Legislative Assembly of Ontario

MINISTRY OF ECONOMIC DEVELOPMENT, TRADE AND TOURISM

CONTENTS

Wednesday 20 November 1996

Ministry of Economic Development, Trade and Tourism

Hon Mr Saunderson

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 BertJohnson (Perth PC) for Mr Rollins

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

for Mr Vankoughnet

Also taking part /Autres participants et participantes:

Mr TonyMartin (Sault Ste Marie ND)

Mr JosephSpina (Brampton North / -Nord PC)

Clerk / Greffier: Mr Franco Carrozza

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

The committee met at 1541 in committee room 2.

MINISTRY OF ECONOMIC DEVELOPMENT, TRADE AND TOURISM

The Acting Chair (Mr John Cleary): I call the committee to order. The chairman is a little bit late in coming today so I'll fill in until he gets here. Tony, would you mind starting in rotation? You must have some questions you'd like answers to.

Mr Tony Martin (Sault Ste Marie): Yes, I've got a couple of things that I could go with. Welcome back.

Hon William Saunderson (Minister of Economic Development, Trade and Tourism): Thank you.

Mr Martin: This is the last day we have. Over the time we've had together I've raised on a number of occasions some indicators I've been looking at that are not painting quite the same rosy picture that you, Minister, are presenting. Some in our community today would benefit from a rosy picture as opposed to a more realistic painting of the economic reality out there and the impact that has on the lives of people.

You know that my concern re the economy is that business that operates in Ontario does well and that Ontario continues to be a good place to do business. That also has to contain in it some sense of concern that we have enough jobs for people to work at and that those jobs pay well, that they have attached to them benefit packages that see them able to look after their families, their children and themselves in terms of their health, and some benefit package or pension plan that would take some onus away from simply government having to look after people in their old age.

All the indicators I look at these days tell us that is not what's happening. In Ontario we are moving from a position of some relative stability, of some optimism, of some confidence to a position where we're not sure any more. We have unemployment that is now going in the wrong direction. We've seen unemployment in the last reporting move back into double figures again. We see groups that traditionally concern themselves about the plight of the poor raising red flags about poverty and children and the impact of decisions that you as a government are making under the aegis of creating a better environment for business and for business to invest.

A lot of people are getting hurt, and to me that doesn't speak to long-term viability and health and quality of life for all those people, who live in the province of Ontario and have a right to that.

The first question I have for you is: If unemployment continues to grow, if bankruptcies -- there was an article in today's Toronto Star -- continue on this "record pace," so called -- it says, "Failure rate expected to increase next year," and some experts are predicting that -- if poverty continues to be a growing problem and if groups that I think we all have some respect for, such as church organizations, continue to talk to us about the impact of what we're doing as government on those whom they are most concerned about, what plans do you as a government have in place to take corrective action? Are there are any benchmarks? How high is "acceptable" unemployment? What percentage of bankruptcies is acceptable to you as minister and to your government? What level of poverty is okay? Do you have any benchmarks?

Is there anything we can look at that tells us you are going to take some corrective action if we continue down this road? I'm concerned that we are and I want to know what you as government, because you still have two or three years left in your mandate, are going to do if these disturbing signs and figures continue to grow.

Hon Mr Saunderson: First of all nobody likes to see anybody unemployed. I share a concern about any time there's unemployment. Employment in Ontario has risen in 10 of the last 14 months, and I think the unemployment rate at the end of October was 9.1%, which was down from 9.2% in September, so that's a slight improvement.

Mr Martin: Actually, it's at 10% now. The last report that came out had it at 10%.

Hon Mr Saunderson: Not in Ontario. I think it is in Canada but not in Ontario.

Mr Martin: Ontario contributes to that.

Hon Mr Saunderson: It may, but I'd like to say that Ontario is below the national average by about 1%. There's been some very good job information, Mr Martin. There were 27,000 new jobs in October, of which 8,000 were full-time and 19,000 part-time jobs. The reason there are a lot of part-time jobs is the situation where a lot of operations don't wish to hire on a full-time basis because there are payroll taxes when you get into that full-time involvement. That's why we're trying to reduce payroll taxes. I think by reducing payroll taxes you tend to create more full-time jobs.

Since we have been elected there have 132,000 net new jobs created in this province; 114,000 of those were in the private sector. I think those are very encouraging statistics. In other words, employment is up in 10 of the last 14 months, and I think the reason employment has increased is that business confidence is being renewed in the province. I think being fiscally responsible, cutting the personal income tax rates, removing barriers to private sector investment -- in order words, deregulating -- are very important reasons for people wanting to start new businesses in this province.

I have been in Japan, as you may know. I just got back yesterday. When I was there I visited a number of companies that already do business in Ontario. Many of them have been planning to increase their facilities here. Honda and Toyota already are. Just a quick rundown of the companies we visited is pretty indicative of the variety of businesses that are here. We visited a company called Yuasa, which has a large battery operation out in Mr Spina's riding, I think. They certainly are planning to expand in due course. They are very pleased with what they are seeing in Ontario at the present time. Mr Spina recently has met with them, and I think he would confirm that they are very satisfied with the economic environment here.

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We also went to Nippon Tel and Tel, which is looking for partnerships in North America. I am very encouraged and optimistic that there will be something coming out of that visit to NT and T. They are the second-largest telephone and technology company in the world next to AT&T.

We spoke to Honda and they, with their expansion and a new line of car, are very positive about this province for the reasons I have just given. One of the management consulting accounting firms, Asahi and Co, which is associated with Arthur Andersen around the world, had some clients in to see us, and I can tell you they are very optimistic and enthusiastic about what we are doing.

Keep in mind that in Japan they are overly regulated. They like the fact that we are deregulating. Their personal tax rate is going up, if anything. Ours is coming down. Our deficit is being brought under control. They like all that. By the way, another thing that is influencing these companies when they talk about Ontario is that we are reforming the labour situation in this province -- in other words, our Bill 7 versus the previous government's Bill 40.

Suzuki Motor Co is in partnership with General Motors at the CAMI operation near Woodstock, or Ingersoll. They voiced concerns about some labour legislation that is bothering them a little bit. I have spoken to the labour minister since returning, and she has informed me that there is more to come in workplace labour legislation. I think that will keep our Japanese friends happy.

I mentioned visiting Toyota and I wanted to mention that we spoke to the Kankeiren in the Osaka region. That is like a large chamber of commerce for that community. They are optimistic from what they heard from the group that was here earlier in the year, Keidanren, which came over to take a look at what is going on in this country and in this province.

The last corporate visit we made was to Sanyo. That company is well known for its household and personal appliances, but they have teamed up in home building and there is now Canadian home building going on to a great extent in Japan and many Ontario companies are taking part in that. The Viceroy site is the one I went to.

Throughout all the things we heard when we were in Japan, they are very impressed with what we are doing and that is why I think we are going to see more Japanese investment coming to this country. With big automotive manufacturing from that country going on here in this province, automotive parts suppliers are taking a hard look. I've already mentioned one company that has set up in Listowel, the Moriroko Co, and I met the owners when I was in Japan, but there is another one to be announced very shortly and a couple more down the road.

You asked about unemployment. I say the unemployment situation in this country is getting better. I wish there were none, but there is some. You asked about bankruptcies. I thought I would just tell you about bankruptcies. A lot of companies, when they get started, are badly organized, and often in times when competition is very intense these companies have not laid proper plans, so I don't think you can use bankruptcies as a measure of what's going on in the economy.

Poverty: I think the way to eliminate poverty is to create jobs and that's what we're doing. I gave you those net new job statistics. But also we're doing a great deal to make the job climate much better in this province. In the last 12 months, by the way, 68% of the new jobs created in Canada were generated in Ontario, so I think Ontario is leading the way as far as new jobs are concerned. From September to October there were 42,000 jobs created in Canada, 27,000 of those were in Ontario, or 64.3%. I think Ontario is leading the way and that pleases me.

All regions in Ontario have shown improvements in employment, by the way, in 1996. In the southwestern region of the province the highest gains in employment have been shown to be at 2.9%, followed by the central region at 1.7%, the GTA at 1.1%, and northern and eastern regions at just around 1%, so there is very encouraging news out there about the job situation in Ontario.

You asked what our government is doing. I think we're creating very much an open-for-business environment in this province, and the Japanese, as an example, have picked up on that. It's also happening in other countries.

Mr Martin: If I might, Mr Chair, because I know you were giving me the signal that my time was up, I've got to ask one question. The minister, in his usual style, goes on and on. He seems to have --

Hon Mr Saunderson: It seems to be the style in this place.

The Acting Chair: Make it quick, Tony.

Mr Martin: I'd like, if I might in two minutes, to sum up and ask the minister again so he can think about it, although he doesn't really have to, because I'm going to get the same kind of answer out of him. We'll have to agree to disagree on a number of things. Obviously, your view of the world is different from mine, but if recognized and respected organizations and think tanks and people who do work around statistics six months or a year from now indicate to you, as is said in this article today in the Toronto Star -- and this is Duke Stregger from the Credit Counselling Service of Metropolitan Toronto. He says: "I see a continual rise (in the bankruptcy rate)," it's not going down. "It's increasing. And unemployment is not going down. If anything it's going up a little bit."

All these people can't be wrong. At what point do you become concerned? That's my question.

The Acting Chair: Thanks, Tony. Maybe we'll let the minister think about that, as you suggested earlier.

Mr Martin: Yes.

The Acting Chair: We'll back up to the Liberal Party now and then we'll get in the proper rotation, the Conservatives next. Mr Lalonde.

Mr Jean-Marc Lalonde (Prescott and Russell): I have a few questions. Knowing that the ministry has put together a Team Ontario -- I call it a team, and I think it's the official name that your people have. You were in eastern Ontario last Monday. I have to apologize that I couldn't attend this launching of your Team Ontario. I wish I could have made it, but I was just advised last Thursday about it. There are a few questions. Even though I couldn't attend I had a guy by the name of Brian Bender from the town of Hawkesbury who did attend to replace my attendance there.

You're talking about a marketing strategy during the launching of this program. Could you explain to us what type of marketing strategy we are going to have within this Team Ontario program?

Hon Mr Saunderson: First of all, it's a program called Market Ontario. The slogan is The Future's Right Here. Yes, you were invited. I was not in Ottawa. I was in Japan. We did an announcement from four locations abroad, Tokyo, Frankfurt, London and New York, and then we did locations in Toronto, obviously, Ottawa, Sault Ste Marie, and London, Ontario. The package is this. I don't know whether you've received that yet, but I think it's in the process of being distributed to all MPPs and their offices. It will tell you about it.

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Basically what we want to do is to get Ontario back on the radar screens in countries where companies are looking to make foreign investment. We have found that around the world we just aren't on the radar screen when companies are looking at where to invest. We have not had a marketing scheme for this province in over 10 years -- the last two governments, that's what we're referring to. We needed something like this to get Ontario back in the game. What we want to do is make sure that when people are looking for a place to invest, they keep Ontario in mind, that we're first in their minds as a place to make an investment. So the object of Market Ontario -- that is what it is called -- is to increase Ontario's share of foreign direct investment in this province.

Basically what it consists of is major media advertising around the world, but particularly in business magazines around the world. We're concentrating on four languages to start: Japanese, English, French, German. Those are the areas where we get most of our investment from foreign countries. The first one is the United States, obviously; the second is Great Britain; the third is Japan; and the fourth is Germany. We're convinced that there's a lot more business in those countries for us to attract to this province, so for the first time in a long time we are having a marketing program, major media direct target marketing where we will directly target companies in certain countries. That was one of the reasons I was in Japan.

There will be a very exact and comprehensive data base that we are building up on whom we should be contacting, and we're asking some of the companies and the people of those companies who have been in Ontario to help us target companies. As an example, Tom Kawamura, who was in charge of the Toyota operations in Ontario for a few years, and I think -- no, maybe there aren't any people from that region here with us today -- but I had a good meeting with Tom and Tom is now the managing director of Akebono Brake in Japan. They have one plant in the United States; it's our hope that they might have a plant in Ontario. He is going to help us target some companies in Japan, so not only will we be targeting ourselves but we'll be using the people who do business in Ontario to help us target other companies in their countries.

We're going to have a business ambassador volunteer system where we ask all of our MPPs of all parties if they want to be ambassadors for us to market Ontario when they travel. This is what the kit looks like. It comes with a video. The video is about 10 minutes in length and it is a very fast-paced video which I think shows Ontario in a very good light and talks about how active a province it is. Those kits are available and so is the video.

We'll be doing direct mail as we target companies or sectors of the economy. Of course, we'll be having special missions by ministers and the Premier and MPPs who are travelling, and we will be sending those people to the areas where we think we can do the most good. I think we have to concentrate our dollars on marketing Ontario more to those countries that supply most of our investment capital and I am going to be working on that with my ministry, now that I have been to Japan and observed the potential there. I think there are some parts of the world where we spend money marketing Ontario and maybe those should be reduced and more concentration should be on the United States, Great Britain, Germany and Japan because that is where we get our biggest support from.

We will also be showing up at trade shows on this Market Ontario plan. We have a World Wide Web site, as you know, for our ministry and the government and the province. We will be selling that to companies to look at. We will be making the Ontario Investment Service much more interactive and use it as a marketing tool for the province. We will be showing our video on flights, in-flight movies. When people are on planes they have time, as many of us do, to watch movies and we are hopeful that this will catch people's interest.

Our objective, if you want to boil it right down, is to increase our share of foreign direct investment in North America by two percentage points over five years. That would raise our share of the money that is invested from overseas in North America up to about 8.6%. It's currently around 6.6%. If we do that, it's our feeling that we will create somewhere in the neighbourhood of 250,000 new jobs.

The budget for Market Ontario, for those of you who are interested, for a full fiscal year -- and the first full fiscal year will be the year ending March 31, 1998 -- will be $17.8 million.

I'd also like to point out that the launch we had was a nice marriage of the private sector and the government. I think the private sector contributed somewhere between 55% and 60% of the cost, which was around $200,000 to have this launch that we did this week.

Mr Lalonde: May I interject, Minister?

Hon Mr Saunderson: Yes, you may.

Mr Lalonde: I fully agree with the extension of our marketing overseas and also towards the Asian countries. Knowing, and I think you have had one experience, that we have other provinces that are looking at Ontario at the present time to move to or to go to the States, is there anything in your program that would help municipalities to do some marketing in other provinces of Canada?

Hon Mr Saunderson: I guess the direct answer to that question is no. We know that next to California, Ontario is one of the most targeted areas, or has been, to lure business away from. That's not happening now but it was in the past. But you're wondering if there is some aid to municipalities to get business to their municipalities.

Mr Lalonde: When I say business, just towards the marketing part.

Hon Mr Saunderson: First of all, I think that this concentrated marketing effort is going to focus people to think more of Ontario; therefore I think communities will benefit from that. We will certainly, in our ministry, work with any company that wishes to come here to help them find a location. There is one that we've been talking about as far as you're concerned, and we certainly stand ready to help companies that are looking to find maybe facilities, old buildings, that type of thing.

Mr Lalonde: I'm just looking at the marketing side at the present time. I'm not looking for any other help.

Hon Mr Saunderson: I think the kit that we put together, the material, would certainly help in that regard.

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Mr Lalonde: Okay. I should ask the question directly: Is there any help to a municipality that wants to put out brochures that would be sent overseas to other provinces to market their industrial area, let's say?

Hon Mr Saunderson: Yes. I think if that area wants to produce its brochures, there's nothing to stop us when we are making our travels from taking various brochures with us from municipalities or areas to say, "Here is an example of Ontario areas wanting to attract foreign business."

Mr Lalonde: My question was direct, though. Is there any help to develop this brochure?

Hon Mr Saunderson: No, there's no help in the way of financial help.

Mr Lalonde: Thank you. I appreciate your answer.

The Chair (Mr Alvin Curling): That's your time. We now turn to the Conservatives.

Mr Toby Barrett (Norfolk): I want to continue discussion of trade and development and reference some of the economic indicators you've mentioned, employment for one. I'd rather concentrate on employment than unemployment and bankruptcies if we are to send out a positive message around the world.

Tax cuts: I consider that another economic indicator that we certainly have control over within this province. I wish to ask you, Minister, how we're stacking up from the ministry's perspective with respect to economic development and trade not only internationally but also within our country and within Ontario. You had mentioned the creation of 132,000 net new jobs since June 1995, and I understand this represents nearly 60% of all the jobs created in Canada. More recently, StatsCan figures in October indicate 27,000 new jobs created in Ontario.

I recognize there are other factors beyond tax cuts that are contributing to this. Some of the best economic news in our country is continuing low inflation, a very low inflation rate and a downward trend in interest rates. I understand inflation has been sitting for the past year well below 2%. Across the country it's sitting at about 1.4%. I'm wondering how we capitalize on that with plans through your ministry.

The Bank of Canada lending rate is very close to 3%. The chartered banks' prime lending rate is also, as I understand it, now below 5%. This drop in the prime represents the lowest rate in about 40 years and we're very close to a Bank of Canada rate that was set back in 1935. Again, there is tremendous potential there to combine what we are proactively doing in Ontario with some of these larger trends in our national economy. There's certainly good news for home buyers with a low inflation rate and good interest rates.

Our Canadian dollar has to be very important. I've talked to a number of smaller companies in my riding that are really keeping their fingers crossed that our dollar rate is going to remain at pretty well the same ratio it is now compared to the US dollar.

Exports are very strong nationally. I don't have figures for Ontario but I understand that Canada has posted a current account surplus in the second quarter of this year. This is the first time in about 12 years that we've been able to report a surplus.

Putting this in context, we still have a tremendous debt. It's about three times the size that existed at the beginning of the ruinous Rae government regime. We have to pay the piper on that one. We are cutting government spending; everybody knows that. We are cutting red tape. But I'm just wondering with respect to tax cuts, given the kind of economic environment that has developed in recent months, how is our ministry capitalizing on this, again not only from an international perspective, how that shakes out for business here, but as well domestically as far as interprovincial trade is concerned, for example?

Hon Mr Saunderson: My response to that is the whole idea of Market Ontario, because I don't want to give the impression that Market Ontario is strictly for dealing with foreign countries that have invested in Canada. It really is a way that we get out the good news about what's going on in Ontario, and we have to keep being missionaries even in our own province because I don't think it's understood yet. I was amazed when we were in Japan that they didn't know the government had changed here. I think a lot of small businesses still don't understand the advantages we've got here and what we've been doing over the last 16 months. That's why we have to keep hammering away, saying the commitments we've made, as in the Common Sense Revolution, and we have to keep saying that information all the time to make people aware of the good situation in the province.

There is a litany of things that we've done since we got elected and that has to be conveyed to small business. I know Mr Spina, who has been covering small business, has spent a great deal of time making sure they're well aware of what's been accomplished in the province.

I think our job in our ministry is to facilitate new investment and expansion of existing investment in the province. I've said before that our ministry is very much organized like a management consulting operation where we have very skilled people of great knowledge who are there to help people find a site for expansion, to explain how to do a marketing plan. I'm happy to say that we are enlarging on such events as the wisdom exchange, as we are having a wisdom exchange in Ottawa in the first week and we are looking to have probably a few hundred people attending this event. We've already had some in Toronto.

I guess our job in the ministry is to be out there selling. We have a field staff that's out there. I met with them a couple of weeks ago and said that they are our eyes and our ears in dealing with the business community and that they are there to spread the good news about what's being accomplished in this province.

Without going into all the things we're doing -- I know that's not the end of our 15 minutes -- I'm happy to answer any other things you would like to raise.

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Mr Barrett: I'm wondering more specifically -- we mentioned yesterday there are some local companies in my riding you know a little bit about, the products that are coming out of my riding. Many of these companies are just getting into the export game. They are not multinational corporations, they are not big players, but they have an intense interest in promoting Ontario. There's one example of a trucking company in my riding that has trailers that travel the highways in the United States and they're very keen on putting the Market Ontario logo on both sides of their trailer. Another company is willing to pay for that.

You've mentioned the economic development staff who are around Ontario and I'm wondering -- we talked about this a bit yesterday -- what we can do at the local level to touch base and to tie in with this cadre of public servants who are available in the province, basically I think to capitalize on the interest of some of the little guys who maybe don't have a team of salesmen overseas but are keenly interested, very simply, in helping out.

Hon Mr Saunderson: You asked about the slogan The Future's Right Here. We want to be able to use that as a sticker type of thing. We are looking into any liabilities that may be involved. We have to clear that legally, and we'll keep you up to date on that. But it is a good slogan and I think it would make sense to put it on vehicles and that type of thing, so that's something we're working on.

I referred to wisdom exchanges earlier. Not every company qualifies to come to a wisdom exchange because they tend to be innovative growth firms and not every company falls into that category. But one thing I've seen at those wisdom exchange events is that people are anxious to get into exporting. There always is a part of all of those exchanges that deals with exporting, so if a company qualified to come to the wisdom exchange, that would be one thing.

The Ontario International Trade Corp could certainly assist those companies that you're referring to as far as getting into the exporting business is concerned. Keep in mind, and you know it, that exports have saved this province's economy, saved this country's economy because of the strong economy in the States and in other parts of the world. If we weren't exporting, we would not have the economy that we have today.

The Ontario International Trade Corp provides a wide range of services to assist Ontario firms to build up their export capabilities. The best thing I would recommend is that if we can in any way send somebody out to those companies, we'd be happy to do that, or they could come here and talk to us in the ministry because it's a one-window access to help Ontario companies pursue international trade and to expand export markets. We particularly look at small companies in this area because a lot of them don't know how to do it, and I think that's what you're saying.

We would like to, with the SMEs, expand that base of exporters to 1,000 new exporters by the year 2000, and I don't think it's a hard thing to do. I think our export of goods reached a total of $133 billion in 1995 and our services amounted to $18 billion. But you're talking about goods, I guess, rather than services?

Mr Barrett: There's one factor I'm thinking of. My local economy and much of the economy of that part of southern Ontario is more in the category of hewers of wood and drawers of water. I'm talking of agricultural produce: tobacco of course, ginseng, soya beans that are exported; raw steel; auto parts -- again, there's value added. Much of our traditional economy has been the primary products like that. I guess my only thought on this is that it's crucial that we continue to support our own Silicon Valley as much as possible but we cannot really ignore the importance of continuing to do value added. We've known this for decades, that we cannot continue to just export raw material. With so much of my part of Ontario it's pretty important to take a look at our basic traditional products which are being exported and probably could be exported in a more finely tuned form or value-added form.

Hon Mr Saunderson: There is a program called new exporters to border states that OITC runs; they are field seminars. If you would like to be in touch on behalf of your constituents, we would come down to your area and run a seminar on exports. I think that's probably what you're looking for. So it's being done. It's called NEBS, for short. Just be in touch with the ministry, then that's available if you would like.

Mr Barrett: This would be very useful for local chapters of the Canadian Manufacturers' Association, for example, chambers of commerce, the board of trade, obviously. Thank you.

Mr Wayne Wettlaufer (Kitchener): Minister, welcome back. I was very high on the Market Ontario launch the other day. As you know, Kitchener has a fair amount of German investment -- not enough, mind you, but we have a fair amount. The German community has been more active lately in investing in land development and real estate but we would need a whole lot more in the manufacturing area. Outside of the Market Ontario launch, is there any other discussion going on with the federal government to bring more German investment into our area?

Hon Mr Saunderson: Last year the federal government had a chap called Bill Waite who was the former chairman of Siemens Canada who spent about three months in Germany. I met up with him in Germany last January and February and he arranged visits to companies and seminars which were very good. As a matter of fact, a couple of those visits we made paid off. They weren't into your area, by the way, these two specific ones, and the federal government is looking to maybe do that again with him in Germany. He goes over there and his costs are paid, but he's basically a dollar-a-year person. He feels that he wants to give something back to a country and a province that he did very well in. The federal government is looking more and more at that type of thing, and we're trying to connect with them through Minister Eggleton and Minister Manley.

Mr Alvin Curling (Scarborough North): Minister, now that you have returned and you said you have learned so much in Japan, and I'm convinced you have -- you mentioned that Japan didn't even know we have had a change of government, and I don't know if that's a good thing or a bad thing. I'm still thinking about it, really.

Maybe one of the problems I did not know is that they have no way of having contact with Ontario, and your big launching of Ontario is an indication that you want us in Ontario to be known. Will you then be reopening the trade offices in Japan and England and all those places you just mentioned and said, "My God, we do a lot of business there but we've closed them down"? I know that good government would say, "We should move ahead with that." I know you are quite supportive of that.

Hon Mr Saunderson: Yes, a lot of people have asked that question. I can say that we aren't going to be building offices, bricks and mortar. We're not going to have physical offices there but we're going to be present in person a lot more than we've been. I think we can target countries or regions of countries where we can get some very excellent results by focusing personal contact. You know what it's like when you're in government and you have the chance to go out and build a relationship with organizations. I've noticed that's happening now with me and our ministry and with the Premier and other people who have travelled.

You build up these relationships, and I mentioned Tom Kawamura of Japan, who was here with Toyota, whom we got to know very well. Now that he's back in Japan he's willing to be an ambassador for us about Ontario. I think that's the type of thing we can do and build on those relationships.

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Mr Curling: If it were somebody else were telling me this I'd be convinced. I don't think a businessman like you, well respected, knowing the benefits that happen when we have trade offices -- I remember when I went to Japan. The support I got from the trade office we had there was tremendous and the impact we had and the relationship we developed were just wonderful. As a matter of fact, some of the complaints I had were that the territories they had to cover were so wide that they needed to expand more and maybe have more personnel dealing with that. But you're saying to me now that we could have a part-time dollar man or something like that. In the meantime, you're saying we need to expand, we need to develop more relationships, we need to do more business. I know the kind of business individual you are, the well-respected individual you are. As a matter of fact, even my colleague Monte Kwinter from time to time gave all these glowing comments about you.

Hon Mr Saunderson: I wish he would do that now.

Mr Curling: I told him to hold back a bit until we maybe take the government over. We may have a difficult time convincing them about you otherwise.

In England and in Germany the same thing happened when I was there, but you still say to me that maybe a friend or some relationship we have there could carry on the work just as effectively. Do you really believe that?

Hon Mr Saunderson: I've noticed a great willingness on the part of the federal government offices in those countries to work with the provinces. They have people in those federal offices, trade officers who concentrate on certain industries. Obviously the automotive industry is basically in Ontario, with a very small amount in Quebec. We have found that in working with federal trade officials in the various embassies or consul general offices in cities -- I can only talk about the countries I've been to -- in the United States, Britain, Germany and Japan, we are getting very good introductions to companies and I think these introductions are paying off. I think there is a spirit of cooperation in the federal government, and the fact that we haven't got an office there means we get more of their attention. I've just come back from this Japan trip, and we certainly found over there that we couldn't have had better cooperation from the ambassador right down to the lowest trade officials.

To give you some idea of what we experienced, in Tokyo we had two meals with approximately 40 investors or companies at each of those events and then we had, as far as tourism was concerned, another meeting over lunch which was about the same number.

Mr Curling: I have no doubt at all that they cooperated in the many examples you would give, but I'm still not convinced it is the best way to go regardless of whether even the federal government presents itself. I know it's a large country. I would much rather see Ontario fighting for Ontario. Of course we'd like the help of Canada fighting for Ontario too, but Quebec doesn't think so. Quebec has its own investment there.

The other question I want to ask, and Mr Martin has been trying to put forward a lot, is again about your personal feeling on this: The way your government is going and feeling that it is right in what it is doing, why do you think the direction it is going is right?

Hon Mr Saunderson: Whether the direction we're going is right?

Mr Curling: The direction, just in general about how you go about -- let me give you a quick example. My perception is that your government is running this province like a business, and government is not a business. You're obsessed with the debt, that all costs of the debt must be paid. We all agree it is not a wonderful thing when you have to contribute to programs and have to borrow and pay so much money for them. I understand that the tax cut is the right way to go and giving back to the people is the way to go. Why do you think your government direction is the right way?

Hon Mr Saunderson: First of all I think statistics show that we are creating the right number of net new jobs. The statistics speak for what our policies are as far as jobs are concerned.

I think the jobs we're creating are boosting business confidence, and that's very important. People have to feel that this province is doing something new and different. We are running government more like a business. The basic principle of running a business is not to lose money and not to spend more than you earn.

Mr Curling: And to make a profit.

Hon Mr Saunderson: Well, from time to time you probably might have a surplus.

Mr Curling: You feel that government should be making a profit, then?

Hon Mr Saunderson: No, I didn't say that. I said that from time to time you might have an operating surplus.

Mr Curling: But if you have a surplus, Minister, while we have more people who are poor -- kids are being deprived of a good breakfast and things like that -- it is the responsibility of a government to make the distribution or redistribution of money to the poorest, the disabled, the confused.

Why is your government taken up with running it like a business, as you said, not to lose money but not too concerned about others in our society? This is the impression they're getting outside, and I'm just reporting to you. Some of them I agree with, that you're not too concerned about the people who need help and maybe need more to get going because they're being disadvantaged in our society and government is not looking after them. They feel that this government's emphasis is on big business and that anyone struggling for their rights in our society is regarded as special interest groups and that labour unions fighting for certain principles within the workplace should be banned.

Do you feel that is the direction, and don't you see this is undermining the kind of confidence we would have in the people of our province?

Hon Mr Saunderson: I still stick to what I said earlier. If you run an organization like a business, not to spend more than you have, then I that is a very good principle of how to run a government. I've always believed that. That's one of the reasons why I entered government when I did.

When this government gets to the stage where a surplus is achieved we will use that surplus to pay down the debt. As you know, we're spending a great deal of our budget -- somewhere between 15% and 20% -- to pay the interest on the debt. If we have a surplus I think we should pay down the debt; then ultimately you will have more funds available to help those people who need help.

Mr Curling: Why are you borrowing more now if you want to pay down the debt?

Hon Mr Saunderson: We're borrowing more because of the situation we found when we became the government, and somebody referred to it today, of a terrible deficit situation that had ballooned by about 200% during the time of the NDP, of the previous government, and that is why we are borrowing. We have to borrow to keep the government going. We shouldn't have to do that and I would rather we didn't have to do it, but there is no way we can avoid it at this stage of the game.

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Mr Curling: Do you believe in borrowing it and then giving some of this money back to people in terms of refunding it as tax returns?

Hon Mr Saunderson: We certainly have given back some of that money we borrowed because we are not in any way cutting expenditures in the classroom; we are not cutting law and order expenditures; we are still about 10% above any other province as far as welfare payments are concerned.

Mr Curling: So it's okay then to borrow to give back as a tax return.

Hon Mr Saunderson: You're talking about the tax relief, the personal tax cut?

Mr Curling: Yes, the tax cut.

Hon Mr Saunderson: The personal tax cut?

Mr Curling: The tax refund.

Hon Mr Saunderson: I think a personal tax cut is extremely necessary. One of the reasons we've been losing some of our brightest people from this province to neighbouring jurisdictions is that we have an extremely high personal tax rate at this time when combined with the federal rate. We're at the highest level, and we will be next to Alberta when this tax cut is complete over three years. I think that's one of the reasons we will be able to hold our bright minds: having lower taxes. You attract entrepreneurs, by the way, to set up businesses in your jurisdiction when you have low tax rates.

When we started these estimates, I went through a list of 12 points that companies look at when they are deciding where to locate, and one of those was low personal tax rates. When we lower personal tax rates, it means that the entrepreneurs, and particularly the small business people, have more money after taxes to put back into their businesses or to expand their business. That's very important, so I am a strong supporter of lower taxes.

Mr Curling: You're a strong supporter of borrowing money in order, as you said, to pay down some of the debts and also to give a tax refund.

Hon Mr Saunderson: No. The reason we're having to borrow is the financial situation we inherited. I don't think it's very much related to the tax cut.

Mr Curling: It's a policy of the government, a program that it put in place -- I'll respect your time, Mr Chair. As you can see, we won't agree with that kind of strategy and I'm concerned. I hope you'll take another look at that one day and change your direction.

Hon Mr Saunderson: I think these estimates are an exercise somewhat of agreeing to disagree -- Mr Martin has already said that -- and I suppose that's true. As a financial person who's spent all his life believing in never spending more than you earn and building a surplus for a rainy day, that's what I brought to this government and that's what this government is doing, and that's why I'm very satisfied to be a member of it.

The Acting Chair (Mr Jim Brown): Thank you, Mr Minister. Mr Martin for 15 minutes.

Mr Martin: Oh, we have a new Chair.

The Acting Chair: Yes, we have a new Chair.

Mr Martin: I hope you'll be fair and make sure that I get a chance to ask some questions and that the minister will get a chance to answer those questions.

I want to follow up a little bit on the previous questioner's questions and ask you about a theme I've been focusing on throughout these hearings, and that's the question of what indicators you see as important and at what point you, as a citizen of this province, a member of this government, a member of the cabinet, would be willing to agree that just maybe there's something wrong with what you're doing.

You talk about the jobs you've created and about employment being up and unemployment being down. All the articles I read and the information I get tells me differently, and even more importantly -- you weren't here yesterday when I shared with the two assistants who filled in for you, very adequately, I might say -- I was back in my riding last week and I knocked on a lot of doors. I knocked on the doors of three polls, probably over 300 doors. I spent two days appearing at plant gates talking to people as they went to work and I attended a number of meetings.

These are the people who live out there. These are the people who are experiencing first hand the impact of your decisions. They don't talk to me about new jobs and about hope and confidence and excitement about the future; they talk to me about anxiety and worry and concern. They talk to me about people losing jobs, particularly, at this in time, in the public sector. They talk to me about people who are family members, people who are neighbours, people who are friends, who are now out of work, who spent literally years of their time, who spent thousands of dollars investing in their ability to be the best they can be, whether they were nurses or teachers or social workers, and now they find themselves out of work.

The only jobs in our neck of the woods -- and I don't know what your colleagues heard when they were back in their constituencies at home talking to their people. What the folks in Sault Ste Marie are saying is it's pretty bleak out there; it's pretty dark. There is no confidence. There is no sense of there being a tomorrow for them, and particularly they are concerned about their children.

As I knocked on doors and was invited in for coffee to talk to people, there are two things I probably heard more than anything. One was the state of our health care system. Yesterday, Ms Elliott from Guelph talked to us, I think very eloquently, about a good health care system being a drawing card for people who will invest in this province. I think governments over the years have recognized that and so we've invested heavily in making sure we have a first-class health care system that's universally accessible to all people and makes people well when they come in the door and takes care of them.

In my community, people are concerned that this system is deteriorating, that it is no longer as accessible as it used to be and is no longer as caring as it used to be. People who used to work in it are no longer working in it. They don't have jobs. The number of jobs in the two hospitals in Sault Ste Mare has diminished significantly. They're looking at even going further. This is what's happened up to this point. They're anticipating, for the next two years, a reduction of somewhere between 13% and 15% in their budget, so they'll have to cut even more people.

When I went to the homes of the people who live and work and make the economy of Sault Ste Marie work, they were telling me they're concerned about what's happening to the health care system. If we allow the health care system to become second rate or to deteriorate to a point where it's not as helpful as it used to be, I suggest to you -- taking very seriously the comments of the member for Guelph yesterday that the health care system is one of the things that attracts people to invest in Ontario -- that won't be an attraction any more, that just won't be there.

It will be another case of your government, when you're in Ontario, hammering the heck out of the education system and claiming that we're in crisis and that it's second class, that it's not first class, and then going to France and saying it's the best system the world has to offer. You'll be doing the same thing about the health care system.

As matter of fact, it wouldn't surprise me if you're not already doing it, going over to places like Germany and Japan and talking about the health care system in Ontario, which is an excellent system but is deteriorating at a very rapid pace, as one of the things that you have to offer, that we have to offer, so that people should come and invest here, because we all know, anybody who studied economics, that the health care system in Ontario provides for investors a cheaper way of providing health care for employees than anything that any company in the States has to offer or can offer.

In my community, the people are concerned about health care and they can make the connection between health care and the health of the economy and all that.

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The other thing they're concerned about is the future for the young people. There are a lot of people in Sault Ste Marie who have worked very hard to make sure their sons and daughters get a good education, can afford to go to university, and now they're either out of university or looking at graduating from university, those who can still afford to do that, but there are no jobs. The only jobs they see ahead for them are part-time, low-paying, no benefits, no pension plan, and the pension plan that's out there that's universally acceptable for everybody is now under attack both by the federal and provincial governments.

They're not feeling very hopeful. They're quite depressed about that. That again speaks to very early signs, Minister, that I think you should be willing to own up to, to want to hear something more about, to concern yourself about, because if you don't, it'll sneak up behind you and devour you and it'll be over before it even begins. It will do untold damage to a lot of communities and to a lot of people.

The reason I'm here today putting all this on the record is that I don't want to be accused in five or 10 or 15 years down the road, with my friend Mr Curling and some of the Liberal members, of not having raised these important questions early on in the game. You still have an opportunity to change your course. You still have an opportunity to do things differently, to consult with people and to hear what they're saying. You still have an opportunity to take more time in introducing some of the initiatives you think are going to be helpful and important for the province.

I'm sitting here today challenging you to do that and I'm sharing with you, very seriously and sincerely, what I'm hearing out there and what people are writing and saying, people I have tremendous respect for, which you don't seem to have, who are saying it isn't quite as you paint it in the package you presented to us when we first started these estimates. It isn't quite the same picture, obviously, that you're painting when you go over to Japan to talk with people who don't understand what's going on back here in Ontario.

I suggest to you that it's not going to be, in the long run, really healthy for all of us, any of us, if we continue down this road of separating what we do with the economy from what we do for people, separating economic considerations from ethical considerations. It's wrong. Thinkers and writers over the years and economists who have an ethical background have written over the years that it's wrong to do that, but you're going to do it anyway. Other jurisdictions have tried it. Margaret Thatcher tried it in England and they're about to elect a new Labour government over there as soon as John Major decides to call an election, because the people of England have come to understand and to realize the folly in the ways of the neo-con, right-wing agenda.

In the States, everybody was singing the praises of Ronald Reagan, how wonderful he was. He was cutting taxes and pushing a neo-conservative, right-wing agenda. He damn near bankrupt the country. He took the country from a situation where --

Mr Wettlaufer: It was the Congress and the military budget.

Mr Martin: No, Ronald Reagan did. He was the president. Mr Curling raised the question just a few minutes ago. He decided to give people a tax break. He took the debt of that country from the billions to the trillions. Isn't there anything to be learned from that at all? Is there nothing to be learned from that? The question I have for all of you is, at what point do you get it? At what level does unemployment have to go to? How terrible does the situation have to be out there for women and children and poor people? How many bankruptcies?

Hon Mr Saunderson: Let me respond. First of all, on the subject of Ronald Reagan, just to get this straight, yes, he did cut taxes, but what he didn't do was he didn't cut spending. That's why they got in the situation they got into. We are cutting the personal tax rate and we're cutting spending, and that's the difference between Reaganomics and the Common Sense Revolution. I want to get that on the record, because a lot of people always refer to Reaganomics. That's the problem.

I wanted from a philosophical point of view to say to you that in the last 400 years there have been three major events or trends. The first one was in the Reformation and the Renaissance, when people started to think, when the Church didn't run everybody's lives. It was the beginning of very creative thinking, hence the name "Renaissance people." The second one was the Industrial Revolution, which really changed the lives of many people and brought about modern industry as we know it. All the time those things are happening there are upheavals and people have to learn to cope with change.

We're going through that right now with the information technology revolution, and it is a major, major change. It's changing so fast that it's changing every day. You cannot keep up with the changes that are happening. People are having to adjust to this: businesses, individuals, all organizations, and government, for that matter. We're in one of those major changes at this time of our lives. It's very exciting.

I wonder if in the old days they said, "How did you like living in the Renaissance?" I don't know what they're going to call this period that we're going through, but it's an exciting period to be going through and it is changing society. In the process, whenever these changes occur, people suffer. The main thing is that what this government is trying to do is to have the wherewithal to help those people make changes and not suffer. I just wanted to mention that because I believe strongly that's what's happening right now.

You talked about health and education: What do I say when we are talking to foreign companies or people in foreign countries about this province? Yes, I say we have a good health system. Yes, I say we have a good education system. But I think we can do it better than we're doing both those things right now. As an example, we can do it better by not having as many hospitals. I can remember going to see my first grandchild a few years ago at one of the hospitals in Toronto and being very surprised to see how many empty beds there were in that hospital. I'd been involved with a hospital board in Toronto, the Queen Elizabeth Hospital just down on University Avenue, and again there were empty beds in that hospital. So what we're doing now is not rocket science; we're just trying to streamline our system so that there aren't empty beds in hospitals and therefore maybe we don't need as many hospitals. I wanted to mention that, about the health system.

On education, it doesn't bother me that teachers are going to be measured as far as their performance is concerned, because I think we want to know how well our teachers are doing and we want to know how our children are performing. I think it's good that we're going to have universal testing and measurement of children.

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Mr Wettlaufer: A comment was made by Mr Curling when he was on the Liberal side before he came back to the chair that our cutting taxes was ridiculous. I would like to point out that about 10 days ago, Patti Croft, one of the most noted economists in Canada today -- she's the chief economist with Canada Trust -- was recommending in a talk show that the federal government reduce some of its taxes in order to encourage the consumer to spend some more money. She said that the consumer lacked confidence today and part of the reason was the high taxes we have in this country. That is the only way we are going to get consumer spending back up to a level, but it's more important to realize that taxes of all kinds discourage investment by any business, not just foreign investment but also investment by companies owned and operated by Canadians and by Ontarians.

I was only a small business person, but when taxes went up I laid off individuals. I know of many other businesses in my riding of Kitchener which did likewise, large and small alike. If we are going to encourage employment, we are going to have to carry through with reduction of the personal income taxes. It would be lovely if we could reduce other taxes as well, but the previous governments have dug such a hole for us it's impossible.

Have you had any comments about the improvement in the tax situation from foreign companies in your trips abroad?

Hon Mr Saunderson: Yes. Once again, when you go to these other countries, you realize how lucky we are to be in this country and in this province. They are quite convinced that their own high taxes -- I'm talking about Japan and Germany. Those countries are tending to price themselves out of business, and part of the way they price themselves out of business is their taxes are too high. Therefore they are looking more towards doing assemblies or manufacturing outside their country.

All of the very sophisticated communications equipment that you see in Japan, whether it's calculators or whatever, they're basically being assembled in China because of the high labour costs, and that includes taxes. So we can benefit from that by having lower taxes because we are a more friendly jurisdiction and our labour force has more incentive when they are not paying the high taxes. I'm convinced that lower personal taxes will be our salvation in this province, and you talked about what had happened before.

If I've answered your question, I wonder if I might take some of the time allotted to the Progressive Conservative side here just to say that I've been asking my staff to take a look at the economy in Sault Ste Marie. I wanted to spend a little time, if I could, because Mr Martin was asking some pertinent things about his area and how he'd been out knocking on doors, which, by the way, I think you're wise to do. It's a good way to keep in touch and I do it myself, as I know a lot of people are doing it.

I know that Sault Ste Marie has gone through a difficult period of adjustment in the 1990s, but I think there's evidence that Sault Ste Marie is starting to show signs of economic recovery. Employment is up by more than 4,000 since 1992. This was a figure that was calculated for October 1996. The unemployment rate is 10.1%; that's six points lower than it was in 1992. I know you were in power for some of the period that we're talking about, but I do think the trend is up in your city that you're talking about from an employment rate and an employment figure.

Several capital projects in the area are proceeding along that you should be pleased about. Algoma Steel, which your party was very involved with before, is expanding, as you know, because of the economic improvement particularly in the automotive industry. St Marys Paper is expanding, and you've talked about that before. There's a widening of Highway 17 going on, or going to go on, which I think is very encouraging for your region. And I did talk about the improvement of the economy, which was estimated to be about 1% this year.

There have been some good things happen in the north, and I wanted to bring those up. In Dryden, Avenor is having expansion to its mill to the tune of about $92 million; in Ear Falls, a new sawmill, by Avenor again, for $57 million; Domtar, a plant expansion at Red Rock; Nagagami-Algonquin Power hydro project, a $45-million expansion announced in February 1996; Lake Erie Steel in Nanticoke, an expansion of $105 million; Chalk River, $140 million in production plants there. That's almost in the north. In Espanola, E.B. Eddy, a $77-million expansion.

I don't think those things would be happening in the north if there wasn't confidence in what this government is doing. So I wanted to raise that with you. I read off some things that are happening up your way, and I don't think they would be happening if there wasn't confidence in what this government is doing.

The Chair: I think Mr Spina wanted to get in on the act.

Hon Mr Saunderson: I'm very happy to let him in on the act any time. He did a very good job yesterday.

Mr Joseph Spina (Brampton North): Minister, the last government stole $60 million out of the northern Ontario heritage fund.

Mr Martin: Stole?

Mr Spina: We chose to --

The Chair: Mr Spina, could you put your wording in a different way? Things are going so nicely.

Mr Martin: We put it into the general revenue.

Mr Spina: The previous government chose to remove the --

Interjections.

The Chair: They're all leaving you, Mr Spina. Go ahead.

Mr Spina: The last government chose to remove the $60-million heritage fund and throw it into general revenue and we chose to return it.

I really can't ask the question until the minister comes back. I'll hold off my question, Mr Chair.

The Chair: Would you like me to respond to that one for you? The minister's listening to you. Go ahead. You could have asked it in the ministry today, but go ahead, ask it.

Mr Spina: Are we okay? The previous government chose to remove the $60-million northern Ontario heritage fund and, fundamentally, we restored it. I guess my basic question is, do you feel that restoring that heritage fund will go a long way towards boosting business development in the various cities and towns in northern Ontario? You mentioned some of the expansions that have taken place to date. I was just wondering if perhaps some others might be able to take advantage of the restoration of the northern Ontario heritage fund.

Hon Mr Saunderson: I obviously was a part of the decision, and Mr Hodgson is pleased to have that back again, I might say, but I think what the intention could possibly be is to help in the telecommunications area and in infrastructure in the north. I remember being up there recently and there are a few sites where some good roads have to be established again in order to produce proper ways to communicate and to haul out logging or haul out minerals. That's how that can benefit. Also tourism; I think tourism will benefit.

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If you're talking about how that might be used, I think telecommunications to bring them up to speed up up there so they can at least have the facilities to communicate well. As you know, there's so much that can be done by telecommunications, like diagnostics for various diseases or sicknesses. And infrastructure, as I mentioned, and then tourism. Those are the three areas I think they could benefit by.

Is that our time?

The Chair: You have a couple more minutes. Ms Elliott wanted to --

Mrs Brenda Elliott (Guelph) : The question I have is more related to tourism.

Hon Mr Saunderson: All right.

The Chair: Go right ahead. He is an expert in all that too.

Mrs Elliott: It is a question that is reflective of the concerns my constituents are raising about the issue of signage along highways. In my riding of Guelph there isn't a lot of signage at the moment. The one that sticks out in my mind is one that is seen as you approach St Jacob's, advertising the quaint community there.

Some of my constituents have called and said, "We recognize why there might be a greater interest in increased signage, but the last thing in the world we want is beautiful Ontario looking like Florida." No offence to Florida, but that is the picture they have in their minds when they hear our government talking about more signage. I would appreciate, Minister, your point of view about those kinds of concerns.

Hon Mr Saunderson: We are embarking on a new signage system for Ontario. It won't be a proliferation and an eyesore. It will be well done. It's a modern system, and there is a company called Canadian TODS that was chosen through a competitive bidding system that will finance and deliver the new system. They have had a lot of experience in implementing systems similar to what we'd like to have in Ontario, and we felt, after the request for proposals, that they were the best, and they were chosen. It has significant Canadian content as well. They'll be installing the new tourism signs. We're in the process of getting an operating agreement with them, but the new system will be starting early in 1997, so you can tell your constituents that.

There are some model signs installed already, and you mentioned one of them, the one down in Kitchener-Waterloo talking about the St Jacob's area.

Mrs Elliott: Yes, it's quite lovely. It has really nice graphics and everything on it.

Hon Mr Saunderson: The other is the Stratford Festival one. There's also one between Brockville and Cornwall on Highway 401, if you're ever driving down that way, and there are some on major secondary highways, in particular Muskoka highways 118 and 169. So it is happening. I haven't got any samples, but we have them if you'd like to see them.

It's up to a resort or whatever to pay for their own signage. No longer will this be done by the government. I think in early 1997 we're going to start seeing these happen. The one concern is not to have clutter, so they will be tastefully done, but it will be at the expense of whoever wants to advertise their area.

Mr John C. Cleary (Cornwall): I'd like to talk a little bit more about signage. Whom does that company have to get the approval from to put up the signs? Is it MTO? Who gives the approval?

Hon Mr Saunderson: It would be the MTO.

Mr Cleary: That's been a challenge in the past. We've got all kinds of reasons why signage couldn't go up before. I was just wondering if they were going to relax some of those reasons why business could get signs up.

Hon Mr Saunderson: The feeling is that signs can visually impair drivers, and we don't want that to happen. That's why MTO has to have involvement in that. Obviously our own ministry, from a tourism and economic development point of view, will also be involved, so I guess it's a partnership between a few ministries.

Our own ministry is certainly leading a cooperative effort with the tourism industry and MTO to develop and deliver this new system. We've worked very closely with the tourism industry over the last two years to come up with a system they are happy with, and I think they are. We've had representatives from I think 10 tourism associations from across the province as well as our own ministry staff and staff of the Ministry of Transportation.

As an example, I know Resorts Ontario has been involved, Ontario East, Festival Country. These are the kinds of organization we've worked with on signage. I realize it's a very important subject for all areas of Ontario because they want to benefit from the tourism traffic, but I think it's important to remember that we want safe and efficient movement of people and goods, so we don't want signs in any way to impair people's vision.

Mr Cleary: I know it's not your ministry but I wonder what your feelings are on the six- and seven-foot grass along our provincial highways. It doesn't seem to be very attractive to tourism. I just wanted your opinion on that. Sometimes it's as high as the signs.

Hon Mr Saunderson: I have to say that in my travels I have seen very attractive growth on the sides of highways.

Mr Wettlaufer: Crown vetch.

Hon Mr Saunderson: Yes, it's attractive stuff. I think it's been over the previous few years that MTO has been adopting new roadside vegetation management to meet some resource constraints: scaled-back mowing, more efficient ways of managing roadside vegetation, that's been going on for a few years. It didn't start with us. Previous governments have been doing this.

If you travel in other parts of the world you will see that you don't need to have finely mown grass for things to look attractive. I think there are higher grasses that don't need the care that can look just as attractive, and it's less costly to have this. Pampas grass is the thing I was thinking of. It grows very high and it's very attractive. I come back to the Japan trip, but we saw that type of growth on the highways. It's a very attractive form of vegetation.

Mr Cleary: Is the adopt-a-highway program going to come into place? There would been a group for many years, service clubs or volunteers, trying to take on projects like that. Is your ministry going to be involved in that?

Hon Mr Saunderson: I've never understood what "adopt a highway" means. I don't mean to be lighthearted about it, but if you can explain it to me -- I see that the signs are up. Who goes out and maintains these signs?

Mr Cleary: The group that was in to see me told me, and they gave me the shirts and everything to go with it, "We had been trying with the previous government to get this under way." It means that a service club or group would take on a section of a highway. They'd put up a sign that they maintain at traffic circles or somewhere else and they would be responsible for the grass-cutting and planting if there were any flowers or whatever.

Hon Mr Saunderson: I can see that on secondary highways. I would worry that on major highways, in particular our 400 series highways, it could be dangerous to do that. But I'm not an expert on this; it's really not our ministry. I don't think I can answer any better than that.

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Mr Cleary: It may not be your ministry but it's very attractive to tourists.

Hon Mr Saunderson: Yes, I understand.

Mr Cleary: Would you have that same feeling if it was at a traffic circle and a service club wanted to get involved?

The Chair: Adopt a circle.

Hon Mr Saunderson: I can understand that when we have people coming into the province and tourists drive along our highways and they see that there's a lot of litter or they're not tidy, then it's not a good advertisement for the province. But I think our highways are quite well maintained. I've always felt that, regardless of what government is in. I actually like the fact that you can have vegetation that doesn't need to be maintained all the time. It's a cost saving and yet it's attractive.

Mr Cleary: They told me they would be responsible for the litter too, this group I had been in discussions with.

Hon Mr Saunderson: On major highways, on the 400 series highways, and this is strictly my own personal feeling from a safety point of view, I'd be a little worried about people trying to pick up litter where you have such fast-moving vehicles. I can see it happening on smaller highways. I think it's very commendable for people to want to clean up.

Mr Cleary: Since last speaking to you, do you have anything new to tell me on the closed parks in eastern Ontario?

Hon Mr Saunderson: No. Over the last two weeks I can't tell you anything more about the parks.

The Chair: Tell him about the Japanese parks.

Mr Cleary: Yes, tell us about them.

Hon Mr Saunderson: One of the things about Japanese highways is that they're very crowded. I did not see any parkettes or parks, to speak of, over there.

On your situation, I think I've explained it before, it's a financial situation. We are looking for some participation, but with the private sector and the St Lawrence Parks Commission. I don't think anything has changed since we last had that question in the House a couple of weeks ago.

Mr Cleary: Well, I could tell you something new.

Hon Mr Saunderson: Oh, good.

Mr Cleary: Since that period of time the municipality and a group of people had at least walked through the parks and were surveying their costs and they're still interested. It must be with the bureaucrats right now. At least that's what they tell me.

Hon Mr Saunderson: If people are looking at these parks, that's fine. As you know, we're doing a program review of all agencies, boards and commissions within my ministry and probably within the government. I guess we'll have to wait to see the results of these studies. But I think what you say is very encouraging.

Mr Cleary: Well, it happened within the last week.

The Chair: It will happen when he goes away.

Hon Mr Saunderson: That's what happens; all the good things happen.

Mr Cleary: Yes, that's right.

Hon Mr Saunderson: But anyway, you're back in your constituency too, and that's good.

On the subject of tourism, if I may: We don't have any offices abroad any more; the previous government closed them. In Germany, the United Kingdom, France, the United States and Japan we have organizations that we contract with to represent us. This is probably the most economic way to attract tourists from abroad, having these people we contract with. They really are people on the ground over there, and I think they do a very good job.

A very interesting statistic is that last year almost 350,000 people from Japan visited Ontario, which is a large number of tourists. That's as many as they get in British Columbia, roughly, and they have the great ski area of Whistler, which is very attractive to the Japanese. So I think we're not doing badly.

Therefore, I was asked the question of whether we would ever have offices open again overseas. My answer is, "Probably not." But if we could find the same type of situation or relationship as we have with the people who represent us from the tourist point of view abroad, we could have people representing us from a business-development point of view abroad. It's a lot cheaper to do that than opening offices again. Now, that's down the road, but that's something I would certainly consider again.

Mr Cleary: Okay, my next question is, is there anything new on that Ontario tourism group, where dozens and dozens of volunteers worked so hard to put that plan together? It apparently wasn't satisfactory to you. You had told me a few things a few weeks ago.

Hon Mr Saunderson: Yes. After I spoke to you, I sent a letter dated November 6. It was to members of the Ontario tourism industry. I would be pleased to make a copy of this letter available to you, because I think it explains that I was able to announce the co-chairs and the 11 industry members of the new tourism marketing task force which has been created, to be co-chaired by Cameron Hawkins, the executive vice-president of Journey's End Corp, and Mr Grahame Richards, our assistant deputy minister of marketing and trade in our ministry.

I'll tell you what the mandate of the tourism marketing task force is. It's to identify common objectives in terms of Ontario's future share of domestic and international tourism markets; developing consensus in consultation with industry stakeholders on a provincial marketing plan, with short-term and long-term strategies to achieve our tourism marketing objectives; identify costs and benefits associated with the proposed marketing plans to achieve the objectives; and undertake an analysis to determine the barriers to achieve the objectives, including identifying options for new partnerships that will leverage more funds from industry, the Canadian Tourism Commission and non-traditional partners.

I expect that this task force will present recommendations early in 1997.

The Chair: Do you want to put a quick question?

Hon Mr Saunderson: The first meeting of this task force will be November 28, and we'll get a final report early in 1997. This is a fast-acting group of people. It has now been established and it is now at work. Early in the year, we should get a report from them.

The Chair: I think he has exhausted your time, Mr Cleary. I was trying my best to get in one for you. Mr Martin.

Mr Spina: Is there a question this time?

Mr Martin: I'm not sure. We're never sure until we get down the road a little way. We got to a point, I think, in this a few days ago where it became obvious that it didn't matter what the question was, the answer was always the same.

Hon Mr Saunderson: The questions tend to be the same too.

Mr Spina: This is your last kick at the can.

Mr Martin: This is my last kick at the can, that's right.

Mr Spina: We burned up your time for you.

Mr Martin: That's okay. I don't mind. I think you guys in the -- well, I don't like the term "back bench," but I'm there myself, I was there myself, and I guess we're all in the same boat. You probably have more sensitivity to what I'm talking about than the minister does, because they tend to be somewhat distanced from reality in their ministries and don't get the time that you get to go back to your constituencies and talk with the people who are impacted directly by the decisions that are being made. I suggest you probably don't fully understand the implication of what's going on.

The division bells rang.

Hon Mr Saunderson: We don't have to go. It's a quorum call, apparently.

The Chair: Actually, it's okay. But if it's a quorum call, you can respond to that. I think they're back.

Mr Martin: I just wanted to go back a bit to comments that you made a while back on the economic situation that we find in Sault Ste Marie today, because I think it reflects to some degree the reality that we see around the province. Yes, there are pockets of good news and, yes, unemployment is between 10% and 11%, which still isn't acceptable. It's lower than it was in the early 1990s because of a lot of work, a lot of very difficult and important work, done by the management group of many of the major corporations in our city, by the workers, the organized workers, the United Steelworkers of America, Canadian energy and paperworkers. With some help from the then New Democrat government we restructured a whole lot of the basic foundational industrial pieces of Sault Ste Marie. I've talked about that before. That's beginning to pay off. That's beginning to show some progress, so employment is getting better because of that.

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Besides that, as a government, we were instrumental with many of the vehicles that were in place then that are no longer in place because of the cuts you've made to your ministry and to some other ministries. We were able to attract a number of other industries. We were able to create an environment in Sault Ste Marie that was very positive for the tourism industry, for example. If any of you have visited Sault Ste Marie lately and have walked the waterfront you'll see that it is much different than it was 10 or 15 years ago. It's quite a nice place, actually, to walk. That is very attractive to tourists and it's also very healthy for the people who actually live in Sault Ste Marie. It gives them a feeling of some confidence.

What I want to talk about more specifically, and I brought this up yesterday and you weren't here, Minister, is a study that was done by the labour council that shows that because of the decisions you're making in the downsizing of government, by the time you're finished, by the time your first term is up, we are going to be down some 1,700 to 1,800 jobs in Sault Ste Marie, directly attributed to the decisions you're making. I guess I'm wondering where and how we're going to replace those jobs, because the people you're putting out of work are highly qualified people, many of them mature, in their forties and fifties, who have worked very hard in a particular field for a number of years and who are now finding themselves either having to go on the system in one way or another or leave town to get a job in their chosen field.

The concern they and others have in the community, as I shared the last time around, is that there are no jobs opening up either for their sons and daughters. There are no jobs for people to come home to in Sault Ste Marie. So where the indicators may be more positive than they were in the early 1990s, 1991-92, when we were going through the major restructuring, they're not as good as they could have been had you not made the cuts that you did.

Which brings me actually to the point I want to talk to you about this round, and again it's very parochial and very Sault-Ste-Marie-specific, but I think it has application and ramification other places. It's the question of the Ontario Lottery Corp. The Ontario Lottery Corp was brought to Sault Ste Marie --

Interjection.

Mr Martin: Your favourite subject. Mine too these days. As a matter of fact, it is to be discussed at municipal council in a few days.

The Ontario Lottery Corp was brought to Sault Ste Marie in an effort to stimulate the economy of that part of the province. There was a sense that there was no need to have everything that was either directly or indirectly connected to government always in Toronto. For a myriad of reasons it made all kinds of sense to shift that operation outside of Toronto, and Sault Ste Marie was fortunate in being chosen as the location for that enterprise.

There was all kinds of documentation done at that time to indicate how it would positively impact the economy of Sault Ste Marie, and in fact it has. Any of the annual reports that have come out talk very specifically of the enhancement of all kinds of small businesses in Sault Ste Marie because the lottery corporation was located in the Sault; the printing business, for one, among a whole host of other small businesses that provided services and resources to the lottery corporation.

It also spoke to the rest of the province and Canada and the world about the potential that was in a place like Sault Ste Marie for other high-tech industries to locate, because the lottery corporation is involved very much at the high-tech end of the industrial scale. So in Sault Ste Marie we looked on the lottery corporation as something we could build a future on.

For example, there's a group in the Sault called Bridges which is a connector between Lake Superior State University, Algoma University and Sault College, looking at new ways that they could provide educational opportunity to people and relate it somehow directly to some of the industrial and business activity in Sault Ste Marie and area. They have put on over the last two or three years some very successful workshops and conferences and training opportunities in the area of running lotteries and the lottery business, and are hoping to continue to do that, using the Ontario Lottery Corp as a base for that and the professionals who work in that industry as some of the people who would teach and share their experience. That's just a little example of the kind of spinoff activity.

In reading the terms of reference that you so graciously provided, and I thank you for that, on my request at a meeting a couple of weeks ago -- and I've shared it with a lot of people, talked with the mayor of Sault Ste Marie about it a few days and we went through it -- it's obvious that what you're looking for are ways to hive chunks of that off, if not the whole thing, and turn it over to the private sector.

I don't know what that means for Sault Ste Marie. There's no reference in the terms of reference as to the impact that will have on my community -- absolutely no reference whatsoever. There's no request for that consultant to do some homework and dig up some material and make some comment on the impact of privatizing any part of that corporation on the community of Sault Ste Marie. You'll understand this, Joe, because you've been up there and you know how important that corporation is to our city.

Any tinkering with that which takes some of that away or diminishes it as one of the major employers in our community will have major impact in about five or six different ways. I'm not going to go into it here today. I think all of you can imagine how that would impact on the people in my community in that many ways: the loss of jobs, the loss of tax base, the loss of business in restaurants and grocery stores, the loss of opportunity for people who, for example, print tickets or provide paper and paper clips and cleaning services and all of that. It goes on and on. The impact is a major ripple effect and it will be serious to Sault Ste Marie.

To me it's typical of the kind of slash and burn that's going on, the very short-sighted approach to simply turning things over to the private sector and thinking that will make everything better and will create more jobs and the economy will somehow build up a head of steam and we'll all have jobs and everybody will be well forever after.

You put that into the context of what you're doing in the area of gaming and gambling in the province, the introduction of video lottery terminals, which we see as a bad idea, for all the reasons that have been laid out in the House as people have spoken to that bill. It will take away from the very excellent job that the lottery corporation is doing at the moment because it cuts into that dollar that's spent in that way. You look at what you're going to do in the area of permanent charitable casinos and how that will again take away from what we saw as an excellent opportunity to introduce, in a very thoughtful, well thought out way, larger, more permanent casinos into the province, which we in Sault Ste Marie thought we would be the benefactor of.

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In Sault Ste Marie we've been asking our government and your government for the opportunity to put a casino in our city so we can keep some of the dollars that are literally flowing across the river into Sault, Michigan, right now so we can benefit from the economic spinoff that would create, and there's no answer coming.

In the Sault we look out and see a government that's introducing video lottery terminals, that's introducing permanent charitable casinos, that's looking at privatizing perhaps parts of the Ontario Lottery Corp. We've asked for what we thought would be a very positive, constructive and manageable opportunity to the Sault, which is the casino. We've had a referendum in the Sault that showed that close to 60% of the people agreed that it would be a good thing, and you won't do it. You won't give us that green light. You've done it for Niagara Falls, and we laud you for that, but you won't do it for Sault Ste Marie.

Can you put those pieces together for me and explain to me why you would do such a thing that is going to be so negative and destructive to my little community?

Hon Mr Saunderson: First of all, you used the term "slash and burn." We're not slash-and-burn artists. We're not even slashing and burning. We're trying to make Ontario a much better jurisdiction in which to work, to visit etc.

You want to know about the Ontario Lottery Corp. First of all we're having what we think is a sound business practice with an ongoing review with the OLC. We are not considering total privatization of it. We've hired a consultant, a very wise person, to take a look at the situation. I suppose there could be some private sector involvement. I don't see why it would not necessarily be in Sault Ste Marie.

We did a review in April 1996 and found $36.5 million savings possible through greater administration efficiencies, and I think that's to be lauded. There's nothing wrong with that. We have met with our board of directors -- I have. They are all free-enterprise executives now on that board, and I'm convinced that the recommendations will make sense. We're doing this with all agencies of government, and I think the OLC does a good job.

Mr Martin: Are you, Minister, going to analyse and assess the impact of these decisions on the community of Sault Ste Marie? Are you going to go beyond enterprise and actually look at the impact of your decisions? You said $35 million, $36 million. That's a lot of jobs. That's primarily jobs out of Sault Ste Marie, and people who are no longer working, who are collecting EI, who are not paying taxes the way that they were before, have you put that into the mix and do you intend to put that into the mix of this study?

Hon Mr Saunderson: I think we're a reasonable government and that we consider those things. Now I just want to respond quickly to the questions that were raised.

VLTs are going to be phased in sensibly. You know our policy on casinos. There has to be a province-wide referendum. You've already had your own referendum, and that is good for you. We'll have to see how the province-wide referendum goes. I remind you, when your party criticizes the gambling changes we're making, that you brought legitimate gambling into Ontario, and we're just going to make it better.

Mr Wettlaufer: The government side has no more questions, Mr Chair. Perhaps the minister would like to take a few minutes to wrap up.

Hon Mr Saunderson: Thank you very much, Mr Wettlaufer. I'd just like to conclude my remarks about this process of estimates that we've been going through for 15 hours. I've found it a very interesting experience in that it's a way of having a dialogue between the three political parties that probably isn't afforded to us in the House to this extent. I find this process a very pleasant and agreeable one.

I would like to thank the Legislature staff for their work in these estimates that we've been involved in, Mr Chairman and the other ones who have helped you. I'd like to thank the participants of all the political parties for their involvement because I think there's always been a good discussion in the process here.

I'd like to thank the staff of the Ministry of Economic Development, Trade and Tourism for the work they did to provide me with information that I found essential. I'd also like to thank them for providing information for some of the questions that were raised in this process.

I've listened to the comments of all the speakers over the term of these hearings and I know that Messrs Spina and Grimmett did yesterday as well. We've noted the comments that were made, particularly by the opposition parties, and we will factor those into our decisions as a government.

I believe strongly that we are doing, as a government, what should be done. I know we sometimes had to say we agree to disagree, to Mr Martin as an example, but I think what we're doing is the right thing. We are getting out of the face of business and letting business operate, I hope, in a way that's going to bring jobs and economic growth to this province.

I support particularly what my own ministry is doing. It's become a different ministry since we became elected. It's a downsized ministry and it's spending less but I think it's doing better. That's what we're all in this process to do.

With those comments I would like to conclude my participation in these estimates. It's the second time we've done this in a year, but this was a full estimates process, and I think it's a good example of how the democratic system should work.

The Chair: Thank you very much, Minister. Before I call the vote, I wish to thank all those who participated. The clerk has been of great assistance to me, and members and staff. Your staff conducted themselves very well. As bureaucrats could be, they were excellent.

Hon Mr Saunderson: Thank you.

The Chair: As you know, this is the end of the estimates for all ministries. We have two votes to be called in these estimates, then this and all the other estimates will be reported to the House.

I have votes 901 and 902. Shall they be carried? Carried.

Should I report these estimates to the House? Agreed.

That being the case, I shall report to the House not only this one, Minister, but all the other estimates. I feel a bit sad that it's all over. I was enjoying it myself.

Clerk of the Committee (Mr Franco Carrozza): We'll be back in the spring.

The Chair: We'll come back in the spring if the government allows us to. Therefore, ladies and gentlemen, we stand adjourned until then.

The committee adjourned at 1749.