Legislative Assembly of Ontario

INTENDED APPOINTMENTS

PAT O'NEILL

ELEANOR CLITHEROE

NHUNG TOMKINS

CONTENTS

Wednesday 1 December 1993

Intended appointments

Pat O'Neill, Metropolitan Toronto Housing Authority

Eleanor Clitheroe, Ontario Hydro

Nhung Tomkins, Board of Inquiry

STANDING COMMITTEE ON GOVERNMENT AGENCIES

*Chair / Présidente: Marland, Margaret (Mississauga South/-Sud PC)

*Acting Chair / Président suppléant: Marchese, Rosario (Fort York ND)

*Vice-Chair / Vice-Président: McLean, Allan K. (Simcoe East/-Est PC)

*Bradley, James J. (St Catharines L)

*Carter, Jenny (Peterborough ND)

Cleary, John C. (Cornwall L)

Curling, Alvin (Scarborough North/-Nord L)

*Frankford, Robert (Scarborough East/-Est ND)

*Harrington, Margaret H. (Niagara Falls ND)

*Mammoliti, George (Yorkview ND)

Waters, Daniel (Muskoka-Georgian Bay/Muskoka-Baie-Georgienne ND)

Witmer, Elizabeth (Waterloo North/-Nord PC)

*In attendance / présents

Substitutions present/ Membres remplaçants présents:

Conway, Sean G. (Renfrew North/-Nord L) for Mr Curling

Cordiano, Joseph (Lawrence L) for Mr Cleary

Wilson, Gary (Kingston and The Islands/Kingston et Les Îles ND) for Mr Waters

Clerk / Greffière: Mellor, Lynn

Staff / Personnel: Yeager, Lewis, research officer, Legislative Research Service

The committee met at 1004 in room 228.

INTENDED APPOINTMENTS

The Vice-Chair (Mr Allan K. McLean): I ask the standing committee on government agencies to come to order.

PAT O'NEILL

Review of intended appointment, selected by the official opposition: Pat O'Neill, intended appointee as chair, Metropolitan Toronto Housing Authority.

The Vice-Chair: This morning on our agenda we have Pat O'Neill, the intended appointee as chair of the Metropolitan Toronto Housing Authority. Pat, have a seat at the front, please, and if you have an opening statement or any remarks you wanted to make, you could do so at this time.

Ms Pat O'Neill: No, I have no opening statement. I'm just glad to be here and glad to answer questions.

The Vice-Chair: Thank you. Now we will go into the questions. This selection was picked by the official opposition. We will ask them to proceed at this time. I would suggest we take 10 minutes each round and then another round of 10 minutes, and that's the 20 minutes each. Okay? Carry on, sir.

Mr Joseph Cordiano (Lawrence): Welcome to the committee. I suppose I should congratulate you, first of all, because obviously you're going to be appointed to this position. What we're about to do is essentially rubber-stamp the appointment the government has made.

Unfortunately, or fortunately, this is the process we're involved with, but let me just say that the government has the right to appoint the people it sees fit to its positions that are designated to be appointed. Having said that, I think at the end of the day people will judge the government on its discretion and its ability to make the appropriate decisions and appointments. Obviously, this is one of those situations where the government is going to be judged by the public at large. That goes without saying.

Mr George Mammoliti (Yorkview): Hurry up.

Mr Cordiano: I'm being interrupted, Mr Chairman. If this doesn't sound like the appropriate or intended message, then I'm very happy that it does not sit well with you.

The Vice-Chair: Interruptions are not accepted.

Mr Mammoliti: He's making a statement.

The Vice-Chair: Mr Cordiano, continue with your questions.

Mr Cordiano: Having said that, let's be perfectly honest. The main concern in all of this from our party's point of view is that this is a highly partisan appointment. There is no doubt in our minds that this is the case, and I think the public perception of this would be as a highly partisan appointment. How do you feel about that?

Ms Pat O'Neill: Actually, Mr Cordiano, having been part of the public most of my life, I understand that there may be a concern in the public about that, and I did in fact consider that matter very seriously before I decided to apply, after Jean had resigned.

Mr Cordiano: Jean Augustine.

Ms Pat O'Neill: Jean Augustine, yes. I thought about it a great deal. I looked at my own qualifications, discussed it with a few close friends and then thought about the previous chair, Ms Augustine. Again, that criticism could have been levelled at that time. However, those of us in the community who know Jean and who had worked with her were all very pleased about her appointment as chair.

Mr Cordiano: Can I ask you to clarify how the appointment of Jean Augustine, the previous chair, would have been considered partisan at the time?

Ms Pat O'Neill: Those of us who knew her knew that she was a Liberal, but we didn't feel that was a handicap.

Mr Cordiano: She did not hold elected office; she was not in a position that would have labelled her of one political persuasion or another. I don't believe that was the case. She was appointed by a Liberal administration, there's no doubt.

Listen, the government of the day wants to allow for partisanship in the civil service and in other areas, and that may be appropriate. All I'm suggesting is that the public perception is such that someone who holds an elected office -- and this is of concern to all of us as members. It's an issue I think we have to deal with.

I'm not suggesting for a moment that anyone who held elected office should never be appointed to any position. We'll come to the other concerns I have in a moment, but I would like you to address that concern, because the last thing I would want for the MTHA is to have a situation where its chair is perceived to be highly partisan and therefore unable or unwilling to bend to accommodate other views and philosophically different positions on matters.

If that is to be the style of governance of this administration, and there is a disturbing pattern in that direction, from our point of view, then we would want to try and dispel that. I would like to give you the opportunity to do just that, dispel that perception. That's why I'm here this morning, to give you that opportunity.

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Ms Pat O'Neill: I appreciate that, Mr Cordiano. Again I would say that I'm aware it may appear to be a problem. However, I would hope that people would look at my record. I would hope people look at the fact that this is not the first appointment I've received. I was appointed to the North York planning board by my peers, who are hardly a partisan group. I was also appointed by the last Liberal administration to the Custody Review Board. I have received appointments before, and I would like to think it was due in small part at least to merit.

Mr Cordiano: That may very well be the case, but given the fact that you recently worked for one of the members of the governing party that happens to be in power and who sits on the government benches -- Mr Perruzza, actually; you worked for him in his constituency office -- that is a highly partisan position to be in. You deal with the public on a daily basis, but there is an understanding when the public goes to a constituency office that they're entering the office of a member of a particular party, notwithstanding that the office should never deal in a partisan way. None the less, it is understood that the person holds political office as a result of his or her political persuasion, so that's another concern I have. In a way, that sends that kind of signal, that kind of perception.

How do you respond to that, given that you were just working for an MPP in that capacity?

Ms Pat O'Neill: I would say I probably got the job in that office because of my knowledge of the community and because it was felt that I could be helpful to constituents. I think many of us who have served at the local level of government realize that partisan politics is a very small part of any deliberation. The key deliberation is looking at the public good, serving the constituents.

I've served in a number of capacities over the years, some of which have been a political role, some of which have not. My experience is that one does what one needs to do. Certainly this role is a non-partisan role and there are very clear rules that guide the office of the chair. I think I have sufficient experience to know what is appropriate and what isn't, and I hope to be able to prove that.

Mr Cordiano: Okay. Let me move on.

Some of the substantive matters regarding the MTHA: One of the concerns I have is that MTHA housing stock is becoming quite old and dilapidated. In my riding alone there is quite a number of MTHA units which need some retrofitting and renovating, refurbishing. This is going to be quite a challenge for the present administration and any future administrations.

Trying to keep those units in good shape and bring them up to a standard which is acceptable is going to be rather difficult, particularly given the fact that the present administration is putting most of its effort, in fact almost its entire effort, towards the creation of new housing stock in the form of non-profit housing and therefore very few resources are left over for what's to be maintained in the MTHA stock. What are your views on this and how will you approach this problem?

Ms Pat O'Neill: The aging housing stock is one of the major challenges that will be faced over the next few years in terms of the repairs needed to keep the housing stock adequate.

I think there is a number of things that can be done with regard to looking at what has to happen in most of the housing. I firmly believe that it's really important to involve the people most directly concerned, that is, the residents and of course the front-line staff, who generally would know the problems much better than those who are not at the front line.

Mr Cordiano: Knowing the problems is certainly a starting point, but we know what the problems are. Trying to solve them is really a question of the willingness to do that, and I think it's going to be your task to put pressure on the government to do just that. If that's not what your intent is, then obviously we're not going to solve this problem.

The Vice-Chair: Mrs Marland, you're next on the list.

Mrs Margaret Marland (Mississauga South): Good morning, Ms O'Neill. How do you feel about being appointed chair of an organization which you have not been a member of?

Ms Pat O'Neill: I realize that it's a challenge and that I'm going to have a lot of homework to do to be brought up to speed on some of the more pressing issues, but I'm quite prepared to put in the work that's necessary to do that. I am aware generally of a number of the issues, but obviously there are a lot of specifics I don't know. It will be a challenge.

Mrs Marland: Don't you think possibly it would be more fair if the chair of a multimillion-dollar organization had had some experience, even if it was one year, sitting as a member of that board first?

Ms Pat O'Neill: I believe that was tried and unfortunately didn't work.

Mrs Marland: When was it tried?

Ms Pat O'Neill: I believe Anne Smith was originally nominated for the position, but unfortunately it didn't materialize.

Mrs Marland: Anne Smith was never appointed chair.

Ms Pat O'Neill: No, no, but I gather that she was the preferred candidate initially, and she had obviously had the experience on the board. Yes, you're right, I think it's much more preferable to have somebody who has had the experience on the board and who is up to speed with the problems. I am not in the position to say why that didn't happen.

Mrs Marland: For your information, Anne Smith hadn't even been on the board a year when she was recommended for appointment. She's not an example.

How do you think 12 other board members are going to feel about the fact that they have tenure and experience on that authority, have committed their services to MTHA, for the most part as volunteers, and you're coming in at -- what salary are you going to be paid, by the way?

Ms Pat O'Neill: It will be $65,000.

Mrs Marland: So you're a little below the bottom edge of the range then.

Ms Pat O'Neill: No, slightly above the bottom end.

Mrs Marland: Okay. How do you think the other board members will feel about having you come in and be paid as a full-time chair without any experience when they've put in their time as volunteers and served some tenure?

Ms Pat O'Neill: I don't know whether any of the other members had applied, so I don't know whether they in fact wanted to take on the role, but certainly one of the first things I would anticipate doing would be to meet with the board and try to establish a cooperative method of working.

Mrs Marland: Obviously, you're walking into a job that carries with it a great deal of responsibility. That's why the direct inference has been made about having had previous experience with that particular organization. At least those are the concerns that have been expressed in the phone calls to me.

I think I'll ask you about a recent situation that was very difficult, that being the meeting of the Organization of Ethnic Employees of the Metropolitan Toronto Housing Authority. First of all, do you approve of there being an Organization of Ethnic Employees within the Metropolitan Toronto Housing Authority?

Ms Pat O'Neill: I see no difficulty with that, if they have particular concerns.

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Mrs Marland: So you think it's okay for one group of employees to have an organization within a larger organization. Is there going to be an organization of non-ethnic employees, do you know?

Ms Pat O'Neill: There may well be. I'm afraid I'm not familiar with all the organizations that currently exist within the authority, so I really could not answer that.

Mr Cordiano: What does "non-ethnic" mean?

Mrs Marland: Do you think a group of employees can organize within an organization --

Interjections.

Mrs Marland: Excuse me. Being chair, you're going to be responsible for the operating of this authority. Already you know there is a group within a group. Are you happy to know that a group of employees is organizing internally? Is there an organization of non-ethnic employees or any other group? I mean, do you think that's healthy, for employees to segment themselves?

Ms Pat O'Neill: I certainly prefer organizations where people work cooperatively and where everyone is working together to solve problems. I feel that is the best method of working, and certainly in most of the organizations I've worked with we've tried to be inclusive rather than exclusive and tried to have all staff members work together on problem-solving.

Mrs Marland: Having said that, do you condone this Organization of Ethnic Employees at MTHA?

Ms Pat O'Neill: Again, Mrs Marland, I'm not familiar enough at this point to know why they were meeting, what their specific concerns were, and therefore I'm not in a position to make a judgement on that at this time.

Mrs Marland: You're taking over tomorrow and you haven't investigated this situation, although it's been headline news?

Ms Pat O'Neill: Mrs Marland, I would think it would be totally improper for me, before I'd been before this committee, to ask for any internal information on the operation of MTHA at all.

Mrs Marland: Oh, really?

Ms Pat O'Neill: Absolutely. I've read a number of the public reports. I feel it would be absolutely improper and an insult to this committee to ask for internal documents before this committee had interviewed me.

Mrs Marland: Most people who come before this committee really do their homework so they can answer questions on the organization to which they are appointed. They want to be in a position where they can give answers to questions from this committee because of the importance of the appointments. If you're going to be paid $65,000 a year and you're going to have all the other per diem benefits that accrue to that position, I would think you would have looked into the organization which you've been appointed to.

Ms Pat O'Neill: As I said, Mrs Marland, I've looked at all the public reports I've been able to get hold of. I felt it would not be proper for me to look at internal documents until the appointment was confirmed. I believe in process, and I do not believe in bypassing part of that process. I think this committee is an important part of the process.

Mrs Marland: Do you think it was appropriate for the invitation to this meeting of the Organization of Ethnic Employees to have gone out with the pay stubs of the employees of MTHA?

I really find it interesting when the government feeds the government members questions. I really find that interesting.

Mr Mammoliti: I find it offensive that you're bordering on racism here. That's what you're doing.

Mrs Marland: I find it offensive that the government members can't think up their own questions and they're fed their questions by the Premier's secretariat, which is exactly what's happening before my eyes.

Interjections.

The Vice-Chair: Interjections are not in order. I would hope that you would respect the Chair.

Mrs Marland: We'll see when Mr Marchese, who is perfectly capable of asking his own questions, asks his question.

Anyway, do you think it's appropriate for an organization like MTHA to send invitations out with their pay stubs to a meeting of a certain group of employees?

Ms Pat O'Neill: Again, Mrs Marland, I have explained to you why I have very definitely not involved myself in internal and private things at this point.

Mrs Marland: Well, remove it from MTHA, then. You're going to head a large corporation. Do you think it's okay for that corporation to send invitations out with their pay stubs to a segment of employees within that organization?

Ms Pat O'Neill: I don't see any great difficulty with that, no.

Mrs Marland: You don't see any difficulty with it?

Ms Pat O'Neill: No.

Mrs Marland: Have you any concern about the people who don't fall in that group, who receive the invitation and know they're not eligible to attend a meeting within that organization?

Ms Pat O'Neill: I think within any organization there are a number of groups who are working on specific problems. Some groups experience different problems from others and therefore need to meet to talk about those problems. I would not expect there to be general interest in, say, the disabilities group that would have specific interest to those members.

Mrs Marland: Do you think they have to organize to deal with it? My point is, if you're head of this organization, wouldn't you prefer that employees with a problem come directly to you rather than organize within themselves and segment themselves from other employees?

Ms Pat O'Neill: I would certainly hope that employees would feel comfortable enough in coming to me with any concerns they have.

The Vice-Chair: Mr Mammoliti is next. Thank you, Mrs Marland.

Mr Mammoliti: First of all, in reference to questions that were asked earlier, I negotiated a collective agreement when I was with MTHA and that gave employees the right to access to invitations through payroll. In answer to Mrs Marland's question, it's a negotiated right that both OPSEU and CUPE employees have on staff. We're bordering on talking about those types of rights and I don't think that's our jurisdiction in this particular committee.

Mrs Marland: It's a contractual right?

Mr Mammoliti: In answering your question, it's a negotiated right to have those things come out in the form of flyers through payroll, okay? Second, I have something of a concern -- I was going to do this on a point of order but I'll take my time here -- in terms of "ethnic." I'd like to know what "non-ethnic" means to Mrs Marland. I'd like her to define what "non-ethnic" means.

The Vice-Chair: Order, please. We're here to question and talk about the witnesses before us, not to direct questions to other members.

Mr Mammoliti: Okay, that's fine. Ms O'Neill, I want to thank you very much for coming in front of the committee. I've had the pleasure of knowing you for quite some time professionally and I know you will give your best and I know you'll do a wonderful job and try your best to work with the people at MTHA.

Very quickly, as you know, in answer to Mr Cordiano's questions about the older buildings and the role you're going to play in terms of trying to resolve some of the problems that exist in terms of maintenance and upkeep and how you're going to divvy up the $250-million budget over 110 projects across the city -- quite the task, we know that -- I have already made a recommendation to the Legislature in the form of a resolution which was adopted unanimously. I believe the Ministry of Housing is now looking at that resolution and trying to adopt it, from what I can understand.

That resolution talks about just that, dealing with the problems on those 110 different projects. I suggested that the best way to deal with it is to create two or three pilot projects that would allow tenant, staff, union participation in terms of decision-making and do that in the form of a co-op or non-profit type of system, where there is a board of directors and the decisions won't be coming from a tower somewhere downtown but grass-roots decision-making.

There has been some discussion about this in my community and others. I'd like your opinion on whether my suggestion is valid. Is it worthwhile? I'd also like to quash some rumours at this point that Mr Mammoliti's trying to do away with jobs in the Ministry of Housing. That's not my intent, but to try and spend the money in the area that I think is the most important, and that's the grass-roots maintenance, tenant decision-making, and getting the work done, getting those toilets fixed without having to wait for two weeks. How do you feel about my resolution? I think you've had the opportunity to look at it, anyway.

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Ms Pat O'Neill: I have, and the working group's report. I've also read the report of the working group on some co-op conversion. Yes, I think it's a very good idea to try some pilot projects to see how that would work, but more important, to encourage and assist residents and staff in terms of many aspects of the management of projects. It's essential in really turning the tables around in terms of the future of the whole of MTHA. I know as a former tenant the frustration of meeting monthly with management, offering suggestions which we felt would be very practical suggestions in terms of our own neighbourhood, and six months later to receive the answer no, with never an explanation. Naturally, most of the people who have some leadership skills and abilities didn't stay too long.

It's really important to involve people. The people most affected obviously are the residents and the front-line staff. They're the people who are out there. They not only see the problems; they very often have the practical answers to solve those problems. If you look at industrial development in Japan and Germany you'll see that those kinds of models where the front-line people really do have some input into how changes can be effected, which make the workplace better, which achieve economies, and which generally achieve a good partnership, are the most effective industries. I think the same can happen in MTHA. It's essential to involve residents and front-line staff in that kind of decision-making. They know the problems and they also have very many good, worthwhile suggestions on how to solve the problems. I think it's essential.

The Vice-Chair: Mr Mammoliti, we have more colleagues who want to ask questions. You've got three and a half minutes left in this round.

Mr Mammoliti: We do have an hour, though, right? I'll give my colleagues a chance.

The Vice-Chair: Mr Frankford is next.

Mr Robert Frankford (Scarborough East): My riding of Scarborough East has many similarities to the North York area that I'm sure you're most familiar with, and we have quite a number of MTHA buildings. I hear a lot of comments about them, both from residents who come into our office and the broader community. I think there are a lot of misunderstandings about the whole setup of MTHA. Many things are misunderstood and this leads to a lot of problems for many people. For starters, there's confusion -- I know you know, but just to clarify it -- that all non-profit housing is the same, that it's all MTHA, when the reality is that there has been no Ontario Housing built for 25 years; I think I'm correct.

Ms Pat O'Neill: Yes, almost 25 years now. Yes, there is a lot of confusion and certainly people get very excited when they hear "non-profit" and most people are very alarmed about the idea of non-profit housing. Unfortunately, some of the ways in which MTHA has been not only constructed but some of the problems of mismanaging have contributed to those factors. I can think of one particular community of 300 houses, with no basements and no storage rooms for refuse, that had three garbage containers. Consequently, there was always a problem of garbage strewn all over because the containers simply were not large enough to contain the garbage. Naturally, the residents adjacent to that community were very angry.

Sometimes there are such simple solutions to resolving problems between neighbours. Again, it works most effectively when neighbourhoods cooperate and work on those kinds of problem-solving issues.

Mr Frankford: I notice you used the word "design." Much of the design philosophy of that day, when we certainly were not the government, was this high-rise approach with a lot of surrounding lands. If I can get analytical, I think this comes from the Le Corbusier ville radieuse approach of its time, which I think is now totally discredited, but somehow people seem to believe this is an inevitable part of social housing.

Ms Pat O'Neill: There was a very unfortunate phase throughout design where the high-rise tower was seen to be the solution to housing needs. Every city I've ever visited has its own suicide towers, and it's very unfortunate. Obviously, in some places they've started to actually destroy those buildings rather than even try to change that.

The Vice-Chair: Thank you, Mr Frankford. Mr Cordiano is next on the list. We have Ms Carter, Mr Marchese and Ms Harrington still left on the list for your party.

Mr Cordiano: I'd like to get back to the question of salary. I think you said that $65,000 a year was your salary target. That was something that was indicated to you by the appointment board, the secretariat?

Ms Pat O'Neill: Yes.

Mr Cordiano: What was the previous chair's salary? Is there anyone in the audience who can answer that?

Interjection.

Mr Cordiano: Approximately $76,000. Has anyone ever been paid over $100,000 for this position?

Interjection.

Mr Cordiano: Never. It's very interesting. The range for this salary is certainly over $100,000; I believe it went up as high as $120,000. Correct me if I'm wrong. The quotes were that the range was between $60,000 and $120,000, or something in that neighbourhood.

Interjection.

Mr Cordiano: It's between $57,000 and $96,000 for this position.

Mr Mammoliti: Can we have this information perhaps put on the record and answer any questions?

Mr Cordiano: No, I'm repeating what's being said. So the range was between $57,000 and $96,000, something in that area.

Interjection.

The Vice-Chair: We can't have a conversation going on here. You'd better direct your questions to the Chair.

Mr Cordiano: That will be sufficient, Mr Chair. I just needed that information. I'm curious about why the chairs of this position are paid at the lower end of the scale rather than at the higher end of the scale. It's rather curious to me that that would happen. This is not a reflection on you, Ms O'Neill; it's just a commentary I would make, an observation. There's nothing personal in this. If I were hiring someone, I would want to hire someone I thought fulfilled all the qualifications and requirements of the position in every way possible; that this person should be paid somewhere in the middle, at least, or at the upper end of the scale, and then that someone would have all of the necessary qualifications and experience. That would seem to be what would happen over the long term. It is rather strange that we haven't seen that in this position. So either the range is too broad a range or someone is not making this appointment a position according to experience commensurate with the salary. It just seems to me a little awkward that this would happen.

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I would say this, that if you are the chosen appointee for this position and in fact are successful, then obviously there are certain criteria that have been established in order to meet that salary range. I would then say that you should be paid what your experience and qualifications would seem to point to. Why start at the bottom end of the scale, is my concern.

What happens in the private sector is that when someone is hired for a position they're usually in the middle of the range or at the upper end of the range if they have had a lot of experience. What this tells me is that the people who are looking to appoint someone in this position -- and for the last unsuccessful appointee, the quote around the salary range that was offered was also at the lower end of the scale. It would seem to indicate that there isn't the kind of necessary experience there. That's the kind of perception that one is left with. At least the impression of the public will be that this is at the lower end of the salary scale.

I would hope that someone in the government, someone in that secretariat, would take this into consideration, because we would not want to send the wrong message about Ms O'Neill's qualifications and experience. I would hope that would be the case.

Ms Pat O'Neill: The message I'd like to send, Mr Cordiano, is that times are tough and that's a very adequate salary and that I don't think anyone should be looking for salaries at $80,000 during times like this. If one wants to send a message on economy in MTHA, I think one starts with the chair.

Mr Cordiano: I can understand your point, but when someone is going to come out of, say, another position that is paying what a similar position in the private sector would pay, let's compare apples to apples. I would say to you, and I would say this to anybody listening on the government benches, that for this type of position a salary of $65,000 certainly does not compare very favourably to the private sector. In fact, you'd probably be paying somewhere in the neighbourhood of twice that amount for someone in charge of a multimillion-dollar corporation, who is the chair of that type of corporation. That's not something that's very strange if you look at what the chair of Hydro is making, if you look at the various other important positions.

Ms Jenny Carter (Peterborough): And look at the criticism we got.

Mr Cordiano: If this government is saying that MTHA is not an important body and is not an important administrative organization to be headed by someone who has the necessary experience, necessary qualifications and therefore, rightfully so, the appropriate salary level, then I'd say there's a problem. I'd say you are being shortchanged, Ms O'Neill.

Ms Pat O'Neill: I would totally disagree, Mr Cordiano. I made it perfectly clear in my interviews that my interest was in the job. If I were in the position where I could afford to do this job for nothing, I can assure you I would do it. Unfortunately, I have to work for a living, but I think this is a perfectly adequate salary. Salary was not the key consideration for me, I assure you.

Mr Cordiano: Your view as to what is adequate or inadequate is sort of immaterial.

Mr Mammoliti: You're putting your foot in your mouth, Joe. You're not listening to your leader.

Mr Cordiano: Mr Chairman, can I have the floor, please.

The Vice-Chair: Interjections are not accepted.

Mr Cordiano: The appointee's view or opinion --

Interjection.

Mr Cordiano: Can you just be a little polite and courteous?

Mr Mammoliti: I'm trying to help you. You're putting your foot in your mouth.

Mr Cordiano: Mr Chairman, I think you should add a couple of minutes to my time, as I'm being interrupted.

Ms Pat O'Neill: I do understand your point, Mr Cordiano.

Mr Cordiano: Well, let me finish my point, because I haven't finished. My point is very clear. Your view of what the salary ought to be is very unimportant in this consideration. In fact, what we're comparing it to is the private sector or any other similar type of position, whether it's public or private sector. You could compare what similar positions for similar types of organizations, multimillion-dollar corporations, would pay their chairs, and I would say this is a salary that is rather low. If the government is sending out a message that it's interested in restraint, then I think the government should look at all the chairs of all the other agencies, boards and commissions and crown corporations with a view to making a similar point.

Mr Mammoliti: On a point of order, Mr Chair: It's his leader who's sending out this message.

The Vice-Chair: That's not a point of order.

Mr Mammoliti: It's his leader who says we have to --

The Vice-Chair: You know that's not a point of order. Contain yourself. Mr Cordiano has the floor.

Mr Cordiano: As Mr Mammoliti's very interested in what I have to say, I want to move on to the next point, because obviously this point is going over everybody's head on that side, and that's fine.

Mr Chair, I would say I've been interrupted, so with your indulgence, I would like to finish this point. I'm going to quote from what Mr Mammoliti had to say about the question of the refugee housing scam that apparently he's very concerned about. There is, as he described it, a rampant amount of refugee scams going on in MTHA. This has been quoted in various articles in the paper. As I say, it's something he's quite concerned about and he has a number of MTHA units in his riding.

Mr Mammoliti: On a point of privilege, Mr Chair: I want to put on the record at this point that at no time did I talk about refugees with the Toronto Sun or anybody else. I'd be pretty careful in terms of what you say here, Joe.

Mr Cordiano: I don't believe I was saying anything disparaging about the member. I was talking about a view he allegedly held in a quote that was referred to in a newspaper in Toronto. If it's incorrect, that's fine. But quoting from an article in the Toronto Sun, it simply says George Mammoliti said, "`They're all over the place,' said the Yorkview MPP. `It's rampant'," talking about refugee claimants subletting public housing apartments.

The Vice-Chair: Mr Cordiano, you've gone two minutes, pretty near three minutes, overtime. Ms Marland, you're next.

Mrs Marland: Ms O'Neill, how many units does MTHA own and operate at the moment?

Ms Pat O'Neill: I believe there are around 27,000 units directly operated and another 4,000 which are privately managed for the corporation.

Mrs Marland: What's the annual operating budget?

Ms Pat O'Neill: It's $250 million.

Mrs Marland: Did you have a briefing by the minister's staff?

Ms Pat O'Neill: I had some questions I wanted to ask the minister's staff and they were kind enough to answer some of the questions for me.

Mrs Marland: Did you have a briefing in the minister's office or with the ministry staff?

Ms Pat O'Neill: I went to the ministry and yes, I asked to speak to some of the ministry staff.

Mrs Marland: You didn't discuss with them the difficulty of this meeting of the Organization of Ethnic Employees?

Ms Pat O'Neill: No, I did not, Mrs Marland.

Mrs Marland: How do you feel about the fact that a public agency held a meeting for an organization called the Organization of Ethnic Employees in a public building and invited a guest speaker who also sits on a public board paid for by public funds and then, at that meeting, a reporter has her notes stolen or removed, whatever word you want to use, from her at the end of that meeting? How do you personally feel about that?

Ms Pat O'Neill: I feel this is a very unfortunate incident. However, I do not yet have all the facts and I don't think anyone else does, because there is an investigation under way. While I'm certainly very upset about the incident occurring, I would not like to comment further until all of the facts are known.

Mrs Marland: Where you have a public agency like MTHA with public appointees such as yourself as board members and meetings taking place in a public meeting, do you think outsiders should be banned from that meeting?

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Ms Pat O'Neill: I think the board currently has a process whereby part of the board meetings are open to the public and certainly to residents. There are obviously some matters which need to be discussed in camera. I'm sure that, as a former member of a local council, you understand there are issues that have to be dealt with privately.

Mrs Marland: Do you think the Organization of Ethnic Employees should be able to have a meeting with the public banned from their meeting?

Ms Pat O'Neill: I think it's always very appropriate, if you're having a meeting, that you clarify before you start the meeting who is there and you should always be very aware if the media is there.

Mrs Marland: But do you think they should be allowed to ban members of the public from that meeting?

Ms Pat O'Neill: If a private meeting is called to discuss something where they are seeking a resolution to a problem which is a sensitive one, it often makes a great deal of sense to do that.

Mrs Marland: What do you know about the Organization of Ethnic Employees?

Ms Pat O'Neill: Nothing.

Mrs Marland: Can you define for this committee what an ethnic employee is at MTHA?

Ms Pat O'Neill: No, I'm afraid I can't at this point.

Mrs Marland: Do you think that's a void in your background at the moment, as you're about to take over as chair?

Ms Pat O'Neill: It's certainly one of the things I will need to be briefed on and to be brought up to speed on, yes.

Mrs Marland: I'd like to ask you about the selection criteria at MTHA. There is a concern in all public housing authorities in the province about the fact that we have such enormous waiting lists, and I'd like to ask you about the news that tells us that some refugee families are jumping the queue at MTHA, ahead of landed immigrants and other citizens who may have been on the waiting list for years. How do you feel about that?

Ms Pat O'Neill: My understanding is that there is a point system and that those with the most points are the ones who are housed first. That usually means the people with the greatest need. I understand this would certainly cause concern to people who had been waiting a long time and we obviously have to look at the waiting lists and how we can try to accommodate people more quickly.

Mrs Marland: Do you think refugee families should be awarded more points than landed immigrants and citizens?

Ms Pat O'Neill: I don't think refugee status is one of the criteria for points. Family size, income, health problems are certainly some of the criteria I'm aware of in terms of the point system.

Mrs Marland: So would you agree that refugee status shouldn't be part of the point system for eligibility to be on the waiting list?

Ms Pat O'Neill: As far as I'm aware, it isn't.

Mrs Marland: Okay. Would you be willing to advise this committee, when you know something about the Organization of Ethnic Employees, about who is eligible to qualify as an ethnic employee when you become chair of MTHA?

Ms Pat O'Neill: If there's an interest, certainly, Mrs Marland, I'd be glad to talk to you about it.

Mrs Marland: Okay. Are you familiar with the SNI initiatives?

Ms Pat O'Neill: The safe neighbourhoods? Yes.

Mrs Marland: Could you tell us what the current situation is with the incidence of crime and therefore the situation of safety and security in the MTHA developments?

Ms Pat O'Neill: It's my understanding that the safe neighbourhoods initiative projects have been completed and that the feeling among those communities where there were initiatives was much more positive at the end of those projects. There was a lot more community involvement; I think people felt better. There was a general sense of better feeling around their neighbourhoods once those projects were completed. I think there's much more that needs to be done in that regard but I'm really impressed by the initiatives that have been taken so far.

Mrs Marland: If you haven't done very much homework on MTHA, I guess it's going to be difficult for you to answer a question about what areas you think need to be improved. Had you been sitting as a board member, perhaps you would have seen areas coming up that do need handling right away, but without that background I guess it's difficult for you to answer. But I think it's important, when you're taking over as chair, that the priorities of MTHA in terms of immediate problems and challenges are dealt with right away. I'm wondering if you have any idea what those are.

Ms Pat O'Neill: I think I do have a very good idea. I was a resident when the Conservatives initially established Ontario Housing, and therefore I really do have quite an extensive background and knowledge of some of the problems. I have to say that a lot of those problems have not changed over the years. The frustration that tenants feel about the lack of control over their own lives is still very much there.

I think there have been some extremely good initiatives, such as the safe neighbourhoods initiative, such as Planning Together, such as the working group on co-op conversion, that have gone some way towards giving tenants the feeling that they are indeed being listened to at last.

I think there is a lot more that needs to be done around those issues. There are some issues around certain neighbourhoods that the community itself really should have more say in. I think that's what builds good neighbourhoods; that's the way you really do get cooperation in a neighbourhood. I think that's good for both the residents and for the management of the property. Once you have people who are happy where they are living, it certainly decreases vandalism, it certainly creates a more caring community so that people look out not only for themselves but for the property. Those kinds of things really need to be encouraged, and I certainly will be building on some of the initiatives that have happened over the last couple of years in really involving the community in looking after its own neighbourhoods.

The Vice-Chair: Last question, Mrs Marland.

Mrs Marland: Do you agree with the government's current policy not to have seniors-only buildings?

Ms Pat O'Neill: I think it varies. Some senior citizens do indeed like to live where there are families; for others, it's quite traumatic and they don't enjoy it. But I would say again that in a community where there is cooperation, particularly between the front-line staff and the residents, that's the kind of community where a mixed building works very well.

I certainly know of one example in my own neighbourhood where there's a very caring community where children will run errands for seniors, where seniors will give care to a child in an emergency for a young mother. There are some really good examples of where it can work very well. There are other circumstances, and often it depends on the physical structure, where you have a 400-unit building that sort of stretches up for ever and there are thousands of people living there. That can be quite stressful, particularly for seniors who are on higher floors if there's a fire alarm and so on. It really does depend (a) on the physical structure --

Mrs Marland: So you don't agree with seniors-only buildings.

Ms Pat O'Neill: In some circumstances, yes. There are some seniors who actually prefer that, and I think there should be choices.

The Vice-Chair: Ms Carter, you're next.

Ms Carter: Welcome, Pat. I'd like to put on the record, before I question you, that lots of people who have come before this committee -- and I've been on it quite some time -- do in fact say they are not yet familiar with the organization of which they're about to become a part, and that is normally treated as quite acceptable.

Mrs Marland: That's really encouraging, isn't it? They don't know what they're being appointed to.

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Ms Carter: There are limits to how much you can be expected to know before you undertake the job. This is a job where you will not be dealing with the day-to-day management; you have a general manager to do that. What you need, I understand, are strategic leadership abilities. It seems to me that you have some very relevant experience for a job of that kind, and I wonder if you could tell us about some of that.

Ms Pat O'Neill: I have over the years worked with and developed a number of organizations around strategic planning, particularly in my own community. One of the initial ones was the Downsview Western Action Community, a planning group formed in the early 1970s to look at the problems in our community created by a very rapid rate of development. The Downsview Western Action Community was in effect for some 20 years, looking at strategic planning for the community.

Another initiative I headed for a while was Project Rebirth, which was again a revitalization of that planning initiative looking at the community.

I've also worked for community organizations, so I'm really quite familiar with the difference between the roles of the chair and the staff, and I do think the strategic planning, the policy initiatives are the ones where there really is a need for some clarity and some movement at this time. I understand there is a very good general manager who takes care of operations.

Ms Carter: Right. I take it you will be encouraging tenant participation in the initiatives. That's the direction we're going in. I just wonder whether to be seen driving a very expensive car and behaving like somebody on a very high salary might be counterproductive in a position like that.

Ms Pat O'Neill: I really believe that if one is seriously looking at cost controls and ensuring that the best use is made of public money, then one does make that statement right at the top of the organization.

Mrs Marland: And you don't spend $2,800 on taxis.

The Vice-Chair: Mr Marchese is next on the list.

Ms Carter: I just have one more question I want to put. The opposition in the House has attacked the government for its support of affordable housing on the grounds that this is not fiscally beneficial, and I see that the federal government is pulling out some of the support that it has been giving to housing under different schemes. I wonder if you could comment on the benefits or otherwise of putting public money into actual housing rather than just giving a shelter allowance to people who are on benefits.

Mrs Marland: Oh yes, good question, especially if you read the Toronto Star editorial today.

The Vice-Chair: Interruptions are not accepted. Ms O'Neill.

Ms Pat O'Neill: I look back to even my childhood in public housing in England, where there was an investment by the government in housing, and how well that served the community in terms of taking care of people's needs. Again, I was a tenant at the time the Conservatives formed the Ontario Housing Corp and I think it was a very good investment of public funds.

If you look at the appreciation that has occurred in that housing stock, it's irreplaceable. I would compare it to my own small condominium town house that probably initially sold for around $20,000 and at one point recently was as high as $150,000. You can't replace that, particularly because of land costs within the greater Metropolitan Toronto area. It's so essential to have that stock of housing because there will always be some people with need.

Shelter allowances are fine in some circumstances, I think, particularly where a family breakup occurs so that the family can stay in their own neighbourhood with their own friends. They're undergoing enough stress; they don't need to be moved. A short-term shelter allowance in that circumstance is a good use of money. However, I don't think we can afford to endlessly put money into subsidies and have no return on it.

The Vice-Chair: We have four minutes left. If we could make the questions short and the answers short, we'll get through the next round.

Mr Rosario Marchese (Fort York): Just a few comments I want to make for the record. You could comment, if you like, at any point where I break.

On the issue of the appointments process, I wanted to say quite clearly that what we have set up as a government is a process that allows both Liberal and Conservative members to identify those NDPers so they could call them in front of this committee to say that everybody we're appointing is an NDPer. We select approximately 10% of all the appointments. The opposition does a good job of identifying, with a magnifying glass, to the best of their abilities, all those appointments that happen to be NDPers.

Mrs Marland: A magnifying glass? She worked for a member.

Mr Marchese: Where they're not clearly identified as NDPers, or as a person who has worked for a member, in your case, the opposition members have done their best, where they could not clearly identify them but suspected, to say, "Are you an NDP member?" Many of them have done that in the past as a regular pattern. In fact, it's a very disturbing pattern, but that's what they've done for a long, long time, consistently.

I would say this: In our process, we clearly allow them to have this opportunity, as they're doing, to say, "Ah, this is very partisan."

Mr Cordiano: Oh, give me a break.

Mr Marchese: Mr Cordiano, allow me the courtesy to give you some information I think you should have.

Mr Cordiano: I'm sorry. You're absolutely right.

Mr Marchese: I was very polite with the comments you made, and you made quite a number of them.

What I'm saying is, you had no process, Mr Cordiano. You and your government had no process, or, for that matter, the Conservative Party. So when we give you this wonderful opportunity to do this, let's be fair, if you can, if you could imagine what fairness means. Anyway, your disturbing pattern was that you had no process. At least we have a process.

Ms Pat O'Neill: May I comment on the process?

Mr Marchese: Okay. Quickly, though.

Ms Pat O'Neill: I think politicians generally do themselves a disservice when they get too partisan in their attacks. I think we all get to know people we work with and we get to know their qualifications, and I think it's really unfortunate that people who are very qualified in many instances to serve on committees do get attacked because we encourage this kind of thing. I would say that certainly there were a number of the Conservative appointments who were people who I thought were excellent appointments, very good people. I think I'm fair enough to be able to make that kind of judgement. I hope people will judge me in the same way.

Mr Marchese: I accept that and I agree with that. I should also point out that over 90% of our appointments are of people who have different political affiliations, in some cases very clearly affiliated and some not. But that's over 90% of the cases, I dare say, if not more than 90%. Our position as a government is that we believe people have abilities that go beyond their partisanship in order for them to be able to do the job to which they're appointed.

On the whole issue of salary, I'll leave that for a moment, because I think Mr Cordiano made his own case.

On the other matter, there are several points Ms Marland made with respect to whether it's preferable to have a board member as the chair. It's arguable in many different ways; people can argue that however they want. But I can make a case that says the board chair should be not from within but from without, and in many cases it makes sense.

On the whole issue of whether board members existing there would be upset: Well, they're not civil servants, for God's sake, they're appointments. It's not the same to be able to say, "Well, the ones we appoint: Are they upset if they don't come from internally?" It's a different matter, I suggest.

On the issue of the Organization of Ethnic Employees, it's a long discussion and there isn't much time, but to give you my perspective --

The Vice-Chair: I'd like to inform you, Mr Marchese, that you're out of time. You've gone over by half a minute already.

Mr Marchese: Can I finish that point, Mr Chair?

The Vice-Chair: One point.

Mr Marchese: Just that when you get into that chair, if there is such an organization, it doesn't matter to me how they define themselves, except to say that however they define themselves, they may have concerns. It indicates to me there is a problem there. It isn't the conspiracy of the oppressed, although one could say that these people feel oppressed enough that they need to meet to discuss what their problems are, and I would urge you, if that is the case, to meet with these people to find out what the problems are and establish a process to deal with those problems. Good luck.

The Vice-Chair: Thank you, Mr Marchese. Thank you very much for appearing before the committee this morning. The review is now completed.

Ms Pat O'Neill: Thank you.

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ELEANOR CLITHEROE

Review of intended appointment, selected by the third party: Eleanor Clitheroe, intended appointee as member, Ontario Hydro board of directors.

The Vice-Chair: The next we have on our list is Eleanor Clitheroe. Good morning. You're the third-party review, intended appointee to the Ontario Hydro board of directors. I should ask if you have any opening statements or any comments you want to make first. Do you?

Ms Eleanor Clitheroe: No, I don't.

Mrs Marland: Good morning, Ms Clitheroe. You have a very impressive résumé. How do you feel about your appointment to the Ontario Hydro board of directors?

Ms Clitheroe: I'm very pleased to have been appointed and I look forward to serving to the best of my ability.

Mrs Marland: Have you had a briefing with the minister about this appointment and about what is involved with the board?

Ms Clitheroe: With the minister?

Mrs Marland: With the minister or the minister's staff. Have you had a briefing?

Ms Clitheroe: No, I have not.

Mrs Marland: As a member of the board of directors, how will you deal with the fact that -- is this a three-year appointment or a one-year appointment? I'm not sure.

Ms Clitheroe: It's the normal term of appointment, a three-year appointment.

Mrs Marland: So it's possible that you may go through more than one administration as far as the government is concerned, as there will be an election in three years.

Mr Sean G. Conway (Renfrew North): Margaret, that's almost impertinent.

Mrs Marland: It's possible that there may be a change of administration. The current administration is very upfront about its opposition to nuclear generation. First of all, how do you personally feel about nuclear generation versus fossil-fuel generation?

Ms Clitheroe: My perspective on the issue may be more related to the financial side. In the brief time I've had the opportunity to study hydro, my sense of it is that the nuclear and fossil generating plants have different economic results if one looks at the age of the plants, the asset, the investment, the return, the capacities and so on. From that perspective, I think one would have to look at the two types of generation and evaluate the efficiencies of the plants versus the capacity needs in the province and so on. In terms of my role on the board, I think that would be to provide some financial advice and comment on that aspect of the operation.

Mrs Marland: As there are actually three types of generation of electricity in the province, and, as you mentioned, because of your own particular background and the fact that you're CFO right now of Hydro -- you're going to take off your CFO hat and you're now going to be a member of the board, is that correct?

Ms Clitheroe: For the purposes today, I understand you're asking me questions with respect to my appointment as director, but I am also the CFO.

Mrs Marland: Do you remain as CFO?

Ms Clitheroe: I'm also the CFO simultaneously, yes.

Mrs Marland: You are. Oh, I see. I didn't realize that. So you stay as CFO and sit on the board.

Ms Clitheroe: That's correct.

Mrs Marland: That makes a difference, because of any member of the board, your role is significantly dealing with the financial end of the operation.

Ms Clitheroe: That's correct.

Mrs Marland: And how many members are there on the board?

Ms Clitheroe: I believe there are currently 21.

Mrs Marland: What's going to happen when there's a close vote and you're sitting there with your financial hat and you're asked to vote on something that is obviously an ideological focus in terms of an administration that is either pro nuclear generation or opposed to nuclear generation? How do you think you will feel if you have to vote on the pros and cons of a type of generation based purely on who forms the administration that's giving that direction to Hydro?

Ms Clitheroe: I think the circumstance you're describing would be somewhat unusual. I think the board of directors manages the company in a practical financial and prudent manner, and it would be making those decisions on one form of generation or another on that basis. The administration of the day does not, in its capacity as administration, have a vote on the board in its day-to-day operation. I think that would be an unusual circumstance to find any of the directors, not just the CFO director, to be in. I don't anticipate that to be a problem.

Mrs Marland: I'm sure that as the CFO, you've sat in on board meetings, am I right?

Ms Clitheroe: I've sat in on one board meeting.

Mrs Marland: So you haven't been able to really observe how the board operates, but you're fairly optimistic that the board does operate or can operate prudently and be independent of an ideological bent of any administration as far as the Ontario government is concerned?

Ms Clitheroe: The board has fiduciary responsibilities and is required to act in a prudent, responsible manner for the corporation, so I would expect that all of the directors would operate in that capacity.

Mrs Marland: When the board is making the major decisions it has to make right now because of the fact that our fossil fuel plants are in such difficulty, and I'm speaking of one that's 40 years old in my own riding, I think the public generally concedes that with the problems Mr Strong has inherited at Hydro in terms of what Ontario Hydro had become, certainly some of the decisions in the past year have been very brave and, as an outsider, I certainly perceive them as being remedial in terms of the problems that exist.

You get down to the question of: Do you spend more money making coal-fired plants more environmentally acceptable or do you go into using oil more than coal or, ultimately, do we build another nuclear plant in Ontario? There's no choice. To have the amount of capacity without spending millions of dollars retrofitting existing fossil fuel plants and, obviously, as Hydro itself -- well, Hydro's a misnomer, isn't it? The amount of electricity generated by water today is the minimal amount compared to the other forms of generation. But when you get to that position, knowing that a nuclear plant takes 10 or 12 years to build in its entirety by the time it's gone through an EA hearing and so forth, how do you see a 22-member board dealing with that kind of decision? Are you really confident that it can be made purely on the bottom-line financial figure about which type of generation has to be planned for in the next 15 or 20 years in terms of our load demand in Ontario?

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Ms Clitheroe: The financial considerations are obviously one, and a very important, aspect of making any generating decisions. I don't believe it is the only factor. The company currently, under its chairman, has a stated objective of also being a leader in sustainable energy development. That would also be a factor. Environmental issues would also be a factor. I think there'd be a range of issues that the company would appropriately consider, but obviously the financial considerations would also be extremely important.

No, I don't believe it is the only factor one should take into account, but it clearly is one you'd want to be taking into account in the event that the decision would in fact be a costly decision rather than one that is choosing a least-cost or most economic decision on generation.

The Vice-Chair: Your time has more than expired, Mrs Marland. Mrs Carter, you're next.

Ms Carter: Welcome. I don't envy you your situation, because obviously you are concerned with the financial side and that's where the crunch is. As we all know, Hydro has an enormous debt because of what I would say were mistakes made in the past which cannot now be undone. The question is, how is Hydro going to get out of this debt? I hope a long view will be taken of this so that we'll end up where we want to be, hopefully, when that has been achieved. As I say, it is a very, very difficult problem and I'm sure you're well aware of that.

It seems to me that over the years it's been functioning, Hydro has gone through a series of the same repeating cycle, where it has built generating capacity and has then encouraged everybody to use power because it was available and because the cost of building that capacity needed to be paid. Having done that, they have then run into the situation where they needed more generating capacity, which has again produced more investment costs which have to be covered. Of course, Darlington is the ultimate case in point, where vast sums of money were put into generating capacity and now we have the debt and nuclear isn't functioning as well as it had been hoped, obviously.

How do we get out of that? Obviously Hydro is cutting a lot of expenses. Mr Strong has been very determined in that respect. But how are you going to avoid falling into that trap again by saying, "We need to get a return on our investment; therefore we're not quite so whole-hearted about cutting down consumption as we thought we were"? So the conservation program dwindles, and I understand not so much money is budgeted for conservation and renewables and so on as had been expected.

Conservation is still by far the cheapest way of, in a sense, generating electricity, because obviously kilowatts saved are kilowatts you don't have to generate. It's much cheaper to do it by saving it than by generating it. I'm just wondering if you see some kind of strategy that is going to get Hydro out of its financial fix without committing it to a future where the demand is going to continue to rise and therefore create more debt.

Ms Clitheroe: It's obviously early days to give you a very well-articulated and developed vision, but I think the circumstances for the company have changed quite significantly, in large measure as a result of the fundamental changes the whole economy is experiencing. I think what we are seeing is decreased demand and therefore excess capacity probably until the end of the decade, in any event. We're looking at very low real growth, very low inflation. We're looking at restructuring of the heavy power users significantly into different types of configurations. We're looking at an increase in the economy of high-value-added-type businesses, which are lower power users. I think the demand projects we maybe have seen over the last couple of decades we won't be seeing in the next couple of decades.

Ms Carter: Could not this reduction in demand be used as a way to discard some of the nuclear capacity, which is actually extremely expensive to maintain, as we've seen?

Ms Clitheroe: Depending on where the company finally ends its projections with respect to that demand. There's no question that there will be some excess capacity. The question is how much, and that's partly going to depend on the next round of forecasting and so on. But I think there will have to be a question of how to treat that excess capacity, so that will probably be the more important type of decision, rather than the decision-making around building new capacity.

Ms Carter: Do you feel that cost increases should be ruled out? I know there have been significant cost increases in the last few years and the consumers have had enough of that. But is it realistic that Hydro can repair its financial situation while keeping prices as they are?

Ms Clitheroe: I think it is realistic. However, I think the company will undergo a few years of very difficult times, as we've seen in the past year, with major cost-cutting exercises. I think that will be continued into future years as the company adjusts to those new circumstances. But it is also important to think about the pricing on the other side and the cost to the end user so that we do have an engine of economic growth.

I think the issues that we're going to try to balance are the financial soundness of the corporation but also ensuring that the company is an engine of economic growth in the economy as well, combined with its mission to be a leader in sustainable environmental development.

I think it's a question of balancing all of those issues and what the right price for electricity will be out over the next decade. It would be too early to say, but to turn the question in the way you are focusing it is certainly, I think, the right strategy to ensure that the costs are reduced so that those costs don't have to be passed on to consumers in the form of increased pricing which exceeds what one might think of as appropriate in this economic environment.

Ms Carter: Except that there is a tradeoff between cost and use. Obviously, if you want to discourage use, then to increase the cost is a means of doing that, although of course on the other hand, power is essential in so many ways to the ordinary consumer that there's a big downside in increasing costs to those people.

The Acting Chair (Mr Rosario Marchese): Ms Carter, before she answers, I wanted to say that Ms Harrington would like to speak to that.

Ms Carter: I will leave it at that point.

Ms Margaret H. Harrington (Niagara Falls): I have two questions. First of all, last spring Mr Strong announced very fundamental restructuring of three different parts to the company, and I wanted to get your opinion on that as you will now be in a position to not answer to the board but in fact set direction as well. What is your opinion and your vision for the future of the company? It follows what Ms Carter was asking. Do you think those initiatives that were announced are the way to go to attain that kind of control of rates and efficiencies?

My second question is about the heavy power users. I represent the city of Niagara Falls, and ever since I have been here, three years, I've been bringing up the problem of our abrasives industry, which is very heavily dependent upon the cost of power. It's their raw material, in fact 30% to 40% or more of their operating costs.

Norton, General Abrasives and Washington Mills are the three companies that are still left hanging on by their fingernails. They are operating now only one shift, which would be in the middle of the night kind of thing, and I believe they close down for December, January and February just to try to get by.

What can you see for the future of industries like that? They've been in Niagara Falls since the turn of the century. The question is, do they have a future?

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Ms Clitheroe: With respect to your first question on the initiatives, yes, I do think the initiatives that were begun by Mr Strong last year in terms of looking at substantial cost reduction are an extremely important aspect of bringing the company's finances under control. We'll be looking at a similar, obviously not identical, program of continued cost reduction in the company to continue those kinds of initiatives into the new year and into probably the next two or three years. Yes, I do think that is the appropriate way to go.

I think the creation of the three parts, if you will -- there are not separate companies, but three parts -- allows the business managers to focus both on their business but also on the costs of their business. I think that's a very helpful way of having management behaviour developed in the company that assists in keeping those costs under control. I think that is the appropriate way to go.

Mr Conway: I'm pleased to be here, a visitor to this committee. I'm particularly pleased to be here with this particular nominee, which nominee I'm very impressed with and delighted to know that you're going on to the board. I applaud the government for the recommendation.

A very interesting résumé; too bad my friend Margaret is gone. This is very impressive and it's wonderfully eclectic, this interest in everything from teaching ethics to teaching advanced sailing and navigation. I think there's a lot to recommend you just on that alone.

There is no question to me, Ms Clitheroe, about why you're on the board, and it gives me some real comfort; that is, it's obvious that whoever was thinking about your nomination, quite frankly, not just on the board but as the CFO at Hydro, is obviously looking at your background in understanding and working in the capital markets. I wanted to talk a little bit about that.

It is, I think, increasingly clear to a number of people in this wonderful world of Hydro, where I learned a long time ago that religion and theology are much more the drivers of public policy than other apparently more rational factors -- my friend from Peterborough would probably think, and be too polite to say, that no one is more captive and more exhibit of that than myself.

But when I look at the beloved Hydro we have come to know in this province, we've got, dressed down, one of the world's great cartels. Boy, you just have to reread that Power Corporation Act to understand what a magnificent, watertight cartel it has been, with this equally wonderful government guarantee in terms of its borrowing.

Over the course of an expanding 20th century, with its up and downs but with an economic growth trend line that, particularly in Ontario and particularly in the post-war period, it has been up, up and away, with a corresponding line in terms of electricity growth and demand. Now we are in the 1990s, and we seem to be in a very different world. It doesn't just seem to be one of those glitches we've had before, where it trends down, like it did in the early 1980s or like it did in part of the 1970s, but we seem to be in the midst of a major restructuring.

One of the reasons we need to talk about demand management is that we are just sitting here, like an awful lot of other utilities, sinking in excess capacity and red ink, for all kinds of reasons we could all give.

My question to you is, how is the capital world, which you know well, going to react, do you think, to what Hydro will report -- if it hasn't already. We're all expecting a report of, what, about $1.6 billion? Is that the latest number, the loss this year? And for good reasons. Certainly people you know in the financial community will understand why that is. The chairman I think has done a good job of explaining what the ingredients of that are.

But Hydro is now caught, it seems to me, in a culture of being a big cartel, with a high cost structure for Darlington and other reasons and a huge debt load. What do the capital markets seem to be suggesting about the old cartel from where you sit?

Ms Clitheroe: Again, it's early days for me to give you a very in-depth answer on that. The capital markets have exhibited interest in Hydro for many years, the process by which Hydro has disclosed, not only with respect to its normal quarterly statements and annual reports and so on, but it has developed quite a close relationship with institutional investors, rating agencies, people who are interested in following the company's prospects. So I think the view of Hydro is not something that is just suddenly developing; it's something that people have been watching over a couple of years.

I think their view of the company has been that it is, has been and will continue to be an important part of the economy in Ontario, that it has a fundamentally sound prospect, that it is, like many other companies, going through a period of difficult financial restructuring, but that the prospects for it coming through that financial restructuring successfully are very good.

Mr Conway: It was hard in the past for the capital market not to be interested, because what did you have? You had a monopoly doing business in a growing economy, an essential service, with the government guaranteeing the debt. That was much better than buying Bell Canada stock. When you think about it now, it was a pretty safe bet for most people, would you not agree?

Having said that, I'm listening very carefully to what the chair is saying these days, I'm also listening to what my friend the Premier is saying, and certain things seem to be very clear. The restructuring that is under way anticipates a new future, a future that is coming, and is going to be somewhat different from the past. Part of that new future is going to be the way in which new capital is brought into this corporation.

We are having a debate in the Legislature about privatization and the government is making what I would expect to be the predictable comments, but is it not the case that the capital markets out there and others on the street are fully expecting that the new structures that are being put in place, particularly on the non-nuclear side, are being so organized to allow for a much greater share of equity capital?

Ms Clitheroe: With respect to your first question, I think it is correct to say that the markets have thought of Hydro as a good, sound investment. I think that has been internationally as well as domestically the case.

With respect to your second question, the financial restructuring of Hydro will look at a range of issues, including what would be the appropriate capital structure for the corporation, and having looked at what might be the appropriate capital structure for the corporation, how one would obtain those funds.

There is no necessary implication that a reorganization of the capital structure would result in any public, and by public I mean third-party, equity into the corporation. If one was putting on the table all the range of possibilities in terms of changed debt structure, capital structure, equity would clearly be one in the range of a basket one would look at. There are others one would look at, ranging from more specific project financing, revenue, bonds, use or not use of the guarantee in specific circumstances, securitization. So there's a range of instruments and possibilities here in terms of looking at the capital structure of the corporation. If one was looking at all the options on the table, one would look at reformatting the company into a share capital corporation, but not necessarily.

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Mr Conway: Mackenzie King couldn't have said that better. It's almost unfair of me to ask these questions of you because they will be decided by the board and ultimately by the government, but it seems inevitable -- it couldn't be clearer to me -- what's going to happen. We're allowed a certain flexibility now because we haven't seen a depression in demand like this -- and it may be a good thing -- since the early 1930s. We've not seen so many quarters of such dismal demand since -- I might be wrong on this, but I doubt that I am. I think you have to go back to the pit of the Depression to find the kind of lack of demand that we've seen in the last, now, three and a half years. And I don't blame that on the current government; that wouldn't be fair. I'm not always fair, but I don't think it would be in that case.

Let me just ask you again, though: When I look at what I think are the two defining characteristics that have made Ontario Hydro the beloved creature we know it to be, I would say it is those two things: It is the wonderful monopoly that all of us have afforded over many years that is contained in the Power Corporation Act -- and one just has to re-read that; I was doing it a few years ago and I was stunned by how we've tied up the loose ends over the decades -- and the guarantee.

The Vice-Chair: If you'd just wrap up, Mr Conway, you've run over your time.

Mr Conway: If we took one or both of those away, from your point of view, if a government were to say, "We are no longer going to provide a guarantee for new Hydro borrowing," do you think that would be a significant factor in the new world?

Ms Clitheroe: I think it is possible to finance government projects generally, including -- if one looked at the provincial infrastructure projects and so on, I think yes, it is possible for the Hydro corporation to issue debt without a guarantee.

The manner in which the market was approached on the reasoning why the guarantee would not be there and the structure of the debt one would be offering without the guarantee I think would play a very important part in whether the market would actually accept that debt with or without a guarantee, but I do think it is quite possible.

The Vice-Chair: Thank you very much for appearing before the committee this morning, Ms Clitheroe. We wish you well.

NHUNG TOMKINS

Review of intended appointment, selected by the government party: Nhung Tomkins, intended appointee as member, Board of Inquiry.

The Vice-Chair: Our next individual to appear before the committee this morning is Ms Tomkins, an intended appointee as member of the Board of Inquiry of the police services board, I understand. Would you like to come forward and have a seat at the front? You have the opportunity, if you like, to have an opening statement or a few remarks, or we can go right into questions. It's your choice. The government party is the party that picked you as an individual to interview.

Ms Nhung Tomkins: Good morning, all members of the committee. Do you hear me properly?

The Vice-Chair: Yes.

Ms Tomkins: I do not have any comments, but I am very pleased to be here today. Bonjour, tout le monde du comité. Je suis très heureuse d'être parmi vous aujourd'hui et je serais ravie de répondre à toutes vos questions en français ou en anglais, selon votre choix.

Mr Marchese: Obviously, you speak more than one language; I gather you speak about three. Vietnamese is your other language, correct?

Ms Tomkins: Yes.

Mr Marchese: Do you think that would be an asset for you in this job?

Ms Tomkins: I think so. Being able to understand Vietnamese, French and English gives me a benefit not only to understand the language but also to understand the culture.

Mr Marchese: Do you think monolingualism can be cured? You don't have to answer that question.

There are a lot of people who confuse the police complaints commission and the Board of Inquiry in terms of the different functions they perform, and I suppose there's a great deal of need to educate the public about these differences. Can you explain or at least describe the nature of those relationships for us?

Ms Tomkins: The Board of Inquiry is a civilian tribunal independent from the police and the government -- it's a fairly new board that's just being set up -- and the police complaints commission's role is to receive complaints from members of the public, monitor its own complaints from the police, and order the hearings

Mr Marchese: What kinds of experiences do you have? I assume that much of what you'll be doing requires a great deal of mediation or at least that kind of role. What experiences do you bring that you think would make you a good mediator in these kinds of Board of Inquiry decisions?

Ms Tomkins: Apart from my working experience as executive director, I have experience with my own community where I did participate many times in mediation in family disputes. It gave me experience and gave me an openness. It made me a better, open listener with fairness, to analyse evidence, to arrive at a good decision.

The Vice-Chair: Any further questions from the government side? Ms Carter, did you have any questions? No. Mr Frankford? No. Okay, the opposition.

Mr Conway: It just looks like an excellent résumé. I am very impressed. Good luck in a tough, thankless job.

The Vice-Chair: Mr Bradley, did you have some questions?

Mr James J. Bradley (St Catharines): What job is this?

The Vice-Chair: Board of Inquiry, Police Services Act.

Mr Bradley: Good luck.

The Vice-Chair: Well, that was the shortest interview we've had for a long time. We want to thank you for coming and appearing before the committee. We wish you all success.

This committee will now determine whether the committee concurs in intended appointees reviewed this day.

Mr Marchese: I move concurrence on all the appointments.

The Vice-Chair: Mr Marchese moves concurrence on all the appointments. We can have them all together or individually if the members wish. We will proceed with the motion that we concur.

Mr Conway: I missed the first one. I wasn't here and I can't speak to it.

The Vice-Chair: The first one was Pat O'Neill.

Mr Conway: I can't speak to that. I have no idea. Oh, that's the famous Pat O'Neill, is it?

Mr Marchese: Correct, yes.

Mr Conway: I'm quite happy to assent to the two for which I was in attendance.

Mr Marchese: We'll do them seriatim.

The Vice-Chair: We will concur that they're all acceptable. The motion is carried.

I understand that the committee will now adjourn until next Wednesday at 10 am. The subcommittee hopes to meet after question period is over.

The committee adjourned at 1148.