of Appeal; however, unfortunately for the ministry and for the condominium owners affected, leave to appeal was denied and the full appeal itself was never even heard. Thus, we are left with the situation where condominium and co-operative housing owners throughout the province must now be assessed on an annual basis. They cannot remain subject to the freezing provisions of the Assessment Act, section 63, which existed between 1975 and September 1984 when this decision was handed down.
By way of example of some of the real inequities that have arisen, I might point out a couple of situations that exist in Oakville. I will preface these remarks by saying I realize that in some cases the assessment of some condominiums has actually decreased. Of course, they are happy; they are not complaining to anyone. In fact, that may be a majority of condominium owners if we look at the province as a whole. However, where there have been increases, some of these increases have been really quite significant and, in my opinion, quite unfair.
As an example, I refer to a unit in Oakville called Halton Condominium Corp. Number 83, which consists of some 400 units and which, as a result of reassessment on a market value basis in 1985, incurred increases of up to 27 per cent in the real property tax assessment for this year. In real dollars, that amounted to between $300 and $400 per unit in one year.
A second example, in Oakville again, is a development called Halton Condominium Corp. Number 114. In this case, there are 169 units and some of the increases in this development went up 43 per cent from their existing assessment. The average of those 169 units was a 33.5 per cent increase. One can readily see that an impact of that nature on a housing unit can be quite significant and disastrous in some cases where, as in condominiums, there are often young families starting out and often, in the case of the first unit, a significant number of older and retired people who live on fixed incomes.
In early April 1985, as a result of that decision and the increases that occurred in Oakville, the town sought a tax impact study from the ministry. It requested that such a study be undertaken to determine the effects of carrying out section 63 of the act across the board. It is a provision in the act to which any municipality is entitled upon request to the ministry and prior to moving towards market value assessment. To date, this being December 2, that tax impact study has not been completed. The best information we can get is that it has not even begun.
There have been numerous requests, communications to the minister and to the deputy minister, to get this tax impact study under way. Unfortunately, no action has yet occurred. On August 26 this year, both the minister and the deputy minister coincidentally wrote to a constituent of mine who happens to be the president of one of the condominium corporations which I mentioned had suffered such increases.
The deputy minister indicated at that point -- I quote from the letter, "The review is almost complete." It was determined later that the review he was talking about was unfortunately not the tax impact study but a review of the needs of various municipalities in the province to determine how many of these studies would have to be done, in what order they would be done and when Oakville might be reached. In August we were not even on first base. We were back at the point where we were not even in line for a study to be completed.
On November 1, the deputy minister wrote again to my constituent. This time he was a little more frank in that he simply said, with almost a shrug of his shoulders, "I cannot provide you with an exact date."
Here we are today -- I checked as late as six o'clock this evening -- and as far as anybody in Oakville knows, no impact study has even commenced, let alone been completed. It appears another year will go by and another taxation year will commence in 1986 whereby these condominium owners who have suffered such an increase will again be subjected to similar types of increases.
Mr. Philip: When are they going to implement recommendation 19 of the Goyette report?
10 p.m.
Mr. O'Connor: I was going to get to that report and urge exactly what my friend to the left has suggested.
There are some solutions to this. I would like to refer to the report which has been provided to all members entitled Taxing Matters: An Assessment of the Practice of Property Taxation in Ontario. I compliment the member for Waterloo North (Mr. Epp) for his direction in preparing this report. More accurately, I should compliment David Goyette, who I understand had quite a bit to do with the preparation of the report under the able guidance and direction of the member for Waterloo North.
However, in reading the report, I was interested to note there is a rather extensive chapter dealing with the question of condominium assessment, particularly with the effect of the court decision of last September. I refer to a summary section under the condominium section on page 58, which states as follows:
"As a result of these recent judicial decisions, there are now three decisions facing the Ontario government:
"1. Should the annual reassessment of condominiums/co-operatives as directed by the courts and undertaken in 1984 be continued?"
The report then goes on to list four reasons why such direction should not be continued. Prime among them is the one that says, "The loss of the freeze for condominiums/co-operatives denies to the owners of these units the stability provided to owners of all other classes of property." It then lists three other reasons, and I will not go into them at length, why that freeze should be reinstated.
The conclusion, most notably on page 60, and the answer as recommended by this report to the government with regard to this problem is as follows: "Accordingly, it is recommended that the Assessment Act be amended to restore the freezing of all condominium/co-operative units, in order to provide this class with the same stability afforded other classes of property."
The first recommendation of this report deals with the necessity to implement the provisions of Bill 57, which is before this House, to prevent the chaos that would result if the entire province were required to move towards market assessment in one stage overnight.
The second recommendation, and I assume therefore the second in importance in the minds of the authors of this report, is the one I just mentioned, to reinstate the freeze on assessed values of condominiums and co-operatives. The problem is recognized by this report. It is recommended to the government by a member of the governing party that this be done. I would have thought it would have been an easy matter for the minister to have included in this bill a second section that would do exactly what has been recommended to him, which in fairness should be done as soon as possible.
Not having done that, having failed to take that very significant step, there is one other way in which the minister, if he is so inclined, can assist some of the people adversely affected by this lifting of the condominium freeze, particularly the people in Oakville. It is to speed up the process. I see the minister is listening to me at this point. It is to require that the tax assessment study Oakville has asked for and been promised since April 1985 be undertaken immediately so that we can level out the inequities that exist as a result of the lifting of this freeze.
What is so difficult about ordering that this study be undertaken immediately and carried out for the people of Oakville, particularly for those who are as adversely affected as I have indicated in the examples? If the minister cannot see his way clear to amend the bill to implement the second recommendation of this report, surely he can give us our study.
Those are my remarks on this bill. I note the minister has been present and apparently has been listening to my remarks. Perhaps in his summation this evening he might address the concerns of the people of Oakville that I have set out this evening.
Mr. Ashe: It is funny, but this bill looks rather familiar. It seems to me I have seen it the odd time before, such as once a year for the past 11 or so years; so it is very familiar. I have a couple of remarks and then I hope to leave a few moments for the minister to answer a few of the questions that have been posed to him, and maybe one or two I am going to add.
One of the points that was made by the previous speaker, my colleague the member for Oakville (Mr. O'Connor), covered an area I was going to touch upon, and I will just expand on it slightly. He was referring to the impact study in Oakville. I will refer back to the minister's opening remarks on first reading of this bill. I am picking a sentence out of the third paragraph:
"Approximately 25 more municipalities have requested tax impact studies so they can consider the consequences of implementation of the section 63 reassessment program in their municipalities for 1986 taxation. In addition, another 19 municipalities previously reassessed under this program have requested an update to their market value base."
I would go further and ask the minister the status of all 25 of these impact studies. We are into early December and I am wondering where they are. How many does he anticipate there will be time to implement in the 1985 assessment for 1986 taxation purposes? Of the 19 that are going through it for the second time, and I guess there may even be the odd one now that is on the third time, are these all similar situations, 1985 assessments for 1986 taxation?
My colleague from Oakville mentioned the problems of condominiums, with which we are all very familiar. I think there is a bit of what some would call justice when one thinks of how that whole issue started. It was condominium owners who figured they were hard done by and paying too much tax who caused the whole problem. Now we hear from them again, as we do when any kind of assessment issue comes up.
I think back to some of the headlines in the Toronto media a few years ago when one read about -- excuse the expression -- the little widow in the little house whose taxes were going to go up fivefold and what have you. They did not talk about the fact that they went from $200 to $1,000. Now we are hearing the same kind of thing from some of the condominiums.
My colleague from Oakville made specific reference to an example of an increase of 27 per cent in a particular condominium corporation in Oakville. I heard one today from one of our other colleagues -- I think it was the member for Mississauga South (Mrs. Marland) -- where in that condominium corporation the taxes increased by 100 per cent, from $1,500 to $3,000. They must be pretty nice condominiums if they are paying $3,000 in taxes. I suggest they are probably selling at close to the $250,000 range with that kind of a tax bill.
When one thinks that was also in Mississauga and that the whole issue was prompted by the numbers of appeals and the carrying on of appeals by other condominium owners in that same municipality of Oakville, it would seem that the chicken, so to speak, has come home to roost.
I would hope the minister would bring us up to date on the status of the 25 and the 19 he referred to in his first reading statement. When one considers that is about four weeks ago, namely, November 8, I am sure there is probably a bit of an update.
One of the other concerns I would like to touch upon briefly in the next couple of minutes still relates to the Assessment Amendment Act we are dealing with, but maybe in a little more indirect way. We have had some references tonight, and during the ministry's statement there were references to the so-called Goyette report.
I hope the minister, and I am sure he will because I know he is a thinking person and has always been a fair and reasonable individual, always wanting to weigh all of the facts, and does not do as many as his colleagues over there have done with many other issues such as beer, wine, doctors, pharmacists, the spills bill and so on. I hope he does not look at a very complex problem and feel there is a very simplistic solution without weighing all of the pros and cons. I would hope he will do this in great detail when he is looking at the so-called Goyette report.
10:10 p.m.
There is one thing on which the member for Dovercourt (Mr. Lupusella) and I agree. It is really something when we can agree on something. I think he would agree on the same thing; and that is that I would be a little concerned about the basis of that report. When we look at somebody who was so closely associated with the Toronto scene, with the mayor's office scene, I am a little concerned that his report is somewhat biased and does not look realistically at some of the issues.
During the estimates, the minister will recall, I pointed out one example that came to mind vis-à-vis appeals and some of the background of that one, and some of the repercussions that could stand in the system. No doubt on the surface it seemed like a really easy, motherhood thing, and there are many others within the Goyette report that I obviously will not take time tonight to get into.
I will throw out another very simple one. When we start talking about renovations and so on, we will never get unanimity on when a renovation is just maintenance and when it is a significant addition to the value of the property. I know this one can and will be debated forever and never be resolved, but it is a very simple one.
As I recall, the report talks about air conditioning. That would probably still be considered an increase in value, but a heat pump would not be. Those kinds of things are treated differently. People cannot understand why they have added to their assessment in the past, yet as we all know a heat pump serves somewhat the same purpose as an air-conditioner.
It is going to be a very important challenge to the Minister of Revenue during the next number of months, particularly in his dual capacity, to make sure he does look at some of these concerns, which are on a very important and very complicated issue, assessment generally, and some of the items brought up in the Goyette report. I hope he will look rationally at some of the concerns brought to his attention by his staff, the professionals and others, about some of those recommendations.
I appreciate that sometimes they seem very simple. To solve a problem, they may appeal in the short term to a select electorate out there, but I know this minister will have more concern about the long-term implications on the fairness and equity in the assessment system.
With that, I will close to allow the minister some time to answer the few questions that have been posed to him before we all support, once again, Bill 57.
Hon. Mr. Nixon: I have a number of notes here. I thank the members for their contributions.
The critic for the official opposition, who spoke last, has asked for a report on the impact studies and reassessments carried out or announced in the first reading of this bill. I am informed they are being presented to councils during this period and that the rolls for those municipalities will be delayed until February. This is not an unnecessary delay, because the computer tapes that assist them in their interim tax bills will be available, and the citizens will not be deprived of an early opportunity to pay their local taxes.
I was quite concerned that the member for Oakville indicated in his presentation that his constituents had somehow been left off the lists or the possibilities for impact studies on reassessment. I am informed that Oakville's request for a section 63 reassessment will be responded to in 1986 for the 1987 taxation year.
I have not had a chance to pursue this more formally, but I have been informed by my officials that they went to Oakville last year in response to a request, offered their services and were turned down by the council. I know it is sometimes difficult to get councils to agree to a reassessment and, once they have agreed, to continue to agree, since the political ramifications are quite severe.
Whenever there is a reassessment, even though the tax revenues stay constant or perhaps increase a bit at the behest of the council, there are winners and losers in the reassessment. Sometimes these groups are about equally split. We do not hear from the people whose assessment goes down, but we do hear from the others. The political situation involved in that, we all know, is sometimes difficult to respond to, and members of elected councils have the same difficulties that even members of government have in matters of this import.
The assessment of condominiums continues to be a very interesting conundrum. The official critic for the opposition indicated that condominium owners, in a sense, were the authors of some of the difficulty by appealing to the courts on the basis of their assessments, indicating they should be assessed in comparison not only with other condominiums but largely with single-family dwellings in the community as well, since a condominium, they submitted, fell into that characteristic. The courts agreed, and this raised the assessments in many instances. Now many condominium owners say, "Of course, we should not be compared with other single-family dwellings," and they want exemption from that type of assessment.
In fact, the 1963 market value reassessment might be beneficial across the board, although I am responding to the advice from the member for Durham West when he says it is naïve to think simple solutions exist in this rather complex matter. One can move towards an acceptable solution and try to get as many people to agree as possible, but simple solutions are not in the cards in assessment matters.
The member for Wentworth (Mr. Dean) was indicating, with approval, probably his own initiative or one taken by his government which exempted from assessment improvements made for the disabled and elderly and used for their purposes exclusively. I agree that was a useful innovation and one that we want to continue to support. I think the honourable member knows that, with the increase of the exemptions on renovations from $2,500 to $5,000, many of those renovations that would have been exempt under the proposal to which the honourable member referred were subsumed. Also, the ministry does not assess ramps, handrails and items such as that, which are sometimes structures external to the main dwelling place. However, that is a matter of interest and one I thought was an initiative which would be supportable in all cases.
I was referring to condominiums, and I am informed the assessments are reviewed annually but not necessarily reassessed, to keep the assessments as current as possible. As a result of the court case to which we were referring, 72 per cent of condominium assessments were decreased. In the city of Oakville, to which the member referred, there are 2,420 condominiums; 712 had their assessments increased and 1,708 were decreased. So they are reviewed and kept reasonably current.
The problem we are all experiencing with our own constituents, and perhaps from our personal experience -- and I, as a farmer, put that forward -- is that there is a tendency when one's assessment goes up to feel there is an inequity until one has access to the information that is available to the assessors, and can make a comparison with other properties.
The community is not willing to accept the authority of the assessors as they used to years ago. Probably this is a healthy approach, particularly in metropolitan areas where there is a chance to see that, under our system of assessment, or freezing of it, which is what we are talking about tonight, these inequities established sometimes decades ago still remain unresolved because there is not an overall Metro-wide reassessment program.
I point out to the members again the importance of passing this bill. I found it an irritating one when I was in opposition, and I do not find it anything other than that now that I have the ministerial responsibility. It is almost an anachronism that I would be the one defending it after my views expressed in the House, but the honourable members have been good enough to bring my past comments to the attention of new members as well.
10:20 p.m.
I sincerely hope we can see our way clear to having a reassessment in the province in a clear, equitable and acceptable way that will be seen to be moving towards fairness in assessment.
The final decision rests with the elected members of the municipality who establish the mill rate. They do not like to take an initiative that is going to raise anybody's taxes by way of changing assessment, but we hope it is possible for us to move to the kind of reassessment that is going to improve fairness and equity in a system we know is far from perfect.
I appreciate the honourable members giving me a chance to bring this bill forward, if not on an emergency basis at least with an understanding that it is essential it be carried. I ask support from all sides of the House for second reading and third reading of the bill.
Motion agreed to.
Third reading also agreed to on motion.
The House adjourned at 10:21 p.m.