Committee Transcript 1991-Aug-14 | Legislative Assembly of Ontario

The Chair: We would like to call on the first witnesses, from the Sudbury labour council. Would you please come forward? Please identify yourself for Hansard. Welcome to the standing committee on finance and economics. You will have one half-hour. Out of that half-hour, try to save some time at the end for questions of the three parties. The time left will be allocated in equal amounts.

Mr Tooley: Good morning. I am Barry Tooley, president of the Sudbury and District Labour Council. A warm welcome to Sudbury. I am glad to see that this government is making a real effort to reach out to the people of Ontario by holding public hearings across the province on the budget. My members appreciate your efforts.

I represent the Sudbury and District Labour Council, with a membership in excess of 15,000. This labour council is proud to be here today supporting the budget put forth by the Honourable Treasurer Floyd Laughren, a budget that truly invests in creating jobs for the people in Ontario. We support the budget, where $700 million will be used to provide direct employment to thousands of Ontario workers. This budget provides $175 million, which is retroactive to October 1, 1990, which will ensure workers will not be forgotten when companies declare they are bankrupt and the workers have not been paid wages owed to them. This budget provides $3.2 million to help workers re-enter the job market and improve their skills.

We in labour see this budget as no different than any business venture or a person who takes a mortgage on a house. It is considered an investment in the future. This budget will stimulate the economy by creating approximately 70,000 jobs. The 1991 budget will provide a system for tax fairness by ensuring that those at the upper end of the income scale pay a greater share. The recently established Fair Tax Commission will be reviewing and suggesting a fair and equitable tax system for the province.

We in northern Ontario are pleased with the initiatives in this budget to provide improvements to the northern Ontario travel grants. Northern residents will no longer have to face undue hardships when they are forced to travel to southern Ontario for medical treatment. This budget recognizes the higher gasoline prices in northern Ontario. Residents of northern Ontario will be exempt from paying the motor vehicle registration fee.

Many northern communities, especially single-industry towns, are suffering from long-term structural changes and the highest unemployment in the province. This government took office in the midst of the most severe recession experienced in the past 50 years and, unlike other recessions, this one is more serious because its effects are expected to last longer and our economic base is changing; 65% of major layoffs were due to permanent plant closures compared to 24% in 1982, while bankruptcies have increased by 73% compared to 24% in the last recession. In communities across the province, this recession is causing tremendous hardship for people and their families. We only have to glance at the increase in those needing social assistance to know that Ontario, its businesses and people have been hardest hit by this current downturn.

This budget not only picks up the slack in federal funding commitments for health, education and social assistance, but it also creates or maintains 70,000 jobs. We have maintained vital public sector services, especially health care and education, while building sustainable prosperity for jobs for the future. This budget is fighting this recession through undertaking the most aggressive anti-recession effort in all of Canada through increasing overall spending by 13.4%, the $700-million anti-recession program where, when combined with the contributions of local government and agencies, total spending will exceed $900 million.

This budget is helping to maintain health care and education in the province. The budget responded to the need for action in such areas as worker protection, pay equity, social assistance reform, affordable housing and the environment. This budget is putting spending power in the hands of Ontarians. By not imposing the provincial sales tax on the GST we are leaving $470 million in the pockets of consumers in 1991 and enriching the Ontario tax reduction for low-income earners. In recognition of the difficulties confronting northern Ontario people, its 30%, or $211 million of that anti-recession program, has already been allocated to help fund projects in communities across the north.

Some of the initiatives introduced in this budget include:

A $215-million social assistance reform package on a full year that is designed to provide benefits for those who are in greatest need, to help people get into the labour force, to increase fairness and accessibility and to provide further relief to overburdened municipalities; the largest enrichment in the history of the Ontario tax reduction program. This $50-million enrichment means the number of low-income earners whose Ontario income tax will be eliminated or reduced will increase to 700,000 for the 1991 tax year.

Other tax moves include an increase to the personal income surtax rate from 10% to 14% on Ontario income tax in excess of $10,000; an increase in the capital tax on banks and loan and trust companies from 0.8% to 1%; and eliminating the tax exemption for insurance companies on certain auto insurance premiums.

An additional $12 million for new shelter beds and enhanced services for women who are victims of domestic violence, and an increase of more than $8 million to expand and enhance services for women and children who are victims of sexual assault; $125 million will be made available to our transfer agencies, to major ones such as municipalities, school boards, hospitals, universities and colleges and to other agencies, to assist them with the cost of pay equity; $24 million in 1991-92 for employment equity initiatives in the Ontario public service.

An unprecedented level of provincially supported housing activity for the development of another 10,000 non-profit housing units, which will cost the province approximately $150 million in annual operating subsidies when completed; Ontario Hydro's commitment of $232 million for conservation efforts in 1991-92; a three-year $10-million program to assess abandoned mine hazards and take remedial work; $152 million for increased investment in the development of new technologies; a manufacturing recovery program worth $57 million for financial assistance to small- and medium-sized manufacturing firms; $100 million in programs to assist farmers with interest rates and a gross revenue insurance program; and $24 million in 1991-92 for employment equity initiatives within the Ontario public service.

In summation, this budget has taken the humane approach in the face of severe criticism from the business community and of course our federal government, which has literally given Canada away with its policies. I thank you for this opportunity to appear before this committee with our views on the budget and I would be happy to answer any questions.

0910

Mr Kwinter: Thank you very much for making your presentation, Mr Tooley. I would have been a little happier if it had been really your presentation. All you have really done is to read the government news release on the budget. If you take a look at page 3 on your comments, you did not even go to the trouble of changing the adjective where it says, "We have maintained vital public sector services." This is verbatim the government's press release on the budget.

I would like to ask you one question. Again this is right out of the press release of the government and you are reading it. It says: "This budget recognizes the higher gasoline prices in northern Ontario. Residents of northern Ontario will be exempt from paying a motor vehicle registration fee." I am sure you realize they have reduced the registration fee but increased the price of gasoline, so on net there is no saving to northern Ontario residents at all. As a matter of fact, it is going to cost them considerably more money. Do you have any feelings about that?

Mr Tooley: We are aware that the gas prices are continually on the increase. However, any benefit that northern Ontarians derive from the initiatives we would most certainly support, because we have always had higher gasoline prices in northern Ontario.

Mr Kwinter: And you would support higher gasoline prices in northern Ontario?

Mr Tooley: No, I certainly do not support higher gasoline prices in northern Ontario.

Mr Kwinter: What are you saying?

Mr Tooley: I say I am supporting the initiative the government has taken --

Mr Kwinter: To increase gasoline prices in northern Ontario.

Mr Tooley: -- eliminating the registration fee for northern Ontario people.

Mr Kwinter: But as I say, there is no saving. They are taking it out of one hand and they are saying, "We're going to reduce that but we're also going to increase it." The net effect to northern Ontarians is that they are paying more money for gasoline and more money to drive.

Mr Tooley: I am not sure there is that much of a disparity between northern Ontario gas prices and southern Ontario's. There is some disparity, but I have travelled to southern Ontario and have paid very, very close to the same prices we paid in northern Ontario.

Mr Kwinter: I think you should talk to your friends because, for the six years I have been in the Legislature, the members from northern Ontario have been standing up and complaining about the price disparity on a regular basis. They are saying, "Why does it cost more money to buy gasoline in the north than it does in the south when you can buy beer or liquor in the north at the same price as in the south?" It is a standard argument I have been hearing for six years.

Mr Tooley: We most certainly agree that the gasoline prices are too high.

Mr Kwinter: You just said they were not too high.

Mr Tooley: I am saying in general, right across Ontario and across Canada. When you look at the exodus of people going across the borders to purchase gasoline that invariably comes from Canada at a lower price on the other side of the border, there is something wrong with our system.

Mr Phillips: On jobs, I am always mildly surprised that labour councils are not kind of railing at the budget in terms of the unemployment rate for the future because, as you know, the budget plans for the next three years for the unemployment rate to stay around 9% to 10%. You say it creates 70,000 new jobs. In fact, if you get into the budget, it does not create any new permanent jobs. Your statement on creating new jobs is wrong. It maintains jobs. It does not create any new jobs.

My question to the labour council really is, are you going to be satisfied with an unemployment rate in the province of that 9% to 10% over the next three years as this budget predicts? If not, I am surprised the labour council is not far more aggressive in terms of creating jobs. The reason I raise this is, as you know, a year ago, Ontario's unemployment rate was the lowest in the country. I think now it is the fifth lowest in the country so we are heading in the wrong direction. I would like the labour council's comments on our job creation programs in this budget over the next three years.

Mr Tooley: Certainly we would like to see an unemployment rate of zero. If we look at the policies that have been in place right across Canada, I think we are looking at a 10.5% unemployment rate. In Ontario this government has taken initiatives in maintaining those 70,000 jobs, and with the initiatives in the non-profit housing, there are going to be jobs created in the construction industry. Of course, when we are in a recession I think it would be unrealistic to look at a zero unemployment rate. Most certainly, with the initiatives put forward by this budget and the government, we would have no problem supporting the budget.

Mr Phillips: You know that the unemployment rate will be 10% next year in the middle of an economic recovery and you are still satisfied with that?

Mr Tooley: I am certainly not satisfied with that and I dispute your figure of 10.5% next year.

Mr Phillips: It is not mine; it is the budget's.

Mr Tooley: The economic predictions that are coming forth now certainly indicate that we would be going into a recovery and of course there would be some jobs created.

Mr Phillips: No, those are not mine; they are from the budget. Page 43 in the budget says we will have real economic growth next year of 3.4% and the unemployment rate in the province will be 9.7%. I am just shocked the labour council is not saying "that is unacceptable."

Mr Tooley: Of course it is unacceptable, and it is unacceptable to the labour council when we see the exodus of manufacturing jobs and the exodus of businesses south of our border. There have been no initiatives by prior governments to take any steps to alleviate the exodus of business out of the province.

Mr Phillips: Does it strike you as ironic that this budget, when the full impact is felt, still sees unemployment at 9.7% next year?

Mr Tooley: I suppose those are predictions and I think they could change.

Mr Jamison: We are talking about the budget in general and that is what I would like to zero in on: the effects of the budget to really help at this point in time the needs of the north and, in particular, northeastern Ontario. The funds from the anti-recession package for northeastern Ontario amount to about $131 million. That accounts for about 19% of the anti-recession program. In Sudbury alone I guess the amounts are about $18 million; and if you look out the window you see people, construction workers, working.

The question I have for you, because you are a citizen of Sudbury, is, what do you feel would have been the effect if no funding had come through, if in fact cutbacks had taken place? There are two opposing views here and we have to realize that. What do you feel the effect on Sudbury during this severe recessionary period would have been if, in fact, the Mulroney theme had been followed by the Ontario government?

Mr Tooley: Most naturally, I feel it would be devastating, not only to Sudbury, but to all of northern Ontario, had the initiatives not been taken to inject funding for job creation. We have seen the increases in bankruptcies, in personal businesses and personal bankruptcies and it is something that is devastating to any community.

Sudbury is one of the more fortunate communities, of course, with the price of nickel remaining relatively stable -- and those markets have been good in general to Sudbury -- but the small businesses are still going under, because people in recessionary times are just not spending dollars, so there has to be something to create a feeling of wellbeing in a community in order to get people spending more.

Mr Christopherson: I would like to thank you very much for your presentation. I appreciate it. I would like to get specific about local matters.

When we were in the Sault we had a chance to meet with some of the officials from the economic development corporation there and some of the work that they are looking at. Sudbury came up in the discussions as an example of what a community can do when there is co-operation between labour, government, business and the general community.

Apparently, your project, initiated sometime in the late 1970s or early 1980s -- I believe it is called Project 2001, though I stand to be corrected -- and I would be interested to hear from you, from labour's point of view, how you approached those discussions. How was it that you held comfortable meetings with what are not normally traditional partners, and how did you go about bringing this whole community to focus on this one endeavour, and then have everybody behind it and quite frankly, to have succeeded so well?

I drove through here not too long ago and I heard the radio, as a public service, announcing with pride what had been done here in Sudbury and thanking those who were involved a few years ago and saying, "Thanks to that, we have a diversified economy," and talking about why you have what you have. From your point of view, I would like to know just a little bit of the history of how you became involved in that. How did you make it work?

Mr Tooley: I think it was a realization not only from labour's side, but the business community's side, that we were in difficult economic times, and that if we were going to succeed, in order to be able to create anything within this community, we had to get rid of the adversarial position that labour usually finds itself in. It was co-operation from many sides that allowed some of this economic recovery to take place so successfully in Sudbury.

Mr Christopherson: They diversified the economy too. Could you give me an idea of how you went about that? What were some of the things that you looked at?

Mr Tooley: Some of the things were secondary manufacturing jobs that were relative to the mining industry and, in some cases, exporting. I guess Burgess Powertrain would be an example where they manufactured certain parts for the US army, and those areas. Just in general, there was co-operation from many, many different sectors in order to come up with different ideas to create different jobs.

Mr McLean: I would certainly like to have obtained the views of the Sudbury labour council this morning and your personal view, sir, rather than the speech you wrote that we have already heard about three times. It is unfortunate that the council has not drafted its own submission, in my opinion, and so I really have no further questions to ask.

Mr B. Murdoch: I pass.

The Chair: You have none? Does the opposition have another question? We have 10 minutes left.

Mr Sutherland: Mr Chair, can I ask --

Mr McLean: Mr Chair, I thought the time was split up and if each party wanted to use it, then it was their choice.

Mr Sutherland: Sorry, Mr Chair, if you have objections, fine, then we move on to the next one; but if you have no objections, what time is left can be divided between the other parties if you do not want to use your time.

The Chair: We can have a recess for 10 minutes. Thank you for coming, Mr Tooley.

The committee recessed at 0922.

0930

JAMES N. GRASSBY

The Chair: We will call the next group forward, the Sudbury Social Agency Network. Would the people involved in this group please come forward? Dr James N. Grassby is the name I have got down here. Is the gentleman present?

Dr Grassby: Oh, he is.

The Chair: Come forward, sir.

Dr Grassby: I do not know whether or not he is a gentleman.

The Chair: You will have half an hour and after your presentation the time will be divided among the three parties. I understand now that if any party gives up its time it is not going to be divided among the other parties. Is it agreed that the same applies to the other two? Okay, fine.

Dr Grassby: Did I hear you correctly, Mr Chair; did you say I had 30 minutes and 10 minutes of questions, or 20 minutes and 10 --

The Chair: No, you have 30 minutes total. After your presentation, the remaining time, up to that 30 minutes, will be divided among the three parties equally.

Dr Grassby: Thank you very much for inviting me. I am not sure whether I came under false pretences. Normally I do, but today I tried not to. I am a worker on the street. I am a retired senior executive from a large multinational company in New York City where I learned my street work. My current activities are running the United Way -- behind the scenes, of course -- and the action centre for youth on the street, and consulting at the university and teaching. So I have a diverse kind of representation, having run the cancer society and many other social agencies.

I do represent the group, although my presentation today is not exactly what you might expect. I have made presentations like this before royal commissions and others, and usually I forget my notes and I have to speak extemporaneously. Today I have not done that. I have forgotten my glasses and I cannot see what I am presenting. I am hoping it will have rather more clarity for you than it does for me.

My first thought was to try to convince this group that very often new governments, dedicated to reform and change, tend to reform and change the status quo rather than doing what is called -- there is a term in industry for it, when you go back and you call it zero budgeting. You look at the basics of the economy and say, "What the hell would you want to do if you started from scratch?" It is so easy to get caught up in the day-to-day rat race of running a government, or endeavouring to -- it is very difficult -- instead of saying: "How did the economy get this way? Having got this way, were the forces positive or negative that shaped it?"

I would rather that you try to not look too much at my notes for the moment, but to put your thinking cap on and try to do some visualization of what I am talking about.

What percentage of people were on the farm 150 years ago? It was 65%. What percentage of the people were in manufacturing: railroads, railroad ties, railroad tracks and things of that nature? It is only 20%, 25%. What fraction of the people were dilettantes or conspicuous consumers as per Thorstein Veblen? A very small number. And how many people ran the economy in the States or Canada or Britain or Germany or France? A small group, a group no different in size perhaps, in absolute terms, than the group today.

I think it is vital that we understand how the economy has got to where it is and how the rates of change confuse some of the people who are subjected to the results of the rates of change and some of the people who are putting the rates of change into effect.

We all know that most of the western democracies, with the Churchillian phrase of their being the worst government of all types except this one, have not served their citizens as well as they could have been served had they taken a very cold-blooded -- not necessarily cold-hearted -- look at what we were planning to do.

If I were to form a government today, would I sit down and say, on zero-based budgeting: "I shall have 10% unemployed. I shall have 6% homeless. I shall have 22% of the children starving. I shall have a third of the people without medical care." Of course I would not do that. I would say: "What is the wealth-producing potential of this socioeconomic mechanism? How will I maximize the wealth production? How will I guarantee that everybody has a subsistence level with respect to the human terms of living, not as a mere existence, but living as a human being?" I would go on from there, and when I had built my model -- and I was at one time the world's leading expert in the application of advanced technology to the mineral industry, so I know all about models, male, female and mathematical -- I would compare my model with the realities of today and I would see what the magnitude of change would be that was needed to move from where we are to where we should be. I think it would be very dangerous if I did not build those models and I simply took my government, as it were, and said, "We will have to tinker with this and we will have to tinker with that," because we might not end up with the end product we want.

So I would like to look at the structural changes that have occurred over the last century and a half. I know that everybody here is probably more expert than I in certain fields of what we are going to discuss. I think I have done a fairly good job of generalizing my approach to western economies, having been privy to correspondence between John Maynard Keynes and Kenneth Galbraith and other things in the early 1930s because my father was a learned analyst of what makes economies tick and stick.

Why is it that there is a natural trend in most economies, from the days of Alexander the Great to the days of Brian Mulroney and Ronald Reagan, for wealth to be easily transferred from the poor to the rich? Why is it so difficult to transfer wealth from the rich to the poor? The answer, of course, is extremely simple to define.

You all know the story of the tragedy of the commons, the 10 shepherds who each had 100 sheep on a common ground that fed 1,000 sheep very well indeed. One SOB -- that is a mining term for a chap who works on the 13th level -- decided he would increase his income by 10% by adding one sheep. And he did. He now had 11 sheep, and he said to himself -- a very clever, machiavellian, legalistically bombastic individual -- "Nobody even noticed this because it is only a 1% loss to each of the others." Of course, the commons collapsed because it could not stand the overgrazing.

Take that analogy and look at what happens when we transfer wealth from the rich to the poor. Here are the three rich people in the country and here are the 97 not-so-rich people. We wish to give a few dollars to each of these people from the capacious pockets of these people and we must take $70,000 from each of them. It may represent 10% of their income. When we disperse it over these people, it becomes such a small amount these poor people hardly notice it. So the pressure to get this few dollars is less than the pressure to resist its transfer.

0940

However, think of the reverse. If we wish to give these three well-connected individuals a few bucks, we only have to take a few pennies from the poor and they do not notice it. If we do that each year, a few pennies, at the end of 10 years there is a significant shift. It is inevitable that this will happen. The reason for that of course is a very simple power structure syndrome.

Behold the moose. The moose decides that there is a good way to transfer the best genes of the moose, and that is to have the widest antlers and the strongest head. So the moose goes about butting other moose in a very noisy and sometimes colourful display and guarantees that that particular life form will get the best genes.

We are no different from the moose, except for one thing: We have much more capacity; more than a hard head and more than wide antlers. We have the ability to seduce, to cheat, to lie, to connive, to be slippery, slimy, slithery, oily individuals, much more substantially than the moose. So our genes that are transferred are not necessarily the best genes. They might be the best power-seeking genes.

There will always be a power structure. From the emperors to the popes to the kings to the presidents to the premiers to the industrial tycoons to the military/industrial complex, there will always be a power structure, and to whine about it is to be impractical. What you have to do is to figure out how to counter it. If you are the victim of a power structure in the school system or in the church or in some place, what you have to do is to get your fellow victims together and seek out a common cause.

This is a most difficult thing to do. A common cause among the people in this room, some of whom are tall and some of whom are short, and some of whom are fat and some of whom are thin, and some of whom are black and some of whom are red and some of whom are white, is awfully difficult to isolate because there are so many different components of each of our approaches to society, economics and all these things.

Unless you can find common cause -- and friend Barry here knows all about that; he is in the labour union. I worked in the days in the mines when labour unions were exceptional by virtue of their absence. People had to come together with a common cause. I formed co-operative credit societies, five of them, credit unions, because the banks did not trust the workers. We had to find a common cause, our inability to be capitalized.

So wherever you can get people to find a common cause which avoids the differences that separate them in other aspects of their lives, then it is possible to introduce change.

What is this economy we are discussing? I think there are three economies. There is the subsistence economy, and you know what that is. It is food, clothing, shelter, education, the arts, transportation, housing. Without that, society cannot function. Then there is the discretionary economy, which over time has become larger than it was in days gone by, the second radio set, the second TV, the second Skidoo, the second this, the second that. Then there is the frivolous economy, and I do not use that term in a pejorative sense, but only in an economic sense. Items that are part of the frivolous economy contribute nothing really to human experience or to the wellbeing of society, and they include the hula hoops, vaginal deodorants, cigarettes, cigars and Rolls-Royces, which consume much gas per mile.

These three kinds of economies have something to say about the stability of the totality of the economy. If we have a very large proportion of our workers producing things that have no utility, when a downturn comes or a problem comes, you can turn off that part of the economy, so what happens is that you have what is called the normal business cycle. It is no more normal than the shape of my head. It is forced on us because we distort the realities of the subsistence economy. So wise people have said, "If we're going to have an unstable economy, then let's put some props under it so it doesn't shake."

Turn, if you would, to diagram 1, called page 1. Here we show the 19th-century typical economy: a huge item for farming, fishing, forest operations and mining; a smaller section for heavy industry, transportation and manufacturing; and less so for services, professions, others and dilettantes. Then the little tiny group at the top controlling, that is the power group and the wealth-seeking group.

Turn the page over and you will find the same thing 150 years later, and my God, what a difference. The farming, fishing, forest operations and mining are now a small part of the total economy and the heavy industry, transportation, high tech and manufacturing not too different in size from days gone by, but the services, professions, administrators, white-collar and others -- and, may I say it, governments -- occupy a huge section.

I say that picture has a visual instability compared to the other one. It is more easily pushed over, and you know damned well it is, because from 1850 till now we have had a series of recessions and depressions that indicate that there are inherent instabilities.

You see, when you look at the first stage, one of the elements in stability is that everybody is needed as a worker to keep it going, because there is so little surplus.

Let's take the goods-producing section out of our economy, page 3. The subsistence part was very large. The discretionary, the semi-luxury goods, the grand piano and a few other things, were fairly modest. Frivolous, conspicuous consumption again, as per Veblen, was not terribly large, and the theft of course was about what it is now: the Dutch tulip scandal; the Teapot Dome scandal; the Whitney scandal in the stock market, 1929; the Samuel Insull holding companies; the Boesky $500-million-a-year ripoff in Wall Street of a few years ago. The theft section is always with us.

Turn the page again. Now we have the goods-producing section of our modern economy, and the subsistence section is not too different in terms of the things that produce it, the discretionary is quite large, but the frivolous is huge.

I went to a store the other day. My wife fell and broke her leg. I needed a piece of tape to tie it up, and I went to the drugstore and looked for a piece of adhesive tape and there were 17 different kinds. I need a new car. My car is 11 years old, and I go to the manufacturers and there are 450 kinds. That is an element of complexity and overuse of materials and energies and resources that is frighteningly expensive. We have been so conned by the advertising and the song and dance about how good it is to have three Skidoos that we have an element of instability in the goods-producing economy which is frightening. I call it low utility, medium utility and high utility.

Now we go to page 5 and we say, "What the hell have we done over the years to try to modify the effects of the increasing instability caused by this complexity and this misuse of resources for frivolous goods?" I have got some props there; see the props on page 5? They are called medicare, family allowances, welfare, pensions, unemployment insurance, which is spelled wrong. We struggle. Some political parties struggle quite hard to put into place props to prevent people from dropping through the cracks in the system, or the cracks becoming too wide.

That is very interesting. It leads you to asking the question, "I wonder whether it might not be a good idea to put all those God-damned props into one pot and make one big prop as an integral part of the total system," and if it were not for that, maybe we would use it, because it is a dirty word.

Now, when man was good on this earth, by some peculiar circumstance, because he has not been very good to the earth, there certainly must have been inherent in his system two powerful instinctive forces, one for competition and one for co-operation. The competition was actually essential, absolutely essential, because you had to compete with volcanoes and blizzards and storms and lions and sabre-toothed tigers and all kinds of things, so you had to compete against the elements to survive. Co-operation was an instinctive thing that said, "Unless we do it together, we won't be able to do it." There is no way that one little guy can fight a sabre-toothed tiger. This is kind of a dicey operation, so they have to co-operate and dig a pit and catch him.

0950

We seem to have in our economy perverted the competition element. We compete only with each other now, but in doing so we are brutal, absolutely brutal. We use the word "competition" to mean something which it is not at all. We are going to become more competitive: we are going to cut everybody's wages; we are going to reduce the standard of living; and we are going to stop giving medicare because it is too expensive.

Let me tell you something about medicare. The United States spends 37% more money on medicare than we do; their administration costs are three times as high; there are 37 million people without any service, and we say ours is too expensive. Somebody is crazy.

We have to increase and induce more pressure towards co-operative activity. When we have done that -- the labour unions, the credit unions, the co-operative housing, consumer co-ops -- it has worked. It has worked very well indeed. I know this from experience.

Speaking of experience, you might wonder why I have the nerve to come and present myself to this august group. Well, I want to tell you something about wisdom, experience and education. I am well into my eighth decade. I have been around. I have been a leading expert in technology and engineering in a wide variety of fields. I know my stuff. Well, I used to 10 years ago when I retired -- I am out of date now.

Wisdom comes from good judgement, and good judgement comes from experience, and experience comes from bad judgement, and wisdom can only be transmitted to the learners through education; therefore education is, in part, the ability to transmit wisdom, based on experience, without the trauma of the results of bad experience. It is not complicated.

What I am trying to do today is stimulate a little thought about looking at some of the basic components of economies and how they change, how the potential for production of wealth and goods is maintained, and whether or not the people who shift paper on Wall Street really make a contribution.

I worked on Wall Street for seven years, and I would go down to work early because I was a bachelor at the time, pseudo, and watched the 110,000 people go into the World Trade Centre, then at 5 o'clock, I would rush down to see what came out. Any nickel, any copper, any wheat, any ore, any cars? Not a damned thing, and I said to myself, "There is something odd about a system that can support 150,000 people at huge wages, when the miner and the farmer and the garbage man, who are very important, do not get that kind of wages." It puzzled me.

In this community I am on the cancer society; meals-on-wheels; the United Way; Laurentian University development; built the University of Sudbury; sat on the board for 30 years -- I am still there; I have been 10 years with the United Way. I know this community. But I have also been to world conferences on bi-regional development and world futures. I know something about the global structure.

In order to act as a government in the budgetary and finance and economic field locally, you have got to know something about the globe. You have got to know something about the pressures that will fight you and will co-operate with you. That is tough, because governments do not always have friends in every single element of society.

There is an inherent thing in governments which I wish to bring out, and it is called the corruption of longevity, and this is the most insidious form of corruption there is. For 40 years in this province, we had a bland party that ran things, and they were not consciously corrupt. They were just corrupt by virtue of the fact that when you are in power too long, anything goes, and it seems all right because it worked last time. We have found that in Ottawa, with the party whose name shall not be mentioned, and in Ontario, and very often you find that there is an inherent corruption in longevity, so we need change.

Now a government comes into being and wishes to change things, and the previous administration changed the welfare system through the Transitions report, the Thomson report, and it is a very beautiful report. I have done some work with moneys from the Laidlaw Corp to look at this thing and to implement it. It does not matter what party, you see. It does not matter whether it is this party or that party, if you do an objective analysis of the realities of the economic situation, there will always come forward an economic truth, which is not necessarily a myth.

Adam Smith had two great expressions, only one of which is remembered. Adam Smith, the great Scottish economist, said that society is best served by the multitude of decisions made by people seeking their own ends, and then he said, "However, when businessmen of the same ilk come together, whether for pleasure or business, the consumer always suffers." So there are these two counterforces.

I hate labels. I do not want you to ask me what party I come from, what church I go to, what colour my skin is, or anything like that because we tend to listen to who is saying what is being said, rather than what is being said. I think that a government as new as this Ontario government needs to take the bull by the horns and -- what was the name of the golfer over the weekend? John Daly. He went for broke. He did not give a damn about the water, about the sand or about the distance. He just went for broke.

New governments have four to five years in which to make an impression on the permanence of change. It took the fellow in Saskatchewan who is interested in introducing medicare many years to do it. You cannot do these things in one year, so what governments do, they should try to incorporate into the structure of the economy and the society as permanent elements. Sometimes you need outside support and outside consultation for this. You get so busy running a government, whether you are on the government's side or the opposition's side or the fringe side that it is hard to do new thinking.

I think we need to hire the best brains to do a fast systems study of our medical system. There is a perfect example in both papers this morning. I get up at 5 and I read all the newspapers, and the doctors have been told to stop taking freebies. Well, that is going to cut the cost of medicare, and they are doing it before they are forced to because they recognize it is unseemly. Medicare could be reduced in costs by transferring the services so that low-cost services are given to low-cost needs. Do not put home-care patients in high-care beds. You need some of that as a new government.

Somehow you have to do something with the educational system. I work on the streets with kids in trouble with the law, drugs, prostitution, alcohol, homelessness, helplessness, low self-esteem, malnutrition, family dysfunction, physical violence, sexual violence, psychological violence. The educational system is not supposed to correct all these things, but some kind of educational system is needed to change things. The dropout thing is one of the problems.

Now, every time somebody screams against the government because of a deficit -- I want you to -- none of you are old enough to do this, damn it. In 1939, we had just been through the world's worst depression, and there was no money or welfare. There was no money for unemployment insurance. There was no money. But on September 3, the first shot was fired between Germany and Poland; by God, there was money for everything. Now, do not give me this crap about a deficit. Deficits are no problem. We solve them by inflation. So the governments pay them back with low-cost dollars. The deficits have never destroyed a country until inflation got too bad, as in Germany in 1923. Naturally, there has to be some control. If we need to develop high technology in this province to replace those jobs that have fled to countries where they can pollute to their hearts' content and rob their workers to their hearts' content, government and labour and management have to come together and develop a new infrastructure for making business viable, economically sound and develop new educational systems that prepare our people for those jobs.

I got into trouble at a golf club in Bracebridge last week when I asked the students from university who were serving behind the bar what the native confederation was. None of them knew. The manager came to see me on the first tee and said, "You shouldn't do that." I said, "Why not?" He said, "They don't even know what confederation means." There is lots to be done.

The Chair: Sir, there is time for one question per party, unless you want to go your own time out.

Dr Grassby: No, that is fine.

The Chair: We have about one minute per party so we will start off with the NDP.

Mr Sutherland: I certainly hope I look as youthful as you do when I hit my eighth decade, if I do hit an eighth decade. I just wanted to ask you about your focus on training and education. Could you give us some specific ideas of what we could implement that would help some of those people you deal with on a regular basis with your involvement with the Sudbury Social Agency Network.

Dr Grassby: There are two levels. First, the level of the dysfunctional child from a dysfunctional family who is an early dropout. What we do there is seek the network in the community that will support that child and will get him back into the educational system and give him the basics. You cannot think if you cannot read. You cannot assess if you cannot add. So that group needs the basics.

But what we need in the general education system is an entire new viewpoint being presented to the children. Why are there no damn girls in engineering and science? Because we have stereotyped who is a scientist and who is this and who is that. Somehow, starting with grades 7 and 8, and some of that is being done in this town by weeks at the university and weeks at the science centre and what have you, we must stimulate in the children in the educational system the understanding that they will never be a complete citizen or a wage earner of substance if they do not have an education. I am not talking only training. Education comes from the Latin word "educare," which is to lead out and grow and develop. Education is what to do and training is how to do it. So we need both.

So in answer to your question, the kids on the street need the basic training. The kids who are going to stay in school need an expanding of their horizons so they see they are a complete human entity, not just a job seeker and not just a philosopher.

Mr McLean: Your brief this morning has made this trip worth while to me. This is the most excellent brief that I have heard and it is coming right directly to us. I have a question, and you are going to be surprised at the question because I have not heard you mention it in your brief. How is Metropolitan Toronto going to get rid of its garbage?

Dr Grassby: Put it in the SkyDome. They are both the same quality.

The Chair: Or Mr Kwinter. One question, a short one. No preamble.

Mr Kwinter: As a matter of fact, I do not have a question. I just wanted to comment that I would love to spend an evening discussing this with you. Unfortunately, I do not have time to ask you the questions that I would like to ask you, but thank you very much for your presentation.

The Chair: The next group would be the Elk Lake and District Chamber of Commerce. Would they come forward please. Since that group is not here yet, how about the Northern Ontario Regional Co-operative Housing Association? We have not got them either. How about Laurentian University?

This committee will take a recess for 10 minutes, and the gentleman who just made his presentation, maybe you can catch him out in the hall.

The committee recessed at 1002.

1012

NORTHERN ONTARIO REGIONAL CO-OPERATIVE HOUSING ASSOCIATION

The Chair: Since the Elk Lake and District Chamber of Commerce is not here, what we will do is ask the Northern Ontario Regional Co-operative Housing Association to come forward for its presentation. For the purposes of Hansard, would you identify yourself. Welcome.

Ms Wearing: My name is Honor Wearing and I am here for the Northern Ontario Regional Co-operative Housing Association. Next to me is Cameron Hopkins who is the secretary of our association.

The Chair: I will explain a little bit of the format. We have half an hour for your presentation and question and answer period. After your presentation has been completed, the remaining time up to the half an hour will be split among the three parties. You are at liberty to start now.

Ms Wearing: The Northern Ontario Regional Co-operative Housing Association -- NORCHA, as we are known -- is a federation of 18 housing co-operatives based in northern Ontario and representing more than 750 units of affordable housing. We exist to provide education and support services to our members and to give the co-operative housing movement in the north a voice on housing-related issues. A very considerable portion of our member families is in receipt of rent-geared-to-income assistance -- up to 75% in the newer federal-provincial co-ops -- and is very sensitive to changes in government policy in the social service areas. We are members of the Co-operative Housing Association of Ontario and the Co-operative Housing Federation of Canada.

Our general interest: Our interest in the 1991-92 budget arises from our fundamental belief that access to affordable housing is a social right and that no member of society should have his or her security of tenure threatened by economic eviction. We see the availability of safe, secure and affordable housing as central to the creation of healthy communities and essential to the physical and emotional wellbeing of our citizens. In short, we are concerned not only with the roof over people's heads but with the economic and social health of the co-operative communities we represent. We are concerned too with the plight of the many thousands of people without safe, secure, affordable housing and we argue that addressing their housing needs should be central to the social policy of any government. To be penny wise on housing is to be pound foolish in budgets for generations to come, as we will assert later.

Furthermore, we view the budget from the standpoint of communities in northern Ontario which have endured a century of neglect at the hands of various governments in Ottawa and Queen's Park. The consequences of having a resource-based economy and one-industry towns has been a never-ending cycle of boom and bust and chronic unemployment running ahead of the provincial average. This has produced an increased demand for services, including housing, which have often been found to be lacking. To address housing needs in the north is to address other needs as well.

Finally, we see the potential economic effects of the budget in terms of economic stimulation, job creation and retraining programs in all of Ontario but particularly in the north. In view of the urgent need for economic diversification of the northern economy, we appreciate the attention given to housing and job creation generally in this budget. In this brief we will attempt to address the social and economic impact the budget will have in northern Ontario.

The need for housing and social services: According to Canada Mortgage and Housing Corp figures, the apartment vacancy rate in Sudbury has been consistently below 1% during the past three years, significantly below the 3% which is the optimum vacancy rate required to maintain market equilibrium. In fact, the supply of rental housing is so tight that a recent report has concluded that 27,000 units of additional rental housing are needed immediately to raise Ontario's vacancy rate to 3%. This is a pretty clear indication of the failure of the market to address the need for supply of an essential commodity. On the affordability side we have a serious crisis. In Sudbury alone, 35% of tenants spend in excess of 30% of their income on rent. This and other data compiled by a recent study of the social service research and advisory group document the extent of the affordability crisis experienced by low- and moderate-income earners in the Sudbury basin. We are aware the crisis is worse in many other cities, including Toronto.

1020

Numerous studies quoted in the Social Service Research Advisory Group report have documented the link between affordable housing and health. Surely it is not necessary to reiterate the long-standing conclusions that unemployment and low income contribute directly to inadequate housing, nutrition and personal health. The Ontario Ministry of Health's Panel on Health Goals for Ontario reported in 1987 that government action, including provision of affordable housing, is required to reduce risks to health. It is surely obvious that unhealthy citizens cannot hold a job and pay taxes and that unhealthy citizens will produce a drain on the resources of the health care system.

Moreover, the Ontario government's review of the social service system led to the publication of Transitions: Report of the Social Assistance Review Committee, in which housing was described as "one of the most critical problems facing social assistance recipients and the working poor." The report made numerous recommendations regarding the need for speedy action to address the housing needs of the poor. We have no doubt that no MPP spends 70% of his or her salary on housing or has any need to make a weekly trip to a food bank. Many of the members we represent did just that before they found their way into a housing co-op.

We are acutely aware that the present recession, exacerbated by high interest rates and free trade, is responsible for a dramatic increase in unemployment. This is hardly the fault of either this Ontario government or its predecessor, but as incomes have fallen, the need for affordable housing, as well as social assistance and other social services, has dramatically risen. Furthermore, the tax base has been seriously eroded and revenues have declined. The cuts in federal transfer payments, amounting to some $1.6 billion, are particularly reprehensible in view of the federal role in causing the economic crisis.

The Ontario budget: We wish to commend the Ontario government for resisting pressures to cut and slash social programs and investment in social capital and for its expression of confidence in the Ontario economy and the Ontario people. The job creation programs, the proposed improvements to the infrastructure of the province and the emphasis on skills training are all of immense importance to low- and moderate-income earners, the single parents, the disabled and the senior citizens who make up most of our membership. So is the budget commitment to make sure that the cost of economic adjustments are not borne by those least able to shoulder the burden. Thus refusing to pass on the consequences of the $1.6-billion cut in federal social spending to the consumers of municipal, health and social services was a courageous and sensible response.

We particularly wish to address the housing initiatives in the budget. The budget commits the province to producing 10,000 units of non-profit housing beyond existing programs as well as providing funding for the remaining units in the 30,000 Homes How program announced in the 1988 budget. Indeed, most of the 39% increase in the housing budget relates to the subsidy requirements of the Homes Now program.

This strong commitment to social housing will enable some 20,000 families to move into non-profit housing, including co-op housing, in the next 12 months. This will begin to address the needs of the 100,000 families on non-profit waiting lists in Ontario, not to mention the 500,000 Ontario families which pay more than 30% of their income for rent.

The social and economic effects of this spending in social housing are enormous.

First of all, we object to the disparaging designation of social housing as subsidized. All housing in this country is subsidized, from the tax breaks for investors in rental accommodation to tax exemption for capital gains on sale of residential property to supply-side subsidies for non-profit housing. Second, an expenditure on housing, like an expenditure on a school or a municipal water and sewer system, is not government consumption. It is, rather, a public investment in social capital which will provide a long service to the community in meeting social needs. We understand very well that when we take out a mortgage to buy a house, it is quite different from borrowing to finance a vacation. The house is an investment with owner equity; the holiday is not.

Third, the creation of co-operative mixed-income communities, which are the ones we know best, provides a supportive environment for residents that reduces the need for other kinds of social spending and encourages personal growth and skills development. Furthermore, the volunteer participation produces operational savings of up to 25% as compared with other forms of social housing.

Fourth, since little new rental housing is being built outside the non-profit sector, the construction of 10,000 units of new housing will create some 20,000 jobs in construction and thousands in the manufacture of lumber, bricks and siding, not to mention flooring, roofing, appliances and so on. Beyond that are economic multiplier effects in the wider community and service industries. The economic stimulus is widespread in Ontario and will have a significant effect on lumber-producing communities in the north.

Fifth, the fact that land prices and interest rates have fallen with the recession makes this an ideal time to initiate new construction since dollars will go further and the public purse will benefit for many years to come.

Finally, to fail to invest in social housing and particularly co-op housing is to ensure that the social cost of poverty and homelessness is paid again and again by the people of Ontario in health care costs, in low wages and in the costs of despair, including substance abuse, crime and family violence. If we want healthy communities, the provision of safe, secure, affordable housing is a good place to start.

The alternative: Those who criticize the budget have some responsibility to tell us what their strategy is for deficit reduction and economic recovery. There can be no doubt that keeping the deficit at $3 billion would require dramatic cuts in college and university enrolment, elementary and secondary school classrooms, hospital beds, public health budgets and home care programs for seniors and people with disabilities. There would be cuts in social assistance and family benefits, prescription drug programs for seniors and those on family benefits, legal aid programs and highway maintenance.

Which programs would the critics cut? A high proportion of our members are living at the poverty line. They would like to know if the opposition wants to cut their family benefits or drug plan. What about health care and education? Should it be harder for our grandfathers to get a gallbladder operation? Should it be harder to get remedial reading assistance for the learning-disabled? Should we not sand and salt northern Ontario highways next winter?

What jobs in the public service should be slashed, thereby adding to the unemployment and driving up the demand for social services without the resources to deliver them? What municipalities should have their capital grants cut? Which of the homeless should be told to wait until the recession is over to get an affordable place to live? Would business people prefer that the social assistance payments in this budget and the purchase of cement, lumber, appliances and construction services required for housing not be reflected in the ringing of their own cash registers in their own businesses? Or if they do not want to cut the services, would they entertain a surcharge on income tax for high-income earners to fight the deficit?

We are anxious to know the answers to these questions because our members have a right to know if anyone close to the levers of power is keen to threaten their social and economic security. When we get the answers, we will be happy to share them with our members and the wider community.

In conclusion, we do not see in this budget everything we would like. The waiting list for social housing is still very long. But on balance, this is a responsible and forward-looking budget that provides support for society's most vulnerable members, which protects municipal, health and education services and which invests in infrastructure and skills development in a way which leaves Ontario well placed to leave the way out of the recession.

1030

It seems to us that a per capita deficit of just over $1,000 is absurdly small by national or international standards. The Ontario combined deficit requires 10 cents on the dollar to service; the federal debt more than 30. Moreover, any family would be willing to invest an average of $1,000 per person to build family assets -- for example, a house -- to upgrade skills to be more productive or to get through a winter of unemployment, if a job were looming in the spring.

Borrowing by individuals is a way of life in North America essential to keeping the economy going. How borrowing by the state to buy the same kinds of goods with roughly the same economic effect should be regarded as a bad thing is quite beyond our ability to understand. We believe it is this Ontario budget and not the federal budget that should be the model for fighting the recession, and we commend the Ontario government for it.

I will just read the addendum underneath the references. A quote from the Social Service Research and Advisory Group study captures the essence of our view on the importance of housing in economic and social development and hence our reasons for promoting co-op housing as an economically and socially viable approach to building communities:

"Emotional wellbeing is the first achievement necessary to overcome physical and economic barriers. While permanent housing may not ensure emotional wellbeing, a lack of permanent housing does ensure that emotional wellbeing is a persistently evasive goal. This in turn results in a constant, if not increased, demand on all support services such as food banks, general welfare assistance, personal counselling for mental health and substance abuse treatment, employment programs and so on.

"Housing is the foundation from where people build their lives and their communities. A community which hopes to maximize its social and economic development must ensure adequate and affordable housing for all its citizens."

Mr Kwinter: I want to thank you for your presentation and I want to make a comment. There is a common misconception that I have noticed through a lot of these presentations that we are Ontarians and we are totally separate from Canadians, and there is always a comparison saying: "The federal debt is 30 cents of every dollar while Ontario is only 10 cents of every dollar and that's fabulous. Look at how great we're doing." We are both Canadians and Ontarians. That 30-cent debt is ours and the 10-cent debt is ours. You cannot compare them to say, "Look at how poorly they're doing; look at how well we're doing."

It just means that 40 cents of every dollar is now going to pay the debt of us as Canadians, not us as Ontarians. We have to share both debts. I just want to make that clear because I keep hearing all these comments, "Look how well we're doing compared to the federal government." We are not doing any better. We are the ones who are paying the tax. Every one of us is paying both of them and it is the cumulative effect that is really the crusher.

Mrs Sullivan: I want to make a comment about the general approach of your brief, in which I was quite disappointed because I would like to have known more about the co-operative housing initiatives in northern Ontario that you are specifically dealing with and the problems you are facing rather than having what we hear from the umbrella Co-operative Housing Association of Ontario. We are all familiar with the co-operative housing movement and many of us are very active in supporting co-op housing in our own communities. I think there are many areas we would have liked to hear you address rather than have really a kind of partisan note relating to the budget.

For example, you have not talked about the approvals process and the necessity for changing that. Is that a factor here? You have not talked about the deficiencies in the budget in relationship to the expansion of sewage capacity. Is that a factor here? You have not talked about the number of units that are being built as a result of this budget that will be coming on stream in your own communities, and what particular problems you are facing that the budget does not meet. Those were the kinds of things that would have been very useful for this committee to hear, as we take information back to Queen's Park.

We do not have an awful lot of time, but I hope, in the minute or so that I have left for my response, that you can answer those.

Mr Hopkins: Yes, I could make a comment or two on that. I would just like to say that as a federation representing northern Ontario we are not divorced from Ontario as a whole. Certainly we are concerned about the number of allocations that come to northern Ontario. As a matter of fact, under Homes Now and federal-provincial housing in the last year we are talking about roughly 1,600 units, of which only approximately 300 were co-op. There are a number of things about the allocations that we thought would be much more appropriately directed to the Ministry of Housing rather than in a budget discussion, and we have done precisely that. Of the 10,000 units, we might very well hope that as many as 1,000 would come to northern Ontario to redress some of the imbalances of the past.

I would also like to note that a 30-cent contribution to the deficit on the federal base budget and a 10-cent deficit on the much smaller Ontario base budget does not add up to 40 cents on the tax dollar. It adds up to something in the low thirties. I think your point that we are all responsible is fair, but we are dealing with different areas of responsibility by jurisdiction and with significantly different tax bases and abilities to pay.

Ms M. Ward: Thank you for your brief. I was interested in a comment on page 4, where you point out the fact that the land prices and interest rates have fallen with the recession, making this an ideal time to initiate new construction since dollars will go further and that the public purse will benefit for many years to come. I think that is a good thing to have pointed out. I think it also applies to other areas, aside from the housing initiatives: the anti-recession program and the funds that came to northern Ontario generally used for constuction and so on. Again, more can be done with that money at this time.

I take it the housing situation in Sudbury is quite bad. You say there is a vacancy rate below 1%. I was here in winter for the hearings on Bill 4 on rent control. Do you think Sudbury is in quite a bad situation with regard to housing?

Ms Wearing: Yes, apparently it is about half a per cent right now, which is crisis proportions.

Ms M. Ward: How do you feel the situation would be if there were not this funding in the budget not only for housing but for the anti-recession projects which have maintained employment?

Ms Wearing: It would definitely be a lot worse.

Ms M. Ward: Did Norm have a question?

Mr Jamison: Yes, the question I have deals with the recession and the effect of it on the building and construction of co-op units and housing in general. Do you have any comments on the effects of being proactive in the housing?

Ms Wearing: I am not sure exactly what you are asking.

Mr Jamison: The numbers of units announced have increased, probably not the numbers we would like, but certainly there has been an increase in allocation. Connected with the economy and the recession, do you feel that that is a positive effect?

Mr Hopkins: I think we would say it is a particularly positive effect because significant components of housing are produced in northern Ontario, lumber, of course, being the obvious case. Moreover, it must be said that all facets of construction, of housing, have perhaps more significant economic stimulus value than almost any other kind of government expenditure. Obviously the construction jobs are important, the manufacture of the components such as the lumber and the roofing and the cement and all the rest of it. There is the appliance manufacturer and there is the local business activity that goes on. The effect is distributed throughout the province, and in our view this is a very important initiative. Even though we would have been happier with 20,000 units, we certainly appreciate the thrust and we know very well that the expenditure is being made not only to meet a social need but also because of the economic stimulus that comes from it.

1040

Mr McLean: You say, "We wish to commend the Ontario government for resisting pressures to cut and slash social programs." Can you tell me what news release there is or who has said they want to slash social programs?

Mr Hopkins: The federal government has put enormous pressure on all provincial governments to hold the line on spending. To imagine that you can hold the line on spending or have zero deficit without slashing social programs would be, I should say, an exercise in fantasy.

Mr McLean: I thought you were referring to somebody in Ontario who was suggesting that, because you had indicated you were talking about whether the business people here would prefer to have their cash registers not ringing because they want social programs slashed.

Mr Hopkins: I think perhaps the chamber of commerce should address that. I have not heard the chamber of commerce brief.

Mr McLean: But have you heard anybody in Ontario say that social programs should be slashed?

Mr Hopkins: I think the way it has been put is that there has been enormous criticism clearly from the opposition parties and from business for running up a deficit of $10 billion. I only say to you that most of the deficit is reflected in health, education and municipal services spending. You cannot hold the line --

Mr McLean: No, you are not answering my question, you see? It is all right for you to say that, but I want you to tell me and show me where it has been said that social programs are going to be cut. I do not know of anybody of any opposition party who has said that.

Mr McLean: The civil service got a 5.7% increase and some got an 11% increase. We have people at food banks, we have the poor people out there who are needing help. Would you sooner help the poor people or would you sooner give the civil servants an increase?

Mr Hopkins: I have no hesitation in saying that ordinary people who are doing a job ought to receive reasonable remuneration for the job they are doing. It seemed to me, from news reports I read, that the 5% increase has gone to people at the lower end of the scale and that the higher increases have gone to people at the higher end of the scale. But I confess to not being entirely sure about how that is distributed.

I am not prepared to argue; our organization is not prepared to argue that public servants should have a freeze on wages. If they are doing a job they should be paid accordingly. But quite clearly it is not either/or. We would prefer to see an end to food banks. We would prefer to see full employment. I think it is fair to say that if the approach that has been taken in this budget wins some plaudits from the Conference Board of Canada, it cannot be entirely out to lunch.

The Chair: Thank you for your appearance here at the committee.

DEREK WILKINSON

The Chair: We will call on Mr Derek Wilkinson, Laurentian University, to come forward now, and make your presentation to the standing committee on finance and economic affairs. Welcome, sir, and you have one half-hour.

Dr Wilkinson: You are 15 minutes early. Does this mean I get 45 minutes?

The Chair: Are you representing yourself or the university? The research staff would like to know.

Dr Wilkinson: I am representing myself.

The Chair: Okay, you have half an hour, and out of that half an hour, at the end of your presentation, leave some time for the three parties to question your presentation, please.

Dr Wilkinson: I will try not to take it all.

The reason I asked to speak to the standing committee on finance and economic affairs is that I have been reading some criticisms of the current budget in the press. In particular, some authors have declaimed the fact that it is a deficit budget. I should like to add my voice to those who support this budget and oppose changing it. I would particularly oppose an attempt to push through a balanced budget without regard to the social consequences.

My remarks will be based primarily on three claims. First, it is important to cushion the blow for those who are unemployed by maintaining basic social services. Second, expenditures on education and health are very appropriate, especially in a recession. Third, progress towards equity should not be compromised. The fact that these expenditures at the same time have a beneficial economic effect is an underlying and linking theme.

Economic benefits: Perhaps the most important aspect of the context which applies to the budget is the fact that Ontario is experiencing a recession. A number of factories, businesses, mines etc, are laying off workers, reducing output and in many cases closing or moving to the United States. Some aspects of this appear to be caused by free trade. Some aspects appear to be caused by the GST restricting individuals' spending. The high interest rates which have been maintained by the Bank of Canada may also play some role. The end result is a significant constriction of economic activity.

The tragedy is that the federal government has been maintaining a much higher deficit with spending on programs which do little for the economy. Grants to industries for modernization of equipment often lead to companies in these industries buying capital equipment abroad and hiring less-skilled workers at home.

In this context, the Ontario budget also makes good economic sense in the short run. James Frank, chief economist of the Conference Board of Canada states: "A tighter fiscal plan would have led to a significant delay in the recovery and contributed to further increases in umemployment, bankruptcies and lost output."

Indeed, the Keynesian economic policies of this government are not substantially different from those followed by Franklin Delano Roosevelt, which helped pull America out of the Depression. The budget is economically rational; it is also socially responsible.

Basic social services: The major point missed by the critics is the effect of this recession on people. The recession has caused a great increase in unemployment. The rates of unemployment can be obtained from economists; what I want to emphasize is the real nature of this. Almost everyone I know has relatives who are unemployed; two of my brothers are currently unemployed; many of my students who have recently graduated are unemployed. Others are employed in jobs which they could have obtained with no secondary education at all. This recession means that significant numbers of Ontarians are suffering in a very real way.

Dr Patrick Burman, a sociologist at University of Western Ontario, has done significant research on unemployed people's activities. He demonstrated that for the first year and a half many unemployed people work very hard at trying to get a job. After a year and a half, on average, they begin to lose their optimism and start to become resigned. They lose their self-esteem and their sense of dignity; they come to blame themselves.

1050

People who are put through this crisis situation often experience greater difficulties with their health. Studies have shown increased cigarette and alcohol consumption, greater probability of disability, more distressed mental health, etc. Some research has even shown that the mere threat of unemployment causes reduced psychological wellbeing. The health problems consequently lead to increases in health care costs.

Unemployment also leads to family stress. Burman found that relationships within the family suffer as the family becomes responsible for bearing the economic burden. Children will suffer because of difficulties the family faces, if indeed the family remains together. We predict that the first response for children will be declining school grades and a greater propensity to drop out of school. The long term may bring higher delinquency rates and hence greater costs in law enforcement, as well as an increased need for social workers in schools. The reality is that these social costs are not often measured.

I am currently engaged with another sociology professor and two economics professors at Laurentian in a study to determine exactly how these factors intermingle in northern Ontario. Our study uses Elliot Lake as an instance to look at the combined economic and social effects of being laid off. It will also look at the effects of various government assistance efforts. I have appended a two-page general description of our project to the written presentation in case you would like more details. Our hope is that the research will uncover the most effective strategies for delivering assistance.

If it is important to minimize the social costs, to cushion the effects, it is important to do proper research on intervention processes. If the main aim is to balance the budget no matter what results ensue, then such research is pointless. We do not prioritize balancing the budget over cushioning the effects of unemployment and economic crisis because budget-balancing may be much more expensive in the long run. Once all the indirect consequences of the economic crisis accumulate, they may entail a greater deficit than would a tight-fisted, narrow-minded, Uncle Scrooge conservatism.

We can show this by counterposing two hypothetical questions. How difficult could it be to recover from the financial costs after the recession is over? How difficult could it be to recover from the social costs after the recession is over? The obvious answer is that a financial deficit is much easier to recover from than is a social deficit; thus, the importance of the government's present policy of minimizing the social costs. It makes good long-run sense.

Education and health: Educational spending must be maintained. When the recession is over, it is the education of the workforce that will determine how well development advances. Apart from the regular multiplier effect on the demand for goods and services in an area, education contributes to greater employee productivity in the future. And the best time to train people is during times of recession when people are not otherwise in demand. In times of expansion, industry's demand for labour is quite high. Therefore, to avoid competing with industries, it is best to invest more in training during periods of recession. The government's program to expand and maintain services is particularly appropriate in its emphasis on maintaining spending on education.

The other important aspect of education is that it builds hope. It counteracts the tendency towards despair through engaging people in a process of development, a social process through which they become more empowered and knowledgeable about their citizenship rights. This hope can help people survive through difficult times.

The difficulty we have experienced getting funding for our project to employ interviewers and coders to document the processes of adjustment to layoffs leads me to a moderate criticism. There appears to be no mechanism in the government, with this budget, for long-term analysis of the problems Ontarians will face, no emphasis on research. But this is something which should be important for a government which wants to ensure the long-run prosperity of working families. Somehow there should be some funds allocated for socially relevant, long-term research which is not part of the regular bureaucratic process aimed at immediate problems.

Some of the budget deficit is based on spending for health. This has been a growing problem for many governments, not just the Ontario government. Here, the agreement limiting doctors' salaries through OHIP is a landmark in beginning to establish control over expenses. What the population wants is not health cuts, but the means of controlling the growth of health expenditures. And this is a problem which the government has been facing.

Equity: Projects which create social equity are also important. A significant aspect of the budget is funding for employment equity. Provision of increased day care funding is an important accompaniment. Some would say there is no point proceeding with equity during a recession: Wait until good times when it can be achieved at no expense. But it is important to continue meaningful progress towards equity in the worst of times. Basic citizenship rights which have been denied in the past, particularly for women, should not have to await governmental surpluses. Women deserve equality now, and this government should be applauded for taking positive steps towards that equality.

Immediate results of the policy at Laurentian: Just for the record, I would like to point out that the opinions I express are mine and not those of the university. The job creation capital development program in this budget affecting Laurentian University combines social support, educational development and progress towards equity.

The almost $2 million contributed by the government as part of job creation capital projects will provide office space. Both research and teaching have suffered greatly from lack of space at Laurentian. In addition, facilities are being provided for the disabled in the form of appropriate elevators and washrooms, a long-overdue development. Support for the development of a francophone day care centre at the university is also an important step.

Conclusion: The bottom line for budget critics is what should be cut. Food and housing for the unemployed? Education and health for the majority? Or equity for women, the handicapped and minorities? This budget does not cut these. It stimulates demand and maintains hope, through spending on job creation and educational programs.

I would like to thank you for giving the public the opportunity to become involved in the political process and to give more input than they are usually allowed. But please do not change the overall thrust of the budget. Do not opt for a social deficit merely to balance the budget. Think of many people at the bottom who need the social programs. They need these programs to survive, to keep their dignity and to keep skills intact, looking towards the end of this recession.

Mr Sutherland: Thank you, Dr Wilkinson, for your presentation. I am almost tempted to pass for the time being and let Mr Kwinter come up with his response to the Mr Frank comment, but I will not do that.

You talked about critics saying where the cuts should be. We heard Mr McLean ask the last witness who in Ontario had said that there should be cuts to the programs. It is interesting to note that the opposition parties have been what I would call very coy on that, saying that those should not be cut.

But they have also been very critical of the high deficit, and when I think of the third party and the tax fighter himself, Mr Harris, not wanting to raise taxes -- and certainly good economic theory says you should not raise taxes, particularly business taxes, which we have not done in this budget -- I really wonder if the only logical conclusion would be that they are suggesting cutting services as the way of balancing the budget. I would hope they will at some point elaborate on how they would have operated the budget, whether they would have had the deficit or whether they would have cut services, or would they have actually raised taxes?

We have you here today in terms of sociological perspective and what impact a recession has. I think what you are saying is that if we had not maintained the services, the longer people go without a job or are laid off, the more their self-esteem goes down, and the more they lose their confidence, and the longer it is going to take them to get back into the job cycle, and the more services they are going to use. I think that is really what we want to hear out of these hearings, what the impact of the recession has been on people and what that means for the longer term in terms of taking advantage of the recovery.

I want to pick up on your point about training. You express some concerns. Give us an honest evaluation of the education and training programs in this budget? Have we done enough. Should more have been done?

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Dr Wilkinson: Oh, I am not unhappy with the education and training programs in this budget. No, given the circumstances of the recession, there is some necessity to limit expenditures and I think the budget has preserved allocations for education. The part that I added was something on provision for research for general social problems, which does not really come under education and training.

Mr Sutherland: In your research, have you come across other types of programs that are particularly effective and needed in dealing with the type of impact a recession and layoffs have on people? If you have, can you give us some idea what types of programs they are and what issues they need to focus on?

Dr Wilkinson: No, but I think educational upgrading is quite important. A lot of the people in Elliot Lake, as far as we can see, are actually going back for educational upgrading and will go on.

Ms M. Ward: One particular comment you made -- I was walking back from picking up a coffee -- it really hit me and I think it is something we should engrave in our minds. You said it is easier to recover from a financial deficit than from a social deficit. I am not sure if those were your exact words.

Dr Wilkinson: Yes, exactly.

Ms M. Ward: I think that is very relevant and we should remember it. I certainly will try. When you were mentioning the conference board I just thought we might suggest that we speak of Informetrica, instead because the witnesses who are referencing the conference board are getting a big response out of the opposition. Mr McCracken also was quite complimentary about the budget. That is an alternative reference for people to use.

Mr McLean: I appreciate your brief. It was very well done and I want to say that I do not think anybody has been calling for a balanced budget. I do not know anybody who does. It would not matter which government was in; we would be in the position of a deficit. But the question I have -- and you touched on it briefly -- is about skills training.

It is very important to me because it is an opportune time to be training people for their skills. I have not seen anything in the budget that is going to help that. Have you? That is the problem I have. You indicate that it is important and it does not directly reflect that it is going to take place until a few years down the road. What are your comments with regard to skills training?

Dr Wilkinson: I am not sure what you mean by skills training, but it seems to me that general education is what is needed in our current social position, because what happens is that people will not likely have the same job over their lifetime, so they will have to have more general abilities. Some of the skills training programs are focused narrowly. I am not saying I am opposed to skills training but I think it would be wrong to say, "Let's just train people specifically for these jobs," because those jobs may not be there after another decade. It may be different kinds of economic circumstances or different kinds of technological circumstances.

It is important to give people a general education so that they can teach themselves. So I support education in general rather than specific skills training, but I do think, as you say, it is important to maintain the training for skills that are going to be --

Mr McLean: You touched on the doctors' salaries being capped. What else in the health field would you do -- it is a third of our budget -- to try to hold the line on health spending, so to speak? What other avenue? There is a hospital in Ontario now, and I am not advocating it is right, but when people leave the hospital and they have pills to take home, they are charging them for those pills. That is a kind of service -- I do not know, I guess they could not give them any, but give them a prescription so that they would go and buy them. They are giving them from the drugstores in the hospital and charging them for them. What avenue would you see to try to control some of the spending in health care?

Dr Wilkinson: I agree. As I said, a lot of governments are having trouble with health care. I think it is quite a difficult problem. My area is actually sociology of education so I do not know a lot about health care. I agree that expenses should be limited, but I really am not sure how to do it.

Mr McLean: I enjoyed your brief. I agreed with most of it but not quite all.

Mr Kwinter: You just happen to be the first opportunity I have had to talk about James Frank. I do not want you to think this in any way reflects on you, but it is kind of interesting in that virtually every single person who has come before this committee, who wants to quote an expert that is supportive of it, refers to James Frank.

I do not know whether you have seen this or not, but this was a chart that appeared in the Financial Times. It says, "How Well Economists Called the Shots." It evaluated the top 15 economists in Canada. They have taken a look at their record over the years and they said, "Here's how accurate they are." When they list them, number 15, the last guy on the list, is James Frank. The year before, he was 13th on the list, so he is getting better or worse, depending on how you look at it. But out of 15 last year, he was number 15. He was the worst projector of what the economy was going to do. I wanted to put that into the record.

Dr Wilkinson: Yes, but this is not Playboy. This is the Financial Times, right, that is reading this?

Mr Kwinter: This is the Financial Times.

Dr Wilkinson: They have to pick out particular things. I would not want to defend --

Mr Kwinter: No, what they have done is they have rated across the whole sector of the economy all of these things and they have said, "Here is how these people performed in their projections."

I will give an example. When we had our budget hearings, we brought in a man, Mr deBever, who we thought had a good handle on this. Last year, he was third out of 15 and this year he is fourth out of 15. He is still up around the same level. No one ever quotes him. They always quote James Frank. The point I just want to make is that of the 15 top economists, he is number 15. I just wanted to put that on the record.

Dr Wilkinson: Can I be honest and add another answer to that?

Mr Kwinter: You do not have to apologize for him.

Dr Wilkinson: I would like to say I actually thought about excising that. I thought it was not a good thing for me to quote because many times in the past I have disagreed with what the Conference Board of Canada has said. So it looks bad if I just say here -- because I did not want you to listen to me just because it was the conference board. I actually think it is --

Mr Kwinter: You do not have to apologize for him.

Mr Phillips: Just one little comment on the OMA agreement, by the way, just for a point of information. Rather than controlling it, it is now in the hands of an independent arbitrator. My own judgement is that the government has completely lost control of it, and it now has nothing to do with the government. The arbitrator will make that decision in the future. That is just a point of information for you.

Through this exercise, my own feeling on all of this is that we are all listening to forecasters. We will only know a year from now -- I think a year, maybe a little bit longer -- whether the budget is good or bad.

I am going to keep all these briefs. That is why I liked your quoting the Conference Board of Canada. I think you may live to regret the conference board.

But my question to you really is this. I think most of the critics of the budget have been concerned about the revenue side of the budget, the economic activity. All of our budgets are the same. We get some money and we spend some money. Some years we spend more than we make, some years, hopefully, we spend less than we make. I guess you are saying to us, "Listen, I think this is the right budget to ensure the economic future of this province." That surprised me a little bit, because the budget called for an unemployment rate of 10% next year. It calls, you say, for a Keynesian theory, but it calls for deficits ad infinitum of $8 billion to $10 billion. It is not a Keynesian budget of surpluses and deficits. A year from now, you are saying to us, we will come back here and you believe this budget will have been the budget to generate the right economic activity to ensure wellbeing in the future. That is the concern of our party, I know, and I suspect of the third party, but you are convinced this budget will get the economy of Ontario going. If that is the case, what would you expect a year from now in terms of things like unemployment and deficits?

Dr Wilkinson: Maybe I did not express myself very well. I do not think that this budget will get the economy going. I think, as someone said earlier about the 30 cents for the federal government, that we are part of Canada, we are part of North America and we are in a free trade agreement. A government budget is not the only thing that affects our economy. There are many other things that are going on. So one year from now, I cannot say that there will be a change in this.

What I am saying is that I think the budget, the way it is done in terms of the deficit, is doing the kinds of things which are likely to be successful if there are things which can be successful. Maybe there are not. I am not very happy about what I expect to see next year. I have seen a lot of industries close which I did not want to leave Ontario or to leave Canada. I do not know what can happen on that.

The Chair: Thank you very much for appearing before this committee.

Mr Sutherland: Mr Chair, just before we continue, I was wondering if all the committee members could have a copy of this article that was referred to on the rating of the economists.

The Chair: Okay, fine. I will see that the clerk copies it.

I would like to note that the Elk Lake and District Chamber of Commerce had the wrong date on their calendar, so they are not appearing today. What we will do is ask the Thêatre du Nouvelle Ontario, if they happen to be present right now, for their presentation. Since we wind up with the group that is on for 11:30, this committee will recess for 20 minutes until 11:30.

The committee recessed at 1113.

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The Chair: I would like to inform the committee that the clerk has just checked with the last group, the Thêatre du Nouvelle Ontario, and they are not going to be appearing. So this committee will recess until 1 o'clock.

Mr Sutherland: Just before we recess, I would like to make a couple of comments on this chart that Mr Kwinter referred to. Mr Kwinter suggested that somehow, because Mr Frank was 15th on the list, we should not accept his arguments as being credible. Remember, this is the top 15 overall, and we know there are far more than 15 economists in the country, so I think we should look at it as a positive sign that Mr Frank is on the top-15 list in the country and not so much the fact that he is ranked 15th.

The Chair: Mr Kwinter, would you like to reply?

Mr Kwinter: Every single person who comes forward, if he quotes any economist, has been quoting James Frank. My only concern is that, when you consider that of the top 15 economists he is 15th, why are they not quoting anyone else? Why not quote some of the other economists, who are critical? That was my only point. If he had appeared as number 1, I can assure you that you would be saying: "Take a look at this. This guy is number 1." The fact that he is number 15, you are saying, "But after all, he's still in the top 15." That is fine. I have no quarrel with that. I just happened to come across this by sheer accident. I looked at it and I said: "Now, isn't that interesting? Of the top 15, he is 15th." That was all.

Mr McLean: The interesting point of it all is that the government side never had that at all; it had to come from the opposition.

The Chair: We are officially recessed now.

The committee recessed at 1135.

AFTERNOON SITTING

The committee resumed at 1303.

IAIN MACDONALD

The Chair: We will resume our budget hearings at the standing committee on finance and economic affairs. The first group we would like to call is the Manitoulin Health and Social Services Advisory Committee. Would you please identify yourself for Hansard. You have one half-hour. Make your presentation and leave some time at the end for questions and answers of the three parties. The three parties will wind up dividing the time equally. I welcome you to this committee. We will be waiting for your brief.

Mr Macdonald: My name is Iain Macdonald. I have the spelling on copies of my presentation so that Hansard can get that right. The part of Scotland I was born in seemed to have its own variations of spelling both Iain and Macdonald, so I will leave that for the record to clarify.

I was tempted not to come because while I chair a committee which is important to the life of Manitoulin Island, I think my remarks are mainly personal. I thought also compassionately, being a minister, of what kind of mind-numbing experience this must get to be for you to have to listen to everybody. But when I reflected on it, I thought, what the heck, I am a citizen and this is what you are here to do. So let me extend my personal welcome to you to rainbow country and say only that while Sudbury is a fine city in which to gather for these hearings, what a pity it is that we could not have provided you the wonderful hospitality of Manitoulin Island today.

Mr Sutherland: That would have been a good place to go.

Mr Macdonald: I bear Sudbury no grudge in this, nor speak I with envy, but I am bound to observe that your own wellbeing would have been immeasurably enhanced by the beautiful, serene surroundings of our island. Perhaps you will have the good fortune to visit us there in the near future.

The Manitoulin Health and Social Services Advisory Committee comprises consumers, providers and elected municipal representatives and meets monthly to discuss health and social service issues affecting Manitoulin district. The committee has a reporting relationship with the Manitoulin Municipal Association and the Manitoulin-Sudbury District Health Council, and with the Ministry of Community and Social Services for seniors programs.

The committee has not discussed the provincial budget as such, so I have no resolution from it to convey to you, nor indeed has it directed me to make any particular submission to you. My comments today are accordingly personal, albeit enriched by my experience with the committee.

I appear today to commend the Ontario budget but not to extol it. I deplore the deficit and its extraordinary amount. Any thinking person in Ontario or in Canada would surely agree. But I do not see what defensible alternative was available to any new government in the circumstances. In that sense, this seems to me a non-partisan deficit rather than one caused by what some in the media have leaped to characterize as socialistic principles of the New Democrat government. Even the former Liberal government would have been looking at a deficit in excess of $8 billion, given the shortfalls in provincial revenue caused by the recession and cuts in federal transfer payments.

I might add a third factor affecting revenue about which I can only speculate, but which I would welcome any discussion about. That is what a friend has described to me or named for me as the "underground economy," by which increasingly people work for cash payments as a means of evading the need to pay tax. The existence of that is made known to me in my hat as a minister through the privacy of the confessional. I cannot really speculate on what information has come to you about that, but the impression I have is that its impact on tax collections must be substantial.

Those are factors that I think even the Liberals would have had to deal with. The argument that acute recession in Ontario called for some public works pump-priming would surely have had some persuasive force with a party that advertises pride in its compassion.

It seems clear today from what they have said, and I suppose your being here today demonstrates that they said it, that the provincial wing of the PCs devoutly wish the deficit had been smaller. But I do not know by what process they would have provided reductions had they won office last September instead of the present government, because to take a dollar out of the deficit, logically you have to take that dollar out of provincial programs. Either they were simply going to impose such cuts holus-bolus or they would have been obliged to enter into some such consultative process as this, which they urged, and the deficit, provincial credit rating and time frame would have been about the same. In that sense, I see this as a non-partisan deficit.

One great benefit of this budget is that the government has sustained the level of health and social services at a time when they were sometimes desperately needed. It is not merely that the so-called safety net of the province was kept intact; its effectiveness was protected. Any social program is affected rather traumatically by funding cuts. What may seem to an outsider as simply a matter of tinkering with the scale of things here and there, from the inside becomes a time-consuming preoccupation with sorting out whose ox is to be gored how badly. The case load inevitably suffers during the process of readjustment.

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We did not need to overlap that sort of year of traumatized professionals with the present year of traumatized clients whose jobs, hopes, morale, and sometimes homes and families as well, have evaporated in the course of corporate downsizings and restructurings.

The collateral benefit has been that the budget also sustained a base level of economic activity which has insulated us from the worst shocks of the recession. You might have thought, for example, that interest rates and the addition of GST would have eradicated tourism in Ontario this year. In fact, the reports are that Manitoulin Island has enjoyed a good season so far, after a somewhat scary slow start.

Whatever people might have said about the budget, the indications are that a great many have been able to continue to enjoy life in spite of the recession. Lord Keynes prescribed government spending as a remedy for hard times. These have been hard times and the prescription seems to have helped the patient.

Perhaps as important is that the budget invested in Ontario's infrastructure at a time when such investment is jeopardized by federal policies unseen in Canada since the Bennett government in the early 1930s.

Cuts in provincial programs may well have to come for compelling reasons of economic prudence. But for this year, at least, the highways have been repaired, bridges maintained, GO service continued, hospitals operated intact, seniors housed, young people educated and more people employed. We have had time to begin to think how and where, if they are to come, cuts might best take place in our communities.

Let me digress briefly to allude to one problem. Keynesian approaches to economic policy have been under attack in recent years, because while it is easy to do as Keynes urged and spend in hard times, it has been all too easy for past PC and Liberal governments at federal and provincial levels to spend in good times too. Not just for the sake of Keynes's credibility, but for its own, the new government will have to show that it can break with the good-time Champagne Charlie pattern of profligacy established by its predecessors.

A new economic theory of popular government has emerged in consequence of that profligacy, which many call small-c conservative and which has acquired the status of hallowed doctrine with the federal government and some of the provinces. The theory holds that political parties operate in a free market of competing interest groups which bargain votes at election time for program funds during the life of governments. This marketplace generates, according to the theory, an irresistible pressure upon governments to spend, in order to buy coalitions which will re-elect them.

It strikes me as a curiously fatalistic theory to call "conservative" which excises all operation of reason or principle from the working of such a supposedly free market. The theory is shallow and trivializes the society it is supposed to model. It assumes that voters are always and only perfectly rational about their limited particular interests. It also assumes that no government can ever afford just to tell the truth to its people about major problems or debate openly with them over principles of policy. If the theory were valid, there would be neither point nor hope to these hearings. The worst we can say is that the evidence is not yet in on that score for this government, for which I think many people hold great hopes.

To move on, let me suggest, in response to a remark attributed to Premier Rae some months ago, that I believe it is important to document in the annual provincial budget accounting the portion spent on investment in human and physical infrastructure.

New roads, public buildings, education and research are perhaps the most readily recognizable aspects of such investment. There may well be something of a grey area in distinguishing between the capital cost of an upgrade and the operating cost of maintenance. For all ministries, however, it should be possible to separate out bona fide capital from operating costs and to report these clearly in the budget, because if cuts are to become necessary, as Keynes proposed, it is on the capital side of the ledger that they should take temporary effect rather than on base budgets for operations.

I do not want to suggest that the human services should be exempted from cuts. It is to say, first, that when deficits must be reduced, in those areas too there are capital outlays -- pools of discretionary or onetime funds -- which can be targeted first.

It is also to say that the government must be very cautious about viewing contract or targeted grant programs -- programs which are initiated by the government but generally for reasons of cost are contracted out to a third-party agency -- as able to be cut on a par with capital costs. A great many good programs are now being provided that way, for instance, nursing homes or our local literacy program, and it would be cruel to lose what has been needed for so long.

It may be possible to reduce such contract services, but that decision should not be imposed by fiat, but taken at or in concert with the local level. The case, of course, is somewhat different with grant-funded programs which result from local initiative. The local community, however, should have a say in whether these are cut.

The importance of local consultation in deciding the extent and application of funding cuts, if they are to come, cannot be overemphasized. If this is accepted as a process value, certain implications follow. In the first place, it suggests that the government will be forthright in presenting a flexible, multi-year plan, saying what the problems are and stating its budget goals. Nobody likes cuts and the spirit of partisanship cannot be wholly absent, but then nobody said government is supposed to be easy. If it can be open, honest, consultative and fair, as Hamlet said, 'tis a consummation devoutly to be wished.

So far as human service programs are concerned, as, when and if there are to be funding cuts, it is imperative that an effective mechanism exist at the local level to set cutting priorities, involving local communities in greater planning and co-ordination roles. It seems to me, just to comment to the side for a minute, that this has been a clarion call in all the recent policy reports I have read on human services from government, whether it is dealing with long-term care, the reports from the Premier's health council or Children First. All of them emphasize the need for local involvement in defining needs and setting priorities.

There is a need for a mechanism to make it work and it seems to me the prerequisite for such a local role in rural areas such as the district of Manitoulin is to begin now to have the accounting for our human services broken down in sufficient detail to show the full capital and operating dollar content of the funding envelopes for our area, because otherwise we cannot judge how to make the decisions asked of us.

The alternative is that we will simply be told by program managers in Toronto or here in Sudbury what we are going to have or not have. While that is largely the present reality, it is not a healthy situation. In a time of program cuts it would be an unacceptable one.

Let me close with just one unrelated and perhaps wholly gratuitous suggestion. Last Thursday I took my wife and our five year old to catch a plane at the new Terminal 3 in Toronto. There were certain last-minute expenses for parking and a hasty meal, so we cashed a well established brand of traveller's cheque for US$50 at the Canadian Imperial Bank of Commerce branch in the departure concourse. To my astonishment, the service charge for this was $4.

It seems to me that if major chartered banks feel free to take back what was in effect 8% of that transaction, the province ought to have the right to take its 8% as well, especially since your 8% is only of the fee, not of the dollar value of the transaction. I would gladly pay Ontario an extra 32 cents for the privilege of seeing in the next budget just how much the banks have managed to collect by that and similar service charges this year, and the PST revenue therefrom would be a new and useful contribution to paying off the deficit we all deploringly accept.

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Mr Kwinter: I do not have a question per se. I apologize; I got in a little late in your presentation, but I was very taken with some of things you had to say. I was wondering, your proposition is that local entities should have greater control over what funds they get and how they spend them.

Mr Macdonald: We should have a share in the control.

Mr Kwinter: I think it is laudable. I think that people in local communities have the best idea of what their requirements are and should not be dictated to by bureaucrats or politicians, say, in Toronto. The major concern of course, which is what has happened over the years, is that it works well in an ideal situation where everybody is knowledgeable, everyone is responsible and everybody does what he his supposed to do. Where you have the breakdown is where you do not have those people with that ability. That of course is the problem. How do you keep some fiscal responsibility, fiscal control to make sure that the taxpayer's dollar is being spent not necessarily wisely, because that is a matter of opinion, but that there is some accountability?

Mr Macdonald: I do not advocate a transfer of control to our level. What I would like to see is our involvement in the control process at our level. I think you retain responsibility for service standards and for raising the funds and disbursing the funds, and all that I think is right and proper, just as there is at present, let's say dialogue on the question of what is needed and what takes priority. That kind of dialogue I think needs to be enriched and extended.

In terms of what I take to be an implication of your question -- what resources are needed in a rural area like the district of Manitoulin to be able to handle that kind of responsibility -- part of the answer is that an awful lot can be done by concerned volunteers because in our community, just to take the particular case, individual tenure tends to be very long term; people are there for life. We export our kids, not our adults. If people manage to stay and get a job of some kind, they tend to stay for ever. When somebody in his 30s, say, begins to get interested in human services and gets involved, he tends to stay with things. So you get a lot of volunteer expertise growing on people and it is not really difficult to encourage that, particularly, I think, if organizations like the one I chair continue to have an involvement with established political organizations like the municipal association and so on. I do not know if I am really answering your question.

Mr B. Ward: Thank you for your presentation. I found it very informative.

Mr Macdonald: I take it you are not Margery's brother?

Ms M. Ward: No.

Mr B. Ward: No. The Wards are taking over, though. I found it very informative and I think that your presence here is very worth while. Based on your experience on Manitoulin Island -- I was out there I think in May to assist in announcing a program with the native people on reserves, a certificate program so they could build houses on reserves. I was impressed with the local leadership, from people I have met.

Mr Macdonald: So am I.

Mr B. Ward: Yes. Could you, in your experience in chairing the committee you are on, briefly describe how things are on Manitoulin?

Mr Macdonald: Compared to Oka we are in heaven. Our native/non-native relationships are, I think, as good as they have ever been. Last year I was honoured to be the master of ceremonies in our Gore Bay arena for the signing of a friendship treaty between the native peoples of Manitoulin and the rest of us, which included a pledge to work together on all issues because all issues on the island affect us jointly.

We have 12,000 people -- the population of Port Hope -- in an area roughly the size of Prince Edward Island and in terms of resident population we are roughly one third native, mostly concentrated in the east end, but in one way or another sprinkled all over the island in five different reserve areas. I suppose there is a residue of some racism, but the relationship seems to work well on many levels.

Manitoulin bands are involved in the MMA, the municipal association. We have two native representatives who are both involved with native services on our committee. It is of course a complicating factor that funding for them tends to be federal and the funding for the non-native community tends to be provincial. We are discussing with them ways of collaborating more concretely in terms of the kind of question Mr Kwinter raised. Our municipal association has put forward, with a lot of support, the proposition that Manitoulin needs to have an autonomous planning and co-ordination body, and it is our purpose that this committee that I chair evolve, in short order, into that. We see them as involved in that. I cannot say at this time that it is clear exactly who is going to be involved, but certainly ambulances; I am a volunteer in the Gore Bay ambulance. If someone needs an ambulance, they get it.

Mr B. Murdoch: I can relate to Manitoulin Island. It is not too far from my riding.

Mr Macdonald: Where are you?

Mr B. Murdoch: Grey, Owen Sound, so we are not too far, just up the peninsula and over in the Chi-Cheemaun. It is nice to hear a non-partisan report come to us here.

Mr Macdonald: I do not know if it is non-partisan, but I tried to be objective.

Mr B. Murdoch: That is what we got and we appreciate those kinds of briefs. About the credibility, I think local municipalities probably have a lot more credibility sometimes than Queen's Park. I think you could maybe look after that better than some of the credibility we get from Queen's Park. I am talking about the bureaucracy, not maybe the politicians so much.

There is one question I want to ask you. You tried to be non-partisan. The government has predicted that it is going to be in deficit funding for the next four years. That is a concern. I do not think anybody would argue that they would not have a deficit this year -- maybe not as much, some of us feel -- but the problem is deficit financing for the next four years. There does not seem to be any light at the end of the tunnel. What do you say about that?

Mr Macdonald: I am not comfortable with that at all, Mr Murdoch. I am not comfortable in my own life or in the province's life with deficit funding as a way of life. I have a lot of respect for Floyd Laughren and his ability. I guess I can only say in a vaguely partisan way that I think if Floyd Laughren can find a way to trim the sails of that kind of deficit, he is going to do it. I would urge him to do it. My main concern would be that the process by which it would be achieved be this kind of process. To go back to an implication of Mr Kwinter's question, if and when cuts do come, and I expect they will have to come, we really need to have a say in what happens, and in different ways. There are going to be all kinds of complications.

There are certain kinds of programs in areas such as ours that I think are vulnerable in ways they might not be elsewhere. I do not want to make too much of that, but I am thinking of women's shelter programs in particular, which are not always as well-regarded in the country as they deserve to be. I have people complain to me that they challenge family values. In my business, I am expected to be sympathetic to that, but I fear it is going to be important to find ways of protecting certain kinds of service and certain kinds of committees. Yours and mine may both be alike in that. I think it is going to be important that the process of working on the deficit be looked at, as well as the fact of it.

Mr McLean: I have a couple of short questions. The first one, Mr Macdonald, is who invited you here today? Did you get a call? How come you are here today?

Mr Macdonald: My wife was the candidate who got within 207 votes of Mike Brown last year. She said to me: "You are involved with human services. Why not go tell them what you think?" I thought it sounded like a great idea.

Mr McLean: So you are here in a partisan way, then?

Mr Macdonald: I am a partisan here, but I do not think I am here in a partisan way.

Mr McLean: The second question is short and simple. It is about the Manitoulin Health and Social Services Advisory Committee. What is their priority at this time? What is their greatest need?

Mr Macdonald: To get control over our own affairs and to improve our capacity to do planning and co-ordination instead of what the description says, to simply discuss issues. We are not capable of taking that kind of role yet.

The Chair: Thank you for your report to the committee and for attending.

Mr Macdonald: Boy, this is worse than preaching, I will tell you. I have half a dozen extra copies of this. Even though it took until 4 am, I had fun. Thank you.

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CITY OF ELLIOT LAKE

The Chair: Next will be the city of Elliot Lake council; Wilma Sanderson, alderman. Welcome to the committee and the budget hearings. You can start proceeding while we are handing out the briefs, so it gives you enough time to get questions and answers in at the end.

Mrs Sanderson: Attached to the proposal I have for today is quite a lengthy summary of information that I believe will be summed up in our proposal. It shows the things the community has been through in the past year and how devastating their impact has been. It also shows what we are trying to achieve, given the devastating situation we are in. I will try to summarize and highlight the facts.

You are fully aware by this time that the Elliot Lake miners have suffered over 2,000 layoffs, and the elimination as well of 6,210 jobs in the area. This has created an economic and social strain on the community, both on individuals and the infrastructure. Assistance has had to be provided for these workers to allow them to adjust to their new economic reality and to continue on with their lives.

On April 2, 1991, the Minister of Northern Development, the Honourable Shelley Martel, and the Minister of Natural Resources, the Honourable Bud Wildman, set up a working group in the area with the express mandate of providing an opportunity for consultation with the province to ensure area representation in identifying viable plans to help ameliorate the impact of uranium mine downsizing. The working group developed recommendations on critical issues in the following areas: adjustment measures, temporary jobs, creation of an economic transition period, social assistance, and economic diversification projects. Proposals for projects were identified that totalled $592 million.

Last fall, the first layoffs occurred: 1,600 jobs in Rio Algom. From that first impact, only about 600 miners are left here. This spring, Denison Mines announced further layoffs of 400 workers, as well as 13 weeks of temporary shutdown for its entire workforce. The company experienced an economic setback and will eliminate 700 more mining jobs and an estimated 560 support jobs by 1992. In April 1992, the mine will close. The working group noted that to date 3,450 mining jobs have been or will be eliminated. This decline would result in additional job loss of 2,760 in the service and support sector. Some $280 million of economic activity will be lost in that area.

All of the above dramatic reduction in both the mines and manpower is due to the cancelling of contracts by Ontario Hydro. Its major purchases are being made in Saskatchewan. We tried to pressure the government to have Hydro buy 100% of its uranium from Elliot Lake, but to no avail. We have been trying to develop something else that could boost up this community, with long-term stability for future development in the diversification of our local economy. The city of Elliot Lake was born of the uranium industry. Nearly 40 years ago, in the early 1950s, rich uranium ore deposits were discovered in Elliot Lake. We first incorporated as an improvement district in 1955, as a township in 1966, as a town in 1976, and as a city in 1991. In 1966, the federal government committed to a five-year stabilization program for Elliot Lake. We grew from there, increasing our housing by 3,266. New sewage plant costs were $30 million, expansion to the hospital was $6 million, and the additional five schools and college campus costs were $10,600,000. The total of $300 million in capital investment made over 15 years is now at risk.

The provincial budget, while running a considerable deficit, must focus on assistance to northern Ontario communities, particularly single-resource communities such as Elliot Lake. The current economic situation in the country makes it extremely difficult for those communities to diversify their economies and attract business. In many instances, they lack needed resources to make attractive offerings to commercial and industrial initiatives. These include adequate infrastructure to support expansion, a trained labour pool to draw from and transportation links to the local markets. To offset this, the government must look at ways and means to expand the economy in the north. This could be done through moving training, institutional and service sectors to communities such as Elliot Lake and supporting them.

By moving such institutions to the north and supporting them, the needed mass can be generated to assist in the diversification of the economy. Sudbury is a prime example of this process, with growth continuing after the placing of a number of significant government initiatives in the city to act as a catalyst. Similar benefits can be reaped with the placement of the French college in Elliot Lake, the Ontario College of Art's northern campus being established there, and the continuation of the initiative to place an MTO training centre in Elliot Lake. These institutions will provide employment and economic activity upon which other initiatives can proceed.

With budget deficits being incurred, there is a necessity to create a base for sustained activity which will contribute to the repayment of this deficit. The budget, when addressing these types of development, will have a definite benefit for the north, including Elliot Lake. Cabinet, in concert with Ontario Hydro, has provided a vehicle in the $65-million package to Elliot Lake, which came from Ontario Hydro. The package was for Elliot Lake and the north shore to start the needed activities to build a diversified economy. The $9.8 million of work projects which come out of the $65-million package from Hydro will ensure a labour pool over the next two years, a business development fund to assist with entrepreneurial business initiative in the area, and social and infrastructure assistance will assist the municipalities with their budgets over the next few years to be able to maintain essential services without significant tax increases.

Just to give you a brief notation to date of what is happening to Elliot Lake, there are now 13,500 in our population. How come we still have that? We had 16,500 two years ago. Right now, with retirement living there, some of the seniors who are moving into the area are kind of offsetting some of the miners who are moving out with their families. Of the miners who were laid off, there are 600 adults taking upgrading programs. We have over 150 miners who are taking literacy programs. We have over 100 miners who are taking courses in skills and trades. They have set up two mining adjustment committees and one community adjustment committee. What they do is help with the stress and help the miners and people who are laid off in that area to adjust to how to go about getting jobs.

In Elliot Lake, there are at least 250 residents and business people who have pooled together as volunteers to help to diversify the city, to stabilize it. With this $9.8 million, we will start September 1 -- due to the fact of their layoffs at the mines, there will be people who have now exhausted their UI. We will be putting them into jobs to give them a 20-week workplace so they can get back on unemployment. We are trying to stabilize them for two years in order to re-establish them in the workforce.

In closing, the government, through its budget, must continue to take positive steps to assist those municipalities in northern Ontario to diversify and develop a strong economy not reliant on a single industry and resource. Most important, the programs must create a sense of self-reliance in the community to ensure a future for its residents.

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Mr Sutherland: Mrs Sanderson, thank you very much for coming forward today. I know it must be a very challenging time to be a member of city council in Elliot Lake in terms of the serious issues you have had to address. Seen from my perspective anyway, as we were in Sault Ste Marie yesterday and dealing with Algoma Steel, and we heard this morning that the Kapuskasing issue is hopefully going to be resolved, there seems to be a sense of real community coming together in all these situations to find some solutions. Hopefully we as the government are being part of the solution in terms of trying to help find new ways and diversify.

I wanted to ask you a couple of things. I have seen a bit of stuff in the paper about the French college. Has a decision been made about that yet?

Mrs Sanderson: No. Tom Lankin is in Elliot Lake today having a meeting with the committee in that area. No decision has been made.

Mr Sutherland: Okay, no decision on that.

Could you give us a little more sense of what the impact has been in the community of Elliot Lake in terms of the individual impact on people, a sense of how that has affected decision-making on council's part, and maybe some impact in terms of, had there been no increase to any of the social services agencies, what would the result be in Elliot Lake right now?

Mrs Sanderson: The social impact has been devastating. We have had several teenagers who have taken their own lives because of the stress in the family. We have had a lot of families separating. We have had a lot of women going through our crisis centre, just to give you an idea of the social impact of this. In social services, the increase has gone up considerably. It has gone up dramatically in the social area due to the fact that some of the miners who were laid off had pulled out their severance pay. Some of them had tried to pay off their bills in order not to have to worry about that area.

When Rio Algom laid off 1,600 last fall, social services did not have in place an area where they were given two weeks' funds -- it takes six weeks after they have applied for it before miners can get some kind of welfare cheque in order to help them. When the Rio Algom group was laid off, that was not put in place. When the Denison layoff took place, for the first two weeks they gave them some funds to help them through the six-week stress. That helped a little bit. But the welfare roll increase is dramatically high. That is why we are hoping that this job creation we are instituting will put them to work and alleviate their putting more impact on the welfare area.

Mr Sutherland: Earlier this morning, we had Derek Wilkinson from the department of sociology here at Laurentian. He indicated that he had been doing some analysis and research on the people who were laid off and that there was a great need for skills training in Elliot Lake in terms of basic literacy, upgrading grade 12, and then a little more beyond that. I was wondering if you could give us your sense of what type of skills training programs are needed in Elliot Lake.

Mrs Sanderson: There are some programs. Just to give you an idea, there have been two classes of 13 -- there were 26 miners who took up driving these tandem trucks. I do not recall; I think it is industrial tandem truck driving licences. Upon completing those courses, none of those guys were able to get jobs. If there was an incentive for the employers, or possibly a loan for these guys to get a truck to get into the workplace, it would help. There is nothing in place. That means it was a waste of time for these men to go after it, because they have no previous experience driving a truck and they cannot get on any of the jobs.

In the other skilled jobs, we have about 100 miners who have gone out to -- I believe there are quite a few here in Sudbury who are taking masonry or other areas and trying to get their licences. When they were working for the mines, their existing job did not qualify them for certificates, so now they are trying to get their certificates through the school and through the universities and colleges.

Other than that, I think the miners were quite glad, due to the fact that they are on UIC at this time and were able to take the upgrading. Some of them did not have any higher than a grade 7 level. We were devastated to find out there were over 150 illiterate miners, who were quite happy to go to school. They were glad to take that.

Mr Sutherland: Let me just make a comment. I wish you all the luck and hope that the community continues to come together to find solutions. I think we are seeing that if it is successful, the community usually ends up being stronger for it. You alluded to Sudbury and we certainly have been made well aware of what a success story has occurred here in Sudbury with its diversification, and we are all hoping and pulling that the same thing will happen in Elliot Lake.

Mr McLean: To build a diversified economy, what type of industry are you envisioning should take place?

Mrs Sanderson: At this time there are several industrial businesses I have been trying to get established there. What is happening is, a lot of them do not have the matching assets, or the money to pool together to match the grant they are applying for. There are five proposals on cogeneration plants that are in place at this time. It is supposed to give up to 500 jobs in that area, but it is down the line; it is two, three years down the line. Any of the existing businesses that are going to establish themselves there, it is still going to take some time before they are established, so we are trying to diversify for the next two, three years.

On the other hand, we are trying to enhance, through some of these grants we have received, and we are fortunate to have been able to have them, to diversify the tourism area, enhancing Elliot Lake to attract tourists. We have been doing that, so that is taking place. That has had some job creation to help in that area. So we are trying to work towards a tourism attraction, as well as establish some cogeneration plants and some industrial plants. We have had a few proposals in, but it has not flourished as yet. It is just in the works.

Mr McLean: As an alderman, is there a great amount of taxes not being paid and business taxes that are not being paid? Are there write-offs taking place? It would have a devastating effect on a lot of those businesses.

Mrs Sanderson: We would have had to raise the taxes 30% had the government not cleared our debt at this time due to the fact that the mines are pulling out. That would have meant a devastating problem for Elliot Lake on the tax base. We would not have known where to get the money, the funds to pool for paying the taxes. The retirement is helping some, because they are purchasing 1,700 units from the mines. We will be able to get the taxes from that. But if the government had not come through to pay off our debt, with Elliot Lake and Blind River, I do not know where we would be. We would have had to charge a 30% increase in taxes and that would have been devastating for the residents of Elliot Lake.

Mr McLean: I am disappointed, Mr Chairman. There must be another meeting going on. Most of the afternoon there have been two NDP members here and I am sorry that there are not more here to listen to what this lady from Elliot Lake has to say on what the problems are.

The Chair: Mr McLean, I think there are some interviews going on out there. I believe the briefs have been handed out, and we will be getting Hansard after, if they are unable to be here. We have asked the questions already from the government side, in that there are two from each party here, and three.

Mr Christopherson: On a point of privilege, Mr Chair: I think it is also maybe important. We did not announce it, because it was not an announceable item, but we spent the lunch hour meeting with the regional chairman, municipal officials and representatives from the Sudbury development corporation to talk to them about some of the problems they are having in Sudbury. Unfortunately, the meeting went a little longer than expected. There were some local media that wanted to know what was discussed and that has held up a few people.

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Mr McLean: Why were they not brought before the committee so they could express their concerns here themselves?

Mr Phillips: Just on the point of privilege about that, a committee met with the mayors?

Mr Christopherson: No, it was an informal meeting by myself as parliamentary assistant to the Treasurer, and the parliamentary assistant to the Minister of Industry, Trade and Technology. It was strictly that while we are here, we are trying to make use of being available to talk to local representatives. We did the same thing in Sault Ste Marie and attempted to do it in Thunder Bay.

Mr Phillips: Why would they not have come here to talk to us?

Mr Christopherson: It was a different process entirely.

The Chair: It was not to do with the budget.

Mr Christopherson: It is not related to the budget per se. It is related to economic conditions. It just does not seem right to have members of the government here and then not meet with local officials if they would like to dialogue with us, since most of the parliamentary assistants do have the ear of their minister. That is where we have been. I just do not want to leave the impression that it was somebody off on personal time.

Mr B. Murdoch: I just have a question on how the welfare is up and everything like that, and you being on council, I just wanted your remarks on the Hopcroft report, where the municipalities would like to see the government take 100% of the welfare costs.

Mrs Sanderson: That has been a proposal that was made through the municipalities and the townships. They have already, I think, gone through with that.

Mr B. Murdoch: No, it has not been decided yet. I think the government is still looking at that report. I just wanted to know how you felt about it, just for my own knowledge, you or the council; you can speak for it. Do you think it is a good idea for the province to take it over or not?

Mrs Sanderson: I think there is a shared cost that could be implemented, a percentage of shared cost. I think the majority of us would like to see the government take 100% of the social services cost, because it is a very heavy tax burden on the taxpayers at this time.

Mr B. Murdoch: I think the reason for the municipalities wanting that is that there are a lot of mandatory programs sometimes, mandated out of Queen's Park, that maybe some local municipalities just do not feel are needed. I just wanted to know what your opinion was, and that is fine.

Mr Kwinter: Wilma -- I hope you do not mind me calling you Wilma.

Mrs Sanderson: That is fine.

Mr Kwinter: I have a preference for the name; it is my wife's name.

Mrs Sanderson: It is not very popular.

Mr Kwinter: I used to be the vice-president of the Ontario College of Art, and I noticed that as part of your recommendation you suggest the establishment of a northern campus. Is that something that is being pursued? Is that something that has been suggested? Where did that come from?

Mrs Sanderson: Due to the fact that we can provide such a good service up there reasonably, and because the province had said that it needed to -- you are talking about the college of arts, are you not?

Mr Kwinter: Yes.

Mrs Sanderson: At one time the centre of community education used to have programs and people from all over the provinces used to come to Elliot Lake for continuing education through the centre. We never had an establishment of an existing building or place where we could have all these artists who used to come into Elliot Lake, so it has been brewing for many years that we would really like to accommodate all these artists to come into Elliot Lake. We have beautiful scenery and we now have all kinds of infrastructure, buildings and accommodation that is quite reasonable, that could really enhance that area.

Mr Kwinter: Has the college shown any interest in it? Are they involved at all in discussions?

Mrs Sanderson: Oh, yes. They have made many proposals. They have a building in place and the plan is all engineered and everything to have it built up there.

Mrs Sullivan: I would like to know further about the success of your retirement living programs that were initiated in Elliot Lake a couple of years ago. My understanding just recently was that while the infrastructure was there, the recreational services, the social services and so on, to provide for the retirement community summer and winter, one of the things that was becoming a problem was that many of the people who were moving there to retire were moving out of the community in the winter months, either to go south or whatever, and as a consequence there was an extra burden on some of the facilities that had been put into place. Is that a correct report?

Mrs Sanderson: I do not know. What do you mean, an extra burden? Can you elaborate on that?

Mrs Sullivan: In terms of staffing, in terms of ongoing operating and indeed capital costs to provide for a community which is shrunk during the winter season.

Mrs Sanderson: No, I do not believe you received the right information. We do have a small percentage, maybe 10% of our seniors, who go down south where they have homes in Florida and that area, but we have a lot of programs in place. In fact, they hired a co-ordinator who works out of Huron Lodge who handles all these programs. You would not believe the programs we have up there for the seniors. They are quite happy.

Mrs Sullivan: I knew there were a lot of them. I have visited them and seen them. But I understood that there was some pressure on the municipality in that the uptake in the winter months was not strong enough really to maintain the operating costs.

Mrs Sanderson: Maybe what you have heard is that at the time they established retirement living, it was a project that was instituted through Claire Dimock, who was the co-ordinator of the program. She worked for Denison Mines, and people were coming into Elliot Lake and buying homes and renting homes, and did not have any snow removal or accessibility to have anything done in that area. Denison Mines was burdened with having to give that service. Now it is falling on to the retirement living and there is money there for that this year. There is no problem there; that has all been straightened out.

MARCEL ROY

The Chair: We will call on Mr Marcel Roy. Would you please come forward? You will have 15 minutes for your presentation totally, and within that 15 minutes try to save some time at the end in which the three parties can ask questions on your presentation. Welcome to the standing committee on finance and economic affairs on the budget review.

Mr M. Roy: Thank you. I was originally told I might have a half an hour, so I will try to keep it short.

Again, my name is Marcel Roy, and good afternoon. I am representing mostly social services, because I work as a social worker for Service familial de Sudbury, Sudbury Family Service, and I am also a member of the United Steelworkers, holding the position of recording secretary for Local 7282. I am also involved with non-profit housing. I preside over a housing corporation known as Habitat Boreal and sit as a board of director on yet another corporation known as the Bud Germa project.

I also would like to sincerely thank this government for the approach it has taken towards the people of the province regarding budgetary matters. I think the Ontario government should be commended for going to the extent that it has in trying to ensure that all people of the province are taken into consideration by allowing them to speak and voice their opinion on such important matters that affect us all. Again, since much of my experience and background is in social services and housing, I will be addressing the committee in regard to the impact the budget will have on these matters.

I think it is important that the budget be regarded not simply as another provincial budget, but rather as the first budget of a type of government which has never before reigned in Ontario, a government of change, for it was change which the people of Ontario sought back in September 1990. This first budget of the New Democratic government of Ontario reflects change from the traditional Conservative and Liberal party politics.

Equally as important is the economic climate in which this budget was released, for any government's true test of worthiness and valour is not during good times but during hard times, and we have fallen on hard times.

We know that during hard times many problems surface. During economic hard times we can expect problems such as high unemployment rates, high inflation, devalued currency, large deficits, government cutbacks, all of which have direct impact on other less seemingly related problems such as a lack of affordable housing, marital conflict, spousal abuse, chronic depression, child abuse, sexual assault, drug abuse, and the list could easily go on.

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At any time there is always a certain ratio of the populace which is in need of government services, but during hard times that ratio is augmented, sometimes greatly. If a government chooses to ignore the increase in those people in need of service by not properly servicing those people, that government becomes responsible. This new government chose to serve the people in need rather than to ignore them and therefore this government acted responsibly. No doubt, in order to serve its people properly, this government will have to do so at a cost and that cost is one which the people of Ontario will carry for some time.

The present deficit is large and its projected growth even larger, but most of the deficit is not attributed to poor management on the part of the New Democrats since they have not been in power that long. Some of the deficit, however, can be attributed to this present government as it will borrow money from the future to pay for today's ills. That is usually what we do when we borrow money, such as for a house which will meet our family's needs today and we indebt ourselves for 25 or 30 years in the future. If we choose not to borrow against the future we cannot adequately meet the needs of today. Today we are in a recession and the need is great.

Looking more specifically now at how this government plans to meet the needs of its people, the Honourable Floyd Laughren, Treasurer of Ontario, has indicated in his budget that the government has committed $215 million on a four-year basis towards social assistance reform. This is a major commitment of government capital towards those hardest hit by the current hard times.

I remember the Transitions report, released back 1988 by the Social Assistance Review Committee, which clearly indicated that in order to properly serve those on social assistance major reform would have to take place, and we were not even in a recession at that time. However, the Liberal government at the time heeded the advice of SARC and some changes to the system began in 1989. But it seems that even those changes were too little, too late since yet another independent working group, known as the advisory group on new social assistance legislation, whose mandate was to report to the Ministry of Community and Social Services, had also clearly stated in its report, entitled Back on Track, that the momentum for reform had been lost since those initial changes began in 1989.

Part of the proposed reforms of the social assistance system will incorporate a plan to reintegrate some of the non-working social assistance recipients back into the workforce. This plan will provide those individuals who can work with the incentive to work, and in turn increase their self-esteem and their societal self-worth. As a social worker, I know how worthless and trapped people feel by the negative stigma attached to being a welfare recipient. Often the stress of this prevailing attitude is enough to cause people to experience depression to the point where they are hospitalized and need therapy.

Municipalities will also benefit from this plan, as existing grants will be increased somewhat in order to help them deal with the increase in demands for services which they are responsible for. This is good news for municipalities since it will help alleviate the numerous problems certain municipalities face due to the spinoff effects of the recession. In these days of transfer payment cutbacks, municipalities can rest assured that help will be there for them.

This government has taken the initiative to put back on track those necessary changes which were due and to show it is committed to reform. Two hundred and fifteen million dollars may not rectify all of the problems which our social assistance system may encounter. However, given the fact that this is the first budget of this new government, I think we can safely say that reform is forthcoming. I therefore endorse this government's stance towards social assistance reform.

Another major point of concern for me, which this budget addresses, is the need for more and better service delivery for women who are victims of violence. This point is of major concern for me since I work as a therapist in a batterers' treatment program. I know and understand the dynamics of spousal abuse and the power and control tactics utilized by men to keep their female partners submissive to them. This is a social problem of great magnitude because it is often handed down from generation to generation and upheld by societal beliefs and attitudes. We need only to look at our sports, our entertainment forms and even our cultural beliefs to see how violence is sanctioned by our society. Violence against women is difficult to eradicate if our society accepts even implicitly any form of violence.

I do not expect the government to change societal beliefs and values. However, if the government shows its support towards combating this most vile injustice towards women by committing itself to more financial aid to all the components involved in the prevention of violence against women, then it is conveying a most important message to its people. That message is that violence against women is not acceptable and that something can and will be done. Indeed, something has been done about it. A commitment of an additional $12 million for more beds and staff for emergency shelters as well as for counselling and prevention and treatment programs, such as the one I work in, is an integral part of the necessary changes long overdue in preventing violence against women.

Sexual assault is also on the agenda for this government, as there is a commitment of more than $8 million towards servicing those women and children who are sexually victimized, not only for those in large urban areas but also for people in rural areas, and immigrants and racial minorities as well. For anyone aware of the staggering statistics of women and children who are sexually abused in Ontario -- I believe in 1989 the figure was over 10,000 -- $8 million may not seem like much. But for a first budget, from a new government, I think it is a step in the right direction and I for one welcome it wholeheartedly.

As a social worker having worked -- to some extent I still do -- on Manitoulin Island, I cannot overlook the budget's impact on aboriginal people, for I have personally witnessed the impoverished conditions of natives living on reserves without such basic amenities as clean water, sewage systems and proper shelter. If I had not seen it with my own eyes, I would not have believed that people in my province were living that way. I was not surprised to find that these people were not living this way out of personal choice, but rather out of necessity. For this reason, I commend and approve the government's commitment of more than $48 million towards improving the quality of life, which is so desperately needed for the aboriginal people of Ontario.

Looking at housing now, my own commitment towards housing in this community speaks for itself. I marched on the streets of Sudbury in the cold, wet fall of 1983 one year after being laid off from the Falconbridge nickel mines when people, through no fault of their own, lost their homes because they too had lost their jobs. There were 1,000 laid off at Falconbridge and 2,000 at Inco. These were for the most part young families that had borrowed against their future to provide for today, only for them there was not much future, only unemployment and welfare lines. Some left the city in the hope of securing a future. Others stayed and tried desperately to make the best of it. For over 15 years, Sudbury has had a very low vacancy rate for people wanting to rent decent, affordable housing. In 1983 it was even worse. It was for that reason that I began to advocate on behalf of those without shelter. I joined an organization called the United Tenants, and we lobbied all three levels of government in order to gain their attention to the problem. In 1984 a proposal was submitted to both the province and the federal government in order that a private, non-profit housing corporation could be established to take over some of the houses which had gone into receivership. Anyhow, our lobbying efforts managed to secure some 35 houses in the Sudbury region in order to help some of those who had lost their homes.

Today I still work towards bridging the inequalities in housing which still exist in this community, and many others have also followed. Affordable housing is a key issue for any family, and that is why I am pleased to hear that the Ontario government has decided not only to go forward with the development of 35,000 units, but also to provide yet another 10,000 units. I know, through firsthand experience, how vital these housing units are to the people of Ontario and what it means for a family to secure a decent place to live at a cost it can afford, for shelter is one of our basic, yet highly valued needs. Without appropriate shelter, people are often forced in overcrowded conditions, perhaps without proper amenities such as hot and cold water or sewage. Very often they pay more than 50% of their net income on rent, so little is left for other important needs such as food and clothing. Again, here, as with many other social problems, women and children are the biggest victims.

Overall, I found this budget to be very supportive towards bridging the many social inequalities which exist in our society: housing, social assistance reform, aboriginal issues and violence against women.

These are all issues which reflect the kind of society we live in. Any government which cares deeply about its citizens must be able to convey that it cares about them by enriching their lives and making great attempts to alleviate those plights which its people face on a daily basis. The level of concern and commitment displayed by the New Democratic government of Ontario through its first budget is, in my experience, unprecedented. What remains to be seen is how effective the actual implementation of this budget will be. That is an equation which can only be measured over time.

It has been less than one year since the government took over the reins of power, and we have seen some great changes. I am certain the next three years will bring even more changes which will benefit the people of Ontario and hopefully provide a secure standard of living for all.

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Mr B. Ward: In your experience in the housing movement and the social aspect, could you briefly describe your feelings on how the recession has impacted the people of this area.

Mr M. Roy: I do not think the recession has impacted on the community in Sudbury as it has on others. However, Sudbury has always had a housing problem, so that problem is still there from 15 to 20 years ago. It is still here, although a lot of small organizations have banded together and lobbied the governments to try to get more equitable service in the housing field.

Mr McLean: What is the Bud Germa project?

Mr M. Roy: This is a new project which has just started. We are proposing a 60-unit apartment building in the downtown area, specifically for elders.

Mr Phillips: A year ago the unemployment rate in Ontario was 5%, I think it is about 10% now and next year it is predicted to be at 10%. The Agenda for People was the big document in the campaign. Is 10% unemployment in the future acceptable in terms of your own thinking of the budget, and are you pleased with the progress that has been made so far in implementing the Agenda for People?

Mr M. Roy: I think unemployment is a factor that is related to the economy and especially in the private sector in terms of how well things are going. I do not think the government can put everybody back to work. However, if there are good social services, programs, to catch those who are unemployed, then I think that is what is needed.

UNITED STEELWORKERS OF AMERICA, LOCAL 6500

The Chair: Would the United Steelworkers of America please come forward.

Mr Campbell: I notice your agenda refers to a Bernie Young, who took the message on our vacation shutdown. I am Dave Campbell, the president.

The Chair: That is why I did not mention a name. A lot of the presenters are not the ones on the list here. Would you just introduce yourself for Hansard.

Mr Campbell: My name is David Campbell. I am the president of Local 6500 of the United Steelworkers of America here in Sudbury.

The Chair: Sir, I welcome you here. You have half an hour for your presentation. Try to keep some time at the end for questions and answers from the three parties. It will be divided equally.

Mr Campbell: First of all, on page 3 of the document I presented, there is an error that I corrected this morning. Two thirds of the way down it says, "You know and I both know"; that should be "You and I both know." When I get to that I will just skip by it. I did not have time to correct some of the grammatical errors in this document and I hope you will bear with me while we go through it.

We represent over 6,000 workers, about 6,137 to be exact, who are employed at Inco. I guess I could also throw in that we just certified approximately 800 of the office and tech workers, who could be added to those numbers. On behalf of the membership of Local 6500, I wish to express my appreciation for your coming to Sudbury and affording us the opportunity to make this presentation. What I am going through in the first seven pages was prepared through me, our national office research department and so forth, at the end of which I would like to make some comments as a person born in the Sudbury area who has lived in Sudbury all his life.

First of all, I will share with the committee some of the statistics provided to us by the research department. I have to assume these statistics are accurate because I am not an academic and I did not put them together. I can only assume the information gathered is accurately reflected, so if you challenge it, do not challenge me; talk about a politician.

These graphs show the population in 1984 in northern Ontario to be some 429,000 people, as compared to 1991 with 425,000, showing an almost 1% reduction change. Compare that to Ontario's total of 6,887,000, compared to 7,670,000 in 1991, for an increase of 11.4%.

We drop down to the next stat, which talks about employment. You can easily see where northern Ontario does not follow the flow of Ontario as a whole. The growth in Ontario reflected in these stats reflects more southern and central Ontario, whereas northern Ontario has been somewhat left out.

On page 2, the stats are taken, as we see, from the Labour Force Survey conducted by Statistics Canada, and they compare basic trends in northern Ontario with those same trends in the province as a whole. That is something that concerns us greatly as northern Ontario dwellers. Those fighting for secondary industry, etc, found this stat ongoing. Take it back as far as stats have been kept and there has never been a high point where northern Ontario has done exceedingly better than southern Ontario.

Three points are made by these statistics that underline the gravity of the economic situation in northern Ontario. First of all, between 1984 and 1991, the population of Ontario increased by 11.4% and the population of northern Ontario fell during this same period by slightly less than 1%. Later, towards the end, I am going to talk about young people leaving the north. That stat reflects how dramatic that is and causes that stat to come forward.

Second, during the same period the number of jobs in Ontario as a whole increased by 10.1%; in northern Ontario the number of jobs increased by only 1.4%. In short, northern Ontario did not get anything like its share of the recovery and the expansion that occurred in the rest of Ontario. Perhaps to compensate for this inequity we will, however, get more than our share of the current recession. We are going to talk about the recession, and we are going to do a bit on Sudbury and its claim to be recession-proof. We will get to that later in my presentation.

Third, the percentage of employed persons to total population is significantly lower in northern Ontario than it is in the province as a whole. This means the market for local businesses is smaller in relation to the population than it is in the rest of the province. It also means that the demands on the public sector are growing faster than the regional tax base. We keep hearing about the cutting of federal funds to the provinces, and from the provinces to the municipalities. If we are going to maintain the growth in the public sector, where are the funds are going to come for this? Hence, we must get into the private sector and encourage secondary industry.

The message of these statistics is simple. The economy of northern Ontario is in trouble and it is getting worse, not better.

As a Steelworker at Inco, I know the resource industries have achieved and will continue to achieve significant gains in productivity. As a steelworker, I also know that these productivity gains are essential to the future competitiveness of our resource industries. But as a Steelworker and a long-time resident of Sudbury -- from birth -- I also know that jobs being lost through productivity gains in the resource sector are not being replaced elsewhere in the northern economy.

It is interesting to note that approximately a year and a half ago I attended a world mining conference as a Canadian labour delegate, with 22 other countries, in which one of the two topics covered was technological change in the workplace. It was evident at that time that Canadians, Americans, Australians and Britons knew that technology was important, so that we would not end up like the steel industry in the United States, that it would be better to have a percentage of the people working with technology and profitability than everyone laid off if you are not able to produce cheaply on the world market. That was the trend of the two-week convention in Geneva, so it is not something new. It is something out there that all levels of government are going to have to address. It is here now and it is going to get much worse in the decades to come.

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Quite simply, the private sector employment base of the northern Ontario economy is being eroded. Here is where I get to my mistake. It should read, you and I both know that neither the province nor the federal government can move enough public sector jobs into northern Ontario to compensate for the erosion of employment in the private sector. That is not to say we are not appreciative of the Ministry of Northern Development and Mines and the taxation data centres and all of those things. It is imperative that they should be diversified through the province, but that cannot do it on its own.

You and I both know that without diversification in northern Ontario, the economy will have a succession of crises in single-industry, resource-based towns. Kapuskasing and Elliot Lake are only the beginning. You and I also know that without a strategy for economic diversification, there will be many more Kapuskasings and Elliot Lakes.

Speaking on behalf of all Steelworkers, we look forward to working with the government on developing an economic diversification for northern Ontario. We are currently investigating the establishment of a labour-sponsored investment fund to create more manufacturing jobs in northern Ontario. But Steelworkers are under no illusions. An economic diversification strategy is not something that can be done by unions alone. What is required is a new partnership involving government, communities, business and labour.

The members of Local 6500 acknowledge and appreciate the steps that have been taken thus far in the early months of the new government's mandate. The government has allocated 30% of its anti-recession spending to northern Ontario. The government eliminated the motor vehicle registration fee for people living in northern Ontario. The government is committed to a federal-provincial agreement on minerals development and research and development in the resource sector.

Members of the committee, the measures announced in the Treasurer's last budget were a welcome signal of the government's intentions and its goodwill. The next budget, however, must take major steps towards putting in place a serious strategy for economic diversification. Last year's budget spelled out in budget paper E the vision the government is endeavouring to frame for economic renewal in this province. It is a vision which is centred on building up the human resources of this province. Steelworkers in northern Ontario applaud that vision. We welcome enthusiastically the government's call for new partnership and extend wholeheartedly our co-operation in forging those new partnerships. Steelworkers in northern Ontario want to urge the Treasurer in his next budget statement to set out the diversification strategy the government envisions for northern Ontario.

Like most unionized workers, the members of Local 6500 have negotiated a pension plan with our employer. We have fought strikes -- often very long strikes -- to build into the plan the kind of basic benefits managers and professionals take for granted. But like most workers in this province with employment pension plans, we have no say in the management of that plan. I say that candidly because I do sit with the company once every six months and go over the investments and the experience of Inco's pension plan. I am in no way going to reflect that they have not done a good job, because if each company in Canada had administered its plan like Inco does we would not have the mess in places like Algoma Steel and so forth. We are allowed to watch, make comment, but we have virtually no say in the administration.

I cannot convey to you the anger and the frustration our members feel when they see our savings sent out of the country to create jobs abroad when northern Ontario's economy so desperately requires capital to finance its diversification. We all know the federal budget. We are going to let some more pension moneys trickle out of Canada, and we think that is ludicrous.

Like every other local of the United Steelworkers, Local 6500 belongs to the Ontario Federation of Labour. In an important statement on pension policy adopted at its 1988 convention, the OFL said: "The export of our savings is the export of our future. There can be no restructuring of the economy of this province which does not include a role for pension funds." The members of Local 6500 agreed with the statement in 1988. We agree with it today. We think it is high time pension funds played a role in developing the economy of this province in securing the future of its people.

The pension fund managers clearly have different priorities. They have successfully lobbied the federal government to permit pension funds to increase the proportion of their assets they invest outside of Canada. As a result of the vigorous lobby undertaken by the pension managers, a ceiling on capital exports will rise from 10% to 20%. What this means for the people of northern Ontario is that without deliberate action to change the management of pension funds, our future will be exported along with our resources. Pension funds are supposed to be a trust. Some trust.

Simply put, we think those moneys could be invested at an equal or a better return in the north to encourage secondary industry, rather than just having the public sector and those industries that are already here. It is money made and earned in Northern Ontario which should be reinvested, or at least a portion of it, putting back into the ground that you took it out of.

Pension fund management and economic diversification in northern Ontario are inextricably linked. It is pointless to discuss economic development and diversification while allowing private pension managers to increase the export of workers' savings. We deem that when we negotiate a pension fund, the dollar value charged against our collective package is in fact a dollar we did not take in our paycheque to be placed into the pension fund. Therefore, we should have more say on what we have negotiated. This would be one way to do it.

We urge the government to move expediently to give pension plan members at least an equal say with employers in the management of our pension funds. Having done that, we urge the Treasurer in his next budget statement to spell out how he envisions empowering the ordinary working people of this province to enter into a partnership with their government to use pension capital to pull this province up by its own bootstraps. Self-reliance begins with empowerment.

The last budget described the government's commitment to develop the human resources of this province. The failure of the private sector to invest in training and new workforce skills is well documented. The Canadian private sector is significantly outspent and out-invested on training and skills development by virtually every other economy in the Organization for Economic Co-operation and Development, including even the United States. Workers bear the costs of this underinvestment in training and new skills. We pay the costs when we lose our jobs and must seek new employment.

You may be aware of a study by Statistics Canada of the experience of the one million workers who lost their jobs between 1981 and 1984, during the last recession. That study set out two important findings. First, after two years, only 57% of the laid-off workers had found permanent, full-time re-employment. Second, of those who found re-employment, 45% experienced a wage loss. The average wage reduction among the 45% who suffered a wage loss was 28%.

That is the way workers pay the price for the private sector's chronic underinvestment in training and new skills. Businesses underinvest in training and new skills, but it is we who lose our jobs because of their underinvestment. When we lose our jobs, almost half of us will not find permanent re-employment. When we do find re-employment, almost half of us suffer a wage reduction averaging 28%. That is the future that chronic underinvestment in training and new skills holds out for us. That is the future the continued erosion of private sector employment makes likely for an increasing number of working people in northern Ontario.

Steelworkers in northern Ontario are looking to this government to get a firm grip on the problems of chronic underinvestment by the private sector in training and new skills. The last budget statement stressed the importance of human resource development to our competitiveness and economic wellbeing. The government indicated that it will soon be in a position to announce the structure it envisions for an Ontario training and adjustment board. We want to stress to the government and to the Treasurer that a training policy is only going to work if it addresses the funding question. Structured without funding, it will be of limited value. The question is not whether the private sector can afford to invest in training and new skills; the question is whether it can afford not to and whether we can afford to let it repeat its past mistakes. We urge the Treasurer to include in his next budget a statement of what measures the government will take if the private sector does not voluntarily increase the investment in training and new skills.

1430

In his last budget, the Treasurer courageously rejected the policy of intensifying the recession through public sector retrenchment. Steelworkers applaud this courage. We fail to see how the right-wing strategy of laying off public sector workers, cutting back on health care and reducing social assistance would have got this province out of a recession. In his last budget, the Treasurer showed his willingness to lead. Steelworkers in northern Ontario look forward to being able to continue supporting the Treasurer and the economic leadership that he is providing.

I am now going to reflect on some other comments I jotted down this morning. You must bear in mind that I just came back from holidays on Monday and found out I was coming here today.

One of the things we talked about through that presentation, which I admittedly did not put together entirely by myself -- I had some input from our research department and I am voicing the words. What comes from me is as a Sudburian born here in 1947, who has lived here all his working life representing the largest section of the workforce in this city.

We saw that if you took away the public sector jobs such as we discussed, the data centre, Northern Development and Mines, etc, we would be exactly where we were 25 years ago with a one-industry town, with Falconbridge and Inco producing nickel, etc. We need something that will be substantial, that will sustain growth. We need something more than a government office and/or a nickel mine. We need something in the middle. I heard talk as far back as two decades ago of our need for an automotive parts plant, for a shoe factory, for textiles, but it has not come to be.

Besides the mining industry and the public sector, we have hospitals and schools. Sudbury, I might say, is doing very well right now. We have looked around the rest of the province, northern Ontario especially, and seen places like Elliot Lake that are not doing so well. Without the technology, we would have not been profitable. We would have gone the way of the steel industry in the United States and we do not want that.

As the president of my local union, I support the fact that technology creates work; it takes away work, but it also guarantees it. Technology killed 12,000 jobs in Sudbury. Twenty-five years ago, Inco produced 280 million pounds of nickel with 18,000 unit employees -- that is not staff. Today, they produce 25% more with 6,000 employees. Technology did that, but without it there would not be a mine. They would all be closed, because they could not produce nickel at prices that the markets would make profitable. We are in close touch with this industry. We are told that within four years that 6,000 will be reduced to the 5,000 level because of technology, while production will roll at about the same levels.

One of the reasons Sudbury has been recession-proof -- I hate to use that word -- in the last short while is because Inco, per se, has invested about $300 million per year over the last two years, and will over the next two, creating work for some 2,000 to 3,000 contractors and the ripple effects of their working in Inco's plants. Modernizing, getting ready, making the place cleaner and more efficient, that will end within the next three years.

If Sudbury does not have what it takes to pick up the slack from these major investments being made by the nickel companies, we are going to be in the same boat everybody else is. We are into mass expansion, and once it is over we are in trouble and we will join the ranks of Algoma Steel or Sault Ste Marie and Elliot Lake and all the rest, not to their degree maybe, but we will be in trouble.

In my presentation I talked about technology, I talked about training and I talked about the industry's need to train the workers. Currently, today, if you look at industry, whether it be Ontario Hydro, Bell Canada, Inco, any of the major players, if they need technicians, if they need technologists, if they need engineers, they steal them from other companies. There are only so many out there.

I sit on a panel in Sudbury that is concerned. I sit with management from corporations, with representatives from Laurentian University, Cambrian College, the public and separate school systems, plus labour, and the problem we see here today is that our schools are closing their technical doors. The shops and the trade lines and the engineering skills are slowly being made less available to our students.

Ten years from now, we are going to have a drastic shortage of engineers, and for every engineer you are short -- and we are talking in the thousands -- you will be short 10 to 15 to 20 tradespeople.

Industry is seeing it. For example, industry in Sudbury has created a course at Cambrian College in which a student can say, "I want to work in the mines some day. I want to learn for two years what that is all about."

Industry better get on the bandwagon, or else we may have some work for people to do and nobody to do the work, because we are putting out academics. We are putting out our doctors and our lawyers and our business people and our bankers and our loans managers, but we are failing drastically on the technical people it would take to encourage secondary industry in the north -- or anywhere else in the province, because Toronto is going to have the same problem as we have.

We are all getting up there in age. The average age of an electrician, I understand, in Ontario today is something like 47 or 48 years old. That person is not going to wire your house 20 years from now. We had better find some others, but the school system is not doing it.

The one other part that scares me, as a Sudburian: My daughter is going to be 15 years old. She is going to school here and would probably like to live here. We like to call Sudbury Ontario's best kept secret. It is a wonderful place to live, to bring up your children, and we have much more than people think we have. I think we have the most sunshine of any Ontario city, although you would not know it today.

Two things have happened in Sudbury. Sudbury is becoming a city of retirees. We have done a wonderful job -- I am bragging about the Steelworkers prior to my becoming president, Ron MacDonald and those before him, and the Steelworkers as a whole -- because when Inco was reducing from that 18,000 to 6,000 and we had some layoffs, although they were threatening massive ones, we encouraged some pension incentives.

We have 6,000 working members. We have 9,000 pensioners, of which 87% remain living in the Sudbury area. That is scary, because pensioners, although they spend money, have bought their homes, have bought their vehicles, have kept the economy rolling for their working lives and now they are coasting. That is not going to inject massive amounts of moneys into industry or development.

The other thing that scares us is our young people. You talk about the unemployment rate being bad in Toronto; it is bad here. A young person finds it very difficult to get a job in Sudbury, or northern Ontario. Where does he or she go? To Toronto, to southern Ontario. If you want to lessen your problems with unemployment in the south, create some jobs in the north and we will keep our children home where we would really like them to stay; in reverse, yes.

Anyway, I have covered it all. I am watching my watch. They said to leave 10 minutes. I am close.

Mr Phillips: I thought it was a very thoughtful presentation, and I commend you on it. Just a couple of thoughts. One thing we would agree with is what is at the bottom of page 4, but we would say, why is that not in this budget? In our opinion, we are going to waste two years putting in place what is absolutely required. I do not think we would disagree with it; we would just not suggest we wait another year.

There are two big issues coming up that you comment on here. One is pensions, and you have implied that perhaps your membership will be prepared to take a lower return on their money in their pension fund in return for investment in northern Ontario.

Mr Campbell: I should say not. I think investment in northern Ontario would quite probably create a higher return. In following some pension plans -- I excluded Inco, which I sit on and read the documentation -- we have found investments that incur less than 1%, and there is no input. We found a number of years ago, about a decade ago, when Hamilton --

Mr Phillips: Maybe you should just answer my question, Dave, because I have got --

Mr Campbell: I think that is a fallacy. There would not be less.

Mr Phillips: But it may or may not. You say it may or may not be, but it has to be prepared, I think, and I think we are going to face up to that.

I think you are suggesting that training should be the responsibility, not just of a company but industry wide. That will be another interesting debate, because I suspect Inco, for example, is probably spending more on training than the industry average. You are suggesting that perhaps what you do in industry is charge all of them the same amount for training. Inco, I think, may say: "Listen, I think I know what I should be doing. I want to spend a lot on training, but you are asking me to train in my own organization and spend money for other organizations that do not really give a hoot about it."

This is going to be an interesting debate, I think, on how we want to handle training in the future.

You have laid out for us two big issues that have come up. I think, particularly with your background in Inco, you will want to look carefully at them. Would you penalize a progressive organization like Inco in your training programs? Are members of pension plans prepared to take the risks of, perhaps, a lower return on investment in a certain geographic area?

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Mr McLean: He actually asked the question I wanted to ask, so we will get the same answer, probably. Is there any skills training being done in any institution here in Sudbury at this time?

Mr Campbell: To a degree, probably more than others. Cambrian College is well-noted as a good area for technical training, per se; but per capita, I think, in Ontario we are lacking. The numbers of skilled technical people who are going to be required in industry are phenomenal.

At Inco, as Mr Phillips said, they are participating in exactly what he is suggesting, but they are using the tax dollars paid by the people of Sudbury who fund Cambrian College, per se. They have 80 students taking mining development. Inco cordially takes them into the plant for three months during that training session. It oversees them, uses that as a probationary period to pick the cream of the crop, and hires them at the end of the two years. There is some argument about whether the company should be more responsible in paying for Cambrian College, if that is the methodology behind it. Will Bell Telephone jump on that? Will Ontario Hydro jump on that? We do not know, but something definitely has to be done.

Lots of work, lots of little holes, and I disagree that there would be less money paid back in pensions.

Mr B. Murdoch: I have one quick question. Your brief was well done, but I had some problems with some of it. I wonder where you got the information that it was right-wing strategy to cut back on health care and social systems.

Mr Campbell: We listened to what was hitting the floor at the Conservative convention; I guess that is one place. We see, everywhere, right-wing governments -- you have one federally which has cut funding to the provinces for medicare. As trade unionists, as democrats, we are dreadfully afraid that we are going the way of those south of the border, and we will do anything we possibly can to block that.

Mr Sutherland: I want to compliment you, too, on a superb presentation. The opposition parties have been claiming that labour representatives coming before us are just saying the same thing. This is a very good presentation that deals with the real issues. I am just wondering what you feel would be some of the specific areas that Sudbury could pick up in terms of diversifying the economy beyond Inco and beyond the government jobs.

Mr Campbell: As a Sudburian, you get into regional politics, but one thing that does not attract secondary industry to establish in the north is transportation costs. I hope you all ride back on Highway 69. You will find out why it would cost, I think it is, 28% more to ship goods from Sudbury to Toronto than it would on the 400, on the same nice four- and six-lane highway.

The other thing is that they keep on talking about the cost of properties in the Golden Horseshoe, how much money a piece of land costs per square foot to develop in Toronto. Come on up here. We have miles of it. You have Burwash farm. You own that. Divvy it up to some nice little industry that is going to pick it up and do something with it.

We could spend the next six or seven days talking about what industry would be attracted to the north. Inco, for example, used to be an importer of technology. We are now an exporter of continuous mining systems. There are mines here, so they develop mining equipment. There are mills here, so why not develop lumber equipment? There is a multitude of things; we can go on and on.

The Chair: I would like to thank you for your presentation and attending the budget review hearings here in Sudbury.

The committee recessed at 1446.

1458

NIPISSING TRANSITION HOUSE WOMEN'S ACTION COMMITTEE OF NIPISSING

The Chair: You can proceed with your presentation. You have a total of 30 minutes. Try to save some time at the end of your presentation for the three parties to ask questions on your brief.

Ms Alcorn: I will begin by introducing myself. I am Pam Alcorn. I have worked with assaulted women and their children for the past seven years. My first job at our shelter began during the shelter's first summer. I was hired as a recreation worker to assist with the children's needs during this tumultuous time in their lives. My work experience in the shelter has gone from child care to research to front-line crisis work with women and to all else shelter work entails. I will not get into the long job description.

Nipissing Transition House is a 14-bed residential distress shelter for women and children escaping male violence. We opened in January 1984 as a nine-bed shelter, but the need for increased services became immediately apparent. Finally, in September 1989, we reopened as a 14-bed shelter in a newly renovated and expanded facility.

The Women's Action Committee of Nipissing was founded in July 1989 after women's groups and individual women continued networking following a meeting with the Ontario women's directorate. In December 1990, we adopted the following mission statement, "To promote the empowerment and status of women in Nipissing district through the elimination of barriers to the full participation of women in all spheres -- economic, social and political."

At this point, I would like to quote from the statement of principles of Nipissing Transition House as well, "We acknowledge that some groups of women in our society, such as economically disadvantaged, immigrant, native, francophone and disabled women face a double oppression."

These are two statements which name and describe, in a basic way, women's issues which must be attended to by our society. I have been involved with women's issues and women's organizations since 1985 at both a local level and a provincial level, the focus of which has been primarily male violence against women.

We have come here today to speak to the link between economics and the oppression of women. I sincerely hope we will not be lumped in with the other "social workers" who have made presentations so far. I have to comment on some of the remarks I heard this morning on CBC radio. I am going to assume they do not reflect the majority of the committee members. If we had already presented, I think I would be angrier and more upset than I was when I heard some of them, because it was dismissive language that was being used. The taxpayers are paying for this. Please do not allow it to be any more of a waste of money than it is being considered by so many people. I am really urging everybody to listen to what we have to say.

I will borrow from the statement of unity of yet another women's organization, this time using a statement which the Women's Action Committee of Nipissing adopted from the Northwestern Ontario Women's Decade Council, "As a feminist organization we believe in the dignity of womanhood, the value of women's work, the voice of women as experts on our own lives and equality through the freedom of choice."

Dignity: In this society, dignity requires access to financial resources, be it the basic human right to food and shelter which often, more and more often lately, forces people to turn to social assistance, or be it the need for subsidized day care which attempts to offset an invisible barrier to women's full participation in the labour force. Dignity for women in this society also requires access to adequate services if we have been physically, sexually or emotionally assaulted.

Value of women's work: The recognition by this society of the importance of pay equity and employment equity would indicate that women's work is considered valuable.

Voice: The voice of women as experts of our own lives can be developed through funding resources which are women-based and women-focused, such as shelters for assaulted women and sexual assault centres. Funding of these and other such support services helps break the silence on many levels. They give women a voice on an individual basis so that as individuals they can voice their own pain, thus breaking the silence. These services enable women to advocate on behalf of each other, thereby breaking the silence at a societal level.

Equality through freedom of choice: We can increase women's choices through the adequate funding of the services which women require in determining our own individual future. Women's options are lessened in number and in viability due to factors such as fewer economic resources, fewer employment sources and lower employment standards as well as inadequate support and health services.

For instance, when a woman is forced to seek safety in a shelter for assaulted women, will she be able to exercise her right to safety if the shelters in her area are full? Currently in the North Bay area there is one shelter for assaulted women right in the city. It is a multipurpose shelter. There are three shelters outside the city of North Bay as well. They are within about a 40-kilometre radius of each other. Currently all the women's shelters are full and we have a waiting list at Nipissing Transition House, which is fairly common, so obviously there is always an increased need for services for safety.

If she considers separating from an abusive partner, will she have access to community resources which can help her explore her options? If she requires social assistance, will she be made to feel guilty for so doing?

I have to refer to a letter to the editor I read in the North Bay Nugget recently which appears to have been circulated throughout various communities. The headline in our papers was "Put Them to Work." "I am writing about a huge problem our country has but some places are doing something about it. I would like to see Ontario do something. The problem is why are the people on welfare getting cheques for doing nothing?"

That attitude concerns me greatly when very many of these people are fighting to find ways of maintaining a basic standard of living. That kind of attitude, I think, just continues to make it harder and harder. So the stigma continues.

When we heard the strong opposition to the recent budget and the subsequent demand for public hearings, we felt compelled to speak out as well. The Conservatives demanded that public reaction be included through this format. Well, what you are hearing from us today is just a whisper of what many women are saying, many women who are very concerned about services and social services, and the need to continue.

What would those who want cutbacks have this province do to social programs?

We may be in a recession. I know there is some debate depending on who is stating what about whether we are still in it or out of it. This does not stop people's need for food, shelter, clothing and safety. Men continue to assault women during times of economic restraint.

Those worrying about food, clothing, education, health, shelter and safety would quite likely welcome the luxury of worrying about our tax system.

While women live in a society in which the dignity of womanhood is undermined, the value of our work is yet to be fully acknowledged, our voice is denied or dismissed and our choices are limited, we will continue to face oppression. We would expect that this committee will not dismiss our input at this hearing. The women of Ontario require and expect to have access to the financial resources allocated to the various social programs through this budget. In fact, many of us expect and are calling for more economic attention to women's rights.

Ms Neault: My name is Alvina Neault. I am one of two co-ordinators in the Women's Action Committee of Nipissing. I live in Mattawa, which is 40 miles east of North Bay, a little lumbering town. Like Pamela, I am a shelter worker in a slightly different shelter. It is a family resource centre and the mandate is different, but most of what we deal with is the result of violence as well. All my life I have been a resident of northern Ontario.

Like a lot of other Ontario and Canadian women, I am married and I have a family. Like many other Canadian families, we lived through the last recession and we will live through this one. We will do it by making some cutbacks. There will be fewer luxuries and treats for every family member. However, when my husband and I are considering our budget, there are several realities we have to face, because like it or not our basic needs, just like everyone else's, remain the same. We have to eat. We have to have a place to live. Our children continue to grow out of their clothes, and as much as I wish it would not happen, they get sick and they need medical attention.

As the ones responsible for making the decisions in our family, my husband and I have to consider all of these things when we sit down to decide where the limited resources will be allocated.

At one time in the not-so-distant past, it was considered acceptable to expose members of the family who were considered useless or just another mouth to feed to the elements to die. Girl babies and the elderly often suffered this fate. In this vastly more enlightened age, we have laws to protect people from this sort of treatment.

However, when times get tough, as they do in a recession, people begin to cast about for solutions, and inevitably someone decides that we are spending too much on low-cost housing, too much on medicare and way too much on education. Complaints are heard, in the paper and elsewhere, about how easy it is to get UI benefits or general welfare or family benefits. On the same page in any newspaper, we can read about plant closures and people being thrown out of their jobs, and government promising to cut spending on our social welfare net at the same time Canadians need it most, and Ontario is part of Canada.

In my family, my husband and I are the adults, and therefore the ones with the power to say where the money will be spent. We do not expect our children to quit school and go to work to help support themselves, even if it were possible for them to find a job. We have no intention of asking them to quit eating. We will not refuse to provide them with medical attention. What we will do is put a second mortgage on the house or borrow money to ensure that our responsibilities to them are met. That is our job. It is government's job to see to it that the citizens of Ontario are guaranteed the necessities of life so that when the recession ends we will not have been pushed so far down that we will be incapable of rising again.

Do not get me wrong. My husband and I do not want to go further into debt. We will not do it without a great deal of thought. But if it is necessary, we will do it because the alternatives are unthinkable.

I just want to make it clear that I am not a member of any political party. I feel free to praise or criticize any government and any of its ministers. I will admit that the Ontario deficit is distressing, but it is justifiable. It is justifiable on the same basis that many family deficits are justifiable: The money is being used to take care of people.

The people who are the beneficiaries of the Ontario budget are by and large people who are long overdue for some consideration from government: Ontario natives; women who are victims of sexual assault; low-income people who had their income taxes reduced or wiped out by the new tax credits; children on reserves who will benefit from 400 new day care spaces, and that is hardly enough; child care workers who were long overdue for pay equity, after all they have one of the more important jobs in our society and they are making lousy money; and university students who were long overdue for some education on violence against women.

While we are considering all these things, we might also ask ourselves a few questions. Where did this deficit start? Was it during another recession, this recession, or did the previous government incur it during a time of growth and plenty? How much are these hearings costing the Ontario taxpayer? What part did the cut in federal transfer payments play in the Ontario deficit? 1510

Mr McLean: Two excellent briefs, from the heart and saying it as it is. The first question I have is with regard to the transition house. How long has it been in action?

Ms Alcorn: Since 1984, the Nipissing Transition House.

Mr McLean: Does it have 14 beds? That is not near enough, I am sure.

Ms Alcorn: No.

Mr McLean: Are you planning on enlarging it or what are you doing to get more quality places for these people who are in need?

Ms Alcorn: What North Bay is doing right now is looking at a sexual assault centre. I think that will help. We do a lot of crisis counselling as well -- women trying to figure out whether they are going to leave or are not going to leave and some women who need to come in crisis to talk. Whether or not that sexual assault centre will be a residence as well, we are not sure yet because we are just in the planning stages. We are one of the areas which has been designated to receive a sexual assault centre, although we have not got at all into the planning stages.

I do not know that we would expand the size of the shelter, but I think the increased use of service -- it is just skyrocketing and certainly we would love to have another shelter in the community. Many people look at North Bay and they say, "You've got Nipissing Transition House right in the city." There's a multipurpose shelter for men and women in the city and then the three family resource centres just outside. The city has been forced to put families into hotels, into hotel rooms. So nobody is turned away at the doors; that is definite. Women can come in and we get them to another shelter. Sometimes it means going into a totally different community and sometimes it means a hotel room is her only other option.

Mr McLean: Your food banks.

Ms Alcorn: We have a food bank.

Mr McLean: Are you getting enough supplies to operate that food bank? Some of them are not.

Ms Alcorn: Every summer there is a major drive for the food bank and we just had a festival in town.

Ms M. Ward: One of your comments, which I think was aside from your brief, was that you were describing the blame-the-victim attitude that is somewhat prevalent nowadays against people on welfare, with people commenting about lazy people on welfare. We find the same attitude in some segments of society about women who are victims of violence. Not everyone supports the need for those services. I think in some cases people are not eligible for support if their husbands are assumed to be able to support them at times when they might need to come to a shelter.

Ms Alcorn: You mean women having to pay for their own safety?

Ms M. Ward: Yes.

Ms Alcorn: I think that is being negotiated with the shelters at a provincial level. But in our community I cannot remember when a woman has had to pay. One of the things is that when there is a separation usually you cannot get to the assets pending division of assets, or they disappear, whatever they may be. Very rarely do women actually have financial resources and when they do, many women are concerned that they will have to pay for their own safety.

Ms M. Ward: That is the point I wanted to emphasize or get you to comment on, the need for community resources to be put into it. The woman might come from a family with some financial resources, but the woman is left without any resources, and that is really a form of imprisonment if you do not have the community resources there and she has to stay within that violent situation.

Ms Alcorn: The shelters contract with the municipalities and some shelters are having difficulties with municipalities. We are not; a very co-operative municipality.

Ms M. Ward: That is part of my concern, yes.

Ms Alcorn: But I am concerned that power would go to municipalities. I think it should be provincial. There should be guidelines and no woman in Ontario should have to risk not being able to get to a safe haven.

Ms M. Ward: Do you find that public awareness of the need for this service has grown in the last few years, that people really are becoming aware of the problem the more it is talked about? It is not hidden any more. No one laughs nowadays about wife assault, I hope, as happened a few years ago in the House of Commons.

Ms Alcorn: I do not want to hog the microphone.

Ms Neault: I think that there is a danger that people are going to see shelters as a solution to wife assault, and they are not, and no shelter worker wants to stay at work for ever, not in the shelter. We would far rather see violence eliminated so we can all get on with our lives, because this is more than a job.

Ms M. Ward: One of our presenters yesterday was speaking of the need for education at a much younger age, being able to identify potential offenders.

Ms Alcorn: I think we have to be careful about education, as well. I am concerned sometimes. That is why I referred to "women-centred." I do not think we can lose sight of who brought this issue out. It was assaulted women and their advocates who finally screamed loud enough for people to start listening. A concern of mine is that the community had not been responding for centuries, or society had not been. I think we have to be very careful about what we do, where the money goes, how it is allocated, and plan our strategy, not be short-term. So many people want quick solutions to social problems. This has been in existence for ever and it is going to take some time. I think we have to be very careful on how we apply money, allocate money.

Mr Jamison: I would like to thank you for your very direct presentation. I would like to ask you a question about the children involved where wives are abused, about the effect on children and the numbers. You have children who are experiencing this first hand and you are seeing the effects of that within the shelter itself; but there is the ability to deal properly with the situation, to provide the support in relationship to the children involved also. I wonder if you could speak about that for a moment.

Ms Neault: Children in shelters have even less power than their mother. Whether the mother has any power or not, the children still see her as being powerful. So their situation is quite different from their mother's. I think almost every shelter now has a child care worker who sees to the specific problems the children experience when they are taken away from their home and perhaps a father who does not abuse them, might only abuse the mother. It depends largely on whether the children are male or female. They see it quite differently. Little boys see it quite differently. It became obvious to us, almost as soon as we opened the shelter, that violent families were a training ground for future violence, because the little boys quite often, depending on their age, take over where their father left off. When dad is not there, they become the abusive one. They will hit their siblings and their mother and expect her to pay attention.

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Mr Phillips: Thank you both for a thoughtful presentation. I just have a couple of comments and then a question to you, I guess on your presentation. I think there were some questions in there. I think one of your questions was where the previous deficits start. You can get a copy of the budget, I guess, from the clerk. It goes through it. On page 48 it spells that out for you.

You also mentioned that you admit the Ontario deficit is distressing but a justifiable deficit. Just a comment, I guess, about why some of us worry a bit about the budget: It is not this year's deficit; it is deficits for a long while. I like your analogy with the family. That is the way I think about the budget. The second part we worry about is just where is the revenue is going to come from. Where are we going to generate the activity to ensure that we do fund the programs in the future? I wanted to share with you some of our concerns about the budget, the long-term deficit which goes on for ever, and just whether we are going to have enough economic activity to fund the programs.

We have talked to other groups, by the way, which have expressed their opinions, but I would like yours. In difficult economic times, does the demand for your service go up or is it irrelevant to economic times? Second, are we seeing an increase in battering or is it that there is just more access now to services and therefore people are able to come forward a little bit more? In other words, is it a situation which we are beginning to change? I think you mentioned this is not going to be something that is changed overnight, but are we beginning to make an impact in terms of getting at the root causes of this or not?

It is troublesome to me to hear that you have a waiting list or that at least you are trying to accommodate it. You have four facilities in your community and neighbouring communities, but still do not seem to be able to meet the demands. I would like you to give some of your experience to us in terms of economic conditions. Do they impact one way or the other on this? Second, what is happening out there?

Ms Neault: The family resource centres are slightly different, as I mentioned before. We have a wider mandate, so we can take any woman in crisis, and the woman defines the crisis. It can be economic; her house might have burned down. We have actually never had that, but the woman defines the crisis. It is not a transition house that deals primarily with violence in the family.

Having said that, yes, we do see an increase during hard economic times because we take women for whatever crisis. Sometimes family breakdown is precipitated by a loss of employment and so we might see a woman in that situation.

Ms Alcorn: Our shelter, however, is only for assaulted women and their children -- physical, sexual and emotional abuse. We have been asked that and we have tried to see if there is some correlation, but it just seems to be that the need for and the use of our services seems to increase steadily. There are times it slows down. Then the next year we are full before Christmas. There is no trend that we can really identify.

We do know that economics is not what causes the men to be violent towards women. There is our social structure, our society. When times are good, there is violence. Some people say, I guess, it is the end of the month when the cheques come in, referring to a very classist remark. That does not seem to make any difference either. We do not notice that. It seems just to be steady. In fact, I have heard some women say they felt worse leaving during hard economic times, because they felt guilty leaving. Maybe it is because of the economics. They think maybe it is because of the economics, that maybe when times get better, this will go down, and it does not, typically. It is hard to tell, but there is no cause and effect of that one aspect.

I think you were asking if we are seeing an increase in violence, or is it an increased use of service because of public awareness?

Mr Phillips: I think you said the demand for your services increases, and I am just trying to get from you what the cause of that is.

Ms Alcorn: Increased awareness is certainly having an effect. Women are starting to realize they have a choice. There are options. However, what worries me is that we will think, as Alvina was saying, that because we have shelters everything is taken care of. Shelters are definitely not what every woman wants or can see as an option. When our shelter is full, the thought of going to another outlying rural community is quite frightening for a lot of women who live in the city. Their support networks are in the city. There are transportation issues, the children's friends, the schools, the relatives, all of those things, some of which women need to get away from, but very often support systems help.

There is debate about whether violence against women is increasing or if it is awareness. I think, unfortunately and fortunately, it is both. But more and more women are phoning and saying their awareness is increasing of the various systems -- the social system, the health system, the justice system, the civil system, the law system.

Ms Neault: I might also make the comment that it seems to be word of mouth rather than any education that is on television, although that might help, but when women come to us they are typically referred by a relative or a neighbour or another woman who has used the shelter.

Mr McLean: I really have not any further questions. I just enjoyed listening to the comments. But I presume the awareness now of the program would be the biggest reason why you are getting more people. It is because they are aware now there really is some place to go. A lot of people, I believe, stayed in the situation because they did not believe there was someplace else to go.

Ms Alcorn: Many women have said that to me and others that although there is a place to go, they cannot. A lot of it has to do with community awareness too, that society says, "Yes, it's okay for you to leave." That really matters, that she gets messages from anybody she may come into contact with too, community awareness, that society is saying: "It's okay for you to leave. You have a right to leave. He doesn't have a right to do that."

The Chair: Thank you very much for making your presence and your presentation here before the committee.

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ONTARIO HOTEL AND MOTEL ASSOCIATION

The Chair: The next group to make a presentation is the Ontario Hotel and Motel Association. Please come forward and identify yourself. Welcome to the standing committee on finance and economic affairs on the budget review. You will have one half-hour, and out of that half-hour at the very end, before the half-hour comes up, you can save some time which will be divided equally for questions from the three parties. You may proceed.

Mrs Dozzi: First of all, I would like to apologize for my voice this afternoon as I have this terrible cold. I do not intend to try to speak too loudly, but I just apologize in the meantime.

Thank you for allowing me to make this presentation to you. My name is Melinda Dozzi. I am from Sudbury, but I am also the president of the Ontario Hotel and Motel Association, whose head office is in Toronto on Airport Road.

I was born and raised in Sudbury, Ontario. I am proud to be called a Sudburian, a person from northern Ontario. My family has been in the hospitality business in this community for 54 years. We have been active in this region not only in a business and social environment but also, as years have witnessed, in this area in the political arena as well.

I am a concerned Canadian and I believe in Ontario and in our future. In my capacity as president of the hotel and motel association, I wish to outline to you my perception of some of the key issues affecting the hospitality industry, which is the third-largest industry and the largest employer in the province.

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I would like to tell you a little bit about our association. I feel some of you may be aware of it already, since you sat perhaps with the Ministry of Consumer and Commercial Relations. The Ontario Hotel and Motel Association was incorporated in 1925. The objectives of the association are to represent the hotel, motel and food and beverage industry in government and legislative matters; to provide means for members to exchange information on problems and new ideas; to review industry trends and develop forecasts; to provide guidelines for professional conduct in this industry; to provide educational programs and services; to provide guidelines for accommodation and operating standards in the industry; and to act as a focal point for organizing joint efforts among members for the solution of industry problems.

The Ontario Hotel and Motel Association represents over 1,200 members who own and/or operate large and small businesses in this industry, such as hotels, motels, taverns, restaurants, resorts and lodges. The association's membership represents over 51,000 bedrooms and 150,000 licensed dining and lounge seats, employing over 45,000 people. I read last week that one of the problems with the hospitality industry is that we have failed to tell the world -- yes, the world -- how valuable and significant tourism is. Now every nation worldwide wants to be counted as a tourist destination. No one could possibly name a country or a nation that does not want this industry. We as Canadians do not realize that tourism is vital to our wellbeing and economy. Tourism is being neglected.

In this past provincial budget, there was not a mention of tourism or any support for this industry. Tourism means jobs and foreign receipts. Ontario has come into a summer of soft convention bookings, post-GST spending thriftiness and dwindling tourism from the US. Ontario tourism operators are burdened with taxes -- fuel, airport, transportation, property and liquor. Compounded with the GST, the PST and the Ontario health levy, plus other proposed taxes on our industry and country, many tourist operators find operations a paperwork nightmare. Hoteliers are now handing governments an estimated 47% of their revenues. The industry sees no signs of recovery and is, when and if it happens, anticipating a slow one.

A recent study sponsored by the Hotel Association of Canada and Tourism Canada suggests that high taxation is contributing to the industry's loss of international competitiveness. It is a fallacy to conclude that Ontario hotels are not competitive. They are, and you must believe that they are. Hundreds of tourist and hospitality businesses, both small and large, have been brought to their knees by this recession, wiping out countless millions of dollars in personal and family investments while crippling the entrepreneurship which has sustained development and growth in our industry. We recognize the importance of working together and joining our efforts with our colleagues.

We are pleased to have heard the announcement of Peter North, Minister of Tourism and Recreation, of a $200,000 commitment for the establishment of the Ontario Tourism Education Council. This will provide opportunities in our industry through job apprenticeship, national certification standards, training and education and the promotion of hospitality awareness.

In the recession of 1982 the small business person was helped. In this recession, one that is deeper and longer than most people ever dreamed, and not over yet, the small business person has become a non-entity. It must be remembered that not only are employees people but employers are people too.

The GST is not popular. The GST story is probably still very unfinished and will remain unfinished for a while. No one could have predicted that the GST arrival in a master stroke of deadly timing would come in the midst of widespread recession, nor did anyone predict that the Canadian dollar would be as strong as it is.

Our industry has traditionally provided meaningful and productive employment and steady incomes for hundreds of thousands of Canadians and Ontarians, and particularly for women, youth, aboriginal peoples, new Canadians and visible minorities in greater numbers than in any other sector or industry in our province. Many of them and their dependents are now suffering the hardship of permanent or indefinite layoffs and reduced available work opportunities. There must be a recognition of the vital economic importance of the Ontario tourism and hospitality industry to the economy of the province. Canadian consumers are going to the United States for goods because of price differences. The cross-border shopping greatly affects the hospitality industry as well. This is also causing economic pain and in some cases bankruptcies for domestic retailers in border communities in Ontario.

Canadian shoppers, in order to benefit from the 48-hour visit, are opting to stay in American hotels and motels so they can bring additional goods back across the border. The occupancy, on the weekends, of the border cities' accommodation property is down everywhere. This means that the hotels are losing money, retailers are losing business, jobs are decreasing and the government's tax revenue is diminishing. It would appear that our tax policies therefore are self-defeating. When people continue to shop across the border, it becomes a part of their routine and part of their life. Routines are difficult to break. We are people, but we are creatures of habit. How long before we convince them again to shop Canadian and utilize our own resources?

People in cities and towns near the American border find it more economical to drive across the border to purchase gasoline. Gas increased 1.7 cents a litre after this last budget. Gasoline prices are to go up 1.7 cents per litre in January 1992. In northern Ontario we are too far from the border to buy inexpensive gasoline. It has been stated by Mike Brown, MPP for Algoma-Manitoulin, that the average cost for a northern Ontario motorist will be $110 more by January. This is devastating to tourism in the north since people planning vacations will tend to find it more economical to tour the American states.

Sunday shopping, mandatory service training, minimum wage increase, off-premise sales, pay equity, wage protection, the sin tax, employee health tax, environmental and waste regulations, workers' compensation, directors' liability, Bill 70 -- where does this end? Business has long been recognized as the major creator of new jobs. Business, by its very nature, is innovative and creates new products and advanced technology which can be exported worldwide.

Wherever you go, in any part of the world, as you know, people think of Canada as a safe haven, a country where politics works, where there is a minimal amount of corruption, where there is safety in our streets, where we have a phenomenal environment and where our economic performance has been consistently strong over 45 years. All of that brings on the perception abroad that we are a politically stable country. This has been such a trump card that we have taken it for granted. If the government continues to apply more legislation, taxes and restrictions on the employer, it soon will not matter if the employment standards are met or the employees are being paid a good wage, because there will not be any reason to have employees.

Retail, manufacturing, hospitality operations large and small are closing their doors already in alarming numbers. Of the 130 Ontario hotel and motel members who responded to a recent survey, 65% said they had laid off staff within the last six months. The 479 laid-off workers represent 16% of the total number of people employed by the survey respondents. In addition, about half of the layoffs are permanent. About 65% of the survey respondents indicated that business had declined over the past six months. When asked to identify one or more reasons for their loss of business, 69% of the respondents said recession, 66% said the goods and services tax, 61% said the employer health tax and 43% said excessive property taxes.

Unfortunately, governments tend to turn their backs on businesses and often policies are developed with no consideration of the impact on the business community. Governments tend to listen, but do they really hear once they assume power? When it is no longer profitable to carry on business and there is no reward for the hours, the risk-taking, the amount of pressure constantly faced by employers, the sense of insecurity and the pressure on family, what is the answer? We know Mr Rae understands that the generation of wealth, meaning business investment and growth, is essential in Ontario to provide jobs and find resources to support health, education, the environment, culture, the public infrastructure and the quality of life in cities and towns in this province.

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To stimulate activity in northern Ontario and thus utilize the region's most readily available non-depleting industry as an economic generator, northern Ontario must be perceived as a major destination by potential visitors, both domestic and foreign. Tourism is an increasingly important factor in northern Ontario, particularly for those communities lacking any major resource industry. Tourism is northern Ontario's third largest industry and provides numerous employment opportunities. The north offers a great deal of promise for tourism, and through proper promotion tourism in northern Ontario can offer world-class wilderness and outdoor vacation opportunities. The best potential for tourism lies in the non-resident pleasure travel market.

The key to success is northern Ontario's ability to develop long-range plans for the future and sell northern Ontario. Without the proper transportation and upgrading of amenities, northern Ontario's ability to capitalize on the world's largest and fastest-growing industry may be lost. The north must be opened up. We must have better road transportation from southern Ontario to the Manitoba border, and soon. Our highways are our lifeline. If we wish to develop industry, attract visitors, maintain and improve our quality of life and be competitive across Canada and in the world markets, we must have a safe and dependable highway network.

Is it right that our generation should be building up massive debts in order to pass them on to our children and grandchildren? The fact of the matter is that we are so heavily indebted that there is no question that our children and our grandchildren are going to pay. Where have we gone wrong? What are our values? What is the answer? What are we going to do? We would be prepared, as an association, to give input and direction, as would many other Canadians. All you have to do is to ask and be prepared to listen, as I hope you are now. We welcome the opportunity to work with you.

I would like to take this opportunity to highlight some of the requests and recommendations that were collectively made with Tourism Ontario's submission: that the Ontario government maintain student wages and the tip differential in wages for wait staff; eliminate the exemption of the current provincial sales tax prepared food purchases under $4; eliminate the discriminatory provincial gallonage tax on beverage alcohol purchased by licensees, which will enable them to be competitive or to competitively price and merchandise spirits, wine and beer with food and significantly increase provincial tax revenues; enhance industry sales of taxable food and beverage by harmonizing the collection of provincial sales tax applied to food and beverage alcohol at 8%; freeze the provincial sales tax rate applied to the accommodation industry at 5%; eliminate the application of the commercial concentration tax on large hotels and associated parking areas in the greater Toronto area; reduce the unfair employer health tax rate for tourism and hospitality enterprises to a flat 0.5% of gross payroll regardless of size; eliminate the application of the employer health tax on taxable benefits and allowances in our industry; collect the employer health tax from all persons who are self-employed or are compensated through unincorporated proprietorships; reinvest all provincial tax revenues collected annually from provincial fuel taxes, drivers' licences and vehicle purchase/rent/repair taxes, levies and surcharges in the improvement, repair and expansion of provincial and municipal roads; co-ordinate a multimedia network by a Canadian campaign and emphasize the social and economic benefits of travelling in Canada and purchasing Canadian goods.

Sunday shopping should be unrestricted in Ontario to permit a level playing field and unrestricted freedom of choice in the marketplace to offer shopping selections, convenience and availability to all our visitors.

The hospitality industry today is faced with many obstacles, increased operating costs and restricting legislation. In order to remain competitive and recapture some of the lost business from our neighbours to the south, we must have the ability to compete on a level playing field. We ask the Ontario government to consider our recommendations as we strongly feel that these recommendations, if approved, will help the economy of Ontario and therefore the people.

As an ending, I would like to quote from Audrey McLaughlin, federal leader of the NDP: "People feel we are losing not just the prosperity of the country but the very character of the country. We seem to be losing the country we knew. The fate of this country is much more than the fate of political parties." Thank you.

Mr B. Ward: I appreciate your brief and the recommendations you have included and I am assuming we are going to get a copy of that as part of the package. I would just like to point out some perhaps unintentional inaccuracies in your brief. You mentioned there was little support for small business. I believe you touched on it to a degree. I can use my riding as an example, the city of Brantford, where I know of a number of small- to medium-sized manufacturing industries that have received loans or loan guarantees from the Ontario government corporation to allow them either to expand their capability or introduce new technology. There is assistance for small- to medium-sized business from our government.

You mentioned the levels of taxation as a concern and I agree. I think the GST has done more to hinder the advance of tourism in this province than anything other than the recession. If you look at the budget from a business standpoint, I think there is very little cost added to business from a taxation standpoint other than the 1.7-cent increase of gasoline. Again, I can relate to Brantford, and I agree it is different up north because there is more competition, but that 1.7-cent increase has not been noticed at the pump price because prices fluctuate so much and generally they are down more than up.

We do have a program in the government called tourism redevelopment incentive program, or TRIP, and it was not our initiative. A hotel in Brantford has taken advantage of that, $500,000, to expand its services. I am just wondering if you could comment on that specific program. As well, it is my understanding, from previous presenters, that tourism is up by 21% in Thunder Bay over the last three months, which I think is great. As well, we had a gentleman from Manitoulin Island who said tourism appears to be better than it was last year. Perhaps you could comment, if you can.

Mrs Dozzi: Manitoulin Island is unique in the fact that its tourism is up this summer.

Mr B. Ward: Yes, and Thunder Bay is up 21%. They are doing something right. Perhaps we could learn from that. That was my question.

Mrs Dozzi: They had better tell Toronto what they are doing, because I think Toronto is the biggest crier of its soft market right now. As far as small business is concerned, I am not speaking directly of manufacturing when I am speaking of small business. I should probably say it relates more to small business than to the restaurant and hotel association. Maybe it is because we sell alcoholic beverages in most cases and we are licensed properties, but they do find in many cases that it is not that easy. Your hotel in Brantford might have been able to get this $500,000 loan, but they have experienced a more difficult time getting loans in some cases.

Mr B. Ward: Through TRIP?

Mrs Dozzi: Whether they are using TRIP or not, maybe because we are licensed properties and people will stand back for that, and the fact that we do sell alcoholic beverages; but not all of us do, of course. As far as TRIP is concerned, maybe they are not going to the proper thing. I am not hearing so much from my members that they are applying for loans or wanting to expand and being refused, whether they are applying to TRIP or any other organization that might be helpful to them.

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Mr Jamison: I understand what you are saying about the budget, that clearly the government took a neutral position there, basically. I wanted to just comment quickly on the state of the Canadian dollar and how that affects the tourism in our tourism industry and the exemption in the Sunday shopping legislation that is pending. How do you feel about the recognition of tourist facilities in tourist areas being exempt from Sunday shopping? I know in talking to the minister that he was --

Mrs Dozzi: Let me just tell you one thing that happened last Wednesday when I did a presentation on Sunday shopping. Just before I came to do the presentation on Sunday shopping --

Mr Jamison: Our time is limited. I would like you to be specific about tourism.

Mrs Dozzi: I am. I had a busload of Americans came in, 37 Americans from Madison, Wisconsin. They came in for lunch. They had been in Ontario for one week. And all they did was complain about the high cost of food and accommodations in the province. The tour guide they had was I suppose the most vocal. She complained the whole time she was there, especially when they came to the cash, not so much because of my establishment's prices, but just what she had incurred when she had been travelling through the province. She said: "When you tell these 37 Americans" -- who were senior citizens -- "what the price of the meal is, don't talk anything about GST, don't mention provincial sales tax, and for heaven's sake, don't say there's a service charge, whether it is 10% or 15% or 12%. Just tell them one amount. If you're going to charge them $8 for the salad bar or $13 for a buffet or $10, don't mention anything else. Give them one price, because this GST/PST for the last week has mind-boggled them. They are absolutely mind-boggled."

She was the most vocal. She came to the cash, and when they paid their bill, these 37 Americans -- this was their last stop before Sault Ste Marie, Michigan -- were in their pockets digging out every single Canadian coin they could find to pay their bill. They did not want to have any Canadian money left in their pockets. It bothered me so much that they were so anxious. I had never seen a group -- and maybe it was her fault, because she was a very aggressive tour guide. She wanted no Canadian money left in their pockets at all. We took pennies and nickels and dimes.

Mr Kwinter: Thank you very much for your presentation. I can sympathize with what you have to say. A branch of my family is in the hospitality business.

I was quite interested in your survey, and what I would really like to find out from you, if you are able to tell me, is, have you done any studies to find out what is going to be the difference as a result of the recession ending, if it does, and the cumulative effect of all of this other tax-related legislation? The recession is throughout North America. The Americans are feeling the recession just as much as we are, yet they are travelling, they are coming here. But when the recession is over, some of this legislation is still going to be there. How is that going to impact? Are you going to see any improvement?

Mrs Dozzi: I do not think anything is ever going to be as good as 1988 was. I do not think we are ever going to see years in this business like in 1988. I am not a fortune teller; neither are you. We may be able to look back and say, "Oh, she was wrong, look at 1990, it was wonderful," or as we prepare for the year 2000. But I do not think the tourism and the economy, as far as the influx of tourism in Ontario is concerned, is ever going to be as wonderful as it was in 1988. That was a really keen year in this business and I do not think we are ever going to see -- I do not have an answer for you. I do not know what we are going to do. We are looking to you people to tell us what you think we should be doing. We elected you people; we want some good inspiration from you too. We input to you --

Mr Phillips: And you fired us.

Mrs Dozzi: I think you have to answer that question for me.

As far as the survey is concerned, I can give you all the facts; all the little results are sitting in the office.

We spoke in Thunder Bay, but I just want to say one thing. This was in the Toronto Star. Michael Beckley is the chief executive officer of the Holiday Inns across Canada and he says, "Maybe we should start growing melons in our ballrooms."

You mentioned Thunder Bay, and they are saying here -- this is from Motels Ontario; Bruce Gravel is their chairman. He said, "Members in the United States border areas, Kingston, Niagara Falls, Sault Ste Marie, have suffered a 20% drop in occupancy."

Mr B. Ward: Thunder Bay is up 21%.

Mrs Dozzi: Maybe it is because they have tried to get --

Mr B. Ward: Holiday Inn is aggressive.

Mrs Dozzi: Maybe it is because they are driving to North Bay to pick up beer. We have had this huge issue in northern Ontario about northern Ontario draft beer for ages. Our director, Don Johnson, in Thunder Bay, with all the hoteliers, is transporting beer from Powassan, keg beer, Molson's and Labatt's, up to Thunder Bay. Maybe that is why.

Mr Kwinter: Have you done any studies as to the drop in foreign conventions that have cancelled as a result of what they consider to be uncompetitive pricing?

Mrs Dozzi: Well, from the Metropolitan Toronto Convention and Visitors Association, last year 16.7 million tourists visited Toronto, 500,000 fewer than the year before, and the Metropolitan Toronto Convention and Visitors Association is not expecting the shortfall to be made up this year.

Personally, I do not think in the north we get a lot of foreign conventions. Your big foreign conventions are happening in your downtown Toronto hotels. The best ones to answer questions like that would be people like Michael Beckley and people like Ray Jacobi from the Four Seasons and Klaus Tenter from the Inn on the Park. They are the ones who are so concentrated on the accommodation industry.

The Hotel Association of Metropolitan Toronto's basic thrust right now is to worry about and be concerned about filling their properties. Their properties are down, they are suffering greatly, as you can see the competitive prices they are putting in. There is no GST any more on foreign conventions. That was one thing that Mr Hockin was kind enough to grant, the fact that if you are booking a foreign convention and most of your conventioneers are from foreign countries, whether they be European or Asian or American, there is no GST, thank goodness, on those conventions.

According to this article that I read in the Toronto Star, it says here: "Despite an aggressive marketing campaign launched this winter by the Toronto convention bureau in which the bureau guaranteed that prices on rooms and facilities would cost less than comparable rooms and facilities elsewhere in North America, the number of convention bookings by the association this year has dropped to 651," which is not a great drop from 666.

Mr McLean: Just a short question. Mrs Dozzi, you picked a tough year to be the president of your association, but I know the association well and it does good work. The question I have for you is, in Sudbury, what is the difference in vacancy rate this year from last year?

Mrs Dozzi: The vacancy rate in Sudbury, to tell you the honest to goodness truth, is not down a great deal from last year. I think we are off maybe 5% or 6%, but not a great deal. Sudbury has been a lucky community. I feel that Sudbury, as you well know, has really not felt the recession. You must have heard that, and it is true. We have not really felt the recession. The recession, what we did feel, started maybe in March of 1990, but it was so gradual and slow that we did not feel the huge impact that the smaller communities, like in southern Ontario, that are basically interested in manufacturing, have felt.

Inco is pretty powerful and strong right now. They are still doing a lot for the environment. They are still a great employer. No longer can Sudburians depend on just International Nickel for their livelihood, but because the region has so diversified itself and our chairman and our council are continuing to try to diversify this region, I feel that Sudbury has been very strong.

My fellow hoteliers, in the last three to four weeks, have been complaining. We do not see many tourists, and those we see are, lots of them, travelling in the motorized vehicle homes. They seem to stop only when it rains or because they get tired of driving. We have had such a wonderful summer, yet they are not stopping.

A member of Parliament told me once that this is what Sudbury is like. Sudbury takes six months to fall into whatever you are falling into, and then it will take you another six months to catch up once everybody is caught up. Whether that is true or not, it seems to be true. It is only in the last three or four weeks that I hear them on the phone, or when I call or they call, "How are things?" "Well, it's pretty bad right now." But it has not been so bad, it has been the last three or four weeks really. I cannot say what September or October is going to bring, but we do not see a lot of those American dollars crossing our cashes any more. They are just not there.

Mr B. Murdoch: You mentioned Sunday shopping in your brief, and I was just wondering again what your thoughts were. Would the government be better out of the whole deal and not regulating it, or do you think the --

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Mrs Dozzi: I wish the government had not done what it has done, sort of thrown it back to municipalities and even mentioned chambers of commerce. They have these seven guidelines they are to follow to designate tourist properties. I was in Niagara Falls a couple of weeks ago and our director there said, "At one time you thought of tourism, you thought of Canada, you thought of Niagara Falls." You can go to Cobalt and they want to be a tourist destination now, because the tourist dollar is important to them.

I wish the legislation had come right from Queen's Park and had stayed there. I think under the Liberal government we had open Sunday shopping and that is where we should have stayed. It was light-years ago when you could not go to the movies on Sunday. Do you ever think about not going to movies any more? You think: "This is craziness. Whoever thought of not going to a movie on a Sunday?" Why can you not shop? Have you ever shopped on a Sunday? Have you ever gone to the States and shopped on a Sunday, or anywhere else? I do not think you have to be open from 9 in the morning until 9 at night, but you could be open from 12 to 5.

The Chair: I want to thank you for your presentation and for appearing before the standing committee on finance and economic affairs on the budget review.

CRISIS HOUSING LIAISON (SUDBURY)

The Chair: The next group we have is the Crisis Housing Liaison, Mr Barry Schmidl. You have one half-hour for your presentation and at the end of it a question and answer period from the three parties. I would like to welcome you to the committee. Please proceed with your brief.

Mr Schmidl: This is a copy of the statistical tables I will be referring to.

Mr McLean: Have you got a copy of that?

Mr Schmidl: Yes. I will pass that out to the folks afterwards.

Mr McLean: It would be nice to follow through this.

Mr Schmidl: If the committee would like it now, I can give it to you now.

The Chair: Some of the committee members like to make notes beside some of the comments.

Mr Schmidl: Fair enough, just so long as I do not catch anyone following with their fingers.

I would like to thank you for this opportunity to present the views of Crisis Housing Liaison (Sudbury) on the proposed provincial budget, and particularly on its housing and social services aspects. I have been informed that there is a time limit on my presentation, so I will attempt to be brief and to the point.

Allow me to begin by introducing the organization that I represent. Crisis Housing Liaison (Sudbury) is a non-profit organization which provides assistance to people in need of housing. The primary service currently offered by the agency is a housing registry program. This program consists of a computerized listing of all available rental units in the regional municipality of Sudbury. These listings are given to families and singles who register with the program. In 1990 a total of 1,353 families and singles looking for housing used this service.

Using the registration information given by our clients, statistics are compiled by the agency on a quarterly basis in order to secure and maintain funding for the program. The statistics also provide useful indicators on the impact that the lack of affordable housing has on people's lives. I will be referring to these statistics through my presentation in order to demonstrate the rationale for our position.

Sudbury, and indeed large parts of this province, are in the midst of a serious housing crisis. Vacancy rates in the Sudbury region, consistently around or below 1%, demonstrate that. Crisis Housing Liaison's statistics illustrate the situation quite well.

Table 1 in the package that has been distributed to you shows that over 42% of the clients coming to our agency in 1990 were living with family or friends or in a temporary shelter of some sort or on the street. In actual numbers, this means that 574 clients did not have a place to call home when they came to see us last year.

We are not talking here of only the stereotypical and incorrectly portrayed street person who does not hold a job and has many social problems. As you will see in table 2, the largest single source of income for our clients was a job.

As you will see if you look at table 3, over 60% of our clients were families. Please keep in mind that when we refer to a client, we are talking about a single person or a family, not the number of individuals served. Each family client represents about three people. Children were a significant part of the 42% of our clients who were homeless in 1990.

My purpose here is not to take up the committee's time by arguing that we are in the midst of a serious housing crisis. Any rational human being can see that this is the case. To disagree is to show that one has one's head in the sand. Rather, I pass along this information to you to show the depth of the crisis that we find ourselves in. It is a crisis that the provincial budget is helping to fight. It is for that reason that we support it.

Economic security is something that many people in Canadian society lack. Quite simply, paying the bills is a problem for many people. This is not through a lack of financial skill or through wasteful spending; it is because money taken in does not always equal the amount that has to go out. When the major expenditure each month is that which keeps a roof over your family's head, it is a serious concern for someone who may not have the money this month. If my choice was paying the rent or feeding my 10-month-old son, I know what my decision would be.

One of the major threats to tenants in the present housing crisis is the amount of rent charged. Generally speaking, the more affordable the unit, the less likely it is to become vacant. Why would you want to let an affordable place go unless it was in poor condition or you were overcrowded?

If you refer to table 4, you will see that the average rent of vacant units generally exceeds the average rent of all units, vacant or occupied. In the case of two-bedroom units, it is by $130 and by hundreds of dollars in the case of three- and four-bedroom units.

This would not necessarily be a bad thing if people were normally able to pay these rents. If you refer to table 5, however, you will see that this is not necessarily the case. In order to pay 30% of your income for the average vacant two-bedroom unit, you would have to earn $23,680 a year. This is not a princely sum by any means and is certainly within the range of many. However, if you look at the average personal income for a woman in Sudbury you will see it is only $11,518. Consider what this means for a single mother with two children who works for minimum wage or is receiving social assistance. This is by no means an extreme example. A full-time minimum wage job would earn one $11,232 a year based on 40 hours a week and $5.40 an hour.

I am not here to talk about rent control -- I did that last week in this room, actually -- but rather about how the provincial budget affects those placed in the situation I have just described, that of families having to deal with low vacancy rates, high rents and low incomes.

The government has pledged in its budget to build an additional 10,000 units of affordable co-op and non-profit housing across the province. If there is one item in this budget that most helps to alleviate the housing crisis Ontarians find themselves in, I would say it would be this one. The 10,000 units combined with the regular allocations under the federal-provincial non-profit program and the reallocation of Homes Now program funds for the quick-starts process should allow for 35,000 units of affordable co-op and non-profit housing to be developed this year. Of these 35,000 units, a majority will be rent geared to income.

While these 35,000 units will not solve the housing crisis in this province, they will be a large step towards it. A study performed in 1988 stated that the Sudbury region's housing supply problems would be largely alleviated with the construction of an additional 1,000 units of affordable housing. If the region receives its fair share of the 35,000 units based on its population, which is about 1.25% of the Ontario population, then 437 units of affordable co-op and non-profit housing will be constructed here. We will be watching to see whether the 35,000 units come to pass and whether they are shared equitably with the Sudbury region. Assuming they are, these units will deal a major blow to the crisis in housing supply in the region.

Housing supply is only part of the housing crisis and only part of the problem for low-income earners. Even assuming you live in rent-geared-to-income housing, your grocery bill and the cost of your children's clothes are not geared to your income and still have to be paid for.

The budget helps low-income earners in several ways: The $215 million set aside in the budget for social assistance will help individuals in genuine need and municipalities overburdened by high welfare costs; the $50-million enrichment of the Ontario tax reduction program will lower or eliminate Ontario income tax for over 100,000 low-income earners, making the total assisted by the program 700,000 in 1991. The number of subsidized child care spaces will be increased, allowing more single parents to get a job and get off social assistance. A $53.8-million provision will create 5,000 subsidized spaces and increase the salaries of chronically underpaid child care workers. Another $5 million will create 400 new spaces on Indian reserves.

It has been said many times that the best form of social assistance is a job. One of the reasons we support this budget is that it helps retain jobs for people and creates more. This budget will create or maintain 70,000 jobs in this province. Of that figure, 20,000 will exist because of the added 10,000 units of affordable non-profit and co-op housing.

Tens of thousands of jobs have been permanently eliminated in the last year or so of recession. This recession is much worse than the one of the early 1980s. In 1990, 65% of permanent layoffs were a result of partial or complete plant closings, whereas in 1982 the figure was only 24%. It is clear that these jobs are not coming back and a provincial budget that does something to maintain and create jobs is welcome.

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The federal government's cuts to established programs financing and Canada assistance plan transfer payments will come to $3.6 billion in the 1991-92 year and would have cost thousands of jobs in this province if the provincial government had not acted to maintain them. If the people of Ontario now owe more money on the provincial debt, it is because that debt has been transferred from the federal government through EPF and CAP cuts. We will each end up owing about the same amount, and thank God we have a provincial government that has the sense to maintain health and social services jobs when the federal government does not.

Why are jobs and the deficit such an important part of a presentation on the housing and social services aspects of the budget? Because the services provided by people who would have lost their jobs due to federal cuts are those that low-income earners use; because when jobs are lost, the people who lose them are often low-income earners, and many who were not end up as such, and as social assistance recipients; and because job creation, job training and day care initiatives in the budget are geared to allow people to get off social assistance and into education and the job market, helping low-income earners increase their opportunities in society.

In conclusion, I would like to say the provincial budget is a positive budget for those caught in the housing crisis and for low-income earners. In addition, it is the most compassionate and fiscally responsible response to federal cuts, the recession and the problems they have caused and intensified for low-income earners.

Thank you once again for the opportunity to make this presentation to this committee and I look forward to your questions.

Mr Kwinter: On a point of order, Mr Chairman: The agenda has one spelling for the presenter and his presentation has another. Could he just clarify what the correct spelling is?

Mr Schmidl: My name is spelled Schmidl. I spelled it right; you spelled it wrong.

Mr Kwinter: I just wanted to make sure who was right and who was wrong.

The Vice-Chair: That will be officially noted on the record.

We are going to start with the official opposition. Mrs Sullivan.

Mrs Sullivan: We had a presentation this morning from the Northern Ontario Regional Co-operative Housing Association which discussed many of the issues you have raised in relationship to the provision of co-operative and non-profit housing. I noticed in your brief you have suggested that if the Sudbury region gets its fair share of co-op housing, 437 units would be built here. They indicated this morning under questioning that for the entire area, the 18 co-ops that are served through the Northern Ontario Regional Co-operative Housing Association, they have had indications that 300 co-operative units will come their way. That is what they told us this morning. We might want to follow up, just to be certain.

I am very interested in your strong support for the budget, in relationship to the housing issue, because there are a couple of things that are absolutely critical to the provision of co-operative, non-profit or any other kind of housing that were left out of that budget. One of them was additional sewage capacity and one of them was provision for a speedup of the approvals process to ensure that serviced land comes on stream earlier so that in fact we can get the units built. I wonder if you would comment on those two things which, it seems to me, were significantly left out of this budget.

Mr Schmidl: I can comment on the second one in somewhat more depth than I can the first one. I know the Ministry of Housing is presently undergoing a consultation process regarding the whole non-profit and other housing systems. Certainly in the response that Crisis Housing Liaison is making to that green paper, the two green papers, we are suggesting some changes regarding the zoning process and speeding up approvals, that sort of thing. I do not know exactly what impact that would have on the provincial budget, so I cannot comment on whether it should have been included or not, since I do not know what financial --

Mrs Sullivan: It would certainly have an impact on the cash flow. But the other question relates to sewage capacity. I understand in this area most of the communities around Sudbury are at their limits in sewage and Sudbury itself is approaching its capacity on sewage.

Mr Schmidl: Are you talking about servicing to the actual sites where the developments would be built? I think the municipality is making non-profit and co-op projects pay for servicing to the site, so if this would have an impact on the budget, it would be --

Mrs Sullivan: If the plant is at capacity.

Mr Schmidl: Oh, I see, the total plant. I am afraid I do not know much about the capacity of the total sewage plant of Sudbury or whether we need an increase in the amount of capacity. I would hope that if the government were to be conducting a complete review of the housing system, especially as it pertains to non-profit and co-op housing, it would take that into consideration.

Mrs Sullivan: You should put it in your brief.

Mr B. Ward: He just did, by saying that.

Mr Phillips: I appreciate the focus on jobs and deficit in here. As you look at the budget, does it concern you that even as we head into "good times" we are still talking about unemployment rates in the 9% to 10% range as a result of this budget -- not as a result of this budget, but that is going to be the output of the budget. The number of unemployed people probably will continue to be at an all-time high for the next two to three years. What impact does that then have on your housing demands?

Second, I know you mentioned federal transfer payments. As you probably know, about 10% of the revenue for the province comes from federal transfer payments.

Mr Schmidl: They are a significant portion, yes.

Mr Phillips: Ten per cent of the revenue comes from federal transfer payments. I know it is fashionable to blame the feds, because that is neat, but even had they taken their transfer payments up 20% or 25%, that still would not have come close to making a dent in the deficit. I am just wondering if you are advocating that the federal government should be spending substantially more money or not.

Mr Schmidl: The federal government should live up to its responsibilities. I do not think they should cut EPF or CAP transfer payments. I believe the amount of the transfer payment that was cut was $3.6 billion, or that which would have existed if they had not reduced --

Mr Phillips: They actually transferred the same amount of money this year as they did last year.

Mr Schmidl: Yes. Accounting for inflation, though, it is less in real terms, I would imagine. Inflation happens everywhere, even the government. Certainly the federal government has made it more difficult for the provincial government, as far as I can tell, to fund health, social services and education by not increasing EPF and CAP transfer payments. You say it is fashionable to blame the feds. If the feds were doing what they were supposed to be doing, there would not be any need to blame them.

Mr Phillips: I am just saying that last year they transferred 5.5 and this year they are transferring 5.5.

Mr McLean: Your brief was explained very well and I was glad to see that table along with it. That gives us a little bit of an idea. However, I really have only one question and I would like your comments with regard to the housing end of it. I do not know how much housing has taken place here in Sudbury, but the lot levy that the municipalities or school boards are allowed to add to the price of that home, do you feel that is a good policy?

Mr Schmidl: I feel that part of the budget should have been a larger increase in unconditional grants to municipalities. However, the lot levies act as something of a deterrent to development, I suppose, but I think you have to look at the amounts that are there. I know in the case of non-profit and co-operative housing, it is built in as a line item in the capital budget. It is a cost that is taken into account, just as are taxes on land before you start construction and interest on your mortgage, so I am not sure it acts as a really significant deterrent to development.

Mr McLean: What percentage of your co-op housing, the funds, goes to architects, consultants, people drawing up plans? What percentage would you estimate?

Mr Schmidl: Architects, development consultants, engineers, that sort of deal? I would say, generally speaking, less than 5%. In some cases, it might be as high as 7%.

Mr McLean: Do you have any idea what the average costs of your units are here?

Mr Schmidl: The average cost for a two-bedroom, or what is called the maximum unit price for a two-bedroom town house is $105,000 or $110,000, and they go up, I believe, $5,000 for each additional bedroom.

Mr McLean: I know a development that runs about $118,000 is the average price. The three-bedroom is subsidized by the province by about $1,300, two-bedroom by about $800 and a one-bedroom by about $500. That is based on the residents who are in that residence. So the $150 million we are talking about that the public will be picking up to keep those floating year after year is a substantial amount of money and I would have thought we could have built them for less money than it is costing us.

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Mr Schmidl: I do not want to denigrate the quality of any of the co-op or non-profit units that are built in the Sudbury area because, generally speaking, I think all the projects I have seen have been done quite well. However, there is a point at which you are not building a unit that will last the length of its mortgage, 35 years; you are building a unit that is going to fall down after 20 years. And who is stuck with the mortgage after that when you cannot occupy the building any more? The government of Ontario. I think they are built right now to last at least the length of their mortgage. If you start cutting back on the maximum unit price, and therefore on what is going to end up as the mortgage, to cut operating costs I suppose you are going to end up with units that become uninhabitable, no matter how well they are taken care of, after 20 years.

Mr B. Murdoch: I notice one of the other briefs we had today said there was not too much building going on in Sudbury in housing, especially in the private sector. I was wondering what your thoughts are on the rent control, especially on Bill 4 and the rent bill that is going on right now. Would that have anything to do with cutting back a lot of the building?

Mr Schmidl: You are asking, would rent control affect the amount of private sector building?

Mr B. Murdoch: I am just asking your views on it because you are an expert on this kind of thing.

Mr Schmidl: I can best answer that by comparing it to the British Columbia experience, where there has been no rent control or rent regulation in effect for several years. Their vacancy rate situation is almost as bad as in Ontario. Indeed, there are a couple of municipalities that have the lowest vacancy rates in Canada, after Sudbury.

Mr Christopherson: Thank you for an excellent presentation. Particularly in light of the kind of assistance in which you are involved, in helping people in need of housing, I gather that would cover a fair range of assistance and not just one kind of assistance. You would be fairly familiar with all the needs of the individuals and the families you are helping. One of the statements you made in your presentation says, "If there was one item in this budget that most helps to alleviate the housing crisis that Ontarians find themselves in, I would say that it would be this one." Obviously we concur to the extent that this was one of the areas we expanded and were willing to spend new money on. We did not spend a lot of it. Most of the budget, as you know, was a matter of keeping everything in place in light of cutbacks, revenue losses and increased welfare assistance costs. In your own words, what kind of impact would you have seen on the people and the families you are trying to help here in Sudbury, if we not only had not provided the money for housing, but had not maintained the infrastructure of social assistance and all the other safety nets we have in Ontario? What would have been the result on the families you deal with now if we had gone in the federal Tory direction, if you will, instead of the Ontario NDP direction?

Mr Schmidl: I think it has been said that Sudbury is, or has been, largely recession-proof. I think that would end, had the provincial budget not followed the course you have just outlined. I mean, the 10,000 units improve the situation considerably. The infrastructure you are talking about would have been eliminated if the federal cuts had been passed on. It could have caused severe problems for the people of Sudbury. In fact, of the $215 million for social assistance, I believe $25 million was aimed at municipalities to take care of part of the welfare rolls. I do not know how much Sudbury has received, but I think without the receipt of that, the municipality would have been in some significant trouble.

Mr Sutherland: Looking over your statistics here, can you give us some indication about seniors and housing? I know you did not break it all down that way, but particularly just some of the policies here. I guess it comes out of a concern in my own riding about seniors, widows and single people whose spouses have died before them wanting to get into housing, living together in the housing, but there are some policies in place that seem to deter that. Do you have any here in Sudbury? Are there any concerns that way?

Mr Schmidl: There is an aging population here the same as everywhere else. I just heard somebody mention the home sharing program, which exists here in Sudbury as well.

Mr Sutherland: Oh, you do have one here.

Mr Schmidl: We see a fair number of seniors ourselves. However, I think our major population, in terms of clients served, is maybe between 18 and 35. That is the major client group we see, although we do see a reasonably large number of seniors. Certainly, with the addition of the 10,000 units as well as the other units that would be part of the ongoing program, that also eases the burden of seniors' housing. When you build a seniors' project, that means one person who is living in a house that is big enough for four or five people can move into a one-bedroom senior's apartment and let a family move into a three- or four-bedroom house.

The Chair: Thank you for appearing before the standing committee on finance and economics on the budget review.

SUDBURY WOMEN'S CENTRE

The Chair: The next group we have is the Sudbury Women's Centre. Would you please identify yourselves for Hansard at the beginning of your presentation. Welcome to the standing committee on finance and economic affairs. You have one half-hour, and in that half-hour try to save some time at the end for question period between the three parties present. Thank you. You may proceed.

Ms S. Roy: Hello. I would like to welcome the members of this committee to the Sudbury area. My name is Sharon Roy, and I am here as a representative of the Sudbury Women's Centre. With me is Donna Mayer. We both serve on the steering committee of the Sudbury Women's Centre. I am glad to have this opportunity to express my own and my organization's thoughts on Ontario's most recent budget. That a public hearing such as this one is being held can be seen as a positive indication that our governments may be beginning to recognize the need for greater public input into how our affairs are managed. However, I am a little concerned with the costs these hearings must require. Perhaps in the future more cost-effective methods of gathering public input could be utilized. Indeed, the new focus on economic and social equity, as well as the plans to incorporate multilevel involvement into the budget-making process, are suggestive of a long-awaited change in attitude. Feminists have long promoted a flattening-out of the traditionally pyramid-shaped power structures which have governed both our personal and political lives. The decisions to increase spending in order to aid abused women and to include input from MPs and segments of the public in the budget-making process indicate a willingness to round off the tops of our present hierarchical power structures.

While our struggle for greater equality has been undertaken chiefly to improve woman's position in society, we have not neglected to point out that every gain made by women has meant increased benefits for society as well. It is reassuring to see that the Ontario budget for 1991 clearly recognizes that economic and social equity are linked and that the government must therefore shoulder greater responsibility for social as well as economic conditions. Measures such as decreasing the tax burden carried by low-income earners and single-parent families, and increasing the amount of money available to provide services for abused females, will go a long way towards improving women's economic and social wellbeing. As women benefit from these changes, so will society. There can be no doubt that someone who is freed from severe economic hardship and/or abusive situations will be able to participate more fully in life than someone who is under constant and crippling hardship. For all these reasons, it is my opinion that the Ontario budget for 1991 is clearly moving in the right direction. However, as I will point out later on, it is important that we recognize this budget as only the initial step towards a more truly equitable economic and social arrangement.

Women's centres across the province, and indeed across the country, have given birth to other important community organizations, such as the Sudbury Sexual Assault Crisis Centre, Women Across Cultures and Joujoutèque, the latter of which is a play centre and a parents' educational and support centre. Recently the Sudbury Women's Centre successfully lobbied on behalf of Joujoutèque for a $1.1-million grant, which has been utilized for extensive building renovations. Even more recently, our centre has been working on a health study project to determine women's health care needs and how they can best be met. The ultimate aim of this project is to establish a steering committee which will oversee the establishment and subsequent operation of women's health clinics. Our involvement with Joujouthèque and the health study project are but two examples of how we act upon our commitment to working towards the amelioration of women's lives.

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Other services provided by the centre include a variety of clinics, information sessions and special workshops. For example, every month we offer a legal clinic which provides many women with their first contact with the legal community. We also provide valuable information and referral services and to this end we house a small reference library and keep track of all the varous agencies, individuals and organizations providing valuable services for women.

Another important role played by the centre is that of advocacy, which includes everything from seeking information and services on the behalf of individual women to lobbying and preparing briefs. In addition, our co-ordinator is a trained social worker who can provide counselling and crisis intervention services when required.

Perhaps our most important function is as a provider of the safe and secure environment where women can meet and develop important support system. We make a conscious effort to maintain an open and welcoming atmosphere at all times so that women will feel comfortable. I believe we have been quite successful in our efforts, for our steering committee offers a wide range of women. We vary in age as well as in occupation, religion, nationality and economic status.

The biggest problem faced by our organization is the lack of core dollars. There have been several occasions in the past when the centre has been threatened with closure due to lack of adequate funding. Our commitment is as great as the need for our services, for somehow we have always managed to stay afloat. The need to constantly focus on where and how we can obtain necessary funding creates a great deal of stress for those involved with running the centre. This budget speaks about the need to take proper care of the people of our province and recognizes that money spent on education and training is an investment in our future.

Women's centres have long been at work changing societal attitudes towards women and re-educating women about their rights and their personal worth. We have, in short, been working towards creating a greater social equity and therefore greater economic equity. We are still working towards those goals and when they are reached, we will still be working to maintain them. Surely it is time that our government recognized our important contributions by awarding us the funds required to continue this work.

Women have been trying for some centuries now to convince husbands and wives, churches and governments that wife beating is neither a husband's right nor a subject we can treat lightly. A lot of us like to think that wife assault is a phenomenon which we have pretty much gotten under control. The truth is that for many women, wife assault is still a matter of life and death. As recently as 1987, 6l.7% of all women murdered in Canada died as a result of domestic violence. Those women who survive the attacks can look forward to being 74% more likely to rely on sedatives and 40% more likely to take sleeping pills than their non-abused sisters. In addition, approximately 61% of the survivors will suffer from injuries that range in severity from bruises and welts to broken bones and internal bleeding.

We also like to think that we as a society are becoming more aware of these problems, yet studies indicate that if an abused woman makes it to a hospital emergency room, the chances that the source of her injuries will be properly identified are only 1 out of every 25 cases. Why do these women not tell someone about what is happening to them? The explanation is quite simply that the psychological and emotional trauma suffered by assaulted women can be just as serious as their physical injuries. In 1982 it was discovered that a little more than one half of women beaten by their husbands did not report the incident. When they were asked why they did not, 52% of those women cited fear of revenge as the reason. Sadly, 59% also believe their abuse was a personal matter.

One of the most important roles of the women's centre has always been to inform women about their rights and educate them as to their own worth. We also seek to change society's attitudes towards women. An important change that has surely been brought about by an increased awareness of sexual discrimination is a law that now requires police to lay charges against abusive men. We now recognize wife assault as a crime against society rather than as a crime against an individual or, worse yet, a husband's right or duty. And yet incidents of wife assault still occur with alarming regularity.

The Ontario budget for 1991 sees $12 million earmarked for new shelter beds and enhanced services for battered women. The money is both desperately needed and greatly appreciated. However, emergency shelters and short-term counselling are often not enough. As suggested by the severe physical and psychological trauma these women have endured, as well as the possibility that they have been using prescribed drugs as a coping aid, women coming out of abusive situations stand a very good chance of requiring long-term support.

Safe and secure places such as the Sudbury Women's Centre can provide some of the ongoing support these women require, but recent work on the subject suggests there are women who often need intensive daily support in order to ensure a successful return to a productive and fulfilled life.

If the abused woman has children who were witnesses to or who perhaps also suffered from the abuse, her adjustment problems will be even greater, for her children will also require special care. A mother who has severe problems of her own is not likely going to be able to help her children deal with theirs, and yet her children's problems cannot be ignored.

Some studies indicate that between 40% and 50% of assaultive men witness wife assault during their childhood. Another study suggests that over 50% of young offenders were found to have been exposed to domestic violence as children. These numbers need not be so high. Proper counselling can change the attitudes which shape the lives of these young people. In one residence, 25% of children thought it okay for a husband to strike his wife if the house was messy, but after a period of counselling none of the children approved of wife assault for any reason.

The problem with existing approaches to the problem of wife assault is that emergency shelters provide only temporary housing, and counselling agencies often have a six-month to two-year waiting list. Research has indicated that what is required is second-stage housing complexes which would provide abused women and their children with both the longer-term counselling and the housing required to ensure their full recovery. While it is true that such complexes would be costly, we should keep in mind that the crime of wife abuse is one that already costs society a great deal of money in terms of the human cost of the damaged lives of the wives, the children and the assaulters themselves. Can we really afford to continue to provide these people with inadequate services? Organizations such as the Sudbury Women's Centre can and do provide such women with long-term, ongoing support, but we must look to the government to provide the funds for the specialized services that these women and their children so desperately require.

One of the most important services the Sudbury Women's Centre offers is its telephone lines. Calls come from women requesting information or referrals to agencies that provide specialized assistance, or from women who simply want to talk and to come in on a regular basis.

Unfortunately, calls from women who require assistance because they have been sexually assaulted also come in to our centre far too regularly. I say unfortunately because despite all the attention that has been focused on this issue and despite all the money commitments that have been made in the 1991 budget, occurrences of sexual assault are a long way away from being eradicated. In 1989, there were 10,070 sexual assault cases reported in Ontario alone. In Sudbury, there were 210.

The Sudbury Sexual Assault Crisis Centre reports that the recent provincial government initiatives and increased budget spending in this area have enabled the centre to increase community awareness among local women as to what constitutes sexual assault, what their rights are and what services are available to them. As a result, the centre has been inundated with women seeking assistance. While funding has increased, there do not exist sufficient moneys to hire the additional staff required to meet the increased demand. Such funding must be granted or we will run the risk of seeing abused women unable to access the services they require, and overburdened workers unable to cope with the sheer numbers of women requesting their assistance.

In addition, there still exists a great need for public education. Of sexual assault victims, 62% still do not report their assaults. Studies indicate that women are failing to report incidents because they believe police can do nothing or because they are concerned about the attitude of police and courts. They also fear the risk of another attack. An alarming number of women still cite fear and shame as a reason for their failure to report their experiences. Clearly there still exists a need to educate and inform our professionals as well as the general public. Such mass efforts cannot be embarked upon without considerable funding.

It is estimated that 27% of women experience rape or sexual assault at some point in their lives. The funds provided thus far to help this rather large segment of our population are an excellent beginning to facilitating the recovery of these people, but a greater commitment is required if we are to ensure that as many people as possible become healthy and therefore productive members of our community.

I would like to let Donna Mayer speak now.

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Ms Mayer: Equality is of course the primary objective of the women's movement. Achieving equality is a long-term goal which requires the co-operation of all sectors of society and the personal commitment of all individuals.

This government's budget addresses economic equality for women on two fronts. The $125 million allocated to assist municipalities, school boards, hospitals and other agencies to further implement pay equity is crucial if the government is to continue to live up to its promise of pay equity. The $24 million allocated for employment equity in the Ontario public service shows leadership in providing fair access to jobs for women, natives, disabled people and other socially disadvantaged groups. Spending money on affordable housing makes a lot of sense to a lot of people. The benefits extend from the construction trades to the low-income tenant. Women and children stand to benefit a great deal. A recent study of unmet housing needs in the regional municipality of Sudbury showed that single-parent families were the largest group among the homeless surveyed. As well, of those homeless people over the age of 45 who were surveyed, the vast majority were single women.

Housing groups have described the affordable housing crisis which is happening in this community, but I will reiterate this for you. The vacancy rate for the private rental market has been at or below 1% for the last 10 years, well below the commonly accepted 3% level for market equilibrium. Furthermore, the vacancy rate for subsidized units has been virtually 0% for these past 10 years. That means the 1,900 subsidized units that are available in the Sudbury region do not become vacant very often. Right now the waiting list for these units is over 800 families long. The demand for non-profit housing is at a critical level in Sudbury. Commitments to build affordable housing must be made in significant amounts and on a continuing basis.

There were nearly 9,200 households receiving social assistance in the district of Sudbury last year. Since January 1991 the numbers have increased to peak levels, as we know. Forty percent of the recipients are children and many are single mothers. Living on social assistance is not fun. We can all nod knowingly about the humiliation and hardship as if we know, but the cold, hard facts are that social assistance levels are not enough to live on in this province. Last year in Sudbury, a single parent with two children received $14,556 in family benefits. That is nearly $3,300 below the poverty level. The cost of an average three-bedroom apartment in Sudbury would take nearly half of this woman's income. If she had to go and find a new unit on the market, she would be paying 65% of her income for this house. Little is left for other life essentials like food and clothing, and it shows. The primary food bank in Sudbury feeds 350 families a month for a total of 700 men, women and children. The Catholic Charities Soup Kitchen serves over 200 meals a day.

The provisions for social assistance in the Ontario budget epitomize the sad state of economic affairs in this country. The cost of $1.4 billion to add people to an inadequate and impoverished means of existence is a hard pill to swallow, but increased permanent unemployment demands immediate relief.

Had there been no recession, had there been no free trade, it is possible this $1.4 billion could have been spent on social assistance reform. That would have been $600 million short of what is actually necessary for proper reform as identified by the Social Assistance Review Committee in its 1988 Transitions report. Instead, $215 million was allocated to social assistance reform. This will provide some relief but will not greatly increase the standard of living for the majority of recipients. Although the tax relief in the Ontario tax reduction program is a humane gesture, women and children on assistance will still be living below the poverty line. The $1.4 billion for income maintenance is a legal and moral mandatory requirement precipitated by high unemployment. Social assistance reform is technically a discretionary expenditure, and the $215 million allocated shows commitment to the overwhelming task of meaningful reform.

The government's decision to fight the recession as opposed to the deficit is a wise choice. The immediate economic consequences of high unemployment and decreased spending power weigh heavily on the poorest people of our province. Women and children make up the vast majority of Ontario's poor. Measures to keep the economy functioning at a level which sustains current jobs and creates new ones are necessary to ease the impact of the recession on people's daily lives. As deficits rise both in Ontario and in Canada, it is easy to become alarmed. We should be alarmed but we should not panic. Panic leads to hysteria, which distorts perspective. Becoming obsessed with paying the deficit clouds the primary function of government, which is to provide essential services to its people.

The Sudbury Women's Centre believes people come first. There are many areas of the budget which we did not talk about. All of them are of interest to women, including health care, education and the care of our earth. The maintenance of essential human services is critical to the health and wellbeing of our communities. Spending in this area at this time is warranted. The social problems we are plagued with cost us greatly in both human and financial measures. The new spending on services such as sexual assault centres and shelters for battered women is certainly warranted. Spending here does not meet the need, although at this time it is a fiscally disciplined response to the problem.

Finally, the economic strategy of fighting the recession is imperative in order to keep people working at this vulnerable time. Personal economic stability plays a dominant role in daily family living. An economically unstable home can be a terrifying place to live.

We appreciate having this unique opportunity to participate in the government's budgetary process. We hope the information you gather through these hearings is valuable and, moreover, that it warrants the expense of such an exercise. The cost of these hearings would pay the operating costs of the Sudbury Women's Centre for over two years. If you decide you do not need to go through this process next year, we would appreciate the money. Thank you very much.

Mr McLean: I would just really like clarification. Sharon, are you related to Marcel?

Ms S. Roy: Yes, I am.

Mr McLean: Do you work in the same office?

Ms S. Roy: No.

Mr McLean: You have separate offices?

Ms S. Roy: We do not work in the same area at all.

Mr McLean: I see. That is all. Your brief was very clear and precise. I have heard most of it before, but I appreciate your time to come here.

Interjection: To reinforce it.

Ms S. Roy: That is right.

Mr McLean: That is what it is all about, reinforcement.

Mr B. Murdoch: Just one quick question. In your budget for the women's centre, how much do you get from the provincial government, what percentage?

Ms S. Roy: I am not sure. The way our funding works, it changes constantly. It would be practically impossible to tell. We are funded mostly through projects. We apply for a variety of projects, which is where we get the majority of our funding, and then we raise funds on our own.

Ms Mayer: Our centre is 10 years old this year. Originally we had received a lot of our project funding through the Secretary of State, but through cutbacks with the provincial government to social assistance programs and transfer payments, we no longer get nearly as much money from Secretary of State for those programs. We have to turn to the province, through the Ontario women's directorate, for other project funding. So the reliance on the province has increased as we have been kicked off the federal payroll.

Ms M. Ward: Thank you for your presentation. I would like to ask you about older women. Someone this morning was commenting about the growing number of seniors in Sudbury, and I recall a couple of weeks ago in Toronto that a group making a presentation was talking about the "invisible senior." There is an image nowadays that seniors are becoming younger, that they are very active, mobile, they travel when they retire and so on. They were talking about the invisible ones whom you do not see because they cannot even afford bus fare. I think they predominantly tend to be women.

Your agency provides a variety of services, not just -- I should not say "just" because that seems to say it is not of the importance it is, but not just assault counselling and so on. You have a variety of services for women, do you?

I wonder if you could describe the needs you see for the older women who are very often underhoused. If they are living, say, on a government pension, they probably cannot even afford transportation and they are very isolated and probably not very demanding. Do you have any programs in place to reach them? Are you able to reach them? What do you see as the needs for the older women in the community?

Ms S. Roy: We do not have any specific programs in place for older women yet, but that certainly is something we can look into. They are welcome to access any of the other programs, like our legal clinic, for example. We do make attempts for those women who have difficulty getting to our centre. Because of lack of funding, it is not a terribly accessible place, and we do try to make arrangements to get women who require our services to the centre when they wish to be there. We also have a list of referral agencies, so if they need specific services they can call us and we can refer them to the agency where they can get the help they require.

Ms M. Ward: I think one of the problems is that they may not access the service, and that is a difficulty: How do you reach the people to tell them that the services are there and to determine what services they need?

Ms S. Roy: We make a great deal of use of community advertising in the area through radio and television and the print media to inform people about events. We also have paper blitzes. We put posters up and we have activities going on. A lot of it is through word of mouth. We are associated with a lot of other women's organizations in town as well and get the word out about our activities that way.

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Mrs Sullivan: I was very interested in your presentation which seemed to me a succinct summary of some of the state-of-the-issue matters affecting women in Ontario today. I am surprised at the rapid embrace of the $12-million increase in funding that is included in this budget. In my own constituency, we are looking for a shelter. We have been very active in raising community funding for the provision of that shelter to meet very serious needs. To accommodate the purchase of that shelter in my community will cost $1 million. There is an additional $12 million allocated in the budget. It is not very much, so I am quite taken aback when I see women's groups and advocates for women who are embracing this budget wholeheartedly without having a significant look at what the needs are.

Ms S. Roy: Excuse me. We did not embrace it wholeheartedly. I said it was a great start. It was a good start to see us receive that money, but it is nowhere near enough. I also pointed out that the emergency shelters themselves are not adequate, and neither are the counselling services that are being provided to women right now. We need more of that, and we need more money as well. It is an initial step, and it is nice, but we have a long way to go yet.

Mrs Sullivan: Good. Are you part of the Decade Council? Does your organization belong to that?

Ms Mayer: Not exactly. That is northwestern Ontario.

Ms S. Roy: We network with them, yes.

Mr Phillips: Help me out a little bit on the budget, because in my recollection of the good old days when we were around, the budget had gone up fairly substantially in this area. It seemed to me each year we tried to allocate a significant increase, so it always offends me a little bit when I hear it is a start, when I would have labelled it a continuation. But just in terms of the last five years, the revenue that your group would have gotten from the province, has it been going down? What would it have been five years ago, and what was it last year or this year?

Ms S. Roy: I do not have exact figures, but I do know that it has been going up.

Mr Phillips: Up? From what to what?

Ms S. Roy: I do not have exact figures.

Mr Phillips: Are you the executive director?

Ms S. Roy: No, I am the president, but it does not mean a whole lot. We are not a hierarchically structured organization. We each do the best.

Mr Phillips: Who knows the finances, then? Is it you?

Ms S. Roy: No.

Ms Mayer: What you have to understand about women's centre funding is that we operate on a project-to-project basis. We grab whatever project is available to help operate the main service of a referral and information centre. There are no operating dollars for that available anywhere, so we have to grab what is available.

Mr Phillips: I understand that.

Ms Mayer: More and more in the last few years, there have been programs through the province for issues involving violence against women, sexual assault, employment equity, those sorts of things, and women's health, which is how we have tailor-made some of our goals to get what funding is available. So it has gone up in that we have applied for more provincial money because there has been less federal money available.

Mr Phillips: I understand that, but five years ago what might it have been? What was it last year?

Ms Mayer: We get about $12,000 a year through the Ministry of Community and Social Services' community neighbourhood support program, which is money we are able to apply to our operating expenses and is not project-related and is given according to our own fundraising efforts. That is the most consistent funding we have received from the province, in addition to special project dollars through the Ontario women's directorate. Most specifically, we have been running kwon-do courses, which is self-defence for women, because it is a very direct way of dealing with sexual assault.

The Chair: Thank you for appearing before this standing committee on finance and economics and for your views on the budget review and your comments.

Mr Kwinter: On a point of order, Mr Chairman: The Sudbury and District Chamber of Commerce has attempted to get on this agenda. For some reason, they are not on it, but they are here and would like to make a brief presentation. Could I get consent to have them do that?

The Chair: We have one problem: We are leaving at 5:15. The taxis are out there for our flight back to Toronto. But how about -- does everybody agree to five minutes? That is about all we have.

Interjection: Did they apply to the committee?

Mr McLean: Why were they not put on?

The Chair: Why were they not on?

Clerk of the Committee: They were not on the contact list.

The Chair: On the choices of who was going to be on, is that it? If we do that, we are going to change our flight plans.

Mr Sutherland: We did not hear from a chamber of commerce today, and if they can make their verbal presentation quickly -- we obviously will not have any time for questions -- then maybe we should try and accommodate them, since we have not heard a regional voice from that group today.

The Chair: Maybe we will not get a question period, but you have a brief?

Ms Warwick: Yes.

The Chair: Okay.

SUDBURY AND DISTRICT CHAMBER OF COMMERCE

Ms Warwick: It is very short, and I am a fast reader. My name is Jeanne Warwick, and I am president of the Sudbury and District Chamber of Commerce. For some reason, we were supposed to be on the agenda today, but we were not. I do not know what happened, and I feel we represent the business community here and we should be heard from. So if you will bear with me for two minutes, I will be real fast.

The Sudbury and District Chamber of Commerce, now in its 96th year of leading and serving the Sudbury area business community, represents over 1,000 businesses throughout the regional municipality of Sudbury, or, if you wish, employers.

Our membership encompasses both the multinational corporation and the small entrepreneur, but primarily we represent small business, the backbone of our economy.

The Sudbury Chamber of Commerce, along with many of its counterparts from throughout the province, has long been encouraging governments at all levels particularly federal and provincial governments, to adopt an attitude of fiscal restraint and responsibility. The April 1991 provincial budget, in our opinion, does not address this mindset and in fact does little to alleviate Ontario's economic woes. We would have preferred the government to set an agenda that provided an opportunity for economic recovery by restoring investor confidence in the economic future of our province. While we are thankful the provincial Treasurer did not introduce any new taxes and, in particular, no minimum corporate tax, we remain unconvinced that this will not be introduced at some later date, and that in fact the corporate tax is a foregone conclusion. This is unlikely to inspire much-needed investor confidence. The provincial budget sees government spending increasing by over 13% and the consolidated deficit to $9.7 billion, up from $3 billion last year. In our assessment, these adjustments are unjustifiable and unacceptable. We see the province heading in a very dangerous direction. To expect to be able to eliminate the provincial deficit within the next seven or eight years, as Mr Laughren proposes, is overly optimistic, in our estimation. One of the factors of our achievement of economic recovery is the ability to control inflation, and one of the keys is controlling the public sector wages. With the Treasurer's failure to put any restrictions on public sector settlements, this picture does not look promising.

Visions of the provincial government rearranging the deck-chairs on the Titanic come to mind. Rather, we would suggest that when the water is coming into the boat faster than you can bail, the most important thing to do is fix the hole. Without some solid and positive signals from the province that will restore business confidence and that demonstrate the government is serious about creating a prosperous and sustainable economy, potential investors will look to other provinces and beyond for job creation and investment opportunities. We heartily support the government's call for consultation on business and economic issues, and firmly believe that the business community must have a say in Ontario's economic future. Unfortunately the consultative process has been seriously lacking, and this provincial budget does not give us much indication that the government is listening.

The Chair: Maybe we can get one question, a short one, one minute.

Mr Phillips: I just have an observation. There is no attempt to balance the budget in seven or eight years. They will balance the operating. There will still be a $6-billion deficit on the current calculation, so it is even worse than you think.

Ms Warwick: I have heard that rumour.

Mr Phillips: It is in the budget. I will show it to you.

Mr McLean: I will make an observation. There were 14 tax increases in the last budget. Your brief said there were none, but there were 14.

Ms Warwick: I am talking about corporate.

Mr McLean: Oh, corporate taxes.

Mr Sutherland: On the consultation process, the Treasurer and the Treasury have met with over 200 groups. The Premier has met with many, many groups. I think we need to categorize what we define by consultation. Consultation is meeting with groups, hearing what they are saying. It does not mean, in all cases, that groups are going to get everything they want. But this government has been consulting. The Treasurer has. This committee had pre-budget hearings where we heard from many different groups, including the Ontario Chamber of Commerce, so I do think that point needs to be stressed, that consultation is occurring on a regular basis.

Ms Warwick: Perhaps the chamber does not feel that way.

The Chair: I would like to thank you for appearing. As you know, if we stay on much longer, we will spend another night here in Sudbury.

The committee adjourned at 1702.