CONTENTS
Monday 4 March 1996
Pre-budget consultations
STANDING COMMITTEE ON FINANCE AND ECONOMIC AFFAIRS
Chair / Président: Chudleigh, Ted (Halton North / -Nord PC)
Vice-Chair / Vice-Président: Hudak, Tim (Niagara South / -Sud PC)
Arnott, Ted (Wellington PC)
*Brown, Jim (Scarborough West / -Ouest PC)
*Castrilli, Annamarie (Downsview L)
*Chudleigh, Ted (Halton North / -Nord PC)
*Ford, Douglas B. (Etobicoke-Humber PC)
*Hudak, Tim (Niagara South / -Sud PC)
Kwinter, Monte (Wilson Heights L)
*Lankin, Frances (Beaches-Woodbine ND)
Martiniuk, Gerry (Cambridge PC)
*Phillips, Gerry (Scarborough-Agincourt L)
Sampson, Rob (Mississauga West / -Ouest PC)
*Silipo, Tony (Dovercourt ND)
*Spina, Joseph (Brampton North / -Nord PC)
*Wettlaufer, Wayne (Kitchener PC)
*In attendance / présents
Substitutions present / Membres remplaçants présents:
Bassett, Isabel (St Andrew-St Patrick PC) for Mr Arnott
Carr, Gary (Oakville South / -Sud PC) for Mr Sampson
Grandmaître, Bernard (Ottawa East / -Est L) for Mr Kwinter
Marland, Margaret (Mississauga South / -Sud PC) for Mr Martiniuk
Clerk / Greffier: Franco Carrozza
Staff / Personnel: Alison Drummond, research officer, Legislative Research Service
The committee met at 0932 in committee room 1.
PRE-BUDGET CONSULTATIONS
The Chair (Mr Ted Chudleigh): If we could call the meeting to order, we have a full day in front of us. I'd welcome all the roadies back to home. If we could deal with the first item of business, in that we would make some arrangements for the timing of today, we are commencing at 9:30 or thereabouts and we'll break at 12 for lunch, I'm assuming, and reconvene at -- the Chair is open to suggestions.
Mrs Margaret Marland (Mississauga South): When we're drafting reports, I think it's normally 2 to 4 in the afternoon.
The Chair: Fine, we will meet from 2 to 4 this afternoon. No disagreement on that issue, I take it. On Thursday, we will start --
Mrs Marland: At 10.
The Chair: A suggestion of 10 to 12.
Mrs Marland: I'm only going by what we've done every other year.
The Chair: A suggestion of 10 to 12 in the morning session.
Mrs Marland: And 2 to 4 in the afternoon.
The Chair: And 2 to 4 in the afternoon. Any objection? Fine, those will be the hours for Thursday.
You all have had a copy of a draft report that was submitted by Alison Drummond. I understand that the tradition is to start on page 1 and to move through the report. If there is no objection to that, that's how I will proceed. Comments?
Ms Frances Lankin (Beaches-Woodbine): There's no objection to that. I just want to give my apologies early, in that I know other people were on the road, but I didn't actually physically get a copy of it from my office until just a few minutes ago. So I'm going to be going through it a first time as we go through it page by page. My apologies to people.
The Chair: Are you a fast reader?
Ms Lankin: Yes, I'm a fast reader, but it might make my response a little slower than it would have been otherwise.
Mr Wayne Wettlaufer (Kitchener): Frances, we were on that same committee. We understand.
The Chair: If we might proceed then, I would ask the researcher to be involved in this process and I would ask for comments on page 1. Any additions or deletions?
Mr Gerry Phillips (Scarborough-Agincourt): Just in the first paragraph, on the projected deficit of $9.3 billion, I think the government's indicated that it will go up when it finalizes some write-offs. I'm just curious as to how much those write-offs might be. The reason I raise this is because in the third-quarter report they talk about how there will be write-offs for student assistance and the Ontario Development Corp. Then in another document, the 18-K report, they talk about how it will go up as a result of severance costs. I wonder if it may be useful just to get some idea of how much the government figures the deficit might go above the $9.3 billion, because I'd always assumed that it was not significant, but I see in the 18-K report that it may be. I wonder if by Thursday we might get some indication from the government of the size of the write-offs because, as I say, I thought the $9.3-billion deficit was probably on track and then I've since look at some other numbers.
The Chair: Comments from the government?
Ms Isabel Bassett (St Andrew-St Patrick): I think we could probably look at those figures, see if we can get something. I can't promise that we'll get them, but we'll look for them, Mr Phillips.
I have a couple of points of correction. At the bottom of the first paragraph, "10% annual rate"; the correction should be "9.8%." Then in the second paragraph, the sixth line, "GDP and 99,000 jobs," it should be "100,000." So if you could correct that.
Ms Alison Drummond: I'm sorry about that. The numbers kind of -- the officials on Hansard haven't had --
Ms Bassett: Thank you, Alison, for all you've done. It's a huge job. I want you to know that. So as we go through, if we're correcting, having written some stuff myself, you think every correction is a personal attack. It's not at all.
Ms Drummond: Oh no, no.
The Chair: Please don't be sensitive.
Ms Drummond: But I wasn't sure and I didn't have a chance to check.
Ms Bassett: I wasn't sure either, so that's what it is. I have one other thing, but Frances, you do yours if you want and then --
The Chair: Did you have one other?
Ms Bassett: I do have one other, but it's in the next -- I want to add some material. Should I do it now?
Mrs Marland: Just before you do, Isabel, on behalf of the committee, Alison, I wanted to congratulate you on drafting this report. We appreciate what an impossible task it is when you start after hearing that number of deputations and that much input from the committee members, so we do commend you for the drafting of this report.
Ms Drummond: Thank you.
0940
The Chair: Ms Lankin, did you have a comment?
Ms Lankin: I did, and I'm trying to think of a constructive way to suggest this. The lead-in to this talks about, "As is traditionally done in pre-budget hearings...there was an overview of the...economy and an assessment of whether predicted revenues and expenditures are on track." In fact, I think during the first couple of days of the hearings I made a point on a number of occasions that in fact we weren't presented with the traditional kind of information and that we did not have any medium- or long-term projections on revenues or expenditures and whether they were on track. Everything that we had was related to the immediate fiscal year. I would appreciate it if that beginning could be expressed, that first sentence specifically, with respect to 1995-96 and if there could be an indication built into the opening first couple of paragraphs at some point that information with respect to medium- and longer-term projections on revenues and expenditures were not presented and the committee did not have that information in front of it.
Ms Drummond: The last sentence of the second paragraph does indicate that to some degree.
Ms Lankin: It does a little bit; you're right, Alison. In reading it, it felt to me like this was an expression of business as usual, and I didn't quite find it that way. I'm not looking for a political statement in here, but something that specifies that the information provided really was only for this fiscal year and that the committee did not have medium- or long-term numbers in front of it to consider and to make recommendations on.
Mrs Marland: But I think Alison has covered that off in the last sentence of the second paragraph.
Ms Lankin: It does say "expenditure projections for 1996 would not be provided until the budget," and that's true. I come back to my point that traditionally there are medium- and long-term numbers. Medium is not just one year, it's a two-year outlook, and long term is a three- to four-year outlook. Medium- and long-term numbers that are normally provided were not provided. So I'm just looking for an expression of the fact that is information was not before the committee and therefore the committee's recommendations will not be able to take that into account.
The Chair: Mr Spina.
Mr Joseph Spina (Brampton North): I was wondering if perhaps, Frances, the assessment that was referred to "of whether the predicted revenues and expenditures are on track," whether that was of current revenues and expenditures as opposed to projected. I don't know if that would fit more in line with what your thoughts were with what really was presented.
Ms Lankin: Yes, it does.
Mr Spina: Yes, "whether current revenues and expenditures are on track."
Mr Phillips: Not to get things off on the wrong foot, but just in terms of process, our caucus found unacceptable -- the only word I can use -- the lack of information and certainly we'll want the report, in one form or another, to indicate that. Even if I were on the government side, I might also want to find a way that this process is dramatically improved. As I said when we started, I don't think you could ever run a company this way where you would not have some projections of revenue and expenditures. If any of you were on a board of directors, you would resign as a director because you'd say, "You're asking me to comment on things that you're really not providing me with information on." I just wanted to be totally crystal clear that this process has been unacceptable for us and it has to change. We'll be pushing to incorporate the recommendations of the Ontario Financial Review Commission in our recommendations because I think, generally speaking, that process would represent a substantial improvement over what we've been through here.
The other thing is, we have a difference of opinion about the word "encouraging" on job growth. I think 1995 was a really bad year for job growth in Ontario. There was no job growth from December to December. It's going to be impossible I think for us to niggle about words here, but just so you know the tone, we would not agree with the word "encouraging" on job growth; we would say it was "discouraging." I'm not sure how we're going to be able to resolve wordsmithing other than if the government members want that in there, then they'll have it in there, but we have a different view of the job thing.
Mr Gary Carr (Oakville South): I was just going to say in terms of the figures and so on -- I hesitated to mention this during the hearings when the Liberals and the NDP were talking about wanting the figures -- and I will say this very clearly, if I thought -- and looking at last year's two dissenting reports -- that some of that information would be used in putting something forward in terms of alternatives -- this isn't to be critical of the Liberals in particular in the opposition, but if you look at the previous dissenting reports, we were very specific about what we wanted in terms of the tax cuts, everything.
It became part of our campaign, was outlined. Looking at the dissenting reports in the past, they've been very generic, and quite frankly -- I don't say this to the Liberal Party in particular -- if you look at it, any three of the political parties could have taken the Liberal dissenting report and agreed to it because it was very generic and not too specific.
If I have a criticism of the specifics of knowing what the numbers are and where we're going, in the past that has never led to anything to put forward. If I thought any of the figures coming forward would then be able to be a part of a dissenting -- to take a look and say, "You shouldn't do the tax cuts because here's how much it's going to cost," quite frankly, putting all these numbers forward has never paid off to the opposition parties. I say that in asking the two parties to take a look at last year's report and ours, how specific we were in terms of what we were proposing to do.
I didn't want to start off on this sort of negative note as well, but the opposition parties asked for all the numbers and, let's be very honest, they want to have the numbers to embarrass the government, not to come forward with their own positive alternatives.
If it is going to be different this time, and I've sat on this committee for four years now, I guess, it will be the first time, and specifically with the Liberals, because as you know, last time we were goading you, "Come out with your plan, come out with your plan," and Elinor Caplan, who sat on the committee, said, "Wait for the election." We were 10 days into the election before we even got the plan put forward.
We were very clear, and last year you will remember this committee spent the entire time debating the Common Sense Revolution. In spite of the fact you might not always have agreed with it, we were very clear with the numbers. In terms of getting the numbers and projections, our financial people who came forward were able to make projections, and I think, looking at the numbers, you could make those projections of where we're going just as easily as the pundits and the economists did.
This year I am hoping, if we get into dissenting reports, that we will get something that is very specific about what you would do as an alternative to the government. If you don't like the tax cuts and you're going to say that the savings would be there, then let's be very specific. If you're going to start off asking for all this information and all the numbers and all the details, as if you were Finance minister, then I hope -- and I would encourage you because I think we probably will have dissenting reports. We will look very closely. Last year's, looking at it, wasn't too bad. The one the year before that, I will say very clearly to the Liberals, the people who put that together, on our side, we quite frankly laughed at it. It was two pages and it wasn't worth -- as I said to the folks this morning, if it had been a paper done at the university, quite frankly, it would have got a D.
If you're asking for all these numbers and you want to prepare an alternative, we on this side will be looking for something a little bit stronger in terms of what your dissenting report will be. I say that to the NDP members as well, because as I look at their report of last year, there was absolutely nothing in it to guide any government of any political stripe on where it should be going. If you're looking for the numbers, we will be looking very closely for what your alternatives will be over the next little while.
0950
Ms Lankin: I'm assuming that was for Hansard's purposes, because it really contributed very little to the discussion around this table. I find that amazing; you argue two sides to the point. Over the last few years, you know that the Finance minister of the day provided this committee with more information than the finance committee had ever been provided with in history with respect to projections on medium- and long-term revenues and expenditures. You shake your head, Mr Carr, but it's absolutely true. You can go back and look at the documentation.
You in fact make the point that your party provided a very specific alternative in response. With that information at hand, you were able to develop a very specific set of directions. Quite frankly, what you're saying to the parties over here is, "If you're asking for all of this, I hope we're going to get some content." I remind you, we didn't get the information we asked for from the Finance minister, so there's a bit of a problem at the very base of your argument. We've been asking for certain information in order to inform the recommendations we make. We haven't been provided with that information.
I'm not sure exactly what the Tory members of the committee will do with respect to their recommendation to the government, other than perhaps to stay the course; I don't know. But I know our caucus would be very interested, and having just come from the experience of four years in government, having perhaps been in a situation to have a bit more familiarity with the numbers and some of the challenges the government faces, and having had to go through some of those difficult decisions ourselves, we might be in a position, with the information, to provide you with the more detailed kind of comment and alternative you're asking for.
That would be our intent; that would be our desire; that would be our wish. But we haven't received the information, so I don't know that it's worth carrying on a long debate about that. All I'm asking with respect to the report is that it not give the impression that it's business as usual, that it indicate that the information we had before us was with respect to current information and the 1995-96 fiscal year and that we did not have medium- and long-term projections on expenditures and on revenues on which to make our recommendations.
I'll point out to you that this information is kind of important. You say we could make assumptions ourselves. You can't know, unless you're in government, whether or not the revenue side of the portfolio is performing as one would have expected. You can't know what is happening out there with a combination of the impact of job loss and the impact of the underground economy, whether or not tax revenues coming in are slower than projected.
You need that information to be provided by the people inside government, and that information, the revenue line, is very important to take a look at what the impact is on the deficit and then to determine whether you have to continue to make the cuts on the plan that your government had, whether they need to be deeper, whether you need to modify the tax cut as a result of lower than expected revenues, all of those things are balls in the air until the budget is actually tabled.
I just repeat that I think the information would have been helpful for the opposition and for government members to provide the kind of detailed response and alternative Mr Carr asks for. I don't disagree with him that this is an important thing for opposition members and government committee members to attempt to do, to provide detailed and informed recommendations to the government, but I point out that the information wasn't there and I would simply like a very low-key and non-partisan statement of that in the opening section of this report.
Mr Phillips: I found the government's response interesting. In my view, this is information the public has a right to have. I fundamentally disagree with the government that you can keep this information confidential, private, for your use only, and you'll release it to whoever you want to release it to. You are abusing your power. I can't force you to do that; only public opinion can. But to say, "If we thought you would make the use we want you to make of it, we would release it to you," is an insult.
You're going to do what you want to do. You did on Bill 26; you're going to do it here. You're going to say to the public, "You have no right to this information." I disagree fundamentally with you. You can get away with it now, but I guarantee you that you will not get away with it over the haul. We're following, frankly, the same process we went through on Bill 26, which is to say: "We're the government. We'll do whatever we want." This is public information. They are public servants who prepare this. You are releasing the information publicly that -- you will not give us the information. I take Mr Carr at his word that you will contain all the information you want to and release only what you want to, to us. I assure you that won't last over your tenure.
We can move on. We'll register in very strong language that we found the information we got to date unacceptable.
Mr Carr: I want to say off the bat that this isn't a government position. I haven't talked to anybody about what I have said. This is Gary Carr's position. But I honestly believe this: If you look at our dissenting report, our whole program, the Common Sense Revolution, was put together based on information that we had that was available. It was in all the reports that were tabled.
What I honestly, truly believe, and I'm saying this because I know you, is that how you're trying to proceed is that because you don't have the information, you can't take a position. I'm saying that with the information out there, you should be able to put together some alternatives. I honestly, truly believe this, and it's not the government saying this, because I haven't even talked to anybody about this. I think the talk about the numbers is quite frankly an excuse for not having to take a position other than the opposition position, which is, "Don't do the cuts." I honestly, truly believe that. It isn't the government saying it; it's Gary Carr saying this.
I sat for four years on this committee, I've been through three of our Finance critics and the information that is out there, the information that was presented in the November economic statement, should be enough for you to present what you think needs to be done. What you're doing is typical of the games that were played, which we, I might submit to you, did not do in opposition. We took positions. We said: "Here it is. Here's what the tax cuts will be. We're going to go ahead with them." We outlined a position.
I say this in all sincerity to you: I honestly, truly believe that your talking about not giving you the numbers is an excuse for not presenting some alternatives. If last year the NDP presented them as well as everybody said they did, then if you take a look -- and I will be critical of the Liberals -- at the Liberal report, the dissenting opinion, if they had all the information, then surely there should have been a better report written than what was said in that, which all three parties --
Ms Lankin: That's not a good reason not to give the information.
Mr Carr: What I'm telling you is when you had the information, all the information that was possible, you didn't put anything together. I am saying quite clearly that I honestly, truly believe this is an excuse from opposition parties to not present alternatives. I honestly, truly believe that. I think there's enough information in there that if you truly want to present your alternatives, they can be done. I will say this on the November economic statement -- you will know this; every economist tells you -- within two months, a lot of those numbers change, but you cannot and will not, in my estimation --
Ms Lankin: How can we base our recommendations on them if we're not getting updated information?
Mr Carr: -- get away with not presenting alternatives by using the excuse of the numbers, because I firmly, Frances, and I firmly, Gerry, believe the reason you are debating this is because you do not want to present alternatives. This isn't the government saying that; that's me.
Ms Lankin: You're wrong.
Mr Carr: I've sat four years on this, Frances, and you weren't even on this committee. You never even sat on this committee once --
Ms Lankin: I spent four and a half years at the cabinet table and I'm interested in alternatives. I'm interested in an alternative to what your government is doing to this economy. I really resent the implication of your statement.
Mr Carr: Do I have the floor, Mr Chairman, or not? I can argue and yell just as much as you can, Frances, probably better. If we're going to start into that --
The Chair: If I might suggest that --
Mr Carr: -- we can start --
The Chair: Mr Carr, order, please.
Mr Carr: -- and then I'll just yell.
The Chair: Mr Carr, just a moment. If I might suggest --
Mr Carr: We'll leave it at that, then.
The Chair: Mr Carr, could I interrupt you just a moment, please.
Today may not go just as smoothly as the last four weeks have gone. Perhaps I could ask the members --
Mr Bernard Grandmaître (Ottawa East): -- an alternative?
The Chair: This is your first day on the committee, Mr Grandmaître. I don't want to blame you for this, but it's the first day you've been in the room. We do welcome you, however.
Mr Grandmaître: Thank you.
The Chair: I will maintain a list, and if you could catch my eye, I will put you on the list and perhaps we can have some order to it, if not decorum. I'd appreciate that.
Mr Carr, were you completing your remarks?
Mr Carr: I will wrap up. I just wanted to make the point and I probably shouldn't have started us off this way, to get going. But I will say this then: I -- not the government -- will be looking very clearly at the alternatives that are presented, because what I'm saying is nobody over the last four and a half years, either on the government side under the NDP or under the Liberal side, presented any alternatives, and I will challenge anybody to read it. They're all public documents. Read it and tell me that you think there were any alternatives. Where we were different is we said, "No, you might not always agree but you will know very clearly where we stand," and that's what I'm challenging you to do. I will leave it at that.
1000
If you believe in the alternatives, Frances, at the end of the day, because I suspect we'll probably have a dissenting opinion unless you believe in spending cuts and tax cuts, then I will be, at the end of it, when the dissenting report comes in -- maybe you'll prove me wrong, but I will read your report at the very end and see what clear alternatives you've got rather than just saying, "Don't cut, don't cut, don't cut."
I firmly believe, and I say this looking at both of you, you could present alternatives with the numbers that are in front of you today. I honestly, truly believe that. That isn't the government's position, that is my position, and I'll leave it at that, Mr Chairman.
Ms Bassett: I have a suggestion. Since the first part of page 1 talks about the economy, I feel strongly that we have to talk about the provincial fiscal picture and I suggest that just above "Expert Witnesses and Economists" we put an insert that would provide some of the material. Do you want me to read it out, Mr Chair?
The Chair: Please.
Ms Bassett: "In the past 10 years, the government spending has virtually doubled from $28 billion in 1985-86 to $57 billion in 1995-96. Ontario's accumulated debt has almost tripled from $33 billion in 1985-86 to over $97 billion in the fiscal year of 1995-96. Debt-to-GDP ratio stood at 14% in 1989-90; today the debt-to-GDP ratio stands at 30%. In 1995-96, Ontario's debt will be at $97 billion, more than twice the level in 1990-91. By the year 2000-01, Ontario's debt will exceed $120 billion.
"Ontario's debt per capita is at $8,765 per person. It's the third highest among the provinces. Ontario's 1995-96 deficit is forecast at $9.3 billion, at $839 per person, the highest among the provinces. Seven provinces are forecasting budget surpluses this year. Ontario's public debt interest in 1995-96 is at $8.9 billion or 18.8% of revenues. It's the second highest among all provinces after Nova Scotia at 19.3%."
I would like to put these in as an insert at the bottom of the section called "Economy."
Ms Annamarie Castrilli (Downsview): I don't have a comment on Ms Bassett's comment but I do want to go back for a moment to what Mr Carr said. Quite frankly, as a new member, I'm quite stunned by what you stated. We had well over 80 deputations that came here. They thought they were being asked to be part of a public process to give the government advice. They were not able to give the government adequate advice because there were no figures before these people.
Quite frankly, your suggestion that pundits were able to come up with the figures and so could we I think bears some discussion. I will remind you that Scotiabank, for instance, came here and said to us: "We don't know very much about the tax cut. We can't tell you what the impact will be. We don't know what will happen as a result. We're not sure it's going to affect jobs positively." I'm really stunned that you would show such flagrant disregard for public process, for individuals who came here in good faith and were actually asked to speak in a vacuum. That's not good public policy, in my view. It's not good governance.
Ms Lankin: First of all, briefly on Mr Carr's comments and then I would like to respond to Ms Bassett's. Let me say to you that I resent very deeply the tone and the way in which you're approaching this issue. I remind you again that whether or not I meet your test at the end of the day means very little to me. I will do the best that I can with the information that has been provided, and I tell you again, the information that has been provided every other year in the last three to four years that you've referred to was not provided to this committee. So there is a fundamental difference in the data that are before the committee and the amount of information that is available for us on which to base our recommendations.
Secondly, in your response, you indicated very clearly your concern that government members in the previous government hadn't provided alternatives to their government's budget. I'll be looking very clearly at the end, just as you'll be looking for mine, for specific recommendations of alternatives to your Common Sense Revolution from you, Mr Carr.
I say to Ms Bassett, with respect to your recommendation, I appreciate that you have had the work done with respect done to the last 10 years. I'd be interested in seeing those statistics, actually, relate to the last 20 years. I don't know why you would, other than perhaps some sort of political focus, take a look at only the last decade. I'd like to see a 20-year period included. I would also like to see some statistics included in there that look at the comparison of per capita expenditure by government over that period of time, because I think that that also relates to the issue of government debt. That would be a useful addition to the list of statistics that you've put in.
Mrs Marland: I was just doing a calculation here. I would like to say in response to Ms Lankin's comment about she'd like to see the figures for the last 20 years about where the debt is and what the figures were for the annual deficits, the thing that has astounded me the most about the last decade is a very simple figure, and that is that from 1867 to 1985, which is 118 years, this province's accumulated debt was $25 billion.
I find that really a significant figure, that since Confederation it took us 118 years to have a $25-billion debt, and that was the 1984-85 year when it was $25 billion. You see here it was $28 billion in 1985-86. But don't you think it's significant that it took us 118 years to get a $25-billion debt in this province, yet it's only taken us 10 years to quadruple that?
I think it speaks volumes, frankly, about the kind of spending that took place from 1985 to 1990, when we had the highest revenues in this province and we were out of the recession of the early 1980s. This province was booming. Everyone will tell you that, regardless of political affiliation. Everyone in business and industry, the economists, the actuaries, will all tell you about the wonderful years between 1985 and 1990 in terms of the overall economy of this province. Yet in spite of that, the David Peterson government doubled the debt between 1985 and 1990.
Mr Phillips: That's outrageous.
Ms Castrilli: Have you seen your own figures, Margaret? Your own figures belie that.
Mrs Marland: The debt went from $25 billion to $48 billion. When the NDP took over, the debt was $48 billion and now, five years later, five years after the NDP government, it's $97 billion to $98 billion. So I think if you want to look at the picture and the history, I would suggest to you that it's pretty astounding and it's pretty frightening when you do look at it.
If there's any question about any of this addition that Ms Bassett has moved to be included in the report, you will find all of those figures that she has just read are in the Finance minister's opening statement to this committee. The Finance minister's staff have not drafted those figures out of the air. There are reports that support all of those figures, and it is important that all of those figures be part of this report.
1010
Mr Phillips: I think it would be useful to follow up on Ms Lankin's comments. The last 20 years is fine with us, the last 15 years is fine with us, but I just think that it would be useful to put it into some perspective. I think when you actually look at the figures, it may surprise some of you.
I will just say that the deficit in the last five years of the Conservatives per year was way more than the deficit under the five years of the Liberals. The spending increases were much higher under the last five years of the Conservatives. The taxes per budget were much higher than under the five years of the Liberals, even when the gross domestic product was growing faster under the Conservatives than the Liberals. You took the deficit, debt, spending, all of those things up far faster. If Ms Bassett wants a little bit of the history in there, I think the last 15 years would be appropriate and that'll be useful.
I would just say one last thing. The last time a Conservative government balanced the budget was 1969. I know you all are new --
Mr Spina: The Liberal government never did.
Mr Phillips: The last time a Conservative government did. You can see by your own figures here, the balanced budget in 1989-90, according to your own fiscal document, that's the only balanced budget in the last, I guess, now 25 years. I'm just saying it would be useful, I think, Ms Bassett -- I know you'd like the historical perspective -- to put at least the last 15 years in. I think that would be appropriate. I don't mind the last 20 years either.
Mr Tony Silipo (Dovercourt): I'm not sure whether to reflect more my frustration or my amusement at the way this debate has been going, because I quite frankly find it all pretty fruitless, and I'll tell you why. With all due respect to everyone around the table, we're using the drafting of this report to argue all of the same positions that we know we have. We're not going to convince each other of these fundamental differences.
What I think we should try to do in order to get on with this rather than waste each other's time is to try to reflect initially in this report the things that we heard, get away from this -- Ms Bassett wants to put in the last couple of years because that makes Mike Harris's point very clear. We obviously want to see, if you're going to put those figures, it's more practical to put in the history over the last 10, 15 years, because that would give a truer picture.
We could argue about how much the debt has accrued over the last few years, but I think in fairness we'd have to also argue about what happened during the last big time when there was that big debt, as some deputants have told us, around what this country and this province did in the aftermath of the Second World War to get itself out of deficit and out of debt. I think it would be useful to have that put in there too. We could be arguing till the cows come home on that kind of back and forth and we wouldn't get anywhere.
My strong suggestion would be, let's just get on with trying to reflect in this report the things we heard, and then let's proceed, as I assume we will at the end of that, which is that the government members will have their recommendations and each of the two opposition parties will put their recommendations, and we'll have a report that we can then use in whichever way we think is useful out there and in the Legislature. That might make for a more productive session, or at least a faster session. I'm not sure productive would even be the correct word.
I offer that as a suggestion because I'm not sure what's going to come out of this otherwise. When we get on to the next couple of sections around the tax cuts, it's clear that whatever we think around the tax cuts, as is stated in the initial part of the draft that's before us, the expert witnesses as well as witnesses from business generally disagreed as to how stimulative the tax cut would be.
I don't think that's going to make any difference, quite frankly, to what the government's going to do. I think Mike Harris and the Conservative government is wedded to the tax cut and we're going to see a tax cut. It doesn't matter even if every witness had said, "Don't do a tax cut"; they're going to do the tax cut. So we could be wasting each other's time here today, Thursday, and whatever other days we have before we have to put this report in, and I'm not sure we'd be any further ahead.
So let's make sure that we agree that the words here reflect -- as I think legislative research has tried to do -- what was said to us, and then let's worry, perhaps more outside of this room than for the sake of Hansard in this room, about what we want to attach at the end of it as far as recommendations from the three caucuses.
The Chair: We have an addendum to Ms Bassett's motion. Further debate?
Ms Bassett: I would just like to reply to Mr Silipo. Thank you, I think what you say is valid, and in justification for what I wanted to add as an insert, I wanted to point out that the fiscal side had not been written about particularly. We've been stressing the economy on page 1, and the statistics that I drew were all stated in the minister's presentation to SCFEA. So in keeping with what Mr Silipo did say, this was part of our presentation. So it's not going back in history, and maybe that's a good way to get on with things.
Mr Silipo: I have no problem if you want to put it that way, as long as you're also prepared to say that that reflects what the Minister of Finance said to us, and that the Minister of Finance also refused to give us information that we requested. If you want the truth, put the truth out there. We can find words that say it that aren't offensive to anybody, but let's not try to get half the truth in on one side and try to omit the other half of the truth on the other side. Because again, all that's going to do is we're going to be screaming at each other for the next couple of days. We can do that but I, quite frankly, would rather spend my time more productively.
The Chair: Further debate? There's an addendum to Ms Bassett's motion from Ms Lankin regarding expanding the time frame to 20 years.
Ms Lankin: I'll amend that to 15.
The Chair: Fifteen years. Is there agreement on the addendum to Ms Bassett's motion?
Ms Bassett: No.
The Chair: No? Do we need a vote on it?
Mr Phillips: Yes, a recorded vote.
Ayes
Castrilli, Grandmaître, Lankin, Phillips, Silipo.
Nays
Bassett, Jim Brown, Carr, Ford, Hudak, Marland, Spina, Wettlaufer.
The Chair: The addendum is defeated.
All those in favour of Ms Bassett's --
Ms Lankin: No, excuse me, there was a second part to my recommendation, which was that statistics be included with respect to the per capita cost of delivery of public services.
The Chair: My apologies.
Mrs Marland: Mr Chair, you've received the motion: can we defer that motion till after lunch, until we have an opportunity to discuss it?
The Chair: With the committee's agreement? Deferred.
Are there any other additions to --
Mrs Marland: Maybe if we could have the motion in writing so we know what we are specifically dealing with.
The Chair: We'll attempt to have that pulled from Hansard.
Any other additions to page 1?
Ms Lankin: I had earlier raised a couple of points. I think Mr Spina had made a suggestion which was helpful. I don't know what's happened with that. In the first sentence we indicated that the overview of the economy and the assessment of perhaps the word "current" revenues and expenditures are on track, so that it's very clear that we're talking about the 1995-96 numbers that were provided to us. In the second paragraph at the end where legislative research has indicated that revenue and expenditure projections for 1996 would not be provided until the budget, I wanted some reflection that medium- and long-term predictions of revenues and expenditures had not been placed before the committee; therefore our recommendations will be made with the absence of that information.
1020
The Chair: That was part of your original amendment, Ms Lankin, or is that a new amendment?
Ms Lankin: That was the first point that raised and we never did actually conclude dealing with that. We went on to Ms Bassett's amendment.
Mrs Marland: Is that being placed as an amendment, because that's your opinion that you're placing as an amendment, isn't it, that the information wasn't available?
Ms Lankin: I think it's more than my opinion. I think it's fact unless you have something provided to you that we haven't. It wasn't provided to the committee. I asked that a number of times, and you know that the answer was no.
The Chair: Are you going to move that as a motion, Ms Lankin?
Ms Lankin: If that's the only way to deal with this, if there isn't consent. I had asked for a sort of low-key, non-partisan words to reflect that. If there's a general agreement that that could be worked in, then --
Mrs Marland: Because we did receive three or four communications over a period of three or four days from the ministry giving further information, and it may not have been the information in your opinion that you had asked for, but we did receive further information.
Ms Lankin: Do you have medium- or long-term projections on revenue or expenditures? I didn't get that, and that's what I'm referring to. All I'm saying is that if we could, in a very quiet and low-key way, indicate and stress that the information that we're dealing with is the current information as is in paragraph 1 and with respect to the end of paragraph 2, that it's not just 1996, that medium and long term, maybe that's the way it could be done: "The Finance minister stated that revenue and expenditure projections for the medium and long term would not be provided until the budget." That would even meet the needs of what I'm suggesting at this point in time.
Ms Bassett: I think that Ms Lankin should write it out and then we could consider it, if you want to make a motion to that effect.
Ms Lankin: I'm going to make a motion at this point in time then. I'm going to move that in the first sentence in the third line, the word "predicted" be deleted and be replaced by "current 1995-96 revenues and expenditures" etc, and that in the last sentence of the second paragraph, in the second line of that sentence where it reads, "expenditure projections for 1996," that "1996" be deleted and be replaced by the words "medium and long term."
The Chair: Is the motion clear?
Mrs Marland: Yes, the motion is clear, but I don't accept it as -- it can be a separate motion, but the statement as it stands, "The Minister of Finance stated that revenue and expenditure projections for 1996 would not be provided until the budget." That's what he said, so we can't change what he said. If Ms Lankin wants to add "or medium and long" that's different, but she can't take out "1996," if that's what he said.
The Chair: Ms Lankin has moved a motion.
Ms Lankin: I'm willing to work this through with Ms Marland. I did hear him say my words as well, so why don't we put it all in? "The Minister of Finance stated that revenue and expenditure projections for 1996, the medium and the long term, would not be provided until the budget."
Mr Silipo: That's what he said.
The Chair: Ms Bassett, did you have a comment?
Ms Bassett: I think that this same argument that Ms Lankin is raising was raised in Hansard, if you want to go back and read the questions to the minister at the presentation on that day. I think that we have to go with what is written on the page here.
Ms Lankin: I don't understand your point. I asked him for medium- and long-term projections and he said it wouldn't be provided until the budget.
Ms Bassett: That's right.
Ms Lankin: That's an accurate reflection of what he said. According to Ms Marland -- I don't remember this -- he also said 1996 wouldn't be made public until the budget. I don't recall that. I remember medium and long term. But if Ms Marland's right -- I know I'm also right -- why do you only want one-half of it in there? The 1996 won't be provided until the budget, and the medium- and long-term won't provided until the budget. Let's put all three aspects of that in the sentence.
Mrs Marland: Maybe we could ask Alison, because I'm assuming that when Alison drafted this sentence, she took it from Hansard. I have not reviewed the Hansard. Is that where you got that?
Ms Drummond: I'm happy to review the Hansard. I believe that indeed all three statements were made. There weren't projections for any --
Mrs Marland: I suggest that before we vote on it that we do review the Hansard, because it wouldn't be right to put something in here that's either a contradiction of what the minister said or our interpretation of what the minister said.
This sentence says, "the Minister of Finance stated," so I'm sorry, I have to see what the Minister of Finance stated in the Hansard before I can vote on this, frankly. And I respectfully suggest that if we're voting on amending a sentence that says "the Minister of Finance stated" we should all review what Hansard said and then we'll know what he said.
I think it's inappropriate for us to vote on that amendment until we've reviewed it and, unfortunately, I didn't bring the Hansard with me. Ms Lankin is certainly in order to move an amendment, but before I can vote on it, I need to see it. I'm suggesting that we table that until we can look at the Hansard.
Does anybody have the Hansard with them?
Mr Grandmaître: I think what Ms Lankin is saying, she's not trying to deny or to change what the minister has said or the ministry. I think what Ms Lankin is trying to do is to get more information, and that's what she's trying to do with this resolution, in order that we can resolve this or we can come to a fair conclusion.
Mrs Marland: With respect then, this is a report of the committee.
Mr Grandmaître: Yes, I realize this.
Mrs Marland: This sentence isn't Ms Lankin requesting anything. This is Ms Lankin reporting what the Minister of Finance stated, and Ms Lankin thinks that the Minister of Finance was before the committee and made this statement. All I'm saying is, she may be right, and we will know very quickly by referencing Hansard. If no one has Hansard in front of them this morning, we can't confirm what he said. Let's deal with it this afternoon and get on.
The Chair: We could have copies of Hansard for this afternoon.
Mrs Marland: Let's do that.
Mr Phillips: I think it would be useful, and it may be we're going to have to change the first paragraph at the top of the page, as is traditionally done in pre-budget hearings. Actually, what is traditionally done in pre-budget hearings is the Minister of Finance presents the medium-term fiscal outlook, and that didn't happen. So if we don't do it in the second paragraph, I think we have to go back and we have to almost take out the first few words, as are traditionally done in pre-budget hearings. We actually have the opposite of what is traditionally done.
Mr Chair, to be helpful to you, we can look at the Hansard, perhaps deal with it early this afternoon, but if it doesn't work in the second paragraph, I think we would want to go back up to the first paragraph and just point out that we didn't get what's traditionally done.
Ms Castrilli: Just a point of clarification: I think if the issue is that we don't want to change what the Minister of Finance said -- I think that's self-evident; if that's what he said, we don't change it -- but it does follow from what he said, in any event, that officials did not provide predictions for either these numbers or any medium- or long-term projections. So, with Ms Lankin's permission, we might look at amending that second half of that last sentence and make the point.
Ms Lankin: If that makes government committee members more comfortable and avoids having to defer the motion to this afternoon, I have no problem with that. It gets the intent across. All I wanted on the record was that the medium- and long-term numbers weren't before the committee. So that's fine.
Ms Bassett: I think that's accurate, as Ms Castrilli pointed out. We don't want to put words into his mouth. That way it makes it an accurate statement if you want it to be added.
1030
Ms Lankin: I will amend my motion to have those words added at the end of the sentence. It would be, "Officials therefore did not provide predictions for," I would say, "1996, medium or long term."
Ms Bassett: I would still feel more comfortable looking at the Hansard thing. Is there any problem waiting until we look at it?
Ms Lankin: It's just efficiency for us to move on. I mean, you know that officials did not give us the medium and long term. Is there a dispute about that?
Ms Bassett: I beg your pardon?
Ms Lankin: Is there any dispute about whether or not the officials provided us with the medium- and long-term projections on expenditure and revenues? I don't think there is a dispute about that. So we're not now changing anything that is related directly to what the minister said. It's just, "Therefore, officials did not provide predictions for 1996," which is what the minister said, "the medium or the long term." That will satisfy my concerns.
Mr Wettlaufer: Actually, I think the "officials therefore did not provide predictions for these numbers," would not be appropriate terminology, because we're talking about 1996 expenditures, not medium- and long-term expenditures. I think we would have to have a separate sentence: not a separate clause, but a separate sentence.
Ms Lankin: "Officials also didn't provide us...."
Mr Wettlaufer: I was just going to suggest, Ms Lankin, that, "Officials also did not provide predictions for medium or long term."
Ms Lankin: That makes me very happy. That's great to hear that. If you will agree, I will agree.
Mr Wettlaufer: For you.
The Chair: The Chair is unsure as to whether or not we are going to proceed with a vote on the amendment. Is that the wish of the committee, or are we going to table it until after lunch? Those seem to be the two things that are in front of me.
Ms Lankin: If we could try this one more time, I will agree with Mr Wettlaufer's construction of this. The word in the first sentence of the first paragraph, "predicted," is dropped and it is changed to "current," 1995-96, and an additional sentence is added to paragraph 2, which says, "Officials also did not provide the predictions for medium- and long-term expenditures and revenues."
The Chair: Is the amendment understood?
Ms Bassett: We need a lawyer here, because "current" and "predicted" mean totally different things.
Ms Lankin: That was Mr Spina's suggestion. I took Mr Spina's suggestion on that.
Mr Silipo: You could have "current" and "predicted" even. The two don't conflict. You could have both words in it.
The Chair: Is there further debate? Are we ready to call the vote?
Mr Wettlaufer: Can we split that? Can we split the amendment into two parts, one which could be deferred until we have a chance to review Hansard, and that would be the first paragraph, the "predicted," but the second part, being the second paragraph, we could vote on that?
Ms Lankin: Fine.
The Chair: Agreed? We will vote on the amendment to the second paragraph. Those in favour? Opposed? The motion carries.
Any other amendments or discussion on page 1?
Ms Bassett: We haven't voted on the -- aren't we going to vote on the --
The Chair: I stand corrected, Ms Bassett.
Mrs Marland: Well, I'm sorry, I moved to table that sentence until we reviewed Hansard.
Ms Lankin: I withdrew that amendment and I placed an entirely different amendment.
Mrs Marland: Could I be told what the amendment is, then, please, that we're voting on?
The Chair: The amendment that we just voted on?
Mrs Marland: I'm talking about the new amendment referring to the last sentence.
Interjection: We just voted on it.
Mrs Marland: No, we just voted on the "current," didn't we?
Ms Lankin: No, that's been deferred till after lunch, Ms Marland. We just voted on a different amendment for the second paragraph. It is the addition of a new sentence at the very end, which reads, "Officials also did not provide predictions for medium- and long-term expenditure and revenue numbers."
Mrs Marland: Thank you.
Mr Grandmaître: Mr Chair, on a point of information: If we're so concerned about changing one or two words of this report, I think Ms Bassett did make two changes in the first paragraph. "This growth was led by exports, which increased at a 10%...." We made her change it to 9.8%. Is this answered, or was this brought in this morning? Also, "99,000 jobs," which was changed to "100,000 jobs": Was this answered, or was it changed this morning?
The Chair: Could I ask Miss Drummond if she could respond to that.
Ms Drummond: On the 99,000 and 100,000, officials on the day gave both numbers, and I actually wasn't certain which one was accurate, and I didn't have a chance to check with the officials.
Mr Grandmaître: So you gave both.
Ms Drummond: But both are on Hansard, yes.
Mr Grandmaître: How about the 9.8%?
Ms Drummond: The 9.8% is actually in the Ontario economic accounts from January 1996. I hadn't seen it. I didn't calculate the numbers myself, so it was off by the two tenths of a per cent.
Mr Grandmaître: Thank you.
The Chair: Now, we have Miss Bassett's original amendment, which is an addition of a paragraph at the end of "Economy," which she read into the record. Is there any further discussion on that?
Ms Lankin: Sorry, on what?
The Chair: On Ms Bassett's original amendment.
Ms Lankin: The big paragraph to be added?
The Chair: The big paragraph she wanted added in.
Ms Lankin: I understood that was being deferred until the amendment that I proposed which looked at per capita cost of delivery of public services, until the government members could discuss that, and Ms Marland asked for a deferral. So you can't deal with the main motion until you deal with the amendment.
The Chair: We'll defer that, and that will be deferred until after lunch?
Mrs Marland: Yes, please.
Ms Lankin: From what I understood, it was the request.
The Chair: I have no open motions on the floor at this point, other than those deferred. We will move on to further discussion on page 1. There being none, can we move to page 2? This is a minor victory. Are there amendments or discussions on page 2?
Ms Bassett: I would like to insert some explanatory material. If you look on the fourth line, after "as if it had been upgraded," we want to add, "In particular, the witness noted that the interest rate differential had narrowed between US dollar Ontario bonds and US treasury bonds reflecting the market's increased confidence in Ontario's current fiscal outlook. In other words, Ontario's debt now trades closer to an AA instead of previously at a low single A." I would like that to go in. I've got three, so I don't know whether you want them all to be read now, or do you want me to --
The Chair: Let's deal with one at a time, shall we?
Ms Bassett: All right.
The Chair: Comments on Ms Bassett's motion?
Mrs Marland: It's said in the February 15 Hansard, if you want to check.
The Chair: Ms Lankin?
Ms Lankin: No, I don't need to check. I remember what Ms Croft said very clearly. I'm just wondering, are we going to be going through and picking out -- the prepared report that you have in front of you: Is this going to be just highlighting all of the sort of partisan positives, and what are you going to do with the people who came forward and were negative? Are we going to see deletions from this?
Ms Bassett: We're expecting you to put those words in.
Mr Silipo: Oh, no, that's your job too, Isabel.
Ms Lankin: Why don't you just do a minority report on your own? I mean, this is --
Ms Bassett: We've got a lot. You haven't had time, as you said when we sat down, to read the report.
Ms Lankin: Not in its entirety, but I've been reading ahead here.
Ms Bassett: If you read it through, you will see, if it favours any particular side, it represents many of the groups who would be social activists or whatever that are not in the fiscal side. They're very well represented, I feel. But since we happen to be talking at this particular point about the fiscal side and tax cuts and that, you don't see those groups particularly here. If you turn ahead a page, you do see the United Steelworkers in a big way. I think it has been balanced, thanks to Alison. So that's why we added that, just to flesh it out. It's an interesting comment. If people want to hear the whole story, sometimes one little bit isn't enough. You have to sort of explain what the whole picture is. So that explains that.
1040
The Chair: Further comment?
Ms Castrilli: I don't think Ms Lankin's point has been answered. The question was, given that the report now appears to be a summary of the witnesses who came before us, is it your position now to introduce a whole lot of information which would change the balance that we find in this report?
Ms Bassett: Can I answer that, having worked on it considerably? It is not aiming to change the balance; it is to make it be more explanatory, to flesh out. As you know, when you write anything, the first draft is very rough and you have to rejig things. There are things in this report where you talk about the Royal Bank in one part and come down somewhere else and we've put them up together if they're talking about the same point. That is the natural process of writing. This is what we're doing. When somebody raises a point, as the Bank of Nova Scotia person did, we are adding what the point was about. Sometimes it's not made clear enough, in our view.
Mr Carr: It's what they said.
Ms Bassett: And it's totally taken -- as Mr Silipo said earlier today, "Let's use the material that was presented to this committee." This is all material that has been presented to this committee.
Ms Castrilli: I guess we'll see as we go through it if that's really the intent.
Ms Bassett: Yes, and, Ms Castrilli, as you understand, on the beginning part, the people who made the strongest statements on growth and uncertainty happen to be in the fiscal area: banks, Canada Trust. They're not going to be the social service agencies, which in the latter part of the report predominate by far. And maybe that's why. It's through no choice of ours.
Ms Castrilli: We'll see as this unfolds.
Ms Bassett: Okay.
The Chair: Shall we call the question? Are you ready for it? Those in favour of the amendment? Those opposed? The motion carries.
Ms Lankin: Although I don't have that in front of me, I would like to move an amendment which would follow on, because it deals with the witness from Canada Trust. It would be to find the appropriate wording -- I don't have it written out -- that would indicate that the witness from Canada Trust also admitted, however, that markets do not take into account the quality of delivery of health care services or education in the classroom or neighbourhood safety.
Mrs Marland: I'm at a real disadvantage, and I think we all are, that we do not have the Hansard in front of us. I think it's terribly important, if we are quoting witnesses who were before us, that we can all see that -- I'm not questioning, Frances, whether they said that.
Ms Lankin: Or whether they said what Isabel said.
Mrs Marland: That's right. I think it's terribly important for us to have the Hansard so we can see -- if we're going to add something to what Canada Trust said, I'd like to see what they said.
Ms Bassett: That's a good point if you want to put it in, but the fact is maybe the placement doesn't go there, Ms Lankin, because we're talking about growth in that particular part.
Ms Lankin: No, we're talking about what Canada Trust said and markets and the way international markets were treating Ontario's debt and the considerations, which you've expanded on, what the considerations were. My question to her in terms of the markets was about do they look at these other things, and she admitted in fact they don't. So it does get in there.
Ms Bassett: It kind of flows on.
Mrs Marland: But there is a section further on in the report on other issues, and maybe those two areas that you're referring to -- in fact there is one that it deals with employer health tax. But if you're relating it to health issues, maybe that's where it should go and still quote Canada Trust. There were two things you mentioned, Frances, that she had said.
Ms Lankin: Health, education and community safety. I'd like to see the Hansard too, but I believe those were the three areas that I raised with her. I know health and education were for sure.
Mrs Marland: There's a section on colleges and universities, and there is a section on schools, so maybe it's there that you want to put her quote. There's a section on hospitals.
Ms Bassett: Why don't we get the quote and deal with it first thing after lunch?
Mrs Marland: There's a section on health.
The Chair: Are you suggesting that we defer the motion until we can check Hansard? This is the motion that was made by Ms Lankin.
Mrs Marland: There's a section on community services on page 36 as well.
Ms Bassett: I think we have to defer it. We can't put it in until we've seen it.
Mr Silipo: We're putting yours in without seeing it.
Ms Bassett: I can send this over to you. I've got something.
Ms Castrilli: That's not Hansard.
Mr Silipo: On a point of order, Mr Chair: I think it's important again, because this is the beginning of this process, that there is a sense of trust that we all are indeed honourable members and that when we say something was said we're not lying, that we actually believe that was said. I have no problem in believing Ms Bassett when she said she wanted to put in something else that the witness said. I don't see why there should be any problem in believing Ms Lankin when she says this witness also said the following.
If we need to get the words 100% correct -- that I think we all agree with -- that's what we have legislative research for. I'm assuming that as we go through all of this, if we are in fact working on the assumption that what we want to have in this report is to reflect what was said to us, as legislative research goes back and does the wordsmithing, they would also doublecheck and make sure that what we are putting in as additions reflects what was in Hansard.
We can do that or we can have everybody come here looking at Hansard, have 15 members of the committee going through Hansard. I think it would be more useful to let staff do their job, but it has to be based on the assumption that when we say we think something was said, we believe each other, that that was the case.
Mrs Marland: I'm not questioning Ms Lankin's recollection in this case. I'm just saying that frankly, I don't know how many deputations we had, but I cannot recall what each deputation specifically said. It's not that I don't believe Frances. I'm just saying that you're asking me to vote on an amendment that Frances is making, and the same thing with ours.
Ms Bassett: It's not the same with ours, because we have typed it out.
Mrs Marland: Just a second. I was just going to say that with ours we have given you the date of the Hansard quote. Maybe we have to recess until we get the Hansards, but the point is, I'm not going to vote against Frances's motion if it's what Canada Trust said, and I don't expect the opposition to vote against our inserts and revisions to this draft report if it's what was said. We'd look pretty foolish just voting back and forth without knowing that's what the Bank of Nova Scotia said or that's what Royal Trust said.
It's not like we're all here and we've all been off for two weeks since we dealt with this. We've all been on the road with another issue before this committee. That's the reason we're all sitting here this morning without a copy of Hansard in front of us. It's not our fault that we're here without that tool, but to tell you the truth, we should have the tool if we're making the amendments based on what somebody said.
We can make amendments based on our interpretation, if that's the way we want to word the amendment. I'm simply saying let's do it professionally, and the way we can do it is to be able to say -- this is what Frances was doing, actually. She was making an addition to what Royal Trust said. It may be that she's absolutely right, so I'm going to vote in favour of that motion if that's what they said, but I don't want to do it in the absence of having Hansard in front of me.
I guess we're all pretty sloppy because we're here without the Hansard, to tell you the truth. I'm sympathetic to the fact that Frances at the beginning said very honestly and openly she hadn't been able to read this report. She just got it this morning. She's been on the road for two weeks as well. So we're at a bit of a disadvantage, I think.
Ms Bassett: Well, I don't think --
The Chair: Excuse me, Ms Castrilli was next on the list.
1050
Ms Castrilli: It strikes me that there are 41 pages. We spent an hour and a half on the first one, and with the limited time at hand, we're not going to get through this report. Could I be of some assistance and say to you, Chair, that in order to save time we subject any of these amendments to looking them up in Hansard. In other words, we could preface virtually every amendment subject to being confirmed by Hansard so that we don't have to get into these kinds of discussions over every single amendment. We all want to be accurate. I think we all trust each other. I took copious notes. I could probably find Canada Trust in my notes fairly quickly, but it's not the same as having Hansard. Alison is here to help us with that. Let's just agree that any of the suggestions we make, any amendments we make here are subject to be confirmed in Hansard, and move on. Otherwise, we will not finish this report.
Ms Bassett: I would agree with that to a degree. I certainly agree with what Ms Lankin says, and I would have put it in if she could read it out and I would know. I think it's difficult to say you're going to agree with something if you have a vague idea without it being read out word for word. That's the only reason I was hesitant at the beginning. But anything that could be read out I have no trouble with.
Ms Castrilli: I don't disagree. I just think it's going to take too long if we're going to quibble about every single amendment that we make. I think we should simply agree that we're going to check out the specifics of each witness.
Mrs Marland: And then come back to it.
Mr Carr: I'll make a quick suggestion. My only problem with that is that Alison will spend probably all night doing this, looking up in Hansard. If we're content in knowing that some of the groups were opposed to the government's position and some were supportive through the report as it is, as Alison has tried to reflect it, if we can agree and go through that fairly quickly, maybe where we can spend the time debating and disagreeing is over the recommendations. Recommendations, I think, will be where there are contentious issues about whether we should do the tax cuts or not.
To get through this and to write the first part, my suggestion would be that we wouldn't have too many inserts other than what Alison has reflected, other than if there are some changes of a 10% to 9.8%, if it was factually wrong, through no fault of Alison's. If we could go through that part quickly, and this is getting along with what Tony said, then we can get the front part done. Then when it comes to the recommendations we can spend the time debating, "Should we go with the tax cut, shouldn't we?" and so.
Just for those who weren't here last year, that's what we did in the past. The front part reflected criticism of the government, it reflected support of the government, give or take, whether it was 50% or whatever. Let's get that part behind us and then, when we get to the recommendations, we can say the arguments. If we do that, then we will at least have the front part done, and at the end of the two days we can probably agree to disagree on the recommendations and then do our own minority report.
The way we're going, we won't even get a summary of what happened. I think that would be wrong, because then the presenters will have come in and we wrangled and didn't even get a pretty good consensus. I trust the researcher in a balanced way and in a non-partisan way to reflect what came forward in the 38 pages that she has here.
If we could go through it and not make major amendments, for want of a better word, both from the government and opposition side to score political points on -- we'll save that for our recommendations -- then we can get the first part of the report written, which is what the public said, give or take, some good, some bad against the government, and then get down to the real specifics, which this whole committee is all about: the committee's recommendations to the government. Then we can wrangle and go back and forth on each point. Would that be helpful at all?
Ms Lankin: I think that's extremely helpful. If I could just have your attention for a second, my last suggested amendment is directly in response to Ms Bassett's suggested amendment. I think your approach makes sense. I actually trust that, as I had a chance in going through this and scanning through it quickly, there is a fair reflection of all sides that were presented and I don't think that it is necessary for us to quibble over it.
But I suggest to you that if you're going to make all of these amendments, suggest amendments for insertions, as Mr Carr said, which I think are designed to score political points, then I will be -- I've got Hansard on its way down here right now -- flipping through and I will be moving amendments to do the exact opposite. We will have a whole series of motions that we'll have to deal with, all of which the government will take one position on and the opposition will take another, and there will be a political story to be told about how you would put in your own quotes from witnesses but not the other quotes and it becomes a political document. I agree with Mr Carr's suggestion. I think the real meat of discussion should be around the recommendations and not around the reflection of the presentations that have been put before the committee.
Mr Carr: If I might just add, and I'll lay everything on the table, the opposition side, in justification of their recommendations, can then quote selectively from people and we can quote on what we've heard from people based on our recommendations. But in the past, in the last three reports the beginning portion was a reflection of what the public said. It was non-partisan because it was the best reflection of the researcher who did it. I think if we do that, then we can spend the time and move forward.
Having said that, as we go through the report, if there is the odd mistake that has been caught by people -- I mentioned that 10% and 9.8% -- we could speed this up and go through. Let's debate that rather than having all of what Hansard has said, because I can tell you if we start going back and looking at Hansard, our researcher literally won't get the report done because she will be spending all night going back, looking up. That wouldn't be fair to Alison, I don't think.
The Chair: Should we proceed through the report, then, on those -- what should we call them, technical amendments? -- non-technical amendments, I suppose.
Ms Bassett: What does that mean, then?
The Chair: Non-argumentative, I think.
Ms Bassett: I know that and I agree with the tone of where we're going and with what Mr Silipo said at the beginning. But I feel strongly that we come back to the beginning, when we look at the fiscal side, and we don't have any of those facts. That's why I moved that they were there. I think there are some cases where we don't have the facts that we need. I just wonder if that means we're not going to have any of these and we're going to go with the report as is.
The Chair: For the committee's information, we have a copy of Instant Hansard with us that Alison can thumb through.
Mrs Marland: It is important, and I think the opposition recognizes -- I know the opposition recognizes -- it's important that the report reflects what the deputations brought to this committee. The amendments that we have moved so far simply are reflecting what is in Hansard. I agree with Mr Carr that probably the greatest debate will be on the recommendations, and it should be. However, I'm not happy to leave the preamble of the report without the corrections that we needed. If you want to move to the recommendations and discuss them first, we can do it. But it doesn't mean that the changes we would like in the preamble are not dealt with. If you want to deal with those on Thursday and make your counterrecommendations, amendments to our amendments, then we'll have to do it. But there's a lot of work to be done.
Ms Bassett: This is a suggestion, and I'm new. It seems that, what everybody has been saying about the arguments and that which we'll be getting into, in order to have a productive meeting, if we were to start with the recommendations, if you think that's feasible, and then if everybody who had inserts or addenda tabled them and we sent them to the members of the committee so you could look at them and they wouldn't hit you and we could look at yours, we would see where they were going to go. It's much more meaningful to the committee members, not just to be given something. I understand that.
1100
I have several additional points that I think should be brought in. I'd like you to see them at least. I know it takes a lot of time to get through, but I would be happy to give them to you, and then if you wanted to turn them down after we'd done the recommendations. In talking around, and the people who have been here longer would know of course, sometimes committees don't get very far through the report because they end up arguing all along, so maybe we should start with recommendations.
Mr Carr: Just for the new members, and it's getting off a little bit what Isabel said, but so everybody knows, page 33 of the last report will give you an indication of what has happened in the past as a specific example.
Page 33 of last year's report, which we got through and then we haggled over the recommendations and went our own way in the dissenting report, said, "The issue of long-term care can lead to discussions about a continuum of care." They talked about Bill 173 "was supported by some for the continuum of care it will provide. On the other hand, critics described it as a dismantling...," and it goes on and criticizes it.
What the reflection was in the report of what we heard from the people, and I remember this clearly, was that some people were supportive of it, and the report said it was supported by some, then also said it was criticized by some, which it was. That's an accurate reflection of what happened when people came in.
If we write the report saying that, and there may be some people and I'm sure there were plenty that came in and said, "We disagree with the tax cut," when we get to that portion we could say some people were opposed to the tax cut and some people were supportive. That would be an accurate reflection. Then in the recommendations, as each of the groups go through, and I'll throw this out, the NDP may say, "We're not going to go with the tax cut because XXX said this," and we will say we're going forward because of XXX, but in the report -- what has happened in the past is what happened on page 33 -- each issue was accurately reflected, that some people supported and some were against.
Otherwise what will happen, and I think we're heading this way, is we won't have any report on what happened from the people that came forward, and all we will do then is go into minority reports. This should be non-confrontational of what we heard, and we can expand it further where we need to justify what we're doing, and the opposition can expand it.
If we go that route, we will at least have a report, and I will say this, that it didn't help the Minister of Finance last year when it said some people came in and supported, some were against, but that was an accurate reflection of what we heard. It is critical of the government and it's supportive of the government, and I think if you took in balance everything we heard, there were some people supportive and some people critical. That would just be my suggestion. It's page 33 of last year's report, Ms Marland reminds me.
The Chair: Further comment? Is the proposal that we move to the recommendations?
Ms Lankin: No.
Mr Carr: That was before me speaking. That's what Isabel said.
The Chair: The proposal is that we continue through the report.
Ms Lankin: I agree with Mr Carr's approach.
The Chair: Further discussion on page 2?
Mrs Marland: You are in a position on page 2 where Frances has moved an addition as to what Canada Trust said, and I suggested that we wait for Hansard. I would move that we table her amendment until we have Hansard. I may be in favour of it.
The Chair: All agreed we table Ms Lankin's motion until we have a copy of Hansard available? We do have a copy of Hansard here. Is it appropriate to proceed with that?
Mrs Marland: No, I think what we need is to have all of us with our copies this afternoon. It would be faster and it's better than having it read to us.
The Chair: Then we will defer, with agreement. Is there any dissent? No.
There's also a motion from Ms Bassett on the table regarding the fourth line of the first paragraph. Does that meet the same qualifications? It's her reference to the AA credit rating. That will also be tabled until we have Hansard.
Ms Lankin: Mr Chair, just on a point of order: I think technically you already took the vote on Ms Bassett's amendment. I am in agreement with you that in fact it should be treated the same as mine and Hansard should be checked, but technically you already took a vote on it, so I think you need the committee's agreement to void that vote and revisit it this afternoon.
The Chair: Agreement? Thank you. Any other comments on page 2?
Mrs Marland: Have we done the quote for the Bank of Nova Scotia on page 2? No, we haven't. Halfway down the paragraph -- actually Isabel has her report highlighted and we're going to use the reference: "The Bank of Nova Scotia made a more general comment about market confidence."
Ms Bassett: Are we going to proceed?
Mrs Marland: Yes, we are, for the time being. What we're doing is, if it refers to Hansard, we're just tabling it until we all have a copy of Hansard.
Ms Bassett: Okay. This is the second insert then. We've already done the first insert.
The Chair: Yes, it has been tabled until we check Hansard.
Ms Bassett: The second one -- and I'm happy to circulate these to you after lunch; I'll get them all Xeroxed and show you: "The Bank of Nova Scotia made a more general comment about market confidence," and then I want to add, "In particular, the bank's submission noted that Ontarians are already experiencing part of the payoff from the retrenchment of the public sector. Interest rates are trending lower, so yields are still very high relative to the underlying improvement in inflation." That's page 6 of the Bank of Nova Scotia presentation.
Mrs Marland: Do you want to table that?
The Chair: With the committee's agreement, we will table that comment.
Mr Silipo: Mr Chair, I'm finding this just a tad confusing. I think we're getting, with all due respect, different approaches coming from the government side. I thought, from the basis of the last discussion and the suggestion Mr Carr had made, we were going to try in effect to have in this first part of the report just a pretty straightforward rendition of what was said to us, rather than trying to sort of pad the report along with quotes that might on the one hand, more support the government's view or on the other, more support the view of the opposition parties.
What I'm seeing from Ms Bassett is a different approach in terms of putting more references in here, the veracity of which I don't doubt, but I think it's a question, do we want to go through and take out from each presentation those things that tend to make the point that the government wants to make or do we want to just try to give a pretty straightforward, overall summation of what was said and then deal with the nuts and bolts later on in the recommendations? I just think that, yes, we can table all of these, but we haven't resolved the basic problem.
The Chair: With the tabling of them, there will be written copies coming along?
Ms Bassett: Yes. I understand what you're saying. I had to go out to see if I could get them Xeroxed for you, and then I guess you voted not to have them. I'm happy to give you all these things, which we feel add coherence and balance to the presentation. We're happy to look at anything that you have that you want to put in, and then we could move forward the way Mr Carr has suggested, which I would be happy to do. But I feel that the report would be very thin indeed if it didn't have these additions to it, as I'm sure you will and Frances will when she has time to read it and think of some of the good things that she wants particularly to add.
Mrs Marland: The point is, it's only a draft. That's why we're working on it.
Mr Silipo: I'm not arguing with that. Speaking only for myself, I would certainly be inclined to resist the temptation to try to pad the report, if I can use that common phrase. I think that has to apply all around if we want to get through this in the two days we have allotted to the committee. But if Ms Bassett wants to simply tell us what those are and then we'll just table them one by one, that's fine. The other would be to just simply go through, deal with the technical changes that we have in here, and Ms Bassett could simply give us a copy of those amendments that she has for us to look at this afternoon and we can deal with them then.
Mr Wettlaufer: With all due respect, Mr Silipo, I don't believe that what we're proposing here is to pad anything. It's a matter of clarification. Whether it be business or a university paper or anything else, you do want to have as much clarification as possible. Of course I'm not as experienced in this political arena as you are. Nevertheless, I don't believe that we should hearken back to past political experience necessarily, we should just get on with the job and do it properly. If that means full clarification, then why not do it?
Ms Castrilli: I would prefer a process that would be as simple as possible, and this process doesn't appear to be. It would be very helpful if Ms Bassett were to distribute her comments and we could look at them. I think to do it this way is just a hopeless exercise, particularly with the Bank of Nova Scotia. If you look through that report, you will see that we might want some things in there that say the opposite or at least give a fuller picture.
Ms Bassett: You will.
Mrs Marland: And that's fair.
Mr Wettlaufer: That's what we're saying.
Ms Castrilli: Precisely. Whether that's padding or not, I'll leave to someone else to decide. But to deal with these things in the abstract, with you reading them out to us and us trying to anticipate what our response might be and what we should be adding, is just a fruitless exercise. I suggest that we receive those comments first before we proceed much further.
Ms Bassett: I agree.
The Chair: Ms Bassett, would you be prepared to table your comments in a document?
Ms Bassett: I would be prepared to table them as soon as lunch break is over, or I could get them even sooner. I know what Ms Castrilli is saying. You can't just get a whole bunch of comments; you need time to look at them. So everybody will have them after lunch.
Mrs Marland: Could I suggest that we just take five minutes.
Ms Castrilli: Could I move that we adjourn, Mr Chair.
Ms Bassett: I was going to suggest that.
Ms Lankin: I was going to suggest that if Ms Bassett can have copies of her intended amendments produced, we receive those and adjourn and come back at 2 o'clock. We would be in a position to move through them a much more orderly fashion with any suggested responses that we want to make prepared at that point in time as well.
Ms Bassett: I think that's a great suggestion.
The Chair: Is there agreement?
Mrs Marland: So we'll agree to get them to your critics' offices and you can distribute them.
The Chair: Would you circulate one to the clerk as well, please.
Ms Bassett: And to Alison, the key person in this.
The Chair: The committee will stand in recess until 2 o'clock.
The committee recessed from 1112 to 1400.
The Chair: I call the meeting to order. I would remind the committee that we have two days scheduled for the writing of this report. It would be nice if we could deal with the major issues and not get tied down too much on the details. The legislative researcher and writer will take her best shot at rewriting the report and highlighting those changes. We will then be able to go over those changes again on Thursday, I believe. Perhaps we'll take another stab at it. I believe we were on page 2, having passed over page 1. There were three motions, I believe, which were deferred until after lunch. Are we ready to look at those issues, or shall we continue on?
Mrs Marland: From page 1, we had deferred the addition of a whole list of items. Do you all have a copy of our --
Ms Castrilli: We do.
Mrs Marland: Okay. So that whole "In the past 10 years" all the way down to "Ontario's public debt interest." There are six items to be added to page 1.
The Chair: Do you have a copy for the clerk?
Mrs Marland: I'm sorry, we didn't give you a copy? Here's one.
The Chair: This handout deals with the amendment on page 1 that was moved by Ms Bassett. Discussion?
Mr Silipo: I'm sorry, Mr Chairman, where are we?
The Chair: I'm afraid we've slipped back to page 1. It is the long addition at the end of "Economy" and just prior to "Expert Witnesses and Economists."
Mr Silipo: So the government members intend to place the amendments we've got in front of us?
The Chair: That's my understanding, yes.
Mr Silipo: I just ask because I've heard at least three different versions since we recessed at 11 o'clock. That's the current position, is it?
The Chair: That's my understanding, Mr Silipo. I'm proceeding to conduct the meeting on that basis.
Mr Silipo: I hadn't seen these until I walked back into the committee room.
The Chair: I understand they weren't available until just now.
Ms Bassett: If I can explain, what happened was that we decided, really following your suggestion, that we would pare down as much as we could, and we started working away to pare down our suggestions for changes, and it seemed to take up the time. As we were doing that, we got the idea that we would ask you if you were interested in forming a committee that could look at these really just technical suggestions with Alison, a non-political committee, and meet this afternoon instead and put them in, and then we would start with a clean draft. But I understand from Mr Phillips and Annamarie Castrilli that they're going to be at a conference tomorrow and the next day and they don't have the staff to do it today. And Ms Lankin, I tried to get you but --
Ms Lankin: You were unable to.
Ms Bassett: Yes, but I did explain to your LA.
Ms Lankin: I got the message. Thank you.
Mr Spina: You were in your office, though, weren't you?
Ms Lankin: No, I wasn't. I had a luncheon meeting and I went to my luncheon meeting.
Mr Spina: Because last time we said we couldn't get you, you were in your office.
Ms Lankin: That's right, I was in my office last time. Sorry.
Ms Bassett: I can understand the Liberal point of view, and I don't know what Ms Lankin's and Mr Silipo's is. But it's not going forward anyway if the Liberals don't have the staff or the time because of their conference tomorrow.
Ms Lankin: The suggestion would have been that this afternoon we meet in a subcommittee to try and work through adding some of these things to the report?
Ms Bassett: We thought that one of the ways to make things move forward on these basic changes in the draft to a draft 2, moving stuff around in the report a little bit, which some of our suggestions are, was that Alison, with a representative of each of the parties, non-political, could sit and do them. We're not hiding what we're asking to do, just as you wouldn't with what you're trying to do. It's a matter of putting them on paper, that's all. I thought it would facilitate the procedure and then we could start on what the real wrangling probably will be, philosophically will be, when we get to the recommendations.
Ms Lankin: We would be in agreement with that approach, but if it can't be accommodated, we can do it here in this room.
Ms Castrilli: We agree with the approach. Our problem is one of timing. We just can't do it.
Ms Lankin: This afternoon? Does it have to be non-political? You're saying having staff here with Alison. It could be one of the committee members from --
Ms Bassett: Yes, it could, but I don't think that was the problem with Mr Phillips. I think he wanted legislative staff who could be looking up certain things he wanted to put in and he felt he didn't have them available, and then tomorrow he wouldn't be able to do it because he wouldn't be there. I said he could do it tomorrow. It is short notice, I certainly understand. It just came to me with the morning's developments.
Ms Castrilli: We're simply not available for the next day and a half. That's the problem.
Mr Spina: Aren't we supposed to be drafting this report at a later date? In other words, that's not going to happen this Thursday. You mentioned, Mr Chair, that there are a couple of days set aside to actually do the report?
The Chair: Today is set aside to do the report and Thursday is set aside to do the report.
Mr Spina: There's no other date beyond that?
The Chair: Not currently scheduled.
Mr Spina: To accommodate Ms Bassett's suggestion and also because the Liberals are tied up for the next two days, would it be reasonable to suggest -- do we have another day so we could defer Thursday? If the subcommittee met on Thursday and the committee met as a whole to do the draft at a later date, is that possible?
The Chair: My understanding is that that has to be decided by the House leaders if we were to have an extra day.
Mr Spina: That can't be done by this committee?
Ms Lankin: The House leaders would rarely deny a request from a committee for an extra day. This is not a legislative bill.
The Chair: I suppose it becomes a timing issue for the government.
Ms Bassett: It's just that everyone's so busy, it makes it difficult to --
The Chair: May I suggest that we press on with our process and see how far we get today.
Ms Castrilli: What is the process we're going to be following?
The Chair: We have a proposed amendment in front of us now dealing with page 1. I suggest we review that proposal and, all willing, we could insert it into the report. We could then move to the motion on the fourth line of page 2 that Ms Bassett moved this morning. Then there's a third motion on the Canada Trust comments in paragraph 2 of page 2. I believe, at the conclusion of that, Ms Bassett had another amendment -- which we haven't been presented with yet, but she said she had three on page 2 at one point in time this morning -- and we could move to that. Is that a start?
Ms Bassett: Yes.
1410
The Chair: Is there any discussion on the proposed amendment you have in front of you on page 1? Let's refer to this as amendment number 1 for clarity.
Ms Lankin: I'm still trying to relate this to this morning's process. We all recognize that we're now dealing with it in writing, which we weren't before, but if you recall, I had requested, in addition to the statistics here, the information with respect to per capita cost of public service delivery. My apologies in that I can't remember where that information was presented to us as a committee, but I know that during the course of the introductory comments from the Finance minister and/or the parties, that information was put forward. I think that also is an additional and useful benchmark with respect to fiscal indicators that you're trying to highlight in this section.
Mrs Marland: Can we agree that when the quote you're looking for is located in Hansard, if you're asking to have it added, our research officer just add it at the end of this list of six sentences we're asking to have added. Is that okay, Frances?
Ms Lankin: I guess it is. I'll have to go through and find out whether it is explicitly stated in Hansard or whether it was on written materials that were provided. I don't know which. I'll have to do some work to try and find that.
Ms Drummond: It is on Hansard. I'm afraid I have the draft Hansard, so I don't have a good page reference; 1115-1 is what I have.
Ms Lankin: What day?
Ms Drummond: On the 5th; the minister's presentation. It's about the third or fourth page of his presentation. I don't know if this is the paragraph you were looking for, but he said:
"While Ontario had the third-lowest per capita provincial spending in 1993-94, consolidated provincial-local spending in Ontario for 1993-94 was $6,753, the second-highest of all provinces, exceeded only by Alberta."
Ms Lankin: I think that's what gave rise to my question for a comparative table on consolidated debt as well, because we only had a provincial debt comparison, not consolidated municipal-provincial. It is the individual per capita spending of the provincial government statistics, given that all the rest of this is fiscal information related to the province, that I would like to see included in there. In terms of the way in which this information is going to be included, will it make reference to the fact that this was part of the minister's presentation?
Ms Bassett: It should.
Ms Lankin: Okay.
The Chair: All in favour of the proposed amendment? It carries.
The second motion is at the top of page 2 of Ms Bassett's handout, lettered A. The reference is to the AA credit rating, I believe it was -- a motion by Ms Bassett.
Ms Bassett: Do you want me to explain, Mr Chair?
The Chair: Please.
Ms Bassett: If you look at page 2 of the draft report, at the end of the third line it says, "Ontario debt as if it had been upgraded," and then you add there, "in particular..." the addendum you see in front of you. It's a follow-on.
The Chair: Comments? In favour of the amendment? Carried.
Ms Lankin: Mr Chair, I have an additional amendment which I had proposed this morning that would follow on that. I'm sorry, I don't have it in writing, but it would read: "The witness, however, did admit that markets are not concerned about which programs are being cut and what the social costs of those cuts are."
The Chair: That is an additional sentence to that paragraph?
Ms Lankin: Right. If I may give the Hansard reference, it's from the Hansard of Thursday, 15 February, page F-346. In response to a question I put to Ms Croft, she said: "You're absolutely right. My perspective is vastly different than the political arena would be. A lot of what I do is talk to people who actually own the credit," and this is the relevant part, "and when you're sitting in Tokyo, London, New York, you're not concerned about which programs are being cut and what are the social costs, which is obviously something we can't ignore, but don't play a big role in the market realities."
Ms Bassett: How far do you want the quote to go? Picking up at, "The witness admitted markets are not concerned" would be the end?
Ms Lankin: I think I suggested that it would read something to the effect, and would leave it to Alison to write: "The witness also, however, admitted that markets are not concerned about which programs are being cut and what the social costs of those cuts are."
Ms Bassett: And that's it, then. Okay.
Ms Lankin: It just gives the flavour of it.
The Chair: All in favour of the amendment? Carried. I'm referring to that as amendment number 3. Amendment number 4 is listed as B on page 2, beginning with "the Bank of Nova Scotia." Ms Bassett -- I hesitate to call on you, Ms Bassett. Your voice seems to be fading.
Ms Bassett: I know. Wayne could go ahead.
The Chair: Under B, the Bank of Nova Scotia, comments? Whereabouts is that inserted, Mr Wettlaufer?
Mr Wettlaufer: Where it says, "The Bank of Nova Scotia made a more general comment about market confidence," and before the next clause, "both witnesses," we insert: "In particular, the bank's submission noted that the Ontarians are already experiencing part of the payoff from the retrenchment in the public sector. Interest rates are trending lower, though yields are still very high relative to the underlying improvement in inflation." That was taken from page 6 of the bank's presentation.
The Chair: Comments? In favour of the amendment? Carried.
1420
I'm referring to that as number 4. C will be number 5, and it also is on page 2. Comments?
Mr Wettlaufer: At the end of that first paragraph, which is, "and consumer confidence is low," we insert: "The witness noted that real per capita income in Canada is actually $155 lower today than it was when the recovery began in 1991. The witness stated that part of the reason was that job growth has been sluggish due to public and private sector restructuring and part because of higher taxes given that Ontario is a high-tax jurisdiction in North America."
That's taken from the February 15 Hansard.
Ms Lankin: I have a bit of a problem with that. It's not that I dispute that Ms Croft made that assertion, but if you will recall, there were a number of occasions -- and I can't remember specifically if I did it with Ms Croft -- when I explored this issue of competitiveness and taxation levels with a number of the presenters. In fact, in terms of the material produced by the Ministry of Finance, which I circulated, it showed that on corporate tax, on combined corporate-property-employer-payroll taxes we are quite competitive, and with respect to personal income tax, while we are higher than many other jurisdictions at the high end marginal, we're actually lower at the low-income end.
There is some real dispute about that kind of information, and if you would like to include that reference to the high-tax jurisdiction, I think it would be appropriate to include all the other information and those who agreed, when questioned, that in fact we have actually a competitive tax situation in a number of circumstances. I'd be happier if you want to make the point about the lower real per capita income; I think that's reasonable. And whether or not we have to refer to the reason this witness spoke to with respect to slow job growth -- we could just delete that second sentence in that insertion.
Mr Wettlaufer: Keep in mind, Ms Lankin, that the witness did not say it was the highest-taxed jurisdiction or anything like that. What she said was that "Ontario is a high-tax jurisdiction." There are many areas in North America which do have smaller taxes, albeit there are others that have higher taxes. She was just saying it is a high-tax jurisdiction.
Ms Lankin: I take your point in terms of the true meaning of the words. In the context of the report, the sense it gives is that it feeds into what I really believe is a misconception out there that is promoted by some people with respect to issues around tax competitiveness. I'd just like us to try and get some of the real facts on the record. I don't dispute that if we can improve our tax competitiveness, if there's room to do that -- and that may be where we have a dispute -- that's a useful thing to do. But in this context I'd like the report to reflect the varying opinions around that. I don't know if that is really critical to you in that paragraph.
I think the point you make about the per capita income is a useful addition to the paragraph. Maybe we could just drop the second sentence, because otherwise it means we'll have to be looking for the references in the Hansards for all the other comments that came forward and build them in as a counterpoint.
Mr Wettlaufer: It's just that it's generally accepted by business in Ontario today that we are a high-tax jurisdiction. In fact, I know of several businesses in my own riding that have considered leaving the province because of the tax situation relative to some of the low-tax jurisdictions in the United States.
Ms Lankin: It's not only generally accepted by business; it's generally promoted by business that we are a high-tax jurisdiction and/or not competitive in our taxation. When you listen to the CFIB and the CMA and some of the other organized lobby/special-interest voices of the broader business community, that's the position they will often put forward. What I'm saying is that on the real data and information provided by the Ministry of Finance for during your government's term in office, we can see that the perception is more perception than reality. I think it's useful for us to start to debunk that, as we are trying to promote Ontario as a place to invest.
I am aware of a number of companies that have explored other jurisdictions which they saw as perhaps being more favourable in terms of tax -- I'm thinking of the southern US states now -- and very quickly found out that in terms of additional costs for employee health benefits and other things not covered through the taxation rolls and/or social infrastructure costs and/or the reliability of the workforce, they found there were tradeoffs there that in the end they were unwilling to make, and they did not relocate as a result.
It's perhaps not worth us arguing back and forward over it. In minority reports, if we want to stress this point, we can put our own perceptions forward, but I think it serves all of us well, in terms of promoting Ontario as a place to invest, to start to get the real facts out about the fact that with respect to other industrialized states, particularly the Great Lakes states and many other provincial jurisdictions, we are very tax-competitive.
Mr Wettlaufer: I will give you that we are competitive, but I'm going to over this again. I don't see anything wrong with what it says. It says, "part of the reason was that job growth has been sluggish due to public and private sector restructuring and part because of higher taxes given that Ontario is a high-tax jurisdiction in North America." All that is is a statement of fact. I'm not saying we're not competitive with other areas or some areas of North America, but it is a high-tax jurisdiction. That is a matter of fact.
Ms Lankin: The point I'm making is that you're drawing out this one quote from Ms Croft; this is Ms Croft's opinion, and that's fine, but it will lead us to feel compelled to insert a number of other references to tax competitiveness in other areas of this report from other presenters. I just think perhaps it isn't that crucial.
I'm agreeing with most of the recommendations you're putting forward. This one is a bit of a touchstone because it is an area in dispute, I think, between governments in general -- our government and your government, the Ministry of Finance, whoever the political government is -- and representatives of the business community about what the real state of tax competitiveness is.
Ms Castrilli: I would concur with that. This is a highly contentious issue. The fact is that the Ministry of Finance has indeed published a report as lately as September of this past year which points otherwise. It does not place Ontario unfavourably in comparison to other tax jurisdictions. In fact, most indicators would indicate that it's fairly competitive.
This is one person's opinion. I think we should probably dispense with it at this stage and not have a whole lot of contradictory elements to this report, which we're quite prepared to do. For everything Ms Croft said, there are others who would dispute it. We could read into the record even the Ministry of Finance itself, and we've solicited from other witnesses during the course of the hearings. I think it just makes it just a neater report if we just did not deal with this very contentious issue. We're not in agreement.
Ms Bassett: I hear what you're saying, but this is an expert witness. It's not just one of the many people who presented. When you're looking at the financial side, there are certain people who have a lot more weight than others in terms of understanding the general thrust of what this is all about in terms of the economy. That's why we're pushing in this particular case.
Ms Castrilli: Experts will differ on this issue, obviously.
The Chair: Question? Shall the amendment stand? All in favour? Opposed? It carries.
We move to pages 2 and 3 and insert A. Mr Wettlaufer, comment? Starting with "The Royal Bank," I'm referring to it as amendment 6.
1430
Mr Wettlaufer: It would be the very first sentence, "The Royal Bank noted that there seems to be an all-party consensus across the country to get the deficit and debt under control," and then resume, "The Royal Bank discussed the effects of the expenditure cuts as presently written."
The Chair: So it's an opening sentence to that paragraph?
Mr Wettlaufer: That's correct.
The Chair: Comments? All in favour? Shall the amendment carry? Carried. B on page --
Mr Wettlaufer: This would be page 2. At the end of the second sentence where it says, "While certainty may help," prior to "Informetrica," there's the insert, "The Bank of Nova Scotia's presentation noted that Ontario is relying on cutting" --
Mrs Marland: Excuse me. Haven't we missed B under Expenditure Cuts?
Mr Wettlaufer: That's the one I'm reading.
The Chair: That's where we are now, Ms Marland.
Mrs Marland: I'm sorry.
Mr Wettlaufer: At the bottom of page 2: "The Bank of Nova Scotia's presentation noted that Ontario is relying on cutting expenditures to tackle its deficit problem, mainly because spending is way out of line with the revenue-generating capacity of the province. The bank cited a study of OECD countries that noted that countries which were successful in reducing their debt burdens cut spending and did not raise taxes. Further, governments which reduced their debt burdens cut social welfare programs and the government wage bill. Governments which did not cut spending in those two areas were unsuccessful in reducing the debt burden." Then we would resume, "Informetrica discussed...."
The Chair: Comments? Shall the amendment carry? Those in favour? Carried.
On page 3 of the handout, starting with Tax Cuts. The amendment, I believe, is on page 4, but yes, page 3.
Ms Lankin: I have one.
The Chair: You have one?
Ms Lankin: I have one.
The Chair: I'm sorry. I was on a roll.
Ms Lankin: I know you were. Actually, Mr Silipo and I would like to put forward one on page 3. This is actually very minor and very simple. At the top of page 3, it refers to the witness from the United Steelworkers of America. That actually was Hugh Mackenzie and he made it clear, when he was invited as an expert witness, that he was not there on behalf of the United Steelworkers of America. I can quote from Hansard of February 14, page F-289, in which he says:
"If I may, I'd like to correct the introduction the Chair kindly offered. I am employed by the United Steelworkers of America as the research director, but I'm not here in that capacity. I could probably give a lengthy disclaimer about the relationship between the views of the organization for which I work and the views I'm going to express today, but suffice it to say I am here in a different capacity.
"I have the misfortune to be an economist and, in that capacity, I spent the better part of four years working with the Fair Tax Commission in Ontario as the executive director and, along with our research director, Allan Maslove, was responsible for most of the drafting work in the commission report. It is from that experience and that perspective of analysis that I am coming to you today."
I would like that to be corrected to read that he appeared as the former executive director of the Fair Tax Commission.
Mrs Marland: And his name.
Ms Lankin: No, I don't think we have any names that we're putting in anywhere. It's an expert witness.
Mrs Marland: Okay. So you're just going to say "the expert witness who was formerly the executive director" da-di-da.
Mr Silipo: He was here as an expert.
Mr Wettlaufer: Ms Lankin, was he your expert witness?
Ms Lankin: Yes.
The Chair: Yes, he was.
Mr Spina: If I recall correctly, he was asked whether he was associated with the Steelworkers union and he did admit that. I can agree with the way it's referenced here, but I do believe that it was indicated that he is --
Ms Lankin: He's currently the research director for the United Steelworkers of America. He was invited as an expert witness because he is an economist and was the former executive director of the Fair Tax Commission, so that was the capacity in which he was presenting.
Mr Spina: I just didn't want to lose sight of that, Frances, because I can agree with your opinion here that it appears as if he was the witness from the Steelworkers, when in fact he was here for more than that. I just didn't want to lose sight of the fact that he also represented the Steelworkers.
Ms Lankin: No, he didn't. What I read to you was his own --
Mr Spina: Preamble.
Ms Lankin: -- comments into the record where he corrected it and said: "I am not here on behalf of the United Steelworkers. I work for them now, but I am here as an economist and the former executive director of the Fair Tax Commission." Those were his own words. I'm just correcting it from his own.
The Chair: Those in favour of the amendment? Ms Bassett.
Mrs Marland: Excuse me interrupting, I hate to do this, but I'm just reading the Hansard from this morning and I think we still have to deal with that motion about whether it was predicted 1996 or current 1996. We might as well clear this up now. I thought we hadn't voted on the "current" or "predicted" rewording. I see from Hansard we didn't. That was where we split it this morning.
So if we could go back to page 1 and just clear that up, the wording that I'm going to suggest -- because I think Ms Lankin identified that in the first sentence, "an assessment of whether predicted revenues and expenditures are on track." Ms Lankin wanted "predicted" changed to "1996," and then we waffled around about whether we should put "current." I'm suggesting that we just leave the year out and put "an assessment of whether current predicted revenues and expenditures are on track."
Obviously, because we're in 1996, we're dealing with the current predicted revenues. If that's acceptable, I think it's combining what Ms Lankin wanted and still leaves in the word "predicted," which is what we need to have, because it is only a prediction. If that's acceptable, Ms Lankin?
Ms Lankin: I don't think there's a problem with that. I was just trying to make the difference between short-term and medium and long-term. I think between all of the changes there, we've done that.
Mrs Marland: Yes, because you've got the long-term stuff at the end.
The Chair: Shall the amendment carry? All those in favour? Carried.
Any other comments on page 3?
Ms Bassett: I just wonder if Alison can clarify -- she'll have to take probably a while to find out -- what exactly Mr Mackenzie said, and if these are his exact words on lines 2 and 3. I'd just be in interested in knowing.
The Chair: "The witness from"?
Ms Bassett: He's the independent expert witness for the --
The Chair: Which lines were you referring to?
Ms Bassett: Lines 2 and 3.
The Chair: Which words?
Ms Bassett: The words "the United Steelworkers of America modelled the effect of $5 billion in expenditure cuts to finance the tax cuts proposed in the Common Sense Revolution."
Ms Drummond: What I did there was collapse together into one sentence his two assumptions for one of his models, the major model that he works with, which was that the deficit would be eliminated by, I believe, 2000-01 -- I could check that -- and that the tax cut would be 30% of Ontario personal income tax. He then, as I hope this sentence made clear, said that on that model, $5 billion in expenditure cuts would be needed. Those are all part of the assumptions for his model. There are three elements of those assumptions.
Mr Wettlaufer: Alison, he did not in fact say then that the effect of the $5 billion in expenditure cuts was to finance the tax cuts? Is that an assumption on your part, or is that what he said?
Ms Drummond: Not on my part, on his part. There are three separate assumptions: that the deficit would be eliminated by the year given, which I believe is 2000-01; that the tax cuts would be 30% of Ontario personal income tax -- as he pointed out, there are a number of different assumptions you could make as to the tax cuts -- and that expenditures would be cut in such a way as to eliminate the deficit in that year. So those are the three assumptions.
1440
Mr Wettlaufer: But not that the expenditure cuts were being made to finance the tax cuts. I think we have to be very specific about this. Could you research that? Thank you.
Ms Drummond: Okay, certainly. I thought that was clear.
Mr Wettlaufer: I think it's just necessary to be very, very sure.
Ms Drummond: Sure.
Mr Wettlaufer: Thank you.
Ms Lankin: Could you explain what your concern is? I know that Alison's going to go away and try to rewrite it, but I didn't understand your concerns.
Mr Wettlaufer: That we know exactly what he was saying in so far as the effect of the $5 billion in expenditure cuts, the reason for it or the outcome of it.
Ms Lankin: What he said, just so that you're aware, is: "To do the analysis, I assumed that the matching expenditure cuts that would be required in order to achieve a balance, along with a tax cut, would be similar to what's been announced today. I don't have a crystal ball," and he goes on to use the $5-billion figure, so he actually did put those three assumptions together much the way Alison has suggested.
Mr Wettlaufer: Okay. I'll accept that.
The Chair: Anything else on page 3?
Ms Lankin: I haven't found this in Hansard yet, but I'm wondering, Alison, if you know where it is or if you could check it. The paragraph started, "He calculated that 70% of this effect would be felt in the first year of the cuts and 30% in the remaining years." I have a handwritten note that suggests that he was talking about the actual stimulative effect of the tax cut, as opposed to the expenditure cuts.
Ms Drummond: I might have misread that.
Ms Lankin: I'm not sure that I'm right on that, but I think that might be the case. If you could take a look at it, that might need some clarification. I'm trying to find it right now in Hansard.
The Chair: Other changes on page 3? I believe the next amendment --
Mrs Marland: We do have another change on page 3. I don't think we have the witness from Canada Trust.
Mr Grandmaître: What page are you on?
Mrs Marland: Page 3 of Alison's report, "The expert witnesses...," at the bottom --
The Chair: Tax Cuts?
Mrs Marland: Yes. Isn't this where we put the Bank of Nova Scotia?
Interjection.
Mrs Marland: Okay. If you look at page 3 of our handout, under Tax Cuts -- oh, I'm sorry, it says page 4.
The Chair: Mr Wettlaufer.
Mr Wettlaufer: In the middle of page 3, where it says, "The Bank of Nova Scotia believes that the spending cuts that have been made will not `permanently impair the ability of the economy to recover,'" we're asking that it be inserted after the change that I previously requested under Expenditure Cuts and prior to "Informetrica discussed...."
Ms Castrilli: Sorry, are we dealing with B on the bottom of page 2.
Mrs Marland: No, I think you're on the wrong page.
Ms Castrilli: I'm not sure where we are.
Mrs Marland: I know what the confusion is. We've got "Expenditure Cuts" and "Tax Cuts."
Ms Castrilli: I thought you said "Expenditure Cuts," but you mean "Tax Cuts."
Mrs Marland: Yes, it's actually "Tax Cuts."
Ms Castrilli: Fair enough.
The Chair: Mr Wettlaufer, would you explain to us where we are? Which amendment are we talking about on the handout?
Mr Wettlaufer: It's not the amendment; it's from the report here.
The Chair: Okay, we're dealing with Alison's report?
Mr Wettlaufer: Yes, where it says, the middle of page 3, "The Bank of Nova Scotia believes that the spending cuts that have been made will not `permanently impair the ability of the economy to recover,'" if we can move that sentence to page 2, under "Expenditure Cuts," after the change we previously requested and prior to the words "Informetrica discussed some of the calculations" to improve the flow.
Ms Lankin: If I may, we're also talking about the effect of expenditure cuts as testified to by the expert witness who was the former executive director of the Fair Tax Commission. That's what he's talking about as well.
Mr Wettlaufer: But this one sentence is a bank statement which has been inserted into your expert witness statements as well as the union statements, and we're putting it back in with the Royal Bank's statement and the other bank statement.
Ms Lankin: They're all expert witnesses.
Mr Silipo: They just don't like bank witnesses and union witnesses side by side.
Ms Bassett: I think we're talking about banks and the effect of the cuts, positive, and then we go to negative, and then to come back out and say positive again, you can leave the Steel guy on an up note without somebody contradicting him.
Ms Lankin: No, you see, this is a problem, because all the way through the rest of the report it goes back and forth between positive and negative comments and it happens in our expert witnesses as well. Somehow or other, because Hugh Mackenzie now happens to be the research director of the United Steelworkers, you're lumping that, as if not an expert witness, he doesn't have equal standing with all of these other bigwigs from the banks and so you want it to flow into the individual arguments made by public sector unions and others and you don't want that separated. You want the banks somehow out on their own.
Ms Bassett: That's not how we see it, Frances. We're saying we're talking about the people who are on side and the people who are against. Normally, that's how you say. You don't jumble them all up, and if they are jumbled, henceforth we plan to change them so that you get people talking about one side and then you give the other side of the argument, pro or con. It makes more sense.
Mr Wettlaufer: Ms Lankin, if you will read the immediately preceding sentence to the Bank of Nova Scotia sentence that I was talking about, you'll find that the Bank of Nova Scotia is a contradiction of the previous statement, so I think this would fall in with what you want anyway.
Ms Castrilli: I don't have any problem with the contradiction, Mr Wettlaufer. That's what the hearings demonstrated over and over again, that there were differences of opinion with respect to the effect of these cuts. I don't think that's the issue. I would have thought that from the government's perspective, since you start on a positive note and you end on a positive note, that wouldn't have been something you were prepared to argue about. I don't really understand why you would want to move that sentence at all.
Mr Wettlaufer: This is such a minor item that I'm surprised there's any controversy.
Ms Castrilli: Well, if it's just an issue of form, then we don't have to worry about it.
Mr Wettlaufer: That's all it was.
The Chair: Excuse me. Mr Grandmaître.
Mr Grandmaître: The problem is we say "expert witnesses" and that's where we have a tendency to mix the two, the union people and the experts, if we want to distinguish the two. When we say "expert witnesses," who do we mean?
Mrs Marland: Well, you see, we --
The Chair: Excuse me, Mrs Marland, Ms Lankin has the floor.
Ms Lankin: No, it's okay.
1450
Mrs Marland: Well, just explain to Ben, because in fairness to him, he wasn't here and each caucus chose I think two expert witnesses, who are called "expert witnesses," Ben. I didn't know that term either before we started the hearings. So we did each select "our own two expert witnesses," and the other people were just deputations. Am I correct that there was a clarification?
Ms Castrilli: That's right.
Mrs Marland: That's why they're referred to this way. But to tell you the truth, I don't have any hangup with this. Let's forget this one.
The Chair: Very good.
Mrs Marland: We'll leave it as it is.
The Chair: The amendment is withdrawn?
Mrs Marland: Yes.
The Chair: Can we move to amendment B on page 3 of the handout, which begins, "The witness from Canada Trust."
Interjections.
The Chair: I'm sorry, I skipped one. It's amendment A beginning with "The Bank of Nova Scotia."
Mr Wettlaufer: We have one that's missing here. On page 2 of our handout-that's okay, we have both "Expenditure Cuts"; we go to page 3 of the handout under "Tax Cuts." The amendment is for page 4.
The Chair: We're still on page 3. If there are no further amendments to page 3, we could move to page 4.
Ms Bassett: I have an amendment to page 3 before you move on, Chair. I have a question.
The Chair: Yes, Ms Bassett.
Ms Bassett: Halfway down in the paragraph beginning "He calculated," there's a line there, "and likely to create employment and economic drag." I wonder, Alison, do you mean unemployment there?
Ms Drummond: I meant "employment" to be an adjective although I know it's not. I meant "employment drag" but I can put "unemployment," if that's correct, which it is.
Ms Bassett: Okay, "to create employment drag."
Ms Drummond: Yes, but I think "unemployment" is better.
Ms Bassett: So what are you putting?
Ms Drummond: I'll put "unemployment." I think that is better.
Ms Bassett: "and economic drag."
Ms Drummond: Yes.
Ms Bassett: Okay.
The Chair: Are there any further amendments to page 3? Shall we move to page 4?
Mr Wettlaufer: This again is one of form. We would like to take the paragraph at the top of page 5 of the report that Alison did, and that paragraph starts, "The witness from the Royal Bank said that a $2-billion tax cut" and ends with "even with slow growth," and insert it halfway down on page 4, if we could, at the end of the sentence that says "may argue in favour of income tax cuts" and prior to the sentence which says, "Similarly, the Bank of Nova Scotia believes the proposed income tax cut...."
The Chair: Comments?
Ms Castrilli: That paragraph on top of page 5, the first sentence, I think there's a verb missing. I'm not quite sure -- what did you intend it to mean?
Ms Drummond: Stated.
Ms Castrilli: Stated. Okay.
Ms Drummond: I'm being generic.
The Chair: Those in favour of moving the paragraph? Carried.
Mr Wettlaufer: Just a few lines below that at the end of the sentence which ends, "concerned about possible changes to the Canada pension plan," that we add from page 3 of our handout:
"A. The Bank of Nova Scotia did note that the tremendous rise in taxation rates in recent years has been a factor which probably dissuades business from investing in Ontario. The witness suggested that moving to a tax regime which is more in line with our major trading partners is essential towards attracting new investment and new jobs to the province." That's from the February 15 issue of Hansard.
Ms Lankin: Once again, I'm going to make the same point. Here we have the Bank of Nova Scotia putting forward its assumptions with respect to the tax competitiveness and issues of business investment. Now, interesting: Put that in the context of 1994 having been the highest record year for business investment in the history of Ontario, and put that together with the kind of information that has been produced by the Ministry of Finance with respect to tax competitiveness, and it gives a very different picture than the one which -- I would agree with you, Mr Wettlaufer -- is the perception amongst various parts of the business community, in this case, the financial institutions.
I recognize that this is in fact a statement of a witness, and if you want to put it in in that way, then I would ask, would you also agree that we put in information from the Ministry of Finance September documentation which in fact refutes the perception that many of these individuals hold and have put forward to us? The fact that they have that perception, I don't dispute. Repeating it as frequently as it appears -- as I look at this -- and you want to repeat it in this document gives some credence to a perception which we have hard, cold statistics to suggest is wrong, and gives me concern.
I would like to see if we can either cool the rhetoric on continuing to insert these assertions where they are not necessary to our overall report, or whether we can insert a balance by citing the actual tax competitiveness information provided to us from the Ministry of Finance September document.
Mr Wettlaufer: Ms Lankin, I don't think you would disagree that there has been a significant increase in taxes, particularly for small business, in the province over the last five years, and it does dissuade business from investing in Ontario. It dissuades business from increasing investment in Ontario. It's really just stating what the fact is, and the witness suggested we move to a different type of tax regime.
Ms Lankin: Look at those words: The witness suggested "that moving to a tax regime which is more in line with our major trading partners." The facts are that when you look at our major trading partners, if you look at the comparison in terms of G-7 countries and you look at the comparison in terms of the industrialized Great Lakes states, and broader within the US, overall national averages, we are competitive. In other words, we are in line with our major trading partners.
I don't dispute the Bank of Nova Scotia said those words. I don't dispute it's a perception they wish to promote as they were coming before this committee. All I'm saying is that if you, in the recommendations you're making -- this is the second one now -- continue to insert those comments which give credence to an incorrect perception, then it lends credibility to that argument coming out of our report. It needs to be balanced with the facts, and the facts are that we are competitive with respect to our major trading partners in terms of all sorts of tax comparators.
I'm suggesting either you take my recommendation from before, that we don't add fuel to this fire by putting that statement in, or we try and get a balance by putting in the actual, factual documentation provided to this committee that comes from the Ministry of Finance 1995 September report.
Mr Wettlaufer: Mr Chair, we stand by our wishes on this one. We wish this amendment in.
1500
Mr Spina: It was my understanding that this is the highest-taxed jurisdiction in North America. I stand to be corrected, but that was my understanding from what the ministry figures told us. I'd like to see those comparative numbers.
Ms Lankin: If I may remind members of the committee, I circulated them to all members of the committee. You have that. I provided you with your own copy of it because I'd referred to it several times and the ministry didn't have a copy with them. We made photocopies, so you've got that. It shows very clearly that we are not the highest jurisdiction. It compares corporate tax, it compares payroll taxes, it looks at combined property and other levels of taxation on businesses. It compares income taxes and, as I've said, it shows the high marginal tax rates; we are very high but the chart that's not there is at the low end, because we're in fact lower at the low end. We have a more progressive taxation system. So that documentation is all there.
I understand from Mr Wettlaufer's comments that you want to proceed and I don't want to belabour the point. You're going to vote on this and include it. I would ask as a general agreement from the committee that the researcher be able to compile a paragraph from the documentation from the Ministry of Finance with respect to a more realistic view of tax competitiveness which is put in as a counterpoint to many of these comments that you're including from presenters.
The Chair: Further comments?
Mr Wettlaufer: We agree to that.
The Chair: Are we ready for the question? Shall the amendment carry? Carried.
Further amendments to page 4?
Mr Wettlaufer: On page 4, two thirds of the way down, at the end of the paragraph, it says that "tax cuts are the best way to get them to spend thus stimulating demand." We would like to add: "B. The witness from Canada Trust noted that cutting taxes would provide a very powerful offset to the deep spending cuts and with very strong potential spinoff effects. The witness noted that consumers buy more when they have more disposable income which increases demand and production. This creates additional jobs, additional income and spending."
That's from the February 15 Hansard.
Ms Lankin: On this point, I would make the comment that we seem to want to repeat, almost in its entirety, Ms Croft's testimony before this committee. You already have a sentence in there which states that the Canada Trust witness had a "different rationale for quick tax cuts," talks about the insecurity around jobs and real loss of income and states that "tax cuts are the best way to get them to spend, thus stimulating demand." That already captures the same point that you're making in the next sentence you want to add. I would point to the bottom of page 4: "The witness from Canada Trust was a strong advocate of the tax cut, both to make Ontario more competitive as a tax jurisdiction and as a stimulus after the expenditure cuts." Your points are already covered and Ms Croft is referred to extensively in this section, as I understand why you would want her to be, but I think we might not want to overdo it here.
Ms Castrilli: I want to speak to a slightly different point, so if there's a response to Ms Lankin, I'll forgo until after.
The Chair: Is there a response to Ms Lankin's point?
Mr Wettlaufer: Yes, Mr Chair. We still would like the last sentence of our amendment, "This creates additional jobs, additional income and spending."
The Chair: You're deleting the first part?
Mr Wettlaufer: We'll delete the first part.
Ms Lankin: I think that's very helpful. Could I just suggest that the sentence be structured in a way that it is clear that it was the witness's opinion that, "This creates additional jobs, additional income and spending"?
Mr Wettlaufer: Yes.
Ms Castrilli: This deals with another point on page 4. Reading down at the end of the first paragraph, it says, "Similarly, the Bank of Nova Scotia believes the proposed income tax cut may help increase spending, but that analysis is difficult...." In fact, what the bank said was: "However, the lack of specifics regarding the composition and timing of a tax cut makes analysis of its net impact difficult. There is no guarantee that Ontarians would fully spend their tax saving." It goes on to say that in fact they would save. I'd like to propose an amendment to include that specifically into the body of the text.
The Chair: Is that going to be tied to the proposal under B?
Ms Castrilli: No, I don't think so. I think it would appear just before that, in the sentence that reads, "Similarly, the Bank of Nova Scotia believes...." I would delete that first sentence and add what the bank actually said.
The Chair: Before we move to that, could we finish off B, as amended?
Ms Castrilli: Happy to do that.
The Chair: Is the committee in favour? All in favour? I believe we are. Carried.
Ms Castrilli: My apologies; I thought we'd dealt with it.
The Chair: My mistake. Go ahead.
Ms Castrilli: I'd like more specific wording in that sentence, as I indicated, to reflect precisely what the Bank of Nova Scotia said. You'll find that in February 15 Hansard.
The Chair: Comments from the government?
Mr Wettlaufer: Could you go over that again, please?
Ms Castrilli: Sure. The sentence now reads, "Similarly, the Bank of Nova Scotia believes the proposed income tax cut may help increase spending, but that analysis is difficult...." I think we should say: "The Bank of Nova Scotia noted that the lack of specifics regarding the composition and timing of the tax cut makes analysis of its net impact difficult. There is no guarantee that Ontarians would fully spend their tax saving. Residents may opt to spend less and save more in this uncertain environment." You'll find that in February 15. I'm dealing with the text of the submission, but it's in here as well.
Mr Wettlaufer: Do you want to show us what the specific wording is? You say you want to take out "believes the proposed income tax cut" --
Ms Castrilli: It's a direct quotation from the bank's submission.
Mr Wettlaufer: It's replacing what words?
Ms Castrilli: That first sentence, "Similarly, the Bank of Nova Scotia believes the proposed income tax cut may help increase spending, but that analysis is difficult...."
The Chair: Is it replacing that sentence or is it in addition to?
Ms Castrilli: No, it would be replacing it because it's more specific. I'm looking for the actual citation. I have the text of the presentation, but I've not found it in Hansard as yet. I'm sure Alison could find it.
Mr Wettlaufer: I believe that the report, as written by Alison, is correct. I wonder if we could add Ms Castrilli's quotation.
Ms Castrilli: I'd be happy to have it added, if that's what you prefer; sure.
The Chair: All in favour of adding the amendment? Carried.
Mr Silipo: There are two additional points which I'd like to suggest be added. I was looking to see if there was a good place to put both, but I'm not sure that I have that, unless we wanted to put them at the end of the section, simply because they relate to the combined effects of the tax cut and expenditure cuts. I appreciate that in this section we're dealing with the tax cut; the previous section deals with expenditure cuts.
They're both comments that were made by one of the expert witnesses, Mr McCracken from Informetrica, who, as I understand it, at least originally was in fact an expert witness chosen by all three caucuses. He makes two points, and I can give the quotes, but I think that there'd have to be some reworking of the quotes because I don't think just putting in the straight quotes would be sensible, the way in which the report is written.
But the first point that he makes is in dealing with the economic impact of the tax cut as it relates to the fiscal drag. He says the main point that we "should take away is that it's difficult to see with this kind of fiscal drag" -- the fiscal drag that comes from the expenditure cuts -- "where there's anything positive that comes out of this. It's also not clear at all that at the end of the day one will see any magic worked unless one feels that somehow" our "actions will lead to dramatic changes in interest rates, something which there is no evidence for". I've paraphrased and quoted. That's Hansard, February 6, page F-44. I know that there's some reference to that in the section under expenditure cuts, so it could either be amplified there or, as I said, added at the end of this section.
1510
The second point is I think even more salient, because it deals with the relationship between the deficit and the expenditure cuts. The point he makes is:
"If you fully funded a tax cut by matching expenditure cuts, depending on how you did it, you could well be back to the same place you were with the expenditure cuts alone in terms of employment loss or even more. If you cut taxes for people who save it and don't create much economic activity from their own actions, and lay off public servants or cut back on welfare payments, which has a direct adverse effect on consumption, you could do worse. You could worsen net, even though your fiscal balance is unchanged."
I think that's an important point to balance off the information that we have in the bulk of page 4, especially in that long top paragraph that obviously reflects largely the position that some of the banks took, I think contrary to what Mr McCracken's expert evidence was. So if that could be incorporated in.
The Chair: You're suggesting that be inserted as a paragraph?
Mr Silipo: Yes, and I'm not particularly firm on where it is. If you wanted to combine both of these points, they could be combined at the end of this section, because I think they could be prefaced with a sentence that pointed out that there was this other perspective offered by Mr McCracken, or the expert from Informetrica, as we're referring to him. Or if you wanted to split them and put them in the other two parts, I don't have any trouble.
The Chair: A point of clarification for Ms Drummond.
Ms Drummond: I'm clear on the first point, Mr McCracken's point about the fiscal drag, but what was the second point that you --
Mr Silipo: The second point he's making is around the relationship, which we don't really touch on directly anywhere here as far as I can tell, between the impact of the expenditure cuts and the impact of the tax cuts having to both be weighed together. That's where I think his quote comes, in answer to a question specifically around that. The second quote is also in Hansard, February 6, page F-48.
Mr Wettlaufer: We have no objection to the two points raised by Mr Silipo. However, considering that they both deal primarily with expenditure cuts, we would recommend that you put them at the top of page 3, right at the very end of the first sentence, which ends "will worsen the already slow provincial economy."
Mr Silipo: I think the second one particularly really deals more directly with the tax cut, because it talks about the need to take into account, if you're going to be doing the tax cut, where that money is coming from to fund that. If you're having to find that money -- I think this is what Mr McCracken was talking about in the exchange -- if you're having to fund the tax cut through expenditure cuts -- that is, money that you have to find by making cuts in expenditures -- then he's saying you have to take into account the problems that generates. As he says, you're not going to be any further ahead, at best. It makes, I would argue, more sense for that second point at least to be in the tax cut portion, unless you wanted to somehow combine both sections. But I think for other reasons it makes sense to have the two parts separately, as Ms Drummond has drafted this.
Mr Wettlaufer: Is it okay to split it: the first part, which is expenditure cuts, put that at the end of the first sentence on page 3, and the second point that you raised, if we put that in the tax cuts on page 4?
Mr Silipo: Yes, I think that's fine. I think the first one deals also more with tax cuts, but I think it makes sense also including the other part.
Ms Lankin: I'm sorry, Mr Wettlaufer. I'm not following exactly where you want to insert that. At the end of which sentence on page 3?
Mr Wettlaufer: At the very top of page 3.
Mr Silipo: Before we go to the expert witness from the Fair Tax Commission.
Mr Wettlaufer: Correct.
The Chair: Do we have agreement? All in favour of the amendments being placed in the aforesaid positions? Carried.
Further amendments to page 4?
Mr Wettlaufer: Mr Chair, it's not an amendment, but it's a clarification. We'd like to know if the first sentence of the second paragraph, two thirds of the way down, is a direct quote, "In general, the idea of concentrating tax cuts on lower-income people, since this group are more likely," etc.
Ms Drummond: I'm sorry, is it --
Mr Wettlaufer: We'd like to know if that's a direct quote.
Ms Drummond: Not that I know of. It was a point that a number of witnesses made, but I don't know if it was in those exact words.
Mr Wettlaufer: I don't know if we can make that generalization. We would give you that, that was made by some witnesses, but on the other hand there were other witnesses who said otherwise.
Ms Lankin: It does say it "was advocated by those witnesses who were most concerned about the macroeconomic effects of the expenditure cuts that have been made." It does sort of qualify it.
Mr Wettlaufer: I'm not sure that's accurate. It's a generalization.
The Chair: If we're going to attribute a statement such as that, is it -- oh, I'm entering into the debate. I'm sorry.
Mr Wettlaufer: Go ahead, Mr Chair.
Interjection: It's tempting, I know.
Mr Wettlaufer: It's not a big deal, but we wanted to know. It was a matter of clarification.
Ms Drummond: Certainly the first witness who spoke to that point was Mike McCracken, so I can find Mike McCracken's exact words and reword it in that way.
Mr Wettlaufer: That might be better, Alison.
The Chair: Further amendments to page 4? The next amendment on the handout is on page 6, so can I suggest we turn to page 5?
Ms Bassett: Yes, I have a point, if you just don't mind me screaming. On this second paragraph, "The expert witness" --
The Chair: Which page are we on?
Ms Bassett: On page 5, second paragraph.
Ms Lankin: You can't call him that.
Ms Bassett: I did this, yes. At the beginning it's "The witness from the Royal Bank" and "The expert witness." I just think we have to be consistent, whatever we do, all the way through.
Ms Lankin: I actually think it would be useful on that point, those witnesses who were classified as expert witnesses, to refer to them as expert witnesses going through --
Ms Bassett: Good point.
Ms Lankin: -- because we did give them a different status in the process.
Ms Bassett: That's fine. All I was looking for was consistency, so, Alison, it's an editorial thing. Just make sure that all the references, as Frances Lankin pointed out, are consistent.
The Chair: Further amendments to page 5? Page 6, Mr Wettlaufer, you have the middle of the first new paragraph?
Mr Wettlaufer: Bear with us one minute, please. Mr Chair, we recommend that the material on the contingency plan be moved to the section on debt and deficits on page 9, between the second and third paragraphs. That contingency plan would be that area which includes "consider the inclusion of an explicit contingency plan in the next budget," etc.
Ms Lankin: It begins, "Sun Life" argued.
Mr Wettlaufer: It begins "Sun Life" argued "that the government should consider."
Ms Drummond: I will have to make some style changes so it flows properly, but that's clear, yes.
The Chair: Other comments? Is the committee clear on --
Ms Castrilli: I'm not entirely sure. You're advocating a separate paragraph on contingency plans?
Mr Wettlaufer: Deleting it from page 6 and putting it between the second and third paragraphs on page 9.
1520
Ms Castrilli: As a separate paragraph.
Mr Wettlaufer: Yes.
Ms Lankin: I disagree with that, and it's not that I don't think it's something that couldn't be repeated in the debt and deficit section if you felt that was important, but it is a comment that is made very specifically with respect to the wisdom of proceeding with a tax cut or not. It's very much related to that, and it's because of the concern about the bottom line on debt and deficit, but it's married to the issue of do you proceed with the tax cut and a contingency plan should allow for different models of potential tax cuts that are achievable and/or scaled back if other assumptions aren't being met.
I think it's very appropriately placed in that tax cut section. If you want to repeat it again in the debt and deficit, that's useful, but don't take it out of there. It's an important recommendation that the government should consider as it decides whether to proceed with its tax cut or not.
Mr Wettlaufer: We'll give you that.
Ms Bassett: Could I just add one point. I agree. That's fine, Ms Lankin. But if we could just pick it up in repetition saying, "as noted above," blah, blah, and Alison, maybe you could paraphrase just a shorter bit.
Ms Drummond: Yes. That would make for a bad read.
Ms Lankin: That's useful.
Mr Wettlaufer: I think it's important to acknowledge that we realized the importance of the contingency plan, as they recommended, and as you wanted as well.
The Chair: All in favour of that amendment, and moving? Agreed. Other amendments, page 6?
Mr Silipo: Probably one of the few places where I have a slight disagreement with something that's stated here in the draft is I guess that last full paragraph under that section, "The major disagreement among both expert witnesses and business witnesses was the relative priority of deficit reduction and tax reduction." While that I think was clearly one of the major points that we did hear differences of opinion on, I would say that equally so, if not more so than that, was in fact the differences of views that we heard on the question of whether the government's proposed actions would result in the desired job growth. I don't know that that point has been picked up anywhere else.
We heard very clearly from both Mr McCracken and Mr Mackenzie that the combined impact of the expenditure cuts and the tax cuts would not, in their view, generate anywhere near the stimulus necessary to foster job growth. I think that's a point that needs to be made, and I would say equally as strongly as the observation that's made here around the relative priority of deficit reduction and tax reduction.
In fact, I looked back at the table of contents, and I was a bit dismayed, as I sort of got through this now and in the time, to see that in fact while we talk about jobs in the introduction briefly when we refer to some of the predictions, we actually don't have a section or subsection that talks specifically about jobs. Maybe that's something we should insert into the report, either at this point or wherever else it would fit, and then talk about some of the observations that the expert witnesses and others made around that. As I heard from the expert witnesses, indeed as I heard from the minister himself, there seemed to be certainly anything but ringing endorsation that all of this intended action by the government was going to create the jobs that were there, and I think that's a point that needs to be reflected in this report.
Ms Lankin: I support Mr Silipo's point. I would add to it that essentially there was a disagreement about what the combined effects of the tax cut and expenditure cuts would be, both on the government's desired results economically, which I think Mr Silipo refers to in terms of the job growth, and also in terms of the government's desired results fiscally as to whether or not with the numbers as set out will they be able to achieve the deficit number? There is some very mixed opinion that we heard about that. So I think it's important to build that in, and again I think you can find references in both Mr McCracken's and Mr Mackenzie's presentations, and perhaps others, about the combined effect and whether or not it will actually achieve the government's stated desired results both economically and fiscally.
Ms Castrilli: I would just add to that that the contradiction appeared not only in different witnesses but even within the same presentation. You remember the Royal Bank of Canada, for instance, said on the one hand the conventional wisdom essentially said that cuts of that sort would foster consumer spending and therefore jobs, but the other side of the coin is that people might tend not to spend but in fact to save, and if you cut too fast, you also lose jobs. So it's not even a question of different presentations that presented different points of view, but even within the same presentation we had a divergence of opinion. So I would support that on that basis.
The Chair: Mr Wettlaufer?
Mr Wettlaufer: We have no comment other than we'd like to hear the rewording.
Mr Silipo: I think what I'm suggesting is that it's perhaps more than just -- at least what I'm suggesting is that I think it's more than just a rewording. I'd like to propose that in fact there be another subsection added at the end, just before we get to other issues. I realize that's a suggestion to move that, but sort of after we finish the section on tax cuts that there be a section on jobs or job growth and that I think we can cull quite easily from the various expert witnesses and others some of the different views that were expressed to us on that point and perhaps ask Ms Drummond to draft something that we could then consider at the next meeting.
Ms Bassett: Where would it go?
Mr Silipo: I would put it right at the end as another section after the section that we're just dealing with on tax cuts.
Ms Lankin: Page 6, before it says "Other issues."
Mr Wettlaufer: Would another place for it be under growth and uncertainty on page 2?
Mr Silipo: I'd prefer it here. Perhaps we could get it drafted and look at it here, and if we think that it can be moved afterwards, we can do that. It seems to me to flow because we're talking about expenditure cuts, tax cuts, both of which are presumably aimed at creating more jobs and I think it follows naturally after that.
Ms Castrilli: I would just add that if you look at the table of contents, jobs isn't mentioned once. I think the people of Ontario would be very surprised to hear that in pre-budget consultations we wouldn't focus specifically on that issue. So I would argue in favour of having a separate section which highlighted jobs which highlighted the different views that we got on jobs and job creation.
Ms Lankin: I agree with that. What I would ask then is that we not lose sight of the other issue that Mr Silipo raised. On page 6 in the final paragraph that deals with the section on tax cuts, the intro to that is, "The major disagreement among both expert witnesses and business witnesses was the relative priority of deficit reduction and tax reduction." As it goes on to explain that, I would like that to be noted as one of the major differences and that another major difference was the impact of the combined effect of the tax cut and expenditure cuts on the desired effect that the government was attempting to achieve with respect to the fiscal agenda, ie, the deficit and debt.
Mrs Marland: I was just wondering how Mr Silipo was going to word what he wants in here in terms of, are you going to directly reference it to particular deputations, so that it's not an editorial opinion but it's --
Mr Silipo: Oh, yes, absolutely. It's very similar, Mrs Marland, to what we've been doing so far, which is I've noted a couple of observations that were made by two of the expert witnesses. I know there are plenty of others, because I remember asking a number of deputants questions and there were responses on the jobs issue particularly. So I think it won't be difficult for Ms Drummond to find, from the variety of presentations, a number of comments that were made which will I think, as in the rest of this, show a variety of views. I think that would be the intent.
Mr Wettlaufer: The one phraseology we have difficulty with is when we say, "The major disagreement among both expert witnesses and business witnesses...." Some of the expert witnesses were business witnesses. I think it would be more appropriate to say, "The major disagreement among witnesses was the relative priority of deficit reduction and tax reduction," because there was a disagreement between various witnesses.
1530
Ms Lankin: Other witnesses had a comment on this as well, so I think that's better.
The Chair: There is consensus on that point? Thank you.
Ms Bassett: There's just one thing: "the relative priority of deficit reduction and tax reduction." Everybody agreed pretty well that deficit reduction was key, even the Steelworkers. Everybody did agree that was a factor. So I don't think it's "priority" that was the disagreement; I think the issue is timing.
Ms Lankin: No, no.
Mr Silipo: That point was made later on.
Ms Lankin: No, in fact it was "priority" -- if both were not achievable at the same time, which should take priority. There were those who argued very strongly that the deficit reduction should take priority and those like Ms Croft who said, "No, you should proceed with the tax cut as well because that's absolutely critical to achieving the rest of the fiscal agenda."
Ms Bassett: Okay, I stand corrected.
The Chair: I understood we had agreement that Ms Drummond would draft something along the lines that Mr Silipo was suggesting and that we would have a look at it on Thursday. Do we have agreement from the committee for that? We'll have a vote on that paragraph at that point in time. Thank you.
Mr Wettlaufer: Is there any chance we could see that before Thursday?
Ms Drummond: All the revisions that the committee agrees to make today I will be working on tomorrow and I hope to get to Franco Wednesday morning so that members have a chance to look at them. So I would hope you'll get them on Wednesday.
Mr Wettlaufer: That would be fine.
The Chair: That would be very helpful. On page 6, "Other Issues," the government has a suggestion.
Mr Wettlaufer: We recommend that the "Other Issues" section be moved to the very end as they are miscellaneous items.
The Chair: Could you reference "very end," please?
Mr Wettlaufer: To just prior to the "Sector Report" section, with the exception of the subsection "Monetary Policy." We would like to leave that where it is prior to "Debt and Deficit."
Ms Drummond: I have one question. That seems clear to me. I guess the one question I had was, the final paragraph on page 7 with the bullet points is on the comparative international study which a number of expert witnesses referred to. If the committee is comfortable with that, I'd really prefer to keep that somewhere in this section.
Mr Wettlaufer: We were going to recommend that we move that portion to the section on "Debt and Deficit" on page 9.
Ms Drummond: Sorry about that. I missed that.
Mr Wettlaufer: At the end of the first paragraph on page 9, ending "followed by the government is the correct one."
Ms Castrilli: Just to be clear, we already have an addendum at the end of the first paragraph on page 6. You are suggesting there's one from page 7 as well? Is that how it's going to read? There'll be two addendums after the first paragraph?
Mr Wettlaufer: Yes.
Ms Lankin: Perhaps we could leave it to Ms Drummond in terms of how to make it flow, because it might make sense to have these two C.D. Howe references together and build on that rather than insert in the middle of it a reference to the contingency plan concept. But at some point we want that built into this section.
Ms Bassett: I think that was the idea, that they be together.
The Chair: Further amendments on page 6? I believe we're finishing with page 6. We move to page 7. Amendments to page 7?
Mr Hardeman: That's done.
The Chair: Any other amendments to page 7? Can we move to page 8?
Ms Bassett: I'm not absolutely wedded to the idea, but what about calling the "Debt and Deficit" section "Reducing the Debt and Deficit" since it's more apt to -- if people don't want it, I don't care, but it just seemed better.
Ms Lankin: Are we going to call the "Jobs" section "Creating Jobs" as well? Why don't we, when we see the final report, if we want to do some of that sort of stuff, we could do it?
Ms Bassett: Okay.
The Chair: Dare we move to page 9? We seem to be proceeding. Page 10.
Mr Wettlaufer: We are recommending, three quarters of the way down, under "Taxation" that "The Ontario Taxpayers Federation specifically recommended..." be a new paragraph instead of a new sentence.
The Chair: Any disagreement? So be it. Page 11? Sorry. Mr Silipo.
Mr Silipo: I was just reading back through it to see whether the point was made, but in the section under "Debt and Deficit" or whatever we may end up calling this, there was an important point made in the Ontario Federation of Labour presentation, I think supported by a number of others, which talked about essentially a different way of approaching deficit reduction, which I don't see reflected here. Maybe it is and I just have missed it.
I know there was the comment on monetary policy as a key part of that, and that is reflected in the earlier section on page 8. But I think it would be important to also make the point here that certainly, as I recall, specifically the OFL presentation talked about essentially reducing the deficit through more emphasis and more attention and action by the government on job growth. Again, I'm not sure that's reflected anywhere here in this summary. I would ask that that be inserted.
The Chair: Could we leave it to Ms Drummond to bring something to the meeting on Thursday, with agreement? Very well.
Mr Wettlaufer: Before we go to page 11, I wonder if we could make a minor change to page 10 that we missed. Could we say, "Some witnesses...recommended that the government should take a cautious approach to lowering taxes"?
The Chair: The position on the page, Mr Wettlaufer?
Mr Wettlaufer: Right under "Taxation," the very first sentence: "Some" witnesses.
The Chair: You're suggesting we add the word "Some"?
Mr Wettlaufer: Yes.
The Chair: Comments, questions? Those in favour of the amendment? Carried. We move to page 11.
1540
Mr Wettlaufer: The very first sentence on page 11, that we amend that to read, "The Ontario Taxpayers Federation recommended that the province should also consider" etc.
The Chair: Agreed? Objections? Carried.
Further amendments?
Mr Wettlaufer: Under "Personal Income Tax" we are recommending that we eliminate the very first sentence: "Macroeconomic issues in the personal income tax (PIT) cut promised in the Common Sense Revolution are discussed above, under the economy." We feel the next sentence states the purpose of the section and that the first sentence is not necessary. We would then say, "This section is limited to a discussion...," and take out the word "therefore."
Ms Lankin: I don't understand the rationale for that recommendation being made. I think it is very helpful to indicate to people who might look down the index and turn to the section on personal income tax expecting to read about the commentary on the 30% tax cut and find all of the specific recommendations on tax cuts here and miss the other section. All this does is say that the macroeconomic issues in terms of its impact on the fiscal situation, its impact on growth in jobs, is in the section on the economy; here we're talking about specific formulations. I think it's quite helpful to the report.
Mr Wettlaufer: We'll give it to you.
Ms Lankin: I don't think you're giving it to me. I think it was a bad recommendation that was being made to you, which you just recognized.
Mr Wettlaufer: I was being nice to you. You should be nice to me.
Ms Lankin: I'm not putting that one down on my scorecard as one on my side that I owe you something for, Wayne. That's the only point I'm making.
Mr Wettlaufer: I never keep score.
The Chair: We'll avoid editorial comment on that one as to who the scorekeeper is. Are there further amendments to page 11?
Mr Wettlaufer: We would like to add to page 11 the section from page 12 which begins halfway down the page, beginning, "The Canadian Manufacturers' Association," and includes the three bullets. We would like to move that to the bottom of page 11 prior to the final paragraph, "Citizens for Public Justice recommended."
Ms Lankin: I'm actually wondering, as we go through this, if there might be some sense of consistency in how the reports are put forward. Sometimes the content drives unnecessary formulation and other times there are groups that have different points of view and sometimes there are groups that represent two polarized points of view. I think it's helpful if you go back and forward between polarized points of view rather than what I think you're attempting to do here, which is to bring all like-minded points of view up to the beginning part of the presentation on this issue. It's similar to what you did around the banks earlier. I kind of like it mixed up and going back and forth and seeing a compilation, as opposed to a heavy emphasis on one point of view all up front, which I think gives it, in any person's reading who is reading quickly, a sense of priority in the ordering. I like, instead, to give a balance.
Failing that, if you want to do it that way, then I think there needs to be some indication that some of the comments of presenters who reflect this point of view are as follows, and then you come to presenters who reflect this point of view which are as follows, so that you actually are giving some sense of equal weight. Otherwise, I just worry about the balanced treatment of groups and their opinions.
Mr Wettlaufer: There is some value in what you're saying. However, when you're compiling the final report for the minister to do the budget, I think it's really easier for him and his staff if they have all the coinciding views in the same place.
Ms Lankin: The ones that he's going to listen to. That's right. It's a good point, Wayne.
Ms Bassett: That's not it.
Mr Wettlaufer: You know better than that.
Ms Bassett: It's a question of style. That's all it is.
Ms Lankin: I'll wait until I see the final proposed document, and if I am concerned that there is an imbalance in how it reads, then I'll raise the concern at that point.
The Chair: As far as moving that paragraph, then, do we have consensus?
Mr Grandmaître: For now.
The Chair: For now?
Ms Lankin: For now they have the majority, actually.
The Chair: So that does not require a vote, then. We'll move it and we'll have a look at it and have a vote after we look at it.
Ms Castrilli: We'll defer.
The Chair: We'll defer? Is that the wish of the meeting?
Mr Wettlaufer: We'll defer now.
The Chair: Thank you. Are we finished page 11? There is only the final short paragraph on page 11. Can we move to page 12? Any other amendments to page 12 or 13?
Ms Bassett: Just a minute. We're still on page 13.
Mr Wettlaufer: Yes, going to page 13.
The Chair: Mr Wettlaufer.
Mr Wettlaufer: We recommend that we eliminate that first sentence, "A few witnesses made recommendations on property taxes." It's really redundant when we go right to the witnesses.
Ms Lankin: I'll just put it on the record. I'm not going to argue it. I object to all of the recommendations with respect to page 13, which simply reorder all of the business presenters and move them up in the government's preferred order and relegate the Canadian Association of Retired Persons to the very end. This is going beyond a stylistic approach.
The Chair: Further comments? Call the question?
Mr Wettlaufer: Not yet, Mr Chair.
We would like to take the section beginning "The Canadian Federation of Independent Business made a series of recommendations," including the five bullets, and we would like to make that first on the page as a separate paragraph.
Ms Castrilli: So you're going to start with "The Canadian Federation of Independent Business"?
Mr Wettlaufer: We would like to make that the first paragraph on the page.
1550
Ms Lankin: "Builders'" starts with B and "Canadian" starts with C. I don't know. Maybe there's an alphabetical order that --
Interjection.
Ms Castrilli: It doesn't matter, Mr Chair. It's setting a pattern here that is quite clear.
Mr Wettlaufer: It's only style. Don't you like our style?
The Chair: Mr Wettlaufer, are you moving, on page 13, those four paragraphs?
Mr Wettlaufer: I'm moving that we move the CFIB paragraph up to the first paragraph.
Ms Lankin: This is nuts. All of this on page 13 and on page 14, the so-called stylistic changes may well have been intended that way, but quite frankly what you're doing is moving your preferred presenters up to the beginning of all the sections, from the government's perspective, and relegating those who have any critical point of view to the very end of each section. I find it interesting. I don't think that it is helpful in terms of a balanced perspective. Be that as it may, page 13 and page 14, please let's not go through every one of these as an individual amendment. We will be opposing them all just on the principle that this is an editorial critique of a level that is not necessary by group committee writing. We'll be voting against them all, so let's not do them individually. Let's just move on.
Mrs Marland: So we'll just move the page that's been handed out.
Ms Castrilli: The issue really is, when does form become content? What you're doing here is demonstrating through the form that there is an agenda. I would urge the government to be very careful in adopting that stance. I think the report as written is fairly balanced. It tries to bring forth all viewpoints. Don't try and upset that by imposing a form that will give a different thrust to the report which is not intended at the moment.
Mr Wettlaufer: To show we're being reasonable, we'll leave it as is, as written presently in the report, with the exception of our fourth recommendation on our handout. We would like the Ontario Hotel and Motel Association sentence to be moved from the last sentence on the page to a separate paragraph. We would recommend that it be a third paragraph or added to the second paragraph, but it's not really necessary.
The Chair: Does the first sentence on page 13 stay or go?
Ms Bassett: It can stay if they want.
Mr Wettlaufer: It can stay, but it's redundant.
Ms Castrilli: I have no strong views on that, Mr Chair. It doesn't seem to add very much.
The Chair: We can ask Ms Drummond to review it if it's necessary.
Your amendments on page 14, Mr Wettlaufer, were those included in your comments for withdrawal or were they --
Mr Wettlaufer: I'd to ask Isabel Bassett to do this section.
The Chair: If they're different, then if I could move back to page 13, we could clean that one up.
Ms Bassett: Page 13, we're going to go with --
The Chair: The only change is the fourth one, the Ontario hotel and motel?
Ms Bassett: To make it a separate paragraph.
The Chair: Those in favour of that amendment signify by raising your hands. Opposed? Carried.
Any other changes to page 13? We'll go to page 14.
Mr Wettlaufer: Mr Chair, we'll withdraw the amendments on page 14.
The Chair: Withdrawn. Any other changes to page 14?
Mrs Marland: You'll notice we listened, Frances.
The Chair: Margaret got the look. You got the look.
Ms Lankin: No. It was a laugh that she got.
Mrs Marland: I didn't think it was a bad look.
Ms Lankin: She understood.
The Chair: It's not the Chair's purpose to understand.
Ms Lankin: That's right.
The Chair: Can we move to page 15? Comments on page 16?
Mr Wettlaufer: On page 16, one third of the way down, at the end of the first paragraph it says, "Finally, a few witnesses recommended that the government should oppose harmonization of the GST and RST and should instead encourage the federal government to fulfil its campaign promise to eliminate the GST." We feel it's important that we clarify who the few witnesses were who opposed harmonization.
Ms Castrilli: Just to comment, if we're going to do that here -- it occurs earlier on as well when we talk about harmonization -- in that particular section we only deal with the ones that are for and not the ones that are against. Just to be consistent, I think we would want to have that repeated in both sections. It occurs about four or five pages earlier, I believe. I haven't got the section in front of me right at the moment, but when you're reviewing it, Alison, you might just check the consistency in the two sections.
Ms Drummond: I'm sorry. Which section were you concerned about?
Ms Castrilli: I believe it's in the section on taxation, but I'm trying to find it.
The Chair: It was in reference to which issue? GST and PST?
Ms Castrilli: It has to do with the harmonization. Yes, it occurs before as well, but it only deals with the ones that are in favour of harmonization.
Ms Drummond: Yes, I see where you mean.
The Chair: That is a point of clarification, so I don't believe that needs a motion. We'll just clarify that. We're all in agreement? Thank you.
Other retail sales tax issues, any comments concerning that section on page 16? Page 17?
Mr Wettlaufer: On the top of page 17, the Canadian distillers' association -- this is a small amendment -- I believe should be the Association of Canadian Distillers. We recommend that it be moved to the section under other taxes, because they are not sales taxes; they are alcohol taxes.
The Chair: Do you have a location in other taxes that you would like it placed in?
Mr Wettlaufer: At the bottom.
The Chair: Do we have agreement on that point? All in favour? Carried.
Other comments on page 17? Page 18?
Mrs Marland: That's it, Mr Chairman.
The Chair: The top of page 19?
Mrs Marland: We don't have any other amendments to the balance of the report, I believe. I don't know if anyone else does.
Mr Silipo: I just wanted to suggest that the section on agriculture be expanded perhaps by another paragraph or two. I think this is a useful summary, but it doesn't really say what the federation recommended with respect to those issues. I appreciate that you could go very long and be in detail, but I think something more than what's here would be useful. Although it was only the one presentation that dealt with agriculture, given that it comes from the federation I think it should be expanded a little bit more than that.
Ms Bassett: I agree with you totally. I wrote this whole page last night on agriculture, so thank you for saying that. Maybe Alison could do it.
The Chair: Are there any further amendments to the report?
Ms Bassett: In the section on page 23, if we're on that, manufacturing has three lines, and maybe we should expand it. It might come into creating jobs somewhere. It just has three lines. It seems small, considering the role it plays in our economy.
The Chair: Anything further?
I think we had agreed to a 4 o'clock deadline. I want to commend the committee for meeting that deadline, almost.
Interjection: I'm shocked.
The Chair: Not as shocked as I am.
I know that we have a number of colds from the road, or flu or everything. It's been an exciting four weeks and we look forward to next Thursday. Thank you very much. Did you have a comment, Ms Lankin?
Ms Lankin: Just a question about procedure for Thursday, given that some of us in this room have not been through report-writing before. Having now dealt with the content of the work that Ms Drummond has done, and we will finalize that on Thursday morning, there is then a process of dealing with recommendations. Could someone describe how you expect that to unfold?
The Chair: I understand that when the report is resubmitted, the amendments or the changes to the report will be highlighted, so it will be a fairly expedient process to go through those amendments. We will then move into the recommendations, as I understand it, and we will have discussions on those.
Ms Lankin: On what recommendations?
Mrs Marland: They would just be bolded, wouldn't they?
Mr Carr: What has happened is that all three parties come forward with what their recommendations would be, we debate, there may be unanimity on some of them, and historically what you try to do is get some of the things -- make no mistake about it; the recommendation that there's all-party consensus on going to the minister is going to have more weight. It may be, "The deficit is a problem," or something we can agree on.
On Thursday, everybody should come with their recommendations of what they would like to see happen, very specific recommendations. If anybody is interested, all they need to do is look at last year's reports of some of the things that were brought forward. We debate them; usually we can't agree on a lot of them, but on some we can. Failing that, if the other two parties in opposition have some recommendations that the government doesn't agree with, then they can table their dissenting opinion, I guess is the technical name, not minority. I was corrected last year. It's a dissenting opinion.
My suggestion would be that everybody on all three sides come with recommendations of what they'd like to see the Minister of Finance do in the next budget.
The Chair: Again I thank the committee for their cooperation this afternoon. We stand adjourned until Thursday at 10 am in room 228.
The committee adjourned at 1604.