MINISTRY OF MUNICIPAL AFFAIRS AND HOUSING

CONTENTS

Wednesday 30 September 1998

Ministry of Municipal Affairs and Housing

Hon Al Leach, minister

Mr Dino Chiesa, assistant deputy minister, housing operations division

Ms Anne Beaumont, assistant deputy minister, housing policy and programs division

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)

Clerk / Greffier

Mr Viktor Kaczkowski

Staff / Personnel

Ms Anne Marzalik, research officer, Legislative Research Service

The committee met at 1534 in committee room 2.

MINISTRY OF MUNICIPAL AFFAIRS AND HOUSING

The Chair (Mr Gerard Kennedy): In respect of the time delay we had yesterday, we're going to start. I apologize in advance to Mr Marchese. We normally would start with a member of each party present, and I understand he's to join us imminently. We understand he'll be here in time to utilize the third party's time for questions.

Today we commence with the question-scrutiny part of the estimates. We'll begin with the official opposition. You have 20 minutes.

Mr John Gerretsen (Kingston and The Islands): Minister, yesterday you indicated that the province was not going to build any more social housing itself or get involved in any other social housing programs. Is that correct?

Hon Al Leach (Minister of Municipal Affairs and Housing): We have no plans to construct any additional bricks and mortar.

Mr Gerretsen: You said you are a fervent believer in the rent supplement program, that basically the units ought to be privately constructed and then subsidies, if any, were to be paid to landlords on a rent supplement program. You really believe in that program, do you?

Hon Mr Leach: I think it's an appropriate way to provide assistance for those who need assistance. It gives them the flexibility to go from location to location without having to be on a waiting list. They can find accommodation that suits their purpose and pay for it with a rent supplement.

Mr Gerretsen: So that's the way to go. The reason I'm asking is that I notice on page 195 of the estimates that the number of units you intend to subsidize this year by way of rent supplement is actually declining by about 300 units. If it's a program you believe in, why wouldn't you increase that? If you expect the private sector to start building apartments again because of all the new laws you've put into effect -- that's what you stated yesterday. You said you've put the new climate into effect and that residential multi-family units would now be constructed privately, yet some people do need some housing assistance etc. Why wouldn't you put more money into the rent supplement program? The number of units that you are subsidizing is less than last year by about 300. How do you justify that?

Hon Mr Leach: That's a very good question. As I said, I believe that's the way to go. We're working on a policy that's going to, in the not-too-distant future, introduce a new rent supplement program. The one that was in place we found some difficulties with. We didn't think the manner in which it was working was appropriate. We believe there's a better way to do it. If you want the details on page 195, on the numbers and so forth --

Mr Gerretsen: But that's exactly what I'm looking at.

Hon Mr Leach: -- we have the ADM responsible for that program here with us, and I would ask him to respond to the question.

Mr Gerretsen: No, I'm asking you. You're the person who said yesterday that you believe the way we should deal with social housing issues is through rent supplement programs, that you're a believer in that. I don't understand how, now that all these units are going to be built through the private sector -- you said yesterday that was going to happen because you put the right economic climate out there etc. Why aren't you subsidizing or allowing for more subsidized rent supplement units in your estimates?

Hon Mr Leach: I think I just responded to that, but I'll repeat myself. Yes, I do agree that's the appropriate program to have. We have a problem with the way the existing program operates. We're developing a new policy on rent supplements that we're working on. If you want the information on the exact numbers and where we've gone from last year to this year in terms of the numbers, Mr Chiesa can respond to that for you.

Mr Gerretsen: These numbers haven't changed much over the last five to 10 years, have they? They've always been around 20,000 units in rent supplement. Isn't that right, Mr Chiesa?

Mr Dino Chiesa: Yes, that's correct. They've been around 20,000 or 21,000.

Mr Gerretsen: In fact, no new rent supplement units have come on the market at all since this government took over.

Mr Chiesa: No new rent supplement units have come on the market, but there was a continuation of the program.

The Chair: Excuse me, sir. Could I ask you and each of the speakers who may come forward from the ministry, for the purposes of Hansard, to please introduce yourself as a preface to your remarks.

Mr Chiesa: I'm Dino Chiesa, the assistant deputy minister, housing operations.

Mr Gerretsen: I must say that the minister can be extremely proud of the fact that he has such excellent staff at the Ministry of Municipal Affairs and Housing surrounding him. I have to congratulate you on that, Minister. I happen to know a few of these people, having worked with them in the past, and they're top-notch people. You should be extremely proud of them. Certainly any comments I make are not directed to them at all. They're doing a great job within the guidelines they're being given.

Could you tell me, Minister, since you want to get out of the public housing side of things -- you're basically downloading the OHC units to the local municipalities, of which there are about 84,000 now, I guess. Is that a program that costs more money to operate than the rent supplement program? Do you know offhand? Is it more expensive or less expensive?

Hon Mr Leach: To operate 84,000 non-profit --

Mr Gerretsen: No, the 84,000 units you've got within the Ontario Housing Corp umbrella: Is it more expensive or less expensive to totally finance that package on an annual basis, as opposed to the rent supplement to units? Would you happen to know that offhand?

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Mr Chiesa: I can answer that question. The most expensive program is the not-for-profit co-op part of it, on a per-unit basis; the second-most-expensive is the rent supplement program; the cheapest is the Ontario Housing public housing. That's not taking into account the cost of money. If you take into account the cost of money, forgone revenue, as a normal commercial practice would allow you, then the cheapest program is the rent supplement program, the second-cheapest is the public housing, and the most expensive is the non-profit co-op program.

Mr Gerretsen: The reason for that is that the public housing has been around for -- well, I guess the last units were built in the early 1980s.

Mr Chiesa: The late 1970s.

Mr Gerretsen: Yes, so a lot of that stock, from my memory of it, is very old, yet the amount of money you allow for capital expenditures to upgrade these buildings is a lot less now than it used to be, isn't it, Minister?

Hon Mr Leach: In the past couple of years we've put out in excess of $500 million in capital repairs in housing, which is substantially more than had been put in in the previous five years.

Mr Gerretsen: Over $500 million?

Hon Mr Leach: In the last five years.

Mr Gerretsen: So that would be an average of about $100 million a year. Would it be fair to say that is still much less than the projections the Ontario Housing Corp felt you needed to spend on upgrading the buildings?

Mr Chiesa: I can answer. I'm also the CEO of the Ontario Housing Corp, and very proud of the condition of the stock. In I think it was the previous budget, the government announced an additional $42-million top-up to capital expenditures for public housing, which was expended last year. This year we've got a base budget of about $100 million a year; you're correct.

To determine the adequacy of that money, we had an independent assessment done of about 10% of our stock. We did a representative sample across each one of the 54 housing authorities across the province, took each building type -- high-rise, low-rise, seniors', family -- and did a complete technical audit of those buildings. Rather than hire one company, because one company could be wrong, we hired eight individual companies to do those different technical studies and the representative sample of the stock. We then hired another independent quantity surveying firm to analyze the results of those studies and compare it to our own capital needs assessments, to see if we in fact had enough money budgeted for it.

The results of that study were that our buildings are in very good condition and that we probably only need about $80 million a year to satisfy the capital requirements of those buildings over a period of time. We have about $100 million budgeted for it. The reason our budget was a little bit higher was that we felt they were not as familiar with our buildings as we were, having had a transactional history over the last 30 or 40 years, but certainly the independent assessments showed that the amount of capital being put into the buildings at the $100-million base level is more than adequate.

What we had budgeted for the previous year originally was $60 million, before the top-up, and you would have been correct: In the OHC's assessment, that would not have been an adequate number to maintain the stock. But since it was topped up and in the base budget now is $100 million, we feel there is adequate --

Mr Gerretsen: Show me where those numbers are. I'm looking at page 161 and it says that in 1996-97 actual in capital you expended $38 million, and $72 million the following year, and you anticipate spending $48 million the coming year.

Mr Chiesa: That's the provincial portion. They're cost-shared dollars. I don't want to mislead you, because it's not misleading, but this is the provincial portion. The federal government subsidizes about 51% or 52%.

Mr Gerretsen: You've been getting that money annually from the feds.

Mr Chiesa: We've been getting that money annually from the feds, correct. You pretty much take this number and double it, with the exception of 1997-98, because there were some unilateral provincial monies in there.

Mr Gerretsen: That's the $42 million that was in there. The $42 million comes off the $72 million?

Mr Chiesa: What page are you on?

Mr Gerretsen: On page 160, at the bottom. It says, "Decrease: reduction in one-time funding, $42 million."

Mr Chiesa: Right. The confusion becomes one of provincial dollars versus federal and provincial dollars.

Mr John C. Cleary (Cornwall): I want to talk a little bit about housing again. It's an issue in eastern Ontario, mainly in Cornwall, where Menard Structures, Claude and Gaetan Menard, have brought to my attention again this affordable project. As you well recall, it was coordinated with partners from the federal, provincial and municipal governments and the private sector. On February 20, at the SRT committee meeting, local representatives urged your ministry officials to recognize and honour the original commitment as a partner in this affordable housing project and to recommit to invest the $2 million. Since this meeting, Menard Structures Ltd has not been contacted by your ministry. The Menards want to get this solved immediately if they can. It has gone on far too long. My question to you is, would you agree to meet and fulfill your government's role with the original partners in this proposed formal project?

Hon Mr Leach: I have to tell you, Mr Cleary, I'm not familiar with that particular project personally, but I will look into it and get back to you before --

Mr Cleary: I spoke to you in the House about that last winter. You had agreed to meet with the Menards, and then you backed off and you would not meet --

Mr Gerretsen: Oh, shame.

Mr Cleary: It's as true as I'm sitting here.

Hon Mr Leach: I have no doubt that it is, sir. I just don't have any immediate recollection of that conversation or that issue. I have no doubt that what you're saying is correct with respect to bringing it forward. As I said, I'll look into it and I'll have a response to you before the estimates process is over.

Mr Cleary: They would be glad to meet with you at any time.

Hon Mr Leach: As I said, I'll have a response to your question before the estimates are over.

Mr Cleary: Then I would like to talk a little bit about the united counties of Stormont, Dundas and Glengarry. They said that the amount you allotted them under the community investment fund has a deficiency of $45 million. The counties also say that none of the amount allocated to the provincial offences net revenue has been received. Word has been received that the payment may occur in 1998, leaving the counties with a deficiency of $720,000. The counties appear to have a deficiency of almost $1.5 million in the farm tax rebate. In order to address the concern, the counties have asked that your ministry officials meet with them as soon as possible. The question is, when will you agree to meet with the county officials to come to a satisfactory resolution for the constituents of our riding?

Hon Mr Leach: Again it's a very local issue. I will commit to you right now to have the eastern Ontario regional staff meet with the county as quickly as possible within the very near future to go over their allotments with them and make sure everybody understands what the process is about. I can't give you a date right at this moment, but I will bring it to their attention and make sure it happens within the next few days.

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Mr Cleary: On September 15 you wrote a letter to Mayor Sylvester requesting that you also adjust the date from July 15 to October 31 as a final date whereby landlords may serve notice to tenants. Mayor Sylvester notes that this date will coincide with the final date for assessment consideration. His question to me, "Minister, will you act on this matter and adjust the notice date that landlords serve to tenants to October 31?"

Hon Mr Leach: I hate to do this, but I'm going to have to get you to repeat that, because I didn't understand that at all.

Mr Cleary: OK, I'll read it the way it's written to me. In his September 15 letter to you, Mayor Sylvester requested --

Hon Mr Leach: Where is Mayor Sylvester from?

Mr Cleary: He's the mayor of the city of Cornwall.

Mr Gerretsen: You should know that, surely.

Interjections.

The Chair: Order. We understand there are now fewer municipalities, so perhaps it will be easier for the minister next year.

Mr Wayne Wettlaufer (Kitchener): On a point of order, Mr Chair: As Chair, you must refrain from making comments like that.

The Chair: Mr Wettlaufer, I don't think that's an appropriate challenge to the Chair. Mr Cleary, please continue.

Mr Cleary: OK, I'll start over again. In a September 15 letter to you, Mayor Sylvester from Cornwall requested that you also adjust the date of July 15 to October 31, 1998, as the final date whereby landlords may serve notice on tenants. Mayor Sylvester notes that the new date will coincide with the final date for assessment consideration. He says to me, "Minister, will you act on this matter and adjust the notice date that landlords serve to tenants to October 31?"

Hon Mr Leach: If I understand the question properly, I believe the Minister of Finance dealt with that question and made an announcement at the recent AMO conference, where he said he would extend that date. It's my understanding that he intends to introduce legislation shortly to do just that. So I think you can respond to the mayor of Cornwall that his request will be dealt with appropriately.

Mr Cleary: How much time do we have?

The Chair: You have approximately three minutes.

Mr Cleary: Another issue that I've been questioned on: The united counties of Stormont, Dundas and Glengarry say that your local government and local services realignment includes the transfer of police services, which is estimated at $6.5 million in 1998. Your allocation to the community reinvestment fund for policing is only $4.364 million. Despite repeated promises that the transfer of provincial responsibilities to municipalities would be revenue-neutral, county council states that the transfer of police services alone will result in a $2.136-million shortfall and may lead to a 14.5% increase. This resolution has been endorsed by a number of townships in my area, including Stormont, Dundas and Glengarry. The question is: Will you provide sufficient funds for the shortfall?

Hon Mr Leach: I think the member understands that policing costs were never included in the Who Does What trade-off of costs. The policing costs that were assigned to various municipalities were to bring some fairness back into the system. As you may be aware, about half the municipalities in Ontario were paying their own policing costs, while other municipalities were getting free policing from the Ontario Provincial Police. This government has moved to bring fairness back into the system and has indicated that all municipalities must pay their fair share.

It should not be considered as part of the Who Does What trade-off of the delivery of services, which was revenue-neutral; it's a separate issue. If that municipality wasn't paying for policing in the past, it's going to have to pay for policing in the future, so that all municipalities in Ontario are dealt with on an equal basis.

Mr Cleary: The other thing I would like to ask, because there are a number of housing projects that have been sponsored by the provincial government over the years --

Hon Mr Leach: I'm sorry, highway projects, did you say?

Mr Cleary: -- housing projects, and it's my understanding that they're going to be transferred back to the local municipalities.

Hon Mr Leach: That's correct.

Mr Cleary: Some of them may need considerable repairs. Are there going to be any extra funds to bring them up to today's standards and upgrade them before they're handed back or will that be a municipal responsibility?

Hon Mr Leach: The reserve fund for the repairs to housing stock was reinstated last year. It had been taken away by the previous government, and we reinstated it to ensure that there would be capital funds available to do whatever repairs are necessary to housing. That money will be available when the housing is transferred to the municipalities, or at least the administration is transferred to the municipalities.

As you know, the funding aspect of social housing is now the responsibility of the municipalities. We are presently working with the federal government and the municipalities to devolve the administrative aspects, and we expect that will happen over the next year or two.

Mr Gerretsen: But there's no replacement fund for the public housing units, right?

The Chair: Mr Gerretsen, actually the time has expired for this round of questions. We'll come back to that in your next turn around. Mr Marchese, for the third party.

Mr Rosario Marchese (Fort York): It's good to see you again, Minister. First of all, I just wanted to thank James Dyl for giving me all this information with respect to the question I had asked yesterday. If I have some time, I want to touch on some questions with respect to it.

Hon Mr Leach: It's the same information in each package; it's just in different languages.

Mr Marchese: I hope I don't disappoint your staff, who are here obviously waiting for the critics to ask tough questions on the estimates, but I feel I have some pressing matters to raise again on the issue of homelessness, so it's you and me again.

I wanted to say that when I was a minister, we would keep an eye on all articles that appeared every day in all the various mediums that are there. When we would get articles, as we did today, an article written by Anne Golden, Breaking the Cycle of Homelessness -- it's a big article -- I would get worried. I would have worried if I were a minister about the effect such an article would have on the public. She wrote another article yesterday, or at least an article was written about what she has written, which I hadn't seen. I saw it today and clipped it. Have you had an opportunity to read these articles?

Hon Mr Leach: Yes.

Mr Marchese: What is your response to those articles as you read them?

Hon Mr Leach: If one person is homeless in our society, it's one too many. But homelessness has been an issue that has been with society as long as it has existed. That doesn't make it acceptable.

Anne Golden, whom I know very well, a very capable person, has done an excellent report, bringing to the attention of all levels of government the issues that face us with respect to homelessness. As she points out, there are many different aspects of homelessness. Much of it relates to mental illness, which is an issue that we have to get a handle on. As you may be aware, our government has assumed the responsibility for housing --

Mr Marchese: Supportive housing?

Hon Mr Leach: -- supportive housing back from the municipalities this year to make sure we can deal with that issue, particularly in the major urban centres such as Toronto, Ottawa, London, Windsor etc, but particularly here in Toronto, where you have so many unfortunate individuals who not only require housing but require the supportive help that goes with it.

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We will be working with Anne Golden and with the Ministry of Social Services. Jack Carroll, as you may know, on behalf of the Minister of Social Services, has also conducted a report on the effects of homelessness province-wide. We also are working with the federal government as part of the devolution of housing down to the province and subsequently to the municipalities to ensure that the federal government stays involved in this issue as well.

There's a big job to be done. I don't think anyone would expect that the needs facing us with respect to homelessness are going to be dealt with overnight. There are going to have to be long-term programs and long-term arrangements to deal with the various aspects of homelessness.

Mr Marchese: That's why I asked the question.

Hon Mr Leach: One of the most serious ones affects those in our community who suffer from mental illness, who I understand make up the majority of people who are what they call the true homeless on the street.

Mr Marchese: She touches on that as well. There's no doubt about that. But she says, "As we delved into the causes of homelessness, poverty quickly emerged as a dominant theme..." and she touches on several things. "For the first time this century, poverty in Ontario...is increasing while the economy as a whole is prospering." She's not the only one saying that; a lot of people are saying that. She also says, "The poor are getting poorer...." She says, "For single female parents in Canada, the poverty rate was 83%, and Toronto has a 45% higher prevalence" of single mothers.

"These poverty trends coincide with the withdrawal by all levels of government from affordable and subsidized housing programs, a steady decrease in the supply of rooming houses, and a 21.6% decrease in the amount of social assistance..." and she says, of course, that poverty alone is not the only problem here; there are many other factors. We know that. But she does say that we have other systemic problems which include a housing market that does not provide an adequate supply of affordable housing, a changing job market that leaves people unemployed or in jobs that pay poorly and a weakening social safety net.

We're assuming this is a critical analysis of the problem, done on the basis of research, not politics. That's why I raise it with you, to see what your response would be. Then she says: "The affordability question must be addressed head-on. Toronto needs at least 2,000 more affordable housing units each year just to keep pace with the annual increase in demand, and far more if we want to make even a dent in the waiting list. Such an objective can be met by a mix of new construction, the protection and/or rehabilitation of existing housing, and by conversions. The private sector alone cannot and will not increase the number of low-rent units because it is simply not profitable for them to do so. Some poor tenants will require subsidies, such as adequate shelter allowances." Then she goes on to other details, which we can touch on, but I'd like your feedback, not on the analysis around poverty, because I'm not sure whether you will respond to that, but on her point about the need for 2,000 more affordable housing units each year to keep pace, and that doesn't even deal with the waiting list.

Hon Mr Leach: Her report is very interesting. This goes back to what we talked about somewhat yesterday. Her article says that the poor are getting poorer and the average income in Toronto fell by 12.5% between 1990 and 1995, which is the time frame on which the majority of her statistics are based. If you look in the second-last paragraph in the first column, it indicates that her statistics are based on a time frame for early 1990.

Our government was aware of that, and that's why we've taken steps to try to encourage the private sector to get back into the building of affordable housing. Throwing money at the problem has not solved this. If throwing money at it would solve it, it would have been solved in the early 1990s, because we threw hundreds of millions of dollars at it. All it did was create a $11-billion deficit and didn't solve the problem.

We believe that the role of the government is to foster an environment where new housing is created by the private sector. We're trying to remove all the barriers that exist in front of the private sector to do that. We've reformed the Tenant Protection Act; we've restored fairness to the property tax system; we've put limits on development charges; we've streamlined the planning and approvals process, all of these with the intention of getting rid of the barriers and the red tape that restrict the private sector from getting in and building affordable housing.

Anne Golden is absolutely right in her article that the private sector will not do it at this point in time because they're in the business of making a dollar, as everybody in the private sector is. But if we remove all of those barriers and we make it possible for them to get fair and reasonable return on their investment, we're confident they will do that.

Mr Marchese: OK. We're getting back to the same discussion we had yesterday.

You cite figures which she touches on that I can't find, the paragraph where she also speaks to the present time.

Hon Mr Leach: It's second from the bottom in the first column. I've got a clipping here. It might not be in the same order, I presume.

Mr Marchese: I read you statistics yesterday where I said that in Toronto a staggering 37,000 households are now on the waiting list for rent geared to income, nearly double the 1995 number. Maybe you don't want to respond to that. The point is that the numbers have doubled since 1995, which you must surely take some credit for or assume some responsibility for.

Hon Mr Leach: I don't think anyone would want to take credit for that.

Mr Marchese: What about assuming some responsibility for that?

Hon Mr Leach: I don't see that statistic.

Mr Marchese: I know. It's not there. It's a statistic I gave you yesterday, which we can get to you, if that's the issue, if you want to see that. I also said to you that in the region of Niagara the local housing authority reports an increase from 921 families in 1996 to 1,709 in 1998, an increase of 86%. That's during your time. I don't say that I want to blame you so much as to say that we've got a problem, there is a need.

Hon Mr Leach: I agree. I agree wholeheartedly with you that the situation that's facing the province and has faced the province for years --

Mr Marchese: But, Al, I'm saying --

Hon Mr Leach: I agree with you that probably the trends are growing, that the rich are getting richer and the poor, in comparison, are probably less fortunate than we would like them to be.

Mr Marchese: Right. So, what do we do? Your answer to me is: "We're doing our best. What we had wasn't working. We introduced property tax reform. We introduced development charges that are less than they were by a small amount." You couldn't reduce them any lower because there were problems. You introduced rent control. You're saying, "We're doing all these things," and in spite of it, based on your policies, we're not moving this agenda.

Hon Mr Leach: But you have to keep in mind that in the first two years of our agenda we came in and were faced with all of these impediments to getting the private sector back into the building business. We met with them on a number of occasions, the major apartment builders and developers from across the province, and they indicated to us: "Here are the reasons why the industry will not build. Here are the reasons why the industry has not built for the last decade. Here are the reasons why there has been no new rental stock brought on the market. We're not going to do it, because it costs us money to do it." So we said, "OK, what are those reasons?" They listed them for us.

Mr Marchese: I know. I read the report. You will recall that in the rent control meetings I raised each and every one of them, because it's in the report that you had written.

Hon Mr Leach: We've addressed each one of their problems. The problems that they indicated to us were the impediments to building new housing are being addressed.

Mr Marchese: Right, and in that report by that --

Hon Mr Leach: You're not going to snap your fingers and say: "We addressed that. How come there aren't another 3,000 housing units out there tomorrow morning?"

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Mr Marchese: You've done your part. Now we've got to wait for the federal government to do their part --

Hon Mr Leach: In part.

Mr Marchese: -- because that report speaks to what the federal government --

Hon Mr Leach: Yes.

Mr Marchese: If the federal government doesn't give away the store as well to be able to get these folks to build, what do we do in the meantime? Anne Golden says we need 2,000 units a year to keep up, not addressing the waiting list. What do we do in the meantime? Do we simply say, "We've done our part; now we've got to wait for the federal Liberals"?

Hon Mr Leach: There isn't any doubt -- I agree with you on this issue -- that we have a housing situation with respect to the homeless and many others in our society that needs to be addressed. We recognize that. That's why we, in conjunction with the city of Toronto and Anne Golden's report, did our report on the balance of the province and all the major communities right around Ontario. Our findings indicate exactly the same thing: that there is a job there that needs to be done.

My understanding is that Jack Carroll's report from the Ministry of Community and Social Services is expected out within days. I think the draft may already be out. We're expecting our report in the Ministry of Municipal Affairs and Housing from the social housing committee. It's due on October 15. We have the Anne Golden report, an interim report. The final report is due out, again, in early October. They will have recommendations and proposed solutions to that. I can tell you at this time that we will take all those recommendations, all the proposals into consideration and build a program to deal with the issues.

Mr Marchese: We'll wait to see how you respond to that. In the meantime, let me ask you another question. You're waiting for the feds to download to you folks so you can download to the other folks down below. When those agreements end that we have as a province with the federal government, the share they pay, which is half for most projects, there's no more money coming from the feds.

Hon Mr Leach: That is yet to be determined.

Mr Marchese: That's a fact, unless you can negotiate something with the feds that says, "The agreements are over but we need money."

Hon Mr Leach: That's what negotiations are all about.

Mr Marchese: God bless. OK.

Hon Mr Leach: They have indicated to us that they want to devolve down to the province the responsibility for social housing and we said fine.

Mr Marchese: They're not moving, though.

Hon Mr Leach: Let's talk about the conditions under which that would happen. One of those conditions I'm sure is going to have some financial ramifications to it. We're in the process of negotiating that with the federal government, so I think it would be premature to say that federal funding is not going to continue in some manner.

Mr Marchese: So part of your negotiation is to say to the feds, "We'll take the download under certain conditions," and one of the conditions you probably will be stipulating is that once the contracts end you want to make sure that some money continues flowing. Is your condition possibly something like that?

Hon Mr Leach: When you're entering into contractual negotiations with another party, you don't like to necessarily lay all your cards out on the table, but I could agree that financial aspects of social housing will certainly be on the table.

Mr Marchese: How are those negotiations going with the federal government? Where are they? I don't hear very much.

Hon Mr Leach: It was in their budget in 1996 that they said they wanted to devolve it down.

Mr Marchese: I know that.

Hon Mr Leach: Then the co-op housing sector objected to that and raised some objections with the federal government. I believe, and I stand to be corrected here, that the Liberal Party also disagreed with the devolution --

Mr Marchese: After we pressed them. This is true.

Hon Mr Leach: -- and approached all of the federal Liberal members, all 101 Dalmations as we call them, to try and get them to --

Mr Gerretsen: Oh, that's shameful.

Mr Marchese: That's an unfair comment for the Liberals. There are only 100 spots.

The Chair: Let's not get into different breeds here.

Mr Marchese: Minister, please go on. I didn't want to distract you.

Hon Mr Leach: They approached the federal minister and the federal government and said: "We have concerns about devolving social housing down to the province. Would you please reconsider this." They said, "Yes, we will reconsider it," and the federal government has been sitting on it ever since.

Mr Marchese: And you guys are still pressing, saying, "Come on, Minister."

Hon Mr Leach: Now the wheel has turned one more time. The municipalities have now approached --

Mr Marchese: They now want it.

Hon Mr Leach: They now want it. Now they have to go back to the 101 federal members, whom I will not refer to as the 101 Dalmations --

Mr Gerretsen: I'll keep referring to your 82 as the 82 seals.

Mr Marchese: That's not so bad. At least they're cohesive.

Hon Mr Leach: -- and get them back to the federal government to turn them around. I now have a letter from the federal minister -- we've had an exchange of correspondence over the past seven or eight months -- where he is prepared to sit down at the table and begin negotiations again. He has indicated that he would like to wait until such time as our social housing committee's report is tabled and I find that to be a reasonable request. That's going to happen somewhere around the middle of October. When that happens, we'll be back at the table as quickly as possible to start those negotiations.

Mr Marchese: I've got to tell you I hope that never comes to pass, because I'm very worried about it. We've disagreed with you on this policy of downloading the problem to the municipalities. I think it's fundamentally unprincipled and fundamentally wrong. If the feds do this, it will ruin any effort to reacquire for themselves, as federal Liberals, some role in some national policy, a policy that Paul Martin talked about in 1990, because he co-authored a report saying, "We need a role, and we need a national policy on housing." If you're going to salvage something -- I hope they don't give it all up, but that's a different political problem. Sir, I know you're arguing that they're saying, "Download it to us."

Hon Mr Leach: I have some difficulty with your position of municipalities being responsible for social housing because most of the major municipalities are now responsible for social housing. The city of Toronto, for example, through the Metropolitan Toronto Housing Co has a huge portfolio, as large as MTHA.

Mr Marchese: Almost as large, but not quite.

Hon Mr Leach: Peel region, for example, has a huge portfolio of social housing. So the municipalities have the ability --

Mr Marchese: Minister, that doesn't make it right.

Hon Mr Leach: They have the ability and the wherewithal to do it. How many bottles do you have to have at the table here? Let's get one organization, one level of government, responsible for it.

Mr Marchese: They don't have the money. You say they have the money. We say that they say they don't have the money. That's the problem. The fundamental problem is, where should the money come from to pay for housing? You're saying: "We're giving it to them and they're managing it. They're better managers than we are. Let's give it to them."

Hon Mr Leach: We want to make sure they have appropriate tax room to be able to fund those services that we think they should be responsible for. By taking 50% of the education cost off the property tax, we believe we've given them significant and sufficient tax room to be able to afford to do that.

Mr Marchese: Yes, you told us that yesterday. We say no, you say yes; it's an ongoing debate. It's polarized and we can't move around it.

Let me get around to another point, pay for say, because a lot of municipalities often use that expression, "We want a say if we're going to pay," and they've been paying now through the taxes. Did you agree with that principle, by and large?

Hon Mr Leach: By and large, yes.

Mr Marchese: Would you say the tenants also pay for their housing?

Hon Mr Leach: Yes.

Mr Marchese: The estimates I've seen are that about 59% of the costs of housing are paid by those tenants. It might vary from 50% to 59%. The figure might be incorrect, based on however they were analyzed, but they pay for their housing and from 50% to 59% is the figure I've seen. Would staff nod their heads, "Yes, more or less"?

Hon Mr Leach: They're saying it's not quite that high.

Mr Marchese: Dino, let's say half, more or less.

Mr Chiesa: A third to a half, depending on the program.

Mr Marchese: I'll have to check with that third and get back to Dino, because I've seen over half.

The Chair: We have to move on. By the time of the next round perhaps we can raise that question and get an answer.

Mr Marchese: Did half an hour pass already?

The Chair: Twenty minutes. Sorry, Mr Marchese.

Hon Mr Leach: When you're having fun, Rosario.

Mr Marchese: I was having fun with the minister.

The Chair: We now turn to the Conservative side.

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Mr Terence H. Young (Halton Centre): In Oakville there are affordable housing units that were built so expensively during the Liberal and NDP years in Ontario that even if you pay market value, market rent, which would be around $900 for the average apartment, you're still being subsidized to the tune of about $400 a month. So-called non-profit housing was non-profit in name only in that the consultants that advised the people building it and the lawyers, the architects and even the people who are managing the building make a lot of money. But the taxpayers are subsidizing it even above and beyond the market value.

The only answer in my view, and I wanted to ask your view as well, is to get more units built, and built by people who manage them effectively and practise good stewardship. I wanted to ask your view on how to make that happen in my area.

Hon Mr Leach: You're absolutely right that the co-op housing program that was in place was a big boondoggle. The average -- your figures are pretty close -- was about $1,200 for rent. The market value paid was about $900 but the average rent that was paid in a co-op was somewhere between $300 and $500, I believe.

Mr Chiesa: The average rent geared to income for co-op and non-profit is approximately $300.

Hon Mr Leach: So you have a situation where the operating cost for the average co-op unit was about $1,200 a month and the rent that is coming in is about $300 a month on average. Every unit was costing the citizens, the taxpayers of Ontario, $900 a month in subsidies. We believe that the program was completely and totally out of whack. We believe that there are far better ways to do that. I personally think that the principle of co-op housing is a good one where people collectively get together, put up a building, share the costs and share the service costs. In principle it's a good idea.

There was a program that got hijacked. They said non-profit, but that was the biggest misnomer of all time because everybody and his brother made a profit off non-profit housing. The people who provided the land and flipped it over to the architects who did the design, to the builders who put them up, to the agents who were involved with the consultants, everybody made profit off it. The only people who ended up paying through the nose were the taxpayers of Ontario. We ended up with $1 billion worth of debt for about $400 million worth of assets. That program just does not work. Again, we believe that the method and way to address this particular problem is to establish a rent supplement program which would assist those individuals who need help with subsidy for housing and help the individual directly rather than through the construction of bricks and mortar.

Mr Young: I remember, and correct me if I'm wrong, when rent controls were introduced in Ontario there were a number of major builders of rental housing, perhaps Bramalea, Greenwin and others, who just said: "We're getting out of the business. We don't see any fair return on equity." Isn't that what created the shortage and drove up the rents in Toronto to rates that are still hurting people looking for affordable housing today?

Hon Mr Leach: Absolutely. If you make it impossible or impractical for the major builders in this country, in this province, in this city in particular to get a reasonable return on an investment for building something, they're not going to build it. They just went completely out of the market because of all the pitfalls that were thrown in front of them.

Mr Young: In New York City today, I'm sure you're aware, Minister -- I don't know if the committee members are aware -- there are rental control units occupied by wealthy movie stars, $2,000 a month or whatever. We've seen a situation here where two Toronto councillors with the combined income of I think over $130,000 to $140,000 a year were both living in government-assisted housing. How do we prevent wealthy people from living in housing subsidized by their fellow taxpayers and just get money to the people who have the need?

Mr Marchese: They were paying market value, Terry.

Mr Gerretsen: Those people were paying market value.

Hon Mr Leach: I'm aware of the councillors in question. I understand that they are no longer living there but they were paying market value. But as I pointed out earlier, the market value that was charged to a co-op was about $900 a month where the actual cost of operating the unit was $1,200 a month, so that people who claimed that they were paying market value were still getting a substantial subsidy from the taxpayers of Ontario. There is no doubt about that whatsoever. I believe that the individuals you are talking about, who will go nameless, are no longer in that circumstance.

Mr Marchese: Would that be Jack Layton and Olivia Chow?

Hon Mr Leach: I think if you look around the city of Toronto council, you might find that there are still a couple who are living in co-op housing units.

Mr Marchese: I used to live in one too.

Hon Mr Leach: It's a good concept as long as you pay your full share. If you want to pay $1,200 a month, which is the actual operating cost, be my guest, but don't live in a co-op saying you're paying market rent of $900 when it costs $1,200 to operate and you're getting a subsidy of $300 from the taxpayers of Ontario.

The Chair: Further questions from the government side?

Mr Wettlaufer: How much time do we have?

The Chair: You have another 15 minutes.

Mr Wettlaufer: Minister, we proclaimed the Tenant Protection Act on June 17 this year and I felt at the time that it was necessary. I still feel that it was necessary. As you're aware, I toured with the committee two summers in a row --

Mr Marchese: I can vouch for that.

Mr Wettlaufer: -- as did Mr Marchese. We heard a lot of input, we heard a lot of horror stories about the sky falling and of course we know that the sky hasn't fallen.

It's probably still too early to measure the success of the TPA. Nevertheless, I went to a meeting of a number of tenants in Kitchener shortly before the act was proclaimed. The meeting was organized by the tenants' association of one of the apartment units in Kitchener and it was attended by many tenants from around the city. One of the people at the head table was an NDP strategist and again we were hearing about how the sky was going to fall, but the sky hasn't fallen. Minister, I wonder what some of your views are so far. How is the act working so far, from June 17 until now?

Mr Marchese: It's working quite well.

Hon Mr Leach: Quote, Mr Marchese, "It's working quite well."

Mr Marchese: I can answer those questions.

Hon Mr Leach: I'm certainly pleased that the member from the third party recognizes that the legislation we put in place is working very well. I believe the rental tribunal has dealt with about 8,500 complaints between landlords and tenants since it was enacted on June 17. They are being processed in three weeks from the time you want to lay a complaint until the time it's heard and you're getting an answer in one or two days, which is extremely good. I'm very pleased with the way the tribunal is operating so that the need of tenants and the need of landlords to resolve issues are being dealt with in a far more expedient manner than ever before.

With respect to the balance of the act, you're right, it's a little early to determine from a statistical basis how that's working, but we have had no substantiated complaints so far that the legislation is causing any difficulties for tenants or for landlords.

Mr Wettlaufer: As I communicated with you a couple of weeks ago, I've only had a couple of complaints from landlords but, surprisingly, I have not had one phone call nor one letter from any tenant constituent complaining about problems since the act has been proclaimed.

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Mr Marchese: Maybe you should send these guides out in different languages.

Mr Wettlaufer: If you have a problem, Mr Marchese, it must be because of the area in which you're living. About 35% of my riding are tenant residents. I live in a university riding in Kitchener; it's the centre of town. We do not seem to have the problems you have here. I don't know why. I won't get into that.

The other thing I have noticed in Kitchener is that since we even began the public hearings there was a contractor who immediately began construction on a high-rise, tenanted apartment building near the downtown of Kitchener. It's only about a half-dozen blocks from the main street.

In addition, a contractor who has been in the construction business for about 40 years in Kitchener came to me recently and said he would like to build some more apartments for rental but that he won't do it unless he can be assured of getting a reasonable return on his dollar. To that, I agreed. He said, "Can you give me a commitment that your government will not go back into the subsidized housing business?" I said, "Well, our government will not go back into the subsidized housing business." He pointed out examples where he could not compete with the subsidized rents of a building right across the street from a building he wants to construct on a property he owns.

It was precisely what you were saying, Minister. He would have to rent each unit at $1,000 or $1,100 to obtain a profit. But this building right across the road, which was built at a cost of $1,400 by the government of Ontario at that time, was being rented out for between $800 and $900 a month. And if you saw that building -- they have better furnishings in that apartment than I had in my house, and I had nice furnishings in my house.

Mr Marchese: That's extreme.

Mr Wettlaufer: No, it's not extreme. It just exhibits that there was no control under the NDP government or under the Liberal government when these buildings were being constructed.

Judging by what I said insofar as encouraging construction of new units is concerned, do you have any other ideas on how the TPA will encourage construction of new units?

Hon Mr Leach: I agree with your comments about the high cost of co-op housing, as it was being built over the last decade. I think I mentioned earlier that there was $9 million worth of debt for $400 million worth of assets. Those numbers were wrong; it was $9 billion worth of debt for $4 billion worth of assets. The taxpayers of Ontario have a $9-billion debt that they have to finance each and every year to pay the subsidies on those co-op programs, built at costs far beyond what the private sector was building a comparable condo for. That's a situation very similar to what you experienced in Kitchener. Your 35%, just as an aside, is interesting; in my riding we have 80% tenants, so I have a pretty good first-hand knowledge of what is important to tenants and what is needed to get new building.

Mr Marchese: Are you running again, Al?

Hon Mr Leach: Certainly. With all those tenant votes, why wouldn't you?

Mr Wettlaufer, your question was, what are we doing? As you pointed out, it's not just the Tenant Protection Act that needs to be revised to get the private sector back into building. We have to revise the property tax system and we have to get the municipalities to accept that they have to institute some fairness in the property tax system. The tenant is a resident in a dwelling just the same as a single-family homeowner is a resident in a dwelling. From my point of view I don't see any reason a tenant should be expected to pay four times the amount of property tax that a single-family homeowner does, and that's the situation here in the city of Toronto. One of the things we have to do is to make sure that tax situation is levelled out and that we bring some fairness and equity back into that situation. That's the number one issue.

There was a report done several years ago by Greg Lampert which listed the range and the problems with getting back into the building business. He's updating that report -- I don't think it's out yet, but I expect to see it shortly -- which will show the reasons and what has to be done to get builders back in. We're going to address every one of those reasons, every one of those concerns that builders have and that developers have. There are all kinds of properties sitting around the city of Toronto, for example, sitting in my riding and Mr Marchese's riding, that are zoned for apartments. It is cheaper for the developer to let it sit there and pay the interest on the debt on that property than it is to put up a building -- an absolutely ridiculous situation.

We have to get all the impediments out of the way so the builder can go in and develop that property and build apartments for the thousands of people who are looking for rental accommodation in the city of Toronto, and in the city of Kitchener, for that matter. You can count on us to address each of the issues that were outlined in the Lampert report, for example, to make sure that the builders will get back out there and start to build.

Mr Wettlaufer: Minister, I'd like to address the issue of municipal taxes for a moment. In the city of Kitchener the tax rate for apartments and condominiums is two and a half times that of residences, private detached or semi-detached residences.

When I raised this with the municipal council I was informed by one of the councillors, who I understand may be seeking the Liberal nomination in the upcoming election, that the reason that was the case -- when I asked him to reduce it, he said, "We can't reduce it because that reduces the revenue for the whole city." I said, "Why can't you make it more even?" He said, "Because people who live in residences vote." I honestly hope he wins the Liberal nomination.

Mr Marchese: Who is that guy?

Mr Wettlaufer: I won't mention his name now, but he knows who he is.

How can we address that inequity?

Hon Mr Leach: That unfortunately has been the philosophy of many municipalities in the past. That was just a fact of life, that tenants were treated as second-class citizens. Their voter turnout was very low, so politicians from all stripes took advantage of the situation by saying, "That single homeowner votes for me so I'm going to make sure he's taken care of, and screw you, Mr Tenant." We just can't allow that to happen any longer. We have to bring fairness and equity back into the situation. We have to level the tax situation. It's two and a half times more in Kitchener, but it's four times more in the city of Toronto.

Having said that, I also appreciate what is being said about, "If we do that we're going to have a big loss of revenue." I don't think you can snap your fingers and correct a problem that's existed for decades overnight, but we have to develop a process that will phase in that difference over time, and the shorter period of time the better, as far as I'm concerned. I'm sure tenants would agree with this and I'm sure homeowners would agree with this, that you have to bring that fairness in. Everybody wants to pay their fair share. I'm quite prepared to pay my fair share. In my community our taxes went up 60% this year, as well they should have, because we were way underassessed. But it has to be done over time. What that time frame is I think is best left to the determination of each municipality -- they know their requirements better than we do -- but each municipality should take the tools the province has provided them, to allow a phase-in, to allow caps, and balance that scale so that everybody is paying their fair and equal share right across the board.

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The Chair: To the official opposition.

Mr Gerretsen: Let's just follow up that last line of thinking. It isn't only the multi-residential apartments paying higher rates. You get commercial paying a higher rate, industrial paying a higher rate. In your terms of fairness then, if everybody is supposed to pay the fair rate, what you're saying, realizing that the municipality still has to raise that same amount of money to provide the services, is that you are in favour of raising taxes on the single-family homeowner. That's what you're saying, aren't you?

Hon Mr Leach: No. I'm saying that the municipalities have to bring some fairness and equity back into the tax system and that a residence is a residence, whether that residence is in a building that's 10 storeys high or in a home that's only one storey high. There has to be more attention paid to the fairness and equity, and if in most municipalities that generates a shift in taxes, then that should happen. Now, that should happen over time. I don't think it's fair for the single-family homeowner, for example, to take a substantial immediate increase in taxes as a result of the wrongdoing of municipal politicians for decades. I don't think they should overnight be faced with huge tax increases because they've been subsidized, for their vote, by municipal politicians over the years.

Mr Gerretsen: But with all due respect, it wasn't just the municipal councils that were doing that.

Hon Mr Leach: They set the tax rates.

Mr Gerretsen: Just a minute, now. It was the province that did that in the past by setting up the assessment system and allowing different classes. Why did your legislation that has just been passed and under which we're now going to the current market value assessment system, which you strenuously opposed in the last election -- I've seen a lot of your leaflets to that effect, and obviously you've had a change of heart on that even though you've never admitted that in the House. Why is it that all of a sudden there are some major changes in that?

Hon Mr Leach: I opposed the market value --

Mr Gerretsen: Why did you allow different classes to be set up if you wanted everybody to share equally on a market value basis?

Hon Mr Leach: When you're finished your question, I'll tell you. Have you finished your question?

Mr Gerretsen: OK.

Hon Mr Leach: Then we start with one of your first comments. I opposed market value assessment in the city of Toronto as it was being proposed by Metropolitan Toronto in 1992.

Mr Gerretsen: Oh, I see.

Hon Mr Leach: Their proposal was to implement a market value assessment system that was put in immediately, with no phasing, no caps, no benefit for anybody, just whack: "Homeowner, here it is. You get it. If your taxes jump by 500%" --

Mr Marchese: There was a phase-in under the old one.

Hon Mr Leach: No, there wasn't.

Mr Gerretsen: Just a minute. You've had your turn.

Why did you in the new legislation set up such different classifications?

Hon Mr Leach: I haven't finished answering your first question yet.

There is a need for a classification system. As a matter of fact, I think it should be even broader than it is now. I think we've put in seven classes; there should probably be a few more classes in there. The current value assessment system says that properties should be valued on their current use, which I agree with, which is somewhat different from market value. But I believe that in the residential class should be included multi-rise for tenants. I think the residential classification should be uniform to say that a resident is a resident is a resident, regardless of whether it's a condo, an apartment or a single-family dwelling.

Mr Gerretsen: So you're saying there should be one residential class for multi-unit apartments and for single-family residences. That's what you're saying.

Hon Mr Leach: Yes, and we have given the municipality the ability to do that. Our recommendation is that you do that over time, recognizing that there is a huge shift and you want to make sure it's phased in over time, so they have the ability to do that. It's whether they choose to do it.

Mr Gerretsen: But they also have the ability to set up different classes within the residential structure.

Hon Mr Leach: And they have the ability to set up a number of different classes within the commercial and industrial categories as well. The small business on Bayview Avenue is in a totally different set of circumstances from the bank tower in downtown Toronto, so there has to be a number of classes set up. But within those classes, when you say you have a class for small business, for example, all small businesses are treated equally, not the total unfairness that's there now, and all large buildings are treated equally. What we have now is that one small business on this side of town and one small business on the other side of town are treated in a totally different manner. We've brought in a system that's going to eliminate that and smooth it out. But again we have --

Mr Gerretsen: I'd like to get on to another issue. Do you agree with the CMHC guideline that a tenant should not be paying more than 30% of their monthly salary or of their monthly income? Do you agree with that concept?

Hon Mr Leach: Actually, I don't think that guideline applies to rent. That guideline applies to mortgages. If you're going to get a CMHC mortgage, their rule of thumb, their guideline, is that if you're going to try and get a mortgage from a bank to buy a home, it's 30% --

Mr Gerretsen: I'm talking about tenants now. Do you basically believe that 30% is the maximum that a tenant should pay for rent?

Hon Mr Leach: It's a guideline.

Mr Gerretsen: You see, we talked earlier about new construction, and you sort of lumped it all together, that all these non-profit and co-op units were built at $1,200 or $1,400 a unit per month. I think you have to be very careful. Would you not agree with me that some of the non-profit housing that was built many years ago -- 10, 15, 20, 25 -- on which obviously the mortgages are a lot less now, perhaps at better interest rates, don't cost anything like $1,200 to $1,400 per month? Would you not agree with that, that there is a big difference between what was built, let's say, in the early 1990s and late 1980s and what was built in the 1970s?

Hon Mr Leach: It's pretty hard to generalize, because it depends on what they've had to do to recapitalize the building. When you pay a building off, you often have to refinance it, remortgage it, to make sure it stays in first-class --

Mr Gerretsen: Minister, you were the person who was generalizing by saying that these units were built at $1,200 and $1,400 a month per unit.

Hon Mr Leach: We were talking about the co-op housing.

Mr Gerretsen: What I'm saying to you is there are many non-profit units out there that do not cost, in total, when you take mortgage monies and everything else into account, anything like $1,200 to $1,400 per month.

Hon Mr Leach: That's probably true. I wouldn't argue with that.

Mr Gerretsen: You said yesterday that it would cost about $80 per square foot for new construction today, for a builder to build apartment accommodation. Would you concur with that, that that's what you said yesterday? I wrote it down. You said --

Hon Mr Leach: Yes, about 80 bucks a square foot.

Mr Gerretsen: Does that include land cost, by the way?

Hon Mr Leach: No.

Mr Gerretsen: It does not include land cost. So if we take a piece of property in Kitchener or in Kingston or in Peterborough or what have you, and let's say we add in about $25,000 per unit for land cost, which I think is on the low side, it would cost about $100,000 to build a particular unit. Would you agree with that?

Hon Mr Leach: I wouldn't argue with that.

Mr Gerretsen: OK, and at today's mortgage cost, which is a heck of a lot better than it was four or five years ago, you could probably get 6% or 7% money, and if you include taxes in that and what have you, it probably would cost about $10,000 to $12,000 per year to actually maintain that unit and to pay the mortgage on it. Would you agree with that?

Hon Mr Leach: I wouldn't argue with that, no.

Mr Gerretsen: OK. That's about $1,000 per month. If we take a family with one or two kids that lives on welfare, let's say, they get something in the neighbourhood of $1,500 per month. Would you agree with that?

Hon Mr Leach: Yes.

Mr Gerretsen: If they're only supposed to pay 30% towards rent, that's only $450. How is new construction ever going to be created when it's going to cost at least $1,000 per month to create those units, if the people who are going to live in those units only have $450 to $500 per month to spend on rent? Would you not agree with me that the only way you're ever going to get the landlords to build these new units is to make sure that the government has an adequate new rent supplement program in place? Where is that program? It's not anywhere in your estimates here. Would you agree with that?

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Hon Mr Leach: I've said on a number of occasions over yesterday and today that we do need a rent supplement program. That is the way to go. Not to build bricks and mortar, but to get the private sector to build the bricks and mortar and to provide a rent supplement to those individuals in society who need it. I've stated that. I agree 100% with what you're saying and I've stated that.

Mr Gerretsen: But the private sector isn't going to build it, Minister, until you make the announcement to say that X number of units this year or next year are going to be financed under a new rent supplement program.

Hon Mr Leach: Not necessarily, because, as I think was pointed out by the member for Kitchener, they're already starting to build. I know a number of developers right here in the city of Toronto that are prepared to build once all the impediments are taken out of the way. They'll build. Believe me, many of them see people who are on social assistance as tenants that they welcome, that they like to see in their building, because if they have a guaranteed rental supplement, that rent is guaranteed.

Mr Gerretsen: That's right, but right now we don't have a new rent supplement program, so the landlords aren't going to build these buildings.

Hon Mr Leach: As a matter of fact, in our legislation I think we allow them to get that directly.

Mr Gerretsen: Let me ask you something else. Let's talk about the condition of the housing authority units that are out there right now. First of all, you talked earlier about co-op housing and non-profit housing all in the same breath, and I think you have to be a little bit careful because they're not necessarily financed the same way. Did the housing authorities have any replacement reserve funds when you handed those units over to the particular municipalities?

Hon Mr Leach: Yes.

Mr Gerretsen: They have replacement reserve funds set up?

Hon Mr Leach: We reinstated the reserve fund last year.

Mr Gerretsen: For the housing authority units?

Hon Mr Leach: For the housing authority?

Mr Chiesa: What we did with the transfer to the municipalities and the base funding provincially, we provided $100 million a year in base funding for capital items related to public housing. We never had a reserve system of accounting.

Mr Gerretsen: That's right.

Mr Chiesa: We always paid it as we went. But by the fact that we gave permanent tax room of $100 million a year in the municipal system, that is, as of January 1 of this year, tantamount to $100 million --

Mr Gerretsen: That's about $1,000 per unit, isn't it, or maybe $1,200 per unit? On 84,000 units?

Mr Chiesa: That's correct, $1,200 a unit a year.

Mr Gerretsen: You think that's enough for all the old units that are out there? You're handing over these older units which in some cases, like Regent Park, are probably about 50 years old, and you're giving the local municipalities a replacement reserve fund of $1,200. Is that going to be enough to do the necessary major repair jobs that are required?

Mr Chiesa: From the independent assessments we've had, the indications are that it's probably more than enough, and we believe that from the public housing side certainly $100 million a year is more than adequate.

The problem you have is that because of the life cycle of buildings and building components, you're into the major costs now, because these buildings are primarily 20, 25, 30 years old. You're getting into the big cost items. That's why it's been costing $100 million a year. But once that $100 million a year has been spent, and it has been spent for the last few years, then the actual requirements go down. So if you project out five years, 10 years, next year they'll need $80 million, $70 million, $60 million, $50 million, $40 million. But we've given $100 million a year in base funding to municipalities.

Mr Gerretsen: For how many years have you given that?

Mr Chiesa: Base funding is forever.

Mr Gerretsen: No, the $100 million a year for reserve funds, how many years have you given that? When did you start that?

Mr Chiesa: It's been approximately the last five years. If you go back five years to now, it's been approximately $100 million that we've spent.

Mr Marchese: It's not a reserve fund, though.

Mr Chiesa: It's not a reserve fund, but we've spent $100 million a year.

Mr Gerretsen: So you've spent $100 million a year on repairs.

Mr Chiesa: Correct.

Mr Gerretsen: Just answer the question as directly as you can. You're turning the units over to the municipalities. Are you turning over any replacement reserve funds to those municipalities for the units that you're turning over right now?

Mr Chiesa: We're giving them $100 million a year in base funding for capital needs for public housing.

Mr Gerretsen: For how long are you going to do that?

Mr Chiesa: It's base funding so it's forever.

Mr Gerretsen: I thought you just said it's going to go down to $80 million, $70 million, $60 million.

Mr Chiesa: Sorry, I didn't explain myself properly. The actual cost to the municipality for those capital items goes down but they still have $100 million, so they can put aside the difference between what it costs them and what we allow them so they can build up a reserve over time for future capital needs. Once you replace your furnace today, it doesn't mean that you shouldn't make provisions for a furnace because it's going to come due again in another 15 years. So you're at the peak of capital costs now, but over time the actual draw on that $100 million is going to go down, but the municipality has $100 million available to it for purposes of capital items in the base funding.

Mr Gerretsen: And that works out to about $1,200 a unit.

Mr Chiesa: Yes, $1,200 a unit, which is far in excess of any private sector norms and, by independent assessments we have had, basically is in excess of what independent technical people have told us we need. But we felt it was important to make sure that tenants live in a safe and comfortable environment, so we provided for $100 million in base funding.

Mr Gerretsen: OK. Let's talk about the non-profit units. Most of these original contracts were signed between the province, the feds and the individual non-profit groups. Is that correct? How many co-op units do we have in the province, as opposed to non-profit units, that you're actually turning over to the municipalities, the contracts you're turning over? Can somebody give us a figure on that? I think the co-op numbers are way less than the non-profit numbers.

Hon Mr Leach: I think there's a breakdown.

Mr Chiesa: I'll get the breakdown for you, but there is more non-profit because in the non-profit you include municipal non-profits. The total of municipal non-profits and private is far larger than co-ops, yes, but there are still substantial co-ops.

Mr Gerretsen: Basically you're turning over contracts to the local municipalities in which they had no say when those contracts were originally signed other than perhaps from a zoning viewpoint etc. Is that not correct, Minister?

Hon Mr Leach: At this point in time we've turned the financial aspect of non-profits over to the municipalities. They pay for it, but we will be in the process in the very near future of renegotiating the contracts that exist between the province and the federal government. That's what these negotiations are going to be. The municipalities are now encouraging that to happen because they recognize that there is a need to reform those social housing contracts, and we'll make sure they have adequate input into that process before it's turned over to them.

Mr Gerretsen: When I see in the budget the amount that you're paying out on the social housing side of things drastically reducing over the years, is that as a result of lower mortgage interest rates?

Hon Mr Leach: It plays a large part but it's not the only feature that comes into play. Dino, can you come in on that?

Mr Chiesa: By far the lion's share are the mortgage renewals. Certainly that's been going for us this last little while. In addition to that, though, we do look at manageable costs by non-profits and co-ops and apply constraints to those that are excessive. There is a process in place to make sure that the monies are expended properly, so there are some dollars that are saved as a result of that as well.

Mr Gerretsen: Let me just ask you a basic philosophical question. To what extent is the province still going to be involved in monitoring these contracts and situations between the non-profits and the municipalities? The reason I'm asking that is I think traditionally, going way back when, one of the reasons the province got involved in this whole exercise was because municipalities simply weren't building any non-profit or social housing units etc and there was sort of a provincial interest in the whole concept, that people had a right to adequate housing. Where do you see the provincial role going in that respect?

I get the impression that the province and maybe to a certain extent the feds as well, though they can speak for themselves, are sort of washing their hands of any kind of social housing and saying: "Municipalities, it's up to you. If you want to fund it, fine, and if you don't, fine too. If you end up with a huge waiting list for social housing or with a lack of adequate housing supply, that's up to you." It seems to me the province surely has some overriding provincial responsibility there as well as local municipalities. Do you have any comments on that?

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Hon Mr Leach: Much of that will be determined as a result of negotiations between the federal government and the province as we devolve responsibilities for social housing from the feds to the province to the municipalities. What the province will be looking for is assurance that social housing across Ontario continues to adhere to the standards that ensure fairness and equity of the delivery of services and maintenance across municipal boundaries, to make sure that municipalities just don't do that, that they just don't go up and sell them all the next day or get out of the business. So there will be an ongoing provincial presence. What that presence will be will be determined over the next few months as we negotiate with the feds and reform the social housing program. But we will have standards that will deal with equity and access to ensure that there are standards right across the province.

Mr Gerretsen: But how are you going to --

The Chair: Mr Gerretsen, thank you. Your time has expired.

Mr Gerretsen: Quickly, just give us those numbers on the number of co-op units and non-profit housing.

The Chair: He definitely agreed to do that, I think.

Hon Mr Leach: Yes, we agreed to do that.

Mr Gerretsen: Have you got them?

The Chair: We'll make sure those are available.

Mr Chiesa: There's a breakdown on page 187.

Mr Marchese: Minister, you were talking about how co-ops were such an incredible waste, a boondoggle; co-ops and non-profits, I am assuming you mean both, waste and boondoggle, billions of dollars just thrown away. I know statistically that co-ops and non-profits are an infinitesimal, a picayune amount of units and housing in the scheme of all the housing that's out there. It is so imperceptible, yet I notice you and others make such a big deal of these numbers and I understand the philosophical reason why you do that.

But if that is a boondoggle, how do you respond to the opposite, which is what I believe to be true? If Anne Golden says you need 2,000 units to deal with the emergency problem as it is, without the waiting list, my view and hers, I presume, is that that causes a lot of social problems in itself. That itself will create other costs, other deficits: economic, intellectual possibly. They are costs that will be incurred by governments at some point, one assumes, if that matter of housing isn't settled. Does that enter into your thinking at all? Is that a deficit at all? Will that cause a deficit?

Hon Mr Leach: It does, but I don't think anywhere near what was caused by the program that was previously in place. You may consider $9 billion worth of debt for the co-op program to be minor. I consider it to be substantial. When you have a $9-billion debt for $4 billion worth of assets, it is not small potatoes. You're talking big money here. If you had a program that was better controlled over the years and you had a lot of that $9 billion that you could have spread over on to other social housing programs, we would be in a whole better shape today than we are.

Mr Marchese: I hear you. I'd like to see how you come to that conclusion and who is providing you with those numbers. If you've got them and staff has them written down for you, that that is a $9-billion problem for $4 billion of assets, I'd like to be able to -- not through an explanation you can provide now but perhaps in writing, because I'd like to follow the logic of that argument so that we can debate another time.

Hon Mr Leach: You've heard me say on many occasions that I agree in principle with the co-op program. The principles behind co-op housing are very sound, where you have a group of individuals with like needs and like desires who get together and build a co-operative where they contribute equally to the maintaining of it. I just don't think that because they choose to live in a co-op the balance of the taxpayers in Ontario should subsidize that.

Mr Marchese: But as a concept, it is a wonderful concept.

Hon Mr Leach: It is.

Mr Marchese: You're saying you agree but then you contradict it, I think, on the other hand. The concept of co-operative housing, in my view, is a wonderful social idea. The private sector will never build in that way. What we used to do in the past is we would house all poor people in one building. It was a sheer, big mistake that we caused as governments when we built public housing, thousands of units beside each other, all poor people in one area. It was a disastrous thing that anybody could have come up with.

The private sector doesn't build co-ops. They don't, unless you buy into a co-op where you actually own your own unit, which makes it a different kind of co-op. So the co-op concept says that you've got people who are relatively poor, people of middle income and some who are of above income, because that's the experience I've lived through, and I find that to be such a socially good thing to do.

Hon Mr Leach: You're absolutely right, but you see, the subsidy should go to the individual. The subsidy shouldn't go into the building of the bricks and mortar.

Mr Marchese: But who will build such a concept? Who will build such a co-operative style of living? Who will do that?

Hon Mr Leach: There are lots of examples of --

Mr Marchese: They don't do it, Minister.

Hon Mr Leach: -- co-ops that are built under different circumstances. And I agree with you that you shouldn't build ghettos where you put all low-income families in one place, but you should make sure that those who require subsidy have that rent supplement in their hand where they can choose to go and live where they want.

Mr Marchese: We dealt with that yesterday. If you give a person with a disability some money, which is yet to be determined by your universal shelter allowance that you promised, that we don't know anything about -- we don't know whether it's coming, when it's coming. We already give $2.3 billion worth of shelter allowances as it is through various programs. You're promising something new, whatever that is, whenever it's coming. We all know what ideas you've got in mind that work differently, but I certainly would love to see them some day. Hopefully they will become part of another promise for your next government. If you give these people --

Hon Mr Leach: In our second term.

Mr Marchese: Yes, I can't wait. If you give some people this allowance, you say, "Here are a few bucks, go find your shelter." There isn't any, first of all. Second, for people who really need the kind of housing that a person with a disability needs or a person with HIV needs, where are they going to find if it isn't there now and it isn't being built?

Hon Mr Leach: As I said -- we're starting to repeat ourselves here -- you have to eliminate all the impediments that the private sector had facing it to get them out there --

Mr Marchese: I heard that. All right.

Hon Mr Leach: We're doing that and we're doing it as quickly as possible, and I think you'll see private rental housing under construction in this province again in a big way.

Mr Marchese: You will see nothing unless you give the whole shop away. That's what you're going to see.

Moving on to a separate question which you touched on earlier, you say tenants pay too much --

Hon Mr Leach: In taxes?

Mr Marchese: Yes. Tenants pay too much.

Hon Mr Leach: They've paid more than their fair share.

Mr Marchese: And you say municipalities, because you're giving them this wonderful tool -- you guys are benevolent, I've got to tell you, to give these municipalities the power to fix the problem. I love it. You didn't want to exercise the power yourselves but you say, "We're going to shift it on to the municipalities because we're good." Then you can say, "We've given them the toolbox and they're not using it, those buggers," old Tories and Liberals and NPDers, many of them. Let's say they're paying more than they should. The landlord says: "We're paying a whole lot in taxes. In fact, we're paying more than we think we should be paying." You're saying, "Well, relative to tenants, they're not paying enough." Is that a fair assessment?

Hon Mr Leach: No, I didn't say that.

Mr Marchese: If tenants are paying too much and you want to drop that, someone's got to pick up that cost. Is that a fair comment?

Hon Mr Leach: Other people in residential class, yes.

Mr Marchese: If we reduce taxes for tenants, landlords will have to pick that up, right?

Hon Mr Leach: Not necessarily landlords. It could be spread across other residential --

Mr Marchese: Small business maybe?

Hon Mr Leach: No, residential property. What I said earlier, in response to a question from Mr Gerretsen, was that I believe a resident is a resident, whether you live in a 34-storey building or you live in a one-storey building, and that the tax situation for a resident should be equal across the board. It's not at the present time. You are absolutely right. If --

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Mr Marchese: I know. I'm trying to get to the politics of it and I want to see how you want to answer that.

Hon Mr Leach: I'm sure what you're going to insinuate is that if you lower the tenants you're going to increase the single-family home.

Mr Marchese: Inevitably.

Hon Mr Leach: That's correct, but what we're saying to municipalities is: "That's what's going to have to happen. Now here's the toolbox on how to deal with that over time. Phase this in over a number of years. Get fairness and equity back in the system. Make sure that everybody is dealt with with some fairness, but don't create a major problem by doing it. You're not going to be able to snap your fingers and do it overnight. You're going to have to do this gradually so that people are not punished because of the actions of politicians from previous years."

Mr Marchese: But they will be. Whether you phase it in or whether you do it immediately, they'll be punished in this way. First, landlords are paying --

Hon Mr Leach: What you're saying, again, is what you said yesterday, that tenants should pay four times the amount that a single family --

Mr Marchese: If that is true, then the opposite is true, that landlords should pay, is what you're saying.

Hon Mr Leach: No. I'm saying that all people who live in a residence should --

Mr Marchese: Why can you get away with your other statement and then try to weasel out of the other one?

Hon Mr Leach: I don't see how you tie a landlord to a resident.

Mr Marchese: That's pretty well what's left there. You take it out of the tenants, what you've got is --

Hon Mr Leach: I've got a landlord and I live in a single-family residence, and I'm prepared to --

Mr Gerretsen: And you don't pay enough taxes, you just said.

Mr Marchese: Yes, so you want to pay more. I just don't think that a whole lot of other people are going to agree with you.

Hon Mr Leach: If it brings fairness and equity back into the system --

Mr Marchese: So the politics -- Minister, let me speak from time to time.

The Acting Chair (Mr John Cleary): One at a time here.

Mr Marchese: I beg your pardon?

The Acting Chair: One at a time. Give the minister a chance to answer and then you ask another question.

Mr Marchese: That is so helpful, Mr Chair.

The Acting Chair: How can Hansard pick it up?

Mr Marchese: That was very good, Mr Chair. I agree with you.

Hon Mr Leach: Yes, I agree with him too.

Mr Marchese: Are you finished?

Hon Mr Leach: Do you want two minutes of silence?

Mr Marchese: Whose turn is it, Mr Chair?

The Acting Chair: Your turn.

Mr Marchese: The politics of this are, if the person who owns a home ends up picking up that problem where they believe they're paying a hell of a lot, they're going to be awfully unhappy, whether you phase it in over two years or three or four.

I'm saying what you've done is cause more chaos than before. You argue, "We'll try to fix it, and the municipalities have the tools and should be able to fix it nicely."

Hon Mr Leach: What you're saying is, keep the tenants in the dark and feed them bullshit, and keep their taxes way up there.

Mr Marchese: No.

Hon Mr Leach: That's what you're saying --

Mr Marchese: I'm saying that what you've done -- okay, finish, because I don't want to upset the Chair.

Hon Mr Leach: What you're saying is that you can't lower the tenants' taxes because it will cause a tax to increase in another area. Well, that's what you have to do; either that or the municipalities cut spending, which is another good idea. A lot of them should look at cutting spending, which is another way to accomplish it. Generally, you have to level off the tax situation, but again, you've got to do it over time. We said eight years. The municipalities have chosen different time frames, but we felt that an eight-year phase-in to accommodate tax shifts was a reasonable time frame to fix a problem that's existed for the last 40 years.

Mr Marchese: Could I get back to a question that I asked you earlier. I was saying that tenants pay their fair share; they pay half of the costs, pretty well. If the municipalities argue they need say for pay, tenants have been saying, "If that principle is something you support, then we feel that tenants should have the same in what happens to their housing." Is that a fair comment? I think it's fair.

Hon Mr Leach: Aren't there associations in just about every building? I think they have some say in how their units are operated.

Mr Marchese: Right, but the reason I raise that is tenants were not part of the discussions of the social housing reform committee. In fact, they were allowed a mere 10 minutes in your Toronto consultation session earlier this week, compared to the 15 minutes each of the provider groups got.

You'll recall, Minister, I had a discussion with you before that group was set up to urge you --

Hon Mr Leach: You're talking about the professional tenants' associations?

Mr Marchese: It's called the social housing reform committee.

Hon Mr Leach: Yes, but what group did you say didn't have input?

Mr Marchese: Tenants.

Hon Mr Leach: Yes, tenants did have input, but I'll let Anne Beaumont respond to it.

Ms Anne Beaumont: I'm Anne Beaumont. I'm the ADM of housing policy and programs. There have been several phases to the development of the reform package. One was the work of the social housing advisory committee. They certainly met with tenants. The Social Housing Committee that's been doing its work in recent months met with tenants. They moved around the province and met with tenants in a number of cities and heard delegations from tenants in individual buildings across the various sectors of social housing. They met with tenants of LHAs, of non-profits, both municipal and private, and co-ops. I know from talking to members of that committee that they were very impressed with the comments they heard from many of those tenants.

Mr Marchese: Really? I'm happy to hear that. This is not really appropriate of you, because the minister should answer these questions, but who is there in that social housing reform committee who represents tenants?

Ms Beaumont: There's no one on the committee who specifically represents tenants, but if you look at the makeup of that committee, there are people on that group who are politicians and bureaucrats within municipalities. All of them indicated very clearly that they had consultation back in their municipalities with tenants. There are people who have worked in the non-profit world. There have been people at the table for every meeting representing the non-profit world, the co-operative housing world and the LHA world. So while there have not been any tenant groups, as such, there certainly have been many people from various sectors who have much contact with tenants.

Mr Marchese: You see, that's the problem. Again, we're talking and I'm not sure why I'm asking you these questions, because you really have nothing to do with it. You're trying desperately to defend it in the best way you can, and I appreciate that. Politicians, yes, represent everybody, but there are many politicians who never go to meetings where it's an MTHA building. I've often been invited to speak in Scarborough, for example. I'm the only one who ever goes. Municipal politicians don't go, Conservative politicians don't go, federal politicians don't go. On the other hand, you say politicians are represented and they represent MTHA tenants, for example.

Ms Beaumont: I think you're putting words in my mouth, if I may, Mr Marchese.

Mr Marchese: You're quite right, I am. The point is, you say --

Mr Gerretsen: Don't let him trick you, Anne.

Mr Marchese: I was trying to exfoliate that onion. When you say politicians are there, it conveniently almost says they're representing them, and the point I make is they're not necessarily doing that.

Ms Beaumont: Yes, I did make the point the politicians are there, but also that there are others at that table as well --

Mr Marchese: I want to get to the others, yes.

Ms Beaumont: -- who are involved in boards, are advisers to new bodies.

Mr Marchese: Yes, let me get to it, because then you say bureaucrats are there. That's a good one. MTHA tenants have been complaining for years that no one listens to them. I know that through Alexandra Park, because I've been there for many years, and they've had so many complaints about how staff people don't listen to their needs, their concerns. So I'm not sure it's fair to say that bureaucrats represent the views of tenants. I'm just making the point.

Ms Beaumont: The bureaucrats I was talking about are municipal bureaucrats, not those working for MTHA, those working for corporations who, recognizing that they're taking on new responsibilities in taking on the responsibility for social housing, have, it's been indicated very clearly and directly and demonstrated clearly and directly at many of these meetings, made a very real effort to go out to meet the tenants within their municipalities, to understand their concerns, their fears, their desires, their aspirations. This has happened, I would say, especially within the public housing community.

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Mr Marchese: OK, Anne, I appreciate your comments but I just don't think that's happened very well. I'm serious about that, and it upsets me very much. It's more of a political question, not with you, but if you don't have adequate representation of people who live in those buildings, it's not good representation, it's not pay for say.

Hon Mr Leach: Alexandra Park?

Mr Marchese: No. I was talking about the social housing reform committee report, for example, and the other committee established earlier to deal with the changes in public housing, and I'm saying to you and to your staff that without adequate representation from tenants, you're not dealing with their needs, their issues. Anne says we're dealing with people who understood the needs. If you don't have them at the table, you're not dealing with them, and so I --

Hon Mr Leach: That's not necessarily true. Do you have to be a chicken to recognize an egg? I don't necessarily agree with that. You can have representation on a task force that doesn't necessarily have to be a tenant. There are lots of people on that task force. In fact, all the people on that task force have a great deal of knowledge that relates to social housing.

Mr Marchese: Minister, do you agree with the principle --

The Acting Chair: Mr Marchese, your time is up. Governing party.

Mr Trevor Pettit (Hamilton Mountain): First of all, Minister, I'd like to echo Mr Gerretsen regarding the staff. I find them to be very informative. Certainly I've learned a lot from listening to them.

I'd like to speak about the municipal restructuring fund. We all know that many municipalities have undertaken restructuring throughout the province in order to streamline local government and achieve cost-savings. To ease that transition, the government, through your ministry, set up the MRF or municipal restructuring fund. I'd like you to describe that fund for us, gauge its success at meeting the desired goals and also comment on the success of municipal restructuring more generally. Once we have done that, I would like to go into something regarding my area on that.

Hon Mr Leach: First of all, let's talk about the restructuring generally. When we started the process several years ago, there were 815 municipalities in Ontario. As of January 1, 1999, that number will be down to about 590, and there are a number of others that are currently in the process. The vast majority of the reduction in the number of municipalities has been done in co-operation with each municipality, without any provincial input whatsoever, so it has worked well. Municipalities are recognizing that by amalgamating they can eliminate a lot of overlap, a lot of duplication that exists. I think the most interesting one I saw was in northern Ontario, where we had three small townships amalgamate. Each had its own municipal infrastructure, but at the end of the amalgamation the total population was 432. That was the smallest one.

But when you look at communities like Chatham-Kent, for example, where they went from 11 municipalities to one, when you look at Prince Edward, where they went from 21 municipalities to one, with the elimination of the overlap and duplication that took place in all of those -- in Chatham-Kent, for example, just the saving in having a common insurance policy for one municipality rather than 11 municipalities has saved them in excess of $300,000 a year. Chatham-Kent, by reducing from 11 municipalities to one municipality, has frozen taxes this year and there's every indication they will have a tax decrease next year as a result of the savings.

The city of Toronto is another very good example where you go to the opposite end of the scale, where the savings from amalgamation are in excess of $300 million a year, and that number has now been confirmed by the budget chief of Metropolitan Toronto. They have already found well in excess of $50 million and are confident that they will find the entire $300 million in savings over the next three years, as we indicated they would. So the municipal restructuring process, the amalgamation of municipalities has been a large success.

Mr Pettit: In order to qualify for any of that funding, is that tied to some form of amalgamation and/or reduction in political numbers?

Hon Mr Leach: It was a restructuring of municipalities, yes. In all instances to date, that has been an amalgamation of two or more municipalities.

Mr Pettit: As you know, we have a situation in Hamilton-Wentworth where they have done some merging of administration and offices, yet it's my understanding that does not qualify for any municipal restructuring monies. Is that correct?

Hon Mr Leach: That's correct. In my view, and I've stated it publicly on a number of occasions, there is an identified need to restructure municipalities in the Hamilton-Wentworth area. I think they have identified that if they did restructure both politically and service-wise, they could save in excess of $30 million a year.

Mr Pettit: That's right, but on page 14 of the book, there's a listing of "Legislation Administered by the Ministry of Municipal Affairs and Housing," and if you go down to number 69, it says: "Regional Municipalities Act... These acts establish restructured two-tiered municipalities and provide for composition of council, road system, hydro, planning" etc. Below that is "Regional Municipality of Hamilton-Wentworth Act." I'm not sure when that was established, but --

Hon Mr Leach: In 1972, I think.

Mr Pettit: In 1972, and that's established by the province. Is the onus not to some extent then, if the province gets us into this, to help us get out?

Hon Mr Leach: Yes, absolutely. We're not looking for a consensus of all the municipalities in Hamilton-Wentworth, but if the majority of municipalities in Hamilton-Wentworth could agree on a course of action, the province would implement legislation to change that.

Mr Pettit: OK, but as you know, we have a gridlock in Hamilton-Wentworth because we can't achieve that, triple majority, in spite of the fact that our regional chairman was elected on a one-tier agenda. The only one paying the price for that right now is the taxpayer. Where would you suggest we go?

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Hon Mr Leach: There are several regional governments in the province that are facing very similar situations -- the city of Ottawa, for example; Kitchener-Waterloo is another one; Halton; Hamilton-Wentworth. What we're saying is, come up with a majority of the municipalities within the jurisdiction, representing the majority of the voters, and we'll implement whatever you decide. I believe there are six municipalities plus the region, so you need four plus the region. Whatever they decide, the province would commit to implementing.

I know that in Hamilton-Wentworth they've been around the block three or four times. They have come close. There have been two or three tentative agreements reached where there was some consensus to undertake restructuring. I would suggest you keep their feet to the fire and that the local politicians who recognize the benefits of restructuring, such as the regional chairman, for example, and the mayor of Hamilton, keep pressing home the advantages and the cost savings that are there. When people start to talk about, "Why are our taxes going up?" you can look back and say it's because of the inefficiencies of running this region in the manner in which it's being run right now." I think everybody agrees with that. There is so much overlap and overgovernance in Hamilton-Wentworth that everybody agrees -- I don't think there was an argument from anyone -- there was in excess of $30 million worth of savings. But there are many who are saying, "We're prepared to live with that $30-million unnecessary expenditure just to keep the status quo." If they can convince their taxpayers that they're going to have to pay that $30 million in excess, unnecessary expenditures, maybe that's the way it's going to go. I disagree with it and I think you do too.

Mr Pettit: I do.

I'll defer to Mr Parker.

Mr John L. Parker (York East): How much time have we got?

The Chair: You have another 10 minutes.

Mr Parker: Minister, I'd like to maybe shift gears here for a moment. I guess this is a bit of a segue from Mr Pettit's conversation. I'd like to speak to you about the megacity, bearing in mind that what we here in Ontario call a megacity in New York they call a borough. The legislation to amalgamate the Toronto municipalities was introduced just less than two years ago. For those who were paying very close attention and had particularly astute antennae, they may recall that there was a degree of apprehension on the part of some persons as to its viability and advisability.

By the way, I should just interrupt my own commentary here and thank you for facilitating the legislation to permit a third East York councillor. The by-election has been held. Jane Pitfield has now been sworn in as the third East York councillor and tomorrow takes her seat in the council for the first time. So that is a done deal. East York now has three councillors. East York has greater representation on the new city council than it had on the old Metro council. Thank you very much for your efforts in bringing that about.

There was considerable apprehension at the time the bill was under debate as to the advisability of proceeding with amalgamation and the viability of the resulting entity. Among one of the more colourful critics at the time, not necessarily the most vociferous but certainly one who brought some colour to the debate, was the then-mayor of North York. I wonder if you've been keeping an eye on progress with the megacity since it went into effect in January this year; it's been a little over half a year now. Can you tell us, have you been monitoring the developments in the city since amalgamation went into effect in January this year, and what have you seen?

Hon Mr Leach: Yes. First of all, I'd like to get it on the record that you played a major part in getting that third councillor in East York. Although I personally disagreed with that, you did a good job for your constituents in making sure that happened.

Mr Parker: By the way, for the record, Leaside now has a councillor on the megacity.

Hon Mr Leach: That's right.

Mr Parker: It's about time. Thank you very much for that.

Hon Mr Leach: How well is the megacity working? Let me again quote the mayor of the city of Toronto: "Amalgamation does work, and it works well. You've got to have the will and you've got to have the drive. The city also saves money on banking, pooled resources over time, and since they now have a larger fleet of vehicles to compete with in the city, these efficiencies in place in Toronto will be able to lower taxes in five years; not freeze taxes but to lower them." That's another quote from the great mayor of the city of Toronto.

They've already identified, as we indicated during the debate on the creation of the new city of Toronto, that there would be an excess of $300 million in savings each and every year if the amalgamation took place. That number is now confirmed and acknowledged by the budget chief for the city of Toronto. In this first year alone I think they've identified something like $57 million, and they're confident that they will achieve the entire $300 million in the first three years of operation, as we indicated that they would.

I think that in itself is a strong endorsement for the decision made by this government to get rid of the tremendous duplication that was taking place by having seven governments operating within this area. You had six municipalities collecting garbage and another one to take it away. If that isn't overlap and duplication, nothing is. I think that's being borne out and recognized by some of those who questioned the wisdom of amalgamation in the first place, like the current mayor.

Mr Parker: As I understand it, your ministry has played a role in helping to facilitate the amalgamation process and some of the financing issues that arise in the course of implementing the amalgamation. I wonder if you can just elaborate a little bit on what you've done there and how you foresee that story playing out.

Hon Mr Leach: We recognize that Toronto has its unique needs and circumstances. We know that and we're well aware that there's a cost of amalgamation that has to be borne by the taxpayers. We recognize that, but we also recognize, in determining that there would be at least $300 million a year in savings over the first three years, that there would be some initial upfront costs that taxpayers would have to absorb. The province initially provided a $50-million non-repayable grant to make sure that the infrastructure required for restructuring could be put in place -- that's amalgamating the computer systems from seven governments into one -- and we provided that.

We also recognized that it would take some time to generate that $300 million in savings so we said to the city of Toronto, "We will loan you $100 million interest-free while you're putting the systems in place to make sure those savings are there." We flowed that first $100 million. We've also said that if $100 million isn't sufficient to get it up and running, we'd be prepared to put in another $100 million as a loan to be repaid after that $300 million in savings is realized. The repayment of that loan begins in the year 2001, and that's to be totally paid off in the year 2003. Again, I understand from the officials at the city of Toronto that they won't have any difficulty in accomplishing that.

Mr Parker: So the $50-million grant has been paid out?

Hon Mr Leach: That's been paid.

Mr Parker: The first $100 million has been lent?

Hon Mr Leach: That has been flowed.

Mr Parker: What are the prospects for the need to draw upon the other $100 million? Do you have a sense of that?

Hon Mr Leach: We've indicated it would be there if they require it. They haven't determined yet whether they will need that. It depends on what processes they put in place to streamline and get systems into place whether they'll need it or not. It's debatable. They may need some portion of it, for example. We said that there would be up to $100 million available. If they need $10 million or $20 million or $30 million, whatever they need, up to $100 million, to make sure that the new city is up and running well, the province will be there to provide it. They have to pay it back, mind you, but I think that's fair.

Mr Parker: As near as I can make out, as a consumer of services in the city it's pretty much been status quo since amalgamation. My garbage continues to get picked up the way it was before, parks and recreation had the same kinds of programs this summer that they had the summer before and so on and so forth. I admit this, that in January 1998, for the first time ever I did see a little snowplow go down the sidewalks in my neighbourhood. I never saw that before amalgamation but we saw that in January 1998. But I can't see everything that's going on and I can't see how all standards of services are being maintained or operated. Can you comment? How are services being maintained?

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Hon Mr Leach: Services to the individuals are continuing and in many instances they're being improved, as you've experienced in East York. Where they're finding a lot of savings is in getting rid of a lot of the administrative overlap and duplication -- insurance policies, for example, for seven governments, having that being provided for one government; there are millions of dollars in savings that have been recognized already.

It's the administrative side. Through attrition they're being able to downsize the number of staff that have been required to properly run the city. They had seven CAOs before and they will be down to one, the number of clerks and treasurers, and it repeats itself by six or seven in every instance. As you combine those positions and amalgamate those administrative services, there are substantial savings to be found. They're being recognized.

Again, the rationale behind providing the $100 million in funding was to make sure they could amalgamate those services and downsize the staff through attrition and retirements and make sure they had the funds there to pay for those retirements and that attrition. That's where it's coming from, but not at the cost of on-the-street services. The garbage is still picked up on the same days and at the same times; the snow plows are there.

The Chair: Thank you, Minister. I'll interrupt you to draw this period to a conclusion and turn the last section over to the official opposition.

Mr Gerretsen: I have a number of questions in the same area. You made a statement earlier which I'm sure you would like to correct, because I'm sure you wouldn't want something other than the whole truth and nothing but the truth on the record. You said that the amalgamations around Ontario -- I believe I quote you correctly here -- were done without government input. Did you really mean that?

Hon Mr Leach: I said the majority.

Mr Gerretsen: Were done without government input?

Hon Mr Leach: That's right. I'm not sure, but there were either four or five instances where at the request of the municipalities the province appointed a commission. That was in five instances. In the other several hundred they were done voluntarily by the municipalities.

Mr Gerretsen: Just so that we're clear on this, the process once it started may have been done voluntarily, but you gave these municipalities or areas definite instructions to amalgamate by a certain date -- it may have been a year after you told them, or a year and a half -- or else the government was going to do it. Isn't that correct?

Hon Mr Leach: No, that's not correct.

Mr Gerretsen: You didn't say that to any of them?

Hon Mr Leach: I said that if requested -- this is what the legislation very clearly states -- by the municipalities, we would appoint a commissioner to assist them in restructuring if they couldn't --

Mr Gerretsen: To assist them or to make a final report?

I remember quite well, sir, being in a room with you in Napanee, Ontario -- the courthouse, remember? -- where you told all the municipalities that if they didn't get it done by a certain date, and the date escapes me, you were going to appoint a commissioner and whatever that commissioner decided was going to be final, and that in that case you couldn't even alter the commissioner's report yourself.

Hon Mr Leach: I don't have the authority to do that. Under the legislation we can only appoint a commissioner if the municipalities request one.

Mr Gerretsen: Right. That isn't what you told them there, sir. You said you were going to appoint a commissioner, and if they didn't amalgamate by a certain date, then in effect you were going to have the commissioner do it.

Hon Mr Leach: What I said at that meeting is starting to come back to me. That was in Napanee. I recall that very clearly now. What they said was that they were having difficulty reaching a consensus among the municipalities. I said that I was sure they would prefer to reach a decision among themselves rather than having a commissioner appointed.

Mr Gerretsen: Exactly.

Hon Mr Leach: That's exactly what I said.

Mr Gerretsen: How can you say from that, sir, that these amalgamations were done around the province without government input? That's what you said about an hour ago or half an hour ago.

Hon Mr Leach: They were. There were hundreds of municipalities amalgamated.

Mr Gerretsen: That's right, and it was all done as a result of a government initiative.

Hon Mr Leach: Only in four or five instances was there even a request for a commissioner, or was there a commissioner appointed, I should say. There were a number of other requests.

Mr Gerretsen: But the municipalities knew quite well that if they weren't going to do it voluntarily, then you, or through a commissioner, were going to do it for them. That was the whole idea behind the legislation.

Hon Mr Leach: It didn't happen in Hamilton; it didn't happen in Ottawa.

Mr Gerretsen: No, because you backed off in those two situations.

Hon Mr Leach: It didn't happen in Haldimand-Norfolk; it hasn't happened in Kitchener.

Mr Gerretsen: Sir, to suggest that it was done without government input stretches the imagination beyond any possible --

Hon Mr Leach: Certainly we have provided whatever assistance the municipalities required to help them and assist them in amalgamation. We were always there, either through the political process or through the staff process, to make sure that whatever help they needed in achieving the benefits of amalgamation was known and recognized and that they were helped. But as far as mandating that amalgamations take place, Bill 26 just doesn't allow for that. That can only be done at the specific request of the municipalities.

Mr Gerretsen: It's my suggestion to you that the government was very happily involved in the whole process, because you after all passed Bill 26, which started it off.

Hon Mr Leach: Certainly we were heavily involved.

Mr Gerretsen: Okay, then don't say that it was done without government input.

Hon Mr Leach: We were certainly heavily involved. We provided the leadership that this province has needed for years to reduce the overlap and duplication that existed in municipalities. So if you want to say, can the province take credit for the amalgamations that have taken place over the past year, I would say yes. I'd love to take credit for all of that, because it was through the leadership of the province that we pointed out to various municipalities that there were savings to be achieved for the taxpayers. There is only one taxpayer, and if by amalgamation and getting rid of -- in Prince Edward, for example, by going from 21 municipalities to one there were huge savings and certainly we encouraged them to do that. But they did it on their own initiative, with our encouragement, without a doubt.

Mr Gerretsen: I see. I think the interpretation around the province is somewhat different. There was more than encouragement involved.

Let me ask you something else. Mr Eves said something very interesting in the House yesterday, that about a third of the municipalities had no tax increase, another third had less than a 5% tax increase and the other third presumably had a tax increase of more than 5%. On the assumption that the new market value assessment system is revenue-neutral as far as each individual municipality is concerned, would you not agree with me that if two thirds of the municipalities had tax increases, and half of those higher than 5% over the previous year's increase, the whole downloading exercise was not revenue-neutral, and that certain municipalities are paying a lot more now? Otherwise, they wouldn't have the kinds of tax increases that they've got.

Hon Mr Leach: There were a couple of municipalities that had tax increases. For example, I think in Markham there was a 7% or 7.3% increase in property taxes this year because of growth in that community. They said they had to raise taxes to provide the infrastructure to accommodate the growth that was occurring, because they're in a big-growth area. There are some municipalities like that. None of the tax increases that occurred in a third of the municipalities that may have had them were in any way, shape or form associated with the assessment process.

Mr Gerretsen: That's right. The assessment process presumably is neutral in each municipality, but how about the downloading exercise?

Hon Mr Leach: We very publicly said and pointed out to the municipalities the savings targets they would have to be revenue-neutral. For many municipalities I think it was 1.7%, some were 3.2% and I think the others were 4%.

Mr Gerretsen: If their tax increase is more than 5%, it's because of their own situation, their own mismanagement or whatever.

Hon Mr Leach: I'm not saying that it's mismanagement. In some instances it's necessary to raise taxes to pay for needed infrastructure that takes place. The duly elected councils in those municipalities know what's in the best interests of their citizens. If the small minority that felt they needed a tax increase to provide services voted to do that, that's their business, but it wasn't as a result of actions by the provincial government.

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Mr Gerretsen: Let me ask you about the restructuring fund. There's $65 million set aside for that.

Hon Mr Leach: It's $70 million, I think.

Mr Gerretsen: I'm looking at page 98; it says $65 million, municipal restructuring fund. If there is some other money somewhere else, that's fine. Could you give me the exact amount of money that was applied for by all the municipalities that have done restructuring? What is the total amount of the applications?

Hon Mr Leach: I don't have the number; I'm quoting these off the top off my head. The number I recall is that we had $70 million in the restructuring fund, and that $70 million paid for 75% of the eligible items that municipalities asked for.

Mr Gerretsen: The municipalities were to pick up the other 25%, that's what you're saying.

Hon Mr Leach: Yes. So that would be $100 million, perhaps, something like that.

Mr Gerretsen: If a municipality like Kingston is short $9 million -- and I think they've written you letters on this; I'm not sure how much they got from you, but I think it was something like $13 million or $14 million. As a matter of fact, they have put one of your own officials, a Mr Gardner Church, who is still listed as your consultant for the Seaton project -- you've put him in a heck of a position, because he was hired by the city of Kingston to look after the amalgamation on the theory and on his promise that he would bring the money in from Toronto. He was going to make sure. He had all the contacts, all the connections etc. They're $9 million short. You've put Mr Gardner Church, who is the senior adviser in your department, in a heck of a position. He said he was going to bring all this money from Toronto, and now he's not living up to it. Why aren't you giving the city of Kingston the $9 million they've asked for?

Hon Mr Leach: We've given the city of Kingston $14 million to assist in restructuring.

Mr Gerretsen: Their total restructuring costs are something like $30 million. They figure they are still about $8 million to $9 million short. You're not living up to your commitment as far as they are concerned. Mr Church is looking very bad. There are editorials written about him and everything. Here is the man from Toronto who was going to see it all done the right way. He's bought a farm in Sydenham. It's just a horrible situation.

Hon Mr Leach: The decision to employ Mr Church to assist in the restructuring in the city of Kingston was a decision made by the city of Kingston. Mr Church was not sent to Kingston by the province of Ontario. They recognized Mr Church's expertise.

Mr Gerretsen: It's amazing how the same situation plays out differently, then, because in Kingston a lot of people have the impression that he was sent down by the province to sort of make it happen and he was going to make sure that the city wasn't going to suffer.

Hon Mr Leach: I am quite confident that it's the city of Kingston that is paying his salary. They hired him. They recognized the expertise that he has in municipal restructuring. He is a very competent individual. I know he will do a fine job for them.

Mr Gerretsen: He has sent you a letter and the mayor has sent you a letter where the same Mr Church has documented all the restructuring costs, and he's saying, even after you take the 25% local contribution into account, they're short $8 million to $9 million, and, "Minister Leach, please send us the money." Are you going to live up to your commitment to the new city of Kingston that was contained in the initial amalgamation agreement to actually pay for these costs above the 25% local contribution and send the $8 million to $9 million and make Mr Church once again look redeemed in the eyes of Kingstonians?

Hon Mr Leach: We're reviewing the city of Kingston's request for additional funds to see what those funds are required for and whether they are eligible costs under the restructuring proposal.

Mr Gerretsen: Mr Church is still listed as one of your advisers. He says they should be eligible.

Hon Mr Leach: He's working for the city of Kingston at the present time, and he's representing his employer to the best of his ability.

Mr Gerretsen: But he also works for you, because I see him here on the organization chart. This is one of your own officials who is saying, "Yes, this $9 million is eligible for restructuring." Will you give us a commitment right here and now that you will pay that money to the city of Kingston?

Hon Mr Leach: He might have been employed at the beginning of the year, but Mr Church has retired from the provincial government. He is now employed by the city of Kingston.

Mr Gerretsen: Wait a minute now. Then your charts here are wrong.

Hon Mr Leach: These are the estimates as of April 1.

Mr Gerretsen: No, the estimates for this year. He is shown, Seaton interim planning team, Gardner Church, special adviser. He is right below Dan Burns, remember your former deputy minister? He's right in there.

Hon Mr Leach: Just as there was a former deputy, there's another person in Mr Church's place. Things change from April 1.

Mr Gerretsen: Would you agree with me that when he sends you a letter or when a letter is prepared on behalf of council on his financial figures, you, knowing the gentleman and the excellent work he's done --

Hon Mr Leach: Are you saying that I should just accept a letter sent by an employee of the city of Kingston saying, "Send me $9 million," and I should just say, "OK, here's the cheque"?

Mr Gerretsen: No, but the letter was endorsed by council and they've got everything with it etc, all the attachments to it. Will you take a look at that?

Hon Mr Leach: That's the difference between your government and our government: We feel it's prudent to investigate each one of those requests for additional funds.

Mr Gerretsen: Unfortunately, I've never been in government here.

Hon Mr Leach: And you never will be.

Mr Gerretsen: I hope to one day.

I want a commitment from you that you will take a look at this again so that you can help out not only Mr Church but the taxpayers of the city of Kingston, who are saying the whole restructuring process has cost them $9 million. Remember the 3% max in Pittsburgh and Kingston township? According to the restructuring agreement, which has your name as a signatory, it says those people weren't going to be paying more than 3% of an increase. Some of those people, and not as a result of market value reassessment, are paying 10% to 20% more, and they can't understand it. Their assessment has gone down, their total tax bill has gone up. They feel that this government isn't living up to the commitment it gave in the agreement you signed with the transition team at the time.

Hon Mr Leach: I can tell you that this government will live up to any signed agreement that we have.

Mr Gerretsen: You will take a look at the $9-million request, then, and look at it in a very favourable light. I am sure we will hold a special day in your honour if you send us the money.

Hon Mr Leach: As a matter of fact, I think they're doing that tomorrow.

Mr Gerretsen: Are they?

Hon Mr Leach: Yes. I'm going down tomorrow.

Mr Gerretsen: Oh, good. We'll see you there.

Hon Mr Leach: I'll talk to the mayor and council about that.

Mr Gerretsen: That's good. Do I have some more time?

The Chair: You have a few more minutes, Mr Gerretsen. You have about four or five minutes.

Mr Gerretsen: Could you give me the total amount of all the applications you received under this restructuring program of $65 million? I know municipalities were supposed to pay 25% and you were to cover the 75%. What was the total amount you received by way of applications?

Hon Mr Leach: The number you're talking about, the total amount of submissions, if you want to talk about the total amount of eligible costs, that's one number, but there were some municipalities that sent in a wish list of expenditures that they would like to have. It was very quickly pointed out to them that they might be very nice to have, but they are not eligible items under the restructuring program. There were municipalities that went for everything from building a new city hall to repainting all the equipment in the municipality on day one. We indicated to them that they were not eligible expenses under this program; the repainting, for example, should be phased in as equipment is replaced. But we can provide you with the total amount of eligible costs that was asked for.

Mr Gerretsen: What I'm getting at is that one gets the feeling that some of this restructuring money has been handed out to the various municipalities in a very haphazard way. I'm not for a moment suggesting that the figures haven't been checked or anything like that, but some municipalities should have got 100% of what they were looking for and others should have got much less than that. I'm just wondering why this is happening. Were there political considerations that went into this?

Hon Mr Leach: No. That's very easy to respond to because, as I pointed out, some municipalities fully complied with the requirements of the program and only submitted a request for what were eligible items. Other municipalities took the position of: "Let's throw this on the plate and see if any of it sticks. If they include it in the program, we'll be better off." But we didn't. We were very clear as to what was eligible and what was not eligible, and we very quickly pointed out to those municipalities that sent in a wish list of requirements that they were not eligible. They may be saying, "We sent in a request for $1 million, and we only got $100,000." That's because only the $100,000 was eligible under the program. Other municipalities sent in their request for the $100,000 and got it all, because they complied with the requirements.

Mr Gerretsen: Let me ask you this, because I know I'm going to get cut off by the Chair. He's very punctual about these things.

Hon Mr Leach: It's after 6 of the clock.

Mr Gerretsen: They're still talking in the House too, so that clock must be fast.

You gave Toronto a commitment of a $100-million loan program if they needed it. Are you willing to make that same commitment to every other municipality that is short as a result of the restructuring?

Hon Mr Leach: You want me to give $100 million to every municipality?

Mr Gerretsen: No, no. Will you enter into a loan program with them for the amount they're short? Why are you treating the city of Toronto differently from other municipalities that, proportionately speaking, have exactly the same financial problems that Toronto presumably has? That's reasonable, eh? You give a loan program to one place, you can give it to another. I think we're going to get the $8 million right now.

The Chair: You've got 30 seconds to do it.

Mr Gerretsen: Are you making that loan program available to other municipalities that are in need as well?

Hon Mr Leach: There are a couple of different sets of circumstances that apply with the city of Toronto. In the city of Toronto we did pass legislation creating the new city. As a result, we said that as that was caused by provincial legislation, we would provide some assistance to them. We did flow $50 million in a grant to accomplish that. But I would also like to point out that the city of Toronto is 25 times the size of the city of Kingston.

Mr Gerretsen: I'm not talking about size. There are some other municipalities that are short as well. Are you making the same loan program available to them or not?

Hon Mr Leach: If we go on a per capita basis, the city of Kingston should probably be sending us money back.

Mr Young: On a point of order, Mr Chair: Is not the session over?

The Chair: We are finishing up, as we have for each of the parties, in a way that allows them to answer.

I think, Mr Gerretsen, you have the substance of your answer from the minister, if I'm not mistaken. Is there anything the minister would care to add?

Mr Gerretsen: I think you are mistaken.

The Chair: I think we can end on that note.

Hon Mr Leach: We will make sure that every municipality in Ontario is treated with fairness in comparison of one to another. There will not be one municipality that is treated any less or any more fairly than any of the others.

The Chair: Thank you, Minister. On that note, we stand adjourned until 3:30 on Tuesday. See you there.

The committee adjourned at 1804.