Legislative Assembly of Ontario

CONFLICT-OF-INTEREST GUIDELINES

CONTENTS

Monday 10 June 1991

Conflict-of-interest guidelines

Adjournment

STANDING COMMITTEE ON ADMINISTRATION OF JUSTICE

Chair: White, Drummond (Durham Centre NDP)

Vice-Chair: Morrow, Mark (Wentworth East NDP)

Carr, Gary (Oakville South PC)

Chiarelli, Robert (Ottawa West L)

Fletcher, Derek (Guelph NDP)

Gigantes, Evelyn (Ottawa Centre NDP)

Harnick, Charles (Willowdale PC)

Mathyssen, Irene (Middlesex NDP)

Mills, Gordon (Durham East NDP)

Poirier, Jean (Prescott and Russell L)

Sorbara, Gregory S. (York Centre L)

Winninger, David (London South NDP)

Clerk: Freedman, Lisa

Staff: Swift, Susan, Research Officer, Legislative Research Service

The committee met at 1555 in room 228.

CONFLICT-OF-INTEREST GUIDELINES

Resuming consideration of the Premier's conflict-of-interest guidelines.

The Chair: I would like to call the meeting to order. We had finished section 15, page 6 of Susan's report in regard to conflict of interest. We had gone down to the committee discussion and recommendation of this question of guidelines and legislation.

Mr Morrow: If I may make a small clarification on this, did we not read through all of page 7 when I was in the chair last, Mr Chair, and then we were just going into recommendations after page 7?

The Chair: Yes, discussion and recommendations from the committee on page 8?

Ms Gigantes: Mr Chair, I am willing to lead off discussion on this section. It appears to me that the whole point of looking at this matter at this stage is to make sure that we have conflict-of-interest legislation which is going to be an improvement on the existing legislation. I think it would be useful for us to take that as an assumption, if that is agreeable to the committee, and then talk about, flowing out of that, what structure the legislation should provide for its administration.

I am quite content to see the same structure as currently applies in the Members' Conflict of Interest Act, and that would mean essentially that the commissioner would have a widened mandate, because our conflict-of-interest legislation would be wider. The commissioner would have the responsibility for taking up any requests for inquiries under the act, the responsibility for reporting to the Legislature, and then the Legislature would determine what happens.

It seems to me to be not fruitful to spend an extended period of time talking about the role of the Premier in this. The Parliament will decide what to do with the report, as Parliament does, if my proposal is followed, under many other acts of a similar kind, for example, the Ombudsman Act and the existing conflict of interest act, and the Premier would be obviously a key person in that Parliament in ultimately deciding what happened on a given matter. But I think the reporting through Parliament and a decision by Parliament gives the Premier as much leeway as he or she may need in the future to decide how to treat a matter on which the commissioner has reported, and the mechanism that is currently in the act would provide Parliament with the independent reporting function that people have felt important.

I would suggest as a start for discussion that we think about those notions.

Mr Harnick: It is interesting to note in the paper there was only one witness who suggested that the guidelines be incorporated into legislation. The overwhelming weight of opinion was indecision about the effectiveness of that matter, or from the person who knows more about it than anybody else and the person who is most independent in his views on this matter -- and I am referring to Chief Justice Evans -- the opinion was that we not make this part of the legislation. I certainly hear what Ms Gigantes is saying, and we did have some information discussions. I would point out to her the provisions of section 16 of the Members' Conflict of Interest Act, 1988, and I will recite that section so that it is clear to everyone here.

It states:

"(1) Upon receiving a request under section 15, and on giving the member concerned reasonable notice, the commissioner may conduct an inquiry.

"(2) Where the request for an opinion is made under subsection 15(1) or (2), the commissioner may elect to exercise the powers of a commission under parts I and II of the Public Inquiries Act, in which case those parts apply to the inquiry as if it were an inquiry under that act.

"(3) Where the request for an opinion is made under subsection 15 (1) or (2), the commissioner shall report his or her opinion to the Speaker of the assembly who shall cause the report to be laid before the assembly if it is in session or, if not, at the next session.

"(4) Where the request for an opinion is made under subsection 15(3), the commissioner shall report his or her opinion to the clerk of the executive council."

Then we go on to section 17:

"(1) Where the commissioner conducts an inquiry under parts I and II of the Public Inquiries Act for the purposes of subsection 15(1) or (2) and finds that the member has contravened section 3, 4, 6, 7, 8 or 9, or has refused to file a disclosure statement within the time provided by section 12, the commissioner may recommend in the report that is laid before the assembly,

"(a) that the member be reprimanded;

"(b) that the member's seat be declared vacant until an election is held in the member's electoral district.

"(2) The assembly shall consider the commissioner's report and respond to it as subsection (3) provides within six months of the day the report is laid before the assembly.

"(3) The assembly may order the imposition of the recommendation of the commissioner under subsection (1) or may reject the recommendation, and sections 45 and 48 of the Legislative Assembly Act apply in the same manner as to a contempt of the assembly, except the power to further inquire into the contravention or to impose a punishment other than the one recommended."

So it is not quite as simple as having an act that is left to the discretion of the Premier. If this is really going to work, then if you want to make it legislation the option has got to be there that it be left totally in the hands of the commissioner, not in the hands of the Premier. If the guidelines are to be left in the hands of the Premier, then I submit they should be left in his hands as guidelines only. If the Premier wants to maintain the power to make the decision at the end of the day, then the guidelines should be left as guidelines so they can be used however the Premier of the day wants to use them.

Some premiers of the day may elect to have different guidelines for their ministers. We heard some evidence that the guidelines that were imposed by Premier Davis were more stringent than these guidelines, yet they were guidelines only and they worked as guidelines. If at the end of the day the Premier wants to have his cake and eat it too, then they should be left only as guidelines. If you want them to become law, then it is incumbent to remain consistent and not only make them law but leave them to the Conflict of Interest Commissioner to make the final decision, as opposed to the Premier.

I believe that the reason the government members seem to be opting to make these law is quite simply because a couple of cabinet ministers, all of whom are rookie cabinet ministers -- not cabinet ministers with any experience, but the rookie cabinet ministers who came in here without exception were of the belief that public perception is what should make these guidelines law, and nothing more.

We heard the evidence of experienced cabinet ministers, and we also heard the evidence of the independent conflict commissioner, who said that those in public life are by and large good, honourable people. In fact, not a single person who came and gave evidence before this committee could indicate any issues in which there was an abuse of a minister's responsibilities and any gain that he attained because of that abuse. No one could point to one single incident where these primarily divestiture and other guidelines were necessary.

There had never been an instance in the past that anyone in modern times could recall where the conflict-of-interest rules, either in the Conservative government pre-1985 or in the Liberal and NDP marriage between 1985 and 1987 and the Liberal government from 1987 to 1990 would have been necessary. No one could name a single incident. Yet there was, on the part of the rookie cabinet ministers who came in here, a perceived notion that these guidelines had to become law because it was the public's perception that mattered. It was not the fact that there had been no incidents where guidelines like these were necessary; it was this perceived notion.

I point out that the conflict commissioner, who has been fully aware of the conflict-of-interest laws in this province and has administered the Members' Conflict of Interest Act, said that these guidelines were not necessary -- and certainly were not necessary to become law -- to do any more than the conflict of interest act was already doing.Iif these guidelines do become law, and they should not, they should at least be implemented without the Premier being the final arbiter. It should be the conflict commissioner who is the final arbiter.

I point out as well for members of the committee the evidence that we heard about divestment: We heard that the requirement of divestiture is draconian and unnecessary; it is not a realistic option; if divestiture is adopted there should be an exception for those corporations or businesses that are not likely to become involved with government; if divestiture is adopted it should also apply to pension plans; some exceptions should be made for small family businesses; divestiture is not appropriate because it cannot apply to non-economic matters such as political interests; divestiture is wrong; instead, disclosure should be strengthened: focus on complete disclosure with severe penalties, including a financial penalty, in addition to losing one's seat.

The words "could appear to cause a conflict of interest" in section 15(a) are vague and subjective. The term "business interest" should be defined to exclude investments. The terms "appropriate undertaking" and "not consistent with the public interest" need to be clarified. Those criticisms are really a scathing epitaph of section 15 of the conflict guidelines.

I put it to you people that if you are going to decide to make this law, which obviously you are going to do because the marching orders have been given, at least clean it up so that it reads like real legislation, so it is not this nonsense that has caused this government sleepless nights. Surely you are not going to make this law with the knowledge that every witness coming in here save and except for one, who has said that this section is a proper section in the form that it now appears in --

Ms Gigantes: Some simply did not comment.

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Mr Harnick: That is probably because they did not know. But of all those who commented, I point out to Mrs Gigantes, only one had anything positive to say about the divestiture sections. Surely if you are going to make these guidelines law, you cannot make them law in the form in which they appear, because they are just incomplete. If this committee is supposed to be looking at these guidelines with a view to whether these guidelines should become law, the answer is that they should not if you are going to listen to the evidence that came before this committee. If you want to ignore that because you have your marching orders to do it, go ahead. It is your sleepless nights. I am quite sure that the next government, and it will not be you, is going to get rid of these anyway.

Mr Sorbara: Let's see now, it will not be the Tories, so --

Mr Morrow: It will not be the Tories and it will not be the Liberals.

Mr Harnick: I did not say that. But surely if you are considering making these law, do not do it in the abstract. Send it back and get some decent legislation that people can live with and that defines who is going to make the decisions at the end of the day. I urge you not to just take your marching orders from upstairs and from whatever minister is calling the shots here, but to take a look at what the witnesses said, so that all the time we spent here asking them questions and compiling their answers and doing the summaries has not been totally wasted. Surely if you do that, you cannot say you want this conflict-of-interest guideline material to become law.

Mr Sorbara: What can I say? It is great to be back. I am sorry we are still discussing these guidelines, but it is good to be back on the committee. Just to explain to you in the chair, sir, I have been called away by my party to participate in hearings of our party to consider the recent budget of the government. It is not all, all, all bad, I report, at least from the southwest, where I was, and the north. But it is pretty bad; it does not look good at all. Some of the concern was expressed in terms I had not heard in my six years in politics. Particularly the fear --

Ms Gigantes: Is this in order, Mr Chair?

Mr Sorbara: Totally in order.

The Chair: Mr Sorbara, could you refer perhaps to the question that we are discussing.

Mr Sorbara: I think my friend the member from Ottawa Centre is a little bit touchy about our inappropriate interjections in the House today. The reason I was making those comments is because I just wanted to say a little bit about listening and not listening. My own sense in this committee considering these guidelines is that all the decisions have been made elsewhere and the members of the committee are not really very interested in considering the evidence we heard or expressing a personal view about whether we should be incorporating these proposals into legislation or keeping them in guidelines.

So I guess I am just talking for the record in saying I believe very strongly that it would be ill advised to recommend to the government that it bring back legislation if that legislation requires ministers of the crown to divest themselves of the business interests and the assets that they have.

I argue that case from two perspectives. The first is based on the evidence we heard before this committee. We heard from only one real expert, Chief Justice Gregory Evans, who has been dealing with the issue of conflict of interest for quite some time on behalf of the government of Ontario. He said requiring a minister to divest of his interests is draconian and he said no other jurisdiction in the world had such measures.

Why is it draconian? I think probably members of this committee should ask themselves that question honestly. Why did Gregory Evans describe the proposal that ministers be required to divest themselves of their business interests and assets as draconian? I wonder if any members have asked themselves that question, because if you ask yourselves the question, then quickly you find that what you are doing when you put that into guidelines or legislation is basically disqualifying anyone with business interests or assets from participating as a member of the executive council.

This should be of great interest to my friend the member for Ottawa Centre, because here she is sitting on a legislative committee and only two months ago she was a member of the executive council. The kind of system that we have in Ontario unfortunately, and I say this with great honesty, required her to step down from the executive council, at least for a period of time. I expect she will be back there, probably sooner rather than later, but those are the niceties of the way in which politics are undertaken in this province.

I ask my friend Mr Winninger, are you a lawyer?

Mr Winninger: Is that a rhetorical question?

Mr Sorbara: No, it is not. I am really interested because the remarks I am about to make need the understanding of a legal mind to follow very, very clearly. So I ask, in all sincerity, you are a lawyer, are you not, sir?

Mr Winninger: And I ask, is that a rhetorical question?

Mr Sorbara: No, it is not. It is a question of substance. You do not have to answer. You are not on the witness stand.

Mr Winninger: In that case, I am not a practising lawyer, because I have divested myself of my law practice.

Mr Sorbara: But you are still a member of the Law Society of Upper Canada.

Mr Winninger: No, I am not. I do not pay dues to the law society. I am not a member of the law society.

Mr Sorbara: But you had been, up until your election, a practising lawyer.

Mr Winninger: Yes, that part is true. Is this cross-examination?

Mr Sorbara: No, not at all.

The Chair: Mr Winninger, I believe, was to have been one of our witnesses. However, we have not the opportunity to examine him in any detail today.

Mr Sorbara: The only reason I mentioned that is because if Mr Winninger has ever practised law, he will understand what is involved in the legal ramifications of divesting of a business interest, particularly within the terms of the guidelines as presented; that is, sale within, say, 60, 90 or even 120 days, or whatever. He will understand, for example, that if I own an asset that has an adjusted cost base of say $100,000 --

Mr Winninger: Try a few million.

The Chair: Allow Mr Sorbara to continue.

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Mr Sorbara: If a member has an asset with an adjusted cost base of $100,000 and a current market value of, let's say, $500,000, if a member is required to sell that, he will incur very substantial tax liabilities in the form of a capital gains tax, which would be 25% of the difference between $500,000 and $100,000, or $400,000, and the tax liability would be one quarter of that, or $100,000. So right away, if you sell your asset you incur that tax liability.

I think it is fair that we have those capital gains taxes, but oftentimes that is the only ramification of a quick sale of an asset of that sort. You do not get cash from the deal but the tax collector wants his tax right away. So if you cannot raise the money to pay the taxes you cannot even sell the asset, because generally what you are taking back is security in the form of a mortgage or a promise to pay. That is all the more so if, as is likely, the asset that is owned is not full and complete ownership but, say, the ownership of 25% of an asset worth, say, $1 million.

My friend Mr Winninger, if no one else on the committee, will understand that the only realistic purchaser of the 25% interest in that business is the 75% owners, and often that is a collection of 2, 3, 4, 10 or 20 people. Mostly those partners are uninterested in buying the asset. Mostly those partners do not have the cash available to buy the asset, and they will tell you that if you want to practise politics, do not make it their problem. They are not interested in buying the asset.

I use those examples just to say that the suggestion in the Premier's guidelines that if you have a business interest you should sell it is so inappropriate that to actually put that in legislation would be very foolish. I am wondering if this committee is really going to take that into consideration. If they are not and if they are going to do that -- and my friend from Guelph is nodding his head, suggesting that they are just going to go ahead -- I guess that is fine. That will have to be repealed when this government is finally voted out of office. But it would be very disappointing.

Just to use some examples, Franklin Delano Roosevelt would not have been able to comply with the Premier's guidelines but probably Richard Nixon would have. Clearly a Trudeau would not have been able to comply with this government's guidelines, but probably Joe Clark would have. It does not make a whit of difference in other words, Mr Chairman, as to the quality of the government you get that you would suggest someone would have to sell his interest in order to qualify for the executive council under Bob Rae. But the fact is, who in their right mind would do it?

Every minister knows you are liable to make a mistake of the kind made by the member from Ottawa Centre and you have to step down, and what is left? I got to spend a month in Bob Rae's cabinet, I sold everything I had, I took a beating, the market was not good and then I made a mistake. It was an honest mistake but politics requires me to step down. Give me a break. Who in their right mind would do that? If you own a small manufacturing concern or if you own a small interest in property, who would do that for the opportunity to serve in the cabinet?

Gregory Evans when he testified here before this committee had it right; no one. He said what you are liable to get is a bunch of ex-inmates from Millhaven and Penetang. I am not sure that was put terribly delicately but I am quoting the commissioner. The fact is that you know if you do that, you suggest to many people who could contribute effectively in the executive council of a province like Ontario that you are basically closing the door to their participation.

I know the member for Middlesex is not really interested in this and this is my --

Mrs Mathyssen: I am fascinated, Mr Sorbara, but I am having a little bit of trouble imagining you spending one month in a Bob Rae government.

The Chair: Mr Sorbara, are you finished your comments?

Mr Sorbara: No, I am not. I am not finished --

The Chair: Please, please do so, sir.

Mr Winninger: We are extending the guidelines to cover leadership candidates.

Mr Sorbara: You probably would like to do that but it does not matter. I have had now some six years and a little bit of experience here and one thing that I have not found, I tell my friend the member for London South, in six years of doing this business is a member who is fundamentally here to line his or her own pocket. I have seen people with very large egos, I have seen people who just throw themselves at this work with all of the addiction of a workaholic, but I have never seen anyone who is here to make himself or herself richer or to further his or her private interests.

I have never seen that. I do not see that in the 74 members who now make up your caucus, I do not see it in any of your ministers, I do not see any of them trying to figure out how they can personally benefit from the work that they do. I did not see that in the cabinet that I was a part of. I did not see that in any of my caucus members. I did not see that in the opposition members who were part of the Legislature. In fact, I have never seen it.

I imagine that someplace in our history there have been a few scoundrels. I do not think these guidelines or the casting of legislation around these guidelines will dampen the enthusiasm of a scoundrel one single bit. If you are going to cheat, if you are going to use your public trust to further your private interests, you are going to do it.

I have seen Bob Rae make the wildest of allegations about cabinet ministers in this regard, that they were trying to further their private interests, and I have seen our guys go down that path a little bit as well in respect of some of the incumbent cabinet ministers, not as aggressively, by the way, as Bob Rae did when he was Leader of the Opposition in respect particularly of a couple of our members, but they were alive then and they are alive now.

Most people when they get elected to this place generally want to serve the public interest and set aside their private interests. Most of us, I think, forgo wages and salaries that are significantly above what we make here as MPPs or ministers. Most forgo, I think, very substantially. That is the case in our caucus and I think probably it is in the case of the Progressive Conservative caucus and the government caucus as well.

Mr Winninger, for example, has been a lawyer. If he decided to go back to the practice of law, he could probably make substantially more than he does as an MPP. He might choose to practise in an area where the salaries are not very good, but if he decided to apply himself to that practice, he would make substantially more than he is making as an MPP.

We say now we are going to put into place guidelines and make them legislation. I think it is so crassly political. I know that Bob Rae in opposition had to advocate this system of divesting. I understood why he would do that. But it was interesting the degree to which he had to backtrack when a few ministers and parliamentary assistants could not sell interests that they had. Poor Anthony Perruzza, the member for Downsview, who had some small interest in a piece of property. The suggestion now is that he is going to have to sell it. It is so stupid to consider that Perruzza would have to sell that interest in order to continue to perform his duties as a parliamentary assistant of something or other.

Mr Harnick: On a point of order, Mr Chairman: It is interesting that Mr Fletcher makes the comment about poor Mr Perruzza that he will get that interest back as soon as this job is over anyway. It goes to show you how significant these conflict-of-interest guidelines really are.

The Chair: Excuse me. I do not think that is a point of order.

Mr Harnick: No, it probably is not, but I just wanted to get that out.

Mr Fletcher: Excuse me, Mr Chairman. Somebody is reading into the record something that I do not remember saying.

Mr Sorbara: They say memories are very short in politics. I guess Mr Fletcher provides an example of the shortest memory in the history of this Parliament if he has forgotten so quickly. It was about a 15-second loss of memory.

Anyway, it does not matter one way or the other whether he gets it back or whether he does not get it back. It is all politics. To suggest that people should sell their interest so that they can serve the people of this province is so stupid that it defies serious consideration.

Bob Rae can put it in guidelines because when he got elected he made a career out of accusing people of violating the public trust. For five years in this Legislature, he made a career out of that. He destroyed reputations on the basis that people were cheating and were violating the public trust. Ask Chaviva Hosek. Ask Joan Smith. Ask Elinor Caplan. Ask René Fontaine. Ask the member for Ottawa Centre. She experienced part of it. He made a career out of it, so when he got here he had to portray himself as holier than thou. "All of my ministers" --

The Chair: Mr Sorbara, the microphone system is working.

Mr Sorbara: Well, I get mad about it because these are my friends. Evelyn Gigantes witnessed it.

Ms Gigantes: You are no friend of mine.

Mr Winninger: With friends like that, who needs enemies?

Mr Sorbara: Ask Steven Mahoney about the allegation.

I think that one day we are going to stop being so crassly political with people's lives in this place. I will tell you one thing. When our government is re-elected, if you put this into legislation, my sense is that we will repeal it, that we will ask people with significant interests to put those interests aside, to place them beyond their control and to dedicate themselves fully to the public concern. But to suggest that you would have to, in the style of St Francis of Assisi, sell all you have to serve Bob Rae is so crassly political and so designed simply to justify the kind of outrages that the now Premier undertook during his time as opposition leader that above all it is just sad.

We had one witness of substance before this committee who had no political interest whatever in the outcome of our deliberations and that was the Conflict of Interest Commissioner, and he said that it was draconian and unnecessary.

I want to predict that this committee will probably decide that this should be in legislation. We are going to disagree with that and we will have a dissenting opinion, a minority report, to accompany this report if that is what they choose to do. But that is neither here nor there. I do not think many will read nor will many care, but the fact is we have an obligation to do that, simply to say the government is wrong in what it is considering.

I look forward to further consideration of this section. I think this is one of the most important in the report. I think the work that has been done in the commentary is sufficient and appropriate and reflects what we have heard. I would simply ask members of the committee to set aside the orders they have received from the people who are running this place and to consider making a substantive recommendation, that if the Premier chooses to implement these guidelines, that is fine, but he ought not to make it the law of Ontario.

Ms Gigantes: Mr Chair, would you give me guidance? Would it be appropriate to attempt to focus our discussion by putting a motion? I am prepared to put a motion.

I move that the proposed guidelines be incorporated into the Members' Conflict of Interest Act and that the mechanism of administration --

Mr Harnick: On a point of order, Mr Chairman: Does this mean that we are finished discussing?

Ms Gigantes: No. I am putting a motion to help focus our discussion.

The Chair: Ms Gigantes suggested a motion around which discussion can hang.

Ms Gigantes moves that the proposed guidelines be incorporated into the Members' Conflict of Interest Act and that the mechanism of administration be the same as is currently in the act, ie, through report to the Legislature by the conflict commissioner in the ways suggested by the act.

Mr Harnick: With respect to the motion --

Ms Gigantes: Do I get to speak to it?

The Chair: I believe you do.

Mr Harnick: Can I say something about the form of the motion?

The Chair: Ms Gigantes?

Ms Gigantes: Mr Chair, did you rule on Mr Harnick's request?

The Chair: It was not a point of order and you have the floor.

Ms Gigantes: I think it might be considered a point of order, but I am quite prepared to speak to the motion as it is.

It does attempt to combine two items, namely, one, the direction in which we are going, in other words towards legislation, and two, the method of administration being proposed, which is the same as in the existing act.

If I could just take a few moments and go back over what our two friends from the opposition parties have been saying, if we boil it down, Mr Sorbara has been saying the guidelines propose something that is inconvenient, something that is messy and, in the end, something that is unnecessary. Further, from the point of view of the party he represents on this committee, were it to come to power, it would repeal such legislation. Mr Harnick is saying, I think most simply, that the content of the guidelines is not necessary, and from both we have heard that there has been only one witness who spoke in favour of having the guidelines incorporated into the existing act.

I think that is really not an adequate representation of the testimony that was before this committee. I count five ministers of the crown who came before this committee and talked about the purpose of the guidelines in a way that I, for one, read clearly as establishing a legal reference. I think those are significant contributions, and if others disagreed, it is a matter of difference of opinion.

I, for one, quite the opposite of what Mr Sorbara has suggested, felt that I had urged Mr Rae on this matter in a discussion many months ago, long before the election. I had a chat with him when he visited Ottawa, and he said to me, "What do you think we ought to be doing?" I said, "One of the things I really think is that the public feels it is necessary to have stronger conflict-of-interest legislation and to clean up the political apparatus, both at the national level and at the provincial level," and for all the protestations of members' offices, in fact, there have been some serious difficulties with political conflict of interest.

Mr Harnick: Name one.

Ms Gigantes: I do not want to get into cases, but there have been.

Mr Harnick: Name one.

Ms Gigantes: No. We are not going to get into that silliness.

Mr Harnick: Name one.

The Chair: Mr Harnick, please.

Ms Gigantes: The mechanism that we are proposing to use and I am proposing to use is the one that exists. It seems to have worked well as a mechanism. Now what the members opposite are complaining about is that they do not like the content which will be carried by that mechanism. It is too tough for them. It is too messy for those with business interests. It is too inconvenient, and above all, they say it is unnecessary. Well, I think that is their opinion. I do not believe that.

Mr Sorbara: Just a point of order if I might, Mr Chair.

Ms Gigantes: Further, we have talked about --

The Chair: Mr Sorbara, is this a point of order?

Mr Sorbara: Yes. Unfortunately, the member for Ottawa Centre is suggesting I indicated that the guidelines are messy and inconvenient. I think that if there were a review made of Hansard, you would find, sir, that is not --

The Chair: The member for Ottawa Centre did not name you, sir.

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Mr Sorbara: The point of order that I want to make is this. A motion was moved by the member for Ottawa Centre. I am not sure if you ruled whether that is in order, but if it is I would just like to know, as we go through the report, whether in each case where the report provides for committee discussion and recommendations we are going to be proceeding to determine what is said in those sections by way of motion from the government or from others, or whether there is going to be a draft prepared by our researcher and submitted for consideration of the members. If that is the case, I would suggest that we make a decision about that so each of us could have motions prepared section by section as we come here. This is the first time I have dealt with a report of this sort, so I am really looking for direction from you, sir, on how we are going to order our business and whether we are going to proceed by way of motion and votes on the motions that are made or whether we are going to have --

The Chair: That has been the way we have proceeded, by way of motion as a final achievement in terms of the consensus of the committee. I think you are probably right; if you are able to have ready on paper some preparation of ideas or thoughts around the substance of a particular section, that would probably be preferable.

Mr Sorbara: Yes, but I just --

The Chair: I believe that the member for Ottawa Centre has the floor still, and I think her motion is proper.

Mr Sorbara: Well, if that is the case --

Interjection.

Mr Sorbara: If I might just finish, Mr Harnick, would it not be appropriate, if the government is proposing to proceed in that way -- perhaps appropriate is not the right word, but as a matter of courtesy -- to have copies of the motion available for other members.

The Chair: It is being copied as we speak.

Mr Sorbara: Right. Do you want to have an adjournment until those are available?

Mr Harnick: On a point of order, Mr Chairman: I have become a little confused --

Ms Gigantes: Is this a different point of order? I wish to speak to Mr Sorbara's point of order.

Mr Harnick: It is very much part and parcel of what he said. I have become confused in that I believe what Mr Sorbara was asking was, if it will be the opinion of this committee that these guidelines are going to become law, will we then be having the opportunity to go through the guidelines clause by clause to propose amendments to the guidelines? Is that what Mr Sorbara was saying? Maybe Mr Sorbara should clarify that, because he would know best.

Ms Gigantes: Mr Chairman, on a point of order: In part I wish to speak to a couple of the items which have been raised. I think I did indicate earlier that the purpose of the motion, in my view, was to focus the discussion. We have come to a section of the report which I think we all, on all sides, feel is critical to the shape of the report. It is one of the principles that we have to decide, and I have put forward a motion which I hope will help us decide that. As to what other members wish to do in terms of voting on it, perhaps if it is incorporated into the report, further elaborated by our staff and acceptable to at least the majority on this committee, if they then still have strong objections, presumably they can take action afterward.

On the question of going through item by item, I do not look upon this as a drafting exercise that we are into here. We are into the writing of a report; we are into deciding the basic principles that we would like to see reported for changes in the legislation, if changes to the legislation are what we adopt. I think as we go through certain sections, if people want to make motions on those sections, fine, but I do not think we have to invent the report as we go. I do think we can count on the staff, as we have here earlier, to help us draft the report based on the principles that we lay out and the arguments that we use around those principles. Can I continue now?

The Chair: Please do.

Mr Sorbara: Just a final word on the point of order, Mr Chairman.

The Chair: I thought that the point of order had already been thoroughly discussed, and Ms Gigantes has the floor.

Mr Harnick: I personally am still waiting for clarification of Mr Sorbara's point of order, which I thought I had asked for. I am hoping Mr Sorbara will elaborate.

Mr Sorbara: Then with the permission of the Chair --

Mr Winninger: Anything to play for time.

Mr Harnick: No, I asked. You guys are the ones in a hurry. I say do it right, but you guys just want to do it. If we are here to do this quickly, then why bother? You guys have seven people on the committee. Just put up your hands and then away we go. If you people want it to be done properly --

The Chair: Could we have a little bit of order here for the moment?

Mr Harnick: If you want to impute a false motive to everything that happens here, because you are so self-righteous, the bunch of you --

The Chair: Mr Harnick, please, we are trying to conduct a little business today. You were asking about Mr Sorbara's point of order, which had to do with the issue of what it was we were discussing. We had discussed that, I believe, in the sense that we were clearly looking at each section and coming up with recommendations, and Ms Gigantes had a motion in regard to this particular section. Ms Gigantes has the floor.

Ms Gigantes: I will wrap up very briefly. The final point I want to mention is this question raised by Mr Harnick of who is the final arbiter and what difference that makes to the approach he is willing to take on this whole question of conflict of interest.

In the conflict of interest act as we have it now, the mechanism is pretty straightforward. By various means, the commissioner can become aware of the need. He can be requested to meet the need for an investigation of a potential conflict of interest under the act. He has powers to investigate which are granted under the act, and they fall in line with the Public Inquiries Act.

When he has finished his investigation, depending on the nature of the investigation he has undertaken, he can report in various ways. In major matters, it is clear from the act that he would be reporting a major report to the Legislature. In this case, the final arbiter is the Legislature, as it is in so many of the other areas in which we have set up ways of monitoring and administering what we consider to be fair and progressive kinds of political administration in this province.

The formula is now a relatively standard one. It has been developed over the last 15 or 20 years, and I think on the whole it has served us well. I know of no particular complaints under the existing act. If either of the other parties do, perhaps we should consider them, but the final arbiter on major matters will obviously be the Legislature.

The Premier is a member of the Legislature, and he or she will take a personal position which will have more or less effect among the various other members of the Legislature. Some of that may be overwhelmingly determined by party, and in other cases there may be different points of view from within parties. That has been the case before on other matters and will be again, I am sure, in the future.

I think the mechanism that is provided here is one that clearly identifies where the final arbitration occurs on major matters, and I think, given the fact that it has worked well, that is one we should continue to use in the act as we incorporate a wider mandate for the commissioners' work.

The Chair: Mr Carr?

Mr Carr: Yes, thanks, Mr Chair. I was --

Mr Mills: Are you with it?

Mr Carr: That is what I am just thinking.

Interjection: We are now back on the motion.

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Mr Carr: The only point I wanted to put in about this goes back to the part about divestment. As we look at the act, I go back to what the conflict commissioner said about the whole situation, which was that the requirement of divestment is draconian. The big concern I have when we incorporate these guidelines into the law is what he said, going way back during his testimony, and I am quoting now from Susan's fine summary of that day, "The proposed divestment rules will make it more difficult for all political parties to continue to recruit good candidates, and especially from among those who have accumulated assets, done well in their communities and are making a good living."

I think one of the things I was little bit surprised at when I came to the Legislature is how precarious your terms are in cabinet, and for various reasons -- the Chair quit on us; I talk, he leaves -- how difficult it is to remain in cabinet or get into cabinet. I was a little bit surprised at how easy it is to be removed from cabinet, and you can see an example of one of the members here, but also at a situation something like Mr Kormos's, where he is removed from his position in cabinet.

I was also a little surprised when we heard some of the testimony from some of the previous cabinet ministers. It was over a situation one of them related, that one day they were actually having a cabinet meeting, and by the time they had finished the cabinet meeting, that individual, who was participating in the cabinet meeting, was gone within a half-hour: one minute in the cabinet, the next minute completely gone. It was Hart of the previous administration. When you look at the amount of time it would take some of them to divest, that divestment within the time frame of the guidelines, as Judge Evans was talking about, may also result in the significant loss of value of an asset and result in what he called a distress sale.

What I am concerned about is that there are not enough people now willing to throw their hat in the ring and get into this game, unless they become so upset with what is going on that they decide to do it. But I am worried, as the judge was obviously, that a lot of people are going to take a look at it and say, "No, I am not going to give up my interest in the corner store," or whatever it may be.

I was particularly interested when the judge said that divestment of certain assets may be necessary as a practical matter, but complete divestment is not a realistic option. We are asking people to jump into a situation, potentially give up what has been their livelihood and jump into the political game when the reward for getting in and getting into cabinet and really having some decision-making power is at best very precarious.

I just wanted to add those points, because as we sit and reflect, we should not only be thinking about ourselves, because quite frankly the three cabinet ministers who came in, Ms Lankin, Mr Wildman and Mr Laughren, all said they did not have anything anyway. I found it very strange that they came in and said: "Boy, divestment is the way we should go. We've got to divest, but I don't have anything myself." If we had been able to bring in some who were able to sit down and talk about it -- and I am talking about putting in a preliminary when all three of them came in, and I can understand why they did. They did not want to have anybody who possibly had it.

But in our first go-around they brought in the Chairman of Management Board who is now the Health Minister, the Treasurer and also Mr Wildman, whom everybody knows for having been around here, of course. They brought in people who said, "Yes, divestment is the way to go, but I don't have anything to divest." If you had somebody who was able to come in and say, "I personally am going to lose a lot of money by divesting," then I think it would have carried a little bit more weight with the public. But to come in and say, "We're going to do this because of some perceived problems in the public's mind, but don't worry about it because I don't personally have anything to lose," I think there certainly would have been a little more credibility had somebody come in who had a great deal to lose.

When we heard this testimony, going way back, I think the big fear is that they sent some of the ones who are probably the best speakers and who would not get into trouble and say something wrong during this period of time. But if they had been able to send in somebody who said, "I've had this business but I really believe divestment should happen because I believe in it," then there would be some credibility. Poor Bud, he even laughed about it, as did the Treasurer. They even joked, if you remember correctly, about how poor they were. They laughed and made light of it. Here we are saying to the public, "Boy, we're going to come in with these tough guidelines. We're going to ask everybody to divest," but then the people who are going to be affected, it is not going to affect them.

I think we sometimes have to look past the present circumstances of some of the cabinet ministers and look to the future, take a look at somebody who may own a small business who is going to say: "No, that's it. I'm not going to get involved in the political process because I'm not going to give up all my hard-earned dollars and everything I've worked for." Remember, when you start a business you do give up a lot. I had one of the chaps in who owns a small brokerage company, auto insurance, an insurance broker, and he said to me, "The thing is, when you start a business like this and it's just a fairly small office, what you give up is not just the time -- because you give up the time away from your children that you never get back -- it's not just the money, but it's the whole way of life that you put into a business." I think that is true.

What we are saying now is that we are going to take a part of the people of this province and say, "No, you can't get involved in the political process because you're going to have to give up something so personal." Although, as Mr Wildman said, the thing he gave up that was worth more to him than anything else was time with his children. Actually, I think members will remember he got rather emotional because he said, "I've spent so much time and that is something I'll never get back," and I guess his kids are fairly old now.

We are asking people to give up time with their families, particularly someone like him who spends so much time travelling from a distance. You are expected to give up all your financial rewards that you have worked for, completely divest and, as the judge said, do so at a distress sale where you are not even going to get fair value for what you have because of the fact there is the time limit.

I think what we should attempt to do is take a look at somebody who is trying to look at it from a non-political standpoint, who is trying to be helpful in some of his proposals and is saying, "No, we don't need to have complete divestment for this thing to work." As we sit back and reflect, I think we should not look at this current crop of cabinet ministers who come in and say, "Boy, divestment is the way to go but I don't have anything to divest." It just seems a little bit strange to me that we would take some of those comments and listen to them when in fact it is rather ironic.

Those are a couple of the points I thought I would add.

The Vice-Chair: I would like to remind the members at this time that there is a motion on the floor and can we please speak to the motion.

Mr Winninger: It seems that the opposition to the guidelines becoming part of the legislation is directly proportionate to the level of accumulated wealth that the member who challenges seems to have, including the guidelines in the legislation. I would like to clarify, if I may, for the member.

Mr Sorbara: On a very brief point of order, Mr Chair: There is a motion on the floor. My understanding was that there is a rotation between parties. The first speaker was Ms Gigantes on her motion. The second speaker was Mr Carr. I would think that if we are going on rotation, the next speaker would have been from the official opposition, that is, Mr Poirier or myself. Are we not going in rotation?

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Mr Winninger: The speakers' list was read earlier and there was no quarrel with the order.

The Vice-Chair: Mr Sorbara, I am going by the speakers' list, which I understand has been read. There will be rotation; no one party will have two speakers.

Mr Sorbara: Can I just get a better explanation of this? Are you somehow ruling that we are not speaking in rotation?

The Vice-Chair: You are up next, Mr Sorbara, if you do not mind.

Mr Sorbara: No, no. I do not care if I am next or ever. I am just trying to determine whether for some reason we have abandoned the system of speaking in rotation. Somehow you suggested at the end of your comments --

The Vice-Chair: My understanding is the speaking order has been read out, also that it is very casual and the Chair does try to alternate. Now we have alternated between the third party and the government side, and then we will come back to the official opposition, being very fair and alternating as we best can.

Mr Harnick: On a point of order, Mr Chairman: I think I heard you say that each party will be allowed to have one speaker speak to the motion. Does that mean that I am not able to speak to the motion?

The Vice-Chair: No. You did not understand what I was saying.

Mr Sorbara: Neither did I.

The Vice-Chair: What I am trying to say is that no party of the three will have two speakers back to back.

Mr Harnick: Oh, I see.

The Vice-Chair: We will move it around. Mr Winninger.

Mr Winninger: It is nice to have the floor again. I just want to clarify for the member for York Centre, who was delving into the esoteric area of the implications of income tax law on dispositions that members might be required to make when they become parliamentary assistants or even cabinet ministers. A suggestion was made that needs to be corrected that if a particular member sold a tangible asset and realized a gain from that, one quarter of that gain would be taxable, notwithstanding, as the member for York Centre pointed out, that there may be a mortgage on the property that goes back to the vendor of the asset.

I hasten to point out to the member for York Centre, having got my hands on the Income Tax Act of Canada, that section 40(1)(a)(iii)(C) provides that one may deduct from his capital gain "the lesser of a reasonable amount as a reserve in respect of such of the proceeds of disposition of the property that are not due to him until after the end of the year as may reasonably be regarded as a portion of the amount determined under subparagraph (i) in respect of the property."

So you can in fact elect a reserve, in which case your capital gain is diminished by the amount in that year that still remains to be paid as the proceeds of consideration for the purchase. I did not want anyone to be deceived by that argument. There is always some form of leniency in the income tax legislation to meet precisely these sorts of circumstances.

Mr Sorbara: Mr Chair, I wonder if you would allow me a comment on that, because I think --

The Vice-Chair: Mr Winninger has the floor.

Mr Winninger: Why do you not wait until your turn comes just as I have listened to you patiently and waited for my turn to come.

Mr Sorbara: Okay. I just thought we might have a discussion about that because there is a problem here, but I do not mind.

Mr Winninger: Mr Chair, I wonder if page 133 of the Income Tax Act of Canada could be tabled for the purposes of this debate, and I will move on.

Mr Harnick: If that is the case, can we bring Arthur Scace to respond on that?

Mr Winninger: Arthur Scace has moved on to bigger and better things.

In any event, getting back to the thrust of the motion. I had some misgivings at first in terms of these guidelines being incorporated into the legislation, but I am now persuaded as to the error of my thinking. I can see now that these guidelines could quite smoothly be incorporated into the existing Members' Conflict of Interest Act, as has been suggested by the member for Ottawa Centre.

In this particular case, as she has pointed out, the commissioner can conduct the investigation and report to the Premier just as he does right now and possibly may do in the future, and then leave it to the Premier to make the political decisions that have to be made once a report is in. As Mr Rae said in his oral submissions before the committee, this would extend the powers of the commissioner. So we do have the element of a third party dispassionately and objectively reviewing any potential conflict and then reporting to the Premier who can then enforce the guidelines.

I find it very odd that certain members of the opposition who oppose these guidelines should oppose them on the basis that we are setting a very high standard for ourselves here as members of government. What goes into law can perhaps be amended or deleted in the future, but these are the standards we set for our government, and fortunately members are able to comply with them. In the case of personal hardship, in the case where it is not against the public interest to make an exception to the guidelines, the Premier has the discretionary right to do so.

I would submit that there is no problem with these guidelines being incorporated into the legislation along the terms of this particular motion. Certainly there can be a working relationship, if you want to call it that, between the commissioner who investigates potential conflicts of interest and the Premier who is called upon to make the necessary political judgements when enforcing them and in certain selective circumstances to make exceptions to the guidelines, as our Premier has seen fit to do.

Mr Sorbara: Let me begin by just speaking for a moment to the references to the Income Tax Act made by my friend the member for London South. I will just wait until I have his attention and invite him to comment by way of interjection if he feels it appropriate.

I am really worried about your understanding of the guidelines if you are serious about the comments you made with respect to the mortgage back and deferring the capital gain. I say that because the requirement to divest of an interest in a business asset is the requirement to divest of an interest in a business asset, and it would not permit the taking back of a mortgage, which is every bit an interest in a business asset as ownership in fee simple if it is a piece of land or ownership of the share.

In other words, if I sell my interest in a building and I take back a mortgage, for the purposes of these guidelines or for the purposes of the Members' Conflict of Interest Act I still have the very same interest in the asset, so the problem is that I cannot take back a mortgage. I have to find a purchaser who will give me all cash. I want to ask you the last time you acted in the sale of a significant business interest where the purchaser was able to pay all cash. If the vendor takes back a mortgage, he has not taken one step in compliance with the guidelines as set out by the --

Mr Winninger: On a point of personal privilege, Mr Chair: Mr Sorbara raised the hypothetical point where a member is forced to divest himself of an asset and not receive all the proceeds of consideration at the time of divestment --

Mr Sorbara: No, I did not.

Mr Winninger: -- and commented on what the income tax implications might be. I was simply clarifying his hypothetical point. I was not saying whether a mortgage would be permitted or not under the guidelines. I was correcting a misconception that the member for York Centre raised. That is all.

The Vice-Chair: Mr Winninger, that is not a point of privilege. Mr Sorbara.

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Mr Sorbara: With all due respect, Mr Winninger suggested to this committee that someone could take back a mortgage in the asset that he sold and comply with the Premier's guidelines. That is just the kind of misinformation that seems to pervade this committee and the deliberations on what it really means to divest. You cannot sell an asset and take a mortgage back. You have to sell it and presumably get all cash. If you take a mortgage back, and Mr Winninger suggested that was okay, you have not done anything. You still have an interest in that asset every bit as much as if you owned it outright, owned 100% of the asset.

Now, to talk directly to the motion, equally, I think Ms Gigantes's motion indicates somehow that she either has not read the conflict of interest act or has not read the guidelines. I say to her and I say to the members of the committee, the act is a system, in a sense a closed system, requiring actually three things.

The first is full and honest disclosure of the interests of a member and a member of the executive council. The second is a burden on the member not to involve himself or herself in business activity. The first thing is disclosure, setting out in a document to the commissioner every business asset and every business interest that a member has. The second thing is a prohibition against participating in any business. That is there in the act. The third substantive requirement of the act is a prohibition against making a decision where the member is in a conflict of interest. Now the act also has a mechanism for the commissioner to arbitrate if there is an allegation made of a conflict. That is what the act does.

The Premier's guideline is a wholly different affair. It requires members to sell what they have. The commissioner has no business selling on behalf of the member, notwithstanding that she refers in her motion to reporting to the Legislature. More important, whereas the act sets up the commissioner as the person who conducts a hearing or receives the information on disclosure, it is the Premier in the guidelines who is the arbiter of whether or not a member will have to divest.

I am not sure what she means in her motion to say that the Conflict of Interest Commissioner will now -- if I just might read the whole thing:

"That the proposed guidelines be incorporated into the Members' Conflict of Interest Act and that the mechanism of administration..." -- I remind you, Mr Chairman, that the mechanism of administration in the guidelines is the Premier's ability to grant a dispensation or not grant a dispensation -- "be the same as is currently in the act" -- I am not sure what that means -- "ie, through report to the Legislature by the conflict commissioner in the ways suggested by the act."

The guidelines say you have to sell what you have unless you get a dispensation from the Premier. Does she mean that we will do that except that the dispensation comes from the conflict commissioner, or that the conflict commissioner will advise the Premier as to whether or not a member should be absolved from the requirement to disclose?

It does not really make any sense, and it really does not make any sense when you get to the Premier himself. Who gives the Premier a dispensation? Who reviews whether it would be unfair or unjust to require the Premier to divest? Does the Premier sit in judgement of himself? Does this committee sit in judgement of the Premier?

Either way, if you want the answer, if you want to know what really should be done, what we should do is expand the disclosure requirements that are contained in the act, make them even more strenuous and, I tell my friend from Ottawa Centre, require that ministers, in the first six months that they are in cabinet, not sell all they have, but appear before the justice committee with their disclosure statements so that they can be cross-examined by members of the opposition. That is real parliamentary accountability. We do not have that yet, and we did not put that in when we were in office.

If you want to make the act stronger, do not require that the members sell all they have, particularly in a cabinet where the members who came to testify before this committee, as Mr Carr pointed out, did not have anything. It is pretty easy to say you are in favour of that act if it does not have any personal implications.

We did not have Zanana Akande appear before us. She refused to appear before us. We did not have Ms Ziemba appear before us. We conveniently avoided that. In fact, there is no one in cabinet who would be significantly affected by this. But if you bring people who are really affected by it before the committee, what we hear is that divestment does not make any sense. It did not even make any sense to Mr Winninger, who seemed to think that it was okay to take back a mortgage.

Mr Winninger: That was your idea.

Mr Sorbara: No, no, no. I said --

Mr Winninger: You set up a hypothetical.

Mr Sorbara: I know, and in the hypothetical that I set out, for a very specific reason --

Mr Winninger: We will do it as a point of order.

The Vice-Chair: It is not a point of order.

Mr Winninger: How do you know until I say it?

The Vice-Chair: Go ahead, Mr Winninger.

Mr Sorbara: The hypothetical that I set out --

The Vice-Chair: Mr Winninger has a point of order.

Mr Winninger: I may be repeating myself, but last time it was a point of personal privilege; this time it is a point of order.

I did not respond to your hypothetical by saying it is okay to take back a mortgage. I simply said the consequences under the Income Tax Act of taking back a mortgage mean you defer payment of capital gains.

The Vice-Chair: Mr Winninger, that is not a point of order. Thank you very much.

Mr Sorbara: If you want to continue trying to justify your interjection with the Income Tax Act, that is fine with me. This is the only context or forum where I am going to be able to make the point that the practical realities of requiring cabinet ministers, before they serve, to sell their business interests, and to do it in 60 days -- my God, some people put their houses on the market and they do not get a buyer for a year, and there is a vibrant market for houses generally. To take a small business, or a 35% interest in a small business, and to say that the minister shall sell that in 60 days so that he can continue to serve is the height of stupidity. I mean, go to the marketplace and see whether you are able to sell that 35% interest in a business in 60 days. You will be the laughingstock of the marketplace.

By the way, Bob Rae, in his guidelines, is the laughingstock of the marketplace, because anyone who knows anything about business interests knows that no one in his right mind can unload himself of significant business interests in 60 days, and no one in his right mind would do that for the privilege of sitting, at the pleasure of the Premier, I remind the member for Ottawa Centre. Even before the 60 days is up, that member might be out of cabinet on his you-know-what. No one will do it. No one with significant business interests would bother even applying, and the reason is that it is completely out of whack.

I invite any of my friends who own a house to take it to the marketplace and say to the agent representing him, "I've got to sell this house in 60 days." You know what will happen. The agent will say, "I can get you about 50% of the real value if that is one of the criteria." Even more so is a business interest. I would love to be the vendor in that case.

The point is, in this motion we have a suggestion --

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Mr Harnick: You would like to be the purchaser. Not the vendor, the purchaser.

Mr Sorbara: I would like to be the purchaser. That is right. I am sorry. I thank my friend for the correction

Mr Winninger: You want to buy my law practice?

Mr Sorbara: Yes, in 60 days. I will give you about $250,000 for it. I would simply suggest to the member for Ottawa Centre to have a very careful look at what the Members' Conflict of Interest Act says, have a careful look at what the guidelines say and move, in her motion, a way that the two could be justified. The conflict of interest act sets up a system of disclosure and a system of arbitration where an allegation of conflict has been made. That is the pith and substance of that act. It has nothing to do with the intervention of the Premier in arbitrating which of his ministers will have to divest.

I cannot for the life of me see how those two systems can be brought together. We could chuck both of them -- that is fair, if that is what you want to do, chuck both of them -- and write a new act requiring that ministers divest themselves of their business interests. But do that. Move that in the motion. Do not move a motion that says somehow compliance will be through the reporting to the Legislature by the conflict commissioner in the ways suggested by the act, because that is not what the guidelines say.

The guidelines do not involve the Legislature. They require particular members to do particular things, sell what they have. They provide for one person to give an exemption from that, and that is the Premier of the day. If Bob Rae, in this case, suggests that it is okay for the Minister of Community and Social Services to keep her buildings, then it is okay. The conflict commissioner does not enter into that. He just enters into that when someone alleges that she has made a decision to further her private interest.

We had an example of that with the famous affair of the directorships where she resigned by sending a note to her kids. That is what the conflict commissioner does. Under the guidelines, the Premier says it is okay. He has, by the way, said it is okay to have registered retirement savings plans. This is very bizarre, because in an RRSP you can hide or you can manage interests in virtually every public corporation in Ontario.

Mr Poirier: Including a self-directed one?

Mr Sorbara: Including a self-directed RRSP where you can be, in effect, personally buying and selling shares. I think probably the Premier is going to want to review that and review his determination that it would be okay.

Be that as it may, the guidelines require the Premier to make a determination. The act requires the conflict commissioner to make a judgement when an allegation of conflict has been made. I do not think the two can be married and I would simply invite the member for Ottawa Centre to withdraw her motion and perhaps submit some other motion that would suggest to the members of this committee how the Members' Conflict of Interest Act and the guidelines are to be integrated into one piece of legislation.

The Vice-Chair: Before we move to the next speaker, I would like to inform the committee that tomorrow we will be meeting in committee room 1 downstairs. It is air-conditioned.

Mr Harnick: Just continuing with what Mr Sorbara was saying, the member for Ottawa Centre indicated that, on her reading of the conflict of interest act, any final decision would be a decision of the Legislature. That is not what the conflict-of-interest guidelines say. The investigation into the directorships of the Minister of Community and Social Services was an example of how the conflict of interest act works. The Premier, in response to a request, sends the matter to the Conflict of Interest Commissioner. The Conflict of Interest Commissioner prepares a report.

The Chair: Mr Fletcher.

Mr Fletcher: Are you finished?

Mr Harnick: I am not finished, but the Chairman is carrying on a conversation with the clerk and with Ms Gigantes --

Mr Fletcher: Nobody else is listening.

Mr Harnick: -- two members are getting coffee, Mr Fletcher is telling me that I have said enough. What is the point of going on with this?

The Chair: Are you finished, Mr Harnick?

Mr Harnick: What is the point?

The Chair: Would you like to return to the substance of the discussion?

Mr Harnick: Yes, I would like to return to it and I think you should too. You are the Chairman of the committee. You are the one admonishing everyone to hurry up with their remarks.

Mr Fletcher: On a point of order, Mr Chair: I am a little tired of the disrespect being shown by Mr Harnick towards the Chair. I think there should be something done about that if it is within the Chair's power.

Mr Harnick: Why don't you throw me out the window, Mr Fletcher?

Mr Winninger: We would if we had a Sergeant at Arms.

Mr Harnick: At any rate, if I can continue, the Premier would then refer the matter to the conflict commissioner, a report would be prepared and then the report came back to the Premier, who decided whether to implement some form of penalty pursuant to the report.

The report that was done by the conflict commissioner for the investigation into the Ministry of Community and Social Services was merely a finding of fact the Premier had to act on; it was not a finding indicating a penalty that should be imposed. That aspect is left to the Premier. The situation would be much the same under the Public Inquiries Act. However, under the Public Inquiries Act the conflict commissioner could go ahead and indicate what the penalties should be pursuant to that act. It would then be up to the Premier to decide whether to impose any of those penalties.

So what the member for Ottawa Centre says in her motion is absolutely wrong. The Legislature does not make the decision. The motion should be redrafted. Furthermore, if we go ahead and vote in favour of this motion, we will end up with guidelines that allow the Conflict of Interest Commissioner to adjudicate in certain respects. But the final decision, in terms of every cabinet minister and indeed in terms of the Premier, would be decided by the Premier himself and not by the Legislature.

The remarks by the member for Ottawa Centre are absolutely wrong, and if that is what she has predicated her motion upon, the motion must be changed because the Legislature does not make the final decision. The final decision is made by the Premier. That is quite clear from a reading of the Members' Conflict of Interest Act. I urge the member for Ottawa Centre to read that act. I urge her to read the report the conflict commissioner prepared regarding Zanana Akande. That report dealt only with a finding of facts. The penalty imposed, if any, is left to the Premier, not to the Legislature. The Legislature has absolutely nothing to do with it.

Furthermore, if these guidelines become law, the Premier, who may be implicated in a particular situation himself, is the person who has to make the decision about what is hardship and what is a business interest. The Premier could decide at any time the definition of "business interest," if it is not within the purview of the conflict commissioner. So you are going to have an act that has a judge, who would be the conflict commissioner, who could make findings of fact; you are going to have within the same act the Premier able to make decisions with respect to penalty; and within the same act the Premier having the opportunity to redefine, based on whatever his whim of the day may be, what an asset is, what a liability is, what a financial interest is, what could cause a conflict of interest, what is a business interest, what is full disclosure, what is undue hardship, what is consistent or inconsistent with the public interest.

It would be the Premier who would decide what undertakings should be appropriate and necessary to avoid a conflict of interest. It would be the Premier who has to decide what business interests are permitted. The Premier would have to decide what persons would be at arm's length to a minister. All these things would be within the purview of the Premier and totally inconsistent with the existing Members' Conflict of Interest Act, so the motion as worded is not the proper vehicle to be considering what we have to consider.

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I urge the member for Ottawa Centre to read the Members' Conflict of Interest Act, to read the decision in the Zanana Akande matter to see how the Members' Conflict of Interest Act worked in that situation. I would urge the member to read the conflict-of-interest guidelines so she could see what would be avoided in terms of the conflict commissioner's authority and what would be left within the hands of the Premier and how that would be totally inconsistent with these guidelines becoming law as they are set out now.

I would also like to indicate to the members of the committee -- and I believe this has been distributed to you all -- a letter to the clerk of this committee, Lisa Freedman, on 23 May 1991, together with the conflict commissioner's redrafting of the conflict act, making the amendments he discussed when he appeared the second time he came here. Certainly those amendments and alterations to the conflict act should be considered by this committee, and certainly that consideration should take place within the context of whether we do or we do not make these conflict-of-interest guidelines part of the law.

I think at some stage it will be incumbent upon this committee to consider those recommendations for amendments to the existing Members' Conflict of Interest Act. But in the meantime, I would urge the committee and the member for Ottawa Centre to redraft this motion so that it does not read that the mechanism of administration be the same as is currently in the act, ie, through a report to the Legislature by the conflict commissioner.

The Chair: Mr Harnick, are you moving an amendment to the motion or simply asking the member to move the change?

Mr Harnick: I cannot do this quite as quickly as the member for Ottawa Centre. I think we probably have to sit down and consider how to word this properly, once we decide in principle that we may or may not want to make this part of the existing law. But certainly the motion is very premature, in that it states that the mechanism of administration be the same as is currently in the act, ie, through a report to the Legislature by the conflict commissioner in the ways suggested by the act, because the ways suggested by the act are totally different in fact than what the member for Ottawa Centre said they were when she described them as being merely something that will be a final decision of the Legislature. That is not what the act says. She is wrong.

She should at least amend this motion so that the mechanism she is talking about is in compliance with what the act really does; or let's propose amendments to the conflict of interest act, if that is our mandate. This is totally in contradiction to what the conflict of interest act says, and it is certainly totally contradictory to what the member for Ottawa Centre described as how this act -- and I am referring to sections 16 and 17 of the Members' Conflict of Interest Act -- in fact operates.

Mr Fletcher: I have listened intently, almost, to most of what the opposition has been saying, and it does not make that much sense. They had, combined, 48 years to do something about conflict of interest and they did not do anything. Now I am hearing them say, "What we really should be doing." It is not up to you what we should really be doing; it is up to the governing body of the day.

Mr Carr: We are elected members too, Derek. Don't we get a say?

Mr Fletcher: The government of the day is saying that as far as conflict-of-interest rules are concerned, this is what we think we should be doing and this is the way we want to go. The reason we are going this way is because of what has happened in the past. In the past it has been the conduct of some members --

Mr Harnick: Name one instance --

Mr Fletcher: -- of all parties, of all political stripes --

The Chair: Mr Harnick, Mr Fletcher has the floor.

Interjections.

Mr Morrow: On a point of order, Mr Chair: Does Mr Fletcher not have the floor?

The Chair: He does.

Mr Morrow: Thank you very much.

Mr Fletcher: It has happened in the past where there have been some problems and people have used their office wrongly, and that happens --

Mr Harnick: Name one.

The Chair: Mr Harnick.

Mr Harnick: You cannot make those allegations without backing them up.

The Chair: Five-minute recess.

The committee recessed at 1737.

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The Chair: We are resuming. Mr Fletcher, you have the floor.

Mr Fletcher: As I was saying before we stopped, the conflict-of-interest guidelines right now are for parliamentary assistants and ministers. If the minister or if the person who is elected does not wish to be in cabinet or be a PA, he would definitely say that this is the reason he does not want to be in cabinet or be a parliamentary assistant. They have that option. If they really want to be in cabinet they divest of their interest.

I am going back to what the Premier said when he was here and when the question was put, "Should the guidelines be extended to apply to all members of the Legislature?" He said: "Additional guidelines should apply to all members. However, complete divestiture could not and should not reasonably be expected to apply to all members. It would be unduly difficult and an undue imposition on a member." Therefore, I cannot understand why the opposition is saying that good quality people would say, "I am not going to run for public office because of these guidelines."

As I say, it only applies to parliamentary assistants and to ministers. That thinking and that kind of talk is not what the Premier has been saying. I have no problem with the motion that is on the floor. In fact, I think we should have a vote on the motion on the floor. If need be, I will gladly call the question.

Mr Poirier: Would you mind if I take a couple of minutes? I think I am on the speakers' list.

The Chair: You are indeed, sir.

Mr Poirier: I want to confirm again what the member for Ottawa Centre was proposing, that her motion was going to concern only ministers and PAs, not all 130 members, right? Could she answer that question for me because that might colour --

Ms Gigantes: If it is helpful at all, I felt it was important that we get to deal with the principle of whether we are talking about legislation here or not. How you want to define what is covered in that legislation should come after.

Mr Poirier: Fair enough. For the benefit of the member for Ottawa Centre, I want to state that I still believe, with all due respect, that what the conflict commissioner has been doing with the act before and the immense respect there has been for the commissioner -- we have heard the witnesses come forward and whether they were former members or others, including the conflict commissioner, obviously between the perception of what the people have on the outside and what the reality is as to the honourable status of members past and present of all three parties, I still believe that to add the guidelines to the conflict commissioner's mandate is overkill.

I want to repeat to my friends from the government party right now that eventually there will be a provincial election. We do not know what is going to happen, but should the people of Ontario perceive that it is time for a change -- you will obviously not feel that way yourselves -- and should, in September 1992 or whenever, the same thing happen to you that happened to us back in last September, I know --

Mr Morrow: In 1992?

Mr Poirier: Whenever that is. I do not know. Do you know the date? I do not. If you do, let me know. I will get ready for it.

Mr Fletcher: Get your signs.

Mr Poirier: That's right, yes.

I think you would go to bed that night and the following week and the following months knowing what is important to you. When you reassess what you have done in government in your mandate, you will state, "What is important for me and my evaluation of what we have done or how we have been individually or collectively is the truth as opposed to the perception." We know something about that and maybe you will know something about that at the next provincial election.

I can imagine talking to you afterwards. You will say, "What counts is the reality of the situation, not what people perceived." I hear you say that it is important, that you are moving to do this because of what people perceive to be conflicts of interest with the act and including the mandate of the conflict commissioner in place. I still believe, with all due respect, that what you are doing is going to discourage a lot of good people. Regardless of which party, it does not matter, regardless of the individual, when you look around the House at all 130 members, they are all honourable members and none of us care what they own or what they have. They are here because they are committed individuals. Who gives a damn what they have or do not have?

I have always felt that with the current or any other conflict commissioner, that person, he or she, could make sure, with the act, that those who did not comply would suffer the full wrath of the act, and they should. But I repeat, it has not been done before. We have not seen that. I am very afraid that this is a very much misguided, zealot-like intention to add the guidelines to the conflict commissioner's mandate. I will be voting against this motion, with all due respect and with my conscience very clear.

To any person across Ontario or anywhere else around the world coming forward and standing in front of me and saying, "The members of the House are not honourable," I will say, "Baloney." I will think of all members of all three parties and I will ask that person to point out to me one indication within memory, however far back he wants to go or in the current situation, to name me one person who, with the current act and the current commissioner and the current mandate of the conflict commissioner, would not be designated as honourable as per the stand of time. They will not be able to name me one person in our collective time here or before, as we heard from the witnesses.

Mrs Mathyssen: I have listened with great patience over the last four months and we have considered a great deal of testimony. I would concur with Mr Fletcher that it is time to call the question regarding this motion, so I move that we call the question.

The Chair: All in favour of moving the question?

Mr Poirier: I have been requested to call for a 20-minute period to gather the troops for the vote.

The Chair: You are asking for a 20-minute division on the question?

Mr Poirier: On the vote.

The Chair: For 20 minutes? We are adjourned until tomorrow after routine proceedings in committee room 1, which is air-conditioned.

The committee adjourned at 1750.