Legislative Assembly of Ontario

MINISTRY OF ECONOMIC DEVELOPMENT, TRADE AND TOURISM

CONTENTS

Tuesday 19 November 1996

Ministry of Economic Development, Trade and Tourism

STANDING COMMITTEE ON ESTIMATES

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

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

*Mr TobyBarrett (Norfolk PC)

Mr GillesBisson (Cochrane South / -Sud ND)

*Mr JimBrown (Scarborough West / -Ouest PC)

Mr Michael A. Brown (Algoma-Manitoulin L)

*Mr John C. Cleary (Cornwall L)

Mr JosephCordiano (Lawrence L)

*Mr AlvinCurling (Scarborough North / -Nord L)

*Mrs BrendaElliott (Guelph PC)

Mr MorleyKells (Etobicoke-Lakeshore PC)

Mr PeterKormos (Welland-Thorold ND)

*Mr E.J. DouglasRollins (Quinte PC)

Mr FrankSheehan (Lincoln PC)

Mr BillVankoughnet (Frontenac-Addington PC)

*Mr WayneWettlaufer (Kitchener PC)

*In attendance /présents

Substitutions present /Membres remplaçants présents:

Mr JosephSpina (Brampton North / -North PC) for Mr Vankoughnet

Also taking part /Autres participants et participantes:

Mr BillGrimmett (Muskoka-Georgian Bay / Muskoka-Baie-Georgienne PC)

Mr TonyMartin (Sault Ste Marie ND)

Clerk / Greffier: Mr Franco Carrozza

Staff / Personnel: Ms Alison Drummond, research officer, Legislative Research Service

The committee met at 1544 in committee room 2.

MINISTRY OF ECONOMIC DEVELOPMENT, TRADE AND TOURISM

The Chair (Mr Alvin Curling): Just to set the scene, there are six hours and 14 minutes left of the estimates of the Ministry of Economic Development, Trade and Tourism. The last time we completed, we had a rotating process and it's now the Liberals, so I will just stand down for a bit and ask some questions. I'll ask Mr Cleary to take the chair.

Mr E.J. Douglas Rollins (Quinte): John, make sure you rule him out of order a couple of times.

The Acting Chair (Mr John C. Cleary): I will keep an eye on him. Mr Curling, you've got 15 minutes.

Mr Alvin Curling (Scarborough North): I'm glad to see both parliamentary assistants here. I know they are quite capable individuals who will respond to questions. Their minister was quite eloquent in stating how much the province has been developed and is in good standing at the moment. I'd like to endorse some of the things he said but I'm just concerned in some respects as to how we are perceiving the province, especially in Toronto, especially in the riding of Scarborough where I'm from.

I want to ask about some of the small business aspects of it. One of the concerns I have in my riding is they feel they are not getting a response, things are just held somehow. They feel they're in a twilight zone, that small businesses are not getting support, that there is no surety. Is there anything you can tell us so I can go back to them and say they should not be concerned because this government will be coming forth with some programs to assist them?

I know that the trend of this government now is to say that we give no more grants. Although some of the large businesses are trumpeting on these kind of calls -- they're happy because more or less I presume they will gobble up some of the small businesses that are trying -- some of the small businesses do need some assistance and support. Is there anything you can tell me that I could then advance to those companies, in Scarborough especially, and I speak of that because I don't have an extensive survey done to say if it's widespread.

First, is this widespread where small businesses are concerned, that government is not giving them enough support? If there is any such support, what are the supports available?

Mr Joseph Spina (Brampton North): There are a number of things we have done as a government in general. As you indicated, there were a number of general policies that we made as part of our election campaign. We as a government recognize that the bulk of Ontario businesses are small businesses and that more than 95% of new businesses employ less than five people.

From a general government point of view, our direction was, first of all, to be able to get the positive economic environment to allow small businesses not to just start up but to grow. Many of the things we've talked about: tax reductions to try to stimulate consumer spending, implementing less-paper, more-jobs tests to get control over some of the unnecessary regulations, and the Red Tape Review Commission is looking at a number of issues.

We've already scrapped a number of rules and regulations that affected small business. You know we both fought in the election campaign to scrap the $50 filing fee, which we have done, which was not a nominal amount from a dollar point of view but unquestionably a pain in the neck from an administrative, bureaucratic point of view.

Within the ministry, as you know, we have had small business self-help offices, which were started under your government back around 1986 and were expanded by the last government in 1990-91. Those self-help offices -- there are 31 of them across the province -- are partnerships between the province and the municipality.

What we're trying to do is address more specifically, as well as the general elements for small business, the two key elements that affect small business. From a government point of view, from a ministry point of view it's an issue that has to be addressed beyond just MEDT, it's an issue that crosses a few ministries. There are some educational components, there is some access to capital components, and we are trying to get to those.

One of the first things we are doing in terms of a new initiative -- because many of the funding programs, as you know, which were either loan guarantees or outright grants, have been halted. There were 39 funding programs at one time, there are now six. Those six we feel are probably the most valuable in terms of the effect that they can make on the business community, which is why they were retained. They have been frozen for the moment but we feel quite confident that we can expand those six programs and get them revitalized by this coming year.

1550

To address the two elements of education and access to capital, which are the two key elements that affect small business people -- that's what they've told us and I'm sure that's what they've shared with you. They need help, they need someone to advise them and they can't afford to pay an accountant $150 an hour.

Mr Curling: But they had that before, though.

Mr Spina: What, the self-help offices, you mean?

Mr Curling: The education process, and the ministry always had people there who were telling them how to set up business, what to do, where to go, surveys and all that.

Mr Spina: Part of the problem is that a lot of that help has not been focused and it has not been delivered in as efficient a way as possible, and what we're trying to do now is marry some of those. When we look at the example we have in London, Hamilton and Ottawa, in those three communities what has happened is that they've gone beyond the provincial-municipal partnership and they've brought in other players in the community. They've brought in the community colleges, the universities, the chamber of commerce, the board of trade and so forth. With all of these people together they've been able to develop educational programs for small business people: short-length seminars, five- or six-week programs on doing a business plan, mentorship programs.

Mr Curling: All of what you tell me have been around a long time. The community colleges have been involved for some time. I'm sure the government would like to let you believe that this is the first time it's happening.

Mr Spina: No, it's not the first time it's happening.

Mr Curling: Let me go on to another point, though, because of the short time I have. I want to go to something that you may think may not be within your jurisdiction, and I'm talking about Caribana. Let me just premise it a bit. I don't want to put you on the spot in any way.

Caribana is one of the largest one-day events that happens in Canada and it brings in an enormous amount of money from the tourism point of view. Government, especially your government, is extremely hesitant in giving any support to it. Some of these organizations are not as organized as any big business and it's sometimes difficult to organize it in a business fashion, which is how I think it should be done. It's a kind of cultural thing, it's kind of an evolving expression in a way.

In regard to the tourism aspect of it, where hundreds, sometimes they say millions, of people come and see this event, pumping millions of dollars into this economy, what do you see your government doing in regard to encouraging that type of business and assisting organizations like those? From time to time we hear about the deficit they're in, and I think they could run their business much better. But again the payoff is just enormous in the sense of hotels that are booked, stores that do a thriving business, nightclubs that do a lot of business, and I would say that Toronto is hopping. There are people who come from as far away as Australia to this Caribana, from all over the world.

What is your government doing to encourage that, to put some money in that? What are they doing, do you think? The other part of the question -- you may not be so involved -- is that the Minister of Citizenship and Culture I don't think has played such an active part. Is there something being done that I don't know about?

Mr Bill Grimmett (Muskoka-Georgian Bay): I'll try that one.

Mr Curling: I'll take an answer from anywhere.

Mr Grimmett: We as a government certainly recognize the importance of tourism in Ontario and the importance of events such as Caribana, which obviously has a very significant economic impact on Metro Toronto and really on the whole province. It is an example of a major event that takes place that will attract people from the whole province and also from an international market to come to Ontario. These are the kinds of events that help Ontario to become a major destination for international tourists.

You asked what we're doing to help these kinds of activities. We as a ministry have re-examined the way Ontario markets itself and also the way that we as a ministry assist the private sector in trying to market major tourism events. What we have decided to do, after consulting with the tourism industry and also with people from within the ministry, is to try and develop a better partnership between the private sector and our ministry in developing a marketing plan. We have set up a joint public-private sector panel; the appointments were recently made. We intend to set up a five-year plan to establish a marketing program for the province of Ontario, and we look forward to the advice we receive from the key people from the tourism industry who are going to be sitting on that panel.

Specifically with respect to the issue around Caribana, the Ministry of Citizenship, Culture and Recreation isn't here, our minister isn't here, but I can advise you that the Ministry of Citizenship, Culture and Recreation made funds available for this year's Caribana on the condition that the Caribbean Cultural Committee accepted and implemented the Metro chairman's task force recommendations. The task force recommendations were consistent with the ministry business plan, which articulates a clear objective of giving priority for resource support to activities that will assist organizations to become self-sustaining and non-dependent on government funding.

With respect to future plans in that regard, I think I'm going to have to suggest that we defer that issue until the minister is here tomorrow.

Mr Curling: Let me put it to you this way. What you've just read is one of the wonderful lines of the bureaucrats, who say, "These are the directions we want to go, as long as they conform to the principles," and then get lost somewhere down there of what really is. The bottom line is that I just wondered what kind of commitment the government has in regard to things like Caribana, and I don't hear that, I'm not getting any of that. "Here is $100,000 or $50,000 and if you conform you can get the money. That's it."

I had actually suggested to Caribana at one stage that what they should do is shut down, as the government and many of the people don't realize that this really pumps a lot of money into the system. It's not a trick. It's just that I think they need help. It's a business, a unique business, and I know it's maybe difficult for Canadians to address because it's a culture that is, if you want to call it, imported. Therefore, for all Canadians of all cultures to come along with it, it's a little bit difficult, but from the business aspect they need help.

What I would ask is, would your minister be prepared to meet with a group of people to discuss this Caribana stuff directly? It's a political question more than anything else because I want to know where the head of the Conservative Party would be in this regard. I'm not playing politics with that. The fact is, it's the government that is there, they have their own philosophy on how they deal with small business. I just want to know, would you be prepared -- both of you are here. Could I get a commitment to meet, and a group of people, with the minister to discuss some of this? I want to say an informal gathering.

1600

Mr Grimmett: I can certainly respond. One of my roles as the parliamentary assistant responsible for tourism is to represent the minister in that kind of gathering, and I'd be happy to make a commitment to meet with the Caribana people as the minister's representative. I can't make commitments on behalf of the minister in his absence, but I certainly am prepared to meet with those people.

I also would like to advise you that the ministry's regional staff in Toronto have worked closely with the Caribana organization over the past couple of years. Also, the assistant deputy minister, Jean Lam, who is here today, has recently met with Caribana officials to discuss how our ministry might be able to assist them in accessing funds that are available through other sources such as the Canadian Tourism Commission. And certainly I would be able to discuss with the various organizations that work closely with Caribana, such as the Metro convention and tourism bureau, who have funds available that they might be able to assist Caribana with.

I think it would be counterproductive to suggest to Caribana that they close down. Our government is aware, just as the people from local government in the Toronto area are aware, of the economic benefit Caribana provides, and we're certainly willing to work hand in hand with the Caribana people to make sure the event continues in the future.

Mr Spina: I just want to indicate quickly, Mr Curling, that in Brampton there's a thing called Carabram, which is a spinoff of the Toronto Caravan. They have received virtually no government funding. They have been successful business managers of that event, and over the past nine or 10 years they have been operating that, they've managed to sock away about a quarter of a million dollars in their reserves. I would suggest to you that we really do appreciate the value of Caribana and I think -- you made the point very clearly -- they just need the opportunity and the backup perhaps to manage the business side of the event better. But I think there is an equivalent in the private sector that could compare.

Mr Tony Martin (Sault Ste Marie): I was a little disappointed earlier today when I found out that the minister wasn't going to be here, but I should have known, because I think there was some reference to his going to Japan.

Mr Spina: When the last meeting adjourned he said he was going to be away.

Mr Martin: I'll tell you, this guy gets around, eh? One of the questions I'm going to ask him when he gets back tomorrow is how his travel outside of the province, particularly outside of the country, compares with his travel inside the province. It seems to me that, for a group of folks governing who talk about the need to be frugal and careful about spending, this minister in particular does a lot of it. I don't know if the fruits of his labour are as telling as he will, I'm sure, share with us tomorrow that it is.

I have a real concern about the whole agenda of your government. I think you, as people who serve to support the cabinet in many respects, as parliamentary assistants and sitting on committees of various sorts, need to be as concerned as I, particularly when you get a week such as the week we had last week to go back home and talk to your constituents. In Sault Ste Marie I knocked on probably over 300 doors and talked to folks, and I hit four plant gates while I was home and I talked to people about the impact of your agenda on them and on the economy within which they have to operate.

The people at the plant gate are all working, but even they recognize the very detrimental impact decisions you are making are having on our community and on them and their families and their neighbours when they go to get health care or when their kids go to school and they attempt to access the services they have come to expect will be there at a certain quality or level. It's just not happening any more.

I'm wondering, Joe and Bill, what you heard when you went back home last week and spent some time with your constituents around this particular question and what impact you sense that the agenda of the government you are a part of is having on that part of Ontario you represent. Does it compare at all with some of the commentary I heard, particularly at the door, when people would haul me in and chat with me about the way that, bit by bit, their quality of life is beginning to be diminished and, because of that, their ability to participate in the larger community and in the economy of the community is being diminished? I would suggest that because of that, we are all losing.

I will a little later share with you some thoughts from an article that appeared in the Toronto Star a few weeks back that paints the picture probably as clearly as anything I've ever seen. It really is very frightening for me personally, for a number of reasons. I represent a community that not only depends on the private sector and the jobs created and the wealth generated in enterprises like Algoma Steel and St Marys Paper and the ACR, which we as a government were very instrumental in restructuring in the early 1990s as they struggled through a very difficult economy, but very dependent on the jobs created by government services: teachers and nurses and doctors, and the Ontario Lottery Corp, which I now believe is under threat of being dismantled and hived off in pieces.

Joe, you squint your eyes. Have you seen the terms of reference for the external review of that corporation, which has in it in at least a half-dozen places references to privatization, privatization in every instance where that can be done, regardless of the cost to my community? There's no reference in that terms of reference at all to the impact on our community, on the economy of our community, of any decision that's made by this government. When that piece of government business was moved up to Sault Ste Marie, it was moved there because everybody knew it would have other economic spinoffs. Well, there's a study going on now that is frightening many of us. If at the end of the day big chunks of it are hived off and turned over to the private sector, our community will be the loser in all of that.

I'm going back to the question, to both of you: What are you hearing in your community about the impact of the decisions of this government on your constituents?

Mr Grimmett: First of all, I'll deal with some of the suggestions made by Mr Martin with respect to, ironically enough, overspending by the ministry.

I just want to assure Mr Martin that our minister is currently in Japan. He is aggressively marketing Ontario. He sees that as one of his roles in this ministry. It is a role that we take very seriously. Both Mr Spina and myself have done quite extensive travelling throughout the province of Ontario, as has the minister. We see the role of the ministry as getting out and marketing Ontario to try to increase investment and travel within the province. We want to work with business and we want to work with public sector partners as well to try to improve the business climate in Ontario. That really is our strategy in trying to create jobs and keep the economy vibrant in this province. I'm sure the minister, through us, needs to make no apologies for being in Japan right now. That's part of his job.

With respect to the budgetary process within our ministry, our minister has been very conscious of the need to keep spending very realistic within our ministry, and he certainly subjects Mr Spina and I to a strict review of the spending that we undertake.

1610

But we are out there and travelling the province, getting to know the business community, getting to know the people who operate within the sphere of this ministry. We want to help entrepreneurs out there and we want to know what they have to say about how our ministry can help them.

With respect to the lottery corporation, one of your questions was, what is the current review? How's that going to impact on your community of Sault Ste Marie? Our government is examining all of its operations, including all agencies, boards and commissions. We want to make sure the Ontario Lottery Corp is functioning in the most efficient manner it can. We're going to be undertaking a review of the Ontario Lottery Corp to identify whether there are any alternative and more cost-effective ways of conducting other business functions. No decisions have been made on this and the review is not completed yet.

Mr Spina: Tony, you asked in your comments what we heard when we were door-knocking, and I go out every two weeks on Saturday. Generally it is quite supportive of our government's direction and the response is one that they feel we are doing the right things, that we must get our deficit under control because positive management of our economy, our economic structure and economic environment is what creates a stable economy. That's what also makes it appealing to foreign investment.

Last year, for example, the minister had I think around 20 or 25 visits from foreign investors. I had no idea, being newly elected, whether this was par for the course, below average or something really terrific. I asked the people within the ministry if this was a good response and the reply was that this was phenomenal. They hadn't had that many visits in one month -- and this was just in July or August of last year -- in four or five years. The response that the minister and the Premier have gotten when they have travelled in Europe is, "Where have you guys been?" They missed Ontario.

After your government closed the business consulates, we virtually disappeared from the face of the earth in terms of our profile internationally. That caused quite a devastating impact on foreign investment in Ontario and, as a result, much of that investment went elsewhere. It went to other provinces and it went to other countries, primarily the United States, since they were coming to North America. We are now trying to reverse that trend, and that is the purpose of the minister travelling to Europe and southeast Asia and Japan.

On the trend in employment since July 1995, we've had 132,000 new jobs created but, more importantly, 114,000 of those jobs have been in the private sector.

You talked about Sault Ste Marie and the reaction you got at the Algoma Steel gates. Tony, I know we both grew up in the city, or at least I did. I know you came a little later. But the reality is that the best thing we could do for a place like Sault Ste Marie is to create an international market that will develop a good export market for Algoma Steel. If we can develop that international market for Algoma Steel, what happens is that those jobs get created and employment will increase in Algoma Steel.

You talked about the public sector jobs that were lost and were causing a drag on the economy in Sault Ste Marie, as in other communities. The reality is that if private sector job creation is as successful as we anticipate, it will more than make up for the loss in public sector jobs, and that's our objective. That's the direction we are heading.

Mr Martin: I guess the question I would have of you is, what if that doesn't happen? What if your projections are unrealistic? We had a study done in Sault Ste Marie last year after your budget, and in looking at what had already happened up to that point by way of layoff, office closure and downsizing, it was projected that we would lose in the neighbourhood of between 1,700 and 1,800 jobs by the time you're finished, in the public sector. That will compute to probably somewhere around $75 million a year annualized out of the economy of the city.

Algoma Steel, no matter what you do by way of creating market for the product they produce, is modernizing. The new plant that they're putting in now, the half billion dollars that they're investing now, is going to at the end of the day, employmentwise, reduce the employment at Algoma Steel. There are going to be less people working there. They're going to need less people working there.

The concern I have is, and I'm not sure if you share it with me, that any economy has to provide jobs for people; otherwise it's an economy that is more interested in making the rich richer. All of the statistics that I look at now and some of the projections that are being made by some people who are held in fairly high esteem by the business community are saying that this in fact is what's happening at the moment. As you move from public-sector-delivered services to private-sector-delivered services, the one piece that loses out is in the area of jobs and the amount of money that's paid to people in those jobs.

In Sault Ste Marie the projection is that we will lose 1,700 to 1,800 jobs. There's no way that you can make an outfit like Algoma Steel take up that slack.

All of the indicators that I shared so far at these estimates are telling me that there are some very troubling signs of difficulty at another end of the spectrum, which is in the area of poverty and family and children. That's growing and people are becoming more and more concerned. The churches out there are making statements that indicate they have a concern about the growing poverty.

In northern Ontario bankruptcies are up. In Sudbury they're up by 49% this year, the first seven months of 1996. They're up by 41% in the region of Sudbury. In the Tri-town area, New Liskeard and Kirkland Lake, they're up by 25%. In the total region of Timmins, they are up by 74%.

The Chair: Is that a long list that you have?

Mr Martin: No, it's not that long. It's just a couple more, Mr Chair, and then I'll be finished.

The Chair: Okay. You've got about a couple of seconds.

Mr Martin: In Sault Ste Marie bankruptcies are up by 61%, and along the North Shore by 26%.

The point I make is, I hear what you're saying and certainly there are people out there who can paint that picture and can make it sound like this is going to be good for everybody and that jobs are actually going to be created and there will be more of them. Anybody who is looking at what's happening right now and projecting out of that what may happen a year or two or three or four down the road, it isn't absolutely certain that that's going to be the result.

I guess the question that I'll have for you when it comes my turn again is, what if it turns out your projections are not correct? How do we take care of the literally thousands of people who will be out of work?

The Chair: Five seconds. Can you answer that in five seconds?

Mr Spina: Just quickly, we need to expand the focus of economic development from being provincially geared and provincially focused to being a broader base. When I was in the Sault a month ago and spoke with your mayor, I said to him: "You have to take the focus away from just Algoma Steel. You have to broaden the base of economic development." That's of course when he took the opportunity to give me the pitch for the casino.

Mr Martin: So when are we going to get a casino, Joe?

Mr Wayne Wettlaufer (Kitchener): I thought you didn't like casinos.

Mr Martin: I said I was against VLTs.

1620

Mr Toby Barrett (Norfolk): Monday morning I had an opportunity to attend a worldwide television hookup designed to promote Ontario in a number of countries as well as within our own province. The campaign is titled Market Ontario and is designed to enlist both public sector and private sector partners to assist us all to market Ontario in the rest of the world as a great place to live and to work and to do business and, perhaps most importantly, to continue to lure investment to this province. There were some very significant partners involved, companies like IBM, Bank of Montreal, Bell Canada, Dow Chemical, Ford and General Motors, who all contributed in spirit and also in financial terms for what was a very sophisticated launch. A video was presented using footage provided by a large number of companies, a very professionally shot video, at no cost to the taxpayer.

I think my question relates to how we as MPPs can augment this marketing effort, what we can perhaps do locally. In my riding of Norfolk, exports are very significant with respect to tobacco, ginseng, steel and auto parts. We're positioned very well locally to compete globally.

I might mention that Minister Saunderson does travel a great deal. This was indicated earlier today. He attended our ploughing match. That actually has been described by him several times on this committee. He has had a firsthand look at the beef industry down in the east end of my riding. He also spends time in the west end of my riding in the tobacco country and he knows a bit about the commercial fishing industry in my riding as well and has been known to partake of Lake Erie fish.

In a riding like mine, based on agricultural and primary industry, transportation is very important. The trucking industry is an important component of the local economy. Many of these tractor-trailers travel throughout the United States. One idea that has been presented to me -- and I think there's some potential here given the highway infrastructure that we have across the border. I think many of us know that my riding and most of Ontario is within a day's drive of about 120 million customers. I've had a chance to talk with industry in my area concerning this proposal and an offer has been made. For example, there's a construction company in my riding. They're willing to foot the bill to provide signage or basically paint the sides of at least one tractor-trailer that travels in the United States, perhaps using this logo, "Ontario, Canada" -- I just forget the phrase -- to promote investment in Ontario.

So I'm wondering, where do I go from here? Who do I contact? How can I as an individual MPP capitalize on an opportunity with some local businesses that are very excited about this? They're very keen on putting Ontario back on the map. They travel in the United States. They have salespeople in the United States. They have tractor-trailers down there. They want to help out. What concrete steps can they take? Who should they contact?

Mr Grimmett: The suggestion you've made is similar to the kind of suggestion that I've heard in talking to people across Ontario and that the minister has also heard. He's been pleasantly surprised at the reaction by the private sector and also public sector partners that we have in wanting to take part in a robust program to promote Ontario. The approach that we're taking as a ministry with the Market Ontario initiative is that we would like to see a team approach.

The kinds of suggestions you have I've also heard in my riding, where we have some major transport companies. I know currently in my riding, for example, Muskoka Transport, which is an international hauler, makes some of its vans available to local tourism initiatives. If you're willing to have these people meet with people from our ministry, I'm sure we have people in the marketing division of the ministry who'd be happy to sit down with them and see whether something can be worked out.

We have other initiatives within the Market Ontario initiative that people in your riding perhaps could take advantage of. One is the move to business ambassadors. The minister is very encouraging on this program and has found a great willingness in public sector parties, business parties and also in the academic community, on the part of people who are travelling internationally, to help sell Ontario and their particular expertise in Ontario. I know you have some of that in your area, because just last night when I was at the Ontario Federation of Agriculture meeting in Mississauga I was able to talk to some people from your riding in the tobacco industry. I know they're interested in assisting Ontario to sell itself abroad, and they have certain contacts in the tobacco industry.

What we're trying to do with this initiative is to get into boardrooms throughout the world and leave with them the impression that Ontario is now a place that's open for business, that wants international investment, and we want them to think of Ontario first when they make a move to locate somewhere other than their own jurisdiction.

The kinds of initiatives you're suggesting in your riding would be very useful to us as a ministry to look at. I'd encourage you to get in touch with Joe or myself or the minister and we can hook you up with people in the ministry who will help the people in your riding.

Mr Barrett: I appreciate that. I think we're going to get a lot of key people who are interested in this concept of the business ambassador volunteer, and not solely people who are travelling around the world. If we could arm people who are maybe going from London down to Cleveland, for example, with a kit -- I think we have to. In 1993 we shut down something like 17 of our trade offices. I feel there's a vacuum there. We have pretty well disappeared from the radar screen as an international profile, and just given the amount of foreign investment that's available to us from the United States alone, I think there's an awful lot we can do just hopping over the border, literally in our own backyard. That's the only comment I have on that.

Mr Wettlaufer: In the years I was a small businessman back in Kitchener it was necessary to research other businesses to know about them because of my dealings with them. My riding had a number of businesses that were associated with older industry, ie, furniture, automotive. Unfortunately the automotive industry they were involved in was the type that was falling by the wayside and they were not farsighted enough to get involved in the modern automotive sector. We have the meat-packing sector in Kitchener as well and we've recently lost about 400 jobs in that sector.

I think the announcement yesterday of Market Ontario was very beneficial because it provided us with an opportunity, in my city of Kitchener, to recognize the modern industries we should be trying to attract in that community: aerospace, agrifood, biomedical, automotive, forest products, information technology, machinery, mineral development, plastics and chemicals. I certainly will be talking with business development people back in my riding to discuss these with them.

I hear members of the opposition or the third party talking about bankruptcies being up, and of course they're up. They have to do with the negative business strategies employed for the five years prior to our government coming on the scene. The other parties don't seem to understand the realities of business, that negative policies have an immediate impact on business, but they also have very far-reaching effects on business. Positive actions by a government take many years to realize any positive feedback. Investment produces results, but that sometimes takes a long time.

1630

For instance, in the last 10 years -- this was quoted in the news media today -- Canada has gone from 11.3% of the world's foreign investment to 4.6%. An increase of only 2% represents some 235,000 jobs. I think people who are employed and collecting paycheques today don't really care whether foreign companies or Canadian companies are paying them as long as they have a job. But previous governments did everything they could, through a lack of awareness of business, to discourage foreign investment in this country, and in this province in particular.

I would like to compliment the ministry on the Market Ontario launch yesterday. I think it is very positive. We need it as a government; we need it as a province. People are going to have jobs as a result, albeit they won't be felt immediately, but certainly will be over the course of the next four to five years.

Mr Spina: Thank you, Mr Wettlaufer. Those are encouraging comments. I want to share something with the member for Sault Ste Marie that perhaps they could have a look at without dumping on them. There has been restructuring taking place in some of the communities, and I think your Kitchener-Waterloo area is a good example of that restructuring process. The region has become known as Canada's technology triangle as a result of the thriving information technology sector that's been supported by your universities. But despite some of the layoffs you mention, there has been some new investment.

Glegg Water Conditioning recently undertook a $1.5- million expansion, 50 to 75 people. Companies in more traditional industries -- Linamar, Skyjack and Hammond -- are growing, adding new jobs. I think that's part of the more positive environment.

By the way, just a personal note: The owner of Skyjack happens to be a neighbour. We're trying to convince him to come back to Brampton because that's where he started out.

Mr Wettlaufer: We need him in Kitchener, thank you very much.

Mrs Brenda Elliott (Guelph): Those are Guelph companies. All those companies are Guelph companies.

Mr Spina: The important thing is that these jobs and these businesses are here in Ontario, and the competition between the municipalities I think is good. All the communities are beginning now to get on board the bandwagon with respect to economic development and searching out these multiple partnerships between the province and various private sector and foreign investors. The marketing of their communities as good, positive, viable economic environments for business development and growth is the objective we all should have in mind.

Guelph Tool and Die has added to its facilities and expended $600,000. Thank you, Mrs Elliott.

Mr Curling: I just want to follow up on some of the things I've been hearing. Let's talk about economics and people. When I look at the estimates and I look at this government, I get a funny feeling that there is no sort of personality there, that there are no human expressions. I hear "layoffs" and "downsizing" and I hear a government that is run by a 1-800 number. When you phone it you're put on hold or you don't get through. Somehow people who want those resources are not utilized properly.

How many jobs have been laid off in the public sector so far? How many people have been given notice and how many are out of jobs and how many people would be what they would call buyouts? Do you have any figures like that at all? I wonder what we are going to do with those resources. They're going to try to find jobs within the private sector after they leave, and the private sector is downsizing because of technology.

I read a line here in your marketing strategy, "As the Premier stated, we are going to market Ontario to the world as a great place to live, work, visit, invest and do business, and the bottom line is jobs." But you're laying off a number of civil servants who are quite competent and the private sector is having a field day downsizing too. Your expression is "Doing more for less," meaning that they will find their way into the system somehow. I hear stories of people coming to my constituency office saying: "I'm going to get my pink slip. I live in fear." How can you run an economy under this fear? When you try to get in touch with one of what I call the most endangered species, ministers, you can't find them anywhere. They don't turn up for anything. "Ministers, when you want to discuss and talk with them," my constituents say, "don't turn up."

People want to know where the government is going to go and what they are doing: "Why are they laying us off?" Why are they spinning, "We're going to create jobs"? One minute you say you're going to create 100,000 jobs, then you lay off 150,000 people. I'm saying that sometimes the people you're laying off are far more than the jobs you are creating. Could you respond to that? I have a great concern about how this government is going. I want to put a face to them.

Mr Spina: The reality is that with the initiatives we began, Mr Curling, in putting a positive economic environment in place we have to get, first of all, our deficit under control. I don't think there's any argument on that.

Mr Curling: There are arguments, of course.

Mr Spina: The human side of that is something we never made a secret of, that we were looking to downsize the public service by I think 13,000 employees over a three-year period. In the first round of public service cuts we announced last year, about 1,100 of those jobs were positions that weren't even filled, for starters. Beyond that we have to look at the real figures that have occurred over the past 12 months. The reality is that we have increased the net number of jobs in this province by 78,000. That's been a realistic employment change and that's a net figure, not a gross figure.

Sure, the opposition, your party and Mr Martin's party, will always bring forward the numbers of people that have been laid off, lost their jobs and so forth. That, of course, is a realistic figure.

Mr Curling: What was the size of your ministry when you took it over and what is it now? Is there less personnel in your ministry now?

Mr Spina: Yes.

Mr Curling: So why are you telling me that we're coming with negative things when you're saying you have laid off these people? They are out of jobs now. You say you didn't fill them because they are gone, that these jobs are not filled.

Mr Spina: I'm talking about the broader public service.

Mr Curling: I want to go back to the individual, though, not the broader -- when you do that we get lost.

Mr Spina: Within our ministry the 1995-96 number was 1,126. In 1996-97, by the time we complete the implementation of our reduction program, there will be 765, a reduction of 32%.

Mr Curling: So it's not something I'm making up in my mind, then.

Mr Spina: No.

1640

Mr Curling: They will be lost. There will be people out of a job.

Mr Spina: Yes.

Mr Curling: There will be people who won't be able to send their kids to school because they aren't getting a paycheque any more.

Mr Spina: That's purely speculation on your part.

Mr Curling: Well, there aren't any jobs they're going to get any money from.

Mr Spina: First of all, they're not paying for school, so far.

Mr Curling: No. Out of their pockets they will have to pay school fees, and they will be out, if you want to call it that, university tuition fees and all that.

Let me go to another aspect of it, because we have a short time. One of the first groups of people your government beat up on when it came in was the people who are at subsistence, on welfare. They produce too. Today they are finding it extremely difficult. You say there are more jobs for them, but these people are having an extremely difficult time. I call them human resources too. Many are qualified. They can't get a job. Some of them are just finding it tougher because you have created more mountains before them.

Another area too is I heard your Minister of Culture in the House today, whom you should be getting at very quickly because, regarding access to trades and professions, there are qualified people in our province who can't access jobs because you wouldn't deal with the situation of having them qualified and assessed properly.

Mr Spina: They're in place.

Mr Curling: I beg your pardon?

Mr Spina: Go ahead and ask your question.

Mr Curling: I'm saying I thought you were right on target because of the fact that there are engineers, doctors, nurses, many qualified people who can't access the workplace because of discrimination or impediments because they're not professionally assessed. Are you aware of those things, that they can't access trades and professions?

Mr Spina: Under the existing legislation obviously it's illegal for them to be discriminated against.

Mr Curling: That's what I thought too, but the fact is that we have people who have qualifications who are being resisted access constantly as to professional organizations, which the government can deal with, can make sure these assessments and evaluations are done efficiently, quickly, so that these resources, these people we have can access the workforce and contribute to the economy.

Mr Spina: But the first goal is to create the jobs for these people to go to, and that's the objective.

Mr Curling: Oh, I see. So you keep them out in the meantime, while they're qualified?

Mr Spina: What would you propose in the interim, that we hire people just to pay them some money?

Mr Curling: No, I didn't say to hire them.

Mr Spina: I'm trying to understand what your objective is.

Mr Curling: My objective is that there are many professionals who are in this province right now who, maybe because they are not trained in Ontario, are not able to practise their own profession and maybe create their own jobs. But again, they are not certified. You should be pressing your Minister of Citizenship, Culture and Recreation, saying, "Listen, there are professionals here who would like to access the workforce, but because of restrictions on access to their profession because of how we evaluate these people, they can't come into that workforce."

Mr Spina: I take task with your comment that we, and I'm presuming the "we" is the government --

Mr Curling: Definitely. Didn't you know that? They have elected you.

Mr Spina: -- are putting a restriction on these people? I hardly think that's the case. I'm going beyond MEDT here because the reality is that there is a highly funded LTAB program under the Ministry of Education and Training, whose objective and focus and scope is to match professions with job opportunities.

Mr Curling: Will you allow me to send you some of the résumés of people who are quite qualified and the government has not moved to have these professionals get the certification and access the profession? Will you allow me to send you some of those résumés? Hundreds of them are in this province today, but the government has dragged its feet, all governments, the NDP, the Liberals, the Conservatives. I'm saying this is wasting resources in our society.

Mr Spina: Part of the education program I spoke about with respect to small business is to increase and enhance the training element of small business people so that as business owners they can --

Mr Curling: They don't want to be trained any more.

Mr Spina: No, not the employees; I'm talking about the business owners, because the business owners are the ones who will provide the opportunity for these qualified people to find positions.

But to address the other element, you alluded to the welfare situation, and I know you alluded also to the workfare program. In the region of Peel, for example, the reality is that we developed a program which was public and private sector together, partnership.

The element of that program was this: There were two parts to it. The normal public perception of workfare is that people who are on welfare are going to get out there and do community work. That's only one element of it. The stage before that is this: We have 30 private sector employment agencies in the region of Peel that have jumped on board in this program. The social services department identified 800 able-bodied workers looking, ready and willing to work. These agencies came to the region and said, "Look, we have 1,400 available jobs that we can't fill." They have taken the responsibility of matching the jobs with the people's skills.

That's an example of a pilot project in this province that is creating jobs, that is taking people off welfare, and it is going to be getting them gainfully employed. That's a clear example of a positive initiative of this government for job creation.

Mr Martin: I know that you and the members of your party honestly believe that what you're doing is going to make us all better off in the long run. I know you believe that. The question I have is, what if you're wrong? What if your suppositions are wrong and it becomes obvious to you that we are going down a path that's going to be overall detrimental to the health of the province, from a health care perspective, from an education perspective, from an economic perspective? What if it all starts to unfold that way? At what point do you decide that what you're doing is really counterproductive and it's not making this a better place to live, a better place to do business in?

I look around. I know you read what supports your position. You use the stats and figures that indicate that what you're doing is making things better. I hope you would think it was okay for me to also, on the other hand, look at the indicators that are telling me that maybe something -- that's my job here, if for no other reason except that it's that. But I come at this from a different perspective.

You have people saying things like "Ernie Eves's Talk of Ontario Boom is Trash." He talks here about, "Ontario's jobless rate climbed to an unacceptable 9.5% in June, up from 9.1% in May." We know that the last figure for the unemployment rate was at 10%. In that respect, it's growing.

We have other headlines: "Harris is Making us Alabama of the North." The one that I guess concerns me the most, because of where I come from, is this issue of poverty: "Bishops Accuse Ottawa and Provinces of Child Abuse." There is the stat I shared with you just a few minutes ago re bankruptcies. It may be okay to just write it off as a consequence of the last five or 10 years, but the fact is that we are getting record bankruptcies a year and a half into your mandate. Some of it has to flow over into your ballpark.

1650

I want to give some kudos, however, here re the initiative on Monday. I think it's absolutely essential that we market Ontario and that we let the world know what we have to offer and that we really try to attract businesses to come and invest here. We were doing that. You'll have to admit that what you did Monday was an add-on to what we had already established as government. Some of the infrastructure upon which the Market Ontario program is based was built on a program we had put in place as a government. In fact the vision of Ontario that you're out there marketing is not the same vision that was there when we were out there marketing; the vision of Ontario that you're out there marketing is a bit of a misnomer.

You're marketing an Ontario that has a first-class health care system that is actually a net gain to investors. When somebody comes to invest in Ontario, the health care system we have in place allows them to have a lower cost of health care for their employees. That's disappearing. You're changing that to be more like the American health care system, which a lot of investors want to get out of or move away from and is the reason they would come to Canada in the first place.

It's based on a vision of Ontario that has the best educational opportunities for its people, that's ready and willing to provide a highly trained and motivated workforce.

You're marketing an Ontario that is investing heavily in infrastructure, something that all business needs: good roads, good water and sewer systems, good sources of power and energy. With every day that goes by and the decisions your government makes, a lot of that is disappearing, and the upheaval that is happening out there I think is an indication that this in fact is what's happening.

People invest in a jurisdiction not because regulations are lower, not because people are willing to work for very minimal wages and not because they can take the resource of an area at will, but they come into an area and are attracted traditionally to Ontario for investment because we have a first-class health care system, a first-class education system and good infrastructure. Anything you do to take away from that makes us less attractive.

I look at an article here that talks, for example, about the reason a fellow named David Packard, cofounder with Bill Hewlett of Hewlett-Packard, invests in a particular jurisdiction. He says, "Through the years, we have chosen sites that are close to good universities and airports, that provide a supply of skilled workers, that have strong environmental standards and that are attractive places to live and to work." That is what Ontario is, what Ontario has been built to be. I just warn you, as a government, to be careful you don't do anything that will diminish that or take away from that.

Mr Rollins: We might make it too good.

Mr Martin: The indicators I'm looking at now would suggest you're not going to do that, that you're going to take away and make it less attractive.

Joe, you mentioned some of the work that's going on around the Kitchener-Waterloo area by way of new industries. In Sault Ste Marie, we got together as a group to look at what the future might be for our area. We looked at what was there and what we could build on. Certainly Algoma Steel and St Marys Paper and ACR are industries that have a minimal horizon unless some major investment is made in new technology, and those companies are doing that.

But we thought, even above and beyond that, that we could build on the fact that we have the Ontario Forest Research Institute there. We had more scientists per capita in the small town of Sault Ste Marie than anywhere in North America at one point in time. That's not there any more. Your government has effectively gutted that operation. That is no longer a factor in what we might build on to develop a future for Sault Ste Marie and Algoma and that part of our province.

I mentioned the Ontario Lottery Corp before. We saw the lottery corporation as an example of how a high-tech industry, which the lottery corporation is by way of the technology it uses, could locate in a place as far away from Toronto as Sault Ste Marie. Because it was able to operate effectively and generate a healthy profit and be successful, maybe other operations of its sort would choose to locate there. As a matter of fact, the reason, as I said before, the lottery corporation was moved to Sault Ste. Marie in the first place was twofold: (1) that it could be done, the technology was there to do it, and (2) it was the economic stimulus it would be and create for our particular piece of northern Ontario at a time when we were really struggling, in the early 1980s, with the downsizing.

Algoma Steel went from about 12,000 workers to about 6,000 workers from about 1979 to about 1982, and the lottery corporation was moved up there to become the new foundation from which we might launch out into some other things we might do as a community, to take advantage of some of the new technologies and do exactly what Joe is suggesting we do, which is happening, as you suggest, in the Waterloo-Kitchener area. But if you take that away from us now, if this external review says to you that it is more profitable on bottom-line consideration only, not considering the impact this has on the larger area and some of the other businesses and industries that have established there because the lottery corporation is there, if, bottom-line, your external review shows a break-even or even a gain by turning that operation over to the private sector, we will lose that too.

Yes, it is important to be looking at ways to change the system to making Ontario a more competitive place and to be marketing it, but if at the same time you're diminishing what makes it attractive in the first place, if you're cutting away at that which we could build a future on, it becomes counterproductive.

Do you have any benchmarks? Do you have any blueprint you're looking at that tells you when what you're doing has become counterproductive? At what point do you become concerned about a rise in unemployment? At what point do you become concerned about a rise in the number of bankruptcies and the rise in some of the social disease that is beginning to raise its head in various parts of the province? At what point, because of that, do you perhaps begin to make some decisions that, in some humility, perhaps would cause you to say, "Maybe we were wrong," that maybe the tax break, for example, is wrong at this particular point? Maybe five or 10 years down the road it makes sense but not now.

Is there anything you're looking at, any benchmarks you have in place, any blueprint that would run up red flags for you regarding this whole question?

Mr Grimmett: At the outset and at the end, Mr Martin, you indicated that your question really was, what do we as a government do if we find out that our approach, our general strategy, is wrong? At this stage, I have to tell you that during the time prior to my running for election I think we had a demonstration of how not to run a government. We had that demonstration by the previous government, really by governments in Canada and in Ontario for some time, of how to not operate a government in a businesslike way. We saw governments that continued to rely on deficit spending that could not sustain itself.

Mr Martin: But now you have the controls in your hands.

Mr Grimmett: We now are in charge, that's right. We have a strategy, and our strategy is that first of all we get our house in order. We balance our budgets. We bring an end to ever-increasing deficits that could not sustain the kinds of services that people in Ontario demand from the government. Our strategy is that we identify the core services that government is supposed to provide. We think we have done that. We think that generally, on most of those issues, all three parties agree. There are certain things that people in Ontario value the most in terms of services the government provides, and we feel that the public supports us on the idea of analysing how we provide those services and making sure we provide them in the most effective and efficient way.

1700

When it comes to knowing whether we're on the right track and whether our approach is the appropriate one, we do pay attention to information that we receive on bankruptcies, we do pay attention to information we receive on how the various issues in society are from day to day. But we also rely, in the case of many of us, on our experience in business, our experience in the marketplace. All of those experiences that I have had suggest to me the idea of making sure you don't spend more money than you bring in. Very basic business instincts, very basic business rules, must apply. We must have a businesslike government.

We are receiving indications from a variety of parties throughout Ontario and throughout Canada that we're on the right track. We have received assurances from, for example, the Conference Board of Canada, which has projected that for 1997 we will create 159,000 net new jobs in Ontario, that our real GDP growth will be ahead of all other G-7 countries, at about 3.2% annually. We've received similar assurances from the Royal Bank and the CIBC, from their economic departments. We certainly pay attention to this information, but at this time we have every assurance that we're headed in the right direction.

The Chair: With that positive forecast, Mrs Elliott?

Mrs Elliott: I was going to sit quietly, as I'm new to the committee, just to hear what people were saying, but I couldn't remain silent when I heard Mr Spina mention several businesses from my own city of Guelph: Glegg Water Conditioning, Skyjack, Linamar. These are companies in Guelph that are not only famous in our city but are internationally famous. I could add lots more: Kenhar, Guelph Tool and Die was mentioned, Engel, Sihi Pumps. Many of them have international connections as well.

One of the first things I did when I became a new member was to make a point of going around to visit each one of those businesses individually, to spend some time with the owners of the business, to spend time with the staffs there, to find out what they wanted from our new government. The message I heard -- and I think this speaks back to what Mr Curling was saying about the human element -- loudly and clearly was, "Let us do our job."

I've been back to see many of them since that first visit, and their message, without hesitation, is that our government is on the right track, that we are doing exactly what they want us to do. They want us to keep our standards high. That encourages businesses that are developing green industries, for instance, because they can work from those performances to develop new technologies and work to new performance-based measures. They very much want to spend their time doing business, not filling out unnecessary paperwork. They are very clear on that.

As I said, companies like Engel, companies like Sihi Pumps are international companies that are competing all the time with their confrères around the world as to where the next plant will be developed. It's very important to them that their tax bases are level. It's absolutely vital for them to go to their parent company board of directors and say: "We want the next business in Guelph. We want the next business in" wherever in Ontario. The only way they can do that is by example, and it has to be by the kind of level playing field that we've been able to establish.

I'd like to tell you a couple of stories that I found very interesting. A constituent came into my office, who was a general manager of a very large corporation which was a subcompany from an American firm, and said to me, "Brenda, is the government giving out any grants right now to business?" And he smiled. I struggled for a few minutes, and I thought: "What answer does he want to hear? No, we're not giving out any grants, but I don't want to discourage this man" because he was looking to establish a second company from this larger parent company in Guelph. I honestly said, "Well, no, we are not giving out any grants," and his response was: "Good. That's exactly what I want to hear. I can sell Guelph, I can sell Ontario, any time. What I need to know is what is not available and what is available. If that's the case, no problem."

I hadn't talked to him for a little while, but I just got a note in the mail saying the new plant is going to be built in Guelph. It was done without government grants. That tells me that in the whole picture of what a company looks for -- infrastructure, health care, education, all of those kinds of things -- those companies are very confident that we are providing that whole package which is so essential when you're looking to a competitor.

There are other things too. Some of these key companies -- with Linamar, for instance, I think the owner, Frank Hasenfratz, has been Canadian entrepreneur of the year at least a couple of times, if not more. Bill Harrison has won international awards for his entrepreneurship. The companies these men operate are non-unionized shops, and when you walk into their businesses the first thing you feel is the excitement of the employees, who feel genuinely part of the business and they know that their ideas, their creative ways of making the business operate better, are listened to.

Sihi Pumps is a perfect example, where those employees very much feel part of the business. I can remember Wolf Haessler taking me through Skyjack when the election was just won, talking about the equal opportunity legislation. He said to me: "Take a look around, Brenda. You will see that we have disabled people, we have a wide ethnic mix. That's because our company is concerned about the kind of people we employ." The investment that each of those people feels, personally and financially, is quite palpable, and it really does work for them.

There are many ways to look at the human element. These people recognize what a good employer is, and they also recognize that that good employer requires a very broad, solid concept of what economic development for the province as a whole is all about.

There's another thing I might mention which I thought was interesting. I was recently asked to go to dinner. It was a 50th anniversary party put on by two companies in Guelph who had been doing business together for 50 years. They've developed this kind of symbiotic partnership. One company developed a trucking mechanism that suited the other company, which had a very difficult product to carry. It was Armtec, which makes huge, big metal pipes, and the transport company was MacKinnon Transport. They developed the technology to be able to work together in an ongoing relationship that's gone for 50 years. I've never seen a business co-exist in quite the same way. The gathering they had a couple of weeks ago was fascinating, because these people, even though they had every opportunity to find other competitors to provide different prices or whatever -- they were there because they had been able to use their creativity. The employees had wonderful working relationships. They had been able, together, to find new ways to continually improve their operations together to compete in the global marketplace. And these are both international companies.

While we're probably very lucky in the Guelph-Kitchener area in that we have such a marvellous access to a large market, and it is an international market and no doubt that's considered as part of why people would choose to come there, geography aside, I think these people would not be coming unless they felt that Ontario and our government's policies of considering the economic package as a whole -- taxes again, health care, the regulatory burden. Every dollar that doesn't have to be spent doing extra paperwork is money that each of these people can invest in their business and can then again employ new people.

1710

One thing I was wondering as I was listening here. It did occur to me that some of the businesses that could be really helped a lot are the small to medium-sized businesses that are just nicely getting started. I wondered if the ministry had ever or was considering any kind of mentoring kind of program. I know all the industries have associations, but it's occurred to me that after seeing this one cooperative kind of venture, there might be a possibility for large companies in a certain industry to be helping smaller companies. I wondered if the ministry had ever considered that or if there was ever anything in place to facilitate that.

Mr Grimmett: Mr Spina's the expert in that area. I'll let him handle that question.

Mr Spina: There are a couple of programs that try to foster the mentoring process. We have the wisdom exchange which takes place within the ministry. It has a couple of seminars a year that are developed and created. The agendas are developed usually by the partners, the companies. The province, the ministry, acts basically as a facilitator. On average we've been getting about 200 to 250 at each of these wisdom exchanges. They are funded marvellously by the private sector sponsors, who obviously are interested, because this is a target market they want to be able to reach. The participants at this one-day session set the agenda by sending in the topics they're interested in having. Whether it's enhanced distribution systems, export markets, whatever, they set the agenda and then we bring in people who can lead the seminars.

The beauty of this is that these people come away from this not just with the information but also with a network of other businesses that are complementary to them. Many partnerships have been struck in terms of business partnerships, not formally but client-customer kinds of relationships. They have also developed relationships where they act as mentors to each other. One may be more well versed in international exporting or with a particular export market, as an example, and another company chooses to team up with them to gain that knowledge.

We have them at various places. There's one coming up in early December in Ottawa, for example, which we call wisdom exchange east.

One of the other elements is through the self-help offices across the province. We're trying to change the scope of those offices to be more enterprise-type centres for smaller businesses, not just for startup but also for young businesses. With those multiple partnerships within the community, as we've already seen in places like London, Hamilton, Ottawa -- Thunder Bay is expanding its program; the Sault incidentally is expanding its program to bring in partners -- businesses can share with each other, but they can also develop that mentorship program.

So there are some programs which admittedly are not brand-new ideas created by our government, but they are good programs that at least have a foundation. What we're trying to do now is enhance them, refine them and at the same time deliver them more efficiently from our government's point of view by bringing in the multiple partnerships and the private sector partners.

Mr Rollins: One of the things I want to ask one of the parliamentary assistants is that we have developed over the last few years quite an extensive growth of parks, and we have started to readjust our thinking along the lines of the parks. Are there any partnerships that we're slowly getting into that you can let us know about, or is that something the minister is sitting with? What's the development of those parks in that process, along that line? I know we're not building new ones, but are we fostering some partnerships with private enterprise?

Mr Grimmett: The question is a very appropriate one. We, as a government, since we came into power, have examined the situation with all of the parks that we either fund fully or fund in some degree. With some of the partnerships that we have already, for example with the Niagara Parks Commission, we don't actually use Ontario government funding. They are partners of ours. They are able to operate in a self-sustaining fashion.

That is the model we would like to see developed with most of the partners we have in a funding situation. We are encouraging all of the partners we have to explore options in their local area, to develop partnerships with either private sector or with other public sector operators, and we're seeing those start to develop. We see that very much as the direction we're headed in. Out your way in eastern Ontario, we're also encouraging our partners there to develop partnerships with the private sector. Most of these initiatives should be locally driven because there will be different tourist attractions in different parts of the province that will dictate how such partnerships can be established.

Mr Cleary: I questioned the minister a bit earlier on this but I didn't get an answer that I felt was satisfactory, and since that there have been letters to the editor on a few things, comments in the paper. That's the Ontario Tourism Council where about 1,000 partners, many of them volunteers, community leaders, service clubs and businesses had worked together to develop a plan and then when that was presented to the minister, he turned his back on them and said it wasn't satisfactory. I wonder if there has been any reconsideration of this, because it sure upset a lot of volunteers.

Mr Grimmett: I had the opportunity to work with many of the people who were involved in the Ontario Tourism Council's research of and contemplation of the options that might be put before the minister. As you might recall, the previous government set up the Ontario Tourism Council and gave it a mandate to consult with the industry and come back to the previous government and make recommendations on how to market Ontario.

Those recommendations were fully researched. You're absolutely right that there was an awful lot of volunteer time put in by people like Michael Beckley, who is a very busy man. In fact, all of the people on the task force were very busy people who took an awful lot of their own time and put it in on a volunteer basis. They consulted widely with the industry. Certainly in my discussions with the industry there's a widespread respect for the work that was done. They finally came to the minister with a recommendation that we develop an arm's-length body, and the minister made the decision that we could not give up complete control of the marketing budget. It was a responsibility of our government that we market Ontario internationally.

The minister instead continues to work with the people who sat on the Ontario Tourism Council and all people in the industry and he has now formed a tourism marketing task force. That task force, the members of which have recently been announced, will develop a multi-year strategic marketing plan for tourism. We're going to be very aggressive in taking the advice from that task force to try and leverage more dollars from the private sector. We see the private sector as being quite willing to participate in marketing plans, providing some of their advice is taken by the government.

I'm confident from my discussions with the private sector operators in the tourism industry that they see this as an opportunity for them to have real input into how our government uses both public and private partner dollars to better market Ontario. We have certain markets that we want to target. I think the private sector can give us very good advice on how to market in those target areas. One of them that I'm sure you're quite aware of is Germany. It's one of Ontario's primary tourism markets.

We know from the work the ministry has done in analysing tourism results from past years that if we can get into certain markets and those people come to Ontario, those tourists spend more dollars in Ontario than domestic tourists or tourists from other jurisdictions. So we want to market in a more effective way in those jurisdictions, and we are quite confident that the people who are going to make up the advisory task force for the minister are going to be able to help us to better use public dollars, to partner with the Canadian Tourism Commission and put our dollars to good use in those target markets. We're quite confident we're headed in the right direction in that regard.

1720

Mr Cleary: How long is this going to take? You said you have a committee at work right now.

Mr Grimmett: This group is together now and we're hoping they will come back with recommendations very soon for the 1997 tourism year. It is an ambitious task, but we're quite confident that some of the decisions that are going to be made for the 1997 tourism year will be the result of consultations, and they will be much more helpful with regard to designing a five-year plan for the ministry. I would think the real impact of their recommendations will start to show up in the 1997-98 fiscal year.

Mr Cleary: You have mentioned German tourism. I know there's a company right now that's looking at Ontario to invest a substantial amount in a tour boat industry there. I passed on the information to them that the minister gave me. It didn't seem to satisfy them, but they're still working and hoping to put something together. They have a few representatives in eastern Ontario who are working very hard and have been working very hard on that. So I don't know where it stands right now. They're talking about putting four tour boats in Ontario.

Mr Grimmett: We're always interested in hearing of these initiatives and we have people both in the field in eastern Ontario and present here today who very much want to see that information so they can pursue this initiative. We want the international tourist industry to invest in Ontario. We want to encourage them to come here and invest in those kinds of projects. Those kinds of tour boat initiatives, we know from past experience, will help to spin off other benefits to the tourism industry in Ontario. So by all means, Mr Cleary, if you have information on that, bring it to my attention and the people who are here I'm sure will want to follow up on that.

Mr Cleary: I passed the message back that the minister gave to the people concerned and I understood that they were going to contact -- I had a book with names and I understood that they were going to make the contacts.

Mr Grimmett: Good.

Mr Cleary: I want to talk a little bit about the St Lawrence Parks Commission. It was touched on a bit earlier. There have been business plans sent to the ministry, and the municipality's been interested. They've been trying to get a meeting with the minister for a long period of time and I understand that in the last couple of weeks some representatives from the ministry had been in eastern Ontario walking the sites.

I just wondered if there's any information you wanted to share with us on that. The one park had been closed and the picnic tables have been used for the smugglers there to dock their boats on -- they've been floating. I would hope that would come to an end and something would happen. There's municipal interest, there's private interest, there's everything, but it seems to be going very slowly.

Mr Grimmett: I have had some discussions myself with some of the people from the St Lawrence Parks Commission. I know the minister has also met with them and I believe he's been to the site himself. People from the ministry have reviewed their recommendations and they have hired a consultant in the past who has made many recommendations, including a five-year projection on a corporate plan.

As I've said before, and as the minister has said to this committee earlier, the operations of all government agencies, including the St Lawrence Parks Commission, are being reviewed with the aim of making them more self-financing. As you're aware, the St Lawrence Parks Commission has a high amount of annual subsidy from the provincial government, and they have been quite helpful in terms of reviewing with our ministry strategies to try to make their operations more self-sustaining.

The corporate plan that they have brought to us most recently respects the direction that our government is taking to reduce expenditures and, in fact, they're coping with the reduction by the provincial government of $2 million in transfer payments for this year. We, as a ministry, will be considering the remaining four years of the corporate plan in the context of our broader program review. The review is expected to begin later this fall. We're going to consider alternative ways of delivering their programs and services, including potential private sector investments and partnerships that they are exploring.

Mr Cleary: So the one partnership that several groups got together there -- I don't know, I don't have it with me, but I gave it to the ministry the last time. They said they didn't have it. I guess it maybe went to education and training rather than tourism. Anyway, they're still interested and I don't know when they reviewed the plan, the minister of tourism or whoever did, what their comments were on it.

Mr Grimmett: They have developed a number of options that they're pursuing, including some possible partnerships with municipalities. I know on a weekly basis there are discussions between people from the ministry and people from St Lawrence Parks where they're looking at the various options available to them. The ones with the municipalities are particularly encouraging because again this is a locally driven solution, it's one that the local community will benefit from and that the local community will feel good about because they've developed it themselves.

Those are the kinds of partnerships that we're encouraging our partners, particularly St Lawrence Parks, to develop, and we look forward to hearing from you. I know you've been quite interested in this issue, and I note that ever since 1990 you've been working quite closely with the government of the day to make sure that this operation continues.

Mr Cleary: Almost had her once there. Anyway, would that be the Charlottenburgh park you'd be talking about right now?

Mr Grimmett: That's one of them, but I understand they're looking at other partnerships as well.

Mr Cleary: There are the three of them there, and I know there's interest in them all. As you know, with the government restructuring there are bigger partners there now. Municipalities have put their proposals in where they're amalgamating and going together, so that I would think there could be something done, but I was very disappointed that the minister never had time to meet with municipal council there, which would have come here at any time to do that. They never had that luxury though.

The other thing I was just wondering, the new ventures program was very successful in our part of Ontario and the government never lost money because it was just a loan guarantee. Is there anything like that in the making with your government or is that all dead?

Mr Spina: I can address that. No, it's not dead, Mr Cleary. The new ventures program was frozen, but right now -- and I was just looking for the exact numbers because I know the Royal Bank is very much involved in the program. Here we are. We've reviewed new ventures and the youth ventures programs, and those were terminated in April 1996. The student ventures program, as you know, was offered this summer, and 412 new businesses were started with loans of about $1.14 million.

The current status is that Minister Johnson terminated all the ventures programs except the student one which, as you know, operated, but they guaranteed loans of up to $15,000 delivered by banks and other financial institutions. Those are guaranteed 100% by the government and up to 50% of the bank's portfolio of these loans was protected by the guarantee.

1730

The Chair: I have to cut you there because it's almost the end of the day and Mr Martin still has time.

Mr Spina: In any case, right now the officials are in preliminary discussion with the banks and other institutions to redesign these programs for startup businesses.

Mr Martin: I want to return to the issue of allowing the free market system to take over and this notion that the private sector does it better than the public sector and the bigger question of the impact of that on all the people who live in a particular jurisdiction. I think I've said this before, but in my estimation, an economy needs to work for everybody, not just for the few at the top. I'd also like to, if I can, root what I'm saying into some practical experience, particularly in my own home town, Joe's old home town.

In Sault Ste Marie right now we have two franchisees, Loeb grocery stores, that are in a life-and-death struggle -- and that's no exaggeration -- with their parent the franchiser, Provigo out of Montreal. As we sit here right now, they're sitting behind security guards in their store to make sure that Provigo doesn't come in and change the locks on them.

We're not talking about fly-by-night, irresponsible operators here. We're talking about one guy who's been in the business for about 25 years now. He had a store in Blind River. He wanted to move up so he got a chance to come into the Sault and he built a store from scratch there and made it one of the best stores in town. He's by far and away an example of what it means to be a good corporate citizen par excellence, and also a good employer; and the same thing with the other gentleman who is under the gun up there right now.

This is an archetypical sort of free market operation. Franchisees are becoming more and more the order of the day. But we see the big guy, because he wants more profit out of the store, now pulling the rug out from underneath two families who have given him literally everything they own, every waking minute of their day, every ounce of their energy over the last 10 to 25 years, depending on the operator. They're not alone. There are about 20 others across the province in the same boat tonight.

That for me is an example of what happens when you have no restrictions, when there is no sense of fair play, when there are no guidelines, when there is no table, for example, where disputes can be arbitrated. They're asking your government, by the way -- and I'm working with the Minister of Consumer and Commercial Relations on this -- to bring legislation forward real quick so that a dispute mechanism can be in place and some of the other things that need to be done to make this a fairer relationship. We're working on that.

But I just wanted in the context of that to share with you some thoughts and there might be some time at the end for you to respond, and then again there might not be. These are two articles I picked up, written by Richard Gwyn, that talk about the sort of neo-conservative approach to life. The first one goes like this:

"According to the neo-conservatives, the prevailing doctrines of free market and of global free trade and of governments standing back and doing as little as possible -- preferably nothing at all -- will eventually make everyone richer and happier.

"That this isn't true within each nation-state has long been obvious. In all of them, whether developed ones like the United States, or developing, like China, income gaps are getting wider. In Britain, which has just edged the US out from the top spot in the international inequality table...income gaps are now wider by some calculations than in some of the world's poorest nations, like Nigeria.

"The whole justification for global free trade, though, is to allow multinational corporations to site their production facilities wherever their goods can be produced most efficiently." And this is what we're buying into as a province. "Since minimal wages (and also lax environmental, health and safety regulations) are the most efficient of all imaginable production circumstances from the viewpoint of any multinational, this ought to mean a progressive redistribution of wealth from high- to low-wage countries.

"Nothing of the sort is happening" -- it's like Peter Kormos said during the leadership race of our party, if that kind of environment is what attracts investment and creates wealth and makes for a better standard of living for everybody, then Third World countries would be booming -- "or is happening only sporadically, as in parts of southeast Asia. According to the UN's Human Development Report, 89 countries, or almost half of the UN's member-states, are poorer today than a decade ago.

"Overall, the share of total global wealth going to the poorest 20%, or one in five people in the world, has declined from a pathetic 2.3% in 1960 to...1.4% today. Simultaneously, the share going to the richest one in five has soared over the same three decades from 70% to 85%."

By the way, the heading of this article is "Income Gap Swallows Most of Humanity." I'm afraid, and my concern is that we're heading down that road and we'll end up there some day. Maybe not me or you or any of us here, but our children will end up in that circumstance, and that bothers me no end.

Let me go on to the second article here, just take a piece out of it. This is a quote:

"Did you know that:

"`Job losses are not the result of some temporary downturn in the economic cycle but are the result of structural change.... The lights are going out for whole categories of employment. We are entering an age of hopelessness, an age of resentment, an age of rage.'

"And that:

"`The slow distribution of wealth that has occurred over the last centuries is being rapidly reversed.... The disposable income of the majority will be drastically reduced. We are witnessing an expanding underclass.'

"And that:

"`The big question of the coming decades is how to find a socially acceptable means of dismantling democracy.... Governments chosen by the majority are governments chosen by losers. Democracy will degenerate to being the means of governing the immobile and dependent service workers.'

"And that:

"`Politicians may promise, but markets decide. Governments are impotent.... The world belongs to the global corporation.'

"Now that you know all of this -- at least have heard it proclaimed -- do you in fact suppose any of it is actually wrong in the sense of it being inaccurate, rather than immoral? Do you doubt all of these forecasts won't in fact be fulfilled, indeed are already being fulfilled? They most certainly will be unless there's a popular backlash against this kind of future, mobilized by some inspirational new leader and sustained by some new set of socioeconomic ideas about how societies should organize relations among their citizens.

"These alarming forecasts matter because they aren't the products of any paranoid lefty. Instead, their author is a pristine pure neo-conservative," a fellow by the name of Ian Angell.

Mr Rollins: Yes, but he has membership in the NDP.

Mr Martin: No. "Ian Angell, a professor of information systems at the London School of Economics.... He's one of the few" people, according to Richard Gwyn, "who's truly intellectually honest.

"The neo-cons you keep hearing about -- Margaret Thatcher, Conrad Black, Newt Gingrich, David Frum and the rest -- all blather on about how the free market and global free trade, minimal taxes and minimal government, will liberate all of us to become freer, richer, more self-reliant, more creative, more responsible.

"It's hard to believe any of them really believe a word they are saying. The consequences of the neo-conservative creed have long been clear. The two most market-oriented Western societies, the US and Britain, are today the most unequal in income terms in the industrial world. Both are more unequal than either have been in the past half-century. In Britain, some statistical measures show incomes may be more unequal now than they were in the middle of the 19th century.

1740

"Neo-cons like Gingrich and Frum, though, must operate in a political marketplace that's still, sort of, democratic. Persuading voters to vote for their own impoverishment requires the kind of rhetorical skills it takes to persuade turkeys to vote for Christmas.

"Angell is outside of politics. He can afford to be honest."

It goes on to talk about this guy believing in the neo-conservative agenda but also being honest enough to paint the picture as it actually will happen. My question is -- I don't even know whether I've got a question.

Mr Grimmett: Now there's intellectual honesty.

Mr Martin: As I said before my last round, you folks really, honestly believe that what you're doing is right and in the best interests. When you read this kind of stuff and you look at the statistics that are being pointed to, doesn't that worry you? Doesn't that concern you at all? How do you respond to that, either one of you?

Mr Spina: I'd be happy to. First of all, even though he claims that he follows a professor's comments, you're still looking at the opinion of a journalist. I place less value on that than a lot of others. You have to look at the fundamental philosophy, I guess, of western versus other governments, North American. Fundamentally, I think if you look at all the Third World countries you referred to, they are government-dominated. If you want a clear-cut example, historically, of governments that tried to develop an equalized income system, it was the Soviet Union and it didn't work. They fought to keep that system in place for 70 years and it didn't work. It finally crumbled down around them. The reality is that now Russia is beginning to emerge as a country that is able to participate in the real, not the phoney, global economy.

You have inequality in income in a capitalistic society. That's the whole, fundamental premise. But I would pose this question to any of the economists over the years, particularly since the Second World War, and it's this: Was there a large underlying lower-income class through the l950s and l960s when we were in a booming North American economy? Not much. It was there, but not much. When did it begin to surface in a very hard, realistic way? In the last 15 to 20 years, as social systems began to command a greater portion of government dollars, as governments began to interfere in the free market process, as unions began to dominate in the role they played in the operations of business. Unquestionably unions had a role to play in industry, particularly for the protection of workers in many ways. But the reality is that they really severely impinged upon the free market's ability to provide prosperity for all the people within that environment.

I'm going to refer to a comment that you made earlier about the franchise situation. We are looking to restart and change the franchising structure. We cannot interfere with the Loeb situation because it is a contractual dispute that is in the court right now. I respect the comments you made on that one, Tony, but we are looking forward to changing the franchise agreements.

Mr Jim Brown (Scarborough West): One of the biggest impediments to the development of small business is sources of capital. In the United States there are 20,000 competing banks, and they have 10 times the population we do, so theoretically we ought to have 2,000 competing banks. We have six. I know from my own experience with friends with small businesses that they get beat up bad by the demands of their banks for overcollateralization, five times what people's lines of credits are, and paperwork that requires full-time accountants, maybe more than one, just because of the needs of the bureaucrats in the bank. Small business creates about 85% to 90% of all new jobs, and Canadians have a lot of money. Ontarians salt money away and don't put it towards job creation.

What do we do with those banks that are monopolistic gougers and controlled by the federal government through the Bank Act? I'm wondering just what we can do to help the small guys create jobs by affording them access to capital. In a big company like Algoma it probably costs $100,000 of capital to create one job, yet in a small company you probably create three or four jobs for $10,000. The usefulness of capital for small guys is many times that for big guys. You know there's only one way for the small guy to go, and that's up, and he's going to employ more and more. The other thing is that usually the small guy is a Canadian, an Ontarian, and he's probably going to stay here, his roots are here, whereas the big guy can come and go depending upon which economy is better.

What I'm saying is, how do we get money to these small guys? How can we take the thing into our own hands and take it away? The banks are just terrible. They're awful. They'd rather loan money offshore, where there are fewer regulations and they don't have to conform to the regulations, than loan it to a small Canadian entrepreneur.

Mr Spina: Thank you, Jim. The interesting thing is that he sat on an access-to-capital committee with me, so I'm wondering how much of the answers he knows already.

I think it's been clearly identified and articulated particularly for the small business sector that trying to access capital of less than $10 million has been a critically difficult area in which to get money, whether it was debt capital or equity capital.

When I was appointed co-chair to the access-to-capital committee with Rob Sampson we tried to address the various issues, and it's important within this context because, as I mentioned earlier, it fits together with the mentoring and the educational element of small business. We didn't quite get to that with Mr Curling's question earlier because of time, but I know I have time now.

As you know, the banks kind of missed the boat a few years ago when a lot of loans went to the big, major companies, the international investments, and they were in such a hurry to get involved in it that they made some very foolish loans and got involved with outfits like Olympia and York and so on. But this time around I think the banks are one element of the overall access-to-capital environment that, for a change, have begun to realize and acknowledge that this is a major market they must get into now or they'll miss the boat again.

Unfortunately they caused a lot of problems over the past few years. People in the field zeroed in and looked strictly at the numbers, without the human side that Mr Curling talked about earlier, in looking at that businessman or that businesswoman and seeing how viably they could operate that business and be a partner with them. From what we can tell in having spoken to a lot of major banks, they recognize this and are in the process of changing it.

1750

I think we have seen, just to dwell on the banks for a moment, that the Royal Bank has begun a new program, CIBC has launched a new program and now the Bank of Montreal has announced a new program, very specific programs geared to and aimed at that small business entrepreneur.

We have tried to create some incentives for banks to lend to small businesses under the penalty surtax that was announced in last May's budget. The difference between our approach and the federal government's approach was that the feds just slapped on the surtax. We imposed the surtax, but on the other hand we also allowed them the opportunity to earn that tax back by demonstrating the amount of money they have put into the small business sector.

We are looking at the labour-sponsored investment funds, a good idea in concept. The fundamental problem was that the investment fund managers were more concerned with giving an ROI to their investors than with getting the money out to where it should have gone, to small business, virtually disregarding the fact that the investors got a tax credit. So they shouldn't be looking for a 10% or 12% return on their investment because they're already getting a tax credit out of it. They are now under severe pressure to get a significant amount of that money out to the private sector. I think we made recommendations to Minister Eves that the existing status remain, and they are going to have to get that money out by 1997 or be subject to a $30-million to $40-million penalty, in one particular fund's case.

One of the other things is that we would like to see the transition, or the shifting perhaps, of some of those LSIF-type models into being more community-based funds. If we are successful in making that transition and that shift and marrying that with perhaps the enterprise centres I talked about earlier, those investors will have a qualified base of people who have learned how to run a business who can now participate as investors, as debt or equity lenders, to be part of that business.

Mr Jim Brown: My knowledge of labour-sponsored investment funds or union-sponsored investment funds, and this is my own feeling, is that it's one of the biggest ripoffs going inasmuch as oftentimes the unions that get involved rent their name for a royalty or a piece of the action and don't really get involved in other things. For a $500 cash investment you get a deduction in tax for I think $5,000, so the taxpayer is being ripped for, in effect, $4,500. Then this money sits in a humongous fund. I know one of the funds has $800 million sitting in treasury bills for which the taxpayer has been ripped gloriously; 90% of the money that was invested goes back to the taxpayer. The small business people just want to go out and be independent and hire some people and put them to work and just do their own thing. How do we get at this glorious ripoff, the labour-sponsored investment funds? This is what I know about them and it's an awful situation. The taxpayer has really been hosed on it.

Mr Spina: As I mentioned, the first step was to change the rules under penalty, as ministries did back in the May budget. The next step is to follow through and change the provincial guidelines, at least with the provincial LSIFs, to ensure that investors still have the opportunity to participate. That's an important element. You don't want to chase those investors away, because that is what develops that pool, but the reality is that the pool of money does have to get out to those businesses. We need to push the investment fund managers to look at the applications for loans, whether it's a debt or an equity investment, and get them involved. I guess the first kick in the butt is to penalize them if they don't put that money out. But the reality is that we have to change various things around so we can make it easier for businesses to access capital.

Sorry, I guess we're being called for a vote.

The Chair: We've been called. It being almost 6 of the clock, we will stand adjourned until tomorrow, immediately after routine proceedings.

The committee adjourned at 1756.