Legislative Assembly of Ontario

MINISTRY OF HEALTH

MINISTRY OF ECONOMIC DEVELOPMENT AND TRADE

CONTENTS

Friday 8 March 1996

Ministry of Health

Hon Jim Wilson, minister

Margaret Mottershead, deputy minister

Ministry of Economic Development and Trade

Hon William Saunderson, minister

Judith Wolfson, deputy minister

Sandra McInnis, vice-president, Ontario International Trade Corp

STANDING COMMITTEE ON ESTIMATES

Chair / Président: Curling, Alvin (Scarborough North / -Nord L)

Vice-Chair / Vice-Président: Cordiano, Joseph (Lawrence L)

*Barrett, Toby (Norfolk PC)

Bisson, Gilles (Cochrane South / -Sud ND)

Brown, Jim (Scarborough West / -Ouest PC)

Brown, Michael A. (Algoma-Manitoulin L)

Cleary, John C. (Cornwall L)

Clement, Tony (Brampton South / -Sud PC)

*Cordiano, Joseph (Lawrence L)

*Curling, Alvin (Scarborough North / -Nord L)

Kells, Morley (Etobicoke-Lakeshore PC)

*Martin, Tony (Sault Ste Marie ND)

*Rollins, E.J. Douglas (Quinte PC)

*Ross, Lillian (Hamilton West / -Ouest PC)

*Sheehan, Frank (Lincoln PC)

*Wettlaufer, Wayne (Kitchener PC)

*In attendance / présents:

Substitutions present / Membres remplaçants présents:

Carr, Gary (Oakville South / -Sud PC) for Mr Kells

Kwinter, Monte (Wilson Heights L) for Mr Michael Brown

Spina, Joseph (Brampton North / -Nord PC) for Mr Clement

Clerk / Greffier: Douglas Arnott

Clerk pro tem / Greffière par intérim: Deborah Deller

Staff / Personnel: Steve Poelking, research officer, Legislative Research Service

The committee met at 0910 in committee room 1.

MINISTRY OF HEALTH

The Chair (Mr Alvin Curling): We will commence with the estimates for the Ministry of Health. Yesterday we had reached the rotation, I think it will be the Liberals now. Just as a comment, it was agreed that at midday today we will conclude the Ministry of Health estimates and at 1:30 we will start with estimates for the other ministry.

Mrs Elinor Caplan (Oriole): This morning, as we begin, there are a number of issues I'd like to raise, and I'd like to know how many rounds you anticipate, Mr Chairman; in other words, how much time will I have and will we have. How many rounds do you think we'll have?

The Chair: I could tell you later on, but you have 20 minutes now. I think it's three.

Mrs Caplan: Three rounds? Good.

I would like to spend a few minutes on the issue of the cost of new user fees, particularly on the poor or those who have already had welfare rates cut and those who will be subject to the new user fee for drugs under the Ontario drug benefit plan. We have heard very clearly that mental health patients who have compliance problems will be experiencing extreme difficulty, and we heard a suggestion that there was a proposal that was going to ensure there was no hardship for those people who will be facing the $2 user fee for the Ontario drug plan.

I don't want to get into "You promised no new user fees" and the whole thing in the Common Sense Revolution. We've gone through that. What I want to know is, what are you going to have in place to make sure that mental health patients as identified by the Ontario and Canadian mental health associations will not be having to pay the $2 copayment?

I'm going to deal with the groups individually, because I do know that there has been some suggestion that not all the drugstores are going to be charging the user fee, but there's no guarantee that there will be universal application of that relief, particularly for those with compliance problems and those who have had welfare reductions of 21.6% and those who are really living on the edge where it becomes a choice of either taking their drugs or buying food for their children.

I think this is a serious issue so I'd ask that you tell us what plans you have in place to make sure that the $2 user fee will not hurt those who are most disadvantaged in our society.

Hon Jim Wilson (Minister of Health): It's a good question. Perhaps I should just give some statistics and then answer the question. Under the new copayment plan for the Ontario drug benefit plan we expect that about 380,000 low-income seniors will pay about $2 per prescription below the GIC.

Mrs Caplan: You are saying 380,000?

Hon Mr Wilson: Yes, will only pay the $2 per prescription, but 1.3 million social assistance recipients will only pay the $2 per prescription --

Mrs Caplan: That's 1.3 million?

Hon Mr Wilson: Which is everybody on social assistance. About 50% of the social assistance recipients, or over 600,000 people, will pay an average of about $8 per year for individuals. That's the expected impact, given current utilization rates, of which we have a very exact count. The impact will be, in about 50% of the social assistance cases for families, about $24 a year is the expected impact.

In summary, more than 80% of social assistance recipients will pay about $30 per year or less. You are absolutely right; for example, in this province we have about 10,000 methadone patients, many of whom will drink the prescription on a daily basis at the prescription counter. As it stands, the law that was passed allows flexibility for pharmacists to waive the $2 fee or to make other arrangements.

Some pharmacists have told us -- representatives of the Ontario Pharmacists' Association have told us and representatives of the Canadian Association of Chain Drug Stores said -- that in the case of methadone patients, for example, they will likely set up an account and probably forgive the account. They will add $2 to a ledger. They've been pressing actually, the pharmacists' association and the chain drugstores, to make it a mandatory $2 and that nobody skips out. Because their view is that many, many pharmacists in the province will waive the $2 because they know their clients, they know the patients and they will do that.

Now keeping in mind it's up to $2, the way the law says, so they could charge zero to $2. If it's any help, Loblaws charges $1.99 now for some fees. So the flexibility is there.

Mrs Caplan: I acknowledge that and I recognize that there will be some who will decide not to do it. The concern is where it's the only place in town and there is no competition or simply they make a decision that they are not going to waive the fee, and that could happen in more places than we anticipate.

People are going to be disadvantaged, particularly those -- you referred to methadone, but we also heard from the Canadian Mental Health Association and the Ontario Mental Health Association in their briefs that patients taking psychotropic and psychiatric medications, which keep them out of hospital and keep them functioning, medications which they may not like to take, and they're frequently given limited prescriptions, particularly those who have a history of depression and suicide, are going to be adversely affected. If they stop taking their medication, and most of them are living on disability pension or on welfare, how are they going to cope?

Hon Mr Wilson: Well, that's fine, but in considering it we took a minimalist approach. It has a minimal impact, the $2 fee. If fully applied and mandatory, according to our workup on the numbers -- there will still be an impact, you're right -- but when you're looking at the vast majority of social assistance recipients and the impact being less than $30 a year, we think that's fair given that we're bringing in the fees across the ODB program.

Mrs Caplan: I would argue --

Hon Mr Wilson: However, the flexibility is still there and I've been trying to work with the pharmacists to say we still want that flexibility.

The other thing to do of course would be to make it mandatory, as pharmacists are asking, and then through regulation try and exempt thousands and thousands of people, I guess, in terms of the mental health patients, and that would be an administrative nightmare, I think you would agree.

Right now we have the flexibility and pharmacists are telling us that in cases where they know the patient can't pay the $2, fine. Remember, we pay $6.11. The $2 is on the dispensing fee. So the pharmacist who waives the $2 still gets $4.11, and many pharmacists are saying, "For methadone patients who are in every day, $4.11 is enough," and so we're still paying that. It's not like the pharmacists gets nothing. They just won't get the full $6.11.

Mrs Caplan: I understand, and I think most people understand, that you have your negotiations and dealings with pharmacists. That's fine and that's important. The concern that I have is about the people who are going to be receiving and taking those drugs, many of whom are doubly disadvantaged by virtue of the fact that they have compliance problems with their medication.

It's interesting and it's nice to hear the statistics, but when you put faces on those people who are going to be adversely impacted, we were given assurance -- I felt it was assurance and I will be checking the Hansards -- that there would be a plan in place so that those people with compliance problems with mental health drugs that are needed in order to sustain them in the community, that notwithstanding the administrative difficulties, there would be a mechanism to protect those people.

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Similarly, I can tell you that in my riding people are having trouble paying their rent because the rent is about 70% of their welfare cheque. They can't get into social housing. The waiting lists are two to three years. It's very nice words to say $30 a year. These people are visiting the food bank to get food. They don't have the extra couple of bucks they need to buy the prescription for their kids because they don't have the money to feed the child. They phone us to say, "What are going to do if we get sick and need a prescription?"

That extra $2 may seem like nothing to you, but to a person who's living on the edge, they've had their welfare cut, their rent is now taking in excess of 50%, 60%, 70% of their total income and they've got a sick child, it's no comfort to say to them: "Well, you know, 80% are only going to have $30 a year. That's the average and that's the statistic." They say: "I'm not surviving. What do I do?" What do I tell them?

Hon Mr Wilson: Certainly the plan is a very good plan and that's to allow the flexibility, and faced with no fee or no business at all, I think the pharmacists will take the $4.11. That's what they're telling us: $4.11 versus nothing.

Mrs Caplan: You've also suggested that people go in and barter.

Hon Mr Wilson: Those are non-ODB recipients.

Mrs Caplan: I don't think what you're saying is that you have an agreement with pharmacists that they're not going to charge the $2 user fee to welfare recipients, those on the ODB who can't afford it. Now we know that --

Hon Mr Wilson: We have an agreement. Many of them want it mandatory and we've bucked that suggestion so far.

Mrs Caplan: They want it mandatory that they must charge the $2.

Hon Mr Wilson: Yes, and we've said no, we'll keep the flexibility.

Mrs Caplan: What you're saying is no to that.

Hon Mr Wilson: But the reason they want it mandatory is they're worried that the vast majority of pharmacists will waive the $2 when they know the client can't afford it and they'll take the $4.11 that we're paying, and they're willing to take a reduction rather than take the whole $6.11.

Mrs Caplan: I hear the interests of the pharmacists and, frankly, I'm sympathetic that they've had a cut of a third of their dispensing fee, if you're right that from $6.11 you're expecting them to eat the $2 and not charge it and so now their dispensing fee is going to be $4.11. I hear that and that's your negotiations with them, but you're negotiating with them on the backs of sick people who can't afford it. If you're going to tell us that you're going to --

Hon Mr Wilson: You can't have it both ways. What's your solution?

Mrs Caplan: No, no, no.

Hon Mr Wilson: I've given you the options.

Mrs Caplan: No, no, no.

Hon Mr Wilson: What's your solution?

Mr Tony Martin (Sault Ste Marie): You're the government.

Mrs Caplan: You're the government. You have said --

Hon Mr Wilson: I've made the decision that flexibility will be there.

Mr Martin: We're telling you it's not working.

Hon Mr Wilson: Pharmacists have told us they know their patients best and they'll waive the fee in cases where you can't get blood from a stone.

Mrs Caplan: When I sat in your chair, I had to answer the questions, Minister.

Hon Mr Wilson: I'm answering the questions. You don't like the answers.

Mrs Caplan: You're in the chair now and I'm telling you there is a problem. You've agreed there's a problem. You're saying --

Hon Mr Wilson: We've recognized the problem and we have a plan in place.

Mrs Caplan: What's the plan?

Hon Mr Wilson: The flexibility.

Mrs Caplan: But that means that people are going to get charged the $2 who can't afford it, who have compliance problems.

Hon Mr Wilson: That's not what we're hearing. In fact we're hearing the very opposite, that people won't and the pharmacists will take the $4.11 that is part of the plan.

Mrs Caplan: So it would be acceptable and appropriate then, you're saying, for you to advertise that people don't have to pay the $2 if they can't afford it. Is that what you're saying?

Hon Mr Wilson: No. We want to make it very clear that the $2 is a fee that we expect people to pay, but in those very rare cases, and when you're dealing with 2.2 million recipients, it is a small number of people who will have problems paying the $2. In those cases they will work with their pharmacist to make other arrangements, and that may involve asking the pharmacist to waive the fee. The law is clear that it's up to $2.

Mrs Caplan: I would suggest to you, Minister, that the suggestion you're making, which is that people go in and beg their pharmacist to waive the $2 fee, is an assault on human dignity and unless you can find a way to deal with that issue --

Hon Mr Wilson: Sorry. What's your suggestion?

Mrs Caplan: What I'm suggesting to you is that you rescind your policy of imposing the $2 user fee. Since that is not money that is going to be reallocated into the health system, that money has been taken out of Health. Let me tell you --

Hon Mr Wilson: It helps the government sustain the program.

Mrs Caplan: Let me tell you something, you say it helps sustain the program. It doesn't. You've sealed the envelope.

Hon Mr Wilson: Mr Martin's hitting us with a $1-billion hit. Your federal counterparts in just a few weeks --

Mrs Caplan: You've taken $225 million out of that envelope and you've given it to the treasury to use either for the big tax cut that you're promising or for the deficit reduction, either one. It is not going back into health because you've sealed the envelope. So to tell anybody it's sustaining the program is just not true. You want my suggestion?

Hon Mr Wilson: It is sustaining the program.

Mrs Caplan: You want to hear my suggestion? Don't do your tax cut, leave the Ontario drug benefit recipients with dignity and let them know that when they get sick, they're going to not have to go to their pharmacist and beg.

Hon Mr Wilson: You're suggesting we not create jobs, we simply cut expenditures, which all three parties agreed with during the election. You were going to balance the budget in four years, even faster, so your cuts must have been very, very deep, Ms Caplan, in order to --

Mrs Caplan: Actually that's not true because --

Hon Mr Wilson: Either that or you weren't planning on living up to your commitments to the people of Ontario, which would be typical.

Mrs Caplan: -- our tax cut was $350 million a year and our plan did not have the kind of deep cuts that you have because we didn't have a $5-billion to $6-billion tax cut cost in revenues.

Hon Mr Wilson: You had a $2-billion tax cut over four years.

Mrs Caplan: Clearly our program was very different than yours. Our program --

Hon Mr Wilson: Not much.

Mr Gary Carr (Oakville South): On which day?

Mrs Caplan: But I'll tell you something, you said no new user fees.

Hon Mr Wilson: As I recall, our program came out first and you scrambled to catch up with your red book.

Mrs Caplan: Everybody I have spoken to said that they did not expect to see a user fee on the drug plan. When you said no new user fees, they thought that meant no new user fees.

Hon Mr Wilson: It's not a user fee. Nine out of 10 provinces have that.

Mrs Caplan: I hear what you're saying, but I'll tell you something, Minister --

Hon Mr Wilson: We could have gone the Saskatchewan route where every six months the deductible is $700.

Mrs Caplan: Let me tell you something, Minister, people want you to do what you said you were going to do, not what I said I was going to do, not what the Liberals or the NDP said they were going to do. They expect you to do what you said here, which was no new user fees.

Hon Mr Wilson: We're doing exactly what we said we were going to do.

Mrs Caplan: You're asking me for my solution. I'm telling you your plan is going to affect individuals, my constituents and yours. People who have compliance problems, people with mental health problems, people who are poor, who are paying an exorbitant portion of their income on rent, are going to be faced with a serious problem of: "Do you feed or do you buy the medication? Do you take the drug or not?"

Those problems are going to lead to higher health costs, frankly, because those compliance problems cost you money, unless you find a better plan. To just say you're leaving it up to the individual pharmacist I think is unfair to the population and you have a responsibility to make sure that you don't disadvantage the people who need help the most.

Hon Mr Wilson: Ms Caplan, it's very difficult to write a regulation to exempt those people. They don't have stamps on their foreheads saying, "I'm a mental health patient." Is that what you're suggesting?

Mrs Caplan: What I'm suggesting --

Hon Mr Wilson: The pharmacists in complete confidence will make this arrangement that has under the law --

Mrs Caplan: What I am suggesting to you is that you don't make people beg --

Hon Mr Wilson: How do you know when someone walks into a store, Ms Caplan, whether or not they're a mental health patient who needs the $2 waived? Are you suggesting we label people?

Mrs Caplan: What I'm suggesting is that you remove the $2 copayment and then you don't have the problem.

Hon Mr Wilson: That flexibility is in the act --

Mrs Caplan: No, you waive it.

Hon Mr Wilson: -- and pharmacists are telling us they will do that in the very rare cases where it's required by their clients.

Mrs Caplan: What you are saying is that you're not going to require that to be waived for mental health patients and people with compliance problems.

Hon Mr Wilson: I'm saying it's inhumane to label people as they walk into a store --

Mrs Caplan: Let me tell you something. You are labelling people by making them beg. You're taking away human dignity by making them beg and by telling them to go out and barter for their drugs and beg. That kind of policy is the kind of policy that's going to defeat your government, because people know it is cruel and it is unfair and it is not what people expected from Mike Harris.

Hon Mr Wilson: Ms Caplan, this policy expanded the program to 140,000 working poor. It's a good-news item. Yes, we did have to sustain the program. Under the Canada Health Act we are not required to carry this program. We want to carry the program though. As you point out, it would be somewhat self-defeating not to continue an Ontario drug benefit plan because of cost shifts to other parts of the sector, but we believe people who can afford to pay should pay and that's a principle that this government is following.

We'll be following that principle with our fair share health levy and it makes the plan sustainable. I think it'll be clearer to all the people of Ontario in just a few weeks as we start to absorb the cuts that, yes, we knew were coming from Ottawa, but when they really start to happen, you have to really start putting policies in place to deal with them, and that's what we've been doing.

Mrs Caplan: "Under this plan, there will be no new user fees." Page 6 of the Common Sense Revolution.

Hon Mr Wilson: Just prior to that, you'll note our discussion on the Canada Health Act which clearly makes it clear that "user fees" is a term used under the Canada Health Act --

Mrs Caplan: That's yours, separate in bold letters. It's there. That was your commitment.

Hon Mr Wilson: Ms Caplan, you're the only one in Canada --

Mrs Caplan: You clearly did not maintain your commitment to the people.

Hon Mr Wilson: -- arguing that these are not copayments.

Mrs Caplan: You are the persons that made that commitment.

Hon Mr Wilson: Nine other provinces --

The Chair: One at a time.

Hon Mr Wilson: -- disagree with you, including your Liberal colleagues in nine other provinces. We are simply bringing the plan in to keep it affordable and sustainable.

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Mrs Caplan: What I'm saying to, Minister, is that you promised the people in the election that you would not bring in new user fees --

Hon Mr Wilson: And we have not.

Mrs Caplan: -- under your Common Sense Revolution plan. You said it. That's what they expected --

Hon Mr Wilson: And we have not.

Mrs Caplan: -- and I will say to you that what you have done is not only a betrayal but in fact it is hurting. It is hurting the people who can least afford it.

I have a note here from the United Senior Citizens of Ontario, and their concern is that seniors have always said that a user fee for drugs will disadvantage poor people and generate little profit after administrative costs. The policy of making people pay is destructive of medicare. If you agree with me --

Hon Mr Wilson: So the hundreds of millions of dollars of fees that you brought in on copayments for long-term-care services, for home care --

Mrs Caplan: -- and I agree with you that there is sufficient money in the health system, then what you are doing when you add these kinds of additional fees --

Hon Mr Wilson: -- do you regret doing that as Minister of Health?

Mrs Caplan: -- is begin the dismantling of medicare.

Hon Mr Wilson: Sorry, Ms Caplan. Your government brought in more fees on health services in this province --

The Chair: If we could have just one speaker at a time.

Hon Mr Wilson: -- which you quite correctly called copayments, particularly in long-term care, another $150 million was introduced under Bill 101 by the NDP, and we agreed they were copayments on accommodation and other health services. Those fees have all been in place, many of them jacked up during your time as Health minister, and you're telling me today you regret doing that. I'm sorry, but we have not brought in user fees.

Mrs Caplan: Well, you should be sorry.

Hon Mr Wilson: We are one of the few provinces in Canada in complete compliance, and your federal Liberal counterparts are not saying we're out of compliance with the Canada Health Act, which says, "No user fees," and we said, "No user fees."

Mrs Caplan: You should be sorry, Minister, because let me read you back your own words.

Hon Mr Wilson: I'm not sorry.

Mrs Caplan: These are your words: "For some time now -- "

Hon Mr Wilson: We're trying to keep the program affordable and sustainable --

Mrs Caplan: I have the floor, I believe, Mr Chairman.

The Chair: Order.

Mrs Caplan: "For some time now -- "

Hon Mr Wilson: You've given us no constructive suggestion on how to deal with the billion-dollar cuts from Ottawa.

The Chair: Could we get one at a time. Mrs Caplan.

Mr Martin: On a point of order, Mr Chairman: The member has come here prepared today to ask the minister questions. He won't let her ask any questions. What is the process?

The Chair: Just let Ms Caplan --

Mrs Caplan: Thanks, Mr Chairman.

"For some time now, there has been growing debate over the most effective way to ensure more responsible use of our universal health care system. In the last decade, user fees and copayments have kept rising and many health care services been `delisted' and are no longer covered by OHIP.

"We looked at those kinds of options, but decided the most effective and fair method was to give the public and health professionals alike a true and full accounting of the costs of health care, and ask individuals to pay a fair share of those costs, based on income. We believe that the new fair share health care levy, based on the ability to pay, meets the test of fairness and the requirements of the Canada Health Act while protecting the fundamental integrity of our health care system."

End of paragraph, next line, separated out in bold:

"Under this plan, there will be no new user fees."

Every intelligent person who reads that would come to the conclusion that you rejected the user fee, copayment approach, that you were opting strictly for your fair share health care levy instead. They would have expected reasonably that you would not have brought in a user fee or a copayment or delisted drugs or brought in a deductible, because you had rejected all those options. That's a reasonable reading, but I'm not going to belabour it. People will know your record, they know what you said, they know what you're doing, and you will be held accountable for that.

The Chair: Thank you, Ms Caplan. Mr Martin, you have 20 minutes in your rotation.

Mr Martin: I was wondering how much of that would be my being allowed to ask questions or the minister asking questions of me. Is there some rule?

The Chair: No. You can make your comments, you can ask questions, and the minister should be given some opportunity to respond.

Mr Martin: I want to follow up a little bit on the line of questioning of the Liberal member, but maybe not be quite so specific, and to focus on some of the context within which you are making decisions and to ask you some questions flowing out of that and to get some information on just what kind of long-term planning you've done.

In light of some of the very difficult and significant decisions you've made re the ability of some of our most vulnerable citizens to care for themselves and to pay for the services that they need, do you have any indication of just where all of that becomes counterproductive in terms of the overall health of the province and individuals within it?

In July, Minister, your government cut 22% out of the pay package of the most vulnerable and the poor in our communities. You would know as well as I, if you'd spent any time in your constituency office over the last six months, that it's creating some tremendous trauma and stress in the lives of a lot of the people I represent in Sault Ste Marie.

Between July and November you've gone about the task of changing the definition of how a person qualifies for assistance of various sorts, and so now in my community we have everybody all excited because the number of people on social assistance has dropped significantly, not understanding that the reason that people are off the social assistance roll in our community is because you've changed the rules.

Where a lot of the working poor, people who actually had jobs at minimum wage in Sault Ste Marie, qualified for a little top-up or a health card -- for various and sundry reasons there was some flexibility there before -- that's not there any more and these folks now are left to fend on their own for the very sustenance of life, to fend on their own to try and put food on the table for their families and their children and to clothe themselves in this very harsh, cold winter, and to try and make sure they have a place to live.

While all that is going on, people are dropping off the rolls, people are losing that little bit of top-up they had to help them make ends meet. The welfare offices are going through an exercise with people of trying to help them manage within the lower amounts of money that they're getting and are in most cases, because the rents they're paying are above the allowance for accommodation, asking them to move. You're putting tremendous stress on individuals who are least able to deal with it.

Then in November you made further announcements that you were going to cut some of the services there to support them through these very difficult times and to keep them at at least a semi-healthy level in terms of their ability to make everyday decisions and to not fall even further sometimes into the quagmire of the mental health system.

You've cut their services. I'll give you an example: In Sault Ste Marie, because of the pressure on the municipality by way of the cuts that you're foisting on them, they've had to make a decision to stop funding a family counselling agency that offered free counselling to people on social assistance.

You're doing all this to those who are most vulnerable in our society, particularly from a health perspective, because we all know from the work that has been done that some of the determinants of health are things like people's ability to make decisions around what they're going to buy for themselves and for their children, the kind of food they put on the table, the housing they have and the fact that they have a job at all.

By some of the decisions that you're making in the social services sector, you're actually going to be forcing some people who were able to work with a little top-up or some assistance from social assistance to have to go totally on the system because they need the health card.

At the same time as that's going on, you're cutting -- and you can call it whatever you like, you can describe it, define it any way you want. You tell us that down the road you're going to reinvest the money you're taking out of the health care system, but the sad reality of today is that you are indeed taking money out of the health care system at a time when you're forcing more people into a situation where they're probably going to need it, and at some point all of this becomes, in my mind, very counterproductive. What you're going to do is end up creating a whole lot of sick people, sick families, sick communities, and you're not going to be able to afford to, or the system's not going to be able to deal with the onslaught that will come.

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Have you been doing anything by the way of long-term planning, looking at numbers, balancing all these things, seeing how your particular decisions re your ministry fit into the larger context, so that at some point you might be able to say to your colleagues around the cabinet table: "Hey, whoa, this is too much. It's not fitting any more and the cost to my ministry and the challenge you've put on my ministry to find the savings that are needed to give the tax break to those who can afford, most of them, to buy their own health care" -- have you done anything to determine, to help you decide, as you move forward with the decisions you're making, almost on a weekly basis now, re cuts to the health care system, in the context of cuts to services and cuts to the most vulnerable among us, that would indicate to you that you've gone over the line, that you've gone too far?

Hon Mr Wilson: Mr Martin, everything we do is to bring prosperity and jobs and hope back to the people of Ontario and for you to say that we've made cuts to the health care envelope is irresponsible. We've not done that. The budget was $17.4 billion when we arrived, it's $17.4 billion today and we're doing everything to sustain that as per our commitment to the people of Ontario.

We still provide welfare and social assistance in this province at 10% above the national average, it being the most generous program in Canada and Canada being one of the most generous nations, I dare to say we're probably the most generous jurisdiction on Earth --

Mr Martin: Not for long.

Hon Mr Wilson: -- with respect to our social programs. Specifically, Community and Social Services still provides the $2.50-a-month payment so that people can get their drug card and we lowered, for the working poor, the $500 deductible. A lot of people simply couldn't afford to pay the first $500 for their drugs. We lowered that, expanded the base, lowered it to $350 deductible in the Trillium program and expanded the base by 140,000 people. That's good news, that's compassionate and that is what guides us.

We had a 42-year record of compassion in this province second to none, but we paid for the programs. What's happened is that with a $9.3-billion deficit, $9 billion worth of interest payments, the course your party put us on, would mean in five years' time we'd be paying almost $20 billion on interest alone. You tell me that's morally correct, that's the way to go? The largest government program would be $20 billion by the year 2001 and it would go primarily to foreign lenders. That is wrong and everything we are doing is to reverse that trend to ensure that we can pay for the programs and sustain our social programs well into the future, and to target the money we have to those most in need and that's what we've been doing in my ministry.

For you to say that we've been cutting health care is wrong. We've been trying to find waste and duplication in the system. We've squeezed every line item to make the reinvestment announcements we have today and we are looking to the hospital sector now, as you know, with the Treasurer's announcement, over the next three years to restructure, to re-engineer and those dollars to be freed up for other priority areas in health care, including community care.

Welfare rolls are going down in the province, not necessarily because the rules have changed in a draconian way, but because the rules have changed to bring hope back to people. I have third-generation welfare. My mother's been a teacher 31 years. She's now teaching third-generation welfare in places of my riding. That is wrong. Those people need to understand, and they do understand because many of them are friends and neighbours; I have my own family member on welfare because he has mental health problems, so I understand it very well. We live in the real community.

I visit my riding sometimes nightly during the week because I'm only 55 minutes away from the south end of it and I do riding appointments on Fridays, Saturdays and Sundays, which is the long-standing tradition in my riding. I'm very much in touch with the people. I didn't come from a wealthy background. My father was unemployed most of my life. I sent money home since the time I was 18 years of age and had four jobs going through university, so I'm a little tired of lectures from your parties and others.

What is irresponsible is to not pay for programs and to put false hope out for people and we're trying to reverse that trend. At the same time, everything we do, our motive is compassion. Our motive is to ensure that scarce dollars, and they're getting scarcer all the time with the federal cuts, are targeted towards people who truly need them, and that's what we're doing. Government can't be all things to all people. That was the trend of the last 10 years and it's a trend that's morally wrong.

Mr Martin: I have to say I'm disappointed in that I've asked somewhat similar questions, and some of you were here, to other ministers over the last month or so as we've gone through these estimates exercises --

Interjection.

Mr Martin: No, we get the same answers. It's out of some book someplace. It's an ideology, it's a theory that you're governing by that all of you obviously have gone to school to learn.

Mr Peter L. Preston (Brant-Haldimand): One and one makes two last month and one and one makes two today and it'll be the same tomorrow. You ask the same question and you get the same answer.

The Chair: Would you direct your questions and comments to the Chair.

Mr Preston: I'm sorry. Through the Chair, back to you, Tony.

The Chair: It is Mr Martin who has the floor.

Mr Martin: Obviously, these people are not listening to the people who live in their communities.

Hon Mr Wilson: We are listening.

Mr Martin: They're not hearing the stories. They're not spending enough time looking at what's happening. It's just been six months now -- or nine months -- and the pain that is being inflicted, the chaos that's being created, the number of people who are losing their jobs or are going to lose their jobs -- we're going to lose in Sault Ste Marie anywhere between 800 and 1,000 jobs by the time you're finished, and this is just the first round. The impact that will make on my community by way of the tax base and the spending patterns of people, the drag it will have on the local economy is unbelievable.

But I keep getting the same old diatribe, and I thought, Mr Wilson, you would be different. I watched you in opposition and you were a guy who presented from time to time like you really cared, like you really did understand, that you in fact did come from a background where there perhaps was some difficulty --

Hon Mr Wilson: Still do.

Mr Martin: -- and some challenge, and so could relate. But you're not doing that here today. I asked you a specific question and you went on with this mantra we hear all the time about how we have to do everything to bring back prosperity to the province. What does taking 22% out of the pockets of the poorest in our community have to do with prosperity? Nothing. I ask you the question again. Are you tracking, are you doing any studies, are you out there trying to figure out where all of this becomes counterproductive?

We now have in this community the potential for a TB crisis, an outbreak, because there are too many people sleeping on the streets. There are too many people out there freezing at night and coming to soup kitchens and food banks in unheralded numbers because of the draconian cut you've made to social assistance and the changes you're making in the public housing policy area. You're creating something none of us is going to be able to resolve in the end if you don't stop now, if you don't stop at some point and take a second look, because what you're doing is having an overall damaging effect on the lives of people in this province.

I ask you again, are you doing any tracking? Are you keeping the score, so to speak, in terms of how all this shakes out and how your cuts, combined with the cuts in social assistance, combined with the things you're doing in housing, are impacting the whole network -- economic, health and social -- we all live within and count on in this province to support us as we go through both ups and downs in the economy?

Hon Mr Wilson: The answer to your question, Mr Martin, is yes. Our whole focus is to ensure that our programs are affordable and sustainable and that they're targeted to people who need help. You will find that every ministry keeps that very much in mind and does do workups and plans to ensure we keep that as our bottom line.

Compassion is our motive, and the politics of the day is to go out and have others suggest otherwise, I suppose, but I can tell you that the vast majority of people think we're on the right track. They understand because they run their households, like the government should run its household, and they understand the actions we have to take to get our books in order.

I should add that Mr Martin again has added another $400 million to the cuts, in his budget of two days ago, to the health and social transfer that will impact very directly on this province.

Mr Martin: And we disagree with that.

Hon Mr Wilson: Again we point that out. We're trying to be a bit different in not every day pointing fingers at the federal government, but also we want people to understand that the things we're doing are to respond to reductions in money that we have to spend on programs and therefore we need to better target our programs. That's what we're doing. We're keeping an eye on the bottom line, which is the compassion and the help the people of Ontario need from time to time.

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Mr Martin: That's not the way it's playing out, certainly in my part of the province as more and more people find themselves under the gun. Where they had a little hope a year or two years ago regarding the economy and their ability to make ends meet and were starting to make some gains, all of that all of a sudden has disappeared for them. The rug has been pulled. It's across the board, in every ministry. Every day we wake up there's another announcement about money being pulled from some program or other that supported either a community or the economy of a community or people within a community as we tried to move ahead in this province.

A lot of what you're doing, in my mind, is based on a false premise that somehow in this province we had this major crisis that was happening to us and because of that you've got to now make these very, very difficult and deep and significant cuts. I suggest to you that you don't need to do that and that there is another way of working with people in their best interests and listening to people so that they might share with you the impact this is having on them as this province moves forward.

In 1994 in this province we saw record investment from outside sources. In my community, people were spending money, the economy was well and there was an upbeat feeling among people, particularly, I remember, after the Christmas of 1994 with the small business retail sector and the consumers because of what was done at Algoma Steel and St Marys Paper and the ACR by our government re the restructuring of those industries. That all has an important impact re the health of the population and the cost of health care to that population.

I suggest to you that what you're doing is going to take us down a road that's going to eventually cost us, and not only in terms of dollars but in terms of potential, the potential of people to contribute, because they'll be too sick to. Maybe next round we can talk a little bit about the potential TB crisis that's beginning to loom in this, the biggest city of our province.

The Chair: That's a good idea. Mr Preston.

Hon Mr Wilson: Could I take one minute, Mr Preston?

Mr Preston: Take as long as you want, sir.

Hon Mr Wilson: Thank you. I think it's important at some point today, because the deputy minister spent a great deal of time yesterday explaining what we are doing about tuberculosis, and I think she'd like the opportunity to do that today. We don't have to do that right now, but at some point, because we can't leave that hanging on the record as if the government and public health authorities aren't doing anything.

The second thing is, Mr Martin, you can do better with less. My municipal council in Collingwood did a survey of all the people that are in the counselling and youth employment service business in my riding: 52 agencies. You tell me that the money government is providing is actually going to front-line services when you've got 52 executive directors and 52 agencies which applied for every grant going. Some of them probably, I know for a fact, aren't really themselves qualified to deliver these, but they've got a shingle out front that says they're counselling for X, Y and Z.

I went through the campaign very clearly and said that some of these executive directors are going to lose their jobs, because that money has to be put into front-line services, and overall the government has to start paying its bills as we go along. I think if you did a survey in your area or other areas of the province, you'd find that we can do better for less.

I didn't do the survey, the local council did, because for years they've said, "Jeez, shingles keep popping up, with people who say they're in this business and that business." The fact of the matter is that we've got those people together. The county council, for example, under the guise of the children's aid society, now has them all coming to meetings, sitting around the table. Many of them had never even met each other before. They say: "You're in youth counselling? Jeez, I'm in youth counselling too. I didn't even know that. Where are you?" "Well, I'm at the other end of town."

We've got to better target our money. The growth industry has been in administration both here at Queen's Park and throughout the province. We've got to target the money, and that's what we're doing. Sometimes, by using government's fiscal levers, it makes people come to the table and it makes them want to do more with less, and that's what we're seeing. I'm not seeing what you're saying. I'm seeing tremendous cooperation, both in the sectors I have responsibility for and in Community and Social Services in my own riding, and it's good news. A number of people, once they get together and realize the waste and duplication in the system, know they can't justify that to the public, and they're working cooperatively to drive dollars down to front-line services. I see a lot of good things and cooperative ventures happening in the province that are long overdue.

The Chair: Did he answer your question before you asked it, Mr Preston?

Mr Preston: Oh, no. But he did discuss the TB situation, and Tony touched on the TB situation as if nothing was being done. If nothing's being done, I'd like to know how they found out about it. If nothing's being done, how did they find out 24% of the staff have been in contact? I don't know whether there's a big lineup at some door where people walk in and say: "I have it. He doesn't. He doesn't." Somebody was doing something to discover it.

And for Mr Martin to depict the financial situation as fictitious, I cannot understand that. It may have been fictitious to you when you created it, but it is not fictitious today. It's not a fictitious panic we're in because we have a fictitious problem. We have a very real problem. I think some of the things the minister touched on in order to cure that problem -- again, what are we curing if there isn't a problem?

The reason we're having to do some of the things we're doing, Mr Martin, is because of a problem we've had for quite some time.

Mr Martin: No, it's to give money to your wealthy friends. Clear the record.

The Chair: Let's keep some order.

Mr Preston: That's right, Mr Chairman. I thank you very much. Good. Oh, I thought he was leaving, and that's how he was going to create order.

Mr Martin: I'm really interested in what you have to say, Mr Preston.

Mr Preston: The problem we have has to be cured even if it is considered fictitious by the other parties. It is not considered fictitious by us.

Hon Mr Wilson: Mr Preston, could be perhaps allow the deputy one minute to explain what we are doing, to recap, since Mr Martin was unable to join us yesterday, I guess.

Mr Preston: No problem.

The Chair: I'd just remind you that Mr Baird has a question too. Deputy?

Ms Margaret Mottershead: I'll be quick, because I think the record of Hansard will show what was already said yesterday. But for your information, Mr Martin, we have redeployed a whole number of nurses from the public health departments to go into shelters to deal with the homeless one-on-one to observe that they are taking therapy and are taking their medication. They are making sure that -- with this particular disease you have to take three antibiotics all at the same time. They are doing that in a very direct way.

I mentioned that we are also working with the immigration department, and officials there have contacted a number of Ontario physicians so there is more screening of refugee claimants and others as they come through airports, and that work is going on. Guidelines are being developed for the front-line staff, those nurses I mentioned, so they know exactly what to look for and how to treat it, and there has been a major redeployment so far and it will continue until we see this terrible disease decline again. That's for the record.

Mrs Caplan: Could I use one minute of my time, since we are dealing with tuberculosis at this point, to put a question on the record?

The Chair: I will have to ask Mr Barrett, who is --

Mrs Caplan: I'll take it from my own time, but I think it's appropriate that we do it now.

The Chair: Okay, Ms Caplan.

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Mrs Caplan: It's just one minute. There's an article today that suggests that 37% of the people using shelters in downtown Toronto -- I'm going to read exactly the quote. This is a study released March 21 by the Toronto Board of Health, which found that "more than 37% of homeless people using the six downtown shelters were infected with TB." I don't like to overuse the word "crisis," and I don't, but when you have that size of population infected, the statement I'd like to hear from the minister is an assurance that there will be no cuts to public health budgets, that you will ensure the funding is maintained so they will be able to deal with tuberculosis and any of the other diseases.

Hon Mr Wilson: We've certainly not cut public health budgets.

Mrs Caplan: Just give some assurance that you do not intend to.

Hon Mr Wilson: In fact, one of our reinvestments, and certainly a goal of the ministry when you talk about outcomes, is to wipe out measles in this province by next year. It is an absolute shame that Latin America wiped out measles over the last five years, and yet with all the money we spend on public health, which is a great sum of money, more than they spend per capita in many of the countries that have wiped out things like measles, I don't feel we're targeting the money to front-line services. Our reinvestment was some new dollars for measles and also getting the public health authorities out, as the deputy has said, to deal one-on-one with these problems.

People should realize that's somewhat controversial. I have a sister-in-law who is in public health who says it's been about three years since she's been out of the office. She makes up education kits for others to teach. Public health nurses, many of them anyway, would like the opportunity to go out one-on-one, and certainly with the measle vaccination program they're also able to have a little conversation with the children in the school auditorium and to see if there are other problems out there.

When we went to school -- I'll put us in the same age group -- public health authorities periodically came into the school and checked for head lice and checked for dry skin and checked for other problems, including emotional problems that children were having. We're trying to focus that. With St Michael's Hospital, here in the article, taking a special role because of their service to the indigent population, to the homeless in Toronto, and also the targeting of more public health nurses, I'm confident we're doing everything we can to direct that.

Mrs Caplan: So there will be no cuts? That's what I need to hear.

Hon Mr Wilson: No, there aren't any cuts, and we're certainly not planning any.

Mrs Caplan: Great.

Mr Toby Barrett (Norfolk): Yesterday we discussed with the deputy minister the need for a better information system to deal with fraud and doctor shopping and overuse of our health care system. The smart card system, which will be a massive undertaking, I feel will have a very significant impact on our health care. But getting an initiative of this magnitude off the ground will take a considerable amount of time and money, and I don't think government should try to do this alone.

I wish to ask the minister, do you see opportunities for joint ventures, not only with physicians and pharmacists and hospitals but with the private sector? Second, what's in it for the private sector, given the risk involved? What would be the payback for private sector involvement in what I consider a massive undertaking?

The Chair: Golly.

Hon Mr Wilson: The Chair once again reminds me that the tough questions come from my colleagues.

Mrs Caplan: I'll try harder.

Hon Mr Wilson: It really wasn't a challenge, Elinor.

It's a very good question. I know the deputy had an opportunity to talk about some of our thoughts on this. First of all, I want to make it clear that it's not necessarily a smart card system, but a smart system, and there is a difference. If you read Thomas Walkom in the Toronto Star once in a while, they criticize us for a smart card.

There was a pilot project done by the ministry three or four years ago in Fort Frances, the Rainy River area, and one of the problems there with the smart card was that if you put the transaction, the health service encounter, the visit to the doctor or hospital, on the computer chip on the plastic card and people lose the card, then you lose that information. What the government learned from that pilot project -- what the government of the day learned, and the information's been passed on -- and also the North Shore in Quebec did a similar project, and the big problem was that people would lose their cards.

There's no sense in putting the card out there, whether it have a computer chip in it or continues to have a magnetic strip, without developing the computer system. I think everybody understands that. We do have to remind some of the media from time to time, who have big headlines, we saw, on smart cards and what a stupid idea that is, that yes, it wouldn't be a good idea if we didn't download that information on a regular basis into a centralized database. That's where we're headed.

We had a symposium -- again, I missed whether this was explained yesterday -- of more than 60 companies about a month, a month and a half ago at the ministry. We've had a lot of private sector companies and hospitals come forward who are already running very large information systems, often, in the case of Toronto, for example, linked with other hospitals, but we have those systems running in isolation. The systems still aren't talking to each other. We have north Toronto developing a health information network, we have the east, we have hospitals along University Avenue developing linkages.

I was visiting Mr Carr's riding not too long ago and was able to see instantaneously X-rays that had been taken at Sunnybrook hospital transmitted over to Oakville-Trafalgar hospital; the X-ray that was just taken comes up on the screen. When I was in Timmins just recently, they are doing the same thing with hospitals from Sudbury to Timmins. No longer does the courier or the patient have to bring the X-rays over.

One thing we want to do as a government is remind the privacy commissioner, who got all freaked with Bill 26 when we tried to apply some rules to all this, that with or without his blessing this is happening, and he's got to get up to date. That's what I've told him in meetings. He's got to get up to date. X-rays and confidential information are going across the lines right now, whether we acknowledge it as a government.

Semblances of a smart system, a system that is online and provides a patient record readily available to health care providers in a confidential way, are already out there. The trick for government, with the private sector, Mr Barrett, is to link that. What's in it primarily for the private sector is that if in Ontario we could truly have an information system so that we knew in a timely way exactly what the interactions are in our health care system, the private sector, because it would be the first time a comprehensive information system like that for such a large population is developed, would be able to have that as a showcase.

We know in some managed care systems in the States that they have pretty good information systems. Columbia, for example, which is a $20-billion health care conglomerate in the States -- aside from the fact that they're a managed care system and all the things that people might have concerns about there -- do have a very good information system. To me, it's a bit too Big Brotherish. One of the reasons our physicians are not going to the States in the numbers they used to in the past is that when they put a diagnosis on the computer screen in their office, a choice of about three treatments come up, and you get paid based on whether you follow the computer's advice. Our physicians are now coming back, because we have people wanting their billing numbers back, saying, "I didn't go to school all these years to have a computer dictate to me and to have my pay based on whether I follow these procedures."

It's already happening throughout the world and what's in it for the private sector primarily is to showcase Ontario as a comprehensive system. That would be a great thing. We are planning on putting out a request for proposals in, hopefully, a couple of months; we're still on track, I think. We've been working with the private sector and the public sector to put the language together on what that tender should look like -- and how we should pay for it. Certainly the Ministry of Health doesn't have the millions of dollars required to pay for it, and why should we duplicate systems out there when a lot of people already own a lot of the phone lines and that sort of thing that are going to be used? We're working with Bell and a lot of major companies that have developed both software and hardware, and we want to use, not replicate, what's out there.

It may mean, in the short term, that we continue to use the health card. The good news, after both the Liberals and Conservatives got after the previous government, is that they did bring in a very tight registration for new registrants of health cards. You have to bring in at least three original documents now, rather than the blank form we got a few years ago where people apparently did put parrots and dogs and a few other things in as a joke, and they got into our computer system. Now we have the re-registration of the province on hold pending a new information system, and when we re-register we will have a very high confidence level because people have to show original documentation, like you would for a passport or for other government forms. That's the track we're on.

You had another question in there too, did you not?

Mr Barrett: No, I think you answered the second part, in terms of the payback for the private sector.

Hon Mr Wilson: The previous government, to be perfectly frank with you, got into discussions with a banking consortium, which didn't really go too far. The banks wanted a fairly high transaction fee, like you would for the ATMs. It's a buck, I think, a lot of us pay if you don't use your own bank's automatic teller machine. That was a bit too rich, I think, because we do, in drugs alone, 42 million prescriptions a year. I don't know how many physician contacts we'd have.

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Mrs Caplan: It's 12 million.

Hon Mr Wilson: Twelve million?

Interjection: A month.

Hon Mr Wilson: Twelve million a month is just the physician contacts that we pay for each month. So it's a lot of interaction in the health care system going on on a daily basis.

The payback for the system, of course, we don't really know right now, unless we have people like Dr David Naylor in the Institute for Clinical Evaluative Sciences out in Sunnybrook take a snapshot of the system once in a while, which they did when they produced the atlas about a year and a half ago. There was a comprehensive study released on how many Caesarean sections we'd been doing in Sudbury versus London, Ontario, for example, or Toronto, and different procedures. It's difficult for us to know how many visits you would do to your family doctor before you're referred to the specialist, before you're referred to the surgeon and cardiac and what all the follow-up care is. We really don't have a good idea of that, of all the service transactions that would have occurred, the cost of that.

For example -- we mentioned this yesterday -- in the area of cardiac, we've asked -- and they'll be reporting, hopefully, in a couple of months -- the Provincial Adult Cardiac Care Network to give us a continuum of service, a plan, which would be prevention, then to the onset of disease, post-operative and then rehab. It would be nice to know so that we can plan. We know people are going to have heart disease. I think it's the number one killer of people in Ontario. So we need a better plan, as a government and as a system, and budget for the onset of that disease and try and prevent the disease in the first place.

The payback is enormous. It's a huge, huge job, but it's one that we're committed to doing.

Mr E.J. Douglas Rollins (Quinte): Have we still got a little bit more time left?

The Chair: No, I think you're just about done.

Mr Rollins: One quick one. In developing this type of smart card, has there been some consideration given to other ministries to carry in with the same card? Can you expand on that a little bit for us, Jim?

Hon Mr Wilson: I'll try and be brief. Right now, as you know, we're having discussions with Transportation and Community and Social Services and Health. People are registering and we have a lot of civil servants helping people fill out forms and processing forms. They're registering several times to get a service from government. Why can't we ask all the right questions up front once and then on the form say, okay, this is the tombstone information we know through that registration?

Our thought is, if we're going to go out and re-register 11 million people in the Ministry of Health, then why don't we also update all the other databases? Consumer and Commercial Relations, which runs the birth and death databases, theirs isn't exactly the best database in the world. From time to time they try and send out letters, and they get a really high rejection rate because they don't have up-to-date addresses on people.

So all we're saying is, if we're going to go to the expense of re-registering people to get the health card database up to date, why don't we ask a few more questions that other ministries are also asking and do it all at once? That's what we're talking about. We're not talking about people who have your driver's licence number being able to get into your health care information. Nobody's talking that way and it's certainly scaremongering when people suggest that sort of thing. But what we call tombstone data -- your name, address, sex and a few other pertinent pieces of information that other ministries are asking in their own silos -- why can't we get together? And it's not a new idea. When I used to work at Management Board back in 1985 they were discussing this, and I guess our government is pushing the civil service and the private sector to actually make this happen. So we hope it does happen.

Mrs Caplan: There are a number of issues I'd like to pursue, but since you've raised the issue of the smart card, I'd like to just get a couple of things on the record.

First, I know you won't be surprised to hear that I support a smart card for health services. I've said that publicly before in numerous speeches over the years, and as you also know, it was our intention to move in that direction from the time that I was at the ministry. Unfortunately, the NDP cancelled the computers that were part of our plan and therefore you had lots of ammunition in opposition, and I know you enjoyed that a lot, so we won't get into that today.

I do want to be really clear. Step one must be the protection of privacy and confidentiality, and I have some concerns about your comments regarding the privacy commissioner, because I believe that his mandate and his intention, as he said when he was at the Bill 26 committee, was to support the use of smart card technology and ensure that they had the confidentiality provisions attached to it. I believe that's possible; he believes that's possible; I think he's up to speed. I think what you need to get up to speed is with legislation that will put in place those protections, as he's recommended, and I would require, as your critic in opposition, that that legislation be in place before you implement a smart card. That was our intention as well. We feel that those two go hand in hand. That's the point I wanted to make first.

Second, I want to be unequivocal. Having acknowledged that the technology is there to protect personal privacy and confidentiality and do what needs to be done with a smart card for both better planning and management and ensuring that people are getting the care that they need, a smart card can be very helpful. I think that it also can improve quality of care, because many people forget what drugs they're taking, just as one example, and having that kind of information I think would lead to more appropriate treatment and better quality of care for people when their health providers have that information. That is the primary reason why I support the use of a health card, because I think that it will improve the care that people get. I want to make that point.

But the Liberal caucus, and I, as Health critic and a former minister, oppose absolutely the notion of a Big Brother, all-purpose smart card for the people of Ontario that would combine driver's information, transportation information, health information, Comsoc information, hunting and fishing licences and anything else in one card. I don't think people would mind carrying two cards. That notion of a Big Brother, one huge database is contrary to everything that everyone believes in.

I just want to be very clear: We support a card for health services, and we oppose an omnibus card for all services that go beyond health care; let me be very specific.

If you want to talk about anything else, I'm happy to discuss it. There may be some social services where that would be appropriate; I'm willing to have that debate. But if you come forward with a card that is an omnibus card -- "comprehensive" is the word that you used -- a single card, we will not be supporting that approach. We feel it is absolutely wrong for you to go beyond health and some limited social services in your approach to a health card. We think that that is an unnecessary intrusion and we're very concerned about the centralization of all of that information and the potential for abuse when you have that kind of system in place. I wanted to be on the record on that.

I do have a question I would like to ask you. I was at a meeting last night and the concern was raised, and just as I've asked you on a couple of occasions to give some assurance, as you did with public health, I'd like you to give some assurance to the community health centres that you support community health centres. Do you, Minister? Do you support community health centres?

Hon Mr Wilson: We're reviewing community health centres in the context of primary care reform.

Mrs Caplan: That'll not give them any comfort.

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Hon Mr Wilson: Well, it doesn't mean you support them or don't support them. I've met with the association. I've talked about cost-effectiveness. We've talked with them about primary care reform.

We have 52 community health centres now. We have 72 health service organizations. We need to assure the people of Ontario that they have good access to primary care and we need a system.

We're supportive of the community health centres we have. We're still funding them. The future, though -- we have 14 studies in now with respect to primary care reform, and what we've said is in 1996 we'd like to get moving on primary care reform. The ad hoc way, with HSOs and CHCs and many other sorts of things we have going on all over the province, is not solving our physician distribution problem, which is the number one problem for me personally in this government. When just outside of Toronto you start having a problem, it's no longer a northern Ontario, faraway problem, it's a problem that's increased by some 30% since 1990. We now have some 70 communities under the underserviced area program. That's up 30% since 1990. The problem's getting worse, and that's with things like CHCs, more CHCs, coming on line.

But the concept of multidisciplinary teams and all the good things that CHCs stand for, I'm certainly supportive of that. We want to do it in a broader context, though, of the province, and we've made no determination exactly how primary care reform is going to look. The next report to come in is from PCCCAR, which is the provincial advisory committee on academic health science centres. I think I've got it -- something like that; it's a long one. They met on Monday of this week. They're just about ready to report too, and I can assure you that they're taking community health centres, health service organizations, rostering, all that sort of thing into account, and we'll have to see what sort of big picture is presented. The end of April, perhaps May, to be realistic, we'll have a synopsis together, we hope, of all the different primary care reports, including input from the community health centres.

Mrs Caplan: Again, I'd like to say that I'm very supportive of primary care reform, but I believe that within primary care reform there must be a continuing role for alternative delivery mechanisms, and community health centres, which have made an enormous and important contribution in this province, I think should be recognized. I think they deserve to have some comfort that they have a role and be assured of stable funding and a recognition that they are unique, because they not only have a multidisciplinary approach, but they also have a mandate to deal with the determinants of health, which I think is an extremely positive influence in primary care. They are also a place where health and community services have been able to come together in the delivery of primary care services.

So I'm a little distressed that you are not prepared to acknowledge that there will be a continuing role and not have a one-size-fits-all type of solution that would see community health centres not supported. I would like it today if you would acknowledge the important role they have played and give them some confidence that they have a future and that you will assure them of stable funding and that you support their role of dealing with the determinants of health and the areas of health promotion and disease prevention, because they have served communities that are hard to serve.

Hon Mr Wilson: We certainly acknowledge the valuable role that the 52 centres are playing now. Again, it's incumbent upon us to finally get in place -- and you and I both talked about the lack of the blueprint for health care in Ontario. Primary care reform is the absolute rock-solid foundation on which we must build that blueprint, and it would be premature of me to say to any one of the hundreds of groups out there, who all have their own thing going, much of it very good in providing daily services to the people of Ontario -- premature to sort of single out one segment right now without getting the bigger picture. And you're absolutely right: It won't be, can't be and would be impossible to implement if it was a cookie-cutter approach. So primary care reform is looking at the different populations in the province and the different needs and cultural needs and sensitivities.

What I need some time and some understanding from you is to put -- many of these reports, I mean, the 14 we have are the recent ones, but reports go back to the 1970s, if not earlier, 1968. If you went to the library and asked for them all, there's shelves of them. We need to put a comprehensive piece together to take to the public, and to the providers, including community health centres, to say: "Here's the basis of a plan. Let's work on fine-tuning it, and let's start implementing primary care reform in this province.

Mrs Caplan: I have no hesitation in recognizing the need to develop a system. I have no hesitation in supporting the need to have primary care reform. But I think it's important, Minister, that you give a message which will give some confidence and some stability. I'm going to underline the word "stability" because while you are implementing and making changes and talking about what you're going to do, that chaos provided by statements that do not provide assurance and stability that you have a future, I think, has an impact on patient care, because when morale is affected and people are worried about the future, they do not respond as appropriately as if they have some sense of security of what the future holds.

I think people can deal with change in an environment where they know that they are going to be a part of the solution. Given the leadership and innovation that we have seen in community health centres and in that movement over the last 20 years, surely you should be able to say that you envision a role for them to give them some stability and some assurance that, as you move in primary care reform, you're not going to see community health centres in jeopardy. You can't give them that assurance that you think they're important, that they've done a good job and they have a role?

Hon Mr Wilson: I've been perfectly honest with you. We're looking at the whole picture and we'll be certainly taking their role into account. Nobody is under the impression that the status quo is maintained in all of our systems, so the challenge to community health centres and everyone else is to inform us how they best fit into the vision of primary care reform which is being developed. My understanding is that's exactly what they're doing.

Mrs Caplan: Well, just to put it on the record and be absolutely clear --

Hon Mr Wilson: I'm not even sure, frankly, Ms Caplan, exactly what their total vision is going to be either, so it's one of many pieces. It's a little premature.

Mrs Caplan: I understand. I want you to know my perspective because I'm aware of this and I know that community health centres, because of their innovation, because of their different approach, because of the fact that doctors are on salaries and are accountable to boards in community health centres, which is a very different model of primary care in Ontario, have been a thorn in the side of the establishment since they were begun some 20 years ago, and from time to time they have had more or less support, depending upon the attitudes, frankly, of the minister. If a minister has supported CHCs, they thrived and expanded. If ministers did not support that approach and preferred instead the traditional fee-for-service medical model, they did not thrive. The reality is they survived. They survived all of those different ministers and all of those different attitudes and have made an enormous contribution in this province.

I would urge you, as part of primary care reform, which I support, that you ensure a role for those who have done great service to this province by providing a model that has served the most vulnerable and disadvantaged and hard-to-serve extremely well, and that those people not be placed in a situation where their future is threatened because of your desire to accommodate the wishes of those who, for years, opposed the community health centre movement. I want to be very clear that you understand their concerns. I think they are real. I am also very sympathetic to your physician manpower and maldistribution problems.

I believe that the community health centre model, particularly for rural communities with smaller populations, is a very viable model because it allows you to incorporate nurse-practitioners and others as part of that team in a community where, in a rostering system, the population could not support more than one physician. That guy is going to get burnt out and he or she is not going to want to stay there, whereas a community health centre model I think can be very supportive and can be an important part of a primary care system and primary care reform to meet some of those issues of how you encourage physicians to serve rural and northern communities.

I also want to go on the record as saying that I'm very concerned about your approach with billing numbers because I think that creates a chill. When I say "a chill," you will have exactly the opposite effect. We heard yesterday one of my NDP colleagues, Mr Bisson, saying that you want physicians to come and stay. Well, I want to go on the record as saying that I oppose the shanghaiing of doctors. People want to be treated by doctors who want to be there, and unfortunately the reality of small towns and northern towns is that they have had trouble attracting and keeping.

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I think we can solve the attracting problem but I think that doctors must have freedom. If they have other opportunities across the province, they must have that opportunity to move around. We should not say, by billing number, that you are restricted to one area or that geography says you must go there and stay there, because I don't think the community is going to get good care from somebody who doesn't want to be there.

I think that life in rural communities and northern Ontario can be very attractive and can be made attractive, but you're going to need the professional supports which technology now permits and you're going to need the kind of supports that are possible through continuing education and contact with larger urban centres. But you're also going to need the support of other members of the team, because in small towns you get burnout if people are working 24 hours a day, seven days a week.

So the community health centre fits, I think, very well in responding to that and I'm therefore very concerned about your approach with billing numbers because I think it sends out all the wrong messages. I think they are unnecessary and that there are much better solutions and responses. Frankly, my view is that the rostering option and primary care reform should mean that billing numbers are unnecessary.

Hon Mr Wilson: Exactly. I've said that --

Mrs Caplan: So why you left them in Bill 26 is beyond me, since you have everybody agreeing to rostering.

Hon Mr Wilson: Well, not everybody's agreeing. If it was that easy, we would have done it.

Mrs Caplan: When you get the OMA agreeing to rostering -- let me tell you, as a former minister, if the Ontario Medical Association had agreed to rostering, I would have --

Hon Mr Wilson: I read the book you gave me.

Mr Joseph Cordiano (Lawrence): You would have done it a long time ago.

Hon Mr Wilson: I shouldn't have said that publicly. That's the worst thing I've said in two days. I read the book you gave me.

Mrs Caplan: So that's a real advance in thinking. I think it is a positive move and I'm pleased to see the Ontario Medical Association supporting the concept of rostering, but I believe that community health centres fit within that concept as well. I just want to make that point.

Hon Mr Wilson: Sure. I agree with just about everything you've said. First of all, to make it clear for the record, we're not in any way looking to destabilize the 52 community health centres we have now. They came to Bill 26 and I was disappointed in some of their comments, because certainly in the discussions we've had with them, both myself personally and as a ministry, they understand that we are moving primary care reform and they are, I hope, going to continue to use their time constructively to tell us how they fit into the future of primary care.

Rostering is not -- there are pockets of health providers, physicians, talking about it, and frankly all of the reports talk about it. The big problem, I suppose, without a comprehensive information system, that I question in all of the reports, and not allowing user fees under the Canada Health Act -- Dr Wendy Graham's report, for example, the most recent one from the OMA --

Mrs Caplan: I don't support that.

Hon Mr Wilson: It's very difficult and I'd be interested in anybody's solution to this, because nobody has a solution to this.

Her report, for example, says if you go outside of your rostered area -- and maybe you could have two rostered areas, where you work and where you live -- you should pay a fee, much like going outside of your managed care system in the US. If you don't make prior approvals or prior arrangements, you should pay a fee. Well, that's illegal under the Canada Health Act. So once again with the OMA, as we've had with so many discussions, that part unfortunately needs to be solved.

They talk about contracts with the roster group, whether it be a community health centre or a physician group practice or whatever. How do you get consumers, other than using moral suasion I guess, to stick to their end of the bargain, which is, you're contracted for the vast majority of primary care services with a group practice?

So that's the debate, and I'd be open to any solutions on that one. Otherwise, I think we could go ahead with pilots on more rostering. Remember, we have health service organizations now that have that model, that do roster patients, who are paid on a per capita basis for the services that they provide. I'd appreciate any help.

Mr Martin: I would like to also say that I support some of the comments by the Liberal member regarding the reallocation of doctors and the problem that we have in the north, but that's not what I wanted to --

Interjections.

Mr Martin: Are we ready?

Hon Mr Wilson: I'm sorry. Getting some free advice.

Mrs Caplan: That wasn't on the record.

Mr Martin: That's good. I think you've got some good ideas, Elinor, and you should let him have the advantage of them.

I just want to go back to the line of questioning I was on before because I have some real concern that, as a government, Mr Wilson, you folks really don't have any idea of the trauma that you're causing, of the stress that you're creating and of the damage that is being done to the fabric of Ontario as we know it by the decisions you're trotting out each day that goes by now. I suggest to you that even though you don't have any benchmarks in place, you don't have any formula that you're looking at or any points of reference to look at, they're going to happen for you anyway and you should be paying attention.

One of them, most obviously, here in Toronto, because this is where most of the people in Ontario live and where, more and more, a lot of the people who live outside of Toronto are coming to because you're taking away, by way of your approach to government downsizing and not stimulating the economy, at this point anyway, any opportunity for jobs to be retained or to be created or any diversification to happen. So people are coming to Toronto.

They're coming from the Sault, they're coming from Timmins, they're coming from Thunder Bay and points in between to Toronto to look for work and to look for a better opportunity. But when they get here, they find that it's even more difficult here to keep body and soul together and to find a place to live that's decent. So we are beginning to see indicators that your program is not having the effect you suggest in one of the statements you made to me here at the last round, which is that "we're doing everything in our power to bring new prosperity to the province."

A month or two ago we had three people freeze to death on the streets of Toronto. Before that, we had the numbers of people sleeping and lying on the streets of Toronto at night increase. It's obvious as you walk around that this winter is different from last winter by way of the numbers of people who are now sleeping on our sidewalks and on our park benches and on our grates. That has to indicate something to you. That has to tell you something. That has to mean something to you if you have any kind of heart at all.

Then we have three of those people freeze to death. You can write that off to, you know: "That was their choice. They chose to sleep on the street. They could have chosen to sleep someplace else." We all know that most of the people on the street today are victims of both an earlier time and the fact that you've now, by way of your cutbacks, put pressure on the system such that, for these folks, their health -- and that's what we're focusing on today, their health, their mental health -- is deteriorating to the point where they've given up any semblance of hope of ever having a decent place to live or ever having a decent income. So they're sleeping on the streets and three of them froze to death.

I didn't hear anything from this government by way of a response to say why this happened or some kind of program to maybe mitigate that happening again. I know there are lots of volunteer organizations out there that have responded in ways that have been helpful, but this government has not in any obvious way said to the people of Ontario, or by that hopefully to themselves, that we have a problem here, that this is indicating there's more going on than we are willing to see or admit to.

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Now we have an outbreak of TB. I give all kudos and credit to the fact that after we have discovered that we have TB we're doing all we can. We're bringing in nurses and we're bringing resources to bear on this problem. That's fine, and I give you credit for doing that. If you hadn't done that, there definitely would have been something wrong. But the issue here is that we have the potential for the beginning of a TB crisis in the province. We haven't seen that for a long time. What is that indicating? What is that telling you? What is it saying about the program that you as government are rolling out now? How many of these types of ugly occurrences do we have to see before we begin to determine that maybe we're going too fast, that it's too much, that maybe it's not the right direction to be going? Is it when we have people starving to death on the sidewalks?

At what point, Minister, do you as a government become so alarmed that you do things such as perhaps walk away from your promise re the tax break so that you can begin to spend some of that money on some of the programs that are so important to the people of this province, so that they can keep themselves healthy enough to be able to participate in the new economy that you propose is going to happen somewhere down the line as you implement your strategy and your agenda?

Hon Mr Wilson: I appreciate your comments. I would say, though, that anything I've studied on the problems of an indigent population or homelessness in our society is that these problems, Mr Martin, in all fairness to this government and to the people who have been working on these problems for years, take years to manifest themselves. People develop mental illness, which is often the root cause. They're not poor, some of the reports will indicate, certainly out of choice; they're poor because they're unable to make those daily decisions. A large number of them suffer from schizophrenia, for example. They take years to manifest themselves. You don't necessarily just end up on the street overnight.

For example, one of things we should get credit for is that we used to give the $170 shelter allowance to them whether or not the homeless or people on welfare spent it on shelter. We've said that we'll pay actual costs. "We want you to go to a shelter. We want you to find housing, and we'll pay the actual costs rather than just simply give you this lump sum every month." So that was a change in the rules to make sure people did go to the shelter.

You know and I know that it is a very complicated problem. Mental illness has a lot to do with it, and we've not made cuts to those programs. St Michael's Hospital and Queen Street Mental Health Centre both have Get Out of the Cold programs which we fund. So you cannot blame this government; it's a bit of rhetoric to say that we're responsible for increased homelessness. These problems, as I said, take a long time to manifest themselves.

We have young people who are able-bodied on the streets. I walk home to my apartment every night and I often chat with people down by the YMCA, and why they're on the street is beyond me. Why we had for a short time a problem of homeless people, youth, in Collingwood was beyond that community. The community didn't put up with it, and said: "Fine. Billet at my house." When they said that, they left and went to Toronto. Why, I don't know.

I read a report recently on the deference to authority and suspicion of authority. One of my good friends in Wasaga Beach, for example, is a supervisor at the ambulance and she says, "People call us to go because we have people that sleep on the beach in the wintertime and the summertime in Wasaga Beach" -- throughout the province -- "they don't want the help." One of the frustrating things for ambulance personnel -- by the way, all of that money is intact. The ambulance average response time in this province is fantastic, and they'll spend time on the sidewalk trying to say to people: "Look, you're going to freeze to death tonight. Let's take you to somewhere where you can get help." The deference to authority, part of the mental illness, part of the complicated problem is not something that's solved overnight, but to blame it on this government is I think really unfair, and we do have the programs in place.

TB, for example, is part of the screening of the federal government to do with people coming into the country. As the deputy said, we're working with them to tighten up that screening. TB doesn't necessarily manifest itself in the population; it has to have an origin, and while we thought we had it wiped out in Ontario, we have thousands of new people come in every year and I think we can improve the screening there. So there a number of things are being done.

With our shelter allowance changes, one would have thought it would encourage people to actually find shelters so they could get the money from the government, which is available. We must make it clear that it's still there, it's available and it will be there, because we don't want people to be sleeping on the streets either. I don't know why it appears that there are more people on the street. I agree, but I don't know why. I don't know why young, able-bodied people -- I don't think it's the fact that they aren't still receiving the most generous welfare payments in the country.

Mr Martin: They're not receiving any.

Hon Mr Wilson: If they qualify for welfare, if --

Mr Martin: Because you changed the definition, Jim.

Hon Mr Wilson: It's a shame that able-bodied young people, 14- and 15-year-olds, are on the streets. It's more than just the welfare system; it's the breakdown of family supports and community supports, and all of us, as I'm sure you'll be the first to tell me, have the responsibility, and a lot of that doesn't take money from government. It takes working in our communities and understanding among people. The charitable organizations are there and playing a greater role than ever. They're certainly rising to the challenge, as are the religious groups. As I said, these are complicated problems, and to blame them all on this government that's been in office for 9 months is, I don't think, particularly fair.

Mr Martin: I couldn't agree with you more that they are complicated problems. They are very complicated problems that, as government, you have a responsibility to work with, to deal with. But to simply walk away from them and pull money out of programs that were being helpful in front of them and to not be dealing with this in a comprehensive, thought-out sort of long-plan way in my mind is quite irresponsible.

Yes, TB is caused by various and different things and it comes from different places, but the fact is that certain social conditions produce the increase in disease. In this instance we have an outbreak in Toronto in the winter of 1996. Perhaps if it had been another government, we might have had the same thing happen, but I don't think so. I think it's more than coincidental.

You've made the most dramatic cuts in the amount of money that people get directly in their pocket, to spend on those things that determine their health -- their food, their shelter, their ability to clothe themselves, their ability to participate in the community in some of the very important recreational opportunities that contribute to good health -- at a time when you've also removed programs, support programs and the money for support programs. Now you're going to lay off 13,000 to 27,000 of the people who man those programs. To suggest for a second that somehow that's just life as usual or that's just normal for Ontario is just not true.

What you're doing is going to have a consequence, whether you like to admit it or not, and it's going to rear its ugly head. What I'm asking you -- and obviously the answer is the same one I got from the Minister of Housing and the Minister of Community and Social Services, "But we're doing everything to bring prosperity to the province, and government shouldn't be spending all this money." That just doesn't cut it.

When you start, in a province like Ontario that's one of the richest jurisdictions in the world, with the ability to provide all kinds of good programs for people -- I'm proud of those programs. I'm proud of the way we have looked after people, the way we have become civilized in the amounts of money we give to people who, for one reason or another, mostly because we don't have a full employment policy, find themselves in a situation where they have to avail of that. They end up on the street; they end up dying on the street; they end up getting tuberculosis because they have to access food banks and there's a strain going through there now because of the numbers or whatever. To suggest for a minute that there's nothing out of the ordinary is not looking at the problem straight on and being honest about it.

I'll just give you a little example of what your government is doing by way of the pressure it's putting on delivery agents to people to cause them to end up, in fact, on the streets of Toronto through no fault of their own. We have a guy in Sault Ste Marie who is trying to manage on the reduced amount of money, the $520 that he gets as a single individual. He owns his house and he pays a mortgage on it. It's a small, very modest little place that when he was working in construction over the years, when there was work in that industry, he was able to put together. He has a wood stove in there so that it doesn't cost him extra for fuel and he has a little garden in the back that he grows some vegetables in; he's doing the best that he can. But because the welfare office in Sault Ste Marie determined that he was spending more on housing costs than was being allocated for -- and at the end of the day, when you looked at his fixed costs versus his discretionary, he had only $6 left -- they were just going to cut him off; just cut him off. Nothing. "You can't live within that, so we're going to give you nothing." I had to phone the welfare office. I had to write a letter on his behalf so that he would get a cheque in March.

How many people have access to a person like myself or to a service like we offer in our constituency office? How many people faced with that stark response from this office, pressured by your government to cut costs, just say, "To hell with it," and move on to the street or move down to Toronto where they figure maybe they'll get a better deal and they find out that they're not?

That's what's causing the problem, Minister. Until you come to the realization that what you're doing is too much, it's too fast and it's causing stress that the system can't bear and begin to do otherwise, my question to you is, at what point do you go to the cabinet table and talk to your colleagues about backing away from the tax break? You can't afford to take that much money out of the system that quickly.

Hon Mr Wilson: I would say that I think when government spent less money, we had less homelessness. There are no reports that say the growth of homelessness is directly proportional to every dollar the government spends. Giving families back some money might help to keep them together. One of the number one pressures on families and divorce is financial pressure. I could spend hours probably giving you as many arguments as you'll give me, contrary to your belief.

In my 13 years of public life and six years as a constituency --

Mrs Caplan: Nobody thinks that is healthy public policy, and that is upsetting to hear from the Minister of Health.

Hon Mr Wilson: Everyone thinks that's public health policy.

The Chair: Let the minister complete.

Mrs Caplan: It runs contrary to all the determinants of health, what you just said.

Hon Mr Wilson: When government spent less money --

The Chair: We're running over time, so let the minister complete his --

Hon Mr Wilson: The best determinant of health is a job and the dignity of work. Of the five determinants of health, that is number one.

Mrs Caplan: And you're laying people off and you're cutting jobs.

Hon Mr Wilson: We are going to create jobs by putting money back in consumers' pockets and get this economy going again.

Mrs Caplan: Nobody believes that. Every economist says you're wrong.

Hon Mr Wilson: You tell me trickle-down economics works. Trickle-down economics doesn't work when you do a Jobs Ontario program where 40% of the dollar we take from the taxpayers is eaten up in overhead and --

Mrs Caplan: It didn't work for Ronald Reagan and it's not going to work for you.

The Chair: Let's take a 10-minute break.

Hon Mr Wilson: -- nothing gets down to the front-line services. We're cutting out the middle man and beefing up front-line services. That's what we're doing. You're wrong, Mrs Caplan.

The Chair: A 10-minute break.

The committee recessed from 1054 to 1106.

The Chair: The Conservatives will continue. Just in watching the clock, their time will be 11:15.

Mr Preston: Mr Carr has a question and then I have a question, please.

Mr Carr: I'll be real quick then, in light of the time.

Thank you, Minister, for being here. As usual in these processes, I learn a great deal of what's happening. Thank you for the time. Coming from the GTA, as you know, I have a question on the funding that may be available, the $25 million, for some of the high-growth areas with some of the pressures on there. What some of the hospitals in my area are asking about is, how will that money be allotted, what is the formula and the process, and I think more than anything else, when can they expect that? Because as you know, they're going through the process now. Particularly with some of the unionized hospitals, if there are to be any layoffs, they need layoff provisions and so on. Essentially what they're saying is, "Regardless of what it is, we need to know as early as possible." I was wondering if you could inform us of what the time frame will be, when the hospitals could expect a word on that particular program.

Hon Mr Wilson: It's a very good question, Mr Carr. I can inform you that the joint policy and planning committee, which is a joint committee of the Ministry of Health and the Ontario Hospital Association, met recently with the 905 or GTA hospital representatives, representatives of growth areas, because there are other areas of the province also indicating that they would like an opportunity to make a case for part of the $25 million. We expect by the end of the month that they'll be able to inform hospitals that truly have growth.

One of the things I said recently when I was up in York was, "You may have had a lot of new subdivisions pop up in town, but do the people there actually get the services at that hospital?" In fact, during the meeting, where they had been arguing for a new per capita funding, the administrator actually answered his own question when he informed me that he had met with my hospital administrator in Alliston the week before to complain that anyone living five minutes of Alliston goes to Newmarket. I said: "Well, then, you've answered your own question. Stop telling our MPPs that capital funding is the way to go, because if I then were to give all the Simcoe West money to the Alliston hospital, they'd be filthy rich and not have the patients, because the patients continue to go to Newmarket."

If you have a heart attack and you're in Tottenham, you do not drive for some reason -- it's a cultural thing as much as anything. You go south along Highway 9 over to Newmarket, always do. One of my assistants was with me. We got in the car later and he said: "Yes, that's exactly it. My father had a heart attack two months ago. They live in the Tottenham area and they didn't go to the closest hospital. They drove over to Newmarket, because that's where they shop, that's where they do a lot of things."

So per capita funding has never really been part of it, but I know you understand, because you've brought this to my attention before, that the new funding formulas and the growth formula are to recognize where patients actually go for their services, so patient volume is where the money is to be targeted. Hopefully by the end of March the hospital association and the ministry will have worked out how people qualify and how much they'll qualify for in the $25 million fund.

Mr Carr: Thank you very much, Minister. I'll turn it over to my colleague.

Mr Preston: There's something that I have to clear up. I've cleared it up once before. Mr Martin continues to say that every time I ask the question, I get the same answer. Well, it's the same question. Members opposite have blamed the Housing minister for three deaths on the street. They have blamed the Social Services ministry for the deaths on the street. They have blamed you for the deaths on the street. These deaths, as hard as it may sound, are because people are choosing to be there. At the time these people died on the street, there were hundreds of empty beds in fire stations that had made beds available, in hospitals, in hostels. The beds were available. These people chose to be where they were. They made a mistake due to illness, due to mental illness, but they made a mistake, they made a miscalculation. It is not the fault of this government that they made that miscalculation. I would suggest they probably have had this mental illness for five years, 10 years. Who's to blame for that?

The other part of the equation is, when we do something immediately something comes up, it's our fault. TB has been around for many, many decades. In the 1940s it was really a problem in this country, especially in this province. The main sanitorium was in my home town, Hamilton.

Mr Martin: What are you going to say when it's starvation?

Mr Preston: The starvation of people on the street is because of situations that have developed over a number of years. Those people did not become indigent on June 8. TB did not start on June 8 of last year. I've got a wart on my knee, it's been there for 10 years, but if I get it removed tomorrow, am I going to blame this government because I have it?

Mr Martin: Yes.

Mr Preston: Am I? No, no.

Hon Mr Wilson: It depends, Mr Preston, what side of the House you're on.

Mr Preston: Yes, that's correct. The problems that we're seeing, the problems that are coming up today have been around for years. We are trying to cure them, and that is a first.

Hon Mr Wilson: Could I respond? Again, there are many ministries working on the problem of homelessness. It is complicated. Your remarks are part of the thoughts that many people have as to the theory why people are homeless. Just going back to schizophrenia and homeless people who may suffer from that, I remind people that we continue to provide Clozapine and Clozaril. Schizophrenia drugs are distributed by psych hospitals free of charge to patients. Those programs are all still there. Tuberculosis drugs are provided through ministry funding to public health units, free of charge to patients. So those are available, and as the deputy explained, steps are being taken now to make sure they take their drugs -- there are three different drugs that have to be taken in combination -- to get the people out there to help people, to ensure they take the drugs.

You're right, these problems are not easily solved, but to say that people are starving in Ontario must mean they're starving twice as bad in other provinces where the welfare cheques are half as much. We're not hearing that sort of irresponsible talk. Our welfare payments and cheques each month are still 10% above the national average. People are not starving because of the cuts in welfare; people are finding jobs because of the cuts in welfare. We're enabling the government to pay its bills for long-term prosperity. It's irresponsible to go around saying people are starving.

Mr Martin: No wonder we're in difficulty when you as the Minister of Health actually think like that. It shouldn't surprise anybody that we're in difficulty as a province.

Mr Preston: Mr Martin, I'm getting a response to my question.

The Chair: Oh, I thought he had completed it. Mr Rollins has a question now.

Mr Rollins: I've just got one little thing to read into the record today. I didn't realize -- and I imagine many of you other people haven't -- that today is International Women's Day. I just want to make sure this committee realizes that today.

The Chair: I think the Minister of Health has noted that.

Mr Rollins: He probably already did, but I wasn't sure that you did.

The Chair: Okay, I have also noted that, now that you have commented on it.

Hon Mr Wilson: Does Mrs Ross have a question?

The Chair: Your time is up. I'll give you one quick question, though.

Mrs Lillian Ross (Hamilton West): Just for the record and just to clarify what's happening in my community with the health action task force and its report, it's waiting for public input and then it goes to the district health council. The district health council has responsibility to bring a report to the ministry, but it doesn't necessarily have to bring exactly what's in the task force report. Am I correct in that they can revise it?

Hon Mr Wilson: Yes. In your community it's at the community input stage now, and based on what they hear from the community, they are free to revise the report, keeping in mind that the health services restructuring study or the hospital restructuring study is essentially a subcommittee of the district health council, so the final report and recommendations that the ministry considers are the district health council's recommendations.

Mrs Ross: Yes, I understand that. Great. Thank you.

Mrs Caplan: Just to give Mrs Ross some additional information, the district health councils are advisory only to the minister. He must accept or reject all or part of their recommendations or report. They have no authority to do anything other than give the minister what they believe. Over the course of history ministers have both accepted and rejected recommendations from district health councils if they thought they were not in the community's interest. The minister does have the opportunity and it is the minister's call as to whether or not recommendations from the district health councils are accepted. That's his responsibility.

Hon Mr Wilson: That's the way it was a few years ago, but the Health Services Restructuring Commission will now make those decisions.

Mrs Caplan: There's no legislative authority whatever for district health councils.

Hon Mr Wilson: Well, Elinor, you're not the Minister of Health any more. The Minister of Health can explain the new process.

Mrs Caplan: Where is the legislation that gives the district health councils --

Hon Mr Wilson: Bill 26. You're the one who harped at it for weeks.

Mrs Caplan: That doesn't even mention DHCs. It was clear in Bill 26 that you said they would remain advisory to the minister. I'm talking DHCs.

Hon Mr Wilson: Bill 173 is still intact and it provides for the process that we have in terms of --

Mrs Caplan: Bill 173 is long-term care. That's not hospital restructuring.

Hon Mr Wilson: The last chapter was district health councils. Both you and I argued that it shouldn't be in there, but it's in there.

Mrs Caplan: It's not a legislative mandate. The minister still has to make the decision; he can't get out of it.

Long-term care is what I'd like to do some questioning on. I'm glad you mentioned Bill 173 because it's a good segue. Again, for the record, I support long-term-care reform. I began the process of recognizing that what was out there was a patchwork quilt where you had a lot of assessment going on that I felt was duplication. I also did not support, our caucus did not support Bill 173. We felt that the NDP model which required a multiservice agency to deliver all services was not the way to go. We felt that would end up providing fewer services at higher cost.

For the record, we'd like some clarification about the announcement you've made. You've used words like "flexibility." I think communities across the province would like some assurance that you're not going to impose one model -- "cookie-cutter" is the word that you used earlier -- and that it's not going to be a one-size-fits-all approach. Would you like to take this opportunity to assure us that the government is going to establish standards, that using the regulatory powers of Bill 173, you can do that to ensure that there are standards in regulation?

The second question on long-term care has to do with the process for the development of those regulations. Will there be consultation and discussion prior to that? Are you planning to amend Bill 173 or just not enforce certain parts of it? Are you going to have a brokerage model only? These terms are understood only by people in the long-term-care field, but there are different models that have been discussed. The federated model was one; the brokerage model, contract and partnership models as well. Our view has always been that communities should be able to have the model they believe will work best for their community.

I have no difficulty, by the way, Minister, with your 43 boundaries, the 43 --

Hon Mr Wilson: Community care access centres.

Mrs Caplan: Call them what you want. We called them single access organizations. You call them community care access centres. I don't have any problem with that. What's of concern to us is that people will get the care they need when they need it, that those services will be available in the community. Particularly as you move in hospital restructuring, it is going to be essential that those services are in place before there are cuts in hospital services or reductions in hospital services. We believe it's important that people get those services where they can be delivered and can be accessed easily and appropriately. We have never said that everything should be delivered in a hospital and have always said that they can be delivered in the community, but that has to be put in place. That's one of the concerns we have with your cuts to hospital budgets, that they may not be in place because your model for long-term care is not in place. I'd like you to discuss, if you will, what model. Are you going to allow community flexibility, will the standards be in place and are you going to do that by regulation following consultation?

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Hon Mr Wilson: To the latter part of your question, we're currently working with all of the groups to develop the standards to continue the work that was started by the previous government on a common assessment tool. That's pretty well done. There is regulatory authority to do what's required to ensure that we can move to accreditation of the services.

It's a good-news announcement that was well received, I think you'd acknowledge. It certainly made sure that the VON and the Red Cross and St Elizabeth Visiting Nurses' Association and the private sector agencies could continue to deliver services in the province. We did take 74 placement coordination services and home care programs. We know we'll see some savings in administration because we're now down to 43 community care access centres. They will be governed by local boards.

Mrs Caplan: Could you tell me how those local boards and how that governance are going to work?

Hon Mr Wilson: Yes. The first boards will be appointed by the ministry. It'll be like a public hospital board. As soon as that board acquires enough membership -- and it'll be up to them in local communities to decide whether it's going to be a free membership, as some hospital boards have, or the $5 membership, or some sort of signal anyway that you've actually joined that non-profit corporation, as we do with hospital boards now. Then the members of the corporation will vote for their board membership, as they do in hospitals. But in order to get started, the first boards will be appointed by the government.

Mrs Caplan: In your original appointments will you give us a guarantee that those boards will reflect the communities they're serving?

Hon Mr Wilson: Yes. They have to reflect the community and they are not to have anyone on those boards who may be in a conflict of interest with respect to service delivery. So it'll be primarily consumers.

Mrs Caplan: So no employee of the --

Hon Mr Wilson: Of one of the provider agencies.

Mrs Caplan: That's important to be clear. I support that, by the way.

Hon Mr Wilson: An employee of the provider agency cannot run for a position on the board of the community care access centre because --

Mrs Caplan: Will you ensure that there's multicultural representation?

Hon Mr Wilson: Yes. Again, though, we don't want a cookie-cutter approach. I hope the suggestions for the first few boards will come from municipalities and non-profit groups and for-profit groups.

Mrs Caplan: Have you asked them to think about making those kinds of recommendations?

Hon Mr Wilson: The DHCs have been doing exactly that and we'll see some recommendations come forward.

Mrs Caplan: How soon do we expect to see those boards put in place?

Hon Mr Wilson: The first boards are to be up and running by October of this year and by this time next year all 43 boards are to be in place.

Mrs Caplan: Now what about the model?

Hon Mr Wilson: The model is fairly simple, in terms that the local board has the authority to purchase services from the providers at highest quality, best price.

Mrs Caplan: Is that the only model that the board's permitted to engage in?

Hon Mr Wilson: Yes.

Mrs Caplan: Because that's a brokerage model.

Hon Mr Wilson: It is a brokerage system.

Mrs Caplan: So it's a one-size-fits-all brokerage. If a community decides they want something else, they can't do it?

Hon Mr Wilson: No, no. The flavour of the community is what services they purchase and who they purchase them from, not the board. Yes, there are going to be consistent standards for boards in terms of, "Make sure you reflect the community, Make sure you don't have people with conflict of interest on it," and that sort of thing. But purchasing and providing services for their community is what we're more concerned about, and that will be decided by the boards, what's needed for that community.

Mrs Caplan: I think long-term care is probably the best example of how all of us around the table can agree on reform and not agree on how you go about implementing it and doing it. I just want to make the pitch to you that I think it's in the interests of the community within the concept of an envelope for long-term care, within the concept of 43 community -- what are you calling them now?

Hon Mr Wilson: Community care access centres.

Mrs Caplan: That you allow the community to --

Hon Mr Wilson: And they're not the same as your single-point access centres and they're not the same as your MSAs.

Mrs Caplan: -- have the flexibility -- these are your own words.

Hon Mr Wilson: We didn't just reinvent the wheel here; we really reinvented the wheel.

Mrs Caplan: That's the concern the communities have, is that you've reinvented the wheel --

Hon Mr Wilson: They love it, Elinor. We got a very positive response.

Mrs Caplan: But that you allow some flexibility for communities to say that they would decide whether it's a brokerage model or a federated model or another model, and maybe in some communities they want to opt for the model of the --

Hon Mr Wilson: The federated model is not on, because the federated model that we had discussed when I was in opposition and that I've since changed my mind about would have had providers deciding what providers. I guess that didn't get us any further ahead than some of our home care programs now where we're told there's conflict of interest. We wanted to remove any conflict of interest.

Mrs Caplan: I think you can remove conflict of interest and still have federated models. I think that those kinds of conflict rules can be clearly identified.

Hon Mr Wilson: But you know all those provider groups where we did extensive consultations and true consultations, and this does reflect much of the consensus that we heard. Helen Johns, the parliamentary assistant and MPP for Huron, did an excellent job of having numerous meetings with all of the groups, providers and consumers, that had expressed an interest, so that's where the model evolved from.

Mrs Caplan: I want to tell you that I support long-term-care reform. I think your announcement was greeted positively because people want to see you get on with this. It's important that it be done, particularly in the context of hospital restructuring. But do not assume that that support is for a cookie-cutter approach. It is not. Communities would like some flexibility to be able to do what's going to work in their community and not have it mandated by Queen's Park and the Ministry of Health. They'd like some flexibility. They'd like you to consider that. They believe that it is possible.

Hon Mr Wilson: It's not only to consider that; that is the policy.

Mrs Caplan: So what you're saying is, there's no flexibility; that's the policy. It's a brokerage model.

Hon Mr Wilson: Excuse me.

Mrs Caplan: Under your brokerage model --

Hon Mr Wilson: Excuse me. Sorry. I just said that is the policy: flexibility, local community.

Mrs Caplan: So that it doesn't have to be a brokerage model. If they come to you and say, "We think something else is better for our community -- "

Hon Mr Wilson: A federated model's not on the table because of conflict of interest, and we have agreement.

Mrs Caplan: But another model or option that they want to come forward where they could resolve the conflict issues, are you prepared to consider that?

Hon Mr Wilson: Sure. I'm willing to consider it.

Mrs Caplan: Good.

Hon Mr Wilson: The essential thing is, boards will purchase services.

Mrs Caplan: And they want that.

Hon Mr Wilson: People will deliver services. This isn't any more complicated than that, Elinor.

Mrs Caplan: I understand. I'm just expressing to you some of the concerns that have been expressed to me and the concern that you have not been open to consider other models. If they came to you with something that met your criteria --

Hon Mr Wilson: We spent four months of locking ourselves in a room with all the providers and consumers and saying, "Let's come up with a consensus."

Mrs Caplan: I hear what you're saying. I'm telling you what I'm hearing, and the fact that you have said clearly on the record that you would consider a proposal from a community I think is positive, so let's not fight about it.

The point that I would like to make is, you referred to VON and the Red Cross and some of the other not-for-profit organizations that have a huge volunteer component and following and support, and I've been very supportive of their role. They were threatened by the previous NDP model, I believe and you believed at the time, but frankly I think they're threatened under your model as well. When you create what you call a level playing field, and you know that those organizations have higher wage rates, my question to you is, how are they going to be able to compete? Where will the balance be to ensure that those organizations which, through no fault of their own through collective bargaining, have ended up with higher wage rates -- how are you going to ensure the survival of those organizations, which you and I agree are important in the delivery of long-term-care services?

I agree that the 80-20 rule was inappropriate and wrong, but I have to tell you, I think you are threatening important services and organizations in communities by insisting that the only criterion be the level playing field.

Hon Mr Wilson: We worked very closely with Gail Murray and the VON and the Red Cross and their representatives. There is a transition period. We will continue to subsidize those organizations at the higher rate at least for the next couple of years until they can get their wage settlements down.

But, yes, we are not threatening them, we are challenging them. Gail Murray said at a Mike Harris policy forum on health care in Ottawa on December 5, 1994, that the VON can compete with the best of them. A lot of their discrepancy in wages -- I shouldn't say a lot; some of it -- has to do with government policy, so it's not the VON's fault. It's pay equity and other things that put them out of whack. But in the name of the taxpayers, when you have other people -- and there are some 1,200 agencies out there. Many of them say, "You set the quality standards," which we've done. "You set the performance standards," which are being developed. Before services are purchased, before tenders are put out or a request for a proposal is put out by the community care access centres, all of that will be in place by October. "We can compete and deliver the same service with the same high quality," and it's outcomes, I think, we all agree on.

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The fact of the matter is, the VON has indicated to me very clearly they're prepared to meet that challenge provided there's a transition period, and so we've agreed to a transition period of up to a couple of years. They may need a little bit longer than that in some areas. In some areas they're ready to go now. In some areas they're the only game in town and they're serving remote areas, other areas that the private sector wasn't interested in because they couldn't compete as well, and I'm sure they'll do very, very well. I was even told in some areas they may be the only one that applies for the tender.

Mrs Caplan: It's the view of our caucus that long-term care will be best served if you have a vibrant not-for-profit sector, with all of the richness and volunteer base that they bring, and a vibrant private sector. They tend to challenge each other. What we're concerned about, as you go through your transition, is that you not penalize the women -- primarily women -- who are working in the not-for-profit sector with job loss in your desire to drive wage rates down, because that's the fear that we have when you talk about you're only going to subsidize for a couple of years.

Hon Mr Wilson: That's a very unfair characterization of what we're doing, Elinor, and we're not --

Mrs Caplan: I thought you just said that.

Hon Mr Wilson: You can't say that you want vibrant not-for-profit and private sectors --

Mrs Caplan: You just said that.

Hon Mr Wilson: -- so they can challenge each other and then not have some competition, and competition means some will win the tenders, some will lose the tenders. That's life.

Mrs Caplan: I just want to go on the record very clearly as saying that I think we are well served when neither sector has a monopoly. That's been the Liberal Party's position. Whether it came to long-term-care services or child care --

Hon Mr Wilson: Competition.

Mrs Caplan: -- we believe that both of those sectors bring --

Hon Mr Wilson: But you can't guarantee and I can't guarantee there won't be job displacement.

Mrs Caplan: -- a vibrant and a different approach to service delivery, and your role is to make sure that the quality standards are there.

Hon Mr Wilson: But in the same breath -- and again I keep challenging you on your sentences.

Mrs Caplan: I am very concerned --

Hon Mr Wilson: In the same breath you can't say that --

Mrs Caplan: -- that you not bring in policies --

The Chair: One at a time, please.

Mrs Caplan: -- that are going to jeopardize that important volunteer base in the community. As long as you keep that in mind. We'll be monitoring and watching to see what the impact is.

The Chair: Thank you very much. Mr Martin now. You have the opportunity of wrapping up. This will be the last presentation before we have the votes.

Mr Preston: The anchorman.

Mr Martin: I want to challenge the minister again and I want to challenge the members across the floor to really take a long look and a second look at what it is that you're doing as a government in Ontario today and the trauma and the stress that you're imposing on the communities that all of us represent: the people, the jobs, the economy, the services that we've all come to depend on and rely on for our health, the health of our neighbours, both economic and social, and the future of this province for our children.

You've brought in an agenda that, yes, is based on a philosophy that we can do better with less, and I don't think anybody will disagree with that. As a government, we were struggling with that and had in fact a program. We all remember the social contract. Some of you will remember debating the expenditure control plan that we were involved in. We saw ourselves, and we presented it during the election, getting to a point of balancing the operating side of the ledger in this province by the year 1997.

Mr Carr: You weren't even close.

Mr Martin: We were close. Our numbers were certainly a lot closer than yours have been. Are you telling me, Gary, that your numbers were close? Are you telling me that you --

Mr Carr: Nine billion is close? You wrestled the deficit to the ceiling.

The Chair: One at a time. Direct your comments to the Chair.

Mr Martin: Are you telling me that any of your numbers have worked out so far in your short term? Any of your numbers?

Hon Mr Wilson: Yes.

Mr Martin: No, none of them. Absolutely none.

Hon Mr Wilson: We've got two economic statements --

Mr Martin: Absolutely none.

The Chair: Gentlemen. Order.

Mr Martin: They told us that they were going to balance the budget within two years.

Hon Mr Wilson: We changed the books so they're actually honest.

Mr Martin: Then they told us, "We might do it by the end of our term." Now we're being told, "We'll have to get a second term if you want us to really balance the budget because the numbers were a little, you know."

Mr Carr: You would have to have another century, the way you guys were sailing.

Mr Martin: "We had to bring in a whole new set of accountants and, you know, the ground is shifting and we have to do a little more here and there," and all the rest of it. We had shown, Mr Chair --

The Chair: You have been doing fine; we're on the last stretch.

Mr Carr: Sorry, Mr Chair, I think it was me. I apologize.

The Chair: Don't make my job difficult now.

Mr Martin: -- in the figures that we presented, because we separated, as we do in any household, the capital expenditure, which is long-term investment, from the operating. It's like the mortgage and the car are out there as a debt factor and we had the operating side.

Mr Carr: You had a mortgage for Rosedale with an income that was based in Oakville. You can't live in Rosedale if you don't have the money. I want to move there, but I can't afford it.

The Chair: Order, Mr Carr.

Mr Martin: We suggested that we could balance the operating side of the ledger. You know, it's funny. Whenever somebody is feeling guilty about something, their immediate reaction is to go on the defensive, and this is what's happening over here.

The Chair: I think you should direct your comments to the Chair. They won't go so much on the defense.

Mr Martin: Obviously, Mr Chair, I've touched a raw nerve over there, and hopefully they're listening to what I have to say because it's important. If you look at the indicators that we're beginning to see pop up in spite of all the good work that's been done to try and keep them down and to paint them as different or to present a different scenario than what is actually happening by this government, because they're masters at that, it's still coming to the fore and people are beginning to recognize that we have a problem and it's not going to go away.

Mr Preston: They recognized that last year.

Mr Martin: We had suggested that we could balance the operating side of the ledger before 1997. This government suggested in the election that they would balance the whole thing in two years, then in four years, and now we're into another century before they'll in fact do that. In fact, what we're finding out is --

Hon Mr Wilson: They said fully balanced budget in three years.

Mr Martin: -- that they don't have a plan that has any credibility to it. By what they say, "doing better for less," what they mean is actually trying to get as much money as they can into a pot so they can divvy it out to their friends and supporters by way of the tax break.

Mr Preston: Nobody's going to reject them.

Mr Martin: The indicators that tell us that something is wrong --

Interjection.

Mr Martin: You're obviously going on the defensive again, Mr Wilson. You've been touched by what I'm saying; it's bothering you. It's bothering you. It's touched a nerve, and I understand and respect that, but it's time somebody touched a nerve.

Hon Mr Wilson: Because for too long, for 20 years, you've been allowed in your party --

Mr Martin: Mr Chair, do I have the floor?

Hon Mr Wilson: -- to change the vocabulary of this province. We're not taking it any more, Mr Martin. Surprise, surprise, surprise.

The Chair: Mr Martin has the floor.

Hon Mr Wilson: You know, it's time people that have the historical facts spoke up in this province.

The Chair: Could I have one at a time. Please, order. Could I have some order. Mr Martin, you have another 10 minutes in which to state your case.

Mr Martin: Thank you. I hope you don't call a 10-minute recess because the minister can't contain himself.

Mr Rollins: Don't ask such hard questions.

Mrs Ross: He doesn't have a question.

Mr Martin: I do have a question.

Mrs Ross: Where is it?

Mr Martin: It's coming. You have to have a little patience.

In northern Ontario, this government has cut back on the budget to maintain highways. We've had more people die on highways in northern Ontario this year than in the --

Mrs Ross: This is the Ministry of Health, not Transportation.

Hon Mr Wilson: We're spending $23 million a year more on highways than --

The Chair: Allow Mr Martin --

Hon Mr Wilson: Because of the snowfall, Mr Martin --

Mr Martin: That's just not right.

The Chair: It is his time.

Hon Mr Wilson: We're going to end up spending more because of the heavy snowfall than you spent last year or the year before. That's a fact.

Mr Martin: Mr Chair, this is indicative of the way that this government deals with anybody who challenges its program. They try to talk you down and bully you out of your position and intimidate you. Well, I'm not going to be intimidated, Mr Wilson.

Hon Mr Wilson: Well, neither am I.

Mr Martin: I'm going to put on the record the truth of the matter.

Interjection.

The Chair: You'll have a chance to respond.

Mr Martin: I've seen it happen too much. Is the minister going to allow me or is he --

The Chair: I will allow you.

Mr Martin: Okay. We've had more deaths on the highways of northern Ontario this winter than we've had in a long, long time, and that comes back as a cost to the health care system.

Hon Mr Wilson: You're not blaming our government for deaths on the highways, Mr Martin.

Mr Martin: This government --

Hon Mr Wilson: You're not blaming our government for deaths on the highways, Mr Martin. I'm not putting up with that on behalf of the government.

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Mr Martin: This government, instead of --

Hon Mr Wilson: Where are your facts? We're spending more money on snow removal.

The Chair: I may have to extend some more time if the minister continues to interrupt the member.

Hon Mr Wilson: I don't expect my colleagues to put up with this any more either.

The Chair: Go ahead, Mr Martin.

Mr Martin: This government --

Hon Mr Wilson: Death is rather a serious matter. You're accusing us of more deaths on highways, Mr Martin. Where are your facts?

Mr Martin: Yes, I am.

Hon Mr Wilson: Well, you better back that up, because if this wasn't Parliament, you'd have to back that up.

Mr Martin: This government, instead of dealing with the fact of more deaths on the highway this winter than there have been in a long time, caused by the cutback in the maintenance budget of highways in northern Ontario, decides in its wisdom to just close the highways down. Whenever there's a major snowstorm in the north, where in previous years we'd bring out more plows and more personnel, this government now closes highways.

Mr Preston: On a point of order, Mr Chairman: Continuously we've been told in the other budget meetings that the airplanes have to be in the airports because the roads are continuously being closed down.

The Chair: That is not a point of order. Don't make my job difficult.

Mr Martin: So they closed down highways. Anybody who lives or does business or travels in northern Ontario knows there's a serious problem, that we have a problem here that we've never met before.

Hon Mr Wilson: It's called a very heavy snowfall this year, record snowfalls. The police closed highways.

Mr Martin: And it's coincidental that it's happening at the same time as we have this new government in place that has decided to suck money by the bagload out of the public expenditure of this province so they can give it to their wealthy friends and supporters by way of a tax break.

We've had three people on the streets of Toronto -- because we have more people on the streets of Toronto sleeping on sidewalks and grates and park benches than we've ever had in the history of the province before -- freeze to death.

Mr Preston: We have more beds than we've ever had before in history.

Mr Martin: Freeze to death, Mr Preston. Does that impress you?

Mr Preston: We have more beds than ever before in history.

Mr Martin: It's coincidental that we have a Conservative government in this province that is sucking money by the bagload out of the programs and services that supported these people in previous years. We now have indications that we're on the verge of a TB crisis in the province.

Mrs Ross: There isn't any crisis.

Mr Martin: Granted, some work's been done now to try to mitigate that, but we have the problem. We've detected that in the soup kitchens and in the hostels and in the food banks of the province. On the streets of Toronto, the biggest city in the richest province in the country, we now have TB.

Mr Preston: We've had it all along.

Mr Martin: The question I have -- and this is my last question. I'm not going to make any more comments today, because I think this says it all. The question I have is to the minister and to his colleagues across the way: Tell me what it is that has to happen in this province for you to go to the cabinet table and go eyeball to eyeball with Mr Eves and Mr Harris and say: "Listen, we made a mistake. Let's back off the tax break here and let's -- "

Mr Carr: How about, "We don't believe there is a mistake"?

The Chair: Order, Mr Carr.

Mr Martin: I'm asking you, Gary, what it is that has to happen? What is the indicator?

Mr Carr: Nothing. That's what's going to create the prosperity, the hope and the opportunity that you destroyed by taxing and spending, not only this generation but my kids, and we're not going to put up with it any more.

Mr Martin: More people will die, disease will become rampant and people will sleep on the streets of the richest city in the whole country. All of those things will happen and continue to happen, and more, and none of them will make an impact on you re your agenda, which is to take money out of the system and give it back to the rich of this province so that they might in turn --

Mr Carr: And let them spend it in the way they want rather than have the government spend it for them.

Mr Martin: Invest it --

The Chair: Are you completing your question?

Mr Martin: No, I'm not -- invest it in Bermuda and Barbados and buy another yacht and go for another vacation to Florida.

Hon Mr Wilson: That was the GO Transit deal with your government.

Mr Martin: The question I have, Mr Chair, is very simple. What is it going to take? What is the indicator that will tell this minister and his colleagues here, after having listened to me, that you're making a mistake, you're hurting communities, you're hurting people, you're hurting the province in a way that is absolutely irretrievable?

Hon Mr Wilson: Mr Martin, 80% of the tax cut goes to the middle- and low-income people in this province. That is good news for families, it is good news for our society and it reverses the trend of taxing people to death in this province.

Mr Cordiano: That's a false statement.

Mr Martin: It's not what the numbers are saying, Mr Wilson.

Mr Cordiano: That's a false statement. Correct the record.

Hon Mr Wilson: That's exactly what the numbers are.

Mr Martin: It's not what the economists are saying.

Hon Mr Wilson: If you take the tax cut --

The Chair: One at a time, please.

Hon Mr Wilson: In earned incomes below $50,000, 80% of the tax cut goes to those people with earned incomes below $50,000. You selectively leave out --

Mr Cordiano: You actually believe this stuff?

The Chair: Order, Mr Cordiano.

Mr Carr: The bulk are the middle class.

The Chair: Could we have the minister?

Hon Mr Wilson: You're selectively leaving out page 2 of the Common Sense Revolution which talks about the fair share health care levy that makes sure the tax cut is targeted primarily to people below $50,000 a year. If you want to continue to talk in isolation, as you do with operating and capital budgets -- nobody else in the world does their budgeting that way any more. It was a trend for a little while in accounting, but it's certainly been dismissed by the auditor of this province.

Mr Cordiano: Why would you give something and then take it away?

The Chair: Mr Cordiano, let the minister complete his response.

Hon Mr Wilson: It is a fact, and we'll see it clearly as it's spelled out --

Mr Cordiano: You're giving it and then you're taking it back.

Hon Mr Wilson: Spending and taxing ourselves rich, Mr Cordiano, didn't seem to work very well.

Mr Cordiano: It's an in and out routine, and I think it's very inefficient.

Hon Mr Wilson: No, we're not going to tax them in the first place. People will actually see a small reduction -- you're overblowing the size of it all too -- in their personal income --

Mr Cordiano: You're talking about having imposed tax, when you're cutting taxes on the one hand --

The Chair: Hansard is not picking up anything that you folks are saying because you're all talking at the same time. I'd have the minister just complete his point.

Hon Mr Wilson: I'd emphasize to you that 80% of the tax cut goes to people with incomes of $50,000 and less. Those are the people who are targeted by it. It will be the first true middle-class tax cut in the history of this province and it will create jobs and stimulate the economy.

Mr Cordiano: And it won't work. You'll be chasing the deficit.

The Chair: Mr Martin, would you like to have your last comment?

Hon Mr Wilson: The proof of that is you gave a tax holiday -- if you look at Mr Laughren's last full budget, he gave a tax holiday on the employer health tax. His own figures show that that created four or five times more jobs than the Jobs Ontario spending because of the overhead that's eaten up by government before the Jobs Ontario money got to the front lines.

Mr Cordiano: What are you talking about?

Hon Mr Wilson: So go back and read your own document. Even Mr Laughren acknowledged that giving money back is a more direct way. By cutting out the middleman -- government -- and simply giving people money back, ensuring they have the money in their pockets at the source every two weeks when they get their cheque is a far more effective way than funnelling it through this big, inefficient bureaucracy and then trying to trickle something down to them. That's all we're doing.

Mr Martin: It's obvious, Mr Chair, that this minister and his colleagues here are not at this particular point in time willing to listen to the truth that is unfolding in Ontario today and not willing to recognize the myth of the Common Sense Revolution.

Mr Carr: That's exactly what we said in the election, Tony, exactly what we promised.

Mr Martin: They continue to promulgate the untruths contained therein.

Mr Carr: People voted for it, my friend.

Mr Martin: So I would suggest that my colleague Mr Cordiano and I would see it as probably a waste of our time to sit here and ask any more questions because all we get from the minister and from his colleagues is the mantra, the tale that is told over and over again that some of the ministers have now memorized and do a little bit better than others. I suppose that's what we're to expect for this time. But I warn you, Minister, and your colleagues, this is going to catch up with you. It's already beginning to show its head, the consequence is beginning to show its head. You're wrecking the province.

Hon Mr Wilson: It's already showing dividends.

Mr Martin: You're destroying the province.

Mr Carr: It's your record and you're warning us what to do. You destroyed the province.

Mr Martin: No, you're wrecking the province.

The Chair: One at a time. Mr Martin.

Mr Martin: Mr Chair, the province was doing quite well, thank you very much; 1994 was one of the best years for investment in the history of this province. People were beginning to spend again --

Mr Carr: We couldn't stand the prosperity, Tony.

The Chair: Mr Carr, just allow Mr Martin.

Mr Martin: They were feeling confident and secure about their future, which any economist will tell you is absolutely essential for any resurgence or growth in the economy. Consumers have to be spending. It's not happening now and it's going to happen even less as the agenda of your government unfolds.

Mr Carr: You were tossed out because of your record, Tony. The electorate tossed you out.

Mr Martin: I would suggest to the minister that he might want to think, in the quiet of an hour or two at home before he goes to bed and he thinks about his past --

Mr Cordiano: Pray every night.

Mr Martin: -- and the people who he represents and his constituents who are being hurt and the debts that we've seen in this province over the last number of months --

Mr Preston: I'm sorry, Mr Chair, but I'm not going to listen continuously to --

The Chair: It won't have to be continuous. Just about a minute.

Mr Martin: -- and the disease that's beginning to --

Mr Preston: As long as he's going to talk about the deaths in this province caused by this government, I will continue to interrupt him until his time is finished because --

The Chair: Which you are out of order to do.

Mr Preston: I realize I'm out of order, but I am not going to listen to him blame this government for deaths that are not a part of this government.

The Chair: Mr Preston, shall Mr Martin conclude?

Mr Martin: The disease that is beginning to rear its ugly head and is beginning to grab our neighbours and friends and to create even more problems for the health care system that is being cut to the bone, that was already dealing with a downsizing, that is now having to deal with more -- and no more obviously than in my own community where two hospitals came together and amalgamated and are now doing things in a way that they never have before and now have to absorb another $3 million cut and another $4 million next year.

It just doesn't add up, it doesn't make any sense, and sooner or later you're going to have to come to some understanding of the reality that's in front of us and go to your colleagues at the cabinet table and say, "The tax break is and was a huge mistake."

The Chair: Thank you very much, Mr Martin. We have come now to the conclusion, an exciting time of the estimates for the Ministry of Health. I would move into the phase where I shall ask, shall votes 1501 to 1505, inclusive, carry? Carried.

I also have to ask for a supplementary estimate. Shall the supplementary estimate of 1502, item 7, carry? Carried.

Shall I then report the estimates and the supplementary estimates of the Ministry of Health to the House? Agreed.

Mr Minister, I want to thank you for appearing before the estimates committee. Before we go, I just want to tell you when we shall resume and to thank the deputy and the staff for their support and their response. Of course, I will not thank the committee yet. They have more work to do at 1:30 when we resume our committee hearings for the Ministry of Economic Development and Trade, if that's the right title. We'll start at 1:30.

The committee recessed from 1152 to 1334.

MINISTRY OF ECONOMIC DEVELOPMENT AND TRADE

The Chair: I call to order the standing committee on estimates. We are reviewing what used to be called the ministry of Economic Development and Trade. Welcome, Minister. It's good to see your wonderful people here too. I think it's 10.5 hours for you, which would take us until somewhere around midnight tonight, but we shall deem it at 6 o'clock.

Minister, you have 30 minutes for an opening statement, then the respective opposition parties also have 30 minutes each for their responses. You may begin.

Hon William Saunderson (Minister of Economic Development, Trade and Tourism): Thank you very much, Mr Chairman. I greatly appreciate the opportunity to come before the standing committee on estimates to address members on priorities within my ministry and to respond to your questions.

I would like to introduce some of the staff who have joined me here this afternoon. They include my deputy, Judith Wolfson; assistant deputy ministers Brian Wood, Peter Sadlier-Brown, Peter Friedman and Jan Ruby; Sandra McInnis, vice-president of the Ontario International Trade Corp; my special assistant of policy, Charis Kelso; and special legislative assistant Ian Bacque. I will be calling on them from time to time to provide details to some of your inquiries, if necessary. They bring to the job a deep understanding of the issues impacting on economic development in our province. Their representation here today also demonstrates the significant scope and important responsibilities residing within what is now the Ministry of Economic Development, Trade and Tourism, a wide range of matters dealing with such issues as trade policy, international relations, telecommunications, investment marketing, science and technology, sector development, entrepreneurship and small business development, and of course the important area of tourism, Ontario's fourth-largest export industry.

Additionally, the ministry oversees the operations of more than 20 agencies, commissions and corporations, involving such diverse and important economic considerations as aerospace, research and development, industrial parks, tourism attractions, casinos and historic sites.

My ministry plays the lead role in economic development within our province and is responsible for coordinating economic development activities of other ministries. It has also assumed the responsibility for corporate relationships and marketing of Ontario to the international business community. So there's much to discuss.

I think, though, it is worth noting that many of us here today are going through the estimates process for the very first time. That's an exciting and challenging position to be in, and it's somewhat ironic since I find myself charged with the responsibility of "defending" -- if that's the proper expression -- the estimates of my predecessor.

In light of this unique assignment, I thought there might be value in reflecting upon the changing role of government in Ontario in recent years and indeed throughout the democratic world, particularly as it applies to economic development and how it impacts on the work of my ministry.

The post-war years of unbridled growth have clearly come to an abrupt end. Government revenues that supported our astonishing development in Ontario through the 1950s, 1960s, 1970s and 1980s -- the construction of schools, universities, hospitals, highways, transportation systems, energy networks, infrastructure of all kinds -- long ago fell behind demands.

By the 1980s, government was trying to be all things for all people. Government grew and continued to grow. Government became large and extremely expensive. It could not be sustained. We are now faced with the difficult challenge of getting our fiscal house in order. We simply cannot afford to spend our way to prosperity. As late as last summer, we continued on a downhill course and, as an old Chinese proverb has warned, the trouble with not changing direction is that you usually end up where you are headed.

We have come slowly to this realization. The awakening occurred in recent years as our public deficits and accumulated debt spiralled into the billions. Across this continent, across Europe and beyond, governments are being redefined. They are being scaled down. They are being made more efficient and less intrusive.

This changing role of government has been the subject of much observation and analysis in recent months and years. And nowhere has the change been more evident and dramatic than in Ontario, where nine months ago to this day the people of Ontario voted in favour of the program outlined by Mike Harris in the Common Sense Revolution.

In a nutshell, the people of Ontario opted for a much less intrusive, less costly and more efficient government, one which could get the economy working again and reopen the province for business and jobs growth.

As I studied the estimates of my predecessor, they crystallized and reinforced my view of how not to govern Ontario. The former government might well have been well-meaning in the programs and services it developed and implemented, but I think the record shows that it was sorely wrongheaded and misdirected.

You find within the estimates of what was then the Ministry of Economic Development and Trade factors which contributed to our current economic distress. Simply put, we had mortgaged our present and placed our future in jeopardy.

I need not remind the members that we now face an accumulated debt approaching $100 billion and an annual deficit of in the range of $9 billion. As Finance minister Ernie Eves has told us, we are spending $1 million an hour more than we are taking in in revenues.

How did we get to this point? Well, we got here because previous governments considered the public purse to be bottomless and adopted bureaucratic solutions to economic challenges. They believed that government could create jobs and consequently used vast sums of public dollars to buy those positions. Market forces were of little consequence as they pumped public money into individual firms or doled out selective, unfair subsidies, which created dependencies and propped up unviable companies. They provided services at public expense, best delivered by the private sector. They were, in effect, displacing private sector job-creating activities.

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Perhaps the best example of this was the ongoing effort to sustain at public expense the operation of Ontario Bus Industries. Over a period of two years or more, the previous government transferred public cash and assumed liabilities in the amount of $117.6 million.

You are aware that we looked at the deal and recently released the findings of the accounting firm of KPMG. Upon much review and reflection, we have concluded that honouring Ontario's obligations under the original agreements was the least costly alternative at this stage. Consequently, we find ourselves continuing to hold a minority interest in the bus-building business.

As a relative newcomer to active politics, I must confess I have difficulty rationalizing what government is doing building buses. We would not have made the deals surrounding OBI. But now they have been made, we are determined to work closely with our partners to protect the public's investment and reduce the ultimate cost to the taxpayer.

There are many other examples where the previous government indiscriminately used public funds under the guise of economic development only to distort markets and give some firms unfair advantage over others.

I can't let the Jobs Ontario Community Action program go by without comment. Again, well meant -- wrongheaded and misdirected. Indeed, intended to be used as a lever for community economic development, JOCA not infrequently provided only short-term jobs on fixed projects and was so poorly administered that we will probably never have a full accounting of how public funds were spent and how many jobs were created in the process. But to coin an overused but appropriate phrase, that was then and this is now.

We have changed the role of government in Ontario far and away from that which we inherited back in June of last year. We have changed our downhill economic course and we are on target to balance the provincial budget within the life of this Parliament.

Some in fact have criticized us for moving too far too fast. I would say to those critics that swift action was necessary, given the depth of the economic crisis facing Ontario last summer. Had we not moved expeditiously with the July and November economic statements of the Finance minister, we would now be experiencing an almost insufferable burden of debt.

Allow me to describe to you our approach to economic development. At the core of our approach is the conviction that government does not create jobs. Business creates jobs. But government has a vital role to play in creating the climate within which business and jobs growth occurs.

To that end, we have been working with business to identify barriers and gaps which impede growth. I personally have met with leaders of all of Ontario's key sectors, with executives of business organizations and tourist authorities and associations, with CEOs and staff of financial institutions, and with scores of our international partners. We have listened and we are addressing the barriers and gaps they have identified. We are implementing solutions. We are helping businesses build capabilities for self-reliance, to help them seize the opportunities offered by an improved business climate.

Our focus is concentrated on two specific areas of the economy:

(1) On sectors and groups of companies which together represent economic engines in Ontario's regions and the province as a whole; and

(2) On small to mid-sized innovative growth firms, many in the high-technology field, which are leading the transition from an industrial to an information society.

In December, I visited a company which epitomizes the pioneering spirit we must champion. It's called Printed Circuits Inc, located in Scarborough. From a skeleton staff with sales of less than $500,000 a year in 1990, the company has become Canada's leading manufacturer of printed waferboards such as those found in Motorola's portable phones. It now employs 200 and had sales last year approaching $25 million.

I know most of you are also aware of the success story of Make-up Art Cosmetics, better known as MAC, of Toronto. Since we began working with the company in 1993, it has quadrupled employment to about 800 and boosted sales beyond $100 million annually. MAC's chief executive officer, Frank Toskan, expects sales to hit $1 billion within the next few years.

We see these innovative growth firms as a central force for job creation in the Ontario economy. The ministry therefore is focusing its support on developing and delivering corporately sponsored networking opportunities through developmental and networking events such as the Wisdom Exchange held last September. The private sector played a significant role in sponsoring last year's event and is anxious to continue its support in the future.

In fact, Patrick Walsh of Research Capital Corp called the September Wisdom Exchange a huge success, and one client, Lionel Waldman, the founder of Sandylion Stickers Design of Markham, said it was the best event he had attended in his 30-year business career. We surveyed those attending Wisdom Exchange and found that these pioneering business leaders placed great value on the exchange of information, the networking opportunities provided, financial issues management and strategic planning.

We are also working with business to remove barriers and gain their commitment to create jobs and invest. We are equipping entrepreneurs, companies, sectors and communities with the capabilities for self-reliance and success. Entrepreneurship is also being encouraged and assisted in many other ways. In cooperation and partnership with municipalities, the ministry operates 31 self-help offices, which up to December of this fiscal year had handled approximately 180,000 client enquiries and about 8,000 detailed consultations.

The ministry also helps build small business through publications and such undertakings as the joint federal-provincial Canada Ontario Business Service Centre and publications. We also conducted a range of 390 seminars to more than 8,000 participants as of year-end, and we continue to support student ventures as a means to build entrepreneurship in Ontario. We will be supporting government privatization and commercialization to strengthen the economy.

The bottom line is that we believe that real and lasting economic renewal must come from the private sector. Any attempt by government to do what the private sector does best -- create jobs and generate wealth -- will be a poor imitation at best. We are also marketing Ontario as a jurisdiction which is truly open for business.

This very positive message is getting out. During the Premier's recent Team Canada mission to India, Pakistan, Indonesia and Malaysia, his trade and investment missions to Japan and Hong Kong and my own visits to the United States, Britain, Switzerland, Germany and France, we gained support for our new mandate from our international partners. They are voicing confidence in the course we have charted.

Our mandate is to lead and promote Ontario's economic development and market the province as a place for business, job growth and tourism. In pursuing this mandate, as I said, we are marketing Ontario: its favourable location in North America, its highly educated and competitive workforce, its favourable business climate and its high quality of life.

My ministry's mandate is consistent with the new role of government in Ontario. Over the course of the next few months, I will be providing details on the nature of the programs and services the ministry will be offering, but you can be assured it will not function on the basis of corporate handouts like those which have been contributing to our debt and deficit. The limited resources we have to invest will be used much more strategically and with a high degree of accountability to ensure that objectives are met or exceeded.

We will be discharging our mandate with a smaller ministry, one that is more efficient and effective and of lower cost to the public we are all here to serve. We are already in the process of reducing the number of divisions within the ministry from seven to four.

Under the new structure, the marketing and trade division will be responsible for the international and domestic marketing of Ontario's image and our trade, investment and tourism potential. The division will focus on marketing, in combination with the Ontario International Trade Corp's trade development responsibilities, the management of Ontario's international relations and protocol and will incorporate the Ontario Investment Service into the ministry.

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The business development and tourism division will play a key role in leading all the functions in the ministry that deal with individual businesses and will include responsibility for working with tourism. The scope of its activities will run from startups and entrepreneurs, to innovative growth companies, tourism operators and investment case management.

The strategic analysis, sectors and technology division will develop policies and programs, work with sectors and promote technology and Ontario's interest in the telecommunications infrastructure. Along with other divisions, ministries, governments and private sector economic development partners, it will work to overcome the barriers to economic development and take advantage of opportunities.

The corporate services and agency relations division will be responsible for corporate management, coordination and provision of corporate services for the ministry and will manage the relationship with assigned agencies. The assistant deputy minister of the division will also be managing the wind-down of the development corporations.

This restructuring of the ministry will obviously reduce the number of administration and management personnel required; and we are in the process of completing programs designed to help in Ontario's economic renewal.

I mentioned that we see as our primary responsibility getting the business climate right. Only if we can get business going can we create the wealth we need to pay for the social services Ontarians expect to receive. This means removing impediments to business growth and cutting the red tape that all too often shackles enterprise.

When I started a business in 1971, I needed approval from about three different levels of government to get things up and running. Now I think a company of a similar nature would have to go through about six to nine levels of bureaucracy before it could get going. We're going to fix that. We have taken many steps; we will be taking many more. In the meantime, there are already signs that this "open for business" approach is paying off. Let me cite some examples for you.

A December report by Dun and Bradstreet Canada shows that businesses in Ontario are optimistic about the future. The optimism index has risen from 53 to 59, an 11.3% gain.

A couple of weeks ago, the one millionth personal computer rolled off the Kanata assembly line of Digital Canada, destined for markets in Canada, the United States, Latin America and the Caribbean.

Walt Disney announced plans in December to open animation studios here and in Vancouver.

Toyota in Cambridge will begin producing a two-door coupe in 1998 and might add a Lexus model to its production.

Ford of Canada will be making the 1997 F-series pickup, redesigned version of North America's best-selling vehicle at its Oakville plant.

Viceroy Homes expects to ship 500 homes to Japan by the end of this month and is projecting sales that will rise to 1,000 over the next year.

Honda in December announced plans to invest $300 million in a new minivan plant in Alliston.

Siemens has announced expansion plans for Windsor, Hoechst in Kingston, Bayer in Sarnia, and Cosella-Dorken in Beamsville. These are committed to further investments.

All of these growth sectors and indicators occurred not as a result of corporate handouts, but because of Ontario's improved business climate.

In fact, Richard Li, chairman and chief executive officer of the Pacific Century Group, announced a $100-million condominium development along Toronto's harbour last month. He acknowledged that his talks with Premier Harris recently had confirmed that "Ontario is once again a good place in which to invest." The project will provide 300 construction jobs over the next two years. To quote Mr Li, "We are certainly encouraged and we hope we can do more in Ontario in the future."

There are other signs that the business climate is on the mend. As you know, Ontario exports more per capita than any of the G-7 nations. We are the leading exporting province of a leading exporting nation. Exports are our lifeblood, and as 1995 drew to a close, merchandise exports had risen by more than 15.5%, with growth concentrated in areas of industrial goods, machinery and equipment, and automobiles.

You are aware that Premier Harris was a keen supporter of the Team Canada mission to Asia and returned from India, Pakistan, Indonesia and Malaysia with news of millions of dollars in new contracts and thousands of new jobs. These contracts range from the design and construction of hydro-electric facilities to the joint manufacture and marketing of pharmaceuticals. Many of these opportunities were identified and assisted by the Ontario International Trade Corp. As the Premier said at the end of the 12-day mission: "These initiatives demonstrated the confidence of the international business community in the skills, expertise and quality standards of Ontario. From technology transfer to trade, cooperative agreements and joint ventures, Ontario business and its Asian counterparts have set a standard for business partnerships."

Incidentally, the OITC, chaired by former Premier William Davis, continues to play a pivotal role in export development by working with small and mid-sized firms to overcome obstacles and expand markets. OITC's private sector board ensures that priorities are right and the standard of service is high. The OITC is Ontario's lead trade promotion agency and offers a range of programs and services from basic export education and consulting to the development of consortia for international projects. It offers one-window access to help Ontario companies pursue international leads. Its goals include increasing the number of small businesses that export and to broaden their markets beyond the United States.

Ontario, I might add, is well placed to experience growth in the service sector through exports, such as those being won by Webb Zerafa Menkes Housden. The Toronto-based architectural firm recently won a $1-million contract, with assistance from the Ontario International Trade Corp, for the design of an $85-million 20-storey tower in Kuwait City, the first government building constructed since the Gulf War.

We are also assisting in the marketing of SkyDome technology in Europe, airport construction in Indonesia, transportation and environmental projects in Latin America, subway development in Portugal, energy projects in China, science and technology exhibits in Asia and the Middle East.

Export opportunities are also being identified by the Markham-based Canadian Associations of Mining Equipment and Services, which is surveying the 100 mining markets worldwide for additional opportunities to build on the $1 billion of GNP produced by goods and services in the mining industry. The industry is also seeing the increased benefit of greater cooperation within the sector. CAMESE executive director John Baird recognizes that firm-specific government programs are being reduced, but points out, "When you start doing things sectorally, good things start to happen." We are actively supporting this kind of initiative within sectors that expands cooperation, coordination and eventually job growth.

In February, Ontario recorded job growth of 31,000 following a 3,000 job gain in January. Since October 1995, Ontario has gained 76,000 jobs, bringing the number of employed people in the province to its highest level since early 1990. Overall employment is projected to rise 1.5% this year and 1% in 1997. Those working in Ontario total 5.292 million at the present time.

For the year 1995 as a whole, employment rose by 71,000. Primary growth, I am pleased to say, occurred in the private sector, where employment rose by 116,000 jobs. As might be expected, considering the downsizing commitments by the provincial and federal governments, employment fell in the public sector by 45,000 jobs. This graphically demonstrates, I believe, that we are going through a period of transition, one in which long-term sustainable jobs will be increasingly found in the private sector, not the public. This is not an easy transition, by any means. We only need reflect on the current public sector labour difficulties in Ontario to appreciate the personal and professional impact of this change.

For our part in the Ministry of Economic Development, Trade and Tourism, we're adopting a whole new approach to economic development. We are undoing the damage that was done over the past decade and are committed to a further significant improvement in the business climate. We realize that this will not occur overnight, but we are also encouraged by the signs of growing confidence in Ontario by domestic and international investors.

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We are getting the business climate right, and that does not mean it is necessary to provide tax breaks, subsidies or outright corporate handouts. Investors are coming here for the right reasons, not the wrong reasons.

We have listened to the business community at home and abroad and we are doing what we said we would do. We are vigorously attacking the deficit. We are reducing the size and intrusive nature of government. We are tearing down barriers to business, cutting red tape and stimulating consumer confidence. We are developing ways for individuals, companies and communities to achieve self-reliance.

For all of the challenges we face, Ontario is an exciting and dynamic place to do business. We have moved from relying on natural resources to a fully diversified economy. We are located in the industrial heartland of North America, one of the most prosperous markets in the world. Within a day's drive of 120 million consumers, Ontario is the third-largest trading partner of the United States, behind Canada as a whole and Japan, with trade in 1993 totalling $116 billion.

As I have said, Ontario exports more goods and services per capita than any other jurisdiction in the G-7 group of leading Western industrial economies. Ontario's GDP was about $303 billion last year, or 40% of Canada's total.

So we have to keep the big picture in mind. To local, national and international investors, we offer a stable political climate, one of the best medical systems in the world and a province that is diverse, clean, safe and sophisticated.

The Chair: Mr Minister, you're just about running out of time.

Hon Mr Saunderson: And I'm just about to finish.

We have the brainpower and the resources to compete with the best in the world, and I don't think it's an exaggeration to say that over the long haul Canada can't be strong if Ontario isn't too. I submit to you that one of the most significant contributions that we in Ontario can make to the nation and to national unity is to revitalize our own economy. The generation of wealth and the creation of jobs go a very long way towards contributing to the national sense of wellbeing.

Jobs and wealth allow individuals to lead dignified lives. Jobs and wealth allow people to take care of their loved ones. Jobs and wealth allow people to save and to invest and create a climate conducive to more of the same. Jobs and wealth give us the means, collectively, to do the things that mark us as a caring and decent society. They give us the means to operate a health care system that is second to none in the world. They give us the means to invest in education without which we have no future at all. In short, they give us the means to build social institutions that have made Canada a beacon of peace and hope to people around the world.

As David L. Morton noted in the recent National and Global Perspectives booklet, "In study after study, Canada is constantly rated among the most desirable places in the world."

I'm looking forward to hearing your comments and your questions, but before I do, I thought I might comment on remarks made recently by the Prime Minister when he challenged the private sector to accept its responsibilities for job creation.

As I have said, government doesn't create jobs, the private sector creates jobs. In Ontario, we are getting government out of the face of business. At the same time, I am confident that business will take up the challenge as well as seize the opportunity to grow and provide jobs. We're looking to business to play a vital role. I'm sure it is up to the test.

Ask the employees of Digital, Honda, Viceroy, Toyota, Ford and other growth firms within Ontario. They can testify to the benefits they derive from a healthy business outlook.

We're counting on business to play a vital role in Ontario's economic renewal, and I am confident that once we clear this period of transition, once we have repaired the Ontario economy by getting our own fiscal house in order, once we have restored the business climate to a healthy state, we will see a steady growth in the number of jobs we need to sustain Ontario through the next century. Thank you.

The Chair: Thank you, Mr Minister. Mr Kwinter, you have 30 minutes.

Mr Monte Kwinter (Wilson Heights): Thirty minutes. So little time and so many things to talk about.

I'm not going to refer at all to the estimates book because this government had nothing to do with those particular estimates, but I certainly want to spend all of my time addressing the statement of the minister.

The statement that he read I could have read as the minister, with a couple of exceptions. Nothing that he said has changed. There hasn't been some Dark Age over Ontario over the last 20 or 30 years, and all you have to do is take a look at the economic growth of this province to see that regardless of what government comes in and puts its particular stamp on some particular sector, the main ingredients that the minister refers to -- and I'd like to refer to them: "Canada is one of the most desirable places to live in the world, and Ontario, of course, forms our nation's geographic and economic core. Ontario offers a stable political climate, one of the world's best medical systems, a highly educated workforce and urban centres that are clean, safe and sophisticated."

None of those is as a result of this government's actions. They are an accumulation of previous governments that go back to Confederation. To be fair, I would say that someone dropping in from Mars and looking at the situation we're facing today would have the feeling that all of those things you hail as our attributes are being decimated and totally destroyed. We have school children demonstrating, we have doctors upset, we have urban centres cutting down on services, we have people going on strike. What we have developing is an environment that will make this a less attractive place to invest, not a more attractive place. I want to talk about some of these things.

First of all, it's important to know -- I wish I had a copy of the minister's text, because he referred to the fact that he was going to make this a less bureaucratic kind of government and he was going to be more responsive and they were going to be open for business. I say to you, sir, with all due respect, the people in your ministry are the people who served the previous government and the government before that, and Ontario has always been open for business. One of the things I resent most about this government is the fact that it latches on to slogans -- "We are open for business," "the Common Sense Revolution" -- and thinks there's magic in those slogans.

The province of Ontario holds an enviable role in the economies of the world. It has that role because of its geographic location -- as you have stated, we're within a very short distance of 120 million people -- and we have wonderful resources, not only our material resources but our people, and we have developed a first-class infrastructure, a first-class educational system, a first-class social system, and that is one of the major attractions. The government is fond of saying we're overtaxed and we've got to get rid of public service. There is a document called An Overview of Ontario's Tax System produced by your government, and it states that we are one of the most competitive tax jurisdictions, certainly in the G-7 and certainly in all of our neighbouring American jurisdictions. That is something every government has always been conscious of, because we are in a competitive situation. We have always been open for business and we have always attempted to make sure that those particular advantages are there for us.

Let's talk about your statement, which I have used constantly because it just boggles the mind, that "Economic growth is not created through government assistance." I'm sure you know I wrote your deputy. I'll read the letter I wrote to her; I hope you don't mind, Deputy. I said: "If economic growth is not created through government assistance, what kind of boondoggle are you guys running over there? Send everybody home, turn out the lights and save the taxpayers of Ontario a pile of money."

Would you like me to read your response into the record? I'd be happy to. The deputy replied: "I passed on your concerns about economic growth to the minister. On my own behalf I can assure you that this ministry continues to be committed to the economic development of Ontario." The minister may not be but the ministry is, and I'm happy to hear that. But I should tell you this: You went through this long list of companies that are prospering and growing in Ontario, and you mentioned Honda and you mentioned Camry and you mentioned Toyota, and I'll mention Ford and GM and Chrysler and others. Every single one of those companies is here in part because the government assisted them in getting here. Those jobs that are created are not phantoms, they're not spectres that are out there that nobody ever sees. They are flesh and blood people who are working, spending money, and the services that are provided to those companies are doing the same thing, and the parts suppliers are doing the same thing.

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I want to give you a case history which I think is important, because I feel that somebody has been sold a bill of goods. I am absolutely in favour of cutting out grants and subsidies to a wide range of companies. There are people out there, I remember when I was the minister, who would come to me and say, "What kind of programs do you have"? And I'd say, "Well, what kind of programs are you looking for?" "Oh, we don't really care, just what have you got? If it's going we want it."

I agree, that should be eliminated. There is no reason we should be propping up companies who are looking for a handout just because it's there, when they themselves are not viable. As I say, I am totally supportive of reducing a great number of those.

But let me give you a case history, one that I use all the time because it's critical to understand. I would like in your response to get an indication from you, if the same thing happened today, would you turn them away? Would you say, "Sorry, our policy is that economic growth is not created through government assistance and as a result we can't help you?"

When I was the minister, the controller of Ford Motor Company came to see me and said: "Mr Kwinter, we have a problem. We are competing intercompany for a facility in Oakville that will do two things" -- and I'm sure you know there was a time in the automotive sector, and there still is, where there is huge overcapacity, and with that overcapacity it means that plants are being shut down. There are major plants being shut down all over North America, and in Ontario all you have to do is take a look and see what happened in St Catharines, some of the other jurisdictions, and you'll know that it is a real possibility.

Ford had two interests; one is to anchor that facility -- and I don't have to tell anybody in this room what would happen if that Ford facility shut down. That isn't a dream. That isn't pie in the sky. I have subsequently talked to the executives at Ford and they said in that time frame that was a real possibility.

They came to us and said, "We are bidding for a van and paint plant with a sister company in St Louis, Missouri, and we have to go to Dearborn and we have to sell our board on the advantage of it coming to Canada, to Ontario, or it's going to St Louis, Missouri." It wasn't a matter of giving a company a handout. They had to be able to put forward the business plan that would make them competitive. In their presentation to me they said St Louis, Missouri, had an advantage that they could not match. One of it was in infrastructure and the other is in training.

The pricetag on that was over $100 million, which is a lot of money -- I think it was $102 million. They said, "If we cannot match that amount we will not be in the running and that facility will go to St Louis where we lose the multiplier effects of that particular investment plus, who knows, that may just make Oakville a more attractive facility to shut down."

On the spot I said to them, "I am sure that we can do that." They said, "How could you possibly commit your government to that without even talking to them?" I said, "I know what I can sell and I know what the economic viability of that investment is."

I went to my colleagues at cabinet, told them what was at stake, and they agreed that we should make the investment. I can tell you, as a result of that investment we secured the van plant, we secured the paint plant, we anchored the Ford facility, we created jobs, we created support systems in the suppliers, and we have recouped, and the government before us has recouped more than what we put out.

If you think that is a waste of public money, then I think it borders on irresponsibility. I think there is a role for government to play. I think the role is selective. I think the role has to be very, very carefully examined, but surely there is a role to play.

You talk about Ontario Bus Industries. I agree with you. I agree with you that that particular facility happened to be a disaster, but you have to take a look at the rationale. As I say, I'm not trying to defend it, because I had nothing to do with it, but you have to understand the rationale that your predecessor, Premier Davis, considered when he formed the UTDC, the Urban Transportation Development Corp.

In Ontario, where the provincial government spends 75% of the money on capital equipment for transit systems, it would seem not a bad idea, if you're spending that money, that you get some kind of a benefit from it, rather than spending 75% of that money and sending it off to Hawker Siddeley in the UK or someone else in the US. It's our money. We're spending it. Why don't we get some benefits? Why don't we invest it in a company that is going to provide the kind of urban transit systems that we need, that can possibly become a world leader?

As I say, I think the concept was the right one. The execution? A lot to be said about it. But to totally blank that out as a matter of policy and say, "Sorry, there's no role for the government to play, and if you guys can't make it on your own, too bad," to me, that doesn't make any sense.

There are other situations. I think the jury is still out on de Havilland. I want to tell you that story, because I think it's important. De Havilland has had a chequered career in Canada. The original de Havilland company in the UK was then involved with Hawker Siddeley, and then the federal government decided it would get involved and took over the company. It never made money, it lost money, and they finally decided to sell it. They sold it to the Boeing Corp, which happens to be the largest aircraft producer in the world.

The Dash-7 and Dash-8 series are the most successful short takeoff and landing aircraft in the world. They had universal acceptance. The only problem is they couldn't make any money building them. Every time they built an airplane, it cost them $1 million. So they were selling airplanes and every time they sold it they were selling it at a $1-million loss. They were making five of them a month. The company came along and said, "We have a waiting list of 200-some-odd airplanes; maybe we should increase production." They did a costing of six airplanes per month and found that they would lose even more money. The more airplanes they built, the more money they lost. And here's a company that had $4 billion cash in their treasury. They weren't hurting for money. They said, "There's no reason for us to be in this business if we can't make any money." So they walked away from it.

The provincial government stepped in, negotiated a deal with Bombardier, and the company is functioning. I would love to know how it's functioning, because the latest information I have is that they're producing somewhere less than three airplanes a month, and if they couldn't make money at five, how can they possibly make money at three? So that would be an interesting story to find out what is happening there and what the government's role is and what it should be.

Let's take a look at another company: Algoma. Certainly Algoma is an accident waiting to happen. I have never been a strong supporter of what has been going on at Algoma, but on the other hand, what are the options? Do you say, "We will not support that company," shut it down, put 6,000 people out of work in a virtual one-industry community, walk away from it and say, "Sorry, it is our government's policy that we will not put any money into any industries"?

The company was sold to its employees. The government took a position. It is functioning, and you know the old axiom, "Pay me now or pay me later." So you have to take a look at the decision. Are we better off doing that or are we better off putting all those people out of work and letting them collect unemployment insurance, let them collect welfare with all of the following kind of difficulties that happen?

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So there is a role to play, and I think that it is shortsighted and irresponsible for the government to say: "We have no role to play. We are going to be cheerleaders in the world." I was surprised that people didn't come in here with pompons, if that is your role to go around and say: "Rah, rah, rah. Ontario is a good place to do business."

I also take great exception to a list of the things that are happening that had nothing to do with this government -- nothing. To suggest that Mr Harris influenced Mr Li in that condominium proposal is ludicrous. He didn't even know about it. It was negotiated by the city, had nothing to do with this government; It was in the makings for a long, long time. And if you know anything about trade, you'll know that deals don't happen because someone drops in and says: "I'm here. Sign the order." They take months and years to negotiate.

And I can tell you, sir, that's an area that I'm very involved in, and these deals take forever. Most of the time when the minister and the Premier go to a place, if they do sign a deal, it's a deal that has been hanging fire and has been negotiated and completed in three, four, five, six months, and you say: "Hold on to that. We've got some of the politicians coming through and they want to sign something."

To suggest that these things just sprout, full-blown, because you happen to drop into a place is naïve and just not true. It doesn't work that way. There's no question there's a role for the minister and the Premier to play, because it gets attention, it draws a critical mass of people out, and you can certainly open some doors. But to suggest that these things culminate in deals as a result of that trip just isn't the way it works. Trust me. I've been on enough of those trips that I know how they work.

I want to talk about the whole area of the economy and what kind of environment we're in. We have a debt that is reported to be, at varying times, anywhere from $87 billion to $97 billion at the present time. By this government's own admission, when it leaves its first mandate, that debt will be somewhere between $120 billion and $130 billion. That is best-case scenario, and that doesn't even take into account this tax cut; and the mathematics are very simple.

The budget that will be coming down in May is going to show a deficit of about $9.6 billion. That $9.6 billion is going to be added on to whatever the exact figure is, and let's use the round figure of $90 billion. So you're going to be up to 100 right there. The next year you're going to get down to $8-some-odd billion. You're up to 108. The next year you're going to be down to $4 billion, $5 billion or $6 billion, whatever it's going to be. You're going to be 114. In the last year you're going to be into an area where you're going to be up around 120, not counting the $5 billion a year that's going to happen to the tax cut.

So what you're doing is, you're holding out this: "Ontario is open for business. We've got great fiscal management and we have taken our debt to $120 billion to $130 billion." You will not have a balanced budget at the end of your mandate, because even under the best-case scenario it's going to be the year 2001, which is going to be anywhere from a year to a year and a half out of your mandate into the mandate of the next government. Adding to that is the situation where in order to meet the promise of the tax cut, you are going to be borrowing $5 billion a year -- borrowing $5 billion a year.

You're fond of saying, and your Premier is fond of saying, that it costs $1 million an hour. You, sir, an accountant, I hope you've calculated what the tax cut is costing -- $500 million a day that you are adding to the debt of the province.

So in all of this situation, where you're trying to portray that you are the fiscal managers, you're the guys who are going to get this province going again, and I say to you, this province has been going and it's been going fairly well. Now, not as well as it's done in the past, but take a look at everyone else, take a look at our neighbours in the States, which is probably the greatest determinant of what happens to our economy, and we haven't been doing badly.

I'm the first to admit that a lot of things that the previous government -- and I'm talking about what the NDP government did -- were not conducive to business. But in spite of that, business has been expanding in Ontario. It has not been expanding the way we'd like it because it hasn't been expanding in the west the way we'd like it. I think that you would be doing yourself a service, and your colleagues a service, to tell it as it is. Yes, of course, let's cut red tape, let's cut the things that are irritants.

But I'll say to you, we have been competitive in spite of that, and there are far greater reasons why people don't come here than you seem to think is the reason. And I'll tell you, there are things -- just like we are the beneficiaries of our location that allows us to service the northeastern Atlantic seaboard -- there are other jurisdictions in North America where, because of their proximity to whatever markets a particular individual wants, they want to be.

But I think it's important that the government understand that you do have a role to play and you do have a role that may be financial. I'm not saying it has to be financial. I don't say you solve problems by throwing money at them, but to totally say, "Governments do not create jobs" -- again, there are 81,000 phantoms working for the public service. They're not there because the government didn't create them. But somehow or other, these suits are walking around and they're getting paycheques and they're holding mortgages and they're buying produce and they are doing all of these wonderful things but they don't exist, because the government never created them.

There's another interesting statistic that you should know. In 1984, the last year of the Conservative government, the number of public servants in Ontario was 81,000. The number of public servants in Ontario today is 81,000. The interesting thing about that statistic is 5,000 of those 81,000 have been added to the law and order section, which means that everybody else has been reduced by 5,000. So you have an employee workforce that is pretty lean. I have no hesitation in saying it could be leaner. But to suggest that there has been a burgeoning of civil service or public service workers just does not stand up to scrutiny. And I commend you to look at the figures and you will see that in the last year of the Conservative government in 1984, there were 81,000 jobs in Ontario. That's exactly the number, give or take 100 or so, that is there now.

Let me, in my last couple of minutes that I have left --

The Chair: You've got about five minutes.

Mr Kwinter: Oh, okay. Let me tell you another interesting thing that happened. Mike Harris, who was the leader of the third party, stood up in the House one day and was berating the then Minister of Finance, Mr Laughren, and said to him, "A Conservative government will do what every Conservative government has done in the history of Ontario: create a balanced budget." And I sat there, and I wasn't paying too much attention, and I thought to myself, "I don't think that's right." I remember when Larry Grossman was the Treasurer and I was sitting in the House. I think they had a deficit. I wasn't sure, but it seemed to me that they had a deficit. So when I got back to my office, I contacted legislative research in the legislative library and said, "Could you send me the list of the last 20 years of budgets so I can take a look at them?"

To my surprise, and somewhat political delight, there had not been a balanced budget in Ontario since 1969. So from 1969 to 1984, the Conservative government ran a series of deficits. But not only did they run deficits; some of them, on a proportion of deficit to total budget, were, and still are, the largest in history.

I couldn't ask Mike Harris the question -- the rules of the House don't provide for it -- so I made a statement in the House, because I get 90 seconds. I stood up and said, "Yesterday the leader of the third party made this statement, and I just thought the members would be interested in knowing," and I read this and then I passed it out to the whole Conservative caucus so they could see the figures.

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I happened to run into the leader of the third party afterwards, and he said: "You know what, Monte? I was really surprised. I didn't know that." It didn't stop him from saying it, but he said, "I didn't know that was true." I say that is the problem with a lot of people: One guy lies and the other guy swears to it, because they have no idea and they think that is what it is.

A politician who has a lot of experience and for whom I have a great deal of respect, the Honourable Herb Gray, said to me many years ago: "Monte, the first thing you've got to learn in politics is that all the wisdom doesn't rest on one side. Those guys have got their generals and they've got their wisdom, and you've got yours and you've got your wisdom." It isn't black and white. There are whole grey areas where it's a judgement call, absolutely a judgement call. You make a decision based on the best information and the best advice you get.

I have to say, with due respect, most of the people in this room from the bureaucratic side were giving me' advice or giving Frances Lankin advice, and you make the choice based on your political ideology, no question about it, but on the advice of the professionals who are advising you. Sometimes you're right and sometimes you're wrong, but whether you're right or wrong in most cases has nothing to do with the fact that you made the wrong decision. At the time that was probably the right decision, but things happen. That's the nature of life, that's the nature of economics, that's the nature of business. Things happen that are unforeseen, and you have to adjust.

It is important that instead of condemning what has gone on in the past -- and again I say, in closing, if you take a look at the growth in the 1985-90 and even in the 1990-95 eras, you will see that we have nothing to be ashamed of compared to our trading partners, compared to our neighbours. We have done fairly well, and we've done well because the basic ingredients of Ontario are sound. What we have to do is improve on it, eliminate the irritants, be aggressive, because it's a competitive world out there. I would suggest to you that the role of this ministry should be to go out there and not run down what has happened before, because as to a lot of the things happening now, you'd be far better off spending your time defending those than trying to run down something else.

I truly believe we have all the ingredients in this province to be a major force in the economy of North America and in fact in the global economy. We have the people, we have the resources, we have the infrastructure, and our challenge as politicians is to try and keep those things within the bounds of fiscal constraint. I certainly respect the idea that we have to get our fiscal house in order, but it's like everybody else in business. I want to leave you with one last story, and it's close to my heart because of our family business.

A fellow had a hot dog stand in this little town, and he sent his son off to college. While he ran it, he would get the greatest buns and he'd have the greatest hot dogs and he put the greatest accoutrements on it, and he had a thriving business, an absolutely thriving business. His son came home to visit him from school and said: "Papa, are you crazy? Don't you know that there's a recession on?" He says, "You're kidding!" He says: "Yes, that's right. Cut back. Don't put that stuff on." He was out there and before he knew it, nobody was buying his hot dogs. He says: "God, my son is so smart. I sent him to school, and you see, he was able to tell me there was a recession. I wasn't aware of it. See how smart he was?"

I'm saying to you that these are the kinds of issues that have to be addressed. We have to make sure that where the money is not being spent well we curtail it, but where money can be spent, where it can be of benefit to the citizens of Ontario, where it can create jobs, where it can create new industries, where it can create economic activity, the government absolutely and definitely has a role to play.

Mr Tony Silipo (Dovercourt): I hope I won't need 30 minutes to say the few things I want to say at the beginning, because I'm eager to get into the exchange with the minister.

I have listened reasonably carefully today to the minister's statements, as I have whenever he's spoken. I've heard him speak in the House and at one or two events. I have to say at the outset that I continue to be offended by the approach taken by the government, not just with respect to the differences in approaches we clearly have, he and his government from mine and that of my party; that is part of the political process and that is part, in my view and I think generally held throughout the province, of acceptable discourse in a free and democratic society.

What I find offensive, and I don't use these words lightly, is when I see the minister and a number of his colleagues -- this is not just on his shoulders -- take unto themselves those things which we have built in this province over decades, those qualities which make Ontario the special place it is, the qualities that attracted my parents to bring their family, myself included, and many other families to come to this country and to this province: "the quality of life, a stable political climate, one of the best medical systems in the world, a highly educated workforce, urban centres that are clean, safe and sophisticated." I'm quoting here from the minister's own words, words, by the way, which I've heard other ministers in other governments equally, with the same vigour and with the same justification, pronounce publicly and privately.

What I find offensive is to see, first of all, this minister and this government assume those things unto themselves as if they created those things, as if those things came about in the few months since June 8, 1995; and second, to see, at the same time as they are speaking proudly about those qualities, which I agree wholeheartedly are a good description of the society we live in, that they are piece by piece dismantling through their actions those very things that make Ontario the special place it is.

It would be more correct to say -- and I think on this we actually could find agreement, certainly listening to the minister and listening to Mr Kwinter and in the position I take and that many in my party take -- that government does not create jobs, that government by itself cannot create jobs. The private sector inevitably is the place that creates the most jobs. On that point we do agree.

Where we clearly part company -- and I accept that we part company as a party even to some extent with the Liberal Party, and again that's fine, that's fair, that's part of the democratic process in this province -- is on the role of government. We don't believe, and I certainly don't believe, that it is government's role to get out of the way, as the minister would have us believe, and let the private sector create the jobs. I don't think it's as simple as that. While there is a philosophical difference, very clearly, I would argue there is also a very practical difference.

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I would suggest to the minister that there are many jurisdictions in North America, throughout the world, in Europe, wherever you want to look, with governments led not by socialists or social democratic governments but led by conservative parties which, while they believe very strongly in a free enterprise system, also believe there is a role for government intervention and government playing a role in creating the wealth and in creating the jobs.

There is one issue on which I do agree with the minister, when he says, "Job creation is the top priority." That is a statement I take from his interview in the last issue of Challenges. But it might interest the minister to know that some of his colleagues, a few of whom are sitting here in this committee, had a difficult time just yesterday in the pre-budget discussions at the finance committee of this Parliament -- Mr Kwinter was there for part of those discussions -- actually had a difficult time agreeing to a recommendation that said exactly that: that job creation should be the top priority and should be the top priority against which the government's next budget is judged.

It might interest the minister to know that, as the minister responsible for job creation in this province, however he describes that responsibility, but clearly as the minister who has significant responsibilities in the area of either job creation or creating, in his words, the climate for jobs to be created -- particularly when I read out to members of the committee yesterday their own words in the Common Sense Revolution that say, "Creating 725,000 jobs is what the Common Sense Revolution is all about." The minister certainly remembers that, because he has said, as I've indicated, "Job creation is the top priority." Some of his colleagues seem to be not quite as strong on that point, and it's something I want to pursue in the exchange we'll have a chance to get into.

I would say on that point just a couple of other things, that we have seen many instances across the world, in many jurisdictions, of governments understanding that yes, government's first role is to create a climate in which there is investment, there is wealth created, and then that wealth is fairly distributed. And therein lies the other fundamental role of government: that wealth is fairly distributed throughout the citizens of the society.

On that we also have a fundamental difference. When I see what this government is doing in terms of what is clearly, as I see it, driving its economic agenda, I see much less of a concern around reducing the deficit and bringing government spending into line. Yes, they're doing that; yes, they're reducing government spending. But the single largest area driving their actions, as I see it, is the 30% tax cut. The 30% tax cut is going to shift the wealth in this province like no other single government action will have done in probably the last 20 years in this province, because it shifts significant amounts of dollars from Ontarians of average and low income into the hands of the wealthiest Ontarians in this province.

There's no two ways about it. When government members say -- and I'll be interested to hear what the minister has to say on this -- that no decisions have been made around that, again I say to them, then what did you mean when you put out the charts in the Common Sense Revolution that said that's exactly what you were doing? Does it mean you have changed your mind, or does it mean you are still wedded to it but now are trying to fudge the numbers? We will see.

But on the economic level, in addition to the disastrous effects this is going to have on people socially and in terms of what it means for people on a day-to-day basis, the stark and interesting reality -- again not according to my predictions but according to statements made by the Minister of Finance, and on this I will be interested also in hearing the minister's views -- is that there isn't the sense that that action, which as I understood it is seen to be the primary job creation incentive of this government -- well, it's not going to create the jobs. The Minister of Finance doesn't foresee the creation of those jobs, certainly for the first year and perhaps even the second year following the tax cuts, or at least until that point.

So I think again it's fair for us to ask, what is the point? If it's not to create the jobs, if it's not to do what you said you were going to do, if it's not to make job creation the top priority, what is the point? Maybe the point is that what this government is really about, and what this minister's actions are about as part of that government, is not so much to be less intrusive, as he put it, but fundamentally to change the nature of the Ontario society we have built.

But the interesting thing -- and this is what I find offensive, as I said at the outset -- is that while the minister and the government that he's a member of continue to dismantle, piece by piece, those very qualities that have made Ontario and Canada the best place to live in year after year, he still continues to proudly herald those very same things as the qualities that make Ontario great. I say to the minister, you can't have it both ways. You can't tear away at the fabric of Ontario and proclaim to the world that you created that very same society. You just can't do that. You can't do it and be honest to yourselves and to the people you claim to represent.

But the jobs issue, as important as it is -- and I believe that above everything else we do, that, particularly in this climate, is the most important area for government to be focusing its energies -- isn't the only area where I see this kind of two-faced approach coming from this government.

I want to make a couple of comments in a few other areas. Just after the election, when we saw that as part of this ministry's new mandate we now have tourism included under its responsibilities, I remember reading some very good, positive comments from the industry. They felt that finally they were being placed within a ministry that had some significant clout and that their concerns would be addressed, their concerns as an industry that employs almost 7% of the workforce in Ontario, so an industry that is significant and in my view can be made even more significant. I, for one, was very happy to see the inclusion of tourism under the economic development ministry, because I believe it makes a lot of sense for it to be there.

But lo and behold, what has the industry seen? We heard one part, one important part, of that industry tell us a few weeks ago that all they have seen as a result of that shift has been significant cuts in the ministry's budget as it relates to investment in the tourism industry. I think they used figures of some 53%, and I'll want to talk to the minister about that as we go through the afternoon.

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The other area that I see as -- to categorize it as "offensive" is the mildest word I can find, particularly on a Friday afternoon just before the March break; that is, the government's actions with respect to the Casino Rama. I have never seen sleight of hand as clamorous as that one in any of the years I have been in public life. While I've only been here at Queen's Park for the last five years and a bit, I've been in public life for about 17 years.

For the government and for this minister to wait until the last moment, when construction was proceeding and when we were weeks away from the opening of the interim casino, to pull the rug out from under the feet of those involved in putting that together and say: "Hold it. Nothing's going to proceed until we get a big chunk of those profits. We've changed our minds and we believe now that the government needs to rake in some of those profits" -- one could ask, and I'll ask the minister, why it was that it took them eight or nine months to come to that decision.

But what I want to ask more significantly around that is, what happened in the time since June 8 that changed the minister's mind and the government's mind from the position that this government doesn't have a revenue problem, that what the province has is a spending problem? If we don't have a revenue problem, then why all of a sudden did the minister and the government became so interested in raking in some $300 million to $400 million away from the profits of Casino Rama, profits that were intended to go into a first nations economic development fund to help out a sector of our society that, whatever scale you use, has to be acknowledged by people of all political stripes as being one of the poorest groups in our society? What happened to make this government and this minister so greedy that they had to, in this case, as they've done in action after action, take money away from a sector of the economy and a group of people in our economy, in this case the first nations, who could have quite used that money to better themselves and to improve the quality of life for themselves and their families? I find that action just appalling.

I'll be interested, in the exchange that follows, to pursue some of these and others. I wanted to raise these because I don't want the discussion this afternoon to be a surprise or to be a hunt to see if we can catch the minister off guard. I'm interested in a useful exchange, in a useful discussion. Yes, there is a very fundamental difference in philosophy and approach, but I want the minister to be able to explain to me the contradictions I see in the approach he and his government are taking on these issues.

You can't continue to argue both ways. You can't continue to say, "We want to be less intrusive; tax breaks aren't needed," and then proceed to put in place the single largest tax break to the wealthiest citizens in this province through a 30% tax cut. You can't continue to say, "We want to have a situation in which the private sector alone is going to be involved in creating business," and continue to have a ministry of which we can then ask, what is the point of its existence?

If the minister wants to run around the world proclaiming what a great place Ontario is, that's fine; I could accept that, because I think that actually is a good thing. But I would say to him, have then the decency to also continue to speak up for and defend those very same qualities and those very same services you are trotting around the world as being the reason people should invest in Ontario. You can't on the one hand say those are why people should come to Ontario and spend their money in Ontario and invest their money in Ontario, and at the same time be part of a government that is, piece by piece, dismantling those very same services.

The Chair: Mr Minister, you've got 30 minutes in which to respond.

Hon Mr Saunderson: First of all, I'd like to welcome the insight of two former ministers, but I just cannot agree with their views in the entirety of their statements. I'd like to spend some time talking about some of the things they said.

Yes, things have changed in Ontario, even though it was laid out that maybe things haven't changed and that Ontario is still, as it was, a great place to be. Yes, it's always been a great place to be, but it can be better. The big difference I see is a business climate that certainly over the last 10 years had really driven businesses away from considering Ontario as a place to be. I learned this when I was in Europe and in the United States, that with what had been going on here, due to government intervention, bureaucracy etc, businesses were just saying, "We'll give it a pass." We have heard this about Japan, the United States, Great Britain and Germany, just to give you some examples.

So there had to be a change, and it was a better business climate we brought when we were elected. I think that business climate is taking effect now, but it comes about by having a lower personal tax rate, and I'll talk about that later on. It talks about some predictability. In the past, hydro rates were skyrocketing, workers' compensation premiums were rising. We took it, in our campaign, to be an important thing to say that we are going to allow some predictability for business, and that's what business wants. When you spend time making a business plan, and then all of a sudden hydro rates are raised or payroll charges are increased, that really does hurt the budget process for a business. That was driving people away from Ontario.

Things are not being destroyed by this new government. If anything, the change had to come about because of a financial crisis. There was magic in the Common Sense Revolution, and it stated that we would be open for business. We had to broadcast this message, and indeed we have been broadcasting this message by speaking as often as I can and my parliamentary assistants can, not only in Canada, in Ontario, but around the world. The Premier and I have been on trips, as you know.

One of the most important things for us to stress is the report and study that Peter Barnes made, a former deputy minister in my ministry, Removing the Barriers to Growth for business. That is a very good lesson of what can happen when governments run amok and pay little attention to making it easy for business but seem to be bent on making it more difficult for businesses in Ontario.

I would like to talk a little about the tax situation here. I inferred from what Mr Kwinter said that our tax rates are acceptable, from things he has heard. Of course our business tax rate is fair, and it has stayed basically at around 42% over the years. But it's our personal tax rate, as I mentioned earlier, which is really the devil. The personal tax rate in Ontario is the highest personal tax rate in Canada. We intend to make it the lowest personal tax rate in Canada.

I, in my own campaign, went door to door and found that people were most intrigued with the personal tax rate. They felt they were highly taxed, and they were therefore waiting to see which party was going to win before they made any decisions about changing their homes or adding on to them or buying new appliances.

Also, I ran into people who ran independent businesses, small businesses. These are the entrepreneurs we have to encourage, and these people said to me that they could hardly wait for the personal tax rate cut because they would be taking the money saved and investing it in their small business.

I think that's really the message of the tax cut. It puts money into the system, which creates demand for goods and services, and that creates jobs. The message I learned from my canvassing, as all my fellow candidates did during the campaign, was that people could hardly wait for that to happen, and it is going to happen in the Finance minister's budget coming in May.

There of course will be an offset, called the fair share health tax, so that, just to counter what Mr Silipo said, the high earners will not necessarily keep all the money saved from that 30% tax rate cut.

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I have to say that in the last 10 years I think the lights have dimmed in Ontario, particularly in our factories. I think what's happening now, when we are hearing all these pieces of good news, is that the lights are going to be burning much later into the evenings, and maybe the nights, as shifts are added. I think the vote of confidence by the car industry is a very good example of what can happen in that regard.

I think the companies that we have all referred to in our opening remarks is an area that we should dwell on. I'd like to dwell on it for the moment. I think Mr Kwinter implied that these companies would have come to Ontario for any reason. I don't think that's quite true. I think that they have come here because the climate is right, and I'd like to quote from an article which appeared in the Economic Development Journal of Canada late in 1995.

There are 12 reasons why top firms want to come to various geographic locations or government locations, 12 conditions that they are looking for to create a favourable atmosphere in which they think they could operate. I'd like to go through each one of them.

Availability and skill of a labour force: I think that's very important, and we note that of all the things that we have learned from talking to the various business sectors in the last nine months is that they are asking for help to increase the skills of their labour force, and they want to be sure that there is adequate skilled labour available to them. We are going to make sure this happens. They feel this has not been available in this province.

They want a government that is pro-business. I think that says it all. Of all the platforms that were put forward in the last campaign, the Conservative government's platform certainly is the most pro-business, and that is number two.

The third is corporate income tax, and we've dealt with that, but they also talk about personal income tax as well. That is a very important factor, and I've already talked about that.

They want modern highways and mass transit systems or infrastructure. That is very important, and we are convinced that we have been slipping in that area over the last 10 years. We are convinced that the way to bring business to Ontario is to make sure our infrastructure remains strong.

I don't think I need to go through all of this, because it just keeps making the point that really Ontario is a very vibrant place under our new government.

I might say that tax increases never solve the debt and the deficit problem. I'd like to tell you that the total tax burden in Ontario, including taxes levied by all levels of government, is among the highest in Canada and has increased faster than the national average. That is why we have to have a lower personal tax rate in this province.

Ontario's high and growing rate of taxation has contributed to its weak economic performance over the years because it cuts into consumers' purchasing power, it reduces the incentives for entrepreneurs, as I mentioned earlier, and it makes it more difficult for companies to attract and keep highly skilled workers.

I was interested to hear what Ford had said to a previous minister. I can only tell you that Ford executives have told us how pleased they are with the new government and its policies. They basically have said to us: "Just make sure you give us the right climate. That's what we need in order to be prosperous in this province."

The fact is, the companies do not need grants and loans, and they've said that to us. Of course, when you're offering grants and loans, it's like free candy and when it's being given away, everybody lines up to get free candy. But we have learned from my discussions with the various sectors, of which there are 16 that I have spoken to, that they do not need grants and loans. They want the right climate.

I was pleased that we were able to speak, when I was in Davos with the Premier, to the chief executive officer of Ford worldwide. He confirmed what we had heard. He said he was delighted to know that Bill 40 no longer existed in Ontario, that Bill 7 had become its replacement. That's what he said, that labour law of the previous government had kept them from doing much in the way of new additions in Ontario.

I talked about the fact that companies do not like unpleasant surprises, and I can tell you, this was echoed around the world to all of us when we have been travelling recently.

There was mention of OBI or Ontario Bus Industries. There's just no way that this deal can be defended, in my opinion. The government should never have got into the business of being a bus builder. It left us with commitments and money spent of well over $100 million. That's shocking. Just think what that $100 million or more could be doing for people who really need help. Yet we're accused of not being mindful of people who need help. I would say that any government that put itself into a position like it did with OBI was not thinking about people who need help.

I heard also mention about de Havilland. I can only tell you that I have been to see this plant and that it will soon be profitable. But they once again confirm that it is the business climate that has increased orders for them lately and they say they're very grateful for the good -- what shall we call it? -- business climate, or environment in which to do business.

There was some comment about Algoma Steel. Once again, I think that could have been solved, and I know it could have been solved, without involving so much government financing.

Also, we talked about the waterfront, about Mr Li, and I mentioned that earlier. I don't mean to imply that it was Mr Harris alone who made that deal work, but I can tell you that it was him being elected and his party being elected with the policy that he had devised which swung Mr Li to make the final commitment. That's what made that happen.

There was also some talk about the deficit. I'm not the Minister of Finance, but I have a great interest in finances. I have been appalled that a government would continue to spend more money than it earns. Families can't, businesses can't, and if they did, they'd be bankrupt. We have a financial crisis, if you can call it that, in this province and it's been brought about by 10 years of waste, abuse and mismanagement, as far as I'm concerned. But I can only assure my opposition members here with me today that we do intend to balance the budget.

I can tell you that when we have been borrowing recently in international markets, Ontario is paying less of a premium when compared to relative Canadian government and US government bonds, and I think that's a vote of approval of what we are trying to accomplish in this province by the world financial community.

I don't agree with the employment figures that Mr Kwinter mentioned. He said that things really hadn't changed much from 1984 to now. I think that's what you said.

Mr Kwinter: Yes.

Hon Mr Saunderson: I think that you are wrong. I think now we have --

Mr Kwinter: Will you resign if I'm right?

Hon Mr Saunderson: I think that it's not necessary to go through that because --

Mr Kwinter: I will show you the proof that I'm absolutely right.

Hon Mr Saunderson: I think you may be counting one thing and we may be counting it differently. Now that we're on the subject, I would just like to say that from 1984 to 1994, 41% of new jobs were created in the public sector, despite having only a 21% share of employment. I just wanted to mention that to you. You may be accounting for it one way. I think the way I'm counting it is the correct way. Maybe we can get together and talk about this at a later time.

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I want to talk about the history of budgets. It was referred to by one of the previous speakers that there had not been budget surpluses for a long time. All I can tell him is that this is a new Conservative government and we mean business. We were elected on the promise of creating a balanced budget by the end of our first mandate, and I referred to it earlier that we will be doing that. We are keeping our promises and we will keep that promise of a balanced budget.

"We have nothing to be ashamed of," one of the previous speakers said, "for the period 1985 to 1995." I think we have plenty to be ashamed of. It's a huge deficit which we all seem to agree is approaching $100 billion. That huge deficit is reducing this government's ability and it would have reduced any government's ability to provide help where it is most needed. So yes, Ontario hasn't changed much in some respects, but it has got to change a lot for it to continue to be the province of hope.

I might say that sometimes it's implied that you have to do things to bring business to Ontario. I think the only reason the previous governments in effect gave grants etc to businesses was almost like a bribe because of the very bad atmosphere they had created in this province. They need not have done that had they run the province properly.

Moving on to a few other remarks. Somebody said economic growth depends on government assistance. I think that's a wrong statement. We have a history of loans which have been made which have in the main been not good for this province. When you are the lender of last resort, as we have been in this province with the development corporations, you also often get the worst deals. I think that's very evident by what's happened with the general history of the ODC loans. Interjurisdictional bidding is a bit of a mug's game. I think it tends to escalate and, as I said earlier, I just don't think it's necessary for us to get into that business.

To Mr Silipo, I have to say that we are not dismantling things that make Ontario great. We are reinforcing and rebuilding those things that have made Ontario great. I think the most important thing is a business climate that creates demand for goods and services and therefore creates jobs. I know I keep coming back to that, but I do think it's one of the most important things for this government to remember and I know it will. Certainly our ministry is constantly saying that what needs to be done is to create the good business climate.

Less government gives business the room to expand, without bureaucratic interference. I'm convinced of that. That is another thing that turned foreign investment off Ontario. It was the constant interference with their planning process which ultimately turned those companies off.

I've talked about the 30% tax cut and I firmly believe that's one of the most important things that we can give.

Tourism: I'm glad Mr Silipo mentioned Tourism. I'm glad he likes it to be annexed to the Ministry of Economic Development and Trade. I have to say that it's a reflection of leading by example. By cutting 27 ministers to 18 ministers, we are saying we are going to do better with less, as far as cabinet members are concerned.

I also might add that when I came into my ministry, I was shocked to know that my predecessor had a political staff of 34 people. My political staff is 10. Once again, I think we're leading by example.

As far as the Rama situation is concerned, we can talk about that later, if that is the wish of the participants. I have to tell you that at roughly 11:30 today we announced that the construction would recommence as soon as the documentation, which has all been approved, is signed. I must say we found it very shocking as a government to come into power and find no proper legal documentation on an operation that to date has cost the Ontario government, and hence the Ontario taxpayers, around $43 million. There is no way that that situation could be allowed to continue.

You might be interested to know that at the end of 10 years, the 131 native bands will probably have had at their disposal over $1 billion. That's, as I say, over the next 10 years, and that will be very helpful to the first nation people. But I have to say that on that deal, the fact that we are going to receive our usual 20% on a casino operation was just consistent with what we've done before, but it certainly is required as well because of the financial situation that the previous governments have left this government in.

I think I'm finished with my rebuttal to what was said by the previous two speakers. Perhaps we might like to take a break.

The Chair: Yes. We could take a little break now till 3:30, be back here at 3:30.

Mr Silipo: Do we ever get to questions?

The Chair: Yes, immediately, as soon as you get back.

Mr Silipo: We're doing a lot of talking but not many questions.

The Chair: When you come back, there'll be questions. We stand adjourned until 3:30.

The committee recessed from 1517 to 1532.

The Chair: I'm going to try to go to a 20-minute rotation. I understand that all members are in agreement with that. We'll start off with the Liberals.

Mr Kwinter: Just for the record, to clear up a point, I said that in 1984 the public service number was 81,008; in 1995 the public service number was 81,251.

I should also like to bring to the attention of the committee that on February 6, 1995, Dave Johnson, who was then a member of the third party and who is now the Chairman of Management Board, wrote to the then Treasurer, Floyd Laughren, Minister of Finance, and asked a series of questions. One of the questions he asked is, "Would you provide the 12-month average population count for the Ontario public service for fiscal years 1985-86 to 1994-95?" He was sent a figure that said the head count in 1986 was 81,600; in March 1995, 81,600. The numbers are exactly the same.

I couldn't hear whether the minister agreed to resign or not, but I would suggest that when he suggested that I was wrong, he was in error and that is the number. I'll be happy to share this with you. This is right out of the 1984 budget, and this is right out of the Ministry of Finance. There you are right there, and you can mull over those. I just want you to know that the complement of the public service is exactly the same and will be reduced considerably.

I'm not questioning that. As I say, I have no problem with that. I just want you to know -- and the minister confirmed it -- that they live in a dream world. They tell themselves things and they think, because they tell it to them, they're right, when you're absolutely wrong.

I also want to talk to you about the taxes.

Mr Joseph Spina (Brampton North): That doesn't mean you can't restructure, Monte.

Mr Kwinter: I'm not saying that. All he had to do was say, "Sure, those numbers are the same, but we're going to restructure." I have no problem with that. But when he says, "You're wrong, those aren't the numbers, and I don't know where you got those figures because I calculate them in a different way," I'm saying, "You're wrong."

Hon Mr Saunderson: Let me just, if I may, comment back to you, though. I would like you to know that we're using a neutral source for our figures. I don't want this to be prolonged, but we are using Stats Canada, and our figures show 1985, 75,000; 1994, 91,000. That's why we said what we did.

Mr Kwinter: But I'm saying to you that if you can't trust your own people, then you've got a problem.

Hon Mr Saunderson: Well, these are Stats Canada --

Mr Kwinter: Well, you're talking Stats Canada; I'm talking the Ministry of Finance. If the Ministry of Finance sends me a figure and says, "This is what the complement is of the public service," do I say, "I don't believe you; I'm going to Stats Canada"? Why would you go to a source when you're a part of the government and you have that source available to you? Who knows better what the count is than the guys who are paying the salary?

Hon Mr Saunderson: Well, anyway, my figures stand.

Mr Kwinter: Fine. They don't stand very well.

The other thing I want to talk about is personal income tax comparisons. Again, this is not pie in the sky. You referred to the fact that "I heard somewhere that the tax figures were competitive." This is from the Ministry of Finance, September 1995 -- September 1995, okay? What they're saying is that when it comes to personal income tax comparisons, the top marginal rates in 1995, I admit Ontario is one of the highest. But the impression that you give is that it's way out of whack.

If you take a look at this bar chart, you'll see that the difference is very, very marginal for every jurisdiction other than Alberta. Alberta has a unique situation that we don't have, and that is that they have all of these wellhead profits. But if you take a look at where we are -- and I'd be happy to share this with members of the committee -- they are very, very similar. If you take a look at the top marginal rates for capital gains, again we are certainly high, but when you take a look at the one next to us, we're at 39.9% and Quebec is at 39.7%. We are talking a very, very small difference.

Mr Preston: What's your definition of highest?

Mr Kwinter: I'm talking relativity. I'm not saying that all of them shouldn't be lower. I'm just saying that the statement the minister made is that we have the highest personal tax rate in Canada.

Mr Preston: That's true.

Mr Kwinter: It isn't. It isn't true.

Mr Rollins: Who's higher?

The Chair: Let's not have an exchange that way. We were doing very well so far.

Mr Kwinter: Who's higher? BC is higher.

Another statement I want to make is, when we talk about comparisons on corporate tax, this is the corporate tax comparisons of statutory corporate income tax rates for manufacturing in 1995, again from the Ministry of Finance. This isn't from some Liberal hack who's feeding the information. This is from your own ministry. It says when we're talking about the statutory income tax rate, Ontario is the lowest of Ontario, Michigan, Tennessee, Illinois, the US average, Ohio and New York. We are the lowest. Okay?

When you talk about the corporate alternate minimum tax rates in Ontario, we are dramatically lower. This is Ontario at the very bottom here, and this is Illinois, Massachusetts, Michigan, New York, Ohio, Tennessee and Texas.

Mr Preston: And Sweden; they're probably higher.

Mr Kwinter: We're talking about our adjacent competitive jurisdictions. And I am not saying that you can't do better. I'm saying to paint it that we've gone to hell in a hand basket because our tax rates are way out of whack and people are staying away from Ontario because of our tax regime just doesn't stand up to scrutiny. And you can sit and try to rationalize it and try to give flippant remarks: "What about Samoa?" I'll tell you, you want to get a cheap place, go to Samoa.

But I'm saying to you that if you're making statements, this is the provincial corporate income tax rates for the manufacturing sector, and these are interprovincial comparisons. The jurisdictions in Canada that have higher provincial corporate income tax rates than Ontario are Alberta, Nova Scotia, British Columbia, Manitoba and New Brunswick. The only ones that are lower are Newfoundland, PEI, Quebec and Saskatchewan. Again, I'm not saying that that's perfect. I'm not saying that we should be happy. All I'm saying is that when it comes to the tax situation, we can improve it, but to portray it as being one of the major reasons why industry is fleeing Ontario doesn't stand up to scrutiny.

There's another issue I want to talk about.

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Hon Mr Saunderson: I don't think I said that, by the way. I did not say that corporate taxes were a problem.

Mr Kwinter: You said personal taxes.

Hon Mr Saunderson: I did say that.

Mr Kwinter: That's what I just said.

Hon Mr Saunderson: But you were just talking about corporate taxes.

Mr Kwinter: No, I referred to personal income tax.

Hon Mr Saunderson: You did talk about personal taxes. I'll tell you what the problem in Ontario was. Ontario taxpayers just felt burdened, weighed down with what had happened over the last 10 years: 65 tax increases, Mr Kwinter, in the last 10 years, 11 of which were income tax. They were psyched out. That's the problem in this place: The climate is not right. That's why we've got to get the economy right and the climate right.

Mr Kwinter: It's unfortunate that I didn't realize what we were going to get into, that this was going to be another reconvening of the economic and finance committee, or I would have brought my material with me. But I can tell you this, that when we talk about tax increases -- and I'll be happy to forward this to you -- the previous Tory governments put in far more tax increases than the NDP and the Liberals combined. You can shake your head and you can say no, and I can tell you that you can shake till your head falls off, but the truth of the matter is that these figures are not mine. They're irrefutable, they're there in black and white, and they're from the Minister of Finance. So let us leave that area, because obviously we're going to agree to disagree.

But I do want to talk about some of the things that you talked about, like the vote of confidence in the car industry. I think it's important that we understand the car industry. These companies didn't happen because a semi-trailer was going down the highway and something dropped off and the plant landed in Ingersoll or wherever. There was a concerted effort by previous governments of all stripes to go out and attract those industries to give Ontario the economic clout that it has. When you see what is happening and the expansion, you're a little naïve if you think that expansion is taking place because of the negative or positive aspects of Ontario alone. When you consider that nearly 90% of that production goes into the United States, those decisions are made on the basis of what kind of capacity is available and what the competitive rates are.

In one of my last acts as the Minister of Industry, Trade and Technology when I shared the opening of the new van plant in Windsor with Lee Iacocca, in his speech he said that in the United States the fringe benefits cost more than the steel that goes into a car or a van. One of the attractive reasons for coming into Ontario is because of our health plan, because of our quality of skilled labour, because of our infrastructure, because of our proximity to the major market. All of those components are part and parcel of what makes this a competitive automotive jurisdiction.

The decision as to whether or not our auto companies thrive or wane has very little to do with what happens in the sales market in Canada, because most of that production -- and you have to understand there's only a handful of models of cars that are even being built in Ontario. You go to the GM plant and they've got the Lumina and they've got the trucks and they had the Buick Regal; that's all that's made there. Most of that production goes into the United States. Most of our other car sales are imported, whether they be from Japan or Korea or the UK or Germany or the United States.

What determines the success of our automotive sector is the market in the United States, because if that market goes soft, our market goes soft. All you have to do is see in the paper that a GM plant -- I think it's in Ohio -- has gone on strike and they are immediately laying off employees in Ontario, because that's where those parts are coming from.

So the only thing I'm questioning is that the automobile industry and most of our major industries are not so sensitive that suddenly one government is in and, bang, "We're going to invest," and the other government is out, bang, "We're not going to invest." They have a huge capital investment. That capital investment has to be protected. It has to have add-on investment to make sure it's still competitive, it's still viable. I absolutely agree that if you do have a hostile environment, you may not get any more of that investment. I have no problem with that at all. But I would have to also say it's going to have to be a pretty violent environment for someone to walk away from that kind of investment.

It used to gripe me because, you know, all businessmen are the same. They will tell you one thing -- and I would like to leave a story with you because it might put some rationale in the minds of members sitting on the opposite side and the minister. When you're in business, you've got to deal with the government no matter who they are. They will come in and they will tell you anything you want to hear because they have to deal with you.

I sat with a member of the previous government at a dinner with a major player, and all he did was sit and berate the government: "These guys are terrible" and "These guys are horrible" and "They're doing this and that and the other thing." I said: "Why are you telling me? There's a minister right over there. Why don't you go and tell him?" It just happened they were sitting beside each other. The next day I ran into this minister in the House. He said, "That was a nice event last night, wasn't it?" I said, "Yes." He said, "Gee, a great guy; he thinks we're doing a great job." I said, "Interesting."

What do you want them to say? They need the government for whatever. They want to have access to the government. They're going to tell anybody who's in power: "You guys are doing a good job. I think you guys are doing a great job." But you've got to know what is really going on behind.

Mr Rollins: Practise what you preach, then. Don't make us feel bad.

Mr Kwinter: What I am saying to you is that one of the criteria, when you look at your list -- and the minister started to read out the list of what constitutes a good environment. The availability of a skilled labour force: absolutely critical. I want to tell you another interesting story, because I think it's important.

Mr Spina: No more hot dogs.

Mr Kwinter: No, no, no. This is another story.

We had a major problem in Ontario, and the problem was that we have a major automotive sector and because of problems with pension plans, Goodyear left New Toronto. They left in a very, very bad environment and they were gone. We as a government decided that it made no sense, when we build so many cars, that we would be importing tires. So we were able to go out and convince Goodyear to come back into Ontario.

The ministry people have location services to go out and try to find a site. They went out and they came back to Goodyear and said: "We've got a great site for you. It's in Morrisburg, Ontario. It meets all your criteria. It's near the 401. It's got power, it's got water, it's got good terrain." They said: "Thank you very much. We'll consider it." Then they came back and said, "We are going to Napanee." People in the ministry: "Napanee? How did you ever get to Napanee? We never even showed you Napanee." They said, "That's where we're going."

When I signed the agreement on behalf of the government with the president of Goodyear from the United States, I said to him, "Now that we've signed the deal, could you tell me why you went to Napanee?" He said, "I'd be happy to share that with you." The reason, he said: "We decided we wanted to be east of Oshawa because we didn't want to have to deal with the traffic in the Golden Horseshoe. We wanted to be within 150 miles of GM, because they were our biggest customer, for just-in-time delivery. The major criterion is we wanted to be in a municipality or a region that had a good technical high school. In our opinion, Napanee has got the best technical high school in eastern Ontario. That's where we put our plant." That was the reason that plant went there. He said, "I want you to tell that story to people, because we can teach people to make tires, but we can't teach them how to be taught to make tires, and we need those people because they're going to have to learn all sorts of things."

So it's important. Skilled labour is critical, and it's going to suffer as a result of some of the cutbacks that we see, and then we lose our competitive advantage.

I've already talked about the corporate income tax and I've said to you that there's no reason we shouldn't try to get it lower, but we are certainly competitive.

Modern highways: I'm sure you know, and we heard in our pre-budget hearings, that the Ontario Good Roads Association and the roadbuilders said that 60% of the highways in Ontario are below standard. I drove to Ottawa a couple of weeks ago. I couldn't believe it. I was on Highway 401 just past Kingston. There were potholes that you could almost go into. There isn't money being spent on that kind of infrastructure, and we're going to suffer because of it. It's going to really reduce our competitive advantage. We are going to have problems with a lot of the things that have made us attractive.

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We're talking two kinds of investment. You've got your investment that is domestic. These are people who live here and have to survive and have to make a living for their families and their children, and they need an environment where people have got money and they're spending so that they can do whatever they're doing, either get a job or survive in their business.

But then you have foreign investment, and that is far more critical to us because that is something where it's a plus. If you get a huge factory that wasn't there before, and you get it now, then you get all of the spinoffs. You get the taxes, you get the employment, all of those things. When you're trying to attract those things, you don't do it in a vacuum. You're competing with Kentucky and Alabama and Ireland and all of these places, and they go where they can get the best return on their investment as close to their market as they can get, which means that we don't have a lock on it. We don't have a lock on it by just going out and saying: "Aren't we great? You should locate here."

They'll take a look at it and say: "Why should we? If we invest there, what is going to be our rate of return on our investment? What is going to be" -- all of the things that make up the total picture of what makes that determination. It isn't just one thing. It's quality of life. "Will our executives go there? Can we attract our top executives to settle in Ontario if the infrastructure is falling apart, if the school system is lousy, if the health care system is bad?" All of those things contribute to what has been the quality of life, and that's what's made us the powerhouse that we are.

The Chair: Thank you very much.

Mr Kwinter: I was just warming up.

Hon Mr Saunderson: That was a lot of questions.

The Chair: Yes, but it's Mr Silipo's time. He gave you no time in which to respond.

Mr Silipo: Maybe Mr Kwinter and the minister can negotiate some time at the next round so that he can answer those questions, but let me try this. Minister, I'm actually going to try to ask you some questions, and if I can be short in my questions and you short in your answers, we can maybe get through a number of areas.

I want to start with tourism, because I want to pursue this point. When you talked earlier in response to my comments, you said that you're happy that we're going to be doing better with less, but you talked then about ministers' roles. I'm quite happy with you taking on that responsibility of running the Ministry of Tourism, particularly given that you have much less to do than your counterpart in the area of economic development, but what I was really getting at was the sense of surprise, if not betrayal, within the tourism industry that by virtue of the 53% cut to the budget allotted to the Ministry of Tourism -- and again I take that from the Ontario Hotel and Motel Association, its presentation to the legislative committee on the pre-budget hearings -- they don't see that as being any kind of support for the industry. How do you justify that kind of cut at a time when you're saying the tourism industry is one that you want to continue to support?

Hon Mr Saunderson: I'm happy you ask me about that. The tourism industry is a very important industry in Ontario, as you know. It's our fourth-biggest export industry. It is the epitome of small businesses in this province.

I had the great pleasure of attending the Northern Ontario Tourist Outfitters annual meeting in late October. I hasten to add that winter had begun in about the middle of October there and it hasn't stopped. So I was there at the beginning of winter. In any case, when I was there and spoke to those people who are, as I say, the epitome of small business -- and I think that's typical whether it's southern Ontario or northern Ontario, eastern Ontario or wherever -- these people are very pleased with what this government is doing for the individual owners of tourist facilities.

The very fact that the first $400,000 of payrolls are exempt from the employee health tax really impacts on small business people in a big way. That's at least $10,000 saved for those small business people, and that alone was the greatest encouragement we could give them.

The second thing that we were able to talk about was freezing the minimum wage. We have the highest minimum wage of any province in Canada. Now we are going to freeze it, and have frozen it, and allow the other provinces to catch up. But this means that for the summer jobs offered to students, there is a predictability in what people will be paying their summer help, and the same applies to the winter help in the ski area as well.

The fact that we've lowered that personal tax rate, which I have spoken about already today, means a big saving to those people because it means -- they're entrepreneurs and money for entrepreneurs usually flows right down, in a profit point of view, to that entrepreneur as income. The fact that they will pay less tax means that they will have more money left over, not to go off and spend in some frivolous way, but they will put it back into their business, and that's what they told us. You have no idea until you go up there and see what an austere life it can be up there, and any saving, cashwise, is a big assistance to those people. The fact that they can be predictable on hydro rates over the next five years because they have been frozen, that is a big, big help to those people.

Another thing that they really value from what we have done: The corporate filing fee, $50, not a lot of money but a headache as far as time is concerned.

Mr Silipo: Minister, I'm sure that they're all delighted about those things but --

Hon Mr Saunderson: You have to hear me out just for a minute, though.

Mr Silipo: You haven't answered my question. I asked you about --

Hon Mr Saunderson: You asked me what we're doing for the tourist industry. We're helping them in this way.

Mr Silipo: No, I asked you how you justify the 53% cut in the ministry's budget.

Hon Mr Saunderson: Well, I'm telling you that, because of the personal help and the tax point of view, we can help them a lot, and I'm telling you that they're most appreciative of what we've done from the tax point of view.

Mr Silipo: I can tell you, Minister, the Ontario Hotel and Motel Association isn't appreciative of the fact that you've cut them by -- you've cut the industry, not them -- but you've cut spending inside the tourism industry which, as you correctly point out, is one of the largest industries that we have in this province, you've cut funding by 53% and they're saying that doesn't make a lot of sense to them.

Let me move on to something else because I want to try to cover as much ground as we have in the limited --

Hon Mr Saunderson: Those figures aren't right, and the proper economic climate --

Mr Silipo: That's why I'm asking you the question.

Hon Mr Saunderson: -- is the most important thing you can give an industry. You can provide all sorts of marketing etc but if you don't provide the right climate for people to want to come here -- I have been in Germany and in England where we have a very good partnership with the private sector to get people to come to this province, and let me tell you, tourism from those two countries went up 11% in the year just finished and --

Mr Silipo: And I agree with you. Minister --

Hon Mr Saunderson: Wait a minute -- and we're expecting they'll be up by 15% this year, and why do they come? Because we've got clean, safe cities, and we can all take some credit for that.

Mr Silipo: Right. We had those before you became the government.

Hon Mr Saunderson: Yes, for sure, but we've also provided, with our tax incentives to the small businesses who receive these tourists they can improve their facilities and they are encouraged. Our cross-country skiing facilities are attracting people when they haven't before this year.

Mr Silipo: Minister, you will have nothing but an ally in me as far as promoting tourism, not only in the United States but across the world and Europe in particular, and many other jurisdictions. You will also find, I believe, if you look at what those jurisdictions are doing, that they invest, the government invests directly a lot more than Ontario does in attracting tourism.

I think you need to look at that area very, very seriously if you're serious about tourism continuing to be a viable industry in this province and a growing industry. You can't simply say it's a question of climate. Yes, climate is important, but what the government does and what, quite frankly, you do as minister is equally as important.

Let me move on --

Hon Mr Saunderson: Before you leave that, though, may I say that your government cut Tourism dramatically and it's over the last five or six years that we've seen the dramatic cut in the tourist budget.

Mr Silipo: We cut it nothing like you did, Minister. But I'm not here to quibble about what happened before you took government. We're talking here about -- I know you said at the beginning that you're in this awkward position of technically defending the estimates of your predecessor. I'm trying to have to talk about your actions and your record, and not those of the predecessor.

Hon Mr Saunderson: And I'm telling you what they are.

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Mr Silipo: Let me talk about casinos, first Casino Rama. You announced this morning an agreement that has been struck, as you see it, with the first nations that puts into the coffers of the government 20% of the gross revenues. I want to ask you, Minister, what changed to justify that kind of hike of funds away from the casino? What changed in your position and your government's position from the time that you took office when you said, "We don't have a revenue problem, we have a spending problem?"

Why is it that all of a sudden, very recently on February 8, you halted construction in order to be able to, when people's backs were up against the wall and they were expecting the casino to open in a matter of weeks, you halted construction as a way to force the issue and take 20% of the profits from the proceeds? Why all of a sudden do you have a revenue problem that you have to fix by taking some $300 to $400 million a year from Casino Rama?

Hon Mr Saunderson: First of all, we're elected to protect taxpayers' money, and I mentioned earlier today that $43 million has been spent by the government in order to get the casino as advanced as it is. When we looked at the issue and we saw the fact there was very -- well, there was no paperwork as far as proper legal documents were concerned, we said that we had to draw the line, and so we did. We had to consider all the factors.

The previous government got us into this problem, it was not us, but we thought it was a responsibility to the taxpayer to get proper documentation. As I mentioned, we have that now. We have a proper ground lease to be signed, a proper operating agreement to be signed and a proper financing agreement.

Mr Silipo: Why did that justify a change in the fundamental position that had been taken by the previous government that the proceeds of the casino would go entirely towards a first nations economic development fund? Why did it take you from June 8 of last year until February 8 for you to, all of a sudden, discover that you wanted to change that position? What's the justification for that?

Hon Mr Saunderson: This 20% is consistent with other off-the-top revenues that came from the Windsor casino, and we feel that that is a proper figure. It was the previous government who negotiated that agreement -- negotiated it very poorly, I might say, without proper documentation -- and therefore, as a new government with a new situation, after considering all the options, we felt that's what we had to do. You talked about having a spending crisis. Well, a spending crisis ultimately leads to a revenue crisis, and that's the situation we found ourselves in.

Mr Silipo: So all of a sudden there's a revenue crisis that would justify you changing that position.

I guess what I'm getting at, you can put it under the umbrella of paperwork that there wasn't a proper agreement signed, but you know better than I that the process that was followed with respect to the development of the Rama casino was exactly the same process that was followed with respect to the development of the Windsor casino. That is, that not all of the agreements were signed before the process to develop the casino was begun, that all of those processes were followed as time went along.

You can try to hide under the fact that the paperwork wasn't completed, but that doesn't answer the fundamental question about why it took you from June 8 of last year to February 8 of this year, weeks away from the opening of the casino, to all of a sudden decide that you now wanted to take 20% of the profits, 20% of the revenue from the casino.

Hon Mr Saunderson: Mr Silipo, I'm a chartered accountant and I have to care for the finances of -- that's how I've been raised, to appreciate the finances of any organization I'm involved with. The fiscal situation, the documentation situation was not in proper shape and that's why we had to do what we did. I'm happy to say that today we were able to announce that the agreements have been properly drawn up.

Mr Harnick, my associate, is regulating and discussing with the first nations how they will deal with these funds. As I mentioned earlier, at least $1 billion will have accumulated to the 131 bands of Ontario after the first 10 years of operation, and that's a very conservative guesstimate.

Mr Silipo: What about the $300 to 400 million a year that they will not be getting as a result of this agreement?

Hon Mr Saunderson: That's just the way it's going to be. I think the previous government was not thinking clearly when they made that arrangement.

Mr Silipo: Why did you not make that decision or the announcement that that was your changed position from the previous government some time earlier than February 8? Why did it take until February 8 for that position to come out?

Hon Mr Saunderson: We were hoping, of course, that the documentation was going to start to be completed but there was a malaise which we --

Mr Silipo: The first nations weren't made aware until around February 8 that you wanted, all of a sudden, that kind of profit-sharing to be part of the agreement.

Hon Mr Saunderson: I think the first nations have known for a long time that they would be sharing in revenues and it was up to them to decide how they would share those revenues and what percentages --

Mr Silipo: But you waited until we were weeks away from the opening of the casino to stop construction and use that, quite frankly, as a bartering tool to get the deal that you wanted.

Hon Mr Saunderson: We were using a very prudent, cautious approach, and that's what has forced us to do this.

Mr Silipo: Let's talk about the agreement that you struck. It's my understanding, Minister, from discussions that we've had this afternoon with people from the Rama First Nation that there may not be in fact an agreement that they can live with. If that turns out to be the case, what's your position? Are you going to stop construction again?

Hon Mr Saunderson: That's not our understanding. As far as I'm concerned, the three agreements that were required have now been drawn up and they will be signed. Until they are signed, of course, the construction won't go ahead, but we feel the agreements are reasonable and will be signed. I don't know what you're quoting, but --

Mr Silipo: We'll all wait to see.

Hon Mr Saunderson: We have every indication, by the way, that they will be signed.

Mr Silipo: I want to move to a question on the other casino that you like to use as an example of how things should be done. In that casino, which has been bringing hundreds of millions of dollars to the provincial coffers, some $282 million in the 1994-95 fiscal year alone, it's just come to our attention a few days ago, and this was brought to your attention by my colleague Dave Cooke in a letter that he sent to you on March 4, that Windsor casino has announced the layoff of 78 cashiers and slot machine attendants.

Why would that action, Minister, be acceptable to you or be justified in a situation where you have, to use your own approach -- you say: "Private business will create the jobs. We create the climate." Here's the closest that a government entity can be to being in the private sector, certainly bringing in lots of money for people, employing lots of people and at the same time bringing in lots of money to the provincial coffers. What's the justification in laying off 78 people who have been working and helping to bring about those profits?

Hon Mr Saunderson: I hope you're not implying that we should start interfering with how businesses run themselves. We don't work that way; other governments might have but we don't do that. Listen, I have to tell you that like other tourism-based industries, any industry, and the casino is no exception, is subject to some seasonal fluctuations. Just think about it. The winter months are typically slower for certain industries, in particular the casino business. It's probably weather-related as well.

The Windsor casino has worked very closely with the union to fine-tune staffing down there. Fewer than 100 staff have been laid off and the majority of those people are part-time employees, and I'm sure that in the spring, when the weather picks up and people are more mobile, they will be hired back. But that's the reason.

Mr Silipo: I find the contradiction really interesting, Minister. When it comes to Casino Rama, you have no problems interfering, in fact stopping construction, getting right in there --

Hon Mr Saunderson: There's no comparison about what you're speaking.

Mr Silipo: -- feet-first in order that you can control the level of revenue that comes to the government. When it comes to the Windsor casino, you're saying: "It's not our decision that 78 people have been laid off. That's just a business decision."

Hon Mr Saunderson: If the proper agreements had been in place as far as Rama is concerned, this never would have happened, and you know that too. But if you were a businessman, Mr Silipo, would you want to have something going on without proper legal agreements?

Mr Silipo: You know that's not the issue, Minister. You know that's not the issue. The issue is not, were all the agreements signed? You know, and your officials can tell you, that not all of the agreements in the Windsor casino were signed before the decisions were made around who would run the casino, around the planning for opening the casino, and in fact you don't seem to be complaining about that. You don't seem to be complaining about the revenues that are coming into the provincial government, as we would not have complained, with respect to the Windsor casino.

Hon Mr Saunderson: Let me just assure you that the basic agreements that are necessary to run a casino were in place in Windsor before it opened, long before it was completed.

Mr Silipo: It could have been in place in Casino Rama too, if you'd allowed the process to continue.

Hon Mr Saunderson: I don't think so. I'm sorry.

Mr Silipo: Let me come back to the jobs issue, Minister, that's related to the Windsor casino. You made the point, and I want to come back in the next batch of time I have more to this, around the question of "business will create these jobs." We just create the climate, is your approach, and business will create the jobs.

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Where is government's responsibility to ensure that business lives up to its responsibility to create those jobs? How can you just simply stand by and say, "A profitable business like Casino Windsor is" -- however else you want to describe it, it certainly is a profitable business, to the tune of hundreds of millions of dollars to the provincial coffers. How can you justify allowing them to just proceed, to continue to make those profits and lay off workers? What we're seeing there is quite frankly what we're seeing with respect to the banking business, what we're seeing with respect to lots of other businesses, and I think what matters most to the average person out there is, do they have a job or not?

You can't continue to say, "We'll let business create the jobs; we just simply, as government, have to create the climate," and wash your hands completely of the responsibility when particularly entities like Casino Windsor are just proceeding to make more and more profits. Again, I'm not arguing with the fact that they're making those profits, because they're helping all of us by doing that, but there again they're doing it, in this case, at the expense of 78 people and their families. How do you justify that?

Hon Mr Saunderson: I can tell you that we have to run that operation like a business. Those people who have been laid off are part-time, as I said earlier, the majority of them are part-time, and in the spring they're going to be hired back, I'm convinced of that, when things pick up.

There are layoffs in every industry, Mr Silipo, you know that, and we cannot start, as a government, telling people when to do something in the business world. That's exactly the climate that existed before. We don't want that to exist again. It's what business has said to us, whether it's in the United States, Germany or France, "We like what you're doing in Ontario; we like the climate." By the way, you know what they really said? "If you'd done only one thing," and that was to get rid of Bill 40, "we'd still be there in spades." So that's the difference.

Mr Spina: I just want to address a situation mentioned earlier, what appears to be just leaving the private sector alone, and the comment Mr Kwinter made with respect to the tax cut, that it would never work in terms of creating jobs.

Yesterday, you recall, I was challenged when I brought some of this because they wanted to know the source of my numbers. I'll give you the source of the numbers before I begin my comments. First of all, the numbers that I will be giving you come from the US Census Bureau, the US Treasury office, the Federal Reserve and the Congressional Budget Office. Those are the sources of my numbers.

For years, people have represented the prosperous 1980s as an example of the failure of conservatism and Reagan-style tax cuts. From 1982 to 1989, 19 million net new jobs were created, two thirds of them high- or middle-plane, and resulted in the lowest unemployment rate in 16 years as a result of the tax cuts.

The economic growth that flowed from the tax cuts in the US increased federal tax revenues in the 1980s by $1.1 trillion; that's right. Reductions in marginal tax rates actually caused an increase in total tax revenues. The additional federal tax revenues contributed to the reduction of the federal deficit from 6.3% of gross domestic product in 1983 to 2.9% in 1989.

Furthermore, the Reagan tax cuts produced a 76% jump in new business investment in real, adjusted-for-inflation dollars in the 1980s, and furthermore tripled the rate of productivity growth.

Eighty-six per cent of the tax filers of the poorest fifth of families in 1980 moved out of that bottom quintile by 1988, and furthermore, 16% of them moved all the way to the top fifth of income earners.

Real family income declined each year from 1979 until 1982 and declined each year since 1991 to the present. The Reagan years, which are sandwiched between those two periods of shrinking income, produced a real increase of $4,877 in median family annual real income.

What does all this mean? Simply put, the 1980s under Reagan was not a decade of greed, where the rich got richer and the poor got poorer. Jeez, that sounds like a really familiar phrase, doesn't it? That's bunk. The Reagan tax cuts led to job-creating businesses, and entrepreneurs led the longest period of economic growth the US has ever seen for all income levels. Tax cuts create jobs. That's what Mike Harris is trying to do in Ontario. Thank you, Mr Chair.

Hon Mr Saunderson: Is that a question?

Mr Spina: No, Mr Minister, it's an endorsement of your policy.

Hon Mr Saunderson: It certainly is.

Mr Preston: Make it into a question: Isn't it right?

Hon Mr Saunderson: It's very right.

Mr Spina: Yes, there you go. There's a question.

Mr Preston: Mr Chairman, can we reserve our time until the end, the balance we have?

The Chair: I don't know what you mean about that. It's 20 minutes you have in rotation. If you want to skip your time now --

Mr Preston: I think you get my drift, don't you? If we don't take up our time right now, does somebody else get it?

The Chair: It sounds drifting to me.

Interjection: We're going to be out of here at 5 anyway, aren't we?

Mr Spina: Or do we call the question?

The Chair: The bottom line is, we are out of here at 6 o'clock. If you want to rotate it to Mr Kwinter --

Mr Preston: For 20 minutes.

The Chair: -- past that time, I'm all right with that, because you've used up about four minutes of your 20 minutes already.

Mr Spina: I have a question of the minister with respect to the issue that Mr Silipo was talking about. It's my understanding, from the structure of the way the casinos are, Minister -- is this correct? -- the 20% that the province gets in net revenues from casinos, was that not already in legislation when the casino corporations were created?

Hon Mr Saunderson: I'm going to ask my deputy to respond to you because she is a lawyer and was very involved with the legal aspect of the arrangements with Windsor. You're quite right, but I'd like her to explain that to you.

Ms Judith Wolfson: The minister just answered the question, Mr Spina. There is a statutory provision that 20%, that of the government, goes into the CRF. As a matter of fact, it goes to the Ontario Casino Corp and then indeed reverts to the province. The province can do what it will, obviously, with those funds.

Mr Spina: So from a legal point of view and from a policy point of view, this government didn't change the game plan, as is indicated by some of the others.

Ms Wolfson: The 20% would always go to the Ontario Casino Corp for use by the government as it sees fit.

Mr Spina: Did the last government make some commitment to the Rama reserve that was different from that?

Mr Silipo: It sure did.

Mr Spina: Then they broke the law; is that correct?

Ms Wolfson: No, Mr Spina. Let me be quite clear about this. The revenues from casinos in the Ontario Casino Corporation Act, if I'm correct -- I have the president of the corporation here to assist, if necessary -- all revenues come into a pot, if you will; 20% goes immediately to the Ontario government, and the Ontario government can choose to do what it will. The previous government chose to allocate those funds in one way, the government today has chosen to allocate those funds in different ways, but no one broke the law. Those funds, 20% of the gross winnings, would come through the Ontario Casino Corp to the government of Ontario.

The Chair: Mr Spina, if you need more of an explanation, there are other staff there who are quite knowledgeable and can come forward any time to get the facts straight.

Mr Spina: I'm comfortable with the reply.

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Mr Carr: Thank you, Minister, for appearing here today. I wanted to get a bit of a sense of some of the reaction around the world to what the government is doing, and I know you mentioned in your statement at the beginning that you've had a chance to see some of the foreign reaction. Is it too early for people in other parts of the world to get a sense of where the government is going, and could you maybe give us a little bit more detail of what some of the reaction is? I'm thinking not only in some of Europe but in the United States as well because, as you know, that's our biggest trading partner, with the vast majority of our exports going there.

What is the sense, around the world, of the government and the changes? Is it still in a period of wait and see -- the Premier, obviously, was meeting with people to try and get the sense out there -- or what exactly are the people in the rest of the world saying about the new Ontario government?

Hon Mr Saunderson: I think I'd like to comment, Mr Carr, by talking about my own experiences into the United States and to Europe. We were in the United States in early December, both in New York and Chicago, and they really, at that stage, hadn't heard that much about what we were proposing. Bill 7 was relatively new at that stage, and they wanted a clear explanation of what was in the bill. As you know, there are about three main areas which concerned them, and of course the one was to have replacement workers. That was most important to them.

The second one was that when you buy a crown corporation or something affiliated with government, do you have to take with you the labour arrangements? That's typical of all purchases, by the way, but that was something they wanted to know about, that if they were to purchase something in Ontario, would they inherit the existing labour rules?

I guess if people were interested in anything, it was basically the labour changes in Ontario. Yes, of course, you could talk about the personal tax rate and that. They understand that, and as Mr Spina eloquently outlined the benefits of a tax cut as it happened in the States -- so they understood all that. But for them to see that the government was getting out of the way of business, to do things without a lot of bureaucracy, and it could be in any area, such as environment or other areas, they were most pleased to hear that.

That was the message from the United States. Keep in mind that they are our biggest trading partner. There is a population of 120 million people within a day's drive from the province of Ontario, so obviously they are our biggest trading partner. We ship to them; they ship to us. The fact that they had the spirit of the entrepreneur alive in Ontario again certainly appealed much to them.

To go over to Europe, in London probably the most important thing we did was to accept an offer from the British government to help us on trade, and that is to help us with our business ambassadors program which we will be announcing in the near future. This is a new program for Ontario, and we had the benefit of meeting with Lord Fraser, my opposite person in the British government. We were able to get from him some guidelines and some suggestions on how to do this. They felt that with the climate we had, we would be remiss if we did not have the assistance of senior Canadian business officials, who travel the world, not out there talking for us. That was very useful, but I think it was the new climate here that brought us together with the British government so that they could impart to us their experiences.

We had a chance to talk to other areas at a lunch meeting arranged by the high commissioner to London. I might say I found that the Canadian High Commission and the embassies in any country I have travelled in, and I know the Premier feels the same, are extremely helpful, certainly the unbiased bureaucrats, if you can call them that, and helpful to whoever is in power.

When we met with Mr Frith at the high commission, we met with a number of companies and they were all selected companies who are doing business in Canada. I think one of the most important things we can do is to almost thank people for investing in Ontario. When I ran a business, I ran it so that I was conscious of my clients. Once you have a client, you never want to lose that client because it's bad publicity and it's also a financial loss. So we spent a great deal of time talking about the climate in Ontario to these people and they realized when we spoke that what we were doing here was going to make them more profitable, and giving them a better climate in Ontario certainly was the bottom line for them.

We met with major pharmaceutical companies and food companies in England. All of these companies do tremendous business here and they're going to expand wherever they think they will get the best reception. I don't know that I should say names, but one of the largest pharmaceutical companies was very pleased to hear about our desire to try to make life easier for businesses in Ontario, and for their particular business because the pharmaceutical business has a lot of intellectual property to protect etc, without getting into too much detail there.

We wanted to go to a large food and beverage conglomerate because they had just made a big investment in Ontario, and they had made it basically because of what had happened in the election. We felt that a call to them would be a courtesy to make them feel comfortable with their decision and to let them know we had no intention of backing off what we had said we were going to do, because there are some newspapers in this province, particularly in Toronto, which make people believe that we may not follow through on our promises. We intend to follow through completely.

The other thing we did, no matter where we were, was to champion our achievements in Ontario. Yes, some of them came with previous governments. One of the most important things we can do as Ontarians or Canadians is to be proud of our achievements. We were very proud to be able to be in Frankfurt and talk to them about our SkyDome technical abilities with the retractable roof because they want to build a domed soccer field with a retractable roof.

Mr Carr: You might not have wanted to mention how that got financed. There's a little problem there, but it's a great structure.

Hon Mr Saunderson: Anyway, that is almost in place. When the financing gets in place they will go ahead, but the bottom line is that we went because we were asked to go to a meeting in Frankfurt by the consortium that is going to be building this stadium. These are Ontario people, so we wanted to go there. That's another thing that was important on the trip, that we were out there supporting business people who were in Europe at the same time as we were, trying to sell something for themselves. They also told us when we talked to them -- many companies -- that they had every intention of going on an expansion kick in Ontario and that made us feel very good.

Those were sort of the highlights and it was typical whether we went to a pharmaceutical company in England or in Germany. We were able to tell them the story about Ontario and we were extremely well received. In France -- it was our last stop on the way home -- they had the biggest turnout they've ever had at the Franco-Canadian association, and once again, companies that are operating in Canada and basically in Ontario.

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The last thing I want to mention about the trip was the facility it gave us to talk about tourism in Ontario, and I've already spoken to Mr Silipo about the benefits that we are giving, we think, to the tourism operators. We have a partnership with the private sector in both England and Germany, and it gave us the chance to meet with those people and tell them what we were doing in Ontario, but also to learn from them what people from those two countries are looking for.

We came away feeling that our money was well spent for those people to be marketing Ontario and trumpeting Ontario as a real place to come. The holidays they are providing through this partnership are fly-and-drive trips for people: fly to Toronto and then it's the centre of so much to do in Ontario, or fly and shop. Believe it or not, shopping in this city or any part of Ontario is cheap compared to Europe. When I was a graduate student in Europe in 1956, there were four Swiss francs to the dollar; now it's less than one. The same thing: If you wanted to buy it in Europe, you could probably buy it for at least half-price, high-quality stuff, the same thing you could buy here.

The trip afforded us the opportunity -- I know Mr Kwinter did much travelling when he was in this ministry selling Ontario, and I think it's very important that we get out and market our province and, as I said earlier, champion what we're good at and our abilities and our capabilities.

Mr Carr: One other --

The Chair: You've got about a minute more.

Mr Carr: That's not much time. This is a question you may not be able to answer anyway, because it's coming from the Minister of Finance and some of the initiatives in privatization. As you know, our whole agenda is to downsize the public sector while we upsize the private sector. That's what the whole tax cuts are about. As we downsize the public sector, there will be a tremendous opportunity for the private sector to get into some of the things that the public sector is now doing. I've heard Mike Harris say that the private sector does the job faster, better, cheaper and at no expense to the taxpayers.

Is Economic Development doing anything to encourage -- of course a plan isn't out for privatization, but the opportunities that will be out there in the private sector to take over doing some of the things that have been done in the public sector, have you got your mind around that?

Hon Mr Saunderson: Yes, we do. We're very conscious of trying to do things better outside government. We are working with Bell Canada on a reservation system for tourism and we feel they can do it cheaper and better than we can. We hope we will be able to announce an arrangement with them in the near future, where they will have spent a fair amount of money doing research so that they will provide a reservation system for anyone who dials a certain number -- it'll be an 800 number -- telling them what facility they might want to stay in at Niagara-on-the-Lake and what facilities are around there for tourism. That's just an example of what we're doing and it is a form of privatization, obviously. There are many more examples like this.

Mr Kwinter: I'd like to ask the minister a couple of questions. The minister takes great store in the fact that he's run a business, that he's a chartered accountant. I'd like to give him a hypothetical question and I hope he can answer it.

If you were approached by one of your clients who said: "I need your advice. I'm going to the bank. This is my business plan. The business plan shows that we've got long-term current liabilities of $100 billion. We expect over the next four years we will have increased those liabilities -- "

Hon Mr Saunderson: How much is that again?

Mr Kwinter: About $100 billion. "We will have increased our long-term liabilities over the next four years to maybe $120 billion, $130 billion. We won't have break-even until the year 2001, but we want to approach the bank to lend us another $5 billion so we can declare a dividend." What would your advice be?

Hon Mr Saunderson: I certainly recognize your client, or my client, if that's what you're giving us. It's a bit hypothetical. I don't know that you run governments quite like you run businesses per se.

Mr Kwinter: Oh, boy, I can't believe that. I can't believe that.

Hon Mr Saunderson: No, you don't.

Mr Kwinter: That is the hallmark of this government. They run it like a business.

Hon Mr Saunderson: I'm saying you don't run them quite the same. You might run it in a businesslike way, but it is very hard to turn a ship around, like this financial situation we have inherited here, within a very short period of time. It takes time. You have to use a gradual, sensible approach. But I would say to that client if they came to me and asked for some advice, "Make sure you have a climate that will allow you to attract new customers." That's what I think this phantom client you're talking about -- that's the best advice I could give them, "Make sure you have a climate that is going to attract new customers."

We're doing that. I don't think it's necessary for me to go into all the reasons and all the ways we're doing it, but if you build it, to coin an expression, they will come. So we're doing that. That would be a good answer and a bank would be receptive to that.

Mr Kwinter: I would love to see the banker who would give you the $5 billion.

Mr Preston: That's our problem. The bankers aren't going to give us that $5 billion because of the past record.

Mr Kwinter: Let's go to another area. I'd like to ask you a question. I apologize for not knowing exactly the responsibilities because there is an overlap and I haven't quite -- I understand it's in the casinos but I don't know whether or not -- there's certainly going to be an impact on your ministry. I don't know if you have any responsibility at all for VLTs. It's going to be in a Consumer and Commercial Relations issue, but certainly it's going to have an impact on what is happening.

In 1995, May 16, the then leader of the third party said, "A Harris government will not move on VLTs until all sectors have been consulted, all impacts are assessed and an agreement is reached on the distribution of revenues." This was a letter from Mike Harris to John Chalmers, the chairman of the Charitable Gaming Alliance, on May 16, 1995. On March 4, which was just last week, Mr Harris said in a letter to the Ontario Video Gambling Corp, "The province is considering allowing the terminals to be set up across the province."

My concern and my question is this: Except for the casino that's planned for the Lake Simcoe area which has a specific sort of target, and that is to help the native peoples, I would assume that over the next series of casino approvals, they will all be at border crossing points, because certainly the Windsor casino has shown -- I don't know the exact figure but I'm sure the deputy knows the figure to the number -- that somewhere around 80% of the people who frequent that casino are Americans or tourists from outside the country. I would assume that because of an announcement in Niagara Falls that you're looking at the same kind of proportions from Americans versus Canadians. I can understand that. That's a wonderful way to raise revenue with whatever social impact. At least 80% of them are going somewhere else to have that social impact. But where I have a concern is when you talk about VLTs, they are going across the province, they will be in every bar wherever the decision is made --

Hon Mr Saunderson: I think I should interrupt you right at the moment just to say that to date the decision of the government is that there will be no VLTs. We keep all the doors open, as I've said many times, but to date there's no different decision on VLTs, so just to save you on that.

Mr Kwinter: But I'm just quoting to you a letter from the Premier that said it is "considering allowing the terminals to be set up across the province." I'm not saying it's going to happen, but it isn't as if the Premier said, "I want to advise you that under no circumstances will VLTs be allowed in Ontario". He has said, "We are considering it," and he also said earlier in 1995 that before he made the decision there would be broad consultation.

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What I'm trying to elicit from you in the way of a response is that if -- and I know the decision hasn't been made -- that decision were to be made, we have a situation where the people who would be playing these VLTs, video lottery terminals, would not be contributing or gambling or playing bingo for charitable organizations and would not be providing the same kind of spinoff that you get from your casinos, where you have employment, you have tourism, you have all of the benefits that at least in your mind justify why you're doing it.

I'm just trying to determine from you as to: (a) whether the Premier's commitment in May 1995 that there would be consultation and assessment and the whole thing as to distribution has taken place, and (b) what impact you, as the minister who has some responsibility for casinos, are going to have on that. Surely, you're going to have some input into that decision.

Hon Mr Saunderson: Well, we do have the responsibility of the Ontario Casino Corp, so it's a big responsibility. As far as the VLTs are concerned, obviously the government's going to weigh all the factors, but right now I just have to say again that there are no VLTs on the horizon as far as I'm concerned.

To answer your other question about casinos, you know that we have a referendum idea, that there should be no more casinos until there's a province-wide referendum and then there would be local referenda after that. So that's really all I can say about casinos. I think we've stated our policy, and that's the situation at the present time.

I don't think you should make assumptions that there would be any particular place. The one in Niagara Falls is an experiment, obviously a big tourist area, so it gives us a chance to study how a casino would be run etc in a high tourist traffic area. That's one of the reasons why for the Niagara casino.

Mr Kwinter: Do you expect the Niagara casino is going to have a higher tourist ratio than Windsor?

Hon Mr Saunderson: I can't say, but it seems to me that it is a very big tourist area, and I think it is an entirely different area than Windsor. I would not call Windsor, much as I think the area is a very attractive one, a particularly big tourist area.

Also, Niagara Falls does represent the concept of a gateway development. As you know, there was a request for proposal from the previous government for proposals to build a gateway facility on the Canadian side of Niagara Falls. We discarded that request, and it's all being redone and rethought. But I think there are going to be great things happening in the Niagara region, which will be good for the whole community, which is already doing extremely well, obviously because of geography but also because of one of the great success stories in Ontario agriculture, and that's the wine industry.

For the benefit of those people who were wondering about what we found out in Europe, we're finding a great respect for our Canadian wine industry, particularly our ice wine, which certainly is winning medals, as is one of our Chardonnay wines. This is a great success story for that Niagara region, and I think this other development over there is going to help it.

I might say that I remember during the NAFTA debates there was a lot of concern about the grape industry in Niagara, but to give them their due, they certainly responded to free trade and have created one of our leading agricultural industries in Ontario and in Canada. So we should be proud of that region.

Mr Kwinter: Mr Minister, I want to go to a totally different area. You make a great thing about your international travel and your international activities. Could you give me a brief rundown as to the status of a couple of projects: (1) the Jiangsu-Ontario Science and Technology Centre, what is happening there, what the involvement is; (2) could you tell me what you as the minister and what the province are doing in the so-called Four Motors of Europe: Baden-Württemberg, Rhône-Alpes, Catalonia and Lombardy.

Hon Mr Saunderson: The Jiangsu project: I was supposed to be visiting that area. I'm very familiar with what it is and I think it makes excellent sense. I was unable to attend because of the requirements to be here for government in November, but I think Sandra McInnis is here. She's from our area, and I would like to call on her maybe to bring you up to date on that.

The Chair: Could you come forward and just state your name and your position.

Ms Sandra McInnis: Sandra McInnis from the Ontario International Trade Corp.

On the Jiangsu centre, we are continuing to work with them. We have a joint agreement for science and technology and we've had numerous joint marketing initiatives with them, both in terms of bringing over a lot of government officials in terms of training them on some of our educational systems and from a technology standpoint. It is really our entranceway into China and we look forward to working with them on a longer basis in terms of expanding our trade into China. They've been very cooperative. We have twinned. We have a twinning with Jiangsu and it is the 10-year anniversary of that. It is a very important partnership that we have with them.

Hon Mr Saunderson: Indeed, I think Mr Crispino from our ministry was there in my stead in November.

Ms McInnis: Yes, he was. In June, I also visited the Jiangsu centre. We have a regional director who is responsible for ensuring that we maximize that opportunity of the Jiangsu centre, which I think in the past has not really been maximized, but definitely it is a key gateway to that China market.

Hon Mr Saunderson: As far as the Four Motors are concerned, Sandra could also speak to those. I might say that when I was in Europe, Mr Kwinter, that subject was raised. I think those four regions have calmed down a bit on the thrust that originally was thought about for those regions. Does Sandra want to speak?

Ms Wolfson: As a matter of fact, Minister, the office person responsible for the Four Motors is not here, but we'd be delighted to provide you with a status report on that after these hearings.

Mr Kwinter: What I'd also like, if you could, is not only a status report; I'd like to know of any tangible results that have come out of particularly the Jiangsu-Ontario Science and Technology Centre, tangible results for Ontario, and tangible results from Rhône-Alpes, Lombardy, Catalonia and Baden-Württenberg.

Ms Wolfson: I might, if you'll just give me a moment, ask our assistant deputy minister, Peter Sadlier-Brown, whether we have those responses to Mr Kwinter here or we can provide them at a later date.

Interjection.

Ms Wolfson: At a later date, Mr Kwinter, we'll provide those to you.

The Chair: You've got two minutes.

Mr Kwinter: Well, the last question -- I don't think it will take two minutes. If you recall my first referral, in my first discussion after you had made your presentation, if the Ford Motor situation that I described presented itself to you today, would you tell them to take a hike or would you in fact sit down and say, "Sure, we will work something out because we think it's important to the development of the automotive sector"?

Hon Mr Saunderson: Certainly we would not say, "Take a hike." We would work with them to see what we could do to satisfy them. I feel very strongly, after having spoken in Davos to the chief of Ford, that we are doing the things they like in this province. I don't think financial assistance is as important as some might think it is, because of the 12 items I was referring to about what firms look to from government, nowhere in that article was financial assistance mentioned.

What we would like to do is say to them, "Can we help you on training? Is there something that needs to be cleared up as far as bureaucracy or red tape is concerned?" and that type of thing. I think if we provide the atmosphere, we would be a help to them, and I think it was confirmed when we spoke to Ford in Davos, as I mentioned. I guess that's all I want to say about that.

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The Acting Chair (Mr Gary Carr): There are still a few minutes.

Mr Kwinter: You touch on a very important point. The amount of money that went to Ford went for two purposes only, not to give Ford money. It wasn't as if they were out there trying to shop around and see where they could get the best deal. In order for them to compete with the facility in St Louis, Missouri, they had to be on a level playing field as far as infrastructure and as far as training. The amount of money that was provided by the government was to do that. It wasn't to give it to Ford so they could then put it in the bank and say, "Well, we just got $100 million out of Ontario." It was to allow them to be competitive with a sister jurisdiction.

You have said that if they came to you and said, "We want some help with training" -- the point is there's a dollar figure attached to that help. You can't just say, "Here are some manuals; go out and give them to your people and see if they can figure them out." There is a dollar cost. All I'm trying to determine is, is it the present policy of this government to provide any kind of help in the way of funds for things like training, for infrastructure, that will in fact attract add-on investment or new investment?

Hon Mr Saunderson: First of all, if Ford came to us and said they needed funds, I'd have to say to them, "How can we give you funds, whether it's loans or whatever, when we are in the midst of trying to get our financial situation changed?" If you're cutting back people's welfare by 21.6%, I don't think it would be possible to even contemplate giving a company like that money. I think it's wrong.

I think times have changed from what you're saying about competitive jurisdictions. I think those competitive jurisdictions that you're referring to in the States are some day going to almost bankrupt themselves if they keep on offering, say, no real estate taxes for five years. If they do that enough, they will deprive themselves of so much revenue that this, I think, is gradually now becoming a thing of the past.

I know there are instances. Somebody I think got their Mercedes-Benz operation and they paid between $100,000 and $200,000 per job to get that business. We couldn't justify that here. We would work with them, though. We would talk about training, as I've mentioned to you. There's the fact that hydro rates can be negotiated now, which they couldn't be before; they were always going up. I think there's a lot that we're doing in Ontario now that makes it a very attractive place, and I don't think you need to give large amounts of money out. I think those days are slowly coming to an end with jurisdictions in the United States. My feeling is they just cannot keep them up.

The Acting Chair: I'm afraid we must move on.

Mr Silipo: Minister, you mentioned in your opening statement some of the changes you've made and are making in terms of how the ministry itself is structured. I would just appreciate receiving, as soon as you're able to provide it to us, an organizational chart. The last one I have is the one that was sent with the estimates book, and you clearly have made some changes from that. I had asked prior to today to get a copy of that and was told that this was still the current chart. Clearly from what you've said, that's either changed or in the process of changing. I'd just appreciate getting an up-to-date chart if I could.

Hon Mr Saunderson: We will have that for you very shortly.

Mr Silipo: Thank you. The other thing that I would appreciate getting as part of that is whatever statistics you're able to share with us in terms of what that means, in terms of the number of people within the ministry at the various levels, the budget to run the ministry, both internal in terms on running the ministry itself and what that has meant or will mean in terms of some of the other items. I know I can deduce some of those from some of the cuts that you've made in areas where there were large chunks of money like JOCA, for example, and others. But I would appreciate getting an update of that in terms of where you see what the ministry's current budget is and how that's apportioned in the various areas. Presumably that's something that you could also through your officials provide to us.

Hon Mr Saunderson: This will be made available later, Mr Silipo. I wouldn't want to do that now. We are obviously in the decision-making process of, for lack of a better term, downsizing. We haven't got all our final decisions made. We will get that to you, though, in due course.

Mr Silipo: I appreciate that. I'm not trying to get information that isn't available publicly, but I would be interested in receiving whatever information is in the public realm and making sure that gets to me as one of the critics.

Hon Mr Saunderson: We'll do that.

Mr Silipo: The other thing that I'd be interested in getting is some information -- and I want to preface this request with a very clear statement. As you talked here today about the kind of travel you've been doing as minister, I want to be clear to you in my position that I think that's a good thing. In terms of there being a presence by Ontario through political presence, as well as whatever can be done on the business side, in jurisdictions outside of North America, I think that is actually very good. It's certainly something I supported when we were the government and certainly something I continue to support within your government.

I wanted to make that statement so that my request doesn't seem like I'm simply fishing for information in the usual kind of way of sort of trying to get at the kind of moneys that ministers are spending. But I would be interested because it seems to me you're putting more emphasis, if I can deduce that -- and if I'm wrong in that, please tell me -- on that kind of approach.

I would be interested in getting some numbers in terms of, for example, amounts of money that have been spent, either through your office or through the ministry in terms of officials travelling abroad. For example, I can list the number of examples that would involve both you and the Premier -- you mentioned Davos, Switzerland, as being one -- the costs of the Premier and staff for the current Asian trade mission, as well as any of the other instances that would give me a flavour of the kind of time and the kind of public funds that you, as minister, are spending in this area.

I'm interested in terms of being able to see how that reflects the kind of, what I see, emphasis you're putting on that -- an emphasis with which I don't necessarily disagree. So I just want to flag that for you and just ask if you could provide that information to me at your earliest convenience.

Hon Mr Saunderson: We will provide you with that information. I don't think we're putting more emphasis than other previous ministers or governments have put on this. I think you should be gratified to learn about our business ambassadors program which you will have a chance to learn about in the fullness of time. But if we can get those individuals, who will be highly respected people in their communities, out talking about Ontario, I think this is a very good way to get quality salesmanship about Ontario, and I'm looking forward to being able to give you details on that.

Mr Silipo: I look forward to that information. Whether it's in the area of trade or in the area of tourism, which is partly one and the same, I strongly believe there is a lot more we could all be doing and I encourage you in those endeavours. In terms of the area of tourism, there's a whole market overseas that I think we could be doing a lot more to try to garner, so you'll get nothing but support from me. At the same time as you'll get criticism from me in terms of the that you're making to tourism, you'll still get support for any of those endeavours that increase the marketing of tourism and trade in general around the world, because we have nothing but pride for the things we have been doing -- as I said earlier, things that have been in the works and have been developed by previous governments, as I hope you will acknowledge, as well as initiatives taken by your own government.

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Hon Mr Saunderson: I appreciate your encouragement on that. I would say just a word about the Davos meeting, the World Economic Forum, which has now been happening for some few years. I know Mr Kwinter's been there, I know Ms Lankin was there, as well and your Premier. It's a very excellent way to network, and you will find people at this event that you will not have a chance to probably meet with over any time period -- I used the example of the Ford situation, but there were other ones as well -- and also to know and learn what's going on in the world, to see how we rank, and is our thinking somewhat compatible with what the rest of the world is thinking. I thought it was, by the way, just for your information. It's such a small world, and from an economic point of view, it's a global village and everybody's out there being very competitive. I think if you learn nothing else from a meeting such as this, if you learn two or three major thrusts of what's going on in the world, then they're worthwhile, and I think it's a good chance to use or build up some influence as far as Ontario is concerned.

I was impressed, by the way, to see the number of Ontario business and other type of leaders. I could cite Maurice Strong as an example of people whom the rest of the world is listening to, and I think it's a source of pride for Ontarians, regardless of political stripe. I know that your Premier and the Premier before that were well received, just as Mr Harris was when we were there. I think people want to learn about what's going on over here, and these are useful things.

Mr Silipo: I appreciate that there are in fact some areas that we do agree on. There still remain some important areas where we do disagree, and I, unfortunately, need to come back to those, Minister.

Hon Mr Saunderson: I didn't expect it would be that easy.

Mr Silipo: I'm not so sure that it's easy or hard, but I think this is one of the better chances that we get to exchange our respective points of view on these important issues.

Coming back broadly to the issue of jobs, as I said before, I'm happy to see you've acknowledged that as being the number one priority -- I think you put it as "the top priority," and I couldn't agree more with you on that point -- but I want to discuss a little bit further this question of the role of government. I appreciate that you and I fundamentally disagree on at least one important aspect of that around the role government should have in helping to bring jobs to Ontario and how we go about doing that, but it strikes me that your approach and that of your government is, I would argue, out of kilter with that of other governments, even governments of a conservative ideology.

I want to use one example as a way of getting your response. When I look at some of the cuts you've made, and I understand your point of saying you don't want to give one business a competitive advantage over another, but when for the sake of a $3-million investment you have a company like Seragen Biopharmaceutical decide instead of opening its doors here in Ontario to go to Quebec and do that, a company that would have invested between $28 million and $33 million, created over 100 well-paying jobs, I just find that a little hard to understand, especially when there had been clearly a commitment made by in this case our government. Regardless of how that had been done, I just find it hard to understand why that approach. It doesn't make sense. When governments across the globe are doing exactly that type of thing daily and when indeed in this case we saw us lose what would have been a significant company in a significant area of growth, as far as an industry's concerned, deciding to go across the provincial border to another province because that government there believed and still believes that providing some direct investment in that company to help it get started was actually sensible, why does that make sense, Minister?

Hon Mr Saunderson: I know the company to which you refer. As you know, I saw them, and contrary to what some people say went on -- we had witnesses there enough to confirm what I said -- I said I was disappointed that they would feel as they do when we are trying to create a business atmosphere and, apart from just an atmosphere, certain pieces of legislation that were going to make it a lot more attractive for businesses to stay. I felt that they should have the confidence in what we said we would do and indeed, as I have said repeatedly today, we're doing it.

But they were not a huge, big company, as you know. Therefore, for us to take the employee health tax on the first $400,000 of payroll was a big help to them and also the personal tax rates I think might have made a big difference, and if they have indeed, if you're saying they have gone to Quebec --

Mr Silipo: That's my understanding.

Hon Mr Saunderson: Yes. I'm just saying if they have, there is a very high personal rate down there. But to really get our house in order, we had to freeze all financial assistance, as I have said. Sometimes it's not nice to have to say no, but in this case I think it was a principle. I think we were creating an environment for a company like that, and I said that to them. I was disappointed they were going to leave, because for all the reasons I've given today, whether it's freezing hydro rates or reducing workers' comp premiums, all of those things make it certainly the right thing to have said.

Also with going to Quebec, I think Quebec itself is going to find that it has to -- and it has committed to getting its fiscal house in order. They will, I think we'll see, join us in the struggle to get their fiscal house in order and they may not be able to continue to do these things. I think maybe these things are going as a way of the past.

Mr Silipo: Maybe they are. I could cite a number of other examples, but I chose that as one of the most obvious ones. Just to pick another one out of the list, Chateau des Charmes, you talked earlier about the importance of the wine industry, and again I couldn't agree with you more. A $400,000 grant for equipment purchase, the cutting of that grant: The reaction that I've been told from the company was a catastrophic impact, severe consequences. And I could go down the list.

The point I'm making, Minister, is that there are times when it does make sense for government strategically to make some investment decisions of this type because the payoff far surpasses the initial investment. I don't expect to convince you of that today, but I do think that just on the fiscal side, on the economic side there is merit to that approach. It's been shown and it continues to be shown today by governments of all political stripes, and I just find it incredible that as a government you would take the position that there should be completely no involvement by the government in that area.

Hon Mr Saunderson: I have taken a very extensive drive or trip, if you wish to call it that, to the Niagara Peninsula to look at the wine industry. I happen to like the product, but that's not why I went. But I have to say that I went around to those businesses, because that's what they are -- and they're small businesses, they really are. A lot of what they produce is sold right there at the door, as you'll find in any wine-producing region, and much of what they produce does not make it to the shelves of a liquor store, if they can find one.

I think what we have to do with this is look for a better way to make business strong, and you make business strong by providing a proper atmosphere for it to operate in. I know Chateau des Charmes quite well. There's another winery down there that had also made application. But I don't believe they're going to leave because I believe they --

Mr Silipo: I'm not saying they're going to leave. I'm not suggesting they're going to leave.

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Hon Mr Saunderson: No. I think, though, that if we start doing that with companies that have the best of intentions and serious needs, we will be opening a Pandora's box, as we did before. You know, over the last few years the development corporations were booking business at the rate of about $30 million a year, and they were writing off about $22 million a year. Now, those are not good figures if you're at all interested in business. Granted the $22 million in write-offs is for businesses that were helped a few years ago. But no government can sustain that type of cash loss. I hope, if we do nothing else in five years of our government, and hopefully we'll be there for more than that, but in this first five years of our presence in Ontario government I hope we will have sent that message that government can't do it for the private sector. It's the private sector that has to do it for itself.

When I say they can't do it, I'm talking about money. Yes, we can help produce the proper climate for them to thrive, but we cannot get into being a banker. I'm pleased to say, on the subject of the banks and other financial institutions, that there's a recognition by those institutions of what we're trying to achieve in this province. I have spoken in private with the CEOs; I'm in the process of seeing them all and I've seen some already. They appreciate the climate we're producing for them to do better as far as they're concerned and they're willing to be much more thoughtful in trying to help the small and medium-sized businesses. But we have been the lender of last resort for such a long time, and as I said earlier, the lender of last resort usually gets the worst deals. That's a general statement; of course there are exceptions to every rule. But I can tell you that the climate that's being produced in this province and the reputation the government is getting are such that the small and medium-sized businesses are not looking to us now. I can tell you they are going to the normal sources of business capital.

Mr Silipo: I'm sorry; I'm going to interrupt because the Chair is indicating that time is running out. There is a little bit of a contradiction, you'll have to admit, in the approach that you're taking. You've continued to talk about the need for a positive business climate, but you yourself earlier, in talking about de Havilland, said it's a company that you foresee will be profitable. Well, that company wouldn't have existed -- I hope you'll at least admit this -- if the previous government hadn't stepped in and -- not by itself but together with everyone else -- addressed the issues and solved the problem of getting the company through a difficult period. From that, I would say to you there clearly has to be a time where, either in the area of helping to save jobs or in the area of helping to create jobs, the role of the government surely has to go beyond simply creating a positive climate through whatever tax changes you bring about and in fact be prepared to intervene in a more direct fashion.

The Chair: Very quickly, Mr Minister.

Hon Mr Saunderson: I understand what you're saying about de Havilland. I think that company was salvageable, if that's the right word, without the government having to put money into that.

Mr Silipo: Nobody else wanted to do it.

Hon Mr Saunderson: I look on --

The Chair: Thank you very much. Mr Rollins.

Mr Rollins: Thanks, Mr Minister, for coming before us today. Following along your line of thinking, in our little area down in Quinte we have Domtar spending $700 million on an expansion down there. They announced it early this year, with the kind of numbers they are going to produce, and we as a government haven't had to step in and bankroll them or make anything any better for them, other than that they know that there's a climate that's ready to do business in.

We've got a boat-building company. When you think of a boat-building company, why should that end up at Point Anne, where it was a cement company, but we've got the privilege of building Maid of the Mist number seven. It's a million-dollar contract. It's not hundreds and hundreds of jobs, but it is four or five jobs for a year and a half or two for them to make that kind of a boat. We've got two large retail stores come down there and the government hasn't been involved.

I encourage you, Mr Minister, to look into one of the headlines and the stories of the Martin budget in the last day or two, that there's going to be a surplus at the end of this year of some $5 billion in UI benefits -- a surplus -- and it'll generate another $5 billion next year. I think we as a government should encourage our federal government to decrease those costs, to put UI premiums down lower so it does give us a better advantage in Ontario to keep on doing our thing of lowering the cost of providing that kind of labour.

I don't know whether you've seen that issue in the paper or not, but it's something that the University of Toronto suggested could create 200,000 new jobs if they would reduce that unemployment insurance to $2.10 per $100 from the regular $2.95. Those are the kinds of things where we as a government need to continue to keep the cost of doing business down. That's the kind of atmosphere that I'm awfully glad to be part of this government in trying to do that.

Hon Mr Saunderson: That's the message we're hearing, just as you're hearing from your companies in your riding, that it's the business climate. It just gets abroad. It blows up in the air and it goes around. People sniff and they say, "This where we want to be."

I want to follow up on your question and talk about an article in, believe it or not, the Toronto Star, which said, "Be Tough, Martin Told." It does go on to talk about the success of provinces which have achieved a balanced budget or are on the way to getting one, what's happening there. I was amused by the talk of Premier Savage of Nova Scotia when he pointed to the steps of the Nova Scotia Legislature and said, "It was on those steps that I was pelted with eggs and shouted down by rowdy crowds of civil servants just two years ago." It went on to say all the things that he had been doing, very much like what we're doing here in Ontario. But he now says that he looks forward to meeting with the credit raters and potential investors because Nova Scotia will have a balanced budget in 1996-97. It's being repeated province by province across this country, and if we did not get on board and be part of that, we would be left out in the cold. So that's why companies like Domtar and the boat builder are doing what they're doing in your riding.

I was up in Owen Sound just a few weeks ago, speaking at a service club and on the radio station. After that, I had a chance to go out and tour two plants, and it's just like what you're telling me. I went to the Pittsburgh Plate Glass, PPG as it's known. They have decided to stay in Ontario. They were thinking of going, but they've made a decision to stay now and start producing auto glass. They were on the verge of closing there and leaving. They're staying.

I went to a boat builder, and he's never had such success. He bought out a bankrupt company and has turned it around. He likes the climate that's here in Ontario. He figures there'll be more people to buy boats, so he stayed and kept that business going. I think it's being repeated around the province.

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Mr Preston: That Star, is that a local paper?

Hon Mr Saunderson: That's right, it is a local paper here.

Mr Preston: Oh, I never read it.

Mr Spina: It's a local paper for some people, thank goodness, and not beyond Toronto.

Minister, I wanted to ask you a question that really zeroes in very much on your background and your knowledge of the financial industry. When Mr Barnes's report was turned in, there was a section there on access to capital, and I'll quote Peter's lines here: "Government cannot provide access" -- this is the private sector's role -- "but it can deal with situations in which policies and programs distort the functioning of capital markets and create uneven playing fields."

With the federal government being pushed by the major banks to expand their powers -- they've already been given permission to get into insurance; they've been pushing hard to get into car leasing -- I guess my question has to do, again, with the access to capital, particularly for small business, which should be the heart of this province but has had its squeezes in the last few years. Are there some initiatives that we can develop that would allow other banks, other financial institutions, other investment bodies or funds to expand their lending powers so that we can get this kind of access for small businesses?

Hon Mr Saunderson: We need to encourage a number of things to happen. I've reported, Mr Spina, today about meeting with the chartered bank CEOs. I'm in the process of doing that, and also, I might say, with the Canadian Bankers Association, that group. They are very much aware of what we are doing in the way we're cutting back, the way we are basically eliminating grants etc to business. The problem is access to capital. What can we do?

Yes, you can go and you can jawbone with the banks, and I think we're coming along in that area. Each of the major chartered banks -- I should just say each of the chartered banks; we've got basically the big seven in Canada -- is certainly diverting some money into small and medium-sized business pools. There's no doubt about that. I think the Bank of Montreal was written up in the Financial Post this week and the Royal Bank last week. It is happening.

There are these labour-sponsored RRSP venture funds, and as a matter of fact in the budget that Mr Martin has just brought out, there has been some reduction as to how much people can invest and what those funds must do. Those funds, I think, have been sitting with investor capital but they have not been doing what they said they were going to do, and that is to provide some venture funds. They're more concerned with rates of return. In the RRSP season, we all know how many times we hear ads about, "This fund had this rate of return" etc. These funds that I'm talking about have taken the money that's been invested by investors and made some very safe investments, like treasury bills. They're not fulfilling their responsibility by doing that.

I think one of the advantages particularly of Japanese investors historically is that they've always been willing to take a long look at something and put their money out and not be in any hurry for an immediate payoff. I think if we can encourage these labour-sponsored funds to take a longer look at things, then we will get a source of capital from them as well, and much more so than has happened to date. Our trust companies, I think, if they were able to be in business loans, they'd be there in a big way, if they could. And of course in our own ministry, for small and medium-sized business, we have the OIPS program, which you're aware of, and we would like to help those small businesses in our program to deal with the banks and other financial institutions.

I think one of the big problems for a small or medium-sized business getting off the ground is that they sometimes do not prepare a proper financial statement, and that's the first thing the bank will say, "Well, what is your business plan?" If you can't write a business plan, then you're in trouble. So we can help in our ministry with writing up a proper business plan, giving guidance, helping a proper financial plan to be constructed, and then once successful helping those companies with an export plan -- because we have lots of experience, as we talked about exports earlier today, in this province and in this country -- and on a marketing plan as well.

I know you've been out, as a very able parliamentary assistant, looking after the needs of small business and responding to their concerns. You are probably telling them we are there to help them do all of this. We have the skills in the ministry, and instead of granting loans or whatever, we would much rather be purveyors of good advice and work along with them through the system.

I hope that explains what we're trying to do and how we're working with the institutions.

The Chair: We'll move on, if you want.

Mr Preston: How much time have we got?

The Chair: You have about five or six minutes. Again, you could give me the time and I would cast it back for closing off later on at 6 o'clock.

Mr Preston: I asked you that before. You got it.

The Chair: Thanks. But let me just make it plain what happened here. The six minutes he has given me, we shall end just before 6 o'clock, so you also have your 20 minutes. In other words, you may begin now for your 20 minutes.

Mr Silipo: Not 20 minutes, though.

The Chair: No, no, 20 minutes and --

Interjection: Two 10s.

The Chair: Yes.

Mr Preston: That's the rotation. We're finished.

Mr Kwinter: Oh, I see.

I'd like to make a comment and then I'd like to ask the minister a question. The comment that I'd like to make is, I've heard several people at this committee extol the virtues of the Niagara Peninsula and the wine industry there. I should tell you that in 1985, 1987 -- and I'm not trying to brag because I happened to be the minister, but I happened to be the minister at the time.

Hon Mr Saunderson: There's no avoiding it.

Mr Kwinter: There is no avoiding it.

Mr Preston: Stand and take the blame.

Mr Kwinter: No, I'm serious. If we had not provided the funding to convert the labrusca grapes to the vinifera and varietal grapes and to provide the kind of program that we did, that industry would be gone. Now, that isn't just my opinion. If you talk to any independent observer, if you talk to the people in the industry, had the government not come in and been able to fund that conversion program -- I'm sure you know that the reputation of Ontario wines prior to the changeover was that we were producing plonk, and people were not buying it and they would be almost insulted to serve Ontario wines to their guests when they could go to the liquor store and buy some cheap Italian wine or cheap French wine.

Mr Spina: I'm glad you didn't say cheap Italian wine.

Mr Kwinter: No, no. I'm not in any way denigrating the Italian wine.

Mr Preston: "Inexpensive."

Mr Kwinter: Inexpensive, right. They'd rather pay $2 or $3 more and have the prestige of saying, "This is an Italian wine," or "This is a Spanish" or French wine. We now have the situation where, to use a hackneyed phrase, there are world-class wines coming out of the Niagara Peninsula. They're going to international competitions, they're winning best of show awards, and we have converted an industry that had the reputation for poor quality, poor taste, to one that has a very good reputation.

Mr Preston: The minister and I both thank you for that.

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Mr Kwinter: I say to you, that would not have happened without government intervention. It just wouldn't have happened. The money was not there in the private sector, it wasn't available, and that whole program, with the vintages program and everything else and the quality control and all of that, was all financed under an assistance program that had to be negotiated with a great deal of difficulty. Many of the public servants who are in this room participated in that particular exercise, and I can say that that is one of the real success stories.

Okay, now I'd like to ask the minister --

Hon Mr Saunderson: If I could just comment on that, though, I realize that it is a success story, and if you had some part in it, then I congratulate you on that, but I think, to be factual here, there was also money made available because of the free trade agreement to help these certain industries that were in a transition. I thought that was also a combination of various government levels, but that's just for comment.

Mr Kwinter: But that begs the question, and I ask you now, if there was another trade agreement and there had to be an adjustment, would the government be there to help?

Hon Mr Saunderson: I think we'd have to think about any new situation like that. A free trade agreement is a very encompassing type of agreement which involves various levels of government and many governments around the -- well, obviously, in North America, that one did. So we would consider that. We would certainly have to think about that.

Mr Kwinter: Mr Minister, I'd like to go to another topic that's dear to my heart. I'm sure you know that at one time, given the fact that Ontario is one of the most trade-reliant jurisdictions in the world, where fully one third of our gross domestic product is as a result of trade, at its height, we had an office in New York, Boston, Chicago, Dallas, Los Angeles and Atlanta. We had one in London, England; two in Germany, one in Stuttgart, one in Frankfurt; we had one in Milan; we had one in New Delhi; we had --

Hon Mr Saunderson: Seventeen.

Mr Kwinter: I guess you could call it an office that was a trade office, although it was kind of marginal, in Nanjing. We had an office in Tokyo; Seoul, Korea; Singapore; Hong Kong. They were all closed. I have no quarrel with the closing of some of them. I think some of them were marginal operations and I think the cost-effectiveness of them was really suspect. But I want to ask you a question in the context of the business approach that this government is taking.

If you were a business, a Canadian business, and you found that fully 80% of the one third of your trade business was in a jurisdiction -- let's say you were selling whatever, you were selling widgets, and of all of your export trade, which was substantial, huge, 80% of it was in a market, do you think you could effectively canvass that market by closing down all of your branch offices in that market? Can you think of any company that would be in business that would say, "Here is our largest market, but we don't want any representation in it"? I'm just talking about the US market because it's such a dominant sector of our trade. Could you respond to that? Then I'd like to carry on past it.

Hon Mr Saunderson: Well, there were 17 of those offices -- I think that's the number -- and they were in those places. You've got a good memory for those spots.

Mr Kwinter: That's because I've been there.

Hon Mr Saunderson: I know. I said you travelled a lot.

I have to tell you that I think it was right that the offices were closed. I've done a little research into this whole business of governments and subgovernments having offices, but particularly subgovernments, because governments, as we know, have embassies. Subgovernments are moving out of this area. There are some of the United States' states doing it still. I think Alberta and Quebec still do it as far as Canadian subgovernments are concerned. But generally speaking, it's an era which is sort of coming to an end, and I think it's coming to an end because of the new communications systems.

We are going to be announcing, when the world comes back to normal around here, a World Wide Web site which is very interactive. Because of the explosion of Internet systems and facilities on which to receive it and dial into it, we are going to be telling a lot about Ontario on that Internet, whether it's tourism or industry or whatever. Therefore, I think with the high technology that we've got -- and it changes every day, almost, the high technology -- we've got another way to sell ourselves, apart from having people representing us there in those countries.

We have worked very well with the federal government. I refer to it working with former Senator Royce Frith, who represents us in London. It's the same no matter where you go with consuls general in the United States or around the world. I was so well received, as I know you have been when you've travelled, by our federal people. I think really we can work very closely with them, and as a matter of fact, they want us to use them, because they actually have Ontario desks or other provincial desks working with them. So I think we are on the right track and we will use them more and we will work with them, and I think that will keep them happy.

The other thing I wanted to mention, Mr Kwinter, was the business ambassadors again. I want to mention it as often as I can, because I'm very enthusiastic about it. I think with them and with the federal government and with the communications systems available to us, we will be able to overcome the fact that those offices were closed by the previous government. It is a global village we live in, and I guess not a week goes by when I'm not having some visiting dignitary from another country come to our ministry. That works two ways. They come and tell us that they're here and they tell us a little bit about themselves. We also are able to talk about ourselves, and it's amazing, sometimes, the common interests that come out of discussions like that.

So I don't think we would be opening those offices again.

Mr Kwinter: I was not suggesting that they should be opened again in their entirety. What my concern is is when you talk about your business ambassadors, when you talk about these people who come in to see you in your office -- I've lived through that -- they come in, there's an exchange of pleasantries, you shake hands, you exchange gifts and goodbye, let's get the next guy in.

Hon Mr Saunderson: That was your style.

Mr Kwinter: No, that's their style. They have a list. They're making a courtesy call, and there's no secret that's what they call it; it's a courtesy call. They're coming in to just, "Courtesy, we're here."

What I am concerned about is the fact that this program -- and I attended the previous government's unveiling of what I considered to be just a new logo. It didn't do much else. My concern is that it is reactive as opposed to proactive. It's like looking in the newspaper for a job. The best jobs are never advertised. The best jobs, the best opportunities, the best trade opportunities, are not out there waiting for you to go and get them.

You send your business ambassador, who's on his own private business, and you say, "When you're there, would you please go and see this particular person?" It's going to give you bragging rights. You're going to be able to stand there and say: "Look at all these things we've done. We've sent this fellow here and that fellow there." He's got his own business to worry about and he said, "Sure, I'll go in and I'll see what I can do."

But I can tell you from experience that when you have people on the ground and you have people networking, where they're meeting people, they're going out and they hear about things that you normally don't hear about. They hear about someone saying, "I know that such and such is happening," and you can go out and actually try to make it happen. If all you're doing is responding or hoping you're going to catch somebody surfing on the Internet who is going to suddenly say: "Gee, that sounds interesting. I'm going to get in touch with Ontario" -- and I'm not advocating it around the world. I don't think that is necessary, because I don't think a lot of those jurisdictions will respond.

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But given the key US market, if you get a 2% or a 1% increase in the US market, it is a huge number. If you get 100% increase in the Singapore market, it's a zero number practically because there isn't that much activity going on. All I'm saying is that it would seem to me that for our largest market -- we used to have a standard saying, "If you want to get your BA in trade, you go to the United States. If you want to get your MA in trade, you go to Europe. If you want your PhD, you go to the Far East." The reason for that is because it is very difficult to access those markets.

The US market is easy for Ontario businessmen. The language is the same, the culture is the same, you can hop on a plane and be there in no time at all. It is very, very easy to do. I just feel that we are missing a wonderful opportunity to expand our trade connections. Personally, it's great that we're doing it, but when you take a look at the trade figures, the auto sector dominates dramatically and a lot of the other sectors are available to us, and I don't really feel we are putting enough effort to access those other markets.

Hon Mr Saunderson: I couldn't agree with you more that the US market is very important. We talked about the 120-million-people market one day away from us here. Sure, we're always trying to be creative in thinking about new ways.

I want to mention just one thing that makes Ontario very special, being close to the United States, particularly for companies outside North America who are looking at where to settle. We are a metric country; the United States is not. When people want to set up as an entry into the North American free trade area, they're looking more and more at Canadian provinces, and because of our excellent location, they're looking at Ontario. They are coming to realize we are a metric province, a metric area. They do not have to recalibrate machines when they come to Ontario. They can directly import their own machinery, and that makes us have a big advantage. I wanted to make mention of that today because it's something we can really sell, and it helps us attract business here which will then deal into the United States with finished products.

We have been assigned the responsibility in this ministry to be the chief marketing facility for this government, and of course our chief marketer is our Premier. He's very good at it. Next in line are any of our elected MPPs, and obviously I'm involved. But everyone, I think, has to be a marketer for Ontario regardless of political party or stripe. If we all go out and market our province as a good place in which to do business, in which to invest and in which to travel, we all win. But we are going to come up with -- and we are working on it now -- a proper marketing plan. We will do it and I'm sure we will be successful, but we will never suffer from being told we're not proactive.

The Chair: Mr Minister, Mr Silipo would like a quick one so we could wrap up.

Mr Silipo: A quick one? Well, Mr Chair, I'd like the time. You let Mr Kwinter go on for 15 minutes.

Hon Mr Saunderson: We've got 5:54.

The Chair: Do you have a quick question?

Mr Silipo: I have a couple of questions.

The Chair: A quick one?

Mr Silipo: What do you mean, a quick one?

Mr Rollins: It's over.

The Chair: Just about. Mr Kwinter is going to give you his couple of minutes.

Mr Silipo: Well, I'm sorry. That's why I made the point earlier. I thought whatever time was left would be split three ways. That's normally the way it's done in committee. Why does the opposition party get more time?

The Chair: No, they get 20 minutes. It's a rotation.

Mr Silipo: Yes, but he started the rotation.

The Chair: It doesn't matter. It's 20 minutes rotation.

Mr Silipo: No, no, no. That was when there was enough time, Mr Chair, to get 20 minutes apiece. When we came back to the last rotation and there was only about half an hour left in total, my understanding was -- that's why I kept looking at you when it got to 10 minutes, because I thought you were going to stop Mr Kwinter at that point and give me a chance to get a few more questions in.

The Chair: I think you have it wrong.

Mr Silipo: With all due respect --

The Chair: The fact is that they had 20 minutes and they gave up 10 of their minutes because of the --

Mr Silipo: Right, and I thought what you were looking at was to basically finish 10 minutes earlier.

The Chair: No. I said Mr Kwinter would do his 20 minutes and then at that time we'd wrap up.

Mr Silipo: I'm sorry, but that's not a very impartial way to chair a meeting, with all due respect, sir. The point is you're supposed to give equal time to the opposition parties, and the government side if they want to use their time. If they don't want to use their time, that's fine; you can take that time off the total. I'm not arguing that we should get their time. But I'm sorry, I have some questions and I'd like you to let me put them.

The Chair: I'll give you five minutes because all they gave up was 10.

Mr Silipo: You gave the time to Mr Kwinter. I don't want to argue with you for 10 minutes. I'll try and do it in five minutes to accommodate people, given that it's late on a Friday afternoon, but I think you should review the way you do this in future, sir, because I think this is wrong.

The Chair: You've got five minutes, Mr Silipo.

Mr Silipo: Minister, let me come back to the question of jobs. Your government has committed itself to create 725,000 jobs. How close to that objective do you think you're going to get through the mandate of your government?

Hon Mr Saunderson: First of all, I'd like to say that when you create a climate -- and we've talked a lot about that today -- you create a snowball effect, and that's what's going to happen. In Ontario, in February, employment rose by 31,000 jobs, and there were 3,000 jobs in January, and a 6,000-job gain in December. Adding it all up comes to 40,000 jobs in that period. Year-over-year change, this time of the year compared to last year at this time, since then the private sector has created 85,000 jobs in Ontario, manufacturing created 18,000 jobs, the public sector declined by 43,000, so there's a net gain of 42,000. Obviously, we are moving ahead.

Mr Silipo: Will you get to the 725,000 jobs, Minister?

Mr Rollins: Within the five years.

Mr Silipo: I'm talking about the five years.

Hon Mr Saunderson: I think we should be able to achieve that. Getting back to the climate theory and private sector confidence and all of that, we're obviously going to work very hard to keep getting our message out. The economic forecasts are such that I think we will be a beneficiary. Ontario has the potential highest growth of all the provinces in Canada, and that's not coming just from me but coming from economic forecasters. I think interest rates are going the right way to encourage business. Those general things, on top of what we're trying to accomplish in this province, are going to give us a good shot at getting those 725,000 jobs. But I don't think you can judge the battle over one year or two years. I think it's going to be a progressive type of thing, as I say, sort of a snowball gathering speed.

Mr Silipo: I continue to ask the question in the context of the five years because, in fairness to your promise, it was over the mandate of your government. I'm not looking to make any judgements on the basis of whether you achieve a certain amount by the first year, but when I look at what is happening -- you've read the clippings as well as I have and seen the situation. You get the numbers probably before the rest of us in terms of what's happening with layoffs, and not just in the public sector -- there have been many in the public sector, whether it's in school boards or in other public sector areas -- but in the private sector as well. We're seeing instances like 700 jobs at the American Axle plant in St Catharines, various other layoffs also in the private sector, not to mention the 20,000 or so layoffs directly from the Ontario public service that your government will likely bring about, but even beyond that when you get into the private sector.

I listened very carefully during the pre-budget hearings to economist after economist talk to us about the impact of what you and your government colleagues have described as the largest of the job creators within the myriad things you're doing, and that is the 30% tax cut. I didn't hear any economist, including the one who came to the committee at the behest of your colleagues, nor indeed, for that matter, the economists from within the Ministry of Finance, say to us with any certainty that we were going to get anywhere close to the 725,000 jobs. In fact, if anything, there was a fair amount of scepticism around that and around the ability of the tax cut to generate that kind of result, particularly because in order to pay for that tax cut, as Mr Kwinter was pointing out earlier, you have to borrow that money. Borrowing that money means you've got to cut from the public expenditures of the province the equivalent of some $28 billion over the next five years, and in doing that you are in effect then causing the economy to lose a number of jobs, which, when you roll into it the positive effects that will be there to some small extent in terms of job creation -- and the economists did bear this out -- from the 30% tax cut, it just doesn't pan out. It just gets us nowhere near the 725,000 jobs.

The Chair: Do you want the minister to respond, Mr Silipo?

Mr Silipo: Yes, I do.

The Chair: He's running out of time.

Hon Mr Saunderson: I'll speed up and try to stay within the time limits. I have to say to Mr Silipo that his party and my party have a different philosophical approach. We're basically saying that the government should be out of things that the private sector can do best. I can name a number of those areas, but I don't think we need to. I think we're sending out a message that we are different, and that we were elected on that new message, and that we were different. We can all talk about economists. The economists always say "On the one hand," and then, "On the other." If you listen long enough to economists you'll get 50% of an answer one way and 50% another.

All I can say in conclusion of this process today -- which, by the way, I've enjoyed. It's the first time I've had a chance to be part of this very democratic process. I appreciate all the people who are colleagues of mine in the Legislature being here today, because I think this has been a reasonable dialogue. I know we all have our own axes to grind, but we happen to be the government now. I want to say to you, in conclusion, that we have obviously staked our reputation on producing a climate that is going to be conducive for people to come to Ontario, to stay in Ontario, to do business and to come as tourism. I'm confident that when the mandate is finished we will have accomplished so much of what we said we would do that the future of Ontario will be assured as we move into the millennium. I guess I'd like to conclude on that basis.

Mr Silipo: We will see.

The Chair: Thank you, Minister. This concludes the time of discussion and comments and debate on the estimates of the Ministry of Economic Development, Trade and Tourism. We shall vote on the respective votes now.

Shall votes 1001 to 1003, inclusive, be carried? Carried.

Shall I report to the House the estimates of the Ministry of Economic Development and Trade? I shall do so.

Thank you, Minister. Thank you to your deputy. I thank the staff and my colleagues, who hang in there all the time. That concludes the estimates time we have for this session.

The committee adjourned at 1755.