Committee Transcript 1991-Aug-21 | Legislative Assembly of Ontario

The Chair: Mr Bob Wood is the first witness. You will have 15 minutes for your presentation. Try to leave a little time at the end for questions and answers.

Mr Wood: Mr Chair, members of the committee, you have the duty to study a budget that is the worst policy mistake in the history of Ontario. That covers a lot of ground. It taxes too much, spends too much and borrows too much. It kills jobs, fuels inflation and is out of sync with the fiscally responsible direction of every other government in Canada.

This budget is based on the NDP government's failure to understand certain basic truths about Ontario economic policy-making in the 1990s. These truths are:

Ontario's budget policy must be consistent with the federal government's, which must be consistent with the developed countries'. France, a country of 55 million, tried inconsistent policies 10 years ago, with disastrous results. Developed economies are too interdependent for any country, let alone region, to try to go it alone.

John Maynard Keynes's 1930s idea of increasing spending during a recession has become outdated. People know that most spending increases come automatically now -- more social assistance payments, etc -- and spending on new programs can very quickly get out of control and become inflationary. This is particularly true now when the spending increases are coming too late in the recession and will only fuel inflation later, as happened in Ontario after the last recession. Voters know that the best way out of a recession is to let market forces end the recession. Massive new spending simply compounds the problem.

Big deficits are bad and destroy any financial flexibility a government would otherwise have. We need only look to Ottawa for proof. Deficits are also the unfairest taxes of all, ones imposed by us and paid by our children and grandchildren.

Taxes in Ontario are already too high. The tax revolt that swept the province earlier this year is based on a high degree of voter frustration, and these people "aren't going to take it any more." Ontario is now the highest-taxed jurisdiction in Canada. We will pay a heavy price in lost jobs if we do not change this.

Ontario desperately needs restraint in government spending. In the last six years, spending has doubled. There does not seem to be a single special-interest group that Bob Rae can say no to. The reason this province has lost so many jobs in this recession is that our costs, including taxes, are much higher than other provinces and states.

Bob Rae has become Ontario's Donald Trump. He spends other people's funds without regard to restraint or value for money. The ultimate result will be to make Ontario the same kind of economic basket case that the Trump organization now is. Mr Rae believes that more is always better, be it taxes, spending or debt. Businesses before Trump and governments before Rae had learned the hard way that this is wrong, but we are about to experience again the old adage that those who do not learn from history are condemned to repeat it.

This committee should recommend the following program: an immediate tax freeze -- any tax increase must be balanced by an equal or greater tax cut; a balanced budget within two years; a serious program to control government spending and get better value for our tax dollars; tax cuts oriented towards creating jobs once the budget is balanced. Only these steps will avoid the economic mess into which Ontario is sinking.

In conclusion, let me leave you with two thoughts. The severity of the recent recession in Ontario was the direct result of our costs being too high in relation to neighbouring jurisdictions. A major cause of our cost problems was David Peterson's massive tax-and-spend policies. It was like prescribing poison to see if it would make the patient feel better. The NDP government has continued the Peterson tax-and-spend policies with a vengeance and has added a new twist: the biggest deficit ever. Bob Rae's financial polices are like prescribing more poison to an already sick patient. The tragedy is that the longer this goes on, the weaker our economy will get and the longer it will take to recover.

The final point I wish to leave you with concerns public attitudes. There is a deep malaise among voters and they are not going to suffer silently much longer. If the politicians do not get the message soon, citizens are going to take matters into their own hands, the way the people of Blenheim recently did for a day. Ontarians are not very far from a large-scale tax revolt right now. It is too early to tell what form such a revolt might take, but we may have to require that no tax hike and no increase in public debt can be effective until confirmed by a direct vote of our citizens. One thing is certain: This budget is leading us to economic disaster, and the sooner we change course, the better.

Mr Phillips: First, I do not know how well you have examined the budget, but there are many ways to balance it. One way they are looking at balancing it is by putting capital into debt and putting many of the expenditures in other areas, like Hydro and what not. I would like your thoughts on what you mean by a balanced budget.

The second one is that most economists we have heard from believe that Canada and Ontario are well on the way to recovery now and that things are going to be fairly rosy in the future, which is in contrast to your kind of prediction here. I am wondering if you would care to comment on that.

Mr Wood: By a balanced budget, I mean a balanced budget under the current accounting system. In other words, I think we should go from $9.7 billion down to zero. I do not say the predictions of improvement in the economic cycle are wrong; I think they are right. What I am saying is the policies of the Ontario government are going to sap the recovery in Ontario rather than augment it. It is not that I think we are going to continue in a recession; it is that I think the policies the Ontario government is following are going to make our recovery weaker and make the next recession worse. I think the economic cycle will continue to apply to us. The problem is that our economy is going to be a lot weaker than it has been in the past.

Mr Phillips: I do not personally disagree with that, but as the NDP call it, the "prestigious" Conference Board of Canada is predicting Ontario may have the most robust economic recovery of any province, in spite of what you just said. I am wondering how you might explain that.

Mr Wood: Certainly their crystal ball has not been perfect in the past, and we are starting from a much weaker base than the western provinces in terms of the depth of the recession. Those factors tend to make a recovery look stronger, if you are lower to start with. I guess only time will tell. Our economy is clearly a lot weaker now than it was eight years ago. That is why the recession has been a lot worse in Ontario this time than it was in 1981-82. The figures are irrefutable on that. I am saying that if these policies continue for another four or five years, we are going to be that much weaker again.

Mrs Cunningham: One of the criticisms we get when we take the positions that you have taken, and I happen to agree with them, is that we are out to cut out all the social programs. The question you will probably be asked, unless they choose a different one today, is, if we did in fact achieve a balanced budget, what would happen to social programs? If you are talking about a balanced budget, what kind of things would you look for in doing that? What would you look at?

Mr Wood: I would look at the mistakes the government made in the budget it just presented. I would reverse what they did in the current budget, which would get us fairly close to a balanced budget, and I would then see what could be done by way of spending control and better value for tax dollars. When you have a $40-billion budget, it does not take a large percentage cut to cut $3 billion out of your expenditures.

Mrs Cunningham: The second question I have is with regard to comments, again both from presenters and from some of my colleagues across the way, with regard to interest rates and the federal government. Most of the briefs before this committee in support of the budget say two things. The first is that it is a great budget even for the construction industry, which is hard to believe. I will tell you the construction industry in London did not say that yesterday, but the one in Toronto did. The second is that the federal government is the real problem here, especially with regard to interest rates.

Where I am coming from is that I was privy to some meetings with Japanese lenders on the weekend in Victoria, British Columbia, who are telling us that they are not particularly interested in helping us much further, and people know that they already have $45 billion invested in our debt. If you could perhaps remark on the three points I have raised, I would appreciate it.

Mr Wood: I think the construction industry is dependent upon the economic health of the province. Certainly the policies between 1982 and 1990 clearly sapped, in a major way, the economic strength of the province. I say that this budget is going to make that situation worse. We are all basically in the same boat. Giving money to a particular sector does not really help it, other than in a very short-term way. Either the economy is strong or it is not, and I say it is going to be a lot weaker in five years than it is now if these policies continue.

I think the federal government has done a reasonable job on interest rates, because the massive deficits that it has, and to a lesser extent this province, have forced it to have high interest rates. High interest rates are directly related to the massive deficits the federal government is running.

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Mr Christopherson: I would like to start by thanking Mr Wood for his presentation and for taking the time to come here today.

I note that you start your written presentation with an acknowledgement that you were a PC candidate in the last provincial election. Therefore, I found it interesting. To follow up on a question from Ms Cunningham regarding the balanced budget, the opposition parties have been rather adamant along the way to be sure people did not believe they were saying that there needs to be an immediate balanced budget. When we have suggested that is what they want, they have challenged that and said that is not their position. I see you have stated there should be a balanced budget within two years.

First of all, to get to a balanced budget, you are talking about massive -- not tinkering, not paring back -- cuts in expenditures. In light of the fact that you had run and have offered up that information of looking to be a part of this Legislature, can I ask for just a little more detail rather than just "look for control of spending and try to find inefficiencies," when we are talking about that kind of massive cutting. Given your own involvement in the political process, could you narrow that down somewhat and give us some sense of where you would start if indeed you were to begin looking for a balanced budget within two years, in light of the fact that even your own party colleagues have not taken that stand?

Mr Wood: Yes, I would reverse all the spending increases contained in this budget. You can debate just what are spending increases and what would have happened anyway, but I think that would reduce the deficit by about $6 billion, plus or minus. You can play around with what is the right figure. I would look at the increases year by year over the last five years which would get us to more than a balanced budget.

What I would also do is look at across-the-board controls on any increase after inflation. Typically we can look to 2% to 3% growth. Whether that is going to happen in the next few years, time will tell. If we have that in our revenues in real terms, that gives us over $1 billion a year. Those are the areas I would look at.

Mr Sutherland: I find that very interesting, because I believe if we went to a balanced budget, it is something like $147 million per riding. There are three ridings here in the London area, so you are talking, at a time when the private sector is not investing anything, of taking $450 million out of the economy of the city of London.

I just wanted to ask you about Blenheim -- you mention it here -- and about its tax revolt day. We heard a great deal about how they did not charge any sales tax and everyone flocked there.

What I want to know is, did they close down all their doctors' offices? Did they charge tolls for their roads? Did they take away all the social services for the day? Did they offer any of those services at the same time they were having this tax revolt?

Mr Wood: I think that question is, in essence, a red herring. What the people in Blenheim were saying, of course, was not that they were not going to pay any taxes. They were making a symbolic gesture that taxes were too high. In that, I think they are quite right. They are not thinking -- nor is anybody in this province -- in terms of not paying taxes. What they are thinking in terms of is paying taxes that are fair and are economically sensible. Taxes are too high and people are going to do something about it one way or the other. It would be very interesting to see how many candidates run in the municipal election and are elected on the platform of a tax increase. Darn few, I will predict.

The Chair: Mr Wood, thank you for your presentation.

Mr Wood: My pleasure.

CANADIAN AUTO WORKERS, LOCAL 1520

The Chair: Would CAW, Local 1520, please come forward. Welcome to the committee on the budget review. I see you are on for 10 o'clock and it is 9:15. The other two presenters are not in the room yet. This will save time and give everybody an opportunity to make a presentation. For the purposes of Hansard, please identify yourselves. You have one half-hour to make your presentation. In that half-hour, try to save some time at the end of the presentation for questions and answers from the three parties. You may begin.

Mr Witherspoon: First of all, good morning. My name is Rick Witherspoon. I am the president of CAW, Local 1520, and my co-presenter this morning is our financial secretary, Dusty Miller. Dusty himself resides in St Thomas and I am from London.

Local 1520 represents close to 3,500 members employed at the Ford Motor Co St Thomas assembly plant. For those of you who are not familiar with that facility, we would like to give you a little background so you will have a better understanding of just exactly what we do out there.

The location itself is on Highway 4, just north of St Thomas and is on a parcel of land of about 635 acres. We actually have over 44 acres of concrete floor underneath one roof where the production takes place, somewhere in the vicinity of 2.2 million square feet of actual production space, with over 12 miles of conveyor systems that run through that plant.

Looking at the facility itself during normal production, if you are looking at straight-time hours, as far as equipment and supplies coming into the plant are concerned, we unload somewhere in the vicinity of 155 transport trucks a day. That has probably increased dramatically recently, now that we have gone to a new production line of cars and are involved in the just-in-time delivery system. We also use the rail system and probably unload about 55 rail cars a day to supply our production.

As far as consumption is concerned, we use over 100 million kilowatt-hours of power each year, which would be the equivalent of what it would take to run close to 9,000 average homes; as far as water is concerned, over 400 million gallons of water a year or the equivalent to run 5,000 households; as far as natural gas to keep the place supplied and running and heated is concerned, the equivalent of what it would take to heat over 5,000 homes in this region.

At present, looking at our production system, we have over 100 robots within the system that do a lot of the different processes: welding, sealer operations and actual installations. As far as production is concerned, if you were basing our production on a 40-hour week looking at the capacity where we can normally build, when everything is right, 60 units per hour, we have the capability of building 250,000 cars a year. If you are looking at a 48-hour production schedule, which we have been running now and unfortunately have been doing almost for the last 10 years, over the course of the year we have the capability of building 288,000 units.

In actual production time, it takes about 20 hours to build a car. We put one car off the assembly line once every minute. From start to finish, where you actually start off with a piece of metal and end up with something rolling off the end of the assembly line that is running in a finished unit, that takes about 20 hours.

We had our peak capacity back in the mid-1980s, where we built in excess of 280,000 units per year. The models we are building now are the Crown Victoria and the Grand Marquis; I am sure you have all seen the new version that exists out there. To build that car, it takes in excess of 4,000 parts per car that have to be assembled in our plant, with over 2,000 welds to hold it together.

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As far as manpower is concerned, when the plant started back in 1967 we had approximately 1,500 people on roll. In 1991 we find ourselves with about 3,000. If you want to break that down into regions to give you some kind of idea, from London we have approximately 55% of our workforce, from St Thomas about 25% and the other 20% would be spread around the surrounding areas. Currently we are in a position where approximately 400 of our members are on indefinite layoff with very bleak prospects of ever returning to our plant. Because we find ourselves in that position, we felt compelled to request standing before the budget committee. I personally would like to welcome all you committee members to London and thank you for your efforts to make sure the public voice is being heard.

Currently we find ourselves in the worst recession experienced in the last 50 years. Working people all across the province are having to endure tremendous hardships. Unlike other recessions, this one is more serious because its effects are expected to last even longer, with 65% of the major layoffs due to permanent plant closures while bankruptcies have increased by 75% in Ontario. Compared to the recession of 1981-82, twice as many Ontario workers have lost their jobs in the first year of this recession.

Job losses in this province have totalled 236,000, an increase of 4.3% in unemployment compared to an increase of 2.1% during the 1981-82 recession. Ontario's rate of job losses has been over twice that of the national average and accounts for almost 80% of the national jobs lost. The most unfortunate part of this is that many of these jobs are gone for good. In addition, 43% of those jobs that were lost were in the high-wage manufacturing sector. The implications for government revenues, let alone the impact on those who have lost their jobs, are obvious.

In this government's first budget a choice had to be made. I am glad to see that while most governments are slashing much-needed programs, this government has not backed away from its responsibility to protect working people in tough times. Those denouncing the present budget would have the public believe that the $9.7-billion deficit is a product of the budget and reckless NDP spending, when the fact is that the deficit would have been around $8 billion had the government done nothing.

It is especially important that we not lose sight of the reasons behind the deficit, that most of the deficit comes from the reality of the recession itself: falling revenues, increased costs in health care, social services and education. A very large part of the deficit is a direct result of the cuts in federal transfer payments. In fact, $1.6 billion of the NDP deficit is actually the work of Brian Mulroney. This, coupled with the federal policies of high interest rates, the high dollar and free trade, has had devastating effects.

Something else we must keep in mind is the fact that the previous provincial government campaigned not only on a balanced budget, but on a predicted budgetary surplus. The reality was that this government took power with a $2.5-billion deficit. In addition, another $3 billion of the deficit is due to increased spending to maintain the levels of existing services, primarily in health care and education. When all of this is totalled up, we find that the NDP government's spending on new programs adds a mere $1.5 billion to this deficit, with over half of that going directly to job creation.

Those who term the deficit unmanageable need to put it into perspective. The Mulroney government spends 34 cents of every tax dollar collected on its deficit while the Ontario government spends 12 cents, far below the federal rate and less than the debt charged by most other provinces.

No one likes to see a deficit, but spending money is critical to stimulating economic growth. The first NDP budget contains initiatives designed to fight the recession while maintaining services to people: programs to maintain or create 70,000 jobs; a wage protection fund to protect workers if their employers go bankrupt; taking 120,000 low-income Ontarians off the tax rolls while raising taxes for those making over $84,000 a year; 10,000 new non-profit or co-operative housing units, which will create over 20,000 jobs; an anti-recession program to help municipalities, schools, school boards, hospitals and colleges -- for example, in London over $1 million for a new facility for the art gallery, $250,000 towards sewer and road work, $687,000 for renovations and improvements to the St Joseph's Health Centre, over $1 million to help in renovations with Marion Villa here in London, in St Thomas an estimated $10 million towards bridge repair, road work, sewer repairs and a new recreation centre, and there is no question that money is going to go to generating thousands of person-hours of work -- the decision not to piggyback the provincial sales tax on top of the GST, leaving $470 million in people's pockets; money for research and development; relief for farmers; social assistance reforms; additional funding for victims of sexual and domestic violence.

Liberals and Conservatives say they would have a much lower deficit, but at what cost? What would a balanced budget look like? To balance the budget, two things have to happen: increase revenues and cut services. Let's increase some revenues: the sales tax in the province from 8% to 9.1%; individual income taxes by 14% of current levels; hike taxes on gasoline and tobacco by 14%. Let's cut some spending: cut spending to our schools at all levels by $920,000; cut spending to social services by another $726 million, with the remaining $1.5 billion to be spread among the other 20 or so ministries. The end result may well be a balanced budget, but what would that mean to a city like ours?

In a community like London, people would be faced with a 14% overall provincial tax hike. Health spending in London would be cut by $39 million. How many beds would that be? How many nurses' salaries is that? Education spending would be cut by $21 million. How many classrooms would have to close? How many teachers would be thrown out of jobs? Social service spending would have to be cut by $16.5 million. Is a city like London going to be able to take up that kind of slack, or do we simply cut families off, keeping in mind that 40% of those recipients are actually children? Eliminating the anti-recession programs would eliminate more than 1,500 jobs in a city the size of London.

In closing, the question I would like to ask the members of this committee is, would a balanced budget produce the kind of Ontario we want? Would a balanced budget make London the kind of city you would want to live in? Our answer is a resounding no. In our view, the budget is a major step in the right direction. It represents an investment in the people of Ontario and this budget lays the groundwork to sustain prosperity into the 1990s. On behalf of CAW, Local 1520, thank you for the opportunity to make our presentation.

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Mrs Cunningham: Thank you for your presentation, and especially for informing us what work you do and would like to be doing even more of at Ford. I really appreciate it. Coming from my point of view, I suppose we would have a philosophical disagreement with regard to a balanced budget, but for me as an individual, probably this year a balanced budget would not have been possible. Others say it would have been. I do not think it would have, but it is certainly something we strive for. The previous presenter was talking about a balanced budget over the next two years. That would be a real challenge, but something I think we have to work towards.

The bottom line for myself in living in this city, and for my children, is that there will be lots of work for them. The one thing for myself, and I would like you to comment on what I am saying, is that one of the reasons people are not investing in Ontario -- I have been involved with three or four different industries coming to London in the last four or five months and we have been somewhat successful with a couple of them, but people who were looking at us five years ago are not even looking at Ontario. I think part of it is this uncertainty that we face and the fact that we are running a big deficit.

When I was first elected in London North, I was appalled to think that my kids would have to pay back a debt of some $20 billion, and I am even more appalled to think that in three more years that could be $80 billion. So as a parent, I have a different point of view.

I have seen where you would make the cuts. Mine would be different, and they would certainly be phased in, probably over about seven years, but it would be my goal. I would just like you to respond to what I say to the public when I am looking for their votes, because that is how I would do it if I were in government now.

Mr Witherspoon: Our view of course does differ somewhat. I guess you, being of political stripe, know or have an opportunity to talk to some of the people who are either coming or going from the province as to whether or not they find it economically sound here.

I am a parent as well. I have two children who are going to be going out into the workforce at some point in time in the near future.

Quite frankly, looking at the budget itself and whether or not it is going to stop people from coming into the province, I turn the tables again, because I think a lot of these jobs that are being lost and the direction in which they are going is not necessarily because of this provincial budget, but is because of some of the things our federal government has done to us: the whole business of the free trade agreement, the conversation now of a trilateral agreement.

You want to get into the whole business of talking about competitiveness and whether those people are going to be able to come into Ontario and compete. If we are going to talk about competing with people in the southern US and about competing with people in Mexico, if our people are going to work for $3 a day, I guess we can compete.

But that is not the issue at hand, because we have a good, stable workforce. In actual fact, over the past little while we have actually started seeing reports of people who have gone to Mexico or the southern US who are coming back. It is costing them more to produce things, but they are getting a reliable workforce, people who will come to work every day. We have a good workforce. We have a reliable workforce that, given the opportunity, can build extremely good-quality products and what have you that can go back into society.

Mrs Cunningham: I do not disagree with what you are saying, by the way. I would come to the defence of the federal government, no matter what party was in power right now, and I will say that openly and I do say it openly, in that the debts that were built up over the last decade have caused us to be in a terrible mess. My colleagues will be fed up with me talking about being in Victoria, but some of their colleagues were there too and they had the same opportunity I had to listen to the Japanese community talk about charging even higher interest rates to the Canadian government. We borrow over $53 billion now.

I find this whole thing frightening and my position is that we have to manage much more wisely. I speak, by the way, as a person who worked for the government with the Ministry of Community and Social Services. I would put all of my money into the front line, with the social worker and the family, as opposed to the layers and layers of bureaucracy, to try and get things done. So I do know where there can be some cuts.

On something you said with regard to the future and our kids and attracting jobs, we did hear from one person yesterday, and it is a group that I am familiar with, for the small business community out near Fanshawe College. One of the businesses that was here yesterday happened to be, to put it in a wide term, in technology. We chatted last evening on the phone. Most of those businesses find themselves quite competitive, but they are very small. I think there are places where we are competitive, basically because I think we do have some bright young people who will contribute to the world, and second, I think we do have a great workforce with good ethics. But one of the --

The Chair: I am afraid I have to cut you off, Mrs Cunningham. The time is up.

Mrs Cunningham: Could I just ask a question? We started this morning at 9 o'clock. This group started at 9:30. Where are we going to make up the time?

The Chair: This group started at 9:15.

Mrs Cunningham: Are we going to lose some time, because I think they are very sincere in their presentation.

The Chair: But each party has its opportunity to ask, an equal amount of time in questions.

Mrs Cunningham: Can we not have more time with this group, since we have time to make up?

The Chair: We do not know, because the other group can come in.

Mrs Cunningham: Can we come back at it then if the other groups do not come in?

The Chair: We have been following the schedule. What we have done is fit in another group. I am sorry, but your time has run out.

Mr Christopherson: To Rick and Dusty, welcome. Thank you for the hospitality we are receiving here in London. I am enjoying your comments, and obviously the opposition members are too, based on their desire to continue dialogue with you.

A straight, simple question: There has been a fair bit of discussion by a lot of presenters and by opposition members about the ability of Ontario business, particularly manufacturing, to compete. I would like to ask you how competitive you feel the Ford Motor Co in St Thomas is.

Mr Witherspoon: I guess with that I would have to ask, who are you asking us to be competitive with? If you are talking about the Big Three throughout the rest of Canada and the United States, we as union representatives sit down with the company on a regular basis to look at the state of our economics as far as the company in comparison is concerned. There is no question that we compare, that we stack up with anybody else who is producing the calibre of vehicles that we are. I think it is important that when you talk about that, you have to deal with apples and apples. As far as any other manufacturer that is building the same type of units that we are is concerned, we stack up with anybody -- probably better.

Mr Christopherson: That is the answer I was hoping to get, because the questions from the opposition members of some witnesses tried to lead down the path that we are not competitive and that as a result of this government being elected and the measures of this government, the entire economy is going to hell in a handbasket and we are going to be totally uncompetitive. That is why I thought it was important particularly to ask union representatives in a well-established manufacturing base how you feel about your competitive position, and I am pleased to hear that you are feeling good about that.

I guess the only thing I would ask you is, do you think there is anything in here that is going to change that for you for the worse? Have we done anything that is going to hamper your ability to represent your members and yet still allow the company you work for to remain competitive?

Mr Witherspoon: No. Just to try to put that into perspective, if you take our plant as a stand-alone plant and look at the large car production throughout Canada and the US, our plant alone supplies 14% of that market, as one plant.

Mrs Sullivan: That is 14% of North America?

Mr Witherspoon: Pardon me, 14% of the large car production, not 14% overall by any means.

Mrs Sullivan: Not 14% of the market?

Mr Witherspoon: No.

Mrs Cunningham: It would be nice, though.

Mr Witherspoon: It would be nice, yes. We could not build enough cars.

Mr Phillips: Did the NDP not stamp on large cars, though? Are they not getting rid of the large cars?

Mr Witherspoon: If you want to stay in the vein of that type of production, I do not think you are going to see them go. People have said we are going the way of the dinosaurs with the big cars.

Mr B. Ward: I would like to thank you for your presentation and the support for the direction we are trying to take as a government. We have had pretty well two different interests coming before us. Some, as Gerry often says, are against, and others are for, and we will not know until a year or so down the road who is right. It is a good question.

I too am a parent. My little girl is fairly newborn, five months or six months old, and I am looking farther down the road than next month or next year at what type of society we are going to have when she gets older. My greatest fear is that if we listen to some people and their organizations, we will head down the road the Americans are, where it is an "I'm all right, Jack," dog eat dog, "Who cares about my neighbour?" type of society where 35 million people do not have access to medicare because they cannot afford private insurance. That is my greatest fear.

I was just wondering what your thoughts are had we taken that road. We have attempted to maintain health and education standards in this province during these tough times, recognizing the shortfall in revenue. Let's look farther down the road than even next year. What type of society do we want to have in Ontario, and are we willing to have that commitment to keep that society?

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Mr Miller: Rick mentioned earlier that we had 400 people on indefinite layoffs. Of those 400 people, a lot of them are now approaching the point where they are going to run out of unemployment benefits. That means they only have one alternative, and that is the welfare system, to be able to maintain any type of economics in the household at all. We have 400 people in our location who are looking at that in the very near future. In the community I come from, St Thomas, we are looking at between 2,000 and 3,000 people who are running out of benefits.

It is only due to the budget and the moneys that were put into the social assistance program that we are going to help those people through some very tough times. As to the ever-increasing food bank situations and so on that we are finding ourselves in, actually we should not have food banks in Canada today, but we do. We definitely are in some very hard economic times right now, and without the moneys that were put in it would be even worse. What would we do with those people who are running out of benefits when they start lining up at the social assistance offices?

Mr Kwinter: I just want to correct a misconception that a lot of presenters are making; that is, when you say the reality was that this government took power with a $2.5-billion deficit. You should know that when the election was held on September 6 and the government came into power, it was six months into the fiscal period 1990-91. At that time, at the end of the six-month period, the Treasurer reported that there was a $750-million deficit. So when the government came to power, it had a $750-million deficit. At the end of six months that was their doing -- they were responsible for six months of that budget -- it was not a $2.5-billion deficit, it was a $3.5-billion deficit, and that was their doing. They had responsibility for it. They are the ones who could have made the changes, made any adjustments they wanted, but it was $3.5 billion.

Another comment, and I would like to get your reaction: I notice that the Canadian Auto Workers in particular are very critical of free trade. I find it, as the expression goes, passing strange that the CAW would be opposed to free trade, because you have been the beneficiary of a similar free trade agreement, the auto pact. Now 80% of the production of that St Thomas plant goes to the United States and you have been the direct beneficiary of that kind of arrangement. Why would you expect and hope that we would cut that off and that the cars that are made there would go only into the Canadian market?

Mr Miller: First of all, the free trade agreement is totally different than the auto pact. Under the current free trade agreement we lost what we had under the auto pact. We used to have 60% Canadian content under the old auto pact. When free trade came in, we went to 50% North American content. In reality, we lost 400 jobs because of it. We lost production out of our plant to the US and Mexico in order to facilitate the corporate average fuel economy requirements under the free trade agreement. So we lost jobs under free trade in our location. You cannot compare the free trade agreement and the auto pact at all. They are two different things altogether, and under that we did lose, we did not gain.

Mr Turnbull: Mr Chair, on a point of information: I would just like the record to show that last year for the first time in history we actually had a higher amount of sales from Ontario to the US than sales from the US to Ontario.

Ms M. Ward: You're out of order.

Mr Christopherson: Don't come in here and start that nonsense.

Mr Turnbull: You don't like that, eh? That is the truth.

Mr Phillips: Thank you for your presentation. You are betting on this budget as the one that is the right one. Some of us are concerned it is not. We will only know probably in a year or so. I find it unusual for the labour movement to be praising a budget, with 10% unemployment continuing for at least three years, with virtually nothing in it that is going to create jobs in the private sector to put your members to work. I am just a little surprised your brief does not mention anything about job creation, about economic activity, about getting things rolling.

Is the CAW prepared to live with the unemployment rates that are projected in this budget? How free are you to criticize the budget? Just how free is the CAW, with its very strong ties, obviously, to the NDP? How free are you to speak on behalf of your members in the job creation area? A year from now we will be sitting here and either they will have been right and you will say "Yes, they were right," or if some of us are right, I think you will want to be fairly critical of the budget. I am just wondering what freedom you have to move in that area.

Mr Miller: Rick did talk about the job creation programs in the budget. They are nowhere near the numbers we would like to see.

Mr Phillips: I do not think there is anything for the private sector in there.

Mrs Cunningham: There is nothing for the private sector. It is all public.

The Chair: Excuse me. Mr Phillips, you have about 30 seconds.

Mr Phillips: Okay. I have to stop there.

Mr Miller: He did talk about job creation as far as contracting, building, the sewer systems are concerned -- the type of things that are being upgraded -- and those are let out to private contractors. They are not government jobs.

Mrs Cunningham: They are all short term.

Mr Phillips: What about the free to criticize one?

The Chair: The time has run out.

Mrs Sullivan: Can we just have the answer to this question?

The Chair: Excuse me, the time has run out.

Mrs Sullivan: On a point of order, Mr Chair: Can we have the answer to this question?

The Chair: It depends if the three --

Mrs Cunningham: We all agree.

The Chair: All three parties agree?

Mrs Cunningham: Give me a break. We want the second question answered. You are going to say no?

Mr Sutherland: Are you going to keep badgering and not give him an opportunity?

The Chair: We went through a time period that was agreed upon by the subcommittee.

Mr Turnbull: Open government.

Mr Christopherson: We did fine until you got here.

The Chair: I would like to thank you for your presentation.

0950

LONDON FAMILY COURT CLINIC

The Chair: I will call on the London Family Court Clinic. You have one half-hour for your presentation. Near the end of your presentation, the time will be equally divided among the three parties. Sometimes if the answer or the question becomes a little long, you will be cut off because each party has an equal amount of time. I am not cutting you off because I do not want to hear the answer. Identify yourself for the purposes of Hansard.

Dr Sas: My name is Louise Sas. I am a clinical psychologist at the London Family Court Clinic and I specialize in the preparation of child witnesses for testimony in court. I also do child welfare assessments and young offender assessments, and also assessments for parents who are separating and divorced. These assessments involve custody and access issues.

I am going to talk about a child witness project that was developed here in London to prepare young children to testify in court. I am also going to be talking about some of the issues we have raised with respect to continued funding in this area, and some of the problems we have encountered.

I would like to begin by talking a little bit about the problem itself. I do not know how familiar all of you are in this area. This is going to be a fairly clinical presentation. There will be very little mention about free trade or budgets. I think it will be a topic that is probably very close to all of you in terms of your children and my own children and other children in the community.

Over the last decade or so, there has been a tenfold increase in the reporting of child sexual abuse by children to agencies, to the police, to children's aid societies, to teachers, as well as to parents. I am sure you are aware, just by reading the newspapers and being familiar with what goes on in the media, that more and more children are feeling comfortable in coming forward and talking about the abuse they have experienced. In my opinion, it does not represent a increase in the abuse itself. It is just a society that is more tolerant and willing to listen to the accounts given by children about what happens in their personal lives.

In any event, as a result of these increased allegations, agencies are faced with having to deal with it, deal with the families, the children who are traumatized. As well, the criminal justice system has had to deal very quickly with the increase in allegations, so police are being encouraged in all communities to lay charges in cases where children make allegations. Other agencies -- social agencies such as our own -- are encouraged to try to respond to the treatment needs and the needs children present once they have been abused.

In 1987, there was a federal intiative in the area of sexual abuse. I think that was as a result of a fair amount of lobbying on the part of professionals across the country, who are very much concerned about the lack of treatment facilities for children who have been abused and the difficulties in the criminal justice system for handling sex abuse cases. As a result, a fair amount of money was put aside for use nationally across the country and we were all encouraged, as researchers and clinicians, to apply for money. The money was to be used in the area of research and the development and evaluation of new programs.

The Family Court Clinic in London historically conducts a fair amount of research in the area of family violence and sexual abuse, and the needs of children with respect to treatment. We applied for funding and were successful in terms of the federal response. We received $360,000 to be spent over a three-year period in a demonstration and evaluation project.

The major goal of the project was to try to come up with a program that would prepare children to testify in court so that they would be more competent child witnesses, providing the court with the information it needed to adjudicate. Also we would attempt to monitor new legislation in this area for dealing with child sexual abuse. We would try to co-ordinate this community's response; that is, co-ordinate all the mandated agencies, such as the police, the children's aid society and the crown attorney's office, to work towards the betterment of how this system would respond to children's needs.

We are very pleased to obtain this federal money. The money was certainly put to use. It was put to use in the development of a very effective court preparation protocol for young children who have to testify in court.

As an aside, I should mention that the research is very definitive, both clinically and in terms of field research, that there is trauma for children who testify in court. First of all, children are traumatized by being sexually abused. We know that many of the children have long-term difficulties which translate into dollars spent in treatment facilities, both inpatient and outpatient. We add further trauma to that when children decide to disclose abuse and the police decide to lay charges on their behalf.

Many children, if any of you have sat in court and watched children testify, may be as young as five years of age. It is a very intimidating, very adult-oriented setting. These children are expected to face the accused person and describe in detail some of the behaviours that have happened and some of the incidents. For many of the children, it is very traumatic. We were concerned about that. Certainly the research supported our concerns that children are made worse by traumatic court situations.

The research also suggests that if you do not deal properly with children at this point, they are going to have long-term difficulties which will translate into many dollars of inpatient treatment and funding towards long-term counselling. So we are not just talking about a short-term event; we are talking about an event that will affect them throughout their childhood and beyond their childhood as they become parents. If they have been sexually abused, their own children will likely suffer as well. We are finding, not only here in Canada but internationally, that children of abused mothers are often abused themselves. It is a very cyclical pattern where the whole role of being a victim is played over and over again across the generations. This project that we developed at the London Family Court Clinic is one of its kind. I think it is really a model for Canada in terms of providing highly sophisticated court preparation for children who have to go and enter the courtroom arena.

In 1988, as you know, Bill C-15 was proclaimed in Parliament. Its new sexual abuse legislation also has some amendments to the Canada Evidence Act. What this has done is made it more possible for children to tell their story in court, which we, of course, are really pleased about. What it has not done is really regulated to this point in time the implementation of the changes in Bill C-15. So although the spirit of the new legislation is very progressive, in the sense that it suggests children be treated differently than they have been in the past in court and their special developmental needs taken into consideration, it has not really had the impact of policing or ensuring or monitoring how different communities actually implement the legislation. You may have some communities where very little is done to make children more comfortable in court, as opposed to other communities where a lot is done.

What I have given to you here is just an executive summary that very briefly describes what we did over the three-year period of time. There is a full evaluation report that is about 200 pages long which I could make available to any of you who have time to read it.

Over the three-year-period, one of the things we learned was that children who present to the courtroom really need a lot of assistance. The crown attorneys were very supportive in our findings, in that they also felt strongly that the children were doing a lot better in court. They were being better witnesses and they were much better oriented to the court procedures. As a result, a lot of the outcomes, in terms of what happened in the courtroom, were much more positive. Children were not being destroyed on the stand, were not crying and unable to continue in their testimony, but were fairly strong and competent. As a result, the whole process runs more smoothly.

The other finding we had was that the agencies were willing to be co-ordinated. We developed a local community board made up of police -- both city police and the OPP -- children's aid societies, crown attorneys and victim-witness individuals. Everybody was working together in this community so that the networking would be much more smooth and there would be integration of services for young children. The result was quite dramatic. The police referred over 98% of the children over a two-and-a-half-year period who had to testify in court. Very few children were missed and as a result services were offered to children which had never been offered before. They were individually prepared for court, not on the facts of the case but on how to present themselves.

Those children who were so distressed as to not be able to testify were given additional treatment in terms of stress reduction therapy, which I will not go into in great detail. Suffice to say, they were able to get on the stand. Almost all our children were sworn in, so they understood how to give an oath and to testify in court. For the most part they did well. That is not to say none of them were stressed. Certainly some were stressed. But for the most part, there was a great difference, as seen by crown attorneys and police, in the presentation of child witnesses in this area.

The other area I think we were very successful in is dissemination of information, both nationally and internationally. I just came back last night from San Francisco, where I presented a paper on the work we are doing here. We have also submitted some publications. We have had chapters in several books in the area of child witnesses internationally. I can tell you honestly that the work that is being done in the London area really is the cutting edge. We have been invited this summer to a NATO conference to present on our work here in London at the clinic in the area of child witness research.

The federal government provided the money for a three-year-period of time. Two and a half years of that time the money was to be used both in evaluation and clinical services. When the money was ended, when the funding ended for this specific project, we approached the federal government for continued clinical service money. But our understanding on hearing from them was that the money was to be used only for a demonstration and evaluation project, that there had been no commitment -- and that is true, right from the start -- to provide ongoing clinical service for this community.

There was a lot of distress in this community when the project came to an end, not because of the results -- the results were really very positive -- but because the community had a sense of what it is like to have a co-ordinated program where children are not shafted, where crown attorneys do spend the time that is necessary to present the cases, where the police do handle the cases sensitively, and where the children are really very competently prepared. I think this community did not want to go back to the status quo that existed prior to funding.

1000

A great deal of pressure was brought to bear on the provincial government to provide funding to continue what we now knew, based on the evaluation, to be a very successful project. The lobbying came from individuals from this community, and I think hundreds of letters -- if I am not mistaken -- went to the Attorney General and Solicitor General and to Community and Social Services here in Ontario to continue funding this project.

A number of interministerial meetings were held where we attended and gave presentations. There was an attempt on my part to have one of the ministries, either the Ministry of the Attorney General or the Ministry of Community and Social Services, take ownership of this project and continue the clinical aspect.

We do not have a great deal of problem obtaining research money. We have another federal research grant to look at the research aspects of child witness and sexual abuse. What we have had difficulty with is getting money to provide ongoing clinical service, and provide a service which we know, and we have evaluated, and it works.

We approached the Attorney General again last year, because this community was referring children we could not see for preparation, and as a result of a lot of lobbying and I think a fair amount of pressure, it provided us with some interim money for a four-month period, during which we tried to re-establish ourselves on a part-time basis to accommodate some of the children coming in.

One of the roles our clinical staff provide is not just preparation of children, but also expert testimony, so I gave a fair amount of expert testimony in court on behalf of children, talking about issues around sexual abuse and also talking about their need for the screen, which is a provision in the new legislation to protect children, and at times just being there and advocating for children to make sure things go the way the law says they should go and children are protected.

We were able to see some children during that four-month period. Naturally, having closed down the project and having to re-establish it and getting the referral patterns back in and everything, it took several months to get under way. We were recently successful in obtaining funding for this fiscal year to provide clinical services for children. Our expectation is to see about 100 children coming through in the next year who have been sexually abused and will need to testify in court.

We are also providing training for crown attorneys, both locally and across the province. Our staff is involved in a fair amount of professional development, and we also work with the police very closely in providing them with training in the area of child sexual abuse and in the area of child witness issues. At the same time, we are continuing to publish and work on papers across the border, as well as within Canada itself.

I think the reason I was asked to come here today was to try and talk a little bit about what we are doing, but also to emphasize that when the federal initiative was over and our funding for the demonstration evaluation grant came to an end, we really did need the provincial government to come in and pick up the pieces in terms of providing what we knew was a really effective and in my view very important program. The children continue to come to the door. What we envision is that there will be increases again. If we can accept the statistics from the children's aid society about the number of cases of sexual abuse presented to the agency, we know for a fact that the numbers are not going to go down, and this problem is not just going to go away.

It also translates into money, I think, saved in the long term, because of the treatment needs of these children, if you follow them through the system, and I have done that with many cases through the children's aid society. We are talking about children when they reach adolescence. The girls very often become runaways. They get involved in the criminal justice system, not in assault cases but in cases of wilful damage, running away, break and enters and property offences.

The male children who have been sexually abused, we often find, become abusers themselves. Some of the children who were first referred to our project who were male and who were involved in homosexual attacks have recently been charged. We have 25 of our initial 100 who have been charged themselves and involved in the criminal justice system, the boys as assaulters and the girls as victims again and runaways and involved in prostitution.

The problem does not just end with that incident. I think there are costs involved for provincial and federal governments in terms of the long-term needs of these children, so I really feel that when the provincial government agreed to provide funding -- it is to the tune of about $140,000 a year; it is not a great amount of money, but it allows us to see approximately 100 children and provide clinical service and research and training -- it is really an investment in the future in this community in children.

These sexually abused children do not represent a great number of all the children in this province, or even in this area, but I would imagine that the estimate of about two out of 10 children is probably conservative. There are probably more than that, so for every 10 children you see in a classroom, there are probably two, maybe even three children who have been abused either familially, that is within their own family or extended family, or by someone in the community they know. Only 13% of the children we see are abused by a stranger. So it is myth that children are necessarily safer within their homes or their extended homes than they are on the street. It is really very frightening what is happening in our society today with respect to children.

As a first step, the acceptance of children's disclosures is very important and providing a climate in our country where children feel free and comfortable to talk about what has happened to them. Beyond that, we have to respond.

The literature shows us that if offenders are not dealt with, and there are no deterrents in our criminal justice system, they go on to have many more victims. In fact, in the United States there is research coming out that the average offender has 200 or 300 victims before being caught, especially the paedophiles.

We are not talking about one or two incidents on the part of one perpetrator and one victim; we are talking about many children in a community being victimized by the same individual. If you have one child who is strong enough and willing enough to come to court and provide testimony, that may well result in a conviction and some time in a rehabilitative centre or in jail or on probation for an offender and you may well be saving many children in that same community from the same fate.

Mr Winninger: There have been many presentations before this committee over the last day and a half or so that I have sat on it, and the thrust of some of these presentation is that in a time of recession you should not be spending any money on new programs, that in fact you should cut back on existing programs. I wonder if you would agree with me, in light of your comment, that by not paying now, we can pay a lot more for the kind of social and special educational and correctional services later, that not paying now is actually a very short-sighted approach, and that to spend money during a recession for social services is not throwing money away.

Dr Sas: I certainly agree with that. I think in particular when you are talking about children who have their whole futures ahead of them, not putting the money now for their treatment needs and not educating the community about the social problem that exists with respect to the sexual abuse of children, for example, is not putting money where you need to, and you are going to pay for it anyway. I know.

A lot of the children who are referred to the clinic in the other areas, such as the young offender area or child welfare area where we do assessments, are children who have been in and out of systems for years and years at a per diem of $100 a day or more in some of our children's mental health centres where I think the cost to the government is incredibly great. Plus, I know that some of our young mothers were children who were abused themselves and have since gone on the street, become pregnant and have babies of their own, where the children's aid society has to go in and remove them or provide care. The dollars are incredible for each child.

What we offer in our particular little service, which I think can be generalized to other social services for children, is an opportunity to come in and do the right thing at the right time. We are doing a longitudinal study now on the impact of intervening at the right time for children. The results are looking very promising that it makes a difference. So I agree the money is well spent.

Mr B. Ward: Just as a follow-up, perhaps you could expand on this statement as well: This problem would exist in good times and bad times, and by not recognizing that the problem is there, we are putting our heads in the sand and saying there is no problem.

Dr Sas: I think the problem has always existed. I do not think we are seeing an increase in child sexual abuse per se. I think we are seeing an increase in physical abuse of children as a result of the hard times, the present economic times. There is a lot more pressure on families, a lot more family dysfunction as a result. Some of the child abuse areas, such as neglect, deprivation and physical assault, are probably on the increase as a result of the recession. Sexual abuse I think is a different ball game. I think it has existed and will continue to exist at a rate. The reporting is going up, not the actual behaviours.

Regardless of whether there is a recession or not, you have to continue to provide funding for children in these areas. I think it is not a luxury; I think it is a basic.

1010

Mrs Sullivan: I want to move away from the specific delivery which is being offered in London to a broader question. One of the things that has been a matter of some consideration over a period of time relates to the integration of service delivery to children, whether it is mental health services, whether it is services offered for protection through children's aid societies, witness programs, family violence and sexual abuse programs, with integration of funding. I understand that most of the funding, for example, for your clinic would come from the federal government with supplements from the province. Is that right?

Dr Sas: No, that is not correct. Forty per cent of our budget is from the provincial Ministry of Community and Social Services. That is block funding towards young offender research and clinical services. All the rest of our money is fee-for-service and grants that we ourselves generate.

Mrs Sullivan: It is a chargeback.

Dr Sas: Yes. There may be some federal grants in there, such as I described to you, but there certainly is no block funding from the federal government at all for our projects.

Mrs Sullivan: Could you speak then to the question of integration of delivery of services to children. I think it is an important question we have to come to terms with, not only in service delivery but in terms of the funding.

Dr Sas: I think one of the concerns of agencies like my own, if I try to generalize a little bit beyond the child witness project, is that you really do need, in my view, solid block funding from both the federal and the provincial government, and it really has to be shared for agencies that provide clinical services and research for children.

What happens is that you have your clinicians and research people scrambling on a year-to-year basis trying to do the research necessary to document the value of the programs you are providing, as well as provide the ongoing clinical services. We are all suffering, certainly not just the clinic. The clinic is very successful in terms of getting research moneys, but that is unusual.

Most clinical services for children -- I mean the majority, maybe 80% -- do not have as many psychologists on staff. We have sort of developed in that way, to write for the grants and apply, to be aggressive and go after the various granting agencies for money to provide services. I feel very strongly that there has to be a significant federal contribution.

If I get a little specific and give an analogy, in the area of child witness and child sexual abuse, certainly the federal government responded very positively to concerns across the country and to a lot of lobbying in terms of what a child sexual abuse victim needs, and actually provided -- I do not remember the amount -- a fairly large amount of money to do that research.

Once the research was done over the three-year period in all our different agencies across the country and we showed what was needed, then the clinicians and researchers were in the position of saying that this works, that does not work, this is what needs to be done, and then no one wants to pick up the tab.

My view may be naïve but we found ourselves getting caught up in a struggle between the federal government and the provincial government as to who was going to pay for something that we knew was helping children, and that we really felt needs to be done across the country.

Mrs Cunningham: Thank you for being here today. We have both worked in social services for a long time so I know what you are trying to say today. I guess one of the questions I object to are across-the-board cuts and what would we do without programs and what not. I think the better question would be, would you not rather spend your $140,000 on front-line support to children than $59,000 to a chauffeur for the president of TVOntario or doubling political staff in ministry offices?

I want to get that on the record because I have been sitting here now for over a day listening to this ridiculous question that people like myself would like to cut funding to social services. You and I both worked there, and if you and I were running it, I tell you, the front-line workers would be there to support kids, not all the bureaucracy. I am not going to ask you to comment on that, but you and I both know what is happening. I will just say that.

It was the wrong question to ask the wrong presenter today. I am sorry Mr Winninger is not here, but perhaps you could relay my question to his colleagues.

With regard to the front-line work money that is coming, being a representative now in London, along with two of my colleagues -- I think I am following up on the question from my colleague behind me -- we are hearing about duplication of services in a naïve way, I think. There must be some room for agencies to work together. When one is trying to get funding from three different levels of government, it is very difficult for us in our job to know just which way to move. I wonder if you could give us some advice.

Dr Sas: Certainly. I think there is some duplication in the city, although probably a lot less in this area than in some other communities I am familiar with. There has been a real attempt, in the last eight years or so, for agencies to get together. For example, there is a central intake committee and there is a difficult-to-serve committee that gets together. All the agencies will meet. There is also a child abuse council. I think you will find that in this community there is a real attempt not to have duplication of services.

One of the things that worked well for us, a small model that I think could perhaps be right as a model for other communities as well against the whole issue of providing duplication of services, is setting up local advisory boards and community groups, with representatives from the different agencies, where the actual tasks are parcelled out.

We were very successful in the child witness area. It is very easy to have duplication of services in that area because you have the police interacting with the crown attorney's office, interacting with the children's aid society and local treatment facilities, which all provide a certain part of the piece for the children who have been sexually abused. We have to be very careful about not providing duplication. I do not want to prepare someone who has already been prepared. You do not want the crown attorney doing the police's work and what not. I think by setting up protocols where each agency has responsibility for a certain aspect of that child's care and there is a case manager, it works much better.

Mrs Sullivan: One adult being in touch with the child.

Dr Sas: The case manager, yes, one person who controls, on agreement, everybody's role. We are talking about individuals now, but you can be talking about agencies, one agency sort of overseeing or monitoring a certain aspect.

The Chair: Thank you for your presentation.

We are about 10 minutes ahead. Maybe what we will do is take a recess for 10 minutes. If it is the committee's wish, if the three parties here wish to extend beyond the time already laid out by the subcommittee, if you want to say one group has 45 minutes and one group has 35 minutes -- this is what I am going by, the schedule of the subcommittee.

Mrs Sullivan: I think from time to time it is useful to extend the hearings, particularly if there is a gap because a witness has not shown and there is concurrence from the committee. We could have proceeded, for instance, to have heard the answer from the CAW to the last question. There may have been some interest when there was not a time schedule. I think that to go through the entire schedule and say, "Yes, we'll give this person five more minutes," or whatever -- I think it has to be on an ad hoc basis. If there is concurrence, based on a witness not appearing, then surely we can act as mature adults and not simply be cut off.

Mrs Cunningham: Mr Chairman, on that point, I think, in fairness to yourself, you did give us that opportunity and people could see that the witness was not here. We were asked by you if the question could be answered and quite frankly the government member said no. I think from now on we should start using our common sense. Thank you for asking us.

Mr Sutherland: Mr Chairman, if I could just make a comment before Mrs Cunningham leaves the room, I have no --

Mrs Cunningham: As far as leaving the room is concerned, your people get up and leave the room. Every time they ask a question, they then leave. I am leaving too.

Mr Sutherland: Mrs Cunningham, the only reason I said that was you had just made a comment and I thought you might want to hear a response.

Mrs Cunningham: You are not one of the culprits, Mr Sutherland, so you do not have to worry.

Mr Sutherland: That was the only reason I mentioned it.

Mrs Cunningham: You are not one of the culprits.

Mr Sutherland: In response to the comments made, in a situation such as the last presenter, that is fine if there is mutual consent to extend time on questions of basic information. In terms of the previous presenter, however, one of the reasons the time ran out was because members of both parties were not giving an opportunity to answer the question. They were interfering, either with interjections or asking additional questions. If that is going to be the case, Mr Chair, I would advise you then that time should not be extended in those situations. In those ones where it is just pieces of additional information, such as with the last presenter, then I think you should use your best judgement.

The Chair: As the Chairman here, I have been trying to have the presenter or the questioner wind up having the whole answer completed, but sometimes when the preamble gets too long I have to say it is at the end.

The committee will recess for about 10 minutes.

The committee recessed at 1020.

1031

COMMUNITY HOMES OF SOUTHWESTERN ONTARIO INC

The Chair: We would like to welcome the Community Homes of Southwestern Ontario to our hearings. You will have one half-hour for your presentation. Try to save some time near the end for a question and answer period which will be divided equally among the three parties. Would you identify yourself for the purposes of Hansard.

Ms Coulson: I am Marnie Coulson. I am the manager of Community Homes of Southwestern Ontario. Community Homes is a resource group accredited by the Co-operative Housing Federation of Canada. We provide consulting services to non-profit co-operative housing groups. We serve both the London community and southwestern Ontario. Today, I am going to focus on the issue of housing in London, however, rather than a broader perspective. I probably will not need the full half-hour, or even 20 minutes of it, for my presentation, but once I get going, you never know.

The Co-operative Housing Association of Ontario presented a brief, which I believe all the members of the committee received, in Toronto last week. A lot of the more global provincial comments I will leave to that report, as I think they were very clearly outlined in our brief presented at that time. What I want to do this morning is to give you an idea of the state of housing in London and focus it in terms of our own community's needs in the province. Therefore, I want to talk to the budget in terms of housing.

I appreciate the opportunity to speak in front of the committee. Certainly in London we applaud the potential development of 10,000 units in Ontario, presuming that because of the need for affordable housing in our own community, we will be provided some of those affordable housing units. The supply of affordable housing has not kept pace with the demand for assisted housing in London. I am sure some of my co-workers in London have talked to you about the Listening to London study that was put out in 1990 and some of the findings that were indicated there. Although we have found that the co-op sector has provided over 1,500 units in the city, and the non-profit sector has provided almost 2,000 units, we are still finding that the need for affordable housing has not been met.

I have provided the committee with a State of Housing in London fact sheet rather than the whole context of what I was going to say today. I have tried to focus in on and just highlight specific items that relate to our community. Often people think of London as a very wealthy community. I think you have probably heard a lot that counteracts that opinion in the last day and a half. I have indicated our vacancy rate. Although it is 4% in the community, in our assisted housing, which is our non-profit co-op and London Housing Authority stock, it is 0.5%. There is very little turnover and it is a very low vacancy rate. I have indicated some of the need and demand.

As well as being the manager of Community Homes, I am also on the board of the London Housing Authority and I am also the chairperson of the community housing advisory committee for the city of London, so I have a very general view of the situation of housing in the community.

In terms of London Housing, as I indicated, the waiting list as of the end of July was 1,360 people. I have given you the breakdown of families, seniors and singles. The waiting list in January was 1,146. This represents an increase of 19%. Our housing authority waiting list, as you can see, is rapidly increasing. Community Homes also keeps a waiting list, and I have put that down. There are other non-profit groups in the city that have waiting lists. Our individual co-ops keep waiting lists, but in terms of our own statistics, we are looking at over 500 people who require affordable housing in the community.

In the 1991 municipal housing statement I have quoted here, which actually is in a draft form but our community housing advisory committee reviewed it yesterday, it reports that we still have a need in 1991 and 1992 for another 2,300 or 2,400 assisted housing units in our city to meet the need. Of the people who are in need, 42% are in the deep core category. I have included those figures and the categories for you just for reference. The $14,000 to $27,000 indicates one bedroom to four bedrooms, which is where the differential comes from. I have also reflected in the stats form the fact that home ownership for the citizens of London is becoming far out of their reach, as it is in other communities in Ontario. Only 14% of the renters in London, according to the Listening to London survey, can afford to buy a home.

I have touched very briefly on the issue of homelessness. A survey was conducted on March 15 of this year and we are trying to get a handle on how many people are on the streets of London. If you talk to people on our municipal council, I am sure a lot of them think there are not any homeless people in our community, but certainly this evening we found 253 people were in shelters at the time. One of the things we recently set up through the community housing advisory committee is a steering committee to address the issue of homelessness in London. So we too, as other areas of the province, have our problems with people forced to live on the street.

Those are essentially the statistics. The other thing I have not touched on is the needs of the disabled people in our community and Dorothy Nordemann, who is following me from the March of Dimes, will be addressing that issue more specifically, so I have not touched on that issue in my report.

The other thing is that the 10,000 units in the 1991 budget will stimulate the economy in London. Right now, the reality of the issue is that very little private rental housing is being built outside the non-profit sector. I have just come up with some statistics. I have not given them to you, but I thought I would just verbally report them.

Between January and July of this year the assisted housing starts for town houses were 333 units. For the private sector there were no new town house starts. For the apartment sector, assisted housing was 117 and there were 233 private, but 176 of those have just been in July. As you can see, the co-op and non-profit sector is providing most of the units for people who cannot afford home ownership. The 10,000 units promised in the budget will certainly help this community in terms of stimulating our economy and helping the unemployed construction workers in this city. The other statistic I wanted to share with you is that we expect 500 more co-op and non-profit units between now and the end of the year. So I think there really will be a stimulation of the sector.

Essentially this will create between 2,000 and 2,300 new jobs for local people. Also, I think most people on this committee are aware of the social benefits of co-op and non-profit housing, particularly co-op, because that is our main emphasis at Community Homes. Co-op housing represents a unique form of tenure which encourages the creation of community development and personal development. We feel that is a very positive contribution to our community in terms of providing another form of tenure to the citizens of London, and co-ops have also been very much of a leader in the inclusion of housing for special needs in our complexes.

The final point I would like to make is that given the cutbacks we have noticed from the federal level, certainly in the index linked mortgage program, and also in the federal-provincial housing program for co-ops and non-profits, the federal government has withdrawn its support. It now is up to Ontario to bear the responsibility in the area of housing policy and I think they have shown leadership in the consultation paper that was released in June, A Housing Framework For Ontario. Community Homes applauds the government's initiative in this area and I think it demonstrates the ability of this government to co-operate and develop partnerships towards providing affordable housing to the citizens of Ontario.

My comments were strictly towards the housing issues reflected in the provincial budget of the 10,000 non-profit units. I would be glad to answer any questions as to the further impact on the community of London I have not touched on.

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Mrs Sullivan: I do not have a lot of questions, but I did want to ask what your maximum unit prices are in London. I should know that but I do not.

Ms Coulson: I should too and I did not bring them. Sorry.

Mrs Sullivan: Generally do you know if your assisted housing is now able to be built below the MUP level, the cost?

Ms Coulson: We have noticed a certain effect on land and construction costs because of the recession, yes.

Mrs Sullivan: So the units coming on stream, the 500 you expect before the end of the year, you expect to have built below the MUPs?

Ms Coulson: We do not relate it necessarily to the MUPs because we have always had problems with the MUPs in this community. We have always felt they were set unrealistically. The issue is that we know we can get competitive prices from the construction trades and that the developers in town are much more readily negotiating the price of land.

Mrs Sullivan: When you say you have had historical problems with the MUPs, have they been set too low for this community?

Ms Coulson: Yes, they have, because we tender most of our projects out. We deal with the contractors in the community and we found that the price of construction has been increasing yearly.

Mrs Sullivan: I also wanted to ask about the 233 private sector apartments coming on stream. What income level or what rental level are they directed at? What market are they serving?

Ms Coulson: That is a good point, and the 4% vacancy rate also indicates that it is mainly high-end income earners that are being built for right now, and the 4% is basically in the high end.

Mrs Sullivan: The vacancy rate is at the high end and the new apartments coming on are also at the high end of the market, so there will probably be an oversupply at the high end of the market and not very much coming on other than the assisted housing?

Ms Coulson: Yes. As I mentioned in my comments, it is not feasible for the private sector at this point to meet the affordable housing need.

Mrs Sullivan: Is any government land being used in the co-op and non-profit areas in the new units coming on stream?

Ms Coulson: There are no government land parcels available in London. Certainly the Co-operative Housing Association of Ontario has been lobbying with the government, the Liberals before and the NDP now, to release government lands for the purpose of affordable housing and certainly Community Homes would support that. At this point, there is no available stock as far as we know in this community. We certainly would be open to it.

Mrs Cunningham: Good to see you again. It is always interesting to see the figures from London because that is not the way we are portrayed in the province, as you can imagine, having people on waiting lists for affordable housing. What is your hope of getting any of the money with regard to the units that have been announced? My particular experience has been with the Homes Now program, and we were not particularly successful. I hope we will be more successful with this announcement.

Ms Coulson: Unfortunately the need has always been articulated more in Toronto and Ottawa. Certainly my role on the board of the Co-operative Housing Association of Ontario is to remind them that there is life outside Toronto and that we also have a housing need. I have done lobbying with one of the MPPs so they really do know the state of housing here. I feel I have been fairly successful in articulating the need in this community, so I feel fairly positive about what units we will get. Actually we did fairly well under the Homes Now program. The federal-provincial units have been scarce in this community, I think partially because of the drawback from the federal funds.

Mrs Cunningham: We had the housing people here yesterday who are very concerned about the building of private sector housing. With your experience, the private sector housing in London is fairly expensive for the kind of families you are serving. Is that correct?

Ms Coulson: Right.

Mrs Cunningham: Do you see any hope of building private sector housing at the low end of the scale given the land availability in London in the next five years?

Ms Coulson: I am not sure, Dianne, if I know your question. Are you saying, do I think they will provide any housing?

Mrs Cunningham: Will there be any starts, given your experience in working with that industry?

Ms Coulson: Basically they are working with groups like Community Homes to provide that housing. All of our housing stock is developed by most of the home builders that would have been represented. In that sense they are still building our housing. It is just that we are having another form of tenure on the housing. I do not think you are going to have private sector straight rental projects built in the next while. It is just not feasible for them to do. From our point of view, we see that as positive because our focus certainly is control for people over their housing. We feel the way to do that is through co-ops and not-for-profit housing.

Mrs Cunningham: What happens to the people in the London Housing Authority, though? In a co-op we are expecting at least some of their own funds to be involved. Of the waiting list in London Housing right now, about 80% of those people would not be eligible to be part of these kinds of programs. Of the waiting list as it was presented to me two weeks ago, none of these families, or less than 20% of them, could even be involved in any way. Basically that would be the disabled community. What do you do about everybody else? This is a philosophical question, but what do you do? What do you think we should do? You are there.

Ms Coulson: I provided you with a stat sheet also, and the London Housing Authority waiting list is increasing rapidly.

Mrs Cunningham: I know.

Ms Coulson: That is for general reasons in that people will not sit on a waiting list for two or three years. Part of the process that is interesting is an initiative undertaken by the Ministry of Housing to look at the potential of housing authority stock in terms of another form of tenure. I really applaud that effort because recently in the media in London there has been a community of London Housing Authority stock where the neighbours have wanted to change the name of their street so that it is reflected on to this community. The time has come for us to stop ghettoizing people.

I would like to see the mix of incomes continue and either change the tenure of the housing authority stock, do a major rehab on some of it if you have seen any of it recently, and also provide opportunities for people to have control over their housing. Although that may not address the waiting list as much, I think we need to provide more affordable housing, and that is why I applaud the 10,000 new units in the budget. We also need to take care of the people in our communities right now on the housing authority to make those communities not housing of last resort, because there are some people in this community who refuse to move into London Housing. They will sit in rental and pay more than 30% of their income towards housing rather than be in one of the housing authority projects.

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Mr Stockwell: I do not see anything wrong with that, quite honestly, but let's carry on.

Ms Coulson: Sorry, with what?

Mr Stockwell: Someone choosing to stay in a unit and pay more than 30%. If that is their choice, that is fine. There are a lot of people I know who pay a hell of a lot more than 30% on their mortgage and choose to do that as well. It seems you are caught in this malaise that most communities are caught in, that if you do not have any government building you have no building. Would that be correct?

Ms Coulson: No, as I say, there is the high-end market.

Mr Stockwell: But I am saying at the affordable level.

Ms Coulson: That would be correct.

Mr Stockwell: When was the last time you had any kind of private sector affordable building?

Ms Coulson: As I say, the private sector works in partnership with us.

Mr Stockwell: No, I am saying private sector operated and private sector owned; no government money.

Ms Coulson: In rental?

Mr Stockwell: Yes.

Ms Coulson: I think there have always been programs for the private sector to provide housing, so there has always been assisted housing in the past through some of the government programs, pure private sector.

Mr Stockwell: Yes, but what I am driving at is private sector owned and operated, built with no government money at the affordable level.

Ms Coulson: I think it would be some years.

Mr Stockwell: Have you noticed since the government has been involved in this that the problem has eased, that the housing crisis has eased?

Ms Coulson: I think the non-profit, co-op sector is providing a lot of affordable housing in this community and starting to meet the need.

Mr Stockwell: If rent controls were not introduced, do you think it could be provided by the private sector?

Ms Coulson: My feeling about rent controls is not something I was addressing today. I think they are doing that next door. Rent controls are just going to happen. I do not think we have any control over the private sector at that point and the rents are just going to go up without controls.

Ms M. Ward: Thank you for your presentation. The statistics you provided us show an increase of 19% in six months, I believe, January to July, on the waiting list.

Ms Coulson: Yes.

Ms M. Ward: My question is, what do you expect in the future? Given that we have been in the recession for over a year, there are probably a lot of people on UI and with the cutbacks on that, with their UI due to run out and possibly being forced on to social assistance, do you expect a further increase in the waiting lists and the demand for assisted housing to continue to increase in the immediate future?

Ms Coulson: Yes, I do, because I feel that when we get calls from people and they ask us how long it is going to be before they will be provided a unit, whether it is a housing authority unit or a non-profit, co-op housing unit and we say it will be two to three years, they normally do not fill in the material to get on the waiting list. I feel homelessness is a problem. There are the invisible people without affordable housing in this community. I think homelessness is going to become an issue and the waiting lists are just going to get longer.

Ms M. Ward: And they possibly do not even reflect the real need. As you say, people knowing there is a two- or three-year wait do not pursue it.

Ms Coulson: That is right. I think the stats I provided, the draft municipal statement -- I saw just yesterday the stats are that we need at least 2,500 extra affordable housing units in the community. That is as recent as we can get.

Mr B. Ward: First thing this morning we had a presenter who was advocating a balanced budget. His suggestion to achieve that would be to eliminate all new spending and cut back elsewhere with existing programs. I think that philosophy, in essence, would have eliminated any initiative in affordable housing from the government, whether non-profit or co-op. What do you say to people who have the view that during these tough times we should be eliminating the affordable housing initiatives our government attempted to implement?

Ms Coulson: I think the comments you probably heard from Rev Eagle said it better than anyone could say it, as I heard on media coverage this morning. But without doing some of the spending the NDP government is proposing, it would impact on housing people. I think Mr Stockwell has indicated that lots of people pay 30% of their income. I hardly think it is the low-income earners who pay that. The more they pay on their rent, the higher rent they pay, the less they have for food and the more food banks we have. I think that has really been demonstrated in our province. It has certainly been demonstrated in our city. That kind of thinking is just not appropriate. We are concerned about the people of London.

Mr Stockwell: That is totally out of context, Mr Chair.

The Chair: Wait a minute. Excuse me. Mr Stockwell, the presenter has her --

Mr Stockwell: I have a right to comment, Mr Chairman. That is not what I said. I can give her reams of lists of people --

The Chair: Okay, it is in Hansard.

Mr Stockwell: -- who are in that kind of predicament. They are paying more than 30%.

The Chair: Okay, we will carry on.

Mr Winninger: There is a lot of interest right now in revitalizing the downtown core of London, residential infilling and that sort of thing. I understand the maximum unit prices in London are not as high as those in Toronto and it is forcing agencies like your own to look for land outside of the core area, where it might be cheaper or more available. Is that a problem for you? Do you require higher MUPs in order to acquire the land base in downtown London, to develop the core rather than encouraging urban sprawl?

Ms Coulson: I was asked the question about the MUP earlier. Because of the recession, I think the MUP is a little bit better in terms of being able to negotiate land, but land in the core area has always been expensive and that is an issue, recession or no recession. It is valuable land and the developers will hold on to it. Essentially we have had to resort to the extremities of the city. The services are not as available for people in terms of amenities and shopping that some of the other social service agencies may or may not need to tie into. It is an issue for us.

Mrs Sullivan: I am very interested in your comments about changing the tenure relationship to public housing and wonder whether you would like to take some time to put on the record some of your views about the way public housing tenure could change.

Ms Coulson: If you understand that I am coming from a co-op housing initiative, our belief is that the more control people have over their living environments and the more they can make decisions in their lives, the better quality of life they will have. In the housing authority projects, I feel that the lack of control over people's lives, and the kinds of communities that unfortunately have been developed in those housing developments, do not allow people to develop with personal growth or do not foster a lot of community development.

Recently we have seen in London that community people have gone into the communities to assist and do some of the community development. I do not mean to say that people from the church and other organizations working with people and our housing authority are not doing a good job; they are. They certainly have developed a lot of programs and have got a lot of initiatives started in the community. But I think the problem needs some assistance. We need a formalized system and to put more efforts into it and assist the people who are in the community struggling with the people to make quality of life an issue.

Mrs Sullivan: In Halton we have seen the housing authority move quite reluctantly into allowing residents of public housing projects to become responsible and take responsibility in operational decisions in terms of management of the projects and provision of recreational facilities and programs and other social issues that help to define a community. Is that the kind of thing you are talking about, or are you talking about something substantially different in terms of the way the properties are owned or where the tenants themselves have a different kind of stake?

Ms Coulson: Our wish would be to see a co-op style of management, but that is not necessarily what the people who live in the complex may feel. That would be their decision. What I would like to see is that the people who live there have some say about what happens in their communities and the kinds of programs that are available, recreational, educational or environmental. I think people have a lot of good ideas of how they want to see their housing structured, run and maintained and so on. If we go into the communities and work together with the people who live there, listen to what their needs are and work together to meet some of those needs, that is what I am talking about, but I think we need to ask first. As I say, my bias is co-op housing, but that does not mean that is for everyone or that it is what the people who are living in those communities will want.

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ONTARIO MARCH OF DIMES

The Chair: The next group is the Ontario March of Dimes. Come forward, please. You will have half an hour for your presentation. Try to save some time at the end for questions and answers equally divided among the three parties. You may begin by identifying yourselves for the purposes of Hansard.

Ms Nordemann: My name is Dorothy Nordemann. I am the Homelink co-ordinator with the Ontario March of Dimes.

Mr Suchak: My name is Jeff Suchak. I am community services manager here for the London region of the March of Dimes.

Ms Nordemann: The Homelink project was initiated in the fall of 1987 to assist persons with disabilities to find accessible, affordable and appropriate housing. This project is funded by the Office for Disability Issues of the Ministry of Citizenship. I think we are one of the few known projects. Not a lot of people know about us, so thank you for letting us speak. The Homelink project started with five offices in 1987 and was expanded in 1989 with an additional five offices in the province. The Homelink offices are linked with community-based organizations such as the Ontario March of Dimes and independent living centres. The money is transferred from the Office for Disability Issues to the host agencies.

The Homelink concept is simple. We are to provide a link between persons with disabilities who are looking for housing and landlords who are looking for renters or tenants. Homelink centres maintain inventories of accessible rental accommodations in the private and non-profit sectors. This information is then made available to persons with disabilities who are seeking housing. There are no hidden fees or costs of any of these services to anyone.

Since the inception of the program, many offices have found themselves doing more than just matching individuals needing housing with landlords. They have found themselves doing advocacy work on disability issues and barrier-free design consultations for architects and other agencies, including non-profit and co-op groups seeking housing allocations. We are involved with groups such as access to permanent housing committees, which are funded by the Ministry of Community and Social Services, national access awareness committees, etc.

With continued involvement in committees and in the community, the Homelink centres have made a significant link for anyone needing information regarding housing and barrier-free design. They themselves have become an integral part of the movement to make the province and this country a more accessible place for people to live.

The Homelink centres across the province are facing some major concerns as the programs become more integral in the community. The co-ordinators see at first hand how inaccessible housing in this province can be. Our lists demonstrate the great demand needed for accessible units. I have provided you with a list from the 10 Homelink centres in the province of all the waiting lists they are currently holding. It ends up being two pages.

I have also included a breakdown of the support service living units needed in those areas. In London, for example, I have 56 people waiting for housing, be they rent-geared-to-income housing or full accessibility with lower counters. Out of that, 13 people need support service living units. Included with my list as well are Cheshire Homes of London. They have 57 people waiting on their list for support service living units.

Besides a person needing an accessible unit, a rent-geared-to-income component needs to be in place for some people. The only way we obtain these is through the local housing authorities or through the non-profit, co-op sectors. These again, as Marnie has said previously, can be two to three years in waiting. Support services may also need to be in place. So beyond a person needing a rent-geared-to-income component, he also may need attendant care services to live in the community.

This would give them the opportunity to live like we are. We are considered tabbies, temporarily able-bodied persons. We take this for granted. We can move wherever we want. We can work wherever we want. But if a disabled individual needs housing, he stays here. If their support services are then needed, they are going to have to put all that into place. They cannot move from city to city and take those services with them.

Last week I did a cost analysis of what it costs per diem to keep someone at Cheshire Homes of London, as opposed to keeping someone at Parkwood. There are good reasons why Parkwood has the rehab, and we need those. If someone has just incurred a disability and needs to go through the social service program, there is a good reason why it is $400 a day. We currently have people in Parkwood in rehab beds, as well as chronic care beds, waiting for housing and all they need is housing. They need some attendant care services, but the costs are so different. Cheshire III here in the city offers the highest amount of attendant care. At $86 per day for staff their housing subsidy, at most, is $15 a day. At the end of the year it constitutes $37,000 a year, whereas if you have someone in a long-term care bed at Parkwood it is $79,000 a year.

You cannot tell me that this is not economically viable. More people need to live normal lives like we do and if they are stuck in Parkwood or any of the rehab hospitals and cannot live in an individual apartment like you or me, we are denying them some human rights as well.

I presently am working with an individual who is a former resident of this province, moved here, could not find an accessible unit, and has talked to me and has talked to constituency offices, looking for housing. He was living at someone's place, which was not accessible, was literally bumming up and down the stairs, created a pressure sore, and had been put into a nursing home because he needed care. This individual is in his mid-20s. The care could not be given continually at the nursing home. He was moved to Parkwood. Then he is on the discharge list and I have nowhere to place him. He is now going to have to go to mission services. He is an employable, disabled individual. He has an education, but I do not have the housing stock to give him.

As Marnie said, under the housing authority list, 23 people are waiting for housing who are single and disabled. They have not tracked how many families need housing with a disabled individual in that family. The Homelink offices work hard to make all people aware of the problems facing the disabled population in finding housing, but the choices for disabled individuals to find the accommodation is very limited. The co-ordinators rely on the local housing authorities and the non-profit and co-op sector to provide the accessible units, but the private properties are not required to build any accessible units. Not every disabled individual needs a rent-geared-to-income unit and not every disabled individual wants to be or live under the non-profits and co-ops for whatever reason. Some are unable to do that because they cannot participate.

An alternative solution would be that the private builders be legislated to make a percentage of their properties accessible. This opens up the choice for living anywhere a person would like to and a potential to work with the rent supplement programs. Instead of building more units, you could increase the supplement programs. That could reduce the waiting lists.

The general public is crying about the costs of social assistance programs, "Cut a budget here, cut a budget there." The cost savings to the government could be achieved if disabled individuals were able to get off social assistance. That is fine to say. Employment equity is in place but some real steps need to be taken. There is a large number of educated, employable, disabled individuals in this province and country, but for all types of reasons, they are unable to obtain a job. The first real barrier is building accessibility. Fine if the employer wants to hire somebody, but if the job is on the second floor where there is no ramp and no elevator, how can a disabled individual take that job? Have you ever been forced to work a full day without going to the washroom? Persons with disabilities are faced with this problem constantly, not just because they cannot get through the washroom doors because they are not wide enough, but because the attendant care services are not available.

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Yet another barrier: What happens if you get the job, the place is accessible, you have attendant care services, but you cannot get to your place of employment because there are no transportation systems available? These issues, if eliminated, could get persons off social assistance and give them the opportunity to make their skills and education workable. Again, those are things we take for granted.

The last subject I would like to talk about is education. I have people calling my office wanting to move to London for educational reasons. Again, their problems are that they do not have an accessible unit to live in and they do not have any attendant care services that are transferable to this city. They are then told, "No, you cannot come to this city because if you do not have these things in place you cannot live here." These people can be educated and they are being forced to stay on social assistance because if they cannot get these support services in place, they cannot work.

The last comment I would like to make is in regard to my project as a Homelink co-ordinator. We as Homelink co-ordinators get $34,000 a year to run our budgets. We are placed in non-profit agencies which already are feeling a very tight squeeze on their budgets. The non-profit agencies are asked for services in kind, but with the donor dollars down our projects are also faltering under their financial restraints. I am starting to not be able to mail things, call people and run an effective office. We have to travel within our city limits as part of our job. If these things are starting to be limited, we cannot assist disabled individuals in advocacy for their rights in housing and education and the like.

Mrs Cunningham: Thank you for appearing. I think the March of Dimes is a spokesperson for a lot of agencies in your brief today. Certainly, as a member, I am very much aware of some of the problems because we have a lot of the clients you are talking about in our office. As well, I am the mother of a disabled person, so I know what challenges are ahead.

I have never asked this question before, but I am aware of the Cheshire Homes in a private sector high-rise just off Oxford Street.

Ms Nordemann: Cherry Hill.

Mrs Cunningham: Yes. I am wondering if you have ever done a cost analysis on the program in there, as opposed to some of the other. Have you ever compared the units in any way?

Ms Nordemann: You have a cost analysis of Cheshire I, II and III.

Mrs Cunningham: Yes. Which one is that?

Mr Suchak: Cheshire II is Cherry Hill.

Ms Nordemann: Cheshire II ends up being the least amount of care. For the people who do not know, there are 19 people with disabilities living in the building. It is 12 storeys and it is integrated. I used to work for Cheshire Homes and that was the building I worked in. We were staffed there 24 hours a day and we would come and go. Tenants in the building really did not know we were there, other than, "Oh, you're the person with a lot of keys." It was an integrated living situation where all the tenants could live as normally as you and I, short of a staff member coming in to look after them.

Mrs Cunningham: The reason I raise it is that it speaks for itself. I did not know the answer to the question. I am not surprised. You talked about legislating the private sector landlord and everybody knows who the landlord is there and how well he has been recognized by our city. By the way, I am very proud to represent this city. I do think it is a way to go. For my colleagues, it is private sector money. It is a landlord who has made space available. I wish there were more who would do it. It is very much less expensive and the support services in the building are marvellous in the sense that you could be there 24 hours a day. The shopping mall is just below. People do not feel different. I know you are aware of this, Kimble. It is just a perfect way for us to go in Ontario, in my view. It is not new. It has been there for a long time.

I worked on the London Housing Authority and I do know the costs and I do think we need a very real balance between private sector and public sector housing when it comes to affordability, but I am very much aware that you are in tremendous need for some more support units. I do not know if we can free things up with private sector landlords, but I just wanted you to know that we are working with three different buildings right now to see if we can free up, on behalf of Cheshire, probably as many as another 20 units before Christmas.

Ms Nordemann: To just quickly address your issue on the private sector, we would love to use the private sector. It does not have accessible apartments. How can I put a person with a disability, who has a 36-inch wide wheelchair, into a bathroom that is 24 inches? I know people are saying, "No, don't use the non-profits, don't use the co-ops." I have to. I cannot support the private sector because it is not supporting the disabled community.

Mrs Cunningham: I had to move my constituency office because I was not happy about people being able to get in, even though they could. My new office is in a new building, and unfortunately in London we have not had any new buildings to the building codes now. I agree with you, but I am talking about the future and the way to go, the renovations that many churches are making and small landlords are making. But you are absolutely right. I know why you cannot go with the private sector. We have a big world ahead of us and I think we have to plan that way down the road and have a vision about it. I want to thank you for coming today and speaking on behalf of so many others who I know will be pleased with your presentation.

Ms M. Ward: Thank you for your presentation. I want to make some comments and a question at the end.

I visited, in the last six months or so, two new housing projects that opened in my riding, mainly for seniors, but they also had apartments for the disabled. I was very impressed with the design of them: wide doorways, kitchens which a wheelchair would go under. Very often there would be a family of two in there, one of them possibly disabled, the other not, or in some cases both of them. Also there are units for young people, one of them for young women living together. I think it is very successful. They are near the plaza and everything.

I know of another location in my riding where a community centre has a wheelchair ramp which cannot be manipulated by motorized wheelchairs. I think your contribution to barrier-free design, is very necessary in that we make sure disabled persons are involved in the design.

Ms Nordemann: The Homelink centres have gone beyond just housing. Most of us now do the consultations for barrier-free design. It sort of lends itself very nicely.

Ms M. Ward: One thing I wanted to ask you about, which is not to do with the Homelink really, but you might comment on it: It is something I was reading in the paper the other day about the employment equity programs and the controversy over the definition of "disabled." Whether or not this newspaper article was correct, it was saying that according to the federal definition, they left the definition of "disabled" to the person, whether or not they defined themselves as being disabled. Someone who was in a wheelchair might not be termed disabled, whereas someone else might be who was not immobilized in that same way. The definition was whether or not they felt they had disabilities.

Ms Nordemann: I do not know anything about that.

Ms M. Ward: You are not familiar with that. I will pass on to my colleagues.

1120

Mr Sutherland: I just want to pick up on the question I believe Mrs Cunningham and Mrs Sullivan had asked the previous speaker in terms of integration of services. It seems to me that you are offering a very good service. How does your service differ from home care? Have you got a different mandate or do you deal with people home care does not deal with?

Ms Nordemann: Are we talking attendant care services, or are we talking homelink co-ordinator?

Mr Sutherland: I just want to try and figure out what the difference is.

Ms Nordemann: Attendant care services are offered 24 hours a day and/or in an outreach program. I had listed what the difference between outreach and SSLU were. Home care does a lot of meal prep and washing and some baths. Under support service living unit or a 24-hour-care unit, an attendant would be working. We do personal care, from bladder/bowel care to baths, getting them in and out of bed, doing their meals. We do everything that they are not able to do to live independently. So if they are needing catheterizations, we are --

Mr Sutherland: So you are providing more in the need of nursing-type services or in the traditional providing of services in an institution, what would be considered nursing or health care aids.

Ms Nordemann: Yes. It is non-medical versus medical, and it is technically under the non-medical.

Mr Suchak: If I could just comment regarding that, it is the organization Cheshire Homes that provides the attendant services for London and neighbouring counties. However, throughout the province, other organizations such as the March of Dimes provides attendant care services. In southwestern Ontario, the March of Dimes provides similar services to those Cheshire provides in Chatham and Sarnia and in other communities: Hamilton, Toronto, the Niagara region.

Mr Sutherland: If I can just pick up on your staffing, has the majority of your staff gone through the health care aide program? Is that what you have, or do you have nurses?

Ms Nordemann: Under the attendant care, they have a social-worker-type background, but they do not have to go through the health care aide program. I do not have that background. I was trained by Cheshire and taught everything that I needed to know to perform the job. They want to keep it as uninstitutional as possible.

Mr Sutherland: It is just that I have had some of the health care aide people into my office who were a little concerned about their role in long-term care reform. There are not a lot of standards yet nor is it as regulated as they would like to be, and I was just wondering what the link was.

Ms Nordemann: I am a Homelink co-ordinator and I do not do any attendant care any more. I try to house people with disabilities, so I do work very closely with Cheshire and the like, but I understand the needs of the individual looking for housing. So I will ask the question, "Do you need support services?" If you do not need support services, then there is a different route we can go. So those are the links that my office and the other nine offices in this province make.

Mr Christopherson: A really short question. A good friend of mine in Hamilton, Alderman Terry Cooke, is a co-ordinator with the March of Dimes. I just wondered how similar the situation here is in London from what we have in Hamilton.

Ms Nordemann: Very similar.

Mr Suchak: Very similar. I am aware of the fact that they have waiting lists. They are in the process of working with the non-profit sector to develop more housing so that the March of Dimes can attach support services. Right now in Sarnia, our program there, we provide attendant services in 12 apartments that are part of a co-operative. We have a waiting list right now in Sarnia of 15 people who could benefit from support service living units.

Mr Christopherson: I know Terry and his people do a great job. I am sure you do here, too.

Mr Phillips: To understand the numbers you have presented here on the Cheshire Homes, the staff per day and then the housing subsidy, where does the $15-a-day housing subsidy go?

Ms Nordemann: Through the Ministry of Housing usually under the housing authority. It is under the dollar figure of the Ministry of Housing.

Mr Phillips: And then that money goes to the owner of the building, is that right?

Ms Nordemann: What happens with Cheshire, for Cheshire II, Cheshire has become the landlord. They take all the money and then they pay the actual company that owns the building. Yes, the money is all, at some point, put together in the same hands and given to the owner of the building to supplement. It is under like a rent supplement program. Mr Phillips: Where does the rest of the rent come from? From the individual?

Ms Nordemann: The individual.

Mr Phillips: So the individual is paying.

Ms Nordemann: Exactly, out of their disability pensions or income or whatever. They pay the rest of it. So this is the highest number you get: $15 a day is at the top. There are people who do not use $15 a day. They are working. They need the attendant care services, but they are fully employed in the community, so they do not need rent geared to income. They pay their own full rent. They are not even taking the $15 at that point.

Mr Phillips: I am surprised it is that low. The co-op numbers we see are about $50 a day per unit subsidy. Why would it be that low?

Ms Nordemann: It equates to about $465 a month under $15 a day.

Mr Phillips: How would it be possible somebody could operate a building at that?

Ms Nordemann: Yes, Cheshire is into its 12th year here.

Mr Phillips: Some day I will understand this, maybe, but in the budget, as you may or may not have seen, I think for $10,000 new units of co-op the annual subsidy per unit every year for a long while is $15,000 per unit, which I think is around $40 a day. But somehow or other, Cheshire seems to be able to do it at $15 a day.

Ms Nordemann: Those were quoted to me from Cheshire management last week, so those are up-to-date figures.

Mr Phillips: Something interesting there.

Ms Nordemann: That is where our concern is. There are people who could potentially be in SSLUs, and we could get them out of the hospital settings. I am working with a group to do just that, put another SSLU in place, get them out of the hospital. They are high quadriplegics. They do not want to be in hospital. They are in their mid-20s, and they want out. They want to live in a community all the rest of us take for granted. This seems to be the option to go.

Mr Phillips: I will tell you a quick story. I have coached hockey for eight years with a quadriplegic. He had an accident as a policeman and became a quadriplegic. But he is the type who will go to the ball game on Saturday. He will come and pick me up in his van and away we go. He lives in a home and just thrives and does it, I suspect, very efficiently and is very close to going back to work the minute the resources are there.

Ms Nordemann: Until we eliminate some of the physical barriers that people with disabilities are facing, some of this is not going to work. But we are fighting with building construction all the time, and that is why I work a lot with architects. I look over their drawings and I say: "Guys, this ramp is too steep. This washroom isn't big enough," because then we can make the world better for all. A person with a stroller -- mom or dad with a stroller -- is a disabled individual. If you have a heart attack or you are on a heart pacer, you have an invisible disability. It is just the wheelchair people see. There is a lot more out there than just that.

Mr Phillips: I know you are right. My father was in a wheelchair, and for a little ramp, he never could get out on to the balcony. It just was a half-inch of ramp.

Ms Nordemann: You break your leg tomorrow and you will find out what it is all about and how difficult it is to get in and out of the building.

Mr Phillips: Yes, I appreciate that. But those numbers are fascinating to me, and some day I will think about it.

Ms Nordemann: Those are per diem rates put out by the ministry.

Mrs Cunningham: Add it up. It is the same, just a little math. If I have a minute, I would like to ask about the pamphlet.

Mr Phillips: Fifteen dollars a day times 365 days is how much?

Mrs Cunningham: Yes, it is $15,400 a year, taking a 30-day month.

On the pamphlet here, you talk about your work in the Ontario March of Dimes barrier-free design. I was interested in looking at where you talked about building permits. You are saying, really, that we ought to be looking at the American National Standards Institute standards?

Ms Nordemann: That is a little outdated. We should look at the Canadian Standards Association.

Mrs Cunningham: Okay, that is what I was wondering.

Ms Nordemann: I cannot afford to reprint.

Mrs Cunningham: No, and I do not blame you. My question is, you are just making people aware that one has to check the standards.

Ms Nordemann: Yes. Canadian standards came out last year. Those were printed about a year before that, and I cannot afford to print new ones, so we are in a bind.

The Chair: I would like to thank you for appearing before this committee.

Mr Christopherson: Keep working on it, Gerry.

Mr Phillips: This new math really comes hard.

The Chair: I have just been informed that Mayor Downs is on his way back from Toronto. Maybe what we can do is not put a time period on this recess but just hang around to see whether he will come in the next 15 minutes, so this committee will recess until the mayor arrives.

Mr Sutherland: What if he does not arrive until 11:55? Are we going to hear his presentation?

The Chair: I hope he has a presentation we can deal with in five minutes.

Mr Sutherland: Okay.

The Chair: We will still be on the same time frame between 11:30 and 12. Okay, we will recess.

The committee recessed at 1130.

1140

The Chair: It has been agreed by the subcommittee of this committee that Mayor Downs is on his way back from Toronto and is unable to make it here for 11:30 and it is 20 to 12. This committee will resume at 12:40 if the mayor is here and hear him and get on schedule again at 1 o'clock with the regular thing.

Mr Stockwell: What if he is not here?

The Chair: If he is not here at 12:40, then we will wind up resuming at 1 o'clock. The committee recessed at 1141.

AFTERNOON SITTING

The committee resumed at 1301.

SUSAN SMITH

The Chair: Susan Smith is the next presenter. Welcome to the standing committee on finance and economic affairs on the budget review.

Ms Smith: Welcome to London. My name is Susan Smith. I am a candidate for the board of control in the November municipal election. I want to thank you for the opportunity to express my views on the provincial budget. I make a special effort to follow government budget deliberations. Such budget deliberations are lucid statements of political will.

I believe this government wants to spend tax revenue differently and smarter than the other provincial governments I have been served by in Ontario. The imperative of environmental and social sustainability responds to the statement of political will, not exclusively market-driven, that I was expecting from this government. I am not disappointed.

In order to foster informed public debate about any community's sustainable development, the broadest possible range of environmental, social and economic considerations must be integrated and evaluated in the planning stage of decision-making processes. I applaud this government's initiatives and policy direction on the environmental assessment process, especially as it applies to major road works. It is reasonable to encourage the participation of all residents in the designation of major transportation services.

I am heartened that some Londoners are prepared to pursue a vision of a pristine, if not nearly perfect, environment for our community. The former Minister of Transportation, the Honourable Ed Philip, was prepared to negotiate rail rights of way for public transit in all new highway developments and I hope the new minister, the Honourable Gilles Pouliot, continues this policy, as 20-, 30- and 40-year plans are essential to community planning.

I am a committed and usually enthusiastic consumer of the London public transit system. In your budget, your government's infusion of $2 million in transfer payments to the London system is at this point a continuation of the previous government's commitment to 75% of the cost of the new bus garage, bus shelters. If the software capabilities of the new electronic fare box is able to satisfy the information needs for a system in transition from a city centre grid to a better, expanded service, it will be money well spent. I do not know if that was included under the "Let's Move" part that was announced in the budget.

I had an opportunity to carry the budget around with me this summer, and when I was in Quebec I shared it with some friends who had one mild criticism that I will echo. Some of the figures on economic recovery are perhaps a little bit optimistic. I feel especially supportive and I am heartened to see in just the 1990-91 expenditures the Manitoulin Island land claim, the $196 million for the teachers' pension plan, which reduces the unfunded liability section of it, the farm income assistance and the phased-in pay equity for the Ontario public service.

In the Treasurer's budget announcement -- God bless Floyd Laughren -- he announced, I believe it was, several million dollars for child care infrastructure on our native reserves. Child sexual abuse has staggering costs to the communities and the social fabrics of these communities. I feel it is money very well spent. I know the dollar figure has been criticized and I am very supportive of that money being spent.

Locally, here in London we have benefited from the largesse of the province with $10 million for a convention centre. As someone who aspires to municipal office, I can guarantee you I would be happy to see that as a capped figure. I will not come back and ask for future funds. When the Minister of Tourism and Recreation, the Honourable Peter North, made the announcement, he was quite clear that this was a set dollar figure, and I think that municipalities can be prepared to bargain in good faith with this government. When the centre is constructed, please feel welcome to use the centre for your respective party conventions.

I appreciate the emphasis on infrastructure and the funding that is expressed in this budget. I will mention the deficit but I will still thank you for what I consider to be your fiscal responsibility. On the deficit, I believe there was an organization yesterday, the chamber of commerce, that criticized the wage protection fund, but that is just one example of how this budget's deficit is directly attributable to federal Conservative policies. Actually it is a very easy example.

Successive Conservative and Liberal federal governments since the late 1940s have certainly had the political tools, if not the political will, to change the corporate bankruptcy act. Any criticism of the wage protection fund is certainly not something you should listen to for very long. I know that in BC it is certainly part of at least one political party's platform and may well be part of any other political party's platform, and the responsibility rests solely with the federal government.

I will also just very briefly comment that I am not at variance with Justice John Sopinka's analysis of the Supreme Court decision regarding the Canada assistance plan and I am certainly not at variance with the syndicated columnist Leonard Shifrin's analysis of how much worse off we could be, but I want to thank the government for the good faith and the good budget.

Mr Sutherland: Thanks a lot for coming today. We appreciate having you here before the committee to talk about the budget and give your views on the budget. It was interesting to hear you had shown it to some friends outside the province. I think we have heard some reactions certainly from political leaders outside the province, their views on the budget, but you had shown it to some people, average citizens I take it, in Quebec who did not think it was that bad a budget. I was wondering if you could just comment a little more on what their reaction was.

Ms Smith: They did have criticism. It was mostly with a couple of the tables on Ontario in the 1980s, on productivity and wages. One individual is a business person, a consulting engineer who builds airports around the world, who is in an incumbent federal Conservative cabinet minister's riding. Some of the figures were overly glowing, perhaps that Ontario's productivity in terms of labour productivity growth has not been quite as high both in the area of R&D and the public expenditure on labour market training. They just had a pretty straightforward questioning of how accurate those figures were, but no particular disappointment with some good economic housekeeping in Ontario.

Mr Sutherland: I know you are very active in this community. I was wondering if you could just give us some sense for the record in terms of what some of the needs are out there, for the people who have lost their jobs, in terms of skills training. Is London an area that has a well-educated population, so it is developing new skills, or is basic skills training, something of that nature, what an emphasis needs to be on for London or for the community as a whole?

Ms Smith: There are some services in London, but I think what is needed is really a much better structure. I am personally more inclined to say that the money needs to be raised internally. It is good that the high value added jobs in education and health care are what is being preserved in the budget. Frankly, I did not look for the budget to create one job.

Ms M. Ward: Do we still have some time left?

The Chair: No, we do not. I would like to thank you for coming before this committee. I recommend that we recess for five minutes before the next presenter.

The committee recessed at 1308.

1315

SANFORD LEVIN

The Chair: Mr Sanford Levin, please come forward. You have 15 minutes and you can leave some time at the end for questions from the three parties.

Mr Levin: Thank you. I am a high school teacher. I also hold an MBA from the University of Western Ontario. I spent a number of years in the financial services industry before I started teaching.

I would like to start by saying that to have held the line or to have cut spending at the tail end of a recession would not have made economic sense. This government has decided properly to inject a little bit of adrenaline into the economy as it weakly emerges from a very severe recession. Putting money into consumers' pockets by protecting 70,000 jobs makes economic sense. After all, two thirds of the gross national product is generated by consumer spending, provided of course it is money spent inside Canada and/or saved.

There are certainly other bright spots. The $215 million to help reform the welfare system as recommended in the SARC report will go a long way to alleviating the cycle of poverty and the welfare trap. Anything to help, say, the single mother who wants to go to school or to work but who would lose her child's dental benefits or subsidized day care space if she did makes sense.

Unfortunately, detractors of the budget, those who have done so well over the 1980s, a period of increased federal government spending and lower taxation increases for corporations and those at higher income levels, have decided that the 1990s are going to be a period in which Ontario must decide between being competitive, the catch-all phrase for the 1990s, and being a caring society. I ask you, is this really the price those who did not get rich in the 1980s have to pay?

Having said that, I still have some concerns with the budget.

Although I salute the Treasurer's support of our agricultural sector, there is nothing in the budget really to help reserve farm land from developers' bulldozers, a real problem in the London area. Why did this government not announce that it was using some of the $90 million earmarked for agriculture to either land bank some of this precious resource or to purchase some of it through conservation easements, thus giving farmers needed cash while preserving the land for what it is best suited for, food production, not paving, or as it was said by a Peterborough politician at AMO yesterday, crops, not lots?

I am also disappointed that the government revised its tax on fuel-inefficient cars. This change seems to make the additional $10 million for the Ministry of Energy's activities aimed at energy efficiency a good intention rather than an effective use of funds.

As is true of all estimates based on projections, I am concerned that the Treasurer was overly optimistic, as most treasurers seem to be, in projections for future growth of both the United States and Ontario economies. I also wonder about the projected expected decline in the Canadian dollar to 84 cents. After all, it is fairly clear that the federal government is committed to a high dollar policy, for whatever reason, be it to satisfy unpublished agreements in the free trade deal or to encourage cross-border travel and shopping which will help integrate our two economies. I am not sure of the reason.

I would suggest the government has had a communication problem in trying to explain this budget. For the provincial Conservatives, it is very easy and effective, albeit overly simplistic, to talk about tax-fighting. After all, people understand the word "tax" at face value. It is easy to do when you have a citizenry that has limited understanding of basic economics. "Lower taxes" is easy to say, but for the government, explaining the benefits of the multiplier effect of deficit spending has caused eyes to glaze over. The federal government knows most people have limited command of economics. This economic illiteracy is one reason why the federal Conservatives did little to explain the technicalities of the free trade agreement during the 1988 campaign. After all, why dissuade those people who were thinking that free trade meant duty-free shopping?

The government is also going to have a hard time here in Ontario trying to explain why the Ontario government has $1.6 billion less from the federal government, and unfortunately, perhaps even less to come. I know and you know that when the federal government cuts back, it squeezes the province, which in turn squeezes the municipalities, which in turn ask home owners to cough up more. But do not expect the average citizen who does not eat, sleep and breathe transfer payments to understand any of it. People seem not to understand that the services we use cost money.

Let me talk about the deficit. The deficit itself is a red herring and a tool that can be used any way you want. Let's not forget that during the election of 1988, the federal Conservatives made a point of buying voter support through election promises -- excuse me, Mike Wilson called them spending commitments -- such as national day care. Suddenly, after the election -- and I say suddenly because the deficit was not even an issue in the campaign -- these spending commitments became expendable in the interests of deficit reduction.

After a four-year orgy of federal spending without a peep about the deficit, it suddenly became big news in 1988. In fact, it was such big news we could not stop hearing about it. We saw commercials about it, a dollar coin rolling across our TV screen. Because we were told enough times it was a problem, it became a problem. As the saying goes, call a swan a duck long enough, someone will swear to hear it quack.

A deficit is a problem because of who holds it. When a parent borrows from a child or vice versa, a deficit is not onerous. It stays in the same household. Before 1984, most Canadian debt instruments were held by Canadian citizens and Canadian institutions such as banks. Currently, thanks to the federal government's opening Canada for business, foreign investors own about one third of all provincial and government of Canada bonds and roughly half of all corporate bonds. Therefore, the payments flow out of the country, and it is to whom we owe the money that is a bigger problem than the sheer size of the deficit.

Another argument raised against the deficit is its impact on money markets. The private sector is concerned that it will be squeezed out from capital markets by large government debts. Might I remind you that the 1980s saw enormous increases in government debts, yet it was also a period of time during which record corporate takeovers occurred, most often using borrowed capital.

It is also argued that the budget will discourage investment in Ontario, but the majority of recent investment has simply been takeovers of existing business, and the earnings of these acquired companies are then used to repatriate dividends to foreign parents, not for research and development and continued investment in plant equipment and worker training which would encourage competitiveness. For example, Amoco, when it bought Dome Petroleum a number of years ago, had a total investment of only $300 million in its first 20 years in Canada. During the same period it repatriated $2 billion.

One reason for our declining competitiveness is not the deficit but the lack of indigenous Canadian companies involved in the non-resource sector. We need something to replace primary manufacturing and resource extraction as the engine of growth. The problem is that we do not have anything to replace them.

The Treasurer has talked about encouraging productivity growth based on high wage and high value added products and services, but where is the investment in R&D? The budget only calls for $131 million for Ontario's technology fund, just $57 million for a manufacturing recovery program and a mere $21 million for Innovation Ontario Corp.

In conclusion, the government could have done more to create a healthier future economy. Because the so-called free market is controlled increasingly by oligopolies which operate only in their own best interests -- the real "private" in the term "private sector" -- which are more often than not contrary to the best interests of the greatest number of people, it is up to government to take a lead in restructuring the economy in the interests of the whole and not just those interest groups led by the Business Council on National Issues.

There is actually a decent starting point for this. It is called Competing in the New Global Economy, a report of the Premier's Council under -- I hate to say it -- the previous provincial government. It is one of the few examples where various groups got together and put together something that made sense and was actionable. What happened to it, Mr Kwinter? It was a good report.

Mr Kwinter: Ask those guys. Why would you say, "I hate to say it?"

Mr Levin: Various reasons.

The Chair: Would you conclude? We will have about two minutes for each party, so Mr Kwinter can make his comments.

Mr Levin: I can stop at this point then.

Ms M. Ward: Thank you for your presentation. On the first page you were talking about the estimates and the projections for the future and expressing the concern that you thought they might be overly optimistic. I guess nobody knows at this point, but I just wanted to comment. A couple of the organizations which appeared before us, such as Informetrica Ltd, and actually the Conference Board of Canada also, which did not appear, but their projections are more optimistic than the Treasurer's. As I say, nobody knows.

What I wanted to ask you about is if you think that there may be action by the federal government to lower interest rates and possibly bring down the dollar, given that we may be coming up to a federal election. Do we have some hope there that they will want to make things look a little better?

Mr Levin: Yes, I would say so. The federal government is quite aware that lower interest rates and an improving economy will help its re-election campaign, quite definitely, so I can see that coming, which in general is going to help Ontario's economy as well.

Mr Phillips: Just a comment and then a question. It is interesting to hold that up, because that was the blueprint. It came out last July. There was an election. You have asked the question of the wrong person. You ask the government. I do not know what your political stripes are; maybe even that is who you might support.

My question to you is this: I do not think we can ignore the debt. Anybody who thinks the federal government has a lot of money is, I think, dreaming. They are broke. They are bankrupt. They have a debt of $400 billion, and as the Premier here says, we probably have to service half of that debt out of Ontario taxpayers. This provincial government will take the debt to $80 billion, so in about four years, Ontario will be servicing debt of probably $300 billion. Is that sustainable?

Mr Levin: I would suggest that it is. In the size of the economy that we have it is not really that onerous. If you really want to bring in money, certainly the deferred taxations of corporations are already $30 billion. They could pay off the deficit that the federal government is running in one year. These are tax matters, though, that are federal issues rather than provincial issues. Take a look at the balance sheets of most major corporations under deferred taxation.

Mr Phillips: I have. But I am surprised you would say that. But time will tell.

Mr Levin: Certainly.

Mrs Cunningham: Where do you teach?

Mr Levin: I teach in a high school, and at Fanshawe College.

Mrs Cunningham: Here in London?

Mr Levin: In Elgin county.

Mrs Cunningham: On page 3 you talk about debt and tax-fighting "within the same household." I am the mother of three kids in their 20s, and it took us a long time to pay for our house, my husband and I, and I hope I never have to borrow against it. I might have to. I look at the way I manage my household the same way as I hope that I have the responsibility of contributing to the management of this province, and I do not think it is okay that we have a debt. You as a teacher, I think, should be encouraging kids to stay out of debt. These kids are going into the world of work with an average of, what is it, Kimble, $10,000?

Mr Sutherland: About $7,000 to $8,000.

Mrs Cunningham: With $7,000 to $8,000 of debt after they get out of university. Then we are asking them to pay off debts.

I was on a school board in London for 15 years and we never debentured. I was proud to say to my kids that I did not borrow a penny to build a school, because I thought today's group was enjoying the educational benefits and I did not want to penalize them. Maybe I am wrong, but perhaps you could respond, as a teacher.

I am a parent and that is the view that I give my kids. I have encouraged them not to acquire debt, and they have had to give up a lot that their friends have, not to go in debt. I do not know if I am a good teacher or not, but I am saying your message on page 3 does not go far enough. I think it is bad that families go into debt, let alone countries.

Mr Levin: If we did not have deficit spending, if people did not have a mortgage on a house, we would not have any home-buying. If we did not have any home-buying, we would put into critical care a serious part of the economy.

Mrs Cunningham: But that is a planned debt. You take your mortgage for so many years and you have a planned period of time to pay it back. One of the big difficulties, and you have said it yourself, actually -- and by the way, I appreciate your presentation today. You have given me some things to think about, so I am glad that you came and made the points you did. One of the things you said about the federal government is that it took five years to figure it out. I think it took them five years to figure it out because all of a sudden they were in government, just like this group is.

And yes, it is tough. It is really tough. I do not think anybody running in that election last year perceived a $10-billion or a $9.3-billion debt. I would say none of my colleagues running in London, from any party, thought we would ever have this kind of debt. I am just saying that the federal government got in and figured it out, and they are not holding the purse strings. The Japanese community has $53 billion of our debt, and I do not think those interest rates are going to go down, at least for that portion of the debt.

The Chair: Okay, Mrs Cunningham. The time is up.

Mrs Cunningham: Sorry the time is so short. We can do this another time.

1330

CITY OF LONDON

The Chair: The honourable Mayor Tom Gosnell and Deputy Mayor Jack Burghardt.

Mrs Cunningham: H-E-A-R-T, right, Jack?

Mr Burghardt: You got it.

The Chair: I would like to welcome you here to the standing committee on finance and economic affairs on the budget review. You have one half-hour for your presentation. In that half-hour, try to save some time at the end for a question and answer period, which will be divided equally among the three parties. Identify yourselves for the purposes of Hansard, and you may proceed.

Mr Gosnell: Thank you very much, Mr Chairman, ladies and gentlemen of the Legislature. On behalf of the city of London and Deputy Mayor Jack Burghardt, we appreciate the opportunity to speak regarding the city's perspective on this issue.

This municipality and our civic counterparts across Ontario have taken dramatic steps in the past year to bring in municipal budgets that reflect the pressures being brought to bear on the economy today. Deputy Mayor Burghardt was the chairman of our budget deliberations and I would ask him to say a few words now.

Mr Burghardt: London city council set a pre-budget guideline that the municipal share of the tax levy in 1991 would be 5% or less. In fact, even with escalating welfare costs, the city managed to bring in its budget with a 4.78% increase. It should be pointed out that this was done with some very tough decisions on key services to our citizens. It was also accomplished without incurring long-term debt.

This municipality strongly believes we cannot mortgage our future for short-term solutions. It is our position that municipal ratepayers can no longer shoulder an ever-growing list of responsibilities for provincial programs.

For us to take the present government to task on any specific issue may be of some help, but it would miss the underlying point. While the new government is still young in its duties, we encourage those now in power to carry forth with full consultation. Labour, business, institutions and municipalities should all be invited to present their views. We want to be assured that the input received will be fully analysed and considered. New programs and policies put into place with little or no consideration placed on the views of those most affected can only result in severe damage and bitterness. In this economic climate, we cannot afford any unnecessary injury.

Mr Gosnell: Make no mistake about it: The businesses of southwestern Ontario are valuable resources, and like most other resources, they can be extracted. Those who would like to take our companies home with them are regular visitors to London. What these modern-day prospectors see and want to take back with them are the type of companies that have helped make Canada one of the preferred nations in the world in which to live.

Bankrupt companies pay no salaries and have no taxes. Companies that move to other jurisdictions pay us no salaries and no taxes, but they continue to sell their services and their products here. They therefore end up taking money out of the province.

The role of southwestern Ontario in fostering the economic wellbeing of the rest of Canada has led to some misconceptions. Although this has historically been a strong area, it is not without its weaknesses. Centres of traditionally high job concentrations tend to act as a magnet for those who are seeking work opportunities. Not all of these people are easily absorbed into available job openings. Some indicators regarding this area should be of interest.

In 1990, southwestern Ontario lost 45.1 jobs per 10,000 population. This was a higher loss than experienced in any other part of Ontario. Also in 1990, over one quarter of the job losses in Ontario occurred in southwestern Ontario. Additionally, one quarter of the Ontario plant closures in 1990 occurred in southwestern Ontario. One third of the province's plant closures in January of 1991 occurred in southwestern Ontario, and 49% of Ontario job losses in January 1991 occurred in this region.

These indicators are not just objective, cold statistics. They reflect the enormity of the problem being experienced by thousands of people in this strategic area of the province. Job losses take their toll on the individual social and economic level of the people involved and on those who must try to alleviate the situation. In this regard, the cost to the provincial and municipal treasuries is enormous as welfare costs spiral upwards. These costs must be supported on a diminishing tax base.

London, as the regional centre for southwestern Ontario, is very concerned that this area of Canada and Ontario is becoming so easy to mine. This region has been one of the major economic engines of the province and of the nation. Southwestern Ontario helps to create an Ontario that is able to put far more into Canada then it takes out.

With the vitality that we have been able to build in southwestern Ontario, we have been able to develop a social system that does not often forget those who are in any kind of need. Our health care system is the envy of many. Our cities are among the finest on the continent. People from all areas of the globe seek to make Canada their home. Among these reasons are the personal freedom, quality of life and prosperity that this country offers.

There is no perfect society on earth. Imperfections and injustices will always remain to be addressed by people and their governments. Ontario is no different. There is yet a long agenda of improvements to be made. The passing of each year brings new items of needed advancement to our attention. The present government continues to develop its program in this regard, and in many ways we support it.

Our support is tempered, however, by a desire to ensure that any advances are being designed to achieve the intended objectives while enhancing the ability of our economy to continue to contribute to the wellbeing of the people of Ontario and Canada. New measures fashioned to bring new levels of social responsibility into being often carry a pricetag of significant proportion. Because we live in a world which brings us into closer contact with people, institutions and businesses of those of other nations, we must take great care to make sure that our goals are achieved while enhancing the ability of the contributors to our economy to survive. We must be able to pay our own way.

We recognize that the source of our frustrations with the lack of the competitiveness of southwestern Ontario businesses to compete lies not with any one level of government or with one specific political party. We are pleased in particular with support for the convention centre committed by the federal and provincial governments and with assistance for new investment received from the present provincial government. The province has recently announced the manufacturing recovery program and is also moving towards the facilitation of the development of a southwestern Ontario strategic economic plan. We applaud these efforts. At the same time, we are in a position to list some specific areas of concerns that in our opinion need to be urgently addressed. These all affect our ability to compete in a global marketplace.

We are fully aware that the competition provided by those in other countries has no sensitivity to our values and goals as a society. Indeed, competition will come from wherever companies can optimize their investment to meet their chosen level of quality in the most efficient way. Our challenge is to find ways to meet this competition and come as close as possible to accomplishing the goals and the values of our society at the same time. This is not an easy task, but the benefits to our people and to the world are worth the effort. To institute social and environmental reforms while taking the time to adequately consult with those involved, fully research the possibilities and then select the avenue that leaves us in the strongest possible economic position while accomplishing our goals must be our standard.

We are now aware of the following legislative changes and policy areas which, if handled improperly, could further significantly damage the southwestern Ontario economy.

An artificially high Canadian dollar makes our manufactured goods and services too expensive to export and too expensive to compete with imports. At the same time, a high value dollar makes it easier to acquire and import goods and services. Free trade can only work if the value of the dollar assumes a proper market level. A proper adjustment in this area would work towards solving a number of pressing problems ranging from cross-border shopping to the realization of a more favourable trade balance with the United States, our largest trading partner.

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We know that the size of Ontario and Canada, relative to the population and level of social and environmental programs we have achieved, requires more money per capita to maintain than many other countries. At the same time, we must find ways of cutting our deficits and more equitably collecting taxes. This is especially true when too many people and businesses still are able to avoid income taxes altogether. The trucking, airline and tourism industries are three that immediately come to mind.

The wage protection fund was implemented April 11, 1991. This fund is designed to pay unpaid wages to workers whose jobs were destroyed by bankruptcies or voluntary shutdown. Officers of a company are directly affected by this legislation and are personally held liable for payments of up to $5,000 per employee. This must be considered onerous and not in the best long-term interest of workers. Those companies, to avoid legislation, will look elsewhere.

The provincial government is proposing to raise the minimum wage in Ontario to 60% of the average industrial wage. If implemented, this would effectively jump the $5.40 minimum wage to $8.50 per hour. This has the potential of causing serious unemployment in the service sector and, more particularly, the retail industry. It also should be noted that Canada's wages are rising faster than those in the United States. This, when combined with the increase in the value of the Canadian dollar, means that in US dollars, Canadian manufacturing wages are at least 10% higher than those in the United States.

In another area, a new provincial discussion paper proposes changes to laws for workers employed in the contract service sector. Work performed by employees of an outside contractor could become the responsibility of the company hiring the outside contractor; again, a negative to investors.

Tax on capital: no longer a tax-deductible item.

Health tax levy, 2% no longer a tax-deductible item.

Unemployment insurance: a longer period of benefits resulting in rate increases to cover the increases in benefits and a requirement for employers to replace females and males on maternity/paternity leaves.

Indexed pensions: more pressure on defined benefit programs, which results in additional costs.

The government has eliminated tax-based leasing, which in the case of our manufacturers drives up the cost of tool purchases approximately 2%. Tax-based leasing is rampant in the United States and provides a further competitive edge to their industries.

Current interest rates: a spread of between 4% and 5% between the United States and Canada increases the costs of borrowing for businesses and consumers alike.

The gas guzzler tax: in its present form, this tax penalizes an Ontario production facility while allowing a competing United States facility and its products to escape taxation.

All of those points create a huge disincentive to expand, to stay and to further invest in Ontario. All of these taxes and programs should scare the hell out of the citizens of Ontario.

Another area of great concern to our municipality is the impending changes on October 1 to welfare assistance to those who are 16 and 17 years old who choose to live independently from their family home. Under the present legislation, an employable person under the age of 18 is not eligible for assistance unless there are extreme extenuating circumstances.

In the Back on Track report, October 1 has been earmarked as the date for launching substantive changes in this area. Employable persons aged 16 and 17 who are in need and are not living in the family home will be eligible for special financial support. We could not possibly disagree with that more.

To date, the province has not provided specific guidelines, nor how this legislation is to be implemented or interpreted. Specific costs to London are unknown at this date. While the province has earmarked $1.5 million for province-wide implementation of this legislation, the long-term, direct impact on both levels of government is unknown.

Unabated growth and expansion of welfare assistance cannot continue without all levels of government seriously questioning the viability of some other services or the ability of taxpayers to shoulder a crushing tax load. In a more optimistic vein, if we have the good sense to recognize the problems we face in Ontario and do something about them, we have a great deal to build on.

We have much upon which to build in this area and in the rest of Canada. Our people, our natural resources, our existing industrial plant, our educational institutions, our technology and our quality of life form a firm foundation for the establishment of a strong future. For this to be realized, we need to do a number of things now. We need to encourage high-technology transfer, facilitate increased export trade, encourage more flexibility in the workforce, foster more skills and increased product quality and improve the effectiveness of our educational systems.

Mr Burghardt: In its recent budget, the government of Ontario committed itself to reform of the social assistance program. Since many of the recommendations in the Social Assistance Review Committee's report, Transitions, were not implemented, the current Minister of Community and Social Services asked her advisory group on new social assistance legislation to fast-track its work and present those recommendations that could be implemented without changing the legislation. Their work was presented, as you know, in the report Back on Track. The result of this advisory committee's work was the announcement of approximately 60 of Back on Track's 88 recommendations that are being implemented.

The recession has had a devastating effect on the economy of southwestern Ontario. This is proven by the fact that many of our new welfare clients have never been on assistance before. It is essential, now more than ever, that those in need have access to the system in these very difficult times. The stress of the recession on the municipality, however, is not adequately addressed. We must urge the province to implement substantial changes immediately to cost-sharing formulas.

The new direction will provide positive assistance changes to a number of our clients and the system will ensure that a basic level of income is available to an expanded population in Ontario. Key features of the reforms impacting on our clients include equalizing the benefits to sole-support parents on general welfare with the family benefits rate structure; improving benefits for battered women; more information available for clients, keeping in mind the multicultural population; general welfare availability for persons working full-time; increased exemptions for earnings, enabling clients to retain more of their welfare entitlement, and increased rates for single persons.

The minister also announced approximately $50 million for the creation of 2,000 to 2,500 jobs. Every new job is a scarce and treasured item, and we applaud the direction. However, Ontario municipalities have experienced almost 100,000 new welfare recipients since 1989.

Relief to municipalities has been announced by the province in these new directions. The two key elements of this relief do not really address the recent strain that welfare costs have unexpectedly placed on municipalities. The key elements of relief include a 90% cost-sharing of that portion of our welfare case-load beneficiaries over 3.5% of our population. Although provincial contacts have indicated this may come into effect at midyear, the honourable minister has announced this would be retroactive to January 1 of this year and continue to the summer of next year. London will appreciate some additional subsidy from this. In addition, a second key element is that cases on welfare who are sole-support parents will be financed at 100% provincial. This will likely impact a little over 10% of our case load effective August of this year.

While the above changes are well received by us, there continue to be some major municipal concerns which have been avoided.

First, on the issue of consultation, we are very disappointed that the input we have given through such mediums as the Provincial-Municipal Social Services Review Committee process has not been acted upon. This is evident from the fact that none of the recommendations in the minister's Back on Track report that dealt with the provincial-municipal cost-sharing arrangements are being implemented in the social reform package.

We are also concerned that the minister's advisory committee did not address many important recommendations in the Social Assistance Review Committee's report, Transitions, specifically the recommendation that the senior levels of government should be responsible for the funding of social assistance.

Finally, we are concerned that many of the announced reforms, which have been identified as not entailing any costs to municipalities, will in fact produce significant costs to us in the future. In this light, and in view of our incredible increases in the past two years, the announcement regarding relief to municipalities is diluted. In addition, the strain on our municipal staff continues and is not being clearly addressed at the provincial level. We therefore urge the minister to implement the recommendations of the PMSSR report which deal explicitly with the issue of the cost-sharing relationship between the two levels of government in line with the implementation of the announced reforms.

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Mr Gosnell: As a municipal council, we must seriously question the viability of the province assuming the costs and overhead of running a car insurance plan for drivers of Ontario with no promise of lower rates, the loss of thousands of private sector jobs and the prospect of government assuming the costs of running yet another mammoth department. We have heard from the Premier that the new government-administered plan will create jobs but, once again, it creates more government and more expense to taxpayers. The auto insurance industry is a $4-billion-a-year business in this province. The estimated cost of taking this business under provincial operation has been estimated in excess of $3 billion. Surely taxpayers do not need that burden too. As someone who has operated a private family company before becoming mayor, let me assure you that government should not be in the business of running business. Enterprises are best left to the private sector.

In concluding our comments today, let me emphasize that Ontario and its municipalities have grown and prospered because of open communications and a co-operative effort with our provincial counterparts. In times of new challenges, and indeed in times of new opportunities, we cannot afford to centre our efforts on partisan bickering.

We applaud your efforts to meet with various community groups across the province. Your hearings, in combination with ongoing discussions at Queen's Park, will clearly paint a vision of where our province stands today and the direction it should take tomorrow. Ontario has traditionally been a leading force in our nation in virtually every aspect of Canadian life. That role, that vision, must continue for the benefit of us all.

Mr Kwinter: Thank you very much, Mayor Gosnell and Deputy Mayor Burghardt, for your presentation. I thought it was excellent. It was balanced and well researched. You have done a real service to this committee.

One of the things the government has always stated when it talks about the deficit is that if it did nothing, the deficit would be in excess of $8 billion. I think that is one of the problems, in that the government has really perceived that was the option it had, to do nothing. On the first page you talked about setting a pre-budget guideline of 5% or less in your tax levy. That meant you had to make some very tough decisions on key services to our citizens. Could you share with us some of those decisions and what you had to do to keep it in that line?

Mr Gosnell: When we went to that review, we found that we had some programs that really were not accomplishing what we wanted. It was a good exercise in management. We found that while we could postpone some projects, not indefinitely but certainly for some period of time, it was not causing the strain we thought it would. That is the one argument here from other levels of government, that if we do this, we are just sacrificing something else. In fact, a little bit of fat builds up in all organizations. It needs to be trimmed and that did happen.

We cannot afford to carry an $88-million-a-year welfare load in the city for very much longer. We are hoping the province can work very aggressively in trying to promote business investment in this province, because in the long term, if you want a program to keep people off welfare, you have to provide jobs and you cannot provide jobs with the disincentives to industry that are now in the province.

Getting back to your question, we could live with our 5% guideline. It was painful in some areas, but I think if we could show municipally the resolve that we can live within our means and be less than inflation, if that example could be felt by the other two senior levels of government, and if we can show an opportunity for new investment in this province, then many of the reasons why we are experiencing the problems we are, the very significant demands on social services, would end with people having employment.

Mr Phillips: I echo what Monte said. It was a very thoughtful presentation. A lot of work went into it.

It is clear to us the budget is not going to change. The government is delighted with it and it is there. All we can do as opposition -- this is not partisan bickering -- is to try and say, "Listen, we've got some real concerns about it in terms of economic activity." We are quite worried about unemployment, job creation, all of those things, but I think you should assume this is the budget for next year.

Because you have the pulse of the economic activity in this area, let us assume that this is the budget for at least the next year, I suspect for several years. With deficits in the $7-billion to $8-billion range and new taxes in the $5-billion range, what do you feel might be the economic impact in terms of your either attracting industry to London or retaining the industry you have got here?

Mr Gosnell: I think it is going to be death for cities like London and areas like southwestern Ontario. We gave you a number of initiatives that have occurred, not just from this government but the past government, that, when taken in combination, are huge disincentives to doing business in Ontario.

First and foremost, we cannot add to that. We cannot bring in in October the right of 16- and 17-year-olds to leave home and go on welfare. That is going to debilitate the economy of this province and it is going to have impacts far beyond its economy. We cannot continue with an agenda that is going to throw any more hurdles on the existing planned business expansions or opportunities in this province.

Second, we have to get back to the realization that we have to compete internationally. You cannot have an minimum artificial wage that is going to do nothing but create further unemployment. There has to be a realization from the institutions and labour and government that we have to get people back to work, we have to get them off the welfare rolls, we have to make the right type of long-term investments. I applaud the government for some of the decisions it has made in terms of the investment in research and development and education. We have to get people back to work and we have to do it at a wage and at a tax level that will encourage investment. If we do not have that, then the next few years will be very bleak.

Mrs Cunningham: Once again, you make me proud to represent this city. I think you have given us enough specifics, those of us who represent London, that we can go back and I can ask the questions and David and Kimble can work with the ministers. I will say proudly that I like to think of us as being particularly non-partisan as we work on behalf of the citizens of London, but you have been great.

I have three points I would like you to clarify for the committee. First, on page 2 you talk about job losses in southwest Ontario. It is very difficult, as you can imagine, for us to make this point at the Legislative Assembly, because we are not perceived as a city or a region that has people on welfare or that loses jobs. When I stand up in the House and say that, there are often uncomplimentary comments coming from the other side of the House. I want you to know that. In this committee so far, job losses have only been attributed by my colleagues and government to free trade. I would like you to speak to that.

Second, I would like to know how many new jobs we have seen as a result of this government's incentive, because it talked about the job creation money that went out. How many has the city of London got? If you would like to speak to the Fanshawe Park issue publicly in my presence for the first time, please do so.

The third one is -- my colleague reminds me I have three minutes. So what? Let us show some flexibility. We have our whole city here. We have also listened in this committee to the same old question, and that is that the opposition parties would like to cut out social services as they make better management. I personally would cut out the $59,000-chauffeur-driven limousine to the president of TVOntario to start with, and a few other political positions. But I would like you to speak to how you answered the question here about 5%. People cannot believe it when I stand up and say that. "You must have cut out all the help to the poor people." That is what people say to me.

If you would like to respond to those criticisms, often made by some of my colleagues that ought to know better, I would like you to take this opportunity.

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Mr Burghardt: First of all, the mayor referred to that in some of his opening remarks where he stated that this area cannot continue to be mined as such. There is no doubt about it, and I have personally experienced it at other levels of government too, that people look to London and southwestern Ontario as a fat-cat city, as having everything going for itself. Sure, we have a lot of things going for us, but we are still affected as much as anyone else on a per capita basis in job losses, in increased welfare costs.

It has been mentioned that our welfare budget alone has doubled. We pay far more for welfare assistance than we do for looking after our roads, sanitary sewers and the like, which municipalities are really mandated to do. There is no question about that.

While we have applauded some of the efforts here in our presentation today, we have not seen the results of any increases in jobs in this area. Far from it; we have seen job losses. Small manufacturing plants in southwestern Ontario have left this area to go across the border or have closed up completely.

Whether that is the result of free trade or just the high cost of doing business in this area, who knows? But we do know one thing: We are being affected by it, and London is affected as much as any other city in the province with cost to municipalities. We can no longer afford it.

Mr Kwinter asked earlier about some of the programs that we had to affect in our budget deliberations. We had to really bring the hammer down on boards and commissions. We had to cut back on recreational and park facilities and this type of thing. We had to cut back on our LTC, the London Transit Commission, various areas like that. Library services were greatly affected and could have been more greatly affected had we not been able to move some figures around, I will grant you that. But on the whole, we have been affected and there is no question about it. London suffers as much as anyone else.

Mr Gosnell: If I can just jump in on one other item that is very much germane to this, the government has suggested it is prepared to see investment in capital and municipal infrastructure and, in our region, we are not seeing it at all. In fact, the Fanshawe Park Road project, almost $10 million, has not yet received provincial approval. The Minister of the Environment is holding up major road work that is the number one priority in the city. Our second, which is Wonderland, our third, which is Adelaide or Commissioners, our fourth, which is Cheapside, are all waiting for environmental study reports. Millions of dollars are being held back; jobs could be created right now.

Mr Winninger: I will not debate the road-widening issue with you today. It is a very complex matter. I would say this, however. I enjoyed your presentation. I agree with a lot of the submissions you make. It might not surprise you I disagree with some of the others. Maybe you can help me with a problem I have here.

We increased the municipal transfer payments. We announced Back on Track proposals that were free of cost impact to the municipalities so far. We have allotted moneys for pay equity to help municipalities, hospitals and the school system. We have also spent money on roads. We have spent money on hospitals. We have spent on schools, art galleries, universities, what have you. People are coming before the committee and saying we are spending too much already, the deficit is too high. You are coming and saying we have to revise the cost-sharing formula and I cannot imagine you would be coming to us if you were asking that you bear more of the burden of the cost. You are asking that the province bear more of the burden of the cost, which again will increase our deficit, yet at the same time you are saying this budget is bad for the economy and you have itemized all the reasons why.

As a municipality, you are faced with competing pressures; so are we as a government. I do not see how we can --

Mr Stockwell: Is this a question or a speech?

Mr Winninger: -- keep the municipalities afloat, which we have made efforts to do, and at the same time pare down the budget.

Mr Gosnell: If I can just answer, I think the one thing that none of us should lose sight of is that we are all taxpayers to either a city or the region we live in and to the province. So if we are talking about a change in moneys to be paid by the province or the city, it is still our money and we are still representing the same people.

What we are saying is that we want that relationship disentangled. We think there has to be much less duplication of management in government activity, in transportation or social services, and your government has a responsibility to create a climate for investment and a climate for job creation so that demands on the social assistance program go down, not up. You cannot do that by putting more disincentives to businesses and on local governments through taxation, or provincial taxation that will just drive that investment and those opportunities away.

Those are the things we have in common. How we arrange or transfer moneys is something that can be worked out and we are hoping can be done with Mr Cooke's announcement the other day. But the bottom line for all of us in this province is that if we do not have financial reasons for companies to stay in Ontario and expand here, the problem will be much bigger.

Mr Winninger: You have certainly put forward a case, but it still does not solve our immediate problem as to how we deal with the impact of the recession, the loss of jobs, the dislocation --

Mrs Cunningham: You do not give welfare to 16- or 17-year-olds for starters.

Mr Winninger: You are taking my time.

Mrs Cunningham: You do well when I take your time. You are much better when I encourage you.

Mr Winninger: How do we deal immediately with the hungry, the homeless and so on, who are making great demands on your welfare roll? How can we deal with that to lessen the financial burden on you immediately, and still pare down the budget? You really have not answered my question.

Mr Burghardt: We have not had a chance to address it.

As we have said continually throughout our brief, the welfare costs are breaking us. They really are; there is no question about it. We are looking to the provincial government, which institutes programs without consultation with us: example, 16- and 17-year-olds. We are going to stress that and we are going to stress it far more. That is irresponsible; it really is. A youth 16 or 17 years old who cannot, for whatever reason, get along at home can now, if this is implemented, come down to city hall, receive welfare and live wherever, on the street, who knows? That adds to the cost. That adds to our costs.

We would like to see basically in the overall welfare situation that the province fund 100%. Then perhaps we can make some arrangements in our cost-sharing formula that will allow us to look after those things for which we are mandated.

Mr Winninger: You just added more to our costs.

Mr Burghardt: No, we have not.

The Chair: Time has run out. I appreciate your presentation and your time before this committee.

STRATFORD AREA ASSOCIATION FOR COMMUNITY LIVING

The Chair: The next group is the Stratford Area Association for Community Living. You will have one half-hour for your presentation. Try to save some time at the end for questions and answers that I know the committee members here are very anxious to ask you.

Dr Steel: My name is Dr Margaret Steel. I am the executive director of the Stratford Area Association for Community Living. I am sure you will be happy to hear that it is a very short presentation. I do not believe in being too wordy. You say what you have to say and then you stop.

This presentation is made from the point of view of a social service agency serving people with developmental disabilities and also that of a responsible taxpayer. I pay taxes the same as everybody else.

I will not be arguing that taxes should be cut. In my view, we cannot afford to cut taxes since that would necessitate cuts in services. I will not be arguing that social spending should be dramatically increased. This would increase taxes to the point that support for social spending would be eroded.

In my area of expertise, I am concerned with two kinds of social spending. One is the transfer payments received from the provincial government to fund services for people with developmental disabilities. The other is the social assistance received directly by the people in our services. Both have inadequacies.

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In terms of transfer payments, as an agency, we find that these are inadequate to serve all the needs that are presented to us. We are able to meet most needs if we budget and spend funds carefully; if we are allowed to be creative and flexible with funding so that quality of service is maintained or is increased at less cost -- the main problem with this, of course, is legislation. The changes are under way. The way that acts are written prevents flexibility sometimes, and they are working on that; also, if we were enabled to co-operate with other agencies to reduce overlapping. Most notably, special services for labelled people should in general be discontinued. All citizens should be able to access the same services, which would result in a reduction in overhead costs.

These ways of reducing costs allow the extension of service to more people. However, there are still areas of need that cannot be covered.

Social assistance is inadequate to maintain people with dignity in the high-cost areas of the province. In other areas, the situation is somewhat better. However, social assistance tends to support people in their present situation. There is little systematic assistance for getting into the mainstream. One area in particular that should be addressed is the provision of special employment services for all persons with job barriers. Funding directed to this area would gradually reduce the need for social assistance payments for many recipients.

Since social services are not adequately funded at present, taxes should not be cut. I do not believe it is in the ability of any government to reduce bureaucratic and overhead costs substantially, since bureaucracy is a self-perpetuating system. The belief that this can be done is a pipedream.

I wish to urge three avenues related to budgeting which can increase available funding for social services, at least cost to the taxpayer; first, modest tax increases.

The second is a reorganization of funding priorities. This should be done in terms of four considerations: (1) that the needs of the most vulnerable people in our society be given the highest priority; (2) that services which will enhance autonomy and independence and reduce dependence on social assistance be given a high priority; (3) that the co-operation among agencies to reduce overlapping be encouraged. As a corollary to this, generic services should be made available to persons with labels so that fewer services directed to special populations are required; (4) that the service planning be done locally rather than from Queen's Park. Communities have a clearer view of what they require and are better able to co-ordinate planning and delivery of services.

Third, I want to urge that the budget be developed with a long-term plan in mind rather than in reaction to consumer and taxpayer groups' aggressive tactics. The government should have a clear view of its priorities for the province and use the budget as part of its general policy.

Ms M. Ward: Thank you for your presentation. I have a question which is really just for information purposes. I am not familiar with the terms. "Persons with labels," is that referring to specific disabilities, like a hearing disability?

Dr Steel: Yes, any kind of disability basically. Also, "welfare clients" is a label.

Ms M. Ward: You are saying basically that any services should come basically from a generic pool of services and not be targeted.

Dr Steel: Yes. In the past, for instance, services for people with developmental disabilities had to be received from agencies funded just for that purpose. Of course, when they were in institutions they received all the services there and they were not able to access regular hospitals or doctors or speech therapists or neurologists or psychiatrists, and so on. In fact, that is still a problem in some areas. Every time you have a specialized agency for a special group, you incur more cost.

Ms M. Ward: Yes, overlapping of services. What about the income aspect of it, income support?

Dr Steel: You mean in terms of income maintenance?

Ms M. Ward: Yes. There is no problem there then basically?

Dr Steel: What I really want to say in terms of social assistance is that there should be more funds directed to helping people off social assistance, with specialized support programs for employment basically. A lot of people would work if they had the ability to do so. They have often never worked. They do not know how to. They do not know how to apply for a job. They do not know how to keep clean. They do not know how to talk to their co-workers. They do not know how to be on time. They do not know any of these things. But given support -- and I know this can be done because we are doing a pilot project in Stratford -- they can get off welfare and stay off. This is the best way to reduce the rolls, because any other way is just putting more money down the drain.

Ms M. Ward: There would be different levels of support required there, so you would be starting at a different starting point with some of them.

Dr Steel: Yes. Even if people only had a part-time job, they would not be using as much social assistance.

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Mr Phillips: I found on page 2 your point B a very thoughtful direction for us. In your experience, are you finding that is not the current situation? In other words, in your dealing with governments, is there some evidence that perhaps that has not been the priority in the past?

Dr Steel: I think I see some evidence that there are moves in these directions. I would like to encourage that movement. For instance, in terms of long-term care planning, the co-operation between the Ministry of Health and the Ministry of Community and Social Services is beginning to move in this direction, and I would like to encourage it in a lot of other directions too. If communities can plan for themselves and all the community agencies co-operate, I think we will find that costs will be less and that services will be better, in general.

Mr Phillips: In terms of long-term care, because I am quite interested in that myself, my observation has been that the previous government had strategies for change in plans -- I think you are probably quite familiar with it -- and I am not aware that the new government has really come to grips with its plans.

Dr Steel: The consultation is beginning in the fall.

Mr Phillips: But nothing has happened over the last year.

Dr Steel: They are encouraging committees to be set up in various counties. We have one in our county. It is about the same. It is perhaps maybe four months behind. That is about all the time that was lost, I would say, with the change in government. It is continuing the same kind of strategy.

Mr Phillips: Are you generally supportive of the previous strategies for change?

Dr Steel: I am supportive of the direction in terms of the kind of idea that was being proposed. You cannot tell how it is going to work out. Both in the previous strategy and in the new one the intention, as I see it, is that the communities be able to put in enough input that they can make the plan, or the way they do it, flexible to their community. That is a very good direction to go because each community is different. The kind of plan they would end up with in Metropolitan Toronto would be quite different from the one we have in Perth county, for instance.

Mr Phillips: One thing we are quite worried about with this budget is not the spending side -- I mean, it is easy to spend money -- it is on the revenue-generation side, the economic activity side. We are frightened that a year from now when we meet with you -- and I suspect you will take the opportunity to present your thoughts -- the economic activity will not be going on to sustain and support the crucial social services area. I am just wondering, from your experience right now -- because the government feels the economy is turning around and starting to pick up, things are starting to happen, and we should not worry about the economic side of it -- are you beginning to see the economic turnaround in your community?

Dr Steel: Yes, just beginning.

Mr Phillips: People are now starting to get back to work and that sort of thing.

Dr Steel: Unemployment is beginning to decrease in Perth county. Yes, I would say that there is a turnaround there.

Mr Phillips: So the pressure is beginning to come off there.

Dr Steel: Yes.

Mr Phillips: Your operation?

Dr Steel: Of course, it could partly be because this is the tourist season, but I think we see changes in the kind of jobs we can get for our people too, so things are looking up a bit.

Mr Phillips: Well, that is encouraging. If that is what the government is banking on, we will see in a year, I guess.

Dr Steel: I do not know how it will be in other communities.

Mr Stockwell: I think this is, without a doubt, one of the best submissions we have had or I have seen from pre-budget to post-budget. It is clear, concise; it should be required reading for the government members. You have commented on priorities for social services, etc. This priority list of four that you have I think is excellent. It says everything that should be said and, although I do not know if you are going to get any kind of hearing here because I am not so sure we are the ones who could carry the message back as well as you have presented it to us, I think you should be very proud of yourself. In fact this government should hire you, in my opinion. This is one of the best briefs I have seen.

Dr Steel: Thank you.

The Chair: I would like to thank you for making your presentation to this committee. We are a little bit ahead.

We are going to take a 10-minute recess and be back at 2:30 to hear from the London Unemployment Help Centre.

The committee recessed at 1422.

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The Chair: We are resuming the hearings of the standing committee on finance and economic affairs on the budget review.

LONDON UNEMPLOYMENT HELP CENTRE

The Chair: I would like to welcome the London Unemployment Help Centre, Mrs Nancy Brown. You will have a half-hour for your presentation. In that period of half an hour, if you can leave some time at the end for a question and answer period, it will be divided equally among the three parties here. You can start now.

Mrs Brown: My name is Nancy Brown and I am the executive director of the London Unemployment Help Centre. I would like to thank you for the opportunity to speak to this committee and I am also pleased that these public hearings are taking place and that individuals across the province are getting a chance to respond to this budget. However, I am here today representing the clients at our centre and to communicate to you many of the concerns and issues that they face. Therefore although this presentation may be narrow in its focus, I hope it will bring to light some of the very human elements at stake when budgets are being debated.

I will just give you a little bit of background about the centre. We are a community-based, non-profit organization which provides employment and vocational counselling to unemployed and/or underemployed individuals in the London area. We have a very dedicated board of directors and staff who work extremely hard to maintain our underlying philosophy of providing a friendly, safe, caring environment for people who have been displaced from the workforce. I must say, this has been an extremely challenging task in light of the number of people seeking our services.

The centre was started in 1983 in response to the last recession. Although economic conditions improved greatly in the years following that recession, the number of people coming through our doors has steadily increased. Major increases occurred in 1989 and 1990, and this year we expect a 50% increase in the number of new clients served. Most distressing however is not so much the increase in the number of new clients but rather the type of clients seeking our services and the changing needs of these individuals.

Each week we have orientation sessions where clients are invited to come and hear about the services we offer and to share with us a bit about themselves and about the situations they find themselves in. Approximately 30 new clients attend these sessions and become involved in our programs. Their situations vary but often there are similarities in the circumstances surrounding their unemployment. For example, we generally have several immigrant people, a few new immigrants and a few who have recently been laid off after several years in a factory.

We also see many older workers who are having to make major adjustments in their lives. For many of them, their jobs have disappeared permanently due to plant closure and their skills are no longer relevant in today's market. These are hardworking people who never imagined themselves unemployed and who are totally unprepared for it. The same is true for the growing number of middle management and professional clients who find their jobs have been eliminated as companies tighten up during these tough economic times. We also see several women who are attempting to re-enter the workforce after many years because of financial pressures on their families and the need for that extra income.

For most of these people the loss of their jobs or inability to find another job is humiliating and can often be debilitating. Many of these workers are drained of self-respect and extremely frustrated. Many face innumerable barriers to re-employment while others openly admit in this initial orientation session that they have had so many rejections that they have no confidence left. For example, one middle-aged professional man stated just that and said he needed support and help building his self-esteem. Incidentally he attended several of our programs and eventually found a very good job. However, many of our clients are not so fortunate. They may have language problems and/or literacy issues and in many cases lack marketable skills.

Most of the workers we see who have been displaced from the manufacturing industry have to look at upgrading and/or retraining. In addition, they have no knowledge of how to look for work in today's market. For example, a résumé was unheard of 20 or 30 years ago in this industry. As well, the harsh reality for most of these workers is that they will not be able to make the kind of money to which they have been accustomed for most of their lives.

The statistics regarding the number of jobs lost in Ontario is staggering, particularly when you look at the manufacturing jobs that have been lost for ever. This, combined with the major industrial restructuring, is taking its toll on workers. Without sufficient support and protection these workers would be totally crushed. Over and over again clients tell us that they do not know how they would have coped with their situation without the support they received at our centre, and we in turn are grateful to the present government for the additional funding we have received to help these workers adjust.

I will just tell you a little bit about the services that we offer. In 1991-92 we have been able to provide many additional programs and services as well as being able to enrich many of our existing services. Our ongoing services and programs which are funded jointly by the Ministry of Labour, the federal government, municipal government, United Way, union and community donations include individual counselling, which is provided on an ongoing basis to all our new and repeat clients; job readiness training, which is a two-week group program focusing on self-esteem and confidence building; resume workshops -- we have two of them weekly; job search program, which is a one-week program offered twice a month to assist clients with all aspects of their job search; a job finding club, which is a three-week program where workers over 40 conduct their job search from the centre and are assisted with every aspect of it; career planning workshops where individuals are assisted in exploring new career options and examining their transferable skills; vocational testing, which provides personality, interest and aptitude testing to individuals having to choose a new career path, and additional support services, which include a message-taking service and use of equipment and resource materials, and we do have used work boots that clients can come in and claim.

New services we are able to provide this year to the growing number of workers affected by small plant closures in particular include a mobile job search unit which provides a one-week on-site employment adjustment workshop to victims of plant closures; training information and assistance provided to the growing number of workers needing upgrading and/or retraining; an employer bank which assists in the actual placement of our clients; self-employment and small business information and resources which we have available for clients exploring this option; an immigrant counselling program is available to our immigrant clients, and we work one-on-one with these individuals; we have computer training which is available to those clients needing to become computer literate, and finally, vocational testing. We have been able to acquire additional resources so that we can serve the growing number of people needing this service. I have attached for your information more detailed information on all our programs and services, as well as a program and service profile.

In summary, I would like to say that the vital service we have provided to London's unemployed is now more comprehensive and able to meet the varied needs of displaced workers. It is no longer enough to assist these people with writing resumes and conducting an effective job search. Displaced workers today are having to make major adjustments in their lives and need assistance in exploring career options, training opportunities and future employment opportunities, and they are having to do this at a time in their lives when they are expected, or when they themselves expected, to be secure and stable. Thus, the need for support has never been greater and we at the centre are pleased with the initiatives of the present government to protect unemployed people and provide them with vital services needed to help them adjust.

As well, since it often takes much longer for many of our clients to adjust and re-enter the workforce, they are often forced on to social assistance. This is indeed a very devastating experience for these people and we welcome the present efforts to encourage lifelong learning to reform the social assistance system and to provide more affordable housing.

I would like to finish today by sharing with you one of the many letters we receive from our clients, and it is this sort of thing that keeps us going through some very tough times. This is written in the client's words.

"I would like to take a minute, as I move forward into a new job, to give credit to the Unemployment Help Centre, and especially the tireless counsellors.

"My unemployment situation was a little different, in that I had been fired. In spite of the fact that it was a wrongful dismissal, finding new employment appeared to have insurmountable obstacles to overcome.

"The black mood I brought to the program slowly evaporated as Karen and Mary Ann put me to work learning new skills and searching out the job market. No time for self doubt or pity. Letters had to be written, calls made and interview skills sharpened. Work, work, work. How good it felt. My moments of panic were dealt with calmly and professionally.

"With the support of the group, Karen, Mary Ann and my newly acquired skills, I faced my first interview. Within a few days of this interview, I accepted the job.

"Each member of the club will leave stronger and with the skills required to give them the edge as they attempt to find employment at a very difficult time.

"My heartfelt thanks to a great community service and the caring, dedicated professionals who work there."

We hear this sort of thing very often from the clients, and I guess what I would like to say, finally, is that any cuts in services to people who have been affected by this recession would be a great concern to those of us working in the business. Thank you.

Mr Sutherland: It is a pleasure to have you here, Nancy. I just want to first compliment your organization here in London. I think the establishment of unemployment help centres during the last recession was a very good move in terms of those people who help bring the resources together in the communities. In many cases, labour councils were actively involved, and the governments in the past in terms of providing some funding. I was certainly very pleased to be here on behalf of the Minister of Labour to present a cheque to you for additional funding for your organization. I think the skills that you teach people in terms of job search, in terms of résumés, in terms of rebuilding the self-esteem and confidence that many people have lost are extremely important in helping these people get back into the employment sector.

I was just wondering if you could give us a little more sense of where your numbers are right now. You mentioned you have seen major increases in 1989 and 1990. Could you give us some sense as to what you have seen this year in the first six months? Is it starting to slow down, the numbers coming in? What feedback are you getting from the people who have gone through your program in terms of finding employment?

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Mrs Brown: Well, maybe I will start with your last questions first. No, it has not started to slow down. We are busier than ever, and I think probably the effects of this recession are going to be felt a long time by the workers who have been displaced. It is not a matter, as I said, of honing their job-searching skills and finding another job. The jobs are simply not there right now, so the ongoing support is critical during these periods or they will not make it through. There is a lot of training, upgrading, that sort of thing, that is involved in helping these workers to adjust, so it is not a quick process any more. It is a very long process.

As far as numbers, in 1990 we saw 1,207 new clients. That does not include the thousands of repeat clients and people coming through our doors on a daily basis. This year I suspect we will be reaching around 2,000 new clients.

Mr Sutherland: So that is what, an 80% increase?

Mrs Brown: I think that is about 65%.

Mrs Brown: I gave a modest estimate here, but we seem to be seeing about 40 to 50 new clients a week right now, and that is very high for us.

Mr Sutherland: You mentioned skills training, upgrading. Can you give us some sense of how many of the people coming in are in need of basic literacy skills? Is it -- you mentioned immigrant people -- English-as-a-second-language skills, or is it more that they maybe have a grade 12 education but to get out, they need to get into a specific program at one of our colleges or universities? Or have they not really done any true job searches before; they just kind of came out of school and went in?

Mrs Brown: Well, a lot of the people we see, and the majority of them who come from plant closures, are people who had dropped out of school early, so they have to upgrade. Sometimes they only have grade 3 or grade 5. They are lucky if they have a grade 8 level, so they are having to upgrade to about grade 10 so they can get into training programs.

Now, we work in conjunction with the Wheable Centre for Adult Education to offer upgrading in math and English, and then we also offer night classes in English as a second language for the immigrant clients who have been displaced. We also see a lot of people whose skills are just not marketable any more. That again is very true of the people who have been displaced from the workforce, and sometimes it is not restricted to the manufacturing industry. There are a lot of other areas where people are no longer able to find work.

Mr Sutherland: Do they have to be pushed a great deal to go back to Wheable or things like that, or is there a great willingness?

Mrs Brown: They need encouragement, for sure. They need a lot of support and encouragement. They are frightened to death, because it is one thing to lose your job and go through all that emotional upheaval. It is quite another to start thinking of starting all over. So we cut it into little chunks, one piece at a time. Let's accomplish this and move on from here.

Mrs Sullivan: Can you give me some idea of your total budget for your operations?

Mrs Brown: This year it is just slightly under $750,000.

Mrs Sullivan: And how much of that do you receive from the ministries of Health, Comsoc and Labour?

Mrs Brown: I am sorry, I do not have those exact figures with me. We have wage subsidies through Comsoc and --

Mrs Sullivan: For your employees?

Mrs Brown: We have two employees who are on a wage subsidy; that is the only funding that we receive through Comsoc. The Ministry of Health is just starting to fund a program, and I have included a brochure in your package. That will start in September and run for nine months. This is the first time we have had funding there.

Mrs Sullivan: Do you know how much you receive from that ministry?

Mrs Brown: From that ministry, it is $26,000.

Mrs Sullivan: And from Labour?

Mrs Brown: This year 58% of our total budget is funded through the Ministry of Labour. Now, $200,000 of that funding was a grant to assist victims of small plant closures and that is why we have been able to add all these additional services.

Mrs Sullivan: Okay. When a business in this area is either downsizing or closing, would the company itself come to you to seek assistance in any kind of severance or close-down program, outplacement program, that it would be instituting? Or would they go to private sector operations that provide similar services?

Mrs Brown: That depends. We do not get involved in the severance part of it.

Mrs Sullivan: I am sorry, I should not have said severance.

Mrs Brown: As far as the counselling part of it, some companies come directly to us, or the unions may contact us, or sometimes we hear through the Ministry of Labour.

Mrs Sullivan: How frequently would a company come to you?

Mrs Brown: Since we received this additional funding, we have done one plant closure and that was the Florsheim closure.

Mrs Sullivan: And how many employees were involved with that?

Mrs Brown: Forty-three employees were involved in that one. So it is just under the 50 mark.

Mrs Sullivan: One of the things that is of great concern to us is that the Treasurer, in his budget, is predicting that the unemployment rate indeed will not go down over the next budget year and in fact the youth unemployment rates, which are extremely high now, are going to continue to remain at those levels, if not increase. I notice in your brochure that you only serve people who are over 24. Could you tell us why you do not deal with unemployed youth in any way and how those people are served?

Mrs Brown: We do not deal with youth because there is a Youth Opportunities Unlimited centre here which is mandated to deal with the people under 25. We are in the same building, so it is very convenient. If a younger client comes into our centre, we can refer him right downstairs and vice versa. So basically that is the reason why. We are allowed to go up to about 10% of our case load under 25, and most of that is in advocacy.

Mr Stockwell: Thank you. I guess I want to get a broader picture with respect to funding of your kind of programs rather than dealing with the specifics. You say you started in 1983.

Mrs Brown: Right.

Mr Stockwell: That was just basically after the last recession we went through. You started with, I suppose, a budget of X -- I do not know what it was. Were you there in 1983?

Mrs Brown: Neither do I. No.

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Mr Stockwell: My difficulty with the unemployment help centres and so on, speaking specifically about Etobicoke, which is the city I represent, is that it seems to me during those years of prosperous times in the province when the unemployment rate was at a very favourable number, considerably less than it is today, they consistently came back for more and more money, saying, "We've got a need to service," etc. I am speaking from a taxation point of view. They were seeking increases year after year, and the economy could not have been better. In fact, I think we were ranked first or second in the world in some cases in this province. Unemployment was low, etc. Now, obviously, the economy has gotten worse. We are in a recession and people such as yourself -- and I applaud your efforts, but you come back and say, "Gee, we need more money; there is a terrible recession." When is it exactly that there would be some rationalizing of programs and services? Do you foresee this ever taking place, or are we in a circle that it matters not whether it is a good economy, bad economy, lots of unemployment, no unemployment, we are looking at increasing year after year and hitting the taxpayer up year after year?

Mrs Brown: If I can respond to that, the kinds of numbers that we are seeing now are much higher than we would normally see.

Mr Stockwell: Oh, I do not debate that.

Mrs Brown: We may see a 20% or 25% increase each year. As far as the ongoing need for the centre is concerned, it is not something that any of us hope would continue, but the reality is that there is also a restructuring going on in the economy and people are falling through the cracks and someone has to be there to catch them.

Mr Stockwell: I guess the question, though, stands. Although I understand your answer, I do not know if it dealt with the question. Maybe to put it a little more succinctly, say the government is correct and next year we spun out of this recession and we are on our way to Shangri-La with Bobby Rae and the socialists and unemployment goes down. Would you see yourself having a reduced budget? Would you see yourself coming to the province saying: "Gee, life is great. There are much fewer people unemployed. We are not servicing as many people. Why don't you keep $200,000 or $300,000?"

Mrs Brown: The grant that I spoke of, the $200,000, was for one year and it is not something that I expect to be renewed. Now, if the need is still very strong, if we cannot cope with the numbers, I would hope there would be additional funding so we can help these people, but our understanding at the centre is this is one-year funding.

Mr Stockwell: Okay, so next year you will not get the $200,000.

Mrs Brown: We do have a base funding. All of the help centres in Ontario have a base funding of $100,000.

Mr Stockwell: Which increases percentagewise every year.

Mrs Brown: This is the first time it increased, this year. It has not increased in many years.

Mr Stockwell: So what was your increase last year?

Mrs Brown: We did not have an increase last year. We were at $90,000 for two or three years.

Mr Stockwell: Yes, but you are at $750,000 now. You went from $90,000 last year to $750,000 this year?

Mrs Brown: There was an additional $230,000 this year from the provincial government, the Ministry of Labour, but we have also received funding this year from the Ontario Trillium Foundation and from a lot of other places.

Mr Stockwell: Government money?

Mrs Brown: Some of it federal. We run a job-finding club.

Mr Stockwell: Rather than simply debating splitting it out, what I am looking at is the total ball, and every year it seems that the total ball goes up percentagewise, whether it be good year or bad year. The question I am asking very bluntly is, in recession periods in the private sector, companies rationalize, they downsize, they cutback. Clearly, in the industry you are in, if it is a recession time, you would expand and try and take up the slack that the private sector is obviously cutting off. When we get back into good times in the mid 1990s, is there any idea or just any thought of yours that you would see a reduction in the services that you offer?

Mrs Brown: I would hope so.

Mr Stockwell: Good. Thanks.

REGISTERED NURSES' ASSOCIATION OF ONTARIO

The Chair: Could we have the Registered Nurses' Association of Ontario?

Is Dr Pedersen in the room?

Dr Pedersen: Yes.

The Chair: Okay. We are going to be about five minutes late on your presentation. It seems there was a mistake on the scheduling. The date they had was for today when we had them on yesterday's schedule, so we are trying to fit the nurses' group in.

You could take 10 minutes and make your presentation. I am sorry you were inconvenienced. Identify yourself for the purposes of Hansard, and welcome to the committee.

Ms McKellar: My name is Laurie McKellar and this is Anne Martin. We are both registered nurses and members of the Registered Nurses' Association of Ontario. RNAO is a voluntary professional organization whose mission it is to promote the health and wellbeing of the people of Ontario.

Partnership and wellbeing are two RNAO core values that provide a firm foundation from which RNAO can help create an efficient and effective mode of health care delivery in Ontario. Partnership among nurses, other health care providers and consumers or patients will facilitate collaborative communication and high standards of health care delivery. Wellbeing for the public will be attained not only by care during illness but also through health promotion.

RNAO's vision, mission and values have guided our assessment and evaluation of the NDP's recent provincial budget. I will present RNAO's position on the provincial budget in relation to the following issues: health care reform and pay equity.

RNAO is very cognizant of the deficit and the fact that the government has had to balance funding to various sectors of society. Although fiscal prudence and restraint by government is responsible, essential and necessary, RNAO believes that the health of Ontarians today and in the future can be assured if there is adequate government funding into the health system.

RNAO asserts that adequate housing, nutrition and income, clean air, soil and water and the ability to have control over one's life have more impact on health than does the sickness care system. These factors must be remembered during the development of new health care programs. The impact of these socioeconomic factors on health will no doubt be assessed by the new Premier's Council on Health, Wellbeing and Social Justice.

RNAO's partnership value provides the means by which innovative ideas to promote cost-effective methods of health care delivery can be explored. We must all work together to find the most efficient, cost-effective and compassionate way to deliver optimal health care with the funds available.

Unfortunately, recent amendments to the Canada Health Act by the federal government have resulted in a decrease in transfer payments to the province for health care. This federal cutback undermines and threatens the principles and values inherent in the Canada Health Act; namely, universality, accessibility, portability, comprehensiveness and public administration. The federal government is backing out on its commitment to health care. RNAO recently reaffirmed its commitment to these principles and will support the province's efforts to ensure their survival in the Canada Health Act and provincial legislation.

Reduction in federal transfer payments has increased health care expenditure for Ontario in the budget. RNAO supports the NDP's decision to supply funds to maintain our current health care programs. However, RNAO also strongly supports this government's intent to bring health care expenditures under control and to review, reallocate and redesign health care programs.

Society can no longer just talk about health care reforms; we must act. This government must facilitate the development of a health care program that is fiscally responsible, effective and efficient in meeting the health care needs of Ontarians.

RNAO's position on health care reform is based on rational, compassionate allocation of financial and human resources. RNAO advocates for development of systems with objective criteria to assess, monitor and control costs of acute care; expansion of multidisciplinary community and home support systems; improved utilization of nurses and other health care professionals as the point of entry into the health care system for assessment, care and referral; involvement of nurses, other providers and consumers in decision-making about resource allocation, policy and program development, and elimination of user fees, premiums and fee for service.

The government's recent agreement with the Ontario Medical Association to manage physician fee and utilization issues is an important step in cost control. However, RNAO urges the government to ensure that consumers and other health care providers be equally involved in health care management and in the decision-making process during all health care reforms.

RNAO firmly believes that health policy must be client-centred, taking into account that the socioeconomic determinants of health are fundamental elements and that health care delivery must be effective, cost-effective and accessible.

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Each community needs to determine what social and health services it requires. By assessing its own socioeconomic determinants of health, the community can allocate financial and human resources into the most appropriate areas. Health consumers have to be given the knowledge, resources and opportunities to manage their own health and the community's health. By being involved in the decision-making about health care policies and programs, consumers may feel more personal responsibility to maintain and improve their own health to the best of their ability.

During the process of health care reforms, community-based health care needs to receive more attention than it has in the past. Although acute care and institutional care are important levels of health care delivery in the health care continuum, community-based health care is also essential to the wellbeing of society.

RNAO has long been an advocate for a health care policy supportive of illness prevention and health promotion. By focusing more on community-based health care, the government will ensure that consumers have the resources, support and education to maintain and to attain their optimal level of health and stay in their homes for as long as possible. This will ultimately decrease admissions into acute care and institutional settings. Therefore more expensive health care interventions will be avoided.

The government's plan to continue with the redirection of long-term care services to a community-based delivery of services will enable people to remain in their homes. Focusing on community-based health care with different levels of care delivery is fiscally responsible, and the RNAO supports the government's efforts.

A shift to more community-based care has implications for the nursing profession. There would likely be a shift of nurses from hospitals to community agencies. This would affect human resource planning in each area. Educational programs would have to increase the amount and depth of community-based health care courses. The nursing profession must adapt to these health care reforms, not only to ensure a more fiscally responsible and effective health care delivery system but also to ensure optimal health of the client and the community.

Pertaining to pay equity, RNAO supports money allocated in the budget to assist transfer agencies to meet this year's costs of operationalizing pay equity for their women workers. We also support this government's initiative to extend pay equity to benefit 420,000 women working in jobs that previously did not qualify for increases under the pay equity law. These initiatives are laudable. However, RNAO believes all women in Ontario have a right to pay equity. Also, non-union women are still using their own personal resources to pursue their rights under the Pay Equity Act. RNAO strongly supports amendments to the Pay Equity Act so that all Ontario women will benefit and non-union women will be provided with the necessary financial resources.

In conclusion, RNAO recommends that fiscal resources be controlled by regional health bodies in the context of community needs assessment and human resource planning. The public, providers and government should collaborate to decide on health care needs and delivery systems. Local services must be co-ordinated so that adequate numbers of practitioners with different levels of educational preparation can provide the appropriate level of care to clients. Health care has to be client-centred and has to have a more community-based focus. RNAO believes that the economic viability of Ontario's current health system depends on health care reforms and major changes in the representation of health professionals on all health care decision-making bodies.

Mental and physical health are vital resources that enable society to function and to survive. Without health, people work less productively or not at all. Not only does this reduce the economic base that supports society, it also increases the economic burden on society. For society, poor health becomes like the double-edged sword. We must all collaborate to deliver optimal health care in a fiscally responsible way. Health is not a renewable resource.

The Chair: We will file your report. It is in Hansard, and your comments will be presented before the government.

UNIVERSITY OF WESTERN ONTARIO

The Chair: Dr Pedersen, welcome to the standing committee on finance and economic affairs.

Dr Pedersen: I am here today to speak on behalf of the University of Western Ontario. It is a pleasure to have with me Dr Donald Jameson, who does a whole variety of things for us and does them all well. He works in our office of institutional planning and budget, so in some cases he will be more aware than I of some of the issues in detail.

I have a submission to leave with you. I am not sure whether you want that distributed now or later. I do have a short statement I would like to read and then I would be pleased to try to respond to any questions you might have.

Like every other interest group, the universities come before this committee to argue for a larger share of severely limited funding. The main difference, and quite frankly a major problem for us, is that the interest we represent is the province's and the nation's future, not an immediate and visible social ill with conspicuous sufferers and emotional arguments based on social justice or human compassion. We have seen as recently as last week in Canada's national newspaper a front-page story saying that such people as yourselves, those in government and even within ministries which control our activities, view universities as élitist institutions, arrogant and irresponsible consumers of public wealth and poorly managed bastions of privilege. I want you to know I am here today to tell you that is not the case.

Here in Ontario and earlier in British Columbia I have been a university president for over 12 years. I am the immediate past chairman of the Council of Ontario Universities and will retire this fall as chairman of the Association of Universities and Colleges of Canada.

I believe in education, I work very hard in support of its values and I spend a lot of my time raising public consciousness and whatever money I can for what I consider its essential activities. I do not believe that either the concern or the resources which are directed towards higher education in Ontario are being squandered or misplaced. On the contrary, I feel strongly that in neither area have we as a province invested nearly enough.

The people of Ontario and their elected representatives must come to realize that the economic, social and personal vitality which we all seek for the coming years will depend entirely on our own abilities to extend the frontiers of science and technology and to confront the challenges of environmental, political and cultural change.

The groundwork for a successful future is being laid in the universities today. We at Western and in all Ontario universities feel this responsibility and we accept it, but the resources we have to bring to such a challenge are constantly diminishing. We need the province's and the people's increased support.

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Beginning this year, my university, Western, will be cutting its budget in ways which will severely affect the services we can provide to our faculty, staff and students. Over the course of the next three fiscal years, all operating units of the university will be required to reduce their expenditures by 10%. Within the academic faculties, this will mean larger classes, reduced course selection for students and, in many cases, the phasing out of essay requirements. In areas of support services, the cuts will affect library and computing resources, laboratory facilities, faculty research and many student opportunities for a full and vigorous educational experience at Western.

Our budgetary reduction is an attempt to protect and safeguard the quality of our university as much as is possible, but it certainly shows as well that our financial situation is desperate. We are not wasting public money. We are so pressed to support our essential educational mission that we are being forced essentially to redefine that mission and rescale to fit our resources. As both York University and the University of Toronto have told you, we have all done more, indeed a lot more, with a lot less. While succeeding governments' commitment and support have been essential, and we acknowledge this, we are now at the crisis point where quality may no longer be possible to sustain at a level appropriate to Ontario's vision of the future.

What do I come here to propose? Last December the Council of Ontario Universities put forward a recovery plan for Ontario's universities involving joint participation by government, through increased operating grants, and students, through the staged introduction of a supplementary tuition fee. Implementation of this proposal, which was endorsed by the province's universities and a number of student body groups, would restore support levels to those of slightly over a decade ago.

The recovery plan was a co-operative proposal and is, I still believe, a responsible solution to the financial dilemma Western shares with the province's other universities. It remains my belief that we can restore and advance the quality of secondary education in Ontario only through a partnership of government, students and the universities themselves.

For your part, this means vigorous and active support of increased university funding by the provincial government. In the face of federal recalcitrance regarding transfer payments, Ontario must continue to show the fortitude and sense of purpose to sustain the quality of university education.

For students, the direct beneficiaries of a university experience, there is the need to participate more fully in the cost of their education. Of course, any increase in student fees would be correlated with enhancement of aid provisions, guaranteeing that accessibility would in no way be compromised.

As for the universities, a restoration of appropriate funding would enable them to fulfil their mandated mission. A prolonged period of fiscal restraint has, I believe, pruned institutional operations to below a minimum acceptable level. We have major problems in overcrowding, obsolete -- and I really mean obsolete -- equipment and deteriorating facilities. All of these must be addressed.

Our universities are effective educational institutions. They should -- indeed must -- be allowed to develop and extend themselves. In many important ways, the future livelihood of this province depends upon this.

I will conclude by pointing out a few things that universities do in support of the other claims you are likely to have heard by now.

I expect strong representations have been made from the province's health care community for increases, or at least maintenance, in levels of support for hospitals, medical facilities and clinics. You have probably heard from social service agencies which require additional resources to support their work with the poor and the disadvantaged at both the community and provincial levels. You have very likely heard from the groups representing these people themselves.

The province's primary and secondary education systems are a great concern to all of us, and I am sure that both teachers' groups and school boards have made their feelings known to you. I would add my voice to theirs. A recent federal discussion paper noted that about as many young people drop out of high school as graduate from university in Canada, about 100,000 every year. This is clearly unacceptable for a country which sees itself as a leader in the next century.

How are the universities involved? We are the primary producers of the highly trained and educated professionals who provide the essential services in all these areas. University degree and diploma-granting programs in the health sciences, care giving and counselling disciplines provide a core of dedicated people who are knowledgeable in ways of coping with vital areas of immediate human and social need.

The teachers who must kindle the enthusiasm of Canada's young people and stimulate their commitment to knowledge are in our universities today. Our faculties of education are developing this essential national resource now and on a continuing basis.

Finally, as I am sure we all know, technological advancements will shape the texture of life in the next century, as they have changed the way we live today. Almost all the pure research and much applied research and development activity takes place in Canadian universities. Students who are now in the classrooms and laboratories of our faculties of science, engineering and medicine, for example, will determine the quality of economic and social life for coming generations of Canadians.

In every aspect of Canadian life the foundation for our national future is intimately involved with the activities of the universities. Our competitiveness and our productivity, key concepts in government thinking these days, will come directly from a basic commitment to developing the country's human resources.

This obviously means providing the professional levels of training in science and technology which will ensure Canada's partnership in a continuing knowledge revolution. But it also means, and I want to emphasize, developing the habits of mind which produce well-rounded, creative, resourceful and thoughtful citizens. In order to realize these high ideals, we need not only to recognize their importance but to support their achievement. By investing in universities, we invest directly in the future of Ontario and of Canada.

I want to thank you for this opportunity to speak to you this afternoon and I obviously will be pleased to try to answer any questions you might have. In the material that was given out to you, the words I just presented are included. As well, there are appendices. One talks about some concrete examples of what sorts of cutbacks are actually taking place in one university. The second is a brief outline of the COU recovery plan that was put forward. As well, there is a little brochure which we put together just to give you some idea of what some of the major problems are that are being encountered by the universities in this province.

The first graph is one example. Here we sit in what is reportedly the wealthiest province in Canada. We have managed to rank either 9th or 10th in support of our university system for at least the last 14 years. I for one am absolutely amazed. I am astounded that we are continuing to be prepared to tolerate that.

As a final comment, I will just give you some comparative data. COU just made a comparison of the 10 largest universities in Ontario, those with doctoral programs, with the 11 most populous states in the United States, over half the population of the US. If you just compare public institutions to public institutions, if we were in the US we would get $4,400 more per student per year. If you put their privates in, we would get $6,500 more per student per year. Maybe that is not a meaningful number.

Let me give you some percentage comparisons. On a per student basis, if we were in Michigan we would get 57% more per year. If we were in Pennsylvania we would get 74% more per year. If we were in California we would get 115% more per year. Folks, I am telling you, we cannot compete on the basis of the support we are getting now. It is not going to be possible and I do not give a damn how you want to cut it. It is not going to be possible to do that.

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Mrs Cunningham: Some days it is hard to keep asking the same questions. But I think you summed it up very well. The themes of this particular meeting, as we hear from the presenters, have been twofold. On one side, it is a great budget and they support the deficit because that is the way they think we should go, and it really is not that much because we are only spending 13 cents of our dollar on the debt and the feds are spending 37 cents or something. On the other side, we have to balance our budget.

I am certainly being accused in my party of saying we have to cut out services to universities and social services and health care. It is not what I would do. I would start with the chauffeur of the chairman of TVOntario and his $59,000 position and just start cutting there.

But you have been around a little bit, Dr Pedersen, in your travels around the world and certainly in western Canada and in Ontario. If you had to start doing some prioritizing -- I know that is not your job, but you must have seen some things over a very long career, and maybe it is not a fair question -- but what kind of advice can you give us?

Dr Pedersen: If I had an answer to that, I would not be doing what I have been doing. I would be running my own consulting business and undoubtedly doing considerably better than I do currently. It is an extremely difficult kind of question and obviously one that none of us has been able to find very good answers to. I think in the end we are going to have to make some judgements about what levels of service we are going to provide in these various sectors. I do not see any way out of that. The truth of the matter is, each of those areas has the capacity to absorb as many dollars as you are prepared to put into it.

Taking health care as an example, I think there have been some astounding advances made in the quality of service we are able to provide to people. The tough kind of question that eventually people like yourselves are going to have to answer is, you know, how many open-heart patients over age 85 are you going to be able to provide that service to? That is the kind of tough question that somewhere down the line we are all going to have to agree on.

I am immensely sympathetic with those of you in the political world. Those are really tough areas, and there is nothing tougher than the health sciences. In the final analysis, all of us want to be healthy and all of us want to live longer. That is a fact of life. So politically it is a tough area in which to start trying to make some finite judgements. But I would have to say, Mrs Cunningham, that is the kind of thing we are going to have to do in all areas.

The problem I have with universities and colleges is that it tends not to be a high priority item with most politicians. For one thing, it does not have a lot of political payoff. The results are long-term and not short-term. You know, if the post-secondary system gets a few less dollars this year than it got last year in relative terms, nobody is going to die. You are not going to push a bunch of patients out into the hall and say these are cancer patients that are not getting treatment and they will not live for six months or whatever. I understand all that. I appreciate the political dimension of it.

My argument, however, is that if we do not provide the quality of educational system -- and I include elementary and secondary in that when I talk about it -- that will provide us with the human resources that are needed, we are not going to be able to support all those other services. You are not going to have the economy that will allow you to provide high-quality medical services; you are not going to have the economy that will provide the needed help for the unemployed and the poor and all the rest of it. So I guess I am making a pitch that says you are going to have to give much higher priority to the educational system than you are giving at the present time.

I guess we must not do a very good job of convincing people. I come here and obviously have a major vested interest in the case I am trying to make, and that is the way in which I would be perceived. What we have difficulty in making understood is that the rate of return on investment in human resources is at least as high as it is in any other aspect of the economy, if not higher. So many of our other social and economic and indeed political activities are related to our capacity to have the well-educated people that are needed to make that work.

You just have to go take a look at what a country like Japan is doing, or Thailand or Korea or Taiwan or the European Community. The European Community now allows you as a student to go into an exchange program in your third year in any one of the universities that are members of the council of European rectors. That is almost 400 universities. You will be subsidized to do that. Why are they doing that? Because they know that the future success of the EC is dependent on the quality of people that they are going to have -- educated people, people who understand how the whole EC operates, who understand other languages, who understand other cultures.

We are not doing any of those kinds of things in this country. What worries me is that we are getting further and further behind all the time. Those statistics I cited you for the US would have been very different 15 years ago. We would have been very comparable.

Mr Sutherland: Thank you, Dr Pedersen, for being here today. I just wanted to say with regard to the report that came out last week, I have never considered myself to be an élitist person. I do not think Mr Winninger considers himself to be one. I do think the universities, and particularly Western, have made a great stride in the last few years to open up and be innovative in pay equity and employment equity. Western should be commended for that. I think some of those perceptions are certainly dated, just from my time at the university.

I think you have made a very eloquent case for improved funding. We know it started in the late 1970s. I give credit to the previous government for trying to catch up. They made some very good strides, I think, particularly on the capital side. We are finally seeing some new buildings and new resources, but we also know that operating funds are a major problem. It is great to have the new buildings, but if you have not got the staff and the equipment to put in there, it is not going to help.

On your key point, I think we are going to have to put more focus on our economic viability for the future, being truly competitive in an international economy. I was really glad to see that you said not only in the sciences -- they are important because we are lacking -- but in terms of being well-rounded individuals.

You mentioned in your presentation that you would be expecting 10% cuts in all the academic units for the next three years if you had not received, I believe, a 7% increase this year. Can you give us some indication as to what that decrease would have been on those different units?

Dr Pedersen: How much larger would it have been?

Mr Sutherland: Yes.

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Dr Pedersen: I do not know that number just off the top of my head. But obviously there would have just been that much more that we would have had to eliminate. Part of the difficulty for us, in addition to dealing with just the straight matter of having so much in the way of shortfall, is that the way that typically gets met defeats some of the overall social purposes the current government and society in general are trying to achieve.

You can imagine who is going to be let go when we start reducing our payrolls -- and that is almost where all our money is. In a university you have almost 85% tied up in salaries. So, who starts to go? Part-time lecturers and a whole variety of people who do not have regular tenure-track positions, and last people on, all the rest of it. Who are those? They are typically young women who have not been able to get new positions in universities because the funding has been going down like this for the last 13, 15 years, whatever it is. So you continue to sort of marginalize some of the kinds of things that you are trying to do.

Mr Sutherland: I guess you are saying then there is a direct link in funding to destroying the perception that was presented last week in that report.

Dr Pedersen: Right.

Mrs Sullivan: Thank you very much, Dr Pedersen. I was quite taken, as I am sure was everybody involved in administration at university campuses, with the report done for Dr Smith that talked about élitism or the perception of élitism of universities. I suppose that in thinking about that report one of the things that came to my mind was, what is wrong with being élitist if you are a university? Indeed, if your standards are of academic excellence and if your pursuits are scholarly pursuits of learning and research, what is wrong with being élitist?

The other side of that, however, becomes the question of the perception of the bureaucracy and certainly of politicians as well, which was made clear in that study. The demands being made by the university community -- which have been well put this year, it seems to me -- involving students and academics, as well as administrators and faculty, have been portrayed simplistically. They appear to be a minimal demand for one year, but indeed become a very long-term and heavy additional demand to the base of the provincial budget. I wonder if you would comment on that kind of a response, which I think people have felt as a result of the universities' presentation.

Dr Pedersen: Let me comment a little bit on the use of the terms "élitist" and "élitism." I do not think it needs a lot of profound thought to recognize that, by definition, the way in which people elect to go to university produces a form of élitism. I have never had a problem with that. Universities are élite organizations. They have always been élite organizations; indeed, as far as I can tell, will always be élite organizations. I do not find anything unusual about that.

What is critical is what is the basis for the élitism. Seventy-five years ago in Canada, the basis for university élitism probably had to do a great deal with your social background. It still does incidentally, but it is much modified today. There was a time when universities were indeed the sanctuaries for the wealthy. They were the ones who probably came from home environments where there was some appreciation for university education. They certainly were coming from a setting where the resources were available in order to go.

I do not have a problem with the use of the term élitism, provided that the criteria one uses are the appropriate ones and that you have a system of financial aid that will not preclude anyone from attending university for reasons of financial inadequacy. That, for me, is the critical part of it.

The question of how you fund universities is perplexing. We have a unique problem in Canada, given the nature of the federalist system. I do not know of any western developed democracy that does not use its educational system as a major vehicle for public policy, but because we have assigned education to the provinces, we continue to have this ongoing debate between the federal government and the provinces as to whether the federal government has any role at all. It is unfortunate that the system is not able to integrate better. West Germany, as it was prior to unification, had a similar system but managed to find a role for the federal government, as opposed to the lender. We have never been able to work that out in this country and I think we lose a lot of opportunities as a result of it.

To go to the funding side, I personally believe -- and my own institution has said this and it is not a totally popular point of view, probably will not be totally popular with all members of this committee -- that students themselves should be making a larger investment in their own education. If you look at what I said earlier, it is not hard to find justification for that. The rate of return to investment in university education is quite high. It is very high in some areas; in some, it is surprisingly not as high as you would think. For example, in medicine and dentistry it is not as high a rate of return as you would think, assuming that you weigh into the formula the opportunity costs, the income foregone in the time it takes to become one of those professionals. But overall, in terms of straight lifetime income streams, the rate of return to university education is quite high. All of us who have gone to university have typically benefited from that in one way or another and so I do not personally have a problem with saying that students should contribute more than they contribute at the present time. The big hooker in it is the one I talked about earlier. You have to ensure that you have the means of providing assistance to needy students in order that they are not precluded for financial reasons. That deserves some serious consideration.

ANGLICAN CHURCH OF CANADA, DIOCESE OF HURON

The Chair: The Middlesex Federation of Agriculture is not here as yet, so we are going to move on to the church and society division, the Diocese of Huron of the Anglican Church, Rev Stephen Harnadek, chair. Welcome to the standing committee on finance and economic affairs.

You have one half-hour for your presentation and, if you can, leave some time at the end of your presentation to give the committee an opportunity to ask questions on your presentation, which will be split up equally among the three parties.

Father Harnadek: That is double the time I was told I would have, so that is just great.

The Chair: Let me take a look; maybe I am wrong. They had 4 o'clock. Maybe it is 15 minutes. It is a 15-minute presentation, I am sorry. They did not have anything after that, so I was just guessing.

Father Harnadek: I have the pleasure of addressing you as the divisional co-ordinator of the church and society division of the Anglican Diocese of Huron, centred here in London. It is a division which consists of committees representing rural concerns, the environment, peace and disarmament, AIDS and refugee concerns, to name but a few. I bring the thoughts, concerns and dreams for the future of some of these committees regarding the recent budget of the Ontario government and the direction in which it seems to indicate we are heading.

The SARC report: "This recession is over," some who may not count the large number of unemployed as their clientele tell us. The number of jobs lost in this recession seems to be about double that of the 1981-82 recession. Because the effects of this recession are still with us, we on the church and society division of our diocese have taken an interest in the Social Assistance Review Committee report since it was issued in 1988 and lauded by the government of the day. Although some initial changes were made in 1989, we have been waiting for the changes that the Back on Track report of the advisory group on new social assistance legislation recommends.

Although social assistance costs have doubled in the past two years, we see the adoption of the SARC report as absolutely essential to lessen the effect in this province of the erosion of this country's social safety net which we feel has been taking place for the last number of years. The food banks that our diocese has helped start, sometimes with other religious communities, in London, Stratford, Kitchener-Waterloo, among others, are now seeing as recipients of aid people who just a few years ago were donors to these institutions. What scares us is the increasing number of children now relying on social assistance. Some reports say that 40% of those who rely on assistance are children. We believe the time has come for the government, with the full support of all the members of the Legislature, to follow through with the adoption of the SARC report and Back on Track report. Now is not the time to cut back or renege on our commitments to the poor, we feel.

We urge all elected representatives to put aside any political animosity that might exist and work together to achieve the goals in these reports. The people this will help are sometimes the people some find easy to forget. Let's face it. They are not likely to own machines to fax in their concerns to governments. Children only know that they are hungry.

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Family violence: It is our concern that in a weak economy stress increases in homes and that violence against spouses and children may result. These are stressful times for many Ontarians and Canadians in general. Increasing taxation, the goods and services tax, the recession have either in reality or in people's perceptions caused great upheaval in the homes of many citizens. We are concerned about the potential for increasing violence as our provincial economy works its way out of recession.

We therefore laud this government in its proposal to commit $12 million for new beds and enhanced services in emergency shelters for the victims of domestic violence. We have seen some of this violence in our geographic area. As a result our diocese, through the bishop's social action fund provides seed money for churches, ecumenical groups and other groups in setting up such shelters, among other projects. These shelters have been built in many centres but need the continued partnership of government. To expect non-government organizations to do this work increasingly on their own -- a fear of nongovernmental organizations if government cutbacks are encouraged -- would, we feel, be unfair and unrealistic.

We believe, therefore, that the $12 million announced in the budget only really begins to answer this need for more emergency shelters. We hope that you will continue to give real priority to the voiceless, frightened people who live with violence in their homes. They sometimes are too scared even to ask for help, or where to find it if they do want to ask.

AIDS: The AIDS committee of our diocese, with its ecumenical and other NGO contacts such as the AIDS committee of London, reports the need for more counselling and support services for persons with AIDS, those who are HIV positive or their friends and family members. There may be some reluctance on the part of government to provide programs of support for AIDS sufferers because of the notion that AIDS is a gay disease. There are members of our society, sadly, who would oppose increased funding for AIDS research and support systems for those with AIDS because of this notion. We hope that all MPPs will do their utmost to help our society see these people with AIDS as in need of the same support as other people with terminal illnesses.

The environment: We live in a society that wants easy solutions to tricky problems. In pain?. Take a pill. Depressed? This is my favourite: Go shopping or to a restaurant. We do not deal well with problems but rather tend to look for stopgap solutions instead of painful introspection and the changes that might be required of our lifestyle for a healthy, sustainable life. The same, sadly, seems to be true of the environment. In the election of 1990, we heard much about environmental concerns from the NDP when it was the opposition. This was heartening to many.

There is one concern which I have been asked to raise here today. It regards nuclear energy. Nuclear power has often been proclaimed as a safe, inexpensive source of electricity. Chernobyl, Three Mile Island, not to mention our own Darlington plant, to name but a few, show us some of the risks in nuclear power. We are concerned about the real dangers to those who work in and live near nuclear power plants and the potential dangers to the environment as a whole.

We urge the government to be vigilant in safeguarding the public. We also urge the Legislature to help our society focus on the need for conservation, lifestyle changes and other difficult but possibly safer solutions to lessen our need for more and more energy.

Equity for aboriginal peoples: Justice for our first nations has been a concern of our division and especially the peace and disarmament committee. We congratulate this government in doing more than just talking about just land claims and equity for our aboriginal peoples.

We are concerned about increasing reports that alcoholism, violence towards others and violence towards oneself is higher among the people of our first nations than in society as a whole. It is our belief that these actions may be reactions against the extreme poverty, unemployment and lack of land control, among other reasons, in these communities. Members of first nations have addressed our annual diocesan synod and said as much. The scenes we saw last summer at Oka, among other communities, seem to indicate the frustration our first nations feel towards a seeming lack of progress in settling their claims and meeting their just needs. We are glad that this government has not forgotten our aboriginal peoples. The fact that some of these people live without adequate sewage systems, housing and electrical power we hope will soon be a fact of the past.

We urge this government to continue to work with other governments and the representative associations of our first nations in wasting no time in reaching just land claims and other claims where these are still outstanding with the first nation communities of this province. Let us no longer assume we know what is best for them. Justice for our first nations peoples must begin with dignity, respect and a recognition of their rights.

Rural communities: Dignity is something which some say is also in short supply in many of the rural communities of our province. I quote a short paragraph from a report by the University of Guelph's sustainable rural communities committee:

"Rural communities are in a crisis. Battered by economic, social and environmental forces, they are living through a decline in their ability to support the strong agricultural, mining, fishing and forestry enterprises which, in turn, support the communities."

Many of the causes of despair that some rural communities feel are beyond this government's control, whether that be the removal of Via Rail service, the closure of rural post offices or the shutdown of some local CBC news services, etc. In spite of this fact, we do appreciate the beginning attempts made by the Legislature to counter some of the effects of these reductions in services.

Many farmers at a recent gathering reported to me that they have been in recession since the last recession of 1981-82. Commodity prices have fallen, a high interest rate policy and high dollar have all contributed to their feelings of neglect in our society.

We have seen people struggling against despair, family violence, marital breakups and even suicide because of the increasingly desperate state of the family farm. Many farms do not generate enough income to provide an adequate living for the people who live on them. Many farm families therefore rely on one or even two off-farm incomes to bring in enough money on which to live. While commodity prices have fallen, prices in our society continue to increase. Bridging that gap is becoming harder and harder.

This is causing a heavier case load for many care givers in our rural communities, which may or may not have the same number of social services as care givers have access to in urban areas. Had recent cutbacks in transfer payments from the federal government been passed along by our provincial government, this increasingly desperate situation would only have deepened, we believe.

Some feel that a Third World situation may develop on the family farm, where the people who grow our food will no longer be able to purchase it back at their local grocery stores. We ask you to keep this situation before you and to be creative in developing policies which might help our provincial farmers.

We also ask you to check the influx of agribusinesses which may help to dehumanize many farmers. When some farms are sold to agribusiness to cover high debt loads, these same farmers at times are hired by this business to manage the farm they once owned. This is a sad situation and we ask you all to work to alleviate this suffering.

We are also concerned about the amount of agricultural land being used for non-agricultural purposes. We were pleased to hear the government put on hold a proposal to build an arena on prime agricultural land outside Ottawa for a professional hockey team. This policy of preserving agricultural land must be a consistent one across our province so that prime agricultural land stays in food production.

Development work overseas: Each year the people of our diocese raise hundreds of thousands of dollars for development work overseas under the work of the Huron hunger fund of this division, which is associated with the primates' world relief and development fund of the Anglican Church of Canada. The target for 1991 is $466,000, one which I trust will be reached. We ask that the government and opposition parties look into the possibility of matching grants for moneys that the people of this province raise for overseas development work, as have the provinces of British Columbia, Alberta, Manitoba and Saskatchewan for their citizens in the past, the latter two even being have-not provinces.

In conclusion, we are a division of the church which takes up the call of the needy in our society. Although we live in one of the wealthiest parts of the wealthiest province of Canada, those who are poor, who live with violence, disease, injustice, pollution-related concerns, stress, etc, are still needy. To fight the deficit by cutting back on the services and support systems for these people, who may be the least likely to cope with such cutbacks, would be immoral, we believe.

No one likes to see a deficit increase, which will have to be paid back one day, but the alternatives of reducing and cutting back services and support systems, especially in a recession, would only make a bad situation worse.

On behalf of the church and society division of the Diocese of Huron, I thank you for taking the time to listen to the concerns of the people of this great and progressive province.

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The Chair: We have enough time for one short question from each party.

Mr Sutherland: Thank you, Mr Harnadek, for your presentation. I think it is very thoughtful and deals with a lot of issues. I particularly like your conclusion in terms that cutbacks at this time are not going to get us into the recovery and in terms of dealing with the real impact of the recession on people.

As much as I support all your comments about rural communities, I think it is important regarding the Ottawa proposal just to imply that the government formally has not put it on hold. What has occurred is that the Ministry of Agriculture and Food is commenting as a normal procedure on the proposal for development before the Ontario Municipal Board.

Father Harnadek: But it is investigating it.

Mr Sutherland: It is making comment to ensure that the interests of agricultural land are looked after.

I guess I wanted to get maybe a little more personal standpoint from you. Reading here, you are from Listowel.

Father Harnadek: I live in Listowel.

Mr Sutherland: I was just wondering if you can give us some sense of the impact, of what Listowel is going through. Right now, what is the impact on the people in your congregation and within your community?

Father Harnadek: In my community, the recession has been devastating. Our major employers have closed down. Some have moved to the United States because of the free trade agreement. Some have simply closed down. I am thinking of a furniture factory that closed down, simply went out of business, and other places that have moved down to the United States because of the free trade agreement. They represented two of the three major employers in my community. It has been very devastating for our community. The number of unemployed has been very high, and we have just begun to see the number of these folk because their unemployment insurance benefits have ended and now we are beginning to see them come into our local food banks and our local agencies for help. It is pretty despairing. It is pretty devastating for these people.

Mrs Sullivan: I do not have questions about your brief. I think that on the agricultural issues you have raised, we have been speaking with representatives from the agricultural community and we will be pursuing those at some length.

I was interested in your comment about development work overseas and your suggestion that the government of Ontario should participate in matching grants for overseas development work. I thought you might be interested in knowing that while the province has not done that in the past, has not provided the matching grants, the province is indeed very active in overseas development work through the contribution of equipment and goods and services from the government, including personnel transfers and technology transfers that are done sometimes through Ministry of Industry, Trade and Technology and other times through the office of the Premier and the Cabinet Office. That might be something that might change your views about the participation of the province.

Father Harnadek: We realize that, but what we are suggesting is that the partnership develop even deeper than that; we are aware of that. We would like to see a deeper relationship develop.

As I mentioned in the report, and so I will not duplicate myself, it is difficult for us to do a lot of work ourselves. It is nice to be in a province where for the last number of years -- not just the last year but the last number of years -- the government has seen itself as a partner with development work in our own province and overseas. We are just hoping that because of the financial situation we are in, that does not end. We would like to see that continue and develop.

Mr Turnbull: In the interest of time, I will just concentrate on a couple of areas. You are suggesting that the loss of jobs and many of the social problems are caused by the free trade agreement. I would suggest that last year was the first year in history that Ontario actually sold more to the US than the US sold to Ontario.

It seems to me that the greatest cause of loss of industry in this province is the high level of taxation. Essentially, when you are running deficits, it is just deferred taxes. You said the federal government had cut back on its transfers; in fact, it just limited the amount of increase.

Father Harnadek: I do stand corrected.

Mr Turnbull: Everybody seems to consider that the federal tax burden is too heavy. People say the provincial tax burden is too heavy. Who is going to pay these deficits?

Father Harnadek: I would suggest to you that the high interest rates and the high dollar -- I am going to try to control myself here -- are in large part responsible for the job losses I have seen in my community. I can only speak of my community, but these are managers of plants and these are people who have said those were the reasons why they pulled out, plus free trade.

The Chair: I thank you for appearing before the committee.

We are going to take a short recess. I cannot say whether it is five minutes or 10 minutes. We are waiting for the Middlesex Federation of Agriculture. There is no answer, as it is right now, on their phone at home.

Mr Sutherland: Maybe we can wait five or 10 minutes, and then if they are not here, we will adjourn.

The Chair: Yes, I would say if they are not here by 4:10, there will be adjournment.

The committee recessed at 1556.

1605

The Chair: The Middlesex Federation of Agriculture was to appear at 3:30; it is 4:05 right now. We are unable to contact them, so I would say, looking at the committee here, that this hearing be adjourned for the day and resume tomorrow at 9 o'clock in Brantford.

The committee adjourned at 1605.