Legislative Assembly of Ontario

MINISTRY OF MUNICIPAL AFFAIRS AND HOUSING

CONTENTS

Tuesday 29 September 1998

Ministry of Municipal Affairs and Housing

Hon Al Leach, Minister of Municipal Affairs and Housing

Ms Elizabeth McLaren, assistant deputy minister, office for the greater Toronto area

STANDING COMMITTEE ON ESTIMATES

Chair / Président

Mr Gerard Kennedy (York South / -Sud L)

Vice-Chair / Vice-Président

Mr Rick Bartolucci (Sudbury L)

Mr Rick Bartolucci (Sudbury L)

Mr Gilles Bisson (Cochrane South / -Sud ND)

Mr John C. Cleary (Cornwall L)

Mr Ed Doyle (Wentworth East / -Est PC)

Mr Gerard Kennedy (York South / -Sud L)

Mr John L. Parker (York East / -Est PC)

Mr Trevor Pettit (Hamilton Mountain PC)

Mr Wayne Wettlaufer (Kitchener PC)

Mr Terence H. Young (Halton Centre / -Centre PC)

Substitutions / Membres remplaçants

Mr John Gerretsen (Kingston and The Islands / Kingston et Les Îles L)

Mr Rosario Marchese (Fort York ND)

Also taking part / Autres participants et participantes

Mr Jean-Marc Lalonde (Prescott and Russell / Prescott et Russell L)

Mr Richard Patten (Ottawa Centre / -Centre L)

Clerk / Greffier

Mr Viktor Kaczkowski

Staff / Personnel

Ms Anne Marzalik, research officer, Legislative Research Service

The committee met at 1558 in committee room 2.

The Chair (Mr Gerard Kennedy): Good afternoon. I'd first like to introduce the staff we have with us today. We have Mr Viktor Kaczkowski as clerk, Anne Marzalik from research, and Carolyn Brown from Hansard. I'd also like to welcome each of the members. I know you'll do your usual outstanding job of pursuing the public interest.

The business of the day is the Ministry of Municipal Affairs and Housing. Our business is set by the orders. The minister will have 30 minutes, each of the opposition parties will have 30 minutes, and then there will be 30 minutes for the minister to respond. We are unable to finish that today due to our late start, but we'll do the best we can. Minister, I'd like to call on you to begin.

MINISTRY OF MUNICIPAL AFFAIRS AND HOUSING

Hon Al Leach (Minister of Municipal Affairs and Housing): I first apologize to the committee for being somewhat late. I had a previous commitment that I couldn't get out of. We'll try and proceed as quickly as we possibly can.

What you have before you today are our 1998-99 estimates that outline the ministry's proposed expenditures for the current fiscal year. I am very pleased to report that over the last two years we have realized significant savings in the ministry's operating budget. We have brought back common sense to fiscal policy not just within my own ministry, but right across government. These efforts were necessary to bring Ontario back from the brink of bankruptcy when we inherited an $11-billion deficit from the previous government. We're now on track to balance the budget for the year 2000-01, as promised.

I am pleased to say that the efforts of my ministry to reduce the size and cost of government were a critical part of this success. I'm not going to have an opportunity to touch on all areas of expenditures for 1998-99, but I will touch on the significant ones. Before I begin, I would like to put the estimates within the context of our ministry's five priority areas, or what we call our core business.

First, local government: We want local governments that are less costly, more efficient, and accountable for the services they deliver.

Second, land use planning: We want a simplified and streamlined land use planning system, as well as greater provincial and municipal accountability for the effectiveness of the land use planning system.

Third, social housing: We are committed to reforming and simplifying the social housing program. We want to make social housing cost-effective and responsive to the needs of the people in their communities, and we want to complete the transfer of social housing to the municipalities.

Fourth, the regulatory framework for private rental housing: We want to create a better climate for investment in new private rental housing, ensure tenant protection from unfair rent increases and unfair treatment from their landlords, and have a simplified, faster, less expensive system for resolving disputes between landlords and tenants.

Last but not least, the regulatory framework for buildings: We want to focus on the health, safety and accessibility of our buildings and a streamlined building code that is cost-effective and improves the climate for new development.

We were elected in 1995 on the basis of a comprehensive and integrated program to get Ontario's economy moving again, and we've done exactly that. We pledged to cut red tape, and we've done that. We pledged to reduce duplication and overlap among the various levels of government, and we have done that as well.

I'll now touch on some of the key areas of expenditures in our estimates for the year 1998-99.

One of the most extraordinary expenditures by my ministry this year was the ice storm disaster relief assistance. As we all know, in January of this year a horrific ice storm battered parts of eastern Ontario. It was the largest natural disaster in Canadian history. Many lived without heat and proper shelter for days, even weeks, relying on friends, neighbours and strangers throughout Ontario and the rest of the country.

All levels of government worked together -- and I mean all levels of government: federal, provincial and municipal -- and we continue to work together to help people recover and rebuild. My ministry, the Ministry of Municipal Affairs and Housing, leads the recovery activities across the provincial government. From the beginning of the emergency, the government of Ontario made a commitment to the people affected by the ice storm to provide the help they need. We recognized the human and economic costs of this natural disaster and we responded. In fact, we responded more quickly, more generously and more compassionately than any other government in the history of this province.

We provided an immediate initial commitment of $50 million. We then established an emergency help fund, which paid out almost $12 million in aid to individuals and municipalities during the emergency phase. This meant that within days, money was in the hands of the people who needed it most. There were follow-up payments to municipalities totalling in excess of $33 million, and through our public sector claims process we are preparing to provide tens of millions more for recovery costs if this is needed.

Municipalities and other organizations that depend on us for funding can depend on this government to restore essential public facilities damaged by the ice storm, such as roads, schools and hospitals. Working with the federal government, we have also set up two programs to help hard-pressed farmers and small businesses get back on their feet again. These cost-shared initiatives are valued at over $70 million. In addition, this government is providing the necessary financial assistance to individuals who have suffered emergency expenses and uninsured damages to essential properties as a result of that terrific storm.

Under the Ontario disaster relief program, the province matches every fundraised dollar with a specific ratio. Due to the extraordinary nature and scope of the storm, this government is providing up to four provincial dollars for every dollar raised by the community.

This private property claims process is led by the Eastern Ontario Disaster Relief Committee. That's an umbrella group of volunteers representing the eight local disaster relief committees in the affected area. The members of these committees are the real heroes. They deserve our support because they are the front-line workers who have worked so tirelessly to get eastern Ontario back on its feet again.

It's important to recognize how many lives have been disrupted by this unforeseen event, how many people are struggling to recover from its effects. By the June 15 deadline for submissions, nearly 28,000 claims had been filed under the Ontario disaster relief assistance program. As a point of comparison, this is six times the number of claims filed as a result of the Manitoba Red River flood. The bottom line is that we are committed to restoring eastern Ontario to economic vitality in the wake of an unanticipated disaster of immense proportions.

Another very important expenditure for my ministry was the municipal restructuring fund. The government's vision for local government relies on municipalities having the size, the tax base and the administrative strength to reduce the cost of services to their taxpayers.

All across the province, small communities are coming to realize that they could operate things just a little more efficiently if only they could do things on a slightly bigger scale. They're finding that they can better afford certain capital expenses if they can spread them across a larger tax base. They are finding that they don't need two town halls in an area that is really just one big community. They are eliminating waste and duplication and providing better services at a lower cost through local restructuring.

Since municipalities were given more flexibility to develop local restructuring solutions under the Municipal Act, 85 restructuring proposals have been approved. This is going to bring the number of municipalities in Ontario from 815 to 593, effective on or before January 1, 1999. We've been there to support municipalities that take this step.

In December, we announced a $50-million fund to help municipalities that were restructuring with some of the initial costs, because we recognized that even though restructuring can pay huge dividends in the long term, it often involves initial costs that must be paid in order to find those long-term savings, such as labour adjustment costs, special election costs, or costs associated with integrating computer systems. When it turned out that $50 million wasn't going to be enough, we allocated more than $20 million in additional funds. As a result, we were able to give each restructured municipality 75% of its eligible restructuring expenses.

I am also pleased to say that we're providing the city of Toronto with a financial package to help it achieve long-term savings for taxpayers. We appreciate that the city of Toronto has special needs unique to its circumstances. That's why we provided $50 million in non-repayable financial assistance for transportation and communications projects to be undertaken by the new unified city of Toronto. These funds were flowed to the city on June 27, 1998.

As part of the larger package, the province is providing the city of Toronto with two $100-million interest-free loans. The first $100 million flowed on July 15, 1998. The second $100 million will be made in 1999. This loan is contingent on the city making good progress towards finding savings and keeping taxes down. These loans will be interest-free until repayment begins. The city will repay the loan over three years beginning in the year 2000-01, with the final payment due by March 31 in the year 2003.

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On July 24 of this year a payment of more than $829 million was made to the city of Toronto/TTC to release the province from the TTC capital subsidy agreement, which was to construct the Sheppard subway.

The province stands behind the new city of Toronto. The city has committed to reducing its costs and we are providing assistance to help the city realize its targets. I am pleased to say that in less than a year the city has achieved significant savings in a number of areas. For example, the majority of the city's insurance program has been consolidated representing savings of $4.9 million or 54% from the 1997 costs. A contract for the consolidation of banking services will save the city more than $400,000 annually.

We are committed to making sure the new city works. I am pleased to see that the Toronto mayor, Mel Lastman, agrees that it's working. He recently told some of the neighbouring municipalities: "It works and it works well. The province kept saying this, but I wasn't listening. I just wanted to keep my little turf. And I was wrong. I was wrong because this is going to work and it's going to work better and we're going to be able to offer better services as well."

Mr John L. Parker (York East): I'm sorry, could you repeat that?

Hon Mr Leach: That's the end of the quote. But you'll hear it often.

Two years ago, when I appeared before this committee, I said at that time that our government was not interested in continuing the social housing boondoggle that existed when we took office in 1995. Since we took office, we have made significant progress in laying the foundation for a more streamlined, cost-effective and efficient social housing program.

Throughout this process, the interests of the residents have guided every decision that we have made. It has always been our belief that social housing is a service that can be best provided at the local level. Indeed, major municipalities like Toronto, Ottawa, Peel region, for example, have a long history of involvement in social housing. Our goal is one-window access to all social services, including social housing. We want to integrate these services at the local level, which will make it easier to make one singular, better system for all of the people who need and use it.

On January 1, 1998, we transferred the funding responsibility for social housing to the municipalities as part of the local services realignment. However, as we all know, this is just the beginning of a process. This is a transitional period and for this reason social housing expenditures are still reflected in the 1998 estimates. We are providing operating assistance to social housing providers and then we're recovering those costs from the municipalities.

The actual administrative devolution is expected to take two or three years to complete. We're working closely with the municipalities on that. The timing is also dependent on the successful completion of negotiations with the federal government. As you may know, in its March 1996 budget, the federal government announced its intention to devolve responsibility for social housing to the provinces and territories. I know that agreements have already been signed with five provinces and two territories.

In August of this year, the federal government signed a social housing agreement with Yukon territory. As recently as this month, September 10, an agreement was signed with Manitoba. Ontario needs an agreement with the federal government to fully devolve social housing to municipalities. I am confident that the federal government will soon return to the negotiating table to finalize that requirement. I am also pleased to see that the GTA mayors and regional chairs now support the government's call for a new federal-provincial social housing agreement.

We are committed to making the social housing program cost-effective, efficient and accessible to residents. Our focus in 1998-99 is to continue to work on designing and implementing a strategy that will achieve our vision for social housing. This is an ambitious undertaking and we are making excellent progress.

We are working on a framework for the devolution of administrative responsibility for social housing from the province to the municipalities. We want to ensure, most of all, that the transition is a smooth one and that services are not disrupted.

We are committed to establishing provincial standards which are consistent with national standards to guide municipalities and municipal delivery of social housing.

We continue to streamline the program in order to simplify and reduce the cost of its administration. I am pleased to say that in the last year we have achieved significant savings in the area of social housing.

We have put a process in place that requires financial institutions to compete on mortgage renewals. As a result, our interest rates on social housing are the lowest in all of Canada. We have taken full advantage of the decline in interest rates over the past year. In recent months, we have been able to consistently achieve interest rates of less than 6% on mortgage renewals. As more mortgages come up, we expect the average overall interest rate to continue to decrease.

We are not just looking to save money on interest rates. We are also looking to lower the risks associated with potential increases in interest rates in the future. Municipalities have requested stability in their future financing requirements as you would expect. Where it's appropriate, the ministry has been locking in low interest rates on projects to minimize risk over the longer term. Just recently, we locked in more than $250 million in mortgages for a 30-year term at a rate of less than 6%.

In the public housing portfolio, savings have been found through operational and cost efficiencies. Measures include re-engineering operations to streamline and reduce duplication, improving property management services, reducing controllable expenses and implementing an asset management process that identifies and allocates capital funding based on the need and condition of the portfolio.

Another very important initiative for my ministry was the Tenant Protection Act. Last year we passed the Tenant Protection Act and the new law took effect on June 17, 1998. What we have done with the Tenant Protection Act is to combine the six pieces of legislation that govern landlords, tenants and rents, as well as provisions within the building code and the Planning Act. Instead of that mishmash of legislation, we have consolidated everything into one package that is fair to tenants, fair to landlords and fair to the taxpayer. The Tenant Protection Act continues to protect tenants, while solving the problems with the system.

The new act has achieved four key goals: protecting tenants from unfair rent increases and arbitrary evictions; improving maintenance and getting tough on landlords who fail to take care of their buildings; streamlining administration and cutting red tape to create a faster, fairer, less costly system of rent control; and not least of all, creating a climate of greater certainty where people will invest in new rental housing and in the existing rental stock.

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We have also changed one of the most frustrating and confusing elements of the current system for both tenants and landlords: the method for settling disputes under the Landlord and Tenant Act. Disputes under the Landlord and Tenant Act were previously settled in court. It was not unusual for tenants and landlords to spend months resolving disputes. We have created a faster, more efficient process that moves disputes out of the courts and into a less formal system of mediation and adjudication before the new Ontario Rental Housing Tribunal. The tribunal has been up and running as of June 17, and I am pleased to say that the transition has gone very well.

There are 1.4 million residential units in Ontario with approximately 3.2 million tenants. To date, the tribunal has received and resolved over 8,500 applications for assistance. When the previous rent regulation legislation came into effect, it took months before the first cases were completed. I am pleased to say that this time the final decisions were out in a matter of just a few days. Applicants are generally getting their cases heard within three weeks and the members of the tribunal are getting their decisions out to the parties within two to three days.

To assist applicants, we have produced 20 brochures, translated into seven languages, including Braille and tapes for the hearing impaired. The tribunal has a toll-free inquiry line to help answer questions from Ontario's tenants and landlords. That system can take up to 2,500 calls in a day. We've made the system simpler and easier for everybody to understand. and not least of all, reduced the backlog in our court system and freed up valuable court time.

The changes to the Tenant Protection Act do not necessarily translate into significant dollar savings. The act has a much broader and longer-term effect. It lays the foundation for a fair and more efficient rental system, both for tenants and landlords, and it helps to produce a climate where people will invest in rental real estate.

If the rental real estate market is healthy, everyone benefits: the tenants specifically and the Ontario economy in general.

I am very pleased with the progress we have made over the past two years. The savings that we achieve benefit the taxpayers of Ontario. We came in with a very ambitious agenda and we've acted on it. The estimates of our ministry reflect our success. The administrative costs of the ministry have been reduced by a third. The estimates also reflect our commitment to the needs of the people of Ontario.

The tragic and far-reaching effects of the ice storm brought communities and people together. People look to government for support and financial aid and I'm very pleased that my ministry was able to contribute to this effort.

In closing, I would like to say that we will continue to streamline our operations. We will continue to look for inefficiencies and duplication. We have an obligation to the taxpayers of Ontario to balance fiscal responsibility with our social responsibilities. We've done that and we will continue to do that. I thank the members of the committee for their attention.

The Chair: Thank you very much, Minister, for your comments. You have approximately another six minutes, should you care to use that for any further comments.

Hon Mr Leach: I'd like to indicate that I have members of the ministry staff with me here today. I'd like to introduce specifically our new deputy minister, Mr Michael Fenn, who is here.

The Chair: Welcome to you, Mr Fenn.

Hon Mr Leach: Many of you may know Mr Fenn's background. He was the CAO at Hamilton-Wentworth and has an extensive background in municipal matters. He is a great asset to our ministry and we all look forward to working with him. We have other members of our staff who will be able to answer specific detailed questions if members of the committee wish to pose them. With that, Mr Chair, I'm more than willing to relinquish the next five minutes to your discretion.

The Chair: Thank you, Minister. Then we will commence with the responses from the opposition parties, Mr Cleary to start.

Mr John C. Cleary (Cornwall): Minister, there are a few things that you mentioned in your speech about local governments. You want them to be more efficient and more accountable. I have been at a number of meetings in rural Ontario where municipal councils figure they're going to have to increase tax bills on small business by two or three times, and I just wonder what your comments are on that.

I was at a meeting down near the Quebec border the other night. There was a time scheduled to be at the meeting and I was there on time and you couldn't even get in the parking lot, there were so many small business people there.

Hon Mr Leach: There has been absolutely no action taken by this government that would cause a tax increase of any kind. The only thing that would cause a tax shift within a municipality, and most of them are tax shifts because I think that if you check in your municipality, you will find as many people are getting tax decreases as are getting tax increases -- that's a result of this government bringing in a fair assessment process. The current value assessment process is finally going to bring some fairness and equity back into a system that I think everybody would agree was badly broken and damaged over the years. I'm not just talking about the opposition parties not dealing with this in the past. The Tory government was faced with a situation back in the 1970s. Nobody had the political wherewithal to go out and do something about it. The problem is that it just gets worse and worse.

We finally faced the issue that something had to be done on it. Some of the shifts are substantial. As a result of that, we tried to give the municipalities as many tools as we possibly could to make it possible for them to implement the new fair and equitable system as smoothly as possible. Some of them took advantage of those tools; some of them didn't.

I don't know specifically, Mr Cleary, about Cornwall, but I know that in many other areas they did take advantage of the tools available, and I'll use my community, the city of Toronto, as an example. They used the tools, they've smoothed the system and they have eliminated many of the concerns. We are presently working with AMO. AMO has come back and agreed that the system had to be fixed. We agree there are some shifts that have to be smoothed out and we've agreed to look and work with them to provide whatever additional tools may be necessary to assist municipalities in doing that.

Mr Cleary: So you feel the downloading was revenue-neutral?

Hon Mr Leach: Yes, the downloading was revenue-neutral on the trades between the delivery of services, when we said we would take 50% of education off the property tax and transfer other services in place of that. That was money in and money out.

Where the call of non-revenue-neutrality comes into play was with the municipal support grant, when we advised municipalities in 1995 that that grant would be eliminated over three years. They acknowledged that. The president of AMO acknowledged that. That was $600-some-odd million. That came to the province's benefit and nobody has ever denied that. We'd said we were eliminating that grant and we eliminated that grant. That required municipalities to come up with cost savings of anywhere between 1.3%, I believe, and 4.2%. So yes, from a Who Does What standpoint it was revenue-neutral.

Mr Cleary: Municipalities claim that they're only getting half what they should get under the special circumstances fund. Do you have any comments on that?

Hon Mr Leach: A special circumstances fund just means that. There were many municipalities that had a different definition of special circumstances than many of the rest of us did. We had $70 million, I believe, in that fund and it was distributed in a manner that was the most fair and equitable way to deal with municipalities that truly did have special circumstances. All municipalities didn't get everything they asked for. There isn't any doubt about that.

Mr Cleary: Many municipalities in our part of Ontario say they're going to have to increase their taxes by at least 14.5% on some of the issues. Part of it's to do with policing costs; others are different reasons.

Hon Mr Leach: That's a very good point. The policing costs is an excellent point. About half the municipalities in Ontario paid for their own policing and about half did not. Those that were paying were getting pretty fed up with the others getting a free ride and that free ride is over.

We have a $90-per-house cap on all municipalities that weren't paying for policing in the past. Again this was an issue that was brought in to ensure fairness and equity right across Ontario. The problem we were facing in this province was that we had not necessarily bad policies, but fractured policies that didn't apply consistently right across the board. You had some municipalities that were benefiting greatly as a result of the province picking up all the policing costs, while other municipalities were bearing that load themselves. We've levelled that playing field to make sure that everybody pays their own way.

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Mr Cleary: We were right in the heart of the ice storm and we're getting call after call from people wondering when the people who had losses will be getting their money. Some of them are very worried that they won't get the repairs done before winter. They can't go through another winter the way they are.

Hon Mr Leach: I'm sure you're aware of how the process works. The disaster relief committee is made up of all local people, all people from your community. The province's funding is paying $4 for every dollar that's collected by that local committee of your neighbours. Those individuals, the umbrella committee, the Eastern Ontario Disaster Relief Committee, along with the eight other local committees, are responsible for processing the claims, making sure people get the emergency plumbing they need and making sure that anybody that had an emergency situation got money immediately.

We flowed money to the committee; the committee distributed it. I think they did an excellent job. They were all volunteers. Not one of them got paid a cent. As I mentioned in my comments, they were truly the heroes of this event. They put in countless days and hours making sure the people in eastern Ontario were dealt with as quickly and as effectively as they could.

Mr Cleary: So you're saying the provincial money is there now.

Hon Mr Leach: The provincial money has been there. Whatever was required flowed. As I mentioned, this is a three-way process. It's the federal government, the provincial government and the municipalities. We worked together co-operatively on this one. All three levels of government, I thought, worked very well together. But it was the local disaster relief committees that processed the claims, decided what claim was eligible and decided what got paid, and they did an excellent job.

Mr John Gerretsen (Kingston and The Islands): Let me just continue on that line. You state in your speech there's been 28,000 claims made. How many claims have actually been paid out? Do you have any statistics on that? It's my understanding that no claim has been paid out as yet. I could be wrong. Maybe you could correct me.

Hon Mr Leach: I think that you are wrong, because I know there are about 8,000 claims -- my goodness, they are just moving faster than I thought -- 12,439 claims, for example, have been paid. My understanding is --

Mr Gerretsen: Have been paid to the individuals that filed the claims?

Hon Mr Leach: That have been paid to the individuals that filed the claims.

Mr Gerretsen: When did that happen?

Hon Mr Leach: There were many claims that were paid within days of the initial money flowing. I personally went down there, and you were with me in many instances, where we provided money to municipalities to get out there and pay immediately.

Mr Gerretsen: Just a minute now. There were two pots of money. One pot was for municipalities and there was another pot for individuals who actually made the claims.

Hon Mr Leach: Yes.

Mr Gerretsen: I'm talking about the claims that individuals made, not the municipalities.

Hon Mr Leach: Yes. Right in Mr Cleary's back door in Cornwall there were people that had claims of less than $200 who were paid immediately right on the spot, right there.

Mr Gerretsen: Oh, the $200 cheques; we're talking about - you made the statement earlier that 12,000 of the 28,000 claims have actually been paid.

Hon Mr Leach: That's correct.

Mr Gerretsen: Have they been paid in full?

Hon Mr Leach: To the best of my knowledge they have been paid in full. You have to realize the way this process works. The first thing, anybody that had damage had to claim on their own insurance company. Everybody appreciates that. That's what insurance is for. If they had damages that weren't covered by insurance, then they could make a submission for payment of that. Those claims were put to the disaster relief committee, they evaluated the claim, along with their adjusters, and if it was an eligible claim they could pay it almost immediately.

The number of claims that came in at the last moment was surprising. I think it ended at the end of June and the last few weeks there were thousands and thousands of claims made by individuals who were just making sure they were touching all the bases and putting in a claim. Some of those are taking some time to evaluate, there isn't any doubt about that. But I can say that the claims process and the disaster relief assistance that was provided in this disaster was better, faster, more efficient than any disaster relief program that has ever been undertaken in Canada. Your federal counterparts will attest to that as well. Give Mr Eggleton a call.

Mr Gerretsen: Until very recently we continued to hear from people who had made claims under this program -- I'm not talking about the municipal program now but the individual program -- where even the local committees were saying the money just hasn't been made available by your ministry. Maybe that's changed. Maybe Jean-Marc's got a question.

Hon Mr Leach: The money would be made available. If you have any specific cases, I would be glad to take that information and get it back to the disaster relief committee and ask them for a status report on any specific claims that you may have. My information is that it was processed as quickly and as efficiently as possible, all by volunteers.

Mr Gerretsen: The people's problems are not with the individual committee that operates in each community or the umbrella group. They're fantastic people, they try to do the best they can. I totally agree with you on that. But it's my understanding from talking to some of those people who are on these committees that in fact the provincial funding wasn't flowing or hasn't flowed. That may have been rectified, from the numbers that have just been given, but that's certainly a very recent phenomenon.

Hon Mr Leach: They're not correct, because I can tell you that we went down within days and made sure there was $50 million of provincial money available for distribution as the municipalities saw fit and as the disaster relief committee saw fit.

Mr Gerretsen: Those were the $200 cheques that anybody could receive who felt that they were entitled to it, without any receipts or what have you. I'm not talking about that money. I'm talking about the money that was claimed after they went to their own insurance companies.

Hon Mr Leach: That's right.

Mr Jean-Marc Lalonde (Prescott and Russell): I've been following this very closely, and I had a discussion with the minister on this too. Definitely, a lot of claims have not been settled yet, and people have borrowed large amounts of money, right up to $96,000, to have their buildings fixed so they could continue operation. But I'm in contact regularly. Now it seems to be flowing a little better. I agree with you, there are over 12,000 claims that have been partially paid or a very little amount.

I have cases -- I was just on the phone a few minutes ago again. They've received $450 on a $5,000 claim and another $128 on a $12,000 claim. The problem seems to be that at the present time the committee is meeting once a week to review the recommendations. I really feel that this committee -- true, they are heroes, they are volunteers -- probably should be employed by your ministry to speed up the process.

At the present time the adjusters are visiting the area, for which they're getting a certain amount of money. Sometimes it takes two or three visits by those adjusters. Then it goes to this company that got the contract, but it's not entered into the computer that the first step has been reached. It goes to the committee, but they don't know where it is. The claimants are making calls and they're getting all sorts of answers. This is where they get frustrated.

I was telling them last week that there's a step missing in there. I think the ideal solution to try and solve some of the problems or some of the questions that the people have -- I've been telling them very often that they should have a press meeting and explain the procedure that they are following. That would clarify a lot of positions. They haven't been doing it.

Hon Mr Leach: I'm quite surprised to hear that, because I know that they have a communications person with the umbrella committee who has been keeping the municipalities and all the stakeholders involved. If you have a specific instance, if you could provide me with the information I will follow up on it and see what happens.

I was interested in the comment that you made that there's a $96,000 claim. If you have the specifics on that one, I'll take it back to the local committee and ask them to investigate and get back to us. These are decisions that are made locally. They're made locally by the disaster relief committees. We set them up specifically because it's the local individuals who know their neighbours, know what claims should be paid, are able to assess them quickly, have an understanding of the local conditions. The local committee made up of local people from Cornwall and Kingston and Ottawa is there making its decisions to make sure that their neighbours are paid their appropriate amount as quickly as possible. If there's a problem with the way that process is working, if you have any specifics, I'd be glad to follow it up with the umbrella committee.

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Mr Lalonde: Could I just continue?

The Chair: Yes, you have another 10 minutes.

Mr Lalonde: When I referred to this $96,000, just to show that there was a need there, the Ministry of Agriculture has lent some money to this farmer, $25,000. But the bank is still after the balance. That settlement hasn't been done. When I call, I get full co-operation, but when individuals call, they just can't get the answers.

I agree; at the beginning, when you said there was a certain amount of money given, that was for the urgent need. But the claimants did not receive that money at the beginning. It's only the municipalities that received that, for the immediate relief that they had to give to the people. But the other people have not received that money.

Hon Mr Leach: As I mentioned earlier, the first step for an individual to do was to claim through their insurance company. Obviously, claiming through their insurance company takes some time to process. It's only that portion that is not covered by their own insurance that the Ontario disaster relief committee would look after. There well could be a delay in that process if the individual's insurance company required additional information or didn't process the claim as quickly as may have been desirable. That perhaps could account for some of it.

I know that when claims come to the local disaster relief committees, they're acted on as quickly as humanly possible. I know from research that we've done across North America that they're being processed faster and more effectively than any other disaster relief program in history in this country.

Mr Lalonde: Some of the claims from April have not been settled yet.

Hon Mr Leach: That's quite possible.

Mr Lalonde: They haven't seen the adjuster visiting them either.

Hon Mr Leach: Again, if you have specific examples, I would be glad to take any specific examples, investigate them and get back to you.

Mr Richard Patten (Ottawa Centre): Minister, in your presentation, you made the comment that if the rental real estate market is healthy everyone benefits, the tenants especially and the Ontario economy in general. Could you elaborate on that? When you say the real estate market is healthy, what does that constitute for you?

Hon Mr Leach: It's healthy when they can get a fair return on their investment; when the amount of taxes they have to pay on a rental building is fair and equitable and comparable to something they would pay on a condo or a residential property; when they're building a rental property, that they pay the same amount of GST or PST on a rental as they would on a condo. All of those things have to be melded together to make sure that the rental market is healthy. We've made a lot of steps to make sure that's happening.

Mr Patten: I was thinking in particular about the tenant. I wonder if you have had an opportunity to -- as you know, I represent an Ottawa riding, Ottawa Centre. I've been reading the interim report on the mayor's homelessness task force which just came out. I haven't quite finished it yet, but I've read about three quarters of it.

Hon Mr Leach: Ottawa?

Mr Patten: No, it's from Toronto, the Anne Golden report. It's an interim report. The whole housing field is complex, no doubt. When you were dealing with Bill 96 you said getting rid of rent controls would lead the private sector to build new rental units, and that may be true. But if we look at the lower end of low-income families, what have been the results to date? What has that particular policy, that particular legislation stimulated?

Hon Mr Leach: It was only passed and went into effect on June 17 of this year, so it's a little early to see any specific results, although I can pass on to you that in my conversations with various developers that are in the rental construction business, they are prepared to go. There were a couple of other steps that they had asked for help on and one was the property taxes, making sure that residential property taxes on rental units was the same as on a condo or a single family dwelling. We have given the municipalities the ability to put that in. Some municipalities have done that, some have not, and I think when that sorts itself out over the next few months you'll see some rental buildings under construction.

Mr Patten: The bill is recent, new, but when you first got in, in 1995, you cancelled 17,000 units of affordable housing and social housing. Our figures suggest that very few, if any at all, have been developed for what are classified or categorized as people who need affordable housing, who are spending more than 30 per cent of their income on housing. By that definition, there have not been any units in the Toronto area that have come on line in the last three years. So we are not just talking since the bill.

Hon Mr Leach: It may have been very affordable to the individual involved but it just was not affordable to the taxpayer. We have a co-op housing program, and I agree that co-op housing is probably the best way to go to provide affordable housing. The program that we had in effect in the late 1980s and early 1990s turned into a boondoggle, a good idea that just went bad. We've got almost a billion dollars in debt and less than $400 million in assets. It was something that was just hijacked by groups and individuals who would put up a co-op next door to a condo and the co-op would cost half as much again as the condo because the government was picking up the bill. It was a program that we just had to get our hands on and get a handle on.

We've done that. I think the private sector has the ability to provide housing at all levels, high end and low end. If you give a level playing field that allows them to get a fair return on their investment, they will get out there and build. But everything was thrown in their face to stop them from doing that. Why, for example, would municipalities charge four times as much property tax on a rental building as they do on a condo? Does that make any sense? Does that encourage the construction of rental housing? I don't think so. We have given the municipalities the ability to bring that down. Does it make any sense to charge seven per cent on construction?

Mr Patten: No. We talked to developers as well and they say: "We are in business, we want to make a dollar. There are no incentives for us to build lower-end rental units."

Hon Mr Leach: Not with the conditions that were in place at the time, but as I've said, we're levelling that playing field and we're taking all of the impediments away from them being able to do that.

Mr Patten: In Toronto, what would that level be? Can you name a developer who is engaged now in the process of permits to build a certain level of rental housing?

Hon Mr Leach: There are a number of developers in the Toronto area that are sitting on land that is zoned for rental accommodation that are prepared to build as soon as they can get a commitment out of the municipality to ensure that the property tax system will be fairer and more equitable than it is now.

Mr Patten: This interim report suggests a direct correlation between expanding the housing stock for all people, and homelessness. It's not just people short of housing; there are many people who end up homeless. There is a direct relationship with the reduction of affordable rental housing stock in the Toronto area.

Hon Mr Leach: There was no reduction. You've got to remember that we did stop the co-op boondoggle that was going on, but every project that was under construction continued and was completed. It was only projects that wouldn't have even started construction until about this year that were cancelled. So the cancellation of that program had absolutely no affect on the short-term housing supply.

As a matter of fact, it's very interesting to note that Anne Golden's numbers apply to what was taking place in 1990. Between 1990 and 1995 are the statistics that she is using in her report. So the disastrous results that she's referring to relate to the actions of your government from 1985 to 1990.

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Mr Patten: That's not what her figures say here. She's talking about --

Hon Mr Leach: I think the statistics she's using are statistics that were in place between 1990 and 1995.

Mr Patten: So you now have a plan that's going to see new housing stock come on for low-income people.

Hon Mr Leach: There's a need to ensure that there is appropriate housing for all members of our society. There isn't any doubt about that. When you read the report that Anne Golden has produced for the city of Toronto, but when you also look at the report that has been undertaken by Minister Ecker's ministry and Jack Carroll, her parliamentary assistant, on the effects and balance of Ontario, and when you look at the information that's being provided by the social housing task force, whose report should be available within the next two or three weeks, you certainly understand that there was a need for all three levels of government to work co-operatively in providing social housing. We're going to be working with the federal government and with the municipalities in doing just that.

Mr Gerretsen: Let me get into that for just a second; we only have three minutes left, Minister. Isn't it true that the provincial government currently has absolutely no plans at all for any kind of social housing or any kind of low-rental housing, call it what you like, to be either built or financed by the provincial government?

Hon Mr Leach: That's correct. We stopped the co-op housing program because --

Mr Gerretsen: Not only co-op but non-profit or your own social housing. You have no plans at all to build any housing whatsoever?

Hon Mr Leach: That's correct. I don't believe the provincial government should be in the bricks and mortar business. I think we should be in the business of making sure that individuals who need help in finding accommodation get that accommodation. I think the local municipalities have a responsibility for providing social housing and we as a government have an obligation, through rent supplements or other means, to make sure that individuals have the ability to pay rent.

Mr Gerretsen: But isn't it true that the reason the province and feds got involved in it initially, many years ago, was because municipalities simply didn't have the financial wherewithal to create the kind of social housing that was needed for the lower end of the scale?

Hon Mr Leach: That's absolutely correct. That's why we're giving the municipalities the financial wherewithal to do it, because we're taking education off the property tax, 50% already, and giving them the tax room and the funds necessary to provide the social housing.

Mr Gerretsen: What do you mean "the funds necessary"? The municipalities themselves will raise the funds necessary. The province is completely going out of --

Hon Mr Leach: Because they now have the tax room to be able to do that.

Mr Gerretsen: You're completely going out of the housing business.

Hon Mr Leach: They couldn't do it before because of the crushing load of education taxes. When my tax bill in Toronto was 80% education and 20% for municipal services, that just drained the taxpayers' ability to provide services the community needed. By taking 50% of education off the property tax we've given the municipalities the tax room to go in there and raise the money they need to provide the social services their communities need.

Mr Gerretsen: So the agreement you're talking about with the federal government, because the federal government's going out of it as well, is basically only for one purpose and that is to off-load all these social housing units on to the local municipalities. That's the agreement you're talking about. You're not talking about any kind of new housing component at all.

The Chair: Mr Gerretsen and Minister, we'll have to ask you to hold on to this discussion until the next round.

Mr Gerretsen: Can he answer the question?

The Chair: With Mr Marchese's consent, sure.

Mr Rosario Marchese (Fort York): Sure.

Hon Mr Leach: Yes, because the federal government agrees, and we agree, that we should get rid of the waste and duplication that was in that housing system and that there should be one level of government that's responsible for doing it.

Mr Gerretsen: And that's the local level?

Hon Mr Leach: That's the local municipality.

The Chair: Mr Marchese, for the third party. You have 30 minutes.

Mr Marchese: I'm going to talk about the tenant protection package for a bit and ask you to focus on that. I'll refer you to page 18 of your own report and then I'm going to get back to the housing --

Hon Mr Leach: I'm sorry, page 18 of --

Mr Marchese: Page 18 of the report that you read out today.

Hon Mr Leach: I'm sorry, mine's not in the same page-numbering sequence as yours is, so I can't get it.

Mr Marchese: Mr Chair, I don't mind staff sitting with the minister if he would prefer, either the deputy or the other political person or whoever she might be. If you'd like to sit with her, that's fine with me.

On page 18 you say: "The Tenant Protection Act continues to protect tenants, while solving the problems with the system. The new act has achieved four key goals," and the first one is, "protecting tenants from unfair rent increases and arbitrary eviction."

Could you explain, as you can, how tenants were protected from those unfair rent increases.

Hon Mr Leach: Because we maintain rent control. We maintain exactly the same formula that your government put in place. You did something right there. You put in a good formula that says that there's a --

Mr Marchese: I appreciate the compliment. Rent control still continues. I appreciate that. Talk about, if you can, decontrol and how that protects tenants.

Hon Mr Leach: When there's a vacant apartment there is no tenant. When you rent an apartment rent control applies to you. As soon as you're in there, from then you're covered.

Mr Marchese: I appreciate that. Of course, if there are increases --

Hon Mr Leach: By your own formula.

Mr Marchese: Thank you very much for the compliment again. Perhaps we could just get back to the other problem, though, of tenant decontrol. I'll explain: If you're still in the apartment, you're a sitting duck, we say, because you still have increases that you didn't have before, from 3% to 4%, plus the additional cost that you've got through the extraordinary cost of taxes that weren't there before now.

Hon Mr Leach: Actually, taxes will be coming down.

Mr Marchese: It's an addition too. It wasn't there before. Do you follow that?

Hon Mr Leach: The taxes that weren't there before?

Mr Marchese: Whatever increases there might be in property taxes are now added on to the cost, whereas before it was part of the cost, right?

Hon Mr Leach: Yes, or any tax decreases that occur are deducted.

Mr Marchese: God bless them if they can get it.

Hon Mr Leach: No, it's law. They must be passed through. The taxes on apartment buildings being four times the residential rates --

Mr Marchese: I heard that. I'll try to get to that.

Hon Mr Leach: There's only one direction for that to go.

Mr Marchese: But if I can, I realize there's so much to say. I want to be able to get through these and then ask other questions, of course, if I can.

The decontrolling means that if I leave, as a tenant -- I'm still a tenant -- I've got to go somewhere else. I can't afford a house, so I'm still a tenant. For whatever reason, if I have to go find another place, unfortunately now, as I move to another place, I will be charged whatever the landlord is able to get out of me. From the evidence we've got so far there's been a $200 increase, on the average, for those folks.

Hon Mr Leach: I have absolutely nothing to substantiate that.

Mr Marchese: I didn't think you did.

Hon Mr Leach: If you have any information I would be pleased to have it.

Mr Marchese: We'd like to pass it on to you.

Hon Mr Leach: I can tell you right now that in the vast majority of communities in Ontario, rents being charged by landlords are far less than what they were allowed to charge under your legislation.

Mr Marchese: If you've got evidence for that, please show it to us.

Hon Mr Leach: I can do that. This shows you that market conditions will truly set a fair and reasonable rent.

Mr Marchese: I appreciate the philosophy of conservative economics, but we don't buy into it because we argue it's a problem. It's a matter of political difference.

Hon Mr Leach: That's only because you're wrong.

Mr Marchese: Of course. That's why we have these debates, because we're wrong and you're right. Those polarities are always there.

The poor person who faces an eviction for whatever reason -- and there are many -- we argue is faced with rent increases, and therefore we say there are no protections for that individual.

Hon Mr Leach: Why are they faced with a rent increase? I don't understand that.

Mr Marchese: This is going to get very long. If we already have a problem in terms of understanding, we're not going to get through to the second point. Decontrolling means those folks, once they move into another place, are faced with an unclear market in terms of what people will charge them.

Hon Mr Leach: That's right. The rent could actually go down.

Mr Marchese: No, Minister. I know you want to say that.

Hon Mr Leach: In Ottawa we talked to a landlord -- rents went down in Ottawa --

Mr Marchese: We're not going to be able to have a good debate --

The Chair: Pardon me, Mr Marchese, Minister. For the benefit of Hansard, if we could get one person speaking at a time, it would be helpful.

Hon Mr Leach: My apologies, Mr Chair.

Mr Marchese: We're trying.

The Chair: I know. I appreciate the effort and I didn't want to jump in till I thought it was --

Mr Marchese: We've got a problem with this, and so did many tenant groups. You will recall -- we told you because you weren't able to make many of the meetings obviously, and I appreciate that; you're a minister -- that most of the tenant groups that came to those meetings said: "Leave the existing rent control in place. It protects us." You in your conservative wisdom said: "You guys are wrong. You don't know any better. We'll try to fix it for you. Unfortunately, in spite of all of your claims, all of you out there, organizations and individuals fighting to keep rent control, we've got to change it because that's the best protection for you." The point is, all those poor folks are unfortunately wrong, in your opinion. Is that the way you would see it?

Hon Mr Leach: We think the act that was proclaimed in June protects tenants, protects landlords and gives a fair basis for both parties.

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Mr Marchese: I understand. I was going to go through the other points there. I'm not sure it's worth it really, because I'm not sure our differences are going to be clarified through the points you make and the questions I ask, but I'm going to try.

Let's look at the next one: "Improving maintenance and getting tough on landlords who fail to take care of their buildings." What are you doing there to fix that problem?

Hon Mr Leach: Under the previous legislation they used to have to give notice before they could put out a work order for improvements or repairs to be done, if they were necessary. Now they don't have to get that initial order. They can give a position for the work to be done immediately without that work order. They don't have to give that notice-of-work order. They can go right in and give the work order to the apartment builder and say, "Fix it." If they don't fix it, it is fixed and it goes on their taxes.

Mr Marchese: That does rely on tenants to have to bring the complaint through, doesn't it?

Hon Mr Leach: If they're not satisfied with the condition of the apartment, yes, it would be contingent on them bringing that to the landlord's attention and then to the rental tribunal after that.

Mr Marchese: Part of the problem as I see it is that you've got a third of three million people who earn less than $20,000, and I suspect the literacy level of a lot of these people is very low. New to the country, many of them don't know how the system works. I'm not sure you're putting out information to them individually saying in their own language: "This is what you can do. In the event that this person isn't doing this particular maintenance job, these are you rights." I'm not sure you're doing that. So how do these people really protect themselves?

Hon Mr Leach: Actually we do. We put out the brochures in numerous languages, particularly in Toronto, particularly in my riding and your riding where many of the individuals you're referring to reside.

Mr Marchese: Could I see? Maybe the deputy or someone else has some of those brochures that they could show me. Does anybody have them? In the different languages even.

Hon Mr Leach: We put them out in different languages. We put them out in Braille.

Mr Marchese: Perhaps you might send it to me, or any other members, because I'd like to see that.

Hon Mr Leach: They're probably in your constituency office. We sent them out to all the members.

Mr Marchese: I thank you for that, but I'm more concerned about --

Hon Mr Leach: I know they're in my constituency office. You could send your people over and they could --

Mr Marchese: We try to send them over to you.

Hon Mr Leach: In groups usually.

Mr Marchese: Let me get back to the issue.

Laughter.

Mr Marchese: Sorry, I didn't hear that.

Hon Mr Leach: In groups.

Mr Marchese: Well, we do our best. Things happen in groups, we argue, because individually it's a lot more complicated. We say, "Look, it's the obligation of the minister to meet with you, and if they have no time, they don't deserve to be there." Right?

Hon Mr Leach: Oh no, I meet with all of them.

Mr Marchese: On the matter of housing, I believe we have a crisis on our hands. Do you share that view?

Hon Mr Leach: I think there is a need for a strong housing policy, and we're going to work with the various levels of government to make sure that policy is in place. There's a need for the federal government, the provincial government and the municipal governments to deal with issues that relate to housing --

Mr Marchese: So we have a problem. Do you admit that we have a serious problem?

Hon Mr Leach: I admit that things could be better, certainly.

Mr Marchese: Many people say we have a crisis on our hands. There's a fellow whose name is Mark Guslits, who's a developer who's interested in finding solutions to housing low-income families. He raises this point. He says, "How did Canada go almost overnight from being a world leader in developing good social housing to having almost no programs?" He is as convinced as I am that, "Unless the provincial and federal governments make substantial investments in housing programs, the need for affordable housing will never be met." That's the comment I make and the comment he makes.

You're saying the federal government is to get involved as well. But you also said the provincial government shouldn't be involved. How do you mean the provincial government should be involved? I am not quite clear.

Hon Mr Leach: The provincial government does not necessarily have to be involved in the construction of the bricks and mortar. We believe that the municipal government, the local government should make the decisions as to where social housing should be built, what standard it should be built to, the quality and so forth. That's a local need. The provincial and federal governments should make sure that we have policies in place that encourage both the development industry and the building industry to get out there and build that rental accommodation. They'll do that if we --

Mr Marchese: So the role of the federal government is to find ways to encourage the private sector to build, whatever they may be -- we don't know -- is that it?

Hon Mr Leach: Yes.

Mr Marchese: The provincial government says, "We're trying to help municipalities by the download that we have accomplished, to give them more power, including the power to be able to deal with that differential between the taxing of condominiums and the rentals." In that way, you're saying the provincial government is also helping. Is that your role?

Hon Mr Leach: That's correct.

Mr Marchese: We just don't see that happening. We just don't see that working.

Hon Mr Leach: Stay tuned, it will.

Mr Marchese: But that's the problem, because those who are staying tuned -- and me, I have a house that I'm paying a mortgage on, so I'm OK, but the ones who are the stay-tuned types are in trouble. There are many statistics that I want to share with you as quickly as I possibly can. This is Breaking the Cycle of Homelessness. It's an interim report of the mayor's Homelessness Action Task Force. It's a great report. If you haven't read it, I urge you to look at it. They also say on page 9 --

Hon Mr Leach: Is that the draft report? The final one isn't out yet.

Mr Marchese: It doesn't say "draft" here. Oh yes, it's interim. But this statistic doesn't change and I'm sure it won't change. It says:

"From this analysis it was estimated that a staggering number of people in Toronto, more than 80,000 people, are at risk of becoming homeless. These are people who are spending more than 50% of their income on rent and are living in extremely precarious housing situations."

I tried to underline many statistics that I thought would be useful for you, but I'm going to quote some other statistics and then I want you to respond. "In Toronto, a staggering 37,000 households are now on the waiting list for rent-geared-to-income housing, nearly double the 1995 number." This is during your period, not ours. "Forty-six per cent of shelter users are families with children, yet families with children face an impossible 10-year wait for rent-geared-to-income housing."

Toronto's not alone. In the region of Niagara, the local housing authority reports an increase from 921 families in 1996 to 1,709 in 1998, during your period again. That's an 86% increase.

In north Waterloo, in spite of the strong local economy, as indeed in many parts of Ontario, waiting lists remain constant at about 1,000 families. A 1997 study done for Peterborough concluded that one in three Peterborough households is facing a housing crisis. In Toronto, the mayor's Homelessness Action Task Force reports that the greatest loss in housing affordability is being experienced by families with children. There are 250,000 to 300,000 families in the new city of Toronto who cannot afford market rent. This number increases by 5,000 to 6,000 families every year. Applying these data to the whole province indicates an additional 15,000 to 18,000 households a year are seeking affordable housing.

I gave you statistics because they're based on credible studies, I think, and you can probably get hold of them if the deputy doesn't have them or hasn't seen them. But in my view, this speaks of a crisis. I'm not convinced, as you all are, that passing this responsibility down to housing where the tenant and the homeowner end up having to pay for the new power, the responsibility of having to pay for housing and to have to find ways to create new housing -- I'm not sure that is right to do. My view is that the provincial government should do that through its income tax system, not through the property tax system. But you obviously don't share that view.

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I don't see the municipality having the power or the resources, as you say they do, to do this unless I argue and many other people in the field argue, "You get involved in the way that we were involved." Unless the federal government puts some money into it, the crisis that I speak about is going to get worse. What do you think?

Hon Mr Leach: I believe that -- as your statistic shows, it varies from municipality to municipality -- municipalities are in the best situation to determine what social housing should be built and construction maintained in that particular area. What the province has to do is make sure they have the financial wherewithal to do that. They would be responsible for financing and paying for social housing. The province is going to make sure they have the tax room available to be able to do that. That was part of the trade of the services we went through.

Mr Marchese: Right, I appreciate that. I don't agree with it and neither do they. Most municipalities --

Hon Mr Leach: We've had a number of municipalities that are -- obviously, if they can get somebody else to pay for it, they would be glad, as we all would. If I can get the feds to pay 100% of it, I would grab it in a minute.

Mr Marchese: Let me ask you this, because it's a point I made. I wanted to ask it as a question. Do you think it's fair for the income tax system through the province to pay for housing and its needs, or do you think the taxpayer of homes and the tenant should pay for housing? What do you think is fair?

Hon Mr Leach: I agree with you. I have stated publicly at AMO meetings that income distribution issues should be paid for on the income tax base. I agree with that, the Premier agrees with that and the Treasurer agrees with that. As a matter of fact, I think at the last AMO conference just a few weeks ago the Treasurer stated that when we get our fiscal house in order, we will be moving in the direction of removing social service income distribution items off the property tax back to --

Mr Marchese: But you've downloaded all of that. You've downloaded more child care, more welfare and all of housing to the municipalities.

Hon Mr Leach: We're getting into an issue that is outside of the purview of this ministry and more into social and community services, but the province pays 80% of welfare. I honestly believe that as we get our financial house in order, the province should assume that other 20%. I think the goal is to do that but it's a trade-off. We'll take that 20% --

Mr Marchese: We don't see it as a trade-off. I don't see it as a trade-off and I don't believe the property owner and tenant should be burdened with that. In that trade-off, which you say is neutral and which we argue isn't -- it is not a good trade-off. Those responsibilities are in my view larger-picture responsibilities that properly belong to the provincial government. You seem to feel tranquil in the notion that by doing this trade-off, everything should be OK. I'm saying that we have a crisis that's not going to be fixed unless you're involved. Your involvement says, "Let's get out of the way and let the private sector do it." But the private sector is not building, therefore we have a crisis on our hands.

Hon Mr Leach: I believe, as I've stated previously in this conversation and in previous statements, that the private sector will go in and build if you provide the economic climate for them to do it. As Mr Gerretsen mentioned, they're there to get a return on their investment, and they should. If the federal government and the provincial government provide the right economic climate, they will provide the necessary housing.

Mr Marchese: I hear what you're saying and you've always been saying this from that side: that the only time the people will build is when they can make a profit. But to do so, we have to give a whole lot to them, otherwise they will not build.

This is where I get to a British Columbia study. We also have other studies. A 1998 study commissioned by British Columbia Housing -- it's called Cost-Effective Housing -- concludes that government is more cost-effective in providing low-income housing. After studying 34 equivalent market and non-profit units over a 20-year period, the study concludes that within five years the cost of the non-profit unit is lower than subsidizing market units through shelter allowances. In BC the long-term savings of operating 16,000 older non-profit units compared to subsidizing market rents is $32 million a year by the 25th year of the program. I'd like to be able to get such a study so that we can get feedback from your deputy and others.

It has always been my belief that that housing stock should belong to the government, should belong to the people, that in the long run it is an asset that belongs to us, not to the private sector, that we control those rates and that we give breaks to people who sometimes cannot afford them, who fall by the wayside for a lot of market reasons. If we don't do that --

Hon Mr Leach: Just in response to that, if I could, I believe that when the government gets involved in building the bricks and mortar without paying attention to the needs of the individual, that's when you have a problem. If I'm an individual and live in Toronto and I choose to move to Ottawa or to Kingston or to North Bay or wherever, I should have the right and the wherewithal to do that. That's why I think if we're going to help individuals, then it should be in a rent supplement to individuals that's affordable to allow them to move -- look after the individual, not look after the bricks and mortar. The municipality should build the bricks and mortar they need.

Mr Marchese: They don't have the money to build. They can't build. So we have a housing crisis.

Hon Mr Leach: We're providing them the wherewithal to have that ability.

Mr Marchese: They don't have the wherewithal, they're telling you that, I'm telling you that, therefore we have a crisis that's getting bigger and bigger. By the time you are aware of it, we won't be able to deal with it very well. You say that your solution is to provide individual support, that municipalities have the wherewithal, which I say they don't, and then you say, "We want to give individuals the ability to be able to go out there and find something that's suitable to them."

We know that people with disabilities, for example, are having a hell of a time finding appropriate accommodation. How do we give that person that little allowance, whatever it might be, to be determined by you folks? How do we find appropriate accommodation for that individual or for those thousands of individuals who need appropriate housing that nobody is building? Where do we send them?

Hon Mr Leach: As I've said, you provide the right economic conditions to get the private sector into building accommodation. The private sector built just about all of the social housing.

Mr Marchese: They built it because federal governments were involved, both Liberal and Conservative, and Conservative governments were involved through many different forms of subsidies.

Hon Mr Leach: Go and see the names files and see how many of those buildings are owned and operated by the private sector. They're owned and operated by the private sector. They will build and they will maintain them and they will provide it --

Mr Marchese: The only thing they're building these days is condominiums and even there, there's a glut.

Hon Mr Leach: That's because we made the playing field so uneven that nobody in their right mind would invest in a rental building. You'd have to be crazy to do that.

Mr Marchese: It's going to take a hell of a lot more than the tenant protection package that you've given to help landlords.

Hon Mr Leach: We've always said that. We said that the tenant protection package is just one of the tools --

Mr Marchese: We know that. I read the report; I know. But we've got a crisis, Minister, I'm saying to you, and it's a big one. I read to you statistics that should alert you to the problems we have through homelessness, through the shelter programs that visibly show that the numbers are increasing, through people on waiting lists everywhere in Ontario where the numbers are increasing. It speaks to the crisis we've got, and you're saying the federal government should somehow do something to help. You're saying that municipalities should deal with the differential between condos and rentals and I'm saying that's not enough, and we still have a big problem on our hands. What do we do?

Hon Mr Leach: I hate to get into this type of debate, because I could say that if you take a look back at the policies that were in place, there was not one rental building built in the last decade, not one.

Mr Marchese: We were building. We were the only ones building. The NDP Ontario government --

Hon Mr Leach: You were building co-ops. There was not one low-rental, just co-ops.

Mr Marchese: Co-ops, and non-profit housing built by the private sector, of course -- we were building as a government, recognizing there was a need. We're saying through the British Columbia study -- we have other studies -- that it's cheaper in the short and the long run for us to be building.

Hon Mr Leach: That's why we stepped in. They were building co-ops at a cost of about $115 a square foot when a guy could put up a condo next door for $80.

Mr Marchese: Why is the private sector not building, then, if they could do it themselves?

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Hon Mr Leach: Because the playing field wasn't level. The taxes were way out of whack. The tax situation just on construction: Why do they pay 7% on the construction of a rental building and 4% if it's a condo? Does that make any sense? It doesn't make any sense to me.

Mr Marchese: You know that if municipalities do that, it's a political problem for them because it means a loss of income to them. Would you not agree?

Hon Mr Leach: No, I missed that point.

Mr Marchese: You know that there is a tax differential between condominiums and other rental buildings, right? Four times, more or less.

Hon Mr Leach: Yes.

Mr Marchese: If they bring it lower, would you not agree the city loses some money or a lot of money?

Hon Mr Leach: Are you trying to tell me that tenants should pay four times as much as a single resident?

Mr Marchese: We realize that is a problem; tenants are paying a lot more, quite right. We admit that. Is the answer then to say, "Let the city reduce that differential," and does it not mean a great loss of income for the city? I'm telling you they've got a dilemma. How do they deal with the dilemma?

Hon Mr Leach: It's going to cause a redistribution, there isn't any doubt about that, but a municipality has a responsibility to ensure that its taxpayers pay on a fair and equitable basis. You don't shaft tenants. What you're saying is, "Sock it to them."

Mr Marchese: What you have done is to relinquish your responsibility and then say to the municipality, "We empower you to fix it." Then you say, "We blame those terrible municipalities" -- which have a financial crisis caused in large part by you -- "for not fixing this problem." Is that your answer to the problem?

Hon Mr Leach: I'm saying we have to bring fairness and equity back into the property tax system. If that causes shifts in taxes and that causes residential property taxes to go up in my neighbourhood, then residential property taxes should go up. Mine have gone up, they've gone up substantially, and so they should have.

Mr Marchese: You're raising a different problem.

Hon Mr Leach: No, I'm not.

Mr Marchese: It doesn't touch my question.

Hon Mr Leach: I'm talking about if there is a continued shift necessary to ensure that everybody who lives in a house, whether it's rented or owned, pays on the same basis, then we have to deal with that. Don't you think that's fair? I think that's fair.

Mr Marchese: Just saying it sounds fair. Just speaking fairness sounds fair.

Hon Mr Leach: Then let's do it.

Mr Marchese: If you don't concern yourself with the effects it has on a lot of individuals who are obviously going to be whacked by the changes you're making, yes.

Hon Mr Leach: So you would say rather than that, you'll whack the tenants.

Mr Marchese: Minister, this is what I argue: I say that if we pay --

Hon Mr Leach: What have you got against tenants that you want them to keep paying these high taxes?

Mr Marchese: I just see the way you're trying to twist that one, Minister. I like that. It's beautiful, trying to shift that one on me too. You shift this problem to the municipality and then you're trying to shift that problem to me. You caused it and then you say, "What have you got against tenants?" I love that.

Hon Mr Leach: I never thought I'd see a member of the New Democratic Party say that he wants to see high taxes remain on apartment buildings.

Mr Marchese: On the property taxes, I'll tell you how I would solve that one, all right? I hope our government gets elected for us to demonstrate how that would work.

Hon Mr Leach: We'll never know.

Mr Marchese: It could be. God exists.

If we have a provincial income tax system, we then would pay for the housing through a provincial income tax system, thereby making it fair for those tenants. If we pay for education and all the other social services out of a provincial income tax system, then the load for tenants and everybody else, and homeowners, would be reduced. That would shift, through an income tax system, to a much more progressive system where people who have more pay a little more. What do you think of that system?

Hon Mr Leach: I don't argue with that philosophy.

Mr Marchese: How come you guys didn't consider it instead of downloading?

Hon Mr Leach: We are, but we said -- and this has been stated publicly by the Treasurer, by the Premier and by myself -- that once we get rid of that $11-billion deficit and once we get our financial house back in order --

Mr Marchese: You're going to change the system again.

Hon Mr Leach: -- then we're going to attack that, as a policy of this government, to get rid of --

Mr Marchese: So you'll take back welfare, you'll take back housing, you'll take back child care.

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Hon Mr Leach: You get income redistribution issues off the property tax. It's a good policy. I agree with that. It's going to take a long time to do that. You can't snap your fingers and change that system overnight, but we have to start working in that direction and we've made the commitment to do that.

Mr Marchese: Mr Chair, how much time is there, to get a sense --

The Chair: You only have a minute.

Mr Marchese: I will continue that tomorrow, then.

The Chair: Minister, you now have 30 minutes to respond to I guess the questions or reply to statements which have been made. That's the allotment that exists at the current time.

Hon Mr Leach: I could read my opening statement again.

Interjections.

Hon Mr Leach: I thought I'd have you enthralled.

Mr Marchese: Give us something to reflect on.

Hon Mr Leach: All parties, the Liberal Party, the New Democratic Party and the Conservative Party, I think have the same goals. We all want to see the lot of the citizens who live in this province be the best we can possibly make it. We just have different ways of getting to the same end.

We think that by encouraging the private sector by creating a climate that generates employment, that creates jobs, by providing incentives that will encourage developers and home builders and apartment builders to get out there and build, that's the way to go about it, that if you just continue to tax individuals and to throw money at it, that is not the way to go. The private sector should be able to do this, and we're looking at making sure we have policies that will encourage them to do it on the housing side.

If you want to talk about the Tenant Protection Act, I think it is finally very fair. It's very fair to landlords and it's very fair to tenants. The problem we had with the legislation that was in previous to this was that it was restrictive to landlords. There was no incentive for them to maintain their buildings. There was no incentive for them to be fair. Everything was stacked on behalf of the tenants. I know the New Democratic Party supported that. They said: "That's right. We support tenants. To hell with landlords." You can't say, "To hell with landlords," because landlords have an investment and they are there to make a reasonable return on that investment. When they can't do it, then they just let the places fall apart.

You have to have a system that's balanced, that gives somebody an opportunity to say: "I have a building here that I want to rent out and I want to make a fair return on it. If I can make a fair return on that investment, I will keep it spotless, I will keep it neat, I will keep it available to tenants." That's what is going to make the system work, not by saying to a landlord, "Try and make a buck on this and we'll take it off you," because they just won't build and they just won't maintain. That's what has happened in the last 15, 20 years.

You saw that, Mr Marchese, in buildings in your riding and buildings in my riding where the value of those buildings kept falling because nobody in their right mind would buy them. Why would you buy them when you had government policies in effect that just took every dollar you could possibly make away from you? They just deteriorated to a point where some of them, there isn't any doubt, are in a shameful condition.

What we're doing now is providing incentives to landlords to get back in and repair those buildings and bring them up to standard so that people can live in them with some pride, not rat traps that have been allowed to deteriorate because there was no incentive for a landlord to keep them maintained. Give them the incentive to maintain a building and that incentive is a fair return on their investment and they will do it, and people will have a clean, safe place to live. You see them and I see them, and I can see changes in effect already as a result of our legislation.

The Tenant Protection Act, as questions have been raised, I think is something that is very fair.

The ice storm process was another area that was discussed at some length by members of the committee. Liz McLaren, who is the assistant deputy minister, who has been personally responsible for liaising between the local committees and the province on the ice storm, has some information on the claims process, how it's been working, what the outstanding issues are.

The Chair: It's quite appropriate to bring forward anyone you would like.

Hon Mr Leach: How much time have we got?

The Chair: You have until 6 o'clock, essentially.

Hon Mr Leach: I'd like to ask Liz McLaren to come forward and provide some details in response to the questions that were raised by the members of the committee.

The Chair: I'll just remind members that this clock is off. It's actually, as your watches will probably verify, 5:31 at the present time.

Interjection.

Hon Mr Leach: I've got 5:35 too.

The Chair: Hansard has 5:31. We're using that as the official time.

Could I ask you to introduce yourself.

Ms Elizabeth McLaren: Elizabeth McLaren. I'm the assistant deputy minister, office for the greater Toronto area.

Some of the committee members had questions about the claims process, and I'd be happy to fill you in.

We have an independent adjusting firm, Quelmec Adjusters, which is dealing with the claims. As the minister indicated, the claims deadline was June 15. We have 28,800 claims currently in, and roughly 14,000 of those claims arrived in the last week before the deadline. So we had 14,000 claims leading up from April and we were starting the process of trying to get them entered into the computer and then we got 15,000 in the last week. That was quite a few. We have hired extra adjusters to work on it.

What happens is that when the claims come in, there are several processes. When the claims forms were sent out, people were asked to identify to us if they felt they were in extreme financial hardship. Those claims are separated immediately, as soon as the adjuster sees them. All of the claims have been pre-screened. The ones where people have indicated extreme financial hardship are put in and handled differently. We get adjusters out as quickly as we can. Also, some of the items that people will have claimed for are not actually eligible under the disaster program, but there is another process in place where these people, if their income is less than $26,000, can be assessed and given additional funds that don't fall under the disaster relief program itself for structural damage to their homes. It helps them, if they've suffered extraordinary losses, to get back on their feet. We are trying to speed those up.

Currently, the number of claims that have been dealt with, as the minister indicated, is in excess of 12,000. The committee is dealing with about 1,100 to 2,700 a week. We have run into some delays. The claims are divided into various categories. If the claims are under $500, they are just adjusted without even a phone call. If they are between $500 to $1,200 there's a telephone adjust. We're finding that the rate of returns on the telephone calls is very light. We've had two major Toronto firms working with that. They try to contact the people but they're not getting information back fast enough.

The bigger claims -- and you're right. Mr Lalonde had suggested there were some for $96,000. In fact, we've had claims that are worth several million dollars. We are trying to get adjusters assigned to the larger claims, which will take some time to adjust. We are putting a special push on the farm claims because we understand the difficulty that the farmers in the area have in keeping their operations going.

I know some concerns have been raised that sometimes someone hasn't seen an adjuster and someone else has seen four or five. We're targeting that by October 15 all claims will be out with adjusters. The problem particularly with the farm claims is that they'll need to have a livestock expert; they'll need to have someone who understands barns. They may need to have crop insurance adjusters out. So we do have very specialized people working to go and help assess the claims as best we can.

That's where we are. I'd be happy to answer any other specific questions you might have about the process.

The Chair: I guess that's a general invitation. Are there specific claims questions? Mr Lalonde, Mr Gerretsen, anyone? Okay.

We're just apprising the minister should be present for this section.

Mr Gerretsen, go ahead. You've been invited.

Mr Gerretsen: Where do people get the idea, the claimants who made their application not at the very last minute but let's say back in February and March, that their particular claims aren't being dealt with as quickly as they may wish?

Ms McLaren: I don't know how people would get that impression. We are trying very hard. There is a help line that we have established. Unfortunately sometimes the messages may not be clear. Actually, the Eastern Ontario Disaster Relief Committee is going to take over that help line to try to ensure that people are given accurate information.

It is a problem. There were a few glitches with the computer system, as often happens, but the computer system is now up and running and we can access people's files when someone does call.

Mr Gerretsen: Who actually issues the cheques? Are the cheques issued by the committees or by the ministry?

Ms McLaren: The cheques are issued by the Eastern Ontario Disaster Relief Committee.

Mr Gerretsen: Do they have all the funding in place now? Do they have access to the four-to-one arrangement?

Ms McLaren: They have access to any money they need. We flow the money on a monthly basis as they need to pay their cheques.

With the cost-shared funds the problem is, as you can appreciate, with the four-to-one, you have to complete the fundraising and you have to see how much money you've raised. The committee has continued to raise funds. They are just now breaking $8 million, which raises the provincial commitment to $32 million for that particular portion.

Just to explain a bit, there is the program that is cost-shared with the federal government, which is for disaster relief and emergency assistance. There is also, then, the Ontario portion of that, which covers people who don't have insurance -- churches, non-profit organizations, things like that. So you have to wait until you've been able to access all of your claims and then see how much money is available before you can start paying off on the provincial funds.

Our analysis, however, indicates that the committee has raised sufficient funds, and we hope to be able to flow what we call ODRAP, which is the Ontario disaster relief assistance program. We hope to be able to start flowing those funds. Money has been flowing, however, to claimants who have applied under the other system. It gets kind of confused as to what pot of money, but the long and the short of it is, money is flowing to people and it isn't a problem that the province has not provided money. The Eastern Ontario Disaster Relief Committee has all the money they need to process their claims and --

Mr Gerretsen: Okay, that's now. Did that exist back in May and June?

Ms McLaren: Absolutely. As soon as the committee was set up, we pre-flowed $11 million to them in July so they would have money available to start paying claims as soon as they --

Mr Gerretsen: In July. So there was a period of time, then --

Ms McLaren: They didn't have any claims that were in and analysed. As soon as we had claims that were in, we had adjusters on board and trained who understood the program and were able to adjust those files. From the moment the contract was signed and that was happening, they had money in their bank account. There is not a problem that they haven't had money.

Mr Gerretsen: Why would certain members of some of the local committees say that claims could be handled quicker? I'm not talking about now; I'm talking about in May and June, that time period. Why would they spread the word that people's claims could be dealt with quicker if only the provincial money had started flowing quicker or what have you? Was there a period of time when the money wasn't actually there or available?

Ms McLaren: No, there wasn't. But as I said, the Ontario portion of the disaster relief program is based on fundraising, and once the fundraising is completed and you know what the claims are, then you start to flow the money. But there is money there. The local committees have not been as involved in the claims processing and the payment, so there may have been some confusion, but the money is there, the money is available, and as they need it, they get it.

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Mr Cleary: You say that you have Toronto firms, adjusters, on the payroll?

Ms McLaren: Given the magnitude of the ice storm, coupled with the fact that private insurance companies were having to settle their claims first, what we did was, the insurance company that is managing the process for us has hired local adjusters from the ice storm area. In fact, every adjuster in that area is now fully and completely employed, and they can't even handle that. So we are now having to bring people in from outside the area. But our first emphasis, and our first emphasis from the adjusting firm, was to ensure that the contracts went to local people. Only when they were not able to fill that need have we moved beyond the ice storm area to hire adjusters.

However, the firms that do the telephone adjusting claims, that sort of work, which are claims from $500 to $1,200, are located in Toronto. So, yes, they are doing the work, but our first emphasis was to get the local adjusters, and as I said, all of the adjusters in eastern Ontario are very busy adjusting 30,000 claims. This is a massive number of claims.

Mr Cleary: I know I've been questioned on that in possibly the last three weeks, why a Toronto adjuster was calling back to eastern Ontario when we had our own adjusters in the area, and I didn't have the answer.

Ms McLaren: The answer is that we're using the local adjusters to adjust the larger claims, and the telephone adjusters are actually looking at the much smaller claims that are easier to adjust and don't need a visit. So if there is a site visit required, it is local adjusters from the disaster area who will be doing the visiting.

Mr Cleary: I know the minister said that no one on the disaster relief committee was getting any compensation.

Ms McLaren: That's right.

Mr Cleary: I figured it was that way, but you get questions in your constituency office about that. Now I have it in Hansard, and that's a good point.

Ms McLaren: There are staff. They do have staff who work for them, but the members of the actual disaster relief committees, all eight of them, and then the umbrella committee are all volunteers, despite the fact that under the federal cost-shared program they could have accepted salaries. It was their choice that they had volunteered and had asked to do this and they are not accepting any payment. The folks who are on the Eastern Ontario Disaster Relief Committee are still putting in one day a week at the committee in their local areas and participating in fundraising. We expect that we may need them for many more months, possibly into the new year, before all of the files are completely finished.

Mr Cleary: There are a lot of good people on those committees and they've been working almost around the clock initially on this.

Ms McLaren: There are.

Mr Lalonde: Are there two different programs, one for the farming community and another one for the residential areass?

Ms McLaren: Basically there is one program, but under the federal guidelines, part-time farmers and part-time business -- to be qualified as a farmer under the federal rules, you have to receive 51% of your income from farming. Of course, in this day and age where so many farms are a family business or you have a husband and wife working to support the farm and to support the family, you can't always get 51%. So there is a special side agreement with the federal government to make sure that anyone who is a farmer, who has in Ontario the farm registration number, will be covered and will get the same coverage as a full-time farmer. But basically it's the same program and it's the same eligibility: It has to be emergency repairs and then it has to be repairs to essential dwellings or essential things, the basics of --

Mr Lalonde: I've been to two different dairy farmers' committee meetings and they have been told to put in every hour that the farmer is spending to clean up the yard, anything that was caused by the ice storm, and they would get a minimum salary for every single hour they are doing this. This has been repeated on two occasions, once when I was there by the Ministry of Agriculture, and I was wondering if there was a program under the Ministry of Agriculture that differs from yours.

Ms McLaren: No, it's the same program. Farmers or individuals or businesses are allowed to clean up their properties for safety and access. On a farm, of course, often you have children who also help and work on the farm, and it isn't fair that you would have to go and hire your neighbour's child and not be able to pay your own. So there are limits on what you can pay, there are some limits on the amount of cleanup, but yes, they are allowed to clean up, because if they can't clean up their farms and along their hedgerows, then it's a danger and it detracts from their livelihood. So the farmers are allowed to do that.

Mr Lalonde: I can see the problem you will be facing there, because they were told to report every single hour they are doing this, and you can expect large invoices in this case.

Hon Mr Leach: That's absolutely correct. We told everyone, not just the farm community but every individual, to keep track of every expense they had, because at that time, at the beginning, there weren't criteria as to what would be eligible and what wouldn't be eligible. We said: "Make sure you get your fair compensation from whatever claims you may have. Keep track of everything. Don't just come back in a couple of months and say, 'Oh, I think I spent something on some cleanup time or something.' Keep records." That was the goal behind that.

Ms McLaren: When the committee was first set up, as the minister said, they got to look at their guidelines and decide what should be eligible and what shouldn't be eligible. This was something new. The magnitude of this storm and the impacts of the storm were of course unknown to any of us. We had dealt with disasters, but nothing of this magnitude.

As the committee has worked through the summer and as we have dealt now with 12,000 claims, we're starting to see claims for things that we had put limits on before. But now we realize that, for instance, for the cleanup and also the fencing around farms, there are heavy claims for that. The committee is going back and looking at it, because the disaster was such that what you lost were trees, and it is a hazard and it's costing more than we thought to clean it up.

All of the claims and all of the line items on the claims are individually answered on the computer, so that if a decision is made, we can go back and reaccess those claims. Some people will have received partial payment and will, as the months go on, receive additional payments as we get a better sense of what the claims are for and where the needs are and how to best help with those.

Mr Lalonde: When you say the government will pay four to one, will the percentage of the four-to-one include the cost of administration and the adjuster, let's say $100 million --

Ms McLaren: No.

Mr Lalonde: This is not counted in the four-to-one?

Ms McLaren: That's correct. The costs of administration and the cost of the adjuster are borne by the province in the first sense and will eventually be cost-shared with the federal government, but those are costs that we are paying currently.

Mr Cleary: I think you said the Ontario farm registration number?

Ms McLaren: Yes.

Mr Cleary: If those farms are rented by a farmer who has the registration number, is he eligible to clean up those properties?

Ms McLaren: I should, with an agricultural background, have thought of that. I don't know. Generally, the only part that you can clean up is areas that you yourself own, but if a farmer was renting that area and it was necessary to his farm livelihood -- I will check into that, but that certainly is something that should be eligible, because that's important for his livelihood. He needs those fields.

Mr Cleary: I've been asked that several times in my constituency office.

Ms McLaren: That's an excellent question. I must admit I hadn't even thought of that. We'll look into that and make sure.

Mr Cleary: Because there's a fire hazard there too, you know.

Ms McLaren: Absolutely. I might also add that there has been a side agreement for businesses and farmers with the federal government to expand the eligibility, and one of the things we have realized over the last couple of months is that the small woodlot operators sort of fell between those two side agreements. They didn't fit neatly under agriculture or under small business. So on Saturday a new program was announced to ensure that the woodlot operators will be compensated so they can have assessments done on their woodlots to see just what needs to be done and then, if the assessment shows that the damage is significant enough, they'll get some compensation to help clean up and to bring that wood to market. The main concern is that if we don't clean out these woodlots, there may be insect infestations and in fact that Ontario wood may be quarantined, so we're trying to avoid that.

Mr Cleary: You can't believe what some of the woodlots look like.

Mr Wettlaufer: Ms McLaren, I think the ministry needs to be complimented on the job it has done with the ice storm. I know from the questions being asked that the members of the opposition fail to grasp -- and this isn't meant as a criticism. It's human nature, I think, to fail to grasp the magnitude of this problem.

Twenty years ago I was an executive with an insurance company when a tornado ripped through southwestern Ontario. I was still an executive at that same company when we had a huge hailstorm loss in Calgary and Edmonton, Alberta. We're talking numbers of claims which are small in relation to the 28,000 to 30,000 that we're talking here, and it took many, many months to settle all those claims. We had adjuster forces brought in from all over the country to deal with those claims. I don't think people realize the complexity of settling claims like this and the sheer magnitude of 28,000 to 30,000 claims. It boggles the mind. I think the ministry has done a fantastic job.

Hon Mr Leach: I think the unique situation that we found ourselves in at this particular disaster is that it was something that had not been experienced in North America before, an ice storm of this magnitude. So a number of the claims were not like flooding claims or like an earthquake or a tornado. They were unique, new, different. Even the adjusters in the insurance industry had a great deal of difficulty getting their collective minds around how to deal with many of the claims, because we'd just never seen them before.

I appreciate your comment. Much of that goes to the staff at the ministry, but it also goes to the private sector as well, the insurance industry, and the federal government. The federal government was out there in the field making sure that claims were dealt with as quickly as they possibly could be. But it was a unique experience, hopefully never to be experienced again.

The Chair: Further comments, Minister?

Hon Mr Leach: Thank you, Mr Chair. I think we've covered many of the issues that the ministry has dealt with over the past year. I know we have a number of hours yet remaining in which we look forward to providing the committee with responses to their questions.

There ares a number of areas that we didn't deal with this afternoon with respect to questions from the committee: the amalgamation of the city of Toronto, for example, or amalgamations that took place throughout Ontario this year. I mentioned briefly in my opening comments that we've gone from 815 municipalities to 596. The vast majority of those amalgamations took place on a voluntary basis, with the municipalities recognizing themselves that there were benefits in getting rid of the waste and duplication that existed. Many in eastern Ontario -- Prince Edward county is a great example, I think, where they went from 21 municipalities to one. Chatham-Kent is another area, where they went from 11 municipalities to one and are showing substantial savings in their operations. I'm told that they flatlined their tax increases this year to zero and that next year they could be looking at a 5% tax decrease as a result of operating more efficiently. So I look forward to being able to provide additional information to the members of the committee on many of those aspects of our responsibility in the coming days.

I understand that we have tomorrow and --

The Chair: We have a total of six hours for the ministry. We started today, and we'll have accomplished not quite two hours' worth of those six hours.

Hon Mr Leach: We look forward to it with bated breath.

Mr Gerretsen: What time do we start tomorrow, 3:30?

The Chair: Yes. Minister, I'll ask on behalf of the committee, are you aware of any problems in your schedule for tomorrow?

Hon Mr Leach: No.

The Chair: Our start time is normally 3:30. We were 36 minutes late today.

Hon Mr Leach: My apology to the committee and to you, Mr Chair, for being late today. It was a commitment that I could not get out of. I will be here earlier tomorrow.

The Chair: We appreciate that undertaking, Minister. We will adjourn and recommence at 3:30 tomorrow. Thank you all.

The committee adjourned at 1755.