L237b - Mon 29 Sep 1997 / Lun 29 Sep 1997
The House met at 1830.
ORDERS OF THE DAY
FAIR MUNICIPAL FINANCE ACT, 1997 (NO. 2) / LOI DE 1997 SUR LE FINANCEMENT ÉQUITABLE DES MUNICIPALITÉS (NO 2)
Resuming the adjourned debate on the motion for second reading of Bill 149, An Act to continue the reforms begun by the Fair Municipal Finance Act, 1997 and to make other amendments respecting the financing of local governments / Projet de loi 149, Loi continuant les réformes amorcées par la Loi de 1997 sur le financement équitable des municipalités et apportant d'autres modifications relativement au financement des administrations locales.
Mr John Gerretsen (Kingston and The Islands): On a point of order, Mr Speaker: We don't seem to have a quorum. As a matter of fact, we seem to have less than 10 members in the House right now.
The Deputy Speaker (Mr Gilles E. Morin): Would you check if we have a quorum.
Clerk Assistant (Ms Deborah Deller): A quorum is not present, Speaker.
The Deputy Speaker ordered the bells rung.
Clerk Assistant: A quorum is now present, Speaker.
The Deputy Speaker: I believe it was the NDP last time, so I recognize the member for Muskoka-Georgian Bay.
Mr Bill Grimmett (Muskoka-Georgian Bay): I'm pleased to continue second reading debate on Bill 149. Assessment is the main issue in the act, and the members will recall that in Bill 106 our government brought about reforms to the assessment system to try and address the kind of confusion that was present in Ontario's assessment system. I can certainly recall from my background as a small-town solicitor that the assessment system had many problems in it that had been gathering up over years and years of development.
There were systems in Ontario that were widely different from one another. I know in the area where I practised in Muskoka, they adopted a much more up-to-date market value system than was present in some parts of the province. Of course there are lots of stories out there about the system that existed in Metro Toronto where many of the assessment records indicated values that dated back to 1949. This was often referred to as a patchwork quilt of assessment systems in Ontario. You had very up-to-date systems that were based on market value, some of them updated as frequently as every two, three or four years.
What we tried to do in Bill 106 was address the concerns in Ontario with the assessment problems and the fact that assessment throughout the province was very dissimilar from jurisdiction to jurisdiction. Some municipalities used it to advantage to attract commercial and industrial investment and some municipalities used it to attract residential development. It was not a level playing field and we, as a government, felt it was important to try and level out the playing field, try and bring about a process whereby all jurisdictions in Ontario had the same assessment system. We adopted an assessment system in Bill 106 where we would have universal assessment values all across Ontario based on 1996 values.
The provisions set out in Bill 106 referred to an update that's done on a regular basis using rolling averages. As well, we addressed the concern of the business community and of municipalities with the business occupancy tax. I know from having dealt with several municipalities as a solicitor and, in some cases, providing advice to commercial clients or real estate purchasers that the business occupancy tax was a problem for municipalities. It was a problem for municipalities because they had difficulty enforcing it against tenants of properties who chose to leave the jurisdiction. It was not enforceable against the owner of the property and so what we brought in in Bill 106 was a more flexible system, a system whereby the municipality will have more opportunities to collect what would replace the business occupancy tax.
We also said in Bill 106 that we would set tax rates for six standard property classes: residential and farm, commercial, farm lands and managed forests, multiresidential, industrial and pipelines.
Bill 149 is a follow-up to Bill 106. It contains amendments around Bill 106 and around the statutes that Bill 106 affected. In many ways I think it's a demonstration of our government's commitment to consultation, to listening to people who have concerns, and it demonstrates our willingness to fine-tune the changes that we bring about to legislation.
The comments that we received from small business indicated that they felt that there should be provision in the assessment rules in Ontario to allow municipalities to be flexible in dealing with businesses, to make sure that if a municipality felt it was fair, they could set up a tiered tax rate system, so that if you're in a lower-valued commercial property and you're a small business, you could be treated according to your circumstances by the municipalities.
Under Bill 149, small businesses will benefit because they will now have the opportunity to be part of a system with up to three bands of assessment. I can see in my own riding how there would be an opportunity for municipalities to tailor their assessment system so that they can direct it at encouraging small business to continue to stay in the downtown areas in municipalities, something that's a great concern to a lot of small towns. They don't want the residential or the retail flavour of the downtown area to change; they want to maintain it. They don't want everyone to flock from the downtown area out to the malls. I think this provides a tool to municipalities where they may be able to address the issues of concern for downtown merchants in small towns.
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Bill 149 also provides that properties can be taxed at a lower rate when there's an absence of business activity. What we are doing with our proposed amendment is that we would inscribe the rate reduction in the legislation rather than in regulation. This is something that was suggested to us and we're acting on it. That's why it's in Bill 149. It's a fine-tuning of the broad brush strokes that were in Bill 106.
What we're proposing in Bill 149 is that if a full commercial-type property is not being occupied or fully operational, the municipality could provide a rate reduction of up to 30% on the assessment for that property, and if it's industrial property, the reduction could be as much as 35%. Again, we're addressing the concerns raised by the commercial and industrial community with respect to the assessment reforms we want to bring in, and Bill 149 provides the municipalities with the tools so they can deal with the concerns raised by industrial and commercial ratepayers in their municipalities.
Bill 149 also provides some flexibility for municipalities when they're dealing with charities. We wanted to be sure that municipalities had the necessary flexibility and we wanted to recognize the great benefits that charities can bring to municipalities and other communities. In Bill 149 charitable organizations can receive a tax rebate from the municipality of up to 40% of their total property tax on space they occupy in commercial or industrial properties.
To help the municipalities administer this program, we're proposing an amendment that would define charities that are eligible with reference to the federal Income Tax Act. We want to keep it simple. That's the general way that charities are identified in Canada. That's the way for municipalities to define how that special category of rebate would apply.
Of course, we're concerned about farm lands and we're proposing that there be three tax rate ranges for different stages of development in farm lands. We want to provide an incentive to farmers to continue farming and also to recognize that while they are awaiting development they should not be harmed by the assessment system.
Mr Gerretsen: On a point of order, Mr Speaker: I know what the member says is extremely important and there should at least be a quorum in the House to listen to him. I don't believe there is a quorum right now.
The Deputy Speaker: Would you please check if we have a quorum.
Clerk Assistant: A quorum is not present, Speaker.
The Deputy Speaker ordered the bells rung.
Clerk Assistant: A quorum is present, Speaker.
The Deputy Speaker: The member for Muskoka-Georgian Bay.
Mr Grimmett: As I was saying, farm lands are being recognized in Bill 149 as requiring special attention. Of course, our government is very concerned about the interests of farmers in Ontario and we've responded to the concerns that they raised with respect to our new assessment regime. We suggest in Bill 149 that there could be three tax rate ranges for the different stages of development in farm lands. The bill provides an incentive to continue farming on those lands that are awaiting development rather than penalizing farmers who are considering development and we would maintain a tax reduction for those properties until the development actually occurs.
In regard to theatres, the theatre industry, the theatre community spoke to our government. They raised concerns. They wanted to have a level playing field. Bill 149 proposes that competing, publicly owned theatres in Metro make payments in lieu of taxes at the same rate when they're used for staged, for-profit productions, and all smaller private theatres in Ontario with fewer than 1,000 seats would receive the same property tax exemptions afforded to their publicly owned counterparts. I know that's going to be an item of great interest in my riding where the summer theatres are a very important part of the culture. I'm sure they will benefit a great deal from this special recognition contained in Bill 149 for smaller, private theatres.
Bill 149 also contains relief for seniors and it contains some clarification of the issue of how seniors are going to be dealt with under a new assessment regime. I've recently met with constituents who had considerable concerns about how they were going to continue to deal with their property taxes in their retirement while they're on fixed incomes.
Bill 106 requires municipalities to provide a program of relief for low-income property owners who are seniors or who have disabilities. It also allows municipalities to phase in municipal tax exchanges resulting from that reassessment over a period of up to eight years. Bill 149 extends this tax relief to the education portion of the property taxes.
Again, our government is working to make property assessment and taxation consistent and understandable. We're trying to increase the accountability. We know that Ontario and Ontario's small business is the engine that drives the Canadian economy and there are special recognitions of small business contained in Bill 149.
We are also addressing the special area of concern around rights of way. Again, it's a hodgepodge, where the commercial entities that own rights of way are dealt with by municipalities in a variety of ways. We want to make sure they are all dealt with in a similar fashion.
Mr Gilles Bisson (Cochrane South): Tax them to the hilt.
Mr Grimmett: I know the NDP would love to tax them to death. We don't think that's fair. Everybody deserves tax fairness in Ontario, even the people who own rights of way. Bill 149 sets out some great rules to clarify how we're doing to deal with rights of way. We're going to break up the province into regions and we're going to make sure that those commercial entities that have rights of way are dealt with fairly. We don't want to drive them out of the province because of assessment reform.
Mr Bisson: On a point of order, Speaker: I would point out that yet again the government doesn't seem to be able to hold a quorum in the House.
The Deputy Speaker: Please check if we have a quorum.
Clerk Assistant: A quorum is present, Speaker.
The Deputy Speaker: The member for Muskoka-Georgian Bay.
Mr Grimmett: I'll conclude my remarks now.
The Deputy Speaker: Questions or comments?
Mr David Caplan (Oriole): It's very interesting to listen to the member's presentation on this bill on property reassessment, particularly given that every municipal official, every mayor in Ontario is saying they just don't believe this government when it comes to their downloading proposals.
It says that there's going to become accountability in the property tax system, yet the role of the Ontario Municipal Board is going to be eliminated. This is a very serious matter and requires serious attention to fix some inequities in the property tax system, yet the provincial government will not share any numbers. There are only three months left in this calendar year. Businesses need the time, they need some knowledge about how they can plan one of their very important expenditures and, unfortunately, the government refuses to provide any kind of numbers or provide any kind of planning data so that a business can know what its expenditures are going to be.
We have not seen the tax rates that are set by the minister and in fact the government has not even done any impact studies. They haven't even asked for that information to be provided for what the impact of this bill is. I would say it's pretty fundamental in any piece of public policy to know what the effect is going to be of any piece of legislation, and that just hasn't happened here. There has not been enough thought and enough planning that has gone into this document. They've refused to provide the numbers, and it's unconscionable that a piece of legislation as important as this would proceed without that kind of information.
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Mr Bisson: This bill in so many words is MVA. This is the bill with which the Harris government is going to impose market value assessment on cities -- basically in the city of Toronto -- something they said they wouldn't do when they were in opposition. I remember, Mr Speaker, because I was a member of the government, as you were a member of the official opposition during 1990 to 1995 when the then government, the Bob Rae government, looked at imposing market value assessment on the city of Toronto. There was huge opposition on the part of the opposition parties of this assembly, as well as the municipal councils of Toronto and others, who said: "Stop MVA. This is not something we want imposed by the province." I remember at the time the then third party had a very different position from the one they have now.
The other point I make to the member for Muskoka-Georgian Bay is that he talks about how this bill, in his words, "will make sure that everybody is treated the same." Somehow or other that's supposed to mean that people who have rights of way, like rail companies and others across Ontario, will be taxed the same and that somehow will save them and consumers or taxpayers money.
The reality is that there are a number of companies that are charged differently when it comes to rights of way for very real reasons when it comes to historical perspective. If you take a look at the issue of CN and CP in the city of Toronto and how municipal taxes have been applied, it dates back some years and it was utilized at the time as an ability to attract investment into the city of Toronto. For the member opposite to somehow suggest that introducing this will make sure that everybody is treated the same and that therefore equals lower taxes -- excuse me. In the end it will mean that a lot of people who own rights of way will see their taxes go up, not down.
When this government purports this to be a decrease in taxes, I think they've got to be clear. For a number of people in Ontario it will mean they'll pay more property taxes, and people who have rights of way, like rail companies and others, will see their taxes actually go up, depending on the community. So much for tax fighters.
Mr Gerretsen: I think the point the member for Cochrane South made was an excellent one in that this is MVA. This is market value assessment. We all remember what the Ministry of Municipal Affairs and Housing ran on during the last election campaign. He handed out posters -- I was looking for one here and I know you wouldn't want me to use it anyway -- that said basically the Mike Harris government would never introduce market value assessment, and we've seen it now.
People change their minds from time to time, but what this government doesn't do is at least acknowledge to the people, "Yes, we are implementing market value assessment, and yes, what the minister said during the election campaign, and the other minister" -- I believe it was the Minister of Economic Development, Trade and Tourism -- "when they said they were against market value assessment and the Mike Harris government would never introduce that, they were wrong." Then at least they would have some credibility with the people out there.
But to somehow disguise it under another smokescreen is -- I can't say the word -- not quite truthful; it is not quite the same. I think you can draw your own conclusion. When you run on a platform and hand out a piece of propaganda during an election campaign saying, "The Mike Harris government will never introduce market value assessment," and then come in with a bill that introduces market value assessment, I think the people of Ontario can make up their own minds as to whether or not those two particular members have remained truthful to their election campaign.
That's what this is all about. I will continue in a few minutes in the same vein.
Mr Tony Martin (Sault Ste Marie): This is another of those bills presented in this place by this government that's fraught with pitholes and traps first of all to try to convince people, on one hand, that it's wonderful, it's evolutionary, it's changing in a direction that's progressive, but on the other hand, when you get into it and you begin to see the detail and understand what it's about, it's fraught with traps that will ultimately end up costing us all more, particularly property taxpayers in province, and that's unfortunate.
It's one of these Trojan horse bills. They bring in the Trojan horse and it looks very nice. Everybody is impressed and bowing down and saying, "Wow, isn't this wonderful?" But only a short time later when you open the door and the enemy comes jumping out and begins to slaughter all around, you find that it is too late. That's what this government is about. But any of you who have been back home in your constituency, who have been reading the papers, know that the people are beginning to realize what you're doing and they're going to be calling you to task.
Just as my colleague from Kingston said a few minutes ago, I think it's important to note that this bill is a complete flip-flop from the position taken by this government in the election campaign. Here's a government that prides itself in keeping its promise, and yet in a pamphlet put out by the minister himself, Mr Leach, during the campaign he says, "My party and I will never" -- and he underlines "never" --
Mr Gerretsen: Oh, you have it.
Mr Martin: I have it. "My party and I will never support the imposition of market value assessment in Metro Toronto."
So what do we do? We change it from "market value assessment" to "actual value assessment." How stupid do you really think the people out there are?
The Deputy Speaker: Member for Muskoka-Georgian Bay, you have two minutes.
Mr Grimmett: I'd like to thank the members for Oriole, Kingston and The Islands, Sault Ste Marie and Cochrane South for their very insightful comments.
Just as we listened to the comments from stakeholders in the community when we came in with Bill 106, I've been listening to the comments of my colleagues on Bill 149. It's very likely that they have read Bill 149 in detail, but I would urge them to read it again in detail. I think if the member for Kingston and The Islands and the member for Sault Ste Marie read it in detail, they will recognize the distinctions between "actual value assessment" and "market value assessment."
The difference is quite clear. We're updating the values based on actual sales of properties and we're using rolling averages. It's a very accurate system. It's quite different from a market value system.
It's also important that when they're looking in there, they'll find in the bill that we're providing the kind of relief that a lot of stakeholders who talked to us about Bill 106 were looking for. One of the areas of relief was with respect to these major rights of way that we find in Ontario, and the commercial operators who own those rights of way were very concerned that they be treated fairly. One of the great marks of Bill 149 is the way we deal fairly not only with small businesses, farmers and municipalities, but also with the owners of rights of way. They know this is a government they can come to, no matter how big they are, no matter how big a corporation they are, and they're going to be dealt with fairly. We're also dealing with farmers and developers in this bill, but when we deal with the rights of way, we deal very fairly with those people.
When my colleagues look very closely at Bill 149, the difference between actual value assessment way over here and market value assessment way over here will become clear to them.
Mr Bisson: On a point of order, Mr Speaker: I would like to ask for unanimous consent to allow the member from Muskoka two minutes to explain the difference between AVA and MVA.
Interjections.
The Deputy Speaker: Is there unanimous consent? No. Further debate.
Mr Gerretsen: That's very interesting, what just happened in the House. Here the opposition agreed to let a government member explain the difference between actual value assessment and market value assessment and then government members themselves denied that member the opportunity. It surely has to be a first in the House that government members don't want one of their own colleagues to get up and explain something to the people of Ontario that he thinks is very easy to explain. But I can't see it, because whether you're talking about the actual value of something or the market value of something, you're talking about exactly the same thing. All I can tell you is that we had two ministers who campaigned on a promise not to implement market value assessment and they've brought it in with this bill.
The Deputy Speaker: The member for Kingston and The Islands has the floor.
Interjection.
The Deputy Speaker: He has the floor, so please stop interfering.
Mr Gerretsen: Thank you very much, Mr Speaker.
I headed a municipality that actually went through one of these reassessments in 1982 and I can tell you from that experience that the people of Ontario don't know what's going to hit them until this is actually implemented. The fatal mistake we made in 1982 when we implemented it was that we relied on government figures and statistics as to what it was actually going to do to property values.
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We at that time as a council, believing that the province would at least give us the right figures, relied totally on that, and we were told by a Davis Conservative government in those days, and the people who worked for them, that the differences will be no more than 10%, 20% at most on the vast majority of properties, over 90% to 95%. Then we saw the result after it was actually implemented, and I can tell you that people got a heck of a shock, because the studies that were produced prior to the implementation and what actually happened after implementation, whether it was actual value or market value, were totally different. In some cases the values and the taxes on properties went up by 80% to 90% and in some cases they went down by 20% or 30%. I can well understand this government's hesitancy to produce its figures now, because it wasn't just the experience in Kingston and The Islands that they had in 1982. There were many other similar experiences that they went through and that subsequent governments have gone through where market value has been implemented.
The reason they don't want to show the people the accurate studies is because of the tremendous impact it's going to have on what people are actually going to pay in taxes. You can minimize it -- I don't care what you do right now -- but a year from now you'll agree with me whether you like it or not. It's going to have a much greater significance in each one of your communities, what people are going to be paying in property taxes. It's a no-win situation, because the people whose taxes are going up are going to say, "Yeah, you're an all right sort of fellow but you're the guy who raised my taxes," and you, the government members, will have to account for all that. If somebody's taxes go down, you know what they'll tell you: "I always told you I paid too much. It's about time something was done about it."
I think the only way you can get into it on a province-wide basis is by telling people what the effects will be before you implement it. Let's just wait and see, but I can almost guarantee you that you'll live to regret it, because this is going to affect the people of Ontario perhaps even more than the downloading bill. The downloading bill is going to affect people overall by about a 10% or 15% tax increase, but this is going to affect individual property owners, and in some cases they'll go up 100% and in some cases they may go down 60% or 70%. It's going to happen. It didn't just happen in my community; it happened in other communities that implemented it as well. That's one thing I wanted to say.
Release your impact studies. The ministry has those studies. The minister knows what the numbers are. He knows how it's going to affect property values in Ontario, and I dare say that's probably one of the reasons the business occupancy tax has been done away with. They have discovered that if they had that in place as well, some commercial properties would just skyrocket in the amount of tax they would have to pay. There's a connection there, I can assure you.
The other aspect of it deals with the seniors' tax relief. In other words, there is an implicit understanding there that the taxes on a lot of homes that are occupied by seniors will increase; why else give a provision whereby some of the increased taxes on houses that senior citizens live in can be delayed? I don't know about you, but most of the seniors I know, the vast majority of whom own their houses, pride themselves in the fact they can still stay in their own houses and look after themselves and pride themselves in the fact that they don't have any debts at all. They're usually the first ones to go down to city halls and town halls to pay the taxes whenever the tax bill comes out. They don't owe any credit card debts. They don't owe any mortgages on their houses any more. They're debt-free and they feel good about it.
We're now saying to these people, "If you can't afford the property tax increases, we can somehow have it be a charge against a house that we can collect from you after you're gone or if you sell the house." I know of no senior citizen who would like a debt against their house of let's say $1,000 just building up year after year. People feel very uncomfortable about it. These are the people, you may recall, who went through the Depression and saw the tremendous effects the Depression had on their own lives. They don't want to owe anybody anything and they certainly don't want to owe any money to the city hall or the town hall, particularly when most of them have a notion that if you don't pay your taxes for three years, the city can come along and sell your house for back taxes etc. They're the first ones to pay up every year and they're proud that they don't owe anybody anything.
Now as a sop the government is saying, "We noted in most cases that your taxes are going up, but you don't have to pay it now; we'll just put it as a charge against your house and you can pay us 10 or 15 years from now when you leave," but of course it's a building fund. If it's going to be $1,000 one year, the year after that it may be $1,100 and then $1,200, and before you know it, it may be a total of $20,000, $25,000, $30,000. Most seniors I know don't want this relief. They just want to be left alone. They just want to live out the last days of their lives in a very useful and contented manner knowing that they don't owe anybody any money.
That's just a pure fallacy. It's something that has been created to say, "We can deal with you in this way by setting up this senior tax relief." They don't want it. Why don't you produce the figures so they can make up their own minds as to whether they think it's a good deal? I can assure you that the vast majority does not think it's a good deal.
The other interesting one -- it affects particularly a municipality like my own -- is the way this act deals with tax-exempt properties. In my community we did some studies a number of years ago, and I think about a third of all the properties are tax-exempt. That means they are federal or provincial government buildings, educational institutions, hospitals, in my case penitentiaries, and a number of other quasi-government buildings where the government basically doesn't pay any taxes. They don't pay taxes based on the actual value of that property or the market value of that property, and usually the grants that have traditionally been given, in lieu of those taxes, to those municipalities that have a lot of those tax-exempt properties are about half of what the taxes would be on that particular property. It's never a done deal, there are always negotiations going on, and every now and then the amount is raised, but it's not an automatic thing that you have with, for example, ordinary property taxation where a council sets a mill rate, applies it to the value of a property and determines how much tax that property has to pay. It's always a case where the municipality has to wait around and see how much the federal government and the provincial government in their good graces say they're going to get in grants in lieu of taxes that year.
This is a perfect opportunity for the government to do something about it. In our community we have argued this point for at least 30 years. Why don't they just pay the normal tax or even three quarters of the normal tax or half the normal tax? At least make it in such a way that the treasurers and the CAOs of those kinds of municipalities can determine that yes, that's what the amount of money is going to be.
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I can tell you, not only didn't they fix that problem, they made it a lot worse, because now it is no longer $75 a bed as it was with respect to hospitals and university students etc. Now it's something that can be done by way of ministerial regulation. The exact words are, "The Minister of Finance may make regulations governing what the distribution of the money on tax-exempt properties will be." In other words, it has been made even more nebulous than it is right now.
Interjection.
Mr Gerretsen: That's what it is right now, sir. Right now, it's $75 a bed, which was --
Interjection.
Mr Gerretsen: Just a minute now. That's the way it is right now. You are going to do it by way of regulation so that it could be one amount one year and, if a government feels magnanimous, it may make it more the next year and that sort of thing. There's absolutely no certainty there at all, so it's hurting municipalities that have a lot of tax-exempt properties.
The other thing that I found very interesting in what the member for Muskoka-Georgian Bay said is that another reason why we have Bill 149 here is that we're fixing some things that we did wrong in Bill 106. Bill 106 was passed less than, what, three, four, five, six months ago? We're already starting to fix things now? Why don't we give these matters sufficient thought in the first place so that we don't have to do these kind of fixings?
But of course we've seen it with the megacity 2 bill. That came two or three months after the megacity 1 bill. We've seen it with so many different acts. Why are we sitting late at night on an ongoing basis? Because we're fixing legislation that was approved in one form or another three, four, five, six months ago. What that really speaks to is that this government doesn't know what it's doing. It's got some broad ideas as to what it wants to implement, and then it goes around the province or in this House saying, "That's not really what we want to do."
Take the education bill, for example. They've already taken over $500 million out of the education system. This new bill that was talked about this afternoon is going to take another $1 billion out. Rather than them honestly saying, "That's what it's all about. We think that too much money is being expended for the public good in this province and that's why we're taking money out," all we're getting is stonewalling. "Oh no, that's not why we're doing it." The reason all the teachers and all the teachers' unions are upset has got nothing to do with Bill 160. It was such a good thing for everyone. You know why? Why are the teachers, who are on a day-to-day basis involved with our students, so against it?
The other thing people have to understand is that this is all part of a scheme to download as much responsibility on municipalities with total disregard as to whether municipalities can actually afford the downloading that's being done to them. That's really what it's all about. We already have about a $670-million download that has been -- don't take my figures for it. Take the figures from all of the various mayors who have written in or all the various CAOs and all the various organizations like AMO. What do they tell you? They all tell you that you've dumped $650 million worth of services on them.
I know what the municipal councils will do after they get elected in November. They don't want to go to the people with a 10% or 20% tax increase. They know they're going to get a lot less money and they're going to have to take on a lot more services than was the case previously and they will try to whittle it down, because they've got a choice. They can either keep the service level at the same level, in which case you're probably looking at about a 10% or 15%, on the average, property tax increase in the province, or they can reduce some of those services. They will probably reduce some of those services and, of course, that's basically what you want them to do.
Why don't you just come straight up front and tell people that? Tell the people of Ontario they've got too many municipal services, that you don't think that the average taxpayer should pay for those services to the extent that they are and that's why you want to make changes, that's why you want to decrease the service levels in Ontario. But don't stonewall it by saying -- what does the Premier always say? He always says, "It's revenue-neutral." Yet everybody in the province that actually deals with these figures says it isn't so.
Now we're all waiting for October 6, because the province has finally decided that it is now going to reveal the figures, at least that's what we thought until a couple of days ago. A couple of days ago we found out in a letter that was written to Hazel McCallion, mayor of Mississauga, an individual I had many pleasant dealings with when I was involved with AMO for a number of years -- she gets a letter from the minister which in effect says it may not be October 6. Hazel, being the good mayor she is, says it may be after the municipal election on November 10.
The minister for privatization knows about it and so do some of the other cabinet ministers. The deal is in. They've talked about it in the cabinet room and they've said, "Look, we're not going to tell the municipalities anything until the election is over and then everybody will be happy because they can't do anything about it, and if they're not happy, too bad for them." That's exactly what is happening.
If the province disagrees with the figures that have been presented by the municipalities with respect to the $665 million worth of downloading, why don't they produce the figures? The minister said at a committee in this Legislative Building a couple of weeks ago that he would have them on October 6, and now apparently he's not going to have them on October 6. I hope to be proven wrong on that. I hope he will come on October 6 with his figures to each municipality and say, "This is what you can rely on for your funding next year." I think we owe it to the municipal councillors, we owe it to the councils, but even more so, we owe it to the taxpayers out there. They've got a right to know whether all the different changes in funding responsibilities are going to cost them more on the property tax base.
When you add up the effects of all the downloading legislation, when you add up the effect of Bill 149 that is going to implement market value assessment even though the Minister of Municipal Affairs and Housing said that he was going to be dead set against it and Mike Harris was not going to do that, when you put the effects of all those bills together, all I can say is the municipalities and the local taxpayers are going to be in for one heck of a shock come next year. I think that the people of Ontario can expect better than that from their government.
Mr Michael Gravelle (Port Arthur): Demand it.
Mr Gerretsen: And we should demand it. I think what the government would be very wise to do is to withdraw this bill and give the people of Ontario the figures as to how it will affect them.
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Mr Martin: I want to congratulate the member for Kingston and The Islands for a speech well given. He obviously comes from a background in municipal politics where he knows whence he comes.
I think it would behoove all of us in this place, when we listen to presentations made, to consider for a second where they are coming from. You get members like the member for Kingston and The Islands, who obviously has been around politics a long time at a very grass-roots level, a level that the members of the Conservative Party speak as if they come from, but I note in going through the biography of a number of the elected members from across the way that they don't have much experience in municipal politics. I would suggest that the member for Kingston and The Islands probably has as much experience under his belt as any half dozen of you over there put together.
I suggest that you listen to the member when he tells you that what's happened so far by way of the agenda of this government has not in any way been in keeping with the traditional relationship between province and municipality. It has been all one way; it has been take and no give. The bill that he was speaking to is going to do exactly that. It's going to maintain the track record. It's going to maintain the consistency in approach. In fact, as he said in his speech, we will find in the end that as the Minister for Municipal Affairs said in one of his campaign pamphlets, "My party and I will never support the imposition of MVA in Metro Toronto." He knew why he wasn't going to support the imposition of MVA, yet he's doing it now under the guise of AVA and that won't sell, that won't wash.
Mr Grimmett: I'm pleased to make some comments on the speech given by the member for Kingston and The Islands. I'm always interested in his comments as they relate to municipalities because, as the member for Sault Ste Marie said, the member for Kingston and The Islands has a wealth of municipal experience. I just want to clarify one point that he raised. Our government has never suggested that we are fixing Bill 106. What we're doing is completing the picture. Bill 106 and Bill 149 together form the basis of some serious and substantial reforms of the assessment system that are long overdue in Ontario.
I found it rather curious that the advice given by the member for Kingston and The Islands was rather typical of people who come from his party. You should be doing the things that are safe. Assessment reform is not safe. You're not going to satisfy the people whose taxes might go up by assessment changes because they'll criticize you for their taxes going up, and if people's taxes go down as a result of these assessment reforms, they'll just say, "They were too high anyway."
That is not the view of our government. Our government views assessment reform as something that's long overdue. It's a matter of equity. It's a matter of trying to make the situation fair, not only for all residential taxpayers but also the relationship between different classes of commercial and industrial taxpayers and how they relate to residential taxpayers.
Mr Gerretsen: Read the bill.
Mr Grimmett: The member wants me to read the bill, and I haven't suggested that he hasn't read the bill, but many of the comments that were made by the member give me the impression that he wants to talk about downloading. He doesn't want to talk about the bill itself, Bill 149. But again, the whole situation with the Who Does What process indicates he doesn't think we should be taking it on because there's risk involved. But we're interested in trying to restore fairness in Ontario in the relationship between the province and the municipalities.
Mrs Lyn McLeod (Fort William): I too have appreciated the comments of my colleague from Kingston and The Islands, who quite clearly has a great deal of municipal experience to bring to some of the scepticism which he has indicated tonight about a government that will not show the numbers to back up their claims that their downloading and offloading are actually going to result in no tax increase at all.
I believe the member for Kingston and The Islands is quite right to be sceptical, and I think if I'm correct in having listened to his comments, he has not had an opportunity to think about the impact of the uniform mill rate assessment for educational tax purposes. This is another area in which we have asked the Ministry of Education to show us their numbers and they will not produce any numbers to show the effect on different communities across the province of having a uniform mill rate for educational purposes in every community.
Quite clearly, when you add that in with the downloading that's being done to compensate for the fact that the government is picking up 50% of the residential taxation for education, we're going to see communities that have significant increases in their residential mill rates overall.
We don't of course know what's going to happen on the commercial side when the government starts taxing directly for education because the government doesn't even know how it's going to do that. So I guess we can't ask them to show us the numbers there since they don't have any proposal for actually levying the taxes.
It's all very ironical because of course the government's original intention with their so-called property tax reform was purely political. Once again, it has nothing to do with real reform. It had to do with a government that wanted to be able to take over educational funding in order to take $1 billion out of education. That's where it all started.
Mega-week of downloading starting with the announcement that they were going to take education off the property tax so that they could control the funding of education. They found they couldn't do that. They had to retreat. They're going to tax education directly on the property and our taxes are undoubtedly going to go up overall as a result.
Mrs Marion Boyd (London Centre): It's a pleasure to speak to the discussion that we had here from the member for Kingston and The Islands. It would really do the government well to listen to someone who has worked at the municipal level as a council member in his city, has worked with the Association of Municipalities of Ontario and of course has served as mayor of that city, because he has experience that is valuable.
What we see again and again is this government not listening to the experience of those who have been at the level of government that is being affected. We find that this government rushes into things, makes mistakes, and has to then bring forward additional bills to correct those mistakes. The member was quite right to talk about the incompetence that this government is displaying in it whole legislative program, but nowhere more particularly I think than in this whole business of the download of responsibilities and the way in which it is affecting the ability of municipalities to maintain their ability to provide services, their ability to maintain taxes at a decent level in their communities and their ability indeed to just cope with the huge influx of change that they're expected to manage in a very short period of time.
I think it would be very, very wise of the government to listen to the advice of the member for Kingston and The Islands when he tells the members of the government party that the people in his municipality, in his constituency and all across the province are not convinced that this government knows what it's doing.
Mr Gerretsen: I'd like to thank the members for Sault Ste Marie, Fort William, London Centre and Muskoka-Georgian Bay for making those comments.
Yes, I believe in equity and fairness, and the first principle of equity and fairness is that when you lay something before people, they know what the effects of that are going to be. But to do something in the abstract and hope that somehow it'll wash somewhere down the road is a totally unfair way of bringing principles and proposals forward.
Second, your comment that somehow it will bring a greater equity between residential and commercial and industrial taxpayers indicates to me that you don't know what's in the bill. The bill allows for different classes of residential properties which don't exist right now. It allows for five or six different classes of commercial and industrial properties and all of them are not related one to another, because in each one of those cases different rates of taxation can be applied, so that a municipality, if it wanted to, could almost totally ignore the market value of commercial properties vis-à-vis residential properties by applying totally different rates to them. Read the bill. I can tell you, some of your own officials were somewhat surprised by the fact that so many different classes had now been opened up, which wasn't the case before.
The point still is that the people of Ontario don't really know what you're doing in this respect because you haven't provided them with the figures that you have in hand to indicate to the average person in Ontario how this act is going to affect them on a day-to-day basis as far as their own property taxation is concerned. That's where you've failed totally.
The Deputy Speaker: Further debate? The member for Cochrane South.
Mr Bisson: Merci, Monsieur le Président, pour avoir la chance de participer encore dans ce débat.
I've got to say -- I cannot resist that this government yet again I think is demonstrating by this bill that they really have a hard time trying to get things right. They came to this House less than a year ago with Bill 106. It was supposed to fix a whole bunch of problems, as they said, around the whole issue of assessment and a number of other issues. Apparently they got it right.
I remember back then the Mike Harris government knew everything. Everybody else was wrong. It was the fault of everybody else that there was any problems in Ontario. If there were problems, it was the NDP. If it wasn't the NDP, it was the former Liberal government, and if it wasn't the NDP and the Liberals, then it was the fault of that bad old Bill Davis. Everybody else was wrong.
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Then they come into this House now in the fall and are dealing with Bill 149, which is -- whoops -- a way to fix Bill 106. Yet again you guys have demonstrated that you move too fast, you don't think through what you're about to do, you don't look at how things fit together -- and that's something that I think this government needs to do a little bit more of -- and quite frankly you don't take the time to get things right.
I'm amazed that a government that has such a busy agenda would really not be a little bit more ashamed of having to come into this House yet again with about the third or fourth bill where they have had to come back and fix mistakes they have made in bills they have passed before.
We just saw it when they passed the megacity bill. The government made mistakes in megacity. The New Democrats told them they made mistakes, the Liberal opposition told them they made mistakes, the people of the cities of Toronto, Scarborough, Etobicoke and all the other ones affected said they made mistakes. The people told them they made mistakes. "Oh, no. We know better. We're going to do what has to be done because we're the Mike Harris government. We've got it right. We're smart. Everybody else doesn't know what they're talking about." Whoops, they slipped up again. They messed up the megacity and they had to come back with another bill to fix some of the problems on the megacity.
Again, we see it in Bill 149. It's another one of the "whoops" bills that they're bringing into this Legislature because they don't take time to do it right.
Today my colleague the member for Hamilton Centre asked a question of the Minister of Labour around Bill 136, that huge bill with which they wanted to take away a whole bunch of bargaining rights from municipal employees and people who work for the MUSH sector within government. The government is rushing through on 150 pages of amendments. They want to get that done in lickety-split time. I saw in amazement the minister stand up today and say: "Oh, no, opposition, you guys shouldn't worry about the details. Just trust us, because this is going to work. You guys just worry too much about details."
This assembly, the process of legislation passing through it and the way we deal with bills in committee is all about detail. It's about making sure we get things right. We have to remember that in this assembly there is a role for the government to pass legislation and to govern on behalf of the people of Ontario, and we in the opposition are here to criticize when the government does something bad and to try to make amendments to legislation to make it work for the people of Ontario.
But there's a problem with the equation. The government thinks only they are right, everybody else is wrong, and if there are problems in the world, it's everybody else but them. It doesn't have to be that way. We can't return to a time in this province when this assembly worked in a way that both the opposition parties and the government of the day, under Bob Rae or David Peterson or Mr Davis or Mr Grossman, when opposition parties and government worked together to a certain degree to try to make bills right. I remember sitting on the government side on a number of bills that we passed, and I had responsibility as parliamentary assistant or as a committee member, when opposition members used to come forward and say, "Listen, you guys have messed up there, there's a problem," and you know what? We used to fix some of those problems.
But the only time this government moves is when there is huge political opposition to it, such as they had with Bill 136, when they feel that the polls tell them, those rolling polls that they call every night, that they can't survive the fight, and then they hurry back to do a bunch of amendments on their legislation, as they did with Bill 136. That ain't good enough. That's not how government is supposed to be run. Government is supposed to be run by a bunch of people who take the time to get things right, and yet again, this government has got things wrong. If I were the House leader for the government, I would be somewhat embarrassed to come into this assembly with yet another one of those "whoops" bills.
Let's take a look at what they're doing here. The other part of this bill, other than fixing up the mistakes that are in Bill 106, is supposedly creating something new. What do they call it again? Is it "current value assessment" or "actual value assessment"?
Mr Martin: It doesn't matter.
Mr Bisson: Exactly. The member for Sault Ste Marie makes the point, "It doesn't matter." The reality is that this government is allowing market value assessment under another name to be assessed in the city of Toronto and other communities where market value assessment doesn't operate.
If the Conservatives of the day, at the time the third party, the now government, had taken a consistent position when they were in opposition with what they do in government, I would say, "They campaigned on it, they said they'd do it, and they're doing it," but they're not. I was on the other side of the House when our Minister of Municipal Affairs brought in a bill that introduced market value assessment to the city of Toronto. Mr Speaker, you were here, and you will remember the cries. You were part of that caucus that denounced the former NDP government for having brought forward market value assessment. And you know who else helped you, Mr Speaker? Mike Harris, the now Premier of Ontario, Chris Stockwell, the now Speaker, and a whole bunch of other Tory caucus members who are now in cabinet stood in this House and said, "We denounce the Bob Rae government for having introduced MVA to the city of Toronto."
The Tories said they were credible and honest people, which they are, I can't argue that, but there's a bit of a difference between the position they took then and the one they take now.
We, the Bob Rae government, at the time when we introduced MVA through our Minister of Municipal Affairs, listened to the cries of the opposition because they raised points that were real. If the Bob Rae government had introduced MVA to the city of Toronto, municipal taxes for residents in the downtown core would have hit the roof and, more importantly, those people that have rights of way, like the rail stations, in and about the city of Toronto would have ended up having to pay a huge amount of assessment that they'd never had to pay before. Quite frankly, it would have chased a lot of business out of Toronto.
The residents at the time, along with the business owners, organized with the opposition to put pressure on the Bob Rae government and we backed down. We said: "Okay, we understand. MVA was something that was asked for by a certain group of people within Toronto. We thought at the time it made some sense, but on further reflection, it's wrong. We withdraw." We took our lumps, and quite frankly we paid for some of those things in the last election.
But this government now comes to this House in their first term as a government, after having come out of being the third party, and have completely flipped their position. They're now saying, "We're going to introduce actual value assessment. No, it's not MVA. No, not us. We're opposed to MVA. We're going to introduce actual value assessment," or current value assessment or whatever you want to call it.
What's the difference between current or actual value assessment and MVA? Market value assessment assesses a building on the basis of the market: How much can that building fetch in the market? Current value assessment assesses the value of the building based on the current value of the building, which is based on the market. There's no difference. MVA and current value are the same thing.
I see my friend across the way, the government member, sort of snickering. I'd be snickering a little bit too if I was on that side of the House having to wear this one. You weren't a member of that third party caucus that made these arguments when we were the government. The reality is you're bringing MVA into the city of Toronto and you know what the effect is going to be. It'll mean a number of property owners in the city of Toronto will see their taxes go up. Yes, some will go down; we know that. There are some property owners who will come out on the positive side of this, but there are many more who are going to end up paying much more tax than they're paying now.
You can argue all you want, "We want to make it fair." How is it fair that somebody pays $1,100 taxes and the other person pays $2,200 taxes? It comes down to a real simple principle: If you've been paying $1,100 and your taxes go up by $1,000, an increase is an increase is an increase, and you guys are increasing the taxes, period. Don't argue fairness. It has nothing to do with fairness.
The other point is -- and I want to make this because the parliamentary assistant made the point well. He talked about needing to ensure that we're able to apply a standard when it comes to applying assessment on people who have rights of way in municipalities. That's fair.
Mr Speaker, you know what it's going to mean as well as I do. First of all, because of this bill, municipalities, because they're now going to have to cope with all of the costs of the downloading, will have the ability to charge assessment against property that has rights of way, like rail stations and others. Some would argue they should pay their fair share of taxes. I'm not opposed to that. I think everybody should pay their fair share and everybody should pay their own way. But what it's going to mean in a lot of cases is that some of these businesses are going to start looking around at how to get rid of that property or how to reduce their liability when it comes to taxes by pulling out of entire communities. In most cases it's going to mean that their businesses will pay more taxes. I thought this government was in favour of helping business. This has nothing to do with helping business.
The other thing that it does -- I've got to say this. On the whole issue of market value assessment, not only did the third party, the Conservatives of the day, rail against MVA and didn't want to see MVA introduced; a number of candidates in the last provincial election ran on platforms they and their party, meaning the Conservative Party of Ontario, would not introduce MVA to the people of the city of Toronto.
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Who had that in their election leaflets? None other than the Minister of Municipal Affairs, the Honourable Al Leach, the member who is carrying this bill. How can he bring this bill into the House and have the gall to do so when his own election platform, in his own leaflet it said, "My party and I will never support the imposition of market value assessment in Metro Toronto." Period. "Never" is underlined. The people who voted for him said: "Oh, we believe him. Al Leach ran the TTC. We've got to believe what he says. We know the TTC always runs on time, so Al Leach's word has got to be his bond."
You know what? He made another promise in the last election. He is the Minister of Municipal Affairs, is he not? He said he wasn't going to scrap rent control. He was going to strengthen it, along with a whole bunch of other cabinet ministers in the Metro area who ran on the same platform and the same promise. They put it inside their election leaflets, and what did they do? They broke their word to the people who elected them. The people thought they were electing somebody who was opposed to MVA, somebody who was opposed to getting rid of rent control. These people did a flip-flop, did an about-face and turned exactly the opposite way and ran into the arms of Mike Harris and are saying, "To heck with my constituents, to heck with my promises, I'll do what I have to do to keep my cabinet post."
At one point you will be accountable, and I think that time will come in the next provincial election.
I have to say, especially when it comes to the Minister of Municipal Affairs, Mr Leach, I don't dislike him. Al is not a bad guy. I was municipal affairs critic for a little bit better than a year when we came back in 1995, and I kind of like Al. He's kind of a nice guy. He's a regular kind of Joe in his own way; he's got more money than I. He's pretty easy to get along with, but I have to ask myself the question, does this guy want to run again? He certainly demonstrates to me that he has no inclination whatsoever of wanting to get re-elected in his riding because there's no way in heck that guy could get re-elected. He couldn't even get elected as the dog catcher in his riding, given what he has done in about-faces when it comes to MVA, when it comes to rent control and when it comes to everything else he's done. He used to run the biggest transit authority in Canada and is one of the ministers responsible for decreasing the funding to that very same transit authority and making it less sustainable as far as being able to provide the level of service that people are accustomed to.
Let's look at a couple of other things this bill does. It eliminates the business occupancy tax. On the surface, everybody is opposed to having to pay less tax, but you know what? I kind of like this. I like the idea that businesses are not going to be assessed this tax on the surface, but you start to think about what it means. There's a whole bunch of things that I like to do but I might not go out and do them because there are consequences to those actions.
It's the same thing when it comes to the elimination of the business occupancy tax. You're going to go to municipalities in Ontario and say, "You're not to levy the business occupancy tax any more." That means a person who is renting a storefront pays the business occupancy tax. In the future, because of this bill, boom, it's gone. "It sounds like a good thing. Hey, everybody likes that. We pay no taxes." But you know what? It means that municipalities are going to lose -- listen to this -- $1.6 billion of assessment, $1.6 billion on top of all of the municipal download the province is throwing down to the municipalities, downloading transit responsibility, downloading housing, downloading ambulance services, downloading whatever. There's nothing that is not being downloaded. They're going to lose $1.6 billion in assessment by the loss of the business occupancy tax.
The government says: "There's no problem. We're just going to let the municipalities deal with this. We're going to give them the stuff in the bill here to make sure they can make it up somehow." How do you think they're going to make it up? You and I, the property taxpayers. How do you think they're going to make it up? Money doesn't grow on trees. This government seems to think that money grows on trees for municipalities and that somehow or other municipal politicians grab a shovel and go into a little hole and they dig up millions of dollars and they pay their bills. I'm sorry, it doesn't work that way. I would think the Conservative Party would be one that understands economic issues.
The reality is that the people in the cities and towns across this province are going to see their property taxes go up. This government is not only downloading responsibilities on to them, they're not only cutting municipal transfer payments, such as the northern support grant in northern Ontario and other grants all across the province, they're also getting rid of certain assessments. Municipalities are going to have to make that up.
What do you think Barbara Hall is going to have to do in the city of Toronto come the next election, or whoever runs in the city of North Bay or Sudbury or Sault Ste Marie or Timmins or Sarnia? What are they going to have to do? They're going to have to pay for the services or get rid of them. Most municipal politicians are like you and me: They want to make sure their communities are safe. That means they need fire departments, they need police services, they have to have water and sewer plants that are running efficiently. They've got to plow the snow off the streets. They've got to operate the arena so their kids can go and play and hockey on Saturday afternoon. They've got to make sure the pool works so that you're able to go out and keep in shape and stay out of the health care system -- something maybe I should do more often -- but they're not going to have the money to do so.
Those municipal politicians, come the next municipal election, afterwards into the next budget year, are going to have to say: "Do we close the pool? Do we close the arena? Do we stop plowing the streets? Do we not pay for ambulance services? Do we cut the day care? Do we raise property taxes?" I think it's going to be a combination of both. There is going to be some reduction in services, there's no question, because in most municipalities it means, if they were to offload the entire cost of the municipal download and loss of assessment and loss of transfers to the property taxpayers, that their taxes would go up by 40% and 50%. There's no council in Ontario, no alderman or mayor or councillor, who wants to see that kind of tax increase.
What do you think they're going to do? They're going to go and cut your services: You will have less police; you will have fewer firefighters; you will plow less often; you will pick up less garbage; your sewer plants are not going to be as modern as they should be; when roads have potholes, they're not going to fix them as fast; and your property taxes are going to go up.
These guys ran on the promise that there's only one taxpayer. Do you remember that? I remember it. It's called the Common Sense Revolution: "Call 1-800-903-Mike and you can get your copy of this." It says, "Historically, municipalities have responded to provincial funding limits by simply increasing local property taxes." What's different? What do you think they're going to do after the next election? Grow money on trees? I don't think so. I think they're going to cut services and they will raise property taxes.
The solemn promise of the then third party in the Common Sense Revolution is: "We will work closely with municipalities to ensure that any actions we take will not result in increases to local property taxes." You tell me how you're going to do that. You tell the council of the city of Timmins or the town of Iroquois Falls or Black River-Matheson or Kapuskasing or Hearst or Toronto how in heck they're going to achieve that. When you say they are going to have to take on all these new responsibilities, you're going to take assessment away from them as far as business occupancy tax and the farm tax rebate, and they're not going to raise property taxes. How are you going to do that?
You are by this very bill, Bill 149, allowing municipalities to create new subclasses when it comes to assessment: six new subclasses in residential, and I think it's an equal amount, six in the industrial-commercial sector. If you don't want them raising property taxes, why are you allowing them to create new subclasses when it comes to assessment if you don't want them to use them? If you didn't want them to use them, you would have said, "We're not creating any subclasses." But you're creating them. What does that tell us? It tells us you're giving the power to municipalities to go out and raise property taxes.
We have a responsibility in this assembly. We have to make sure that our kids end up in the future inheriting the same Ontario we had. When this government cuts everything the way they have, we're not able to ensure that our kids will inherit a system of education or a system of health care or a system of municipal services. It is our responsibility in this House as the opposition, as the New Democrats, to make sure that tomorrow our kids have a future. With this bill I don't think they're going to have a very good tomorrow.
Hon Rob Sampson (Minister without Portfolio [Privatization]): I listened very intently, as I try to do, to the debate in the House and the member for Cochrane South speaking to us I think with some background in municipal politics. I don't know all of his CV but I think he has some involvement in municipal politics. I found quite intriguing the realization about three quarters of the way through his debate today that he has now realized that money does not grow on trees. On behalf of the many taxpayers in my riding who encouraged me to become involved in politics and gave me the chance to stand in this House and speak, I say it is unfortunate that his revelation that money does not grow on trees did not occur on or about 1990, before he took this province on a rampage of spending at the expense of the taxpayer and burdened many of the taxpayers, both young and old in this province, in my riding and also in his, because I think he does have taxpayers in his riding, with this tremendous debt problem.
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The debate about MVA, by the way, I find quite intriguing as well. I didn't have the luxury of being in this House when that topic was raised by your then government. I was outside of this chamber as an ordinary citizen. I do recall, though, that when I heard the issue raised by the Bob Rae government, the basic principle of their particular position at that time was to try to create some equality within tax classes, especially on the residential side, the very same reason, by the way, that we are standing here in this House encouraging the government of the day to proceed with some assessment that does make sense on a residential basis.
The member also spoke briefly about reassessment issues and how that will impact the taxpayer, and I think that was leveraging off the discussion of the member for Kingston and The Islands. I would encourage the member for Cochrane South to take a look at the history that the member for Kingston and The Islands spoke to. He will find that it was within the jurisdiction, the authority of that then council to be able to deal with the tax increase by lowering the mill rate, and they didn't. They kept the tax win.
Mr Caplan: I listened to the words of the member for Cochrane South with great interest. He indicated that it's possible that taxes would go down. I can tell the members, and any Metro members of the government or opposition caucuses would well know, that on the basis of the 1988 market value study, those properties which would see tax reductions under this bill have already been appealed. So the individuals who would enjoy any kind of tax relief -- there are none. The only people who are going to be affected will see their taxes go up, and go up significantly. This has escaped attention and I'm really surprised that the government members from the Metro area would not point out this flaw in the bill.
Mr Gerretsen: Particularly the minister without portfolio.
Mr Caplan: The government House leader, for one, the Attorney General, many of the others would want to point that out and to be a voice for the people who live in their communities. I know I certainly am committed to that, because it was very clear to me as I knocked on doors in Oriole this past summer that the tax burden that this government is committed to putting on people who live in my community is unbearable and untenable. I must say that it is just totally devastating to a community, particularly one in Metropolitan Toronto, and I really think that there needs to be some thought and some rethinking about what the impact of this is going to be.
I would say one further thing to the members. Why is the government afraid to share any numbers? They keep pushing back the dates when we'll have numbers ready for the municipalities because they know that the impact of this bill and the other measure on property taxes, Bill 106, will in fact be devastating.
Mr Martin: I also want to be on the record this evening in congratulating the member for Cochrane South for the excellent presentation he made here, pointing out to all of us and to the folks listening out there the inconsistencies in this government's track record: what they said during the election, what they said in the Common Sense Revolution, and then the flip-flops, particularly by the minister who is handling this piece of legislation. That seems to be becoming his trademark. I think the member is absolutely right. He must have absolutely no intention of running again, because anybody out there in his constituency who knows of his record, who's been watching him at all, must be asking themselves what in the world they did and why the person they trusted so much with their vote has now turned around and has begun to sell them this bill of goods that at the end of the day is not going to serve them well, is not going to serve anybody across this province well.
He makes the point as well that this piece of legislation is consistent with so many other pieces of legislation that have been brought before this House. At first blush, from the name even, you'd think it was going to be something wonderful and progressive and evolutionary. At the end of the day when you go through it and you begin to take a sharp pencil in that exercise, you begin to see that instead of gaining, instead of winning, instead of advancing, the taxpayer out there -- and he says, quite rightly, there is only one taxpayer -- is the one who's going to get hit two and three and four times.
I'm also supportive of his position that this government as well is very good at passing the blame, blaming somebody else, pointing fingers. I've got two letters here, two constituents who have the federal government as the bogeyman --
The Deputy Speaker: Thank you.
Mr Grimmett: I'd like to make some comments on the speech given by the member for Cochrane South. With his usual enthusiasm, he's discussed a number of issues in the bill and of course quite a number of issues that weren't mentioned in the bill. I would like to comment again on the rights of way issue.
I'm sure in his part of the province where he lives there's a significant interest in this issue because there would be a lot of owners of rights of way. Ontario Hydro and utilities and railways would be affected by this issue. I think it's important for the public to recognize that under the system we had when we came into power in Ontario there were great inconsistencies from one jurisdiction to another in the treatment of these rights of way. Some jurisdictions treated them as one category of property and then right next door there could be a municipality or another jurisdiction that treated them totally differently. The owners of these properties were looking for consistency. They didn't want to keep dealing with the inconsistency. They wanted us to address this issue.
What we're proposing in Bill 149 is that the province would take control of the rates on these rights of way, that we would do it on an acreage basis and that we would set up nine geographical areas in the province. We would give some assurance to the municipalities that they're going to continue to have a strong revenue stream from these properties, and we wanted to give assurance to the owners of these properties that they weren't going to run into difficulties forecasting the cost that they would have to be paying the municipalities for tax assessment.
I think Bill 149 is very sensitive in the way that it deals with that important issue, which is very important to the people of Timmins. But it's also important that the owners of these properties be given the assurance that they can continue to operate in Ontario without fear that they're going to go from one year to the next with an impossible increase in their tax rates. Those are the issues that we had to deal with on rights of way.
The Deputy Speaker: Member for Cochrane South, two minutes.
Mr Bisson: To the member for Muskoka-Georgian Bay, I find it very interesting that as a member of the Conservative government you would say you want to make sure that those people who have rights of way, such as utilities or gas companies or whatever it might be, have some assurance that their taxes aren't going to go up too much and they're going to be able to afford to operate in Ontario. Mr Speaker, you were in the House with me when Bill 26 was passed, and Bill 26 allowed municipalities to go out and annex, or do whatever you want to call it, take over unorganized communities or other communities into their own tax base. In our communities in and around the area of Timmins, Iroquois Falls and Matheson, Iroquois Falls came very close to annexing part of the municipality, part of the area around the municipality. Why? Because they would have been able to get at the assessment of TransCanada Pipelines. It would have meant an increase of $1.5 million in assessment.
For this government member to say you want to make sure the business community has a stable situation when it comes to how property taxes are applied to their businesses and to their property, your first bill -- as the former Speaker used to call it, your first ominous bill -- made darned sure that municipalities had the ability to go out and grab extra assessment. As it turned out, Mayor Ken Graham and his council in Iroquois Falls backed down, because they recognized that this was not a good idea at the time and the government was basically making them do their dirty work for them. The point is, you're the government that's really causing these inequities.
To the member for Mississauga West across the way, who says we just came to the realization that money doesn't grow on trees and, "Where were you in the time that you were in government?" I only say, when it comes to taxes, when it comes to the increase in municipal taxes, remember what you just said in this House, because in fact you're going to be making sure that property taxes are increased to the municipal taxpayers of this province and they're going to find out that money doesn't grow on trees.
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The Deputy Speaker: Further debate?
Mr E.J. Douglas Rollins (Quinte): It gives me a great deal of pleasure to stand up and speak about Bill 149. When the government came to power, when we started campaigning, when Doug Rollins started campaigning in the area of Quinte, there was a concern out there that people around the province needed some balance between who pays a heavy amount of tax and who pays a little amount of tax.
I think this government has seen fit to try to bring some evenness throughout the whole system, and it's not an easy chore to do. As the previous speaker said, when they started to bring a fair market value tax into Metropolitan Toronto, they seemed to get a lot of heat. All of a sudden they decided, "The heat is going to be a little bit too much and we should back down from it," so they decided the best thing to do was just forget it and scrap it.
I think most people in the province had to realize that people who have a small house, whether it's just out of Kanata or a house in London or a house in Elliot Lake, should be paying somewhere close to the same amount of assessment to start with and then they could bring it into the tax. This bill goes together with Bill 106 to make sure that can happen.
In this bill we put in some different categories to help out, and one of the areas we have helped out is the people who are on a fixed income and people who have a disability. Those people who have a disability are going to be given the opportunity to defer their taxes, to make sure those taxes don't increase. Our municipalities are going to have the opportunity to bring that in over a period of approximately eight years if they see fit. I think that will allow a lot of people in Ontario to slowly get to the point where fairness in assessment of property should be even, regardless of where they live in the province, and at least pay tax accordingly in the same category.
As a businessman for 30 years of my life, there was always a tax bill for business occupancy tax. There aren't too many people who haven't thought that the business occupancy tax was awfully hard as far as business was concerned. I can tell you, on the first day you opened that business and said, "Holy jeepers, I'm in business," you turned the key, and the first guy who was there was the tax collector, particularly for business tax. He was the very first one who came there. In fact, he came there sometimes before the mailman did. He got there and wanted that bill paid. He wanted that paid right now. "Give me that money."
For a lot of big corporations, that business occupancy tax probably is of little or no importance, but to a little individual like Doug Rollins or a little place that has a small business, that money means an awful lot, and right off the bat that has to be paid out. Now we're going to be able to take that money off the tax and allow that businessman to have a little breathing room and not have to pay that business occupancy tax right at the start.
I know we hear a lot of noise from the other side sometimes that it doesn't feel that's exactly right, but I think we've got to be able to get that. They continually say that we're going to roll the actual value assessment into a three-year average to make sure property that is valued at that amount of money -- that in a three-year period those people will be able to roll that assessment in together.
All of a sudden people talk about mill rates, and a lot of people don't understand mill rates. It's nice for the member from Kingston because he was a mayor and he understands mill rates, but there are hundreds and hundreds of people in Ontario who do not understand when you start talking mill rates. If you put it in as a percentage of tax, then they understand it, but they don't understand it as a mill rate.
I think these are the kinds of things we're going to be able to simplify, to balance the playing field and make sure that people are equally treated. It's only fair that everybody in Ontario should be equally dealt with, regardless of whether they are in downtown Toronto, downtown London, Elliot Lake, Thunder Bay or wherever it is. I think everybody wants to be on the same level playing field. Yes, there will be some taxes that go up --
Mr Bisson: Equity doesn't mean you all get treated the same.
Mr Rollins: That's right, it doesn't mean they will all get the same, but it starts out at the same. You cannot try to get an even start if you have some up there and some down here. You all have to start at the line together. By making assessment level across the province, it will certainly help to make the raising of taxes start from the same place.
One of the other areas in this bill that we've dealt with is theatres. I know in our little town of Belleville we've got a small playhouse on Pinnacle Street. It's a non-profit organization, very, very small. Yes, we need to have an improvement. We've got BCI down there --
Mr Bisson: Doug, one of these.
Mr Rollins: Don't worry.
BCI has just looked at bringing in an arts centre. I think if we develop that into an arts centre and a cultural centre, it will hold somewhere around 1,000 people. If that piece of property is exempt from taxes, as it can be under Bill 149, that will allow it to be developed, and some people, who may start out in acting and dancing, that kind of career, and the extra hours of activity that those people put in, could make themselves a lifestyle. I want to be very proud to be part of a government that has seen fit to have the foresight to allow those people to have exemptions.
Charitable organizations also should be dealt with under the Fair Municipal Finance Act. We know who they are in our community. Our members of council will be able to categorize them and give them the exemption of not having to pay tax so that those people will not have to go back to the same tax people in their city hall and ask for donations to run. They will be given the opportunity to keep those places without paying taxes on them. Those are the kinds of things we need to have.
We also have to look at farm lands, particularly the underdeveloped lands that are sitting there. We see them all around our small towns. I was in Trenton on Saturday and looked at an industry, and right at the edge of that industry where they just put a little development there's a corn field. There aren't too many farmers that close to Trenton; however, that land is being used for corn production. It's going to be developed before very long into industrial land. It can be adjusted under those tax conditions so it will encourage some people to make sure they keep that land productive in agriculture until such time as they have to put it into development. As soon as it goes into development, certainly the meter runs a lot faster on the tax bill on developed land than it does when it's on land that is being taxed on a farm basis, because the lowest amount of tax is what it's going to be taxed at.
One of the other payments we have are payments in lieu of tax. This is an absolute nightmare across the whole province, in every municipality, every council, whoever has the strongest council to argue about what they have to pay. It's a little bit like a wildfire, because if all of a sudden in Kingston they get paid X number of dollars for having a prison or a school or something that's run by the government in lieu of taxes, they hear about that in Trenton or they hear about it in Sault Ste Marie or Sudbury and they want the same kind of dollars. It's just continual with no continuity of where it's brought in. I think this will make it a little bit fairer. It will bring it into a little more level playing field.
One of the other things, as the speaker before me from Muskoka-Georgian Bay mentioned is about rights of way. Any of the companies that pertain to rights of way, whether it's Bell Telephone, Hydro, the railroad, the gas companies, certainly want some continuity as far as the dollars in taxes that are paid across the province. I think when the province starts to set those rates, those rates will be equal. They will not have the opportunity to increase in a municipality in Hastings county and then go to Renfrew or some place like that where they might be a lot cheaper or a lot lower. That company realizes, when it has X number of miles of railroad or X number of square hectares of right of way, those people will basically be paying the same tax on it. Once again, it just levels the playing field. We have to have the playing field as level as possible for the taxpayers, the tax collectors and everybody in the whole system.
2010
We have heard some concerns from time to time that taxes are going to be raised. Yes, there's no question that some people have had a lot less taxes to pay over the last few years. Some people could say that they had a free ride. I don't say it's a free ride, but they had a ride that they haven't been paying the fair freight on. Those people are going to be asked to bring the tax bill up to it. I think that's only fair. Most people in the province of Ontario want to be dealt with fairly. They're not asking for a free ride; they're asking to be dealt with, as far as fairness is concerned, in the even amount of taxes that they have put in.
There are some other properties that are owned by municipalities that have got to be dealt with in a little bit different category. We've got six categories of properties that we've got to put in. I know the different business categories that have to be dealt with. When there are different businesses, they are different circumstances that they're under and they must be taxed more fairly so those people can compete on the open and the global market and they are not overtaxed as far as the amount of dollars and taxes they have to pay, because those companies are the same people who, if we keep the tax dollars from being eroded away from them and deal with them fairly, are going to hire workers and keep the payrolls going on.
I stood in amazement here and listened -- and I know over the time we do listen to some things that happen from across the road -- and the speakers from over there continually say that we're going too fast. I'm awfully glad that they didn't go any faster over the previous five years before we got elected. The only speed that there was then was the size of the debt, where it started out and where it ended up at. That was at an awful fast rate. I wish we could take it down as fast as they were putting it up. We would really accomplish a fantastic amount of things.
We are trying to take those taxes down; we are trying to look after that deficit and maybe, before the five years is up, we will get back on to a balanced budget and start paying down some of those dollars that were -- I wouldn't say "squandered," but not spent wisely while we were on the other side of the House.
Mr Jim Flaherty (Durham Centre): Say "squandered."
Mr Rollins: You did say they squandered some. I think maybe some of it was a little bit on the squandered side. The people of this province who have dug in and done a lot of taxpaying over their days, when they get a little bit older in life, want to stay in their house and not be forced out because their tax bill is going to be raised too much. We have put a provision in there to make sure those people can take their time, back up their taxes a little bit --
Mr Gerretsen: And incur debt. It's a nice legacy you're leaving people.
Mr Rollins: It's a nice legacy to leave. When you leave this world I suspect even a gold credit card isn't going to help out some of those members from the other side. They probably won't stand the heat either. You've got to look after those people who have little in life and not be quite so bad about that. They'll stand a lot of heat. A lot of ours will handle the heat.
The biggest fairness of this is to make sure that the municipalities are given the tools that they want to be able to make some adjustments among the commercial sectors and to make sure that our commercial class -- that they can adjust those tax brackets. When you see the councils sit down and bring out their budgets, they're going to have a way of being able to fairly deal with the conditions that they're under.
Yes, they're going to have to sharpen their pencils and do a good job on it, there's no question about that. There are going to have to be some concerns for the people who are less fortunate than some others and who cannot afford to cover that. But all of those things relate to one thing in Bill 149: the fairness to make sure that these taxes are met with fairness throughout the province, not just within the municipalities but throughout the province. We have to start from a good foundation. A lot of the things in the government that we're trying to do, the foundation has to start from a fair, even, well-balanced assessment. That's where it's got to start.
I know as a kid going back in my younger life -- and that's going back quite a little way, probably back further than some of my colleagues from across the road -- I can remember my grandfather was an assessor. He was a good guy. He was an assessor in the township of Thurlow. It was amazing even as a young child, probably 12 or 13 years old, when my grandfather used to assess, they went all up and down the township and assessed the roads, the different stories he told when they were assessing of how poor the place looked and one thing and another and then "Don't raise the taxes."
In those days two or three people walked in from the street and took a look at the place and said: "You've got a nice house here and you've got a nice barn and you've got a pretty good-sized business. We see last year you were assessed at so much. Should we assess you at something different?" I can never get it through my head that something was worth maybe, in those days, $10,000 or $12,000 as far as the value of the place was concerned and they were arguing over an assessment number of $2,500 or $2,100. It took me a long time -- maybe I'm a slow learner -- to be able to figure out that the assessment had no relative value tied to the actual value of the property. There was always that fluctuating point in there.
The thing was that many, many of those taxpayers couldn't figure out why the guy next door who had supposedly just about as nice a house, maybe a little bit bigger barn, was paying $200 or $300 less in taxes than that guy. They came to find out, maybe with their friend the assessor --
Mr Gerretsen: Maybe one was a Tory and the other wasn't.
Mr Rollins: Maybe one was voting on the other side of the fence -- that might well have been -- and that is not fair. That has nothing to do with the ability to pay taxes or what their property value is. This is trying to bring back some level of continuity into it so that the people of Ontario can look at it and, with assurance, feel that they are getting a fair deal as far as their tax bill is concerned. A fair deal is that it's an actual value assessment.
Yes, that adjustment is going to be allowed to be rolled in on a three-year average, so when those people look at their assessment bill, they can relate those dollars right to their tax bill without worrying about whether you've got a lot of assessment on to it. The prime and key thing is that everybody should be even. If you start out with an assessment that is even -- I'm sure we can get the value brought back to where it's even. Whether it be in downtown Toronto or downtown Belleville or wherever it is, people with the same value of place should be assessed close to the same value, within a three-year average. Then we can address the problem of fair taxes not only for just one place in the province but from parts all over this province.
I do wonder a little bit, when you see some of these other people saying: "We thought of doing that and then we backed off. We decided the people were crying." Lots of times, when people start in hollering and cry too loud, all of a sudden, yes, they're getting close to something that's right. I'm awfully glad to think that we've got enough fortitude and foresight to, as a government, make sure that the actual value assessment does get put into place and that some day in the future somebody will say, "Wasn't it nice that they fixed the problem that started years and years ago in this province and nobody had the backbone to sit in there and make it fair and make it happen."
With the support of Bill 149 and with the fairness that it will bring to the taxpayers of Ontario -- yes, there will be some who say that taxes went up; but likewise there will be some who say that the taxes went down. We've got to look after those people. We've got to make sure that our companies and our industry are clearly enough assessed that we can make sure we're competitive not only in Ontario but also in Canada and also on the global market. We've got to make sure that everybody pays their fair share; nobody gets away with a complete free ride, but everybody pays their fair share. That's what this bill is all about: fair assessment.
Mr Gerretsen: It's hard to know where to start with this member. I like him as a member; he's a good neighbour up Belleville way. But he somehow leaves the impression that once we reassess all the properties, whether they're actual value or market value, clear across the province, then we're all going to be paying the same amount of taxes. What he forgets is that in order to come at your actual property taxes, you have to do two things: You have to assess the property and you apply a mill rate to the assessment. You multiply the two and you get the tax bill. That's how you get it.
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Listening to him, you would think this exercise is all about everybody in Ontario somehow paying the same amount of money. Well, he is dead wrong, because if one municipality has a high tax rate, they're going to be paying higher taxes based on the same assessment than another municipality. When you add into that mix the fact that this legislation allows you to set up different classes within, let's say, a commercial assessment -- you can have, I think, four or five different classes, and the same thing within the residential assessment -- you in effect can have about two or three or four different tax rates, different amounts of taxes that are going to be charged in the municipality.
So don't make it sound as if you're for fairness and equity. We're all in favour of fairness and equity. What we're saying is that this bill doesn't necessarily do it, particularly when you add on top of this that one of the services the province has downloaded is the assessment function. The province used to do it and it was done in a fair manner. Whether or not it's going to be done in a fair manner locally, clear across this province, is debatable, because remember, that's the reason it was taken away from the municipalities in the first place, about 25 years ago.
Mr Bisson: The member for Quinte certainly gave what I thought was an interesting perspective as to this debate. I want to touch on three points. On one of his logical points he went for about five minutes and it led us to the following conclusion: If everybody is mad at you, you must be doing something right. Well, I'll tell you, I've been around politics, like most people in this Assembly, for a little while, and the whole purpose of politics is to be able to govern effectively so that you don't get a bunch of people mad at you.
Everybody knows that, being government, there will always be somebody mad at you, because you don't always, with every decision you make, please everybody, and that's not my point here. But for this member to somehow say that when everybody is mad at you, you're doing something right -- boy, I'd love to be at some of those caucus meetings. What are they telling these guys? It's really scary. "Don't worry, guys. They're all mad at us. Everything's fine. We're doing great. Hey Mike, the teachers. Hey Mike, the municipal councillors. Hey, what about the firemen? What about the police? What about the ambulance drivers? What about the women? What about the children? They're all mad at us, so we've got to be doing something right."
What logic. I'll tell you, those caucus meetings must be really, really something.
The other point he makes is that taxes will go up and taxes will go down, but you have to remember that more taxes will go down than will go up. Take a look at study after study that has been done on this whole issue of MVA, because this is MVA for anything other than the word. The number of appeals that you're going to get when you introduce this system of actual value, current value, market value assessment, whatever you want to call it, is going to be in the neighbourhood of around 600,000 appeals. That tells me that you've got a big problem on your hands. The reality is that what you're handing municipalities is a ticking time bomb.
I'd really love to get invited to one of your caucus meetings. It must be fun.
Mr Grimmett: I am pleased to add my two cents worth of comments on the speech by the member for Quinte. I wanted to talk about some of the issues that he brought up, especially relating to small-town theatres and how the member for Quinte was indicating that there was a great benefit in Bill 149 to small-town theatres.
In my riding there are a number of small-town theatres that would benefit greatly from this provision. There's a theatre in Port Carling, there's a theatre in Gravenhurst, there's one in Huntsville, and I know the member for Quinte has several theatres in his riding too. They always have difficulty maintaining a year-round bank account. How can they pay their taxes on a year-round basis when they can't even maintain a bank account through the seasonal period that they operate?
Bill 149 indicates that where municipalities wish to do so, they can exempt small live theatres. This has a very significant impact on a small community.
As many people know, our government is very, very close with the arts community and we're very concerned about the arts community. So we have taken special efforts in Bill 149 to deal not only with the small-town theatres but also the theatres in Toronto. As many people would know, Toronto has the third-largest live theatre audience in the world -- the third-largest live theatre audience in the world in our theatres in Toronto.
We want to maintain the theatres in small-town Ontario; we also want to assist the theatres in Toronto to be competitive with their counterparts in other parts of the world. So what we've come up with is a competitive way for these theatres to be treated when it comes to assessment. We're going to make sure that the not-for-profit operations get the same tax treatment as the public theatres, and then the private theatres also. They all get dealt with in the same manner. It's all very clear.
Mr Gravelle: It's so interesting listening to the member for Quinte and all of the other government members who have been speaking this evening. They talk about fairness. They talk about fairness all the time and it's hard to imagine what could possibly be fair about a piece of legislation that essentially asks people to accept at face value that things are going to work out a certain way. Why won't they release the studies that show what impact these proposed changes are going to have on local property taxpayers? It's not fair if you don't do that. That's a minimum.
What's fair about moving so quickly with all their legislation that they frequently now have to come back and fix a previous bill up? They've got to fix the bill up. Surely that should be a message to the government members themselves. If you've got to fix a bill up, something is wrong. There's nothing fair about that.
What's fair about all the downloading that's taking place in the municipalities -- the downloading of social housing, the downloading of ground ambulance services, the downloading of public health -- when indeed it was advised by their own Crombie commission that these are things they shouldn't do?
When one looks at some of the issues in finer detail, such as public health, you see a Minister of Health who acknowledges potentially that genetic health counselling, for example, which is important in northern Ontario and needs to be maintained, is something they say they will maintain, yet we have not yet seen the proof of that and we've got to push it. There's nothing fair about that.
There's nothing fair about taking away the municipal support grant; $666 million taken away. There's nothing fair about that. They say it's all going to work out. You know, you look at a city like Thunder Bay; that's $20 million taken away. That's before the downloading. So you take away $20 million and then another $19 million, and you've got a huge, huge burden being put on the municipality, and then you add on the confusion over what's going to happen with Bill 149. There's nothing fair about that.
What's fair about telling municipalities, "We'll give you the details of the downloading on October 6," and then saying, "Well, maybe we can't do it by October 6"? It's not fair. The member for Quinte should acknowledge that.
The Acting Speaker (Mr Bert Johnson): The member for Quinte has two minutes to respond.
Mr Rollins: I'd like to acknowledge the member for Kingston and The Islands for the tax cuts that he generated for Kingston while he was in charge of that great city down there; the members for Cochrane South and Muskoka-Georgian Bay; the member for Port Arthur. I think that you people all have different perspectives on this bill, the same as maybe what some of us have is a little bit different. I think the biggest thing that we've got to look at is to be able to bring some continuity into the taxation of the province of Ontario to make everybody realize that we've got to deal with industry in particular; that it doesn't matter what part of this great province they're in, they're going to be dealt with fairly, evenly, so that they can compete not only in Ontario but in Canada and in the global market. If we don't have that continuity to make sure that happens that way, all we get is the bumps and bubbles as far as those companies trying to establish themselves is concerned, whether it's in the great riding of Quinte or in some other ridings around the province.
I want to say that as long as we can deal with the people who are disabled, the people that are on fixed incomes; if we can deal with groups like the theatre groups, if we can deal with the right-of-way people, to look after them and to bring that kind of continuity into it, we can probably accomplish more by working with those people and making sure that there is and evenness and fairness about this whole taxation system, so that when those people realize there's some fairness in it, if the tax goes up, they're not nearly as upset as when there's no fairness in it and there's no continuity throughout this great province of Ontario.
Mr Speaker, thank you for allowing me to say these few remarks today.
The Acting Speaker: Further debate.
Mr Caplan: This government is creating a great deal of concern and confusion about the property tax assessment system, particularly when it is three months before this new system is going to be implemented and in place. That's astounding. In their haste to fix Bill 106 with this piece of legislation to ask municipalities, to ask businesses to do any kind of planning for the new tax year, to do any kind of planning at all, they allow only three months for that to take place.
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This is a very serious issue. It is the most dramatic property tax change ever seen in Ontario.
I was very interested. The member for Quinte was talking and he acknowledged that this will cause property tax increases. I'm very surprised, given that this government is telling people it's keeping its promises. I recall very specifically that in their Common Sense Revolution document this government, Mike Harris's government, said no action they take will cause property tax increases. Perhaps the member for Quinte and many of the other members will want to stand in their places and explain to the people of Ontario, explain to my constituents in Oriole, why they've broken that very key and fundamental campaign promise.
As I said, this piece of legislation comes into effect January 1, 1998, which is just three months, an incredibly short time line if you're in business, and I have been in business and many of the members opposite and on this side have been in business. That is simply not enough time to do the proper planning, to do the proper projections and to have your finances and everything in order, to meet whatever deadlines need to be met.
We haven't even seen the tax rates -- those are being set by the minister -- tax rates for graduated rates for commercial properties, for rights of ways, for gross tax receipts and many others. Why? If this is of such key importance to this government, why the delay? The minister sets about 25 different tax rates under this bill, subject to whatever amendments may be proposed, and no information has been forthcoming. It's very clear to me and to the people of Oriole that this bill doesn't achieve any kind of consistency; it just creates even more unfairness.
With the removal of the business occupancy tax, you're going to start pitting small businesses versus large bank towers. Can this government explain what's going to happen to those small businesses in comparison to the large bank towers that are right here in the heart of this city?
The rights of way: The member from Muskoka was telling us how this had all been fixed and it was all going to be changed. Well, can he explain why there will be higher rates for rural areas under the rights of way?
Another point of unfairness is that we graduated rates for commercial properties. This will penalize large mall owners. In fact, many of the mall owners over the past five years have been appealing their tax assessments, quite successfully I might add, to the Assessment Review Board, to the Ontario Municipal Board, which by the way under Bill 149 will be eliminated as a route of appeal. These mall owners know the unfairness and they're going to be gouged even further. What does that mean? More uncertainty for the tax base, for municipalities, for school boards, for all those institutions which are dependent upon the tax base.
I have to ask myself, what are Mike Harris and this government trying to hide? Why will they not release any impact studies? They must know what the results of Bill 149 are going to be on local taxpayers, on local businesses. In St Catharines, the mayor of St Catharines, along with several other mayors, has gone out and funded an independent study to look at what the impact is, because this government will not produce any kind of numbers at all about what the impact of Bill 149 is.
We had the member for Mississauga here earlier telling us what a great town it was. Perhaps he should consult with the mayor of Mississauga, who says the same thing. In fact, every mayor in Ontario, every municipal councillor, is telling us the same message, that without the numbers they don't know what the impact is going to be. They have some ideas. They've projected some things out with the downloading, with the impact of this, but the government refuses to share those numbers. Why? What is there to hide?
As I said, this new system is going to be in place on January 1, 1998. No tax rates have been set. Businesses cannot do their planning; municipalities cannot do their planning. We're just getting mass confusion, needlessly. An open consultative process would certainly go a long way to making this bill much more palatable.
In a third vein, we've had two finance bills, Bill 106 and Bill 149, but we still have no bill from the government on education financing. Why not? That is a key component of the tax system. In fact they're leaving a great deal of it on. Where is the plan? Where is the vision? Where is this all going? The members opposite can't answer that. The Minister of Education, the Deputy Premier, the finance minister can't answer that. Why? Because there is no plan. It's being made up as they go along.
Perhaps the most unpalatable part of this ripoff by Mike Harris of property taxpayers, both residential and commercial, is this whole downloading plan. Just to touch on a number of the areas: welfare, family benefits, drug benefits, long-term care, home care, public health, public housing, child care, highways, ambulance services. All of these are being downloaded on to unsuspecting residents, unsuspecting businesses, resulting in higher property taxes. I know the Premier, at AMO, pinkie-swore that this would not result in any property tax increases. He called this revenue-neutral.
It is really interesting. It's a question of credibility. Whom do the people of Ontario trust? Do we trust David Crombie? Do we trust Joyce Trimmer? Both of these people, by the way, have been asked by the Conservative Party to do some studies for them. Do we trust the Metro Toronto board of trade, good friends of this government? How about the Toronto Real Estate Board? How about every mayor and every council in Ontario?
You have the Minister of Municipal Affairs, the Premier, the Minister of Finance all telling us that this is neutral, this is good for us, it's not going to make any difference, and you have everybody else in the province telling us that's not the case, that this is going to place an additional burden on residents and on businesses, and that it's bad for business, it's bad for our communities and it's not well-thought-out and really is a terrible mistake.
The downloading plan is adding about $660 million to the property tax base and it could mean potentially a 4% or 5% increase in property taxes. Of course, it may not. You can cut your services. We can cut transportation, road maintenance, all of the ones that are being downloaded: drug benefits, long-term care, home care, public health, public housing, child care. These are things which obviously the government doesn't value because it doesn't want to pay for them. They want the residents to pay for them and you have to make a Hobson's choice. You can either cut it or you can raise taxes. Those are your choices.
I remember at the outset of all this the Minister of Municipal Affairs and Housing said this would result in a 10% decrease in property taxes, yet won't commit to reducing the portion of the property tax bill they are setting. In fact the minister was shown such disregard at the recent Association of Municipalities of Ontario meeting held back in August that he was laughed out of the room. This, for a minister of the crown who has extensive experience in the public sector, who should know better. It really does show the lack of confidence our public leaders have in this government and in the actions it's taking.
It's very interesting. One of my colleagues said, and I've been saying this to the people in Oriole, don't listen to what this government is saying, look at their actions, look at what they're doing. We've heard things like: "We want quality education. We're going to protect the classroom." Yet their Minister of Education cuts $533 million from Ontario's classrooms and has admitted that it has affected kids and their education. We've heard from this government on countless occasions that they're going to protect tenants, yet they introduced Bill 96, which is a direct assault on tenants. We have seen this whole area of property tax, where the government said that no action they take will result in increased property taxes, yet the member for Quinte admitted that property taxes will go up as a result of this legislation and the other actions of this government.
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So look very clearly at the record: They say on the one hand and do on the other, and the two are not the same. The people of this province and the people of Oriole -- I know from talking to them over the last two months -- are not fooled.
It's clear that the government is spinning out of control: The downloading, the property tax changes, the amalgamation, the education changes are all happening at the same time. It's just a jumbled up puzzle. It seems that the various ministers and the Premier and the leaders in this government keep taking pieces out and throwing them away, and now we're supposed to fill in a puzzle which is totally incomplete. That is not the way that government is supposed to work. It is supposed to be rational. We are supposed to be here to provide service for the people of Ontario. We are not here to create undue hardship and increase hardships on people who live in our communities.
I am very concerned about the effect this legislation and in fact all the actions of this government are going to have upon our communities and upon our businesses. We have had deafening silence from the government benches. They cannot produce any numbers, they refuse to show us any kind of studies and in response to queries and questions from municipal leaders, they keep pushing back the deadlines.
We've had a Minister of Education who promised a toolbox over a year and a half ago; it was empty. Then the gentleman said we'll have a fair funding model for all students in the province -- nothing, still nothing, and September 1998 is very close. Boards need to start planning, municipalities need to start planning and people need to know where they stand, but right now this government is flip-flopping around, cannot decide whether they're going to have extra days in the school year, whether they're going to cut the 13th year out of Ontario's education this year or the next year. They just cannot decide what it is they stand for, where it is they're going, and the people of Ontario know this.
Why doesn't this government just stand up and say: "We need help. We've made some mistakes"? Fine. We're very generous. We want to help. We want to all make sure that Ontario is and continues to be a community that thrives and is prosperous for all our citizens. Work with us. The government members should look to all our communities as resources, but unfortunately don't. They take the attitude: "We know best. All of you are just special interests. You have no idea of how these things work, and we'll take care of you." That's a very offensive attitude on the part of this government.
In Bill 149, the minister is giving himself dramatic taxing power by regulation. Backbenchers in this government should be appalled. I thought this neo-conservative movement was all for decentralization, minimizing and reducing the amount of government in people's lives. Why is this government centralizing power in the hands of a minister by regulation? Why have they done that in Bill 26 with health care? Why have they done that in Bill 103 with municipal affairs and housing? Why have they done that in Bill 104? It's a consistent pattern: the need to grab power, to make decisions and sidetrack the legitimate, democratic institution we have, the Legislative Assembly, and somehow slip in the back door these types of methods and these types of directions, which are not accountable, not democratic. The government backbenchers particularly should be ashamed of themselves.
There has not been enough time for the people of Ontario to absorb and understand all the changes this new system is going to bring into effect. I'll just highlight one. The Ontario Municipal Board used to be the final arbiter in any matters relating to assessment and taxation. That route has been effectively cut off; it is now the Assessment Review Board. That appeal process was very important, because it was an independent appeal. Everyone could go that route. With that kind of change, there are certainly strategic implications to anybody looking to appeal their assessments, be they municipalities or be they residents or businesses.
In fact, the recommendations in Bill 149 go against the recommendations of their handpicked panel on social housing. Why does the government not listen to its own experts? We've seen this in other areas as well. The Minister of Education says, "We're going to have an expert panel give us some input and some thoughts on educational matters." One of those was to reduce preparation time by 25%. What does the minister do? He said, "Great: 50%." The expert panel said that any saving found in education should be reinvested in education. What does the minister do? He waffles and won't commit to anything. He won't commit to kids. This government will not commit to the people of Ontario, and that is tragic.
Everybody in this House and everybody across Ontario wants to see fairness, but Bill 149 increases the unfairness within the property tax system, as I outlined earlier. It takes the concept of fairness and twists it and perverts it.
We really do have a government which is spinning out of control, which is wandering aimlessly, which has lost its sense of direction. It knows it has certain targets to meet in terms of funding a tax cut, in terms of deficit reduction. By the way, the initial promise from this government was to reduce the deficit in their first term. They're not going to make that; it's not even going to be close.
I really wonder, where is the commitment of this government to anything? Why will the government members, particularly the backbenchers, not stand up and say, "We will be accountable"? Why the refusal to be accountable? Why create all these arm's-length panels to give you advice, to get order-in-council power? Why not stand up? Why not say, "The buck stops here. This is our decision and we're going to live by it"? If you've made a mistake, admit your mistakes. That's fine. The people of Ontario are very generous. But that's not the case. The government is confused and moving out of control, and it's their confusion which is causing great concern and even more confusion and angst among the public.
This is terribly disheartening. When I went door to door in Oriole many people said to me: "What's the point of even going out and voting when we have a government that is wandering aimlessly, does not know where it's going, does not know what it's doing and, even worse, refuses to listen?" They refuse to listen to the good sense and to the recommendations of the people of Ontario, the people who have built this province. It's not a government; it's people. I would encourage and invite the members opposite, particularly members of the front bench, to start to include the people of Ontario in helping to restore and rebuild public confidence in this province and in our community of Ontario.
The Acting Speaker: Questions and comments? The Chair recognizes the member for Cochrane South.
Mr Bisson: Chair, it's always a pleasure to see you in that chair. I want to comment on the speech just made by the member for Oriole, two points that came out of it.
Early in his speech he talked about the AMO conference that took place about a month ago. I, as the member for our caucus, was there for the three or four days it was on. I was there when Al Leach, the Minister of Municipal Affairs, the minister of ministers when it comes to municipalities in this province, talked about how the whole downloading exercise was going to be revenue-neutral. The member is right. The Tories don't want too many people to remember this, but the minister was laughed at. The leaders of the municipalities of Ontario laughed at the Minister of Municipal Affairs, because he stood in front of all those people who are at the receiving end of his downloading exercise and had the gall to say, "Don't worry, this is going to be revenue-neutral." They all laughed, and they didn't laugh because they thought it was funny. They laughed because they thought: "Is this guy delusional? How can it be revenue-neutral? We're the ones that are going to get all these services you want us to take on and we're the ones that are going to end up with the increased costs." That's the point they make.
The Premier a couple of days later came in to give the big speech of the AMO conference, and he spoke very convincingly, I must say. The Premier can speak a good line when he's out there in front of the people. He made the same comment: "This is revenue-neutral." You know what the leaders of the municipalities of Ontario did? They booed, because they understand that this is not revenue-neutral, not at all. This is about the province offloading its financial obligations and responsibilities on to municipalities. The province ends up decreasing its expenditures, at whose cost? At the cost of the municipalities and their taxpayers. They're the ones who will end up paying in the end.
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Mr Grimmett: I'm pleased to address the comments made by the member for Oriole. Unfortunately, I'm a little disappointed in the member for Oriole. He's been here for a couple of weeks, and the first few days I said to myself: "Here's a new young member. He sticks to the topic. When he gets up he is well prepared, has read the bill etc." But tonight I'm disappointed. It's obvious that he's been watching some of his colleagues and has started to pick up their bad habits. He got up and, unfortunately, it was rather obvious that he hadn't read Bill 149. He did speak about some other bills -- I'm not sure he's read them either -- but he did not speak to Bill 149. He did a good job of speaking around Bill 149 and speaking about other issues. I think those are bad habits.
What I would have liked to have heard about from the member were the substantive problems with Bill 149, if he has any. He probably doesn't have any. If he had read Bill 149, I think he would have been quite satisfied with the treatment it gives to assessment, because Bill 149 is all about fairness and trying to provide fairness. It's trying to provide fairness to farmers, small businesses, municipalities and to those businesses that have rights of way in Ontario. Those are all issues that need to be addressed and they're all issues that I'm sure the member for Oriole knows his constituents are concerned about.
Another thing the bill does is that it extends protection for low-income seniors and disabled homeowners. I'm sure that when he was campaigning during the recent election he ran into seniors and disabled people, and they would be quite interested to hear his comments about Bill 149. I would like to hear from the member for Oriole his comments about the sections of Bill 149 that provide relief for seniors and disabled Ontarians.
Mrs McLeod: I would certainly be one to suggest that the member for Oriole spoke very directly to the bill when he was speaking about all the effects of downloading and the effects downloading will have on property tax. That is very much relevant to any bill which stands in the name of property tax reform, when in fact the reform is simply camouflage, something the government has to do out of necessity to try and recover from the sheer mess they are making with the downloading. Any comments related to the downloading are relevant to this so-called property tax reform bill.
I know that the member for Oriole, because he has a background in education, would have wanted to spend more time in his comments on the government's plan for dealing with the educational property assessment. After all, for the first time a provincial government is going to be levying taxes directly on property for educational purposes. I know the member for Oriole wanted to speak to that. He said he would like to speak to it. He said he would like to know what it's going to look like in different communities when the government brings in its uniform mill rate assessment for residential purposes for education. He'd like to be able to address that issue, but he can't, because we can't get any figures from the government. He would like to be able to talk about what's going to happen with commercial assessment for educational purposes. There, you'll remember, the government is going to still require businesses to pay 100% of the tax for educational purposes, but nobody knows how the government is going to levy it. It's not in Bill 149.
I agree with the member for Muskoka-Georgian Bay: It's not in the bill. The problem is that it should be in the bill because the government should have a plan. The whole point that was being made by the member for Oriole is that this government is undertaking massive reform of property tax, so-called reform, but they don't have a plan to do it. They're doing it a step at a time: one step forward, in their minds, and two giant steps backward when they discover the mess they've made; another tentative step forward; and the plan evolves on a day-by-day, bill-by-bill basis. When are we going to see the legislation that will actually address the issues the member would have liked to address in his speech tonight?
Mrs Boyd: I want to congratulate the member for Oriole on his speech and say to him that he clearly, as the member for Muskoka doesn't understand, has a very clear grasp of what the problem is with this bill. He very eloquently expressed, in ways that the general population can understand, exactly what the problem is with the bill we have before us. I find it strange that the member from Muskoka would assume that someone who was able to discuss this bill as thoroughly as the member for Oriole did had not read the bill. I certainly didn't get that impression at all.
I think what we are hearing here, if it's any comfort to the member for Oriole, is that the only way government members can protect bad legislation is to attack those who criticize it. That's exactly what we're seeing. We're seeing, in perhaps a more polite form than is usual for this government, the kind of bully tactics we've become used to from them. When we don't agree with them, when the board of trade doesn't agree with them, when AMO doesn't agree with them, when anyone doesn't agree with them, they attack the person who disagrees rather than dealing with the substantive questions that are raised.
The member for Oriole is quite right that if we had the full information in front of us, if we actually knew the impact of this bill and all the other changes within the context of which we have to look at this bill, there might not be so much angst. But this government continually withholds the information, probably because it doesn't have it, probably because it hasn't done its homework. But if it has done its homework, it's withholding this information because it knows that the figures are convincing, that the member is right.
The Acting Speaker: The member for Oriole has two minutes to respond.
Mr Caplan: I note with interest that the member for Muskoka-Georgian Bay did not refute anything I said in my presentation, which just indicates that he knows I've made a very cogent argument as to the aims and goals of this government and of this piece of legislation. I would invite him, in fact all the members of the government back bench, to be much more upfront about what their government's agenda is, to be much more upfront with the people of Ontario about what the impacts of these decisions are going to be.
I must admit I don't have all the answers, because I can't get all the information. As the member for Fort William quite rightly points out, I would much rather be talking about this in a comprehensive way. I would much rather be talking about not only property tax reassessment and downloading but also the impact of educational governance and change. What is that going to mean for the people of Oriole, for the people of this entire province?
Property taxes were reserved for municipalities and for municipal institutions to fund their programs. The provincial government has its own revenue streams. It has sales taxes, it has income taxes, it has other levies as well. To now begin to raid the property tax pot is clearly against what it was designed for. I would really hope that the members opposite would stand in their places and say that enough is enough. You've got your hands in too many pies already. This one you're going to get burned on. So stop, reflect, make some changes, because the people of Ontario cannot afford the arrogance and shortsightedness this government has in relation to these matters.
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Mr Martin: It's a privilege as usual to rise in the House and speak to some of the matters before us; on this particular occasion, a bill which is going to change the way we do property tax assessment in this province. We've heard this evening from various members around the room, various pieces of concern, various issues that need to be addressed and put on the table, that all of us need to be concerned about.
As we enter into this rather revolutionary change in the way property tax assessment is imposed in Ontario -- and others will speak tonight and tomorrow who will be a bit more eloquent in the finer details of the bill and how it will play out and affect individual taxpayers and perhaps even individual communities. I won't do that this evening as it's not usually my wont. I want to put this bill into some context and to make the links, as we're wont to say sometimes around here.
I want to speak specifically to one piece of the bill which will paint the picture that should be becoming obviously clear to anybody who's listening: that this government has an agenda that will see those who have most in this province, those who are well off, those who are in power gain more of that, become more endowed with the riches we all participate in generating, and who will at the end of the day have more control over the levers that control where those revenues and those profits go that are generated by the hardworking men and women of Ontario.
We know from looking at other jurisdictions, and we know from the events so far in the evolution of the agenda of this government so far, that there is a shifting going on in this province that is hitting the less-able-to-deal-with sector of communities, and this bill is no exception. What we're going to find is a government that is going to be taxed by the fact that they're going to give a tax break that will benefit those who are richest in our communities, and this will present the government with a problem of how to deliver services, of how to pay for services that need to be delivered.
Even though the efforts so far by the government have been to reduce the amount of services that are delivered, they're being very effective at that, and at laying off the people who deliver those services -- in the recent Bill 136, even with those people who are left in the business of delivering government services, they are taking away from them the little they get by way of their pay packet, by way of their benefit plan, and at the end of the day we'll find by way of their pension package.
They will still need to have more money to meet their targets to balance this budget, as they predict, by the turn of the century. They will go after the little bit of money that can be squeezed out of the property tax system. What we'll find is that as in every piece of legislation this government has put forward, the big guy wins and the little guy loses.
I want to talk for a very few minutes about one particular part of this bill which is exactly what that is all about. It's the business occupancy tax change that is in this bill and that we are going to see unfold in the not-too-distant future if this government is allowed to continue down the track it has chosen for all of us. This little change in the way we administer the property tax system in Ontario is going to give banks a 40% tax break, and it's going to hand to small businesses and municipal taxpayers a bill of $1.6 billion.
Can you imagine? The banks, which are today making historically record high profits, are going to be handed a 40% tax break in their property taxes -- I wish I were a bank -- while the small business community, those people out there who actually make the economy run -- even the members across the way say small business is going to be the future for Ontario. It's going to be where people are going to work; it's going to be where revenue is generated; it's going to be the engine that drives the economy of Ontario. They're going to be hit with a bill, along with the rest of us who own property or who live in homes -- and there are fewer of us each day, as this government goes on, who live in homes or who have a home they can call their own -- a $1.6-billion increase in their property tax bill, once this is done.
In the midst of the government's property tax changes, municipal restructuring and offloading of vital social services to municipalities is the elimination of this business occupancy tax.
The business occupancy tax is worth $1.6 billion in municipal revenues across the province. In Metro Toronto the business occupancy tax represents over $600 million of revenues Metro has to fund for services it now provides: the social services it gives out, the garbage pickup, transit, policing and firefighting etc. This represents a significant financial problem for municipalities, given the fact they have just been handed the expense of welfare, some health care services, social housing, transit and all roads by the Mike Harris government.
Recently Metro has released figures which illustrate that some $400 million in extra costs was passed on to it by the province; that is, $400 million more in expenses after they take into account that they no longer have to pay for education costs.
That's the smoke and mirrors in all of this. Every time you raise this issue with the government, every time you challenge them on the fact that it's going to cost municipalities more to deliver the extra services they're now going to be asked to be responsible for, they say, "We're going to remove some of the education tax off of the property tax." However, the figures that are done by those who know, particularly by municipalities, tell us that some $400 million in extra costs will be passed on, above and beyond what --
Interjection: Ch-ching.
Mr Martin: That's a ch-ching for sure. Yes, that'll be ch-ching for every community in this province as they put out to try and pay for what the province traditionally has deemed its responsibility and has agreed to pay for over the years.
But the $400 million figure leaves out $600 million in revenue lost with the elimination of the business occupancy tax. The province has handed Metro region a $1-billion problem, an extra $1 billion that they're going to have to find and they're going to have to find it through the property tax.
That's what this bill is about. It's the smoke and mirrors that's required to make it seem like it wasn't the provincial government which downloaded this on to the municipalities, that it was the municipalities themselves as they made decisions around what they would and wouldn't deliver and how they might pay for that.
This $1 billion still leaves out future capital costs of repair of aging TTC facilities -- for those who don't live in the Toronto area that's transportation, the bus and the subway systems and equipment -- repair and upkeep of the social housing stock, and increases in the cost of nursing homes as the population ages and more hospitals close.
The Mike Harris government has blithely assumed that the revenue lost through the business occupancy tax can be made up through increases in the property tax base. That's where you and I get hit, that's where the small business person gets hit, but not the banks. This is set up so that the banks and some of the larger property development companies in this province get a reduction in their tax bill because this government feels that if you give the big guy all the room he needs to wheel and deal and make money, somehow, some way, at the end of the day we will all be better off. Well, we have news for you.
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However, the Mike Harris government has also imposed some rules on just how municipalities can do this. These rules do not bode well for the residential property taxpayer or small business in Metro. Here's why. The business occupancy tax was introduced in 1904; it was probably a Tory government back then. It's a tax levied against the operator of a business, not the owner of the property. It is a tax paid by people running businesses, in addition to the property tax.
The rate at which the business occupancy tax is paid is varied by the type of business being taxed. At the time at which the tax was introduced, the variable rates were based on a perceived ability to pay, in that some types of businesses were viewed as generally more profitable than others. Flexibility: For example, retail outlets are taxed at 30% of the assessed value of the property they occupy. Banks are taxed at 75% of the assessed value of the property they occupy.
Eliminating the tax means that municipalities have to choose whether to absorb the revenue loss or try to recoup it from the property tax, or cut services to all of us. If municipalities choose to make up the lost revenue through increases to the property tax, that means the variable rates are also eliminated and taxes are based on the value of the property. If a municipality tries to get the lost revenue from the commercial and industrial class of property taxpayers, that will mean that small retail outlets would see a possible 50% increase in the tax they pay.
I've recently been working very hard with a group of small business operators in this province called franchisees. They're having difficulty making ends meet, with the small margin they're allowed by the franchisor and the debt they find themselves in once they get into business. Can you imagine how they're going to feel when they experience a 50% increase in their property tax, how many of these small businesses are going to go under? We already have in this province a record-high bankruptcy rate in the small business sector.
I raised in the House last week the fact that right now one of the jurisdictions experiencing particularly difficult times and historically high bankruptcy rates is the hospitality industry. Restaurants are going bankrupt at an alarmingly high rate. This is before the changes we have before us now, which will call for them to put out a 50% increase in the property tax they pay, if this goes forward.
Banks, on the other hand, would see a decrease of some 40%. This is the industrial sector today that is experiencing record-high profits. Does this make any sense? We have on one hand a small business community experiencing some tremendous pressure and a very high bankruptcy rate because they're having a difficult time making ends meet. On the other hand, we have an industry sector making historically record-high profits and we're going to give them a tax break in this bill that's going to change the way we assess property tax.
It sounds familiar to me, like déjà vu all over again. It sounds like the tax break. They're giving a tax break that's going to see the poorest and the ordinary, middle-class working person, yes, making a certain gain on that, and they appreciate it -- trust me -- in the world you're presenting to them today. But on the other hand, you're giving those who are making extraordinarily high incomes in these very difficult times, the banks included, a huge tax break. You're taking services away from the lower and middle class. At the end of the day, even the tax break they get by way of the income tax reduction will end up not being enough to cover that, so they'll be losers. But you can be sure that those at the top end will be net winners. In the bill we have before us today, that's exactly what's going to happen when it comes to the property tax issue.
The Mike Harris government says in response that municipalities have been given the opportunity to create a new class of property tax for small businesses in order to give them a lower property tax rate. But Bill 106, and consequently the bill we have before us here tonight, allow municipalities to establish a lower rate for lower-valued commercial properties, so the ability to help small business is limited by the value of the property they occupy. In other words, it's impossible to achieve the same differential that existed between businesses under the business occupancy tax. Even establishing any differential at all requires the creation of a new class of property.
Further complicating the matter is the fact that this bill says that municipalities may set different tax rates for different classes of property, but only subject to provincial parameters. They make the rules. Even if a municipality comes up with a way of levelling this playing field, they can make sure their rich friends are the net winners. Those provincial parameters prevent municipalities from increasing the burden of property tax paid by business compared to the burden paid by homeowners.
By establishing a new class for small business, municipalities may cause the burden of the business occupancy tax to be picked up by residential ratepayers. Even if you find a way to make it easier for the small business person to deal with this, somebody has to pay, and who is that somebody? It's the small business person when he goes home and pays his residential property tax and it's the rest of us when we go home from work and pay our residential property tax.
What this all means is that this bill actually prevents municipalities from raising property taxes paid by businesses. Municipalities have been put between a rock and a hard place with the property tax assessment changes at the same time as they have an increasing burden in funding provincial social services.
It gets better with every day that goes by here. Every piece of legislation that comes in front of us contributes more and more to this phenomenon, where those who have, those who can afford, those who are doing well, those who have power get more of the same, and those who don't, those who are vulnerable, those who are marginalized, those who are struggling to make ends meet, those who are facing the possibility of bankruptcy continue to get kicked in the shins and have to work hard.
If you look at the places in North America where the Common Sense Revolution was developed and if you read it and understand it in any significant way, you begin to see that there is a pattern and that what has already happened in other jurisdictions where the Common Sense Revolution has been applied is going to ultimately end up being what happens to us here.
I want to read a piece that was shared in this Legislature not so long ago by the member for Nickel Belt, Mr Laughren. He read a piece out of the Associated Press that was talking about the Governor of New Jersey, Christine Todd Whitman. It says:
"Whitman Makes Election Year Promise to Curb Rise in Property Taxes Caused by Her Own Fiscal Irresponsibility.
"New Jersey governor Christine Todd Whitman has made another election year promise to reduce property taxes in New Jersey, which have soared over the past three years due to Whitman's own irresponsible fiscal policies. Whitman said yesterday that she wants to create a program to ease the property tax burden, but failed to offer specific details of her proposal. Whitman has been widely criticized for the rise in the state's property taxes caused by her 30% income tax cut" -- sound familiar, folks? -- "which cost the state $4 billion in revenue" -- in Ontario it will be around $5 billion a year -- "and forced Whitman to cut state aid to municipalities and school districts to cover the loss. During Whitman's time as governor, the typical residential property tax bill in New Jersey increased by 12%, outpacing the 9% national rate of growth. The state's per capita property tax burden was $3,562 in 1995, the highest in the nation." That's from the Associated Press.
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Any of you who don't think that this is the blueprint upon which the Common Sense Revolution is built, if this isn't what we have in store in Ontario, you just have to remember that in March 1994 Mike Harris went to New Jersey to meet Governor Whitman and to seek additional advice. Two months later, the Conservative program was presented to Ontarians at a news conference.
The Acting Speaker: Comments or questions?
Mr Flaherty: I listened with interest to the remarks by the member for Sault Ste Marie, who talked the usual ideological, dogmatic talk of burdens to working people and tax breaks to help the rich. He forgets, I guess -- and this goes to a question of credibility and reality in today's Ontario -- who gets these breaks that he says help the rich. The tax cuts for the rich that he talks about, 61% of the tax cuts benefit those persons earning between $21,000 and $75,000 per year. According to the member for Sault Ste Marie, those are the rich people in Ontario today, that is, those people earning between $21,000 and $75,000 per year. That's the sort of credibility that we're presented with in the speech by the member for Sault Ste Marie.
The Toronto Star, on February 20, 1997 --
Mr Bisson: Mr Speaker, on a point of order: The member across the way was saying that the member over here was not credible. He was saying basically that the member had no credibility.
The Acting Speaker: No he wasn't. That's not a point of order.
Mr Flaherty: I know that the members opposite think well of the Toronto Star. In an editorial on February 20, 1997, looking at the federal Liberal government's budget, the editorial writers of the Toronto Star said:
"Corporate bosses and rich Canadians pay enough taxes, according to documents issued with Tuesday's budget. In an appendix to the budget called `Tax Fairness' the government goes to extraordinary lengths to explain why corporations should not face heavier taxation and why Canada does not need a personal wealth tax. Twenty-three percent is the average tax rate for those with incomes of $50,000 to $100,000; 33% for those of incomes above $250,000 in Canada today."
I'm wowed by the wisdom of the writers of editorials of the Toronto Star.
Mrs McLeod: I very much appreciated the very thoughtful comments of the member for Sault Ste Marie on this second part of the so-called property tax reform agenda of this government. I found it very interesting but not surprising that the member for Sault Ste Marie shares the scepticism that was earlier expressed by the member for Kingston and The Islands and the member for Oriole about whether this so-called reform is actually going to result in a freezing of property taxes or in fact the decrease in property taxes which the government keeps talking about.
The member for Sault Ste Marie of course recognizes that it's going to be virtually impossible for the $5-billion cut in income taxes to which this government committed itself to be achieved without a significant dumping on to the property tax base, in order for the government to be able to make the kinds of cuts it needs to make to find the dollars to pay for that income tax cut.
What happened to the days when Mike Harris used to say that there's really only one taxpayer? He seems to have forgotten that, when he starts dividing it between the people that he has promised an income tax cut to and the property taxpayers that he is about to dump his agenda on. I use that term advisedly, even though members opposite prefer us not to be talking about the downloading.
The member for Sault Ste Marie touched on the business occupancy tax, and I'm sure he shares the concerns that I do, coming from a medium-sized northern Ontario community, where our businesses are going to find any increase in taxation truly onerous. If I had time in this two-minute response, I would want to come back and stress the fact that businesses are still going to have to pay 100% of their educational assessment, although it will be taxed directly by the government.
We don't know how much that's going to cause in terms of an increase for businesses in our community or in Sault Ste Marie or indeed in Metropolitan Toronto. But we know that businesses are going to face an increase in their property tax assessment when they have to pay the costs of the government's downloading plus the government's charges to them for education. I don't think businesses can handle that kind of hit, and the business occupancy tax does not relieve them of what they'll face.
Mrs Boyd: As always, my colleague for Sault Ste Marie gets to the real heart of the problem, that we face a government that is determined to change our tax system from a progressive tax system, a system based on the ability of people to pay according to what they earn, to a regressive tax system, which of course is the property tax system where it takes absolutely no account of the ability of the payer to pay. It simply sets out a regime whereby a certain assessment value garners a certain tax.
My friend talked about all the concerns in the light of this determination of this government, and it is quite, quite clear as you take the cumulative effect of all the changes that have happened, that in fact what he has said in terms of the experience of New Jersey can be expected to be replicated in Ontario. Once you determine that you are going to take a huge portion of the costs out of the progressive tax system, you have no alternative but to put those costs in another place. It's quite clear they're going on the property tax, and the property tax pays no attention to whether people are able to pay it.
Businesses will fail. Senior citizens on fixed incomes will not be able to maintain their properties and to stay in their homes, as we all have said is needed, without the prospect of going into a negative assessment situation where they lose the only piece of property that they have to leave to their children. It is indeed stealing from the poor to give to those who are more well-off.
Mr Harry Danford (Hastings-Peterborough): It's a pleasure to rise and respond to the comments that have been made tonight and in particular to the comments made by the member for Sault Ste Marie. Certainly the introduction of the Fair Municipal Finance Act -- and indeed Bill 149 was introduced -- as we continue on with it, will bring stability to the assessment situation in Ontario.
I've been involved in municipal work for a number of years and I can well remember each year, in the spring of the year, there was always a debate at county council about assessment, how it varied so greatly from one municipality to the other, and therefore had an effect even within our county system, and how it affected every individual. It's certainly time it was addressed. We have finally found a government that is willing to put forth the amendments and the changes needed to bring stability to the assessment process in the province.
I just have a couple of minutes as the time is very short, but I'd like to speak for a second on one particular aspect of it, and that has to do with tax relief for the low-income property owners. That refers to seniors and those who are affected with disabilities. With the changes, and as we go from market value to actual assessment, the portion that's allowed for there is the reassessment, and we have a grace period of up to eight years. I think that's a very important aspect for those people who find themselves in that position.
This government took that position and recognized that there was a need to make those phase-in periods to address those circumstances. In this aspect, all the tax classes will pay their fair share. I think that's necessary as each municipality looks for the needs to support their community through their tax increases and their changes.
The Acting Speaker: The member for Sault Ste Marie has two minutes to respond.
Mr Martin: Thank you to all of those who have responded to me and participated in the debate tonight. Lest anybody not believe that what's happening in New Jersey is coming at us and is going to be damaging to the middle-class working men and women of this province, let me just share with you what is happening in New Jersey three years after they put their Common Sense Revolution program in place:
"In order to pay for the tax cut Whitman has had to lay off thousands of civil servants, cut many health and social service programs, slash funding to municipalities and school boards, privatize many government agencies and siphon more than $1 billion from the state pension fund.
"To offset reduced state funding, municipalities have had to institute all sorts of user fees, such as for garbage collection, and increase property taxes dramatically.
"As for the 30% tax cut, a study by the non-partisan state legislature's research arm showed that less than 17% of New Jersey taxpayers -- its high-income earners -- would receive more than half the cash value of the tax savings from the Whitman cuts, so their cuts were reduced somewhat.
"Her whole idea was to put more money into the hands of taxpayers so they would spend it locally and create jobs. Not necessarily so. One commentator points out that wealthy New Jerseyans who have received sizeable tax relief haven't spent the money where it would create jobs. `They buy AT&T stock with it, then AT&T lays off 7,000 people and the stock goes up and they make even more money.'
"Whitman predicted the tax cut would create 450,000 jobs over four years, but through three quarters of Whitman's mandate only 115,000 mostly low-wage service sector jobs have been created."
The story goes on and on, and that's what we are to expect here in Ontario in the not-too-distant future. As a matter of fact, it is happening right now.
The Acting Speaker: I understand there is further debate. It will have to continue another day.
It being 9:30 of the clock, this House stands adjourned until 1:30 of the clock tomorrow.
The House adjourned at 2131.