ONTARIO PUBLIC SERVICE EMPLOYEES UNION
AUTOMOBILE PROTECTION ASSOCIATION
ONTARIO AUTOMOBILE DEALERS ASSOCIATION TORONTO AUTOMOBILE DEALERS ASSOCIATION
COMMERCIAL REGISTRATION APPEAL TRIBUNAL
NATIONAL ELEVATOR AND ESCALATOR ASSOCIATION CANADIAN ELEVATOR CONTRACTORS ASSOCIATION
CONTENTS
Tuesday 25 June 1996
Safety and Consumer Statutes Administration Act, 1996, Bill 54, Mr Sterling / Loi de 1996 sur
l'application de certaines lois traitant de sécurité et de services aux consommateurs, projet de loi 54,
M. Sterling
Ontario Public Service Employees Union
Tim Little, legislative liaison officer
Automobile Protection Association
Michael Turk, legal counsel
Ontario Automobile Dealers Association; Toronto Automobile Dealers Association
David Hodgson, consultant
Bob Beattie, executive director, Used Car Dealers Association of Ontario
Bill Davis, director, government relations
Elevator Cab Renovations
Gary Morris, member
Commercial Registration Appeal Tribunal
Judith Killoran, chair
National Elevator and Escalator Association; Canadian Elevator Contractors Association
Allan Hopkirk, president-owner, Trident Elevator
STANDING COMMITTEE ON ADMINISTRATION OF JUSTICE
Chair / Président: Martiniuk, Gerry (Cambridge PC)
Vice-Chair / Vice-Président: Johnson, Ron (Brantford PC)
Boyd, Marion (London Centre / -Centre ND)
Chiarelli, Robert (Ottawa West / -Ouest L)
Conway, Sean G. (Renfrew North / -Nord L)
*Doyle, Ed (Wentworth East / -Est PC)
*Guzzo, Garry J. (Ottawa-Rideau PC)
Hampton, Howard (Rainy River ND)
*Hudak, Tim (Niagara South / -Sud PC)
*Johnson, Ron (Brantford PC)
*Klees, Frank (York-Mackenzie PC)
Leadston, Gary L. (Kitchener-Wilmot PC)
*Martiniuk, Gerry (Cambridge PC)
*Parker, John L. (York East / -Est PC)
Ramsay, David (Timiskaming L)
Tilson, David (Dufferin-Peel PC)
*In attendance / présents
Substitutions present / Membres remplaçants présents:
Crozier, Bruce (Essex South / -Sud L) for Mr Conway
Flaherty, Jim (Durham Centre PC) for Mr Leadston
Kennedy, Gerard (York South / -Sud L) for Mr Chiarelli
Kormos, Peter (Welland-Thorold ND) for Mr Hampton
Clerk / Greffière: Donna Bryce
Staff / Personnel: Michael Wood, legislative counsel
J-893
SAFETY AND CONSUMER STATUTES ADMINISTRATION ACT, 1996 / LOI DE 1996 SUR L'APPLICATION DE CERTAINES LOIS TRAITANT DE SÉCURITÉ ET DE SERVICES AUX CONSOMMATEURS
Consideration of Bill 54, An Act to provide for the delegation of the administration of certain designated statutes to designated administrative authorities and to provide for certain limitation periods in those statutes / Projet de loi 54, Loi prévoyant la délégation de l'application de certaines lois désignées à des organismes d'application désignés et prévoyant certains délais de prescription dans ces lois.
ONTARIO PUBLIC SERVICE EMPLOYEES UNION
The Vice-Chair (Mr Ron Johnson): Our first presenter today is Mr Tim Little, with the Ontario Public Service Employees Union. Good afternoon, Mr Little. You'll have 15 minutes for your presentation, and you may wish to leave some time for questions at the end.
Mr Tim Little: I'll try to hurry through this then.
It seems appropriate that this particular committee hearing on this particular bill is being held such a short time before the summer recess, for if this bill is passed, the government will be going on a permanent vacation so far as the consumers in the province of Ontario are concerned.
You could call it letting a fox run loose in the chicken coop, but it could be more accurately described as a farmer turning over the entire chicken operation to a group of foxes while the farmer goes on vacation. And just as he leaves, this particular farmer in charge of Ontario is shooting the watchdogs, or at least laying them off.
But not to worry: The foxes are empowered by this bill to get together and form a self-management organization, a committee of themselves to become the watchdogs. They vow not to let any foxes take advantage of any chickens while the farmer is away on permanent vacation. We know the outcome of this story: chickens one day, feathers the next.
This would be funny if it were not so true and if it weren't real people who were going to be victimized with this bill. In farmyard Ontario, the farmer is the Ontario government, you know who the foxes are, and the watchdogs are the people who used to work for the Ministry of Consumer and Commercial Relations. They're the crown employees we represent in OPSEU whom this legislation so transparently singles out in section 9 of the bill: the crown employees who now have the responsibility to ensure that the people of Ontario are protected from unsafe elevators, inspect the midway rides, audit the fly-by-night travel agencies, and protect the public from a whole host of other hazards that we read about in stories in newspapers that usually end with "The Ministry of Consumer and Commercial Relations is investigating."
Not any more. In anticipation of the quick passage of this bill, the minister has been busy giving surplus notices to scores of employees, everyone from clerks to enforcement officers to audit inspectors. There have been 136 positions eliminated so far this year and we anticipate 100 more before year-end.
We could list the names of our members into the record today. I have them here just to make sure you realize that with the passage of this bill, you're responsible for greater joblessness and the future of real people and their families, dedicated people serving Ontario. We're going to respect their individual privacy, but the fact remains that our families are suffering because their jobs are disappearing, and there will be many, many more layoffs to come.
It's ironic that we have to remind the members of this government, which claims to favour job creation, that when you kill protective regulatory bodies, you're also killing jobs. Your decision to do so directly affects real people who are also taxpayers and who, above all, are working people, not the large businesses that will gain from this bill; people who have spent their working lives protecting the public from wily foxes and those who prey on grieving widows and car buyers.
We know for sure that this bill and its aftermath will destroy jobs. What kind of jobs will it create?
There are foxes out there licking their lips to set up some designated administrative authority that they will control to replace ministry watchdogs. It will need an appropriate name. May we suggest a Better Business Bureau for Foxes? Perhaps you could bring in Paul Tuz to run it.
Will it be enough to replace 50 years of consumer protection and public safety? Can you really turn foxes into watchdogs by passing an eight-page piece of paper into law? Is this government rushing to pass this bill only because it's a convenient and expedient way to cut a few hundred crown employees from the government payroll? We suspect that's the case.
Bill 54 really is a flippant and tawdry piece of work. The legislation specifically targets our members, targets them for the trash bin and devalues the work they do to protect society. Never has a law been so transparent in its attempt to limit the rights of working people, none except perhaps Bill 7.
When all the inspectors, enforcement officers and auditors are laid off, this legislation opens the door to the private industries to regulate themselves in the public interest. That's quite a leap of faith. But the government doesn't have to worry: Even if self-regulation doesn't work and the public becomes victimized, this legislation effectively takes care of any liability you have to protect the people who elected you. So much for your job as protectors of the public interest.
Whom do you turn to when your widowed mother is stiffed out of her prepaid cemetery plot? Do you just call up another undertaker? Who do you call when you suspect they rolled back the odometer on the used car you just bought from a reputable dealer on Highway 7? "Who you gonna call?" Bill 54, where are you?
You'll call it self-enforcement. We call it privatization of enforcement. Consumers will call it a waste of time.
Self-enforcement negates the basic golden rule of private enterprise, one that this government seems proud to drill into the heads of everyone in Ontario. Private enterprise, we're told, operates on the so-called bottom line. Everything must pay its own way. Anything that gets in the way of profit is bound to be sacrificed, downsized or abolished. That's 136 ministry jobs and counting.
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Our enforcement system wasn't created in the first place because industry was kind to consumers; quite the contrary. Elevators were not safe. There were deaths on midway rides. Travel agents did go out of business and they have absconded with funds.
What's changed? Widows do prepay through the nose for a six-foot piece of real estate. There are crooked realtors. There are cases to investigate. Protection is needed. The bottom line of profit is not going to be good enough.
Are there really fewer risks for consumers today than there were 20 years ago? Has industry really changed its stripes that much? At least the minister thinks so. According to his business plan tabled in the Legislature a few weeks ago, "Industry members are clearly in a better position than government to understand the needs, responsibilities and pressures of their own sectors."
In our view, those "needs, responsibilities and pressures" can be summed up in a couple of words: higher profits. Isn't that the bottom line for this government? What about the needs and pressures facing the public?
We've got nothing particularly to gripe about regarding profit-making, but we know that the prime responsibility of a company is to its shareholders, not the public nor, particularly, the rest of the industry; they're the competition.
The government intends to regulate these industry self-enforcement agencies by mechanisms such as business plans, annual reports and auditor's reports to the Legislature. But who's going to read them when there are no ministry employees left? Will the legislators themselves be charged with that duty? The government intends to regulate only by that means: reports to government.
To start this off, the minister has chosen to privatize the regulation of reputable industries where the track record speaks for itself. If engineers, lawyers and doctors can be self-regulated, the minister asks, why not used car dealers, travel agents and real estate brokers? What, me worry?
The minister proposes a new agency to be called the "safety organization," a kind of underworld doublespeak, if you ask us. We suggest that that agency have a warning right on the front door: "Ontario consumers beware. Self-enforcement could be hazardous to your health and to your safety."
In closing, we call on this committee to do the right thing: Don't bother with clause-by-clause; move now to withdraw the bill. You've got to strengthen consumer protection for Ontario, not eradicate it. You've got the public trust in your hands. Don't turn it over to a bunch of cunning foxes, for if you do, all that will be left is the feathers.
The Chair (Mr Gerry Martiniuk): Thank you very much, Mr Little. We have two minutes per caucus.
Mr Peter Kormos (Welland-Thorold): What consultation has the government had with OPSEU regarding the significant displacement of workers?
Mr Little: None that I'm aware of.
Mr Kormos: It was indicated yesterday by the government that they had no idea how many workers this would displace, which indicates to me a real lack of planning on their part. Do you share that conclusion?
Mr Little: Very much so. We know it's in the hundreds. We can only come to the conclusion that the services they provide are considered by this government to be completely expendable.
Mr Kormos: In the three areas of motor vehicle dealers, real estate and travel agents, the government, the Ministry of Consumer and Commercial Relations, nets something like $3.5 million in terms of profits, net revenues that go into general funds. The minister yesterday said he didn't expect there to be anything other than a marginal reduction in terms of the net revenues of the government, but the industries that are being regulated are being told they're going to have to fund fully the new regulatory bodies. Do you suspect that new user fees and higher costs will be there for the industries being regulated and the consumers?
Mr Little: I would think it's going to be a form of double jeopardy here, that there will be the losses of revenue and then costs to the industry and user fees, whether it's for access to information about a product. All together, it amounts to the farmer not only putting the foxes in charge, but he's starting to give away the farm as well.
Mr Jim Flaherty (Durham Centre): I take it, sir, that your concern is not private delivery, that your concern is public safety and consumer protection under the act. In that regard, I hear your fox analogy, but given the concern for consumer protection and public safety, have you had an opportunity to go through the act to look at the watchdog functions?
Mr Little: Yes.
Mr Flaherty: So you've read that legislative control is maintained by the ministry, in subsection 4(3), and you've read that contractual control is maintained, in subsection 4(1), again by the government, by the ministry? You've read that the business plan is within the control of the ministry, that a minimum number of board members go to the ministry? You've read that the annual review goes to the ministry, that the emergency power goes to the ministry, the regulatory control stays with the ministry, that there's a conflict provision that the regulations dominate? You have read that the revocation is that of the ministry and you've read the offences in section 14, a fine of $100,000 a day for contravening the act? You've read all that?
Mr Little: With all due respect, I think that's eight questions, so the only --
Mr Flaherty: Those are all watchdog functions. My question to you is, if you've read the act, how can you come here and say there are no watchdog functions maintained by government, if you read those sections?
Mr Little: I don't think in my presentation anywhere it said no watchdogs, but you don't have to be a rocket scientist to see that this legislation permits so much water being put in the wine as to render consumer protection and safety in the province seriously at risk.
Mr Flaherty: I hear you say that. If regulatory and legislative control is maintained by the government of Ontario, how can you legitimately argue that any sort of delegation of legislative or regulatory control has been given?
Mr Little: Because this is an omnibus bill in this ministry, the same as your omnibus bill last year set a trend for wide-open ministerial powers to just give away the farm. That's why our submission is called what it is.
Mr Flaherty: You want to read the bill, I think.
Mr Little: This is akin to Bill 7 and it's akin to Bill 26.
Mr Gerard Kennedy (York South): I guess you don't have a handle on exactly how many people will be affected by this, from the standpoint of the union?
Mr Little: Yes, we do. Our calculations say 136 government employees to date and at least 100 more.
Mr Kennedy: So approximately 240 people will be affected by this. You're saying this government has already laid off more than half the people this would affect?
Mr Little: I'd have to get back to you on that one. I don't have the exact figure of how many people actually got their surplus notice, but it looks right now like 136 so far.
Mr Kennedy: Are they still on the job? They've just received their notices?
Mr Little: They've received their notices.
Mr Kennedy: I wonder if you're aware that this government, faced with the choice of increasing consumer protection or doing something to reward, I guess, people in industry who have asked for this, has decided to give not only the work to industry -- and we have no sense of what qualifications or what kind of pay or what kind of engineering standards can be maintained there -- but a tremendous amount of money as well. I'm not sure if your union is aware of the figures, but in real estate it was $1.5 million in cost, payments in terms of the civil service this year, and $4.9 million collected by government; the difference between which, $3.4 million, is a gift to the industry to do with as it pleases. The minister rejected that there be an amendment to make sure that's for consumer protection. In all, $9 million will be given away by the ministry, which could cause further cuts in consumer protection unless the government is prepared to increase the deficit to finance this gift to these new industry associations.
I wonder what kind of perspective you can bring from the standpoint of the people providing consumer protection now in the face of those kinds of numbers. In other words, the government is going to save no money with the loss of their jobs.
Mr Little: I would say not only save no money, but have to face a daily barrage. This is going to come home to roost. This is the kind of thing that is going to make this government terribly unpopular in the years ahead when consumers are scrambling to find the protection they need, and it's doubly ironic that in doing so the government is losing millions of dollars to the general tax revenues of the province. For a government so concerned about the bottom line, notwithstanding a massive tax giveaway, that's particularly ironic. I agree that it's very important that those figures have come to light.
The Chair: Thank you very much, Mr Little, for taking the trouble to attend before us today.
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AUTOMOBILE PROTECTION ASSOCIATION
The Chair: Our next presenter is the Automobile Protection Association, Mr Turk, legal counsel. I apologize to the committee and the presenters for being late, as I was in the House. Welcome. You have 15 minutes, including any questions that there might be time for. Would you please proceed.
Mr Michael Turk: I'm going to be as brief as I possibly can. My position with the Automobile Protection Association is as their legal counsel. The Automobile Protection Association is the only organization of its kind in Canada that deals specifically with consumer protection issues only, with respect to the automobile and motor vehicle industry in this country.
When we talk about deregulation and consumer protection issues of the automobile industry -- I'll focus now just on Ontario, but from the APA's standpoint -- there has been a total erosion of any regulatory control or input on the part of the government if there are any complaints from the average consumer. As a matter of fact, the APA as an organization within the past two years has changed its policy. The policy used to be that if you had a problem with the motor vehicle dealer, be it a dealer, a salesperson or an employee, those complaints were referred to the ministry for resolution, hopefully investigation, and some quick action on behalf of the consumer through the government. Unfortunately, that doesn't happen any more. Any representations made generally come through me because I'm the first contact beyond the Automobile Protection Association.
Thursday 27 June 1996Jeudi 27 juin 1996 One of my roles is to dispense legal advice to Automobile Protection Association members, and unfortunately, if there are any problems with a dealer, our first line is to say, "Don't waste your time going through the ministry because you're not going to get anywhere." That's of major concern when you're dealing with what, for most consumers, represents their biggest outlay of cash next to their home. They need a decision or an answer almost instantaneously if it's with respect to cancelling an agreement of purchase and sale, a misrepresentation by the dealer, an odometer rollback, anything that happens with respect to the ownership or use of the automobile that may be beyond their control.
As I said, we've had major problems with this ministry over the past two and a half, three years. When you take a look at the legislation the way it is right now -- and I'm talking not about the amendments to the act but the Motor Vehicle Dealers Act in general -- it has the teeth to provide the consumer with a feeling that there's room there to make a complaint to the registrar or to the director and to have your action be investigated and have some control over the situation. It's there in writing. Unfortunately, the practice has not been to use that legislation to promote the interests of the consumer.
What the consumer in Ontario, with respect to a car dealer issue, is faced with these days is either arbitration or, generally speaking, they're in the Small Claims Court or the Ontario Court (General Division); they're litigating with the dealer. Generally they don't have the resources to do that. We try to do that, on a cost-effective basis, through the organization.
Unfortunately, that's where we stand in terms of consumer protection issues for motor vehicle dealers. Basically they've been eroded. They're still there; we think they should be used. The people in charge should follow the letter of the law and be more responsive to the needs and desires of the consumers.
I see this from a practical perspective because I'm in the trenches every day fielding phone calls from across the country with respect to basic issues, going from automobile rollbacks to a stolen vehicle that appears on a dealer's lot. What do they do? They don't get any help from the ministry.
If we take it one step removed, if we have an organization set up where essentially the watchdog is the industry itself, it won't serve the consumers' any purpose, and the fact that the government will technically have an oversight function is of no comfort to the Automobile Protection Association. All it does is remove it one more time from the consumer to get any fast results or have somebody answer the phone and give them an opinion.
The Chair: Thank you, Mr Turk. We have three minutes for each caucus.
Mr Flaherty: Mr Turk, thank you for being here this afternoon. I appreciate it. I understand that in the automobile area there is one self-management plan that's been fairly effective in terms of resolving disputes between consumers and motor vehicle dealers, that is, the Canadian Motor Vehicle Arbitration Program. Are you familiar with that?
Mr Turk: Very much so.
Mr Flaherty: I understand from the evidence we've heard here so far that that plan has been fairly effective. Are you aware of that also?
Mr Turk: The difficulty I have personally with Camvap is that it's a closed plan, so any time I make any inquiries to satisfy myself that it's effective, I can't get answers.
Mr Flaherty: It's an information problem?
Mr Turk: Right, and there's a gag order basically. If you go in through the arbitration, you have to make an election, and the election is that you either go through the courts or you go through Camvap. Once you go through Camvap, the consumer organization's right out of the picture. Really, I can't tell you. If they were more open, I'd be able to make an informed and objective decision. I just don't have the information to say whether it's effective or not.
Mr Frank Klees (York-Mackenzie): Mr Turk, thank you for your comments. The previous speaker obviously was very concerned about the direction of this bill and referred to the fact that some 136 ministry jobs may be lost. You said, and I'll quote, "Don't waste your time going through the ministry, because you'll only waste your time." I'm assuming that's a comment on the efficiency and the kind of responsiveness the ministry personnel were giving to issues that concern your sector. In your opinion, is a move in the direction this bill would take us positive for the consumers in this province?
Mr Turk: Not at all. The problem we have faced is that three to five years ago we thought the ministry was very effective, and the biggest complaint of the people we were speaking to on the inside trying to help the consumers was that they were understaffed and didn't have the resources to follow up on a timely basis every written complaint received. They couldn't even get through the initial stage, let alone decide which cases were worth prosecuting and which cases weren't.
We think the mechanism is there within the statute, but the administrative powers that be have not allowed enough resources to be allocated to make it an effective watchdog.
Mr Klees: So the system as it is --
The Chair: Thank you, Mr Klees. Your time's up.
Mr Bruce Crozier (Essex South): Good afternoon. I just want to get it in some perspective. What you're saying is that there is current legislation that's not being properly applied; therefore there has been a necessity of having the Automobile Protection Association. Otherwise, if it had been applied properly, chances are --
Mr Turk: The APA is more popular than ever.
Mr Crozier: But what you're also saying is that you see even the change as being a problem.
Mr Turk: Absolutely.
Mr Crozier: In view of the fact that the government has had a surplus in the area of $2.7 million that could have been invested in consumer protection -- I don't say it all has to be. In other words, they collected more in fees and income than they spent on consumer protection. Could you comment on what the government could do under the current legislation if more of the funds collected were used for the consumers' benefit?
Mr Turk: First, the government has to establish its mandate, and the mandate is that the consumers' interests are the ones that are paramount under the Motor Vehicle Dealers Act, not the interests of the dealers themselves. Once you get that philosophical change, then the people who will be involved in the complaint process and in the investigative process will have a mandate to fulfil the goals of the legislation and will feel they have the support of the people above.
What we have found is that there seems to be a malaise within the ministry, an extreme reluctance to take any of our issues at heart, and as a result of that, we're in the courts more often than not. At least if there was the truth that the ministry was a watchdog, not just the appearance -- the appearance is no longer there, because people know they can't even get through on the lines if they want to make a complaint to the ministry.
Mr Crozier: As you started by saying they have to philosophically determine whether they support the auto dealers or the consumers, do you share with me that sinking feeling that they apparently are supporting the auto dealers more than the consumers?
Mr Turk: The consumers generally have the pessimism that they're fighting big business, and when they go up against a dealer, it's an average consumer, generally speaking working class, who has the problem, who can't access the system, has never used a lawyer before and I might be the first lawyer they've ever spoken to in their life. They feel they're up against big business to begin with, and then when they try to get through to the ministry to lodge a complaint, nothing ever happens.
Mr Kennedy: Do you realize that the ministry was only spending $600,000 at the same time it collected $3.2 million in fees? That starts to explain some of the lack of response. But I'm wondering if you could comment, just to make very, very clear, whether you think consumers can have any confidence in these new administrative authorities when the majority is going to be with the industry.
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Mr Turk: What we say as an organization is if the government is intent on deregulating, then make a specific provision that the composition of every board is going to be shared equally among the groups so that you can't stack the board with industry members, you can't have a majority of industry members, so that if a complaint comes in it's going to reviewed objectively and not that there's one consumer member among 12 who's going to be consistently outvoted.
Mr Kormos: In terms of motor vehicles, there are basically two classes -- new and used -- each with their unique sets of problems. If a consumer gets stung by a lemon buying a new car, he or she's not just taking on the dealership, they're taking on Ford or GM or Chrysler or what have you.
Mr Turk: Correct.
Mr Kormos: So you're talking about even more powerful forces than mere Al Palladini by himself.
Mr Turk: Correct.
Mr Kormos: He's got all the Ford Motor company backing him up, trying to protect their interest.
Mr Turk: Yes, but there are different issues that collectively get lumped into motor vehicles and we're not necessarily talking about lemons, vehicles that you're going after the manufacturer on.
Mr Kormos: That's why I wanted to go on beyond the lemon, which is a new-car nomenclature. What are the other sorts of things that people are going to have to rely on this self-regulatory body to protect them from?
Mr Turk: All the issues with respect to the operation and purchase of a vehicle. The major issue that I'm focused with these days is rollbacks. The second one is automobiles from out of province that have been written off, new VINs coming on, and the vehicles are sold in Ontario as used vehicles without the record from the previous province. Those are the two major issues these days; stolen vehicles that reappear in Ontario as well.
Mr Kormos: We're told that these self-regulatory bodies are going to have the responsibility of registration of industry numbers; denial or revocation or suspension of registrants; inspection, investigation and prosecution of violations; and manager of consumer compensation funds and the handling of consumer and business complaints.
How can a consumer even have confidence, let's say, in the apparent arm's-length role of a regulatory body if they're doing the handling of consumer and business complaints and they're dominated by the industry itself? Is there anything even-handed about that from the issue of perspective?
Mr Turk: The consumers would have absolutely no confidence whatsoever in an organization that is basically self-regulating. We've had problems with it with the existing composition of the system and it can only deteriorate further if the people who are making the decisions are the same people who are asking to enforce.
Mr Kormos: The minister yesterday suggested that even CRAT was at risk, that it may not have any role to play down the road. Is the issue of the appellate process of concern to you?
Mr Turk: Not off-hand. My understanding would be that administratively you would still have your administrative law remedies if you're not happy with whatever decision is made.
Mr Kormos: Big bucks. You're talking big bucks there.
Mr Turk: Practically speaking, it's not an option. It's an option for the wealthy. It's not an option for the --
Mr Kormos: Folks down where I come from in Welland-Thorold who get ripped off by some sleazy car dealer are unlikely to be able to afford the big bucks that it's going to take to go to the appellate levels in the court system.
Mr Turk: That's a problem that we face all the time. The only advantage that we've had in the last few years is with the increase of the jurisdiction of small claims court to $6,000. It makes it slightly more accessible to the consumer, provided that you're dealing with a vehicle whose damages are under $6,000. Beyond that, the legal system generally is shut out to the consumer.
Mr Kormos: In your submission you talk about the need for the agency to be independent and I'm wondering how an agency in the structure that's proposed under this bill could ever be truly independent. Perhaps you could help the committee with that, especially the government members.
Mr Turk: All I would say is that when we're talking about independence the people who are sitting on the committee cannot be affiliated with the body that is being governed. So if you have members on the committee who are wearing two hats -- basically they're members of the association and they're dealers themselves and they're also sitting on the organization -- one question is how they are going to be totally objective when it comes to a dealer issue. That's not to say that they won't be, but I would have philosophical concerns over that.
The Chair: Mr Turk, I thank you very much for attending today.
ONTARIO AUTOMOBILE DEALERS ASSOCIATION TORONTO AUTOMOBILE DEALERS ASSOCIATION
The Chair: Our next presenters are the Ontario Automobile Dealers Association and the Toronto Automobile Dealers Association. Welcome, gentlemen. I would ask you to identify yourselves if you are taking part in the oral presentation for the purposes of Hansard.
Mr David Hodgson: My name is David Hodgson. I'd like to thank you for this opportunity to make this presentation to you today. It's my pleasure to speak to you on behalf of 8,000 motor vehicle dealers in Ontario, both new and used. With me today, on my left, is Mr Paul Stern, a director with the Toronto Automobile Dealers Association and the chair of their self-management committee. On my immediate right is Bill Davis, the director of government relations for the Ontario Automobile Dealers Association and the Toronto Automobile Dealers Association, and to my far right is Mr Bob Beattie, the executive director of the Used Car Dealers Association of Ontario.
We have come here today to speak to you as an industry united in support of Bill 54. Motor vehicle dealers in Ontario are regulated by the Motor Vehicle Dealers Act. The act requires all persons carrying out the business of buying and selling new cars and used cars to be registered and have a permanent place of business. The act set out rules regulating business premises as well as business practices.
In addition, the industry must comply with a myriad of other federal, provincial and municipal legislation, regulations and bylaws, ranging from federal and provincial tax and labour laws to municipal zoning bylaws.
The industry is also subject to self-help rules. For example, consumers can find redress through the Sale of Goods Act with respect to implied warranties, or the Environmental Protection Act in the event that a purchased vehicle does not meet emission control standards. Consumers may also seek compensation through the Small Claims Court.
In addition, motor vehicle dealers are the sole contributors to the motor vehicle dealers compensation fund, which offers consumers compensation in transaction disputes. This fund provides for reimbursement of up to $15,000 per claim in the event of an unsatisfied judgement against the dealer.
This industry though, like others, has marketplace issues and problems. However, the number of legitimate consumer grievances tends to be minor in comparison to the more than one million transactions conducted by registered motor vehicle dealers each year. Even these are often simple misunderstandings that are readily resolved by industry-sponsored mediation. But notwithstanding our relatively stable marketplace, there are areas for improvement.
We support Bill 54 and industry self-management for two basic reasons:
First, because of financial constraints and other constraints the government is not effectively regulating the motor vehicle dealer industry. Problems arise due to lack of enforcement against curbsiders and others who are breaking the law. We want an enforcement program that creates a level playing field for honest, law-abiding, registered dealers for the benefit of consumers and the industry.
The second reason we support Bill 54 is because we believe the motor vehicle dealer industry has the resources, the ability and the desire to regulate itself in a way that will enhance consumer protection, improve customer service, streamline administrative processes and improve the image of the industry, for despite its image, our industry has a strong track record of working with governments at all levels to enhance consumer protection.
At the provincial level, we have worked with various ministries to design the first plain language sales agreement for Ontario, which is unique in Canada; develop the used vehicle information package to provide history and lien information to consumers who purchase vehicles from private sellers; help to bring forward the Motor Repair Act to protect consumers from poor workmanship and unnecessary repair costs; and establish advertising guidelines for the industry to provide full public disclosure.
We have also worked with government to protect the environment through waste reduction and emission-testing programs. In the labour field, we've created pay equity, sexual harassment and hazardous waste material policies and programs specific to our industry. We've worked with finance and revenue on gas consumption and tire taxes, as well as a system to monitor and validate dealer sales.
These are just a few of the examples where the industry has demonstrated that it is ready, willing and able to work in the public interest to enhance consumer protection.
We believe that the implementation of an industry self-management program will provide another significant opportunity for us to continue to improve on consumer protection. At the same time, we can build confidence in the industry and create a fair and level playing field for our members.
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We view self-management as an industry opportunity to focus on specific problem areas. By fully utilizing the resources generated by registration fees from our industry, significant improvements in the marketplace can be made through more effective enforcement of existing legislation and the development and implementation of education programs for dealers and the public.
The first major problem to be addressed is unregulated sales. Despite the laws requiring persons engaged in the business of buying and selling used vehicles to be registered, more than 200,000 vehicles are sold illegally each year in this province by unregulated curbsiders. Because these sales are unregulated, they may involve accidented and undisclosed rebuilt vehicles, as we just heard, vehicles which have odometer discrepancies, as we just heard, and vehicles with other quality or safety deficiencies. And because these sales are not made by registered dealers, the consumer is not protected by the motor vehicle dealers compensation fund. The consumer would have little or no recourse from a curbsider for vehicles sold with liens, prior accident damage or, indeed, if the vehicle had been stolen. Unregulated sales cheat governments out of millions of dollars in business taxes, income taxes, sales taxes, as well as the GST. It places an extra burden on honest, registered dealers.
Through self-management, the industry will provide the resources necessary to enforce the requirements of the Motor Vehicle Dealers Act. The industry will use every means possible to ensure that all persons in the business of selling vehicles to the public are registered. Through self-management, the industry will address public safety concerns and provide greater consumer protection. Self-management will also hopefully avoid or eliminate unfair competition between registered dealers and these curbsiders.
Another problem area that the industry will focus on relates to non-compliance by dealers because of lack of knowledge or misunderstanding of the regulations. Through self-management, the industry will provide basic education courses and establish minimum entry requirements to ensure those wishing to enter the industry have a good understanding of the law and their responsibilities.
The industry will also provide consumer education opportunities to improve consumers' knowledge of their rights and their responsibilities, and we hope this will assist them in their dealings with dealers.
Under self-management, the industry will also create a process to take action quickly against dealers who violate reasonable business standards and who, as a result, give the whole industry a black eye.
Far from deregulating, the industry will ensure that effective self-management means a well-controlled marketplace. The consumer and government representatives on the board of the new administrative authority will no doubt place great emphasis on the consumer protection mandate of this new authority.
In terms of consumer services, the industry plans to expand our current mediation program. We have a better than 90% success rate in resolving consumer complaints that are referred to us, and it is our hope that by expanding our efforts to facilitate the quick resolution of consumer and dealer disputes, we can avoid the use of the slow, costly and adversarial court system.
All of these initiatives will be implemented without cost to the government or consumers. Dealers view the costs of improving the regulatory system as an investment in their industry for the betterment of consumers and dealers alike.
Our industry's future health is based on consumer satisfaction. Our members are very aware of how the marketplace can be improved. We are more concerned about this industry, its image, consumer confidence and a fair and level playing field than any government could ever be. It's our day-to-day business and it's our future.
The motor vehicle dealer industry is ready, willing and able to take on the privilege and the responsibility of self-management. We are committed to providing services and protection to the public and the industry at a level much higher than it is today. We support Bill 54 and look forward to its early passage.
The Chair: Thank you, Mr Hodgson. We have two minutes each. Mr Kennedy.
Mr Kennedy: Thank you for your presentation. I think it is important to recognize that there is a plethora of good businessmen running most of the motor vehicle businesses that we have in the province today. I had uniformly good experiences with the different trades when I ran the food bank.
I'd like to ask your opinion about what you think the impact will be in terms of image. I think there have been in the past image problems, probably more for used car dealers in terms of a general perception, and the idea that other people here have used the fox-and-chicken analogy, but simply that there isn't arm's-lengthedness there. Isn't that in effect something beneficial to your business so that there is at least the appearance of an objective regulatory authority there? Won't that be gone under the self-management provisions?
Mr Hodgson: I want to answer the first part and then I'll ask Bob Beattie to talk about the used car dealers in particular. We believe that the new self-management authority will have a better image and do a better job of effectively regulating the industry. We believe that with consumer education and a far faster and better mediation of disputes so that we can get away from the adversarial relationship we heard about earlier, we will improve and enhance the image. That's one of our real goals with this. We really want to do something about that. We don't want used car salesman jokes and more.
Mr Bob Beattie: I don't know if we can replace the used car salesman jokes any more than the legal profession can change theirs, but we'll certainly try. We think it's an opportunity to truly change the image of the industry. Our association particularly has its mission to enhance the image of the industry, and we'd done a good job of that. We have two lawyers on staff who deal with mediations every day; that's their sole job and that's totally paid for by our members. That's two lawyers who deal with nothing but consumer complaints and disputes over any kind of transaction with a motor vehicle dealer. It doesn't have to be one of our members. They'll also deal dealer to dealer and they'll deal consumer to consumer, at no charge.
Mr Kormos: When the minister was here, and in the propaganda they spin out to support Bill 54 they talk about its rationale as being the elimination of red tape. What kind of red tape do you encounter now that you'd be freed of in the event that you were able to regulate yourselves?
Mr Hodgson: I'll lead off and then I'll ask Bill Davis to talk to you. To us this isn't about reducing red tape. To us it's two things: better enforcement and a more effective and efficient regulatory system for the benefit of the industry and the consumer.
Mr Kormos: So anybody who suggests it's going to reduce red tape is full of it?
Mr Hodgson: No.
Mr Bill Davis: No, Mr Kormos.
Mr Kormos: I tried.
Mr Davis: Presently the industry is governed by about 16 of the 18 ministries, as you know, that operate now. For example, if you're building a new body shop, upgrading it to meet environmental standards, once you do it in Whitby it's the same as doing it in downtown Toronto, yet you still will have to go through a horrendous amount of red tape to duplicate that. We think we can eliminate that.
The other thing is that we'll be able to eliminate red tape with respect to salesmen's registration and training. We are looking at setting up a training course. We're working on it right now so that we're bringing a qualified type of person into our industry based on models out of the United States automobile dealers' associations and Manitoba -- part of that model even calls for training of our dealer-operators -- so they'll be more informed, better educated, and there's no doubt we will avoid a lot of red tape that holds us up right now.
Mr Kormos: What has precluded you from doing that to date?
Mr Davis: It just hasn't been able to be done.
Mr Kormos: No interest on the part of the industry?
Mr Davis: There's been interest on the part of the industry.
Mr Kormos: Why haven't they done it?
Mr Davis: The previous governments.
Mr Kormos: Told them they couldn't?
Mr Davis: The previous governments just weren't interested in following in that course of line, that's all.
The Chair: Thank you, Mr Kormos. Mr Parker has two questions.
Mr John L. Parker (York East): First, I don't know if car dealers need to sheepishly apologize to a bunch of politicians about image problems among the public, but thank you for the flattery.
Mr Davis: We're a little bit higher than you are.
Mr Kormos: You've only insulted one New Democrat, but more Tories.
Interjection: How do we self-manage politicians, by the way?
Mr Parker: We've heard the comment more than once in the course of these hearings that the government is making money off this regulatory business, that it takes in more than it's putting back into the system. Maybe the solution is to redirect some of that revenue back into the system, put more resources into the enforcement the government regulations and leave it all in government hands. I wonder if you can comment on that recommendation yourself, or what you see good or bad about it.
Mr Hodgson: Number one, we understand that we do send in more in terms of revenue than the government spends on enforcing the regulations, not just on our members but on those who sell cars illegally. We think that's wrong. We believe that the resources we put in should be used to more effectively create a controlled marketplace and we welcome the opportunity to do that. Should it stay with government? We believe that we have more interest in controlling the marketplace than government has, we believe we can respond more quickly to changing realities in the marketplace, we believe we'll be tougher on our members than the government has been and we believe in self-management.
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Mr Parker: In your comments and in some we've heard from others we've heard some criticism of the competence with which government has administered the regulations. In your view, is that a result of the lack of resources or is that a result of mismanagement or other reasons?
Mr Hodgson: I don't think we could really comment on that, because we don't have the performance standards by which they were being judged or by which they were told to enforce the act. All I know is that we can probably do a better job and want to do a better job with the resources available to us.
Mr Davis: Part of it is that they didn't understand the industry in respect to the types of regulations and what was happening. Speakers before us talked about mediation for consumers, and both in the used car entity and our entity the dealers themselves -- Bob has a more comprehensive type of remediation process. Within a new dealership there's a process, although probably it's not as articulated as it should be, that you go through a series of management with your concerns and the dealer principal, if he gets involved -- it's usually resolved. When you're in business, you can't afford to have unhappy clients.
I just think that part of the problem in the past was that the government people weren't as aware of what happens in our industry. It's a very complex industry. It's not something you can look at in a second and understand. We employed some 55,000 people in our own industry, and Bob, it's probably another 6,000 or 7,000 or 10,000, probably up to 70,000 people across this province in small businesses. It's a complex business.
The Chair: I thank you, Mr Parker. Unfortunately, Mr Klees and Mr Doyle, there's no more time.
Gentlemen, I thank you for attending today and for your presentation.
ELEVATOR CAB RENOVATIONS
The Chair: Our next presenter is Elevator Cab Renovations, Mr Gary Morris. Welcome, Mr Morris. You have 15 minutes. Would you proceed.
Mr Gary Morris: Ladies and gentlemen, the certification of the elevator industry is not the first time a trade has been certified. As circumstances would have it, in 1968 the electrical trade was certified. At that time I was an apprentice in that trade. There were at that time both union and non-union companies as there are now in the elevator industry. Ontario Hydro, being the governing body at that time, and still today, chose to grandfather all those who had been in the trade over seven and a half years and could provide proof. All those who could not wrote an exam produced and presided over in that case by Ontario Hydro.
An apprentice program was devised at that time, administered through the governing body, Ontario Hydro. This system consisted of on-the-job and theoretical training through schools administered through government control and government exams. Thus I come to the point of my presentation.
The elevator industry was divided, as the electrical industry, into union and non-union. Most of the men on the proposed committee are honourable men with the best interests of the elevator industry at heart. However, each of them has a vested interest. The board has direct union representation, direct MCCR representation and unionized company representation. However, 30% of the industry is completely unrepresented.
For the most part this segment of the industry consists of independent companies without a single voice. If Bill 54 is passed with the present committee, it would appear that this segment of the industry would continue without representation.
The bill, as presented, would give the impression that the unionized segment is better trained and qualified due to unionized training, thus making it the benchmark for qualification. There is no evidence to conclude that there is any significant difference in the safety performance or number of MCCR deficiency notices of completed projects in either group.
I urge you delay the passage of this bill until the advisory committee is re-established to more accurately reflect the composition of the trade and accept through personal affidavit anyone with seven and a half years of work experience as automatically grandfathered and everyone else writes a government exam.
Mr Kormos: I have no questions. We've been made very familiar with this issue by other presentations. It's clear that the government is being accused of favouritism for union elevator repair people. It's a peculiar position for this government to come under attack on, but I'm confident that this is one area where they're going to remedy the situation.
Mr Flaherty: I take it, Mr Morris, that the concern is with the interim advisory board.
Mr Morris: Yes, it is. As I said in my presentation, everybody on that board, they're honourable people. They just have self-interest.
Mr Flaherty: You realize that's not the Bill 54 board, that the interim advisory board is a temporary board that was --
Mr Morris: I recognize that.
Mr Flaherty: -- appointed to deal with certification and training, that Bill 54 doesn't have any provisions in it that deal with certification and training and that the plan is that there will be an administrative agreement with a new board with composition from both the union and non-union sector.
Mr Morris: I realize that, but if Bill 54 just goes in as it is, there's nothing to guarantee that will be changed.
Mr Flaherty: I understand. The administrative agreement provision is there, and I think you can rely on the likelihood that there would be input, particularly given your presentation and a presentation we had yesterday. The point is well taken.
Mr Morris: Good.
Mr Kennedy: I know that you have a singular concern about the bill, but I wonder if you could express for us a little bit about how your current interaction is with the technical standards branch of consumer and commercial relations, if you could characterize what role it plays in the operation of your company's business.
Mr Morris: In my particular area, to tell you the truth, when MCCR first began certifying the trade, the original composition was that there was one level of mechanic. All my business does is the interior of elevator cabs. If that had gone along as it was, we would have been precluded right out of the industry as not even existing.
Mr Kennedy: Are you referring to the creation of the interim advisory board specifically?
Mr Morris: No, this is going back to when they first began moving into that.
Mr Kennedy: I'd like you to relate to what degree your company -- it sounds like the less mechanical part of the elevator function.
Mr Morris: Yes.
Mr Kennedy: Are you inspected at all by the ministry?
Mr Morris: No, we're not; very rarely.
Mr Kennedy: I have no further questions.
The Chair: Thank you very much, Mr Morris, for attending today.
COMMERCIAL REGISTRATION APPEAL TRIBUNAL
The Chair: Our next presenter is the Commercial Registration Appeal Tribunal. Ms Killoran, welcome.
Ms Judith Killoran: I thank the honourable members of the committee for inviting me to speak today. Unfortunately it was at somewhat short notice, so I don't have a prepared text, but I'm prepared to answer any questions you may have. I'm here in my role as chair of the tribunal.
The Commercial Registration Appeal Tribunal hears appeals under 20 different statutes, everything from the Real Estate and Business Brokers Act, Motor Vehicle Dealers Act and matters under the Travel Industry Act. When people are stranded because of problems with their travel agent they can appeal to our tribunal for compensation. We hear both regulatory matters, as far as licensing, and compensation appeals under the Travel Industry Act and Ontario New Home Warranty Program.
Our tribunal is composed of approximately 60 members. The members are all part-time. By far the majority of them are small business people. They tend to come from industries that are regulated. I have motor vehicle salespeople on the tribunal, real estate agents, a large number of builders and travel agents. When we have an appeal under the particular statute which concerns them, those members then sit as the third member if we have a tripartite panel. The other member is someone who is designated as a general member. That general member usually represents the general public, the consumers' association. Then there's a neutral person who sits as vice-chair.
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We had an annual general meeting of our board this past Friday, June 21, and there were some concerns expressed by members to me and I was asked to relay those concerns. At that time we didn't anticipate it would take this form, but I welcome the opportunity.
The members hadn't had an opportunity to review the statute. We had copies of it at the tribunal and hadn't had it for any length of time but had them available for the meeting on Friday. Just after some initial discussion, some of the questions that were asked related to the haste in which the legislation had been drafted, in that the majority of the members who represented the various industries did not know what was in the legislation, had not been consulted, were not aware of what was happening in their industries. They had some questions about who was consulted, who were the people designated as the representatives of the industries. They want to take part in the process if it's going to continue and would like to know how.
Another important question they have about the administrative agreements that are referred to in the bill -- and there may be a simple answer to this question but I don't have it; I'm not that well acquainted with the bill myself. They were asking whether the administrative agreements between the minister and the industries will be public, will be subject to public scrutiny and public participation; that is, both the negotiation of the agreements and the agreements themselves. Perhaps the committee can help me with that question.
As well, the industry members asked some questions about procedural issues such as, will the administrative authorities, when designated, be bound by the SPPA, the Statutory Powers Procedure Act, an act which designates certain procedures to guarantee natural justice and fairness.
Not surprisingly, the most important consideration for the members of the tribunal related to the continued existence of an independent appeal mechanism. There was some question about whether the nature of these administrative agreements would dictate the elimination of an independent appeal mechanism, and if that is the case, where would consumers go? Not only consumers -- and I think this is sometimes a misconception. It's not simply those who are appealing against decisions of the industry who appear before us, but many industry members come to us to appeal what they think are administrative decisions which have been exercised wrongly or made to their detriment. We hear a lot of appeals from real estate agents, motor vehicle dealers, builders and, understandably, they have some questions about the nature of their industry.
What they were saying was that in their view, the continued existence of an independent appeal mechanism enhances the credibility of their industry. They don't see it as something which infringes on their business activities. Rather they were of the view that there's more credibility, more legitimacy given to the industry in question when those who are dealing with it know there is somewhere to go.
I think that sums up some of the concerns that were brought to my attention.
I must note one other issue, which is that there had been some mention that the form of self-administration under this bill would be analogous to what exists under the new home warranty plan act. Under the Ontario New Home Warranties Plan Act there is an appeal to CRAT, to this tribunal, of any decisions that are made. The new home warranty program is to be commended for its mediation, conciliation, all of the other forms of redress which it offers to home buyers. None the less, those difficult cases which it is not possible to resolve come to the tribunal.
The industries were questioning, if there is to be an appeal from administrative decisions, whether made by government or by the industries themselves, where will that appeal go? Will the appeal go to the Divisional Court? In that case, there were some questions about the resources of individual members and whether, for example, a real estate agent could afford to go to the Divisional Court if their licence has been revoked or there's a proposal to revoke their licence. If not to the Divisional Court, would there be an appeal internally within the administrative authority itself?
It was interesting that not only the so-called general members who represent the general public or various consumer associations expressed some doubts about that method, but in the main the industry members as well questioned whether that was the route they wanted to go, in that there has been a fair bit of public scrutiny and opposition to other self-managed bodies which have had their own problems. I think the members were not anxious to repeat some of those experiences.
I'm available for questions now. That's just a quick summary of some of the issues that were brought to my attention.
The Chair: Thank you. You've raised a number of interesting points.
Mr Flaherty: I suppose I should respond and then ask you a question, if I may. With respect to the involvement of persons here, a number of the groups of course have appeared as witnesses yesterday and today, including real estate agents, automobile dealers, amusement device persons and elevator industry people, so we've had a number of people here talking about some of the matters you've raised.
The minister has expressed his view that the administrative agreements will be made public, so I should make that clear to you.
Ms Killoran: That's reassuring. I'll pass that on.
Mr Flaherty: With respect to the involvement of the procedural provisions and appeals, clause 15(1)(c) of Bill 54 provides for the regulatory power with respect to hearings and appeals, and that is maintained by the Lieutenant Governor in Council, as I'm sure you've seen in the new legislation.
Ms Killoran: Yes, I have.
Mr Flaherty: For the time being, CRAT would remain as the appellate tribunal. There will be negotiations with respect to the administrative agreements, of course, and I'm sure that hearings and appeals would be one of the items the different industry groups will want to raise with the minister and the ministry in the course of those discussions to arrive at the most efficacious and efficient way of resolving those types of disputes that arise at hearings and appeals.
The key here, of course, is self-management; that the mature industries involved have an opportunity to have input with respect to the structure of hearings and appeals and that it's not imposed on them by government.
I can stop there. Let me ask you a question. I think I've responded to some of the issues you raised. How do you see CRAT working in this system to help create efficiencies in costs and proceedings?
Ms Killoran: One of the ways in which CRAT has evolved in the last couple of years is that it's not as traditional a forum as it was in the past. Formerly, applicants before the tribunal faced a court-like body with court-like procedures. I'm not claiming that all of those procedures have been eliminated, particularly not those that offer procedural safeguards, but we presented our statistics for last year to our annual meeting and it appears that last year we resolved more disputes through ADR than through adjudication -- by ADR, I mean alternative dispute resolution -- and that includes a broad spectrum of everything from negotiation to mediation, conciliation, such that our numbers were higher in that category than they were for actual hearing days.
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That's one of the ways in which we have attempted to be more efficient: cut down on hearing days, earlier intervention when there are problems, earlier attempts to resolve things to both parties' satisfaction. We plan to continue in that fashion.
As well, we're an excellent example of an amalgamated tribunal. We can hear matters -- presently, we hear matter under 20 different statutes -- and if someone appears or files an application, we can deal with it in a generic way. We have a case management system, we have a range of ADR options, so we're not restricted in the sense that a tribunal which hears only matters under one act would be. As I say, we're small, but we have the ability and, I think, the resources to deal with many different licensing, consumer and compensation matters.
Mr Kennedy: I'd like to offer a different perspective than we actually had from the member. I don't think there is any intention to provide an independent appeal mechanism. It certainly seems fairly clear, further, that -- and the composition of the boards, as you know, is made up of a majority from the industry, so I think complete self-management is what's intended here.
I wonder if you could tell us what would be lost if there is no longer an appeal to CRAT in terms of consumer protection and in terms of the functions. You've described some of the useful functions you perceive for your body in terms of these industries. Do you have any statistics? Do you have any sense that you can provide to us about what will be missing if that independent mechanism isn't there?
Ms Killoran: Before I answer, if I could ask you a question, and that is to clarify why it is your interpretation that there will not be an independent appeal mechanism, because I'm getting two different answers from this committee.
Mr Kennedy: It's just that the research we've had is that that regulation, in terms of the different industry bodies that have been in discussion, is one of the things they'll want changed.
Ms Killoran: So that's an assumption?
Mr Kennedy: That's an assumption, yes.
Ms Killoran: Okay. I wanted to clarify that.
Mr Kennedy: Can you tell us more about what CRAT provides currently and how you anticipate it would change if these bodies are different from the ones you deal with today?
Ms Killoran: Currently, what CRAT provides is a fast, independent, efficient, accessible means of appealing administrative decisions. The decisions range from compensation under the Travel Industry Act to home owners' complaints under the Ontario New Home Warranty Program to licensing appeals under real estate and business brokers, mortgage brokers, and the list goes on. If the members want, I could list all 20 statutes. I doubt that that would be all that useful.
Within months of receiving a decision that a member of the public disagrees with, they can then have a hearing, a pre-hearing, mediation, conciliation -- some way of resolving that complaint or that dispute. That's what would be lost. What would be lost is this arm's-length body which could review those decisions and offer a right of appeal to members of the public.
Mr Kormos: I know we haven't got a whole lot of time. Mr Flaherty would probably have a better recollection, because it was before my time, but I understand the whole process of creating an arm's-length appellate tribunal was a very important stage in the development of law and the concepts of natural justice here in the province of Ontario. As a matter of fact, I think it was Judge McRuer -- I'm not sure of that -- who, after a major report, really broke new ground and developed the concepts of tribunals and that development, that maturation of administrative law.
The impression one gets -- and you asked Mr Kennedy how he reached that conclusion. I can tell you how I reached it: because Mr Sterling yesterday was very careful to say that for the moment he regards CRAT as being one of the players in the process. For the moment. But when we witness what this government's regard is for, let's say, WCAT -- you see, because their attitude is, "We can reduce the number of claims by eliminating the appellate process in WCB," one is drawn to the irresistible conclusion in view of that, accompanied by Mr Sterling's "for the moment," that there may not be an appellate body. Would that seem to you to be a reversal of this healthy maturation of the law of natural justice?
Ms Killoran: Our tribunal has existed for 26 years so we're not a product of recent developments in the field of natural justice or thinking in the field of natural justice and fairness. However, amendments to various acts and the very existence of our tribunal can be attributed to attention that's been paid to judicial decisions, to the effect that it is important to have an independent body review administrative decisions. Our record as an independent body that reviews those decisions has been quite admirable in the sense that to the extent decisions are appealed from our tribunal, and there are fairly few, by far the majority are upheld by the Divisional Court. So we are reviewed from the point of view of fairness and natural justice and all of those procedural safeguards, and there is an avenue for reviewing us and it appears that we're quite successful in that area.
So yes, that's a major consideration, that CRAT is a body that's part of the administrative justice system that pays heed to those principles.
The Chair: Thank you very much, Ms Killoran; that's been most valuable to this committee.
NATIONAL ELEVATOR AND ESCALATOR ASSOCIATION CANADIAN ELEVATOR CONTRACTORS ASSOCIATION
The Chair: Our last presentation is Trident Elevator, Mr Hopkirk. Welcome, Mr Hopkirk. You have the floor. Please proceed.
Mr Allan Hopkirk: Good afternoon. My name is Allan Hopkirk and I'm the president and owner of Trident Elevator. Trident Elevator is a business, independent, non-affiliated company and 1996 marks 28 years in business. I began my career in the elevator industry in 1964 and purchased Trident Elevator in 1987.
My presentation to you today is on behalf of two organizations, one being the National Elevator and Escalator Association, the other the Canadian Elevator Contractors Association.
The National Elevator and Escalator Association represents four of the five major elevator manufacturers in the province of Ontario and speaks on behalf of the unionized sector during province-wide collective bargaining for the industrial/commercial and the institutional sector.
The Canadian Elevator Contractors Association is a not-for-profit organization representing 159 members across Canada. Its membership has increased by 12 members from the previous year and we expect to have a membership in excess of 200 by the year 2000. The Canadian Elevator Contractors Association represents 75% of the affiliated and non-affiliated technical field forces of the elevator industry in Canada and is the voice of the independent Canadian contractor in the nation.
At present I represent NEEA and CECA on an interim board for licensing of elevator mechanics in the province of Ontario and most recently as a member of the industry working group to proceed with implementation of the proposed safety organization in anticipation of passage of Bill 54.
In January back in 1991, NEEA and CECA, through an elevator all-industry committee, put forth a submission to the Ministry of Consumer and Commercial Relations for the purpose of developing an industry position on issues of concern to the entire elevator industry. The committee spoke on behalf of 85% of the industry manufacturing and contracting companies. The committee, which began to meet in 1989, put forth three very important issues. One was the urgent need to respond to the training and retraining requirements and set qualification standards for the licensing of mechanics. The second was the need to establish how the industry and government can move to retrofit existing elevators with new safety features, and the third was a need to review and clearly establish the role of the MCCR in the regulation of the elevator industry.
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At that time, there was concern that the ministry was actively considering moving out of the business of inspecting elevators. The industry's position in Ontario absolutely opposed the government transferring the responsibility for elevator inspection to the private sector. The concerns the elevator industry had if they were to transfer the government's responsibility for elevator inspections to the private sector were as follows.
Privatization would jeopardize existing high-quality standards which Ontario elevator manufacturers had earned on the international market.
It would lead to an inconsistent quality of inspections, since various agencies would conduct the inspections, each with different personnel and different interpretation of standards.
It would enable unpredictable and fluctuating costs and availability of inspection services due to a private organization's focus on profitability rather than the ministry's public safety focus.
It also provides a potential for conflict of interest.
I have provided you this background information to enable you to appreciate the efforts of our associations to date and position ourselves to you in our enthusiasm and support over Bill 54. It is a move that will least affect the daily way we conduct our business and still enhance public safety.
We believe that the proposed legislation will ensure consumer protection and promote public safety by enabling regulated industries to have greater involvement in the delivery of public safety programs, improve professional regulation and consumer protection and be able to accelerate the important work of harmonizing national and international technical codes and standards. The major benefit of the harmonization of codes is in the enhancement of public safety by providing safer products.
By providing a level playing field we expect to see more business providing the same product at a more competitive price. Often it is the case a manufacturer would not enter into an area where opportunity for business is restricted by specific codes, as volumes do not warrant additional manufacturing standard changes. Standardization will enable builders and developers to build more for less and, in the end, provide cheaper housing and rental units.
The purpose of the act which facilitates the administration of designated acts named in the schedule, by delegating to designated administrative authorities certain powers and duties relating to their administration, will enable us to provide a more streamlined operation. As an example, we believe that a review of the structure of the technical standards division will also enable us to get more for less.
We see the operation of the technical standards division and enforcement branch of the MCCR as similar to the operation of an elevator company. In our business today we operate on a ratio of three productive field persons versus one non-productive. It appears that the division operates with six times as many people on a scale of three non-productive to one productive.
The process by which the technical standards division reviews drawings and submittal documentation should be revisited, as it is the engineer staff by the company making the submission that holds the end responsibility.
Although both NEEA and CICA are most supportive of a safety organization that is not for profit, under no circumstance would we support or entertain any safety organization that will generate revenue for the government. Any revenue generated must be reinvested in new tools, methods and technology to make the new safety organization more efficient. Excess revenue should be rebated or result in lower fee structures. We feel that the public would be most disappointed to learn of a not-for-profit safety organization that was required to generate revenue for government.
In the development of the administrative agreement, we would trust the administrative agreement initially to be short term, for example, one year; truly not-for-profit other than for value added services, otherwise again public safety could not be the primary function of the safety organization; restructured to provide flexibility to evolve; restructured to promote and enhance public safety in the most efficient way possible; to have a board of directors totally representative of all the stakeholders; to enable the board or the safety organization to have authority and independence to make decisions respecting public safety, delivery and have the government merely endorse the decisions.
In support of a safety organization, the minister must provide immediate approval of any required resources to enable a very thorough review of the current technical standards division structure and provide assistance, both human and financial resources, to enable the interim working group to quickly lay out a framework for the new safety organization.
The minister must promptly provide and release the first draft of the administrative agreement so that the interim working group of stakeholders can be fully aware of all delegated administration requirements.
The delegation of responsibility by the government to a safety organization is supported by CECA and NEEA on the basis of public safety, and the means to provide and deliver the necessary programs take precedence over all other policies and procedures.
Any hidden agenda introduced by the minister of which our association becomes aware will greatly jeopardize our support of the organization. I'd like to thank you for the time that you extended to us to make this presentation.
The Chair: Thank you, Mr Hopkirk. Mr Kennedy, we have about three minutes each.
Mr Kennedy: Thank you for your presentation. As you're aware, the safety organization is the largest component of this. It's $15 million worth of government activity. Currently there's about $19 million in fees collected to support that activity. I think you may have become aware of some ambiguous statements by the minister made here yesterday that somehow the government wouldn't lose revenue and yet at the same time there's excess revenue currently being collected, then, that's being expended on the safety organization. Is that what you mean by a hidden agenda? You made reference to fees being collected out of this non-profit organization. Is that one of your primary concerns?
Mr Hopkirk: I believe that a not-for-profit organization should be not-for-profit, and the revenues generated, however large they may be, should go back into the programs. We pay corporate taxes, we pay other taxes, and we feel that in the best interests of public safety we can do more by having more inspections, better-controlled, better-managed inspections, and do more to enhance public safety with revenue that is generated than at present.
Mr Kennedy: Would your organization be prepared to accept in the administrative agreement or even in legislation what you just said, that all of the moneys which are currently being remitted by members should be used to further those purposes?
Mr Hopkirk: Yes, we do. If the government's going to give us services for value, then we would have to expect to pay for it, because they're still going to maintain their regulatory control.
Mr Kennedy: In terms of what the public could expect over the next little while if these are implemented, you made some comment about rebating fees to members. Do you think the fees that are collected from members are too high currently?
Mr Hopkirk: I believe we always feel that.
Mr Kennedy: But this will be different in the sense that your feelings will matter because the degree to which you're comfortable collecting fees will be the degree to which you're able to provide the safety services. So I appreciate that probably is generally true, but I wonder if you could address what is probably going to be a concern on the part of the people riding up and down on the elevators in terms of the independence of your organization in that fiscal respect.
Mr Hopkirk: Primarily the revenue generated, whatever it may be, would go towards more periodic inspections, better-controlled inspections, better use of inspectors' time, of the department's time, and if there was revenue beyond that, then we would expect to see some kind of rebate or reduction in fees.
Mr Kennedy: There are two basic questions. Would you agree to have something written into the administrative agreement or into the act that would say that the current level, which is in excess of about $3 million, should go to enhancing safety? That's the first question. The second is, in order to make sure that the confidence is there, which I'm sure your industry must very much value and depend upon, that the majority of the board, which would be set, be people who are independent of the elevator industry itself. Would those amendments be of interest to your association?
Mr Hopkirk: I can answer yes to the first question but I do not understand the second question.
The Chair: I'm sorry, Mr Kennedy, your time is up. Mr Kormos.
Mr Kormos: If Mr Kennedy wanted to put the second, go ahead. Quickly, please.
Mr Kennedy: The second question is simply whether or not the -- it's currently proposed you would have the majority of the board?
Mr Hopkirk: Yes.
Mr Kennedy: But in order to have full public confidence and not the appearance of self-interest, it would be beneficial to have a majority that wasn't made up just from your industry. Would you agree to that?
Mr Hopkirk: How the board is structured is very important to us. Presently we have a council. We're concerned about the structure of the present council. That might need some rework. The government has stated to us that it would hold a majority on the board. These are things that are favourable to us. But, yes, we would definitely have to have a board made up of the proper stakeholders and it would have to have the control back.
Mr Kormos: You're not only a businessperson and a person involved in the trade, the industry, but you're a consumer as well, right?
Mr Hopkirk: Yes.
Mr Kormos: You know that now when there's a failure, let's say, of an elevator, and sadly, regrettably, an elevator or elevator shaft accident, at the end of the day all hell breaks loose right here in the Legislature and either the Minister of Labour, if it's a workplace construction site, and/or the Minister of Consumer and Commercial Relations gets under the gun because the buck stops there. Right?
Mr Hopkirk: Correct.
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Mr Kormos: Where do you propose that the buck stops in terms of there being a breakdown in the process once the industry is self-regulated?
Mr Hopkirk: We don't believe that will happen because we believe the government, in its presentation to us, will still oversee the safety of the public by its management or its overseeing of the safety organization itself. If the safety organization is not delivering the program effectively, then the board of directors will be responsible, the organization will be responsible to the government to make those corrections. We do not see the government stepping aside. If the safety organization was not fulfilling its role, we would expect to have audits on it. The government has told us that would be part of its policy.
Mr Kormos: What interests are going to be achieved in a very practical way by the government relinquishing its active participation if indeed it still plays the role you just spoke of?
Mr Hopkirk: On that particular issue or in general?
Mr Kormos: In general.
Mr Hopkirk: Right now, because of past governments and existing situations, there are elevators that should be inspected on a more frequent basis. They're not able to do that; there are elevators that have not been inspected that should have been inspected.
Mr Kormos: I know. There are still some with my name on the licence, which is truly remarkable.
Mr Hopkirk: We need to address that. There's a process in the government right now that will enable 5,000 reinspections a year not to be done, to free up inspectors' time so they can get out and do the periodic inspections or do them more frequently. This is just a method by which they will relinquish reinspection on elevators that do not have a high-risk factor. There are lots of ways we feel that, working with the existing system, we can improve it as well.
Mr Kormos: We heard Mr Kennedy make reference to the fact that when he was sitting here yesterday Mr Sterling said he didn't expect the government to lose any of the net revenues yet at the same time expected the industry to self-fund these regulatory bodies. Somebody's going to end up paying more, aren't they, if he's going to have the same net revenues, yet the industry is going to be called upon to fund this not-for-profit regulatory body?
Mr Hopkirk: We are not in support of a not-for-profit organization that is going to generate revenue for the government.
Mr Kormos: No, no, the government is saying that it's still going to somehow manage to collect the revenues it's currently getting -- you pay those now -- and then it's also going to have you pay for your not-for-profit regulatory body. It doesn't add up. Only in Ontario 1996 does two plus two equal five. Are you prepared to pay more as a participant in the industry?
Mr Hopkirk: No, we believe we will pay less.
Mr Kormos: Hold on to your wallet.
Mr Flaherty: Mr Hopkirk, thank you for coming this afternoon. We've had at least two presentations here in the last two days before the committee by persons in the elevator business who are concerned about the union/non-union matter, primarily with respect to this interim advisory board within the ministry. I gather you're a member of that board.
Mr Hopkirk: Yes, I am.
Mr Flaherty: Your business is non-union, is it?
Mr Hopkirk: Non-affiliated, yes; independent.
Mr Flaherty: That board has been concentrating on training, certification and licensing of elevator mechanics?
Mr Hopkirk: I believe so, yes.
Mr Flaherty: With respect to the proposed new legislation, Bill 54, how do you see the inspection process working, the need for the independent inspections in the elevator area?
Mr Hopkirk: What do you mean by inspections, sir?
Mr Flaherty: I was listening to your presentation. That's where I --
Mr Hopkirk: The independent section?
Mr Flaherty: Yes.
Mr Hopkirk: I believe that the independent elevator contractors are represented through the Canadian Elevator Contractors Association, which represents primarily the independent, non-affiliated contractors in Ontario, and I feel the representation is excellent.
The Chair: Thank you, Mr Hopkirk.
That is the remainder of our presentations here today. We have been joined by Mr Michael Wood, who is the legislative counsel. The subcommittee has set aside one hour for clause-by-clause. If it cannot be done in that time and there's no objection, we will continue. This is the unstructured portion of our deliberations in that there are no time limits and I am only here to keep order and not use my watch any longer. I understand there were, however, some questions from yesterday. Is this an appropriate time to deal with them or shall we deal with them as we come to individual clauses?
Mr Crozier: I have one, Mr Chair, where I think you could be helpful and leg counsel could be as well. I wish I could be more specific myself, but there were questions raised as to whether currently certified union mechanics would be treated preferentially over non-union mechanics in a series of grandfathering periods of years of experience. I'm sorry I can't be any more definite than that. Where the Chair can help me on this is: Where do we find that in the act, and if we find that's inappropriate, how do we address the problem?
It bothers me when somebody looks like, "I don't know what you're talking about, Crozier."
The Chair: One of the filings with us pointed that out too. Mr Flaherty, can you assist us with that?
Mr Flaherty: Yes. Bill 54 does not deal with that, period. I raised that with a couple of the witnesses. It doesn't deal with certification and training of elevator repairers and so on. I understand the concern that was expressed by the witnesses. As a general concern, it doesn't apply to this piece of legislation.
Mr Parker: You were on TV when Flaherty did the thorough analysis of that.
Mr Crozier: Was I?
Mr Parker: You were very good.
Mr Crozier: I probably made as much of a point there as I will here. I guess that's what we were told by leg counsel too, in all fairness. What does address that problem? Notwithstanding that it may not apply specifically to Bill 54, can you help me as to where then we can correct that if that is a problem?
Mr Michael Wood: Mr Crozier, I regret that I'm not able, in my role as legislative counsel in this committee, to really offer an interpretation of existing legislation. What I can do is take instructions for motions and, in taking instructions for motions, give you my best reading as to what the bill says. But if you really want a definitive reading as to what the bill says the law is in the area, I think counsel of the ministry and ministry staff are better qualified to give you an opinion.
Mr Crozier: I will accept then the fact that Bill 54 doesn't address it, but we all know what we're talking about. Is that a concern of the government's and is there a way we can --
The Chair: Mr Crozier, CEC Systems did file with us a presentation. They make reference to the Trades Qualification and Apprenticeship Act and the Ontario provincial agreement. I believe they point out in their second page, if that's correct, Mr Flaherty, that this would determine what we've discussed in regard to qualifications of union and non-union. Is that correct, Mr Flaherty? Are you familiar with it?
Mr Flaherty: There already is, as we've heard here, the interim advisory board, of which the last witness is a member. That board is there specifically to deal with training, education and certification issues. It continues.
Mr Crozier: Okay, so we should follow this through another avenue.
Mr Flaherty: Yes, that avenue is open.
Mr Crozier: Thank you for your help.
Mr Kennedy: I would like to express a little bit of disappointment. We were promised answers by the ministry around baseline, convictions -- activities, in other words, in some statistical form of the very areas that are being affected by Bill 54. It had been my hope to have those on hand today and even for part of the questioning yesterday. They'll be a little bit less germane for clause-by-clause, but I would still appreciate having that information were it to be available.
Mr Flaherty: I think I can answer the questions that were raised, the information requests that were made, if I may take a moment to do that.
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The Chair: Please do.
Mr Flaherty: It might take two or three minutes. The following information relates to two initiatives enabled by Bill 54: (1) industry self-management in the real estate, travel, motor vehicle dealer and cemeteries industries; and (2) creation of a safety organization to administer the seven public safety statutes.
With respect to industry self-management, and here's where we get into the figures, the current direct operating expenditures as of April 1, 1996, including staff salaries and benefits in consumer affairs, business affairs branch, business division, the figure is $7.9 million. The next figure is an estimate, and it's an estimate because we're dealing with corporate services at MCCR and some part of it would be attributed to this work, but not all of it. The estimate of current indirect expenditures, which includes corporate services provided centrally by the ministry, such as human resources, finance and administration, legal services, accommodation and information technology, is a range of $500,000 to $2.37 million. Current revenue as of April 1, 1996, is $11 million; estimate of net revenues over direct and indirect expenditures -- that is, the difference -- is $2.6 million. That's dealing with industry self-management.
If I can change the subject to safety organization, the second aspect, which is in the technical standards division of the ministry, current direct operating expenditures as of April 1, 1996, including staff salaries and benefits, $16.7 million. The estimate of current indirect expenditures -- this is the same concept as before; it has to be an estimate because it depends on how much of the expenditures you attribute to this work -- includes corporate services provided centrally, such as human resources, finance and administration, legal services, accommodation and information technology -- the range is $2.3 million to $5 million. Again, the current revenue figure as of April 1, 1996, is $21.9 million, and the estimate of net revenues over direct and indirect expenditures is $2.9 million. That's the end of the dollar information.
There was some further information requested. Further discussions with administrative authorities will determine, first of all, more detailed projections of costs in relation to revenues, and secondly, the portion of net revenues available for investment in new technologies, new consumer education activities, reimbursements to government for its oversight functions and so on. Through these initiatives, the government will reduce its direct and indirect expenditures by delegating operational functions to administrative authorities and delegating the ability to charge and retain fees for those functions.
With respect to industry self-management and the human resources at the ministry, 55 ministry positions are currently involved in administering functions which are intended to be delegated to administrative authorities; that is, real estate, travel, motor vehicle dealers and cemeteries. With respect to the safety organization, 264 ministry positions are currently involved in administering the seven public safety statutes scheduled for delegation. It is not possible at this time to determine the precise number of staff who will either be employed by future administrative authorities or be redeployed either within the government or the ministry; that is, the ministry will play a future oversight role for each administrative authority. The third option is to retire or cease employment with the Ontario public service through attrition during the period before full implementation, which is estimated to take up to three years.
I believe those comments respond to the requests for information that were made.
Mr Kennedy: Thank you for that information. I would just note that, in the interest of business and consumer affairs, while those are the figures in public accounts for the total department, the four affected areas, we received information yesterday that was at variance. Just for the record, it was $1.5 million in real estate, $600,000 in motor vehicles, $287,000 in the travel industry, and no amount was given for cemeteries. The difference is substantial, though, in terms of our appreciation, because that indicates a net cost of around $2.3 million, not $7.9 million. The whole consumer affairs function is, at least not at this precise moment, being suggested for self-regulation, and therefore I think it is important to note that the net revenue is actually very likely to be somewhat higher than those figures indicate. But I do appreciate the member's effort in bringing that forward.
The other deficiency simply is the baseline information. We were told by the ministry we would have to go through freedom of information to find out just what number of complaints, what number of convictions and indeed what kind of activity is happening in the ministry currently so we can have a baseline against which to measure the new organizations and how effective they're being in responding to both consumers and industry. That hasn't been forthcoming, and I regret that, because it means we make our deliberations today in a vacuum without that pretty important information.
The Chair: Your comments are noted. Mr Kormos, were there any questions you would ask of the minister on which there was agreement to give you information?
Mr Kormos: I just want to start with clause 1.
The Chair: Okay. If I may suggest, I believe there are no amendments in regard to sections 1 to 5. Could we deal with them as a group or do you want to deal with them individually? I think they're all of general application, sections 1 to 5; purpose, definitions, designations, administration agreements and conflict. Is there any dispute in dealing with sections 1 to 5 as a group?
I'll ask for a motion. Shall sections 1 to 5 carry? Is there desire that we debate sections 1 to 5?
Mr Kormos: I should indicate to the Chair that I don't intend to speak to each and every one of these clauses. I'll be addressing our concerns about the bill in its totality when we come to the conclusion of the clause-by-clause. I'll also be addressing some specific amendments as moved by the government as we deal with them in clause-by-clause. Otherwise, if I'm going to address any of these clauses, I'll indicate so to the Chair. I appreciate the Chair's concern about this tawdry bill.
The Chair: Sections 1 to 5 have been moved and carried.
We will now move to section 6, and there is a proposed amendment.
Mr Flaherty: I move that subsection 6(1) of the bill be amended by striking out "subject to subsections (2) and (3)" in the first line.
Mr Kormos: I trust Mr Flaherty will explain why this was done. It was either an error in the initial drafting or it's an attempt to alter significantly the impact of subsections 6(2) and 6(3).
Mr Flaherty: It's to clarify that the right to the remedy of the minister revoking only applies where the administrative organization or agency has not complied with the act or the administrative agreement. It was thought that there was some ambiguity with the preamble subject to subsections 6(2) and 6(3), and it's for that reason that it's proposed that they be deleted.
There's a further amendment to follow with respect to subsection 6(3), which after "administrative authority" would insert the words "under clause (1)(a)" so that the scheme of section 6 would be consistent that the administrative authority will have the right to attempt to remedy a problem before revocation by the minister.
The Chair: Shall the amendment to subsection 6(1) moved by Mr Flaherty carry? That is carried.
There's another, Mr Flaherty, 6(3).
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Mr Flaherty: I move that subsection 6(3) of the bill be amended by inserting "under clause (1)(a)" after the word "authority" in the third line.
If you look at the section, it currently reads, "The Lieutenant Governor in Council shall not revoke the designation of the administrative authority if the designated administrative authority remedies its failure within the time period that the minister specifies."
If the amendment were allowed, it would read, "The Lieutenant Governor in Council shall not revoke the designation of the administrative authority under clause (1)(a) if the designated administrative authority remedies its failure within the time period that the minister specifies."
Mr Parker: If I might just ask legislative counsel, we seem to be using the terms "subsection" and "clause" interchangeably. Am I right in that, and is there any reason for that?
Mr Wood: The use of terminology follows Ontario drafting conventions. "Subsection" is used when the reference is to the first division of the section. For instance, in section 6 you have in brackets (1). That is a subsection. But the (a) and the (b) which constitute the subdivision of that subsection (1) are called clauses.
The Chair: Any further comments or questions? If not, shall the amendment carry? Carried.
Shall section 6, as amended, carry?
Mr Kormos: No. We've got subsections (4) and (5).
The Chair: We vote on the whole section now.
Mr Kormos: I wanted to ask a question about subsection (5). Turn the page and it's right there. Obviously, you don't want to give remedies to self-regulatory bodies that have had their power revoked by the fiat power of the Lieutenant Governor in Council. Is that correct?
Mr Flaherty: I think Mr Kormos is addressing the Statutory Powers Procedure Act, subsection (5).
Mr Kormos: My question is, what's the government afraid of?
Mr Flaherty: It seems to me that what the government is reserving is the right of the Lieutenant Governor in Council to consider it advisable in the public interest to revoke a designation without that power of the Lieutenant Governor in Council being subject to the Statutory Powers Procedure Act.
Mr Kormos: So you're not interested in judicial review of a decision of a minister?
Mr Flaherty: Of the Lieutenant Governor in Council; it's not the minister.
Mr Kormos: Please. We know the Lieutenant Governor in Council is cabinet. What's remarkable is that there's been a trend, Mr Flaherty, away from cabinet exercising its fiat power. You're well aware of that. You surely must agree that that's a healthy trend.
As you know, during the course of the last government there were a couple of levels of obscure appellate power exercised by cabinet. What happens, as you know, is that cabinet makes political decisions, and that's what the criticism was under various provincial statutes: the right to appeal to cabinet from orders of tribunals and boards. I think this was applauded by every fairminded person, in fact, that cabinet no longer had that power, because cabinet inherently makes political decisions, not judicious -- certainly not judicial and oftentimes not judicious decisions.
What you've got here is that you claim a statutory framework and you claim this is what protects consumers and players in the respective industries, yet you're effectively giving cabinet the power at the end of the day -- and cabinet's designed to make political decisions -- without there being any authority or any power on the part of a board or agency that's been screwed over, if you will, by the political decision-making of cabinet to appeal the legality of that. How can you on the one hand speak out for evenhandedness and on the other hand deny -- as you know, the SPPA is very restrictive; it's not a broad-ranging right of appeal but very restrictive. Surely you don't want to turn the clock back so that cabinet can exercise this kind of power without there being SPPA rights.
Mr Flaherty: If I understand the scheme of section 6, which is what we're discussing, the administrative authority, before revocation, gets notice and gets an opportunity to remedy, and that's before any action is taken. The Lieutenant Governor in Council is called upon to look at the public interest, which I'd suggest is the proper consideration of the Lieutenant Governor in Council. There are sections of the act, as you know, where the minister is referred to. In this important revocation section, it specifically provides that the decision is not to be the minister's but the Lieutenant Governor in Council's.
As I say, the administrative authorities have the right of notice and an opportunity to remedy, and with the amendments there would not be revocation until the administrative authority had the opportunity to remedy. But when you've gone through all those stages outlined in section 6 and the administrative authority is still not acting in the public interest, then the section would provide, I suggest correctly, in the public interest, that the Lieutenant Governor in Council could revoke. That's the scheme.
Mr Kormos: I guess I was wrong, then, Chair. These people do want to turn the clock back to Court of Star Chamber times. I'm opposed to it.
The Chair: It's an interesting point though, Mr Kormos. I didn't realize the Lieutenant Governor in Council might be a quasi-judicial body. That's a new concept.
Mr Kormos: That's the problem. They're not. They're a political body and that's why --
The Chair: And that's why the act, I guess, doesn't apply.
Mr Kormos: And they're not even judicious most of the time, never mind judicial.
The Chair: I've never been in the government. You have, Mr Kormos, and you're a better judge of it than I am.
Shall section 6, as amended, carry?
Mr Kormos: Recorded vote.
Ayes
Doyle, Flaherty, Hudak, Ron Johnson, Klees, Parker.
Nays
Crozier, Kennedy, Kormos.
The Chair: Moving on to section 7, are there any comments or questions in regard to section 7?
Mr Kennedy: I have a problem with the potential conflict in subsection (2). What this really is saying is that industry associations can carry out all manner of other activities, including those which have put them in conflict with their general obligation in the first section. For example, industry associations, you would think, could do government lobbying, could do other things on behalf of their members which would have potential conflictive value but also would detract from the arm's-lengthedness that I would assume would be the object of industry and this government, at least in the initial creation of these bodies. I'm wondering if anyone from the government side would care to indicate why this is necessary and why these bodies instead can't simply perform the duties that they agreed to undertake.
The Chair: Are there any further comments or questions? If not, shall section 7 carry? That is carried.
There is an amendment from the official opposition, subsection 8(2.1). Mr Crozier.
Mr Wood: Excuse me. Before we get to that, I just want to ask if the government had moved an additional motion to affect the French version of subsection 8(1).
Mr Flaherty: I will move that. I move that the French version of subsection 8(1) of the bill be amended by striking out "Le ministre peut, à sa discrétion, nommer" in the first and section lines and substituting "Le ministre peut nommer, à titre amovible."
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The Chair: Any questions or comments in regard to the resolution moved by Mr Flaherty?
Mr Parker: I want to protest the late hour of this amendment. I haven't had time to study it.
The Chair: If not, all those in favour of the amendment? It is carried. Mr Crozier.
Mr Crozier: I move that section 8 of the bill be amended by adding the following subsection:
"Equal representation
"(2.1) In appointing representatives of business groups as members of the board of directors of a designated authority, the minister shall appoint an equal number of representatives of business groups with workplaces containing unionized employees or independent contractors as representatives of business groups with workplaces containing non-unionized employees or independent contractors, if both types of business groups exist."
Mr Parker: So if there's one unionized shop in the field, there can be only one representative of an non-unionized shop. Is that what your amendment means?
Mr Crozier: I suggest yes. The problem with the board being biased is really what we're trying to get at, and that gets to my concern earlier about unionized certification of mechanics being different from non-unionized certification of mechanics. It's a concern that if the board doesn't have both types of representation, recommendations made to the new committee being set up under Bill 54 -- that non-unionized businesses will be treated differently from unionized.
Mr Parker: Conversely, if the field is dominated by union shops and there happens to be one renegade that doesn't have a union, then there can only be one union shop represented. Is that satisfactory to Mr Kormos?
Mr Kormos: You're asking Crozier the questions.
Mr Crozier: I suppose you can take it to any extreme you want. We're trying to address the problem that's been brought to us. Frankly, I would have thought the government doesn't want any imbalance in this, or any perceived imbalance.
Mr Klees: I'd like to add a comment, more a question, really. I don't think we differ in principle in terms of there needing to be a balance and appropriate representation. I've got a problem with the word "equal" in the sense that equal may not be fair, given the distribution of the workforce. If we have 90% of the workforce unionized and 10% non-unionized, yet you've got an equal number of representatives on the board, I'm not sure that's getting at what you're trying to achieve here either.
I think the original intent was that the makeup of this board be dealt with outside of the legislation and through the business plan in terms of setting the stage, as a result of discussions with the industry, providing some guidelines. But I've got a problem with how this is worded, not with the intent of it but with how it's worded, and I hate to see it entrenched in legislation this way.
Mr Kormos: Speaking to the amendment but this whole section, these are pretty wacko setups. You're talking about an administrative authority as being one that's presumably a non-profit corporation under federal or provincial corporation laws, which as I understand it -- and again, I'm relying upon legislative counsel -- has its own formula for how many directors there are, and it would be the bylaws of that corporation that would determine whether they're to be representative or coming from a broad mixture.
This government doesn't quite get it. You've got it as if this is some sort of government body like, let's say, a district health council, which is the creature of statute wherein the makeup of a board is determined by statute. In section 8, you've got the power of a government to appoint members to what in effect is a private corporation, albeit non-profit.
Do you understand how I'm having difficulty reconciling this? On one hand, they say the administrative authority is going to be a corporation incorporated under the laws of either Canada or Ontario, so there's some choice there. Then here it gives the provincial government power to appoint members to that board of directors of the corporation, but the board of directors of the corporation grows out of, as I understand it, the articles of the corporation. I could well be wrong.
Mr Parker: Just like the boards of hospitals or boards of universities or what have you.
Mr Kormos: But those are created by statute and aren't defined as a not-for-profit corporation incorporated under the laws of Ontario or Canada. You see, the hospital boards are created by virtue of the Hospitals Act.
Mr Klees: Mr Chair, perhaps we could get clarification. My understanding is that because this non-profit corporation is empowered to raise revenue, it's in fact a requirement that the government appoint a majority of the board. Is that not correct? Could we get clarification?
Mr Flaherty: In this bill subsection 8(1) says the minister may appoint up to a minority, not to constitute a majority. The reason is that it's a self-managing board. I think the exact scheme of the legislation is that the self-managing group has majority representation on the board.
To put it in context of the scheme of the legislation, first of all, there's the designation of the act to be administered or part of an act. Second, there's the negotiation of the administrative agreement, and part of those negotiations of course would relate to the composition of the board. One might have consumer groups that would want representation, one might have various experts in amusement devices or whatever who might want representation on a board. That would certainly have to be something discussed between the parties negotiating the agreement, which is why subsection 8(2) reads, "The members appointed by the minister may include representatives of consumer groups, business, government organizations or such other interests as the minister determines," so that the minister is left in a position of being able to complete the picture of appropriate representatives on the board, still up to a minority.
I might mention also, with respect to Mr Crozier's concern, that the witnesses who raised this concern here were from the elevator industry and were concerned with the composition of the current interim board dealing with certification of elevator mechanics. It's not something that's in Bill 54, actually, although I understand their concern.
Mr Kormos: I'll ask legislative counsel. Is there a formula for what has to constitute the board of directors independent of section 8 and the government's power to appoint people to the board?
Mr Wood: On the basis of this bill, no, there is not a formula as to who sits on the board of directors of that administrative authority.
Mr Kormos: So you could be in a position where you're reliant upon a government to create balance -- is that fair to say? -- with the power, if it is valid, of section 8.
Mr Wood: I don't feel I can answer a question like that, as to balance. Balance is really a political --
Mr Kormos: It's a subjective thing. There's no direction, then, to the governing body, no guidelines, no map, no framework for at least the minimal or basic, threshold level of representation.
Mr Wood: I can say that in this section there is very flexible power; there aren't any firm directives. In subsection (1) it says, "The minister may appoint," so it's discretionary.
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Mr Kormos: That means that if a government were anti-consumer and pro-business, there would be no obligation on the part of the minister, obviously, to appoint or to ensure that anybody was on a corporate board who represented consumer interests; that the people who were appointed could be lame ducks or insignificant or in the back pocket of the government and business.
Mr Wood: To the extent that I can give an interpretation, I can tell you that the word "may" in both subsection 8(1) and subsection 8(2) implies complete, unfettered discretion unless there is something in the rest of the section that somehow fetters that discretion. Right now, there does not appear to be anything in the rest of the section that fetters that discretion.
Mr Kormos: Chair, I know we're speaking to the amendment of the official opposition, and I appreciate what they're trying to do. They're trying to develop this guideline, a formula for some balance. I don't agree with them on this specific one, but I think it illustrates the absence of any of that formula throughout section 8. I don't agree with there being a need to have equal union and non-union, though I understand the motive for it. But I think the whole of section 8 is really dangerous, really high risk.
Mr Kennedy: I also agree that section 8 is the crux of the credibility of this particular enterprise for the government. It seems to me that everything, from the composition in terms of a minority, which is where the government basically abdicates its interest if this is the route it chooses to take, to the use of the word "may" -- if we're not able to say "shall" and at least have a token representation from consumer, business and government, we really have no basis under which to entrust these organizations with the public dollars and the public trust they're supposed to be taking forward.
Although as a new member I'm given to understand it's not a particularly fruitful enterprise, how might I fashion an amendment to that to find out the will of this committee?
Mr Wood: If you're addressing the question to me, Mr Kennedy --
Mr Kennedy: I am.
Mr Wood: -- I can take instructions from you to present an amendment to this committee.
Mr Kennedy: The amendment I would like for subsection 8(1) would be to indicate that the minister does control the majority of the board. For (2) --
The Chair: Excuse me, Mr Kennedy. We're presently discussing Mr Crozier's amendment.
Mr Kennedy: Pardon me. I'll accept that ruling out of order, and I'll come back at the appropriate time.
The Chair: We'll give you an opportunity.
Mr Crozier: I guess we have agreement that we know the problem, we know the intent. I don't know whether this is the way to solve it. We have had representation from CEC Systems. I might mention for the record that there is a letter from Allan McLean, MPP, which brings note that from Magnum Elevator Co there is a letter which again brings this concern forward.
If proposing this amendment isn't the appropriate way to address it, I ask for some assistance. This goes to what my colleague Mr Kennedy brought up earlier today -- and it may be going to the extreme the other way -- the suggestion to one of the other presenters that perhaps the board should be so totally at arm's length that it shouldn't contain any vested interests.
We're trying to find some balance here and answer the concerns. As Mr Klees and others brought up, I agree, it may only be one company. Right now we're told about 28% to 30% of the industry is non-union. I suppose we could talk about three-to-one representation, union to non-union, but that may change as well. We're merely trying to address the problem.
Mr Flaherty: With respect to section 8, I should point out that which is fundamental, that is, that this is a self-management bill. If a majority of the directors were to be appointed by the government, by the minister, then the administrative agencies, and there will be more than one, would become government agencies, for many purposes, thereby defeating the purpose of the bill, which is why the bill provides that the limitation of the minister's appointments is to a minority.
The other point is that there is going to be a number of organizations, and each industry is different, as we've heard here with respect to union, non-union, with respect to numbers in the industries, large companies, small companies and so on. The idea of the legislation is to permit the minister to have the discretion in his negotiations with respect to each different industry to arrive at an appropriate board composition.
Mr Kormos: That's why I wish Mr Flaherty to come clean, because it's either self-management, in which case the government has no business appointing anybody to it, or it's going to be balanced by virtue of a framework, none of which is articulated in the bill, or it's going to be a tool of the government.
Legislative counsel, I would ask of him, what happens -- your articles of corporation, whatever they are, tell you you're entitled to X number of directors. Now, what happens if the corporate body itself fills those positions? The government's hands are tied, it seems to me, at that point, because how can the government appoint people when the bylaws of the corporation wouldn't permit any more directors? Do you understand that, Chair? Is it an unfair question? I don't know. It seems to me to represent inherent contradictions. This thing is a dog's breakfast.
Mr Parker: I can't take it any more. If the corporation isn't properly constituted, it's not going to get the powers delegated to it in the first place. So the question's a nice one to kick around but it's not terribly helpful in trying to assess this legislation.
The Chair: Could I suggest something? Could we stand this one down, because Mr Kennedy wishes to bring an amendment forward. It's going to take unanimous consent, so if I hear a no, that's fine. We'll just leave it for a moment, go on and then come back to it, because there is an amendment that you can work out. Does that sound fair? Is there an objection to that?
Mr Flaherty: Can we deal with the motion that's on the floor now, the one about union and non-union? I think that's been canvassed.
The Chair: We can deal with that and then I'll make the suggestion. Are there any further comments or questions in regard to Mr Crozier's amendment? If not, shall the amendment carry?
Mr Kormos: Recorded vote, please.
Ayes
Crozier, Kennedy.
Nays
Doyle, Flaherty, Guzzo, Hudak, Ron Johnson, Klees, Kormos, Parker.
Mr Kormos: We could sing Solidarity Forever.
The Chair: I thought that Mr Kormos had made the first mistake I'd seen him make.
Mr Crozier: You guys are in trouble; he's on your side.
The Chair: I'm suggesting that we set it down and proceed to the other sections. Is there any objection to setting it down? That is section 8. Okay, shall do.
Mr Klees: Might I just add a comment? I'd like to refer to the minister's statement.
The Chair: I'm sorry, we've set it down, Mr Klees.
Mr Klees: Okay. I thought it might be helpful for dealing with it.
The Chair: We're going to come back to it, so you're going to have your opportunity.
Mr Klees: Fair enough.
The Chair: We are now dealing with section 9, and in particular, there are two government motions. Mr Flaherty, would you --
Interjection.
The Chair: No, we've left it. We'll come back to it.
Mr Flaherty: I move that subsection 9(1) of the bill be struck out and the following substituted.
I'll explain this in a moment, I'll just read it first of all.
"Employees
"(1) Subject to the administrative agreement and subsection (3), a designated administrative authority may employ or retain the services of any qualified person to carry out any power or duty of the authority relating to the administration of designated legislation delegated to the authority, including the power to appoint persons under the designated legislation if the power is delegated to the authority."
What is happening there is that the words in the fourth line "except a crown employee" are being deleted by the motion. The reason for that -- and there's a further proposed amendment to subsection (3) -- is to permit crown employees who are on assignment who are seconded to be employed by ministry businesses.
The Chair: That's good old plain language for you.
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Mr Kormos: It's also part of what the real thrust of this bill is all about. This is scab legislation. It's anti-union legislation. It's designed to gut the OPSEU staff at consumer and commercial relations, because Mr Flaherty asked us to look at his amendment to subsection (1) in light of the amendment, which is the inclusion of subsection (3), and it indicates that a crown employee who accepts employment in addition to being in assignment to, that is to say, seconded, shall be deemed not to be a crown employee for the purpose of this section for the period of the employment. That's been seen in a few other places over the course of the last 12 months.
Clearly the government is gutting the Ministry of Consumer and Commercial Relations and wants to negate in advance any possible arguments that could be raised about the previous employee of the government whose job is terminated with CCR who then may well be hired on by this new authority. This is similar to the stuff that's being proposed to replace the LLBO and the Ontario Gaming Commission with their arm's-length agency where they want to be very certain that nobody has successor rights as they move on into the arm's-length agency. I'm certainly opposed to this. This is not what it appears to be, but at the same time, having said that, it's everything that the bill is all about.
The Chair: If there are no further questions or amendments --
Mr Flaherty: May I just reply very quickly to that in terms of it being anti-union? In the absence of the amendment, OPSEU members who worked for the provincial government would not be able to take these jobs with these administrative authorities, so I don't see how it's an anti-union provision. In fact, it preserves job opportunities.
Mr Kormos: Bull-crap, Mr Flaherty, because if OPSEU members still had jobs with the government, they wouldn't be looking for jobs with the new agency or authority. It's only going to be the OPSEU members whose jobs you and your government are killing who are going to be in a position to be looking for other employment.
Mr Flaherty: You used to have a job with this ministry, didn't you?
Mr Kormos: That's right, and it's a shame that we weren't there long enough to implement public auto insurance, but that's an old line. I'll have to wait for the next round.
Don't try to pull that stunt on us. You know darned well that's doublespeak. If an OPSEU worker in the Ministry of CCR still has a job with the Ministry of CCR, that OPSEU worker ain't going to be looking to work with this new administrative authority, and what this does is make sure that an ex-CCR employee doesn't try to raise the argument of the administrative authority being a mere artifice in terms of whether or not that person continues to really work for the government, because the two roles are parallel. This is identical to the stuff that's happening with the elimination of the gaming commission and the Liquor Licence Board of Ontario where both OPSEU and OLBEU members are being attacked, and that's the purpose of this amendment. Please, Mr Flaherty.
The Chair: Thank you, Mr Kormos.
All those in favour of the motion of Mr Flaherty amending 9(1)? Against? There is no recorded vote. Carried.
Mr Flaherty, you have a second motion?
Mr Flaherty: Still dealing with section 9, Chair.
I move that section 9 of the bill be amended by adding the following subsection:
"(3) A crown employee who accepts employment in or assignment to an administrative authority shall be deemed not to be a crown employee for the purpose of this section during the period of the employment or assignment, as the case may be."
The reason for this -- it relates to crown liability -- is to avoid an agency relationship between the government and the agent or agency being considered a crown agency, so it deals with the liability of the crown for the individual who would probably be seconded or on assignment, which are categories of status recognized under the Public Service Act of Ontario.
Mr Kormos: Thank you. That's exactly what I just said. If only you had turned the page five minutes sooner, Mr Flaherty.
The Chair: If there are no further questions, all those in favour of the motion? Carried.
All those in favour of section 9, as amended?
Mr Kormos: Chair --
The Chair: You didn't ask for a recorded vote.
Mr Kormos: No, no: All in favour, and then all opposed.
The Chair: I counted a majority. I didn't know which way you were going to vote, Mr Kormos. It didn't matter in that case.
Mr Kormos: That's an interesting reflection of the process.
The Chair: Section 9, as amended. All those in favour of section 9, as amended? All those opposed? Thank you.
We are now dealing with sections 10 to 14, inclusive. Questions or comments?
Mr Crozier: It's more or less a comment and it goes back to what was just said a moment ago about appointing a crown employee so that it won't be -- a crown employee who accepts employment shall not be deemed to be a crown employee.
The Chair: Sorry, which section --
Mr Crozier: We're talking about section 11, crown liability. It was referred to just a moment ago in section 9. I realize that it says, even in the second paragraph, or at least in the description of section 11 it says in the second paragraph, "This is a standard provision limiting crown liability." For example, similar provisions exist in the Energy Act, the Elevating Devices Act and the Gasoline Handling Act.
I only want to make the point that, particularly in the area of public safety, by moving to this private inspection, I think that the government is abdicating its authority and it's going to be interesting to see how these not-for-profit private corporations that are in the inspection business then insure themselves. I can see liability insurance premiums that may even, although perhaps not, make auto insurance premiums pale by comparison.
The Chair: Are there any other comments? Shall sections 10 to 14, inclusive, carry? All those in favour? All those opposed? Carried.
We have an amendment proposed for section 15 by the government.
Mr Flaherty: I move that clause 15(1)(c) of the bill be amended by inserting "and expenses" after "costs" in the seventh line.
The purpose of this amendment is to allow administrative authorities to recover all related expenses in proceedings which they undertake.
The Chair: Are there any comments or questions in regard to that?
Mr Kormos: This seems to me to be -- when you're talking about regulations that the Lieutenant Governor in Council can make, so be it. What are you talking about when you talk about recovering costs from the parties?
Mr Flaherty: I think the concern has been that the word "costs" may be too narrow and that "costs and expenses" is broader. In some places "costs," as you know well in our court system, has a restrictive definition.
Mr Kormos: So you're contemplating then the prospect of recovering costs against a consumer who initiates a process by way of complaint?
Mr Flaherty: No, this is within the industry. This might be, for example, a real estate broker being the object of a proceeding or prosecution or somebody else within one of the designated industries.
Mr Kormos: How does that not include a consumer who makes a complaint on whose behalf the proceeding is initiated?
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Mr Flaherty: It's designed for the bad guys. It's designed for when they go after the bad guys, and it is an issue which is often raised with respect to other consultations. It was raised here actually by the witness from CRAT about the difficulties people have accessing systems of administrative justice because of costs and not being able to recover their costs. The purpose of this is to act as a further discouragement to the bad guys by making their financial exposure greater. That is, they'd be liable not only for costs in the traditional sense, but also for other expenses incurred by the administrative authority in its enforcement function.
Mr Kormos: I hear you, but it looks pretty strange to me.
The Chair: Are there any further comments or questions in regard to the proposed amendment moved by Mr Flaherty? If not, all those in favour? All those opposed? Carried.
Shall section 15, as amended, carry? All those opposed? Carried.
Are there any questions or comments in regard to sections 16 to 28, inclusive?
We are dealing with sections 16 to 28, inclusive. Any questions or comments? If not, shall the sections carry? All those opposed? Thank you. Carried.
Now we're proceeding and reverting back to section 8. Mr Crozier.
Mr Crozier: For Mr Kennedy; it was necessary for him to leave. I believe you have copies of this motion. With reference to subsection 8(1) of the bill, I move that subsection 8(1) of the bill be struck out and the following substituted:
"(1) The minister shall appoint at pleasure one or more members to the board of directors of a designated administrative authority so that the members appointed by the minister constitute a majority of the board."
Would you like me to speak to that?
The Chair: Yes, that's a properly moved motion.
Mr Crozier: It was interesting to note that perhaps one or more members on the government side thought that in fact the minister had this authority to appoint a majority of the board, and I think Mr Kennedy thought there might be some support for the fact that the minister could appoint a majority of the board.
Mr Ron Johnson (Brantford): I think again it goes back to what Mr Flaherty had said earlier, that sort of defeats the entire purpose of the legislation in that these are self-regulating bodies and should be made up in large part by either the consumers or the people in the industry.
Mr Kormos: I think I understand where Mr Crozier's coming from; I know he sits on the committee that reviews government appointments and I appreciate his intent, but in view of the dogs and Tory hacks that are running through that committee for appointments of this nature, I'm quite frankly concerned about the way this government is exercising this appointment power, having this power.
The Chair: Mr Crozier has two amendments. The first one is before us that he has read into the record. Any other questions or comments? If not, all those in favour of the motion? Do you wish a recorded vote? All those in favour of the proposed amendment by Mr Crozier? All those against? The motion is defeated. Mr Crozier, will you be proceeding with the section portion?
Mr Crozier: Yes.
The Chair: Thank you. If you'd read it into the record.
Mr Crozier: I also told my colleague that if these were successful I would help take some of the credit and if they weren't, I'd make the committee know that there are his motions. But we are a team. I move that subsection 8(2) of the bill be amended by striking out "may" in the second line and substituting the word "shall."
Mr Kormos: I want to indicate my support for this amendment, although I'll be voting against section 8 in any event because, as I've indicated earlier, I think it goes to the crux of it and the whole structure fails as a result of it. Clearly the intent of subsection 8(2) is to require the minister to ensure balance. It addresses the vacuum that we talked about earlier and that is that there is nothing in the bill that would insist there be a balance in the board structure of these respective agencies and I think that's imperative, so I appreciate the intent of this and I think any fairminded, reasonable person would. I intend to vote for it.
The Chair: Are there any other comments or questions? If not, shall the amendment carry? All those in favour of the amendment? All those against? The motion is defeated. The amendment is defeated and we will now proceed to section 8 which was --
Interjections.
The Chair: Yes, Mr Klees. We're dealing with section 8 now, as amended. Are there any questions or comments?
Mr Klees: Yes, there are.
The Chair: Please proceed.
Mr Klees: With your permission, I would like to take a run at this section 8 as well. I realize that this is not the norm but I want to pick up on Mr Crozier's issue with regard to the balance that was raised by a number of presentations. Might I propose an amendment?
Mr Kormos: The parliamentary assistant -- the body language is incredible.
Mr Klees: The worst that's going to happen is that it will be voted down.
Interjection: No, it could be worse than that. Peter could vote with you.
Mr Klees: Let me propose this: I move that section 8 of the bill be amended by adding the following subsection:
"Fair and balanced representation
"(2.1) In appointing representatives under subsection (2), the minister shall ensure that fair and balanced representation of all interests and industry sectors is in place."
The Chair: Mr Klees has moved a motion that the minister shall do certain things which, I assume, Mr Kormos, would be under judicial review by the statutory procedures act. In any event, questions and comments?
Mr Flaherty: There are several concerns. I'll speak against the motion for these reasons. The minister may only be obliged to appoint one person to a board under the way it's drafted right now. I can start there. The other part of it, and I think you've contemplated it with reference to the Statutory Powers Procedure Act: This would impose a duty on the minister, appointing a minority of board members to ensure fair and balanced representation of all interests, whatever that means, and industry sectors.
It would also make relatively meaningless, it seems to me, the negotiation process which is imposed by clause 4(2)(b) of the legislation, that is, provision for the composition of the board of directors of the administrative authority is to be part of the negotiated administrative agreement. So without having the composition of the board known in a particular industry, and we're dealing with more than one industry, it would seem to me this would be onerous on the minister and might well result in review of the minister's decision on a rather difficult ground that the minister appointing perhaps only one board member would be obliged to represent all interests, whoever they might be.
Mr Kormos: Firstly, I want to indicate that it's an interesting amendment. Secondly, I want to indicate that it was kind of fun to watch the parliamentary assistant, who I presume is also whipping his caucus, darn near swallow his bubble gum when Mr Klees read the amendment. But I think -- wait a minute -- I think Mr Klees is on to something, because it's almost as if there's a residual appointment by the government because Mr Flaherty says that, by and large, they want the industry to be responsible to make up the board. What this suggests to me is, this amendment says that if the government's going to appoint people, it has to appoint people with the goal in mind of perhaps not creating balance but reaching towards balance. In other words, the government goal in appointment is, if it observes that a board is overly industry-dominated, then this amendment would seem to call upon the minister to appoint people to create, let's say, a consumer balance, or vice versa.
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I think this retains a whole lot of individual power in the ministry itself, and flexibility, but very fairly and adequately defines the role of the minister and I bet you that if you asked a couple of assistant deputy ministers, bureaucrats if you will, they would find your amendment, from their professional perspective, to be a highly appropriate one.
I think that is an interesting amendment. I think it's one the committee should consider in the interests of making this bill work a little better and I seriously thank Mr Klees because he's done a little bit of a balancing act, and by God, this committee process that we're in right now just might start working if people told their whip to go pound salt once in a while and really fulfil their responsibilities to their constituents and to their conscience by genuinely participating in this kind of dialogue, listening to the input that, as in this case, Mr Klees provided, and exercise some power around here. The whole system may end up being a little bit more democratic and a little bit fairer and, although I don't want to prejudice Mr Klees in any way, I suspect, subject to further debate, that I am going to support that.
The Chair: It's surprising how democratic our party is. I'm very proud of it.
Mr Crozier: We shall see. I also appreciate Mr Klees's attempt to assist us in this manner. I think we all understand the intent behind this and we're searching for a solution for it and, therefore, I appreciate this attempt and I'll be supporting it as well. Just a comment about the parliamentary assistant's suggestion that this may make the minister's job more difficult: Frankly, I don't care. If it is more difficult perhaps he'll then better deserve his $130,000 a year or so.
Mr Kormos: Is it $130,000?
Mr Crozier: Who cares?
Mr Flaherty: In dealing with the practicalities, if I may for a minute, of the legislation -- we're dealing with real estate agents and brokers and the travel industry. It's quite directed in the legislation. So when we're dealing with the safety organization this amendment would require a rather large board to represent all the interests that would be involved in that safety organization. As I say, I don't mind the minister working hard, of course, but I don't think the onerous duty should be placed on him which might well not be capable of being satisfied without a board of 40 or 50 people.
Mr Kormos: I can't understand how you would respond that way when there appeared to be a general agreement that the intent of this was to say that if the minister -- the minister, as I understand it, doesn't have to appoint anybody to a board. But if the minister is going to exercise the power to appoint somebody to the board -- somebody or somebodies -- then the minister has to do so with the goal in mind of correcting an inherent imbalance or surely not creating a greater imbalance. That's not to say he or she has to create balance, but that the type of appointment has to be such that it doesn't aggravate the imbalance but rather tends towards generating balance.
That's as I understood it coming from Mr Klees, so your comments don't apply. It doesn't mean the minister is obligated to create balance; it means that if there are nine industry reps and the minister is going to think about appointing somebody, he'd better start thinking about a consumer rep.
Mr Klees: Subsection (2) is the subsection that deals with the appointment and it, in effect, indicates that the minister may appoint. This is a follow-up to that and it's simply saying that when appointments are made under subsection (2), certain considerations or certain balances should be taken into consideration. So I don't think this in any way suggests that every interest must be taken into consideration, because subsection (2) deals with that.
The Chair: If there are no other comments or questions, shall Mr Klees's motion of amendment carry?
Mr Kormos: Recorded vote, please, sir.
Ayes
Crozier, Guzzo, Klees, Kormos.
Nays
Flaherty, Hudak, Ron Johnson, Parker.
The Chair: In keeping with the fine tradition of committees, I of course have to vote against this as the deciding vote.
Mr Kormos: One moment, if I may, to talk about the fine tradition of committees.
The Chair: I am informed that's the tradition of committees where a bill proposed by the government is requested to be amended. I would do the same if it were in fact in opposition.
Mr Kormos: But, Chair, we've had a revolution. We've been told that. We've been told that. June of -- Chair, please, if I may.
The Chair: Mr Kormos, are you disagreeing with my decision? I just want to get your position.
Mr Kormos: In June 1995 we had a revolution. We also, we were told, had an injection of common sense. I appreciate that it wasn't the Reform Party that took power in the province, but I understand there are more than a few of the government members who hold Reform cards federally to accompany their provincial Tory memberships. They've spoken to me about it. Some are very outspoken about it. It seems to me, Chair, that it's about time for you as Chair to break with tradition and to vote with your conscience and with your common sense.
You know full well that Mr Klees has presented here -- and you'll note who he received support from. He got support from Mr Guzzo from Ottawa, a fairminded member of the committee, and he got support from Mr Crozier. He got support from myself. He's turned what was a very partisan and sometimes divided committee into something that has the capacity to be united and to work in a non-partisan way in the interests of Ontarians. I urge you, Chair, to recognize the power you have. You have this power to reject tradition in the way that Mike Harris rejected tradition in June 1995. Please, Chair.
Mr Parker: He didn't reject tradition, Peter.
The Chair: Thank you, Mr Kormos, but if I don't vote at all, the motion is defeated in any event because there isn't a majority. So the motion is defeated. We are now proceeding to --
Mr Kormos: Which way did you vote?
The Chair: In section 8, the only amendment that passed was the French-language amendment moved by Mr Flaherty. Shall section 8, as amended, pass? All those opposed? Section 8, as amended, passes.
We are now on to the schedule to the bill. Are there any comments or questions in regard to the schedule at the end of the bill? If not, shall the schedule carry? All those opposed? The schedule is carried.
Shall the long title of the bill carry? All those opposed? The long title carries.
Shall the bill, as amended, carry?
Interjections.
The Chair: I'm sorry. Questions or comments?
Mr Kormos: I want to speak to the bill, obviously.
We heard during the course of two brief days -- and you should know that there was a submission made by the Consumers' Association of Canada, because I know the Chair received it. It was addressed to the Chair and to committee members. Here's the Consumers' Association of Canada, who one would expect to have been a party to consultation regarding this bill, and they've indicated that the invitation to participate came only after the law was already drafted, so there was no consultation with the Consumers' Association of Canada prior to this bill being presented. The invite, further, came only five days before the legislative hearings on Bill 54.
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I know that each of the three caucuses was invited to produce a list of participants in what consisted of a mere two afternoons of hearings, but that deal was struck at such a time by the House leaders that there was precious little notice given to interested parties. The Consumers' Association of Canada points out that only the richest organizations with full-time employees could afford to produce a carefully researched brief in such order. This method of consultation, the one this government has chosen, guarantees that legislative privileges will be designed for the wealthiest special-interest groups or for anyone with favoured early access to the drafting of legislation.
The consumer association goes on to laud the government in its approach to insurance reform. The consumer association recognizes that the government, without having prepared a bill, went to the public to talk about problems under the status quo with respect to the insurance legislation. As you know, I was fortunate to have participated in that at a modest level, and while it wasn't the most open-minded of consultations, I have to concede that the government came forward with what was merely a draft as compared to a bill that had already passed second reading. The Consumers' Association of Canada criticizes the procedure with Bill 54 in contrast with what the government did with the auto insurance legislation, and that was of course led by Mr Sampson.
I am concerned about the lack of consultation prior to the drafting of the bill. It was strange. All these folks who came before this committee in the modest two days and we didn't really ever get a detailed understanding of how the government came about with this proposal.
You heard the minister here yesterday afternoon during his 20-minute slot reading the prepared text which said with great fanfare that this was all about reducing red tape. Now, that's got some spin. A whole lot of money has been spent on focus groups by the government caucus, and on polling and surveys, a whole lot of taxpayers' money, to determine that the red tape phenomenon is something that has some currency with the public out there.
What we find out, though, when we have parties before us who have direct involvement, in almost all cases as regulated industries, professions, quasi-professions, and we ask them, "Where's the red tape that the government's going to get rid of?" there's precious little to respond. What it amounts to is having to fill out an application once every year or two and sending it in with your money and getting your licence in the mail. The groups that appeared before us said, "Well, yes, I guess that's what the government must mean when they talk about red tape." So we're not talking here about a process that eliminates red tape.
Mr Daniels, the ADM, when the minister called upon his expertise because the minister was floundering a little bit and he reached out to a bureaucrat, and bureaucrats know they're going to survive any number of ministers and bureaucrats don't mind being life buoys for briefs periods of time for ministers, says, "At the end of the day, a privatized regulatory body can use electronic filing." I presume it's the same sort of thing as when my accountant does the income tax and instead of filling out a form, he zaps it into whatever it is. I've asked him not to do that, because when you do the electronic filing with your income tax, it takes work away from PSAC employees, so I've instructed my accountant to file my income tax in written form and, quite frankly, I'll be encouraging every businessperson I know of to be using written forms to ensure that jobs are a part of this process.
But the assistant deputy minister said that's what it's going to do and seemed to acknowledge that the government could be doing that itself. It would be just as easy for the government, this revolutionary government, this commonsensical government, to be investing in that type of electronics or hardware that it seems these respective regulatory bodies are going to have to buy so that people can electronically file with the Ministry of Consumer and Commercial Relations as it exists now. So the red tape argument is bogus. It's chimerical. It's a scam. It isn't there, and that's what witnesses before this committee told us.
Then we have to go on to see whether it's going to save anybody any money. Now, that's where we really got into some interesting discussion. The minister was darned glad, you can count on it, that there was only an hour allocated to the minister's presence here, 20 minutes for his presentation and 20 minutes for each of the two opposition caucuses. Because, Chair, you know, I could see the glint in your eye as the minister was starting to flounder. As he was treading water and sinking deeper and deeper, I could see by the glint in your eye that you too recognized that he was happy to get out of here because you saw, as did everybody else on the committee, the minister obfuscating when it came to things like the number of jobs that are going to be lost at the Ministry of Consumer and Commercial Relations.
The minister says he doesn't know. The staff say they don't know, the managerial staff. These are the high-priced ones. These aren't the ones that are going to get cut. These are the high-priced ones. Well, that's very strange, because how can you approach this without knowing how many staff are involved in the delivery of these services?
We were given by Mr Daniels, who is the assistant deputy minister, some numbers, which I have no reason to disbelieve, about the gross revenues and net revenues when it comes to the three areas specifically of regulation. In the real estate area, $4 million gross revenues and a cost of $1.5 million, so a net of $2.5 million. In travel, much narrower, a much closer profit margin, but still a gross of $400,000, we're told, and a cost of $287,000. In the motor vehicle end, you're talking big bucks here.
The other interesting thing is, the minister blew it for just a minute. You'll recall that the minister started talking about these millions of dollars as being, oh, but a small percentage of the overall cost of government, and I saw a couple of the government caucus member wits grimace when the minister did that, because they recognized that he made the major faux pas of a whole lot of liberal type politicians when they try to dismiss cost by saying, "Oh, but it's so little in the total scheme of things." That's exactly what the public is sick and tired of hearing.
In any event, we're left with approximately $4.9 million in lost revenues, net revenues, if the ministry is no longer in the business. That was put to the minister, Chair. You were here. I know you were. That was put to the minister and he said no, even though the regulatory responsibility is going to pass on to these corporate bodies, these administrative authorities, which are supposed to be fully funded by the industry they regulate, the government was only going to suffer, at the worst, a marginal reduction in the net revenues. How can it be that the government's profit margin isn't going to be impacted here, the profit line of $4.9 million, when the industry is going to be fully funding a non-profit administrative authority to do the regulatory process? Somebody is going to get whacked twice, because you can't fund the administrative authority and still pay the full revenues to the government unless you're being hit twice and unless you're paying more.
So now we have this scenario where this industry that's going to be regulated, be it the motor vehicle dealers, be it real estate, be it travel agents, it's going to end up paying more, which means their consumers are going to end up paying more, and at the end of the day, hard-pressed people here in the province of Ontario are going to be gouged again.
That leaves one with the necessity of contemplating as to what the real motive is here, because everybody agreed that there is really nothing inherent in the administrative authority structure that the government is proposing in this bill that made the administrative authority more efficient than what the Ministry of Consumer and Commercial Relations was. I mean, heck, we had the minister here. If he wanted something to change within the authority of the ministry, he could have it changed. It's as simple as that. He's got very competent bureaucrats over there who are designed to implement the sorts of changes that a minister of the government of the day tells them to do.
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I'm left with the irresistible conclusion that two things are happening here: One, the government doesn't give a tinker's dam about consumer protection here in the province of Ontario. We're witnessing the gutting of consumer and commercial relations. Mr Sterling, at the end of the day, won't be transferred; his ministry will simply disappear. We see that happening not only with this bill but with the so-called merger of LLBO, a part of LCBO, and the gaming commission, as an illustration once again of how the ministry is being gutted when that's being transferred over into an arm's-length agency.
Two, the government is hell-bent on depopulating the public sector workforce and destroying OPSEU or OLBEU or any other unionized workforce that is in the public sector. That's where we got into those discussions about making it clear that -- oh yes, section 9. That anticipates the argument that they really are crown employees, even though they are working for one of these administrative authorities. The government knows full well what they're doing: They're tearing at the guts of organized labour within the public sector and they're abandoning consumers and, as Mr Little from the Ontario Public Service Employees Union indicated, leaving very much the fox to run loose in the chicken coop.
The New Democratic Party, needless to say, will not be supporting this legislation, either here in committee or in the House. This legislation is an abandonment of the responsibility of any fairminded government to protect consumers against predators within any one of a number of industries. It's an abandonment of that responsibility. It says: "To hell with you, Jane or John Public, Jane or John Taxpayer. You go out there and you're on your own." It also very much attacks public sector workers here in this province of Ontario. As I say, we will not be supporting this.
I also indicate that section 8, I believe, with all due respect, Chair, is very, very flawed and is going to lead to a whole lot of grief down the road when the minister cannot exercise his power because a board of directors may well have been filled by the corporate body itself, which means the minister can't add any people to the board. Bill 8 is going to rear its ugly head down the road, as I think you indicated as well in some of your comment, albeit in an unbiased way as Chair. I think it's interesting to be able to put this committee on notice in that regard so that people who want to litigate around Bill 8 can refer to the fact that it was raised right here in committee before the bill went back to the House for third reading and that everybody was put on notice that Bill 8 is badly flawed. What we have here is, as indicated earlier, a dog's breakfast.
It ought to be, as the Consumers' Association of Canada, I believe, suggested -- sent back to where it came from, and let this government get involved in a meaningful inquiry with the public as to what type of consumer protection is needed here in the province of Ontario.
We haven't seen a consumer protection act during the course of one, two -- now this is the third government that has been delinquent in that it has failed to deliver a Consumer Protection Act. I make no excuses for the last government or, quite frankly, the government before that, not that I should ever have to think of excuses for the government before that. But here we are with the third successive government that's failed to deliver on an initiative that dates back to 1987, and that is a meaningful Consumer Protection Act here in the province of Ontario.
I'm confident that if this bill is passed, with the privatized regulation of these industries, among others, we're never going to see consumer protection until the next election and the next government.
Mr Crozier: I'd just like to make a few closing remarks, and I'll attempt to be brief. A person gave me some advice one time and said that more people have talked their way out of this place than into it.
I might say at the outset that we don't have a great deal of trouble with those parts of this bill that deal with the Upholstered and Stuffed Articles Act. As I said earlier in the Legislature, it's time we were able to rip that little white label off and not feel guilty.
The Cemeteries Act, the Motor Vehicle Dealers Act, the Real Estate and Business Brokers Act and the Travel Industry Act: Although we have voiced some concern in those areas, certainly with the appropriate diligence we may find over time that those areas can very well be self-administered and very well take care of themselves. But I must say that in the way of the Amusement Devices Act, Boilers and Pressure Vessels Act, Elevating Devices Act, Energy Act, Gasoline Handling Act and the Operating Engineers Act, we do have concerns when it comes to public safety.
I agree with my colleague Mr Kormos that when it comes to red tape, it's incorrect to let anyone think there'll be less red tape, because what we are saying is that we don't inspect elevators enough, perhaps we don't have enough inspectors, we don't look carefully enough from the government's standpoint at public safety. The only thing I can imagine is that there's going to be more intervention, there'll be more inspections and it will be more closely looked at, and this very well might be interpreted by business to be more red tape.
Mr Kormos and my colleague Mr Kennedy addressed the lost revenue, and yet the minister comes before us and says there isn't going to be any lost revenue. We know that industry representatives who came before the committee couldn't understand that. They think it's going to cost less money. Well, somebody's wrong.
I suggest that the way the minister approached this yesterday was -- frankly, I'm not sure whether the minister knows. I'm not sure whether anybody here knows whether there is going to be lost revenue, whether there's going to be less cost to the industry. If the government's giving up several millions of dollars and the minister says it will be a wash, they're going to collect those several millions of dollars somewhere else, and if the industry is going to become more diligent and provide more inspection services and be more concerned about public safety, then I suggest it's going to cost the industry more money in that area. I certainly wish, in this short period of time we've had, that somebody would have been able to tell us what is going to happen.
I think this really is a case of a further attempt at reducing government at any cost, and in this case I think it's at the cost of consumer protection. This government -- your government, Mr Chairman, and my colleagues across -- is bent at any cost on being able to say at the end of the day there's less government out there. Notwithstanding the fact that it may cost people more money and there may be more red tape, there will be fewer employees and therefore less government.
I'm sorry this bill wasn't presented not so much as the omnibus bill that it is so that we were able to take those areas that could be dealt with more expeditiously -- although the whole thing has been dealt with more than expeditiously -- like the Cemeteries Act, the Motor Vehicle Dealers Act and others, and handle them separately and then give more time, effort, planning and concern to the parts of the act that deal with public safety.
I think the public's going to be disappointed in the long run in this. I think we're going to have some evidence down the road that things are not better. We'll simply, I guess, at this point have to keep our eye on it.
The Chair: If there's no further comment, shall Bill 54 as amended carry?
Mr Kormos: A recorded vote, please.
Ayes
Doyle, Flaherty, Hudak, Ron Johnson, Klees, Parker.
NAYS
Crozier, Kormos.
The Chair: Shall I report the bill, as amended, to the House? All those in favour? All those opposed? Carried.
There's one other motion. Mr Johnson.
Mr Ron Johnson: I move that for the purpose of the committee business over the summer recess, the Chair and the clerk, in consultation with the subcommittee, shall have the authority to make all arrangements necessary for the orderly consideration of all matters referred to the committee.
The Chair: I thank all members of the committee and will see you in August.
Clerk of the Committee (Ms Donna Bryce): You need a vote on that.
The Chair: I'm sorry. All those in favour? Carried, unanimously.
Mr Ron Johnson: I know it was a good motion, but we still have to vote.
The committee adjourned at 1851.