Legislative Assembly of Ontario

CROWN FOREST SUSTAINABILITY ACT, 1994 / LOI DE 1994 SUR LA DURABILITÉ DES FORÊTS DE LA COURONNE

CONTENTS

Thursday 17 November 1994

Crown Forest Sustainability Act, 1994, Bill 171, Mr Hampton / Loi de 1994 sur la durabilité des forêts

de la Couronne, projet de loi 171, M. Hampton

STANDING COMMITTEE ON GENERAL GOVERNMENT

Chair / Président: Brown, Michael A. (Algoma-Manitoulin L)

*Vice-Chair / Vice-Président: Daigeler, Hans (Nepean L)

*Arnott, Ted (Wellington PC)

*Dadamo, George (Windsor-Sandwich ND)

*Grandmaître, Bernard (Ottawa East/-Est L)

*Hope, Randy R. (Chatham-Kent ND)

Johnson, David (Don Mills PC)

Mammoliti, George (Yorkview ND)

*Morrow, Mark (Wentworth East/-Est ND)

Sorbara, Gregory S. (York Centre L)

*Wessenger, Paul (Simcoe Centre ND)

*White, Drummond (Durham Centre ND)

*In attendance / présents

Substitutions present / Membres remplaçants présents:

Bisson, Gilles (Cochrane South/-Sud ND) for Mr Wessenger and Mr Morrow

Carr, Gary (Oakville South/-Sud PC) for Mr David Johnson

Miclash, Frank (Kenora L) for Mr Sorbara

Wood, Len (Cochrane North/-Nord ND) for Mr Mammoliti

Also taking part / Autres participants et participantes:

Hodgson, Chris (Victoria-Haliburton PC)

Wood, Len, parliamentary assistant to Minister of Natural Resources

Clerk / Greffier: Carrozza, Franco

Staff / Personnel: Filion, Sibylle, legislative counsel

The committee met at 1111 in room 151.

CROWN FOREST SUSTAINABILITY ACT, 1994 / LOI DE 1994 SUR LA DURABILITÉ DES FORÊTS DE LA COURONNE

Consideration of Bill 171, An Act to revise the Crown Timber Act to provide for the sustainability of Crown Forests in Ontario / Projet de loi 171, Loi révisant la Loi sur le bois de la Couronne en vue de prévoir la durabilité des forêts de la Couronne en Ontario.

The Vice-Chair (Mr Hans Daigeler): The general government committee is continuing its clause-by-clause consideration of Bill 171. When we last met, there was a call for a vote and then there was an adjournment for 20 minutes, which means that we're now taking the vote on section 40 without further debate.

All those in favour of section 40? Opposed? Carried.

Section 41: Any amendments, questions, comments?

Mr Frank Miclash (Kenora): The minister has approved in writing the harvesting in the area in which the harvesting is to occur, and I would just like to ask the parliamentary assistant whether that gives the minister any more power or less power than he has under the present Crown Timber Act.

Mr Len Wood (Cochrane North): I understand it's the same.

The Vice-Chair: Any further questions? All those in favour of section 41? Opposed? Carried.

Section 42: I understand, Mr Miclash, there's a Liberal amendment.

Mr Miclash: I move that subsection 42(1) of the bill be amended by striking out "and counted" in the last line.

The Vice-Chair: Did you want to comment on it, or are we ready to vote?

Mr Miclash: We're ready to vote.

The Vice-Chair: All those in favour of Mr Miclash's amendment to section 42? Opposed? The amendment is lost.

Further amendments to section 42? Mr Wood.

Mr Wood: I move that subsections 42(2) and (3) of the bill be struck out and the following substituted:

"Methods of measurement

"(2) A person who measures, counts or weighs forest resources shall do so in accordance with the Scaling Manual.

"Exceptions

"(3) Despite subsections (1) and (2), the minister may direct that forest resources be measured, counted or weighed at a place other than the place of harvesting and in such manner as the minister may direct."

Mr Bernard Grandmaître (Ottawa East): What are the reasons for the amendment?

Mr Wood: I think that what we're saying is that the change is to control the methods of wood measurement and clarify the minister's power to authorize and control the movement of unscaled wood that is not paid for. The minister requires the authority to ensure forest resources are measured in a cost-effective manner.

Mr Grandmaître: Subsection (2) says "do so in accordance with the Scaling Manual." Isn't the Scaling Manual effective enough or strong enough at the present time? Is that why you need this amendment? If people follow the Scaling Manual, aren't they doing a good enough job at the present time?

Mr Wood: The reason for this amendment is to clarify the original wording in the legislation. We feel that this amendment, bringing it forward, clarifies what the original draft was of the legislation.

Mr Grandmaître: My last question: Are you changing the Scaling Manual?

Mr Wood: This manual is one of the four manuals that are under development and the process is involving all the stakeholders in its development. It's one of the four manuals, yes.

Mr Grandmaître: Will we have a chance to see this new manual?

Mr Wood: Yes.

Mr Miclash: To the parliamentary assistant, a point of clarification: Subsection (2) talks about "counts" and subsection (3) "counted." Could you possibly expand on that, explain what is meant by the terms?

Mr Wood: When we're talking about the word "count" or "counted," there are occasions where you do physically count or a load has been counted to get an idea of what is there, as well as in most cases it's weighed. But there are occasions where you have to count the number of trees and then use it by volume. So that's the reason for the word "count," or "counted" in (3).

Mr Miclash: Subsection (3) indicates exceptions. Can you give us an example of what you mean by an exception, where the minister would grant this exception?

Mr Wood: I think the example to us is if the minister was to direct the wood to be moved to a certain area to be weighed, this would be where the exceptions are.

Mr Miclash: So this gives discretion to the minister to direct requirements in the manner he chooses. Is that what we're saying here in subsection (3)?

Mr Wood: Yes, the minister may direct that forest resources be measured, and in the last words it's saying, "in such manner as the minister may direct."

Mr Miclash: I'd just like to say that I have a problem with the discretion that this section would give the minister. It is a lot of power, yes. Thank you.

The Vice-Chair: Any further debate? All those in favour of Mr Wood's amendment? Opposed? The amendment carries.

Mr Miclash, I think you have another amendment to section 42.

Mr Miclash: I move that subsection 42(3) of the bill be struck out and the following substituted:

"Methods of measurement

"(3) A person who measures or weighs forest resources shall do so in accordance with the Scaling Manual."

I believe we've touched on that already.

The Vice-Chair: Any further debate? All those in favour of Mr Miclash's amendment? Opposed? Lost.

I think, Mr Carr, you have an amendment to subsection 42 (3).

Mr Gary Carr (Oakville South): Is that 52-A?

The Vice-Chair: Yes.

Mr Carr: Yes, it didn't say ours on it. Is that because it's a replacement?

The Vice-Chair: I'm sorry, I didn't hear you.

Mr Carr: On the top, it doesn't say that it's our motion. Is that my copy?

Clerk of the Committee (Mr Franco Carrozza): This was the package from your party given to me.

Mr Carr: I know that, but in my package that I have here, it doesn't say -- you know how it says Liberal motion or PC?

Clerk of the Committee: Yes.

Mr Carr: But it's 52-A?

Clerk of the Committee: It is yours.

Mr Carr: I just didn't want to --

Mr Mark Morrow (Wentworth East): On a point of order, Mr Chair: The PC motion, is that in order? It's the same as the previous one.

Mr Carr: It's almost word for word.

The Vice-Chair: I'm advised that we already dealt with it, so, Mr Carr, sorry. It's out of order.

Mr Carr: I told you. Mark's maiden speech in the committee.

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The Vice-Chair: Any further amendments to section 42? Seeing none, all those in favour of the amended section 42? Opposed? Carried.

Section 43: Any questions, amendments, comments?

Mr Miclash: Am I to read into this that any person who removes resources must keep records as prescribed by the regulations? Is this what section 43 is actually putting forth in terms of records?

Mr Wood: Yes. There are various ways of keeping records. There are the print records, there are also electronic records and, as it says, the records shall be kept as prescribed by the regulations. It's basically for auditing by MNR.

The Vice-Chair: All those in favour of section 43? Opposed? Carried.

Section 44: Amendments, questions?

All those in favour of section 44? Opposed? Carried.

Section 45: Mr Wood, you have an amendment.

Mr Wood: I move that subsection 45(1) of the bill be struck out and the following substituted:

"Forest renewal trust

"(1) If the forest renewal trust is not established under the Crown Timber Act before this act comes into force, the minister may establish in writing a trust to be known in English as the forest renewal trust and in French as fonds de reboisement.

"Same

"(1.1) If the forest renewal trust is established under the Crown Timber Act before this act comes into force, the trust is continued under the name forest renewal trust in English and fonds de reboisement in French."

The Vice-Chair: Any explanation or discussion?

Mr Gilles Bisson (Cochrane South): I only wish he would have said "reboisement" a little bit better.

Mr Wood: What we're saying here is the rationale behind this is that they will permit a forest renewal trust fund established under the Crown Timber Act, as amended by the Budget Measures Act, 1994, and carry over without change, and it will save re-establishing the trust fund. It eliminates the potential cost of re-establishing trust arrangements and it does not impact on the operation of a trust or cost to industry.

As a lot of people are aware, there are a number of companies, five I believe, that under the Bob Carman exercise have come to agreements, business relationships which cover a fair amount of the FMAs. This basically says what has been happening now, what is covered here. That's the reason for our amendment.

Mr Miclash: To the parliamentary assistant: During the hearings were most groups in favour of this amendment or were there any concerns expressed regarding it from your point of view?

Mr Wood: To my knowledge, the trust fund is being set up and being negotiated. This hasn't been a controversial issue. Trust funds have been established in other provinces and now they're being established in Ontario. It's a housekeeping amendment that we're bringing forward, recommended by the ministry.

The Vice-Chair: Further discussion? All those in favour of Mr Wood's amendment? Opposed? Carried.

Mr Carr, I think you have an amendment.

Mr Carr: Which number again?

The Vice-Chair: 53-A.

Mr Carr: I don't have a 53-A.

The Vice-Chair: I think you passed one to the Minister of Finance.

Mr Carr: I move that subsection 45(5) of the bill be struck out and the following substituted:

"Annual report

"(5) The trust shall report annually to the minister on the financial affairs of the trust and the minister shall table the report in the Legislature."

Obviously this, being as simple as it is, is pretty self-explanatory. The people of the province, through their elected members of the Legislature, should have the report tabled to them and obviously to the minister as well. It's only common sense. We'd like to see it put in the legislation. I don't see how anybody could be opposed to having a complete report of the financial affairs of the trust reported annually to the minister.

Obviously that should go on as something that would be standard management practice that would go on in any organization; also obviously, as it relates to the entire province, as this bill does, not only should the minister receive the report but members of the Legislature because, as we all know, a bill dealing with the Crown Timber Act and crown forests in Ontario affects all members of the Legislature in their area.

I would assume from the parliamentary assistant that this is something they would be pleased to do: have this amendment brought forward in good faith, accepted and passed by the government.

Mr Ted Arnott (Wellington): Just to follow up, I certainly concur with everything Mr Carr has said and I think it's important that we enhance to the extent that we can accountability to the Legislature in this regard. As Mr Carr has indicated, all members of the Legislature are and should be interested in this issue and will be on an ongoing basis. To enhance accountability would be a desirable objective, and I certainly encourage the government and the parliamentary assistant to support this amendment.

The Vice-Chair: Mr Miclash, did you have your hand up?

Mr Miclash: I would like to also indicate support for this amendment as has been indicated by the previous speakers. I think this is a very important aspect of the act and that this portion of the report should certainly be tabled in the Legislature.

Mr Wood: Just briefly, and I don't want to get into any major argument, but the government amendment and also the Liberal amendment we feel clarifies it a little bit better:

"The minister shall submit the report to the Lieutenant Governor in Council and shall table the report in the Legislative Assembly."

The intention is there, but we will be voting against the Conservative motion in favour of our motion, which will be coming up right after.

The Vice-Chair: Any further debate? All those in favour of Mr Carr's amendment? All those opposed? The amendment is narrowly defeated.

Mr Wood, you have an amendment.

Mr Wood: I move that section 45 of the bill be amended by adding the following subsection:

"Tabling of report

"(5.1) The minister shall submit the report to the Lieutenant Governor in Council and shall table the report in the Legislative Assembly."

I would just point out that this is very similar to the next one that is coming up in the package. They're pretty well identical, so I'd ask for the support of this one.

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The Vice-Chair: If indeed the Liberal motion is the same, therefore if this one passes, it will be outvoted. Any further discussion? All those in favour? Carried.

Are there any further amendments to section 45? Further discussion? All those in favour of the amended version of section 45? Carried.

Section 46: Mr Wood, you have an amendment.

Mr Wood: I move that subsection 46(1) of the bill be amended by striking out "in accordance with the regulations" in the third and fourth lines and substituting "as required by the Minister of Natural Resources."

Mr Michael A. Brown (Algoma-Manitoulin): That's a change in authority. I'm just wondering, from the parliamentary assistant, why he wants to change the authority as to who decides.

Mr Wood: It's requested, it has come forward. The industry wants to ensure that only the appropriate funds are put into the trust funds so that investments are properly balanced across the industry's broad range of activities, including renewals.

I understand that the industry has indicated that it expects that the forest renewal charges will have to reflect the forest renewal conditions specific to each of the 100-plus licences as actual results and costs are determined through review. So this is the rationale for bringing forward this amendment.

Mr Brown: So instead of the Ministry of Finance, you're really suggesting that it's the Minister of Natural Resources that should -- have I got this wrong?

Mr Grandmaître: No, no.

Mr Brown: I'm just really trying to sort this out in my own head here. The problem, as I see it, if it is the Minister of Natural Resources rather than the Minister of Finance, we have a situation then on the crown units, not on the units that are subject to the former FMAs but on the crown units.

We've been told by the ministry that on those particular units where we maybe have quite a number of small players, the ministry itself will be the one that does the forest management plans, that the ministry itself will be doing the renewal and reforestation and whatever.

We'd then have the situation where Len Wood Inc, who is a small jobber on one of the units, is paying into the forest renewal fund as he should through the stumpage fees etc. The ministry, however, has formulated the plan that you're working under. You're working really under the ministry in this situation. The ministry is then dictating the renewal and the ministry itself is deciding whether the funds that we're allocated are being spent appropriately. Have I got that wrong?

In terms of accountability, that's my problem. I can understand that on the forest management agreements this works probably just quite fine, but on those crown management units you're ending up with the minister really doing everything and only being accountable to himself in terms of the disbursal of funds. Am I wrong in the way I'm understanding this?

Mr Wood: By this particular amendment the money is going to be going to the Ministry of Finance, but rather than have 100 regulations to change, the ministry would be able to set the rates administratively. We're talking about an amendment that is going to be tidying things up. What we're talking about is ensuring that we have an appropriate guarantee funding for renewal, and the advice we're getting is that this is one of the amendments that should be brought forward to make sure that that happens in a neat way.

Mr Brown: Yes, I understand that. My difficulty is in the particular circumstance where the ministry itself is really doing everything other than the actual harvesting. They are providing the plan, as we were told, then directing the reforestation. The ministry itself, I would presume, is the one that will draw down on the trust account. It seems to me that in that case there's not a degree of accountability that we might want.

As a matter of fact, in the Auditor General's report, one of the issues that he had raised was the inability to audit for value in terms of the reforestation. In other words, he thought it was at least conceivable that some companies were charging, should we say, non-competitive rates to do reforestation and inflating the amount of money that they were showing, therefore, as being spent on reforestation.

This act will I think do much to change that practice, but it doesn't do much to change that practice, if at all, if there's no transparency in the transaction as the ministry itself decides on the plan, the reforestation, and then decides whether everything has been matched in the most cost-effective manner. Am I quibbling about something that shouldn't be quibbled about? Have I got it wrong is I guess the question I'm asking.

Mr Wood: The crown units that you're talking about, as far as I know, will be subject to audit under the terms of the EA and the results will be tabled in the Legislature as well.

Mr Brown: I understand that part, but what I'm trying to get at is the value for money part of it. If I'm on my own limits harvesting my own trees, I, as the company, have put the plan in place, decided on the reforestation program, which has been approved by the ministry, so there's kind of a separate approval process.

But my real concern, if I'm the industry then, is to get the most bang for the buck. I'm the guy who's got to draw down on this trust account, and if I can show over a period of years that I don't need to have that much money in the trust account, maybe I can convince someone to lower the rate of stumpage, because I'm doing everything I should be able to do and I can do it for less, so there's a way for the limit holder to think that there's an advantage to be cost-effective and look after those kinds of concerns.

But when it's the ministry itself, they're charging those stumpage fees to a third party. It's not the ministry that's paying the stumpage fees, it's somebody else, but they're doing the work or contracting for the work, and I'm wondering how this provides an incentive in those cases for the ministry to make sure that it has the most cost-effective solution to it.

I understand that the reforestation itself should be done and it'll be done accordingly, but in terms of being cost-effective, you now have the minister doing everything. He regulates himself, he does the planning himself, he does the reforestation himself, and at the end of the day when he looks at the trust accounts and says, "Yes, those are legitimate, pull them down," he pays it to himself because he has agreed it's the best value he could get. Kind of a good system, I would think.

Mr Wood: I think everybody wants to be cost-effective in what they're doing out there, and one thing that you have to remember is that the ministry will be establishing local citizens' committees to be out there and help to keep things accountable as well.

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Mr Brown: Is there a mandate within those committees to look at the cost? The committees, as the timber EA has said, have a responsibility and their responsibility is primarily environmental and economic from the standpoint of where the wood goes and how well the environment is treated. That's a pretty broad way to describe it, but that's essentially what we're talking about.

What I'm talking about is value for money. I'm sure private enterprise working under the FMAs -- what do we call those again? The new term under this act, but essentially the old FMAs. There will be real incentive for them to get value for money. I'm not sure in this instance how there's a value for money. The same onus is being placed on the public sector.

The difficulty here is if the public sector does not have the same constraints for value for money, then it's the guy paying the stumpage fee in the long haul who may be faced with higher regeneration costs, which would reflect over time, I would suspect, in higher stumpage fees, which he won't like. But he really has no control and, because the one minister's doing everything and there's no accountability to the Ministry of Finance then, I'm just wondering if the mechanism that we're developing shouldn't have a more cost-effective safeguard built into it.

That's the attraction of these trust funds. I think they're a great idea because there is a real incentive to do things in a cost-effective manner. The incentive to the people on the licence to do things in a way that maximizes the reforestation impact should be quite apparent. But on the other hand, that's a different kettle of fish when you're looking at a third party that does the plan, or a third party that does the reforestation, or a third party that is managing the trust fund and the money flows back to the ministry instead of otherwise.

All I'm talking about is that we have, I think, in the 1990s a real obligation to write legislation that promotes the most cost-effective use of the public dollars available, or anybody's dollars available. If we can do that in the legislation, I'm not sure that having the Minister of Finance do it is not a better idea. I'm just wondering.

Mr Wood: I believe that we have a cost-effective system with this legislation with that amendment, because we're going to have annual reports on each unit that are going to report on the expenditures and the renewal. The environmental assessment terms and conditions that we're saying that we abide by, saying that annual reports should specifically speak to the concerns -- MNR must annually report activities on expenditures. There are a number of things that tie in, as well as the local citizens' committees, so I think we've answered your concern.

Mr Brown: That may answer my question. Perhaps we could be assured that there will be within MNR management some kind of cost comparisons being done between the various management units. One of the things that always interests me is people make wonderful arguments always about what's the best way to spend money, how to get most value for money, and usually they're exactly that and at the end of the day the way you can know is by the bottom line on the financial statement of who is right.

In this case I think we have an interesting opportunity to compare what goes on in perhaps the adjoining FMA to these crown units. If the forest is anywhere near similar, you would have an opportunity to say, well, gee, how come they are able to reforest their area for, I don't know, $1 a hectare, or I don't know what number -- $1 worth of stumpage, however you wanted to express that -- cheaper.

Why is it that the ministry is spending more money? Or conversely, why is it that the forest practices on this other unit seem to be more expensive than what the ministry is doing? Is the ministry contemplating that kind of value for money comparison between units on how things are spent in reforestation so that we can be assured that we get the best product for the least amount of money? Are you contemplating that kind of comparison?

It's fine to say they audit somewhere. The audits, as I understand them, are looking at the environmental and at the yield side, all of those questions, and that's fine. All I'm asking is, who's looking after the piggy bank in terms of those audits? Will those audits describe who's getting the most bang for the buck, so to speak, in reforestation?

If you want to deal with it in another section, fine, but I think they're important questions to know as we go through the management. It's always a concern -- one of the things that always bothered me is that politicians, because we have -- I don't think it's a bad thing but I don't know what the solution is.

We talk about, "Will we spend a million dollars on that?" Maybe we only got half a million dollars worth of value out of that million dollars, and it's very hard for us often to know. We have to put the procedures in place to make sure so that there's always the incentive to do the cost-effective thing, do it in the most cost-effective way, rather than to go out and boast, "I spent a million dollars building a bridge that should've cost half a million dollars."

The Vice-Chair: Can we consider voting on the amendment?

Mr Wood: I believe we're ready to vote.

The Vice-Chair: All those in favour of Mr Wood's amendment to section 46? Opposed? Carried.

Any further amendments or discussion to section 46? Seeing none, shall section 46 carry as amended? Opposed? Carried.

Section 47: Any amendments, debate?

Mr Brown: I don't have any amendments, but maybe some questions. This section of the bill that we're dealing with today is actually exactly the same as is this section in the omnibus bill that the House passed last June. Until we started to amend it, it was exactly the same. The way this act works is when this act passes Parliament and is proclaimed, it replaces the Crown Timber Act to which those amendments were made in the spring.

I'm wondering, under this section as it is presently in force in Ontario, if people are paying, as they should, into their trust funds. Are they set up? Are they supervised? Are they working. And are they also able to draw them down as they do the reforestation at the present time?

Mr Wood: At the present time, as you are aware, with the new business relationships that have been negotiated in converting the FMAs to sustainable licences, the money is going in there, as is established in the legislation that's coming through. All that can be done in harmony as the negotiations as the bill passes through, and this will fall in line with what is being done. There are no amendments to this particular section as far as I know. There's no real concern.

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Mr Brown: In short, people are paying into these. What happened to the stumpage money that people have been paying since April 1 of this year? Has it gone into or is it to be credited against these accounts?

Mr Wood: I understand the first negotiated agreement was sometime in September.

Mr Brown: But people have been paying this since April 1, or companies have been paying this.

Mr Wood: The legislation wasn't --

Mr Brown: There will be a large number of companies and individuals that will not be negotiating a new business arrangement with the government. They are essentially the small operators on the crown forest units. Has their money been going towards these renewal trusts? If it hasn't, when will it? Because I don't think you'll be negotiating new business arrangements with those people, I don't suspect. As a matter of fact, I'm pretty sure.

Mr Wood: There's a transition period that takes place, Mr Brown, as we go from one piece of existing legislation to new legislation and when it is enacted. The exact details of how every dollar is being accounted for, I'm sure the information is there, but I don't have it at my fingertips right at this moment.

With the setting up of the funds with the legislation that was passed in June to make trust funds available through legislation, and now with this piece of legislation coming through, I'm sure all of the stumpage fees you're concerned with are going to be accounted for. Whatever portion goes to renewing the forests out there, as every acre is being harvested, it will be renewed. I'm sure it's all being well accounted for. I don't know the exact procedures, I don't have it here at my fingertips, but I'm sure that's being well taken care of.

There has not been that much concern for section 47, because nobody, including the government, has brought any amendments in for changes to it. It seems to have been straightforward.

Mr Brown: That may be so, except that (3)(a) talks about "reimbursement of silvicultural expenses incurred after March 31, 1994." In other words, it's retroactive. I'm trying to figure out how that money got paid if it didn't go in and how it's to be approved.

Mr Grandmaître: How would the books balance?

Mr Brown: Frankly, that question, as the critic, has been addressed to me. People have asked, "When do I start getting the money that I'm putting in?"

Mr Wood: I'm sure I'll be able to get you an answer on that. I don't have it right at my fingertips right now, Mr Brown, but I'm sure the financing department and MNR are going to be able to give you a detailed answer on where that money is sitting and how it's going to be used.

The Vice-Chair: Are we ready to vote? All those in favour of section 47? Opposed? Carried.

Section 48.

Mr Wood: I move that subsection 48(1) of the bill be struck out and the following substituted:

"Forestry futures trust

"(1) If the forestry futures trust is not established under the Crown Timber Act before this act comes into force, the minister may establish in writing a trust to be know in English as the forestry futures trust and in French as fonds de réserve forestier.

"Same

"(1.1) If the forestry futures trust is established under the Crown Timber Act before this act comes into force, the trust is continued under the name forestry futures trust in English and fonds de réserve forestier in French."

Just briefly, the forestry futures trust fund is established under the Crown Timber Act, as amended by Bill 160, the Budget Measures Act, 1994, to carry over without change. The reason for the amendment is to permit the forestry futures trust fund established under the provisions of the Crown Timber Act to be carried over as a forestry futures trust fund under this bill.

The Vice-Chair: Any debate?

Mr Brown: No, other than to ask the parliamentary assistant -- this is obviously just a transitional clause. Are there any forestry futures trusts set up?

Mr Wood: Maybe I should have gone one step farther. The bill currently makes no provision for that, and this is the reason for the amendment.

Mr Brown: When we amended the Crown Timber Act in the spring to put these trusts in place, isn't that what this is doing? If the trust was not established under the amendment to the Crown Timber Act that we made in June, then this permits it to be set up is all I'm saying. Are there any established under the Crown Timber Act?

Mr Wood: It's just a transition, from what I understand, that we're carrying over so it will be clear in Bill 171.

Mr Brown: But my question is, if they weren't established -- I mean, that's what this is about. If they weren't established, this permits them to be established, because this bill will supersede that when it's in place. Are there any in place now?

Mr Wood: My understanding is that it will save having to re-establish the trust funds.

Mr Brown: Yes, well, if one's in place it continues. I'm asking, are there any in place?

Mr Wood: There's a certain potential cost of re-establishing if we didn't --

Mr Brown: I know. I'm just asking, are there any in place today?

Mr Wood: Possibly one.

Mr Brown: Possibly one. Now, for those operating in 1994, what this really requires is half the area fee goes to the forestry trust, as I understand, to your area charge. Half of it is going to be put into the forestry trust. Now if that's the case, will the area fees from March 31, 1994, or April 1, whatever it is, will that money be deposited into the futures trust, half of the area fee?

Mr Wood: I think it's very similar to the question you asked before and I said that I'm going to have to get a detailed answer on that.

Mr Brown: All right. Thanks.

The Vice-Chair: Ready to vote? All those in favour of Mr Wood's amendment to subsection 48(1)? Opposed? Carried.

Further amendments to section 48?

Mr Brown: Mr Chair, I believe they're voting on my resolution in the House right now. If I could, since we have about three minutes, could we adjourn --

The Vice-Chair: Do you expect a vote to take place?

Mr Brown: Yes, they're putting the question right now.

The Vice-Chair: Is it agreeable that we adjourn at this time and come back this afternoon? Agreed.

This committee stands adjourned until this afternoon after routine proceedings.

The committee recessed from 1200 to 1552.

The Vice-Chair: Seeing a quorum present and members from all three parties, this committee will now continue its clause-by-clause consideration of Bill 171. This morning, we were discussing section 47. Is there any further debate on section 47?

Clerk of the Committee: We've already passed that.

Mr Brown: We passed it.

The Vice-Chair: We passed section 47?

Clerk of the Committee: Yes, we're on 48(2), Mr Brown's amendment.

The Vice-Chair: I'm sorry, we've passed section 47. We are on Mr Brown's amendment to section 48. Mr Brown, did you have further comments?

Mr Brown: I haven't made an amendment to section 48.

Clerk of the Committee: No, you have not moved it yet. Read it first, please.

Mr Brown: I move that subsection 48(2) of the bill be amended by adding the following paragraph:

"3.1 The funding of forestry research."

As members will remember, when we were having our hearings in Thunder Bay, Lakehead University came before us and one of the items that it was very concerned about was the fact that forestry research and practical forestry research could not be funded out of the forestry futures trust. What we are doing with this amendment is permitting that use of trust moneys to take place.

We are making this amendment with some concern. As members will recall, the Liberal Party had placed an amendment requiring some portion of the stumpage fee to be directed to the forestry futures trust, rather than just that being a share of the ministry portion of the forest renewal trust to the forestry futures trust, which would have substantially increased the amount of money that would be available in the forestry futures trust. That is why I am addressing some concern about my own amendment, in that I'm concerned that the funding mechanism that we were envisioning being in place the government chose not to make part of the bill.

Nevertheless, I think the possibility of providing for research out of the futures fund makes good sense, at least in a permissive way, for the future of Ontario's forests, which is what the forestry futures fund is about. The fund itself is about renewal of areas that may have either been improperly harvested and not renewed at some point in the far distant past or are victims of some natural catastrophe, a forest fire, an insect infestation or some other natural calamity.

I think it's clear that there may not be enough money in the fund as it is, but there should be some opportunity for the fund to direct moneys to forestry research. As I said, Lakehead University and others have been particularly interested in having some money available from this fund, and it seems that, at least in a permissive way, the forestry futures fund should have some ability to do that, hence the amendment.

Mr Wood: I'll just indicate that the amendment as brought forward is not acceptable in its form. The intention of that section is more for natural disasters and funding of that kind. I also believe that when we get to the next amendment it will clarify it more. We have an amendment under subsection 48(4) that will clarify the situation.

Mr Brown: I'm surprised by the government's reply. This doesn't require any money to be spent on research; it just permits it to be spent on research. It seems to me that if you're talking about the future of Ontario's forests, one of the most necessary components of that is to have good research conducted so that we can be constantly improving the way we renew and harvest our forests. You think of the development of new species or you think of new ways of reforestation; could be new ways of seeding, could be a multitude of different things. It seems all this amendment does is make it permissive.

I don't understand. The parliamentary assistant has argued all the way through this bill that the most permissive and most discretion is the best, and all we are doing here is providing that permission. Could there be some reason given for not making it permissive?

Mr Wood: We believe that it is there without having to have your wording there, Mr Brown.

Mr Brown: You believe that this is permitted?

Mr Wood: If you look at paragraph 48(2)4, that would basically cover it.

Mr Brown: "Such other purposes as may be specified by the minister," which could be anything. Well, I suppose that argument could be made, but I'm sure the people at Lakehead University in the research department are not going to be thrilled with that sort of approach. But that's the explanation I've got.

The Vice-Chair: Are we ready to vote? All those in favour of Mr Brown's amendment?

Mr Brown: Could we have a roll-call vote on this, Mr Chair?

The Vice-Chair: You want a recorded vote? Recorded vote. All those in favour?

Ayes

Arnott, Brown.

The Vice-Chair: All those opposed?

Nays

Dadamo, Hope, Wessenger, Wood.

The Vice-Chair: The amendment is lost. Mr Wood, you have a further amendment to section 48.

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Mr Wood: I move that subsection 48(4) of the bill be amended by striking out "in accordance with the regulations" in the third line and substituting "as required by the minister."

This is basically a cleanup, to tidy things up, to change the wording to "as required by the minister" instead of "in accordance with the regulations."

Mr Brown: That particular amendment puzzles me somewhat in that we would think that to be passed into regulation, it has to be approved by cabinet. We are then devolving that responsibility directly to the minister, or the ministry through the minister, which gives the ministry far more leeway than he or she had before. What would be the reason for vesting more power in the minister rather than in the regulations? I think it would make a number of people a little nervous to know that at a minister's whim they're going to change the way these funds can be managed.

Mr Paul Wessenger (Simcoe Centre): If I might speak from some experience of having sat on the legislative and regulations committee of cabinet and the number of regulations that have to go through, I think there's some interest in streamlining processes by having more routine items dealt with through ministerial order rather than through regulations. The more we do through regulations on administrative matters, the more we're cluttering up the whole regulatory process.

Certainly, having sat on that committee, we have many times made recommendations to particular ministries that matters be dealt with other than through regulation, particularly when they're administrative matters and they're not policy matters. We think really regulations should deal more with policy matters and ministerial orders should deal with administrative matters.

Mr Brown: But I think that's precisely what causes some concern, especially in this case. This act is accompanied by, and I didn't bring them this afternoon, four manuals and a set of regulations. We have over 1,000 pages of accompanying documentation to this particular act which informs our view, because the act is so permissive as it is that, without being able to read the regulations, without being able to look at the manuals, we have a great deal of difficulty in understanding what exactly it is that the minister wants done in Ontario's forests.

What some people call streamlining, as Mr Wessenger says, looks to other people like a lack of due process. If we could be assured that this would only involve administrative matters, I might be happy. But we're talking about payments of funds. They are very large amounts of dollars. We're talking about half the area fees here that are charged to Ontario companies or individuals working in Ontario's forests being dedicated to this fund; if memory serves us, I believe in the neighbourhood of about $15 million.

We're not talking about small matters. The change of administration even and the way that is done, in terms of how the fees are paid, can have a large impact when you're talking about $15 million.

Mr Wood: I understand that there are natural disasters that occur from year to year. We just heard about one that happened in the forests in Quebec. The reason for changing this particular wording is that it'll give the minister the opportunity to be able to deal with those situations fairly quickly and handle them in a good way. But it might have to be dealt with there under the amendments.

Mr Brown: I understand your point. I don't understand, though -- we're talking in this section about paying the fees. We're not talking about expending the fees or expending the moneys in the trust, so I'm not certain how that would work.

For example, just by requiring area fees to be paid at a different time, when you're talking the kind of dollars this could amount to by just shifting it three months, the change in the interest on $15 million is considerable to each company that might be operating here. This would permit the minister just to decide, "I'd like this to happen a little sooner," or "I'd like this to happen a little later." I'm just wondering, when you're talking about that kind of money, why it's not a regulation. That's how it's normally done, I believe.

Mr Wood: The money flows both ways. When you're harvesting, even if it's a disaster, there's money flowing in and there's money flowing out for regeneration.

Mr Brown: But it's not flowing out under subsection (4), it's flowing in.

Mr Wood: Yes.

Mr Brown: I'm a little reluctant to believe that we should give that power to the minister, I guess. I would much prefer it to be governed by the regulations, but I will say no more.

The Vice-Chair: We'll move on. Are we ready to vote? All those in favour of Mr Wood's amendment? Opposed? Carried.

Mr Arnott, do you have an amendment?

Mr Chris Hodgson (Victoria-Haliburton): Yes, he does.

Mr Arnott: I move that subsection 48(8) of the bill be struck out and the following substituted:

"Annual report

"(8) The trust shall report annually to the minister on the financial affairs of the trust and the minister shall table the report in the Legislature."

It is a very self-explanatory amendment, which again enhances, I think, the accountability of the trust to the Legislature.

The Vice-Chair: I like self-explanatory amendments. Are you ready to vote? Mr Hodgson, further explanations?

Mr Hodgson: Yes. Thank you very much, Mr Chair, for your leniency in permitting me to speak here again today.

The trust as it's presently set up reads that it just goes to the chair of the treasury board. These trusts are an integral part of showing credibility in our silviculture regeneration of our forests.

I can't see where the harm would be to just have the minister report annually on the financial affairs of the trust to the Legislature. It gives more public credibility to the sustainability of our forests to have it go directly to the Legislature than just to have it buried in a report to the treasury board.

It's a friendly amendment, as you can all see, and I'm looking forward to the support of the government members on this.

The Vice-Chair: Any further debate?

Mr Wood: I'd just make a comment that, without shooting your amendment down, we feel that the one we have is very similar, coming up right afterwards, and our priority is to have that one, based on the advice that we're getting.

Mr Hodgson: Is it the same?

Mr Wood: Yes.

Mr Wessenger: Mr Chair, just some clarification: What is being struck out in 48(8)? Is anything of significance being struck out? I notice your amendment is (8.1) and the Liberal amendment is similar to (8.1). They all say roughly the same thing, but the PC motion is striking out 48(8), and the other is adding.

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Mr Hodgson: Do you want me to answer that, Mr Chair?

The Vice-Chair: This was a question to Mr Wood.

Mr Wessenger: Yes, if you could answer that.

Mr Wood: Well, there are amendments from all three parties on this one here. The one we are suggesting is the one that the government has brought forward. They're very similar in nature and that is the one that we prefer "adding the following subsection."

Mr Wessenger: I wonder if I could have a copy of the act.

Mr Hodgson: While Paul gets a copy of the act, I'd just like to ask the parliamentary assistant what the difference is between the government amendment and Mr Arnott's amendment, the PC amendment.

The Vice-Chair: Mr Wood?

Interjection.

Mr Hodgson: Yes. In practical terms, what's the difference?

Mr Wessenger: I'd be happy to answer that one.

Mr Hodgson: It's up to the Chair.

The Vice-Chair: Mr Wood has the floor.

Mr Hodgson: It's fine with me if Paul wants to answer that or the parliamentary assistant.

The Vice-Chair: The parliamentary assistant is free to refer it to anyone.

Mr Wessenger: I've just read the existing --

The Vice-Chair: At this point Mr Wood has the floor.

Mr Wood: What we're saying in this particular one is that both the PCs and the Liberals have brought forward amendments on it, but the one that we have brought forward to add on to it, 48(8.1), is cleaner, tidier and one that the government is recommending that we proceed with.

The Vice-Chair: Your amendment's unclean, you say?

Mr Hodgson: You missed the words "progressive and more enlightened." Normally that's added on to every statement. In practical terms, is there a practical difference between the two amendments?

Mr Wessenger: They don't want to offend the chair of the treasury board by taking him out of the circle. That's obvious.

Mr Hodgson: Oh, okay.

Mr Wood: What you're saying is to strike out and we're saying that we'd like to add to it.

The Vice-Chair: Okay, are we clear now?

All those in favour of Mr Arnott's amendment? Opposed? The amendment is lost.

Mr Wood, you have an amendment.

Mr Wood: Yes, and we're talking about the same section.

I move that section 48 of the bill be amended by adding the following subsection:

"Tabling of report

"(8.1) The minister shall submit the report to the Lieutenant Governor in Council and shall table the report in the Legislative Assembly."

Mr Brown: I would just like to indicate that the government is very farsighted and really, I think, and it is frightening, actually sharing our view on this as our amendment is exactly the same as the government's.

The Vice-Chair: Seeing that we're all in unanimity, can we vote? All those in favour of Mr Wood's amendment? Opposed? Carried.

The next amendment, of course, does not need to be debated, because it's the same. Is there any further discussion on section 48?

Mr Brown: We skipped over, as we were doing the amendments, some rather important sections of this bill. I refer to subsection (6) where it says, "The minister may establish a committee to...." I'm wondering what the composition of that committee will be. Has the government given thought to exactly how that committee is to be composed?

Mr Wood: We're looking at what people we need who have scientific knowledge and what should be done with the funds, a knowledge of that. So they're looking at the committee makeup right now and putting it together.

Mr Brown: I think it's of some concern out there, at least I know it's of some concern because I've had the question asked of me what the composition might be. There's a view out there that it should be predominated by the industry which is actually paying the fees. There's a view out there that it should be dominated by the industry, which is actually paying the fees. There's a view out there that it shouldn't be dominated by the industry, it should be dominated by other groups.

I wondered, in the government's view, how they saw it. Will the majority of the committee be from the companies directly involved in this or will it be from academia, citizens' groups, people with other views of the forest? What I really want to know is, will the industry be the majority on the committee or will the industry be part of the committee?

Mr Wood: There's no doubt about it, you're going to have to have a balance on that in order for it to work, Mr Brown. That's quite obvious to me. I don't think it can be weighed one for or one against. Whether it's a majority or minority, I think it's going to have to be a balanced committee that will work and get the job done.

Mr Brown: Is that 50-50, the industry is half and other groups are half? What does that mean?

Mr Wood: I don't know if that has been decided or not yet, but you need people out there who have the experience, and they're going to work for the betterment of making sure the reforestation is done.

Mr Brown: Sometimes people have different views of what the betterment of the forest might be. It would seem to me that we should have some idea what the government's intention is. Is it like kind of a glorified citizens' committee, as we're talking about with the other citizens' committees that are mentioned in this bill, or is it to be -- because this committee has real power. They've got $15 million, more or less, I guess, depending on what area fees tend to be in the future. It's significant to make recommendations about how you spend $15 million. People can get quite exercised about the expenditure of that kind of money.

Mr Wood: The goal is that we end up with the best silviculture being done out there. As I said earlier this morning, people who have experience on the ground and know what they're doing, these are the people who will be on those committees for the betterment, so that we have forests for the next hundreds or thousands of years on a continuous basis.

Mr Brown: I'm not disputing that. It's just that people have different views of what the betterment of the forest is. Sometimes -- more often than not as a matter of fact -- the representation on the committee will determine what the betterment is. You would give us a far higher level of comfort if we had some idea of how the government was, in a broad policy way, viewing these committees. It's fine to say that we'll only appoint people who want a better forest. That's nice, but there are a lot of different views out there, as we know, about what's a better forest.

Mr Wood: I think there's no doubt about it, the comments that you've brought me here today and the other comments that might be, we're going to have to take them all into consideration as the committee is being formulated and finalized. You have the government, but you also have both critics for the Liberals and the Conservative Party. We need input from you people on that.

Mr Brown: Are you suggesting that Mr Hodgson and myself and the minister are going to sit down and set the criteria for who's appointed?

Mr Wood: Well, we've never refused to listen.

Mr Randy R. Hope (Chatham-Kent): Write it down on paper and send it in.

Mr Brown: Good idea, Mr Hope.

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Mr Wessenger: I have a question that perhaps might help; I'm hoping it will clarify. I would assume that this is a committee that is going to make fairly technical advice and I would assume that on that basis the people that will sit on the committee will be those who have expertise. I'll ask that question: Is this committee going to consist of people who have expertise in this area?

Mr Wood: Yes, experience on the ground.

Mr Brown: That's helpful, that's a new thought; what we're talking about is technical people. Is this a committee then of technical people, people who would be registered foresters? If there's anyone who knows about forests it's got to be foresters. Is this a technical committee made up of foresters?

Mr Wood: As I said earlier, the discussion that has been taking place here, that's all going to have to be taken into consideration as we develop the committee.

Mr Hodgson: This has opened up a whole new issue that sort of ties in with the spending of money. How quickly do you envision this committee -- it will have to be along the lines of a citizens' committee, I would think, in deference to Paul's suggestion that it be made up of technical people. These citizens' committees are fundamental in drawing up the management plans for an area.

If a natural disaster goes through, the concern I have about this is, how quickly are we going to be able to react? For instance, if you draw up a five-year plan, you've got your futures funds set up and there's a natural disaster, it's not just a matter of going in and replanting the trees. In lots of cases there's a lot of value left after a natural disaster and if we have to go through a review of the five-year plan and have ministerial approval on it, that wood will rot on the ground before you've gone in and taken it off.

This futures committee could be flexible enough to achieve some economic viability from it.

If, for instance, there's a drought, you'll have trees that will die standing up. By the time you go through the whole process of amending the management plan for that area that timber is effectively rotten in the bush, whereas you can create a lot of employment on the smaller crown units by having the local offices have enough discretionary power with the citizens' committee. If there's silviculture required or money to be spent after that, then I would see that those two committees would get together and say, yes, we can act here rather quickly.

There should be provision in this act to allow local people on the ground to amend a management plan in light of a natural disaster. If that's being addressed in the planning manual and if that's come up in the workshops, let me know because in our area -- I'm not talking about the large FMAs or the huge crown units, we're talking about small management units where they draw up a five-year plan and yet there'll be a natural disaster in year two and it's not flexible enough to allow the local area people to say, yes, there's still some value here. That value could go back into the futures fund if it wasn't envisioned through the regeneration of the stumpage. Those two committees are going to have to work closely together to allow that flexibility, in my opinion.

If you're talking about just getting technical people in, how is that going to affect what the public's sort of grown accustomed to, an open process with lots of appeals? There's going to have to be some kind of override provision for natural disasters and what you determine natural disaster.

Mr Wood: These situations, I understand, are handled in the forest management planning manuals, so a lot of the answers that you're looking for here have been covered as we drafted the manuals. There's a place for amendment that you can act immediately in situations of natural disasters.

Mr Hodgson: Okay. I would envision then that the answer to the question would be more along the lines of a consistent approach to this, that if you've had a natural disaster and it requires money from the futures fund, that would somehow fit in or work with the local citizens' committee group and the local MNR people and the registered forester who drew up the plan and there'd be a coordination.

Mr Wood: There's room for it to act immediately. The language is there in the manuals.

The Vice-Chair: If I just could be helpful, we do have another 30 sections, approximately, to discuss things.

Mr Hodgson: The detail is very important.

The Vice-Chair: We will have a vote. We will have to adjourn at around quarter to 6, since we do have a vote in the House today.

Mr Brown: This particular issue is causing me greater concern all the time. As I understand it, and maybe the parliamentary assistant can help me here, there is but one forestry futures trust. That's correct? There's one for the entire province, rather than in the case of FMAs, where there's one for each management area and whatever, so the renewal funds and the reforestation funds flow to a specific unit.

In this case the money all comes to one central fund. What you could be weighing, as Mr Hodgson has pointed out, is that there may be a natural disaster in Mr Hodgson's area, there may be one in my area, there may be one in your area, and somebody is deciding about this $15 million, about who gets what share of the pie if $15 million isn't enough to cover them all adequately, and that could very well be the case; hopefully it's not, but you never know these things.

So the composition of this committee seems to be, I think, of a lot of concern, because if you read this, it says in clause 48(6)(b):

"The minister may establish a committee to...(b) issue directions to the trustee on how much of the funds of the trust shall be paid out in any year and on what payments to make from those funds to best carry out the criteria established under subsection (5)."

First, I think it's remarkable legal wording, but nevertheless, it suggests to me that they're actually making the direction of the funds. It isn't that they're advising the minister and the minister's then going to say, or advising cabinet and cabinet's going to say; they're actually going to direct the money. So who it is who's in charge of $15 million of public funds is of great concern to everyone.

The bill appeared before the Legislature sometime in June and was passed sometime in June. We've gone through three weeks of public hearings in the summer and then a week of clause-by-clause. We're now five months into the process legislatively and, frankly, I'm shocked the government has no idea on how it's going to appoint trustees, who these people are.

Mr Wood: Well, the discussion is taking place with all of the stakeholders out there to establish them. The discussion that has been taking place here is going to be very helpful, I'm sure, as the committees are being set up. Those discussions are taking place out there right now as to the makeup of the committees.

Mr Hodgson: I'd just like to follow up on what Mr Brown said. It reads to me as if you're giving -- first of all, "The minister may establish a committee," then you're turning around and saying that politically the minister might not want to establish a committee because then he'd be held accountable for who receives the money in any one given year.

So you turn around and hand that to a committee to take the political heat if there have been four disasters and you only have enough money for three.

I'd just like to know if the parliamentary assistant has been privy to any of these discussions on the wording. Was it designed to give the minister that kind of latitude that he could somehow become unaccountable for the spending each year of the futures fund in cases of disasters?

Mr Wood: There are a lot of situations out there where the minister needs advisory committees. He's going to set the criteria, and then the committee is going to be advising him on what's out there, and then they'll report annually on the situation of the trust.

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Mr Hodgson: But my concern here is that we're going to set up another bureaucracy to handle what is essentially, if all things are done rationally -- and I would assume a natural disaster would be determined by the local citizens' committee, the local MNR staff. They would report, put in a claim, to the futures fund that, "We've had a natural disaster."

The funds for paying this committee -- the trustee is fine; I have no complaint about that. The money should be looked after; it should be reported to the Legislature or the Attorney General through the treasury board chairman. It's fine with me. However, then you're going to set up a committee which may be just a political out for the minister having any responsibility for which site was selected, or is it going to have some real teeth?

What's the purpose of this, if you've allowed the minister so much flexibility? Does this mean that he could set the committee up, we'd pay for it for one year, but if he didn't like the decisions, he could change it and go to clause (a)? Or just subsection (6), where it says he "may establish a committee"? Once established, can he disband it? I don't know; I need some clarification on that.

Mr Wood: You're referring back to subsection (5): "Subject to the terms of the trust, the minister shall establish criteria to be used in making payments from the funds of the trust."

Mr Hodgson: Right.

Mr Wood: This whole process is taking place right now as to the makeup of the committee; the stakeholders are being discussed.

Mr Hodgson: That's my point. You're going to have a criterion. A local area, a forest management unit or local staff will make an application based on that criterion, that, "We've had a forest fire in one quarter of our management unit." They'll put in a claim to have some money from the futures fund to regenerate that natural disaster.

Then on top of that you're going to set up another bureaucracy to decide between two equally competing natural disasters that fit the minister's criteria to determine which one gets funding, if there's not enough money to cover both?

Mr Wood: I don't know what arguments I can use to convince you that the plan as spelled out in here we feel is going to do the job. There have been no amendments brought forward by either the Conservative caucus or the Liberal caucus on this particular one. Other than the arguments we're hearing right now, I've tried to convince you that yes, it's going to be handled out there. The debate that we're having and your concerns are all going to be addressed as they establish the committee out there and try to make sure that natural disasters are looked after and that we do have a forest out there that will grow for future years as well.

Mr Hodgson: I follow that, Mr Wood. Just one quick question --

The Vice-Chair: In all fairness, I do think we've had a pretty extensive discussion now on this issue. Frankly, I don't see too much progress happening. If we can kind of close the debate on this section, I think it will be appreciated.

Mr Brown: Mr Chair --

The Vice-Chair: Mr Brown, I do think we've had a quite extensive debate on this.

Mr Brown: That's not your decision to take, Mr Chair.

The Vice-Chair: I think the decision of the Chairman is to give a reasonable amount of time to each section, and very soon I think that reasonableness will have been exhausted.

Mr Brown: First, I may take exception. I understand that the Chair believes that we should move on in an expeditious way, but I think the points that we are raising are important points and I think the attempt by the Chair to -- I mean, there is a method in committee to cut off debate, if the committee itself chooses to do so. It's not up to the Chair to decide whether we've talked enough about it.

I come back to this: Could the parliamentary assistant tell me, will the members of this committee be subject to the order-in-council process? Will they be named through order in council or will they be named just by the minister?

Mr Wood: I understand that they'll be named by the minister.

Mr Brown: We have a situation where the names of the people who are appointed to this committee would not be subject to order in council and therefore there would be no necessity of disclosure of who's even on this committee because it doesn't go through the order-in-council process.

Orders in council are public, but this process would be just -- I want to stress here that this committee isn't a committee to provide advice. It does provide advice on the criteria, but in (b) it directs the trustee. It isn't advising the minister to give so much money to a particular area; it is actually making the direction. We have here, in my view, a tremendously unaccountable committee and I think we're asking quite legitimately, what are the criteria for appointment? What kind of balance will be on this committee?

The parliamentary assistant is a fine fellow and I trust him implicitly and explicitly, but I think the people want to know that he will not always be the parliamentary assistant; 20 years from now maybe someone else will be. The minister may be someone else either tomorrow or 10 years from now, so we're not talking about personalities here. It's not a matter of whether the opposition trusts you or trusts Mr Hampton. It's a matter of whether the legislation will require public accountability.

Mr Wood: We're working on the committee right now. There's no doubt that the annual report will carry the names of the people who are involved in that, I'm sure, because there have to be some names put on the report. We're being asked for it to be developed now and we believe that it'll work.

The Vice-Chair: Mr Hodgson.

Mr Hodgson: Thank you very much, Mr Chair, for your leniency. I just have one quick question, in the interest of time, which we've been reminded of, to the parliamentary assistant: Why is it so vague? Why not in (6), where it starts out, "The minister may establish a committee to," make it so he has to or he doesn't? It gives the minister some latitude, but then it gets even more vague:

"(a) advise the minister on the criteria referred to in subsection (5); and

"(b) issue directions to the trustee on how much of the funds of the trust shall be paid out in any year...."

There's been a lot of thinking, I'm assuming, behind this bill. What's the thinking behind leaving the minister this arbitrary discretion? Either he's going to be accountable or he isn't going to be accountable.

Mr Wood: The particular section that is being spelled out here, I understand that there are no amendments brought forward at this point in time by either the Liberal or the Conservative caucus, changes to it, and there were none brought forward by the government. It's the original language that was drafted. It's been out there now since June 1 and there was no concern or reason for amendments coming forward. This is why I'm surprised that we're having a lengthy discussion on something that there was no real concern on.

Mr Brown: If I can be helpful to the parliamentary assistant, that's exactly why we go through the bill clause by clause and don't just examine the amendments. We are supposed to be responsible for and are charged with the responsibility of examining every clause and sometimes there are things you haven't thought of. This particular issue appears to be one of the more important ones.

Frankly, I think one of the reasons the opposition has not been -- we've been remiss in not doing it. At least I can say that about myself. We should have looked at this more carefully.

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This section of the bill was part of amendments to the Crown Timber Act back in the spring. I know from our point of view it's already in the legislation, so we didn't give it the scrutiny that it probably deserved. It may be one of the best reasons for not adopting omnibus legislation in the Legislature that I know of. I think if we had examined this more carefully when we adopted the omnibus bill in the spring, maybe those questions would have been raised by us in a more timely way from your point of view and maybe we would be getting better answers now.

I'm suggesting that this section might be better stood down until the government can at least give us a policy direction on how it intends to use it. Would the parliamentary assistant be amenable to that suggestion, that we stand it down until the committee meets next so that we can further understand how this is to happen?

Mr Wood: No. As far as we are concerned, the accountability is assured on this particular section through the report to the Legislature. The accountability is there.

Mr Brown: I want to commend the ministry on a recent announcement that was made, the agreements that were made with Avenor and E.B. Eddy. The ministry is quite right in being very happy about those agreements, but those agreements I believe involve about 10 million acres -- I think it's acres; it might be hectares -- of crown forest. That would represent a couple of million dollars to the forest futures fund, a considerable amount of money.

While we've been talking about natural disasters, I think in many years we don't have natural disasters of the kind of scope that would use $15 million and therefore we would be using them to do silviculture in areas that should have had it done a long time ago. I would expect that the people at Avenor and the people at E.B. Eddy, who have contributed huge dollars through area fees to these funds, may have an interest to see a fair bit of work done on their lands rather than on another company's lands.

I just can see that there's an opportunity. Obviously, more reforestation work done on the lands you have tenure on is going to be in your long-term interest, so everybody will be competing for those dollars in terms of silviculture. I'm just trying to get a handle on how that's going to be allocated, because I can see, and I think most members should be able to see, that this will not be a committee that will make easy decisions. They could be very contentious.

Mr Wood: They'll be tough decisions, but we'll have the people there who can make those tough decisions.

The Vice-Chair: Are we ready to take the tough decision on approving this section?

Mr Wood: Yes.

Mr Brown: Well --

Mr Hodgson: Just one comment: It's not a tough decision to set up a body that would say no and allow the minister then to say yes with all the good news, and on the bad news it will be, "The committee made that decision." If that's the intent, that's all I want to know. That's why there are no amendments to it. We just wanted a clarification on why you're setting up this committee.

If it's just an added expense to the taxpayer to avoid political accountability, I don't think it's going to be very effective, because to companies like Avenor or just the general public, they're still going to hold the minister accountable. These decisions are going to be basically made on a technical basis. We have the staff within the ministry already to advise the minister on which ones should have priority and which ones shouldn't. Why are we setting up another bureaucracy to take the political heat off the elected official? It's going to take it completely out of his hands; they're going to, under clause (6)(b), issue directions to the trustee on how much of the funds and where they go in a given year.

They're not going to be accountable only to the minister. I just want to know if it's envisioned under subsection (6), "The minister may establish a committee," that if one year they make a bad decision, that means you've got discretion to do away with the whole committee. Does he have the latitude the next year to say that under subsection (6), "The minister may establish a committee," so therefore he may not have a committee the following year after he set it up? That puts a tremendous amount of political pressure on people who are supposed to make the rational choice.

I think it's an added expense unless you clarify it right out that (a) he should have a committee and (b) here are the criteria that they are selected from and (c) that the appointments are going to be accountable to the Legislature. Otherwise you're just going through a huge expense to take the political decision one step away from the minister to a group of people who won't be accountable.

Mr Brown: We may not even know who they are.

Mr Wood: The only comment I would make is that we are committed as a government to the sustainability of the forests, and this particular section deals with a way that we feel is important to achieve that goal. Whether it be through harvesting of the forest or through natural disasters or whatever, the sustainability of the forests should be done and will be done. We feel that these sections are needed to accomplish that goal.

The Vice-Chair: Okay. I guess we're ready to vote. All those in favour of the amended section?

Mr Brown: Recorded vote, please.

The Vice-Chair: All those in favour of the amended section 48?

Ayes

Dadamo, Hope, Wessenger, White, Wood.

The Vice-Chair: All those opposed?

Nays

Arnott, Brown.

The Vice-Chair: The section is carried.

Section 49: No questions on 49? Mr Brown.

Mr Brown: I take it in section 49 -- maybe the parliamentary assistant could clarify this -- this means that a mobile facility is included? I believe it does. I just want the clarification.

Mr Wood: In my interpretation, the facility needs a forest resource processing facility, whether it's on cement piers or whether it's on tires. I think we had this discussion when we were going through committee on the road, travelling. You have complete paper mills that are floated down some of the huge rivers. They moved them to the resource rather than bringing the resource to the mills.

Mr Brown: So it does mean mobile. It includes mobile.

Mr Wood: I think it's going to be probably clarified further in the regulations, but in my interpretation, yes.

Mr Brown: That's fine.

The Vice-Chair: Okay, we're ready to vote on 49. All those in favour of section 49? Opposed? Carried.

Section 50: Mr Brown.

Mr Brown: I move that section 50 of the bill be amended by inserting "significantly" before "increase" in the second line.

The amendment is just to provide some latitude in operations. The section says, "A person shall not operate or construct a facility, increase the productive capacity of a facility or convert a facility to another type of facility except in accordance with a forest resource processing facility licence issued under this part."

Well, what's "increase"? We think you should add the word "significantly." As the parliamentary assistant would know, there is tremendous change going on in the forest products industry in general, particularly in the pulp and paper business, as they adapt to new environmental regulations etc. It seems to me that any increase, which is the way I read the bill, as you change processes, as you change equipment, I can understand that you want to regulate them, but minor changes I think are counterproductive from the government's point of view. I would suggest that just adding the word "significantly" would help the administration of this particular section in a useful sort of way from the ministry's point of view.

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The Vice-Chair: Do you want to respond, Mr Wood?

Mr Wood: Yes, just briefly. First of all, I want to clarify that the amendment is not acceptable, because we feel the word "significantly" can be better addressed in the regulations by the MNR policy than having it as an amendment in the act. Really, it's too subjective when used in the act. So we're recommending clarification through the regulations and policy rather than an amendment in the act, Mr Brown.

Mr Brown: I appreciate that, but I would wonder that you can address it through the regulations if you say "increase" without any kind of modifier to that word. If you don't modify it, I don't know how you can draw a regulation that would permit one more stick of wood to go through that plant through the regulations. I know it's a vague word, but without that word that is a little bit undefined, I don't know whether you'd get the authority to permit any change that would involve an increase.

Mr Wood: Well, we don't feel that adding the word "significant" or "significantly" in the act is going to address the concern that you have. We feel we can address it in the regulations and by MNR policy out there.

Mr Brown: But what I'm suggesting to you is that "increase" is a very clear word. Increase is increase. "Increase" means anything more. So I'm suggesting you would not have the authority within the regulations that flow from the act to make any kind of regulation that would permit a very minor increase to take place. How would you do that? How would you have the legal authority to permit an increase when the act says you can't?

Mr Wood: The word "significant" or "significantly" is not going to address your concerns as far as I'm concerned.

Mr Brown: At least it gives you the latitude I hear you saying you want. You have no latitude under the way the act is written. Zero. I'm trying to be helpful here, as I always do. Can you explain to me how a regulation can permit an increase that the act says doesn't?

Mr Wood: If you're talking about a forest resource processing facility licence issued under this part, the conditions can be put into the licence, which would deal with the situation that you're talking about.

Mr Brown: What I'm saying is, if you do that, there's got to be an upper limit to what you've permitted in a licence. So if I move above that even the tiniest bit to take advantage of a process or market condition or whatever, then I've got to come back to the ministry at that point and get a new licence. That's probably a waste of time from the ministry's point of view, it certainly is a waste of time for whoever is making the application, and probably will cost everybody a lot of money for a situation that people should just be able to say, "Well, that's okay."

I know in the former act and in practice there was kind of a plus or minus 10 that was often used──maybe I'm wrong──in terms of harvest numbers that could be used in some cases. I'm just wondering how the regulations can accommodate something the act does not seem to accommodate.

Mr Wood: Section 50 deals with the licence. "A person shall not operate or construct a facility," or increase the productivity. I mean, we're talking about at least three different conditions there on that.

When we're talking about the sustainability of the forests, we don't want people out there building facilities that have got no permission to cut or no licences, we don't want them doubling the capacity of their production or we don't want them doing things of this kind without other people knowing what's going on and being able to deal with them on a sustainable basis. That's why we're not supporting the word "significant" or the word "significantly" before the word "increase."

Mr Brown: Well, that's not terribly helpful, but I'll surrender.

Mr Wood: Thank you.

The Vice-Chair: Further debate? All those in favour of Mr Brown's amendment? Opposed? The amendment is lost.

Mr Arnott, I think you have an amendment.

Mr Arnott: I move that section 50 of the bill be struck out and the following substituted:

"Licence required

"50. A person shall not operate or construct a facility, significantly increase the productive capacity of a facility or make a significant conversion to a facility, except in accordance with a forest resource processing facility licence issued under this part."

The Vice-Chair: Do you want to comment, or it's self-explanatory?

Mr Arnott: It's self-explanatory. It's also very similar in substance to the motion that we've already discussed, and the need to provide further clarification──it's self-evident.

The Vice-Chair: Thank you. I appreciate that.

Mr Hodgson: I would just like to add that this is a helpful amendment that Mr Arnott has put forward. It's to help our industries. You know that we have a lot of competition from outside our borders in the wood industry, and if we want to modernize our plants, we want to have them so they operate in an environmentally sound manner, and as new products come on that make this more efficient and more environmentally friendly, our plants should be encouraged to do this.

If they are faced with having to go through a long and tedious licensing process for every little change they make to their mill, I think that would have the opposite effect to what the government's trying to do in encouraging our industry to modernize and keep up with the latest techniques.

That's where I think every little change shouldn't have to go through regulations and inspections and things like that. If there's a significant change or a conversion, then I feel that's fair, that people would look upon that as, yes, that's the government's role to come in and regulate that and ask for an update on their licence. But for just an increase? That's a little draconian.

I think the word "significant" should be in there to leave the local field officers and the MNR a bit of latitude in discussion. We're paying these people salaries to follow government policy and people know the intent of this bill. We should authorize our employees to use their discretion in the field.

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Mr Wood: Just briefly, we just went through the argument when we were talking about the word "significantly" or "significant." These terms and conditions are set out in the licence when the licence is issued to the operator, and the same argument holds.

Mr Brown: Of course, we see a lot of merit in Mr Arnott's amendment, which is similar to the one I just argued, other than that it also makes reference to conversion of a facility. I frankly don't know why MNR wants to nitpick that much. That's what we're talking about here. We are just asking that there be a little flexibility to take advantage of the huge capital spending that's going on in the industry right now as we speak to comply with environmental regulations and to upgrade and make more competitive their own operations.

It just seems to me that around the edges, on the small points, we shouldn't be putting our employees in a position to have to go worry about every little change; significant ones, yes; ones of some import to the industry, of course. We're just looking for latitude, and I think Mr Arnott has made a valuable amendment, but I can see we're not going very far with this.

The Vice-Chair: Are we ready to vote?

Mr Hodgson: On the amendment or on the clause itself?

The Vice-Chair: On the amendment, of course.

Mr Hodgson: Oh, yes, but not on the total.

The Vice-Chair: All those in favour of Mr Arnott's amendment? Opposed? The amendment is lost.

Further discussion on section 50? Mr Hodgson.

Mr Hodgson: Portable sawmills: We didn't have a lot of representation on the road when we had the public hearings, but I've had discussions with people who own portable sawmills. I understand that they're exempt up to a certain amount of material that they cut and process per year. I know it's in the act and that it's in the manuals as well, and I wondered if there's been any thinking on this. I'll just explain it for the sake of the committee members who might not be familiar.

There's a growing trend in southern Ontario to have mobile, portable sawmills. They're a great way for one person to become an entrepreneur and take a portable sawmill. They hire two or three people, and they take advantage of private woodlots and they also will process. I would imagine in the future it'll come up where they'll be bidding with other sawmills in the area for crown land timber to be taken to their mills, up to the contractor. I think this is going to be a growing trend.

I know they're exempt to a certain level. I agree that they should be exempt. There's not a lot of overhead to start them up. They're a great way for employment in rural Ontario. Has there been any thought given to franchising? What's going to happen? We've got an exemption, I believe, for so many cubic metres of wood per year produced from these portable sawmills.

Mr Wood: I understand they are licensed.

Mr Hodgson: There's an exemption, I believe, in one of the manuals to the amount of wood processed from such an operation. I don't have it on the tip of my tongue, but I remember reading it back in August. So every portable sawmill will be licensed by the MNR?

Mr Wood: They are already licensed now, if they're taking wood off crown land, I mean.

Mr Hodgson: If the wood comes off the crown land, but right now the main supply is off of private lands. In the future, you're going to see more of them become available off the crown.

Mr Wood: My information is that they are licensed now and will continue to be licensed.

The Vice-Chair: Are we ready──

Mr Hodgson: No, this is an important process. Are they licensed under this section of the act?

Mr Wood: We're looking for the section you are referring to in the act. We're going to need about five minutes.

Mr Hodgson: I'm willing to give you five minutes, to have a five-minute break here.

The Vice-Chair: Okay. This committee stands adjourned until 5:10.

The committee recessed from 1706 to 1716.

The Vice-Chair: Mr Wood, I understand you have the answer to the question that was posed.

Mr Wood: The question that was brought up was, is there an exemption? I understand that there is about 30 cords or 1,000 cubic metres that there is an exemption on.

Mr Hodgson: They are exempt from the licensing?

Mr Wood: Yes.

Mr Brown: Does that mean that with the exemption there could be a number of mobile sawmills that are exempt from the licence that could form some kind of a co-op and actually be using a significant amount of wood through avoiding the licence on each one? I think the reason for exempting them is that there is a relatively minor amount of wood, but if what you're attempting to do here, through licensing them, is to control the amount of wood used, there may be some people who are more inventive than either you or I might be in terms of their financial arrangements or their corporate arrangements that would permit them to be using more wood than you envisioned. I'm just asking.

Mr Wood: The licence or exemption is to the facility. It's not necessarily to the cutting of the wood. It's not who cuts the wood. You're talking about an exemption for 30 cords or 1,000 cubic metres for that particular facility.

Mr Brown: Then the question is, if you're just talking about the allocation of wood, controlling it, why are we licensing them, period, if the allocation of wood would do the trick? Do you follow what I'm saying? You're saying that doesn't matter in particular because we are allocating the wood, so therefore they can't avoid the process because we have control -- the government, that is -- of the wood supply. If you control the wood supply, then why do we need to license the sawmill? Do you follow me? Is not the wood supply the important thing to control rather than the sawmill? You just made the argument that it didn't matter because you controlled the allocation of wood.

Mr Wood: Where does the wood come from as well? That's your argument, I guess.

Mr Brown: Yes, my argument I guess comes down to the point, conceptually, if you control the allocation of wood, which the ministry does, why do we need to license anything in terms of a processing facility?

Mr Wood: The reason for licensing is to ensure some control over the wood that goes through the mill. Licensing will put some conditions on it. But the exemption that Chris had raised was that there are some small sawmill facilities that are out there in somebody's backyard for small amounts of wood, 30 cords or 1,000 cubic metres, that there is an exemption on.

You've raised another issue: Is there a possibility of a loophole for cooperatives? I guess if somebody thought hard enough, he could probably find a loophole for almost anything.

Mr Brown: And people will think hard enough, is my experience.

Mr Hodgson: That's the purpose of my bringing this up at this time under this section, and I want it to be on the record that I agree with the exemption for small operators. I believe that we have too much regulation and too much work that's going to be required by local staff, with decreasing amounts of revenue to area offices. I think the exemption should be expanded, otherwise we are going to face, as this is a growth industry for rural Ontario -- you can start it up, hire a couple of people, it's good for our local economies and it's going to grow. Eventually people are going to either form co-ops or franchises where they will be in a position not only to bid on private woodlots but also to bid on smaller crown units.

I agree that maybe we should look at the whole issue of licensing wood-processing plants. Really, what the people of Ontario want is: We own the crown land. We have so many trees. We want to make sure that if they're cut, they're cut in a sustainable manner.

What you'll have to revise, if we extend the exemption of processing facilities from being licensed, is how we collect our dues and how we account for the trees that are cut off the people of Ontario's land. Right now, I believe we keep track of the amount of wood that comes off crown land by the companies that process the wood. We scale either at the sawmiller's gate or their weighing station, and they hold back the crown's portion of the stumpage fee. I'm not sure about the area charge, but they retain an amount of money that's auditable. That's how we make sure the people of Ontario get what they're due from the wood that's cut off their land.

Now, I agree with what Mr Brown is saying, that maybe the focus should be on managing how much wood comes off an area of land, without having to rely on the company per se. Free them of this regulation on licensing, but make sure the people of Ontario are paid for the wood that's taken off their land and that it's in accordance with the management plan.

I think the ministry has run into situations like Operation Stump, close by the parliamentary assistant's jurisdiction. In the old days we used to have a scaling system where there was pretty well one scaler by the ministry in the bush for every wood-cutting operation, and that assured the people of Ontario that if you cut a tree, the people were paid their stumpage on that tree.

Then it evolved where there was really a duplication there. The company had a scaler, the people of Ontario had a scaler hired by the government, and it was a very expensive and onerous process. We evolved that to the point now where we're handing over the accounting to the company, and we can audit that trail, but in the future that might not be the way to go if the trend is to have smaller operations. You're not just going to talk about one major sawmill operation, but in fact in southern Ontario we might have numerous two- and three- and four-man portable mills.

One of the advantages that these small operators will have is they won't have the large overhead. From the people of Ontario's point of view, they won't have the resources to then properly account for the wood that came off the crown units. That's why I've made the amendment to section 66 to follow the auditing process for the scaling. It can't just be a sample or a guess or a count. We're going to have to develop a system that when we have an area of land, we're absolutely certain we're getting paid what we're supposed to be getting paid for, and you can't have it just up to the company, because these companies are going to get smaller and there are going to be more of them.

I agree with the exemption; I just want to reiterate that. But I think maybe we should extend the exemption to more and more volumes of wood as time goes on and as we develop the scaling techniques to account for that.

Mr Wood: What you're talking about can be taken care of under the regulations. The regulations can be amended to cover that situation.

Mr Hodgson: Okay, so that is envisioned, that eventually we'll start backing out of the way it's done right today.

Mr Wood: I might just add that when you talk about putting a number of these facilities together, it's not as cost-efficient a way of operating and producing wood. There are better ways of processing large amounts of wood than to have somebody who goes out and buys a bunch of vending machines and has them set up.

Mr Hodgson: I can envision the time, though, that you will see something like a co-op. A lot of the large sawmills have gone out of business in the last 20 to 30 years and there was really no growth in that industry, like in our area of central and southern Ontario, but in the last couple of years you've seen a growth of these portable mills, and if you get somebody with a scaler's licence, they can stamp the wood. They're creating quite a bit of employment.

Basically off private woodlots is where they're getting the wood for it now. The jobbers will take it, based on price in the market, to a small portable mill and saw it up, and these aren't big operations. But in the future they might want to bid on some of the smaller crown units, and in order to do that, you could see the formation of some cooperatives or some other forms of ownership. I think that's a positive step. It'll help create an industry that employs people who, when the big mills shut down, they haven't had a job since then. I think it's a positive step. Technology has gotten to the point where they can have a sawmill on a smaller scale.

Mr Wood: You're not going to get an argument from me on that. This is enabling legislation that can adapt to a changing forest indefinitely. This is one of the reasons why we're bringing in this type of legislation to replace the old timber act. Through the regulations and the legislation, that will deal with those situations.

Mr Brown: In this section, we're talking about the licensing of facilities. Now, is the licensing of the facility directly related to crown timber, or is it all timber? What I'm really asking is, if I or you have a facility that is totally using timber from private lands, do they require the licence, being that this is the crown timber?

Mr Wood: Yes, they require a licence, but this particular legislation is dealing with the Crown Forest Sustainability Act.

Mr Brown: So although this piece of legislation relates to the crown forests, in this instance it means crown timber and private timber. What I'm trying to get at is, we've been talking about the exemption for sawmills. Does that mean -- you said 30 cords was the exemption?

Mr Wood: Yes, there's an exemption for --

Mr Brown: The exemption of 30 cords, is that 30 cords of crown timber or is that 30 cords of all timber?

Mr Wood: All timber.

Mr Brown: How would the crown expect that it could keep track of that? You might be able to keep track of the 30 cords that came off the crown land, but how would you keep track of what else they cut aside from that? Given that these are relatively small operations, you can move them virtually anywhere, they can be on private land, they can do quite a bit of work, and really the crown has no way of knowing whether they cut 30 cords, 300 cords or 3,000 cords, except for the crown has some ability to know that they've cut 30 cords if it's crown timber.

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Mr Wood: They have to report what they're doing.

Mr Brown: So the onus is on the licensee to report.

Mr Wood: There's an exception for under 30 cords, but they have to report what is going on.

Mr Brown: Is there any mechanism -- I'm just following up on Mr Hodgson's comments -- to track the lumber coming to market so that you would have some idea? Although I'm a trusting soul and I trust just about everyone, I'm not sure that every sawmiller will report all of the private timber that he or she may have chosen to cut.

Mr Wood: I would like to take the approach that if you're operating a sawmill out there, you know the rules and regulations and what is expected of you, and that the people will report and say where the wood has come from and how much they've processed. I like to believe that is the case throughout all of Ontario.

Mr Brown: Is there a mechanism within the ministry that, say, occasionally audits local lumberyards, for example, in areas where there may be a fair number of sawmills, so you could tell by going into the local lumberyard that perhaps the yard bought 50 cords or so many thousand board feet from Len Wood Enterprises, sawmillers extraordinaires?

Mr Wood: We just had some press coverage on an investigation that was going on for a year and a half or two years on wood being cut and stumpage being charged and stumpage being paid. I would expect that process would continue on auditing the processing facility and where the wood is coming from.

When you have publicity out there and back dues are being collected and this and that, it would help to deter people from what you're suggesting they might be doing. I don't think they're doing that on a big scale, and people are being caught when it's happening and they're paying the back dues and they're paying fines and the whole bit.

Mr Brown: That's interesting that you raised the subject of the investigation, because I think some of us might wonder about that. There was a huge amount of both MNR time and OPP time spent checking the records and I think actually being out in the countryside watching people avoid scaling stops etc.

There is some concern that there weren't charges laid by the OPP, although from the press report it appeared that it was more than honest mistakes. It appeared to be pretty close to allegedly fraud that we were seeing.

I think one of the things, as we go through this legislation, we should be attempting to do is to make it as self-policing as it can be and make it as difficult to avoid doing what the people of Ontario would want you to do, without causing a great deal of more enforcement expense. Because if you look at what you were talking about in the press reports on Operation Stump, I think we recovered, with penalties, about $175,000 of $200,000 that was due the crown, at least according to the press report. So it appeared to me the people of Ontario lost about $25,000 in the transaction, plus paid for all the enforcement that came to that point.

I guess as we go through a new act, we should be looking for ways to avoid having to spend more money on regulation, more money on policing, more money to get less value, and so trying to eliminate as many loopholes as we can and make the act as straightforward as we can so that the people out there who are enforcing this act can do so in a way that is cost-effective.

Mr Wood: The debate started on, are there exemptions for small portable sawmills that might be out there, and this is what we're trying to address. I know you have a concern, Mr Brown, that there are no amendments we have brought forward to address that particular situation that you're talking about. We're saying it can be handled through the regulations for small operations with 30 cords or less, and if we have to amend the regulations when there is a concern out there, I think we're quite prepared to do it.

Mr Hodgson: I'd just like to bring the debate back to what Mr Wood --

The Vice-Chair: We're still on section 50.

Mr Hodgson: Section 50. The reason why we went into licensing -- this is just a personal observation -- is that in the old days we had a crown management unit that was given to a certain company and it employed 50 or 60 people in a small town, and if another company started up a logging operation or pulp and paper and it employed 50 or 60 or more, and yet there wasn't the wood supply for it, we were into a political mess. They would phone up the MNR and say, "We're going to have to lay off all these people." So, to avoid that problem recurring, we decided we'd license wood processing facilities to make sure that the wood processing facility matched the supply of wood.

What I'm suggesting, and that's why I think this is a positive step, is that we've opened the door a bit to changing that situation because technology has changed. I don't think we need to worry about licensing the facility any more. What we should really state is that "On the crown land we've got an operational plan in place and this is all the wood that we can take off in a sustainable fashion," and avoid this regulation and the bureaucracy required to enforce it. In Operation Stump I believe it was over two years before we got a handle on it.

What I'm suggesting is that in the transition from licensing facilities this is a good step. Start to modernize our accounting system of the scaling so that we don't have to require the goodwill of the receiving facility. Right now, to answer Mr Brown's question, you'll have no way of determining what wood comes off private lands. On the crown units, the way we control that is that we direct it on the licence of the crown unit to a certain mill and then they hold back a reserve to pay the crown its dues. There are elaborate ways to get around it, but basically, through modern auditing, we can check that.

But in the future, what I'm saying is that these smaller mobile portable units are not going to have the wherewithal to keep that paper trail that we'll be able to go through and check. As far as limiting it to 30 cords or linear feet, you're not going to be able to account for it on the private lands because you won't have that paper trail. That's why we've envisioned the exemption, because we're talking about persons who have a woodlot and a farm and you don't want them burdened with having to hire a staff to keep track of what log they cut each week.

What we should worry about, though, is that we know how much wood is coming off that crown land and that we're getting paid our proper amount of money so that we'll have the money to reinvest into that forest as an ecosystem. All I'm saying is that this is a positive step, that one particular aspect of section 50.

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Mr Bisson: Just a quick question to my colleague: You're saying that we should not license mills?

Mr Hodgson: Eventually that's the way it'll go. The portable sawmills are going to be exempt if they're small right now. Really, we should be concerned about the wood supply, where it's going and that we're regenerating it at a sustainable rate, that the forest is sustainable. We've done it the other way around because in the past it was easy to do and we didn't want to run into the problem of having two major plants built without the wood supply there for the future. But in central Ontario right now -- this doesn't apply to the north so much -- we ran out of the wood supply, so a lot of the mills have had to close down. There were 30 or 40.

Through technology, we've been able to produce hundreds of thousands of board feet, which used to require four or five mills with 50 or 60 employees. Now one mill can do that with only maybe 20 or 30 employees. The technology has also allowed for portable sawmills to come in. An entrepreneur can start it up, run his farm part of the year, start up a small portable sawmill, employ two or three people from the community, get a scaler to come in and mark the wood and he can sell the wood either planed or rough. Another person will have a small planer set up. It's a little industry that's going to grow, but I see that as the trend as technology comes along. You're going to have smaller operations.

Therefore, the ministry's envisioned this and it's allowing for the exemption on the small ones right now. At the same time, the auditing will have to be in place when these smaller ones get in a position to bid on crown units.

The Vice-Chair: Are we ready to vote on section 50?

Mr Brown: As we address this section, I think it's critical, because I agree with Mr Hodgson that wood supply has to be the primary concern. The old method of using mills to determine that is going to be antiquated as technology changes, as the economy changes, as the things we need to do as a society change.

I'm really having some difficulty trying to envision how this licensing serves much purpose at all, other than a way to keep track of the wood that's coming out of the crown forests. Particularly in my area for example, there's really only one major consumer of timber and that's an E.B. Eddy plant at Espanola, but a significant portion of the wood they use does come from private land. I don't know whether it's significant, but there's a lot of wood that moves from private land to E.B. Eddy. I don't know why we need to particularly license E.B. Eddy.

A question I think that's out there in the future for us to grapple with is the idea that controlling the mills is going to control anything or protect anybody or help the economy in any way or keep a community going that wasn't going before.

I was pleased that the parliamentary assistant provided me with one of the calls for proposals that was made for the recent mills as I had requested. As I went through that, I was still a little unclear. We're talking about new, large, modern manufacturing plants for oriented strandboard. I was unclear even after having read that exactly how my proposal, if I had made one, was going to be stacked up against your proposal or Mr Hodgson's. The criteria were there, but it was vague enough that I would not have a high degree of comfort that we had decided on the correct proposal.

You just didn't know, at least as you stacked it up against the criteria. I must assume the ministry made the wise choice in all those cases, but we are still back at looking at the mill rather than at the supply of wood. This is the Crown Forest Sustainability Act. What we're worried about is the wood supply more than anything, the fact that it's got to be regenerated, that there has to be a sustainable yield over time and that the forest has to reflect the ecosystem values we have today.

I'm just saying that the government's view of how this is to work may be antiquated almost before we get out of the stable.

Mr Hodgson: I realize it's getting close to the adjournment time. I'd just like to draw to the government's attention that in the next couple of weeks we're going to be trying to promote this new sustainable forests act to the world, that we're managing our forests and that wood products coming out of Ontario are being made in a sustainable fashion. This afternoon I noticed at the north wing entrance that we put in two large Christmas trees. They're using up 12- to 14-inch trees that are just used to put lights on, and then I imagine they'll be discarded. I was wondering if somebody could recommend we just plant a couple of trees out at the north wing doors for future Christmas tree lights.

Mr Bisson: I can tell you that any tree with a 12- or 14-inch butt is not going to make it into my house.

Mr Hodgson: It's outside the north wing of the Parliament Building here today. They had to fit them for size, and so they chopped off the butts. I just thought that somebody with influence with that department of the government could mention to them in the future to maybe just plant a couple of trees. Maybe that's a way to herald the new forest sustainability act.

Mr Wood: You can always relay your message to the Speaker of the House. He's in charge of the grounds, I believe.

Mr Hodgson: I understand it's happened other years. I just haven't been here before, but I'm assuming it's happened other years.

The Vice-Chair: Are we ready to vote on section 50, where we're still at? All those in favour of section 50? Opposed? Carried.

Section 51, and I understand, Mr Arnott, you have an amendment.

Mr Arnott: Mr Chairman, how much time do we have remaining?

The Vice-Chair: Well, the House is still debating.

Mr Arnott: I move that section 51 of the bill be amended by adding the following subsection:

"Sawmill co-products

"(3) Any forest resource processing facility licence may require the utilization in whole or in part of sawmill co-products in preference to logs of sawlog size and quality."

The Vice-Chair: This is self-explanatory. Would you like to comment?

Mr Arnott: I think Mr Hodgson wants to make some comments.

Mr Hodgson: This is a concern that we heard numerous times on our public hearings. This goes to the highest and best use of a wood product. There's a market mechanism in here, and I'm not sure how that will fit in, but it does remind me of the Christmas trees being cut down and placed at the north wing doors, that maybe that's not the highest and best use for 30-foot-high trees with 12- to 14-inch butts; when all wood products coming from our forests are yielded in a sustainable fashion, if that's the highest and best use of a tree that's taken 20 or 30 years to grow. I think it would be more in line that we plant trees that could be used year after year in a sustainable manner to hang some lights on.

The sawlog, this brings into question the whole operation of chipping. We heard quite a few comments that chippers will go in and chip a 20-inch tree when its best use might be to have that sorted and work out an agreement. I imagine it happens in most cases that the companies get together, work out an agreement that they'll truck and deliver sawlogs and they'll take the chips and there's sort of an arrangement. The sawmills would like to see something put in this new act to recognize that the sawlog size, where we're producing lumber, we're adding more value to that particular piece of wood, and that other wood should be used for pulp and paper. That's what it's trying to address here.

Mr Wood: You raised the issue of the Christmas trees again. I guess we could look into it, but they probably come from a private commercial operation out there, some commercial operation that's running a Christmas tree farm, as we see truckloads of them travelling around the province. These probably came from there as well.

Mr Hodgson: I'm pleased to hear the government's supporting local industries.

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Mr Wood: I'd just like to add that the government doesn't feel that this amendment is acceptable. I know the issue that was raised throughout northwestern Ontario, but we heard both sides of the argument as to what is the best end use or what is the best dollar you can get for your finished product, whether it be in paper or whether it be in lumber, depending on the fluctuation of prices all over the place. So we've heard the whole argument. For that reason, we're not going to accept the amendment that is brought forward.

Mr Hodgson: I would just like to thank the parliamentary assistant for clarifying that those Christmas trees probably came off private commercial growers. My point is that that's not the highest and best use for a tree of that quality when we're promoting sustainable forestry practices. I think it would be more in line to plant trees out there.

Mr Brown: I'll just add, Mr Hodgson, obviously, though, the person who sold the trees thought it was the highest and best use of that tree.

Interjection.

Mr Brown: We digress. As I look at this amendment, I think we all agree that the best use of the logs should be, first, to the sawmill and, second, to the pulp industry, and that's what you're attempting to do. I'm not so sure this section really is the place to do it; none the less, it is an interesting amendment that we should consider.

But to agree with Mr Wood, as I usually do, I would suggest that we have some problem with the wording; "sawlog size," for example. We have heard that people use trees down to three inches for sawlogs. I might look at a three-inch tree and suggest to you that that's maybe not what I would think is a sawlog, but obviously the economics of a particular operation would say it is a sawlog.

We have some difficulty in the differentiation is all I'm suggesting to Mr Hodgson, and we also have and have heard that there are some difficulties in the field. There may be in a given stand of trees very few that actually are sawlogs, and just because there are three or four on a hundred hectares of land, it becomes commercially impossible to direct those four to the sawmill and the rest to the pulp mill.

We've heard a lot of discussion and yet we haven't seemed to end up with a definition that directs "sawlog" in a way that will work in the real world. While we have a lot of sympathy, we're having some difficulty understanding exactly how this would work.

The Vice-Chair: Are we ready to vote? All those in favour of Mr Arnott's amendment? Opposed? The amendment is lost.

Further debate to section 51? Seeing none, shall section 51 carry? Carried.

Section 52: Mr Brown, you have an amendment.

Mr Brown: I move that section 52 of the bill be amended by striking out the portion before clause (a) and substituting the following:

"Compliance with management plan or work schedule

"(1) If forest operations conducted in a crown forest are contrary to a forest resource management plan or an annual work schedule approved by the minister, the minister may by order,"

The Vice-Chair: Comments?

Mr Brown: There will be in a second, Mr Chair, if you'd give me a moment. It's another one of those ones where I'm not sure why I'm doing it. I think this is another one that explains itself.

The Vice-Chair: Any debate on this self-explanatory amendment?

Mr Hodgson: Just one second. I'd like to have time to read the change.

Mr Bisson: Can we vote now and talk after? I'd suggest, Mr Chair, that we can vote now and they can read --

The Vice-Chair: Mr Hodgson, have you had an opportunity to look at it?

Mr Hodgson: Mr Bisson's comment says that we should vote now. I'm surprised they didn't put this in the omnibus Bill 175.

The Vice-Chair: My question is, have you had time to look at it?

Mr Bisson: My comment was that we should vote now and --

The Vice-Chair: Mr Bisson, you don't have the floor.

Mr Hodgson: It's Mr Brown's amendment and I believe he wants to speak to it.

Mr Brown: The significant change here is that what we are doing is defining it more carefully, because we have the words in the original clause that say "or are likely to cause loss or damage that impairs or is likely to impair...."

The difficulty we have with that is the definition of "loss or damage." We have been unsuccessful over the course of these hearings and clause-by-clause examination in defining the words "loss or damage." By the very nature of what a forest operation does, virtually anyone could argue that the loss of a tree is a loss of a tree. There is loss and there is damage by the very nature of what you are doing. What we're doing, what we think would be much clearer, is to speak to following the management plan that's laid out and the annual work schedule rather than to talk about the vagaries of what a loss or damage might be.

If the parliamentary assistant can give us some comfort regarding the words "loss or damage," I would be happy, but it seems to us that what you want is that there's a forest resource management plan put in place and an annual work schedule, and if an operator is to deviate from those, then of course the implication is that you stop operations, you change them, whatever.

It seems to us that this is a far clearer way to approach the problem so that there's some understanding by the operator in the forest about what he or she must do in their operations. You're defining it as loss or damage, but there's no definition of loss or damage in the bill. Maybe you could give us some examples of how you could follow a forest management plan and at the same time have a loss or damage as long as you are following the plan and following the work schedule.

Mr Wood: What we're talking about here is the sustainability of the forest, and the plan is that you don't allow harvesting techniques or operations out there such that you're not going to be able to renew the forest. It's happened when they've gone from horses to Caterpillar tractors, to big, wide tractors, to cutting in different seasons when they're harvesting. There are so many different ways that you can damage the forest that it's very difficult to renew it.

Mr Brown: So what you're telling me, though, is that it is possible to follow the forest operations plan and to follow the annual work schedule, both of which have been approved by the Minister of Natural Resources, and cause loss or damage?

Mr Wood: There's a forestry compliance manual that is being adopted jointly by the industry out there that covers the area of loss or damage. That answers your question, I believe.

Mr Brown: But we were told last week that there would be no compliance manual.

Mr Wood: Well, referred to as a handbook.

Mr Brown: Oh. So in the handbook, then, we are going to define "loss or damage."

We're talking about an intrusive operation in a forest. Cutting trees, by nature, causes damage and loss. That's what it does. So to define what could stop an operation from working under damage or loss, I don't know how you do it. I think you'd do it by saying, "You haven't followed the plan and you haven't followed the work schedule; therefore, you must stop your operation," etc. But damage or loss? I mean, my goodness, what is that?

Mr Wood: We're looking at the sustainability of the forests out there. As you harvest an acre of trees, you want to make sure that there can be an acre regenerated and growing again. If you're doing damage or things where you cannot continue the sustainability of that forest, we're saying we don't want it to happen.

Mr Brown: What I'm asking is, is it possible to follow the forest management plan and the work schedule -- in other words, do everything you said you would do -- and still cause damage or loss? Is it possible to do that? Is it conceivable you could do that? I agree with all the sustainability; that's what this whole thing is about. What I'm telling you is, we are wondering what "damage or loss" is, because obviously there is damage or loss to the forest just by operating in the forest.

But if you've done what you've said you would do in the work schedule, if you've done it in accordance with the management plan, you have met all the criteria, as an operator, that you should have met, and yet you're going to be stopped for some vague definition of damage or loss, which could be anything --

The Vice-Chair: Gentlemen, we will have to continue this discussion next week. This committee stands adjourned until 10 o'clock next Thursday.

The committee adjourned at 1803.