Ms. Lisa MacLeod (Nepean-Carleton): I'd just like to applaud my colleague from Oxford, Ernie Hardeman, for his very thoughtful presentation here today. I've been fortunate, since being elected, to be his apprentice in the municipal affairs critic portfolio. I really appreciate all of the time and effort he's put into getting me up to speed, and teaching me a thing or two about the Municipal Act and Bill 53.

As you know, I spent quite a deal of time with the new city of Ottawa as a policy adviser to a few of the city councillors there. In particular I looked at this piece of legislation as I would as a staff member at the city of Ottawa, as well as a legislator here today.

I'm pleased to add my voice to this debate on Bill 53. It's a very important piece of legislation, as my colleague has mentioned, for Ontario's -- in fact, Canada's -- largest city.

Having said that, my concern is that this legislation can be described as a piece of precedent-setting legislation that can have impacts on municipalities throughout Ontario other than Toronto in the longer term. It has been described by my friend Gail Logan, who is the president of the Ottawa Chamber of Commerce, as the "template for the revised Municipal Act." When I think about that, I think about some of the changes to this bill that should have occurred during committee.

Gail adds that there is a major danger in this legislation. She says that "municipal governments in Ontario will likely acquire the power to get through the back door what they couldn't get through the front door," and she says that's "more taxes." That's what I'm going to spend the bulk of my presentation on here today.

Judith Andrews of the Canadian Federation of Independent Business concurs with Gail Logan. She adds her voice to this and tells us, "Once Toronto receives new permissive powers, it won't be long before at least some other municipalities seek the powers to follow suit. This would result in a patchwork quilt of differing local regulations, taxes, charges and uneven levels of service across the province."

During committee and certainly in our offices we received a lot of e-mails, faxes and general correspondence, and we've heard some examples of dangers in precedent setting. In my community, the city of Ottawa, restaurant owners were alarmed with section 262 of the bill, which allows a sales tax to be imposed on customers who purchase liquor at a restaurant. I know that I'm not the only one who received this type of correspondence from their communities. Business owners in my community of Nepean-Carleton -- in fact, the entire city of Ottawa -- are very concerned with this.

One establishment owner wrote to me, "I'm writing to you today to raise my strong opposition to the proposed authority for the city of Toronto to levy a direct retail sales tax on the purchase of liquor. I am requesting that this provision be revoked from Bill 53, Stronger City of Toronto for a Stronger Ontario Act, and that a similar provision not be contained in a new Municipal Act." There you go. They're concerned right now that there has been a precedent set because section 262 has been included in the act. My constituent continues:

"As a worker in a food service establishment licensed to sell and serve liquor I am opposed to any additional taxes on liquor. Any new tax on liquor will result in a decrease in liquor sales, which will impact the number of shifts available and lower my earnings, both wages and gratuities."

So now we're being told by the business community that this piece of legislation -- in particular, section 262 -- could have an impact on our economy. My constituent continues:

"Toronto's private sector businesses and their employees cannot afford, nor should they be expected, to shoulder the cost of remedying the city's economic woes.

"As Bill 53 is currently under consideration by the Legislature, you have the opportunity and the authority to stand up in support of the hospitality industry and small business and make a legislative amendment now." I'm proud to say, I did make an amendment at committee, although it failed. "The hospitality industry calls on you to ensure that the proposal to give the city of Toronto direct taxation power on the purchase of liquor is removed from Bill 53 and is not included in the Municipal Act." There is still time to make sure that section 262 is not included in the new Municipal Act. My constituent continues, "The sustainability and viability of Ontario's hospitality industry depends on it."

My leader has stood in this Legislature as well, speaking about this tax. Mr. Tory has spoken out against this ill-conceived power to impose new taxes. In this chamber, Mr. Tory questioned the Premier on this new tax on May 2, and I'd like to highlight some of his remarks on this section, the bar tax section of the legislation. I quote Mr. Tory:

"People who go to a bar to buy a drink presently pay the 7% GST, probably soon to be lowered" -- and I'd like to bring this House up to speed; thankfully, my seatmate's husband was able to give us a GST reduction in the recent federal budget, so kudos there -- "and a 10% provincial beverage tax. So the day after people sent you, with their income tax returns, hundreds of dollars in the McGuinty health tax that you said you would never bring in, if they wanted to go and have a drink to revive themselves from tax fatigue, you are now proposing in your legislation to add one more tax." So we went from "No new taxes" to "Let's find new ways to create taxes."

Mr. Tory goes on to ask the Premier, "Can you confirm that the City of Toronto Act enables the city to bring in yet another tax on drinks, that in addition to the GST, in addition to the 10% provincial beverage tax, you're going to allow another tax to be brought in by another level of government to tax a drink that a person might want to go and have?"

Of course, this being question period, it means it's not an answer period, so Mr. Tory got no response. But he continues -- I have to say that one thing I love about my leader, and there are many things, but the one thing I love about him the most is that he's persistent. He says, "What the Leader of the Opposition is actually saying, I say to the Premier, is that people are paying enough tax, including on a drink. When they go to try and have a drink, or when tourists try to come and patronize our tourist and beverage establishments in Ontario, they are paying enough tax." I couldn't agree with him more. The people of Ontario are paying enough tax since this government took office. In fact, they've found new and creative ways to tax people. I'm sure they're on the other side right now, dreaming up new and innovative ways to tax me tomorrow. I could actually provide them with a taxation innovation award, because they've created and they've approached and they've employed many new tax-invoking measures since 2003.

But back to the bill. I have to ask, what of the negative impacts on small neighbourhood establishments? At committee, members of this Legislature heard from Steve Mastoras, a former Toronto city councillor and owner of Whistler's Grille. Mr. Mastoras warned us of the negative impacts a new liquor tax would have on his industry. He tells the committee: "It is important to remember that there are over 4,000 licensed establishments in the city of Toronto. So when we talk about the city's hospitality industry, it's crucial that we talk about the independent restaurants throughout the whole city, not just downtown, not just the entertainment district and certainly not hotels -- 4,000 small businesses and a correspondingly substantial number of employees."

There you have it. I've read into the record correspondence from my community in Ottawa concerned that this could be precedent-setting legislation and about what it will do to the city of Ottawa. Now we're hearing from a former city of Toronto councillor, who also owns a bar, telling us this is going to impact the economy. He adds later in his deputation:

"It is a daily challenge to continue to keep our customers happy, meet the payroll and satisfy employee expectations, all the while facing increasing operating costs and incredible pressure on already slim margins.

"We have struggled in our industry and as small businesses, with consecutive annual increases to minimum wage, dramatic increases to utility costs, higher property taxes, higher rent, increasing WSIB costs, increasing benefit costs and higher and more user fees. There really is no room for an increase in our selling prices."

I don't think it could be much more clear that small, independent restaurants are going to suffer. So there we have it. Not only has a section of Bill 53 been introduced that small business owners across Ontario oppose because of the potential for a dangerous precedent-setting clause in the Municipal Act that they fear could later impact them; this section 262 is also another creative tax against hard-working middle-class Ontarians who have been stung time and time again by this Liberal government -- a government, let's not forget, that promised in 2003 not to raise our taxes but by 2006 has created a new tax-increasing power for another level of government. Couple this with the fact that small, independent establishments, the neighbourhood bar that we pass on our way home from work every day, are in danger of disastrous effects to their businesses. I find it hard to believe that when I moved a motion, as I stated earlier, to remove this tax-increasing capability from Bill 53, the government would still use its majority to defeat the motion.

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Of course, all this is going on in the context of Mayor Miller himself saying that he wouldn't use such a taxing measure. But the danger is not what he says today; the danger is that future councils could still impose this tax.

Before I move on to another part of the bill, I'd like to include a final note of caution on section 262 of the bill from Steve Mastoras, who I thought delivered a great presentation, having read his deputation: "We need you to do the right thing here. We have been reeling from the effects of a series of unavoidable external events and can't take another body blow. We need you to remove the proposed power of the city to impose a new liquor tax." Again, a business owner, a former city councillor. This man knows his stuff, and I think we should have listened to him at the time.

Another PC motion in committee failed, one that I think with its absence creates another distressing scenario where there will be a precedent-setting tax hike across Ontario. My colleague the member from Oxford, who is also our municipal affairs critic, moved that under section 263 of the Municipal Act, the government clarify its position on land transfer taxes by including within the bill an express statement that the city of Toronto is not authorized to impose taxes "on a person in respect of the registration of a conveyance of land as described in subsection 2(1) of the Land Transfer Tax Act."

I believe that without an express statement opposing a land transfer tax, we are skating on thin ice. Take, for example, what the Toronto Real Estate Board has said: "Under Bill 53, Stronger City of Toronto for a Stronger Ontario Act, the city of Toronto would be given general authority to levy taxes with certain limitations. Land transfer tax is not included as one of those limitations, meaning that this option would be open to Toronto city council if the legislation is passed." It almost sounds like a done deal, and as I said, precedent-setting. As somebody who lives in the city of Ottawa, I'm concerned that it might end up in the Municipal Act.

John Meehan, the president of the Toronto Real Estate Board, adds, "Most people agree that property taxes can't sustain the level of investment needed for things like transit and infrastructure. But" -- and there is a "but" -- "the answer is not a municipal land transfer tax. That's just another tax on property." Might I add personally, it's another tax on the individual.

He continues, "It's not clear what, if any, costs related to property transactions that a Toronto land transfer tax would be funding. Notwithstanding issues of fairness, a Toronto land transfer tax would be counterproductive. Many people are already choosing to live outside of the city because they simply cannot afford to live here. A Toronto land transfer tax would make this situation even worse, which in turn would mean less growth in Toronto's taxable assessment base and more urban sprawl resulting in" -- guess what? -- "increased commuter gridlock, pollution and frustration levels."

I don't have to tell anybody who's ever tried to drive through the city, as I've been doing for the last two months, the frustration people have with gridlock.

Again, in Ottawa, the fear that without an express statement that the land transfer tax is not included in the limitations for taxing authority for the city of Toronto, the Joint Ontario Business Sector Coalition, or the JOBS Coalition, as they are known, recommended against a land transfer tax. This coalition comprised some of the leading fiscal voices in the country: John Dickie of BOMA Ottawa; Judith Andrew of the Canadian Federation of Independent Business; Tasha Kheiriddin of the Canadian Taxpayers Federation; David Lyman, Eastern Ontario Landlord Organization; John Hebert, Ottawa Carleton Home Builders Association; Dick Brown, Ottawa Gatineau Hotel Association. I'm very proud that one of my staff members, Katherine Hollinsworth, formerly of the Ottawa Chamber of Commerce, also sat on this committee.

I've worked with many of these people in the past at Ottawa city hall on city budget related issues, and I also worked with many of them when I was a federal Conservative aide on Parliament Hill with the Progressive Conservative Party of Ontario and then the Conservative Party of Canada. It would only make sense that their expertise in the financial sector and the other two levels of government would spill over into our jurisdiction.

I respect the views of those on JOBS, and they are warning that any ability to levy a municipal land transfer tax should be rejected because the province already levies a land transfer tax, and they're not alone. While offering their deputation at committee, the Canadian Institute of Mortgage Brokers and Lenders adds their voice.

They express serious concern about the possible introduction by the city of Toronto of a new property-based land transfer tax. They say, "Today in Ontario the provincial government generates nearly $1 billion from the provincial land transfer tax, or LTT. This tax has been a growing component of provincial revenues. Bill 53, while prohibiting other forms of taxation, including personal and business taxation, does not explicitly prohibit the city of Toronto from introducing a municipal land transfer tax."

I'm going to continue to read this, but I just want to add that there seems to be enough confusion among stakeholders in Ontario, and specifically in Toronto, that an express opinion by the government to not include this taxing authority as prohibited is going to wreak havoc.

They continue: "According to the Toronto Real Estate Board, which has already spoken before the committee, the average land transfer tax currently paid by Toronto homeowners is in excess of $3,000, and I think they estimate close to $4,000 for every real estate transaction. The legislation before you today would allow the city to increase this total. The Canadian Institute for Mortgage Brokers and Lenders opposes such a new tax for the following reasons."

They go on to state: "The city and province have stated that they want to move away from property-based taxes as a sole revenue source, yet one of the new taxes seemingly offered the city is for a new property-based tax in the form of" -- guess what? -- "a municipal land transfer tax.

"An additional land transfer tax would make owning a home expensive in the city relative to other parts of the greater Toronto area and Ontario, whose municipalities will not have the same powers, thereby acting as a serious disincentive to the provincially mandated plan of intensification and promoting growth within the city of Toronto.

"A municipal land transfer tax would also impact affordability directly by increasing the cost of all housing, particularly for first-time buyers." I'm a first-time home buyer and I know how difficult it was for me and my husband and our new family to start our first home. Now we're going to be making it more difficult. "Finally, it is worth noting that both Alberta and Saskatchewan do not even have a land transfer tax" -- get this, Mr. Speaker -- "yet residents in Toronto may be impacted by two separate ones."

It means we could have a land transfer tax and we could have a bar tax. We're a little bit there; we're not already there. The mayor has said, "Okay, we may not implement the bar tax." Because there's no expressed opposition to this land transfer tax being imposed on people, we could be taxed there too. So now we've got two new taxing authorities within the City of Toronto Act that we didn't have. That has taxpayers in Toronto and, by extension of the precedent setting, the rest of Ontario -- we've got lots of taxpayers scratching their heads and hoping for the best. Thank goodness for Stephen Harper, because he's reducing our taxes when this government is raising them. As much as the McGuinty government would like to find creative new --

Interjections.

Ms. MacLeod: I can't ever make a statement in this chamber without them heckling me. I can't tell if they're trying to compliment me or trying to hurt my feelings. Thank goodness I've got Rosario Marchese. I know I've got him.

As much as the McGuinty Liberals would like to find creative new taxing powers and muddle the line between who is taking the tax dollars, the city or the province, there's one fundamental and undeniable truth: There is only one taxpayer. You know, I find it funny that they don't believe there's only one taxpayer. They're going to tax drinks, they're going to tax land, but they're going to tax everyone. It is we who are paying the taxes. It's the middle class. I'm not sure what members opposite have against the working middle class, but it's getting tougher to raise a family. It's over $2,000 more per year that they're taking out of my pocket since they've come to office.

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I'm sorry, Mr. Speaker. I got a little off track there. But we have to ensure that there's accountability. Since there are now new taxing powers in the city of Toronto and possibly throughout the rest of Ontario -- which, knowing these guys, they'd like to find new and inventive ways to create new taxing powers for everyone else and themselves --

Mr. Hardeman: If it moves, tax it.

Ms. MacLeod: Yes, exactly. If the issues I highlighted earlier are not fixed within the new Municipal Act, I fear that the residents of Ottawa will be paying more taxes.

The Real Property Association of Canada is so concerned with Bill 53 that it has posted on its website the following: "Any new taxes could seriously harm the competitiveness of the city and undo the benefits from reducing the commercial to residential tax ratio. This would ultimately result in a less competitive city, driving existing businesses further out of the core and prevent new businesses from coming to Toronto." I have to apologize to the Real Property Association of Canada because apparently their concerns weren't listened to. It's unbelievable.

In closing, I would like to conclude with what the Urban Development Institute of Ontario's Neil Rodgers stated at committee: "Through Bill 53, the province intends to modernize the existing legislation to `recognize that Toronto is a mature government, capable of exercising its powers in a responsible and accountable fashion.'

"During a comprehensive legal review of the bill, we have noted and are concerned that the bill lacks measures to ensure accountability and transparency respecting new and increased taxes, fees and charges. Specifically, the industry is troubled that the bill is void of any appeal mechanisms, particularly with respect to those matters whereby city council, a committee of council or its local board can pass bylaws that have a financial impact on the public and stakeholders. Nowhere in various sections of the bill, as noted in the brief, do we see any requirements for council or a committee of council to inform the public of a proposed or increased tax, fee or charge, or how the public might appeal a decision of council. Section 261 does permit the minister to make regulations; however, at this time, we have not seen such regulations, and so there are a number of questions regarding the proposed regulations. Will the regulations stipulate public notification requirements for a proposed tax fee or charge? Will the regulations stipulate public notification of a council, committee or local board decision with respect to a proposed tax, fee or charge? And in the absence of the Ontario Municipal Board being permitted to hear disputes, will the legislation stipulate which body will hear the appeal, presuming the province and the city believe that Toronto residents, landowners and business owners are entitled to a fair and just process?"

I reiterate some concerns highlighted earlier by my colleague from Oxford, who is concerned that the other side has not listened to other stakeholders and landowners, or even Toronto residents and taxpayers. In fact, they just listened to their own friends, who told them what they wanted to hear. I'm going to tell you something. They only listened basically to people who wanted more tax-increasing powers. They're not talking to the taxpayer, because the taxpayer is going to tell them, "We can't afford it any more. When we're not convinced that they're going to give us value for money, we have to ask questions."

Interjection.

Ms. MacLeod: There is a series of questions here from various stakeholders that weren't answered. There is a series of questions from people across Ontario, including in my city of Ottawa, who are concerned that this piece of legislation is going to actually impact them through the new Municipal Act. I'd like to know from the parliamentary secretary -- who has spent a good deal of his time, or my time, heckling me -- if he's going to stand up and assure me that a land transfer tax will not appear in the Municipal Act and if he will assure me that a bar tax will not appear in the Municipal Act, so the residents of Nepean-Carleton and the residents of the city of Ottawa will not be taxed further than they already are. They sent me here on March 30 because they oppose being taxed. They are tired of the new user fees. The people of Nepean-Carleton expect value for their dollar, and this piece of legislation, if it's sent down to the city of Ottawa through the new Municipal Act, is not at all going to impress upon them the value of their dollar. It's not going to impress upon them the fact that they want to be paying more taxes.

Interjections.

Ms. MacLeod: Again, I must get under their skin since I've been here, because --

The Acting Speaker: I'm sitting very close to the member for Nepean-Carleton and I'm having trouble hearing her. I would ask the government members to refrain from heckling. Member for Nepean-Carleton.

Ms. MacLeod: Now they're trying to say I speak too loud. You know what, Mr. Speaker? Here's the biggest thing I had to learn when I came here: The Liberals try to drown you out when you say something they don't want to hear. So I've learned to speak extra loud since I've been here so that they can hear me on the other side, because --

Interjections.

Ms. MacLeod: Listen, here we go again. They're doing the same thing. They don't want to hear that people in Ontario oppose their new creative ways to invent new taxes. The people in Ontario are tired. The song, "Hand in my Pocket" on the commercial is written about these guys. They're taking my money all the time. They're taking from other young families. I've got the highest-growth area in all of the city of Ottawa and I don't know how, if some of these taxing measures are introduced in the city of Ottawa --

Interjections.

Ms. MacLeod: There we go again. If these new taxes are introduced in the city of Ottawa --

Interjection.

The Acting Speaker: I would ask the member for Peterborough to come to order; I return to the member for Nepean-Carleton.

Ms. MacLeod: Mr. Speaker, this is the most activity we've had today, because I think the Liberals were a little upset yesterday over that massive defeat they suffered at the hands of the Conservatives last night, when we won on a motion to put an inquiry forward at Caledonia.

We're very happy, on this side, to be speaking for the people of Ontario, standing up for the people of Ontario. Today, I did that, the member from Oxford did that and the member from Parry Sound-Muskoka did that when we spoke to this legislation, Bill 53. In principle, we support a City of Toronto Act, but they should have made firm stands on taxation, and they did not.

Thank you very much for this opportunity to speak to this bill today. I want to again thank the member from Oxford for being such a great mentor to me, and to all of the people who spoke to this bill in committee.

The Acting Speaker: Questions and comments?

Mr. Rosario Marchese (Trinity-Spadina): I just want to congratulate the member from Nepean-Carleton for her vigorous speech and, I think, a very good speech attacking the Liberal government on what they are doing.