CONTENTS
Tuesday 15 October 1991
Ministry of Housing
STANDING COMMITTEE ON ESTIMATES
Chair: Jackson, Cameron (Burlington South PC)
Vice-Chair: Marland, Margaret (Mississauga South PC)
Carr, Gary (Oakville South PC)
Daigeler, Hans (Nepean L)
Farnan, Mike (Cambridge NDP)
Johnson, Paul R. (Prince Edward-Lennox-South Hastings NDP)
Lessard, Wayne (Windsor-Walkerville NDP)
McGuinty, Dalton (Ottawa South L)
McLeod, Lyn (Fort William L)
O'Connor, Larry (Durham-York NDP)
Perruzza, Anthony (Downsview NDP)
Wilson, Gary (Kingston and The Islands NDP)
Substitution: Poole, Dianne (Eglinton L) for Mrs McLeod
Also taking part: Coppen, Shirley (Niagara South NDP)
Clerk: Carrozza, Franco
The committee met at 1607 in committee room 2.
MINISTRY OF HOUSING
The Chair: We are reconvening to complete the estimates of the Ministry of Housing. When we last met we had approximately two hours and 50 minutes before completion. We have agreed to allow the opposition parties to participate in the rotation directly with the minister. I would like to begin with Ms Poole.
Ms Poole: I think it is probably appropriate if we pick up where we left off last week.
Mrs Marland: Give us 20 minutes.
Ms Poole: Sure. The Conservative critic has just suggested, since we will just have the opposition parties rotating, maybe 20 minutes, if that is all right with you.
The Chair: That is fine; 20 minutes is just terrific. Proceed.
Ms Poole: I think maybe it is appropriate that we pick up where we left off last week when we were talking about some of the aspects of the rent review legislation. One of the items of concern to both tenants and landlords in the legislation was the fact that appeals were extremely limited under Bill 121. Only if there is an appeal of law, not even on the facts, can one appeal a decision of the rent review administrator or the Rent Review Hearings Board.
I wonder if perhaps the minister could comment on why the ministry decided to abolish an arm's-length independent appeal board and, if you had reasons for doing so, why it was not replaced with something else that you might feel was more suited to the purpose but still accomplished the goal of allowing the rights of appeal to tenants and landlords.
Hon Ms Gigantes: As the Liberal critic will be aware, one of the goals in this legislation was to try to make the legislation as simple, as clear and as understandable a process for people to follow as it could be. That was part of the reason behind the initial decision to try to move to a more straightforward and definitive kind of decision-making process. Certainly the ministry and I have noted the comments that were made by both landlords and tenants and we will take that under advisement in considering amendments to the legislation.
Ms Poole: I do not quite agree that by removing the appeal board it really contributed to a straightforward, clear process. In fact, this legislation, Bill 121, has actually only one clause fewer than the much-maligned Residential Rent Regulation Act, which was said to be very complex and convoluted and very long and extensive. When all your hatchet jobs and your cutting is through, we have a piece of legislation that is of the same length and in many ways is as complex, if not more complex. I am not sure where I see that the reasoning of eliminating the appeals board is really helping the process.
Hon Ms Gigantes: What we did was produce a better bill with the same number of clauses.
Ms Poole: Perhaps the minister will allow me to disagree with her on that particular one. I am not sure we see eye to eye. Has the minister investigated some other alternatives for appeal?
Hon Ms Gigantes: Yes, we looked at the alternatives. We have taken seriously the comments from the various groups, both landlord and tenant. It is something we are considering very seriously as we look at the amendments.
Ms Poole: Could the minister perhaps elaborate on the types of things she has been looking for in her quest for a solution to the appeal dilemma?
Hon Ms Gigantes: In general terms, something that is still straightforward, simple, clear to people, but also permits some kind of appeal process. Those would be the general guidelines I could define.
Ms Poole: Would the minister consider that the phrases "arm's length" and "independent" are integral and crucial phrases for any type of appeal process she might be thinking of?
Hon Ms Gigantes: The problem with the elaborate kind of appeal process in the existing legislation, Bill 51, is that it created a great amount of administrative work. It created, therefore, a great deal of delay. People who were taking part in the process and went through to the appeal board ended up feeling enormously frustrated because decisions were taking so long. That is something we want to try to avoid.
Ms Poole: I guess it comes back to a matter of the chicken and the egg. Certainly my understanding over the last number of years, having worked with both rent review and the appeals board, is that the delay was never really at the appeals board level. It was just a backlog they received from rent review which was holding it up. Obviously there are things that could have occurred to expedite faster hearings and faster decisions. I am not sure I could honestly attribute the delay to the appeals board.
One of the suggestions we received in Ottawa from the Federation of Ottawa-Carleton Tenants' Associations was that there be an appeal mechanism within the ministry, that the director of rent control or rent review, whatever one might like to call him or her, would actually be responsible for taking care of appeals and that an amendment might be brought forward to the legislation. I think both tenants and landlords have a great deal of concern about this.
There is not a great deal of trust in the rent review administrators to begin with. They feel that by keeping it within the ambit of the Ministry of Housing rent review, you are really not going to get any independent decisions, particularly since the director of rent review would be subject to any policy directives from the ministry. I do not think that in any way, shape or form could be seen as an arm's-length adjudicator.
Hon Ms Gigantes: Does this mean you would not favour such a course?
Ms Poole: Certainly it would be better than nothing, but I would certainly favour an arm's-length appeal process. I think it is very important when you are looking at it to take a couple of factors into account. One is the arm's-length factor which I just mentioned and the other is ways in which the current appeal board could be streamlined to make it more effective.
For instance, right now there is a choice between one and three members on a panel. I have a lot of sympathy for the tenants and the landlords who ask for three members on a panel. They want to make sure they get the benefit of the advice of three members rather than one and they figure it is a fairer process. For instance, that is one where I would be willing to compromise. I would rather have one arm's-length adjudicator than have to compromise and say that it should be internal and kept within rent review.
I guess the short answer is that I would not be in favour of doing it, but if all else fails, that might be something certainly that is preferable to what there is now.
Hon Ms Gigantes: The Federation of Ottawa-Carleton Tenants Associations also made a suggestion about the length of time that should be permitted before a decision is made about whether there should be some kind of review. That is another matter we will take under consideration.
Ms Poole: There was one other thing I was going to ask you about the appeals process. I just have to figure out what it was. All those votes on Bill 70 have scrambled my brain.
Mr Daigeler: Do you want me to ask something in the meantime?
Ms Poole: My colleague has asked if he can ask a question in the meantime, while I am unscrambling my brain.
The Chair: He has both your permission and mine.
Mr Daigeler: Thank you very much, Mr Chairman. I apologize for not having been here a little bit more on the estimates for Housing, but we have to spread ourselves around sometimes, not being as many as we used to be.
Minister, you may have answered this already, but I am interested in your own agenda in terms of getting private rental construction going again in this province. Do you see this at all as a goal?
Hon Ms Gigantes: It would be a goal if we thought it could be practically effected. The costs involved in producing rental housing these days in areas where urban land is very expensive and where financing costs are high make that a very difficult target to achieve. Over the last year, for example, we have found there has been very little private rental market production. We expect that will probably continue to be the case. It has also been true in other provinces, some with some method of rent review, some without. It seems to be a general phenomenon in urban centres in North America.
On the other hand, we have seen the private housing industry produce condominiums which in turn are rented, often at the level of about 50% of the units in a given condominium project. That has provided some supply, which has been very useful to us over the last 10 years or so. We are hoping we will be able to count on that method of financing, for the private market to be producing units that will be available at relatively affordable rents.
Mr Daigeler: Again, I apologize if you have provided it already, but if not, would it be possible to give us information over the last five years on what the new apartment rental construction has been in the province? You indicated that in other provinces the situation has basically been the same. I would also be interested, if you have that, in what the construction numbers were over that same period in the other provinces. If that is available I would appreciate it.
Hon Ms Gigantes: I am sure it is available. I am not sure whether it is available here. Would one of the ministry staff have figures like that?
Mr Daigeler: Again, I do not have to have that right now, but if you can provide it in writing.
Hon Ms Gigantes: Sure.
Ms Poole: Meanwhile, back at rent review, one of the problems people have with the very limited right of appeal under the legislation is that they are not terribly happy with the process leading up to it.
Right now under Bill 121 there is an automatic administrative review at the time the application is filed unless one of the parties advises that they wish to have a hearing within 15 days. First of all, there is a difficulty in the very tight time line, as the minister can appreciate. It would take two weeks just to get a meeting of the tenants' association together to make a decision on whether they want to have a hearing. In some instances there is not even a tenants' association formed, so they have to go through that process first.
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Hon Ms Gigantes: This was the point raised by the Federation of Ottawa-Carleton Tenants' Association in their submission.
Ms Poole: I think it was raised by quite a few tenant groups actually, as well as some of the landlord groups. From talking to a number of the major tenant groups, I have also been advised that they would far prefer a process where there would be an automatic hearing, unless all parties consent to an administrative review. They feel this would get away from the problem of tenants not having adequate time, adequate notice and would allow them every opportunity to pursue their case. If the ministry does not change its mind on the appeal process and it is as limited as it is right now, the hearing becomes absolutely crucial.
Would the minister comment as to whether this is something that has been considered, or is being considered, to go to an automatic hearing process, as opposed to automatic administrative review?
Hon Ms Gigantes: In fact, all these combinations have been considered by the ministry. I certainly cannot indicate at this stage where the direction is going to come down, but all these matters are things that have been taken quite seriously in review.
Ms Poole: About the estimates of how many matters you feel would be dealt with in hearings as opposed to administrative review if Bill 121 stays in its current form, it seemed to me at the time we were in the hearings and were talking to the ministry that there were somewhat unrealistic expectations of how many hearings would actually be called for, that the numbers the ministry presented were far lower than I would anticipate.
Let's put it this way, if you have only one kick at the can, only one shot, and you know there is virtually no chance you will be able to appeal, there is an incentive built right in to request that hearing from day one. I wonder if the minister could comment on that problem.
Hon Ms Gigantes: I do not know how fine our figures would be. Again, I can ask staff if they have figures that would answer that particular question. We certainly have overall estimates of what the process might produce under Bill 121. Bob Glass.
Mr Glass: We analysed the number of administrative reviews versus the number of hearings we would expect to get at a first level. To put the bill in perspective, things we noted were the limited number of reasons people could come to rent review and the variable size of the groups that are coming. We get a lot of single-unit buildings coming in front of rent review. So although we would anticipate a large number of people wanting hearings if it were, say, a large building with capital items on the question of extraordinary operating increases, if we were dealing with a hydro bill increase in a two- or four-unit building, we really could not see people wanting to take that to a hearing. Of a total of about 12,000 applications annually that we think we would get, we think we would get about 7,200 of those coming to hearings, mainly for capital items.
Ms Poole: I remember at the Bill 121 hearings your presenting figures similar to that, or probably identical to that --
Mr Glass: I hope so.
Ms Poole: It probably is identical, but I cannot say with any certainty. It seemed to me at the time that it was fairly unrealistic. I would suspect you are going to find far more often now that when there are applications for extraordinary increases they will be accompanied by applications from the tenants for extraordinary decreases. I think tenants are going to be far more aware of what they can and cannot appeal on.
I guess, Madam Minister, what concerns me to a certain extent is that the more things change, the more they stay the same. You might be interested to know that when the Liberal government was proposing to change rental legislation a number of years back, ministry bureaucrats -- the same ones I suspect -- came to us with the same proposal: that it be administrative review without a right of appeal or, I guess more accurately, with a very limited right of appeal. Our government, in its wisdom, rejected it. I am not sure whether that automatically means in your mind that it is not a precedent you want to follow, but just for your information, I thought I would throw that out. This has been hanging around for a long time, and after a lot of thought and a lot of input, it was rejected as an option. So I sincerely hope this whole hearing appeal process gets a second look and significant amendments.
Hon Ms Gigantes: It has certainly had a second look, a third look, a fourth look.
Ms Poole: I did not hear about the latter part of my comment, "and significant amendments."
Hon Ms Gigantes: At this stage I really do not want to indicate that. It certainly has been accepted for serious review.
Ms Poole: I am actually about to go on to a separate topic, so maybe Mrs Marland can take over from here.
The Chair: I think it would be nice if you introduced the subject, the minister can think about it and we will pick it up in rotation.
Ms Poole: It is actually in reference to the cuts that were in the document the minister's staff tabled with us just prior to the estimates opening today. I would like some questioning as to how these cuts are going to come about. I think it will be a fairly significant topic.
The Chair: Okay. Mrs Marland, can we move to you, please?
Mrs Marland: That 20 minutes went quickly. First of all, I would like to thank the minister and particularly the staff, who are responsible for getting their responses to my opening statement back in writing today. That is very helpful, and impressive, I might add, over a holiday weekend.
One of the questions I raised in my opening comments was about the staffing for the rent registry. On page 4 of your answers you say there will not be any more staff required to handle the registry inquiries. That surprises me, Madam Minister, because so far under the existing legislation, the staff has not been able to handle the load. Apparently there were something like 40,000 inquiries last year 80,000 inquiries are expected this year.
Obviously under Bill 121, it must become fully operational within a short period of time after this bill is passed, otherwise it is just not going to have any meaning. My concern is that I have an example I can show you which is appalling in terms of a rent review hearing. I understand how the rent registry is going to work under Bill 121, but if in this area you do not have any more staff, I can just see more and more examples --
Hon Ms Gigantes: Is that the case involving 2333 Truscott Drive?
Mrs Marland: Yes it is.
Hon Ms Gigantes: Mr Chair, I meant to indicate at the beginning of our session today -- and quite forgot -- that there is a rather special reason for the delay in that case. Susan Gillespie is here from the hearings board and could make a brief comment on what happened in that case.
Ms Gillespie: With respect to 2333 Truscott, there was a special circumstance in this case because of an investigation that was being done at the Rent Review Hearings Board. One of the board members who was involved in the Truscott Drive hearing was also involved in the particular investigation at the board. Because of that ongoing investigation, the hearings that were outstanding with respect to this individual were put on hold until the investigation was complete and whatever results were necessary took place.
In this particular case, the relief came about last month; 2333 Truscott is back in the system and we are rescheduling as quickly as possible to get it moving. The delay in this case had nothing to do with staffing or workload issues; it had to do with the investigation.
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Mrs Marland: I understand that. From time to time there will be various reasons why a panel member may have to be elsewhere, not the least of which might be maternity leave or if somebody goes to a new job. It is unbelievable that these people have been waiting 21 months since they appealed their rent at 2333 Truscott Drive. I just do not understand why. Is Mr Pappas reappointed and is the hearing going forward with the original panel?
Ms Gillespie: The hearing is going forward with the two remaining panel members.
Mrs Marland: Why could that decision not have been made before? That is really ludicrous.
Hon Ms Gigantes: This has not been a simple, straightforward matter, apparently. As you will be aware, I certainly have not been the minister throughout this whole process. The people involved have been subjected to an extreme delay. The system in that sense really has not delivered to them the way it should.
Mrs Marland: Do you think a 21-month delay for a rent review hearing is appropriate?
Hon Ms Gigantes: I believe I just said I did not. Is that what you heard me say?
Mrs Marland: I would appreciate your answers with a little less sarcasm, Minister.
Hon Ms Gigantes: I do not need to have words put in my mouth, Margaret.
Mrs Marland: You are here and I am able to ask you questions.
Hon Ms Gigantes: Yes, and I am able to answer.
Mrs Marland: In re-reading the Hansard from last week, I had several people comment on your attitude in answering questions. So I only --
The Acting Chair (Mr Johnson): If the minister could just answer the questions and Mrs Marland would just ask them, that would make it much more pleasant, I am sure.
Mrs Marland: Okay, I will ask her directly.
Mr Perruzza: She is launching a personal attack.
Mrs Marland: I will ask directly and the minister can answer directly.
The Acting Chair: If we could just stick to the questions and answers, I am sure we would get along much more favourably.
Mrs Marland: Mr Richard Fink is the lawyer for these tenants. By the way, it is one thing that the ministry have been so lax in dealing with this, but the other aspect is that it is costing the tenants money because, as you know, they require a lawyer. I would like to know why the ministry would not have considered Mr Fink's request for a hearing immediately, without Mr Pappas or, in the alternative, assistance with legal fees to have the case reheard from scratch.
Hon Ms Gigantes: On those particular questions I am not capable of giving you an answer at this point. I do not know if Susan Gillespie is.
Ms Gillespie: When the hearing was adjourned initially last year, just prior to the investigation, Mr Pappas was one of three board members seized with this particular case and the hearing was adjourned, the investigation interceded and things were put on hold because of Mr Pappas's involvement. To begin again would have wasted all the progress that had been made to date in the hearings and they would have had to scratch the entire panel and start again with a whole new three-member panel.
In this case, because the panel had been seized with the issue, we waited until the results of the investigation were known and when the difficulties were cleared we could proceed with the remaining two panel members. To proceed any earlier, we would still have had to proceed with the same panel members. To wait until the situation is cleared means that we can proceed now with the history of this file, with the history that goes with the two remaining members and the continuity of hearings. You do not need to start again.
Mrs Marland: What I am hearing is that the hearing is going to proceed with two of the three anyway. Why could that not have happened in the first place? If they are going to proceed without Mr Pappas and not replace him now after -- the initial hearing was April, 1990. Since that time, when Mr Pappas has not been available, and now -- in the meantime, I must say that in writing to Mr Cooke as the minister -- this is what is so colossal -- he said in April 1991, a year later: "Matters concerning Mr Pappas are currently under consideration. It is expected that the matter of rescheduling this appeal should be resolved in the near future by the Rent Review Hearings Board." That was April of this year. I do not think November is the near future. Perhaps you can tell us when this hearing will now be convened.
Ms Gillespie: I cannot give you a specific date. It will be December or January. The issues impacting on the date of the reconvening of the hearing impact on the schedules of the tenant agent, the landlord agent and the two remaining board members. We schedule two to three months in advance. The release on this one came in September, so we are moving it ahead as quickly as possible.
Mrs Marland: I have not heard an answer about why, if we are proceeding with two of the three original panel members now, that could not have been done a year and a half ago.
Hon Ms Gigantes: I cannot answer that question. I was not the minister a year and a half ago. I was not involved in that decision nor do I have the facts that are relevant to the decision.
Mrs Marland: That is fair. You were not the minister a year and a half ago, but your government has been in the ministry for one year.
Hon Ms Gigantes: Yes.
Mrs Marland: Can anybody answer the question as to why, since you have been the government, that decision was not reached?
Hon Ms Gigantes: I understand the inquiries that involved Mr Pappas took some time. The decision was to wait, not to make a pre-decision about what would result from that inquiry and not to move ahead on a case in which he had been involved.
Mrs Marland: Would the ministry be willing to help the tenants with the cost of these hearings since the extended cost is not of their doing? It has been totally the action or the inaction of the ministry in not replacing Mr Pappas or not making the decision to go ahead, since the initial date of the hearing is a year and a half ago.
Hon Ms Gigantes: I can understand that the tenants would have suffered inconvenience and delay and they might very much wish to have the matter settled for their own financial affairs. However, I do not see that the postponement has in and of itself necessarily created extra costs. But I can certainly take a look at that.
Mrs Marland: You would be willing to take a look at it?
Hon Ms Gigantes: I will take a look at that to see if extra costs have been generated. It seems to me that whether the hearing is one year or the next, the cost of the lawyer is going to be the same.
Mrs Marland: I appreciate that you will take a look at it on behalf of those residents. There is an additional cost because the lawyer has been contacting the ministry to ask when this hearing was going to be reconvened. You and I both know that would involve some time on the part of the lawyer acting on behalf of those tenants. Obviously if it had proceeded originally as scheduled, then that additional representation by the lawyer would not have been needed. So there have been additional legal fees for them.
Hon Ms Gigantes: I was wondering if I could ask Susan Gillespie if there is any further information she thinks you should have on this matter.
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Ms Gillespie: With respect to this particular address? Just that the agents are in the process of being contacted by the scheduler at the central region office and that we are moving on it as quickly as possible. There is no more information specifically on that matter.
Mrs Marland: Minister, I will ask you again about a 21-month delay in a rent review hearing. You say you do not think that is appropriate.
Hon Ms Gigantes: That is what I said. I did not quite use those words, but I think if you look at the record you will find that is what I indicated to you.
Mrs Marland: Can you then answer the question about how, under Bill 121, without any additional staff, you are going to be in a position to eliminate -- this particular delay, I recognize, is because of a particular panel member -- the existing delays in the rent review appeal process? We have the figure of 80,000 projected for this year. How is your ministry going to handle that without any additional staff?
Hon Ms Gigantes: In terms of the hearings board, there will be no further hearings board under Bill 121 in it current shape, so there would not be a delay related to the hearings board.
Mrs Marland: No, I am talking about having the rent registry up and running, off the ground, because apparently the rent registry has not operated successfully so far, has not become fully operational yet, and yet it is going to have, obviously with Bill 121 -- I mean, how can you have it operational without additional staff? This is a simple question.
Hon Ms Gigantes: Well, we have a wonderful system. If I could, I would like to call Bob Glass back. I know he is all too eager to tell people about it.
The Chair: Especially since he has been waiting for years to say it.
Hon Ms Gigantes: In fairness, resources were yanked from that project in order to get hard at work clearing the backlog with Bill 51.
The Chair: I am quite familiar with the the software complications with this ambitious project, but please proceed.
Mr Glass: As an historical overview of the rent registry, I think it is fair to say the rent registry staff has been in place for several years. In terms of the number of calls we get that involve rent registry and rental information, we get about 650,000 a year. About 630,000 of those actually go to the field offices, so there is no change there. In fact, just last year we put a more permanent field structure in place around the client services area, so we think we are able to provide better and faster service.
In terms of the registry itself, a number of processes had to be gone through to set up a registry in the first place. That involved the registration of rents by landlords and then the checking of those rents with the tenants who were occupying the building. Suffice it to say that in the rush of getting the RRRA started, that process never got off to a very good start. Although we got a large number of pieces of information in for close to 700,000 units, the staff in the registry has spent most of the last four years trying to update and get that information in proper shape. Because of the backlog in the application resolution, the process of checking those rents with the tenants was never completed.
However, I am happy to report that in the last year a number of things have happened. Thanks to the moratorium legislation, staff time has been freed in the field offices. They have been able to work very hard at getting the registry information updated and in shape. They have been able to put on file all the historical orders done under previous legislation, under the Residential Tenancies Act and under the residential premises rent review legislation that pre-dated that, and they have been able to add on file all the information from all the orders. There are about 800,000 units affected under the Residential Rent Regulation Act.
The next step in this process is to go with notifications for any kind of outstanding buildings not picked up under the current legislation. There are about 200,000 units in the province and we expect to start that towards the end of this month.
The long and short of it is that we will have a registry in shape by the beginning of the proclamation of this new legislation that can give us all the lawful rents on the larger buildings in the province and many of the lawful rents on the smaller buildings under seven units. This helps us in a number of ways: It helps us in terms of rent rebates information; it helps us in terms of providing instant information to tenants who phone in, as opposed to having to look through hard-copy files or search our archive records to find out rental histories on a building; and it helps us actually determine future rents because we have accurate base rents to work through. It greatly accelerates the resolution process for applications and our ability to provide information. In fact, I can conceive a situation where tenants could probably come into our office and access the information on their own if they understood how to search through our computers. It is not a particularly arduous process.
We have a number of opportunities for greatly speeding up the process. It should be much more efficient, and we will have a registry up and operating on or before the implementation of this new legislation.
Mrs Marland: When do you estimate that all the rental units in the province will be registered?
Mr Glass: The rental units for the seven buildings and larger will be captured before the end of March, 1992.
Hon Ms Gigantes: You do not mean for seven buildings, you mean for seven units.
Mr Glass: Sorry, seven units and larger, which would be about 700,000, we believe. The balance of the units, about 400,000, will be picked up over the next three to four years. There may be some very small buildings, single-unit buildings, and things outstanding.
Mrs Marland: You are saying it may take three or four years before the less-than-seven-unit buildings are on the rent registry?
Mr Glass: We will have to do that in a staged process.
Mrs Marland: So the rent registry will apply only to 700,000 units, and you are going to have 400,000 units for which there will not be a rent registry completed for another three or four years.
Mr Glass: That is not entirely correct. A number of buildings have come to rent review that are seven or less than seven units. We have those rents captured. Tenant rebate applications have come for buildings that size. We have been asked over the past four years to do rent surveys where there have been problems in specific buildings that are smaller. We have that information captured as well. We will continue to do rent surveys of any problem buildings and pick up those as well.
Mrs Marland: Can you tell me what is correct then? You said it was not correct. What is correct? Of the 400,000 units of less than seven in a building, how many will not be on a rent registry for three or four years?
Mr Glass: At the current time, I believe we have about 50,000 units of the 400,000 that are captured.
Ms Poole: Just before Mr Glass leaves, I will ask him one question about the rent registry. I have been meeting with a number of tenant advocates lately who have been dissatisfied with the way the previously uncovered units have been brought in. They feel there should be no amnesty period, that the rents are registered as of 1985. My concern with doing this is that we might end up with another enormous backlog and an inability of tenants to verify what rents were six years ago. Have you done any analysis of the type of backlog we would be incurring if, instead of using current figures, we went back to 1985 to register the new rents?
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Mr Glass: We have done a number of studies. We feel we could generate up to 12,000 tenant rebates as a result of our efforts to register -- well, some buildings are registered -- to complete the notifications process which follows the registration process. Under the current system, we are going to test-pilot the notification process in four of our offices towards the end of the month, and I think we will have a better idea of what the results are likely to be. Those will go back to 1985. Those will ask people about the 1985 rents.
My own personal feeling, supported certainly within the organization, is that the 1985 rents are becoming less and less meaningful to tenants. We do not have people who have that kind of history in one building, in many cases. With the smaller buildings in particular, we are probably better picking a more current date, as is suggested under the legislation. I honestly do not know just yet. I will have a much better idea a few months from now what a 1985 date as opposed to, say, a 1990 date would result in. I will have a much better idea though in a few months, after we have tested it.
Ms Poole: I appreciate that and I would appreciate, once you do have your results, if you could share those with us.
Mr Glass: I would be pleased to.
Ms Poole: I noticed you flicked your eyes to the minister before you said that.
Mr Glass: The minister will provide --
Ms Poole: Go to the boss, right? The boss will provide them. Okay, thank you.
Back to the area which I signified I was going to address next, and that is the expenditure reduction and cuts. I am somewhat puzzled by some of the figures that have been cited. For instance, in the memorandum, Minister, which you have signed, it states that the cost reductions include $2.01 million in administrative operating costs. I went back to page 19 of the estimates where we are looking at salaries and wages, employee benefits and other direct operating expenditures. For instance, for salaries and wages there has been a $2.068-million change from 1990 to 1991, which represents a 14% increase; employee benefits, there has been a 16% increase, and in other direct operating expenditures, there has been a $2.6-million increase, which represents 16%. So it seems to me it is a little bit of smoke and mirrors. You increase on the one hand, but then suddenly you are reducing by the same amount. I wondered if you could perhaps explain some of those. Oh, I see you have got some help on the sidelines here.
Hon Ms Gigantes: Some very expert help.
The Chair: Please introduce yourself again for the record.
Mr Temple: My name is Arnie Temple. I am the assistant deputy minister of corporate resources.
Mr Casey: My name is Tim Casey. I am the assistant deputy minister of accounting operations.
Mr Temple: On page 19, I think the bulk of the increased salary costs for this year relate to the annualization of the salary awards that were negotiated, as well as the carryover of the pay equity costs for the full implementation of pay equity in the ministry. There was also some conversion of other direct operating dollars to salary dollars in order to convert some consultant dependency into an employment situation. These were some interim measures which turned out to be ongoing. We felt it was inappropriate to continue those in a non-employment relationship.
Some of the other direct operating expenditures are related to increases in rent, increases in utility costs and other things. The reductions that were put through as part of the Treasurer's midyear fiscal adjustment were moneys taken out in the services area from communications, from travel and from other related services.
Ms Poole: Would it be accurate to say, looking at salaries and wages, that the three major factors were COLA, pay equity and conversion of contract to employee status? Is that what you are telling me?
Mr Temple: Yes.
Ms Poole: That comprised 14%?
Mr Temple: Yes.
Ms Poole: With the conversion of contract to employee status, I would assume, if you are converting to employee status, that means on the other side of the scale, somewhere in this estimates book it should show a significant decrease from the contract work. Would that be accurate, and if so, where could I find this enlightening information?
Mr Temple: You would find it in the other direct operating expenditures on page 19, which shows a decrease of $2,656,000 in ministry administration, as well as $1,365,000 in rent review boards.
Ms Poole: So that figure for the rent review boards was primarily contract people who went to employee status, or that was attrition as well, just not renewing contracts?
Mr Temple: It was contract people in the ministry generally. This was how we reallocated the funds to meet that particular need. The rent review board did not have that degree of requirement in its allocation for other direct operating expenditures and we were able to reallocate.
Ms Poole: Cutting through all the superfluous numbers, what is the bottom line? Do you have more employees/ contract workers with the Ministry of Housing today than you did 18 months ago?
Mr Temple: We have more employees than we did 18 months ago.
Ms Poole: No, no, employee/contract workers, the bottom line, do we have more or fewer?
Mr Temple: Bottom line, it is about the same. A number of the relationships have changed between the contractor and the employee situation.
Ms Poole: So if the number of employees/contract workers has remained fairly static, then a large proportion of that 14% increase would have gone to pay equity and COLA?
Mr Temple: Yes.
Ms Poole: Do we have those numbers available?
Mr Temple: I do not have them available directly. I will see if they are here in terms of how much that is.
Ms Poole: Okay.
Hon Ms Gigantes: Arnie, is it really fair to describe that as COLA?
Mr Temple: It is the salary awards and the adjustments coming from collective bargaining and other adjustments. The other thing to remember about that is that it is usually funded on a 15-month basis, because the payout was made in the next fiscal year. The contracts went from January to December, but the payout would have occurred for the January, February, March period in the next fiscal year.
Hon Ms Gigantes: This is not, strictly speaking, a COLA clause in the contract.
Mr Temple: It is not strictly COLA in terms of a COLA clause.
Hon Ms Gigantes: I just want to make sure there is no confusion on that.
Ms Poole: In addition to cost of living, what else would be included?
Mr Temple: It is the negotiated adjustment of the salaries which takes place every year, the associated additional premium and other costs, but there is not a cost-of-living formula in any of the collective agreements. We have been starting at the base at the beginning of every set of negotiations.
The Chair: Is there a step grid in some of the classification adjustment?
Mr Temple: Yes.
The Chair: And merit?
Mr Temple: There are no additional funds granted for merit.
Ms Poole: There is no merit in the Ministry of Housing?
Hon Ms Gigantes: Oh, we would not say that.
Mr Temple: There are no additional funds granted for merit -- very different.
Ms Poole: Was your reclassification on a fairly significant scale, and were those reclassifications upward or downward?
Mr Temple: I am sorry, I did not mention reclassification before.
Ms Poole: Maybe I am confused. I thought when the Chair asked you the question, it was whether some of these adjustments were due to the fact that there was reclassification.
Mr Temple: Oh, sorry. I missed that.
The Chair: When a contract person goes into the regular stream, it usually builds a department and somebody gets reclassified because he is supervising more people, and so on it goes.
Mr Temple: In this particular case, what we were dealing with is people who were employed on a consultant or a fee-for-service basis. Most of those who had employee status before and moved into a civil service status basically maintained roughly the same classification or pay range that they had before.
Ms Poole: So they have been reclassified, but not necessarily at a greater pay scale.
Mr Temple: Their status has been changed from unclassified, where they do not have a classification, which is a time-limited employment situation, to a permanent employment situation.
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Ms Poole: I would like to go to page 4 of the responses to the questions that were provided by the Ministry of Housing today. I am trying to jibe what is in item 8 there with what I see on the page entitled "1991-92 Expenditure Constraints, Ministry of Housing," and the chart that is there. One of the questions we had asked about the 10,000 units announced in the budget, which I gather you are calling P10,000 --
Hon Ms Gigantes: We have not come up with a fancier name.
Ms Poole: It is awfully boring. What does "P" stand for, project?
Hon Ms Gigantes: Program.
Mr Temple: Provincial.
Hon Ms Gigantes: Provincial.
Ms Poole: Provincial. It could stand for all of those things, I am sure.
According to the question, "How much of the cost of the new units is covered in this year's ministry estimates?" it says, "A total of $7,740,000 has been included in the 1991-92 estimates. However, this estimate has been reduced, due to program timing, [by] $80,000."
Hon Ms Gigantes: Could I ask what page you are on again?
Ms Poole: Sorry, page 4 of the responses, at the very bottom. I took this $7,740,000 to be operating expenditures; is that correct?
Mr Temple: Yes.
Ms Poole: So there we are talking about $7,740,000 less $80,000, which I still think would be -- and math is not my strongest subject -- somewhere in the vicinity of $7,660,000 that would not be taken up in this fiscal year for operating subsidies. I have asked a hard question. We have to change the guard here.
Mr Burns: Yes; the answer to that is yes.
Ms Poole: The deputy minister has said, "Yes, that is correct."
Mr Burns: Yes, $7,740,000 minus $80,000 is $7,660,000.
Ms Poole: Okay. You have just verified my math.
Mr Burns: Yes.
Ms Poole: It took you long enough. Even I was quicker than that.
Hon Ms Gigantes: He's shy. Murray Wilson has joined us, Mr Chair.
Ms Poole: I guess what I am asking is that if it is $7,660,000 less takeup in the program than the Treasurer had budgeted -- that is for operating. Then I go over to the chart which you provided for us today, with your constraints and spending cuts, and I am looking down at item B, "Operating," and I do not see that necessarily adding up to the same thing. I see 2103/2, which is the third item under B, "Operating," which says, "Reduced 1991-92 subsidy requirements for new initiative to provide 10,000 additional non-profit housing units (P10,000)." There I see that you are going to restrain by $4,010,000. Again, with my math, I am estimating that somewhere in the vicinity of $2.5 million must have gone somewhere. Perhaps you could explain for my feeble-minded efforts where I am missing $2.5 million that has been cut from P10,000.
Mr Temple: We have $4.5 million with the 2103/2 taken out.
Mr M. Wilson: You have to add the one below, the $491,500, to the $4,010,000.
Ms Poole: Okay, so now we are only missing $2 million; that is, if your answers on page 4 are correct and that is if the expenditure constraints are correct.
Mr Temple: Part of that, the remaining $2 million, is in the $5,500,000 down below, which is spread across the programs.
Ms Poole: Why would that be isolated, separate and apart from the P10,000 category? I would think if you are saving money on P10,000, it should all be in that particular category. I do not see why you would then lump part of it, like $2 million worth, into "lower than anticipated 1991-92 subsidy costs to non-profit housing groups."
Mr Temple: In order to maintain the flexibility in terms of all of the non-profit programs, because of the ebb and flow of when subsidy payments occur. I believe the reason for putting that in there was to make sure we had enough money left in the various accounts to cover contingencies. There may be a further adjustment later on in the year, depending on the actual demand.
Ms Poole: In other words, it is your little slush fund so that you can fudge your numbers if they do not quite match your program expectations.
Mr M. Wilson: I think that is --
Ms Poole: A little harsh?
Mr M. Wilson: I think that is unfair. You are saying that when you total those up you are missing $2 million.
Ms Poole: Right.
Mr M. Wilson: In terms of what we have done, I am satisfied in my own mind that the two numbers there represent about $4.5 million of the numbers you are looking for. The $80,000 represents another. With regard to Arnie's reference to the lower-than-anticipated 1991-92 subsidy costs to non-profit housing groups of $5,500,000, I think he is correct in saying that is across the board and deals with all non-profit programs. I do not know the answer to your question right now. You are obviously looking for specific information as to why we would not have shown $2 million more in the $4.5 million. I do not know the answer to that, but we can certainly find out.
Ms Poole: The figures do not match and I am wondering what happened. It is a significant amount of money.
Mr M. Wilson: I agree.
Ms Poole: What would be the rationale for a $5.5-million reduction because of lower-than-anticipated 1991-92 subsidy costs to non-profit housing groups? Is it that projects you thought would be on stream were not on stream as quickly as one might have anticipated?
Mr M. Wilson: They would not be taking up the subsidies at that rate, that is right. To the best of our ability, we make an estimate of when the project is going to come on stream. The actual preparation of the estimates process starts in the early spring and summer. You are making guesses about things that are going to occur in the next fiscal year and those guesses are as good as you can possibly come up with. As I mentioned before in response to one of your other questions, there are a lot of factors involved in the development process that do not allow 100% predictability.
The Chair: On that point, have supplementary estimates been completed or in order, or are we not doing them any more? I am listening to your point but, on behalf of the committee, that is what I thought was the purpose of supplementary estimates: to refine those numbers.
Mr M. Wilson: I was referring to the member's actual question.
The Chair: I understand that. I was simply asking you, is your ministry still supplying supplementary estimates or not? We have not received them as of yet, but now I have a concern that maybe you are not doing them.
Mr Temple: We do that every year, but the Treasurer will be tabling those when they are ready.
The Chair: Which should be when?
Mr Temple: I am not sure of the date. The schedule has been changed this year.
The Chair: I am taking up Mrs Poole's time and I apologize for that, but for the record I just wanted to get a sense of where the supplementary estimates are. It is not that helpful to the committee that we do not have them, nor does it appear that you are in a position to respond. You are at some stage of supplementary estimates so that you can provide clearer answers about where that money is, but --
Mr M. Wilson: As far as my explanation to Ms Poole's question is concerned, all I indicated to you is that I do not want to guess at where that $2 million is right now. The other discussion took place with respect to the preparation of the estimates. All I was trying to describe is that our original estimates are prepared somewhat ahead of time. Certainly we do have an opportunity, through the established programs financing process, of providing recent amendments and updates to that process, and that takes place. I am not implying that we do not know where that money is, that I cannot find it out for you, find it out quickly and identify what it is, but I am saying that as of right now, as I sit here, I do not know where it is and I am not prepared to answer that because I do not know.
The Chair: I thank Mrs Poole for her indulgence. I was merely trying to establish that we were late with the filing of the estimates, which meant that they are more current in time, and yet we are not on time with the supplementary estimates either. I just wanted that for the record.
Hon Ms Gigantes: In fact, these constitute something of a summary supplementary estimate.
The Chair: Not according to the accurate answers we are getting. I will give the floor back to Mrs Poole, because I took it from her without her permission.
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Ms Poole: No problem, Mr Chair. It was a question worth asking. On top of page 5 of this document prepared by the Ministry of Housing in response to questions I asked on Monday, the question was asked, "Has the implementation of the 10,000 units" -- P10,000 -- "been affected by the Treasurer's spending cuts?" It says, "No, the goal of the program remains the creation of 10,000 units of non-profit/co-operative housing." I guess that distorts the intent of the question somewhat, because while the goal remains there, it does not remain there for this fiscal year. Is that an accurate summation? It is unlikely that you are going to be able to have those capital dollars committed for all 10,000 in this fiscal year?
Mr M. Wilson: It would be totally and completely impossible to commit the projects and have construction starts for those projects so that you would commit the capital related to all 10,000 units. There are no means I know of that would allow that to happen. The response to the question is intended to convey the information to you that, as far as the Ministry of Housing is concerned, we are acting on instructions from the Minister of Housing to go about developing a plan to deliver 10,000 units under P10,000, the Ontario non-profit housing program, and see that this is achieved. Whatever period of time that takes, I assume we would be doing that as quickly as we possibly could.
Ms Poole: Was it impossible at the time the Treasurer announced the 10,000 units in his budget?
Mr M. Wilson: In the sense we are talking about, total capital commitment of all of the units?
Ms Poole: Of all of the P10,000.
Mr M. Wilson: As far as I am concerned, yes.
Ms Poole: So it was possible at the time of the budget, but it is impossible now?
Mr M. Wilson: No.
Ms Poole: No?
Mr M. Wilson: I am sorry, I misunderstood your question. I thought you asked me whether it was impossible. You asked me whether it was possible?
Ms Poole: Oh, yes, I think we are into double negatives now. You are saying, yes, it was impossible at the time of the budget?
Mr M. Wilson: Yes.
Ms Poole: Maybe it reflects my naïveté or inexperience in dealing with budgets, but I thought one of the purposes of a budget was to set out the expenditures and revenues for a given fiscal year. Would you announce the P10,000 project and allocate full funds for it knowing is was impossible to realize that?
Mr M. Wilson: There was a program called Homes Now announced in 1987. We are just finishing that program up now. If there is a specific time frame within which the government wants a particular program brought to a conclusion, it identifies that in its announcement or its subsequent announcements; if there is not, then it is assumed, as we are assuming in Project 10,000, that the government will find the funding necessary to put in place those 10,000 units identified for that program.
The Chair: We have come to time on this one. If I can move to Mrs Marland, we might return to that subject later, Mrs Poole.
Mrs Marland: Minister, last week I asked here if you would supply me with copies of the reports that you have on shelter allowances, the studies that were done.
Hon Ms Gigantes: Oh yes, indeed.
Mrs Marland: The reports are named in your response, but I did ask if I could have copies of those reports from your office. I would appreciate it.
Hon Ms Gigantes: I do not think that is going to be a problem at all.
Mrs Marland: Thank you. One program I have a lot of support and empathy for, which I am sure you would share, is the Ontario home renewal program. Of course, it is a program directed only at people with disabilities or home owners with disabled relatives or dependants living in the same dwelling. It is actually on page 160. I notice unfortunately that under the description it says, "This is an anti-recession program capital project funded during fiscal year 1991-92 only." What does that mean? I hope it does not mean you are going to discontinue it.
Hon Ms Gigantes: The cause of your alarm may be a little unnecessary. You will recall that the anti-recession fund was announced in December 1990. In a sense, we funded this before we funded through the budgetary process. In that sense, it was given priority because the allocations were made through the anti-recession program before the budget was set for fiscal 1991-92.
Mrs Marland: Your government did not start this program.
Hon Ms Gigantes: No.
Mrs Marland: But are you saying your intent is that your government will continue this program after 1992?
Hon Ms Gigantes: For all the reasons you know so well, I certainly think it is a valuable program. That is why we funded it. Whether that will be our choice in the coming budget, I cannot tell you at this stage.
Mrs Marland: Are you hopeful or you are saying you just do not know?
Hon Ms Gigantes: I really do not know. We will be going over every item in the budget and worrying about where we will find funding for it. As you know, many of the programs that this ministry and the other ministries carry on are very valuable to the people able to benefit from them. I think this is one of them. There are things we simply still have to review in terms of our overall commitments.
Mrs Marland: I think the reason this is so significant is that if people with disabilities can function in their own homes, with physical plant modifications made to their homes, then they have that choice. Otherwise the only choice they have, if they cannot function and look after themselves in a modified private home, apartment, whatever it is, is to look for full-time government funding in providing them with accommodation in some other kind of setting.
Hon Ms Gigantes: That can indeed happen.
Mrs Marland: Under vote 2103-7, again under housing field operations, under the current legislation there is a clause in the definition which states that the money remaining after the closure of a non-profit housing complex and the payments of its liabilities -- in other words, the money which has already been borrowed from the pension fund -- can be given to non-profit, charitable or religious organizations. It amazed me to find that it was not even stipulated that this money be used to fund non-profit housing. All I could see in this was a wonderful way to diminish our pensions. I am just wondering if you would like to comment on that
Hon Ms Gigantes: There may be somebody here who can help us on this point. I should point out too that certainly not all our non-profit housing these days is being funded through pensions. We might look for a comment on that.
Mrs Marland: My question is about the current legislation, where the definition exists that allows the money remaining from a project to be virtually given away.
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Mr M. Wilson: If you want a very strict legal interpretation, then clearly what we should be doing is consulting with our legal branch in providing a proper legal interpretation of these events. Regarding what the member is saying about the way in which the funds are disposed of, it is my understanding that the creation of non-profit groups in Ontario is guided by the statutes of the province, one of which says that no director of a non-profit housing company can benefit personally from the disposition of the assets. As to the disposition of those assets, the member has stated it very clearly. I suppose in some cases the public trustee determines how those funds are to be distributed in the best interest of whatever. If it is deemed to be in the best interest to create more non-profit groups or whatever, I assume somebody would have the opportunity of making the decision at that time.
Mr Burns: That happens after all the financing and other obligations of a company are dealt with.
Mr M. Wilson: For sure.
Mrs Marland: I understand that, and I was not suggesting that the directors benefited. The question is, why is that money given away? Why is it not retained for the purposes for which it was allocated in the first place, which was non-profit housing?
Mr M. Wilson: That is a different question. If a non-profit group in the instance you are depicting decides not to continue with that particular project and the project in fact fails, is the automatic solution to go through a disposition of assets, where the moneys are returned for charitable purposes and some decision is made as to how that money is disposed of? That is not in fact the course of action that is pursued. If the non-profit project fails and is still required for non-profit housing purposes, it is the responsibility of the Ministry of Housing to introduce a new non-profit group into the management and operation of that particular project and continue the project and operation for the term of the agreement. That is the solution we have had to apply on one or two occasions in the 15 or so years I have been around.
Mrs Marland: Okay, Murray, you are telling me about the failure of a project. I am talking about the --
Hon Ms Gigantes: Money left over on a project.
Mrs Marland: I am talking about both things. I am talking about the closure of a project and the payment of all liabilities. Is it possible that, if a project has been built, there is money left over that has to be disposed of? Or does this only happen where a project fails?
Mr M. Wilson: The best example I can think of is a project in Mississauga called the Tyrren Properties project and it failed. Rather than pursuing the course of action you have identified, we were able, working together with our federal colleagues, to have that project incorporated into the Peel Non-Profit Housing Corporation's portfolio. To this day it continues as a non-profit project housing people.
Mrs Marland: But do you have examples where funds have gone to "non-profit, charitable or religious" organizations for purposes other than providing housing? That is the basis of the question. I know the example in Mississauga very well, but I was just wondering if there are any other examples around the province. If that is not the case it does not matter. I mean, if that is not the case it is good news.
Mr M. Wilson: If I truly understand your question, I would say that to the best of my knowledge no, I do not think there are any of those cases.
Mrs Marland: Apparently we did have an issue raised about the Metropolitan Toronto Housing Authority and the use of funds for a breakfast program in a complex. It appeared that this program, which was overseen by MTHA employees, was not receiving the funds supposedly directed towards it. It has been impossible to discern exactly what was taking place under this program, but it illustrated that the housing authority requires stricter rules and scrutiny for the use of funds. Obviously we support this breakfast program, but what went wrong that the MTHA got the money and it did not all flow through to the program?
Mr Hill: My name is Byron Hill and I am the general manager of the Metropolitan Toronto Housing Authority. I am not entirely sure of the question you are asking. We have funds to support the breakfast club program in approximately 32 communities across Toronto and to the extent that the money has been available, we have used it all up.
Mrs Marland: Did you say you have used it all?
Mr Hill: We are in a fiscal year right now but we anticipate using all the money, yes.
Mrs Marland: Apparently there was a question that the money was allocated to that breakfast program but not all of it was spent on the program. That is simply what the question is about.
Mr Hill: I am not familiar with the question, but I can assure you that in fact the breakfast club operates at a loss. In other words, it costs more than the money made available to MTHA to support it. That extra, the difference in that loss, is made up from donations to the breakfast club as a corporate organization.
Mrs Marland: So you are saying there is not an example existing where money was assigned to the breakfast program and was not totally spent on the breakfast program.
Mr Hill: I can only speak to the total program across 32 housing communities, I could not speak to a specific community. It is conceivable.
Hon Ms Gigantes: If you had a few more hints for us we might be able to track it down.
Mrs Marland: I will get the other information, but if that is your job and you are happy, that is fine.
Minister, because we are running out of time I am skipping around to cover as many subjects as I can. I would like to know how many employees there are for the home ownership savings plan and how many applications there were in the last fiscal year, because we have been led to believe there are more employees for this program than there are actual applications.
Hon Ms Gigantes: We are looking for some help here. Could we make sure we have the title of the program correctly?
Mr Casey: That is what is confusing us.
Hon Ms Gigantes: We do not run a program like that.
Mrs Marland: The home ownership -- they have "savings plan." It is not called that, it is called something else, is it not? What is the home ownership plan called?
Hon Ms Gigantes: HOSP is not a program we run.
Mr Casey: Can you identify which page you are looking at in the estimates?
Mrs Marland: No, I cannot.
Mr Casey: You may be speaking of a Treasury program. I am not familiar with a program like that in the Ministry of Housing.
Mrs Marland: The home ownership savings plan is not yours?
Mr Casey: Not that I know of. I am not familiar with that program in the ministry.
Hon Ms Gigantes: We would know.
Mrs Marland: You would know. We will have to guess.
Mr Burns: I suspect it is administered along with the tax system, so it is probably a Ministry of Revenue program.
Mr Casey: The Ministry of Revenue is what I am told is the ministry.
Mrs Marland: All right, so you do not have anything to do with it?
Mr Burns: No.
Mrs Marland: The green paper on government land for housing: What will be the cost for the staff needed to monitor the use of land and to prepare on an annual basis "an inventory of underutilized urban sites that have housing potential," and will additional staff be required for this process? When will the process be making this policy operational?
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Mr Burns: Mr Chiesa is ill today, but his current situation is that he has three staff who work on this program. They have already been engaged in looking for sites that might be appropriate for residential development from MGS and from government agencies. I think in fact in your material, in response to a question you asked, there is a list of those we are now talking to departments, ministries and agencies about. I do not believe we are expecting to increase the staffing in his program at all.
Mrs Marland: At the moment, Mr Burns, you are saying --
Mr Burns: This is Mr Chiesa's program of working with other agencies to make land available for housing. It is currently three people.
Mrs Marland: The description, and I guess this description is out of your green paper, was people working to prepare on an annual basis "an inventory of underutilized urban sites that have housing potential." So it is more, I think, than what --
Ms Beaumont: The actual preparation of that inventory is being done by the Ministry of Government Services, which is the holder of government land and acts as the developer of most of those government land sites. The role of Mr Chiesa and his staff out of our ministry is to work in co-operation with Government Services. They take the lead on the number of sites, but in the majority of cases it is Government Services that takes the lead.
Mrs Marland: So the green paper is yours?
Ms Beaumont: Yes. A joint green paper with Government Services.
Mrs Marland: Okay. Can you say how many staff are preparing the inventory out of those ministries? I know you cannot speak for MGS.
Ms Beaumont: I cannot speak for MGS, and the staff who are preparing the inventory are all in MGS.
Mrs Marland: Oh, they are, all of them. So you do not know what the cost of that is then?
Ms Beaumont: No, no idea.
Mrs Marland: We will ask them. Thank you.
Mr Burns: But we are not anticipating adding staff to mount any program in our place.
Mrs Marland: No, but we are just interested to know what this process is costing, that is all. If it is not costing your ministry anything, then we will ask the ministry where they have the responsibility.
I wanted to ask the minister about her philosophical stand on -- I used to call them development charges, but now we have to call them developmental charges. Obviously, that act was passed before you were the government even. We all recognize that the cost of lot levies adds to the cost of homes. It was established to try to pay for the capital cost of schools. New home builders are bearing that huge tax burden within municipalities, but they do not bear it very long until they turn it over and sell it to the new home owner. I just wondered what your position was on those, what we used to call lot levies, but in this case to pay for the cost of schools.
Hon Ms Gigantes: There are two kinds. You are talking about the educational levies.
Mrs Marland: Both.
Hon Ms Gigantes: What can I say? One has been used for a long, long time. Essentially, what I guess you would raise as an issue is the question of the level. The way the system has operated is that municipalities have had the authority and the responsibility to decide what level they were going to charge. If you have proposals to change that, I would be glad to pass them on to Dave Cooke.
The second is the question of the educational levies and whether boards should be given the power to raise levies that way. We essentially decided when we came to office that we would go ahead with what had been a proposal from the previous government and put the matter, along with many other matters dealing with the raising of revenues at the local level and at the provincial level, before the Fair Tax Commission. That is where it stands.
Mrs Marland: The reason I am asking you and not the Minister of Municipal Affairs is that you are responsible for the provision of shelter in this province. I just want to know how you feel about that philosophically, knowing that it is an impediment to reducing the cost of housing when you look at how much a development levy is on the new home owner today?
Hon Ms Gigantes: It depends where you are as to how much it is.
Mrs Marland: How about Peel? The last figure I heard was around $9,000 or $10,000. It does not matter where you are, it is still an additional charge. I am asking you if philosophically you support that.
Hon Ms Gigantes: I am not going to make what would be a philosophical answer. I would certainly be interested in seeing what facts the Fair Tax Commission brings to bear on this and also to see what happens in the debates that are going on in municipalities around the province on this very item, because I do not think I am an expert in this matter. Is it a fair way? Does it impede the development of housing? It may, in some instances. In other instances it may have very little effect. So, I would like to --
Mrs Marland: That was the cost of housing, not the development of housing.
Hon Ms Gigantes: It may be both.
The Chair: Thank you, Minister.
Mr Daigeler: One thing is clear, when you are in government you can be less philosophical, but perhaps it is a good thing. As a sort of semiphilosopher myself --
Hon Ms Gigantes: I was not around for previous discussions of this matter.
Mr Daigeler: I will get back to some of the hard facts and away from the philosophy. On page 1 of the estimates book, on the housing and rent review operations, you have a very significant increase, the $216 million increase over last year's estimates. What does that significant increase relate to?
Hon Ms Gigantes: It relates to our production of housing.
Mr Daigeler: The new 10,000 units? Where is that coming from?
Mr Casey: Probably one of the key areas. If you look through the book you will see very significant increases in the non-profit housing subsidy and because, at this time, we are seeing --
Mr Daigeler: The ones coming on stream?
Mr Casey: Yes, coming on stream from the various programs, federal-provincial, P3000, P3600, Homes Now and so on. You are going to see these kinds of massive increases coming through over the next few years as the programs deliver the housing, they become completed and subsidy starts to flow.
In 1988, or whenever we announced Homes Now, it did not mean you were flowing much subsidy at that time. As I noted last week when I was here, it takes you 30 to 36 months from the time you actually see that unit allocated to the time it is completed and subsidy starts to flow. Consequently, as that occurs and as those projects move through the system and get completed, a big bulk is coming through at this point and you are starting to see massive increases as those subsidies close.
Mr McGuinty: To follow up on something my colleague Ms Poole, the member for Eglinton, made reference to earlier, my question has to do with the campaign promise. Maybe the best way for me to deal with this is that I will make a number of statements and you can stop me if you disagree with me.
First of all, the promise contained in the Agenda for People says that New Democrats would bring in rent control. That means one increase a year based on an inflation. There would be no extra bonuses to landlords for capital or financing costs. That was a promise made in the context of an election, and the purpose of that promise was to garnish support, to act as an incentive or an inducement to get a vote. It is the consideration. Now, the Agenda for People, I am sure you would agree, was widely circulated. Many, many people became familiar with the Agenda for People and certainly many people relied on that promise in voting for the NDP. I know, because approximately 50% of my constituents live in rental properties and I had to deal with this on a regular basis. I assume, Minister, that you yourself campaigned on the basis of that promise. Now you have not fulfilled that promise and Bill 121 does not make provisions to fulfil that promise. So just for purposes of the record, I want to ask you, Minister, do you intend to fulfil that promise?
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Hon Ms Gigantes: I think that Bill 121 represents our best effort. It will be amended, but it does represent the effort we thought was appropriate, having done extensive consultations on the question.
Mr McGuinty: Is it fair to say you have concluded it is not feasible to fulfil that promise?
Hon Ms Gigantes: As you are aware, the discussions we had with landlords and tenants around this province made us feel that the provisions we have put forward in Bill 121 would be a better approach.
Mr McGuinty: Would you recommend making that kind of a promise in the next election?
Hon Ms Gigantes: In the next election I hope we will have in place a permanent system of rent control worthy of the name and that tenants and landlords in Ontario will feel it is a system that works well for them. So I do not see that we need a promise.
Mr McGuinty: I am not sure if I have pinned you down or not. Thank you.
Ms Poole: Since we are fast running out of time, perhaps I could ask for a written response to these questions.
The document outlining the 1991-92 expenditure constraints, vote 2103, item 7, talks about reduced requirements for anti-recession program projects. I am quite dismayed to see that $1 million has been lopped off the low-rise rental rehabilitation program and another $1 million lopped off the rooming house rehabilitation program, which were pilot projects set up in Toronto and Ottawa. I would like an explanation of why in this time of need to rehabilitate our aging housing stock we are cutting money off those two particular programs. I would have hoped the reverse would happen, that you would actually be putting more money into them.
The third item along the same line refers to deferral of selected 1991-92 maintenance and repair projects until fiscal year 1992-93. Another $2 million lopped off and deferred maintenance actually ends up meaning much more extensive and expensive maintenance down the line, as your party has said many times in rent control hearings.
I would like written answers as to why those particular programs were chosen for cuts when the need is so great. Finally, on page 21 there is a reference to repairs to the public housing portfolio, showing that from last year to this there would be an estimated 35% increase. What I would like to know, Minister, is how can you justify this kind of money going into the public housing repairs and in the same breath tell private sector landlords trying to do the same type of repairs they are going to be capped at 3% per year? I would like some sort of rationalization how you can say those two things in the same breath.
Hon Ms Gigantes: Coming from Ottawa, and because of past experience, I have a particular interest in rooming houses. I know that in this case it just simply has been difficult for the city, which is carrying the rehabilitation project, to get organized to spend that money by the end of the fiscal year. I have been nagging them because I would like to see it spent and they have been pushing hard, but it has just been very difficult. This is not something where there is an awful lot of expertise and program development in place. They have worked at it, but not as fast as we had hoped.
Ms Poole: Was there no consideration of rolling this $1 million into the low-rise rehabilitation program?
Hon Ms Gigantes: No. We looked at each program on its own. We were not looking for new ways to spend the money.
Ms Poole: I would be very interested in getting the written comments, particularly about the low-rise rehabilitation and the public housing stock repairs.
Hon Ms Gigantes: Good enough.
Ms Poole: Thank you.
Hon Ms Gigantes: Mr Chair, just for a second -- I have been given information by Arnie Temple which I think I should share with committee members, even though --
The Chair: No, Madam Minister, by agreement we have allowed Mrs Marland the opportunity --
Hon Ms Gigantes: Would you be kind enough to read that?
The Chair: No. I have already discussed this with you. I recognized Mrs Marland, and will come back to you, Minister, before the bell. Please proceed, Mrs Marland.
Mrs Marland: Madam Minister, all the discussion of your government has revolved around rental accommodation in terms of shelter, and I just wonder whether you are happy to see the people in this province live in apartments and rental accommodation for the rest of their lives, or would you like to tell us what you are doing to help people buy their first homes?
Hon Ms Gigantes: At this stage we do not have particular programs developed to help people purchase homes. In the past, as you are aware, governments have from time to time in Ontario provided grant programs to help people make a down payment on a first home. As you are aware, they have some benefits and they have some drawbacks. We discussed this two or three days ago.
Mrs Marland: We did not discuss it in very much detail, and I was giving you an opportunity to say what you would like to do to help people buy their first home, or are you just happy to spend all your ministry manpower and money resources on rental accommodation?
Hon Ms Gigantes: As I indicated to you in our earlier discussion, the private sector has had a long tradition and an active policy position of producing housing without government involvement. Where we have been involved in the past, as again you will be aware, has been in a very limited way in direct support for the private sector. Tax policies and so on are another matter, but in terms of programs it really has been a focus of the Ministry of Housing, as long as I have been aware of it, to try to make sure that those people who were not in a position to own a home and who were not the wealthiest of tenants were going to be able to find housing which was suitable and affordable.
Mrs Marland: But do you not think we are creating more and more tenants because they cannot get out of that rental situation because they cannot afford to buy that first home? With all the manpower, womanpower, brainpower that is your resource, as the Minister of Housing in this province in 1991 do you not have any programs you are even discussing that will help those first-time home buyers? You seem to be happy to spend $250,000 building a unit in Ataratiri which will be rental for the rest of its life as a building. Would you not be --
Interjection.
Mrs Marland: I certainly would, if I were the minister. I am trying to encourage this minister to tell us whether she wants Ontario to be rental housing for ever, or if she can develop a program to help those first-time home buyers who can afford the rent but cannot afford a major down payment to start with.
Mr Perruzza: Sixty thousand dollars?
Mrs Marland: Would you stop interrupting, Mr Perruzza?
Hon Ms Gigantes: We have an agreement, Anthony.
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Mrs Marland: Is that your vision for Ontario, where young couples will never be able to afford to buy that first home because you cannot work with them and with the private sector to find a way of financing their entry into that first home purchase? There are lots of great homes on the market now around $150,000, even in the greater Toronto area. Are you not contemplating any way of helping those people?
Hon Ms Gigantes: In Ontario I think it is probably traditional that about 40% of households have rented their accommodation. In my view there is nothing wrong with living in rental housing all your life, and in fact, if you go to other provinces, you will find different patterns of setting up households. In Quebec, for example, the level of rental households is higher than here. There is a cultural thing attached to it. You are saying to me, "Do you think this should be a priority area for you at this stage?" I will say to you, no, I would not put it as a priority area. I look upon the question of providing suitable and affordable housing to people in core need of suitable and affordable housing as a priority.
Mrs Marland: That is a pretty profound statement, that it is a cultural thing for people to be paying rent and therefore paying their hard-earned dollars into somebody else's investment, and it is very interesting --
Hon Ms Gigantes: Well, it is one way or the other. Excuse me, I have a friend who says --
Mrs Marland: Excuse me, I have not finished.
Hon Ms Gigantes: If I could comment --
Mrs Marland: I think it is very interesting for the Minister of Housing to make that statement, because obviously you are not interested in doing anything to drive the recovery of the economy by --
Mr Farnan: That is nonsense.
Mr Perruzza: It certainly is. Mr Chairman, you are allowing people to engage in philosophical --
The Chair: Mr Perruzza, do you have a phone call to make? Would you help the committee? Do you have a phone call to make, Mr Perruzza?
Hon Ms Gigantes: We have an agreement here. We had better stick to the agreement; it will make life simpler.
Mr Perruzza: No, Mr Chairman, I do not have a phone call to make.
The Chair: It is a rare moment. Order, Mr Perruzza.
Mr Perruzza: Mr Chairman, are you asking me whether I should be leaving?
The Chair: We have the option to call the Sergeant at Arms if you persist in being disruptive, but we are very much in need of order, Mr Perruzza. Mrs Marland?
Mrs Marland: Madam Minister, we have heard a lot of rhetoric from your party in opposition about, "The poor people who can't get out of rental accommodation, and the poor people who can't afford to get into the housing market at an entry level because they can't afford that first house." We heard it for the first two years that I was here from 1985 to 1987. It certainly was continued by your party in the last three years, and now you are the government you are saying it is okay to have the percentage -- you said it is 40% in Ontario now -- that high for rental accommodation because it is actually higher in Quebec.
What I am asking you is, why would you want to sentence people to life to be paying into somebody else's investment, which is what they do with rental accommodation? Why would you not want to help people buy their first home, is my simple question?
Hon Ms Gigantes: If I could put it this way, when I said to one of my friends, "Congratulations, James, on buying your house," he said, "I haven't bought a house, I'm renting money." Some people who can afford to can make a choice: They can rent money from a bank or trust company and they can call themselves home owners, or other people will decide, in preference, to rent a house if they have the money, even though they might own it and pay to the bank. Most people cannot afford to pay cash for their houses, and so you are talking about different ways of financing your household costs. You can get rental accommodation which is as luxurious as you want it -- there is a full range. When you say to me that it is terribly important as a societal thing that people be able to free themselves --
Mrs Marland: Have the choice, if people have the choice.
Hon Ms Gigantes: -- from rentals, there are benefits and disbenefits to rental as there are to so-called home ownership, for most people. I think most people who took out a mortgage in the middle 1980s, or right now, are likely to pay it off for most of their lifetime. Costs for housing are extremely high, and I do not have the kind of philosophic impulse that you do to say that purchased housing is better or that owing the money to the bank instead of the landlord is better.
Mrs Marland: At least in purchasing a home, Minister, you are investing in your own equity, and you obviously do not see that as an opportunity for people in Ontario. You are not even willing to help them have the choice of paying rent or investing in their own equity. Sure, nobody pays cash for a house; we know all that. But why do people, if at all possible, put themselves in the position where they want to buy that home? Because they are building their own equity, and obviously you do not agree with that.
Hon Ms Gigantes: Sure I do.
Mrs Marland: Then why do you not do something to help them?
Hon Ms Gigantes: That is what we have done in our family. I do not think it is a priority.
The Chair: On this very positive note, since we all live in a democratic and free society and we all issue our asset statements with the conflict commissioner, it is freely there for everyone to see, those of us who are tenants and those of us who are landowners. Therein, we vote with our feet in this province. On that very positive note --
Mr Perruzza: Mr Chair, I do not understand that.
The Chair: You do not understand that, Tony?
Hon Ms Gigantes: Let's do our votes.
The Chair: I will talk to you later, Tony. I can even do you a diagram.
We have completed all but 45 minutes of our estimates. I want to thank the committee for their assistance in getting us through today, which was a difficult day with House business. Therefore, if the committee is ready, I would like to call the votes, and I will combine them if I may.
Votes 2101, 2102, 2103, 2104, 2105 and 2106, inclusive, agreed to.
The Chair: Shall the estimates of the Ministry of Housing for the year 1991-92 be reported to the House without amendment?
Agreed to.
Hon Ms Gigantes: Mr Chair, could I provide information for the committee members?
The Chair: I will speak to this issue, and could Mr Arnie Temple advise us who advised him, on Treasury Board, that only increased estimates are reported?
Mr Temple: It is my understanding that this has been the practice for a number of years, and my own staff have confirmed that this is the procedure that has been followed.
The Chair: Was it your own staff or did you check with Treasury Board?
Mr Temple: That is the policy of Treasury Board.
The Chair: Okay, you can give us the name of the person. That does not square with information the committee has.
This committee stands adjourned until 3:30 tomorrow, October 16, at which time we will begin estimates of the Ministry of Transportation.
The committee adjourned at 1759.