L038b - Mon 5 Oct 1998 / Lun 5 Oct 1998 1
The House met at 1830.
ORDERS OF THE DAY
PROPERTY TAX DEADLINE EXTENSION ACT, 1998 / LOI DE 1998 SUR LE PROLONGEMENT DE DÉLAIS APPLICABLES À L'IMPÔT FONCIER
Mr Young, on behalf of Mr Eves, moved second reading of the following bill:
Bill 61, An Act to extend the deadlines for appealing property assessments and for giving certain notices relating to taxes and charges on properties with gross leases / Projet de loi 61, Loi prolongeant les délais prévus pour interjeter appel des évaluations foncières et pour donner certains avis concernant les impôts prélevés et les redevances imposées sur des biens à bail à loyer brut.
Mr Terence H. Young (Halton Centre): Speaker, 1998 has been a year of important and long-overdue changes to the way property is assessed and taxed in Ontario. If passed by the Legislature, this act would recognize that this year taxpayers may need more time to resolve any concerns about new assessments. The act would also respond to the concerns of landlords in gross lease situations to ensure both landlords and tenants pay their fair share of taxes.
If passed, this act will, first of all, extend the deadline for property owners to appeal their assessments to the Assessment Review Board. The new deadline would be October 30, 1998. The deadline for taxpayers to have their assessments reviewed informally through the request for reconsideration process introduced this year is also extended to October 30. If the legislation is passed, any taxpayer who has appealed the 1998 assessment and paid the filing fee will receive a refund where a settlement is reached through the reconsideration process. This will apply only for 1998 assessments.
Second, this legislation will provide relief to those landlords with gross leases who are unaware of or unable to comply with the deadline set in the Small Business and Charities Protection Act passed by this House in June. Under the latter act, landlords with eligible gross leases who want to recover a portion of their 1998 property taxes or business improvement area charges from their tenants were required to notify tenants of this intention in writing by July 15, 1998; that is, within 30 days after the return of the assessment rolls. Landlords were also required to notify tenants in writing by September 30, 1998, of the actual amount of property taxes and of BIA charges that tenants will be required to pay for the year.
With this bill, the government is responding to the concerns of commercial and industrial property owners in these gross lease situations. If passed, the legislation will give them more time to notify their tenants. This bill will provide that instead of providing two notices - a notice of intent to require payment and a notice requiring payment - landlords with gross leases would have the option for the 1998 tax year of providing tenants with only one notice, one that requires payment. The deadline by which landlords with gross leases must provide tenants with a notice requiring payment of property taxes or BIA charges for the 1998 taxation year would be extended to October 16, 1998.
When this government took office, it inherited a property tax system which was unfair, inconsistent and out of date. All major reviews of property taxation under governments of all three parties found that the system was broken. The Smith committee in 1967, the Blair commission in 1976, the Hopcroft report and the Goyette report in 1985, the Fair Tax Commission in 1993, the GTA task force in 1995 and the Who Does What panel in 1996 all said the system was broken. As well, virtually every municipal leader in the province has been calling for years for the system to be fixed. But previous governments failed to take on the responsibility of bringing the system up to date.
Our government has now successfully completed the complex and difficult task of reforming Ontario's outdated, unfair property assessment and taxation system. We have provided Ontario with a new system that will ensure taxation is fair and consistent and that puts measures in place to ease the transition. Under this new system, every property in the province will now be assessed as of the same date. For 1998, assessments are based on their current value as of June 30, 1996, and from now on assessments will be kept up to date.
The reforms introduced over the last 18 months will provide Ontario with a system of assessment and taxation that is fair and consistent. Similar properties with similar values in a municipality will now pay similar taxes. Municipalities now have the tools they need to make fair tax policy decisions and implement change in a manageable way.
A new system means tax changes. Under the old system, some taxpayers paid more than their fair share to subsidize those who did not. Under the new system, those who paid more than their fair share will pay less. Those whose taxes were unfairly low will begin to pay more.
In areas of the province where assessments have been kept up to date, such as my own town of Oakville in the region of Halton, tax change will be minimal. In other areas, where assessments were allowed to get outdated, changes will be more significant.
We realized that small business and charities may experience tax changes due to reform. We've responded to these concerns by providing municipalities with legislative tools to enable them to make tax changes fairly. These tools include tax rebates to owners of commercial and industrial properties; rebates for registered charities occupying commercial and industrial properties; a cap on tax increases at 2.5% per year in 1998, 1999 and 2000; graduated tax rates for commercial and industrial properties; and optional property classes.
As well, all municipalities are required to provide low-income senior and low-income disabled home owners with a program to cancel or defer tax increases resulting from reassessment. The key word there is "required."
The province has also put an end to spiralling increases in education taxes. School board spending has been a key factor in driving up property taxes. For example, business education property tax went up 87% in the province from 1985 to 1995.
Education taxes on commercial and industrial properties have now been stabilized. For residential property owners, the province has taken half the cost of education off the property tax, and residential taxpayers across the province will now pay for education as a uniform rate set by the province.
All of this, you will agree, adds up to a great deal of change for residents and business owners of the province to absorb in one year. While the assessments themselves have been out in the public domain since February for most ratepayers, for many people the assessment was not very meaningful until the tax bills came out. Many municipalities did not send out bills until mid-August, leaving property owners little time to appeal assessments or take other actions. This bill will give them the time they may need to review or appeal these assessments.
With this bill, the government recognizes it has been a year of significant and positive change for taxpayers. These provisions will help ratepayers adjust to these changes.
I'd like to share my time with the member for Niagara South, the member for Guelph, the member for Prince Edward-Lennox-South Hastings, and the member for Chatham-Kent.
The Acting Speaker (Mr Gilles E. Morin): Further debate?
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Mr Tim Hudak (Niagara South): I'm pleased to rise and join with my colleagues to speak about Bill 61, the Property Tax Deadline Extension Act.
I always enjoy hearing the honourable member for Halton Centre and what he has to say. He's brought some provocative questions to the floor, and I enjoy his comments. As he said -
Mr James J. Bradley (St Catharines): Are you going to be backing Gary Carr for the nomination?
Mr Hudak: I don't know if I'll get involved, but I am involved in the debate on this bill this evening. What this will do will be to extend the deadline for appealing property tax assessments until the end of this month, October 30, 1998. Also, to echo the comments that the member for Halton Centre had to say, this is part of a fundamental reform of the way that government operates in Ontario, with the goal to ensure that better-quality services are delivered at all levels of government.
It has been, I guess, just over three years that I've had the privilege and the honour of representing the people of Niagara South in this esteemed institution. Before that, though, I had some encounters with politics, and of course my mother represented the people in Stevensville as the councillor for ward 4 for nine years. I remember her experiences as well dealing with government at the municipal level, the upper tier, at the region, interactions with the province and the federal government on a host of issues.
One thing I remember her saying she found frustrating, and I've experienced that as well, as I'm sure many other members of this House have, is the degree of intersection, the points of intersection between governments, and how it's often easy for politicians to point the other way, to say: "Well, it's not the province's fault. It's not the federal government's fault. It's the other level of government that actually is getting in your way." That's because in a number of areas you have several levels of government involved, and I think there's nothing more frustrating for the taxpayer. It's a truism, but I'll say it again: There is only one taxpayer. It would be one taxpayer who has to fund all four levels of government.
They want to make sure, because when they take time off from their jobs, whether they're driving a truck or a nurse at the hospital or the guy filling up gas at the gas station, they don't have a great deal of time to try to figure out which level of government to go to and who is accountable. Ultimately, they want to have good-quality service, and they'll be able to see very clearly, very transparently, which level of government is responsible for which types of services.
That's what the intention of the property tax reforms has been, and the exchange of services with municipalities: to make one level of government directly accountable to taxpayers so that they will know who to go to with their policy suggestions, their questions on taxation. They'll know where the policies are formed, to make things better, more accountable, more clear and more responsible in the delivery of goods and services from government to the taxpayer.
I think there are savings to be made too. When you eliminate that intersection of services, the duplication of services, you get a better-quality service at the end of the day. Those are savings that can be returned to the taxpayer in the form of a tax cut. Something we as a party certainly believe in is cutting taxes for all hard-working Ontarians. There could be even more services at one of the levels of government, or a greater variety of services or opportunities to deliver those services in different ways. I think that makes a great deal of sense to the taxpayer, that you're trying to eliminate this duplication and this dual or tripartite delivery of services. It's not easy, because there are years and years that this has been the case in the province. In fact, I'd say that under previous governments it was getting worse. So the people of Ontario asked the Harris government, through the Common Sense Revolution, to eliminate this kind of duplication of services, to make sure the taxpayers know where to get the particular services from whatever level is needed.
There are a number of things that people could be appealing. For example, as the member for Halton Centre had said, across the province now all properties and structures will be evaluated on the same basis, on the basis of their value. That's going to be updated rather frequently, because we had some very strange circumstances across the province, depending on what year the properties were valued at. In Niagara, for example, they went through an updated valuation in 1996 based on 1992 values. I had many taxpayers coming to my office who, even with the 1992 value, were concerned that it wasn't an accurate representation of the value of their property, that 1992 was an aberration that did not reflect probably the most modern, the most recent, assessment of their properties.
I can only imagine in other parts of the province - I think Toronto is one; I know Hamilton would be another. In Scarborough Centre, was it the 1940s or something like that in your area? The 1940s, so you had some very strange circumstances where houses of similar value would have very different assessments and therefore very different tax rates. I think in the issue of fairness across Ontario it made a great deal of sense to make sure that things are valued on the same year for assessment. But the goal of our legislation is also to ensure that that value is updated on a regular basis. Part of our property tax reform is to ensure that is the case, that the most recent value, the most current value of the property, will be achieved.
If somebody had an issue and felt that the assessor, for example, had made an error in the assessment of that property or it wasn't a true representation of that value, this gives them an opportunity - in fact we're extending the opportunity - for them to lodge an appeal to ensure that the actual value, the assessment value, of their property truly reflects the value of that particular tax roll number.
Furthermore, we're also looking at taking care of the gross lease issue that is part of our property tax reforms, to ensure that landlords who previously were unable to pass on a change in taxes to their tenants will now be able to do so.
This doesn't come out of thin air, as I said. These are problems that have been around for generations. Generations of sittings of this House, many different sessions, had not dealt effectively with this issue. In fact, many governments had come to the edge, to the precipice of making these changes, but backed away.
There's a series of reviews that all said the property tax system was broken, but not one government had the courage until today to take on these reforms: the Smith committee - certainly not named after the member from London-Middlesex. It was another Smith at that time. Certainly if the member from London-Middlesex had headed a property tax review committee, I would expect that that member would have come up with similar suggestions as the 1967 Smith committee report, and in fact probably very similar to what our government has done today. There was the Blair commission in 1976, the Hopcroft report and the Goyette report, 1985. Of course, the NDP had the Fair Tax Commission recommendations in 1993; there was the GTA task force in 1995. Since 1967, 31 years ago, there have been calls for these changes, changes that we have now made to make sure that assessed values across the province are consistent.
In terms of using tax rates as opposed to mill rates, it's a much more transparent process for taxpayers to understand where their taxes come from, how much is going to the municipality, how much is going to education.
I think we should remind those viewing tonight too that in terms of education taxes, the government has cut them in half for residences across the province, and they've been frozen. So those years and years - I think 14 straight years in Niagara - where the school boards increased property taxes to pay for more funding, not necessarily in the classroom but increases to the boards for 14 years, are over now. There will be no more property tax education increases in Niagara or anywhere else in the province, because boards no longer have the power to tax. I think it's an important change that voters, especially senior citizens but taxpayers across the province, are very much in favour of.
So the province in the last couple of years has made the important changes to address years and years of complex, difficult tasks, to update Ontario's outdated and unfair property tax assessment system.
On the issue of fairness, as I said, they have now until October 30 under this bill. If this bill passes, and I expect it will, it will extend the time frame for people to appeal their assessments until October 30, the end of the month.
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The other important change we've made, which we often lose sight of in terms of appeals and assessment appeals, is that now there's an opportunity for the owner of the property to meet with the assessors to try to find a mutually satisfactory outcome for judging the assessment, as opposed to going through the entire appeal process and all that red tape. If they can't come to some sort of accord, then of course they go through the formal appeal mechanism, but that gives an opportunity for the assessors to work with taxpayers out there to ensure that we come to a reasonable accommodation without having to go through the appeal process.
All in all, we've made some difficult but necessary changes to the way governments operate between the province and the municipalities to ensure that services are delivered in the most responsible and accountable manner. I think "transparent" is an important word here, so that taxpayers will know who delivers that service and who is responsible for it, to ensure that it's delivered in the best way: the highest-quality services at the lowest cost possible to the taxpayer.
Also, this government has had the courage - I will stress that and say it one more time - the courage to address long-standing issues that previous governments, of all stripes, frankly, but in recent times the call has been even stronger - the courage to address these changes that were long overdue.
For those properties where the assessment is not in line with what the taxpayer feels is an appropriate assessment for their property, now they will have an extended time period, until October 30. As we had promised in the summertime, we're extending that time frame to the end of this month to enable taxpayers a fair opportunity to get their appeals in, to make sure their property does finally reflect a current value, as close as possible to what it would be in the year 1998.
I have some colleagues who want to express their thoughts on this bill. While I've held my colleagues here in rapt attention the last few minutes of my speech, I know there are many other colleagues who have additional thoughts on the importance of Bill 61 and extending the time frame to October 30, another important piece of legislation from the Ministry of Finance. Many people have probably heard about the Ministry of Finance in the past, because the Ministry of Finance has had much success lately in terms of reducing the budget.
Mr Dan Newman (Scarborough Centre): And reducing the tax.
Mr Hudak: My colleague the member for Scarborough Centre says you could probably call them the ministry of tax cuts, because the Ministry of Finance under this government has succeeded in reducing taxes across the province by at least 30% and even more for some lower-middle-class taxpayers, who are finally getting some income tax cuts. People have more money in their pockets to spend, to invest, to make sure that Ontario has one of the lowest - in fact, now the lowest - marginal tax rates across the provinces.
The Ministry of Finance has also had a great deal of success so far in reducing the deficit, which was $11.4 billion when this government came into office. Now we're ahead of schedule. I think it's down around $3.9 billion in the most recent accounts, so very far ahead of schedule. The Minister of Finance, the Honourable Ernie Eves, as well as the rest of cabinet and my colleagues here have done an excellent job in fighting that deficit, making good on our commitment to balance the budget by the year 2000-01, as promised.
We won't waver from that task. We are committed to keeping our promises, as we have. We've cut the taxes. We're ahead of schedule in balancing the budget. We've protected, in fact we've increased, health care funding across the province.
As I said, we've shown the courage and the resolve to address long-standing issues that other governments did not have the courage to approach so that we have a fair assessment system across the province. To participate in that system now, taxpayers have until October 30. I fully expect Bill 61 to pass through debate in this House to give them that time frame in which to appeal any assessment questions they may have.
Mrs Brenda Elliott (Guelph): I am pleased this evening to have an opportunity to join the debate with my colleague from Halton Centre and my colleague from Niagara South. The topic we are discussing tonight is taxes. More to the point, we are speaking to a piece of legislation entitled the Property Tax Deadline Extension Act, Bill 61.
I would say to my colleagues in the House that I think the word that best summarizes why this bill is being introduced is that this government has been listening. We've been very careful to pay attention to the requests of people across this province. We were instrumental in introducing tax reform - long-overdue tax reform - in this province. It was a very major undertaking, and obviously fine-tuning was required.
This bill addresses a key issue that many of our viewers may be concerned about; that is, if they are concerned about their tax assessment, are they still eligible for appeal? This bill allows the extension of the appeal time to the end of October. It allows them to make an appeal to the Assessment Review Board or to call their local assessment office to come in and review the property. If a filing fee has been paid for reassessment in 1998, this bill will allow a refund to be given to taxpayers if a settlement is reached through reconsideration. Of course, as my colleagues mentioned, this bill will also allow landlords who have gross leases to inform their tenants of changes in their rent, and that deadline is extended to October 16.
Through the Ontario fair assessment legislation that we have brought in during this past year, we have for the first time in this province introduced fairness, as fairly as we can manage it. Commercial and residential property owners have paid differing taxes in their various communities, not just based on usage but based on a system that was designed essentially to create unfairness. Depending on where you lived, where your home was, not just on its value or its maintenance or its use, you would be paying different levels of taxation within your own community, and of course this was extended to a far greater degree all across the province. The new legislation we've introduced and the amendments being proposed through this legislation tonight, Bill 61, provide fairness for the first time.
We all come to this House with different pieces of history in our backgrounds. My father, when he left the farm, became a tax assessor. I don't know how many people would know, but at least once that I personally know of assessors from all across this province were called to the city of Toronto, spent several weeks here in hotels in the evenings, away from their families, so that the entire city of Toronto could be reassessed. It was a good idea to have that all redone. It was fair and the attempt was to bring it up to a timely assessment. But we know that what happened was that the more current assessment was never adopted by the municipal council, and that occurred time and time again. So we ended up with systems of taxation based on assessments that were badly out of date and hence extremely unfair.
We also had a system that gave very little flexibility to the local municipalities other than to simply not adopt a new reassessment. The new legislation we've introduced that is now making its way through our province does give to our local municipalities much greater flexibility in how to tax based on assessment.
What is that assessment based on? What are our properties being assessed upon? It's based on current value. This means the price that a willing seller could expect to receive from a willing buyer in an arm's-length transaction. It's a very fair system. It addresses currency. Our properties have now all been reassessed to one point. In two years that will be redone. The next common assessment point will be on June 30, 1999, and following that, in sections of three years. In addition, we'll be incorporating not just a regular periodic reassessment but in fact a rolling assessment so that property values continue to be maintained in as fair a way as possible.
What's the old saying? The only two certain things in life are taxes and death. I think Ontarians feel very comfortable about paying their fair share of taxes. They know that taxes that go to the treasuries, whether it's the municipality's treasury or the province or the federal government, are intended for the best and wisest use of common needs among all our citizens. Good-thinking constituents and citizens are very happy to pay their fair share, because they know that's part and parcel of what helps make their communities function well, whether it comes out in garbage collection or their fire or police departments or their public libraries. The key is that they expect it to be fair. That's what was missing from the old system, which we have finally rejected for this newer system. It speaks to currency; it speaks to the fairness of properties exchanged by willing buyers and willing sellers.
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It has always been very easy for municipalities to reject change. It's difficult to undertake major change, especially this kind of change, when you're looking at changes to almost every property all across the province. I would like to say to our assessors in the finance department, who were under a lot of pressure to reassess properties across this province, that they have done a fine job. The member for Halton Centre mentioned that his municipality was relatively current. So was that of my jurisdiction of Guelph and Wellington county, so the restructuring and the changes were relatively minimal. There have been a few glitches that needed to be addressed, but generally, when they have phoned to ask questions about their assessment or about their taxation, people have agreed that it was fair and the right thing to do.
It was very important that our government considered that there would be varying needs based on the fact that assessments in some jurisdictions were over 40 years old, so we allowed municipalities at least eight options of different classes, caps - a number of alternatives they could implement in their local jurisdiction to help ease any transition difficulties that would occur. I think that is key. We are practising what we preach in that we have been giving our local municipalities the ability to make decisions based on local needs and local circumstances. Most of us have been very pleased to see some of our jurisdictions undertake those needed changes. There are some jurisdictions where clearly we would like them to revisit some of the decisions that have been made because the effects maybe weren't exactly as expected.
I am very pleased to be a member of the government that has undertaken a change that has been requested. My colleague from Niagara South mentioned various reports that have been submitted over the years during the reign of various governments, all indicating a need for revamping the entire taxation system. It has been long overdue. As I said, people are more than happy to pay their fair share, but they want it to be fair. In our jurisdiction and, from what I hear, across the province, there is general agreement that the removal of 50% of the education tax from the property base was a good thing. In fact, if I have received criticism, it was that we didn't remove it all. But in restructuring it's wise to do it in stages, and certainly that was the decision we made. I might add, that decision was influenced by the Association of Municipalities of Ontario, who gave us suggestions on how they felt we were best to move forward.
I am pleased to have the opportunity this evening to rise in support of Bill 61. It is in response to constituents who may need extra time for assessment, for assessors to be able to process those and for those possible appeals to go before the Assessment Review Board, and for landlords. It's part and parcel of changes that were long overdue. These changes in our taxation system have brought fairness, have brought consistency, have brought flexibility to our municipalities, have made it much more understandable. These changes to our taxation system are part and parcel of all the things this government has been doing to make this province strong, economically viable and very vital to go into our next century.
Mr Gary Fox (Prince Edward-Lennox-South Hastings): I realize that property tax reform has been talked about for a long time. When this government took office, it inherited a property tax system that was unfair, inconsistent and out of date. All major reviews of property taxation found that the system was broken. If we go back to the Smith committee in 1967, the Blair commission in 1976, the Hopcroft report in 1985, the Fair Tax Commission in 1993, the GTA task force in 1995 and the Who Does What panel in 1996, they all said the old system was broken, but previous governments failed to take on the responsibility of bringing the system up to date.
To read a quote: "The ability to listen and the flexibility to change course when necessary are among the qualities that define a good politician. Ontarians can take some consolation that the provincial treasurer isn't oblivious to their legitimate concerns." On his announcement that he wants to extend the property assessment appeal deadline, "Finance Minister Ernie Eves's offer to extend the deadline for property assessment appeals shows a welcome flexibility." This is a quote from the Hamilton Spectator on September 1, 1998.
I'd like to refer to another quote. Mayor Lastman has said that some people weren't paying their fair share of taxes under the former system. "That means some homeowners are subsidizing others, he said, and `the subsidies have got to stop.'
"`Why the heck should people two blocks away, or in other parts of Toronto, subsidize people who are doing well, and want to keep paying low taxes, lower than what they should?'" That's from the Toronto Star, April 2, 1998.
When I was in municipal politics it was a concern back then. The municipality I represented went to full market value assessment back in 1990. This is what is making it so confusing today, because with the restructuring and amalgamation of municipalities and with assessment going to current market value, the change in the assessment is being blamed on restructuring with amalgamation, which is then downloaded on to the provincial government. That's where the unfairness of it is happening at this time. That's why it's important to give this extension, so this assessment can be reviewed and put in place in the near future.
There are some other things I wanted to mention. The Fair Municipal Finance Act introduced in January 1997 allows municipalities to phase in assessment-related tax changes over up to eight years. Previously, municipalities only had a maximum of four years to phase in tax changes following reassessment. The act also eliminated the business opportunity tax. Graduated tax rates for commercial properties were introduced in the Fair Municipal Finance Act which received first reading in June 1997.
Bill 16, the Small Business and Charities Protection Act, introduced in May 1998, enables municipalities to cap property tax increases at 2.5% per year in 1998, 1999 and 2000 for commercial, industrial and multi-residential properties. The act also allows municipalities to provide tax rebates to business properties. Optional property classes allow municipalities to achieve greater tax equity among property classes. Bill 16 also allows municipalities to give graduated rates for industrial purposes. All this that we've put in place in the past has certainly been an achievement to help with the new reassessment and the fair value to everyone.
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Just to give you an example in my own riding, with the amalgamation of the 10 municipalities going to a one-tier government for the whole county of Prince Edward, I had a lady come to me very upset because her property taxes had doubled. I was quite concerned about this when she mentioned it because I happen to know the lady's residence. She has a nice two-storey home in the town, so I asked her what her taxes were and she said, "My taxes are $900." I looked at the lady and I said, "You tell me your taxes have doubled?" and she said yes. She was only paying $450 before. Now this was a lovely two-storey home on a nice lot in a town and I suggested to her that maybe she should keep that to herself because I live in a rural area with homes worth about $125,000 to $150,000 and those property taxes range in the neighbourhood of $2,500 a year. When she understood that, she had a little different attitude on her property taxes because of the fact that she was still getting a break.
That's the fairness of the whole thing today, the fact that we've got to get everyone out there on the same playing field here with our assessments and our property taxes so that we are all paying our own fair share. The idea of removing the education tax has certainly made a plus in this regard to help out in all aspects of business, of residential property with our taxes.
Without any further ado, I thank you for the time and I certainly support this bill.
Mr Jack Carroll (Chatham-Kent): I'm pleased to be able to join with my colleagues tonight to make a few comments on Bill 61. Those of us who were at AMO will remember that it was at that venue that the Minister of Finance, the Honourable Ernie Eves, made the offer to extend the deadline for assessments if that legislation could be introduced into the House and be accepted by all parties, and I'm sure we will see that happen as the evening goes on, that all the parties will support this because it does bring some additional fairness to the taxpayers of the province.
What we've moved to with our new assessment system is fairer because all of us know that over the years we have had quite a discrepancy between what various pieces of property were assessed at because of the timing during which they were assessed. This is a problem that's been outstanding, as we've had comments on, going back into the 1940s and the 1950s. It's been a difficult problem for any government to deal with. The member from Niagara made reference to the fact that we showed a lot of courage in saying this was an issue we had to deal with, and we did deal with it by introducing the fair assessment act. That fair assessment, when all the properties in the province are assessed, will lead to some situations where some appeals might be warranted. Those appeals now will have an opportunity to be heard up to and including the end of October, should this legislation pass.
As we move to a fairer system, it's all part of our overall impetus to reduce the total tax burden for the people of Ontario, as well as make it fairer. We've proven that taxes are job killers. We've proven that they take away from economic initiative in our province. We have moved as a government to reduce taxes and to make them fairer. This is but one small piece of that.
We gave municipalities lots of tools to use to help in the course of changing this system because we knew it would be a difficult situation. If you have a piece of property that has been grossly undervalued for many, many years, to all of a sudden have to pay the taxes that that piece of property should have been paying all along, to have that impact happen in one year, would be difficult for many people, so we gave municipalities many tools to use. We told them they could have phase-ins of up to eight years. We told them they could give relief to seniors so that seniors wouldn't be negatively impacted. We told them they could use graduated tax rates for commercial properties. We told them they could use such things as rebates, optional property classes. We gave them many, many tools to use so that they could mitigate the effects of changes in assessment, changes that made the assessment fairer, but we gave them those tools to mitigate the effect on individual people. Not all the assessments were too high. Some of them were too low, so the ones that were too low had to come up. Those that were too high had to come down. You create a situation of winners and losers.
In my municipality of Chatham-Kent we've done some things to help the taxpayer. They have not been easy things to do, but instead of using this particular opportunity to blame the provincial government for bringing about a fairer tax system, my municipality of Chatham-Kent agreed to phase in all the changes over three years. I was surprised to learn that very, very few municipalities in Ontario took advantage of any of the tools that were afforded to them to mitigate the effects of property tax changes on their constituents. I don't understand why they would not have used them, other than the fact it made the process a little bit more complicated, but it's questionable whether or not they had the best interests of their constituents at heart when they ignored the tools that were given to them to make this process go smoother.
I would also like to talk in terms of the other part of the equation when it comes to property tax. There is assessment. There's also the tax rate. I, for one person, believe that property taxes are too high. I believe we have too much local government and that local government tends to be very expensive.
To give you an example of what can be accomplished, I'd like to briefly remind the House about some changes that we've made in Chatham-Kent, where as a result of making some very difficult decisions, but decisions that were taken in the best interests of our taxpayers, we moved from a constituency that had 23 municipalities with 156 elected representatives to a constituency that has one municipality with 18 elected representatives. That was a very difficult process we went through, but we are only 110,000 people and it didn't make a lot of sense that the 110,000 people in the Chatham and Kent county area required 156 elected representatives to provide them with local government when the 11 million people in Ontario only required 103 to represent them at the federal level of government. Our people set about changing that situation.
Now we've moved to a situation where the new municipality of Chatham-Kent, which by the way, for your information, is the second-largest geographical municipality in the whole province of Ontario, has a much more efficient system of single-tier government. As a result of that, while other municipalities have announced 15%, 16%, 10% and 5% property tax increases this year, our municipality, because of a more efficient system of government, was able to announce no tax increases overall. That doesn't mean that as a result of assessment changes there weren't some ups and downs and some winners and losers, but overall the municipality of Chatham-Kent announced no tax increases. That's the result of the fact that our amalgamation has produced in excess of $5 million worth of identifiable savings this year and $11 million or $12 million worth of identifiable savings next year. Based on an overall budget of 170-some-million bucks, that $11 million is a pretty sizable percentage that we have found in expense reduction as a result of coming to grips with too much local government.
In addition to our local government, we've also put together four police forces and a rural OPP force into a single police force, headed up by our new chief of police Chief John Kopinak from the Port Colborne area, a wonderful addition to our community. That amalgamation of our police forces has saved $750,000 annually and in addition to that has provided us with an enhanced level of service that is already being commented on by the smaller municipalities it serves. So not only have we saved the taxpayers some money in Chatham-Kent, we are also providing an increased level of service.
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In addition to that, as part of our restructuring we took 11 public utilities commissions and they became amalgamated into one, which is now just a committee of council. We've abolished that structure of 11 PUCs that only served 80,000 or 90,000 people and have gone to one single system, and it's a committee of council. It was just announced in our newspaper last week that that particular move will save $3 million to $4 million per year on behalf of the users of hydro and will result in a substantial rate decrease next year for the users of hydro in the community of Chatham-Kent.
In addition to that, we had a tragic wind storm that struck parts of our municipality a couple of months ago. The tremendous comments we heard were that as a result of the amalgamation of all our PUCs, we were able to provide much better service restarting electricity and cleaning up after the storm.
Those opportunities for municipal politicians to make some tough decisions that benefit their constituents exist all across this province. The same opportunities existed in Toronto. Toronto took advantage of them, and now we read comments that "`The greater Toronto area is on its way to being one of the richest, most populous and fastest-growing areas on the continent,' says the Toronto Board of Trade."
There is much that can be done to improve the tax burden that we place on our constituents, and as elected representatives I think we have an obligation to do that.
As we look across the province at the net result of the changes the finance minister has brought in regarding taxes, not only the fair assessment and the changes that Bill 61 brings about that allow for more time but the other changes we've brought in - reducing income tax, reducing the employer health tax for employers, reducing corporate income tax - when you look around and see the effects of that, the proof is very obvious that reducing taxes stimulates growth, the stimulation of that growth produces more jobs, those new jobs generate more income, that income generates more income tax, and that just keeps reinforcing the ability of the province to reduce taxes.
Look at youth employment. We know that in the month of August it rose by 3,900. That's after a gain of almost 16,000 in the month of July. That's just in youth employment. We know that the unemployment rate in Ontario stands at 7.2%. That's lower than the national average of 8.3%. We know that the help wanted index in the month of August stood at 2%, the highest level it's been at since 1990. We know that consumers continue to spend in Ontario; retail sales were up 9.3% over the first six months of 1998. In the business sector, international merchandise exports from Ontario rose 7.9%.
There are many, many indications that the province's direction of reducing the tax burden, making it fairer for the constituents we serve, is the right track and that it is the way to make Ontario once again the tremendous driving force for the country of Canada that it has been traditionally.
In summary, Bill 61 represents a flexibility demonstrated by the finance minister to ease the burden a little bit on the difficult transition we're making to a fairer property tax system. I know we can count on our opposition members to support Bill 61 as it moves through the House. Hopefully, it can become law and we can move on to some more important issues that we need to deal with in this House.
Thank you very much for the opportunity to make some comments this evening.
The Acting Speaker: Questions or comments?
Mr Bradley: I want to compliment the government on accepting the Liberal suggestion which was made in committee three times, I think, in the form of a motion that you extend the time for appealing property taxes. It was turned down by the government members each time. Each time we proposed it in committee, the government turned it down. Then Mr Ernie Eves showed up at the Association of Municipalities of Ontario convention, and he and Mike Harris hadn't spoken to one another. Ernie said, "We're going to extend it, we think." Mike said, "Oh, we don't have to extend that deadline." Then it goes back to Ernie, then back to Mike. Finally, bowing to the pressure of the opposition right across this province, you complied and we're going to extend it. That's fine.
I can tell you, the people who operate the Ukrainian Black Sea Hall in St Catharines have been hit with a huge assessment increase that is going to be very difficult for them. Non-profit organizations across our community are facing the same problem, small businesses are being hit with these increases as a result of previous bills by this government, and of course homeowners across our municipalities are facing the same thing.
Mixed into this is the fact that you've short-changed the Niagara region by $18 million. Your definition over there of the downloading having no effect is to stick the region with $18 million more in taxes. Even the former Conservative member of Parliament for St Catharines-Brock, Peter Partington, said it was the province that was to blame for this - the downloading. You know something? I agree with Peter tonight.
Mr Tony Silipo (Dovercourt): It's been almost amusing to listen to the members of the government opposite. If this wasn't such a serious issue, we'd be laughing our way all through this evening. Five or six members from the government side spoke and you would think they had come forward with something they dreamt up themselves that was going to improve the tax system once and for all. It was like, "This is it." Of course they forgot to mention that this is the sixth time they've brought forward legislation on the property tax system, but more than that, that this is the sixth bill they've brought in to try to fix the problems created by the previous five.
One member I know went on about Bill 16 and the virtues of all that, forgetting to mention that the capping of the 2.5% was brought in after incredible pressure on the business community. Even this government had to realize that had they proceeded with their tax scheme the way they had set it up, many small businesses were going to go under. You know what? We're still in that situation, because many businesses are still faced with incredible increases in municipalities that have not chosen to apply that 2.5% cap.
Had the government listened to us when the last bill was in front of the House and the bill before that, when we suggested to them that various things, including their crazy deadlines and timelines for appeal, wouldn't work, we wouldn't be here tonight. We wouldn't have to deal with this bill. We're glad the government finally has come forward and admitted that they screwed up once again and that they're prepared to extend the timelines. If I have a chance to talk later, I'll expand on why I think they are going to cause a problem to continue, particularly on the business side, even with this bill. We'll have a chance to talk a bit about that later on. But let there be no mistake about it, they have messed this up and we're finally getting on our way to fixing it a little bit.
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Mrs Lyn McLeod (Fort William): There has been so much chaos in this government's property tax non-reform that I'm losing track of just how many bills they've actually brought into the House to fix the property tax problems, the mess they've created.
Mr Bradley: Six.
Mrs McLeod: My House leader says it's six. I lost count after number four, which extended the deadline for appeals by a month. I guess the government hoped that maybe one month was going to be sufficient time to fix the problems they have created, but they have now had to recognize, as our finance critic, Gerry Phillips, has been saying from the very beginning, that this mess was far too great to be fixed in a matter of one month. So now we have the fifth bill, or maybe it is the sixth bill, as my House leader says, which attempts again to provide some period of appeal to try and fix the absolute mess that the Harris government has made out of property taxation.
As I came into the House this evening, I heard the member for Huron, I believe it was, suggesting - perhaps it was another member; I'll take it back. But one of the members on the opposite side of the House was saying that people would see a fairness to this.
To talk to the residential taxpayers in my community, if their tax bill actually went down, they're prepared to see a certain fairness in it. But the senior who is living in a tiny house in the east end of my community, a tiny house with no basement at all, and who just got a tax bill that says her assessment is $90,000 is having trouble seeing where the fairness in this actually is.
But really, the major problem is for the businesses in my community at this point. This government tried to tell them that they were going to have a tax decrease. After all, they were taking education off the property tax. But the government forgot to remind the businesses on a regular basis that they were only taking education off the residential property tax and only 50% of it off the residential property tax base. So imagine the feeling of the businesses when they suddenly see their tax bills increase by reassessment and by having all the provincial downloading and having to still pay education tax.
Mr Gilles Pouliot (Lake Nipigon): Je me souviens très bien. I remember so vividly, as if it were this morning, when our deputy leader, our finance critic, the member for Dovercourt, warned the government of the day, "You're going about it the wrong way, in a direction we don't subscribe to, and you're certainly going too quickly."
So here we are, October 5, looking at a deadline of October 30. It could have been avoided. They could have saved themselves the embarrassment, but more importantly, they could have saved the taxpayers of Ontario, the property owners, the small business entrepreneurs, a lot of anxiety and some fear. Simply put, in street parlance, they screwed up big time.
One would have expected more of a government that prides itself on knowing the marketplace, on making people feel good. A few minutes ago the member for Chatham-Kent gave credit for any and all job creation in Ontario to the Harris regime. When the jobs, unfortunately, start disappearing, then he'll blame Asia. He'll blame Singapore. He'll blame the Korean market. He'll blame the John Meriwethers of this world, at Long-Term Capital - their friends.
This could have been avoided. They insisted on going to current value assessment. Let them carry the guilt, not the taxpayer. They were told and told again that they were going about it the wrong way and that when the rubber hit the road it wouldn't work. But of course not. They wore blinkers and kept on in their ill-fated diligence. They're going to sock it to people. It won't work.
The Acting Speaker: The member for Chatham-Kent has two minutes to respond.
Mr Carroll: I appreciate the comments from the member for St Catharines, the member for Fort William, the member for Dovercourt and the member for Lake Nipigon.
It's interesting. The member for Lake Nipigon can always be counted on to regale us with his reflections. He made a comment that on behalf of my government I take credit for all the jobs that have been created in the province of Ontario. Well, we won't take credit for all of them but we'll take credit for most of them. We will, however, blame the members of the third party for the 10,000 jobs that they lost in the province during the five years that they were in power. We will at least be consistent and take credit and give blame.
It's nice to hear that the opposition parties are both taking credit for having advanced this suggestion that we extend the date. It begs the question - if they are taking credit for it, they obviously are in agreement with it - why we can't just get on with it and go on to the next piece of legislation, but we do need to have a little opportunity to put our cases forward, which happened tonight.
The bottom line is that we will continue as a government to move forward in the name of the taxpayers of the province to give them a tax system that is fairer, that is less burdensome, so they can afford to enjoy the success being generated in the province as we move forward and make Ontario once again the driving force behind this great country of Canada.
The Acting Speaker: Further debate?
Mr Bruce Crozier (Essex South): I would ask unanimous consent to defer the leadoff for the official opposition, in which case I would speak as a regular speaker in rotation for 20 minutes.
The Acting Speaker: Agreed? Agreed.
Mr Crozier: Thank you, Speaker, and thank you, colleagues.
I want to take this opportunity tonight, of course, as others have, to speak to Bill 61. It was just said by the member for Chatham-Kent that if it was our suggestion - and in fact it was; Gerry Phillips, our finance critic, over the past number of months has been suggesting that the taxpayers of Ontario needed more opportunity to appeal their taxes than was being given to them because of the mess our property tax system was in - we shouldn't even be debating this tonight.
That goes along with the normal course of events that this government likes to have; that is, that you don't have the opportunity to debate and you don't have the opportunity to bring the thoughts of your constituents to this House. In fact, this afternoon we dealt with a time allocation bill on another subject. It's just further evidence that those of us who are elected representatives to this Legislature - and the government members should feel the same - should be given the opportunity to debate issues, to bring those issues into the Legislature and to comment on the feelings of their constituents.
So we are taking a limited amount of time to debate this particular bill. The taxpayers of the province should know that, yes, we support a bill that will extend the length of time. We are concerned that the announcement was made back in August by the Minister of Finance, but here we are, almost two months later, debating the bill that's going to extend the time. One would question whether there shouldn't be even additional time to bring in the objections that many of our taxpayers have to the tax bills they've received so far.
Members from the government, five or six of them, have been explaining all the great things about property tax assessment revision in the province of Ontario. It has been almost a year, if not more, since the first bill was brought in that was going to solve everything. What the members haven't explained is that the real reason we're here tonight debating this bill is that the government has totally mismanaged any property tax revision that they had intended right from the very beginning.
We've had six property tax bills, each trying to improve on the other, trying to amend and correct something missed in the bill before it. The result is that the property taxpayers of the province do need more time to appeal, and rightly so.
It was also mentioned by one of the government members that very few municipalities have used the tools that were given to them in order to take ideal property tax revision and make it more palatable. I suggest that one of the reasons they didn't perhaps take the opportunity to use those tools is because they were so darned confused with the issue that they didn't know what tools were to be used to solve what problem. They simply didn't understand, because they were going through six different bills and they had lost track of what it was they were able to do.
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In fact, that same member suggested that the municipalities that didn't use these tools might not be acting in the best interests of their municipalities. I thought the government members were standing up tonight to smooth these rough waters, were standing up to explain to the people of Ontario why we're past three quarters of the way through a year and the property owners still don't know what they're going to pay. Yet it's suggested by one of the government members that the municipalities just don't act in the best interests of their taxpayers.
I would take objection to that if I were a municipal representative. In the eight years I was on council, five of those years as mayor, in the town of Leamington I can't recall that we had any specific problem with our tax assessment. We went through reassessment and were able to explain to our property owners the reasons for that. We called it market value assessment at that time; I think now it's being called actual value assessment. I don't know, it has been given several names. It all means the same thing, that the market sets the assessment. To think that the elected municipal representatives aren't acting in the best interests of their taxpayers paints with a pretty wide brush a lot of qualified, interested, concerned municipal representatives in our province. I'm sorry that on an evening when we're trying to make things better someone should suggest they haven't taken this interest.
It was also mentioned that we've had too much local government in the past and it has been very expensive. I've always maintained, prior to becoming a municipal elected representative and since I've become elected to the provincial Legislature, that on the whole municipal governments have acted much more fiscally responsibly than most, if not all, provincial governments, certainly the ones within recent memory. I think municipalities have acted much more fiscally responsibly than both levels of senior government. To say that they were very expensive, I don't know where the member gets that idea. The fact that some municipal councillors have served for years in the province for a stipend, maybe that's where the "very expensive" comes in. But overall, the way they've conducted themselves, the way they've handled their fiscal responsibilities, I am one to give credit to any municipal representative who has served their municipality over any number of years.
As a matter of fact, when we think about the amalgamations that are going to be taking place, that are taking place, that have taken place in Ontario, we're going to lose a number of very good municipal representatives because there simply will be fewer of them. But that's no reason to attack them for not having had the best interests of their taxpayers at heart.
This evening, in addition to the six property tax bills that we've had to deal with since the winter of 1997, we have another bill. It's called Bill 61, An Act to extend the deadlines for appealing property assessments and for giving certain notices relating to taxes and charges on properties with gross leases. I suggest that even after tonight there will be a number of taxpayers in the province who will still be confused as to what the real objective of this government is when it comes to property taxes, and that it's not to simply confuse them, because this bill tonight, as we have heard and we will hear again no doubt, is to extend the deadline for appeals. It also covers those sections that allow landlords to require tenants with certain existing gross leases to pay parts of the taxes or business improvement charges.
We go back to the reason the government did this. Yes, I was at the Association of Municipalities of Ontario convention when the Minister of Finance, the Honourable Ernie Eves, announced that there was going to be an extension to this deadline, and yes, I did hear or see the reports of where the Premier didn't think there was any reason to extend the deadline, another indication of the left hand not talking to the right hand. I suggest to you that's the reason we have had to have all of these tax bill revisions, all of the six bills that have come before the House, because for some reason or other the left hand hasn't talked to the right hand, and what it results in, in my view at least, is total mismanagement.
Mr Tom Froese (St Catharines-Brock): We didn't ask Guy Giorno yet.
Mr Crozier: Didn't ask Guy Giorno. I think that's probably a good suggestion. It comes from a backbencher of the government side, and you should know much better than I, so I believe that.
I think part of what we should do tonight, and we should use this time fairly usefully, is to at least let those who are watching know that this bill will pass, that their time will be extended. What they can do is ask for a reconsideration of their tax bill through the assessment office, and then, upon filing their fee for their appeal, if that reduction in assessment is granted, they'll get their money back. I think that's a very gratuitous move on behalf of the government, because there are a number of user fees, this not being the least of them, that the government has instituted, but they're willing to give it back if they're wrong, and not so much that the government is wrong but to give it back if the assessment is found to be inaccurate.
I think somewhere in the figures it was said that there were some three million households or businesses or properties in Ontario that have been reassessed in the last year. I have had a number of constituents say to me: "How do they go about reassessing these properties when they didn't even come into my house? Nobody visited. Nobody came in to see my house." I'll use my own as an example. How do they know that something hasn't changed in my house that would cause the assessment to either go up or go down? How do they know I haven't taken the back room off the house or torn down a garage? They'd know in my case because I always get a building permit for that, but not everybody even knows they have to get a building permit to do those things or a permit to take a building down. I think that's a legitimate question, because I've talked to the assessment department and I've talked to assessors, and they're willing to explain to us what their responsibility is and how difficult it is to carry out.
I suggest that what the government has done is that in the period of a year or even less they have rushed this through. They have rushed these assessments through, and gosh, no wonder there are appeals, because there are tens of thousands of taxpayers out there who say, "There's no possible way this assessment can be correct if someone doesn't come into my house or my business property and really find out what's been done, what hasn't been done, what's been improved, what's been changed, and therefore what it should really cost." When somebody says to the assessor, "Someone down the street has a house that looks like mine and they're paying less property tax because they're assessed for less; I wonder why mine shouldn't be less," I think that's a valid question.
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One of the things we haven't discussed at any great length is the difficulty the assessment department has had, and the employees of the assessment department, in making these changes, the handicap they have been working under because they just didn't have enough time. That's what we're talking about tonight: people not having enough time. I think all along there has been criticism of what this means. The government has had warning after warning about what this means. I simply go back to the Association of Municipal Clerks and Treasurers. Need we be reminded that when they were talking about an earlier property tax bill they said: "This bill is complicated, cumbersome, confusing and too often badly drafted. The end product is a political and administrative nightmare"? That's what we've been left with here. These aren't my words; they're the words of an association that rarely speaks out. In fact, it may be a precedent that they spoke out like this. They're non-partisan, they're employees who are hired to do the will of the elected municipal councils and their citizens, and they are taking this unprecedented move in saying: "The end product is a political and administrative nightmare. The only way to make up for that loss" - they're referring to the loss in some of the areas - "is to shift some of the tax burden on to residential property taxpayers or cut budgets."
They have said that this government simply can't take this idea and walk out and say it's a done deal. You have to give these things time to work themselves through, and therefore we're standing here tonight debating that very thing: time. We just don't have enough time. I suggest to the government members that you have a task to get up and make this sound like you're doing a good thing, but you have to tell folks the truth, that the reason you're doing it is you messed up the whole issue to begin with. I agree, we probably have more - no, we don't have more important things to debate, because this is very important. We have other things to debate, and when you could have eliminated some of this, when we didn't have to be here in the first place, you're right, we wouldn't have to be wasting valuable time.
I want to assure the property taxpayers in this province that this bill will pass. They will have more opportunity, a longer period of time, to appeal their taxes. I've been paying property taxes since 1969. I can never recall a time when tax bills came out so late, when appeals were allowed so late, all in the name of making things better, and for the life of me, I can't understand how this has made anything any better for anybody.
I brought a tax bill tonight that I was going to discuss, but the fact is that I have just brought one out of many I have received. You can understand some of the frustration that's out there if I use this as an example. This is a business in the town of Amherstburg. Their 1997 property tax was about $3,800, their business tax was about $1,138, for a total of $4,934. Their 1998 tax bill is $6,480. This is small business tax. These are small businesses that were supposed to be helped by this government, but I suggest that if it's any example of the many I've received and my colleagues have received, and I assume members on the other side of the House have received, it's going to kill a lot of small businesses. I don't know whether the idea is to put caps on it, because we'll hear from somebody else then that all the cap on one does is make the other one pay tax for a longer period of time.
There has been a sham, which I may get an opportunity to speak to later, on the elderly and the disabled, who are being told, "You can be helped by our new tax scheme by deferring your taxes." I hope they understand that what that means is they're going to get an opportunity to delay their tax but they're going to be paying interest on it in the meantime.
The Deputy Speaker (Mr Bert Johnson): Comments and questions?
Mr Silipo: I'm happy to comment on the statements made by the member for Essex South. I remember sitting in committee with him on a number of those previous bills. We pointed out to the government, as he will recall as he was part of that as well, that what the government was doing was going to cause these very same problems. Now we are here tonight dealing with the sixth in a succession of bills to amend the property tax system to set up this new tax system that Mike Harris has wanted to implement that in fact is nothing but the admission of this government that they once again messed up the situation and they're having to bring in another piece of legislation to extend the timeline for appeals, in this case to October 30.
Will this solve the problem? It will temporarily give a bit of a sigh of relief to some people who want and need to appeal their assessments because of the mistakes that have been made, mistakes that quite frankly came about because of the rush this government was in to implement the scheme.
The member for Essex South talked about his previous experience with the implementation of market value assessment. He will probably recall that at that time, as bad as that system was and still is in our view, at least it was done with some sense of timing, that is, there was some actual review of the properties and the values established. In this case, what the Harris government has done is try to condense a three-year process into a one-year process, and that rush is at the heart of many of the problems that we now are having to deal with, with piece after piece of amending legislation trying to fix problems created by the previous pieces of legislation. I don't know that we're going to have the end of it here whenever we pass his bill, whether it's tonight or tomorrow or tomorrow night, because the problems that the Mike Harris government has caused in the tax scheme are going to continue to be evident big time.
Mr Carroll: I was interested in the comments of the member for Essex South as he mused that maybe we should add some additional time, that instead of the end of October maybe add some additional time. I thought to myself: "What a typically Liberal comment to make: `Let's delay it, let's study it, let's never make a decision. Let's just keep stretching it out and stretching it out until we create more and more problems.'" It was such a typically Liberal comment, I had to make reference to it.
He also talked about being a member of municipal government and that municipal governments were always the most fiscally responsible of all levels of government. That may be true, but when you compare any municipal government to the 10 years of provincial government between 1985 and 1995, what we call the 10 lost years, when taxes were raised 65 times to a level that was the highest in North America and when $100 billion worth of debt was rung up, and when you compare it to the federal government that has accumulated $600 billion worth of debt and has taxes higher than most jurisdictions in North America, then to say that the municipal government was more frugal than that is really not saying a lot.
The comments are that all levels of government in Ontario have not served the taxpayer well. This particular government is trying to do something about it and so are some municipalities. I tip my hat to all those who are trying to help.
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Mr Sean G. Conway (Renfrew North): In the last two or three weeks in my county of Renfrew, including the city of Pembroke, the early fall sky has been lit with one protest about taxes after another. In communities like the city of Pembroke, the town of Arnprior, the town of Deep River, the newly created town of Petawawa, to name four or five, people, particularly small business people, are enraged at what's happened to their local assessments and their local taxes.
The irony for a lot of these people is that the Mike Harris Conservative government has been the government to give them the biggest tax increases their small businesses have ever seen. There's no one else to blame, because when the people met at Petawawa the other day and looked at their situation, they found that it was provincial decisions taken here at Queen's Park that have caused the real pain that's been driving the tax bills in Petawawa upwards, in many cases by a factor of 50%, 75% and, in some cases, 100%.
The interesting thing is that when a lot of small businesses in Renfrew county look at their tax bills, they are stunned and angry to find out that the single biggest cause for the increase is the new, provincially imposed education tax. The Mike Harris education levy for industrial and commercial purposes in Renfrew county appears to be substantially higher than the tax rate it replaced.
We've got other aspects of provincial policy, particularly the one concerning reapportionment, where it is very clear that this Harris government acceded to some very well-oiled, very well-financed lobbying a year or so ago that had the effect of shifting a substantial amount of the tax burden in cities like Pembroke - and I think of places like the Pembroke Mall - away from big business on to the backs of small, medium-sized, family-owned business. Some revolution.
Mr Pouliot: Simply put, the Conservatives have thrown the property tax system in Ontario into utter chaos, nothing short of that. Figure this: With respect, three million units being assessed and reassessed, the largest undertaking of this nature ever in North America, and to do it in record time, in a year to 15 months. You had a proliferation of assessors, mostly amateur, going door to door assessing, some of them from the phone book, others from the local bar, with small business people, residents threatening to shoot them on sight, 12-year-old kids now about to get a gun not letting them on their property. This is chaos.
We're in October. Their fiscal year started on January 1 and yet this subject matter has not been resolved. What are people to do? How long will it take those 600,000 appeals to be heard? I will be long into retirement before they get to the first 20%. This is chaotic.
Sadly, it need not have happened. It could have been prevented. An ounce of common sense would have prevented it. If you were intent on current value, market value, fair assessment, Speaker - and I know you're not in favour, Mr Speaker, that you dreaded this process and predicted the chaos that today we are here debating, a sad day for Ontarians, for taxpayers.
The Speaker (Hon Chris Stockwell): Response, the member for Essex South.
Mr Crozier: I want to thank the members from Dovercourt, Renfrew North and Lake Nipigon for their comments; and who in here would be surprised that I'm not particularly enamoured by the comments from the member for Chatham-Kent, least of all the member for Chatham-Kent? I gave him an opportunity, after he had slammed municipal councils for being expensive, to kind of make up for that. And what does he do? He stands there and says, "Maybe so." Member for Chatham-Kent, I don't say, "Maybe so"; I think they've been darned efficient.
Then he went on to bring up the matter of provincial debt. That then leads me to remind people that when this government took office the provincial debt was roughly $100 billion. What's going to happen in the five years that they've been in office, according to their own budget figures? They're going to borrow $20 billion more. They're going to raise the provincial debt from $100 billion to $120 billion, the Progressive Conservative government of Ontario.
If you add that to the debt that was run up by Progressive Conservative provincial governments before, the PCs - this government, the tax fighters, those who want to keep government spending down - are going to be responsible for $65 billion out of the $120 billion of debt this province will have, more than half of it. I'm glad you gave me that opportunity.
The Speaker: Further debate?
Mr Silipo: I'm glad to have a chance to start off debate for our caucus on this. We have indicated to the government, particularly to the House leader for the government side, both orally and in writing that we will support this legislation. I just want to reiterate that. We also indicated that we would support fast passage of this legislation. We even indicated that we were prepared to have it passed in one sitting. We're still prepared to have that happen, although we understand that we probably will have a couple of days on this. That's fine.
The point is that we were surprised when the attitude that came from the government side was, "We're prepared to bring in this legislation if the opposition parties are prepared to support it." Well, we were the ones who were calling for it. Back when the previous pieces of legislation were being debated, we had amendments; we had debate about the fact that, among other things, these deadlines were going to cause problems. Over this past summer, as we began to see more clearly the impact of the deadlines themselves on the appeals, we began calling on the minister to announce, first of all, that they were prepared to relax the deadlines and then to announce that they would bring in legislation to make that effective.
We stand here tonight very consistent in the approach we have taken and eager to see this legislation pass, even though I believe it still contains some problems in terms of one of the deadlines particularly related to the business occupancy tax issue, and I will talk about that in a second. But I also want to indicate that in the spirit of wanting to get this legislation passed sooner rather than later, I will be dividing my time this evening with my colleagues from Lake Nipigon and London Centre. I just wanted to let you know that, Speaker.
To get into some of the background that has led us to this point, the government began its misadventure with the whole property tax system some time ago when it began the whole exercise of Who Does What. At that point they were eager to sort out and were trumpeting the fact that they were going to take education costs off the property tax in exchange for social services and some other costs. Then as they got into it, they of course realized that it was one thing to say that you were going to do that; it was quite another to actually sort out the problem that was there, something that has been there for years as a problem, certainly going back to previous Conservative governments.
The long and the short of it came down to the fact that at the end of the day, the Harris government decided that they were not going to take education off the property tax - they were going to remove some of the costs of that - but they were now going to control the establishment of the tax rate for education purposes. Of course, in exchange for that there were also going to be additional costs on the property tax base by way of health costs and social services costs that weren't there before.
They were going to do all of this - and get this; this is what led and continues to lead to the problems we have in front of us - no longer in a net trade-off situation; that is, they were no longer going to be in a situation in which the monies that were moved from property taxes to provincial taxes were going to be balanced by taxes going the other way. What we ended up with is some $600 million worth of shortfall; that is, monies for costs pushed on to the property tax base that municipalities are now just beginning to realize they have to cope with and find ways to deal with.
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So there's the centralization the government has imposed particularly with respect to the education taxes. Add to that the fact that the government has insisted not only on that centralization but in persisting with a new assessment scheme for the province, a scheme they've put in place in one short year. Experts and people in the field who have done this kind of thing said to them time after time, "It cannot be done properly in this short a time," yet because of their rush to get this done, because they know best - and how many times have we seen that attitude before? - because of their persistence to get this done the way they wanted to do it, they messed it up. So last winter and last spring we saw a situation come to light particularly as it pertains to our business sector: protest after protest by small businesses as they, who thought they had a friend in the Mike Harris government, began to see that the impact of the new Mike Harris property tax scheme would have meant increases of 50% and more to their taxes.
We had businesses, whether businesses in my own community of St Clair or along Bloor Street, in the whole west end of Toronto, along Dundas, along various streets, along the main commercial strips, look at their increases under the Mike Harris tax scheme and say, "Not only is this an incredible and exorbitant increase, but the amount of money I'm being asked for," they would say to me, "to pay in additional taxes is more than my little business generates."
Yet even with that reality, the Harris government persisted in saying that what they were doing was right, that what they were doing was correct, that they knew best. It was only after weeks and weeks and months and months of pressure, protests and rallies that finally the Minister of Finance, Ernie Eves, had to relent and say, "Yes, we understand that there is going to be a problem; we understand that this new tax scheme is going to cause incredible hardship for many small businesses."
What happened? Then came the commitment to cap at 2.5% the increases that small businesses would face. No matter what their increase would be, it would be capped at 2.5%. There was a bit of a sigh of relief, a sense that some small victory had been won, that for the time being at least, small businesses would not go under, that they would have the ability to continue to run their businesses with, yes, an increase of 2.5% a year for each of three years. Nobody particularly liked that idea, but compared to the 50%, 70% and 100% increases, it was easier to deal with.
Yet an interesting thing is happening. As I talk now to small businesses, while they continue to feel a sense of relief that finally the government, after increasing and incredible pressure, listened and had to react because you had no other choice, they're coming to me and saying, "But what's going to happen at the end of these three years?" I have to genuinely say to them that I don't know, because no one knows what's going to happen in three years' time. The only thing that's for sure is that between now and then there will be a provincial election. We know that part of the reason the government proceeded with that 2.5% cap was that it was also a convenient way to buy some time to get the issue past the next election.
But I want to say to each of those small businesses who a year or a year and a half ago, when my colleagues were saying to them, "This is what's going to happen; you're going to see big increases as a result of what the Mike Harris government is about to do" - there was, to be frank, an air of disbelief among them. They didn't quite believe that this government, which was supposed to be a pro-business government, would actually bring about a tax scheme that would do that to them, that would cause those kinds of increases to them. It was only when they saw the evidence, when they actually saw the projections from the municipalities, that they began to understand that what we were saying was the truth, that what we were saying to them would happen was actually going to happen. Then we began to work together, and that led, as I say, to the pressure building and the government having to finally cave in and agree at least to the 2.5% cap.
But I say to them now, the one thing that's for sure is that you cannot trust the Mike Harris government to deliver on sensible changes when it comes to property tax and to the whole property tax system. If you think that simply by buying time this government is going to be able to fix this problem in a way that's going to mean anything other than huge increases when that three-year period is up, then just think again, I say to those small business operators and owners, of what the situation was a year and a half ago when we were predicting there would be big increases that would drive many small businesses out of business and that was what was about to happen. I say to them to think again before you give any support to this government, because three years from now, two and a half years from now, the last thing you want to do is to see Mike Harris in a position to bring in place the rest of the market value assessment system that will then increase those taxes big time for small businesses.
When it comes to the business side - I have talked a little bit about that and I want to touch on another area of this - the business occupancy tax is another big piece of this change that we have before us very directly tonight. The Mike Harris government, with great fanfare a year and a half ago, said, "We're getting rid of the business occupancy tax." I didn't hear very much said by them at that point about the fact that all they were doing was simply shifting the responsibility for paying that tax from the operator of the business to the owner of the property. They weren't getting rid of a tax in the sense that they were eliminating the payment of the tax; they were for those particular individuals who operated the business, but they didn't talk a lot at that point about the fact that they were simply shifting the cost on to someone else. Interestingly enough, we have to remind people that it was also as a result of some pressure by municipalities, which were having trouble collecting some of the business occupancy taxes - businesses were getting into difficulties - that the government proceeded with that change.
We then found ourselves in a situation where the government had to deal with the reality that in making that change, first of all, the owners of those commercial properties were now going to be responsible for the payment of those taxes; and, second and more fundamentally, they realized only too late, because again they wouldn't listen to anything that we or other people had to say on this score, that the legislative changes they had brought about omitted the ability of the owners of those commercial properties, the landlords of those properties, to pass on to the operators of the businesses, as they had up until that point, the responsibility for paying the business occupancy tax.
People were caught in the middle of leases, and if they were lucky enough to have had provisions in the leases that said, "All tax increases are paid by the operator of the business," then they could pass that on, but if they were, as many were, in a situation where they had lease arrangements that said that the landlord or the owner paid for the taxes and the business operator or the tenant paid for all of the other costs, utilities etc, then you had a situation in which the landlords - and I'm talking here particularly of small landlords, people who own a commercial property, people who have invested many of their life savings in owning a small shop, a small commercial property on St Clair Avenue, on Bloor Street, on Dundas Street, on College Street, streets like that right across this metropolis - found themselves all of a sudden holding the bag and being responsible for hundreds and sometimes thousands of dollars in additional taxes.
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The government finally agreed and relented on that and said, "Yes, we realize we made a mistake." So in the last bill they brought forward, Bill 16, they brought in a provision that allowed landlords to pass those costs on to the business operators, the tenants, for the life of the lease.
It looked like the problem had been fixed, except for the issue of the deadlines. When did they put the deadline by which the landlord had to apply to the tenant for that increase? The middle of the summer. The deadline was in July. What happened? In many instances, I suspect in most if not all instances, that deadline came and went, and not only were the owners of those commercial properties never aware that the deadline existed, never told that the deadline existed, because (a) they did not know how much the money was that they were supposed to collect and (b) nobody told them what the deadline was, but the municipalities, which were supposed to be in the role of implementing that change, were often not aware of what that deadline was.
Once again we had the situation over this past summer where the government had to deal with the reality that one more change they had brought about was causing havoc, this time again in the small business sector. As I say, most of the people I've heard from and am concerned with are those individuals, families, who have invested their life savings in owning a small property, have operated a business perhaps some years for themselves and have rented out the property and now are caught with hundreds if not thousands of dollars in increases in property taxes.
Here we are, finally, as a result of pressure. We called on the government during the summer, towards the end of the summer, in the early fall, to bring about legislation that would change that deadline and here we are now with a change in this legislation that will do that. This is the problem that I want to bring to the government's attention. While we are happy - and as I said, we will support this legislation because at least it provides an extension of the deadline - that the deadline is being extended, I want to be clear that the extension of this deadline, while it's October 30 on the residential side - and I'm going to talk a little bit about the residential side - on the commercial side, as it relates to this problem of the business occupancy tax, the actual deadline for this request by the owner of the property to be able to recoup the business occupancy taxes, is not October 30 but is October 16. Here we are on the evening of October 5, some 10 or 11 days away from that deadline, dealing with the legislation in front of us that will provide some relief, will extend that deadline, but in my view it may not be enough. It will not give people the adequate notice they need, because the experience so far on this has been that people don't trust any timelines and deadlines until they actually see that the legislation has been passed.
With that in mind, I have been calling on the government to not only bring in these legislative changes but to understand that, on the basis of the experience to date, this particular deadline that's in this piece of legislation in front of us will not work and may not work. It may very well do the job in a number of cases - people may be aware now because of the ongoing debate there has been on this - but if you think of it in terms of good administration, good public policy, how sensible is it to pass on October 5, likely October 6 by the time we pass this if this bill comes forward tomorrow again, a piece of legislation that extends a deadline to some 10 days after that? How much time will there be for people to really become aware that this deadline has been extended? What I fear is that we may very well have to be back here one more time because the government has persisted in this deadline.
We had suggested simply shifting the deadlines another two weeks. That would have given people almost a month's notice. In fact, I have drafted some amendments that I still hope, given we're not going to finish this bill tonight, the government and the minister will think about seriously and allow us at least a brief time to go into committee of the whole and to deal with those amendments. We have prepared a package of amendments, which I offer to the Minister of Finance and to the government to look at seriously, that will simply shift the deadlines by two weeks and help to address that problem in terms of having people have adequate notice once the legislation is passed.
I want to be very clear. The government can do what it will in terms of passing this bill. We have indicated that because there is an extension in the bill we're quite prepared to help pass the legislation, because what we see in front of us is a lot better than what was there before. As one group that has been calling consistently for the extension of the appeal deadline, given that we have the appeal extended in the bill in front of us, we are going to support it. But I would just say to the minister and the government and the parliamentary assistant, if you believe this is going to resolve the problems, then you still have not fully understood the impact of what you're doing out there. A very simple proposal such as I have put today in very clear amendments and given to the minister's office would help to at least reduce the possibility that you're going to have more problems in this business occupancy tax area. I leave that in the government's hands in terms of whether they want to take that offer up or not, but it's there, the amendments are drafted and we could get them passed probably in half an hour in this place.
I want to talk a little bit about the other side of this whole tax mess, which is what has been happening on the residential side. I have talked so far on the business side and have done so because I really have felt during this whole process that if a government that purports, like the Harris government, to be the friends of small business can so badly screw up a whole process of legislation in terms of putting in place changes so dramatic, changes so drastic as to cause the kind of upheaval they have caused in the small business sector, if they could be as insensitive to the small business sector, how much more insensitive could they be to the residential side? There we have seen the problem reflected in huge increases.
In my own community in west Toronto, in the Dovercourt and Davenport communities, I can tell you hundreds of people have been through my office. I have seen no other issue over the last number of years as this particular question of the property tax changes that the Mike Harris government has brought about generate the kind of interest and anger we have here both on the business side and on the residential side.
We have a situation in which many seniors and many people on fixed incomes are having to deal with and come up with payment of increases of $300-plus over the next couple of years, and that's only because the municipality of Metropolitan Toronto at least had the gumption to put in place a phase-in of the system, a phase-in which I will readily admit was allowed in the legislation that the government put together, but a phase-in which only phases in the problems. Because this change is being brought about in the way this government has done it, you have many people who own their homes, older homes, seeing huge increases in their property taxes, and for many of them who are seniors the notion of saying, "We'll defer the increase," as the legislation allows and as the provision allows, until they sell or otherwise dispose of the property is not a notion they particularly like. Many seniors don't like the idea of leaving those debts for their children, and so it's not something that resolves the problem.
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It is something, though, that adds to the hardship, as they are having to find that almost $300 or $350 a year for the next couple of years, and on a fixed income, a pensioner's income, those are not easy amounts to find. That may not sound like a lot to people sitting in here, but it's a lot of money for seniors who have put all of their life savings into owning that home, for people for whom that was a central focus of their activities and their energies and who looked forward to being able to leave that house for their children, as their legacy to them. That $300 or $350 increase a year is going to be felt.
As I said before, I have never seen the kind of anger that I have had expressed in my office by constituent after constituent, and the appeal issue was something that was very much alive during the summer months as the earlier deadline loomed and as people were realizing that they had to appeal. Once we finally, as a result of the pressure that we put on the government, had a sense that they were prepared to extend the deadline, that subsided somewhat, but I know it's still there. I know there will be appeal after appeal. We know there are thousands of appeals that have now been launched, and I don't know how the government is going to handle that load, because it's something that's going to cause a lot of nightmares administratively. The government is going to have to deal with that and the government is going to have to be responsible for that.
On that piece I once again call upon the government, realizing that what they have done has caused the incredible number of appeals to be launched by individual owners and residential owners, to be lax in the way in which they apply even that $20 fee, which I know doesn't sound like a lot of money, but for people on fixed incomes that $20 fee to file the appeal is something that is not easy to come by. I know the government and the minister are making provision that where the amount of assessment and those issues can be resolved administratively before going to an appeal, there will be an opportunity for that $20 to be waived or to be in effect given back to the owners of the property. I hope the government will continue to keep that in mind and that the good people at the Assessment Review Board who are having to deal with this problem now will also keep that in mind as they are dealing with the implications of what we have in front of us.
That's a summary of some of the issues that we have in front of us and that have led us to this point. We have a situation in which this government persisted in putting forward a legislative scheme to put in place a new property tax system which had as its objective nothing more than to simply push on to the property tax base some $600 million in the trade-off of taxes between the province and the municipalities alone.
I know that if I had been a fly on the wall in the meetings of the Progressive Conservative Party caucus of the day, one of the things that would have been said to members of the government as a way to sell them on the idea of doing this was: "Don't worry. As tough as this may be, this is only an issue that affects Toronto. It's only Toronto where there's a huge problem because of the out-of-date assessment system, and so the only people who are going to be screaming at the end of the day are people from Toronto."
Lo and behold, what have we found? The member for Renfrew North was just explaining what was happening on the business side in his own community. During the end of this past summer and in the early fall, as municipality after municipality has had to deal with this, we have found that it was no longer a Toronto problem. In Hamilton the same kinds of problems that we are seeing here in Toronto are taking place, particularly on the business side.
In York region, that famous part of the 905 area that was going to have no problems whatsoever with this, you have small communities, particularly in places like the village of Kleinburg, where businesses are saying they're going to go under unless something is done, because the increases that the small business sector is going to have to bear there, and some of the residential as well but particularly the small business sector, are just going to be exorbitant. Regional council there is going to be looking next week, I believe, at what they can do. They're one of the ones that didn't opt into the phase-in, and I'm not sure I can blame them. As much as I agreed with the position taken by the council here in Toronto to phase in, because they didn't have any other choice, I also understood then, and understand now, the reasons why municipalities would be hesitant to phase in the 2.5% caps. They know that with the download on to the property tax base of hundreds of millions, some $600 million across the province, of costs that they are going to have to somehow pass on, costs which may not be apparent this year all at once but which will grow over the next couple of years, as they have to deal with those, one of the things that they are going to find, if they opted into the 2.5% cap for the small business side, is that the only place left for them to raise that money from is the residential side.
I said earlier to the small business sector that they ought not to trust what Mike Harris will do in three years' time with the rest of the property tax increases that would apply to them. I say to the residential owners that they ought to continue to watch very closely what's going to happen over the next year and two years because we're certainly far from the end of the story as far as what's going to happen as the full impact of the download of the Mike Harris government, the shifting of costs on to the property tax base, is felt in municipality after municipality. That's going to be a problem.
We're going to continue to see this mess evolve. We're going to continue to see a situation in which municipality after municipality, not just the city of Toronto, not just here in the inner core of Ontario's largest municipality, but whether it's in Hamilton, whether it's in the rest of the 905 area, whether it's in other communities across the province, as the full impact of the property tax scheme that Mike Harris has set in place takes effect, we're going to see negative changes, we're going to see big increases on either or both of the residential or the small business side.
I want to just say, as I conclude my remarks, that this is a bill that we should not have had to deal with. This is a bill that is only here because of the incompetence of the Mike Harris government. This bill is only here because of the rush that they have had in trying to get this thing through. This is only here because of the arrogance and the attitude that they have taken on, that they know best and that they are not wanting to listen to anyone who has an opinion that's different than theirs.
Now they're having to realize, even though they will never admit it, even though we had government members stand up and talk tonight about why they were bringing forward this piece of legislation, not one of them had the gall or the decency to admit that this was a piece of legislation that was fixing a mistake that they caused. And yet people out there know, because they have been seeing the impact as the tax bills have come in, what the new Mike Harris property tax system is all about.
We've even had the ridiculous situation, had this legislation not come about, of people receiving their property tax bills after the deadline for appealing the assessment would have passed, because in some municipalities, by the time the end of the summer was here, bills still had not gone out. There may even still be one or two municipalities where the bills have not gone out. There are many who are still trying to sort this through. You had the situation where municipalities were sending out the bills after the deadline for appealing the assessment had passed.
Of course this piece of legislation is necessary. As I said, we will assist in getting it through. But we should not have had to be here to deal with it. I would have rather tonight been at St Josephat school, a school in the Davenport community where they are dealing with another equally important issue; that is, the potential closure of that school brought about by the changes that the Mike Harris government has brought about with respect to the push and the download and the increases on to the property tax base of those costs.
We're going to continue to see the problems, whether in education, certainly in health care or here on the property tax system. The problem is far from over. We will assist in passing this piece of legislation because it helps to remedy the small part of the problem, an important part, for people who believe they should appeal the assessment, whether it's on their commercial property or on their residential property. But let me say it here now, Speaker: This is not the end of this issue and this is not the end of the property tax mess that Mike Harris and his government have left for this province.
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Mr Pouliot: Mr Speaker, perhaps trusting your memory, you will recall that it was the New Democratic Party who begged the government to extend the tax appeal deadline. This evening we're happy that they finally listened to our common sense, to our suggestion. We don't intend to delay passage of this bill. We want to ensure its quick passage. We will keep our promise. We're not tied to this bill umbilically or otherwise. We have no responsibility with their endeavours.
Mr Speaker, you will know that this is the sixth property tax bill that the Conservatives have introduced. And each and every time, it was to correct the bill before it. The question is: Are we to expect more tax bills to correct the one before it, Bill 63 to correct this one? People were getting their tax notices, their new notice of assessment, after the deadline. It makes no sense. It did not allow people a chance to appeal - well into the fiscal year. The municipal fiscal year starts on January 1; ours and that of our federal counterpart starts on April 1. You had a condensed year when dealing with the Harrisites, with the Harris government.
Just last week, I had a small merchant in the great riding of Lake Nipigon - you know our special part of Ontario; you've been there: The riding borders on the legendary. We're 26% of the overall land mass between Lake Superior, Lake Nipigon, overshadowed by the bay, fully 1,000 miles long. You can relate to that; it's more difficult for people who are more restricted and live in other special parts of the province to have a relative idea of the vastness, the magnificence of Lake Nipigon, truly the size of Germany. This entrepreneur calls me and says: "Gilles, I have a problem, an impasse, a dilemma that I must deal with. I've just received my assessment notice and I'll be paying a lot more taxes. In fact, I've brought it up to our monthly meeting of our local chamber of commerce. They were appalled and yet they were faced with the same problems. Their taxes were going up as well."
Then he said, "I thought Mike Harris was a friend of small business." But then he goes on to tell me that he knows that Mike Harris and that party have just given a break on their business occupancy tax to the big banks. He says to me, "Gilles, how can Mike Harris be a friend of the big banks and be a friend of small business at the same time? Surely he doesn't have that many friends." I said: "He's your friend the same as the big banks are your friend. Mike Harris is not there to ameliorate, to improve your lot." This is not what the mantra says.
This is a group of people who were committed to what they referred to as current value assessment. They were to instil, to decree fairness. People were to be happier. But it's not that simple because there is another side to the ledger. All along they were intent on downloading. You see, they were to take the credit in an ideal world for balancing the books, for having a zero deficit budget and perhaps a possibility to attack the deficit. But in order to do that and to shake hands and make people feel good and give them a 30% tax cut, which incidentally benefits mostly the rich in this province, the 6% or 10% of people who are well off and, simply put, the people who need this less, in order to satisfy those appetites, that of the tax cut and coming closer to zero deficit, they had to download; in other words, shift responsibilities. They were going to take the good news and saddle you with the bad news.
I've said before, during the two-minute response allocation, that the government will take credit for all the jobs created under any circumstances regardless of whether they're centred on a service grade, the McJobs, the low-paying, the second job. But when the economy turns, when the bad news arrives, when the cycle hits, then they will blame Asia, South Korea or they will blame those fellows at Long-Term International, or Long-Term Capital Management. They refuse to look in the mirror and to say, "We have very little control, for our policies are going too quickly, they're impacting too many people."
It's been said before by the ministry to expect fully 600,000 appeals. Out of three million units being assessed, 600,000 appeals. It will take forever to hear them. In the meantime, small entrepreneurs will be burdened, many of which in the down cycle will catch pneumonia, they'll go bankrupt, they will be out of business. Many homeowners will have to sell the property, no longer being able to live there, partly because of the tax increase due to reassessment and partly because it will hit them so suddenly, it will be so massive, it will be tout de suite, pronto, and they won't be able to sustain the added cost.
Will they go cap in hand to Mike Harris and say: "Do you have a contingency plan? Do you have some encouragement? How do I see the next fiscal year?" Or, as has been suggested at committee, a Conservative member said, "If you can't afford to live there, you should sell the property"; or have you ever heard of a reverse mortgage where you decrease your equity as you get to be the recipient to satisfy the appetite of an ill-conceived idea?
The Liberals, I'm sure - one need not speculate a great deal - looked at market value assessment. I know that the New Democratic Party when we were the government looked at it, we had a good look at it, and we tried to balance, to have an equilibrium. We said that on the one hand some people have not been reassessed for a good many years. Is it fair when you compare the value of one property vis-à-vis another within a certain location? Is it fair to the others? We tossed the idea back and forth. But what we could not come to grips with, what we could not do in conscience, is to burden small business people and homeowners with a tax scheme that they could ill afford. So one more time, more or less, it could be said that we succumbed. We said, "No, let the human dimension have its day."
But ideologically, philosophically, we are opposite to the Common Sense Revolutionaries. What makes us tick is different from them. We warned them: "Please don't do it. Do it in instalments, should you do it. Look at the application. Don't do it in haste. Don't do it when you're tired, because you have too much on your plate, you'll make mistakes." Well, the annals speak for themselves: six property tax bills, each and every one referring to the one before it. Is this competence? Is this the way you would wish to have your administration, your government, pass legislation? Or would you not, time after time, begin to question their capability? More and more as we digest, as we examine, as we scrutinize the legislation that they put forward, we begin to realize that competence is not the forte, not the flagship of this administration, quite the contrary.
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Bien au contraire, monsieur le Président. Nous faisons face depuis hier et aujourd'hui consécutivement à plusieurs projets de loi qui projettent le gouvernement du premier ministre Harris sous une lumière douteuse, géré par une incompétence grandissante si peu observée dans les annales de l'Assemblé législative de l'Ontario.
There's been no shortage of warnings. We've done our legislative duty. We've said through amendments, we've said through counsel on a one-on-one basis, first, don't do it, but if you're intent on doing it, we can't stop you, but do it by instalments, do it progressively and see what the ramifications are when the rubber hits the road, the application in the real world. Give it time to see how it works.
But the government pushed through. They knew what they were doing. They had the whiz kids working at it. They were going to have a look-alike contest to gather in the Premier's office, all vice-presidents wearing suits, and they were going to come up with a crystal ball, for those people know. They certainly know more than legislators with the opposition. I ask you, Speaker, would you invest your hard-earned cash, your pension plan in the hands of those whiz kids? I certainly would not.
Mr Conway: As opposed to a man named Meriwether?
Mr Pouliot: The John Meriwethers of this world maybe have gathered - I'm looking for him - with Long-Term Capital Management and the whiz kids and the crystal ball, because I wish to know how can I put - for every $3,000 they'll be able to go and fetch me magic, the magic wand, they'll come up with $200,000 worth of credit. I've always looked for John, I've always looked for bankers who know John, unable to find them. But maybe it is the kind of whiz kids that you find in the Premier's office and get a hold of these bills. They've got all the gizmos and the gadgets.
But Harry Smith calls from the hardware store up north. He just got his tax. The rubber has hit the road. He is out of business. He has beaten the path so often with the chartered bank he can no longer go there. He doesn't want to face what used to be a friendly banker, because the banker is old-fashioned; he wants him to deposit now and then. Look at Ms Jones, forced to sell the house. She raised her family in that house. Not uncommon, it's all of us, too busy working, keeping the family unit together, trying to make ends meet, trying to survive on an ordinary income. That's Mr and Mrs Canada, that's Mr and Mrs Ontario. It is most of us. Why hurt them?
If you don't have the substance, because you are not political pundits, at least have the courtesy, Conservatives, to go back to your ridings and to shake hands with people and to make them feel good. You don't need a lot of substance, but you need some style. You need to believe in what you do. You're helping them.
Now the power of the purse has been severely impacted, and, just as importantly, it's the confidence in the system, that we want to feel good with you. Who's in charge across the hall? Who's guiding us? Am I in good hands? Can I look to the future with confidence? You're on your heels. You're not progressive, you're totally defensive. You screwed up on education: rotating strikes, legal-illegal work stoppage, 126,000 educators out, people refusing to partake in extracurricular activities - the education of the future, of our children, of yours.
Health care: You juggled the books while people are waiting for a visit from a relative in the corridor and they have the impression that you're there playing politics. "We're spending less per capita but more overall. This is an open-ended program. We have a fiscal responsibility." I need a transfusion; I can't get a bed. No bed, no blood.
Those are the largest. You were swift, you were deliberate, systematic and expedient when it came to the less fortunate, to those who don't have much of a voice, because with you people, I can assure you, they don't talk much, they say little. They're the marginalized. You dislocated them even more but it was easy. You thought you had the pulse of Ontarians and you would give them the back of the hand. Tactically, it seemed to work.
We were reminded during question period today as we approach winter - it's ironic. The government tells you, "We're experiencing a period of recovery. People have more money in their jeans, more money in their pockets," yet you're confronted, you're asked: "Why is it then that you have more people without shelter, that you have more people at the food banks than you ever had before? How do you reconcile, how do you marry the two, how do you explain that? Have we lost our civility?"
No one wishes that and yet you're going to run out of park benches this winter. If there is a regression of El Niño and its counterpart, La Niña, takes over, it's going to get colder. One has already frozen, has been diagnosed as frozen to death. No one is to blame, no one wants people to get like this, but it's a sad reflection on our society. There is only so much Outreach for the homeless that you can sell. You pay 36 cents, you sell them for a buck, maybe you get a tip, so you've got to sell a lot of copies at 64 cents of profit during a day to eat, to feed yourself. More than 5,000 - I don't feel good when I see this. This is where the effort should be. If you were well organized, you would have had time to do that, because nothing else matters. This is the link. This is how you will be judged.
Quand je me regarde le matin, je me désole. Quand j'arrive ici à l'Assemblée et quand je me compare, je me console. Souvent, et je le répète, à la veille d'un hiver qui risque d'être sévère, nous avons aussi, dans cette prospérité malheureusement trop artificielle, plus de démunis, plus de marginalisés, plus d'esseulés, plus de pauvres, plus de sans-abri que jamais auparavant. Comment expliquer le phénomène ? Comment expliquer et accepter en conscience un système qui a permis aux riches, aux mieux nantis, au profit des moins riches, des pauvres et des moins biens nantis, d'élargir la marge ?
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Ce que nous avons ici, c'est que nous avons permis aux riches de s'échapper du peloton. Nous avons dit à ceux qui peuvent courir un peu plus vite de nous laisser, de laisser les autres à l'arrière. C'est à coût de dimension humaine, de barème, de jugement d'un gouvernement. Jamais je n'aurais cru qu'un jour - et je répète, en ce soir d'attente, parce qu'ils sont plus nombreux que jamais auparavant - durant une période de prospérité, cette disparité, non seulement on lui a permis de continuer mais on lui a permis de se propager. Nous acceptons, avec un semblant de décence qui nous convient de plus en plus mal, que nos frères et nos soeurs oeuvrent dans une misère relative pendant que les plus privilégiés dans notre société soient permis de profiter d'une situation jamais égalée auparavant.
I only wish, when we look at the proposals from the government, we could have the assurance that when the opposition presents an amendment, it will not deter the spirit of what's being put forward but is there to help, that there wouldn't be this kind of reluctance, unease, whereby, "If it's not from us, we're not going to let it pass." We literally could have saved months in the program of the government being put forward in a fashion which is easier to understand, better organized and more applicable.
Je vous remercie de m'avoir accordé l'opportunité, avec mes collègues, de partager cette heure qui était la nôtre.
The Speaker: Member from London Centre.
Mrs Marion Boyd (London Centre): I'm glad that my colleague left me just a few moments to relate to you a story that happened on the weekend.
I was canvassing with some friends on Hamilton Mountain and came across a woman 80 years old. When we asked her what concerns she had with the policies of the current government, she invited us in and sat us down at her kitchen table and talked to us about her tax assessment. She talked to us about the $600 increase in her taxes on her very modest, unimproved two-bedroom bungalow where she'd lived for over 40 years and which she felt she was in danger of losing. She explained to us that she was very frightened when she got the bill, that her daughter and her son were both away - no one could help her to deal with this - and that she'd missed the deadline for appealing her assessment.
There are hundreds of people like this around the province, and people in the opposition parties tried to tell the government that the massive changes they have caused to happen in the tax system that are going to be extremely detrimental are happening so quickly, with so little real information to people, with so little flexibility around the numbers of appeals that are happening that people like this woman are living in fear of losing their homes.
The government says there's no reason for people to fear, but instead of putting this kind of legislation into the original bill, instead of heeding the almost universal cries from municipalities, from the opposition, from citizens themselves who realized what was happening, they didn't do it. Now we're here debating a bill that has to be passed because they refused to listen to the cries for help from people that were very clear long ago. It's just another example of their incompetence, another example of their insistence on pushing things through without looking at the consequences for real people in real communities.
Of course, we have pledged ourselves to support this. The sooner it comes in, the better. I want that woman to know that she still is going to have time for appeal. There should be an extension. The problem is that it should have been there from the beginning.
I also know how overburdened the Assessment Review Board is. It is impossible for them to do their work with integrity if they are expected to push all of these matters through at the kind of speed that the government wants to go.
We want the government to be very clear. We don't want to be here again and again fixing up the messes that they make with their hate.
The Speaker: Questions and comments?
Mr Conway: I want to commend the three previous speakers from the New Democratic Party for detailing in a variety of specific ways the negative impacts of this dramatic change to the assessment and related taxation.
There is no question, when I think back to about a year ago, that the Association of Municipal Clerks and Treasurers came to this Legislature and made a very blunt plea to the Legislature that basically said: "Don't do this. You're attempting far too much. It is too complicated. It is going to lead to all kinds of unintended consequences." That has been borne out.
I think the government had to know, and I have a lot of regard for my friend the Minister of Finance, but he had to have known, because I know he was told by his assessment officials, that when you literally throw every single piece of the Assessment Act up in the sky on a windy afternoon, it is not likely that it is all going to float back into place.
In my community, as I mentioned earlier, the surprise has been the very substantial tax increases that these changes have visited upon small business people. As a residential taxpayer in the city of Pembroke, I've seen my own taxes on the same assessment base increase by 5.5% to 6%, but that's nothing compared to what the small businesses are faced with. As I said a while ago, I have small businesses that have seen their taxes double. I've got businesses now that are paying more in tax than they are paying in rent, and when I go to the assessment office, when I talk to knowledgeable people, the substantial reasons for these huge increases have to do with changes in provincial government policy. That's the part that leads me to say that we absolutely should extend the appeal date, as a minimum.
Mr Peter L. Preston (Brant-Haldimand): There are two very hard-hit communities. One of them is my own, Brant-Haldimand. Brant-Haldimand was formed with the consideration by a former government that there would be 350,000 people in that area. They failed to realize you can't get there from here. Now we have 82 politicians taking care of 100,000 people. They are using an elephant to pick up toothpicks - strictly overburdened with bureaucracy and politicians.
The second one hard hit is Hamilton-Wentworth. Some 12,000 hours of citizens' time went into a $600,000 study telling Hamilton-Wentworth how to save money. They came out with recommendations about a foot thick, which went straight into the garbage.
This government gave both those municipalities the tools to deal with the elderly, with the businesses. Both those municipalities refused to use one of the tools that were given them, and consequently they are suffering.
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Mr Bradley: First of all, in many of the municipalities it is the new provincial taxes which are very onerous on the people of those areas, rather than the people themselves generating that kind of new expenditure.
I want to indicate to the members of the NDP who spoke that they may be interested to know that what the government members are doing now is saying, "Go to the municipality and they'll fix everything up, they'll have all these rebates for you," when the problem has been caused by the Mike Harris government's downloading on to municipalities.
There's a policy out there that somehow bigger is better. The Conservatives of years ago were much more correct when they assumed that smaller is often better. There are a number of proponents in the Niagara region who say, "If only we could get rid of Wainfleet, Fort Erie and Port Colborne and so on, our problems would all be solved." That simply isn't true. Dr Joseph Kushner of Brock University, an eminent economist, along with some others, did a study which was published, I think first of all in Municipal World and then in other places, indicating clearly that a situation where you encounter economies of scale when you go to a larger unit doesn't automatically happen. There are some circumstances in business where it happens, in industry, but it does not automatically happen in other places. I certainly would agree with him on that.
The fundamental problem we have here is that this government is emulating what they did in New Jersey, an American example. The Republican Governor of New Jersey cut state income taxes by 30% and then thrust on to municipalities all kinds of new responsibilities which are costing local taxpayers a lot of money.
Mrs McLeod: I noted in the comments made by the finance critic for the New Democratic Party that he indicated there was no shortage of warnings for the government about what the impact of their poorly conceived property tax changes would be, particularly on small business taxpayers.
I know the member was speaking of the warnings that were received from opposition parties, and certainly they were frequent in number, but there were also significant warnings issued by the Association of Municipal Clerks and Treasurers. Here are some of the things they said during the 1997 public hearings on the so-called reforms of the Tory government: "The system will be immensely complicated by creating 84 classes and subclasses and up to 156 tax rates"; "Implementation is a high-risk strategy for the financial health of the municipal sector"; "It will create serious problems"; "It is a recipe for administrative chaos."
It's absolutely amazing to hear the member for Brant-Haldimand tonight continuing to ignore, as indeed his entire government has continued to ignore, the concerns that were expressed throughout by municipalities, to suggest that the problem now is that municipalities are not using the tools given to them by this government. One of the tools presumably was the government's withdrawing of the business occupancy tax, a very good move for the government. It made it look as though the government was reducing property taxes, but of course that was always municipal revenue. It was the municipalities they were taking revenue away from. This wasn't the government giving a tax break to the businesses. In fact, the municipalities have had to put that business tax back on to small businesses, and that alone has meant an increase in taxes of 10% to 15%.
Then there is the fact that the chaos is going to continue, because in the course of all this the government, ostensibly having done all of the downloading on to the municipalities in order to take education off the property tax, I remind the government and the public again, failed to do that, left 50% of education on the residential property taxpayer and -
The Speaker: Response, member for Dovercourt.
Mr Silipo: I appreciate the comments of all members. I just want to say particularly to the member for Brant-Haldimand that you can play the shell game only so long and then at some point it's over, because municipalities actually understand what you have handed them. They are having to now deal with the impact of the various changes you've made, which we have talked about tonight and will have occasion to continue talking about. They're now having to implement your policies, and they don't like it. You can say that you gave them all these tools, but the reality is you didn't give them the information, let alone what you did to them with respect to the download and how much you pushed on to the property tax base, which was more than what you took up to the provincial tax base. You didn't even give them the basic information with which to make those decisions in many municipalities, so I don't blame those municipalities that did not opt for the 2.5% cap, because many of them did not themselves realize the full impact of what they were getting into until it was too late for them to make that decision.
Even then there was a deadline by which municipalities had to decide whether to opt in or opt out of applying that 2.5% cap, and many of them didn't have all the information in front of them when they made those decisions. In Toronto they did, they managed to do that. We'll see down the line whether that was a good decision. It was a good decision with respect to the business side. It may not turn out to be such a good decision with respect to the residential side, which is where they now have to go for any increases as they size up the balance of the off-load and the download in the next couple of years.
On the other hand, you're going to have municipalities that are still trying to grapple with this, and I will not be surprised if we have bill number eight in this saga be another bill that extends the deadline and allows municipalities that didn't opt in before to opt in now. Maybe that's what will happen next.
The Speaker: Further debate?
Mr Steve Gilchrist (Scarborough East): It's indeed a pleasure to rise to speak in support of the bill and to follow up on some of the comments we've heard from the opposition parties, both in their principal debate and in the two-minute responses.
There seems to be an ongoing belief on the other side that the world started on June 8, 1995. That's immensely flattering, but unfortunately it's just not true. Taking a step back to where this all started, it was precisely because the NDP government and all of its predecessors of all stripes had failed to recognize the fact that there were growing inequities even within communities, never mind between communities, when it came to the property taxes that were being borne not just by residences, but by commercial and industrial taxpayers as well.
Here in the city of Toronto we had a situation where downtown Toronto hadn't been reassessed since 1940 - 58 years out of date. Yet out where I live in Scarborough we had assessment values that were up to date within a decade. Across Ontario we had some responsible municipalities. The region of Niagara had gone to market value assessment; they were using 1992 values. The bottom line is that we did not see, however, a majority of municipalities that had taken that step, for some fairly obvious reasons.
As the members in this chamber know, market value assessment, or current value assessment as it's called in this iteration, is a net sum game. For every person whose taxes go up a dollar within each category, there is someone else whose taxes go down by that dollar. But the problem is that the previous government, particularly under pressure from the Toronto council, their farm team, did not see fit to antagonize the taxpayers in downtown Toronto, despite the fact that 75% of the people in the city resided in those communities which had more or less up-to-date assessments and were being overcharged. Pandering to their supporters in downtown Toronto, some of the crassest politics, they decided to simply walk away from the issue.
There's no doubt that, having come out with the first bill, there has been a need to go back and reflect on a number of changes and improvements. That in large measure is a testament to the fact that we trusted municipalities. We trusted them to do the right thing. It's encouraging to stand here right now knowing that 36% of all the municipalities in Ontario came up with taxes that had no increase, or a decrease. Much as the opposition members won't stand and talk about those communities, the reality is there are communities in Ontario who for the calendar year 1998 reduced property taxes by 24%. There's another 37% of all the municipalities who increased their taxes from zero to 5%, by and large inflation and more or less consistent with what they've done in years gone by, when there wasn't supposedly all this other muddying of the water. So we're already up to 73% of all the municipalities that were at or below inflation. That's a clear majority. Where does that leave the other 27%? Where does that leave communities like Haldimand-Norfolk, which saw a 17.9% increase?
The member for Dovercourt stood there and suggested - I don't want to misquote him; his exact words were, "It's a shell game to talk about potential savings for the property taxpayers from amalgamation." Clearly you don't get the same clipping service that the other members in the Legislature get.
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Let me quote from an article in the St Catharines Standard, October 3, where an individual, just a property taxpayer, had done some research about what was happening elsewhere in Ontario. He wrote quite an extensive letter to the Standard talking about the savings that had occurred in Chatham-Kent. They eliminated 138 politicians by going through their merger, 23 municipalities brought down to one; the 138 politicians saved $650,000. By buying one insurance policy instead of 23, they saved $527,000. Reducing the number of municipal buildings from 26 to six saved $2.371 million. In fact, the budget this year, with a number of service improvements to the taxpayers in Chatham-Kent, is $5.5 million less than the aggregate of the 23 budgets in the communities it replaced. Talk about a shell game; talk about obfuscation.
The fact of the matter is that responsible municipalities all across this province recognize the savings, recognize the possibility for new efficiencies and new ways of delivering service, recognize that having been formed in 1840 and 1850, when the horse and buggy was the only way to get there from here, technology had dramatically changed how they should be dealing with their taxpayers. Responsible municipalities have taken that initiative. We've seen over 240 municipalities voluntarily merge themselves out of existence.
As the member probably knows as well, it didn't stop last year. You'd think having started a new three-year term that the councillors would probably be sitting there waiting for the end of this three-year term before we saw any new amalgamation initiatives. I'm pleased to say the minister has already signed off on a dozen more this year, and there are another dozen expected before the end of this year. These are politicians, barely one year into this term, who are putting themselves out of a job on January 1, 1999. They're putting the interests of the taxpayers ahead of the interests of the politicians, something that certainly was not true before June 8, 1995, in this chamber or else we would have seen property tax reform.
The members opposite suggest that somehow all of this information wasn't available to municipalities. I'm sorry to point out that the facts are that as far back as March, the government came up with what we called the on-line property tax assessment program, the first time ever that a provincial government had come up with an interactive computer simulation program, available over the Internet; 7,500 hits by municipalities going all the way back to March. Almost every property in the province was loaded in that database, every possible simulation: What would happen if they used the phase-in? What would happen if they used the 2.5% cap? What if the cap applied to only one sector, perhaps commercial or multi-unit residential or industrial? What would happen if you created new categories?
Every municipality in Ontario, for over six months, has had access to that information. At the same time, the ministry has had seminars and briefings for every municipality across the province. Our Ministry of Municipal Affairs and the Ministry of Finance have put out more publications than you can shake a stick at. The reality is that every one of those municipalities had the information long before they had to send out the property taxes, long before. To stand here and suggest that somehow they couldn't do what members on this side have their staff members do in a matter of literally seconds, print out a summary of all of the changes up and down, is really quite insulting to the municipal finance staff. Obviously they could do that; obviously the tools were there, the information was there.
Where the problem was - and again it's in only a handful of municipalities, but the reality is that for some it was a different political agenda they were following; for others, it may very well be a case that, because they had not amalgamated, they still could not afford to have the kind of expertise in their finance department that we would have in the city of Toronto or Hamilton. Perhaps there was a need for even more hand holding. But the resources were there. Those municipalities could have simply picked up the phone and called the Ministry of Finance and absolutely every question would have been answered, or called their local member. I hope that even if they'd called an opposition member, they would have been given a responsible answer and the assistance they required.
The reality is that this bill simply allows, once again, those municipalities that decided to follow that different agenda one more escape valve, one more safety valve for their taxpayers. The taxpayers shouldn't be the pawn in all of this. They shouldn't be the ones suffering as a result of those different agendas. They should have the opportunity to file their assessments. I'm pleased to say that the minister came out and very publicly stated two weeks ago that 90% of all the people who are calling in and saying they have a question or a dispute with their assessment are being dealt with through what's called reconsideration, not even a formal appeal. The minister has said, for that 90%, "You're even going to get a refund of the small fee you pay when you file your assessment." So they're not even out a penny to have gone through this process.
Was it a daunting task to update for the first time in 58 years the values of 3.9 million properties? Absolutely. Are our hats off to all the people in the assessment branch, all the municipalities that did work responsibly? Absolutely.
For those few municipalities scaring their taxpayers, that have decided that fearmongering is more important than handling their duties responsibly, we've come up with this bill to give their taxpayers another break, another opportunity to file that assessment. The bottom line is that 90% of those people will walk away quite content when, in a timely fashion, the assessment branch deals with their question and concern.
The bottom line as well is that municipalities are rapidly running out of excuses. The reality is that there are no new initiatives being launched for January 1, 1999. It's going to be very interesting to go back into places like Niagara region, where they decided to take most of the special-purpose funds - would you like me to continue when next we do this, Mr Speaker?
The Speaker: Oh, absolutely.
Mr Gilchrist: Well, I thank you.
The Speaker: It now being 9:30 of the clock, this House stands adjourned until 1:30 of the clock tomorrow.
The House adjourned at 2127.